What's Happening?
Smokey Bones, a barbecue restaurant chain, is set to close additional locations following its acquisition by FAT Brands in 2023 and subsequent spin-off into Twin Hospitality Group. Of the 60 units involved in the transaction, 15 underperforming outlets will be shuttered, with 10 already closed and five more expected to close by the end of Q3. The closures are part of a strategy to enhance EBITDA performance by reducing corporate overhead. Additionally, 19 locations will be converted into Twin Peaks restaurants, which have shown higher average unit volumes (AUVs) compared to Smokey Bones. The remaining 26 Smokey Bones locations are generating positive cash flow and will be partially franchised under the leadership of new president Ken Brendemihl.
Why It's Important?
The decision to close and convert Smokey Bones locations reflects the challenges faced by restaurant chains in maintaining profitability amid changing consumer preferences and market dynamics. By focusing on higher-performing Twin Peaks conversions, Twin Hospitality Group aims to optimize its portfolio and improve financial performance. The restructuring highlights the importance of strategic management in the restaurant industry, where adapting to market conditions and consumer trends is crucial for long-term success. The appointment of Ken Brendemihl, with his extensive experience in the restaurant sector, signals a commitment to revitalizing the Smokey Bones brand and exploring franchising opportunities to expand its reach.
