The Houston Business Journal‘s Allison Wollam reports that Cabo and Schlotzky’s are both planning to expand in Houston after several years of contraction forced by bankruptcy:
A pair of restaurant chains have rebounded from bankruptcy and have opened or plan to open their first eateries in the Houston area since regaining their financial footing earlier this year.
Houston-based Cabo Restaurants LP, which filed for Chapter 11 bankruptcy protection in July 2004, will open a new location in the Royal Oaks area this spring and also has plans on the drawing board for additional restaurants in Pearland and Katy.
And Austin-based Schlotzsky’s Ltd., which filed for Chapter 11 in August 2004 and closed several area units in the process, anticipates opening a total of seven to eight new restaurants here in 2006. The first Schlotzsky’s to open following a post-bankruptcy store shuttering effort began serving up the company’s signature sandwiches in northwest Houston on Nov. 28.
For Cabo, the Richmond strip store was apparently quite a financial drag:
Roberson opened the Richmond unit at 6025 Richmond Ave. in 2001 in space formerly occupied by Billy Blues Bar & Grill. That Cabo closed in early 2004 because Roberson says it became a nightclub, not the restaurant it was designed to be, and was hurting the Cabo brand.
The Shepherd Plaza location, once a hot spot among the city’s night crowd, had outlasted some of the center’s trendiest restaurants, nightclubs and bars when it closed in 2001.
“We’re going to take our time and be careful this time,” Roberson says of the new expansion effort. “We have a good opportunity to rebrand ourselves as more of a traditional restaurant concept, which will help us as we move into the suburbs.”
Ditching the popular Shepherd Plaza location in favor of a location on the changing Richmond strip was a bad blunder.
Schlotzky’s seems to have improved its financial footing and rededicated itself to its core sandwich business:
Fort Worth-based Bobby Cox Cos. Inc. paid $28.5 million for Schlotzsky’s in early December 2004, taking the company private.
Bobby Cox owns five Texas Burger restaurants in West Texas, 15 Taco Villas in North and West Texas as well as New Mexico, and 19 Rosa’s Cafe restaurants in North and West Texas and California.
With strong backing and stable footing, [spokesman Debbie] Gardner says, the company is back on track.
“We are definitely in the midst of a re-growth period,” she says. “We are anticipating steady growth in the Houston area. Houston has always been a good market for us.”
[snip]
Chris Tripoli, owner of A La Carte Foodservice Consulting, says Schlotzsky’s is making a smart first step by re-establishing itself in a “safe haven” market where it already has a strong customer base.
He believes Schlotzsky’s should spend more time and energy on its core product rather than expanding the menu and the square footage of restaurants and confusing diners.
“They expanded their menu and their buildings before, but they weren’t able to capture a larger customer base to support that growth,” he says. “I think they now have a better understanding of their concept and what works for them.”
The huge store on Kirby always confused me. It’s almost as if the sandwich shop wanted to be more of a Whole Foods or Central Market cafe, but everyone still thought of it as a slightly nicer Subway.
