Italy’s Ali Group makes $3.3B cash bid for US rival Welbilt

Italian foodservice equipment maker Ali Group has made a $3.3 billion cash offer for U.S. rival Welbilt, a source close to the matter said on Friday, surpassing an offer made for the company last month. The source added that Ali Group is offering $23 for each Welbilt share. The news was first reported by the Wall Street Journal. Welbilt shares surged 24% to $24.68 on the New York Stock Exchange after the move by privately owned Ali Group. The bid trumps a $2.9 billion all-stock offer for Welbilt put forward last month by rival Middleby Corp. Activist investor Carl Icahn, Welbilt’s largest shareholder with an 8.4% stake, had agreed to that deal. Welbilt did not immediately respond to a Reuters request for comment. Based near Milan, Ali Group was founded in the 1960s by the late Luciano Berti. His son Filippo Berti now heads the company. With 80 brands, it operates worldwide and supplies foodservice equipment to businesses ranging from hotels to schools and supermarkets. (Reporting by Maria Pia Quaglia and Sanjana Shivdas; editing by Giselda Vagnoni and Keith Weir). – Source: Reuters / Wall Street Journal.

The quick-service restaurant brand is restricting sauces to one per item at some locations . . . .

Chick-fil-A is the Latest to Face Supply Chain Issues as it Limits its Famous Sauces

Chick-fil-A is the latest restaurant to face supply chain shortages over a product: its sauces. The quick-service chicken chain’s famous sauces are now being limited to one per order, the company said Wednesday. A “shortage of select items” at the Atlanta-based chain has led to this new development, according to the chain. “Due to industry-wide supply chain shortages, some items, like sauces, may be unavailable. We apologize in advance for any inconvenience,” read a statement on the company website. There was no timeline for when Chick-fil-A expected the shortage to be resolved across its over 2,000 U.S. restaurants, nor information on what lead to the shortage. According to local site WTRF, one Chick-fil-A location sent customers an e-mail stating the following: “Sauces at Chick-fil-A will be limited to one sauce per entree, two sauces per meal, and three sauces per 30-count nuggets.” That was not a company-wide mandate, however as the e-mail was distributed locally to West Virginia residents and not nationally nor is it on the chain’s website. This is the latest in the year-long supply chain issues that have plagued the restaurant industry, with shortages in everything from beef to chicken wings. Such shortages have caused restaurateurs to raise prices, discontinue menu items and find other creative solutions. Ketchup also faced a shortage, though manufacturer Heinz announced a 25% increase in production output recently. Chick-fil-A has not been impacted by the chicken shortage. – Source: NRN.

The National Restaurant Association released guidance for Restaurant Revitalization Fund grant recipients

The ‘Next Steps’ Guide Shows Operators what they Should do if they Receive a Grant, besides Spend it Wisely

The National Restaurant Association has released a guide for restaurants and bars that applied for the Restaurant Revitalization fund, which opened on May 3, including records to maintain and keep track of and learning how to address new funds in tax filings. Keep a copy of all submitted records, including the application itself Keep all financial forms, business records and the application itself on-hand for reference. Don’t throw away records that were not submitted. The SBA will be looking for proof of how long a restaurant has been open for and you’ll want to keep all receipts on hand, even if they were not necessary for your application. These records might include:

• Evidence that supports when the business opened/began making sales.
• How the grant was calculated
• Documentation that proves/asserts that applicant as part of a priority group (if relevant)
• Information regarding affiliated businesses
• Information regarding ownership shares

Make a plan for how the grant money will be spent

The Restaurant Revitalization Fund has specific rules on what the funds can be used for, as detailed here.  You must return the funds if you were considering using the money for something outside of those jurisdictions. Remember that the RRF can only be used to pay off principal and interest payments of debt, and not the entire debt. Payroll expenses can only be paid only if employees earn $100,000 per year.  – Source: NRN.

The 1969-founded brand once numbered more than 800 locations in the U.S . . . .

Nathan’s Plans to Revive Fast-Food Icon Arthur Treacher’s

Having been around for more than a century, Nathan’s Famous is no stranger to operating a legacy brand through the ebbs and flows of fast-food trends. Of late, this has materialized across 168 operating ghost kitchens—a number growing each week, SVP of restaurants James Walker says. It includes Nathan’s as a bolt-on opportunity for independents and small operators to generate and incremental revenue, as well as larger partners, like REEF, Kitopi, Ghost Kitchen Brands, and Franklin Junction. Also, a Wings of New York virtual brand that’s spread to more than two dozen venues and three countries (soon to be five). It just opened its first storefront in late May at Yankee Stadium. But one thing Nathan’s hasn’t tried is adding a standalone brand that doesn’t share architecture with its current portfolio. A concept that competes and lives in a different category. That’s about to change as Nathan’s attempts to revive one of quick service’s most memorable names. The chain told QSR Wednesday it’s ready to relaunch Arthur Treacher’s as a ghost kitchen concept, with plans, ultimately, to open brick-and-mortar stores. “We think it absolutely has huge potential to grow,” Walker says. Arthur Treacher’s and its famed, yellow lantern-shaped sign, was founded in Columbus, Ohio, in 1969 and once numbered as many as 826 locations in the U.S. The brand was developed, in part, by Wendy’s founder Dave Thomas. People often credit Arthur Treacher’s for bringing authentic-style fish and chips to the American mainstream. In the 1960s, quick-service fried fish was offered only in a handful of concepts, as shared in a Smithsonian Magazine article. McDonald’s Filet-O-Fish was the headliner. Yet fish and chips itself remained a United Kingdom draw. Through a company called National Fast Food Corp., Arthur Treacher’s—named after the actor known for his work as Jeeves the butler in Shirley Temple films—arrived on the scene and spread quickly. Treacher was a spokesman and heavily involved, with his face donning doors of locations. In terms of where things went wrong, it’s a bit of a convoluted tale. As Mashed points out, the chain rose to fame by frying fillets of cod, “just like the kind you’d find used in a traditional English fish and chips shop.” Yet this halted when the “Cod Wars” broke out between several European nations. It began with Iceland and the U.K. and eventually waged in three main stanzas, with the final one occurring in 1976 and resulting in “the closure of the Icelandic grounds, effectively ending British long-distance fishing,” according to a post on The National Archives as shared by Mashed. For the U.S., the price of cod “became almost too expensive to import.” Franchisees felt the burn and business slid. In an attempt to rescue operations, frozen fish manufacturer Mrs. Paul’s acquired Arthur Treacher’s in 1979.

