To Our Valued Subscribers:

Here it is only a few days until “The Big Show” and my team and I look forward to seeing many industry veterans and making new industry contacts. Thanks to the many of you who have booked appointments with us and have set up face to face interviews to meet your current needs and begin the process of future planning. Hopefully the weather will cooperate and the 2nd. City will deliver a First Class Experience!!

To be a First Class leader in today’s environment requires a lot more skills than in previous times. In a recent Leadership Magazine article, (authored by John Stoker, President of Dialog Works) he listed ten self-directed questions to allow you to analyze your leadership. Here a just a couple of his introspective inquirers:

· “Do people seek your perspective or insights?” Your answer to this question may help identify how approachable you are.

· “How open am I to different perspectives about tough issues?” If no one disagrees with you or offers alternate ways of looking at challenges, then you might consider how you react when people respond in a contrary way. If you don’t take charge of your feelings and seek understanding when others disagree, people will usually stop offering differing viewpoints for fear of negative consequences.

· “How does my communication style affect others?” These style differences often become the source of disagreement and contention. Understanding your communication style and the styles of others will help you interact in an effective way, establish rapport and avoid misunderstandings.

These are just a few of the questions and if you would like the entire list or discuss any of these with me or my team while you are here in Chicago, just give me or my colleagues a call. As you travel to our great city, enjoy the latest edition of American Recruiters Global Foodservice News. Loaded with industry news it is an excellent ice breaker when meeting potential customers. Have a great show and I look forward to seeing you.

Craig Wilson

President

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Burger King Plans to Roll out Impossible Whopper across the United States

Burger King’s test of a vegetarian version of its signature Whopper was such a success, the chain is planning to roll the Impossible Whopper out nationally this year. On April 1, Burger King started testing the vegetarian burger, using a plant-based patty from impossible. The test took place in St. Louis and “went exceedingly well,” a spokesperson for Restaurant Brands International, Burger King’s parent company, said. The spokesperson added that the sales of the Impossible Whopper are complementary to the regular Whopper. That’s exactly what Burger King wants. With the Impossible Whopper, Burger King is primarily targeting meat eaters who seek more balance in their diet. The new product is designed to “give somebody who wants to eat a burger every day, but doesn’t necessarily want to eat beef everyday, permission to come into the restaurants more frequently,” Chris Finazzo, president of Burger King North America, told CNN Business when discussing the initial test. Burger King started testing out the Impossible Whopper in St. Louis.

The Impossible Whopper is supposed to taste just like Burger King’s regular Whopper. Unlike veggie burgers, Impossible burger patties are designed to mimic the look and texture of meat when cooked. The plant protein startup recently revealed a new recipe, designed to look and taste even more like meat. That version is being used in Burger King’s Impossible Whoppers. The company plans to expand to more markets “in the very near future” before making the sandwich available nationally by the end of the year. Burger King had about 7,300 US locations at the close of last year. There’s public interest in plant-based protein because of concerns about animal welfare and the environmental impact of factory farming, and because some consumers are interested in reducing their consumption of meat for health reasons. – Source: CNN Business.

Grindmaster-Cecilware Receives Kitchen Innovations 2019 Award

The National Restaurant Association Show announced the recipients of the 2019 Kitchen Innovations Awards, honoring progressive equipment that increases efficiencies and productivity. The National Restaurant Association Show named Grindmaster’s PrecisionBrew Air-Heated Shuttle Brewers as an honoree for 2019. Grindmaster’s new Shuttle Brewers step up coffee brewing with a new level of sophistication. An advanced touchscreen offers detailed settings for time, temperature, pulsing, and more to match roasters’ specs. PrecisionBrew brewers also feature two patent-pending technologies: Java-tate and Encapsulair. Java-tate uses a magnetically driven agitator to prevent suspended solids from settling, while Encapsulair heats shuttles by recirculating hot air around the coffee, rather than using electric coils that cause hot spots and scorching. Together, these technologies ensure longer lasting, higher quality coffee for operators,” according to the announcement regarding the awards. Each product honoree will be showcased in the interactive Kitchen Innovations Showroom at the 2019 National Restaurant Association Restaurant, Hotel-Motel Show, to be held May 18-21 in Chicago at McCormick Place. – Source: Grindmaster-Cecilware.

Ruth’s Chris Plans ‘Prized’ Expansion After $19M Deal

Ruth’s Chris Steak House purchased development rights to “prized territory,” for about $19 million in cash, the company announced during its May 3 first-quarter review. Along with three franchises run by longtime operator Marsha Brown—the former banker of founder Ruth Fertel—the high-end steakhouse acquired development rights to the Philadelphia area, including parts of New Jersey and Long Island, New York. To date, there is one store in Philadelphia, on Market Street; two in New Jersey—Atlantic City and Princeton; and a lone Long Island restaurant in Garden City.

Here’s a look at the map and where the wide-open runway lies: The three franchises Ruth’s Chris bought, located in Philadelphia and Long Island (the Garden City unit), generated revenues of roughly $15 million and contributed $790,000 to franchise revenue last year. Chief executive officer Cheryl Henry told investors during a conference call that the population equation measures up for Ruth’s Chris. The Long Island store, for instance, has a base of roughly 3 million people. “I think the opportunities are there,” she said. “It’s certainly part of why this acquisition is so unique for us, and thinking about our growth and solidifying our [next] three to five years.” “We think there’s opportunities both in the existing restaurants and to grow and we’re thrilled to,” added CFO Arne Haak. “… We’ve talked about this for some time. We’re glad that we can now do this.” The 154-unit chain (78 corporate) historically doesn’t discuss development unless leases are signed and the ink is dry. There are currently four deals for company-run stores in Columbus, Ohio; Washington, D.C.; Somerville, Massachusetts; and Oklahoma City. The first three are expected to open in the second half of 2019. The OKC unit is slated for 2020. A franchised location is also on deck for St. George, Utah, in the first half of next year. Regarding the new development opportunity in particular, Henry wouldn’t put an exact figure on it, only to say Ruth’s Chris can be flexible with site selection. “We have different format stores,” she said. “We can do stores in smaller populations that have worked for us. We can do stores in larger populations.” “I think that actually what’s equally interesting about these different territories that we’re acquiring is that when you think about our ability to go into smaller markets, smaller areas, and larger ones, and be equally successful based on rent, etc.—there’s some good opportunity for us here.” The company has tracked mostly positive results since Henry was promoted to the position in August 2018 from COO. Henry, who joined Ruth’s Chris in June 2007, replaced Michael P. O’Donnell. The quarter prior to Henry’s promotion—Q1 of 2018—company-run same-store sales declined 1.1 percent, year-over-year.

