If you still think chain restaurants are a career path for losers who can’t make it in a legitimate field, here’s a news flash: The world’s not flat, you can teach old dogs new tricks, and some white people have exceptional rhythm. Not only is the business the chosen route to success for people of considerable talent, but it’s an industry that few people abandon once they’ve tasted its rewards.
Exhibit A: Claire Babrowski, until recently the exception that proved the rule. When she was passed over for the top jobs at McDonald’s, she baled for retailing, becoming acting CEO and COO of Radio Shack (and reporting, ironically, to one of the few restaurant-chain executives who left for good, one-time Arby’s and Shoney’s chief Len Roberts).
I interviewed her when she headed operations for McDonald’s at a critical point for the chain. It was clear that she was a person of exceptional ability, vision and leadership. I figured I was meeting the next CEO of the Golden Arches or perhaps a cagey competitor.
Then McDonald's secret sauce soured, some of its bolder initiatives were questioned, and the company adopted a back-to-basics mindset. Futuristic notions like Made For You, a costly kitchen re-do for delivering customized orders in a flash, was suddenly downplayed.
Insiders reported that Babrowski was frustrated and ready to test herself elsewhere. After a lull, she resurfaced at Radio Shack, selling answering machines instead of burgers. She later moved to Toys “R” Us, where she served as COO until she was fired in May 2010.
Now she's once again in the restaurant business, albeit as a director rather than an executive. She was just named a member of Quiznos' new board, a role that should be familiar to her, given that she served once as a director for Chipotle Mexican Grill.
Her new affiliation, Quiznos, was teetering on the brink of bankruptcy around the beginning of the year. Now it boasts an all-star board studded with such industry elders as Doug Benham, a key figure in Arby's best years, and Kip Knight, a one-time marketing leader for KFC and Taco Bell. Apparently they can’t stay away from the business, either.
Babrowski is the latest example of what was once a rare breed: A expatriate from McDonald's. Lately that group has been growing. Former president Mike Roberts has a new fast-casual concept called LYFE Kitchen. One-time U.S. CEO Ed Rensi has a winner upstart in the gourmet burger concept Tom & Eddie's (hear him in a few weeks at the Restaurant Leadership Conference). Kevin Reddy runs Noodles & Co.
And then there's Jack Greenberg, the onetime corporate CEO who was at the helm when business went awry for McDonald's in the mid-2000s. He had made the mistake of accepting the bleak view that domestic growth prospects for the brand were dimming. He led a diversification effort that saw McDonald's buy into such concepts as Boston Market, Fazoli's, Chipotle, Pret a Manger, and Aroma, a coffee specialist.
Those brands were gone almost as soon as Greenberg retired.
But now he, too, is back in the business, though in a distant capacity. Chicago mayor Rahm Emanuel has nominated Greenberg to head the operation that runs the Windy City's McCormick Place, home of the National Restaurant Association's annual mega-convention.
It's merely a big toe stuck back in the pool. But who knows what could happen? One of the NRA Show's benefits is the networking opportunities it affords.
Showing posts with label Arby's. Show all posts
Showing posts with label Arby's. Show all posts
Thursday, February 23, 2012
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.
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.
Wednesday, May 11, 2011
The publicity event is alive, but not necessarily well
A pink ass seldom sells restaurant meals, or at least not outside of certain neighborhoods in New York and San Francisco. But that didn’t divert the marketing ploy from express-line entry into the Restaurant Publicity Stunts Hall of Fame, which might have to open a whole new wing after recent weeks.
Indeed, we may be in a Golden Age of restaurant stunts, a reflection of the need to offset shrinking (or non-existent) marketing budgets with outrageous actions. That factor is changing the very nature of stunts. No longer are they single events, over and done in a flash.
Consider, for instance, how a newcomer to the better-burger market tried to set itself apart from the spatula-wielding pack. Twenty-three-year-old Lakita Evans decided to call her Waco, Texas, outlet Fat Ho. Its specialties include a Sloppy Ho, a.k.a. a brisket sandwich, and a Supa Dupa Fly Ho.
Evans hit the mark. Papers across the nation have reported on her venture, invariably focusing on the name and her age rather than the quality of the food and service.
Many of the reports noted that she was opening a pimp’s walk away from the Gospel Café, a ploy practitioner in its own right.
Neither should (or would) be confused with Buns, a burger joint in Chapel Hill, N.C.
And don’t expect to find More Than a Mouthful Burgers, the signature line of Hooters, a pioneer of the suggestive-name approach.
But the all-time winner of the double-entendre approach has to be Pink Taco, which, some of Reality Check’s readers in stained raincoats have informed me, is slang for female genitalia.
But the gynecology-inspired concept didn’t stop there. Last week, in honor of Cinco de Mayo, the Los Angeles casual restaurant decided to post something decidedly Mexican outside its tony Century City location. It took a donkey, or what patrons of the Gospel Café might know from their bible readings to be known also as an ass, and painted it pink.
The animal was staked outside the mall restaurant, “Pink Taco” written on its flank in what looked like a finger-painting endeavor.
The restaurant got attention, for sure. But unfortunately some of it came from animal-rights advocates, who moved in like vice cops staking out Charlie Sheen’s house. The restaurant agreed never to use a live animal in its promotion again.
But take heart: There’s still a respect evident among restaurant stunt-pullers for the classics. KFC, for instance, used the timeless stunt setting of a skyscraper’s upper floors to call attention to its new $5 bundled lunch meals. At noon today, someone dressed as Col. Sanders will rappel down 38 floors of a Chicago building to deliver lunches to window washers dangling outside the 40th floor.
Reports that the chain considered a flag-pole sitting contest could not be confirmed.
Even more conventional is what Arby’s is doing to introduce its new Grilled Chicken & Pecan Salad Sandwich and wrap—ironically, like KFC’s new lunch deal, a product intended to draw customers away from Subway.
The chain will give away free sandwiches and wraps to customers who buy a 22-oz. soft drink anytime before May 23. Patrons are then invited to vote for which they like better, the Arby’s sandwich or Subway’s Orchard Chicken Salad sub.
There’s been no response from Subway. Maybe it’s thinking up its own stunt.
Indeed, we may be in a Golden Age of restaurant stunts, a reflection of the need to offset shrinking (or non-existent) marketing budgets with outrageous actions. That factor is changing the very nature of stunts. No longer are they single events, over and done in a flash.
Consider, for instance, how a newcomer to the better-burger market tried to set itself apart from the spatula-wielding pack. Twenty-three-year-old Lakita Evans decided to call her Waco, Texas, outlet Fat Ho. Its specialties include a Sloppy Ho, a.k.a. a brisket sandwich, and a Supa Dupa Fly Ho.
Evans hit the mark. Papers across the nation have reported on her venture, invariably focusing on the name and her age rather than the quality of the food and service.
Many of the reports noted that she was opening a pimp’s walk away from the Gospel Café, a ploy practitioner in its own right.
Neither should (or would) be confused with Buns, a burger joint in Chapel Hill, N.C.
