Thursday, May 15, 2014
Yum Brands Names New CEO
The CEO of Taco Bell is soon to become chief executive of parent company Yum Brands, Yum announced recently.
Yum, which also owns fast-food giants Pizza Hut and KFC, said Greg Creed, who has played a pivotal role in
turning-around Taco Bell in recent years, will become CEO of Yum next year. The current CEO, David Novak, 61,
will become executive chairman. The moves take effect Jan. 1. Yum Brands stock was down 1%, about 77 cents, at
76.22 in early trading last week. For Yum, it's a clear move to keep the innovation fire burning at all of its fast-food
mega-brands with an executive who has international experience at all of the chains. Creed, 56, is widely credited
with turning Taco Bell into a new products and marketing juggernaut following years of nagging problems around
and questions about the quality of its food. The Doritos Locos Tacos that the chain rolled out two years ago —
placing tacos in Doritos shells — is widely regarded as one of the fast-food industry's most innovative new products
in years. Yum has been working hard — with some recent success — to regain customers in China after an outbreak
of avian flu last year. At the same time, an investigation of one of its suppliers hurt demand in the Asian nation.
Most recently, Taco Bell has begun a massive and high-profile breakfast menu roll-out that's poked fun at
McDonald's and generated wide consumer awareness. But there's still some question if Taco Bell can chip away at
the stranglehold McDonald's holds on breakfast. KFC has lost its edge in recent years as folks increasingly move
away from fried chicken products, and this year KFC was even replaced by Chick-fil-A as the top chicken chain,
according to the research firm Technomic. Pizza Hut, meanwhile, has had success with its $10 any pizza promotion
that comes and goes, but it's faced increasing competition from pizza rivals. Creed has been Taco Bell CEO since
February 2011. He was chief concept officer and president at Taco Bell from December 2006 to February 2011.
Before that, he was chief marketing officer of KFC and Pizza Hut businesses in Australia. Before that, he worked in
marketing at Unilever. Yum also said it will form an office of the chairman that includes Novak, Creed and Sam Su,
the 62-year-old head of the company's ever-critical unit in China. – Source: USA Today.
Subway Tests New Products and Potential for 8,000 more U.S. Eateries
The closely held sandwich chain, which has more than 26,600 U.S. locations, has room to add 7,000 to 8,000 more
domestic eateries, co-founder and Chief Executive Officer Fred DeLuca said last week. "Maybe it will take 10 years
or so," he said in a telephone interview. "If we do a good job building consumer demand, that number might change
and be higher." DeLuca also disclosed that Subway has started testing hummus as a sandwich topping as it seeks to
maintain its appeal among health-conscious consumers. Subway's expansion and tests are taking place at a time of
growing competition among fast-food chains that has hampered their ability to boost U.S. revenue. McDonald's said
two weeks ago that sales at its established U.S. locations fell for the fifth straight month in March as "challenging
industry dynamics" slowed customer traffic. DeLuca, 66, opened the first Subway sandwich store in 1965 in
Bridgeport, Conn. Since then, the company has expanded through franchising, attracting customers with lowercalorie and reduced-sodium submarine sandwiches. It also has accelerated growth abroad and now has more than
41,700 stores worldwide, making it larger than McDonald's in terms of locations. Hummus, a spread made of
mashed chickpeas, is being tested as a topping for an additional charge, similar to avocados, Chief Marketing
Officer Tony Pace said in a separate interview. The trial is being conducted at about 1,000 stores, he said. "We have
to see how consumers respond to it," said Pace, adding that hummus is a nice complement to veggie and chicken
sandwiches. "It may warrant additional testing or expanded testing, and then we'll see how it goes from there."
DeLuca, who worked in a reduced capacity while he was treated for leukemia last year, said he is back in the office
every day. There are no plans to sell the Milford, Connecticut- based company, which is owned by Doctor's
Associates Inc., or to take it public, he said. – Source: Bloomberg News/The Chicago Tribune.
Darden Restaurants to End Combination of Olive Garden and Red Lobster Restaurants
Two of the six combo operations, in Thomasville, Ga. and Beaufort, S.C., closed over the weekend. Darden will
convert four others, including one in Palm Coast, into stand-alone Olive Gardens. Darden said it would no longer
operate the hybrids because of its plans to sell or spin off Red Lobster. Darden launched the experiment three years
ago in smaller markets. In the set-up, Olive Garden and Red Lobster share a kitchen but have separate entrances and
dining rooms. The restaurants also opened in Brunswick, Ga.; Waycross, Ga.; and Wilkesboro, N.C. Darden said
those areas, along with Palm Coast, should generate enough business to support full-sized Olive Gardens. Darden
spokesman Rich Jeffers said he did not know when the company would convert the remaining restaurants. The Olive
Garden sides should stay open during the couple of weeks it will take to change the Red Lobster sections, he said.
Typically, quick-service chains have placed two brands side-by-side in one building. KFC and Taco Bell often share
space. So do Baskin-Robbins and Dunkin' Donuts. Such combos are unusual for sit-down restaurants. "I don't know
if it plays that well in casual dining, or other people would have tried it," said analyst Lynne Collier, who covers
Darden for Sterne Agee. "It was an effort for them to reduce their investment costs and improve their store level
returns. My guess is it's not something they'll do again anytime soon." In fact, Jeffers said Darden has no immediate
plans to try the concept with its other big brand, LongHorn Steakhouse. Instead, it wants to focus on turning around
Olive Garden, where sales have been declining. "We definitely learned a lot," Jeffers said. "We'll certainly continue
to evaluate what we learned and see what the future might hold." Meanwhile, he said, Darden has offered jobs in its
other nearby restaurants to the 200 employees who worked in Beaufort and Thomasville. – Source: The Orlando
Sentinel.