Since:

Q2 2018: 1.3 percent

Q3 2018: 3.7 percent

Q4 2018: -0.1 percent

Q1 2019:  1.8 percent

Ruth’s Chris’ 1.8 percent hike in Q1 came as sales bumped 2.4 percent to $113 million compared to $110.4 million in the prior-year period. Net income was $13.9 million, or 47 cents per diluted share. Average-unit weekly sales also upped 1.1 percent to $114.4 (in thousands) from $110.3. Traffic was flat in the quarter. Average check increased 1.8 percent and comps and transactions took a 200-basis points benefit from the shift of the New Year’s Eve holiday into the quarter. There was also a 90-basis points hit from Easter moving into Q2 this year. Additionally, Ruth’s Chris saw food and beverage costs, as a percentage of restaurant sales, decrease 30 basis points to 28.2 percent thanks to a 3.7 percent drop in total beef costs. The recent operator-store deal won’t be the last for Ruth’s Chris, Henry said. She said the company would “continue to grow our footprint through the opportunistic acquisition of franchisees.” By year’s end, the company should also be about two-thirds of the way done with its 2.0 remodel program (eight are scheduled for this year). Ruth’s Chris’ store investments aren’t designed to simply refresh the brand. They target expansion of sales channels. Mainly, the company wants to make its bar and private-dining footprint larger where it can. “It was really to align the offerings and the experience with the footprint and what the restaurant can deliver, and atmosphere itself,” Henry said. This includes, as noted before, expanding bar and private-dining sections; working on Ruth’s Chris’ main dining area to enhance atmosphere; and then examining the menu and seeing where the chain can improve. “We continue to work it as we think about evolving in the future,” Henry said. “I would say it will be more around the guest experience and how we use technology to do things like reduce friction and enhance the guest experience. And that’s still some of those efforts are still to come.” Henry said Ruth’s Chris’ special-occasion business experienced “significant growth” on New Year’s Eve and Valentine’s Day. And the brand continues to outpace the fine-dining industry, per Black Box, on traffic. – Source: fsrmagazine.

US Foods Names New Chief Supply Chain Officer

Timothy P. Connolly has been appointed executive vice-president and chief supply chain officer for US Foods Holding Corp., effective May 13. In this new role, he will oversee US Foods’ supply chain organization, including safety, warehousing, transportation, supply chain strategy, operations and labor relations. Mr. Connolly will join US Foods from Uline, where he has been senior vice-president of operations since 2016. Prior to that, he spent 16 years with Essendant, most recently as chief operating officer overseeing a network of more than 70 distribution centers. Previously, Mr. Connolly managed supply chain operations at Cardinal Health as regional vice-president, served as operations manager for Beloit Beverage Co. and was a warehouse supervisor for McKesson. “Tim joins the executive team with more than 30 years of experience leading large supply chain organizations,” said Pietro Satriano, chairman and chief executive officer of US Foods. “He has a track record of improving safety, service and productivity by engaging front-line employees, and he will be instrumental in helping us deliver on our ‘Great Food. Made Easy.’ strategy.” – Source: FoodBusiness News.

Dave & Buster’s Names Scott Bowman CFO

Dave & Buster’s announced that Scott J. Bowman was named senior vice president and chief financial officer, effective May 6. Bowman previously served as SVP and CFO of Hibbett Sports, Inc. from July 2012 until April 2019. Before his tenure at Hibbett Sports, Inc., he served in various roles at The Home Depot from October 2003 until June 2012, most recently as the division chief financial officer—Northern Division. He also worked in various controller and accounting management positions with Rubbermaid Home Products, a division of Newell Rubbermaid, Anchor Hocking Glass Company and the Sherwin-Williams Company. “Scott brings a proven track record of success and deep experience working with brands that, like us, are focused on creating a great customer experience. His strategic vision, financial discipline, and care for the people he supports will make him a great addition to our senior team,” says Brian Jenkins, CEO. The company also announced the promotion of Joe DeProspero to the role SVP, supply chain and business development, effective May 6. DeProspero has served as interim CFO since August 2018, as VP of finance from May 2010 until August 2018, and as assistant VP from August 2006 until May 2010. He previously held various financial planning and analysis roles for Arby’s Restaurant Group and Carlson Restaurants Worldwide, Inc. “We’d like to thank Joe for serving as our interim chief financial officer for these past nine months. He has been a tremendous contributor to our success since 2006, and we look forward to his leadership of our supply chain team and business development initiatives,” adds Jenkins. – fsrmagazine.com.

US Foods Names New Chief Supply Chain Officer

Timothy P. Connolly has been appointed executive vice-president and chief supply chain officer for US Foods Holding Corp., effective May 13. In this new role, he will oversee US Foods’ supply chain organization, including safety, warehousing, transportation, supply chain strategy, operations and labor relations. Mr. Connolly will join US Foods from Uline, where he has been senior vice-president of operations since 2016. Prior to that, he spent 16 years with Essendant, most recently as chief operating officer overseeing a network of more than 70 distribution centers. Previously, Mr. Connolly managed supply chain operations at Cardinal Health as regional vice-president, served as operations manager for Beloit Beverage Co. and was a warehouse supervisor for McKesson. “Tim joins the executive team with more than 30 years of experience leading large supply chain organizations,” said Pietro Satriano, chairman and chief executive officer of US Foods. “He has a track record of improving safety, service and productivity by engaging front-line employees, and he will be instrumental in helping us deliver on our ‘Great Food. Made Easy.’ strategy.” – Source: Food Business News.

What Your Restaurant Needs to Know About Expanded Overtime

It’s arguably the best time in history to be an hourly worker. All around the world, there is a resurgence of laws and legislation dedicated to improving workers’ rights and conditions. From pending U.S. legislation to raise the federal minimum wage to the U.K.’s recent increase in the national minimum wage, governments are listening to workers’ calls for support and taking direct action. Businesses are listening, too. While big business used to push back on workers’ rights in favor of maximizing profits, the tide is turning. McDonald’s recently announced that the company would no longer lobby against minimum wage increases. Amazon boosted its minimum wage to $15 per hour, with Jeff Bezos publicly challenging the company’s competitors to meet or beat that rate.

