A confused figment of my imagination writes, “Hey, Restaurant Reality Check, how am I supposed to tell fact from fiction in the age of The Onion, the Borowitz Report and KFC’s publicity department? Some of their made-up restaurant stories sound more believable than the real thing. How can a non-cynic know when he’s being fed a whopper?” (signed, Believing It—Or Not?)
Dear Believing,
I was discussing the very thing yesterday with Henry Kissinger and the Fonz. You just can’t tell these days who’s pulling your leg and who’s merely covering the Republican presidential candidates.
Fortunately for you and your confused peers, Restaurant Reality Check can recount how a few persistent myths were disproved, decidedly, by recent industry developments.
Wall Street firms have a hammerlock on executive compensation outrages. A Friendly source—note the capital “F”—blew that one away. In case you missed reports in mainstream media like The Wall Street Journal and The Huffington Post, the restaurant industry has its own instance of a CEO enjoying big-dollar privileges while the corporate rank-and-file burn their pink slips for warmth.
According to the reports, Friendly’s CEO Harsha Agadi billed the company for $234,000 in day-to-day expenses in the year preceding the restaurant franchisor’s recent bankruptcy filing. The charges didn’t include the $190,000 Agadi submitted for relocation.
The contrast with the plight of Friendly’s workers is what made the story a hot one. More than 600 lost their jobs when some 60 stores closed.
We can also refute at this time that the Fribble lobby has secured a federal bailout for the family chain.
E-mail is killing letter writing. Not in the restaurant business. Hundreds of stationers could pop for a second home this year because of the business they’re reaping from disgruntled shareholders and the chains they’ve targeted for takeover.
This morning, for instance, Cracker Barrel shareholders were sent a letter from CEO Sandy Cochran, spelling out why they should rebuff Sardar Biglari in his attempts to wrest control of the family chain from current management. She countered Biglari’s assertions by explaining the chain’s business-building strategies, point by point.
The communication was in response to an 11-page letter that Biglari sent last week to the same recipients. Taken together, the two missives might have made Cracker Barrel’s shareholders the most informed in the business.
But that’s not the only volley of letters helping the Postal Service. Cosi and Brad Blum, the Olive Garden alumnus who wants to run the fast-casual chain, have stamp dispensers churning as well.
Ditto for the CEO-turned-advisor of Wendy’s, Roland Smith. Recent SEC filings include Smith’s resignation letter, which in turn referenced other missives during the summer. The communications indicate that Smith stepped down because he didn’t want to leave Atlanta, where the chain is currently headquartered. It’s moving back to the suburb of Columbus, Ohio, where it was founded.
Smith has been succeeded as CEO by Emil Brolick, who’s collecting $1.1 million in salary, with the opportunity to earn another $1.6 as a bonus. Smith was in the same ballpark.
Survival has supplanted concept development. According to the conventional wisdom, restaurant companies are too preoccupied with survival to consider the development of new concepts.
Not any more.
The last two weeks brought announcements of new concepts from such celebrated operators as Starbucks (Evolution Fresh Juices), P.F. Chang’s (Pei Wei Asian Market, which of course has nothing to do with Chipotle’s launch of ShopHouse Southeast Asian Market), IHOP (IHOP Express) and Jamba Juice (JambaGo, the juice chain’s riff on an express format).
Okay, enough myth busting for now. In our next installment, we’ll take on Yeti and the promises of restaurant unions.
Showing posts with label Brad Blum. Show all posts
Showing posts with label Brad Blum. Show all posts
Monday, November 21, 2011
Monday, September 19, 2011
'They keep pulling me back'
What is it about the restaurant industry that keeps pulling people back into the fray? In recent weeks we’ve had three more examples of grizzled vets who’ve made enough money to fund a life of leisure. But instead of spending their remaining days on a racetrack or golf course, they’re looking for a new restaurant concept to hatch or grow.
Consider, for instance, Brad Blum’s newfound interest in Cosi, the upscale sandwich concept. Blum rose to prominence as the cappo of Olive Garden, which was wheezing a bit when he took it over. He righted it and then moved on to Burger King, where a sale of the company did him no good. Most recently, he headed Romano’s Macaroni Grill, seemingly a natural fit after his stewardship of Olive Garden.
Last week Blum alerted the SEC that he’d amassed a 6.75% stake in Cosi. “As of Sept. 6, 2011, Blum Growth LLC is now an active investor,” Blum said through his investment concern.
