The Scoop

Googling food safety

2008-11-17T13:40:00.000-05:00

Plug “E. coli” into Google’s news search feature and you’ll pull up the latest on an outbreak in Canada, where officials are trying to verify that contaminated lettuce is what sickened more than 50 people. You’ll also be getting a test drive of what could become a powerful but controversial new tool in promoting food safety: The Google search itself.

The New York Times reported last week that a philanthropic arm of the internet powerhouse is experimenting with a new service designed to help U.S. health officials detect a flu outbreak at least a week before the Centers for Disease Control and Prevention typically spots a cluster. The premise of the program is that sufferers or their families will search for symptoms of the illness via Google in hopes of determining what ails them. The search engine notes the spike in queries and pinpoints where they’re arising, thereby flagging an outbreak. See it for yourself at www.google.org/flutrends.

Right now, the only incarnation of the service is Google Flu Trends. But the same concept would presumably work with such food-related illnesses as norovirus or E. coli. “From a technological perspective, it is the beginning,” Google CEO Eric E. Schmidt told the Times.

The capability would seem like a no-brainer of a breakthrough. But it’s already stirred up controversy as well as hopes. The Times’ popular technology blog Bits has aired the fears of some groups that the detection function could lead to breaches of privacy. Google has issued assurances that disease-related search results would be aggregated rather than recorded by searcher, but public advocates are worried the capability could be misused to identity persons coming down with a particular ailment.

Potential risks aside, what’s the pay-off for such a system? In tests, Google Flu Trends spotted an East Coast flu outbreak a full 14 days before the incidences were collated by the CDC. That news came to light as health authorities in Canada were looking at reports of diarrhea and other potential signs of E. coli poisoning from a school in North Bay, the town where a Harvey’s family restaurant was implicated as the source of the lettuce-related outbreak.

Fortunately, it looks as if the school children were afflicted with the flu, not ailments caused by the potentially deadly bacteria. But if the Google system had been in place there (right now it’s only used domestically), and the agent was indeed E. coli 0157:H7, health officials might’ve gotten a jump that could’ve saved lives.

With a benefit that important, it seems like a service worth adopting, especially if reasonable privacy safeguards are put in place.

Set phasers on stun

2008-11-13T14:17:00.001-05:00

Depending on which side you believe, a Starbucks in Minneapolis either was or wasn’t unionized this week. Either way, it may be a preview of a disconcerting future for chain restaurants nationwide.

First, the dueling realities: According to the Industrial Workers of the World, better known to our grandparents as the Wobblies, employees of the downtown coffeehouse voted yesterday to be represented by an affiliate called the Starbucks Workers Union. A statement on the Wobblies’ website said management of the store had been presented with a 500-signature petition demanding that a security guard be hired. The posting also asserted the unit’s baristas walked off the job and declared an affiliation with the SWU, though the connections between those developments was not explained.

The statement convinced the Minneapolis St. Paul Business Journal and other media to report that the store had unionized and thereby become the second Starbucks in the state to organize. But as that coverage noted, Starbucks' corporate office experienced a much different reality. No baristas walked off the job, no other Starbucks in Minnesota has been unionized, no employees had so much as asked for a union vote, and the Starbucks Workers Union isn’t even really a union.

Apparently the company’s spokeswoman had a point. The paper posted a correction under the story to acknowledge that no unionization vote had actually taken place at the store.

This is hardly a “Roshamon” kind of thing, where an event witnessed by several advisers is perceived and recounted as totally unique experiences. It sounds more like one of those “Star Trek” episodes where a character is stretched between separate and conflicting universes and facing certain oblivion unless a brilliant solution is hatched.

And guess who's playing that character in this potential pilot for the seasons ahead? That'd be you, bunkie.

Even before Barack Obama was elected last week, business groups were bracing for doom because the Illinois senator was sympathetic to unions—and, by extension, presumably their new organization tactics. Much has been written in Nation’s Restaurant News and elsewhere about card check legislation, a measure that could force employees to vote publicly on proposals by their peers to unionize. It’s hard to cast a ‘nay’ when everyone, including the zealots, can see how you balloted.

But that’s just one of the tactics that unions might use to foster the organization of restaurants, the new frontier for the labor movement. Presenting alternative realities may be another. The situation in Minneapolis underscores just how far organizers will go to push their cause. Clearly it may be a matter of going where no man has gone before.

Gift cards get a loud, 'Bah, humbug'

2008-11-12T10:31:00.000-05:00

Gift cards have consistently been a holiday blockbuster for the restaurant industry. But that streak’ll end if several public watchdogs have their way. They’re warning shoppers to forego the no-brainer gifts because the chain or restaurant accepting the card could go bankrupt after the holly wreaths and mistletoe come down.

Those Scrooges include Richard Blumenthal, the attorney general of Connecticut. He’s cited in a Hartford Courant column by George Gombossy as flatly advising consumers to bypass the cards because “many more restaurants” will throw in the napkin. Indeed, Blumenthal said he’s speaking with the Connecticut Restaurant Association about forming what amounts to an insurance pool. Restaurants offering gift cards would all contribute small amounts to the fund, which would be used to make good on gift cards issued by operations that go under. Consumers could tap the kitty for a refund, then use the cash on places still in business.

Blumenthal is clearly using some broad strokes to tar the industry. Is a well-capitalized chain steakhouse really as likely to go under as Salty Ed’s Fry House and Bait Emporium? Yet he’s reportedly saying gift cards from all restaurants should be shunned like an I.O.U. from Michael Jackson. No wonder Gombossy titled his column, “Use Gift Certificates Now, And Don't Give Any.”

But Gombossy and Blumenthal are hardly alone in suggesting Aunt Lil give you an argyle sweater instead of that $100 piece of plastic for Ruby Tuesday. An article in yesterday’s Los Angeles Times was headlined, “Consumer Alert: Are your gift cards safe?” It cited a warning from the Tower Group consulting firm that shoppers could lose $75 million charged on gift cards because the issuing store or restaurant goes bankrupt.

The story doesn’t point out that $75 million is a tiny, tiny portion of what will be charged just on restaurant chains’ gift cards. The figure for all restaurants, never mind retailers, runs into the billions. The National Retail Federation has pegged the total for both channels at more than $26 billion. Such a small potential loss means only a tiny percentage of card-issuing restaurants are believed to be at risk. Yet the article—and possible the Tower research—fail to provide that context.

Instead, the story notes that consumers reportedly held $20 million in gift cards when Sharper Image went bankrupt. It also reports that Bombay Co. paid cardholders 25 cents for every dollar that was left on their cards when the retailer soaped over the plate glass windows of 388 stores in August.

Both that article and the Courant column appeared before “Taps” was sounded for Circuit City, the big-box electronic retailer that presumably sold a lot of gift cards.

Yeah, there’s a danger to buying cards. But the industry needs to remind consumers that it’s routine for one restaurant chain to honor the coupons of another, even when both are still in business. It may become even more of a convention if additional concepts flat-line. When Bennigan’s company-run restaurants went bust, Texas Roadhouse offered to provide a free entrée to consumers who had gift cards from the chain. The patrons presumably could’ve also used the cards at franchise establishments, which stayed open.

For six or seven years running, gift cards have been the restaurant-industry equivalent of finding a new sports car parked in the driveway on Christmas morning. It would be a shame to see that Maserati repo’d because consumers were frightened away from a holiday staple that giver, getter and seller all appreciate and value.

This just in!

2008-11-11T16:10:00.000-05:00

The American Medical Association declared its unflinching support yesterday for bans on trans fat use by restaurants and bakeries. Equally progressive stances were no doubt taken on dinosaur bites and something called fire.

Sure, it must take time to fill out all those insurance forms. But where has the group been for the last two years? At this stage, trans-fat bans are about as controversial—and necessary—as bar signs warning pregnant women not to knock back drinks.

If this group is the voice of the medical community, you can only hope it gets up to speed before the dialogue starts on universal health care.

Well, I better get back on AMA watch. It could issue its revised policy on battery licking at any second.

No Happy Meal toy, though

2008-11-07T16:53:00.001-05:00

Discounting, it seems, is highly relative. Knocking $2 off the price of a pie may work in the pizza business, but the high-ticket Ruth’s Chris chain has to operate on a different scale. So, after posting a 15-percent drop in comp sales for its non-franchised steakhouses, the wheezing brand is planning a mail drop of $25-off coupons. It's also experimenting with the fine-dining equivalent of value meals.

Upper-bracket bargain hunters will already find a new steal at the (steak)house that Ruth built: A five-ounce lobster tail stuffed with crab meat and coupled with a six-ounce beef filet for $39.95. Not exactly a Chicken Snack Wrap, but clearly a deep discount by the standards of the chain's market.

Three other Cadillac-echelon combos are in test. The Ruth’s Classic comes in two versions. For $39.95, patrons can pick an entrée, side and dessert. If they pop for the $49.95 version, the choices also include a full-sized rib eye, a lobster tail and lamb chops.

Simultaneously, the chain is testing a three-protein deal that would make Michael Jacobson overheat before he could condemn it as an obesity booster: A meat, a fish, and a chicken selection, accompanied by a side and a dessert, for $44.95.

“Frankly it's too much food,” Ruth’s Chris acting CEO Michael O’Donnell told shareholders.

And, perhaps, too much of an outlay. O’Donnell said the Ruth’s Trio will be recast with smaller portions and a price “in the $29.95 range.”

During a financial conference call convened by the chain’s parent, Ruth’s Hospitality Group, O'Donnell also mentioned a re-affiliation with Cameron Mitchell, the Columbus, Ohio, restaurateur who sold the company his Mitchell’s Fish Market and Mitchell’s Steakhouse chains. O’Donnell wasn’t clear on the nature of the affiliation, but indicated that the entrepreneur would be accessible if the company needed his expertise. “He has kindly agreed to be available to us on a limited basis,” O’Donnell said.

Light bulbs above some heads

2008-11-06T13:31:00.002-05:00

A few weeks ago, the restaurant industry was reeling from a shortage of customers, and hence sales, and therefore profits. Worst of all was an acutely low supply of something just as critical: Creative ways of contending. Now, at least, it looks as if that drought is easing.

A glimmer here and a rumbling there suggest economic conditions are separating the industry thinkers from the Dan Quayles—the folks who think brilliant leadership is picking the right idea to copy. They’re lemmings looking for the parade sign reading, “Cliff this way.” It’s the mindset that has landed much of casual dining in its current predicament.

Contrast that spud-headedness with a few initiatives that have come to light in recent days. Daily Grill’s parent company is cutting its cash outlays by paying executives 10 percent of their compensation in stock instead of dollars. It gives new meaning to the cliché, “win-win.” The company saves on salaries, the executives get paper that could be worth far more if they can drive up the stock price, and other shareholders get a management team that’s highly motivated to work for their benefit. Raise the value of the stock and everyone gains.

There’s also the public relations value of letting the world think the home office has cut its top-paid execs’ take-home, when in fact it’s given them something with the same face value and the potential of being far more precious. Indeed, from the recipients’ standpoint, it’s better than getting stock options—provided they don’t let the stock price decline any further (see earlier reference to management’s and shareholders’ perspectives being aligned.)

But that’s not the only ah-ha notion that’s been aired recently. Consider Sonic’s plan to lower its labor expenses while boosting customer service and possibly increasing the take-home pay of carhops. The drive-in chain is in effect reclassifying the runners who bring orders to patrons’ cars as tipped servers. It hasn’t said how it’ll trumpet that recasting to customers, but executives said in disclosing the plan that most guests already leave a gratuity. By formalizing the tendency and encouraging carhops to strive for tips, the chain can claim a tip credit, thereby cutting what it’s required to pay the staffers as a minimum wage. Yet the carhops are likely to end up with more money than they did when they were collecting the full wage.

What’s more, with an hourly-staff turnover of about 100 percent, the chain can phase in the program by merely extending it to new hires. The transition would only take a year, presumably with no shock to carhops who are accustomed to getting the full minimum wage.

Not all of the innovations are far afield. The Pollo Tropical fast-food chain, for instance, merely replaced its sandwiches with wraps. It correctly anticipated that wraps would be easier to eat on the go, and presumed that benefit would appeal to the chain’s mobile clientele. Units are selling 50 to 60 wraps a day, compared with the 15 to 20 sandwiches they formerly peddled, executives told investors Wednesday.

In still other instances, the course was apparent. It just took leadership and courage to pursue it. Every franchisor would readily attest that its success rests on the financial wellbeing of franchisees. Yet few have backed up that assertion with the sort of action that Papa John’s and Domino’s have recently taken.

The former made news Tuesday when executives revealed that the franchisor’s commissary operation would roll back the prices of the cheese it sells to franchisees. The wholesale cost paid by corporate likely hasn’t receded; Papa John’s must be absorbing the cut in its margins. It’s taking the hit to enhance the profitability of franchisees, even though royalties are based on sales, not the bottom line. But by keeping licensees healthy and thriving, the home office is betting it will benefit in the end.

To keep franchisees growing, Papa John’s is also looking at ways of becoming their bank. Because they’re struggling to find the capital needed for expansion, the franchisor is willing to serve as their pipeline until the tap is reopened by more traditional sources. One of the core rationales for franchising is the use of licensees’ capital to build a chain. Papa John’s, much to its credit, is rethinking that tenet of the situation.

It may be inspired in part by arch-rival Domino’s, which disclosed last month that it was providing franchisees with financing. “It will never be my preference to provide financing to our franchisees,” CEO David Brandon commented to investors. “We would rather keep our relationship with them focused on being the franchisor rather than their bank. However, we are wading through uncharted waters.”

Better to be slogging through them than being carried along by the current, hoping you’ll eventually land upright.

Live election coverage

2008-11-04T19:18:00.012-05:00

I'm sitting in my kitchen, watching CNN and eagerly waiting for the election results to trickle in, probably like every other American on this historic night. My objective here is to provide live updates of the races involving restaurateurs or known supporters of the industry, such as former National Restaurant Association executive Jo Ann Emerson (now running for re-election on the Republican ticket as the congresswoman from the eighth district of Missouri). The thread is probably best read from the bottom up. All times are EST.

According to our count, there are eight current restaurateurs running for office. You can find out who they are, and learn about the other "friends of foodservice," by checking out the story on our website, nrn.com.

Here's how some of those races stand as of the time posted.

12:07 a.m. New Mexico, Alabama
The networks have just projected that the industry's victory streak has come to an end. Ed Tinsley, a co-owner of the K-Bob's Steakhouse chain and a longtime director of the National Restaurant Association, has apparently been defeated in his effort to win the congressional seat for the second district of New Mexico. Tinsley, a Republican, lost by six points to oil-industry veteran Harry Teague. At MUFSO, Tinsley commented that unions had poured money into the election in hopes of pushing Teague into office.

Things aren't looking too good for Subway area developer Jay Love, either. Love, the Republican looking to win Alabama's second district, is running about two percentage points behind his Democratic opponent, with 97 percent of the ballots counted.

11:15 United States of America
The hooting and hollering outside were a tip-off to the news flash that came seconds later from The New York Times, CNN, The Miami Herald and Crain's New York: Barack Obama will be our next president.

I can't say I'm surprised. The poll I've been conducting on this page put him 10 points ahead of John McCain. And that's with a sampling size of 22 people. Julia Stewart landed two votes, by the way.

10:12 Oklahoma, Florida
CNN has just projected that Dan Boren, a co-owner of two Roly Poly quick-service outlets, has kept his House seat for the second district. A Democrat, Boren won almost three out of every four votes cast (71 percent).

The vote was closer in Florida, but racetrack concessionaire Tom Rooney still won the House seat for the 16th district by considerably more than a nose. The Republican challenger is projected to win with 60 percent of the vote. He beat Democrat Tim Mahoney, who had been funded by the National Restaurant Association's Political Action Committee.

8:54 General observations
I didn't vote tonight until about 7 p.m. The volunteer who checked me in at the neighborhood firehouse said the traffic was about triple the norm.

It's kind of a surprise that so many people were still sober by that time. I was one of the few NRN staffers who was not going to watch the returns on a barstool. It's the sort of thing my co-workers normally do during March Madness, the World Series or the Olympics. Then again, Tuesday is sometimes enough of an excuse for some pub time. It must be that whole "third place" social phenomenon.

8:30 Florida, Oklahoma
The industry's candidate in Oklahoma, Democrat Dan Boren, is looking like a shoo-in. Only 2 percent of votes have been counted, but Boren, an investor in Roly Poly wrap shops, is leading Republican Raymond Wickson by a 69 percent to 31 percent margin.

Things are much tighter in Florida, however. With slightly more than a fifth of the votes counted, dog-track concessionaire Tom Rooney (of the Pittsburgh Steelers Rooney's) has 54 percent of the ballots, compared with incumbent Timothy Mahoney's 46 percent.

Results thus far suggest Rooney could be an exception to a Republican backlash. As of this moment, two Democratic restaurateurs have been projected as the winners of their respective races, and Boren would make it three. Might the tide be hurting Rooney?

At Nation's Restaurant News' MUFSO conference in Washington, D.C., industry lobbyists speculated that the Democrats could pick up 10 Senate seats and 20 slots in the House. The early counts haven't disproved those forecasts.

8:00 Kentucky
CNN has projected Yarmuth as the winner in Kentucky.

7:36 Virginia
Mark Warner, a co-owner of Majestic Cafe in Alexandria and the former governor, has been declared the winner in the race for the Senate seat that had been vacated by the retirement of the legendary John Warner (no relation). Mark Warner is projected to have beaten Republican contender James Gilmore III with 57 percent of votes.

7:26 Kentucky
John Yarmuth, the Republican incumbent from the third district, is creaming challenger Anne Northup, 57 percent to 43 percent, with 42 percent of precincts reporting. Yarmuth is a part owner of the Sonny's BBQ chain, which his brother serves as chief executive.

Follow the election from a restaurant perspective

2008-11-04T18:51:00.001-05:00

I'll be blogging live tonight to cover the races where restaurateurs will be vying for a ticket to Capitol Hill. Check back as soon as the results start rolling in.

McCain vs. Obama: What's a restaurateur to do?

2008-10-31T07:56:00.001-05:00

With the presidential election just a few days away, we at Nation's Restaurant News decided to present this story from the issue that publishes Monday. It covers a debate we coordinated at our MUFSO conference specifically to help restaurateurs decide who'd be better for their businesses, John McCain or Barack Obama. It's being posted here in hopes of providing the industry with fodder for thought for those members who are still conducting their own internal debate as to which contender should get their vote (and if you want to practice, take our poll to the right).

Washington – A MUFSO debate between stand-ins for the U.S. presidential candidates proved as contentious as the actual face-offs between Barack Obama and John McCain, with the participants disagreeing on everything from Sarah Palin’s competency to what makes a good Oval Office occupant.

The two-person teams squabbled over such issues as which candidate offered the best prospects for small businesses; how much the financial crisis should be weighed in picking the next president; which contender was more of a capitalist; which candidate would surround himself with better people; and, in a strange twist, which of the two had mentioned Warren Buffett first during a televised debate.

Both sides included a one-time restaurant company leader who had sold his charge in the last few years: former Cold Stone Creamery CEO and chairman Doug Ducey, representing McCain, and Phil Hickey, who held the same posts at former LongHorn Steakhouse parent Rare Hospitality, speaking on behalf of Obama. Each was teamed with someone with a legal background. Melissa Rothring, the former executive vice president of legal affairs for current Cold Stone owner Kahala Corp., rounded out Team McCain. Cathy Hampton, the former general counsel of Rare and now a full-time volunteer in Obama’s campaign, joined Hickey.

Both sides offered assertions as to how the winner might affect the restaurant industry. The only concurrence seemed to come on the overarching question of which side had the best candidate. Both teams readily insisted they did.

Team McCain portrayed their candidate as the better capitalist, leader, commander in chief, decision-maker and independent thinker. “This guy’s a survivor, he’s a leader, and he’s always been mission-driven,” said Ducey, a resident of Arizona, which McCain represents in the Senate.

Teammate Rothring acknowledged that she had been drawn to McCain “by gut instinct.” But, in preparation for the debate, “I went to a website and looked up the issues. The common thread I saw with McCain is that he is a capitalist.”
She lauded the Republican candidate as someone who was likely to slice corporate taxes, cut the estate tax and lower the exemption on that industry-hated measure, push for tort reform, and seek a permanent research and development credit. All of those measures are favored by the restaurant industry.

In contrast, she asserted, Obama would push for a $9.15 minimum wage, unionization, paid sick leave, a rise in corporate taxes and the real estate tax, and a health care proposal that would cost “10 percent of your payroll.”

Team Obama’s Hampton challenged those assertions. “Just this weekend Sens. Obama and [vice presidential candidate Joe] Biden revealed their plans for small businesses,” she calmly retorted. “What they’ve done in their plan is direct money to help small businesses. One thing is to take away — completely eliminate — capital gains taxes for investing in small businesses.” She also cited a $3,000 tax credit for each new full-time employee a small business hires during the next two years.
“We’re talking tax cuts for 95 percent of hardworking families in America, and tax cuts for 98 percent of small businesses,” Hampton said.

Hickey professed to “take it up to the taller trees,” where he could see a bigger picture. Explaining that he’s a registered Republican who has contributed more than $1 million to industry lobbying and campaign efforts, he recounted that he was a staunch McCain supporter in the 2000 campaign.

Yet, he continued, the country has had eight years under a Republican Administration, “which was voted for by most of us. Let me ask you, how are things today? How’s your business? How’s that working for you?” His rhetorical questions came as the industry was contending with a pronounced downturn in sales, profits and traffic.

“My sense is, an Obama presidency would deal with bigger issues that would ultimately help our businesses,” Hickey said.
He cited such pressing concerns as the energy situation and the high gasoline prices that have resulted. “The leadership on that has been lacking,” he said. “As a result, it’s come out of control.”

Overall, he said, “The underpinnings of the economy are very uncertain. Who do you trust to lead for the next four years in the U.S. economy? Who do you trust to fix this?”

One of the constant points of contention during the hour debate was how much the economic crises should factor into a voter’s choice of candidate. The session was conducted after one of the worst weeks Wall Street had ever seen, and a day after the Bush Administration disclosed plans to buy stakes in nine banks as a recovery measure.

“Two years ago, we were all pretty happy with the economy. The issue was Iraq,” Ducey said. The economy “is unraveling, but it’s really all about housing. Once we get through the housing part of it, what will we have?”

He suggested, “People may go back to, ‘What are these issues?’ rather than, ‘What are these crises of the moment?’”
Team Obama would have no part of that. “I really wish we could turn the page on the economy, but it’s very hard to do that,” Hampton said.

Hickey asserted that the economy was an attitude-changer, not a short-term distraction. “There’s a strange dynamic in this room, in that there are a number of Republicans,” he said. “My support for Obama started out in the minority. But other people have come up to me and said, ‘I just can’t go there. I just can’t vote for McCain.’”

The debate was moderated by Nation’s Restaurant News editor Ellen Koteff.

Clearing the smoke from product intros

2008-10-28T21:20:00.000-05:00

Enough with the handicapping of the presidential election. What we really need is an analysis of what this week’s menu changes mean for the country.

Let’s start with the scheduling. Once upon a time, restaurant chains would schedule their menu overhauls to correspond with the seasons—salads and beverages added in the summer, heavier fare like soups and stews featured in the fall and winter. Now chain parents are announcing menu changes either right before or immediately after releasing poor financial results.

Earlier this week, for instance, DineEquity announced that its IHOP brand had added Coffee Cake Pancakes. Simultaneously, the franchisor disclosed that its losses had deepened to $16.4 million. It was as if the company expected investors to say, “Whoa. Who cares if the company lost money. IHOP has Coffee Cake Pancakes!!”

Similarly, Popeyes parent AFC Enterprises disclosed last Friday that its domestic same-store sales for the third quarter had slipped 2.8 percent. On Monday, Popeyes announced that it was adding a new bowl meal and a chicken sandwich—the foundations of what the chain trumpeted as a whole new menu platform.

Is the new trend to use menu additions as a distraction from bad financial numbers? Two instances would’ve been merely a coincidence that suggested no. Then came today’s one-two announcements from Denny’s. In the morning, the company crowed that it was updating its late-night Rockstar menu with items supposedly developed by stars like Katy Perry, Taking Back Sunday and Hoobastank. Hot-selling rock bands, working together in their kitchens to come up with items like the Melty Grilled Chicken and Sausage Quesadilla. Sure, I buy that.

Nevertheless, roughly eight hours later Denny’s released its third-quarter financial numbers, including a 6.1-percent drop in same-store sales for franchised restaurants and a 2.7-percent decrease for company-run units. If three instances suggest a trend, we’re there.

Yet my smokescreen theory is severely undercut by Denny’s profits. Net income more than doubled, to $10.6 million. Why blunt good news like that with yee-haws about the new Hooburrito, supposedly a brainchild of the band Hoobastank?

Denny’s may be an exemption to that trend, but it certainly fits another pattern in how chains are announcing new products these days. Not so long ago, they tended to introduce a whole new menu and stress the additions. Afterward, they might’ve showcased a limited-time offer now and again. The introductions were either grouped together into one event of note, or peppered over an extended period in a bid to stay top-of-mind.

Contrast that with the approach that was taken yesterday by Jack in the Box. The (now) multiregional burger chain announced at 9 a.m. East Coast time that it was resurrecting its Teriyaki Bowls line; at 12, that it was bringing back its Mini Churros; and at 3:30, that it was introducing two new “homestyle” chicken sandwiches (translation: sandwiches made with fried chicken) in its central and southeastern regions. What would have normally been one news item became three web postings. Which, presumably, was exactly the point. By staggering the release of three separate press announcements, it garnered at worst a story and two updates, and at best three separate articles, without a penny in ad fees. Pretty smart.

And what of the products that were added this week? Clearly they prove that “new” is a relative term. Popeyes declared its new meal in a bowl to be new, but it’s been featuring similar items for years. And its new Big Easy chicken sandwich sounds exactly like an item it’s carried for some time.

And, with all due respect to Melty quesadilla creators Taking Back Sunday, or Hooburrito midwives Hoobastank, those items aren’t exactly groundbreakers.

Need we point out that two of Jack in the Box’s three menu additions were resurrected products, and that the third sounds conspicuously like McDonald’s chicken biscuit sandwiches?

So, what does all of this mean for the country? Clearly the emphasis is on recycling retreads, which raises some alarming questions about levels of creativity. But then again, the industry is showing surprising innovation in the most mundane of areas, how product introductions are handled. Business may be down, but it’s hardly lacking in craftiness.

The industry's knee-deep--in fertilizer

2008-10-27T20:49:00.000-05:00

For a preview of the renaissance that’ll up-end the restaurant industry in a few years, look to a shuttered dinnerhouse in Spartenburg, S.C.

After 29 years in business, the Steak & Ale there died with the rest of the brand this summer, locking its doors to the 50 or so employees before they mustered for a shift that could’ve been a replay of the prior day’s, and probably the day’s before that. Later this week the place will fire up its grill again, this time as Steak and Spirits, with many of the former employees back in their familiar roles. Yet they’ll hardly be aiming for business as usual now that they’re the ones deciding what’s best for guests and the operation. All those ideas that arise from talking with and serving patrons can actually be implemented, instead of dying in some corporate suggestion box.

“Now that we’re not corporately owned, we have the freedom to do some things,” past and future manager Carol Easler told a local news media for a story.

Easler and her reassembled team will indulge their pent-up entrepreneurship because the new backers apparently appreciate the staff’s intuition for what works, what doesn’t, and, most important, what guests really want. The same dynamic will likely come into play as the economic downturn erodes the corporatism that has homogenized casual dining into the foodservice equivalent of rice cakes—plain, unsalted rice cakes. A death knell for hidebound restaurant companies will undoubtedly put restaurant operations within the grasp of more free thinkers, if not downright radicals. With sites becoming affordable and new ideas trumping big-company resources with a public craving originality, we’re heading into a period of unparalleled creativity for the business.

It’s exactly what happened after the economic shin kick of 1991. If memory serves me correctly, the IPO class of ’92 included Outback, LongHorn and LoneStar, to name a few high-flyers of the next decade. At the time, each brazenly shot a finger at the status quo. Now they’re as subversive as a powder-blue leisure suit.

It’s a shame that the industry has to lapse into shambles for a new generation of innovators to arise. But does anyone doubt that it’s long, long overdue?

