To Our Valued Subscribers:
Here it is the middle of July and I hope your business is as hot as the weather. I also hope you had a great and safe 4th. the Cubs are fighting for the Division lead. It will be a great race until the end.
From the Real World, according to the US Bureau of Labor Statistics, June saw the highest rate of employees quitting their current jobs and looking for and finding new and higher paying positions. As a blatant plug, my Associates and I are tapped into who is doing what; and, how we can assist you in fulfilling your sudden openings. When you do have an opening, one of the items you will have to contend with is how do the potential new hires fit into my corporate culture? One of the best suggestions I have is from an Article I read in Leadership Insights, the article suggest that your organization should conduct an annual culture audit. A few areas you need to address are: diversity, (both ethic and gender), age and values. If you don’t know how your organizations stack up against your completion, it is well worth your time to find out, especially in this climate of employee movement. What is also worth your time, is the latest edition of American Recruiters Global Foodservice News. Enjoy the rest of July and the read.
President, American Recruiters
How Darden Artfully Built LongHorn into a Steakhouse Juggernaut
Much of what has taken place at LongHorn Steakhouse in recent years counteracts the casual-dining playbook of old. Simplify and shrink the menu, but improve loyalty and accelerate same-store sales. Historically those results just don’t co-exist in the same battlefield. “It’s the art, not the science,” Darden CEO Gene Lee said during a June 26 conference call. Darden is, undoubtedly, the king of simplification in the restaurant world. It’s an ethos the brand ignited about four years ago, and the results have continued to front the field ever since. LongHorn was brought into Darden’s portfolio in 2007 when the Olive Garden parent, which also owned Red Lobster at the time, purchased RARE Hospitality International Inc. for about $1.2 billion plus debt. RARE operated LongHorn and the higher-end Capital Grille. The deal propelled Darden full-force into the steakhouse business after the closure and sale of its struggling Smokey Bones barbecue restaurants. There were 287 LongHorn restaurants and 28 Capital Grille restaurants at the time. Lee was RARE’s president and chief operating officer. The year before the sale, RARE’s profit dropped about 24 percent to $39.4 million on $986.9 million in revenue. In Q2 of 2007, its profit decreased 24 percent to $10.2 million on $269.2 million in revenue. LongHorn just posted same-store sales gains of 2.4 percent in Q4, which gave the 504-unit brand 21 consecutive quarters of positive momentum. The only negative full year of comps sales came during Darden’s integration of the brand. The Capital Grille, by the way, reported same-store sales gains of 2.6 percent, and has grown to 58 units under Darden’s umbrella. It’s impressive, as Hugh Gordon Gooding from Stephens, Inc. pointed out during the call, Darden’s ability to generate such a streak of gains despite what it’s taken away from the offerings. The menu is down more than 30 percent in the past year or so, and still Darden lifted total sales 4.9 percent, about four times the rate of growth for the industry (excluding Darden) this past quarter. Same-restaurant guest counts outperformed industry benchmarks by 280 basis points. Lee even said Darden is preparing to take the chain to California in the next 24 months. This past quarter, Lee said LongHorn reduced additional core menu offerings (he didn’t provide the number exactly) and further simplified operating processes. Additionally, limited-time offers were made less complicated and easier for teams to implement. “This continuous improvement is resulting in better execution. Finally, our emphasis on the culture and focus on team member engagement continues to pay off as evidenced by LongHorn’s industry-leading retention rates at both the manager and hourly team member level,” he said.
LongHorn’s segment sales also grew in Q4, driven by positive same-restaurant sales and net new restaurants. Segment profit margin was 19 percent. Adjusting for the workforce investments, LongHorn’s segment profit margin would have been 30 basis points higher than last year. Same-store sales are showing 6 percent growth on a two-year stack. “I really like our margin structure compared to the other steakhouse players. So sometimes the headline ‘same-restaurant sales number’ is not the entire piece of the puzzle. You’ve got to look at the whole business model,” Lee said. “… You have to remember in LongHorn, these are very small boxes [and] our strategy is that we maximize the box and then we build another restaurant 3 miles down the road, and that’s how we ended up with 45 restaurants in Atlanta, Georgia.” Taking a deeper look into the simplification process, Lee said Darden views the process “from the back door to the table.” It’s broken down in the following areas: “How do we simplify all the prep procedures? How do we simplify the processes between the grill and the expediting station, and how do we quickly get that food to the table?” Lee said. Returning to his earlier sentiment, Lee said simplifying a menu comes down to the “art of being able to put a menu together that covers all the significant areas that your guests want to be covered without having a lot of products doing or working in the same ways, and ensuring that you have unique, interesting products in each of those categories.” “And if you do that, I think that you can artfully create a menu that meets the consumer needs but yet allows you to simplify your execution so that you can execute that product at a really, really high level,” Lee said.
He referenced similar success at Hillstone Restaurant Group, the 1977-founded company that runs Houston’s, Hillstone, and 13 other polished brands. Lee said, just like Darden is aiming for, Hillstone showcases a limited menu, executed flawlessly, while also hitting every possible area a consumer might want to experience. “I think that’s what we’re trying to do is remove the duplicity in our menus with similar products, really providing an opportunity for our guest to eat what they want but without having two choices in the same particular area,” he said. “And that’s what we’re focused on.” Lee added that there’s still work to be done, but it all comes down to presenting a product executed the way it’s designed to be executed, and delivered hot and flavorful. “That’s what were excessively focused on,” he said. – Source: fsrmagazine.com.
4 Keys to Opening a Successful Restaurant
There are a number of things that have the ability to bridge cultural gaps and unite people in one go. One of those things is food. The world is privileged to have so many different nationalities, each with its own cuisine. A taste of these cuisines often gives us a glimpse into the peculiar features of that culture. And thanks to innovations that have improved accessibility, nobody needs to travel anywhere before tasting a different cuisine. The idea of starting a restaurant is a bold move that requires appropriate preparation. Even though food is a universally common ground, the conditions in which this food is prepared can determine a lot. Starting such a business is a long shot at establishing a lifetime legacy in the food industry. Hence it should be contemplated with caution.
