This is America’s Favorite Fast Food Restaurant
When it comes to America’s favorite fast food, chicken reigns supreme. Chick-fil-A is the highest ranking fast food restaurant in the country for customer satisfaction, according to the American Customer Satisfaction Index Restaurant Report 2016 recently released. The Georgia-based chicken chain took home the top spot by a wide margin with 87 points on a scale of 100. The family-owned company has been expanding across the country and is currently in 43 states and Washington, D.C., and had more than $6 billion in sales last year. At a time when restaurants are testing out new menu items in an effort to draw in more customers (kale, anyone?), Chick-fil-A has been sticking to its roots. “They have a pretty limited selection of offerings and are really focused on chicken and chicken sandwiches,” said Forrest Morgeson, director of research at American Customer Satisfaction Index. “They focus on what they do best, and it does well.” The company has taken some heat for its politics, but Morgeson noted that the survey focuses only on the experience of diners. Papa John’s came in second place in the fast food rankings with a score of 82, a 5% increase from 2015. Little Caesars and Arby’s experienced the biggest score changes with 9% and 8% gains, respectively. Overall, consumers seem happier with the fast food industry: Customer satisfaction increased 2.6% from last year. But there was one glaring exception: Chipotle. The hits keep coming for the burrito chain. The multi-state e.coli outbreak that began toward the end of 2015 has taken a toll on customer satisfaction. Its score tumbled 6% to 78. When a restaurant experiences that big of a dip it’s usually due to a price increase, explained Morgeson, which isn’t the case with Chipotle. “This is quality related,” he said. “We generally see in these kinds of situations, if they can turn it around quickly and right the cause … they will probably recover pretty quickly.” McDonalds, which saw its score jump 3%, still remained in last place. “With a restaurant that has been around for as long as they have … you get a brand fatigue phenomena going on,” said Morgeson. In the category of full service restaurants, Cracker Barrel ranked the highest in the industry, followed by LongHorn Steakhouse and Texas Roadhouse. The surveys were based on responses from almost 5,000 diners in March. Here’s how fast food restaurants ranked: 1. Chick-fil-A, 87; 2. Papa John’s, 82; 3. All Others, 81; 3. Little Caesars Pizza, 81; 3. Panera Bread, 81; 6. Arby’s, 80; 6. Dunkin’ Donuts, 80; 6. Subway, 80; 9. Chipotle Mexican Grill, 78; 9. Domino’s, 78; 9. KFC, 78; 12. Pizza Hut, 77; 13. Burger King, 76; 13. Wendy’s, 76; 15. Starbucks, 75; 15. Taco Bell, 75; 17. Jack in the Box, 74, and 18. McDonald’s, 69. – Source CNNMoney, (New York).
Cracker Barrel Leads Full-Service Restaurants in Customer Satisfaction
Improvements in quality are behind a rebound in customer satisfaction with fast food restaurants, according to a report released Tuesday by the American Customer Satisfaction Index (ACSI). Limited-service restaurants post a 2.6-percent gain to 79 on a 100-point scale. The gap between fast food and full-service restaurants narrows, as the latter slides down 1.2 percent to 81. The ACSI report is based on 4,786 customer surveys collected in March 2016. “Americans are now spending more money dining out than shopping for groceries,” says Claes Fornell, ACSI Chairman and founder. “Fast food restaurants appear to be capitalizing on this trend more than full-service restaurants, maintaining the lower prices and speedy service that has long defined the industry, while also appealing to health-conscious consumers via more diverse offerings and higher-quality ingredients.” Nearly all fast food restaurants achieve higher customer satisfaction, with a notable exception being Chipotle Mexican Grill, which debuted near the top of the industry last year. Chipotle drops 6 percent to 78 after suffering from a spate of foodrelated illnesses. “Higher quality drives the improving scores for the industry, but quality issues relating to foodborne illnesses knock down Chipotle,” says ACSI Managing Director David VanAmburg. “Just as Netflix’s stock took a dive after the singular event of its pricing and Qwikster branding misstep in 2011, Chipotle’s stock also has fallen after its food-quality crisis. Netflix rebounded rather quickly, but it can take more time for a restaurant to recover from quality issues.” Chick-fil-A, already the top-rated restaurant in the ACSI, shows that product focus has its benefits as the chicken sandwich specialist pulls further ahead with a 1 percent increase to 87. Before Chick-fil-A entered the ACSI, Papa John’s often held the top spot in the industry. The pizza chain climbs 5 percent to second place at 82. Little Caesars surges 9 percent to 81, tied with fast casual chain Panera Bread. Customers are more satisfied at Dunkin’ Donuts (plus 3 percent to 80) than at Starbucks (plus 1 percent to 75). Arby’s (plus 8 percent to 80) ties Subway (plus 4 percent) and both beat the burger chains. Burger King and Wendy’s are up 6 percent and 4 percent, respectively, to 76. McDonald’s is still in last place among fast food chains, but its all-day breakfast proves popular as customer satisfaction jumps 3 percent to 69. Full-service restaurants remain one of the highest-scoring industries measured by the ACSI. The industry is also one of the most consistent. This year’s score of 81 equals its long-term average. Most large full-service restaurant chains improve, but the industry retreats as smaller restaurants, which make the bulk of the category, fall 2 percent to mirror the average of 81. Restaurant-retail hybrid Cracker Barrel rises 4 percent to take first place with an ACSI score of 83. Darden’s LongHorn Steakhouse (plus 1 percent) and Texas Roadhouse (down 1 percent) tie at 82. Olive Garden, also a Darden brand, is up 3 percent to 81. After debuting in last place for customer satisfaction in the industry, Ruby Tuesday is the most improved, jumping 7 percent to 78 and tying TGI Fridays (plus 3 percent). Chili’s inches up 1 percent to 75, while Denny’s slips 1 percent to the bottom with a score of 74. The American Customer Satisfaction Index (ACSI) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the U.S. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 300 companies in 43 industries and 10 economic sectors, including various services of federal and local government agencies. ACSI results are released throughout the year, with all measures reported on a scale of 0 to 100. ACSI data have proven to be strongly related to a number of essential indicators of micro and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. At the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth. — Source: www.fsrmagazine.com.
