Restaurant Reality Check

Football's over. Why are some baseball names, too?

2012-02-07T18:39:00.001-05:00

After Albert Pujols broke the hearts of Cardinals fans by signing with the Angels, guards had to be posted outside the baseball superstar's namesake restaurant in St. Louis. Management worried that jilted natives would literally scrap any connection with the first baseman, including the Pujols statue that stands outside what had been a dining shrine.

It's puzzling, even with the death of George Steinbrenner, that the tale of Pujols the Restaurant ends there. Aren't sports agents missing an opportunity to squeeze a few more bucks out of a client's stardom by selling restaurant naming rights?

Pujols' name might prompt St. Louis residents to curse and spit, if not riot (which explains why the restaurant has been renamed the St. Louis Sports Hall of Fame Bar and Grill.) But wouldn't the Pujols name be a tractor beam for any restaurant in Anaheim, the home of the Angels? A draw powerful enough to be worth some coin to a crafty entrepreneur?

It's actually not an original concept, just a rare one. Michael Jordan certainly knows the strength of licensing his name. His One Sixtyblue in Chicago just closed, but his three Michael Jordan's Steakhouses continue to soar.

The revenue potential hasn't been lost on former Bears coach Mike Ditka, either. Three restaurants carry his name.

Maybe it's a Chicago thing.

If that secondary market in naming rights was going to emerge, this is the year. We have Bobby Valentine, a coach still dear to many Mets fans, moving to the--it pains me to type it--Boston Red Sox. His Stamford namesake restaurant still remain deep in the heart of Yankee Nation.

Mariana Rivera will hopefully retire as a Yankee. But he's not getting any younger, and who knows what the front office might do? If he did play another year, he certainly could take his Mo's Grill with him.

But Pujols is the big kahuna. It's astonishing that no one in Anaheim is picking up his Q value.

What am I talking about? Get that idea out of your head right now, dear reader. And let me get Disney on the phone. I have a marketing idea for one of their Disneyland restaurants.

Phil Romano as Simon Cowell?

2012-02-03T11:51:00.002-05:00

Concept creator Phil Romano must be taking his inspiration these days from “American Idol” founder Simon Cowell. News reports arising from Dallas say the father of Macaroni Grill and Fuddrucker’s, to name just a few of his brainchildren, is funding a restaurant “incubator” where entrepreneurs pitch their concept to a panel of chefs and potential investors, a la any number of reality talent contests.

A winning idea earns a match-up with potential backers and 2,500 square feet of space in a 13-acre complex Romano and his partners have purchased to redevelop.

The jury members recruited so far include such towering toques as Stephan Pyles, Dean Fearing and Kent Rathbun, according to the coverage. Members with more of a business background include Butch McGregor and Stuart Fitts.

Romano and other investors in the Trinity Grove project will receive a percentage of sales from any venture that’s awarded space as a result of getting a thumbs-up vote from the committee.

Romano has predicted that restaurant companies will come to the complex to scout for concepts they could develop.

He told the Dallas Morning News’ Karen Robinson-Jacobs that his group has already signed letters of intent with 14 would-be restaurateurs who want space in the Trinity Grove complex, and that 30 in total have submitted ideas.

Chipotle speaks

2012-02-03T08:45:00.003-05:00

When Chipotle executives speak, other restaurateurs snap their heads to listen. Here to save them a little neck strain are the pearls from management’s conference call Wednesday with Chipotle investors:

Co-CEO Steve Ells, on the first ShopHouse Southeast Asian Kitchen:

While we're still working to perfect the concept, it reminds me very much of the first Chipotle when it originally opened. Many current customers aren't quite sure how the system works or what to order when they first come in and sometimes have issues with flavor combinations or the level of spice in their food. But they like it and from the very beginning, you see that the customers are coming back, week after week.

Ells, on Obamacare:

We, today, have a limited insurance program that we offer our crew. Most of our crew chose not to pick that up. And so we would go from very few of our crew being involved in the voluntary program to us being required to provide insurance to all of our employees. So it would be pretty significant change to our business

.
Co-CEO Monty Moran, on Chipotle’s Restaurateur management development program (where managers get a big bonus for hiring employees who then become managers):

This GM taught all of us a lesson: She came from a Restaurateur store herself and had a strong vision for what a winning team looked like. Weeks before her new store opened, she spent days on the sidewalk in front of her new restaurant, interviewing candidates for crew positions…Once she had selected her team, she trained each of them in an existing Chipotle and then invited all of them to her apartment to explain to them her vision for her restaurant and to watch videos from the 2010 All Managers Conference to be sure that each of these people understood Chipotle's unique culture. She made a commitment to each of them to help them grow and carefully described exactly how they would be able to become managers and future leaders at Chipotle themselves. At the same time, she secured a commitment from each of them to devote themselves fully to becoming part of the Restaurateur store very quickly.

Moran, on seasonal changes in traffic:

Our peak hour transactions are sort of more in the 100 range during the winter months. And during the summer months, it's historically gotten up sort of more in that 110 to 115 range…Obviously, with this coming spring and summer season, we hope to set some new records in those areas because of our new emphasis

.
Ells, on menu development:

One of the reasons that we continue to grow so strongly is because we continue to improve our core offerings, which is what people come for. We have experimented here and there with a new menu item. We've tried soup. We've tried chili. We've tried smaller menu items, single taco, things like this. But it seems that people keep coming back for their chicken burrito or their barbacoa tacos or whatever it is that they've landed on.

Bonus tidbit:

Brown rice, one of the chain's most recent menu additions, now accounts for about a third of all rice served by the chain.

Better forecast

2012-02-02T09:57:00.002-05:00

With all the post-holiday hubbub, I didn't have a chance to air my forecast for 2012. It's a shame because the task is outrageously easy this year. Every major trend boils down to "better."

Not "better" in terms of business conditions, though the National Restaurant Association yesterday forecast a slightly easier time for the industry in 2012 (apparently I wasn't the only laggard in presenting year-ahead predictions. Until a few years ago, the issued its annual economic preview during December of the preceding year. Now the data isn't released until we've torn the first page off the New Year calendar.)

The byword is "better" because it's the G-string that gets the consumer's dollar these days. Palms get all sweaty when shoppers spy something of truly superior quality at a can-do price. It's as unavoidable as admiring Mitt Romney's hair.

The industry has been jabbering for years about redefining value as affordable quality. This year, talk has given way to unprecedented action. Much of the chain-related restaurant news to date has centered on better food, better service, better environment and better business practices.

Wendy's is upgrading its burgers--again. Taco Bell is "reinventing" the taco and striving to match the quality of Chipotle. Jack in the Box is installing fireplaces as part of a design overhaul. Domino's is hawking artisan pizza and a better signature side.

McDonald's is crowing about a personal connection with the farmers who grow its food. Chipotle's spin-off Asian concept features high-end small-batch beers. Panera Bread is currently promoting salmon.

On the full-service front, Ruby Tuesday is providing fresh bread and tossing its Caesar salads tableside.

The whole gourmet-burger craze is built on the concept of providing what's better. It, in turn, is part of a larger movement by high-end chefs into fast-food, where they hope to make a name (and a bagful of loot) by providing white-tablecloth-quality fare. Late last year the NRA cited that emerging fast-fine segment as one to watch.

The problem is, "better" is relative. What's a notch above the usual today becomes tomorrow's norm. So what will be the new manifestations of better?

--Better sodas. Everyone is infatuated with the fast-casual market, where several of the standouts have spec'd small-batch artisan colas and flavored soft drinks. Skinny Pizza, for instance, offers a fountain version of Boylan Diet Black Cherry soda, a favorite that I've never seen in fountain form before. Expect to see more of those high-craft drinks populating the coolers of limited-service brands, including some of the big names.

--Better condiments. There have been fits and starts in that direction, and the foodservice supplier community is certainly anticipating the process, with better mayo, catchup and salsas already in distributors' warehouses. But that might be only the start.

--Better packaging. When was the last time you said, "Wow, that's a really cool takeout package we're using"? Customers frequent a place because of the food, the convenience or the price. But a truly breakthrough sort of packaging could help in delivering that overall sense of "better."

--Better French fry alternatives. The apple slices are now a standard. Carrot and celery sticks are tight there, too. So what's next? Sweet potato fries are certainly cropping up everywhere (and are rumored to be in test by Wendy's). A personal plea: Please, someone add raw broccoli florets as an option so I can get my sister off my back.

--Better veggie options. I'm talking about new choices from the mainstream chains and brands. It's time to go beyond veggie burgers and sandwiches with the meat omitted.

--Better pizza. This isn't a swipe at Domino's, since I've not tried its new artisan pies. it's directed at all the pizzerias in the eastern regions of the U.S., and New York in particular, that have coasted on the strength of their ovens for decades. They've turned pizza into a commodity, instead of striving to do something different. Like something better than the mass of pie makers out there.

--Better prices on better drinks. I'm not lost in some nostalgic dream about nickel candy bars, but a $12 beer is overpriced, especially when I know it retails and wholesales at a completely different tier. Wine prices are also getting crazy. A $40 tab for two glasses of wine on the way home for work just doesn't make sense.

--Better office catering. I say that as a consumer. More flavorful and extensive choices, please. The portable taco bar is the last innovation I can remember in that realm.

Don't look now but...

2012-01-27T16:08:00.003-05:00

Because of Twitter, you can get a heads-up on restaurant developments long before they’re covered in the traditional sources of industry news. But the story behind the news story is a different matter. Consider, for instance, these little-noticed wrinkles in two heavily covered recent events.

Danny Meyer is selling splinters of his empire. The famed restaurateur drew tremendous coverage (including here) when he disclosed in a cookbook that he had agreed to sell his Eleven Madison Park to the starched outpost’s manager and executive chef. Less noticed was the bombshell that he’d served up another piece of his business, this time to the company led by the owner of the Miami Dolphins, Stephen Ross.

Ross’ Related Cos., perhaps best known as the developer of New York’s chi-chi Time Warner Center, acquired an undisclosed stake in Meyer’s Union Square Events catering and restaurant-management operation for an amount that wasn’t revealed. The purpose is to pair the two companies’ expertise in developing real estate complexes worldwide, but the process is starting with the partners’ backyard.

They’ve announced that they’ll be part of the 26-acre Hudson Yards project in New York, a venture that aims to turn the old train tracks and industrial space on Manhattan’s Far West Side into a new hub of consumer activity. Few details have been revealed about the foodservice aspect, but Meyer isn’t known for peddling the same ol’ same-old.

Taco Bell redefines who’s a competitor. No, this has nothing to do with the much-covered Cantina Bell menu, which has been identified in virtually every news story as the Mexican giant’s response to Chipotle’s success. I’m talking about the new breakfast menu, a.k.a. the First Meal bill of fare, which is studded with names that vie with Taco Bell for share of stomach and franchisees.

The roster includes a pastry item from Cinnabon, Focus Group’s bakery chain, and coffee from Starbucks branded as Seattle’s Best (curiously, a former sister of Cinnabon). You can find those brand names in a number of locations beyond their namesake stores. Seattle’s Best, for instance, is also available in Burger Kings, Subways and plenty of other foodservice outlets.

There’s even a Seattle’s Best coffee flavored with Cinnabon-brand cinnamon. Clearly licensing has become a big business for each.

But each still has a sizeable network of its own retail outlets. At one time, the industry would’ve clutched its chest at such brand-name mixing. Certainly franchisees would have. Then they would’ve dialed their lawyers.

It’s part of a new wave of cross-branding—led at least in part by franchisees. A Burger King franchisee, for instance, is serving as the test partner for a new collaboration with Friendly’s. The ice cream chain hopes to open at least 10 downsized Friendly’s Scoop fast-casual-style outlets this year. The first is co-branded with a Burger King store run by New Jersey franchisee.

Bet you might’ve missed that angle in all the coverage of Friendly's comeback efforts.

Drugstore cowboys

2012-01-13T10:31:00.005-05:00

A bunch of drug sellers plan to muscle into restaurants' turf, so some heads are likely to get banged. Luckily, bandages and aspirin will be near at hand.

Gauze, pills, lotions, and trusses were how those interlopers formerly made their money. But now drugstore dons like Duane Reade, CVS and Walgreen's are ripping out aisles of stethoscopes and canes to showcase sandwiches, salads, muffins, coffees and a host of other lunchtime and breakfast staples. At one of the prototypes near our New York offices, you can grab some made-to-order sushi along with a tube of Preparation H.

The restaurant business has harumphed a little about the charge of discount retailers into foodservice. Walmart, Target and Kmart could all draw blood because of their traffic and sheer might, as any thinking chain-restaurant operator will tell you. But until that happens, how much hand-wringing can you do? There's next week's sales target to hit.

If that lukewarm concern has been voiced about drugstores, I've yet to hear it. The business seems to regard the phenomenon as more of a curiosity than a threat.

That's not the case in the c-store industry, which fears a distraction from its quest for more fast-food sales. At a recent conference for that business, drugstores were repeatedly cited as a looming threat, as were dollar stores, the super-discount retailers who've presumably been helped by the economic downturn. They, too, are experimenting with ready-to-eat foods, mindful that the big quick-service restaurant chains don't have a monopoly on 99-cent sandwiches and drinks.

The issue for all those challengers is quality. Can they match the caliber of what's offered in a downtown takeout shop where food is the focus, not the add-on sale to a prescription for suppositories.

Here's some food for thought on that question, a video shot by Angel Abcede from our sister publication, CSP. It's a look at Walgreen's new food-heavy prototype in Chicago. You'll get a good read on the quality of food that's being offered by that chain. Afterward, you might want to see what sort of deal you could get on ulcer remedies.

Presidential hopefuls & the restaurant business

2012-01-11T12:19:00.004-05:00

Everyone knows that Herman Cain honed his leadership style in the restaurant business, first at Burger King, then Godfather’s, and finally the National Restaurant Association. But his departure from the presidential campaign hasn’t left the industry without an associate in the race.

With the exceptions of Ron Paul and Rick Santorum, all of the major candidates have a connection of some sort. Here’s a quick review of those sometimes scandalous ties:

Mitt Romney: The biggest check ever signed by the private-equity pioneer was a $1 billion pay-out to Tom Monaghan for Domino’s Pizza, which Romney’s employer, Bain Capital, would own for a number of years. The company subsequently purchased a piece of such industry giants as Dunkin’ Donuts and Outback Steakhouse. Bain earned a significant return from Domino's and Dunkin' through their respective stock offerings.

Newt Gingrich: An early scandal for the former House Speaker centered on his second career as educator. The restaurant business caught a little mud in that flap, too.

The fiery polemicist was accused of taking sizeable contributions from lobbyists who allegedly wanted him to air the views of their clients to the business students he was instructing at the undergraduate level. News reports identified one of those contributors as the Employment Policies Institute, a group formed by S&A Restaurants alumnus Rick Berman in part to protect the interests of several major casual-dining chains.

According to the allegations, the EPI wanted Gingrich to present minimum-wage employers in an attractive light. The group never commented on the assertions, and Gingrich denied that he skewed his lectures to accommodate its interests. But one of the documents that came to light at the time included a note from Berman to Gingrich, thanking him for his help.

Jon Huntsman: His connection is on the supply side of the restaurant business. Huntsman’s father, Jon Sr., was the founder of a chemical company called Hunstman Corp., which invented the clamshell burger box. Its major customer: McDonald’s, which spec’d the new container for the Big Mac.

The elder Huntsman later founded a private equity firm, HuntsmanGay, whose investments include a stake in a company that sells Mama Rosa’s pizza through convenience stores. Mama Rosa’s also supplies pizzerias with dough balls and pizza crusts.
I’ve yet to find a connection between the restaurant industry and Rick Santorum, the former Pennsylvania senator, though I first learned of him and some industry-aligned views from the then-director of the Pennsylvania Restaurant Association.

Similarly, there’s yet to be a direct tie revealed with Ron Paul, the libertarian candidate. But he does share the name of perhaps our industry’s best-known researcher.

Ruby sweats its upkeep bills

2012-01-09T11:38:00.002-05:00

Ruby Tuesday hasn’t exactly pursued a me-too strategy for the post-Recession, as Restaurant Reality Check noted six months ago. So how’s that contrarian approach working?

Not well, judging from the company’s financial results for the October-through-November period. As you might have heard, Ruby lost $2 million for the quarter, compared with a net income of $4.6 million for the same period of the prior year.

Buying restaurants from franchisees, a 180-degree departure from what most chains are doing today, helped to raise revenues by almost 6 percent. But the gain was far more than offset by debt expenses and a steeper-than-expected decline in unit sales, which came despite new service and value initiatives.

Does that mean the company is scrapping its contrarian views? Well, yes and no.

As we noted here in July, the company’s namesake chain is betting it can win more bargain-hunters by giving customers access to its salad bar without an add-on charge. It’s sticking with that more-is-lots-more approach. In a call with financial analysts, executives spoke cryptically of additional service enhancements that are currently in test at 10% of company-run Ruby units.

They didn’t reveal all the components of the new Surprise & Delight initiative, but did divulge such components as shaking martinis tableside, and having servers grate Parmesan cheese onto patrons’ entrees after they’re served.

But the biggest disclosure was a mention that Ruby plans to follow the herd for a huge savings on routine restaurant upkeep—repair & maintenance, or R&M, in industry parlance. Instead of letting each restaurant handle that function, Ruby is going to centralize control, “which a lot of the QSR chains and some of the other casual dining chains have gone to,” explained CEO Sandy Beall.

Ruby is confident it can deliver millions in savings by consolidating its expenditures for R&M. “It's approximately [a] $40 million spend a year annually, and we believe that through using a consolidated group that we can better monitor our rates and our costs on the actual parts and what have you,” said EVP and operations specialist Kimberly Grant.

“It's basically bulk buying power for the services we're participating with,” added Beall. “It's like a huge co-op, so better pricing.”

'Next Stop: Last Century'

2011-12-27T16:58:00.002-05:00

Restaurateurs must’ve had their hearts broken this holiday season. All they found under the wrapping paper were iPads, flat screen TVs and the latest smart phones. What they really wanted, judging from recent news stories, was a time machine.

Not just any decades-jumper, but one that can take them back as well as forward, to the days when counter servers wore peaked paper caps. They want to capture the magic that made Hot Shoppes and A&W the dominant chains of their day. Why else would they be opening a new chapter for the brands?

In case you missed the particulars, Marriott Corp. is planning to open a Hot Shoppe in a Washington, D.C., hotel in early 2014. If you’re not familiar with the concept, it was a cross between a soda fountain, family restaurant and fast-food joint, serving up shakes, fries and burgers to the generation that’d parent the Baby Boomers.

It was also the foundation for the Marriott hospitality empire, which was originally known as Hot Shoppes, Inc. Founder J.Willard Marriott started in business as a restaurateur, first as an A&W franchisee (more on that in a minute), then as the builder of the Hot Shoppes chain (beginning in the late 1920s), and then as architect of the Big Boy system, which operated under a slew of regionalized names (Shoney’s, Frisch’s, JB’s, Abdow’s, Azar’s, etc.) Hotels would come later, largely under the tutelage of Willard’s son Bill, who’s about to retire.

Hot Shoppes gave more than the Marriotts a taste of the good life. At a time when full-service restaurants were largely upscale joints, it provided a way for workers and the lower middle class to have someone wait on them. My mother often recounted how she’d occasionally get a milk shake at a Hot Shoppe when she was studying to be a nurse in Washington, D.C., during World War II. She’d say it with the wistfulness of someone who’d just had tea with the Queen.

Hot Shoppes would plug along as a curiosity, a bit of nostalgia making too many concessions to the times, until 1999. Marriott has apparently decided that a 25-year gap without a Shoppes is too long.

Maybe it’s just a coincidence that a new chapter also opened this week for the brand that preceded Hot Shoppes in Marriott’s business model (the first store was converted from Willard Marriott’s A&W franchised unit). A&W has been quietly plugging along, gaining and losing stores, for eons. For a long while it shared resources with the likes of Taco Bell, KFC and Pizza Hut, serving as a co-branding partner for those sister Yum! Brands holdings.

But now A&W is on its own again. The brand was spun off to franchisees right before Christmas. They’ve vowed to grow the business, in part by taking advantage of A&W’s heritage. No doubt they’re looking to cruise back to happier days and bring that popularity back to the current day.

But that’s not the only time travel the industry is pursuing. As Restaurant Reality Check reported earlier, P.F. Chang’s hopes to get a glimpse of its future via a new one-of-a-kind bistro in southern California. The restaurant is intended to serve as a lab for how future stores will operate, right down to their menus and serving style (i.e., a heavy reliance on small plates).

Chang’s isn’t the only chain that’s asking itself, How can we anticipate what’s next for the brand if our test site is a facility built for today?

As some of Yelp’s citizen-reviewers have noted, BJ’s Restaurants has opened a downscale version of its signature concept, called BJ’s Grill. Management has stressed that the smaller riff is meant to be a testing ground for such futuristic touches as new technology, not a prototype.

Indeed, some of the features under scrutiny seem far afield from the current-day BJ’s. Yelp posters noted that the menu has a decidedly Mediterranean bent, with kabobs and hummus on the bill of fare.

The idea of building a futuristic unit is hardly new. Houston’s, the upscale chain whose restaurants sometimes operate under the Hillstone name, also runs an outlet called R&D Kitchen. As the name implies, the restaurant is a little more on the edge than a Houston’s.

Apparently it’s already given the time machine a try.

Zombies & other missed opportunities

2011-12-16T08:47:00.003-05:00

So much attention is focused on the year ahead that some crucial here-and-now issues are being overlooked. Where, for instance, are restaurant zombies?

The flesh-eating un-dead rallied at the end of 2011 to rival vampires as the scary characters of the moment. They’re the stars of cult TV shows (“The Walking Dead”), movies (“Remains”), video games (Plants vs. Zombies), literature (celebrated novelist Colson Whitehead’s “Zone One), and music (the slash-metal band Terrorizer is scheduled to release “Hordes of Zombies” in February).

No longer are zombies thriving on the societal fringes populated by pierced youngsters sporting weird black shoes and heavy eyeliner. New York magazine, a favorite of Big Apple hipsters, recently featured a nine-story special section on surviving a zombie attack (“Know Thy Enemies,” “Should You Stay or Go?”, “Hole Up Here.”)

They’ve even inspired a prank. The billboard-style road signs that highway departments use to warn of detours or construction ahead are being hacked and reprogrammed to alert drivers of an imminent zombie attack.

So where’s the restaurant-zombie connection? No one would dispute that restaurants are as much a part of American life today as sports and having a couch. Zombies are an entertainment phenomenon of our time, but they’ve yet to spill over into the restaurant business as promotional stars, the inspiration for menus, or the foundation for a new concept.

No Snarling Undead Burger. No Flesh & Blood Café. No zombie McDonald’s character.

But this is hardly the only missed promotional opportunity for the restaurant business. Consider the other social phenomena that somehow slipped past without a tie-in, or at least not much of one:

Nigel Tufnel Day: Tufnel, of course, is the fictional lead guitarist of the quasi-fictional band Spinal Tap, the focus of the Rob Reiner mockumentary, “This is Spinal Tap.” One of the movie’s memorable moments was Tufnel’s explanation of why he loved his new amp so much: The volume dial goes up to 11, not 10, as most amps do. Reiner sheepishly asks how an 11 is any different from a 10 if they both represent the maximum output of a similarly powered amp. Tufnel’s defense of 11 led fans to dub Nov. 11—a.k.a. 11/11/11—as Nigel Tufnel Day. But did you see any LTOs geared to the occasion. NO (that’s on volume setting #11).

Ugly sweaters: Actually, this one hasn’t been totally overlooked by restaurants. The Chick-fil-A in Chicago’s Water Tower Place is offering a deal to anyone who shows up with a really, really bad sweater. And D.C.’s Café Saint-Ex hosted an Ugly Sweater Party, where the patrons with the worst knit-job won $50 gift certificates.
Those places were among the few that took advantage of the sleeper Ugly Sweater Phenomenon. There are actually online ugly sweater stores, and “ugly sweater” is quickly emerging as a new category of retail apparel. The movement even has a celebrity spokesman of sorts in talk show host Jimmy Fallon.

But have you seen Ronald McDonald in a red-and-white monstrosity adorned with garish reindeer and Santas?

I rest my case.

Don't let these gems slip past

2011-12-14T17:05:00.004-05:00

In the roar of prognostication that erupts every year-end, some of the most intriguing predictions are lost in the din. Sadly, it’s even happened this year with the standout of the breed, the National Restaurant Association’s annual survey-based forecast of trends. Consider, for instance, the finding that 61% of chefs are considering the start-up of a food truck.

But that’s not the only jaw-dropper. One-third of the 1,791 surveyed chefs said their restaurants have a garden that supplies produce. A shift to vegetable and vegetarian options was forecast to be the hottest trend in appetizers during 2012, and No. 30 on the list of 223 expected shifts was increased use of “ancient grains” like spelt and amaranth (and, presumably, faro). That’s opposed to the proliferation of dishes made with quinoa, which dropped to Trend #40.

The spread of beer sommeliers was predicted to be the 58th hottest trend. No doubt they’ll be knowledgeable about gluten-free beer, No. 39 on the ranking.

It’s intriguing that North African or Maghreb cuisine was predicted by the canvassed chefs to be hotter in 2012 than Korean food, contrary to most of the other forecasts for the year. Indeed, I don’t remember another one that mentioned North African food. But they were certainly bullish on Korean and Nordic fare.

Perhaps they’ve been sipping once-banned absinthe, No. 138.

Similarly, pies have repeatedly been touted during Forecast Season as the treats that supplant cupcakes as the hot indulgence of the day. Yet pies finish last on the NRA list, right behind Italian cuisine, which I put high on my personal prognostication list.

The list of trends begins as you might expect, with variations on the local and sustainable boom (the shift to local or sustainable foods accounts for six of the Top 10). You can find a review of those expected currents anywhere. But treat yourself to a drill-down of the list. You may be very, very suprised.

Is P.F. Chang's smarter than Chipotle?

2011-12-13T19:13:00.004-05:00

Place your bets and get out of the way. We’re about to see who’s nailed the right future for an Asian restaurant chain, Chipotle or P.F Chang’s.