And don’t expect to find More Than a Mouthful Burgers, the signature line of Hooters, a pioneer of the suggestive-name approach.
But the all-time winner of the double-entendre approach has to be Pink Taco, which, some of Reality Check’s readers in stained raincoats have informed me, is slang for female genitalia.
But the gynecology-inspired concept didn’t stop there. Last week, in honor of Cinco de Mayo, the Los Angeles casual restaurant decided to post something decidedly Mexican outside its tony Century City location. It took a donkey, or what patrons of the Gospel Café might know from their bible readings to be known also as an ass, and painted it pink.
The animal was staked outside the mall restaurant, “Pink Taco” written on its flank in what looked like a finger-painting endeavor.
The restaurant got attention, for sure. But unfortunately some of it came from animal-rights advocates, who moved in like vice cops staking out Charlie Sheen’s house. The restaurant agreed never to use a live animal in its promotion again.
But take heart: There’s still a respect evident among restaurant stunt-pullers for the classics. KFC, for instance, used the timeless stunt setting of a skyscraper’s upper floors to call attention to its new $5 bundled lunch meals. At noon today, someone dressed as Col. Sanders will rappel down 38 floors of a Chicago building to deliver lunches to window washers dangling outside the 40th floor.
Reports that the chain considered a flag-pole sitting contest could not be confirmed.
Even more conventional is what Arby’s is doing to introduce its new Grilled Chicken & Pecan Salad Sandwich and wrap—ironically, like KFC’s new lunch deal, a product intended to draw customers away from Subway.
The chain will give away free sandwiches and wraps to customers who buy a 22-oz. soft drink anytime before May 23. Patrons are then invited to vote for which they like better, the Arby’s sandwich or Subway’s Orchard Chicken Salad sub.
There’s been no response from Subway. Maybe it’s thinking up its own stunt.
Thursday, January 20, 2011
Sweeter than chocolates?
You foodservice romantics may want to give the loved one a special gift this Valentine’s Day: Unlimited burgers, fish fillets, steak and sodas. Yes, buy them a restaurant chain.
Certainly plenty are now on the market, particularly in fast food. This morning, in case you’re just arising, brought confirmation of what has been rumored for a long time: The parent company of Wendy’s is exploring financial alternatives for its secondary brand, Arby’s. That’s financial lingo for finding a buyer or otherwise peddling the portfolio chip. (I’ve often wondered if financial geeks have Exploring Financial Alternatives Events instead of yard sales.)
So, to recap what’s available to you Valentine’s Day shoppers, officially on the block right now are A&W All-American Food, Long John Silver’s, Arby’s, and Charlie Brown’s, the bankrupt steakhouse that has to be sold in the next week or so under a deal with lenders. Red Robin is a judgment call, since investors are demanding that it be sold and say suitors have come forward. But there's been no For Sale sign posted outside headquarters.
Interestingly, the first three on the industry Craig’s List are being peddled because their parents want to focus on stronger brands with more growth potential (A&W and Long John’s are of course owned by Yum! Brands, better known as the franchisors of Taco Bell, KFC and Pizza Hut). So there’s a bit of restaurant triage under way.
If it continues, we may see the restaurant For Sale listing grow to the length of the Singles and Seeking column.
Certainly plenty are now on the market, particularly in fast food. This morning, in case you’re just arising, brought confirmation of what has been rumored for a long time: The parent company of Wendy’s is exploring financial alternatives for its secondary brand, Arby’s. That’s financial lingo for finding a buyer or otherwise peddling the portfolio chip. (I’ve often wondered if financial geeks have Exploring Financial Alternatives Events instead of yard sales.)
So, to recap what’s available to you Valentine’s Day shoppers, officially on the block right now are A&W All-American Food, Long John Silver’s, Arby’s, and Charlie Brown’s, the bankrupt steakhouse that has to be sold in the next week or so under a deal with lenders. Red Robin is a judgment call, since investors are demanding that it be sold and say suitors have come forward. But there's been no For Sale sign posted outside headquarters.
Interestingly, the first three on the industry Craig’s List are being peddled because their parents want to focus on stronger brands with more growth potential (A&W and Long John’s are of course owned by Yum! Brands, better known as the franchisors of Taco Bell, KFC and Pizza Hut). So there’s a bit of restaurant triage under way.
If it continues, we may see the restaurant For Sale listing grow to the length of the Singles and Seeking column.
Thursday, February 11, 2010
How do you sale 'bail' in Japanese?
Did I miss some sort of zombie uprising in Japan? Or maybe the leak of a flesh-eating microbe from a germ-warfare lab? I’m just trying to understand why the world’s second-largest economy has been retagged in such short order as a place where U.S. restaurant companies would rather not be.
Not long ago they were gazing upon the market with the sort of slack-jawed lust they currently hold for China or India. Now they can’t get out of there fast enough.
McDonald’s indicated this week that it’ll close about 430 stores in Japan within the next 18 months. That’s despite what CEO Jim Skinner had earlier described as “sold progress” in the face of “significant economic headwinds” during 2009. Comparable sales for the units there had been positive, a sign of considerable strength in the world’s current economic plight.
McDonald’s is hardly alone in being spooked about Japan. Wendy’s announced its pullout in December, after operating there for 29 years. Even stranger, the chain’s new owner has cited international development as a key strategy for bolstering the brand’s fortunes. The only nation with a bigger economy than Japan’s is the United States.
But the retreat isn’t limited to quick-service companies. The parent of Outback Steakhouse recently alerted lenders that it’s considering the divestiture of its restaurants in Japan, along with outlets in South Korea and Hong Kong. It cited “attractive market conditions,” which must be inconspicuous to Wendy’s/Arby’s Restaurant Group and the company that owns McDonald’s Japanese operations (the concern is a joint with U.S.-based McDonald’s Corp.)
Outback’s parent, OSI Restaurant Partners, said it’d also consider the sale of development rights to Asia if lenders were willing. That’s hardly a vote of confidence in the opportunities of a onetime Asian tiger like Japan.
What makes OSI’s interest all the more puzzling is its partial ownership by Bain Capital, the mega-sized private equity firm.
As a major stakeholder, Bain presumably had to give its okay before OSI could consider a sale of the Asian steakhouses. Not long after OSI aired the possibility of a divestiture, Bain indicated that it was buying a controlling interest in another foodservice company: The Japanese franchisee of Domino’s Pizza.
Not long ago they were gazing upon the market with the sort of slack-jawed lust they currently hold for China or India. Now they can’t get out of there fast enough.
McDonald’s indicated this week that it’ll close about 430 stores in Japan within the next 18 months. That’s despite what CEO Jim Skinner had earlier described as “sold progress” in the face of “significant economic headwinds” during 2009. Comparable sales for the units there had been positive, a sign of considerable strength in the world’s current economic plight.
McDonald’s is hardly alone in being spooked about Japan. Wendy’s announced its pullout in December, after operating there for 29 years. Even stranger, the chain’s new owner has cited international development as a key strategy for bolstering the brand’s fortunes. The only nation with a bigger economy than Japan’s is the United States.