Of course, minimum wage is just one of many agenda items in the battle for fair working conditions. Another important front for workers, and especially for hourly workers, is overtime. Here, too, the landscape is changing. Companies should prepare themselves for the future by understanding overtime’s complicated history, current proposed changes and its possible impact on future operations. The history behind America’s overtime rates. Currently, only about 11 percent of the American workforce meets the qualifications to receive required overtime pay from their employers. That’s because the Fair Labor Standards Act exempts companies from paying overtime for any employee that makes more than $23,000 per year. This number has remained unchanged for 15 years, with its last revision back in 2004. Many people have said that it’s time for a change—the Obama administration, the Trump administration and the American people themselves.

According to Fortune, a Public Policy Polling survey showed that 65 percent of respondents supported required overtime pay for people making $75,000 and under. When the Obama administration tried to bump up the current $23,000 figure to $47,476, though, it encountered resistance and ultimately was rejected when a federal district judge in Texas ruled against the raise. Renewed efforts to increase overtime options. In March, the U.S. Department of Labor proposed a new, scaled-down effort that would require companies to pay overtime for any employee making $35,000 or less. This change would extend benefits to an additional 1.2 million people. While fewer people stand to benefit than under the previous proposal, the Trump administration is hoping that the less extreme change will be able to surmount any legal challenges. A likely win for workers.

Aside from the figure alone, there are additional differences that makes the current proposal more likely to pass. The first is due to an unprecedented amount of economic growth in recent years, meaning that competition for workers is stiffer. The “battle for talent” used to apply only to white-collar professions like tech workers. With a national unemployment rate of just 3.8 percent, though, even those in hourly worker positions find that employers are eager to recruit and retain hardworking, responsible employees. With so many gig economy options for workers to choose from, like Uber, Lyft or TaskRabbit, hourly workers have more choices than ever before. That puts workers in a better bargaining position, and companies may need to be more amenable to offering overtime. Additionally, as an optimist might venture to say: perhaps we really are moving to a more fair, just world in which all workers can expect to work in a safe environment, in proper conditions and for an acceptable level of pay. If so, the more time that passes, the more companies will be held to higher standards. One can certainly hope.

How businesses can make the best of required overtime. Increased costs will always be a burden for businesses, but required overtime pay can also be framed as an opportunity. When more people are satisfied working hourly jobs, businesses will be increasingly able to hire said employees to meet their needs. In turn those workers are likely to consume more products and services which will help businesses. And Companies will also garner the flexibility to ramp staffing up and down to meet changing demands. In the end, positive working conditions are fundamentally better for society. This, in turn, makes favorable working conditions good for businesses. The businesses that will come out on top are those who are prepared to adapt and who welcome change with open arms. – Source: fsrmagazine.

Steak ‘n Shake Temporarily Closes 44 Locations Amid Refranchising Effort

Steak ‘n Shake Inc. has temporarily closed 44 company locations as it looks for a franchise partner to take over the units, according to a regulatory filing by the brand’s parent company Biglari Holdings Inc. In the quarterly filing, the company did not provide any more details about the closures. Last year, Steak ‘n Shake launched a training program for prospective operating partners amid the brand’s move to a more franchised model. Incentivizing comes as the brand has struggled with sales and foot traffic. Steak ‘n Shake reported a 7.9% drop in same-store sales for the quarter, compared to a 1.7% drop a year earlier, same period. The drop was driven by a 7.7% decline in customer traffic, the San Antonio, Texas-based company said in a May 3 quarterly report. For past three completed fiscal years, Steak ‘n Shake’s same-same-store sales have declined 5.1%, 1.8% and 0.4%, respectively, according to NRN Top 200 research.

In a February statement to shareholders, Biglari chairman Sardar Biglari said Steak ‘n Shake’s disappointing three years can be attributed to failing at speed and service. “Despite our unwavering dedication to product quality and low prices, we erroneously stayed with equipment and kitchen design that was ill-suited for volume production,” the shareholder letter stated. “The effect has been high-cost, labor-intensive slow service. We failed customers by not being fast and friendly.” For the first quarter ended March 31, Biglari had 639 systemwide units operating under the brand names, Steak ‘n Shake and Western Sizzlin. That’s down from 678 for the same period a year earlier. Of those 639 units, 580 are Steak ‘n Shake locations. Biglari’s revenue from restaurant operations was $173.8 million, down from $193.9 million for the quarter. For fiscal 2018, the company’s restaurant business had revenue of $775.7 million, down 3.9% from fiscal 2017’s $807.2 million. For fiscal 2018, restaurant operations had a net loss of $2.6 million, compared with net earnings of $9.7 million in fiscal 2017 and $24.8 million in fiscal 2016.   Source: NRN.

PepsiCo to invest $4 billion in Mexico

PepsiCo, Inc. has announced plans to invest $4 billion in Mexico between 2019 and 2020 as part of a broad growth initiative focused on four strategic pillars. “We are proud of our more than 110 years of history in Mexico, and we are excited for the next 100,” said Ramon Laguarta, chairman and chief executive officer of PepsiCo. “Mexico is our largest operation in Latin America and the second worldwide. It is an honor for us to have a positive impact at all levels of the country’s economy, from the countryside to the corner stores in each location.” PepsiCo said its investment will focus on four strategic pillars. First, the company has its sights set on development of a single agricultural model that benefits the production chain. The PepsiCo Mexico System, which comprises PepsiCo Alimentos Mexico (PepsiCo Mexico Foods, PMF) and its strategic partner Grupo Gepp, plans to invest more than $1 billion in local raw materials, such as potatoes, corn and sugar, from small, medium and large producers. Second, PepsiCo said it will look to strengthen its infrastructure to maximize production capacity. The company said PMF intends to invest $109 million in Mexico’s first new plant in 20 years. The facility, which will be located in Guanajuato, will make a variety of PepsiCo snacks, including Doritos, Sabritas and Cheetos. The facility is expected to create an additional 1,000 jobs when it reaches full capacity in 2025. A third pillar is development of a strong sustainability agenda. PepsiCo said PMF will continue to work to reduce CO2 emissions and increase the use of renewable energy in its operations in Mexico. The company also said it plans to invest $13 million to further reduce saturated fats. Finally, PepsiCo said it remains committed to promoting community development. Through global and local foundations, the company said it plans to invest more than $7 million in development programs focused on water, recycling, nutrition and the empowerment of women. Miguel Antor, c.e.o. of Grupo Gepp, concluded that “the announced initiatives program confirms the long-term business philosophy and Grupo Gepp’s commitment to continued reinvestment in Mexico.” – Source: FoodBusiness News.