Sighs of the times

2008-10-23T12:00:00.003-05:00

This is an entry about the economy, but it poses as a lapse into what blogging’s detractors call The Cheese Sandwich Syndrome. They bemoan the tendency of many bloggers to recount the mundane aspects of their lives—i.e., “Today I had a cheese sandwich”—in the mistaken belief someone cares. But you might be interested this time if you’re one of the restaurateurs who’ve been contending the economic crisis of the last month has largely been contained to the financial world. “Wait until it hits the general public,” they warn. Based on my experiences of the last few days, we’re already there, folks.

As my bio notes, my wife and I share our house with three greyhounds that were retired from racing. On Monday we were asked to take in a fourth because its adopter had been evicted from her home because of a change in her economic situation. The dog is 12 years old, which means she’d had him for at least seven years, and possibly a decade or longer (greyhounds can only race between ages 2 and 5, and rare is the dog that stays competitive for that long.) Jim B. also has some health issues. The woman had to give up Jim, her lone companion, because she couldn’t afford to keep him.

It’s the sort of story my parents would tell about the Great Depression.

That’s Jim to the right, by the way.

Taking care of him requires a fair amount of time, which has been in particularly short supply since Monday. That’s because much of the last few days has been spent in conversations with friends who’ve lost their jobs or key clients and are looking for leads. Each is a highly qualified individual whom I’d hire in a minute, and unemployment is as novel for them as it is unpleasant. These are victims of the times, not symptoms.

A looming economic crisis? I suggest you look out your door. The crisis is here. The question is, how much worse will it get?

‘Clean-up attempt on Aisle 5’

2008-10-22T17:48:00.000-05:00

An army of cliches gave their lives during our recent confabs to alert restaurateurs they’re in the bomb sights of a rival they probably discounted long ago. The new mantra of that resurgent enemy should’ve readily done the job: Restaurant meal replacement. It underscores how determined the grocery business is this time around to take away restaurants’ lunch, dinner and breakfast sales.

But back to a moment of silence for the clichés that are no longer with us. Topping the casualty list is “share of stomach,” the clever tag for the struggle between restaurateurs and grocers for the public’s food outlays. That battle, the supermarket business realized, lapsed into a one-sided contest long ago. Smart grocers have left such conventional warfare to the retrogrades who still believe they can trump restaurants with clamshells of Buffalo wings stacked in a refrigerator case (“Best sold before 2010”), right next to the vintage sushi.

The new grocery militia has also given a blindfold and last cigarette to the old adage that they have to beat restaurants at their own game. The often-tried strategy of bolting a restaurant onto the public’s source for Metamucil and Handi Wipes just hasn’t worked. As menu watcher Nancy Kruse suggested during our MUFSO conference, dates are seldom wowed by dinner at a Piggly Wiggly, even if the moonlight hits the plate glass just right.

But, Kruse stressed during that convention and our Culinary R&D conference a week earlier, regional and upstart grocers have quietly mapped a more effective strategy, in part by enlisting chain menu planners in the brainstorming. Whole Foods’ development of ready-to-eat meals, for instance, is being handled in part by Tina Freedman, a longtime veteran of the Fresh Choice buffet chain’s test kitchen. Fresh & Easy, the fast-growing American outpost of British retailing giant Tesco, has entrusted its R&D efforts to chef Michael Ainsle, who apparently coined the battle cry of “Restaurant meal replacement.”

That term, of course, is a rewrite of the label Boston Market gave its targeted market back in the days when it was still the concept that was going to upend the industry. Asserting the brand didn’t really compete with conventional restaurants, executives cited their strategic objective as “home meal replacement.” For the year or so that Boston Market continued to fly high, it was the buzz-phrase that captured the industry’s attention. Today we forget that Boston Market-inspired concepts were tried by McDonald’s, Brinker International, Cracker Barrel, Hardee’s (through its Roy Rogers holding), Arby’s and Ruby Tuesday (through Morrison’s), to name just a few converts. They were convinced the future would belong to a concept that could combine restaurant-quality meals with the convenience of takeout and the lower prices of groceries.

Another cliché that should be taken behind the barn: Be careful what you wish for.

As Kruse noted during her “State of the Plate” presentation at MUFSO, some supermarkets have finally mastered that alchemy. Because a consumer tends to shop for groceries about four times a week, food stores have the convenience factor wrapped up. Grocers foolishly figured shoppers would buy basically anything carbon-based for a heat-and-eat dinner, since they’re in the stores anyway. Who cared if the meatloaf was older than their kids, and roughly the color of a bruise.

Casualty No. 14: “If you stock it, they will buy.”

But now, Kruse observed, progressive supermarkets are delivering the quality and freshness that weren’t there during the Era of Rotisserie Chicken, the long stretch when store meals were merchandised no differently than mop heads or turnips. She noted that some restaurant chains are putting grocers like Ukrop’s on their list of direct competitors.

Perhaps that’s because grocers are starting to eat restaurants’ lunch, at least at dinner. Kruse cited NPD/Crest data that shows restaurants’ evening share of stomach—sorry, proportion of all supper opportunities—as slipping between 2001 and 2006. She also mentioned NPD’s finding that consumers are dining at home more often to economize, not only on their meals, but on their gasoline usage. If they’re going to be in a supermarket anyway to pick up staples like bread, milk or cereal, why not grab a dinner that involves no tipping or a separate trek to the mall?

Among the more surprising indications to arise from the enemy camp, Kruse added, is an intention by the grocery chains to elbow their way into the away-from-home breakfast market, a major area of growth for quick-service restaurant chains. Retailers have apparently been getting up before their stores open to count the cars lining up at drive-thrus. A push for that market would change the game, since grocers would have to position their outlets as a morning destination, not a place to grab a meal while you’re there for other reasons.

Which brings us to an old expression that most restaurateurs would probably like to put on the list of cliché casualties, but definitely won’t find for some time: May you live in interesting times.

Restaurateurs for Obama?

2008-10-15T16:57:00.000-05:00

When Chris Matthews took the stage at MUFSO, he jokingly asked, “Any Republicans in the room?” Even outsiders know the industry of inclusion is a lot more single-minded when it comes to politics. But clearly a few Obamanacs have snuck under the tent, and the number will likely grow as the recovery plans issued this week by the presidential candidates are digested by the industry. At least on paper, Barack Obama seems to have the better prescription for a wheezing restaurant business.

For one thing, he’s proposing that employers be given a $3,000 tax credit for each full-time employee they hire over a two-year stretch. Repeatedly during MUFSO, executives cited a need for talent at all levels of their organizations as Priority No. 1. Couple that with all the people who are being displaced from their jobs by the economic meltdown, mix in the Democratic sweetener to hire, and you’ll likely have a lot of pleased restaurateurs.

What’s more, Obama’s plan would eliminate capital gains taxes on investments in small businesses. That provision could be a stout wrench in re-opening a rusted-shut capital pipeline.

That could get enough credit flowing for restaurants to makeover their current restaurants and even build some new ones. If they do, Obama’s plan would grant them a $250,000 write-off on the investments through 2009.

Ironically, John McCain’s plan is far more focused on consumers than Obama’s business-centric proposal. The Arizona senator wants to ease the plight of restaurants’ customer pool by allowing people to tap their retirement accounts now without paying an income tax rate that sounds as if it was a vig set by Louie the Horse. Up to $50,000 could be withdrawn during the first two years at a rate of just 10 percent.

The Republican also proposed that the capital gains taxes on stocks and other investments held for a long time be cut in half, to 7.5 percent. That, too, could help consumers enhance their liquidity, as the financial types say.

But other provisions of the plan are designed to encourage saving, not spending. This is just a guess, but restaurateurs probably don’t want at this point to see consumers socking away more dollars that might otherwise go into their tills.

Is it any wonder that some industry executives are openly voicing sympathy for the Democratic candidate—correction: for Barack Obama—as the election approaches?

“I’m a registered Republican,” said Phil Hickey, an unrepentant capitalist who, by the best of our recollection, made upwards of $30 million when he sold the company he led, Rare Hospitality, to Darden Restaurants in a multi-billion-dollar deal last year. “My family’s maxxed out on the Ed Tinsley campaign (a push to turn restaurateur and National Restaurant Association director Tinsley into a Republican Congressman from New Mexico). I’ve sent (industry lobbyist and leftists’ scourge) Rick Berman almost a million dollars in checks over the last 10 years.”

Yet, Hickey stressed from the stage at MUFSO, he’s pushing for Obama on Nov. 4. Indeed, Phil agreed to serve as the Democrat’s proxy in a debate NRN staged during MUFSO (Doug Ducey, the former CEO of Cold Stone Creamery and an Arizona resident, served as the main advocate for McCain.) In normal times, arguing for the policies of a Democrat is akin to wearing pork chop cufflinks during a visit to an attack dog school.

As Hickey noted, the country has had eight years under a Republican Administration, “which was voted for by most of us. Let me ask you, how are things today? How’s your business? How’s that working for you?”

It’s now a cliché to term the industry’s economic plight a perfect storm. Regardless of whether or not you agree with Hickey’s choice for president, you have to agree that his question merits asking. Voting for a Republican in knee-jerk fashion just doesn’t make any sense during times like these.

Live from MUFSO, Day Two

2008-10-14T07:07:00.011-05:00

This is being written live from the Washington, D.C., ballroom where some 600 chain-restaurant leaders have gathered for their annual download of ideas, insights and connections. For the complete thread of what's happening at MUFSO, read from the bottom up.

Tues., 11:20
The panelists' advice to a young person who wants to evolve into a leader:

"Find someone who can mentor you and work with you closely."--Wingstop's Flynn

"Pay attention to detail."--BJ's Deitchle

"Be a teacher."--Kenneth Pondery, CEO of First Watch

"Hire good people, listen to them, be very clear about what you want them to do, and respect them."--Puzder

"In order to grow your business, you have to grow yourself. Study constantly. Read books. Go to seminars. Look at every aspect of your business. Master your craft by developing yourself."--Joseph Tortorice, presidet, Jason's Deli.

"Take a risk."--Greg Creed.

Tues., 11:06
Is there a disconnect with reality here? As someone just asked from the audience, how can the heads of six major chains say they're not worried about the economy, as the panelists have repeatedly professed?

Given that food is not a luxury, there's no need to be on suicide watch, one of the panelists explained. "If I was selling Mercedes-Benz, if I was selling jewelry, I'd be worried," said CKE's Puzder. "But I'm selling fast food. If that soccer mom stops coming into Carl's Jr. for a burger, then our economy would be in worse shape than I thought."

Greg Creed, president of Taco Bell: "You can't go to a supermarket and get the ingredients and make it yourself for what we charge."

Puzder again: "We think next year will be a good year for this industry and a good year for us."

Doherty: "I don't know about the audience, but I'm surprised there's not much gloom and doom up here. There's just some problems that have to be worked through."

Tues., 9:40
Andrew Puzder, CEO of Carl's Jr. and Hardee's parent CKE Restaurants: "Our margins have improved for each of the last four quarters." But, he acknowledged, "Our margins are certainly not what they were in 2006." One of those statements was not a surprise.

Puzder recounted how CKE's purchase of Hardee's "crippled" the company, driving its stock price down to $2 from the low 40s. He was the general counsel for the company at the time, and the problem was apparently tossed onto his lap. Under his leadership, the company's concepts are now outpacing most of their competitors.

Puzder just noted how one official of CKE has just instituted a rule that new hires in his area be able to speak English, an unimaginable requirement in the tighter labor market of a year ago. That policy was also mentioned by a panelist yesterday, for the same reason. The greater availability of English-speaking hourly talent seems to be an overlooked silver lining of the current economic storm.

Tues., 9:32
Jim Doherty, Nation's Restaurant News' group publisher and moderator of the Presidents' Panel, has just asked the five CEOs on the panel about how much time they spend in their chains' units. The lowest figure was 20 percent of the time; the highest, 50 percent of the time.

Tues., 9:27
Flynn has just recounted a few details of working at Popeyes when the concept's eccentric founder, Al Copeland, was still involved. He noted that he tries to be at his desk by 5:30 a.m. Copeland would routinely roll into the office at 3 or 4 p.m., Flynn explained.

Copeland, who died a few months ago, has come up a number of times in conversations here at MUFSO. One of the more interesting mentions was a ghost story starring Al. It seems that some AFC veterans went to Copeland's funeral, where a priest recounted how Al traveled through Europe toward the end of his life, looking for a cure of the rare cancer that had afflicted him. Among the stops was Lourdes, a major shrine in the Catholic faith because the Virgin Mary is said to have appeared there. A priest accompanying Copeland said he looked over at one point and saw a woman kneeling by Al's wheelchair. When he looked back, the woman was gone.

The caravan-for-a-cure continued on to Germany, where Copeland visited another place that was known as a site for miracles. The priest saw the same woman again, kneeling once again by Copeland's wheelchair. Once again she disappeared.

Tues., 10:22
Bingo: Jim Flynn, CEO of Wingstop, just noted that he's a graduate of the Naval Academy. He made reference to serving on submarines. Flynn was asked if he knew John McCain, since their attendance of Annapolis apparently overlapped. Flynn drew a laugh by divulging that McCain had a reputation of being an avid hazer and hellraiser.

Tues., 10:12
The Presidents' Panel, traditonally one of the true high points of MUFSO, has just begun. This year's panel includes Jerry Deitchle, CEO of BJ's, who just mentioned something that's often overlooked when industry veterans talk about what makes a successful chain CEO. Deitchle, like so many of his peers, spent some time in the military. It's a common trait of industry leaders, whether we're talking about Norman Brinker, Joe Lee, Roland Smith of Arby's or Jim Skinner of McDonald's.

Tues., 9:30
A gem from Jim Sullivan: "Look, it's no secret today that things are tougher than a woodpecker's lips."

Tues., 9:20
An interesting statistical tidbit from the presentation of the Spirit Awards, an honor bestowed on outstanding foodservice employers: The average turnover of hourly employees within fine dining is 102 percent. Morton's, the winner for that segment, has brought down its churn to 39 percent.

Tues., 8:40
Motivational speaker Marcus Buckingham is on the stage. Having seen Marcus before, I'm not feeling motivated, though he's clearly resonating with the crowd. But perhaps this affords an opportunity to present two informational gems from yesterday's sessions. Both came from Kent Rathbun, chef-owner of the Jasper's high-end restaurant chain. The concept had been chosen by NRN's editors as one of the year's hottest concepts.

During a panel of those concepts' operators, Rathbun noted in passing that Jasper's had cultivated a nice little niche business with private-jet catering. Its home base of Dallas, he explained, is surrounded by small airports that serve the executive traveler who has her or her own plane. As he noted, the downturn really hasn't put much of a crimp in their spending. Rathbun said he reaches out to the personnel at the airports, who are often asked by the jets' passengers and crews about where they could get a good meal. Jasper's has taken steps to make sure it's the concept that's named.

Rathbun also offered some insights into music, a key component of ambience that's often overlooked by the style addicts who notice things like color patterns or staff uniforms. Rathbun acknowledged that the element is important enough to merit his personal attention to the selections that play. His strategy is drafting four distinct lists--one each for lunch, dinner, after 8 p.m. and after 10 p.m. Each list steps up the intensity of the music both in volume and tempo, he explained. The energy-building process has been successful enough to prompt requests by patrons for the playlists.

Tues., 8:15 a.m.
The day is starting with a presentation from the National Restaurant Association about its revamp, the result of a strategic study that was expected to cost the organization in the neighborhood of $1 million. The plan calls for updating the association by focusing on four key areas. For a quick rundown, check out our story from this week's issue of Nation's Restaurant News. Link to it here.

Live from MUFSO

2008-10-13T12:27:00.007-05:00

Greetings from the ballroom where some 600 industry leaders have gathered for NRN's annual MUFSO conference. I'm going to provide the highlights, as well as an overall sense of the conference's mood, by live blogging for the first time. This is best read from the last posting up to the first.

Mon., 2:05
Tase noted that Wienerschnitzel has saved $125 per restaurant per month by swapping out its incandescent light bulbs for flourescent versions.

Ken Reimer of Baker Bros., the fast-casual deli chain, is echoing what other operators have said during MUFSO: Using standardized restaurant features can cut costs and construction times. Reimer said that many of his chains' units buy their supplies from Home Depot.

Leondakis said her company's fine-dining restaurants cut costs, not to mention water and detergent use, by foregoing tablecloths. She noted that restaurants are being designed with hardtop tables, even when they're position as a fine-dining choice.

Mon., 1:55
Denise Tase revealed that Wienerschnitzel is trying end-cap locations because of the lower costs. He noted that the chain will spend about $500,000 for one of those locations, turnkey, while the cost of a traditional store could run to more than $1 million.

Mon., 1:40
Among the fast-circulating pieces of gossip here at the conference is the departure of David Goronkin from Redstone American Grill, where he'd served as chief executive and president since early January. Goronkin had resigned the same posts at Famous Dave's of America to join the upstart Redstone concept, a venture of Champps founder Dean Vlahos.

Staffers in New York were able to confirm that Goronkin did indeed part with the chain last week. They're awaiting a callback to get the details.

Mon., 1:35
Niki Leondakis from Kimpton Hotels & Restaurants is offering the wartime perspective of fine dining. Discounting or deal-making "has to be more subtle," she explained. She recommended "doing anything that conveys a sense of value."

She addressed what she acknowledged is the fine-dining version of "bundling," where disparate elements of a meal are packaged into an attractively priced packaged deal. At Kimpton, that means combining a meal with theater tickets.

Similarly, she said, the company's in-hotel restaurants are going to local businesses and offering a discount to employees who come for a special "event." A slight twist, she said, was creating a Hungry Actors' Club, to draw in folks who are drawn by both the networking opportunity and the deal that's extended.

Among the new things Kimpton is trying is cutting the price of a bottle of wine in half.

Mon., 1:30
On stage are the three chain executives participating in our "Capital Ideas in Challenging Times" panel, a look at the tactics operators are using to weather the grueling current economic environment.

Dennis Tase of Galardi Group, parent of the Wienerschitzel chain, just touched on what has proven to be a theme of the conference: Discounting may get butts in seats today, but what's it going to mean when conditions improve? Won't it ultimately cheapen the concept? Will the discounting binge leave a hangover of sorts?

Clearly much of the industry regards that issue as purely academic; they're discounting like Christmas tree vendors on Dec. 25. Yet the question underscores the underlying optimism that the industry will rebound from the current mess. It's just a matter of time.

Reality bites

2008-10-12T19:38:00.000-05:00

A long-time acquaintance confided tonight that his restaurant company will soon have to cut its staff because of the economic situation. The operation is of a size, he explained, where he’ll have to let go friends and what he termed members of his family. He didn’t need to tell me how upset he is by the prospect.

Welcome to the restaurant industry post-meltdown. Tonight we kicked off our annual MUFSO conference with a slam-bang cocktail party featuring the specialties of Washington, D.C.’s top restaurants. The conversations were as varied as the drink orders. But sooner or later they tended to flit back to the issue of the moment: How bad is this economic situation, and when might the industry feel some relief?

There was hardly a uniform opinion on the when, though the consensus seemed to be that we’re many months away from relief—at best. And as for the depth of the downturn, the universal assessment could be summed up as a shrug. The one point of agreement: The situation is unprecedented. And I heard that from persons whose tenure ranged upwards to 24, 35 and even 50-plus years.

Undisputed was the notion the economy is in standstill mode until the public gains some confidence that relief is foreseeable. The hope for resolution has been tossed aside. Executives spoke wishfully of a change in the trend lines, never mind a solution.

Yet, virtually everyone stressed, the cycle will turn. It may be a different industry that enjoys the rebound—and certainly a smaller one, most agreed. It’s the pain many will feel between now and then that seemed to be the concern of attendees.

A Blum of an idea

2008-10-12T15:36:00.002-05:00

MUFSO hasn’t officially started yet, but it’s already clear that one issue will be hotly debated during the three days of the conference: Is Brad Blum crazy?

That seems to be the question on attendees’ minds as they register, grab a pre-conference cup of coffee, or bump into an editor as he drops bread crumbs in hopes of tracing his way back to whatever elevator serves the time zone where his room is located (the convention is being held in the Gaylord National, a sprawling, biosphere-like complex outside Washington, D.C.) A completely unscientific straw poll indicates the insanes have it, with only one dissenter contending that Blum showed true insight in choosing a “vertical sausage” concept as something to develop. That dissenter would be me, the crumb-dropper. And I’m convinced Blum is on to something big.

In case you missed our coverage, Blum is a former head of Olive Garden and Burger King. Lesser known within the industry was his key role in building a European market for the cereals of General Mills, the former owner of Olive Garden. All of those were huge jobs. But he largely dropped out of view after things went bad at Burger King.

Now he’s moved back into the spotlight with Dogmatic Gourmet Sausage System, a New York City restaurant he’s basing on a popular cart that operates seasonally in Greenwich Village, traditionally the city’s most avant-garde area. The place will feature six high-craft sausages made with ingredients that Alice Waters would sanction, like grass-fed beef or free-range chicken. That’s Strength No. 1. The halo of those more-natural foodstuffs are quickly coming to be appreciated by mainstream America—not Joe Sixpack, maybe, but perhaps his niece, Tiffany Apple-tini.

Another signature item will be organically grown asparagus spears. Outlandish, yes. But not a hard sell, not only bcause of the organic descriptor but also because asparagus is a known entity. We’re not talking about edamame or an acaci salad. That, I’m willing to bet, will become Strength 1.5.

And then there are the drinks—handmade soft drinks made from fruits along with high-craft sodas. That’s a solid Strength No. 2.

The sausage and asparagus will be served in an artisanal roll that’s toasted from the inside out from the insertion of a hot stake. The roll is configured so that the completed sandwich stands upright. Hence the vertical-sausage descriptor. And there we have Gimmicks 1 and 2.

Add it all together and you have a New Age-y concept with overtones of health, freshness, novelty, even Greenwich Village outlandishness. If the numbers make sense—admittedly, a big if; the prototype is being built in an ideal site off Union Square Park, one of the city’s high-rent districts—this could be something that catches on.

Blum has already indicated that he plans to parlay the initial restaurant into a national chain. We hear that all the time. But he has experience, connections and the chutzpah to give such a thing a try.

That’s why I’m saying it’s hardly an insane idea at all. Indeed, it’s one of the more interesting ventures the industry has seen in awhile.

Okay, back to dropping my bread crumbs. And I think I see a hungry bird flying around.

If you're interested in what our industry's leaders have to say about the nation's current plight, please check back here often. I’m going to try to blog as much as possible, including right from the MUFSO conference room.

What's in the headlines

2008-10-08T15:34:00.001-05:00

I thought the industry had used one of its three genie wishes when the story first appeared: Modern medicine had succeeded in transplanting an arm. Finally, a way for restaurateurs to get that oft-coveted extra hand.

It took less than a half-sentence to realize the recipient was receiving a replacement—two, in fact—rather than an addition. But it just goes to show how bizarre the word can seem when the perspective is based on headlines, or even the first few words of a story. Consider these recent reports, all of which actually appeared on the news wires:

“New study finds Americans still have harsh feelings toward tequila”

“Monkey works as waiter in Japanese restaurant”

“‘Tastes like Robitussin’/New item is so bad, our teeth started to hurt,” from an AOL review of fast-food items

“‘Testicle pizza,’ ‘battered testicles’ among 31 recipes in first ‘testicle cookbook’”

“Swiss restaurant to feature breast milk.” That’d be of the human sort, Garth.

“A goomba awaits you at this Concord restaurant”

“Magical veggie challenge to right musical wrong”
KNOXVILLE, Tenn. -- "Beans, beans the musical fruit ..." For years, children have recited this memorable schoolyard chant. In fact, three out of four adults recognize the classic bean chant. But most people don't realize something is amiss in the lyrics. Beans are a vegetable, not a fruit!

As Dave Barry would say, “Folks, we couldn’t make this stuff up.”

NYC's new anti-obesity message to restaurant patrons

2008-10-06T14:43:00.004-05:00

After the firefight over menu labeling, New York City knows better than to expressly target restaurants in its new push for healthier eating. But the products depicted in the campaign that commenced today aren’t exactly what you’d whip up at home for breakfast or lunch, unless you’re Rachael Ray or a chain R&D chef. The message of the Department of Health’s new ads is clear, even if the approach is coy: Think twice, or maybe a third time, before ordering that burrito, sub or muffin.

The ads started appearing this morning on city subways. New reports indicated that about every fifth car will feature the billboards, from now through January. An Associated Press report pegged the total “spend,” as they say in the advertising world, at $82,000.

“2000 calories a day is all that most adults should eat,” blares the placards, which will share subway real estate with ad space for impotence cures, English-language courses and dermatologists. Pictured below that headline are finger-foods that look decidedly restaurant-born. A flag in the items reveals the calories of each—475 in a muffin, for instance, or 1,170 in a burrito. One installment compares the calories content of a tunafish sub (530 calories) with a roast beef version (290 calories). “Choose less. Weigh less,” advises the ad copy. You can read it for yourself here.

The campaign carries the theme, “Read ‘em before you eat ‘em.” Clearly it plays off the city’s new menu-labeling requirements, which went into effect for some chain restaurants in April. Units of chains with at least 15 units nationwide are required to post calorie counts on their menus or menu boards for every item that is offered over an extended time.

Clearly the city is planning to call attention to the calorie counts by urging citizens to read them.

Lunch with Wendy's honcho, Friday's sauce on the side

2008-10-03T11:38:00.001-05:00

Several of us had lunch yesterday with Roland Smith, the new CEO of Wendy’s, who’s shouldering that responsibility while continuing to lead the Nelson Peltz-affiliated corporation that previously ran only Arby’s. Besides providing a guilt-free chance to indulge in a Double and a Frosty—hey, it was research—the sit-down at a midtown Wendy’s yielded a few guarded indications of what the chain’s new owner may do with its $2.3-billion prize. But even better was a reality check the unit’s franchisee gave us after Smith left, not so much about Wendy’s, but about general industry conditions and his other concept, T.G.I. Friday’s.

Here’re the highlights of what Smith had to say about Wendy’s and its new parent, Wendy’s/Arby’s Group Inc.:

• Co-branding is definitely in the works for the company's two chains, particularly in high-rent locations like the midtown location where we ate. Smith said the pairing of the concepts—separate kitchens, but paired menus sporting the signature items of each brand—would be especially synergistic overseas.

• The acquisition of other restaurant brands is definitely a possibility for Wendy’s/Arby’s. Smith of course wouldn’t be specific about the possibilities, but he said the company favors concepts that are viewed as quality providers. not bargain peddlers.

• Although the two concepts will be run as separate brands, without any sharing of "trade secrets" like menu products, personnel could be transplanted from one to the other as need and availability arise, Smith said.

• The emphasis for Wendy’s near-term will be on boosting profits. Smith remarked that Arby’s unit-level margins are among the best in the business. Wendy’s was once up there as well, he said, but the profitability of company units slipped, with margins now falling below what franchisees have been able to maintain. Not that licensees are content with their incomes, either, he suggested. Asked for the top three present-day concerns of Wendy’s franchisees, Smith counted them off on his fingers: “Profit, profit, and profit.”

• Wendy’s and Arby’s may indeed cross-franchise, so an operator of one chain could open units of the other if the situation would be appropriate.

As we were leaving, we were asked about our meal by someone who was obviously a person of authority, but just as clearly not a part of Smith’s posse. Turns out he was the franchisee, Brad Honigfeld, CEO of multi-brand The Briad Group.

Honigfeld said he was optimistic about Smith and the change in ownership, and praised in particular the selections of David Karam as Wendy’s new president and Steve Farrar as the new COO.

He voiced more concern about his Friday’s restaurants, noting that Briad is that chain’s largest franchisee. Stores in Arizona are running 25 percent below what they were a year ago, he lamented.

Bakery-café concepts like Panera are stealing the lunchtime customers of casual chains, Honigfeld explained, and the battle for dinner patrons is just brutal. He dismissed discounting as the way to go, suggesting instead that the established players in casual dining need to re-invent themselves.

Perhaps not coincidentally, he revealed that Briad has just signed on to become a franchisee of Corner Bakery, a competitor of Panera.

Honigfeld also noted that his Wendy’s units in the New York area have been doing well, but that Briad’s restaurants on the West Coast suffered a “significant” decline last month. He called it a sign of things to come, which I took to mean the chilling effect could roll eastward.

Watch what you insinuate, John

2008-10-02T13:27:00.000-05:00

It’s bad enough the presidential candidates exploit their families, friends and supporters in the lunge for votes. Now they’re going after one of our own. On Tuesday, John McCain threw the venerable Sonic chain under a bus so he could sound wise and statesman-like.

