4 American Food Chains That Died And Came Back | Rise and Fall Marathon | Business Insider

You might think these iconic American restaurant

chains

are too big to fail, but they almost did. Chuck-E-Cheese was the destination for arcade games and children's parties, but it eventually went bankrupt. TGI Fridays went from being one of the most popular singles bars in the city. to a bankrupt chain and even fast

food

giant Subway at one point closed more stores than it opened, so what went wrong? Let's start with Subway, with its 37,000 locations worldwide. It's certainly a fast

food

giant, but in recent years Subway has been on a roll. rollercoaster ride, so where did it all start and what happened?

The chain began as Pete's Super Subs in Bridgeport Connecticut in 1965. 3 years later, co-founders Fred Duca and Peter Buck renamed it Simply Subway. Subway's famous giant foot-long sandwiches are prepared right before your eyes as you want what was so appealing then and still is today about Subway is really an open kitchen format in many ways, they were really pioneers in that and the ability to customize your sandwich the brand redefined fast food with fresh ingredients that customers could see compared to other fast food

chains

at the time they felt healthy and worked. In 1981 there were 200 locations in the US and soon after Subway went international in the late 70's 80's and 90's everyone knew Subway I mean they were everywhere they are still everywhere that's Joel laava an expert in franchising while each store looks and smells the same they are all independently owned franchises the format is pretty simple you buy a franchise they train you they help you secure a location they help you with a grand opening and you are open you are open for

business

keep going operating manual of several hundred pages, do the advertising and the customers will come, not only were the franchises successful, but they were and still are one of the cheapest chains for while the maximum cost to open a Subway franchise is $525,000 Opening a McDonald's can cost more than $2.4 million because Subways was easy to open, the number of stores skyrocketed between 1990 and 1998, store locations increased from 5,000 to more than 13,000, and in that same time period gross sales increased by about $2.1 billion Subway's success continued into the early 2000s, at a time when obesity was increasing rapidly in the United States.

Subway continued to market itself as a healthy alternative to fast food. One of his greatest successes was undoubtedly the story of Jared Fugal for everyone. Remember those ads where he's in those huge pants and shows how he lost all that weight and it made them a lot of money and it really made people think of Subway as a great health brand, it was one of the biggest ads. victories than any chance had in recent decades, so it was a big part of his brand. Subway carried the Fogle success story for nearly a decade, but in 2008 the world was reeling from the effects of the Great Recession and, for many Americans, bargain hunting replaced an obsession with weight loss, so Subway changed. its message in March 2008 and introduced a new promotion that would define the chain in August 2009, as other restaurant trains struggled during the recession, the $5-foot long had generated $3.8 billion in sales for Subway. a 177% increase in sales in the United States from the previous year, but even the best deals continue their course from 2014.

Subway sales began to

fall

steadily behind the scenes. Many of the reasons for Subway's success had

back

fired on them. Quiznos was once Subway's main competition, but tons of subchains like Jimmy John's Firehouse Potbelly and Jersey miks and fast casual chains like Panera offered seemingly fresher, healthier options and began stealing market share. They are competing against people who bring fresh produce every day. Many Subway locations only bring fresh produce. produce once or twice a week, in addition to the fast food chains that have been around since Subway, were coming up with their own healthy alternatives and getting creative with new menus.

More and more fast food chains really want to have that innovation pipeline where they're launching something new almost every month. Fast food places are looking for ways to attract new customers. Driving traffic and Subway hasn't tried to do it the same way other places have, but other fast food chains weren't the only competition. For Subway franchises with the Subways franchise model making it easy to open locations, stores inevitably began to open around the corner in lucrative markets. Take downtown Manhattan, a 15-minute walk away, in less than half a square mile there are 10 Subways. The locations and these nearby locations began to cannibalize each other's sales.

The Subway franchise agreement, the contract says they can open anywhere where there is no protected territory, so the franchises don't really have a say in where the other franchises are going to open, it's a problem. Subway Corporate didn't stop him because the company was benefiting from a large number of locations. More locations meant more franchise fees and higher royalties for Subway Corporate, which lessens the effect of

fall

ing sales from a single location when franchisees' sales are declining while if they remain open, it doesn't necessarily hurt Subway as much as would do it with another chance, if everyone likes opening new locations then they can move on and it won't be the end of the On the other hand, in the world, corporate office franchise owners took the hit in 2012, every Subway franchise generated an average of $482,000 a year.

