Your eyes don't deceive you

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.

Daydream believers

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.”

Goody's no gum drop

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.

Miscellaneous stuff I learned at the NRA show

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.

'Paging Mr. Ripley'

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.

Fred Turner takes McD's podium again

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.

How lemmings draft a menu

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

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?'

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.

'President Skinner here'

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!”

Will there be another fajita?

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.

Crunch time?

The business week is only a few hours old, but it’s already yielded indications that restaurant chains are trying two new tacks in their product introductions: Tout texture, and crow about being better if you can’t brag about being first.

Both trends are evident in KFC’s new product, a knock-off of McDonald’s Snack Wrap called the Toasted Wrap. Like McDonald’s chicken snack, a home run by anyone’s standards, the new Toasted Wrap snack is priced at $1.29. It, too, consists of all-white chicken, lettuce and a flavored sauce, all wrapped in a flour tortilla. But the little bundle is then grilled, giving it a bit of a chewy texture. The chain is touting that difference in feel with consumer “touch” tests, presumably pitting the Toasted Wrap against the Snack Wrap in head-to-head comparisons where consumers indicate which feels preferable.

KFC makes no bones about following McD’s lead; the latter’s product is cited in the announcement of the Toasted Wrap’s introduction.

Meanwhile, Papa John’s, an arch-rival of KFC sibling Pizza Hut, is pursuing a similar strategy with its latest product promotion. The chain is touting the texture of its re-formulated pan pizza, the Papa’s Perfect Pan. “The product features a crust that’s irresistibly crunchy on the outside and soft and chewy on the inside,” explains the promotional materials. The literature also describes the pizza as tasting better than ever, without a word about the flavor.

The chain is offering a free perfect pan to anyone whose birthday falls on Feb. 29.

Interestingly, arch-rival Domino’s Pizza also launched a promo today tied to the current Leap Year, though you have to do more to cash in than merely have a Feb. 29 birthday. The delivery chain is offering to throw a pizza party for every family that has a child on Feb. 29 and names it “Brooklyn,” a tie-in with Domino’s Brooklyn-style pizza. The first to use the name gets a sweetener of $1,000. Which, no doubt, will go toward later therapy for a kid who was named after a pizza so his or her family could get a free party.

Family's restaurant gripes become a business plan

An idea for a family-friendly café—think of a Panera Bread Co. crossed with a Playland-outfitted McDonald’s—drew enough votes from a website for entrepreneurs to bag $40,000 in start-up funding.

Alissa and Noah DeRouchie hatched the notion for their Sprout Soup concept after wincing through innumerable meals with their two toddlers. The taller of the four family members knew what they prized in the less-than-perfect options they’d prioritize when the whole household dined out: Healthful food, preferably in the form of sandwiches, served up in a comfortable, attractive setting at a reasonable price. But they wanted the place to entertain the kids while they ate, which means shifting the playgrounds typical of fast-food joints to the center rather than the back of the dining room. And the activities would extend beyond a run through the ball crawl, to events like sing-alongs or story readings.

The DeRouchies entered their idea in a contest run by the accounting software supplier Intuit. It was chosen from among 1,500 submissions for the prize of $50,000 in seed money—still not enough to get the operation off the ground, but still a major infusion of capital. According to news reports, the DeRouchies will supplement their prize with $60,000 from a credit line and $30,000 of cash. The funds were apparently generated in part from the couple’s website, Sproutsoup.com, a virtual store featuring baby carriers.

According to their website, the DeRouchies plan to open a retail operation this spring, presumably in their hometown of Columbus, Ohio. They’ll start to remodel it into a restaurant by offering juice and coffee, and then presumably progress step by step into a full-fledged café.

Foreign notions

The balance of trade in restaurant ideas has long been out of whack for American chains, with U.S. brands exporting far more business know-how than they’ve received in return. But even savants here in the States can occasionally glean a lesson from their brethren afield. And so it is with two recent developments beyond our borders.