Barnes & Noble Opens a New Chapter in Food and Drink
Barnes & Noble Inc. would like you to raise a glass, literally, if you visit one of the four new stores it is opening within the next year. During an investor conference, the bookseller said the concept stores it’s unveiling in fiscal 2017 will feature cafes offering wine and beer in spaces that will be double the size of its typical cafes. The retailer is also throwing its hat into the competitive restaurant business, a strategy that some independent booksellers have successfully embraced. In addition to its traditional cafe fare, Barnes & Noble will offer a full breakfast, lunch and dinner menu, together with waiter service at the four new stores. The expanded cafes are seen as a way to draw more shoppers into the bookstores and keep them there longer. Weak store traffic was a contributing factor in the bookseller’s disappointing fourth-quarter results reported. Comparable-store sales were down 0.8% for the quarter ended April 30, while total quarterly retail sales, which include the stores and the BN.com online business, fell 2.2% to $850 million. “We’re going to offer good food, and because we’re Barnes & Noble it’s going to be affordable, not $50 dinner entrees,” said Chief Executive Ron Boire. Mr. Boire declined to give more specifics about the menu, although he said the retail chain has hired an executive chef. The first store is expected to open in October in Eastchester, N.Y., in southern Westchester County. The store has an outdoor component, with amenities including a fire pit and bocce court, said Mr. Boire. The other new stores will be in the Galleria Edina in Edina, Minn.; the Palladio at Broadstone mall in Folsom, Calif.; and One Loudoun, a mixed-use community in Loudoun County, Va. Barnes & Noble expects that, in addition to the Eastchester store, the stores in Minnesota and California will open before Christmas. “I think the expanded cafes are a very good idea,” said John Tinker, an analyst with Gabelli & Co. “This gets people into the stores to do stuff. It’s also something Amazon can’t do. What we have to see is whether Barnes & Noble can increase its sales and fix its tech issues generally going forward. They have to execute.” During the investor conference, Barnes & Noble provided more detail about its bookstore business at a time when it has significantly diversified beyond hardcover and paperback books. Today, books generate about 60% of bookstore revenue, while gifts, music, DVDs, toys and games contribute 20% of bookstore revenue combined. The cafe business adds just under 10% of bookstore revenue. The retailer didn’t break out its newsstand segment. During the question-and-answer period, a number of investors inquired about Barnes & Noble’s troubled Nook business. Barnes & Noble estimated its share of the U.S. e-book market at 9%, down sharply from the 27% market share it claimed in 2011. Mr. Boire, however, said that the retailer remains committed to its Nook offerings and its 2 million active Nook customers. “We’re not walking away from them,” he said. – Source: The Wall Street Journal.
Sonic Reveals Refranchising Initiative
Sonic Corp. has set a goal to have 95 percent of its drive-in system franchised by the end of the 2017 fiscal year, the company said. “We are excited to announce our intention to move toward an approximately 95-percent franchised system by the end of fiscal year 2017,” said Cliff Hudson, Sonic CEO, in a third-quarter earnings release. The system of more than 3,500 drive-ins is currently about 90 percent franchised, the company said. Hudson added in a statement that the sale of company-owned units would “improve the capital efficiency of Sonic Corp. and allow our franchisees to optimize performance of the refranchised stores and expand our brand in the same markets.” Franchised restaurants showed stronger same-store sales in the third quarter ended May 31, posting a 2.1-percent increase, compared with 0.9 percent at company-owned drive-ins. Same-store sales for the system rose 2 percent. Hudson said that while consumer trends slowed in April and May, Sonic’s “business performed well during the quarter overall.” Third-quarter net income fell 20.4 percent, to $15.4 million, or 31 cents a share, from $20.4 million, or 38 cents a share, in the same quarter last year. The company took special items for the extinguishment of debt. “We are also pleased to have completed our debt transaction during the third quarter, allowing us to maintain a solid capital structure while returning excess cash to shareholders,” Hudson said. Sonic revenue in the third quarter rose 0.3 percent, to $165.2 million, from $164.7 million the previous year. Hudson said the brand’s product pipeline remained robust, with recent introductions of such premium products as Frozen Lemonade and Limeade, and Bacon Chili Cheese Coney hot dogs. “While the consumer environment has weakened, Sonic remains focused on delivering one of the most differentiated customer experiences in the quick-service industry,” he said. Sonic reiterated its guidance of same-store sales growth in the range of 2 percent to 4 percent, and said it expected 50 to 60 new franchised unit openings for the full fiscal year. – Source: NRN.
