Archive for October, 2013

Applebee’s Franchisee to Sell 80 Restaurants

Tuesday, October 22nd, 2013

Franchise operator Thomas & King Inc. has agreed to sell its 80 Applebee’s restaurants in Kentucky and Arizona to franchisee RMH Franchise Corp. in a deal expected to close before the end of the year.

Terms of the deal were not disclosed.

The agreement will more than double the number of Applebee’s Grill & Bar locations operated by Lincoln, Neb.-based RMH, which currently has 60 of the casual-dining restaurants in 10 states. Once the deal is completed, RMH, with 140 units, is expected to be the second-largest Applebee’s operator, after San Francisco-based Apple American, which has about 442 units.

“RMH is a very professional and highly regarded franchisee of Applebee’s, and will bring energy, expertise and a passion for our restaurants that will continue our 25 years of success in the business. I am especially pleased that RMH will retain many of our current home office employees. I am confident that RMH will continue to be a leader in our industry,” Mike Scanlon, chief executive of Thomas & King, said in a statement.

RMH has indicated that it intends to hire many of the employees working in the Thomas & King corporate office in Lexington, Ky., though some employees will remain with Thomas & King, which also operates Johnny Carino’s Italian restaurants.

Jeff Neumann, chief executive of RMH Franchise Holdings, said, “Thomas & King shares many of RMH’s core values, including commitment to excellence and superior customer service. Customers of the restaurants we are acquiring will continue to enjoy the exceptional dining experience at Applebee’s that they do currently. We are excited to be growing our portfolio of restaurants and look forward to continued success.”

RMH acquired its first group of 45 Applebee’s restaurants in nine states in December 2012, with an equity investment from Acon Investments for the acquisition of Concord Neighborhood Corp. In June, RMH added another 15 Applebee’s locations in the Chicago area, according to the company’s website.

McDonald’s to Roll Out Dollar Menu & More Nationwide

Tuesday, October 22nd, 2013

McDonald’s Corp. officials said the dining out environment around the world would remain “challenged” in the fourth quarter and require compelling value platforms, including the national rollout of the Dollar Menu & More in the United States.

A spokeswoman for the Oak Brook, Ill.-based company confirmed that all of McDonald’s more than 14,000 restaurants in the United States would replace the Dollar Menu with the Dollar Menu & More offering Nov. 4. National advertising for the platform begins Nov. 11.

The expanded, tiered value menu, which was tested in five markets this year, will offer $1 items from the Dollar Menu, as well as sandwiches at prices around $2 and shareable items around a $5 price point.

“This is one of the ways that we can maintain the Dollar Menu in the face of rising commodity and labor pressures, but also get a little more margin basis on some of the products at $2 and some of the products at higher price points,” chief executive Don Thompson said during McDonald’s third-quarter earnings call. “The franchisees support this.”

The introduction will follow a third quarter in which same-store sales rose only 0.7 percent in the United States, when McDonald’s tried to build sales of new core offerings by moving the Monopoly game up into July and putting a major national ad campaign behind the Mighty Wings limited-time offer. However, Thompson said, while those initiatives performed within expectations, they did not offset traffic weakened by lower consumer confidence and a drag on discretionary spending.

According to a research note from securities analyst Andy Barish of Jefferies, same-store sales in the United States dipped 0.1 percent for McDonald’s, and comparable sales are tracking flat for the month of October.

The stagnant informal-eating-out market is not expected to improve in the fourth quarter in the United States, Thompson said, making the rollout of Dollar Menu & More even more important.

“It does keep a base of customers,” he said. “While it only represents 13 percent to 15 percent of sales, you’ve got about a third of the customers that will leverage that Dollar Menu in some form or fashion. It is a strong part of the base.”

McDonald’s would continue to weave in new-product news for core items and premium limited-time offers, like Mighty Wings or the Southwest Chicken Premium McWrap.

“Those limited-time offers … help not only with margin, but they help with the excitement for the customer,” Thompson said. “We need to be able to balance both of those two into the barbell, and we have to fill in what’s in between. That’s the reason for Dollar Menu & More.”

