May 30, 2014
Darden to Sell Red Lobster for $2.1 Billion
Darden Restaurants said it has agreed to sell its Red Lobster casual dining chain and related real estate assets to
investment firm Golden Gate Capital for $2.1 billion. Shares of Darden fell $2.20, or 4.3%, to close at $48.49 on
Friday. The deal lets Darden shed its worst-performing chain to pay off some debt and focus on its flagship Olive
Garden chain, which also has been struggling. Darden will receive net cash proceeds, after tax and transaction costs,
of about $1.6 billion for the seafood chain with 700 restaurants in the U.S. and Canada. Orlando-based Darden says
it will use $1 billion to pay off debt and use the rest to buy back shares. Sales at casual dining restaurants have been
sluggish, with industry analysts blaming a general lack of innovation and also less appeal for younger consumers.
Darden had considered various plans for unload Red Lobster, including a spin-off. Darden also approached real
estate buyers about sale-leaseback financing for the business. Golden Gate, a private equity firm in San Francisco,
announced a sale-leaseback deal Friday, to reduce its exposure to Red Lobster's real estate. In the $1.5 billion deal
with American Realty Capital Properties for more than 500 Red Lobster restaurants, Golden Gate will sell the land
and buildings to ARCP and lease them back. Darden said it chose Golden Gate because it was an all-cash offer and
the deal allows the company to maintain its current dividend of 55 cents per share, or $2.20 per year. Red Lobster
has been the laggard among Darden's chains, which also include LongHorn Steakhouse and The Capital Grille. In
the fiscal third quarter ended Feb. 23, Red Lobster's sales at locations open at least a year fell 8.8% from a year ago
to $611 million, and visits were down nearly 12%. In comparison, LongHorn Steakhouse sales rose 0.3%, while
Olive Garden reported a 5.4% decline. The company said that removing Red Lobster from its portfolio frees it to
focus on reinvigorating Olive Garden, the company's leading revenue generator. "We believe this agreement
addresses key issues that our shareholders have raised, including the need to preserve the company's dividend and
regain momentum at Olive Garden," said Darden CEO Clarence Otis in a statement. – Source: USA TODAY.
With 3,000 More Locations, Subway Widens Its Lead over McDonald's
While burgers have long been the main staple of American fast food, $5 Footlongs are becoming more ubiquitous by
the day. Subway, long the largest restaurant chain in number of outposts, will now have an even wider lead against
rivals: On Monday, the company announced its intention to add 3,000 locations worldwide this year, expanding its
footprint by 7 percent. It has already achieved about one-third of this goal, opening 973 new stores around the globe
so far this year. In 2013, Subway‘s more than 40,000 locations outstripped McDonald‘s 35,400 and
Starbucks‘ 20,000. Yum‘s three brands combined—KFC, Pizza Hut, and Taco Bell—had about 40,300 locations.
This year McDonald‘s plans to open 1,500 to 1,600 shops, and Starbucks‘ target is 1,500, mainly in the Americas
and the China-Asia Pacific region. Subway has been pursuing rapid growth for the past decade. According to figures
from Chief Development Officer Don Fertman, the chain has averaged more than 2,000 new spots per year for the
past 10 years, but international expansion has bumped up the rate to more than 2,500 in 2012 and more than 2,700 in
2013. Subway‘s strategy is to open not only in shopping centers and as free standing locations, but also in what it
calls ―nontraditional venues,‖ such as hospitals, colleges, sports arenas, and airports, where its sites can be as small
as 300 square feet. Fertman says that in North America, it‘s looking at such Northeast markets as Philadelphia,
Boston, and New Jersey, and overseas it‘s expanding quickly in Brazil, Mexico, Colombia, and Argentina. Brazil is
now its fourth-largest market after the U.S., Canada, and the U.K. Moreover, the chain shows no sign of slowing
down: Its leaders predict the market can handle 100,000 locations by 2030. – Source: Bloomberg/BusinessWeek.
Delaware North Closes Patina Restaurant Group Deal
Global foodservice contractor Delaware North Companies has acquired a majority stake in multi-concept operator
Patina Restaurant Group, creating a $3 billion brand. Terms of the deal, which closed Friday but was announced in
February, were not disclosed. Buffalo, N.Y.-based Delaware North has taken a majority stake in the bicoastal Patina
Restaurant Group, which is based in New York and Los Angeles. Majority ownership was held previously by Japanbased foodservice conglomerate Shidax Corp., which will continue to hold a minority interest in Patina Restaurant
Group. Matthew King, previously president of Delaware North Companies Travel Hospitality Services, will assume
a new role as president of Delaware North Companies Landmark Holdings, with oversight over Patina Restaurant
Group. The company said King will work closely with Nick Valenti, Patina Restaurant Group‘s chief executive, and
the company‘s founder and chef Joachim Splichal, who will remain in their current positions. The result of a
partnership between Valenti and Splichal, Patina Restaurant Group is known for its roughly 60 high-end and casualdining restaurants, catering and foodservice operations in cultural and arts centers on both the West and East Coasts.
