Restaurants

The Greene Turtle Proves it Can Win Without Sports

Restaurant Management - Mon, 08/10/2020 - 08:44
The Greene Turtle Proves it Can Win Without Sports danny Mon, 08/10/2020 - 08:44

Company-run sales have reached 85 percent of pre-COVID volume. 

August 2020

The onset of COVID couldn’t have come at a worse time for The Greene Turtle.

The sports bar chose March to launch its new innovation menu that resulted in a net increase of 10 items, with a heavy emphasis on better-for-you and lighter fare, such as steak and salmon bowls.

The restaurant hoped to combine that roll out—along with a new beverage program and other revamps it was testing—alongside the NCAA Tournament. However, those visions were dashed as the tournament was canceled March 12, followed by state-mandated closures of dining rooms in subsequent weeks.

“No doubt it was painful all around and it was particularly painful for us because we tied our relaunch to that March period,” Greene Turtle CEO Geo Concepcion says. “That obviously was a hard hit to the team.”

In that mid-March period, the organization went from nearly 700 employees down to 30 and from more than a dozen company-run stores to four units operating via off-premises only.

That left Concepion staring into the abyss, with an uncertain future. 

“At the same time, you’re trying to figure out, how do I make sure that I keep a core that can help us figure this out and at least keep us in the fight while all of this starts to clear up,” he says.

The executive team rolled up their sleeves, moving inventory from store to store. Concepion says it was a “full-on effort from everyone involved.”

Between the Paycheck Protection Program and an increase in off-premises sales, the brand began to see signs of life. After garnering 30 percent of pre-COVID volume at corporate stores in March, sales increased to about 55 percent in May. In July, the restaurant reached 85 percent of normal sales. With the exception of two weeks, the brand has seen double-digit increases week-over-week, including the first week of July. That’s in light of rising COVID cases across the country.

The Greene Turtle reopened all 15 company-run stores, with sales breaking down to 60 percent dine-in and 40 percent off-premises. To-go sales tripled during the pandemic, and the company has managed to maintain that level as dining rooms reopened.

“For a full-service restaurant, I think that’s a huge success in this environment,” Concepcion says.

When the company shifted to off-premises only, the new innovation menu was removed and replaced with an offering that was reduced by 60 percent. However, the revamped menu was reintroduced on July 20, and Concepcion says Greene Turtle hired new culinary talent to test four to five new items that show promise.

Systemwide, The Greene Turtle is now at 38 units, including 23 franchises. Four franchised units closed permanently during the pandemic. However, the CEO says that in the Maryland market, franchisees have seen an equivalent—if not better—resurgence. He notes that four franchises are beating pre-COVID levels year-over-year.

Additionally, staffing is up to roughly 450 employees.

“What we discovered in this entire pandemic, at least for our team, is I describe them as anti-fragile,” Concepcion says. “And I say anti-fragile meaning that the core group that we had actually got strong on the back of all of this. So what does that mean? We had managers who had to work the line in some instances and had to be really close to what was happening in the way we were preparing food, and so all of our folks basically went through a re-training, and we had our best folks doing it. While it was really horrible to lose all of that, the muscles we built and the resilience of the organization was incredible.”

That growth proved key as the company tried to win based on the merits of experience as live sports disappeared. The CEO says that while sports is part of the restaurant’s DNA and always will be, that aspect is supposed to be additive, and not the main draw.

“I think not having sports has hurt us, but we’ve definitely been the beneficiaries of our new menu and our new program,” Concepcion says. “And the volume we’ve recovered with no sports I think shows that pivot we made was definitely starting to work and continues to work for us. So when sports start to come back, in whatever form, I think all of that will just be additive to what we’re already doing, which is what we always wanted. We wanted people to think of us as a great bar and restaurant first with sports as another added benefit of the experience.”

When it came to rebuilding staff, Concepion says his team took it as an opportunity to recreate the environment and culture, and a critical piece of that was determining who should enter the fold.

Despite competing with enhanced unemployment benefits, The Greene Turtle accomplished its goal to restructure the environment, and Concepcion believes it's because of two guiding questions—do the candidates seem like team players who will create a culture everyone wants to be in and can they produce the results we need?

“Leading with that first question I think really helped us hone in on picking the right people who wanted to be part of the team,” Concepcion says. “And certainly, even though it might have been an option for them to stay on unemployment, they were more drawn to the team environment that we’re creating here.”

Going forward, Concepcion says that no restaurant can deny the evolving consumer who wants more convenience. That means the brand’s future is about retaining the momentum of off-premises and accelerating the response.

The Greene Turtle will dive into the digital element, contactless payment, and the appropriate curbside experience.

“We’re launching tests in all of those areas because we think that not only will we retain that larger share of to-go business, but it will continue to be a big driver for us in the future,” Concepcion says.

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Categories: Restaurants

Chuy’s is Staffed and Prepared to Weather COVID

Restaurant Management - Fri, 08/07/2020 - 11:01
Chuy’s is Staffed and Prepared to Weather COVID danny Fri, 08/07/2020 - 11:01

Eighty percent of hourly employees were furloughed, but a majority have returned.

August 2020

Back in March, the COVID pandemic hit Chuy’s as hard as any other full-service brand. 

The chain was forced to furlough 80 percent of its hourly staff and operate off-premises with limited menus at 92 of its 101 locations. Same-store sales reached a low of 67 percent in the week ending March 22. 

But as dining rooms have reopened, sales have increased in subsequent weeks. Chuy’s has seen its pivot in operations—enhanced takeout, curbside pickup, delivery with national partner DoorDash, and family meal and beverage kits—continually flourish into August. 

Average weekly sales improved from $38,800 in April with no indoor dining to $70,500 in June with 92 dining rooms open. Off-premises also remains more than double than it was pre-COVID. In Q2, to-go sales mixed 60 percent. Early into Q3, the channel still captures roughly 35 to 40 percent of sales. 

As a result, Chuy’s rehired a majority of its furloughed employees by the end of Q2. Quarter-to-date, restaurants are staffed, and salaries have returned to normal. And in June, the chain generated higher free cash flow year-over-year with lower sales. 

“While we expect that our restaurant operating costs will increase when the dining room capacity restrictions are further loosened, we are confident that we can build upon our recent operational efficiency to positively impact our business over the long run,” said CEO Steve Hislop during Chuy’s Q2 earnings call. 

Same-store sales improved from a decrease of 55.2 percent in April to a decline of 44.8 percent in May and then to a drop of 21.6 percent in June. 

In July, comps slightly reversed, coming in at 26.3 percent. That can be attributed to the rise in COVID cases across the country and the reinstitution of stricter mandates, like in Texas and Florida. 

Hislop said comps dropped about 13 to 14 percentage points in the first couple of weeks of July. However, he added that “people finally started getting tired of that, and they get out again.” So toward the end of the month, the slide was 5 percentage points. 

The CEO explained that Chuy’s has turned to outdoor dining to improve seating capacity. In the past, the patio business used to be 7.9 percent of sales. It’s grown to 10 to 13 percent during the pandemic.

“When we are at 50 percent capacity, which is where we are on most states, I don't know that we can really do inside much more than that—maybe 50 percent or 60 percent because of the 6-foot distancing,” Hislop said. “There are a few things that we can do with the place—the glass on booths, and things like that. However, we don't have that many booths. So that doesn't help expand our dining room that much either. And so, at 6-foot distancing, we can really expand our patio and get a little extra booths, which we're seeing that now. … And the biggest thing is just really promoting and driving the heck out of to-go.”

Comp sales in Q2 dropped 39 percent, including a 42.8 percent slide in average weekly customers and 3.8 percent increase in average check. Revenue dropped from $113.1 million in Q2 2019 to $65.7 million this year, or a 41.9 percent decrease.

Hislop acknowledged that some competition has closed its doors, giving Chuy’s an opportunity to grow in markets even more than they are right now. 

However, the company still has nine stores that have been closed since the beginning of the pandemic. The CEO said he plans on visiting those stores soon to get an update on their viability. 

“So, after this is normalized and we're comfortable traveling all over the country, I'm going to visit our stores along with our real estate department and really look at what's happened in the environment, and specifically the competitive environment and all those closed stores,” Hislop said. “And then I'll start making determinations whether we're going to open those are not. Until that time, I'm just saying they're all temporarily closed. But obviously, even in some markets where maybe in the past I haven't been able to get into because of the number of stores, we love the hermit crabs. So we like to go into those markets and we look at some opportunity events and see if we can pick up some of those that will expand our footprint in our existing market points.”

Now that dining rooms are open, Hislop said the company will resume its marketing effort in Q4 with key messaging on value, convenience, and safety. The limited menu will stay through Q2, but toward the end of 2020, the brand will have ‘a handful of items pop back on the menu.’

“We had a great quarter, and our sales momentum continued thus far into the third quarter despite the recent roll back in dining room reopenings in certain states,” Hislop said. “Our business operations are more efficient and our balance sheet is strong. While there continues to be a level of uncertainty surrounding COVID-19 in the near future, we believe our team is very resilient and will remain nimble to adapt to any challenges in the market condition.”

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Categories: Restaurants

More on the Uber-Postmates Fallout, from an Expert

Restaurant Management - Fri, 08/07/2020 - 10:40
More on the Uber-Postmates Fallout, from an Expert danny Fri, 08/07/2020 - 10:40

It's all about the data.

August 2020

Consolidation came for the third-party delivery space during COVID-19. Grubhub joined European food delivery company Just Eat Takeaway for $7.3 billion after a deal with Uber fell through. Then, the latter merged with Postmates in a $2.65 billion blockbuster.

What does this all mean for aggregators and restaurants alike? Christian Selchau-Hansen, co-founder and CEO of Formation.ai, offered his thoughts in a recent chat with FSR.

Can you explain how the Uber/Postmates acquisition might affect discounting and promotions offered on the platform?

Food delivery has become quite commoditized. The consolidation we are seeing is a natural evolution as companies work to establish an improved economic structure for the industry. With the Postmates acquisition, UberEats immediately moves into a strong second position behind Doordash in terms of volume. Of course, the big assumption is holding onto as many of the Postmates customers as possible. This will require maintaining aggressive promotions that Postmates has been known for as well as their subscription service. Over time, UberEats will seek to better optimize discounting in order to improve their margin structure and likely do so via highly targeted discounts and promotions. 

Postmates was pretty popular on its own, and now backed by UberEats, what opportunities may Postmates now have as far as new data, more financial resources, etc.?

Postmates and UberEats will immediately combine their customer data. That breadth of data will allow UberEats to create more relevant offerings as they merge the Postmates operations into UberEats. Data will be critical to engaging their customers on an individual basis.

How can brands maintain or initiate customer loyalty as the delivery market continues to mature?

It’s hard to overstate how crucial customer loyalty is in an oversaturated market. Once a company can identify its customers and map various customer behaviors to each customer record, it needs to focus on moving past segmentation and to engage their customers as individuals. Traditional personalization through segmentation falls flat in a world where customers expect a much higher degree of relevance. Marketing messages and promotional offers need to be truly personal. 

What can brands do to stand out and capture customers?

With a combined data footprint, UberEats can build a deeper understanding of what drives each customer to order. They can then create promotions tailored to address those motivations instead of sinking money into mass promotions that don’t build loyalty.

As far as loyalty goes, PROMO codes definitely aren't enough, but are they effective at all?

Promotions and discounts are effective when they’re targeted at the right customer, at the right time, and with the right offer. A $5 off or free delivery promotion may be effective to drive a short-term bump in order volume, but can hurt businesses and brand equity long term. A mass promotion targeted at the wrong customer could actually be a turnoff to the service rather than an enticement. To build both customer loyalty and a healthy business, it’s important to recognize each customer and provide them with a personal promotion—an offer that is both relevant and valuable.

If a PROMO code isn't enough to keep customers coming back, what is?

Brands must shift toward using an omnichannel personalized approach to create a tailored experience. A lot of brands are reluctant to invest the time it takes to do this effectively, but the combination of AI and ML with an offer automation engine built for 1:1 offers is very effective at doing this at enterprise scale. 

What would 1:1 personalization look like for a third-party delivery service?

For a third-party delivery service, there are a lot of factors that are important for each customer. For example, what is the ideal ordering time, food preferences, product likes and dislikes, and average amount of money spent can be utilized for 1:1 personalization. Once a company understands each customer on an individual level, offers and discounts should be individually tailored. With these personal promotions, customers can be enticed to try new offerings, new occasions and expand their share-of-wallet as the value they derive from the service grows. 

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Categories: Restaurants

Red Lobster Taps Adviser to Explore Strategic Options, Report Says

Restaurant Management - Fri, 08/07/2020 - 10:19
Red Lobster Taps Adviser to Explore Strategic Options, Report Says danny Fri, 08/07/2020 - 10:19

The chain is facing COVID-19 pressures.

August 2020

According to a new report from Debtwire, Red Lobster is exploring strategic options after facing “unprecedented challenges resulting from the COVID-19 pandemic.” The casual chain engaged adviser Guggenheim, sources familiar with the situation told Debtwire.

Red Lobster is dealing with earnings pressure and near-term maturities. It has a $380 million term loan coming due in July 2021.

As of February 23, Red Lobster had about $216 million of unrestricted cash, Debtwire said.

In March, Moody’s Investor Service downgraded its rating of Red Lobster to Caa1 (poor quality and high credit risk) and handed it a negative ratings outlook. It also downgraded Red Lobster's senior secured bank credit facility to Caa1.

“In addition, prior to the impact of COVID19, Red Lobster faced challenging operating trends, particularly traffic,” Moody’s wrote its rationale.

William Fahy, VP senior credit officer for Moody’s, told SeafoodSource in May that Red Lobster’s focus on seafood would pressure the chain heavier than competitors. The company forecasted in March that operating profit for the entire industry could decline 10 percent to more than 20 percent in the coming year.

In June, Red Lobster had reopened a sizable set of dining rooms, with to-go operations in place at all locations, the company told FSR earlier.

Red Lobster had nearly $2.5 billion in U.S. sales in 2019—a 2.1 percent year-over-year decline. It also dipped to 670 restaurants from 675, according to FoodserviceResults. Average-unit volumes fell to $3.494 million from $3.550 million. The sales figure put Red Lobster at No. 10 in this year’s FSR 50 ranking of the country’s top-grossing full-service chains, ahead of The Cheesecake Factory, LongHorn, and Red Robin.

In a June 3 credit opinion, Moody’s noted Red Lobster benefited from its adequate liquidity position with significant cash balances that plug any near-term cash-burn deficits. The outlook also took into account the negative impact on consumers ability and willingness to spend on eating out until the crisis materially subsides.

“Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns,” Moody’s wrote. “With Red Lobster's product offering concentrated toward seafood the company has a well-articulated Seafood with Standards commitment to sustainable, traceable and responsible sourcing of seafood, which more recently includes the elimination of plastics straws throughout its restaurants.”

At the time, Moody’s noted that the maturity of a $150 million asset-based loan was extended to December 31 from June 21.

Golden Gate Capital took Red Lobster private in 2014 from Darden via a $2.1 billion deal. In 2016, Thai Union Group made a $575 million minority investment. The group, known for its “Chicken of the Sea” tuna product, was involved with Red Lobster on the supplier level for more than 20 years.

“Red Lobster's private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies,” Moody’s wrote.

Golden Gate also directs California Pizza Kitchen, which filed for bankruptcy last week.

Debtwire said Red Lobster's term loan has traded higher over the last several weeks.  The $380 million Libor plus 525 basis points (1 percent floor) term loan due 2021, is quoted 83/86, compared to 70.25/76.75 on 14 April, according to Markit.

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Categories: Restaurants

How One Arizona Restaurateur is Saving his Small-Town Restaurants

Restaurant Management - Thu, 08/06/2020 - 15:23
How One Arizona Restaurateur is Saving his Small-Town Restaurants danny Thu, 08/06/2020 - 15:23

Skyler Reeves moved quickly, and hasn't let off the gas since.

