Three years ago on Friday, February 13th, Ground Round’s parent company shuttered its nearly 60 corporate restaurants and the chain’s headquarters. The closing stunned customers, creditors, employees and franchisees.
The mass layoffs and hasty restaurant lockups on that Friday afternoon, catching scores of diners in the middle of unfinished meals, were of a scale not seen in the restaurant industry. The announcement came right before the dinner rush on a Friday, when store managers were ordered to tell diners to finish eating and pay their tabs. (Some were sent home with half-eaten meals in takeout containers.) More than 3,000 employees—some of whom had been with the restaurants for over a decade—were let go without severance, and their final paychecks bounced.
A few big competitors immediately considered buying Ground Round’s assets out of bankruptcy, but during the months-long sale process, the franchisees were left to fend for themselves. They considered it crucial that the franchisee-owned restaurants all stay open during that time. Within a few weeks the franchisees elected leaders, hired a law firm, created a buying co-op, renegotiated food contracts—and even introduced a new, low-carb menu.
In fact, after the initial scare, being on their own had a certain revolutionary appeal. With no royalties to pay and no corporate office to answer to, life was pretty good. So a few months later, when bids started coming in, the franchisees got the idea of taking their experiment in self-government to the next logical step: Why not pool their assets and buy the company themselves?
The franchisees formed the Independent Owners Cooperative, LLC (IOC) and acquired a majority of the assets of The Ground Round Inc. The assets acquired included 42 trademarks registered in the United States and Canada, all of the franchise agreements and leases related to franchised locations and franchise receivables.
Read more about “Inmates running the Asylum” on Let’s Talk Franchising
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With over 25 years of franchise, marketing, and entrepreneurial experience, and the owner of Franchise Perfection, Jim Coen, brings key skills to franchise consulting for those interested in buying a franchise business opportunity.
Jim has been a franchisee, worked for franchisors, ran a multi unit operation for a franchisee, and served as a franchise consultant matching candidates with the right franchise.
At Franchise Perfection there is no perfect franchise, but there is always a perfect match.
For over 20 years Jim worked with Super Coups. Super Coups is a MA based direct mail franchise business to business opportunity.
Prior to Super Coups Jim successfully marketed franchises in the New England area for Uniglobe Travel Northeast a travel franchise, Merry Maids a maid cleaning franchise, & Emack & Bolio an Ice Cream franchise.
Jim was the host of a popular radio show in the Boston Area called "Let's Talk Franchising" that was broadcast on AM 1060 WBIX The Boston Business Station.
Jim currently serves on the Board of Directors of the New England Franchise Association (NEFA) www.nefranchise.org
