LEADING BRANDS ARE RETHINKING HOW THEY RECRUIT, RETAIN, AND VALUE THEIR BEST EMPLOYEES . . . .
Navigating the Restaurant Labor Shortage Requires a NextGen Approach
According to Bureau Labor of Statistics numbers released in early October, food services and drinking establishments added 60,000 jobs in September. The hospitality sector now employs 11.8 million people, or about 500,000 jobs shy of pre-COVID levels.
Anita Adams, the CEO of Black Bear Diner, echoes a lot of what’s been shared from the front lines in recent weeks as the conversation matures—the chain is essentially staffed back to the levels it was pre-pandemic. However, filling those jobs from the vacuum that was March 2020, where restaurants shed north of a million jobs in ensuing weeks, hasn’t always been as simple as plugging in and getting back to work.
Turnover at the hourly level, she says, remains as volatile as it’s been (this number has reached as high as 200 percent for some brands). But managers sit on the opposite side. “We were very aggressive in protecting our managers and had a lot of financial incentives, stay bonuses, and just a lot going on as we were working through the last couple of years,” she says. “We’re sitting actually at the lowest turnover we’ve ever had in our history on the management side. That component we feel good about.”
While September’s upward movement was a welcomed sign, there’s still a lot of ground to make up. The economy added 263,000 jobs last month and the overall unemployment rate sat at 3.5 percent. Also, restaurant industry wage growth climbed 0.3 percent versus August and is 8 percent higher over the past year.
What this paints is a labor pool where there are fewer workers to pull from and the cost to recruit and retain has skyrocketed. In many cases, it’s lowered the number of workers per unit as brands try to balance costs. Also, it’s a key trigger for why prices at the full-service menu are up 8.8 percent for the year (this was 9 percent in August) and limited service 7.1 percent higher. Food away from the home, in general, increased 8.5 percent, year-over-year, in September, and food at home continued to outpace at 13 percent.
At Smokey Bones, CEO James O’Reilly says, the challenge splits into parts: wage inflation and population. Beyond employees losing their restaurant jobs at COVID peaks, job surfing has accelerated. “We see, at least in our company, the back of the house, you can say the starting wage is $14 and they’ll leave us for $14.50. We’ll offer them $14.75 and they might come back.”
It’s a supply and demand dynamic unfolding across the country right now, where the leverage is now in the employees’ grasp.
In July, 4.2 million Americans (2.7 percent of the workforce) quit their jobs. According to a survey from Joblist, more than a third of employed job seekers (36 percent) reported they were planning on quitting their jobs in the next six months. It’s well below where it once was—the figure had climbed as high as 73 percent in August 2021—and illustrates how job-searching behavior has changed dramatically in the last year, Joblist says. Whereas the majority of employed job seekers were planning to quit imminently last August amid a strong job market, most now seem to be browsing opportunistically.
Yet hospitality continues to face pressure. Hospitality and retail workers were the most likely to say they were looking for a higher-paying job (56 percent) in the survey. Hospitality workers were also the most likely to claim they were considering switching industries (36 percent) or working more hours to offset costs (25 percent) as inflation blares.
O’Reilly says the fact the industry, years into COVID’s recovery, remains 500,000 roles below 2019 marks (a climate that wasn’t easy to hire in, either), has, naturally, driven wage inflation to unseen levels. You have to pay more to staff up, and turnover is spiking, to Adams’ point, for like-minded reasons. Meaning the cycle keeps repeating and the dollar signs keep mounting. Employees have options to browse and, for restaurants, it’s a reaction to quickly filling roles and trying to navigate the fresh realities of what it takes to run an operation with off-premises in the fold.
“We’re still running over 100 basis points higher than we want to be on labor right now and it’s not really self-inflicted,” O’Reilly says. “It’s mostly market inflicted.”
Liz Moskow, a food futurist, and principal at consultancy Bread & Circus aren’t caught off guard by any of this. She’s seen it as much as a consumer as she has from the vantage point of someone with a Culinary Institute of America pedigree who has over two decades of the brand, culinary, hospitality, and CPG experience.
Throughout the summer, Moskow observed more employees in restaurants, just as Adams highlighted. Those vacant, skeleton-crew operations of the past year appear a bygone thing. But the re-staffed crews seem apathetic, she says. “To me, it’s causing more distress to the consumer when you see poorly trained employees because it’s high turnover and they’re there for a short period of time. They’re standing around not having that hospitality hustle,” Moskow says. “And so, you see 10 people behind the make line and two of them are talking to each other and one is very slowly replenishing something and then the other one is maybe going over to a table to check on something. You see more messy tables in someone else’s section.”
From the consumer’s view, she adds, it can be more frustrating to witness employees not doing their job than to cut an understaffed restaurant slack. Not to mention, they’re paying more. And the same sentiment rings true for guests who feel second-fiddled to off-premises guests. Say those who walk into the lobby and wait around for service while bags of food get packed in front of them. Or somebody who steps inside a quick-serve and cedes their spot in the make-line to a delivery driver.
“You had this empathy in the restaurants,” Moskow says of the landscape a few months ago, when everybody was understaffed. “You need people to think they’re doing the best they can. That script has quickly flipped. Well, you have bodies and now I’m angrier because they’re here and they’re all being paid.”
She feels operators would be better served to pay star employees more to take on additional tasks. And to worry less about hitting a specific number of workers versus getting the right kind of employees in the proper jobs, and rewarding them.