Delaware North, founded and owned by the Jacobs family, manages and provides food-and-beverage concessions,
dining, entertainment and lodging at large venues, airports, national parks, casinos and other tourist spots across the
U.S., Canada, the United Kingdom, Australia and New Zealand. Together, Delaware North and Patina Restaurant
Group are expected to generate revenue exceeding $3 billion in 2014, and the company will include nearly 60,000
employees. Replacing King as president of Travel Hospitality Services is Kevin Kelly, who will report to King. The
division includes more than 20 airport locations across North America. Kelly served previously as vice president,
Shared Services, for Delaware North, and headed the Parks & Resorts division from 2005 to 2012. Restaurants
within Patina Restaurant Group‘s portfolio include the namesake Patina Restaurant in Los Angeles‘ Walt Disney
Concert Hall and Lincoln Ristorante at New York‘s Lincoln Center. Other brands include Nick & Stef‘s Steakhouse,
Café Pinot at the Maguire Gardens, Catal and three other restaurants in Anaheim‘s Downtown Disney, Leatherby‘s
Café Rouge at the Segerstrom Center for the Arts, and the Hollywood Bowl on the West Coast. On the East Coast,
venues include the Rockefeller Center Ice Rink, Rock Center Café, The Sea Grill, Brasserie, Café Centro, Naples
45, The Grand Tier Restaurant at the Metropolitan Opera and La Fonda Del Sol, as well as Tutto Italia Ristorante at
the Epcot World Showcase in Orlando, Fla. – Source: NRN.
Papa John’s Announces Promotion of Steve Ritchie to Chief Operating Officer
Papa John‘s International, Inc. announced the promotion of Steve Ritchie to the position of Chief Operating Officer.
In addition, the Company‘s Founder, Chairman and Chief Executive Officer, John Schnatter, will assume the
additional role of President of the Company, continuing to focus on all aspects of the Company‘s business, while
also acting as brand spokesperson. ―Steve and I are passionate about the Papa John‘s brand, and will work with our
global franchise and corporate operators and the rest of this outstanding management team to continue to grow the
brand and our quality position around the world.‖ ―Steve is an outstanding operator with a track record of success,
and a tremendous asset to our entire system,‖ said Schnatter. ―Steve and I are passionate about the Papa John‘s
brand, and will work with our global franchise and corporate operators and the rest of this outstanding management
team to continue to grow the brand and our quality position around the world.‖ In his new role, Mr. Ritchie will lead
all aspects of the Company‘s global operations, support and training in over 4,400 restaurants in 35 countries. He
will also lead the Company‘s research and development, quality assurance, PJ Food Service and supply chain
functions. As part of the leadership changes, Chief Financial Officer, Chief Administrative Officer & Treasurer,
Lance Tucker, will assume leadership of the Company‘s Information Systems functions, including its online
ordering platform, and the Human Resources function. In their expanded roles, both Mr. Ritchie and Mr. Tucker will
play key roles in the Company‘s strategic planning process. Mr. Ritchie has served in various capacities of
increasing responsibility since joining Papa John‘s in 1996, including Senior Vice President, North and Latin
American Operations & Global OST from July 2012 to May 2013, Senior Vice President, North American
Operations & Global OST from August 2011 until July 2012, Senior Vice President, Operations and Global OST
from December 2010 until August 2011 and Vice President, Operations & Global OST from July 2010 until
December 2010. Since 2006, he also has served as a franchise owner and operator of multiple units in the
Company‘s Midwest Division. Mr. Tucker was appointed Chief Administrative Officer in July 2012 and Chief
Financial Officer and Treasurer in February 2011. Mr. Tucker previously held the positions of Chief of Staff and
Senior Vice President, Strategic Planning from June 2010 to February 2011, after serving as Chief of Staff and Vice
President, Strategic Planning since June 2009. Mr. Schnatter created the Papa John‘s concept and started operations
in 1984. As Founder, Chairman, CEO and President, Mr. Schnatter will lead the Company‘s management team and
continue to focus on marketing, together with Chief Marketing Officer, Bob Kraut. – Source: Papa John‘s.
Johnny Rockets Targets N.C. for Expansion
According to FSR magazine, North Carolina is one of the top 10 states for full-service restaurant growth in
2014. With North Carolina's population of 10 million people, growing at a rate of more than 11.5 percent per
decade, Johnny Rockets is taking notice. The iconic brand currently has one thriving location in North Carolina at
Harrah's Cherokee Casino, and has enacted growth and development strategies for expanding further into the state,
particularly its largest city, Charlotte. "North Carolina has always been a target state for expansion due to the need
for more restaurants within its metropolitan areas," explains James Walker, chief development officer of Johnny
Rockets. "In particular, Charlotte has become a booming destination for families to live, work, and visit. With its
various malls, shopping centers, arenas, and amusement parks, Charlotte is an ideal city for Johnny Rockets due to
its flexible footprints and appeal to all ages." With 28 years of global recognition, a menu featuring fresh, highquality hamburgers and a fun and entertaining environment, Johnny Rockets restaurants boast a modern Americana
experience. While Johnny Rockets plans to target the entire state of North Carolina, the company is immediately
focused on development in Charlotte and Raleigh. James Walker will speak at the Charlotte Franchise and Business
Opportunities Show on Saturday, May 31, at 2 p.m., located at the Metrolina Tradeshow Expo. Through the
remainder of 2014, Johnny Rockets plans to open more than 60 restaurants around the world. By 2017, the brand
plans to add 100 more locations in the U.S. – Source: FSR Magazine.