High-Octane Burger Chain From New Zealand Aims at the U.S.
Inside the headquarters of BurgerFuel Worldwide is a spray-painted mural of a skull wearing a combat helmet
emblazoned with the slogan ―Born to Grill.‖ Executives at BurgerFuel, a New Zealand fast-food chain, say the
image — a takeoff on the film ―Full Metal Jacket‖ — reflects the company‘s attitude. This year, BurgerFuel, a
relatively small player, is undertaking an ambitious expansion plan in the crowded American market through a
partnership with Subway restaurants, an industry giant. The partnership is unique, BurgerFuel‘s group chief
executive, Josef Roberts, said, sitting in a boardroom in the company‘s office in Grey Lynn, an Auckland suburb. ―I
don‘t know of anyone else who‘s got this sort of opportunity to hitch their wagon to such a huge freight train.‖
Subway, operated by Doctor‘s Associates, is the world‘s largest fast-food chain by number of stores, with revenue
of $12.05 billion in 2012, according to the research firm Euromonitor International. BurgerFuel, by comparison, is
small fry, with 12 million New Zealand dollars, or about $10.3 million, in revenue in its 2013 annual report. In New
Zealand, the company ranks just 11th in market share in the fast-food industry and fourth in hamburger fast-food
chains, according to data supplied by Euromonitor International. BurgerFuel hopes to use Subway‘s scale in the
United States by signing up some of its franchisees to open BurgerFuel stores. The company has already been taking
registrations from interested Subway franchise owners. In January, BurgerFuel signed a partnership with Franchise
Brands, based in Connecticut, a company set up by the Subway founders Frederick A. DeLuca and Peter Buck to
support small and midsize companies. Franchise Brands is aiming to support BurgerFuel‘s expansion efforts in the
United States with business mentoring and legal advice. Franchise Brands has also bought a 10 percent stake in the
New Zealand company for 8.05 million New Zealand dollars, with the option to expand its holdings to 50 percent
over the next eight years. Franchise Brands‘ managing director, Lisa M. Oak, declined to comment directly, saying
by email that the company was ―excited to be an investor.‖ BurgerFuel began selling burgers in 1995 with a single
restaurant in the Auckland suburb of Ponsonby. Since then, it has expanded to 57 outlets in New Zealand and
overseas. The emphasis on cars and combustion is a crucial part of BurgerFuel‘s image. The menu items have names
like Bacon Backfire, Burnout and Low Carborator, and the company has a fleet of muscle cars painted with its logo
and color scheme. The burgers are marketed as having high-quality ingredients, including fresh vegetables and aioli
sauce, New Zealand beef from grass-fed cows and vegetarian options. Recently the company announced it would
use only free-range chicken in its New Zealand restaurants. And although Mr. Roberts said he could not commit to
doing the same in the United States, he said attracting ethical and health-conscious consumers was important. Before
eyeing the United States, BurgerFuel focused on the Middle East, and it now has many franchises in Saudi Arabia
and the United Arab Emirates. The company signed its first Middle East licensing partner, in Dubai, in 2011. ―We
went to the Middle East because there was wealth, there was an ambition and a market that was ambitious for
higher-tier brands, and, yeah, there was a lot of youth,‖ he said. ―Our concept was simple: We‘ll go to Dubai. We‘ll
set up an amazing store in a good location — and we kind of saw that as a permanent sort of trade exhibition center
for BurgerFuel — and we‘ll see if we can attract interest globally from there.‖ The Middle East has been a standout.
Sales were up 95 percent to 16.7 million New Zealand dollars in the region as the company added five stores there
in the year that ended in March 2013. The only other outlet outside New Zealand is in Sydney, Australia. The focus
on the Middle East has also led to projects in unexpected areas. BurgerFuel has opened a store in Iraqi Kurdistan,
and a spokesman for the company said the first of three stores in Egypt was scheduled to open this weekend. A store
in Kuwait is also expected to open soon. The United States presents its own challenges for BurgerFuel. The fastfood business is already crowded, with 256,000 outlets and $204 billion in sales, according to Euromonitor
International figures from 2012, the most recent data available. Elizabeth Friend, a senior research analyst at
Euromonitor International, said there was still some room in the upscale hamburger industry, which BurgerFuel is
aiming at. But she said the company would have to distinguish itself from brands like Five Guys, Epic Burger,
Umami Burger, Shake Shack and In-N-Out Burger. ―The better burger segment in the U.S. is highly saturated in
terms of concepts, but not necessarily in terms of actual outlets,‖ Ms. Friend said. ―The novelty of the specific
‗better burger‘ model has worn off to the point where this positioning alone is no longer enough to set a brand apart.
BurgerFuel will have to offer something truly better if they want to survive.‖ – Source: The New York Times.
