More flamebroiling tempers at BK?

A financial analyst may have inadvertently fanned the broiler flames at Burger King, where franchisees have squared off with the home office over the deeply discounted Double Cheeseburger.

The Wall Street Journal reported online this afternoon that Morgan Stanley had advised investors to reconsider their positions in McDonald’s because the burger giant is being sapped by competitors’ discounts. BK’s $1 Double Cheeseburger was specifically cited by the brokerage, where analyst John Glass handicaps the restaurant sector.

If investors pull their money out of McDonald’s because it’s being hurt by Burger King, is it such a leap to assume some will shift it over to Burger King Holdings, the keeper of BK’s castle?

In other words, the Double Cheeseburger appears to be helping the franchisor’s stock price. And that’s going to go down like three-week-old Onion Rings with franchisees.

They’ve argued that the quarter-pound Double Cheeseburger is boosting traffic and sales, the base for the home office’s revenues and profits, at the expense of unit-level profits. In filing a lawsuit a few weeks ago to halt the head-turning offer, an association of franchisees alleged they’re losing a dime on every Double they sell for a buck.

Now comes word that the deal is not only helping BK Holding’s revenues, but also boosting its stock valuation.

If you should see a torch-toting mob of BK franchisees outside the chain’s Miami headquarters, you’d best run for cover. It could get ugly.

My crystal ball has some static

Call me old-fashioned, but there’s something perverse about running Christmas commercials during World Series broadcasts. Marketers are so determined to get a jump on the all-important sales season that we can only hope they’re flogging gift ideas for this year’s holidays, not 2010’s.

It shouldn’t be a surprise, then, that the year-end prognosticators are breaking out the tea leaves and animal entrails a bit earlier this year. It’s only Dec. 1, but at least seven lists of next year’s restaurant trends have already been divined and released by wise seers.

They vary greatly, to a degree I intend to explore here when the forecast tally climbs to 10, or probably sometime tomorrow morning. But suffice it to say we’re heading into a year where restaurants will simplify their menus, use more animal innards, and hawk fried chicken the way they ballyhooed sliders in 2009. Yes, fried chicken is widely expected to be the next pork belly, or the new bacon, depending on which forecast you read.

What surprises me on first flush is how few noted the two trends that will certainly be on my predictions list, which is on the to-do list right after “Finish leftover cranberry sauce.” Perhaps that’s because they’re not really great leaps from what was happening in ’09.

Chefs and restaurants at all price levels will continue to showcase burgers, to be sure. But, as a colleague from Restuarants & Institutions noted in a recent Twitter posting, tacos are replacing burgers as the low cost/high flavor item that’s being taken up by fine-dining chefs. Rick Bayless is featuring them at Xoco, Paul Kahan is showcasing his riff at Big Star, and today brought news that Traci Des Jardins will extend her early lead in the taqueria wave by opening a second Mijita in San Francisco.

The other prediction is more of a stretch, though there is some evidence to support my supposition. I think we’re going to see the opening next year of what, for lack of a better term, I’m calling whim restaurants—places were chefs can forego a set menu and instead indulge their creativity with whatever’s seasonably available and they feel like cooking. It’s sort of like being invited over to their home for dinner.

It’s exactly what Thomas Keller is doing to great effect at his Ad Hoc in the Napa Valley, or close to what Tom Colicchio has attempted with Tom: Tuesday Dinner, one of the more creative responses we saw last year to the economic freefall. When private-room bookings tanked at Colicchio’s Craft in New York City, the chef turned one of his function spaces in a restaurant-within-a-restaurant twice a month that he called Tom: Tuesday Dinner. The hook was that he’d plan the dinner and cook it himself while you watched, just as you might at the home of a friend. Except in considerably posh surroundings, with a polished staff waiting on you.

Tom: Tuesday Dinner was only open on two non-successive Tuesdays per month. Today Colicchio told Eater NY that he plans to open a restaurant next year that will use the same approach as the limited-time Tom: Tuesday. He suggested that the menu might not change nightly, a result of what he learned with Tuesday Dinner. He explained to Eater that he and his staff needed some time to master each dinner roster. Yet it was all for naught because then the menu would change. So they decided to stay with a menu for at least two successive Tuesday sessions, he recounted.

It remains to be seen if other chefs follow those two kitchen gods in developing concepts where they can indulge their creativity as the spirit moves them.

Fortunately, with probably a few dozen more forecasts to go, we may get an indication as to whether it will happen in 2010.