August 2020

Surviving as an independent restaurant in today’s COVID-19 arena doesn’t come without difficult calls. At the onset of the pandemic, Skyler Reeves, proprietor of Vivili Hospitality Group in Prescott, Arizona, consolidated his three restaurants, The Barley Hound, Rosa’s Pizzeria, and Taco Don’s. He then paused catering, stopped construction on a new venue, slated to be among the city’s largest, and laid off more than half of his 100-person staff.

Yet this this was just the groundwork. Like many markets in getaway destinations, Prescott was hit especially hard not. And just by dining-room restrictions, but by a sudden lack of travel as well.

Reeves arrived in Prescott in 2014. He spent 10 years navigating the Los Angeles nightlife scene, beginning as a barback before becoming one of the first employees of SBE Entertainment Group. He eventually took on a role as operations manager at 213 Hospitality, now called Pouring With Heart, which many credit as bringing the mixology movement to LA. He helped the company grow from seven venues to more than a dozen.

Reeves’ varied experience has come into play of late. He’s had to get creative to bolster takeout and invent outdoor dining models that require little interaction between staff and guests.

Today, he’s hired back 90 percent of his employee base, seen sales rise 5 percent, year-over-year at Taco Don’s (a drive-thru Mexican food join), and is working with the city on a beta-dining experience that would allow restaurants to use more outdoor space to offset indoor restrictions.

Some other wins:

Vivili restaurants came within 90 percent of its normal sales on Mother’s Day thanks to an assembly line operation.

Reeves restructured The Barley Hound, his signature restaurant, to double capacity by adding a “backyard” expansion to the Victorian-style home that houses the gastropub. The restaurant added an 1,800-squafe foot outdoor area.

Reeves reached out to Prescott’s tourism board in order to push a new idea and is now working with the city to debut a semi-permanent structure within the city-owned parking spaces in front of his Rosa’s Pizzeria. It will allow the restaurant to move the indoor capacity outdoors. Reeves said he could tack on about 30 percent of seating to the new patio.

Vivili Hospitality Group

Rosa's Pizzeria extension.

The Barley Hound added “bottle service” so tables could order large-batched cocktails, or even a bottle of vodka if the group is big enough, so they wouldn’t have to go back to the bar to re-order.

The company has given back, too, donating more than 600 meals to frontline healthcare workers.

And moving forward, Reeves wants to blend his indie philosophy with cues from large operators, like Starbucks, to reconfigure how guests order and receive food. He’s installed Plexiglas behind the bar where customers order, implemented new tech like online ordering and contactless payment, and is requiring all guests to wear masks until they sit at their table.

Reeves chatted with FSR about the changes, progress, and how he plans to keep fighting through crisis conditions.

Take us back to the early days of COVID, and the difficult decisions that followed, from consolidating your three Prescott-area restaurants to pausing the catering company and stopping construction on what would be the city’s largest venue. How quickly did you move on these calls, and what kind of discussions were you having that preceded them?

I moved very quickly. I realized restaurants were going to shut down on a Sunday. The following Monday morning, I called meetings with each of my general managers to talk next steps and to let them know where my head was at. This was also when I made the very tough decision to lay-off majority of my staff in order to consolidate costs. I usually lean on my other managers for day-to-day operations, but in this situation, I had to do a lot on my own.

Talk about the employee element. Like countless operators, you were forced to lay off a good chunk of your staff. At that point, what kind of steps did you take to stay connected and hopefully plant the seeds to recall workers later on?

In order to keep in touch, I wrote a letter that we distributed to our laid-off staff about what we were doing and how we were doing in. I wanted to let them know and be very transparent that things were uncertain and that I’d reach out to reinstate employment as soon as I could.

Fast-forward to today. You’ve rehired 90 percent of the employee base. What has that process been like? What are some ways you’ve been successful bringing people back?

Bringing employees back on board has been a slow and steady process. As we have more positions becoming available within our restaurants, we’re struggling to get people to even apply with the unemployment insurance being increased. So, we’ve had to get creative and offer new positions that entice people while also satisfying our needs within the restaurant. One example of this is our hostess. Outside of just seating guests, this person is now responsible for explaining what guests can and can’t do within the restaurants as it relates to them wearing masks and how our service is now structured. By doing this, it gives this person much more responsibility and allows for us to relay our message effectively to our guests.

I think the biggest tip I can give other restaurateurs is crawl before you walk. Start with limited hours, then gauge the demand. Especially right now, guests are pretty understanding and are willing to work with you.

What are some wins you’ve had in recent weeks? Taco Don’s being up 5 percent, for instance.

I think some of our biggest wins include being able to hire back 90 percent of our employee base, Taco Don’s, our primarily drive-thru Mexican food joint, being up 5 percent from this time last year at his, and currently having the support of the city as we get ready to debut a beta-dining experience that allows our restaurants to utilize more outdoor space to offset recent indoor dining restrictions in Arizona.

Elaborate on how you were able to come within 90 percent of normal sales on Mother’s Day despite lower beverage mix.

We offered great value. At the onset of the pandemic, we pivoted to offer a “Take and Bake” meal for six and dinner for two that was a hit on Mother’s Day. We also rolled out online ordering and touchless pick up quickly to make people feel better about the experience. I am also so proud of our staff during this time. Everyone was doing way more than what was asked of them. 10 hours bagging orders is no fun, but they knew the success of Rosa’s Pizzeria was important for their jobs.

Also dive deeper into The Barley Hound’s decision to double restaurant capacity with a “backyard” expansion. How did that come about?

We already had this in the works. But once it became clear that outdoor dining was going to be the trend to keep guests safe, within a couple weeks, we restructured our signature restaurant, The Barley Hound, to double the restaurant’s capacity by adding a “backyard” expansion to the Victorian’-style home that houses the gastropub. The restaurant is already known as the undisputed best patio in Prescott in the “front yard”, so we wanted to further stake this claim with the addition of 1,800 square foot outdoor area.

Talk about your work with the tourism board and how you’ve managed to move indoor capacity outdoors, and what this could mean for other restaurants.

Knowing that Prescott was in a tough situation with a lack of travelers, I proactively reached out to the tourism board in order to push a new idea across the board that would be mutually beneficial. As a result, we’re now working with the City of Prescott to debut a semi-permanent structure within the city-owned parking spaces in front of Rosa’s Pizzeria, one of the most beloved Italian restaurants in the city, that will allow us to move the indoor capacity outdoors. Complete with tables, umbrellas and large real trees and plants to encourage social distancing, the city is looking to take cues from us and eventually roll out similar models to better accommodate incoming tourists.

With the state’s new order to reduce capacity to less than 50 percent, we’re now able to add about 30 percent of seating to the new patio, bringing the restaurant near its original seat count, all while increasing the safety of dining by adding outdoor space.

To-go cocktails have provided a nice lifeline for a lot of restaurants. You implemented the idea of “bottle service” at The Barley Table so a group could order large-batch cocktails without going back to the bar to reorder. What’s the response been like so far? Do you see this as potentially being one of those post-COVID changes that sticks?

This is slowly catching on as we post about it on social media and people see other people ordering it. This is definitely something we’ll keep on the menu post-COVID.

How are you borrowing ideas from some big operators, like Starbucks, to reconfigure social distancing in your restaurants?

Major food and beverage chains like Starbucks and Chilis have massive teams and a corporate structure that enables them to gather information from a legal perspective and from more guests quickly in a situation like we’re in right now. Although they aren’t necessarily thought leaders in the industry, they do have the biggest support structure and the most eyes on them so they have to do things right the first time or it’s a big loss for them. These corporations also have stores around the world, so I find it’s best to pull from what they’ve gathered and steal what works for my restaurants.

Throughout this, the company has continued to give back to healthcare workers and first responders. How critical do you think it is for restaurants to stay connected to their communities during the crisis?

I think it’s so important for restaurants to stay connected with their communities, especially in a small town like Prescott. Everyone knows someone who’s a firefighter, a first responder or lost their job due to the pandemic. In times like this, everyone needs to rally together and support one another.

Broadly speaking, what would you say are going to be some of the lasting changes from COVID, or the so-called “new normal” people talk about? What trends would you put your money on?

These questions go hand-in-hand for me! As long as we’re able to do it, we’ll be carrying over to-go cocktails from restaurants and make-shift outdoor dining to extend the space of a patio.

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Categories: Restaurants

Independent Restaurants Aren’t Sure They’ll Make it to November

Restaurant Management - Thu, 08/06/2020 - 14:34
Independent Restaurants Aren’t Sure They’ll Make it to November danny Thu, 08/06/2020 - 14:34

In a new study, independent bars and restaurants had, on average, just 66 percent confidence they could stay operational through October. 

August 2020

Six months into COVID-19 and the outlook remains dark for independent restaurants. A new survey from the James Beard Foundation released Thursday, in collaboration with the Independent Restaurant Coalition, suggests only 66 percent of independent bars and restaurants believe they can stay survive through October.

In May, close to 75 percent of independent restaurants reported taking on new debt obligations north of $50,000. More alarming, 12 percent tagged the number at $500,000 and above.

The 50 percent seating capacity mandated in several states and localities won’t be enough to stave off mass closures, operators said. Rather, they need nearly 60 percent, on average, to keep the lights on.

“The restaurant industry is being hit by a multitude of forces,” Clare Reichenbach, CEO of the James Beard Foundation, said in a statement. “Inconsistent information about COVID-19 health and safety protocols and a lack of sufficient financial support are endangering the entire industry, but especially small, independent operators.”

The capacity question weighs heaviest. Reichenbach said independents, even when able to overcome financial burdens of reopening, from PPE investments to past-due rents, and other costly new protocols, are afraid they won’t see enough customers at their tables to support operations.

“On top of that, states have been reclosing restaurants and bars at the direction of the federal government, leaving unexpecting restaurateurs in a lurch,” Reichenbach added. “It’s no wonder that owner confidence is waning five months into this pandemic with no relief in sight.”

In May, despite 92 percent of respondents having received PPP loans, bar and restaurant owners expressed only 60 percent confidence they could outlast the crisis.

Nearly 40 percent indicated consumer fears about COVID-19 transmission among their top three concerns about reopening. Close to 36 percent chose unpredictable state guidelines for operating.

Also in May, 69 percent of restaurants named rent and payroll as their biggest, most immediate cash challenge. By July, 52 percent said relief for new PPE expenses, rent, mortgage, payroll, staff benefits, and vendors expenses, was their top priority.

Looking ahead, restaurants cited the health and safety of employees and customers as their No. 1 issue in July. Meanwhile, customer behavior continues to represent a growing concern—27 percent of respondents listed it among their top three worries.

Owners cited not wearing masks (82 percent), failure to social distance in common areas (71 percent), potential conflict over safety with customers (71 percent), and staff mistreatment (65 percent) as lead concerns with today’s restaurant guest.

“The results of this survey simply confirm what we’ve been fearing: the longer this pandemic goes on, the more of these cultural and economic bastions we are going to lose forever,” Andrew Zimmern, a founding member of the Independent Restaurant Coalition, said in a statement. “Someday, in the future, we are all going to be able to safely take off our masks and get together again. If Congress doesn’t act now, we will lose the very places where we would celebrate that day.”

More than four in five restaurants said they were looking for information on financial relief in order to reopen, and three in five said they needed additional funding for fixed costs and payroll to fully reopen and stay open.

The study polled 2,107 bar, nightlife, and restaurant owners from May 19–29 and July 14–28.

“It’s hard to be hopeful for an industry when you’re losing confidence,” added Nina Compton, IRC leadership team member and owner of Bywater American Bistro and Compère Lapin in New Orleans. “I am hopeful for this industry. But we’re barely holding on here—and hope alone doesn’t pay our bills. But knowing our restaurants will have the resources we need to stay closed until this pandemic ends is invaluable. It would reassure our workers and keep them paid. It would help us maintain business relationships with our suppliers. Congress needs to give us real hope by passing the RESTAURANTS Act.”

The Act Compton referenced calls for the establishment of a $120 billion grant program run by the U.S. Treasury that small restaurants, bars, food trucks, caterers, and other similar establishments can use to cover various operating costs, including payroll, rent, mortgages, supplies, and PPE. Grant amounts are determined by comparing revenue from 2019 to revenue in 2020, and funds do not need to be repaid. 

American Express, The Coca-Cola Company, Delta Air Lines, Hyatt Hotels, Resy, Sysco, and US Foods have expressed support.

The Act was originally introduced in June by Sens. Roger Wicker (R-MS) and Kyrsten Sinema (D-AZ), alongside Reps. Earl Blumenauer (D-OR 3) and Brian Fitzpatrick (R-PA 1), and now has over 165 cosponsors in Congress with more legislators expected to formally sign. Last week, the bill gained 33 more House cosponsors and five additional Senate cosponsors, including Sens. John Cornyn (R-TX) and Amy Klobuchar (D-MN) and Reps. Kendra Horn (D-OK 5) and Francis Rooney (R-FL 19). 

On Monday, the IRC released a new TV ad with support from Morgan Freeman and DoorDash calling on Congress to pass the Act. It’s airing in several markets across the country.

The James Beard study reflects other recent reports from the independent restaurant trenches. The NYC Hospitality Alliance August 3 released data from 500 owners of restaurants, bars, and nightlife establishments across the Big Apple. It found 83 percent of businesses could not pay full rent in July and 37 percent reported paying no rent at all.

The operators said 71 percent of landlords would not waive portions of rent due to COVID-19; 61 percent would not defer rent payments; and 90 percent would not formally renegotiate leases.

Indoor dining remains paused in NYC, with no timetable in sight. “Restaurants and nightlife venues are essential to the economic and social fabric of our city, but they are struggling to survive and absent immediate and sweeping relief so many will be forced to close permanently,” Andrew Rigie, executive director of the NYC Hospitality Alliance, said in a statement.

“While complying with the necessary pause, our industry has been uniquely and financially devastated,” he added. “Small businesses urgently need solutions from government leaders at the city, state, and federal level, inclusive of extending the moratorium on evictions, extending the suspension of personal liability guarantees in leases, pausing commercial rent taxes, providing landlords with needed support, and infusing small businesses with enough cash to weather the storm.”

The Alliance said outdoor dining is not generating sufficient revenue to cover rent and other expenses. Like the James Beard study, operators need more seats to justify suddenly higher costs. And this isn’t taking into account future weather concerns.

A breakdown:

In July, your business expects to pay how much of your rent?

  • None: 37.4 percent
  • Some: 36.6 percent
  • All: 17.1 percent
  • Not sure: 8.9 percent

From respondents paying some rent, what percentage does your business expect to pay?

  • Less than 50 percent: 29.8 percent
  • Half: 53 percent
  • More than 50 percent: 17.2 percent

Has your landlord waived any of your rent in relation to COVID-19?

  • No: 71.4 percent
  • Yes: 28.6 percent

If yes, what percentage?

  • Less than 50 percent: 26.6 percent
  • Half: 42.2 percent
  • More than 50 percent: 31.2 percent

Has your landlord deferred any of your rent in relation to COVID-19?

  • No: 61.1 percent
  • Yes; 38.9 percent

Have you renegotiated your lease in relation to COVID-19?

  • No: 62.1 percent
  • Yes: 10.2 percent
  • In good faith negotiations: 27.7 percent

In late July, Bloomberg reported on a new study from Allen & Associates that projected as many as 231,000 of the nation’s roughly 660,000 eateries could close this year. That’s about one in every three restaurants, and would bring the industry’s growth to a halt for the first time in two decades.

Rabobank estimated as many as 50,000 to 60,000 independent restaurant closures, or 15–20 percent of the entire field. Looking at the bigger picture, it would slice 8–10 percent of all restaurants in the next 12 months.

