Red Robin’s off-premises sales mixed 30.8 percent, only slightly down from 32.8 percent in Q2 . . . .

Red Robin Evolves its Digital Experience

Red Robin CEO Paul Murphy believes the casual-dining chain is well-positioned to take advantage of consumers’ shift to digital and off-premises, and the rest of 2021 could prove him right. Before the calendar year ends, the burger chain plans to launch two mobile apps through iOS and Android, unveil a new website experience, and roll out a fresh loyalty program Murphy said creates an “integrated and seamless digital ecosystem for our guests.” Through loyalty segmentation and personalized messaging, Red Robin saw record highs in guest engagement in the third quarter. The chain also reached 10 million loyalty members for the first time. The new digital experience is expected to soft launch in Q4, and marketing will begin in early 2022 to drive awareness and trial of the app and website. The enhancements are expected to fuel incremental frequency, traffic, and average check, with the website and app generating higher-order conversions and offering better upsell capabilities. Physical infrastructure plays a role as well: Red Robin is continuing to increase space for off-premises orders without harming dine-in business. The CEO said those reconfigurations are scheduled to finish in 2022. “The elevation of the off-premises experience is critical to maintaining this sales channel,” Murphy said during the brand’s Q3 earnings call. Helping drive digital sales are Red Robin’s three virtual brands, Chicken Sammy’s, The Wing Dept., and Fresh Set, which are now available systemwide across all delivery platforms. The concepts earned $5.9 million in sales during Q3, which Murphy described as “highly incremental.” In the third quarter, Red Robin’s off-premises sales mixed 30.8 percent, only slightly down from 32.8 percent in Q2. It’s also the sixth straight period of more than doubling the pre-pandemic level of roughly 14 percent. Although Q3’s off-premises mix is down from last year’s 40.7 percent, Red Robin retained the same dollar amount at roughly $81 million. Third-party delivery led the way with 52.2 percent of off-premises sales, followed by to-go (39.6 percent), catering (4.5 percent), and native delivery (3.7 percent). Overall, same-store sales in the third quarter lifted only 0.6 percent versus 2019, a softer-than-expected performance due to the Delta variant and staffing shortages. Red Robin estimated reduced seating capacity and limited hours due to labor challenges and COVID exclusions impacted comps by 2.2 percent compared to 2019. However, with staffing levels rising and turnover slowing, same-store sales rose 4 percent in September compared to 2019 as Red Robin exited Q3. In October, the chain once again saw figures rise 4 percent. Units among the top 75 percent quartile finished the period with staffing levels at or above 2019, but issues with the bottom quarter of locations have kept capacity running between 85–90 percent. “While our decision to reduced hours and seating capacity impacts short-term sales, we believe prioritizing a quality guest experience and supporting a workload for our team members that prioritize the satisfaction and retention are the two most critical considerations for the future success of our brand,” Murphy said. “… Staffing is our No. 1 priority, which is why we are committed to ensuring each restaurant is effectively managed, optimally staffed, and that our team members are well-trained and retained,” he continued. “We are also removing obstacles for our general managers, improving our wage policies and training programs, and increasing our talent pool.”

The Cheese Lover’s menu is outperforming expectations by more than five times. 

In addition to better staffing levels, Murphy owed Red Robin’s accelerating sales to invest in strategic initiatives, like pivoting to digital marketing, a vehicle that fueled “meaningful incremental” traffic in the third quarter. He said the transition allows the brand to target messaging by both geography and specific consumer segments. Through the messaging, Red Robin was able to lead customers toward LTOs, including the Scorpion Burger, an item that has been so well-received that it earned a permanent spot on the menu. Also, the chain’s Cheese Lovers lineup is outperforming expectations by more than five times, and the new Mozzarella Cheese Sticks have become the No. 1 appetizer. “We are reaching consumers with more relevant messaging that is also more cost-effective,” Murphy said. “In the fourth quarter, we will remain nimble and efficient with the bulk of our marketing investment in digital.” Throughout the quarter, Red Robin was pressured by 7 percent wage inflation and nearly 9 percent commodity inflation. To mitigate costs, the chain increased prices by 3.5 percent in Q3. For the full year, the company projects mid-single digit commodity and wage inflation. Red Robin also expects to finish 2021 with $45 to $55 million in capital expenditures, including investment in its Donatos expansion. The brand added pizza to another 38 stores in Q3 and will do another 40 in the fourth quarter. That should bring the total to roughly 200 stores by year’s end. Donatos garnered $4.1 million in Q3, thanks to increased marketing support at certain locations. Restaurants that offered pizza for the full quarter and didn’t see supply chain issues saw same-store sales rise 4.3 percent versus 2019. Units that have served Donatos prior to 2021 and did not experience supply chain issues witnessed comps increase 8.7 percent. In terms of development, the brand will open a high-volume restaurant in Federal Way, Washington, that was relocated because of the eminent domain two years ago. That new store will have the company’s new prototype elements that improve dine-in, off-premises and curbside execution, and kitchen layout. In 2022, the brand will debut another store based upon this design and will develop a real estate pipeline for resuming modest growth starting in 2023. Red Robin earned $275.4 million in total revenue in Q3, an increase from $200.5 million in 2020, but a drop from $294.2 million in 2019. The restaurant-level operating profit margin was 12.5 percent, an improvement from 8.6 percent in 2020, but a decrease from 16.1 percent two years ago. – Source: FSR.

