Rice: Invest in Human Potential

Former Secretary of State Condoleezza Rice told attendees at this year’s National Restaurant Association Show that America’s success depends on its commitment to invest in human potential. Rice made her remarks at our May 20 Signature ‘18 event, saying that the greatest American ideal is the belief in human potential. It’s not where you come from, but where you’re going. “Democracy is only as strong as its weakest link and right now we have too many weak links,” she said. “Human potential means understanding that the United States of America isn’t held together by ethnicity, nationality or religion, but by an aspiration, a belief that it doesn’t matter where you came from. It matters where you are going. You can come from humble circumstances and do great things. That, for years, allowed people to come from all over the world, just to be a part of that promise.” She spoke of her admiration for her grandfather, who embodied this philosophy, and became the first member of her family to attend college. Rice attributes much of her success to his understanding that education holds the power to transform a person’s life and offers hope for a brighter future. He made sure to instill this belief into his children, which allowed generations of his family to realize their dreams. Her father became a university administrator and her aunt earned a Ph.D. in Victorian literature. Education is the key to the future. She went on to say that the greatest challenge confronting America has become the lack of quality K-12 education. “This is the greatest national security crisis,” she said. “If you are of means, you will move to a district where schools are good. Who’s really stuck in failing neighborhood schools? Poor kids. We’re creating two societies: one capable and one not. For a country held together by the belief that it doesn’t matter where you came from, it matters where you’re going, that will be the end of us. America has a human potential problem. We can’t have any more third-graders who can’t read.” Rice continued by applauding the restaurant industry’s efforts to provide apprenticeships and training to help employees become job-ready. “We can’t have any more 18-year-olds without skills,” she said. “Not everyone has to go to college, but everyone needs a job. I know your industry provides skills for our kids. I hope there are more efforts to let 18-, 19-, or 20-year-olds get training so they can enter the workforce prepared and able to have what we all know work brings ‑‑ a sense of self-worth, not just a paycheck. And we can’t have anymore 35-year-olds who can’t be retrained either, because job skills these days don’t remain stagnant. You must keep training and retraining.” Help develop human potential. She implored Show guests to think about retraining employees before automating them out of their jobs. It’s not just industrialization or globalization that has caused people to drop out of the job market, she said. Automation plays a big role, too. “Before you automate people out of your workforce, think about retraining them. We have a responsibility to develop human potential.” America is best at mobilizing human potential, she added. “’We The People’ is an inclusive concept,” she said. “If we do this, the country will be confident again.” – Source: The National Restaurant Association.

Clarion UX Foodservice Events Announce Key Buyer Program Investment to Enhance Exhibitor ROI

Clarion UX has announced the implementation of two new key buyer programs across their restaurant and foodservice event portfolio designed to enhance exhibitor ROI in a quantifiable way. The programs will be driven by Karen Gillis, Key Accounts Manager, for the Western Foodservice & Hospitality Expo, Florida Restaurant & Lodging Show, International Restaurant & Foodservice Show of New York and each show’s co-located Healthy Food Expo. “We are committed to providing our key operators, foodservice professionals and retailers with white glove service and are confident in Karen’s abilities to bring special treatment to these individuals who take time out of their busy schedules to attend our events, said Tom Loughran, vice president for the Clarion UX food and beverage event portfolio.

“Two programs will drive need-based appointments to our exhibiting customers, and provide an example of our strategic priority to add value for our customers.” The first program, called “Five Star Club” is available to pre-qualified buyers and up to 300 participating exhibitors at no charge.  This program has a buyer focus on micro-chains, medium volume independents, healthcare and education foodservice as well as partner associations.  These Five Star Buyers select exhibitors and schedule a specific day and time to meet one-to-one with the exhibitor in their booth. While there is no guarantee an exhibitor will receive appointments, the program is expected to generate over 1,000 meetings.  And buyers who complete 5 appointments are entered into a drawing for one of three $1,000 cash prizes. The enhanced program, called “MATCH!” is available to only 30 exhibitors and 35 hand-selected key buyers.  This curated buyer list will be comprised of multi-unit operators with under 16 locations, restaurant groups and high-volume independents with annual gross revenue of over $3 Million. The MATCH! hosted buyer program will include hotel accommodations along with additional at-show amenities.  Appointments will be scheduled using an innovative matching software based upon mutual selling and sourcing needs.

In addition, stated Loughran, “the addition of Karen to the event team, coupled with the significant investment into the buyer programs, allows us to create a platform to ensure the specific buyers – whether from restaurant, foodservice or retail operations – are actively participating in the show”. To be able to bring this investment allows our mission to align with that of the exhibitors, which is to provide sales leads and measurable ROI results. “I look forward to being the liaison with our VIP attendees and providing them personal customer service to enhance their experience at these leading industry trade events.  I invite those exhibitors interested in participating in the programs, or in nominating buyers, to contact me directly,” added Karen Gillis, who can be reached at (203) 202-3825 or at kgillis@urban-expo.com. Upcoming Clarion UX’s Foodservice Shows; Western Foodservice & Hospitality Expo, co-located with the Healthy Food Expo West and Coffee Fest, sponsored by the California Restaurant Association, will be held August 19-21, 2018 at the Los Angeles Convention Center; Florida Restaurant & Lodging Show, co-located with the Healthy Food Expo Florida and Coffee Fest Marketplace, sponsored by the Florida Restaurant & Lodging Association, will be held September 6-8, 2018 at the Orange County Convention Center, and the International Restaurant & Foodservice Show of New York, co-located with Healthy Food Expo New York and Coffee Fest, sponsored by the New York State Restaurant Association, will be held March 3-5, 2019 – Jacob Javits Center. – Source: The Shows/Clarion UX.

