eli5: What does it mean when they say “this company grew too big too quickly”?
In: Economics
Usually it means that the company tried to open too many locations, by taking on a mountain of debt, and ended up going bankrupt or close to it and closing down a lot of location.
Great example of this in recent times is Quiznos. They opened up sandwich shops everywhere near where I live. They borrowed a ton of money to do this. In the end, most individual stores were profitable, but not enough that the parent company could make the loan payments. So they had to file for bankruptcy.
Currently there are only about 300 left, when at the peak there was close to 5000.
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