“If we do nothing, many businesses will fail,” McCain said in a mass e-mail to supporters after the House of Representatives rejected the $700-billion bailout package. He then cited Sonic’s problem in securing capital from a usual source, GE Capital. His implication was clear: The corporation could become a casualty of the financial mess. That’s at best an overstatement, and at worst a calculated misrepresentation of the franchisor’s stability, made either way for political gain.

In covering companies with financial problems—something Nation’s Restaurant News is doing with increasing frequency these days—we’re painstakingly careful not to suggest that a concern could be going under, unless of course it’s actually filed for bankruptcy. At the hint of a business failing, suppliers might deny credit, loans could be called, prospective franchisees could pass on a contract, landlords could choose another tenant, and new hires might decide to work elsewhere. It’s the business equivalent of declaring someone a criminal because suspicions have been raised.

McCain apparently doesn’t share that compunction. He went ahead and affiliated Sonic with catastrophe, when the facts don’t warrant that assertion. Ironically, Sonic CEO Cliff Hudson spent part of the next day joining with other business leaders from the chain’s home state of Oklahoma to lobby for the bailout package, the very intention of McCain’s e-mail blast. There was no need for the senator to raise the possibility of failure to get his point across. He could have merely cited the importance of the package to Sonic, and left it at that.

Instead, he demonstrated the sort of self-serving, exploitative politicking you don’t want to see in a leader who needs to inspire.

A big caveat on menu labeling

2008-09-29T10:29:00.000-05:00

The country is obviously tipping toward menu labeling, with mandates pending on the federal, state and local levels. But one of the nation’s most celebrated thought leaders is swinging in the opposite direction after discovering a hidden risk firsthand. Harvard University has pulled the nutrition information it formerly displayed in its foodservice operations because the disclosure of calorie counts could aggravate students’ eating disorders.

“Specifically, we needed to address the challenge a quiet and surprisingly large contingent of our community faces with eating disorders,” Ted Mayer, the executive director of Harvard’s dining services, said in his blog. “Those individuals can place an undue emphasis on calories and other literal food values, making their placement over every food item a real challenge. Thus, we did what we felt best addressed the special health needs of those individuals, much as we support people with food allergies or religious dietary preferences.”

Detailed nutrition information on what’s offered at the facilities is still available from the school’s website and onsite kiosks.

Posted comments on the decision have been mixed. Some students asserted that the situation mandates more effective counseling for persons suffering from eating disorders, not the removal of information that could benefit far greater numbers of people.

They also blasted the alternative of making nutrition information available via computers, noting that their meals are often a hurried, spontaneous affair. That objection could be echoed as the industry tries to deflect demand for on-menu postings by promoting online or kiosk postings as replacements.

The White House story that wasn't

2008-09-25T11:05:00.000-05:00

Colleagues attending the National Restaurant Association’s Public Affairs Conference alerted us Tuesday that a big story was shaping up in the host city, Washington, D.C. The Bush Administration had invited 200 restaurateurs from the conference to visit the White House Wednesday for an announcement from the President of a significant policy initiative. It had to be something of import to restaurants and other small businesses, or why would the attendees be summoned to serve as a backdrop? We geared up for what we thought would be a very newsworthy political development.

A few hours later, deputy managing editor Paul Frumkin called again from the PAC meeting: The White House had cancelled the invitation, saying the reason would become obvious. Clearly something bigger had trumped the meeting at 1600 Pennsylvania Avenue.

We now know that big development was Bush’s decision to address the nation last night about the bail-out package pending on Capitol Hill. What’s still a mystery is the policy initiative he was going to announce. NRA officials indicated that it would be of importance. But that covers a lot of ground, given how many industry-related political issues were apparently covered at the PAC conference.

All we can say is, Stay tuned.

Boobs for sure

2008-09-23T18:07:00.000-05:00

PETA has either lost what little reason it had left, or it’s become the victim of an outstanding hoax. The news wires were humming this evening with the hard-to-believe story that the animal-rights zealots had asked Ben & Jerry’s to use human breast milk in place of the bovine sort in its ice creams. Funky Monkey indeed.

“If Ben and Jerry’s replaced the cow’s milk in its ice cream with breast milk, your customers—and cows—would reap the benefits,” explained a letter from Tracy Reiman, executive vice president for the group. “The breast is best!”

She stopped short of volunteering her services.

But Reiman did explain that dairy cows are kept pregnant to maintain their milk production, with considerable wear. It also noted that male calves are turned into veal because they don’t generate milk, a key biological fact that Reiman noted in her letter. Presumably some of the males are needed to make more baby cows, but there was no verification in the note.

The letter was sent to the ice cream chain’s co-founders, Ben Cohen and Jerry Greenfield. You can see it here, along with the press release that PETA distributed.

Toss those trays

2008-09-21T08:18:00.002-05:00

College foodservice is often the incubator for trends that eventually spread into the restaurant mainstream. If that tradition holds true, get ready for two changes in the business: The end of the restaurant tray, and the emergence of a new foodservice position called “the forager.”

Dennis Pierce, the diretor of dining services for the University of Connecticut, provided a preview of both changes during the Food Safety Symposium on Sunday (see earlier posts for some context).

The forager, he explained, is a position that’s arising as a result of interest in procuring local produce and ingredients. “It’s someone who has a culinary background, as well as a procurement background,” said Pierce.

Because localized purchasing can require menu re-engineering, he continued, restaurants will need someone with the ability to adjust recipes or tweak the bill of fare as supplies change with the growing seasons. But at the same time, he noted, that person has to know how to adjudge how much of a local item will be needed, and where to get it a feasible price.

Pierce cited the hypothetical example of adding locally grown garlic. The forager would have to know what's needed, in terms of volume, and how to get it.

The other trend, he said, is already well underway in college dining. “If you’ve not heard about this,” he said, “you will. It’s trayless dining.”

He recounted how Middlebury College had eliminated trays from its feeding facilities as a way of saving water in its cleaning operations. That prompted UConn to give it a try last semester. For a week, two dining facilities operated as usual, but with Pierce and his team studying and apparently benchmarking certain variables. The next week, they educated the students about such issues as water conservation. The third week, they stopped using trays.

“We discovered that we had 900 lbs. less of food waste and saved 2,000 gallons of water,” he said.

That prompted the school to pull trays this semester from dining facilities that cater to freshmen, since they’ve not yet been accustomed to using trays.

Pierce also described the college’s newest sustainable venture, the use of a “pulper” to convert food waste into compost material, which the school plans to sell. The waste is pulverized and dumped into a bin, which is then heated. It apparently consolidates into what looks like dirt.

He also recounted the school's experiences with bee hives. It's already put in 10 hives, and is harvesting hundreds of pounds of honey. Ten more are coming. UConn plans not only to use the honey as a sweetener, but also to sell it in convenience stores.

Putting a face on food safety

2008-09-21T07:00:00.001-05:00

You have to appreciate the above-and-beyond efforts of the food-safety specialists attending the Food Safety Symposium this weekend in Charlotte, N.C. They could’ve kicked back last night with an extra hot chocolate, or maybe declared it a wild night because they had the three-custard dessert at the local hotspot where we had dinner. Instead, they insisted on demonstrating the germ-killing capabilities of alcoholic beverages. Again and again and again.

I, too, had a few drinks at the post-dinner party, presented by our hosts, Ecolab. But that doesn’t change the impact of today’s event, a look at how the restaurant industry is trying to protect guests more effectively from foodborne disease. The first session of our two-day conference was crammed with practical advice on safeguarding the food supply. But what really sticks with me is how the effort to avert foodborne disease was personified.

Instead of talking in stark scientific terms about bacteria and viruses, speaker after speaker put a human face on the issue. Dave Theno, our keynote speaker, explained that he was driven to push for food-safety improvements by memories of a six-year-old girl who died during the E. coli catastrophe that almost destroyed Jack in the Box in the early 1990s. He characterized the girl, the first child to die in the epidemic, as “the angel” who inspires him to keep driving for greater safeguards.

“I think of my 2-year-old and my 9-year-old. They’re my 6-year-old,” said Angel Sanford of the McAlister’s fast-casual chain. “Quality is something I take very, very personally.”

Kathy Means of the Produce Marketing Association showed pictures of Kyle Algood and Ruby Trautz, two victims of the spinach contamination of three years ago. Dr. Bruce Chords of Ecolab mentioned how his grandchildren had brought home a norovirus infection—which he then caught. My NRN colleague, Robin Allen, mentioned that her daughter had been hospitalized with the pathogen. Patrick Sterling of Texas Roadhouse recounted how he called all 150 victims of a norovirus outbreak that was believed to be connected with one of that chain’s restaurants.

Clearly, despite all the problems they've seen or noted, attendees regard the victims of a contagion as people, not statistics.

Attendees also heard terms like virons, lateral flow immunosensors and bacteriophages. But they and presenters never let the meeting drift too far from the sensibility that they are protecting people in restaurants, not working with petri dishes in some lab.

The potential downside of buying local

2008-09-20T09:33:00.001-05:00

We’re only one panel and one speaker into the Symposium (see the post below for some context), but already some definite themes are emerging. One, clearly, is the need for traceability, which by the consensus of presenters thus far is a particularly pointed need because of rising imports. The other, perhaps not surprisingly, is local sourcing, which has been largely cited as a food safety challenge.

Said Theno: “Many of these local suppliers do not have the sophisticated controls in place. [Yet] you need a lot of processes and process controls for food safety. Small does not necessarily mean bad;” some small players, he noted, do indeed put the necessary systems and safeguards in place. But, he suggested, a lot simply can’t afford it.

“ Sacrificing safety for the marketing aura of saying ‘locally produced’ is not wise,” he concluded.

Mike Reinert, VP of supply management, talked about the need of educating those small local suppliers, while applying the same sort of criteria that would be used for suppliers of any size: third-party audits, checking for a food-safety security plan, employee background checks.

The safeguards aren’t unique to that realm, he suggested. But the challenge is making sure that they’re applied. He indicated that Delaware North tries to do it by educating its suppliers. He also suggested that Delaware North personnel are also trained to ensure standards are met by the local players from which they buy.

Live from the NRN Food Safety Symposium

2008-09-20T08:46:00.000-05:00

Bacteria must be high-fiving and hooting with delight. Dave Theno, the food-safety guru who was brought in by Jack in the Box in the midst of the chain’s E. coli crisis to right the situation, has just noted that he’s retiring. His presentation, on where the restaurant industry is heading food-safety-wise, underscores what an arch-nemesis the pathogens are about to lose.

Indeed, Theno has just invited the audience of 40 or so chain food-safety experts to contact him if they’re getting pushback from upper-level executives about investing in food safety.

“You got a CEO who doesn’t get it? Say, ‘I got a guy you’ve gotta talk to.’ Set it up, and I’ll call the guy,” Theno said. “And afterward, he’s going to like you a lot more, because I’m a real asshole to talk with, so you’ll look a lot better.”

Theno ended his presentation by recounting how he met a woman from Safe Tables Our Priority, whose six-year-old daughter was the first child to die in the Jack in the Box E. coli crisis in the early 1990s. Theno recounted how the woman promised her lost daughter that she would press for reforms on the girl’s behalf. Theno said he saw the girl as his “personal angel” in helping him push for safer foods.

If you know someone in food safety, tell them or give them a six-year-old. Trust me, it’ll get a lot easier.

"Take home your own six-year-old," he said.

I’m writing this from Nation’s Restaurant News’ Food Safety Symposium in Charlotte, N.C. I’ll be posting updates here throughout the conference, hopefully on a near-live basis.

So stay tuned. And contact me if you’re a chain restaurant executive who’d like to reach Theno.

'An order for Sec. Paulson'

2008-09-17T13:46:00.000-05:00

I’ve gotta be quick here because a call from the federal bail-out specialists could come at any second. I alerted them yesterday that an institution crucial to the financial health of New York-area restaurants, a venerable borrower called Romeo Enterprises, was teetering on the brink of insolvency. If they were willing to lend AIG $85 billion, they can certainly toss a few grand my way.

Then again, the government’s rescue efforts have been decidedly selective. Freddie Mac and Fannie Mae got a bailout, as did the insurance giant whose past CEO, Hank Greenberg, still prompts Wall Street insiders to cross themselves and mutter a protective spell at the mention of his name (he was forced out in 2005 because of fraud allegations leveled by New York’s attack-dog attorney general at the time, Elliot Spitzer, who subsequently dropped the charges). Curiously, AIG got into trouble by insuring very complex financial securities, in effect assuring the backers they wouldn’t lose everything. Investors always say you get rewarded for risk, but the insurer’s role was to provide a safety net so some really big paybacks would be protected. Speculation, indeed.

When it looked as if gazillions would indeed be lost because of AIG’s problems, the government stepped in, arguing that it had to avert economic disaster. And, indeed, the company’s failure might’ve emptied plenty of portfolios and pockets. Just ask the foodservice establishments that counted Lehman Brothers among their major sources of business. Delis and restaurants that served the banker are already feeling the loss, according to news reports, when Lehman filed for bankruptcy only a few days ago.

They and other small businesses are getting walloped because the feds decided Lehman had to sink or swim on its own strengths, whereas AIG is too big of a fish to let flounder.

In other words, if you’re wearing a suit, “Here’s a life preserver.” But if those are foodservice whites on your back, “We prefer to let the market regulate itself.” Size clearly does matter when it comes to portfolios and paychecks.

Maybe those strained delis and restaurants can reach out to AIG’s business associates. Perhaps with a promotional Fat Cat sandwich, made with pork, of course.

And they should be sure to come up with something higher end for the big-portfolio'd sort who’s expected by many in the blogosphere to be brought in as AIG's savior. His name is Hank Greenberg.

Did a Next Big Thing find me?

2008-09-14T22:58:00.004-05:00

Some trends emerge from the undergrounds of New York, L.A. or San Francisco, pushed along by sub-cultures with a penchant for black clothes and body piercing. Other times they crop up in the checkout lines of suburban supermarkets, alongside the string cheese and Swifter refills. So it was this weekend, when one household had to choose between turning the cupboard into a bookcase or actually going grocery shopping. I knew I should’ve just started slotting the books instead of risking a coin toss. But at least I got a glimpse of what could become a popular menu item, judging from how quickly it’s spreading in white-Zinfandel America.

I first spotted it a week earlier in a sleepy burb called Hampton Bays, where one of the new dining choices is a breakfast and lunch place with a Latino flavor. Waiting for my sandwich, I saw that a whole rack of a soft drink cooler had filled with 16-ounce, lidded plastic cups, each containing a liquid the color of a cantaloupe. Pieces of fruit seemed to have settled in the bottom of each clear cup.

As I was waiting, a patron came in and grabbed one from the case. He drank the liquid in a flash, then used his straw to spear the fruit. Then he took another.

Another customer came in. He took one of the items, too. Same process.

And another.

“Hey,” I asked the clerk, “what are those?”

“They’re a drink made with a little fruit juice and cut-up melon, pineapple, mango and papaya. They’re two-fifty each.”

“I’ll take one…What do you call them?”

“We call them frutas.” Others use the more proper name of aqua fresca de fruta.

Fast-forward five days, to the moment our pantry spider webs were to be cleared by a rare supermarket expedition. As usual, I was forbidden to go, a sentence I’ll serve for life because I tend to buy nothing but peanut butter, a packet of sauerkraut, and maybe some Scottish shortbread.

When my wife returned, I started un-bagging the bounty with the zeal of Robinson Crusoe on a cruise liner home. “Did you see this?” she asked. Plunk. She puts down a pre-packaged fruta made with peaches. Plunk. Another, also pre-packaged, made with grapefruit. Plunk. Yet another, also made with grapefruit. “It’s something new. Looks good, doesn’t it?”

She wasn’t with me when I had my first fruta encounter. Clearly this was something viral.

Each contained about 100 calories a serving, and was presented as a refresher, with fruta never appearing on the packaging.

The drinks may be nothing new to those of you who live in Texas or California. The same likely holds true for hardcore foodies. But I can’t recall seeing aqua fresca de frutas before in the mainstream suburbs of the Northeast, even in the Latino delis that have been sprouting up in recent years. All of a sudden, they're as prevalent as pomegranate juice.

The combination of fresh fruit, real juices, a lot of flavor and a sense of healthfulness, coming at a time of intense interest in beverages, could propel frutas very quickly into the restaurant mainstream.

Early restaurant news out of Texas is far from good

2008-09-13T10:59:00.006-05:00

Hurricane Ike's damage to Texas' restaurant industry is starting to be assessed, but it remains unclear whether the storm caused or merely contributed to the demise of a dining landmark. Brennan’s, a longtime favorite of Houston, was “left in ashes” by a fire that erupted about the time the storm was making landfall, according to a report in the Houston Chronicle. The report noted that it was still undetermined as of Saturday afternoon if Ike caused the blaze. It appears certain, however, that the hurricane fanned the flames and kept firemen away.

It seems as if Mother Nature was extracting revenge on the landmark for earlier defying its wrath. After Hurricane Katrina destroyed much of New Orleans, many staffers of that city’s Commander’s Palace were taken in by Brennan’s. Both landmarks are run by the Brennan family, one of the nation’s foremost restaurant clan.

The Chronicle story noted that co-proprietor Alex Brennan-Martin couldn't speak when he learned of the fire because he was apparently too broken up.

As with Hurricane Gustav, last night’s storm dominated the airwaves. Yet mentions of southern Texas restaurants were rare, as opposed to the detailed reports about how New Orleans dining cathedrals were faring when Gustav hit. The contrast underscores how important eateries are to the Big Easy economy. Most of the economy-related TV and internet reports on Ike focused on the local oil trade.

But a reporter stationed in Galveston by a Houston ABC affiliate noted that a popular beachside restaurant “was literally gone.” I thought he said it was The Stockade, but I couldn’t find a listing for that. A scan of all the eating places listed in local tourist guides mentioned only who’s name sounded similar, the Spot, though I haven’t been able to confirm that through other means.

Meanwhile, another report noted that the Kemah Boardwalk, a tourist facility run by Landry’s Restaurants, couldn’t even be reached on foot or by car. Among the restaurants located on the waterside attraction is one of Landry’s newest concepts, Red Sushi Habachi Grill, a slight variation on the Red sushi restaurant in Las Vegas’ Golden Nugget casino.

Though the news on restaurants affected by the hurricane hasn’t been abundant—and blogs offered less information than they did during Gustav—the situation has to be deplorable. Power companies are saying that power won’t be restored in some areas for three weeks to a month. Many areas are advising residents to stay away if they can, and a lengthy list of towns and cities are imposing curfews to avert looting and lawlessness.

If you’re reading this and know what’s happening with the restaurant industry in southern Texas, please share the info.

Hey, maybe we all can get along

2008-09-12T11:05:00.002-05:00

I’m usually skeptical when I hear government or industry beating a drum for collaboration in lieu of regulation. In the midst of the tomato/jalapeno/Serrano salmonella epidemic, for instance, the Food and Drug Administration’s call for more industry responsibility and involvement came off as nothing more than finger-pointing—“This wouldn’t be happening if industry did a better job of record-keeping. After all, we don’t have the money to do that ourselves.”

And the private sector’s frequent cries for cooperation sound like thinly masked pleas to be left alone: “We prefer that boards of health and other government watchdogs work with us, not against us. It’s merely a coincidence that we hate paying fines and being forced to meet their standards.”

Then comes yesterday’s news from Oregon. As nrn.com reported, the state’s restaurateurs and Occupational Safety and Health Department have forged an agreement committed to paper—a veritable contract—to work in tandem for the safety of foodservice employees.

According to coverage in Oregon’s press, this was no photo op pretending to be a significant announcement. As part of the deal, state experts will be dispatched to consult with restaurateurs in their establishments about ways of making the operations safer. An examination of the safeguards already in place would presumably be part of that process, along with a diagnosis of what the restaurant is doing wrong. But the restaurateurs have the assurance that they won’t be penalized for what the state reps might find.

It’s as if the state is sending a force of consultants into the trade, without the follow-up invoices that typically follow consultants more closely than their shadows.

Safety officials, meanwhile, can focus on safety, without the usual sword fighting about blame, fines and being realistic. Not that their fencing abilities will be allowed to lapse. Oregon’s workplace safety inspectors will continue to do their job, and will issue fines accordingly, local press reports note. Presumably the task will just be a lot easier, since restaurants will have a clearer idea of what they should be doing, and virtually no excuse if they don’t heed the advice.

And in a state where reportedly one out of every 14 state residents is employed by a foodservice establishment, that’s good thing.

So kudos to the Oregon Restaurant Association for entering into the deal and thereby blazing a path for peers in other locations to possibly follow. The agreement it signed could prove a welcome model for all sorts of regulatory agencies in all kinds of jurisdictions.

The aftermath of Gustav

2008-09-04T07:12:00.001-05:00

Clay Dover, president and chief marketing officer of the Louisiana-based Raising Cane's quick-service chain, sent us this note yesterday about the aftermath of Monday's storm:

Hurricane Gustav forced Raising Cane’s Chicken Fingers to close 35 of its 58 company owned stores in Louisiana, Mississippi and Alabama. (We have 73 total). As of Wednesday, September 03, 2008 we have been able to re-open 18 locations.

Baton Rouge has been a challenge due to massive power outages. Additionally some of our outlying restaurant locations were hard hit, including Houma, where Gustav made landfall. We plan on opening the restaurants located in New Orleans beginning Thursday a.m. with full crews.

We were able to reopen quickly because we were very proactive in our preparation both in preparation and recovery.

New heat-beaters--and a Happy New Year

2008-09-03T07:25:00.000-05:00

I’ve put my finger precisely on The Cheesecake Factory’s recent traffic problems: Calendar confusion. Yesterday, Sept. 2, the mega-volume chain announced that it was rolling out its new summer menu. “Take a break from the summer heat and visit The Cheesecake Factory,” gushed the announcement.

Labor Day is popularly recognized as the end of summer, but maybe Cheesecake prefers the official closing date. That would give the chain easily three more weeks to promote its new hot-weather selections. By then, maybe it’ll be ready with a new Halloween lemonade, or maybe a Christmas fresh-fruit salad.

How's the chow in today's modern military?

2008-09-02T09:12:00.002-05:00

The presidential election has repeatedly raised the question of when our troops may be coming home from Iraq. Left unasked is how our service men and women are being treated until then. How, for instance, is the food? We decided to find out, using a source we know and respect. His name is Bill Addison, associate editor of Nation’s Restaurant News’ sister publication, Home Channel News. These days he goes by Specialist Bill Addison, 50th Infantry Brigade Combat Team, New Jersey Army National Guard.

Bill was called up for a tour of duty that will soon take him from McGregor Base Camp in New Mexico to Kuwait and then Iraq. Hopefully he won’t lose more weight than the 17 pounds he’s already dropped—one soldier’s statement on the food served in MacGregor’s main dining service.

“Most of it is due to my inability to eat much of what is being served,” he wrote in an e-mail. “The food is horrendous.”

But there is a saving grace: Chains ranging from Blimpie to Fuddrucker’s periodically roll kitchens into the base to give the soldiers a taste of home. The Post Exchange also provides an alternative to the base’s main feeding operation, known in military parlance as the Dining Facilty, or DFAC. The Exchange features several proprietary brands that resemble streetside fast-food places, in trade dress as well as quality, Addison wrote.

Military feeders have proudly embraced both national and proprietary brands as an important morale booster. They say it provides the soldiers with a momentary trip back home, since they could be back on Fast-Food Row. Addison agrees.

But, he added, there are a few downsides to the trend.

For one thing, having a few brand-name restaurants to serve a sprawling base of hungry young people is going to result in DisneyWorld-scale lines. That means standing in the New Mexican sun for a considerable chunk of time to get a sandwich you might’ve been able to grab in seconds back in civilian life.

With the national brands, there’s also the issue of price. “$3.20 per slice and $8.50 for a hamburger can stretch a soldier’s
budget,” he wrote.

It can also prompt questions about the intentions of those amenity providers. While these services are indeed welcome, and a chance to get out of the DFAC once in a while, I cannot help [but] feel exploited by these companies,” Addison wrote.

And that applies not just to the consumer-brand restaurants on base. Addison noted that a major electronics retailer sends members of its well-known computer fix-it squad to McGregor to provide free assessments of the soldiers’ laptops. If the service men or women decide to follow the recommendations for repairs or upgrades, they have to pay.

As for the food, Addison stresses that you can’t qualify all base services on what he’s experiencing at McGregor. He’s spent nine years in the service, he said, and the quality has varied greatly, a function on the base and who’s operating it. At Ft. Dix, for instance, “the food was always pretty good.” And, he stresses, we’re obviously taking a survey of one person.

“Please remember that this is just one soldiers
opinion,” Addison wrote. “I recognize that we have it better of than in any previous war, and that any other countries military would be jealous of what is afforded to us.”

Bill promised to give us the lowdown on the foodservices when he’s in Iraq. Hopefully, that won’t be a long stay. And afterwards, when he’s back in his cubicles a few rows from mine, the burgers are definitely on me.

You can learn more about what Bill’s life is like at present by going here.

New Orleans restaurants batten down

2008-08-31T12:21:00.001-05:00

The Big Easy's celebrated restaurant industry certainly hasn't had an easy time of it. Now, three years after the Big One, comes The Even Bigger One, a storm that's been described by New Orleans mayor Ray Nagin as "the storm of the century." This from a man who was on the ground during Katrina.

It comes as no surprise, then, that the city's restaurants are shutting down and encouraging their staffs to seek safety. An AP story said that Arnaud's, one of the landmark places, threw away some of its food and donated the rest to local fire departments. Why suffer that degree of spoilage, as so many places did in 2005. And the local newspaper, The Times-Picayune, has this to say about other establishments there.

The Scoop, by the way, was launched in the wake of Katrina as a service to the local industry there. Though it wouldn't take that name for awhile, the blog was intended to serve as a bulletin board of sorts, where New Orleans restaurateurs and restaurant employees could reconnect. Our hope was to let employers and employees know of each other's safety, and then to start addressing such nuts-and-bolts matters as getting paychecks or seeing about healthcare coverage. We also hoped to put employees in touch with other restaurants that might be able to add them to the payroll while their prior employer was getting on its feet.

This is a helluva way to celebrate the anniversary of NRN's first blog. Hopefully, this time it'll be filled with stories of how astutely the city contended with a natural disaster, and how quickly it rebounded.

We wish everyone down there the best of luck. Needless to say, if this space can be used in any way to help the members of New Orleans' restaurant industry, just let me know, either through a comment here, or by e-mailing me at promeo@nrn.com.

The "I" in choice

2008-08-30T14:38:00.000-05:00

Historians, as you probably know, are prone to fight at the drop of a three-cornered hat. Just mention the Strong Man Theory, for instance, and you’re likely to see a headlock here, an eye jab there. Before long, medieval curses will be flying, and enough tweed will be ripped to make James Lipton wince. Still, even after all the bloodshed, one faction will insist that history is driven by extraordinary individuals acting on personal agendas. And their opponents will refuse to budge from the conviction that circumstances, not strong men or women, are what change the path of human development.

So, please, if you’re holding a kegger this weekend for that rowdy bunch from Elizabethan Studies, do not mention the latest initiatives from Starbucks or Danny Meyer.

After all, USA Today’s exclusive on Starbucks’ latest menu overhaul left little doubt the chain is adopting more healthful choices because of developments in the life of CEO Howard Schultz. The article recounted how Schultz discovered during a physical that his cholesterol was too high and that he needed to pursue a more healthful lifestyle. He changed his ways, the story noted. And, at virtually the same time, so did Starbucks. First it rolled out its new healthful smoothie line. Then, Schultz disclosed to USA Today’s Bruce Horovitz, it drafted the new reduced-fat, higher-fiber breakfast array that’ll be introduced on Tuesday.

A coincidence? Ask anyone historian with a well-thumbed copy of “Julius Caesar: The Early Years” on his or desk.

Then there’s the new diversification by Danny Meyer’s Union Square Hospitality Group. The operator of such fine-dining shrines as Gramercy Tavern and Union Square Café is planning to open restaurants in the Mets’ new stadium, Citi Field, when it opens in Flushing, Queens, next year. Nation’s Restaurant News broke the story after speaking with Meyer, who acknowledged that this is more than a cold, calculated business decision. “We think Citi Field is a great opportunity in which to parlay our love of sports and launch a new division,” he told NRN’s Elissa Elan.