The company made a fateful—and now arguably infamous—move when it replaced the brand’s cod fillets with pollock. The decision saved money, but, according to some, deteriorated Arthur Treacher’s core equity and turned off loyal guests. Much of Nathan’s reboot of Arthur Treacher’s, however, will center on the menu. And that includes bringing cod back (where available), like a 4-ounce fried cod sandwich. “To me, the story is the resurgence or revival of a brand people are really passionate about, and we kept the things we believed meant a lot to those passionate consumers over the past 40-plus years,” Walker says. “And what we upgraded is really the things that matter to people today. Value. Quality. Portion. The proteins that they’re eating. So we think it’s a nice combination of historic, storied brand, with a new focus on the food.” Through the years, the company changed hands and eventually was acquired by PAT Franchise Systems, Inc. in 2002 through a private transaction. The intellectual property was sold to NF Treacher’s Corp., an affiliate of Nathan’s Famous Systems, Inc. in 2006, and TRUFOODS, LLC became a co-franchisor in 2007.  For a number of years before the deal, Nathan’s licensed from PAT Franchise Systems, Inc. the right to use Arthur Treacher’s trademarks and signature products for the purpose of co-branding within its own Nathan’s and Miami Subs restaurants. And you continue to see Arthur Treacher’s on the menu of some Nathan’s venues nationwide. Physical stores, however? According to a March article in the Akron Beacon Journal, there are only two freestanding restaurants left. One is in Ohio’s Cuyahoga Falls and the other in Garfield Heights. Two years ago, there were apparently seven—three in New York and four in Ohio. Walker says Arthur Treacher’s still has “huge brand recognition,” online research showed “really high, unaided brand awareness.” Personally, it was Walker’s go-to growing up in Fort Lauderdale, Florida. So there’s an intimate spin in this comeback story. “We’re as excited about this as anything that the team has done in the two-plus years I’ve been part of the team,” says Walker, who joined Nathan’s Subway in May 2019. Arthur Treacher’s return to the restaurant landscape could happen quickly as Nathan’s leverages its aforementioned virtual network out of the gate. “We’re using the same breading that everyone loves. That same hand-batter, crispy golden batter. We’ll have the same hush puppies. But we’re upgrading all of the proteins,” Walker says. “We’re adding more shrimp to the menu. We’re really upscaling the quality, but keeping those same flavors and appearance that people love about the brand.” Walker believes Arthur Treacher’s can capitalize on sizable “unanswered demand for this category,” as well.

Captain D’s closed 2020 with 531 locations. Long John Silver’s has roughly 700. Even if you combine the two, that’s a smaller footprint than Wingstop (1,538) and 12,451 fewer than McDonald’s. Subway has 20,970 more domestic stores. Put plainly, there weren’t a lot of fast-food fried fish players in the 1960s, and there aren’t that many now, relative to the category’s overall boom. “Seafood is typically not something people make at home. It’s something they want to have a restaurant make for them. One of the things we’re super excited about is we don’t think we have a lot of competition in the space,” Walker says. “And we think growth for the brand is going to be very brisk.” Arthur Treacher’s full menu will include Fish n’ Chips Sandwich, Fish n’ Chips Platter, Captain’s Dinner, Shrimp n’ Chips Basket, Chicken Platter, Shrimp & Fish Basket, Boom Boom Shrimp Platter, Shrimp, Bacon, Boom Boom Fries, Nathan’s Famous hot dogs as well as Nathan’s recently launched hand-dipped chicken sandwiches to round out the offering. There will also be new sauces. “Talking to our ghost kitchen partners and operators, they are all excited,” Walker says. “And we think there’s going to be some really brisk growth through the summer months. Because this channel that we’re initially talking about, ghost kitchens, allow that to be the case.” Nathan’s approached Arthur Treacher’s like it did its own menu efforts. The same way the chain upgraded its burgers, cheesesteaks, and introduced chicken thighs, is how it’s tackling the effort. “We’re making sure all of the food is memorable, cleavable, and Instagrammable,” Walker says. “Which is what we do with all of our food in all of our brands. And it’s going to be really cool to see it in a legacy brand like Arthur Treacher’s”. – Source: QSR.

The family-owned Italian beef sandwich concept plans to open its first franchised location next month . . . .

