Bennigan's Closes Doors, Files For Bankruptcy

TAMPA - Bennigan's restaurants in the Tampa Bay region were locked shut Tuesday, joining hundreds of others that closed nationally as the corporate owner of the once-popular chain filed for bankruptcy court protection and plans to liquidate.

The sudden, nationwide closure of Bennigan's represents one of the largest stumbles for U.S. restaurants, which have been struggling as consumers cut back amid high gas prices, job losses and other economic troubles. Bennigan's, an Irish-themed, "fast casual" restaurant, focused on mid-priced menu items such as sandwiches, salads and beer.

Bennigan's sister chain, Steak & Ale restaurants, also may be closing. Bennigan's and Steak & Ale are owned by Metromedia Restaurant Group of Plano, Texas. Managers at the Steak & Ale at 204 N. West Shore Blvd. in Tampa said that location closed Tuesday, and they did not know whether it would open today.

Bennigan's has 11 locations in the Tampa Bay area, including popular restaurants on Dale  Mabry Highway in Tampa, New Tampa and Brandon. The company had about 1,000 employees in the Bay area who were thrown out of work Tuesday.

According to Metromedia's Web site, the company has 37 Bennigan's and 11 Steak & Ale restaurants in Florida.

The only location here remaining open is the Bennigan's at Channelside Bay Plaza in Tampa, an independently owned franchise.

Bennigan's and Steak & Ale were early training grounds for some of the Bay area's most prominent restaurateurs, such as Outback Steakhouse co-founders Chris Sullivan and Bob Basham, who worked at both restaurants before starting Tampa-based Outback.

Many such restaurants have been caught in a bind as food prices have soared and customers cut back on discretionary spending.

Morningstar analyst John Owens said several chains expanded quickly, making it more difficult for customers to differentiate between them and forcing many to slash prices to lure diners.

"Bennigan's was the weakest of the major players," Owens said.

Calls to Metromedia were not returned Tuesday.

However, Ken Boyle, a manager for Tampa Bay area operations for Bennigan's, said in a statement: "Obviously, this is a chaotic time for our employees and their families as they try to sort out news and information; please keep them in your thoughts and prayers.

"I am grateful for the service and dedication of the more than 1,000 team members in my Florida region, as well as the loyalty and support of our faithful Bennigan's guests. And I know that God will provide during these challenging times."

Steak and Ale of Florida Inc. was among 38 related entities to file Chapter 7 in federal court for the Eastern District of Texas. In a Chapter 7 bankruptcy filing, assets are sold to pay creditors and the company closes down.

Restaurant Underwent Changes

Employees at Bennigan's restaurants in Brandon and on Dale Mabry Highway and Fowler Avenue in Tampa reported they were told Tuesday morning that their locations would close permanently.

Rachel Gilley worked at a Bennigan's at 2190 Tyrone Blvd. as a server and corporate trainer until two months ago, and says many things fell off at the chain recently.

"The restaurant kept changing the food, the menu, everything, and the quality just wasn't as good. The customers really noticed it," Gilley said. "I came over to Best Buy to start making some extra cash because it was so bad over there."

Laura Woodard, who works at a Bennigan's in Lakeland as a server, host, cook and dish washer said she suspected something was amiss with the chain this summer when it started offering a "Cash Crunch Lunch" deal, offering burgers and more expensive drinks for $4.99.

"It definitely worked; we were slammed with people coming in," Woodard said. "Then, as soon as that deal ended, we were slow again."

Woodard found out she had lost her job via cell phone text messages from co-workers. "I was there last night until closing washing dishes. Now I don't have a job."

In June, the Wall Street Journal reported that Metromedia was in talks with its major lender, GE Capital Solutions, to hold off a possible bankruptcy filing. Metromedia is a unit of Texas billionaire John Kluge's business holdings. Bennigan's had sales of about $542 million nationwide last year.

In its bankruptcy filing, Steak and Ale of Florida reported between $10 million and $50 million in debts.

Not All Bennigan's Struggling

Some independently owned Bennigan's restaurants, including the Channelside Bay Plaza restaurant, continue to operate.

Christian Cook, general manager of the location at Channelside, said it planned to be open today, unless told otherwise by corporate officials. That location is a private franchise owned by the Tampa-based firm Team Irish Inc.

Cook said his restaurant has been fielding many calls from employees of other Bennigan's looking for employment because their locations were closing.

"We're a successful Bennigan's, always in the top three locations regionally ever since we opened," Cook said. "So we're hoping to have continued success."

Steak & Ale and Bennigan's grew out of movements in the restaurant industry in which restaurateurs frequently copied ideas from each other, said Chris Muller, who runs the Center for Multi-Unit Restaurant Management at the University of Central Florida.

Legendary restaurateur Norman Brinker, who later founded Chili's, founded Steak & Ale with an English Tudor theme in the late 1960s. It became a rival of the Victoria Station prime rib restaurant chain, based on an English railroad station.

Muller said Bennigan's grew out of the explosive growth of the grill and bar concept, which was led for years by TGIFriday's.

Friday's primarily concentrated on larger, urban areas at the time, Muller said, which left the door open for chains such as Bennigan's and Applebee's to enter smaller markets.

Ultimately, Muller thinks the "value chain" between customer and restaurant at Bennigan's was broken. Among other things, prices rose, customer service declined, and too many bar and grill concepts were too similar to each other, he said.

Nick Vojnovic, chief operating officer of Family Sports Concepts Inc., which owns the Tampa-based Beef O'Brady's chain, said Steak & Ale and Bennigan's helped launch the careers of many in the restaurant industry. Sullivan and Basham, Outback co-founders, each were executives in the Steak & Ale and Bennigan's chains before moving over to work for a large Chili's franchisee owned by Family Sports Concepts chairman Gene Knippers. In the late 1980s, they had their greatest success founding Outback.

Muller said he won't be surprised if more casual dining restaurants shut down.

"Now there is more supply than there is demand, and there's too much choice," Muller said. "This is going to be a very bad summer, and I think before the end of the year you're going to see more of this."