Friday, January 27, 2012

BUFFETS, INC. IN BANKRUPTCY AGAIN

On Wednesday, January 18, 2012, Buffets, Inc. the parent corporation of Old Country Buffet, Ryans, Hometown Buffet, Fire Mountain,Grannie's Buffet, and Tahoe Joe's voluntarily filed for bankruptcy under Chapter 11 in the Federal Bankruptcy Court in Delaware. This is the second bankruptcy filed by this corporation in four years - the first in 2008. They stated that their intention was a reorganization that they worked out with "senior lenders" who hold 83% of the corporation's debt.

On Thursday, January 19th, on the Old Country Buffet Facebook page the corporation posted the following statement:

"The decision to close a restaurant and leave one of our communities is always a tough one for us. We know there is an impact not only for our own associates, but also for the guests who have supported us. Unfortunately, the realities of today's economy mean that we have to make hard decisions, and we sincerely regret that we won't be able to continue to serve our loyal guests in some locations. Thank you for being part of our family."

The comments that followed were all focused on what does this mean - what locations are you closing. It was soon discovered through web search that Buffets, Inc. would close 81 of their 494 restaurants spread across all of the chains that they own. It was also discovered that the corporation would not disclose the list of restaurants that they would be closing in respect of the employees to be affected who they wanted to inform first. Sounds nice, doesn't it. Here is what happened.

On Friday, January 20, 2012, representatives of Buffets, Inc. walked through the doors of 81 restaurants and informed managers and employees that this would be their last day of employment. This was their idea of personal and advanced notice. Customers were shocked to visit these restaurants and find a closed sign on the door.

Many of you who read this site regularly will recall when the the same Buffets, Inc. bought the Ryan's chain several years ago and then walked in to many, many of those restaurants the same way and announced that the location was closed - no advanced notice to anyone. You read here the reaction of employees and location managers who told their stories in comments made to articles on this site about the closing - and articles were devoted just to them.

Of course, this is not the first, or second time that Buffets, Inc. has done this. When the first bankruptcy was declared by them in 2008, they closed 50 restaurants.

The CEO of the corporation, Mike Andrews, states that a store by store examination was made of "financial performance occupancy costs, market conditions and long-term strategy" and that stores that were closed were "under-performing". If you go by customer, employee, and manager reports this was not the case - and a number of the restaurants closed were busy and making money. They also announced that they "need to gain more favorable lease terms with the rest of the landlords, and Buffets said additional closings could be required if leases cannot be modified on acceptable terms" ( quotes from GlobeSt.com). So there is a good chance you may still travel to your nearest OCB and find it closed.

Restaurants were closed across the country. There still is no complete list from Buffets, Inc. that has been made public. There are reports on OCB's Facebook from customers of some of the stores that they have seen closed. Buffets sent emails to those on their email offers list in areas where stores were closed that included a coupon to take to the next closest OCB which was named in the email - some more than fifty miles away. Those with gift cards would have to find another OCB to use them at - and in some areas there just were not any to be found. Thanks to a reader - here is a list of those locations closed last week:

