Denny’s and Algebra
(00:00.658)
Denny’s and Algebra, Denny’s restaurants, yeah, they’re going to close up to 150 locations. Other restaurants as well. TGI Fridays. There’s been a litany of them. know, people, I’m be honest. I’m surprised sometimes at the questions I get from our listening audience out there when certain business stories pop up. And I got a bunch in regards to Denny’s. Now, I haven’t been to Denny’s in some time. Sometime I think I got to think I got to go back to.
college last time I went to Denny’s it was probably around three four o’clock in the morning but anyway neither here nor there Denny’s in algebra why Denny’s closing 150 restaurants people are like my god it’s people don’t want to spend anymore no no people people want to spend people want to go to restaurants that’s not the issue the issue is the math doesn’t work anymore
It’s just that simple. This is one of the things that happens in business. All Denny’s is a discount restaurant. Correct? I call it fast food. I mean, kind of fast food. You want to call it Again, when I think of fast food, I think of like McDonald’s, Burger King, you go up and you order, nobody really waits on you. They wait on you at Denny’s, but it’s still quasi fast food. Now, the algebra. I’m often…
As I’ve been asked for years, people ask me to evaluate their business. I remember, you know, back, back in the day, down in Southwest Florida, down around Sarasota Lakewood Ranch area, people asking about opening up a restaurant. And I go in and I take a look at the size of this restaurant. They tell me what their business plan is. And I say, no, no, it’s not gonna work. What do you mean it’s not gonna work?
Well, it’s not gonna work. Take a look at the size of this place. Okay? I’m gonna maybe go back to the, I always use the South Park episode, the underwear gnomes, where the underwear gnomes have this business plan where they steal the kids underpants and the middle part they don’t have, they got a question mark and the last part is profit. Now, you wanna get to the point where you’re able to profit, right?
(02:24.15)
Well, if certain areas of your business have gone up, labor costs, food costs, energy costs, whatever it may be, and your customer’s only willing to spend X amount of dollars on moons over Miami or eggs over, how does that go? There’s moon over Miami. Yeah, moon over Miami. Wasn’t that the thing on the menu? Grand Slam breakfast.
they’re only willing to spend so much. mean, there’s a point in time where people like, that’s all I can stand, I can’t stand anymore. The algebra doesn’t work anymore, it doesn’t add up. And that’s what we’re seeing all over the country. The numbers don’t work anymore. When states say, okay, you know what, we have to raise minimum wage. Okay, labor costs have gone up.
energy costs, we’ve talked about that, costs when it comes to regulation, all of these things, all of these things increase. But certain businesses like a quasi fast food restaurant where your customers are willing to spend a certain amount of money, that’s only gonna go so far. They can only raise their prices so much. You can raise your prices to a point,
where you can pass the costs on until you can’t pass them on anymore and then you’re like, screw it. It’s not worth it. Let’s shut it down or it’s not even worth it. It’s not even worth having the place in business for only gonna profit this much. And there’s no sign of hope on the horizon where that’s gonna change or that’s gonna turn around. You’re gonna continue to see this. You are gonna continue to see this all over the country and more of these.
chain restaurants are going to go by the wayside. They cannot make the math work. Watchdog on wallstreet.com.