Four years later, that figure had been reduced to $422,000 a year in comparison, the average annual income of a McDonald's franchise in 2016 was 2.6 million and to make matters worse Subway would lose the face of its company in 2015 the man who had embo

died

Subway's fresh eating mission was charged with possession of child pornography and having sex with miners Subway cut ties with Fogal and was sentenced to 15 and 1 12 years in federal prison, J Fogal basically went from being a big positive to a big liability, like the worst possible things your brand could be associated with. All of these things created The Perfect Storm for Subway and soon locations began to close.

In 2016, Subway closed 359 stores in the US, it was the first year the chain closed more locations than it opened in 2017, that number surpassed 800, and by the end of 2018, more than 1,000 locations had closed with all these acidic ingredients. It's hard to imagine Subway. could bounce

back

, but the chain is certainly trying in 2017. Subway launched a redesign called Fresh forward. The renovated restaurants featured touchscreen ordering. Wi-Fi, spe sockets, new furniture and music. The menu also received a facelift in 2018. The chain introduced its cheesy garlic bread. the most successful new item in the last 5 years and in 2019 a line of Halo top chabata sandwiches and smoothies hit stores the changes appear to be working after years of store closures in the first half of 2023 Subway saw an increase of roughly 10% in overall sales at its restaurants and a similar increase in online delivery sales after growing too quickly, the sandwich giant now appears to be on the road to recovery Chuck E Cheese Chuck cheese when are you fed up Chucky Cheese Chuck-E-Cheese is another iconic American brand that was hoping for a change in Fortune at one time the restaurant chain was synonymous with children's birthday parties when my mom asked me where to go for my birthday I told her Chucky Cheesus, they

came

by pizza arcade games and this guy people love rat and for decades it worked but over time the fun started to fade and Chuck-E-Cheese filed for bankruptcy in June 2020 so what happened and where is it now?

Nolan Bushnell, the co-founder of the video game company Atari,

came

up with the idea. For Chuck-E-Cheese he felt there was something missing in restaurants. He once told Fast Company. He wanted to add a dimension of fun to the act of eating, so he played video games in a restaurant and served pizza while customers waited. For the cakes he could play Arcade games. He's not someone who's coming at this from a pizza standpoint. He says he is fine. I know video games and I think I can bring animatronics to the world of pizza, which is a bit crazy idea, but clearly. has worked over the years originally Bushnell planned to name the restaurant after coyote pizza, so he ordered what he thought was a coyote costume for his main animatronic.

It turned out to be a rat and Bushnell decided to use it first, he thought about changing the name of the restaurant. He named Rick Rat's Pizza, but his team convinced him that having a rat in the name of a restaurant wasn't the best idea, so they agreed to call the mascot Chuck Chuck E. Cheese was originally almost more aimed at Adults. He smoked a cigarette. He had a Jersey accent. it was like an adult night out like happy birthday to you, happy birthday to you, you get it, but it quickly became clear that kids are the ones who really enjoy being around animal-like animatronics and, therefore, the Pizza Time theater in Chuck and cheese.

Born with the rat mascot front and center, the first restaurant opened in 1977 in San Jose, California, and the concept exploded thanks to three things Chuck-E-Cheeses could seat over 400 guests far more than any another pizzeria and the 20 minutes. the waiting window for pizza was a gold mine for the arcade, they could lure people in with some free chips with every meal, people kept coming quarter after quarter to those 75 arcade games, restaurants tended to to be low margin

business

es and those games are very profitable. Those games accounted for 40 to 50% of the chuck-e-cheese restaurant's profits, the iconic Chuck-E-Cheese chips, that's where people spend most of their money to get chips to play the games. arcade and have this party experience, not much about pizza now, even before the release of Chuck-E-Cheese, Bushnell sold Atari, including the Chuck-E-Cheese concept, to Warner Communications in 1976, so in 78 Bell bought back Chuck-E-Cheese for half a million dollars and quickly expanded to new locations.

Then things got a little complicated. The success of Chuck-E-Cheese caught the attention of businessman Robert Brock and he signed on to franchise more than 200 locations but that same year Brock ended up canceling the deal looking for an engineer for animatronics and launching a family. restaurant chain, called it ShowBiz Pizza, the concept was more or less the same, they were different characters but the same type of Pizza arcade games and, although Chuck-E-Cheeses had been growing along with the burgeoning gaming industry through early 80s. found himself in a bitter battle with imitator Showbiz there was definitely a rivalry between the two at the time and Showbiz had arguably better animatronics Chuck and his friends were limited to frames on the wall chiz had a full band called Rocka fire explosion made of full material The body characters In 1981, sh locations were grossing nearly $1.5 million in revenue, surpassing Chuck-E-Cheeses by $260,000 per store, but Chuck-E-Cheese still had more locations and was still outperforming Pizza Hut and McDonald's at the time, so that year Bushnell took Chuck-E-Cheese to the public, but there was trouble looming on the horizon.

