Warning: This entry could cause heart palpitations, excessive tsk-tsking, and possible incontinence. Ask your physician if you’re healthy enough to enjoy industry foibles without risk of dangerous guffawing. But if The Big One should hit and people urge you to walk toward the light, would you mind signing a waiver first? The publicity benefits would be really a boon.
Sorry. I’ve just been following the aftermath of what most would call a tragedy at the Heart Attack Grill, the Vegas burger joint that famously challenges customers to risk cardiac arrest by downing a heart-stopping load of cholesterol and calories. On Saturday, in case you haven’t heard, the second customer in two months was waylaid by the over-indulgence. She had to be rushed to the hospital, her condition unclear as of this writing.
So what did the restaurant do? Owner Jon Basso gushed to the Los Angeles Times that a downed customer attests to the Grill's “avant-garde clientele -- thrill seekers, risk takers.”
Oh, what could be better than putting a patron in the ER!
I think he would’ve wept if he could’ve somehow gotten Kim Kardashian involved.
Of course that’s not the only bizarre news to arise in the industry this week.
Consider, for instance, the proposal that was floated in California’s San Bernardino County by Supervisor Neil Derry. Like many areas, the country requires restaurants to post their sanitation scores, a letter grade, in a window so patrons can make an informed dining-out decision. Derry wants the mandate amended so the restaurants would also indicate whether or not they used the federal government’s E-Verify system to weed out job applicants who are in the country illegally. The letter’s color would indicate whether or not the eatery had taken that step to detect illegal aliens.
Less weird but still aha-worthy are the day’s announcements from IHOP and Krispy Kreme. The two indulge specialists are trumpeting the introduction of new treats for their fans. Yet the products—fruit pies for Krispy, and pancake syrups for IHOP—won’t be sold in the restaurants. They’re the latest scuffing of the line between retail and foodservice.
I’ll end by pointing out what I won’t address here, since it seemed to the whole internet seemed to be talking about it last week. Yes, a Burger King customer in Japan ordered a burger topped by more than 1,000 slices of bacon. No need to say more about that.
Except that he should really look into opening an Asian branch of the Heart Attack Café.
Tuesday, April 24, 2012
Tuesday, April 17, 2012
Financing paperwork may kill fewer trees
Restaurant franchisees, rejoice: The task of applying for expansion capital is about to get a lot easier.
Or at least that was the promise aired at the International Franchise Association's Small Business Lending Summit, which is still underway as I write this. The first two hours brought repeated mentions of a possible standardization in the forms restaurants and other small businesses use in making their case to a bank or other lender. Speakers were sketchy on the details, but they spoke of a lending application template that would be accepted as a rule by funding sources--enabling restaurateurs to fill out a single form for multiple lenders, instead of having to plow through a separate stack of paperwork for each.
"This gives you the ability to walk into any bank in the country with a template for lending. This is the one document that everyone can use, at their disposal," said Richard Hunt, president of the Consumer Bankers Association.
Standardized resources are also being sought on the lender side to facilitate the process. "From a lending standpoint, there are a set of tools that are being developed that are coming out in the next 45 days that will change franchise funding," explained Darrell Johnson, president/CEO of the franchising research firm FRANdata.
He explained that the IFA and associated organizations are setting up a way for lenders to get performance data for 3,300-plus franchise brands. If an applicant is seeking funds to open outlets of a particular brand, the bank can see how that concept has fared.
I'll post more details as they're revealed here at the conference.
Or at least that was the promise aired at the International Franchise Association's Small Business Lending Summit, which is still underway as I write this. The first two hours brought repeated mentions of a possible standardization in the forms restaurants and other small businesses use in making their case to a bank or other lender. Speakers were sketchy on the details, but they spoke of a lending application template that would be accepted as a rule by funding sources--enabling restaurateurs to fill out a single form for multiple lenders, instead of having to plow through a separate stack of paperwork for each.
"This gives you the ability to walk into any bank in the country with a template for lending. This is the one document that everyone can use, at their disposal," said Richard Hunt, president of the Consumer Bankers Association.
Standardized resources are also being sought on the lender side to facilitate the process. "From a lending standpoint, there are a set of tools that are being developed that are coming out in the next 45 days that will change franchise funding," explained Darrell Johnson, president/CEO of the franchising research firm FRANdata.