Clearly, neither businessman is stepping outside himself to look with complete detachment at possible new directions for their businesses. Yet both have repeatedly demonstrated they’re no Dan Quayle when it comes to spelling out opportunity. These are some of the most respected figures in the business, if not American commerce. Does that mean those of us yet to climb Mr. Olympus should consider a little more Yoda and a little less Peter Drucker? Should we indeed yield a little more to The Force we feel?

The record is at best murky. In the late 1980s, a businessman named Victor Kiam decided he really appreciated a certain type of electric shaver. “I like it so much I bought the company,” he famously told consumers in a long-running TV campaign for Remington razors. That bit of strongman business savvy worked well for Kiam; he would grow the company and remain its chairman until his death in 2001.

But personal preference also led him to buy the New England Patriots football team. It was a financial disaster for him.

Less ambiguous are the bankruptcy notices for restaurant and after restaurant that were opened because the entrepreneur liked the idea of being in that business, or really enjoyed cooking, or loved hanging out in star-studded establishments. Ego equaled disaster in those instances.

Of course, those decisions were often based solely on bias, not on business sense. Schultz and Meyer probably couldn’t have suspended their commercial intuition if they had wanted to do so.

So my bet is they’ve made good decisions, even if each choice may have been more influenced by personal criteria than other moves they’ve made.

We’ll certainly see. Perhaps starting on Tuesday.

Be afraid. Be very afraid.

2008-08-27T22:18:00.002-05:00

Wal-Mart treats competitors the way Moe worked through conflict with Curly or Shemp. If Al Qeda had controlled a market the retailer wanted, Osama Bin Laden would be straitjacketed in some Middle Eastern asylum right now, whimpering, “It’s yours. Just don’t lower your prices again.”

Which is why I have to play Paul Revere and warn you of a story we posted on our website today: Wal-Mart is trying a new concept called Marketside, which is positioning itself as the place to buy dinners a consumer might’ve otherwise purchased from a restaurant. Customers can pick up the ingredients to whip together a meal themselves. Or they can opt for one that’s ready to plate and serve the family. Indeed, “easy meal solutions” is the cornerstone of the venture. Except here you can get them for what the nation’s notorious discounter coyly terms “affordable prices.”

“With us,” says the one-time home-supplies source that now dominates virtually every merchandise category it’s entered, from music to toys, “you¹ll never have to compromise quality to get a lower cost.”

Wal-Mart says it has no plans to open more than the first four green-lighted Marketsides, all of which are slated for the Phoenix area. But it slipped up and acknowledged in ads for Marketside staffers that it envisions 1,000 units cranking $10 billion in annual sales. Darden Restaurants, the king of casual dining, garners about $6.7 billion.

News of Wal-Mart’s interest in stealing your customers follows a similar development during the Olympics: The retail chain exploited coverage of the games by advertising its in-house take-and-bake pizza as a more-economical alternative to restaurant-made pies. The primetime commercials sum it up bluntly: If your family buys only one pizza a week, it’d be saving $312 a year by grabbing a pie from the nearest Wal-Mart.

We in the United States are worried that the Olympics were reason to be more fearful of the Chinese. Restaurateurs should be more concerned about a rival named Wal-Mart. It’s a nightmare that appears to be coming true.

A news sampler

2008-08-23T17:45:00.005-05:00

My cubicle usually makes FEMA's newsletter two or three times a year. Mentions like, "Congratulations to Joe Smith in Dispatch for scaling Mount Everest this summer. What’s next, Joe, cleaning Romeo’s desk???” And there was that discovery of a condor colony during a routine bulldozing of the guest-chair area in ’06.

It’s not that I prefer the post-cyclone look of my workspace, despite its likelihood of being the next “Survivor” setting. I just can’t bring myself to bury news tidbits in files that defy easy labeling. I prefer to maintain a desktop Miscellaneous mound, so I can savor informational details that would otherwise be lost. Consider, for instance, these gold flakes in the recent stream of news.

Wal-Mart wants your pizza business. During primetime Olympics coverage, the retailing bully aired a commercial that should’ve had pizza chains sweating like Chinese gymnasts being asked for proof of age. The spot explains that ordering a pizza from a restaurant usually costs about $14, while bringing home a take-and-bake pie from Wal-Mart will set a family back just $8. “If your family eats pizza once a week, you could save $312 a year,” the voice-over explains. Better push those pastas, Pizza Hut.

Little burgers are now Chili’s biggest. Big Mouth Bites, Chili’s version of the mini-sandwiches that competitors of all stripes seem to be sporting these days, are now the chain’s best selling burgers, according to officials of parent Brinker International.

McCormick & Schmick take a different group-business tack. Everyone targets local businesses for catering and party business. M&S is trying the different path of pursuing companies on a national basis. The high-end seafood chain is reaching out to corporate accounts that are planning road shows to hawk their wares or services. The restaurant company offers those road warriors the ease of setting up the feeding operations of the whole tour with just one call to a centralized sales and support center.

Cheesecake Factory isn’t alone in trying delivery. BJ’s Restaurants, the high-volume chain headed by Cheesecake alumnus Jerry Deitchle, is already offering the service at 71 of its 75 casual-dining restaurants, according to executives. If it’s indeed blazing a path for Cheesecake, the latter may soon be seen walking the aisles at BestBuy. BJ’s is also upgrading its TVs to flat-screen models.

Outback’s parent sells its plane to familiar parties. As it was losing $176 million during the second quarter, OSI Restaurant Partners decided it was time to thin out its fleet of aircraft. It sold one on July 1 for $8.1 million to a company called Billabong Air II Inc., which happened to be owned by two of the company’s founders, co-owners and executives, according to securities documents. That’s not to say other residents of the executive floor will always have to fly commercial. As part of the deal, Billabong agreed to let OSI lease the plane for up to 200 hours a year, at a cost of $2,500 per hour. Blankets and pillows were apparently not part of the deal.

There are probably far more tidbits I could share with you, but there's movement under the pile of papers near my keyboard, and it could be something alive. Unfortunately, that’s also where I left the number of Animal Control.

In search of service

2008-08-20T07:25:00.000-05:00

This is a true tale of good service, bad service, and the sort of customer nightmare you’d expect from nuns running a singles bar. Just as diverse is the cast of characters: A brand-new hospitality school, a diner that was probably slinging hash when America’s top chefs’ school was the Culinary Institute of the Colonies, and a disembodied voice serving as a phone-company support specialist. But the results from column A might not match up exactly as you expected with the parties in column B.

To be sure, the phone company’s automated customer handling system still out-sucked the other service providers. But that’s where you’d stop smacking your head and uttering, “Of course.”
Here’s what happened.

Last weekend I decided to try the student-staffed cafe of a new culinary school in my area, a godsend to a region that has a significant tourism industry but sorely lacks the resources to develop it more fully. It was late on a Saturday, well past the lunch peak. But the doors were open, and there were five school representatives inside, including what seemed to be two instructors. We would be the only patrons. How much better could it get?

Much, we were soon to learn. We walked in and stood there, loudly fidgeting to signal our entrance, yet completely ignored by all parties. At first I thought they were cleaning up to close down, given how intently they focused on banging pots and containers behind the hot line. But close scrutiny indicated they were very much ready for business. If only they’d take our orders, then our money.

A few throat clearings failed to get their attention, so we cleverly resorted to the old attention-getting ploy of asking for a menu. A staffer leaned over, grabbed one from the walk-up ordering station, and held it out in our direction. “We’re out of whatever’s been crossed off.”

About 40 percent of the listing, including staples like a Caesar salad, had been crossed off.

But we looked, and waited. No one said a word to us.

Finally, we bolted, the tiny café still as quiet as a church.

Across the street was a classic diner, long on ambience and big on portions, but hardly a standout in what it offered or the caliber of the food. Yet hunger trumped any reservations, and in we went.

A waitress hauling two manhole-cover-sized plates stopped mid-dash in her trip to a table to welcome us. “Try the lobster salad, it’s really great,” she said in a stage whisper. “We make it ourselves, fresh.”

In a millisecond, she was at our table, explaining that she could now give us a proper hello and answer any questions. We asked about the specials. Instead of reeling off a canned spiel about what was on the blackboard that day, she chatted with us: “Are you in the mood for a sandwich, or more of a salad? If you like salads, try the seafood salad. It comes with potato salad and coleslaw, and its all made right here. Just be sure to leave room for pie, because we’re known for that. Our puddings are great, too. But pretty much everything here is made from scratch.”

A special order didn’t phase her in the least. And our cups and glasses never went unfilled, even though we had to share her with at least six other tables.

I was tempted to implore her, “Wait right here a minute,” and then dash across the street to bring back the culinary-school students—or, to really fix the problem, their instructors. But I was afraid they’d turn up their noses and fail to view service as something other than a degree requirement. They might miss the glaring contrast between their empty café and a diner that was packed at 2:30.

Instead, I think I’ll head back to the school’s café and ask the instructors if they or their charges would be interested in a job. Then I’ll give them the number of the phone company’s service center.

The full-service barbell

2008-08-18T14:26:00.001-05:00

From an infomercial yet to be filmed:

FRENETIC VOICE-OVER: Tired of sagging customer counts and flabby marketing efforts? Show investors who’s their daddy with this breakthrough way to keep patrons coming back. Soon your only worry will be getting all that extra money to the bank![Background image of an armored car being loaded with sacks marked “$$.” Cut to a guy who looks like Danny DeVito, tossing fistfuls of Benjamins into the air with near ecstasy.]

VOICE-OVER RESUMES, SPEEDED UP TO 78 RPM: Introducing…the Barbell Concept!! Already used by chains like McDonald’s, Taco Bell and Wendy’s, the Barbell Concept is now fully adaptable to full-service operations. Here’s how it works: Offer a menu of everyday bargains, like the section of entrees now offered for as little as $7.95 on most McCormick & Schmick menus. But there’s more! While you capture bargain hunters with those head-turning deals, boost your check averages with premium products. Enticed by wild halibut, Alaskan salmon or sea bass? McCormick & Schmick is selling it to “high end guests” for $30!!

[Cut to a picture of a buxom woman in a bikini, holding a fake old-fashioned barbell as she oohs and ahhs. The weight on one end is marked “Value,” the one other, “Premium price.”]

VOICE-OVER: Here’s what management has to say:

[Cut to a photo of Doug Schmick, the company’s chairman and CEO. He addresses the camera as “ACTUAL COMMENTS” flashes under the image.]

SCHMICK’S VOICE: With a consumer with household incomes lower than $75,000 who visit us one to two times a year, the majority of our menus have what we call a ‘value band,’ which is made up of anywhere from 10 to 14 items priced between $7.95 and $13.95. The value band accounts for only three to five percent of our menu mix, but appeals with the middle-income consumer.”

[Cut to a picture of a restaurant manager happily pushing a wheelbarrow full of greenbacks.]

VOICE-OVER RESUMES: Be part of the trend that’s remaking casual dining. Outback features a $9.99 steak and an average check in New York of $32! Texas Roadhouse has 19 entrees priced under $10, PLUS a $17.99 prime rib!!

Don’t miss out on today’s hottest full-service trend!! Get your barbell strategy today!!!

Our operators are standing by.

[Close with this disclaimer, presented in type too small for a sharp-eyed mouse to read:]

All information taken from recent conference calls.

Brutes of a different sort

2008-08-13T22:38:00.002-05:00

A recent conversation within the NRN Online department:

Speaker #1: “Lisa is working on a news item about a plan to fight restaurant crime in Oakland. Apparently there’s been a rash of what they’re calling ‘takeover’ robberies.

Speaker #2: “What’s a takeover robbery?”

S.#1: “Guys come in with guns and take over the restaurant.”

S. #2, after a pause: “Are they sure they’re not just investors?”

Another view of restaurant closings

2008-08-12T09:41:00.001-05:00

The top story of this week’s Nation’s Restaurant News deals with the wholesale closing of restaurants by a number of big chains. The article is a solid business article, a hardnosed look at the qualified opportunities those shutdowns are posing for growth-minded operators.

But one of The Scoop’s readers wanted us to be aware there’s another side to the situation. Here’s her communication, edited a bit for clarity. The identity of the chain involved is obscured because we’d be unfair to blast it without giving the operation a chance to respond. Normally we’d do that, but I fear the employee would somehow be implicated and might certainly lose her job. So the purported culprit is not revealed. But you get the idea.

Dear Peter,

I know that you don't know me or anything, but I have got to say this. I am an employee for [a family-oriented chain] here in [the Southeast], and I have already been through one store closing back in 2007. [My situation now] goes to show how a really big company really could care less for their employees. They don't know what we go through to make our customers happy. They told us they could make more money off the building alone than what we were bringing in on sales. Well, guess what? That building is up for sale.

The restaurant was great. Yea, some of the [other units in the chain] had their good and bad days, [but] lots of people were disappointed with the closing.

We all here are worried about losing our jobs now just because of the way the company treats us.

Thank you for listening to me. We need all the help we can get.

Keep an eye out for a story in next week’s NRN. It deals with how prospective hires are picking restaurant jobs on the basis of the employer’s reputation and perceived culture, not the wages it offers. And that’s true for management personnel as well as hourlies.

Best of breed: franchisee or franchisor?

2008-08-11T13:27:00.002-05:00

Did chain headquarters forget to tell franchisees we’re in a downturn? Maybe franchisors are just too embarrassed to gripe about the times when so many licensees are turning conditions to their advantage. Consider what happened recently within several of the industry’s oldest chains. Franchisees proved once again that they can adapt far more readily than the home office to changes in the marketplace, no matter how trying. Their pockets may not be as deep, but their street smarts often make them better.

S&A Restaurant Corp. went bankrupt in spectacular fashion, turning away employees and patrons in preparation for a fire sale of the 200 Bennigan’s and Steak & Ales it operated. And franchisees? As the Bennigan’s on Pittsfield Road in Lenox, Mass., boasted on a banner this weekend, “Locally operated and still open.” It may not be one of the licensees that are looking to scoop up the franchisor’s shuttered stores, but it appeared to be doing just fine, capitalizing on local events like the area’s fifth annual Zucchini Festival and Sunday morning’s crafts fair/pancake breakfast fundraiser in a local park. All told, Bennigan’s franchisees hope to turn S&A’s inability to stay solvent into a chance to swell their ranks by 40 to 60 properties, presumably at prices that would make Wal-Mart wince.

S&A’s franchisees weren’t the only ones to spot an opportunity amid what many brand parents portray as the third circle of hell. Pizza Hut, another greybeard of the business, saw franchisee NPC Corp. ink a deal to buy 99 of the chain’s units from a fellow licensee for $35 million—or roughly $354,000 per store. Pizza Hut seems to be gaining sales traction after some difficult years, thanks to a new pasta takeout line and the addition of a bolt-on chicken wing concept called Wing Street. But while the home office is getting on its feet, NPC is galloping.

To be sure, not all franchisees are finding the current market to be a time of opportunity. Papa John’s recently acknowledged to investors that it’s “subsidizing” franchisees by eating some of increased costs of items it distributes from its commissaries to the field, instead of directly passing along the heightened expenses. It also noted that it sometimes exercises patience with franchisees whose situations make royalties a tough nut to cover.

But, as executives stressed during a conference call with analysts, nothing keeps a system healthier than able franchisees. “We are very focused on keeping good franchisees healthy during these tough times,” said CEO Nigel Travis.

There are probably a lot of franchisees saying the same thing these days about their franchisor.

Your eyes don't deceive you

2008-08-06T19:02:00.001-05:00

Rumors have been popping up this week like a Whac-a-Mole game stuck on Espresso Drinkers mode. The Scoop feels compelled to set the record straight by smashing the restaurant-related falsehoods among them. Consider, for instance, these double whoppers making the rounds.

Planet Hollywood DID NOT buy Buca di Beppo at a yard sale. A price of $9.7 million for an 88-unit chain is completely major-market, though the deal includes a barely used bowling ball and a crock pot still in its original box. Nor is it true that Bruce Willis’ colander will become a standard part of Buca’s wall décor.

Similarly, Brinker IS NOT trying to sell Romano’s Macaroni Grill on CraigsList.

The Food and Drug Administration DID NOT use a dartboard to pick a suspect for the salmonella outbreak. The agency wielded cutting-edge epidemiology to determine that the culprit was not a tomato, as it maintained for several weeks, even when another agency was citing peppers as a possibility. That same caliber of detective work later pinpointed a pepper as the likely perp. Oops—make that two types of peppers. And maybe throw in a tomato, too. In an unrelated development, the FDA announced that its dart team beat the CDC’s squad by hitting two bull’s eyes, a jalapeno and a Scotch bonnet.

Hardee’s newest menu item IS NOT the Whole Steer on a Bun. It’s actually called the Half-Slab Slider.

Ben Bernanke HAS NOT turned to Ronald McDonald for advice on jump-starting American business. It was apparently an instance of wishful thinking.

Emeril Lagasse’s head IS NOT being added to Mount Rushmore. Authorities have yet to choose between the visages of Simon Cowell and Gordon Ramsay.

Nelson Peltz HAS NOT been cast for Hellboy III.

And we walked five miles uphill to school--both ways

2008-08-01T10:49:00.001-05:00

From a colleague at Nation's Restaurant News who, like me, was of course far too young to remember prices like these. This looks to be from the time when Woolworth's reigned as one of the industry's largest foodservice operators as well as a category-killing retailer.

Quaking icons

2008-07-30T15:00:00.001-05:00

The earthquake in Los Angeles hit 5.4 on the Richter scale, but it was a shiver compared with the aftershock from yesterday’s collapse of a casual-dining icon. The public was reminded in story after story that the flat-liner was the company that built the venerable Bennigan’s and Steak and Ale chains. But the industry knew S&A Restaurant Corp. on a far more emotional level. For many of casual dining’s best and brightest, the company was the finishing school where they learned the business. The bankruptcy filing must’ve been like seeing your first home razed.

If the foodservice industry had the equivalent of a Cooperstown, the list of S&A alumni could serve as the roster of charter nominees: Chris Sullivan, Bob Basham, Tim Gannon (all of Outback fame), Doug Brooks (Brinker International), Dick Frank (Chuck E. Cheese’s), Dick Rivera, Hal Smith, Wally Doolin, Rick Berman, Lane Cardwell.

I used to joke that the MUFSO conference was just an S&A reunion in disguise. If an attendee was in a senior post at a casual-dining chain, chances were extremely high that he started at the operation that Norman Brinker conceived in the ‘60s as the obvious trade-up for baby boomers as they outgrew fast food. And for years it grew with their spending power and desire to dine out, becoming an industry force and prompting more imitation than the first reality-TV series.

But the company became part of a huge corporation and suffered the usual fate of losing its verve and agility. Upstarts roared past it, leaving the one-time innovator in a time warp.

More recent regimes did their best to revive the concepts, but the numbers suggest it was a pitched struggle. Systemwide sales for Bennigan’s, the spryer of the two concepts, slipped by about $13 million last year, and the chain contracted by about 10 stores, according to NRN research.

The times ultimately proved too daunting for the brands’ owner, prompting it to file for bankruptcy of the Chapter 7 variety. But franchisees believe they can make a go of it. The scuttlebutt is that they’ll try to provide the unification and support that once came from S&A. The model seems to be Ground Round, whose franchisees similarly found themselves orphaned when their franchisor suddenly threw in the napkin.

Now, of course, everyone is wondering what restaurant chain might be next. In media ranging from overseas newspapers to National Public Radio, the bankruptcy was cited as a weathervane for the economy, a milestone on the road to ruin. The surprise development is being portrayed as a leading indicator.

A fair-sized group of casual dining veterans probably knows better. They’re likely aware that many of S&A’s problems were a function of age and decisions made—or not made—decades ago.

For them, it was likely a seismic shift of another sort, and far more saddening than worrisome.

Why wait 'til March for madness?

2008-07-24T16:42:00.004-05:00

My friends are a little worried because I like to kick off restaurant chains' earnings season with a tailgate party. And why not? We’re talking quarterly updates from the biggies, people. And then come the conference calls, where you can ease back with a hot dog and a beer while investors do some serious grilling of public-company execs. Who needs Six Flags or Vegas? Especially during a financial-reporting stretch like the current one, when the action’s been wilder at times than a Sweeps Week on Fox. Consider, for instance, the mysterious disappearances that have recently come to light.

Where, for example, was Chipotle’s copy of the memo that every other public restaurant company must’ve gotten? It’s the one about cutting expenses because of spiking food costs.

It was certainly right there in Chuck E. Cheese’s “In” box. The pizza and games chain countered high cheese and dough expenses by trimming the size of its large and medium pizzas by a half-inch.

P.F. Chang’s, another apparent recipient, is focusing its efficiency efforts in part on labor. The company told investors that it’s revising the responsibilities and recruitment processes for the unit-level managers at its Pei Wei Asian Diner concept in part to eliminate one supervisory position. It’s also simplifying and shrinking the fast-casual chain’s menu to cut prep space and kitchen labor, while also deleting some high-cost selections that don’t sell well.

Somehow, the mandate to take similar action never reached Chipotle. “It would be plausible to try to squeeze costs out of the food line or labor line or to aggressively raise prices,” said president Monty Moran. “We’re not going to do that.”

Instead, executives said, the chain is directing more units to use additive-free chicken, which costs 20 to 50 percent more than the standard version, and is buying more locally grown produce. So much for economizing on kitchen supplies.

Chipotle might also see some pressure on labor expenses because of the ongoing salmonella outbreak. Since the federal government now believes fresh jalapeno peppers could be the source of the contamination, the Mexican chain is grilling all of the peppers that it formerly served raw.

The same vanishing act must’ve been pulled with Chipotle’s copy of the Official Restaurant-Chain Handbook, or at least the page that deals with international expansion. Charging beyond the boundaries of the United States is as important to the success of many restaurant brands these days as selling soft drinks. But not, it seems, for the 778-unit burrito specialist. Founder and CEO Steve Ells revealed that the chain’s international strategy consists of opening a lone unit in Toronto. “I want to remind you that international expansion is not a key driver of our current growth strategy,” he observed after noting that Chipotle has never needed a passport before. Hopefully he spoke loud enough to override the gasps of investors who’ve grown accustomed to hearing chains project hundreds of overseas openings.

The disappearances involving Chipotle were parlor-room stunts compared with the Houdini feat that The Cheesecake Factory pulled off. One day, as he had for the prior eight years, Michael Dixon was serving as an executive of the casual-dining company. The next, he was gone. His resignation and departure as CFO came the same day.

Cheesecake founder and CEO David Overton said it was just a coincidence that Dixon vamoosed hours before the company disclosed that its profits dropped 19 percent during the second quarter. He also declined to put forward any other explanation.

Maybe he should’ve just uttered, “Abracadabra,” and been done with it.

Okay, time to throw another hot dog on the grill and see who else is reporting today.

Compromising position?

2008-07-17T17:17:00.004-05:00

Moving to higher ground is a sound strategy if you’re running for president or trying to escape a flood. But what if you’re a broad-market restaurant chain that wants to out-class the sector? Consider what the heads of Ruby Tuesday and Applebee’s have to say on the matter. Then climb a mountain and ponder how such similar assessments could prompt them to move in such opposite directions.

Both have acknowledged to investors that management pushed the concepts beyond the comfort zones of longtime customers when they drove the chains up-market. ““We often overshot the brand in the pursuit of a more upscale customer while frankly failing to deliver on the expectations of our core users,” said Julia Stewart, CEO of DineEquity and the proclaimed chief strategist for Applebee’s, which the IHOP parent acquired in November.

Sandy Beall, founder and CEO of Ruby Tuesday, had similar things to say when he addressed analysts last week in a conference call. The past year was a tough one for the casual-dining chain in part because of the environment—“as difficult as I’ve ever seen it,” remarked Beall, who started the company in 1972. But, he admitted, “We also probably hurt ourselves.”

The company remodeled 650 restaurants in less than a year, which may have distracted the team, Beall explained. And some patrons may have been driven off by the new look—“lower-end guests who maybe felt less comfortable in our reimaged restaurants,” he observed.

Stewart has indicated that Applebee’s will shed its highfalutin ways and refocus on the brand’s traditional strength of offering reasonably priced finger foods and a centerpiece bar. In short, it’ll shift back to the concept’s longstanding position as an everyday dining choice—a true neighborhood option.

Contrast that direction with Beall’s pronouncement on Ruby Tuesday’s upscale push. “We now have a completely integrated high quality brand with consistency among its key elements of food service and the restaurant’s look and feel,” he told investors. “This is very, very important.”

He didn’t reconcile that enthusiasm over the chain’s new positioning with his earlier comment about alienating some customers. But he did add, “The soundness of our strategy is also indicated by the fact that our customer base is changing…For example, it is becoming a little more affluent, which is what we wanted, with 44 percent of our customers having income greater than $75,000 compared with 38 percent three years ago.”

Clearly he wants the brand to be more of an Acura, while Applebee’s is betting that a Honda is really what the market appreciates.

Both, of course, could be correct. Meanwhile, the industry as a whole seems to favor the third option of claiming the middle ground, whether that means sliding up or down the spectrum. Fast-feeders ranging from Burger King (with its Whopper Bar, a high-end diversification featuring cocktails) and Subway (with its Subway Café) are nudging their brands further up the pricing scale. At the other extreme are fine-dining chefs like Bobby Flay and their launch of burger concepts, like his just-opened fast-casual concept, Bobby’s Burger Palace. Like many a presidential candidate, restaurant operators seem prone at the moment to drifting toward the center.

Unless, that is, they’re already there, like the family dining specialists. Denny’s, for instance, is edging into quick-service turf with its scaled-down Express concept and B-FST 2GO program. And IHOP has aired intentions to diversify into the fast-service arena of airports.

It sounds like a mess, but it’s really a much-needed shake-up of the status quo. Brands are reconsidering what they are and what they want to be. Unfortunately, many are likely to discover that those are two extremely different things.

Bugging out

2008-07-15T22:27:00.000-05:00

Salmonella is haunting my social life. Lately, while dining with wife and friends, I’ll look up to find the whole table staring. Then the Simon Says starts. Peter spears a tomato wedge; everyone spears a tomato wedge. A bite of lettuce, and soon the whole party’s crunching. It’s like having dinner with a newly discovered aboriginal tribe that’s not sure what to do with a fork.

Finally, the ah-ha moment: “Peter writes about food safety,” my wife whispered across the table to a couple whose acquaintance we were just making. “He’s been covering this whole salmonella thing and what they think may be causing it.”

Suddenly, I’d become the arbiter of what’s safe to eat.

So, of course, I started messing with them.

A forkful of salad, then a loud, showy gulp of wine. “Kills the germs,” I whispered conspiratorially to my fellow diners. Soon they were knocking back the red and white like pirates on leave.

I’ve been tempted to stare at my full plate for a second, yell “oh, no,” then bolt from the table. But the situation is already too much like a Will Ferrell movie.

But dim-witted clowning might still be better from a restaurateur’s standpoint than the speculation my friends have demonstrated. Like the one who drinks warm soda because she saw a Sweeps-week news story about high bacteria counts in some restaurants’ ice. Or the college professor who hesitated, his fork in mid-air, after being served. “Tomatoes are okay now?” he asked. The only type on his plate were cherry tomatoes, which had been cleared as safe to eat virtually from Day One of the outbreak. And this was six weeks into it, when the spotlight had shifted to peppers. “And how about spinach? Wasn’t there a problem with that?” he asked.

My wife, meanwhile, piped up with her theory that the culprit is probably onions. Not once have onions been cited by authorities as a suspect. But I’m sure she also blames onions for the housing crisis, reality TV and fallen arches. It’s a longstanding antipathy.

And the confusion is equally as persistent. Someday, hopefully before the list of casualties climbs any higher, federal health officials will figure out what has sickened almost 1,100 people. But until they do, customers are going to order in accordance with their preconceptions, regardless of how off the mark they may be. And they might keep doing so even after the mystery is solved.

Suddenly, everyone wants to be in onsite

2008-07-13T15:58:00.002-05:00

If Danny Meyer utters, “Nice day,” weathermen probably adjust their forecasts accordingly. He’s regarded with such respect and admiration that world leaders likely buzz him from time to time at Gramercy Tavern or Union Square Cafe, eager to check their world view against his. And what’s he likely to say if the Pope makes small talk about where the restaurant sage is planning to open restaurants during times like these? The Pontiff must grab his hat when he hears “onsite,” a segment once typified by cafeterias and scaled-down outposts of the big fast-food chains.