“How do you get those star employees to say? Maybe it pays them double and you need less. But the last thing you need is 10 college-aged kids who are trying out hospitality just because they’re making $17 an hour and they just don’t care,” she says.
A handheld revolution
Rom Krupp, founder, and CEO of dining and hospitality platform OneDine, says tech innovation might be headed for a slowdown in the coming months. COVID unleashed a torrent of solutions and technologies over the past couple of years, he says. But instead of more flooding in, it’s likelier it’s going to take three to five years to unpack what’s been introduced.
“I’ll tell you this,” he says. “We’re still 95 percent inbound sales. People are trying to still catch up to COVID. I think the next wave [of innovation] might be further out, like five years out.”
However, there is one technology that’s begun to proliferate full service as operators work to balance labor challenges while still delivering a sit-down experience.
“The hottest thing we do is handhelds,” Krupp says. “People are just dying for labor optimization, table turn optimization, order to table, pay-to-table technology. … In the next five years, I think it will become a standard in the U.S. There won’t be a restaurant, except maybe the fine, fine dining, where you’re not going to get your order taken next to the table and paid right there.”
Broadly, it’s a sentiment plenty of industry pundits share. In an interview with QSR, Meredith Sandland, CEO of Empower Delivery and the co-author of Axiom 2022 Business Book Award Winner, “Delivering the Digital Restaurant,” noted restaurant technology has begun to zero in on near-term solutions versus some of the flashy, long-term angles you saw last year. “As we’ve seen in cars, electrification and smart augmentation of human operators are pre-conditions to automation,” she says. “I think we will see increased adoption of electric cooking equipment, smart ovens, and software that increases human productivity in the restaurant.”
This mindset has been clear at Chili’s under new CEO Kevin Hochman, a former KFC U.S. president. Earlier in the year, Chili’s suspended its test of “Rita the Robot”—a self-functioning machine that could play host, waiter, and busser. Now, the company plans to accelerate what it calls “Kitchen of the Future 3,” or equipment that improves the speed of service and table turns. Chili’s is also testing technology that can enable guests to seat, order, and pay on their own, and it’s working to enhance its mobile site interface for off-premises customers.
“We’re going to stop some of those projects that we just didn’t have a line of sight to a return on the business, but we’re going to double down and accelerate the ones that we think will have a more meaningful impact on restaurant margins and a quicker impact on our business,” Hochman said.
Black Bear is currently testing handhelds and Adams says servers are buying in. “One of the things that we had an ‘aha’ about is because of the turnover [we’re seeing], what it’s forcing is when you take the order on the handheld, it prompts you through our menu,” she says.
So if a guest picks a certain breakfast dish, for instance, it will direct the server to ask about potato choice. “In some ways, it’s helping because now as a server, I don’t necessarily have to thoroughly learn that menu to recite it to the guest. A handheld is walking them through that, which was a bit of an unintended consequence. So we’re starting to feel like technology like that makes it easier for the workforce and we can get them engaged and walking through the steps.”
Black Bear also deploys QR code pay-at-the-table to further ease its front-of-the-house tasks and allow employees to focus on hospitality.
It’s a conversation that’s progressed of late. “We pride ourselves as this hospitable, engaging environment,” Adams says. “And I was always resistant to that kind of technology because we want that one-on-one experience with the guest. But I think things are just evolving.
Alongside server handhelds, Black Bear introduced beverage runners. Drinks are getting to the table before the server is even done taking the order. “To me, that’s a key component of the high guest experience,” Adams says. “So though we’ve had a harder time measuring some of the speed of service elements, there are these kinds of things that are cropping up that are bigger wins.”
Smokey Bones, O’Reilly notes, is in the process of essentially launching a mobile POS platform. Before the chain followed a blueprint all too familiar in this industry—the server walks up to the table with an order pad, writes it down, and walks back to a POS station, which Smokey Bones has six or seven of in each location. Then, they manually enter the order into the POS. “Obviously, you can picture the time that takes to do, and also, it’s a failure point in the process when the server has to write the order down and then reenter it. That can create a failure point,” he says.
O’Reilly believes the platform will be a total “win-win” in regard to the point Moskow made earlier of leading with your best, most-engaged people. Orders are taken at the table on a small mobile tablet that emulates the POS they already know. “So the training is very easy,” O’Reilly says. “But the number of tables that a server can take with that technology is also greater than they can take without it. It’s so much faster. And if a server has more tables [O’Reilly estimated this as being able to go from eight to 10 or so], they get more tips, and they make more money. We’re not paying that, right? They’re making more tips from the guests and so they become more productive.”
What Smokey Bones has found as well, he adds, is the servers who have fully embraced the system (roughly 80 percent) happen to be the most engaged. It makes the apathy Moskow mentioned clear to managers.
Adding two tables isn’t a huge number, but it’s a sizable lift from a productivity standpoint. “More engaged, they make more money, the guest, on average, gets a better experience because they’re dealing with our most engaged people,” O’Reilly says. “And it’s faster. We have more throughput, especially during peak because the order goes directly from the table right to the kitchen without the extra steps.”
Adams echoes O’Reilly’s observation. “I think the reality of it,” she adds, “is [handhelds] take the burden off of them as well. We’re finding that our servers, even though they have more tables, they can engage because getting beverage is a time suck for us, and it’s coffee and organic juice and water, and so on. So we think it’s actually enhancing that relationship with the table.”
