To Our Valued Subscribers:

The reaction surrounding the COVID-19 virus has been surreal to watch unfold since our last newsletter. I’m confident in our resilience and hope the unfortunate, but necessary pause, allows us the ability to reenergize our efforts in making our industry stronger than ever. We encourage you to assist those impacted most in the food service industry who need our support. In the meantime, be well (and safe).

Craig Wilson

President

The restaurant industry is home to more than 15 million trained and skilled employees in restaurants across the country serving the public every day. The restaurant industry is open and the tables at America’s 1+ million restaurant and foodservice locations are always a great place to gather with friends and family. To ensure that restaurants have the latest information about coronavirus, we created this industry-specific guidance for owners and operators. The industry works day in and day out at food safety. You can find out more about ongoing ServSafe training and certification programs here.

The National Restaurant Association continues to engage with local, state, and federal officials to help our employers and employees address this public health emergency.

What is 2019-nCoV Coronavirus?

2019-nCoV (Coronavirus) is virus that causes the COVID-19 respiratory illness. It was first detected in Wuhan, China. According to the Centers for Disease Control and Prevention (CDC), it’s unclear how easily or sustainably this virus is spreading between people. Typically, respiratory viruses are most contagious when an individual is most symptomatic, but there have been reports of the virus spreading when the affected individual does not show any symptoms.

Can the coronavirus be spread through food, including refrigerated or frozen food?

According to the CDC, “Coronaviruses are generally thought to be spread from person-to-person through respiratory droplets. Currently there is no evidence to support transmission of COVID-19 associated with food.”
How are restaurants responding?

The foodservice industry follows strict local public health guidelines. To meet these guidelines, restaurants have safety protocols and best practices in place, including guidance from ServSafe. Owners and operators should contact their state and local health departments for the latest advisories/information about coronavirus in their community. The Association also has a fact sheet in English and Spanish with information specific to the industry.

What can we all do? The CDC suggests that people take the same steps they would to keep from getting the flu: get a flu vaccine, take everyday preventative actions – like washing your hands often – and see a doctor when you are sick. Both the World Health Organization (WHO) and Occupational Safety and Health Administration have issued guidance for preparing a workplace for COVID-19 that include tips for preventing the spread of the virus and steps to reduce workers’ risk of exposure. And the CDC recently issued a strategy for implementing mitigation strategies for communities with local transmission. Where can I find the EPA list of antimicrobial products for use against the novel coronavirus SARS-CoV-2? On March 3, the EPA released a list of registered disinfectant products that have qualified under its emerging viral pathogen program for use again SARS-CoV-2. You can find the list here. Where can I find more information about the Small Business Administration (SBA) disaster assistance loans for impacted businesses? On March 12, the SBA announced that it will work with state governments to provide targeted, low-interest disaster recovery loans to small businesses severely impacted by the outbreak. You can find out more about these loans and how to access them here. What is the impact to the supply chain? It is still unknown if or how the coronavirus will impact the foodservice supply chain. Many organizations and researchers are monitoring developments.

Where can we find resources?

To ensure that the foodservice industry can easily access the latest resources from the best sources, we will continue to update this page as new information develops. Source: The National Restaurant Association.

Some Brands are even Taking Away Tables Just to Ease Contact Concerns

Early day impacts from the coronavirus outbreak are starting to show for restaurant operators. Industry insights platform Black Box Intelligence released Wednesday a special update outlining some of COVID-19’s effect so far. It’s the first of what Black Box said will be weekly snapshots monitoring the situation. The next is planned for March 17. Here are some key insights: In the market where the first major outbreak was reported (Seattle), restaurant sales dropped 10 percent during the first week. However, the figure only factors in a day or two of heightened public awareness. Black Box said real impact is expected to be north of 20 percent in lost restaurant sales after one full week. Who’s getting hit the hardest? To date, it’s been full-service restaurants in Washington. Upscale concepts even more so. This isn’t overly surprisingly as many restaurants have already reported a downturn in foot traffic. Hotel restaurants and catering companies are being hammered, according to Eater. Restaurateur Tom Colicchio told the publication his company’s revenue is down as much as 70 percent between event cancellations and slow hotel business. Nonprofit the NYC Hospitality Alliance added there’s been “a big drop” in business and private event cancellations. Also in the article, Michael Sinensky, founder of hospitality group Simple Venue, said his restaurants, which rely heavily on traffic from tourists and corporate lunches, have seen sales fall as much as 25 percent.