3 Ways to Keep Restaurant Employees on Your Team            

Of all the challenges faced by operators, interviewing and hiring new employees is one of the biggest headaches. In 2017, TDn2K’s People Report showed voluntary turnover across the restaurant industry had reached 70 percent—a 10-year high—and Italian brands have been no exception. Although rates have stabilized over the past few years and high employment rates mean staff will be more conservative about trying to change jobs, maintaining a consistent, skilled, and reliable staff continues to be one of the biggest priorities for restaurateurs in all segments. The reasons that restaurant employees leave a job, often without notice, are plentiful and varied—from seasonal factors and pay rates to internal conflicts. And although many operators are resigned to accept this fact and deal with scheduling snafus as necessary, there are a lot of solutions available to mitigate personnel loss. The most important step in dealing with abrupt and frequent turnover is preparing ahead of time and responding quickly in order to fill vacancies. By implementing certain software and services into their restaurant management system, operators can more quickly identify qualified candidates to fill empty spots on their team, including waitstaff, hosts, bartenders, line cooks, dishwashers, and managers.

Screening.

Before an operator invites candidates for interviews, it is critical to first identify—and when possible recruit—the best possible talent. Many restaurateurs struggle with knowing how to best market an open position, and how to cull less-qualified applicants from the interview pool. Ensuring that only the best people make it to the interview stage relies on an efficient application and screening process. “Because the labor market has gotten smaller, it’s more difficult to source great candidates,” says Rob Hunter, CEO of HigherMe, a company that uses technology to improve the hiring process for restaurant employees and managers. “Many employers think that sourcing talent and the way that applicants apply for certain jobs are unrelated. However, we’ve found that the ease with which someone can apply to a job heavily contributes to whether a candidate actually completes the application.” For example, many operators continue to provide lengthy application documents—both paper and digital—which are often cumbersome for applicants to complete. And while many restaurant leaders believe the best applicants won’t be deterred by difficult applications, Hunter says it’s actually the best candidates who are less willing to “put up with that friction” because they recognize they will have other options in the market due to their talent. Applicant tracking systems, such as the service offered by HigherMe, streamline application processing for managers while simplifying requirements for applicants. With older systems, potential employees would often start applications but don’t never finish them. Newer platforms boost completion rates, according to Hunter. “The application completion rate averages about 25 percent with older systems,” he says. “With HigherMe, application completion is close to 75 percent.” In addition, newer systems allow operators to ask applicants more relevant and nuanced questions, keeping candidates engaged with the process and providing operators with information that speaks better to an applicant’s skills than a list of past job experiences. By simplifying application processes for prospective candidates, operators can attract better employees. Eliminating friction for both applicants and the managers who make hiring decisions not only improves efficiency restaurant-wide, but also ensures that by the time candidates are called for an interview, they are among the best prospective team members available. “The ease with which someone can apply to a job heavily contributes to whether a candidate actually completes the application.”

Interviewing.

According to Patrick Lencioni, author and CEO of The Table Group, one of the biggest ways restaurant leaders can cut turnover is by making the right hiring decisions from the start. This means conducting thorough vetting of prospective employees and making sure they embody the right personality traits to support a restaurant’s performance goals. “Make the interview a team effort,” Lencioni says. “Invite multiple team members to meet each candidate, and then ask everyone to debrief afterwards.” If your team is unsure how to conduct interviews effectively, it may be time to meet with an interview specialist. A consultant can provide an objective outside opinion on why former staff have left a restaurant team in the first place, and will help brands identify problems which might contribute to turnover. At The Table Group, Lencioni and his team of consultants work with restaurateurs and managers who want to improve organizational efficiency and secure outstanding team members who will contribute to the brand’s long term success. “The ideal team member is humble, hungry, and smart,” Lencioni says. “She cares about sharing accomplishments with the team, constantly strives to learn and do more, and knows how to deal with customers.” By identifying these characteristics in candidates during the interview process, restaurant operators can feel more confident about their hiring decisions.

Onboarding.

Once the right employees have been screened, interviewed, and ultimately hired, restaurant operators sometimes make the mistake of training them poorly—or not at all. One of the biggest contributors to staff turnover in the restaurant industry is lack of training, so it is critical that restaurateurs invest in tools and materials that prepare team members for ongoing success. Innovative restaurants, such as the Denver-based Modern Market Eatery brand, are finding success by embracing mobile training platforms, such as PlayerLync, which implement training within the real-life workspace. Access to integrated technology systems that notify staff of menu or recipe changes as they occur is critical to the overall success and efficiency within a restaurant. “People generally want to do the right thing,” says Alex Walsh, Modern Market’s senior training manager. “Usually when a mistake is made, it’s because the person didn’t know the proper technique. With mobile training, our team members can look up information in the moment or capitalize on down-time by perusing content to learn and widen their scope of understanding about the company. Using this tool gives us confidence that food will be made the same and team members will all be following the same specs.” On-the-job training is critical for every type of restaurant, however operators can streamline that process by ensuring that new employees are supported with information and resources available at their fingertips. When staff members are more confident in their own knowledge and skills, they are more likely to stay with their present company. Restaurants benefit in turn, because turnover is reduced, efficiency is increased, and the overall skill level of front- and back-of house teams is greater. – Source: Sapore Magazine.

Dunkin’ Is Taking Its Next-Generation Store to Texas and Beyond

Dunkin’ announced a sizable expansion for 50 new locations outside the Northeast, the chain’s home region and where it’s historically held stores. The expansions will include elements of the chain’s next-generation store, which caters to mobile ordering, more modern design, and more espresso drinks. In a press release, Dunkin’ said the new locations are part of an ongoing plan to open 200 to 250 new restaurants each year over the next three years. For this round, the company will head to Texas, Michigan, Southern Kentucky, Minnesota, Wisconsin, North Carolina, Nevada, and Missouri. Notably, many of the planned expansions are with longtime franchisee groups. Even more notable is that with these deals, Dunkin’ will offer “flexible concepts for any real estate format,” according to the press release. Given that one-size-fits-all store redesign formats has been a point of friction for other restaurants, this flexibility could be a more rewarding way to go about expanding and redesigning. Dunkin’s already made it clear to the world it’s trying to compete with other coffee-beverage brands (Starbucks, McDonald’s) with its next-gen concept store, which it launched at the beginning of 2018 in its hometown of Quincy, MA. The store, which has since made its way to other areas in the North, offers dedicated drive-thru lanes for mobile orders, on-tap (coffee) beverages, and delivery options with third-party companies like Grubhub.

