The Legacy Companies Announces Acquisition of Chef’sChoice
The Legacy Companies announced that it has completed the acquisition of EdgeCraft Corporation, manufacturer of the Chef’sChoice brand, based in Avondale, PA. Founded in 1984, EdgeCraft Corporation introduced the Chef’sChoice brand with the debut of its first electric knife sharpener in 1985. Today, Chef’sChoice is available in over 80 countries worldwide, with more than 100 models of the most technologically advanced electric and manual knife sharpeners, as well as, electric food grinders and slicers, wafflemakers, grills and hot beverage products. Neal Asbury, CEO of The Legacy Companies, said, “We are pleased to announce the completion of this acquisition. It represents our continued commitment to expanding our USA based manufacturing operations and building our portfolio of Legacy brands. I also want to congratulate the Management Team at EdgeCraft for their strong leadership and their effort in positioning the Chef’sChoice brand for future growth. I look forward to working with the dedicated and talented EdgeCraft employee base.” Mr. Asbury also emphasized that Chef’sChoice will remain headquartered in Avondale and will maintain its current operations there. “It is our intent to help grow Chef’sChoice right there in Avondale, Pennsylvania, where it’s been since 1990,” he added. Sam Weiner, EdgeCraft’s President, commented, “We have spent significant time with The Legacy Companies’ management team and are convinced the culture and ambition is similar to what we’ve built at EdgeCraft. It’s exciting for EdgeCraft to be an official part of The Legacy Companies where we can leverage the resources and brand expertise of each company to further innovate and develop our products to accelerate growth worldwide.” Source: The Legacy Companies.
Restaurant Industry Added Nearly 10K Locations in 2015
Although the restaurant industry added a net 9,877 establishments in 2015, it expanded at a rate below the overall private sector for the second consecutive year, according to the NRA’s Chief Economist Bruce Grindy. The restaurant industry continued to expand at a moderate pace in 2015, according to preliminary figures from the Bureau of Labor Statistics. The restaurant industry added a net 9,877 establishments* in 2015, an increase of 1.7 percent. The 2015 increase was an improvement over the net 8,503 locations (+1.5 percent) added in 2014, and represented the strongest annual gain since 2012. However, 2015 marked the third consecutive year in which the industry expanded by fewer than 10,000 establishments, a threshold that was commonly eclipsed in the mid-2000s. Meanwhile, the overall private sector added a net 185,152 business establishments in 2015, a solid 2.0 percent increase over 2014. The 2015 gain represented the strongest annual expansion since 2006, when the economy added more than 210,000 business establishments. The private sector’s strong 2.0 percent increase in 2015 also marked the second consecutive year in which restaurant industry expansion was outstripped by the overall private sector, after posting a stronger growth rate in each of the previous 8 years. Within the restaurant industry, the quickservice segment added the most units in 2015. The quickservice segment added a net 4,819 establishments in 2015, a 2.2 percent increase over 2014 and the largest expansion since a net gain of 5,384 locations in 2003. The fullservice segment added a net 2,916 establishments in 2015, which was up slightly from an increase of 2,438 locations in 2014. However, the dampened 2014 and 2015 gains came on the heels of four consecutive years of fullservice expansion above 3,000 units. The snack and nonalcoholic beverage bar segment – which includes concepts such as coffee, donut and ice cream shops – added a net 1,499 locations in 2015, a 2.9 percent increase over its 2014 level. Although it outpaced the fullservice and quickservice expansion rates, the segment’s 2015 increase represented a slowdown from its much stronger growth rates of 3.0 percent and 4.2 percent in 2013 and 2014, respectively. *The establishment figures, which are based on unemployment insurance filings of businesses that have wage and salary employees, represent the most comprehensive census of establishments with payroll employees on the national, state and local levels. – Source: The National Restaurant Association.
McDonald’s HQ Move is Boldest Step Yet in Effort to Transform Itself
McDonald’s has taken the boldest step yet in its yearlong effort to transform itself into a “modern, progressive” company by moving downtown with the cool kids. The world’s largest burger chain plans to relocate from the custom-built Oak Brook headquarters it has called home for nearly four decades to Chicago’s West Town neighborhood, an area of hot restaurants and bars, becoming the latest corporation moving to be closer to the millennials they want as employees. McDonald’s didn’t receive any incentives for the move from its longtime home in Oak Brook, a nod to how vital the move was as a symbol of McDonald’s transformation under CEO Steve Easterbrook. McDonald’s will move by spring 2018 to the former site of Oprah Winfrey’s Harpo Studios at 1045 W. Randolph St., which was home to “The Oprah Winfrey Show” for 25 years. The move will bring McDonald’s corporate employees, which currently number about 2,000, from the suburban village to the hustle and bustle of a burgeoning part of the city that is home to some of Chicago’s most popular restaurants, like Girl and the Goat and Au Cheval. In its bid to attract talent, McDonald’s will join a roster of heavy hitters that already have or plan to move from the suburbs to the city — marquee names like Motorola Solutions, Kraft Heinz, Gogo, Hillshire Brands, Beam Suntory and ConAgra. Rumors that McDonald’s was considering