One unique coronavirus-related issue with sit-down brands is visit duration. Customers today are more conscious of staying out for extended periods of time. So sit-down brands are seeing guests dine for shorter stretches. It’s also boosting dine-in and delivery, with aggregators, like Postmates, rolling out contactless options. Black Box’s data shows restaurant spending shifting away from full-service units to quick-service brands, at least initially. To the earlier point, there has been an increase in to-go sales in the first market affected. Average to-go sales by restaurant locations jumped 10.5 percent in Seattle during the week ending March 1. Black Box said these shifts appear to indicate that, as concerns for coronavirus continue to rise, guests will likely favor quicker or off-premises dining experiences versus extended sit-down meals where they interact with servers and sit among other guests. Michelin-starred Plumed Horse, per SFGATE, dropped 60 percent of its tables to give diners more space. The venue, where diners average two-and-half-hour experiences, cut back from 36 tables to 15, which ensures a minimum distance of at least 6 feet between parties. Italy has instructed restaurants to keep patrons at least 3 feet apart. This concern could be especially pronounced in crowded urban restaurants and food halls in the coming weeks. Giving guests some space might be a good strategy, despite the hit in sales. In Seattle, restaurant spending from guests 65 years and old fell “very significantly,” Black Box said, compared with their spending in the rest of the country during the week. Given where the coronavirus is making the most-severe impact this isn’t likely to change anytime soon. Building on the consumer preference shift resulting from coronavirus concerns, Black Box data revealed that online grocery and meal kits saw strong year-over-year growth in spending at the end of February. It could signal an upcoming trend, the company said, as consumers move more of their share-of-stomach spending toward options that allow them to avoid contact with other people, while also giving them more control over food preparation and hygiene.

What’s also worth taking into consideration is how many people are being mandated by employers to stay at home. And simply those who don’t want to brave the crowds. Meal kits and online grocers combine two rising behaviors in light of the outbreak—the ability to get food delivered; and actually cooking meals and not worrying about potentially infected restaurant workers handling the preparation. Black Box said restaurant sentiment online is starting to show heightened attention by guests to coronavirus related to food safety and cleanliness, as well as more concepts paying attention to signs of sickness among staff members. Starbucks and McDonald’s are among the brands ramping up cleanliness policies. Starbucks, according to a memo reviewed by The Wall Street Journal, told employees to clean cafes and bathrooms more often, and to regularly wash their hands. The chain said its more intensive cleaning regimen should take roughly 30 minutes per day and be performed during peak times. It recommended managers add up to 1 percent of their planned employee hours to shoulder the work. Starbucks added employees should stay home if they’re sick, keep their fingernails short, and limit the amount of jewelry they wear. The java giant, which offers paid sick leave for workers and has restricted all business-related travel through March 31, is also no longer allowing customers to bring in their own cups for refills. If they do so, Starbucks will give them a 10-cent discount as a courtesy, but still serve the beverage in a new cup. McDonald’s advised its U.S. operators to sanitize door handles, order kiosks, counters, tables, and restrooms more frequently.

Additionally, it recommended restaurants provide hand sanitizer to customers and workers in lobbies and behind the front counter. McDonald’s created an internal group in January to assess the daily impact of coronavirus on its global operations. It said Tuesday that it will pay hourly employees at U.S. company-owned units who have to quarantine for 14 days. “Initial areas of concern for restaurant sales decline due to the outbreak include cities and states with rapidly number of confirmed coronavirus cases, markets that are popular destinations for international travelers, markets that are hosts to large events such as conferences and trade shows,” Black Box added in its special update. The company noted that it’s still hard to predict what the pattern and speed of expansion of coronavirus will look like in the U.S. Also, what measures will need to be taken to slow its rate of spreading. But despite those uncertainties, it’s clear multiple factors will have deep implications on restaurant performance throughout 2020. From a national perspective, Black Box said, favorable winter weather will likely mask some of the negative effect in year-over-year sales growing in coming weeks. What is expected, though, are sharp drops in restaurant sales specific to those markets in which major outbreaks occurred by the first week of March. San Francisco is one area where the downturn could flash, Black Box said, particularly in terms of lost sales for full-service restaurants. For those brands strongly positioned in off-premises offerings, it’s probable to-go, delivery, and drive thru will witness an uptick. In cities where major events are being cancelled (Austin, Texas, for SXSW, for example), expect a sizable drop in comps and traffic as well. “At the national level it will probably take a few weeks before there is a meaningful erosion in restaurant sales, but that could change rapidly if panic accelerates and consumer confidence drops quickly,” Black Box said. The world’s move toward large-scale containment, including shutdowns and restrictions on gatherings and movement, has sent restaurant stocks reeling, financial search engine Sentieo said. The industry has seen double-digit declines in recent days, with brands like Darden, Texas Roadhouse, Cracker Barrel, Bloomin’ Brands, BJ’s, Shake Shack, Cheesecake Factory, Brinker International, Dine Brands, Jack in the Box, Denny’s, Carrols Restaurant Group, and Noodles & Company all dipping between 10–20 percent. Dave & Buster’s, Red Robin, and McDonald’s franchisee Arcos Dorados have plummeted more than 20 percent. Also to track, Aramark and Sysco sank double-digits, too. As did Grub Hub. The reason for this might be more notable than the expected market volatility itself. As Sentieo pointed out, restaurants, like the hard-hit travel industry, are consumer discretionary stocks. They compete with food at home. Movement restrictions in the near-term could result not just in reduced business, but zero business for some. Additionally, restaurants are broadly low-margin businesses. Meaning a small drop in revenue hurts the bottom line disproportionately to other sectors. Just look at the impact inclement weather typically has on restaurant performance. Or hurricanes. Sentieo added that, even if locations stay open, supply chain disruptions could result in inventory running out in a short time, which would also lead to no sales.  Nick Mazing, director of research at financial data firm Sentieo, told The Wall Street Journal, “This is a bona fide force majeure, and franchisors should be communicating plans to relieve the pressure from franchisees over the next two to three months.” His suggestions: delaying required spending, reductions in royalty fees owed to the parent company or menu or store-hour modifications based on local conditions.

