Perkins Restaurant and Bakery Company Analysis

Part
01
of five
Part
01

Perkins Recent News

Twelve recent news and media articles about Perkins Restaurant and Bakery that chronicle the restaurant's issues over the past 12 months include articles about restaurant closings, payroll problems, bankruptcy, acquisition, restaurant sales, inspection issues, theft, power problems, and employee layoffs, among other topics.

Perkins Restaurants recovers from early morning payroll glitch

Perkins closes and says, 'Thanks Springfield'

Huddle House closes on Perkins deal

  • This article was published in the Memphis Business Journal on October 23, 2019.
  • Huddle House, a restaurant operating out of Atlanta, Georgia, purchased Perkins Restaurant & Bakery and would continue to operate both brands separately.
  • The acquisition deal reportedly cost Huddle House $51 million.

Huddle House restaurants will lay off 24 workers in Memphis

  • This article was published on Commercial Appeal on October 30, 2019.
  • Following Huddle House's acquisition of Perkins Restaurant & Bakery, it filed notice with Tennessee state officials that it would be laying off 24 workers.
  • Although the company would not state whether these were employees of Perkins, it identified the location of the affected workers as Perkins' Memphis headquarters.

Company NewsNew Perkins Owner to Invest ‘Up to $1M’ in Renovations

  • This article was published in The Business Journal on October 22, 2019.
  • The new owner of four Youngstown, Ohio Perkins restaurants plans to invest up to $1 million per location to renovate the buildings and "reintroduce them to the market."

These Restaurant Chains May Not Survive 2020

  • This article was published in MoneyWise on November 6, 2019.
  • According to MoneyWise, Perkins may not be a restaurant that is still around in 2020. This assessment was based on its recent bankruptcy and subsequent acquisition.

Perkins starts food fight with franchisee

  • This article was published on GoErie on July 7, 2019.
  • Perkins Restaurant & Bakery requested a federal judge order the owner of three Erie, Pennsylvania restaurants to refrain from using the Perkins name because his company has "failed to meet its contractual agreements, including the required payment of a weekly royalty fee to Perkins Marie Callender’s."

Restaurant inspections: 200+ insects force Cape Coral Perkins to close temporarily

  • This article was published in the News-Press on May 13, 2019.
  • A Cape Coral Perkins restaurant was ordered closed after receiving 13 inspection violations, including the observation of "approximately 40 to 50 small flying insects on ceiling tiles and seat cushions in dining areas and 200 more of the insects on ceiling tiles and walls throughout the kitchen and dry-storage areas."

Bankruptcy court approves sales of 16 Perkins sites, including Meadville location

  • This article was published in The Meadville Tribune on September 5, 2019.
  • A federal court approved the sale of 16 Perkins locations to three different owners after their previous owner, CLC filed for Chapter 11 bankruptcy in July.
  • The acquisitions totaled $720,000 and went to Phoenix Management Systems, LLC and two independent restaurant operators in Pennsylvania and Ohio.

Apalachin Perkins Restaurant Reopens After Power Problem

  • This article was published by WNBF News Radio 1290 on March 6, 2019.
  • An Apalachin, New York Perkins suffered an electrical problem and closed for nearly a day. According to the restaurant's owner, Beth Ann Smith, there have been "repeated problems with the transformers" that serve the restaurant and a nearby hotel.

Owner of Summerville Perkins restaurant named company's Franchisee of the Year

Ex-restaurant manager accused of taking $1,600

  • This article was published in the Altoona Mirror on June 14, 2019.
  • A former manager at a Hollidaysburg, Pennsylvania Perkins was charged with theft after failing to deposit a total of $1,652.92 from two nights of service in May 2019.
Part
02
of five
Part
02

Senior Vice President of Marketing Profile

Perkins LLC filed a bankruptcy in August 2019 and was acquired by Huddle House in October 2019 for an undisclosed amount. The position of SVP of marketing, prior to the bankruptcy filing, was handled by James Pritchard who passed away on September 15, 2019. Karen Craig took over as the senior director of marketing. The position, however, lies vacant under the new banner of Huddle House, Inc. and Perkins LLC, with the incumbent supposed to be reporting to Alison Glenn Delaney, who is the chief marketing officer of Huddle House, Inc. and Perkins LLC.

