Forbes.com
Brendan Coffey
March 16, 2011
That $6 billion Groupon's Eric Lefkosky turned down from Google last year is probably looking a little better now.
The Massachusetts Alcohol Beverage Control Board, aka the no-fun guys, have told Groupon it appears to have been violating the state's laws on discounting booze since its inception. Here's part of the letter sent to the company in February, as reported yesterday by the Boston Globe:
"I am hopeful that the long-established, clear, bright lines of the boundaries of legality have not vanished in the rear-view mirror of entreprenurism driven by unbridled and imprudent, if not reckless, enthusiasm," william A. Kelley Jr., the commission's legal counsel, wrote to Groupon in the February letter.
That takes a bit of the shine off the discount deals, now that beer, wine and sangria are excluded from your $50 Groupon to Beefsteak Charlie's. Yesterday's deal for an Essex restaurant had a blodfaced "Not valid toward alcohol" on the offer.
click here to read the full article.
Showing posts with label restaurants. Show all posts
Showing posts with label restaurants. Show all posts
Thursday, March 17, 2011
Wednesday, July 7, 2010
Check out Thirst rises for liquor licenses in Marion County
Thirst rises for liquor licenses in Marion County
IBJ.com
Finding the golden ticket of a liquor license in Indianapolis can be tricky—and costly. All 321 permits allowed in Marion County under a state quota have been allotted. Unless a restaurant is opening in an “off-quota” district, the owner has to find someone willing to transfer an existing license.
Contact me to find out more about existing bars/restaurants for sale in Indianapolis!
Inbizsales@aol.com
IBJ.com
Finding the golden ticket of a liquor license in Indianapolis can be tricky—and costly. All 321 permits allowed in Marion County under a state quota have been allotted. Unless a restaurant is opening in an “off-quota” district, the owner has to find someone willing to transfer an existing license.
Contact me to find out more about existing bars/restaurants for sale in Indianapolis!
Inbizsales@aol.com
Monday, January 25, 2010
Nation's Restaurant News Article
8 ways to build full-service sales
By Ron Ruggless
WASHINGTON (Jan. 22, 2010) While full-service restaurant sales aren't expected to rebound as quickly as in other industry segments, the National Restaurant Association offers eight ways that table-service operators can weigh the odds of recovery in their favor and build much-needed sales.
In its "2010 Restaurant Industry Forecast" the NRA expects full-service restaurant sales in 2010 to grow at a lesser pace than the industry as a whole, like it has for years as the segment takes big hits from consumers trading down and quick-service competitors increasing quality offerings.
Full-service sales are expected to total $184.2 billion in 2010, a 1.2 percent increase from 2009, while industry sales are expected to total $580.1 billion, a 2.5 percent jump. Even worse, after accounting for inflation, real full-service segment sales are expected to decline 1.5 percent in 2010. That follows on the heels of a 2009 decline of 6.2 percent.
“One of the primary differences in this past recessionary period compared to historical recessionary periods is that the higher-income households — the prime table-service market — reported substantial decreases in net worth as well as confidence,” said Hudson Riehle, the NRA’s senior vice president of research and knowledge.
Indeed, full-service operators, from lower-priced casual-dining chains to high-end independent operators have bore the brunt of this latest recession. Casual-dining chains have posted the largest same-store sales declines throughout the industry, and high-end independent operations have posted the largest numbers of closures.
Here are eight ways the NRA suggests full-service restaurants can build their business in a flat segment of the industry:
1. Offer value. NRA surveys found operators expected a third of fine-dining customers, 46 percent of family-dining patrons and 40 percent of casual-dining guests to be more value conscious in 2010 vs. 2009. Frequent-dining or loyalty programs are likely to be more popular.
2. Use social media. Among operators not using Facebook, an NRA survey found four of every 10 plan to create a presence in 2010. About a fifth of full-service operators planned to use YouTube or similar video-sharing sites. Users of social sites such as Yelp and Twitter are expected to increase this year.
3. Market via e-mail. Already seven of every 10 fine-dining establishments keep in touch with customers via e-mail, but only half of casual-dining operators and a third of family-dining operations do so. An NRA survey found 41 percent of customers say they try a new restaurant because of e-mailed promotions, and 54 percent learn about restaurants on the Internet.
4. Create events. Restaurants can offer private tastings or events. The NRA found 64 percent of adults surveyed would attend chef’s table dinners and private tastings.
5. Boost off-premise offerings. Nearly three in every 10 adults surveyed by the NRA said take-out food is essential to the way they live, so to-go and catering has sales-growth potential.
6. Market green initiatives. About four in 10 consumers said they were likely to pick a restaurant based on its conservation practices, and about seven in 10 were more likely to choose a restaurant if it featured locally produced ingredients.
7. Tap technology. Online ordering offers room for growth and less than 2 percent of full-service restaurants provide a tableside ordering or payment option.
8. Emphasize health. Half of adults surveyed said table-service restaurants provide easy ways for them to choose portion sizes.
By Ron Ruggless
WASHINGTON (Jan. 22, 2010) While full-service restaurant sales aren't expected to rebound as quickly as in other industry segments, the National Restaurant Association offers eight ways that table-service operators can weigh the odds of recovery in their favor and build much-needed sales.
In its "2010 Restaurant Industry Forecast" the NRA expects full-service restaurant sales in 2010 to grow at a lesser pace than the industry as a whole, like it has for years as the segment takes big hits from consumers trading down and quick-service competitors increasing quality offerings.
Full-service sales are expected to total $184.2 billion in 2010, a 1.2 percent increase from 2009, while industry sales are expected to total $580.1 billion, a 2.5 percent jump. Even worse, after accounting for inflation, real full-service segment sales are expected to decline 1.5 percent in 2010. That follows on the heels of a 2009 decline of 6.2 percent.
“One of the primary differences in this past recessionary period compared to historical recessionary periods is that the higher-income households — the prime table-service market — reported substantial decreases in net worth as well as confidence,” said Hudson Riehle, the NRA’s senior vice president of research and knowledge.
Indeed, full-service operators, from lower-priced casual-dining chains to high-end independent operators have bore the brunt of this latest recession. Casual-dining chains have posted the largest same-store sales declines throughout the industry, and high-end independent operations have posted the largest numbers of closures.
Here are eight ways the NRA suggests full-service restaurants can build their business in a flat segment of the industry:
1. Offer value. NRA surveys found operators expected a third of fine-dining customers, 46 percent of family-dining patrons and 40 percent of casual-dining guests to be more value conscious in 2010 vs. 2009. Frequent-dining or loyalty programs are likely to be more popular.
2. Use social media. Among operators not using Facebook, an NRA survey found four of every 10 plan to create a presence in 2010. About a fifth of full-service operators planned to use YouTube or similar video-sharing sites. Users of social sites such as Yelp and Twitter are expected to increase this year.
3. Market via e-mail. Already seven of every 10 fine-dining establishments keep in touch with customers via e-mail, but only half of casual-dining operators and a third of family-dining operations do so. An NRA survey found 41 percent of customers say they try a new restaurant because of e-mailed promotions, and 54 percent learn about restaurants on the Internet.
4. Create events. Restaurants can offer private tastings or events. The NRA found 64 percent of adults surveyed would attend chef’s table dinners and private tastings.
5. Boost off-premise offerings. Nearly three in every 10 adults surveyed by the NRA said take-out food is essential to the way they live, so to-go and catering has sales-growth potential.
6. Market green initiatives. About four in 10 consumers said they were likely to pick a restaurant based on its conservation practices, and about seven in 10 were more likely to choose a restaurant if it featured locally produced ingredients.
7. Tap technology. Online ordering offers room for growth and less than 2 percent of full-service restaurants provide a tableside ordering or payment option.
8. Emphasize health. Half of adults surveyed said table-service restaurants provide easy ways for them to choose portion sizes.
Tuesday, December 8, 2009
Restaurant Bartering?
The Wall Street Journal
In Lean Times, Restaurants Barter for Trade Services
By JULIE JARGON
Independent restaurants are turning to an old-fashioned method to fill tables—barter.
As they struggle to keep customers and pay the monthly bills, restaurants are swapping food for services like oven-hood cleaning and pest control.
Bartering helps restaurants fill seats, reassuring prospective customers who might be turned off by the sight of a vacant eatery. It also attracts new customers when tradespeople bring friends along, reduces some costs, and helps retain employees who can't scoop tips off empty tables.
It's hardly a permanent fix for ailing restaurants, which still need cash to cover such expenses as rent, mortgages, taxes and utilities. But bartering is an especially useful tool for independent restaurants that, unlike some chains, lack access to corporate credit lines or cash.
Many restaurants are using barter exchanges that track and manage the transactions, which count as taxable income and must be recorded for tax purposes. Rather than traditional bartering, in which services are swapped directly between vendors, most barter exchanges use a "round robin" approach that offers flexibility for both restaurants and service people. For example, a plumber uses trade credits accumulated at an exchange to pay for a restaurant meal. The restaurant owner can use the credits spent by the plumber to "purchase" a variety of services offered by appliance repairmen, electricians and other exchange clients. The exchange acts as a bank, keeping track of credits and collecting fees on each transaction.
Tony Romano, owner of Marcello's Pasta Grill in Tempe, Ariz., where business is off 40% from three years ago, joined the Arizona Trade Exchange in October. Since joining the exchange, he says he's been averaging $2,000 per week in trade credits from tradespeople, which has allowed him to pay for almost all of his monthly expenses—from laundry to fire-extinguisher maintenance—without writing a check.
Although the restaurant doesn't receive cash for the food, the tradespeople usually tip well, Mr. Romano says, which keeps his wait staff happy.
He says his traffic has increased 10% in the last month. New exchange clients also have led to catering jobs. "A lot of small businesses can't afford to take their employees out for a Christmas party, but they can barter it," he says. "I've booked two lawyers' offices and three dentists' holiday parties."
Independent restaurants have fared slightly better in the last year than chain restaurants, though it's hard to say how much bartering has helped. Same-store sales at independent restaurants declined 9% for the year ended Sept. 30, while same-store sales at chains declined 9.7% during that time, according to restaurant consulting firm Technomic Inc.
Rob Miller, president of the Arizona Trade Exchange, says he now has more than 30 restaurants involved in his exchange, up 20% from a year ago. The exchange charges a one-time $495 membership fee as well as a $12.50 monthly fee, and takes a 12% cut of each transaction from the person making the trade purchase.
Ric Zampatti, chief executive of The Barter Company, an Atlanta-based trade exchange with clients in South Carolina, Florida and Georgia, says his business is up 10% in the last year, due partly to signing up 35 new restaurants.
Tradespeople also appear to be spending more when they go out to eat. A trade credit is worth a dollar; Mr. Miller says he used to see tradespeople buy restaurant credits in batches of 100 or 200; lately, he says people are buying restaurant trade credits worth $300 to $500 at a time.
Cody Smith, owner of Dynamic Pest Control in Mesa, Ariz., has been cashing in his trade credits at restaurants more frequently in the past six months. "It's a great way to take the family out, enjoy a meal and walk away with very little cash out of your pocket."