Corner Bakery Eyes Las Vegas, Seattle. Bakery Cafe Plans to 0pen 23 Cafes in the Two Cities
Corner Bakery Cafe has signed two multi-unit development agreements with California-based businessman Anil
Yadav, chief executive officer of JIB Management, who plans to open 16 cafes in Seattle and 7 in Las Vegas over
the next seven years. ―While looking for a brand that is relevant in today‘s market, we came across Corner Bakery
Cafe and knew we had to be a part of it,‖ Mr. Yadav said. ―The brand has a lot of promise for the future and is in the
right segment — fast casual. We feel very strongly about the markets we are entering with Corner Bakery Cafe and
the future for our cafes there is very bright and promising.‖ Corner Bakery Cafe operates 166 company-owned and
franchised locations in 17 states and Washington, D.C. Last month, the company announced plans to open 18
restaurants in Kentucky and Tennessee, as well as plans for 17 cafes in the Orlando, Fla., area, bringing total
development commitments to more than 350 locations. ―Anil represents the type of experienced, highly successful
franchisee that is attracted to the Corner Bakery Cafe franchise opportunity,‖ said Gregg Koffler, vice-president of
franchise sales for Corner Bakery Cafe. ―He understands how to grow a market, and we expect him to quickly
replicate the success of his other business concepts with Corner Bakery Cafe.‖ Source: FoodBusinessNews.net.
Noodles & Company to Acquire 16 Franchised Restaurants
Noodles & Company has agreed to acquire 16 franchised restaurants for about $13.4 million. The restaurants, which
are operated by longtime franchisee Sagamore Dining Partners LLC, are all located in the greater Indianapolis area,
and they are expected to remain open during the transition. The deal is expected to close in early July. Sagamore,
which was founded by Mike Lamb, agreed to sell the Indianapolis units in part to help finance a plan to open
Noodles & Company units in the greater Louisville, Ky., market. The franchise operator signed a deal earlier this
year with the Broomfield, Colo.-based fast-casual chain to develop the new territory, where the first restaurant is
expected to open in late 2014. ―Mike Lamb and his team at Sagamore Dining Partners have done an outstanding job
of establishing the Noodles & Company brand in Indianapolis over the past eight years,‖ Kevin Reddy, Noodles &
Company‘s chairman and chief executive, said in a statement. The successful restaurants they have built and
operated are extremely well-run, and we look forward to adding them to our portfolio of company-owned restaurants
in neighboring markets.‖ Noodles & Company already owns and operates three restaurants in Indiana. Wall Street
analysts saw the move as beneficial to Noodles & Company, saying the acquired locations could add roughly $2
million to annual earnings before interest, taxes, depreciation and amortization, or EBITDA, and about 1 cent to 2
cents in per share earnings for the year, according to a report Tuesday by David Tarantino of Robert W. Baird &
Co.Noodles & Company operated and franchised 394 restaurants in 30 states and the District of Columbia as of the
April 1-ended quarter. Of those, 63 were franchised units. In 2014, Noodles & Company expects to open 42 to 50
company-owned locations and 10 to 15 franchised units. – Source: NRN.
Arooga’s is Taking its Game to New England. The Deal Calls for a Minimum of 15 Restaurants in the New
England Market Over the Next Five Years
Arooga‘s Grill House & Sports Bar, the Harrisburg-based, full-service casual restaurant and bar with nine locations
in Central Pennsylvania, announced it has entered into a franchise agreement with The Mohegan Tribe that will
nearly triple the brand‘s overall footprint. The deal calls for a minimum of 15 restaurants in the New England
market over the next five years. ―We are excited to announce this agreement with the Mohegan Tribe,‖ says Keith
Swade, franchise development for Arooga‘s. ―They are a world class organization and a leader in the hospitality and
gaming industry. We could not ask for a better partner to develop the New England market for Arooga's."
Construction on the brand‘s first New England area restaurant will occur this summer adjacent to the Mohegan Sun
in Uncasville, Connecticut, which is one of the world‘s most successful casinos, with more than $1.2 billion in
annual revenue. ―We are thrilled to bring this incredible sports bar concept to the New England area,‖ said Kevin
Brown, chairman of the Mohegan Tribe. ―Arooga‘s reputation for being the next great restaurant franchise is wellearned and we are privileged and pleased to have them as an important part of our organization.‖ ―The first location
will be like no other restaurant and sports bar this region of the country has ever seen,‖ said Michael Chaney,
managing creative director of Cincinnati-based FRCH Design Worldwide, whose firm is designing the restaurant.
―We are bringing a design that represents the ‗best of the best‘ of the current Arooga‘s locations.‖ Arooga‘s at the
Mohegan Sun will be a 9,000-square-foot restaurant with separate restaurant and bar areas, a large outdoor deck for
dining, and fire pits for social gathering. It will feature more than 100 big screen televisions, 40 domestic and craft
beers on draft, and Arooga‘s food. ―This is an exciting time for Arooga‘s,‖ says Gary Huether Jr., president and cofounder of Arooga‘s. ―Even from our humble beginnings, we knew we were building a world-class sports bar and
restaurant that would thrill guests everywhere. We can‘t wait to bring the Arooga‘s brand to the greater New
England area.‖ ―We are thrilled to partner with Mohegan to expand into the New England market, which presents a
tremendous opportunity for growth,‖ says Mike Murphy, Arooga‘s co-founder. ―We also feel that this is the perfect
partnership to connect with a market that has such passion and pride for their history in sports legacies.‖ – Source:
FSR Magazine.