Key Findings

  • The VP of marketing position for Perkins Restaurant, currently operating under Huddle House, is currently vacant.
  • Perkins LLC (also known as Perkins & Marie Callender’s Holding LLC), was formed by the merger of Perkins Restaurants and Bakery & Marie Callender’s in 2006. They operated as a chain of restaurants that employed 5,379 individuals prior to bankruptcy.
  • The company filed for a Chapter 11 bankruptcy protection (August 2019), with plans to sell the majority of its assets due to low customer traffic and the increasing costs associated with food and labor.
  • James (Jamie) Huw Pritchard, who was the SVP of marketing for Perkins, passed away on September 15, 2019.
  • Karen A. Craig then took on dual roles as the senior director and vice president of marketing for Perkins, as evident from her business profile (last updated on September 15, 2019). During this period, Erin Van Veen served as the director of marketing for the firm.
  • The bankruptcy case was settled with the purchase of the company and all its assets by Huddle House on October 22, 2019.
  • The VP of marketing role for the new brand under Huddle House is currently vacant, as of November 1, 2019, as evident from the job posting on The CMO Club.
  • According to the posting on The CMO Club, the new VP of marketing is instructed to report to Alison Glenn Delaney, who serves as the chief marketing officer at Huddle House, Inc. and Perkins LLC and will assist in designing the department.
  • They will have four to six contacts to issue direct reports to, "with a dotted line to the director of digital marketing for both the brands."
  • Moreover, they will have oversight of two individuals recruited by the advertising firm and are the primary contacts with the franchisees. Therefore, they are a vital part in supplying the franchisees with the company's marketing initiatives.


Research Strategy:

After searching through credible sources, we discovered recent business events that the company has undergone. Initial research confirmed the death of James Pritchard, who was the VP of marketing, on September 15, 2019, at the age of 43. Though the company did not provide any related official news, other sources revealed internal role changes performed on the same date. Deep research further revealed that the company had not been performing well and had incurred massive debt that ultimately led to the filing of Chapter 11 bankruptcy. However, the bankruptcy was officially filed in August 2019, implying that James was aware of the case before his death.

To build upon this information, we first investigated the sequence of events involving the marketing role, discovering that Perkins used to operate from its owned stores as well as franchised outlets. Franchisees used to pay a marketing fee equal to 3% of their revenue, and 2.25% of this went towards the purchase of media while the remaining 0.75% was for the cost of forming marketing materials (e.g., print, TV, and radio advertising), along with agency fees. They also had to allocate about 1% of their revenue towards "local store marketing to support their community." During this time, James was positioned as the SVP of marketing.

Our research also indicated that Karen A. Craig's profile on various company databases was updated on September 15, 2019, which is the same date as James's death. However, this information was not revealed by the company in any official records. The cited reason behind this is the bankruptcy case filed in August 2019. Thus, Karen served in an interim role before the company came to any conclusion about its sale.

Focusing on the bankruptcy, we found out that Perkins LLC, along with its assets, was bought by Huddle House on October 22, 2019, thus altering the reporting for the company. This development was evident from the vacancy of the VP of marketing position posted on November 1, 2019, which mentions the "to be" reporting line for the incumbent. Therefore, the position currently lies vacant with no one directly undertaking the activities for the business.

Our final conclusion followed the sequence of events as noted in the findings section, and the newly formed company operating under Huddle House, Inc. and Perkins LLC is seeking a new vice president of marketing for both its businesses.
Part
03
of five
Part
03

Perkins Competitive Landscape-Part 2

Golden Krust Caribbean Bakery is a food chain that has 120 outlets in North America. Kolache Factory is a quick service bakery that has 58 outlets in the United States.

Golden Krust Caribbean Bakery

Company Overview

Competitive Advantage

Strengths

Perceived weaknesses

Revenue

Locations

  • The company has 120 outlets in North America, which includes two in Texas, one in North Carolina, 25 in Florida, 16 in Georgia, two in Maryland, two in Toronto, three in Massachusetts, one in Connecticut, and 68 in New York.

Kolache Factory

Company Overview

  • Kolache Factory is a quick service bakery, founded by John and Jerri Banks in 1982.
  • The company has 58 outlets in the US, and its headquarters are located in Houston, TX.
  • The company has a wide array of freshly prepared items, including over 20 varieties of kolaches filled with ingredients ranging from fruit to cheese and meat.

Competitive Advantage

  • The company is famous for its unique varieties of kolaches that has helped the brand grow as a franchise.
  • The bakery-cafe theme of the company is producing the highest average retail unit volumes of any concept outside of casual dining experience.
  • Kolache Factory provides baked goods that can be quickly arranged and served within two minutes, which gives them an advantage over their competitors.

Strengths

  • Kolache Factory offers customers a loyalty program, and this has helped the company increase the loyalty of customers on their brand and generate more sales.
  • Kolache Factory has been recognized as one of the top 5 drive-thrus in America by Food Network, one of the fastest-growing companies in Houston and one of the top 50 bakeries in the United States.
  • The company has developed innovative partnerships with major league sports franchises.