a move have been swirling for months. To me, this just shows the commitment level Steve (Easterbrook) has toward revitalizing and making a more streamlined business,” Morningstar analyst R.J. Hottovy said. “This is obviously part of the company’s cost-cutting efforts: to create a more condensed and modern headquarters, but they will also attract a different, more tech-savvy kind of employee.” The planned relocation is the biggest change thus far for Easterbrook, who already has seen success from big initiatives to improve the business, most notably the launch of all-day breakfast. The executive, who was installed in the top job in March 2015, promised that “nothing is off the table” when it comes to change at the company, acknowledging the chain in the past has been slow to adapt to its customers’ needs. Under Easterbrook’s leadership, McDonald’s has seen consistent sales growth and a stock price at repeated all-time highs. “We are a brand on the move in more ways than one,” Easterbrook said in a news release. “Moving our headquarters to Chicago is another significant step in our journey to build a better McDonald’s. This world-class environment will continue to drive business momentum by getting us even closer to customers, encouraging innovation and ensuring great talent is excited about where they work.” More young workers want to live in the city today than they did in the 1970s, when McDonald’s first left Chicago for the suburbs. In addition to office space for corporate employees on its wooded Oak Brook campus, McDonald’s has test kitchens as well as a Hyatt-operated hotel called “McLodge” and Hamburger University, a training center for executives and managers. McDonald’s was headquartered in Chicago from 1955 to 1971. “There is some millennial talent in the suburbs but it’s harder to find and it’s easier to create a culture in the city,” said Tom Gimbel, founder and CEO of Chicago-based staffing and recruiting firm LaSalle Network. “There is an energy level that comes from new hires. It touches everything.” Easterbrook also has said the Oak Brook campus, which was custom-built for the company in 1978 by renowned architect Dirk Lohan, is showing its age. Gimbel agreed. “That campus is as old as dirt. It was really great and cutting-edge in the ’80s, but it’s old, it’s dated, it needed to be redone,” he said. By moving, “McDonald’s is saying, ‘We’re still leading, we’re still innovative.’ They don’t want to end up being Sears.” The loss will be a sizable one for Oak Brook. McDonald’s is the only Fortune 500 company based in the suburb. It’s unclear how many employees will occupy the new West Town headquarters building, but the company is leaving no operations behind in Oak Brook. McDonald’s operates an 86-acre campus but owns 150 acres of land across five sites in the village, including its original Oak Brook location at 2111 McDonald’s Drive, which now houses the offices of its U.S. business. Financial terms of McDonald’s West Town lease weren’t disclosed. Developer Sterling Bay bought the studio complex for $30.5 million in 2014. Harpo ended production of there last year. No details of the redevelopment have been disclosed. McDonald’s also has not determined if it will consolidate its River North digital office, opened just a year ago, into the new West Town complex, spokeswoman Becca Hary said. With the Chicago deal finalized, Hary said the company will begin to market the Oak Brook facilities to potential buyers. “I think it takes a really brave soul to say, ‘We’re walking away from that history,’ but in this day and age, you’ve got to be willing to reinvent yourself,” Gimbel said. – Source: The Chicago Tribune.
Grand Rapids Restaurant Group Buying 18 Wendy’s
Meritage Hospitality Group Inc. says it will own 18 more Wendy’s restaurant by the end of summer. The Grand Rapids restaurant operator announced Wednesday, June 8, the purchase of eight Wendy’s restaurants and a deal to buy 10 more in the Oklahoma City area. The second acquisition is expected to be completed in late summer, the company said. “We are very excited about the opportunity to expand our footprint west of the Mississippi River with a portfolio of Wendy’s restaurants which have a long operating history and a market area with new restaurant growth opportunity,” Chief Executive Officer Robert Schermer, Jr. said in a statement. The company didn’t reveal how much it paid, but noted the investment was a combination of cash and a loan from Mercantile Bank. The deal marks the 15th acquisition in five years for the over-the-counter, publicly-traded company. Schermer said the company will integrate the new restaurants into its web-based operating and accounting systems platform. The eight restaurants are expected to boost the company’s annual revenues by $11.5 million. Meritage reported that in 2015 revenues rose 31 percent to $210 million, and profits jumped 154 percent to $10.7 million. During that year, the company bought up 26 restaurants. Schermer didn’t immediately respond to a request for additional information from MLive and The Grand Rapids Press. This year, Meritage is also renovating 18 Wendy’s locations and opened a flagship restaurant Wheelhouse, in the newly-opened Arena Place, where its headquarters are relocating. The company said it dropped plans to buy 19 casual restaurants, but didn’t provide details about the failed deal. Meritage also owns and operates the Crooked Goose in Standale and Twisted Rooster restaurants in Grand Rapids Township, Belleville and Chesterfield; Freighters Eatery & Taproom in the new Blue Water Convention Center development in Port Huron. The growing company now has a workforce of 5,500 employees and operates 173 restaurants in Florida, Georgia, Michigan, North Carolina, South Carolina, Ohio, Oklahoma and Virginia. – Source: MLive.com, Michigan.
