Don't Buy Metromedia Restaurant Group Gift Cards

Until Metromedia Restaurant Group clarifies what they are going to do for people who bought Bennigan's and Steak and Ale gift cards, don't buy cards from their franchised Bennigan's or from their other chains still functioning. They are:

Bonanza Steakhouse
Ponderosa Steakhouse
29° Tavern
Plano Tavern
Southlake Tavern

This article from the DFW Star-Telegram states at least one franchised Bennigan's is not accepting gift cards:
http://www.star-telegram.com/business/story/796813.html

But, MRG has one unified gift card operation. The home page tells you the site is undergoing software upgrades, but this page is still working:
http://www.mrgcards.com/faqs.htm
If you call the balance inquiry telephone number, they don't tell you the Steak and Ale chain is toast.

It has become obvious MRG set up a bunch of Inc's, LP's, PLLC's, LLC's, Partnerships, Subsidiaries, Companies, off-shore dodge's, and who knows what else so if the banks foreclose one operation they won't take the whole thing down. Here is how MRG is still able to get royalties from Bennigan's franchisees:

"PLANO, Texas, July 29, 2008 /PRNewswire via COMTEX/ -- Bennigan's Franchising Company, L.P. and Steak & Ale Franchising Company, L.P., the owners of the Bennigan's and Steak & Ale trademarks and franchise agreements, were not part of the Chapter 7 filing made by its parent company, S&A Restaurant Corp., today."

You can read the entire text of this press release on marketwatch.com. I can't get a direct link to work.

Who knows if the gift card operation is another LP? My advice is to use up those gift cards you got for Bonanza and Ponderosa ASAP. I doubt I will get anything for my Steak and Ale gift card. I am not even going to waste a stamp reporting it for all they will do is use it to pump up the number of creditors they have.

I always use gift cards within a week. The law now says they cannot have an expiration date which does you a lot of good if it's you're turned down.

The same thing happened recently at The Sharper Image where, for months they were open but not taking gift cards. They collected the money and then hide behind some bankruptsy law to give merchandise already paid for ?

If that happened to me, I would commit my very first grab 'n go.

If I got caught, I will bet the media attention would have the D.A. throw it out and me getting an extra worthless gift card.

Some other sites have reported people are now trying to sell various MRG gift cards on ebay.

I believe I also saw some of MRG gift cards for sale in retail establishments like supermarkets.

Something people often don't think about after a bankruptcy.

UPDATE
As of this writing, all of the MRG websites are down, including Bennigans, Bonanza, Ponderosa, SteakAndAle, and the one listed on the back of the cards, www.metrogroup.com.

The South Bend, Indiana Tribune has been following this story, and will follow up if and when Metromedia returns The Trib's phone calls:
http://www.southbendtribune.com/apps/pbcs.dll/article?AID=/20080801/Biz/619084768/1013/Biz

I think this will be one of the most complicated gift card redemption scenarios ever. In the case of MMG cards that just have Steak and Ale's name on them, published reports indicate the money went to the chapter 7 S&A Restaurant Corp. If you call the MMG umbrella customer service telephone number 800-727-8355, option 2, they tell you if you had a just Bennigan's gift card or just Steak and Ale gift card, file a claim with the bankruptcy court. If you want to talk about Ponderosa or Bonanza, they tell you to leave a message.

What really becomes interesting is the case of the Metromedia Restaurant Group gift cards that they came out with a few years ago. The one I have has the names of five restaurants on it, Bennigan's, Bonanza, Ponderosa, Steak and Ale, and The Plano Tavern. This sheet from the company that set the card up for MRG, Paytronix, explains some of the financial details:
http://www.paytronix.com/easy/Paytronix_MRG_final.pdf
Note that the sheet said that franchisees were allowed to deposit proceeds from their own gift card sales in their own bank account with withdrawals made upon card redemptions.

Apparently the only way to find out if any given still-open Bennigan's, Bonanza, or Ponderosa will accept these multi-branded MRG cards is to ask the restaurant directly. I spoke with a friend of mine who inquired at a Ponderosa, and he was told they are not taking the multi-branded MRG gift cards right now if they were bought at a Bennigan's etc, but don't know if that will change in the future.

I don't know what is happening in cases where a person can prove he or she bought that card at the same open restaurant. Especially if that person is a 350 pound hungry steamfitter who just got off working overtime and only has $3.60 cash and a $50 MRG gift card on him

I can see State Attorney Generals getting involved with this issue, just as they did with The Sharper Image case. Where did the money go? To bankrupt S&A Restuarant Corp (Bennigan's, Steak and Ale?) To still-operational Metromedia Steakhouses Co., LP (Bonanza, Ponderosa?) To a bank escrow account? To yet another firm owned by MRG?

Meanwhile, online gift card sites are still advertising the MRG multibrand gift cards for sale. Don't know if they will fulfill orders for it, however. Also, a lot of people are selling various MRG gift cards on ebay right now.

I think if there are any gift cards left in the store-and the restaurants are still open around here-I will buy them for my crazy in-laws..

Anne
They would make a great "Door-Prize" for a future Roadfood Meeting !!

IMO, gift cards should have priority, right up there with wages in a bankruptcy. At my own business, gift certificate money (we don't do cards, as such) goes into an escrow act, and is not used in the operation of our business. If I were forced into bankruptcy, my customers would be protected. It should be the law.

quote:

Originally posted by Guilty One

I always use gift cards within a week. The law now says they cannot have an expiration date which does you a lot of good if it's you're turned down.

The same thing happened recently at The Sharper Image where, for months they were open but not taking gift cards. They collected the money and then hide behind some bankruptsy law to give merchandise already paid for ?

If that happened to me, I would commit my very first grab 'n go.

If I got caught, I will bet the media attention would have the D.A. throw it out and me getting an extra worthless gift card.

I have an Ionic Breeze air filter from those guys. I like it, but they die after a year or so. They replaced 2 under warranty. When the 3rd died, my warranty was almost over, but they sold me a service plan to renew my coverage. (they are now warrantied for 90 days) If it dies again, I expect that my service plan will be worthless. It seems to be built better. I hope it lasts.

Al-I would never do that to you!!!But would be funny...........

tmiles,
Funny, I was thinking about the need for gift card consumer protection laws today as well. If the government can regulate banks, stock and bond sales, etc. they should also regulate sales of gift cards and certificates. With so may of these casual restaurant chains being taken private, the consumer no longer has any idea how financially stable the restaurant operator is.

I've taken my gift card purchase situation to the credit card company. I have to believe there were customers buying meals (and gift cards) right up until they closed. Hopefully the credit card processors and/or banks held back some payments to Metromedia Group to settle future claims like these.

A current discussion on budget steakhouse chains brought up a comment about Ponderosa and Bonanza steakhouses. When I went to their two websites, I see they are still promoting sales of gift cards at the restaurants (although I can't verify at this hour if they will actually sell you one.) Nor do I know which of John Kluge's gazillion separate corporations is issuing them. Would you buy from a Chapter 11?
http://www.businesswire.com/news/home/20081022005937/en