“If you’re a server and you’ve got that pad of paper in your back pocket and you’re walking back to the terminal, and another table is upset because they didn’t get their fork, and then another table before you even get to the station wants a drink refill, it just kills your speed of service,” O’Reilly continues. “We want our servers to have more time to engage.”
Adams jokes there’d be a “mutiny” if Black Bear tried to pull handhelds at this point. The best servers realize it works.
O’Reilly reiterates tips are higher and that’s going to only aid the labor line. Smokey Bones has tracked guest experience each day the handhelds have been on the floor as well. Thus far, data showed the experience rated at least the same, if not slightly better, among guests simply because they’re getting food quicker.
Black Bear recently rolled an eLearning platform with Wisetail to help employees build community.
Tech as the fuel
O’Reilly’s comment on taking the POS from stationary to mobile is one Krupp continues to work on. In general, he doesn’t believe restaurants need a brick-and-mortar tech stack anymore. As an example, OneDine recently tackled a project where it completed a baseball stadium—23 concession stands, eight kiosks, 12 handhelds for VIP suites, 7,000 QR codes, and 180 pickup cubbies. And OneDine activated it without installing a single piece of software in the building. Everything ran on secure browsers.
Krupp touts a solution where the commerce cloud is the lone engine that drives 100 percent of transactions for restaurants; where the POS is no longer an endpoint but a floating, integrative hub. Additionally, a world where one identity for a consumer can translate across channels and enable full-service brands to better recommend and understand guests.
An example Krupp gives is of a customer who walks into The Cheesecake Factory. What if the moment they sat down they could know what they want to eat in 30 seconds, despite the encyclopedia-thick menu? “The restaurant just gained 7, 8, 9-minute table turn times without even introducing and self-ordering or self-payment,” Krupp says. “They did it just be making it easier to decide what to eat.”
Mostly today, because consumer data is distributed, you can have 100 customers of the same POS companies or online ordering platforms, and 100 profiles. Or 100 times a restaurant needs to set preferences and 100 different systems to conduct machine learning.
Krupp feels that could change, and it will all cascade to labor productivity.
Moskow has another idea as well. Could restaurants leverage either their hostess or food runner to play a concierge, backup role to the technology? This way, when somebody places an order, there’s an employee to check-in. Did they order and no silverware showed up? Were they trying to find an answer to a question on allergies or protein replacement? “To me, I feel like we shouldn’t discount these technologies [order and checkout at the table, etc.] … They’re helpful for the server and also the customer. But we have to make sure we’re not missing the touchpoints as fewer employees are multitasking different roles.”
In terms of the workforce itself, O’Reilly says Smokey Bones has diverted younger employees toward positions like greeters and off-premises takeout. Many came over from fast food where they were comfortable expediting orders to drivers and to-go customers. “It’s not as complex a position and they’re OK with lower pay, $13 an hour, $12 an hour. They can come in and greet people, assign tables, things like that,” he says.
The most successful servers, O’Reilly adds, tend to be a bit older and have experience hustling in hospitality.
So how do you foster engagement? Black Bear recently rolled out an e-learning platform with Wisetail. The company boosts experience with social, communication, gamification, and engagement features “geared to build a community of service-savvy employees.” It’s used by Cheesecake Factory and quick-service Noodles & Company, among others. Brands can deploy training company-wide, standardize practices and promote cross-training, and improve oversight. But what Adams has watched lately is the community element. The platform allows employees to share stories with social, contribution, and profile features, or “create a family of teammates.”
“It houses not only training, but it’s also our communications vehicle,” she says. “There’s this whole element of engagement where our hourly team members are on this as well as our managers, and we have the ability to manage who can see what. We have this whole group of younger, I would say, 30 [years old] somethings or less, who they talk to each other through this platform and they’re the ones who always comment and love that we’re doing this.”
It’s developed a core group that, at any point in time, Adams can log in and see how many people are engaging. “I find it fascinating,” she says, “because, to me, it’s just more and more technology on that social side and there are people who are engaged in
Placing a divide between off-premises and dine-in, for customers, has been an important evolution in recent months.
Offering a bridge for workers to connect has only become more vital, O’Reilly adds. A good example is taking place today at quick-serve Portillo’s, where an internal survey returned that 70 percent of employees said they had a best friend at work, which drilled home the company’s values. As of Q1 2022, Portillo’s hourly turnover rate was 20–30 percentage points below the industry average and the chain boasted an internal promotion clip of 80 percent.
In the last year or so, O’Reilly says, it’s become evident a lot of people left the restaurant industry because the COVID experience for hospitality workers was “very, very hard.”
“And a lot of people just said, I’m done with this industry. It’s too hard. Too much of a roller coaster,” he says. “We lose managers now to non-restaurant positions, not other restaurants.”
Adams agrees restaurant workers are fatigued and burned out by many of the pandemic’s tasks, like trying to police protocols and grapple with ever-changing mandates. It’s why recognition, employee care, flexibility, and as Adams explained, creating a sense of community within the restaurant itself, go a long way beyond the paycheck.
But as always, it starts with applicant flow. Smokey Bones uses platforms like Snag and Indeed to locate employees, yet one thing it’s worked on of late is to watch the process closer. If an applicant comes in, the brand learned it has to return the call within an hour or it’s going to lose that person, O’Reilly says.
“Even for an interview,” he notes.
Black Bear is shortening the process, too. It’s tapped text-to-apply and made it so candidates don’t have to sift through a long application. “The attention span is small,” she says. “And you’ve got a job. So we’ve tried to shorten and abbreviate at least the initial hiring to get them on board.”