Perceived weakness

  • The company has not expanded internationally. Most of the outlets of Kolache Factory are in Texas, and other states only have one or two locations.

Revenue

Locations

  • The company has 58 outlets in the US, which includes one in California, one in New Mexico, one in South Carolina, one in Virginia, one in Missouri, two in Indiana, two in Kansas, two in Nebraska, and 47 in Texas.
Part
04
of five
Part
04

Perkins Competitive Landscape-Part 1

Le Macaron has been in business since 2009, was the first U.S. establishment in the macaron space, sells high-quality/authentic products, is fully dependent on product shipments from the bakery at its headquarters, and reported revenue of $4.7 million in a 2017 publication. Corner Bakery has been in business since 1991, is a leader in the catering sector, is a well-known brand among consumers, operates in a very competitive segment, earned $375.830 million in revenue (2016), and has 200 locations throughout the U.S.

Competitive Landscape: Le Macaron & Corner Bakery

1. Le Macaron

A. Company Overview

  • Le Macaron's origins date back to 2009 when the company was founded by Audrey Guillem-Saba and Rosalie Guillem.

B. Competitive Advantage

  • Le Macaron was "the first macaron franchise in the" U.S.
  • The company's founder, Rosalie Guillem, said that her company uses the French macaron recipe, which "is extremely difficult to replicate." She further stated the following: "All the macarons that I have seen in the U.S.A. are made with the Italian recipe."
  • Le Macaron has a niche business.
  • The company's staple product, macarons, are gluten free, only contain approximately 80 calories, and don't contain preservatives.
  • Le Macaron locations don't need many staff members because all baking is done offsite. The company states that offsite baking results in greater profits.
  • Le Macaron employs top-level "chefs [who] are from France" which is important considering that the company's staple product, macarons, are an iconic French dessert.

C. Strengths

  • Le Macaron maintains strong ties to the communities in which they operate, through out-of-store and in-store events, delivery, and catering.
  • The company operates mobile kiosks (through its franchisees), in addition to its cafes. The kiosk model has resulted in lower costs (due to the little space needed for a kiosk in places such as malls or airports), yet similar profits compared to its cafe locations.
  • Le Macaron stores provide "authentic French experiences."
  • The quality of the desserts that Le Macaron sells "make the brand a distinguishable one."

D. Perceived Weaknesses

  • All the baked goods sold at all the company's locations nationwide are baked offsite. As a result, the facts that each Le Macaron location doesn't have an on-site bakery and thus the desserts are all made offsite could be perceived by some consumers as a less-than-authentic bakery experience.
  • Since all the desserts are made offsite, each Le Macaron location (whether cafe or kiosk) fully depends on receiving on-time, proper shipments from the company's Sarasota headquarters location where all the baking is done.

E. Revenue

  • The company's revenue, as stated in its 2017 International Franchise Expo Press Kit, was $4.7 million.
  • In the aforementioned press kit, the company also reported that it achieved 259% growth.

F. Locations

  • Le Macaron has 61 locations across the U.S. (all listed via that link).
  • The following are the states in which the company has a presence: Florida (has the most locations), California (second-most locations), Texas (third-most locations), Nevada, Arizona, Missouri, Illinois, Wisconsin, Indiana, Alabama, Georgia, Michigan, South Carolina, Ohio, Pennsylvania, New York, and New Hampshire.
  • We also found an article published in January 2019, which discussed the company's plan to open over 20 locations in New York.

2. Corner Bakery

A. Company Overview

B. Competitive Advantage

  • Corner Bakery is a leader in the catering sector, as the company "is known as one of the top performing fast casual operations in the off-premise space."
  • Corner Bakery was an early entrant in the cafe/bakery concept.
  • Corner Bakery is a popular dining spot for women, who collectively accounted for approximately 66% of its customer base.
  • Corner Bakery is popular for business delivery orders, as those orders "account[ed] for 90 percent of [its] catering sales" back in 2014 (the most-recent data we could find about that).

C. Strengths

  • Corner Bakery restaurants provide a relaxed, comfortable environment that attracts a wide range of customers, which has been described as "the 'ultimate neighborhood gathering spot.'"
  • Corner Bakery has attained "strong brand equity [which it has] established over decades and" through its numerous locations.
  • The company has a strong delivery business, as "catering accounts for over 25 percent of its business."
  • Corner Bakery has a strong presence in the large-food-order-delivery space, compared to smaller orders.
  • Corner Bakery was well-positioned for the delivery service trend (such as Uber Eats) because those "services tend to be more popular in higher-income markets, which happens to be where most Corner Bakery restaurants are located."