Unless you’ve been really, really preoccupied with Herman Cain’s political complications, you’re probably aware that Chipotle intends to launch a chain of fast-casual restaurants featuring authentically flavored Asian fare. Management hasn’t shared much information about the early performance of ShopHouse Southeast Asian Kitchen, which borrows Chipotle’s serving-line format. But founder Steve Ells has commented that patrons have complained about the spiciness of the food, much as customers did when Chipotle started. He’s proudly cited that pushback as proof the concept is positioned where few ethnic chains have dared American taste buds to follow.

Contrast that push-the-margins approach with the new direction P.F. Chang’s is exploring. The company announced that it’s opening a test lab of sorts today to try the recipes, design features and other elements that will likely figure into its namesake concept’s future. It’s “what we hope to become over the next five to 10 years,” said chain president Lane Cardwell.

Currently under test are seven entrees available only at the new southern California outpost. There’s a roast chicken served with shoestring fries, jazzed up with a Sichuan rub and other Asian touches (the fries are tossed with “crispy sesame,” for instance). But it still sounds a lot like roast chicken and fries, just with a little more spice.

There’s also a steak frites, served with fries, and a double-cut pork chop, which is fast becoming a casual-dining staple.
You can also get Alaskan black cod, Scottish salmon or Alaskan halibut, all served in one grilled entrée. Here again, the spices are Asian, but the foundation of the dish hails from elsewhere in the world.

Indeed, it sounds like Chang’s is trying a more mainstream American approach, perhaps to counter a traffic drop-off that’s been steeper than the slowdown for many grill-and-bar-type competitors. The change in strategy is surprising because Chang’s has always been a bit of a niche player, with a menu that goes far beyond what you'd find in your order-by-number neighborhood Asian joint.

The directional adjustment--and remember, it's still under test--may prove to be a smart strategy. It's just contrary to the body of 2012 prognostications, which almost unanimously foresaw exploration of unfamiliar ethnic dishes and flavors.

Then again, Chipotle might have the better idea. Or maybe authenticity works in the fast-casual market, but not in the full-service arena.

Whatever happens, it’s one of the most marked recent examples of chains moving in directly opposite directions.

Not this pigeon

2011-12-07T08:37:00.001-05:00

As I type this, a con man is trying to swindle me because he thinks I’m a restaurateur, and a gullible one at that. It’s the classic big-order scam. If you’re never been the target, here’s how it works.

On Dec. 6, I received an unsolicited e-mail from a David Moore, who said he wanted to place a catering order for 150 grilled-chicken salads for next week, Italian dressing on the side. It’s for his mom’s birthday, he explained. Just e-mail him the bill and he’ll pay by credit card.

The e-mail was addressed to Owner/Manager, and I’m sure I was one of hundreds if not thousands of recipients. Our names were likely taken off some list the sender somehow secured, maybe from a recent industry convention whose directory they snagged. Or he might’ve plucked it from a past blog where I invited readers to e-mail me questions for the conference speakers I was covering. But that’s pure speculation.

In any case, because the solicitation came from a private individual using a Gmail account, it wasn’t caught in my spam filter. Clearly the perpetrator is playing a numbers game.

If I’d played along, I’d have sent Moore a bill, which he’d have paid with a credit card—somebody else’s. Then, right before the scheduled pickup (3 p.m. on Dec. 15, the e-mail specified), he’d have cancelled the order. I’d bet he’d have told me that his mother had gotten sick, or maybe even died.

Then he’d have asked for however much of a refund he was due. But could I send a check instead of refunding the credit charge?

How could I have refused a man who’s mother just died? Besides, I’m too busy with holiday matters to quibble. Just send him the damn check!

I was tempted to play along for a first-hand experience, then turn the matter over to the authorities. Instead, I wrote Moore back, saying I’d like to call him to discuss the order.

To my astonishment, he responded (and this is verbatim, complete with grammar and capitalization mistakes)): “i will like you to know that am hearing impaired so i can only contact you via email so i will like you to email me back with the grand total plus tax.”

Usually, the order-placer is a little craftier, calling a particular restaurant and ordering off the online menu. In my situation, all plausibility was dashed by what was clearly a mass e-mail approach. I may not be the shiniest penny in the fountain, but I couldn’t swallow that someone would casually send a large order to an unfamiliar restaurant. And, of course, I’m not a restaurateur, and my e-mail wouldn’t suggest I’m one.

Clearly the ploy must work, or the scammers wouldn’t bother. It’s like all those unsolicited e-mails that purportedly come from the Sultan of Swami, who needs only a few hundred dollars to claim millions in inheritance, which he’ll gladly share with you.
Apparently the Sultan enjoys a grilled-chicken salad from time to time.

Fast-casual form or substance?

2011-12-05T18:15:00.003-05:00

After being kicked in the mints by fast-casual upstarts, a number of full-service restaurants are about to learn why.

To counter the challenge, they’ve trumpeted plans in recent weeks to whittle their concepts into fast-casual versions. So Famous Dave’s now has BBQ Shack. Red Robin has Burger Works. IHOP has IHOP Express. P.F. has two down-market versions, Pei Wei Asian Diner and the just-announced Asian Market—the list goes on and on.

The variations may hale from all sectors, from fine dining (Rick Bayless, with Xoco) to family restaurants (Denny’s, with Denny’s Cafe). But all share the strategy that less is better. Burger Works has a smaller menu. IHOP Express has less service. Virtually all have a smaller footprint.

There’s no doubt that scaled-back service is a big draw for the fast-casual sector, since it spares customers from having to tip. But that 15 or 20-percent saving would mean nothing if the buyer wasn’t getting food of unexpectedly high quality. And that’s where some of the trading-down chains may be deluding themselves.

They’re still working the old fast-casual formula: Food like you’d get in a casual restaurant, sold at a price closer to what you’d pay in a fast-food joint, served at a speed somewhere between grab-and-go and sit-and-order.

They should’ve learned in their market research that much of today’s fast-casual fare surpasses what customers expect from casual chains. Yet the companies hatching fast-casual formats haven’t said anything about the food being better than what the mother brand sells. They wouldn’t dare.

The closest they’ve come is touting the greater convenience and portability of what’s available from the spin-offs. If those benefits were key attractions, traditional quick-service concepts wouldn’t be losing fans to fast-casual.

Instead of standing pat, many of those conventional fast-food sellers are upgrading their menus and designs to compete with the likes of Panera Bread and Chipotle. Like the down-traders, they’re turning fast-casual themselves, but by aiming higher.

So Tim Hortons is testing a variation called Café & Bake Shop. Subway franchisees have more than 20 Subway Cafes open, and Burger King is growing its collection of Whopper Bars. Pizza Inn has lined up $4 million in to build Pie Five Pizza Co., a fast-casual riff that’s generating sales at an annual rate of $920,000, with operating margins of more than 20%.

One of the strange things about this economic downturn has been the boost it’s given to quality. Customers want value, but often that means higher caliber food for an attractive price.

So which fast-casual interloper is better addressing that need, the casual chain that enters the market without a significant food upgrade, or the fast-food specialist that trades up? I know how I'd bet.

Myth busting

2011-11-21T10:28:00.003-05:00

A confused figment of my imagination writes, “Hey, Restaurant Reality Check, how am I supposed to tell fact from fiction in the age of The Onion, the Borowitz Report and KFC’s publicity department? Some of their made-up restaurant stories sound more believable than the real thing. How can a non-cynic know when he’s being fed a whopper?” (signed, Believing It—Or Not?)

Dear Believing,
I was discussing the very thing yesterday with Henry Kissinger and the Fonz. You just can’t tell these days who’s pulling your leg and who’s merely covering the Republican presidential candidates.

Fortunately for you and your confused peers, Restaurant Reality Check can recount how a few persistent myths were disproved, decidedly, by recent industry developments.

Wall Street firms have a hammerlock on executive compensation outrages. A Friendly source—note the capital “F”—blew that one away. In case you missed reports in mainstream media like The Wall Street Journal and The Huffington Post, the restaurant industry has its own instance of a CEO enjoying big-dollar privileges while the corporate rank-and-file burn their pink slips for warmth.

According to the reports, Friendly’s CEO Harsha Agadi billed the company for $234,000 in day-to-day expenses in the year preceding the restaurant franchisor’s recent bankruptcy filing. The charges didn’t include the $190,000 Agadi submitted for relocation.

The contrast with the plight of Friendly’s workers is what made the story a hot one. More than 600 lost their jobs when some 60 stores closed.

We can also refute at this time that the Fribble lobby has secured a federal bailout for the family chain.

E-mail is killing letter writing. Not in the restaurant business. Hundreds of stationers could pop for a second home this year because of the business they’re reaping from disgruntled shareholders and the chains they’ve targeted for takeover.

This morning, for instance, Cracker Barrel shareholders were sent a letter from CEO Sandy Cochran, spelling out why they should rebuff Sardar Biglari in his attempts to wrest control of the family chain from current management. She countered Biglari’s assertions by explaining the chain’s business-building strategies, point by point.

The communication was in response to an 11-page letter that Biglari sent last week to the same recipients. Taken together, the two missives might have made Cracker Barrel’s shareholders the most informed in the business.

But that’s not the only volley of letters helping the Postal Service. Cosi and Brad Blum, the Olive Garden alumnus who wants to run the fast-casual chain, have stamp dispensers churning as well.

Ditto for the CEO-turned-advisor of Wendy’s, Roland Smith. Recent SEC filings include Smith’s resignation letter, which in turn referenced other missives during the summer. The communications indicate that Smith stepped down because he didn’t want to leave Atlanta, where the chain is currently headquartered. It’s moving back to the suburb of Columbus, Ohio, where it was founded.

Smith has been succeeded as CEO by Emil Brolick, who’s collecting $1.1 million in salary, with the opportunity to earn another $1.6 as a bonus. Smith was in the same ballpark.

Survival has supplanted concept development. According to the conventional wisdom, restaurant companies are too preoccupied with survival to consider the development of new concepts.

Not any more.

The last two weeks brought announcements of new concepts from such celebrated operators as Starbucks (Evolution Fresh Juices), P.F. Chang’s (Pei Wei Asian Market, which of course has nothing to do with Chipotle’s launch of ShopHouse Southeast Asian Market), IHOP (IHOP Express) and Jamba Juice (JambaGo, the juice chain’s riff on an express format).

Okay, enough myth busting for now. In our next installment, we’ll take on Yeti and the promises of restaurant unions.

Catching up on the future

2011-11-16T18:34:00.002-05:00

Swallows’ return to Capistrano seems like an iffy thing compared with the outpouring of restaurant predictions at year’s end. The 2011 crop of prognostications is looking like a bumper yield, mounting faster than the national debt after an unusually early start. If you were too busy putting away the summer patio furniture to notice, here’s what the soothsayers have foreseen thus far for the business.

A bad, bad year for independents. New York restaurant consultant Michael Whiteman, a recovering editor, has predicted that almost 10,000 non-chain places will fire down their ovens for good next year. The problem, he asserts, is the mom-and-pop’s inability to borrow what they need to stay in business until sales rebound.

Con-fusion returns. Whiteman is one of the sages who expect more mixing of ethnic specialties next year, a reversal of the march toward the purity, if not authenticity, that was heralded in prior times. Like 2010.

Top imports? As to what ethnics might wax in popularity, just throw a dart at a globe. There are several predictions of Korean food going mainstream, but that’s hardly a new notion. Ditto with the prognostications that Thai will be the new Japanese. Peru is getting some lip service, too, as is Nordic fare. Our bet: simple Italian. Spaghetti and meatballs, differentiated from the past by quality, will be the dish of the year.

Can you sing oom-pa-pa? Dust off the lederhosen for your research dine-arounds, because there’s a consensus that beer gardens are the Concept of the Moment.

Comfort food will get a creative shot. There’s agreement among the cognoscenti that customers will still crave the safety of old favorites, but maybe with a dash of adventure to break the monotony. Southern fried chicken, for instance, might be passed over for Korean fried chicken (fried in olive oil rather than other shortenings). Technomic terms the phenomenon “familiar with a twist,” and suggests that it’ll go beyond a sharp cheddar (whoa!) in the mac and cheese.

Full disclosure. There seems to be no misreading the tea leaves on this one: Consumers will be demanding—and getting—more info about what they’re eating. Smart restaurateurs will decide they should be the source. Others will let their patrons fill the void via social media and citizen-reviewer services like Yelp. We’re not just talking quantitative assessments in 140 characters, but a mini-snapshot of what’s in the meal.

We’ll be adding more predictions, here and via monkeydish.com, as they spew from the crystal ball.

Meet your potential customer

2011-11-16T10:15:00.013-05:00

I'll be blogging today from Consumer Insights & Engagement, a conference presented by the parent company of monkeydish.com and Restaurant Business, CSP Information Group. The content is skewed toward convenience stores, the audience of our sister publication, CSP. But the consumer is the consumer, whether he or she is buying an Egg McMuffin or a breakfast sandwich at a QwikStop.

The best way to follow the thread will likely be from the bottom up.

1:50:A retailer in the audience has asked what seem to be key questions for merchants interested in mobile payment: Will they need to upgrade their technology, and what happens if the system goes out? How could they charge if a mobile wallet isn't transmitting?

The plan, according to Isis, is to issue a companion card that mobile wallet users could wield to charge in an old fashioned way.

The Google representative pointed out that mobile wallets would be an alternative to credit cards, not a replacement. People will still carry traditional magnetic stripe cards.

Neither really responded to the question about tech upgrades.

1:25: The speakers are talking about the security and privacy aspects of using mobile wallets. They've stressed that effective safeguards are in place, but that consumers need to be educated. There's agreement that customers need to see mobile payment as the next evolution, not some scary, radical development.

12:55: A Google specialist on mobile commerce is explaining the rationale behind the tech giant's new mobile payment system, Google Wallet.

One of the main drivers, according to Serge Kassardjian: The payment process "is not optimized." Translation: It's a boring pain.

The objective is making the payment process a lot more fun and thereby strengthening the tie with the customer, Kassardjian explains.

"Why are we doing this?" asks Kassardjian, noting that Google is not taking a commission on transactions right now. One of the attractions, he said, is delivering extremely effective ads to targeted users.

!2:45 p.m.: The afternoon session of the conference is opening with a panel discussion of the mobile payment phenomenon. It's not about transactions, says Isis' Tony Sabetti, it's about a new way of communicating with consumers.

Isis is a "mobile wallet" payment system that's being created as a joint venture of AT&T, T-Mobile and Verizon Wireless. Once the system is up and running, the app will replace most of the cards in a consumer's wallet, from credit card to frequent-customer cards.

The whole idea is to combine multiple accounts into one payment system, says Sabetti. The process is attractive to consumers because it simplifies their lives.

For retailers, one of the benefits is having a new channel for reaching customers. Special offers or pitches can be delivered to them via phone, for instant redemption at the point of purchase.

9:00: Sansolo just asked how many chains in the audience have a tattoo or piercing policy. Once, any retail business blanched at the thought of having an employee with a visible tattoo. Now, tattoos are mainstream. They just need to be tasteful, in the eyes of many service businesses.

8:55:A prime illustration of the "generational divide," points out Sansolo, are the differences evident in musical tastes. The Black Eyed Peas were hailed as the best Super Bowl halftime act ever--by Gen Y-ers. Anyone above 45 abhorred them, Sansolo noted.

"What music do we play in our stores?" he asked.

8:45 a.m.:Speaker Michael Sansolo is talking about the challenges about understanding the various generations--plural--that compose today's retail clientele. He pointed out that conventional wisdom called for focusing on one generation at a time. You take a bead on, say, Baby Boomers, then switch at some point to Gen X-ers, etc. Today, he notes, there's a hodgepodge of generations, all very different, all with their own hot points, all in need of being addressed.

For instance, he asked how many of the Millennials in the audience used a watch. There were several who did not. Sansolo explained that Gen Y-ers use their smart phones to tell the time.

"The chasm that exists today is wider because it's technologically enhanced," said Sansolo. "This generational divide fueled by technology is getting wider and wider."

Meet your potential customer

2011-11-15T12:13:00.014-05:00

I'm blogging live today from a conference on the consumer. The thread is best read from the bottom up.

2:05: Uh-oh. It's starting to get ugly. Krista Lorio, senior manager of consumer insights for General Mills, is talking specifically about how c-stores can counter the challenge from quick-service restaurants at breakfast.

This is after noting that QSRs are really being aggressive in packaged-food sales--the packaged cookies, the grab-and-go pie slices, etc. Once, convenience stores owned that market. Not anymore. And like other speakers, she's noted recent indications that McDonald's is about to mount a major, major push for sales of desserts and sweets. That factor will undoubtedly bolster QSRs' sales of packaged foods.

"So how do c-stores win? When you're driving down the road and see the Taco Bell or the Golden Arches, how do you become synonymous with food?"

First, Lorio says, you have to become part of the "hunger solution." You have to establish your c-store as a place for attractive food.

Second, the emphasis has to shift to quality and freshness. Lorio suggested such cues as labeling when the coffee was brewed, or what employee is manning the roller grill.

Finally, she says, c-stores have a major advantage because of the breadth of their inventory. You can have a hotdog, but you can grab a bag of chips with it.

So, QSRs, be forewarned.

1:45: Restaurateurs should be very afraid. Kraft's Johnson says a key to bolstering convenience stores' appeal to Millennials is upgrading the food, particularly in regard to health. "The food offering is especially important," he explains. "They've laid out three pillars for us: It has to taste good, it's gotta be good for me, it's gotta be 'real food,' and they continue to want easy and fast."

A step in that direction will not only offset the competition from fast-food, a traditional rival, but also the rising challenge of drug stores stocking food and snacks, Johnson says.

1:30 p.m.: Is the young c-store customer much different from the Millennial restaurant patron? Data being presented at the conference might suggest a yes on first glance. But, on further contemplation, maybe not.

The top three motivators for c-store patronage in that age bracket, according to Eric Johnson, senior director of marketing/immediate consumption for Kraft Foods, sound as if they also hold true for restaurant customers. They're just seldom expressed that way.

Those drivers: Boredom, a need for energy, and a desire to be pleased.

11:40: Hispanics are twice as likely than non-Latinos to buy hot food from a c-store to eat there or take home, according to Garcia.

11:25: Carlos Garcia, an expert on the Latino consumer, has taken the microphone.

"You can see Hispanics as a segment unto themselves, but they can be segmented themselves," with separate behaviors and preferences, says Garcia. "Segmentation must move beyond just language. If you don't get the behavioral stuff right, the language stuff is irrelevant."

"You have to identify with them, with how they see themselves. It has nothing to do with Latinos;" all consumers want to be treated that way, says Garcia.

Word of mouth is essential, he explained. If a service experience is a good one, a Latino will tell 14 others, or double the usual audience for a non-Latino. If the experience is bad, a Latino will tell 20 people, according to Garcia.

11:12: Women tend to book vacations, and they tend to do it after 9 p.m. on weeknights, or during the mornings of weekends, according to Morris. Her observations suggest that restaurants should be cagier about when they promote themselves as a dining option when a family is on the road.

10:55: Only 24% of families meet the definition of "traditional," according to Morris.

10:50: Morris has just introduced a new term: LAT, or Living Apart Together. As she explained, more than 3 million sets of married couples live in different cities, a reflection of the tight job market.

"How can you help them with the logistics they are facing?" she asks.

10:45: Speaker Susan Morris, a former Marriott executive, is making a convincing case that women should be the consumer in a business' cross hairs. They control 33% of the nation's wealth and "are the Chief Purchasing Officers, the CPOs," said Morris. "Is anyone else ready to follow the money?

"Are you getting in the heads of women? Are you getting in the shoes of women?"

Morris is explaining that Citibank has a whole division devoted to landing more female customers, called Women & Co., "This is the type of thing you might want to look into," says Morris.

10:15 a.m.Shhh. I'm writing this from deep inside the camp of what many of you view as the enemy, the convenience-store industry. I'm attending a conference called Consumer insights & Engagement, a meeting presented for retailers by monkeydish.com's parent company, CSP Information Group. The conference delves into the attributes and behavior of consumers. Because those individuals are the same ones whom restaurateurs are trying to land, I managed to get inside the meeting rooms. I'll be blogging the relevant tidbits I hear through tomorrow. So stay tuned.

Enter the mid-tier burger

2011-11-10T08:45:00.002-05:00

Faster than you can say “Forget 99 cents!,” two big fast-food chains are unwrapping burgers that could lure customers away from the low-priced choices that eased the brands through the Great Recession.

Call them mid-tier burgers, priced to fill the gap between each chain’s new premium choice and the smallest sandwiches on their respective menus.

Indeed, “mid-tier product” is the description Wendy’s uses for its W burger, which will be rolled out in December. “This is going out at a $2.99 price point,” new CEO Emil Brolick explained to investors yesterday. “One of the things we want to do is put a product out there that we think is going to encourage people to trade up. Perhaps those individuals that are purchasing [a] 99-cent item will trade up to this product.”

The lure, he said, is a strong flavor and a high-craft aspect to the burger, which has about “two, 2.5 ounces” of fresh beef.

That seems to be the same strategy Burger King is employing with its new BK Toppers line. The burgers are dressed with flavorings like Swiss cheese, mushrooms and barbecue sauce. They’re heftier than the W’s, with 3.2 ounces of beef, but will be priced at $1.99, according to franchisee Carrols Restaurant Group.

That puts it between BK’s regular and Mini burgers on the low-price end, and the new BK Chef’s Choice at the high end, with a price of $4.99.

The two giants aren’t alone in sandwiching mid-priced burgers between their bargains and their biggies. Carl’s Jr. recently added new Steakhouse burgers, arrayed on the menu between its Six Dollar Burger line (typically priced around $4) and its Famous Star singles.

Missing among the converts is the segment’s true king, McDonald’s. First in size as well as sales growth, it’s been relying with stunning success on its beverages and snack-type items, leaving its burger line-up largely untouched since the rollout of the Angus line.

Keeping up with BK's test kitchen

2011-11-08T09:02:00.004-05:00

Burger King’s test kitchen has been such a hive of activity that it’s hard to recollect all the new or newly revised products that have recently moved beyond the test phase. Carrols Restaurant Group, the chain’s largest franchisee, provided a recap to its investors yesterday. Here are the highlights:

--A new, thicker cut French fry that’s being quietly rolled out. Quality Restaurants, another large franchisee, switched to the new sides a few weeks earlier. Carrols adopted the thicker cut in late October.

--Better bacon. The coarser-cut strips are delivered raw to stores and cooked on the premises so they’re a fresher garnish or breakfast side.

--The Chef’s Choice, a one-third-plus (5.5-ounce) premium burger with a price to match: $4.99. Although Carrols officials didn’t say it, the sandwich appears to be Burger King’s answer to McDonald’s one-third-pound Angus line.

--BK Toppers, a line of garnished, 3.2-ounce burgers priced as a middle option, at $1.99. The array fills the gap between the new BK Minis, the sliders that were introduced earlier this year, and the Chef’s Choice and Whopper.

--Soft-serve ice cream, introduced this summer as a loss leader (buy a meal, get one free; Carrols said it provided 100 free cones a day during the warmer weather.)

--Smoothies, which appear to be still in the refinement stage.

Carrols said it’s encouraged by the performance of the products it’s recently adopted. “We are optimistic and hopeful that as we move forward, Burger King will begin to regain market share, expand its customer base and experience sustainable traction in its performance,” said president/COO Dan Accordino, who’ll be taking over the burger operation when longtime CEO Alan Vituli retires at the end of the year.

Accordino didn’t acknowledge the menu change that made headlines this week, the rollout of new kids meals that bring back the chain’s giveaway crown, once a BK signature. The meals are available with apple slices instead of French fries, a counter to the health-oriented option that McDonald’s is currently adopting.

Before I shelve the program guide...

2011-11-07T11:28:00.004-05:00

Some final thoughts on last week’s People Report Best Practices Conference:

The meeting has emerged as one of the industry’s major conferences, and this year’s gathering proved the annual event is no longer merely an HR confab. The number of c-suite residents in attendance dashed that impression once and for all. The focus was on human capital, but the scope of attendees underscored the importance of that resource for all levels of a forward-thinking organization.

Steve Jobs was very much with the conference in spirit, cited by speaker after speaker as an example of an individual who pursued his own way, flouting conventional wisdom at every step. With so many attendees pecking away at their iPads, iPhones and Mac Books, we needed no reminder of that philosophy’s success.

To a surprising degree, the Occupy Wall Street movement and its worldwide spin-offs also drew attention, in conversations between attendees as well as from on-stage speakers. Although the comments were often critical, there was an unexpected level of sympathy with the protestors’ core objection that essential social values have been corrupted by greed.

That dynamic was one more hammer blow to the old certainty that any gathering of chain-restaurant officials will be more solidly Republican and conservative than a bankers’ convention. The diversity of thinking on social issues was evident in the Twittersphere, where posters using the hashtag #prbpc showed a diversity of opinions on matters like economic stimulus programs. I moderated a panel on politics where Craig Miller, a candidate for the U.S. Senate seat from Florida, said he’d rebuke the unemployed to “get off their asses and get a job.” That drew a storm of 140-character objections, and a direct counterargument from a keynote speaker.

The balance in perspectives was underscored by a session at the conference on “connected capitalism,” or aligning business with the interests of communities. The panelists emphasized that conscience needn’t be incompatible with the profit motive. "An unconnected business is not a sustainable business. Period," declared Kat Cole, the president of Cinnabon.

Best new phrase I heard: “One-percenter,” the label used at my dinner table by futurist David Houle to designate a person of outstanding wealth.

A new industry star emerged in the person of John Bettin, the CEO of The Palm steakhouse group and chairman of this year’s PRBPC. I’ve pinned enough conference name badges on my lapels in bygone years to risk Carpel Tunnel Syndrome, yet I’d never had the pleasure of hearing Bettin, who provided a very engaging account of how he’s turning around his upscale charge. He repeatedly flashed a humor and warmth that were very much appreciated by all.

One of the more noteworthy observations from PRBPC co-host Wally Doolin: The imperative of any restaurant chain CEO today has to be to drive sales. He suggested the constant rallying cry of recent years—cut costs with abandon—is waning in its effectiveness as a profit driver.

The overriding takeaway from the conference had to be the essential role that culture plays in employee recruitment, retention, performance, and a restaurant business’ overall success.

Get the petition started

2011-11-02T17:35:00.006-04:00

This is an open plea to Jerry Deitchle from the attendees of the People Report Best Practices Conference: Please, do a book.

