Hanging On By The Skin Of Their Teeth: Remnants Of Once-Large Restaurant Chains

Even before the coronavirus pandemic, the restaurant business was a tough one, with an estimated 60% of new locations closing within a year, and 80% failing within five years.

Even some of the most successful chains can enter a period of decline and fall for any number of reasons, such as long-term mismanagement, failing to adapt to changing public tastes or cutthroat competition from new concepts. Some mighty chains die completely. When was the last time you ate at a Chi-Chi's with about 200 locations once upon a time, Red Barn at about 400 restaurants or a Burger Chef with 1,050 locations?

Some brands, however, survive as much smaller chains or single locations, or they migrate completely out of the United States and establish themselves in another part of the world.

Though diminished, these brands are survivors, up to and including the pandemic, whose impact on restaurants seems to be waning. That doesn't guarantee continued survival, but it does bode well for their near-term prospects.

In March, sales at major restaurant chains were up 32% compared to the declines of a year ago, although still down 6% compared to March 2019, according to the Census Bureau. 

“There's now optimism on the part of the American consumer, which helps to unleash pent-up demand for dining out,” said David Portalatin, NPD food industry adviser. “Although transactions are still down compared to pre-pandemic times, there's improvement and a signal that we’re headed in the right direction.”

SPAGHETTI WAREHOUSE

Besides serving mid-market Italian dishes, Spaghetti Warehouse, founded in Dallas in 1972 and growing to a peak of about 50 locations by the mid-1980s, was a pioneer in adaptive reuse among restaurant chains. Its original location in Dallas was in a renovated warehouse, a pattern the chain would often follow during its expansion to other markets.

The chain was also known for the trolley cars it featured in its main dining rooms, again following the pattern of the original location, which featured an East Dallas trolley car.

In more recent decades, competition swelled in the Italian restaurant sector, and the novelty of the setting wasn't so novel. So, now the chain has six locations, not including the original that closed in 2019, with the majority in Ohio. It shouldn't be confused with the similar Old Spaghetti Factory chain, which has fared better with 40 locations in operation.

The latest test for legacy brands such as Spaghetti Warehouse, like the rest of the industry, has been surviving the pandemic. Jeremy McLean, operating partner for Spaghetti Warehouse Columbus, Ohio, told Bisnow that the restaurant stayed committed to offering its full menu, while others reduced their menus. 

"Adapting to increased usage of third-party delivery apps, combined with family meal offerings, carried us through the difficult times of the past year,” he said.

Now the restaurant is looking ahead, with such touches as an updated look to the restaurant, and an updated menu in the works, McLean said.

"We will keep all of the favorite character of the restaurant while updating and enhancing the interior and exterior," he said, adding that celebrations in such an atmosphere are the heart and soul of Spaghetti Warehouse.

KEWPEE HAMBURGERS

At one time, Kewpee Hamburgers, founded in the 1920s, was the largest hamburger chain in the nation, with about 400 places using the name in some form just before World War II. That was also before the time Ray Kroc and McDonald's popularized the standardization of fast food, so not all of the locations did things the same way.

The postwar era, with its invention of fast food as we know it, wasn't kind to the Kewpee brand. Quarrels over the usage of the name didn't help.

By the 21st century, only five locations remained under three different owners in Ohio, Michigan and Wisconsin. The Wisconsin location is true to its origin as a showcase of kewpie-doll memorabilia that celebrates the 1900s toy, which inspired the restaurant's name.

WOOLWORTH'S DINER

When civil rights activists pushed to desegregate restaurants in the early 1960s, they picked a brand everyone would know: Woolworth's lunch counters. Five-and-dime giant Woolworth's began opening lunch counters to serve inexpensive meals at their stores in 1923, and they were a massive hit.

By the 1970s, both Woolworth's and its lunch counters were on the skids. Now besides the re-creation of the lunch counters in museums as tributes to the struggle for civil rights, only one functioning Woolworth's lunch counter still exists, the Woolworth Diner luncheonette at the Five & Dime Antique Mall in Bakersfield, California, where it has managed to stay open despite the pandemic. The last Woolworth's itself closed in the 1990s.

“We want the whole time that they’re here to be an experience," Jeremy Trammell, co-owner of Woolworth’s Diner, told KGET.  "Not just a burger or not just a soda pop, but an experience of maybe the way things use to be."

VICTORIA STATION

Another darling restaurant chain of the 1970s, Victoria Station had nearly 100 locations by 1978, and it too had a train theme, with restaurants sporting boxcars or cabooses. The steakhouse brand also paid country star Johnny Cash to write and record an album, Destination Victoria Station, that was only for sale at the restaurants.

By the mid-'80s, the party was over, and the company restructured in bankruptcy to escape heavy debts, shedding many locations. That wasn't enough to save its U.S. locations, however, which were all gone by 1992.

The brand isn't completely dead, however. There are five locations currently operating in Malaysia, and about a dozen in Japan, mostly in the northern prefecture of Hokkaido.

KENNY ROGERS ROASTERS

Country musician Kenny Rogers and a former KFC exec teamed up to found Kenny Rogers Roasters in 1991. The chicken chain had more than 425 locations by 1996. The brand even figured in an episode of Seinfeld, when a fictional location opens across from the main characters' apartment building.

Beginning in the late 1990s, however, the brand began to contract under the weight of intense competition. The last U.S. location closed in 2011, but the brand lives on in East Asia, with more than 180 locations in Malaysia, the Philippines, Dubai and other countries.