Trading his pest control services for restaurant meals and other services has brought in new clients and boosted his sales by 15% in the last year, due partly to new cash-paying clients who aren't part of the exchange, Mr. Smith says.
Atlanta restaurateur Nancy Castellucci recently opened a fourth eatery called the Iberian Pig in an historic building that needed to be brought up to code. She used barter credits to cover 60% of the refurbishment costs.
"We would have had to go to the bank otherwise and we didn't want to go to the bank. When you have barter dollars, it's a much cheaper way to borrow money because you're not actually borrowing money, you're borrowing goods and services and not paying interest."
Mr. Zampatti of the Atlanta exchange says he's seeing restaurants increasingly use barter for routine maintenance costs. "In the past, restaurant owners would use barter to upgrade their lifestyle, like to go on vacation or buy jewelry, but because of the economy, now they're using it to pay for their business expenses."
In Lean Times, Restaurants Barter for Trade Services
By JULIE JARGON
Independent restaurants are turning to an old-fashioned method to fill tables—barter.
As they struggle to keep customers and pay the monthly bills, restaurants are swapping food for services like oven-hood cleaning and pest control.
Bartering helps restaurants fill seats, reassuring prospective customers who might be turned off by the sight of a vacant eatery. It also attracts new customers when tradespeople bring friends along, reduces some costs, and helps retain employees who can't scoop tips off empty tables.
It's hardly a permanent fix for ailing restaurants, which still need cash to cover such expenses as rent, mortgages, taxes and utilities. But bartering is an especially useful tool for independent restaurants that, unlike some chains, lack access to corporate credit lines or cash.
Many restaurants are using barter exchanges that track and manage the transactions, which count as taxable income and must be recorded for tax purposes. Rather than traditional bartering, in which services are swapped directly between vendors, most barter exchanges use a "round robin" approach that offers flexibility for both restaurants and service people. For example, a plumber uses trade credits accumulated at an exchange to pay for a restaurant meal. The restaurant owner can use the credits spent by the plumber to "purchase" a variety of services offered by appliance repairmen, electricians and other exchange clients. The exchange acts as a bank, keeping track of credits and collecting fees on each transaction.
Tony Romano, owner of Marcello's Pasta Grill in Tempe, Ariz., where business is off 40% from three years ago, joined the Arizona Trade Exchange in October. Since joining the exchange, he says he's been averaging $2,000 per week in trade credits from tradespeople, which has allowed him to pay for almost all of his monthly expenses—from laundry to fire-extinguisher maintenance—without writing a check.
Although the restaurant doesn't receive cash for the food, the tradespeople usually tip well, Mr. Romano says, which keeps his wait staff happy.
He says his traffic has increased 10% in the last month. New exchange clients also have led to catering jobs. "A lot of small businesses can't afford to take their employees out for a Christmas party, but they can barter it," he says. "I've booked two lawyers' offices and three dentists' holiday parties."
Independent restaurants have fared slightly better in the last year than chain restaurants, though it's hard to say how much bartering has helped. Same-store sales at independent restaurants declined 9% for the year ended Sept. 30, while same-store sales at chains declined 9.7% during that time, according to restaurant consulting firm Technomic Inc.
Rob Miller, president of the Arizona Trade Exchange, says he now has more than 30 restaurants involved in his exchange, up 20% from a year ago. The exchange charges a one-time $495 membership fee as well as a $12.50 monthly fee, and takes a 12% cut of each transaction from the person making the trade purchase.
Ric Zampatti, chief executive of The Barter Company, an Atlanta-based trade exchange with clients in South Carolina, Florida and Georgia, says his business is up 10% in the last year, due partly to signing up 35 new restaurants.
Tradespeople also appear to be spending more when they go out to eat. A trade credit is worth a dollar; Mr. Miller says he used to see tradespeople buy restaurant credits in batches of 100 or 200; lately, he says people are buying restaurant trade credits worth $300 to $500 at a time.
Cody Smith, owner of Dynamic Pest Control in Mesa, Ariz., has been cashing in his trade credits at restaurants more frequently in the past six months. "It's a great way to take the family out, enjoy a meal and walk away with very little cash out of your pocket."
Trading his pest control services for restaurant meals and other services has brought in new clients and boosted his sales by 15% in the last year, due partly to new cash-paying clients who aren't part of the exchange, Mr. Smith says.
Atlanta restaurateur Nancy Castellucci recently opened a fourth eatery called the Iberian Pig in an historic building that needed to be brought up to code. She used barter credits to cover 60% of the refurbishment costs.
"We would have had to go to the bank otherwise and we didn't want to go to the bank. When you have barter dollars, it's a much cheaper way to borrow money because you're not actually borrowing money, you're borrowing goods and services and not paying interest."
Mr. Zampatti of the Atlanta exchange says he's seeing restaurants increasingly use barter for routine maintenance costs. "In the past, restaurant owners would use barter to upgrade their lifestyle, like to go on vacation or buy jewelry, but because of the economy, now they're using it to pay for their business expenses."
Tuesday, December 1, 2009
Article: Bartender Turns Wine Into Clean Water
Bartender Turns Wine Into Clean Water
CNN
BLOWING ROCK, North Carolina (Nov. 30) -- Behind the bar at a local restaurant, Doc Hendley leans in to hear his customer over the band. "You like the pinot? Cool," he says.
It's a seemingly average interaction, but Hendley is not your average bartender. As he pours wine in the United States, he's also helping to save thousands of lives on the other side of the world -- and he's tapped into his regulars to help.
"[They] sit on the same stool, drink the same drink, pay the same tab every day. I felt like they really did want to be a part of something," Hendley says. "They just were waiting for somebody to bring that something to them."
That something is Wine to Water, Hendley's organization that provides clean water to people in developing countries through funds raised at wine tasting events.
Since 2004, Hendley has traveled to Sudan, Ethiopia, Uganda and Cambodia, working with local communities to build clean water wells and sanitation systems.
The 30-year-old first learned about the world's water crisis when he took a break from college, and his job as a bar-keep, to travel the world; he hoped it would ground his education and provide some direction. It did.
"I began seeing the figures [of] people that don't have access to clean water -- and it absolutely floored me," he recalls.
At least one in six people worldwide lack access to adequate amounts of safe water for drinking and hygiene, according to the United Nations. This contributes to diarrhea, the leading cause of illness and death, and translates to 1.5 million preventable deaths each year.
After returning to school, Hendley realized that just by using his ability to bartend and create relationships with people, he might be able to help the problem. At the bars where he worked, he solicited evenings to host wine tastings and provide information about the global crisis. By graduation, Hendley's "Wine to Water" events had yielded enough funding to implement water projects in the developing world.
He approached a local contact, Kenny Isaacs of Samaritan's Purse, with the intention of handing over the funds for their international charitable water projects. Instead, Hendley found himself in Sudan in spring 2004, training to oversee water projects and developing and installing water systems in zones deemed too dangerous for United Nations aide workers -- all in the midst of civil war.
"[I was] seeing these people living in conflicts, bullets whizzing by their ears -- yet their biggest concern was the huge loss of life because of the unclean water," he recalls. "That's when water changed from being my passion to the burden of my life."
After a year of service in Darfur, Hendley returned to the states and continued his fund-raising events while focusing on ways his group could improve upon other water project models.
"Throughout the desert there were bore holes [for wells] all over the place, they just weren't working," says Hendley. "Organizations would put a brand new, $15,000 bore hole in a village that already had one; [they] didn't stop to think that maybe that one is broken or just needs some parts."
Wine to Water is dedicated to achieving sustainability through education and empowerment of local community members, training them to install, maintain and repair their own water systems.
Hendley has found this approach reduces overhead costs, leaving more for investment in water initiatives and local economies. Because his operation is small, Hendley says he's less deterred by the instability of areas in dire need and is able to access pockets of the world that larger organizations may have to avoid.
To date, Hendley's group has worked in five developing countries, including India, bringing safe drinking water to more than 25,000 individuals in refugee camps, orphanages, schools, hospitals and a leper colony, as well as directly into hundreds of homes through the installation of bio-sand filters.
In the face of the overwhelming global crisis, Hendley says his work may be a drop in the bucket, but to him it's nothing short of a miracle.
"You can be a bartender in Raleigh, North Carolina; you can be just a regular anybody. And you really, really can change the world," he says. "You can touch thousands of lives. I'm walking truth of that."
CNN
BLOWING ROCK, North Carolina (Nov. 30) -- Behind the bar at a local restaurant, Doc Hendley leans in to hear his customer over the band. "You like the pinot? Cool," he says.
It's a seemingly average interaction, but Hendley is not your average bartender. As he pours wine in the United States, he's also helping to save thousands of lives on the other side of the world -- and he's tapped into his regulars to help.
"[They] sit on the same stool, drink the same drink, pay the same tab every day. I felt like they really did want to be a part of something," Hendley says. "They just were waiting for somebody to bring that something to them."
That something is Wine to Water, Hendley's organization that provides clean water to people in developing countries through funds raised at wine tasting events.
Since 2004, Hendley has traveled to Sudan, Ethiopia, Uganda and Cambodia, working with local communities to build clean water wells and sanitation systems.
The 30-year-old first learned about the world's water crisis when he took a break from college, and his job as a bar-keep, to travel the world; he hoped it would ground his education and provide some direction. It did.
"I began seeing the figures [of] people that don't have access to clean water -- and it absolutely floored me," he recalls.
At least one in six people worldwide lack access to adequate amounts of safe water for drinking and hygiene, according to the United Nations. This contributes to diarrhea, the leading cause of illness and death, and translates to 1.5 million preventable deaths each year.
After returning to school, Hendley realized that just by using his ability to bartend and create relationships with people, he might be able to help the problem. At the bars where he worked, he solicited evenings to host wine tastings and provide information about the global crisis. By graduation, Hendley's "Wine to Water" events had yielded enough funding to implement water projects in the developing world.
He approached a local contact, Kenny Isaacs of Samaritan's Purse, with the intention of handing over the funds for their international charitable water projects. Instead, Hendley found himself in Sudan in spring 2004, training to oversee water projects and developing and installing water systems in zones deemed too dangerous for United Nations aide workers -- all in the midst of civil war.
"[I was] seeing these people living in conflicts, bullets whizzing by their ears -- yet their biggest concern was the huge loss of life because of the unclean water," he recalls. "That's when water changed from being my passion to the burden of my life."
After a year of service in Darfur, Hendley returned to the states and continued his fund-raising events while focusing on ways his group could improve upon other water project models.
"Throughout the desert there were bore holes [for wells] all over the place, they just weren't working," says Hendley. "Organizations would put a brand new, $15,000 bore hole in a village that already had one; [they] didn't stop to think that maybe that one is broken or just needs some parts."
Wine to Water is dedicated to achieving sustainability through education and empowerment of local community members, training them to install, maintain and repair their own water systems.
Hendley has found this approach reduces overhead costs, leaving more for investment in water initiatives and local economies. Because his operation is small, Hendley says he's less deterred by the instability of areas in dire need and is able to access pockets of the world that larger organizations may have to avoid.