Pizza Inn’s Resurgence Hits High Gear

The year was 1958. Eisenhower was president, the hula-hoop was introduced, and NASA arrived on the scene and the first Pizza Inn opened. While Pizza Inn may not have changed the world like NASA, the restaurant, which featured high-quality pizza made from three types of homemade dough and pitchers of beer, left an impression. That same impression is bringing customers back to the restaurant decades later.

Headquartered in the Dallas Forth Worth area, 152 Pizza Inn restaurants can be found throughout the Southeast and Southcentral part of the U.S., with another 60 outside of the country. Yet at one point, there were 500 Pizza Inns across 20-plus states. What enabled Pizza Inn to balloon to such large numbers, and what caused the restaurant to constrict? Pizza Inn, unlike many of its competitors, focuses on the buffet concept. Because of this, it needs more square feet than the typical pizza joint. Bob Bafundo, president of Pizza Inn, notes the standard Pizza Inn is about 4,000 square feet. The larger size of the restaurant brings about certain challenges, including potentially higher occupancy costs as well as real estate availability. At its founding and through the early years, Pizza Inn focused on smaller markets in the South. For many of these areas, Pizza Inn was the only game in town. However, as the franchise sought growth, it began moving into major metros. There it faced increased competition from brands that typically had multiple units in the area compared to just one Pizza Inn. During this period, Bafundo says, “Some had a sense that Pizza Inn was more about franchising and not doing a good job of operating at a consistently high level.” Eventually, the number of Pizza Inns shrank, which led to some soul searching for the brand. “We had to come to grips with who we are,” Bafundo says. He points to a 2016 study, completed for Pizza Inn by an outside agency, as key to helping the restaurant understand its purpose and give it direction moving forward. “People come to Pizza Inn because it feels like family. We know people on a first-name basis and treat them well,” Bafundo says. Scott Crane, CEO of the Rave Restaurant Group, parent of Pizza Inn and fast casual Pie Five, says, “The research determined that Pizza Inn had a powerful heritage. People felt a nostalgia for the restaurant because they grew up with it, and it was part of their hometown.”

Pizza Inn’s small-town vibe was a powerful differentiator. The information also helped Pizza Inn fine-tune its operational focus and growth map. Pizza Inn is now keyed on the dine-in experience and out-executing its buffet peers. While the margins can be greater in other segments, especially in regards to fast casual and takeout/delivery-focused concepts, it’s a crowded space. This has left a void in the experience-driven, buffet arena, and that is the universe Pizza Inn wants to own. As to where to locate the restaurants, Bafundo says that has become clear as well. He says the sweet spot for Pizza Inn are towns of 30,000–100,000 people. They are focusing on 400 such markets as part of their County Seat Strategy in the areas of the country noted above.

In small towns, labor and rent are cheaper, and there’s less pizza competition to battle with. Plus, the research provided endless anecdotes from customers centering on Pizza Inn and its nostalgic pull. “They all ended with, ‘When can you bring one back to my home town?'” Bafundo says. The strategy: develop first in markets where the brand is best known. Bring it back home to markets where Pizza Inn can return and redevelop. “We’re aggressively going in and trying to get those markets going. We’re resurrecting Pizza Inn.” — Bob Bafundo, Pizza Inn president. The strategy is already bearing fruit. “For the first time in a long time, existing franchisees are excited. They’re remodeling and putting resources into their restaurants as well as adding new units in their development areas,” Crane says. “We are also seeing new franchisees developing and investing in the brand and have designed the first new prototype in a long time.” Sales are reflecting the success. Pizza Inn, despite adverse weather, reported same-store sales gains of 2.3 percent in the third quarter, making it five consecutive periods of positive growth. Crane says initiatives, such as the chain’s all-day buffet and an improved online ordering experience continue to drive top-line growth. Crane added in a recent release that Pizza Inn “is experiencing a resurgence in new development.” “We have a solid pipeline of new locations along with a refreshing of existing restaurants,” he said. The franchisees are receiving renewed support from the chain, which introduced a couple of fresh strategies to grow the brand. Because of the belief that Texas was once the core of Pizza Inn’s success, the chain recently unveiled the Take Back Texas initiative. “We’re aggressively going in and trying to get those markets going. We’re resurrecting Pizza Inn,” Bafundo says.

PIE or PIE by Pizza Inn Express is another initiative the franchise established. The kiosk format can be found at interstate facilities, convenience stores, malls, airports, and other non-traditional venues that can’t support a buffet. “We want to get the product across to new markets and build brand awareness,” Crane says. The first is expected to open later this spring in the Fort Lauderdale Airport. To be successful, Pizza Inn is focused on providing great value and variety. At any one time, you’ll find 45 different items available at the buffet. “With all the variety, parents and kids have the ability to get the exact thing they want. It’s easy to make everyone happy,” Bafundo says. With this level of satisfaction, the owners of Pizza Inn hope customers will visit regularly. Plus, there’s the people side. After all, Pizza Inn is focused on being “America’s Hometown Pizza Place.” They’re in small towns, creating personal experiences for their guests, and providing service that make customers feel like family. In this way, Pizza Inn is going through a revival and doing so as customers root for them to come back home. – Source: fsrmagazine.com.

Pret A Manger Sold for $2 Billion to Germany’s Deal-Hungry Reimann Family

British sandwich and coffee shop chain Pret A Manger was sold for $2 billion to an investment fund of Germany’s billionaire Reimann family, as part of a global acquisition spree aimed at challenging Nestle in the coffee sector. The sale values Pret at more than 1.5 billion pounds ($2 billion) including debt and gives Pret founders Julian Metcalfe and Sinclair Beecham a final exit from their remaining investment in the chain they founded 32 years ago. It also gives a windfall to Pret’s 12,000 staff as Chief Executive Clive Schlee said via Twitter they would each get a 1,000 pound bonus once the deal completes.