Grant Benson, CFE, senior vice president of franchising and business development, indicated in the press release that new locations will offer those features, and that Dunkin plans to “capitalize on the momentum we experienced in 2018.” That momentum is evident: same-store sales at Dunkin’ were up 2.4 percent in the first quarter of 2019, and CEO David Hoffman said this was the largest quarterly same-store sales gain in four years. He also noted it was the result of “technology advancements” (and espresso drinks). Dunkin’ isn’t a totally foreign presence outside the Northeast; outposts like Dunkin’ Express are becoming more and more common at places like highway truck stops. But those are basically drip coffee and donut stations within an existing convenience store, and would only go so far when competing with the likes of Starbucks or McDonald’s. Expanding not just full-service locations but features of its next-generation concept would help give Dunkin’ a greater presence coast to coast, something it’s going to need if it wants to stay relevant. What would really up the competition would be for Dunkin’ to adopt an AI strategy like the one McDonald’s just did when it acquired Dynamic Yield. While there’s no indication that such a deal is in the works, or even if AI is going to be that much of a competitive differentiator, it doesn’t seem out of the realm of possibilities as Dunkin’s next move. – Source: The Spoon.

The Chain Plans to Launch a New Format Store this Year

Potbelly Corp.’s 2019 turnaround plan was derailed in the first quarter by bad weather and the government shutdown, the company said. Earlier this year, the Chicago-based sandwich chain launched its recovery plan, which included a revamped menu, augmenting in-house delivery with DoorDash and product innovation. But those initiatives were overshadowed by unseasonably cold temperatures across the brand’s two key markets — Chicago and Washington, D.C. — CEO Alan Johnson told investors during a Tuesday conference call. Same-store sales in the first quarter declined 4.7% at company stores. To reverse the downturn, the company increased ad buys in the current quarter. While traffic improved slightly at Potbelly Sandwich Shops, it wasn’t enough to justify the ad spend, company leaders said. “As a result, we are taking a step back to assess our marketing effort, and we expect to take our learnings and apply them with a fresh approach to drive a more productive outcome,” Johnson said in a statement. During the quarter, the company also closed eight underperforming restaurants, including seven company stores. Chief financial officer Tom Fitzgerald said in some cases the company had to “cut checks” to get out of leases on stores that “we couldn’t find a way to make profitable.” “They were definitely a drag,” he said. For the year, the chain plans to close 15 to 22 restaurants, including 9 to 12 company stores. Despite the first quarter setbacks, Johnson said several initiatives are working including the mid-February rollout of a $7.99 “pick-your-pair” bundled meal. The combo meal includes choices of half a sandwich, mac and cheese, chili, a cup of soup and a half-sized salad. The pairing option also allows diners to add on other items at a discount such as chips and fountain drinks. Johnson said check averages are going up because customers are buying more items. “That’s the way you want to see it,” he said. Off-premise sales grew in the first quarter with pick up being the fastest segment. Stores are in the process of installing pick-up racks for guests. The company’s loyalty program is also performing well, with 1.3 million registered users, up from 800,000 last year, same quarter. Johnson said loyalty members accounted for 18% of sales in the first quarter, up from 8% last year, same quarter. The company plans to upgrade the loyalty program with a “virtual punch card” system designed to drive frequency and retention, Johnson said. That will roll out in June. Johnson said the company will “keep plugging away to find the right balance” of initiatives that will support positive results for the brand.

“It’s important we keep looking for that sweet spot,” he said. Johnson said later this year the company plans to roll out a new store design called the Shop of the Future. He said the new format cost 25% less than the current model to build. It significantly improves customer experience without losing the brand’s identity, he said. The company closed the quarter with 481 restaurants. Of those, 431 are company stores. In 2019, the company plans to open 12 to 18 new restaurants, including six to eight company stores. On Monday, May 6, the first Potbelly Sandwich Shop in California opened, in Irvine. The Southern California restaurant is operated by franchisee Sameer Bhatia, who plans to open three more Potbelly shops in the area. Total revenue for the quarter ended March 31 decreased 4.7% to $98.1 million, compared to $102.9 million in the same quarter of 2018. Net loss of $18.4 million, or 76 cents per share, compared to a $2.2 million loss, or 9 cents a share, for the same quarter last year. The loss was primarily driven by a one-time tax charge of $13.6 million. – Source: NRN.

Reusable Packaging is Gaining a Foothold in the Fight Against Waste

In a quest to cut down on packaging waste and the toll it takes on the planet, more foodservice and consumer packaged goods companies are beginning to consider reusable containers. Packaging that can be repeatedly cleaned and reused offers a solution that is in many ways simpler than recycling, which hasn’t proven to be a panacea for the world’s waste problem. Despite a rising awareness among consumers and corporations of the problem plastic waste poses to the environment, the vast majority of plastics are not recycled. Of all the plastic waste generated since 2015, only about 9% has been recycled, according to a report by researchers from the University of Georgia and the University of California. That figure casts a shadow over some companies’ efforts to ease the plastic problem by rolling out recyclable options.

Building a better cup. For many restaurants and other foodservice operators, plastic straws became the main focus of packaging sustainability efforts when cities began banning them in 2018. Many stores started doling out straws only upon request or replacing the non-recycleable plastic ones with paper versions. This summer, Starbucks will start a six-city test of new cold cup lids that don’t require a straw. While the polypropylene from which the lids are made can be recycled, only 5.1% of polypropylene was recycled in the US in 2015, according to the most recent data from the Environmental Protection Agency. In March, shareholder activist group As You Sow called for Starbucks to do more to reduce its environmental impact, including revisiting its earlier goal of making more of its packaging reusable, The Intercept reported. While the recyclable lids aren’t a perfect solution to the problem of disposable cups, Stabucks is involved in other efforts to address the issue. The coffee chain is a founding partner of the NextGen Cup Challenge, an initiative that aims to find a sustainable alternative to plastic foodservice cups and lids. Many of the top ideas submitted for the challenge focus on disposable cups that are recyclable or compostable, but several ideas also center around reusable cup service models. A company from the UK called CupClub is described as “bike sharing, but for cups.” Consumers can drop off empty cups at collection points, where they are picked up before being cleaned and redistributed. Colorado-based company Vessel Works also uses the bike-sharing analogy for its cup rental service. The company launched with four coffee shops in Boulder, Colo., last year, and now lists seven participating stores on its website. Consumers sign up for the service using a free app and return used mugs and lids to a participating cafe or return kiosk. There is no up-front fee, but users are charged if they don’t return a cup within five days. For cafes, the price Vessel charges for each cup is less than what they pay for disposable cups, founder Dagny Tucker told Fast Company. Another perk for foodservice operators is that Vessel tracks the cups to make sure each cafe is stocked and handles the washing of all the cups, so cafes don’t need to factor dishwashing time into their transition away from disposable cups.

