Acquiring distressed assets can be a long and complex process. It is important to be realistic in expectations for immediate profits, and to plan the details of the work necessary inside the organization to turn it around.
From this report, it appears Meridian Restaurants Unlimited only planned the acquisition step.
We all agree that labor costs have risen and have serious consequences on restaurant profits. But unless all 115 of the Meridian Burger King stores are in areas with particularly high wages for non-tipped employees, and were among the few to collapse under this pressure, this is not a unique challenge – they have just failed to meet it. Many other QSR restaurants found ways to thrive during and following the pandemic.
Labor productivity, waste reduction, shrinkage, user experience and customer satisfaction are all in the hands of senior and individual store management. In a distributed retail business, a one-sized solution won’t likely fit all stores, so local store managers should be involved to ensure that issues particular to their store are not overlooked.
The lesson post bankruptcy: Meridian or the acquiring firm must redirect effort to those factors it has control over. No outside effort will replace sound management and a plan from which adjustments can be made in a controlled manner, measured and continuously improved.