Wolves in Kermit’s clothing

Does an organic menu qualify a restaurant as green? How about a pledge to feature only sustainable seafood? Or meat exclusively from humanely farmed animals? And what about all the places that now recycle their fryer oil into bio-diesel? Skeptics say a vehicle running on that fuel still emits more pollutants than a hybrid gas-burner might, so the environmental benefit may be more limited than the public realizes.

You can’t blame the average citizen for being confused. What, exactly, does “earth-friendly” mean, and how does that differ from “eco-safe,” or even green? And how about descriptors like “recyclable?” Does that mean the item in question is actually being kept out of the landfills for re-use, or merely that it could be?

And don’t forget technical terms like RoHS—“restriction of hazardous substances,” for those of you who don’t have a degree in electrical engineering. It’s the standard that was adopted by the European Union to designate electrical equipment produced without the use of certain environmental toxins. It’s already creeping into use within the United States as a desirable designation for restaurants and other businesses that want to be green, and California has already prohibited the sale of electronics that fail to meet RoHS criteria. Other states are considering a similar ban.

Those are some of the issues we’re facing as we strive to expand our coverage of the green movement, a mega-trend to be sure, but one that has more charlatans and pretenders than a gathering of hair-restorer pitchmen. Indeed, there’s a term for it—“greenwashing,” or purposely giving something a green connotation regardless of the true environmental impact. If we’re having trouble sorting out fact from assertion, and this is a focus of ours, how can anyone expect a restaurateur to find the time for some deciphering work?

Yet, fortunately for all of us, there are some operators who are determined to do the right thing, including the necessary debunking. Truth be told, some of us scoff that they’re only doing it to appease customers or employees who want a greener operation. They’re doing it for marketing considerations, not to save the spotted owls, according to that line of criticism.

But so what? If those restaurateurs are investing the time and effort to do the right thing, , their efforts should nonetheless be celebrated regardless of their motivation.

And that’s exactly what we plan to do. Stayed tuned for new online features that spotlight what restaurateurs are doing to operate in a more ecologically responsible manner, and what kind of return they’re seeing on a true investment. We’ll try to stay clear of the semantics and focus on the effects, business-wise and environmentally.

Secret holiday diary of Nelson Peltz

Nelson popped over with a bottle of Captain Morgan last night to catch “Dancing with the Stars” and left without his backpack. I know you shouldn’t peek at a person’s diary, but it was right there under his copy of “Eat, Pray, Love.” I couldn’t resist.

Wednesday
Played Monopoly with relatives at the holiday party; was shocked to learn the money wasn’t real. Just as well, I guess; they thwarted my attempts to take over undervalued assets—the hotels on Baltic and Oriental—and refused to discuss how the railroads could be managed more profitability. After a few well-placed investments, they’ll rue that stubbornness.

Tuesday
Watched the umpteenth airing of “It’s a Wonderful Life,” one of the greatest tragedies of all time. A good man, that Potter. To watch him be destroyed by wussy George Bailey still brings tears to my eyes.

Monday
Went to see “The Grinch Who Stole Christmas” but was asked to leave. The Grinch said he couldn’t stand the competition. The screams of fright from the children were intolerable in any case, so I headed over to Fifth for some shopping. But Saks said it wasn’t for sale.

Sunday
Sent “21” into conniptions by giving Billy Ackman a surprise atomic wedgie. The lad thinks he knows a thing or two about forcing companies to heed his wishes. But he’s merely the Popeye to my Blutto.

Saturday
Fielded a call from George Clooney, who’s already casting “Ocean’s 27.” He’d like me to reprise my roll from “Ocean’s 10,” Nameless Man at Posh Party. But I’m not sure we’re simpatico on the character’s direction. What I’d really like to do is direct. Or take over DreamWorks.

Friday
Visited Washington and stumbled on a lovely house that has to be mine. All white, with a decent yard by Washington standards, though that big monument across the street will have to come down. Even comes with a heliport and guard stations. Maybe I’ll just buy the city.

Thursday
My pursuit of the Cadbury candy company continues. Nevermore will Caramello have to take a second seat to Royal Dark.

­Wednesday
Note to self: Check status of Wendy’s takeover attempt. Spending far too much on Doubles to remain just an investor.

Oh, well. Off to raid the retail sector!

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.

