Ground Round

Last updated

Ground Round Grill & Bar
Company type Casual dining restaurant
Industry Restaurants
FoundedOctober 25, 1969

Ground Round Grill & Bar is an American casual dining restaurant chain that was founded in 1969 in Massachusetts [1] by Howard Johnson's. [2] Originally intended as a secondary concept to upgrade poorly performing units of Howard Johnson's, it also operated on a standalone basis and became a major growth focus for Howard Johnson after the 1973 oil crisis hurt its other concepts. By 1985, when Ground Round was separated from Howard Johnson, it had 215 restaurants.

Contents

In the late 1980s and 1990s, Ground Round suffered from an outdated image compared to other casual dining competitors such as Chili's and Applebee's, an overly large menu, and debt from multiple sales that diminished the chain's ability to invest in restaurant remodels and other initiatives. Boston Ventures Management acquired Ground Round in 1997 but struggled from delayed sales of corporate locations and a refranchising effort that left the company-owned stores underperforming franchised units.

After filing for Chapter 11 bankruptcy protection in 2004, the chain closed some 60 corporate-owned locations. Ground Round Independent Owners Cooperative, LLC—a group originally formed of franchise owners based in Freeport, Maine [3] —bought the chain out of bankruptcy, at which time it had 71 locations. The unit count has continued to dwindle since then, with just 15 units as of 2021. Most remaining restaurants are in the Upper Midwest and the Northeast.

History

Ground Round was founded in 1969 by Howard Johnson's as a chain of pubs with a simple menu. It was intended as a new concept to convert marginal Howard Johnson's locations, as well as existing restaurant facilities. [4] After the 1973 oil crisis, Ground Round became the primary expansion target within the company as it was forced to shift from long-distance travelers to local residents; by 1975, there were 64 Ground Round units, surpassing the Red Coach Grill concept. [5] During the 1970s and 1980s, Ground Round was well known for its children's parties, showing silent movies and cartoons on a big screen, a mascot named Bingo the Clown, and for passing out peanuts, [6] [7] whose shells customers could just drop on the floor. [8]

Ground Round had four owners in a 22-year span; [9] Imperial Group retained Ground Round when Howard Johnson was sold to the Marriott Corporation in 1985, and its headquarters moved in the Boston area from North Quincy to Weymouth. [10] Hanson Group USA purchased Imperial in 1986; three years later, International Proteins Corporation acquired Ground Round for $93 million, at which time the restaurant chain had 215 locations (178 corporate-owned). [11] In the meantime, the once-simple menu had grown to over 200 items, the chain had failed to keep up with the times, the buildings and their decor were outdated, and the restaurant saw its market share drop. [8] The menu size increases, which included such dishes as swordfish and Mexican pizza, stemmed in part from attempts to diversify a menu heavy on meat dishes. [12] Competitors such as Chili's and Applebee's siphoned market share; in 1994, the 207-unit system implemented its first-ever image advertising campaign as well as a restaurant remodeling plan. [13] The constant changes in ownership caused money that otherwise might have gone to updating restaurants to be diverted to debt payments. [13] [14] Such chain staples as peanuts and free popcorn were scrapped or scaled back in attempts to modernize. [14]

After sales slowed in the casual-dining segment and Chili's and Applebee's were able to invest more in advertising, [15] it was acquired by Boston Ventures Management in 1997; [8] two years prior, a merger with a group of senior investors fell through due to high interest rates. [16] The privatization of the previously publicly traded Ground Round increased its debt burden. [17] In spite of a 2000 relaunch with a new prototype and a slimming down of the menu from 300 items to 80, [18] the company struggled after sales of 19 company-owned units fell through, causing it to default on loan payments. [9] Refranchising attempts left corporate with the worst performers in the chain. [8] [17]

Bankruptcy and cooperative ownership

On February 13, 2004, Foothill Capital Management and Boston Ventures Management terminated their credit facilities for the chain. [17] That day, all corporate-owned restaurants, almost half of the Ground Rounds then open, abruptly closed their doors. [9] The franchisor for Ground Round, American Hospitality Concepts, filed for Chapter 11 bankruptcy on February 19. Nation's Restaurant News reported that "the mass layoffs and hasty restaurant lockups on that Friday afternoon, catching scores of diners in the middle of unfinished meals, were of a scale not seen in the restaurant industry in recent memory" and franchise owners were equally as taken aback by the news. [17] While franchised stores—which on the whole were higher-performing than corporate locations—remained open, sales fell as confused consumers assumed all restaurants had closed. [9] A group of franchisees bought out the company and started the Ground Round Independent Owners Cooperative, LLC. [19] They beat out U.S. Residential Properties, a Dallas-based real estate investment trust, by agreeing to settle $40 million in cure claims. [8] After the bankruptcy, Ground Round emerged as a 71-unit system, with 64 restaurants part of the cooperative and seven owned by other franchisees. [9]

In 2011, the Independent Owners Cooperative paid down its remaining loans from the 2004 acquisition. [20] A new location opened in 2012 in New Jersey attached to a 26-lane bowling alley. [21] There were 27 units by 2013, when the company declared its interest in expanding outside the chain's traditional base. [22] Most of the remaining units were clustered in the Upper Midwest and Northeast. [3] There were 15 units by 2021, when Ground Round launched another attempt to grow its market share with a beer-focused concept to open inside a Best Western hotel in Waterloo, Iowa. [23] Locations from Missouri to New York state have closed as independent restaurateurs retire or sell the buildings. [24] [25] [26] [27]