To date, Hendley's group has worked in five developing countries, including India, bringing safe drinking water to more than 25,000 individuals in refugee camps, orphanages, schools, hospitals and a leper colony, as well as directly into hundreds of homes through the installation of bio-sand filters.
In the face of the overwhelming global crisis, Hendley says his work may be a drop in the bucket, but to him it's nothing short of a miracle.
"You can be a bartender in Raleigh, North Carolina; you can be just a regular anybody. And you really, really can change the world," he says. "You can touch thousands of lives. I'm walking truth of that."
Tuesday, November 24, 2009
Article: Raising the Bar, One Employee at a Time
Raising the Bar, One Employee at a Time
Geoff Williams, AOL Small Business, AOL
Wendy Buckley has a hint for job seekers: When filling out an application, if there’s a question about what makes good customer service, don’t plagiarize a website that has an article about customer service and claim it as your own. Your employer probably has Google, too.
Buckley has been in the hiring process for a couple months now, employing three full-time managers back in September for the Screwtop Wine Bar and now is finishing up interviews as she puts together a part-time staff of 12 servers, gift shop and kitchen workers. But it was that plagiarizer that really stands out in her mind as something that didn’t impress her.
Wow, this sounds really professional, thought Buckley upon first reading the essay answer. But then she suddenly had a sinking feeling, started Googling, and found the incriminating text, word-for-word. Obviously, the applicant didn’t get an interview.
Of course, she was also not thrilled when she set up interviews for her managerial positions and had four no-shows. “Four,” says Buckley. “Four people agreed to interview and didn’t show up. I thought, ‘Are you serious? Don’t people need a job?’”
Still, Buckley managed to find three people to manage the bar, the gift shop and the kitchen--three people she is very pleased with. One applicant, in particular, seemed to be a standout. Buckley had asked her for an example of when she had been able to make a customer’s day, and the interviewee told her how a terminally ill mother and her daughter came into a Cheesecake Factory in Maryland. The mother had left a hospice, with the mission of having a chocolate godiva cheesecake, and the server, now seeking employment with Buckley, had the unpleasant task of telling this sick woman that they were all out. The daughter whispered to bring some other chocolate cheesecake, because her mother wouldn’t know the difference.
And so the server brought out the cheesecake but then decided she had to tell the truth. The woman had her cheesecake, apparently leaving without complaint, but the server naturally felt distressed and called other Cheescake Factories around Maryland, found a place that had it in stock, and then she soon personally delivered an entire chocolate godiva cheesecake to the dying patient.
Buckley listened to the tale, mesmerized. So did she hire her? “I couldn’t afford her,” sighs Buckley. “But what a great story.”
Other challenges
Throughout September and October, most of Buckley’s attention was focused on getting a builder’s permit from her county, which she says took about three weeks, and then overseeing the construction, which is still going on. She plans to open the ScrewTop Wine Bar on December 15.
In the meantime, starting up the business has been predictably screwy.
For instance, the oven arrived a month before it was due. This was a problem, because it’s a 500-pound oven, and with no builder’s permit and no construction started, Buckley had nowhere to put it. She managed to reach someone in customer service from the restaurant supply company and was told, “Refuse the oven.”
“How?” demanded Buckley, literally on her cell phone and racing after a departing UPS truck. “I’ve already accepted it!”
The UPS truck took it back, fortunately, but then two days before it was due, delivered it again. Buckley enlisted her husband, David, and some of the construction crew and managed to find equipment to move the mammoth oven into her wine bar’s kitchen, but the giant deli case was another matter. The next day, a semi-truck delivered the rest of the appliances, refrigerators and dishwashers, filling the sidewalk, and those, too, were moved into the kitchen without too many problems. But not the giant deli case.
“We’ve had architects and engineers measure everything,” says Buckley, “but the deli case, where we keep the cheese, was half an inch too wide for the door.”
Buckley says the company furnishing her doors has an agreement with her that if any other professional touches those doors, they’re no longer under warranty. So she had to hire the company—at $200 an hour—to come and remove the front door and the door frame, in order to haul the deli case into the restaurant. “It’s never coming out of there again,” she vows of the deli case.
Hire education
Then about a week ago, Buckley put out an ad on Craigslist for part-time help. The ad, in its entirety, read:
DO YOU LOVE WINE, CHEESE & CRAFT BEER?
Then come be a part of something very special here in Clarendon.
WE OFFER
*great employee discounts,
*flexible hours, (Day, Evening, Weekend)
*training and
*fun atmosphere where you are surrounded by fellow foodies and wine lovers.
*METRO ACCESSIBLE: We are just a short 2 block stroll from the Clarendon Metro on the Orange line.
WHAT IS SCREWTOP?
Screwtop wine bar is so much more than just a wine bar. It’s a café, a wine boutique, and a gourmet cheese shop as well. We are the neighborhood gathering spot, where all customers are treated like regulars, even if it’s just their first time in.
We are opening in DECEMBER and INTERVIEWING NOW for the following Positions:
*Please email us at the address below, telling us
1. why you’d like to work for screwtop,
2. how many hours you’d like to work and
3. what you are interested in making$
Having been burned by no-shows, Buckley emailed all her aspiring applicants this time, reminding them of the interviews and even offering a map on how to get to her place. “I probably shouldn’t have done that,” concedes Buckley. After all, if someone is a no-show to an interview, that’s a great clue that they aren’t going to be a good worker.
But, says Buckley, “as I’ve gotten further along in this process, I have so little time and so many things to get done, and I’m a very organized person. But every day, I’ll have a list of 20 things to do, and even if I finish them all, the next day, there will be 20 more things to do. I’m sure there will be a long list of things I have to do once I’m open and running, too, of course, but it astonishes me how fast these days are going by. I’ll look up at the clock, and it’ll be 8 p.m., and then I’ll be on the computer until midnight. I couldn’t sleep last night, and so I was up at 3, working on figuring out the schedules.”
The schedules, that is, of the people she hasn’t hired yet. “I have more people to interview tomorrow,” says Buckley. “Part of this not being to sleep, of course, is just this exhilarating excitement going on. There’s so much going on in mind and so many things we have to get done before we open.”
But at least she has her oven.
Geoff Williams, AOL Small Business, AOL
Wendy Buckley has a hint for job seekers: When filling out an application, if there’s a question about what makes good customer service, don’t plagiarize a website that has an article about customer service and claim it as your own. Your employer probably has Google, too.
Buckley has been in the hiring process for a couple months now, employing three full-time managers back in September for the Screwtop Wine Bar and now is finishing up interviews as she puts together a part-time staff of 12 servers, gift shop and kitchen workers. But it was that plagiarizer that really stands out in her mind as something that didn’t impress her.
Wow, this sounds really professional, thought Buckley upon first reading the essay answer. But then she suddenly had a sinking feeling, started Googling, and found the incriminating text, word-for-word. Obviously, the applicant didn’t get an interview.
Of course, she was also not thrilled when she set up interviews for her managerial positions and had four no-shows. “Four,” says Buckley. “Four people agreed to interview and didn’t show up. I thought, ‘Are you serious? Don’t people need a job?’”
Still, Buckley managed to find three people to manage the bar, the gift shop and the kitchen--three people she is very pleased with. One applicant, in particular, seemed to be a standout. Buckley had asked her for an example of when she had been able to make a customer’s day, and the interviewee told her how a terminally ill mother and her daughter came into a Cheesecake Factory in Maryland. The mother had left a hospice, with the mission of having a chocolate godiva cheesecake, and the server, now seeking employment with Buckley, had the unpleasant task of telling this sick woman that they were all out. The daughter whispered to bring some other chocolate cheesecake, because her mother wouldn’t know the difference.
And so the server brought out the cheesecake but then decided she had to tell the truth. The woman had her cheesecake, apparently leaving without complaint, but the server naturally felt distressed and called other Cheescake Factories around Maryland, found a place that had it in stock, and then she soon personally delivered an entire chocolate godiva cheesecake to the dying patient.
Buckley listened to the tale, mesmerized. So did she hire her? “I couldn’t afford her,” sighs Buckley. “But what a great story.”
Other challenges
Throughout September and October, most of Buckley’s attention was focused on getting a builder’s permit from her county, which she says took about three weeks, and then overseeing the construction, which is still going on. She plans to open the ScrewTop Wine Bar on December 15.
In the meantime, starting up the business has been predictably screwy.
For instance, the oven arrived a month before it was due. This was a problem, because it’s a 500-pound oven, and with no builder’s permit and no construction started, Buckley had nowhere to put it. She managed to reach someone in customer service from the restaurant supply company and was told, “Refuse the oven.”
“How?” demanded Buckley, literally on her cell phone and racing after a departing UPS truck. “I’ve already accepted it!”
The UPS truck took it back, fortunately, but then two days before it was due, delivered it again. Buckley enlisted her husband, David, and some of the construction crew and managed to find equipment to move the mammoth oven into her wine bar’s kitchen, but the giant deli case was another matter. The next day, a semi-truck delivered the rest of the appliances, refrigerators and dishwashers, filling the sidewalk, and those, too, were moved into the kitchen without too many problems. But not the giant deli case.
“We’ve had architects and engineers measure everything,” says Buckley, “but the deli case, where we keep the cheese, was half an inch too wide for the door.”
Buckley says the company furnishing her doors has an agreement with her that if any other professional touches those doors, they’re no longer under warranty. So she had to hire the company—at $200 an hour—to come and remove the front door and the door frame, in order to haul the deli case into the restaurant. “It’s never coming out of there again,” she vows of the deli case.
Hire education
Then about a week ago, Buckley put out an ad on Craigslist for part-time help. The ad, in its entirety, read:
DO YOU LOVE WINE, CHEESE & CRAFT BEER?
Then come be a part of something very special here in Clarendon.
WE OFFER
*great employee discounts,
*flexible hours, (Day, Evening, Weekend)
*training and
*fun atmosphere where you are surrounded by fellow foodies and wine lovers.
*METRO ACCESSIBLE: We are just a short 2 block stroll from the Clarendon Metro on the Orange line.
WHAT IS SCREWTOP?
Screwtop wine bar is so much more than just a wine bar. It’s a café, a wine boutique, and a gourmet cheese shop as well. We are the neighborhood gathering spot, where all customers are treated like regulars, even if it’s just their first time in.
We are opening in DECEMBER and INTERVIEWING NOW for the following Positions:
*Please email us at the address below, telling us
1. why you’d like to work for screwtop,
2. how many hours you’d like to work and
3. what you are interested in making$
Having been burned by no-shows, Buckley emailed all her aspiring applicants this time, reminding them of the interviews and even offering a map on how to get to her place. “I probably shouldn’t have done that,” concedes Buckley. After all, if someone is a no-show to an interview, that’s a great clue that they aren’t going to be a good worker.
But, says Buckley, “as I’ve gotten further along in this process, I have so little time and so many things to get done, and I’m a very organized person. But every day, I’ll have a list of 20 things to do, and even if I finish them all, the next day, there will be 20 more things to do. I’m sure there will be a long list of things I have to do once I’m open and running, too, of course, but it astonishes me how fast these days are going by. I’ll look up at the clock, and it’ll be 8 p.m., and then I’ll be on the computer until midnight. I couldn’t sleep last night, and so I was up at 3, working on figuring out the schedules.”