Yet that’s the bold expansion initiative that Meyer detailed late last week to the onsite specialist of Nation’s Restaurant News, Elissa Elan. Meyer has created a new division within his Union Square Hospitality Group, an operator largely of fine-dining restaurants, expressly to develop the group’s concepts in pro-sports facilities from coast to coast.

Meyer is hardly alone among celebrity restaurateurs and fine-dining specialists in diversifying during these challenging times into so-called captive markets. A few years ago, Wolfgang Puck and Todd English snagged a sea of ink by lending their menus and reputations to airport locations. Once a footpath, that alternate route is quickly being trampled into a major thoroughfare as operators seize the opportunities of opening in department stores, sports and concert arenas, bus and train stations, casinos, hotels, ski resorts, even spas. It may be just a matter of time until a hospital patient can call down and have a meal brought up from the Gordon Ramsay outpost on the main floor.

Meanwhile, a whole new wave of chains, full and limited service, are right there with the folks in chef’s whites, vying for their piece of the onsite scene as well. As Elan also reported last week, you can now add IHOP to a list that already includes nearly all of the big casual-dining brands.

The deals are as diverse as the concepts involved. But you can readily assume some common advantages. For one thing, there’s the attraction during a time of softening streetside traffic of having a built-in market of sorts. The business can come in peaks and valleys, depending on events and the season of the year. But those peaks can be pretty high.

Operators also cite the sweetheart deals that some places will extend to put a big-name brand on the premises. And even without significant build-out assistance or a dream rent, the situation carries certain incremental advantages that can add up to a big plus. Several years ago I had dinner with a casual-chain operator who’d just landed his first casino location. The volumes he expected were astronomical, based on the host facility’s traffic. But, he noted with glee, his costs would be cut by piggybacking on the place’s purchasing, maintenance, inventory-control and credit card processing functions. It amounted in his case to a point or two of margin.

Of course, the risk is also sky-high. Screw up in a streetside location and you damage your reputation in the local market. Botch things in a site where half the world can be turned off and you have quite a comeback to engineer, on virtually a nationwide scale.

Which brings us back to Danny Meyer. He’s revered as the Jimmy Stewart of the restaurant industry in part because he foregoes gimmicks and bandwagon jumping. As he told Elan, USHG’s new Hudson Yards Sports & Entertainment division will try to learn next year from its initial at-bat, at the New York Mets’ new homefield, before swinging for the fences. It also plans to work with an experienced concessionaire, starting with Aramark at the Mets’ new Citi Field.

But his decision to move into onsite will likely be taken as a sanction. Meyer has yet to close a restaurant, or even backtrack from one of his initiatives.

Indeed, one of his most successful endeavors, the Shake Shack retro-styled burger concept, was actually a good deed that turned great, like cutting the elderly neighbor’s lawn and discovering oil in the process. It started as a cart in Madison Park, across from his Tabla and Eleven Madison fine-dining restaurants. Meyer’s staff sold hotdogs in the park as a public service, a payback to the community. The dogs became so popular that the city gave Meyer a nifty 1960s-style building in the park, where the lines were soon dozens of people deep.

Now Shake Shack generates volumes that rival some of Meyer’s white-tablecloth places, according to members of his organization. No wonder it will be one of the anchor concepts of Hudson Yards, with each new stadium or arena likely to sport one, according to Meyer.

Is there green in green?

2008-07-03T08:50:00.001-05:00

The green movement has been a boon for puffins and wombats, but what’s it done for participating restaurants’ P&L’s? Subway co-founder Fred DeLuca used a rare public appearance earlier this week to divulge a few dollars-and-cents results for his brand.

The chain has snagged a fair amount of ink for what franchisees are doing with eco-friendly restaurants. The first wave—one unit in Florida, two in Oregon—did enough environmentally to earn a LEEDS (Leadership in Energy and Environmental Design) certificate from the U.S. Green Building Council. It's the Good Housekeeping Seal of Approval for ecological effort, earned in this instance by the use of ceiling tiles made of recycled material and reliance on sunlight for much of the interior illumination, among other steps.

The first green Subway, in Florida, cost $10,000 to $15,000 more to build than a conventional unit, DeLuca said during the Food and Restaurant Industry Forum, an event co-hosted Monday on Wall Street by the National Restaurant Association and NASDAQ.

The “jury is still out” about what return the franchisee might see on that added investment, DeLuca said. But he voiced doubts that the payback will offset the cost differential.

The wildcard, he said, is the value of public appreciation. “Some customers do choose that store over others—customer appreciation could pay off in the long term,” he explained.

Headquarters has described the green Subways as labs, and not necessarily prototypes. Officials say the stores will be used to develop and refine eco-friendly processes and features that could become part of the chain’s specs. They’ve also indicated that the first three units will be monitored for at least a year to determine how Subway’s operations mesh with the green backdrop. They’ve described the tests in part as an attempt to realize new efficiencies

The Florida unit opened in November, and the first foot long was served up in the Oregon stores in December.

July fireworks

2008-06-30T16:31:00.000-05:00

Can I pour you another cup of coffee? How about another plate of carbs, or maybe something sugary to keep you going? You’ll definitely need more than the usual oomph and sustenance to get through July, which should have been specially named for restaurateurs. National Eye Poke Appreciation Month, perhaps.

This, after all, is a stretch when the industry will experience more firsts than the freshman class at Party U. If only it were to be as much fun. Or even in the same range as a wolverine attack. Instead, the industry can look forward to unprecedented bans, mandates, cost hikes and marketing experiments.

Start with the first-ever ban of trans fats in restaurant baked goods, which takes effect as of 12:01 a.m. tomorrow in New York City, or, as the local board of health is determined to rechristen it, San Francisco-East. Folks in that famous West Coast pit of activism now look at the Big Apple and mutter, “Whoa, those folks are crazy. Where’d they come up with these laws?”

New York actually banned trans fat some time ago, but provided a grace period for baked goods because of the logistical problems. Some chefs say it’s hard to deliver the light, flakey quality you want in pie crusts or pastries without using trans-fat-rich shortening. If they haven’t figured out how to do it by now, they’ll hear about it from the health department starting tomorrow, though fines won’t be levied until October. It’s the city’s version of double-secret probation.

By that time, getting fined could have lost its novelty for New York’s chain restaurants. About 2,000 of them will be subject to financial penalties as of July 19 for failing to comply with the city’s calorie-disclosure requirement, another first-in-the-nation distinction. Early assessments of compliance levels suggest a lot of restaurants will be writing checks.

Of course, restaurants everywhere will be punching up the checks they cut on payday. On July 24, the federal minimum wage rises to $6.55 an hour, from the current $5.85.

That may be the most universal of the changes. Perhaps the most limited is the virtually overlooked menu-labeling requirement that takes effect tomorrow in Mississippi, which is to catfish what Iowa is to corn. Starting at midnight, restaurants with catfish on their menus will be required to let patrons know the origin of the fish. If it comes from Mississippi, the place can meet the requirement by erecting a sign or placard on the premises. But if it’s imported, that fact has to be pointed out on the menu, in the same font and type size as everything else.

Feature Mississippi catfish, and you have to post a sign. Feature another nation’s, and you have to reprint your menu. The impression of the state’s school system may be about to change.

Carbon footprints on restaurateurs’ backs

2008-06-27T12:10:00.002-05:00

This just in from the Wile E. Coyote Falling Anvil Alert Service: Stay inside. The well-intentioned forces that hope to make the world a better place for chipmunks and koala bears are about to drop some serious (and no doubt recycled) iron on the restaurant industry.

You might even spot some casual-dining operators atop the cliff with them, though they could end up victims as much as supporters. Their curbside takeaway business would no doubt benefit if the ecologically-minded put the brakes on quick-service drive-thrus, as a number of activists are already vowing because of pollution concerns. The proponents of bans on drive-thrus or car idling could probably live with casual dining’s system of running an order out to patrons’ SUVs or hybrids as soon as they pull into designated parking spots.

It’s the drive-thru that has the Dark Greens stomping their Birkenstocks. Isn’t wasteful idling as much a part of that experience as yelling into a microphone? And isn’t that both contributing to global warming and wasting precious gas? Why not ban it?

And that’s exactly what Minneapolis did a little over two weeks ago. Cars that sit still outside of traffic for more than three minutes have to shut down their engines or risk getting ticketed.

Other areas, like Madison, Wis., are weighing the possibility of banning new drive-thrus. And interest in that method of cutting auto emissions is approaching a national crusade in Canada, with at least nine major cities considering a prohibition on the drive-up.

But the casual restaurant operators may soon have their own sustainable fish to fry. Conservationists hoping to stigmatize bottled water on ecological grounds succeeded last week in recruiting the Klingon Empire to their cause. After hearing that San Francisco mayor Gavin Newsom had outlawed his city’s purchase of bottled water, the U.S. Conference of Mayors passed a resolution that obliges the 250 members to look into a similar rule within their respective jurisdictions. Already, the tribal leaders of Ann Arbor, Mich., have agreed not to allow bottled water to be served at city events.

So far, restaurants have only been pressured by the pro-tap forces to stop selling bottled water, instead of being forced by law. But certainly that insistence they forego the high-margin item is going to grow much, much stronger. Indeed, the industry is even hearing it from its own members. At the trade’s big convention last month in Chicago, some attendees groused that the panel of speakers at one event was provided with single-serving bottles of water, instead of a pitcher and glasses. It probably didn’t help that the green movement was going to be one of the topics discussed.

So what’s an industry to do? For one thing, catch up with Road Runner of public opinion. When I mention the possibility of a drive-thru or idling ban, restaurateurs always shoot me that same look they’d direct at a deranged street person. It reminds me of the bemused look they used to get when the topic of menu labeling came up at the beginning of the decade.

Secondly, the debates have largely been waged thus far on the basis of emotion, not fact. How much pollution do cars in a drive-thru actually contribute, and how does that compare with the emissions generated by parking, or stopping and starting the engine?

And what is the carbon glass print, so to speak, for water that comes from a bottle rather than a tap? How much energy is needed to wash pitchers or glasses for the stuff that comes out of a pipe in the kitchen? And how much of an impact did that pipe have? What about the effect on reservoirs that have already dwindled below the high-water mark?

Some hardcore research is clearly needed. Just try to avoid a provider that goes by the name of Acme. Its products have proven time and again to be ineffective, especially if they have a fuse.

Daydream believers

2008-06-23T10:50:00.001-05:00

I was trading air-guitar licks the other day with Bluto Pilkbean, the imaginary childhood friend who helped me invent the flying car and a way of extracting super-human strength from Twizzlers. He’s recently made a name for himself in the fanciful field that’s filled many a restaurateur’s daydreams of late, the silver bullet.

“Pilkbean,” I said after we’d decided not to take the Sports Illustrated swimsuit models to dinner, “do you really buy this malarkey? So many things are stacked against the industry that all the experts are calling this a perfect storm. An operation is going to soar out of hell just by adding sliders or upgrading its coffee?”

“This from the person who believed he could obliterate all homework by electrifying Silly Putty,” he retorted. “Besides, you’re forgetting that most adapters combine the magic pills. McDonald’s is focusing on breakfast and beverages. Taco Bell is embracing cheap-o deals and new drinks and breakfast. Applebee’s is not only touting sliders and bargain-rate lunches, but also inviting customers to submit videos for a new campaign. It’s a matter of mucho mojo, mi compadre.” Pilkbean had never been quite the same since the trip to Tijuana.

“Who cares if you offer five or 50?,” I responded. “What does it get you other than one turn of consumers’ heads?”

“A point of differentiation.”

“For how long? If these killer plays do anything, everyone and their cousin copycats ‘em. It’ll be curbside takeaway or the Bloomin’ Onion all over again.” I looked to see if he was reaching for his combination death ray pistol/Pez dispenser, because I had him now.

“There’s always something new,” he noted calmly.

“Such as?”

“Well, right now some fast-casual chains are adding table service. All kinds of concepts are giving away food to bolster traffic. Eat ‘n Park and Chipotle are supposedly looking to use more local ingredients. Red Lobster just announced that it’ll give space on the menu to a dish created during one of those cooking-contest shows.”

“Isn’t that exactly what Friday’s did?”

“Well…maybe. But there’s talk of going even farther afield. Some concepts are talking about radical steps like upgrading service, renovating dining rooms, or”—he actually shivered at this point—“trying to hire and retain the best employees. Gives you goose bumps, doesn’t it?”

“You’re an idiot,” I assured. “Now let’s get back to work on our Red Sox immobilization spray.”

(Jolly old) BK sliders

2008-06-17T15:38:00.000-05:00

Even with the U.K.’s love of all things royal, the Burger King may never have enjoyed a reception quite like he’s getting these days across the pond. The blogosphere is rippling with British-accented talk of the wooden-faced icon’s latest European menu addition, a product that seems likely to jump back home at some point. After all, what do Brits know about sliders?

Yet that’s what BK added to the menu of its British operations in late May. Not that this is your conventional mini-burger, a la what you’d get at White Castle, Krystal or any number of chains or fine-dining restaurants these days in the States. Indeed, BK’s new Angus 6 Pack is actually an oversized, scallop-edged burger that’s served with what could best be described as a modular bun. The patty is actually meant to be six small, interconnected burgers. The top and bottom of the bun are similarly styled. Patrons are urged to pull the item apart to form six minis—two topped just with catsup, two with catsup and cheese, and two with bacon added to those garnishes.

If the Angus 6 Pack is indeed added to the menus of stores in the U.S., it wouldn’t be the first time that Burger King featured sliders. In the 1980s, the chain added a multi-pack of minis called Burger Buddies. The product was indeed to be purchased as a snack. But franchisees yelped about the item because the little patties would slide through the grill of the concept’s signature chain broiler.

The use of a bigger, six-in-one patty would alleviate that problem.

Applebee's to try a chill pill?

2008-06-13T11:25:00.000-05:00

Consumers may soon be spying a stockpile of thermometers behind the bar of their nearest Applebee’s. The new parent of the troubled casual-dining brand is looking to put more fizz into alcoholic beverage sales, and one of the means it’s considering is the schtick used by a franchisee in Ohio. The operator touts his beer as the coldest beer in town, and proves it by putting a thermometer into each glass when he serves it.

Julia Stewart, chairman and chief executive of DineEquity Inc., the clunky new moniker of IHOP Corp., told investors last week that Applebee’s new executive team will likely check out the gimmick for possibly wider adoption. “Don’t laugh—there’s probably a notion there that I want to exemplify [sic] and test,” she said at the Goldman Sachs Investor Conference.

During the Q&A session following her presentation, Stewart noted that Applebee’s is already one of the nation’s highest-volume beer sellers, but observed that wine could represent an opportunity.

She also repeated an earlier avowal to avoid the prior administration’s mistake of trying to make Applebee’s menu more sophisticated than patrons would like. She indicated that the brand should stay within its niche with she characterized as finger-food-type items. But she also noted that the bill of fare needed an update. Deep-fried mozzarella sticks were cited in particular as a tired nod to yesteryear.

'There goes the free Starbucks'

2008-06-12T12:57:00.000-05:00

The worst part about getting fired from the CEO’s job at Starbucks is having to tell your mother, according to Jim Donald, who found that out for himself in January. Four months later, he was willing to talk about that day with a Fortune magazine editor, who convinced him to join two other victims of high-profile sackings for a joint soul baring of what they’d learned.

But it was far from a pity party. “This is what happens in the big leagues,” Donald remarked during the four-party Q&A with Fortune’s Patricia Sellers. He and his fellow boardroom casualties—JetBlue founder David Neeleman and former Motorola CEO Ed Zander—offered a dry-eyed assessment of why they were deposed.

Donald, for instance, said he should’ve pushed for faster international development. “The international markets don’t have as quick returns as the U.S.,” h said. “But if I’d known the U.S. economy was going to crash, I would have invested earlier.” His replacement as CEO, board chairman and former head bean Howard Schultz, has pledged to accelerate Starbucks’ development overseas while shutting weak U.S. outlets.

It was Schultz, Donald said, who actually wielded the axe, and he did it after giving his one-time protégé a hug. “It was on a Sunday evening, at Howard’s house,” Donald told Sellers and his fellow topple-ees. A greeting was followed by an embrace, then the news that Starbucks’ board had decided to make a change. Donald made it sound as if he didn’t have time to put his latte down.

The 54-year old said he headed home, where his wife expressed surprise that he’d was back already. “Laura said, ‘Wow, that was a quick meeting. Did you lose your job?’ I said, ‘As a matter of fact, I did.’”

The one-time head of Wal-Mart’s grocery operations said the most painful part of the experience was calling his mother the next day. Indeed, he said, that experience “probably” made it “the toughest day I’d ever faced, ever. Ever, ever, ever!” But, he indicated, she took it well.

Donald expressed no resentment about what happened to him. Nor did he speak of Schultz in anything but a neutral tone. Sellers asked Donald if he’d ever work again for a company’s founder, as he did at Schultz (a nit-picking point: Schultz founded Starbucks Corp., but not the Starbucks brand).

“Founders have a way of being engaged in the business, being emotionally connected to that brand or to that product,” he responded. “So would I work for a founder? Yes, absolutely.”

Web watchdogs can definitely bite

2008-06-09T22:56:00.005-05:00

The Wall Street Journal outed several chains this weekend for switching to smaller beer glasses without adjusting prices or otherwise letting on. You’d think that’d trigger a fit of spin-doctoring from the likes of Hooters, GameWorks, Damon’s and Romano’s Macaroni Grill, but they wisely offered nothing more than the few qualifiers and no-comment that were included in the article. Even then, they came within a maraschino cherry stem of being sentenced to eternal avoidance by the modern-day equivalent of vigilantes: Web habitués who share a fanatical cause. In the era of the keyboard-empowered consumer, reckless indeed is the consumer brand that tries to pull one over on patrons, especially when it comes to value.

The situation is nearly a perfect homily as to why. The Journal, after all, was merely a messenger, relaying the lynch-mob talk that the chains and other beer-serving establishments had frothed up by switching from true pint glasses, capable of holding roughly 16 ounces of brew, to variations with a thicker glass bottom that leaves room for only 14 ounces. The motivation is obvious: With grain prices driving up the cost of beer, cagy operators are holding the price of their standard tap serving while slyly providing less beer.

As the article noted, consumers are catching on, and fast. Seven months months ago, a college researcher with a blog called Beervana started what he dubbed The Honest Pint Project, whereby he’d push for a full 16-ounce tap beer by publishing the names of drinking establishments in his native Portland, Ore., that offer a serving of at least that volume.

The parent of the Honest Pint Project, identified in the Journal article as Jeff Alworth, has raised his ambitions since then. “I will support a statutory change if it comes to that—and maybe it should,” he wrote in a blog installment posted today.

Yet Alworth sounds like an aggravated PTA member compared with the hops panthers who offered their comments, suggestions and assessments on beeradvocate.com. “So if there’s a beer bar on this site that has recently adopted this practice, can we call them out?,” asks a poster identified as guzzle211, who joked that he was already lighting a torch.

“What would it take to get legislation passed with regard to this? How did they do it in other countries?,” asks Josquin.

It goes without saying that establishments switching to what a Journal source dubbed “falsies” shouldn’t try to deceive patrons about the change (for the record: GameWorks said a mistake in glassware was made at a single unit, only franchised Hooters units offered the smaller glasses, Damon’s does not deny the change, and Romano’s had no comment). Risking the alienation of longstanding customers over two ounces of tap beer is crazy enough. Amplify that by the speed of gripe on the internet and there’s no doubt about the glass being half-empty.

A turn for the worse on menu labeling

2008-06-07T12:13:00.000-05:00

One of the industry’s key defenses against menu labeling has been rendered useless by a recent court filing that could also break up the trade’s Hail Mary play for softening the impact of nutrition-disclosure mandates. The actions, little-noticed outside of the regulatory and legal worlds, came not from the restaurant business’ usual adversaries on diet-related matters, but from the hoped-for ally known as the U.S. Food & Drug Administration.

The development was the latest in the prolonged legal effort by the New York State Restaurant Association to overturn a New York City requirement that local chain units post calorie counts on menu boards, regular bills of fare and drink menus. The association filed a lawsuit in federal court that asserts the city does not have the authority to regulate nutrition disclosure, since that power resides exclusively with the FDA.

Not so, the FDA itself said in a friend-of-the-court brief that was filed on May 29. The agency, which has been expressly granted the right to specify and police what nutritional information is printed on grocery-store items, told the court that it doesn’t have a hammerlock on menu disclosure. Only if a restaurant makes a health-related claim—such as pronouncing an item life-prolonging or cholesterol-reducing—do FDA rules pre-empt state or local regulations, the agency said.

The take-away for state and local jurisdictions that want to require restaurants on their turf to divulge nutrition information for all menu items: Knock yourself out.

The filing by the FDA, which had been requested by the 2nd U.S. Circuit Court of Appeals, in effect scuttles the pre-emption challenge that a number of restaurant groups have either eyed or actually tried in their efforts to fend off labeling mandates. But the damage to the industry’s defense strategies could go farther than that.

As I’ve mentioned in a column, there’s a growing sensibility within the restaurant industry that menu-labeling requirements are going to be a new reality, no matter how unpleasant the trade might find them. It’s a tide that the business may simply not be able to hold back. Some broad-minded thinkers are proposing behind closed doors that the industry temper the effects by suggesting the federal government take the lead on menu disclosure.

That way, the proponents argue, chains would have to meet only one set of disclosure standards from coast to coast, instead of a hodgepodge of obligations that could vary from town to town. Chains that operate in both Seattle and New York, for instance, will be required to provide one set of info on the West Coast, and another type on the East. Branches in the two cities will almost certainly end up with different types of menus and menu boards, which may be still different from the ones required for Santa Clara or San Francisco Counties in California.

But now the FDA has said that Congress didn’t want it to regulate restaurants, so states, counties and municipalities are the ones to fill the void. I’m certainly no lobbyist, but it seems that the industry would have to push legislation through Congress that would call for menu regulation by the agency. It could be one of the smartest things the industry has ever done. But a firefight will almost certainly erupt as rank-and-file operators balk at the notion of asking for government regulation. In the minds of those who are still thinking in yesterday’s terms, it’d be like pushing for a tax increase.

And then there’s the wild card that was dealt to the industry just this past week. A group of consumers has sued Applebee’s and Brinker International for allegedly misstating the nutritional information they voluntarily post on their menus. The class action suits allege that Applebee’s understated the fat content of its Weight Watchers-branded selections, and that Brinker similarly bent the truth the same on Chili’s Guiltless Grill section.

Those brands voluntarily disclosed information and ended up getting sued. When chain after chain after chain is posting analytical data to meet disclosure requirements, won’t the industry become the barrel where litigation-minded lawyers and consumers can draw a bead on the next fat tuna they’d like to fillet in court?

If the industry does proceed with its efforts to legislate federal labeling regulation, it would be well served to also incorporate some defenses against bounty-hunting of that nature.

Politics as unusual

2008-06-06T14:33:00.000-05:00

The public’s interest in politics has been honed to a keen edge by the uncertainty over who’ll be sitting in the Oval Office next February. But the restaurant industry has been doing less handicapping than hedging. Indeed, the trade’s main lobbying forces have been quietly seeking insurance of sorts to protect the trade’s political interests regardless of who prevails in the November election.

That was evident during last month’s board meeting of the National Restaurant Association. As we reported at the time, the group voted to pursue an initiative whereby restaurateurs would be solicited to work in the campaigns of whichever candidate drew their support. The objective was to have a member of the business inside the tents of what were then the three main candidates. “When they win, we want friends who were friends [to them] before they won,” explained Bob Leonard, the IHOP franchisee who heads the NRA’s Political Action Committee.

That effort to curry favor with Democrats as well as Republicans has been seen in other actions by the group, large and small. For instance, as was noted earlier in this space, the association lined up John McCain to deliver a keynote address at its annual mega-convention in Chicago. I and apparently others chided the NRA for always selecting a speaker from the more sympathetic side of the aisle instead of taking a nonpartisan approach to booking presenters. In press releases issued after McCain appeared, the association noted that Sens. Hillary Clinton and Barack Obama had been invited to appear as well but had declined. It didn’t sound like the same NRA that had once boasted about its insider status with the Republican White House. It was as if it quietly removed that elephant pin from its lapel.

Fast forward to earlier this week, when the association and its longtime ally, the National Council of Chain Restaurants, formally praised a new law that aims to protect restaurants from being sued for printing credit card expiration dates on charge receipts. Obviously the two groups had pushed for the measure. They succeeded in part by working with Rep. Barney Frank, the liberal Democrat from Massachusetts, and Sen. Chuck Schumer, a party standard-bearer from New York. These are not the industry’s usual allies.

The NRA and its usual cohorts haven’t switched allegiances, to be sure. The group reportedly spent $200,000 last week alone to help one of its own, former chairman Ed Tinsley, win the Republican nomination for a U.S. House of Representatives seat from New Mexico. The association has very expressly indicated that it wants a member of the industry inside the Capitol, watching out for the business and presumably working closely with it to promote favorable measures. It’s hardly standing on the sidelines in that contest, and the party it favors is no secret, at least in that Congressional race.

But clearly its striving to work with the party that’s quite possibly going to control both the White House and the Capitol next year.

Every time restaurateurs are surveyed about what they regard as their biggest concerns, burdensome politics and regulation rank high on the list. If the industry slipped into a partisan mode in the current environment, that concern may move even higher.

Instead the NRA and the NCCR are taking a more pragmatic course. And it could prove a smart one indeed.

Goody's no gum drop

2008-06-04T17:26:00.000-05:00

Here, completely free of charge, is my suggestion for how McDonald’s should advertise the under-sung health move that it made today: As a camera pulls back, viewers see shadows starkly playing against a wall. It’s clear what the two people out of range are doing to make the images dance across the backdrop, even if they can’t be seen. Elbows are swung, holds are attempted and broken, a body is lifted and slammed to the ground. Grunts and outcries of pain are interrupted by taunts of “No trans fat to slow me down now, huh?,” “What, not enough niacin?” and “Oh, too few calories to keep going, Buttercup?” The frame pulls back to reveal Cindy Goody, the quick-service chain’s new U.S. director of nutrition, sitting atop a prone Marion Nestle, the famed nutrition gadfly, her arms firmly pinned to the ground. “Well,” says Goody, “I guess we know who’s going to be doing the talking about McDonald’s nutritional values from here on in.” Cue the “I’m lovin’ it” theme music.

A tad extreme, admittedly, but it does get across the point that McDonald’s USA has fortified itself with a well-known, highly respected new authority on family nutrition. Indeed, it’ll be harder for the diet activists to throw mud at the chain with Goody lending her reputation to Big Mac. This, after all, is the Ph.D holder who once crafted an article called “Snack Attack! Over 150 Guilt-free Treats for Healthy Munching.” And we’re not talking about a story in “Family Circle.” She wrote it for a professional journal called “The Diabetes Educator.” It’s just one of what appears to be a number of instances where Goody melded a scholarly and a popular approach to nutrition. If she manages to similarly synthesize those sensibilities for McDonald’s, she could be a formidable addition indeed: Nutritional science in a wrapper of plainspoken, sensible language.

Skeptics will no doubt disparage the hiring as a sop to the nutritional whiners. Nestle and her ilk carping again about too much fat or way too many calories? Quick, trot out Goody and a plate of Apple Dippers.

McDonald’s would deserve a skewering if that proves to be the case. But if it actually does tap Goody’s expertise to develop more healthful choices and teach the public some fundamentals about eating right, the development will be a goodie indeed.

Surgical scars from cutting costs?

2008-06-01T22:24:00.001-05:00

The only thing that could make commodity costs any scarier is having your distributor sales rep show up in a hockey mask. No wonder restaurateurs are going to extremes to bring down their expenses. It should be even less of a surprise that some are now realizing they’ve gone too far.

The Le Madeleine bakery-café chain found that barrier last week, as it acknowledged to its hometown paper, The Dallas Morning News. As officials explained, local customers let the chain know loud and clear that they weren’t going to pay for bread they formerly got for free. The charge came to only 50 cents for two slices of the sourdough bread, and that was levied only if the patron didn’t buy an entrée, soup or salad. What’s more, the shift had been tested in other locations, reportedly with no fallout.

Not so in Dallas, where the chain has been a favorite for two decades. After receiving hundreds of e-mailed complaints, the chain discontinued the cost-cutting measure. “We made a mistake and we adjusted," CEO Mike Shumsky told the News.