US Foods Offers Restaurant Responsibly-Sourced Product Line US Foods, Inc. is offering a new line of products designed to help restaurants offer sustainable, responsibly-sourced dishes. The company’s Serve Good line features a range of products such as cage-free eggs, organic bread, nonG.M.O. oils and sustainable seafood. “The demand for sustainable options when dining out continues to grow,” said Stacie Sopinka, vice-president of product development and innovation for US Foods. “In fact, nearly 70% of diners say they would have a better impression of a restaurant that offered sustainable foods. With the high-quality, ontrend and sustainable items in Serve Good, we can help our customers deliver what their diners want and stay competitive in this changing marketplace.” The Serve Good line includes 21 products, each of which is sustainably and responsibly sourced or contributes to waste reduction. US Foods’ sustainably and responsibly sourced category includes products such as Chef’s Line All Natural Turkey Breast Roast, made from turkeys that are vegetarian-fed and raised without antibiotics; Harbor Banks Barramundi, sustainably-sourced whitefish; and Rykoff Sexton Non G.M.O. Canola Oil, Non-GMO Project verified expeller-pressed oil that contains no chemicals and zero grams of trans fat. In the waste reduction category, US Foods is introducing Cross Valley Farms Chopped Broccoli Leaves, which reduce waste by minimizing water usage and yield an additional 2,640 lbs of product harvested per acre. The company’s Monarch Eggless Spread is made with vegetable protein, which uses 5 to 10 times less water than animal protein and requires one tenth of the land. – Source: FoodBusinessNews.net.
Food Service Equipment Market to Reach US$ 28.9 Bn in 2016
Food service equipment market revenues will witness another year of stable growth for 2016, increasing by 4.4% in 2016 to reach US$ 28.9 Bn in revenues. The food service equipment market in North America (US and Canada) will continue its upward momentum in 2016, driven by declining unemployment rates and prevailing low crude oil prices. Growing popularity of quick-service restaurants will also create growth opportunities in the region. Low crude oil prices will also influence demand in Europe and Asia Pacific, with these key regions growing at 3.6% and 7.1% respectively in 2016. Gains from lower shipping costs, combined with higher sales, on account of steadily improving employment rate, will continue to positively influence the market in these two markets. By product type, cooking and baking equipment will continue to be the leading segments in terms of revenue, whereas food preparation equipment will witness robust growth rate of 6.1% in 2016. Full-service restaurants will remain the largest end-users, with total demand expected to reach US$ 19.1 Bn in 2016. Mushrooming of quick-service restaurants will have a favorable impact as far as overall demand is concerned, whereas caterers and hotels & club restaurants will provide additional support to sustain favorable growth for another year. Manitowoc Foodservice Inc., The Middleby Corporation, and Ali Group are the three prominent players in the global food service equipment market. Collectively, these companies account for 11.2% revenue share of the market. The key strategy of leading players in the food service equipment market is to expand through acquisition of regional players that have strong distribution networks. Furthermore, key players are using online platforms, including websites, apps, and social media to connect with their end-users. – Source: Future Market Insights (FMI)
Detroit Pizza Moves In on New York Slice
For New Yorkers accustomed to the city’s classic slices, the offerings at Emmy Squared in Brooklyn’s Williamsburg neighborhood might seem unrecognizable. The pies are rectangular and lack that distinctively doughy outer crust. The tomato sauce sits atop the cheese. This is Detroit-style pizza, and its arrival in the New York market is sure to further the endless, divisive discussion among locals about who does pizza best. For their part, Emmy Squared’s married owners, Emily and Matthew Hyland, believe in pizza pluralism. “There’s no right or wrong,” Ms. Hyland said. “It’s what you like.” Other geographic regions are also making themselves known. At Speedy Romeo, with locations in Brooklyn’s Clinton Hill and the Lower East Side, some of the pies have a St. Louis sensibility to them. They are prepared with Provel, a processed cheese made with cheddar, Swiss and provolone that is a staple of the Missouri city. The restaurant’s chef and co-owner Justin Bazdarich, who grew up in the Midwest, admits that Provel isn’t exactly gourmet fare, but in this case, its richness works. “For me, it’s the ultimate in umami,” he said, referring to the Japanese word for a savory taste. Even though classic New York pizza—circular, usually 18 inches in diameter, blanketed in mozzarella, cooked in a gas oven—is a style unto itself, other regions have long been represented in town. But those too are undergoing finer differentiations. For example, Emmett’s, which opened