The Rosenberg Center Franchise 50 Index, which tracks a diverse set of 50 publicly traded U.S. companies engaged in business format franchising, had good news for investors in Buffalo Wild Wings (NASDAQ: BWLD).

In its most recent report, issued Dec. 27, it was noted that the index dipped a mere 0.4% in the third quarter, while the S&P 500 dropped 9% in the same period.

BWLD was the principal contributor to the performance of the index. The company actually saw an increase in value of 62.3% during the quarter. The next best positive contributor to the index performance was McDonald's (NYSE: MCD), with an increase in value of 9%.

The company is in a strong capital position to take the next steps toward its goal of having 1,000 owned or franchised locations. With a current ratio of over 1.5 and a debt-to-equity ratio of 0.08%, compared with an industry average of 208%, BWLD should have little difficulty raising the necessary capital to grow.

Continue reading Buffalo Wild Wings is a hot deal

Buffalo Wild Wings is a hot deal originally appeared on BloggingStocks on Sun, 04 Jan 2009 10:40:00 EST. Please see our terms for use of feeds.

Maybe IHOP can work some magic and turn the chain around, but it might be difficult. The company is financing the entire acquisition with debt, and may not be so quick to provide the face lift the restaurants so badly need.

But then again, IHOP's revenue in 2006 was lower than it was in 2002. So maybe this is a case of two drunken sailors trying to hold each other up. There's nothing much to get excited about for shareholders of either company.

Applebee's acquisition going worse than anyone had predicted originally appeared on BloggingStocks on Fri, 03 Oct 2008 14:10:00 EST. Please see our terms for use of feeds.

DineEquity loses CFO -- Applebee's acquisition haunts company originally appeared on BloggingStocks on Tue, 09 Sep 2008 13:00:00 EST. Please see our terms for use of feeds.

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Crapplebee's below in the comments.

I first heard the nickname "Crapplebee's" from my brother, when I suggested that we go to dinner at Applebee's and he didn't think it was such a good idea.

I don't know that Applebee's is "crappy" per se; it's more that there's nothing especially unique about it. It's very similar to Chili's, T.G.I. Friday's, Ruby Tuesday's, and a whole bunch of other fast-casual chains with "apostrophe s" in their names. T.J. Palmer recently said about the restaurant that "It doesn't have anything that would make me want to come back."

What makes that a major burn is that T.J. Palmer is the founder of the company! You can read her version of the company's history at her website.

On November 29th of 2007, IHOP, now DineEquity (NYSE: DIN), announced that it had completed the acquisition of Applebee's, with CEO Julia A. Stewart commenting that "We are delighted to complete the acquisition of Applebee's as it represents an opportunity to create significant long-term value for IHOP shareholders over and above what we could have achieved on a standalone basis."

On that day the stock closed at $52.29. It closed recently at $25.49. That's a decline of more than 50% since the acquisition: Crapplebee's indeed!

Company nicknames: Crapplebee's, a place only a founder could love? originally appeared on BloggingStocks on Wed, 13 Aug 2008 15:48:00 EST. Please see our terms for use of feeds.

This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.

Applebee's is the largest casual dining restaurant chain in the United States, with nearly 2,000 units spread out over 49 states. Applebee's changed its formal name back in 1986 to Applebee's Neighborhood Bar and Grill to give it a local appeal. In November 2007, International House of Pancakes -- IHOP -- now formally known as DineEquity, (NYSE: DIN) bought out Applebee's for $2.1 billion. It's hard to imagine Applebee's and IHOP as DineEquity!

The casual dining sector is embracing a newer player with aspirations of a national roll out. That player is BJ's Restaurant and Brewery (NASDAQ: BJRI) based in Huntington Beach, California. BJ's offers an on-site brewery with its own beer recipes or a trusted third party's recipe.The chain serves gourmet salads, steaks, chops, fish, poultry and several other popular dishes. It also makes superb deep-dish pizza for both in-house dining and carry out.

BJ's has 72 units in the chain spread over 13 states with enormous room to grow. Being a California-based company, BJ's stronghold is California, but the concept has become popular in key restaurant markets like Florida and Arizona. The casual nature of the chain has an appeal in many large markets not yet penetrated. BJ's has yet to open a unit in New York, Pennsylvania, Illinois, Georgia or Tennessee.

Continue reading The next Applebee's is BJ's Restaurant and Brewery

The next Applebee's is BJ's Restaurant and Brewery originally appeared on BloggingStocks on Sun, 29 Jun 2008 12:00:00 EST. Please see our terms for use of feeds.

When IHOP (NYSE: IHP) agreed acquire Applebee's nine months ago, Applebee's shareholders were none too pleased. Highly respected investor Sardar Biglari vocally opposed the deal, Applebee's director Burton Sack made plans to sue, and shares of IHOP rose more than Applebee's on the announcement -- a very rare occurrence.