One thing Black Bear stopped doing is paying sign-on and referral bonuses to hourly employees—a common restaurant tactic through the pandemic build-back. Adams says it led to a lot of filled positions, but not necessarily the quality of worker Black Bear was looking for. “We need to really focus on who is actually getting the job done a little bit more than those who just have one foot in and food out,” she says.
“We think there’s enough flow and we just have to figure out how we do a better job in that initial 90 days,” Adams adds. This has come a long way from the mid-2020, early 2021 days when brands were doing everything from giving away iPhones to hiring car side just to get bodies into restaurants.
“Now we’re very much focused on that onboarding process and there’s a big culture component to that and making sure there’s shoulder-to-shoulder training where we’re not just turning folks out and they’re uncomfortable and then they’re going I’m out of here, this is too hard,” Adams says.
Black Bear uses TalentReef to scan boards and has also implemented daily pay, where there’s been about 17 percent adoption of workers actively opting in (taking three draws in advance) to get paid early.
Smokey Bones is headed toward early wage access as well. “All the data on that seems to suggest it helps with turnover,” he says.
New role thoughts and KDS power
Building on the notion of diversifying jobs within restaurants, Moskow suggests hiring a position that supports these culture-driven points. Could you create something like a “social media concierge” where an employee goes table to table, front to the back of the house, and simply records the positive experiences happening within the store? A way, in other terms, to articulate how a brand’s culture is working in a medium that consumers already engage with. “So you’re selling culture to your potential employees instead of selling them a 50-cent bump in pay,” Moskow says. “You’re speaking to the people in their language. You get to be online and you’re speaking in that regard for recruitment.”
Imagine a Smokey Bones social post where somebody is conducting a rib tasting and talking about the on-site perks and what a cool gig this is. “That might entice me to work there over somewhere else, for sure,” Moskow says.
Meanwhile, making jobs inside restaurants appealing—more guest-facing and less menial—continues. Black Bear modified lines and routed KDS specifically to support off-premises so it could focus on the dining room. This way, it’s not trying to shuffle the guest who got in the car and paid $5 a gallon of gas to get there. Smokey Bones has done this as well, with dedicated, mini expediting kitchens, if you will, for off-premises. There’s a KDS that routed all of the off-premises to one station.
Black Bear is even retrofitting some existing lines where it will take 25 percent off and create a mini one as well. It can still use it as before if the dining room gets busy, but generally, it will instead help move off-premises orders out of the queue and make it so customers don’t feel ignored. The businesses can operate as separate entities that don’t detract from one another.
“We heard it from our guests,” Adams says. “They’re sitting in the dining room and maybe it’s not that busy and they’re seeing this screen, and we have this expediting screen and we have 20 bags lined up, it [bothers them]. We’re trying to separate that. We’re giving all of our love to the guest who is there and they’re not being impacted.”
Smokey Bones recently built a Utica, Michigan, location that pulled the off-preemies out as a separate part of the restaurant. It has its own counter, POS, and digital menu board. Even a drinks cooler that’s been popular with delivery drivers who want to buy one for the road. But for those picking up, aggregators or not, they don’t have to walk through the lobby and across the restaurant as they once did in older units. “It’s making the experience better for everyone,” O’Reilly says. – Source: FSR.
Restaurants have trimmed their weekly operating hours by 7.5%, or 6.4 hours, compared with pre-pandemic schedules, according to a new report from Datassential . . . .
Restaurant Operating Hours are Still Shorter Compared to 2019, Report Finds
It’s not just your imagination. Restaurants aren’t open as long as they used to be.
Eateries have trimmed their weekly operating hours by 7.5%, or 6.4 hours, compared with pre-pandemic schedules, according to a new report from Datassential.
The food analytics firm found that 59% of the more than 763,000 U.S. restaurants are operating on shorter schedules in October than they were in 2019. Every state except Alaska saw a decrease in restaurants’ average weekly operating hours.
Datassential co-founder and CEO Jack Li attributed the scheduling changes to a few factors. Restaurants are still struggling to find enough workers to staff their locations, and cutting hours is one way they’re addressing that challenge. The slow return to the office means weaker demand in business centers. And areas that closed down aggressively during the pandemic are still bouncing back. States with Democratic governors saw steeper reductions to restaurants’ hours than those led by Republicans, according to the report.
Independent restaurants have been hit even harder, losing 7.5 weekly hours on average. Chains with more than 501 locations, by contrast, have cut their schedules by an average of four hours per week, the report said.
“Chains have things like robotics, automation, and technology upgrades that can largely enable them to make do without as many people,” Li said.
But some chains have seen more dramatic changes to their schedules. Denny’s weekly hours have fallen by nearly a third, while Texas Roadhouse, IHOP, and Subway have all seen their averages shrink by double digits.
A representative for Texas Roadhouse said that a number of its restaurants located near office buildings opened for lunch on weekdays prior to the pandemic. Since lockdowns, most of those locations cut their lunch hours to focus on dinner.
Sandwich chain Subway said its shorter hours were due to staffing issues.
“While many restaurants have increased their hours to 2019 levels, for some franchisees, the biggest challenge to extending their hours continues to be labor,” a Subway spokesperson said in a statement to CNBC.
IHOP and Denny’s did not respond to requests for comment from CNBC, but their significant drops in operating hours are likely due to the reduction of diners and other eateries that are open for 24 hours. The reduced hours are also hitting the New York metropolitan area’s restaurants, which on average have slashed their weekly schedules by more than nine hours, Datassential found.
