Golden Corral’s second-largest franchisee, Platinum Corral, declared bankruptcy due to the overwhelming effects of COVID.
As part of the restructuring, the Jacksonville, North Carolina-based operator has permanently closed 16 of its 28 units across West Virginia, Ohio, Kentucky, North Carolina, and South Carolina. The stores pivoted to cafeteria-style operations, but that proved unsustainable.
That leaves the franchisee with 12 stores—seven in North Carolina and five in Virginia. Ten of them are currently open. The two remaining units, in Greenville, North Carolina, and Richmond, Virginia, will reopen later in 2021.
“We started Platinum Corral 25 years ago, and to remain operational into the future, we need to focus on the locations that are profitable and align with the Golden Corral business model,” Billy Sewell, president and CEO of Platinum Corral, said in a statement. “While these decisions were weighed heavily over many months, we strongly believe the restructuring will afford us the opportunity to successfully operate 12 Golden Corral Buffet Restaurants in North Carolina and Virginia for the long term.”
“We know the Golden Corral comeback will be brighter than the COVID-19 setback,” he continued.” “We sincerely appreciate the hard work, dedication and hospitality shown by our employees and are grateful for each community’s support and patronage for so many years.”
Platinum Corral was formed in 1996 and initially acquired two Golden Corral stores. At one point, the franchisee oversaw more than 30 locations. In 2019, 11 of the 28 stores were recognized for Golden Corral’s Operations Excellence Awards. In the same year, the franchisee earned $89 million in gross sales—its best year on record.
However, when COVID arrived, every restaurant shuttered on March 20, 2020. The franchisee has around $49.4 million in liabilities and $11.3 million in assets.
The news comes about six months after Golden Corral’s largest franchisee, 1069 Restaurant Group, filed for bankruptcy. The Florida-based company, owned by Eric Holm, oversaw 33 units across the greater Orlando and Atlanta areas. 1069 Restaurant Group emerged from bankruptcy in early March and reopened 22 locations. The other 11 stores will shutter permanently.
“It was simply a restructuring move and an opportunity for him to get his balance sheet in order,” Golden Corral CEO Lance Trenary told FSR. “Eric’s very excited about growing in the future.”
Trenary said in late March that 290 restaurants have reopened and 250 of those are operating as buffets. The other 40 are using alternatives, such as cafeteria-style, which he sees as inefficient and not as profitable—there’s roughly a 20 percent difference in revenue between a cafeteria-style and buffet location. The chain entered the pandemic with roughly 490 stores.
To meet the new age of convenience Golden Corral is exploring a variety of avenues, including drive-thru, a virtual concept, fast-casual spinoffs, and smaller footprints.
“We do feel very bullish about the future,” Trenary said. “We think there’s great upside, perhaps not only in the buffet business, but also in the other innovation ideas that we’re testing out and starting to see great results from. As I said before, we do know that Golden Corral’s forever changed.”
Throughout COVID, buffet and cafeteria-style operations have suffered greatly. Last spring, Garden Fresh Restaurants, the parent of buffet concepts Souplantation and Sweet Tomatoes, declared Chapter 7 bankruptcy and closed all 97 of its units. K&W Cafeterias filed bankruptcy in September, and Luby’s, which owns Luby’s Cafeterias, is planning to liquidate its assets and shut down.