Opening a Restaurant: When going through your “restaurant opening checklist,” the foremost thing you would want to have as place is, of course, capital. The step of capital acquisition is essential to any business. You need to ensure that you have the necessary funds to pay for rent, bills, ingredients, and so forth. You also need to have a drawn-up business plan that will outline both short-term and long-term goals. In addition to funds and a legit business plan, these four keys will aid your quest of opening a successful restaurant: Never underestimate beginning days—learn all you can: In all your self-development on how to open a restaurant, it is important to start with the basics. A solid foundation can go a long way to survive future tough moments. Learn the rudiments of being a restaurant owner—you can take up waiting tables. This gives you a better opportunity to get exposed to customers and interact with them. This experience can prove to be extremely valuable as time progresses. You are getting a shot at knowing what people like, dislike or expect from a restaurant in terms of service, food, arrangement, and other seemingly trivial things. Holding little conversations with experienced restaurant owners can also give an idea of what to expect as an owner. Creative + Original yet savory equals a great menu: Prepare yourself to be questioned by various customers about the tastiness and purpose of your food. By now you must have realized that you cannot begin from making all cuisines for all people. Choose a food type and focus on it. Be it salads, burgers, sushi or soups, stick to one for a start and add other foods gradually. Experiment on your menu; try out ingredients at home before trying it in your restaurant. People sometimes think that making food savory is quite simple and is like a run-off course from “running a restaurant for dummies.” But this isn’t the case. Your menu forms a big part of your legacy. It should be popping and open for adjustments from time to time, based on customer feedback. Choosing the perfect team: This remains one of the most important things any prospective restaurateur can do. Even experienced owners would tell you that staff is your stepping stone or stumbling block. Taking into account the fact that you cannot serve all customers all at once, it is up to your employees to uphold the values you set as a standard. When choosing people to work with, it is essential that they share the same goals and principles you preach. Nothing causes more conflict than an owner running with one goal and workers another. From the very beginning, everyone must be on the same page in principle and work conduct. Like-mindedness is the best foundation on which to build the best staff for any corporation, especially one as tightly knit as a restaurant.
Business skills are KEY: Owning a bar or restaurant involves more than just fancy foods and the best staff. It entails decisions that, when made, can be the last step toward a soaring or stagnant business. Issues like partnering with supermarkets, food factories or other food joints will be encountered every now and then. Whether to move to a bigger place, take out a loan, strike a deal—all these are critical business decisions. It is therefore wise to learn about the perks involved in running a restaurant before opening one. – Source: fsrmagazine.com.
Preoday Partners with U.S. Ordering Provider PlaceNorder
Mobile and online ordering technology provider Preoday and ordering platform placeNorder have partnered to bring digital pre-ordering to food and beverage businesses across North America. PlaceNorder focuses on providing an online ordering platform to restaurants in the USA and Canada. Now powered by Preoday’s technology, it aims to extend a marketing-based approach to working with restaurants, event venues and catering companies. In addition to digital ordering, the overall placeNorder app also provides a gift card and loyalty program, as well as functionality for event organizing and catering. Existing placeNorder clients include Shorty’s Mexican Roadhouse and Ches’s Fish and Chips. Art Snow, founder of placeNorder, says, “Partnering with Preoday enables us to bring a digital ordering platform and marketing program to restaurants across the USA and Canada that will help increase overall sales and grow brand awareness. As restaurants realize the benefits to their bottom line, digital ordering is moving from a consumer-driven trend to an integral part of their business. We’re excited to begin this partnership with Preoday and we look forward to providing our clients with this technology.” Nick Hucker, CEO of Preoday, adds, “This partnership with placeNorder is a first for us in North America and this kind of collaboration enables us to be truly global. Clients will benefit from the combination of our international technology, and local, on-the-ground support provided by placeNorder. We look forward to being part of the placeNorder team and producing great success stories with clients across the USA and Canada.” – Source: FSRMagazine.
Under the Agency’s Food Safety Modernization Act
The Food and Drug Administration on June 19 began issuing draft guidance designed to help industry comply with the Intentional Adulteration (I.A.) Rule under the agency’s Food Safety Modernization Act. The I.A. Rule addresses hazards that intentionally may be introduced to foods, including by acts of terrorism, with the intent to cause widespread harm to public health. The I.A. Rule requires the food industry to implement risk-reducing strategies for processes in food facilities that are significantly vulnerable to intentional adulteration. The first compliance date for the largest facilities is July 2019. The draft guidance released June 19 marks the first of three installments. It includes chapters on components of the food defense plan, how to conduct vulnerability assessments, how to identify and implement mitigation strategies, and food defense monitoring requirements. The guidance released June 19 may be found here. The other guidance installments will come out later this year. The second installment will focus more specifically on vulnerability assessments and training requirements. The third installment will give details on corrective action, verification, reanalysis and recordkeeping requirements. The F.D.A. will hold a public meeting on the draft guidance when the second installment is released. “This is new regulatory territory for both the F.D.A. and industry,” said Scott Gottlieb, M.D., commissioner of the F.D.A. “We’ve engaged directly with stakeholders while drafting this guidance to understand their perspectives and any concerns they have about complying with this rule. We’ve listened to their valuable feedback. Much of that feedback is reflected in the draft guidance we’re releasing today, as well as in the next two parts of the guidance. “For example, we heard consistently from a variety of stakeholders that the rule needed to be practical and that facilities needed flexibility when conducting vulnerability assessments. The draft guidance reflects this approach. The new guidance illustrates different ways that each facility can meet the requirements of the rule, and the guidance provides a range of options for identifying and reducing vulnerabilities.” – Source: Food Business News.
