52-year-old international restaurant chain shutting down all locations
The half-century-old brand decided to terminate its global operations.
1End of an era for the half-century-old brand
The restaurant chain, founded in 1972 and operating in over 20 countries, has decided to permanently close all its locations. The chain had pursued aggressive expansion in Europe and Asia during the 2000s. Having reached record revenues with 500+ locations in 2019, the company failed to recover post-pandemic. Recent financial reports show the chain reported a $120 million loss in 2023. Management cited supply chain issues and rising costs made operations unsustainable.
2The phased shutdown process
The company announced a 6-month transition period for complete closure. Initially, 150 Asia-Pacific locations will close by end of March. European operations are planned to continue until Q3 2024. Employees will receive severance packages plus career transition support. Franchise operators will be offered a special exit package, according to the announcement.
3Pandemic's lasting impact
The CEO highlighted structural changes caused by COVID-19 in the industry. Permanent shifts in home dining habits and rise of delivery platforms challenged traditional models. Menu simplification and digital transformation efforts in 2022 failed to deliver expected results. Radical changes in consumer preferences, especially in China and Japan, caused irreversible losses in Asian markets.
4Competitive pressures and cost crisis
Industry analysts note the chain couldn't keep pace with fast-growing fast-casual competitors. Food inflation rising 47% over 5 years squeezed profit margins critically. Energy costs soaring 210% and minimum wage hikes multiplied operational expenses. Meanwhile, a key US competitor reduced labor costs by 30% through kitchen automation investments.
5Consequences for employees and franchisees
The shutdown leaves over 15,000 employees jobless. Union representatives demand additional support for workers with 10+ years tenure. Franchise operators face $1.2 billion in collective investment risks. In some markets, exclusivity clauses prevent franchisees from switching to other brands.
6Domino effect on supply chain
The chain works with 200+ suppliers across 12 countries, being the primary buyer for many meat and seafood providers. Experts predict $500 million revenue loss for agricultural sectors. Some regional suppliers face bankruptcy risks, prompting calls for government intervention from trade associations.
7Customer loyalty and brand value
The brand pioneered 'fusion cuisine' in the 1980s. Loyal customers launched #SaveOurRestaurant campaigns on social media. Surveys show 68% of customers had 10+ year relationships with the brand. Valuation experts estimate intellectual property could fetch $120-150 million, with particular interest expected from Asian investors.
8Future of retail gastronomy
This closure serves as a warning for traditional restaurant chains. McKinsey predicts 30% of restaurants will adopt hybrid (dine-in + cloud kitchen) models by 2030. Investors now favor smaller, tech-enabled concepts. Experts highlight mid-scale chains balancing 'experience' and 'speed' as most vulnerable. This shutdown may accelerate industry consolidation waves.
Original article: Yahoo Finance — 52 yıllık uluslararası restoran zinciri tüm şubelerini kapatıyor