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Famous Restaurant Bankruptcies

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People build up loyalties to their favorite restaurants, whether individual institutions or chains. Sometimes they go out of business because not enough people are, or stay, loyal. Other times, it's bad decisions from upper management that does it. But just as "graveyards are full of indispensable men," so too is popular history littered with restaurants that lasted, until they didn't.

Big Boy, formerly Bob's Big Boy, is one of the oldest fast-food franchises in the world, preceding McDonald's and Burger King by a generation. Bob Wian founded it in 1936, and it grew in leaps and bounds along with the Western U.S. in the post-World War II years. The logo of a chubby boy in checkered overalls, through his placement outside the restaurants and his feature in comic books produced by the company, became one of the nation's most familiar corporate logos, even as the chain was surpassed by McDonald's and its Golden Arches and Ronald McDonald character.

Marriott Corporation bought the chain in 1967, and Elias Brothers, one of the largest franchisors of their restaurants, bought the chain completely in 1987. They had expanded to over 1,000 restaurants all across North America. But Elias declared bankruptcy in 2000, and by 2010 the company had dropped to 141 restaurants under the Big Boy name. Many former Big Boy locations have been relabeled by their franchisors, with names like Frisch's and Shoney's.

Black Angus Steakhouse was founded by Stuart Anderson in 1964. At its peak in 2001, it had 107 restaurants, most in the Western U.S., and had sales of over $300 million. But the recessions that hit in 2001 and 2008, well beyond their control, both led to American Restaurant Group to file for bankruptcy protection. When it emerged from the second bankruptcy in 2009, owned by Versa Capital Management, it was down to 46 restaurants and about one-third of its former revenue.

Bennigan's was founded by Pillsbury Corporation in 1976, on the idea of one of their executives, Norman Brinker. He thought of combining the fast casual restaurant, which he more or less invented with Steak and Ale, with the atmosphere of a classic Irish pub. By the time Brinker left Pillsbury to take over Chili's in 1983, Bennigans was growing. But Brinker had unwittingly planted the seeds of his former chain's downfall, as Chili's, and other fast casual restaurants like T.G.I. Friday's, and Darden Restaurants' Olive Garden and Red Lobster, outpaced it. In 2008, even before the financial market meltdown, all but a few Bennigan's closed their doors forever.

Often it's the loss of the "name" that dooms a chain. Arthur Treacher's Fish and Chips, with the British character actor as a spokesman, opened in 1969, and brought the English fish-and-chips format to America as a competitor for the more familiar burger-and-fries meal. Fisher Foods operated 99 stores at their peak, but Treacher's death in 1975, and the rise of the Long John Silver's chain, hit their profits hard. The company has survived, often cobranded with Arby's and Nathan's Famous.

Gino's Hamburgers was started by football star Gino Marchetti of the Baltimore Colts in 1959. This is another chain that was bought by Marriott, in 1982, and, without the involvement of Marchetti, they began converting the East Coast burger giant into Roy Rogers Restaurants. Western film and TV actor Roy Rogers sold his shares of the burger chain bearing his name well before his death, and no longer appeared in its commercials. With that, the company went downhill, to the point where most Roy Rogers Restaurants are in highway rest areas in the Northeastern U.S.

And sometimes restaurants go downhill, or even go bust, because of plain old mismanagement. In 1979, Jack in the Box, once the third-largest burger chain behind McDonald's and Burger King, flopped completely with Frings, a combination of French fries and onion rings. Needing to turn their losses around, they tried to appeal to an older demographic. They aired a commercial in which they literally blew up their jack-in-the-box symbol, and aimed their revamped menu at young adults on the go. By 1985, this had also failed, and their parent company renamed them Monterey Jack's and went with a Tex-Mex image. This, too, failed, and the old name was restored a year later, and this began the company's return, mainly in the Western U.S. from whence it came.

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