Diet Quality has a Major Impact on Health
The Food and Drug Administration has scheduled a meeting for July 26 and invited interested parties to submit ideas for how the agency can improve its nutrition innovation strategy. “It’s incontrovertible that diet quality has a major impact on health,” said Scott Gottlieb, M.D., commissioner of the F.D.A. “This is relational. We know, for example, that populations with better diet quality are shown to have better outcomes. But it’s also undeniably causal. We know that diet affects health. And we know diet is modifiable. “What we need is the policy framework that allows consumers to identify healthier options and the market forces to inspire the development of these opportunities at a cost that’s affordable.” Mr. Gottlieb added that the F.D.A. wants to empower consumers with modernized food labels that will make it easier to inform better choices while at the same time providing incentives for food manufacturers to produce the more nutritious products consumers demand. “Toward these goals, our innovation strategy seeks ways to provide incentives for manufacturers and foster competition to create more nutritious food offerings and have clearer labeling that’s more understandable to consumers,” he said. “Providing a framework for encouraging the industry to compete on the nutritional attributes of their products can provide healthier choices for consumers and enable more opportunities for these healthy options to also be more affordable options.” The meeting will cover three primary topics — modernizing labeling claims; modernizing ingredient labels; and modernizing standards of identity. “Leveraging nutrition as a way to advance public health remains one of my top priorities as commissioner,” Mr. Gottlieb said. “All of these efforts represent the broad range of work the F.D.A. is currently conducting to create a safe and healthier food supply for American families, and to help consumers make more informed choices.” – Source: F.D.A.
John Schnatter Resigns as Papa John’s Chairman
John Schnatter, founder and chairman of the board of Papa John’s International, Inc., has resigned in the aftermath of reports that he made a racial slur during a meeting in May with the pizza chain’s media agency. Schnatter on Wednesday admitted to making the slur in an email to Forbes magazine. Forbes said the meeting was arranged by the agency, Laundry Service, “as a role-playing exercise for Schnatter in an effort to prevent future public relations snafus.” In a quarterly earnings call in November last year, Schnatter had partially blamed professional football players’ silent protests during the singing of the national anthem before games for declining sales at his chain. Papa John’s had been an official sponsor of the National Football League. Following Schnatter’s comments,he resihned as CEO but remained chairman of the board, and the chain’s official sponsorship ended, replaced by Pizza Hut. According to Forbes, Schnatter downplayed his NFL comments, saying of the founder of KFC, “Colonel Sanders called blacks [the N-word]” without repercussions. Schnatter, in his comments to Forbes issued by Papa John’s International, apologized. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.” In a statement announcing Schnatter’s resignation, Papa John’s said Olivia Kirtley was acting as the companies lead independent director and that a new board chairman would be announced “in the coming weeks.” Laundry Service confirmed that it is no longer working with Papa John’s. – Source: NRN.
Tender Greens Names Denyelle Bruno CEO
Tender Greens has named president Denyelle Bruno, left, to the additional role of CEO, replacing co-founder Erik Oberholtzer, who was named executive chairman of the fast-casual brand. The 28-unit “slow food done fast” concept from Los Angeles said Bruno will serve in her new dual role effective immediately. The company said it was “always the plan when they hired Denyelle” to have her take over as CEO. Oberholtzer is “passionate about food policy so he’s going to be putting more focus on speaking and driving reform in food policy issues, which serves his higher purpose,” the company told Nation’s Restaurant News. “This move is a total win for the company and for Erik.” Bruno is a veteran retail executive who came to Tender Greens in 2017 after stints at Apple, Drybar, Peet’s Coffee, Macy’s and Design Within Reach. She is charged with leading Tender Greens into its “next level of performance and growth,” which includes plans to triple its footprint over the next four years. Scaling emerging or new brands is Bruno’s specialty. At Apple, she launched the first 25 Apple Stores. Drybar, a Southern California-based salon that provides only hair blowout services opened 55 locations during her three-year tenure. Oberholzer, the face of the brand since it opened its first store in Culver City in 2006, said Tender Greens has just begun as a company under Bruno’s stewardship. “As we continue to bring Tender Greens to more communities, we could not imagine a better leader than Denyelle. Her experience in taking iconic brands of our size to best-in-class companies is without comparison, and she also embodies the heart and culture of Tender Greens,” he said in a statement. Tender Greens has earned a regional following for its salads, sandwiches and entrée plates featuring grilled proteins such as free-range chicken, salmon and marinated steak. Meals are scratch made in an exhibition kitchen that is typically led by a trained chef using premium ingredients. From the beginning, Oberholtzer set out to provide fine dining quality foods to diners living on a fast-casual budget. Most meals range in price between $12-$13. The regional Southern California brand in recent years has caught the attention of high-profile backers. In July 2015, Danny Meyer’s New York-based Union Square Hospitality Group became an investor along with equity investment firm Alliance Consumer Growth. Meyer, founder of the Shake Shack chain, also joined the Tender Greens board. Bruno said she’s honored to take the brand to the next level. “We’re at the right place with the right team to further our movement and make Tender Greens a household name in cities and neighborhoods all across the country. I could not be more excited for what lies ahead,” she said in a statement. The company operates 26 units in California stretching from San Diego to the Bay Area. It has two locations in the East Coast – one in New York City and the other in Boston. A second Boston restaurant is slated to open later this year. The company said co-founder David Dressler will continue as chief people officer. – Source: Restaurant Hospitality.
Dunkin’ Brands Names David Hoffmann CEO
Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin-Robbins, has named David Hoffmann CEO effective immediately, the company said. He will also serve on the company’s board of directors and remain president of Dunkin’ Donuts U.S, a role he has held since 2016, according to a news release from the Canton, Mass.-based company.