When to stay home

There are times when a restaurant employee provides the sort of experience you’d only believe if Larry David were on the scene. Witness what happened yesterday to my wife when she stopped at a Moe’s Southwest Grill to grab a quick dinner for us:

Wife, joshingly: “Hey, you forgot to say ‘Welcome to Moe’s!’”

Counter employee: “My mother just died so I really don’t have it in me. So, (very sprightly) what’ll you have?”

Real solutions from a virtual thinktank?

Sorry to interrupt your Tetris game, but there’s a new capability to this internet thing that may be sweeter than setting High Score for the 24th time. It’s aimed at business people who have a strategic quandary but lack the resources to get the usual sort of outside help. Instead of hiring one brain, they can now dangle a relatively modest reward to a whole study hall of thinkers.

There’s also a groupthink aspect to the process. If you’re the one with the problem, you “sponsor” it by offering a reward of as little of $50 for every “insight” that’s provided by a rank-and-file member of Insight Community. The sponsor posts the question, and Community members offer their suggestions or comments. Any that’s deemed an insight nets its author the bounty, which can range as high as your budget allows (most seem to range from $100 to $500).

But that’s not all the intelligence you get for your reward money. The insight is posted, and Community members offer their comments on that would-be solution. The feedback is intended to hone the suggestion into a more workable or effective remedy for the sponsor. Some note that the insights will be re-posted on internal or customer-focused sites as blog entries to spur further discussion and elicit more feedback.

Some sponsors ask for ideas as specific as what webinars they should produce to promote their businesses. One even posted a video and asked for comments. Another asked for specific examples of small businesses that have improved their service by boosting staff morale.

Others sought opinions and insights on big-picture issues, like how to protect a spirit of innovation, or what to do now to prepare for better economic times.

The “problem” posters included such big names as American Express, Dell and H-P. But mixed in were a number of what appeared to be smaller, entrepreneurial ventures, as well as a few advocacy groups.

In essence, this new community is setting up a standing thinktank/focus group to help businesses tap other perspectives and outside ideas. To become part of that commenting group, you have to register, so there is some control on who’s posting. But the endeavor seems to be self-policing; who’s going to bother to read a post and draft a comment if the topic isn’t a familiar one, if not an area of interest or expertise?

Full disclosure: I am one of those who registered. I’ve not yet posted a possible insight or solution, though I do plan to participate.

But I’m bringing the site to the restaurant industry’s attention because it appears to be a low-cost tool that few have yet discovered.

I’ll let you know my experiences as I get more involved. And if you learn of any similar groupthink sites, please drop me a line and let me know about them. We may be seeing the unfolding of a new business dynamic for the web.

McDonald's update

Right before I left McDonald's new European-styled prototype (see below), I had a chance to see how closely the higher-ups are monitoring what amounts to a test of the new design. A manager came over with a corporate type (dressed in a suit, with a little stylized "M" pins on his lapel a la the ID for a Secret Service agent) to show him that the booth where I was sitting had a rip in the upholstery already. Sure enough, something had snagged the squared edge of what looked like Naugahyde.

Meanwhile, heading downstairs to look around the main floor some more, I managed to sneak a closer look at the computer terminal that's situated just beyond where the ordering lines form. I could now see that it's a terminal where job aspirants can apply. And as I noted in my earlier post, it was never unoccupied during my visit.

I did overhear some comments about the decor from customers. One didn't like the stick-figure-like drawings that designate which restroom is for males, which for females. The same sort of signage also indicates where to discard your trash. He thought it was too retro for such an upscale interior design.

Interestingly, the twentysomething man and the similarly aged woman accompanying him were very gently asked to leave when it became apparent they were doing nothing but using the bathroom and sitting on some stools, planning the rest of their day.

I was able to get closer to the flat screen TVs on the wall and confirmed that you can only see them, not hear them. So what's the point of offering broadcasts of shows? They'd be better off airing short pieces with purely visual appeal.

One of the other attractions of the restaurant was its free WiFi service. You're connected to a McDonald's-branded network that features links to the chain's corporate social responsibility report, among other pieces of information.

Inside McDonald's new design

I'm sitting in McDonald's new prototype restaurant in the Chelsea section of New York City, watching the arriving guests do a double take. This is the first U.S. outlet of the chain to get the new look, which has apparently been greenlighted already in Europe.