A similar public admittance came Sunday from Eric Kozlowski, a co-owner of the Primanti’s restaurants in south Florida. When a moonshot in cheese and flour prices cost the Italian eateries an extra $2,400 a week in food purchases, the company switched to lower-quality flour for its pizzas, Kozlowski told The Miami Herald. Patrons couldn’t discern the change from the menu, but they could certainly taste it, according to Kozlowski. “I was saving money, but I was potentially chasing away some of my customers who are really pizza connoisseurs,” he told the Herald.

He and his partners reportedly switched back to the higher-grade flour and then raised the price of a large pie by $2.

According to the article, sales jumped 10 percent.

Judging the elasticity of consumer tastes may not be that easy. Recent days also brought an acknowledgement from Miller Brewing that consumers are trading down from premium brews to bargain-priced beers, which presumably would also cost restaurants less.

Who wants a CEO's job? Not some CEOs

2008-05-28T23:20:00.002-05:00

This has been a day of eerie coincidences. Bombshell developments required us to change the top story on our website three times in roughly eight hours. In each instance, a big-name restaurant chief was leaving a sizable multi-chain company, to the gape-mouthed surprise of everyone else in the business. Russ Bendel from Cheesecake Factory, Ken Keymer from the parent company of Village Inn and Bakers Square, Clay Dover from Bennigan’s operator Metromedia Restaurant Group—each seemed firmly entrenched in the job, if for no other reason than the ink on his business cards had barely dried. The longest-serving among them (Keymer) had logged a mere 13 months in the job; the most recent to stake out the corner office (Dover) had been there just six months. (Bendel, for the record, had only nine months’ of wear on his office chair).

All persevered for far less than the three to four years that studies have pegged as the average time of service for a corporate top executive. It’d be easy to attribute the simultaneous changeovers at three radically different companies to sunspots, global warming or the behind-the-scenes meddling of mutant Steinbrenner offspring, were it not for another trend emerging in restaurant-executive employment.

Last week, we reported that Phil Hickey, the former CEO of LongHorn and Capital Grille parent Rare Hospitality, had bought the four-unit Jocks and Jills sports bar chain. Phil has the sort of resume that would make every headhunter in the country want to have him on speed-dial, regardless of the industry they served. And when Rare was sold to Darden last year, securities filings indicated that Hickey recieved enough of a payout to make work an option, not a requirement. Yet what does he do? He opts for something entrepreneurial.

Similarly, David Goronkin resigned last December as CEO of the Famous Dave’s barbecue chain to take the top day-to-day management job at Redstone American Grill, a start-up from the same concept creator who hatched Champps.

Perhaps not coincidentally, Bendel told Nation’s Restaurant News that he resigned as president and COO of Cheesecake’s restaurant division to pursue “an entrepreneurial opportunity.” He wouldn’t say what it was, but noted that he’ll be switching to the new undertaking in a matter of weeks.

Against that backdrop, it’s easy to understand why executives might stay in a top restaurant job for a shorter stretch than they did in the past. Metromedia’s Dover, for instance, readily acknowledged that he opted to leave because of disagreements with the company’s owners. The times are grueling, investor patience seems to have shortened, stakeholders insist on an active management role, and we’ve reached the age of the plug-in executive, where a chief may be brought in for a very specific task. Vicorp stressed that it chose Harem Ouf to succeed Keymer because of the newcomer’s experience in bringing companies out of Chapter 11 bankruptcy protection, where it slid during Keymer’s watch. (Keymer, for the record, said he would retire at the end of the week).

Restaurant executives can be ground up and spat out in no time in an environment like the present one. The job is so grueling that it's hard not to be dissatisfied--with the individual who's trying to fulfill it, or with the situation itself. No wonder so many seasoned pros are assessing the task of running a big public restaurant company and deciding it’s not for them. They’ve decided to forego the pressure, lessen the hassles, and get back to doing what they enjoyed. Why waste your fruitful years dodging bullets?

Regardless of which party opts for a CEO or president’s exit, there’s little doubt that the foodservice revolving door is going to spin a little faster in the months to come. We were actually investigating reports today that a top executive had left a fourth well-known restaurant company, but couldn’t get a confirmation from the concern itself. But stay tuned. He's likely to be one in a parade of executives who find themselves arising from a hot seat in the near future. By their employer's choice, or theirs.

'No-match'? How about 'no-sense'?

2008-05-27T18:11:00.001-05:00

In another sign the donkey from “Shrek” is really running the country, a much-respected restaurant operator in Minneapolis is reportedly being picketed, petitioned, denied business, flayed on the internet and possibly left short-staffed, all because it followed the White House’s rules for countering illegal immigration. Straight from the files of Ripley‘s is this account of a company getting caught in a disastrous tug-of-war. And if that’s not enough of a sideshow draw, consider the really amazing part: It could be a preview of what’s in store for other restaurateurs if the government makes good on a pledge to drop more no-match letters into the mail within the next few weeks.

The tale began last fall when the D’Amico & Sons chain received a batch of the letters from the Social Security Administration. The letters, if you’ve strangely never had the experience of receiving one, alerts employers that the Social Security numbers provided by an employee don’t match the information in the agency’s data banks. Perhaps the numbers were assigned to someone with a different name, or the number just doesn’t exist. Or perhaps the new hire was recently married or divorced and is now using a different surname.

Regardless, the employer is given the heads-up that the discrepancy has to be reconciled. Otherwise, the Bush Administration would like the employees to be canned because they could be illegal immigrants using bogus I.D.s. It tried without success late last year to make that preference an obligation, but was thwarted by the courts.

In any case, D’Amico dutifully alerted the 15 or so employees of the no-match notices. According to reports by media ranging from Minneapolis Public Radio to the Twin Cities Daily Planet, the employees were given seven months to rectify the mismatches of information. Initially, according to the reports, the staffers were told to write the Administration. Later, D’Amico execs advised them to go visit agency and clear up the problems in person.

Only one employee apparently followed the counsel. The rest did not settle anything with Social Security. So D’Amico fired them at the end of March.

The company acknowledged that no-match letters aren’t yet grounds for firing people. But it also argued that some employers have been accused of helping illegal immigrants break the law because the companies had unresolved no-match letters in their files. The unheeded communications were taken as signs of complicity.

According to the MPR report, D’Amico said it terminated the employees, including several with more than a dozen years of tenure, because they didn’t follow the company’s directives.

The weeks since have made D’Amico the targets of such big-name dvocacy groups as the Students for a Democratic Society, the Industrial Workers of the World (better known as the Wobblies), and the sanctimonious-sounding Workers Interfaith Network. The discharged workers have also turned for assistance to the Equal Employment Opportunity Commission, alleging that they were the victims of prejudice since all were Latinos.

Meanwhile, petitions have reportedly been drafted, and Minneapolis-based bulletin boards carry consumers’ accounts of seeing picket lines outside the restaurants they’ve known as customers. Some delivery trucks apparently refused to cross the pickets. The Wobblies claim that some D’Amico employees staged an impromptu sit-down at one restaurant.

“I went to D’Amicos often and loved their food and ambiance,” said one poster on the Daily Planet’s website. “I will be boycotting the company from now on.”

MPR said in its report that a banquet customer cancelled its booking with D’Amico because of the situation.

Meanwhile, the federal government apparently hasn’t commented on the situation, much less clarified the obligations and rights of both parties in the matter. Instead, it’s silently leaving D’Amico as its proxy.

After a court struck down the Bush administration’s efforts to require employers to fire staffers who can’t fix a no-match situation, officials from the Department of Homeland Security expressed confidence they’d eventually prevail in their efforts. It indicated at the time that it would address the objections that prompted a federal court in San Francisco to strike down the fix-it-or-nix-it aspect of the law. Among the flaws that were cited by the court was the mere 90 days that was granted to fix a mismatch in Social Security info. That and other concerns prompted the court to bar the Social Security Administration from sending out letters that threatened penalties. The SSA said it didn’t have time to fix the content and resume sending the no-match letters, and suspended the practice.

But the agency said it planned to address a court directive and resume sending no-match letters again in the spring of 2008. The season ends on June 19, or about three weeks from now.

Tales of the talks

2008-05-22T17:44:00.002-05:00

Sit long enough in one spot at the NRA show and you’re likely to witness either an awards ceremony or a speech. Yet, my fellow sore-footed conventioneers, where was the event that tied the two together? Honors were bestowed for standout performances in any number of areas, from culinary-school academics to menu making. Similarly, I listened to more than 50 presentations from a podium during my four days at the show. Some of them clearly deserved the distinction of a prize. So here, to plug an obvious hole in the book-sized list of convention activities, is the inaugural presentation of the Outstanding Oratory Achievement Awards, popularly known as the Oo-Aahs.

Return of the Herminator: With Indiana Jones and Batman making their comebacks, is it any surprise that one of the industry’s own action heroes would strut back onto the stage? Herman Cain has been out of the business for eight or 10 years, working in politics and hosting a radio show in Atlanta. But he clearly hasn’t lost his touch for rousing an industry audience. The former head of the NRA and Godfather’s Pizza, who once shot up at a town-hall meeting to out-debate a stunned President Clinton, knocked the dust off chandeliers with two booming presentations. At a luncheon that brought together hospitality-school students and industry luminaries, the one-time senatorial candidate recounted how his father worked three jobs so he could realize his dream of buying a house where Cain and his brother would each have his own bed. “Twin beds?,” Cain boomed. “We’d been sharing a cot in the kitchen. We thought we’d died and gone to heaven.”

That night, at a gala where he was awarded the lofty distinction of Diplomate by the NRA Educational Foundation, Cain sounded a more somber tone. “Some of you may have heard that I had cancer,” he said in a voice that could slip deeper than a foghorn. “I say ‘had cancer,’ because I had cancer. I’m now 100 percent cancer free.” Word that he’d beaten Stage Four colon cancer, delivered in his evangelical style, had the audience roaring.

But he was no match for his fellow award-winner, a thoughtful, a bashful by comparison chef from Washington, D.C.

Ricchi rocks the house: The Diplomate designation was also bestowed that night on Chris Ricchi, chef-proprietor of Ristorante i Ricchi in the nation’s capital. Looking more like a surfer on spring break than a working mom with two grown children, Ricchi was profiled in a video that highlighted an aspect of her life that was unfamiliar to many of us. Ricchi’s son, the tape explained, had a disability that required his enrollment in a specialized school in the D.C. area. The place sounded like a wreck, with a leaky roof, grounds that had all the warmth of a war zone, and a food service whose only recognition would likely come from health authorities. An administrator recounted how Ricchi took a look at the place and calmly informed another parent, “We can do better.” She then proceeded to raise some $4 million for a transformation.

Taking the podium, Ricchi acknowledged that she’d raised the money by turning to her peers in the restaurant business, who “all opened their checkbooks.” Then she asked her children to stand, including the son whose life had been so powerfully affected by people in that very room. The applause could’ve been heard on the space station.

“This is it,” she roared with a fire that could only come from the heart. “This is what’s important. It’s all about how we can help others. And no one does it better than this industry.”

There were more napkins dabbing eyes than you’d see at a wedding.

But Ricchi wasn’t the only speaker to prompt the sort of sniffling you might hear from first graders on Day One of school. The industry was introduced the next morning to the well-spoken young director of training for Whataburger, who pulled no punches about where she came from.

‘I had to get out.’ “I grew up in Haines City, Fla., in a neighborhood where drugs were available 24 hours a day,” Nicole Jackson recounted in the printed bio that was handed out for the NRA’s Faces of Diversity Awards. “My mom worked a lot but partied a lot, so we lived with my grandmother.”

“We lived on public assistance, and I was told I could aspire to be a janitor or a maid,” she wrote. “I knew I had to get out.”

She did, ultimately picking the restaurant industry as her path. The first step was a crew position at a McDonald’s, earning $3.35 an hour. She quickly moved up there, was hired away by Krystal, and then by Whataburger. And there she was on Sunday, winning an award from the restaurant association for showing others how to climb out of their dire circumstances.

“It may seem like an award to you,” she told the directors of the National Restaurant Association. But for her, she explained, it was validation of the good she’d found in the job—not only for herself, but for the people with whom she worked every day. “We are counselors to 16-year-olds,” she exuberantly reminded the industry greybeards. “We are supplemental income because someone was a little short that month.”

Addressing some of the biggest names in the business, Jackson summoned an extra measure of volume and enthusiasm to let them know, “You wrote the lyrics to our new song. And we will pay it forward.”

On the rack at Steak n Shake

2008-05-21T17:57:00.002-05:00

Back in feudal times, kings merely boiled alive the serfs who failed to deliver all the wheat that was demanded of them. Today we have the far more gruesome ritual of the quarterly conference call. Expensive suits clearly fail to protect public-company officials from being grilled by disgruntled portfolio managers. And seldom has the sizzle been louder than it was during the recent confab between analysts and the executives of Steak n Shake. When the company’s co-founder dials in to deliver her can of whup ass, you know it’s going to be a tough Q&A session for the folks from headquarters.

Not that they were snapping on the “Applause” sign for the company’s performance. “Unacceptable,” spat acting president Jeffrey Blade. “We remain dissatisfied.” That “we” presumably refers to the whole executive team, though Blade might have been speaking only for himself. In addition to holding the job of interim president, he’s also serving as chief financial officer, chief administrative officer and executive vice president. And, of course, spokesman during conference calls.

At least he’s not responsible for finding a permanent CEO. That task is being shouldered by the interim holder of the title, who’s also filling in as chairman. Here, in full, is an update on the search from that point person, Wayne L. Kelley: “Since beginning the search process back in February, we have seen several well-qualified and enthusiastic candidates and we remain optimistic that this process of obtaining our new CEO will be concluded in the near future.” The decision to hire a new CEO was made in August, by the way. The sort of search that Kelley detailed apparently takes a few months to get rolling.

That wasn’t okay with one of the callers. Sue Aramian is little known outside of Steak n Shake, but she should be hailed as an industry pioneer, along the lines of Jackie Trujillo or Gretchen Mathers. Long before there was a Women’s Foodservice Forum, she was blazing a trail that led to what may well be the first vice-chairmanship in the industry to held by a woman. Aramian quietly oversaw a company called Consolidated Products, known today as The Steak n Shake Co.

“My name is Sue Armanian,” she said during the Q&A portion of the call. “I have been asked many, many times to comment upon the company that I co-founded with E.W. Kelley in 1981. I have refused every request until this statement that I am making to you.”

According to a transcript provided by Seeking Alpha, the online financial-information clearing house, Aramian proceeded to take Blade and another Kelley to task. She cited a “vacuum of leadership” and the “intolerable manner” in which shareholders’ values have dropped.

“You have operated with the same team doing the same thing get the same results,” she asserted, describing the status quo as “undesired.”

Noting that employees have voiced similar concerns to her, she told the officials, “it all stems from lack of good leadership and an understanding and appreciation of the basic concept.”

Blade’s response, quoted here in full: “I don’t believe there was a question in that, so we’ll go on to the next question.”

Skinner to casual dining: Watch your prices

2008-05-19T08:51:00.001-05:00

Jim Skinner, the CEO of McDonald's, offered some free advice to casual-dining executives during his keynote address yesterday afternoon at the National Restaurant Association's convention in Chicago. "If I were in casual dining, I would make sure I had an affordable menu, even if it had to hurt a little bit," he said. "That's where I'd spend my time, particularly today."

Skinner cautioned that he was speaking as a consumer, not as someone who's ever run a casual chain. Yet the readiness with which he offered that counsel in response to a question clearly indicated he'd thought about the matter from a business standpoint.

Earlier, he'd cited his own brand's offer of "everyday affordability" as the key reason for the chain's phenomenal success at a time when most chains are struggling.

"It's the most improtant thing right now with our customers, and you all know it," said Skinner.

"People like to say we benefit from a down economy. We do not," he said with considerable emphasis. He termed the chain "recession-resistant, not recession-proof."

Regardless of what type of restaurant or chain you run, he stressed, "now matter how good the experience is, if you don't have an affordable menu, you're going to have problems."

Miscellaneous stuff I learned at the NRA show

2008-05-19T00:06:00.001-05:00

The National Restaurant Association’s annual convention abounds in educational sessions, including 14 on green issues alone. But many of the revelations come elsewhere, as these minor gems attest:

Who said restaurants don’t offer health insurance? Oh, sure, you may find an operator here or there that takes a progressive stance on benefits, and there’s always Starbucks, the exception that ostensibly proved the rule. But few people in the general public—much less those in the industry—would expect to find health coverage available from the mega-sized quick-service chains, where the size, turnover and young age of the workforce presumably pushed the benefit beyond the point of feasibility. Not so, McDonald’s CEO Jim Skinner revealed in his address to convention attendees this afternoon. All 9,000 of the franchisor’s company-operated restaurants now provide employees with access to coverage. But, Skinner acknowledged in one of several surprising flashes of candor, “it’s available, but not necessarily affordable.” He seemed to suggest that affordable health coverage is one of the goals the industry should pursue in collaboration, instead of each operation scrabbling in isolation. More on that in a later post.

New fruits are ready to drop on the U.S. market. You never know who you’ll see or hear among the tens of thousands who attend the restaurant show. Who, for instance, would have expected to catch a cameo appearance by New Zealand’s ambassador to the United States at the NRA’s board meeting? Yet there was Roy Ferguson (are you supposed to put an “Honorable” or something before his name?), talking about the efforts underway in his country to provide American restaurants with delectable new choices. Among the bunch, Ferguson said, are new fruits like the kiwi berry, a kiwi that could be eaten without being peeled.

But that’s not the only new fruit heading to the States. Tonight a group of us from Nation’s Restaurant News visited the Chicago outpost of Sushi Samba, the popular fusion-cuisine concept from New York. The concept’s Joanna Cisowska mentioned that the restaurant is participating in a Brazilian food festival, a first-of-its-kind event in the city that was scheduled to coincide with the convention. The festival is aimed not at consumers but at American restaurateurs who are visiting Chicago for the show. The government of Brazil hopes to promote the foods of that nation to restaurateurs from all over our country. Among the items they’ll be invited to sample is a fruit called cupacu, which Cisowska described as a new “super-fruit” that could be as warmly embraced by the health-conscious as acai. At the end of the meal, we were surprised with desserts that were made with cupacu, a purple puree that contrasted beautifully with the tapioca below it. Apparently it’s hardly a novelty in its native land.

Pasta prices are hard to hedge. Bakers can try to temper the spike in wheat costs by locking into long-term contracts or otherwise striving to hedge against the inflation. Not so with duram wheat, the sort that’s by pasta makers, a supplier explained. The market for that variation is purely transactional—buy what’s available at whatever price you can, without the benefit of long-term deals. He also revealed that the price of the wheat appears to have topped out.

James Brown has a following on the NRA board. Association director and Golden Corral chief executive Ted Fowler once described the board as “stale, male and pale,” Multicultural Outreach Committee chairman Daniel Halpern revealed to his fellow directors in explaining why his committee had been launched several years ago. Now, Halpern said, the diversification push is bringing results, though the board can’t let up in that effort. The situation, he said, brings to mind the words of “the poet James Brown: ‘I’m not asking you to give me anything. Just open the door and I’ll get it on my own.’” Get down, y’all.

Vegas hookers will run you $250 an hour. That nugget was overheard on the hotel shuttle bus from the convention hall. The speaker was apparently enlightening a less-worldly compatriot who mistakenly thought Sin City was all about gambling, shows, and eating the food of famous chefs. The forced listener looked as if he’d have paid $250 at that moment for a can of Lysol. Given the look of the speaker, he must have had a coupon to get the rate he cited.

Elephant & Castle has the best meatloaf in Chicago. Overheard during that same bus trip.

Curtain rises on Chicago restaurant show

2008-05-18T00:11:00.000-05:00

The restaurant industry did its part today for Dr. Scholl’s and the trophy industry, converging on Chicago for its annual epic march through the aisles of McCormick Place, then rousing itself to cheer through a marathon of awards presentations. Yet the usual epidemic of blisters and vocal-chord strains were darkened this year by the whispered laments of business conditions. Operators started off cheerily, then slid into grim assessments of customer-traffic and food-cost trends. And suppliers glumly speculated that booth traffic would be tempered as operators cut back on the number of people they brought to the show, if they budgeted to come at all. Nor, they pointed out, are their ingredients costs any better than restaurateurs’.

Yet the aisles were crowded today at McCormick, with a healthy showing of red badges, that all-important sign of the operator. Trying to navigate my way through the nibblers, tire-kickers and serious shoppers, I spied a McDonald’s director, a top executive of Auntie Anne’s, a large contingent from White Castle, a number of onsite feeders, and more than a smattering of independents. It was hardly a scientific assessment. But equally casual assessments in past years found far fewer of those red badges.

In the way of trends, clearly the green movement is gaining share of tongue. It was a standard add-on to dialogues, as in, “and it’s sustainable, too, because….” Or, “how about the environmental impact?” I was sorry to miss a discussion this morning between culinary educators, students and industry officials, about what’s being taught to restaurant and hospitality students about ecological practices.

I suspect that I’ll notice a marked shift when I poke around the booths tomorrow toward the slanted. Certainly slanted tableware—a soup bowl whose bottom is slanted, so the liquid pools in the bottom for easier spooning, for instance—has been noticeable during some of my recent restaurant visits. The Gage, for instance, sells its wines-by-the-glass in small carafes that are skewed. Their bottom is flat, but the body and neck slant forward, making for a more dramatic presentation and easier pouring. More on this after I check the dishware booths in the next few days.

But undoubtedly the dominant talk of the show was about the difficulties of the time. One person cited a supplier whose costs have jumped by the scale of a moonshot because of escalating grain costs. Several recounted conversations where the participants wondered what casual-dining brands would disappear. Others speculated about what wounded brands in the market would likely be acquired, possibly for conversion.

It would have been nice to check the possibility of an acquisition with some of those brands. But it seems that several decided not to send their executives to the show this year.

The house party

2008-05-13T22:36:00.001-05:00

A heads-up to National Restaurant Association show coordinators: There is a second political party out there, you know. The association served up a pleasant surprise Monday by announcing that John McCain is going to drop by the industry’s mega-get-together next week in Chicago, first to speak to attendees, then to powwow with industry leaders about travel and tourism. His participation will follow by two years the unscheduled appearance of President George W. Bush, one of a long line of political speakers that also includes his mother, Barbara (accompanied by her dog, Millie), Ronald Reagan (in his second post-White House public appearance), Gerald Ford and Herman Cain. In one of those uncanny coincidences that no bookmaker in Vegas could anticipate, all were Republican (though I can’t absolutely swear to Millie’s political persuasion).

It’s easy to see why. As James Carville quipped at his recent appearance at an industry event, “I’d like to say hello to all of my fellow Democrats. All eight of you.” This is a obviously a Republican industry. And the whole point of a convention is being with persons of your own calling.

It’s great that McCain will be addressing the NRA’s convention. Indeed, it’s a tribute to the association that it can land figures of that stature, and the timing couldn’t be more perfect. This election is truly a race, with the outcome as uncertain as any I’ve witnessed. And you’re talking about someone who can recall listening to John F. Kennedy’s warning about some missiles in the place where Ricky Riccardo came from. A presentation by McCain could stimulating experience indeed.

But even rabid GOPers would have to acknowledge that their flag-bearer may not be the one voted into office six months from now. Nor is there any speculation about the Arizona senator’s claim to represent the team. His appearance may be more of a rah-rah event than a sobering moment of thought.

Face time with Obama or Clinton, in contrast, might have been far headier. If they’ll truly be enemies of the industry, isn’t it better to have a sit-down now, figuratively speaking? Where do they stand on industry issues like menu labeling, no-match letters or foreign tourism promotion? Inviting the trade’s adversaries might have been far more educational than a pep rally. And if the choice of the Democratic candidate has still yet to be decided, wouldn’t it be interesting to determine which one the industry would prefer to see in the race?

For all I know, the NRA did invite one or both of the Democratic contenders, and was turned down by each. Or that there might be a surprise last minute stop-by by one or both, akin to George W. Bush’s unexpected presentation in 2006.

That would be a pleasant surprise indeed, and I don’t say that because of my own political leanings. During times of political uncertainty like these, it’s better to learn what your adversaries are thinking than it is to review the points of agreement with the entrant you prefer.

The King, a spy?

2008-05-07T13:27:00.000-05:00

Eric Schlosser, the muckraking author of “Fast Food Nation,” blew the cover this morning off a clandestine operation that explains why so many chain executives take their martinis shaken, not stirred. In an op-ed piece in the New York Times, Schlosser, about whom I have my own secrets to reveal, disclosed that Burger King has been secretly infiltrating a labor-affiliated group in Florida. Not that the group’s members work for BK, mind you. They’re students who sympathize with the workers who pick the Florida tomatoes that might end up as a Whopper garnish. BK, apparently fearing some sort of tomato-field uprising, hired a veteran spook to go undercover as a college student willing to work for the Student/Farmworker Alliance, according to Schlosser.

The best-selling author and crackerjack journalist said he was told by an unnamed BK executive that the chain had for years employed a shadowy company called Diplomatic Tactical Services for what the source termed “security-related matters.” In March, Schlosser said, those matters extended to infiltrating the Alliance, which supports the mission of the Coalition of Immokalee Workers. As we’ve often reported online, the CIW is pushing BK to pay an extra penny a pound for tomatoes, as McDonald’s and the quick-service chains of Yum! Brands have agreed. The CIW says the money would be used to improve the wages and living conditions of tomato pickers. But BK has refused, citing concerns about the legality of paying part of a wage to workers whom it doesn’t actually employ.

Schlosser doesn’t say exactly what BK hoped to accomplish if, as he alleges, the company paid someone to spy on the Alliance. But he cites the situation as another reason why safeguards against corporate surveillance should be enacted by Congress, if not written into the Constitution.

Lest you write off Schlosser as someone who warns of monsters under the bed because it sells books, consider the other reports that have come to light about BK executives’ other dealings with the CIW. The Fort Myers, Fla., News-Press reported yesterday that the franchisor is investigating Steve Grover, head of the chain’s food safety and quality control functions, for slamming the CIW in blog postings that were written under the screen name of his daughter. “Appropriate disciplinary action will be taken,” BK spokeswoman Denise Wilson was quoted as saying. In the story, she stressed that Grover acted independently, without so much as sympathy from the home office. She did not deny that Grover had written the messages, which the News-Press characterized as “derogatory.”

Yet Schlosser’s account fails to answer the question of why BK would bother to infiltrate a student group that has probably never heard of Che Guevara or Cesar Chavez. At a time of runaway food costs, sky-high construction costs and a severe slowdown in consumer spending, do farm workers or youngsters working on their behalf really pose a significant threat, never mind one that triggers covert operations? Shouldn’t BK’s operatives be trying to turn Ronald McDonald, or maybe waterboarding that pig-tailed redhead from Dublin, Ohio? At the very least it should be eavesdropping on that cue-ball-headed guy who makes commercials for Jack in the Box.

And, of course, there are my personal qualms about Schlosser’s integrity. Many years ago, sometime between “Fast Food Nation” and his subsequent book, “Reefer Madness,” he called me while I was serving as editor of an NRN competitor. He was trying to track down the source for an expert’s assertion that I’d recounted in a column. I had the source material on an audiotape, a piece of pr-MP3 technology known as a “cassette.” It was a recording of a Technomic recording from COEX, and you couldn’t readily find material of that sort in those pre-YouTube days. So he begged to borrow it, swearing he’d return it ASAP. But, alas, I’m still waiting.

Perhaps I should slag him in a blog.

Shooting themselves in the foot?

2008-05-02T13:18:00.000-05:00

You have to wonder how gun advocates would reconcile the tragedy that befell a Florida Taco Bell with the push in Georgia to let patrons carry firearms while they drink in public. They’ve hammered a bill through the state legislature that allows gun-permit holders to carry a hidden pistol into restaurants and other places that serve alcohol. The proponents are arguing that Gov. Sonny Perdue should sign the measure into law because it would allow your average citizen to defend his or herself should trouble erupt, like the robbery that unfolded in late February at the Cape Coral Taco Bell.

Sure enough, someone in the restaurant that day was carrying a handgun. And, luckier still, it happened to be a police officer—someone with extensive training in how to handle a lethal weapon. Nor was the officer caught off guard. Local authorities had been warned that the fast-food restaurant might be robbed that night. Officer Doug Coons was sent specifically to protect the staff and patrons. When a man at the back door pulled a gun on manager Paul Price, Coons reacted. He fired twice at the armed robber, hitting him in the shoulder. But Price also caught a bullet, though his wound, like the perpetrator’s, was not fatal.

