Not since Godzilla squared off with Mothra have we seen a fight card quite like the one that was set by Wednesday’s investment news.
On one side we have the quirkiest company in the restaurant business, with a level of achievement that begs steroid testing. Cheesecake Factory, despite its size and success, still reflects the idiosyncratic thinking of chief executive David Overton, who built the business with an iron discipline seldom seen outside of Olympic training camps. Two years ago, while receiving an award from Nation’s Restaurant News, Overton attributed his leadership—and, by inference, the chain’s success—to a gifted palate. He explained that a few bites can tell him if an item will be a success or not. That highly personalized approach to menu planning, he suggested, is as much an underpinning of the chain as its painstakingly controlled expansion, a design that’s finer than what you’ll often find in fine dining, and a voluminous bill of fare that seems scientifically impossible to execute. It’s an oddball, to be sure, but one that should have its own wing at Fort Knox. Few restaurant companies are more esteemed for the caliber of their operation.
And now the company finds itself in a gladiator pit with a Wall Street bully tapping a truncheon on his palm, like a street tough looking for a rumble. We and every publication use the euphemism “activist investor” to describe Nelson Peltz, but that doesn’t begin to characterize his mode of making money. His mechanism is really the not-so-veiled threat—do what I demand or I’ll use my investment capability to do something drastic. It’s as close as investing can come to a street gang’s offer to leave local shops unharmed if they pay an acceptable fee for the “protection.”
If Peltz wields that modus operandi against Cheesecake—a big “if,” despite indications he’s buying as much as 14 percent of the casual-dining company—it’ll a cage match between him and Overton. And my money will be on Overton.
A Rocky he’s not. We’re talking about a guy who got involved with Cheesecake to help out his parents, who had run the business from their basement. He’s renowned for giving general managers a BMW lease as a perk, and for reflecting his Far Eastern religious beliefs in the design of the stores (look for a sky scene or star motif on the ceilings). We’re talking about Jimmy Stewart standing up to an angry Harvey Keitel.
Yet Overton seems to have the conviction that a business should be cared for and nurtured like a living entity. In contrast, Peltz comes off as a horseback rider who doesn’t care if his stead dies after he arrives at his destination. The whole point was to get him there, horse be damned. That disparity could make Overton fight like a wildcat to protect the business his parents founded. At the very least, he’ll likely call Peltz’s bluff.
So what can Peltz do? The obvious possibilities:
--Solicit allies from among Cheesecake’s other shareholders to form a sympathetic faction controlling more than 50 percent of the company’s stock.
--Mount a hostile takeover attempt on his own.
--Sue Overton or Cheesecake for reneging on their fiduciary responsibility.
--Threaten to dump his shares and thereby depress the stock’s price.
In either case, he’ll likely find Overton to be a reluctant yet effective schoolyard hero, willing to stand up to a bully. That resistance alone might convince Peltz to shift his attention to less feisty prey.
Unfortunately for Cheesecake, Overton owned only 5 percent of the company’s outstanding shares as of an April proxy filing, and he’s trimmed his holdings since then. But, after watching Cheesecake evolve from a single Beverly Hills restaurant some 30 years ago, I can’t believe he’ll cede to Peltz without a battle royale. He may be the reluctant hero who stands up to this new breed of corporate greenmailer.
Of course, this is assuming that Peltz is looking to follow his usual script. With Cheesecake’s shares trading at a yearly low on the morning Peltz’s interest in the company came to light, the terror of Wall Street may just be bargain-hunting along with everyone else this holiday season.
Thursday, December 27, 2007
Not since Godzilla squared off with Mothra have we seen a fight card quite like the one that was set by Wednesday’s investment news.
Tuesday, December 18, 2007
You know it as a surefire way of raising money for charity. Experts call it “imbedded giving”—channeling a portion of sales from a particular menu item to a popular cause, and thereby encouraging patrons to buy more of it. Now politicians are redefining it as a practice rife with the potential for abuse and therefore in immediate need of regulation. If they have their way, you’d have to follow certain rules if you want to donate a dollar from the sale of your signature gingerbread-man cookies to some toys-for-underprivileged-kids program.
Sen. Robert Menendez, a Democrat representing New Jersey, has already disclosed plans to introduce legislation this week that would govern the practice. Menendez wants to require any retailer that uses imbedded giving to get prior approval from beneficiary group before its name can be used, and to disclose how much money is actually channeled to the charity.
“Too often consumers have no way to know if their dollars are actually going to the intended causes, and some charities are not aware that their names are being used by retailers,” Menendez said in a statement. “We need to ensure that charity is not being used solely as a sales pitch.”
Menendez aired his plan after The New York Times reported that some of the charities it contacted for an article on imbedded giving were unaware they were the beneficiaries of the promotions. Yet their names were prominently used in the sales pitch. Some expressed outright horror that their cause was being associated with businesses with which they would rather not have any connection.
No restaurants were mentioned in the article or in Menendez’s announcement on Friday. But the industry has frequently used the technique, most notably for Dine Out America, a fundraising effort undertaken in the wake of Hurricane Katrina. Restaurants nationwide were encouraged to channel proceeds from a particular night to victims of the catastrophe, and were lauded for their effort.
You have to wonder if such a thing could be undertaken again if it also involved the rigmarole of proving the money was actually donated.
Sunday, December 16, 2007
Does an organic menu qualify a restaurant as green? How about a pledge to feature only sustainable seafood? Or meat exclusively from humanely farmed animals? And what about all the places that now recycle their fryer oil into bio-diesel? Skeptics say a vehicle running on that fuel still emits more pollutants than a hybrid gas-burner might, so the environmental benefit may be more limited than the public realizes.
You can’t blame the average citizen for being confused. What, exactly, does “earth-friendly” mean, and how does that differ from “eco-safe,” or even green? And how about descriptors like “recyclable?” Does that mean the item in question is actually being kept out of the landfills for re-use, or merely that it could be?
And don’t forget technical terms like RoHS—“restriction of hazardous substances,” for those of you who don’t have a degree in electrical engineering. It’s the standard that was adopted by the European Union to designate electrical equipment produced without the use of certain environmental toxins. It’s already creeping into use within the United States as a desirable designation for restaurants and other businesses that want to be green, and California has already prohibited the sale of electronics that fail to meet RoHS criteria. Other states are considering a similar ban.
Those are some of the issues we’re facing as we strive to expand our coverage of the green movement, a mega-trend to be sure, but one that has more charlatans and pretenders than a gathering of hair-restorer pitchmen. Indeed, there’s a term for it—“greenwashing,” or purposely giving something a green connotation regardless of the true environmental impact. If we’re having trouble sorting out fact from assertion, and this is a focus of ours, how can anyone expect a restaurateur to find the time for some deciphering work?
Yet, fortunately for all of us, there are some operators who are determined to do the right thing, including the necessary debunking. Truth be told, some of us scoff that they’re only doing it to appease customers or employees who want a greener operation. They’re doing it for marketing considerations, not to save the spotted owls, according to that line of criticism.
But so what? If those restaurateurs are investing the time and effort to do the right thing, , their efforts should nonetheless be celebrated regardless of their motivation.
And that’s exactly what we plan to do. Stayed tuned for new online features that spotlight what restaurateurs are doing to operate in a more ecologically responsible manner, and what kind of return they’re seeing on a true investment. We’ll try to stay clear of the semantics and focus on the effects, business-wise and environmentally.
Wednesday, December 12, 2007
Nelson popped over with a bottle of Captain Morgan last night to catch “Dancing with the Stars” and left without his backpack. I know you shouldn’t peek at a person’s diary, but it was right there under his copy of “Eat, Pray, Love.” I couldn’t resist.
Played Monopoly with relatives at the holiday party; was shocked to learn the money wasn’t real. Just as well, I guess; they thwarted my attempts to take over undervalued assets—the hotels on Baltic and Oriental—and refused to discuss how the railroads could be managed more profitability. After a few well-placed investments, they’ll rue that stubbornness.
Watched the umpteenth airing of “It’s a Wonderful Life,” one of the greatest tragedies of all time. A good man, that Potter. To watch him be destroyed by wussy George Bailey still brings tears to my eyes.
Went to see “The Grinch Who Stole Christmas” but was asked to leave. The Grinch said he couldn’t stand the competition. The screams of fright from the children were intolerable in any case, so I headed over to Fifth for some shopping. But Saks said it wasn’t for sale.
Sent “21” into conniptions by giving Billy Ackman a surprise atomic wedgie. The lad thinks he knows a thing or two about forcing companies to heed his wishes. But he’s merely the Popeye to my Blutto.
Fielded a call from George Clooney, who’s already casting “Ocean’s 27.” He’d like me to reprise my roll from “Ocean’s 10,” Nameless Man at Posh Party. But I’m not sure we’re simpatico on the character’s direction. What I’d really like to do is direct. Or take over DreamWorks.
Visited Washington and stumbled on a lovely house that has to be mine. All white, with a decent yard by Washington standards, though that big monument across the street will have to come down. Even comes with a heliport and guard stations. Maybe I’ll just buy the city.
My pursuit of the Cadbury candy company continues. Nevermore will Caramello have to take a second seat to Royal Dark.
Note to self: Check status of Wendy’s takeover attempt. Spending far too much on Doubles to remain just an investor.
Oh, well. Off to raid the retail sector!
Friday, December 07, 2007
None of the 13 people who were shot Wednesday at the mall in Omaha were in a restaurant or the food court at the time, yet virtually every news report draws a connection between the tragedy and the restaurant industry.
Invariably, the stories note that the 19-year-old shooter had been dumped by his girlfriend a few weeks ago, and that he’d been fired from his job at McDonald’s just a short while back for allegedly stealing. Without expressly saying it, the presentation leaves the impression that the dismissal may have pushed Robert Hawkins over the edge.
The stories unintentionally underscore two large truths about the restaurant business. First of all, it’s not surprising that the tragedy would involve someone who worked at a McDonald’s. Some of the victims might have also worked for the chain or another fast-feeder at one point or another. Ditto for the police and rescue workers who were summoned. Heck, if someone had a flat in the parking lot, they might’ve been an hourly restaurant employee at some stage in their lives. Given how many people float in or out of the industry for employment, it’s like saying “the victim went to high school,” or “the perpetrator drove a car.” Indeed, the point was included because it highlights how ordinary Hawkins seemed on the surface to casual observers.