Pret, whose organic coffee and upmarket sandwiches such as crayfish and rocket proved popular enough to propel its growth from a single shop in London to a 530-strong global chain, generated revenue of 879 million pounds last year. For Luxembourg-based purchaser JAB Holdings, the acquisition of a majority stake in Pret from private equity firm Bridgepoint and other minority investors is the latest in a multi-billion dollar series of takeovers designed to expand its coffee and beverage empire. JAB has already bought Keurig Green Mountain and Peet’s Coffee & Tea, and Keurig subsequently struck a deal worth more than $21 billion to combine with soda maker Dr. Pepper Snapple Group. Bakery deals. JAB, whose owners the publicity-shy Reimann family are descended from Ludwig Reimann, a chemist who in the 19th century joined the chemicals business founded by Johann Adam Benckiser and married into Benckiser’s family, has also made a string of deals including for bakery chains Au Bon Pain and Panera Bread, as well as Krispy Kreme. Nestle meanwhile recently boosted its position as the world’s biggest coffee company with a $7.15 billion licensing deal with Starbucks Corp. Bridgepoint bought a majority stake in Pret a decade ago for about 345 million pounds and had been examining an exit via a New York listing before opting to sell to JAB. The sale price represents a multiple of 15 times Pret’s 2017 earnings before interest, taxes, depreciation and amortization of more than 100 million pounds, according to a person with knowledge of the matter. “Management’s proven track record and commitment to customer service, investment in innovation and approach to freshly prepared food position Pret well as it capitalises on evolving consumer taste and lifestyle preferences,” said JAB Chief Executive Olivier Goudet. The sale to the Reimann family’s firm was first reported by the Financial Times. The Pret sale comes a month after Whitbread said it would demerge its Costa coffee chain within two years, a lengthy timeframe that stoked speculation Costa could attract a bidder which some bankers speculated could be JAB. – Source: Reuters.

Customer Interaction Could Inspire New Food Products for Schwan’s Co. 

Schwan’s Co. has found its sweet spot in the North Loop of Minneapolis. The Marshall-based company, known for frozen pizzas and yellow-green delivery trucks, will open its Edwards Dessert Kitchen in the renovated Lowry-Morrison building, on Washington Avenue and 2nd Avenue N., this summer. The eatery is the first retail concept for the company, which will also use it as a test kitchen to explore recipes and products.

“Unapologetic indulgence is really what we are about here,” Stacey Fowler, Schwan’s senior vice president of product innovation, said in an interview. “Immersing ourselves and just really having that day-to-day interaction with customer feedback will help our thinking and make us more well-rounded,” she said. Visitors won’t find any Schwan’s branded products, like its assortment of Edwards pies, at the shop. Inside the store, the only clue about the company’s connection will likely be the Edwards cursive E that will be on staff shirts. “We want to make sure that this stays pure and becomes a source of inspiration to us,” Fowler said. What will be on the menu, dreamed up by general manager and executive pastry chef Christina Kaelberer, will be rich dishes such as coconut cream pie puffs filled with mango curd, passion fruit chocolate mousse, and curried scotcheroos meant to be a modern throwback to the tasty dessert bars served in Minnesota church basements.

Despite the elaborate recipes, Kaelberer, who grew up in St. Louis Park before she went on to work in restaurants across the country, said she wants the dessert kitchen to feel inclusive. “We want everyone to feel like they belong here,” she said. There will also be ice cream, a handful of entree items, coffee from St. Paul-based True Stone Coffee Roasters and cocktails developed with the help of local Tattersall Distilling. The three-story Lowry and Morrison building, which is one of the oldest surviving structures in the warehouse historic district, had been boarded up and derelict for years. The brick and timber building, which is about 20,000 square feet including the basement, will also be home to InVision Optical and recently signed landscape firm Coen + Partners, said JoAnna Hicks, co-founder of the Element commercial real estate company which is responsible for leasing. Kaelberer, who is part of the Schwan’s Chef Collective, said the search for the location had taken about a year. “We kept passing by the space,” she said. Last week, the floors were sanded in the shop. While new windows and tile have been installed, a lot of the building’s existing architecture has remained. Brick arches that split the space will now separate the daytime desserts counter from the bar. One of the brick walls is also left exposed. Minneapolis-based Shea Inc. designed the space to have modern furniture, including a large communal table and jewel-toned lounge seating. – Source: Star Tribune.

Independent Restaurants Increase Spending, Despite Declining Numbers

Independent restaurants are predicted to spend about $39 billion with foodservice manufacturers and broadline distributors in 2018, despite a decline in the number of restaurants across the U.S., research firm The NPD Group said. Earlier this year, NPD said the number of independent restaurants in the U.S. dropped 3 percent, compared with a year ago, according to the twice-annual ReCount restaurant census. That was a decrease of 10,952 units. But the 346,105 independent restaurants that remained open as of Sept. 30, 2017, represented more than half of the 647,288 commercial restaurant units overall in the U.S. NPD defines “independent” restaurants as having one to two units. In the first quarter this year, traffic at independent restaurants declined 1 percent, and visits to restaurant chains were flat. Still, consumers visited restaurants 60.5 billion times in the year ending in March, and 13 billion of those visits were made to independent restaurants, NPD said. Although the count appears gloomy, a sign of health is that independent restaurants are increasing their spending, NPD noted. Representing one-third of broadline foodservice distribution dollars, independent operators increased their purchases with leading broadline distributors by 2 percent, and cases ordered by 2 percent, in the first quarter, compared with a year ago. “Independent restaurants operators do face different challenges than chains, since they have less resources and capital to withstand tougher times, but there are many that are thriving and contributing to the overall vibrancy of the U.S. foodservice market,” said Warren Solochek, NPD’s senior vice president, industry relations, in a statement. In fall 2017, there were 301,183 chain restaurant units in the U.S., an increase of 982 units. Quick-service restaurants declined by 1 percent, to 353,121 units. Full-service restaurants — including casual, family and fine dining — declined 2 percent, to 294,167 units. However, growth continued in the fast-casual segment. Fast-casual chains, which fall under the quick-service category, increased units by 4 percent, to a total of 25,118, NPD said. – Source: NRN.