Regardless of where you start looking, however, the global slowdown in economic activity, coupled with the possibility of the coronavirus outbreak directly hurting restaurants on a wide scale, will undeniably inject strong concerns into an industry that was already grappling with declining guest counts (traffic dropped 3.1 percent industrywide in 2019, year-over-year). “In this new landscape, flat same-store sales for the year may be the new best-case scenario and declining sales a likely outcome,” Black Box said. Source: Fsrmagazine.com.

McDonald’s Cancels in-Person Convention for Worldwide Franchisees Due to Coronavirus

McDonald’s has canceled its in-person biennial convention for its worldwide franchisees due to the coronavirus outbreak. The four-day event, scheduled for April, was supposed to take place in Orlando, Florida. It will now occur virtually. CFO Kevin Ozan told analysts on the earnings call in January that the convention typically costs between $25 million to $30 million. It is unclear how much McDonald’s might save by canceling the in-person convention. In 2019, the company’s sales surpassed $100 billion. CEO Chris Kempczinski asked managing directors and franchisee leadership for their opinions on the matter last week. “Based on their feedback, extensive global travel restrictions, input from the World Health Organization and other local and global health ministries, and our assessment of the situation, I’ve made the difficult but I think right decision to cancel our in-person Worldwide Convention in Orlando in favor of a digital Worldwide Convention,” Kempczinski wrote in a memo to employees. Other companies, including Starbucks, Trget and Google, have made the decision to cancel conferences and investor events as the number of U.S. COVID-19 cases rises. The slowdown in lucrative business travel is hurting the airline and hotel industry. Airlines have been racing to cut costs and cancel flights. Source: CNBC.

Shake Shack, Starbucks, Chuck E. Cheese also Send Letters about How the Companies are Responding to COVID-19

Leaders at restaurant chains began reaching out to customers via email about the coronavirus, providing information on how their companies are responding to the pandemic. Every brand emphasized heightened cleaning and hygiene standards. At McDonald’s, that includes “enhancing our McDelivery procedures to ensure order packaging remains safe” before it’s filled, according to a letter sent to customers from McDonald’s USA President Joe Erlinger. At Chick-fil-A, according to a letter from Presdent TimTassopoulos, cleaning and disinfecting procedures have been “heightened” and franchise restaurants have been given recommended procedures to follow if their restaurant or community is impacted by coronavirus. “From food safety to health and hygiene to cleaning and sanitation, we have allocated an abundance of resources into building chainwide guidelines that go above and beyond FDA requirements,” Tassopoulos said in the letter. As NRN previously reported, Starbucks CEO Kevin Johnson clarified precautionary poilicies with customers, indicating that stores could begin limiting seating or going to drive-thru only. Shake Shack CEO Randy Garutti sent an email outlining extra measures the company is taking. The chain is providing sanitizing wipes and hand sanitizer stations in its stores, and all condiments and utensils will be handed out by team members. The company also introduced new fully sealed bags for mobile, to-go and delivery orders. Like Johnson, Garutti hinted at other changes that could come if the coronavirus situation gets worse. “As this is a fluid situation, you may see certain Shacks adjusting hours or modifying our operations,” he wrote. “There may even be moments where we temporarily choose to close a Shack if we feel it’s in the interest of the safety of our team and community.” A letter from David McKillips, CEO of CEC Entertainment, parent to Chuck E. Cheese, indicated that that brand is also providing hand sanitizer stations at entrances. Additionally, the company is refunding deposits for anyone who wants to cancel an event booked through March 31. Emails also came from Kim Lopdrup, CEO of Red Lobster, and Brett Schulman, CEO of Zoës Kitchen, outlining precautionary measures being taken at those restaurants and encouraging consumers to order delivery if they prefer to, or cannot, leave their homes. These communication efforts come on the heels of restaurants already feeling negative economic impacts of coronavirus. Restaurants in Seattle, a coronavirus hotbed, have sees sales’ declines of 20%, according to Black Box Financial Intelligence. The hospitality analytics company expects that percentage to increase in the coming weeks. The top 10 publicly traded restaurant companies also all saw declines, though some more dramatic than others. Those most hurt with falling stock prices were in the full-service and casual-dining sectors. Source: NRN.

