Report: Denny's, Wendy's and Domino's among restaurants in danger of bankruptcy (Obama Depression)

WCPO ^ | 06/30/2011 | Pete Kenworthy

[TSgt]

Following bankruptcy filings by Sbarro, Perkins and Marie Callender’s this year, new data suggests that other popular restaurant chains are in danger of following suit.

TheStreet.com recently looked at restaurants based on their Altman Z-Score. The website says the score is based on “several aspects of a company's financial health -- including working capital, total assets, total liabilities, market capitalization, sales, retained earnings and earnings before interest & taxes (EBIT) -- to forecast the probability of it going bankrupt within two years.”

Since it began the scoring system in 1968, TheStreet says the formula has been 72 percent accurate in predicting corporate bankruptcies two years prior to the filing.

The list of restaurant in order of most at risk to file for bankruptcy (limited to those with a market capitalization of $100 million):

1. Denny’s 2. Wendy’s/Arby’s 3. Morton’s Restaurant Group 4. DineEquity (IHOP, Applebee’s) 5. Domino’s Pizza 6. Bravo Brio Restaurant Group 7. McCormick & Schmick’s 8. Ruth’s Hospitality Group (Ruth’s Chris Steak House, Mitchell’s Fish Market) 9. O’Charley’s 10. Einstein Noah Restaurant Group

[MamaDearest]

My husband used to work at the former Alcoa aluminum mill in Vancouver before they shut it down and disassembled everything in the plant. The BPA had a heavy hand in both the Reynolds and Alcoa shutdowns. Between the two plant shutdowns, a very large segment of workers became unemployed.

We like to give restaurants two chances. If they blow the second one, we never go back. There are places where once is quite enough, however.

[cynwoody]

Arbys is awesome! If they go under I’ll be mad. Don’t get to visit them often here in MA but I do when possible.

There used to be one here, in Porter Square, Cambridge. But it had a fire, reopened as a Greek restaurant, and now is a Korean restaurant (the Kaya Restaurant). You can still see that Arby's roof profile.

[SunkenCiv]

Thanks TSgt.

A sit-down restaurant chain that had a presence here closed precipitously in May or early June. I was waiting for a light to change, and the former location was in my eyeline, stripped of all identifying stuff. Culver’s I think is the name.

The fact is, people here are not eating out as much (I rarely do) and we’ll probably not see the usual sinewave of an uptick in independent restaurants, because of that.