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Restaurant Chain Economics

Touch the Soil News #1001 (Feature photo – Subway Restaurant – CCA SA 4.0 International) Word is out that Subway Sandwiches is planning to close an estimated 500 locations in the U.S. This comes on the heels of closing some 800 locations in the U.S. last year. At the same time, plans are to open 1,000 new restaurants around the world. One wonders what this says about economics – or better yet – the purchasing power of folks here at home. Is it possible that competition coupled with stagnant wages is limiting the number of jobs and industry? Overall, Subway has approximately 44,000 locations in 112 countries according to its…

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Romano’s Macaroni Grill – A Food-Chain Nose Dive

Touch the Soil News #844 (Feature photo – Macaroni Grill Restaurant – Vercilio CCA SA 3.0) Economic news is often slanted towards the ever elusive dream – the economy is improving. The story of the restaurant chain – Macaroni Grill – is stellar in its collapse. The chain at one time had around 230 locations, but its decline has hit rock bottom this week. Here are the highlights of the fall: In August of 2008, Macaroni Grill had a deal to sell 80 percent of the chain to Golden Gate Capital for $131.5 million. The deal did not happen. Within months, Golden Gate Capital bought its 80 percent of the…

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Restaurants in Trouble?

Touch the Soil News #558 Casual dining restaurants like Ruby Tuesday and Johnny Carino’s are but two of dozens of chains having to close locations due to faltering traffic. In an earlier News piece, we revealed that on average, 850 new restaurants open every month. On the flip side, some 1,400 restaurants close every month. Recently BMO Capital released a new analytical estimate that the casual dining sector may be over-supplied by some 4,500 locations. Given the rate of restaurant closures, it may not take that long to thin the ranks. Other than a couple of months over the past three years, traffic through casual dining restaurants has been decreasing –…

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