When the transaction closes, the company will have 14 concepts . . . .

FAT Brands to Acquire Five Restaurant Chains for $442.5 Million

The purchase of Global Franchise Group will give FAT Brands more than 2,000 franchised and company-owned restaurants around the world. FAT Brands announced Monday that it will spend $442.5 million to acquire Hot Dog on a Stick parent Global Franchise Group. In addition to Hot Dog on a Stick, Global Franchise Group franchises quick-service concepts Round Table Pizza, Great American Cookies, Marble Slab Creamery, and Preztzelmaker. Those brands will soon join FAT Brands’ growing portfolio, which includes Johnny Rockets, Fatburger, Hurricane Grill & Wings, Buffalo’s Café, Buffalo’s Express, Elevation Burger, Ponderosa Steakhouse, Bonanza Steakhouse, and Yalla Mediterranean. “This acquisition is a key strategic milestone for FAT Brands. We have been very acquisitive in recent years, seeking to add strong and growing restaurant brands to our portfolio. Now that the economy is emerging from COVID-19 and restaurants are rapidly recovering, we are pleased to have reached this agreement to incorporate a powerhouse restaurant franchising group with the support of Serruya Private Equity and Lion Capital,” said Andy Wiederhorn, president and CEO of FAT Brands, in a statement. “The five new restaurant concepts have been very resilient coming out of the pandemic and will complement our existing brands,” he continued. “Furthermore, we will acquire GFG’s [Global Franchise Group] manufacturing operations, which will provide greater efficiencies and incremental revenue opportunities to our company.” The purchase of Global Franchise Group will give FAT Brands more than 2,000 franchised and company-owned restaurants around the world that earn a combined $1.4 billion in annual systemwide sales. Eighty-seven percent of Global Franchise Group’s stores are in the U.S. Based on current projections and assumptions, including the realization of expected synergies and return to pre-COVID restaurant sales, the acquisition is expected to eventually increase annual EBITDA by approximately $40 million to approximately $55–$60 million. FAT Brands is purchasing the concepts with cash and stock from Serruya Private Equity and Lion Capital LLP. “This is truly a transformative deal for both FAT Brands and GFG,” said Michael Serruya, managing director of Serruya Private Equity and chairman of Global Franchise Group, in a statement. “Andy has an exciting vision for FAT Brands and through his recent acquisitions, he has been able to create brand synergies within the portfolio while maintaining an asset-light business model. I look forward to our continued involvement with GFG through our company’s support of FAT Brands from an equity and strategic perspective.” FAT Brands has spent the past decade building a company full of quick-service and casual-dining brands, starting with the purchase of Buffalo’s Café in 2011 and the subsequent creation of Buffalo’s Express in 2012. In October 2017, the group finalized the purchase of Ponderosa Steakhouse and Bonanza Steakhouse for $10.5 million. In July 2018, FAT Brands completed the acquisition of Hurricane Grill & Wings for $12.5 million. In August 2018, Yalla Mediterranean joined the growing company. Then in June 2019, the parent completed the acquisition of Elevation Burger for $10 million. FAT Brands’ most recent purchase came in September 2020 when it finalized the acquisition of Johnny Rockets from Sun Capital Partners for $25 million. Wiederhorn hinted last year that Johnny Rockets wouldn’t be FAT Brands’ final move. He told QSR in September that the company is “absolutely inquisitive these days” and that he sees additional acquisitions in upcoming quarters.” FAT Brands’ systemwide sales lifted 20.6 percent in Q1 compared to 2019, including a growth of 10.9 percent in the U.S. and 49.5 percent internationally. The company swung a net loss of 2.4 million year-over-year and garnered an EBITDA of $585,000. Duff & Phelps Securities, LLC served as financial advisor to Global Franchising Group and Serruya Private Equity. Sheppard, Mullin, Richter & Hampton LLP, and Greenberg Traurig, LLP acted as legal counsel to FAT Brands. Bryan Cave Leighton Paisner LLP acted as legal counsel to Serruya Private Equity and Lion Capital. Source: QSR.

P.F. Chang’s accelerates expansion of To Go concept . . . .

Company Opens Location in Texas, Plans 50 by End of 2022

P.F. Chang’s China Bistro Inc. is continuing to expand it’s smaller To Go Concept, which it introduced last year, with an opening today in Irving, Texas, and another planned next month for Orlando, Florida, the company said. The Scottsdale, Ariz.-based casual-dining company, which opened the first smaller To Go restaurant in Chicago in February 2020, said it expects to have more than 50 To Go units across the United States by the end of 2022. The company cited seven states for planned development: Arizona, Colorado, Florida, Louisiana, Nevada, New York, and Texas. Related: P.F. Chang’s plans 27 P.F. Chang’s To Go locations by 2021. Chang’s expanded  To Go In New York City in October. The New York City store covered 1,700 square feet, considerably smaller than a typical 7,000-square-foot full-service P.F. Chang’s.  The menu featured about 80% of a bistro menu and included special meals developed for carryout, catering, and delivery customers. “Since launching P.F. Chang’s To Go last year, Asian continues to be a go-to take-out cuisine, and we have seen a tremendous response from our customers,” said Damola Adamolekun, CEO of P.F. Chang’s, in a statement. “P.F. Chang’s To Go is not a replacement for our full-scale restaurants,” Adamolekun added, “but we know consumers across the country are seeking convenient dining options and our evolving business model accommodates this desire.” P.F. Chang’s in 2000 created the Pei Wei Asian Diner fast-casual concept, but that division was separated from P.F. Chang’s and spun off as its own company with more than 100 units. It was sold to PWD Acquisition LLC in 2019. P.F. Chang’s, founded in 1993, has more than 300 restaurants in 23 countries and U.S. airport locations. Source: NRN.

Ruby Tuesday appoints 2 execs to the C-suite: George Evans as chief operating officer and Kathy Buckley as chief financial officer . . . .

