Friday, March 11, 2016

Buffets LLC Files AGAIN for Bankruptcy

What is going on in the world of buffets at this very moment is too crazy to not focus on right now despite that we were in the midst of our Top Buffets of 2015 series of articles. For the moment that those articles will be delayed for two weeks more.

What a disaster is happening right now with Old Country Buffet, Ryan's, Fire Mountain, Hometown Buffet and the other buffet restaurants that were once part of Ovation Brands that "merged" (read "taken over") by Food Management Partners less than a year ago in 2015! As we reported in our last article there were Ryan's that were being closed but it did not stop there. We then learned that 80 restaurants throughout the chain with the various "brands" - OCB, Ryan's, etc. were to be closed before opening on Sunday, March 6, 2016. We, at Art of the Buffet, were tipped off before it happened. We were not told which restaurants would close - and since then the media in the areas were restaurants were shut suddenly started reported restaurants that were closed by greeting the employees and managers at the door - not being allowed inside - and told go home you don't have a job anymore. This is how Ovation did it a few years ago - and it is how they have done it now. Our local OCB in Levittown, NY was one of the restaurants shut down. We have learned that the manager of that OCB was told at 10:00 am on Sunday when he arrived at work intending to open the store.  At one restaurant in Memphis, TN the local police were called in to remove the employees from in front of the restaurant - with local news crews watching!

We have learned since Sunday that Ovation Brands has filed for bankruptcy. This is the third bankruptcy that Ovation Brands formerly Buffet's Inc. has filed. This one since their take over by Food Management Partners who have been and are currently controlling everything now - making the  decisions to close the restaurants - and while Ovation Brands is the name on the bankruptcy the decision to declare Chapter 11 bankruptcy is coming from Food Management Partners. The names of the companies gets a little confusing at this point. Apparently, Ovations Brands after the merger was renamed Buffets and was made a LLC - Limited Liability Corporation. Buffets. LLC is within Food Management Partners. So Buffets, LLC is what was once Buffets, Inc. and then Ovation Brands. Up until a week ago, the name Ovation Brands appeared on all coupons and such released for OCB, Ryan's, etc.

That 92 restaurants were closed on Sunday and 74 were closed in February. We had heard 80 - there were more. We had heard that 150 would remain open - another source says about 90 are still open. We have no confirmation on that. Another source says that before this rash of closings, there were 243 restaurants in the chain. Less the 166 restaurants just closed (92+74) leaves only 77 restaurants still remaining. Golden Corral must be thrilled as they are in many areas the only player in town now. And sadly, they are many areas were there is no Golden Corral and none for almost 100 plus miles or more.

This is what we know about the bankruptcy (from WHAM, Rochester Ch. 13). The story comes out of San Antonio, Texas. Buffets, LLC says now that its intent is to "restructure by closing certain weaker restaurants and recapitalize its business." Everything in the "stores" (restaurants) will be auctioned off by an online auction company. (We have heard from one of our readers that food in storage at the restaurants was picked up by employees of the nearest other restaurant in the chain and taken to that location. Of course if there was no other near location we can only assume that it was disposed of - my comment - I have no confirmation of this.)  The auctions have ended at this point.

According to WHAM, Rochester, NY at the Greece NY OCB - "A sign on the door stated that the location is "closed for asset inventory" until March 8. Employees were directed to report back for further instruction from 2-4 p.m. on March 8." At the Levittown OCB the sign on the door that we saw on Monday says just "CLOSED. GO TO BAY SHORE" - Bay Shore is another OCB 20 miles further east on Long Island. We went to Bay Shore this week - none of the employees from Levittown were there. We are not sure about management - though the general manager from Levittown was no where to be seen and if they lose him, they have lost someone who given the resources to do so would keep the restaurant full of customers. Continue to tie his hands - and there will be more closings.