But the fact was also stressed because it added more eeriness to the story. This wasn’t a kid who ran with gangs or spent his time torturing animals, or at least not to our knowledge. He certainly had his emotional problems, which are only now working their way into follow-up articles. But noting that Hawkins worked at a McDonald’s said a lot about him, and what it said didn’t seem to match the image of a boy who’d go into a mall at Christmas time and kill eight people before taking his own life. Working at a McDonald’s implies a certain innocence, a certain decency within a young person. And that made the turn of events all the more bizarre. It would have been like noting that Hawkins was an Eagle scout, or that he visited the local old folks’ home every Sundays.
Society may tar restaurant jobs as a dead end, or something that you do as a last resort. But how can anyone dispute that working in restaurants is an experience that’s good for a teen? The news reports on the situation in Omaha seem to be saying the same thing, just in a decidedly left-handed way.
Tuesday, December 04, 2007
Back when Nation’s Restaurant News was still covering Howard Johnson’s comeback attempts, our pages would be filled with stories about a crop of hip quick-service upstarts, akin to today’s fast-casual ventures. The young hopefuls included such brands as D’lites, a health concept, and G.D. Ritzy’s, an ice cream and hamburger specialist. The pizza segment seemed particularly fertile ground, with such promising up-and-comers as Godfather’s Pizza. And, of course, Rocky Rococo.
Named after a character in a Firesign Theater bit [explanatory note for readers under age 45: Firesign was a demented but highly intelligent comedy troupe in the 1960s and ‘70s, like a whacked out MadTV staff], Rocky had attitude, flavor, even an edge. In a day of white-bread restaurant concepts, it delivered a hint of cayenne. It was also a pioneer of such now-pronounced trends as co-branding, or what was then known as tandem restaurants. If memory serves me correctly, it even joined one of its units with a Wendy’s.
Like plenty of promising concepts before and after it, Rocky Rococo grew like Indiana corn. From a single store in Madison, Wis., it sprouted to 130 units before problems overshot it, and units started closing in the late 1980s. It would shrink to a skeleton of 30 stores.
But now comes word from its native Wisconsin that Rocky is ready to grow again. The chain, currently at 40 stores, added two in the recent past, and will fire up the ovens of a few more in 2009, according to a story in the Milwaukee Business Journal. The growth is coming from both franchising and corporate development.
The company is now headed by Trey Hester, the son of an early executive. According to the Business Journal story, founders Roger Brown and Wayne Mosley are still involved, though now as franchisees.
The story quotes Hester as saying he hopes to rebuild the chain back to 130 stores, moving slowly this time.
And look at that—with only an announcement of more stores to come, it’s already snagging coverage again.
Friday, November 30, 2007
If you’re hoping to snag employees with money and perks, we need to talk, bunky. Pay just doesn’t pull young people the way it might’ve in the pre-Halo III days, probably because youngsters assign far more value today to sugar cubes like free time or the opportunity to learn something. Or as People Report CEO Joni Doolin expressed it during her company’s recent conference in Dallas, “maybe it’s time to think about the employee value proposition in a different way,” or what’ll make your restaurant beam like an iPod in a Sony Walkman world.
Maybe that’s a bad metaphor, given potential hires’ indifference to material draws in general, including any slim differences they may spy between one pay package and another. Not that they’re likely to spot much variance. “Welcome to Commodity Hell: We’re at the point where our compensation and our benefits programs are the same,” Doolin told the room of restaurant CEOs and HR execs.
“We’re not differentiating ourselves, so we have to think about different concepts,” she continued. Indeed, said Doolin, the whole “command and control model,” where directives are ramrodded down from the CEO or other corporate C’s, is “a half-truth,” a bewildering mode of operation to youngsters who have studied, played or even dated primarily in teams or groups.
If the foodservice industry truly wants to sweeten its appeal for new job-market entrants, it has to leave nothing beyond reconsideration, including the hierarchical management structure used by almost every company in the field, she explained.
She depicted a model of what tomorrow’s org chart might look like; it resembled a blueprint for one of Buckminster Fuller’s geodesic domes, with employees serving as nodes as from which radiated lines of communication to nearly everyone else in the organization. This was not the usual model of one layer stacked atop another, and a rigid pipeline of communication from the top down.
What else might appeal to a workforce whose values are drifting far a-field from Baby Boomer sensibilities? During the prior year’s People Report conference, Doolin noted, the research concern had underscored the wooing power of continual learning opportunities and a culture that fostered a sense of community, societal values and inclusion. Those qualities not only appeal to potential hires, but also help to distinguish one employer from another.
But as every company embraces those enticements—no doubt a factor behind the greening movement evident at so many chains—what’ll be the next magnetic point of differentiation?
“We think lifestyle benefits are really the way to go,” said Doolin. By adjusting rules and cultural underpinnings to accommodate the lives that candidates want to lead, an organization can truly set itself apart, she stressed.
”This is where you go beyond the mission statement,” to experience, Doolin said. “It’s the sum experience of working for you.”
Speakers appearing later in the program suggested what some of those draws might be. And try to keep an open mind here, because they’ll sound like blasphemy to anyone who grew up with the rigid rules of foodservice circa the 1980s.
For instance, one speaker noted the importance of accommodating—if not fostering—employees’ efforts to maintain their health. One of the presenters noted how his company, albeit a healthcare firm, allows doctors to take a break at two or three to hit the gym.
If that might’ve sounded far-fetched to the restaurateurs in the audience, their skepticism might’ve been allayed by the comments of James Broadhurst, CEO of Eat’n Park Hospitality Group, operator of the Pittsburgh-area family dining chain. In accepting an award, Broadhurst noted in passing that he was wearing a pedometer to record his steps for a headquarters-wide health initiative. Pedometers had been issued to all of the home-office staffers, with a recommendation that they walk 10,000 steps a day. Another Eat’n Park staffer later told me that the office is divided into four teams, with a heated competition among them to see which was covering the most ground. The results are listed on an intranet site, and the leaders are rewarded with treats like a gift card.
Some of the other suggestions were more outlandish. Penelope Trunk, a Gen Y-er who acknowledged she probably wasn’t on the same wavelength with the audience, suggested during her presentation that inter-company dating be readily accepted, a reflection of how work life and social life are converging today.
Trunk also indicated that the promise of a promotion is no longer a motivator because young people don’t think in terms of climbing a ladder. They think of what they’d like to do next, and not in terms of a career path. If they’re likely to be gone in two years, who cares if they can move up a rung within that organization?
Instead, she stressed, ongoing education “is the coin of the realm.”
Other presenters stressed the importance of flexibility and of giving constant praise to youngsters who probably graduated from kindergarten with the same pomp and celebration that were reserved for an older generation’s graduation from high school. This, several speakers observed, is a group of people who probably were each presented with a trophy of one sort or another at the end of their Little League or soccer seasons.
In any case, noted People Report president Teresa Siriani, this is not an age group that feels it has to work. “We are at an historic low in the employment of 16 to 19-year-olds,” she said. “It’s not that there are not 16 to 19-year-olds out there.” Rather, “they’re opting out,” a result of their busy daily schedules.
“Guess what?,” concluded Doolin. “People don’t work where they have to, they work where they want to.”
Wednesday, November 21, 2007
Chain executives will be hyperventilating into brown paper bags next week when the push for menu labeling is taken up again by New York City’s health department—or as some restaurateurs view it, the castle of the mad Dr. Friedan. The agency will invite the public to comment Tuesday on its latest calorie-disclosure proposal, which is widely seen as a possible model for jurisdictions throughout the country. But it’s probably better they copy that measure than reach across the Atlantic for the approach now being pursued in the U.K.
The Food Standards Agency—Britain’s Food and Drug Administration—is pressing McDonald’s, Compass and other multi-restaurant companies to go beyond merely disclosing nutritional information on their menus, according to London press reports. The regulators want the big operations to steer patrons toward more healthful choices, and away from options with high sugar, salt or fat contents, by using stoplight symbol. A green circle, like a “go” light, would designate the best choices. A red circle would send a not-so-subtle message of, “Stop!” And a yellow indicator would be the equivalent of a Larry David-like, “Eh.”
Lest you think the restaurant industry is crying wolf, consider that the alert system is already being voluntarily followed by a number of major supermarket chains across the pond. The foodservice chains are being asked to adopt the program voluntarily, but the esteemed London Telegraph said the present “talks” could build into out-and-out pressure on the operators.
The news reports say that regulators are focusing their sales efforts on quick-service chains because children account for a big portion of their clientele. It’s the argument that the industry has struggled in vain to parry: Adults may be able to make an informed choice about what to eat, but how can you expect children to comprehend nutrition stats as they’re standing in line? Why not just give them a simple symbolic rating of each item?
It’s a powerful argument, and one the industry would no doubt like to bar from these shores.
Friday, November 16, 2007
I was having an out-of-body experience the other night when I bumped into Confucious, who was surfing the ether to dream up sayings that might impress women. “Hey, Cunfucious,” I shouted, “people have been gushing for centuries about how wise you are. Any sage advice for casual-dining execs trying to get through this rough time without a pink slip?”
“Buzz off, Scooter. I’m a philosopher, not a miracle worker.” He tugged on the Fu a few times. “Aw, alright. Tell ‘em, ‘That brand which commoditizes must make the Target dog its own.’” He smugly smiled.
“What the hell does that mean?”
“You meatball, don’t you get it?” he retorted. “They who squeeze all the character from their concepts are marketing wrung-out washcloths.”
Still a blank stare.
“Look, dummy, these chains all scrambled to sand off the rough edges that made their concepts different because a simple oval makes a better cookie cutter than a silhouette of Carmen Electra. It’s easier to duplicate blandness 1,200 times.”
Still no light-bulb bubble above my head.
“Yikes, don’t you see? They’ve turned the industry’s strongest segment into a commodities game. You could step into any of the grill concepts and have no idea which one you were in. And they who commoditize buy cut-glass thongs from Victoria Secret.”
Embarrassment, but no flicker of comprehension on my part.