The National Restaurant Association said the employee tax retention credit was the only available federal government relief to support payroll and employee benefits without adding new debt . . . .

$1 Trillion Infrastructure Law Ends Employee Retention Tax Credit

President Joe Biden signed a $1 trillion infrastructure bill into law Monday that ends the employee retention tax credit retroactive to after September 30. The ERTC provides a tax credit equal to 50 percent of qualified wages paid, up to $10,000 per employee, after March 12, 2020, and before January 1, 2021. The National Restaurant Association said it was the only available federal government relief to support payroll and employee benefits without adding new debt. In response to the ERTC’s conclusion, the Association asked Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig in an open letter to help restaurants navigate the credit’s end. The Association called for the IRS to speed processing of ERTC payments so the backlog from 2020 and previous calendar quarters in 2021 are resolved by the end of the year. The organization also wants the IRS to allow small businesses to defer their fourth-quarter federal income tax payments due from January 15, 2022, to July 15, 2022. The Association additionally asked the IRS to safeguard all deferred fourth quarter federal income tax payments from any penalties or interest. “While the infrastructure investments made with this bill won’t solve our most immediate supply chain challenges, they will improve long-term business opportunities for restaurants in communities large and small,” said Kennedy, the Association’s executive vice president of public affairs. “We’re disappointed that Congress was short-sighted in ending the Employee Retention Tax Credit, which continues to be one of the only remaining rebuilding tools for restaurant operators. The ERTC has been an invaluable lifeline for restaurants struggling to retain workers. We hope that Congress will reconsider and find a way to reinstate it until the end of the year.” Around 85 percent of restaurants reported lower profitability than before the pandemic, according to the letter. “Far too many struggling restaurants have waited more than six months since they originally submitted applications and have not received financial assistance under this program,” said Kennedy, citing a Government Accountability Office report in July that found the IRS has been experiencing a paper return backlog of 2.5 million unprocessed forms. “We urge the IRS to immediately expedite the processing of all ERTC payments—for both 2020 and the previous calendar quarters of 2021—so that eligible restaurants can receive these badly needed funds by the end of the calendar year,” he continued. More than 424,000 employers deferred about $112 billion in federal Social Security taxes as a way to retain liquidity for employee retention, the letter says, adding that if a familiar sum is now subject to federal tax payments, the IRS should provide flexibility to pay the fourth quarter’s quarterly income tax payment. “As President Biden signs the Infrastructure Investment and Jobs Act into law, and the IRS issues new regulations within weeks, we respectfully remind the Administration that this ERTC change will resonate with restaurants for years,” Kennedy said in the letter. The Association said the American Rescue Plan Act of 2021, which included the $28.6 billion Restaurant Revitalization Fund and the six-month extension of the ERTC, was “an essential step” to reviving the hospitality industry. In the four months after, employment in eating and drinking places surged by nearly 900,000, and restaurants were hopeful for a 2021 rebound. However, rising Delta variant cases brought employment gains to a halt, the letter says. Two in three eligible restaurants, or about 177,000 small businesses, did not receive any aid from the Restaurant Revitalization Fund. Additionally, restaurants and bars remain nearly 800,000 jobs, or 6.4 percent, below pre-pandemic levels. “The termination of ERTC after September 30, 2021, deals a retroactive, sudden blow to restaurants currently utilizing the program during this calendar quarter,” Kennedy said in the letter. “As restaurants enter a second winter with COVID-19, small businesses will now face a potential clawback of federal taxation and a compliance nightmare. – Source: FSR.

Village Inn and Bakers Square were acquired for $13.5 million during the summer. Granite City’s Brews and Village Inn’s Breakfast . . . . will be Crafted Under One Roof . . . .