Write down all the pearls you shared today about your role as CEO of BJ’s Restaurants. Give us a single handy resource for your folksy expressions, which pack an intelligence that'd prompt any self-respecting consultant to double his rates. We particularly loved how you characterized your current role at one of the industry’s best-performing brands, and how it differs from your prior responsibilities as a CFO:

--You’re no longer a profit optimizer, now you’re a sales driver, instilling that sales-building mindset into the organization’s very DNA.

--You’re no longer the caddy, now you’re the golfer, “the one who actually has to drive the ball,” as you put it.

--You’re a stagecoach driver who’s leading—not driving—a team of really good horses, i.e., your staff.

--“I’m a recovering accountant.”

--Your LinkedIn bio lists your title as Chief Dishwasher.

Some of us might’ve been skeptical about the humility that was ascribed to you by our conference hostess, Joni Doolin. She recounted how you responded when she decided to present you with a People Report award: “What, have you run out of people to give it to?”

But you convinced us with the things you said, like being uncomfortable with having your picture in the program guide alongside the luminaries who’ve previously won the Legacy Award (Doug Brooks, Joe Lee, Lou Kaucic, Phil Hickey.) “Maybe you can put the BJ’s logo in place of my picture in next year’s listing,” you suggested. And we don't think you were kidding.

Finally, we want to hear more advice like the nugget you offered at the close your presentation, which was basically an explanation of how you came to appreciate human resources specialists after initially failing to understand their value. That was a dicey admission to make to an audience of HR specialists.

But you redeemed yourself with your tip: “Never take that first no from your CEO as the final no.” If there’s an HR initiative that’s stoked your passion, come back at him or her, using data—“Always use data; drive data points whenever you can,” because that’s what’ll get to them.

So, Jerry, let’s get to it. Fire up the keyboard and give us some more of your thinking.

Play pooper?

2011-11-02T16:27:00.004-04:00

Live from the People Report Best Practices Conference. See the posts below for some context.

My favorite comment of the conference thus far came from Ken Schiller of K&N Management, operator of several franchised Rudy's and Mighty Fine Burgers restaurants. He was talking about the principles that earned his company a Malcolm Baldrige Award and distinguished it as one of the best places to work in Texas. One of those, he explained, is fun.

"This happens in spite of me," Schiller said in a complete deadpan. "I’m not a good role model in this respect. [Long pause.] But some of our crewmembers are really, really good at it."

During the session, it came out that K&N picks one aspects of its operations to address every year. Everyone in the organization, from CEO Schiller to the part-time crewmember, is expected to focus intently on that one thing.

Another unique aspects of K&N's operations: It has a staff chaplin. "If someone's worried about the lights going out because they can't pay the bill, that person isn't going to be very good at delighting customers," says Schilling.

A chaplin provides the care and attention that make employees better at the job. "How many of you spend time solving other people's problems?" asked his HR chief. A forest of hands went up.

The chaplin handles those situations so other people can focus on their job.

Losing out to iPads

2011-11-02T15:27:00.005-04:00

I'm live blogging from People Report Best Practices Conference. For clarity, you may want to drop down a few installments and read your way upward.

Here's what's happening right now:

Comments from the stage suggest that restaurants' toughest competitor may not be the convenience store, the supermarket, or even the bank that holds a potential patron's mortgage. From what the presenters have been saying, the challengers really hurting restaurant sales may be the Apple Store and BestBuy.

Several speakers have mentioned the paradox of people cutting their discretionary spending, then lining up to buy iPads. It's part of what seems to be a far more sophisticated trend than the usual straight line indication that the economy is improving or declining. For instance, it was noted that sales of craft beers and wines are improving, at the expense of less expensive choices. They may be dining out less often, but the indulge a little when they do. Or they take the money they saved and go out and get a big flatscreen TV.

That, they suggested, tends to explain why macroeconomic gauges indicate the economy is improving, but things don't look that good when you drill down.

Turnaround tale

2011-11-02T15:07:00.007-04:00

I'm blogging more or less live from the People Report Best Practices Conference. Here's the first installment for the kick-off afternoon session:

We’re literally 20 minutes into the first general session of the conference, and already we’ve heard a turnaround story that pushed the ROI on attendance into positive territory. It was John Bettin’s account of how The Palm survived during the economic downturn.

In early October of 2008, when the financial community plunged into near-ruin, fine-dining fell like a rock. About a week later, Bettin joined $85-a-head Palm as the first CEO to be recruited from outside the founders’ families. “At least I could claim [the collapse] it wasn’t my fault,” he cracked to the audience of about 300 chain execs.

The private owners of The Palm pulled him aside on Day One and said, point blank, forget about the usual transition into the job. We want you to focus on meeting our obligations to the banks.

Bettin plunged into the task. Given the direction of the economy and fine-dining sales, he realized right away that the venerable steak brand wasn’t going to meet its financial obligations. It was a life-or-death struggle, a crisis that required extraordinary measures.

One of the questions the situation raised was what to tell the Palm’s venerated staff, who could make or break a recovery with their attitudes. “We decided to be 100% transparent,” explained Bettin. “We let them know that we were in trouble, that we would be trying different things, that our plan might change daily.”

As the negative trends continued, the company had layoffs and salary cuts. “Be we also launched a recognition program with Tiffany pens that cost us $100,000 a year. We started a newsletter that cost us $40,000,” recounted Bettin.

The company wanted the employees to stay engaged and play a crucial role in the survival struggle, even as the bad news was communicated to them.

“Your grandmother told you, ‘Honesty is the best policy.’ I can alter that and say transparency is the only path if you want to succeed,” said Bettin. “We celebrated every day we were less negative than we had been.”

As a result, “we came out of it faster than a lot of people,” and same-store sales have remained positive, he said. “It’s not me, it’s not the leaders, it’s our 1,600 employees.”

If you'd like me to focus on particular aspect of the conference, just e-mail me at promeo@cspnet.com, or send me a message via Twitter, @peterromeo.

'So, what do you remember about him?'

2011-11-02T08:54:00.001-04:00

So many industry leaders have been called by reporters for comment on Herman Cain that the solicitations were a topic of conversation at the People Report Best Practices Conference party last night.

Cain would be pleased to know he’s remembered by his former colleagues in foodservice, but all professed they declined to reminisce about him with the media.

What's the right way to grow overseas?

2011-11-01T16:06:00.003-04:00

Wally Doolin, chairman Of Black Box Intelligence and a recovering chain executive, doesn’t flinch at bringing up the sometimes controversial issue of brand ownership. At last year’s People Report Best Practices Conference, he lobbed the firebomb observation that control of a concept by an investor, like a private-equity company, might prove a troubling change for an industry that was built largely on entrepreneurship. “Usually,” he noted at the time, “enterpreneurs make the decision that’s right for the business.”

At this year’s conference, which started today with a new session on the international market, he touched on a sensitive issue again by asking two U.S. brands what ownership model they’d have preferred to use in their overseas expansion. If they could do it over again, he asked officials of Starbucks and T.G.I. Friday’s, would they do more franchising? Less? How about joint ventures? What do they see as the ideal ownership model when you head abroad?

Nick Shepherd, CEO of Friday’s parent company, said it’s not a matter of what was right or wrong. Friday's chose a particular route because of factors that prevailed at the time. Any U.S. chain looking to grow abroad may have to make compromises because of it's situation, like not having enough capital to blitz a market. That would suggest franchising. But to woo a local partner, and maybe local financiers, a chain might have to hold a stake in the overseas stores. That'd mandate a joint venture.

Joint ventures can work beautifully, he stressed, but it’s important to structure it correctly. Having less than a 50% stake can mean surrendering too much control of the brand to the local operator.

You might have to start with a smaller stake, just to have some skin in the game, but it doesn’t make sense to have 15 or 20 percent because it puts you in a passive position, agreed Shepherd’s fellow presenter, Joe Canterbury.

Canterbury, Starbucks’ VP of international business development, noted that the coffee giant now wholly owns its restaurants in a number of foreign markets, a far cry from the small stake it held when it established its first beachhead, in Japan. But back then it needed to "have some skin in the game" because the brand was untried outside of the United States.

Franchising provides more control, they suggested, but at some point the local operator’s interests are going to diverge from the franchisor’s. Canterbury characterized it as inevitable.

Whatever model is pursued, they agreed, the key is finding the right local partner. The tenor of that relationship will be crucial in good times and in bad. A good partner can get you the sites and people that ensure success, stressed Shepherd. And even when interests diverge, a strong relationship enables you to resolve the situation amicably.

Shepherd noted that everyone in the room has had the experience of picking a franchisee who looked great on paper but failed to meet expectations as a business partner. It happens overseas, too, but what goes wrong in a store in Singapore can spread across the globe in a flash.

Doolin ended the session by asking the pair to recount one of the humorous instances that U.S. chain executives invariably encounter abroad.

Canterbury recalled how Starbucks worked with local authorities to resolve a trademark dispute. During the negotiations, they sat in front of a 20-foot-high portrait of Russian strongman Vladimir Putin, trying not to show the intimidation they felt.

Shepherd recalled a business presentation he co-hosted before his days with Friday's. His boss stressed at the time that they were not to mention an obscure sporting event to the 500-plus Europeans in attendance because it might offend them. Instead, he made a reference to Nazis in jackboots. Then he threw the emcee duties over to Shepherd.

What do you want to know?

2011-11-01T13:34:00.001-04:00

On Thursday morning I’ll be moderating a panel on what restaurateurs need to know to participate in the political dialogue leading up to the 2012 elections. During the session of the People Report Best Practices Conference, we’ll be fielding questions about issues of particular interest to the business. We want to arm the trade with the knowledge and confidence to counter partisan bickering with reasoned, substantive discussion.

If that brings to mind any questions you’d like me to ask the panel, please drop me a line via e-mail (promeo@cspnet.com) or Twitter (@peterromeo). The group consists of Dawn Sweeney, CEO of the National Restaurant Association; Craig Miller, the former restaurant-chain chief who’s campaigning to become Florida’s next U.S. Senator; and Josh Davies, the Sage Hospitality executive who ran for a seat on Denver’s City Council.

I look forward to hearing what you’d like me to ask. If your question is posed to the panelists (and I’ll do my best to get them heard), I’ll try to cover the responses here.

Raising a glass to Happy Hours

2011-10-28T09:12:00.002-04:00

If you doubt the Happy Hour is making a comeback, consider the sales elixirs two heavy-pouring restaurant chains are currently sucking down.

The pair acknowledged this month that they’d uncorked what’s again becoming the most common sales lubricant in casual dining. Brinker International was the more recent to join the likes of P.F. Chang’s and Cheesecake Factory, announcing Wednesday that its Chili’s chain was rolling a “full-blown Happy Hour program,” in the words of CEO Doug Brooks.

Speaking to investors, Brooks was sketchy on details. But he divulged that the lures for the post-work crowd would include sangria, an upgraded version of Chili’s signature margaritas, and new food offerings at the bar.

He described the push for evening guests as one of Chili’s “very big initiatives” for rebounding from the Great Recession, which walloped all of casual dining. The rollout is right up there in strategic importance with the redesign of the concept and the changeover to more efficient kitchens, he stressed.

The financial analysts listening to Brooks refused to let his tease pass without amplification. Pressed a bit, Brooks described the new program as a natural outgrowth of Chili’s re-imaging, which extends to such bar enhancements as the installation of better flat screen TVs. He also spoke cryptically about changes that put the bartender in a position to field more drink orders.

But Brooks rebuffed requests for any sales info from the program’s market tests, which he characterized as having just concluded.

Three weeks earlier, Ruby Tuesday provided a few details about its Happy Hour program, which is already in place at the diversified company’s namesake chain (Ruby Tuesday now has more brands in its portfolio than some of the bigger private-equity firms.) CEO Sandy Beall noted that the draws include half-price appetizers and $2 tacos and sliders.

“The investments we've made in our beverage lineup and bar program should help us reach our long-term goal of increasing alcohol sales to 12% of revenue,” Beall said in Ruby’s conference call with investors.

Looks as if Ruby Tuesday is going to have a lot more competition in getting there.

Only yawning over new products is coming from the R&D team

2011-10-25T10:07:00.006-04:00

Here’s a link that restaurant chains might want to check out for the well being of their menu development staffs. It’s an eBay listing for army cots. Clearly R&D teams have little time to swap chef’s whites for PJs when they’re cooking up new customer draws at the current pace.

Oh, and don’t forget to visit this site, too. It’s an online pharmacy that extends a price break on big tranquilizer orders. The products coming from the big brands’ test kitchens have typically been make-or-break products. Did the team come up with a new menu milestone, or will their handiwork be remembered as the new New Coke?

Burger chains are changing their burgers, pizza chains are reformulating their pizza, coffee chains are re-percolating their core coffee line, Mexican chains are rethinking what they put in a tortilla.

Think about it: With McDonald’s about to add a new chicken finger food called McBites, and Burger King introducing the Chef’s Choice this week as its new premium burger, almost all of the major fast-food chains are fiddling with their menu signatures.

What’s more, the alterations are introduced with direct or implied criticisms of the versions they replaced. Domino’s has made the most noise on that front, all but asking customers, “How could you have eaten what we formerly sold you?”

But Wendy’s isn’t much more discrete in its push of new French fries and burgers. Ditto with KFC and Kentucky Grilled Chicken. The only one showing subtlety is Taco Bell, which is quietly taking some salt out of its signatures.

McDonald’s hasn’t revealed what sort of noise it’ll make about McBites, a chicken version of popcorn shrimp (essentially deep-fried pieces of chicken meat, like the popcorn selections that have long been on the menus of KFC and Popeyes.) You can bet it won’t knock Chicken McNuggets or Chicken Selects in the introduction, but you have to wonder if customers will nonetheless regard McBites as an obvious alternative to McNuggets.

We’ll find out when McDonald’s rolls the new product next year.

The remake of fast-food signatures won’t end there. As RestaurantRealityCheck noted last week, Burger King is trying a new, thicker fry. Its stated goal of appealing to more women and children portends even more changes in products.

Might there even be some riffs on the Whopper?

This isn't the first time that such a thing has happened. In the mid-1980s, BK indeed changed the specs on its holiest of signatures, revamping the size of the Whopper's patty.

McDonald's tried to rejigger its bigger burgers so they could be garnished with lettuce and a tomato slice that wouldn't be rendered unpleasant by the heat of the patty they topped. Later, KFC introduced a bone-in roasted chicken, and Taco Bell tried reduced-calorie versions of its main items.

They all joined the Edsel in the annals of product failures.

But there are different dynamics--and learnings from those misfires--in play this time. Technomic noted in releasing some research yesterday that the fast-casual sector is influencing restaurants of all stripes. No where is that impact more obvious than in the traditional quick-service market, which has the most to lose from fast-casual's rise. Is it really a surprise that former Wendy's CEO Roland Smith publicly compared the chain's new burger line to what's available at Five Guys?

Talk amongst yourselves about it. But try to keep the noise down. The R&D teams need to catch up on their sleep.

Forget Twitter. Chipotle scores big with foil.

2011-10-21T09:52:00.001-04:00

Social media may be the new frontier in restaurant marketing, but Chipotle Mexican Grill said it did just fine this summer with nothing more than some gold foil.

The industry’s non-conformist chain decided to call attention to its push for better ingredients by wrapping the concept’s torpedo-sized burritos in gold instead of the usual silver foil, which has figured into billboard campaigns in the past. The notion was subtle, to say the least. The gold standard—get it?

Well, people did. Executives revealed to investors yesterday that 94 percent of customers who saw the gold foil understood the implication that Chipotle uses better ingredients, strongly reinforcing the chain’s Food with Integrity pledge. Research also indicates that the campaign boosted awareness of Chipotle by 19 percent, said Steve Ells.

Unconventional marketing is being used more frequently by the burrito maker. Ells noted that an animated short movie illustrating the comeback of small-scale farming is currently being shown in 10,000 theaters, where some 20 million people will view it. It was funded by Chipotle as a way of calling attention to better agricultural methods.

It’s already been viewed more than 1.7 million times on YouTube, Ells said.

He noted that a message about sustainable farming was delivered about 32 million times through coverage of Cultivate Chicago, a recent food and music festival sponsored by Chipotle in the Windy City. The event drew some 16,000, who came to sample the specialties of big name chefs, hear some big-name bands, and maybe learn about sustainable farming in the process.

“We've always believed that if people discover where their food comes from, the more they'll appreciate what we do at Chipotle,” Ells told investors during a conference call.

Ells said that a second Cultivate festival will be held next year, most likely in the chain’s headquarters city of Denver.
Not on the schedule, he noted, is the development of a second ShopHouse Southeast Asian Grill. The company plans to focus on fine-tuning the prototype, which opened a few weeks ago in Washington, D.C.

Ells disclosed that patrons of the first ShopHouse have complained about the spiciness of the food. Those were the same sort of comments that he heard when the first Chipotle opened, Ells said.

With apologies to good publicists

2011-10-14T14:56:00.002-04:00

Recent times have certainly scrambled the conventions that restaurants once knew as standard operating procedures. Most were adjustments to the grueling economic conditions. But if you have an explanation for the self-serving practices some public relations agencies have adopted to rep restaurant clients, please pass it along.

Consider this announcement from today: “Phoenix Marketing Associates restaurant client Tryst Café named one of Phoenix’s Best New Restaurant by Phoenix Magazine.” That was the headline of the press release, and in case you missed it, it was repeated in the first paragraph, or what we in communications know as the all-important lede.

I’ve always been the target of public relations, not the practitioner. But someone who’d just been thawed from a 50-year-long cryogenic nap would know the client’s achievement should get higher play than its affiliation with the agency hawking the news.

I shouldn’t pick on that one agency, because it’s hardly alone. It stuns me to see announcements on the news wires about a PR outfit picking up the 1-2-3 Café or the XYZ Burgers chain as a client. If that’s the best news hook an agency can find about a new customer, then the business might want to rethink its choice. The objective there is to draw journalists’ attention to the operation, and I for one am not going to pick up the phone for a story or online posting because someone new will be taking my call. Give me some substance.

It’s no better to use an attributed quote from an outside PR rep, no matter how prominent he or she might think they are, in press materials about a restaurant or chain. I’m not going to give your firm free publicity by using a quote like that. My readers are interested in the operation and its executives, not the information gatekeepers.

The fellow traveler of that puzzling phenomenon: Listing a PR or communications outfit as the agency of record for a chain. (Note that I didn’t say the advertising agency of record, which is a whole different matter.)

That’s growing more common as brands contract outside parties to handle their social media efforts. But unless the client is selling records as part of its business, I don’t care who its agency of record might be. I want substance, not whom I might refer to a restaurant acquaintance looking for media help.

A final word of advice to restaurateurs looking to get the best representation from their PR agency: If “exciting” is the most frequently used word in a hired PR gun’s press releases, buy him or her a Thesaurus. That sort of hyperbole went out with Ramblers.

The same holds true for “delicious,” if you’re talking about food, or “world famous” and “stunning,” regardless of what’s being hyped. Show, don’t tell. Those words translate for any journalist into “I don’t have a clue as to how to make my client’s products or services sound enticing enough for coverage, so I’m lapsing back to the safe and vapid.”

To the many, many friends who admirably handle public relations for restaurants, my apologies for raising a criticism about your profession. Your efforts in helping me get accurate information on a timely basis is appreciated. I could do without the attempts at spin-doctoring, but hey, I know who’s cutting the paycheck.

But your profession needs to keep its head in these tough times. Confusing your business interests with those of your clients is not going to help your cause in the long run.

Bagging chain conformity

2011-10-12T10:55:00.004-04:00

Once upon a time, the only matter left to the discretion of a restaurant franchisee was the route he or she drove to work. Exact conformity to a chain’s procedures, design and menu were enforced with a vigor that had Third World dictators muttering, “Whoa. Those dudes are serious.”

Contrast that with some recent chain-restaurant openings. At the new Burger King in Ionia, MI, you’ll be served a thicker French fry and coarser cut bacon. Further north, on the other side of the border, your options include two new poutines, or sauced fries.

At the new Johnny Rockets in Sunrise, FL, you can play arcade games or watch pro sports on TV in the bar. It’s also the only restaurant in the chain to offer pizza.

The newest franchised Johnny Rockets in Cincinnati lets patrons get wine and beer to go. Breakfast is also available.
The list goes on and on. Clearly iron-fisted conformity is out, and adaptation to the realities of a local market, even an individual block, is the smarter business mindset that’s replacing it.

That’s partly due to the growing militancy of franchisees. No longer can the home office dictate how their businesses will run. When the franchisor tries, it’s likely to end up in court, as Burger King, Wendy’s and KFC have learned.

But it’s also smarter business. Patrons in downtown Miami might not want the same choices as the snowbirds staying by the choice or the trendinistas roller-blading through South Beach.

One of the trends that’s subtly helped fast-food in recent years has been the embrace of market-by-market pricing, which is really a version of yield management. Chains still advertise a chainwide bargain to get the most from their ad budgets, but they do it more selectively.

Another other factor is the undeniably increase in importance of franchisees. Chains have mothballed the rule of thumb that one-third of the system should be franchisor-operated to keep the home office focused on day-to-day functions.

But perhaps the main impetus is the realization that franchisees are the best consumer sales force a chain can have. No one knows the business and customer preferences like the ones who are immersed in the field every day.

No wonder headquarters are loosening the reins. It one of the most positive after-effects to emerge from the Great Recession.

Do restaurants have a height bias?

2011-10-10T11:09:00.005-04:00

Working in a restaurant kitchen is a tough calling. It's hot, laborious, high-paced, often involving big egos and hot tempers. But here's a challenge that was new to me. It's offered here in hopes of stimulating some dialogue on a challenge of restaurant kitchens that's been unaddressed, as far as the writer and I are concerned. It's an unsolicited note that I was e-mailed last week:

First off I have been in and out of the food business for 20 years and the reason I had to get out of it was because the same problem exists where ever I would apply. I have a handicap which more and more cooks and chefs are experiencing and is an ever growing concern for doing what we love. I would have stayed in if there was reasonable compensation but there really isn't any that I know of. I am 6 foot 5 inches tall and the industry is based for people 5 foot 1 inch to 5 foot 11 inches.

We have to work in short spaces and deal with hitting our heads on hoods that don't have a standard height minimum of 7 feet.

I feel this needs to be addressed if you really want the industry to be fair. The longest I ever stayed was when I had my own restaurant and everything was built for my height.

If you need a spokesperson just call, but I feel you might have plenty of others you know who would be happy to start the ball rolling. I mean [everything] from equipment to tables and seating is based on the shorter individual. If you say one size fits all then please say that all recipes should taste like Betty Crocker. I even had to leave the Culinary Institute of America because my lower back couldn't take the low work surfaces and that was a dream I hated to give up on.

I love cooking so much it has never been employment to me. I'd cook for free if I knew the rest of my bills were covered.

Here is a chance to help thousands of us tall lovers of culinary arts to remain in the field we have devoted our selves to. If you have any questions please feel free to contact me.
--Steven Bodley
Warren, Ohio

So I open it up for discussion: Any other chefs or cooks out there who've encountered the same situation? And what do the rest of you think?

A-ha's that might've slipped past you

2011-10-07T16:25:00.004-04:00

You can’t miss a wave that’s reshaping the restaurant business. Harder to spot are the ripples that could swell into powerful forces. Consider these recent developments, for instance:

‘Menu disclosure’ is redefined. The term was once synonymous with posting calorie counts and other nutritional metrics so consumers could make an informed choice. Now we’re seeing a secondary designation.

Amid all the hoopla over the opening of Chipotle’s ShopHouse Southeast Asian Kitchen was a little-noticed detail brought to light by the Washington Post: Not everything on the menu was what it purported to be. Two of the sauces for vegetarian were actually made with fish stock, a huge no-no to the more orthodox non-flesh-eaters.

As the Post subsequently reported, ShopHouse quickly rectified the situation by adding an asterisk to the menu listings, alerting customers that the sauces are non-vegetarian.

It must’ve been déjà vu all over again for the concept’s parent. About a week beforehand, a tweeter with a large following voiced 140 characters’ worth of indignation that Chipotle’s pinto beans were flavored with bacon. Co-CEO Steve Ells called the tweeter (he’s an editor of Maxim, the breasts-and-beer magazine), apologized, and explained that the menu description had been corrected.

Meanwhile, Wendy’s drew fire because of its switch to buttered hamburger buns for the new Dave’s Hot ‘n Juicy line. Websites pointed out that the butter could be a hazard to consumers who are allergic to dairy products, and faulted the chain for not flagging the newfound danger more clearly on its website.

Franchisors could be seriously ding’d by the tax man. It slipped past almost unnoticed, but KFC lost a landmark court decision this week that should worry every franchisor. The U.S. Supreme Court rebuffed an attempt by the Yum! Brans holding to keep Iowa from assessing it for state income taxes.

The franchisor pointed out that it doesn’t operate a single restaurant in the state; all the units there are franchise stores. It doesn’t even have a single employee.

But the Supreme Court rejected the appeal. KFC will have to pay the $250,000 that Iowa says it’s due in income taxes on the franchise royalties and fees that were channeled to chain headquarters in Kentucky.

Two days, two bankruptcies of Sun Capital holdings. Are economic realities catching up to the private-equity raiders?
No PE investor gobbled up as many restaurant brands before and during the Great Recession as Sun, whose portfolio extends from Captain D’s to Bar Louie. The acquisitions included stakes in Friendly’s and Real Mex, parent of the Chevys, El Torito and Acapulco chains, both of which are now being run under the scrutiny of a bankruptcy court. Sun is undoubtedly the owner of more concepts than any other entity in the business, and is likely one of the bigger operator-franchisors as well.

It’s become an industry parlor game to speculate about what Sun will do with those holdings. An IPO for a select chain? Or for several, packaged together? How about a sale to other PE companies? Or to a strategic buyer? Maybe some will be crunched up and sold piecemeal for their locations, the way an auto is sold for parts.

It’s safe to say that Sun didn’t buy anything with a hope of seeing it go bankrupt. What does that portend a company with that much vulnerability to a restaurant downturn on its books?

Looks as if the parlor game has just been updated.

Danny Meyer's 4-star break with convention

2011-10-05T14:00:00.002-04:00

I’ve witnessed some amazing things in 27 years of covering restaurants. What Danny Meyer is doing with Eleven Madison Park is definitely on that list as of today—ironically, the very day Michelin awarded the midtown restaurant a third star.