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References

  1. ↑ Cahn, Lauren (April 25, 2022). "The Untold Truth Of Ground Round". Mashed. Archived from the original on January 29, 2024. Retrieved January 29, 2024.
  2. ↑ Grant, Tina (1997). International Directory of Company Histories. ISBN   9781558623514. Archived from the original on May 1, 2024. Retrieved October 8, 2021.
  3. 1 2 "MRM Franchise Feed: White Castle Weddings, Ground Round Growing and KFC in Space". Modern Restaurant Management. June 23, 2017. Archived from the original on September 30, 2017. Retrieved September 29, 2017.
  4. ↑ "Shakey's Is Converted To Ground Round". Elk Grove Herald. Elk Grove Village, Illinois. May 2, 1972. p. 1:13. Archived from the original on May 1, 2024. Retrieved May 1, 2024– via Newspapers.com.
  5. ↑ "Restaurant Chain Changed Directions During Gas Crisis". Durham Morning Herald. Durham, North Carolina. Post-Times Service. December 28, 1975. p. 19A. Archived from the original on May 1, 2024. Retrieved May 1, 2024– via Newspapers.com.
  6. ↑ Ludwick, Jim (October 24, 1982). "Despite pickets, Ground Round wins patrons". Herald & Review . Decatur, Illinois. p. A3. Retrieved April 30, 2024.
  7. ↑ Fredrich, Lori (May 27, 2015). "It's 1981 all over again: Ground Round is back". OnMilwaukee.com. Archived from the original on October 4, 2017. Retrieved October 3, 2017.
  8. 1 2 3 4 5 Wright, Leslie (September 5, 2004). "Ground Round franchisee fights to keep chain intact: Group fends off a takeover after parent company". The Burlington Free Press. pp. 1E, 3E. Archived from the original on May 1, 2024. Retrieved May 1, 2024– via Newspapers.com.
  9. 1 2 3 4 5 Adler, Carlye (February 2005). "The Ground Round Rebound". Fortune Small Business. pp. 56–60. EBSCOhost   16663020. Archived from the original on May 14, 2021. Retrieved August 3, 2020.
  10. ↑ "The Ground Round chain moves its headquarters to Weymouth". The Boston Globe. Boston, Massachusetts. December 15, 1985. p. A53. Archived from the original on May 1, 2024. Retrieved May 1, 2024– via Newspapers.com.
  11. ↑ Wallace, Evelyn (June 29, 1989). "Ground Round chain is sold for $93M in cash and stock". The Central New Jersey Home News. New Brunswick, New Jersey. p. B8. Archived from the original on May 1, 2024. Retrieved May 1, 2024– via Newspapers.com.
  12. ↑ Hertneky, Paul (August 1991). "One for the Gipper". Restaurant Hospitality. p. 122. ProQuest   236828007.
  13. 1 2 Carlino, Bill (May 23, 1994). "Ground Round implements plan to recapture former appeal". Nation's Restaurant News. pp. 3–4. EBSCOhost   9409023415.
  14. 1 2 Lowery, Mark (February 22, 1996). "New broom sweeps peanut shells: Hamburger-chain helper: Turnaround hopes abound at Ground Round". The Record. Hackensack, New Jersey. pp. B-1, B-2 . Retrieved May 1, 2024– via Newspapers.com.
  15. ↑ Allen, Robin Lee (September 29, 1997). "Execs: Ground Round deal buys hope for future". Nation's Restaurant News. EBSCOhost   00280518.
  16. ↑ Allen, Robin Lee (January 30, 1995). "Ground Round merger off; high interest rates cited". Nation's Restaurant News. EBSCOhost   00280518.
  17. 1 2 3 4 Lockyer, Sarah E. (March 1, 2004). "Ground Round goes flat, shuts 60 units, files for Chapter 11". Nation's Restaurant News. ProQuest   229329529.
  18. ↑ Allen, Robin Lee (December 11, 2000). "Ground Round seeks to update image with 'Grill & Bar' prototype". Nation's Restaurant News. pp. 10, 122. ProQuest   229328705.
  19. ↑ Daley, Jason (May 29, 2012). "How Ground Round, Sizzler and Bennigan's Bounced Back from Bankruptcy". Entrepreneur. Archived from the original on September 22, 2017. Retrieved October 3, 2017.
  20. ↑ Ruggless, Ron (May 11, 2011). "Ground Round pays down debt, eyes growth". Nation's Restaurant News. Archived from the original on December 2, 2023. Retrieved May 1, 2024.
  21. ↑ Olivier, Bobby (June 22, 2015). "Welcome to New Jersey's last Ground Round". NJ.com. Archived from the original on September 30, 2017. Retrieved September 29, 2017.
  22. ↑ Frumkin, Paul (January 24, 2013). "Ground Round pursues aggressive growth, overhaul". Nation's Restaurant News. Archived from the original on January 29, 2024. Retrieved May 1, 2024.
  23. ↑ Romeo, Peter (May 25, 2021). "Ground Round to give a beer concept a try". Restaurant Business. Archived from the original on January 29, 2024. Retrieved May 1, 2024.
  24. ↑ O'Brien, Kathleen (January 29, 2024). "Ground Round in Bangor closes for good". Bangor Daily News. Archived from the original on February 5, 2024. Retrieved May 1, 2024.
  25. ↑ "Ground Round restaurant in Fargo is closing". Valley News Live . July 1, 2017. Archived from the original on November 9, 2020. Retrieved May 1, 2024.
  26. ↑ Rowe, Courtney (January 1, 2023). "St. Joseph landmark restaurant, Ground Round, closes after more than 50 years". KQ2 . Archived from the original on January 3, 2023. Retrieved May 1, 2024.
  27. ↑ Menard, Brandon (April 14, 2020). "Owner of Plattsburgh's Ground Round announces closure". WPTZ. Archived from the original on May 18, 2022. Retrieved May 1, 2024.

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