Chuck-e-cheese's was no longer the best arcade and definitely not the best pizza place as the market filled up, the novelty wore off, and things got sad. tried to surpass show business Bush now expanded faster and faster by opening a new location every 5 days and putting the company into debt. Then came the video game industry crisis in 1983, when people turned to computer game consoles and arcades were hit hard. Video game sales fell 97%. nationwide and arcades closed across the country, it was not a good time to have a restaurant focused on arcade games that year, Chuck e-cheeses' losses reportedly amounted to $15 million and a year later, Chuck -E-Cheeses declared bankruptcy, but its rival Showbiz, well, that The company withstood the crisis a little better and, in a wild twist, the entertainment world ended up buying Chuck-E-Cheese for $35 million.

The imitator had acquired the original, but the acquisition brought some life back to Chuck-E-Cheese in the early '90s. Showbiz restaurants morphed into Chuck-E-Cheeses for some reason Chuck-E-Cheese , the mascot really had staying power, people loved the rat and those best animatronics on Showbiz also got a new life, the bandRocka's fireburst was stripped of his costumes and replaced by Chuck-E-Cheese and his crew, the fact that Chuckecheese

died

and then was reborn into a new company is very strange, fast forward to 1998 and Chuck got a bit of a makeover, The parent company dropped the Showbiz name for C.

Entertainment by 20 there were 300 locations and the company was constantly growing. I would say in the '90s and early '00s, Chuckecheese was really thriving, that's when people my age, I think, have childhood memories, really nostalgic memories, the best ERA for Chuckecheese, really this. Renaissance didn't last long 12 years later, even though locations continued to open, they suffered another drop in sales, so again Chucky the rat was renamed this time as a rock star. Mouse with a backstory according to the company website Charles Entertainment Cheese is an orphan. As he celebrates others' birthdays to compensate for his difficult childhood, the new mouse arrived along with a gluten-free pizza option 2 years later, despite declining sales.

Private equity firm Apollo Global Management saw an opportunity. Chuck-E-Cheese still had brand recognition and locations throughout the world, restaurants tend to have a short life cycle. The good thing here is that the children get older and new ones come in, which gives the business or gave the business a certain degree of resilience. Private equity firms approach owners with an idea they like. We are going to expand this business, we are going to take it abroad, to other countries, and that is attractive. Apollo acquired Chuck-E-Cheese Entertainment in a leveraged buyout for about $1 billion in a Leveraged Buyout Private equity firms buy a company with some of their own money and some borrowed money that turns into debt.

The company is responsible for ultimately paying off Chuck-E-Cheese with nearly $1 billion in debt. It was quite a bit of debt for a company like Chuck-E-Cheese Chuck-E-Cheese already had a lot of monthly rent expenses on all of its locations, expensive arcade games and animatronics to maintain to try to keep up with debt payments. Chuck-E-Cheese tried to revamp it again. It retired its famous animatronics, added an interactive dance floor, redesigned the restaurant, and replaced the iconic gold tokens with a game pass card, but operating income had been slowly declining. A reverse merger planned for 2019 was going to help them with their debt load, but it never came.

Things only got worse when famous YouTuber Shane Dawson posted a video circulating decades-old rumors that Chuck-E-Cheese recycled pizza. Chuck-E-Cheese definitely denied that they were recycling their pizza, however, the pictures make it look like they do. Despite the company's insistence on zero pizza foul play, the damage to Chucky Cheese's reputation had already been done. So, as we all know, in 2020, the corona virus pandemic forced Chuck-E-Cheese to close locations due to dying in March when you can't have children. By June, only about half of the nearly 560 locations had reopened for dine-in or takeout. Sales were down 94% over the last 2 weeks in March and 21.% overall in the first quarter and the company was forced to lay off 65% of its support staff and most hourly employees.

By June 25, the parent company had filed for Chapter 11 bankruptcy with nearly $2 billion in debt and announced the permanent closure of 34 stores. It soon followed The entire purpose of a Chapter 11 bankruptcy is to try to protect the integrity of the company while also getting rid of the large amount of debt that put the company into bankruptcy to begin with, by the end of 2020, the company said which had successfully paid off $75 million in debt, still has nearly 500 locations in the U.S., and since the restructuring, Chuck-E-Cheese has sought to expand the brand globally, but the iconic cast of characters in the restaurant that chews lead to believe that prohibited will not be present for the In November 2023, the company announced that it would remove the animatronic bands at all its locations except one in a Los Angeles suburb, but although it may be missing some friends, it seems that Chuck-E-Cheese is here to stay when you listen.

