Talk of the bay

Storms' effect minimal on chain restaurants' revenue

Outback Steakhouse estimated that hurricanes Charley and Frances cost it as much as $5-million in sales by forcing the Tampa company to briefly close about 200 restaurants.

Big deal? Not for an eight-chain conglomerate with revenues of $2.7-billion in 2003. Not when 84 percent of all company-owned or joint-venture sites are located outside Florida.

The story was much the same for giants such as Brinker International of Dallas (Chili's Grill & Bar, Romano's Macaroni Grill, Maggiano's), Darden Restaurants of Orlando (Red Lobster, Olive Garden) and Applebee's: Size and geographic spread helped absorb the damage.

At least one chain, Checkers Drive-In Restaurants of Tampa, credited Charley and Frances with boosting its revenues.

"We've actually achieved record daily sales at many of our company stores both before and after the storms," said Richard Turer, Checkers' vice president of marketing. "The incremental sales on the "halo days' has made up, or more than made up, the lost revenue we suffered on the days the stores were closed."

Many storm victims who lacked electricity or water in their homes ate out instead. Checkers and its Rally's affiliates obliged them by staying open later than many other chains, Turer said. The company also planned ahead by stocking up on bread and other ingredients before the storms. Plain good luck spared most of its company-owned restaurants from being closed for more than 24 hours.

For smaller operators, the hurricanes could be lethal. A number of restaurants in Punta Gorda and other hard-hit locations were knocked out of business for weeks. Those without business-interruption insurance might never reopen.

Bob Griffin, publisher of Best Restaurants magazine out of Indian Rocks Beach, said many of the independents that take out ads in his regional editions were hurt. He is offering some customers a "hurricane discount" if they pay their bills on time. "The main thing I have encountered is a big slowdown in payments," he said.

In Pinellas County, Griffin said, "I've noticed many signs blown out. That will cost someone. Certainly many employees lost the income of three to seven days. Many tourists have now left the beaches, and new ones have not replaced those who left."

Some larger regional operators took a beating, too. Turer cited one Checkers franchisee whp owns stores in Orlando, West Palm Beach and Mobile, Ala., all cities that experienced significant storm damage.