Executives will Join the Ranks of the Casual-Dining Brand, which Closed 200 Units in 2020

Maryville, Tenn.-based Ruby Tuesday has named two new execs to C-suite positions, the company announced Monday. George Evans was promoted from vice president of operations excellence to chief operating officer, and Kathy Buckley joined the company as chief financial officer. “We are pleased to announce the addition of George and Kathy to the Ruby Tuesday team,” said Shawn Lederman, chief executive officer for Ruby Tuesday, in a statement. “They both have tremendous experience in the restaurant industry and will be invaluable assets as we continue to strengthen our operations and drive the long-term profitability of Ruby Tuesday.” Evans originally joined Ruby Tuesday in 1991 as a training manager and remained with the company until 2000, when he took on the role of partner and vice president of operations for Specialty Restaurant Group, followed by time at P.F. Chang’s before rejoining Ruby Tuesday in 2007. Buckley comes to Ruby Tuesday as the new CFO from companies such as Bruegger’s Bagels, The Rug Doctor, and RadioShack. In this position, Buckley will “utilize her passion for driving EBITDA results and provide direction on financial planning, analysis, and treasury, in addition to managing all aspects of accounting,” according to the company. “The addition of these two industry veterans will ensure well-executed plans and the knowledge to help Ruby Tuesday elevate above the casual dining category,” added Lederman in the release. As of 2020, casual-dining brand Ruby Tuesday had 240 units, down 46.1% from 2019, according to NRN’s Top 500 report. – Source: NRN.

Restaurants roll back restrictions as more people get vaccinated, but most stop short of requiring proof . . . .

COVID-19 Vaccination Rates in the US Continue to Rise

As COVID-19 vaccination rates in the US continue to rise, many restaurants are inviting fully vaccinated customers to come in and dine mask-free. However, most eateries are taking an “honor system” approach when it comes to customers’ vaccination status in an effort to avoid pushback from guests and the possibility of running afoul of state rules against asking for proof of vaccination. Florida and Texas are among the states that have banned so-called vaccine passports and put punishments in place for businesses that require proof of vaccination from customers. Restaurants and other businesses in Texas that require customers to be vaccinated against COVID-19 could have their licenses or operating permits revoked, according to legislation signed by Gov. Greg Abbott earlier this month, Texas Public Radio reported. In places where it is not explicitly prohibited, federal law permits businesses to ask customers for proof of vaccination, according to an analysis by The Associated Press. Even so, many businesses choose not to ask for proof because it can create tension between customers and staff members. In New York City, some restaurant operators have had success with requiring customers to show proof of vaccination or a recent negative COVID-19 test, saying it allows diners to enjoy themselves without worrying about restrictions, Eater reported. However, the decision hasn’t been well received for all bars and restaurants that choose to require vaccines. After a news article about Evil Twin’s vaccine-only policy appeared online, the brewery began receiving hateful messages on social media, including some that threatened lawsuits. The tension sparked by some restaurants’ vaccine policies calls to mind similar pushback that many eateries encountered with face mask policies earlier in the pandemic when many restaurant employees “became mask enforcers instead of hospitality workers,” said Larry Lynch, the National Restaurant Association’s senior vice president of certification and operations. “In our guidance, we’ve certainly pushed to make sure that you ask your employees to get vaccinated and we suggest that you probably not ask customers,” he said. “We saw the challenges with face coverings earlier in the pandemic. We were asking people to wear them and there was a lot of conflict. And so, what we’re trying to do is avoid that conflict.” While many restaurants are aiming to avoid this conflict by not asking customers about their vaccination status, there are also many eateries working to boost the number of vaccinated people in their communities. Several restaurant chains and food and beverage companies made announcements earlier this year about free food and other incentives that would be available to customers who could show proof of vaccination. Krispy Kreme has given away 1.5 million doughnuts through a promotion that it started in March that offers a free glazed doughnut to customers who have been vaccinated, CNN reported. Some California McDonald’s locations are going one step further, offering not just free food but the vaccines themselves. The quick-serve chain is partnering with the California Department of Public Health to offer pop-up vaccine clinics at more than 70 of its restaurants in the state, ABC7 reported. “People who receive a vaccine at McDonald’s will also get a coupon for one free menu item as a thank you for doing their part,” according to the website that lists the dates and location of the pop-up clinics. This is Part II in a two-part series about how restaurants are encouraging employees and customers to get vaccinated against COVID-19. Part I looked at how restaurants can encourage and empower employees to get vaccinated.  Source: Smart Brief / Food and Travel.

The package includes 135 Village Inn restaurants—21 company-owned and 114 franchised—and 13 company-owned Bakers Square locations . . . .

Famous Dave’s Parent to Buy Village Inn and Bakers Square for $13.5 Million

Famous Dave’s parent BBQ Holdings announced Friday it will purchase Village Inn and Bakers Square for $13.5 million, two months after hinting another acquisition was imminent. The package includes 135 Village Inn restaurants—21 company-owned and 114 franchised—and 13 company-owned Bakers Square locations. The deal is expected to close by the end of July. “We believe the Village Inn and Bakers Square concepts are a great complement to our growing portfolio of restaurants,” said BBQ Holdings CEO Jeff Crivello in a statement. “Adding them to our family of brands will only strengthen our company as a whole. We can’t wait to start working with the wonderful people who have made Village Inn and Bakers Square what they are today, and we’re excited to put these two brands on a new and reinvigorated growth path.” The move marks BBQ Holdings’ third transaction in a little over a year. The M&A journey started in February 2020 when BBQ Holdings agreed to acquire Granite City Food and Brewery out of bankruptcy—the company’s first non-barbecue brand. Soon after, BBQ Holdings purchased a Real Urban Barbecue restaurant based in Vernon Hills, Illinois. In April, the company said in an SEC filing that it was exploring more acquisition opportunities and that it had a “vision to build a diverse portfolio of established food and beverage concepts.” The first item on the company’s wish list was obtaining legacy brands, and Village Inn and Bakers Square fit that description perfectly. Village Inn was founded in 1958 and is known for its “made-from-scratch buttermilk pancakes, eggs cooked any style, and a pot of hot coffee on every table.” The brand is based in the Rocky Mountain region, Midwest, Arizona, Florida, and other states. Bakers Square started in the early 1970s as an independent restaurant in Des Moines, Iowa, serving soups, sandwiches, and pies. The chain, which resides in the upper Midwest, has placed first in the American Pie Council National Pie Championships more than 300 times. “Over the last several years, we’ve focused on creating a foundation for these concepts to have sustainable long-term health and value-creation,” said Craig Barber, CEO of Village Inn and Bakers Square parent VIBSQ, LLC, in a statement. “We have an amazing group of franchisees whose operational execution is a core strength for the brand. We are excited to have reached an agreement with BBQ Holdings with confidence in their leadership for the future of these great brands. We wish them, our operational teams, and the franchisees the very best in the years ahead.” However, the two brands haven’t been without their struggles. The companies’ parent American Blue Ribbon Holdings declared bankruptcy in January. The two brands ended 2019 with 130 company-owned stores, but 33 underperforming units closed as American Blue Ribbon entered bankruptcy, leaving them with 97. Amid the Chapter 11 process, the company-run footprint decreased even further. Twenty-eight more locations permanently shut down and 34 stores were refranchised, putting the final corporate tally at 35. The brands emerged from bankruptcy in September 2020. When the bankruptcy was filed, American Blue Ribbon attributed the move to higher wage rates, unfavorable trade locations, high rent, increased competition in the family-dining segment, and emphasis on off-premises. American Blue Ribbon sustained operating losses of $11 million in 2018 and $7 million in 2019. The addition of the two brands may fit into plans BBQ Holdings has for Granite City. The chain’s kitchens were meant for roughly $6 million in AUV, as opposed to the current $3.8 million to $3.9 million. To resolve this, BBQ Holdings is investigating a dual-branded restaurant with a high-end breakfast concept that also sells alcohol. The breakfast restaurant would be open from 6 a.m. to 2 p.m. while Granite City would open from 2 p.m. to 11 p.m. The goal would be to open 10 of these restaurants. BBQ Holdings estimated such a deal could generate $1.5 million in additional revenue with 25 percent flow through and $375,000 in additional EBITDA per location. When the transaction closes, BBQ Holdings will have six brands with more than 280 brick-and-mortar locations—Famous Dave’s, Granite City, Real Urban Barbecue, Clark Crew BBQ, Village Inn, and Bakers Square.  – Source: FSR.