In one ZIP code of Manhattan’s East Village, three-quarters of eateries reduced their hours compared with 2019, Datassential found.
Among those is Veselka, a neighborhood staple, which was open 24 hours a day, seven hours a week since 1991 until the Covid pandemic hit. Now, the restaurant still shutters every night by midnight and reopens at 8 a.m. even though New York City has lifted its dining restrictions.
Co-owner Jason Birchard told CNBC that the main issue has been finding and retaining workers, although some of the decisions also came from a reluctance to serve late-night customers.
“Early on, the crowd that was late out at night was just a crowd that I didn’t want to market to. It was just an obnoxious drunk crowd, I hate to say it,” he said.
The addition of outdoor dining tables has helped Veselka offset the lost sales from closing before midnight. The restaurant has also seen a surge in traffic since Russia invaded Ukraine as customers sought to show their support for the invaded country. (Veselka raised $250,000 for relief efforts by donating a portion of its borscht sales.)
After it closes temporarily for renovations in early 2023, Veselka will resume its 24/7 service, Birchard said.
In Seattle, restaurants have shaved an average of 7.7 hours from their weekly hours. Daisley Gordon, the owner of Cafe Campagne, also said labor was the reason for going from operating seven days a week before the pandemic, to 4½ days.
“I feel like if we were open seven days a week, we’d be happy with the revenue,” Gordon said.
The restaurant has been searching for enough cooks to staff its kitchen, he said, and is slowly adding to its staff. Gordon predicts that Cafe Campagne will be open seven days a week by the spring when it’s had enough time to train new workers.
Datassential’s Li said he believes a few factors will dictate if restaurants expand their operating hours: the labor market and broader economic environment, as well as the shift in consumer behavior.
“My guess is the reduction in the restaurant hours is going to be with us for at least a little while,” he said. – Source: Restaurant Business.
NASCAR star’s menu is available at nearly 200 units through third-party delivery platforms . . . .
Hooters, Racer Chase Elliott partner on Virtual Chicken Tender Brand
Hooters of America LLC is teaming with auto racer Chase Elliott for a virtual chicken tender brand that has launched at nearly 200 restaurants, the company announced.
The Atlanta-based company, which calls itself “The Official Home of Race Fans,” and the 2020 NASCAR Cup Series champion have introduced Chase Elliott’s Chicken Tenders.
The initial 196 Hooters locations are offering the menu exclusively on the DoorDash, Grubhub and Uber Eats delivery platforms.
“I’m excited to launch a menu that fuels fans’ love for delicious Hooters chicken, starters, and sides,” Elliott said in a statement. “I have the best fans in the world, so I know they will enjoy trying this cool new concept and make an order for race day or during the week like I do.”
The Chase Elliott’s Chicken Tenders are available in 14 sauce flavors. The signature products are offered with ranch or bleu cheese, along with popular sides such as waffle fries or tots.
Additional boneless wings, chicken sandwiches, buffalo chicken salads, and beverages will also be available in the virtual restaurant, which also offers fried pickles and mozzarella cheese sticks appetizers.
“Virtual concepts have been an important part of our off-premises growth strategy since 2019,” said Marc Butler, Hooters senior vice president of strategic planning and off-premise. “Hooters is very well known for our great wings, but awareness is lower for other menu segments such as tenders, burgers, and seafood.”
Butler said including Elliott in the virtual concept would help Hooters create greater brand awareness, attract a new audience and grow the business.
Bruce Skala, Hooters chief marketing officer, added that “as the most popular driver in racing today, Chase has a fantastic connection with our restaurant clientele no matter where they are ordering our famous foods, so it’s natural we’d create a line extension together.”
As an incentive with the launch, DoorDash users can get a 30% savings, up to $12, on their first order by using the code NASCAR30.
Hooters of America operates and franchises more than 410 Hooters restaurants in 38 states and 24 countries. – Source: NRN.
The chain will acquire the restaurants early next year as its corporate locations continue to outperform franchisees . . . .
Texas Roadhouse to Buy 8 More Stores from a Franchisee
For the second straight year, Texas Roadhouse is buying eight restaurants from a franchisee.
Executives did not reveal the purchase price Thursday, nor did they mention the identity of the seller. But they said it is part of the company’s ongoing efforts to return franchised stores to the corporate fold.
Earlier this year, Texas Roadhouse bought eight restaurants in South Carolina and Georgia for $33.1 million. It currently owns 545 of its 607 U.S. restaurants, or about 90%, and has said new openings will be company-owned.
The latest deal is expected to close early next year.
“We’re always talking with our franchise partners,” CFO Tonya Robinson said during an earnings call Thursday. “Some we start down the path of … if it’s the right time for them and their owners to consider that buyback.”
She declined to discuss multiples and said that negotiations take into account a number of factors, including the stores’ earnings, sales, management and the buildings themselves.
“Overall, it’s a good strong group of restaurants,” she said of the eight units, “pretty on average with what we see from a company perspective, from a sales perspective.”
In general, company-owned Texas Roadhouses perform better than franchised ones. In the third quarter that ended Sept. 27, same-store sales rose 8.2% year over year at company-owned stores compared to 6.7% at their franchised counterparts.
Robinson added that buying stores tends to be incremental to sales and also helps lower costs because they give the company more volume.
Other full-service chains—most notably Chili’s—have been taking the same approach, feeling that corporate ownership is the best way to improve operations and returns.
