How One Failed Brand Brought Their Business Back From the Dead

Usually, Chapter 7 bankruptcy signals the end of a company. Assets are sold off, creditors get a few pennies, finito.

But one 37-year-old restaurant chain that drifted into irrelevance and went bankrupt recently managed to resuscitate itself and return from the grave to successful operation.

Dallas-based Bennigan's began with a solid-gold pedigree, created by industry savant Norman Brinker, who birthed Chili's and Steak and Ale, among others. Brinker pioneered the casual family restaurant concept, that now-familiar niche between fine dining and fast food which was far less known in the 1970s.

Over the years, though, Bennigan's drifted into irrelevance as the casual-dining niche became crowded. The company was sold twice over, and along the way focus went off the fundamentals of successful restaurant operation. The myriad details that have to be consistently and perfectly executed at a restaurant began to falter.

In 2008, all 150 corporate stores were closed as the company filed for bankruptcy. Some 137 franchised restaurants weren't directly affected, but suffered from the lack of a corporate parent. Many of those units also closed in the following years.

How did Bennigan's go from flatlined and being sold off in pieces to a resurgent American dining brand? In his brief book Bennigan's Return to Relevance... Bleeding Green 25/8, CEO Paul Mangiamele offers these insights into how he rallied the troops starting in 2011 -- from franchise owners and front-line employees to suppliers and diners -- and pulled the chain from the grave:

• Tap the fans. In Bennigan's case, both patrons and franchise owners retained strong positive feelings about the brand and remembered its heyday. Without that, Bennigan's could never have been resuscitated. Some enthusiastic franchisees continued on alone, and diners with fond memories of Bennigan's signature dishes returned when the turnaround began.
• Get into analysis. A complete and highly detailed review revealed where execution was slipping. Questions went down to the level of whether servers stirred soup before they served it. Returning to getting every little thing consistent across the chain helped ensure every diner had a positive experience at every restaurant, every time. You need "a complete breakdown to have a defining breakthrough," Mangiamele writes.
• Inspire the exceptional. As the book title suggests, Bennigan's re-emergence depended on extraordinary efforts being made by everyone from the top down to busboys. Staff are encouraged to go the extra mile or ABCD -- Above and Beyond the Call of Duty. For instance, when one soldier left a beer and a written tribute to his comrade, the bartender photographed the tribute and posted it on her Facebook page. The wildly positive reaction led Bennigan's to establish a "Wall of Heroes" where all patrons can leave a tribute to a service member.
• Make it a party. Bennigan's extended its core event, St. Patrick's Day, into a year-round event with monthly mini-celebrations to keep the fun going. You can also get green beer here all year round. Most stores now also have Brand Ambassadors who go out into the community with free samples and promotional offers to recruit corporate events and book catering gigs.
• Try new things. Catering is a major new initiative for Bennigan's that offers far higher margins than sit-down dining. The catering menu was carefully designed to carry only cold items that could be perfectly executed -- no lukewarm French fries allowed.
• Be simple and clear.  Bennigan's positioning is American food served with Irish hospitality, but the theme had grown muddled over the years. The menu was realigned, favorite items brought back, and others trimmed off. A 20-page menu was shrunk to a 2-sided large page to help diners avoid being overwhelmed -- and to eliminate unprofitable items.
• Bring back the discipline. Mangiamele, who trained under legendary boxing coach Cus D'Amato, restored a high-service mentality at Bennigan's, in an industry where as he notes, we no longer expect great service when we eat out. Bennigan's instituted a strong training and retention program to try to stand out in the almost-forgotten art of making diners feel special.
• Support franchisees. In an innovative new program, Bennigan's is eliminating uncertainty for new franchisees by preselecting ideal franchise locations and then posting signs there that the chain is coming soon. New franchisees don't have to worry about making real estate decisions, and financing is also lined up waiting for them.
• Remember who helped. I was surprised at the end of his book to see Mangiamele list and thank every domestic and international franchisor, headquarters staffer, and supplier by name. I've never seen that at the end of a business book -- and I think it speaks to Mangiamele's emphasis on making every stakeholder understand they're valued.

Today, Bennigan's has 71 restaurants and is growing globally -- a unit opened this week in Cyprus. Six new domestic restaurants are preparing to open as well, mostly in Texas and Florida.

Who is rising and who is still closing stores? Click here to see the restaurant brands that still struggle.