International Meal Co. to Expand Margaritaville in Nontraditional Locations
Brazil-based International Meal Co., the Margaritaville franchisee that bought the casual-dining brand and its assets
from Orlando, Fla.-based parent Margaritaville Enterprises LLC last month, is planning to expand, especially in
captive-market locations like airports and stadiums, executives said. IMC, which owns a number of restaurant
brands and franchises three Darden Restaurants Inc. concepts, plans to open 55 to 60 restaurants a year and has a
development team that is working to bring the concept to airports, stadiums and other captive markets, Javier
Gavilán, chief executive of Sao Paolo-based IMC, said in an interview. ―[Growth] was the main motivation [behind
the deal],‖ said John Cohlan, chief executive of Margaritaville Enterprises. ―They [IMC] are better able to grow the
brand in terms of financial resources and depth of management.‖ Gavilán said that additional Margaritaville units
are already planned for the airports in Sao Paolo and in the Dominican Republic. He noted that the company is
aiming for high-traffic locations where many of the clients are travelers and likely familiar with Jimmy Buffet, who
opened the first Margaritaville in Key West, Fla., and his music. Existing units range from less than 2,000 square
feet to more than 10,000 square feet, in the case of the San Juan, Puerto Rico, airport location, Gavilán said, adding
that future locations will be 2,000 square feet or more in size. ―You will see different versions and sizes that will
deliver the same ambience,‖ he said. Margaritaville currently has 18 U.S. units, a spokesman said, and owns two
LandShark Bar and Grill units, which were also part of the deal. A Margaritaville is scheduled to open in Pigeon
Forge, Tenn., in late spring or early summer, he said. The brand has 13 units internationally. IMC plans to keep
Margaritaville management in Orlando, the executives said. IMC opened its first franchised Margaritaville about
four years ago, after an IMC employee encountered the concept while vacationing in Las Vegas, Cohlan said.
―We‘ve been in business together for several years,‖ said Cohlan of IMC. ―We‘ve gotten to know each other very
well. They are fantastic operators.‖ Gavilán said the addition of Margaritaville helped round out IMC‘s portfolio.
―We looked at what we needed to have a full group of brands,‖ he said. ―Definitely Margaritaville fit right
in.‖ Gavilán visited all the U.S. locations before finalizing the IMC deal. ―We did a lot of research before we
finished this agreement, and one of traits we found was that the brand is about having a good time,‖ he said. IMC,
which currently owns and operates 386 restaurants in Brazil, the Caribbean and Mexico, last year signed with
Darden to develop as many as 57 Red Lobster, Olive Garden and LongHorn Steakhouse units in Latin America. The
company‘s flagship brands in Brazil are Frango Assado and Viena. Since 2006, IMC has worked with Advent
International, a private-equity firm with more than $24 billion in cumulative capital, to fund its expansion, the
company said. –Source: NRN.
Guerrero Named Chief Global Supply Chain Officer of Bloomin’ Brands
Juan Guerrero has joined Bloomin‘ Brands as senior vice president and chief global supply chain officer. Previously,
Guerrero was executive vice president of North America retail for Office Depot. He also held leadership positions at
Yum! Brands and Starbucks Corp. Guerrero ―has deep international experience that will benefit our global
procurement strategy,‖ CEO Liz Smith said on an earnings call last week. Tampa-based Bloomin‘ Brands
(NASDAQ: BLMN) is the parent of Outback Steakhouse, Carrabba‘s Italian Grill, Bonefish Grill, Fleming‘s Prime
Steakhouse & Wine Bar and Roy‘s. – Source: Tampa Bay Business Journal.
Mexico's Alsea Cleared to Buy Walmex's Vips Restaurant Chain
Mexican restaurant operator Alsea said on Monday it received regulatory approval to purchase retailer Walmex's
Vips restaurant chain, with the deal set to be finalized in the coming days. Alsea, which runs Domino's Pizza,
Starbucks and Burger King franchises in Mexico, agreed to buy Walmex's 361 restaurants in September for 8.2
billion pesos ($630.85 million). The transaction had been held up by Mexico's competition watchdog, which made
the deal conditional on Alsea providing information about exclusivity agreements with the malls in which it
operates, and eliminating 54 exclusive clauses in contracts with malls. Alsea said the deal would initially be
financed with a long-term 3 billion peso bank loan, and a 12-month bridge loan of 5.2 billion pesos. "Alsea and
Walmex estimate that the deal will be finalized in the coming days," Alsea said in a statement. – Source: Reuters.
LVMH Buys Controlling Stake in Singaporean Restaurant Chain
As dining out by Asian families and young professionals grows in popularity, private equity investors have shown
an appetite too. The latest investment speaks to a love for pan-friend pork buns, turnip pastries and other tasty
Cantonese treats. Luxury giant LVMH – Moet Hennessey Louis Vuitton SA -- is spending more than $100 million
for a larger than 90% stake in Chinese restaurant chain Crystal Jade, according to Christina Teo, managing director
at LVMH‘s private equity arm. The private equity arm, L Capital Asia, had been looking at Crystal Jade for three
years, Ms. Teo said in an interview recently. The sale was in part because Crystal Jade Chairman and
CEO Ip Yiu Tung, at 65 years old, is looking to step back in his role with the firm. Mr. Tung‘s majority stake will be
reduced to a minority stake, although he will remain as CEO for about one year after the ownership handover.