The restaurant will reopen to the public on July 7 . . . .

Buona to Open Dual Concept Store with Rainbow Cone

The Buona Companies, owner and operator of the famous Chicago-based restaurant chain, recently announced the grand re-opening of their restaurant in Darien, Illinois. This location has been undergoing renovations to modernize the space for several months and will be open to the public on July 7th. In addition, when the location reopens, not only will it have a new look and feel – but it will also be home to the first-ever Buona and Rainbow Cone, a dual-concept restaurant. “Both Buona and Rainbow Cone are iconic Chicago establishments; and while we have worked together in the past, often featuring a Rainbow Cone truck at one of our Buona locations, we are looking forward to taking our partnership to the next level and establishing a more permanent partnership with Rainbow Cone,” shares Don Buonavolanto, founding brother. The Darien location will be a full-service Buona restaurant – offering the same extensive menu available at all 25 Buona locations –  including popular items like the Original Italian Beef Sandwich, the Buona burgers, the Plant-Based Italian Beefless Sandwich, and Char-Grilled Chicken Sandwich. Patrons can also get Rainbow Cone ice cream either by going through the drive-thru for pints and quarts or stopping into the restaurant to pick up their favorite cup or cone. In addition to a more modern atmosphere, this dual-concept restaurant will have a state-of-the-art, two-lane drive-thru to accommodate the increased traffic and an outstanding outdoor space that features fire pits and extensive lounge areas, perfect for families and friends to gather. “When we were considering locations for the new dual concept restaurant, the Darien location felt like a natural fit, particularly considering the recent updates and the double drive-thru that will make it easy for customers to get their Italian Beef and Rainbow Cone all in one place. Needless to say, we couldn’t have been more excited to welcome the public back to our establishment this month. We know that this will be a great place for family and friends to gather for a classic Chicago meal,” says Buonavolanto. “We’re thrilled to be partnering with Rainbow Cone on this project. We’re both third-generation family-run businesses, so there are a lot of natural synergies that will allow us to grow our brands and carry on family traditions that started decades ago.” “After meeting the Buonavolanto family and spending some time interacting with them, I was even more confident in my decision,” shares Lynn Sapp, Owner, and Granddaughter of Rainbow Cone’s Founder. “For me, it’s always been about more than just ice cream. It’s about family – and that’s the same for the Buonavolanto family. We all feel it’s important to honor the legacy of these Chicago traditions.” – Source: FSR.

Coming to the Windy City are the signature concept Jaleo, as well as Bazaar Meat and two first-time concepts: a speakeasy and a coffee shop . . . .

José Andrés Reveals More About ThinkFoodGroup’s Plans for Chicago

José Andrés’ ThinkFoodGroup is scheduled to make its Chicago debut this summer in a big way with four new concepts, beginning with Jaleo in July. Originally announced in January as part of the “Spanish destination” Andrés is planning in the River North neighborhood, Jaleo will be the first to open, with its menu of tapas, paellas and sangrias. It will be the fifth Jaleo location worldwide, with the sixth scheduled to open in Dubai later this year. “Chicago is one of the top culinary destinations in the world. I can’t think of a better time to open our doors along the river than summertime in Chicago!” said Andrés in a statement. “My team and I are excited to officially open and join the incredible and diverse food scene in the city.” In addition, directly below Jaleo, there will be a speakeasy concept, set to open later this summer, that has yet to be announced. For ThinkFoodGroup’s first speakeasy, customers can expect, “a diverse variety of experiences unique to the Third Coast,” according to press materials. Additionally, Bazaar Meat and Bar Mar will open their doors in late 2021, located on the second and first floors in the Bank of America Tower, down the Chicago River from Jaleo. The second iteration of Bazaar Meat (the first is in Las Vegas), this location will focus specifically on meats in a city that emphasizes it’s love of meat. Bar Mar will offer a dedicated cocktail experience reminiscent of the group’s barmini concept in Washington, D.C., “but with the Bazaar’s signature flair and theatrics,” the company said. Below Bar Mar, Andrés and his team have opened the brand’s first café concept: Café By The River. The concept is a Spanish take on the traditional American coffee shop. Bazaar Meat, Bar Mar and Café By the River are a collaboration between ThinkFoodGroup and Chicago’s Gibsons Restaurant Group, which operates the fine-dining Quartino, casual-dining Gibsons, Blue Star Bar, Boathouse, and more.

This collaboration also marks the first collaboration between Andrés’ Think Food Group and another restaurant group. – Source: Restaurant Hospitality.

8 Ways To Be A Leader That Employees Want To Follow

Being a leader doesn’t mean bossing people around. As a leader, you’re responsible for motivating, educating, and making sure your employees add value to your organization. This requires you to connect with your team, to create an environment that encourages creativity, to understand your own strengths and weaknesses as well as your teams, and accept feedback about your performance as a leader. Have you ever noticed that some people are horrible bosses, and others seem to rally the team flawlessly with endless creativity?

Working towards developing necessary leadership qualities will require you to pay attention to many things, care about team members, and find ways to inspire and motivate them.

Here are 8 measures that you can begin implementing that will help you to become a leader that people want to follow,

1. Open communication
   You’ll need to be approachable. If you’re constantly barking orders and not listening to your employees you’re not going to have good communication. You want your team members to be encouraged, feel safe to give you feedback, and know they are being heard and respected. Communication is the key to a team that can work together, especially through challenges.
2. Encourage personal and professional growth

Investing in the success and growth of your employees is part of being an effective leader. This could be empowering them towards the interactive media arts degree or giving them opportunities that challenge them to grow. When you believe in your employees and express this not only with words that motivate and inspire them but with actions, you’ll be amazed at how they respond.

