Despite booming popularity in the 1990s, the road for Logan's Roadhouse has been rocky ever since,
bouncing repeatedly from one owner to the next. What happened? Keep watching to find out.
All told, Logan's Roadhouse got off to a good start. The first restaurant opened in Lexington,
Kentucky, in 1991. The founder was David Wachtel, previous CEO of restaurant chain
Shoney's. With that kind of experience, you'd think that Wachtel's leadership
would set Logan's Roadhouse up for success, and he did — for a while. Wachtel and team
grew the chain at a slow pace and were known for rigorous standards for each and every location.
"Logan's Roadhouse, where the fire lives."
Sales climbed quickly and, by 1995, Logan's Roadhouse was in an enviable financial position.
This could be partially credited to the chain's low management turnover;
rather than requiring managers to work 60-hour weeks, as was common at other chains,
Logan's only required its management to work 45- to 50-hour weeks.
One of Logan's Roadhouse's most famous menu items? The famous yeast rolls.
These rolls sell at a rate of 98 million rolls per year, according to the brand.
They first came to Logan's restaurants, courtesy of a team member named Brenda,
in the summer of 1991, not long after the first location in Lexington, Kentucky, opened.
You can find loads of copycat recipes online for Logan' s yeasty rolls, but replicating the
unique taste and flavor isn't exactly easy. As Eat This, Not That! can attest, home bakers can
try creating replicate rolls with milk powder, dry yeast, honey, and butter, but the result is
never quite the same. Still, each one of these fluffy buns comes in at a whopping 200 calories,
so they're not quite as innocent and heavenly as they might taste, especially once Logan's
started offering them as a bun replacement for the brand's burgers and other sandwiches.
"Because this is Logan's, where block party meets backyard barbecue."
But Logan's isn't only famous for its dinner rolls. In 1993, the restaurant chain debuted
one of its other top-selling items: its famous Roadhouse Tea, which it sells at a rate of 2
million drinks per year, according to the brand. If that seems a little low, it's worth noting that
this is not your average sweet or unsweetened tea. Instead, Roadhouse Tea is a take on a Long Island
iced tea and it certainly packs a punch. According to Reddit, a Roadhouse Tea is one part rum,
one part gin, one part triple sec, and one part pure grain alcohol, all topped off with
a little sweet and sour and a splash of Coke. Within a decade of its founding, Logan's Roadhouse
would be considered a success. According to Funding Universe, the average Logan's location was
bringing in about $3.5 million annually, in 1997. Logan's Roadhouse had also received high praise
from industry publications, being called "one of the hottest concepts" in the restaurant industry,
as well as one of the top small businesses in the United States by both Forbes and Business Week. In
1995, Logan's went public and, by the end of 1996, Logan's stock price had risen by more than 100%,
putting the brand at the top of the pack for stock appreciation among casual restaurants.
By the end of 1998, Logan's Roadhouse was operating more than 40 locations across 12 states.
Annual sales were around $100 million, a 50% increase from 1997. However, rather than keep
that success internal, the brand decided to sell. Having reached admirable heights of success in
less than a decade, Logan's Roadhouse decided to sell out, accepting an acquisition offer from CBRL
Group, the parent company of Cracker Barrel Old Country Store. At the time, Cracker Barrel was
much, much bigger than Logan's, with nearly 400 units around the country. However, CBRL
Group allowed Logan's to continue functioning as a separate entity, after the $179 million-dollar
purchase. At the time, CBRL Group was also growing its Carmine Giardini's Gourmet Market brand, but
it still focused on growing Logan's further, with nearly 25 new locations planned for 1999 and 2000.
Still, this growth wasn't enough to keep Logan's on its successful
trajectory that had started way back in 1991 with David Wachtel.
CBRL Group sold Carmine Giardini's in 2001, and went on to close some of its underperforming
restaurants — which included both Logan's Roadhouse and Cracker Barrel locations.
Not long after CBRL Group sold off Carmine Giardini's Gourmet Market,
it also sold off Logan's Roadhouse. In a 2006 press release, CBRL Group announced
that it would be selling Logan's Roadhouse to a private equity investment firm, Bruckmann,
Rosser, Sherrill & Co. Inc. The transaction amounted to approximately $486 million,
though CBRL Group only took home $385 million. Upon the sale, CBRL's chairman,
president, and CEO called the transaction a "major strategic milestone," and that it planned to use
roughly $350 million of the money made from the sale to buy up $250 million of its own stock.
