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4 Disappearing Restaurant Franchise Chains

A TCBY frozen yogurt shop in New York City
A New York City TCBY shop. photo/steinberg

Recognized brands that have built market share can be sold to buyers over and over again, even when management and systems are poor. On the other side, franchise locations with poor unit economics can often also be sold to new buyers, who look for a mediocre return on a lower, cheaper investment. That's why it is surprising to see so many big restaurant brands with major national reputations implode over the past decade. News site 24/7 Wall St looked at research from Technomic Inc on 10 major restaurant systems with the biggest location shrinkage in the last decade. Here are four:

  • Bennigan's. Franchisees woke up one morning to read in the newspapers that the parent company had liquidated. The franchising company with the intellectual property rights to the franchise agreements managed to survive. The brand has seen 88.2 percent of its locations close. That's 247 restaurants. There are 33 left.

  • TCBY. Out of 1,777 TCBY frozen yogurt stores, 405 remain. That means 77.2 percent of the dessert chain's stores have vanished.

  • Big Boy. From 405 full service restaurants to 140, Big Boys has seen 65.4 percent of its system disappear.

  • Blimpie Subs & Salads. Out of 1,853 sub shops, the imploding chain now has 739. Putting it another way, 60.1 percent of that franchise network is no more.

Franchise owners in many of these chains, like Blimpie Subs (parent company Kahala Corp.), have quietly  slipped into oblivion. Other brands' franchisees have played the part of the squeaky wheel through press interviews, lawsuits, engineered buyouts and franchisee associations, taking action to try to save themselves and the system.

Some go out with a forceful shout, others with a passive whimper.


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