in Greenwich Village three years ago, features Chicago-style pizza in its well-known deep-dish form as well as a lesser-known thin-crust “tavern” style. In the Flatiron District, the newly opened PN Wood Fired Pizza distinguishes itself from other Neapolitan pizzerias in that it uses a wider variety of flours, from whole wheat to one made from a “heritage ancient grain cultivated in the province of Parma.” The landscape has grown more diverse in New York, partly because the economics of operating a pizzeria have changed. As commercial rents have risen, it has become more challenging to stay in business selling $3 slices, according to restaurant-industry experts. By contrast, newer styles are often featured at restaurants that sell whole pizzas instead of slices, often for upward of $20, and offer wine, beer and cocktails to boost checks. These pizzerias “work better as a [financial] model,” said Scott Wiener, who runs Scott’s Pizza Tours, a local culinary tour operator. Others point to a decline in quality among classic New York-style pizza. “Try and find a great New York slice in Midtown,” said Arthur Bovino, managing editor of the online food retailer Mouth.com. “There’s an art that’s gradually being lost.” The local standby still has its fans, or at least those willing to slam its competitors. Jon Stewart, formerly of “The Daily Show,” once memorably criticized Chicago deep-dish as “an aboveground marinara swimming pool for rats.” Operators of traditional New York pizza establishments have taken issue with other styles as well. Michael Virga, who owns Pizza Cotta Bene in Brooklyn’s Gowanus area, takes particular issue with authentic Neapolitan-style pizza, which is typically cooked in under two minutes, as opposed to New York-style, which requires a cooking time of about 12 minutes. “I feel New York pizza is cooked perfectly. Everything is blended so well,” he said. At Emmy Squared, the Detroit-style pies, prepared in a convection oven, are closer to New York than Italy, taking about nine minutes to cook. The Hylands said they mean no disrespect to the city’s traditionalists, pointing out that they both hail from the tri-state area and appreciate New York-style pizza. They already offered a wood-fired pizza at their Clinton Hill restaurant, Emily, but wanted to “do something different” at their second, said Ms. Hyland. As they tested a rectangular-shaped pizza, they learned that their pies fit the Detroit mold. They have gained a following among exDetroiters who now call New York home, including Kelly Dobkin, a senior editor with Zagat.com, a website affiliated with the restaurant guides. “Finally having an authentic option in New York is like a dream come true,” Ms. Dobkin said. “There are so many expats from the Midwest in New York who are willing to shell out for a taste of their childhood. It’s cheaper than a plane ticket, certainly.” Source: The Wall Street Journal.
Joe’s Crab Shack to Retrench from Bronx, Newark
Ignite Restaurant Group Inc. plans to retrench from pushing its Joe’s Crab Shack into the dense urban New York areas, the company CEO said last week. The Houston-based casual company, which also owns the Brick House Tavern + Tap brand, last September closed its Joe’s Crab Shack in Harlem, and CEO Robert Merritt told Piper Jaffray’s 36th Annual Consumer Conference that it would be pulling out of the Bronx and Newark, N.J., as well. The company still has Joe’s locations in the New York communities of Deer Park, Elmhurst, Oceanside, Westbury and West Nyack and the New Jersey municipalities of Clifton, Eatontown and South Plainfield. “There was a belief in the past that Joe’s had a particular urban appeal, and so they opened in downtown Newark, Harlem and in the Bronx,” Merritt said. “I tell you, none of those will be around in a few months. It just didn’t work.” Merritt said rents were too high and consumer appeal was low for Joe’s in urban markets. “It is principally a vacation-type brand,” he said. “This is a special occasion place, and we are trying to position it that way.” Merritt, who was named Ignite CEO in November, said the company is working on improving Joe’s Crab Shack appeal to the moderateincome casual-dining consumer, who he said is “hunkering down” in this economy. “It’s all about execution, and execution starts with people,” Merritt said. “In the final analysis, execution is the only thing that you have that protects you from a competitive stand point. Anybody can copy your menu, your food items, your décor, your locations, your uniforms, all the cute stuff you put on the wall that we all think differentiates us. In reality, the only thing that differentiates us is execution.” Merritt said the company has begun replacing or retraining many general managers and kitchen managers at Joe’s. “We’re probably halfway there,” he said. Nicole Miller Regan, the senior research analyst with Piper Jaffray, said in a post-conference note that hiring and training of new managers were positive investments. “We applaud investments in human capital aimed at elevating culinary and operational excellence and understand that making a successful