But the retreat isn’t limited to quick-service companies. The parent of Outback Steakhouse recently alerted lenders that it’s considering the divestiture of its restaurants in Japan, along with outlets in South Korea and Hong Kong. It cited “attractive market conditions,” which must be inconspicuous to Wendy’s/Arby’s Restaurant Group and the company that owns McDonald’s Japanese operations (the concern is a joint with U.S.-based McDonald’s Corp.)
Outback’s parent, OSI Restaurant Partners, said it’d also consider the sale of development rights to Asia if lenders were willing. That’s hardly a vote of confidence in the opportunities of a onetime Asian tiger like Japan.
What makes OSI’s interest all the more puzzling is its partial ownership by Bain Capital, the mega-sized private equity firm.
As a major stakeholder, Bain presumably had to give its okay before OSI could consider a sale of the Asian steakhouses. Not long after OSI aired the possibility of a divestiture, Bain indicated that it was buying a controlling interest in another foodservice company: The Japanese franchisee of Domino’s Pizza.
Monday, August 24, 2009
The art of the slam
And now, a public service warning to the goliaths of restaurant advertising: Put on a helmet. A pack of would-be David’s is betting that a bucket of stones can be an effective marketing program.
Second-tier chains have been hurling more disparagements at bigger rivals than Don Rickles serves up in a month. Look at the more memorable campaigns of recent weeks. Carl’s Jr. took aim at McDonald’s revered Big Mac by introducing a “Big Carl” in commercials that all but taunted na-na-na-na-na-na. The commercials define the new premium sandwich by highlighting how the Mac can’t measure up in heft (the Big Carl boasts twice the meat and cheese) and price (it costs roughly 50 cents less).
Then there’s the absolute trash-talk. In a confrontation between talking sandwiches, all Mac can offer in its defense is having been born with a third bun.
Another installment makes fun of McDonald’s two-all-beef-patties Big Mac jingle, and a third features a Big Mac asking a Big Carl about the size of his beef, explaining that he's considering a patty enlargement to make his buns look smaller.
The kick-the-Arches effort coincides with a Carl’s publicity campaign aimed at McDonald’s new Third Pounder Angus burger. The effort encourages consumers not to be taken in by “the McHype,” and notes that Carl’s has been featuring big Angus burgers for years.
A similar don’t-you-wish-you-were-me? Campaign raged this summer as the El Pollo Loco chicken chain took aim at the king of the coop, KFC. After the bigger chain introduced its grilled chicken, EPL, a grilled-chicken specialist, ran a series of commercials that pecked at KFC’s honesty.
One noted that KFC stores still don’t have grills, so how authentic could the new product be?
Others asserted that the new chicken was flavored in part with beef, without any heads-up to consumers.
Still another replayed comments that were supposedly left on an EPL answering machine by consumers who had tasted both EPL's grilled chicken and KFC's new product. Patrons had been asked to sample the two products side by side and recount their preference.
Several of the comments slammed EPL's product, asserting that Kentucky Grilled Chicken was superior. The ads point out that the callers' numbers had been traced to KFC's headquarters in Louisville, Ky., where EPL had no stores.
Not all of the snapping comes from regional chains like Carl’s and EPL. Burger King, for instance, ran commercials in some markets earlier this year to promote its double cheeseburger as a better deal than McDonald’s comparable item. The ads featured a young man who balks at his friend’s suggestion that they hit Burger King for the two-patty sandwich. Under pressure, the kid admits that he has tiny hands, which he then displays. How can he hold a behemoth like the BK double burger?
The commercial closes with the friend holding the BK burger so his tiny-handed friend can take a bite.
The campaign was reportedly resurrected in Chicago, and New York stations are airing a variant where the tiny-handed youngster objects to getting a $1 Jr. Whopper.
(If you’re over 27, you may not be aware that there’s a series of tiny hand videos on free vid-sharing sites that have nothing to do with BK. The clips show a guy with tiny hands trying to do things like audition for an antacid commercial or work as a babysitter. Apparently this is high humor among the same people who find The King to be hilarious.)
Sometimes the sniping even creeps into familial situations. The Arby’s sandwich chain is promoting its new Roastburger sandwiches as “the burger done better.” The concept is a sister of Wendy’s a burger chain.
Then again, it’s hard to have sympathy for Wendy’s. The tagline for its burgers and other specialties: “It’s waaaay better than fast-food.”
Second-tier chains have been hurling more disparagements at bigger rivals than Don Rickles serves up in a month. Look at the more memorable campaigns of recent weeks. Carl’s Jr. took aim at McDonald’s revered Big Mac by introducing a “Big Carl” in commercials that all but taunted na-na-na-na-na-na. The commercials define the new premium sandwich by highlighting how the Mac can’t measure up in heft (the Big Carl boasts twice the meat and cheese) and price (it costs roughly 50 cents less).
Then there’s the absolute trash-talk. In a confrontation between talking sandwiches, all Mac can offer in its defense is having been born with a third bun.
Another installment makes fun of McDonald’s two-all-beef-patties Big Mac jingle, and a third features a Big Mac asking a Big Carl about the size of his beef, explaining that he's considering a patty enlargement to make his buns look smaller.
The kick-the-Arches effort coincides with a Carl’s publicity campaign aimed at McDonald’s new Third Pounder Angus burger. The effort encourages consumers not to be taken in by “the McHype,” and notes that Carl’s has been featuring big Angus burgers for years.
A similar don’t-you-wish-you-were-me? Campaign raged this summer as the El Pollo Loco chicken chain took aim at the king of the coop, KFC. After the bigger chain introduced its grilled chicken, EPL, a grilled-chicken specialist, ran a series of commercials that pecked at KFC’s honesty.
One noted that KFC stores still don’t have grills, so how authentic could the new product be?
Others asserted that the new chicken was flavored in part with beef, without any heads-up to consumers.
Still another replayed comments that were supposedly left on an EPL answering machine by consumers who had tasted both EPL's grilled chicken and KFC's new product. Patrons had been asked to sample the two products side by side and recount their preference.
Several of the comments slammed EPL's product, asserting that Kentucky Grilled Chicken was superior. The ads point out that the callers' numbers had been traced to KFC's headquarters in Louisville, Ky., where EPL had no stores.
Not all of the snapping comes from regional chains like Carl’s and EPL. Burger King, for instance, ran commercials in some markets earlier this year to promote its double cheeseburger as a better deal than McDonald’s comparable item. The ads featured a young man who balks at his friend’s suggestion that they hit Burger King for the two-patty sandwich. Under pressure, the kid admits that he has tiny hands, which he then displays. How can he hold a behemoth like the BK double burger?
The commercial closes with the friend holding the BK burger so his tiny-handed friend can take a bite.
The campaign was reportedly resurrected in Chicago, and New York stations are airing a variant where the tiny-handed youngster objects to getting a $1 Jr. Whopper.