Yelp reported, as of July 10, there were 26,160 total restaurant shutterings since the arrival of COVID-19, an increase of 2,179 from June 15. Of those closed, 15,770 permanently shut down, or 60 percent.

Last week, the Department of Commerce said restaurants lost more than 34 percent of revenue in 2020’s second quarter.

But the challenge hasn’t been steady. It’s spiked and leveled off and spiked again, which is one critical pain point addressed by James Beard. The mixed messaging and closing-reopening-reclosing-reopening dynamic is where many operators are losing grip.

Since July 1, nearly 100,000 restaurant dining rooms have been shut down a second time by government mandates, according to The National Restaurant Association. The number of restaurants focused to close permanently continues to increase as well, with the industry on track to lose $240 billion in revenue this year and 8 million employees, per the Association.

More than one in 4 workers who have lost their jobs during the pandemic are from the restaurant industry, more than any other sector.

The IRC said neither the proposed HEALS Act or HEROES Act include direct aid for independent bars and restaurants. And there are other issues, too. Namely the HEALS Act wording that small businesses with fewer than 300 employees and that can demonstrate a 50 percent loss in quarterly gross receipts over the previous year to apply for a second PPP loan.

The Association said, at this threshold, more than half of operators (55 percent) would be left out. It also expressed concern that restaurants in recovery mode nationwide could soon be on the hook for thousands in unexpected tax bills.

Because of an Internal Revenue Service decision made weeks after restaurants started accepting PPP loans, normally deductible business expenses are no longer deductible if the business pays the expense with a PPP loan that is subsequently forgiven.

The Association said these tax liabilities are surprising and a “shock to thousands of restaurant operators.”

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Categories: Restaurants

Restaurants Continue to Evolve as Pandemic Stretches On

Restaurant Management - Thu, 08/06/2020 - 10:57
Restaurants Continue to Evolve as Pandemic Stretches On danny Thu, 08/06/2020 - 10:57

Some changes are temporary. Others are not.

August 2020

There has been a seismic shift across all industries in what we would once consider normal operating procedures. One of the most affected industries—hospitality—has been forced into an unimaginable position by the COVID-19 pandemic.

Time and necessity eventually lends way to innovation and change. From localization initiatives driven by technology, reskilling employees and complete transformations of current business models, the hospitality industry—especially restaurants—are finding ways to adapt and remain viable.

According to Statista, the year-over-year decline of seated diners in restaurants in the U.S. was a staggering 65.2 percent in the middle of June, while states struggled with re-opening among a rise in COVID-19 cases. The restaurant industry alone lost 5.5 million jobs in the month of April. This massive loss caused many businesses to shutter, while others looked to adapt their business models in order to keep their doors open.

While some of these changes are certainly temporary, others might speak to a total shift in how these businesses will operate in the future.

Conversion to a Grocery Store Model

One constant during the pandemic is the status of grocery stores. People still need to eat, deeming this sector essential without hesitation. This wasn't without its own issues. From supply chain lags to panic buying and long lines at grocery stores, there was an opportunity here for restaurants to step in and provide an additional service to customers. Since restaurants already have a readily available supply chain to source ingredients for their menu, this became a quick and easy pivot for restaurants to make at the onset of the pandemic.

Restaurants can easily source local ingredients and produce and offer them to customers at bulk or wholesale pricing. For instance, Panera expanded into grocery services (outside of bagels by the dozen), offering milk, eggs and fresh produce. Even Subway started selling groceries at many of its west coast locations. Frisch’s Big converted some of its locations to grocery and leveraged its online ordering to include groceries and drive-thru pick up.

Some restaurants were even able to offer specialized ingredients outside of regular groceries, including spices and other delicacies that were originally sourced by the Chef for food preparation, providing consumers with access to hard-to-reach items.

Offering Meal Kits

The Los Angeles County Department of Public Health came up with specific guidelines to enable L.A. restaurants to transform dining rooms into ad-hoc corner markets while maintaining health guidelines and safety. Coupa-Cafe, (a well-known hub for tech leaders with locations across California) completely shifted its model from cafe to restaurant-market, offering produce, herbs, coffee, dairy, as well as general household supplies (toilet paper, etc.) meal kits and meal delivery partnerships with services such as DoorDash.

Many other restaurants adapted the meal kit model. While still being forced to trim staff, restaurants pivoted to a 100 percent to-go model while adding the DIY appeal of meal kits. The advantage here is that customers could buy completely ready-to-prepare kits that can be stored in the refrigerator until needed. This leads to larger orders with a longer shelf life. Even juice bars such as Nékter started to offer smoothie kits with pre-proportioned servings.

Switching to an Off-Premises Model

Since customers still want to purchase food from restaurants, many (including fine dining establishments) have pivoted to take out and curbside pick-up. Many chains that already offered their own delivery partnered with services like DoorDash and Grubhub in order to expand their service area.

Companies like Wingstop found themselves well-prepared for this pivot. In recent years, it invested heavily in improving its mobile ordering infrastructure to support a total off-site offering. Olive Garden also quickly pivoted and has stated that off-premises servicing would continue to be a central building block of its growth strategy going forward. Focusing on on-premise to off-premises through delivery makes catering and pick-up a viable model for restaurants in the future.

Naturally, this takes work and time. Not all restaurants are prepared for this pivot, but it can be achieved. According to a National Retail News Analysis of recently released same-store sales results, restaurants that have fared the best thus far already had a few structural pieces in place before the pandemic: drive-thrus, core menu items suitable for delivery, and a strong digital infrastructure. While it's not tenable to build a drive-thru, quickly building a customer-friendly digital interface and rebuilding a menu can be a relatively light lift.

Altering the Menu

On that last point, and to put a cap on current restaurant industry innovations, restaurants are making menu alterations to make the move to an off-premises business model easier. Darden, one the larger operating chains (Darden properties include The Capital Grille, Yard House and Bahama Breeze, to name a few) has optimized its menu for both on-premise (under local restrictions) and off-premises servicing. This is to keep staffing and supply costs at reasonably sound operating numbers.

Whether through training employees to suddenly become delivery drivers, focusing on building a digital interface to support delivery, pivoting to grocery or stepping up the off-premises offering, restaurants are finding a way to survive this pandemic and adapt their business models for future success. Most of these innovations are moderately simple and fairly cheap to implement in order to keep businesses running in the green. After all, we need to eat and supporting local business is a great win-win. 

Praveen Kanyadi is co-founder & VP Products at Groupe.io. Praveen has over 20 years of experience developing enterprise and consumer products for startups and Fortune 500 companies. In his previous role at Yahoo, he built social experiences that reached over 750 million end users. Praveen also holds a patent publication in the social space. Praveen has deep expertise in building SaaS and mobile based solutions.

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Categories: Restaurants

Parent of Il Mulino Files for Bankruptcy

Restaurant Management - Wed, 08/05/2020 - 16:50
Parent of Il Mulino Files for Bankruptcy danny Wed, 08/05/2020 - 16:50

Restaurant claims that one lender is attempting a takeover. 

August 2020

K.G. IM LLC, parent of well-known Italian concept Il Mulino, filed bankruptcy for several of its restaurants July 30 as it battles one of its lenders.

The 16-unit company filed on behalf of seven locations across Miami, Puerto Rico, Las Vegas, Long Island, and Atlantic City. The locations not included in the filing are five New York City stores—the flagship in Greenwich Village and four locations in Manhattan—and two in Florida, one in Tennessee, and another in the Poconos.

In the filing, co-owner Gerald Katzoff said that when COVID hit the U.S., Il Mulino locations across the country shut down, beginning with the stay-at-home order in New York. On May 7, the company received roughly $2.3 million from the Paycheck Protection Program. The restaurant intends to use the loan to fund operations during bankruptcy. As of now, six of the seven bankrupt locations are closed, and Long Island and Miami are operating in a limited capacity.

Katzoff said that thanks to the PPP funds, he believed the restaurant was on its way to stabilizing operations, protecting the Il Mulino brand, and managing through COVID. He also felt it would allow the brand to find a path forward with satisfying $36.3 million owed to lender Benefit Street Partners. But Katzoff added that after the restaurant secured the PPP funding, “it became clear that BSP had other plans for the restaurants.”

The co-owner claimed that almost immediately after Il Mulino received the PPP funds, BSP began to implement plans to take over the company, including “putting in place a path for BSP to wipe out all stakeholders in a debt to equity conversion play” without giving the brand an opportunity to “stabilize operations and run a fair and transparent process toward finding an exit out of the COVID-19 lockdown.”

“Simply put, it was clear that BSP viewed the COVID-19 impact as a chance to unfairly leverage the Debtors and seize control of the restaurants in a manner that is not consistent with the rights afforded the parties under the Term Loan Agreement or applicable law,” Katzoff said in the filing.

As an example, Katzoff pointed to June 2—before the maturity of the Term Loan Agreement—when BSP alleged certain events of default and said it had voting control over the restaurant. In  response, Il Mulino “made it crystal clear” that BSP did not have that power. However, BSP did not relent, and negotiations failed. So the restaurant filed bankruptcy to “curtail those efforts and to further explore various restructuring alternatives.”

“The Il Mulino restaurants that are the subject of these chapter 11 cases are part of an iconic brand with significant growth potential,” Katzoff said. “BSP, however, has attempted to exploit the unavoidable consequences of the Covid-19 pandemic and its impact on restaurants like Il Mulino in an effort to take control of the Debtors and their assets at a point in time when the Debtors’ businesses have been stressed to an unprecedented extent. That, of course, is grossly unfair.”

Katzoff said the company intends to resume operations at closed locations as soon as possible and return to profitability. The restaurant will use the bankruptcy proceedings “to restructure its debt, seek out new financing opportunities, explore potential transactions, and liquidate claims.”

Il Mulino was established in 1981 and serves authentic Abruzzo regional cuisine. The restaurant has gained fame with celebrities over the years, including Leonardo DiCaprio, George Clooney, Bill Murray, President Obama, and Drake.

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Categories: Restaurants

Amid COVID, Restaurants Shake Up the Meal Kit Game

Restaurant Management - Wed, 08/05/2020 - 03:47
Amid COVID, Restaurants Shake Up the Meal Kit Game erica Wed, 08/05/2020 - 03:47

Operators are putting a fresh spin on the category, distinguishing themselves from the likes of Blue Apron.

August 2020

Over the past decade, meal kits have taken the market by storm. Early options like Blue Apron and HelloFresh were soon followed by niche brands specializing in everything from vegan and paleo diets to organic and inexpensive ingredients. Given consumers’ expanding palates and growing culinary curiosity, it would be fair to assume that restaurants could easily integrate take-home kits into their business model. But while some operators dabbled in meal kits, the trend never really crossed the retail-restaurant divide.

Then the pandemic hit, bringing an incentive to rethink the potential of meal kits—with a restaurant-specific twist.

When dine-in bans swept the greater Chicago area in March, Northbrook restaurant Prairie Grass Cafe offered curbside pickup for group meals, as well as a la carte dishes. It also opened the door to add a new component, namely meal kits.

“I felt that I could do a good job prepping [ingredients] like I would for myself if I was going to have a dinner party or cook for my family,” says chef and co-owner Sarah Stegner. “So, yes, you’re doing some of the work, but at the same time, we’re helping.”

For Prairie Grass Cafe, meal kits were best suited for weekends when customers were likely to grill out or cook something more elaborate than the usual weekday fare. Its very first kit debuted in time for Mother’s Day—traditionally the most lucrative business day for restaurants. Priced at $58–$98 for two, the grill-centric meal kit featured a choice of Canadian salmon with pecan-lemon topping, ancho-marinated skirt steaks, or Prime New York Strip Steaks along with sides and dessert. Guests also had the option of adding salads and wine.

The meal kit menus have evolved since then but instead of sticking to a set rotation, Stegner lets the seasons and local bounty inform the dishes. As an independent operator, Stegner also feels it is her duty to support the local farms that are integral to Prairie Grass Cafe and the greater community.

“We’ll do it not so much based on the week but rather what comes into season locally—that will be the driving factor of those meals. We’re going to try to offer as much local produce as possible,” Stegner says. “It’s important for chefs to highlight those local farmers, because without the restaurants driving their sales, many are cut off from farmers markets and direct-to-public [markets]. … We don’t want them to lose their farms; we want them to have access to revenue.”

While Prairie Grass Cafe had 15 years of experience and reputation to fall back on, the stakes were higher for Elvie’s, the first concept from Union Square Hospitality Group alum and chef Hunter Evans. Bringing a European-meets-Southern dining experience to Jackson, Mississippi, Elvie’s opened a mere six weeks before the pandemic struck, just when the team was getting into a groove.

Rather than shutting down, Evans and his business partner, Cody McCain, took an unconventional, multi-pronged approach to off-premises. The brick-and-mortar space transformed into a sandwich shop; Elvie’s started a virtual wine club and paired it with to-go charcuterie boxes for a more interactive experience (read more about virtual wine programs on page 22); the team also introduced “pop-up” menus that explored a different region or culture. Although these dishes were already prepared, they did include a DIY, at-home element.

“We would cook it all and break it down into components, give [guests] the box, and then they could go home and plate it and eat and enjoy it. And we did that through social media. We filmed a little video of us taking it out of the box and plating it how we would do it here and serve it to them,” Evans says. “I think people really enjoy that. It’s not like taking on the cooking yourself, but there was an interactive element to it.”

Independents weren’t the only restaurants to try their hand at meal kits during the dine-in bans. But scaling such a service came with its own unique set of challenges. Mexican chain Abuelo’s had considered meal kits, but securing the necessary supplies for its entire system was too difficult. Instead it doubled down on already prepared Family Feasts, and, like Elvie’s, took to social media as a way to connect with its customers. Abuelo’s shared recipes for some of its most iconic menu items—El Jefe Margarita, Avocado Cream, Espinica (spinach casserole)—and included step-by-step tutorials so customers could make the dishes at home.

“We have been very lucky to have a large group of our customer base support us during this time. Most are excited for things to go back to normal; however, they have shown they are still with us through takeout and delivery options and interactions on social media,” says Brian Bell, vice president of marketing for Abuelo’s. “Those recipes are a fun way of engaging with loyal guests who are attached to our cuisine, as well as those who love to cook at home.”

Take-and-bake pizza is hardly new, but typically such offerings have been limited to quick-service brands like Papa Murphy’s and require no prep work beyond heating up the oven. California Pizza Kitchen challenged this paradigm at the end of March when it introduced CPK Market, which, in addition to pantry goods, offered meal kits like the Kids Build-Your-Own Pizza, Taco Kit, and Lettuce Wrap Kit. Each came with all the ingredients and a step-by-step recipe card created by CPK chefs.

“CPK’s at-home meal kit options also give those in quarantine an opportunity to cook together, on their own time,” says senior vice president  of marketing Ashley Ceraolo.

Although many restaurants are welcoming guests back into their dining rooms, it seems unlikely that the operators who have found success in meal kits will discontinue the service. “If our meal kits continue to garner this level of success—which is looking to be the case—we’d certainly be open to keeping these as an option for our guests in the future,” Ceraolo says.

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Categories: Restaurants

The 29 Biggest Full-Service Restaurants in the U.S.

Restaurant Management - Tue, 08/04/2020 - 12:20
The 29 Biggest Full-Service Restaurants in the U.S. ben Tue, 08/04/2020 - 12:20 1 of 30IHOPPlate of eggs, toast, and bacon from IHOPCasual dining in an evolving industry

With the onset of COVID and the subsequent closure of dining rooms, full-service chains were forced to adapt—and quickly. Brands across the industry pivoted operations to simplify menus, reduce labor costs, implement online ordering platforms, curbside, and delivery, roll out family meal deals, and much more. 

The FSR 50 dives into the performance of the biggest casual-dining chains in the U.S. prior to COVID, including changes in sales, AUV, and unit count.