He heaved a heavy sigh. “Look, if you’re a commodity, the only way you can compete is on price. That’s great if you’re the size of Wal-Mart and the whole market is expanding, so you can make it up on volume. But restaurant spending is softening overall, and margins are already thinner than Kevin Federline’s talent.
“The only other option,” he continued, “is differentiating yourself as a brand with pronounced character and flavor—a distinct experience, where you stake out a specific piece of the market instead of trying to be all things to all consumers. That’s exactly what Target did.
“It’s going to turn off the customers whose idea of spice is mayonnaise on plain macaroni. But it’s going to be embraced as a standout by the folks who wouldn’t mind something different from the status quo. And there are a lot of those people.
“Otherwise,” he said, “You’re the Kmart of a few years ago.” He saw my puzzled look. “It went bankrupt, Einstein. While Target was kicking butt.”
And with that, he gave the Fu Manchu another tug and was gone. All I could think to do was yell after him, “Don’t take any wooden nickels.”
Two days, two telling indications that marketing may be the preferred path to the corner office during these trying times for casual dining. Add the appointment of another one-time marketer to the presidency of Mimi’s Cafe and you have a Johnny Cochrane-gauge argument that old hands at snagging sales are the chain chiefs of choice during a downturn in customer counts.
Yet, as a speaker stressed Wednesday during the People Report’s annual summit in Dallas, the era of the specialist leader is waning elsewhere in the business world. As consultant Rand Stagen put it, you can’t dominate the game today if all you have is a killer forehand swing. Today, at least in fields outside foodservice, the person with first dibs on the corporate jet is the one who’s closest to a renaissance chief, with talent across a number of disciplines. And that includes such superhero skills as brainstorming whole new business lines, or spotting a door to opportunity where others see a wall. The example he cited was Steve Jobs, a one-time animation-company exec who took over an ailing computer firm and forever changed the music industry, with the television business now eying him as the guy in a hockey mask at an abandoned summer camp.
So is this just another crazy uncle in the attic for foodservice? One of those peculiarities, like embracing the internet more slowly than several tribes that still wear huge plates in their lower lips?
Hardly. Or maybe not exactly. The situation does underscore a kink of the business. But the quirk in this instance is not a time lag. Restaurant-chain boards may be giving an edge to marketers in filling the corner office, but a foodservice marketer isn’t your typical slogan-hatching ad or promotions vet. Marketing has seeped well beyond the cubicles with all the whacky stuff on the walls to infiltrate such departments as design, operations, sometimes recruitment, and certainly whatever brain trust drafts overall corporate strategy. It’s like the bass line that drives a hit song.
Clay Dover got the nod to head up Metromedia Restaurant Group, the parent of Bennigan’s, after spending much of his time at that concern in marketing. But his knowledge clearly extended beyond the traditional boundaries of the discipline. Awhile back, I wrote a column that lamented casual dining’s transformation from the Rolling Stones into Debbie Boone. Its rock-and-roll spirit had been neutered into dentist-office music, a process business gurus would tag as homogenization. Dover dropped me a quick e-mail expressing his agreement, then spelled out Bennigan’s intended direction in a few dozen words. It was the view of a person thinking far beyond marketing, all the way to gene splicing. We’re not talking about a zippy ad slogan and market-speak about demographics. His comments hinted at a chief’s pride and vision.
Similarly, Bruce MacDiarmid rose to prominence as a marketer for Chevys, which hit gold by trademarking the descriptor “Fresh Mex” as part of its name. Clearly it was a brand where marketing influenced the whole system, a point verified during the People Report conference by Mike Hislop, Chevys’ former CEO. Now the CEO of Il Fornaio, Hislop revealed that he only took the top job at Chevys after securing a guarantee that marketing would be interwoven into his corner-office strategy, which had been forged by his first-hand experiences in operations. With the marketing department elevated to that role, is there any doubt that MacDiarmid was involved in a lot more than crafting ad strategies?
On Tuesday, he was named president and COO of the 82-unit Black Angus steakhouse chain.
I don’t know Tim Pulido, the longtime industry veteran who was named Mimi’s new president on Tuesday. Most recently, he was leading the attempt at a comeback by the venerable Shakey’s Pizza chain, and earlier served in an operations role at Pick Up Stix. But perhaps it’s not coincidental that his resume also lists a stint as chief marketing officer of Pizza Hurt.
You can almost see a path worn into the carpet between Marketing and that big office in the corner.
Friday, November 09, 2007
The editorial staff of Nation's Restaurant News has been guffawing over this since Dallas bureau chief Ron Ruggles passed it along. Apparently it was anonymously e-mailed to him, without any indications if the sender was the restaurateur, the offended customer or just an amused onlooker. In any case, you have to admire the artwork for this piece of feedback.
Thursday, November 08, 2007
How can I put this so I don’t offend?
After enough restaurant visits, even a dim-wit would notice that a place’s hot sellers tend to show up on other menus in nearly an identical form. Clearly all the establishments must’ve been struck with the same inspiration. How else would you explain why one outlet is peddling a Bloomin’ Onion while the joints up and down the street are pushing Awesome Blossoms, Onion Straws, Onion Crunches or an Onion Loaf? It’s the darnedest thing.
That’s why you have to appreciate Vicorp’s forthrightness in touting the new limited-time offers for its Village Inn and Bakers Square family-dining chains. The showcased items, it readily acknowledges, are the specialties of other restaurants. There’s the stuffed French toast from Maine’s Maples Inn and the steak dishes from Texas’ Perini Ranch Steakhouse, with other restaurants’ signatures to follow.
There’s no coyness to the effort. “We hope the association with unique, high-quality, award-wining recipes will help create a powerful new reason for guests to try our food, and to set us apart as highly innovative,” said chief executive Ken Keymer.
Presumably it’s kicking back some coin to the restaurants for the use of their dishes, a rare dash of legitimacy in an industry with more thieves than a medium-security prison.
Sunday, November 04, 2007
Taco Bell probably has nothing against surveys, but it won’t be getting the usual Christmas card this year from whatever company makes the forms and the stubby pencils that consumers use to fill them out. The chain alerted financial analysts last week that it, too, is veering away from the traditional process for gauging customers’ reaction to possible menu additions, a detour that’s already being explored by McDonald’s, Wendy’s, Baja Fresh and presumably other chains. The old standard of exhaustively testing new products is apparently going the way of the rabbit-ear TV antenna as restaurant brands try to respond with more alacrity to the zigging and zagging of consumer preferences.
But not all franchisees view shortened product tests—or the elimination of testing altogether—as a positive shift. Some licensees of McDonalds, Wendys and Baja have yelped about having to add products or a whole new menu line before the operational and marketing support has been adequately pressure-tested. And misfires, they complain, can do more damage to their businesses than to a franchisor. They say the streamlined assessments fail to balance sales benefits against such factors as local labor expenses, the cost of capital, or the longer-range perceptions about service times.
At least one Baja franchisee is irate because he believes the home office isn’t effectively gauging even the top-line impact of introductions. He asserts that the chain recently shot-gunned a product into the market with advertising support, only to discover that it didn’t have sufficient supplies to meet the heightened demand. But, in fairness, that couldn’t be confirmed with the franchisor.
Wendy’s, on the other hand, has publicly disputed franchisees’ even louder assertions that the chain is inadequately testing new products and operational changes. The charges were levied in a letter sent to headquarters late in the summer by 16 franchisees, who cited the current testing mindset as one reason for “the slow decline of our brand.”
Having seen my share of franchisee disputes, I’d be a fool to take sides in a fracas like that one. But it certainly was curious that Wendy’s current management included a rollout of breakfast in the turnaround strategy it disclosed last year. The same announcement noted that the meal service would be tested. That’s like proposing as soon as a blind date opens her door, then suggesting the two of you discuss compatibility after you’ve been getting together for a year or so.
Franchisees of McDonald’s have been more discreet in their complaints about the chain’s recent quickness in adding new products, particularly beverages. But the dismay was evident in the latest survey of McD’s licensees by former analyst and current restaurant-company investor Mark Kalinowski. In his most recent quarterly canvass of the operators, several complained that lattes and other specialty drinks were being shot-gunned into the market without sufficient research on service issues or even the long-term payback of buying the required equipment.
"The Combined Beverage Initiative is a real concern for me," said one respondent, refering in McDonald's-speak to the beverage program."I have heard a number of
estimates from $100,000 to $130,000. The train has left the station, stores surveys are being done and we have yet to see any FACT-BASED INFO to know if this is a good
investment or not."
One anonymous respondent suggested that franchisees form a renegade association that’ll be more vocal than the official franchisee organization in shaping the chain’s strategy.
In fairness to Taco Bell, there are no evident signs that its franchisees have an issue with the new testing strategy, known internally as the Explore in Store process. The shift is intended to help the chain double the number of new products it fly-casts into the market in any given year. To crank out products at that speed, Taco Bell execs told analysts at last week’s special meeting, possible new options will be introduced in just a few stores, with the new choice highlighted in signs. If the reception by consumers is encouraging, the item could be quickly rolled systemwide, presumably as a limited-time offer.
Lehman Brothers’ Jeffrey Bernstein, one of the restaurant analysts who attended the meeting in Taco Bell’s hometown of Irvine, Calif., said in a report that some products will continue to be developed and tested in the chain’s usual fashion. Indeed, he noted that Taco Bell is still testing breakfast, an initiative that executives disclosed at the same meeting one year earlier. Yet the testing is continuing, and “the expansion appears slower than initially expected,” Bernstein wrote in a report to clients.
The new streamlined rollout process could serve Taco Bell well in catching up with other quick-service chains on two fronts. During the meeting, executives aired intentions to add a frozen beverage to the Mexican chain’s menus, and to explore some health-oriented “better-for-you” products.
Monday, October 29, 2007
If the restaurant industry has slogged through a worse reporting period than the last few weeks, a guy named Hoover was probably president—if not somebody named Voldemort. In a 19-day stretch, Domino’s posted a 55-percent freefall in net income, Ruby Tuesday posted a 48-percent plummet, Brinker notched a 21-percent decline, Wendy’s disclosed a 56-percent dive, P.F. Chang’s earnings sank 20 percent and IHOP finished $11.6 million in the red. For all but a few industry standouts (notably McDonald’s and Tim Hortons), the recent past has been the stuff of blues songs.