Innovative Dining Group Names New COO
Innovative Dining Group has named Nicolas Kurban, formerly of Four Seasons Hotels, its first chief operating officer, the company said. Kurban started work in the newly created position last week. He will oversee both domestic and international operations and lead new growth for the hospitality group’s brands, IDG said. Previously, Kurban served as corporate vice president of food and beverage for Four Seasons Hotels in the Asia Pacific region. He held similar senior leadership positions with Crown Casino in Melbourne, Australia, and Borgata Casino and Hotel in Atlantic City, N.J., as well as Wynn Casino and Resort in Las Vegas. In addition, Kurban has worked with several top celebrity chefs, including Wolfgang Puck and Thomas Keller, managing restaurants in Las Vegas like Spago and Bouchon Bistro, IDG executives said. “Kurban possesses an invaluable combination of restaurant-level operation experience, brand and corporate-level management expertise, as well as thoughtful, focused, hands-on leadership,” said Lee Maen, IDG founder and partner. “As we enter our next chapter of innovation and expanded growth, Kurban will play an integral role in our evolution, drawing on his extensive knowledge and connections in international markets.” Based in Los Angeles and celebrating its 20th anniversary in 2017, IDG is the operator of the high-end restaurants Sushi Roku, BOA Steakhouse, Katana, Robata Bar and ROKU, with locations in Los Angeles, Las Vegas, Scottsdale, Ariz., Newport Beach, Calif., and the Middle East. The group is also a partner in two locations at Los Angeles International Airport, B Grill by BOA Steakhouse and Luckyfish. A location of Katana is scheduled to open in Chicago at the end of the year. Source: NRN.
Ruby Tuesday, Inc. Appoints Sue Briley as Interim Chief Financial Officer
Ruby Tuesday, Inc. announced the appointment of Sue Briley, Vice President of Finance, as Interim Chief Financial Officer. Ms. Briley is an experienced finance leader with expertise in strategic planning, financial planning and analysis, capital budgeting, operations finance, and marketing analysis. She has worked in the restaurant industry for more than 20 years and has held her current position at Ruby Tuesday since July 2014. Prior to joining Ruby Tuesday, Ms. Briley was sole proprietor of Symmetry Financial Consulting. From November 2012 to July 2013, she served as Director of Financial Planning and Analysis at Margaritaville Enterprises. Before that, Ms. Briley held several finance, accounting, and treasury positions at Darden Restaurants. These included Finance Manager from July 2005 to November 2012, when she led the sales and marketing plan, FP&A and estimate process for Darden’s Specialty Restaurant Group, and Senior Financial Analyst from October 1999 to July 2005, when she was involved in operations finance, treasury, tax and purchasing analysis. Ms. Briley earned a Bachelor of Science degree with a major in Finance at Florida Southern College and an Executive MBA from Strayer University. “Sue’s extensive restaurant experience makes her an ideal fit to assume the CFO position on an interim basis while we search for a permanent successor. Her ability to take on these additional responsibilities is also reflective of the strong financial team we have in place which is enabling us to push forward with our brand transformation strategy,” said JJ Buettgen, Chairman of the Board, President, and Chief Executive Officer. Source: Ruby Tuesday, Inc.
Rubio’s® Restaurants Completes Acquisition of New Florida Locations
Rubio’s Restaurants announced that it has completed the acquisition of eight restaurant locations in Florida previously operated as Lime Fresh Mexican Grills. Rubio’s will soon begin construction to convert these to new Rubio’s Coastal Grill® restaurants, marking the California-based company’s first expansion to the East Coast. As announced last fall, Rubio’s agreed to acquire the select Florida Lime Fresh Mexican Grill restaurant locations from its parent company, Ruby Tuesday Inc. The deal was subject to customary closing conditions, including obtaining certain consents and permits, and is now completed. Located in Miami, Ft. Lauderdale, Tampa Bay, St. Petersburg and Winter Park, the new restaurants are scheduled to open in the fall of 2016. Rubio’s Coastal Grill is known for pioneering the fish taco and for its unique and craveable coastal cuisine. Co-Founder Ralph Rubio brought his love of fish tacos to the United States after a college trip to Baja California, Mexico. Since its first restaurant opened in San Diego in 1983, Rubio’s Coastal Grill has established a passionate fan base throughout the Southwestern United States and has been credited for starting the fish taco phenomenon in America. Cited by The Washington Post and Los Angeles Times as the country’s top fish taco expert, Rubio’s has sold more than 200 million Original Fish Tacos®. “The acquisition of these eight Florida locations is a huge milestone for our company as it marks our first expansion to the East Coast,” said Rubio. “We’re incredibly excited to start transitioning the restaurants to Rubio’s Coastal Grill and look forward to opening the first location this fall.” Rubio’s uses sustainable seafood in nearly all of its seafood dishes and has expanded its menu with inventive recipes, ranging from sustainable Grilled Gourmet Shrimp Tacos and Burritos to a California Bowl made with Wild Alaska Coho Salmon and a Chipotle Orange Salad with Wild Pacific Mahi Mahi. Other items – including burritos, bowls and fresh salads – feature Rubio’s grilled marinated chicken and steak, “no fried” pinto beans, handmade guacamole and a variety of signature salsas. With the addition of the Florida market, Rubio’s Coastal Grill owns and operates nearly 200 restaurants. Source: Rubio’s® Restaurants.