Bob Evans Farms Hosts Veteran Contest

The second annual “Our Farm Salutes” grant-giving program, “Heroes to CEOs,” will open for applications on May 22. The contest runs through July 29. Each of the three veteran-owned businesses will be awarded grants of $25,000 as well as an all-expenses-paid, three-day trip for two to New York City for a half-day mentoring session with businessman Daymond John.

“As we saw last year with our amazing winners, veterans have innovative ideas but sometimes have trouble getting started,” said Mike Townsley, CEO and president, Bob Evans Farms, in a release. “Learning how to run a business and securing the required financing can be a challenge. We’re beyond proud of what veterans accomplish.” In addition to receiving the grant last year, the 2017 Heroes to CEOs winners are being showcased on Bob Evans Farms product packaging throughout the summer. Each winner is highlighted on the back of the product packaging, including a photo and brief description of their business. Bob Evans believes the grant contest is the largest veterans-only business grant and is open to veterans of all U.S. military branches who own an independent registered business or have a plan for an independent business in the United States or the District of Columbia. Nonprofits are also eligible for the grant.

In order to have their business considered, veteran entrepreneurs are required to submit a plan demonstrating a solid business concept, multimedia assets in a video format, and a personal essay about their passion for their business. Veterans can learn more about the program and register at www.ourfarmsalutes.com. A panel of judges will score each eligible entry based on reason, presentation, feasibility, opportunity and future success of the business or plan submitted. The top 10 highest-scoring entrants will be deemed finalists, who will then be judged by a panel of celebrity judges — including last year’s grant winners — who will score the finalists’ entries based on the same criteria. Winners will be announced on Sept. 5 and invited to an awards ceremony on Sept. 6 at Blueprint in New York City. Bob Evans Farms launched the Our Farm Salutes program in 2016 as a commitment to support America’s service members, veterans and their families through awareness, donations, strategic partnerships, grant opportunities and volunteerism. – Source: Marketing Daily.

Bravo Brio Rejects Macaroni Grill Bid

Bravo Brio Restaurant Group Inc. has rejected an unsolicited purchase bid by Romano’s Macaroni Grill and will proceed with a sale deal announced earlier with Spice Private Equity Ltd., the company said. The Columbus, Ohio-based parent to Bravo! Cucina Italiana and Brio Tuscan Grille said its board determined that Macaroni Grill’s offer on May 9 of $4.78 per share was not superior to the Spice Private Equity’s deal on March 7 of $4.05 per share. “Macaroni Grill’s unsolicited proposal relies on significant third-party financing (both debt and equity), including by Raven Capital Management LLC, which was a prior participant in the company’s comprehensive review of strategic alternatives that led to BBRG’s entry into a definitive merger agreement,” the company said in a statement. The Spice Private Equity deal is an all-cash transaction. The company said it was on track to close the sale, valued at about $100 million, to the affiliate of Spice Private Equity, a Zug, Switzerland-based division of GP Investments Ltd. The company has scheduled a special meeting of shareholders on May 22 to vote on the Spice Private Equity deal. Bravo Brio had been exploring strategic options since last February amid same-store sales and profit declines. The company’s largest shareholder, TAC Capital LLC, had pressed for changes at the company. Denver-based Macaroni Grill emerged from Chapter 11 bankruptcy protection on Feb. 15, after renegotiating lease terms and vender contracts and securing $13.5 million in new capital. As of February, Macaroni Grill had 86 company-owned locations in 22 states, plus 21 franchised locations in the U.S. and seven countries. Bravo Brio said its board had “provided Macaroni Grill with ample time and opportunity to produce an actionable proposal with fully committed financing, and Macaroni Grill has failed to do so.” Bravo Brio went public in October 2010 in an initial public offering that raised $140 million. The company had 83 restaurants at the time. It currently owns and operates 110 locations in 32 states. – Source: Bravo Brio Restaurant Group Inc.

Cava Group is Raising Tens of Millions of Dollars . . . . Again!

Cava Group Inc. notified the Securities and Exchange Commission Thursday of a $35 million equity offering. Of that, it’s already raised $33,461,206 from 10 investors, according to the filing. As of last September, Cava had filed documents that indicated it raised a total of $96 million to date, the most recent being a $34.9 million raise in March 2017. That last infusion of cash carried its restaurants into new markets, including Charlotte, North Carolina; Austin, Texas; and Boston. The company also has locations in the Los Angeles area and the New York tri-state area. Previous funding rounds included cotributions from local funds Revolution Growth of D.C. and SWaN & Legend Venture Partners of Leesburg, along with New York’s The Invus Group. The latest SEC filing does not show details about investors in this current round, though it does list the following among Cava’s directors: David Strasser, managing director of SWaN & Legend; Philippe Bourguignon, vice chairman of Revolution Places; Karen Kochevar, chair of Greyston Foundation and former CFO of Union Square Hospitality Group, operator of Shake Shack and Gramercy Tavern; and Ronald Shaich founder, chairman and former CEO of Panera Bread. We’ve reached out to Cava for more information on the raise and will update this post when we learn more. Venture funding has been flowing into food businesses for the past few years, especially fast-casual, tech-savvy restaurant businesses. D.C. pizza chain &pizza raised $25 million in late 2016. Last time we checked, Cava, which offers customizable and signature Greek-inspired salads, bowls and other dishes, was on pace to add 20 new locations in 2018. The company also has a substantial packaged foods business, making its dips and spreads for sale in grocery stores in two facilities on the East and West coasts. The company, led by CEO Brett Schulman won restauranteur of the year at the 2017 RAMMY awards, the local restaurant awards from the Restaurant Association Metropolitan Washington. –Source: Washington Business Journal