The industry has certainly shrieked through its share of rollercoaster drops before. As Ruth’s Chris CEO Craig Miller noted during MUFSO, the current ills of sky-high fuel prices and surging food costs are minor compared to what he saw in the 1970s, when President Nixon froze prices to check inflation and consumers couldn’t buy gas at any price because of an OPEC embargo. This is nothing compared to then, he suggested.
But what makes Quagmire 2007 unique, at least out of all the restaurant downturns I’ve witnessed, is its lack of discrimination. In past sales chills, business usually shifted, with the big brands wresting traffic away from the scrawnier players in a display that would have had Darwin smugly nodding. But this time, the dynamic seems to be more of a lowering tide. Many of the companies that reported their earnings with a decided wince were the very ones that filed their SEC documents with a swagger just a short while ago. This is truly a macro-effect, not a bad story with plenty of footnotes. The list of the unaffected is shorter than a mash note to George Steinbrenner.
Which, of course, underscores the question, What’s the industry to do? Miller offered his recollections of worse times to illustrate that better conditions will return eventually. But how can a chain hurry it along?
BJ’s Restaurants, one of the companies to clearly prosper during a period that most competitors characterize as a kick in the groin, has a very definite idea. “In this difficult operating environment, where consumer spending for casual dining occasions and the prime costs of doing business will likely continue to be under significant pressure on an absolute basis for the foreseeable future, we believe the more successful casual dining concepts will be those that protect their overall consumer 'approachability' for all dining occasions and that offer even greater quality, differentiation and overall value to the consumer," CEO Jerry Deitchle was quoted as saying in the company’s announcement of a 31 percent rise in net income on a 30 percent rise in revenues for the third quarter.
I’m not crystal-clear on what he means by “overall consumer ‘approachability,’” but I assume he’s trying to say that the objective is boosting customer frequency, a laudable goal. Certainly that’s more ambitious than the usual approach of trying to buy customers by giving them a deal, a reflex that can haunt a chain for years to come.
Avoiding that knee jerk to focus on “approachability” and differentiation—an objective that should trump the others, in my estimation—would be as much of a departure from the norm as this downturn itself seems to be.
Friday, October 26, 2007
I wish I’d been at Fenway Park last night, an admission that’s not easy for a Yankee fan to spit out. But at least I could’ve watched the game without having to retch through the worst baseball sell-out since the Black Sox Scandal of 1919. If you caught Taco Bell’s painfully strained promotion during Fox’s broadcast of the game, you’ll sympathize completely. Normally I’d rather tongue-kiss David Ortiz than set foot in a gloating Red Sox Nation during a World Series. But I’ll take Schilling over that sort of shilling any day of the baseball calendar.
Here’s what happened: With the Red Sox ahead by just one run, the heart of the Rockies’ lineup was coming up to bat. At that very moment, Fox commentator Joe Buck alerted us that we were going to hear an earlier-recorded snippet of conversation from a mic’d-up Royce Clayton, a second-string shortstop for the BoSox. For the benefit of the non-baseball fans among you: That’d be like “60 Minutes” interrupting an interview with Osama Bin Laden to cover a cat stuck in a tree.
“Hey, you like Taco Bell?,” Clayton asked Red Sox rookie Jacoby Ellsbury, who looked about as engaged as a 4-year-old in church. Clayton proceeded to explain that Taco Bell would give free tacos “to every person in the country” if a player on either team stole a base that night. “America’s depending on you,” he informed his young teammate.
Cut back to Buck, narrating a clip of Ellsbury stealing a base earlier in the game. Buck, one of the most respected commentators in sports, then informed the audience that the free tacos would be available next Tuesday between 2 and 5.
Say it ain’t so, Joe.
And tell us you’re not going to play along any further than that.
But he does. Matt Holliday, the Rockies’ best hitter, rips a single to set up a possible rally for the Rocks. Now Buck segues us to in-the-stands commentator Chris Myers, who’s sitting with Taco Bell chief operating officer Rob Savage. Myers articulates THE question on the minds of baseball fans at that moment: How can Taco Bell afford to give everyone in America a taco, when that has to cost millions?
“It’s all for our customers,” for whom every taco will be “made fresh for you,” Savage somberly replies.
Myers then presents Savage with a takeout container of (presumably New England) chowder inside a Taco Bell bag, and scars young baseball fans forever by closing with, “We’re thinking outside the bun.”
Buck, having found his conscience again, offers an obviously sarcastic, “Chris, great work.” At which point booth mate Tim McCarver burst out laughing. “From Schilling to shilling,” he quips, and both broadcasters resume calling a game then being pitched by Red Sox legend Curt Schilling.
It’s essential that restaurant marketers find new ways of reaching an audience that’s drifting away from traditional media. But the goal is to engage that hipper, more irreverent crowd, not to alienate it with a heavy-handed plug of that sort. Even co-conspirators like Buck and Myers seemed embarrassed to be associated with something that clunky. Used-car salesmen were probably cringing.
On Thursday afternoon, Applebee’s announced that it had chosen an apple as its new pitchwoman. A few hours later, Taco Bell and Fox reached for a lemon.
Monday, October 22, 2007
I’m thinking of bidding $4 billion for Wendy’s, but why make Nelson Peltz any richer? The worth of his stake in the company may already be bobbing higher because of speculation he’ll offer $3.2 billion—speculation some say he’s conjured with all the high-profile yelping about his treatment as a potential buyer.
After all, several of the other identified suitors have insisted the company’s not worth that much. Through his various companies, Peltz controls about 9 million Wendy’s shares. If he can bluff another bidder into raising its offer by even a few dollars per share, he’ll be in Frosties for life. And if he scares them away with his posturing, he could swoop in with a low-ball deal and bag the company with the M&A equivalent of an order off the Super Value menu. This is why I’m slaving away at a keyboard and he could pay the King to cut his lawn, with Mayor McCheese handling the edger.
So why not have my 15 minutes of fame and talk up a plan to bid $4 billion? As more and more observers are suggesting, my contemplated offer may be just as real as Peltz’s.
I’d call and check that with him but—well, you know. I’d have an easier time dragging the Pope out for some foosball.
Thursday, October 18, 2007
Wendy’s best hope may not be Nelson Peltz, Bill Foley or a nameless twentsomething in a pigtailed wig. If the company wants to avoid a pitched two-front war with investors and franchisees, the person it really needs is Paulie Walnuts.
As any Sopranos fan knows, Paulie has his issues, like occasionally beating people into hamburger. But he was also the go-between when warring parties wanted a sit-down. Too bad the folks at Wendy’s apparently weren’t HBO subscribers, because they’ve been focused on sending messages instead of sharing some grappa in the backroom of the Badda Bing. Franchisees are clearly squaring off with the home office, if they’re not looking to buy the company and impose their own strategy. And how’s Wendy’s coping? By sending letters, like the feel-good click here it dispatched to licensees and employees yesterday.
In fairness, it should be noted that headquarters has instituted monthly webcasts with franchisees and employees to keep the whole system apprised of chain activities. CEO Kerrii Anderson also indicated in her letter that enhancements have been made to WeNet, presumably the chain’s intranet.
But neither of those media is face-to-face. Indeed, they tend to be used for one-sided disseminations than a true give-and-take.
What seems to be needed is a war council, where the parties can sit down and work out their differences in the spirit of Dave Thomas. Instead, franchisees and the home office have been using postmen as their proxies, sending letters back and forth. A dozen licensees sent a scathing one to Wendy’s home camp a few months ago, blasting management for lowering the value of their business. The executives denied it, and followed up with yesterday’s assertion that the turnaround is going well.
Does this sound like a system that’s talking?
In her letter, Anderson also noted that meetings were held in August with franchisees specifically to discuss plans for 2008. Why, then, was yesterday’s communication even necessary? Might it have been more of a defense than an explanation of what the home office has chosen to do?
Interestingly, in ticking off Wendy’s achievements during the last year, Anderson cites “enhanced communications” as an accomplishment on par with improving operations or bolstering sales and profits. Clearly the management team felt the need for an upgrade. You have to wonder if executives and franchisees still do, and if both sides are doing their part to ease tensions through conversation.
“We’ve made significant progress in the last 12 months,” Anderson told franchisees and employees. But “we have so much more to accomplish.”
Perhaps maintaining peace with franchisees through a true disarmament sit-down should be item No. 11 on her to-do list. With that problem allayed, the whole system could address the larger issue of bolstering finances, which might even make Nelson Peltz smile.
Tuesday, October 16, 2007
It’s the industry’s equivalent of a tooth fairy with nothing smaller than a ten, an upgrade to first class on a trans-Atlantic flight, maybe even a snow day. If ever there was a sweet treat for the restaurant business, it had to be the free spending of pharmaceutical companies that believe the way to a doctor’s ears is through the stomach. Drug sales reps know their ticket into a physician’s office is a free breakfast or lunch personally delivered to the staff. That’s why some restaurant chains have organized sales squads specifically to sell their catering or function services to pharma field teams. Is there any doubt they’ll be sobbing louder than most when regulators try to take that boon away?
They’ve already succeeded in Minnesota. Lawmakers there have prohibited drug salespeople from giving a doctor more than $50 worth of food per year. That translates into a catered lunch from Panera Bread about every August.
Worst of all for the restaurant industry, the two-year-old curb has demonstrated that doctors are far more reluctant to open the door for an empty-handed pharma rep. Research suggests that the turn-away rate for pitchmen in Minnesota is double the decline in visits for counterparts in the other 49 states. And that’s exactly what proponents of the restrictions want to see. They believe the wooing prompts doctors to prescribe medicine that isn’t necessary or costs more than suitable alternatives. They want the reps to stop courting doctors in any fashion. And free food seems to be the equivalent of roses and jewelry.
No wonder a push for restrictions is arising in other states, according to a recent article in The New York Times. New Jersey formed a task force last month specifically to consider a measure similar to Minnesota’s, according to the article. It suggested that other states may be interested as well, but did not name them.
If the restrictions were to spread, chains ranging from Outback Steakhouse to Au Bon Pain could feel the pain. It’s a shame that such a lucrative source of business could be closed off at a time when the mainstream market is clearly in need of some strong medicine.