For the first, we transport to Britain, where McDonald’s has once again engineered an intriguing new HR practice. The United Kingdom is where the chain developed the ground-breaking policy of allowing families to sign up for a single unit-level position, so teenaged siblings can fill in for one another when school or social schedules conflict with work commitments. The idea is that the family can find a member to work the shift far more readily than the restaurant can find a stand-in. The set-up allows the family to handle the scheduling—in essence, shifting that authority from a unit manager to a household.

Now comes word that McDonald’s has secured government authority to bestow the equivalent of high school advance-placement credits on some employees. Management-level staffers who complete the training needed to run a unit will be awarded a “basic staff management” qualification, which some colleges or universities would recognize as proof of advanced high school study. The program, apparently a pet project of Prime Minister Gordon Brown, is intended to blaze a new, recognized path of higher education. In the process, it could elevate perceptions of restaurant work and hopefully bolster management retention for McD’s.

The chain has said it doesn’t intend to import the program to the U.S. But the burger giant has certainly shown an appreciation of education’s recruitment and retention benefits on this side of the pond. Several years ago, McDonald’s Corp. was given accreditation to grant college credits for courses taken at Hamburger U., the management training center on the grounds of the chain’s Oak Brook, Ill., headquarters.

A good case study for Hamburger U. enrollees would be what reportedly happened at a franchised Second Cup coffee outlet north of the border, in the heart of Tim Hortons country. For reasons that were not revealed, the men’s room of the restaurant was chosen by heroin addicts as a choice location to shoot up, as management surmised from the needles and syringes that were left behind. With the apparent blessing of the Montreal police department, the restaurant installed a fake security camera in the bathroom and trained its unseeing lens on the lone stall, hoping to discourage illicit behavior. The desperados using the place to shoot up would think they were being filmed.

Unfortunately, so did patrons who used the bathroom for more acceptable reasons. The well-intentioned effort to protect them from dirty needles or loitering unsavory sorts backfired into a public relations scandal, even though no customers were actually filmed.

Second Cup reportedly directed the franchisee to remove the camera.

The kerfuffle arose as restaurant cameras are becoming as prevalent in restaurants as spoons. Some operators use them as a way of letting the kitchen know if a table is ready for its next course. Others use it for security reasons. But the devices may not be the best equipment to install in the bathroom, even if they’re bogus.

A restaurant employee named Robert Hawkins

None of the 13 people who were shot Wednesday at the mall in Omaha were in a restaurant or the food court at the time, yet virtually every news report draws a connection between the tragedy and the restaurant industry.

Invariably, the stories note that the 19-year-old shooter had been dumped by his girlfriend a few weeks ago, and that he’d been fired from his job at McDonald’s just a short while back for allegedly stealing. Without expressly saying it, the presentation leaves the impression that the dismissal may have pushed Robert Hawkins over the edge.

The stories unintentionally underscore two large truths about the restaurant business. First of all, it’s not surprising that the tragedy would involve someone who worked at a McDonald’s. Some of the victims might have also worked for the chain or another fast-feeder at one point or another. Ditto for the police and rescue workers who were summoned. Heck, if someone had a flat in the parking lot, they might’ve been an hourly restaurant employee at some stage in their lives. Given how many people float in or out of the industry for employment, it’s like saying “the victim went to high school,” or “the perpetrator drove a car.” Indeed, the point was included because it highlights how ordinary Hawkins seemed on the surface to casual observers.

But the fact was also stressed because it added more eeriness to the story. This wasn’t a kid who ran with gangs or spent his time torturing animals, or at least not to our knowledge. He certainly had his emotional problems, which are only now working their way into follow-up articles. But noting that Hawkins worked at a McDonald’s said a lot about him, and what it said didn’t seem to match the image of a boy who’d go into a mall at Christmas time and kill eight people before taking his own life. Working at a McDonald’s implies a certain innocence, a certain decency within a young person. And that made the turn of events all the more bizarre. It would have been like noting that Hawkins was an Eagle scout, or that he visited the local old folks’ home every Sundays.

Society may tar restaurant jobs as a dead end, or something that you do as a last resort. But how can anyone dispute that working in restaurants is an experience that’s good for a teen? The news reports on the situation in Omaha seem to be saying the same thing, just in a decidedly left-handed way.