Starbucks CEO Kevin Johnson Sent a letter to Customers about the Company’s Preparations

During COVID-19 Pandemic Following an announcement that the company would start expanding catastrophy pay for employees affected by coronavirus, Starbucks CEO Kevin Johnson sent a letter to customers on Thursday detailing the various precautions the company is taking to navigate the spread of COVID-19. Johnson clarified that precautionary policies will be enacted on a “store-by-store and community-by-community basis,” and could include limited seating in an effort to increase “social distancing,” mobile order-only scenarios for pickup or delivery, or closing the in-store experience and only keeping the drive-thru open. Johnson clarified that complete store closures will only happen “as a last resort” and that “store disruption” will only be temporary as the company navigates the growing health situation. “At Starbucks, we believe it is our role and responsibility during this time to prioritize two things: the health and well-being of our customers and partners while also playing a constructive role in supporting local health officials and government leaders as they work to contain the virus,” Johnson said in the letter to customers. Starbucks has been keeping customers and employees up to date as the coronavirus situation worsens. Earlier this week, the company announced the first temporary closure and quanratine of a store after an employee was diagnosed with COVID-19. Last week, the company announced that it would be pausing its “for here” personal cup program but still offer the discount. Source: NRN.

Dunkin Brands Group and Domino’s Pizza, however, See Better Results

With markets roiled once again over the coronavirus pandemic, public restaurant companies saw their share prices continue to slide. At midday, the Dow 30 was down more than 9%, the Nasdaq down more than 8% and the S&P 500 — which triggered a technical halt in trading earlier Thursday, following another one Monday — was down more than 8%. In comparing closing prices from Wed., March 4, to Wed., March 11, the biggest declines among the Top 10 publicly traded restaurant companies were those in the full-service and casual-dining sector. Glendale, Calif.-based Dine Brands Global Inc., owner of the casual-dining Applebee’s Neighborhood Grill & Bar and family-dining IHOP brands, posted a 43.1% decline in market price, sliding from $90.18 on March 4 to $51.34 on March 11. Orlando, Fla.-based Darden Restaurants Inc., owner of the casual-dining Olive Garden and LongHorn Steakhouse brands among others, saw its stock price decline 26.1% in that week period, which was marked by escalating news of more coronavirus, or COVID-19, cases in the United States and even larger outbreaks abroad. Amid the coronavirus stock carnage, investors showed relative faith in brands like Dunkin Brands Group Inc. and Domino’s Pizza Inc., a player that has long had its own in-house delivery system in place. Dunkin’s stock price only slipped 7.9% in the weeklong period, and Domino’s Pizza was relatively unscathed with a 2.7% decline. John Gordon, principal at San Diego, Calif.-based Pacific Management Consulting Group, noted that about 65% of stock trades are run by computer algorithms or programs. “What I see here is some human intervention on restaurant trades so that that brands without drive-thrus [Dine Brands and Darden] must have a longer in-house interaction and might be thus perceived by guests as ‘more risky,’” Gordon said in an email. “This despite the fact that DRI management and trends are stellar, as you know. Gordon said the pizza and coffee segments represent “faster and on the go” transactions. He also noted that Dunkin does not have the larger scale exposure to the China market, where the coronavirus was first diagnosed in Wuhan, that Starbucks has with its China stores. “The other QSR majors clumped around -10 to -14 make sense given the overall skew to date,” Gordon added. “Given the pull back of meetings and commercial/social activity, we will be down for a while, unfortunately.” Other analysts are echoing that sentiment. “With markets now beginning to price in the palpable anxiety of a looming recession, dislocations for some equities are approaching the limits of, and in some cases have exceeded, what is reasonable,” Jefferies Equities Research said in a note earlier this week. Also factoring into the stock sell-off was the decision by Saudi Arabia to lift production limits on crude oil in a battle for market share with Russia, which sent the price per barrel plummeting and put U.S. shale-oil producers are risk. “While the currently unquantifiable impact from COVID-19 already had investors on edge,” Jefferies said, “the announcement of a full-blown crude price war has led to a dramatic risk-off shift.” – Source: NRN.