But now things have changed as the restaurant industry has continued to weaken and shares of IHOP have lost a good chunk of their value. Applebee's competitors like Ruby Tuesday's (NYSE: RT) have plunged, and the deal is looking less well timed.

The company released its first quarter results this week and the Applebee's turnaround appears to be doing as well as could be expected given the environment -- the company saw the first quarter of positive same-store sales growth in two years. However, plans to sell and lease back some of the real estate that came with the deal has been "challenged by weakening credit market conditions." The plan to franchise more of the company-owned stores has made some progress.

Continue reading IHOP shows mixed results, some progress with Applebee's

IHOP shows mixed results, some progress with Applebee's originally appeared on BloggingStocks on Tue, 29 Apr 2008 15:35:00 EST. Please see our terms for use of feeds.

IHOP Corp (NYSE: IHP) is scheduled to release EPS on February 27.

IHP franchises and operates 3,300 restaurants under IHOP and the Applebee's Neighborhood Grill & Bar.

Raymond James downgraded IHP to Underperform from Outperform.

IHP overall option implied volatility of 70 is above its five-week average of 64 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update: IHOP elevated volatility suggests larger price movement originally appeared on BloggingStocks on Wed, 06 Feb 2008 10:10:00 EST. Please see our terms for use of feeds.

Coupons underscore tough times for restaurants originally appeared on BloggingStocks on Mon, 12 Nov 2007 17:34:00 EST. Please see our terms for use of feeds.

Applebee's director to sue for money in IHOP deal originally appeared on BloggingStocks on Wed, 24 Oct 2007 18:14:00 EST. Please see our terms for use of feeds.

The Christian Science Monitor recently ran an article about the "secret menus" at various fast food restaurants. Apparently, I'm not the only one who has gone off-menu in search of something beyond the usual fare. The article claims that at In-N-Out Burger, the justifiably famous burger chain in southern California, you can order a hamburger "protein style" -- meaning without the bun. Apparently, you can get a McBruschetta at McDonald's (NYSE: MCD), which has toasted tomatoes, onions, and a bun; a Naked Chicken at Popeye's, which has no breading (!); and a Short Cappuccino at Starbucks (NYSE: SBUX), which is served in a kiddie cup.

Continue reading Use the 'secret menu' for better fast food

Use the 'secret menu' for better fast food originally appeared on BloggingStocks on Mon, 22 Oct 2007 15:00:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Lehman downgraded the mortgage finance sector to Negative from Neutral citing the potential of over $100B in losses for the group in the coming years. Washington Mutual (NYSE: WM) was downgraded to Equal Weight from Overweight; IndyMac Bancorp (NYSE: IMB) and Countrywide Financial Corporation (NYSE: CFC) were downgraded to Underweight from Equal Weight.
  
• Applebee's International (NASDAQ: APPB) was downgraded to Underperform from Market Perform at Wachovia, as the firm sees potential downside risk if the company's acquisition of IHOP Corp (NYSE: IHP) does not go through, following mixed reviews from Proxy firms.
  
• Merriman downgraded shares of Fuel-Tech (NASDAQ: FTEK) to Sell from Neutral after channel checks indicated the competitive landscape is much more challenging than commonly perceived for the FUEL CHEM product line. Merriman sees significant risk to shares at current levels.
  
• Citigroup downgraded shares of BHP Billiton (NYSE: BHP), Anglo American (NASDAQ: AAUK) and Rio Tinto (NYSE: RTP) to Hold from Buy on valuation following the recent rally.

• Lehman downgraded the specialty finance sector to Neutral from Positive; the firm downgraded American Express Company (NYSE: AXP), Capital One Financial Corporation (NYSE: COF) and Discover Financial Services (NYSE: DFS) to Equal Weight from Overweight.
  
• Lululemon Athletica (NASDAQ: LULU) was downgraded to Neutral from Buy at Goldman Sachs.
  
• JP Morgan downgraded Dollar Tree Stores (NASDAQ: DLTR) to Underweight from Neutral.
  
• Angiotech Pharmaceuticals (NASDAQ: ANPI) was downgraded to Sector Performer from Sector Outperformer at CIBC and to Sector Perform from Outperform at RBC Capital.

Analyst downgrades: Mortgage finance sector, APPB, FTEK, BHP, AAUK and RTP originally appeared on BloggingStocks on Mon, 22 Oct 2007 10:45:00 EST. Please see our terms for use of feeds.

Applebee's (APPB) settles shareholder lawsuit originally appeared on BloggingStocks on Mon, 15 Oct 2007 15:43:00 EST. Please see our terms for use of feeds.