BROOKFIELD, WI - OCB, ANDERSON #1, SC - RYAN,TAYLOR, MI - OCB, COLUMBIA #2, SC - RYAN, RACINE, WI - OCB, GREENVILLE #2, SC - RYAN, FLINT #2, MI - OCB, MARTINEZ, GA - RYAN, LOMBARD, IL - OCB, WARNER-ROBINS, GA - RYAN, WESTFIELD, IN (T) - OCB, CALHOUN, GA - RYAN, WESTLAND, MI - OCB, NORTH CHARLESTON, SC - RYAN, NORRISTOWN, PA - OCB, CANTON, GA - RYAN, INDIANAPOLIS #2, IN - OCB, JOHNSON CITY, TN - RYAN, WEST SPRINGFIELD, MA - HTB, FAYETTEVILLE, NC - RYAN,
FLORISSANT, MO - HTB, SLIDELL, LA - RYAN, GOSHEN/ELKHART, IN - OCB, BEAUMONT, TX - RYAN, FAIRVIEW HEIGHTS, IL - HTB, WHITE SETTLEMENT, TX - RYAN, WEST DUNDEE, IL - OCB, BATON ROUGE #2, LA - RYAN, SOUTHGATE, MI - OCB, GASTONIA, NC - RYAN, SPRINGFIELD, PA - OCB, TULSA #2, OK - RYAN, ANN ARBOR, MI - OCB, CONWAY, AR - RYAN, COUNTRYSIDE, IL (T) - OCB, CLARKSVILLE, TN - RYAN, NAPERVILLE, IL - OCB, JACKSON, TN - RYAN, MOUNT CLEMENS, MI - OCB, NEW BRAUNSFELS, TX - RYAN,
BENSALEM, PA - OCB, SENECA, SC - RYAN, SPOKANE #2, WA - OCB, MURFREESBORO, TN - RYAN, VESTAL, NY - OCB, AUSTIN, TX - RYAN, KENOSHA, WI - OCB, CARTERSVILLE, GA - RYAN, MECHANICSBURG, PA - OCB, OAKRIDGE, TN - RYAN, O'FALLON, MO - HTB, CLEVELAND, TN - RYAN, GREENSBURG, PA - OCB, STOCKBRIDGE, GA - RYAN, BUTLER, PA - OCB, WILKESBORO, NC - FMTN, LONG BEACH, CA - HTB, GEORGETOWN, SC - RYAN, LOUISVILLE #3, KY - HTB, MARIETTA, OH - RYAN, WYNCOTE, PA - OCB, THOMASVILLE, GA - RYAN, BRADLEY, IL - OCB, HOT SPRINGS, AR - RYAN, NORTHLAKE, IL - OCB, SPRINGFIELD #2, MO - RYAN, MACON #2, GA - RYAN, SPOKANE #1, WA - OCB, OKLAHOMA CITY, OK - RYAN, MORRISTOWN, TN - RYAN, LANCASTER, CA - HTB, TILLMANS CORNER, AL - RYAN, CONCORD MILLS, NC - RYAN, UNION CITY, CA - HTB, AUBURN, IN - RYAN, SPANISH FORT, AL - RYAN, WEST HARTFORD, CT - HTB, ARLINGTON, TX - RYAN, WARWICK, RI - HTB, CANTON, OH - HTB, JOLIET #2, IL - OCB

My most sincere wishes and condolences to those employees and managers who now find themselves out of work. If you are reading this and wish to comment, please do so (please keep the language as civil as possible as this is a family site and I want to include what all of you have to say). In these difficult economic times this is a tragic. There are employees who have worked for this company for twenty years who are now out on the street without a job. I have to wonder what cut in salary Mr. Andrews has taken and what cuts of the corporate level management and employees. It is easy,Mr. Andrews, to sit in a large office building and play with the lives of people who depend on you for the livelihood of themselves and their families off in your distant locations. You are not the one who has to look at them as they walk out the door for the last time.

Sad times, and becoming just too commonplace.

13 comments:

Anonymous said...

ryans in Hot Springs Ar was one of the best restaurants here. It will be missed. I think it was a very foolishmitries move by the company. You had a very loyal customer base and served a large percentage of the population in Hot Springs.
Perhaps someone else will reopen and the public will return. I feel sorry for the loyal employees who were fired in one day with out notice.






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Anonymous said...

Get rid of Marc Hostelier in Picaune Mississippi. He is the reason Slidell Ryan's & Baton Rouge Ryan's are closed. 100+ employees out of work. Marc is still standing, like the coward on that cruise ship.

Anonymous said...

Mike Andrews made a big mistake when he chose to purchase the Ryan's chain in 07. Everything went downhill after that.

RemixedCat said...

this shall be done in 2 parts for char. limits:

In this latest move of closures, you shut down basically (at least in my area) all the locations which were the ONLY DEDICATED BUFFETS

for MILES around (Golden Corral doesn't count, you'd have to pay ME to eat there, in my personal opinion, but I digress). In other words, you had locations with GUARANTEED INCOME due

to having NO COMPETITION. And those are what you closed.

Meanwhile, you kept open locations in big cities with TONS of other buffets. In other words, they're NOT guaranteed income, and have to work extra hard to make themselves favorable

compared to their neighbors in order to keep business. Higher investments, more micro-management.

And in the case of Columbus, you have SEVERAL locations remaining open all at the same time, in the same city! So you even have individual restaurants competing against each other,

multiplying operating costs while each location makes back less over-all.

While all those small- and mid-size-town locations would have less pressure, and be guaranteed to make profit just from existing and doing their job.

As Rick Coleman pointed out, perhaps you guys did have to close locations... but you closed the exact wrong ones. You closed the ones that had guaranteed constant stream of income, by

virtue of being the only buffet restaurants in their areas. And leaving the workers with very little or nothing in terms of alternate employment.

And instead, you kept the locations that have to fight tooth-and-nail for customers that are spread thinly over a multitude of other buffets. In big cities where the displaced employees

would have had a better chance of finding a new job or receiving financial assistance.

You guys did everything wrong. Don't point fingers at the economy, when what you guys are doing is exactly what is CAUSING the bad economy in the first place. Your mistakes are

affecting tens of thousands, maybe hundreds of thousands of people.