(If you’re over 27, you may not be aware that there’s a series of tiny hand videos on free vid-sharing sites that have nothing to do with BK. The clips show a guy with tiny hands trying to do things like audition for an antacid commercial or work as a babysitter. Apparently this is high humor among the same people who find The King to be hilarious.)
Sometimes the sniping even creeps into familial situations. The Arby’s sandwich chain is promoting its new Roastburger sandwiches as “the burger done better.” The concept is a sister of Wendy’s a burger chain.
Then again, it’s hard to have sympathy for Wendy’s. The tagline for its burgers and other specialties: “It’s waaaay better than fast-food.”
Tuesday, August 11, 2009
Ripple or the real thing?
Every trend starts with a single proponent and builds from there, adapter by adapter. Unfortunately, the process is no different for fads and flashes. The challenge for opportunity-spotters is distinguishing between the two. What, for instance, are we to make of these recent ripples in the market?
The Amway marketing approach: T.G.I. Friday’s broke a campaign in late July called BYOB, or Bring Your Own Buddy. Recruit a pal to join you at the granddaddy of casual dining and they’ll each get $5 off their meal. Apparently you can steal one of their fries, or just bask in the glow of having done something nice for a friend.
It would’ve been nothing more than a one-off for the industry is Arby’s hadn’t begun a campaign this month called Friends and Family Feast. If a group of five visits a unit together, they get five roast beef sandwiches for $5, and all sides for a mere $1 each. The more, the thriftier.
As Wendy’s/Arby’s CEO Roland Smith explained, the program is intended to bolster frequency, apparently through peer pressure. The chain has qualified 50% of its patrons as “medium users” who might be coaxed to add another trip here or there. Getting them to visit just one more time a year can boost a store’s comp sales by 3%, according to Smith.
So is this patron-as-guest-recruiter approach a trend or a fad? My projection: It’ll be another marketing tactic, another arrow in the quiver that’s put in play from time to time because of its novelty. So my final answer: Neither.
New product mania: Back in the spring, Quiznos CEO Rick Schaden sent a scooter to every headquarters staffer, explaining that they had to move faster in adapting to market trends. He cited product development as an area of focus, but left unaddressed the matter of how.
Yesterday, Schaden detailed the process for making that happen. Or so he attests. It’s called Flex Plan, and it aims to match new items to patrons’ financial situation. “The key is to provide the right food at the right time for the right price,” he said.
If times are tough, Schaden explained, the chain’s R&D department will churn out bargain items like the $3 Toasty Bullet or $4 Toasty Torpedo. And when better times return, he continued, the focus will shift to indulgence items, like double-meat sandwiches.
And regardless of what’s coming down the pipeline, he says, the set-up will streamline the process, yielding fast, more efficient introductions.
While that system is being adopted chainwide, Wendy’s is already reaping the benefits from an R&D overhaul, according to CEO Smith. The chain has “developed a very strong new product pipeline,” he assured investors. “By the end of the year we will have tested at least 14 new products, which is more than Wendy’s has tested in a single year in quite a long time.”
Then there’s the hyperactivity of chains like Mimi’s, Carl’s Jr./Hardee’s, Jack in the Box, McDonald’s and Burger King. New products are flying into the market like a pack of third-graders being released for recess. Is this heightened R&D activity a wave that’ll be with us for awhile? You betcha. Definitely a trend.
Commence the shopping spree: In what should have been a routine earnings release, The Steak n Shake Co. revealed yesterday that it’s restructured itself into a holding company with assets consisting of a lone restaurant chain, the Steak ‘n’ Shake retro brand. Why a holding company with one business?
“The company may pursue investments in the form of acquisitions, joint ventures, and partnerships either related or unrelated to its ongoing business activities,” explained a passage of the earnings release that was probably penned by securities lawyers.
That development followed a report in Saturday’s Atlanta Journal-Constitution about Roark Capital, the private-equity firm that owns McAlister’s Deli and a group of restaurant brands (Moe’s Southwest Grill, Schlotzsky’s, Carvel, Cinnabon) franchised by Focus Group. The story explained that Roark expects to complete as many deals in the current year as it consummated in the previous eight, with several set to close by November.
“We feel like we’re ready to start investing again,” Roark managing partner Neal Aronson told the AJC’s Joe Guy Collier.
Sandwiched between those two instances of check-book rattling was the announcement that Church’s fried-chicken chain had officially been sold, some three months after a deal was announced.
So is this the start of a buying trend? Are companies shopping for restaurant companies again?
After a virtual halt this year in restaurant deals, it certainly feels that way. But it’s all relative. For one thing, private-equity companies are usually the wheeler-dealers in such a spree. They buy, they sell.
This time around, many of them are stuck on the seller side of the table, trying to peddle the chains they amassed in better times. Foreign companies may be the new shoppers. But how active will they be?
My prediction: There’ll be a flurry of activity that feels like a cut-rate auction. But it’ll take awhile to see M&A come close to the level we saw before the Great Recession.
But what’s your assessment? I’d love to hear some discussion about which might be a fad and which might be the start of an actual trend.
The Amway marketing approach: T.G.I. Friday’s broke a campaign in late July called BYOB, or Bring Your Own Buddy. Recruit a pal to join you at the granddaddy of casual dining and they’ll each get $5 off their meal. Apparently you can steal one of their fries, or just bask in the glow of having done something nice for a friend.
It would’ve been nothing more than a one-off for the industry is Arby’s hadn’t begun a campaign this month called Friends and Family Feast. If a group of five visits a unit together, they get five roast beef sandwiches for $5, and all sides for a mere $1 each. The more, the thriftier.
As Wendy’s/Arby’s CEO Roland Smith explained, the program is intended to bolster frequency, apparently through peer pressure. The chain has qualified 50% of its patrons as “medium users” who might be coaxed to add another trip here or there. Getting them to visit just one more time a year can boost a store’s comp sales by 3%, according to Smith.
So is this patron-as-guest-recruiter approach a trend or a fad? My projection: It’ll be another marketing tactic, another arrow in the quiver that’s put in play from time to time because of its novelty. So my final answer: Neither.
New product mania: Back in the spring, Quiznos CEO Rick Schaden sent a scooter to every headquarters staffer, explaining that they had to move faster in adapting to market trends. He cited product development as an area of focus, but left unaddressed the matter of how.
Yesterday, Schaden detailed the process for making that happen. Or so he attests. It’s called Flex Plan, and it aims to match new items to patrons’ financial situation. “The key is to provide the right food at the right time for the right price,” he said.
If times are tough, Schaden explained, the chain’s R&D department will churn out bargain items like the $3 Toasty Bullet or $4 Toasty Torpedo. And when better times return, he continued, the focus will shift to indulgence items, like double-meat sandwiches.
And regardless of what’s coming down the pipeline, he says, the set-up will streamline the process, yielding fast, more efficient introductions.
While that system is being adopted chainwide, Wendy’s is already reaping the benefits from an R&D overhaul, according to CEO Smith. The chain has “developed a very strong new product pipeline,” he assured investors. “By the end of the year we will have tested at least 14 new products, which is more than Wendy’s has tested in a single year in quite a long time.”