Freshii Eyes Stadiums, Airports as Grab-and-Go Offerings Expand
Freshii, the healthy quick-service chain that broke into the Chicago market in 2008, is on the move with plans to open as many as six new locations in the area by the end of the year. Founded in Toronto in 2005, Freshii currently has 29 Chicago-area locations and is laying the groundwork for more restaurants in varying formats. The chain is tweaking its largely customizable menu to offer more grab-and-go options. That’s an adjustment made to cater to customers at Freshii locations inside other stores, like Target and, more recently, Walgreens. Solidifying its grab-and-go options is a move Freshii hopes could eventually lead to deals with the city’s sports stadiums and airports, according to David Grossman, the “master franchisee” in the Chicago area. About half of Freshii’s sales currently come from custom-made items, like salads and wraps, Grossman said, and he’s working on how to shift the menu in ways that will open the door for further expansion. “Customization at a ballpark doesn’t work,” he said. “People want to be able to grab something quick in between plays.” Grossman said the company has had some initial discussions with officials at the United Center, Wrigley Field and O’Hare International and Midway airports. The next stand-alone restaurant is set for the West Loop, with a planned opening date of June 15. Another Freshii is scheduled to open at the Target in Lincoln Park on July 8, and the next is planned for the Illinois Center in August, according to Grossman. Grossman aims to have 35 Freshii locations open in the area by the end of the year, and the ultimate goal is to expand to about 50 locations here. “Obviously if I want to have 50 stores, I’m going to have to look at the suburbs and Chicago neighborhoods,” he said. “There’s not much more room for us to open in the Loop.” Grossman said he’d “love” to expand into Naperville, Schaumburg, Glenview, Northbrook, Deerfield or city neighborhoods like Andersonville. Freshii, which has licensed operations in several area Target stores, opened its first counter in Walgreens last month, at the retailer’s Wrigley Building flagship location. It is expanding the concept to flagship stores in Miami and Boston as well, Grossman said. Freshii is using the Walgreens location in Chicago as a testing ground for a number of grab-and-go items, which can be purchased by customers even after the Freshii is technically closed. Those items, Grossman hopes, will serve as a base for expansion into stadiums and airports. “So far, sales are going great, they’re building every day,” Grossman said of the Walgreens location. “We opened very quietly and we are still under the radar.” More grab-and-go options also will make Freshii more competitive with chains like Pret A Manger, Grossman said. He says he’s not concerned by the plethora of healthy food chains that have expanded or come into the market in recent years, like Lyfe Kitchen, Protein Bar and Sweetgreen, which is set to debut in Chicago in late summer. “I think it’s just the tip of the iceberg” for the growth of healthy chains in Chicago, Grossman said. “I really do think we’re all going to do better as more people eat healthy. You know that saying, ‘a rising tide lifts all boats.'” – Source: The Chicago Tribune.
Papa John’s International among the First U.S. Brands to Enter in Tunisia
Papa John’s International, Inc. continues to set the bar high for quality pizza not only domestically, but internationally by being among the first U.S. restaurant brands to enter Tunisia. Following Egypt, Tunisia will be only the second country in Africa to boast a Papa John’s franchise. Just recently, Tunisia opened their borders to outside franchising. Franchisee, Mr. Sofiene Ghali, a Tunisian leader in the QSR industry, is excited to bring a high-quality hand-made pizza to his home country. Owning and operating over 25 hamburger and sandwich restaurants, Mr. Ghali knows that one of the first U.S. restaurant brands to enter Tunisia should satisfy what the citizens are craving – high quality, freshly made pizza. “We are honored to be a part of bringing Papa John’s to Tunisia. There is a strong demand for high-quality pizzas and friendly service, said Mr. Ghali, owner and operator of the Papa John’s in Tunis, Tunisia. “Papa John’s original hand-tossed fresh, never frozen dough, fresh-packed tomato sauce and high quality cheese made from mozzarella make a truly better pizza.” “The Papa John’s brand continues to grow in Northern Africa and we are pleased to partner with Mr. Ghali as he opens his first restaurant in Tunis, Tunisia,” said Tim O’Hern, Senior Vice President & Chief Development Officer of Papa John’s International, Inc. “We are looking forward to introducing everyone in Tunisia to our quality ingredients and better pizza.” As Papa John’s continues to build relationships internationally, the partnership with Mr. Ghali will mark the start of Papa John’s expansion into Northern Africa, including plans to open another restaurant in Morocco later this summer. With regard to European growth, Papa John’s recently opened its first restaurant in Northeastern France in late May 2016 and anticipates continued growth in the region. Source: Papa John’s International.
Kent Rathbun Steps Down from Daily Operations of Abacus, Jasper’s
Famed restaurateur Kent Rathbun has resigned from day-to-day operations at the Dallas-based multi-concept group named for him, the company said. In a statement, Bill Hyde, partner in Kent Rathbun Concepts, said Rathbun will be relinquishing daily activities to “pursue other avenues of interest,” though he will remain a stakeholder in the company. “We are currently exploring his new role and welcome his continued engagement for the benefit of our guests, staff and company,” Hyde said. “We are extremely proud of the culinary talent we have placed in each restaurant and look forward to continuing to serve our valued guests.” No further details on Rathbun’s plans were available. Kent Rathbun Concepts operates the fine-dining restaurant Abacus in Dallas, which opened in 1997, a concept that has won national acclaim. Jasper’s was developed as a more-casual concept, described by the company as offering “gourmet backyard cuisine.” Kent Rathbun Concepts operates three locations of Jasper’s in Plano, Richardson and Woodlands, TX. A Jasper’s location in Austin closed in May when a lease expired, but the company is looking for a new location there. The newest of the group’s concepts is Hickory in Plano, which opened in 2015, and features burgers and barbecue. The company also operates a private event space called The Kitchen at 6130 and Kent Rathbun Catering. – Source: Restaurant Hospitality.