Big Brands Buy into Reusable CPG Packaging

Foodservice packaging accounts for only a small portion of the trash that ends up in landfills. In fact, paper and plastic waste from foodservice packaging makes up just 1.6% by weight of total municipal solid waste, according to EPA data. In an effort to reduce packaging waste from consumer packaged goods, New Jersey-based TerraCycle developed a product delivery service based around reusable packaging. TerraCycle will introduce the service, called Loop, later this month in Maryland, New Jersey, New York and Pennsylvania. It plans to follow with a September roll-out in London before launching in Canada, Japan, Germany and more US regions in 2020, CBS News reported. The service, which the company’s website describes as “ the milkman reimagined,” delivers food and household products to consumers in a reusable tote, which is then used to collect empty containers. When the tote is full, users can schedule a pick-up so the packaging can be returned and reused. Several large companies have partnered with Loop to create durable versions of their product packaging. Procter & Gamble will start with brands including Tide and Pantene, and Unilever’s initial participating brands include Dove, Hellmann’s and the personal care brand Love Beauty and Planet. The model depends on repeated use, so Loop is banking on the idea that offering familiar brands in premium packaging will drive consumers to stick with the service. “It takes five Loop cycles of fill and reuse to be better from an environmental standpoint,” Procter & Gamble Vice President and Chief Sustainability Officer Virginie Helias told Greebiz. “We hope [it] can go way beyond that but that’s exactly why we are testing in market. It’s to validate that assumption.” Consumers take reusable packaging into their own hands.

Convenience is a driving factor behind the proliferation of disposable packaging. Getting consumers to carry their own containers to the grocery store, coffee shop or their go-to take-out spot will require a major shift. But for some eco-conscious shoppers, new habits are starting to take hold. Stores like Packaga Free Shop and Precycle in New York City cater to shoppers looking to go waste-free with items sold in bulk or in reusable, non-plastic packaging. Website Literless lists grocery stores in every state that sell bulk dry goods and other food items that shoppers can carry home in their own containers. Carrying containers to the grocery store isn’t a common practice for most shoppers, but reusable grocery bags have become more prevalent, thanks to taxes and bans on plastic bags. Inspired by the bag bans, Berkeley, Calif., announced in January that it will require coffee shops to charge an extra 25-cents for orders in a disposable cup.

A survey of Berkeley residents before the tax was imposed found that 70% said the extra charge would convince them to bring their own cups, Bloomberg reported. Long before Berkeley introduced the idea of a tax on disposable cups, coffee shops all over the country have offered customers a discount for bringing their own cup. Starbucks, Peet’s Coffee and many other chains give a 10-cent discount for orders in reusable cups. To help consumers weigh the sustainability of restaurants, and find locations that offer reusable cup discounts, restaurant review site Yelp recently announced that it will start tracking which eateries offer the discount. The site will also ask reviewers to note which restaurants are free of plastic utensils or plastic bags,S kift Table reported. Most consumers who bring reusable cups to coffee shops are probably driven by concern for the environment, rather than the 10-cent savings. Reusable cups, bottles and straws have become something of a status symbol, giving consumers a way to not only be environmentally friendly, but to exhibit their values in a stylish way. There is a wide range of reusable drinking vessels to choose from, and their popularity is rising. Sales of KeepCup, which offers attractive cups designed in barista-standard sizes, are up 20% year over year, the company’s Jamila Williams told Eater. Whether consumers bring their reusable containers from home, rent them from a cafe or get them delivered by a grocery service, one thing is certain: Stemming the tide of packaging waste will take a joint effort between companies and consumers. – Source: GMA SmartBrief.

Taking the Pulse of SmartLabel

As consumers increasingly demand more comprehensive information about the food they buy and the products they use in their homes, CPG companies are finding ways to make it readily accessible. SmartLabel, an industry-led initiative with hundreds of brands involved, is helping them do just that by offering a platform for transparency and simple data sharing. A joint initiative from the Grocery Manufacturers Association and the Food Marketing Institute, SmartLabel allows consumers to digitally access detailed product information that goes beyond what appears on the package label. More manufacturers and retailers are adopting the platform thanks to a sea change among curious and savvy shoppers.

A consumer shift: According to FMI’s Transparency Imperative study, 86% of consumers believe it is important for brands and manufacturers to offer detailed information about their products. What’s more, 75% of consumers say they would switch brands for a product that offers more in-depth information about what’s in it. Dagan Xavier, co-founder and senior vice president of data at Label, which offers SmartLabel solutions for manufacturers and retailers, believes the industry demand behind SmartLabel stems directly from a consumer demand for more and greater transparency. As he puts it, “Transparency is not a fad, it’s a right.” Picking up the pace. Since its inception in 2015, SmartLabel has come to cover nearly 55,000 products, with about 20,000 more expected to be added to the platform within the year. While more products are consistently being added, adoption has taken time, Xavier explains. “There was a bit of a slow adoption curve there, primarily because this type of data and information is not always on the package for these CPGs,” he says. Besides the consumer demand for more transparency, Xavier believes industry-wide shifts such as bioengineered food disclosures and other regulatory changes have caused SmartLabel adoption to increase. “There’s so much movement going on that [is] also an influencer here on initiating brands to really get their data in order,” he explains.

For Xavier, a key aspect of SmartLabel has been creating a positive consumer experience by going beyond simply replicating what’s on the label. While companies initially used SmartLabel for compliance reasons, they’ve begun looking for other ways to add value by telling their brand story and sharing information with consumers about corporate social responsibility, says Abbie Bys, Label Insight’s director of product development. Hellmans, for example, uses its SmartLabel to define cage-free eggs and tell customers where it sources them, Bys says. As FMI’s Doug Baker explains, Coca-Cola also integrates its SmartLabel with a website that offers facts about its products, furthering the opportunity to have a worthwhile conversation with customers. What’s next? The number of products on the SmartLabel platform is expected to increase exponentially, and Bys expects the breadth of products to also increase. More products ranging from pregnancy tests to over-the-counter medications and Q-tips are likely to be added as time goes on. Bys believes consumers will increasingly seek out information related to the lifecycle of a product, whether it’s a food or household item. “If you bought a motorized mop tool, how do I actually recycle this or how do I dispose of this?” she muses. More specific templates based on product type were also introduced this year, making it easier for companies to list their items. In the end, “Adoption is going to be significant,” Baker says. “Consumers are going to want to see it on anything and everything.” – Source: SmartBrief.