He explained that the IFA and associated organizations are setting up a way for lenders to get performance data for 3,300-plus franchise brands. If an applicant is seeking funds to open outlets of a particular brand, the bank can see how that concept has fared.
I'll post more details as they're revealed here at the conference.
New thinking about role of restaurants
Late on a Wednesday morning, an industry savant treated a roomful of restaurant-chain executives to an explanation of his business philosophy. This is the sort of guy who flies in private jets and has serious need of estate planning, with a $4-billion chain in his charge. Yet here’s the magic Ron Shaich said he’d learned from building Panera Bread: Aim for richer lives and a better society, not bigger profits.
Two weeks later, students at New York’s Institute of Culinary Education were completing their foodservice curriculum with a walk-through of the ventures they hoped to start after graduation. By design, these were formal business plans, presented to a panel of industry vets who gently assessed both the ideas and the appropriateness of the presentation. Of the five students who aired their ideas on the day I served as a greybeard, all but one pledged that their businesses would deliver societal benefits along with dollar-and-cents returns.
A stellar success and a handful of aspirants just starting out: They hail from opposing ends of the experience spectrum, but they share a view of what a restaurant business should be. With that mindset evident at both poles, is there any doubt it’ll seep into the mainstream of the business?
There are ample signs that it’s happening already, as you’ll see in our upcoming issue. And more keep coming. This week, for instance, Chipotle scolded the Food & Drug Administration for its regulatory stance on the use of pesticides on food crops. The one-time McDonald’s holding said point-blank that it wants the agency to take a harder line on processes that boost yields and hence temper food costs. It’s just not good for farm sustainability, the fast-food chain said in a press release.
This is no longer Kumbaya stuff. Chipotle and Panera are big corporations owned by Wall Street. It’s not that they’ve veered left toward the nearest ashram. It’s that a broader, more responsible sensibility is shifting into the business world, restaurants included.
You’ll learn in our May issue about Panera’s embrace of this broader-minded strain of capitalism. But how about the students and their business plans?
Here’s how they’re hoping to meld a social consciousness with an old-fashioned profit motive:
Katy Severson, who drove around the country before culinary school to learn regional cuisines firsthand, wants to open a gastropub, The Mayflower, where she can feature the best of what she sampled. “Food has a history and a soul,” she explains in her business plan. “This philosophy will be reflected in the way The Mayflower operates in every facet: from the way we source our food and how that food is treated before it sits on our plates, to the way we treat our staff, to the way we decorate our restaurants, plate our food, and most importantly treat our customers.”
She’d penciled out a pro-forma P&L that allowed for healthcare coverage for employees. “I have experience with not getting benefits,” she explained to her classmates and the judging panel.
Mitchell Dorsey intends to feature only “responsibly sourced” foods in Burg Inn, the farm-to-fork restaurant he plans to open in East Williamsburg, a gentrifying corner of Brooklyn.
Sergio Gutierrez plans to showcase aspiring local musicians in his La Maja, one of the community ties he’s planning for the Monterey, Mexico, gastropub.
A classmate planning a Brooklyn tapas bar pledged that it would be “not just another business in the area, but also a part of [the] local community and its needs.”
Using local ingredients, previously the flag signaling a socially conscious restaurant, was the rule for all the student presenters, not the exception.
Not surprisingly, before Shaich spoke at our Restaurant Leadership Conference, another presenter was asked about the viability of chains purchasing locally.
The industry has sufficiently tempered its cheap-and-easy sourcing mindset to shift local purchasing into the industry consciousness.
All signs say it’s just the beginning of a change in attitudes.
Two weeks later, students at New York’s Institute of Culinary Education were completing their foodservice curriculum with a walk-through of the ventures they hoped to start after graduation. By design, these were formal business plans, presented to a panel of industry vets who gently assessed both the ideas and the appropriateness of the presentation. Of the five students who aired their ideas on the day I served as a greybeard, all but one pledged that their businesses would deliver societal benefits along with dollar-and-cents returns.
A stellar success and a handful of aspirants just starting out: They hail from opposing ends of the experience spectrum, but they share a view of what a restaurant business should be. With that mindset evident at both poles, is there any doubt it’ll seep into the mainstream of the business?