change in culture does take time,” she wrote. Merritt said Ignite is also working on building sales at Joe’s. “Joe’s was a brand that was focused on cost control,” Merritt conceded. “It’s a culture of cost control and not a culture of building sales. I’ve never seen any restaurant company save its way to success. I’ve only seen success by building more sales.” A $29 all-you-can-eat crab special on Wednesdays has helped the brand increase sales as much as 45 percent and pushed same-store sales into positive territory in January and February, Merritt said. However, he added that Friday and Saturdays were showing a softness in the dinner daypart. Same-store sales in the first quarter ended March 28 were down 1.3 percent at Joe’s Crab Shack and 4.5 percent at Brick House, the company said. Merritt said the company was avoiding discounting, even though he was seeing many casual-dining brands employ that tactic. “I am philosophically opposed to discounting,” he added. “I think the bulk of the casual-dining industry today is making a huge mistake because they are discounting heavily. What they are doing is announcing to the consumer that the price they charge every day is too high.” Merritt said Joe’s, with a per person average check range of $25 to $28, has historically not had what he called a “price approachable” section on its menu. “That’s one of things that what keeps our frequency down,” he said. In future Joe’s locations, he added, the company also plans to reduce the size of units and perhaps modify space in existing larger locations. “We are redesigning the box for future locations so that it is smaller and more manageable,” Merritt said. “We are looking at subdividing some of the extra space we have into family dining rooms and offering familystyle meals — trays, platters, things like that — to try to use up some of that excess space in an effective way.” Joe’s is also simplifying its food offerings, Merritt said. With a new menu introduction May, Joe’s has cut the number of entrees by 40 percent to simplify execution and increase speed of service, he said. “At peak times, we were running 40- to 45-minute ticket times,” Merritt said. “Consumers aren’t going to wait 40 to 45 minutes for their entrée very often. We’ve cut that in half already. I think we can cut that another 40 percent. That’s our target.” Merritt said the company’s Brick House brand, with about 42 percent of its sales mix in alcoholic beverage sales, in July will expand on its entrée offerings to help drive traffic beyond the “bar food” base. “We’re starting next month with a Thursday night ‘steak night,’ and we will have 16-ounce rib eye and an 8-ounce filet along with sides,” he said. “What we’re trying to do there is create the image that we are much more than bar food. We’re really a serious place with serious dinner entrees. Merritt said he believes the tipping model in full-service restaurants will have to change, but “it’s just that the American consumer is not ready for it yet.” Joe’s earlier this year pulled back its no-tipping test from 18 to four Joe’s Crab Shack units. “It just didn’t work,” Merritt said. “Fifty-nine — almost 60 — percent of our customers told us they hated it. And a lot of them voted with their feet. And they hated it for two reasons. The first: They felt like they were out of control of the experience. If somebody did a good job, they wanted to give a big tip; if they did a bad job, they wanted to give a small tip. It’s the American way, right? “Second,” he continued, “they did not believe that the amount we raised prices by that we actually gave that to our employees.” For the first quarter, Ignite reported a net loss of $1.6 million, or 6 cents a share, from a loss of $22.2 million, or 87 cents a share, in the same period last year. Revenue in the quarter fell 3.5 percent, to $117.9 million, compared to $122.2 million in the prioryear period. Ignite Restaurant Group owns and operates 156 casual-dining restaurants, including 130 Joe’s Crab Shack units and 26 Brick House Tavern + Taps. – Source: NRN.
Wahlburgers to Open DC Location
Actor Mark Wahlberg and brothers Donnie and Paul are expanding their burger chain to D.C., with a location right on Dupont Circle. Wahlburgers will occupy 6,500 square feet at One Dupont Circle and says it will open later this year. It will be the first of several planned for the D.C. area, the company said. It will be Wahlburgers’ seventh location. “Wahlburgers will deliver a dining experience built on the Wahlberg family values of heartfelt hospitality and fun while offering a menu that emphasizes creativity and quality ingredients,” the company said in its Friday announcement. Paul Wahlberg serves as the chain’s executive chef. Wahlburgers menu includes burgers with names such as O.F.D. (originally from Dorchesstah), Mom’s Sloppy Joe and The Beast — two 5-ounce burgers topped with blue cheese sauce and BBQ sauce. It also serves grilled cheese, hot dogs, chicken and fish sandwiches, salads and mac and cheese. Wahlburgers also has locations in Boston, Philadelphia, Coney Island, Orlando, Las Vegas and Toronto. – Source: WTOP.