Ruby Tuesday Sells Remaining Lime Fresh Assets for $4.6M
Ruby Tuesday Inc. has sold the remainder of its Lime Fresh Mexican Grill franchised holdings to EverFresh Endeavors for $4.6 million, the company said. The Maryville, Tenn.-based casual-dining company also said it had completed the earlier announced $6 million sale of eight Lime Fresh units to Rubio’s Restaurants Inc., which is rebranding the locations as Rubio’s Coastal Grill. Six of the sold Lime Fresh locations had already been closed. Ruby Tuesday said EverFresh Endeavors is a joint venture between Triout Holdings, Mandala Holdings and Belmont Investment Corp. The six franchise-owned Lime Fresh Mexican Grill restaurants in South Florida will remain open and operate as Lime Fresh Mexican Grills by the individual franchise owners, the company said. Ruby Tuesday on Nov. 6 said it would close 11 of its owned Lime Fresh units, which it had acquired in April 2012 for $24 million. The company said the sale agreement with EverFresh includes the intellectual property rights and franchising rights for Lime Fresh Mexican Grill. “Lime Fresh Mexican Grill is a strong brand with broad customer appeal,” said JJ Buettgen, Ruby Tuesday’s CEO, president and chairman, in a statement. “However, we believe focusing exclusively on the brand transformation of our namesake Ruby Tuesday restaurants is in our shareholders’ best interest.” As of March 1, Ruby Tuesday owned and franchised 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries and Guam. It owned 649 Ruby Tuesday restaurants and franchised 80 units. – Source: NRN.
Starbucks, Anheuser-Busch to Partner on Bottled Teavana Teas
Anheuser-Busch and Starbucks announced a deal to produce, bottle, distribute and market Teavana ready-to-drink teas in the United States, with products expected to be available in the first half of next year. The world’s biggest coffee chain bought tea seller Teavana in 2012. The bottled teas falling under Starbucks’ agreement with the maker of Budweiser beer will not contain alcohol. Anheuser-Busch will lead production, bottling and distribution to retailers nationwide in partnership with its established network of wholesalers, the companies said. Starbucks and joint venture partner PepsiCo Inc. market, sell and distribute ready-to-drink coffee products in the United States. PepsiCo already has a ready-to-drink tea partner. It joined with Unilever in 1991 to form the Pepsi-Lipton Tea partnership. – Source: Reuters.
Quiznos CEO Doug Pendergast Steps Down
Doug Pendergast is stepping down as president and CEO of the Quiznos sandwich chain to spend more time with his family in Atlanta, the company said. Katie Scherping, Quiznos chief financial officer, will serve as interim president and CEO. Company executives said that Pendergast would stay to help with the transition until June 24, but Scherping will take the reigns immediately. Pendergast joined the Denver-based chain in January 2015, not long after Quiznos emerged from bankruptcy protection following the completion of a financial restructuring. The chain was also shrinking, reaching about 1,000 locations at the end of fiscal 2014, compared with more than 5,000 in 2006. Pendergast worked to build trust with franchisees, and refocused the brand on value pricing, improving customer satisfaction scores and enhancing support for operations and occupancy costs, the company said. During his tenure, the company also launched a new fast-casual concept called Quiznos Grill as a learning lab for the brand’s turnaround efforts. Pendergast said in a statement that leaving was a difficult decision. “Ultimately, I need to put my family first,” he said. “I sincerely thank the entire Quiznos system for all that we have accomplished as a team.” Quiznos chairman Doug Benham, said in a statement: “We believe Quiznos is a stronger company as a result of Doug’s work. Under his leadership, we’ve accomplished several major brand initiatives to help advance our business. We thank Doug for his dedication to the Quiznos brand and have full confidence in Katie and the management team to continue the brand on a successful path forward.” Scherping joined the company in 2013 as CFO and spearheaded the financial restructuring and overhaul of the food cost and supply chain model to improve restaurant-level economics, the company said. Most recently, Scherping led the rollout of Quiznos’ new point-of-sale system, which the company said will help bolster sales and lower costs. Quiznos celebrates its 35th anniversary this summer. – Source: NRN.
Johnny Rockets to Open 14 Restaurants In Malls This Year
Johnny Rockets plans to open 14 additional mall locations this year, serving up both a restaurant design and quality food that appeal to the appetite of the mall consumer. With more than one third of its domestic and international restaurants already located in malls, the brand has solidified itself as a leader in that niche market due to its flexible footprint and focus on bringing better burgers, fries and shakes to shoppers. “Over the last several years, mall management has been looking to add diversity to its food courts and expand its lunch and dinner offerings to include more full-service and fast casual concepts. With franchise restaurants such as Johnny Rockets, mall executives are looking for brands with a history of strong performance and adaptability in this space,” explains James Walker, president of Global Operations and Development, Johnny Rockets. “In our 30-year history, Johnny Rockets has always been a guest-favorite in entertaining environments, fitting well within different mall footprints. As malls revamp and add higher-end retail, more unique food offerings and entertainment venues—movie theaters and bowling alleys—Johnny Rockets’ various prototype options provide something for every demographic and geographic region.” In honor of its 30th anniversary, Johnny Rockets recently announced a brand refresh, which included a new restaurant design and logo. The refresh carries through to the menu where time-honored traditions such as hand-spun milkshakes are now complimented by unique new offerings such as craft sodas and floats. The brand also boasts the best burger in any town and specializes in best-in-class service and upbeat music. The new restaurant design, which was first introduced at Destiny USA Mall in Syracuse, New York, includes modern technology, a fresh design and enhanced staff uniforms. Since the refresh, the Destiny USA Mall location has experienced a nearly 22 percent growth in restaurant sales. In addition to its mall franchise program, Johnny Rockets has also successfully expanded into outlet centers, which now attract more shoppers with higher-end retail stores and food offerings according to recent trends. The brand currently operates 18 outlet locations and is planning an additional five in the near future. Source: www.fsrmagazine.com
Amusements Boost Dave & Buster’s 1Q Profit