Then there’s the hyperactivity of chains like Mimi’s, Carl’s Jr./Hardee’s, Jack in the Box, McDonald’s and Burger King. New products are flying into the market like a pack of third-graders being released for recess. Is this heightened R&D activity a wave that’ll be with us for awhile? You betcha. Definitely a trend.
Commence the shopping spree: In what should have been a routine earnings release, The Steak n Shake Co. revealed yesterday that it’s restructured itself into a holding company with assets consisting of a lone restaurant chain, the Steak ‘n’ Shake retro brand. Why a holding company with one business?
“The company may pursue investments in the form of acquisitions, joint ventures, and partnerships either related or unrelated to its ongoing business activities,” explained a passage of the earnings release that was probably penned by securities lawyers.
That development followed a report in Saturday’s Atlanta Journal-Constitution about Roark Capital, the private-equity firm that owns McAlister’s Deli and a group of restaurant brands (Moe’s Southwest Grill, Schlotzsky’s, Carvel, Cinnabon) franchised by Focus Group. The story explained that Roark expects to complete as many deals in the current year as it consummated in the previous eight, with several set to close by November.
“We feel like we’re ready to start investing again,” Roark managing partner Neal Aronson told the AJC’s Joe Guy Collier.
Sandwiched between those two instances of check-book rattling was the announcement that Church’s fried-chicken chain had officially been sold, some three months after a deal was announced.
So is this the start of a buying trend? Are companies shopping for restaurant companies again?
After a virtual halt this year in restaurant deals, it certainly feels that way. But it’s all relative. For one thing, private-equity companies are usually the wheeler-dealers in such a spree. They buy, they sell.
This time around, many of them are stuck on the seller side of the table, trying to peddle the chains they amassed in better times. Foreign companies may be the new shoppers. But how active will they be?
My prediction: There’ll be a flurry of activity that feels like a cut-rate auction. But it’ll take awhile to see M&A come close to the level we saw before the Great Recession.
But what’s your assessment? I’d love to hear some discussion about which might be a fad and which might be the start of an actual trend.
Friday, June 12, 2009
Is Wendy's/Arby's shopping for another chain?
Last October I had lunch at a midtown Wendy’s with Roland Smith, the newly named CEO of the chain and its adoptive parent of a few weeks, Wendy’s/Arby’s Group. Smith and his team were blitzing the media to discuss how the company formerly known as Triarc was going to generate more value for shareholders as a two-concept fast-food franchisor.
Among the more surprising routes mentioned by Smith was the acquisition of more brands. The company had just spent $2.3 billion to buy Wendy’s after more than a year of contentious pursuit. Was it really open to other deals?
Fast forward to yesterday morning, when Wendy’s/Arby’s announced plans to raise $550 million in debt. About $125 million will be used to pay off outstanding loans—the equivalent of paying off a big credit-card bill. The other $425 million, the company said, would be used for “general corporate purposes.” It listed seven specific possibilities, including “acquisitions of other restaurant companies.”
Most of the other options are moves that would likely appease shareholders—things like new unit development, paying a dividend, or buying back stock. Yet the company’s share price dipped. “There’s clearly some hesitation on the part of investors,” Bob O’Brien wrote on a Barron’s blog. “The likeliest source of concern: that Wendy’s would make another big-ticket acquisition.”
Back in October, Smith wouldn't discuss possible acquisition candidates, nor even what kind of companies might have been on his shopping wish list. The only clue he provided was a comment that any target would have to be a high-quality rather than a low-cost provider.
It’s a safe presumption that it would also have to be a potential or current franchisor, since that’s Wendy’s/Arby’s business. Smith didn’t say anything about menus, but presumably the company would want something that wouldn’t compete with its burger or sandwich chains. That means it’d have to specialize in something like chicken, pizza or beverages.
The criteria are smoky at best. But there are plenty of candidates that would fit.
Jamba Juice, for one. It’s the hands-down leader in the smoothie segment, with a healthy average ticket.
Church’s has traditionally been a value provider, but it might be an affordable play in the chicken market, and is widely reported to be for sale.
The chain's sister concept, Caribou Coffee, would also meet Smith's vague criteria.
There are also any number of upstart, high-quality pizza concepts currently competing on a regional basis.
Since co-branding figures large in Wendy’s/Arby’s growth strategy, a dessert add-on might also make sense. A regional soft-serve specialist, maybe?
This, of course, is all speculation. But a $425-million down payment makes a lot more sense than “general corporate purposes.” That’s a lot of new carpet and paper clips.
Among the more surprising routes mentioned by Smith was the acquisition of more brands. The company had just spent $2.3 billion to buy Wendy’s after more than a year of contentious pursuit. Was it really open to other deals?
Fast forward to yesterday morning, when Wendy’s/Arby’s announced plans to raise $550 million in debt. About $125 million will be used to pay off outstanding loans—the equivalent of paying off a big credit-card bill. The other $425 million, the company said, would be used for “general corporate purposes.” It listed seven specific possibilities, including “acquisitions of other restaurant companies.”
Most of the other options are moves that would likely appease shareholders—things like new unit development, paying a dividend, or buying back stock. Yet the company’s share price dipped. “There’s clearly some hesitation on the part of investors,” Bob O’Brien wrote on a Barron’s blog. “The likeliest source of concern: that Wendy’s would make another big-ticket acquisition.”
Back in October, Smith wouldn't discuss possible acquisition candidates, nor even what kind of companies might have been on his shopping wish list. The only clue he provided was a comment that any target would have to be a high-quality rather than a low-cost provider.
It’s a safe presumption that it would also have to be a potential or current franchisor, since that’s Wendy’s/Arby’s business. Smith didn’t say anything about menus, but presumably the company would want something that wouldn’t compete with its burger or sandwich chains. That means it’d have to specialize in something like chicken, pizza or beverages.
The criteria are smoky at best. But there are plenty of candidates that would fit.
Jamba Juice, for one. It’s the hands-down leader in the smoothie segment, with a healthy average ticket.
Church’s has traditionally been a value provider, but it might be an affordable play in the chicken market, and is widely reported to be for sale.
The chain's sister concept, Caribou Coffee, would also meet Smith's vague criteria.
There are also any number of upstart, high-quality pizza concepts currently competing on a regional basis.
Since co-branding figures large in Wendy’s/Arby’s growth strategy, a dessert add-on might also make sense. A regional soft-serve specialist, maybe?
This, of course, is all speculation. But a $425-million down payment makes a lot more sense than “general corporate purposes.” That’s a lot of new carpet and paper clips.
Friday, March 20, 2009
Fast-food's new stealth ad
There's nothing in a buzz-stoking new restaurant commercial that identifies the advertiser or what it's pushing. But it's obvious burgers aren't the product. An artist supposedly uses 10 of them (he says 14 in web postings) to recreate an art masterpiece in grease. Only when you go to the touted website, burgergreaseart.com, do you learn who's really plugging what. A hint: Siblings don't always play nice.