Per WHAM, Rochester  - " "Buffets, LLC, was acquired by merger in August of 2015. The Chapter 11 filing is prompted by the discovery of liabilities, or alleged liabilities, that we believe were not disclosed in our negotiations," says Peter Donbavand, Vice President for Business Development. "We intend to investigate the propriety of the disclosures, and intend to consult with our counsel regarding any remedies we may have." This was also stated by Mr. Donbavand - "a "precipitous decline in sales" at some restaurants that was unusual."  These were called "weaker restaurants". There was also a law suit that Food Management claims not to have known about in Nebraska where a couple sued an OCB due to salmonella poisoning that led to kidney failure in the man after eating at an OCB in 2010. A Wyoming US District Judge awarded a judgement of $11.37 million after failed to respond to the lawsuit when it was brought in 2014. Now the dates here get a little screwy - Ovation says that this is after they were sold to FMP - we know that sale did not happen until September 2015. Ovation says it was not them that had to respond - even if they were called Buffets, Inc. in 2010, then a name change does not clear a corporation of responsibility for a law suit. Obviously, the judge thought this also - and gave a default judgement of a LOT of money. Law suits are public record. Don't tell me this was not known by FMP when they were buying out Ovation.

I have to respond to Mr. Donbavand's last comment - "precipitous decline in sales"? Why not be up front and say we did everything we could to have our buffets lose customers and make it nearly impossible to run a successful business. When Food Management Partners took over they cut salaries and benefits of employees and managers. They did nothing to improve the menu at any of the restaurants. And they cut back on the number of employees working at any one given time at the buffets so that there was one person carving and also trying to refill buffet trays, two to three employees taking care of all of the tables in the restaurant including have to remove plates when finished, keep the area clean, and then clean the restaurant for closing. How do I know this? I watched it as it was happening at two different OCBs  and a Ryan's - and only one of those survived - for the moment. These buffets were set up to fail by Corporate. I don't buy the story that financial liabilities "we believe" were not disclosed in negotiations. He has got to be kidding us! If this so called large food management corporation went into merger or take over with any company, you know that every page of the financial records were scrutinized before a dollar changed hands.

The story now is we have closed all of these buffets to keep the rest open. I would love to believe that - I see more closings coming and the end of existence of all of the OCB, etc. buffet restaurants.  I, truly, hope not.

My sincere best wishes to all those who lost their jobs at these buffets in the past two months. You all did the best that you could do given the meager resources you had to keep these restaurants running. No notice! I am guessing no compensation package. Just terrible! 

As we have offered in the past - if you - the employees and managers - wish to anonymously tell your story respond to this article by either comment or send us an email. If we get enough emails and responses we will put them together in an article all their own - or if not, we will put the emails here as comments preserving your anonymity.



Anonymous said...

How fallen are the mighty.

I had been 20 years in hospitality management when I was recruited by OCB in 1993.

Chain restaurants, including Ponderosa for 7 years, hotel F & B, night clubs, some iconic independents (now gone).

With that background, I found my OCB training to be absolutely first rate. 8 weeks in Minneapolis. Cooked everything on the menu, excellent management training - the training facility and staff was absolutely first rate.

The food, when properly prepared, was of the highest quality - I say that having been in kitchens all my adult life.

I was general manager of one of the first OCB's - Unit # 18.

That old restaurant boomed - over 9,000 customers per week. One district manager for every 7 to 10 stores. More 'scratch' cooking in those kitchens, resulting in good quality food when properly prepared, than many 'high end' special-occasion chains that work out of freezers, cans and microwaves.

Then came the 'merger' with Hometown.

And all of the debt. OCB, generally, had paid for expansion with very little debt. Dennis Scott had financed Hometown with high interest loans and hundreds of millions in outstanding debt.

The sudden burden of all that debt, with more to come through the Ryan's and Golden Fork fiasco, was the beginning of the end.

Old stores didn't receive the upgrades and investment they required to stay competitive. Hometown's California 'golden child' marketing staff took operational control of the company with disastrous results. District Managers went from 7 stores to 20.

Millions upon millions of dollars spent on advertising, which brought little increased revenue. Individual stores were charged for advertising costs in such a way as to virtually eliminate the performance-based bonuses that were a large part of store management's compensation.

Successful managers left in droves. The quality of customer experience plummeted.

Sad, and not preordained.

Hubris will get you every time.

Anonymous said...