A yellow light on voluntary menu labeling

Chain executives will be hyperventilating into brown paper bags next week when the push for menu labeling is taken up again by New York City’s health department—or as some restaurateurs view it, the castle of the mad Dr. Friedan. The agency will invite the public to comment Tuesday on its latest calorie-disclosure proposal, which is widely seen as a possible model for jurisdictions throughout the country. But it’s probably better they copy that measure than reach across the Atlantic for the approach now being pursued in the U.K.

The Food Standards Agency—Britain’s Food and Drug Administration—is pressing McDonald’s, Compass and other multi-restaurant companies to go beyond merely disclosing nutritional information on their menus, according to London press reports. The regulators want the big operations to steer patrons toward more healthful choices, and away from options with high sugar, salt or fat contents, by using stoplight symbol. A green circle, like a “go” light, would designate the best choices. A red circle would send a not-so-subtle message of, “Stop!” And a yellow indicator would be the equivalent of a Larry David-like, “Eh.”

Lest you think the restaurant industry is crying wolf, consider that the alert system is already being voluntarily followed by a number of major supermarket chains across the pond. The foodservice chains are being asked to adopt the program voluntarily, but the esteemed London Telegraph said the present “talks” could build into out-and-out pressure on the operators.

The news reports say that regulators are focusing their sales efforts on quick-service chains because children account for a big portion of their clientele. It’s the argument that the industry has struggled in vain to parry: Adults may be able to make an informed choice about what to eat, but how can you expect children to comprehend nutrition stats as they’re standing in line? Why not just give them a simple symbolic rating of each item?

It’s a powerful argument, and one the industry would no doubt like to bar from these shores.

Testing less testing

Taco Bell probably has nothing against surveys, but it won’t be getting the usual Christmas card this year from whatever company makes the forms and the stubby pencils that consumers use to fill them out. The chain alerted financial analysts last week that it, too, is veering away from the traditional process for gauging customers’ reaction to possible menu additions, a detour that’s already being explored by McDonald’s, Wendy’s, Baja Fresh and presumably other chains. The old standard of exhaustively testing new products is apparently going the way of the rabbit-ear TV antenna as restaurant brands try to respond with more alacrity to the zigging and zagging of consumer preferences.

But not all franchisees view shortened product tests—or the elimination of testing altogether—as a positive shift. Some licensees of McDonalds, Wendys and Baja have yelped about having to add products or a whole new menu line before the operational and marketing support has been adequately pressure-tested. And misfires, they complain, can do more damage to their businesses than to a franchisor. They say the streamlined assessments fail to balance sales benefits against such factors as local labor expenses, the cost of capital, or the longer-range perceptions about service times.

At least one Baja franchisee is irate because he believes the home office isn’t effectively gauging even the top-line impact of introductions. He asserts that the chain recently shot-gunned a product into the market with advertising support, only to discover that it didn’t have sufficient supplies to meet the heightened demand. But, in fairness, that couldn’t be confirmed with the franchisor.

Wendy’s, on the other hand, has publicly disputed franchisees’ even louder assertions that the chain is inadequately testing new products and operational changes. The charges were levied in a letter sent to headquarters late in the summer by 16 franchisees, who cited the current testing mindset as one reason for “the slow decline of our brand.”

Having seen my share of franchisee disputes, I’d be a fool to take sides in a fracas like that one. But it certainly was curious that Wendy’s current management included a rollout of breakfast in the turnaround strategy it disclosed last year. The same announcement noted that the meal service would be tested. That’s like proposing as soon as a blind date opens her door, then suggesting the two of you discuss compatibility after you’ve been getting together for a year or so.

Franchisees of McDonald’s have been more discreet in their complaints about the chain’s recent quickness in adding new products, particularly beverages. But the dismay was evident in the latest survey of McD’s licensees by former analyst and current restaurant-company investor Mark Kalinowski. In his most recent quarterly canvass of the operators, several complained that lattes and other specialty drinks were being shot-gunned into the market without sufficient research on service issues or even the long-term payback of buying the required equipment.

"The Combined Beverage Initiative is a real concern for me," said one respondent, refering in McDonald's-speak to the beverage program."I have heard a number of
estimates from $100,000 to $130,000. The train has left the station, stores surveys are being done and we have yet to see any FACT-BASED INFO to know if this is a good
investment or not."