See the commercial for yourself:
See the commercial for yourself:
Tuesday, March 17, 2009
Retailers have Xmas, restaurants have the NCAA
With the match-ups set, teams from coast to coast are braced for the tip-off that officially starts March Madness. Some even play basketball.
Far, far more are restaurant staffs braced for what was once merely the NCAA playoffs, the rapid-fire series of elimination games that determines the nation’s best college basketball team. Today, the multi-week stretch clearly reigns along with Valentine’s Day, Mother’s Day and New Year’s Eve as one of the restaurant industry’s biggest promotional opportunities.
The big chains try to squeeze traffic out of the contest through tie-ins that extend far beyond traditional advertising. Papa John’s, for instance, is the official sponsor of the official March Madness bracket, the schematic that traces who wins or loses at each level of elimination, on Facebook. Arby’s announced a sandwich giveaway that kicks in only if one of the lesser-ranked NCAA contestants should beat a top seed in the first round of games.
Taco Bell has one of the stronger connections. The Taco Bell Arena in Boise, Idaho, is hosting the first series of games.
Raising Cane’s, the chicken-finger specialist, is using the NCAA Tournament as a touchstone for its first-ever targeted marketing campaign. The effort plays off dunking—in its case, the type that involves sauce and chicken-finger-dipping. Fans who want a quick party meal are encouraged to take home one of the 80-unit chain’s Tailgate ready-to-serve platters.
The chains try to connect their brand name to the high-profile tourney. But countless independents and small multi-units use the event as a direct source of business, encouraging fans to watch the games in their booths and bar stools. The Berghoff, a landmark restaurant in Chicago, will be offering $3 “Bar Bites,” free raffle tickets, and beer and bourbon tastings between 2 and 7 p.m. everyday for the next 16 days.
Restaurants in Annapolis, Md., are joining forces in a March Madness-meets-Restaurant-Week sort of promotion, which in turn is tied into a larger sales push by the Annapolis Business Association. For a three-day stretch starting March 27, local merchants will conduct a sidewalk clearance sale, while their foodservice colleagues offer food and drink specials. The intent is to pull residents downtown, where one spouse can shop while the other warms a bar stool, yells at the TV screen, and has a beer.
With the increased reliance on March Madness as a key promotional opportunity has come stepped-up risk as well. Buffalo Wild Wings has warned investors when Ohio State was eliminated early from the tournament. The chain’s units in Ohio are popular places to watch the Buckeyes, and if they’re out of it, who cares how Michigan State might be doing? The fans stay home. (OSU is ranked third in its division this year.)
The rules of promotion are also being formalized. Establishments in Kansas City are reportedly being warned of a crackdown by NCAA enforcers on the unlicensed use of the athletic association’s patented trademarks, including March Madness, the Sweet Sixteen and Elite Eight.
It's not exactly a key concern for my alma mater, New York University. Once again our team, the fierce-sounding Violets, have yet to be invited to the dance.
The tournament begins Thursday.
Far, far more are restaurant staffs braced for what was once merely the NCAA playoffs, the rapid-fire series of elimination games that determines the nation’s best college basketball team. Today, the multi-week stretch clearly reigns along with Valentine’s Day, Mother’s Day and New Year’s Eve as one of the restaurant industry’s biggest promotional opportunities.
The big chains try to squeeze traffic out of the contest through tie-ins that extend far beyond traditional advertising. Papa John’s, for instance, is the official sponsor of the official March Madness bracket, the schematic that traces who wins or loses at each level of elimination, on Facebook. Arby’s announced a sandwich giveaway that kicks in only if one of the lesser-ranked NCAA contestants should beat a top seed in the first round of games.
Taco Bell has one of the stronger connections. The Taco Bell Arena in Boise, Idaho, is hosting the first series of games.
Raising Cane’s, the chicken-finger specialist, is using the NCAA Tournament as a touchstone for its first-ever targeted marketing campaign. The effort plays off dunking—in its case, the type that involves sauce and chicken-finger-dipping. Fans who want a quick party meal are encouraged to take home one of the 80-unit chain’s Tailgate ready-to-serve platters.
The chains try to connect their brand name to the high-profile tourney. But countless independents and small multi-units use the event as a direct source of business, encouraging fans to watch the games in their booths and bar stools. The Berghoff, a landmark restaurant in Chicago, will be offering $3 “Bar Bites,” free raffle tickets, and beer and bourbon tastings between 2 and 7 p.m. everyday for the next 16 days.
Restaurants in Annapolis, Md., are joining forces in a March Madness-meets-Restaurant-Week sort of promotion, which in turn is tied into a larger sales push by the Annapolis Business Association. For a three-day stretch starting March 27, local merchants will conduct a sidewalk clearance sale, while their foodservice colleagues offer food and drink specials. The intent is to pull residents downtown, where one spouse can shop while the other warms a bar stool, yells at the TV screen, and has a beer.
With the increased reliance on March Madness as a key promotional opportunity has come stepped-up risk as well. Buffalo Wild Wings has warned investors when Ohio State was eliminated early from the tournament. The chain’s units in Ohio are popular places to watch the Buckeyes, and if they’re out of it, who cares how Michigan State might be doing? The fans stay home. (OSU is ranked third in its division this year.)
The rules of promotion are also being formalized. Establishments in Kansas City are reportedly being warned of a crackdown by NCAA enforcers on the unlicensed use of the athletic association’s patented trademarks, including March Madness, the Sweet Sixteen and Elite Eight.
It's not exactly a key concern for my alma mater, New York University. Once again our team, the fierce-sounding Violets, have yet to be invited to the dance.
The tournament begins Thursday.
Thursday, March 12, 2009
Diet group vows to go gut-to-gut with fast food
An advocacy group called Corporate Accountability International sent letters today to the Big Four U.S. fast-food companies, basically telling them, “You’re mine, bitch.” As a simultaneous press announcement explained, the group is commencing a war to secure such concessions as having McDonald’s, Burger King, Wendy’s/Arby’s and Yum! Brands pick up the health-care expenses for diet-related illnesses.
The Boston-based organization has targeted those companies and their nine chains, but its mission extends to the whole fast-food sector. For instance, it wants to stop fast-food advertising and promotions aimed at minors. It’s also calling on the business to “not interfere” in efforts to ban or limit fast-food sales.
“The campaign aims to stem the global tide of diet-related disease, in which fast food giants are playing a central role,” states the press release.
The 32-year-old CAI claims it’s been successful in curbing past abuses by corporate giants (and foodservice industry vendors) like Nestle and General Electric. Tobacco and bottled water, a major product line of Nestle, seem like particular areas of pressure.
The text of the letters was not disclosed, so it’s unclear if the tone was cordial, demanding or out-and-out threatening. I’m putting my money on the latter. Check out the group’s special industry-related website to find out why.
The Boston-based organization has targeted those companies and their nine chains, but its mission extends to the whole fast-food sector. For instance, it wants to stop fast-food advertising and promotions aimed at minors. It’s also calling on the business to “not interfere” in efforts to ban or limit fast-food sales.