Elon Musk’s Brother is Opening a Restaurant Where Everything is Under $5 .From Chop’t to Sprig to Sweetgreen, the launch of healthy fast food joints are on the rise. But these places are still pretty expensive: Depending on where you live, meals can cost upwards of $10. Kimbal Musk (yes, he’s Elon’s brother) wants to give people a fast food joint that’s both affordable and healthy. This August, he’ll open a restaurant in Memphis, Tennessee where everything costs under $5, he tells Tech Insider. Called The Kitchenette, the graband-go restaurant will serve mainly sandwiches, soups, and salads. The first Kitchenette location will live in the visitor’s center at Shelby Farms Park, a 4,500-acre urban park and conservancy. Inside, The Kitchenette will look similar to a coffee shop, with a counter and a few tables. After people grab their grub, they can eat it on the patio or the Park’s giant lawn in front. Musk hopes to launch more locations within Memphis and eventually nationwide, though there are no firm plans yet. Before Musk worked in food, he worked in Silicon Valley with Elon. In 1995, the two brothers started their first tech company, a Google Maps-esque service called Zip2. After selling it for around $300 million. They then invested in a new venture, which later became PayPal, but Kimbal decided to leave the tech industry for culinary school. Many of the skills he learned working in Silicon Valley – mainly the willingness to take risks and think decades into the future – helped him launch restaurants aimed at helping Americans eat more healthier, more sustainable food. Musk’s larger mission is to strengthen people’s connection to local food and each other, or create what he calls a “real food culture.” “In the past five years, we’ve moved toward eating in our cars, our cubicles, and in front of our TVs. It’s very isolating,” he says. “The reality is that we connect through food, and we have the opportunity to do it three times a day. Normal fast food is full of calories and low of nutritional value, he says. “People are overweight and starving at the same time,” he says. “It’s a tragedy for both the individual and society.” His place will be different. Musk and The Kitchenette staff plan to work with local farmers and offer food made only with organic ingredients. The Kitchenette is just one of many restaurant concepts from Musk and co-founder Hugo Matheson, who also run two chains of farm-to-table restaurants, called The Kitchen and Next Door. The restaurants have eight locations in total in Denver, Boulder, Chicago, and Memphis. The former serves more gourmet food than the latter. The restaurants are built near farms where the staff sources produce. Describing them as “neighborhood hangouts,” Musk says five additional Kitchens and Next Doors will open over the next year. While the Kitchenette’s pricing sounds too good to be true, Musk says he will make it work with a little help from local farmers. The same farms distribute meat and produce to all three of restaurant concepts, and knock down the price based on what’s in-season. In 2011, Musk also launched a nonprofit program, called Learning Gardens, in 300 schools across the US. Part-playground, part-outdoor classroom, the gardens help kids learn that fruits and veggies can taste great, Musk says. He’s talking with hundreds of other schools to build more. “The idea is to get them engaged in real food,” he says. The Learning Gardens are in the same four cities as The Kitchen and Next Door locations, plus Los Angeles. The restaurants also gather food made from the Gardens and incorporate it in their menus. Musk is focusing on launching the restaurants and Learning Gardens in one city at a time. He believes that this approach, as opposed to scattering them throughout the country, will create a more lasting impact on individual communities since the schools work hand-in-hand with the restaurants. Centering the projects in cities also lets the restaurant teams develop deeper, more meaningful relationships with local farmers. And once customers taste The Kitchenette’s food, he’s certain the restaurant will flourish. “People want real food,” he says. “The demand for it is through the roof.” – Source: Tech Insider.
The Cheesecake Factory Mourns the Passing of Director Douglas L. Schmick
The Cheesecake Factory Incorporated announced with deep sadness the passing of Douglas L. Schmick, 68, a member of the Company’s Board of Directors since 2012 and a member of the Company’s Audit Committee. “Doug was a valued member of our Board of Directors for the last several years and a respected colleague in the restaurant industry for more than 25 years,” said David Overton, Chairman and Chief Executive Officer of The Cheesecake Factory Incorporated. “As a co-founder of McCormick & Schmick’s Seafood & Steak restaurants, he embodied the entrepreneurial spirit of the restaurant industry and leaves a lasting legacy behind. He will be sorely missed by us. We extend our heartfelt condolences to his family at this difficult time.” Douglas L. Schmick began his restaurant career more than 42 years ago and developed several brands, most notably McCormick & Schmick’s Seafood & Steak restaurants. Beginning with Jake’s Famous Crawfish restaurant in Portland, Oregon, Mr. Schmick and his partner became leaders and innovators in the affordable, upscale seafood segment and grew the McCormick & Schmick’s organization to 96 restaurants nationwide. Mr. Schmick served as Chief Executive Officer and Chairman of the Board for that company from 1974 through 1999 and again from 2007 through 2008. During those years, he guided McCormick & Schmick’s through several iterations of ownership, including becoming a publiclytraded company in 2004. He then served as Chairman of the Board until the company’s sale in 2012. Mr. Schmick joined the Board of Directors of The Cheesecake Factory Incorporated in 2012. In 2013, Mr. Schmick joined the Board of Directors of Chuy’s Inc., a public company, and Anthony’s Coal Fired Pizza, a private group. Mr. Schmick has received many accolades for his work in the restaurant industry, including being named the Ernst & Young Regional “Entrepreneur of the Year” in 2008. As a result of Mr. Schmick’s passing, the Board of Directors approved a reduction in the number of directors from seven to six, effective immediately. Accordingly, six directors will stand for election at the Company’s upcoming 2016 annual meeting of stockholders on June 23, 2016. In addition, the Board of Directors appointed Jerome Kransdorf as a member of the Audit Committee, effective June 17, 2016. Source: The Cheesecake Factory Incorporated.