Hoffmann succeeds Nigel Travis, who is retiring from the role he has held since January 2009. Travis will remain active with the company as the executive chairman focused on international business. During Travis’ tenure, the company completed its IPO in 2011, entered into 25 new international markets, and added almost 6,000 net new restaurants globally, the company noted in the release. “When we recruited Dave to Dunkin’ Brands 18 months ago with the intent that he would succeed me as CEO, we knew that we were getting a world-class leader with extensive restaurant industry expertise, and he has exceeded all of our expectations,” said Travis in the news release. “From his development and implementation of the Dunkin’ Donuts U.S. Blueprint for Growth, to the relationships he has forged with our franchisees and the talent management skills he has exhibited, Dave has demonstrated he is exactly the person to lead the next phase of our global growth.” Since joining the company, Hoffmann has led Dunkin’ Donuts U.S. operations and overseen digital initiatives and the next generation concept store. Previously, he spent 22 years with McDonald’s Corp. He started as a crew member in high school and years later became the president of high growth markets, which included China, South Korea, Russia and several additional European markets. “I want to thank the Dunkin’ Brands board of directors for the opportunity to lead this incredible company,” Hoffmann said in the news release. “I also want to offer my heartfelt appreciation to Nigel for his decade-long leadership of Dunkin’ Brands as well as for the support he has shown me since I joined the company. Thanks to Nigel, our franchisees around the world have flourished; our asset-light model has yielded strong shareholder returns, and we are well-positioned for long-term growth. … We have a strong legacy and an even more exciting future together.” Currently, there are 12,500 Dunkin’ Donuts restaurants and more than 7,900 Baskin-Robbins restaurants worldwide. – Source: NRN.
CKE Restaurants Holdings Names New Execs
CKE Restaurants Holdings, the parent company of fast-food chains Carl’s Jr. and Hardee’s, this week named Charles Jemley the company’s new CFO. Kerry Olson, meanwhile, was named chief legal officer and general counsel of the Franklin, Tenn.-based company. Both executives “bring valuable food industry experience that will help guide the growth and evolution of our company and brands,” CEO Jason Marker said in a statement. Jemley comes to CKE from Starbucks Corp., where he’d served in a number of senior positions over the past 12 years. He worked with Yum Brands for 15 years before that. “Charles brings extensive financial, operational and strategic experience to CKE” and “will be instrumental as we enter our next phase of growth and expand the footprint of our brands,” Marker said. Olson joins CKE from the law firm Faegre Baker Daniels and has spent more than a decade in the food industry, having worked with both Buffalo Wild Wings and International Dairy Queen. Marker called Olson “a distinguished law professional” who will “help guide our continued global growth.” – Source: CKE Restaurants Holdings.
Former TGI Fridays President Named CEO of Eggs Up
Grill Eggs Up Grill, a chain of franchised breakfast and lunch restaurants located throughout the South, has named a new chief executive officer—restaurant industry veteran Ricky Richardson—as the company embarks on an aggressive growth plan under new ownership. In March 2018 the company was acquired from Skip Corn and founder Chris Skodras by WJ Partners, a private investment firm with a history of rapidly scaling multi-unit concepts, such as Pure Barre, a boutique fitness concept with nearly 500 locations. Corn and Skodras built Eggs Up Grill from a single location in Pawleys Island, South Carolina, to a regional chain with 26 locations in three Southeastern states.
WJ Partners tapped Richardson, who brings more than 35 years of multi-unit and franchise operations experience, to oversee the expansion of the popular concept throughout the South and beyond. Corn and Skodras will remain with the organization, providing guidance and support for the brand and its franchisees. “Since its creation in 1986, Eggs Up Grill has proven extremely successful with customers and franchise partners alike,” says Jaime Wall, managing partner of WJ Partners. “Having a leader of Ricky’s caliber and experience will allow us to take the brand to the next level. His particular expertise in helping founder-led, franchised restaurants realize their next stage of growth will be of tremendous value as we leverage the increasing popularity of breakfast-based concepts and attract new franchise partners to our family.” Richardson’s background includes more than 20 years with TGI Fridays, where he most recently served as president and chief operating officer of Fridays USA, overseeing more than 500 restaurants.
In addition to other various senior management roles at TGI Fridays, prior experiences for Richardson include heading up operations for Carlson Restaurant Group Worldwide’s acquisition of California-based fast-casual concept Pick Up Stix. Earlier he led all restaurant operations for the Florida franchisee of the Black-eyed Pea restaurant chain, having spent the first 11 years of his career serving in a variety of roles for the founder-led home-style Southern concept. “I’m excited to join an organization with a successful history and so much future potential,” says Richardson. “Eggs Up Grill is built on a foundation of not just great food, but also a fantastic, values-driven service culture that really connects with the communities we serve. And, as a breakfast and lunch concept, our restaurants’ hours enable our franchise partners to enjoy more family and community time, which really resonates with the owner/operators we’re targeting.” Richardson says he plans to leverage the brand’s existing footprint in the Carolinas and Georgia while exploring expansion opportunities in key markets throughout the Southeast. “Chris and his wife, Pat, created Eggs Up Grill because they wanted to serve their local guests great food with friendly service, building a successful restaurant that also allowed time to be with their family,” said Richardson. “Many of our franchisees experienced Eggs Up Grill while visiting the beach, fell in love with the concept and saw an opportunity to recreate that balance of business and family in their own hometowns. We believe that’s a powerful proposition, especially when combined with the proven track record, popular menu and strong operational support that only Eggs Up Grill can offer.” Richardson will work out of Eggs Up Grill’s new corporate headquarters in Spartanburg, South Carolina, where WJ Partners is also based. He is the latest in a string of key appointments WJ Partners has made since partnering with Eggs Up Grill just over three months ago. Anticipating significant growth on the horizon, the chain added key team members in finance, franchise development, operations, real estate and marketing to complement the existing team, including Corn and Skodras, and now Richardson. “We believe we have everything in place for Eggs Up Grill to grow considerably in the near term and be successful over the long haul,” said WJ Partners’ Wall. “With great food, a friendly atmosphere, an outstanding group of franchise partners and a talented leadership team in place, we expect to attract many more like-minded operators and take this brand to new heights.” — Source: fsrmagazine.com.