The filing notes that Blum wants a say on the composition and top management of Cosi (its former CEO, Jim Hyatt, just resigned). I’m going to go out on a limb here and predict that Blum wants a role in each governing body.
But he’s not the only vet who’s reactivated himself for a new restaurant challenge. Craig Nickoloff sold the high-volume Claim Jumper casual chain to the private equity company Leonard Green & Partners in 2005 for a reported $200 million. The amount seemed fitting for a concept that took the California gold rush as its theme.
Just to add a little icing to the case: Claim Jumper filed for bankruptcy a year ago.
Nickoloff could be kicking back with the wife he met while she was covering him and Claim Jumper for Nation’s Restaurant News, a distinction that made her a legend among those of us who write about the business (I’ve finally relinquished my dreams of a Rachel Rae Romeo, primarily because my current wife insisted.)
Instead, Nickoloff has teamed up with acclaimed West Coast chef Michael Cimarusti (of Providence restaurant) to buy Silver Spoon, described by Eater Los Angeles as “West Hollywood’s ancient coffee shop.” The pair hasn’t revealed its intentions for the space, but official filings say the location will do business as Connie and Ted’s.
Watchers are wondering if the venture might also involve Nickoloff’s son, Nick, who owns and operates three namesake restaurants.
Meanwhile, Ohio’s Cameron Mitchell is putting the finishing touches on his eighth Ocean Prime upscale “supper club,” in the Buckhead area of Atlanta. Two more branches are under development, according to Mitchell’s Columbus-based company.
The chain building comes just four years after Mitchell sold an earlier seafood chain, 19-unit Mitchell’s Fish Market, to Ruth’s Chris as part of a $94-million deal (two steakhouses were also part of the purchase).
To call Mitchell irrepressible is an understatement. I met him when he was sleeping on the floor of a co-worker’s hotel room so he could afford to attend an industry event. He was determined to open a restaurant concept of his own and wanted to learn everything he could.
Seems that desire has only grown stronger.
Consider, for instance, Brad Blum’s newfound interest in Cosi, the upscale sandwich concept. Blum rose to prominence as the cappo of Olive Garden, which was wheezing a bit when he took it over. He righted it and then moved on to Burger King, where a sale of the company did him no good. Most recently, he headed Romano’s Macaroni Grill, seemingly a natural fit after his stewardship of Olive Garden.
Last week Blum alerted the SEC that he’d amassed a 6.75% stake in Cosi. “As of Sept. 6, 2011, Blum Growth LLC is now an active investor,” Blum said through his investment concern.
The filing notes that Blum wants a say on the composition and top management of Cosi (its former CEO, Jim Hyatt, just resigned). I’m going to go out on a limb here and predict that Blum wants a role in each governing body.
But he’s not the only vet who’s reactivated himself for a new restaurant challenge. Craig Nickoloff sold the high-volume Claim Jumper casual chain to the private equity company Leonard Green & Partners in 2005 for a reported $200 million. The amount seemed fitting for a concept that took the California gold rush as its theme.
Just to add a little icing to the case: Claim Jumper filed for bankruptcy a year ago.
Nickoloff could be kicking back with the wife he met while she was covering him and Claim Jumper for Nation’s Restaurant News, a distinction that made her a legend among those of us who write about the business (I’ve finally relinquished my dreams of a Rachel Rae Romeo, primarily because my current wife insisted.)
Instead, Nickoloff has teamed up with acclaimed West Coast chef Michael Cimarusti (of Providence restaurant) to buy Silver Spoon, described by Eater Los Angeles as “West Hollywood’s ancient coffee shop.” The pair hasn’t revealed its intentions for the space, but official filings say the location will do business as Connie and Ted’s.
Watchers are wondering if the venture might also involve Nickoloff’s son, Nick, who owns and operates three namesake restaurants.
Meanwhile, Ohio’s Cameron Mitchell is putting the finishing touches on his eighth Ocean Prime upscale “supper club,” in the Buckhead area of Atlanta. Two more branches are under development, according to Mitchell’s Columbus-based company.
The chain building comes just four years after Mitchell sold an earlier seafood chain, 19-unit Mitchell’s Fish Market, to Ruth’s Chris as part of a $94-million deal (two steakhouses were also part of the purchase).
To call Mitchell irrepressible is an understatement. I met him when he was sleeping on the floor of a co-worker’s hotel room so he could afford to attend an industry event. He was determined to open a restaurant concept of his own and wanted to learn everything he could.
Seems that desire has only grown stronger.
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