After 40 Years, Chicago’s Buona Beef Gets Ready for the National Stage

The first Buona Beef opened in Chicago 40 years ago, a 1,500-square-foot spot with 36 seats and no drive-thru that was secured when the owners took out a $ 10,000-second mortgage. It took 15 years, but the Italian beef concept opened its second location and then developed a plan to steadily add units. Today, Chicago-based Buona Beef recently launched its 25th store and the family-owned chain is getting ready to explore franchising. “It took us quite some time to get our foundation and get our legs under us,” Joe Buonavolanto Jr., one of the five sons of the restaurant’s founder who run the chain today. “In 1996, we started a growth plan.” One of Buonavolanto’s uncles ran Mr. Beef, another Italian beef operation in Chicago, and he shared the family recipe. “He helped us get started,” Buonavolanto said. “It was kind of a recipe in our family. It was something we were very proud of.” After nearly 40 years of growth, though, the pandemic shook up Buona Beef. “It was a trying time not only for our family but for our staff,” he said. “Twelve to 14 months ago was probably the scariest moment in our 40 years in business. It was something we felt was completely out of our control.” Pre-pandemic, dine-in traffic was 40% of Buona’s business. Now, it’s maybe 20%, he said. So, Buona mobilized its drive-thrus (located at all but the chain’s very first location) and added third-party delivery and curbside pickup. It debuted a new app to drive sales.

Growth was put on hold.

“We took a little bit of a pause, not knowing how things were going to shake out,” Buonavolanto said. And now, Buona is taking tentative steps toward franchising. In June, an express version of the concept with a pared-down menu is slated to open in a new food hall in Denver. “We’re going to test the waters and see how our original Italian beef is received in an entirely new market,” he said. “We wanted to really make sure the model and the business were very well organized and simple to run before we considered franchising.” The franchising process started in 2018 but took a pandemic pause. If the food hall is successful, Buona is hoping to expand in the Denver area. “We thought there was a lot of runways there to open up multiple locations,” he said. Italian beef sandwiches are a regional specialty—sliced beef sandwiches topped with vinegary giardiniera relish and au jus on a soft bun. They’re served at Chicago’s major athletic arenas, places frequented by large numbers of tourists. “You see those visiting teams’ jerseys,” he said. “They’re eating it and they’re enjoying it. We think there are lots of appeals. It will take a little educating the consumer on what it is.” Recently, Buona generated lots of headlines on its home turf for developing a plant-based Italian beef sandwich, complete with a vegetarian version of the brothy au jus the regional dish is known for. “We sold out the first day,” Buonavolanto said. “It was bigger news than we even thought it would be.” The sandwich is partway through a 12-week test run, but he thinks it will make Buona’s permanent menu. “It’s doing very well,” he said. “It’s caught on. It’s really introduced our concept to a different community.” – Source: Restaurant Business.

Ricky Richardson, CEO of Eggs Up Grill, reveals how he finds and keeps employees during a time when brands are struggling to find workers . . . .

5 ways Eggs Up Grill CEO Tackling Labor Shortages

Just as Americans are congregating again and enjoying time with friends and family at their favorite restaurants, the restaurant industry is in the middle of another major roadblock — the labor crisis. Continued concerns about safety, pay, and opportunity, as well as the enhanced federal unemployment payments, create real challenges for everyone in the industry. In the restaurant industry, sustained success has always been reliant on having a team of great people on your side, and 2021 is presenting some unique challenges in making that happen across the Eggs Up Grill system. I wish I could say that we have the silver bullet answer to the current labor challenges. Across my multi-decade career in this terrific industry, there has never been a silver bullet; it has always been a combination of tools, and it starts with having the right culture and environment for people to do great work, as well as a brand promise to our team members that I will share. I also have a strong belief that our industry will thrive again as an employer of more than 13 million people who love to cook for, host, and serve guests in thousands of restaurants across the U.S.

Everything to make you smile

Today’s hiring environment requires smart efforts from the start. Getting someone to show up for a scheduled interview is considered a success. Everyone is inundated with the daily war stories of running an operation that is short-staffed, and many locations even warn guests to expect less.
As simple as it is, what has shown the most promise for Eggs Up Grill has been keeping the brand promise of “everything to make you smile.” This brand promise is central to not only a great guest experience, but also the experience provided to every team member. We do not have a separate promise for our team members, nor do our franchisees. There isn’t a separate script. We treat our team members the same way we treat our guests and give our franchisees the freedom to do so as well. This approach is what makes it critical to hire the right type of individuals to join an existing team. We seek individuals who are naturally positive, energetic, and authentic, as well as those who inherently enjoy being part of a team and thrive in providing service to others. Eggs Up Grill has always put an emphasis on hiring the type of people who are attracted to the brand as guests. Our guests enjoy the friendly, casual nature of our experience and like to see a team that is personable and authentic, with permission to be themselves. It is always a priority to hire for personality and brand fit first, then train the skills needed for the specific role.

Keeping the promise

Brands are scrambling right now, offering incentives and sign-on bonuses to find new people. Eggs Up Grill is no different, but we also remain hyper-focused on keeping our brand promise, which builds rapport during these unique times. One example is the use of stay interviews. It’s an opportunity for a franchisee to sit down with a team member one-on-one and ask them direct questions about their personal experiences with the business. Asking simple but important questions to evaluate whether the position is as initially described, and meeting expectations is an effective practice. While select team members often assume a sit-down means something is wrong, we’ve aimed to change that within our workforce. Stay interviews provide invaluable feedback, and it gives the team members a pep in their step. Most of us have been in situations where it was too late to save a team member who had not been happy for a while. Stay interviews help avoid surprises, retain quality team members, and in the case of a labor shortage, can ensure you retain staff. Also, this practice keeps us on the pulse of our team members’ happiness. The interviews create a personal relationship between the franchisee and team members, which is often considered a unique opportunity for most in the industry. While we try new tactics each day to find and retain team members, it’s likely a matter of time before recruitment begins to be a bit more normal. My advice is to ensure your brand has communicated a clear brand promise and purpose to your restaurant leaders to assist them in their recruitment and retention practices, and that your business lives that promise every day.