Meyer will have a chance to relish the resulting upsweep in business, but not for long. As New York Times reporter Glenn Collins reported in a Times blog, Meyer is selling Eleven Madison to its manager and executive chef.

The reason? The pair admitted to the famed restaurateur that they hoped to build something of their own while still on the payroll. Meyer wasn’t comfortable with his employees doing double-time as competitors. But he didn’t like the idea of parting with the duo because they were critical to maintaining Eleven Madison’s quality and success. It has a four-star rating from the New York Times, which is harder to land than a rent-controlled two-bedroom apartment with a doorman. In Gramercy Park.

So, Meyer said, he decided to sell them the place. No bidding war, no pitting suitor against suitor. Just a deal hammered out between mentor and protégées.

One more extraordinary thing: The turn of events is spelled out not in Meyer’s blog, but on the galleys of a book that will be published next month. Meyer provided the account in the forward to “The Eleven Madison Park Cookbook.”

He stopped short of revealing the specifics of the deal, like the price. But Collins reported that the transaction is expected to close by Jan. 1.

Finally! A list of the most common restaurant office sounds

2011-09-28T13:20:00.007-04:00

There’s no shortage of rankings in the restaurant business, as you’ll discover when the October issue of Restaurant Business arrives (you can also view it via our free app from iTunes.) As we report, at least five new listings of the best and most loved restaurant chains were released toward the end of summer—revealing that the industry has no fewer than four “best” chains (add a fifth if you believe one of our competitor’s rankings, which appeared too late to be included in our print round-up.)

There’s none of that confusion in the roster that’s been conspicuously overlooked in the recent fit of ranking, listing and arraying. Damn the politics!

Here, plugging the gap at long last, is the Loudest Sounds Heard This Summer from Chain Headquarters:

'Hmmm.' The industry has been agog over the debut of Chipotle’s ShopHouse Southeast Asian fast-casual concept. But cooler heads have remembered that Chipotle isn’t the first celebrated restaurant operation to fire up the wok. Cheesecake Factory similarly quickened pulses when it unveiled RockSugar Pan Asian Kitchen, and Ruby Tuesday tried unsuccessfully to keep the buzz down about its purchase of the Wok Hay fast-casual concept a few years ago. Neither of those have stunned the industry. Indeed, officials of both the casual dining chains say the ventures are still in the evaluation phase, and Ruby has transformed Wok Hay into something much different from what it bought.

Factor in the evident challenges of Pei Wei Asian Diner, P.F. Chang’s fast-casual sister, and you have several counterbalances to the ShopHouse hoopla. Of course, the whole MP3 phenomenon failed to boom until the iPod hit the market. But the breathless betters on ShopHouse’s success should at least splash some cold water on their faces and remember history.

‘Kill our signature’ When you’re known for your burger, it’s pretty dicey to mess with the recipe. Wendy’s says that’s why it spent four years on the development of the new Dave’s Hot ‘n Juicy. Former CEO Roland Smith boasted that it’s better than anything you’ll get from In-N-Out or Five Guys (both of which appeared atop several of the Best lists.)

But the burger chain is hardly the only quick-service brand to mess with its signature. Witness Domino’s launch of artisan pizzas, which are specialized versions of the new pizza the chain added about a year and a half ago.

But the list goes on from there. Sonic revamped its Coney, a signature of the quirky chain. Burger King is messing with “stuffed burgers,” while Carl’s Jr. and Hardee’s give “steakburgers” a try.

The one constant: All of the new items promise a considerable jump in quality, a reflection of the new mantra that value today means far better quality at a not-much-higher price.

‘I don’t care if sushi’s our specialty. Give me a burger!’ This is a really bad time to be a cow. Just when you think the upscale burger market has crested, along comes news of more big-name entrants, like Domino’s founder Tom Monaghan, or popular retail brands like Bubba Burger.

If the brand can’t do a true burger, it tries a similar product, like the steak sandwich at Panera Bread, or the countless cheeseburger pizzas that are now available.

Is it just me, or have the Chick-fil-A cows looked a little more nervous as of late?

‘Get me a headhunter! And keep them from calling the team!’ The restaurant industry has always been a continual game of musical chairs. When sales or profits sag and the music stops, a scramble erupts for new CEOs, ops specialists or marketing hotshots, which seem to be in greater than usual demand this year. Clearly we’re in the midst of that right now. Consider the recent changes: New CEOs or presidents at Wendy’s, Hooter’s, California Pizza Kitchen, Church’s, O’Charley’s, Texas Roadhouse, with a vacancy at Dunkin’ Brands’ international arm.

With industry veteran Brad Blum using his substantial stake in Cosi to demand the top job there, we might also add that situation to the tally.

Marketer changes include the departure of Dairy Queen’s chief brand officer, Michael Keller; the addition of Pepsico veteran Scott McDaniel to CEC, the parent of the Chuck E. Cheese’s chain; and the recruitment of Garfield the cartoon cat to serve as the new mascot of Straw Hat Pizza, the 53-year-old regional chain.

There are a number of executive placement services that work only within the restaurant industry. It’s a shame that they’re not publicly traded, or they’d bump Chipotle and McDonald’s as the hot foodservice stocks.

It's no rubber vomit

2011-09-26T12:53:00.002-04:00

If you’re over 25 or haven’t worked a drive-thru window, you’ve probably not been splattered yet by the latest craze in restaurant prank-dom. But fear not, you legions who still chuckle at the thought of a Whoopee Cushion. This is no squirting lapel flower.

Indeed, coning may be the dumbest thing since the Macarena. Here’s how it works, as you can see for yourself via countless YouTube postings.

A customer pulls up to the drive-thru window of a fast-food place to get his or her soft-serve ice cream cone. But instead of taking the treat by the cone as it’s handed through the window, the perpetrator grabs it by the top so the ice cream squishes through the jokester’s fingers.

As far as I can tell, the hilarity is not seeing the ice cream fly in all directions, but in witnessing the restaurant employee’s face as the patron proves to be an ass. Ideally, the person in the passenger seat will capture the scene on a phone and post the video on a sharing site.

For added hilarity, keep holding the treat by the ice cream, turn your hand so the cone is on top, and start eating it that way, as if the situation is perfectly normal.

Video-taped perpetrators have included Justin Bieber, who should have his bowl-sculpted hair smacked, as well as several other young celebrities. Their clips have been viewed by millions of YouTube fans.

At least the prank isn’t as dangerous as the fire-in-the-hole gag that reigned a few years ago. With that fit of dumbness, a drive-thru customer would take a drink or a gooey item from the employee, yell “Fire in the hole!,” and fling it back at the staffer.

There, too, the objective was to have someone else in the car capture the scene on video and post it to YouTube or the like. But the fad came to a particularly ugly end when a prankster ran through the gag at a Boston Market, flinging a platter of hot mac and cheese at the drive-thru attendant. He suffered second-degree burns, and the jokester was arrested.

You can only hope that coning loses its appeal very quickly. Stupidity that profound is an embarrassment to us all.

'They keep pulling me back'

2011-09-19T09:34:00.004-04:00

What is it about the restaurant industry that keeps pulling people back into the fray? In recent weeks we’ve had three more examples of grizzled vets who’ve made enough money to fund a life of leisure. But instead of spending their remaining days on a racetrack or golf course, they’re looking for a new restaurant concept to hatch or grow.

Consider, for instance, Brad Blum’s newfound interest in Cosi, the upscale sandwich concept. Blum rose to prominence as the cappo of Olive Garden, which was wheezing a bit when he took it over. He righted it and then moved on to Burger King, where a sale of the company did him no good. Most recently, he headed Romano’s Macaroni Grill, seemingly a natural fit after his stewardship of Olive Garden.

Last week Blum alerted the SEC that he’d amassed a 6.75% stake in Cosi. “As of Sept. 6, 2011, Blum Growth LLC is now an active investor,” Blum said through his investment concern.

The filing notes that Blum wants a say on the composition and top management of Cosi (its former CEO, Jim Hyatt, just resigned). I’m going to go out on a limb here and predict that Blum wants a role in each governing body.

But he’s not the only vet who’s reactivated himself for a new restaurant challenge. Craig Nickoloff sold the high-volume Claim Jumper casual chain to the private equity company Leonard Green & Partners in 2005 for a reported $200 million. The amount seemed fitting for a concept that took the California gold rush as its theme.

Just to add a little icing to the case: Claim Jumper filed for bankruptcy a year ago.

Nickoloff could be kicking back with the wife he met while she was covering him and Claim Jumper for Nation’s Restaurant News, a distinction that made her a legend among those of us who write about the business (I’ve finally relinquished my dreams of a Rachel Rae Romeo, primarily because my current wife insisted.)

Instead, Nickoloff has teamed up with acclaimed West Coast chef Michael Cimarusti (of Providence restaurant) to buy Silver Spoon, described by Eater Los Angeles as “West Hollywood’s ancient coffee shop.” The pair hasn’t revealed its intentions for the space, but official filings say the location will do business as Connie and Ted’s.

Watchers are wondering if the venture might also involve Nickoloff’s son, Nick, who owns and operates three namesake restaurants.

Meanwhile, Ohio’s Cameron Mitchell is putting the finishing touches on his eighth Ocean Prime upscale “supper club,” in the Buckhead area of Atlanta. Two more branches are under development, according to Mitchell’s Columbus-based company.
The chain building comes just four years after Mitchell sold an earlier seafood chain, 19-unit Mitchell’s Fish Market, to Ruth’s Chris as part of a $94-million deal (two steakhouses were also part of the purchase).

To call Mitchell irrepressible is an understatement. I met him when he was sleeping on the floor of a co-worker’s hotel room so he could afford to attend an industry event. He was determined to open a restaurant concept of his own and wanted to learn everything he could.

Seems that desire has only grown stronger.

Blurring restaurant lines

2011-09-16T12:23:00.003-04:00

You can make a strong argument that line-blurring has been the most successful restaurant strategy of the last 20 years. Without the daring to nudge a familiar type of restaurant into another category’s turf, we never would’ve had fast-casual, a blurring of the lines between fast-food and casual dining, or hybrids like burger joints run by celebrity chefs (think Daniel Boulud’s CBDB’s or Marcus Samuelsson’s Marc Burger).

Now two of the earliest and most successful proponents of line-blurring are smudging a different boundary.

By the industry’s standard definition, Mimi’s Café and Cracker Barrel fall into the category of family restaurants, or what were called coffee shops in the pre-Starbucks age. A key feature was serving breakfast, a rarity among full-service places. Indeed, a heavy morning clientele was one of their signatures. Ditto for selling more soft drinks than wine, beer or spirits. And their menus were as broad and mainstream as what we in the East would find at a classic diner.

But Mimi’s and Cracker Barrel never exactly fit the specs. Yeah, they do considerable breakfast business. But these aren’t your father’s Denny’s or Village Inn. Slip into a Mimi’s at lunch and you’ll find plenty of office workers, not families. And the menu is more ambitious than the roster for many upscale casual places.

Cracker Barrel also has that casual feel, and its reliance on a country-store schtick is reminiscent of the heavy-duty theming that’s common in casual dining (think Friday’s, Lone Star or Olive Garden).

Now those non-comformists are blurring the line again, this time by shifting into the pricing strata right below them. Both have just unveiled new lunch deals that rival the value and convenience afforded by fast-food outlets.

Cracker Barrel’s new offer is a line-up of daily specials that sell for $5.99 each. Consider for a moment that $5 is the going bargain rate for a sandwich at sub specialists like Subway. At Cracker Barrel you can pay just a buck more for meatloaf and mashed potatoes, a chicken pot pie, or a turkey platter with the usual trimmings.

Mimi’s is stressing speed of service along with the low prices of its midday options. It guarantees that its new Express Lunch service will take no more than 15 minutes. For $6.99, that gets the customer servings of soup and salad. For $1.50 more, they can get the soup or salad with half a sandwich. A soda adds just another $1 to the check.

Mimi’s may be venturing into fast-food territory, but it’s not dropping its competitive challenge to casual places. Also new on its menu is a takeout deal that might turn the heads of consumers who use casual restaurants’ curbside delivery services. Priced at $25 each, the meals are marketed as sufficient to feed a family of four. The options include such comfort favorites as pot roast, chicken parmigiana and turkey.

It’s also added a new Happy Hour deal: wine flights for $5.

Clearly the chalk marks between segments are still being smudged.

What I learned at school yesterday

2011-09-14T09:17:00.002-04:00

Every semester I’m privileged to address a class at New York’s Institute for Culinary Education, a springboard for entrepreneurs to become restaurant proprietors. My assignment is to provide an overview of the hot and fading concepts of the moment. But I learn more than the students because their feedback provides a sense of the direction they intend to steer the business. And I’m here to attest we’re about to turn back to the classics.

The youngsters use the opportunity to ask me about the concepts that have caught their fancy and what they might like to open after graduation. In recent years their focus has been on the avant garde—places like marshmallow shops, carts of all stripes, a barbecue place that borrows the dress codes of Twin Peaks and Hooters, and a wine shop and bar for Gen Yers.

But yesterday’s class asked about formats like cafes, bistros, wings places, tapas bars, neighborhood pubs and sports bars. It wasn’t as if they were oblivious to how many examples of those concepts are in the market already. To the contrary, they were one of the more informed groups I’ve addressed; they’d clearly done their homework in scoping out the state of the industry and where opportunities might lay.

That research had convinced them there’s room in those crowded fields for a newcomer that could differentiate itself through execution. And they had some definite ideas about how they could do it better.

I was struck by how many times the students mentioned comfort as one of the attributes that would push their ventures ahead of the pack. Novelty wasn’t that important to them.

It was a marked difference in orientation from past groups, but this old-is-new mindset makes sense. The sport-dining sensibility that reached its apex with molecular gastronomy is giving way to a more grounded appreciation of fundamentals—good food in a comfortable atmosphere with friendly service.

'Attention, Central Casting'

2011-09-13T22:46:00.004-04:00

We’ve decided to recount the week’s restaurant-related developments in cinematic form. So heads up, Casting. Here’re the players we’ll need to play the central characters.

Grab a guy in whites and put him in a serious suit. Yesterday’s announcement of a new president for the La Madeleine bakery-café chain probably took no one by surprise. Phil Costner, as COO, was the heir apparent. Still, his appointment is remarkable, especially for industry professionals who make their living in a kitchen. As far as we know, he’s the only chain president to reach that perch through menu R&D, and he’s one of the few chefs to head a system of significant size (Steve Ells of Chipotle and Kerry Kramp of Sizzler being the others).

Put Sigourney Weaver in a Cracker Barrel cap… As tough as she was in “Alien,” the veteran actress will have to show more fortitude in her depiction of Sandra Cochran, the new CEO of the family restaurant chain. On Day Two of the job, Cochran had to contend with a demand by shareholder and takeover artist Sardar Biglari that he be ceded a seat on Cracker Barrel’s board. The demand was put forth on a website created by Biglari to blast the chain’s direction and management. And then, just to add the icing on the cake, Cracker Barrel reported a 36% decline in quarterly net income. You have to wonder if prior CEO Michael Woodhouse called to provide moral support—the Bishop to Weaver’s Ridley.

…And get me one of The Borg guys from “Star Trek” to play Biglari. “You shall be assimilated. Resistance is futile.” The thirtysomething activist shareholder followed the same plan he’s pursuing at Cracker Barrel to wrest control of Steak ‘n Shake and Western Sizzlin’. Clearly he intends to prevail similarly at Cracker Barrel, his most mainstream target to date.

Who’s today’s Jimmy Stewart? Whoever he is, get him to play Craig Meier, the CEO of the Frisch’s family restaurant chain, which also operates a number of Golden Corral franchisees. The company’s sales dropped 4.6%, so Meier took a 26% pay cut. Clearly this guy couldn’t work on Wall Street without being some suit’s bitch. The cut brought his pay down to about $700,000—for overseeing a company that brought in $303 million. Take that, Gordon Gekko.

Okay, who’d be a good Lazarus? See if you can make him look like Craig Nickoloff, the founder of the Claim Jumper chain. Nickoloff sold the chain, second only to Cheesecake Factory in average unit volumes, to private-equity concerns that watched sales drop and drop and drop. Eventually, Claim Jumper went bankrupt and was bought at a bargain rate by Landry Restaurants’ Tillman Fertitta. Nickoloff had it made. But of instead of working up a sweat on a golf course, he just teamed up with the celebrated chef Michael Cimaruti to buy Silver Spoon, a wheezing landmark of the Los Angeles dining scene. They’ve indicated that the West Hollywood outlet will be converted into a restaurant called Connie and Ted’s, but haven’t yet revealed what the new concept will be like.

Okay, time to sketch out the storyboards….

Remembering the details

2011-09-11T17:13:00.003-04:00

A few days after 9/11, I was staring at a blank computer screen, my fingers on the keyboard, wondering what the hell I could say. I had a column due for Restaurant Business magazine, and of course the matter on every reader’s mind would be the terrorist attack. But, even having seen the events at close range, how could I adequately address the pain and uncertainty restaurateurs were feeling along with everyone else?

We decided as a staff that the only suitable commentary would be a head bowed to the industry’s victims. I don’t know how she did it, and was advised that it might be best if I never find out, but the indomitable Andrea Cohen, now a well-known food writer, secured a list of the 74 industry employees who were known as of that point to have perished.

I skipped a recollection of 9/11 in 2001, but I vowed never to let the date pass in the years afterward without remembering it in a column or blog. So I hope you’ll indulge me a break from covering restaurants for a recount of how my business reacted to those terrible days.

I was editor of Restaurant Business at the time, working with a gifted staff unmatched in its professionalism. Indeed, that was one of our dilemmas at the time. We were smack against a deadline for our next issue, yet here was the biggest story of our time. How could we go to print with articles about Dollar Menus and new pumpkin pie recipes when the restaurant industry had just had a hole punched through it?

We begged and pleaded with our parent company, a $5-billion-a-year publicly owned bureaucracy, for the dollars needed to buy time from our printer. Astoundingly, maybe because the accountants didn’t find a yea on their lengthy list of no-no’s, we got it.

But our offices were so close to the World Trade Center that officials shut our building for several days. We actually had a staff member, now-publicist photographer Katherine Bryant, sneak into the building so we could send out our daily e-mail newsletter on Sept. 14, explaining that we’d be out of commission for a few days. (“For God’s sake, don’t worry. Just be safe,” responded a subscriber in Australia whom we hadn’t known we had.)

That didn’t stop us from pursuing several ambitious feature articles. But the stories that stick with me, and presumably always will, are the ones that were brought to our attention by restaurateurs and other journalists who learned what we were doing and knew of a situation that deserved a spotlight.

Former New York Times reviewer Bryan Miller sent me an e-mail about one of his successors, Ruth Reichl, showing up near Ground Zero in a white Land Rover, the back packed with vats of soup, to help feed the relief efforts.

Our former food editor, Paula Disbrowe, provided first-person details of those MASH-like feeding operations, where she was volunteering with then-boyfriend and Bouley Bakery chief David Norman. Famed chefs were cooking whatever they could whip together from limited supplies. We had a lot of heroes in uniform those days. A lot of them wore foodservice whites.

Most of us had stories of our own to recount. Knowing Michael Lomonaco was executive chef at Windows of the World, I had glumly presumed he’d perished, a profound sadness for me. I didn’t know Michael well, but, learning that my wife and I were hunting for homes outside of New York, he’d graciously invited us to come visit the place he’d purchased in the Hudson Valley. We’d also shared some great conversation dinner during a Culinary Institute of America event, and I of course had enjoyed his cooking a bunch of times.

Days after 9/11, I was reading my New York Times when I literally had to sit down. There, in passing, was a quote from Lomonaco. The story explained that he’d stopped by an optometrist that morning to pick up a pair of glasses. The first plane hit while he was walking toward the World Trade elevator.

The staff was walloped with sadness to see that Heather Ho, Window’s pastry chef, was also among the victims. We’d featured her in the magazine just a few issues beforehand, and she was generally acknowledged among the staff as someone whose career we needed to follow, since we was going to be a big star.

Being New Yorkers, we also had our non-industry connections to the tragedy. One of our senior staff members remarked for several days that he’d not heard from one of his friends. He presumed the guy was safe because his office was uptown. Finally, the editor checked the last e-mail he’d gotten from his friend, who worked as a computer consultant. It’d been sent from the guest account of a company headquartered in the towers during the week of the attack.

Another staffer wasn’t able to contact her sister-in-law, who lived blocks from World Trade. She was eventually tracked down to a hospital, where she’d been taken after debris from the North Tower struck her as she’d been walking the dog.

Late on the night of 9/11, I’d walked up to the center of my town where a blood drive was being held. The organizers were stockpiling supplies in the belief hundreds of injured people would be pulled the next morning from the rubble. On the way I passed the train station, where thousands of people left every morning for jobs in Manhattan. Despite the hour, there were about 20 cars still in the parking lot. I was trying to figure out why when it struck me: Those owners weren’t coming back for their vehicles.

For weeks and months afterward, we’d be jolted out of our routines by the New York Times, which had admirably decided to profile every person killed in the New York attacks. You’d be drinking your coffee and come across a mention of someone you knew from high school, a person on your floor at college, or someone you’d routinely see on your train line.

There are so many details emblazoned in my memory: Seeing the ash-covered people streaming past Restaurant Business’ offices, which were about 30 blocks from World Trade. Going to my wife’s office, which hadn’t been able to contact a satellite office across the street from the towers. Employees of that location were staggering up to the midtown skyscraper where my wife worked. Eight people never showed.

Seeing fighter planes in the skies over Manhattan. The downtown area suddenly swamped with military vehicles and personnel. Restaurants turning us away because they were hoarding supplies until distribution trucks would be allowed into the city again. The dozens and dozens of people buttonholing you in the week afterward, shoving a picture in your face and asking if you’d happened to see their loved one, who’d been missing since 9/11. Veteran newscasters breaking down on the air and crying.

As painful as those memories are, I hope I never lose them. More important, I hope the world forever remembers the tragedies, so it continuously strives to avert a repeat.

Thanks for letting me do my small part to keep those recollections.

Cue the 'Dragnet' music

2011-09-07T12:02:00.001-04:00

After a Jack in the Box in northern California was robbed, assistant manager Jeanette Gallo filed for workers’ comp because of the stress she’d suffered. Under state regulations, it would’ve been a routine situation if Gallo hadn’t had one extraordinary circumstance: She’d helped to rob the place.

Apparently she was no master thief, and an even worse liar. The restaurant’s franchisees were tipped off by her early arrival on the morning of the heist. Their suspicions were confirmed by watching how she handled herself during the robbery, which was caught on a video monitor.

She was arrested first for grand theft, then for two felony counts of insurance fraud, to which she pleaded guilty.

Another criminal mastermind, cut short in the bloom of her career.

Jamba's juiced-up turnaround

2011-09-02T13:50:00.002-04:00

This is the final installment of a three-part celebration of the industry's top turnaround stars. You can read the first installment, on Popeye’s Cheryl Bachelder, here, and the second, on Ruth’s Chris’ Michael O’Donnell, here.

Under the cobwebs in some business school’s library is a volume entitled, “Standard Procedures in Restaurant Turnarounds.” It’ll be covered with an inch of dust because anyone who’s spent time in the business will know the prescription: Expand your menu to draw new customers while tapping wholly new sources of revenue like catering.

Rare is the executive who hasn’t thought along those lines. Scarcer still is the one who was able to make the plan work.
So meet James D. White, the CEO of Jamba Juice. You might not know him, or of him, because he’s kept a low profile. But he’s quietly engineered what may be one of the most astounding turnarounds in foodservice.

White took over the chain in late 2008, as its glitter was starting to wear off. It’d drawn considerable attention, from consumers as much as the industry, as a “lifestyle brand”—a Starbucks that sold cold drinks instead of hot ones.

That’s great for a niche brand. But the concept’s limitations were becoming evident. It actually sold a liquid meal replacement in a cup—a relatively high-ticket smoothie that takes a considerable amount of time to finish, if you can consume it all. To say it’s filling is like referring to Lady Gaga as kind of different.

Jamba wasn’t where you’d stop for breakfast, lunch and dinner, day after day after day.

The chain’s management was addressing the problem by adding a smaller-sized serving and adding breakfasts you could suck up through a straw.

Enter White, who, significantly, was recruited from the grocery business, not another restaurant chain. He’d developed proprietary brands for the Safeway supermarket chain.

White quickly came up with a strategy. If you’d stopped any attendee of the Restaurant Leadership Conference and asked them on the spot for a plan, you’d have gotten almost the same thing:

--Cut expenses
--Expand the menu to bolster traffic
--Focus on service
--Emphasize franchising
--Expand overseas
--License your name to food products.

Fast-forward to the present. The chain now features products as diverse as soft yogurt and steel-cut oatmeal. Breakfast wraps are being tested in more than 200 stores.

Jamba’s memorable name appears on retail products ranging from trail mix to toy blenders. G&A costs were cut by more than 14%. Its franchisees include tennis superstar Venus Williams. “And we have zero debt on the books,” White told investors two weeks ago.

As far as we can tell, White didn’t log any time at Hogwarts before joining the restaurant business. He has no pact with the devil that we’re aware of. Nor is he using some special ray gun.

Yet he was able to execute a plan that stymied other chains, of all shapes and sizes. There’s no magic to it. Indeed, the difference was as simple as drinking a smoothie through a straw: He built a team and instilled a culture that enabled the strategy to work. The “how’s” were details that management could supply because of its experience and insights.
White provided the leadership to make the thinking and execution possible.

It sounds like an easy formula. But as Vince Lombardi famously said, You can use my playbook, but you still have to beat me on the field.

Cheesed up

2011-09-01T09:53:00.003-04:00

Playing off the never-waning popularity of comfort foods, restaurant chains are elevating a tried-and-true ingredient to Big Lure status this month: Cheese.

Not that the uses are routine. Denny’s, for instance, is currently touting mac & cheese, but as a sandwich topping, not a side or entrée. The result is the Mac ‘n Cheese Big Daddy Patty Melt, a burger dressed not only with the comfort favorite, but also additional cheddar cheese and a mayonnaise-y sauce.

The limited-time selection, a cornerstone of the chain’s new Let’s Get Cheesy menu, is the latest in the chain’s tribute to cheesy excess. Last year it showcased the Fried Cheese Melt, essentially four fried mozzarella sticks inserted inside a more traditional grilled-cheese sandwich.