An increase in revenue from amusements helped boost Dave & Buster’s Entertainment Inc. profit in the first quarter ended May 1, the company said. The Dallas-based company reported a 59.5-percent increase in profit, to $31.2 million, or 72 cents a share, from $19.5 million, or 46 cents a share, in the prior-year period. Revenue increased 17.7 percent, to $262 million, from $222.7 million in the same quarter last year. Same-store sales increased 3.6 percent in the quarter, compared with a 9.9-percent increase in the same period last year. Steve King, Dave & Buster’s CEO, said in a statement that the entertainment venue operator was noting a “continued shift in revenues to our higher-margin amusement category.” In the first quarter, amusement and other revenues rose 21.6 percent, to $144.9 million, eclipsing food and beverage revenue, which increased 13.1 percent, to $117.1 million. “Food and beverage represented 44.7 percent of total revenues, while amusements and other represented 55.3 percent of total revenues in the first quarter 2016,” the company said in an earnings release. In the same quarter last year, food and beverage sales were 46.5 percent of total revenue, and amusements and other represented 53.5 percent. “We are off to a great start in fiscal 2016 with results that surpassed our expectations and are pleased to already be raising our annual outlook,” King said. “Our unique entertainment, dining and sports-viewing venues are demonstrating their broad-based appeal despite challenges affecting many of our casual-dining peers.” King said Dave & Buster’s was “committed to keeping our brand fresh through a continuous stream of ‘new news’ to further differentiate ourselves.” The company raised its guidance for fiscal 2016, including boosting its forecast same-store sales to a range of between 3.3 percent and 4.3 percent from 2 percent to 4 percent. It also announced that its board has authorized a $100 million share repurchase program. Dave & Buster’s owns and operates 84 venues in 30 states and Canada. Source: NRN.
The Rise of the “Luxury QSR” Restaurant Model
A new restaurant sector pokes its way out of the shell in California. At this year’s National Restaurant Association gathering in Chicago, Euromonitor International’s Global Food and Beverage Lead Michael Schaefer told a roomful of restaurateurs that one of the biggest trends going forward across all restaurant sectors was a shift from fast casual and QSR as we know them, to something he referred to as “luxury QSR.” To elaborate on that point, he gave some examples, like the increasing number of young, well-trained chefs in the industry who’ve opted to go into business with food trucks or pop-up restaurants. These are food service businesses that focus on rapid creation and delivery of food that’s prepared with lots of high-end touches, like upscale baked goods, condiments and coffee, which he referred to as the “new fragrance.” In short, Schaefer said his company’s research shows, “People want to indulge,” but they don’t have a lot of time, so quick delivery is essential. Now, just a few weeks out of that session, one of the first players in that “luxury QSR” realm has entered the restaurant scene. The innovators behind a new chain called, Starbird, and its first location in Sunnyvale, California, call the concept “super-premium fast food,” rather than “luxury QSR,” but the concept remains the same as that described by Schaefer since Starbird also revolves around rapid food creation and delivery of menu items made with higher-end ingredients. So, if this is indeed the start of a super-premium fast food or luxury QSR category, is it really a separate distinction? It looks like it is and here are some of the distinctions: * Higher-end, locally and responsibly sourced ingredients. Chicken, as you might have guessed from the name, is Starbird’s main attraction. But those behind the restaurant make it very clear that this is not just any chicken, and that’s a key distinction that is increasingly important to a growing number of Americans, according to Euromonitor research, which shows that people not only want to know where their food came from, but also to feel good about it. That’s why Starbird’s birds come by way of a California organic, free-range chicken farm called Petaluma. Eggs are all from cage-free chickens. Sandwiches are served on house-made organic flour rolls. The coffee is ground and brewed to order. And even the chocolate cones for the house-made ice cream drumstick dessert is made by hand at the restaurant. This is, in short, food that people can eat without guilt or concern. * Speed is the co-star. Those behind Starbird explain that their whole concept is built around a restaurant ordering app of the same ilk of those that are rapidly transforming the entire food service industry. Through that technology, Starbird not only achieves the “quick” in QSR, but eliminates the much-loathed drive-thru line that a recent survey said millennial parents will do just about anything to avoid when their kids were in the car. Instead, guests here place their orders whenever and wherever they choose, then upon arrival at the restaurant, guests hit “I’m here” on the app and their food is delivered within five minutes to the table or a numbered parking spot in the lot. No drive-thru line. “Our lives and our expectations have changed dramatically since the advent of the original drive-thru,” said the concept’s founder, Aaron Noveshen. “We’re adapting to the new needs of our tech-savvy and culinary-conscious community. We’re changing the traditional fast food landscape with new expectations, new standards and new ideals for quick service dining.” * Re-invention of the food service employment model . Starbird is the brainchild and first product of dining incubator, Culinary Edge Ventures. That organization was founded by Aaron Noveshen, Stephen Goldmann and Steven Goldstein. Aside from ingredient quality and delivery speed, the trio said it was important with this restaurant concept to do something a little different to make the brand a career destination, rather than the temporary, hold-over job that many see food service to be. The trio thought it important to build something into their system of hiring and training that not only attracted the best employees, but retained them and helped them grow careers with the company. Acknowledging that this track might not be the case for all employees, the trio created a multi-path program that provides a special program for those who want to move into a job at the restaurant and move up the career ladder. One-on-one training and mentorship are key features of this program, which will be worth watching to see if it is successful. The results could give others across food service something to ponder to address the pervasive and constantly vexing problem of uncommitted and often transient employees. Source: The National Restaurant Association.