Start the 'Rocky' theme

Back when Nation’s Restaurant News was still covering Howard Johnson’s comeback attempts, our pages would be filled with stories about a crop of hip quick-service upstarts, akin to today’s fast-casual ventures. The young hopefuls included such brands as D’lites, a health concept, and G.D. Ritzy’s, an ice cream and hamburger specialist. The pizza segment seemed particularly fertile ground, with such promising up-and-comers as Godfather’s Pizza. And, of course, Rocky Rococo.

Named after a character in a Firesign Theater bit [explanatory note for readers under age 45: Firesign was a demented but highly intelligent comedy troupe in the 1960s and ‘70s, like a whacked out MadTV staff], Rocky had attitude, flavor, even an edge. In a day of white-bread restaurant concepts, it delivered a hint of cayenne. It was also a pioneer of such now-pronounced trends as co-branding, or what was then known as tandem restaurants. If memory serves me correctly, it even joined one of its units with a Wendy’s.

Like plenty of promising concepts before and after it, Rocky Rococo grew like Indiana corn. From a single store in Madison, Wis., it sprouted to 130 units before problems overshot it, and units started closing in the late 1980s. It would shrink to a skeleton of 30 stores.

But now comes word from its native Wisconsin that Rocky is ready to grow again. The chain, currently at 40 stores, added two in the recent past, and will fire up the ovens of a few more in 2009, according to a story in the Milwaukee Business Journal. The growth is coming from both franchising and corporate development.

The company is now headed by Trey Hester, the son of an early executive. According to the Business Journal story, founders Roger Brown and Wayne Mosley are still involved, though now as franchisees.

The story quotes Hester as saying he hopes to rebuild the chain back to 130 stores, moving slowly this time.

And look at that—with only an announcement of more stores to come, it’s already snagging coverage again.

Kids these days

If you’re hoping to snag employees with money and perks, we need to talk, bunky. Pay just doesn’t pull young people the way it might’ve in the pre-Halo III days, probably because youngsters assign far more value today to sugar cubes like free time or the opportunity to learn something. Or as People Report CEO Joni Doolin expressed it during her company’s recent conference in Dallas, “maybe it’s time to think about the employee value proposition in a different way,” or what’ll make your restaurant beam like an iPod in a Sony Walkman world.

Maybe that’s a bad metaphor, given potential hires’ indifference to material draws in general, including any slim differences they may spy between one pay package and another. Not that they’re likely to spot much variance. “Welcome to Commodity Hell: We’re at the point where our compensation and our benefits programs are the same,” Doolin told the room of restaurant CEOs and HR execs.

“We’re not differentiating ourselves, so we have to think about different concepts,” she continued. Indeed, said Doolin, the whole “command and control model,” where directives are ramrodded down from the CEO or other corporate C’s, is “a half-truth,” a bewildering mode of operation to youngsters who have studied, played or even dated primarily in teams or groups.

If the foodservice industry truly wants to sweeten its appeal for new job-market entrants, it has to leave nothing beyond reconsideration, including the hierarchical management structure used by almost every company in the field, she explained.

She depicted a model of what tomorrow’s org chart might look like; it resembled a blueprint for one of Buckminster Fuller’s geodesic domes, with employees serving as nodes as from which radiated lines of communication to nearly everyone else in the organization. This was not the usual model of one layer stacked atop another, and a rigid pipeline of communication from the top down.

What else might appeal to a workforce whose values are drifting far a-field from Baby Boomer sensibilities? During the prior year’s People Report conference, Doolin noted, the research concern had underscored the wooing power of continual learning opportunities and a culture that fostered a sense of community, societal values and inclusion. Those qualities not only appeal to potential hires, but also help to distinguish one employer from another.

But as every company embraces those enticements—no doubt a factor behind the greening movement evident at so many chains—what’ll be the next magnetic point of differentiation?

“We think lifestyle benefits are really the way to go,” said Doolin. By adjusting rules and cultural underpinnings to accommodate the lives that candidates want to lead, an organization can truly set itself apart, she stressed.
”This is where you go beyond the mission statement,” to experience, Doolin said. “It’s the sum experience of working for you.”

Speakers appearing later in the program suggested what some of those draws might be. And try to keep an open mind here, because they’ll sound like blasphemy to anyone who grew up with the rigid rules of foodservice circa the 1980s.