The schedules, that is, of the people she hasn’t hired yet. “I have more people to interview tomorrow,” says Buckley. “Part of this not being to sleep, of course, is just this exhilarating excitement going on. There’s so much going on in mind and so many things we have to get done before we open.”
But at least she has her oven.
Thursday, November 12, 2009
The Dish - Fountain Square News
The Dish
11.10.09
Edited by Beth A. Clayton
Hip To Be Square
Those who said Fountain Square wasn't living up to its promised potential may soon have to eat their words—or least give them a nibble. A couple new restaurants, a watering hole or two, and a coffee shop are currently in the works just off the Square.
•The first to come along is Calvin Fletcher's Coffee Company (615 Virginia Ave., 423-9697), which opened October 17 on Virginia Avenue in the Fletcher Place neighborhood. The not-for-profit café serves fair-trade coffee and organic teas, plus sweets from City Sweets and Classic Cakes. Each month, tips are donated to a different charity; this month's recipient is Second Helpings.
•Imbibe (1105 Shelby St.), opened Friday in the Fountain Square Theatre Building between owners Linton and Fern Calvert's other two restaurants, Smokehouse on Shelbi and the Shelbi Street Bistro. The Art Deco-themed bar offers small-plate appetizers, craft beers, specialty cocktails, and wines.
•Across the square in the Murphy Art Center, restaurateur Wally Bolinger plans to open The Red Lion, an English pub, the week of Thanksgiving. Bolinger also owns Britton Tavern in Noblesville, and says this one will offer traditional English favorites, like bangers and mash, shepherd's pie, and fish and chips, plus burgers and a couple of vegetarian options. Bolinger will also serve about a dozen craft beers (including some Sun King favorites), 20 bottled beers, and a short wine list.
•In the coming months, we can look forward the White Rabbit Cabaret (1116 E. Prospect St.), from sisters Debra and Rebecca Silveus, which will feature vaudeville-inspired dance shows and some movie and game nights, plus small-plate offerings and beer and wine. And finally, next door at 1130 East Prospect, Radio Radio owners David "Tufty" Clough and Roni Donaldson plan to open a full-service restaurant known tentatively as La Revolucion sometime next year.
11.10.09
Edited by Beth A. Clayton
Hip To Be Square
Those who said Fountain Square wasn't living up to its promised potential may soon have to eat their words—or least give them a nibble. A couple new restaurants, a watering hole or two, and a coffee shop are currently in the works just off the Square.
•The first to come along is Calvin Fletcher's Coffee Company (615 Virginia Ave., 423-9697), which opened October 17 on Virginia Avenue in the Fletcher Place neighborhood. The not-for-profit café serves fair-trade coffee and organic teas, plus sweets from City Sweets and Classic Cakes. Each month, tips are donated to a different charity; this month's recipient is Second Helpings.
•Imbibe (1105 Shelby St.), opened Friday in the Fountain Square Theatre Building between owners Linton and Fern Calvert's other two restaurants, Smokehouse on Shelbi and the Shelbi Street Bistro. The Art Deco-themed bar offers small-plate appetizers, craft beers, specialty cocktails, and wines.
•Across the square in the Murphy Art Center, restaurateur Wally Bolinger plans to open The Red Lion, an English pub, the week of Thanksgiving. Bolinger also owns Britton Tavern in Noblesville, and says this one will offer traditional English favorites, like bangers and mash, shepherd's pie, and fish and chips, plus burgers and a couple of vegetarian options. Bolinger will also serve about a dozen craft beers (including some Sun King favorites), 20 bottled beers, and a short wine list.
•In the coming months, we can look forward the White Rabbit Cabaret (1116 E. Prospect St.), from sisters Debra and Rebecca Silveus, which will feature vaudeville-inspired dance shows and some movie and game nights, plus small-plate offerings and beer and wine. And finally, next door at 1130 East Prospect, Radio Radio owners David "Tufty" Clough and Roni Donaldson plan to open a full-service restaurant known tentatively as La Revolucion sometime next year.
Article: The Accidental Hero
BusinessWeek
The Accidental Hero
Subway's $5 footlong, the brainchild of an obscure Miami franchisee, is the fast-food success story of the recession
By Matthew Boyle
Stuart Frankel isn't what you'd call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami's Jackson Memorial Hospital. After noticing that sales sagged on weekends, he came up with an idea: He would offer every footlong sandwich (the chain also sells 6-inch versions) on Saturday and Sunday for $5, about a buck less than the usual price. "I like round numbers," says Frankel, a brusque New Yorker who moved to Miami in 1972 and owned a drugstore before opening his first Subway outlet in 1988.
Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway's performance. "There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them," says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. "It's huge."
In fact, the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the U.S. for the year ended in August, according to NPD Group. That puts the $5 menu's success just a notch behind KFC (YUM) and ahead of Arby's and Domino's Pizza (DPZ). It helped privately held Subway, of Milford, Conn., lift U.S. sales 17% last year at a time when most restaurant chains, save for industry leader McDonald's (MCD), struggled. Actually, make that soon-to-be-former industry leader McDonald's. Subway's low-cost franchising model and mainstream appeal have allowed it to add 9,500 locations in the past five years, for a total of about 32,000 outlets. At its current growth rate of 40 new stores a week, Subway is poised to surpass McDonald's in worldwide locations sometime early next year. (Measured by total sales, McDonald's $30 billion still dwarfs Subway's $9.6 billion, although Subway has now supplanted both Wendy's (WEN) and Burger King (BKC) in market share.)
...cont.
Click on title above, or HERE to view the entire article and video online.
The Accidental Hero
Subway's $5 footlong, the brainchild of an obscure Miami franchisee, is the fast-food success story of the recession
By Matthew Boyle
Stuart Frankel isn't what you'd call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami's Jackson Memorial Hospital. After noticing that sales sagged on weekends, he came up with an idea: He would offer every footlong sandwich (the chain also sells 6-inch versions) on Saturday and Sunday for $5, about a buck less than the usual price. "I like round numbers," says Frankel, a brusque New Yorker who moved to Miami in 1972 and owned a drugstore before opening his first Subway outlet in 1988.
Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway's performance. "There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them," says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. "It's huge."
In fact, the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the U.S. for the year ended in August, according to NPD Group. That puts the $5 menu's success just a notch behind KFC (YUM) and ahead of Arby's and Domino's Pizza (DPZ). It helped privately held Subway, of Milford, Conn., lift U.S. sales 17% last year at a time when most restaurant chains, save for industry leader McDonald's (MCD), struggled. Actually, make that soon-to-be-former industry leader McDonald's. Subway's low-cost franchising model and mainstream appeal have allowed it to add 9,500 locations in the past five years, for a total of about 32,000 outlets. At its current growth rate of 40 new stores a week, Subway is poised to surpass McDonald's in worldwide locations sometime early next year. (Measured by total sales, McDonald's $30 billion still dwarfs Subway's $9.6 billion, although Subway has now supplanted both Wendy's (WEN) and Burger King (BKC) in market share.)
...cont.
Click on title above, or HERE to view the entire article and video online.
Thursday, October 15, 2009
Article: Crafty Ways Restaurants Cut Costs
The Wall Street Journal - www.wsj.com
SMALL BUSINESS
OCTOBER 9, 2009
Crafty Ways Restaurants Cut Costs
By NEIL PARMAR
When it comes to dining out, Kevin Moll is the kind of frugal patron restaurant owners would love to see more of. The father of two from Denver always passes on the cream and sugar. He never pours a blob of ketchup next to his fries. Even better, after enjoying a plate of barbecued ribs, he usually prefers to wipe his saucy fingers with a cloth napkin, since the cleanup job would require at least three of the paper variety. And don't even get him started on carbonated beverages. This is a guy who prefers cola a little watered down.
With hard times still taking a bite out of restaurant profits, more Kevin Molls are turning up at their tables — not as patrons but as professional nitpickers. The 50-year-old CEO of National Restaurant Consultants is one of a burgeoning wave of efficiency experts who focus on restaurants, checking for unused half-and-half and testing the syrup level in fountain drinks. While no one tracks the number of these professionals in the restaurant field, the Labor Department says there are now some 678,000 efficiency gurus working to cut waste and maximize profits across a wide range of industries, double that from a decade ago. Moll and his food-service brethren do it by carefully pricing out a kitchen's every move — like making ranch dressing every three days instead of daily, which can shave prep time by 15 to 18 minutes. They help fine-tune recipes to economize on ingredients. (Taking olive oil out of the marinara sauce saved one chain $17,000 a year.) And they "engineer" menus to spotlight the highest-margin offerings. Forget soda; iced tea costs a restaurant as little as a nickel a glass.
The $566 billion restaurant industry is anxious to save as many shekels as it can — preferably without diners noticing a difference. Even with the uptick in some sectors of the economy, the dining-out industry is lagging, as it tends to do in bad times. According to surveys from the National Restaurant Association, 59 percent of the country's restaurant owners, on average, have reported a drop in same-store sales every month for the past year. Industry veterans like Lloyd Gordon, who has been consulting for the past 46 years, say times have never been tougher. Restaurant sales typically dropped 20 percent during past recessions, he says, but they've plunged as much as 50 percent in some parts of the country today. "A lot of restaurants are bleeding," says Dean Small of Synergy Restaurant Consultants in Laguna Niguel, Calif. "In some cases, they're hemorrhaging."
And so they turn to Moll and his ilk, whose secret sauce of savings tactics can be traced back decades. The modern-day efficiency movement, largely thought to have originated in Japanese car factories after World War II, took off on these shores after American giants like Motorola and General Electric began famously boosting profits with similar practices in the 1980s and '90s. Other industries took note—and a growing cadre of consultants followed. If you've traveled in the past few months, you've probably noticed their handiwork: disappearing mini shampoo bottles in the hotel bathroom, fewer complimentary magazines in the airline seat back. Such ideas might seem like small potatoes to some, but Moll and his team of experts have come up with enough tips and tricks to fill a 175-page bible on how to run a profitable eatery. For his clients, the often-tiny cuts add up, generating savings or revenue-boosting ideas that goose margins, on average, by 15 percent. "Operating a restaurant," reads one passage of the guide, "is a game of pennies."
Moll learned, when running his own bar and grill two decades ago, that managing an eatery is like navigating "a boat full of holes." And the trim, java-fueled consultant — running on four to five cups daily — is nothing if not a time-is-money, tight-ship kind of guy. He records any passing work inspiration ("note to self") on his cell phone, even while walking his dog. In his clutter-free office, the only papers visible are arranged in a compact stack, perfectly parallel to the edge of the desk. And while driving his pristine white Cadillac between tightly scheduled appointments, he admits that he's called the city's 311 hotline more than once to report street garbage that needs removal. Clearly, no detail is too small.