There are ample signs that it’s happening already, as you’ll see in our upcoming issue. And more keep coming. This week, for instance, Chipotle scolded the Food & Drug Administration for its regulatory stance on the use of pesticides on food crops. The one-time McDonald’s holding said point-blank that it wants the agency to take a harder line on processes that boost yields and hence temper food costs. It’s just not good for farm sustainability, the fast-food chain said in a press release.
This is no longer Kumbaya stuff. Chipotle and Panera are big corporations owned by Wall Street. It’s not that they’ve veered left toward the nearest ashram. It’s that a broader, more responsible sensibility is shifting into the business world, restaurants included.
You’ll learn in our May issue about Panera’s embrace of this broader-minded strain of capitalism. But how about the students and their business plans?
Here’s how they’re hoping to meld a social consciousness with an old-fashioned profit motive:
Katy Severson, who drove around the country before culinary school to learn regional cuisines firsthand, wants to open a gastropub, The Mayflower, where she can feature the best of what she sampled. “Food has a history and a soul,” she explains in her business plan. “This philosophy will be reflected in the way The Mayflower operates in every facet: from the way we source our food and how that food is treated before it sits on our plates, to the way we treat our staff, to the way we decorate our restaurants, plate our food, and most importantly treat our customers.”
She’d penciled out a pro-forma P&L that allowed for healthcare coverage for employees. “I have experience with not getting benefits,” she explained to her classmates and the judging panel.
Mitchell Dorsey intends to feature only “responsibly sourced” foods in Burg Inn, the farm-to-fork restaurant he plans to open in East Williamsburg, a gentrifying corner of Brooklyn.
Sergio Gutierrez plans to showcase aspiring local musicians in his La Maja, one of the community ties he’s planning for the Monterey, Mexico, gastropub.
A classmate planning a Brooklyn tapas bar pledged that it would be “not just another business in the area, but also a part of [the] local community and its needs.”
Using local ingredients, previously the flag signaling a socially conscious restaurant, was the rule for all the student presenters, not the exception.
Not surprisingly, before Shaich spoke at our Restaurant Leadership Conference, another presenter was asked about the viability of chains purchasing locally.
The industry has sufficiently tempered its cheap-and-easy sourcing mindset to shift local purchasing into the industry consciousness.
All signs say it’s just the beginning of a change in attitudes.
Tuesday, April 3, 2012
What do you need to know?
Last summer Restaurant Business became the first restaurant publication to let subscribers read every issue via a tablet app, a distinction that’s yet to be matched. But that’s nothing compared to what we’re trying with our June edition. If we can pull it off, it’ll be the industry’s first by-request magazine, where restaurateurs tell us what information they want to be served. Just give us your request in question form and we’ll track down the answers.
How do you hold the line on prices when commodity prices spike? We’ll scramble up the mountain to find the wise old man in tunic and ZZ Top beard who can enlighten us.
How do you motivate a staff when you have a budget of zero? Piece of cake. Nordstrom’s will be taking notes.
And it needn’t stay in the business realm. Drs. Ruth and Phil are standing by to help you find love and familial bliss (that’s Ruth Marin and Phil Johnson, and they’re not really doctors, or even real people. But you get the idea.)
So help us out and send in your questions. We may have to edit them for style, grammar and all that SAT-test stuff. But we’ll get you the answers. E-mail them to me, promeo@cspnet.com, or, if you don’t want me to know you need advice on meeting Mr. Right, you can send your query to monkeydish@cspnet.com. And, yes, the questions can be anonymous.
We hope to hear from you.
How do you hold the line on prices when commodity prices spike? We’ll scramble up the mountain to find the wise old man in tunic and ZZ Top beard who can enlighten us.
How do you motivate a staff when you have a budget of zero? Piece of cake. Nordstrom’s will be taking notes.
And it needn’t stay in the business realm. Drs. Ruth and Phil are standing by to help you find love and familial bliss (that’s Ruth Marin and Phil Johnson, and they’re not really doctors, or even real people. But you get the idea.)
So help us out and send in your questions. We may have to edit them for style, grammar and all that SAT-test stuff. But we’ll get you the answers. E-mail them to me, promeo@cspnet.com, or, if you don’t want me to know you need advice on meeting Mr. Right, you can send your query to monkeydish@cspnet.com. And, yes, the questions can be anonymous.