Hy-Vee CEO Talks Expansion of Wahlburgers and Grocery Stores

After months of anticipation, Hy-Vee opens its first Wahlburgers restaurant on Tuesday, and another 25 will quickly follow over the next three years as the grocery store chain revs up its franchise partnership with Wahlberg brothers Mark, Donnie and Paul. Sitting in one of the booths in the new restaurant in Mall of America last week, Hy-Vee chief executive Randy Edeker said all 26 restaurants are expected to be open by the end of 2021 in the eight Midwestern states where it has Hy-Vee stores, including four in the Twin Cities. “We have a site we’re looking at in Maple Grove, but we haven’t chosen any sites beyond that,” said Edeker. After putting five Twin Cities Hy-Vee stores on hold last year, Edeker said, “there are five stores in the Twin Cities that we’re considering for next year’s budget.” One of those stores will be in Maple Grove, according to Edeker, but Hy-Vee officials would not say whether it is the location at Highway 101 and Bass Lake Road or at Highway 610 and Maple Grove Parkway, both of which have already been approved for Hy-Vee stores.

Why is a West Des Moines-based supermarket chain going into business with two stars in the entertainment industry and their chef sibling? Hy-Vee’s chief retail operator Jeremy Gosch noticed in Men’s Fitness magazine last year that Mark Wahlberg was coming out with a line of sports nutrition products called Performance Inspired. Eventually, Hy-Vee started selling the line exclusively in its eight-state markets. “We did a big launch with them, and we noticed whenever Mark came out to promote his nutrition products we’d get a lot of requests on Twitter and Facebook about Wahlburgers,” Edeker said. When Mark Wahlberg asked Hy-Vee early on to consider a partnership in building a Wahlburgers, Edeker said his initial response was a firm no. “But I promised him I’d consider it. Then we researched it and ate at a couple of them and finally asked him how the partnership would work,” said Edeker. None of the restaurants will be in Hy-Vee stores, but the eight Twin Cities’ Hy-Vees will start selling several Wahlburgers’ entrees and drinks in the fall at their Market Grille restaurants. The Mall of America restaurant, on the north side of the second floor near Zara, will celebrate its grand opening May 31 with an appearance by the three brothers in the mall rotunda at 6 p.m. In addition to its burgers, the restaurant also will have a full-service bar and be able to seat 200 guests. Nearly all sandwiches and salads are under $10. More Hy-Vees coming, too. The opening for the Robbinsdale Hy-Vee store has now been moved up to late summer and construction in Spring Lake Park and Columbia Heights will begin later this year. Hy-Vee did not provide any further details on proposed stores in Farmington and Chaska. –Source: Star Tribune.

This Entrepreneur Borrowed $125,000 as a Teen, Then Used It to Build the $1 Billion Jersey Mike’s Brand

On a cold, clear night in March 1975, Peter Cancro knocked on his high school football coach’s front door in Point Pleasant Beach, N.J. It was just after 9 p.m. on a Sunday, but Cancro felt this couldn’t wait. He had to see Rod Smith. Smith’s wife, Janet, opened the door and ushered Cancro into the living room, where the coach was seated in his favorite armchair. When Smith had heard his quarterback was coming over to talk on a Sunday, he thought Cancro must be in trouble. But Smith reserved judgment and simply listened. Cancro explained he’d missed all his classes the past week because Mike’s Subs, a local sandwich shop where he’d worked for the past four years, was for sale for $125,000. Cancro wanted to be the one to buy it. Another buyer was ready to sign for the sub shop, Cancro explained fervently, and there was no time to lose. He opened a folder and laid out the business’s gross profits and earnings potential. After looking over the details, Smith, who was also a banker, sat back and looked his quarterback in the eye. “I think I can do something,” he said. Smith loaned Cancro $125,000 with a seven-year payback plan to win out over the other buyers’ offers. Cancro left his coach’s house feeling like he couldn’t fail, and he kept his plan mostly to himself. The deal closed on March 31, 1975 at 17, Cancro was officially a business owner.

Now, he’s the founder and CEO of Jersey Mike’s Subs after he expanded that single mom-and-pop location to close to 1,400 franchises nationwide with more than $1 billion in annual sales. Jersey Mike’s is measured as the fastest-growing sandwich chain in the U.S., with more than 18 percent growth in sales year over year, according to industry research from Technomic. (Jersey Mike’s closest competitor in sales growth, Firehouse, boosted annual sales at less than 5 percent.) Nevertheless, after Cancro’s buyout, there were bumps in the road that he had to learn to navigate on his own. Going all in on an instinct. His senior year of high school, Cancro had the title of class president, a winning smile and hair akin to 1970s-era David Cassidy. He also had aspirations to study law at the University of North Carolina at Chapel Hill. But after the Mike’s Subs deal closed, Cancro’s priorities shifted. Working at the sub shop every day meant he skipped a lot of class during the three months leading up to graduation. He had enough credits to graduate, but he hadn’t realized that full participation in gym class was a requirement. He secured a medical excuse for skipping and graduated with his class — after driving up in the Mike’s Subs van.