For Louisville, Ky.-based Roadhouse, two such deals in two years “feels like a really good pace,” Robinson said. “We think we have a continued opportunity for the next couple of years to continue to do that.” – Source: Restaurant Business.
With a few quick add-ins, these Spanish-inspired sandwiches hit the morning mark . . . .
Spain’s bocadillo stands out with its high-quality simplicity. Straightforward sandwich ingredient combinations resonate particularly well at breakfast, as patrons will gravitate to a thoughtfully curated classic offering. Ernesto’s Cafe in New York demonstrates this with its daytime menu, featuring breakfast sandwiches like the T.E.C., with housemade txistorra sausage (a type of chorizo), egg, and Mahon cheese on pan de cristal, a signature bread from Spain that is crisp and airy. Equally appealing is its Bocadillo de Tortilla with the egg-centric Spanish tortilla, piquillo peppers, and aïoli on pan de cristal. Builds such as these can stand out against the mega sandwiches that pile on the ingredients but sometimes miss the mark with muddled oversaturation.
Chefs can win at breakfast by looking at the bocadillo. No need to reinvent the carrier—both pan de cristal and the traditional baguette are ideal carriers for on-the-go breakfast, offering sturdy structure throughout the rigors of travel.
Below, we highlight the impact of three classic breakfast ingredients—meat, egg, and cheese (M.E.C.)—on a crispy baguette. This classic flavor combination approach needs minimal explanation and yields maximum menu impact.
Carnitas Jack Bocadillo: Thin omelette + carnitas + jalapeño-Jack cheese + baguette
Ham and Pimento Bocadillo: Thin omelet + shaved smoked ham + pimento cheese + baguette
2 SCRAMBLED EGG
Sausage Scramble Bocadillo: Soft-scrambled egg + breakfast sausage crumbles + cheddar cheese + baguette
Chorizo-Potato Scramble Bocadillo: Soft-scrambled egg + shredded chorizo hash browns + Cotija cheese + baguette
3 FRIED EGG
Spicy Maple Bacon and Egg Bocadillo: Fried egg + maple bacon strips + whipped Sriracha cream cheese + baguette
Everything Brisket and Egg Bocadillo: Fried egg + shaved everything spice brisket + Havarti cheese + baguette
Prosciutto and Grilled Cheese Ciabatta
Here, split ciabatta is rubbed with tomato marmalade, then layered with prosciutto and fontina and cooked in a skillet until crispy. Two fried eggs help move it into the breakfast realm. – Source: – Flavor and the Menu.
McDonald’s Partners With Krispy Kreme
McDonald’s and Krispy Kreme Donuts, Inc. are partnering to offer the latter’s donuts at nine locations in Louisville, Ky. Beginning Oct. 26, Charlotte, NC-based Krispy Kreme’s donuts will be delivered to participating McDonald’s locations daily and will be sold individually or in six packs in-restaurant and drive-thru only.
Three varieties will be offered: The Original Glazed Donut, chocolate iced with sprinkles, and raspberry filled.
McDonald’s said it hopes to attract new morning customers with its limited test run of Krispy Kreme donuts. Krispy Kreme already sells donuts it makes in-store to third-party locations such as mass merchandise retailers and convenience stores.
“McDonald’s is always looking for ways to give our fans more of what they crave, and we often conduct tests to inform future menu decisions,” McDonald’s said. “This small-scale test will help us understand how offering new bakery items like Krispy Kreme could impact operations in our restaurants.”
The partnership is the first for Krispy Kreme and McDonald’s in the United States.
“This is our first partnership with McDonald’s in the US as we constantly look for new ways to increase access to fresh donuts through our delivered fresh daily network — a key element of our omnichannel strategy to attain 50,000 points of access globally,” Krispy Kreme said.
McDonald’s has been paying more attention to the breakfast daypart in recent years.
In a June 2021 presentation at the virtual Sanford C. Bernstein Strategic Decisions Conference, Christopher J. Kempczinski, president and chief executive officer of McDonald’s, described breakfast as “probably the most time-sensitive, convenient-oriented daypart.”
Mr. Kempczinski attributed the growth in breakfast to new menu items, including baked foods. In late 2020, McDonald’s added apple fritters, blueberry muffins and cinnamon rolls to its all-day menu in the United States. The introductions marked the first addition of bakery items to the fast-food restaurant’s core menu in over eight years, according to the company. More recently, the company added the Glazed Pull Apart donut. Other baked foods already on the menu include cookies and pies. — Source: ©ROLAND MAGNUSSON – STOCK.ADOBE.COM and Krispy Kreme Donuts, Inc.
Whole Foods Market unveils top trends for 2023
Plant-based foods, increased interest in sustainable foods and practices, and the return of popular classics highlight potential new trends in 2023, according to a new report from Whole Foods Market. The report is created by the retailer’s Trends Council of food industry experts.
“We’re thrilled to see things like baked goods with upcycled pulp from plant-based milk and ingredients like farmed kelp continue to gain popularity,” said Sonya Gafsi Oblisk, chief marketing officer for Whole Foods. “From product labels that include sustainability efforts to poultry and egg suppliers that are leading the way in animal welfare, many of this year’s trends predictions showcase brands on a mission to make a true impact.”
Whole Foods has high expectations for some emerging ingredients, with yaupon taking its top spot. As North America’s only native caffeinated plant, the holly bush ingredient is becoming increasingly popular for its earthy tones and energy benefits, particularly in cocktails and other beverages.
