Five years after a bankruptcy filing closed all of the Bennigan's restaurants, the Irish-themed bar-and-grill chain is back in business.
Investors supporting the resurrection of the brand are betting that the way to become the next big thing in the casual-dining sector is to bring back an old favorite.
The restaurants have been given a new logo, a new one-page menu and a brighter, more modern interior design.
But Bennigan's is going to face the same bar-and-grill rivals that made survival difficult in the past — chains like Applebee's, Houlihan's and T.G.I. Friday's — as well as fresh competition from the explosion of fast-casual restaurants like Chipotle.
Bennigan's reopening comes as restaurants are reporting their worst three months since 2010, according to the Knapp-Track Index of monthly restaurant sales. Diners facing higher payroll taxes are cutting back on eating out.
It's not expected to become easier. The research firm NPD Group is forecasting that the restaurant industry will essentially be flat over the next decade, meaning any chains that gain customers will be stealing them from other restaurants.
“It really is going to be a battle for market share, and those who are the most creative, the most innovative and best able to meet consumers' wants and needs will win,” said Bonnie Riggs, restaurant industry analyst for NPD.
“There's lots of potential competitors out there” for Bennigan's, said Alan Liddle, an editor at Nation's Restaurant News.
But, he said, the starting-over story may give Bennigan's an edge.
“Given they've been away from the scene for a little while, it may be that that absence works to their advantage because people remember all the good stuff — and not the most recent reports about them going bankrupt.”
The first New Jersey example of the made-over Bennigan's opened last month in Saddle Brook, on the site of a former Bennigan's that had sat empty since 2008.
“We love the brand,” said Suketu Shah, one of the new franchise owners. “We both used to go to Bennigan's all the time, and we were nostalgic for the brand.”
Bennigan's was bought out of bankruptcy in 2008 by the New York-based private-equity firm Atalaya Capital Management. Paul Mangiamele, the new chief executive Mangiamele, a restaurant industry veteran who was recruited by investors in 2011 to lead the turnaround, is seeking franchise owners to re-establish the brand.
After the bankruptcy, Bennigan's, which had more than 300 locations at its peak, closed all of the company-owned restaurants. Many of the franchise locations closed as well, but 70 remained open during the bankruptcy proceedings. Most franchise locations that survived were in countries like South Korea, where Bennigan's remained popular.
Since the turnaround began, the company has opened 15 Bennigan's and has development deals for 30 more locations worldwide for 2013.
The chain failed, Mangiamele said, because previous executives “mismanaged it into oblivion” and didn't “reinvest and reinvent.”