It’s Show Time for Shake Shack at Mall of America
It’s show time for Shake Shack at Mall of America More than 80 people were waiting in line at 11 a.m. when it opened. Kuwait City and Dubai already have it. And now, so does Minnesota. The highly anticipated burger joint Shake Shack opened at the Mall of America with more than 80 people waiting in line at its 11 a.m. start. It is the New York based chain’s 95th location around the world — and its first in the U.S. to be located in a fully enclosed shopping mall. Shake Shack has been taking its time to expand across the U.S., chiefly with company owned stores. Overseas, it has lined up franchisees, allowing it to spread quickly across 10 countries. Shake Shack first entered the Midwest a year and a half ago with a handful of locations in Chicago. “We’re growing slowly and looking at great places across the U.S.,” said Andrew McCaughan, Shake Shack’s vice president of development, during a soft opening event for friends and family on Wednesday. “We’re not in Dallas or Houston yet. We just opened our first L.A. location. We’re opening about 16 a year [in the U.S.], so we’re growing at a very methodical pace.” While the chain doesn’t have any immediate plans for more locations in the Twin Cities, he said it is scouting out neighborhoods around town for possible spots down the road. “Nothing to report yet, but we’re definitely keeping our eyes open,” he said. “So future Minnesota locations may be in the cards.” While this is the chain’s first mall-based location in the U.S., McCaughan added that the company has a broad approach to its real estate strategy. It continues to love stand-alone urban locations, such as its first spot in Manhattan’s Madison Square Park, which opened a little more than a decade ago. Shake Shack also has popped up in airports and stadiums as well as shopping centers. The new 2,800-square-foot location is on the third floor of the Mall of America’s recent addition on the north side, in the food court dubbed Culinary on North. Melt Shop, Piada Italian Street Food, and Disco Fries are some other recent arrivals to that corner of the mall. A Naf Naf Grill is coming soon. On the other side of the mall, also on the third floor, is another burger-focused establishment, Burger Burger, which opened late last year. Like Shake Shack, Burger Burger also sources its beef from Minnesota and has a number of beers on tap. It is a venture of Kaskaid Hospitality, which also operates Crave and other restaurants around the Twin Cities. While some have taken notice of the head-to-head burger battle, both companies brush it off. “How many places are there to buy jeans at the mall?” Kam Talebi, a Kaskaid executive, said to the Star Tribune earlier this year. “That doesn’t keep Old Navy away. We knew about Shake Shack. They’re in the new development at the mall, it’s completely different from where we’re located, it’s practically a different ZIP code, that’s how far away they are from us.” McCaughan, the Shake Shack executive, also didn’t seem worried about an overlap. “I hope they do well,” he said. “There is a lot of great burgers out there. … We just opened in L.A., where there’s In-N-Out, one of my favorite burgers as well. We just do our thing.” Source: Star Tribune, Minneapolis.
This Restaurant Just Unseated Chipotle as the Most Popular Mexican Chain
People with a hankering for a burrito are no longer beelining for Chipotle first. Or second, or third, or fourth. Moe’s Southwest Grill, a Tex-Mex chain with less than half the number of locations as Chipotle, has unseated the former fast casual king as the most popular brand selling Mexican-inspired food, according to an annual survey out Thursday from Harris Poll that measures how people feel about restaurant brands. Moe’s has more than 650 restaurants to Chipotle’s more than 1,900. Moe’s, which is owned by the same company that operates shopping mall mainstays Auntie Anne’s and Cinnabon, claimed the “Brand of the Year” title for fast casual Mexican restaurants for the first time, while Chipotle fell hard. The No. 1 pick for the past three years, it’s now ranked below not only Moe’s but Taco Bell, Qdoba and Baja Fresh. The survey is yet another sign of the harsh impact Chipotle’s food-safety issues have had on the brand in the past year. Chipotle has been grasping at a former semblance of its reputation as a purveyor of fresh food in the months since dealing with multiple incidences of E. Coli and norovirus at restaurants across the country. Sales tanked, a rude awakening for a brand that had been wildly popularity for years. The company has said customers are coming back around though, and has tried to lure customers back with offers for free burritos and buy one, get one deals. In the first quarter, sales at stores open at least a year fell nearly 30%, though the company said transaction volume improved as the quarter went on. A free burrito offer in February had a 67% redemption rate. But beyond Chipotle’s issues, the fast casual restaurant landscape has also become more competitive as chains have gone head to head to offer customers healthier food and new menu options. Qdoba rolled out a new taco menu last year with fillings like tequila lime chicken, steak and bacon; Taco Bell has gained prominence for its breakfast menu and started selling alcohol in some restaurants last year. Moe’s is known for a wide selection of ingredients for build-your-own tacos, quesadillas and burrito bowls — the brand also frequently offers limited time menu additions, such as an ancho chili lime rice bowl and seasonal salsas like ghost pepper and mango tomatillo. Chipotle, meanwhile, has rarely introduced new menu items, and some say the company hasn’t done enough to show customers its food is safe to eat, even though it has adopted new food safety protocols. “Their sales have been under tremendous pressure,” says Andrew Charles, an equity research analyst with Cowen and Co. who follows both Chipotle and Qdoba. “Brand perception is down. In retrospect, I just don’t think they did enough to convince customers that Chipotle food was safe to eat,” pointing out that there are no signs in stores alerting customers to the changes and announcements on social media have been scarce. Moe’s rose to the top for ranking the highest in familiarity, quality and purchase consideration. Harris Poll surveyed more than 97,000 U.S. consumers for their thoughts on more than 3,800 brands, including more than 60 restaurants. Each respondent was given a list of 40 randomly selected brands to rate. Moe’s has benefited from a rapid expansion in recent years, which has given the brand a stronger position as a Chipotle alternative, says Lisa Recoussine, vice president of client services at Nielsen, which owns Harris Poll. Moe’s opened 70 new restaurants last year, when sales hit nearly $640 million. To be sure, Chipotle still has much larger market share and sales, which were $4.5 billion in 2015. According to Placed Insights, an analytics firm that measures traffic trends, just 2.3% of the U.S. population visited a Moe’s last month, while nearly 9.4% visited a Chipotle. Though the poll results show Moe’s may be poised to steal more customers, says David Shim, CEO of Placed Insights. “Moe’s has an opportunity to continue to convert that brand equity into restaurant visits,” Shim says, “closing the visitation gap with Chipotle.” – Source: USA TODAY.