NYC’s Palm Steakhouse Company Sold for $45M After Tumultuous Family Drama

After a rocky few years involving a multimillion-dollar family Lawsuit and a family bankruptcy, storied steakhouse chain the Palm is no longer in the hands of the family who launched it in New York City 93 years ago. Massive Houston-based Landry’s — billionaire Tilman Fertitta’s company behind restaurants ranging from Morton’s the Steakhouse to Rainforest Cafe — has purchased the Palm in a $45 million deal, according to a spokesperson. The Ganzi and Bozzi families started looking into selling the caricature-filled steakhouse in December. The company had filed for bankruptcy in March, following a lawsuit between family members that resulted in a $120 million payout to one side. By the end of February, Landry’s was the only bidder remaining in an auction to acquire the Palm, which has more than 20 locations from Miami and Nashville to Las Vegas and Los Angeles. There are still NYC locations in Midtown and Tribeca, as well as at JFK airport. As part of the deal, Landry’s also got Huntting Inn, a historic East Hampton hotel. The Palm Too, which had been open for nearly 47 years in Midtown East, closed just this week. Founders Pio Bozzi and John Ganzi opened the Palm in Midtown in 1926, and over the years, the restaurant became known for consistent food, warm service, and walls filled with caricatures of both famous clientele and regulars. In the 1970s, Bozzi and Ganzi’s grandchildren expanded the brand expanded nationally. But the original location closed in 2015, and the ownership of the brand split, with Ganzi’s grandchildren Garry Ganzi and sister Claire Breen as part owners of the original Palm and their cousin Walter Ganzi Jr. and former partner Bruce Bozzi Sr. overseeing the expansion. There was disagreement over how profits were being shared, and in 2017, the family became embroiled in a lawsuit. A judge eventually ruled in Ganzi and Breen’s favor, asking that the chain pay them $120 million. Landry’s is based in Houston and has a global restaurant footprint. It owns restaurants such as Del Frisco’s Grille and Morton’s the Steakhouse, plus well-known casual spots like Bubba Gump Shrimp Co. In New York, it runs BR Guest Restaurants Dos Caminos and Bill’s Bar & Burger. Despite the sale, Ganzi Jr. and Bozzi Sr. will still be involved as “ambassadors for the brand,” according to a statement from Landry’s. “Bruce and Wally will forever be a part of the Palm family,” the statement says. Source: The Eatery/New York.

Grubhub to Suspend Fees for Independent Restaurants in Light of Coronavirus Pandemic

Grubhub on Friday announced it is temporarily suspending collection of up to $100 million in commission payments from impacted independent restaurants nationwide. The suspension is in response to the impact of COVID-19 on restaurants. Statistics vary, but some estimate that dine-in traffic is expected to slow up to 75% over the next few weeks. “Independent restaurants are the lifeblood of our cities and feed our communities,” said Matt Maloney, Grubhub founder and CEO in a news release. “They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business — so this was an easy decision for us to make.” Maloney made the announcement in Chicago along with the city’s Mayor Lori E. Lightfoot. Mayors of New York City, San Francisco, Boston and Portland, Ore. also worked with the third-party marketplace on the commission suspension, according to Grubhub. “The city of Chicago is deeply concerned about the risk COVID-19 is placing on the health of our residents and communities, as well as the impact it’s having on our working families and neighborhood economies and restaurants,” said Lightfoot. “That is why we applaud corporate leaders like Grubhub who are stepping up with practical measures to support small businesses and their employees. Now more than ever, we must work together to ensure hardworking Chicagoans receive the support they need to thrive while also staying safe, secure, and healthy,” she said. Grubhub and other third-party marketplaces such as DoorDash have come under fire for the fees they charge to restaurants. Sometimes these fees are as high as 30%. The New York City council, among other jurisdictions, has even tried to curtail these fees. In late February, New York City Councilman Mark Gjonaj, proposed a 10% cap on fees for third-party marketplaces. But he commended Friday’s announcement from Grubhub. “I applaud Grubhub for taking the temporary action of suspending the marketplace commissions paid by its restaurant partners as the hospitality sector seeks to cope with the devastating and door closing impact of the coronavirus pandemic,” he said in a statement. “With that said, my office and I have already begun conversations with other third-party food delivery providers such as DoorDash, Postmates and Uber to ask them to reduce their fees and implement other relief measures as restaurants cope with an unprecedented loss in business. Based off of these initial conversations, I feel encouraged that they will do the right thing and put people over profits during this moment of crisis.” In the same announcement, Grubhub also noted the creation of a fund to support restaurants and drivers impacted by the COVID-19 health crisis. Dubbed Donate the Change, the program will allow customers to round up the change from their orders and donate it to the Grubhub Community Relief Fund. “Banding together during hard times, putting people over profit, and supporting our local businesses is a model we should all follow, and I thank Grubhub for leading the way,” said New York City Mayor Bill de Blasio. Source: NRN.

FDA Campaign Alerts Consumers to Changes in Nutrition Facts Label

The US Food and Drug Administration has launched an initiative designed to help consumers use the new Nutrition Facts Label appearing on packaged foods. The campaign called “What’s In It For You?” includes videos and educational materials. “This campaign highlights that the new Nutrition Facts Label has been designed to assist consumers in making better informed food choices,” said Susan Mayne, PhD, director of the FDA’s Center for Food Safety and Applied Nutrition. “If a consumer wants to know how many calories there are in a serving, that information is now highlighted. If a consumer wants to choose a food with more vitamin D or less added sugars, that information is now right there on the label.” The new Nutrition Facts Label features bold listings for serving sizes and calorie counts. Other changes are required listings for added sugars, vitamin D and potassium. A dual column version of the label is required for food packages that contain two to three servings that may be reasonably consumed at one time. One column lists the nutritional facts related to a single serving, and the other column lists nutritional facts for the contents of the entire package. Food manufacturers with $10 million or more had until this January to begin using the new Nutrition Facts Label. Manufacturers with less than $10 million have until Jan. 1, 2021. Source: US Food and Drug Administration.