It packed nearly 900 calories. But that could’ve been a diet selection compared with the Big Daddy. Denny’s hasn’t posted the new sandwich’s calorie count, but a regular patty melt is listed as having 1,040 calories, and other authorities have estimated the count at just about 1,700 calories.

The Big Daddy is one of six new cheese selections. Most of the others consist of familiar items, like a country-fried steak with eggs, garnished with cheese. As part of the promotion, cheese can be added to any menu item for an extra charge of 69 cents.

Denny’s isn’t the only chain on a quest to keep cows at full employment. The Qdoba burrito chain is calling attention to one of its signature ingredients with the launch of the Queso Quest truck in Chicago. A comedian is driving the truck around the Windy City to get locals to try the chain’s three-cheese queso as a topping on popular local foods.

It wasn’t crystal clear, to me at least, how queso on a deep-dish pizza is going to drive more people to Qdoba, and I’m a fan of the chain.

Then there’s the sizzle surrounding The Melt, the grilled-cheese sandwich concept that hit the pan this week in San Francisco.

Intended to serve as a chain prototype, the new outlet probably would have gone unnoticed for some time if it hadn’t been for two things: It’s the brainchild of Jonathan Kaplan, the inventor of The Flip inexpensive video recorder; and it uses what may be the most technologically advanced system in the industry for ordering a sandwich.Patrons use their smart phones to select what cheese, bread and other elements they want in their sandwich. The order is translated into a QR code that’s read at the store, so the order is automatically channeled back to the kitchen.

Cheesy? The initial reports from citizen reviewers have been very positive.

But not all the recent news has been good for cheese lovers. It slipped past the business press, but the industry lost one of its gods last week, and one who owed his notoriety largely to cheese.

Yes, Joey Vento, a.k.a. the founder of south Philly’s Geno’s (cheese) Steaks, died at age 71. Pat’s might be better known, but Geno’s could go onion to onion with its arch-rival, which was situated virtually across the street.

All we can say is, “Whiz, with, Joey. Whiz with.”

A 5.5 on the restaurant Richter scale

2011-08-25T15:14:00.006-04:00

We had an earthquake this week in New York City, but the restaurant business likely felt a few tremors of its own, judging from recent developments.

In short order, we had the most significant executive change in years; further proof the business can be one big hurt for the unwary; and a strong reminder of why you should always wear clean underwear while dining out in the city, if you wear any at all.

Temblor 1: First, the personnel shift. It wasn’t shocking that California Pizza Kitchen named a new CEO after being acquired by a private-equity firm. The surprise was the selection: G.J. Hart, the longtime range boss at the Texas Roadhouse casual chain.

I always figured he owned too much Roadhouse stock to leave. The only way he’d exit would be if a P.E. firm took the company private and installed its own honcho.

Turns out Hart only holds 289,000 shares, or less than 1% of shares outstanding, according to last year’s proxy.

Which will undoubtedly work in CPK’s favor. Roadhouse was a standout among the crowded field of casual faux-honkytonks, a group that also includes LongHorn, Lone Star and at least seven or eight strong regional chains.

The other national brands went through some significant retrenchment. Roadhouse has been the steady ride in the field, the result of what strikes me as a customer as an intense focus on operations and the integrity of the brand. You have a sense of what the concept is all about.

Sometimes when I visit a CPK, I feel as if I’m in a Sbarro with waitress service. Is it a pizza place, a casual restaurant, an Italian dinnerhouse, a café? Hart’s skills will likely play directly into the chain’s needs.

Temblor 2: The MaggieMoo’s mix-in ice cream chain is led behind the barn. The concept will be absorbed into its sister brand (and what most observers cite as the originator of the format), Marble Slab.

Moo’s wasn’t exactly an industry powerhouse. But it did have its moments of interest as a franchise option, particularly when arch-rival Cold Stone Creamery was growing so quickly.

That wouldn’t be such a big deal on it’s own. But there’s also…

Temblor 2.5: A new flurry of media reports about Quiznos financial plight. The Wall Street Journal reported some time ago that the chain was struggling under a whopper of debt. New coverage, including in the Journal, suggest that the problem hasn’t eased at all.

Quiznos is no MaggieMoo’s. It made a splash in the sandwich market, both by growing at head-turning speed and undercutting competitors on price. It was also one of the franchise chains that everyone seemed to be talking about.

Franchise relations within the chain soured long ago. Not the operators are watching a train-wreck of a situation, and one that many of them predicted when the advertised price of sandwiches left crumbs for margins.

The moral here: Restaurant franchising has stepped up appreciably in recent years as franchisors sold off company stores, displaced white-collar workers decided to start their own businesses, and fast-casual emerged as a hot area of growth. Activity increased, but the risk didn’t decline.

Choosing the wrong franchise can still be disastrous, even though the emphasis today is on finding experienced operators who might already have other chain concepts in their brand portfolios.

Temblor 3: New Yorkers have turned their city’s exalted restaurants into one big orgy, according to a story in the most believable tabloid this side of The Onion, the New York Post.

“Tableside naughtiness is so widespread, the issue’s no longer whether you’ve had a dalliance at an NYC eatery; it’s when, where and how,” reported the Ruppert Murdoch-owned daily.

Bragging about where you’ve had sex is now as much of a status setter as being able to namedrop where you ate, or what celebrity works out at your gym, according to the piece.

My favorite quote, from Joseph Couture, the author of a book on public sex: “The only thing people drop faster than their inhibitions after a bottle of wine is their pants.”

Which makes you wonder how many restaurant patrons took the earth moving beneath their feet this week as a completely routine experience.

The precious need your help

2011-08-17T09:22:00.002-04:00

In these extraordinary times, it’s important for the less troubled to help those in danger of falling victim to their circumstances, regardless of what we might feel about them. So, please, try to put your prejudices aside and help foodies recover their perspective.

Some observers have suggested selective euthanasia as a more humane way of helping the self-anointed dining elite. Many who eat dinner before 10 p.m. insist that idea has merit, though it’d be disastrous for merchants who specialize in black clothing and torturous shoes.

Far better would be a drive to show sport diners that the restaurant industry has more important issues to address—staying afloat, for instance—than the two topics currently preoccupying the Urban Spoon set.

Readers of a blog this cool would of course be familiar with the topics, but maybe your connection to Eater was a little balky this week. If so, you missed all the guffaws-in-type about Issue One: Did the celebrated Alan Richman really pat a server’s ass? And what was he thinking when he brought up the accusation, and a spirited defense, in a GQ review of the place where the transgression allegedly occurred?

I have trouble believing that Richman, the Derek Jeter of the reviewing game, would do such a thing. It’s very pertinent that the accusation came from M. Wells, a soon-to-close New York hotspot, after Richman cited some disappointments in his review (he entitled the piece, “Diner for Schmucks.”)

Even harder to believe is that he mounted a defense in print. But that’s just the start of the weirdness. You have to see it to believe it. Not since Michael Jackson got a pet chimp have we seen something this bizarre.

Then again, Lady Gaga’s outfits have nothing over Issue II, which uncomfortably plumbs how far a foodie will go to secure bragging rights about where he or she ate.

To reserve a seat at Washington, D.C.’s new quasi-pop-up, Rogue24, a dining room situated in an alley, you have to sign a two-page agreement. The contract stipulates that you can’t use your cell phone, or even its camera function, and cancellations have to be made at least 72 hours ahead of time. Otherwise, you’re charged a penalty fee.

Great. Formerly, you had to see a loan officer before dining in some of the nation’s hotspot. Now you have to consult your lawyer, too.

Next they’ll be selling tickets to restaurants, instead of giving you a bill.

Wait—did we mention the menu change at Grant Achatz’s Next?

Bankruptcy courts are busy again with restaurants

2011-08-16T10:33:00.001-04:00

The restaurant industry is still analyzing the effects of last week’s funhouse ride on Wall Street. But one scream of fright should’ve been audible before the white-knuckle trading began: There’s been another wave of restaurant bankruptcies, this time of franchisees.

The busts tend to get less attention than the filings of a brand’s parent company, which themselves have been less than high-profile in recent weeks (the most recent chain to put creditors at arm’s length: Bill Johnson’s Big Apple, a five-unit chain of family restaurants in the Phoenix area).

Taken together, the bankruptcies prove the industry shakeout is still underway, this time on a market-by-market basis.

It’s tough to read a pattern in the failures. On first glance, fast food is the source for a disproportionate number. This Wednesday, an auctioneer in Dallas will sell off the Burger King units of a bankrupt franchisee. A bankrupt El Pollo Loco operator has nine units on the block in southern California. The weekend brought news that a Rally’s franchisee in Birmingham, Ala., was throwing in the paper napkin.

But the full-service sector has seen its share of failures, too. Chevys, a low-ticket casual chain, lost two stores in St. Louis when an eight-unit franchisee there couldn’t cut the mustard.

A number of family restaurants, including franchises of bankrupt Perkins & Marie Callender’s, have provided the bankruptcy courts with considerable business from that segment.

Here and there, a common element does crop up: Locations rendered unfeasible by the economic downturn. It’s often less a matter of a traffic freefall than a function of a rent that’s tough to cover.

The outcome should be healthier local markets. Supply usually dips, to some degree, and the shuttered stores provide an expansion opportunity if the landlord is more realistic going forward about the lease.

The question, underscored by last week’s roller coaster, is how all this uncertainty is going to affect consumers and lenders.

Ruth's O'Donnell: Making a plan work

2011-08-03T09:37:00.007-04:00

This is the second installment of a three-part celebration of the industry's top turnaround stars. You can read the first installment, on Cheryl Bachelder, here.

The turnaround at Ruth’s Chris didn’t start out with a bang. It was more of the resounding-thud variety.

Like a lot of high-ticket concepts, the expense-account chain was kneecapped by the Great Recession. In February 2009, comps fell 23%. And that was after it’d rolled out a cut-rate deal to pull customers back. For a mere $39.99 per head, guests were treated to a three-course meal that included shrimp or a six-ounce fillet.

By Ruth’s-ian standards, it was a Dollar Menu. But the headwinds were too strong. Trade-offs to the discount lowered Ruth’s check average without drawing an offset in traffic. In short, it looked as if the concept was just discounting to customers it would’ve drawn anyways.

At the rate of decline, said CEO Mike O’Donnell, units would each lose $1 million in annual sales.

The next tactic didn’t work so well, either, or at least not at first. The chain put the spotlight on the flattop-grilled steaks and other entrees that had long been its signatures. They were grouped together into a special Classics menu. Customers would recognize the items, but not the prices, since they were lowered to a traffic-stimulating level.

Then came one of those smack-your-forehead moments. To hold down costs, Ruth’s simultaneously cut its advertising. So it had a deal, but no way of telling patrons about it. Guests were already in the unit when they learned of the special promotional session.

It didn’t look good for Ruth Fertel’s brainchild. But O’Donnell proved why he’s one of the toughest execs the industry has ever seen. His lengthy resume included stints during some of the roughest times at Champps, Sbarro and Ground Round. He’s also been fire-hardened by working at such operations as Outback and T.G.I. Friday’s. This is no crème puff.

He stuck with the Classics deal. Today, it accounts for about 30% of Ruth’s sales, which are on the rise. Traffic was up 3.3% in the second quarter, with a 2.4% rise in the average check, yielding an average sales increase per store of 5.8%.

Meanwhile, O’Donnell diversified the chain’s prices. A bistro menu put more affordable choices in front of customers, who could now return even if the company wasn’t picking up the tab.

He also pushed for group business, which had fallen like a stone. The installation of a satellite communication system provided an extra reason for businesses to hold their meetings at a Ruth’s, with banquet service included. In the second quarter, group sales were running 16% above the tally of a year earlier.

Now O’Donnell is trying to work the same program with Ruth’s secondary concept, the Mitchell’s dinnerhouse chain. The home office is diversifying the menu. While the Ruth’s brand is testing TV advertising, the smaller Mitchell’s operation is experimenting with radio.

Still, O’Donnell isn’t crowing about his company’s recent achievements. During a conference call with financial analysts, he was asked where the turnaround stands.

“Our everyday user continues to show improvement. Our business-to-business experience shows improvement,” he said. “So we think that as long as the economy continues or the higher end of the economy continues to do reasonably well, we will continue to track in that regard.”

I wouldn't bet against him.

Turnaround stars

2011-08-01T22:37:00.000-04:00

The recent economic news has been grim, but there’s a conga line forming in the restaurant business. With the exception of P.F. Chang’s financial results, this has been a feel-good time for the trade.

Look at the results for three former flat-liners in what’s been christened the polished casual market. Ruth’s Chris was losing sales at the rate of more than $1 million per store. Last week it posted a comp increase of 5.8% for the second quarter.
Morton’s, an archrival, topped that achievement with an 8.3% increase.

And Kona Grill did even better, logging a 9.1% rise.

Meanwhile, Dunkin’ Donuts’ parent dazzled Wall Street with the industry’s most significant (and successful) IPO in years.
Ignite Restaurants, the parent of Joe’s Crab Shack and Brick House, surprised a lot of Wall Street watchers with the announcement that it’d filed for a $100-million offering.

It’s far too early to declare a return to good times, nor an escape from the bad. Recent days also brought the bankruptcy of Chicken Out, the D.C.-area takeout concept once hailed as an ideal acquisition candidate, and Elephant & Castle, the high-volume casual chain. A Chevys franchisee also had to seek protection because of several blood-sucking leases.

But it’s not premature to hail three industry leaders for their amazing turn-around efforts. Indeed, their recognition might be overdue.

I’d watched them like a vulture during the worst of times because I was convinced their concepts were headed to a liquidation auctioneer. A turnaround seemed like too much of a moon shot given where the brands were.

But I was proved wrong. So, with apologies, I’m paying homage to three turnaround stars, even if their charges still have a ways to go in their recoveries.

I’m breaking it into three installments for ease of consumption. Here’s the first.

Popeyes’ Cheryl Bachelder: Working a common-sense plan.

Before the world fell apart, the AFC Enterprises concept announced it was rebranding to play up its Louisiana heritage. The yawns from reporters and financial analysts must’ve been deafening. Hadn’t the chain proclaimed the same mission time after time?

The ho-hum factor wasn’t diminished by the comeback plan put forth by the incoming Bachelder: Embellish the brand’s appeal, improve stores, make them financially sound, and expand. You could’ve ripped that turnaround punchlist from a how-to book.

But the tactics were different, particularly for what Bachelder termed the brand-building “pillar.” Popeyes was a chicken-on-the-bone concept. That heritage would be underscored by the rebranding of the chicken as Bonafide, a clever way of saying it was true fried chicken, with a name that made you think “bone.”

The problem with it and other fried chicken brands was the limited appeal at lunch. You don’t want to get all greasy before heading back to work, or down a heavy mid-time meal before a sleep-inducing meeting. So a new array of sandwiches and wraps were added.

Similarly, you can’t munch a fried-chicken breast while steering with your other hand (trust me, I’ve tried it). Portability was a true shortcoming, particularly in generating more sales through the drive-thru. So Popeyes added nuggets, tenders and snack-sized minis.

Then there was the overriding concern about price. Chicken is relatively inexpensive, but the economy had tanked. If it wasn’t a bargain, consumers were going to walk away.

Popeyes countered with an array of new, low-cost and snackable selections.

Meanwhile, operations were scrutinized via a new service tracking system. Some of the resulting fixes were so basic as to merit a Do’h!: Clearer headsets at the drive-thru, so orders wouldn’t botched, and the installation of timers to keep everyone mindful of service speed.

It wasn’t a matter of splitting the atom. Any ops specialist preaches the better part of Bachelder’s strategy as standard operating procedure. The tactics were peculiar to Popeyes’ challenges and menu. But there wasn’t anything mind-blowing about the adjustments.

The key was the execution. Coming up with a plan is easy. Making it happen as planned is the challenge.
Bachelder did it. That leaves the key question of how.

Given how adeptly the plan was communicated and executed, there’s only one solution: A semester at Hogwarts. And maybe in the graduate program at that.

Sandy Beall's different drummer

2011-07-27T13:21:00.002-04:00

Give one of those inaudible dog whistles a blast and see if Sandy Beall cocks an ear. The Ruby Tuesday CEO must be picking up signals other restaurant executives can’t detect. Why else would he be reading the marketplace so differently?

Almost every chain, from McDonald’s to Applebee’s, has cut back its company-run restaurants to free up capital and lower risk. Not Ruby, the operation that Beall founded while he was still in college. In the past year it’s purchased 109 stores from franchisees.

So how’s that working out? From April through June, Ruby’s net income was depressed by a 24.3% drop in franchise revenues, which typically have a profit margin just this side of legal. The offset was a 12.6% increase in revenues.

But Beall’s not budging. “No, no, no,” he told financial analysts during a conference call. “We run company-owned operations. We sure as hell wouldn't have bought them back, if we're going to refranchise them.”

That wasn’t the only time during the call that portfolio managers asked about Ruby’s recent tactics. Several wondered aloud about the direction of the chain’s menu. For direct competitors, the watch words have been value and nostalgia. Witness their reliance on burgers and their slider variants.

What’s new on Ruby’s bill of fare? Trout almondine and spaghetti squash,” which I personally find appealing,” said Jeff Omohundro, the restaurant analyst for Wells Fargo Securities. “But I just wonder if there might be some overreach relative to a broader Ruby Tuesday audience.”

Beall responded that the dishes are a choice for 3 or 4% of guests, and “it didn't hurt us to have it.”

But the analysts didn’t let the point drop. “There was a period in which you had kind of tweaked the business around, put some emphasis against appetizers and your burgers, and it seemed like the business really took off,” noted Morgan Keegan’s Robert Derrington. “Is there anything to be gained as we look back in time about that relative to your dinner house strategy?”

“We do not plan to turn back into a burger joint,” answered Beall.

Some of the moves seemed to have analysts doodling question marks as they listened to Beall and his team. For instance, EVP Kimberly Grant observed that most of Ruby’s recent sales decline has come during weekday dinnertimes.

Didn’t the chain run a Tuesday steak and lobster promotion to counter that trend? Is that tactic still being tried?

“No, we shifted that to being all-weekend promotion,” Beall said in response to the question.

McCafe on a bun?

2011-07-25T10:18:00.002-04:00

This should sound familiar: Restaurant upstarts take a commodity product you’d find on any menu, raise the quality and price, and cultivate a cult-like following.

After Starbucks did it with coffee, McDonald’s eventually responded with McCafe, a line-up that promises quality beverages at a much lower price. By all accounts, it’s been a smash.

So Big Mac isn’t waiting as long to employ the same defense against upscale burger purveyors like Five Guys, Smashburger and Bobby Flay. The rise of the so-called premium burger segment is providing McDonald’s with the cover to slide higher quality choices into its mix and trump the newcomers on price, COO Don Thompson explained last week.

“Frankly, I think it’s good for us,” he told investors. “It's a benefit because those premium burgers have higher margin and we've got some of those same premium burgers.”

Translation: It’s McCafe on a bun.

Thompson noted that the tack is already working with McD’s Angus one-third-pound burgers. Expect to see more choices in that price and quality strata, he advised during the analysts conference call.

Thompson noted that those new choices could be imported from McDonald’s operations in Europe, including the 1955, a burger the chain is marketing in Germany with a fictional pedigree. Commercials suggest the oversized bacon burger was invented by a housewife in Chicago, whose recipe was just recently discovered by a McDonald’s crewmember in Deutschland.
“Europe has already tested the 1955 very successfully,” Thompson observed.

He also mentioned the Big Tasty, another premium choice that McDonald’s started offering in Europe, with and without bacon, around the start of 2011.

Thompson didn’t mention the Pub Style Burger, a product that drew considerable attention from bloggers after word leaked of its test in the Midwest. But he did note that many of the analysts on the call were aware of some U.S. initiatives featuring premium burgers.

“I'm really looking forward to us having even more premium burgers,” he commented.

Price-wise, the entries will be positioned as a value relative to burgers of comparable quality. Thompson said McDonald’s can afford to undercut the competition because of “our supply chain and the efficacy of it.”

He also noted that the premium play will extend to chicken. Some U.S. markets are already offering premium chicken sandwiches.

The news gets personal

2011-07-22T13:12:00.002-04:00

An obscene part of my day is spent online, scouting for news, glints of a trend, or the radar beeps of a new direction in dining. Usually it means wading through the type of informational detritus that makes me a leper at cocktail parties. (Bet you didn’t know Brad Pitt wore a chicken outfit for El Pollo Loco, or that Barry Manilow wrote many of the catchiest fast-food jingles. I’ve got a million of ‘em.)

The last few days have brought discoveries of a different type, Sadly disposable for most people, in or out of the industry, they’ve definitely gotten under my skin.

Not that they’re out of the ordinary. You would not believe how many stories appear in local papers or the news services about violent crime that erupts in or near restaurants, particularly on weekends. It can be gruesome stuff. But little is as affecting as the news briefs that appeared this week about an incident at a Dave & Buster’s I routinely pass.

It occurred last fall, but full details apparently weren’t revealed until recent court dealings. A 23-year-old man went into the food-and-games establishment and approached an 8-year-old who by all accounts had been selected at random. The adult drew a knife and stabbed the boy in the back five times, then dashed away.

The attacker was grabbed while he tried to hide in a bathroom by the boy’s father and another customer. Authorities found a note in the man’s pocket, explaining as if it was a to-do list that he intended to kill a child that day.

Fortunately, he failed. Now he’ll be working off a 14-year prison sentence as the boy and his family contend with the memory.

Far less gruesome was the release of a code of behavior that definitely drew my attention. I ran afoul of Tim Zagat 12 years ago by responding in a column to his declaration of a Diner’s Bill of Rights. I actually took issue with only one provision, an assertion that restaurants field any special dietary need posed by a customer. Still, mutual acquaintances informed me that I’d drawn some bad ratings from the dining-guide mogul.

I still believe the point of annoyance was a suggestion that a dining-out code should go both ways; restaurants were entitled to certain behavior from their customers. For instance, abuse of a server or disregard for the comfort of fellow patrons should be prohibited, enforceable by a boot out the door.

This week Zagat issued the sort of list I was envisioning, a set of dining etiquette rules. I agree with him on every point of the new do’s and don’t’s, particularly the stipulation on handheld distractions: “Do not talk, text, tweet, e-mail or surf the web at table.”

It’s interesting that he put that responsibility in 1999 on the restaurant, stating that the establishment should ensure a cell-phone-free dining room. But, as the Zagat notes in its preamble to the new behavioral code, times have changed.

Today, I’d say his etiquette rules should apply to the people who interact with restaurant customers. If servers use their cell phones while they’re within view of diners, they should have an immediate meeting with the manager, provided he or she isn’t tweeting. Sadly, that's too often the case, and it's a personal ire-raiser.

Finally, it was a point of personal annoyance that the watchdogs at Center for Science in the Public Interest missed an irony in their newly released roster of the unhealthiest restaurant foods.

Among the winners of the group’s annual Xtreme Eating Awards was Cheesecake Factory’s Ultimate Red Velvet Cheesecake, a single dessert that weights three-quarters of a pound and packs 1,530 calories. How could a chain even develop such a gut buster?

Well, it didn’t. The delectable was the brainchild of a customer who participated in a contest two years ago to find Cheesecake’s next cheesecake addition. Patrons were invited to submit recipes for the sort of products they’d like to find. Some 10,000 were entered.

Then customers were asked to vote on their favorites among the finalists. The Red Velvet won handily.

In short, patrons demonstrated that it was the sort of choice they wanted when they dined out.

It’s proof of the industry’s longstanding argument that its job is to give patrons what they want, not what they should be eating.

New breed of restaurant weeks

2011-07-19T15:34:00.004-04:00

Now that every nook and cranny has its own restaurant week, a growing number of locations are tweaking the formula to create a second promotional opportunity for local eateries.

The twist is showcasing local ingredients as part of the deal. Not only can foodies try the must-visit places at a discount, but now they can bask in the locavore movement, munching on fresh and artisan products from producers just a morel toss away.
Washington, D.C., jumped on the bandwagon with the inaugural Eat Local First Week, which concluded for participating restaurants last week. It’s not be confused with the Farm-to-Street Block Party, where local beer and wine makers had the spotlight.

The much-bigger and more heavily marketed DC Restaurant Week begins next month, a warm-weather follow-up to the Restaurant Week that was held in mid-January.

Not all the new restaurants weeks are big-city affairs. Ohio’s Athens County is in the midst of its local-food restaurant festival, 30-Mile Meals. Thirty restaurants are featuring foods from farms and producers within a 30-mile radius of Athens, Ohio, the home of Ohio University.

There’s an obvious limitation to the local-foods restaurant fests: For most areas, the promotions have to be held in the summer or early fall, when local produce is in season. Yet summer is typically the busiest seasons for restaurants. They need the boost in winter, when patrons are loath to leave the warmth of their homes and brave icy roads.

It’s not an issue for Sonoma County, Calif., whose farmers and artisan producers are busy all year. So it can focus on local produce during late February.

Other areas are obviously exploring the shoulder seasons, where some produce might be available, but has to be supplemented with foods like cheeses, beers, wines and even seafood.

If you want a sense of how big the promotions can be, head to the Lone Star State next week for the Go Texan Restaurant Roundup, where places throughout the state will be featuring local foods. The event not only promotes dining out, but generates funds for local food banks.

The event, funded in part by the state, was started four years ago.

Ruffling feathers about KFC

2011-07-15T10:39:00.001-04:00

It’s a canon of the chain-restaurant world that you speak of a concept’s founder with a reverence usually reserved for saints and Mickey Mantle. The only party held in higher esteem might be franchisees, typically lauded as the embodiment of entrepreneurship and operational know-how. They’re best mentioned with a bowed head.

So let us celebrate the honesty that Yum Brands CEO David Novak bravely showed yesterday in uttering what would normally be stigmatized as heresy on the grandest scale. He dared to speak candidly about the DNA of KFC.

That meant—steel yourself—voicing what could be construed as a criticism of Col. Harland Sanders.

Novak had been asked by financial analysts for “more color” (finance-speak for “the full story”) on the glaring discrepancy between KFC’s performances at home and abroad. Why was it such a favored son in China but a problem child here in the States? Couldn’t some of the best practices from overseas be programmed into domestic operations? After all, the questioner noted, that’s what McDonald’s does.