Taco Bell's Dream of Beer Milkshakes Will Have to Wait
Taco Bell‘s soon-to-open upscale spinoff restaurant—the name is a mouthful: U.S. Taco Co. & Urban Taproom—
isn‘t going actually to have a taproom, at least not at the first location in Huntington Beach, Calif. And that means
the world will have to wait for a fast-food chain to embark on the bold experiment of popularizing the beer
milkshake, an anticipated item on the menu. Due to a snag securing a liquor license in a city already evaluating
stricter alcohol rules, the Taco Bell‘s take on a fast-casual restaurant will instead serve soft drinks, such as glassbottle Mexican Pepsi and Olde Brooklyn soda, for its July opening. ―We literally sat down and tasted 100-something
sodas last week,‖ said Taco Bell‘s senior brand manager, Jeff Jenkins, who has been leading the project. Original
plans to recommend taco-beer pairings, such as lobster tacos with blueberry beer from Maine, will be replaced with
taco-soda pairings. The plan to serve up milkshakes spiked with Guinness beer and tequila will instead be offered
virgin. Anyone curious about beer milkshakes with Cinnamon Toast Crunch (and a tequila caramel sauce) blended
in must patiently wait—or get someone at Taco Bell‘s headquarters to whip up a prototype. I tried one during a
recent visit: The frosty, boozy beverage has a real tequila kick. U.S. Taco is now thought of in two variations—one
with a bar, one without. The six-person team within Taco Bell is now exploring locations in Southern California for
a second restaurant, which they hope will serve 50 beers (of which four to six will be on tap) and can rightfully earn
the ―Urban Taproom‖ part of the concept‘s name. ―Even without the booze milkshakes, Huntington felt like the right
place to be,‖ Jenkins says, noting the age-old bond between surfing and tacos. Yum! Brands, the corporate parent of
Taco Bell, is testing other upscale concepts. The company has invested roughly $500,000 so far into a chicken
sandwich restaurant Super Chix, which recently made its debut in Arlington, Texas. Entering the fast-casual fray—
and taking on Chipotle Mexican Grill—looks like a growth strategy that calls for taking risks. – Source:
Bloomberg/BusinessWeek.
Restaurants to Add More Than 500,000 Summer Jobs
Restaurants in the United States are expected to add 508,000 temporary jobs this summer to handle the seasonal
increase in consumer traffic, according to a news release from the National Restaurant Association. ―Summer is the
busiest season for restaurants in most parts of the country, and the uptick in business creates additional job
opportunities at all levels of a restaurant operation,‖ Bruce Grindy, the association's chief economist, said in the
release. ―In many states with tourism-driven economies, restaurants are prime destinations for both tourists and jobseekers.‖ Kentucky is estimated to add 4,600 summer restaurant jobs, and Indiana is expected to add 8,200, the
release stated. This will be the second summer in a row that eateries have added more than half a million jobs. But
estimates for this year are lower than for last year, when restaurants added 538,800 summer jobs, according to the
release, which did not state why predictions for 2014 are lower. The restaurant industry is the second largest creator
of summer jobs, behind construction, according to the release. – Source: Business First.
Chipotle Goes Beyond Burritos: Adds Asian, Pizza Outlets
Chipotle Mexican Grill has ambitions beyond burritos. This summer, the company is growing two new fast-food
chains for Chipotle loyalists hungry for more variety. ShopHouse serves Southeast Asian-style rice bowls and
Pizzeria Locale serves gourmet pizza. Like the 1,600 eateries in the Chipotle chain, the newcomers offer counter
service that enables diners to customize meals made from fresh, local, mostly organic ingredients and naturally
raised meats. ShopHouse, which is wholly owned by Chipotle, quietly launched a single test restaurant in
Washington, D.C., in 2011. By the end of this year, it will have 10-12 outlets in D.C. and Los Angeles. Shop house
is the Asian name for buildings where families live upstairs and operate restaurants or markets on the ground floor.
Pizzeria Locale, a partnership with restaurateurs Bobby Stuckey and Lachlan Mackinnon-Patterson, launched its
prototype outlet in May 2013 in Denver and will open a second location in Denver by the end of the year. Pizzeria
Locale offers made-to-order pies cooked in less than two minutes in a rotating oven. ―Chipotle picked Southeast
Asian fare because founder Steve Ells likes the big flavors of that cuisine. And [the company] invested in the
pizzeria because Steve is impressed by the owners‘ expertise and the way they run their business,‖ said a Chipotle
representative. The new chains are designed to appeal to the same customer base as their parent and most are located
near existing Chipotle restaurants. They are being promoted with coupons distributed in Chipotle outlets and with
other co-marketing efforts, the rep said. ShopHouse also is participating in this year‘s Chipotle Cultivate Festival
series. The free, one-day events include cooking demonstrations by celebrity chefs, live music, local food artisans,
breweries, wineries, a special Chipotle menu and educational activities about animal welfare, GMOs and processed
foods. The series will begin June 7 in San Francisco and travel to Minneapolis on Aug. 23 and the Dallas-Fort
Worth area on Oct. 18. Experts say Chipotle‘s decision to develop new chains will help it maximize its supplier
relationships, extend its brand equity and spread its ―food with integrity‖ philosophy. ―Chipotle has invested in
building relationships with local farmers, so diversifying creates a more sustainable system,‖ said Mark Figliulo,
CEO of New York shop Figliulo & Partners. ―In the hyper-competitive world of fast-casual dining, leveraging likebrands gives credibility to the new brands and expands the parent brand‘s higher purpose,‖ said Scott Davis, chief
growth officer at Prophet, a brand consultancy. Davis added that Chipotle would be wise to let the new eateries bask
in the glow of the Chipotle halo, ―while also allowing them to flourish on their own merits.‖ He pointed to Evolution
Fresh juices—owned and promoted by Starbucks—as a successful example of a legacy parent giving a ―soft lift‖ to
a new brand. – Source: AdWeek.