Thursday, October 11, 2007
A new title was bestowed on the grand metropolis of New York last week, in part because of its sizeable restaurant industry: City Most Likely to be Infested with Rats (Fall Season). And, no, the news didn’t come from the Big Apple Chamber of Commerce.
The distinction was pinned to the broad chest of America’s cultural and commercial titan by two figures who are acclaimed for their knowledge of rodents, Dale Kaukeinen and Bruce Colvin. The pair studied data from the 2000 U.S. Census to determine what makes a city attractive to rats. Among the factors they identified was the resurgence of cities as residential areas and a resulting gentrification, which in turn have bolstered urban areas’ service and entertainment offerings. “This trend is proving to be an ideal environment for rodents due to the density of people and the abundance of food waste from residents, businesses and local eateries,” according to a statement on Kaukeinen and Colvin’s research, which was sponsored by a “rodenticide” supplier.
Among the other contributors they identified are “wacky weather,” defined as unseasonably warm and wet, and an end to the $12 million to $15 million in subsidies the federal government once passed along annually to communities for the fight against rodents.
Wielding the criteria they’d developed, the duo then ranked cities by their expected hospitability to rats this fall. New York topped the listing, followed by Houston, Boston, Louisville and Philadelphia. Among the surprises on the roster were El Paso, Texas, at No. 9 and San Jose, Calif., at No. 19.
Kaukeinen and Colvin suggested that fall is typically the height of the rodent tourism season for many U.S. cities. “As the weather cools,” the statement explains, “rats and mice move inside in search of food and shelter.” It’s when infestations are most likely to occur and “rodents reach their annual abundance,” it noted.
Our beloved Yankees may have been eliminated from the playoffs this fall. But let Cleveland try to touch us in the rat rankings. No wonder pitcher-attacking bugs seem to be its signature pest.
Monday, October 08, 2007
Last Thursday afternoon, just after the lunch rush, a former staffer of a Moe’s Southwest Grill in Dilworth, N.C. decided to surprise his one-time colleagues. He walked into the burrito restaurant, pulled a gun, and shot operating partner Vinny Ferens and assistant manager Jeff Mahar. The police grabbed the 28-year-old gunman and learned he came to shoot up the unit, not to rob it. He’d been canned a few weeks earlier and had come back to exact revenge.
He succeeded in his quest; Ferens, 36, and Mahar, 34, both died from their injuries. The elder of the two left behind three children, ranging in age from eight years to six months. Mahar’s familial situation was not disclosed. He’d joined the crew just two months ago.
That account of the tragedy was provided to the media by Moe’s franchisor, Atlanta-based Focus Brands. Those of us with ink in our veins usually have to wheedle, cajole or feign a last request to get information from an organization that’s suffering through a nightmare of that magnitude. If the moon and stars are aligned, you might get the sparest of details. Focus is publicizing everything about the incident except the name of the employee-turned-accused-shooter (local news and police reports identified him as Derrick Lamont Gregory).
The reason for the company’s forthrightness is clear and commendable. It wants the industry to know what happened to two of its own because the pair’s successors may need help. Left unsaid is the trade’s willingness to aid the families within its ranks, regardless of whether they’re strangers or even affiliated with competitors. It’s something unique about the business that people in other fields probably can’t fathom. If you doubt it, ask someone in the grocery business if they’d ever help a counterpart limping through a crisis. They’ll probably take a swing at you.
Focus wants the business to know that it’s set up a fund to help the families of Ferens and Mahar with burial fees and other expenses. Contributions can be sent to the Moe’s Victims Memorial Fund, Wachovia Bank, 171 17 St., Mail Code GA4517, Atlanta, Ga. 30363.
Already, Moe’s management said in a statement, “the outpouring of sympathy and support that our customers have shown for these victims has been incredible.”
Hopefully Feren and Mahar’s professional peers will be even more generous.
Sunday, October 07, 2007
One of the highlights of last week’s Multi-Unit Foodservice Operators conference was a panel discussion of the nation’s immigration problem and what should be done about it. Discussion, debate, argument—why get hung up on semantics?
And yet semantics, as the panelists noted, is often what keeps tempers burning when the topic arises in any public forum. As National Restaurant Association chairman Dick Rivera observed, a hardliner on the panel referred to “legal immigrants” but “illegal aliens.” Clearly “aliens” is a more pejorative and loaded word, applied more often to mutant invaders from space than foreign students who over-stay their visas.
Rivera was brilliant in arguing for a moderate approach to resolving the issue of illegal immigration. And, perhaps not surprisingly, he suggested the process begin with the adoption of a new glossary. A key point of contention is whether the 12 million illegal aliens estimated to be in the country right now should be forced back to their countries of origin before they can begin to seek legal residence within the United States. To do otherwise, conservatives argue, would be granting amnesty to obvious lawbreakers.
“I prefer the term ‘plea bargain,’” said Rivera. The illegals should have to pay taxes and perhaps fees or fines, rather than get away scot-free, he explained. But they should also be allowed to stay, which he defined as “being on parole.” As long as their behavior remains lawful, why not let them continue to work and live here while they seek legal residence?
It was a dash of reason and level-headedness, elements that sorely seem to be missing from the discussion of immigration, if you can even call that screaming match a discussion.
One other interesting tidbit that emerged during the panel: One expert noted that about 7 million of the nation’s estimated 12 million illegal immigrants are currently working. The restaurant industry has estimated that it alone employs about 1.4 million of that illegal workforce, or 20 percent of the tally.
Clearly the “problem,” to use another loaded word, is a major one for the trade. It’s fortunate that Rivera has suggested a vocabulary that will serve the business well in its attempt to foster an actual discussion on immigration. And, thanks to that presentation at MUFSO, it’s a give-and-take that shouldn’t be alien to the trade.
Thursday, October 04, 2007
I’m starting a relief fund for my colleague Lisa Jennings, who could be institutionalized by the assignment of crafting an overview story on Nation’s Restaurant News’ Multi-Unit Foodservice Operators conference. The meeting, held earlier this week in Los Angeles, crammed an MBA course on industry issues and trends into three days, with any downtime devoted to networking and sampling the latest in adult beverages. Lisa has the task of capturing that kaleidoscopic experience in a snapshot. You can only hope the food is decent at wherever she’s committed.
Fortunately for the other residents of Harmony Home, the show provided several moments that will serve Lisa well during Story Night. Here are a few of the lines from MUFSO that probably won’t figure into her article (which, by the way, is scheduled to appear in the Oct. 15 issue of NRN).
“Within an hour, you’ll be depressed.” — Rick Berman, before beginning his one-hour presentation, presumably referring to the content of “Labor Costs: The Rising Cost of Employment.”
“How many of you thought Jack was really the CEO?” – Linda Lang, chairman and CEO of Jack in the Box, as she took the podium to accept her Golden Chain award. Earlier, Lang had revealed that Jack, the orb-headed mascot who’s cast as the chain’s chairman and chief executive in commercials, is always portrayed by the same person rather than a succession of actors. Lang wouldn’t say who that thespian was, explaining, “if I told you, then I’d have to kill you.”
“My new dream is to be Julia Stewart.” – Nick Vojnovic, president of Beef ‘O’ Brady’s, after confessing that his mother’s dream for him and his brother will never be realized. Coming from a restaurant background, she had insisted that her children not go into the business. Nick’s two brothers are also high-level foodservice-company executives. He didn’t explain his infatuation with Stewart, the CEO of IHOP and architect of the company’s pending purchase of Applebee’s.
“I’m up here for being alive today.” – James Maynard, co-founder and chairman of Golden Corral, joking about his choice as the 2007 winner of the Pioneer Award, an honor previously bestowed on the likes of Col. Sanders and Norman Brinker. Later, while actually accepting the award, Maynard quipped through tears that winning the honor wasn’t a bad achievement for a 50-year-old. He founded Golden Corral almost 35 years ago.
“They’ll be out of there faster than Ted Kennedy at an O’Doul’s kegger.” – Jim Sullivan, forecasting how youngsters steeped in present-day multi media will react to a restaurant trainer wielding nothing more high-tech than a flip pad and pointer.
“My father told me, ‘You’ll do well there [in Washington]. You’ve been dodging nuts your whole life.’” – Ex-congressman Leon Panetta, after recounting how his job on the family’s walnut farm was scooping up the nuts after his dad shook the trees to make them drop.
Sunday, September 30, 2007
It was like popping into an airport bar to catch the playoffs and finding a stranded Joe Buck and Tim McCarver perched on stools, offering their play-by-play to a select crowd that happily included you. In the dullest of years, attending the National Restaurant Association’s Public Affairs Conference makes you feel like a Washington insider. Catching the annual political download at a time like the present, when the presidential race is fuzzier than Phil Spector’s hair, was akin to getting a D.C. zip code. Elsewhere in the nation, pundits may still be wrangling over which candidates will get the nominations of their respective parties. But everyone inside the Beltway seems to have a solid hold on who the final contestants will be. And the wonks gladly shared that information with restaurateurs attending last week’s conference.
Almost certain to top the Democratic ticket, presenters agreed, is Hillary—though Mike McCurry, a former press secretary for her husband, added a major asterisk. If her performance in the early bell weather primaries suggests she can’t win the general election, the party faithful will likely abandon her for more of a centrist candidate like John Edwards. Why put money and party machinery behind such a polarizing force?
For that reason, Clinton’s chances of returning to the White House were portrayed as unlikely.
Likely to face her in the general election, McCurry and successor Ari Fleischer both noted, will either be Rudy Giuliani, Mitt Romney or Fred Thompson. In further analyzing the situation, the former presidential spokesmen noted that Thompson is the Great Unknown, with the mien and outsider credentials of the Great Communicator, Ronald Reagan. But, as Fleischer said, the question is, “is there any there there?” Is Thompson an actor playing a role, or a genuinely wise, principled conservative of impeccable integrity?
Romney was likened to the Energizer Bunny, the battery-charged, in-the-pink phenom who just keeps going and going and going. They noted that he also has solid business experience, having founded the private-equity behemoth Bain Capital. Yet nothing was said of his political stance, perhaps because it’s changed like the seasons since he caught the attention of Massachusetts voters in his run for governor. Other pundits have noted that the voting public of that state hardly match the political composition of the national populace.