P.F. Chang’s is Looking for a new owner
Centerbridge Partners and the board of managers of Wok Parent revealed Friday they have retained Bank of America/Merrill Lynch and Barclays to explore a possible sale of the Chinese food chain. “Given the positive performance of P.F. Chang’s Bistro and having received multiple unsolicited indications of interest, this is an exciting time to explore a sale,” Steve Silver, global co-head of private equity at Centerbridge, said in a statement. “We have a deep, talented team and compelling growth initiatives, including unit expansion of both our domestically operated and international franchise businesses, which together provide a powerful opportunity to capitalize on the strength of our brand and high quality menu.” Centerbridge acquired P.F. Chang’s in 2012 and recently separated it from Pei Wei Asian Diner, creating two distinct businesses. P.F. Chang’s currently operates 214 locations in the U.S. and has franchised 93 stores in 24 countries. – Source: CNBC.
Jose Garcés Sells Most of his Restaurants in $8M Deal
With a new investor joining in and a higher purchase price, the Garces Restaurant Group late Tuesday announced the sale of almost all of its restaurants for $8 million plus assumed liabilities. The Philadelphia-based multiconcept group has been acquired by an entity called 3BM1, which is a partnership between Ballard Brands LLC — which had previously announced plans to buy some of Garcés’ restaurants out of bankruptcy for $5 million — and Philadelphia investor David Maser, an attorney with the law firm Cohen Milstein Sellers & Toll.
The transaction, which closed on Tuesday, was approved by a U.S. Bankruptcy Court judge in Camden, N.J., Garces Group said — though the reorganization process will continue. The operating name of the entity going forward has yet to be determined, a company spokesperson said. Under the deal, 3BM1 will take ownership of most of famed chef Jose Garces’ portfolio, including the restaurants Amada, Tinto, Village Whiskey, The Olde Bar, JG Domestic, Volvér and event company Garces Events. The new owners will also take over management contracts for Olón and Okatshe in the Tropicana Hotel in Atlantic City; as well as locations of Amada and Distrito, which have reopened in Ocean Resort Casino in Atlantic City after a brief closure while the property changed hands. 3BM1 will also operate foodservice for the CHUBB Conference Center in Lafayette Hill, Pa., and Ortizi in New York City. Two Garces Group restaurants will close, however: The restaurant 24 will shutter after service on July 14 as the company relocates its corporate headquarters and test kitchen. And Garces Trading Company in Philadelphia, which was not part of the sale, will close after brunch service on July 15 after nearly a decade. Employees at the restaurants to be shuttered will be offered other positions within the group’s portfolio, officials said, and the intent is to maintain employment for most, if not all, of the group’s 750 employees overall.
Separately, Garces, the Ecuadoran-American chef who opened his first restaurant in 2005, will retain ownership of the restaurants Distrito and Buena Onda, both in Philadelphia. As part of the deal, Garces will also remain as the group’s chief culinary officer. “This is a new beginning for our company,” Garces said in a statement. “This Ballard team has been with us every step of this process, as true partners, and we can now focus on the future together. “I am looking forward to working with the team to identify new concepts that will entice our customers and attract new ones,” he added, promising the experience and quality at existing restaurants will not change. “In fact, things are going to keep getting better.” Ronnie Artigues, general counsel of Ballard Brands, has been named CEO of the new entity. Based in Covington, La., Ballard Brands was formed in 2001 by brothers Paul, Scott and Steve Ballard, and the company operates 153 restaurants in 28 states under the Smoothie King, Wow Café, PJ’s Coffee of New Orleans, The Original City Diner, Boardhouse Serious Sandwiches, Richard Fiske and Ole Saint brand names. The Ballard team sees the managed services and catering divisions as strong areas of growth for the Garces Group restaurants, the company said. “Chef Garces has developed a brand that transports people to different cultures through his creative cuisine and by creating environments people love. Amada is the perfect example of that, and we look forward to all the potential of building a revived, powerful brand,” said Paul Ballard, co-founder of Ballard Brands, in a statement. Maser, meanwhile, said his involvement is an investment in the Philadelphia economy. “Chef Garces has been a central force behind Philadelphia’s emergence as a premier restaurant city and destination,” he said in a statement. “I am pleased to be involved as a partner in this transaction to bring together the Ballard team with Jose as we preserve local jobs and inject new life into a vital local brand.” – Source: Restaurant Hospitality.
Oprah Winfrey’s Next Edible Bet: True Food Kitchen
Oprah Winfrey is making a significant investment in True Food Kitchen and joining the board of the growing chain, which is eager to see whether the Oprah Effect translates into significant gains in the restaurant world. Winfrey was introduced to the decade-old chain by her friend, health expert Bob Greene, when Winfrey and Greene tasted food from the Palo Alto location, says True Food Kitchen CEO Christine Barone. Later, Winfrey ate its location in Santa Monica. Soon after, early last spring, Barone was approached by Winfrey’s team. Over a lunch at Winfrey’s home earlier this year, with a menu of food “primarily from her garden,” they discussed the company’s aspirations, Barone says. Now, Winfrey is investing in privately-held True Food Kitchen and becomes the eighth member of its board of directors. Winfrey “has made a significant investment in the company,” Barone says, without divulging financial details. To clarify, Barone adds, “By that, I mean significant for us as a company,” citing the amount of time Winfrey will invest being on the board, and the insights she can share from her own business experience. Plus, there’s that undisclosed investment. “As we plan to double in size over the next three years, we will be opening up a significant number of restaurants and really do need financing to help fund that growth,” says Barone.
