Denny’s and Algebra

Denny’s and Algebra. www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast, explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact that we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Denny's and Algebra. Denny's restaurants. Yeah, they're going to close
up to one hundred and fifty locations. Other restaurants as well,
TGI Fridays. There's been a litany of them. You know, people,
I'm gonna be honestly, I'm surprised sometimes at the questions
I get from our listening audience out there when certain
business stories pop up. And I got a bunch in

(00:37):
regards to Denny's. Now, I've been to Denny's in some time. Sometime,
I got to think I got to go back to college.
The last time I went to Denny's it was probably
around three four o'clock in the morning. But anyway, neither
here nor there. Denny's in Algebra. Why Denny's closing one
hundred and fifty restaurants? People are like, oh my god,

(00:57):
people don't want to spend anymore. No, you know, people,
people want to spend. People want to go to restaurants.
That's not the issue.

Speaker 1 (01:10):
Uh.

Speaker 2 (01:10):
The issue is the math doesn't work anymore. It's just
that something. This is one of the things that happens
in business, all right. Denny's is a discount restaurant. Correct.
I ain't call it fast now, I mean kind of
fast food. You want to call it fast again. When

(01:30):
I think of fast food, I think of like McDonald's
burger king. You go up and you order, nobody really
waits on you. They wait on you at Denny's. But
it's still quasi fast food now. The algebra. I'm often asked.
I've been asked for two years. People ask them to
evaluate their business. I remember, you know, back back, and
they am down in southwest Florida, down around Sarasota Lakewood

(01:54):
Ranch area, people asking about opening up a restaurant. And
I go in and I take a look at the
size this restaurant. They tell me what their business plan is,
and I say, no, no, it's not gonna work. What
do you mean it's not gonna work. Well, it's not
gonna work. Take a look at the size of this place. Okay,

(02:15):
I'm gonna maybe go back to the UH. I always
use the South Park episode the underwear gnomes where the
underwear noomes have this business plan where they steal the
kids under prants, and the middle part they don't have.
They got a question mark. And the last part is profit. Now.
You want to get to the point where you're able
to profit, right, well, if certain areas of your business

(02:44):
have gone up labor costs, food costs, energy costs, whatever
it may be, and your customer is only willing to
spend X amount of dollars on you know, moon's over
my hammy or eggs over? How was I go? There's
moon over my Yeah, moon over my hammi? Wasn't that
the thing on the menu brand Slam Breakfast? They're only

(03:06):
willing to spend so much. I mean, there's a point
in time where people like that's all I can stand.
I can't stand anymore. The algebra doesn't work anymore. It
doesn't add up. And that's what we're seeing all over
the country. The numbers don't work anymore. When states say, okay,

(03:30):
you know what, we have to raise minimum wage. Okay,
labor costs have gone up, energy costs, we've talked about
that costs. When it comes to regulation, all of these things,
all of these things increase. But certain certain businesses, like

(03:50):
a quasi fast food restaurant, where your customers are, you know,
willing to spend a certain amount of money, that's only
going to go so far. They can only raise their
prices so much. You can raise your prices to a
point where you can pass the costs on until you
can't pass them on anymore, and then you're like, screw it,
it's not worth it. Let's shut it down, or it's

(04:13):
not even worth it, it's not even worth having the place
in business. If we're only going to profit this much
and there's no sign of hope on the horizon where
that's going to change or that's going to turn around,
You're going to continue to see this. You are going
to continue to see this all over the country, and
more of these chain restaurants are going to go by

(04:33):
the wayside. They cannot make the math work. Watch Dog
on Wall Street dot com