I’m sure the Vegas odds-makers are already taking action on who'll be the next owner of Carl’s Jr. and Hardee’s, the two main brands in the portfolio of CKE Restaurants. Thomas H. Lee is the favorite, with a deal already on the table to buy it for about $928 million, including debt. Then came word yesterday that Nelson Peltz, the bwana who deftly bagged Wendy’s in 2008, was giving CKE’s slightly bald radials a kick.
They may be the most likely buyers. I keep thinking about who might be the most appropriate buyer, from the standpoint of all parties concerned.It makes me wonder if the big casual-dining companies have the Poppers to reconsider their longstanding pledge never to veer out of that market.
It’s almost a reflex with concerns like Darden, Brinker and OSI (the parents of Red Lobster, Chili’s and Outback Steakhouse, respectively). Ask what new businesses might be a worthwhile acquisition or start-up and they’ll invariably conclude with, “…and of course it’d have to be something in casual dining, since that's where we want to stay.”
Meanwhile, they’re having their turnips mashed by quick-service and fast-casual concepts.
They should consider the bold move of buying a quick-service brand and supercharging it with their casual know-how to create the ultimate fast-casual player—a contender genetically engineered to provide cloth-napkin-caliber service and food, with the value, speed and less-processed foods that have established concepts like Panera and Chipotle as the brands of choice among younger consumers. It’d be the veritable Mike Tyson of the sector.
Carl’s would be the perfect subject for the experiment. It’s been trash-talking for years that it offers a burger comparable to what patrons would find in a casual restaurant, for less than two-thirds of the price. To launch the Six Dollar Burger (it actually sells for under $4), the chain even set up a fake restaurant where patrons were charged $6 for the sandwich. Patrons paid without complaint.
Sure, the acquisition would put those casual-dining giants squarely in franchising, a realm where they’ve at most dabbled before, preferring to grow through corporate development and joint ventures. But their current business models aren’t exactly the envy of the business world. Becoming full-fledged franchisors would really open the valve on cash flow.
Meanwhile, the Carl’s and Hardee’s systems would greatly benefit from the training, research and awesome support services provided by the likes of Darden and Brinker.
It’s a deal casual-dining hunter and quick-service should pursue, especially when you consider that CKE might change hands for just over $1 billion. It’s a buyer’s market, to be sure.
Showing posts with label Darden. Show all posts
Showing posts with label Darden. Show all posts
Friday, March 12, 2010
Wednesday, June 10, 2009
Restaurants welcome a new menu labeling plan
Capitol Hill lawmakers have cleared the way for national menu disclosure standards by combining the pet bills of opposing sides into a new proposal that appears acceptable to all parties, including the restaurant chains that would have to abide by the law.
The compromise measure, jointly announced by the major stakeholders this afternoon, would mesh a labeling bill steadfastly opposed by the industry, Sen. Tom Harkin's Menu Education and Labeling Act (a.k.a. MEAL), with an alternative that was put forth last year by the restaurant business and its allies on the Hill, the Labeling Education and Nutrition Act (LEAN in sound bites). The breakthrough was acceptance by all parties of limiting the info disclosed on menus and menu boards to calorie counts. The other information that Harkin and his allies want chains to provide, like salt and fat content, would be provided in written forms available at the point of purchase.
The requirement would be binding on outlets of chains with at least 20 branches.
Sen. Tom Carper said the new measure, which has yet to be given a clever acronym as a name, has bipartisan support. Carper was a key sponsor of the LEAN Act, which the National Restaurant Association and other industry groups helped to craft.
The compromise bill is expected to be a component of any healthcare reform legislation that arises in the Senate in the next few weeks. The passage of such an omnibus measure would be an historic event, which suggests it will likely be hotly debated and undergo considerable consideration before anything is actually put on the books.
But the emergence of a bill less stringent than MEAL was hailed by the restaurant industry as a breakthrough. "We are pleased that industry, government and the public health community were able to come together and partner to reach a workable solution to this important issue," Clarence Otis, CEO of Red Lobster and Olive Garden parent Darden Restaurants Inc., said in a statement.
“We thank the Senators for their bipartisan leadership and for recognizing the importance of legislation that meets the needs of both the restaurant industry and our customers," Dawn Sweeney, CEO of the National Restaurant Association, said in her statement. "We look forward to working with Congress to enact this legislation."
Initial reports failed to reveal when the new labeling bill would take effect if passed, or what protections it would extend to chains that worry about legal challenges of the calorie counts they might post. Because food items can vary in size or even sugar content, a precise analysis might be impossible to deliver, they contend. They fear that consumers will allege in court that they were misled by the information provided.
The compromise measure, jointly announced by the major stakeholders this afternoon, would mesh a labeling bill steadfastly opposed by the industry, Sen. Tom Harkin's Menu Education and Labeling Act (a.k.a. MEAL), with an alternative that was put forth last year by the restaurant business and its allies on the Hill, the Labeling Education and Nutrition Act (LEAN in sound bites). The breakthrough was acceptance by all parties of limiting the info disclosed on menus and menu boards to calorie counts. The other information that Harkin and his allies want chains to provide, like salt and fat content, would be provided in written forms available at the point of purchase.