Crystal Jade, founded in 1991, specializes in Cantonese cuisine, including dim sum, handmade noodles and baked
goods. The firm is based in Singapore and has over one hundred outlets across Asia, including in China, Hong Kong
and a number of Southeast Asian countries. LVMH plans to help the chain enter new countries, as well as expand
deeper into China, where the chain‘s current presence is mostly limited to first tier cities. LVMH has the
international infrastructure and experience to help the restaurant chain get better rental locations globally, increase
its wine offerings, improve branding and expand its footprint not just in China, said Ms. Teo. She added that the
restaurant‘s China operations haven‘t been hurt by the country‘s push for officials to cut back on lavishing spending
including fine dining, because Crystal Jade offers cuisine at a wide range of price points. Investors considering
luxury brands and high-end restaurants have been wary that such businesses are more susceptible to the austerity
drive starting under Presiden Xi Jinping in 2012. According to Ms. Teo, Crystal Jade‘s revenue has been growing at
20% each year since its founding. L Capital is investing from its second Asia fund, which raised $1 billion this
year. The fund has also invested in Australian apparel maker 2XU and Italian luxury shoe brand Giuseppe Zanotti.
After Crystal Jade, the fund plans to invest in a Chinese online fashion company, said Ms. Teo. – Source: The Wall
Street Journal.
Dunkin' Donuts Readies to Do Battle in Europe
The doughnut, that classic deep-fried American snack, is going forth to do battle with European national treats in
their homelands: the Belgian waffle, the Austrian strudel and the Danish ... Danish. After beating a retreat in the
1990s, American restaurant chain Dunkin' Donuts has been quietly building up its presence in Europe and now has
120 outlets, mostly in Germany but also in Russia, Spain, Bulgaria and most recently, Britain. Dunkin' Donuts' head
of international development Jeremy Vitaro says that the company is now looking to open stores in Denmark,
Austria, Belgium and the Netherlands. Despite the weak European economy, it thinks customers have money to
spend. "They're sophisticated, and they're culturally very open (to trying new foods)," he said. Dunkin' Donuts'
mainstays are doughnuts and coffee, along with muffins and more solid lunch foods, such as bagels. Then the chain
offers variations to please local tastes. In London, where the chain has recently opened three shops, it sells a savory
snack called "Bacon Buttie," as well as porridge. Is that porridge as in, well, oatmeal? "Hot cereal, yes," Vitaro says.
"We also do a Croistrami sandwich, that's a pastrami croissant. So we do localize. We have a curry doughnut in
India." Joost Kling, a Dutch food industry entrepreneur, thinks the chain will face something of an uphill battle in
the Netherlands. "They don't have much name recognition, if any," he said. "I think a lot will depend on their staying
power." He wondered about the willingness of the firm to advertise and lose money for a time when stores first
open. Kling has some experience going the opposite direction. His company, "Eat Dutch Waffles," has brought the
Dutch delicacy known as "stroopwafel" — a hot waffle cookie filled with syrup — into 1,000 American stores and
bakeries. He guessed around a half of Dutch people know what doughnuts are, but most have only tried low-quality
versions on offer in grocery stores. "A stroopwafel tastes very different when it's fresh, and it's the same for a
doughnut," he said. Europeans "won't really have any basis for value comparison: they don't know what makes a
good doughnut." In addition, Europeans may feel attachment to their own local delicacies. In Belgium, the Brussels
waffle is light and fluffy and dusted with powdered sugar, while in Liege they're heavier and sweeter, with
caramelized sugar. The "Belgian Waffle" topped with powdered sugar, strawberries and a flourish of whipped cream
is probably an American invention. It's popular in Scandinavia. In Austria, people with a sweet tooth turn to
Apfelstrudel — or Danishes. In Denmark they also eat Danishes, of course. But the Danes in turn call them
"wienerbrod," or 'Viennese bread,' since, as lore has it, the treat was introduced by Austrian bakers once upon a
time. Cinnamon is a favorite flavor. Vitaro said Dunkin' Donuts is already interviewing would-be franchise owners
and plans to open several stores in each new market by the end of 2014, focusing on major cities first, with "many
more" coming in early 2015. "We believe our basic offer of speed and value and fun will connect well with
consumers," he said. "It has so far." – Source: Yahoo/The Associated Press.
Caravel Reveals New Restaurant Design
Carvel has introduced a new design for its full-sized and express locations, the first prototype of which opened in
Royal Palm, Fla., in March. The Focus Brands subsidiary said it plans to open 20 restaurants using the new design in
its core markets of New York, New Jersey, Connecticut, Massachusetts and South Florida over the course of the
next year. ―We‘re real excited about the brand-new shoppe design,‖ president Scott Colwell told Nation‘s
Restaurant News. ―It fits in about 800 to 1,200 square feet. It‘s more contemporary, it‘s inviting and when you come
in it really showcases the broad variety of exciting ice cream products we have. It includes all of our scooped ice
cream, soft-serve ice cream, our Sundae Dashers, and of course we‘re really well known for our ice cream cakes,
and so we have what we call the Wall of Cakes, which is a whole wall devoted to our ice cream cakes. ―It‘s our
Carvel red and white and very high-quality-finishing Corian counters and nice wood-grain tiles on the floor. We
believe it‘s very current and what consumers are looking for today,‖ he added. The ice cream chain, which
celebrates its 80th anniversary this year, also has added digital menu boards and has revamped its logo with what it
calls ―a whimsical illustrated ice cream cone.‖ The chain also introduced a new Salted Caramel Soft Serve flavor, as
well as a scooped salted caramel ice cream that has a caramel swirl and is finished with Heath candy bar pieces. To
go along with the new soft serve, Carvel has developed a salted caramel sundae that starts with the soft serve and is
topped with caramel sauce, Heath bar pieces, another layer each of soft serve, caramel and Heath bar pieces. The
dish is finished with whipped cream and a caramel drizzle. Carvel currently has about 275 full units and 125 express
locations. The latter are in nontraditional venues such as airports, universities, military bases, stadiums and
amusement parks. Many of those units are co-branded with sister brands Cinnabon and Auntie Anne‘s. Carvel said
the total initial investment for a full-sized shoppe ranges from $250,000 to $380,000, depending on the location,
square footage and equipment package. Express shoppes, which range from 100 to 300 square feet in size, require an
estimated initial investment of $30,000 to $120,000. – Source: NRN.