Bar Rescue’s Jon Taffer Launching Restaurant Concept Taffer’s Tavern

Jon Taffer, award-winning hospitality expert, business consultant, and celebrity entrepreneur, announced the launch of his own, innovative restaurant concept Taffer’s Tavern, a high-volume, small footprint format that uses the latest technologies to produce high-quality food and beverage offerings without the need for a traditional commercial kitchen. Taffer is partnering with Fransmart, the franchise development company behind the growth of brands like The Halal Guys, Five Guys Burgers & Fries, and QDOBA Mexican Grill, as the exclusive franchise development partner to facilitate expansion for the emerging brand. Building on Taffer’s more than three decades of hands-on consulting experience specializing in nightclubs and pubs, Taffer’s Tavern is designed to unite a best-in-class beverage program and the most interesting bar fare with a streamlined kitchen and the latest advancements in food preparation technology, requiring far less space and far fewer employees than traditional casual-dining restaurants.

Together with Fransmart, he is seeking out experienced franchisees to bring the Taffer’s Tavern concept to the 50 largest media markets throughout North America, with a priority focus in Las Vegas, Washington D.C. and similar trade areas. “Taffer’s Tavern is a smart, new casual concept poised to address the multiple pain points that I see frequently across the industry,” Taffer says. “Our vision is to create exciting, first-rate menu items in a setting that doesn’t require a traditional range hood and ventilation system, which allows for tremendous versatility in scouting preferred locations and streamlining restaurant operations. I came to Fransmart because I knew they would understand and embrace my vision, and I look forward to working together to find franchise partners who are as passionate as I am to bring Taffer’s Tavern across the continent.” Just as fast casual and quick-service concepts blurred the lines between casual dining and fast-food chains to become today’s restaurant industry darlings, Taffer plans to apply his extensive experience and business acumen to define a “new casual” dining experience and franchise offering with Taffer’s Tavern. In addition to the investment opportunity of a unique, high-volume concept with low price conversions, reduced staffing requirements and broad real estate appeal, Taffer’s Tavern franchise partners will also benefit from the combined expertise that Taffer and Fransmart bring to the table, from innovative menu design and creative marketing, to employee training programs and customer service strategies. There will be servers, but also self-ordering and copacked kitchens for lower labor levels. “Every large franchise group I’ve spoken to is interested in this type of concept,” says Fransmart founder and CEO Dan Rowe. “The idea of doing more volume in smaller spaces, lower capex and with fewer employees is right on the money. There are several high-quality locations with tired, irrelevant casual dining restaurant concepts that we are targeting to convert to Taffer’s Tavern.”

Taffer takes a no-excuses approach to counseling family-run businesses as the host and executive producer of docu-reality series Bar Rescue on Paramount Network, where he offers his professional expertise, plus renovations and equipment upgrades, to desperately failing bars in order to save them from closing. Paramount Network recently announced the show’s renewal for a seventh season, and revealed a new, original spinoff called Marriage Rescue, in which Taffer uses unconventional methods to help married couples rebuild their relationships. – Source: fsrmagazine.

José Andrés to open new concept in Harpers Ferry, West Virginia

José Andrés’ ThinkFoodGroup has been tapped to develop a new concept at the historic Hill Top House Hotel in Harpers Ferry, West Virginia. Details have yet to be revealed, but the hotel, first built in 1888, is being resurrected by Swan & Legend Venture Partners affiliate Swan Hill Top LLC, in partnership with Interstate Hotels & Resorts. It is scheduled to open in 2022. The full-service restaurant will offer panoramic views of the Potomac and Shenandoah rivers, and the group will also handle the resort’s all-day food and beverage offerings, the company said. Harpers Ferry is about an hour from Washington, D.C., and has long been a sought-after weekend destination. “José Andrés is not only an incredible chef, but also a two-time James Beard Foundation Award winner, a world leader and a great humanitarian determined to feed the hungry, particularly those who have suffered in natural disasters,” said Karen Schaufeld, CEO of Swan Hill Top, in a statement. “Having the ThinkFoodGroup team involved in the project gets us a step closer to our goal of creating a destination that will be the most sought-after locale for thought leaders and discerning travelers alike.” Based in Washington, ThinkFoodGroup operates more than 30 restaurants, including the  minibar, Jaleo, Zaytinya and the recently opened Mercado Little Spain. – Source: Restaurant Hospitality.

Del Taco: Beyond Meat Tacos Attracting New, Lapsed Users

System wide same-store sales at the quick-service Mexican food chain slid 0.1% for the first quarter, compared to a gain of 3.7% for the same quarter last year. The dip ends the company’s 21-quarter streak of positive same-store sales. CEO John D. Cappasola Jr. said sales and transactions were impacted by unfavorable weather in California and a delayed Lenten season.

In the second quarter, comparable restaurant sales have swung back to positive territory — driven, in part, by the March launch of $4, $5 and $6 Fresh Faves value boxes. The “full meal deals” are meeting growing consumer demand for “abundant” value, Cappasola told investors during a Monday afternoon conference call. The recent national launch of Beyond Tacos, made with plant-based meat from Beyond Meat, has also shown early promise.  “We feel great about the launch of Beyond Tacos,” Cappasola said. Specifically, the CEO said the vegan tacos are generating a lot of social media buzz for the brand, which is leading new and lapsed customers to try the Beyond Meat offerings. The key is to keep those customers coming back, Cappasola said. “We’ll see where it shakes out,” he added.

The $2.49 tacos are made with seasoned, plant-based crumbles from Beyond Meat, which had a blockbuster initial public offering last week. Cappasola said the new tacos are also improving check average trends because they’re about $1 more than The Del Taco.

On the digital side, the Lake Forest, Calif.-based chain said it has logged 500,000 registered users on its revamped app. This summer, the company plans to add mobile pickup and delivery options on the app. Offering direct delivery is a growing trend in the industry with Chipotle Mexican Grill one of the first large scale restaurant brands to offer consumers delivery through its own app. Del Taco, currently found on the Grubhub marketplace, also plans to add delivery through Postmates and DoorDash later this year.

The company purchased three franchised restaurants and sold 13 restaurants during the quarter. Last week, the company hired The Cypress Group to manage its refranchising initiative in four non-core Western markets. Cypress is charged with finding operators with a proven track record for growing brands, and who are the “right cultural fit” for the brand, Cappasola said. The company’s goal is to shift its franchise mix from 45% of total units to 55% by 2020.

