Buffets, Inc. To Close More Restauants

In May, Buffets, Inc. filed their plan to come out of bankruptcy. Their plan includes closing more restaurants as the company tries to build more traffic. There will be a confirmation hearing on the plan on June 13, 2012.

As regular readers know, Buffets, Inc. is the corporation that owns and manages the Old Country Buffet chain and the Ryan's Buffet chain. When the company filed this second bankruptcy since 2008, the company closed 81 restaurants - most of them closed overnight with no warning to unit managers or employees. Since these initial closures we have been made aware of a number of other locations that were closed following this - again, with no warning and done overnight.

The plan just announced to come out of bankruptcy that was filed in court stated: "“The financial projections also assume the closure of underperforming stores over time as it remains within the normal course of business to periodically determine which restaurant leases should be renewed as such leases come up for renewal or extension.”

This all comes following two million dollars in bonuses given at the corporate level to management who put the corporation into bankruptcy. It also comes following an announcement that Buffets, Inc. will be doing dramatic renovations in decoration to the interiors of Old Country Buffet restaurants. From the look of a sample of this new "concept" interior, there is no way that these renovations could be done on current locations without some period of closing down the unit - the changes will be that dramatic - and, frankly, in my opinion, will add nothing to increase business. And with every unit under scrutiny for performance - how could any unit afford the time to be closed for renovation? Again, Buffets, Inc. demonstrates a lack of good leadership, management, and business practice.

From a National Restaurant News article about this plan to exit bankruptcy - "For fiscal 2012, which ends June 27, Buffets expects restaurant sales to decline 13 percent from a year earlier to $1.03 billion, compared with $1.18 billion in fiscal 2011. The company cited the closure of 105 company-owned units during the fiscal year and lower guest counts at remaining restaurants for the drop-off."

Is this incredible? The company blames their drop in sales on not having the restaurants that they closed! This company counted on people traveling a distance to another location when the location near them was closed. From comments on Old Country Buffet's Facebook page from customers - there is no way they are going out of their way to travel to another Old Country Buffet. There are other reasons why there are fewer customers. The menu is tired. While there are some staples that need to remain, they have dropped too many of the things that people enjoyed coming to OCB for. OCB also serves almost the same things every night with little variation. There was a time, years ago, that there was a distinctly different menu every night of the week. Not any longer. They also dropped their seasonal or monthly features. Summer barbecue was always popular and brought people in with real barbecue ribs and brisket. Not the same pork loin that is cut into different shapes and served with barbecue sauce that they call "ribs" now - along with several other names for the same meat and sauce.

This is a company doing nothing to help what it calls "under performing stores" and is just waiting for their leases to end before they put all of these employees out of work and annoy more customers at the same time. The reader who was first to inform me about this most recent news called Buffets, Inc, "A slowly dying company."

We will watch and see.