Financing for restaurant operators still shows signs of gridlock, as large lenders are only lending to franchisees that emerged from the downturn relatively unscathed, leaving the bulk of the operators struggling to access capital to expand, remodel stores or upgrade equipment.
The environment sets up a dynamic where the rich get richer, according to lenders, franchisees and other restaurant-industry executives at the Restaurant Finance Development Conference this week. Franchisees at McDonald’s Corp., whose sales have thrived during the past year, could have easier access to capital to remodel and open stores, while other burger rivals like privately held Burger King Holdings Inc., Wendy’s/Arby’s Group Inc., Jack in the Box Inc. and Sonic Corp. find it harder to do so.
“The only people the banks want to lend to now are the people that don’t need the money,” said Joel Aaseby, chief financial officer of Heartland Food Corp., the third-largest Burger King franchisee.