The list provides a look at restaurants that were set up well entering the pandemic and also those that were already weathering a storm. 

Note:The unit counts are by U.S. restaurants as of 2019 year end. 

 

2 of 30Thomas Hawk/FlickrPhoto of a Waffle House sign1. Waffle House

Unit Count: 1,900

Total change in units from 2018: –10

U.S. systemwide sales (millions): $1,500 

Average sales per unit (thousands): $787

Read more in the FSR 50 here. 

3 of 30IHOPStack of pancakes at IHOP.2. IHOP

Unit Count: 1,700

Total change in units from 2018: 5

U.S. systemwide sales (millions): $3,300

Average sales per unit (thousands): $1,933

Read more in the FSR 50 here. 

4 of 30Applebee'sApplebee’s Classic Bacon Cheeseburger3. Applebee's

Unit Count: 1,665

Total change in units from 2018: –38

U.S. systemwide sales (millions): $4,085

Average sales per unit (thousands): $2,433

Read more in the FSR 50 here. 

5 of 30Denny'sDenny's platter of food.4. Denny's

Unit Count: 1,559

Total change in units from 2018: –19

U.S. systemwide sales (millions): $2,710

Average sales per unit (thousands): $1,728

Read more in the FSR 50 here. 

6 of 30Chili'sChili's burgers in a lineup.5. Chili's

Unit Count: 1,240

Total change in units from 2018: –10

U.S. systemwide sales (millions): $3,550

Average sales per unit (thousands): $2,851

Read more in the FSR 50 here. 

7 of 30Buffalo Wild WingsBuffalo Wild Wings chicken wings in a plastic baseball cap.6. Buffalo Wild Wings

Unit Count: 1,215

Total change in units from 2018: 7

U.S. systemwide sales (millions): $3,700

Average sales per unit (thousands): $3,054

Read more in the FSR 50 here. 

8 of 30Olive GardenOlive Garden's Lasagna Mia.7. Olive Garden

Unit Count: 867

Total change in units from 2018: 9

U.S. systemwide sales (millions): $4,351

Average sales per unit (thousands): $5,045

Read more in the FSR 50 here. 

9 of 30Outback SteakhouseOutback Steakhouse8. Outback Steakhouse

Unit Count: 725

Total change in units from 2018: –8

U.S. systemwide sales (millions): $2,630

Average sales per unit (thousands): $3,608

Read more in the FSR 50 here. 

10 of 30Red LobsterRed Lobster shrimp fest platter.9. Red Lobster

Unit Count: 670

Total change in units from 2018: –5

U.S. systemwide sales (millions): $2,350

Average sales per unit (thousands): $3,494

Read more in the FSR 50 here. 

11 of 30Cracker Barrel10. Cracker Barrel

Unit Count: 662

Total change in units from 2018: 7

U.S. systemwide sales (millions): $2,525

Average sales per unit (thousands): $3,834

Read more in the FSR 50 here. 

12 of 30Red RobinRed Robin introduces the Bacon Curry Burger, Zen Chicken burger and Sparkling Berry Twist to its menu for a limited-time.11. Red Robin

Unit Count: 561

Total change in units from 2018: 7

U.S. systemwide sales (millions): $1,675

Average sales per unit (thousands): $3,004

Read more in the FSR 50 here. 

13 of 30Texas RoadhouseThe exterior of a Texas Roadhouse restaurant.12. Texas Roadhouse

Unit Count: 544

Total change in units from 2018: 11

U.S. systemwide sales (millions): $2,886

Average sales per unit (thousands): $5,359

Read more in the FSR 50 here. 

14 of 30LongHorn Steakhouse13. LongHorn Steakhouse

Unit Count: 518

Total change in units from 2018: 8

U.S. systemwide sales (millions): $1,864

Average sales per unit (thousands): $3,626

Read more in the FSR 50 here. 

15 of 30Golden CorralThe exterior of a Golden Corral restaurant.14. Golden Corral

Unit Count: 475

Total change in units from 2018: –14

U.S. systemwide sales (millions): $1,635

Average sales per unit (thousands): $3,392

Read more in the FSR 50 here. 

16 of 30Bob EvansBob Evans' dinner plates.15. Bob Evans

Unit Count: 460

Total change in units from 2018: –20

U.S. systemwide sales (millions): $810

Average sales per unit (thousands): $1,723

Read more in the FSR 50 here. 

17 of 30Ruby TuesdayFajitas at Ruby Tuesday.16. Ruby Tuesday

Unit Count: 450

Total change in units from 2018: –40

U.S. systemwide sales (millions): $660

Average sales per unit (thousands): $1,404

Read more in the FSR 50 here. 

18 of 30TGI FridaysTwo skewers of three large jumbo shrimp, wrapped in hardwood smoked bacon and brushed with a parmesan butter sauce.17. TGI Fridays

Unit Count: 388

Total change in units from 2018: –30

U.S. systemwide sales (millions): $1,120

Average sales per unit (thousands): $2,779

Read more in the FSR 50 here. 

19 of 30First WatchFirst Watch exterior of restaurant.18. First Watch

Unit Count: 365

Total change in units from 2018: 71

U.S. systemwide sales (millions): $500

Average sales per unit (thousands): $1,517

Read more in the FSR 50 here. 

20 of 30HootersPlate of buffalo chicken wings from Hooters.19. Hooters

Unit Count: 344

Total change in units from 2018: 3

U.S. systemwide sales (millions): $900

Average sales per unit (thousands): $2,628

Read more in the FSR 50 here. 

21 of 30Perkins Restaurant & Bakery20. Perkins

Unit Count: 306

Total change in units from 2018: –66

U.S. systemwide sales (millions): $600

Average sales per unit (thousands): $1,770

Read more in the FSR 50 here. 

22 of 30Carrabba's Italian GrillCarrabba's Italian Grill21. Carrabba's Italian Grill

Unit Count: 225

Total change in units from 2018: –2

U.S. systemwide sales (millions): $645

Average sales per unit (thousands): $2,854

Read more in the FSR 50 here. 

22. P.F. Chang's

Unit Count: 216

Total change in units from 2018: 1

U.S. systemwide sales (millions): $890

Average sales per unit (thousands): $4,130

Read more in the FSR 50 here. 

24 of 30BJ’s Restaurant & BrewhouseStrawberry Shortcake Pizookie23. BJ's Restaurants

Unit Count: 208

Total change in units from 2018: 6

U.S. systemwide sales (millions): $1,150

Average sales per unit (thousands): $5,610

Read more in the FSR 50 here. 

25 of 30The Cheesecake FactoryOreo slice from The Cheesecake Factory.24. The Cheesecake Factory

Unit Count: 204

Total change in units from 2018: 3

U.S. systemwide sales (millions): $2,180

Average sales per unit (thousands): $10,765

Read more in the FSR 50 here. 

26 of 30California Pizza KitchenCalifornia Pizza Kitchen's Take and Bake Mushroom Pepperoni Sausage pizza.25. California Pizza Kitchen

Unit Count: 200

Total change in units from 2018: –5

U.S. systemwide sales (millions): $635

Average sales per unit (thousands): $3,136

Read more in the FSR 50 here. 

26. Logan's Roadhouse

Unit Count: 199

Total change in units from 2018: –1

U.S. systemwide sales (millions): $515

Average sales per unit (thousands): $2,581

Read more in the FSR 50 here. 

28 of 30Bonefish GrillBonefish Grill Lobster and Shrimp Roll.27. Bonefish Grill

Unit Count: 197

Total change in units from 2018: 0

U.S. systemwide sales (millions): $585

Average sales per unit (thousands): $2,970

Read more in the FSR 50 here. 

29 of 30Village InnVillage Inn28. Village Inn

Unit Count: 185

Total change in units from 2018: –35

U.S. systemwide sales (millions): $330

Average sales per unit (thousands): $1,671

Read more in the FSR 50 here. 

30 of 30O'Charley'sPrime Rib served up at O'Charley's.29. O'Charley's

Unit Count: 175

Total change in units from 2018: –30

U.S. systemwide sales (millions): $430

Average sales per unit (thousands): $2,263

Read more in the FSR 50 here. 

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Categories: Restaurants

Texas Roadhouse Reimagines Life in a COVID World

Restaurant Management - Tue, 08/04/2020 - 11:36
Texas Roadhouse Reimagines Life in a COVID World danny Tue, 08/04/2020 - 11:36

With to-go sales on the rise, maybe for good, the steakhouse chain is considering changes to its building prototype. 

August 2020

These have been strange times for restaurants, and Texas Roadhouse is no exception. To understand some part of how extraordinary it’s been, consider what’s unfolded: Like most chains, Texas Roadhouse was forced to transition nearly 600 stores to a to-go-only setup in March. But come May and June, the majority of those same locations pivoted once again.

It’s a dilemma unique to restaurants in a lot of respects. Reopening is often not a revert back to business as it used to be—it’s a reimagining.

And for Texas Roadhouse, which took six weeks to install partitions in restaurants, the result is a hybrid that was nowhere near its radar pre-pandemic. One that could change again soon.  

Financially, here’s a look at how disruptive COVID-19 has been. In the week ending March 3, Texas Roadhouse units averaged weekly sales of $118,512. Of that, only $9,115 was coming outside the four walls. By March 24, those numbers were $29,432 and $25,938, respectively. And then came the shift.

Within just a week, Texas Roadhouse jolted to-go sales to $41,892, a number that would rise into the high $50,000, low $60,000 range in late April.

Here’s are more recent trends, in the hybrid model world.

All restaurants

April

  • Same-store sales: –46.7 percent
  • Average weekly sales: $54,937
  • Number of restaurants: 518

May

  • Same-store sales: –41.9 percent
  • Average weekly sales: $62,343
  • Number of restaurants: 519

June

  • Same-store sales: –14.1 percent
  • Average weekly sales: $88,874
  • Number of restaurants: 521

Q2

  • Same-store sales: –32.8 percent
  • Average weekly sales: $70,281
  • Number of restaurants: 521

Limited capacity restaurants (this includes dining rooms reopened at limited capacity and excludes spots operating as to-go or outdoor dining only)

May

  • Same-store sales: –28 percent
  • Average weekly sales: $80,235
  • To-go sales as a percentage of average weekly sales: 41.9 percent
  • Number of restaurants: 340

June

  • Same-store sales: –8.2 percent
  • Average weekly sales: $96,623
  • To-go sales as a percentage of average weekly sales: 25.9 percent
  • Number of restaurants: 499

Q2

  • Same-store sales: –13.7 percent
  • Average weekly sales: $92,227
  • To-go sales as a percentage of average weekly sales: 29.7 percent
  • Number of restaurants: 499

As of the end of July, more than 95 percent of Texas Roadhouse’s company restaurants had dining rooms running at some level.

Which bring us to more recent results:

All restaurants

Week ended July 7

  • Same-store sales: –16.9 percent
  • Average weekly sales: $79,630
  • Number of restaurants: 523

Week ended July 14

  • Same-store sales: –12.3 percent
  • Average weekly sales: $86,704
  • Number of restaurants: 523

Week ended July 21

  • Same-store sales: –13.1 percent
  • Average weekly sales: $87,835
  • Number of restaurants: 523

Week ended July 28

  • Same-store sales: –9.9 percent
  • Average weekly sales: $90,080
  • Number of restaurants: 523

July

  • Same-store sales: –13 percent
  • Average weekly sales: $86,062
  • Number of restaurants: 523

Limited capacity restaurants

Week ended July 7

  • Same-store sales: –14.9 percent
  • Average weekly sales: $81,725
  • To-go sales as a percentage of average weekly sales: 25.4 percent
  • Number of restaurants: 497

Week ended July 14

  • Same-store sales: –10.2 percent
  • Average weekly sales: $89,063
  • To-go sales as a percentage of average weekly sales: 25.3 percent
  • Number of restaurants: 490

Week ended July 21

  • Same-store sales: –11.4 percent
  • Average weekly sales: $89,377
  • To-go sales as a percentage of average weekly sales: 25.7 percent
  • Number of restaurants: 497

Week ended July 28

  • Same-store sales: –8.4 percent
  • Average weekly sales: $91,364
  • To-go sales as a percentage of average weekly sales: 25 percent
  • Number of restaurants: 499

July

  • Same-store sales: –11.2 percent
  • Average weekly sales: $87,882
  • To-go sales as a percentage of average weekly sales: 25.3 percent
  • Number of restaurants: 499

So, if we take the first real pandemic-stricken week and compare it with the most recent, Texas Roadhouse lifted average weekly sales $60,650 while maintaining to-go mix of roughly 26 percent. Figures climbed from $55,000 in April to nearly $89,000 in June.

These unthought-of dynamics are leading the brand to rethink design, Taylor said. In recent weeks, Texas Roadhouse has worked on potential changes to its building prototype intended to further enhanced its ability to handle higher to-go volume. And this isn’t a restaurant chain that takes remodeling lightly. Outside of some past kitchen upgrades and a bar fix to open the concept and allow sightlines, the Texas Roadhouse on display today is a near replica of the one George Lask helped develop in 1996.

Taylor said potential upgrades are being born out of managing partner innovation (Texas Roadhouse owners have stakes in locations). Operators have found ways, he said, to capitalize on off-premises by taking either all or part of waiting rooms and putting doors on them. Or a sticking a sliding window on them, with curbside walk-up to the window, 6 feet away from the next.

Essentially, Taylor said, it’s taking waiting rooms and, in cases with an outdoor overhang (where Texas Roadhouse had some outdoor waiting space before) pushing the wall out. This way, there’s additional space for restaurants to execute to-go curbside. The other part is in prior waiting rooms, Texas Roadhouse can now store to-go supplies. And it’s also concepting the idea of putting a bar and door that goes toward the lobby where a door can slide and transform the space into on-deck seating, or a waiting space for people who need it, like older guests. “We'll have that ability for that room to pivot depending on what's going on at that time,” Taylor said.

It’s a push for flexibility and embracing “shoulder-to-shoulder” opportunities, CFO Tonya Robinson added. Meaning operators are doing everything they can to cover depressed traffic by opening earlier, getting creative, and expanding outdoor dining.

Overall, the to-go heavy game carries a much different feel for Texas Roadhouse, as its found out in recent weeks. Cost of sales as a percentage of total business increased to 34.7 percent in Q2. The line was negatively impacted earlier in the period by higher off-premises mix. These transactions typically don’t carry the benefit of a higher-margin beverage attachment, Robinson said, especially soft drinks.

THE COVID-19 ROAD FOR TEXAS ROADHOUSE SO FAR:

Texas Roadhouse’s To-Go Sales are Up 575 Percent (Q1 recap)

Texas Roadhouse’s Executive Team Donates Salaries to Hourly Employees

Texas Roadhouse CEO Gives Up Salary to Help Front-Line Employees

Texas Roadhouse has witnessed about a $4 difference on per-person averages from dine-in and to-go guests (to-go being the lower side). Typically, there are less hours and labor cost, but the chain is paying higher wages since it’s a minimum-wage position versus a tipped-wage one inside the restaurant. “So really, the labor—you don't really get any benefit on the labor side as it stands,” Robinson said.

To-go customers skew away from bigger steaks, too. There are fewer combo and appetizer occurrences.

Taylor said added to-go business is stemming mostly from existing guests accessing the brand in new ways. Although, “I think,” he said, “absolutely, we’ve made a lot of new friends.”

“I’ve gotten some letters, interestingly enough, specifically more in the March-April time-frame from people that had not been regular guests of ours,” Taylor added. “That said, they really appreciate everything we've done and how safe we've made it and they are not going back to whatever restaurant they might have mentioned before, but they're going to stay with us.”