Yum! Brands Names Keith Siegner Vice President, Investor Relations and Corporate Strategy
Yum! Brands, Inc. announced that Keith Siegner, 41, will join the Company as Vice President, Investor Relations and Corporate Strategy, reporting to President and Chief Financial Officer, David Gibbs, effective July 11, 2016. In this role, Siegner will assume responsibility for the Company’s relationships with the analyst and investor community. He will also play a key role in shaping YUM’s long-term growth strategies as the Company moves toward the separation of its China business by the end of October. “Keith is an excellent addition to Yum! Brands. He brings to this important position nearly 20 years of financial expertise and a deep understanding of the restaurant industry and our Company,” said Gibbs. “Keith’s insight into franchisee economics and benchmarking to uncover areas for improvement, coupled with his knowledge of Wall Street, will enable him to make a meaningful impact on our business and our interactions with the investment community. This is an exciting time at YUM as we separate into two powerful, independent companies – Yum! Brands and Yum! China – with unique investment profiles, capital structures, and compelling growth potential. We are thrilled to have someone with Keith’s experience and knowledge join our Company,” Gibbs added. Siegner joins YUM from UBS Securities, LLC, where he served as an Executive Director in securities research, analyzing and publishing investment advice for restaurant companies with a combined market capitalization of $300 billion, including YUM. He previously spent over 12 years at Credit Suisse Securities USA, LLC, on teams covering the environmental services and specialty chemicals sectors before assuming lead coverage of the restaurant sector in 2007. Earlier in his career, Siegner worked in the international tax consulting services practice of Arthur Andersen LLP. He received both bachelor’s and master’s accounting degrees from Wake Forest University. “I am thrilled to be joining the world-class YUM team as the Company moves toward its next chapter. Greg Creed, David Gibbs and the team have a clear vision to transform YUM for the future by capitalizing on the extraordinary strength and growth potential of the KFC, Pizza Hut and Taco Bell brands. After many years following YUM, I cannot wait to play a role in driving its long-term growth and success,” said Siegner. – Source: Yum! Brands, Inc.
CIT Announces Expanded, Full-Market Coverage for Restaurant Franchise Finance
CIT Group Inc., a leading provider of commercial lending and leasing services, announced the launch of a mid-cap restaurant franchise finance practice to complement its successful large and small restaurant franchise financing businesses. “CIT franchise finance has long been recognized as a leading provider of innovative, customized restaurant and retail financing and advisory services,” said Steve Solk, President, CIT Business Capital. “With our expanded coverage model for restaurant franchise financing, CIT now provides full market coverage financing solutions for restaurant franchisors and franchisees. We can serve a wide range of industry clients throughout the life of their business, regardless of the number of stores a franchisee owns, or the dollar size or finance structure needed.” CIT has made two recent appointments to support its growth in the restaurant franchise financing businesses. Matthew Goyette had been appointed Vice President, servicing mid-cap restaurant franchisors and franchisees and Michael Vallorosi was named Managing Director of the large-cap restaurant industry practice. “Matthew has a great reputation in the restaurant franchise community,” said Solk. “He built strong relationships throughout his career and we are excited to see our clients benefit from his finance structuring experience.” Goyette served as Vice President of major accounts with CIT’s recently acquired subsidiary, Direct Capital Corporation. He has over 19 years of experience with the organization and was instrumental in growing Direct Capital’s franchise finance division. He holds a degree in Business Administration from the University of New Hampshire. Prior to joining CIT, Vallorosi served as Director and Team Leader of the franchise finance practice at TD Bank, where he led a loan originations group that provided financing to franchisees and franchisors of quick service, family, fast casual and casual dining restaurant chains, as well as independent restaurant chains. “Michael is a skilled leader with deep experience in the restaurant and franchise finance sectors,” said Solk. “We look forward to him driving our efforts to provide senior financing solutions to larger restaurant chains, as well as supporting private equity sponsors that own or acquire companies in the sector.” – Source: CIT Media Relations.
Red Robin Announces Departure of Chief Financial Officer Stuart Brown
Red Robin Gourmet Burgers, Inc. announced that Stuart B. Brown, the company’s Executive Vice President and Chief Financial Officer, will resign from the position effective July 15, 2016, to accept an opportunity outside the restaurant industry. “Stuart has been a great asset to the Company and has made many contributions to the brand since he joined in 2011. We thank him for his dedication, loyalty and passion for Red Robin and wish him the best in his future endeavors,” said Steve Carley, Red Robin Gourmet Burgers, Inc. Chief Executive Officer. “One of Stuart’s many accomplishments has been building a best-in-class finance and accounting team that will serve our Company well for many years to come.” “I have truly enjoyed my time at Red Robin and will be forever grateful for the tremendous opportunities the Company has provided me to work with a great leadership team and contribute to the success of a great casual dining brand,” said Mr. Brown. “I now have an opportunity outside the food service industry that is attractive on both a career and family level. I wish my fellow Red Robin Team Members all the best as they continue to grow the Red Robin brand.” Terry Harryman, the Company’s Vice President, Chief Accounting Officer and Controller for the past four years, will serve as interim Chief Financial Officer effective immediately following Mr. Brown’s departure on July 15, 2016, while Red Robin conducts a comprehensive search to assess internal and external candidates for the Chief Financial Officer position. “We are pleased to appoint Terry as our interim CFO,” said Steve Carley. “We believe that Terry’s deep background – including 20 years of experience leading accounting for the US and Canada and the tax and payroll functions – will continue to be a great asset to Red Robin.” – Source: Red Robin Gourmet Burgers, Inc.