It's an attitude that comes in handy in his work, like when Moll and his firm recently helped launch Organixx, a casual, quick-service eatery in downtown Denver. To project an eco-friendly vibe, it features not only the requisite recycled napkins but also bamboo tabletops, a hardwood floor made from recycled furniture scraps, and compostable straws and utensils. (Deliveries are often made via skateboard.) Diners have more than two dozen menu items to choose from, but many end up ordering the Asian stir-fry salad, a mix of veggies, crunchy noodles and tofu, chicken or beef, drizzled with toasted-sesame vinaigrette. The most popular salad on the menu, it's also one of the most profitable. "It doesn't happen like that by accident," says Moll.
Remember the old home-buying adage "location, location, location"? Relying on studies that track "eye flow" across menu pages in elaborate arrow-filled diagrams, Moll counsels his clients to spotlight higher-margin items in prime menu real estate. The Asian stir-fry, with ingredients that cost as little as 24 percent of the menu price, holds pride of place at the top right corner, while the grilled salmon burger (cost of ingredients, $2.78; price, $9) is intentionally buried at left center, the menu equivalent of Siberia. "The menu drives everything," says Moll—from an eatery's decor to the length of time it takes to execute a single dish. In fact, some potential recipes at Organixx have been vetoed just because they couldn't be put together by a cook standing in a single spot, with all the ingredients within arm's reach.
Indeed, the biggest cost cutting usually happens behind the swinging doors. To help keep food costs within a healthy 24 to 35 percent of overall expenses, Moll brought in an on-site drill sergeant. Mary Putman, who paces the kitchen prep area, pokes at plates to make sure bread crusts are intact and salad mounds don't lean too far to one side. When red peppers triple in price, she buys more zucchini to sub into the stir-fry and salads. If a line cook takes more than six minutes to prepare an order, she points sternly at her watch. Most important, she makes sure they're measuring every ounce of food instead of just eyeballing ingredients. Constantly nagging them to "quit heaping the scoop," Putman says a big part of her job "is pulling food off the line."
Which may leave some diners, well, a little hungrier than others. While all of Organixx's sandwiches cost $9, some are a little less generously proportioned. Eyeing the egg salad? You'll get an eight-ounce scoop. But order the rock shrimp salad and your filling weighs only five. (The reason? Moll's firm suggests that each dish cost between 22 to 30 percent of what it ends up selling for—and eggs are cheaper than shrimp.) Erwin Chang, the owner of Organixx, acknowledges "it's a very delicate decision" to change the portions, but it's not hard to see his point of view as he describes the challenges of running a restaurant in this economic climate — especially when all those organic ingredients and other green touches come at a premium.
And hey, at least he's not holding back on the water. That's a strategy Moll recommended to another of his clients, Mici Handcrafted Italian, a cheerful, contemporary joint half a mile down the road from Organixx. Eager to expand to a second location, this family-owned pasta and pizza eatery hired National Restaurant Consultants to help shave operating costs. But Mici's owners were loath to change or cut back on menu items like its famed hand-rolled meatballs, so Moll had to turn to the eatery's beverage lineup to find savings.
In addition to tweaking Mici's wine list, Moll came up with a 10-point game plan for fountain drinks. Selling some 13,000 units a year, sodas still weren't delivering any profit, according to co-owner Michael Miceli — even though they typically cost the restaurant only a dime a glass. Some of the most effective moves Moll recommended include cutting out the middleman syrup supplier and offering only one size drink instead of three. Goodbye, costly cups.
But one tip comes with a spritz of controversy: Don't automatically serve patrons water, so they're more likely to order soda, beer or wine. Helen Rosner, who blogs about the restaurant industry at MenuPages.com, calls the practice "one of the craftiest I've heard of"—and says she's seeing more eateries do it. Victor Gielisse of Culinary Institute of America, on the other hand, calls it "the socially responsible thing to do given our environment today." For his part, Miceli simply says, "We ask them what they want to drink. If they want water, we give water." It certainly hasn't hurt the bottom line; implementing this and other tips from Moll's 32-page "operations analysis" has goosed revenue by 50 percent a week. In the world of kitchen cost cutting, that's more than a few pennies.
SMALL BUSINESS
OCTOBER 9, 2009
Crafty Ways Restaurants Cut Costs
By NEIL PARMAR
When it comes to dining out, Kevin Moll is the kind of frugal patron restaurant owners would love to see more of. The father of two from Denver always passes on the cream and sugar. He never pours a blob of ketchup next to his fries. Even better, after enjoying a plate of barbecued ribs, he usually prefers to wipe his saucy fingers with a cloth napkin, since the cleanup job would require at least three of the paper variety. And don't even get him started on carbonated beverages. This is a guy who prefers cola a little watered down.
With hard times still taking a bite out of restaurant profits, more Kevin Molls are turning up at their tables — not as patrons but as professional nitpickers. The 50-year-old CEO of National Restaurant Consultants is one of a burgeoning wave of efficiency experts who focus on restaurants, checking for unused half-and-half and testing the syrup level in fountain drinks. While no one tracks the number of these professionals in the restaurant field, the Labor Department says there are now some 678,000 efficiency gurus working to cut waste and maximize profits across a wide range of industries, double that from a decade ago. Moll and his food-service brethren do it by carefully pricing out a kitchen's every move — like making ranch dressing every three days instead of daily, which can shave prep time by 15 to 18 minutes. They help fine-tune recipes to economize on ingredients. (Taking olive oil out of the marinara sauce saved one chain $17,000 a year.) And they "engineer" menus to spotlight the highest-margin offerings. Forget soda; iced tea costs a restaurant as little as a nickel a glass.
The $566 billion restaurant industry is anxious to save as many shekels as it can — preferably without diners noticing a difference. Even with the uptick in some sectors of the economy, the dining-out industry is lagging, as it tends to do in bad times. According to surveys from the National Restaurant Association, 59 percent of the country's restaurant owners, on average, have reported a drop in same-store sales every month for the past year. Industry veterans like Lloyd Gordon, who has been consulting for the past 46 years, say times have never been tougher. Restaurant sales typically dropped 20 percent during past recessions, he says, but they've plunged as much as 50 percent in some parts of the country today. "A lot of restaurants are bleeding," says Dean Small of Synergy Restaurant Consultants in Laguna Niguel, Calif. "In some cases, they're hemorrhaging."
And so they turn to Moll and his ilk, whose secret sauce of savings tactics can be traced back decades. The modern-day efficiency movement, largely thought to have originated in Japanese car factories after World War II, took off on these shores after American giants like Motorola and General Electric began famously boosting profits with similar practices in the 1980s and '90s. Other industries took note—and a growing cadre of consultants followed. If you've traveled in the past few months, you've probably noticed their handiwork: disappearing mini shampoo bottles in the hotel bathroom, fewer complimentary magazines in the airline seat back. Such ideas might seem like small potatoes to some, but Moll and his team of experts have come up with enough tips and tricks to fill a 175-page bible on how to run a profitable eatery. For his clients, the often-tiny cuts add up, generating savings or revenue-boosting ideas that goose margins, on average, by 15 percent. "Operating a restaurant," reads one passage of the guide, "is a game of pennies."
Moll learned, when running his own bar and grill two decades ago, that managing an eatery is like navigating "a boat full of holes." And the trim, java-fueled consultant — running on four to five cups daily — is nothing if not a time-is-money, tight-ship kind of guy. He records any passing work inspiration ("note to self") on his cell phone, even while walking his dog. In his clutter-free office, the only papers visible are arranged in a compact stack, perfectly parallel to the edge of the desk. And while driving his pristine white Cadillac between tightly scheduled appointments, he admits that he's called the city's 311 hotline more than once to report street garbage that needs removal. Clearly, no detail is too small.
It's an attitude that comes in handy in his work, like when Moll and his firm recently helped launch Organixx, a casual, quick-service eatery in downtown Denver. To project an eco-friendly vibe, it features not only the requisite recycled napkins but also bamboo tabletops, a hardwood floor made from recycled furniture scraps, and compostable straws and utensils. (Deliveries are often made via skateboard.) Diners have more than two dozen menu items to choose from, but many end up ordering the Asian stir-fry salad, a mix of veggies, crunchy noodles and tofu, chicken or beef, drizzled with toasted-sesame vinaigrette. The most popular salad on the menu, it's also one of the most profitable. "It doesn't happen like that by accident," says Moll.
Remember the old home-buying adage "location, location, location"? Relying on studies that track "eye flow" across menu pages in elaborate arrow-filled diagrams, Moll counsels his clients to spotlight higher-margin items in prime menu real estate. The Asian stir-fry, with ingredients that cost as little as 24 percent of the menu price, holds pride of place at the top right corner, while the grilled salmon burger (cost of ingredients, $2.78; price, $9) is intentionally buried at left center, the menu equivalent of Siberia. "The menu drives everything," says Moll—from an eatery's decor to the length of time it takes to execute a single dish. In fact, some potential recipes at Organixx have been vetoed just because they couldn't be put together by a cook standing in a single spot, with all the ingredients within arm's reach.
Indeed, the biggest cost cutting usually happens behind the swinging doors. To help keep food costs within a healthy 24 to 35 percent of overall expenses, Moll brought in an on-site drill sergeant. Mary Putman, who paces the kitchen prep area, pokes at plates to make sure bread crusts are intact and salad mounds don't lean too far to one side. When red peppers triple in price, she buys more zucchini to sub into the stir-fry and salads. If a line cook takes more than six minutes to prepare an order, she points sternly at her watch. Most important, she makes sure they're measuring every ounce of food instead of just eyeballing ingredients. Constantly nagging them to "quit heaping the scoop," Putman says a big part of her job "is pulling food off the line."
Which may leave some diners, well, a little hungrier than others. While all of Organixx's sandwiches cost $9, some are a little less generously proportioned. Eyeing the egg salad? You'll get an eight-ounce scoop. But order the rock shrimp salad and your filling weighs only five. (The reason? Moll's firm suggests that each dish cost between 22 to 30 percent of what it ends up selling for—and eggs are cheaper than shrimp.) Erwin Chang, the owner of Organixx, acknowledges "it's a very delicate decision" to change the portions, but it's not hard to see his point of view as he describes the challenges of running a restaurant in this economic climate — especially when all those organic ingredients and other green touches come at a premium.
And hey, at least he's not holding back on the water. That's a strategy Moll recommended to another of his clients, Mici Handcrafted Italian, a cheerful, contemporary joint half a mile down the road from Organixx. Eager to expand to a second location, this family-owned pasta and pizza eatery hired National Restaurant Consultants to help shave operating costs. But Mici's owners were loath to change or cut back on menu items like its famed hand-rolled meatballs, so Moll had to turn to the eatery's beverage lineup to find savings.
In addition to tweaking Mici's wine list, Moll came up with a 10-point game plan for fountain drinks. Selling some 13,000 units a year, sodas still weren't delivering any profit, according to co-owner Michael Miceli — even though they typically cost the restaurant only a dime a glass. Some of the most effective moves Moll recommended include cutting out the middleman syrup supplier and offering only one size drink instead of three. Goodbye, costly cups.