Famous Dave’s Co-Brand Strategy Gathers Momentum

In April, Famous Dave’s parent BBQ Holdings revealed an ambitious co-brand strategy for Granite City Food and Brewery. The chain’s kitchens are built to hold $6 million in AUV, instead of the pre-COVID level of $3.9 million. BBQ Holdings knew what it needed to increase volume—a concept that layers in the morning daypart. That path gained some clarity in July when the company agreed to purchase Village Inn and Bakers Square for $13.5 million. However, at the time, CEO Jeff Crivello wasn’t sure whether Village Inn was the right breakfast concept to go inside Granite City, noting “it really hasn’t been fleshed out yet.” A few months later, it appears plans are indeed fleshed out, with a dual-concept Granite City/Village Inn restaurant scheduled to open in January. Village Inn will open from 7 a.m. to 3 p.m. while Granite City will open from 3 p.m. to 11 p.m. The company estimated that this type of dual-concept format could generate $1 million in additional revenue and $250,000 in additional EBITDA per location. The move builds off a strategy leveraged by Famous Dave’s. In October 2020, BBQ Holdings announced a 25-unit development deal with Bluestone Hospitality Group to open Famous Dave’s ghost kitchens and dual concepts with Italian chain Johnny Carino’s. The barbecue chain also has a co-branding format with Texas T-Bone Steakhouse in Colorado Springs and with Cowboy Jack’s steakhouse in Woodbury, Minnesota. Additionally, BBQ Holdings said the most-productive Famous Dave’s ghost kitchens inside Granite City stores will evolve into dual concepts. These eight digital kitchens are averaging $5,500 per store per week. The approach gained even more steam when BBQ Holdings agreed in October to acquire Tahoe Joe’s Famous Steakhouse out of bankruptcy. The idea is that Famous Dave’s 6,500-square-foot restaurants were designed to earn higher than a $2.8 million AUV. The company believes a co-branded restaurant with a concept like Tahoe Joe’s could add $800,000 in revenue and $200,000 in EBITDA per store. In addition to steakhouses, BBQ Holdings also suggested Famous Dave’s could enter a dual/virtual concept relationship with a known pizza brand that has simplistic operations and low up-front costs. The company said that with this hypothetical deal, there’s potential for $200,000 in additional EBITDA per location. After purchasing Village Inn, Bakers Square, and Tahoe Joe’s in 2021, and Granite City and Real Urban Barbecue in 2020, BBQ Holdings is still analyzing more M&A opportunities. The company is looking for legacy brands, growth-ready franchise systems, potential with consumer packaged goods, opportunities to leverage digital marketing, and accretive acquisitions (roughly 3-4x EBITDA) that fold into the current infrastructure. In the third quarter, Famous Dave’s company-owned same-store sales lifted 12.4 percent compared to 2019, while franchises grew 6.9 percent. Granite City’s comps fell 0.5 percent in Q3. As for new acquisitions, Village Inn’s same-store sales dropped 8.1 percent against two years ago, and Bakers Square saw comps drop 20.2 percent versus 2019. BBQ Holding’s portfolio now includes 303 brick-and-mortar locations across seven brands, including 135 Famous Dave’s stores and 131 Village Inn locations. Those figures don’t include the eight company-run Famous Dave’s ghost kitchens inside Granite City locations and 20 franchise ghost kitchens operating out of another restaurant or shared kitchen space. Ten additional operator-led digital kitchens are projected to open this year. The barbecue brand’s virtual portfolio also features digital brand $5 Burgers, available in Arizona, Colorado, Indiana, Iowa, Michigan, Minnesota, New Jersey, New York, Ohio, and Wisconsin. Famous Dave’s franchisees recently opened the chain’s first quick-service prototypes in Las Vegas and Coon Rapids, Minnesota. The chain’s first drive-thru store is expected to debut in Salt Lake City in December. Also, a second Real Urban Barbecue unit opened in Chicago, and a new Village Inn prototype, labeled “VI Café,” is scheduled to open in Omaha, Nebraska, early in the first quarter. “This was a quarter of strong execution for BBQ Holdings, as our growth strategies continue to deliver the positive top and bottom-line results, including a steady improvement in same-store sales and solid free cash flow,” Crivello said in a statement. “Management is focused on executing against our three core growth initiatives, including accretive M&A, opening new units, and filling the latent capacity of our current restaurants.”   Source: FSR.

The pizza chain, which is growing rapidly in international markets, has a deal to open 60 locations in the countries . . . .

Papa Johns Expands into Kenya and Uganda

Papa Johns on Tuesday said that it has a deal with Kitchen Express LTD to open 60 locations in Kenya and Uganda in the coming years.

The first four of these locations are set to open in 2022, starting in Nairobi. Kitchen Express is a subsidiary of AAH Limited, the majority shareholder of Hass Petroleum Group, which operates 140 gas stations throughout Africa. The partnership will enable Hass to leverage its footprint to expand the Papa Johns brand. Abdinasir Ali Hassan, chairman of Kitchen Express, called Papa Johns “a company whose vision and values are closely aligned to our own, and this partnership brings together two brands built on a legacy of quality and service.” Kitchen Express will hold the master franchise rights for Papa Johns in the two countries. The agreement is the latest example of Papa Johns’ global development efforts. The Louisville, Ky.-based pizza chain has seen rapid growth in international markets. The company reported record net new unit growth in the first nine months of the year, led by markets outside the U.S. The company has also entered 13 new countries in recent years. In August, the company said that Drake Food Service International will open 220 locations in Latin America, Spain, and Portugal. It also acquired 60 locations in the U.K. – Source: Restaurant Business.

The chain expects its virtual brands and ghost kitchens to generate incremental sales, though it’s still too early to tell just how well they’ll do in 2021 . . .  .