Chick-fil-A Will Start Selling Bottles of its Signature Sauce

Starting in April, the 16-ounce bottles will be sold in Florida at Publix, Target, Walmart and Winn-Dixie stores for around $3.49. It’s the first time that Chick-fil-A will sell its products in retail stores. The move is part of Chick-fil-A’s broader strategy to reach people outside of the restaurant. “Increasingly, our customers are searching for ways to enjoy our brand at home,” Michael Patrick, principal program lead for Chick-fil-A’s Beyond the Restaurant team, told CNN Business in an email. Recently, fast food chains have struggled with sluggish traffic in stores. So they’re looking for new ways to reach people at home and at work, often by partnering with delivery services and encouraging customers to use their apps. Chick-fil-A has experimented with meal kits that customers could pick up in stores and locations with no dining rooms, designed to exclusively fill delivery and catering orders. The company has been exploring ways to break into retail for a while, said Patrick. “We’re seeing a blurring of lines between all food channels,” he noted. Other restaurant chains — like The Cheesecake Factory, TGI Fridays, IHOP and others — sell versions of their sauces, syrups and products in retail. “We are looking to learn more about the retail channel,” Patrick added. There’s reason to believe that customers will buy full bottles of the sauce. Thrillist named Chick-fil-A’s signature sauce, a blend of honey mustard and barbecue sauces, the second-best fast food sauce in the country. Food blogs have recipes for copycat versions of the sauce, and Walmart sells a “restaurant style” chicken dipping sauce which some have called a knockoff version of the product. “Our customers love our sauces,” said Patrick. “Chick-fil-A Sauce and Polynesian Sauce are our two most popular sauces, which is why these flavors are leading the way.” For now, the pilot program is limited to Florida, but Chick-fil-A may one day roll the bottled sauces out nationally. In addition to selling the bottles in big box stores in Florida, some Florida locations of Chick-fil-A will also offer 8-ounce bottles of its signature, Polynesian, Barbeque, Honey Mustard and Garden Herb Ranch sauces with catering orders and for purchase staring this month. All proceeds from the bottle sales will go to Chick-fil-A’s scholarship fund for employees, even if the pilot expands beyond Florida. Source: CNN Business.

Granite City Food & Brewery’s New Owner Plans to Bring Back Founder

The parent of the Famous Dave’s barbecue chain said it intends to bring back the founder of its new sister concept, Granite City Food & Brewery, to help in rejuvenating the brand. BBQ Holdings, whose holdings also include Real Famous BBQ and Clark Crew BBQ, completed the acquisition of 18-unit Granite City yesterday for about $3.7 million. It said this morning that Granite City founder Steve Wagenheim would be brought back into the operation “in an effort to operate the stores with a guest-first attitude.” The terms of the arrangement were not disclosed. A pillar of BBQ Holdings’ operational strategy has been to keep a brand connected to its founder. The company’s core business, Famous Dave’s, recently introduced a fried chicken sandwich named after the mother of founder Dave Anderson. Iris’ Comeback Chicken Sandwich was inspired by the fried chicken that Iris Anderson made for her son Dave and barbecue-loving husband, Jimmie. Clark Crew BBQ, another new addition to BBQ’s fold, was developed as showcase for pit master Travis Clark, a star of the competitive barbecue circuit. The company has said it will maintain Clark’s day-to-day connection with Clark Crew, which currently consists of a lone unit in Oklahoma. Other concepts affiliated with a barbecue star will likely follow, the company said when the prototype opened in December. In announcing the completion of the Granite City purchase, BBQ Holdings said 18 restaurants were included in the deal. The operation was purchased after Granite City filed for Chapter 11 bankruptcy protection. At the time, Granite City extended to 25 locations. Granite City also had a sister chain, four-unit Cadillac Ranch. Tilman Fertitta’s Laundry’s restaurant empire acquired three of the stores for $7.5 million as part of the bankrupt company’s breakup and liquidation. “As an originator of the craft beer trend, with a strong and consistent product across all of its locations, Granite City Food & Brewery is a fantastic addition to the BBQ Holdings portfolio,” BBQ CEO Jeff Crivello said in a statement. “We intend to leverage and utilize much of our infrastructure in an effort to absorb this iconic brand to ensure an accretive transaction.” Crivello said the acquisition of Granite City should add $2.2 million to EBITDA for the three quarters that remain in BBQ’s fiscal year. Wagenheim spent 14 years with Granite City, parlaying his single store into a 50-unit operation within that time. “Wagenheim’s vision has always been to create an exceptional guest experience by delivering outstanding hospitality and distinctive value to all guests,” BBQ said in disclosing its plan to re-involve the founder. Source: Restaurant Business.