Reinvigorated Boston’s Sets its Sights on National Expansion
Sometimes a company needs to contract before it can expand. Since 2013, Boston’s Restaurant & Sports Bar has undergone a large shift in both its physical locations and its corporate operations in an effort to expand their business. The family-friendly restaurant and sports bar concept, the sister company to Boston Pizza, a ubiquitous Canadian franchise with a 52-year history and over 390 locations, wants to start matching its success up north with its American and Mexican counterparts. “I’ve been with Boston’s for about two-and-half years, and during that time we have worked very hard to professionalize and upgrade our support team here,” says Troy Cooper, COO of Boston’s Restaurant & Sports Bar. “My background has been in rapid expansion and turnaround. I’ve been in the Dallas area in casual dining for a number years, so I had a pretty big network, and as we needed various players to come in, we’ve been very lucky in getting the right ones in.” When he arrived at Boston’s in September 2013, the company had a number of underperforming locations among their 40 U.S. units, and given his operator background, Cooper began actively investigating each one, looking at real estate and demographic issues, and speaking with individual owners. “We visited with franchise partners if their locations weren’t conducive to good business, and in many cases they ended up leaving,” Cooper says. The company ended up closing 10 units in total. Boston’s then assembled “the right profile of what we wanted going forward, people and the locations, and then we just committed to staying within those bounds,” Cooper says. “Sometimes that can be tougher when you’re doing it because we had to say no a lot more than we said yes to get ourselves on the right track.” Boston’s did not sell franchises for a couple of years but simply took orders. The company would speak to people that had an interest in being franchise partners, but they were not actively pursuing such opportunities. Now, the sales staff has increased from one to four people, “so it’s just a scale issue,” Cooper says. “I’ve worked with rapidly expanding concepts in the past, and once you have the model right it’s just a matter of how many people you have implementing that plan.” Big changes have happened at the corporate level as well. When Cooper first arrived, Brad Bevill, vice president of marketing, had already been there a few months and was doing a solid job. Through Cooper’s strong industry network, other key players were brought in gradually, including Tim Matousek, vice presidentof operations (2013), Bob Hall, director of supply chain (2014), Sherilyn Johnson, director of IT (2015), and CFO Rick Lauro (2016).”These guys all have experience with big companies and have worked in the growth phases of them, and I’m real proud of the team that’s come together,” says Cooper. Hall and Johnson had previously worked at Brinker, Matousek at Outback, and Rick Lauro at Coca-Cola. On the culinary side of things, Boston’s recently brought in Andy Whittman (corporate chef) and Trey Pease (director of training), and they have been refining their menu. Cooper says they have reduced their food costs by about 4 percent. “We make more things in house, we’re a little bit closer to scratch then we are on the premade side of things, and it has improved our quality, the pride level, and certainly the cost,” he explains. A new Boston’s menu is forthcoming in October. Along with new legislation that requires the chain to list nutritional information, it is adding some healthy options to the menu, including a Veggie Quinoa Burger, Roasted Corn and Black Bean Salsa, and Hummus, among others. It also currently offers gluten-free pizzas. Additionally, Boston’s is adding a deep-dish option. “We’re ready to grow,” Cooper says. “We’ve been spending the time blocking and tackling, refining, getting ourselves into shape, and now we’ve got the sales team on and we’re ready to go out to do what we’ve been working on the last couple of years.” Boston’s has big aspirations. After contracting by 10 units, it seeks to expand to 100 locations in the U.S. and Mexico by the end of 2018. (It currently has 11 locations south of the border and a corporate team in place that is connected to local vendors and people.) The company also does not plan to stop at that number. “We feel that at 100 stores, you’re a legitimate concept out there performing well and you start to really get the economies of scale,” Cooper says. He believes they could grow to 200 to 250 locations in the U.S. “We feel good because we have a big delivery component of our business that we’re just starting to get going in the U.S.,” Cooper says. “That’s going to be very big for people, being able to have the casual dining type experience along with pizza delivered. We’re excited about that. We have a lot of folks that are continuing to experience Boston’s for the first time and enjoy it.” Cooper feels that now is a good moment for Boston’s with the combination of pizza with casual dining, especially at a time when he feels that casual dining feels a bit tired. “There are a lot of legacy brands that have been around for a long time, but there are a lot of people that still want the casual dining fare and there aren’t as many options as there were,” Cooper observes. “We want to be on the top of our game when people are looking for that type of experience.” – Source: www.fsrmagazine.com.
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