The evolution of the Dollar Menu & More is analogous to previous tweaks of the Dollar Menu, such as at the start of the recession when McDonald’s replaced the Dollar Menu’s double cheeseburger with the McDouble. The brand weathered the recession better than peers because of moves like that, Thompson noted, though he admitted that competitors now have improved their value propositions and continue to launch new products.

Down the road, McDonald’s will bring back Mighty Wings, which the company expects to sell about 35 million pounds of during the promotional window.

McDonald’s operates or franchises more than 34,500 restaurants worldwide.

Boston Market to Offer Government Shutdown Promotion

Tuesday, October 8th, 2013

Boston Market is targeting a promotion to workers furloughed by the government shutdown, one of the first restaurant chains to do so.

Federal employees and military personnel can receive a free whole rotisserie chicken with the purchase of a family meal at any U.S. Boston Market restaurant, in a week long promotion that starts Sunday.

“Government employees and our servicemen and women have been some of our best customers over the years, and we appreciate all that they do for our country. Extending this offer to them is a little something we can do to give them a break during a stressful time,” George Michel, chief executive of Golden, Colo.-based Boston Market, said in a statement.

From Oct. 6-13, federal employees and military personnel with a valid government I.D. will receive a free whole extra chicken when they purchase a family meal, which could include chicken, meatloaf, turkey or St. Louis-style barbecued ribs, as well as sides and cornbread. Typically family meals are priced between $5 to $6 per person.

Alternatively, those eligible can also ask for a coupon that can be redeemed later.

The 460-unit fast-casual chain joins a long list of independent restaurants in various markets, particularly around Washington, D.C., that are offering discounts to show support for workers impacted by the government shutdown.

About 800,000 federal employees have been furloughed without pay since Oct. 1, after Congress failed to pass a continuing resolution to fund the government as a result of bipartisan gridlock.

Earlier this week, the movie theater chain AMC Theaters said it would offer free popcorn to government workers until the shutdown ends.

The Changing Face of Restaurant Labor

Tuesday, October 8th, 2013

Even as technology plays an increasingly important role in the foodservice experience, restaurants in 2020 still will emphasize the human touch in daily operations.

Staffing levels are expected to remain high, according to observers. Further, operators will need to better balance their numbers of part- and full-time workers, pay more attention to the increasing diversity within the workplace population, and create more effective training programs.

“I don’t see staffing levels going down,” said Patrice Rice, chief executive of Patrice & Associates, a hospitality recruiting firm in Dunkirk, Md. “This is a customer-based industry. We’re seeing some automation at the drive-thru and with soda dispensers, but somebody still has to cook the food and somebody has to give it to you.”

At the same time, employees will become more comfortable around increasingly sophisticated equipment in the front and back of the house, said Alice Elliot, founder and CEO of The Elliot Group in Tarrytown, N.Y.

“Workers will have to be confident around new technologies — although technology can’t replace the nuances of guest interaction,” she said.

Other labor trends for 2020 include:

• More part-time workers. In its “Restaurant Industry 2020” study, the National Restaurant Association forecast that restaurateurs would offer more part-time positions to allow workers more flexibility in their schedules, which might appeal to older employees who have retired from their primary jobs.

Health care reform also could impact the balance of part- and full-time workers. The NRA expects that the industry will employ 14.4 million workers by 2023, compared with 13.1 million in 2013.

• Older workers. Stubborn unemployment rates also might play a role in 2020 as older jobless individuals and new retirees seek restaurant jobs, Rice said.

“Right now, the average age is higher than it was five years ago because of unemployment,” she said. “The hospitality industry allows for people to have a second career, if you’re willing to start over.”

• Lower turnover. As the number of restaurant employees in the younger demographic declines, older workers are expected to step in to fill vacancies. Rice noted that the gradual aging of the workforce could potentially impact turnover.

