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Bennigan’s, Steak & Ale file for bankruptcy
Bennigan’s, Steak & Ale file for bankruptcy
NEW YORK (AP) — Restaurant chains Bennigan’s and Steak & Ale have filed for Chapter 7 bankruptcy protection and will shut their doors, less than two months after their parent company said it was not preparing to do so.
The companies filed for bankruptcy protection on Tuesday in the Eastern District of Texas. Their parent company – privately held Metromedia Restaurant Group – is based in Plano, Texas.
In a Chapter 7 bankruptcy filing, a company seeks to liquidate its assets and shut down.
‘Closed for business’
Employees at a Bennigan’s in Plano were greeted by a sign Tuesday on the front door reading “WE ARE CLOSED. THANK YOU.” Next door, a Steak & Ale sat empty in a deserted parking lot but there was no sign posted.
A waiter named Steve, who wouldn’t give his last name, said the staff got a phone call Tuesday morning telling them the restaurant was closing.
Neither Bennigan’s nor the Metromedia Restaurant Group returned calls for comment. A lawyer listed in the filing, J. Michael Sutherland of Carrington, Coleman, Sloman & Blumenthal LLP, did not return a call.
According to a recorded message on the law firm’s answering system, not all stores using the Bennigan’s and Steak & Ale trade names have filed for bankruptcy and some franchise locations were not included in the filing.
List of debtors
The filing lists 38 separate entities that it classified as “debtors” but does not include a list of locations that are shutting down.
All restaurants have been struggling as consumers cut back on discretionary spending to better deal with high gas prices, the weak housing market and inflation. The hardest hit have been casual dining chains and bar and grill restaurants, which charge higher prices than fast food and other quick-service chains.
Bar and grill restaurants have also suffered from intense competition. Morningstar analyst John Owens said several chains expanded quickly, making it more difficult for customers to differentiate between them and forcing many companies to cut prices to lure diners.
“Bennigan’s was the weakest of the major players,” Owens said.
Meanwhile, commodity costs have soared, forcing chains to either raise menu prices or see profits plunge.
Credit has also been tight, making it difficult for companies to restructure their debt.
In June, Metromedia Restaurants said it was formulating a proposal to present to its lenders to restructure its debt, but said it was not preparing to file for bankruptcy.
Repaying creditors
In the filing, the company indicated that it has up to 49 creditors. It said it will have no funds left after administrative expenses are paid to repay its creditors.
The news appeared to be a shock to most of the company’s employees, but some may have had an inkling that the company was not doing well.
Steve, the Bennigan’s waiter in Plano, said he recently went from making $30 on a good lunch shift to only $10.
“Business has been slow,” said Steve, who said he relies on tips. “I went from making a lot of money on a shift to making very little.”
Interesting article, best way to measure your guest perceptions is to have a detailed Mystery Shopper Program in place
Guests Less Satisfied With Amenities, Guestroom Features
J.D. Power & Associates — Hotels, 7/29/2008 10:19:00 AM
As hotel brands contend with the challenge of trying to cut costs during economically difficult times while still attempting to meet high customer expectations, overall satisfaction with hotels is down notably in 2008, according to the J.D. Power and Associates 2008 North America Hotel Guest Satisfaction Index Study(SM) released today.
Now in its 12th year, the study measures overall hotel guest satisfaction across six hotel segments: luxury, upscale, mid-scale full service, mid-scale limited service, economy/budget and extended stay. Seven key measures are examined within each segment to determine overall satisfaction: reservations; check-in/check-out; guest room; food and beverage; hotel services; hotel facilities; and costs and fees.
Four of the six segments — upscale; mid-scale full service; mid-scale limited service; and economy/budget — decline in overall satisfaction, compared with 2007. In particular, overall satisfaction with the economy/budget segment declines significantly, posting the largest year-over-year decrease of any segment since the inception of the study. Among economy/budget properties, the largest declines in satisfaction occur in the guest room and food and beverage measures.