Cracker Barrel Has Been as Active as Anyone in Developing Its To-Go Business

Delivery and takeout have become as important as the table turns for casual-dining chains since the pandemic began. And while Chili’s and Applebee’s have snatched a lot of headlines with their off-premise efforts, Cracker Barrel has been as active as anyone in developing its to-go business. Takeout and delivery accounted for 20% of the chain’s sales in its fiscal first quarter, a number that has not changed much even as customers started returning to its dining rooms. It has doubled down on the channel with a pair of virtual brands as well as its first ghost kitchen, all of which it views as ways to generate incremental sales. “The strategic intent behind it was to appeal to guests who would otherwise not be coming into a restaurant, who might be shopping for a certain type of food instead of a brand, and who we believe would be a completely incremental piece of business,” said CEO Sandra Cochran on an earnings call with investors Tuesday. Its first virtual brand, Chicken n’ Biscuits, is now in about 500 of its 664 restaurants. The menu consists of fried chicken, biscuits, and sides, available for delivery or pickup through DoorDash, Uber Eats, and Grubhub. A second virtual brand, called Pancake Kitchen, is in 100 locations. Cracker Barrel believes the brand can help meet the unmet demand for breakfast delivery in certain markets with a limited menu of pancakes and a few breakfast sides. Also, at the end of last month, Cracker Barrel opened its first ghost kitchen, in Los Angeles, serving a pared-back menu of signature dishes as well as the two virtual brands. Executives said it’s too early to share many details about the digital properties’ performance, other than that sales have been “promising” so far. The two brands were rolled out late in the quarter and hit some supply chain and technology snags in the process. Cochran noted that it was hard to get chicken tenders for most of the period, for instance. Now the chain is focusing on optimizing the brands’ menus and identifying additional restaurants where they could work. “We’ll be adding items with a big focus on adding beverages to make sure we can maximize sales, maximize margin on those,” said CMO Jennifer Tate. The Lebanon, Tenn.-based chain doesn’t expect the brands to help margins with their value-driven offerings so much as generate sales, Cochran said. Third-party delivery fees make the orders inherently more costly for the company. But the Los Angeles ghost kitchen, for instance, is the only Cracker Barrel outlet around. “That, again, is 100% incremental for us, because it gives us a chance to reach guests in urban areas like Los Angeles where we have no Cracker Barrels nearby,” Tate said. The chain plans to open more ghost kitchens in LA and other urban areas where it couldn’t otherwise go. – Source: Restaurant Business.

Jack in the Box announces its starting “Jackletes” line-up . . . .

Brand Ambassador Program Celebrates Collegiate Athletes That Sport a Variation of the Name “Jack”

Do you hear the crowd cheering? We do. That’s the sound of Jack in the Box fans around the country welcoming the brand’s inaugural “Jackletes” roster – Jack in the Box’s new brand ambassador program. Known as a brand for the fans, Jack is tapping into the under-represented collegiate sports world and rallying behind athletes who not only love the brand and its all-day menu but also sport a variation of the name “Jack”. Meet the 2021 Roster of Jackletes:

Angel Jackson, Basketball (Center) at University of Southern California

Jack Jones, Football (Defensive Back) at Arizona State University

Jack Pineda, Baseball (Shortstop) at Baylor University

Jackie Nylander, Tennis at Southern Methodist University

Jackson Stone, Wheelchair Basketball (Center) at University of Arizona

Jacquelyn Hill, Track & Field (Distance) at University of California, Los Angeles

T.Q. Jackson, Football (Wide Receiver) at Southern Methodist University

Jack McCallister, Football (Punter) University of Washington

Jacqueline Dianis, Basketball (Guard) University of New Orleans

Jack Pulliam, Tennis University of Washington

“Jack in the Box has always been a brand with a focus on those usually overlooked…the curly fry in the world of regular fries. That’s what sparked the motivation of our inaugural Jackletes roster to include both mainstream and under-represented collegiate sports,” said Ryan Ostrom, CMO of Jack in the Box. “The selected Jackletes each have a strong connection with our brand, whether it’s celebrating a game-winning home run with Tiny Tacos or our all-day breakfast options providing the fuel they need to power through midterm exams. Supporting these athletes gives us an opportunity to connect with college students in a new way and rally behind many under-represented collegiate sports.”

With an entire menu available all day, Jack in the Box has organically fueled memorable moments for college students and athletes throughout the years. Through the new ambassador program, each Jacklete will be able to further connect with the brand beyond post-practice and late-night visits after a game. Students who are named Jackletes have lifetime status and will be provided with exclusive access to upcoming Jack events and new menu items, a $5,000 sponsorship, and a $500 inaugural food credit to use towards their favorite Jack in the Box menu items. Think you have what it takes to be the next Jacklete? Eligible college athletes with Jack included in their name, should direct message us on any Jack social channels and tell us why you think you should become part of Jack in the Box’s 2022 Jackletes roster. Check out Jack’s social channels here to view the 2021 Jackletes roster and to nominate your favorite “Jack” college athlete for consideration. To contract with college athletes in a compliant manner that adheres to NIL rules and regulations governed by state law and NCAA guidelines, Jack in the Box is working MKTG.  – Source: NRN.