Increased consumption of milk alternatives is creating opportunities for upcycled byproducts in the baking industry, the company’s No. 2 trend. Whole Foods expects to see an increase in the use of oat, soy, and almond pulp in a variety of applications, including alternative flours, mixes, and confectioneries.
Other sustainable practices also account for some of 2023’s top trends. In particular, the company emphasized growing concerns over animal welfare in the production of chicken and eggs and the importance of manufacturers including sustainability messaging on their labels.
Environmentally conscious foods ranked highly in Whole Foods’ report, with plant-based pasta coming in as the No. 3 trend. With the increased demand for plant-based alternatives broadly, the company sees an opportunity for growth in the pasta category that has a new generation of products popping up on shelves, including spaghetti squash and banana-based pasta. Products featuring kelp were also in the year’s top trends, offering a nutritious alternative that can be produced sustainably with ease.
In addition to their use in pasta, some fruits are trending upward with new applications. Dates have become an increasingly popular sweetener ingredient in pastes and syrups, and avocado oil is seeing greater use in packaged foods as a replacement for other oils due to its higher oleic fatty acid content.
Manufacturers also are reinventing classics amid increased demand for nostalgic foods, according to Whole Foods. One of the report’s final trends, the company expects to see health and wellness versions of childhood favorites like pizza bites and cereals. — Source: Whole Foods Market.
Former Kerry QA Exec Admits to Salmonella Coverup
A former quality assurance director at Kerry Inc. pleaded guilty Oct. 21 to charges related to the manufacture of Kellogg’s Honey Smacks cereal linked to a 2018 outbreak of Salmonella poisoning.
The director, who oversaw quality assurance for Kerry until September 2018, pleaded guilty to three misdemeanor counts of causing the introduction of adulterated food into interstate commerce. He oversaw the sanitation programs at various Kerry manufacturing plants, including a facility in Gridley, Ill., that manufactured Kellogg’s Honey Smacks ready-to-eat cereal for Battle Creek, Mich.-based Kellogg Co.
In pleading guilty, the QA director admitted that between June 2016 and June 2018, he directed subordinates to not report certain information to Kellogg about conditions at the Gridley facility. In addition, he admitted that he directed subordinates at the Gridley facility to alter the plant’s program for monitoring for the presence of pathogens in the plant, limiting the facility’s ability to accurately detect unsanitary conditions.
“Food safety professionals cannot conceal potentially dangerous problems from customers or government regulators,” said General Brian M. Boynton, principal deputy assistant attorney and head of the civil division of the US Department of Justice. “The Department will continue to work with its law enforcement partners to hold accountable those who engage in such conduct.”
Lynda M. Burdelik, a special agent at the US Food and Drug Administration’s criminal investigations Chicago field office, said, “Today’s announcement reinforces that if an individual violates food safety rules or conceals relevant information, we will seek to hold them accountable. The health of American consumers and the safety of our food are too important to be thwarted by the criminal acts of any individual or company.”
In June 2018, the FDA and the Centers for Disease Control and Prevention (CDC) announced that an ongoing outbreak of salmonellosis cases in the United States could be traced to Kellogg’s Honey Smacks cereal produced at Kerry’s Gridley facility. In response, Kellogg’s voluntarily recalled all Honey Smacks manufactured at the plant since June 2017. The CDC eventually identified more cases of salmonellosis linked to the outbreak, with illness onset dates beginning in March 2018. The CDC did not identify any deaths related to the outbreak.
The CDC in September 2018 concluded its investigation into the outbreak in. The agency said a total of 135 people infected with the Salmonella strain were reported from 36 states between March 3 and Aug. 29. Thirty-four people were hospitalized, but no deaths were reported.
The matter was investigated by the FDA’s office of criminal investigations. The case was prosecuted by Cody Matthew Herche, trial attorney, and James T. Nelson, senior trial attorney, of the DOJ civil division’s consumer protection branch. – Source: Kellogg Co.
5G provider Kroo plans to expand its cellular network by leveraging commercial real estate . . . .
Panda Express Lends Rooftops to 5G Expansion
Panda Express is planning to leverage the rooftops of its restaurants to expand 5G connectivity.
The parent to the Rosemead, Calif.-based restaurant chain said last week it has signed a multi-year agreement with Kroo, a 5G provider, to help expand the 5G network. The agreement will allow the restaurants to provide 5G cell service to guests and surrounding neighbors.
The Federal Communications Commission in 2019 opened up the ability to build a wireless network without a spectrum license in a move designed to close the “digital divide,” or unequal access to technology, particularly in rural areas. Kroo works with real estate owners to leverage rooftops suitable for cellular deployments.
It’s an opportunity for restaurants to generate revenue, though neither Panda Restaurant Group nor officials with Kroo immediately responded to questions about how much revenue could potentially be generated.
“Panda Express is continuously seeking ways to contribute to the communities we serve,” said Roger Goldstein, Panda Restaurant Group’s executive director of facilities, in a statement. “Enhanced 5G cell service for our guests and surrounding neighbors is a win-win for our stores, associates, and our greater community.”
With 2,400 restaurants nationwide, Panda Express operates in a number of formats, including malls, universities, casinos, airports, and amusement parks. But the chain has a number of “well-suited” rooftops, Kroo said.
“We are excited for the opportunity to work with Panda Express, as we are expediting phase 1 trial build by year-end. We have put together a team of best-in-class partners who are more than up to the task with respect to the design, build, and operation of our network,” said Matthew Glass, co-founder, and chief operating officer of Kroo, in a statement. – Source: Restaurant Business.
