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Rio Bravo has bid adios to fans of its spicy Mexican fare. The restaurant chain, based in Emeryville, Calif., closed the last of its 37 restaurants this month. The casual dining chain had nine restaurants in Michigan, including stores in Troy, Bloomfield Township and Auburn Hills.
The parent company, Chevys Inc., filed Chapter 11 bankruptcy Oct. 10 but closed its Rio Bravo restaurants between May and October, said Darlene Hersh, director of marketing for Chevys.
"We don't know why they were performing poorly," Hersh said. "They were performing poorly when we acquired them in 1999. We had hoped to be able to turn them around."
Chevys acquired the Rio Bravo chain from Applebee's in 1999. Chevys dumped the Rio Bravo chain because it was draining resources away from the company's core brand, 117 Chevys Fresh Mex restaurants, and nine Fuzio Universal Pasta restaurants, according to a media statement.
"They probably had a heavy debt load," said Jerry McVety, vice president of business development for McVety & Associates, a restaurant consulting firm in Farmington Hills. "I think that coupled with the fact that traffic in those particular stores has slowed down, it was a financial burden for them."
A competing chain, Chi Chi's, also has struggled in recent years.
"Casual restaurants started with Chi Chi's," McVety said. "When they first opened up, there wasn't a lot of competition. Many of the restaurants have added (Mexican food) to their standard fare. What was unique before is now available in other restaurants."
A subsidiary of Prandium Inc., based in Irvine, Calif., Chi Chi's filed for Chapter 11 bankruptcy Oct. 8. The Mexican restaurant chain has entered into a letter of intent with CC Acquisition Holding Co., a newly formed entity whose majority owner is Worldwide Entertainment, to purchase the chain. Prandium emerged from Chapter 11 bankruptcy last year.
Chi Chi's, which has 12 restaurants in Michigan including one in Sterling Heights, has pared down from 152 stores in 2001 to 131 stores this year.
Don Pablo's, a chain of 108 Mexican restaurants, based in Madison, Ga., might gain some marketshare from the closings.
"All restaurants are really our competitors as you see casual dining start to expand their menus with fajitas for instance," said Greg Graber, a spokesman for Don Pablo's. "While they don't have the breadth of selection, Applebee's has fajitas and Chili's has fajitas. The whole segment has become more competitive."
Dallas-based Brinker International, which operates Macaroni Grill and Chili's, also has a chain of 132 Mexican restaurants called On The Border. Brinker opened five On The Border stores last year and plans to open another five this year.
"One of the segments we have seen pretty good growth in recent years is ethnic dining and Mexican food is one of those areas," said Kristyn Sorensen, a spokeswoman for the Lansing-based Michigan Restaurant Association. "Keeping in mind, a lot of consumers are becoming more and more health conscious. This could be trickling into the industry."
Don Pablo's has introduced a line of low-carb lettuce wrap fajitas to appease dieters.
Chevys terminated the leases on the Rio Bravo restaurants in Michigan. The Troy store on Big Beaver Road opened in October 1998. The Bloomfield Township store on Telegraph Road opened in March 2000 and the Auburn Hills store on Squirrel Road opened in March 1998.
Hersh did not provide specific dates of closings or a number of store employees impacted, except to say the business tried to transfer as many employees as possible.
Prior to the bankruptcy filing, Chevys was supposed to be purchased by Consolidated Restaurant Operations, but the Dallas-based chain dropped the acquisition plans in September.
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