“While it may appear that difficult economic times are forcing consumers to move down market, or that an increase in average room rates has strained this price-sensitive segment, in actuality, only 23 percent of guests indicate that they are new to economy/budget hotel chains — slightly fewer than in 2007,” said Linda Hirneise, executive director at J.D. Power and Associates. “For economy and budget properties, the challenge lies in meeting high customer expectations regarding product factors, such as the comfort of beds; room decor; in-room business amenities; and the variety of complimentary food and beverage choices. While many economy and budget brands had begun implementing new product and food and beverage initiatives in the past few years, tight economic times may have forced these properties to slow their progress on these enhancements.”
The study finds that although satisfaction is down overall, the majority of hotel brands that rank highest in their respective segments in 2008 have maintained consistently high levels of customer satisfaction since 2007. Five of six brands receiving awards in 2008 have ranked highest in their segment for at least two consecutive years.
The following hotel brands rank highest in guest satisfaction within their respective segments:
— Luxury: The Ritz-Carlton (for a second consecutive year)
— Upscale: Embassy Suites Hotels (for a second consecutive year)
— Mid-Scale Full Service: Hyatt Place
— Mid-Scale Limited Service: Drury Inn & Suites (for a third consecutive
year)
— Economy/Budget: Microtel Inns & Suites (for a seventh consecutive year)
— Extended Stay: Homewood Suites (for a second consecutive year)
“Microtel Inns & Suites performs a particularly impressive feat by ranking highest in the economy/budget segment for a seventh consecutive year — something no other brand has achieved in this study’s 12-year history,” said Hirneise. “Drury Inn & Suites has achieved the highest ranking in the mid-scale limited service segment for a third consecutive year, and has also attained a 3-year high in overall satisfaction.”
The study finds that problems with hotel/room maintenance are more common in 2008, compared with 2007, with this issue being one of the top five most frequently reported by guests across all segments. In the extended stay segment, Internet usage (particularly connection and speed) makes the list of the top five problems for the first time in 2008. Among luxury hotel guests, parking issues emerge within the top five most frequently reported problems for the first time.
“Changes in the problems that are most frequently reported by customers demonstrate how product issues have affected guest satisfaction in all segments throughout the industry,” said Hirneise. “Although the market is softening, hotel chains should realize that now is not the time to ignore facility and room maintenance. Guests expect clean surroundings and rooms with everything in working order. Sacrificing maintenance standards in order to save on operating costs could mean also sacrificing the satisfaction of guests. Technology offerings also need to be in top working order to avoid disappointing guests. In addition, while guests who visit luxury hotels tend to be somewhat more immune to price pressures, parking fees are becoming more commonplace and an increasing source of dissatisfaction among these guests, who may be used to complimentary parking.”
The study also includes the following key findings:
— Guest awareness of property-initiated “green” programs declines
significantly in 2008, with 57 percent of guests stating that they were
aware that their hotel offered environmentally friendly conservation
programs, compared with 63 percent in 2007.
— Nearly nine of 10 guests (89%) say they prefer a smoke-free hotel
environment in 2008, compared with 79 percent in 2006.
— The proportion of hotel guests making reservations online continues to
increase steadily — 52 percent of guests made their reservations
online in 2008, compared with 44 percent in 2007.
The 2008 North America Hotel Guest Satisfaction Index Study is based on responses gathered between June 2007 and June 2008 from more than 53,000 guests who stayed in a hotel between May 2007 and June 2008.
Find more detailed findings on customer satisfaction with hotels by reading an article and reviewing hotel ratings at JDPower.com.
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Web-based programs take the pain out of shift scheduling
By DINA BERTA
WASHINGTON (July 21, 2008 ) —When server Anne Lettieri needs to know the weekly schedule for her shifts at The Tombs restaurant here, she checks her e-mail, or she can opt to get the schedule in a text message on her cell phone. If she wants to add a shift at the casual-dining restaurant or swap with someone, she then can send out an e-mail or text message to her co-workers.