Labor as a percentage of total sales increased to 41.1 percent in Q2 as labor dollars per store week declined 17.3 percent year-over-year, including a decline in hours of 26.3 percent, partially offset by 9 percent of wage and other inflation (the to-go non-tipped difference coming into play). Texas Roadhouse also spent $4.7 million in the quarter on relief payments in sick pay for employees, as well as other front-line benefits.

Robinson said to-go volume has held steady regardless of capacity, whether it’s near full or at 25 percent. “We don't see any fall-off from that with a higher capacity restaurant. So I think we can continue with all the things we're doing from a to-go perspective,” she said. “That focus we have, I think we can continue to build those sales along with the dining room.”

Even in 100 percent capacity markets, Texas Roadhouse is still losing seats to socially distant needs, which could be a lasting change, at least for some time. In those cases, the brand doesn’t have all of its bar seats and, generally, fewer tables. This is where outdoor dining has helped, yet remains volatile based on weather. Truthfully, Taylor said, 100 percent is more like 80–85 percent these days for restaurant chains.

Today, 332 Texas Roadhouses fall into the 50 percent capacity bucket. About 115 are in that 100 percent range, with 68 operating at 25 percent, and 27 at 75 percent.

With partitions, the biggest takeaway, Taylor said, has been positive comments from guests. Cities and states vary on regulation and need. And, notably, they will be part of new-builds, which are coming back into the fold after a COVID-19 pause.

The brand opened two Texas Roadhouses in Q2 and one Bubba’s 33. Additionally, two steakhouses debuted in July and four are planned for this quarter. Taylor said Texas Roadhouse is moving forward with construction on eight additional sites that could open before the end of the year, including one Jaggers—the chain’s two-unit fast casual.

Taylor said it was too early to outline development for next year, but Texas Roadhouse expects to continue opening new restaurants.

Texas Roadhouse reported a quarterly loss of 48 cents per share in Q2 compared to earnings of 63 cents in the year-ago period. It posted revenues of $476.43 million versus $689.93 million.

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Categories: Restaurants

Thompson Hospitality to Buy Matchbox Out of Bankruptcy

Restaurant Management - Tue, 08/04/2020 - 09:10
Thompson Hospitality to Buy Matchbox Out of Bankruptcy danny Tue, 08/04/2020 - 09:10

Thompson has managed the company for the past two years. 

August 2020

Thompson Hospitality, which invested $11 million in Matchbox Food Group two years ago, agreed to buy the brand out of bankruptcy for $14 million. 

The 12-unit Matchbox, with locations in Washington, D.C., Virginia, Texas, Maryland, and Florida, declared bankruptcy in Maryland on Monday. According to the filing, the brand has between $0 and $50,000 in assets and between $50 million and $100 million in debt. The asset purchase agreement with Matchbox is contingent on the court’s approval. 

The Virginia-based Thompson Hospitality, which has overseen operations at Matchbox since 2018 and owns 51 percent of the brand, also runs American Tap Room, Austin Grill, Big Buns Damn Good Burgers, the Delegate, Hen Quarter, The Rub Chicken & Beer, and Yot Bar & Kitchen. 

“For the last two years, Thompson Hospitality has joined forces with Matchbox to manage our restaurants and develop new ones,” said board member Edwin Sheridan IV in a statement. “They are now proposing to take a larger role, proposing a purchase of the chain, subject to court approval. The Matchbox brand now has a clear path forward that enables us to be flexible in any environment. We are confident that we will emerge stronger.”

The bankruptcy comes after a string of troubling years for Matchbox. Five years ago, the chain was reportedly preparing for expansion, but financial issues arose when new restaurants went over budget and opened late, according to the Washingtonian. That led to a legal battle brought on by founders Ty and Mark Neal, who claimed Ron Paul, CEO of investor EagleBank, conspired to oust them from the company. Then in 2017, Matchbox sold its five-unit Ted’s Bulletin to Steve Salis, co-founder of &pizza. 

Matchbox first opened in July 2003, and soon became recognized as Washington D.C.’s “best New Restaurant” by the Restaurant Association of Metropolitan Washington. 

Sheridan said the brand is working with landlords to keep restaurants open. He added that if negotiations fail, then locations will be forced to close. 

“Restructuring will allow us to right-size our balance sheet and position the business for growth going forward,” Sheridan said. “The impact of COVID-19 pandemic on the restaurant industry has been swift and damaging. The Chapter 11 process will enable us to emerge as a stronger company, and to continue to serve as good partners with our team members, vendors, landlords and our loyal guests.”

Matchbox is the latest restaurant to be bought out of bankruptcy. 

Portland-based investment firm Sortis Holdings announced last week that it acquired Bamboo Sushi parent Sustainable Restaurant Group. FoodFirst Global, owner of Brio Tuscan Grille and Bravo Cucina Italiana, agreed to a $30 million deal with Earl Enterprises, and Aurify Brands said it plans to reopen more than 40 Le Pain Quotidien units after agreeing to purchase the brand out of bankruptcy for $3 million.  

Fortress Investment Group purchased Logan’s Roadhouse parent Craftworks Holdings for $93 million and bought Southern fast-food chain Krystal for nearly $50 million

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Categories: Restaurants

There’s a Serious Problem Brewing with the Second Stimulus Act

Restaurant Management - Tue, 08/04/2020 - 08:10
There’s a Serious Problem Brewing with the Second Stimulus Act danny Tue, 08/04/2020 - 08:10

Two main concerns are surfacing as talks continue.

August 2020

While a potential second stimulus package remains in flux, there is concern brewing for restaurants. One of the main levers for operators is another round of the Paycheck Protection Program. The Senate HEALS Act—in current form—allows small businesses with fewer than 300 employees and that can demonstrate a 50 percent loss in quarterly gross receipts over the previous year to apply for a second loan.

Yet the cutoff is alarming, the National Restaurant Association said Monday. At that threshold level, more than half of operators (55 percent) would be left in the loan dark. And during a critical reopening-reclosing-reopening stage where thousands of restaurants are already fighting from the brink.

In a letter to Congress Monday, the Association appealed for a 20 percent threshold, which would make 430,000 restaurant owners eligible for a much-needed second jolt of PPP aid.

Doing so would ensure restaurants with a low gross revenue loss, but still facing bankruptcy, would be eligible.

“The PPP got thousands of restaurants through the spring shutdown, but most are now open under strict business limitations and every month are wrestling with their bottom line,” Sean Kennedy, executive vice president for Public Affairs at the Association, said in a statement. “A second round of PPP will make or break these restaurants, so we encourage a bipartisan agreement to lower the qualifying threshold so that more of the struggling restaurants in our communities can have a fighting chance.”

There’s an additional hurdle ahead, too. The Association warned Congress that without action, restaurants nationwide will soon be on the hook for thousands in unexpected tax bills. Because of an Internal Revenue Service decision made weeks after restaurants started accepting PPP loans, normally deductible business expenses are no longer deductible if the business pays the expense with a PPP loan that is subsequently forgiven.

The Association said these tax liabilities are surprising and a “shock to thousands of restaurants operators.”

It provided an example: A restaurant owner in Indiana who accessed PPP loans for his five small locations is facing a $182,000 tax burden. A Texas operator with six stores projects his tax bill to reach more than $1.3 million. Another in Greenville, South Carolina, with 300-plus employees, is considering closing if these taxes come due. To the Association’s point: Restaurants simply cannot afford to lose liquidity when cash on hand is already under tremendous stress.

“This undermines the survival intent of the PPP program by imposing an unexpected tax liability of 25–35 percent on forgiven loans,” Kennedy said. “Restaurants that obtained a PPP loan to support employees and pay bills should not be facing unexpected, unintended tax burdens that further depletes their cash on hand. These PPP expenses should not face a massive ‘clawback’ in the form of federal taxes.”

When Congress created the PPP in March, it made clear to small businesses, the Association said, forgiven PPP expenses would be tax deductible. Restaurants used PPP to keep employees on payroll, including the unique COVID-19 pause where concepts closed and still held staff in hopes of reopening and getting the loan forgiven.   

However, the IRS now cautions about the “massive clawback,” as Kennedy noted.

The Association strongly supports the Small Business Expense Protection Act. “This legislation codifies the intent of Congress, protects small businesses, and will not cost the federal government any additional money. We appreciate that the House of Representatives fixed the issue as part of the HEROES Act, and urge this provision be included in the next joint agreement.”

In the Senate, the Small Business Expense Protection Act was introduced by Senator John Cornyn (R-TX) and is cosponsored by almost half of the Senate Finance Committee—including both Chairman Chuck Grassley (R-IA) and Ranking Democrat Ron Wyden (D-OR). The bill is also sponsored by Senate Small Business Committee Chairman Marco Rubio (R-FL).

An anonymous restaurant franchisee in North Carolina said of the potential clawback, “This would cost us 30 percent of our emergency PPP loan, even as half of our restaurants are still losing money.”

A family-owned operation in San Antonio added, “We pray that any legislation expanding or continuing the PPP reflects the protections found in the Small Business Expense Protection Act of 2020.”

Losing tax deductibility based on PPP loan forgiveness would prove extremely costly, lamented a Houston-based brand. “In a time of severe cash shortages, increasing tax liability is completely nonsensible and counter to efforts to save the restaurant industry.”

In Monday’s letter to Congress, the Association said it “appreciates that bipartisan consensus has developed for a number of items that are important to our industry.” Officials remain in talks as an August 7 recess date fast approaches. Meetings ran through the weekend as Democrats and Republicans attempt to iron out key language, notably around enhanced unemployment assistance, which has lapsed. The HEALS Act calls for a $400 reduction to the $600 weekly benefit. Democratic leaders have continued to push back. Here’s a look at what else could be involved.

Something to consider about the unemployment shift as well is that, up until July 31, between 25–30 million Americans were receiving the Federal Pandemic Unemployment Compensation boost as part of the CARES Act. According to The NPD Group, this translated to $15–$18 billion per week put into consumers’ bank accounts. For context, total restaurant industry sales today are a bit less than $8 billion per week, David Portalatin, NPD food industry advisor and author of Eating Patterns in America, said.

“Although the benefits don’t entirely evaporate on August 1 because of backlogs and late claims, the loss of the $600 a week unemployment benefit could adversely affect the restaurant industry,” he added.

If anything, it’s another possible headwind to consider.

Several provisions included in both plans would provide relief to restaurants and employees, including a second draw of forgivable PPP loans; improvements to Economic Injury Disaster Loans; longer-term loans with partial forgiveness; enhancements to the Employee Retention Tax Credit and the Work Opportunity Tax Credit; a tax credit for customer and employee wellness investments; a temporary increase to the business meal expense deduction; safe harbor protections from COVID-19 related litigation; and enhancements to COVID-19 testing and reporting.

Naturally, the Association supports these components. Yet it brought up Monday the aforementioned setbacks: to ensure PPP loans are available to more than 45 percent of restaurants, and to protect operators from surprise PPP taxes.

Since July 1, nearly 100,000 restaurant dining rooms have been shut down a second time by government mandates. The number of restaurants focused to close permanently continues to increase, the Association said, with the industry on track to lose $240 billion in revenue this year and 8 million employees.

A new study from Aaron Allen & Associates, provided to Bloomberg News, suggested as many as 231,000 of America’s roughly 660,000 restaurants could shutter permanently. That projection would wipe out a third of the field.

More than one in four restaurant workers who have lost their jobs during the pandemic are from the restaurant industry, more than any other sector. Last week, the Department of Commerce reported restaurants lost more than 34 percent of revenue in 2020’s second quarter.

Historically, restaurants operate on particularly thin pre-tax profit margins of 4–6 percent, so even a small drop in revenue significantly threatens survival. “Magnified by the impacts of the COVID-19 crisis, restaurant sales and employment have been shattered,” the Association said.

Put plainly, if the industry is unable to access the lifeline provided by a second round of the PPP, it will lose more jobs, close more restaurants, and fail to support communities.

On Monday, the Independent Restaurant Collation released a new TV ad with support from Morgan Freeman and DoorDash calling on Congress to pass the RESTAURANTS Act—a more focused aid package. It will air in several markets across the country.

The ad features a splice of normal restaurant sounds—laughter, clinking glasses—against darkened restaurants.

The legislation was originally introduced in June by Sens. Roger Wicker (R-MS) and Kyrsten Sinema (D-AZ), alongside Reps. Earl Blumenauer (D-OR 3) and Brian Fitzpatrick (R-PA 1). It now has over 165 cosponsors in Congress with more legislators expected to formally sign. Last week, the bill gained 33 more House cosponsors and five additional Senate cosponsors, including Sens. John Cornyn (R-TX) and Amy Klobuchar (D-MN) and Reps. Kendra Horn (D-OK 5) and Francis Rooney (R-FL 19). 

“Neighborhood restaurants we love are closing every day, knocking a rung off the ladder of someone’s American dream,” said Andrew Zimmern, a founding member of the Independent Restaurant Coalition, in a statement.  “Nearly 40 percent of independent restaurants are owned by immigrants. They are America’s favorite first job, the top employer of non-white managers, and employ over one million single moms. They are passion projects and community lifelines. They are our family, and we hope this ad reminds Congress of the stakes facing their communities during the pandemic. Independent restaurants simply cannot generate enough revenue to stay open and continue employing 16 million people around the country without relief from Congress.”

The Act calls for the establishment of a $120 billion grant program run by the U.S. Treasury that small restaurants, bars, food trucks, caterers, and other similar establishments can use to cover various operating costs, including payroll, rent, mortgages, supplies, and PPE. Grant amounts are determined by comparing revenue from 2019 to revenue in 2020, and funds do not need to be repaid. 

American Express, The Coca-Cola Company, Delta Air Lines, Hyatt Hotels, Resy, Sysco, and US Foods have expressed support.

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Categories: Restaurants

The FSR 50

Restaurant Management - Mon, 08/03/2020 - 10:25
The FSR 50 rosie Mon, 08/03/2020 - 10:25

Taking a closer look at the 50 top-grossing full-service restaurants within the U.S.

August 2020 */ /*-->*/ See the Rankings

Looking back to 2019, it seems a particularly innocent time when few could even conceive of a global pandemic that would turn the world upside down. Of course, restaurants did have their share of challenges: an oversaturated dining landscape, sky-high rents, and tech disruption. For casual-dining chains (which comprise the majority of the FSR 50), such difficulties were further compounded by the ongoing volatility of the segment. Fast-casual players stole business from the bottom while more upscale indies and emerging brands picked off consumers from the top. Though this pressure was a real threat to many restaurants, it also had the potential to transform them into something better.

The chart and financial information included in this report were provided by research and consulting firm FoodserviceResults and are based on U.S. business within fiscal year 2019, the precise dates of which vary from brand to brand. The profiles for each chain, however, lead up to press time and therefore include some updates on the effects of COVID-19. All restaurants have been changed by the pandemic, and this report will undoubtedly look quite different next year.

Olive Garden

Olive Garden

1 Not only did Olive Garden land itself at the top of the FSR 50 as the best-performing full-service brand, but it also managed to post one of the stronger sales growth percentages—an impressive 6.1 percent uptick from 2018. Darden's flagship was in an enviable position; it had the ability to forfeit marginal foot traffic in favor of longer-term, more sustainable growth. So far, the winning formula of well-timed promotions and evergreen value has proved successful. Still, Olive Garden posted its lowest comp sales in three years for the final quarter of 2019 (credited in part to the build-your-own Lasagna Mia flop). At the same time, Darden CEO Gene Lee was shoring up the company for a forthcoming recession by zeroing in on workforce retention and menu streamlining.

COVID-19: As a staunch opponent to third-party delivery, Darden mostly held to that party line, although Lee noted on an investor call in March that everything was on the table. Instead the company lowered its own delivery minimum from $75 to $40 in most states while also offering curbside and catering pickup. That same month, Darden rolled out sick leave for employees as furloughs began; Lee forfeited his salary, and senior executives cut their earnings in half. Though sales nosedived, especially in the initial weeks of dine-in bans, Olive Garden began recapturing business in May as more dining rooms reopened, albeit at limited capacities.

