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Blog
Max & Erma's, Part 2
January 23, 2008
My recent post about Max & Erma's may have left some people wondering what exactly put Max & Erma's in financial crisis. Briefly, sales and profits have plunged.
According to the company's third quarter (ended August 5) filing, year-to-date revenues fell about $5.2 million or 3.7% from 2006 to 2007. Same-store sales slid 3.4 percent and guests counts plunged 8.8 percent in the same 9-month period. The company reported losing nearly $1 million in Q3.
On the bright side, the company collected $302,000 more in franchise royalty fees than in 2006, a gain of 23 percent, though scarcely enough to offset its lender or share price problems.
The filing also includes a strategy to boost unit volumes by 15 percent over the next five years In management's own words, they plan to:
♦ exit lower sales volume restaurants generally at the end of leases if the outlook for sales improvement is low.
♦ remodel approximately up to five locations per year to our new prototype look.
♦ open higher sales volume locations at a controlled pace.
♦ generate same-store sales increases from improved operations and effective marketing.
We've heard this all before, of course, but ask yourselves, ladies and gentlemen, what exactly would you do?
I'm Really Not This Vain
We have new blog software, in case you haven't noticed. I'm told the designers of this page envisioned several bloggers sharing the digital space; hence, they created a spot on each post for a picture of said blogger. Brilliant idea, no doubt.
Thing is, it didn't worked out that way at CL. As a result, you see my face on each and every post. I'm told the designers are working to fix the issue; in the meantime, my apologies.
Posted by David Farkas on January 23, 2008 | Comments (6)
In response to: Max & Erma's, Part 2
Markp commented:
Max & Erma's has been known in our market as having superior food and service compared to the other casual chain restaurants. I hope they do not sacrifice quality in their comeback strategy, as that will only drive customers away.
In response to: Max & Erma's, Part 2
JohnQ commented:
M&E is trapped in that Bar & Grill sea of sameness that is also hurting Friday's, Applebee's, and Chili's. None of these brands will see 15% growth over the next 3 years and M&E's is probably the least likely due to its relative brand strength or lack thereof. They need a solid differentiation strategy to survive. I'm faced with a similar challenge at my brand.
In response to: Max & Erma's, Part 2
David Farkas commented:
Writes JohnQ: "I'm faced with a similar challenge at my brand." There's the rub. Casual-dining restaurants are already so many things to so many people -- varied menus, big bars, dolled up decors -- the bases already seem covered. One solution: introduce a fast-casual version of your concept. Austin Grill, in Febraury, is doing just that in February, with Austin Grill's Custom Burrito. Trouble is, it's costlier than adding a line of pastas or changing signage.
In response to: Max & Erma's, Part 2
John commented:
Go back to the basics. It used to be a fun place to eat and have a drink, then they expanded and it lost it neighborhood (Third Street) taste.
In response to: Max & Erma's, Part 2
Spicer commented:
How are Max & Erma's Wings?
In response to: Max & Erma's, Part 2
Dissapointed commented:
Max And Ermas is doomed. I work there and know all their great mgrs are bailing out now also