Some Web-based scheduling programs send shift information to employees by text messages.
“That’s a big advantage,” said Lettieri, who has been waitressing for the past year at the rathskeller-style eatery near Georgetown University, one of 13 establishments run by multiconcept operator Clyde’s Restaurant Group.
Looking to improve the ease of scheduling for managers and to better connect with younger, techsavvy employees, more restaurants are trading in paper and pencil for Web-based scheduling programs, which can reduce the amount of time managers spend putting schedules together and increase employee satisfaction with their shift assignments.
Since making a switch to Schedulefly.com, a Web-based scheduling program, The Tombs’ executive manager, Ken Siegrist, has cut in half the time it took to schedule 100 employees.
The program also has eliminated arguments and confusion over shifts, he said.
“They are much happier,” Siegrist said. “You can’t image how more efficient this is.”
One of the leading causes of employee turnover in the industry is dissatisfaction with work schedules. In exit interviews with more than 2,300 hourly restaurant employees, 81 percent said scheduling was their primary reason for leaving and seeking another job, reported Goodwin & Associates, a Concord, N.J.-based human resources consulting firm.
Scheduling is also an issue for restaurant managers. Out of more than 1,600 exit interviews, 67 percent said their work hours and schedules were not realistically presented when they interviewed for the job, Goodwin found.
For managers, the main complaint was too many hours and too many weekend hours, according to the survey. Hourly employees, who were mostly front-of-the-house workers, complained they did not get enough shifts.
“Our data shows managers leave their positions in search of more flexible schedules, while hourlies covet the night and weekend shifts,” said consultant Eric Goodwin.
Automating the scheduling process cuts down on human error and makes it easier for employees to change their shifts, said restaurant and human resources managers.
The Tombs’ executive manager Ken Siegrist saysSchedulefly.com has cut in half the time it takes to schedule 100 employees.
Irvine, Calif.-based Claim Jumper restaurants last year began rolling out a Web-based program, HotSchedules.com, to its 45 stores in eight states, said Avery Block, people and brand manager.
“If an employee had a family emergency or last-minute vacation and needed to get a shift covered, he or she would have to go to the store, fill out the shift trade book and wait for someone to pick up their shift,” Block said. “Now it’s so much easier for employees.”
The programs create a home page for a restaurant. Employees get a password and login so they can submit their availability and learn their schedule for the week.
The systems give managers lists of who is available for what shifts so they can set the schedule. Most managers give employees a deadline by which to submit their shift requests. If employees decide to trade shifts, the manager gets a notice to approve or deny it.
Gone are the arguments about who agreed to work when, said Christine Fiorini, operations manager for the Partners II Pizza restaurant in Atlanta’s Peachtree City section, one of the four pizzerias in the area.
The program has cut her scheduling time in half, but she was skeptical when a representative from Raleigh, N.C.-based Schedulefly.com first approached her, Fiorini admitted. After employees learned about the program, they encouraged her to consider it for the restaurant.
“This generation is so wired; it’s so easy for them,” she said of the high school and college students who work in the restaurant. “When I put a message on the bulletin board on the home page or e-mail or text them, I know they received it. I know 90 percent of them have a phone in their hand constantly.”
Today’s young workers are very Web-savvy, said Tyler Rullman, chief operating officer of Schedulefly.com , which also has integrated its service with social-networking sites, such as Facebook.com, so employees can check on their work schedules while they are on Facebook.com.
“This fits in with their way of living,” Rullman said.
Online scheduling, while not widespread, is becoming a popular management tool in the industry, operators said.
“I think it’s on everyone’s wish list,” Block said. “It’s a cost issue, a budget issue and time issue. You really have to have a team dedicated to the rollout. I think this is something you will see the number of users increase in the next year. It’s definitely an attraction, and it absolutely saves managers time.”
