Because of Twitter, you can get a heads-up on restaurant developments long before they’re covered in the traditional sources of industry news. But the story behind the news story is a different matter. Consider, for instance, these little-noticed wrinkles in two heavily covered recent events.
Danny Meyer is selling splinters of his empire. The famed restaurateur drew tremendous coverage (including here) when he disclosed in a cookbook that he had agreed to sell his Eleven Madison Park to the starched outpost’s manager and executive chef. Less noticed was the bombshell that he’d served up another piece of his business, this time to the company led by the owner of the Miami Dolphins, Stephen Ross.
Ross’ Related Cos., perhaps best known as the developer of New York’s chi-chi Time Warner Center, acquired an undisclosed stake in Meyer’s Union Square Events catering and restaurant-management operation for an amount that wasn’t revealed. The purpose is to pair the two companies’ expertise in developing real estate complexes worldwide, but the process is starting with the partners’ backyard.
They’ve announced that they’ll be part of the 26-acre Hudson Yards project in New York, a venture that aims to turn the old train tracks and industrial space on Manhattan’s Far West Side into a new hub of consumer activity. Few details have been revealed about the foodservice aspect, but Meyer isn’t known for peddling the same ol’ same-old.
Taco Bell redefines who’s a competitor. No, this has nothing to do with the much-covered Cantina Bell menu, which has been identified in virtually every news story as the Mexican giant’s response to Chipotle’s success. I’m talking about the new breakfast menu, a.k.a. the First Meal bill of fare, which is studded with names that vie with Taco Bell for share of stomach and franchisees.
The roster includes a pastry item from Cinnabon, Focus Group’s bakery chain, and coffee from Starbucks branded as Seattle’s Best (curiously, a former sister of Cinnabon). You can find those brand names in a number of locations beyond their namesake stores. Seattle’s Best, for instance, is also available in Burger Kings, Subways and plenty of other foodservice outlets.
There’s even a Seattle’s Best coffee flavored with Cinnabon-brand cinnamon. Clearly licensing has become a big business for each.
But each still has a sizeable network of its own retail outlets. At one time, the industry would’ve clutched its chest at such brand-name mixing. Certainly franchisees would have. Then they would’ve dialed their lawyers.
It’s part of a new wave of cross-branding—led at least in part by franchisees. A Burger King franchisee, for instance, is serving as the test partner for a new collaboration with Friendly’s. The ice cream chain hopes to open at least 10 downsized Friendly’s Scoop fast-casual-style outlets this year. The first is co-branded with a Burger King store run by New Jersey franchisee.
Bet you might’ve missed that angle in all the coverage of Friendly's comeback efforts.
Showing posts with label restaurant franchisees. Show all posts
Showing posts with label restaurant franchisees. Show all posts
Friday, January 27, 2012
Sunday, March 20, 2011
Creepers and sleepers
Sometimes a shift in the business environment takes awhile to build. It seems to hit all at once, when in fact the pressure has been mounting for weeks or months.
So it is with several developments currently taking shape in the restaurant business. Consider these sleepers, for instance:
Watch for a spike in uniform and linen-service prices. The cost of raw cotton increased 136% between last August and February 2011. Most restaurant uniforms are made from tougher-wearing materials like polyester or poly-cotton blends. But soaring cotton costs could ratchet up demand for the synthetics, driving up those costs as well. Cotton figures more regularly into restaurant tablecloths and linens, particularly fine ones. Services may soon be paying more for tablecloths and napkins, with at least some of the cost possibly passed along.
Look for more investment interest in franchisees. One of Taco Bell’s largest franchisees, the 166-store K-Mac, recently moved from one private-equity firm to another. The price wasn’t disclosed, but the seller, Olympus Partners, disclosed that it collected eight times what it originally paid for the company, which also operates Golden Corrals. Investors are realizing that a brand’s owner may not provide the best cash flow after all. At the same time, there’s pent-up desire on the part of many franchisees to sell. Tough times made them want to cash in and move on, but business conditions prevented them from getting a reasonable price. That’s changed. And investors who’ve already shopped the franchisors are finding a whole new store aisle to peruse.