Applebee's

2 America's largest neighborhood grill and bar forfeited the No. 1 slot in 2019 after sales fell 3 percent, the most dramatic decrease among the top 10. The drop came as Applebee's continued working to solidify a value-focused brand direction that harkens back to the old days. The Dine Brands concept may have shuttered several locations, but it also bumped up the remaining stores' average unit volume. In terms of innovation, Applebee's remained undaunted, introducing a string of new deals from $9.99 Sizzlin' Entrées to All You Can Eat Boneless Wings and $7.99 Irresist-A-Bowls. The past year also marked the brand's entry into fast casual with its first Applebee's Express unit.

COVID-19: Like many brands, the coronavirus did a number on Applebee's, ending a 10-week streak of positive same-store sales. But unlike some casual-dining peers, the chain opted to take the hit on the marketing side by cancelling its second-quarter media commitments with the goal of using those dollars to market the reopening of its dining rooms, which began in April. Amid the chaos, the parent company also began its search for a new CEO ahead of Steve Joyce's contract expiring in February.

Buffalo Wild Wings

3 Sales, AUV, and store counts held mostly steady for Buffalo Wild Wings, but that's not to say it was a dull year behind the scenes. For one, the chain's largest franchisee, Diversified Restaurant Holdings, was sold to a private equity firm for $130 million last fall. It also expanded its pop culture scope beyond sports and into the gambling arena through a landmark partnership with MGM Resorts. Similarly, it dipped its toes into the music world when rap group Bone Thugs-N-Harmony changed its name to Boneless Thugs-N-Harmony following the introduction of BWW's boneless wings.

COVID-19: As the largest sports grill chain in the U.S., BWW closed its dining rooms at arguably the worst possible time: right before the start of March Madness. The brand quickly pivoted to off-premises with special deals and free delivery. In April it joined the NFL's annual live draft by offering Draft Day Bundles and a virtual game, Picks and Props, via the BWW app. Seemingly incapable of sitting still even during a pandemic, BWW opened its first to-go-only restaurant in May, which could prove a smooth addition since Inspire Brands' other concepts are all limited service.

Chili's

Chili's

4 The larger concept of the Brinker International pair, Chili's trimmed a few stores in 2019, yielding a gentle increase in overall revenues and AUV. At the same time, corporate also bought back 116 stores from ERJ Dining, the brand's largest franchisee stateside. Such moves are all part of a multi-year turnaround plan that encompasses everything from technological updates and a stronger rewards program to a renewed focus on classic menu items at lower costs, such as the 3 for $10 deal that includes a nonalcoholic beverage, appetizer, and entrée. The chain has also embraced third-party delivery and sped up throughput.

COVID-19: Even if sales have yet to increase by leaps and bounds, the turnaround strategy has proved its mettle during the coronavirus. Chili's began reopening dining rooms in late April, and by June more than 80 percent of its restaurants were offering on-site dining. But even when stores were closed, employees didn't lose access to their health account or other employee benefits. In June, Brinker International also claimed that its average comp sales were 20 percent higher than its casual-dining competitors.

IHOP

5 IHOP has managed to do what few legacy, casual-dining brands have yet to achieve: curry favor with young consumers. In recent years the brand has started and maintained conversations on social media (to wit, the buzz around its brief IHOb name change); introduced new, permanent and limited-time menu additions (the Ultimate Steakburger, Buttermilk Crispy Chicken, holiday-themed pancakes); and streamlined its back-of-house operations. Last fall, IHOP partnered with TravelCenters of America to open nearly 100 new stores over the next five years—the deal was the largest in the brand's 60-plus-year history.

COVID-19: Like a few of its casual-dining peers, IHOP had already experimented with off-premises before the pandemic hit. Although the its plans to introduce a fast-casual spin-off, Flip'D by IHOP, in Atlanta this year were disrupted, the R&D behind it served as a helpful guide when its full-service counterparts pivoted to off-premises-only. In May, 49-unit franchisee CFRA Holdings declared bankruptcy, citing the coronavirus as the primary cause. Despite this and other setbacks, parent company Dine Brands expects IHOP to eventually increase its market share following the closure of many independent competitors.

Texas Roadhouse

6 Of the top 10 full-service brands, Texas Roadhouse took the cake both in terms of sales and unit count growth. Meanwhile, its average unit volume within the same group was bested only by The Cheesecake Factory, which regularly pumps out numbers so high that the brand is in a league of its own. Like all restaurants, the chain has grappled with rising labor costs, which it addressed through higher menu prices, more deliberate staffing levels at peak hours, and more efficient systems in place. All the while it's doubled down on company culture with a mission to hire and retain "all the cool people."

COVID-19: Texas Roadhouse's response to the coronavirus could serve as a whitepaper for many brands. In March, founder Kent Taylor was one of the first chief executives of a major restaurant company to forgo his salary as a means of paying hourly employees; the brand's COO, CMO, and CFO followed suit a month later. Although the coronavirus may have halted growth plans for its spin-off concept, Bubba's 33, Texas Roadhouse has aggressively pursued off-premises in its own operation, transforming a somewhat paltry $8,400 per week in to-go sales in January to $56,000 by the end of April.

Denny's

7 Like just about every other casual-dining chain, Denny's has been navigating something of an identity crisis. Menu changes over the past few years have affected some 80 percent of dishes. At the same time, the chain is retooling its real estate strategy, menu, and store design with most locations already sporting the Heritage model just in time for a newer, 2.0 iteration to be rolled out. Thanks to a refranchising strategy started in 2018, Denny's was able to sell more than a 100 units to franchisees. With cash on hand, it briefly flirted with the idea of acquiring another concept.

COVID-19: On paper, Denny's seemed better prepared for off-premises-only than the average restaurant. Even before the coronavirus, it had promoted family-style meals for carryout and leaned into online ordering and delivery through the Denny's On Demand platform. Though off-premises surged, the company still posted a 76 percent same-store sales drop in April compared with the previous year. Conditions began to improve in May as more than 500 stores reopened and early comps ticked up about 20 percentage points.

Outback Steakhouse

8 Last year has been anything but uneventful for Bloomin' Brands' flagship concept. Highlights include a mega deal with DoorDash, making it the largest steakhouse on the third-party delivery platform; its parent company considering a sale; and the executive chairwoman of the board, Liz Smith, stepping down. All the while, Outback has been working its way back to a more solvent future after kicking the "drug of discounting," as CEO David Deno said on an earnings call.

COVID-19: Deno opted to forgo his salary until further notice, and the board of directors agreed to halt any cash retainer, the funds of which were put toward employees. During the months of dine-in bans, Bloomin' did not furlough or lay off any employees at the corporate level—a decision that later accelerated the reopening process. In early June, when half of all Outback locations were offering dine-in, the brand had recaptured about 90 percent of its pre-crisis business, even with capacity limitations in place. By the end of the month, Bloomin' had reopened most domestic locations across its four brands.

Cracker Barrel

Cracker Barrel

9 It was a fruitful year for Cracker Barrel, with revenues up 3.5 percent and AUVs enjoying a 2 percent boost. The comfort food chain was also busy at work diversifying its portfolio. Last fall, it acquired 33-unit Maple Street Biscuit Company with the intention of converting its seven Holler & Dash stores to the more established fast casual. Just before that deal, it had entered into a strategic partnership with up-and-coming Punch Bowl Social under a vision of scaling it beyond 100 domestic locations.

COVID-19: Cracker Barrel's promising relationship with Punch Bowl Social turned sour in the early days of the coronavirus. When the eatertainment concept defaulted on its loan following the closure of all 19 locations, Cracker Barrel demurred the option to cover the company's debt. Instead it partnered with DoorDash to bolster off-premises and also launched a program to donate meals to front-line healthcare workers. With a large volume of stores across the Southeast, Cracker Barrel benefited from those states' early reopenings though that good fortune could prove short-lived as new COVID-19 cases surge across the region.

Red Lobster

10 The full-service seafood leader is nothing if not dogged in its efforts to evolve with the times. Unlike others in the category, it had embraced third-party delivery prior to COVID-19. It emphasized value with a seemingly bottomless barrel of promotions and specials (from Endless Shrimp to Create Your Own Ultimate Feast) but still took care to create a differentiated dine-in experience. Despite these efforts, Red Lobster struggled to woo younger consumers, as evidenced by declines in systemwide sales, AUV, and store count.

COVID-19: Calling upon the power of promos, Red Lobster has doubled down on the deals, offering competitively priced to-go specials tailored for family meals and date nights. It's also added an interactive element to at-home dining, thanks to recipe cards for variations on its Cheddar Bay Biscuits. As for giving back, the company partnered with the Napa Seafood Foundation to get meals to healthcare workers.

The Cheesecake Factory

11 The Cheesecake Factory may hold the final slot of the top 10, but it puts all other FSR 50 brands to shame with an AUV surpassing $10 million—that's a $1.5 million buffer between the next most lucrative-per-unit restaurant. In 2019, it not only welcomed dozens of new Cheesecake Factory units into the fold, but it also acquired Fox Restaurant Concepts, with plans to aggressively grow North Italia and Flower Child. On the operational side, The Cheesecake Factory pursued on- and off-premises improvements through delivery and limited dine-in reservations, respectively.

COVID-19: The brand made headlines early in the pandemic when CEO David Overton wrote a letter explaining that its restaurants would not be paying rent. Shortly thereafter, it furloughed 41,000 employees. In June, as reopenings were under way, the chain temporarily shuttered 87 restaurants amid protests surrounding the murder of George Floyd.

LongHorn Steakhouse

12 Darden's second-largest concept may pull in less than half the revenue of Olive Garden, but LongHorn Steakhouse's star is on the rise with revenue and AUV growth that bests its big sister. The upward momentum has been largely credited to a simplified operating model that trimmed the menu, pushed offerings toward more premium cuts, and promoted upsell items. Looking ahead, disrupted meat supply chains due to COVID-19 could be an obstacle for it and other steakhouse concepts.

Red Robin

13 The largest burger restaurant in full service has undergone some soul searching, infusing the brand with fresh blood—including CEO Paul Murphy and new members to the board of directors—while also getting back to its values by trimming the menu and accelerating a new hospitality model called the Total Guest Experience. In a strange way, the coronavirus presented an opportunity for Red Robin to go head-to-head with the better-burger fast-casual segment that has been swiping business away for nearly a decade.

Golden Corral

14 Things weren't going so well for the buffet-centric Southeast chain even before the pandemic; systemwide sales, AUV, and unit count slipped in 2019. But now as competitors like Souplantation/Sweet Tomatoes go under, Golden Corral is considering how it could reopen without the buffet element.

Waffle House

15 Like Subway on the quick-service side, Waffle House makes its fortunes not through steep checks but rather ubiquity. Though the chain closed a few odd stores in 2019, its system of 1,900 stores remains vast. Waffle House has long prided itself on keeping the doors open during adverse conditions, like natural disasters, but in April it chose Postmates as its first delivery partner.

BJ's Restaurant

16 Last year was relatively uneventful yet overall positive for BJ's Restaurant, however, since the coronavirus it's been nothing short of a rollercoaster. Even though off-premises orders increased, overall sales declined, prompting the brand to lay off 16,000 workers, furlough 200 managers and 40 support center employees, and, like The Cheesecake Factory, not pay rent. Help came in the form of a $70 million investment from Panera founder Ron Shaich in May. Reopened restaurants further brightened the business without dampening off-premises sales.

TGI Fridays

17 Despite a less-than-stellar 2019, TGI Fridays kicked off the new year with a bombshell revelation. Under a $380 million deal with Allegro Merger Corp., the company would go public at a time when many chains were retreating to the private sector. But the deal was not to be; in April, citing the weak market and uncertain conditions brought on by the coronavirus, both parties opted to drop the planned merger.

Hooters

18 Following the lead of BWW, Hooters entered the sports-betting arena earlier this year through a partnership with KonekTV in Indiana, Pennsylvania, and New Jersey. During COVID-19 dine-in restrictions, the brand introduced curbside pickup service nationwide.

P.F. Chang's

19 It was a solid year for the Pan-Asian cuisine leader with steady, positive growth. In February, it introduced P.F. Chang's To Go in Chicago, which, while not the original intent, became something of a dry run for the greater brand as its expansive dine-in operations were forced to pivot to off-premises just a month later.

Bob Evans

Bob Evans

20 Last year, Bob Evans recommitted to its "America's Farm Fresh" ethos after spending years (like many casual-dining chains) chasing the golden goose that is the millennial customer. The shift in messaging has yet to yield quantifiable results, and the effects of the coronavirus could further compound existing challenges.

Ruth's Chris Steak House

21 The upscale steakhouse experienced modest growth in 2019 before being chucked into chaos in March. As a concept that prides itself on the dine-in experience, Ruth's Chris watched its sales plummet. In May, weekly sales averaged $30,600 at its reopened corporate stores compared to $106,400 the previous year.

Cheddar's Scratch Kitchen

22 In the three years since Darden purchased the Texas-based chain, the parent company has worked to bring Cheddar's labor management up to the portfolio standard and boost brand awareness. The investment seems to be paying off with new stores coming down the pipeline and systemwide sales up a healthy 3.6 percent.

Ruby Tuesday

23 Hard times have long been the order of business for Ruby Tuesday. NRD Capital Management brought the restaurant back into the private sector and installed turnaround pro Ray Blanchette as CEO in 2018. But his tenure didn't even last the year, and in 2019 the downward motion remained unabated with sales down and some 40-odd store closures.

Carrabba's Italian Grill

Carrabba's Italian Grill

24 Like sister concept Outback Steakhouse, Carrabba's forfeited some traffic this year in favor of building a healthier guest base through less deep discounting. As an Italian concept, it walks a precarious line, competing against fellow casual-dining chains and beloved independents. Lying somewhere in between the ubiquity of Olive Garden and the more upscale atmosphere of Maggiano's, Carrabba's continues to search for its sweet spot.

California Pizza Kitchen

25 California Pizza Kitchen remains the top full-service pizza brand, but that speaks to its existing pipeline and lack of competition, rather than growth. Things turned bleaker this spring when it retained the services of two financial advisory firms to facilitate discussions with the brand's lenders and avoid bankruptcy. Still, the brand is working to get into the lucrative off-premises pizza game with special meal kits.

Yard House

26 Yard House's AUV dipped last year, bringing it below personal records that once eclipsed $8 million per store. Nevertheless, 2019 was prosperous overall for the beer-plus-bites brand, which capitalized on the elevated pub model and ratcheted system-wide sales up 7 percent while opening a handful of new stores.

Perkins

27 Strictly in terms of financials, Perkins fared the worst of any brand on the FSR 50, with double-digit losses, nearly 70 locations shuttering, systemwide sales nosediving $75 million, and bankruptcy in August 2019. It's a grim picture but not one without hope: Last fall, Huddle House purchased the chain, and now the pair can pool resources across their combined 700 units.

Bonefish Grill

28 Bloomin's seafood concept slipped in 2019, with overall sales and AUVs down; in February, it also lost brand president Jeff Carcara after only a year on the job. Bonefish Grill's slightly elevated atmosphere combined with seafood's to-go challenges meant it was harder hit by dine-in bans than Outback and Carrabba's. Nevertheless, the brand did what it could to innovate, creating special family bundles for off-premises dining.

Dave & Buster's

29 Eatertainment pioneer Dave & Buster's added a dozen-odd locations and kicked sales up by more than 10 percent. Any celebration quickly halted as COVID-19 decimated the broader segment. As for the brand, it lost $43.5 million in the quarter ending May 3.