What do employees want from leaders today? Don’t guess . . . .

What do Employees Want from Leaders Today? Don’t Guess. Ask, Listen and Adapt to Boost Workplace Respect

The Great Resignation seems to be gaining strength. A record 4.4 million US workers voluntarily quit their jobs in September 2021. Nearly 24 million US workers have quit since April. This situation won’t get better in the months to come. A global McKinsey study found that 40% of respondents are likely to quit in the next three to six months. This study says that senior executives must understand why employees are leaving and why too few candidates are taking open jobs. When executives were asked why employees had quit, they said it’s due to compensation, work-life balance and poor physical and emotional health. These things do matter to employees, but they’re not in employees’ top three reasons for quitting. The top three factors are:

54% said they didn’t feel valued by their organizations

52% said they didn’t feel valued by their managers

51% didn’t feel a sense of belonging at work

It is no wonder that offers of higher pay, working from home, well-being programs, etc., are not causing employees to stay, nor are they causing candidates to join your company.

What can business leaders do to address these gaps?

First, embrace this mantra: Employees of all generations desire and deserve workplaces where they are respected and validated for their ideas, efforts, and contributions, every day. With that belief firmly in your hearts, stop assuming you know what your employees want. Instead, ask them. Your employees’ top reasons for quitting may not match the top three from the McKinsey study. You need to learn what your employees need and want — and adapt systems, procedures, and behaviors to deliver. Finally, start small. Fix things that are seen as unfair and unjust. By closing a few important gaps promptly, you’ll prove that you want the work culture to be respectful and validating for everyone. For example, pay inequity is a huge frustration for many employees. You have the data. Analyze the gender pay gap and the people-of-color pay gap — and fix them. Spend the money. By tolerating pay gaps and enabling pay gaps, you’re telling your employees that you don’t respect them.

By closing those gaps, you’ll prove you do respect your employees. All of them. – Source: Smart Brief.

The staff makes anywhere from $19-30 an hour after tips . . . . One Restaurant has More Than 2,000 open applications . . . .

How Bartaco’s COVID Pivot Removed Labor Pressures

Today’s “normal” for restaurants and operators is complicated to say the least. Labor shortages and supply chain issues have hindered restaurant comebacks throughout the country. According to recent data from the Bureau of Labor and Statistics, there were roughly 1.6 million open jobs in leisure and hospitality in September, which represents 10 percent of all jobs in the industry. Workers have also quit their jobs at record numbers. The separation rate rose to an unprecedented 3 percent in the U.S. overall in September, and leisure and hospitality were more than double that rate. This is happening when the average hourly wage for non-management positions is at a record high, averaging $16.68, according to the BLS. Bartaco, which has 21 stores in 11 states, has dealt with the same issues other restaurants have during the pandemic, but the brand took a different approach—specifically with staffing. “One of the units has over 2,000 open applications right now,” CEO Scott Lawton says. “We actually have a volume [of job applications] that we’re having difficulty keeping up with.” What’s the secret to Bartaco’s success? In short, it’s simply paying workers more. The staff makes anywhere from $19–30 an hour after tips. That includes back-of-house employees as well. “If you’re a dishwasher and busboy and you’re working 40 hours a week, you’re going to make around $47,000 a year,” Lawton says. The longer version of the recipe is a bit more complicated. Lawton says the ability to pay his staff that sort of wage is a result of a few strategic pivots the company made throughout the pandemic. Like many companies at the beginning of COVID, Bartaco fortified its digital presence. When dining rooms reopened, the brand invested in a QR code system that brought customers to an online menu and allowed them to order and pay digitally. This pivot eliminated numerous touchpoints between staff and customers, creating a safer dining environment, and decreased possible areas of friction, leading to a better customer experience. Perhaps most importantly, it showed Lawton that the need for waiters and waitresses wasn’t really a need at all. “We added to support staff and we actually added a lot to our salaried staff as well. But we got rid of the waiter position,” the CEO says. “In doing so, we no longer had a tipped employee standing in front of a customer who would become entitled to that tip. So, we were able to take that tip money and create a pool where we were able to share it with our entire restaurant.” Instead of using the standard system of having waiters rely on tips, Bartaco pays its staff at least the full minimum wage before splitting up tips. Lawton says the average wage at the restaurant is $23 per hour. “I think people saw how some restaurant groups handled the pandemic and maybe chose that they wouldn’t want to work for an employer like that,” he says. “We did a really good job of creating a safe environment for our team and a really fair equitable environment. And when you stack that with a very solid, dependable paycheck, we’ve become a desirable place to work. We are benefiting from the fruits of that now.” In terms of the supply chain, Lawton says problems with construction materials and kitchen equipment caused delays, but he doesn’t anticipate those obstacles preventing growth. When it comes to expansion, the brand looks for areas with plenty of disposable income, a younger demographic, and quality surrounding real estate and commerce. “I don’t think it can affect our growth strategy,” he says.  “We just have to be much more mindful of the budget. There’s no room for fat in these projects. Now we have to really make sure that we choose our construction partners carefully and that we’re holding to our schedules as best we can.” The positive news coincides with the hiring of Anthony Valletta, the chain’s new senior vice president of operations. He comes to Bartaco with more than 20 years of experience and is the perfect fit for the job, Lawton says. He adds Valletta’s combined experience of working in large and small restaurant groups will prove valuable to the taco brand. Lawton also believes Valletta’s work on technical projects—such as building a proprietary tech stack and helping with digital engagement—is well-suited for where Bartaco is headed. “We run our restaurants like their locally owned small businesses, but you do need to understand scalability,” Lawton says. “Anthony has those abilities.” “Anthony is a very intelligent guy who leads with grace but also has really high standards,” he continues. “He has great energy and a lot of excitement for what he does, and that rubs off. Those were leadership skills and traits that were really important.” With Valletta as senior vice president of operations, Lawton says customers can expect Bartaco to be laser-focused on details, including food and the overall experience. While continuing its own initiatives, the brand is aiming to tighten where it can and continue to improve, and he thinks Valleta will play an important role. “We can expect better guest engagement [with the hiring of Valletta],” he says. “The experience will become better as we get more efficient. Food quality will continue to improve, table service will continue to improve. We can always get better.” – Source: FSR.