For instance, one speaker noted the importance of accommodating—if not fostering—employees’ efforts to maintain their health. One of the presenters noted how his company, albeit a healthcare firm, allows doctors to take a break at two or three to hit the gym.

If that might’ve sounded far-fetched to the restaurateurs in the audience, their skepticism might’ve been allayed by the comments of James Broadhurst, CEO of Eat’n Park Hospitality Group, operator of the Pittsburgh-area family dining chain. In accepting an award, Broadhurst noted in passing that he was wearing a pedometer to record his steps for a headquarters-wide health initiative. Pedometers had been issued to all of the home-office staffers, with a recommendation that they walk 10,000 steps a day. Another Eat’n Park staffer later told me that the office is divided into four teams, with a heated competition among them to see which was covering the most ground. The results are listed on an intranet site, and the leaders are rewarded with treats like a gift card.

Some of the other suggestions were more outlandish. Penelope Trunk, a Gen Y-er who acknowledged she probably wasn’t on the same wavelength with the audience, suggested during her presentation that inter-company dating be readily accepted, a reflection of how work life and social life are converging today.

Trunk also indicated that the promise of a promotion is no longer a motivator because young people don’t think in terms of climbing a ladder. They think of what they’d like to do next, and not in terms of a career path. If they’re likely to be gone in two years, who cares if they can move up a rung within that organization?

Instead, she stressed, ongoing education “is the coin of the realm.”
Other presenters stressed the importance of flexibility and of giving constant praise to youngsters who probably graduated from kindergarten with the same pomp and celebration that were reserved for an older generation’s graduation from high school. This, several speakers observed, is a group of people who probably were each presented with a trophy of one sort or another at the end of their Little League or soccer seasons.

In any case, noted People Report president Teresa Siriani, this is not an age group that feels it has to work. “We are at an historic low in the employment of 16 to 19-year-olds,” she said. “It’s not that there are not 16 to 19-year-olds out there.” Rather, “they’re opting out,” a result of their busy daily schedules.

“Guess what?,” concluded Doolin. “People don’t work where they have to, they work where they want to.”

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.

Try this survival technique, Grasshopper

I was having an out-of-body experience the other night when I bumped into Confucious, who was surfing the ether to dream up sayings that might impress women. “Hey, Cunfucious,” I shouted, “people have been gushing for centuries about how wise you are. Any sage advice for casual-dining execs trying to get through this rough time without a pink slip?”

“Buzz off, Scooter. I’m a philosopher, not a miracle worker.” He tugged on the Fu a few times. “Aw, alright. Tell ‘em, ‘That brand which commoditizes must make the Target dog its own.’” He smugly smiled.

“What the hell does that mean?”

“You meatball, don’t you get it?” he retorted. “They who squeeze all the character from their concepts are marketing wrung-out washcloths.”

Still a blank stare.

“Look, dummy, these chains all scrambled to sand off the rough edges that made their concepts different because a simple oval makes a better cookie cutter than a silhouette of Carmen Electra. It’s easier to duplicate blandness 1,200 times.”

Still no light-bulb bubble above my head.

“Yikes, don’t you see? They’ve turned the industry’s strongest segment into a commodities game. You could step into any of the grill concepts and have no idea which one you were in. And they who commoditize buy cut-glass thongs from Victoria Secret.”

Embarrassment, but no flicker of comprehension on my part.

He heaved a heavy sigh. “Look, if you’re a commodity, the only way you can compete is on price. That’s great if you’re the size of Wal-Mart and the whole market is expanding, so you can make it up on volume. But restaurant spending is softening overall, and margins are already thinner than Kevin Federline’s talent.

“The only other option,” he continued, “is differentiating yourself as a brand with pronounced character and flavor—a distinct experience, where you stake out a specific piece of the market instead of trying to be all things to all consumers. That’s exactly what Target did.

“It’s going to turn off the customers whose idea of spice is mayonnaise on plain macaroni. But it’s going to be embraced as a standout by the folks who wouldn’t mind something different from the status quo. And there are a lot of those people.

“Otherwise,” he said, “You’re the Kmart of a few years ago.” He saw my puzzled look. “It went bankrupt, Einstein. While Target was kicking butt.”

And with that, he gave the Fu Manchu another tug and was gone. All I could think to do was yell after him, “Don’t take any wooden nickels.”

Who gets the top job?