TGI Fridays you might think of family-friendly meals and colorful cocktails, but the chain started out riding the wave of the sexual revolution in the 196s as one of the first singles bars in the U.S. My favorite line was Hey honey, I own this place and it worked. always, but as Fridays became a family restaurant, fought competition and began closing restaurants after the 2008 financial crisis, so how did TGI Fridays go from the hottest spot in town to a restaurant and decline ? When Alan Stillman opened his first bar in 1965, he was thinking about one thing: my business plan was to meet a lot of women.

It's a great business plan. I'll tell you that back then women rarely went out drinking in public, it was even forbidden in some places where women didn't have a lot of rights, I mean, you couldn't have your credit card, everything had to be there, already You know, under the auspices of a man, you had to be connected to a male figure, but things were changing rapidly, you know, outside of the Vietnam War protests and outside. From the civil rights movements there was a women's liberation movement. A new movement for women's liberation was launched. Cities were increasingly filled with working women looking to spend time with their friends or find a date like Stillman, so she came up with a simple concept: a cocktail party. party that anyone could attend Stelman redecorated an old bar on the corner of First Avenue at 63rd Street in Manhattan with Tiffany lamps, Ferns and Bentwood chairs, the weight staff dressed in red and white stripes and his concept was to create a space where women could feel welcome.

The word "singles ball" wasn't invented and I certainly didn't think I was inventing anything like that. Still, the man's plan to find a date had worked not only for him but for single people all over New York. In 1970, a TGI Friday opened. In Memphis this time it is a franchise and four more franchises followed shortly after, so I saw it and always thought that after 10 years of corporate life I was going to be an entrepreneur and this seemed like a good opportunity. This is Dan Skogan. I signed an agreement with Stillman to launch eight new locations starting with Dallas.

Little did I know that this decision would have me in a Volkswagen bus with a beard and bell-bottoms and walking around buying antiques until 1971 selling anything besides beer or wine in a bar in Dallas had been illegal for over 5 decades, even after that prohibition ended and was repealed, but things were about to change. We wanted to improve on what Alen had been doing when Skogen's TGI Fridays opened in 1972. It had phone booths, outdoor patios and a raised patio. In a square bar there were customers at a bar and then there was a tiny, narrow passageway where the bodies were all very deliberately together and that was a huge success and we opened with a 30% profit, which was more than three times the best than any Friday ever had. done skokan introduced strawberry daquaries and other frozen cocktails a new type of drink menu designed to appeal to women we would go every night and see what guys we could pick up at the bar we were usually very successful CU we were young and pretty a long time ago when and in fact I met my husband there, we still wanted to be the best bar in town so all our bartenders had to be able to serve freely better than a machine and they had to be the friendliest, most outgoing and wonderful people you could ever buy a drink.

He would start doing the trick and then stop making some drinks so that you and the people you didn't know next to you would start talking. Oh, what are they doing now? You're making friends. the biggest show in town, people were lining up outside, we would have to cordon off the bar, we would have to let people out to let people in, but eventually the lines started to thin out, unfortunately the singles bar thing ended , That's how it went. suddenly and it took me by surp

rise

, so skogan decided to pay more attention to the food, we expanded the menu quite a bit, I mean there were a lot of products there and that was our first step to being a restaurant, not just a bar.

Favorites like loaded potato skins were added to the menu. These are going to neutral territory. TGI Fridays was making a comeback as a pioneer of family meals. Welcome to Friday. Enter 1975. Skogan and his partners sold the company to the Carlson group. Stillman left the business and eventually created Smith and Wilinsky, the famous Skogan steakhouse, remaining as CEO. We got to work on a strategy to become an Impulse through an alternative to eating at home. A new category of restaurants was on the

rise

. Casual family dinners at the 1970s and early '80s chains like Ruby Tuesday Chili's Applebees and Olive Garden entered an increasingly crowded market.

TGI Fridays struggled to stay ahead in 1983. Carlson decided to adopt the chain's public menus, which changed each season. Tji Fridays came up with a kids' menu and non-alcoholic drinks debuted in 1983 when Fridays turned 20 in 1985, there were more than 100 locations in the U.S. and the focal point of each restaurant, the bar, had become part of popular culture. The cocktail flash, as it was called, reached a whole new level. TGI Fridays launched its own world championship. Alan Stillman even claims that Tom Cruz's cocktail party character was based on him. You have to sit in Water G County, but Skogan's growth came at a price because of how fast we were growing. having stores that were problematic was all because we had expanded it too quickly, skoken left in 1986 and 3 years later the Carlson companies bought out all the shareholders to privatize the chain again and make a big push to expand.