Here are the core hiring and retention practices for Eggs Up Grill:

Finding talent

Creative recruiting sources are a key component in a highly competitive industry. Referrals from your current team are always an excellent way to connect with like-minded and friendly folks, and local community organizations may equally provide useful recommendations and leads for talent acquisition. Additionally, Eggs Up Grill leverages digital recruitment for mass outreach and hosts open house events at our restaurants. This blends convenience with the opportunity to walk through the role and the facility, conduct multiple interviews and potentially extend an offer all in the same day. It’s always best for the restaurant owner to lead the onboarding process, welcoming the new team member, sharing personal testimonials and passion for the business, along with a specific emphasis on why the new member’s role is important to the team.

Training

Quality training practices ensure consistency, establish expectations and follow brand guidelines to ensure the team member is competent and equipped to do their new job well and feel confident in their abilities. Providing ongoing feedback generates better communication channels and listening to the new team member about their training and experiences will both advance the relationship and guide best practices, further building the foundation of a long-term work relationship.

Rewarding the team

Making it a point to notice and recognize team members doing the right thing is more important than ever. It is incredibly important to identify and reward people doing the right things for the business. Calling attention to those winning behaviors highlights the small things that add up over time. Do not wait for the milestone achievements. Notice the everyday important things; it all adds up. Finally, creating opportunities for team members to grow professionally is a major incentive. Do more, learn more, both within your restaurant and across the brand. While the industry is going through a very challenging time, our business is incredibly resilient and blessed to have so many great people working together right now. The current circumstances are unique, but the winning plays in the playbook remain the same. – Source: Fast Casual.

Chef Troy Guard sees plenty of runway ahead for Los Chingones, given the popularity of the Mexican cuisine category . . . .

Chef Troy Guard’s Plan to Disrupt the Mexican Casual Category

Chef Troy Guard enjoys the process of building new concepts from the ground up. What started with a single fine-dining restaurant, TAG, in Denver in 2009 has blossomed into an umbrella group of eight distinct concepts, ranging from fast-casual to high-end and everything in between. But for as much as Guard relishes starting from scratch, he also recognizes the potential in scaling. “I’m very creative and want to try new things and my investors were cool with that. Now they’re like, ‘OK, Troy, we’re 12 years into it. Why don’t we pick the top brands and focus on those?’ Los Chingones is definitely one of the brands,” Guard says. The other three potential growth vehicles under TAG are breakfast spot HashTAG, bowl-centric quick casual Bubu, and steakhouse Guard and Grace. But out of the quartet, Guard thinks Los Chingones is especially ripe for expansion. As he points out, Mexican cuisine is near-universally beloved in the U.S.—a sentiment that’s enhanced by the brand’s casual, funky atmosphere and relatively low check averages. “I definitely think casual Mexican has some legs to grow,” Guard says. “[It’s] something you can eat every day. The flavors are very bold and fun and impactful. I also think what we’re doing is a casual take, so no matter if the economy is booming or if it’s bad like last year, people still have to eat and the price tag is very approachable.” Still, Guard says, some guests balk at the cost. Tacos are $4.50 apiece while starters, quesadillas, burritos, and enchiladas are more in the $10–$15 range. He points out that restaurants peddling tacos for less generally have smaller portions and not packed with as much filling and flavor. Los Chingones was founded and incubated in Denver—a market whose competitive dining landscape, particularly in the Mexican cuisine category, can be a proving ground for nascent concepts. Guard, who spent his teen years in San Diego, leaned into that city’s interpretation of Mexican favorites as a way to distinguish it from other cantina-style brands. Even the word “chingon” is a subtle nod to San Diego, where it’s typically slang for badass. “You’ve got Mexico right there, and I just love their flavors. We’re definitely not authentic, but we take authentic flavors and put what I say is a ‘Troy Guard’ spin or twist on it. So [it’s] a more modern take on using different chilies like guajillos or pasillas or chile negroes and just making fun, new marinades, sauces, salsas, etc.,” he says. One of the most popular dishes since day one has been the Adobo Chicken Thighs. Marinated for 24 hours in guajillo and adobo spices and then grilled, the dish is served alongside a cabbage slaw with a made-from-scratch guajillo ranch and topped with Takis (extremely spicy, rolled tortilla chips). Guard says that guests are also drawn to—and surprised by—an especially bold offering: rattlesnake chorizo.