Two days, two telling indications that marketing may be the preferred path to the corner office during these trying times for casual dining. Add the appointment of another one-time marketer to the presidency of Mimi’s Cafe and you have a Johnny Cochrane-gauge argument that old hands at snagging sales are the chain chiefs of choice during a downturn in customer counts.

Yet, as a speaker stressed Wednesday during the People Report’s annual summit in Dallas, the era of the specialist leader is waning elsewhere in the business world. As consultant Rand Stagen put it, you can’t dominate the game today if all you have is a killer forehand swing. Today, at least in fields outside foodservice, the person with first dibs on the corporate jet is the one who’s closest to a renaissance chief, with talent across a number of disciplines. And that includes such superhero skills as brainstorming whole new business lines, or spotting a door to opportunity where others see a wall. The example he cited was Steve Jobs, a one-time animation-company exec who took over an ailing computer firm and forever changed the music industry, with the television business now eying him as the guy in a hockey mask at an abandoned summer camp.

So is this just another crazy uncle in the attic for foodservice? One of those peculiarities, like embracing the internet more slowly than several tribes that still wear huge plates in their lower lips?

Hardly. Or maybe not exactly. The situation does underscore a kink of the business. But the quirk in this instance is not a time lag. Restaurant-chain boards may be giving an edge to marketers in filling the corner office, but a foodservice marketer isn’t your typical slogan-hatching ad or promotions vet. Marketing has seeped well beyond the cubicles with all the whacky stuff on the walls to infiltrate such departments as design, operations, sometimes recruitment, and certainly whatever brain trust drafts overall corporate strategy. It’s like the bass line that drives a hit song.

Clay Dover got the nod to head up Metromedia Restaurant Group, the parent of Bennigan’s, after spending much of his time at that concern in marketing. But his knowledge clearly extended beyond the traditional boundaries of the discipline. Awhile back, I wrote a column that lamented casual dining’s transformation from the Rolling Stones into Debbie Boone. Its rock-and-roll spirit had been neutered into dentist-office music, a process business gurus would tag as homogenization. Dover dropped me a quick e-mail expressing his agreement, then spelled out Bennigan’s intended direction in a few dozen words. It was the view of a person thinking far beyond marketing, all the way to gene splicing. We’re not talking about a zippy ad slogan and market-speak about demographics. His comments hinted at a chief’s pride and vision.

Similarly, Bruce MacDiarmid rose to prominence as a marketer for Chevys, which hit gold by trademarking the descriptor “Fresh Mex” as part of its name. Clearly it was a brand where marketing influenced the whole system, a point verified during the People Report conference by Mike Hislop, Chevys’ former CEO. Now the CEO of Il Fornaio, Hislop revealed that he only took the top job at Chevys after securing a guarantee that marketing would be interwoven into his corner-office strategy, which had been forged by his first-hand experiences in operations. With the marketing department elevated to that role, is there any doubt that MacDiarmid was involved in a lot more than crafting ad strategies?

On Tuesday, he was named president and COO of the 82-unit Black Angus steakhouse chain.

I don’t know Tim Pulido, the longtime industry veteran who was named Mimi’s new president on Tuesday. Most recently, he was leading the attempt at a comeback by the venerable Shakey’s Pizza chain, and earlier served in an operations role at Pick Up Stix. But perhaps it’s not coincidental that his resume also lists a stint as chief marketing officer of Pizza Hurt.

You can almost see a path worn into the carpet between Marketing and that big office in the corner.

1,000 words on bad service

The editorial staff of Nation's Restaurant News has been guffawing over this since Dallas bureau chief Ron Ruggles passed it along. Apparently it was anonymously e-mailed to him, without any indications if the sender was the restaurateur, the offended customer or just an amused onlooker. In any case, you have to admire the artwork for this piece of feedback.

Anti-theft tactic

How can I put this so I don’t offend?

After enough restaurant visits, even a dim-wit would notice that a place’s hot sellers tend to show up on other menus in nearly an identical form. Clearly all the establishments must’ve been struck with the same inspiration. How else would you explain why one outlet is peddling a Bloomin’ Onion while the joints up and down the street are pushing Awesome Blossoms, Onion Straws, Onion Crunches or an Onion Loaf? It’s the darnedest thing.

