Restaurants, Hospitality & Leisure

Overview

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Restaurants, hotels, casinos, and other leisure related companies employ a significant number of individuals, especially younger, entry level workers. At close to $1 trillion in annual sales and 15 million employed, the restaurant space is an important part of the U.S. economy. Restaurants may be Quick Service (“QSR”), Full Service (“FSR”), or Limited Service (“LSR”) and may have owner operator structures or may be based on a franchise model.

For chain restaurants, general shifts away from sit-down meals and increased health consciousness are forcing changes to menus and increasing costs. For single location, family-owned restaurants, high labor turnover remains a concern, however the newest challenge is establishing a presence on food delivery/takeout applications. Another segment, known as “Fast Casual” has disrupted the traditional QSR market offering healthier meals at reasonable prices. Financially, restaurants often struggle with low gross margins, and typically run in a working capital deficit having little current assets, yet normal levels of current liabilities.

On the Hospitality and Leisure side, there are hotels, motels, casinos, cruise lines, resorts and the associated products and services that support this industry. Business travel has been a significant driver for this industry with consumer spending depending significantly on discretionary income levels. Hotels, Casinos, and Resorts are often highly cyclical throughout the year, requiring skilled operators to control costs during down times, and take advantage during positive stretches.

In the Restaurant, Hospitality and Leisure industries, MorrisAnderson has successfully worked on cases in the roles of Financial Advisor, Refinancing, Debt Restructuring, and Interim Management. A more detailed list of specific industries is as follows:

Sub-Industries

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