“Generally, a more mature staff decreases turnover. … Many are just glad to have jobs,” she said. “And they care about customer service, so that could even help to improve the customer experience.”

• More diversity. The foodservice workforce will grow even more diverse, with minorities and women seizing the opportunity to climb up the career ladder and into management positions, the NRA said.

• A greater emphasis on training. “People will have to be cross-trained and taught critical thinking skills,” Elliot said. “Restaurants need to stay competitive. The guest will have so many options and expectations, … and employees will have to understand the menu and the culture [of the place in which they work].”

Vodka Tops Consumers’ Preferred Spirits

Tuesday, October 1st, 2013

Mixologists might love gin, and connoisseurs might tout whiskey, but vodka remains the spirit of choice among American consumers.

Vodka accounts for 30 percent of all on-premise spirits, according to cocktail trend expert Donna Hood Crecca, Technomic Inc. senior director of the adult beverage resource group. Consumption of it, both on- and off-premise, grew by nearly 6 percent in 2012, she said.

Flavored vodka is driving growth. “There’s just a constant stream of flavors coming to market,” Crecca said.

New iterations range from dessert and candy-shop flavors such as cake, whipped cream and root beer float, to whimsical varieties such as peanut butter and jelly, and dill pickle. “It’s versatile, and there’s something for every type of consumer or bartender,” she said.

Unaged corn whiskey, sometime marketed as moonshine, resembles vodka and is becoming more popular in the growing whiskey category, Crecca said. “It’s so on-point today,” she said of corn whiskey. “It’s got the authenticity — the back story — and great craftsmanship. Some microdistilleries are getting props from larger distributors, making it available to a broader audience.

“If you’re a bar or restaurant and you have a customer base that’s looking for things that are new and interesting, corn whiskey is definitely something to look at,” she added.

Corn whiskey-based cocktails served in mason jars are becoming popular in New York City establishments, as well as some chains, Crecca said.

Joe’s Crab Shack, a 130-unit casual-dining chain owned by Houston-based Ignite Restaurant Group, currently has a line of corn whiskey-based Moonshine Cocktails in apple pie, tea and punch flavors, served in mason jars.

In 2011, 47-unit casual-dining chain Quaker Steak & Lube, based in Sharon, Pa., won a Nation’s Restaurant News MenuMasters award for innovations that included cocktails served in “bar jars” — mason jars with mug-like handles.

Just as vodka-like corn whiskey is helping spur growth of the whiskey category overall, so are flavored whiskeys, another tactic borrowed from vodka producers.

Leading that movement is Fireball Cinnamon Whiskey, which has become a popular shooter among younger consumers. Another popular cocktail is called Angry Balls — a combination of Angry Orchard cider with Fireball Cinnamon. An offshoot of that is the Angry Irishman, which combines the cider with Jameson Irish whiskey.

That leads to another category of cocktails in which not only different spirits but different categories of alcohol are combined.

Beer, in particular, has become a popular addition to cocktails, Crecca said, noting that even at casual-dining chain Red Robin, customers can get a drink that combines wheat beer with clementine-flavored vodka, and another that blends Coors Light with ginger liqueur and lemonade.

“When you see something like that at Red Robin, that is so mainstream,” she said.

Overall, the margarita remains the most popular — and often modified — cocktail. For instance, the Coronita upends a small Corona beer in a margarita.

Simple spirit-and-soft-drink combinations such as rum and Coke remain popular, too. Crecca estimates that they account for about two-fifths of all cocktails. “It doesn’t appear on the menu, but it’s very much called for,” she said.

Although customers are open to trying unusual flavor combinations, tried-and-true flavors remain the most popular. “About half of consumers would be satisfied with strawberry and lime as cocktail flavors,” she said.

However, berry, pear, cherry and white peach flavors are growing in popularity, as are sweet-and-spicy combinations such as chipotle-pineapple, and tropical exotics such as mango.

Consumers are looking for better versions of traditional flavors, Crecca said, noting that customers are interested in knowing the calorie content of their mixers and often look for specific brands.