But one tip comes with a spritz of controversy: Don't automatically serve patrons water, so they're more likely to order soda, beer or wine. Helen Rosner, who blogs about the restaurant industry at MenuPages.com, calls the practice "one of the craftiest I've heard of"—and says she's seeing more eateries do it. Victor Gielisse of Culinary Institute of America, on the other hand, calls it "the socially responsible thing to do given our environment today." For his part, Miceli simply says, "We ask them what they want to drink. If they want water, we give water." It certainly hasn't hurt the bottom line; implementing this and other tips from Moll's 32-page "operations analysis" has goosed revenue by 50 percent a week. In the world of kitchen cost cutting, that's more than a few pennies.
Monday, October 12, 2009
Article "Food Fight: Franchisees Caught in the Middle"
Food Fight: Franchisees Caught in the Middle
October 1, 2009
By Diana Ransom
IF YOU’VE BEEN to a fast food restaurant lately, you’ve probably seen some of the fallout of the downturn. You may have eaten some of it, too.
In an effort to convince consumers to open their wallets wider, franchisors are not only requiring franchisees to officiate (and pay for) new promotions, they’re also requiring them to serve new products, extend operating hours and hand over more of their profits.
“The whole restaurant industry is struggling,” says Bonnie Riggs, an analyst for the market research firm NPD Group, which tracks industry revenues. Although total sales at quick-service restaurants were flat during April, May and June, overall restaurant sales fell 1% over the same period a year ago — the first decline of that magnitude in more than three decades, according to NPD research.
To boost sales, franchisors are taking a scattershot approach. “Franchisors are trying to be everything to everyone right now,” Riggs says. Given that penny-pinching consumers are eating more meals at home, franchisors are pulling out all the stops to reel them back in. They are asking franchisees to pitch cut-rate sandwiches and burgers and dreaming up premium, often exotic menu items to lure consumers back.
Just ask Mike Wright, a McDonald’s franchisee in Shalimar, Fla. To make way for McDonald’s new McCafé espresso-based coffee drinks, which launched nationally in May, he was looking at paying upwards of $125,000 to remodel the interiors of each of his seven stores. The company eventually changed its tune – after substantial pushback from franchisees – but Wright and his fellow franchisees were still strongly encouraged to purchase the necessary coffee and frappucino-style drink equipment. “At $14,000 a pop, you’ve got to sell a lot of coffee to make it up,” Wright says.
In Southern markets, selling hot coffee isn’t easy, Wright says. “When you start selling Bubba a cappuccino, it’s like trying to sell grits to a New Yorker,” he says. “They forced everyone to put this in their stores regardless of profitability.”
McDonald’s is telling its franchisees to have faith in the new menu. “Despite the economy, we are still seeing consistent growth in both our premium and value offerings,” says Julie Pottebaum, a McDonald’s spokeswoman.
Although offering premium products could be an indication that franchisors think the recession is over, many of the nation’s franchisees are still struggling. And even though offering tantalizing new items and discounts can help prop up sales, those tactics don’t always translate to higher profits for franchisees.
“There is a big difference between traffic and bottom-line profitability,” says Darren Tristano, the executive vice president of Technomic, a food industry research firm in Chicago. “From a franchisee perspective, they are looking hard at their cost structure,” he says. Imagine the profit margin on a $1 double cheeseburger, he says. “There isn’t much.”
Meanwhile, franchisees are also coping with added overhead. Adding new menu items often includes taking on more inventory, equipment and maintenance charges, as well as training expenses.
Franchisees have always been tasked with meeting franchisor demands; it’s the mechanism by which chains offer standardized products and ensure quality control. However, fielding a rush of new demands amid slumping sales and rising materials costs – while paying employees a new, higher minimum wage – is proving to be much more challenging than many franchisees expected.
“We are in a retail business; we don’t have software that takes care of itself,” says Daniel B. Fitzpatrick, the chief executive of Quality Dining, which owns 116 Burger King (BKC) franchises in the Midwest. “We still have to clean the signs and take care of the grass. When real estate taxes go up, we pay it. When the minimum wages rise, we pay it,” Fitzpatrick says.
For years, Fitzpatrick and fellow Burger King franchisees regularly paid for these added costs by dipping into their portion of Burger King’s restaurant operating fund, which is funded in part by rebates that Coca-Cola (KO) and Dr. Pepper Snapple (DPS) contribute in return for being Burger King’s exclusive soda vendors. However, Burger King now plans to reallocate 20% to 40% of those rebates each year to bolster its advertising budget.
Faced with increasingly stiff competition among other quick service restaurants – a risk factor the company noted in its most recent 10k filing – Burger King plans to reallocate restaurant operating funds “for marketing and other promotional purposes in line with industry practice,” says Susan Robison, a BK spokeswoman.
The company says it expects to allocate $25 million in 2010 and increase the sum to almost $40 million in 2012. That’s roughly $5,000 to $6,000 a store each year. For Fitzpatrick, that amounts to a roughly $600,000 loss in the first year alone. “Times are tough; I don’t have $6,000 — much less $600,000 — to give up.”
October 1, 2009
By Diana Ransom
IF YOU’VE BEEN to a fast food restaurant lately, you’ve probably seen some of the fallout of the downturn. You may have eaten some of it, too.
In an effort to convince consumers to open their wallets wider, franchisors are not only requiring franchisees to officiate (and pay for) new promotions, they’re also requiring them to serve new products, extend operating hours and hand over more of their profits.
“The whole restaurant industry is struggling,” says Bonnie Riggs, an analyst for the market research firm NPD Group, which tracks industry revenues. Although total sales at quick-service restaurants were flat during April, May and June, overall restaurant sales fell 1% over the same period a year ago — the first decline of that magnitude in more than three decades, according to NPD research.
To boost sales, franchisors are taking a scattershot approach. “Franchisors are trying to be everything to everyone right now,” Riggs says. Given that penny-pinching consumers are eating more meals at home, franchisors are pulling out all the stops to reel them back in. They are asking franchisees to pitch cut-rate sandwiches and burgers and dreaming up premium, often exotic menu items to lure consumers back.
Just ask Mike Wright, a McDonald’s franchisee in Shalimar, Fla. To make way for McDonald’s new McCafé espresso-based coffee drinks, which launched nationally in May, he was looking at paying upwards of $125,000 to remodel the interiors of each of his seven stores. The company eventually changed its tune – after substantial pushback from franchisees – but Wright and his fellow franchisees were still strongly encouraged to purchase the necessary coffee and frappucino-style drink equipment. “At $14,000 a pop, you’ve got to sell a lot of coffee to make it up,” Wright says.
In Southern markets, selling hot coffee isn’t easy, Wright says. “When you start selling Bubba a cappuccino, it’s like trying to sell grits to a New Yorker,” he says. “They forced everyone to put this in their stores regardless of profitability.”
McDonald’s is telling its franchisees to have faith in the new menu. “Despite the economy, we are still seeing consistent growth in both our premium and value offerings,” says Julie Pottebaum, a McDonald’s spokeswoman.
Although offering premium products could be an indication that franchisors think the recession is over, many of the nation’s franchisees are still struggling. And even though offering tantalizing new items and discounts can help prop up sales, those tactics don’t always translate to higher profits for franchisees.
“There is a big difference between traffic and bottom-line profitability,” says Darren Tristano, the executive vice president of Technomic, a food industry research firm in Chicago. “From a franchisee perspective, they are looking hard at their cost structure,” he says. Imagine the profit margin on a $1 double cheeseburger, he says. “There isn’t much.”
Meanwhile, franchisees are also coping with added overhead. Adding new menu items often includes taking on more inventory, equipment and maintenance charges, as well as training expenses.
Franchisees have always been tasked with meeting franchisor demands; it’s the mechanism by which chains offer standardized products and ensure quality control. However, fielding a rush of new demands amid slumping sales and rising materials costs – while paying employees a new, higher minimum wage – is proving to be much more challenging than many franchisees expected.
“We are in a retail business; we don’t have software that takes care of itself,” says Daniel B. Fitzpatrick, the chief executive of Quality Dining, which owns 116 Burger King (BKC) franchises in the Midwest. “We still have to clean the signs and take care of the grass. When real estate taxes go up, we pay it. When the minimum wages rise, we pay it,” Fitzpatrick says.
For years, Fitzpatrick and fellow Burger King franchisees regularly paid for these added costs by dipping into their portion of Burger King’s restaurant operating fund, which is funded in part by rebates that Coca-Cola (KO) and Dr. Pepper Snapple (DPS) contribute in return for being Burger King’s exclusive soda vendors. However, Burger King now plans to reallocate 20% to 40% of those rebates each year to bolster its advertising budget.
Faced with increasingly stiff competition among other quick service restaurants – a risk factor the company noted in its most recent 10k filing – Burger King plans to reallocate restaurant operating funds “for marketing and other promotional purposes in line with industry practice,” says Susan Robison, a BK spokeswoman.
The company says it expects to allocate $25 million in 2010 and increase the sum to almost $40 million in 2012. That’s roughly $5,000 to $6,000 a store each year. For Fitzpatrick, that amounts to a roughly $600,000 loss in the first year alone. “Times are tough; I don’t have $6,000 — much less $600,000 — to give up.”
Tuesday, September 15, 2009
Restaurant Financing 2009 Update Re-cap
Restaurant Financing 2009 Update Re-cap
By: Colemanpublishing.com
September 15, 2009
2009 Restaurant Financing Update
-Roughly 50,000 SBA loans since 2000
-$11 Billion 7(a) and 504
-1 out of 9 SBA Loans finance restaurants
-15% failure rate
-12% of all Charge-offs since 2000
-1 Million Restaurants in United States
-(1 Restaurant for every 320 Americans)
Nathaniel Booker, President of First Innovative Financial Group, Inc. explains, "Quite often many of the deals that we have done are in strip centers, sometimes in malls. This is why it's very critical underwrite the business.
When you underwrite the business, you're underwriting the owner, management is very critical.
You want someone who has experience operating a restaurant. If they are opening up a second or third location you mitigate your risk of loss. When you're opening up a new location you need projections that are listed and supportable. Many of them don't do what I consider very critical analysis regard to table turn.
Chris Hurn, President & CEO of Mercantile Capital Corporation explains, "I want to see that they know their space well. If they're a sit down or fast casual, knowing what else is around that particular location is helpful.
"I'm a big believer that you can tell a lot about a company with the kind of measures restaurants have in place to try and make it such that the employee's enjoy what they do and then actually show it to the customers as well.
"Is the experience delivered consistently every single time? In the case of restaurants, do the waiters or waitresses check their attitudes at the door and they put on a performance when they're there. These are all non-financial, intangible items, but it's important to know that. It helps a lender contemplate doing a particular loan to know some of these things because it gives you a better feel for what this concept is going to be like and whether they should actually do it or not.
By: Colemanpublishing.com
September 15, 2009
2009 Restaurant Financing Update
-Roughly 50,000 SBA loans since 2000
-$11 Billion 7(a) and 504
-1 out of 9 SBA Loans finance restaurants
-15% failure rate
-12% of all Charge-offs since 2000
-1 Million Restaurants in United States
-(1 Restaurant for every 320 Americans)
Nathaniel Booker, President of First Innovative Financial Group, Inc. explains, "Quite often many of the deals that we have done are in strip centers, sometimes in malls. This is why it's very critical underwrite the business.