“I think there's just been a lot more innovation and breadth built into the menu in KFC in most countries outside the United States,” responded Novak. “I think Colonel Sanders kind of set the U.S. up with a heritage of small-box [stores serving] chicken on the bone, stay focused on your knitting. And so I do think that it's a little harder for us to transform the brand.”

While analysts were no doubt clutching their chests and donning garlic necklaces to ward off the bad juju, Novak went further: “And frankly, we don't have a franchise system that is as enlightened as our franchisees are outside the United States as well. So that's something that we have to deal with as well.”

Relations between KFC and its franchisees have likely served as inspiration over the years to Hatfield and McCoy kin. So it was doubly bold of Novak to be candid and deliver the transparency that investors deserve.

He’s probably in an office right now, holding his head as he screens calls and e-mails from irate parties. But he did the right thing.

As he noted during yesterday’s conference call, One of the things I take a lot of pride in on our company is we don't really like storytelling.

“Stories equal excuses.”

You can read the account yourself in the transcript posted by SeekingAlpha.com.

Kids' stuff. And lots of it.

2011-07-13T16:44:00.003-04:00

While Muffy and Scooter learn their isotopes at physics camp, restaurants are rethinking how to deal with the little dears and their schoolyard posse.

Recent days brought two major industry initiatives for bolstering school-aged patrons’ health.

Meanwhile, mom packs are forming in the blogosphere to shame a restaurant that decided it’d rather not risk the time-out behavior of bad boys and girls. McDain’s is banning all pint-sizers under age 6 from its dining room. You’d think from the reaction that the Pittsburgh-area establishment had suggested the tots be banished to Devil’s Island with nothing but a sharp knife.

Clearly, kids are in the foodservice spotlight, for better or worse. It’s no surprise, given how exalted they are in general society. The trophy industry must be going gangbusters now that hardware is bestowed on any tyke who’s a part of a team, class, playgroup or other social unit. If they show up, the big brass is theirs.

Along with the pampering comes a degree of protection that falls just short of a mandatory bubble-wrapping of any nippers who ventures outside their child-proofed home. That’s why we have a mother in Arizona who visited the playgrounds of 50 fast-food restaurants to video unsafe situations or to swap hard surfaces for bacteria. (In her defense, she found plenty.)

It’s also why a cross-agency federal task force has suggested that food sellers voluntarily meet certain nutrition standards for any product they advertise to youngsters.

Ironically, that effort came to light just as the restaurant industry was finalizing a program to offer more healthful choices to kids. The Kids Live Well initiative, officially announced today, will spotlight menus with better-for-you options for children. Nineteen chains representing some 15,000 establishments have already signed on for the program, a collaboration of the National Restaurant Association and the operator of HealthyDiningFinder.com.

The unveiling came six days after the Culinary Institute of America went live with Menu for Healthy Kids, a website that provides recipes for schools and other operations that’d like to offer more nutritional kids’ fare. It also provides statistics on the issue of childhood obesity.

Those may be the big tidal developments in regard to healthier dining by children. But there are countless small developments.

Consider, for instance, that Olive Garden just changed its serving standards. Instead of giving youngsters French fries, they’ll now get grapes. In place of milkshakes, they’ll now sip fruit smoothies.

At the very least, that sort of effort deserves a trophy.

Signs the Apocalypse is upon us

2011-07-11T17:46:00.002-04:00

Lawmakers in Newark, N.J., have lost their minds. They’re demanding that small restaurants post a guard on the premises after 9 p.m. And they really mean small. The mandate applies only to establishment with fewer than 15 customers a night, though it’s unclear how the traffic level will be verified. Obviously those places couldn’t afford to add a rent-a-cop. Why not just set a curfew of 9? As it is, a place that failed to comply would have to close by 10. Or, better yet, why not try to stop crime through law enforcement, not a crushing business burden?

It was just a matter of time, though the circumstances were somewhat of a surprise: Prince William is figuring into a restaurant promotion. It’s being waged not by a place on his West Coast itinerary, but in Washington, D.C. The new Café Rio Mexican Grill said it’ll add a burrito or salad to any order for a mere dollar during the three-day Prince William Extra deal, part of the fast-casual restaurant’s opening festivities. If you’re wondering about Café Rio, I have it on highest authority—its press release—that it’s the best restaurant in the country.

Local media are reporting that a waitress at a P.F. Chang’s in Connecticut was beaten by two women because she refused to split their check three ways. The assailants were arrested and identified as members of the dance troupe that performs with rapper Lil Wayne. According to the coverage, the duo and a third person in their party asked the unidentified waitress to divvy up their check. The server demurred, explaining that they should’ve let her know ahead of time that they’d need separate checks. After some friction, the guests departed but came back to get a cell phone they said they’d left. The argument resumed, and a fight erupted.

There's no word yet of security guards being mandated.

Jaw-dropper of the day (so far)

2011-07-11T14:11:00.004-04:00

From the Wall Street Journal's website:

Trouble with the tax man: Dunkin’ Brands disclosed that the IRS is currently auditing its federal income tax returns for 2006, 2007 and 2008. The company’s IPO filing said the IRS “has proposed adjustments for fiscal years 2006 and 2007 to increase our taxable income as it relates to our gift card program, specifically to record taxable income upon the activation of gift cards.” Dunkin’ Brands said it is fighting the IRS on this point.

Call me cynical, but if the tax men are going after Dunkin', they're likely drawing a bead right now on other chains. if not every single one that offers gift cards.

Pizza Fusion's new step-sister

2011-07-06T16:15:00.002-04:00

There was talk at the National Restaurant Association’s May convention that Pizza Fusion founder and capo Vaughan Lazar may be launching a second concept. Now the mystery is over: The venture is called Kapow! Noodle Bar, and it’ll debut this fall in Boca Raton, Fla.

Kapow’s Facebook page doesn’t address whether Pizza Fusion will be involved with the launch. But it states definitively that Lazar will be a driving force, along with chef Greg Shiff and local impresarios Scott Frielich and Rodney Mayo, the duo behind Dada and Tryst.

The page describes the venture as “earth-conscious,” like Fusion, and “stark and whimsical.” Specialties will include noodles, buns, barbecue, dumplings and salads, which will be locally sourced and “communal,” according to the entry.

Other reports cited a planned opening in September.

The $75,000 question

2011-07-05T11:17:00.001-04:00

Never mind the fireworks. The boom that should’ve had restaurant executives covering their ears last week was the bombshell observation by the company that runs Olive Garden.

The comment slipped past almost unnoticed during a routine presentation to Wall Street analysts. That’s ironic, since the aside was a DefCon 4 alert for casual dining to reassess what market it serves.

Most of that sector stands in awe of Olive Garden, a concept whose middle American take on Italian fare generates $4.8 million in sales per restaurant, much of it from high-margin pasta choices. But lately, the bloom has been off the rosè.

Sales have uncharacteristically stagnated for the brand, while sister concepts like Red Lobster, LongHorn and Capital Grille have enjoyed the sort of same-store sales increases (3.8%, 6% and 7.9%, respectively) that make you suspect steroid use.

“It’s worth noting,” observed Darden president and COO Drew Madsen, “that we’re continuing to see a narrowing in the casual-dining user base.”

He explained that the percentage of customers from households with an annual income of at least $75,000 “has significantly increased their share of traffic, both during the recession and after.” Not coincidentally, patrons from homes with paychecks of $60,000 now account for an appreciably smaller part of Darden’s clientele.

Madsen didn’t specify if the rising share of traffic was the result of an increase in visits by the higher-income group, or of a drop-off by the lower-income crowd. Even when pressed by financial analysts participating in the call, he and other Darden officials would only talk in terms of “share of traffic,” not absolute changes in visits by either group.

They were more forthcoming about the implications of the shift. To appeal to both the higher-income customer and the one with less than $60,000 in annual income, Olive Garden will strive to deliver what the execs termed “price certainty,” or a clearer idea of what a customer will pay.

“Customers aren't looking for a discount,” explained Clarence Otis, Darden’s CEO. “But they want to kind of know a little bit more, with a little bit more precision, what they're going to spend when they choose to go out.”

The execs noted that a similar strategy has worked well for Red Lobster. They cited the example of the seafood chain’s current promotional deal, a four-course meal for $15 per person.

Madsen noted that Olive Garden will take a more tactical approach with its advertising in the near future, delivering more of a “short-term call to action” than “longer-term equity building.” Deals will also give a set price, rather than the “starting at” level of past promotions.

Less of a squeeze on happy hours

2011-06-28T16:58:00.001-04:00

Restaurateurs who feel handcuffed by government restrictions will be heartened by developments in an aspect of the business that’s been locked down for 25 years. Here and there, states are starting to ease the regulations on happy hours.

It’s hardly a return to the free-pouring days of the 1970s and early ‘80s. But some of the prohibitions are being tempered with a dose of reason.

Pennsylvania, for instance, is reconsidering its time limits on happy hours. Restaurants and bars would still be restricted to 14 hours of drink discounts per week. But they could decide how to allocate that time. On a slow day like a Monday, for instance, they could extend the happy hour to four hours instead of the current maximum of two. On Friday, usually a busier night per se, they could forego any drink deals.

The law is almost certainly to pass, a sign that lawmakers are the economic struggles of both customers and service establishments. They apparently feel the industry is responsible enough, courtesy of server-responsibility training, to offer a deal and still not put a deadly hazard on the road.

Similarly, New Hampshire is likely to extend a helping hand to its service establishments by ending an across the board ban on happy hour ads. Towns and villages would be permitted to decide if local alcohol servers could advertise their drink deals.

That law, too, is expected to pass because local establishments could use the help. Local voters might also appreciate a heads-up about a bargain.

Elsewhere, the fear still prevails that people will drink too much if you make the indulgence enticing. Massachusetts, for instance, slapped Groupon’s wrists because the service’s deep discounts could be extended to alcoholic beverages as well as food. If you were buying a $50 credit for a restaurant meal, the coupon could be put toward the cost of the wine as well as the filet.

Not any more. Groupon agreed to back off that use-it-as-you-want approach after being told it was violating the cradle of liberty’s dram shop laws.

And then there’s Utah, the most begrudging state in the union for drinkers. It recently loosened up its liquor laws, but that easing was relative. A restaurant or bar can’t allow diners to see drinks being made because that might entice youngsters down a pathway to ruin. And a customer can’t indulge in a double gin and tonic. Instead, they have to order two drinks, one after the other.

Still, reason appears to be pulling ahead of fear on the national temperance front. That injection of reason can only help full-service restaurants in an era of 99-cent burgers.

It’s a good trend for those of us who enjoy a craft beer or good wine on the fewer occasions when we dine out today.

The caped designer

2011-06-24T09:06:00.002-04:00

Restaurant chains tend to cycle through their superstars. If one of the brands uncorks a hot ad campaign, the whole pack is soon howling for a marketing Moses to lead them out of a sales slump. Six months later, a headquarters mob is chasing that hero out the door, and the wistful speak of a tall, dashing CFO on horseback to turn the battle.

And so it goes, through ops wizards, menu-development masters, even high-charisma CEOs.

These days, the plea to X-Men headquarters is for a definite type of restaurant mastermind. The dude or dudette most in demand has nothing to do with food, service, training or finance. Typically they won’t even be part of the company, and their weapons of choice included cloth swaths, artist renderings and schematics.

Welcome to the age of the caped designer.

We don’t even know who these restaurant heroes are. But we’ll soon see their work. With few exceptions, the major fast-food chains are set to undergo what once-heralded marketers call a design upgrade.

Here’s just a partial list of who’s taking the plunge: McDonald’s, Wendy’s, Chick-fil-A, Jack in the Box, Burger King (though some questions have been raised on that one), Subway, Pizza Inn, Fazoli’s, Starbucks.

The stated goal of each is to add some sophistication to the brand and to encourage customers to feel more comfortable. Several go a step further and profess that they want patrons to linger for awhile, perhaps while sipping a high-margin beverage (ca-ching!) or watching a new entertainment network for which they’re compensated.

Observes say it’s part of an overall effort to capture customers from a higher demographic, as once-exalted CFOs might’ve put it.

Cynics are more pointed: The chains want to draw people who have a job and can afford to spend a little more. No surprisingly, those targets prefer nicer appointments than retina-singing fluorescents, industrial flooring, and garish-colored seats that might’ve been designed by the folks who gave us water boarding.

A warmer, comfier setting might not only be worth a few more cents per transaction, but might prompt them to linger longer and keep buying beverages or snacks.

So let us pay homage to that nameless hero behind a major trend remaking the quick-service sector, cape-wearing designer. He or she is literally changing the face—and possibly the fortunes—of the grab-and-go world.

Two headlines you didn't see

2011-06-23T14:48:00.005-04:00

"Local" going the way of "23 skidoo"?
When did “clean” become the replacement term for “local,” “sustainable” and “farm-to-fork?” All of a sudden, it’s the term of the moment for what we old timers once tagged as natural or unprocessed.

Consider, for instance, today’s announcement that veteran concept creator Randy DeWitt is installing recharging stations for electric cars at his Whiskey Cake restaurant. The press release notes that the restaurant’s menu items are made with “cleanly produced ingredients.”

There’s even an Eat-Clean Diet. And if you’re confused, you can contact the Clean Food Network or pick up a copy of The Complete Idiot’s Guide to Eating Clean.

Taco Bell uprising on Facebook
A group of Taco Bell fanatics are using Facebook to lobby for an earlier opening time for the Mexican chain. You have to admire their resolve—and their optimism. Their page is called “3 million fans to make Taco Bell open before 10AM.” Currently it’s been “liked” by 31 people.

The page seems to be the recent offshoot of such earlier Taco Bell-related movements on Facebook as “3 million fans to get back the Beefy Crunch Burrito” and the fundamental “3 million fans.” Clearly there are people in general circulation with an abundance of unstructured time.

Taco Bell’s official page boasts about 7.1 million fans, about a 24% leap from the tally we recorded in doing our Social Media 50 ranking.

Say wha?

2011-06-22T15:46:00.000-04:00

This could be a breakout week for chiropractors. With heads snapping left and right to catch the extraordinary restaurant news, we’re probably one neck strain away from a whiplash epidemic.

Consider, for instance, how many crania swiveled like desk chairs to make catch the incredible story that arose from France. After working hard for years, a brasserie there was awarded a coveted star from the Michelin guide. It’d be the equivalent of a U.S. restaurant getting a “semi-orgasmic” rating in every Zagat category.

But ears were cocked because this wasn’t a little-restaurant-that-could story. A one-star rating assumes that a place maintains a certain level of service, even if traffic rises. Le Lisita staffed accordingly and realized it had to raise prices to temper the wallop to margins.

Instead, the restaurant decided to cede the star.

I vaguely remember a restaurateur saying that a star in a Michelin-like rating system can bring an additional $40,000 in business. This place publicly attested that it wanted to keep prices at a level that wouldn’t give loyal patrons a case of sticker shock.

But that’s only the start of the week’s Ripley’s news. You may well have seen the results of a new survey that found Subway to be the top choice by far of quick-service consumers who want to dine more healthfully. That, to be honest, is a yawner of a data point.

Far more interesting is what brand finished second: McDonald’s. Not Chipotle or its fresh-ingredient brethren in the burrito sector. Not Panera or the other New Generation sandwich concepts. A brand once synonymous in many minds with unhealthy eating has become a viable option to the careful-dining crowd.

Finally, consider how much latte must’ve been spitted by New York Times readers when they came to the end of a recent story about Robert Gates, the outgoing U.S. Secretary of Defense. The longtime public figure (and onetime director of Brinker International) was asked what he’d do immediately after his retirement was official. “Go to Burger King,” he said.

Give that man a crown.

Talk about understatement

2011-06-13T11:51:00.004-04:00

During a presentation at the National Restaurant Association’s big show in Chicago a few weeks ago, Roark Capital managing director Steve Romaniello mentioned that his private-equity firm was “under-leveraged.” That’s financial-speak for “we have resources available and intend to put the dollars to work by buying something.”

That, it turns out, was Steven Wright-gauge understatement. Roark announced this morning that it’s buying Corner Bakery and Il Fornaio in one deal and Arby’s in another. The amount paid for the former two wasn’t disclosed, but Arby’s seller Wendy’s/Arby’s said it agreed to take $430 million for the troubled fast-food chain.

The latter deal in particular makes a tremendous sense for Roark, whose main restaurant holding is Focus Brands, the franchisor of Moe’s Southwest Grill, Schlotzsky’s, Cinnabon, Carvel and Auntie Ann’s. Indeed, Roark had long been rumored to be the leading suitor for Arby’s.

It not only has the finances but also the in-house expertise to oversee the brand. Focus’ president is Russ Umphenour, who once headed Arby’s largest franchisee, RTM. At one point Arby’s home office had enlisted RTM to operate all of the franchisor’s stores as well as RTM’s own. Umphenour is clearly familiar with the sandwich concept’s roots and character.

A Focus spokeswoman said that Arby's won't be part of Focus. Two of Roark’s other restaurant holdings, McAlister’s and Wingstop, already operate as stand-alones separate from Focus.

Its other holdings include Fast Signs, which might want to strike a deal with Wendy's/Arby's, since the latter presumably will change its name. Then again, it's retaining 18.5% of Arby's.

With the deal, Roark will now own the franchise rights to nine restaurant concepts. It has limited rights to the Seattle’s Best brand.

Some of what I learned at Summer Camp

2011-06-11T18:04:00.002-04:00

People Report’s Summer Camp made my two weeks at Boy Scout camp seem like a wasted piece of 1968. All I learned back then was how to smoke, spit and talk like someone who had sex four or five times a week—with a partner.

I took home a lot more from the past week’s version of camp. Consider, for instance, these info nuggets from Dallas:

*Red Robin has been using E-Verify, the controversial network for validating job applicant’s legal hiring status, for three years. The ramp-up was tough, but the company would never think of going back, said Bill Streitburger, vice president of human resources for the chain. “We had two state audits” and “there was no problem,” he recounted. Recruitment is a little more expensive because referrals from staffers have thinned, but wages haven’t risen as some critics had predicted, said Streitburger.

*The National Restaurant Association intends to raise the number of high schoolers enrolled in its ProStart foodservice prep program to 300,000 in any given year. The 90,000 currently participating get an early grounding in the culinary arts or foodservice management, typically before moving to an institution like the Culinary Institute or Johnson & Wales. It’s like a farm system for tomorrow’s restaurant talent—and as much loved by the kids as it is by the industry.

*Firehouse Subs is testing the use of QR codes as a tabletop marketing tool. Diners-in customers can use their smart phones to scan the little black-and-white markings. They’re instantly connected to information about the concept.

*Taco Bell, in contrast, is using the codes as a way of connecting to prospective employees. Potential job applicants who scan the markings call up a video on their phones about what it’s like to work at the chain.

*Also beginning at Firehouse is a bus tour for the fast-casual concept’s co-founders and CEO. The brass is rolling from unit to unit as a way of meeting as many crewmembers as they can, explained director of brand marketing Kristen Majdanics. She characterized the tour as a way of bringing the brand to the frontlines of customer interaction.

*The dark side of social media is the friction it can foster with labor regulators. As several speakers noted, a restaurant employee might cap a bad day on the job by slamming his restaurant employer via Facebook or Twitter. That’s the employee’s Twitter account or Facebook page, not the restaurant’s. If the place fires the youngster for sounding off, is it within its rights? It’s a matter that’s already come to the attention of the National Labor Relations Board.

*Remember the name James Fripp. He’s currently the young senior director of diversity and inclusion for Yum! Brands. During his time onstage at Summer Camp, Fripp showed an insight, knowledge and astute humor that makes me think he’ll be a superstar in the business before he ever has to even consider Grecian Formula. He did a pretty good job on the drums, too, wailing away as part of the Summer Camp band.

*The husband of Kelli Valade, Chili’s chief operating officer, frequently sits at Wally Doolin’s old desk. Yep, you read that right. But he’s not imagining that Wally’s job as CEO of Black Box Intelligence is really his. Joni Doolin gave Valade the desk years ago because the latter had no furniture after moving out of Roz Mallet’s home, where she’d lived for free in exchange for watering the plants. That’s Roz Mallet, as in incoming chairman of the National Restaurant Association. Valade revealed that she’d kept the desk all these years and that it now resides in her husband’s study. I’m not sure what any of this means, but it’s not the usual tidbit you get at a conference.

*Meanwhile, Valade’s son is showing clear restaurant-CEO potential, though he’s still in grade school. As the COO recounted, the boy recently informed her, “I’m having a service problem with the school cafeteria. Could you help me with that since that’s what you do?” And, of course, he stands to inherit a veteran CEO’s desk.

*Eighty-three percent of the generation known as Millennials sleep with their cell phones. See earlier observation, about interesting but not-so-useful morsels.

*Peanut-butter-and-bacon sandwiches are not going to be the next big menu craze, despite how nostalgic certain Campers waxed for that lunchtime flashback to their childhood camp days.

They might’ve been the ones sneaking out to smoke and spit, too.

Wisdom from an industry guru

2011-06-09T12:08:00.001-04:00

I didn’t even have to climb a mountain to hear one of the industry’s wisest men share his sage advice. Here’s some of the wisdom Wally Doolin offered to restaurateurs during an entertaining presentation this morning at People Report’s Summer Camp.

He prefaced his comments by noting that these are actions that could be undertaken today to improve an organization’s performance.

*If you’re not fostering curiosity as a core characteristic of your organization, “you’re missing the boat,” said Doolin, the former CEO of Buca di Beppo, T.G.I. Friday’s and Le Madeleine.

*Along the same lines, keep learning whatever it takes to keep your organization vibrant and effective. “You have to continue to build your skills. If you don’t, it’s like a game of musical chairs. You’re going to be left out of a job,” said Doolin.

*Build trust. Without it, there’ll be no exchange of ideas, and not everyone will be freely pursuing communication and cooperation.

*Embrace technology, but do it as a cross-department endeavor, with a process in place to ensure there’s progress toward selection and adoption.

*In regard to social media, it’s all about “bringing the consumer and the employee branding together. How do we bring employee branding and consumer branding together to make a more powerful organization?

“That only happens when you drive it,” he said. “What are you going to do to drive it, to make it happen in your lives and your organizations? How are you going to put it into action?”

On the road at Summer Camp

2011-06-08T23:11:00.002-04:00

People, we need to save one of our own. I’m not even sure of his name, but he fell asleep next to me at a restaurant conference on human resources a few years back. While a speaker droned on about empowerment or the importance of training, my neighbor’s head slowly tipped back, and you could almost see the Z’s flying cartoon-style out of his mouth.

We have to find that poor nodding soul and send him to People Report’s aptly named Summer Camp. It’s the only conference I know that opens the evening’s activities with a song from Foo Fighters—sung by the CFO of the host organization.

Actually, he was part of the Summer Camp Band, which also included representatives of Yum Brands, if I heard correctly. It was hard to make out the IDs because so many people were hooting and cheering as the four-piece ensemble wailed.

They’re the house band for what is undoubtedly, beyond a shadow of a doubt, by the acclamation of anyone who even walked past the hotel ballroom tonight, the most let-your-hair-down conference in the industry. When was the last time you went to a meeting that opened with a “Glee”-like talent contest? (If the Batrus Hollweg Dancers post a video, DO NOT miss it.)

It’s surely not (just) a party. Tomorrow and Friday are packed with sessions on HR and its interrelation with social media, as you’ll see from my tweets (#PRSCAMP) and subsequent blog entries.

But there’s no doubt that it’s the ideal cure for PowerPoint-induced narcolepsy, the unspoken scourge of our business.

So, please, help me in locating that individual and making sure he signs up for next year’s conference. A chance at fun learning is too important to waste.

Wendy's version of farmers' night

2011-06-07T15:45:00.003-04:00

If the restaurant sported a different name, it’d be a non-event. What’s one more farmer addressing one more batch of consumers about what he grew for their local restaurant?

But because the place is Wendy’s, you have to marvel. Whether you label it local, seasonal or farm-fresh, food with a story is going mainstream. Independent restaurants have been the instigators. But now chains like Dave’s brainchild are clearly striving to catch up. Instead of farm to fork, it’s farm to fast-food.

In Wendy’s case, the concession to true food is the chain’s new Berry Almond Salad, made with fresh strawberries and blueberries. If you doubt it, Wendy’s has an expert witness ready to testify. Just press the Play button on a YouTube video to hear Jim Carter talk about how his Eclipse Farm in Oxnard, Calif., produces the strawberries.

Just as a farmer might tell a white-tablecloth crowd about the heirloom beets or heritage pork they’ll be savoring that night, Carter explains what makes a strawberry perfect and how his farm adjusts its processes accordingly.

He also stresses the freshness of what’s provided to Wendy’s. “From the picker’s hands, the fruit is in the cooler within an hour,” he says.

The video isn’t the first time a major fast-food chain has touted the fresh-from-the-farm aspect of its ingredients. Domino’s famously ran a commercial where a focus group watches the walls around it collapse to reveal they’re in a farm like the one that suppies the pizza chain.

McDonald’s drew heat with an ad campaign in the Pacific Northwest that stressed how many menu ingredients were taken right from that area.

Wendy’s, interestingly, didn’t blare the claims about its strawberries via broadcast media. Instead, it showcased the video on its Facebook page. You have to hunt a bit to find it on YouTube.

Even that modest approach seems to be in keeping with the food-with-a-story movement, where too much gloating is quick to be tagged as greenmailing.

Cynics are still going to slam Wendy’s, basically arguing that a fast-food chain can’t fit the movement. But I don’t see how they could deny that this is a major step in the right direction.

A first restaurants would prefer not to see

2011-06-05T21:58:00.005-04:00

Lawmakers in Connecticut are close to making their state the first to mandate paid sick leave from private employers.

They approved the benefit on Saturday after what was reported to be a high-spirited 11-hour debate.

If signed into law by the governor, the measure would require every service business with more than 50 employees to grant employees one hour of paid sick time for every 40 hours they log on the job.

The paid time off could be used not only for the employee’s recuperation, but also for the care of a child, spouse or parent. Qualifying employees would also be compensated for time needed to deal with sexual abuse or family violence.

The bill’s most controversial aspect is the exemption it granted to manufacturing businesses. Legislators apparently felt the state’s manufacturing sector needs all the breaks it can get to survive. A costly measure like paid sick leave could be a last straw for the few remaining manufacturers in what was once a major enclave of factories.

