Nathan’s Not to Be Famous Much Longer at HD

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Sep 23, 2002
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Home Depot has notified Nathan’s Famous that it will not be renewing its licensing agreements for the restaurant chain to operate restaurants in eight HD locations. The eight Nathan’s in Home Depot stores will cease operating as of February 20, 2003.


Based on the numbers released, Home Depot consumers had taken to the concept but obviously the chain did not. Sales at the eight stores were almost 15 percent of the chain’s total. Nathan’s Famous operates nearly 1,500 locations in the continental U.S., Puerto Rico, Mexico and Canada.


Moderator’s Comment: What do you think is behind the
Nathan’s decision? Will every Home Depot eventually have a food service operation
on-site?


Nathan’s management can not be too happy with this announcement.
Although Nathan’s stock price actually was up on Friday, we can not see how
locations representing roughly half a percentage point of locations and generating
almost 15% of sales can be seen as a positive. Some other food service operator
(Dunkin’ Donuts, perhaps) must have made HD a better offer to operate in the
same space. [George
Anderson – Moderator
]

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