One anonymous respondent suggested that franchisees form a renegade association that’ll be more vocal than the official franchisee organization in shaping the chain’s strategy.

In fairness to Taco Bell, there are no evident signs that its franchisees have an issue with the new testing strategy, known internally as the Explore in Store process. The shift is intended to help the chain double the number of new products it fly-casts into the market in any given year. To crank out products at that speed, Taco Bell execs told analysts at last week’s special meeting, possible new options will be introduced in just a few stores, with the new choice highlighted in signs. If the reception by consumers is encouraging, the item could be quickly rolled systemwide, presumably as a limited-time offer.

Lehman Brothers’ Jeffrey Bernstein, one of the restaurant analysts who attended the meeting in Taco Bell’s hometown of Irvine, Calif., said in a report that some products will continue to be developed and tested in the chain’s usual fashion. Indeed, he noted that Taco Bell is still testing breakfast, an initiative that executives disclosed at the same meeting one year earlier. Yet the testing is continuing, and “the expansion appears slower than initially expected,” Bernstein wrote in a report to clients.

The new streamlined rollout process could serve Taco Bell well in catching up with other quick-service chains on two fronts. During the meeting, executives aired intentions to add a frozen beverage to the Mexican chain’s menus, and to explore some health-oriented “better-for-you” products.

Are things bad all over?

If the restaurant industry has slogged through a worse reporting period than the last few weeks, a guy named Hoover was probably president—if not somebody named Voldemort. In a 19-day stretch, Domino’s posted a 55-percent freefall in net income, Ruby Tuesday posted a 48-percent plummet, Brinker notched a 21-percent decline, Wendy’s disclosed a 56-percent dive, P.F. Chang’s earnings sank 20 percent and IHOP finished $11.6 million in the red. For all but a few industry standouts (notably McDonald’s and Tim Hortons), the recent past has been the stuff of blues songs.

The industry has certainly shrieked through its share of rollercoaster drops before. As Ruth’s Chris CEO Craig Miller noted during MUFSO, the current ills of sky-high fuel prices and surging food costs are minor compared to what he saw in the 1970s, when President Nixon froze prices to check inflation and consumers couldn’t buy gas at any price because of an OPEC embargo. This is nothing compared to then, he suggested.

But what makes Quagmire 2007 unique, at least out of all the restaurant downturns I’ve witnessed, is its lack of discrimination. In past sales chills, business usually shifted, with the big brands wresting traffic away from the scrawnier players in a display that would have had Darwin smugly nodding. But this time, the dynamic seems to be more of a lowering tide. Many of the companies that reported their earnings with a decided wince were the very ones that filed their SEC documents with a swagger just a short while ago. This is truly a macro-effect, not a bad story with plenty of footnotes. The list of the unaffected is shorter than a mash note to George Steinbrenner.

Which, of course, underscores the question, What’s the industry to do? Miller offered his recollections of worse times to illustrate that better conditions will return eventually. But how can a chain hurry it along?

BJ’s Restaurants, one of the companies to clearly prosper during a period that most competitors characterize as a kick in the groin, has a very definite idea. “In this difficult operating environment, where consumer spending for casual dining occasions and the prime costs of doing business will likely continue to be under significant pressure on an absolute basis for the foreseeable future, we believe the more successful casual dining concepts will be those that protect their overall consumer 'approachability' for all dining occasions and that offer even greater quality, differentiation and overall value to the consumer," CEO Jerry Deitchle was quoted as saying in the company’s announcement of a 31 percent rise in net income on a 30 percent rise in revenues for the third quarter.

I’m not crystal-clear on what he means by “overall consumer ‘approachability,’” but I assume he’s trying to say that the objective is boosting customer frequency, a laudable goal. Certainly that’s more ambitious than the usual approach of trying to buy customers by giving them a deal, a reflex that can haunt a chain for years to come.

Avoiding that knee jerk to focus on “approachability” and differentiation—an objective that should trump the others, in my estimation—would be as much of a departure from the norm as this downturn itself seems to be.