Normally when a company announces a definitive agreement to be acquired, you can tell when it happened just from looking at the stock's chart. That's because takeovers usually happen at substantial premiums to the stock's most recent trading price. In the case of Applebee's International (NASDAQ: APPB), the premium when IHOP Corp. (NYSE: IHP) agreed to acquire the company was so small that it's not noticeable on the stock's chart.

I couldn't believe the Applebee's board would agree to such a deal, and it's refreshing to see that at least a few directors are none too pleased. According to DealBook, "Applebee's disclosed Thursday that five board members, including its chairman, its chief executive, and its chief financial officer, are opposed to the $1.9 billion sale. That wasn't enough to stop the board from approving the deal in July -- nine directors voted in favor -- but it represents an unusual level of internal opposition to a supposedly friendly deal."

I've been skeptical of the deal since it was announced. In July, I wrote that if IHOP's plan to revive the company would work, Applebee's shareholders would miss out on the upside by selling out now. Then investor Sardar Biglari acquired a small stake in the company and expressed his displeasure: "... we believe that if Applebee's undertook the same initiatives as IHOP has in mind, the appreciation IHOP recently gained would, at the very minimum, shift to Applebee's."

Perhaps this disclosure of dissenting directors (including the CEO, chairman, and CFO!) will spark a grass-roots campaign to block the deal, but the stock isn't trading like such a campaign would have much success.

Applebee's (APPB) directors prove that corporate governance does still exist originally appeared on BloggingStocks on Sat, 08 Sep 2007 18:40:00 EST. Please see our terms for use of feeds.

On July 17th, I had this to say about IHOP's (NYSE: IHP) deal to acquire to buy Applebee's (NASDAQ: APPB): "iHop shares soared on the news -- it's one of the only times I can think of that shares of an acquiring company have risen 3 times as much as those of the company being acquired. The premium was tiny -- the stock traded higher a month ago -- and represented a paltry return for the company's shareholders... I'm surprised none of the big institutional shareholders haven't spoken up yet."

Well none of the big institutional shareholders has spoken up, but a small yet feisty one has. Sardar Biglari, the Chairman and CEO of The Lion Fund and Western Sizzlin (OTC BB: WSZL), issued a press release blasting the deal:

Continue reading Sardar Biglari not too happy with Applebee's buyout

Sardar Biglari not too happy with Applebee's buyout originally appeared on BloggingStocks on Thu, 26 Jul 2007 09:45:00 EST. Please see our terms for use of feeds.

I wasn't too impressed with IHOP's (NYSE: IHP) decision to buy Applebee's (NASDAQ: APPB). But at the same time, I think Applebee's shareholders should be pretty upset. iHop shares soared on the news -- it's one of the only times I can think of that shares of an acquiring company have risen 3 times as much as those of the company being acquired. The premium was tiny -- the stock traded higher a month ago -- and represented a paltry return for the company's shareholders.

Today's Wall Street Journal asked the question Can iHOP Chief Restore Polish to Applebee's? According to the Journal:

IHOP Corp. Chief Executive Julia Stewart said she plans to revive Applebee's International Inc. by better distinguishing the chain from competitors, remodeling its restaurants and selling hundreds of company-owned locations to franchisees.

OK -- distinguishing the chain, remodeling, and emphasizing franchising. As Kevin Kelly wrote yesterday, it seems like a good idea, but the question is Why did Applebee's need to be sold to do that?

If Stewart's plan will work -- I doubt that it will because Applebee's will likely continue its decline as a brand -- Applebee's shareholders are getting the shaft.

I'm surprised none of the big institutional shareholders haven't spoken up yet.

If IHOP wants it, should Applebee's sell it? originally appeared on BloggingStocks on Tue, 17 Jul 2007 19:40:00 EST. Please see our terms for use of feeds.

Continue reading IHOP picks up Applebee's

IHOP picks up Applebee's originally appeared on BloggingStocks on Mon, 16 Jul 2007 14:55:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• IHOP (NYSE: IHP), of pancake house fame, is buying Applebee's International Inc (NASDAQ: APPB), the huge casual dining restaurant chain, for $2.2 billion in a deal concluded last night, reported the Wall Street Journal (subscription required).
• Vodafone Group (NYSE: VOD) is looking at a possible $160 billion bid for Verizon Communications Inc (NYSE: VZ), reported the Financial Times (subscription required).