Revenue Drives Busines Practices, that Never Changes . . . .

Now is the Perfect Time to Set New Financial Goals for Your Restaurant

The future is unpredictable. The presence of COVID-19 and its variants these last couple of years has certainly shown us that. However, it is still key—perhaps even more essential than ever before due to economic uncertainty—for restaurants to establish new financial goals that can help carry them into a lucrative future.

It’s time to take lessons learned from the past and apply actionable insights toward future goals. Here’s why the modern economy mandates that you set new goals, as well as tips for how you can go about establishing them in your restaurant.

Why now is the time to set new financial goals

The changes wrought by the COVID-19 pandemic on the restaurant industry were monumental. No one could have predicted the massive wave of layoffs, resignations, and closed businesses that followed on the heels of the global virus. Now, even though the economy is turning around, it’s important to assess these damages and how they’ve altered the landscape.

Let’s start with some astounding statistics showing us what happened across 2020 and into 2021:

Sales were $240 billion below pre-pandemic estimates.

110,000 restaurants closed at least temporarily, some for good.

40 percent of operators added tech to business practices.

Staffing levels are reported to be 20 percent below normal.

Employment across the industry fell by 2.5 million jobs.

Facing an environment like this, restaurateurs have pivoted in their operations, menus, and organizational structure. We’ve seen a mass transition to tech-supported, delivery and quick-service models. Restaurants have had to support both their customers and a workforce that now operates on the frontlines of a public health crisis. Guaranteeing food and worker safety in such an environment while balancing the books requires that you implement practical and reasonable goals.

But how do you know what these goals should be?

How to establish new goals for your restaurant

Every restaurant’s business model, resources, and owner aspirations will differ. In one way, however, just about every restaurant is the same: revenue drives business practices. In a pandemic economy, though, this doesn’t mean what it used to mean. Demand is down even if the desire is there. People just don’t want to take the risk of going out as much anymore, not when health and financial security is on the line. So what does healthy business growth look like in this environment? And how can you establish goals that make sense for you? The following are strategies for measuring and striving for ideal growth in a pandemic economy:

Align innovation with your aspirations.

First, you’ll want to approach your financial goals in terms of what you want your restaurant to be. What do you want it to mean for your customers? What kind of services do you want to offer? If bringing your customer’s convenience is important to you, then you’ll want to align investment budgeting with integrating new methods for service. This could mean integrating a new mobile app or delivery service. Alternatively, making changes to your dining area to support social distancing could come with its own costs but might align better with the experience you want to offer. Determine what your ideal situation is, understand necessary compromises, then align your aspirations with your investment strategy. Your return on investment (ROI) will depend on the nature of the innovation. A marketing investment, for instance, should net you a 5:1 revenue-to-cost ratio if handled well.

Analyze customer feedback and data.

The next best method for establishing new financial goals is to analyze your customer data and feedback and let it inform what you want from your restaurant. Growth is only possible from this kind of analysis, allowing you to assess your strengths and weaknesses and more on with actionable ways to improve.

Use all the digital platforms at your disposal—from social media to reservation apps—to better understand your customer base, their wants, and the messaging they respond to. In fact, consistent growth and revenue are entirely dependent on your ability to communicate with and cater to your audience, so start by revamping your customer service approach.

Look for new revenue streams.

In the course of your analysis, you’ll undoubtedly run into interesting data involving niche markets, unexpected growth categories, customer behavior trends, and more. In the midst of all this, you can look for new ways you might be able to bring in money for your business. Popeyes is one example of a restaurant chain that leveraged good marketing, a niche menu item, and customer behavior to draw out $400,000 in added sales per restaurant. You, too, can leverage insights like these to build new revenue streams. From there, you can set goals for breaking into new markets.