McDonald’s Sets Five ‘Pillars’ for Sustainability Framework. Fast-food Chain Identifies 'Aspirational Goals'
it Hopes to Achieve by 2020
For the first time, McDonald‘s Corp. is placing an emphasis on specific, measurable sustainability improvements.
The fast-food chain, which has issued a Corporate Sustainability Report every year or two, on April 30 issued its
first report to contain a framework with aspirational goals it would like to achieve by 2020. The framework is in
contrast to reports of the past, which have steered clear of setting specific targets. ―We‘ve worked diligently to
develop this C.S.R. & Sustainability Framework focused on five key areas — food, sourcing, planet, people and
community,‖ J.C. Gonzalez-Mendez, senior vice-president of global C.S.R., sustainability and philanthropy at
McDonald‘s, noted in the report. ―These pillars are central to our commitment to create shared value for our
business and society. ―In the course of developing this blueprint for our work in the area of C.S.R. and
sustainability, we‘ve methodically developed distinct, forward-looking goals. These goals will serve to focus us on a
long-term view of the social and environmental business imperatives that will help shape our future. McDonald‘s is
working system-wide to meet or exceed these goals.‖ McDonald‘s has established long-term, measurable goals for
three of its five C.S.R. and sustainability pillars. In food, McDonald‘s has set a 2020 goal of serving 100% more
fruit, vegetables, low-fat dairy or whole grains in nine of its top markets (Australia, Brazil, Canada, China, France,
Germany, Japan, United Kingdom, United States). The fast-food chain also plans to develop goals in 2015 for the
nine markets to reduce salt/sodium, sugar, saturated fat or calories across the menu by 2020. ―Evolving to meet the
preferences of our customers is critical to our success at McDonald‘s,‖ Erik Hess, senior vice-president of global
consumer insights, menu and brand strategy, said in the report. ―We know that quality, choice and nutrition are
increasingly important to customers, and we‘re committed to continuously meeting their needs.‖ In sourcing,
McDonald‘s said it will lead development of global principles and criteria in 2014 to support sustainable production
of beef, with plans to develop goals and begin purchasing verified sustainable beef by 2016. Also by 2020, the
company plans to have 100% of its coffee, palm oil and fish verified as supporting sustainable production, and
100% of its fiber-based packaging from certified or recycled sources. ―I am so excited about our strategy because I
believe we have a real opportunity to mainstream sustainable beef globally,‖ said Francesca Debiase, vice-president
of strategic sourcing, worldwide supply chain management. ―Our goal is to be a leader in this area and to be the first
in our industry to purchase externally verified sustainable beef around the world, but we cannot do this alone. Our
partnership with the Global Roundtable for Sustainable Beef — as well as our work with beef suppliers and farmers
— will ensure that what we develop can be practically realized at the farm level.‖ A third pillar with 2020
aspirational goals is planet. McDonald‘s has targeted a 20% increase in energy efficiency of company-owned
restaurants in seven of its top nine markets (excluding Brazil and Japan) by 2020, with plans to develop franchisee
goals in 2016. McDonald‘s also this year will begin developing goals to increase energy efficiency through
restaurant standards in its top nine markets, and by 2020 plans to increase the amount of in-restaurant recycling to
50% and minimize waste. ―Over my more than 25 years at McDonald‘s, I have seen firsthand how we can capitalize
on the power of the system — across over 35,000 restaurants — to drive shared value across our business,
franchisees, and suppliers,‖ said Ken Koziol, executive vice-president and global chief restaurant officer. ―As we
progress toward our 2020 vision, we have the chance to apply practical, environmental solutions to our operations
that not only do good for the business, but do good for the planet, and ultimately do good for the brand.‖ – Source:
FoodBusinessNews.net.
Food and Franchisees to Fuel Corner Bakery’s Growth
In a corner booth this week at a Corner Bakery Cafe in Dallas, the chief executive tasted some of the newest menu
offerings: buttermilk pancakes and a roasted pork sandwich with cucumbers and pickled jalapeños. Across the room
he spotted a new manager who was handing out samples from the chain‘s staple of sweets. She and a new
franchisee, who were in Dallas for training this week, will open the first of 10 franchised Corner Bakery Cafes in
northeast Florida later this year. The additions — new food and new franchisees — form the twin planks of Corner
Bakery‘s growth platform. Eight years after it was sold by Brinker International, Corner Bakery is looking to double
its number of restaurants within four years. It also hopes to push the annual sales per location beyond the current
$2.3 million, which already is one of the highest in its market segment. ―By the end of 2017, just on the franchising
side, you‘ll probably have 180 more cafes,‖ said Boston native Mike Hislop. He‘s been chief executive of Corner
Bakery Cafe since it was purchased in 2006 by the parent of Il Fornaio, a full-service Italian restaurant and bakery.
