In February 2004, Jack Crawford and other franchisees of the Ground Round casual dining chain dialed in to a conference call with their franchisor, American Hospitality. They knew the company had undergone financial difficulties, but they weren’t expecting what they heard: American Hospitality was closing its 59 company-owned stores that day.
It was the Friday dinner rush, and in some cases diners were asked to leave the restaurant mid-meal. Shortly thereafter, the company filed for bankruptcy. “It was shocking. We didn’t know it was going to be that drastic,” Crawford recalls.
The company’s franchisees, who owned 72 units in 19 states, mainly in the Northeast and Midwest, were left swinging in the breeze. In many cases, their life’s work was tied in with a franchise that no longer had an organization behind it. But the announcement, though shocking, did have a silver lining.