Use the SMART method.

When setting any kind of financial goal, the SMART method is useful. SMART represents a goal that is:

Specific

Measurable

Attainable

Relevant

Time-based

All these descriptors should apply to the goals you establish for your restaurant. For example, a goal of more revenue is not measurable or specific, even if it is attainable. A goal of at least 4% higher gross revenue in 2022, however, is all of the above. Set SMART goals that provide a clear framework for gauging success through specificity.

Consult a financial professional.

Finally, setting effective financial goals for your restaurant will take a consultation with financial professionals. You can’t expect to manage all your data and investment decisions on your own, and experts are out there to help you set clear and attainable thresholds for your restaurant budget. Explore the range of experts open to you. Accountants, for instance, can help you bookkeep and audit to produce a set of realistic business goals. Meanwhile, a finance expert assists companies in navigating cash flows. Consulting with these pros and assembling a team will help ensure you establish the right goals for your business.

Securing a financially successful future

By following these tips, any restaurateur can reevaluate what they want from their operation as they navigate it through the pandemic marketplace. Guest experiences and expectations aren’t quite the same as they were. To thrive in the new normal, apply data, feedback, expert help, and more as you establish goals for winning the future of dining. – Source: FSR.

The brand is one of the fastest-growing, franchised breakfast and brunch concepts in the nation and is the only franchised brand in the daytime cafe segment that offers a full bar, complete with signature, hand-crafted cocktails . . . .

Another Broken Egg Cafe Unveils New Design at Three Atlanta Locations

Another Broken Egg Cafe is unveiling its newest cafe redesign on November 29 at three of its Atlanta locations. The Vinings, Dunwoody, and Roswell cafes are the latest Another Broken Egg Cafe locations to adopt the brand’s “New South” design. Each will host a celebration week full of daily giveaways to thank its loyal fans and show off the new look. In addition to the “New South” reimaging, the award-winning brand is one of the fastest-growing, national breakfast and brunch concepts with a full bar producing hand-crafted cocktails. After their official reopening, the cafes will host a celebration week from Monday, November 29 to Friday, December 3. Guests can win prizes and merchandise among other giveaways while experiencing the fresh design. Each day of the week features a special promotion, like free breakfast for a year, available for a limited number of guests. Another Broken Egg Cafe will continue to host celebration week events in future remodels to celebrate the “new south” reimaging and give back to its loyal customers. Another Broken Egg Cafe has recently introduced its “New South” design with the vision of a reimagined brunch experience. Many cafes are in the process of being reimaged, and moving forward, new cafes will feature this light, bright, modern design that honors the brand’s southern-inspired heritage while appealing to all who enjoy dining out for breakfast and brunch. Most importantly, the New South design significantly highlights the brand’s full bar, driving visibility and ultimately incremental sales of Another Broken Egg Cafe’s signature, hand-crafted cocktails – which have become a must-have for many brunch consumers today. Additionally, the design provides the opportunity to double the cafe’s bar seating by providing bar access to patio diners. The brand is one of the fastest-growing, franchised breakfast and brunch concepts in the nation and is the only franchised brand in the daytime cafe segment that offers a full bar, complete with signature, hand-crafted cocktails. Another Broken Egg Cafe offers a Southern-inspired menu featuring traditional menu options like Lemon Blueberry Goat Cheese Pancakes, Crab Cake Benedict, and Shrimp N’ Grits; a seasonal menu which currently features items such as the Louisiana Creole Benedict and Bloody Molly; as well as an abundance of signature cocktails including the Spiked Spiced Rum Cold Brew, Pomegranate Mule, and Abe Famous Infused Mary. Source: FSR.

FONA Expanding Manufacturing Space in Illinois

FONA International, a developer, and manufacturer of complete flavor solutions that was acquired late last year by McCormick & Co., Inc., on Nov. 15 broke ground on a multi-million-dollar, high-tech manufacturing expansion in Geneva. The expansion will create an additional 15,600 square feet of manufacturing space and will allow for future growth in manufacturing and storage in the future, FONA said. “As we look to this important milestone in our growth, we must make sure we continue to serve our customers with distinction because fundamentally, that’s really what it’s all about: Our ability to differentiate ourselves in the marketplace,” said Suzanne Roy, general manager – North America Flavor at FONA. “As we combine our capabilities, we’re already reaping the benefits and deepening our relationships with our customers.” TJ Widuch, executive vice president of order fulfillment at FONA, said the expansion fits into FONA’s focus on high-tech manufacturing and McCormick and FONA as an engine of growth. He noted that FONA’s manufacturing footprint increase will create additional jobs. “This vision of expanding our business will allow FONA to continue to grow flavors and provide great job opportunities in the Fox Valley area,” Mr. Widuch said. Founded more than 30 years ago, FONA International creates and produces flavors for many of the largest food, beverage, and nutritional companies in the world. It offers flavor solutions for the confection, grain, beverage, and performance nutrition markets. FONA was acquired by McCormick & Co. in December 2020 for $710 million in cash. — Source: Food Business News.