Still, all things considered, Logan's Roadhouse wasn't doing terribly. In 2003,
the brand opened its 100th location, and in 2006, it launched its loyalty club, the Nut-E Club.
Logan's Roadhouse has experienced a long line of owners. While Bruckmann, Rosser,
Sherrill & Co. Inc. boasts a portfolio that includes a lot of casual restaurant chains,
such as California Pizza Kitchen and Golden Corral, it eventually passed off the Logan's
brand. This was only after about three years of ownership and following a $200
million initial public offering intended to pay down debt and afford some more expansion.
The new owners? Kelso, another private equity firm. Kelso, however, at the time,
did not have the same track record with restaurants that BRS boasted,
focusing primarily on retail and consumer investments. Its only experience managing
a restaurant chain was when it owned a stake in IHOP in the 1980s. While, over the next few years,
Logan's managed to grow to a chain of about 250 restaurants, with locations in 50 states,
and nearly 20,000 employees, Logan's Roadhouse still hit financial troubles within six years.
The money problems started in 2016, with Kelso at the helm. Over the first half of 2016,
sales declined, with traffic falling by more than 8% and sales falling by 4%.
In August, Logan's Roadhouse filed for bankruptcy and closed nearly 20
"underperforming" restaurants. According to a statement,
"[The closures were] part of the overall efforts to improve the company's financial performance
[and a] plan [was] in place to assist employees in closing restaurants, reassigning employees to
other Logan's restaurants, and providing them with [...] assistance with applying for jobs."
The bankruptcy filings resulted in $25 million in financing for a restructuring plan,
which included the stepping down of the brand's CEO at the time. However,
the $25 million in financing seemed paltry in comparison to the chain's $416 million in debts,
owed to as many as 25,000 creditors. The largest debt was to National Retail Properties,
to whom Logan's Roadhouse owed more than half a million dollars.
As you could possibly expect by this point, Kelso didn't hold on to Logan's Roadhouse for very long,
either, especially once the finances went south. Two years after filing for bankruptcy,
Kelso sold Logan's Roadhouse, in 2018, to a company with a little more experience in the
food and dining space: CraftWorks Restaurants & Breweries. At the time of the sale, the Logan's
brand had been reduced from 250 restaurants in 50 states to 204 restaurants in 22 states.
With a brand-new CEO and another near-200 restaurants already under its belt,
CraftWorks was seemingly well-equipped to take over Logan's, though it was not
disclosed exactly how much CraftWorks paid Kelso for the brand. Unfortunately,
things would not remain so optimistic.
While CraftWorks was optimistic about its future with Logan's Roadhouse,
things didn't turn out as planned, especially when the Covid-19 pandemic hit. In early March of 2020,
the CraftWorks Holdings CEO had said that the fiscal quarter was, quote,
"off to a solid start," but then, by late March, things had turned sour.
Later that month, CraftWorks filed for bankruptcy after shutting down numerous
restaurant locations across its portfolio, with the intention of continuing to operate
all of its other locations. However, shortly after pandemic-related shut-downs began, in April 2020,
CraftWorks closed others and laid off some 18,000 employees, cutting expenses to the "bare
minimum" in an effort to maintain "as much value as possible" for post-pandemic times.
In fact, all corporate-owned locations were closed and CraftWorks only kept on
a corporate staff of 25 people, to keep the lights on for the foreseeable future.
"How'd we manage to pull the short straw?" "It's not a short straw. It's a hot potato."
CraftWorks' response to its financial and business woes was to simply sell Logan's Roadhouse.
Later in 2020, Craftworks sold its properties to Fortress Investment Group and SPB Hospitality for
$93 million. Almost immediately, SPB Hospitality began reopening locations and, as of mid-2020,
103 company-owned and 25 franchised Logan's Roadhouses were open, though a greater switch was
made to off-premises dining, including delivery and carry out. Employees were also rehired.
SPB Hospitality had previously also acquired Krystal, following the chain's recent bankruptcy,
and the company's CEO Marc Buehler has remained positive regarding Logan's Roadhouse's future,
saying in an interview:
"We've got a really dedicated group of people that are focused specifically
on their concepts. They're excited about what the
challenges are in front of them and where we can go with these brands."
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