Subway Names Mike Kappitt Chief Operating and Insights Officer

Subway named former Carrabba’s Italian Grill President Mike Kappitt to be the company’s new chief operating and insights officer as the brand continues to upgrade its executive team. In the newly created role, Kappitt will oversee digital, including third-party delivery and catering. He will also oversee Subway’s analytics and insights functions. Kappitt has more than 20 years of experience in restaurants and franchising and has worked with Outback Steakhouse, Burger King, Alamo and National Car Rental. At Carrabba’s, he was responsible for the domestic operation and development. Before that, he was global chief marketing officer for Carrabba’s and Outback parent company Bloomin’ Brands. “Mike brings an extraordinary track record for growing global brands through insights-driven marketing,” Subway CEO John Chidsey said in a statement. Subway is intent on improving its digital sales, which lag badly behind many of its fast-food rivals. This month, the sandwich giant offered a buy one, get one Footlong sub deal in a bid to generate stronger sales through its online and mobile app. It also wants to increase delivery orders. The company, which has seen more than 2,000 locations close over the past two years, has cut staff at its headquarters, hired a new CEO in Chidsey and brought in several new top executives to lead its turnaround efforts. – Source: Restaurant Business.

Union Square Hospitality Group to Cover Costs of Coronavirus Tests, Treatment for Workers

Union Square Hospitality Group said its sick leave policy would be broadened during the coronavirus crisis to ensure workers can take time off if they’re sick. The group closed two more restaurants temporarily on Tuesday — the signature Union Square Café and adjoining Daily Provisions — to sanitize out of an abundance of caution after a worker felt ill. The group’s founder Denny Meyer posted a video calling for workers to take care of themselves and stay home if they are sick. “There is nothing more important than your health,” said Meyer in the four-minute video. “If you feel anything out of the ordinary with your health, don’t be a hero. Stay home. If you feel anything the minute you get to work that’s out of the ordinary for you, don’t be a hero. Tell your supervisor immediately and go home.” On Monday, the New York City-based multiconcept group also closed The Modern, a fine-dining restaurant and bar in the Museum of Modern Art, for sanitation after a guest later tested positive for COVID-19 — even though the guest had dined at the restaurant before his potential exposure to the virus. The Modern reopened on Tuesday. In the case of Union Square Café and Daily Provisions, a deep-cleaning was scheduled after a worker fell ill and sought medical treatment. The worker’s doctors, however, have since ruled out COVID-19, a company spokesperson said. The company reportedly opted to sanitize anyway. “We are confident that there are no confirmed cases of coronavirus among our employees or guests and we’ll be reopening for business as usual tomorrow,” the company said in a statement. USHG already offered sick leave, but, effective immediately, the company will cover expenses for diagnosis and treatment of coronavirus, even if the worker does not have health insurance, as well as paid time off for testing and treatment for as long as their doctor indicates is needed for a full recovery, the statement said. In the video, Meyer also compared the crisis to tough times in the past, including 9/11, the Gulf War and the Great Recession, offering reassurance that the company will survive. “We have the means to weather this,” he said. “If we use our heads and our hearts, and take care of each other, we’re going to end up in a better spot.” Source: Restaurant Hospitality.

22 CEOs, CMOs, COOs and other C-suite positions that changed in the restaurant industry in February

Pizza Hut, Taco Bell, Starbucks, Denny’s and more chains name new executives while others move on from their positions during the shortest month of the year January was a busy month for executives across foodservice brands, and February showed no signs of slowing down either. There were some major players moving between companies or leaving their posts altogether. Some companies shuffled several top executives within the span of a few days. Frances Allen left her post as CEO of Boston Market abruptly at the beginning of the month and was announced as the new CEO of Checkers and Rally’s a week later. Bloomin’ Brands, parent to Outback Steakhouse, Bonefish Grill and Carrabba’s Italian Grill, announced a flurry of executive changes starting with the biggest, executive chairman Elizabeth Smith’s departure from the brand. Showing a sign of the digital times, the newly formed ghost kitchen company C3 named its first ever chief operating officer in former Smashburger executive Bradford Reynolds. Restaurant companies such as Pizza Hut, KFC, Taco Bell, Starbucks, Denny’s, Whataburger, Newk’s Eatery and more named new executives in February. Find out who they are. Source: NRN.