“The campaign aims to stem the global tide of diet-related disease, in which fast food giants are playing a central role,” states the press release.
The 32-year-old CAI claims it’s been successful in curbing past abuses by corporate giants (and foodservice industry vendors) like Nestle and General Electric. Tobacco and bottled water, a major product line of Nestle, seem like particular areas of pressure.
The text of the letters was not disclosed, so it’s unclear if the tone was cordial, demanding or out-and-out threatening. I’m putting my money on the latter. Check out the group’s special industry-related website to find out why.
Tuesday, March 10, 2009
8 restaurant cos. put on Moody's 'death watch'
Eight restaurant companies, including the parents of Outback Steakhouse and Arby’s, have been included on a list of companies rated by Moody's as the most likely to default on their debts.
In addition to OSI Restaurant Partners and Arby’s Restaurant Group, presumably a predecessor of what’s now Wendy’s/Arby’s Restaurant Group, the 283-company list includes El Pollo Loco Inc.; Perkins & Marie Callender’s Inc.; Chevys and El Torito parent Real Mex Restaurants; and Sagittarius Retaurants Inc., apparently an affiliate of Del Taco and Captain D’s parent Sagittarius Brands.
The roster also lists a company called Rare Restaurant Group LLC, identified as being in the fast-food business, which suggests it is not connected with Rare Hospitality, the steakhouse operator that’s now part of Darden Restaurants.
The list has been posted in its entirety by the financial website SeekingAlpha.com.
Moody’s calls the list The Bottom Rung, but media reports have opted for more colorful slugs, including "company dead pool"; "dead companies walking"; and "the death watch."
Most also note the credibility of Moody’s Investors Service has been called into question by its failure to anticipate the meltdown in mortgage-backed investments. The catastrophic collapse was not foreshadowed by the risk ratings of Moody’s or the two other major financial rating services.
Moody’s is quoted as saying about 45% of the Bottom Rung concerns will default on their debts during the next year. One list-ee, Eastman Kodak, has already blasted the report as “irresponsible” and inaccurate.
In addition to OSI Restaurant Partners and Arby’s Restaurant Group, presumably a predecessor of what’s now Wendy’s/Arby’s Restaurant Group, the 283-company list includes El Pollo Loco Inc.; Perkins & Marie Callender’s Inc.; Chevys and El Torito parent Real Mex Restaurants; and Sagittarius Retaurants Inc., apparently an affiliate of Del Taco and Captain D’s parent Sagittarius Brands.
The roster also lists a company called Rare Restaurant Group LLC, identified as being in the fast-food business, which suggests it is not connected with Rare Hospitality, the steakhouse operator that’s now part of Darden Restaurants.
The list has been posted in its entirety by the financial website SeekingAlpha.com.
Moody’s calls the list The Bottom Rung, but media reports have opted for more colorful slugs, including "company dead pool"; "dead companies walking"; and "the death watch."
Most also note the credibility of Moody’s Investors Service has been called into question by its failure to anticipate the meltdown in mortgage-backed investments. The catastrophic collapse was not foreshadowed by the risk ratings of Moody’s or the two other major financial rating services.
Moody’s is quoted as saying about 45% of the Bottom Rung concerns will default on their debts during the next year. One list-ee, Eastman Kodak, has already blasted the report as “irresponsible” and inaccurate.
Tuesday, March 3, 2009
Arby's tries a Jan Brady strategy
Who would’ve picked Wendy’s as the better performer for its new parent? Yet the burger chain clearly left its sister, the Arby’s sandwich concept, getting cold under the heat lamps at the end of 2008.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.
Monday, February 23, 2009
Arby's lifts domed lid off Roastburger
The newest addition to Arby's sandwich line-up was unveiled today on the chain's website. It turns out that "the burger done better" is no burger at all. Rather, the Roastburger is a sandwich of thinly sliced roast beef, lettuce and tomato on a ciabatta-style split roll. Alternatives to the core All-American variety feature bacon and cheddar cheese or bacon and a bleu cheese dressing.
The premium item is being positioned as an alternative to burgers, not as a better version of one, as an earlier post here had suggested. The descriptive copy stresses that the sandwich's main ingredient is roast beef, not some fried and greasy meat. The inclusion of bacon is sort of glossed over.
Several mom-focused websites were buzzing today because Arby's is apparently giving away coupons for a free Roastburgers to consumers who sign up for its Arby's Extras loyalty program.
Arby's hadn't revealed as of this posting the suggested retail price of the Roastburger.
The premium item is being positioned as an alternative to burgers, not as a better version of one, as an earlier post here had suggested. The descriptive copy stresses that the sandwich's main ingredient is roast beef, not some fried and greasy meat. The inclusion of bacon is sort of glossed over.
Several mom-focused websites were buzzing today because Arby's is apparently giving away coupons for a free Roastburgers to consumers who sign up for its Arby's Extras loyalty program.
Arby's hadn't revealed as of this posting the suggested retail price of the Roastburger.
Monday, February 16, 2009
Arby's burger isn't available, but merchandise is
Arby's isn't expected to roll out its entry in the burger market, the Roastburger, until March. But some entrepreneur apparently got his or her hands on some of the promotional materials a little early. For sale on eBay are tee shirts emblazoned with the announcement, "New! Roastburgers are here," emblazoned above an Arby's logo. They're selling for $22.77.
The back of the shirts carries the boast, "the burger done better."
The rollout of the Roastburger, Arby's foray into the prime market of sister brand Wendy's, hasn't exactly followed the usual steps. Free samples of a product bearing the Roastburger name were provided free to anyone who voted last November, a giveaway widely reported on the internet. A highly publicized commercial depicts a unit being warned via a frozen burger patty hurled through the plate glass window to "stop making the new Arby's Roastburger--or else." "The competition's nervous," remarks the voice-over.
And, perhaps most famously, the chain teased the Roastburger earlier this month by running a provocative full-page ad in Sports Illustrated's annual swimsuit issue. The spot has generated considerable buzz on the web.
Part of the unusualness is the product's name, which apparently was recycled from an earlier item. All the indications suggest the Roastburger will indeed be a new hamburger. But the same I.D. was apparently used in the past for an Arby's sandwich made with thinly sliced roast beef. It was touted as an alternative to the hamburger.
Then, of course, there's the matter of family complications. The Roastburger ad suggests the new item may be made with fresh rather than frozen beef, a signature of the Wendy's concept since its inception.
There must've been some interesting boardroom discussions down in the headquarters of their parent, Wendy's/Arby's Group.
The back of the shirts carries the boast, "the burger done better."
The rollout of the Roastburger, Arby's foray into the prime market of sister brand Wendy's, hasn't exactly followed the usual steps. Free samples of a product bearing the Roastburger name were provided free to anyone who voted last November, a giveaway widely reported on the internet. A highly publicized commercial depicts a unit being warned via a frozen burger patty hurled through the plate glass window to "stop making the new Arby's Roastburger--or else." "The competition's nervous," remarks the voice-over.
