I work with a lot of folks in the hosptiality industry with fanchises being one of them. I have eaten at good franchises and some that were horrible, depending how the franchises are run and also the requirements of the franchisor. There are franchisors who are very strict and others that are just out for the money which is usually 6% of the gross, but can go as high as 16% in some cases. Franchisees pay money for a geographic territory and open the franchise. It is like any business and if run correctly you can make a lot of money. If I had to guess and knowing Brinker International who is the franchiseor for Chili's I would probably say the franchisee was not living up to the conditions of the franchise agreement or got behind on their payment to Brinker International. But that is a guess and I'd bet I am pretty close to right. Sorry to hear you lost Chili's.
spot on....the other issue facing smaller QSR's are the rising costs. Labor, insurance, taxes and especially this year with commodities,food costs are soaring. If you are a smaller franchise, you are having a tough go of it. You'll be seeing more and more of the Chili's, Applebee's, Arby's, Wendy's either closing up shop or relocating to a higher sales potential area. Here's an example...in a major QSR chain, food costs have been projected to go up 30-40k per unit this year. So if you own 3,4 or 10, a big chunk of your cash flow is gone. On top of that all the other expenses, and a franchisor telling you to re-invest in what they feel you need (which you are bound to by your franchise agreement) its not hard going broke, or just selling.