And that left Giuliani, about whom they said virtually nothing positive or negative. Which, judging from some of the other political handicapping that was offered aloud during the conference, is the modern-day equivalent of having FDR’s oratorical skills, JFK’s money, and OTB’s designation as a favorite.
Monday, September 24, 2007
One of the bigger things on chain menus this fall could be the tiny burger. Applebee’s is touting the mini sandwiches in its current commercials, and T.G.I. Friday’s is featuring a version on its high-profile new mix-and-match menu. They join such earlier adapters as Damon’s and Ruby Tuesday, which could cater Munchkin Land’s annual picnic with the three mini-based options it offers. The current array stretches from a turkey variation to the more traditional ground-beef variety.
But the phenomenon is hardly limited to the full-service sector, as Good Time Burgers can readily attest; the regional quick-service chain credited its tiny Bambino Burgers for a 13.8-percent comp sales leap during July and August. Back Yard Burgers, another regional brand, offers a 1/8-lb. Great Little Burger. Still another local player with ambitions, Five Guys Burgers, sees enough potential attraction within its Eastern stronghold to offer four permutations (with or without cheese, with or without bacon).
And, of course, the bite-sized burger remains the signature of White Castle, whose “slyders” (also spelled “sliders”) are still revered by hardcore fans as the one true mini. The chain claims to be the originator of the juicy little morsels, though plenty of other specialists point to years of spatula work with Lilliputian patties, from Krystal to occasional White Tower that refused to fade with the rest of that chain.
The roster will likely continue to grow as more chains grab for a product that could be the bouncing ball in a sing-along review of menu trends. Small indulgences, vis-à-vis spoon-sized desserts? Absolutely. Affordable luxury, a la high-art cocktails? It’s not a coincidence that many of the new burgers are made with Angus (or even kobe beef (or, in the case of Damon’s, a mix of the two meats), providing a luxe experience at a price below the pain level. Modular eating, where you build a meal from a little of this and a dab of that? What better element for a collection of shared items than a plate of two or three little burgers (or four or six, again in the case of Damon’s).
Plus, says well-known menu consultant Nancy Kruse, there's a built-in nostalgia factor for the large segment of the population that grew up on White Castle, Krystal or, in areas like Washington, D.C., White Tower or White Spot. Add in what is likely an attractive food cost, and a good margin, and you have a product that makes sound business sense, too, notes Kruse.
Of course, this isn’t the first time that small sandwiches have surged into a big thing for chains. When commodity spikes had the big brands searching for a way of offering greater value, Burger King tried a two-pack of minis called Burger Buddies. The product proved an operational nightmare, with the tiny patties slipping through the conveyor-like grillwork of the chain’s signature chain broilers.
KFC opted for 1-oz. chicken-patty sandwiches called Chicken Littles. If you Google the name, you’ll find a slew of blog reminiscences of the product, along with a petition imploring KFC to bring the product back. Clearly the item was a hit. But with a product that sold at about 39 cents, if memory serves me correctly, you couldn’t make any money unless you nailed the management contract for all of Munchkin Land’s feeding operations. It just wasn’t feasible.
Chains are far less bashful about how they price the current crop of minis. But are these products that are here to stay? Or are they today’s frozen yogurt?
Wait a minute—isn’t frozen yogurt making a comeback?
Sunday, September 23, 2007
The producers of “Nova,” the popular science program, should forget about aboriginal tribes that worship Ernest Borgnine or ant species that build crude nuclear reactors. If they really want to focus on a scientific marvel, they should spotlight whatever mysterious force tends to turn the blood of foodservice veterans into grade A ketchup.
The vampire or virus has clearly been at work in recent months, leading to the memorable newsroom query of a young Nation’s Restaurant News staffer, “Ever heard of somebody named Jerry Richardson? He just bought into Bojangles’.”
Every heard of Jerry Richardson? When I was her age, that would’ve been like asking, “Anybody got a gauge on whether McDonald’s sells burgers or pizza?” He was a god of the business, a self-made gazillionaire who’d originally bought into the restaurant industry with money he’d earned by winning what many pundits still regard as the greatest football game of all time. He snatched a pass from Johnny Unitas during the 1959 championship series—this was eight years before the first Super Bowl—to beat the New York Giants.
He’d go on to build a colossal foodservice empire, with Hardee’s franchises at a cornerstone, but other interests ranging from Canteen Corp. to Quincy’s Steakhouse, Denny’s, El Pollo Loco and Hilton International. In his heyday, Richardson was as prominent a figure in the business as Yum! Brands’ David Novak or Darden Restaurants’ Clarence Otis is today.
But, of course, a lot has happened between that day and the present. Richardson, it seemed, never lost the football bug. The game was a big part of the culture of Spartan Foods, the Hardee’s franchise he built with longtime business partner (and fellow football fanatic) Charlie Bradshaw. Alumni of Spartan Foods still recall the rough-and-tumble inter-squad matches they’d be expected play at the company’s annual meetings.
For years, Richardson tried to use his wealth and connections to land an NFL franchise for the Carolinas. He finally succeeded in 1993 with the establishment of the Carolina Panthers, of which he remains the principal owner. To run the team, he stepped out of the business, but retained a Bojangles’ franchisee that he’d quietly purchased in the 1970s and delegated to his son, Jon, to run in the years since.
And now Richardson is suiting up to get back in the game. He’s named a longtime protégé as CEO of Bojangles, and Richardson has left little doubt that he intends to wield an active hand in the company’s operation.
It’s doubtful he needs the money, given the income bracket of most pro-sports team owners. Public records indicate that he’s about 71 years old. And he’s known success all of his life. Clearly he doesn’t have to do this.
Yet he sounds eager to put in the long hours and considerable effort that’s required to reinvigorate and expand a franchise chain. Clearly, he’s pumping Heinz or Hunt’s through his veins.
Then again, he’d have no problem finding transfusion candidates. Just days before Richardson’s name re-emerged, we ran a story about Dick Holbrook’s re-entry into chain management. A longtime second-in-command of Popeyes parent AFC Enterprises, Holbrook was stepping out of an investment role to become president of J. Christopher’s, one of the new breed of breakfast-and-lunch concepts that should just about finish off the old coffee-shop-style family restaurant.
Holbrook’s partner in the endeavor is Sam Haddock, who’s slung his share of burgers, drinks and fried chicken, too. He hails from the Rally’s, Donatos and Moe’s Southwest Grill chains.
But they’re hardly alone in returning to the trenches after careers that would be adjudged successful by even the harshest critics. Steve Lynn came off the bench to lead a still-pending acquisition of Back Yard Burgers. Paul Fleming, the “P.F.” in P.F Chang’s, recently bought into the 10-unit Z’Tejas casual-dining chain.
Skip Sack, a veteran whose career stretches back to the heydays of Howard Johnson, controls a considerable packet of Applebee’s stock. He garnered a nice nest egg by selling his Applebee’s franchises—repeatedly the most profitable in the system—back to the parent company. Yet he’s developing a group of Irish pubs.
Abe Gustin, the one-time Applebee’s franchisee who ended up buying the brand from W.R. Grace and making it the biggest brand in casual dining, exited the chain with some franchise territory for his family.
Ned Grace, the founder of Capital Grille and Bugaboo Creek, is a backer of New England’s high-volume Not Your Average Joe’s chain.
Tom Russo, another Howard Johnson alumnus and onetime chairman of the British housewares giant Hanson Trust, still participates in industry events. Does anyone doubt he’ll show up atop a chain at some point.
Ditto for Michael Kaufman, the former head honcho of Steak and Ale and Bennigan’s parent Metromedia Restaurant Group.
What is it with these folks? They get in the industry, and then they can’t let go of it. Clearly there’s something that creeps into their system, turning them into lifers, regardless of whether they need the business or not. What is this strange infection—some might say avocation—that catches hold?
Best look at what “Nova” has scheduled for its new season.
Wednesday, September 19, 2007
Every day seems to bring another report of restaurant fryer oil being turned into bio-diesel fuel for trucks and cars. The Friendly’s chain, for instance, now uses its in-house distribution system for what may some day be a closed-loop system. Right now, the trucks deliver supplies to units, as per the usual. But instead of heading back to their garages with empty cargo bays, the vehicles pick up used oil from the stores and haul it to a recycling center. The fat is turned into fuel, which is then used to power the trucks, offsetting their need for conventional diesel.
Pundits have remarked that the process would quickly become an industry norm if a chain giant like McDonald’s added the used oil from its restaurants to the flow. That quantum leap in scale would make the reprocessing commonplace, along with the retrofitting of vehicles to burn the recovered oil. Suddenly, a quirky green cottage industry becomes a sizeable source of alternative fuel.
But McDonald’s seems to be channeling its petroleum-saving endeavors in another direction, judging from British news reports. Today, 11 McDonald’s units on the other side of the Atlantic reportedly started shipping their garbage to energy-generation plants instead of landfills. The trash will be burned to churn out electrical power for 130 buildings in their area, according to the local media. There’s already talk across the pond of rolling the program to every McD’s restaurant in the United Kingdom.
The initiative offers a double benefit: No McDonald’s trash flowing into landfills, and less fossil fuel firing the turbines of power plants.
McDonald’s is also experimenting in Britain with solar panels, wind-powered generators and new cardboard recycling programs, according to news reports. Some noted that the chain is largely blocked from recycling its waste because many centers won’t touch refuse that could be contaminated with food.
Meanwhile, new green ideas continue to be hatched here in the colonies, from operators big and small. The latest from the West Coast: A proposal in San Francisco to have restaurants join residences and other businesses in turning off all their lights between 8 and 9 p.m. on Oct. 20, or during the height of the Friday rush. Lights Out San Francisco is patterned after a one-hour blackout that was coordinated in Sydney, Australia during March. The voluntary effort was estimated to lesson carbon dioxide production by 24 tons.
Sunday, September 16, 2007
Despite Rick Berman’s outstanding work as an industry Doberman, public-advocacy zealots are growing bolder in their attempts to bully the trade. Consider, for instance, the letter that was reportedly sent to Bill Allen, chief executive of Outback parent OSI Restaurant Partners Inc. Penned by an anti-abortion group called Life Decisions, the letter warned Allen that the various brands in his charge could be hit with a boycott if the company ever again made a donation to Planned Parenthood, according to a story in the St. Petersburg Times. Never mind that OSI’s lone dealing with Planned Parenthood, a group that champions contraception and family planning, was a “small” contribution by a single restaurant on the West Coast in 2005.