3. Don’t be afraid to try new things

Don’t be scared to fail. Giving them a safe place will encourage your team members to play an active role in planning and coming up with ideas without fear. When failure isn’t looked at as something bad, it will improve productivity, creativity, commitment, and problem-solving.

4. Always keep a positive attitude

One bad apple will spoil the entire batch. Things happen, situations, and obstacles arise, but you’ll keep your team members encouraged and inspired to face these challenges with hope if you have an optimistic attitude. Flying off the handle and tossing blame around will create a hostile environment that kills creativity and workflow.

5. Set clear employee goals and expectations

Set clear goals and provide them with your expectations. Be sure that you explain the importance of the project and how it’s going to impact the organization. Knowing this gives them motivation and excitement about being included in something that will make a difference.

6. Give praise and recognition
We all want to feel appreciated for our hard work and contributions. And by offering recognition and praise to the individual accomplishments of your team members or team as a whole, you’ll find that they perform better.

7. Delegation is essential

We all have our strengths and weaknesses, and knowing your team is a huge part of properly delegating tasks and trusting them with a particular task that you believe they are best suited to handle empowers them. It also helps to build trust.

8. Be passionate

Energy is contagious and one of the best motivators, and if you’re passionate about what you do, it creates a stress-free work environment. When you speak with passion and excitement, it’s difficult for others not to be excited as well. This is how you build momentum, engage your team and make even the impossible seem obtainable. Your passion will unite the group, push the boundaries, and they’ll be inspired to crush every single goal you set in front of them.

Just because some people are natural-born leaders with a gift of understanding, compassion, and lack the fear of failure that comes easily doesn’t mean that you cannot be a great leader. But maybe they just make it look natural. Most people have to develop these traits and learn how to be great leaders. Many learn from personal experiences, listening to endless podcasts, reading book after book, and going to seminars. It takes time to develop strong leadership skills. Give yourself the grace to make mistakes, always be honest with your team and ask for feedback without response. Before you know it, you’ll have an impressive track record.  – Source: Tanveer Nasser.

The Economic Recovery is Here. It’s Unlike Anything You’ve Seen . . . .

Businesses and Workers are Poised to Emerge from the Downturn with far Less Permanent Damage

The U.S. economic recovery is unlike any in recent history, powered by consumers with trillions in extra savings, businesses eager to hire an enormous policy support. Businesses and workers are poised to emerge from the downturn with far less permanent damage than occurred after recent recessions, particularly the 2007-09 downturn. New businesses are popping up at the fastest pace on record. The rate at which workers quit their jobs—a proxy for confidence in the labor market—matches the highest going back at least to 2000. American household debt-service burdens, as a share of after-tax income, are near their lowest levels since 1980, when records began. The Dow Jones Industrial Average is up nearly 18% from its pre-pandemic peak in February 2020. Home prices nationwide are nearly 14% higher since that time. The speed of the rebound is also triggering turmoil. The shortages of goods, raw materials, and labor that typically emerge toward the end of an expansion are cropping up much sooner. Many economists, along with the Federal Reserve, expect the jump in inflation to be temporary, but others worry it could persist even once reopening is complete. “We’ve never had anything like it—a collapse and then a boom-like pickup,” said Allen Sinai, chief global economist, and strategist at Decision Economics, Inc. “It is without historical parallel.” When Covid-19 pandemic restrictions sent the U.S. economy into free fall last spring, economists and policymakers worried it would take years for workers and businesses to heal. They now expect the economy’s size to surpass pre-pandemic levels this quarter. Analysts project that by the end of this year gross domestic product will reach the path it was projected to follow had the pandemic never happened, and then exceed it, at least temporarily. The recoveries from the 1990-1991, 2001, and 2007-2009 recessions were “jobless”: Weak demand reduced employers’ need for labor, keeping unemployment stubbornly high for years. This time, however, the labor market appears increasingly tight. The employment cost index in the first quarter rose 0.9% from the previous quarter, the sharpest increase since 2007. That’s even though the unemployment rate, at 6.1%, remains far higher than before the pandemic. The turn in fortunes has been head-spinning for a lot of businesses. At the Atlanta farm-to-table restaurant Miller Union, executive chef and co-owner Steven Satterfield can’t hire fast enough to keep up with the sudden onslaught of business after months of struggle due to pandemic-triggered shutdowns. “It’s a little unnerving because it just kind of came on really suddenly over the last several weeks,” he said. A sustained rebound isn’t assured, suggested by the slowing improvement of many economic measures in April. And a resurgence of Covid-19 in the U.S. could derail it entirely. Nonetheless, economists point to four key ways the current recovery differs from its predecessors:

Natural vs financial disaster

Past recessions typically resulted from a rise in interest rates or a decline in asset values that hurt output, income, and employment, sometimes for more than a year, said Gail Fosler, an economist, and president of The GailFosler Group LLC. The damage to household finances and financial institutions after the 2007 housing crash led to lost demand that weighed on the economy for years. The Covid-19 recession, by comparison, didn’t result from financial factors, but from a disruption akin to a natural disaster. “The pandemic created a shock that overwhelms the very concept of an economic cycle,” said Ms. Fosler. Natural disasters temporarily interrupt economic activity while leaving intact the underlying demand and supply of goods and services. Once the disaster passes, the economy recovers faster than with a typical recession. A 2018 study of individual tax returns of New Orleans residents found that after a large, initial blow from Hurricane Katrina, victims’ incomes bounced back within a few years and even surpassed those of unaffected earners. In downturns, consumers fearful of losing their jobs or incomes often cut back on spending, amplifying the slump. This time, consumer spending in areas unaffected by lockdowns such as autos barely flagged, and to the extent that some consumers did hold back, it was more out of fear of the virus than fear of losing their jobs, a U.S. Census survey conducted throughout the pandemic suggests. Widespread vaccination is containing the natural disaster by allowing consumers to spend more and businesses to reopen. In recent months, restaurant spending by vaccinated people has grown faster than that of the unvaccinated, according to market-research firm Cardify.ai. As more people get vaccinated, hiring is picking up. Analysis of census data by Aaron Sojourner, a labor economist at the University of Minnesota Carlson School of Management, found that for every 100 working-age people vaccinated, 12 are becoming newly employed, on average. Mr. Sojourner said that employment rates were rising more quickly in subpopulations that had faster growth in vaccination rates. At Miller Union, the Atlanta restaurant, sales fell 90% last spring from pre-pandemic levels, said Mr. Satterfield. “There were many times where we thought…‘Maybe this is it, maybe we’ve got to just call it,’ ” he said. The restaurant received a federal Paycheck Protection Program loan last summer that kept it afloat. But it wasn’t until this spring that the tide turned, as warmer weather and higher vaccination rates spurred more business. Some customers have come in sporting their vaccination stickers and saying their trip to Miller Union is the first outing in more than a year. “There’s a confidence and a boldness now, post-vaccination, that wasn’t there before, for sure,” Mr. Satterfield said. Sales are already back to pre-pandemic levels. Usually, in the months or years after a recession, the labor market remains slack as job seekers vastly outnumber job openings. High unemployment and weak wage growth hinder consumer spending and discourage businesses from expanding. The longer it takes for spending to rebound, the greater the risk that businesses will fold and workers will leave the labor force, taking with them the human and organizational capital needed to restore growth. The economy appears to be dodging that vicious cycle. “The fact that it has recovered so quickly has limited the scope for a lot of scarring relative to, say, in the Great Recession,” said Stephanie Aaronson, an economist at the Brookings Institution.