When you underwrite the business, you're underwriting the owner, management is very critical.
You want someone who has experience operating a restaurant. If they are opening up a second or third location you mitigate your risk of loss. When you're opening up a new location you need projections that are listed and supportable. Many of them don't do what I consider very critical analysis regard to table turn.
Chris Hurn, President & CEO of Mercantile Capital Corporation explains, "I want to see that they know their space well. If they're a sit down or fast casual, knowing what else is around that particular location is helpful.
"I'm a big believer that you can tell a lot about a company with the kind of measures restaurants have in place to try and make it such that the employee's enjoy what they do and then actually show it to the customers as well.
"Is the experience delivered consistently every single time? In the case of restaurants, do the waiters or waitresses check their attitudes at the door and they put on a performance when they're there. These are all non-financial, intangible items, but it's important to know that. It helps a lender contemplate doing a particular loan to know some of these things because it gives you a better feel for what this concept is going to be like and whether they should actually do it or not.
Tuesday, August 11, 2009
Coffee perks up McDonald’s global sales
Coffee perks up McDonald’s global sales
By Jenny Wiggins in London
Published: August 10 2009 17:51 Last updated: August 10 2009 23:43
McDonald’s move into mochas and iced lattes has helped the fast-food chain report its seventh consecutive month of increases in global sales this year, underscoring the resilience of its business model in the recession.
The company’s shares rose 1.9 per cent on Monday to $56.27 after it said comparable-stores sales had risen 4.3 per cent in July, compared with an increase of 8 per cent a year earlier but beating analysts’ consensus expectations of a 3.2 per cent climb and ahead of June’s 2.6 per cent rise.
Jason West, analyst at Deutsche Bank, said the global sales increase had alleviated concern about a possible “downward spiral” in comparable sales, as had been seen at competitors like Burger King. “Globally, they have not had a negative month [in sales] in several years,” he said.
Sales were up 2.6 per cent in the US – which contributes about half the company’s profits – because of strong sales of coffees and core menu items like hamburgers and fries.
McDonald’s expansion into fancy coffees under the McCafé brand is part of a strategy to capture more customers at breakfast time and win them over from coffee chains to its lower-priced drinks.
The move has forced Starbucks to defend its brand. It has been running marketing campaigns with the slogan: “It’s not just coffee. It’s Starbucks.”
In the US, McDonald’s is selling espressos and mochas in its existing stores.
In Europe, it is emulating its Australian business and opening separate McCafé counters, operating in or next to its restaurants. The group plans to have 1,200 McCafés in Europe by the end of the year.
McDonald’s strongest sales were in Europe, up 7.2 per cent because of the popularity of its “tiered menu” – which offers cheap, middling and expensive options – as well as summer specials such as chicken, bacon and onion sandwiches in France and burgers based on the “great tastes of America” in the UK.
These include a “New York special”, which has beef, streaky bacon, smoked cheese, lettuce, onions and onion mayo in a chilli, chive and sesame bun.
In Asia-Pacific, Middle East and Africa – which make up 13 per cent of total profit – sales rose 2.1 per cent. McDonald’s attributed the rise to the “creativity” of its Australian business, which runs marketing campaigns based on a single theme – currently, family – and has introduced apple and cinnamon mini-muffins and spinach feta strudels, as well as opening more 24-hour and drive-through stores.
But sales in China, where it has been slowing new store openings, were weaker as consumers favour cheaper local brands.
McDonald’s has some 1,000 stores in China and plans to open 150 this year, compared with earlier projections of 175.
By Jenny Wiggins in London
Published: August 10 2009 17:51 Last updated: August 10 2009 23:43
McDonald’s move into mochas and iced lattes has helped the fast-food chain report its seventh consecutive month of increases in global sales this year, underscoring the resilience of its business model in the recession.
The company’s shares rose 1.9 per cent on Monday to $56.27 after it said comparable-stores sales had risen 4.3 per cent in July, compared with an increase of 8 per cent a year earlier but beating analysts’ consensus expectations of a 3.2 per cent climb and ahead of June’s 2.6 per cent rise.
Jason West, analyst at Deutsche Bank, said the global sales increase had alleviated concern about a possible “downward spiral” in comparable sales, as had been seen at competitors like Burger King. “Globally, they have not had a negative month [in sales] in several years,” he said.
Sales were up 2.6 per cent in the US – which contributes about half the company’s profits – because of strong sales of coffees and core menu items like hamburgers and fries.
McDonald’s expansion into fancy coffees under the McCafé brand is part of a strategy to capture more customers at breakfast time and win them over from coffee chains to its lower-priced drinks.
The move has forced Starbucks to defend its brand. It has been running marketing campaigns with the slogan: “It’s not just coffee. It’s Starbucks.”
In the US, McDonald’s is selling espressos and mochas in its existing stores.
In Europe, it is emulating its Australian business and opening separate McCafé counters, operating in or next to its restaurants. The group plans to have 1,200 McCafés in Europe by the end of the year.
McDonald’s strongest sales were in Europe, up 7.2 per cent because of the popularity of its “tiered menu” – which offers cheap, middling and expensive options – as well as summer specials such as chicken, bacon and onion sandwiches in France and burgers based on the “great tastes of America” in the UK.
These include a “New York special”, which has beef, streaky bacon, smoked cheese, lettuce, onions and onion mayo in a chilli, chive and sesame bun.
In Asia-Pacific, Middle East and Africa – which make up 13 per cent of total profit – sales rose 2.1 per cent. McDonald’s attributed the rise to the “creativity” of its Australian business, which runs marketing campaigns based on a single theme – currently, family – and has introduced apple and cinnamon mini-muffins and spinach feta strudels, as well as opening more 24-hour and drive-through stores.
But sales in China, where it has been slowing new store openings, were weaker as consumers favour cheaper local brands.
McDonald’s has some 1,000 stores in China and plans to open 150 this year, compared with earlier projections of 175.
Tuesday, August 4, 2009
Chains, franchisees square off over discounted menu items
Chains, franchisees square off over discounted menu items
By RON RUGGLESS
(July 27, 2009) The recession-driven rush to grease sales with promotions and value deals is leading to mounting frictions between franchisors and franchisees.
Brands such as Burger King, McDonald’s, Quiznos, Subway, Popeyes and KFC all have recently found themselves working to restore the delicate balance between the franchisor’s need to drive traffic and the franchisee’s need to protect margins.
Burger King recently battled franchisees over plans to offer a $1 double cheeseburger.
Most recently, Burger King franchisees in mid-July twice rejected plans by Burger King Corp. to offer a $1 double cheeseburger that could square off against value items from quick-service competitors. The Miami-based franchisor eventually capitulated, deciding to offer the value item with a coupon program planned for August.
“It’s a challenge for any franchisor to push through a promo that cuts at franchisee’s profit margins,” said Lorne Fisher, chief executive and owner of Fish Consulting Inc. in Hollywood, Fla., whose clients include a number of restaurant and retail franchisors.
Communication from both parties is key to dissipating such tensions, Fisher said.
“From our experience, it is important to quantify the benefits to the franchisee to ensure they understand the value despite the cut in margin,” Fisher said.
“Whether the increase comes in consumer traffic, average check size or brand awareness, the franchisor must be able to present the tangible benefit to sell the promotion successfully and maximize the system’s participation,” he said.
Quiznos is among the franchisors that have run into conflict with franchisees this year. The Denver-based franchisor encountered wide pushback from franchisees over the $5.29 sandwiches it had hoped to give away in its “Million Sub Giveaway.” McDonald’s franchisees reportedly expressed concerned over the national introduction of the premium Angus burger in early July, while some Subway franchisees were upset by the chain’s ongoing “$5 Footlong” promotion.
Tempers also flared at both Popeyes and KFC over one-day product giveaways that found many franchisees emptying their larders as cash-strapped consumers rushed in for free goods. KFC’s high-profile marketing boost from Oprah Winfrey exacerbated the situation.
Burger King on July 14 reached detente with its franchisees when it said it would beef up the promotion of its $1 Whopper Jr. and feature the double cheeseburger in an August coupon offer.
“Burger King Corp. remains fully focused on its value offerings and delivering value for the money to its guests,” the company said in a statement. “As such, many product and menu options are always in development and under consideration.”
The company added, “BKC will also be deploying traffic-driving national coupons to nearly 80 million households during this time period with almost $50 in savings per coupon booklet.”
A spokeswoman added: “The direct-mail coupon book includes a $1 double cheeseburger offer from Burger King restaurants, and with more beef than a similar sandwich from McDonald’s, the offer will represent motivating affordability to burger lovers nationwide.”
McDonald’s replaced its double cheeseburger that had been on its Dollar Menu with the McDouble, above, which has only one slice of cheese.
Rival McDonald’s raised the price of its double cheeseburger from $1 to $1.19 late last year amid rising costs and franchisee complaints that a profit could not be made on the item. The double cheeseburger was replaced on the Dollar Menu with the McDouble sandwich, which contains two patties but only one slice of cheese.
Joe Buckley, an analyst with Bank of America-Merrill Lynch, said in a report that franchisee tension stemming from an ongoing soft-drink contract dispute could be a roadblock for Burger King as it seeks to add value offerings to drive traffic.
“We are concerned that the lack of alignment between Burger King and its franchisees could complicate efforts to turn sales,” Buckley said in downgrading the stock to “neutral” from “buy.”
The economic downturn has only served to heighten franchisee-franchisor tensions. Analysts said low-margin promotions in flush times could be a “loss leader,” drawing in customers who may buy additional, more profitable items to raise the check average. However, as patrons cut back on those extras, the “loss” loses its “leader,” and the franchisee is left holding the bag.
McDonald’s recent introduction of both the new coffee line, of which both the iced and hot mocha are being offered for free on Mondays through Aug. 3, and the new premium Angus burger have raised the eyebrows of franchisees. They have expressed concern that McDonald’s is trending too far away from its value focus and placing too much strain on franchisee operations.
In an April survey of McDonald’s franchisees by former stock analyst and independent researcher Mark Kalinowski, one unidentified McDonald’s franchisee called the Angus burger “another poor-margin item.”
However, Danya Proud, McDonald’s senior manager of U.S. communications, said many franchisees’ concerns were allayed.
“The franchisees told us they couldn’t get it in their restaurants quickly enough,” she told Nation’s Restaurant News earlier this month. “I think people misconstrued things. During the early stages of the test we were using a slightly bigger burger that would have required new equipment. But we went to slightly smaller burgers that can be prepared on existing grills.” —rruggles@nrn.com
By RON RUGGLESS
(July 27, 2009) The recession-driven rush to grease sales with promotions and value deals is leading to mounting frictions between franchisors and franchisees.
Brands such as Burger King, McDonald’s, Quiznos, Subway, Popeyes and KFC all have recently found themselves working to restore the delicate balance between the franchisor’s need to drive traffic and the franchisee’s need to protect margins.
Burger King recently battled franchisees over plans to offer a $1 double cheeseburger.