That’s why you have to appreciate Vicorp’s forthrightness in touting the new limited-time offers for its Village Inn and Bakers Square family-dining chains. The showcased items, it readily acknowledges, are the specialties of other restaurants. There’s the stuffed French toast from Maine’s Maples Inn and the steak dishes from Texas’ Perini Ranch Steakhouse, with other restaurants’ signatures to follow.

There’s no coyness to the effort. “We hope the association with unique, high-quality, award-wining recipes will help create a powerful new reason for guests to try our food, and to set us apart as highly innovative,” said chief executive Ken Keymer.

Presumably it’s kicking back some coin to the restaurants for the use of their dishes, a rare dash of legitimacy in an industry with more thieves than a medium-security prison.

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.

Foul pitch

I wish I’d been at Fenway Park last night, an admission that’s not easy for a Yankee fan to spit out. But at least I could’ve watched the game without having to retch through the worst baseball sell-out since the Black Sox Scandal of 1919. If you caught Taco Bell’s painfully strained promotion during Fox’s broadcast of the game, you’ll sympathize completely. Normally I’d rather tongue-kiss David Ortiz than set foot in a gloating Red Sox Nation during a World Series. But I’ll take Schilling over that sort of shilling any day of the baseball calendar.

Here’s what happened: With the Red Sox ahead by just one run, the heart of the Rockies’ lineup was coming up to bat. At that very moment, Fox commentator Joe Buck alerted us that we were going to hear an earlier-recorded snippet of conversation from a mic’d-up Royce Clayton, a second-string shortstop for the BoSox. For the benefit of the non-baseball fans among you: That’d be like “60 Minutes” interrupting an interview with Osama Bin Laden to cover a cat stuck in a tree.

“Hey, you like Taco Bell?,” Clayton asked Red Sox rookie Jacoby Ellsbury, who looked about as engaged as a 4-year-old in church. Clayton proceeded to explain that Taco Bell would give free tacos “to every person in the country” if a player on either team stole a base that night. “America’s depending on you,” he informed his young teammate.

Cut back to Buck, narrating a clip of Ellsbury stealing a base earlier in the game. Buck, one of the most respected commentators in sports, then informed the audience that the free tacos would be available next Tuesday between 2 and 5.

Say it ain’t so, Joe.

And tell us you’re not going to play along any further than that.

But he does. Matt Holliday, the Rockies’ best hitter, rips a single to set up a possible rally for the Rocks. Now Buck segues us to in-the-stands commentator Chris Myers, who’s sitting with Taco Bell chief operating officer Rob Savage. Myers articulates THE question on the minds of baseball fans at that moment: How can Taco Bell afford to give everyone in America a taco, when that has to cost millions?

“It’s all for our customers,” for whom every taco will be “made fresh for you,” Savage somberly replies.

Myers then presents Savage with a takeout container of (presumably New England) chowder inside a Taco Bell bag, and scars young baseball fans forever by closing with, “We’re thinking outside the bun.”

Buck, having found his conscience again, offers an obviously sarcastic, “Chris, great work.” At which point booth mate Tim McCarver burst out laughing. “From Schilling to shilling,” he quips, and both broadcasters resume calling a game then being pitched by Red Sox legend Curt Schilling.

It’s essential that restaurant marketers find new ways of reaching an audience that’s drifting away from traditional media. But the goal is to engage that hipper, more irreverent crowd, not to alienate it with a heavy-handed plug of that sort. Even co-conspirators like Buck and Myers seemed embarrassed to be associated with something that clunky. Used-car salesmen were probably cringing.

On Thursday afternoon, Applebee’s announced that it had chosen an apple as its new pitchwoman. A few hours later, Taco Bell and Fox reached for a lemon.

Would Wendy's take a check?

I’m thinking of bidding $4 billion for Wendy’s, but why make Nelson Peltz any richer? The worth of his stake in the company may already be bobbing higher because of speculation he’ll offer $3.2 billion—speculation some say he’s conjured with all the high-profile yelping about his treatment as a potential buyer.

After all, several of the other identified suitors have insisted the company’s not worth that much. Through his various companies, Peltz controls about 9 million Wendy’s shares. If he can bluff another bidder into raising its offer by even a few dollars per share, he’ll be in Frosties for life. And if he scares them away with his posturing, he could swoop in with a low-ball deal and bag the company with the M&A equivalent of an order off the Super Value menu. This is why I’m slaving away at a keyboard and he could pay the King to cut his lawn, with Mayor McCheese handling the edger.