Logan's Roadhouse

30 The largest concept in the CraftWorks Holdings portfolio, Logan's Roadhouse had a relatively calm year; sales dipped, but AUV grew. In March, underlying issues within the parent company quickly became apparent as CraftWorks shuttered 37 underperforming stores and filed for Chapter 11—and that was before COVID-19 struck. The pandemic disrupted its initial plans and, in the end, CraftWorks was sold to Fortress Investment Group in May for $45 million less than the original, agreed upon price.

First Watch

31 Breakfast is big, and First Watch is the darling of the segment; 2019 was a blockbuster year for the Florida-based chain. In terms of sales and unit count growth, it was bested only by Cooper's Hawk Winery—and by less than a percentage point in the former category. It's an even more impressive feat when considering the low check averages and limited hours of breakfast concepts. While those numbers may not be as high next year because of the coronavirus, the brand is poised to emerge from the pandemic even stronger. During a temporary, system-wide shutdown in April, First Watch not only mastered online ordering in a matter of days, but it also tripled its off-premises business and upgraded its waitlist-management system.

The Capital Grille

32 Thanks to its upscale nature and high AUV, The Capital Grille can post positive numbers without reinventing the wheel or charging toward market saturation. But Darden's poshest concept, like most fine-dining establishments, has faced an uphill battle amid coronavirus regulations.

Miller's Ale House

33 Florida-based Miller's Ale House had a strong year, lifting sales by more than 8 percent and opening several new locations. But like other sports bar/grill restaurants, it was hit hard by the pandemic. In March, the company furloughed thousands of employees, and the ensuing months brought more bad news when it shuttered its two Nevada outposts and lone New England store for the foreseeable future.

Chuy's

34 In recent years Chuy's has grappled with rising labor costs, though its 2019 financials reveal no such struggle when sales climbed $35 million. Because of its prior investment in off-premises options and in-store technology, Chuy's business has started to regain lost ground with most locations offering (limited) dine-in service as of June.

O'Charley's

35 The struggles of the casual-dining segment are especially apparent at O'Charley's, which closed more than two dozen stores and experienced a significant loss of revenue. During the pandemic, it launched family-style meals for larger crowds and $5-$6-$7 Lunch Meals for budget-minded customers. The brand also introduced a Hometown Heroes initiative to help feed healthcare workers.

Maggiano's Little Italy

36 It was a relatively calm year for the smaller of Brinker International's two brands. Foot traffic that fell below projections led to a slightly disappointing final quarter and also hampered AUV, though the brand still managed to reach the same annual sales as 2018. The upscale Italian chain entered an exclusive delivery partnership with DoorDash while also integrating ordering capability into the restaurant's website.

Mellow Mushroom

37 The psychedelic pizza slinger lost an estimated $40 million in revenue and 25 units in 2019. While there is no smoking gun for the marked downturn, competition from the glut of fast-casual pizza concepts and a growing demand for convenience undoubtedly came into play.

Fogo de Chão

38 Thanks to a high AUV and steady unit count growth, Fogo de Chão clinched top honors among the handful of Brazilian churrascaria chains in the states. The only thing that might slow such momentum? COVID-19. Fogo's experiential dine-in nature does not translate well beyond the restaurant's four walls. Plus, its popular Market Table could be a thing of the past as buffet dining comes under scrutiny.

Texas de Brazil Churrascaria

39 Texas de Brazil Churrascaria could soon eclipse Fogo de Chão as the No. 1 Brazilian steakhouse chain. Locations do about $3 million less on average, but Texas de Brazil makes up for it with a larger system and faster growth rate. That said, the pair were neck and neck on the FSR 50 five years ago, so there's a good chance the dance will continue into the future.

Twin Peaks

40 With about a quarter of the units of competitor Hooters, Twin Peaks has more whitespace to fill in. Plus, the Texas-based chain does about 1.5 times the average-unit volume thanks to menu innovation in the form of smoked-in-house dishes and elevated beverages.

Cooper's Hawk Winery & Restaurant

41 In terms of growth, no one, not even "it" brand First Watch, could keep up with Cooper's Hawk Winery & Restaurant. Founded 16 years ago in a small Chicago suburb, the restaurant/winery boosted systemwide revenue by more than 25 percent while expanding its footprint by a dozen units. Its success is due in part to an unconventional operating model that marries upscale, New American eats to a wine tasting room; it doesn't hurt, too, that AUV clocks in around $8.5 million. During the pandemic, the chain not only offered takeout and delivery, but it also served meals to furloughed employees.

On the Border Mexican Grill & Cantina

42 In addition to shuttering about a dozen locations, On the Border closed 2019 with a security breach. Though the chain is relatively unchallenged by fellow Tex-Mex brands, it is at odds with a number of independent and regional concepts. The downward trajectory prompted a shakeup; in June, it brought in a new CEO and CFO, both alums of Krystal.

Pappadeaux Seafood Kitchen

43 Pappadeaux Seafood Kitchen may garner less buzz than larger chains like Red Lobster and Bonefish Grill, but the family-owned enterprise is beloved by many—as reflected in its steadily growing revenues. Though the chain had declined third-party delivery in the past, it partnered up amid the flurry of dine-in bans.

Village Inn

44 Last year was a rough one for Village Inn, which cited cutthroat competition in the family-dining sector and the rise of grocerants. In January, parent company American Blue Ribbon Holdings, which also owns Bakers Square, declared bankruptcy and closed 33 Village Inn units in hopes of resetting the beleaguered brand.

Black Bear Diner

Black Bear Diner

45 Black Bear Diner has been hard at work expanding far beyond its California roots. In 2019 alone, it added nearly 20 new units to the system while also elevating its dinner service through offerings like carving stations. Behind the scenes, the C-suite has welcomed new blood into the mix, including Farmer Boys' Tammy Johns as chief people officer, O'Charley's Steve Sparks as CFO, industry veteran Joe Adney as CMO, and American Blue Ribbons Holdings' Jeff Guido. President and former CFO Anita Adams also ascended to the role of chief executive.

Famous Dave's

46 The largest full-service barbecue chain may be down, but it is most certainly not out. Over the last couple of years, Famous Dave's has bought back stores from franchisees to foster a nimbler brand in the ever-changing restaurant landscape. That approach has proved downright prescient; in the earliest days of COVID-19, the brand was able to ferry its business off-premises, with traffic on its proprietary app leaping 200 percent year over year.

Brio Tuscan Grille

47 In mid-2018, plans were underway to lean into the Italian-Mediterranean ethos of Brio Tuscan Grille and sister concept Bravo Cucina, though that positioning has yet to yield fruit. In April, parent group FoodFirst Global Restaurants declared bankruptcy, citing the negative effects of the coronavirus, but was rescued along with Bravo Cucina soon after by Earl Enterprises, parent of Planet Hollywood among other concepts.

Ninety Nine Restaurant & Pub

48 Though Ninety Nine Restaurant & Pub shares a parent (Fidelity Newport Holdings) with ill-fated American Blue Ribbon Holdings, the former was unaffected by the latter's bankruptcy. In fact, the casual-dining chain fared well in 2019, adding  new stores and pushing system-wide sales over the $300 million mark.

Fleming's Prime Steakhouse

49 Bloomin's smallest concept has, arguably, the greatest potential for future growth. To that end, Fleming's has been actively pursuing the fine-dining sector. Revenues and store count remained mostly unchanged in 2019, but it's safe to assume those financials could decrease as COVID-19 decimates dine-in business.

Saltgrass Steakhouse

50 Saltgrass Steakhouse may not have the flamboyance of Bubba Gump and Rainforest Café nor the storied past of Chart House, but it is the only brand within the Landry's family to land a spot on the FSR 50. The Texas-born steakhouse had a good 2019, but its parent company embroiled itself in a bit of controversy in March when owner Tilman Fertitta urged the government to lift social-distance restrictions.

Methodology

FSR partnered with FoodserviceResults for this year's FSR 50 report. Confirmation of U.S. sales, units, and average-unit volumes (AUV) were requested from all leading chain restaurant operators corporate headquarters. Filings from the Securities and Exchange Commission (SEC), Franchise Disclosure Documents (FDD), transactional data, and statistics from other sources were amalgamated, reviewed, and analyzed to yield domestic sales, unit count, and average-unit volumes. When necessary, estimates were made for fiscal year 2019 in order to more accurately report on restaurant industry leaders. Founded by industry veteran Darren Tristano, FoodserviceResults is a research and consulting firm specializing in consumer research, data analysis, and insights to the foodservice industry.

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Categories: Restaurants

6 Essential Factors when Purchasing Gloves for Restaurant Employees

Restaurant Management - Mon, 08/03/2020 - 10:04
6 Essential Factors when Purchasing Gloves for Restaurant Employees danny Mon, 08/03/2020 - 10:04

The right gloves and best practices can reduce or increase the risk of COVID-19 transmission

August 2020

The significant outbreaks of COVID-19 at food processing facilities and among foodservice workers has been attributed to person-to-person transmission, exacerbated by the close working environment.

As a result, the implementation and promotion of improved personal hygiene practices for all workers has become a priority at food facilities and restaurant kitchens, especially the use of effective glove management and personal protective equipment (PPE). Glove selection and usage is an increasingly important consideration for restauranteurs dealing with the continual challenges of working during the pandemic.

Single-use gloves do play an integral role in food safety programs to prevent cross-contamination, while providing the wearer with barrier protection against food and pathogens. However, not all gloves are effective barriers to pathogens and some can be a potential food safety risk to both employees and customers. The following are six essential factors for the restaurant and hospitality industry to consider when purchasing gloves, to help guard against person-to-person COVID-19 transmission, and other associated issues:

Select the Best Glove Type

A variety of glove types are available for food handling, each providing varying degrees of barrier protection. Vinyl gloves are the most commonly used in food handling because of their cheap price point but have limited durability. They can rip and puncture easily compared to nitrile, increasing the risk of bacterial and viral cross-contamination. Good quality polyethylene (PE) gloves are an inexpensive food handling glove when frequent glove changes are required. However, they’re recommended to be used for only one to two minutes, for light food handling and preparation only. 

Price alone should not be the only determinant for your glove selection. Providing your employees with a quality nitrile glove to prevent pathogen transmission may not increase your overall glove costs per month, and will better protect against viral cross-contamination.

Purchase from a Reputable Supplier

The pandemic has created a sudden increase in PPE suppliers, a few of which have no prior knowledge of products, manufacturing sources or quality standards. Reject quality gloves are flooding the market causing both food safety risks, and risks to glove wearers.

Restaurant owners should always partner with a reputable supplier utilizing known quality control systems and in-person manufacturing audits. This is to ensure product quality and consistency, and to enhance your food safety programs.

Review Glove Performance Qualities

Glove quality is determined by glove type (as highlighted above), the quality of raw materials and processes used in manufacturing. These factors affect glove strength and durability, as well as food safety performance. Food grade gloves are not required to be tested for pinhole defects (no Acceptable Quality Limit (AQL) testing requirements) meaning they may have unknown amounts of glove defects per box. These pin holes are too small to be noticed, but large enough to allow the passage of microorganisms—including viruses.

Due diligence in glove selection is necessary before purchasing. Knowledge of a glove’s AQL is essential in determining their level of food safety—the lower the number, the greater the barrier protection for the wearer and customers.

Develop Dispensing and Handwashing Best Practices

When handling food, cross-contamination must be avoided. Gloves must not be stored outside of their box, and any that spill onto surfaces or the floor must be discarded. 

Washing hands prior to donning gloves is recommended. Also, after removing gloves and disposing safely, hands must be washed again before touching surfaces. Developing systems for easy dispensing beside or near hand washing facilities will help employees avoid cross-contamination risk.        

Glove Wearing and Removal

It’s essential to put gloves on and take them off correctly to reduce contamination risks.  One must not remove gloves near or over food or clean surfaces. Additionally, fingernail length must be kept below the finger and jewelry must be removed to minimize glove rips. 

Avoid Coronavirus Waste

“Coronavirus Waste” is impacting our global environment, as the increase in PPE usage combined with the poor-quality gloves flood the market. Poor-quality gloves rip easily and may even be defective before use. Both scenarios increase usage and corresponding waste. Choosing a quality glove can reduce usage by up to 30 percent, reducing your overall impact.

The false economy of cheap gloves can affect both food safety and business risk, especially in the current climate, as effective protection against viruses and bacteria is of utmost importance. Restaurant owners shouldn’t put employees, customers and their livelihoods at risk by cutting corners.

Lynda Ronaldson is Vice-President of Marketing at Eagle Protect, a specialist supplier of ethically-sourced, high-quality single-use gloves and protective clothing to the food industry. She can be reached at lynda@eagleprotect.com.

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Categories: Restaurants

On Comeback Trail, Ruth Chris is Mastering the Margins 

Restaurant Management - Fri, 07/31/2020 - 15:13
On Comeback Trail, Ruth Chris is Mastering the Margins  danny Fri, 07/31/2020 - 15:13

Comps are down 47 percent quarter-to-date.

July 2020

Ruth Chris CEO Cheryl Henry remains positive about the future, and much of that optimism is derived from the performance of two dozen restaurants this summer.

There were 24 company-owned restaurants that operated open dining rooms for all of June. At those units, same-store sales reached 81 percent of prior year levels. Also, each one had positive cash flows and margins consistent with 2019. Sixteen of the 24 had better margins than last year.

Henry said the success of these restaurants provides an early, but meaningful insight into the near-term performance. She gave credit to the workers at the restaurants for managing P&L in a low sales environment. 

“Some of this has been us taking a good look at where there’s opportunities, so I’d say there’s a mix,” Henry said during the company’s Q2 earnings call. “I think there are some things that we’ve done inside the restaurant, inside the four walls, that will carry on through this around staffing and the structure of our staffing in the restaurants.”

CFO Arnie Haak said the higher performance of the 16 units can be seen across P&L—food costs, labor efficiencies, and other operating costs. To Haak’s point, food and beverage costs decreased $21 million and restaurant operating expenses lowered $24.9 million.

Henry made the point that despite the environment, guest satisfaction scores remain high.

“I think the takeaway there is that we can make some of these changes,” Henry said. “Some for safety and health reasons as far as the number of people that are touching tables, and others to understand what’s truly required at that level of sales. And that’s probably where we’ve seen some significant opportunities around the margins.”

As of Tuesday, 88 percent of company-owned restaurants (71 of 81) are open. Fifty-two have open dining rooms, 15 are operating outdoor only, and four are doing off-premises only. Quarter-to-date, corporate stores—both open and closed—are down 47 percent, with average weekly sales of $53,700. Excluding the impact of the 10 closed units, comps would be down roughly 42 to 43 percent.

In addition, 93 percent of franchises (68 of 72) are open. Sixty-six have operating dining rooms, one has outdoor seating only and another is doing off-premises only.

Since May, units with open dining rooms have averaged 75 to 80 percent of prior year sales, and Henry said trends are slightly better than July than in June.

These sales, of course, were earned with capacity limits ranging from 25 to 75 percent.

“As we looked at it going in, several options—including outdoor dining spaces and expanding where we could, using private dining spaces, really reworking the entire floor plan of the restaurants to ensure the safety standards are being met, but at the same time, allowing for a different approach to seating, including shoulder times that maybe start a little early,” Henry explained. “As you can imagine, guests were certainly interested in understanding when they were first venturing out to dining rooms that if they wanted to come as early as 4:30 that restaurants are open and available for them and then some later at night, as well.”

In regard to its two biggest markets—Florida and California—Henry said units in Florida are holding steady as far as performance. With closed dining rooms in California, sales have softened, but Henry praised the team for transitioning rapidly to outdoor dining.

“Our team responded with speed and innovation and have now created some beautiful outdoor dining venues where none existed before,” Henry said.

The steakhouse has come a long way since the pandemic began. Comps sank 87 percent in April and 80 percent in May. As dining rooms reopened, same-store sales improved to a decline of 54 percent in June. Average weekly sales went from $19,200 in April to $30,500 in May. That figure then tripled in June to $60,000.