One restaurant, out of the 1,400 operated under OSI’s umbrella, making a single donation two years ago. The company hasn’t so much as advertised on a program that could be construed as pro-choice. Yet Life Decisions is threatening to steer customers away from the concern unless it does the group’s bidding.
The abortion debate is irrelevant to the matter. The issue is the attempt by a group with an avowed agenda to strong-arm a neutral company into acting in accordance with the advocate’s stance. Regardless of how anyone feels about abortion, that sort of bullying is just plain wrong.
To his credit, Allen apparently ignored the ultimatum. The Times reported that he called Life Decision’s bluff by not responding. He needs to stand firm against that sort of coercion, for the sake of reason as well as the independence of his company. It might just be a much-needed stroke of sanity for the whole industry.
Tuesday, September 11, 2007
The calendar says that today is Sept. 11, but you wouldn't know it here in New York. Local newspapers gave the anniversary a minimum of attention, focusing on aspects like the controversy over where a commemoration for victims' families would be held, or an exhibition of photographs at a civic museum. It doesn't seem right that such a monumental development in the lives of all of us who were here on that day six years ago would go unremembered. So here's a one-person protest, in the form of my recollections. They start, curiously enough, with an Afghani in foodservice whites.
I'd come out of the subway in Greenwich Village, a decidedly non-corporate area of the city about a mile north of the World Trade Towers. As I stood at the window of a cart that sold coffee and breakfast pastries, I could see the sky just south of me filling with black smoke. It seemed to hover over New York University, where I'd gone to school and where I knew one of the science facilities had a nuclear science program. I figured it had blown up.
The guy inside the cart saw me looking. "A plane hit World Trade Sen-tair," he told me emphatically. "I see it!" I would learn later that he had come from Afghanistan to sling cruellers and muffins from a two-by-five cart five mornings a week, rain or shine, during heat wave or cold snap. The tip-off was the pro-American signs he'd post in his wagon after we invaded his homeland and some Americans got a little testy with any Muslim they encountered.
Figuring some dim-wit in a Cessna had flown too close to the Towers during a sight-seeing expedition, I grabbed my bagel and coffee and headed up to my office. By the time the elevator doors opened, the second airliner had hit. A colleague told me as I was walking onto a floor that normally would have been abuzz with editorial activity. The only sounds were the click-clacks of computer keyboards and telephone touch pads as we tried to get word about what was happening. We could see the burning towers outside our windows, but had no sense of the larger picture. The internet was jammed, phone systems—land-line and cell—were overloaded, and TV reception was already shaky (one of the city's main broadcast antennas was atop one of the towers).
A few of us managed to get a call through to loved ones in other parts of the country, who relayed what they were watching on TV. But one of our co-workers, a young woman who now works as a restaurant publicist, was unable to locate a brother who worked on Wall Street and lived across the street from the Trade Center. He would later be located, but his wife was missing until she was tracked down to a hospital bed. She'd been injured while walking their dog when the first tower collapsed.
Back at the office, we didn't know what to do. We had very little information, hordes of people covered in soot were marching up from Ground Zero, and we were still sketchy on the details. For instance, some of our telephone contacts said that other planes were still in the air and authorities thought they may be part of the attack.
We'd have gone home, but the city was virtually quarantined by that point. No train service in or out, all vehicular traffic across the bridges was stopped, and you couldn't even walk across most of them. Sirens were wailing, and National Guardsmen were out in full combat gear, with police vehicles zooming through the streets. And we were stuck right in the middle of it.
Knowing that my wife worked across the street from Madison Square Garden and down the street from the Empire State Building—two likely targets if another attack came—I tried to coax her to leave her office and meet me for lunch, as far from any landmark as I could get. We agreed to meet in a park midway between us.
The streets were packed with people marching up from the World Trade Center, looking like ghosts because of the soot. Yet no one spoke. It was quieter than church until suddenly we all stopped and looked skyward, where a plane was clearly visible. By that time, we knew all commercial aircraft had been ordered out of the sky. Was this plane heading toward another building in the city?
"It's okay," someone shouted. "It's a fighter plane." The whole crowd, thousands of us, broke into nervous laughter. Then someone said in a pained voice, "But is it one of ours?" Suddenly, the silence resumed.
But it proved not to be a peril, so the silent trek resumed. I met my wife and tried to get into one of the few restaurants near the park that was open. Most never fired up their fryers and ovens because deliveries had been turned back at the city's borders, and workers couldn't get into Manhattan because the subways and buses were grounded.
This was a hotel restaurant, and it was doing gangbuster business. It just didn't want ours. "We're only serving guests, since we don't know when we're going to get another delivery," the host brusquely informed us.
So off we trekked, to my wife's office. She knew that someone at her company had scored a few pizzas. The concern had set up a relief center in its boardroom, with soft drinks and the pizza. Most amazingly of all, it had good TV reception. We decided to camp out there, in part because we could peer across the street at Penn Station, where we'd be catching a train if they ever started running again.
Her company, Thomson Financial, had a satellite office down at the World Trade Center. Without telephone service, no one at the midtown office knew how the people at the Center had fared. But as we were eating, they started showing up one by one. No one had known if they were alive or not, so the reunions were tearful ones. Each person arriving would be pumped with information about who else they'd seen either leaving the office or walking uptown. Some people already knew that colleagues from Thomson's Boston headquarters had been on one of the flights that struck a tower. And my wife knew that a competing company was holding a conference that morning in Windows on the World, the restaurant atop one of the Towers. We assumed that everyone there would be gone.
In total, the company lost eight people. It would make a large donation to one of the recovery funds, a fact that still fills my wife with pride.
Our train line started running again in mid-afternoon, after Penn Station was cleared by a bomb scare. By then we knew about the crash of the plane in Pennsylvania, and were pretty sure that no other craft were in the air. But we knew that life would never be quite the same again.
Six years later, we all know how true that intuition was.
Sorry to meander off on a personal reminiscence that has little to do with foodservice. But for the sake of the 74 Windows on the World employees who died that morning, it seems important to remember that day. And I plan to do it every Sept. 11 for as long as I live.
Sunday, September 09, 2007
With the new television season about to begin, this is a perfect time to look at the programming additions that are sure to be a hit with restaurateurs, given some of the recent developments in their business. Here are our picks from the new fall line-up.
Catch that Alien! Thwarted from forcing restaurants and other employers to fire immigrants who may be using a bogus Social Security number, the federal government came up with this new reality show. Employers are awarded points for the illegal immigrants they turn over to the authorities, with the top vigilante bagging a free trip to Mexico. Participants get 50 credits for the deportation of an immigrant employee who’s been with them for at least five years, 30 credits for a head of household, and 20 for someone who’s sure to face abject poverty back home. Any score over 100 entitles the contestant to a free weekend at Lou Dobbs’ home. But, true to the program that a San Francisco court thwarted some 10 days ago, employers who refuse to play are fined $10,000 for each illegally residing employee they fail to bust. There was a movement to call the program the No Match Game, after the letters that would have been sent to employees with a directive to fire staffers with bogus Social Security information. But that title is being used for a new game show where participants point out where the country has veered from its heritage.
Ken Burns’ Celebrity Restaurateur A 30,000-episode series on the restaurant business’ irresistible attraction for film, television and recording stars. Then again, the latest convert, Nick Lachey, doesn’t exactly fit any of those classifications. Neither does his partner, Nicky Hilton, whose claim to fame is being the younger sister of Paris Hilton. Whose achievements, in turn, include being born into wealth and starring in an online sex video. Lachey, in case you don’t regularly visit TMZ.com, BANG or other rivals to TheEconomist.com, is the ex-husband of Jessica Simpson, the legendary successor to such songstresses as Barbra Streisand and Judy Garland. The restaurant, to open in Las Vegas’ Luxor casino-hotel, will be an American-style place called Company American Bistro, according to US magazine. With the debut, Lachey would join a long, long list of celebrities who have given the industry a try, from Justin Timberlake to Minnie Pearl, Ron Wood, Johnny Carson, Mickey Rooney and Muhammed Ali. Each installment of this new PBS blockbuster will open with a shot of James Dean’s crushed Spider sports car, to symbolize the success of most ventures to date.
The Drive-thru Volleys Fed up with the web-fueled prank of hurling drinks and other missiles at drive-thru window staffers, restaurant chains fight back in this new program, whose episodes will also be posted regularly on YouTube. Staffers will be provided with tennis racquets to volley the drinks back at pranksters in their cars, with a video camera recording it all for the yucks of web surfers with far, far too much time on their hands. The defense is a reaction to the craze that has cited in this space before, called Fire in the Hole. It’s presently the height of hilarity for drive-thru customers to throw the contents of an open drink through the window to douse the employee on the other side, while someone else in the car videos the escapade on a cell phone for posting on the internet. The customers yell, “Fire in the hole!” and speed away with the rest of their order. Recent news reports suggest that some of the Einsteins who have embraced the prank are going farther afield in what they throw. Last week, for example, a snake was reportedly thrown through the window of a Taco Bell in Mississippi, though some stories quoted the unit’s manager as saying the snake entered the restaurant through other means. The incident drew the attention of writer Dave Barry, blogger Ariana Huffington and late-night talk show host Conan O’Brien. No wonder that it’ll be airing on O’Brien’s network, NBC.
Thursday, September 06, 2007
If you want to catch a game at Wrigley Field during next year's NRA show, start sucking up to indie-group operator Rich Melman, sports concessionaire Larry Levy or McDonald's chairman Andrew McKenna. The three are part of the thick-walleted investment crew that Chicago media have tagged as the lead bidder for the city's beloved Cubs.
The group is led by John Canning, chairman of the private-equity firm Madison Dearborn Partners, itself no stranger to the restaurant industry. Long before the current wave of private-equity-financed restaurant acquisitions, Madison Dearborn was active in the field, with investments in Ruth's Chris, Burger King franchisee Carrols Corp. and the Peter Piper Pizza chain.
