[Shortest way I could think of to phrase my question. Could apply to any other location which would appear to be in a profitable spot, but it just sits there unused]
I used to eat at them about 10 years ago off and on. Around the turn of the century all the ones (that I am aware of-3 or so) in my area (Jacksonville Florida) went out of business. They’ve been sitting vacant ever since, but just about every other fast food place which goes under like that almost always gets a new tenant within a fortnight. For ex. a nearby Boston Market just closed, McDonalds moved in and completely rebuilt the place from the ground up in the span of two weeks, and reopened. Someone occasionally seems to go out there and cut the weeds, so it isn’t like it’s been completely abandoned and forgotten.
So why would the landlord (in general) just sit on the property when it could be making money by renting it to Burger King or somebody?
My guess is that either the rent they are asking for is too high, or the location is not nearly desireable as you think based on the clientele they would want to bring in. If there are tons of competitors nearby, that might also limit the amount of business they might get.
If I’m not mistaken, McDonald’s owns Boston Market. They mainly bought them because of their prime locations, which McD’s thought might be worth something to them some day. So, when one closes, it’s great for a new McD’s. But, they wouldn’t want to sell the prime location to a competitor.
I don’t know who owned the Miami Subs. That might help explain something.
Nathan’s Hot Dogs bought the Miami Sub chain in 1999. (They also own Kenny Rogers’s Roaster). Over the years, they closed the stores that were under performing. Most of the sub shops evidently made them lots of money.
Nathan’s sold the sub chain in June, 2007. I couldn’t find out if Nathan’s retained the land where former shops had existed. They may have, and would not want to least them if they thought they might open a Kenny Rogers or a Nathan’s. Or, for that matter, another chain that they might start. Sometimes the rent from a competitor isn’t worth what owning the rights to the location might be.
I’m astounded that Kenny Roger’s Roaster is a real restaurant chain? I thought that that was just a bit on Seinfeld.
And… Nathan’s is a chain too? I always thought it was just a regional brand of hot dog.
As for Miami Subs, it should be fairly obvious why I’d not have heard of that one. I do know about a lot of other chains not local to me. Whataburger, In-N-Out, Taco Cabana, and tonnes more.
I"m wrong. Sun Capital Partners is the new owner, as of about a year ago. At that time, McDonald’s also spun off Chipotle Mexican Restaurants.
But, I"m pretty sure my original hypothesis is correct. Owners of the land upon which former chains once stood are reluctant to give up the land. It’s all about location, location, location. Paltry rent is insignificant.
Another possibility: a sub shop has very few kitchen/back-room requirements. The local Subway buys most of their produce pre-bagged and prepares a minimal amount of fresh ingredients.
I think this is why you often see Subways going up in small storefronts where a Mickey D’s might not have enough room.
So perhaps the vacant sub shops just aren’t suitable for other restaurants. Building and fire codes might not permit them to be used as full-scale restaurants with kitchens.
Another possibility:
If Miami Subs had signed multi year leases, someone could still be paying those leases.
If there is a glut of available retail space, the last stores that a landlord is going to push
are the ones that are already being paid for. The landlord is going to be pushing harder
to rent out unpaying stores.
Through acquiring other companies, my employer ended up with 3 offices here. 2 sat empty, while we kept paying rent on them. We didn’t need the space, but we were locked into the leases.
While space might indeed be a factor in the business requirements, I don’t think codes would be an issues as all the Miami Subs I’ve been to had a full menu requiring some frying and cooking. (Not to mention that many had other types of eateries in the place as well with the same sort of full menu.)