Darden Now Offering Paid Sick Leave for Employees

Darden Restaurants, parent of Olive Garden, announced that it now provides paid sick leave to hourly employees amid growing concerns with the coronavirus. The brand said the new benefit has been discussed for a while—prior to the outbreak—but its rollout was accelerated because of COVID-19. Current workers will gain one hour of paid sick leave for every 30 hours worked, starting with the past 26 weeks. New employees can build sick leave as soon as they start, but cannot use the benefit until after 90 days of employment. The pay rate is based on the employee’s 13-week average. In addition to Olive Garden, Darden owns LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V’s. The company employs approximately 185,000 in more than 1,700 restaurants. According to data, only 25 percent of workers in the industry have paid sick leave. “We are fortunate to have outstanding team members working in our restaurants committed to bringing our brands to life and creating lasting memories for our guests,” CEO Gene Lee said in a statement. “As we continue to make investments in our employees, we strengthen our greatest competitive edge because when our team members win, our guests win.” Darden is scheduled to report its third-quarter performance on March 19. In Q2, Olive Garden comp sales rose 1.5 percent, its 21^st consecutive quarterof growth. Same-store sales at LongHorn grew 6.7 percent—its 27th straight period in the black—and traffic was up 3.2 percent. Darden’s total sales rose 4.2 percent to $2.06 billion, driven by the addition of 37 net new restaurants and a same-store sales increase of 2 percent. Net income stood at $25.4 million, or 21 cents per share. Seasons 52’s comps dipped 3.5 percent; Bahama Breeze was down 3.4 percent; Cheddar’s Scratch Kitchen fell 1.2 percent; The Capital Grille gained 1.8 percent; Eddie V’s 0.5 percent; and the Yard House upped 0.7 percent. Source: fsrmagazine.

Buffalo Wild Wings’ Largest Franchisee Sells 22 Locations

Investment firm ICV Partners announced Thursday that it’s completed its previously announced acquisition of Diversified Restaurant Holdings, Inc.—a large Buffalo Wild Wings franchisee with 64 locations across five states. As part of the deal, ICV dealt 22 of those units, in Florida and Massachusetts, to Buffalo Wild Wings’ parent company, Inspire Brands. Also, JK&T, a Buffalo Wild Wings franchisee purchased earlier by ICV, executed a 15-store area development deal with Inspire to build new restaurants in “agreed upon locations.” ICV said it will combine the remaining DRH and JK&T Wings sports bars, which it acquired in October 2019. The result will be the largest Buffalo Wild Wings franchisee in the fleet at more than 80 venues. When ICV bought JK&T Wings, the company owned 42 locations, primarily in Michigan, with additional stores in Louisiana and Massachusetts. ICV took control of DRH in an all-cash transaction valued at about $130 million, including the assumption outstanding indebtedness and transaction expenses. DRH’s common stockholders received $1.05 per share in cash. DRH was taken off NASDAQ with the move. Its CEO, Michael Ansley, resigned when the deal was made. “We are very pleased to complete this transaction and are enthusiastic to deploy our expertise to help grow the Buffalo Wild Wings brand,” said Ira Moreland, managing director of ICV, in a statement. “DRH is a strong platform and the company has solidified its position in a number of important markets. In combination with our earlier investment in JK&T Wings, we now operate over 80 BWW restaurants across five states and look forward to working with the company’s management team to further build this strong platform in new geographies. Buffalo Wild Wings is a very well-known and admired brand and we see tremendous opportunities ahead that will continue to enhance their operations as we embark on this next stage of growth.” Added Kent Ward, CEO of JK&T: “This new partnership with ICV is an exciting move, as they have extensive experience in building and growing the companies in which they invest. ICV’s ownership brings additional resources and skills that will enable us to grow the BWW brand and help enhance the customer experience.” Roark Capital-backed Inspire also directs Jimmy John’s, Arby’s, Sonic Drive-In, and fast casual Rusty Taco. When Inspire acquired Jimmy John’s in September, the company had 11,200-plus units and $14 billion in annual system sales, making it the country’s fourth-largest restaurant company. Inspire was formed in February 2018 following Arby’s $2.9 billion blockbuster for Buffalo Wild Wings. Source: fsrmagazine.

Pizza Inn Introduces Multi-Unit Incentive Program to Fuel Growth

Amid strong interest from existing franchisees and robust same-store sales, Pizza Inn announced the roll out of a major multi-unit incentive program designed to fuel additional buffet growth for the brand. “Pizza Inn continues to offer strong unit economics and new market development opportunities,” says Brandon Solano, CEO of RAVE Restaurant Group. “Our new multi-unit incentive program will give both existing and potential franchisees added motivation to expand their portfolios with Pizza Inn and grow the brand in their communities.” The new multi-unit incentive program is modeled to deliver incentives in excess of $1 million for new and existing franchisees developing at least five locations. The revenue-based incentives come from a combination of reduced royalties and initial franchise fees. Incentives are also available for development of at least one location. Interested franchisees should contact Brett Heinen, Vice President of Brand Development, at 469- 384-5108 or visit pizzainn.com/franchise. Pizza Inn is known nationwide for its exceptional pizza and friendly service. The popular pizza chain’s original pizzas blend everyone’s favorite ingredients to create distinctively unforgettable flavor combinations with homemade pizza crust that is made fresh daily. Source: fsrmagazine.

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