When Daniella Malave started working for Chipotle at 17, the main benefit she was seeking was free food. As it turned out, she also got a free college education companies . . . .
Lure Hourly Workers with College Tuition Perks
While working full-time for the chain, Malave completed two years of community college with annual stipends of $5,250 from Chipotle. After that, she enrolled in the company’s free online college program, through which she earned a bachelor’s degree in business management from Wilmington University in 2020.
“I didn’t have to pay for my education,” said Malave, 24, who now works as a recruiting analyst for Chipotle in New Jersey. “Every time I say it out loud, I’m like, ‘Is this real?’”
Chipotle is one of more than a dozen companies that have launched free or almost-free college programs for their front-line workers over the last decade. Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi, and Lowe’s have made free college available to more than 3 million U.S. workers.
Companies see the programs as a way to recruit and retain workers in a tight labor market or train them for management positions. For hourly employees, the programs remove the financial barriers of obtaining a degree.
Thousands of people are now taking advantage of the benefits. Starbucks, which operates an online college program through Arizona State University, says 22,000 workers are currently enrolled in its program. Guild Education, which administers programs for Walmart, Hilton, Disney, and others and offers online programs at more than 140 schools, says it worked with 130,000 students over the last year.
But some critics question whether the programs are papering over deeper problems, like pay so low that workers can’t afford college without them or hours so erratic that it’s too hard to go to school in person.
“I do think they are providing these programs to skirt around the issue of just paying people more, giving people more certainty, improving their quality of life,” said Stephanie Hall, a senior fellow at The Century Foundation, a nonpartisan think tank.
Hall said a lack of data also makes it difficult to judge the program’s effectiveness. Chipotle, Walmart, Amazon, and Starbucks, for example, don’t share graduation rates, in part because they’re hard to calculate because students often take a semester off or take more than four years to earn a degree. Rachel Carlson, CEO of Guild Education, which also doesn’t reveal graduation rates, says the more relevant data is whether college classes help employees get promotions or wage increases.
Others question the quality of the online programs and whether students’ degrees will be marketable or help them pursue other careers, especially since many companies limit what employees can study. Discover only fully funds 18 bachelor’s degrees at eight universities through Guild, for example.
“My sense is that most of these programs are hoping that employees would stay with the company,” said Katharine Meyer, a fellow in the governance studies program for the Brown Center on Education Policy at the Brookings Institution.
Amazon for its part touts college programs that offer opportunities outside the company, like nursing. But Walmart pared down the number of programs it offers to 60 from 100 because it wanted to focus on skills that would align with careers at the company.
More than 89,000 workers have participated in Walmart’s college program and more than 15,000 have graduated, said Lorraine Stomski, Walmart’s senior vice president of associate learning and leadership.
Tanner Humphreys is one of them. He started working at Walmart in 2016, bouncing around hourly jobs as he tried to accommodate his in-person class schedule at Idaho State University. But under the company’s online program, which it launched with Guild in 2018, he transferred his credits to Southern New Hampshire University and graduated in February with a bachelor’s degree in computer science. At 27, he now works at Walmart’s headquarters for its cybersecurity team as a salaried employee.
“I was working paycheck to paycheck, living with a whole bunch of friends to pay my rent and stuff,” he said. “The change from an hourly to salary is truly life-changing.”
Companies paying for college or graduate school aren’t new. But for decades, the benefit was mostly offered to salaried professionals. In many cases, workers were required to spend thousands of dollars for tuition up front and then get reimbursed by their company.
Starbucks’ program, which launched in 2014, was initially a tuition-reimbursement program, but in 2021, it began covering tuition costs upfront. Now, 85% of the company’s stores have at least one employee in the program, which will celebrate its 10,000th graduation in December.
Carlson said companies see an average return of $2 to $3 for every dollar they put into education because it saves recruitment and retention costs. Walmart said participants leave the company at a rate four times lower than non-participants and are twice as likely to be promoted.
“If I know it’s going to cost me $7,000 to have my cashier not show up tomorrow, I would rather spend our average of our partners today — $3,000 to $5000 — paying for her to go to college,” Carlson said.
Companies say the programs also give opportunities to minorities. Macy’s, which started its program with Guild earlier this year, said that half of the women enrolling are women of color.
Some companies, like Chipotle and JPMorgan Chase, offer online programs through Guild as well as stipends students can put toward in-person learning at local institutions. Amazon’s college programs offer a mixture of online and in-person learning at local community colleges or universities.
Hall said she would like to see more companies offer that kind of flexibility since online learning isn’t ideal for everyone.
Zachary Hecker, 26, a Starbucks employee in New Braunfels, Texas, began working toward his bachelor’s in electrical engineering last summer through the company’s college program.
Hecker appreciates the free tuition, but he often wishes he could attend classes in person or have more choices beyond Arizona State. His classes are challenging, he said, and professors aren’t always able to meet and offer guidance.
But Carlson said online classes are ideal for the average Guild enrollee, who is a 33-year-old woman with children. Carlson said students in its programs often lack consistent access to a car and need to be able to study anytime, like after kids are in bed.
The chance to earn a free degree can be life-changing. Angela Batista was 16 and homeless when she started working for a Starbucks in New York.
“College was never in my dream,” Batista said, now 38. “I didn’t even have the audacity to fantasize about it.”
This December, she will graduate from Arizona State University with a degree in organizational leadership paid for by Starbucks. And now her son, who also works at Starbucks, is starting work toward his own degree. – Source: AP News.
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