The requirement would be binding on outlets of chains with at least 20 branches.
Sen. Tom Carper said the new measure, which has yet to be given a clever acronym as a name, has bipartisan support. Carper was a key sponsor of the LEAN Act, which the National Restaurant Association and other industry groups helped to craft.
The compromise bill is expected to be a component of any healthcare reform legislation that arises in the Senate in the next few weeks. The passage of such an omnibus measure would be an historic event, which suggests it will likely be hotly debated and undergo considerable consideration before anything is actually put on the books.
But the emergence of a bill less stringent than MEAL was hailed by the restaurant industry as a breakthrough. "We are pleased that industry, government and the public health community were able to come together and partner to reach a workable solution to this important issue," Clarence Otis, CEO of Red Lobster and Olive Garden parent Darden Restaurants Inc., said in a statement.
“We thank the Senators for their bipartisan leadership and for recognizing the importance of legislation that meets the needs of both the restaurant industry and our customers," Dawn Sweeney, CEO of the National Restaurant Association, said in her statement. "We look forward to working with Congress to enact this legislation."
Initial reports failed to reveal when the new labeling bill would take effect if passed, or what protections it would extend to chains that worry about legal challenges of the calorie counts they might post. Because food items can vary in size or even sugar content, a precise analysis might be impossible to deliver, they contend. They fear that consumers will allege in court that they were misled by the information provided.
Wednesday, January 21, 2009
Splash fight!!!
After rankling Red Lobster by telling its patrons they’re wasting money, the Captain D’s fast-food chain is kicking more sand in the full-service giant’s face. It announced today that it’s defying a cease and desist letter issued by the larger chain’s parent, the mega-sized Darden Restaurants Inc., to halt a commercial that enlists Red Lobster customers in a slam of the brand’s higher prices.
Captain D’s even set up a website, http://www.irefusetoceaseanddesist.com, to rub it in—and ride whatever publicity it can generate with the David-versus-Goliath ploy. The webpage promises a “I refuse to cease and desist” T-shirt to the first 1,000 visitors who register their sympathies with Captain D’s.
“All we wanted to do was show that you could get delicious sit-down quality seafood at a much lower price,” says the star of a video on the site. The spokesman then rips up a copy of the letter. Throughout the video, he’s standing in front of a Red Lobster.
The crux of the dispute is a commercial where the same Captain D’s spokesman intercepts people as they come out of a Red Lobster. He invites them to a nearby screened-off area where they’re shown what they could’ve gotten at Captain D’s for what they just paid at Red Lobster. The people are invited to taste the platters spread before them. “That’s the same thing we just ate,” said one of the Red Lobster customers, pointing to the unit behind him.
Captain D’s doesn’t mention that it refused to participate in a review of the commercial by the National Advertising Division of the Better Business Bureau, a step requested on the basis of Darden’s objections. The full-service giant pointed out to NAD that the spot cites what the patrons paid in total at the Red Lobster, including taxes, beverages and tips. Those additional charges aren’t factored into what Captain D’s asserts the Red Lobster customers could’ve gotten at the quick-service chain for the same tab.
The NAD reportedly referred the matter late last year to the Federal Trade Commission.
Captain D’s is a holding of Sagittarius Brands, which also owns Del Taco.
Captain D’s even set up a website, http://www.irefusetoceaseanddesist.com, to rub it in—and ride whatever publicity it can generate with the David-versus-Goliath ploy. The webpage promises a “I refuse to cease and desist” T-shirt to the first 1,000 visitors who register their sympathies with Captain D’s.
“All we wanted to do was show that you could get delicious sit-down quality seafood at a much lower price,” says the star of a video on the site. The spokesman then rips up a copy of the letter. Throughout the video, he’s standing in front of a Red Lobster.
The crux of the dispute is a commercial where the same Captain D’s spokesman intercepts people as they come out of a Red Lobster. He invites them to a nearby screened-off area where they’re shown what they could’ve gotten at Captain D’s for what they just paid at Red Lobster. The people are invited to taste the platters spread before them. “That’s the same thing we just ate,” said one of the Red Lobster customers, pointing to the unit behind him.
Captain D’s doesn’t mention that it refused to participate in a review of the commercial by the National Advertising Division of the Better Business Bureau, a step requested on the basis of Darden’s objections. The full-service giant pointed out to NAD that the spot cites what the patrons paid in total at the Red Lobster, including taxes, beverages and tips. Those additional charges aren’t factored into what Captain D’s asserts the Red Lobster customers could’ve gotten at the quick-service chain for the same tab.
The NAD reportedly referred the matter late last year to the Federal Trade Commission.
Captain D’s is a holding of Sagittarius Brands, which also owns Del Taco.
Sunday, December 21, 2008
Take that, Outback
The LongHorn steakhouse chain is responding to Outback’s head-turner of a $9.99 sirloin dinner with a new steak bargain of its own. Executives of parent company Darden Restaurants said Friday that the chain is about to start pushing “a new signature steak dish” priced at under $10.
The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.
Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.
LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.
The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.
The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.
Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.
LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.
The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.
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