The deal, in some ways, sounds similar to the one Winfrey struck with Weight Watchers in October 2015. However, while Winfrey has become one of the cornerstones of Weight Watchers’ ads since investing in that company and getting a seat on its board, there are no plans to showcase Winfrey in True Food Kitchen’s marketing. “The plan is not to have her as a spokesperson,” says Barone. There is also no tie to Winfrey’s Weight Watchers partnership, and no plan to promote Weight Watchers at True Food Kitchen. But clearly, the move could have what’s known as the Oprah Effect. Since Weight Watchers announced Winfrey’s involvement in October 2015, the diet and wellness company has been a big winner, gaining clients and seeing its share price climb from under $7 to more than $94. Phoenix-based True Food Kitchen has 23 restaurants, up from a dozen when Barone joined in 2016. It plans to open two more locations by the end of 2018. It is targeting annual revenue of $170 million this year, and aims to double in size by the end of 2021, says Barone. “I love bringing people together over a good meal,” Winfrey said in a statement. “When I first dined at True Food Kitchen, I was so impressed with the team’s passion for healthy eating and, of course, the delicious food, that I knew I wanted to be part of the company’s future.”
The chain’s seasonal menu is driven by Dr. Andrew Weil’s anti-inflammatory food pyramid and includes dishes such as kale guacamole, teriyaki quinoa, and tacos made with grilled fish or grass-fed steak. Centerbridge Partners is True Food Kitchen’s majority investor and will remain as its controlling shareholder after Winfrey’s investment. Other investors include founders Weil and Sam Fox, of Fox Restaurant Concepts, who both sit on the board. True Food Kitchen works with Motive as its creative agency of record on digital and social, Havas handles PR, and Hathway is working on online ordering, which is set to go live in October. True Food Kitchen is a departure from Winfrey’s last big food bet, the “O, That’s Good!” line of prepared dishes she announced with Kraft Heinz in in 2017. That brand hasn’t posted on social media in months, other than responding to consumer comments and complaints. Kraft Heinz says it continues to be pleased with the partnership with Winfrey and the way the products, which now include soups, sides and pizzas, are performing in the market. – Source: AdAge.
Eat Pizza While You Watch Sports
Pizza Hut really, really wants you to order its pizza while you watch sports. The No. 2 pizza chain is announcing a two-year extension of its relationship with the NCAA, after grabbing the NFL pizza partnership as soon as that league and Papa John’s severed ties. “Pizza and sports really go hand in hand,” says Pizza Hut U.S. CMO Zipporah Allen. “Sports is a big part of our strategy.” For one, people who watch games often eat while they do so, and pizza is a TV-watching favorite. Plus, the NCAA deal, in particular, appeals to a younger audience “that’s in a heavy pizza-eating time in their lives,” says Allen. And, ultimately, if Pizza Hut can woo them when they’re young, perhaps it can hold onto them as longer-term customers. The Yum Brands chain’s new marketing leaders, including Allen, aim to boost its status after Pizza Hut lost its ranking as the top pizza chain to Domino’s, based on 2017 sales.
Pizza Hut has been the official pizza of the NCAA since 2016. That pact, which was set to run through 2019, has now been extended through the 2020-2021 academic year. Pizza Hut became the NFL’s official pizza sponsor in February, less than a day after Papa John’s and the league went their separate ways. Pizza Hut’s NFL deal lasts four years, through the 2021-2022 season. Meanwhile, Pizza Hut last month picked GSD&M as its new creative agency, after working with Droga5for two years. Two great tastes that taste great together. Pizza Hut, of course, isn’t the only chain that wants to pair its food with sports. Back in 2011, Domino’s became the official pizza of the NCAA, which marked its first national sports marketing sponsorship since 2007. But these days, Pizza Hut and Papa John’s dominate when it comes to official sports sponsorships. Papa John’s is in its third season as the official pizza of Major League Baseball. Papa John’s also has relationships with 22 MLB teams and 17 NFL ones. And Yum’s Taco Bell has sponsored the NBA since 2009.
Sponsorship spending in college sports was expected to rise 4.5 percent to $1.2 billion in the 2017-18 season, according to IEG. Quick-serve restaurants are 3.8 times more likely to sponsor college sports than the average category, IEG has said. In general, spending on sponsorships is on the rise, but being able to measure the impact of such deals on business remains tough, according to a study released Tuesday by the Association of National Advertisers and the Marketing Accountability Standards Board. Total sponsorship spending in North America was expected to rise 4.5 percent to $24.2 billion in 2018, according to IEG. According to ANA and MASB, 40 percent of respondents in its study say they include expectations about sponsorship measurement into contracts with properties, while only 37 percent say they have a standardized process to measure the return on sponsorship. For Pizza Hut’s Allen, the wide variety of sports under the NCAA umbrella, not just basketball and football, is part of the appeal. Pizza Hut can activate around all 90 NCAA championships each year. Beach volleyball tournaments might be fruitful for one set of franchisees, while the NCAA hockey Frozen Four tournament holds appeal in certain areas. “The opportunity to activate on a local level is really important to us,” Allen says. Still, expect plenty of the activation to be tied to basketball. March Madness has been the main element of the brand’s NCAA work over the past two years, including two rounds of Pie Tops shoes that allow ordering from the shoes themselves. There was 150 percent year-over-year growth in engagement on social media with the 2018 version of the shoes over 2017, Allen says. – Source: AdAge.
1,500 Tin Hortons Restaurants in the Next 10 Years
More than 1,500 Tim Hortons restaurants are scheduled to open in China over the next 10 years through an exclusive master franchise joint venture agreement between Oakville-based Tim Hortons and Cartesian Capital Group, L.L.C., a global private equity firm. “We have two main priorities at Tim Hortons: building and strengthening our brand in Canada and expanding our iconic Canadian brand to the rest of the world,” said Alex Macedo, president of Tim Hortons. “China’s population and vibrant economy represent an excellent growth opportunity for Tim Hortons in the coming years. We have already seen Canada’s Chinese community embrace Tim Hortons, and we now have the opportunity to bring the best of our Canadian brand to China with established partners who have expertise in the industry and the country.” Tim Hortons, part of Restaurant Brands International, Inc. along with Burger King and Popeyes, has more than 4,700 systemwide restaurants globally. Cartesian Capital Group has more than $3 billion in capital commitments under management. Cartesian Capital Group in 2012 partnered with Restaurant Brands International and the Kurdoglu family to develop the Burger King brand in China. More than 900 Burger King restaurants are in China now. “We are excited to expand our partnership with Restaurant Brands International to bring Tim Hortons to China,” said Peter Yu, managing partner of Cartesian. “Tim Hortons has a long, rich history of providing guests with quality food and premium coffee. We plan to expand that tradition to China, drawing on 20 years of experience building businesses in China and around the world.” – Source: Food Business News.