Of course, the group isn't the only suitor for the team, which is narrowly holding on to first place in its division. Among the other reported tire-kickers is Mark Cuban, the one-time Dairy Queen employee who is perhaps a tad better known as owner of the Dallas Mavericks. The bad boy of sports moguls did time at a DQ unit after shooting off his mouth about an NBA ref. Cuban publicly remarked that he wouldn't hire the guy to manage a Dairy Queen. The quip cost him $500,000 in fines from the league, and Cuban decided to make nice with the working world by spending 90 minutes behind the counter of a DQ unit in Texas.
But even before he added swirls to soft-serve cones, Cuban was no stranger to the restaurant business. A former partner is Jeffrey Yarbrough, the Dallas restaurateur and one-time president of the Texas Restaurant Association.
And lest you think the restaurant industry is unrepresented on the other side of the deal table, consider that the pending Cubs sale is part of a larger transaction for current owner Tribune co., publisher of Chicago's namesake newspaper. While divesting the team, the media concern is in the process of being sold itself for $8.2 billion to Sam Zell, who made more than a few of the dollars in his considerable real estate fortune by serving as a landlord for Melman.
Friday, August 31, 2007
Dear Scruffy, Wiggles or whatever cutesy name they've etched on your Hermes collar,
Actually, I've just been informed by my dog—my male, SINGLE dog—that your true name is Trouble. Oh, that Leona! What a card.
Anyways, I'm writing for two reasons. First, I realize the celebrity canine circuit must be a lonely place, even for a knockout single bee-atch like yourself. If only I knew a male, SINGLE dog who enjoyed long walks on the beach, cuddling in front of the TV, and co-gnawing the occasional rawhide treat. I'll have to give that some thought.
But the more important matter is where you might be spending the $12 million that Leona left you in her will. Oh, sure, you could burn through it with some hunky mastiff in Paris or Milan. But why not employ it for the betterment of restaurants in Chicago, not to mention pooches everywhere?
Your former mistress may have sniffed at the notion of opening hotels there, but Chicago is a very progressive restaurant town. Now it's debating whether to take the highly charged step of allowing dogs to sit with their masters in outdoor dining areas.
I have to tell you, Muffin, that this is the polarizing issue of our day. Indeed, even we here at NRN are split on the topic. During a recent conference call, one of our Chicagoans brought up the proposal with a tinge of amusement in his voice. How, he asked, could there be any dispute over a matter this black-and-white? He then reeled off his preference for keeping dogs away from any place where food is served, be it al fresco or at a chef's table. The damned puppy kicker.
Those of use who have dogs—did I mention my male, single pal?—were of course aghast. Imagine, objecting to a tableside setter because a hair or two could conceivably waft its way to a neighbor's plate if wind patterns were right. Or some dowager could pull her spoiled Maltese out of a carrier and plop it on the very table you'll be occupying next. Pffft. As if any true animal lover would be put off by such things. We know our dogs are probably more hygienic than their owners, not to mention most of the two-legged population.
And yet the controversy rages, in Chicago and plenty of other places. Clearly the movement to open cafes to canines is gaining steam.
Opponents should learn from Florida, whose legislature passed a measure in 2006 that allowed jurisdictions to open outdoor dining areas to dogs by amending the local sanitation code. The state has yet to be plagued by excessive slobber, much less rabies or distemper.
So I think you need to get out there, Mittens, with checkbook in hand. Do what's necessary to let restaurants decide if they want a Pekinese among the people.
Of course, you probably would appreciate some companionship. Did I mention my male, utterly marriageable canine companion?
Tuesday, August 28, 2007
Having your brand mentioned on David Letterman's show is usually a marketer's equivalent to winning the lottery. But Jamba Juice may have a different valuation after being discussed at length during a broadcast aired last week and preserved on countless digital recorders, including mine.
All initially went well, with Dave lauding the chain's smoothies and acknowledging that he's an enthusiastic customer. He also noted how much you get for your money, vertically spreading his hands by at least a foot in an exaggeration of the serving size. And that's when the plug "gunny-sacked," to use his synonym for a train wreck.
The problem, he quipped to sidekick Paul Schaffer, was a tendency to suck it all down. It'll bloat you up like a Thanksgiving Day Parade balloon, he asserted, noting that he'd already cut down his usual order from two cups to one.
Within minutes, Letterman was suggesting the chain change its name to Jamba Bloat, and recommended that it print an alert on its cups: "Warning, could cause bloating."
His discomfort became a running gag during the show, leading to the exclamation at one point that his liver was being shoved against his pancreas. He also took to chanting "Jamba" to Tina Fey, his first guest, as she described a noxious-looking and nauseating potion that she quaffed daily as an energy potion.
There is no such thing as bad publicity, according to the old adage. But the performance was a veritable Top 10 List of why that maxim should bear an asterisk.
Friday, August 24, 2007
Yesterday brought two interesting headlines: McDonald’s spent almost $170,000 during the first half of 2007 on national-level lobbying, and Brattleboro, Vt., voted to legalize public nudity. But why waste time on the ho-hum? Let’s talk McDonald’s.
Because it’s the news about McDonald’s that’s really scintillating. Once upon a time, the burger giant was cursed by other restaurateurs for not adding its powerful name to high-profile campaigns against detrimental governmental measures, like federal wage hikes. Ray Kroc had famously remarked that if he saw a competitor drowning, he’d stick a hose in the lout’s mouth. Why abandon that mindset for a common defense? Instead of joining competitors on the ramparts, McDonald’s fought behind the scenes or on its own, if it joined an industrywide campaign at all.
Now, the Associated Press reported, just the home office is spending at the rate of $340,000 a year—huge money by lobbying standards—to shape federal regulations on menu labeling, immigration and food safety, among other issues. Some franchisees probably add to that sum with their own contributions to political action committees and other government-related causes.
The A.P. story was based on a regulatory filing. Similar disclosures are probably submitted as a standard procedure by powerhouses like Yum! Brands, Darden or OSI. And yet the news service treated the McDonald’s filing as a revelation.
Which, of course, leads us to the Vermont situation. A news brief about the Brattleboro’s new briefs-optional statute appeared in no less of an institution than The New York Times. Curiously, the same edition also carried a story about efforts elsewhere to permit the arrest of individuals who are inappropriately interested in the public show of flesh, such as when a woman in a skirt walks up a staircase.
I don’t think those two developments are contradictory, since the latter is intended to provide a legal basis for cracking down on true peeping toms. But some libertarians might believe so.
But I do think it’s significant the newswires were filled with tidbits about immigration and public-health proposals on the same day the A.P. reported solely on McDonald’s attempts to factor the industry’s interests into those discussions.
The burger giant may have been slow in assuming the industry’s standard, but it certainly seems to be leading the charge today.
Saturday, August 18, 2007
The realization might not have sunk in yet, but the industry learned last week that it’s heading toward universal paid sick-leave, with the mandate likely to come from health officials rather than lawmakers. It’s my prediction that the grease on the skids will be the formation of new government-regulated funding pools, a la unemployment insurance, to pay for it. It’s an expense the industry shouldn’t oppose until it considers the alternatives, which could change the industry’s fortunes far more profoundly.
The catalyst is new research that redefines how long a restaurant employee may be able to pass along norovirus, the leading cause of food-borne illness, to co-workers and guests. The convention in the trade right now is to keep workers out of the dining room or kitchen if they’re vomiting or suffering from diarrhea, a short stretch when they’re virtually walking Petri dishes for the gastroenteritis-causing microbe. In keeping with model practices, the staffers are usually benched for an additional two days to ensure they’re past the infectious stage.
But a study from Emory University viral expert Christine Moe has determined that the workers actually pose a significant contamination risk for five weeks longer. The results were revealed at last week’ Viruses conference, the subject of an earlier posting here.
The day after Moe dropped jaws with her finding, the Food & Drug Administration’s Alan Tart showed the audience what that could mean for the industry. The employees are still a contamination risk because they “shed” the norovirus, or excrete it in their stool. One gram of that feces contains about 10 million norovirus particles. If an employee had that tiny amount of residue on his hands after using the bathroom, and scrubbed them like crazy, science has shown that 10,000 of the organism will still likely make it into the place’s food. With only 10 viruses needed to infect someone, 1,000 patrons could be sickened.
One thousand people spreading the word that they got sick in that establishment. One thousand potential lawsuits, perhaps suing not only for damages to themselves but their families, since they, too, would shed the norovirus and pose a contamination risk. One thousand chances of destroying a business.
The ironclad solution, of course, would be to keep employees out of work for the 20 to 35 additional days that they’d be shedding the pathogen. But even Moe, a person outside the industry, could spot the problem of that approach. “You can’t ask someone to forego work and pay for that stretch,” she commented. “I don’t see a way of getting around having someone with the virus come back into the kitchen.”
But if they could stay home and still get paid? A possible solution, or at least a possible one in the eyes of health officials and politicians hoping to look tough on public-safety matters. Lest you doubt it, restaurant-labor representatives in New York City have already used that safety argument to call for universal paid sick leave. It was also raised in San Francisco, where a paid sick-leave mandate has already been passed through a ballot referendum.
And, remember, we’re in the area of Law by Health Official Decree, which has given us the recent rash of trans-fat bans and menu-labeling mandates. If they can say, “No more trans fat because it’s a health issue,” why can’t they say, “Pay your employees to stay home because of the health risk it averts.”
Curiously, in some give and take with other speakers, Moe raised the possibility of cooperative solutions. She was speaking about the use of nurses to determine if workers who profess to be sick should actually be kept out of work that day. She raised the notion of a third-party service, to which restaurant operators could refer their employees, instead of having to play health professional and make the work-or-no-work decision themselves.
But her notion could be applicable to paid sick leave. If operators contributed on a per-paycheck basis into a pool, with the fund tapped to pay an employee who has to be out of work for a stretch because of a norovirus infection, the financial impact could be greatly lessened. Indeed, even with the added expense of paying into the fund, that approach would be much more practical than grappling with the problem alone. That’s especially true when you consider that 23 million Americans suffer norovirus-induced gastroenteritis every year, and about 9 million of them contract it from a restaurant. Clearly there’s a lot of norovirus in the industry.
But the industry has to find a way of eradicating it without making all of its members sick, including restaurant owners.