Green mandates could be the next industry bane. South Carolina restaurants, for instance, are bracing for a rise in hauling fees because the state wants to require recycling by any establishment with a bar license. The South Carolina Restaurant Association has estimated the increase at $800 to $4,000 per restaurant. But the state is hardly the only jurisdiction to be eying green obligations for eateries. California is widely expected to require composting, following the lead of San Francisco, and water-consumption limits have already been leveled from time to time when areas see their reservoirs dip. Those rare situations could become far more common as suburban sprawl taxes limited supplies.
QR codes may be The Next Big Thing in restaurant technology. If you don’t know what they are, think of supermarket bar codes that impart key marketing info about your operation. Consumers with a smart phone in essence take a picture of the codes, which look like a section cut out of a composition book’s cardboard cover. The pattern is actually a code that the phone reads with an app, which often comes pre-loaded as a freebie (iPhone and Droid users can download one for free). The process can call up a ton of info in just a few seconds. For instance, a code posted in a window could inform passers-by of the night’s specials, instantly and effortlessly. Or, if the restaurant prefers, reading the code could call up the place’s page on Yelp or Open Table. It’s a cinch to turn info into a QR code using a free program, and the info you can load is daunting. The tool makes tremendous sense for restaurants, though they’ve been slow to adopt the technology in the United States.
So it is with several developments currently taking shape in the restaurant business. Consider these sleepers, for instance:
Watch for a spike in uniform and linen-service prices. The cost of raw cotton increased 136% between last August and February 2011. Most restaurant uniforms are made from tougher-wearing materials like polyester or poly-cotton blends. But soaring cotton costs could ratchet up demand for the synthetics, driving up those costs as well. Cotton figures more regularly into restaurant tablecloths and linens, particularly fine ones. Services may soon be paying more for tablecloths and napkins, with at least some of the cost possibly passed along.
Look for more investment interest in franchisees. One of Taco Bell’s largest franchisees, the 166-store K-Mac, recently moved from one private-equity firm to another. The price wasn’t disclosed, but the seller, Olympus Partners, disclosed that it collected eight times what it originally paid for the company, which also operates Golden Corrals. Investors are realizing that a brand’s owner may not provide the best cash flow after all. At the same time, there’s pent-up desire on the part of many franchisees to sell. Tough times made them want to cash in and move on, but business conditions prevented them from getting a reasonable price. That’s changed. And investors who’ve already shopped the franchisors are finding a whole new store aisle to peruse.
Green mandates could be the next industry bane. South Carolina restaurants, for instance, are bracing for a rise in hauling fees because the state wants to require recycling by any establishment with a bar license. The South Carolina Restaurant Association has estimated the increase at $800 to $4,000 per restaurant. But the state is hardly the only jurisdiction to be eying green obligations for eateries. California is widely expected to require composting, following the lead of San Francisco, and water-consumption limits have already been leveled from time to time when areas see their reservoirs dip. Those rare situations could become far more common as suburban sprawl taxes limited supplies.
QR codes may be The Next Big Thing in restaurant technology. If you don’t know what they are, think of supermarket bar codes that impart key marketing info about your operation. Consumers with a smart phone in essence take a picture of the codes, which look like a section cut out of a composition book’s cardboard cover. The pattern is actually a code that the phone reads with an app, which often comes pre-loaded as a freebie (iPhone and Droid users can download one for free). The process can call up a ton of info in just a few seconds. For instance, a code posted in a window could inform passers-by of the night’s specials, instantly and effortlessly. Or, if the restaurant prefers, reading the code could call up the place’s page on Yelp or Open Table. It’s a cinch to turn info into a QR code using a free program, and the info you can load is daunting. The tool makes tremendous sense for restaurants, though they’ve been slow to adopt the technology in the United States.
Subscribe to:
Posts (Atom)
Posts