Monetary and fiscal policy

The coronavirus brought about a faster and bigger monetary and fiscal response than in any previous recession, limiting damage to the economic system and setting the stage for a faster recovery. The Federal Reserve cut rates, initiated large-scale bond purchases, and outlined a new commitment to keeping interest rates near zero until full employment had returned and inflation was headed above its 2% target. Officials say that rates may not rise until 2024. The Fed’s balance sheet surged from $4.2 trillion in early March of 2020 to nearly $7.1 trillion by late May; the increase was less than $1.3 trillion during the previous recession. Congress acted faster than in previous downturns. It shored up business and household balance sheets through multiple rounds of stimulus payments expanded unemployment benefits and the Paycheck Protection Program. Congress’s fiscal response to the Covid-19 pandemic will amount to $5.1 trillion, or 4.4% of gross domestic product through 2024, according to the Committee for a Responsible Federal Budget. By comparison, stimulus legislation enacted in the wake of the 2007-09 recession cost roughly $1.8 trillion, or 2.4% of GDP between 2008 and 2012. The upshot is that household incomes are up substantially from pre-pandemic levels, especially for lower-earning families, said James Knightley, chief international economist at ING. Unemployment beneficiaries now receive $300 above regular benefits, compared with $25 in the 2007-09 recession. A University of Chicago study found 42% of beneficiaries received more income than at their previous jobs. This is very different to any previous recession,” said Mr. Knightley. Consequently, we have got a situation where household balance sheets are very strong and this can fuel sentiment and spending for quite some time.” The size of the aid programs has its critics. Many Republican lawmakers opposed President Biden’s March $1.9 trillion stimulus package, arguing it widened the deficit unnecessarily given the strength of the recovery and the scale of the previous rescue package. The U.S. government ran a $1.9 trillion deficit from October through April, a record for the seven-month period, according to the Treasury Department. Republicans and some economists also argue the $300 unemployment top-off is deterring workers from taking new jobs. A growing number of Republican-led states plan to cut the extra benefits before they expire in September. The Biden administration has defended the expanded jobless benefits, saying other factors are deterring work searches, such as lack of full-time child care and fear of the pandemic. The fiscal measures have shattered the usual link between employment on the one hand, and incomes and spending on the other. When Lauree Sheppard, 44 years old, of Charlotte, N.C. was laid off from her dental assistant job at the end of 2019, she began seeking a new career. She finished a truck-driving class in January 2020 and started shooting out her résumé to prospective employers. But no one was hiring. She collected expanded unemployment insurance, food stamps, and all three rounds of stimulus checks. The aid helped keep food on the table while her husband—who also lost his job—picked up food-delivery gigs. “If I did not have any of the help with food stamps or the unemployment benefits, we would’ve ended up being homeless,” she said. Instead, she was able to take a construction-safety certification course in the evenings and continue seeking work until she accepted a job as a truck driver at the Charlotte Douglas International Airport in September. She has since changed jobs and now has enough money to pay off her credit card debt. “I’m finally debt-free,” she said. “It’s a weight off my shoulders.”

Healthier households and businesses

“Often recessions happen because of some sort of imbalance—we have too much housing or too much debt or too much inflation,” said Karen Dynan, an economics professor at Harvard University. When those imbalances start to reverse, the damage to the economy can build on itself, she said. Households and businesses rein in spending, which in turn depresses others’ incomes and leads to further cutbacks. But few such imbalances existed when the pandemic hit, and fiscal and monetary support staved off broader damage. Households, banks, and businesses are emerging in much sounder shape than after previous recessions, Ms. Dynan said. Saving often rises when recessions hit, as worried households forego purchases and cling to cash, but never this much. Americans were saving at an annualized rate of $2.8 trillion in April—twice as much as more than before the crisis, positioning them to spend lavishly as the economy reopens. That compares with a rate of $734 billion in June 2009, or about $909 billion in 2021 dollars. While federal relief contributed to some of the surge, so did business restrictions that prevented spending on many services. Higher-wage Americans, who were shielded from the pandemic’s labor-market hit because they are more likely to work remotely, we’re able to accumulate savings. The delinquent share of outstanding debt dropped to 3.1% in the first quarter of 2021, the lowest since records began in 1999 according to the Federal Reserve Bank of New York and Equifax. That share compares with 5% at the end of the 2001 recession and 11.1% in 2009. This is in part thanks to forbearance offered through federal coronavirus relief and some lenders which protect borrowers’ credit records from missed or deferred payments. A surge in startups signals growing confidence among businesses—even amid a wave of small business closures. Filings to start new firms among a subset of owners who tend to employ other workers exceeded 830,000 through early May, a 21% increase over the same period in 2006, the next-highest year. The financial sector also is in good health. Banks and other lenders were weighed down by bad loans for years in the aftermath of the 2007-09 recession. Now, financial institutions have loss-absorbing capital equal to 16.5% of risk-weighted assets, the highest share since records began in 1996, and well above 12.3% in 2006, the year before the financial crisis began, according to the New York Fed. They are thus poised to lend.