I was at the end of my contract, he wanted me to stay and do the international thing and I told him: now you know I have this ship, I have to get on, take my family and leave, in the mid-1990s, almost Every state had at least one TGI Fridays and the brand had gone international, there was even a location at the US Air Base in Afghanistan, over time TGI Fridays introduced a low carb menu and toned down the decor at TGI Fridays, we let our chefs flex their muscles and have a whole new menu to show for it, but despite high advertising spend, Fridays struggled to stand out.

Fridays were indistinguishable from the competition. Fridays felt like an Applebees, for example, or an Applebees felt like a Chili, everyone was working. Following in many ways the same playbook in 2008, Tji Fridays had more than 600 restaurants in the U.S., but sales began to decline as the financial crisis gripped the restaurant industry. We began to see the emergence of this new segment called fast casual that they were now beginning. to offer very high quality meals and they did it cheaper they did it faster they did it where you didn't have to wait at your table you didn't have to tip between 2008 and 2019 on Fridays they closed more than 200 restaurants in the US sales too. collapsed in 20120 plans to take TGI Friday public were once again canceled when the pandemic shook the industry when a company plans to go public and then doesn't, which is generally not a good sign during the pandemic.

TGI Friday's closed more of its 386 restaurants in the US, people wanted things delivered to their homes, the pandemic really supercharged that, but all is not lost for casual dining chains. It is very premature to write off casual dining, the growth that casual dining has experienced during 2021 has been nothing short of remarkable. TGI Friday still has more than 700 restaurants worldwide and its focus on delivery began to pay off in 2022. Sales in the US increased to 8% compared to pre-pandemic levels, but 2023 was a big year for Fridays with constant shakeups at the top CEO Ray Blanchett resigned in May 2023 and his successor Brandon Coleman only lasted 2 months.

He was replaced by longtime board member Wen Spangler, who the company says will expand the company's global footprint and return to its roots. The company hopes to be able to do so. Recapture some of that lost Friday feeling Applebee's was once the go-to destination for family nights out, but over the past 6 years Applebe's has closed nearly 300 stores and rising development costs have prevented the company from opening new ones for a change. his luck around Apple. peas got his $1 Margarita offer back, the dollarita,But will that be enough to see people eating well in the neighborhood once again?

Bill and TJ Palmer opened the first Applebees in 1980. Three years later, they sold the restaurant concept to the WR Grayson company and it quickly exploded. In 1994, there were over 500 Applebee's locations in the US and just 4 years later, In 1998, the company opened its 1,000th restaurant, rivaling competing stores such as IHOP with 800 and Denny's with more than 1,000 stores nationwide. Applebees was doing really well because they were reliable they weren't too fancy they weren't too cheap but they hit a good middle ground for people dishes like Applebee's boneless buffalo wings became fan favorites and promotion as appetizers to half price made Applebee's a popular place for Customers were looking for a good deal, but at the end of 2007 the recession hit and people stopped eating out as we are in a recession, the longest recession since the World War II, but the question now is when it will end, as Applebe sales struggled in the post.

In a recession economy, it tried to reinvent itself as a modern bar and grill to attract emerging millennials, but it didn't work out. Applebee's tried to be a little modern, a little cool, and came off as a little cheesy to most people. Where it seemed like they were trying too hard to win over Millennials, new menu items like $20 hand-cut steaks and brisket nachos not only failed to attract new Millennial diners, they alienated the same customers they had. For Applebee's to be successful in the first place, people looking for a reliable and affordable meal in 2015 Applebee's sales were falling and only continued to fall year after year in 2017 the company closed 99 locations Julia Stewart, the CEO of Applebee's parent company , D Brands Global, reportedly resigned due to Applebee's poor performance, the former waitress was one of the industry's most famous and longest-serving executives.

For a brief time it looked like Applebees was finished, but instead of closing, it changed things starting in late 2017. 2018 Applebee's parent company, D Brands, brought in new leadership and this new leadership was very, very focused. about being affordable and not trying to be too trendy, they basically took Applebee's back to basics. They won't try to win over Millennials with these fancy new menu items. They're going to find something affordable that people like. The biggest thing that drove the change for Applebee's was the dollar, the $1 Margarita after the success of the dollar. Applebee's quickly launched its neighborhood beverage program, launching a new one-dollar and $3 beverage each month.

Alcohol offerings helped Applebee's stay strong during the pandemic. Off-site sales increased from 133% to more than 40% in 2021. Apple B says it is now achieving the same number of customers as before the pandemic and with Dollarita returning. Parent company D Brands hopes to get back to the good times. for The Neighborhood Grill, yeah