And, perhaps most famously, the chain teased the Roastburger earlier this month by running a provocative full-page ad in Sports Illustrated's annual swimsuit issue. The spot has generated considerable buzz on the web.
Part of the unusualness is the product's name, which apparently was recycled from an earlier item. All the indications suggest the Roastburger will indeed be a new hamburger. But the same I.D. was apparently used in the past for an Arby's sandwich made with thinly sliced roast beef. It was touted as an alternative to the hamburger.
Then, of course, there's the matter of family complications. The Roastburger ad suggests the new item may be made with fresh rather than frozen beef, a signature of the Wendy's concept since its inception.
There must've been some interesting boardroom discussions down in the headquarters of their parent, Wendy's/Arby's Group.
Wednesday, February 11, 2009
Arby's new swimsuit issue ad
Darren Rovell of CNBC spotted this ad from Arby's in the new edition of Sports Illustrated's annual swimsuit issue:
It's a teaser for a new "Roastburger." The copy suggests it'll be a premium choice, but provides no details as to what precisely differentiates it, or what it might cost. The headline taunts, "We're about to reveal something you'll really drool over."
Rovell confesses that he read the whole ad.
It's a teaser for a new "Roastburger." The copy suggests it'll be a premium choice, but provides no details as to what precisely differentiates it, or what it might cost. The headline taunts, "We're about to reveal something you'll really drool over."
Rovell confesses that he read the whole ad.
Friday, January 16, 2009
Another super-sized franchsee goes bankrupt
A reader of my blog on the Fohboh social networking site pointed out another major restaurant bankruptcy that came to light earlier this week. John Gantes, head of the 110-unit Breckenridge Group, a multi-concept franchisee in southern California, reportedly filed for personal bankruptcy in late 2008 and is now trying to reorganize his sprawling operations.
Breckenridge is a franchisee of El Pollo Loco, Famous Dave's, Johnny Carino's, Burger King, Applebee's, Bruegger's, Ruby's Diner and Arby's, according to the Orange County Register.
The OCR story sites court documents indicating that Gantes owes $280 million.
The week also brought an acknowledgement from Domino's that nine of its franchisees had gone bankrupt, and a Ch. 11 filing by the parent of the Black Angus steakhouse chain.
Breckenridge is a franchisee of El Pollo Loco, Famous Dave's, Johnny Carino's, Burger King, Applebee's, Bruegger's, Ruby's Diner and Arby's, according to the Orange County Register.
The OCR story sites court documents indicating that Gantes owes $280 million.
The week also brought an acknowledgement from Domino's that nine of its franchisees had gone bankrupt, and a Ch. 11 filing by the parent of the Black Angus steakhouse chain.
Tuesday, December 23, 2008
More (sea) changes at the top
This morning brought the news that Greg Burns, a leader of the O’Charley’s dinnerhouse chain for 25 years, will step down early next year as CEO and chairman. It’s the latest indication that a changing of the guard is quietly taking place in the restaurant industry as executives who spent a lifetime in the business surrender the helm to newer and presumably more mainstream talent.
O’Charley’s said it hasn’t yet chosen Burns’ successor. But look at some of the replacements that have been named for exiting long-timers. Nigel Travis is stepping into the CEO’s job at Dunkin’ Donuts’ parent company with deep experience in internet sales, international business and retail marketing. The internet wasn’t even known when the standout he’s succeeding, Jon Luther, was starting his career.
Wendy’s had a long tradition of putting operational specialists in the corner office, starting with Dave Thomas, continuing through the legendary Jim Near and the highly respected Gordon Teeter, and then ending with Jack Schussler. Leading the company since its acquisition by Arby’s owner is Roland Smith, a veteran of the golf, bowling, soft drink and pharmaceutical industries. He’s a West Point grad.
Not all of the long-timers exiting top posts are being followed by newcomers with such extensive resumes. Dick Frank, for example, is surrendering his leadership of Chuck E. Cheese to Mike Magusiak, a protégée and longtime exec of the pizza-and-games chain. But Magusiak has a background in finance, having served as CFO. Frank was hailed for his operational and marketing know-how.
And not all the replacements have been named yet. Big Boy, for instance, said it’s still searching for a replacement for Tony Michaels, its longtime leader and an even longer-time veteran of the restaurant industry, including stints with Marriott.
The list of other industry greybeards to step down in recent months include Russ Owens, the casual-dining vet who had been leading P.F. Chang’s Pei Wei Asian Diner fast-casual operation; and Paul Motenko and Jerry Hennessey, the co-founders of BJ’s, who have left the board of that seemingly recession-resistant frontrunner to rev up for a new venture.
I’d be remiss if I didn’t note the counter-current of long-timers getting back into the business. Yesterday, for instance, the new owners of Romano’s Macaroni Grill released the stunning news that the chain would now be led by Olive Garden vet Brad Blum, a brilliant move on the buyer’s part. And Ned Lidvall, perhaps best known for his leadership of Rock Bottom Breweries, will now be leading Friendly’s.
O’Charley’s said it hasn’t yet chosen Burns’ successor. But look at some of the replacements that have been named for exiting long-timers. Nigel Travis is stepping into the CEO’s job at Dunkin’ Donuts’ parent company with deep experience in internet sales, international business and retail marketing. The internet wasn’t even known when the standout he’s succeeding, Jon Luther, was starting his career.
Wendy’s had a long tradition of putting operational specialists in the corner office, starting with Dave Thomas, continuing through the legendary Jim Near and the highly respected Gordon Teeter, and then ending with Jack Schussler. Leading the company since its acquisition by Arby’s owner is Roland Smith, a veteran of the golf, bowling, soft drink and pharmaceutical industries. He’s a West Point grad.
Not all of the long-timers exiting top posts are being followed by newcomers with such extensive resumes. Dick Frank, for example, is surrendering his leadership of Chuck E. Cheese to Mike Magusiak, a protégée and longtime exec of the pizza-and-games chain. But Magusiak has a background in finance, having served as CFO. Frank was hailed for his operational and marketing know-how.
And not all the replacements have been named yet. Big Boy, for instance, said it’s still searching for a replacement for Tony Michaels, its longtime leader and an even longer-time veteran of the restaurant industry, including stints with Marriott.
The list of other industry greybeards to step down in recent months include Russ Owens, the casual-dining vet who had been leading P.F. Chang’s Pei Wei Asian Diner fast-casual operation; and Paul Motenko and Jerry Hennessey, the co-founders of BJ’s, who have left the board of that seemingly recession-resistant frontrunner to rev up for a new venture.
I’d be remiss if I didn’t note the counter-current of long-timers getting back into the business. Yesterday, for instance, the new owners of Romano’s Macaroni Grill released the stunning news that the chain would now be led by Olive Garden vet Brad Blum, a brilliant move on the buyer’s part. And Ned Lidvall, perhaps best known for his leadership of Rock Bottom Breweries, will now be leading Friendly’s.
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