Shortages, bottlenecks, inflationary risks

One downside of the fast recovery is that demand is bouncing back faster than supply can keep up, triggering bottlenecks and wage-and-price pressures that normally emerge years into a recovery. “The power of this spring surge, as I’m calling it, has caught most businesses by surprise,” said Carl Tannenbaum, chief economist at Northern Trust. Inflation often falls in recessions and early in recoveries, then slowly picks up as the expansion ages. This time, it is rebounding as the economy reopens. Consumer prices excluding food and energy soared 0.9% from March to April, the sharpest one-month increase since 1982. Inflation is emerging earlier than in previous cycles and stronger wage growth could lead it to remain high, prompting the Federal Reserve to raise interest rates sooner than markets expect, Mr. Knightley said. That could trigger a stock selloff, since currently heady valuations are based in part on extremely low long-term rates. It could also slow growth by dragging down interest-rate-sensitive industries like housing. The Fed will also be closely eyeing job growth, which was much slower than expected in April. Economists say lack of child care, fear of the virus, and extra unemployment insurance are keeping many workers on the sidelines. Employers seeking to hire face a relatively small pool of available workers. Between April of last year and March of this year the number of job seekers per job opening plummeted from 5 to just 1.2, much swifter than after the previous two recessions. The employee count at Miller Union in Atlanta is down to 30 from 46 before the pandemic. Co-owner Mr. Satterfield is looking to hire in roles including server, dishwasher, prep cook, and line cook. Job candidates appear to be going elsewhere, with so many other businesses opening at the same time, he said.

To lure workers, Miller Union is offering bonuses to new kitchen staff hires who stay 90 days.

The company is no longer advertising takeout family meals—which require workers to box and label packages of vegetables, roasted chicken, and dessert—because it needs to focus on all the customers coming into the restaurant, Mr. Satterfield said. He recently decided to close Sundays because there was not enough staff to handle the demand. The restaurant sometimes asks customers to be patient because food service is slower. “It’s kind of like we’re a machine that’s not well oiled yet,” he said. “It needs lots of oil in little places because we’ve gotten out of practice.”  — Source: The Wall Street Journal.

The move comes almost two years after the fine dining company began exploring strategic alternatives . . . .

Logan’s Roadhouse Parent to Buy J. Alexander’s for $220 Million

SPB Hospitality, the parent of Logan’s Roadhouse and Old Chicago, announced Friday that it will spend $220 million to acquire J. Alexander’s Holdings. The company is buying the fine-dining brand at $14 per share, which is a 14 percent premium over its closing price on July 1. The transaction is expected to close early in Q4. J. Alexander’s Holdings operates 47 upscale restaurants across five concepts, including J. Alexander’s, Stoney River Steakhouse and Grill, Redlands Grill, Overland Park Grill, and Merus Grill. The company will join an SPB Hospitality portfolio that also features Rock Bottom Restaurant & Brewery, Gordon Biersch Brewery Restaurant, Big River Grille & Brewing, Ragtime Tavern, Seven Bridges Grille & Brewery, and more. “We are honored to acquire these storied brands and look forward to welcoming this experienced team into the SPB family,” said SPB CEO Jim Mazany in a statement. “This acquisition advances our vision to become the industry leader and a pioneer of hospitality while developing our portfolio of brands and delivering best-in-class returns, one great restaurant at a time.” J. Alexander’s will go private after nearly six years on the stock market. The company indicated as early as the summer of 2019 that it was seeking strategic alternatives.  At the time, the chain mentioned multiple pathways, including a merger or sale, a strategic investment accompanied by a significant share repurchase, or the acquisition of complementary concepts to increase the revenue base and operating leverage. The brand retained investment banking firm, Piper Sandler, to facilitate the review. Several months later, J. Alexander’s said its board believed its small size makes for an inefficient standalone publicly traded company. Piper Sandler contacted more than 125 potential buyers, and three emerged as serious candidates. One of the potential buyers offered “a premium to the then-current market price,” but that changed once the COVID pandemic hit. The company reduced the proposed purchase price multiple times and insisted on conditions relating to J. Alexander’s performance. As a result, J. Alexander’s shelved talks and chose to instead focus on rebuilding sales. In April, sales lifted 5 percent compared to 2019, the first time the company has seen growth since the pandemic began. At J. Alexander’s and Redland Grill, average weekly same-store sales per restaurant in Q1 grew 3.1 percent year-over-year to $106,600, and at Stoney River Steakhouse and Grill, average weekly same-store sales lifted 4 percent year-over-year to $75,300. Off-premises remain strong, as well. The channel represented roughly 16 percent of total net sales in Q1 or $720,000 in average weekly off-premises sales. That’s only $10,000 fewer than what J. Alexander’s saw in Q4 2020. The multi-million transaction is quite the turnaround for SPB Hospitality, as well. In the spring of 2020, CraftWorks, the former parent of Logan’s and the other brands, filed for bankruptcy after closing 37 underperforming stores. COVID forced the company to close all 261 of its corporate stores and terminate a majority of its 18,00 employees. Fewer than 25 workers remained to preserve the brand. In May, a bankruptcy court approved a $93 million credit bid by senior lender Fortress Investment Group. The deal was $45 million less than Fortress’s original offer. The judge described it as the “best available option” to avoid a possible Chapter 7 bankruptcy and permanent shutdown. As a result of the transaction, SPB was formed to take over and turn around the restaurants. “We have enormous confidence in SPB leadership and their vision for building a true industry leader in the hospitality space,” said Morgan McClure, president of SPB and managing director of Fortress, said in a statement. “J. Alexander’s exceptional team and established brands mark an important addition to the SPB family and a significant step forward in achieving SPB’s vision.” J.P. Morgan Securities LLC and Configure Partners LLC served as financial advisors and Hunton Andrews Kurth LLP served as legal counsel to SPB Hospitality and Fortress Investment Group. Piper Sandler & Co. served as financial advisor to J. Alexander’s Holdings Inc. and Bass, Berry & Sims PLC acted as the company’s legal counsel. – Source: fsr.

Krispy Kreme’s second appearance on the public markets is off to a sweeter start than expected . . . .