The beverage menu includes more than 70 varieties of tequila and mezcal, half a dozen margarita renditions, and other signature cocktails, including seasonal specials. Freshness is non-negotiable at Los Chingones—a quality standard Guard first learned working for industry trailblazer Roy Yamaguchi. After finishing college, Guard moved back to his native Hawaii, where he worked as a sous chef at Yamaguchi’s Kahana Bar & Grill in Maui before moving to Asia to open new locations of the chef’s various concepts. Yamaguchi had been among the cadre of chefs to embrace and celebrate native Hawaiian cuisine and ingredients back in the 1980s, and that ethos now informs Guard’s culinary approach. “[Yamaguchi] is still a good friend and obviously a great mentor. … When I worked for him a long time ago, we were working with the ranchers and the farmers right on the island instead of bringing everything on a ship or a plane to Hawaii,” Guard says. “We don’t go screaming to the world that we use local and community-driven food and beverage. That should be the motto. Everyone should do that anyway.” Los Chingones’ dedication to fresh, locally sourced ingredients may not be over-promoted, but it shows up in subtler ways. For one, the restaurants don’t have an on-site freezer because ingredients never go unused long enough to need one. That community-first approach also permeates the very walls of Los Chingones, with each restaurant featuring murals by local artists. Like other concepts under TAG Restaurant Group, Los Chingones locations sport an open-air kitchen with a chef’s counter, where guests can glimpse the cooking and dish preparation. “It’s a lot of fun to converse with the guys in the back. It’s my favorite place to sit if I’m ever traveling or going out to dinner in Denver. If there’s a chef counter, I’m always sitting there with my wife or friends,” Guard says. In terms of size, Guard estimates Los Chingones’ sweet spot to be about 5,000 square feet total, with 3,500 inside and 1,200–1,500 outside. He’s also exploring the possibility of enclosing the patios to allow for year-round alfresco service. The brand has grown to four locations in the metropolitan area, but this summer it’s hitting a new milestone with an outpost in Fort Collins, about an hour and a half north of Denver. Guard still sees plenty of white space in Colorado, but he’s also pursuing Texas as a viable market for Los Chingones. He cites the state’s business-friendly taxes and labor laws as a strong incentive, plus TAG already has a foothold in Houston, where it opened a second Guard and Grace in late 2019. Growth won’t be at a breakneck pace, but Guard hopes Los Chingones can double its footprint to 10 units over the next two to three years. “It’s just an easy concept and cuisine to wrap your arms around,” Guard says. “Obviously everyone’s doing something along those lines, but we like to think ours is bold, fresh, flavorful, and kind of hip and cool.” – Source: fsr magazine.

Top 10: CPG companies focus on flexibility; Lawmakers aim to expand summer food program . .  . .

Restaurants Line up for Federal Aid

Stories outlining business best practices from consumer packaged goods brands proved especially popular with SmartBrief’s food and beverage readers this week. A feature on Clorox’s hybrid work model topped the list. The company redesigned its California headquarters to better facilitate social distancing and updated employee roles that call for a mix of in-office and remote work. General Mills’ HR team shared insights gleaned from a survey that found employees are motivated by choice, which prompted the company to roll out its Gift of Choice program earlier this year. Instead of giving all employees the perk of an extra day off, employees can choose between the paid vacation day, a $250 bonus or directing a donation of $250 to the charity of their choice. Unilever’s chief HR officer, Leena Nair, also focused on flexibility when describing the company’s plans for having employees return to the office. “We are giving the options to employees as to where and when they work, whether this is how many days a week you are in the office or how you arrange your working day,” Nair said. This week on Capitol Hill, lawmakers made plans to introduce the Stop Child Hunger Act, which would expand the summer Electronic Benefit Transfer program adopted during the pandemic. The program, which gives families funds to purchase food, would replace the USDA’s existing summer food initiatives. The Small Business Administration on Monday closed the window for applications for grants under the $28.6 billion Restaurant Revitalization Fund. Restaurant operators have submitted 372,000 applications for grants totaling $76 billion, and SBA leader Isabella Casillas Guzman said many grant requests won’t be fulfilled unless the program is expanded. – Source: The New York Times/Smart Brief.

This easy-to-use spreadsheet will help you track expenses to facilitate SBA’s validation process for RRF grant expenditures . . . .

Association, AICPA Partner on RRF Budget Tracking Tool

The National Restaurant Association and the American Institute of Certified Public Accountants created a Restaurant Revitalization Fund Expense Tracker to help grantees more easily document their use of funds in specific categories. The budget tool is essential for restaurants, bars, breweries, caterers, distilleries, bakeries, food trucks, and other entities that will need to closely track their RRF eligible expenses. The Small Business Administration will issue guidance on the annual “use of funds” validation process, and the information the RRF Tracker is designed to record will be fundamental.

Keep your receipts

Along with the Tracker, grant recipients are advised to keep hold of their receipts, invoices, and other documentation that they’ll need to validate the expenses they pay with their grant monies. “The SBA has made clear that it’s focused on ensuring that grant funds are used for the purposes intended, and restaurants are strongly committed to program integrity,” said Aaron Frazier, director of Health Care and Tax Policy for the Association. “We want to ensure these small businesses have the tools and information they’ll need to fulfill the technical requirements of the grant while managing their busy restaurants.”

Easy-to-use spreadsheet

The Tracker, set up in an Excel spreadsheet, summarizes available guidance from the SBA to assist operators to keep track of the eligible expenses they incur during the covered period. Comprising three tabs, the tracker features a Summary page that updates automatically as you enter expenses on the next tab, the Expense Tracker page. This is where you enter eligible expenses into a ready-made form. If you are wondering which category an expense falls into, the third tab, Expense Categories, provides full descriptions of each eligible expense category, outlining what’s allowed and what’s not allowed. The Tracker will help RRF grant recipients keep tabs on the limits of eligible expenses to avoid getting tripped up due to an oversight or in an audit, especially if these errors could result in loss of funds. The tool is available to download on the National Restaurant Association website under RRF Expense Tracker.

Real estate consultant Larry Strain will help the fast-casual chain add new restaurants, bring on more franchisees and more . . . .

