As the COVID-19 pandemic shows no signs of slowing down in the U.S. several breakfast restaurants that have become household names risk going out of business.
IHOP and Denny’s made the list of at-risk casual restaurant chains that could default on their debt in a new report by S&P Global Market Intelligence, according to USA Today.
IHOP’s owner, Dine Brands Global, has an 11.3% chance of defaulting, the report said. IHOP itself saw a 37.6% decline in sales in July. S&P projects Denny’s has an 11.9% chance of defaulting with sales down 41% for the week that ended July 22.
Already, both chains have had to close locations in 2020. According to Today, Denny’s closed 15 locations franchised by Feast American Diners in May. Today also reported that CFRA Holdings, an IHOP franchisee, closed all 49 of its restaurants in Virginia, North Carolina, South Carolina, and Tennessee, and filed for bankruptcy in May.
Despite the drop in sales and franchise closures, the CEOs of both companies remain optimistic.
USA Today reported that CEO John Miller said in a statement on July 28 that he believes that chain is “well-positioned” to “navigate further impacts of the pandemic while preparing for eventual and future growth.”
Dine Brands CEO Steve Joyce echoed that optimism in his own statement.
“We’ve demonstrated the ability to manage our business during a challenging second quarter, and our restaurants proved their tremendous resiliency in meeting the convenience and safety needs of our guests,” Joyce said. “We remain optimistic about the overall marked improvement in industry sales and traffic data since April, and are confident in our long-term strategy and ability to quickly adapt to the ever-changing industry landscape.”
It’s not just your future brunch plans and favorite breakfast restaurants at risk, however. Outback Steakhouse, BJ’s, The Cheesecake Factory, Dave & Buster’s, and Applebee’s are all at-risk of defaulting on their debt.
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