At first, according to local news reports, Price asserted that he’d been shot by the robber, apparently a not-too-quick fellow named Christopher Ward, who was promptly arrested with three accomplices. But authorities reportedly discovered that Ward’s gun hadn’t been loaded. The state attorney’s office also reportedly learned the bullet had come from Coons’ gun.

All parties agreed the injury to Price had been unintended. Indeed, the state attorney found Coons’ actions to be “reasonable and lawful,” according to the Cape Coral police department, and did not merit any criminal charges.

But it’s a reason to stop and think about the legislation that’s on the governor’s desk in Georgia. An innocent man was shot in Cape Coral because a policeman, a highly trained professional accustomed to carrying a gun every day on the job, erroneously hit him. We’re not talking about an amateur unwittingly finding him or herself in mortal danger, possibly after having a drink or two, in a crowded facility where other people may be packing, too. Do the gun advocates in Georgia really believe that an accident shooting would be less likely in a situation like that?

We can only hope the governor listens to the Georgia Restaurant Association’s plea that he protect the public by vetoing the pending bill. As GRA chief executive Ronald Wolf put it in an Atlanta Journal-Constitution op-ed piece on Tuesday, “although we recognize the good intentions of the legislature to provide restaurant patrons with an increased sense of security, the reality is that the bill only increases the likelihood of an inebriated customer putting innocent citizens and law enforcement officers in harm’s way.”

How IHOP plans to fix Applebee's

2008-05-01T10:27:00.000-05:00

After crowing for months that it could revive Applebee’s, IHOP started talking this week about how it’ll do it. In a presentation to financial analysts, CEO Julie Stewart spoke of such nuts and bolts changes as scaling back limited-time offers, installing new kitchen equipment, paring down the menu to a few specialties, and, perhaps most important, remembering what kind of consumer is likely to visit the restaurants. “We often overshot the brand in the pursuit of amore upscale customer while frankly failing to deliver on the expectations of our core users,” Stewart explained.

The casual chain’s new owner has already yanked Applebee’s much-ballyhooed “Talking Apple” ad campaign, which featured the sassy comedienne Wanda Sykes as the voice of the apple that’s now part of Applebee’s logo. Both the new logo and the edgy campaign, carefully slanted toward a hipper crowd, were concocted by the chain’s prior regime, which Stewart ousted in short order. The new campaign, “It’s a Whole New Neighborhood,” harkens back to the chain’s earlier positioning lie, “Eating Good in the Neighborhood,” which Steward helped to develop while she was president of Applebee’s domestic operations.

The new spots spotlight food, without any pretenses about attitude or cheeky sophistication. Or, as Stewart put it, “Our message is clearly focused on classic grill and bar food that you can only get at Applebee’s.”

That process of stripping down the concept to its core strengths, then updating those traditional draws, appears to be the basis of Stewart’s revival plan. As she told the analysts, a crowd usually more concerned with ROI than Riblets, “Signature grill and bar items, such as appetizers, burgers, salads, steaks, as well as beer, wine and other specialty drinks, are the key to differentiating Applebee’s from the competitive set while remaining true to our brand position.” Translation: The chain will stop trying to be a Cheesecake Factory or a trendy independent.

Part of the process, she continued, will be paring back the menu and updating kitchens.

In an interview with USA Today, Stewart also spoke about putting more emphasis in Applebee’s marketing on the concept’s bar. Most consumers, she suggested, don’t realize how much the brand offers to patrons who want to unwind with a cocktail.

During the conference call with investors, one of the portfolio managers asked Steward why she was veering from Applebee’s traditional reliance on limited-time offers and frequent menu changes.

“The short answer is that [the] LTO strategy did not work,” she said. “The idea of forcing people to come in for a limited period of time and order that item and somehow come more frequently did not work.” After all, she said, “if your base business and your base menu and your base service platform doesn’t provide enough for the consumer, then the LTO isn’t necessarily going to get you where you want to go, right?”

Stewart said that IHOP has plotted out a new marketing plan for Applebee’s for the remainder of 2008, starting with another flight of ads that debuts Monday. In those spots, consumers will be invited to submit videos they’ve shot inside Applebee’s units.

In addition, Stewart and her team “have developed a road map for all of 2009 that should be finalized in the next couple of months,” she said. In particular, she added, the new operating group will look at takeaway and Applebee’s rights to market Weight Watchers-brand meals.

Stewart also revealed that IHOP plans to “amend” a unit-manager bonus program that squeezed margins at company stores during the first quarter, without commenting how that effort dovetailed with the plan to improve unit-level operations.

'Paging Mr. Ripley'

2008-04-30T15:07:00.000-05:00

If a picture is worth a thousand words, headlines should come with volume numbers. Here are a few grabbers that tell a vivid story without a word of explanation, though a dab of context is nonetheless provided for those who wonder how the underlying articles came about. All are real headlines that appeared within the last few weeks:

‘Restaurants go after reviewer's testicles’: It seems that the reviewer for the Metro newspaper in Auckland, Australia, left several high-profile restaurants off his list of the area’s 50 best dining options. One of the overlooked establishments responded with a full-page ad in a rival paper, slamming the critic’s work and providing a recipe for reviewers’ testicles. The ad encouraged at-home Emerils to take a "very sharp knife, [and] slice through the sort of skinnie muscley stuff that you find surrounding each of the Metro Food Critic Testicles (there should be two testicles, they can be hard to find)".

‘China's first penis restaurant,’ also reported under the banner, ‘Members only, but diners don't find it hard to swallow’: Guo-li-zhuang restaurant in Peking, China, specializes in the private parts of yaks, donkeys, water buffaloes, horses and other studmuffins of nature. The best quote in the story that appeared under the latter headline: "Of course, there are other restaurants that serve the bian [penis] of individual animals. But this is the first that brings them all together." You can only imagine the Zagat entries.

'Bruce Oldfield shows off his McDonald's designer duds': Oldfield, in case you’re the gauche sort who buys off the rack, is a clothing designer whose world-famous clients included Princess Diane and who still dresses the likes of Catherine Zeta-Jones. He was asked to revamp the uniforms for McDonald’s staffers in the United Kingdom, a crucible for some of the chain’s more progressive personnel policies. Some might say it’s like Oasis or Amy Winehouse playing bar mitzvahs and weddings. But the new outfits, shown last week in Britain, have merited serious commentary from the fashion sheep who ooh and ahh over the latest runway get-ups. The neck scarves for women have been panned, but the brown-on-black shirts for guys have been given well-received. Ditto for the new baseball caps. “Next up, McBurqa's,” quipped one online commentator here in the States.

‘Church’s Chicken Names Fletcher Martin Agency of Record for Eastern U.S. Media and Print’: This was the headline of a press release that was sent to us and that you can probably find online. As a stand-alone, it’s perfectly fine. But the copy below it is an eyebrow-raiser: “Church’s Chicken, a division of AFC Enterprises, Inc…” Church’s was sold by AFC in 2004. Today, AFC’s only restaurant holding is Popeyes Chicken & Biscuits, a competitor to Church’s. Since the new agency is dealing with media, it might want to clear up that error ASAP. Otherwise, it could end up being pointed out in a blog.

It's a jungle out there

2008-04-29T14:12:00.003-05:00

Here on the Peltz-engeti Plains, the beasts of the restaurant wilds are hitting the watering holes a bit more enthusiastically. After watching Nelson Triarcus carnivorous ruthlessly stalk its prey, the wounded Wendy red-hairus, the herd winced in horror as the predator brought down one of the kingdom’s most storied specimens. But the blood-letting didn’t end there. No sooner had Kerrii Anderson’s head been mounted than another proud denizen of the restaurant jungle find himself being measured for a spot on the lodge’s trophy wall. In a move that shocked everyone, including the prey, Craig Miller found himself at the wrong end of an angry board’s scope. He was summarily dispatched as CEO of Ruth’s Chris Steak House, a post he assumed four years after Bill Hyde had been dropped because of a vertical climb in beef costs. No wonder the beasts left standing are taking a big gulp and wondering, Who’ll be next?

Rock Bottom answered that question with the simultaneous resignations yesterday of three top executives, including CEO Ned Lidvall. The smart money says he won’t be the last chain chief to feel as if he’s in a National Geographic special, cast as the wildebeest in a study of investors’ meat-eating habits.

Worst of all, the situation isn’t purely Darwinistic. Everyone is mired in an economic swamp that has customers spending less, suppliers charging more, employees bailing for other trades, and landlords forgetting there’s a real estate glut. Even if you’re better than the competitions’ CEOs, you can still look like a prime cut of meat to an unforgiving investment pack. Outside of McDonald’s and Chipotle, the only executives who are looking fit these days are the ones who’ve dropped out of the restaurant business to work as head hunters.

Of course, if could be worse. They could be among those unfortunates who come to work one day and find a registered letter on their desks from William Ackman, Sardar Biglari or some company whose name starts with T-R-I, the mark of Nelson Peltz and the now industry equivalent of “666.” It’s one thing to pack up all your office belongings in a cardboard box and head down to HR for an exit interview. It’s another to be hounded like a wobbly gazelle trying to limp its way across the African veldt.

And it’s just a matter of time until that happens. In the announcement of its deal to takeover Wendy’s International, Arby’s parent Triarc Cos. specified that the fast-food empire formed by the chains’ merger would grow in part through acquisitions.

Not that you should feel too bad for Anderson, who’s about to be replaced as Wendy’s CEO by her counterpart at Arby’s and Triarc, Roland Smith. News reports say she’ll be paid $20 million in severance, which includes about $5 million to defray her income taxes.

Customers sound off

2008-04-25T12:27:00.000-05:00

A rose is a rose is a rose, but restaurant customers come in ever-shifting varieties. Treat them right, even in a crisis, and they can be convincing apostles for a place or a chain, as Chipotle is learning from a consumer poll that’s being conducted on its handling of a food-safety situation. But burn ‘em and they’ll turn into town criers of a far different sort, as I was reminded by an e-mail, complete with a photo documenting the transgression, that was sent this morning by a disgruntled KFC patron.

“The picture I have attached is my first, and likely the last, purchase  of what was supposed to be KFC's new Grilled Chicken Sandwich,” wrote Chris Donaldson of Westminster, Canada. “[It was] advertised at  the ordering kiosk in the drive-thru as having a bulging piece of grilled  chicken layered with a generous helping of lettuce and a slice of tomato.” Instead, Donaldson said, it looked like this:

He said he contacted KFC’s corporation operations, who put him in touch with the franchisee, who offered to give him a free sandwich the next time he’s in the area. Donaldson said he lives 30 miles from the store, and a free sandwich just isn’t enough of a draw.

“I appreciate the efforts by some fast food outlets to present a good fair- for-the- money product, but this turn in my opinion with KFC has to be done  properly and without ripping customers off, “ he wrote. He also lamented the chain’s discontinuation of Tender Roast non-fried chicken a few years ago.

Contrast that takeaway with the impressions consumers cited in a poll that’s being conducted by Kimberly Palmer, author of U.S. News & World Reports’ Alpha Consumer blog. The survey deals with Chipotle’s handling of a norovirus outbreak that was linked to its unit in Kent, Ohio, near the campus of Kent State. About 450 people were afflicted in the incident, according to local news reports. As we reported yesterday online, Chipotle is inviting victims to submit their medical bills for reimbursement.

“Imagine this: You go to a restaurant. The food makes you sick—so sick you need to visit the doctor,” writes Palmer. “To compensate, the restaurant offers to pay your medical bills. Does that leave you a satisfied customer?”

The posting includes an instant poll that readers can take to express their opinions of Chipotle’s response. Fifty-three percent said their sentiments were best expressed by the option, “It could have happened to any restaurant, and probably won’t happen again to Chipotle.” Another 31 percent said they’d be “a bit wary” but would eventually go back to the restaurant. Only 16 percent responded, “Medical bills or not, Mexican food would nauseate me forevermore.”

Lucca IV: Fighting faintness

2008-04-23T22:06:00.001-05:00

By my calculations, there were 2.7 minutes during my first day in Lucca, Italy, when I wasn’t eating or drinking. My hosts ensured such deprivation would end there by dispatching an English-speaking local to take me on a tour that afternoon of the city’s food shops and cafes. Our objective was to sample some of the delectables that are unique to the area. In true Italian style, we ended up trying most of them, though I drew the line at a local blood-and-pig’s-head sausage (at least until the next day). The experience underscored a brother’s contention that Italians could coax a delicacy out of virtually anything that walks, sprouts, flies or swims.

My guide-cum-enabler started me off slowly, suggesting we merely peer through a bakery’s window at a local specialty called torta di verdura. It looks like a green pie, and usually hits the dinner tables on religious holidays, the guide explained. I was about to suggest we give it a try when she described the ingredients: Swiss chard, maybe a little cheese, usually a few other vegetables baked into it to form a strongly flavored savory dish. There was a long pause. “It’s an acquired taste,” she remarked.

The other cake for which Lucca is known, she continued, is the buccellata, which at times looked like a giant bagel, at other times like a giant bagel whose sides are squeezed together to form a long double-tube loaf.

In what would become the pattern for our tour of gluttony, my guide suggested we give buccellata a try, and shot into a food shop. I started getting my Euros together while she chatted up the store keeper, pointing to me every four or five seconds. After awhile the proprietor brought me a dish with two slices of what looked like raisin bread, along with a tiny cup of pinkish liquid. I went to drink the liquid, but everyone in the place moved to stop me. “You dunk it,” the guide whispered. As soon as I lowered the bread into the wine—vin santo, literally holy wine—the whole place seemed to breath a sigh of relief. I realized why when I tasted the wine-soaked bread. The bread itself was mildly honeyed. But the wine could’ve sweetened a wedding cake. Downing it in a gulp might’ve put me into a sugar shock. Besides, the guide explained, vin santo typically costs five times as much as regular wines, and wasn’t to be gulped.

Not that I would have learned any prices from our tour. When I went to pay the proprietors, the guide invariably stopped me. It seems that ignorance of buccalleta or other local specialties is not to be tolerated in Lucca. And clearly I was more ignorant than most. Though we visited easily a half-dozen emporiums, each readily offered up free samples to a stranger they’d never see again. As far as I could tell, the motivation was pride. Which was why I soon found myself trying a rival establishment’s buccalleta. “It’s the best,” the proprietor confided in English. I skipped any vin santo there, still a little buzzed from the earlier sample.

But that was nothing compared with the near paralysis that set in when the guide took me to one of the city’s oldest and most famous cafes, Di Simo, which has been in business at least since 1846. The proprietor insisted we try one of the traditional local alcoholic drinks, a digestif called biadina. It’s traditionally served with several pine nuts, and local lore notes that it actually restores you twice—once with the liquid, a second time when you eat the pine nuts on the bottom of the glass. “Restores” is a carefully selected euphemism; “kicks your ass” might be a more apt descriptor. “It’s 40 percent alcohol,” the guide explained with a smile—after I’d downed a good lot of it.

We staggered out to take in some of the historical sights of the town. But a food option was never more than a few waddles away. My guide showed me several bakeries that stack trays of focaccia in front of open front-of-the-store windows so locals can grab a slice as they dash to work. But that’s as close as Lucca traditionalists come to fast food.

By the time our tour took us to one of the city’s many meat shops, further consumption would have been humanly impossible. So we merely looked at specialties like biraldo, a sausage that’s made by boiling a blood-and-scrap pork sausage for about six hours, if I understood the shopkeeper's account.

We also forewent a taste of lardo colonnata, or lard cured in a marble box. The process gives the lard a special taste, my guide explained. Locals slice the lard thin, put it atop a slice of bread, and toast the whole thing so that the lard starts to melt.

After showing restraint in the meat shops, we ended our tour at a gelateria. I was too stuffed even to taste anything, but my guide provided explicit directions as to how to get there from my hotel the next day. Which I, of course, did.

But that day of eating our way through Lucca had to end. It was almost time to get ready for dinner.

Schultz tries to foster Seattle's fortunes, too

2008-04-23T15:00:00.001-05:00

You’d think Howard Schultz would be jittery enough without a court battle on his hands. But the Starbucks CEO filed a lawsuit Tuesday against fellow tycoon Clayton Bennett to scuttle their Seattle SuperSonics deal. Schultz agreed in 2006 to sell the pro basketball team for $350 million to a group led by the Oklahoma City financier. But when Seattle balked at building a new arena for the Sonics, Bennett alerted the National Basketball Association that he was relocating the franchise to his home town. Seattle restaurants of all stripes—including a few, presumably, in Starbucks green—have warned that the relocation would starve them of much-needed nighttime business.

Schultz may have grown up in Brooklyn, N.Y., but he’s loyal to his adopted hometown. He’s asked a U.S. District Court to un-do the deal because it was based on the assumption that the Sonics would remain in Starbucks’ home base. The team would still be sold, the complaint reportedly states. But Schultz would like to find an “honest buyer” who’d keep the Sonics in the only city the team has ever known, the Associated Press reported this morning.

Bennett, meanwhile, could end up as the trial lawyers’ poster child of 2008. He’s also being sued by the city of Seattle and fans who bought season tickets to the Sonics for future years.

Bennett has already agreed to give up the Seattle SuperSonics name, clearing the way for Seattle to secure another franchise. But he seems to be proceeding with his relocation plan. The NBA gave him a green light Friday to make the move, pending the outcome of his court fight with Seattle.

Lucca III: Food trends & traditions

2008-04-21T16:44:00.002-05:00

Hearing the local purveyors tout their wares, you’d think the food trends of Lucca, Italy, were the same currents shaping menus back in the United States. The salespeople—nearly always the farmers or artisans who produced the materials—talked up the organic, healthful and gluten-free items that originated from their fields. Throw in the boasts about everything being locally sourced, processed by hand, and produced according to ancient family recipes, and you could’ve been at a food show in New York or San Francisco. Until you got to the farro beer, the chestnut liqueur, or the savory-sounding jams.

Lucca, a part of Tuscany, may be little-known in the U.S., but it’s renowned throughout Europe for its extra virgin olive oil, boutique wineries, and farro, the grain known in English-speaking countries as spelt. Locals also wax rhapsodically about the widespread local use of chestnuts, either by milling them into flour for cakes, breads or pastas, or as a flavoring.

Those items continue to be the bedrock of the local food culture. But a younger generation of producers and consumers are nudging the heritage-revering area to at least look at other ways of using traditional ingredients.

For instance, at a trade show convened for those of us who were visiting from the States, one of the local craftsmen poured samples of his newest beers. One was an extremely light, almost lager-style version made from farro and orzo, also an Italian signature. The other, he said with nearly bursting pride, was made solely with farro, something he’d been told could not be done because of the production inefficiencies.

The 100-percent farro beer, as yet even unnamed, is the same pale yellow as a wheat beer, minus the cloudiness. Indeed, it was crystal-clear, with a head “that could last for two hours,” the brewer explained through an interpreter. I swear I saw a tear forming in his eye.

The brew also has a much lower alcohol content, a mere 4 percent.

The brewer described the beer was an alternative to the darker, slightly heavier brews that Italian elders in the area might’ve sipped when they were youngsters learning the traditions of their elders.

A tour of local food shops and cafes revealed that younger Italians are indeed drinking differently than their parents did. Aperitifs, my tour guide explained, are the current rage among people in their 20s. They’ll head to the same time-steeped cafés where their grandparents might still stop by in the afternoon for a local digestif called biadina, which is served with a few pignoli thrown into the glass. The young adults descend on the places at 7 for aperitifs of one sort or another, often garnishing them with nuts, raisins or other enhancements that are arrayed in glass bowls on the bar. At 9, they head off to dinner, which of course is accompanied by wine.

A liqueur company participating in the Lucca trade show acknowledged that it’s had to make some accommodations to changing drinking habits. The buzz-phrase is “doing it for the market.” The owner cited such concessions as the introduction of a drink that tastes like dark rum, as well as a creamy limoncella and a liqueur, called Halloween, whose flavor was lost to language differences. His product line also includes a chestnut-flavored liqueur.

Several of the trade-show exhibitors featured jams of local produce—such local fruits as raspberries and currents (or what we’d know as blueberries, judging from the labels), to be sure, but also carrots, pumpkins and basil, to name just a few. Samples were given on bread, leading me to say something extremely intelligent about what a strong toast market Lucca must have. I was quickly corrected. In Lucca, one interpreter explained, persons of taste put jams and marmalades on cheese, as an alternative to using honey. Surely I must put honey on my cheese, she suggested. I couldn’t even bring myself to answer. Clearly it was yet another major setback in other cultures’ impression of America.

My shop-tour guide suggested that the jam-on-cheese phenomenon was getting a boost from another recent trend in the local dining scene. A new preoccupation has taken hold of blending salt and sweet items, like desserts flavored with balsamic vinegar, or salts used in baked items.

I could’ve been home, listening to a bunch of foodies discussing what they’ve been witnessing on the local dining scene.

Fred Turner takes McD's podium again

2008-04-18T12:12:00.000-05:00

McDonald’s bi-annual chainwide meeting offered something a little different this year, at least for individuals who’ve logged at least 20 years with the brand. Included among the 15,000 franchisees, executives, employees and suppliers who gathered in Orlando this week for the quick-service giant’s Worldwide Convention were 1,500 people who have spent at least two decades within the system and are still logging days on the job. Another 500 are retirees. Together they constitute what the chain has dubbed—what else?—McVeterans, and they were honored for their role in building the company at a two-day, invitation-only gathering that dovetailed with the larger get-together..

According to an attendee, the turnout included several executives whose tenure dated back to the days of Ray Kroc, including former chief executives Fred Turner and Michael Quinlan. But, the attendee indicated, this wasn’t a then-vs.-now thing. The McVeterans McEvent included presentations by both Turner and current CEO Jim Skinner.

Instead, he said, it was a tribute to the folks who stoked the economic engine that just keeps chugging along.

Lucca II: A few words about green toilets

2008-04-18T01:52:00.003-05:00

Green has been a concern for so long in Europe that it may be showing a little gray. Conservation seems to be a standard operating procedure, even in a city steeped in antiquity, like Lucca, Italy. The evidence can be as close as the nearest bathroom.

Toilets like the ones in our hotel, the San Luca Palace, have a nifty feature that must save a considerable amount of water. The flush mechanism is a two-piece touch plate on the wall. One piece is a smaller oval inset into a larger one. No instructions are given, but when you stop and wonder why the device has two components, the intent becomes apparent quickly: Touch the small oval for a lighter flush. For, um, tougher jobs where more water and flush power are needed, touch the larger part of the plate.

Here's what it looks like:

Bathrooms are not the only component of hotels and restaurants to be retrofitted with high-tech features for the sake of conservation. The hotel where we’re staying, for instance, features an impressive electricity-saving measure. When you enter a guest room, some lights will go on. If you put the card key into a slot by the door, they’ll stay on after the door closes, and you can of course turn on others, or snap on the TV. If the card key is not in the slot when the door closes, all the electricity shuts off. That, of course, means all lights will go off when the guest leaves the room with card key in hand. It’s nearly a failsafe way of guaranteeing the patron snaps off the power when he or she doesn’t need it.

Taking a limoncella for the team

2008-04-17T12:22:00.004-05:00

Ah, the things we have to do to make a living. Today, for instance, I’m sitting in Lucca, Italy, getting ready to eat and drink my way through local specialties. I’m on a tour to learn what foods and wines—and let’s not forget cigars and coffee—could be feasible for restaurants back in the States that want to differentiate their menus with authentic regional Italian cuisine. Man, what a grind.

The tour began last night with dinner at one of the city’s most historic restaurants, which is saying a lot. Among Lucca’s distinctions is the retention of a wall that was built around the city for its defense back in the time of the Roman Empire (but updated twice, most recently during the Renaissance). Our guides explained that they wanted to start off our visit with dinner at Buca di Sant’ Antonio because it features the foods they ate at the family table while growing up. These were the dishes made by their grandmothers, who in turn learned them from their grandmothers.

We were steered toward the 226-year-old restaurant’s specialties by the crackerjack staff. Meanwhile, our guides, both from companies that promote Lucca business and tourism, selected local wines. My meal started with sautéed chicken livers served with a specialty bread that had a coarser grain than usual. It had almost a nutty taste, like the nut and whole-grain breads you see in health food stores back in the States. Several of my fellow visitors tried the “pies” that were offered as antipasti—one with leeks and ricotta, the other with asparagus and ricotta. All were terrific.

My second course was a pasta and rabbit dish with a very robust sauce—one of the highlights. Something about it was very familiar, but I couldn’t quite place where I might’ve had it before. Later, one of our hosts noted that the chef of New York’s Beppe restaurant was from Lucca. I realized that’s where I’d enjoyed a similar dish, though I doubt it was made with rabbit.

My meat course consisted of roasted baby goat, with a simple accompaniment of roasted potatoes. It was delicious--juicy, flavorful, yet mild. The meat had a slight but pleasant musty flavor, like amplified dark meat turkey. It was as tender as a braised pork shank, but deeper in taste.

The meal wrapped up with a local specialty: Cookies that are made with olive oil in place of butter, lard or other shortenings. They were a bit heavy, but tasty. And just perfect with the dessert wine that our hosts chose. The wine was made with the local grechetto grape. The vintner later explained that the grapes are dried on mats for two to three months, until they’re largely dehydrated. Then the pulp is pressed, yielding a wine with extraordinary depth. The sweetness was more of a highlight than the sugary backbone of the wine. And as my wine-centric colleagues noted, it had great fruit.

The experience wiped out the surpisec we got when we saw our first restaurant in Lucca--a McDonald's.

Okay, I’d better rest up before I move to the next sampling. I’ve heard that we may actually have to heft more wine glasses this morning.

What's in Ted's garage--and hangar

2008-04-15T11:44:00.000-05:00

It’s fitting on tax day that we remember what the titans of industry are driving these days. Take Ted Turner, for instance. The media-mogul-turned-rancher-turned-restaurateur (he’s a principal in Ted’s Montana Grill, the 55-unit bison chain) cleared up the mystery during a presentation in New York last week. “I drive a Prius, that’s my primary car,” the billionaire explained during the “green tour” he and Ted’s CEO George McKerrow, Jr., are currently undertaking to raise ecological awareness within the restaurant business.

The revelation about Ted’s wheels drew some guffaws and murmurs from the audience. This, after all, is a guy who could probably buy Ford or GM, never mind a Rolls, Bentley or Maybach.

“What’s wrong with that?” he challenged the audience when it mumbled about his choice of car.

“So what do you think when you see a Humvee on the road?” asked Deborah Roberts, the ABC News personality who moderated the appearance by Turner and McKerrow.

“Well, I have one Humvee, but I only use it for quail hunting in New Mexico,” he admitted.

Turner also revealed that he takes a cloth bag with him when he shops, so he doesn’t have to get a new plastic or paper one from the store. He also recounted how he’ll pick up litter, both in Georgia, where he sponsors the clean-up of some highways, and outside of the Ted’s unit in midtown Manhattan.

“I’ll pick up a couple pieces of trash if someone’s looking because that has double the impact,” he said. “Someone’ll say, ‘If Ted Turner can pick up trash, so can I.’”

He even noted that he’s mindful of waste when he travels. Other billionaires are buying airliner-sized craft and converting them into private planes. His plane is merely moderate in size, Turner assured what seemed like a decidedly pro-green audience.

Turner is not the only mega-rich person in the restaurant business to drive a Prius, by any stretch. A few years ago, after an industry dinner in Dallas, Norman Brinker and his wife, Toni, waited outside for the valets to bring around their ride. They, too, drove a hybrid.

A class action by any other name...

2008-04-10T23:59:00.000-05:00

After pounding a keyboard for 29 years, I foolishly assumed the English language was no longer Greek to me. But a Baltimore litigation firm set me straight Wednesday. The statement it issued clearly states, “Brower Piven Announces the Filing of a Class Action Lawsuit Against Darden Restaurants, Inc.” To me, that means a party named Brower Piven had filed a class action lawsuit against Darden Restaurants, the operator of Red Lobster and Olive Garden. But, oh!, was my participle dangling.

Turns out, if you read further, that a lawsuit had been “commenced,” which doesn’t necessarily mean “filed” under the rules of language that are now applied to law-firm press releases. As we’ve learned in recent weeks, many are trumpeting lawsuits that are not really lawsuits, or at best not yet. The hope is to scare up plaintiffs—specifically shareholders who lost money on the would-be defendant’s stock—who might like to join a legal action when one is actually undertaken. It’s the equivalent of a chain declaring it’s bigger than McDonald’s, then muttering in an aside that it just hasn’t opened the 35,000 units yet.

