(Source: Wall Street Journal)
As restaurant chains go out of business or prune their store counts in the tough economy, competitors are jumping on the opportunity to move into the vacated locations as a way to expand quickly and cheaply.
Restaurants can convert their competitors’ closed sites to their own brands at a lower cost than building new restaurants from scratch, industry executives note. Incoming businesses also have the upper hand in negotiating rents with landlords stuck with empty restaurant space.
“You definitely have the bargaining power because you have all the vacancies, and landlords are aware of that,” says Navin Nagrani, vice president of Hilco Real Estate LLC, which specializes in real-estate restructuring.
Read Paul Ziobro’s full article “Growing Chains Target Shuttered Restaurants” in the Wall Street Journal (March 30, 2009).