―That‘s aggressive growth, but it‘s controlled.‖
Also, he said, since the chain of 165 locations is open for three meals a day and offers catering, ―I think we … can
drive these cafes to $2.5 million pretty easy just by having the product innovation. It‘s pretty exciting.‖ Launched on
a Chicago corner in 1991, Corner Bakery Cafe initially served as the bakery arm of the Maggiano‘s Little Italy
chain. Brinker, the Dallas-based parent of Chili‘s Grill & Bar, bought Corner Bakery and Maggiano‘s in 1995.
Maggiano‘s remains Brinker‘s only non-Chili‘s brand. In 2006, when Corner Bakery had grown to 89 locations,
Brinker sold it to Il Fornaio, which was then owned by private investment firm Bruckmann, Rosser, Sherrill & Co.
of New York. In 2011, Roark Capital Group, an Atlanta-based private equity firm, acquired Il Fornaio (America)
Corp., which included Corner Bakery. The chain‘s Windy City birthplace is its second-largest market, behind
Southern California, with more than 30 locations. There are 19 in Dallas-Fort Worth. All are company-owned and operated and are west of Central Expressway. A location in Denton is expected to open this fall. Sales in 2013 were
$322. 9 million, up nearly 40 percent from 2009. Nearly two-thirds of the chain‘s customers are women, drawn to
offerings such as spinach salad with strawberries, oranges and grapes, and turkey and bacon paninis. Attracting
franchisees: The ultimate aim is to boost sales at each location. Sales per location is known in the industry as
average unit volume. Increasing that number can make a chain more attractive to potential franchisees. ―The
exciting part for us is that we‘ve been able to continue to build the sales,‖ Hislop said, as the dining room at the
Plaza at Preston Center location filled with the lunchtime crowd. ―I think we should be doing more. With what we‘re
doing for breakfast and dinner, there‘s capacity there to grow.‖ Corner Bakery competes in the $34.5 billion fastcasual restaurant segment, the fastest-growing portion of the restaurant industry. Fast-casual restaurants average $1
million a year in sales per location, according to Technomic Inc., a Chicago-based research firm. Panera Bread, the
leader in the bakery cafe segment that also includes Corner Bakery, brings in on average $2.46 million annually per
location. That chain has nearly 1,800 U.S. locations, including 919 owned by franchisees. Hislop said ―a good
number‖ of his locations top $3 million. ―Higher unit volumes are enormously attractive,‖ said Jonathan Maze,
editor of the Restaurant Finance Monitor, a trade publication. ―If you have higher unit volumes, a franchisee can
more easily make a profit. In general, all other things being equal, you‘re going to want to go to the higher volume
store than a lower volume one.‖ Like many restaurant chains, the Corner Bakery store count is growing primarily by
franchising. This year, the company expects to open 25 franchised cafes. Next year, there probably will be 40
locations opened as franchises. In 2016, look for 50. The company‘s 29 ―franchise partners‖ have signed deals to
open more than 350 locations in the next eight years and will expand the chain into markets including Indiana,
Minnesota, Missouri and Tennessee. Camille Lee-Johnson, the new franchisee who wrapped up training in Texas
this week, will be opening her company‘s first Corner Bakery location in Jacksonville, Fla., in September. ―The
ability to expand the catering program and the addition of forward-thinking technology‖ is part of what attracted her,
she said. She also was impressed with Corner Bakery‘s food quality and culture of supporting neighborhoods around
the restaurants. ―I think Corner Bakery has the potential to get to that $2.5 million‖ figure, she said. – Source: The
Dallas Morning News.
Marriott Milestone: Company's 4000th Hotel Now Open
Marriott Hotels has announced the opening of the company's 4,000th hotel – the Marriott Marquis Washington, DC.
A remarkable milestone, this hotel - the capital's largest - also signifies a homecoming for the Marriott family.
Marriott Marquis Washington, DC opens today, 87 years after J. Willard Marriott and Alice S. Marriott opened a
nine-seat root beer stand up the street from the hotel. A landmark hotel for both the District and Marriott Hotels, the
Marriott Marquis Washington, DC features striking design-from an all-glass rooftop to a 56-foot steel sculpture
centerpiece-and cutting-edge technology, from interactive TV's in every guest room to a just-released Marriott
Hotels mobile services app. Connected to the Walter E. Washington Convention Center via an underground
concourse, the Marriott Marquis Washington, DC brings more than 105,000 square feet of meeting space, 1,175
rooms including 49 suites, and five signature dining experiences to its downtown Washington, DC neighborhood.