Potbelly Sandwich Shop has Hired Larry Strain as Chief Development Officer

Strain has 20 years of experience in retail development. He is a founding partner of RDE, LLC, a consulting firm providing store development advice to multi-unit restaurants around the country. He has also held real estate and store development positions with McDonald’s, Dunkin’ Brands, and Starbucks. “I am thrilled to join the Potbelly family and participate in its pivot to longer-term sustainable growth,” Strain said in a statement. “I am highly confident in my ability to leverage my experience and look forward to contributing to Potbelly’s future success.” Strain will oversee four areas of new store development: corporate development and services; franchise sales and development; brokerage services and tenant representation; and strategic and trade-area level market planning. “The addition of Larry and his wealth of experience in real estate and franchise development is critical in advancing Potbelly to our next phase of growth,” President and CEO Bob Wright said in a statement. Potbelly has struggled during the pandemic, with many of its stores located in urban areas typically frequented by office workers who continue to work from home. It ended the most recent quarter with 444 company-owned and franchised restaurants, down from 473 locations a year ago. The chain reported total revenues of $78.1 million, down from $87.5 million the year before. The sandwich chain said it expects the bulk of its earnings to come during the second half of 2021. – Source: Restaurant Business.

Deal would enhance the restaurant companies order and delivery management capabilities . . . .

Yum Brands Inc. to Acquire Tech Firm Dragontail Systems for $72.6 Million

Yum Brands Inc. has agreed to acquire technology company Dragontail Systems Limited for 93.5 million Australian dollars (around $72.6 million), with plans to scale Dragontail’s artificial intelligence kitchen order management and delivery technology globally, the two companies said Wednesday. Dragontail, based in Perth, Australia, said its technology integrates the process of getting food to customers from the time orders arrive in the kitchen to when drivers are dispatched, with the added abilities to integrate with third-party delivery companies and allowing customers to track their orders.  Related: Yum Brands sees strong Q1 recovery driven by digital sales boost “With Dragontail, we expect to tap into the power of [artificial intelligence] to accelerate and further enhance our delivery technology capabilities, especially at Pizza Hut, and optimize the end-to-end food preparation process,” Yum Brands chief financial officer Chris Turner said in a press release announcing the proposed acquisition. Dragontail is already in use in nearly 1,500 Pizza Hut locations in 10 countries, Yum said. Yum Brands, based in Louisville, Ky., is the parent company of KFC, Taco Bell, and The Habit Burger Grill as well as Pizza Hut. Dragontail managing director Ido Levanon said the technology company had been working with Yum Brands for years and that their activities are complementary. “The synergy is natural and we bless the completion of the acquisition,” he said. The proposed acquisition comes on the heels of Yum acquiring Tictuk Technologies, allowing customers to order directly via text and social media, and Kvantum Inc., to aid in customer data analysis. Digital ordering, including delivery, has become increasingly important to many restaurants during the pandemic, including Yum Brands’ restaurants. The company attributed its strong performance in the first quarter, to boosts from digital sales. The acquisition is subject to approval by Dragontail shareholders and the Australian Federal Court and is expected to be completed by the end of Yum Brands’ third quarter of 2021. – Source: NRN.

One year after George Floyd’s murder sparked a national conversation, here’s what new initiatives have come from the Black Lives Matter protests . . . .

9 restaurant Companies are Tackling Diversity, Equity and Inclusion in the C-suite

When George Floyd was murdered at the hands of police one year ago, the nation had enough, and protests led by the Black Lives Matter movement broke out across the country. The goals of these protests included protecting Black men and women from police violence and achieving equity in the world. The social-justice movement quickly expanded to other sectors of the economy beyond the police force, and major corporations came under fire for a lack of diversity in their leadership and pay inequity that contributed to the cycle of poverty, which can be difficult to escape, in many cities. The restaurant industry has long had a workforce of racially diverse workers while the C-suite has remained very white. After last year’s backlash, CEOs began to take steps to improve equity within their workforce. Initiatives included tying executive compensation to diversity, inclusion, and equity, hiring new executives to lead these areas, and setting executive suite diversity goals. As a way of working toward a more diverse workforce, the advocacy group CEO Action created a pledge for CEOs to increase diversity, inclusion, and equity in the workforce and at the executive level. Nearly 2,000 CEOs have signed the pledge, including a dozen at restaurant chains: John Miller of Denny’s, Rich Allison of Domino’s, David Hoffman of Dunkin’ Brands, Don Fox of Firehouse Subs, Lenny Comma, formerly of Jack in the Box, Chris Kempczinski of McDonald’s, Rob Lynch of Papa John’s, Wan Kim of Smoothie King, Clifford Hudson of Sonic Drive-In, Lisa Ingram of White Castle, Charlie Morrison of Wingstop, Dave Boennighausen of Noodles & Company and David Gibbs of Yum! Brands all have signed the pledge. Signatories commit to four goals: Continuing to make workplaces “trusting places to have complex, and sometimes difficult, conversations about diversity and inclusion; Implement and expand unconscious bias education; Sharing best practices, as well as unsuccessful ones; and Create and share strategic inclusion and diversity plans with the company’s board of directors or equivalent governing bodies.”

Source: NRN

The chain wants to reach north of 800 restaurants by 2025 . . . .