Romano’s Macaroni Grill Hits the Comeback Trail
In Frank Sinatra’s “That’s Life” he crooned, “Each time I find myself flat on my face/I pick myself up and get back in the race.” And that description fits Romano’s Macaroni Grill, a full-service Italian eatery based in Denver that has faced severe doldrums, but is showing recent signs of bouncing back. In October 2017, Romano’s Macaroni and Grill declared bankruptcy and went into chapter 11. But fueled by the $13.5 million that restructuring and turnaround-owner Mac Acquisitions raised to fund the revival, it extricated itself from chapter 11, just four months later. By February, just five months after declaring bankruptcy, it tried to acquire the restaurant chain Bravo Brio, but was rebuffed by management. But is Romano’s Macaroni Grill ready to pounce and snap up another restaurant chain? What exactly is it doing to boost revenue when so many mid-priced casual chains have been foundering? A company extricating from bankruptcy is not uncommon. The New York Times pointed out on July 1 that “Many larger companies that file for bankruptcy end up paring their debts, cutting costs, and continuing to operate.” Philip Romano launched Romano’s Macaroni Grill in 1988 in Leon Springs, Texas, leading to Brinker International acquiring its franchise rights in 1989. It expanded to 230 outlets before being dealt to Golden Gate Capital in 2008. Of late it has slimmed down and now has 85 company-owned locations in 22 states, plus 21 franchise locations in the U.S. and seven other countries. CEO Nishant Machado specializes in restaurant turnarounds. A Turnaround Specialist is Focusing on Transforming Romano’s. Current ownership group and management named Nishant Machado as CEO of Macaroni Grill in May 2017. Machado remains in his role as a senior managing partner at Mackinac Partners where he has led its restaurant division for six years and whose specialty is turnarounds. He said declaring bankruptcy was the key strategic move to launch Romano’s Macaroni Grill’s revival. “It was a 30-year brand that has changed ownership a number of times. For the platform going forward, we had to eliminate underperforming leases and position ourselves to restructure the business so we can build a platform that was robust, and not burned with past liabilities,” he says. Ridding those underperforming leases was critical to its turnaround. “As brands changes and cities developed, those A locations turn into B, C, and D locations, and make it more difficult to compete,” Machado adds. Machado said that the Mackinac Partners team developed a clear-cut strategy: One, strengthening the brand. Two, building a new platform. Three, eliminating burdensome leases, and four, pursuing to acquire other chains to spike revenue. Recognizing that many casual eateries, like Ruby Tuesday’s and Applebee’s were faltering compared to past results, Machado says many chains had become “generic and very mechanical. It was all about turning tables, getting people in and out. In their attempt to compete, they become too much like each other.” What differentiates Romano’s from its competitors? Machado says Romano’s possesses “several core attributes,” that differentiate the concept in a crowded marketplace. For example, Machado says it revised its “honor wine” system, where wine was placed on the table, customers would pour their own wine, and report how much they had drank. Moreover, everything at Romano’s is freshly prepared and sauces come directly from Italy, despite being more costly. Other forthcoming changes include a new brunch menu and mix and match and unlimited soup/salad lunches for less than $11. Before it introduced its new menu, Romano’s team conducted several consumer studies, aggregated social media viewpoints, and collected reactions through its website. Based on that feedback in June, it introduced 11 new restaurant items, including returning six favorites from its 30-year history—a kind of greatest hits of Romano’s such as Salmon Piccata and San Marino Chicken. Pasta Milano, in particular, has resonated with guests, Machado says. He adds Romano’s was aiming to sustain a culture of “generosity,” which encompassed “portion size, how we source our ingredients, and training our team to make sure they take the time to know their guests.” Machado describes its target audience as clientele who skew “age 35 to age 55, middle to higher income guests, who want quality.” Asked where that leaves the growing number of millennials, he says, “We don’t go chasing guests but take care of guests that come into our restaurants. The best way to double up sales is to get everyone to come back. That’s our focus.” San Marino Chicken returned to Romano Macaroni Grill’s menu along with some other classics. After Bravo Brio rejected its overtures, Machado says it was searching for another acquisition that fits its criteria. It’s pursing a brand “that will have high consumer awareness, attractive outside opportunities from an operating standpoint, and a sound real-estate portfolio,” he says. Machado admits that every turnaround, like Romano’s, presents its own hurdles and can be difficult. “If a company has been struggling, how do I create a plan and provide a vision that the entire team can buy off on and believe in?” he says. “Turning it around takes a village.” Despite its turnaround approach, one consultant isn’t convinced that a revival can happen easily or long-term for Romano’s Macaroni Grill. Gary Stibel, the founder and managing partner of New England Consulting Group, based in Westport, Connecticut, says Romano’s needs to make dramatic changes to update its menu and extend its clientele beyond Baby Boomers to attract more millennials, Generation X and Y, in order to succeed. Major changes and a path forward. “Most of the stores haven’t been remodeled. They’ve given lip service to modernizing, and added new menu items and value meals, but they haven’t repositioned the entire experience for Generation X or Generation Y. They’re classically stuck in the middle,” Stibel says. He adds that Mangiano’s Little Italy, the 52-unit Brinker-run brand, offers a more upscale atmosphere and better value, as do a score of local Italian eateries in the many cities where Romano’s is located. Additionally, Romano’s has ignored many strengths in its marketing campaigns such as its flame pits and brick ovens. “Nowadays you can’t get permits for flame pits and brick ovens. It enables them to create theatre,” he says, and yet he wonders why it’s not highlighted more. But asked about flame pits, Machado says that most guests don’t pay much attention to them, hinting it’s not a major selling point. Romano’s needs a total rebranding and overhaul to appeal to a wider clientele, Stibel says. In fact, he recommends that it consider changing its name since most people are unfamiliar with the original chef Romano, and use the firepit and brick ovens as their signature to lure new customers. Stibel says that Romano’s management has “already signaled its game plan. They’re going to try to find another restaurant chain for sale.” But he says, “It would be far better to put Romano’s on a growth trajectory and postpone acquisition until they do so.” So far, Romano’s turnaround is showing early signs of success. Machado says revenue spiked 5 percent in June from the previous year and climbed double digits in May. He attributed the spike to “reestablishing the brand identity and our core message, building an integrated marketing strategy and plan, reaching guests through a variety of platforms including digital, print, radio and home advertising, without a massive marketing budget.” – Source: FSRMagazine.