Most recently, Burger King franchisees in mid-July twice rejected plans by Burger King Corp. to offer a $1 double cheeseburger that could square off against value items from quick-service competitors. The Miami-based franchisor eventually capitulated, deciding to offer the value item with a coupon program planned for August.
“It’s a challenge for any franchisor to push through a promo that cuts at franchisee’s profit margins,” said Lorne Fisher, chief executive and owner of Fish Consulting Inc. in Hollywood, Fla., whose clients include a number of restaurant and retail franchisors.
Communication from both parties is key to dissipating such tensions, Fisher said.
“From our experience, it is important to quantify the benefits to the franchisee to ensure they understand the value despite the cut in margin,” Fisher said.
“Whether the increase comes in consumer traffic, average check size or brand awareness, the franchisor must be able to present the tangible benefit to sell the promotion successfully and maximize the system’s participation,” he said.
Quiznos is among the franchisors that have run into conflict with franchisees this year. The Denver-based franchisor encountered wide pushback from franchisees over the $5.29 sandwiches it had hoped to give away in its “Million Sub Giveaway.” McDonald’s franchisees reportedly expressed concerned over the national introduction of the premium Angus burger in early July, while some Subway franchisees were upset by the chain’s ongoing “$5 Footlong” promotion.
Tempers also flared at both Popeyes and KFC over one-day product giveaways that found many franchisees emptying their larders as cash-strapped consumers rushed in for free goods. KFC’s high-profile marketing boost from Oprah Winfrey exacerbated the situation.
Burger King on July 14 reached detente with its franchisees when it said it would beef up the promotion of its $1 Whopper Jr. and feature the double cheeseburger in an August coupon offer.
“Burger King Corp. remains fully focused on its value offerings and delivering value for the money to its guests,” the company said in a statement. “As such, many product and menu options are always in development and under consideration.”
The company added, “BKC will also be deploying traffic-driving national coupons to nearly 80 million households during this time period with almost $50 in savings per coupon booklet.”
A spokeswoman added: “The direct-mail coupon book includes a $1 double cheeseburger offer from Burger King restaurants, and with more beef than a similar sandwich from McDonald’s, the offer will represent motivating affordability to burger lovers nationwide.”
McDonald’s replaced its double cheeseburger that had been on its Dollar Menu with the McDouble, above, which has only one slice of cheese.
Rival McDonald’s raised the price of its double cheeseburger from $1 to $1.19 late last year amid rising costs and franchisee complaints that a profit could not be made on the item. The double cheeseburger was replaced on the Dollar Menu with the McDouble sandwich, which contains two patties but only one slice of cheese.
Joe Buckley, an analyst with Bank of America-Merrill Lynch, said in a report that franchisee tension stemming from an ongoing soft-drink contract dispute could be a roadblock for Burger King as it seeks to add value offerings to drive traffic.
“We are concerned that the lack of alignment between Burger King and its franchisees could complicate efforts to turn sales,” Buckley said in downgrading the stock to “neutral” from “buy.”
The economic downturn has only served to heighten franchisee-franchisor tensions. Analysts said low-margin promotions in flush times could be a “loss leader,” drawing in customers who may buy additional, more profitable items to raise the check average. However, as patrons cut back on those extras, the “loss” loses its “leader,” and the franchisee is left holding the bag.
McDonald’s recent introduction of both the new coffee line, of which both the iced and hot mocha are being offered for free on Mondays through Aug. 3, and the new premium Angus burger have raised the eyebrows of franchisees. They have expressed concern that McDonald’s is trending too far away from its value focus and placing too much strain on franchisee operations.
In an April survey of McDonald’s franchisees by former stock analyst and independent researcher Mark Kalinowski, one unidentified McDonald’s franchisee called the Angus burger “another poor-margin item.”
However, Danya Proud, McDonald’s senior manager of U.S. communications, said many franchisees’ concerns were allayed.
“The franchisees told us they couldn’t get it in their restaurants quickly enough,” she told Nation’s Restaurant News earlier this month. “I think people misconstrued things. During the early stages of the test we were using a slightly bigger burger that would have required new equipment. But we went to slightly smaller burgers that can be prepared on existing grills.” —rruggles@nrn.com
Wednesday, July 29, 2009
Recession puts dent in U.S. restaurant count
Recession puts dent in U.S. restaurant count
From Nation's Restaurant News
By Sarah E. Lockyer
PORT WASHINGTON, N.Y. (July 27, 2009) The total number of restaurant locations in the United States shrunk during the past year, as smaller chains and independents in particular had difficulty weathering the economic storm.
According to the latest NPD Group ReCount, which tallies all commercial restaurant locations in the United States, the number of restaurants fell 1 percent this spring to 577,178 locations. A little more than 4,000 restaurants were closed from a year ago, when the United States boasted 581,201 restaurants, according to NPD research. The latest data was collected from April 1, 2008, to March 31, 2009.
The hardest-hit categories were fine-dining independents, which saw unit counts fall 7 percent. Smaller family-dining chains were close behind, with a 6-percent drop in locations among chains of between 50 and 99 units and a 5-percent drop in locations among chains that numbered between 100 and 499 locations.
“It’s clear that independent restaurants and smaller chains have been most impacted by the slower economy,” said Susan Kleutsch, director of product development for foodservice at The NPD Group, a market research firm based in Port Washington, N.Y. “The recession appears to have weeded out restaurants performing poorly prior to the economic downturn, and this seems most true for independents and smaller chains that are likely having a hard time competing with the resources and marketing power of major chains.”
Restaurants have been battling such economic pressures as slowed sales from reduced consumer spending and increased operating costs, especially for commodities, as well as higher rent and labor expenses. The past year has brought high-profile unit closures at such chains as Bennigan’s, Steak & Ale, Ruby Tuesday and Ryan’s Grill Buffet & Bakery.
The largest chains, which NPD classifies as those with more than 500 units, posted unit growth in all segments except family dining, where growth remained flat. Among the largest chains, the number of total restaurant locations rose 1 percent, reflecting a 1-percent uptick in quick-service locations and a 2-percent increase in casual-dining restaurants.
In Nation’s Restaurant News 2009 Top 100 report, which covers the largest of restaurant chain operations ranked by total domestic foodservice sales, the aggregate restaurant unit count hit 195,227 for those ranked Nos. 1-100 in size, a 1.6-percent increase from a year ago.
In the 2008 Top 100 report, the unit growth rate equaled 2.2 percent.
Among NRN’s Second 100 chains, which are mostly mid-sized, growth-oriented brands, the aggregate unit count totaled 29,299, which was a 1.5-percent increase from a year ago. In the 2008 Second 100 study, unit counts among the Second 100 chains increased 1.8 percent.
From Nation's Restaurant News
By Sarah E. Lockyer
PORT WASHINGTON, N.Y. (July 27, 2009) The total number of restaurant locations in the United States shrunk during the past year, as smaller chains and independents in particular had difficulty weathering the economic storm.
According to the latest NPD Group ReCount, which tallies all commercial restaurant locations in the United States, the number of restaurants fell 1 percent this spring to 577,178 locations. A little more than 4,000 restaurants were closed from a year ago, when the United States boasted 581,201 restaurants, according to NPD research. The latest data was collected from April 1, 2008, to March 31, 2009.
The hardest-hit categories were fine-dining independents, which saw unit counts fall 7 percent. Smaller family-dining chains were close behind, with a 6-percent drop in locations among chains of between 50 and 99 units and a 5-percent drop in locations among chains that numbered between 100 and 499 locations.
“It’s clear that independent restaurants and smaller chains have been most impacted by the slower economy,” said Susan Kleutsch, director of product development for foodservice at The NPD Group, a market research firm based in Port Washington, N.Y. “The recession appears to have weeded out restaurants performing poorly prior to the economic downturn, and this seems most true for independents and smaller chains that are likely having a hard time competing with the resources and marketing power of major chains.”
Restaurants have been battling such economic pressures as slowed sales from reduced consumer spending and increased operating costs, especially for commodities, as well as higher rent and labor expenses. The past year has brought high-profile unit closures at such chains as Bennigan’s, Steak & Ale, Ruby Tuesday and Ryan’s Grill Buffet & Bakery.
The largest chains, which NPD classifies as those with more than 500 units, posted unit growth in all segments except family dining, where growth remained flat. Among the largest chains, the number of total restaurant locations rose 1 percent, reflecting a 1-percent uptick in quick-service locations and a 2-percent increase in casual-dining restaurants.
In Nation’s Restaurant News 2009 Top 100 report, which covers the largest of restaurant chain operations ranked by total domestic foodservice sales, the aggregate restaurant unit count hit 195,227 for those ranked Nos. 1-100 in size, a 1.6-percent increase from a year ago.
In the 2008 Top 100 report, the unit growth rate equaled 2.2 percent.
Among NRN’s Second 100 chains, which are mostly mid-sized, growth-oriented brands, the aggregate unit count totaled 29,299, which was a 1.5-percent increase from a year ago. In the 2008 Second 100 study, unit counts among the Second 100 chains increased 1.8 percent.
Monday, June 22, 2009
Siam Square
Click HERE to check out information on Siam Square.
It's a real gem! Located in Fountain Square (downtown Indy)...may have the best thai food in Indy! Give it a try!
It's a real gem! Located in Fountain Square (downtown Indy)...may have the best thai food in Indy! Give it a try!
Thursday, March 26, 2009
Local Franchise News
Click the article link below to get the latest news on Noble Roman's, a local Indianapolis franchise.
Franchisee Legal Action May Bankrupt Noble Roman's
Franchisee Legal Action May Bankrupt Noble Roman's
Monday, March 2, 2009
Check Out What Wines to Pair w/ Asian Cuisine
Occasionally I run across good articles which offer excellent tips on improving a business and I will be putting these links on my blog. This is a good artlcle for owners of Asian restaurants and I think illustrates the growing popularity of wine in general and its importance for restaurants in making the dining experience better for their customers and adding a potential profit center for the restaurant.
"What Wines to Pair with Asian Cuisine?"
"What Wines to Pair with Asian Cuisine?"
Friday, February 20, 2009
Larry Battershell Named Industry Expert!
The 2009 Business Reference Guide "The Essential Guide to Pricing Businesses and Franchises", 19th Edition, has named Larry Battershell an "Industry Expert" in 'Bars' and 'Restaurants, Limited Service'.
The guide is the premier source of business valuation information in the business broker industry.
The guide is the premier source of business valuation information in the business broker industry.
Tuesday, February 10, 2009
Indiana Restaurant Association and Indiana Association of Beverage Retailers
When looking to buy a business it is often a very good idea to check out various trade associations. In the bar and restaurant industry in Indiana two very good groups which provide excellent information on industry trends, pending legislation and news are:
Indiana Restaurant Association and Indiana Association of Beverage Retailers. Links to both have been placed on this site. In looking to buy a specific business or franchise--google!!!! It's amazing what you can find out about a franchisor if you google "franchisee complaints".
Indiana Restaurant Association and Indiana Association of Beverage Retailers. Links to both have been placed on this site. In looking to buy a specific business or franchise--google!!!! It's amazing what you can find out about a franchisor if you google "franchisee complaints".
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Son Isaac on Camel in Tangiers