We hope to hear from you.
Monday, April 2, 2012
Not-so-obvious takeaways from the RLC
If you didn’t attend the Restaurant Leadership Conference last week, you missed a three-day version of restaurant-executive grad school, sans the textbooks, tests and beer pong. Well, two out of three, anyway. Books and exams aren’t needed when even a slab of granite would’ve left the conference with new ideas.
But, of course, our invited guests were far from blockheads—nearly 1,000 in total, handpicked to make the event an intellectual Woodstock. You can get a taste of what they learned from our extensive coverage here.
But speakers were only part of the group-think. The magic of our conference is the networking, where attendees can exchange views on problems, opportunities and the business’ future. Here are a few of the currents that arose in those discussions:
From dearth to data deluge. Not long ago, restaurant execs were bemoaning the lack of granular data about their operations. They longed for the trove of information their supermarket and retailer counterparts could get from scanner data.
Now it appears the pendulum has swung too far in the opposite direction. As one speaker remarked, you can now quantify and benchmark everything from guest satisfaction to employee productivity and food waste. But it’s overwhelming some operators. They want less data, and they want it presented in a way that requires no interpretation.
One researcher recounted how a client asked that a considerable download, chockfull of insights, be pared down to just eight key takeaways.
Other data providers showed how they’re responding to the keep-it-simple mandate. One uses letter grades so clients have an instant read of how they’re being perceived by customers on specific criteria. Another uses arrows that show whether an attribute has trended up or down.
The phenomenon was also evident in some of the presentations at RLC. C3, the family marketing specialist, teamed up with Technomic to provide new data on how households choose restaurants. Instead of downloading numbers, representatives presented the S.A.F.E. Wheel, a circle composed proportionately of the four dynamics that figure into a choice (Service, Atmosphere, Food, Entertainment). Service, at 32%, was the biggest wedge on the Wheel.
Concept development is revving up. It’s not unusual at an industry meeting to swap recommendations of new concepts to see. But seldom have I heard so many advisories, or to be asked so often about such and such a concept.
Virtually all were in the fast-casual market, and most were likened in one way or another to Chipotle.
The volume underscores the new imperative within the quick-service market to provide value in the form of quality rather than price. It also speaks to the greater availability of capital, along with the number of chain veterans who are ready to do something on their own, away from meddling investors and franchisees who don’t want to invest in the evolution of their concept.
Among the emerging concepts I was asked about or advised to see: Mendocino Farms, Little Greek, Daphne’s California Greek, Veggie Grill, Babalu Tacos & Tapas, Zinburger, Extreme Pita and Pita Express.
Wendy’s as a touchstone…of what to do right—and wrong. There were actually three Wendy’s discussed during the conference: The brainchild of Dave Thomas and Jim Near, which put a near-lethal hurt on McDonald’s, according to former USA CEO Ed Rensi; the Wendy’s that lost its way and screwed up Baja Fresh in the process, according to the opinions of several outspoken attendees; and the new, resurgent brand, which drew high praise on stage and off for trying to right itself.
So as not to leave you hanging about Rensi’s comment:
“There were two ad campaigns that almost killed McDonald’s,” Rensi said during a keynote addres. “One was, Fresh not frozen,” a breakthrough claim from Day One for Wendy’s, and ironically a competitive advantage it touted right after the show, to underscore that it’s never used “pink slime” beef.
(The other near-death experience for McDonald’s, according to Rensi: Burger King’s Broiled, Not Fried commercials.)
Savory bits that defy categorization. I’m going to try anyway.
Scariest thought. National Restaurant Association chairman Roz Mallet, on the healthcare plan currently being challenged before the U.S. Supreme Court: “Our industry research has shown that our cost will become our largest expense by 2014.” Another presenter quantified that expense at roughly $2 per employee per hour.
Best quip. Ed Rensi, on the state of the restaurant industry: “If it wasn't for customers, suppliers and employees, the restaurant industry would be really good.”
Most suprising appearance. Ray Kroc, at least in audio form. MonkeyMedia’s Erle Dardick worked a recording of McDonald’s godfather into an introduction that included a dream sequence, an unabashed pitch for Dardick’s breakout session, and even a speaker introduction. It worked, very well.