D. Perceived Weaknesses

  • Corner Bakery operates in a very competitive segment, which makes it difficult to standout in a crowded field. Corner Bakery's CEO attested to that reality in May 2019.
  • Corner Bakery restaurants have traditionally been large, spanning about 4,000 square feet on average. That space is sometimes too large, considering that delivery orders account for more than one-fourth of the company's business. Some Corner Bakery franchisees are now looking at spaces half that size (about 2,000 square feet).

E. Revenue

  • The most-recent revenue data we could find was from 2016, which showed that Corner Bakery's annual revenue totaled $375.830 million.

F. Locations

  • Corner Bakery operates in the U.S.
  • There are approximately 200 Corner Bakery restaurants in the U.S. across 24 states.
  • This link is to the list of all Corner Bakery locations.

Research Strategy

We began our research by reviewing the "About" page on each company's website, in order to find information about each company's history, operations, and differentiators. Next, we looked for articles about each company with regard to the specific data points we were seeking, such as revenue and locations. Examples of sources that published the articles we reviewed included PR Newswire and Restaurant Business Online. The information we found about Corner Bakery's perceived weaknesses came from an article that featured an interview with the company's CEO, in which he discussed challenges facing the company. Since no direct weaknesses were expressly mentioned about Le Macron in any of the articles and websites we reviewed, we extrapolated the perceived weaknesses of Le Macron based on the information provided about the company. That information illustrated issues that have the potential to cause issues for the company, such as the fact that none of its locations feature an on-site bakery, yet it's a bakery business. Collectively, all those articles and the companies' websites provided us with the requested information about these companies.
Part
05
of five
Part
05

Perkins Company Overview

One of Perkins Restaurant and Bakery's key competitive advantages is its in-house bakery, which allows it to serve freshly baked products. The company has a presence across 32 states in the United States and four provinces in Canada. In August 2019, it filed for bankruptcy after which it was acquired by Huddle House in September.

Revenue & Financials

  • In 2018, Perkins Bakery & Restaurant's revenue was $603 million.
  • While sales had dipped by 3.7% in 2018, the company's same-store sales increased by 5.1% in the January to June 2019 period. The company filed for bankruptcy in August 2019 despite strong sales.
  • Perkins merged with Marie Callender in 2006. Currently, Marie Callender is present at 28 locations, while Perkins has over 300 restaurants. Perkins & Marie Callender’s combined debt was $115 million at the time of filing for bankruptcy.
  • Huddle House bought Perkins, but not Marie Callender, for $51.5 million in September 2019. The combined operations of Perkins and Huddle House are expected to generate revenues of $800 million.

Number of Employees

  • Perkins Restaurant and Bakery has 25,000+ employees.

Number of Locations

  • Perkins is located in the United States and Canada.
  • Perkins Bakery & Restaurant is present at 312 locations in the United States:
    • Arizona (1)
    • Arkansas (1)
    • Colorado (4)
    • Delaware (1)
    • Florida (33)
    • Georgia (1)
    • Idaho (4)
    • Illinois (4)
    • Indiana (5)
    • Iowa (23)
    • Kansas (5)
    • Maryland (1)
    • Michigan (1)
    • Minnesota (56)
    • Missouri (6)
    • Montana (6)
    • Nebraska (9)
    • New Jersey (10)
    • New York (7)
    • North Dakota (6)
    • Ohio (22)
    • Oklahoma (1)
    • Pennsylvania (38)
    • South Carolina (1)
    • South Dakota(13)
    • Tennessee (10)
    • Utah (1)
    • Virginia (2)
    • Washington (2)
    • West Virginia (2)
    • Wisconsin (31)
    • Wyoming (5)
  • There are 12 Perkins restaurants in Canada:
    • Alberta (2)
    • Manitoba (3)
    • Ontario (6)
    • Saskatchewan (1)

Perceived Strengths

  • Perkins is a national chain with a presence across the United States (32 states) and is one of the top breakfast restaurant chains in the United States.
  • Perkins has a strong brand heritage; it has been around since 1958.
  • The restaurant generates revenue across all day parts as it has an all-day menu--breakfast, snacks, lunch, and dinner--and caters to individuals of all ages.
  • Perkins has one of the most crave-worthy breakfast menus. A quarter of its customers (25.4%) find the breakfast crave-worthy.
  • It continually researches, develops, and adds new items and flavors to its menu, and having an in-house bakery enables it to serve freshly baked products.

