The Company built a successful strategy around purchasing troubled restaurants in prime locations with below-market, long-term leaseholds. By converting part of the space to a new restaurant concept and leasing the remaining area to third party subtenants, the Company was able to subsidize its rent expense. Because the Company was not wedded to any single restaurant concept and management had the ability to operate a variety of different restaurant types, the Company was able to convert other people’s failures into successful new restaurants. This sixty-year-old strategy, which focused on location and not concept, continues today. Many of the Longchamp’s and Schrafft’s locations, for example, which the Company acquired in 1969 and 1978, respectively, have changed names and fare during the past 20 to 30 years. However, the original locations continue to be controlled by the Company. What was considered prime real estate in 1969 and 1978 is even more prime today.
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The Company built a successful strategy around purchasing troubled restaurants in prime locations with below-market, long-term leaseholds. By converting part of the space to a new restaurant concept and leasing the remaining area to third party subtenants, the Company was able to subsidize its rent expense. Because the Company was not wedded to any single restaurant concept and management had the ability to operate a variety of different restaurant types, the Company was able to convert other people’s failures into successful new restaurants. This sixty-year-old strategy, which focused on location and not concept, continues today. Many of the Longchamp’s and Schrafft’s locations, for example, which the Company acquired in 1969 and 1978, respectively, have changed names and fare during the past 20 to 30 years. However, the original locations continue to be controlled by the Company. What was considered prime real estate in 1969 and 1978 is even more prime today.
Filed under: Unknown by SCSU
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