Situated at 901 Massachusetts Avenue, NW and spanning almost an entire large city block, Marriott Marquis
Washington, DC is one of only five Marriott Marquis properties in the country. "From the nine-seat root beer stand
that my parents started 87 years ago here in Washington, to the milestone opening of our 4,000th hotel, we have
been fortunate to call this town our home," said J.W. Marriott, Jr., executive chairman. "Washington is one of the
world's greatest cities and we are excited to host visitors and groups from across the globe at our newest hotel to fly
the Marriott Hotels flag. The Marriott Marquis Washington, DC also has created more than 500 new jobs, with 63
percent coming from the District." Reimagining how artwork and natural light is present in a hotel, the Marriott
Marquis features bold three-dimensional sculpture pieces that are both visually dramatic and provide integral
functionality to the flow of the hotel. The 44,000-square-foot glass ceiling atop the lobby atrium allows natural light
to stream into all of the hotel's interior-facing rooms as well as its active Greatroom lobby, and even filters into the
below-grade meeting spaces. The Greatroom lobby provides a destination where guests and locals can gather, by
themselves or with friends or colleagues, to relax, socialize and work. Featuring the largest piece of artwork in any
Marriott Hotel, the Marriott Marquis' lobby is home to an extraordinary 56-foot high, 27,000-pound sculpture, The
Birth of the American Flag, by renowned Baltimore-based sculptor Rodney Carroll. Two dramatic 54- and 52-foot
bronze and silver walls, America and Flag, frame the open-air grand staircase to the lobby's terrace. Other
Greatroom lobby design attributes include a cherry blossom branch woven into the running the length of the white
marble lobby floor, glass enclosed fire pit, two other sculptures with water features (Threads That Bond and Stars).
With free Wi-Fi and USB ports and outlets throughout the lobby, hotel guests and locals can work on their laptops
and relax with their own tablets. The hotel's custom designed guestrooms feature a neutral palate, Wi-Fi, and
Marriott Hotels' signature bath amenities by THANN, a natural Thai skincare line. Interior-facing guest rooms and
suites enjoy a spectacular view of the sculpture, while exterior rooms face out with views of downtown Washington,
DC. The Marriott Marquis incorporates the site's historic Samuel Gompers AFL-CIO building, which includes an
upscale lounge, bi-level fitness center and suites. The hotel's elegant glass and masonry exterior enwraps the historic
building with an enormous glass atrium rooftop tying the building together. Marriott Rewards members will have
access to Marriott Marquis' exclusive 6,500-square-foot M Club Lounge with Wi-Fi throughout and an outdoor
terrace seating 81 people. Business travelers will appreciate the state-of-the-art 8,000-square-foot bi-level fitness
center, complimentary for hotel guests only. Built for the athletic guest in mind, the fitness facility features the latest
equipment and tech for cardio, strength and core training. Marriott Marquis Washington, DC was designed by the
renowned Cooper Carry Architects, Atlanta, and TVS Architects, Atlanta, in a joint-venture collaboration, with
interior design by HOK Design. It is planned to be one of the country's largest LEED Silver (Leadership in Energy
and Environmental Design) certified hotels. Marriott Marquis Washington, DC debuts technology throughout: from
interactive LCD televisions in every guest room, allowing guests to stream their own content from their tablet or
mobile device, to the hotel's DAS System (Distributed Antenna System) for a clear wireless signal throughout the
entire hotel, top to bottom. Recognising that guests are dependent on their mobile devices, the hotel will offer the
brand's mobile service apps, designed with the next generation traveler in mind. These include mobile check-in and
checkout; mobile guest services, which allows guests to digitally request everything from an extra towel to a wakeup call; and Red Coat Direct, a first-of-its-kind app that lets meeting planners input and adjust meeting requests with
a swipe of a screen. – Source: Ehotelier.com.
Quaker Steak & Lube Hires New CEO
Sharon-based Quaker Steak & Lube announced it has hired Greg Lippert as its new chief executive officer. He starts
immediately. Lippert comes to Quaker Steak from Mazzio's LLC, where he's served as CEO since 2005, leading its
namesake brand as well as Zio's Italian Kitchen and the newly introduced Oliveto Italian Bistro. Quaker Steak
describes Lippert as a 30-year industry veteran "with extensive experience in restaurant leadership, operations and
marketing." Quaker Steak Chairman Debra Koenig expects Lippert "will be instrumental to our continued growth
and profitability." Lippert takes over as Quaker Steak enters its 40th year in business, having grown to 60 locations
in 19 states as well as Canada. Quaker Steak expects to open 11 restaurants in 2014, including a restaurant that
opened recently in Warren, Ohio. Lippert replaces interim CEO Frederick Dreibholz, formerly Quaker Steak's CFO.
He was named interim CEO in January after the departure of John Longstreet, who had been CEO since 2010. –
Source: Pittsburgh Business Times.
