The latest bankruptcy of buffet giant Buffets LLC has been a boon for Golden Corral.
The Raleigh, N.C.-based buffet chain is looking at many of the sites left empty by Buffets, the operator of Ryan’s, Old Country Buffet and HomeTown Buffet.
Golden Corral has deals to move into two locations in the Minneapolis metro area, a new market for the chain. And it is looking at sites all over the country.
“Where it makes sense for us, we are taking a look at that,” said Bob McDevitt, Golden Corral senior vice president of franchise development. “We’re looking at sites all over. I’m not limiting myself to any particular area.”
Buffets LLC, the company formerly known as Ovation Brands, filed for federal bankruptcy protection in March — its third such filing in eight years — and shut down about 170 restaurants across the country.
Many of the locations were recently remodeled, and the company emptied at least some of them of equipment before closing them.
The mass closures have put a wealth of sites on the market. And these sites fit the criteria for a fellow buffet chain like Golden Corral.
McDevitt said that Golden Corral wouldn’t simply acquire sites just for the sake of it. “It has to meet our criteria,” he said.
That means the site can’t be too close to another Golden Corral. And landlords have to be “cooperative from a cost perspective.” Competition for sites among restaurant chains is driving up the prices of some locations, McDevitt said.
“There’s not all that many that make sense,” McDevitt said, estimating that perhaps 30 to 40 of the sites might fit Golden Corral’s criteria. He suggested the company could target sites in San Diego and in Connecticut, among others, where the chain doesn’t have existing locations.
For Golden Corral, the closures represent a unique opportunity.
Rapid growth by fast-casual chains and other concepts has led to high demand for leased sites. And McDevitt said that many of the locations abandoned by the buffet chains are under demand.
Yet Golden Corral, as a buffet concept, could fit nicely into many of these locations. So they can more easily move into the location.
“It gives us a leg up on other concepts competing for these sites,” McDevitt said. “We would make changes, of course. But the sizes of the sites, the locations, they’ve already met another brand’s standards for a good buffet site. The way the building is designed and laid out, it gives us the opportunity to get ahead of the competition.”
Golden Corral is the country’s largest buffet chain, according to Nation’s Restaurant News Top 100 data, with $1.7 billion in systemwide sales. However, that figure has fallen from two years ago. So, too, has its unit count, which has declined from 501 locations to 484 last year.
That means the available sites could have a sizable impact on the chain’s size. “We’re happy to have the opportunity to take a look and see what’s there,” McDevitt said. “We want to get as many as we can.”