Now under the umbrella of casual dining giant Darden, Cheddar’s Scratch Kitchen is no longer in need of a corporate office. The 165-unit brand (140 company-owned) will close its office in Irving, Texas, and cut 69 positions, according to documents filed with the Texas Workforce Commission and reported by The Dallas Business Journal.
The layoffs will begin April 24 and run through January 31, 2018. Darden’s senior director of communications, Rich Jeffers, told The Dallas Business Journal that the layoffs are occurring as Darden consolidates Cheddar’s support functions to its Orlando, Florida, headquarters. It also reported the company, which owns Olive Garden, The Capital Grille, Seasons 52, Bahama Breeze, LongHorn Steakhouse, and Eddie V’s Prime Seafood, offered 30 Cheddar’s employees the option to relocate. Twenty-three accepted.
Severance and outplacement support are being offered to those who declined the offer or did not have it extended to them as well.
Darden’s $780 million purchase of Cheddar’s, which was first announced March 27, was completed April 24.
In March, president and CEO Gene Lee said Cheddar’s “restaurant-level economics” were very attractive to Darden. The brand was reporting average restaurant volumes of $4.4 million and average restaurant guest counts of about 6,300 per week, with an average check of $13.50—all substantial metrics in today’s casual dining lexicon.
Cheddar’s is also a leader in value perception and intent to recommend, two metrics that typically anchor same-store sales. A recent Market Force Information study placed Cheddar’s ahead of Cracker Barrel in customer’s hearts.
During Darden’s fourth-quarter earnings release in June, Lee said same-store sales were up 1.3 percent in the five weeks since the company began operating Cheddar’s.
“Cheddar’s is a strong performer with same-restaurant sales for full 2017 Darden’s fiscal calendar of positive .3 percent, outperforming the industry by over 300 basis points. … With over $600 million sales, $70 million in EBITDA, and given their current footprint, Cheddar’s will make a significant contribution to Darden’s growth,” said chief financial officer Rick Cardenas in a conference call following the earnings release.