Perceived Weaknesses

  • The company has filed for bankruptcy twice in the last 13 years. It has shut down 160 of its 500 restaurants (roughly) since 2005. The company is saddled with a large debt ($115 million combined debt of Perkins and Marie Callender).
  • While the company is present across the United States, it has not managed to create a consistent experience for its customers across the country.

Competitive Advantage

  • Perkins has in-house bakeries, which enables them to serve high-quality freshly baked products; appetizing aromas and mouth-watering displays entice customers. According to the company, this is one of their key competitive advantages.
  • With 312 restaurants spread across 32 states in the United States, Perkins has a strong national presence.
  • A 60+ year heritage and a reputation of being one of the top breakfast restaurants in the United States makes the company's brand equity strong. With a sharpened focus on serving kids through the KidsPerks program the company launched in 1996, it is strongly positioned as a family dining restaurant.
  • Perkins has the ability to constantly update and refresh its diverse menu with innovative items.
  • The restaurants are "updated and contemporary" and have a welcoming atmosphere.



Sources
Sources

From Part 02
Quotes
  • "Perkins & Marie Callender’s Holding LLC, operator of two family and casual dining chains, filed for bankruptcy protection on Monday and plans to sell most of its assets, after suffering from lower customer traffic and rising food and labor costs."
  • "The Chapter 11 filing is the second in eight years for the Memphis-based company, which has nearly 400 stores under the Perkins and Marie Callender’s brands in the United States, Canada and Mexico. Perkins was founded in 1958, and Marie Callender’s in 1948. They merged in 2006, and recently had about 5,379 employees."
Quotes
  • "Franchisees pay a 3% of revenue marketing fee. 2.25% of this money is spent on media buy and .75% is spent on the cost of developing marketing material such as radio, TV and print advertising as well as agency fees. Perkins also requires franchisees to spend 1% of revenue on local store marketing to support their community."
Quotes
  • "The Vice President of Marketing will report to Alison Glenn Delaney, Chief Marketing Officer of Huddle House, Inc. and Perkins LLC. The Vice President of Marketing will help design the department. Direct reports will be between four to six people, with a dotted line to the Director of Digital Marketing for both brands, plus oversight of two people that are employed by the advertising agency but act as DMA specialists; these people are the main contacts with the franchisees and perform critical roles in carrying the Marketing initiatives to the franchisees."
Quotes
  • "The owners of Huddle House, Inc. have completed its purchase of Perkins Restaurant & Bakery, the storied and iconic chain with approximately 325 locations, which has become a staple in communities throughout the United States and Canada. The transaction closed October 22, 2019. The terms of the purchase were not disclosed."
  • "The Huddle House Executive Leadership team will manage Perkins out of its Atlanta headquarters, running each of the concepts as separate brands, yet leveraging resources and proven strategies to build efficiencies. There are no plans to convert any existing units to Huddle House restaurants or vice versa."
From Part 04
From Part 05
Quotes
  • "More than a decade ago, Perkins bought Marie Callender’s in a combination of two family-dining chains."
  • "After 13 years, a massive recession and two bankruptcy filings, that combination is being broken apart. This time, Perkins will be part of Huddle House, which won an auction to buy the chain for $51.5 million."
  • "The bakery that supplies the brands with pies and muffins and other items is being sold to Fairfield Gourmet Food Corp., a New Jersey bakery company, for $18.7 million."
  • "Marie Callender’s, however, is being sold for just $1.75 million to a company known simply as Marie Callender’s Inc."
  • "Perkins and Marie Callender’s merged in 2006. The two brands boasted long histories. Perkins, with close to 500 locations, had been around since 1958. Marie Callender’s, which had 138 company and franchised units, was among the oldest full-service dining chains in the U.S., having opened in 1948."
  • "Both brands had enjoyed same-store sales growth in the years leading up to the merger. But the company also had a lot of debt, and the bottom fell out of the economy just 18 months later. Sales plunged, and by 2011 the company had filed for bankruptcy, closing numerous locations in both brands."
  • "As is frequently the case in many bankruptcy cases, Perkins & Marie Callender’s made some compromises. And in 2011 it made a big one: It sold the Marie Callender’s trademark to Conagra Foods for $57.5 million."
  • "In the years since, Marie Callender’s has steadily shrunk in size, and the latest bankruptcy filing only shrunk it further: The chain is down to 28 locations, half the size it was in 2017, based on data from Restaurant Business sister company Technomic."
  • "By comparison, Memphis-based Perkins is in far better shape, though it is about 50 locations smaller than it was five years ago and 150 locations smaller than it was back in 2006. Its same-store sales, like Marie Callender’s, have stabilized this year."
Quotes
  • "In 2005, Perkins was operating around 500 restaurants. That number slipped by almost 160 stores, including its ten closures this year."