The Brower Piven statement does not expressly say the lawsuit has yet to be filed, so let’s take the company’s word that the action has indeed been taken. But it seems the key figure of a lead plaintiff is still missing. “You may, no later than May 12, 2008, ask the Court to allow you to serve as lead plaintiff,” the release notes, explaining that someone who lost a bundle on Darden’s stock would have an edge.

Indeed, they’d lead the class, so to speak. Yet, the statement acknowledges, “no class has yet been certified in the above action.” Despite the statement’s headline, there’s no class-action suit.

Maybe there will be one, even by the time you read this. But the class-action suit that Brower Piven declared in its statement as being officially underway clearly wasn’t at the time, by the company’s own admission.

Plenty of companies may feel the pain of shareholder class-action suits during the present economic downturn. Language and the truth, it seems, are already being bent to that purpose.

How lemmings draft a menu

2008-04-07T17:25:00.000-05:00

Listen: That crunch you hear is the sound of quick-service chains squashing their points of differentiation. Instead of learning from the tragic blunder of casual dining, players one click down the service spectrum are just as avidly turning their menus into clones of the competition’s line-up. If they haven’t already copycatted McDonald’s Snack Wrap, vis-à-vis Wendy’s, Sonic, and KFC, it’s only because smoothies, premium coffees and espresso-based drinks are higher on their To Develop list. And that’s after deciding how to join the discounting binge.

In the currrent environment, you can readily understand why a chain copies a sure-fire hit for someone else. But it clearly speaks to a dearth of cleverness and creativity within the sector. Instead of analyzing why a certain product appeals to consumers and then crafting an alternative that sates the same desire, even contenders with considerable marketing knowhow are merely giving a twist to what’s already selling well.

The follow-alongs are not only betting that lightning will strike twice, but leaving themselves vulnerable to the upstart that hatches a true New Idea. If a newcomer hits on the next Bloomin’ Onion, fajita, Blizzard, chicken nuggets or smoothie, the old guard is cemented into the role of hawking commodities. How much pressure on prices can a concept take when costs are squeezing margins from the other direction?

The copycats would be better served by staying attuned to what makes their concept unique and then nudging their menus in the direction in which public tastes are moving. Leapfrogging to a far afield idea just because it worked for another player is like trying to make it as a rock star by covering last week’s hits.

A different sort of Big Mac attack

2008-04-04T12:52:00.002-05:00

Fast food is getting less respect these days than Kevin Federline’s acting abilities, even from quick-service chains themselves. Marketing campaign after marketing campaign is disparaging the fare as the sort of mass-produced plastic you won’t have to choke down at ______ (insert the name of whatever family, casual or fast-food chain is airing the ads, be it McDonald’s, Denny’s, Taco Bell, Bonanza/Ponderosa or KFC). Invariably, the spots proceed to point out that you don’t have to pay more, in time or money, for “real” food.

Much of the mud is being flung at fast-food breakfasts, which have been selling like, well, hotcakes. Denny’s current campaign blasts them explicitly as fake, unlike the true platters you’d find at the home of the Grand Slam.

McDonald’s touts its McSkillet Burrito as “a sit-down-style weekend breakfast you can eat on the go.” Translation: The real food you’d buy after church at a Denny’s, available every day via a drive-thru.

Panera Bread is bragging that its new breakfast sandwich line is a morning option “made by bakers, not microwaves.” In Tuesday’s announcement of the rollout, CEO Ron Shaich crows that “we’ve developed a hand-crafted, made-to-order grilled breakfast sandwich that literally breaks the mold.”

Chains of all stripes are equally adamant about differentiating their lunch and dinner fare from fast food. The campaign that broke Monday for Bonanza and Ponderosa touts the sister chains’ buffet specifically as an alternative to burgers and that lot. Give it a try, the promotion stresses, “because great tasting meals aren’t served in a wrapper.” It slams quick-service value meals in particular, asserting that they’re "not much of a value or a meal.” Curiously, however, the effort subtly promotes visits to a quick-service chain. The budget steak brands are inviting patrons to submit a bag or receipt from a fast-food place to get a break on the price of the buffet. Eat at a burger or fried chicken joint one day, the promotion suggests, and you can have unlimited fresh fare the next day for $5 at lunch or $8 at dinner. “This is an incredible alternative to getting lunch or dinner in a bag at a drive-thru window,” says Sheryl Randolph, senior director of marketing for the pair.

Here again, even the major fast-food brands are scrambling to showcase products you wouldn’t associate with fast food. Taco Bell describes its Fiesta Platters as “a complete real meal solution,” “the favorite dishes of a sit down Mexican meal in a convenient and portable plate.” Promotional materials also stressed the price: a mere $4.99, or probably less than you’d spend in a full-service place.

Sister concept KFC is sounding a similar tune for its new Kentucky Grilled Chicken. President Gregg Dedrick proudly cites research indications that consumers view the fast feeder's new non-fried option as a "step above fast food."

All of the initiatives echo what Carl’s Jr. did several years ago with its Six Dollar Burger, a sandwich touted as being as good as the burger you’d spend $6 to get in a casual-dining restaurant, available at just over half that price from the West Coast stalwart. You’d think it’d be the most zealous proponent of the movement. Yet the CKE Restaurant holding is one of the few quick-service burger brands not to adapt the café-caliber coffee that consumers can now find at almost every other player of size. Nor is Carl’s racing to develop the Jamba Juice-caliber smoothies you’ll soon be able to buy at fast-food places ranging from a Taco Bell to a Dairy Queen.

If Carl’s is once again astutely gauging which way the pendulum will swing, the key question could be how long fast food remains the standard against which all chains, even the brands most readily affiliated with that style of fare, are favorably gauging what they serve.

'And why is there no Mrs. Ronald?'

2008-04-03T14:04:00.000-05:00

This just in from the lunatic fringe: McDonald’s is promoting a homosexual agenda, if not homosexuality itself. The story may have slipped by such hack media as The New York Times, CNN and The Financial Times, but the vast left-wing conspiracy couldn’t push it past the newshounds at WorldNetDaily.com, otherwise known on the net as WingNutDaily.

The site—“A Free Press for a Free People”—broke the news Sunday that the chain “famed for the Golden Arches, Ronald McDonald and kids meals has signed onto a nationwide effort to promote ‘gay’ and ‘lesbian’ business ventures.” The story cited the incontrovertible proof: McDonald’s USA’s vice president of corporate communications, Richard Ellis, was elected to the board of the National Gay & Lesbian Chamber of Commerce. Ellis even acknowledged that he was “thrilled” to be chosen, and shared the organization’s “passion” for promoting business within the lesbian, gay, bisexual and transgender communities. The insinuations were clear. McDonald’s may strive to be as wholesome as American Pie and a John Birch Society picnic, but it’s secretly celebrating diversity and opportunity for all. It may even have an Obama-supporting Democrat within its executive ranks.

The story was illustrated with a picture of a poster promoting McDonald’s kids meals. It depicted a boy dressed as a pirate and a girl in princess garb, no doubt secretly listening to Melissa Etheridge tunes in the background.

The story drew a combination of disbelief and ridicule from sectors of the blogosphere where most contributors walk upright and believe the moon landing wasn’t staged in a soundset. But the knuckle-dragging forces of reaction jumped on the report as proof we’re one cross-dresser away from outlawing heterosexual marriage and weaving a pentacle into the flag.

Those of us who cover foodservice have often remarked that the industry’s overt commitment to diversity often stops short of expressly welcoming persons of all sexual orientations. McDonald’s is showing itself once again to be a leader by working with the NGLCC. It may catch heat from the black-helicopter crowd planning to build a new community in the mountains of Idaho, but it’s demonstrating how attuned to the modern world it intends to stay. No wonder its sales have remained strong while many competitors wheeze and stumble.

Signs of the (new) times

2008-03-27T22:55:00.001-05:00

This is a good time to be in the sign business. First KFC reveals that it might replace its familiar exterior logos with ones reading, “Kentucky Fried & Grilled Chicken,” a dramatic act of support for the chain’s new roasted chicken (it’s roasted on a plate that leaves grill marks; hence the name. Apparently “Kentucky Fried & Roasted/Grilled Chicken” was adjudged to be a bit much.)

Then sister chain Pizza Hut disclosed that the home office in Dallas will replace its exterior nameplate with one reading, “Pasta Hut,” a not-so-subtle shill for the $11.95 trays of pasta that will be added to stores’ delivery menu on April 6. The rechristening is supposed to happen next Tuesday, otherwise known as April Fool’s Day, and last for a month. But, remember, Pizza Hut is run by the same company that announced on a past April 1 that it had purchased the Liberty Bell for promotional use by its Taco Bell chain.

You have to wonder what Taco Bell’s parent has in store for the exterior signs of that chain. If it follows the patterns set with its other holdings, Yum! Brands will be swapping out the current trade dress for logos reading, “Taco Platters,” or “Taco Smoothies.” Platters were introduced a short ways back, and smoothies are on the rollout schedule for this summer.

But in the meanwhile, the signage business can pick up a little more coin from Ruth’s Chris Steak House Inc. The high-end operation doesn’t feel that its corporate identity should be based on only one restaurant brand when the fold was enlarged through a recent acquisition to include the Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse concepts. It reportedly plans to ask shareholders at their annual meeting on May 22 to approve a switch to the more inclusive handle, “Ruth’s Hospitality Group Inc.”

Chicken fight

2008-03-25T22:26:00.002-05:00

Truth be told, Goliath usually squashes David. So when KFC lunged for the public’s attention with a carefully choreographed announcement of its new non-fried, non-grilled yet still sear-marked roasted chicken, El Pollo Campero must’ve realized the heat would be on. Yet the plucky Guatemalan chain countered with some marketing ju-jitsu. A day after KFC drew headlines in everything from USA Today to The Podunk Press with its plan to introduce Kentucky Grilled Chicken by next year, Campero, a chain with 38 restaurants in the United States, announced that its new grilled chicken would be offered as of today. “Pollo Campero beats competition to market with choice of grilled and fried bone-in chicken,” the much-smaller chain crowed in a press release. And presumably it’s a true grilled chicken at that.

Campero president Roberto Denegri acknowledged that the chain was bringing its non-fried option to the U.S. “a little early,” but attributed the timing to America’s love of grilling during the spring. He failed to explain why that should be a factor, given that the restaurants would be grilling the chicken, not their patrons.

But back to KFC. We at NRN were astonished other media failed to note a monumental point that didn’t slip by executive editor Richard Martin. To call attention to the rollout, Col. Sanders’ brainchild is allowing franchisees to rename their stores, “Kentucky Fried & Grilled Chicken.” In the world of restaurant reportage, this is a big move. Huge, in fact. Though it remains to see if it will be adjudged a smart one.

We were also surprised by the chain’s efforts to prolong the announcement, asserting at one point that the news was “embargoed” until March 24, or provided only on the understanding that it not be disclosed until that date. Yet it allowed selected media to go ahead and publicize the year-away rollout (the product is currently only in test, albeit it on a large scale) as soon as they heard about it, rendering an embargo void by the rules of publicist-journalist engagement. Nor did we make any pact prior to being fed the info on the product last week. So we went ahead and reported it.

Maybe the chain is preoccupied with its ambitious goal of convincing the public that KGC is truly grilled, when in fact KFC acknowledged to journalists that it’s cooked in a high-tech oven, up to 80 pieces at a time. The claim to being grilled comes from the use of a special plate in the roaster that sears grill marks onto the meat. That’s like putting “singer” on your resume because you sometimes belt out a tune while soaping up in the shower.

A grande serving of what?

2008-03-20T18:41:00.001-05:00

There had to be a secret message encoded in Howard Schultz’s presentation yesterday, because even Mike Tyson would know better than to pin Starbucks’ turnaround to rickety measures like adding a new coffee roast or installing a newfangled coffee maker. And let’s not forget the pledge to do more for the environment and the startup of a social-networking site. But maybe the real message of his address to shareholders was blurred by all the specifics. If you step back and view the elements as a package, it’s clear Schultz is taking a bold gamble. The one-time coffee-carafe salesman is trying to infuse the brand with more showbiz than the industry has seen since the heyday of eater-tainment.

Schultz described Starbucks’ purchase of a company that makes a new type of coffee brewer, a device called the Clover, as the most dramatic of the steps he and other execs detailed for investors. The machine supposedly makes a cup of coffee superior enough to justify a price of more than $2.50. Schultz said he saw it being used by a place in New York that charged $7 a cup. But how it generates the nectar of the bean may be as important as the quality of finished brew. Starbucks described the machine as a cross between a French press pot and a vacuum-style coffee maker, which provides a bit of a show with every cupful that’s produced.

Similarly, Starbucks disclosed that it’s rolling out a new espresso maker that gives the baristas more control over the coarseness of the coffee grind and the way the milk is steamed. Not coincidentally, the devices are not as high as the machines currently being used, which will allow patrons to see their drinks being made, and possibly even interact with the coffee maker.

Even the new frequent-guest program has some dazzle to it. Guests present their cards to be wowed a little by the service they’re then given. The benefits rendered don’t sound that amazing. Free half-and-half or soy milk? Whoa. But the give-and-take about the freebies does give the counter servers and baristas a chance to strut their stuff a little.

The bland-sounding moves that Schultz disclosed yesterday may prove anything but. It’s a bit of razzle-dazzle from someone who could prove to be a very adept ringmaster.

Don't picture this

2008-03-16T14:26:00.001-05:00

Trend worshippers are hailing a new restaurant feature as the mark that differentiates a merely haute place from one that might actually be a haunt of Mary-Kate Olsen, Lindsay Lohan or other bold-faced tastemakers. To make fashionistas’ must-try list, say the sort who care about such matters, a newcomer has to set a policy—ideally through an exterior sign—that photography is prohibited on the premises. How else can Brittney Spears cross her legs without worry?

Yet some of the places using that sign of distinction don’t seem like worthy shooting ranges for the paparazzi. Take the newest Pinkberry frozen yogurt outlet in New York. Grub Street, New York magazine’s excellent blog site, revealed last week that the store is banning picture-taking. As it pointed out, the treat shop is located in the heart of the East Village, a haven for the ridiculously body-pierced and absurdly tattooed. Are Brad and Angelina really going to stop by for a yogurt with mixed-in Captain Crunch?

Other Pinkberry outlets feature a similar warning, suggesting it’s a corporate policy. You can see for yourself by checking out any number of blog postings—many of which document the feature with photos of the signs.

The trend seems to be more prevalent in Europe and Asia. But the smattering of examples suggests it’s catching hold here in the States as well—on the coasts first, as per the usual process for a trend.

But fashion zealots may be surprised to learn the policy was first adopted more than a decade ago, and not just by private clubs or other hangouts for persons who stood a chance of seeing their names in a gossip column. The most-noted proponent was not some velvet-roped club, but Eatzi’s, the prepared-food cathedral of Chili’s parent Brinker International. So many people from the industry came in with their Nikons snapping during competitive reconnaissance missions that management had to curb the spying with a no-shooting rule. It certainly wasn’t to protect Miley Cyrus or Paris Hilton from appearing in the supermarket tabs. I’m not sure either gal was even walking yet.

'President Skinner here'

2008-03-10T17:28:00.000-05:00

It’s 3 a.m. and American families are safe and asleep. But there’s a phone ringing in the White House. Who do you want to answer it? If it’s a financial crisis, I’d vote for Jim Skinner, CEO of McDonald’s. With the chain posting an 8.3 percent leap in domestic same-store sales for February, after a nearly unbroken stream of bad news from other restaurant chains, he and his team have shown they know how to pull prosperity out of a trying situation. Indeed, we might want to consider steroid testing.

Okay, okay—Leap Year helped a lot, with Feb. 29 getting credit for four percentage points. But we’re still talking about a pretty heady jump in comps. And from what? The chain says the pole vault over last year’s tally is due to the push behind breakfast, coffee and everyday bargains. With the exception of Yum’s and CKE Restaurants’ brands, what quick-service chains aren’t doing that right now? How many have succeeded the way McDonald’s has?

Of course, it helps to have the chain’s marketing kitty, which is roughly equivalent to NASA’s budget for the Saturn project. But even competitors will have to acknowledge that they must be doing something right up at Oak Brook. Barack and Hillary should stop by for a quick tutorial on turning a wheeze into a “Whoa!”

Divide and conquer?

2008-03-10T00:07:00.001-05:00

I hope you can hear me over all that fiddling. It’s that damned pack of economists, wailing away as they watch the business climate soften like an overripe peach. They’re more concerned about declaring a recession at precisely the warranted moment than they are about the meltdown already evident in industries like the restaurant business. It’s a good thing the trade is taking matters into its own hands. While the Brooks Brothers set jams away, restaurateurs are trying R-word remedies like this recent phenomenon of adding more pricing tiers.

If you stop by an Au Bon Pain bakery-café right now, you can forego the usual salad or sandwich and economize a bit with one of the regional chain’s new small plates. But your options don’t end there, or even with picking which of the 14 new Portions you’d like. Go for the hummus and cucumbers, and you pay $2.99. Trade up to one that includes meat, like the Thai peanut chicken, and you’ll have to pop for $3.49.

In another economic climate, might the fast-casual chain not have bothered to create two pricing groups a mere 50 cents apart?

Similarly, if you wanted to trade up from fast food to a full-service breakfast, Denny’s has just the option for you. Or options, really. Try one of its three new “real” breakfasts (as opposed to the “fake” ones purportedly offered by quick-service restaurants), and you’ll pay $5.99. But each has a trade-up option: Pay a buck more, and get a few add-ons—another bacon strip, sausage link and hash browns, maybe.

The notion is certainly not new. It’s a staple of the industry to offer a soup or salad add-on for a slight bump in the price of an entrée.

But the tactic seems to be gaining momentum, and sometimes with a twist. In the standard version, you offer a lower priced option, like Quiznos’ $2 Sammies sandwiches. In some instances, even that price is segmented, into Bargain and Bargain Plus.

Perhaps the poster concept is Starbucks. Once upon a time, the coffee king offered its drinks in three sizes, in prices ranging from high to stratospheric. Now the chain is testing a $1 “short” option that comes with free refills. Some stores are also experimenting with coffee made in a press pot, priced at more than $2. That price falls between the charge for a standard cup of Coffee of the Day and the usual hit for premium espresso-based drinks.

Ming sings about his blings

2008-03-07T22:51:00.001-05:00

Having a famous chef join your table for a preview of his next restaurant project is just another can of Schlitz for my blogging colleague Bret Thorn. But it’s a heady treat for a non-food-writing, chain-focused schlub like me. So when Ming Tsai pulls up a chair at his Blue Ginger restaurant in the Boston suburb of Wellesley, you tend to listen raptly as he details the venture he’s undertaking with rock-star designer David Rockwell. Not that the endeavor needs any underscoring by a celeb. A 50-seat lounge with a menu limited to “bings,” a lstyle of Asian dumpling, isn’t exactly another burger place.

Yet Tsai invoked White Castle in explaining the rationale for Ming’s Bings, which will be the only items offered at the 50-seat lounge he's adding in the space adjacent to Blue Ginger. With young kids at home, Tsai has not gone for a namesake Vegas restaurant or the other bling of celebrity chef-dom. The add-on lounge and accompanying private dining rooms will be the first extension of his single-restaurant empire, despite the offers he’s fielded continuously in the 10 years since Blue Ginger opened. But Tsai slyly suggested that Ming’s Bings might not be his last undertaking. He explained that the bings he’ll serve are light, healthful riffs on the simple Asian street foodknown as xian bing. Usually the potstickers are made with gingered pork. Tsai indicated that his array might include a burger that’s encased in a dumpling-style wrap and served in a box—“like White Castle,” but “with a thinner layer of carbohydrate around the protein.”

So, asked NRN executive editor Richard Martin, are you going to see Ming’s Blings pop up in airports and other the other usual sites for chef-created finger fare?

“It all depends on what kind of a write-up I get in a leading industry publication,” he joked with our party, which also included NRN editor-in-chief Ellen Koteff, executive editor Robin Allen, regional business development manager Chris McCoy, and his wife, Martha.

Tsai graciously fielded our questions about high and low points in his career, including the moment he knew a career in engineering wasn’t for him. During a test in college, he was supposed to compute the speed of a dot traveling atop a tube that was riding on on a 33 1/3-rpm record. Instead of computing the answer, Tsai scrawled in his test booklet, “I don’t care,” and stormed out with the conviction he was destined to be a chef, not a bridge or skyscraper builder.

He also shared his secret for cooking calamari, which is served at Blue Ginger with what he described as a sweet potato coating. His chefs learn to cook it to the restaurant’s standards by closing their eyes and listening to the sound. The loud SHHHH of the calamari hitting the oil, or what Tsai calls the “crescendo,” quickly tails off to a near hush. The calamari has to come out of the oil at precisely that point because Tsai estimates the window for “perfect” calamari extends only for 40 seconds. The expeditor ensures the chef’s ear was acute by tasting a piece from each plate; Tsai noted that the expeditor might sample 60 pieces in a night.

In keeping with the blogging style set by the esteemed Thorn, it’s only right that I end this installment with a list of what I ate: Hawaiian Bigeye Tuna Poke served on a crispy cake of sushi-style rice, followed by Mom’s Famous Three Vinegar Sauteed Organic Shrimp, and completed by a shared platter of hush-puppie-like delectables that were sold as donuts. Bret could tell that this dish was perfected with a kiss of tamarind, or that one featured an ingredient you could only get in one section of China on a spring Tuesday, but I’d be out of my league. But if you’re ever looking for the lowdown on a Bloomin’ Onion, I’m your man.

No longer coverage-worthy

2008-03-06T00:01:00.001-05:00

Two days ago, a 60-year-old in a suit and tie walked into a Wendy’s in West Palm Beach, Fla., and pulled a pistol. First he fired at the lunchtime crowd clustered near the counter, killing an off-duty EMT who’d already eaten but had come back into the restaurant to exchange the toy his child had gotten in a kid’s meal.

The shooter then turned toward the dining room and blasted away at random, hitting four people. Without having uttered a word, Alburn Edward Blake then shot himself in the head and died. The police say any explanation went with him.

Google any of the details and you’ll snag dozens of stories about the incident in local and even some national media. But you won’t see a word about it (other than these) on the pages or website of Nation’s Restaurant News. Because we’re a national news outlet focused narrowly on the business of restaurants, a multiple shooting in a lone fast-food place just isn’t coverage-worthy. The situation per se offers no business insight, and the incident is no longer sufficiently extraordinary, like the shootings some 15 years ago at a Luby’s in Killeen, Texas, or the rampage a few years earlier at a West Coast McDonald’s. It’s a heartless call, but a sound one news-wise.

But it’s unnerving to think we’ve reached a point where a random multiple shooting is no longer enough of an unusual occurrence to merit a spotlight.

Off your chest

2008-03-04T17:51:00.001-05:00

I was polishing my Olympics medals when the President called to let me know that two more best-selling authors had just admitted they'd bent the facts of their blockbuster non-fiction works. If I hadn’t been for my C.I.A. training to withstand shock, I would’ve toppled for sure into the Pope, who had popped over for lunch with Angelina Jolie and me (he loves those pizzas I developed for Wolfgang Puck). But it only got worse: The New York Times reported this morning that restaurateur Robert Irvine was replaced as host of a Food Network show because of acknowledged exaggerations on his resume, like claims he’d been knighted and counted Prince Charles among his buds.

At least all three of the truth stretchers admitted their fudging, obviously hoping that confession truly is good for the soul. It would only be appropriate that we keep the good karma building by making a few candid admissions here on the part of the industry:

• Twelve or 14 dollars for a glass of wine should only be collected by servers wearing bandanas over their faces, a la Butch Cassidy. Unless the bottle wholesales for a few hundred dollars, there’s no way a wine should be priced that high, especially in a casual place.

• Restaurant groups named after a famous chef often only see their namesake at the Christmas party.

• Part of casual dining’s current woes is the lousy food that’s offered by even some of the most respected players. The sector seems to be suffering the same inertia in that regard that tripped up the big quick-service chains before they realized a frozen hockey puck of ground beef might not be that appealing to a public that spends its leisure time watching the Food Network. The segment needs to shake out of its lethargy and catch up with the higher standards of the times.

• Bio-diesel fuel, though a smart re-use of something that might otherwise end up in refuse pits, is not as green as the industry suggests. It’s not the cleanest-burning fuel available, and, thought it minutely lessens our reliance on imported oil, it’s not as much of an eco-boon as some of the publicity suggests.

Splashing into the family market

2008-03-03T23:27:00.001-05:00

Fast food’s success with beverages clearly hasn’t gone unnoticed by family specialists one notch up the pricing spectrum. Today brought news of IHOP and Steak n Shake both giving their drink menus a tweak, possibly foreshadowing an overhaul by the whole sector. And all you can think is, What took ‘em so long?

With few exceptions—IHOP and Steak n Shake among them—the segment has been squeezed flatter than a short stack by casual chains edging down market and quick-service players, particularly fast-casual upstarts, creeping upscale. Beverages were always a part of the casual sector’s assault, since places like Friendly’s or Denny’s could hardly compete mojito a mojito. Then came the more recent onslaught of the quick-service restaurants, touting their coffees and floats the way they once hyped burgers. What’s a family restaurant chain to do?

Village Inn responded with a new format that incorporates a distinct coffee bar inside. Clearly the venerable chain is giving more than a nod to Starbucks, the concept that kicked everyone’s butt until the QSRs started kicking back.

But it’s not alone in flycasting new beverage choices into the public’s pool of options. Today IHOP opened the curtain on its new Dr. Seuss-inspired promotional items, including one that sounds like a Bill Cosby hangover remedy. The Beezlenut Splash consists of cherry and blueberry-flavored Jello cubes plopped into lemon-lime soda. It’s just the thing to sip while wolfing down the limited-time special of Green Eggs and Ham, which aren’t nearly as Cat and the Hat-appropriate as they sound. The eggs are your conventional color, though scrambled with spinach to justify the name. “Green” only modifies the eggs; the ham is roughly the hue of a Spalding Pinky.

Steak n Shake’s new drinks are far less surreal. In a breakfast marketing push aimed directly at QSRs, the always-open concept today added a line of morning smoothies. Curiously, although the equipment to whip up the smoothies is obviously always there, the drinks will only be offered at breakfast, suggesting the concept doesn’t want to undercut its lunch or dinner selections, or possibly slow service.

Those brands may actually be a little behind one of the sector’s sumos, Denny’s, which has been steadily expanding its roster of drink choices. Last April, it added a new line called Juicy Fruit Fusion Favorites—basically, blends of juices and soft drinks reminiscent of mocktails.

It remains to be seen if beverages will deliver the sort of sales boost that has helped the QSR segment during a trying time for the industry as a whole. But clearly the family sector is giving that route a try.

Will there be another fajita?

2008-02-28T10:44:00.001-05:00

Wendy’s touted its Frescata line as a major point of different—deli sandwiches made with bread baked in the restaurants. It was canned in December. Panera Bread said its Crispani pizza would rev up dinner sales and please patrons looking for all-natural options. The franchisor quietly yanked the item sometime after November. In 2006, Starbucks trumpeted its new premium-priced breakfast sandwiches as the long-sought way for the chain to grab more food sales. Instead, the array is on the way out. Is the blockbuster new product going the way of two-for-one happy hours and free matchbooks?

Well, there is the incredible success of sliders, the mini-sandwiches that everyone from Good Time Burgers to Cheesecake Factory is selling these days. They, in turn, are part of the miniaturization that has also led to the widespread availability of spoon-sized desserts, small plates and even small-pour glasses of wine. But, as your nearest White Castle or Krystal attests, that mini mania is nothing new.

Ditto for burgers, which are truly undergoing a second coming. Sure, they may be made now with Kobe or Angus beef, but it’s still the American classic, just gussied up with better ingredients and garnishes.

Indeed, with the exception of beverages (the mojito, cosmopolitans, Pisco sours) can you name a new chain menu addition since the middle-decade premium salad blitz that has really wowed consumers? Double points if it’s something other than McDonald’s Snack Wrap.

The dearth says something about the growing sophistication of consumers. They’re not as dazzled as they once might have been by sheer novelty. Instead, they’re looking for a true advance—better flavor, a meal more in keeping with their lifestyles or eating habits, a meaningful alternative to what they know. If that’s not in the set of options, then go with the best among the choices offered.

And, of course, now it will no longer extend to Frescattas, Crispanis or a microwaved Egg McMuffin a la Starbucks.