So why not have my 15 minutes of fame and talk up a plan to bid $4 billion? As more and more observers are suggesting, my contemplated offer may be just as real as Peltz’s.

I’d call and check that with him but—well, you know. I’d have an easier time dragging the Pope out for some foosball.

Maybe Bobby Bacala would do

Wendy’s best hope may not be Nelson Peltz, Bill Foley or a nameless twentsomething in a pigtailed wig. If the company wants to avoid a pitched two-front war with investors and franchisees, the person it really needs is Paulie Walnuts.

As any Sopranos fan knows, Paulie has his issues, like occasionally beating people into hamburger. But he was also the go-between when warring parties wanted a sit-down. Too bad the folks at Wendy’s apparently weren’t HBO subscribers, because they’ve been focused on sending messages instead of sharing some grappa in the backroom of the Badda Bing. Franchisees are clearly squaring off with the home office, if they’re not looking to buy the company and impose their own strategy. And how’s Wendy’s coping? By sending letters, like the feel-good click here it dispatched to licensees and employees yesterday.

In fairness, it should be noted that headquarters has instituted monthly webcasts with franchisees and employees to keep the whole system apprised of chain activities. CEO Kerrii Anderson also indicated in her letter that enhancements have been made to WeNet, presumably the chain’s intranet.

But neither of those media is face-to-face. Indeed, they tend to be used for one-sided disseminations than a true give-and-take.

What seems to be needed is a war council, where the parties can sit down and work out their differences in the spirit of Dave Thomas. Instead, franchisees and the home office have been using postmen as their proxies, sending letters back and forth. A dozen licensees sent a scathing one to Wendy’s home camp a few months ago, blasting management for lowering the value of their business. The executives denied it, and followed up with yesterday’s assertion that the turnaround is going well.

Does this sound like a system that’s talking?

In her letter, Anderson also noted that meetings were held in August with franchisees specifically to discuss plans for 2008. Why, then, was yesterday’s communication even necessary? Might it have been more of a defense than an explanation of what the home office has chosen to do?

Interestingly, in ticking off Wendy’s achievements during the last year, Anderson cites “enhanced communications” as an accomplishment on par with improving operations or bolstering sales and profits. Clearly the management team felt the need for an upgrade. You have to wonder if executives and franchisees still do, and if both sides are doing their part to ease tensions through conversation.

“We’ve made significant progress in the last 12 months,” Anderson told franchisees and employees. But “we have so much more to accomplish.”

Perhaps maintaining peace with franchisees through a true disarmament sit-down should be item No. 11 on her to-do list. With that problem allayed, the whole system could address the larger issue of bolstering finances, which might even make Nelson Peltz smile.

A second opinion on doctors' meals

It’s the industry’s equivalent of a tooth fairy with nothing smaller than a ten, an upgrade to first class on a trans-Atlantic flight, maybe even a snow day. If ever there was a sweet treat for the restaurant business, it had to be the free spending of pharmaceutical companies that believe the way to a doctor’s ears is through the stomach. Drug sales reps know their ticket into a physician’s office is a free breakfast or lunch personally delivered to the staff. That’s why some restaurant chains have organized sales squads specifically to sell their catering or function services to pharma field teams. Is there any doubt they’ll be sobbing louder than most when regulators try to take that boon away?

They’ve already succeeded in Minnesota. Lawmakers there have prohibited drug salespeople from giving a doctor more than $50 worth of food per year. That translates into a catered lunch from Panera Bread about every August.

Worst of all for the restaurant industry, the two-year-old curb has demonstrated that doctors are far more reluctant to open the door for an empty-handed pharma rep. Research suggests that the turn-away rate for pitchmen in Minnesota is double the decline in visits for counterparts in the other 49 states. And that’s exactly what proponents of the restrictions want to see. They believe the wooing prompts doctors to prescribe medicine that isn’t necessary or costs more than suitable alternatives. They want the reps to stop courting doctors in any fashion. And free food seems to be the equivalent of roses and jewelry.

No wonder a push for restrictions is arising in other states, according to a recent article in The New York Times. New Jersey formed a task force last month specifically to consider a measure similar to Minnesota’s, according to the article. It suggested that other states may be interested as well, but did not name them.