This move of yours has absolutely NO BENEFIT WHATSOEVER, and is only causing misery and anger and might lead families to have health problems or even DIE from being unable to afford

heating their homes in the middle of winter!

Don't you DARE take this lightly. You guys need to FIX THIS quickly, or in no time you'll be DISSOLVED COMPLETELY.

RemixedCat said...

part 2 of 3:

Sure, blame the economy. You know WHY the economy is bad? Because of lack of jobs, which is a cycle YOU GUYS facilitate with actions like this! You guys made POOR BUSINESS DECISIONS,

again NOTHING to do with the economy. You should have learned from mistakes and improved.

Let me SAVE YOUR BUSINESS for you with a little COMMON SENSE. Listen:

You guys kept on closing the BEST locations and leaving the bad ones. Saying you chose "under-performing locations" is an utter lie. Case-in-point, our local Parkersburg location where

business was BOOMING, the place was PACKED, the food was AMAZING, and the service was WONDERFUL. The manager and employees LOVED their jobs and took them very seriously.

Meanwhile, the Maretta, OH location was disgusting, dirty, poor food, and the manager was a jerk. Which one did you guys close first in that first set of eliminations? Uh huh, the GOOD

Parkersburg one. Many others shared similar stories of that disaster, so this wasn't a one-off case.

You also overcharged at many locations afterward. In this economy you so vehemently blame, what you should have done is LOWER the prices, so more people can AFFORD to come there,

and you make MORE PROFIT in the LONG RUN by SHEER NUMBERS.

Look at Little Caesar's pizza. They make quality pizza, hot-and-ready, for only $5, when most pizza places take their time and charge $15-$25. So now LC is outta business, right? Nope!

Business is BOOMING! The door rarely stays closed for more than a minute at most locations, people coming and going all day. Because now, it's not a big financial deal to get a pizza when

it's AFFORDABLE. What started as a one-off temporary sale, became their business model for the past several years, with no sign of stopping.

When will companies learn? Most people don't make much money nowadays, so if you overcharge, you only have a small percentage for a customer base. Charging $12-$15 for the buffet

makes you only available to, say, 36% of the population. Charge $8-$10, suddenly you're now available to 70%. People are less hesitant to drop by. "Oh, it's only a little money, let's just go

eat." Instead of "I gotta watch my money, so I'll only eat out on very special occasions."

RemixedCat said...

When will companies learn? Most people don't make much money nowadays, so if you overcharge, you only have a small percentage for a customer base. Charging $12-$15 for the buffet

makes you only available to, say, 36% of the population. Charge $8-$10, suddenly you're now available to 70%. People are less hesitant to drop by. "Oh, it's only a little money, let's just go

eat." Instead of "I gotta watch my money, so I'll only eat out on very special occasions."

Oh, and how do you expect to make profit when you keep CLOSING LOCATIONS? That makes absolutely NO SENSE! If the place is operating correctly, it WILL make profit. If it's NOT

operating correctly, YOU FIX IT! Not close it.

You CAN NOT MAKE PROFIT from an EMPTY BUILDING. With less profit-producing locations, you have less income to pay back the debts that were YOUR FAULT.

ESPECIALLY when it's in a slightly outskirts location. In this latest move of closures, you shut down basically (at least in my area) WERE DISSOLVED COMPLETELY.

Oh, but you guys don't care, right? You've already made so much money you don't know what to do with it, your futures are secure. You've become jaded and lost sight of what the rest of

us go through. What your loyal managers and chefs and waiters and waitresses and cashiers are going through. What your customers are going through.

Your canned apology is nothing. Or maybe is written by someone who hates this turn of events just as much as everyone else and is sincerely sorry for everyone. But Ryan's, Buffet's Inc.,

whoever is responsible for this disaster, is certainly NOT SORRY.

Why didn't everyone who worked there get any warning? Throwing them out in the middle of winter, when they had NO CLUE this was coming, is the most HEARTLESS and TERRIBLE thing

the chain could have done! I know they literally had NO WARNING!

We had been eating at the Marietta one last week... Why, after I complained about it above? Because our good manager and staff from Parkersburg had moved there, and saved the place

from going under. They increased the quality of the food and once again served happily and eagerly! We just couldn't make the trip over there as often, and unfortunately they were

charging even more there than they used to (probably trying to make up for the moving costs/renovations.). They were JUST getting settled in... Then BAM, they're thrown out AGAIN,

after proving how LOYAL they were to Ryan's! Only this time with nowhere else to go!

How could you, guys?

They DID NOT deserve this! Doing that to one person is cruel. Doing that to THOUSANDS of people?! Nothing short of insane!

