Tuesday, June 28, 2011

Less of a squeeze on happy hours

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

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

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

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

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

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

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

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

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

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

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

Friday, June 24, 2011

The caped designer

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

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

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

Welcome to the age of the caped designer.

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

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

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

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

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

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

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

Thursday, June 23, 2011

Two headlines you didn't see

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

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

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

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

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

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

Wednesday, June 22, 2011

Say wha?

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

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

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

Instead, the restaurant decided to cede the star.

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

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

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

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

Give that man a crown.

Monday, June 13, 2011

Talk about understatement

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

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

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

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

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

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

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

Saturday, June 11, 2011

Some of what I learned at Summer Camp

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thursday, June 9, 2011

Wisdom from an industry guru

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

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

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

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

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

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

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

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

Wednesday, June 8, 2011

On the road at Summer Camp

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

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

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

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

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

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

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

Tuesday, June 7, 2011

Wendy's version of farmers' night

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

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

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

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

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

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

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

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

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

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

Sunday, June 5, 2011

A first restaurants would prefer not to see

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

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

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

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

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

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

The state hosts about 600 restaurants who employ about 145,000 people, according to the CRA.

The legislation is almost certain to be signed into law by Gov. Dannel Malloy, who pledged to support paid sick leave during his campaign for the job.