Cancro started working at Mike’s Subs in 1971, when he was 14 years old. His brother John, who had worked there the summer before, inadvertently got him the job after the boss asked about Cancro. “I’m not sure how bright he is, but I know he’ll work hard,” his brother said. Cancro was hired. For the next four summers and winters, he greeted customers and slapped together sandwiches part time. The winters were quiet, but business exploded during summertime, when Cancro said Point Pleasant Beach’s population quadrupled. People came for the beach, but evidently, some stayed for the subs. The lines regularly snaked out the door. In January 1975, the owners of Mike’s Subs, brothers Victor and Frank Merlo, put the shop on the market. Cancro’s mother told him one Sunday night — then, she blurted out, “Why don’t you buy it?” Cancro turned the corner and went up the stairs to bed. By the time he woke up Monday morning, he was a slave to instinct. He leapt out of bed, frantic, and skipped school to knock on doors and ask for loans. He had one contender who wanted to shore up the deal in exchange for a partnership, but Cancro didn’t want a partner. He wanted to do this on his own, and that’s why he sought out Rod Smith. Coming back from the brink of bankruptcy. In the decade after he bought his beloved sub shop, Cancro opened up a few more local stores and paid off his loan to Smith (with interest). He opened the company up to franchising in 1987 and changed the name to Jersey Mike’s so that no matter where locations ended up, they wouldn’t lose sight of their roots. Year after year, the number of locations rose. By 1991, there were 30 stores spanning the Jersey Shore, East Tennessee and Cincinnati. Then, the 1990 recession hit the company hard. “It still hasn’t left me,” Cancro says. The real estate market saw a deep decline. Banks were hit hard by the economic slump, which in turn made it difficult to borrow money. People couldn’t afford to take out loans, so Jersey Mike’s franchise growth slowed. And Cancro, who had invested almost all of his earnings into growing the business, had to lay off his six employees. He had no money in the bank to offset this kind of unforeseen event. Cancro was in shock. For the next few months, he headed into his office every morning. Alone in the space, he thought, “What am I going to do now?” “You show up every day, and that’s nine-tenths of success,” Cancro says. After heading into his office, he spent time with the owners of each Jersey Mike’s location to make sure everything was being done right. He used the lack of payroll obligations to pay the company’s bills, then directed his energy toward a huge marketing push: direct mail campaigns, door-to-door grassroots marketing one mile around each store, local radio appearances for store openings and slowly buying up billboard space. Cancro had been near the brink of bankruptcy, but he skirted it and hired his first employee back six months after the layoffs. Within a three-year period, Cancro was able to hire everyone back. He doesn’t necessarily regret his lack of reserves, because reinvesting earnings into the business led to more consistent growth, but he does see how having them could have helped offset the unexpected. Future plans for franchising.

After 43 years of work, Jersey Mike’s plans to double its number of locations over the next five years. The current initial investment for a store costs between about $193,000 and $660,000, and franchisees need to be able to prove a net worth of $300,000 and at least $100,000 in liquid cash. Jersey Mike’s currently has locations in 45 states and territories, and growth has been relatively slow but steady. “People always say, ‘Did you ever think you’d be here at this point in your life?’ and I say, ‘Honestly, I thought it would’ve been 15 years ago,'” he says. But Cancro does his best not to sweat the small stuff. If he were to change anything, he might spend more time planning for anything that could happen. “We were mostly reacting,” he says of the time leading up to the 1991 recession. As for Cancro’s advice for entrepreneurs? “Show up early, stay late, make sure you’re lookin’ sharp [and] you’ve got great energy … and be genuine. Be real. Be yourself. Don’t try and pretend,” he says. “People can see through that in a heartbeat.” Plus, tell everyone you can about your goals — and don’t let age deter you from them. “Age,” he says, “has nothing to do with it.” – Source: Entrepeneur.

Technology, Trends Redefining Future of Food Service

Popping up across the country are “virtual restaurants,” kitchen-only operations where food is prepared for delivery. The trend underscores a shift in consumer dining patterns; they crave chef-prepared dishes but are losing interest in eating at restaurants, according to several speakers at the National Restaurant Association Restaurant, Hotel-Motel Show. “The basic definition of what constitutes a restaurant in America today is changing,” said Hudson Riehle, senior vice-president of the research and knowledge group at the National Restaurant Association. “As the industry continues to move to a greater portion of off-premises sales, the business model of a traditional restaurant is going to change for a lot of these new entrants.”

Despite various challenges, restaurant industry sales last year increased 3.8% over the prior year to a record high of nearly $800 billion, Mr. Riehle said. Full-service restaurant sales climbed 3.5% to $263 billion, while quick-service restaurant sales grew 5.3% to $234 billion, he said. Takeout, delivery and food trucks are driving industry growth, Mr. Riehle noted. “Sixty-three per cent of all restaurant traffic is off-premises, and that proportion has increased as the years have passed,” he said, adding that the off-premises market “only becomes more important over the decade ahead.” Pressured by rising labor costs and high rates of turnover, operators are adopting new forms of technology to keep pace with demand for convenience. Most consumers agree technology in restaurants contributes to speedier service, improved order accuracy and a more engaging experience, Mr. Riehle said.

Cutting-edge concepts on display at the 2018 N.R.A. Show, held May 19-22 in Chicago, demonstrated the latest advancements in restaurant technology. Cali Group, a retail technology holding company, is testing various innovations at CaliBurger restaurant in Pasadena, Calif., including a burger-flipping robot and self-order kiosks with facial recognition capabilities. “Guests can walk up to a kiosk and quickly pull up their past ordering history and pay with their face,” said John Miller, founder of CaliBurger and Cali Group. “We think we’re the first in America to do that.” Bear Robotics, a Sunnyvale, Calif.-based company, unveiled an autonomous food runner that may be programmed to memorize a dining room layout. The machine is not intended to replace employees but to enhance customer service and interaction, said John Ha, founder and chief executive officer of Bear Robotics. “We cannot eliminate the human touch in a restaurant,” Mr. Ha said. “You don’t want to dine in a factory.” – Source: Food Business News.

Casual Dining vs. Fast Casual: How do they Stack up?