Krispy Kreme Shares Pop in its Second Public Debut

The doughnut chain began trading Thursday and opened at $16.30 per share, which is about 4% below its initial public offering at $17. Since then, shares rebounded and closed nearly 25% higher on their first day of trading. However, the company’s initial public offering was well below what the company was hoping for — $21 to $24 per share — when it announced its original terms last month. The tepid reaction from investors perhaps indicates Wall Street isn’t keen on a chain that exclusively focuses on sugary treats during this health-conscious era. But Krispy Kreme CEO Mike Tattersfield remains optimistic about his company’s future. “It’s a great day for us,” he told CNN Business. “The reason we’re going public again is that we truly transformed the company’s brand, culture, and business model.” Under his purview, Krispy Kreme has shifted toward an “omnichannel” approach, meaning it’s selling donuts in convenience and grocery stores, as well as packaged goods such as its branded K-Cups coffee. The company is also focused on its delivery business, which now represents a percentage of sales in the “high teens” he said. Enter your email to subscribe to the CNN Business NewsletterOverall, it’s a “very different company” now, focusing on becoming the “most loved sweet treat brand in the world,” Tattersfield added. The 84-year-old company announced in May it was, once again, going public. Krispy Kreme delisted its stock in 2016after it went private following a $1.35 billion purchase from JAB Holding Company, a private firm that invests in food and beverage brands. It had previously gone public in 2000, and had some difficulties, including an accounting scandal, before the 2016 acquisition. Tattersfield noted that Krispy Kreme’s $2.7 billion valuations are nearly three times higher than it was compared to its 2016 purchase price, indicating the changes are working, he said. Krispy Kreme trades on the Nasdaq (BANK) under the ticker symbol “DNUT” J.P. Morgan, Morgan Stanley, and Citigroup are some of the major banks underwriting the stock. He said the then investors, which still include JAB, continues to be “really enthused about the journey and long term potential it has in the United States and around the globe.” The brand has also been working to remodel its stores in recent years and has also opened lavish locations showcasing its sugary treats. Last year, Krispy Kreme opened a 4,500 – square–foot location in New York City’s Times Square with a glaze waterfall and a 24-hour street-side pickup window. Tattersfield said that the location’s business has grown as more tourists come back to the city. Krispy Kreme has around 400 locations in the United States. In total, there are 1,400 shops in 33 countries. –Source: CNN Business.

Kim Lopdrup successor joins casual-dining seafood brand from Black Box Intelligence . . . .

Red Lobster Names Kelli Valade as CEO

Kim Lopdrup’s successor joins a casual-dining seafood brand from Black Box Intelligence Red Lobster has named Kelli Valade as CEO to succeed Kim Lopdrup, who plans to retire, the company said Thursday. The Orlando, Fla.-based casual-dining company said Valade, who had served as president and CEO of Dallas-based Black Box Intelligence since 2019, will assume the post-Aug. 2. The company last week announced Lopdrup’s retirement after 14 years with the brand. “When I announced my plan to retire, I promised our people we would recruit an outstanding new CEO to lead Red Lobster to even greater success over the next generation, and I absolutely believe Kelli is that person,” Lopdrup said in a statement. “Her experience and deep industry insights coupled with her integrity and commitment to fostering a purpose-driven culture are the perfect fit as we begin this new chapter.” Prior to joining Black Box, Valade worked 22 years at Brinker International Inc., leaving the company as brand president for Chili’s Grill & Bar. While at Brinker, Valade held leadership positions that included chief operating officer and senior vice president of human resources. Rittirong Boonmechote, Red Lobster chairman, said, “We are delighted to welcome Kelli as Red Lobster’s next CEO. She has proven that she can lead large casual-dining companies very successfully, and she brings all the key skills that we were hoping to find.” Valade started her restaurant career at the age of 16 when she landed her first restaurant job as a hostess. “I love the restaurant industry because it’s about so much more than great food – it’s about the great people who are truly heroes on the frontlines of the restaurants delivering a great experience to guests every day,” Valade said. “Red Lobster has incredible people and an amazing culture in place, along with a solid business model and a strong foundation as an iconic and differentiated brand.” Valade serves on the boards of the National Restaurant Association Education Foundation and Seasoned as well as on the executive committee of the board of the Women’s Foodservice Forum. – Source: NRN.

Fiesta Restaurant Group is selling Taco Cabana to Jack in the Box franchisee affiliate for $85 million . .  .  .

Taco Cabana was sold to YTC Enterprises

Taco Cabana was sold to YTC Enterprises, an affiliate of Yadav Enterprises, Inc., a Jack in the Box, El Pollo Loco, and Denny’s franchisee. Fiesta Restaurant Group is selling fast-casual Mexican restaurant Taco Cabana to YTC Enterprises, an affiliate of 400-unit, Jack in the Box, El Pollo Loco, and Denny’s franchisee, Yadav Enterprises, Inc. for $85 million, according to an 8-K filed with the U.S. Securities and Exchange. The sale will help pay for Taco Cabana’s debt totaling $74.6 million. The deal is expected to be finalized in the third quarter in 2021. “We made the strategic decision to sell the Taco Cabana business to allow our leadership team to focus completely on accelerating Pollo growth, and we are very excited about the tremendous growth opportunities we have for the Pollo Tropical business,” Fiesta Restaurant Group president and CEO Richard Stockinger said in a statement. “Anil Yadav, the CEO of Yadav Enterprises, has an impressive entrepreneurial background and is a highly-respected restaurant operator with a proven record of success across a variety of limited and full-service concepts. We are confident he will be an effective steward of the Taco Cabana brand for the long-term.” As a result of the forthcoming sale, Fiesta Restaurant Group is investing its time and attention with Pollo Tropical, focusing on creating “an upgraded customer experience across all service channels, continuing to invest in expanding our growing digital platform and finalizing our new unit expansion plans targeted for 2022,” Stockinger continued. As of July 1, 2021, there are 142 corporate Taco Cabana restaurants in Texas and six franchised Taco Cabana restaurants in New Mexico. Pollo Tropical has 143 U.S. units, according to the latest Firefly 500 data. – Source: NRN.

From RRF grants to potential mergers, it’s time to consider all options . . . .

Where the Restaurant Recovery Goes from Here

A bipartisan group in Congress continues to chase $60 billion in further restaurant aid. A dozen senators and 150 House members sponsored legislation this week to replenish the Restaurant Revitalization Fund, which has faced its share of heat in recent days. The grant program rescinded nearly 3,000 minority- and women-owned applications due to a federal court ruling that accused the SBA’s 21-day prioritization program of discriminatory practices. Two restaurants in Tennessee and Texas filed lawsuits, and two of three judges accused the SBA of “racial gerrymandering” and called its decision-making effort to award grants “unconstitutional.” The SBA, in turn, canceled funds to previously approved restaurants and doled out money to the next in line. Thomas Suozzi (D-Glen Cove), one of the senators sponsoring the fresh legislation, said, as reported by Newsday, “The massive demand for the RRF shows that thousands of restaurants and catering halls are still facing financial woes due to the effects of the pandemic … It’s clear Congress must replenish and better fund this critical relief program.” The RRF saw more than 362,000 applications seeking $75 billion. During the first two weeks, the SBA received applications from north of 122,000 women business owners, 14,000-plus veteran business owners, and over 71,000 economically and socially disadvantaged individuals.  Regardless of the program’s future, restaurants across America find themselves in very different stages of recovery. Is it time to sell? How do you get creative to drive revenue at this point? Stephanie O’Rourk, the partner at CohnReznick, who has worked with businesses across the hospitality industry over the past year to navigate COVID-19 relief options, and Cindy McLoughlin who leads the firm’s consumer, hospitality, and manufacturing practice, caught up with FSR to discuss where the industry goes from here.

