Do you ever find yourself watching the game show “Wheel of Fortune” and feeling bad for a contestant when they spin the wheel and land on bankrupt? You hear the sound effects and along with the audience watching, you let out a big “awwwww” and then hope the player bounces back. If this image is familiar to you, then imagine the contestant behind the wheel as S&A Restaurant Corp., the owner of Bennigan’s. Now your feelings might have changed a bit. The corporation filed for Chapter 7 bankruptcy a week ago and in doing so, left all of their franchisees in the dust.

It is a bit different when corporations go bankrupt. Unlike the “Wheel of Fortune” contestant, S&A has no desire to get back into the game. But then again, the company has much more to lose than the contestant. Therefore, Bennigan’s franchisees are left to fend for themselves. Most of the franchisees remain and they face several challenges. One of them is being able to retain customers despite the image their franchisor has received from the media. A second hurdle lies in the possibility of facing an increase in costs from suppliers. Suppliers may raise their prices because they have lost business due to Bennigan’s closing their corporate restaurants. BusinessWeek has an informative article online titled "After a Franchisor Files for Bankruptcy" which discusses Bennigan’s bankruptcy more in depth.

As consumers tend to shift more towards the cheaper alternative, fast-food chains, restaurant chains are going to start to feel increased cost pressure. One of the reasons why Bennigan’s shut down is due to its lack of differentiation from similar restaurants such as Applebee's. I cannot offer a solution at this time for those restaurants currently struggling but I can cheer for them as they try to solve the puzzle.