October 11, 2007

Are Chili’s Gift Cards Becoming Worthless?

Over the past few years, Brinker International, the parent company of Chili’s, has been unloading under performing restaurant brands off its balance sheet. The restaurant brands, Big Bowl Asian Kitchen, Corner Bakery Cafe, Cozymel’s, EatZi’s, Grady’s American Grill, Rockfish Seafood Grill and Taco Cabana, have all been sold off. The latest restaurant to be put up for sale is Romano’s Macaroni Grill. Macaroni Grill saw a cumulative 18.4% decline in traffic over a four year period from July 2003 to July 2007.

Brinker International Restaurants

Even Chili’s, Brinker’s flagship restaurant brand, experienced a cumulative 8.7% decline in traffic from July 2003 to July 2007. It is rumored that Chili’s traffic decline from August 2004 to August 2007 is even more significant and could be around 12%.

Currently, a Chili’s, On the Border, Maggiano’s, Macaroni Grill, and Brinker gift card can be redeemed at any of the Brinker International restaurants. What does this mean for all the Chili’s, Macaroni Grill, and Brinker gift cards out there if Brinker continues selling off its restaurant? The most likely scenario is that the gift cards will only be honored at restaurants they were purchased at, which is less choices available for the card holder. For example, if Macaroni Grill does get sold, only gift cards sold through Macaroni will probably be honored by the new owner. Chili’s and Brinker gift card will no longer be accepted at Macaroni Grill or vice versa. Furthermore, the new owner may consolidate the current 230 Macaroni Grill restaurant and close the one nearest to you. Another option is that the new owner allows Macaroni Grill gift card to be used at their other restaurant brands. Currently, IHOP is looking at buying Applebee’s.

Therefore, it is prudent to use up those outstanding gift cards or resell it now. Currently, Chili’s, Macaroni Grill, On the Border, and Brinker gift cards have a 91% resale value on the secondary market. Do not hold on to Macaroni Grill gift cards as it could become limited or worthless in the near future.

Long View Shows Chains Losing Guests [Yahoo! Finance]

Be Sociable, Share!

Readers' Comment (1) | Posted by Alex | Filed under: Restaurants

Leave a Comment

 

Content

Feeback, Tips, Questions, Bugs?

Please, use the contact us form to leave us any feedback, question, tips or bug reports.

For comments or questions about an article, please use the article's comment form. Thank you!