Bojangles' Executive on Expanding Beyond the Southeast
Already proliferating, Bojangles' chicken chain may add "hundreds" of new locations in the Southeast and could
move into other regions it had abandoned after a previous expansion, a top executive said. The chain aleady has 583
restaurants in 10 states, primarily in the Southeast and the District of Columbia, as well as three locations in
Honduras. Sales grew nearly 7 percent last year to $925.2 million. From 2010 to 2013, the fast-food chain's U.S.
units rose by 18 percent, outpacing growth of competitors Popeye's Louisiana Kitchen, Yum Brands‘ Kentucky
Fried Chicken and Chick-fil-A, according to market research firm Technomic. Bojangles' building spree is set to
continue this year as rival Chick-fil-A rapidly moves into new markets in the Midwest, West and Northeast. "We'll
open 55 to 60 restaurants this year," Eric Newman, Bojangles executive vice president, said in an interview with
CNBC. "Depending on how you look at that, it's one every six days." For now, the company plans to concentrate
this expansion in its existing U.S. base. But moving forward, the company's fried chicken and biscuits could be soon
outside its traditional markets. "I think we could go up and down the East Coast, further west, and maybe the
Midwest," Newman said."We are entertaining franchise conversations in the various states that are new to us." New
nontraditional locations, such as in airports, military bases and colleges, won't be as limited to the Southeast. "I
think that nontraditional locations can be a vanguard for future development," he said. "In other words, we will
allow ourselves to go further from home with these locations." This potential tiptoeing out of its traditional base
follows a previous expansion strategy that took the chain to such far-flung areas as the Midwest, New York,
Northeast, South Florida and the West, Newman said. "In the 1980s, there was a very broad expansion and not much
thought given to the ability to support very broad and quick growing areas," he said, adding that the company later
pulled back from this strategy and shuttered these locations. As Bojangles' continues to grow, its focus will remain
on building market share and increasing consumer awareness of its brand. On the technology side, it's also focused
on revamping its point-of-sale system, which could increase its technological capabilities as competitors ramp up
efforts in mobile ordering and payment. "We were working on an entirely new POS system which I think will allow
us to do all kinds of things," Newman said. – Source: CNBC.com.
Rensi Becomes Permanent CEO at Famous Dave's|
The installation of former McDonald‘s executive Ed Rensi as Famous Dave‘s CEO could lead to significant changes
at the stagnant barbecue chain, particularly regarding its menu. The company said Friday that Rensi, Famous Dave‘s
temporary CEO since February, will get the job permanently. Famous Dave‘s also announced the appointment of a
new chief financial officer, continuing the firm‘s management shake-up. In an interview with the Star Tribune,
Rensi said Famous Dave‘s — while it has ―great food‖ — hasn‘t kept up with the times. ―All restaurants need to
evolve over time, all of the time,‖ he said. ―Famous Dave‘s is 20 years old this month but really hasn‘t evolved that
much. Dave‘s needs to evolve the menu.‖ That doesn‘t mean Famous Dave‘s is going to abandon the classics, like a
slab of ribs or chunk of brisket. But Rensi says Dave‘s meats need to be more than ―center of the plate‖ attractions.
There should be more menu items that feature barbecued meats as ingredients — burritos or flatbreads, for instance.
And Famous Dave‘s also needs a better ―smaller plate strategy,‖ offering smaller portions at lower price points,
Rensi said. Rensi, 69, was named interim CEO when John Gilbert abruptly resigned after only 16 months on the job.
About a month later, Chief Operating Officer Christopher O‘Donnell, who had been CEO before Gilbert, left the
Minnetonka-based company. Investors have been paying a lot more attention since Rensi became interim CEO. The
company‘s stock has almost doubled, closing Friday at $31.76, up 10 cents. ―I think people like Ed, because
fundamentally, there hasn‘t been much change in the business,‖ said Mark Smith, an analyst at Feltl and Co. Sales
have been in a holding pattern for the past few years, while Smith said the chain‘s profitability has been rather
mediocre. The company, which has 193 restaurants in more than 30 states, must reignite growth. Rensi made his
name at fast-food giant McDonald‘s, starting in 1965 as a ―grill man‖ for 85 cents an hour and leaving in 1999 after
several years as head of North American operations. He later founded Tom & Eddie‘s, a small restaurant chain in
suburban Chicago. Rensi, who joined the Famous Dave‘s board in January, said newer menu strategies are being
rolled out at an outlet in the Chicago suburb of Bolingbrook. The restaurant has more beer offerings than a typical
Famous Dave‘s, and also has about 20 televisions, which are tuned to sports, news and food shows. – Source: Star
Tribune, Minneapois/St. Paull, MN.