At the end of last year, we explored the future of fast casual and how, despite doom and gloom media coverage about the fast casual slump, things are looking optimistic for operators in the segment. Now we’re turning the spotlight to casual dining and how the segment is adapting to evolving consumer expectations. Outlook is positive for both segments. Casual dining operators haven’t seen as much of a hit from the away-from-home slump compared to fast casuals – according to Datassential’s SNAP!

Keynote Report: Casual Dining, half of operators in the segment say sales are higher today than one year ago. This is slightly more than the one-third of fast casual operators who reported similar sales growth (SNAP! Keynote Report: The Future of Fast Casual). Operators for both segments are also optimistic about future sales. Last year three-fourths of fast casual operators said they expect sales to increase in 2018, and over two-thirds of casual dining operators report positive expectations for sales in 2019. On the consumer side, close to 30% say they’re going to casual dining restaurants more often now than they did a year ago, comparable to the 33% who increased their visitation of fast casuals in 2017. Operator challenges in casual dining. While the future is looking bright for casual dining operators, there remains one area that poses a major challenge – getting consumers to come back more often. While over half of fast casual patrons report going at least once a week, only 13% of casual diners visit weekly. Given that meals at casual dining restaurants tend to cost more and are generally served in a sit-down fashion with leisure rather than convenience in mind, it’s unsurprising that visitation frequency is lower for the casual dining segment. Still, around 70% of casual dining operators attribute recent sales growth to increasing numbers of loyal repeat customers.

One strategy operators are using to attract and retain customers is by modernizing menus through safe experimentation. According to the report, one of the megatrends casual dining patrons are most interested in are mashup items that combine safe and familiar classics with a twist, like a Korean BBQ burger. Operators who offer a few of these items (either as permanent items or as LTOs) may have greater success at attracting new customers. For repeat customers, operators can also offer promotions that encourage increased visitation frequency, such as a discounted meal if diners return within the month. Similar to the fast casual segment, visitors to casual dining venues highly value the balance between price and quality of the food. Consumers are less willing to trade quality for lower prices at casual restaurants compared to fast casual restaurants, which means casual dining operators must be cautious about pricing items too low so as not to be associated with lower quality. At the same time, casual dining customers are also reluctant to order high quality food if it means paying significantly more. With many casual dining operators anticipating an increase in food and labor costs, finding the right pricing balance that delivers the moderate price/quality level consumers desire can be difficult, but suppliers can play a role in assisting operators with this challenge – one in three casual dining operators say they are interested in menu analysis/costing support from suppliers. Opportunities for innovation.

To appeal to busy customers, casual dining operators can look to technology to simplify the ordering process. Tabletop tablets that allow diners to order and pay without having to wait for a server, for example, are being implemented at chains like Applebee’s and Olive Garden. For on-the-go diners who don’t have time for a sit-down meal, many casual dining establishments offer takeout, but could also take the next step by implementing delivery services (a strategy that 10% of casual dining operators say they’re planning to incorporate in the next year). New York’s Veselka, a Ukrainian diner that opened in 1954, started its delivery service with just having busboys deliver food around the neighborhood, but in recent years has signed on with third-party services like Seamless, ChowNow, and Caviar. Now delivery and takeout make up about 20% of the restaurant’s overall business, according to Eater. Still, as operators look to expand their off-site options, it’s important to keep in mind that any new initiatives should be structured so as not to interfere with the dine-in experience, which remains the largest source of revenue for the majority of casual dining operators. Marketing is also a major driver of foot traffic at both fast casual and casual restaurants – nearly one-third of all casual dining operators agree that promotions motivate return business, and 30% of fast casual operators say LTOs and daily specials play a significant role on their menus. While the food/menu are the most important factors for consumers when deciding between casual dining establishments, operators should also consider other areas where they can stand out. For both the fast casual and casual dining segments, any aspect that can make an operator top-of-mind – whether it’s new or interesting menu items, promotions, décor, entertainment, or streamlined ordering technology –should be highlighted to customers. However, it’s also important to keep the focus narrow, as picking one or two specific aspects to improve upon will be more effective than trying to stand out in all areas. By assessing and addressing the most prominent needs of their customers, both casual dining and fast casual operators can devise long-term strategies for creating a unique presence for their business. – Source: SmartBrief’s.

Lines Continue to Blur Between Restaurants and Grocers

A grocery store isn’t just a place to shop for packaged foods and produce anymore. And customers, particularly young ones, like it that way and want to see more foodservice at retail, according to Amanda Topper, associate director of foodservice research at market research firm Mintel. “In the past, you’d kind of seen this divide between a grocery store and a restaurant,” Topper said during a session titled “The Power of Foodservice at Retail” during the 2018 NRA Show. “The grocery store is where you go to buy food when you’re going to prepare a meal at home. The restaurant is where you go purchase food or eat food away from home.” No more. Topper cited a few prominent examples of this blurring of the lines, like the oyster bars at Mariano’s locations in Chicago, the wine bars at Ralphs, and Kitchen 1883 at Kroger, which won a MenuMasters Award from Nation’s Restaurant News this year for menu innovation. But foodservice at retail could mean something a bit simpler, too. Chicken, either fried or rotisserie, has been a staple at grocery stores for years and is the most popular prepared food item followed closely by sandwiches and coffee. This broad foodservice category includes “something that the employee is making,” Topper said. “It’s either something that you’re consuming at the restaurant or store or it’s something that you’re talking away. It can also be a proprietary restaurant, or it can be a third-party restaurant, for example, a Subway restaurant located inside of a Walmart.” The customers gravitating toward these restaurant and prepared food options at grocery stores tend to be young, male, and high earners, she said. “And they tend to be parents,” she added. “They might be shopping for the week and looking for a quick, easy meal for their family.”