Restaurant at Haley VA Medical Center Offers Food Fit for Heroes
Of the three meat sliders Army Cpl. Jeremy Voels balanced on a plastic foam plate, he ranked the flank steak the
best. "Amazing," Voels said. Chef Gordon Lippe had marinated the meat for three days before cooking it that
morning, he told Voels. The sliders were a sample of more to come at the opening Monday of the American Heroes'
Café at the James A. Haley VA Medical Center. It's the first restaurant nationwide run by a food service within a
veterans hospital, said Kathleen Fogarty, the director of the medical center. And a big improvement over the
cafeteria-style meals Voels had become used to from food service at Haley, he said. Voels lived in a bed there for
eight months after a sniper shot him in Afghanistan in 2010, shattering his vertebra and leaving him paralyzed. In
the past, when he was feeling up to it, Voels would send someone to get him wings from Hooters. "It's our version,
without the girls," Fogarty joked with Voels recently. The restaurant was dreamed up by Teresa Hellings, former
chief of nutrition and food services, who realized the importance of rehabbing the mind to rehab the body. It was on
the shelf when Fogarty arrived three years ago and decided to make it a priority. "Food is one of the few things a
person can control while in a hospital," she said. "We want to give them a choice — a cheeseburger or a panini —
and a chance to experience the social aspect of what it's like to go to a restaurant. "To heal, we have to envision how
life will be outside of the hospital," Fogarty said. The cafe starts this week serving about 100 lunches each day to
patients and their families with plans to expand to dinner and then breakfast. Hired in 2012, Lippe started designing
the menu through patient taste tests on Thursdays. One day, he dished out squares of the cafeteria's regular lasagna,
decorated with fresh basil leaves. The patients raved, calling it as good as mom's, and far better than the lasagna that
arrived from the cafeteria bedside on a tray. It was a matter of presentation, Lippe said. Now when an order comes
into the restaurant for room service, it goes out under a black warmer with silver cutlery. Knowing people like to try
new foods, Lippe mixed flavors: chipotle gouda mac-n-cheese; a side of tomato, cucumber, black bean and jicama
slaw; fruit smoothies, seasonal vegetables and goat cheese risotto. He makes 90 percent of the meals from scratch in
the kitchen. Patients order through a computer that monitors their personal health needs, counting calories,
carbohydrates and salt. On Monday, Lippe replaced fruits and sliders as dozens of patients and staffers lined up to
try them out. He pointed out desserts to one patient: "French creme bars, vanilla bean mousse and some of the
world's biggest strawberries." – Source: Tampa Bay Times.
Good Times Restaurants Inc. Announces New Board Member
Good Times Restaurants Inc. announced that its board of directors has approved Robert Stetson as a new member of
the board. Mr. Stetson has had a substantial career in the restaurant and restaurant property businesses. He is the
former Chief Financial Officer and President-Restaurant Division of Burger King Corp. and former Chief Financial
Officer of Pizza Hut Inc. Beginning in 1994, Mr. Stetson built one of the largest public REITs focused on restaurant
properties development, which merged into GE Capital. He is currently the founder and CEO of U.S. Restaurant
Properties, again among the largest private companies in the restaurant property industry. The Company also
reported that Hoak Public Equities, L.P., a Texas limited partnership (―Hoak‖) and Rest Redux LLC, a Texas limited
liability company with which Robert Stetson is affiliated (―ReRe,‖ and collectively with Hoak, the ―Investors‖), on
May 3, 2014 entered into a Purchase Agreement with Small Island Investments Limited, the Company‘s largest
shareholder (―SII‖), under which SII agreed to sell in a private placement pursuant to Section 4(a)(2) of the
Securities Act of 1933 and the Investors agreed to purchase, 1,000,000 shares of Good Times Restaurants, Inc.,
common stock in equal portions of 500,000 shares each, at a purchase price of $3.05 per share, equal to an aggregate
purchase price of $3,050,000, and that the Company had entered into a Registration Rights Agreement with the
Investors that has been filed under a form 8k with the Securities and Exchange Commission. SII continues to own in
excess of 1,000,000 shares of the Company's common stock after this transaction Good Times Restaurants Inc. –
Source: Good Times Restaurants Inc.
Starwood Plans Expansion across Canada to Reach 70 Properties in Next 12 Months
Starwood Hotels & Resorts Worldwide has announced that it will expand its Canadian portfolio to 70 hotels within
the next 12 months. The Aloft Calgary University, Starwood's first Aloft hotel in Western Canada, opened last
month, following the February opening of Four Points Waterloo-Kitchener Hotel & Suites. The momentum
continues with the upcoming openings of Four Points Regina, Four Points Surrey, Four Points Moncton and the
Element Vancouver Metrotown. This activity comes after a strong 2013, which included the openings of Four Points
Edmonton International Airport, Four Points Kelowna Airport, Four Points Edmundston and Element Vaughan
Southwest, maintaining Canada's position as Starwood's second largest market outside the U.S. Starwood's Specialty
Select Brands (SSB) are continuing to drive positive momentum and fuelling growth across the country,
underscoring the company's long-term development strategy to grow its Aloft, Element and Four Points by Sheraton
brands, increasingly in secondary and tertiary cities where there is strong demand for domestic business travel.
Currently, Starwood has 30 hotels under these three brands across Canada, the largest SSB portfolio outside of the
U.S., with plans to grow to 35 operating hotels by the end of first quarter 2015. Four Points is Starwood's most
prolific brand in Canada with 27 hotels. Boasting the second largest global pipeline of all of Starwood's brands, Four
Points is a key player in a new generation of mid-market hotels. The company has recently signed agreements for
two new hotels, including Four Points Estevan, SK. and Four Points Lloydminster, SK. Starwood's latest brand
innovation, Element made a strong debut in Canada in June 2013 in Vaughan, Ontario. Canada's second Element,
Element Vancouver Metrotown is progressing towards its opening in the first quarter of next year with two
additional Western Canada Element hotels slated to break ground this year - Element Calgary Airport and Element
Edmonton West. Starwood's Aloft brand recently entered Western Canada with the opening of Aloft Calgary
University. The hotel, which was a conversion, marked the third Aloft in Canada joining Aloft Montreal Airport and
Aloft Vaughan Mills. – Source: Ehotelier.com.
Thank you for reading The Global Foodservice E-newsletter from American Recruiters!
Craig Wilson
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cwilson@ariteam.com
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312-780-7508
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847-909-1237
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312-780-7509
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504-451-7395
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312-780-7507
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