Blaze Pizza Lays Groundwork for Ambitious Growth Strategy

Last summer, Blaze Pizza’s buzzword was agility. At that point, the 340-unit cult favorite was only a few months removed from a global pandemic that rocked the entire world. Its 80 percent dine-in business plummeted to zero overnight. Franchisee security, family bundle deals, and digital innovation were among the countless pivots. The journey was tough, to say the least. Total revenues in the U.S. dropped from $38.4 million in 2019 to $29.8 million last year, according to the brand’s FDD. Blaze also swung a net loss of $2.8 million compared to a net income of $3.4 million in 2019. But Blaze, once labeled “America’s fastest-growing chain ever'” is better for it, the company says, and franchisees can see the potential. In early April, Blaze announced agreements to develop 16 restaurants across Texas, Florida and Tennesee. Twenty-six-year-old Kelsey Irvine, CEO of Carpo Pizza Enterprises, will open 10 stores in the greater Austin area. In addition, franchisee Kunal Patel has locations under development in Pigeon Forge, Tennessee, and Panama City, Florida. He has future plans to grow throughout the Florida panhandle, Alabama, and Mississippi in the next several years. Blaze’s goal is to reach north of 800 restaurants by 2025. Right now, the brand resides in roughly 40 states and six countries—an already robust network. But CFO Brad Reynolds, who joined the company a few months ago, believes there’s plenty of whitespace to achieve the lofty objective. Blaze isn’t settling to a return to normal. Instead, it wants to improve upon where it was two years ago. “The excitement is there. The passion is there,” Reynolds says. “Our brand is really well-loved out in not just the pizza marketplace but fast-casual, broadly speaking. We have a really great concept and a great product and people love that, and our franchisees do, as well. So there are existing franchisees looking to grow with a renewed perspective on their development territories and how they can really take advantage of a post-COVID environment and also new franchisees’ growth in our system with new territories. There’s a lot of infill opportunity, a lot of whitespace out there.” Reynolds will play a significant role in directing Blaze’s growth, given his unique background. His most recent role was COO of C3, a restaurant platform focused on creating outlets for virtual brands and mastering online food halls. He also picked up fast-casual experience at Smashburger, where he served as CFO and senior vice president of franchise operations. The industry veteran describes his knowledge as the ideal hybrid. On one hand, he’s been responsible for maximizing profitability for hundreds of restaurants and cultivating relationships with franchisees. On the other, he’s immersed himself in the nontraditional game by streamlining off-premises, building delivery, implementing labor efficiencies, organizing packaging, and optimizing kitchen space.

BLAZE PIZZA

Blaze Pizza operates 340 stores across roughly 40 states and six countries.

At his core, Reynolds wants to be an analyst and a strategist, and what better opportunity than a brand eyeing rapid development and trying to revolutionize the fast-casual pizza space.

“If we’re going to hit all of our growth targets, we have to have a really healthy robust franchise system. And my job is to help lead by example and be a good partner both in the restaurants we own and operate, but specifically in our franchise community,” Reynolds says. “And so my background being from both the financing strategy world and having an operational background running everything from new restaurant development, supply chain, construction design, having a deep footprint into operations and also the strategy, FP&A, and restaurant unit-level economic model focus, that’s a holistic background that I have that I’m bringing here to hopefully drive all of our success going forward.” Much of the on-premises business is returning, and demand is “off the charts,” Reynolds says. Even with those dine-in sales rising, the pizza company is maintaining a significant portion of the 130 percent increase in digital channels it saw during the peak of COVID. That’s really the focus now—innovating and evolving both inside and outside the four walls. What’s the source of this resurgence? Reynolds acknowledges the $1,400 stimulus checks played a role. However, that’s not the biggest contributing factor. To Reynolds, it’s restaurants reopening and customers craving an experiential setting to enjoy quality food. Now, of course, people are more motivated to leave the house or order online when they have more money in their pocket, but the CFO says it’s hard to deny that individuals weren’t already itching to return to their normal routines. “We’re seeing similar volumes in terms of digital ordering, and then you combine that with an in-restaurant on-premise mix, that’s hopefully—in all markets—getting close to where it was in 2019, and you have a pretty robust restaurant profile or economic profile per restaurant,” Reynolds says. “So that’s really what we’re focused on right now. I think honestly it’s really just guest demand. Our food eats great at home, but it also eats incredibly well in the restaurant. It’s pizza, right? It’s a cuisine for all occasions, and people just want to experience it in the restaurant more than they have been able to in the last year and a half. So I think it’s all of the above. We’re really just seeing a combination of an incredible amount of desire and demand [to eat out] combined with the ability to do so with restaurants reopening.”

BLAZE PIZZA

“I think people as they get a little more confidence going out for food, going out for an experiential dining occasion, I think that puts us in a really good position, and it puts everybody in the restaurant industry out in here in a position to recover incredibly well,” says Blaze Pizza CFO Brad Reynolds. With the exception of nontraditional venues like airports and stadiums, all of Blaze’s restaurants have reopened their dining rooms with some degree of capacity limitations. As well as Blaze is performing right now, much opportunity remains. The chain is based in California, which houses more than 100 locations. The Golden State has been one of the most restrictive markets since the pandemic began, but now major markets like Los Angeles and San Francisco counties have returned to 50 percent capacity. Additionally, on June 15 California is expected to remove all restrictions and masks mandates — a complete reopening of its economy. As Reynolds explains, certain states are beating others in sales and traffic. Some of that is due to great operations and brand presence, but the overwhelming factor is the openness of the jurisdiction. That gives Blaze assurance that the difference in performance will only be temporary. “I think people as they get a little more confidence going out for food, going out for an experiential dining occasion, I think that puts us in a really good position, and it puts everybody in the restaurant industry out in here in a position to recover incredibly well,” the executive says. “So we’re excited about that.” The biggest question is the labor shortage. Reynolds says onboarding for restaurant labor, particularly general manager talent, is at an “all-time premium” right now. However, the CFO notes the strains are market-dependent and that it hasn’t materially affected Blaze’s business. With an efficient four-wall operation, Reynolds knows the chain can still drive sales at the store level even in a challenging labor environment. It’s yet another reason for Blaze to be excited about the summer. Similar to capacity restrictions, the labor crisis is a temporary obstacle. As labor variables become more favorable into August and September, operators will be able to “put the pedal to the metal” in terms of marketing and returning to normal hours. And with cities and states reopening, the lunch daypart should return and be incremental to the gains during the dinner daypart, Reynolds says. “We’re really excited about it, certainly really positive about where our business is now and how we’ve been able to evolve and innovate in terms of digital, in terms of our on-premise experience, so that when folks come back into our restaurant we can still satisfy all different sales channels,” he says. – Source: QSR.