The Connecticut Restaurant Association had argued that restaurants couldn’t afford the expense, either. It noted that the measure would in effect double a place’s expenses for any employee who called in sick. The restaurant would have to pay the wages of that staffer and his or her replacement.

The state hosts about 600 restaurants who employ about 145,000 people, according to the CRA.

The legislation is almost certain to be signed into law by Gov. Dannel Malloy, who pledged to support paid sick leave during his campaign for the job.

Bad time to be a mascot

2011-05-31T09:55:00.004-04:00

Think your job is less than secure? Try working as a fast-food mascot.

Groups have used petitions and newspaper ads to call for the firing of Ronald McDonald, who was getting less camera time in commercials as it was. But at least headquarters publicly reassured the clown he’d always have a place at McDonald’s headquarters to park his oversized red shoes.

Not so for the Burger King figurehead, who, rumor has it, was studying Portuguese to get in good with the new Brazilian owner. Today brought a blockbuster news report from the Miami Herald about a reimaging campaign for the Number Two burger chain. As part of the facelift, the wooden-faced King will be downgraded from everyday star to the old guy who’ll be kept on the bench for pinch-hitting situations.

The chain has realized that the King resonates too well with young blue-collar males, the so-called super heavy users of fast-food restaurants. It wants to broaden the Home of the Whopper's scope to include more women and families.

Reports that the King is now moonlighting as the recurring killer in direct-to-video horror movies could not be confirmed. It just seems certain he may be logging some bench time, maybe down in the dungeon.

I guess we should look at the bright side. Jack, of Jack in the Box fame, is routinely picked as the mascot whose head is most likely to roll, though that speaks more to the shape of his noggin than any concerns about job performance. He also has a front-office position as chairman.

And let’s not forget the Jollibee bumblebee. Despite the decimation of honeybees, the mascot continues to buzz along, drawing customers to his Filipino chain.

Maybe the King could fill in for vacations.

Meanwhile, in the statehouses...

2011-05-30T11:00:00.002-04:00

While you’ve been working to keep your restaurants alive, lawmakers in at least two states have been trying to help. But the outcome of their efforts are as different as Michael Jordan the restaurateur and Michael Jordan the sports superstar.

First, the laudable effort: In Louisiana, the state House of Representatives is expected to consider a measure that would give restaurants a 4% rebate on purchases of produce and vegetables from farms within the state.

The measure, which has already passed the Senate, is a brilliant way of helping everyone in the supply chain. Farmers will theoretically benefit from stepped-up demand, while restaurateurs get a significant discount at a time of escalating commodity prices. Meanwhile, the measure encourages eateries to feature the ingredient for which Louisiana is famous, adding some appeal to what’s arguably the most popular culinary-tourism destination in the country.

Now, the flip side: Utah, in a fit of reactionary craziness, has passed a law that encourages restaurants and other businesses to accept gold and silver coins instead of greenbacks. The precious metals would be worth their weight, not their face values. For instance, a $10 gold coin would be valued at the current per-ounce trading price for gold, not $10.

That means a restaurant would have to keep a scale on hand and be completely versed in prevailing gold and silver rates.
The rationale for the new law? Tea Party members and sympathizers say the measure will preserve the state’s economy when U.S. currency is rendered valueless by the imminent federal collapse.

That sentiment was enough to get the law passed and on the books.

What a relief that must be to restaurant operators in Utah.

My most un-excellent adventure

2011-05-26T11:14:00.008-04:00

It’s a dark, dark day; Marriott let me down.

It’s my go-to brand when I need a room in a location where I don’t know the hotels. You’re not likely to be stunned by some new amenity or service (though the Café in its Courtyard line is the best new restaurant concept I’ve seen in years). But you’re assured Tony Soprano-scale protection from unpleasant surprises, too.

Which makes last night all the more heartbreaking. Because a res agent got caught up in rules and process instead of listening and trying to please the customer, I ended up trying to sleep on a cot in Chicago’s Midway Airport with several hundred strangers arrayed to either side of me.

Because of bad weather, my 7:40 p.m. flight out of Midway was steadily pushed back. Finally, a little before 1 a.m., Southwest cancelled the flight. As about 140 of us stood in line to be rebooked the next day, I called Marriott’s reservation line to see if I could score a room near the airport. My mistake was saying, “I need it for tonight.”

Sure enough, there were plenty of rooms at three Marriott properties near by, the res agent assured me. We completed a booking for a Courtyard. Life was looking good. Then she asked me when I’d arrive. Cue the Monty Python music.

“I’ll be there in about a half-hour,” I told her.

“Huh! That’s definitely an early check in,” she responded.

“No, no, no—it’s for tonight, not tomorrow night.”

“Well, I don’t know where you are, but where I am it’s after 1 a.m., so it has to be for tonight.”

“I actually need it for yesterday, then.”

Dead silence.

“It’s Thursday, not Wednesday,” she finally said. “Don’t you want it for tonight?”

“Yes, but ‘tonight’ as in ‘right now,’ not 12 hours from now.”

“Well, you don’t have to wait 12 hours. Check-in’s at 2.”

That give and take continued for about 10 minutes. Finally, I said, “If I go over their right now, would they have a room for me? Because that’s what I need, not a bed in 12 hours.”

“Yes, they would,” she assured me. And they have a courtesy shuttle from the airport!

In her defense: I never stepped into her procedures. I should’ve told her, I’ll be checking out on May 26, not May 27. But it didn’t occur to me.

So off I went to catch the shuttle to the hotel. A half-hour later, the rain pouring down, I charged into the lobby with the hope of getting off my feet and into a clean bed. With free WiFi!

Instead, the woman at the front desk told me I was a day early.

I told her what had happened. She threw up her hands and told me she had no rooms, and neither did any of the other hotels in the area. I’d best head back to the hotel and try to score a cot with the other strand-ees. She’d even call the shuttle right away to take me back.

The good news: The shuttle driver had been left most of a pizza by a customer. Hearing my story, and how I hadn’t eaten and how everything at the airport was closed. he asked me if I’d like some. A free dinner, sort of on Marriott.

By that time, I only had about four hours until my flight out of Midway. By the time I booked a downtown Chicago room, which were plentiful that night, I’d have to turn around and come right back to the airport.

The cot was looking pretty good.

Now I’m in Orlando, waiting for my connecting flight back to New York. The total time for my post-NRA show back home will clock in at roughly 24 hours, with a little airport-corridor camping thrown in.

I’ll definitely go back to a Marriott. The one awful experience is offset by a hundred good ones.

Still, there’s a lesson there. I can’t possibly be the only traveler in Marriott history who discovered he needed a hotel room after 12:01 a.m. on the calendar day I was booking.

Please, someone explain to that agent that she’s in customer service, not rules execution.

Close to fisticuffs at the show

2011-05-24T22:20:00.002-04:00

Some mixed martial arts were served up during the NRA show at a no-holds-barred debate between chef Stefan Richter, owner of Stefan’s at L.A. Farm, and Luther Lowe, Yelp’s director of business outreach.

Most of the heat was generated not in their exchanges, but in the verbal volley between Richter and the uniformed Yelp employees in the audience.

Richter was swinging from the moment debate moderator Corby Kummer began the education session with a fairly innocuous question: “Do you read your reviews on Yelp?”

“Yes, I do read my reviews on Yelp, and I get my panties in a twist,” said the chef, a runner-up on the hit TV show “Top Chef.” Indeed, Richter said the prospect of bad reviews has cost him considerable sleep.

The problem, he says, is that so-called citizen-reviewers don’t base their assessments on reasonable criteria like service, but on “bull shit,” like his tendency to come out of the kitchen and speak with guests, or even to have a glass of wine while he greets customers. That leads to blasts on Yelp that he’s not manning the line as a chef should.

Once, he asserted, he was dunned a few stars because local gossip reports had mentioned his break-up with a girlfriend.
“You want to comment on my service? Fine. You want to comment on my personal life? Fuck you,” he barked. “Just eat your steak and enjoy it.”

You don't have to pay attention, and don't be so sensitive, contended a woman in the audience.

That drew a sharp retort from Richter.

When the shouter returned the volley, Kummer interceded with a request that she hold her “questions” until the end.

What the woman had yelled was true, Kummer commented to Richter: “You don’t have to care. But you do. Isn’t that the point?”
Playing the diplomat, he turned the focus to Yelp’s Lowe, who calmly asserted that part of the problem is a difference in perspective between customer and chef. He recounted how a restaurant was aghast because a customer kept complaining on Yelp that the place didn’t provide crayons for her children.

Lowe told the concerned restaurateur that the gripe was actually a good thing. Patrons looking for a sports bar where they could watch the game over a few beers, without the noise and mayhem, would read that review and choose the restaurant, he contended.

Full disclosure: I had to leave the session right at that moment to dash to a meeting outside of the show. For all I know, Lowe and Richter were hugging at the end, and the whole room might’ve erupted into a moving rendition of “Kumbaya.”

But when I saw an ambulance heading in the direction of McCormick Place while I was cabbing elsewhere, I did do a major double-take.

Another round of NRA small plates

2011-05-24T11:46:00.003-04:00

Knowing your ale from your elbow
Scotty’s Brewhouse, an Indiana-based casual chain, is now asking applicants for bartender jobs to take a quiz first on beer. The chain wants to gauge potential hires’ beer knowledge before giving them a job, explains PeopleMatter, the company that set up the test as part of its application software.

Will oyster leaf be the next craze?
Using the ironclad Rule of Three (i.e., three instances signal a trend), chefs’ use of oyster leaf by is right on the cusp. During an education session, the gardener for Thomas Keller’s Napa Valley restaurants noted how the celebrated chef asked him to cultivate the green, which tastes uncannily like oysters. Samples were provided in one of the booths featuring micro-herbs.

Innovation may be the biggest theme of the show
Traffic on the show floor was particularly thick yesterday afternoon in the Technology Pavilion and the American foods aisles, all of which feature smaller booths frequently manned by entrepreneurs. That dynamic fits what was stressed in everything from education sessions to meet-the-chef presentations in the World Culinary Showcase: Innovation is the key to success in the current economic environment.

Rolling 'bout The Rapture
The fallback for comedic material during the show has been The Rapture, originally predicted to hit on Saturday afternoon, as some of us were having an extra Nathan’s sample just in case the holy rollers were right. An example: Chef Barton Seaver opened his comments on seafood sustainability during an education session by noting The Rapture is already here for the nation’s oceans.

A few small plates from the NRA show

2011-05-23T13:16:00.001-04:00

Phoning it in
Coca-Cola is already working on technology that will allow restaurant customers’ smart phones to “communicate” with self-serve drink dispensers. Buying a highly customized drink could be as easy as relaying the info from a Droid or iPhone. The capability could also deepen the information a restaurant collects on consumption behavior.

So, how’s traffic?
It’s a sport to speculate on the volume of traffic on any given day at any given point on the show floor: “Traffic is great!” “The traffic sucks.” “It was great yesterday, but today? Eh.” After attending 30 shows, I’ve never heard a consensus from vendors or operator attendees

But here’s a quick gauge on the caliber of attendees. I literally bumped into McAlister Deli’s CEO Frank Paci as he walked the American foods aisle with his corporate chef, David Groll, and several other top execs. Turning a corner in to the second aisle of that show-floor area, I nearly collided with a man wearing a badge that identified him as a president of Bravo. It wasn’t clear if that organization is affiliated with Bravo Brio, the polished-casual dinnerhouse operator, or some smaller local chain that operates under the name Bravo.

I would’ve asked him but he was too engrossed in examining what was in the booths.

NRA’s Greatest Hits
So what’s the best-selling recording of education breakout sessions (most of which are taped for sale as CD or web-delivered MP3’s)?

It’s sort of the boxed set, explained the woman manning the sales booth.

The most common order, she said, was a purchase of all the recordings. That runs about $100, while individual recordings are about $25. “People figure, ‘Why not just buy them all?’” she said.

NRA Show generates some new-concept buzz

2011-05-23T11:36:00.001-04:00

If discussions at the NRA show are any indication, concept development is revving up again.

A speaker in an education session on energy and water conservation, of all topics, mentioned that Pizza Fusion CEO Vaughan Lazar was in the brainstorming process for a second venture. Like Fusion, the spin-off would be grounded on green principles, the speaker said.

Pizza Fusion confirmed the report in New Age fashion by retweeting an audience member’s Twitter recount of the remark. It the company’s passing along the word, it must be true.

Meanwhile, a veteran chain-builder who asked not to be identified remarked off-hand that he’s considering a new concept, too. He wouldn’t provide details, but all of his previous ventures have been in the fast-casual segment.

Stay tuned for details.

Another day at NRA, another rescue

2011-05-22T00:38:00.004-04:00

Several hundred of us watched a life being changed tonight. The change-ee will never forget an evening that started with dire concerns about her family’s financial situation and ended with a fresh start, courtesy of two restaurant luminaries who presumably didn’t know her before today. But I’m pretty sure the rest of us will never let it slip from memory, either.

But first, some chiding: If a mention of Salute to Excellence calls to mind a predictable night of canned speeches and saccharine tributes, you clearly weren’t at tonight’s installment.

The banquet, which was celebrating its 25th anniversary, is unique in the business because it spotlights individuals at either extreme of a foodservice career.

Part of the festivities is celebrating the teenage winners of the annual ProStart challenge, a competition between high school culinary teams from across the country. As the mentor of the winning team stressed to me, his pride unbridled, “These are the leaders of tomorrow.”

The other usual highlight of the evening is a celebration of a new “diplomat,” or an industry luminary whose example is an inspiration to any thinking person in the business. This year’s honoree was Ralph Brennan, one of the finest individuals ever to grace the trade. Put a Friday lunch at his Ralph’s on the Park on your bucket list, because you’ll see how sublime a New Orleans dining experience can be. He’s that good as a restaurateur.

You can argue that he’s even better as an industry leader, tirelessly serving the industry through his association involvements and informal mentoring of those who work for or know him.

Kudos to the NRA’s Education Foundation for packing a surprise tonight for Ralph and everyone else in attendance. Before he took the podium, pandemonium erupted. A second-line parade blew through the doors of the ballroom, with masked participants throwing or handing out beads, umbrellas spinning, as they high-stepped and danced through the room. A three-piece rock combo appeared on a balcony, wailing out a New Orleans tune. It was raucous.

Then, after Ralph gave a moving speech, many of us jumped out of our skins as cannons shot glittering confetti over our heads. The band charged into “My Tutu,” and the place rocked. This was not your father’s Salute.

But that wasn’t the big surprise of the evening. That came earlier, in what was clearly an unscripted moment.

Apparently some of the attendees had learned of the difficulties a high schooler in the ProStart competition was having at home. The nature of that rough patch wasn’t disclosed, but there was a vague mention of financial problems. In any case, explained master of ceremonies Carlton Curtis, the young woman would probably have to scrap her plan to start culinary school at the celebrated Le Cordon Bleu.

Not so fast. Curtis ceded the microphone to Ferdinand Metz, the former dean of the Culinary Institute of America and a long-time culinary educator. He noted that Burt Cutino, chef of the famed Sardine Factory restaurant, was on the board of Le Cordon Bleu. He and Cutino agreed that the young woman shouldn’t be denied a culinary education. So, on the spot, they were giving her a full scholarship.

The young woman came to the podium and tearfully gave thanks. It’s a safe bet the banquet staff had to collect plenty of damp napkins that night.

“Now you know why we do what we do,” observed Curtis.

Come hear our presentations

2011-05-20T14:48:00.000-04:00

Restaurant Business will be providing information face-to-face this weekend. We have two sessions that we’re moderating on Saturday at the National Restaurant Association show, and we hope you’ll be there.

Sam Smith, our editor in chief, will be looking at the burning issue of rising commodity costs and how operators are dealing with it. Joining him will be David Groll, the former menu R&D chief for McAlister’s Deli; a purchasing specialist; a commodity-price expert; and a representative of the American Restaurant Association. Sam’s panel is scheduled for 12 to 1:30 in room S405B.

I’ll be leading a session on foraging, or how restaurants can secure sufficient supplies of local menu ingredients at a reasonable price. On my panel will be experienced foragers from Whole Foods Market and Bon Appetit Management, a contract feeder that has made local sourcing a part of its DNA.

Also speaking will be the former forager-in-chief for Chicago, who used his local-foods skills to help supply the city’s green markets.

Come see us at 2 o’clock in room S404ABC.

This much we know already

2011-05-18T17:46:00.001-04:00

With the NRA show just hours away, certain truths about this year’s convention are piling up like used toothpicks at a sliced-pepperoni booth. Here’re some of the insights we’ve gleaned so far:

--The prize of choice for vendors using giveaways to draw a crowd is the iPad 2. Today brought several invitations to win the tablet by being one of the first 100 people to visit an event or booth on a particular day. Show up and you’re eligible for the drawing.

--One of the hot topics this year will be garbage—how to recycle it, compost it, dehydrate it, turn it into energy or otherwise reduce its volume. Attendees will hear about it the education sessions and on the exhibit halls’ floors.

--There’ll be more of a spotlight on green replacements for chemical cleaners and degreasers.

--The barriers of outrage continue to be extended. For instance, our staff was buzzing today about an invitation to come meet a new online uniform supplier that’ll be exhibiting, BreastaurantUniforms.com. It promises to turn any restaurant into a competitor of Hooters or Twin Peaks.

It’s hardly alone in trying to use an edgy name. I also came across a mention of an exhibitor that makes mats that go under urinals. It’s called WizKids.

Meanwhile, I’m really worried about the Restaurant Business staff. We’ve set a quest for ourselves of finding the booth that’ll be giving away cookies to tout its product, the urinal cookie, or the antiseptic, anti-odor cake that goes in a urinal.

Year of Mobile Management?

2011-05-17T15:50:00.001-04:00

The show hasn’t even started, but a theme is already emerging for the National Restaurant Association’s mega-convention in Chicago. If the early hubbub is any indication, this may well be the Year of the Handheld.

We’ve been hit with a Duluth-scale blizzard of alerts from industry newcomers who are set to change the business come May 20. They’re using the show, still the king of industry trade expositions, to introduce apps, new uses for iPads (primarily as menus, though also as a billing mechanism), restaurant finder services (think TripAdvisor and OpenTable), and citizen-rating networks (Yelp and a host of others).

We’ve seen this sudden emergence of an industry phenomenon before. The Year 2000 was a prime example, with more computer terminals in the booths than you’d find in the programming wing of Microsoft. The exhibitors weren’t touting computers or terminals, but online services, particularly purchasing schemes of one sort or another (the buzzwords flying that year: “aggregation,” “reverse auctions,” and “economies of scale for independents.”)

Curiously, I can’t think of more than two of those companies that are still around, and they’re almost unrecognizable from what they were.

Not that this year’s handheld upstarts are doomed. Far from it, though a shakeout always follows the rapid emergence of a new product or services category. Indeed, we at Restaurant Business feel bullish enough about handhelds to devote an editor to their coverage. So now we have a specialist in social media (yours truly), food (Pat Cobe), ideas and innovation (Sam Smith) and now handhelds/mobile management (Amanda Westbrooks).

We believe handhelds will follow the path of sustainability, the big focus of NRA 2008, though everyone knew it as the green movement back then. From a minor presence the year before, a conservation sensibility had grown into something omni-present.

That hasn’t changed. Indeed, this year EcoLogic will give us what is likely the first NRA to be made of living walls (i.e., plants growing on a vertical plane) and a grass floor.

Introducing 'flash dining'

2011-05-14T19:13:00.002-04:00

New York foodies are buzzing about a recent underground event that could put a new phrase in the mouths of coastal trendinistas: Flash dining.

A logical progression of the pop-up restaurant, the new breed of sport dining would add the elements of illicitness and split-second service choreography to the notion of a limited-time culinary spectacle. Indeed, the precision and daring make Cirque de Soleil look like a spirited croquet game.

The setting was a Brooklyn-bound subway car. Not one reserved for the purpose of providing a few dining adventurers with a one-of-a-kind experience, mind you, but a car making a typical midday run.

The host, a group that describes itself as a culinary performance troupe, took over just one section of the car. As other New Yorkers settled into their usual subway routines, the team from A Razor, A Shiny Knife strung boards from the poles where commuters grab ahold as the train moves.

At the next stop, the dining parties—seemingly a dozen strong—were escorted by a tuxedo’d maitre d’ to their seats behind the suspended tables.

At the stop after that, they were served their first meal, a Japanese spoon of hamchi crudo and bone marrow. It had been prepared at a nearby residential kitchen and run to the train by a “waiter” who paid his fare and boarded the train at the exact car where the customers had been seated.

At the stop after that, it was a foie en brioche with a port reduction, which the customers were advised to eat within four minutes, or before Course #3 would be served at the next stop.

That was the ramp-with-black-garlic station, so to speak.

It was followed by the petite filet mignon, cooked and plated remotely, then served by the waitstaff that hopped aboard en masse.

The whole time, the maitre d’ kept water glasses filled. It’s illegal to drink wine in a subway. Having a six-course meal likely is as well, but every guest and serving-staff member had paid their fare.

The flash-dine continued, one course per station, until dessert was served. At the next stop, the patrons were free to either exit or continue on their way.

The whole thing was caught on video, which you can see here.

It could be a preview of what could be coming to a transportation venue or other challenging location near you.

Remember, you heard it hear first: Flash dining.

A kick to fast food's buns

2011-05-13T12:54:00.001-04:00

The quest for better burgers isn’t leaving the bun behind.

The sandwich upgrades underway at several major fast-food brands focus as much on the bread as what’s between it. The perfect example: Wendy’s, whose buns are about to be buttered.

And toasted, stressed Roland Smith, CEO of the chain and its parent company, Wendy’s/Arby’s Restaurant Group. The chain’s new Dave’s Hot ‘n Juicy cheeseburger line will be served on a toasted, buttered bun, Smith explained to financial analysts during a conference call this week. That twist will make the burgers better than the ones sold by Five Guys and In N Out, he asserted.

Indeed, he made that boast at least three times to the investors participating in the call.

Because the chain will install toasters for the burgers, it can also use a buttered, toasted foundation for its new chicken sandwich line, or what Smith called the Gold line.

The sandwiches will also feature what he described as a better fillet, a better marinade, and better breading. Still, he stressed the importance of the new bun in setting the offering apart.

A better bun is also one of the selling points for McDonald’s new premium chicken sandwich. It features what the chain calls a honey wheat bakery-style roll, and is also toasted.

It’s the latest step in McDonald’s march toward better bread. Its premium Angus burger line is similarly served on a bakery-style roll.

Jack in the Box is similarly using what it calls a bakery-style roll for its sirloin burger.

Clearly the fast-food sector isn’t living by the patty alone.

Restaurant publicity stunts are alive, but not well

2011-05-13T12:48:00.001-04:00

A pink ass seldom sells restaurant meals, or at least not outside of certain neighborhoods in New York and San Francisco. But that didn’t divert the marketing ploy from express-line entry into the Restaurant Publicity Stunts Hall of Fame, which might have to open a whole new wing after recent weeks.

Indeed, we may be in a Golden Age of restaurant stunts, a reflection of the need to offset shrinking (or non-existent) marketing budgets with outrageous actions. That factor is changing the very nature of stunts. No longer are they single events, over and done in a flash.

Consider, for instance, how a newcomer to the better-burger market tried to set itself apart from the spatula-wielding pack. Twenty-three-year-old Lakita Evans decided to call her Waco, Texas, outlet Fat Ho. Its specialties include a Sloppy Ho, a.k.a. a brisket sandwich, and a Supa Dupa Fly Ho.

Evans hit the mark. Papers across the nation have reported on her venture, invariably focusing on the name and her age rather than the quality of the food and service.

Many of the reports noted that she was opening a pimp’s walk away from the Gospel Café, a ploy practitioner in its own right.

Neither should (or would) be confused with Buns, a burger joint in Chapel Hill, N.C.

And don’t expect to find More Than a Mouthful Burgers, the signature line of Hooters, a pioneer of the suggestive-name approach.

But the all-time winner of the double-entendre approach has to be Pink Taco, which, some of Reality Check’s readers in stained raincoats have informed me, is slang for female genitalia.

But the gynecology-inspired concept didn’t stop there. Last week, in honor of Cinco de Mayo, the Los Angeles casual restaurant decided to post something decidedly Mexican outside its tony Century City location. It took a donkey, or what patrons of the Gospel Café might know from their bible readings to be known also as an ass, and painted it pink.

The animal was staked outside the mall restaurant, “Pink Taco” written on its flank in what looked like a finger-painting endeavor.

The restaurant got attention, for sure. But unfortunately some of it came from animal-rights advocates, who moved in like vice cops staking out Charlie Sheen’s house. The restaurant agreed never to use a live animal in its promotion again.

But take heart: There’s still a respect evident among restaurant stunt-pullers for the classics. KFC, for instance, used the timeless stunt setting of a skyscraper’s upper floors to call attention to its new $5 bundled lunch meals. At noon today, someone dressed as Col. Sanders will rappel down 38 floors of a Chicago building to deliver lunches to window washers dangling outside the 40th floor.

Reports that the chain considered a flag-pole sitting contest could not be confirmed.

Even more conventional is what Arby’s is doing to introduce its new Grilled Chicken & Pecan Salad Sandwich and wrap—ironically, like KFC’s new lunch deal, a product intended to draw customers away from Subway.

The chain will give away free sandwiches and wraps to customers who buy a 22-oz. soft drink anytime before May 23. Patrons are then invited to vote for which they like better, the Arby’s sandwich or Subway’s Orchard Chicken Salad sub.

There’s been no response from Subway. Maybe it’s thinking up its own stunt.

The publicity event is alive, but not necessarily well

2011-05-11T12:57:00.000-04:00

What else is on Landry's plate

2011-05-05T17:16:00.001-04:00

The leadership team at Landry’s Restaurants must be a tuckered bunch. They’re in the midst of a remarkably shrewd attempt to take control of McCormick & Schmick’s, a competitor of the company’s namesake brand. But that’s just one of the matters that likely has them gulping coffee and dreaming of vacation.

There’s also a lawsuit arising from an earlier acquisition, revealed as part of the thrust and parry with McCormick & Schmick’s management. The executives filed a PowerPoint presentation yesterday with the U.S. Securities and Exchange Commission that spells out why they’d rejected Landry’s $9.25-a-share purchase offer. The presentation is apparently being given to shareholders, and hence had to be put on record with federal regulators.