If the restrictions were to spread, chains ranging from Outback Steakhouse to Au Bon Pain could feel the pain. It’s a shame that such a lucrative source of business could be closed off at a time when the mainstream market is clearly in need of some strong medicine.

The Big Cheese?

A new title was bestowed on the grand metropolis of New York last week, in part because of its sizeable restaurant industry: City Most Likely to be Infested with Rats (Fall Season). And, no, the news didn’t come from the Big Apple Chamber of Commerce.

The distinction was pinned to the broad chest of America’s cultural and commercial titan by two figures who are acclaimed for their knowledge of rodents, Dale Kaukeinen and Bruce Colvin. The pair studied data from the 2000 U.S. Census to determine what makes a city attractive to rats. Among the factors they identified was the resurgence of cities as residential areas and a resulting gentrification, which in turn have bolstered urban areas’ service and entertainment offerings. “This trend is proving to be an ideal environment for rodents due to the density of people and the abundance of food waste from residents, businesses and local eateries,” according to a statement on Kaukeinen and Colvin’s research, which was sponsored by a “rodenticide” supplier.

Among the other contributors they identified are “wacky weather,” defined as unseasonably warm and wet, and an end to the $12 million to $15 million in subsidies the federal government once passed along annually to communities for the fight against rodents.

Wielding the criteria they’d developed, the duo then ranked cities by their expected hospitability to rats this fall. New York topped the listing, followed by Houston, Boston, Louisville and Philadelphia. Among the surprises on the roster were El Paso, Texas, at No. 9 and San Jose, Calif., at No. 19.

Kaukeinen and Colvin suggested that fall is typically the height of the rodent tourism season for many U.S. cities. “As the weather cools,” the statement explains, “rats and mice move inside in search of food and shelter.” It’s when infestations are most likely to occur and “rodents reach their annual abundance,” it noted.

Our beloved Yankees may have been eliminated from the playoffs this fall. But let Cleveland try to touch us in the rat rankings. No wonder pitcher-attacking bugs seem to be its signature pest.

It could have been you

Last Thursday afternoon, just after the lunch rush, a former staffer of a Moe’s Southwest Grill in Dilworth, N.C. decided to surprise his one-time colleagues. He walked into the burrito restaurant, pulled a gun, and shot operating partner Vinny Ferens and assistant manager Jeff Mahar. The police grabbed the 28-year-old gunman and learned he came to shoot up the unit, not to rob it. He’d been canned a few weeks earlier and had come back to exact revenge.

He succeeded in his quest; Ferens, 36, and Mahar, 34, both died from their injuries. The elder of the two left behind three children, ranging in age from eight years to six months. Mahar’s familial situation was not disclosed. He’d joined the crew just two months ago.

That account of the tragedy was provided to the media by Moe’s franchisor, Atlanta-based Focus Brands. Those of us with ink in our veins usually have to wheedle, cajole or feign a last request to get information from an organization that’s suffering through a nightmare of that magnitude. If the moon and stars are aligned, you might get the sparest of details. Focus is publicizing everything about the incident except the name of the employee-turned-accused-shooter (local news and police reports identified him as Derrick Lamont Gregory).

The reason for the company’s forthrightness is clear and commendable. It wants the industry to know what happened to two of its own because the pair’s successors may need help. Left unsaid is the trade’s willingness to aid the families within its ranks, regardless of whether they’re strangers or even affiliated with competitors. It’s something unique about the business that people in other fields probably can’t fathom. If you doubt it, ask someone in the grocery business if they’d ever help a counterpart limping through a crisis. They’ll probably take a swing at you.

Focus wants the business to know that it’s set up a fund to help the families of Ferens and Mahar with burial fees and other expenses. Contributions can be sent to the Moe’s Victims Memorial Fund, Wachovia Bank, 171 17 St., Mail Code GA4517, Atlanta, Ga. 30363.

Already, Moe’s management said in a statement, “the outpouring of sympathy and support that our customers have shown for these victims has been incredible.”

Hopefully Feren and Mahar’s professional peers will be even more generous.

Speaking of immigration

One of the highlights of last week’s Multi-Unit Foodservice Operators conference was a panel discussion of the nation’s immigration problem and what should be done about it. Discussion, debate, argument—why get hung up on semantics?