It's so different that it's eliciting a lot of pointing and head nodding as patrons comprehend the changes. But the points of departure actually started outside, with a banner that could be the biggest sacrilege of all to hardcore Mickie D's fans. The flag sports--brace yourself--a new color scheme for the logo.

The Arch in the design is still golden. But it's on a black background, with a bar of red underneath. For traditionalists, this is jarring stuff.

Inside, the most noticeable switch from a conventional store has to be the seating. It's actually padded.

I'll let that sink in for a moment.

No more rock-hard molded plastic. Now the booths have upholstery both on the seat and the back uprights. Stools at the long common tables are also padded.

The lighting is far more muted, a pleasant break from the operating-room brightness of conventional units. And the colors are more Yuppie Modern than the brash, almost cartoonish colors of older stores. Lots of deep oranges, rich greens, and off-whites.

Much has been reported about the incorporation of flat screen monitors throughout the unit. There are at least two in the sizable dining room where I'm sitting, but no one seems to be watching, no doubt because you can't hear them. And one's a mere table away from me.

If the more-comfortable seats and more inviting color pattern are intended to foster more hanging out, the new look is an obvious success. A number of youngsters, apparently from a nearby high school, have parked themselves behind beverages of one sort of another (lots of lattes and sodas). There's a lot of conversation going on, as well as considerable munching and sipping.

There's a computer screen downstairs that I couldn't get near. I can't tell if it's a computer portal or some type of ordering device.

More on that in a follow up. Now it's time to finish my sugar-free latte and snoop some more.

Raiding retailers for restaurants' new stars

If recent executive changes are a telltale sign, the restaurant industry is losing faith in its ability to revive sales. Companies determined to crack the formula have looked past the trade’s own talent bench in recent weeks to fill vacancies with code breakers from the world of retailing.

The new CEO of Outback and Carrabba’s parent company was previously focused on selling perfumes, cosmetics and holiday ornaments. Liz Smith, formerly president of Avon Products, seems an unlikely candidate to head OSI Restaurant Partners, a company long led by men who’d worked their way up from restaurant-level jobs. But OSI noted that Smith had experience in running a highly efficient company. They didn’t have to explain that Avon, almost purely a sales company, is light on payroll and structure, heavy on incentive-based performance.

Officials also mentioned that Smith had to keep Avon in touch with customer preferences if its product line was to stay relevant, a skill some say has languished inside OSI’s headquarters in recent years.

A talent for embellishing a brand was similarly one of the characteristics cited by Dunkin’ Brands in explaining why it’d reached outside the industry for its new “chief global customer and marketing officer.” John Costello, a veteran of Home Depot and Sears, “is one of the most talented marketers and brand builders in the retail industry in America," crowed Nigel Travis, CEO of the Dunkin’ Donuts and Baskin-Robbins parent. Indeed, Costello is a member of the Retail Advertising Hall of Fame.

The selection underscores that Dunkin’ is less a restaurant than a to-go bakery with extensive food and beverage options. It’s more of a retail storefront than a place where you’d go for dinner, or at least at present.

Even less of a disconnect is the promotion of supermarket vet Susan Shields to chief marketing officer of Jamba Juice, the smoothie chain. A key component of Jamba’s comeback plan is putting its name on more retail products through licensing deals. Those Jamba-branded items already range from a toy blender to a new line of trail mix that’s about to hit stores. Who better to blaze that new revenue channel than someone who worked at the Safeway grocer chain?

At the same time, dollars are dollars and finance is finance. So why not go outside the industry for your next chief financial officer, as McCormick & Schmick’s did in hiring Michelle Lantow? But it’s no coincidence, the upscale seafood chain said, that she came from a retail apparel manufacturer, Lucy Activewear.

Lantow was instrumental in revamping Lucy’s e-commerce operations and plotting its move into brick-and-mortar retail locations, the company noted in announcing her appointment. CEO Bill Freeman observed that those qualifications should serve M&S well as “we continue to focus on greater connectivity with our guests.”

One of those efforts, apparently, was the chain’s development of a group-sales program aimed at companies that are embarking on a road show to hawk their goods and services. M&S is pitching its banquet service as a one-stop shop that spares those road warriors the hassle of having to scout out a function room and banquet facilities at each stop of their dog-and-pony tours.

There’s no word yet if a retailing veteran was tapped to head it up. But if you hear someone greeting the guests with a “Welcome to McCormick & Schmick’s,” shoot me an e-mail, okay?