I was sad to see the Erie, PA location close. Although I haven't lived in the area for many years, it was my "go-to" for many years last decade and was a top-notch OCB. It was literally next door to a Golden Corral, and I would eat at the GC maybe once for every ten trips to OCB. It was that location that always proved to me OCB was in fact the better of the chain when run properly and the food prepared with the best care and quality. Very sad, as I have many memories with family and college buddies at that location. My last visit there during a trip north in August 2014 proved it was still an A+ location and it had a line out the door for dinner both evenings I ate there that week. If only I had known it would be my last visit.

I worry the entire chain will soon be a distant memory. My other favorite location is the Ryan's in Princeton, WV - a wonderfully run location that just got a great remodel two years ago. Wonderful staff, great food, lots of pre-merger Ryan's selections still available. Every other year I drive from Florida to Ohio and back and always stop at Ryan's. Not sure if I will be doing that drive this summer, but if I do, and the location is still open, I will stop both ways just in case.

I have been going to OCB since the early 1990s with my grandparents as a child. Those trips are wonderful memories, and part of the reason I still used to love going to the Erie, PA OCB when I lived there in the mid 2000s. So sad to see this happen to what was once, and still should be, the # 1 buffet chain.

songbird's crazy world said...

My boyfriend lives in Levittown. He used to go to the OCB when his kids were young, but stopped going when they got older. He took me there once, a few years ago, and the experience was so horrible we never went back. So I'm not surprised the chain is in serious difficulty. I'm in that shopping center frequently, though, for other reasons. Saw your blog post Saturday morning, so when I got to the shopping center and saw all the dumpsters blocking off the back entrance to OCB, I wasn't surprised.

Anonymous said...

Reading comments on the OCB, HTB and Ryan's Facebook pages, it would appear employees at the recently shuttered locations are not receiving their paychecks for their final days/weeks worked before the closure. How horrible. As much as I want to support the restaurants that are still open (not that there are any near me) this makes me want to not support them at all.

Anonymous said...

This article shows how horrible everyone is treated. Current workers at locations that are still open, perhaps it's time to quietly look for new work?

Anonymous said...

Yet another article showing how the company essentially lied to workers about a "meeting" and then refused to even communicate with them. Who does this??

Art - perhaps (at least for now) we can have weekly updates again instead of bi weekly so we can not only keep informed on this matter but also still get our regular articles in? -a long time fan

Writer said...

We were going to stay with the bi-weekly format as there does not seem to be much new information on the Buffets LLC closings. We do have one more article to post about it and we will do so this Friday. If there are any new developments that we learn about we will break in to the next week with them. If we get more managers/employees telling their stories in comments or emails we will put all of those into one article - in addition to the article they are commented in.

FMP or Buffets LLC - whatever they want to be called - still the same people doing it all - is ruthless in their dealings with their employees and every manager and employee that was fired in the past two months should be going to their State Labor Board and filing a complaint. There certainly must be labor laws that have been violated.

Anonymous said...

The bankruptcy fillings are really illuminating.

They bespeak a level of poor management at Food Management Partners that is just breath-taking.

The filing notes only the top 30 creditors, however among the debts are millions of dollars owed to several states for taxes, likely sales and patrol taxes - those debts didn't just accumulate in the last two or three months.

FMP was in trouble right from the beginning.

Millions of dollars to vendors - indicates that their non-payment of invoices for weekly food deliveries must go back for several months, at least.

Unpaid landlords.

The $11.4 million dollar food-poisoning judgement - their explanations there defy credibility - their due diligence prior to the acquisition must of been a sham.

Auctioning assets without permission of the bankruptcy trustee - that's incomprehensible, and just the beginning of their problems with the bankruptcy filing. I'm sure the next revelation will have to do with preferential payments to certain vendors and investors.

To say nothing of their problems with the National Labor Relations Board as regarding the number of employees laid-off and their lack of notification.

Their long-term strategy seems hopeless. Hard to imagine that their 40 million dollar debtor in possession loan was secured by anything other than personal guaranties from the owners, as the few remaining stores seem utterly incapable of generating profits sufficient to repay the secured bankruptcy debts as well as the additional loans.

Anonymous said...

I sadly believe by the end of this year (heck, maybe even by the end of summer) the chains will cease to exist.