Scariest thought, take 2. We’re already deep into the planning for the 2013 Restaurant Leadership Conference. The dates are April 21-24, if you want to mark your calendar.
But, of course, our invited guests were far from blockheads—nearly 1,000 in total, handpicked to make the event an intellectual Woodstock. You can get a taste of what they learned from our extensive coverage here.
But speakers were only part of the group-think. The magic of our conference is the networking, where attendees can exchange views on problems, opportunities and the business’ future. Here are a few of the currents that arose in those discussions:
From dearth to data deluge. Not long ago, restaurant execs were bemoaning the lack of granular data about their operations. They longed for the trove of information their supermarket and retailer counterparts could get from scanner data.
Now it appears the pendulum has swung too far in the opposite direction. As one speaker remarked, you can now quantify and benchmark everything from guest satisfaction to employee productivity and food waste. But it’s overwhelming some operators. They want less data, and they want it presented in a way that requires no interpretation.
One researcher recounted how a client asked that a considerable download, chockfull of insights, be pared down to just eight key takeaways.
Other data providers showed how they’re responding to the keep-it-simple mandate. One uses letter grades so clients have an instant read of how they’re being perceived by customers on specific criteria. Another uses arrows that show whether an attribute has trended up or down.
The phenomenon was also evident in some of the presentations at RLC. C3, the family marketing specialist, teamed up with Technomic to provide new data on how households choose restaurants. Instead of downloading numbers, representatives presented the S.A.F.E. Wheel, a circle composed proportionately of the four dynamics that figure into a choice (Service, Atmosphere, Food, Entertainment). Service, at 32%, was the biggest wedge on the Wheel.
Concept development is revving up. It’s not unusual at an industry meeting to swap recommendations of new concepts to see. But seldom have I heard so many advisories, or to be asked so often about such and such a concept.
Virtually all were in the fast-casual market, and most were likened in one way or another to Chipotle.
The volume underscores the new imperative within the quick-service market to provide value in the form of quality rather than price. It also speaks to the greater availability of capital, along with the number of chain veterans who are ready to do something on their own, away from meddling investors and franchisees who don’t want to invest in the evolution of their concept.
Among the emerging concepts I was asked about or advised to see: Mendocino Farms, Little Greek, Daphne’s California Greek, Veggie Grill, Babalu Tacos & Tapas, Zinburger, Extreme Pita and Pita Express.
Wendy’s as a touchstone…of what to do right—and wrong. There were actually three Wendy’s discussed during the conference: The brainchild of Dave Thomas and Jim Near, which put a near-lethal hurt on McDonald’s, according to former USA CEO Ed Rensi; the Wendy’s that lost its way and screwed up Baja Fresh in the process, according to the opinions of several outspoken attendees; and the new, resurgent brand, which drew high praise on stage and off for trying to right itself.
So as not to leave you hanging about Rensi’s comment:
“There were two ad campaigns that almost killed McDonald’s,” Rensi said during a keynote addres. “One was, Fresh not frozen,” a breakthrough claim from Day One for Wendy’s, and ironically a competitive advantage it touted right after the show, to underscore that it’s never used “pink slime” beef.
(The other near-death experience for McDonald’s, according to Rensi: Burger King’s Broiled, Not Fried commercials.)
Savory bits that defy categorization. I’m going to try anyway.
Scariest thought. National Restaurant Association chairman Roz Mallet, on the healthcare plan currently being challenged before the U.S. Supreme Court: “Our industry research has shown that our cost will become our largest expense by 2014.” Another presenter quantified that expense at roughly $2 per employee per hour.
Best quip. Ed Rensi, on the state of the restaurant industry: “If it wasn't for customers, suppliers and employees, the restaurant industry would be really good.”
Most suprising appearance. Ray Kroc, at least in audio form. MonkeyMedia’s Erle Dardick worked a recording of McDonald’s godfather into an introduction that included a dream sequence, an unabashed pitch for Dardick’s breakout session, and even a speaker introduction. It worked, very well.
Scariest thought, take 2. We’re already deep into the planning for the 2013 Restaurant Leadership Conference. The dates are April 21-24, if you want to mark your calendar.
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