Digestive Health will be a Gateway to Personalized Nutrition

Many health benefits are attributed to a healthy digestive system, notably immune system support, respiratory support, cognition, vitality, and skin health. But it is currently not possible to target and activate such benefits with precision. Today, the focus is on the growth of beneficial bacteria in the gut to promote overall wellness, but one day, as more is learned, consumers may be able to personalize their gut health to activate specific benefits. Moving beyond a mass market, an overall gut health approach without the benefit of personalized nutrition will be nearly impossible. Too many individual factors influence gut health, including life stage, diet, medications, physical activity and other lifestyle choices. This point was made during a panel discussion at the Institute of Food Technologists’ FIRST virtual conference earlier this year. “We’re really just starting to learn about the human gut microbiome, and there is a lot of research dollars put toward that industry into figuring out how various ingredients can interact with an individual’s unique gut microbiome to then have a cause-and-effect relationship to ward off potential indications,” said Darren Streiler, managing director at ADM Ventures, the corporate venture arm of ADM, Chicago. A report published Nov. 11 by Lux Research, Boston, said that over the past decade microbiome research has accelerated, emerging as a hotspot for innovation, given its potential to impact several industries in the food and health value chains. But despite significant startup activity, developers have barely scratched the surface when it comes to aligning science and product development with the microbiome, according to the report. This lack of coordination is changing. For example, researchers at the University of Nebraska – Lincoln received a four-year, $1.2 million grant from the National Institutes of Health earlier this year to develop computational models to identify carbohydrate-active enzymes in the microbiome able to build, modify and break down various complex carbohydrates. The enzymes are made by gut bacteria to fully digest fibers. Bacterial digestion of the fibers produce metabolites, such as short-chain fatty acids, that have an influence on the human hosts’ health. “We aim to develop machine learning tools to help predict which human individuals may respond to which dietary fibers by analyzing their gut microbiome DNA sequences,” said Yanbin Yin, associate professor of food science at the university. Another example is Sun Genomics, a business based in San Diego that sells personalized probiotics that are recommended to customers based on a personalized gut health test. The custom-formulated probiotic includes probiotic strains, prebiotics, and natural botanicals that all work together as a positive community to support an individual’s microflora, according to the company. As research generates greater knowledge about personalized nutrition and businesses bring scale to the category, opportunities for food and beverage makers will emerge. The market is on the cusp of delivering personalized functional benefits through food. This advance will significantly grow the market for functional foods and ingredients. — Source: Food Business News.

The Seattle-based chain could be the next to join the growing crowd of publicly traded restaurant companies . . . .

MOD Pizza Submits Draft Plans for IPO

MOD Pizza Inc. on Monday joined the growing parade of restaurant companies to announce plans to go public. The Seattle-based chain announced it has confidentially submitted a draft registration to the Securities and Exchange Commission for a proposed initial public offering of its common stock. The number of shares and price have not yet been determined, but the IPO will take place after the SEC review, subject to market and other conditions. Founded in 2008 by Scott and Ally Svenson, MOD — an acronym for Made On Demand — was one of the first in what was once a crowd of fast-casual pizza brands, where guests are invited to choose their toppings as they walk the line and pizzas are baked in minutes in an 800-degree oven. This year, the brand surpassed 500 units, mostly company-owned, though MOD has some multi-unit franchisees. Over the years, the company has grown with the help of equity financing, including $160 million from Clayton, Dubilier & Rice in 2019. MOD has become known for its people-first culture, inclusiveness, and promotion from within, which has contributed to a low turnover rate.  The chain sells “Squad Cakes” to raise money for a Bridge Fund, an employee assistance program. The Svensons have long been advocates for hiring the formerly incarcerated and earlier this year announced a partnership with the National Restaurant Association Educational Foundation to support job placement, retention, and career advancement for those coming out of the justice system. The pandemic year wasn’t kind to fast-casual pizza brands like MOD, which were initially built around an order-in-restaurants model. Earlier this year, MOD said it saw a 5% decline in systemwide sales to $461 million for fiscal 2020. But MOD last year added curbside to-go and third-party delivery and invested in digital marketing and a loyalty program. In October, the chain rolled out its first national advertising campaign. It has been a hot year for restaurant company IPOs.  Sweetgreen, Portillo’s, Krispy Kreme, Dutch Bros, and First Watch have gone public in 2021. Fogo Hospitality Inc., the parent of Fogo de Chao churrascaria, in November, filed an S-1 with the SEC for a proposed IPO. And Panera Brands also announced plans to return to the public markets through a special purpose acquisition company, or SPAC, led by restaurateur Danny Meyer. UPDATE: This story has been updated to clarify that MOD Pizza is mostly company-owned, though the company does franchise. – Source: Fast Casual.

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