• The U.K. Times reported that Ford Motor Company (NYSE: F) is preparing to sell Volvo, the Swedish car group it bought eight years ago, in a move that could raise $8 billion.
• The Observer reported that BHP Billiton (NYSE: BHP) is lining up a £20 billion bid for Alcoa Inc (NYSE: AA), after its bid for rival Alcan Inc (NYSE: AL) was trumped by Rio Tinto (NYSE: RTP).
• Large American Internet companies, possibly including Google Inc (NASDAQ: GOOG) and Yahoo Inc (NASDAQ: YHOO), are considering snapping up Rediff.com India (NASDAQ: REDF), which runs one of India's most popular consumer Internet portals, reported the Hindustan Times.

Newspaper wrap-up 7-16-07: IHOP buying Applebee's originally appeared on BloggingStocks on Mon, 16 Jul 2007 09:30:00 EST. Please see our terms for use of feeds.

I'm not sure why IHOP want its, but it got it. IHOP (NYSE: IHP) has agreed to buy Applebee's (NASDAQ: APPB) for $25.50 a share, or $2.2 billion. The deal comes at a premium of just 4.6% to Friday's closing price, and stock traded above $26 as recently as last month. The deal probably won't be too pleasing to the company's major shareholders like Richard Breeden, who is credited with forcing the sale of the company.

But I'm not surprised by the low price the company fetched, and I've thought since the beginning that Breeden was barking up the wrong tree. On June 29th, I wrote about the epic tale of the Decline and Fall of Applebee's. Even company founder T.J. Palmer has blasted that company, saying that "It doesn't have anything that would make me want to come back."

Maybe IHOP can work some magic and turn the chain around, but it might be difficult. The company is financing the entire acquisition with debt, and may not be so quick to provide the face lift the restaurants so badly need.

But then again, IHOP's revenue in 2006 was lower than it was in 2002. So maybe this is a case of two drunken sailors trying to hold each other up. There's nothing much to get excited about for shareholders of either company.

IHOP gobbles up Applebee's originally appeared on BloggingStocks on Mon, 16 Jul 2007 08:01:00 EST. Please see our terms for use of feeds.

I've been waiting for Apple (NASDAQ:AAPL) to do the obvious and buy IHOP (NYSE: IHP), but it seems this is not to be. According to a breaking story on Bloomberg, IHOP (formerly know as the International House of Pancakes), the largest flapjack chain in the country, has made a hefty offer of more than $2 billion for Applebee's (NASDAQ: APPB). While Applebee's market cap of $1.92 billion is more that twice that of IHOP's $970 million, the pancake house is know as the home of the big appetite, and they seem ready to chow down.

While IHOP has made their reputation on bountiful down-home grub, Applebee's features a menu with Weight Watchers International-approved, calorie-controlled menu items. Compare their Big Breakfast Combo, three strips of bacon, three sausage links, three ham strips and four eggs, to Applebee's 480-calorie W.W.-approved Tortilla Chicken Melt.

The beauty of this deal is that it would allow IHOP to retain those customers that, due to years of Grand Slam breakfasts, find it necessary to waddle away toward a lighter menu. And when Applebee's customer get that hankering for some grease and grits, the answer is right there in-house.

My hope is that, whomsoever ends up with Applebee's, they have a grammarian on staff that will fight for a correction to the slogan "Eating good in the neighborhood."

I'm thinking, "Dining good in the neighborhood."

IHOP goes for grand slam with offer for Applebee's originally appeared on BloggingStocks on Wed, 13 Jun 2007 17:30:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Jefferies assumed coverage of International Game Tech (NYSE: IGT) with a Buy rating and $47 target citing an attractive risk/reward.

• Big 5 Sporting Goods (NASDAQ: BGFV) was started with a Sector Performer rating and $33 target at CIBC, expecting shares to be driven by an operating margin recover and improving cash flows.

• CVS/Caremark Corp (NYSE: CVS) was reinstated with an Overweight rating at Lehman Brothers and resumed with an Overweight rating at Morgan Stanley.

• JP Morgan believes the rough environment, growing competition and valuation warrants IHOP Corp (NYSE: IHP) to start with a Neutral rating.

• B. Riley initiated shares of United Online, Inc (NASDAQ: UNTD) with a Buy rating and $18 target.

• Bear Stearns started T-3 Energy Services, Inc (NASDAQ: TTES) with an Outperform rating and $32 target.

• Morgan Stanley initiated shares of Vanda Pharmaceuticals Inc (NASDAQ: VNDA) with an Overweight rating and $29 target.

• American Technology initiated shares of Bankrate, Inc (NASDAQ: RATE) with a Buy rating and $48 target.

• Altus Pharmaceuticals Inc (NASDAQ: ALTU) was initiated with an Outperform rating and $20 fair value estimate at Leerink Swann.

Analyst initiations 4-30-07: BGFV, CVS, IGT, IHP and RATE originally appeared on BloggingStocks on Mon, 30 Apr 2007 11:17:00 EST. Please see our terms for use of feeds.