With a Croissant Burger, Starbucks and La Boulange Test the Dinner Crowd
No restaurant chain wants to miss out on the current fast-casual craze, it seems. Consumers continue to fork over a
premium for food and décor that‘s a step up from a local drive-through but not measurably slower. Yum! has been
testing upscale versions in the KFC and Taco Bell families. Now, Starbucks is launching a continental diner. The
company, which acquired San Francisco chain La Boulange Bakery in 2012, will on June 12 open a restaurant in
Los Angeles called La Boulange. Unlike its bakeries (and competitor, Le Pain Quotidien), which close by about 7
p.m., the La Boulange restaurant will serve dinner until 10 p.m. The menu starts with the bakery‘s menu of
sandwiches, salads, and omelets and adds such later-in-the-day options as croissant burgers, cocktails, beer, and
wine. It‘s easy to see why Starbucks wants to enter the dinner market. After sundown, the cafe chain largely loses to
competitors such as Panera, which racks up 22 percent of its sales at dinner. Starbucks has already announced an
―Evenings‖ menu at its cafes–and will no doubt try to apply any lessons to its new restaurant. Starbucks has also
been tweaking its food offerings in response to customer complaints about the baked goods from La Boulange,
which have drawn mixed reviews—while replacing customer favorites such as iced lemon loaf cake. In April,
Starbucks acknowledged the grumbling and brought back loaf cakes. Opinions of La Boulange‘s several Bay Area
locations are better, and Pascal Rigo, founder of La Boulange, said he expects breakfast, lunch, and weekend brunch
to be mainstays at the new restaurant. No one has vouched for the croissant burger yet. – Source:
Bloomberg/BusinessWeek.
Jersey Mike’s Subs President Hoyt Jones on Why Doing Good is Good for Business
At Jersey Mike‘s, ―Giving…making a difference in someone‘s life‖ has been a guiding principle since Peter Cancro
founded the company almost 60 years ago in Point Pleasant, N.J. at the age of 17. From more established local
business mentors, Peter learned the importance of supporting the community that supports you. Today, this kind of
initiative is called ―cause marketing,‖ but back then it was just considered the right thing to do. Since 2010, Jersey
Mike‘s locations throughout the country have raised nearly $10 million for worthy local charities and have
distributed more than 750,000 free sub sandwiches to help numerous causes. That includes everything from a
franchisee donating subs to the local high school football team to Jersey Mike‘s annual March Month Giving
campaign which this year raised $2.1 million for more than 100 local charities. We are fortunate to have a founder
and CEO who genuinely cares about helping people and championing good causes. His tireless commitment to not
only helping, but teaching those around him to get involved, has helped Jersey Mike‘s create its culture and define
its brand personality. Doing good is also good for business. Our store sales and average unit volumes have been up,
our system is growing faster than it ever has, and our brand awareness continues to expand. Jersey Mike‘s has
become widely noticed as a company that cares. Here are three things we hold to be true: If your mission to give
back is authentic, you will attract exemplary franchisees and team members. Our desire to make a difference is
central to the Jersey Mike‘s brand and can serve as a differentiator for potential franchisees and team members. This
philosophy is not for everyone, but it has gotten the attention of many like-minded folks who care about people and
want to be part of a greater purpose. In fact, this passion for helping others has become a ―must have‖ personality
trait for prospective franchisees as well as team members from managers to sub makers. This engagement means job
performance, customer satisfaction and overall energy all rise to a new level. We are building something people
want to be part of. If your mission to give back is well-communicated, you will attract loyal customers. Eighty-one
percent of our most loyal customers say learning about or participating in Jersey Mike‘s community involvement
has changed their perceptions. They know that we give first and worry about the returns later and that our
franchisees ―put their money where their mouth is.‖ We believe that marketing strategies like discounting won‘t
build a loyal customer base, but offering superb fresh sliced and fresh grilled subs and supporting your local
community will. Jersey Mike‘s is known as a company that cares and our customers appreciate that. Business
success means additional opportunities to make a difference. Partnerships with local charities are a win-win for
everyone. These connections have undoubtedly helped Jersey Mike‘s build a bond within our local communities,
winning a passionate following. And our business success has a direct benefit for the causes we support: More
restaurants mean we can raise even more money for hard working organizations. Many factors go into a successful
restaurant — from operational excellence to a great location — but giving back brings a different sort of value to a
business that is very real and grows as the commitment to the community grows. At Jersey Mike‘s our experience
has been that customers are happy to see a company that does good do well. – Source: SmartBlogs.
Real Mex Promotes Rio Gueli to COO
Real Mex Restaurants has promoted Rio Gueli to chief operating officer, from executive vice president of
operations, the parent to the El Torito, Acapulco and Chevys Fresh Mex brands announced. In his new role, Gueli
will oversee all brands, which also include El Torito Grill, Sinigual, Las Brisas Restaurant, and El Paso Cantina, in
addition to the three core brands. As the company‘s executive vice president of operations, Gueli had oversight of
the El Torito, Las Brisas and Who Song & Larry‘s brands — including the development of a new version of Who
Song & Larry‘s, which recently opened in California‘s Orange County. The company has been working through a
multi-brand overhaul over the past two years after emerging from bankruptcy in 2012, when it was acquired by
private equity firms Z Capital Partners LLC and Tennenbaum Capital Partners LLC. Charly Robinson, Real Mex‘s
president and chief executive, said the move represents the company‘s long-term talent development plan. ―Over the
past 15 months, Rio‘s leadership has been instrumental in the execution of Real Mex‘s transformational strategy in
all aspects of the company‘s operations,‖ he said in a statement. ―Rio has played an integral part in the introduction
of the new Who Song & Larry‘s concept, which recently celebrated its first restaurant opening in Orange County,
Calif., and his focus on operational excellence, strong entrepreneurial mentality and commitment to delivering a
high-quality guest experience will be invaluable as he steps into this new role.‖ Prior to joining Real Mex, Gueli
served as director of food and beverage at Bass Pro Group. Based in Cypress, Calif., Real Mex owns and operates
117 restaurants, and franchises another 13 locations. Source: NRN.