Let’s start with restaurants that did receive RRF grants. What do operators need to be aware of now? Particularly in terms of reporting requirements. What are some missteps to avoid?  

It is very important for operators who received an RRF grant to understand the permissible expenses and uses of the funds. There are many allowable options to utilize the funding, but operators should take the time upfront to understand whether their planned usage of the grant is allowable to avoid issues down the road. Operators should also note that there is an annual reporting requirement as a stipulation of the RRF grant. They will be required to substantiate how they are spending the grant funding each year. It is always a best practice to keep organized and properly coded books and records but especially now. This will make it much easier for those who received an RRF grant to fulfill their reporting requirement at the end of each year. Many restaurants that got an RRF grant also received a second round of Paycheck Protection Program funding and may simultaneously be applying for the Employee Retention Credit (ERC) program for 2021. Recipients must make sure they are not “double-dipping” between the various programs. Operators should certainly leverage all the opportunities available to them but must make sure they are eligible and utilizing each relief option properly.

What are your thoughts on the recent push to replenish the fund with another $60 billion? Is that something you figured might happen when the program was first unveiled?  

There has always been bipartisan support of the RRF grant along with significant grassroots support to drive momentum. However, it is no secret that there is a lot going on in Congress with many competing priorities, so a replenishment may take some time to come to fruition. While funding has been halted for priority applicants due to the recently filed court cases, we know that the Small Business Administration is still actively working on RRF applications and requesting information from those restaurants that applied. This is a positive indication to us that some level of RRF replenishment may be passed.

Moving on to restaurants that did not make the RRF cut, what are some other strategic options they should be looking at to emerge successfully from the pandemic?  

The ERC is an exceptionally equitable option for this industry, yet we are still encountering operators who are unaware of the opportunity. The ERC is available for the remainder of 2021 and it is a worthwhile route for many restaurants to consider. Aside from government relief, restaurants must continue to become smarter and more efficient operators. Owners and managers should examine their financial and operational infrastructure to identify inefficiencies, streamline processes, and equip themselves with as much information as possible to aid in decision-making.

What are some challenges still facing the industry?  

The labor pool shortage is a tremendous challenge for the industry. While some of the shortage may be attributable to continuing unemployment benefits, some workers have chosen to leave the restaurant industry for opportunities they deem more stable or resilient to pandemic-related circumstances. Workers are afraid furloughs and layoffs could potentially occur in the future. Pandemic-driven supply chain delay issues also continue to have a ripple effect in the industry. From equipment to ingredients, restaurants are finding it more difficult to purchase what they need and are also experiencing higher prices due to a lower supply.

How can restaurants use tech, and a data strategy in their decision-making, to help address some of these issues?  

Technology has been on the rise for several years as a tactic to obtain real-time data for day-to-day smart decision-making. The pandemic has accelerated that trend and enhanced ways to use technology to interact with customers, such as with digital payment systems, QR code menus, and more. Technology-enabled restaurants had to do business differently, and in many cases, technology-enabled them to be smarter and better operators during the pandemic which they are continuing to reap the benefits from with revenue trends on the rise. Data is critical in understanding what is and what is not working during both tough and good times. The more real-time, accurate data you have, the quicker you can pivot your strategy to move the business forward in a positive, profitable manner. Restaurants can use data to garner insights in areas such as revenue trends, prime costs, brand recognition, customer acquisition and retention.

When should a struggling restaurant consider a merger or acquisition? What are some telling signs that you’ve reached that point?  

An unhealthy, struggling restaurant is not well-positioned to contemplate a transaction. It is more ideal to pursue a merger or acquisition when profits are strong, as the valuation of the business will be higher. A restaurant that has struggled over the past year, but has historically done well and was not overleveraged before the pandemic, does have an opportunity to explore capital options through private equity or other avenues. The restaurants we are seeing that are now considering transactions are the ones that performed well before the pandemic. A merger or acquisition may have been planned pre-pandemic, or the transaction is simply a way to grow or enhance a strong brand. We are seeing an increase in proactive diversification of brands through transactions as one way to strengthen restaurant groups. The restaurants that were already facing challenges before the pandemic are now exploring restructuring or bankruptcy options to manage their current situation.

Talk about some outside-the-box ideas for operators to kickstart revenue, from accelerating value creation to getting creative.  

Have fun! While adhering to local guidelines and regulations, takeout or signature cocktails have become a popular avenue to serve customers, and they offer great margins and offer an opportunity to enhance one’s brand and customer outreach. We are seeing growth in consumer packaged goods such as sauce, baked goods, ice cream, or other special products that customers associate with the restaurant brand. This is an expensive endeavor, but “pandemic-friendly” given that consumer packaged goods can be sold through e-commerce or in grocery stores and drive brand awareness. Other ideas include family meal takeout options, leveraging e-commerce curated marketplaces to extend the brand nationally, and continued outdoor seating to increase restaurant capacity.

What are some of the biggest opportunities for restaurants today, especially when you consider a more rationalized field and pent-up demand?  

We are not quite there yet, but we expect there to be significant real estate opportunities coming out of the pandemic. Because many restaurant chains and retailers have reduced the number of their brick-and-mortar locations, there may be an opportunity to acquire top-tier real estate for mid- or lower-level prices. Depending on how much additional government relief is provided, we may see these opportunities in the next 12–18 months.

What do you think will be the most visible and lasting change to endure after all this passes? 

Technology, including the ability to manage online ordering and more digital touchpoints with customers, is definitely here to stay. The pandemic simply accelerated where the industry was headed. We knew third-party delivery was a growing phenomenon before the pandemic, but its role has been solidified over the last 15 months. Restaurant operators must be mindful of third-party delivery and should consider incorporating it into their strategy if they haven’t already. Especially among casual dining brands, the pandemic brought a more acute understanding of their customer base and the best ways to reach them, which is valuable information to retain after the pandemic recedes. Finally, the pandemic created an inflection point for many people in realizing how important hospitality is in their daily lives and how much they missed it when it was not available. There is, and will continue to be, a time and place for the convenience of takeout and delivery. However, the pandemic has created a greater appreciation for the social experience of dining out. – Source: fsr.

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