Willie Degel, a small-business owner and former Food Network star, says more restaurant chains are doomed as minimum-wage hikes, health code regulations and hefty charges from mobile delivery apps prey on the industry.
“Mobile delivery is hurting the industry because a lot of them are taking 20% to 30% off the top of the check and then charging the guest another $5 to deliver it,”
Degel tells FOX Business. “At my level, I can’t give up 20% to 30% and absorb all these labor increases as well.”
While some brands rely on delivery for 80% of sales, Degel says only the bigger chains can afford to use such apps as Seamless, GrubHub, Postmates and UberEats, and even they are struggling.
Last month, the casual dining company Dine Brands Global said it plans to close as many as 80 Applebee’s restaurants this year on top of the nearly 100 it shuttered last year. It plans to open 10 to 15 restaurants. Other chains such as Pollo Tropical, Outback and Bob Evans Restaurants also announced closures last year.
Degel, who owns and operates six restaurants under the brands Uncle Jack’s Steakhouse and Uncle Jack’s Meat House, says he has no doubt that the worst is yet to come for the industry.
“It’s going to consolidate,” he adds. “You’re going to see a lot of bad operators close who aren’t adapting, and people with high rents, and people with too many employees.”
Nonetheless, the TV personality has plans to expand and possibly go public in a few years.
“I have about four brands now, so let me keep getting about three to four of each of them in different areas to prove myself and then say, ‘Hey, we can go public,’ ” he adds.
The man who was the host of “Restaurant Stakeout” says he credits his ability to shift his brands to meet the demands of consumers and his discovery of a niche.
“I’m the steak doctor,” he says. “I’m all things meat. I think people are going to places that specialize in something and do it well and I’ve been in the meat business for 30 years.”