For the first quarter ended March 26, Del Taco revenue of $114.2 million increased 1.5% compared to $112.6 million for the first quarter of 2018. Same-store sales at company stores decreased 0.6%, while franchise same-store sales increased 0.4%. Net income of $1.4 million, or 4 cents per share, decreased compared to profit of $3.2 million, or 8 cents per share, for the same quarter last year. The company opened four restaurants and closed one during the quarter, bringing Del Taco’s system-wide total to 583. – Source: NRN.

Patxi’s Pizza Puts Quality First as it Grows

Since day one, product quality has been the main focus at Patxi’s Pizza. That tradition won’t change as the San Francisco-based deep-dish pizzeria enters a fresh phase of growth under new ownership. Elite Restaurant Group, which operates Slater’s 50/50 and Mediterranean-inspired fast casual Daphne’s, purchased Patxi’s last September. Elite’s leadership is expanding Patxi’s menu without sacrificing the quality guests have come to expect.

But top-notch food comes with a price, says Ernie Romo, director of operations for Elite Restaurant Group. And educating customers has become goal No. 1 in the refresh. Romo doesn’t want guests to get sticker shock at the end of their meals, where a deep-dish pizza can cost between $25–35. So Patxi’s is trying to build in value where it makes sense. This means adding weekly promotions, like date night dinners for two, where a pair can split a pizza and a bottle of wine for an affordable flat rate. Or dessert pizza night, which highlights Patxi’s first dessert offerings in its 15-year history. With these new promotions, the chain is trying to attract new customers, reengage lapsed users, and inspire repeat visits from loyal guests,

Romo said. Patxi’s is also working on a mobile app and loyalty program that can offer another outlet for incentives. An expanded lunch offering is increasing traffic, too. Before this latest menu launch about two months ago, Patxi’s mid-day offerings consisted mostly of pizza. Customers just didn’t have the time to dine at Patxi’s for a pizza that had a 45-minute ticket time. Slowly, Patxi’s made changes to accommodate guests who needed to get out the door quicker, Romo says.

Along with a slice program, the new lunch menu includes a lineup of sandwiches, including a chicken pesto melt and a meatball sub, and soups. “A classic chicken noodle and minestrone aligns with what we’re looking for and allows us to do things like lunch specials for a good value,” Romo says. Patxi’s pizza menu has some new additions as well, including a Chicken Tikka Masala option and the aforementioned dessert pizzas, which include Roasted Caramel Apple Pizza—Patxi’s thin crust pizza topped with caramel apples, cinnamon, cream cheese and caramel drizzle—and S’mores pizza. Shareable appetizers, like the Spicy Sausage Rolls, were also added. “I wouldn’t call it as much of an overhaul as more of an addition to make it even better than it already was,” Romo says.

Cross-utilization of ingredients lets Patxi’s offer an expanded lunch menu and new offerings without putting too much strain on the kitchen, Romo says. The team had a slight learning curve when it came to integrating sandwich making, but since launch, the transition has smoothed over. “We’ve been recalibrating and retraining to have a different focus and be ready to crank out a high-quality focaccia bread sandwich at a strong ticket time during lunch,” Romo says. Patxi’s San Francisco area director, Will Morthole, says the menu changes are ones that guests have been asking for. And Patxi’s is just scratching the surface when it comes to the lunch daypart. Traffic is already picking up, and Morthole thinks it will continue to increase as faster ticket times become a part of the operational norm. He also believes the lunch menu will attract new customers to the catering part of Patxi’s business. “In an office maybe they’re only going to order pizza once a month,” Morthole says. “But now that we have different catering options with sandwiches, soups, and some different appetizers, I think we can open ourselves up to a lot more catering opportunities.”

Even though Patxi’s is a full-service brand, the pizza chain has a strong hold on delivery across its 17 restaurants in California, Colorado, and Washington. The means are constantly evolving, however. Patxi’s started out with in-house delivery before bringing on third-party partners. Now, the company is starting to transition back to in-house service, adding more drivers to the team. But that strategy doesn’t work in every market, Romo says. Patxi’s is working out how to service every store properly. In San Francisco, for instance, customers are willing to pay delivery fees for the convenience. “But in some of our other regions, like Colorado where it’s a little more spread out, we’ve been able to deliver ourselves and be our own delivery teams, and take control of the hospitality experience,” Romo says.

The brand is trying to balance speed and cost without losing control of the customer experience. Relying on someone who isn’t a part of the company’s culture is a risky proposition. “You’re gambling with the fall through of the promise in ensuring that guests are getting the quality that they’re used to after 15 years of understanding what a Patxi’s pizza is all about,” Romo says. That control exists in Colorado, but hasn’t quite fit into the San Francisco market yet. And the solution isn’t an easy one. Recruiting qualified drivers to join the Patxi’s team exclusively is a challenge, Romo says. Drivers who work with other delivery services can be their own boss and fill up their schedules with whatever orders they choose. In order to make the new driver positions cost effective, Romo says, the company will cross-train employees. Drivers will handle kitchen prep and expediting orders to make sure they get out on time. This strategy is working across the Colorado market, and Romo believes it will help as the brand expands. “I think the answer to the delivery question depends on where you’re at regionally,” Morthole says. “If you have a third-party delivery company that can supplement your delivery drivers to help you not have 10 delivery drivers on your schedule on a Friday night when you’re doing the most amount of delivery, that’s great. Or if you have five cross-trained people and you can supplement that with using a third-party platform on a higher-density population area. I think that’s the answer.”

Patxi’s is being careful when it comes to expansion. All restaurants are company-owned and that strategy will continue in the near future. For now, franchising is off the table, Romo says. San Diego is the next area of focus for growing Patxi’s. Over the next few months, two locations will open in Chula Vista with a third following in Hillcrest. Romo sees a lot of potential for development in Southern California. “We want to make sure that we have a model that’s refined with some of our goals that we’re trying to achieve—building catering, building sales and check averages, getting the guests to a better overall experience—are being met,” he says. Every market is in play. Given that Elite’s other restaurants brands have a strong foothold in Texas, it’s a safe bet that could be the next major area of development for Patxi’s. “I definitely believe there’s value to continue to grow where we already exist and where there are roots to make our presence more firm and increase some awareness,” Romo says. “I think Texas is a no brainer for the hospitality industry.” – Source: Sapore.

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