And yet semantics, as the panelists noted, is often what keeps tempers burning when the topic arises in any public forum. As National Restaurant Association chairman Dick Rivera observed, a hardliner on the panel referred to “legal immigrants” but “illegal aliens.” Clearly “aliens” is a more pejorative and loaded word, applied more often to mutant invaders from space than foreign students who over-stay their visas.

Rivera was brilliant in arguing for a moderate approach to resolving the issue of illegal immigration. And, perhaps not surprisingly, he suggested the process begin with the adoption of a new glossary. A key point of contention is whether the 12 million illegal aliens estimated to be in the country right now should be forced back to their countries of origin before they can begin to seek legal residence within the United States. To do otherwise, conservatives argue, would be granting amnesty to obvious lawbreakers.

“I prefer the term ‘plea bargain,’” said Rivera. The illegals should have to pay taxes and perhaps fees or fines, rather than get away scot-free, he explained. But they should also be allowed to stay, which he defined as “being on parole.” As long as their behavior remains lawful, why not let them continue to work and live here while they seek legal residence?

It was a dash of reason and level-headedness, elements that sorely seem to be missing from the discussion of immigration, if you can even call that screaming match a discussion.

One other interesting tidbit that emerged during the panel: One expert noted that about 7 million of the nation’s estimated 12 million illegal immigrants are currently working. The restaurant industry has estimated that it alone employs about 1.4 million of that illegal workforce, or 20 percent of the tally.

Clearly the “problem,” to use another loaded word, is a major one for the trade. It’s fortunate that Rivera has suggested a vocabulary that will serve the business well in its attempt to foster an actual discussion on immigration. And, thanks to that presentation at MUFSO, it’s a give-and-take that shouldn’t be alien to the trade.

MUFSO outtakes

I’m starting a relief fund for my colleague Lisa Jennings, who could be institutionalized by the assignment of crafting an overview story on Nation’s Restaurant News’ Multi-Unit Foodservice Operators conference. The meeting, held earlier this week in Los Angeles, crammed an MBA course on industry issues and trends into three days, with any downtime devoted to networking and sampling the latest in adult beverages. Lisa has the task of capturing that kaleidoscopic experience in a snapshot. You can only hope the food is decent at wherever she’s committed.

Fortunately for the other residents of Harmony Home, the show provided several moments that will serve Lisa well during Story Night. Here are a few of the lines from MUFSO that probably won’t figure into her article (which, by the way, is scheduled to appear in the Oct. 15 issue of NRN).

“Within an hour, you’ll be depressed.” — Rick Berman, before beginning his one-hour presentation, presumably referring to the content of “Labor Costs: The Rising Cost of Employment.”

“How many of you thought Jack was really the CEO?” – Linda Lang, chairman and CEO of Jack in the Box, as she took the podium to accept her Golden Chain award. Earlier, Lang had revealed that Jack, the orb-headed mascot who’s cast as the chain’s chairman and chief executive in commercials, is always portrayed by the same person rather than a succession of actors. Lang wouldn’t say who that thespian was, explaining, “if I told you, then I’d have to kill you.”

“My new dream is to be Julia Stewart.” – Nick Vojnovic, president of Beef ‘O’ Brady’s, after confessing that his mother’s dream for him and his brother will never be realized. Coming from a restaurant background, she had insisted that her children not go into the business. Nick’s two brothers are also high-level foodservice-company executives. He didn’t explain his infatuation with Stewart, the CEO of IHOP and architect of the company’s pending purchase of Applebee’s.

“I’m up here for being alive today.” – James Maynard, co-founder and chairman of Golden Corral, joking about his choice as the 2007 winner of the Pioneer Award, an honor previously bestowed on the likes of Col. Sanders and Norman Brinker. Later, while actually accepting the award, Maynard quipped through tears that winning the honor wasn’t a bad achievement for a 50-year-old. He founded Golden Corral almost 35 years ago.

“They’ll be out of there faster than Ted Kennedy at an O’Doul’s kegger.” – Jim Sullivan, forecasting how youngsters steeped in present-day multi media will react to a restaurant trainer wielding nothing more high-tech than a flip pad and pointer.

“My father told me, ‘You’ll do well there [in Washington]. You’ve been dodging nuts your whole life.’” – Ex-congressman Leon Panetta, after recounting how his job on the family’s walnut farm was scooping up the nuts after his dad shook the trees to make them drop.