Smashburger Appoints Chief Development Officer, Further Expands Franchise Pipeline
Smashburger announced it has promoted David Biederman to the position of Chief Development Officer, where he
will oversee Information Technology, Purchasing, and Real Estate, in addition to his previous responsibilities
leading Construction and Development. ―Dave has been an integral member of Smashburger‘s core development
team and was instrumental in developing the restaurant‘s initial operating platform, smashing process, restaurant
design as well as construction processes critical to the brand‘s success today‖ ―Dave has been an integral member of
Smashburger‘s core development team and was instrumental in developing the restaurant‘s initial operating
platform, smashing process, restaurant design as well as construction processes critical to the brand‘s success
today,‖ said Scott Crane, chief executive officer of Smashburger. ―I would like to congratulate him on his
promotion, and we look forward to leveraging his expertise in a broader way to reinforce operations, develop and
strengthen the Smashburger brand across the globe.‖ Additionally, Smashburger announced today it has entered into
franchise agreements with five new groups who will grow the brand across the U.S. Smashburger has also expanded
its agreements with six veteran partners. The combined commitments, totaling 61 new restaurants, bring
Smashburger‘s total active franchise pipeline to approximately 461 restaurants set to open over the next several
years. Smashburger‘s new franchise commitments include: Upstate New York & Vermont – Smashburger has
partnered with BG Restaurant Group to expand the brand‘s presence in the Northeast with eight new restaurants set
to open in Albany, NY and Vermont over the next several years. Jackson, MS – Smashburger has partnered with
Mid South SB Investments to debut Smashburger in Mississippi with the opening of 10 new restaurants in the
greater Jackson-area over the next several years. Fayetteville, NC – Smashburger has partnered with Crowded
Market Burgers to expand the brand‘s North Carolina footprint to Fayetteville with three new restaurants set to open
over the next few years. Annapolis, MD – Smashburger has partnered with Ashford Holdings East to expand the
brand‘s Maryland footprint to Annapolis with three new restaurants set to open over the next few years. Pittsburgh,
PA – Smashburger has partnered with Expandable Technologies to expand the brand‘s presence into Western
Pennsylvania with the opening of four new restaurants in Pittsburgh over the next few years. Additionally,
Smashburger has entered into expanded franchise agreements with the following partners: Ventura, CA –
Smashburger has expanded its agreement with RK Hunter to bring three additional restaurants to Ventura, CA. The
group‘s franchise portfolio now totals six Smashburger restaurants. Houston, TX – Smashburger has expanded its
agreement with Mid-Wicket Enterprises to bring three additional restaurants to Houston, TX. This local franchise
commitment now totals 14 Smashburger restaurants, including three open locations. Manhattan, NY – Smashburger
has expanded its agreement with Smash Partners to debut 10 new restaurants in Manhattan, New York. The group‘s
franchise portfolio now totals 34 Smashburger restaurants, including three open locations in Westchester County,
NY and the first in Manhattan. The veteran restaurant group also operates more than 25 Dunkin‘ Donuts franchises
in New York City and Long Island, NY. Eastern Massachusetts – Smashburger has expanded its agreement with
Savin Burgers to bring 10 new restaurants to Middlesex, Norfolk, and Essex counties. The group‘s portfolio now
totals 22 Smashburger restaurants, including one open location in Natick, MA. They are also franchisees of six
Wings Over restaurants in Massachusetts and Connecticut. Queens, NY – Smashburger has expanded its agreement
with ISK Systems to bring four new restaurants to Queens, NY. This local franchise commitment now totals 24
Smashburger restaurants, including four open locations in Long Island, NY. Chester, PA – Smashburger has
expanded its agreement SB Philly to bring three new restaurants to Chester County, PA. The group‘s franchise
agreement now totals 16 Smashburger restaurants, including two open locations in Philadelphia, PA and Southern
New Jersey. ―Our first quarter of 2014 was particularly strong for Smashburger franchise sales, outpacing all of
2013 in a single quarter,‖ commented Scott Crane, CEO of Smashburger. ―We see this as a clear indication that our
brand is resonating with franchise partners as well as with the consumer, who is demanding better dining options in
their communities. We are thrilled to expand our relationships with these veteran franchisees and welcome each of
our new partners to the Smashburger family. We look forward to working together to develop our leading fast casual
brand in new and existing territories across the country.‖ Smashburger expects to grow its unit count by
approximately 30 percent in 2014. – Source: Smashburger.
