I found an insightful article over at QSR Magazine that discusses the perils of bankruptcy in the food-service sector.
As you may know, I successfully restructured Fatburger while under Chapter 11 protection. For ailing companies, sometimes it feels like a last resort, but I’m here to say that bankruptcy doesn’t carry the stigma it used to. Not only that, it can be the one tool in your arsenal that can help reset your company and get things growing again.
The article examines the issue of bankruptcy from the perspective of several CEO’s from the restaurant sector, like Friendly’s Ice Cream CEO John Maguire (pictured), as just one example. Please take a moment to read the entire piece, but here are some great quotes I pulled to give you a quick idea:
“I think unfortunately what happened to Friendly’s was not a unique story,” he says. “What happened to Friendly’s over the last 10 or 15 years was a story of this: As sales fell, people panicked and tried things out of panic to get things to rebound.” Maguire, who joined Friendly’s after nearly 20 years at Panera Bread, says the challenge for legacy brands like the nearly 80-year-old Friendly’s is to stay true to the brand identity while also remaining relevant in the 21st Century.
Yours truly received a chance to chime in on page two.
“Bankruptcy is a tool to use carefully to resolve very specific problems. It’s not for everybody,” says Andy Wiederhorn, CEO of Fatburger. “You run the risk of losing control of the process when the court and other creditors are involved.”
Thanks again to Kevin Hardy from QSR for the great article and for reaching out to me for comment.