Tuesday, July 29, 2008

"Casual Food" chains the latest victims of the faltering economy

July 29 (Bloomberg) -- Bennigan's and Steak and Ale restaurant chains, owned by Metromedia Restaurant Group, are closing many locations and seeking to liquidate under bankruptcy court protection.

The closely held chains listed assets totaling as much as $778.9 million and debt of as much as $324.2 million in 38 separate Chapter 7 petitions filed today in U.S. Bankruptcy Court in Sherman, Texas.

Metromedia Restaurant is part of billionaire John Kluge's Metromedia Co. group. In June, the Plano, Texas-based chain operator said it would ask lenders to restructure its debt as the slowing economy hurts earnings. Two of its other chains, Bonanza Steakhouse and Ponderosa Steakhouse, haven't sought bankruptcy.

I'm not a fan of the kind of "casual dining" chain restaurant represented by Bennigan's, Steak & Ale, Applebee's, TGI Friday, the Olive Garden, etc. I tend to think that their food is uninspired, mediocre, and standardized to the point of tastelessness - like McDonalds, only more expensive and with waiters. I've always prefered to dine at local, family-owned restaurants. Local restaurants are usually staffed by people who actually care what their food tastes like, and it shows. In Tulsa, for example, I would make the comparison between, say, El Chico, a national chain, and Arizona Mexican Restaurants, a local chain with about a half dozen locations. El Chico tends to be overpriced and kind of "meh," while Arizona restaurants feature delicious, very authentic, Mexican dishes.

However, I did have a soft spot for Bennigan's. They were the one chain that had a really good beer selection, and we can't forget that infamous Monte Cristo sandwich. That deep-fried, bizarre, disgusting, delicious abomination satisfied many of my late night cravings over the years. I also liked their utterly weird "southwestern eggrolls."

My partner and I had the 2nd part of our 1st date at a Bennigan's in Tulsa (we met at the Gypsy Coffee House - but that's a story for another day). That Bennigan's is closed now, which is kind of sad. Now two of the sites featured in our first few encounters are no more - Bennigan's, and the Lewis location of Szechuan Express.

This massive bankruptcy will also mean that hundreds of restaurant workers will lose their jobs very suddenly. And when you're a restaurant worker, you probably don't have gobs of money in savings, so it's going to be hard for a lot of people.

This bankruptcy is another reason why we need to undertake major Federal legislation to fix the economy. Get people to work fixing our bridges, highways, and levees. Get people to work at our nation's ports, inspecting incoming cargo, which isn't being done. Hell, get people to work as job counselors. Create a national job counseling program. The key is that we need to get people to work. That's the only way to stimulate the economy in the long term.