Almost 20 percent of consumers would like to see more sit-down restaurants at groceries. But it’s important to also note the 33 percent of consumers have no interest in the concept at all. Those consumers tend to be older, supermarket loyalists, she said. If retailers want to focus on the mainly Millennial group interested in these restaurant concepts, don’t make the restaurant an afterthought. “We know that shoppers really want an experience when they go out,” Topper said, and groceries are evolving to be more of a social scene. “Twenty-five percent of consumers are likely to spend time a store even if they’re not shopping, so perhaps they’re going to do some work or they’re going to enjoy a meal,” she said. But these cafe and restaurant concepts in supermarkets likely won’t drive consumers to the retailer on their own, said Topper. Where consumers shop for groceries is still primarily based on convenience. “And it’s probably not likely that these in-store restaurants are going to replace traditional restaurants any time soon, either,” she said. “Thirty-eight percent of people say that going to a restaurant is just more fun for them.” – Source: NRN.

Texas Roadhouse Promotes Tonya Robinson to CFO

Texas Roadhouse announced a key executive change, and it’s coming from within. The 558-unit, Louisville-based chain promoted Tonya Robinson to chief financial officer, replacing company president Scott Colosi, who served in the interim role since 2015. Robinson, previously vice president of finance and investor relations, joined Texas Roadhouse in 1998 and has been a key figure in its accounting, financial reporting, analysis and planning, and investor relations. In the past two decades, Robinson has held a variety of roles, including controller and director of finance reporting. “Tonya brings unmatched experience, knowledge and understanding of Texas Roadhouse and the investment community. Tonya has and will continue to have a big impact on our company,” Colosi said in a statement. Colosi assumed the interim CFO role in January 2015 following the departure of Price Cooper to Krispy Kreme. Cooper had held the position since 2011 after starting with Texas Roadhouse in 2006. Texas Roadhouse posted comparable same-store sales gains of 4.9 percent at company restaurants, including 4 percent higher guest counts, and 3.9 percent at domestic franchised units in the first quarter of fiscal 2018. Diluted earnings per share increased 57.9 percent to 76 cents from 48 cents in the prior year. – Source: fsrmagazine.com.

Industry vet Fassler honored with Legends Award

The foodservice industry honored the life and work of Joseph K. Fassler, former president and CEO of Restaura Inc., when the National Restaurant Association posthumously presented him with its Second annual Industry Legends Award at the International Foodservice Manufacturers Association’s Silver & Gold Plate gala on May 20. Dawn Sweeney, president and CEO of the National Restaurant Association, presented the award to Fassler’s brother. She called Fassler, who died last year at age 75, an industry giant who epitomized hospitality. In addition to his career as a successful industry executive, Fassler was a former Chairman of the National Restaurant Association and its Educational Foundation. “Joe would have been successful at anything he did, but fortunately for us he chose hospitality, and we are profoundly grateful for that,” Sweeney said. “He spent a lifetime in our industry, rising from the lowest level … to becoming a leading president and CEO, always with the same company. Over a lifetime of exceptional leadership and extraordinarily wise counsel, this gentleman’s legacy touched tens of thousands and will ripple through generations to come.” Gus Fassler, Joe’s twin, spoke of his brother’s four passions in life: his career, the Restaurant Association, the Educational Foundation, and family values. “My brother was, and possibly is, a legend at the [National Restaurant Association], but to me he is the most unique legend I will ever have,” he told the audience, tearfully. Three of Fassler’s good friends — restaurateurs Ted Balestreri and John Metz Sr., and Tom Haas, a former publisher of Nation’s Restaurant News — also remembered Fassler during the presentation, recalling his generosity, kindness and directness, as well as his love for the New York Yankees and the game of golf. The Gold & Silver Plate awards, often called the “Academy Awards of the foodservice industry,” honor the contributions and innovations of leading operators and the work they’ve done to advance the business. Gene Lee, president and CEO of Darden Restaurants, won this year’s Gold Plate Award. IFMA President and CEO Larry Oberkfell presented Lee with the award at the end of the evening’s festivities. – Source: The National Restaurant Association.

Parts Town Acquires 3Wire Group Foodservice Business

Parts Town, the global market leader in foodservice parts distribution, has acquired the foodservice parts distribution and field service business assets of 3Wire Group, which is a Marmon company (“Marmon”). Financial terms were not disclosed. These 3Wire businesses primarily distribute foodservice equipment parts, bringing unique value-added solutions to major chains and food equipment service companies. The origins of 3Wire’s foodservice parts distribution date back to independently owned industry pioneers Northern Parts, Pacific Coast Parts, and Restaurant Appliance Service, who came together under the 3Wire brand as part of IMI Cornelius, prior to becoming part of Marmon in 2014. 3Wire’s beverage parts distribution division and technical service support team will remain part of Marmon, will be re-branded, and will be the subject of a future announcement from Marmon. “This acquisition will further strengthen the differentiated value we bring to both our manufacturer and customer partners,” commented Steve Snower, CEO of PT Holdings, parent company of Parts Town. “3Wire has built an excellent team, a strong brand and very solid major account partnerships, along with innovative technology. We are really excited to welcome the 3Wire team to Parts Town and to build on the legacy of such a great organization.” Following the transaction, Jeff Audette, General Manager, will continue to lead the 3Wire foodservice parts distribution team as part of Parts Town. Tom McPeters, General Manager, will continue to lead the 3Wire field service team. “Jeff and Tom are proven industry leaders and have built outstanding teams,” states Snower. “We are excited to take the best of Parts Town and 3Wire, and create something truly special in the foodservice equipment parts space to strengthen our manufacturer and customer partnerships.” The 3Wire brand will continue as part of Parts Town, with the businesses coming closer together in the coming months. Jeff Audette adds, “This combination is incredibly compelling. We are ready for this next exciting chapter of growth and innovation as part of a dynamic, fast-growing team. We have enormous respect for Parts Town and believe that this partnership is a game changer for our manufacturers, our customers, and our team members.” – Source: Parts Town.

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