Among the stated reasons for opposing the takeover are the alleged “dubious dealings” of Landry’s and its principal owner, Tilman Fertitta. The pertinent slide asserts that Fertitta has used “coercive tactics” in past takeover attempt. It cites the example of Fertitta’s release of an offer to buy Smith & Wollensky without the steakhouse chain’s permission.

McCormick & Schmick’s apparently thinks it’s coercive to let shareholders know what a prospective buyer is willing to pay, instead of letting the seller’s management filter that information to the owners.

The dubious-dealings slide also cites a lawsuit filed on April 27 by the former owners of Bubba Gump Shrimp Co., the Forrest Gump-themed dinnerhouse chain that Landry’s acquired last year. According to McCormick & Schmick’s, the suit accuses Landry’s of breaching its fiduciary responsibilities to the sellers.

No details were provided, and a number of internet searches turned up nary a word. Landry’s, as a private company, typically doesn’t discuss such matters.

If that’s all the team at Landry’s had on their plate, they’d be excused for looking a little haggard. But they also have to prepare for the likelihood of getting a green light on another acquisition, the purchase of an Atlantic City casino from Donald Trump.
Landry’s offer of $38 million has already been accepted. But the sale and changeover of the property to a Golden Nugget casino-hotel has yet to be approved by state gaming regulators.

Meanwhile, there’s still the issue of bagging McCormick & Schmick’s. As the company had said in an earlier SEC filing, it thinks Landry’s is trying to lowball the market with its $9.25 bid. So, it announced, management was commencing a formal sale. Suitors welcomed.

Fertitta responded by praising the company for realizing it should change hands. He then dropped his hostile takeover attempt and announced he’d pursue the company in the very fashion it preferred. He’d get in touch with the appropriate sales agents and begin the negotiations.

You have to wonder how he’ll respond if they show him the PowerPoint presentation.

Maybe you should sell T-shirts

2011-05-04T12:40:00.002-04:00

Good news for family travelers: You won’t have to drive three hours this summer to take in attractions like Paul Bunyan’s Giant Ball of Tinfoil. This vacation season those educational opportunities will be no more distant than the nearest restaurant, where June, Skipper and Princess can witness the World’s Greatest Vise in action.

But first, a primer is in order. During the Great Recession, discounting was one of the few ways restaurants could brake the loss of customers. And, man, did they use it. According to Burger King franchisees, they were actually losing money on some of the bargain-priced items they were forced to sell by corporate. McDonald’s ‘zees similarly griped about the dollar price tag they were pressed to put on some breakfast options.

Rock-bottom deals weren’t merely a quick-service phenomenon. Steak chains survived the downturn largely by giving customers low-ticket alternatives, like bar menus and drink specials. Casual chains bundled their selections, packaging two entrees and a shared appetizer at what an entree alone might’ve once cost.

Deal-making, once merely a tactic, became a fundamental strategy. Customers came to expect the deals. Some might say they became addicted. But, hey, the approach worked.

The industry might’ve had time to ease through a reasonable detox. But the rise in commodity costs snatched that option away. Patrons still refused to step through the front door unless they were offered a steal. But the bargains were harder for operators to swallow because ingredients like tomatoes and beef were costing a lot more at the back door.

Voila: The World’s Greatest Vise, a.k.a. the after-Recession squeeze on margins.

Commodity prices are difficult to cover because they’re slipperier than an eel with a law degree. The direction can shift profoundly, one way or another, in a matter of days or weeks.

But recent headlines suggest we’re seeing just the beginning of the climb.

Consider, for instance, one little-noticed effect of last week’s tornadoes in the Southeast. The twisters hit nearly 400 chicken coops in Alabama alone, or roughly 25% of the state’s bird-rearing facilities. The Wall Street Journal reported that about 5 million birds were killed, putting an extreme crimp in supply.

That devastation came as chains like Wendy’s were tinkering with new chicken sandwiches, a move interpreted by many observers as a reaction to soaring beef prices.

The good news: Chickens require only about six weeks to reach maturity. If facilities can be repaired and flocks replenished, the damage could presumably be offset quickly.

Not so with sugar. The Journal, a real bummer this past week, reported that domestic crops of sugar cane were undercut by Florida’s cold snap in December.

Yet to be determined, it added, is the effect of flooding on Midwest areas that cultivate sugar beets. The experts are gauging how the rainfall affected plantings for the spring and summer growing season.

And, just to put that (unsweetened) cherry on top, the paper noted that the U.S. government is tightening the cap on sugar imports.

Not that the worldwide market is awash in the stuff. Bloomberg reported a few months ago that cyclones destroyed much of Australia’s sugar-producing fields. The European Union had already addressed the issue.

So had the United States. Farmers had indicated an intention to cultivate more sugar beets to exploit the worldwide opportunity. Oh, well.

At least families won’t have to use as much gas this summer to take in cultural sites like House o’ Mud, Alligatorville and Michigan’s Largest Ball of String.

Maybe they’ll use the savings to buy a drive-thru burger—at full price.

Party on, Mariano

2011-05-02T15:11:00.003-04:00

Never mind the buzz about Osama Bin Laden. The frozen-margarita machine is about to turn 40!

The official anniversary is May 11, according to a press release issued this morning. It noted that the Smithsonian Museum spent a year verifying the date and the identify of the inventor, a Dallas restaurateur named Mariano Martinez, who, like Fergie and Adele, usually goes by his first name.

The Smithsonian—as far as I can tell, an institution supported by our tax dollars—pointed out that the frozen dispenser placed tenth on a list of American inventions. Number One was the light bulb, and you have to presume the slider and the straw were in their someplace.

"No, it's not the Model T, but we have a lot of little things in the museum that are little innovations that became important,” said Smithsonian curator Dr. Rayna Green.

She doesn’t need to convince me. When the kitchen of my current house was renovated, I argued passionately for replacing the stove, a worthless dust collector, with a genuine margarita dispenser. But apparently that concession to reality fell beyond the “for worse” provision of the marital vow, as my wife (who refers to herself as my first wife) sharply pointed out at the time.

If only I'd had the data point that was released this morning: Americans drink 185,000 frozen margaritas in a typical evening hour. Think of how many more Facebook friends we'd have landed with an in-house margarita machine!

I don’t mean to trivialize the historic news of this day. But let’s give it up for the frozen drink machine. Without it, what would a dozen Tex-Mex chains serve with their nachos and chips?

McDonald's quietly adopts handhelds

2011-04-25T13:35:00.005-04:00

The proliferation of iPad-based menus and wine lists is generating buzz, but far more interesting is the quiet adoption of hand-held ordering devices by several quick-service giants.

McDonald’s revealed to investors last week that one advantage of its new POS system is adaptability to handhelds, “which we're beginning to implement more and more [in] the restaurants,” commented president Don Thompson. He also noted that the new POS system is compatible with dual drive-thrus.

mcDonald's is updating its sales technology in large part because the next generation requires less user input. Franchisees say an order can be input with fewer keystrokes and screens, speeding up service during crunch periods.

The operators have groused a little about the cost, which they have to absorb after investing in equipment to produce coffees, frappes and other high-ticket beverages.

Meanwhile, I can attest firsthand that Chipowithin using handhelds at some stores, including the one near Restaurant Business' headquartersb in the Wall Street area of New York. A staffer was using one recently to take orders from the queue of 35 or so people. You placed your order and payed. Then, when you got to the serving area, less info had to be provided, and the line did move faster.

The revelation about McDonald's use of handhelds came during a conference call on Friday with financial analysts. During the call executives also offered these news nuggets:

--The January offer of a 20-piece serving size of Chicken McNuggets led to a double-digit increase in sales of the product.

--McDonald's sales of hot coffee rose 17% year-over-year during the just-concluded winter.

--A frozen strawberry lemonade will be introduced in May, a part of the chain's efforts to match new drinks with the season. Thompson noted that a new smoothie flavor is also in the works.

Lawsuit still hurting Taco Bell, Yum says

2011-04-22T12:51:00.004-04:00

Taco Bell has drawn praise inside and outside the restaurant business for the way it handled a lawsuit loudly proclaiming its ingredients to be crap. The measure sought to block the chain from calling describing the content of its tacos and burritos as ground beef, arguing that there was more filler than meat in the mix.

Taco Bell’s aggressive response, waged in ads and a publicity campaign, prompted the plaintiff quietly to drop the suit earlier this week. But the chain’s franchisor acknowledged yesterday that considerable damage has been done.

“Our positive sales momentum was reversed when we were thrown a curveball with the false claim around our food quality,” David Novak, the CEO of parent company Yum! Brands, told financial analysts.

He asserted that “heavy users” of Taco Bell continued to frequent the chain as the lawsuit (and Taco Bell’s response) generated headlines in the major media. But “light users” stopped visiting and have yet to resume their earlier levels of patronage, Novak said.

“We do not expect the second quarter in the U.S. to get better,” added CFO Rick Carucci. “We have not yet been able to reverse the negative sales trend at Taco Bell.”

Analysts seemed skeptical of the assessment.

“I'm a little surprised that Taco Bell has weakened as it's gotten away from the lawsuit,” said Jason West of Deutsche Bank. “Do you think there's any other issues going on out there with the [quick-service restaurant] consumer and that are new any way in terms of gas prices or whatever it may be?”

Gas prices haven’t helped, acknowledged Carucci. But the publicity stirred up by the lawsuit was the determining factor, he contended. Taco Bell’s same-store sales were running about 4% above the year-ago tally before the story broke. Bad weather tempered that in some areas, but the decline wasn’t early as severe as what happened after the lawsuit became widely known.
If anything, he added, the damage was probably mitigated by the promotion of a shrimp-filled taco for Lent.

“We just need a little bit of time to get further away from the event,” said Carucci, as quoted in a transcripted posted by SeekingAlpha.com.

“We just don’t know how long it’s going to take us,” added Novak.

He assured the analysts on the call that the situation would not affect Taco Bell’s plans to add breakfast and remodel its stores.
“Better not,” he stressed.

The call just about coincided with Taco Bell’s announcement that it wanted a public apology from the Alabama law firm that had handled the lawsuit.

The Yum executives indirectly explained why. The attorneys had stirred up as much publicity as they could when the suit was filed and was still alive. But they very quietly withdrew it, leaving ample chatter still underway.

Taco Bell apparently wants the firm to publicly renounce its actions and to make some publicity about it withdrawal of suit.

There was no mention during the call of Long John Silver's or A&W, the restaurant brands Yum is trying to sell.

This just in from the courts

2011-04-19T15:43:00.001-04:00

Chipotle’s design draws fire…
Chipotle may have to reconsider its standard design after the U.S. Supreme Court let stand a lower court’s ruling that customers in wheelchairs can’t be denied the experience of seeing their meals prepared.

Customers who walk through the serving line interact with the prep staffers on the other side of a glass partition, specifying what they want in their burrito and watching as the elements are added. The experience was cited in court actions as an essential part of the Chipotle experience.

But a barrier by the serving line prevents wheelchair-bound patrons from being able to see their meals being assembled.
In 2005, a California resident in a wheelchair sued Chipotle, asserting that he was the victim of discrimination because of his disability.

Chipotle had countered that the plaintiff, Maurizio Antoninetti, had sued a number of businesses because of alleged inaccessibility. Antoninetti is described in an online bio as a teaching associate at San Diego State University and a former “accessibility consultant,” with a degree in architecture.

The chain had also argued that it accommodated patrons who couldn’t walk the line. Staffers would in effect bring the assembly process to them, holding spoonfuls of ingredients and assembling the burrito so they could watch.

The lower court had decided that the remedy wasn’t fair to Antoninetti. The Supreme Court refused to hear the appeal, letting that ruling stand.

Chipotle has yet to issue any public statement about how it intends to respond to the action.

…while McD’s argues parents are the bosses
Meanwhile, McDonald’s is arguing that a lawsuit challenging its use of toys as kids-meal giveaways should be dismissed because the plaintiff acknowledges she wasn’t conned by the offer.

Monet Parham, a California mother of two, has admitted she knew exactly what was offered in the Happy Meals her children desired, and often refused their pleas to buy the bundled meals. McDonald’s asserted in court that the advertising was straightforward, and that a purchase wasn’t based on any misleading information from the chain.

Parham is represented in the suit by the Center for Science in the Public Interest.

An attorney for the plaintiff countered that McDonald’s was making Parham the victim because she couldn’t always counter the brainwashing that McDonald’s does with its advertising.

McDonald’s was still awaiting a reaction from the federal court as of this writing.

Service as a concept differentiator

2011-04-19T14:51:00.006-04:00

Once upon a time, restaurant innovators focused on the menu as their means of differentiation. But look at today’s innovators and there’s no denying that modes of service are the way of standing out.

Consider, for instance, ZED451, one of the more upscale (and interesting) concepts in the portfolio of Tavistock Group, also the parent of Freebird World Burritos and the ethnic concepts formerly run by eBrands.

The company describes ZED as “a contemporary, internationally inspired steakhouse,” but it’s really a high-end, ultra-high-quality riff on the old Sizzler steak-and-buffet format. Guests help themselves to an extensive spread of fresh, seasonal sides, often with ethnic roots. Included in the spread are salads, vegetables, soups, breads and cheeses.

As you munch what you took, chefs roam the tables with platters of steak, seafood, poultry and game. They carve the proteins for you and explain how it was made, since they were the ones who prepared it.

Servers are still part of the mix. They take and serve drink orders, and presumably clear away empty dishes.

But clearly the concept takes the notion of a display kitchen one step further, bringing the kitchen out to the table to discuss what he or she made for you.

Vapiano, a German chain featuring Italian food, has a similar objective. Like Rich Melman’s FoodLife in Chicago, guests go from station to station for the elements of the meal, charging what they get to a card holding a smart chip. For instance, they can stop at a pasta station and have something made expressly for them. The food is prepared by a “cook-tainer” who converses with them as he or she whips up the serving. The guest brings the food to his or her table.

The U.S. arm of the company describes it as “somewhere between the nicest of fast casual and hippest of casual.”

Of course there’s no shortage of more-conventional entrants in the fast-casual sector, sometimes in decidedly unexpected pairings. Ruby Tuesday is moving away from full service with its development deal with Lime Fresh, a Mexican concept that some might label Chipotle 2.0.

But perhaps the winner in service uniqueness has to be the handful of avant garde places that Technomic has dubbed non-food restaurants. We at MonkeyDish.com prefer to think of them as B.Y.O.F. places, as in have getting the food from elsewhere.

As Technomic’s Darren Tristano explained at our Restaurant Leadership Conference, these new places are basically bars without a kitchen. They encourage you to have food delivered, maybe from a preferred nearby restaurant, or to bring it in from the restaurant trucks or carts outside. Then they sell you the accompanying drinks.

They don’t have to invest in a kitchen or devote space to ovens and the like. Nor do they need the usual venting and exhaust fixtures that render many urban spots unfeasible for a restaurant.

Restaurants without the food. Who’d have thought it? It’s the non-menu menu.

Size does matter in social media

2011-04-17T16:36:00.003-04:00

Okay, we heard you.

We know now that you really liked our ranking of restaurant operators by their social media activity. But several of you had a problem with one aspect of our methodology for the report, which appeared in print and in an expanded version online.

As you’ve pointed out, sometimes forcefully, how can a six- (or 600-) unit chain compete with the likes of Starbucks or McDonald’s? So is it fair to rate them with the same criteria?

Why not adjust the scores so size is negated—maybe basing the ratings on some sort of per-unit scale instead of by brand name?

What was suggested, in essence, was the equivalent of ranking chains’ marketing budgets by the percentage of their sales, not their absolute dollars.

I promise you that we’ll try to find a way to do that next time. But in the meantime, here’s some solace.
We heard from about 25 operators who used our social media index calculator to see where they’d be on our charts. We added 18, with two yet to be posted. The others were either outside our geographic area—i.e., operating entirely within another country—or not using our criteria to compute their score.

A few social media consultants, apparently upset that neither they nor their clients figured into our report, lectured us about how the research should’ve been done.

The additions are starred on our updated ranking of operators, which now number close to 140. If you take a look at those addenda, you’ll undoubtedly see some unfamiliar names.

Who would’ve thought that Gringo’s, a regional Mexican chain, would finish ahead of brands like Church’s or Tony Roma’s?
It’s a few positions ahead of Iguana, another regional Tex-Mex specialist.

Along with the strong finishes of competitors like Chipotle (#14) , Moe’s (#53) and Qdoba (#58), they prove that New Mex chains are second only to the frozen-yogurt sector in their avid use of social media as a way of connecting with customers. Both those segments are young, growing, and still relatively small, countering the impression that giant brands are the mega-forces in that new realm.

We’ll continue to tweak and evolve our ratings to make our gauges as meaningful as possible.
You may also find yourself being solicited for media-related stories you’d like to see on our website, MonkeyDish.com.

But in the meantime, I encourage you to look beyond the rankings at some of the intelligence that’s embodied in the chart. Recently, for instance, we were part of a Twitter discussion that grew out of the live coverage of the Restaurant Leadership Conference, our top-to-top meeting for chain executives.

One of the speakers suggested that only two social-media postings per month are needed to maintain a conversation with Twitter followers or Facebook fans. It was such a shockingly low number that he was questioned about it during the presentation. Yep, he said. Make one posting a strategic statement, an indication of the brand’s character, and use the other for tactical purposes.

I still disagree with him. But look at the column in our chart that recorded the number of tweets a brand had posted in a 24-hour stretch. You’ll be surprised not only by the low numbers for some big players, but also how much of a disconnection there was with the operator’s overall social media score.

Finally, one correction of sorts: I was informed by a reader that Rick Bayless, one of the industry’s more avid users of Twitter, does have a public Facebook page. We noted that his main Facebook presence, listed under the name Rick Bayless, was open only to friends. A page listed under Chef Rick Bayless had some 16,000 fans.

We think Bayless is making a mistake with that approach. With each of the operators we ranked, I went to considerable lengths to ensure we were scoring the rate-ee’s official page. If that public Bayless page didn’t come up during my hunt, and I was putting in more effort than a casual Facebook user, isn’t he losing an opportunity to connect?

And of course he wasn’t alone in making a Facebook page or Twitter ID difficult to find. If your IDs aren’t prominently featured on your homepage, with links, you’re missing an opportunity.

If you have any other thoughts on our social media report, please drop me a line at promeo@cspnet.com. And if you haven’t yet tried our calculator for gauging your social media index, please do so and let us know the results.

An update on Ruby's concept-athon

2011-04-07T17:52:00.002-04:00

By now you’ve probably heard that Ruby Tuesday’s has opened the prototype of its new Marlin & Ray’s concept, or what management has previously described as a seafood version of its namesake brand.

Management hasn’t been forthcoming with details about the first M&R, noting only that it was converted from an old Ruby in Tennessee. But it’s pleased enough to project as many as 14 more conversions during the next fiscal year.

Executive vice president Kimberly Grant told investors that the initial restaurant opened to “higher-than-expected sales.”
CEO Sandy Beall divulged that the store is “very casual, with low rent.”

He added that the company is more excited about the seafood concept’s prospects than it is about the outlook for its other new growth vehicles, which include Truffles, Jim ‘N Nicks, and Wok Hay, all of which are full-service. It’s also developing franchises of a Chipotle-like fast-casual brand, Fresh Lime.

Beall said Ruby’s first Truffles restaurant is “performing fine. Not better than we thought, but it’s fine.”

A Jim ‘N Nick’s unit was converted from a Ruby that generated annual sales of $1.1 million. With the new I.D., the location is running at a $2.2-million annual sales rate, “and we haven’t even started catering yet,” said Beall.

He wasn’t exactly brimming with enthusiasm about Wok Hay, a fast-casual concept that Ruby bought a few years ago and gussied up into a full-fledged casual brand specializing in Asian fare.

Two will open by July, so by fall “we'll know about those and we'll either have something to grow or we'll close us down or convert it with something else too.”

Easy way to get loans for franchisees?

2011-04-07T17:13:00.005-04:00

The International Franchise Association didn’t over-promise in pitching its Small Business Lending Summit as an opportunity to hammer out solutions to restaurant franchisees’ capital crunch. A packed room of attendees heard repeatedly today that lenders would extend loans more readily if applicants’ franchisors provided detailed data about the brand’s overall performance.

Bank representatives said the rusted machinery would be greased significantly if brand headquarters shared such nitty-gritty info as long-term sales plans, what failed stores are fetching when they’re sold, and what HR support is available to franchisees.

Several noted that medical-related small businesses are having an easier time than restaurants and other franchised businesses in securing growth capital. “The reason is there’s a tremendous amount of data available in that sector,” said Joe DiNicola of Bank of America.

“Today’s underwriting is different than yesterday’s underwriting. When the story can be supported with the franchisor’s data, that story becomes stronger,” he asserted.

The discussion prompted one member of the audience to grab a microphone and suggest that franchisors put systems into place and standardize the information they pass along to potential sources of licensee loans.

The give-and-take grew out of what panel moderator and celebrity business journalist Geoff Colvin called a “giant disconnect between lender and borrower.”

He noted that the conference was convened because franchisees are starved for financing. Yet lenders on the program attested that they not only are willing to lend more money to franchisees, but are aggressively prowling for those sorts of deals.

Ironically, they asserted that a major part of the problem is insufficient demand.

“We’re seeing a lot of hesitancy,” said Mary Navarro, a senior EVP for the Midwest’s Huntington Bank. “A low sales volume might be part of that hesitancy, and [franchisees] have learned to do more with less.”

The discrepancy between franchisees’ complaints and lenders assertions had Colvin scratching his head. He asked Navarro, “What explains the perception that franchisees can’t get credit?”

After some give-and-take, lenders acknowledged that they’re using different criteria post-Great Recession to decide who gets money. They’re looking for a convincing track record and far more detailed information about the ventures they back.

“Document, document, document,” advised Tony Wilkinson, CEO of the National Association of Government Guaranteed Lenders.

Banks are also looking for an on-going relationship, not a one-off transaction. Her company is loath to make one-shot loans because it wants to lend money on an ongoing basis with businesses in the neighborhood.

A representative of Regions Financial Corp. suggested that franchisors choose a dozen banks nationally, educate those institutions about their concept, and then work exclusively with then.

Pens were scribbling furiously as she spoke. I bet the notation was starred and underlined a few times.

Social studies, c. April

2011-04-04T15:10:00.003-04:00

If you’re one of the holdouts who suspects there’s more hype than substance to social media, consider a story behind the story of the Social Media 50, our ranking of the restaurant industry’s most avid and successful users.

I collected the data with a few days of help from an intern beginning in mid-January. As we tabulated the Twitter and Facebook posts of some 120 operators—chains, independents and celebrity chefs—we noted the aberrations, thinking they’d make a good sidebar.

There were plenty of them, including a number of big brands that have yet to embrace one or both of the two major social media channels.

Similarly, there was a rough correlation between an operation’s size and the amount of buzz it generated online, but not a perfect one. Who’d have thought Buffalo Wild Wings would promote more keypad activity than some of the fast-food giants?

But perhaps the biggest surprises were the numbers for In-N-Out, the burger chain whose die-hard fans define a restaurant cult, replete with its own secret ordering language. It seemed cut out for social media, yet its voice wasn’t nearly as loud as even a casual observer might’ve expected. Twenty-thousand Facebook fans? Pffft. We even called attention to the situation in our roundup of curious findings, or what we termed Jaw Droppers.

Fast forward to a few days before the release of the report via our April issue and exclusive content on MonkeyDish.com. One of my colleagues sent me an e-mail with the subject line, “Rut-roh.”

She explained that some work on another project took her to In-N-Out’s Facebook page, which indicated the regional chain had more than 1 million fans. Clearly we’d made a mistake.

Still, I was puzzled. We’d checked the numbers several times. Was it possibly a mistake? Had we visited one of the unofficial pages that fans set up for a brand they adore or abhor (OliveGardenHate had more than 300 fans)? Was it just a typo, a number misread off a list and mis-entered there?

It might indeed have been a mistake of one sort or another. But in researching mini-profiles of the social media strategies wielded by the Top 50 finishers, I started noticing other discrepancies.

Numbers had soared in the few weeks since we conducted our first canvass of Twitter and Facebook. Jumps of 2,000 Twitter followers weren’t unusual. Neither were leaps of 10,000 or more “likes” on Facebook pages.

In the case of Buffalo Wild Wings, the increase was in the 600,000-fan range.

Might In-N-Out have really seen its numbers jump by nearly 2 million in a month? Consider that Charlie Sheen collected 2 million Twitter followers in a night.

I’ve yet to get a clarification one way or another from In-N-Out, a chain notoriously uncommunicative with the press.

But I’m thinking that we just saw a market rectification of sorts. The power of social media is gravitating to the more powerful of brands in some sort of online natural evolution.

Skeptics will have to change their argument. The preferred form of social media might change. But the phenomenon is growing, not waning.

How McD's pushes McNuggets in China

2011-04-03T09:20:00.002-04:00

Dirt and dish from the RLC

2011-03-30T12:29:00.002-04:00

Here’s some of the gossip from the RLC. It’s bad journalism (no attribution or verification of most points), but some interesting reading:

ITEM: The U.S. Department of Commerce is bringing representatives from 13 American restaurant chains to India to interest local operators there in developing the concepts.

ITEM: If Mayor-elect Rahm Emanuel makes good on his promise to legalize truck restaurants in Chicago, look for one of the city’s most respected operators to hit the streets with a bao or dumpling concept.

ITEM: Mark Levy of Levy Restaurants fame is expected to make a splash in Chicago’s already-crowded steakhouse market with his entry, Chicago. It’s going into the downtown space formerly occupied by Wolfgang Puck’s Spago. Michael Jordon’s namesake beef house is also returning to the Windy City. Game on.

ITEM: Among the upstarts snagging attention from concept scouts was Los Angeles’ Veggie Grill. Ditto for Texas’ Twin Peaks and Phoenix’s Wildflower Bread Co.

ITEM: Chain restaurateurs were griping incessantly a few months ago about not being able to calculate an ROI on social media. Now benchmarking research is pouring into the marketplace (including from Restaurant Business; see our Social Media 50 report on MonkeyDish.com starting tomorrow). I hope to do a roundup on the other sources in this space sometime next week.