Dunkin' Donuts to Develop 30 Restaurants Across Sweden
Dunkin' Donuts has signed a master franchise agreement with Coffee & Brands Sweden AB to begin developing
Dunkin' Donuts restaurants across Sweden. The master franchise agreement calls for the development of 30 Dunkin'
Donuts restaurants throughout Sweden over the next five years, with an initial focus on the Stockholm area. Dunkin'
Donuts has nearly 11,000 restaurants in 33 countries around the world, including more than 125 locations across
Europe in Bulgaria, Germany, Russia, Spain and the UK. – Source: FoodBev.com
Carlson Selling TGI Fridays to Two Private Investors
For most of the past 39 years, TGI Fridays was Carlson‘s entree to the restaurant world for the hip, young and casual
demographic. It was a mix between a burger joint, sports bar and singles hangout long before the likes of Chili‘s,
Applebee‘s and Buffalo Wild Wings became the go-to spots for a new generation of diners and imbibers. But after
growing Fridays from 12 locations in 1975 to 934 in 2014, Carlson is parting ways with its restaurant side. The
Minnetonka-based company announced that it is selling the well-known brand to a pair of New York-based
investment groups. Terms of the deal were not disclosed, although previous estimates of a potential transaction put
the purchase price in the range of $800 million to $900 million. ―That might be a little high, but it‘s in the ballpark,‖
said Darren Tristano, executive vice president of Technomic, a consulting firm for the food service industry. The
acquiring firms are Sentinel Capital Partners, which has an extensive background in the restaurant business, and
TriArtisan Capital Partners, the merchant banking arm of Morgan Joseph TriArtisan. Carlson CEO Trudy Rautio
said proceeds from the sale of Friday‘s will be plowed back into the travel conglomerate. For Carlson, the
transaction frees up resources that the company can deploy to focus on and accelerate the growth of its hotel and
travel businesses, at a time when significant opportunities exist in these markets,‖ Rautio said. Although Rautio
declined to comment about the deal beyond her remarks in a news release, Carlson has been flexing its hotel
muscles in recent years, unveiling a new urban concept called Radisson Red, spending hundreds of millions on its
fledgling upscale Radisson Blu product, expanding overseas and overseeing an upgrade of its traditional Radisson
Green line of hotels as well as Country Inns & Suites by Carlson. Carlson also owns Carlson Wagonlit Travel, a
large travel management operation. Carlson put TGI Fridays on the auction block six months ago. The deal is
expected to close in July. John McCormack, a senior partner at Sentinel Capital Management, said the Fridays
existing management team, led by CEO Nick Shepherd, will continue to run the chain, which has about 70,000
employees. ―TGI Fridays is an iconic global brand with a long history of solid performance and a significant
opportunity for future growth,‖ McCormack said in a statement. Restaurant properties have been a hot commodity in
recent post-recession years as capital returned to the marketplace. In announcing Carlson‘s decision to explore
―strategic alternatives‖ for Friday‘s in November, Rautio called the timing ―optimal‖ for the restaurant‘s sale.
Indeed, Darden Restaurants Inc. last week sold its Red Lobster chain of 700 units to a San Francisco private equity
firm for $2.1 billion. ―If you‘re an equity company looking for an investment, the restaurant industry represents a
significant opportunity,‖ Tristano said. ―For a legacy brand like TGI Fridays, there‘s always the opportunity to
enhance efficiencies and the financial statement. It‘s easier to increase profitability by maintaining operating costs
than growing market share.‖ – Source: Star Tribune, Minneapolis, MN.
Taco Bell Names Brian Niccol CEO
Taco Bell Corp. will promote president Brian Niccol to the role of chief executive, effective Jan. 1, 2015, the
company said Tuesday. Niccol replacesGreg Creed, who is slatedto become CEO of parent company Yum! Brands
Inc. The announcement comes just one year after Niccol was named president of Irvine, Calif.-based Taco Bell, a
role company officials say they have no current plans to fill once he becomes CEO. Niccol steps into the shoes of
Creed, who is replacing David Novak as Yum‘s chief executive. Louisville, Ky.-based Yum said earlier this month
that Novak will become executive chairman of the global quick-service operator in January. Yum operates and
franchises more than 40,000 locations of KFC, Pizza Hut and Taco Bell in more than 125 countries. ―Brian has
extraordinary leadership skills that make him the ideal candidate for our next CEO,‖ Creed said in a statement. ―He
is a dynamic leader who genuinely cares about this brand, its people and the culture of the organization. He has a
proven track record and the necessary vision to deliver our growth objectives, having overseen multiple
breakthrough initiatives, including the brand‘s game-changing breakfast launch earlier this year.‖ Niccol previously
served as chief marketing and innovation officer for the 5,600-unit Taco Bell beginning October 2011, a time when
the nearly 50-year-old quick-service chain was poised for a turnaround after same-store sales plummeted following a
consumer lawsuit that questioned the contents of the chain‘s seasoned ground beef. The lawsuit was later dropped.
Over the next three years, Taco Bell demonstrated a dramatic brand revival, emerging as a master of social media
and edgy marketing that targets Millennials. Niccol also led the chain‘s transition to the ―Live Más‖ tagline, which
included an overall shift from the notion of food as fuel to ―food as experience.‖ The menu was overhauled with the
addition of the wildly successful Doritos Locos Tacos line and the fast-casual-inspired Cantina Bell platform
developed by celebrity chef Lorena Garcia. Taco Bell recently rolled out breakfast, with menu items like the A.M.
Crunchwrap and Waffle Taco. This year, Taco Bell plans to launch a new menu item called the Quesarito — a
burrito wrapped in a quesadilla — which company officials have called its best-selling product test since the Doritos
Locos Taco. Taco Bell also plans to launch mobile ordering later this year. ―Brian‘s relentless focus on always being
a better, more relevant and accessible Taco Bell has made the brand an industry leader and a fan favorite,‖ Creed
said. ―I‘m confident that his vision, leadership and focus on people will continue to make Taco Bell one of the
world‘s most relevant lifestyle brands.‖ Niccol also chairs the chain‘s Taco Bell Foundation for Teens, which works
with the Boys & Girls Club of America to provide $30 million in grants to help teenagers graduate from high school.
Prior to joining Taco Bell, Niccol served as general manager and chief marketing officer for sister brand Pizza Hut
USA. He also held several brand management positions at Procter & Gamble. – Source: Taco Bell Corp.
Thank you for reading The Global Foodservice E-newsletter from American Recruiters!
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