Wow Bao to Close, Relocate Chicago Unit as it Goes Cashless
Less than a year after launching Eatsa’s cashless ordering system at one of its Chicago restaurants, Wow Bao is ready to go all-in as a fully automated front-of-the-house chain. The 10-unit, Chicago-based company, created by Lettuce Entertain You Enterprises, is closing its second oldest store later this month and relocating it to a prime spot on Michigan Avenue. The new store will become a fully tech-enabled restaurant that doesn’t require employees to take orders or call out orders for pick up. The Jackson Boulevard store will serve its last meals on June 29. The new restaurant is expected to open after July 4. The decision to go with Eatsa’s proprietary technology comes after Wow Bao, which serves Asian steamed buns, potstickers and noodles, gave the tech trial run last year at another Chicago unit. Customers can order from a kiosk or through the chain’s app. Meals are prepared by back-of-the-house staff who place the orders in one of 12 personalized animated LED-lit cubbies. When a meal is ready, the guest is assigned a cubby number which displays on a screen.
Wow Bao president Geoff Alexander said as the company expands, future locations will adopt these “self-serving animated cubbies” which have shown positive results so far. “It is incredibly well received from the consumer,” he said. On a normal busy shift, Alexander said he might staff anywhere from three to six employees at a regular restaurant. But at these fully tech-enabled stores, he said the maximum amount of employees working per shift will be 1 to 2. One restaurant, he said, can operate with about 7 employees. He said Wow Bao is saving on labor but not sacrificing good service. “We’ve eliminated the cashier, and the pickup. But now, we keep someone out front to answer questions and help you. We have raised our level of hospitality,” he said. Alexander said the average ticket time is under 160 seconds. TV monitors in the dining room, akin to security cameras, feed images to the kitchen. If crowds begin to swarm, the back of the house knows to start cooking, Alexander said. Besides saving on labor, Alexander said the kiosk approach allows the brand to capture valuable data about what people are buying. “We have what you spend and how you spend it,” he said. Alexander said he expects Wow Bao’s customer base to embrace the fully automated restaurants. The brand has had kiosk ordering as an option, along with cashiers, since 2009. “Technology has always been a big part of who we were,” Alexander said. “For us, [this] is evolution.” Last year, Wow Bao received a majority investment from Chicago-based Valor Equity Partners. At the same time, San Francisco-based Eatsa closed several stores as it pivoted towards selling its technology platform to other restaurant chains. Wow Bao, founded in 2003, is scouting new locations in New York, and Washington D.C. Alexander said the company plans to open about three more stores in the Chicago area this year. By 2019, the brand plans to double its size. — Source: NRN.
Door to Door: Three New Innovations In Food Delivery
Although some purists say that food experienced via delivery can never measure up to eating in the restaurant or cooking from scratch at home, diners are consuming more delivery than ever before due to its convenience and growing options. Investment firm Cowen forecasts that delivery will grow from $43 billion to $76 billion USD in the five year period between 2017 to 2022.
UberEats, which launched in Toronto in 2015, recently announced plans to expand throughout Canada to 100 cities. “What we’re finding with food delivery is that in some places it’s actually more popular than our rides business,” said Jason Droege, vice-president of UberEverything, to The Toronto Star in June. The company is even branching out into movie theater concessions, bringing popcorn, candy and soft drinks to the stay at home cinephile (for those who want to pay cinema prices in their own kitchens.) As more companies enter the increasingly crowded delivery market, interesting innovations are popping up. Here are three innovations that recently made headlines (and may be coming soon to a doorstep near you).
Funny business. It remains to be seen how efficient the cartoon Belcher family would be at food delivery (H. Jon Benjamin’s resigned line read of Bob’s apology to a customer: “Please don’t look so sad. We’re trying, “never fails to amuse). Meal preparation company Blue Apron, however, has tossed in its lot with the fictional family with a limited time offer: delivering the fixings for some of Bb’s signature creations, such as a Gouda Wife or Absentee Shallot burger. Recipes are developed by the chef at Los Angeles-based Eggslut restaurant, Alvin Cailan. Here’s hoping they try a hot fudge car wash next.
Keep it crispy. As delivery options become more varied, avoiding sogginess on deep fried foods such as french fries becomes more of a priority for food manufacturers. Lamb Weston, the supplier for McDonald’s and KFC’s fries, has been tackling this issue in their labs. “If you put a French fry next to a shake, neither of them benefit,” Deb Dihel, Lamb Weston’s vice president of innovation told The New York Times. The company is experimenting with different batters and specifically designed bags (folded over paper ones create less of a steaming effect).
Driverless cars. In the ongoing march (or drive) towards automation, companies are turning to robots and other artificial intelligence to reduce labor costs. The retailer Kroger has partnered with Nuvo, a driverless car company, to reportedly begin the roll out of automated delivery. “We cannot just rely on physical stores to reach all of our customers for delivery and pick-up,” Yael Cosset, Kroger’s chief digital officer, told CNBC. The company faces challenges such as technological development, driving safety and infrastructure buildout (not to mentioned the well-documented phenomenon of random passerby kicking delivery robotos). – Source: Forbes.
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