A spate of closures tied to legacy casual-dining brands in Southern California continues with the shuttering of a Claim Jumper Restaurant & Saloon and a TGI Fridays.
A Claim Jumper location in Santa Ana, Calif., among the first five to be built by the 41-year-old chain, closed on Monday. Also closing later this month is a TGI Fridays unit in Brea, Calif., the second to close in the area over the past year.
Christopher Vary, a spokesman for Dallas-based TGI Fridays, said the “lease expired and the location chose not to renew.” The Brea, Calif., restaurant, run by franchisee The Briad Restaurant Group, is expected to close soon, possibly by Sunday.
Claim Jumper, owned by Houston-based Landry’s Inc., said several factors, including declining revenue, contributed to the closure of the Santa Ana, Calif., restaurant, a fixture in the area since the mid-1980s.
"Like other restaurant companies, we consistently review sites where our concept can be most successful,” Claim Jumper COO Terry Turney said in a statement to Nation’s Restaurant News. “Due to a shift in the market which impacted revenues, coupled with increased expenses primarily as a result of California’s rising minimum wage, we decided to close the present location.”
The company, which was founded in Los Alamitos, Calif., in 1977, is working to relocate employees, he said. TGI Fridays is also working to place employees elsewhere, where possible, Vary said.
Both brands join a fray of aging casual-dining chains that have closed over the past few years in the hyper-competitive market of Southern California, which is blanketed with trendy fast-casual chains.
Other brands diminishing their presence in the region include Mimi’s Café, IHOP, El Torito, Chevys, Acapulco, Lone Star Steakhouse, Marie Callender’s and Tony Roma’s.
Restaurant consultant Jeffrey McNeal said higher wages and premium real estate costs in a post-recession era are undeniable challenges for any operator in California. But that’s only part of the story.
Casual-dining operators that adapt to changing consumer tastes are seeing success, including Denny’s and Olive Garden, said McNeal, president of Arcadia, Calif.-based Fessel International Hospitality Consultants.
Those concepts have modernized through a combination of expanding digital relationships, remodels and menu changes. For example, Denny’s has overhauled 85 percent of its menu.
Beyond minor cosmetic changes and a logo revamp, Claim Jumper has made few changes since Landry’s purchased the distressed chain eight years ago for $76.6 million. At the time, it had 45 restaurants. It now operates 39 units in Arizona, California, Illinois, Louisiana, Nevada, Oregon, Tennessee and Washington.
Claim Jumper is known for its big portions of comfort food, such as country-fried steak, chicken pot pie and six-layer Chocolate Motherlode Cake. But today’s diners prefer smaller portions, customization and shared plates, McNeal said.
“At the end of the day, Claim Jumper hasn’t evolved,” he said. “There’s nothing new there that will draw you.”
Still, some operators are closing locations because they have no choice, as landlords and mall developers are eager to replace them with fresh, chef-driven concepts.
Marie Callender’s, a legacy casual-dining brand in Southern California, was forced to close a premium location in Irvine because the landlord declined to renew its lease more than two years ago, according to the Orange County Register. The property owner replaced it with chic Sichuan eatery Meizhou Dongpo of China.
Cypress, Calif.-based Real Mex Restaurants, the nation’s largest operator of full-service Mexican restaurants, has closed more than two dozen restaurants in California and Nevada over the last two years.
The closures impacted most of its older brands: Chevys, Acapulco, El Torito and El Torito Grill. However, in one instance, a well performing indie concept, Who Song and Larry’s, closed because it was unable to reach an agreement with the landlord in a retail center in Orange, Calif. The center replaced the Mexican gastropub with Old Crow Smokehouse, a modern barbecue restaurant from Chicago.
Real Mex operates 89 company-owned restaurants and franchises. That's down from roughly 125 in 2012. Since 2016, the company said it has opened one new restaurant and remodeled four restaurants.
McNeal said landlords, especially those losing large retail anchors, are looking for food and entertainment concepts that will draw crowds. In some cases, property owners are converting large, single, casual-dining pads into three or four smaller tenant spaces. He recently saw a closed Macaroni Grill in Ohio redesigned to fit a few smaller fast-casual concepts. Its pure economics, McNeal said.
“You gain three more current concepts that actually pay more rent,” he said. “That is what the landlord is doing.”
Landry’s, owned by Houston billionaire Tilman Fertitta, operates more than 600 properties across the country. Some of its key restaurant brands include Morton's The Steakhouse, McCormick & Schmick's, Mastro's Restaurants, Rainforest Café, Landry's Seafood, Chart House and Bubba Gump Shrimp Co.
Craig Nickoloff, who founded Claim Jumper in 1977, remained a shareholder of the chain after selling a majority stake in the company in 2005 to Los Angeles-based private-equity firm Leonard Green & Partners for an estimated $220 million.
In subsequent years, Nickoloff made unsuccessful attempts to buy back Claim Jumper prior to the Landry’s purchase. He is the co-founder of West Coast Prime Meats, a Brea, Calif.-based purveyor of premium meats.
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