Covid has changed the hiring game . . . .

2021 Recruitment Trends in the Restaurant Industry

Few industries were hit harder than restaurants by the COVID-19 pandemic. In total, the restaurant sector lost over five million jobs during the early days of the crisis, as businesses across the country boarded up shop and temporarily or permanently closed operations. Over the past three months, starting in February, there have been employment increases in the restaurant sector—however, employment remains more than a million jobs short of where it was in February 2020. Therefore, even with jobs increasing, the industry as a whole is understaffed and desperately trying to find employees. “The reality is that the COVID-19 pandemic has probably changed many aspects of the restaurant and hospitality industry for good,” says Kristen Fowler, practice lead at Clarke Caniff Strategy Search, a boutique executive search firm specializing in the hospitality, services, luxury, and real estate sectors. “It is going to be interesting to see how the restaurant industry rebound plays out. So many places are struggling to find workers at the moment.”

Restaurant Trends

So far in 2021, trends in the restaurant industry seem to be pointing in a couple of different directions.

Takeout and Delivery Are Here to Stay

Only 13 percent of limited-service brands reported being fully staffed at the start of 2020 (before the pandemic), while 38 percent of full-service brands were at a similar position. However, posted job terms such as “drive-thru, delivery, car side, and curbside” have risen from 1 percent of posted jobs pre-pandemic to more than 30 percent in December 2020. In 2021, even with more restaurants opening up as vaccination rates increase and COVID cases decrease, delivery, takeout, and curbside pickup methods of consumption are all remaining high. People seem to be more health-conscious than before the pandemic and have also fallen into daily activity rhythms that steer away from in-person dining.

Front Of House is Surging

Jobs at the “front of house” such as waiting, hosting, and delivery driving are far more popular than those at the “back of the house,” namely cooking, meal prep, and quality control. Frustratingly, because of the increase in delivery and takeout orders, back of house roles are more stressed than ever, which means that understaffing is leading to back of house employees requesting shifts to the front, or just leaving.

The Impact on Recruiting and Hiring

With restaurants, several understaffed, recruiting and hiring teams have had to devise unique methods of obtaining high-quality candidates. Whether by offering money for interviews, increasing benefits, or focusing on employer branding, companies have had to scramble to find applicants and secure them for more than a few months. Going forward, each company will have to determine their optimal method of finding employees that fit their culture, and what will allow them to retain talent.

However, there are a few major restaurant hiring trends that seem to be sweeping the industry right now:

Digital Recruiting

While the shift to digital has been occurring for many years, the pandemic has greatly expedited the process. Now, career fairs and interviews are nearly all taking place online, and an even higher percentage of candidates are discovering jobs via career sites or social media. In this age, companies and recruiters must be prepared to find, interview, and onboard candidates remotely, and utilize new avenues including social media platforms such as Twitter to identify talent.

Referral Emphasis

The restaurant industry has faced difficulties in retaining employees, as there have been more complaints regarding wages, lack of benefits, and difficult hours. Studies have shown that candidates who are referred by current employees are more productive, and also seem more likely to stay for longer. Therefore, devising referral programs for employees is a smart and easy way of broadening the candidate pool while perhaps reaching more high-quality talent.

Increased Benefits/Employer Branding

There are many, many restaurant companies looking for jobs—so you need to make yours stand out. This can be done through more tangible and quantitative strategies such as higher wages or increased benefits, but also more subtly via organizational culture and staff wellness programs. By carving out a niche for yourself, you can find employees who are looking for what you are offering, and secure employees who will be there for the long haul.

Emerging Technologies

Finally, there are technologies that have emerged over the past couple of years that are shifting the restaurant industry as well. These include cloud kitchens, digital loyalty programs, and contactless dining experiences. The latter, in particular, might be a major factor in hiring over the years, as restaurants might require fewer waiters and serving staff as menus become digital. However, as menus and payment systems shift away from physical touch, they will require more backend administration and support. Any crash in a system could prevent numerous orders from being processed, costing hundreds if not thousands of dollars. Additionally, as recruiting and hiring becomes increasingly digital, marketing and communications staff might increase in need as well. It will become more important to have high-quality websites, have strong outreach campaigns to reach potential employees, and connect with employees. Therefore, the overall shift might be away from front-line employees and towards more back-end operations. Overall, recruiting and hiring trends in the restaurant industry might be permanently affected by the COVID-19 pandemic. Restaurant companies are looking for workers and have to try new methods to find and obtain high-quality talent. However, through digital marketing, an emphasis on employee referral programs, and developing an organizational culture that focuses on retention, restaurant companies should be applied to avoid being understaffed as the industry transitions into the 2020s.  Source: Kane Carpenter is the Director of Marketing for Clarke Caniff Strategic Search. In this role, he is responsible for driving market awareness across the entire JMJ Phillip Holdings portfolio of companies. Kane is also Director for Daggerfinn, an employer branding, digital marketing, and strategic growth consultancy.

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