Burger King’s Mac N’ Cheese and Cheetos Mashup
Burger King follows up its burger burrito mashup, the Whopperito, with another food mashup, in collaboration with the Cheetos brand: Mac n’ Cheetos. Mac n’ Cheetos, which have been spotted in southern California and Indiana but are soon coming to stores nationwide, are Cheetos-shaped deep-fried macaroni and cheese sticks that are dusted with “crispy Cheetos flavor,” according to a release. Though fried mac n’ cheese balls are nothing new, perhaps the association with the Cheetos brand will appeal to customers. This brand association certainly worked for Taco Bell, as its Doritos Locos Taco was a runaway hit, so much so that the company had to hire about 15,000 people in order to help meet the demand. Alex Macedo, President, North America, for the Burger King brand, said, “Mac n’ Cheetos are a doubly cheesy combination of warm mac n’ cheese covered with that crispy Cheetos flavor everyone loves. No one understands snacking better than Cheetos, and our expertise at Burger King restaurants is serving guests on the go, so it just made sense that we come together to reinvent this favorite food like it’s never been done before.” Mac N’ Cheetos will be available at participating Burger King restaurants for a limited time beginning June 27, at a recommended price of $2.49 for five pieces. Source: Yahoo News.
Pieology Acquires Rival Project Pie
Pieology Pizzeria, the design-it-yourself pizza joint, has gobbled up rival chain Project Pie for an undisclosed sum, the Rancho Santa Margarita-based company said. Pieology has more than 100 locations in the United States and one in Guam, while Project Pie has about 30 restaurants in the U.S. and abroad. Carl Chang, chief executive of Pieology, said buying Project Pie is the first of what could be more acquisitions of rival chains. The fast-casual pizza market is saturated with restaurants that have opened recently, he said, creating ample opportunities for stronger operators to snap up smaller chains. “When we started having success, everybody started copying us,” Chang said. “There are just too many” at this point. Chang, who founded Pieology in 2011, said Project Pie was especially attractive from a real estate standpoint. The chain will allow Pieology to go into neighborhoods where it does not yet have a presence. Diners can expect to see many Project Pie locations rebranded as Pieology, though some overseas restaurants could keep their names. Pieology got a big boost earlier this year when the founders of Panda Express, Andrew and Peggy Cherng, took a minority stake in the pizza chain. The fast-casual category, which includes custom pizza operations such as Pieology, is driving growth in the $225-billion fast-food industry. McDonald’s, Burger King and other fastfood chains have tried healthier and more innovative fare to counter fast-casual competitors, including Five Guys and Chipotle, that have nibbled their market share. Pieology is on track to have more than 200 locations open by the end of 2016. – Source: The Los Angeles Times.
Umami Burger Taking its Brand International for the First Time
Umami Burger announced a partnership with a Japanese company, Medeiros Holdings Co., Ltd., to open 10 Umami Burger restaurants across Japan over the next five years. The agreement is Umami Burger’s first expansion outside the U.S. The first restaurant is expected to open in Tokyo by the end of the year with future locations to follow in Kanagawa, Osaka, Aichi, Hyogo, Kyoto, and Fukuoko prefectures. Adam Fleischman, founder of Umami Burger says, “Umami Burger was created around the Japanese taste concept of ‘umami.’ We took inspiration for the design of our restaurants from other elements of Japanese culture. Thanks to Medeiros Holdings, Umami Burger is finally coming home to its roots.” The Japanese expansion announcement comes just before Umami Burger opens a new Santa Monica, California, restaurant at 525 Broadway, a few steps away from the former Umami Burger Santa Monica. Later this summer, Umami Burger will open its second Chicago area restaurant in the West Loop neighborhood at 945 West Randolph Street. Umami Burger also plans to announce further domestic and international expansion in the coming months. Named “Burger of the Year” by GQ Magazine, Umami Burger creates unique burgers highlighting the fifth savory taste sense called, umami. Just like sweet, sour, salty and bitter, Umami is a taste sensation found in certain ingredients that helps make your meal even more enjoyable. Umami Burger produces all of its own condiments, cheeses, and grinds its meat in-house throughout the day. All of the beef burgers are made with hand-ground, hand-formed premium steak. The result is a sophisticated, tightly edited selection of burgers, sides, and accompaniments. A global phenomenon, Umami Burger has a devoted cult following among food lovers around the world. This is Medeiros Holdings first foray into restaurants, having already successfully introduced global fashion brands to Japan through its affiliate companies, P&T Trading Co., Ltd. and Visionize Co., Ltd. Its affiliates distribute throughout the Japanese fashion market exceptional jewelry, eyewear, watches, and apparel. To support these brands, P&T Trading and Visionize maintain a unique and diverse network within nine high-end department stores and two high-end fashion select stores throughout Japan. Additionally, supporting 150 specialty stores within its growing network, such as, United Arrows, Beams, Barney’s of New York, Ron Herman, Estination, Restir and Tomorrowland. Also, distributing eyewear through its flagship concept store EYESTYLE in the very popular Shibuya/Harajuku shopping district in Tokyo, and in Nagoya. — Source: www.fsrmagazine.com.