There are NO WORDS for how deeply and thoroughly you have SCREWED YOURSELVES.

Re-open ALL the locations IMMEDIATELY, and pay compensations to all the employees you sent into panic and HOPE AND PRAY that they come back to you... or Ryan's buffet WILL DIE

WITHIN TWO YEARS.

I GUARANTEE IT.

If you don't save face now, then we're done with you. Done with you forever. And without us, the customers, you have no hope. It seems too many businesses completely forgot that. And

only remember after they're gone forever.

Anonymous said...

Here is the dope on Mike Andrews:This is the fourth bankruptcy with him at the helm as CEO Buffets or EVP Finance with two other companies. He has no skill to offer as the chief of a restaurant company. He is directly responsible for spreading misery, year after year, among terminated staff and managers because he is incompetent. Truly incompetent. He makes a big deal out of being personally sad over letting people go, but that's just typical business speak. The company will not survive much longer in its current form. There will be many more of these sad times ahead. And, one fact is that many store managers and area directors and RVPs were demoted or terminated because they were at the top of the salary structure, and Mike Andrews simply wanted to reduce overhead. It is not just a matter of closing underperforming stores, it is all about money and politics. As a former GM, I could not possibly recommend working for any of the Buffets concepts. Times are hard, but Mike will make them harder. What goes around comes around, Mike. Karma, buddy, karma. Your turn is coming. Soon, we hope, before you ruin highly successful careers of many other professional restaurant managers.
Keep making those poor decisions in order to save yourself. They will catch up to you.
Good luck to all of you who took this on the chin.

Anonymous said...

Buffets,Inc. used to be a great place to work. It had a culture that was supportive and positive.
Since Mike Andrews took over as CEO 7 or 8 years ago, the company and its top execs became a gang of cronies who acted in the same ways that brought Wall Street to the brink of disaster. It's a game of pennies with Mike. It is unadulterated greed mixed with a high dose of incompetence. He brings an Australian in as COO and the guy had never managed anything beyond fast food. Buffet is beyond fast food. Crocodile Dundee bailed a month before the bankruptcy was announced. So what does Mike do? The guy is brilliant:he brings in a buddy of his that was with Mike at Don Pablo's, another bankrupted company. Instead of going out and getting the best guy possible as COO, someone with fresh ideas and vision, Mike promotes another crony. These restaurant CEOs don't want anyone as COO who might eclipse them. That would be a threat to their CEO position.
Just like Wall Street, they are underhanded, self-serving, greedy, insincere, ethically corrupt individuals
who simply are out to protect their flank and survive as long as possible.

Anonymous said...

Ryan's/Old Country Buffet is the victim of one thing and one thing only.....Good Old Fashioned Greed

The leadership of both companies had both taken profit out of their businesses by:

Cutting pay programs (Bonuses)
Lowering food quality
Not repairing equipment and
Not re-investing in their facilities

They were both up for sale when the New York investment firm that owned Old Country Buffet saw that Ryan's was worth more that the total value of their outstanding stock.

they worked out a deal by selling the buildings and property that made up Ryan's and leased them back from the people who bought them.

they pocketed hundreds of million dollars and paid off the ryan's shareholders.

they said they would raise sales and save money with the increased buying power.

nope didn't happen. and when the sales got softer and the profitable ryan's that used be paid off could no longer make money now that they had a rent payment. they went into chapter 11.

reality is that unless they get a major cash infusion from someone that WANTS to be in the restaurant business, they are doomed. The will just keep going into chapter 11 to dump leases on their under-performing stores or where they can't get the landlords to continue to lower rents.

Eventually becoming a foodnote in the history of restaurant lore.

Burger Chef
HoJo's
Stuckey's
Duff's
Bonanza
etc. etc. etc.

Victor Chen said...

I've been to several Hometown Buffets in the past few years. Although I'd have to admit they're not my favorite, it had a wide selection. It's always sad to see decent buffets disappear.

Anonymous said...

I left after the first bankruptcy. This is a sinking ship we can just watch going down. Good luck to you guys holding on.

Anonymous said...

I came from a store that was in the top 15% of the company. I won the Founders Club vacation and a company car for that year. They closed my store down along with 80 other stores the same night. We performed wonderfully, 2 months later they closed us down. "underperforming" my behind!

Anonymous said...

Maybe the CEO should go back on undercover boss so he can get some education on how to run a business. They closed an ocb in fairmount new York by Syracuse the same way never telling anyone. The employees even came to work the next day to work to fine a note on the door stating we are closed for good. It turned out to be a huge deal to the local news who ended up getting people pissed off at ocb and ending up running another ocb in Syracuse out of business because people just stopped going. Great job