For Q2 overall, comps at company-run stores declined 74 percent and average weekly sales stood at $36,300. This breaks out to a 68.6 percent decrease in traffic and 17.4 percent slide in average check. Q2 revenue was $28.4 million compared to $110.2 million in the year-ago period. Net loss was $17.6 million, down from a net income of $9.3 million in 2019.

At restaurants with open dining rooms, comps were down 23 percent in May and 19 percent in June. That equals average weekly sales of $70,750 in May and $84,000 in June.

Ruth Chris permanently closed five company-owned stores and terminated leases at two of the seven new units it was planning to open. One franchise restaurant in Charleston, South Carolina, permanently closed, as well. Haak said there are at least five additional locations that could close if the pace of recovery slows or the restaurant isn’t able to reach a resolution with the landlords.

"There were a handful that were underperformers and then you have some that had lease expirations and were at the end of their term anyway, and there wasn’t too much of a prize to rebuild the sales in those restaurants only to eventually close them a couple of years from now,” Haak said.

When it comes to the timing of the 10 closed corporate stores reopening, Henry said it involves discussions with landlords, validity of the marketplace in the next couple of years, and limitations in the jurisdiction.

“We’re reviewing them on a daily basis,” Henry said. “We obviously want our dining rooms open and we want our teams back in those dining rooms, but as we look at the viability and understanding the financials within the four walls of those locations we’ll continue to monitor it.”

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Categories: Restaurants

California Pizza Kitchen Declares Bankruptcy

Restaurant Management - Thu, 07/30/2020 - 12:14
California Pizza Kitchen Declares Bankruptcy danny Thu, 07/30/2020 - 12:14

Outside of COVID-19, the chain cited three main reasons for the Chapter 11 filing.

July 2020

California Pizza Kitchen, which has 163 corporate locations and 16 franchises in the U.S., announced Thursday that it filed for Chapter 11 bankruptcy. 

Before filing, the brand entered into a restructuring agreement with senior lenders that will reduce debt by $230 million (from $430 million to $174 million) and provide $46.8 million in financing to continue operations, pay vendors and employees, and provide for ongoing commitments to stakeholders. California Pizza Kitchen aims to exit the bankruptcy process in under three months. 

“Today’s announcement is a step towards a stronger future for California Pizza Kitchen,” CEO Jim Hyatt said in a statement. “The unprecedented impact of COVID-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business. Throughout this process we will continue to deliver the same innovative, California-inspired cuisine that we have been serving for over 35 years.”

Because dine-in represented 78 percent of sales, the closure of dining rooms greatly impacted operations. By the final week of March, weekly net sales were $2.5 million, compared to $11.3 million in the year-ago period—a 77 percent drop. The company closed 46 restaurants that weren’t suitable for off-premises.

In its pivot to off-premises only, the brand leveraged web-based delivery and relationships with Uber Eats, Grubhub, Postmates, and DoorDash. It also created CPK Market, a way for customers to purchase traditional menu items and grocery items. 

Since then, net sales have recovered somewhat, but were still down more than 40 percent in the last week of June. 

Outside of COVID pressures, the brand cited three main reasons for the bankruptcy—the emergence and growth of fast-casual dining, decrease in foot traffic around malls, and the rise in third-party delivery services. 

In recent years, the company responded by increasing efficiency in its locations, streamlining menus, and reducing excess costs. For example, the brand focused on a more value and speed-focused lunch menu to compete with fast casuals and worked to meet market trends by leveraging Cali-health offerings. 

Despite the initiatives, the brand faced liquidity issues in 2018 and 2019. To reevaluate its operating strategy and brand identity, California Pizza Kitchen hired a new management team that implemented a multi-year strategy aimed at improving the brand’s financial position. 

In the fall of 2019, the company retained Guggenheim Securities and Kirkland to explore M&A and possible restructuring transactions. The restaurant then initiated a marketing process to sell the company. It drew serious interest, but the COVID pandemic paused the efforts. 

In the first two months of the year, the brand generated positive net cash flow before financing activities. But from the last week of March through June, net cash flow before financing was –$18.9 million. 

“The company’s projections demonstrated that to weather this environment the company needed imminent access to liquidity as well as marked adjustments to its operations,” the filing stated. 

Soon after the pandemic began, California Pizza Kitchen received a $30 million bridge loan to continue operations, but it was only a temporary solution. The restaurant has exhausted the loan and only has $13.5 million of cash on hand. There’s also roughly four months of unpaid rent obligations at most locations. 

The restructuring agreement, which includes the continuation of the sale process, is meant to position California Pizza Kitchen for long-term success, save thousands of jobs, and ensure landlords and vendors have a viable partner going forward, according to court documents.

“After an extensive review process, the restructuring support agreement and Plan present the only viable path forward that results in CPK’s business continuing as a going concern,” the filing states. “For these reasons and the other reasons described in this declaration I believe that the restructuring support agreement and Plan represent the value-maximizing path forward.”

Across the country, full-service restaurants have been rocked by the pandemic. According to The NPD Group. Visits to full-service concepts were down 47 percent in April, May, and June. 

California Pizza Kitchen joins what will continue to be a growing list of restaurants who’ve declared bankruptcy amid the pandemic. Some notable brands include FoodFirst Global Restaurants, Sustainable Restaurant Group, Chuck E. Cheese, and Garden Fresh Restaurants

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Categories: Restaurants

Out of Crisis Comes Opportunity for Applebee’s, IHOP

Restaurant Management - Thu, 07/30/2020 - 11:36
Out of Crisis Comes Opportunity for Applebee’s, IHOP danny Thu, 07/30/2020 - 11:36

When the pandemic clears, the battle for market share will heat up.

July 2020

From a net growth perspective, the casual-dining industry had been on the retreat before the pandemic. But that could change quickly.

Applebee’s president John Cywinski mentioned an intriguing dynamic during the company’s Q2 review Wednesday—a recap that tried to piece together three rather strange months.

Among the sectors in foodservice, casual dining remains the one category “absolutely disproportionately reliant upon independent restaurants,” he said. Or put another way, 90 percent-plus of all restaurants in casual dining are independents. “Which means,” Cywinski says, “strong, vibrant brands with scale who are well-positioned will benefit significantly.”

“It would be the one category that stands out in terms of opportunity.”

For perspective, pre-virus, here’s a look at “major chains” market share among quick-service categories, according to BTIG analysts, the NPD Group, and company documents.

  • Hamburger: 95 percent
  • Mexican: 86 percent
  • Sandwich: 73 percent
  • Pizza: 48 percent

So, to Cywinski’s point, counter-service brands already dominated much of their category landscapes (outside of pizza, which is one reason brands like Papa John’s and Domino’s are so bullish).

Meanwhile, the pool stressed most by COVID-19 disruption, and where the lion’s share of closures will likely take shape, is the independent sector.

Dine Brands CEO Steve Joyce referred to the concept multiple times Wednesday. “I think the discussion around scale and brand awareness, and the ability to do digital work and the technology we can bring, is just out of reach for most independents,” he said. “And that’s why you’re seeing them bear the brunt of this.”

Joyce admitted Dine Brands isn’t entirely excused from the closure dilemma. It simply doesn’t project a material number (more on this later). And then there’s examples of corporate backing like when 49-unit IHOP franchisee CRFA declared bankruptcy in May. While that story made the rounds in the “industry is retracting” narrative, Joyce said, many people didn’t take the end-result into consideration. With Dine Brands’ help, 41 of those stores were dealt to another franchisee and are back on line.

A lot of numbers have floated in recent months concerning the breadth of the independent upheaval. Rabobank estimated as many as 50,000–60,000 closures within the next 12 months, or 15–20 percent of the entire field. The Independent Restaurant Coalition provided perhaps the direst outlook, saying 85 percent of all independents could shutter without direct aid. It’s likely to fall somewhere in the middle. But, regardless, it’s going to dramatically reshape the industry near- to mid-term given the fact the segment generates about $760 billion in sales and employs 11 million people.

In August 2018, The NPD Group pegged the number of independents nationwide at 352,815. There were another 307,940 chains.

This is where Dine Brands believes runway lies. “One person's crisis is another person's opportunity,” Joyce said. “And our view is we're going to emerge from this thing with a lot of strength and capital and that's going to put us in a position to resume a significant growth trajectory for the company.”

It brings up a seldom-mentioned kickback of COVID-19 restaurant survival. Since the pandemic landed in March, large publicly traded restaurants companies have raised significant cash, either via new issuance and/or drawdown on existing credit lines. In a lot of cases, it’s come in far excess of the company’s cash needs, significantly depressed sales or not. Rabobank noted earlier that aggregator cash holdings by 25 of the largest public brands more than doubled, from $9.4 billion pre-virus to nearly $20 billion mid-May.

Dine Brands, for instance, currently has about $342 million of cash, of which $279 million is unrestricted.

It bears the question, can this recent cash build-up evolve from a defensive strategy intended to project balance-sheet strength into a more aggressive stance, especially as sales recover and a potential economic recession brings acquisition multiples down to attractive levels?

Dollars will be up for grabs as brands go after new customers. So will sites.

“Obviously, there is going to be a lot of buildings available for conversion,” Joyce said. “And you had several brands that pre-virus were struggling. … We're, obviously, looking at this all very carefully.”

“It’s a combination of efforts that we think is mostly upside for us,” he added. “And we think at the far end of this episode, I think what you're going to see is the companies that emerge with strong financial capabilities are going to be in a really good position for growth and that's the way that we're viewing it.”

Applebee’s permanently shuttered 24 domestic franchises in the three months that ended June 30 (two international as well), and has closed 38 total units (six international) in the six months leading up to July. It finished Q2 with 1,633 domestic stores and 116 international. This time last year, Applebee’s had 1,676 and 139 restaurants, respectively.

IHOP closed 18 franchise/area license restaurants and has shuttered 28 trailing six months. With growth, the net reduction is 17 and 18 units, respectively. IHOP exited the period with 1,696 domestic venues and 127 international compared to 1,705 and 123 in the year-ago period.

IHOP

Breakfast occasions during COVID-19 have been tough to chase for brands nationwide, including IHOP.

“I’ve never seen a quarter like this quarter”

Dine Brands reported a net loss of $134.8 million ($8.04 per share) in Q2 compared to net income of $21.4 million in Q2 2019. The company surely isn’t alone in unicorn results, which Joyce said are an undeniable outlier in his 40 years of restaurant experience.

Applebee’s and IHOP did how progress throughout the quarter and in more recent weeks.

Domestic same-store sales

Week ended April 5

  • Applebee’s: –77 percent
  • IHOP: –81.5 percent

Week ended April 12

  • Applebee’s: –77.3 percent
  • IHOP: –79.4 percent

Week ended April 19

  • Applebee’s: –64.2 percent
  • IHOP: –76.3 percent

Week ended April 26

  • Applebee’s: –64.4 percent
  • IHOP: –75.4 percent

Week ended May 3

  • Applebee’s: –60.8 percent
  • IHOP: –72.6 percent

Week ended May 10

  • Applebee’s: –54.3 percent
  • IHOP: –65.4 percent

Week ended May 17

  • Applebee’s: –52.8 percent
  • IHOP: –61.5 percent

Week ended May 24

  • Applebee’s: –49.5 percent
  • IHOP: –58.3 percent

Week ended May 31

  • Applebee’s: –42.7 percent
  • IHOP: –52.1 percent

Week ended June 7

  • Applebee’s: –37 percent
  • IHOP: –46.2 percent

Week ended June 14

  • Applebee’s: –30.3 percent
  • IHOP: –42.9 percent

Week ended June 21

  • Applebee’s: –18.4 percent
  • IHOP: –33.3 percent

Week ended June 28

  • Applebee’s: –17.8 percent
  • IHOP: –34.4 percent

Week ended July 5 (July results are preliminary)

  • Applebee’s: –22.3 percent
  • IHOP: –40.4 percent

Week ended July 12

  • Applebee’s: –17 percent
  • IHOP: –35.7 percent

Week ended July 26

  • Applebee’s: –15.6 percent
  • IHOP: –35 percent

Applebee’s comps sales improved 11 out of 13 weeks through the period ending June 28. It marked a massive uptick from a decrease of 77 percent to 17.8 percent, or 59.2 percentage points. IHOP’s same-store sales bumped sequentially for 12 out of 13, from negative 81.5 percent to 34.4 percent—a lift of 47.1 points.

There have been some dramatic shifts along the way. Applebee’s off-premises sales accounted for 60.5 percent of sales mix in Q2. It was just 16.8 percent in Q1 and 13 percent the quarter before that. Delivery pushed 16.8 percent of total sales and take-out 43.8 percent. In the off-premises mix itself, Carside To-Go was 68 percent and delivery 32 percent.

Applebee’s online sales as a percentage of total take increased by 17.8 percentage points in Q2 to 22.9 percent. That compared to 5.1 percent in the first quarter of the year.

On the IHOP side, off-premises leapt to 53.6 percent of mix compared to 12.8 percent in Q1 and 10.1 percent in Q4 2019. Delivery contributed 23.4 percent and takeout 33.5 percent. IHOPs online sales as a percentage hiked 27.8 percentage points to 34.7 percent. In Q4 2020, it was only 6.9 percent.

And as of June 30, 3,154 of Dine Brand’s domestic locations (95 percent) were open for either dine-in service or off-premises. It started the quarter at 82 percent.

CFO Tom Song said reopening with enhanced sanitation standards has run each restaurant about $3,000. The ongoing costs add up to $1,000 per week.

Focusing on Applebee’s, the brand headed into the pandemic riding 10 consecutive weeks of positive sales, including a 3.2 percent comp sales increase through March 8. At the onset, it closed 250 restaurants and pivoted to off-premises, which triggered the 70 percent-plus drop in April.

In addition to losing its dine-in business (85 percent of sales pre-virus), Cywinski said Applebee’s took a self-imposed hit by discontinuing national marketing on March 18. It went on a media hiatus across almost all of Q2 so it could replenish its ad fund and wait “for the right time to reintroduce Applebee’s to America,” he said.

Today, 1,600, or 97 percent, of Applebee’s are open. The remaining 65 are a combination of temporary and permanent closures, Cywinski said.

Of those 1,600, roughly 1,450 are fully operational with open dining rooms. Applebee’s returned to national marketing in response, launching a fresh plan in mid-June that broadened in early July. It focuses on dining room reopenings and off-premises messaging, as seen below.

Average weekly sales have improved to about $39,000, with 64 percent coming from dine-in business.  

Cywinski said Applebee’s appears to be holding most of its off-premises business upon reopening. There’s been a 15–20 percent cannibalization rate.

Like its sister brand, IHOP discontinued marketing. But it did so late in Q2 and did not use national media through the first three weeks of July, outside of some basic local marketing and a brief off-premises push, brand president Jay Johns said. It started a new national campaign on July 22.

IHOP has faced a more challenging road due to its daypart focus. While the company’s overall sales improvement from April to June was fairly even across all segments, breakfast lagged behind lunch and dinner by about 200 basis points, Johns said. Per NPD, it’s the daypart facing the steepest transaction declines as work routines are disrupted.

IHOP was able to offset some of the loss by lifting off-premises comp sales 145 percent in Q2, primarily driven by traffic.

As of June 30, 92 percent of IHOP’s domestic system was open, of which 88 percent had in-restaurant dining. By July 27, 1,565 U.S. units (92 percent) were open for dine-in or off-premises business. The in-restaurant number has fallen back to 1,320 thanks mainly to California’s decision to suspend indoor dining.

But like Joyce’s sentiments, Johns believes IHOP can surge on the other side. “Undoubtedly, the coronavirus is having a profound impact on our industry,” Johns said. “As a result, a significant number of independent restaurants are not expected to survive as Steve mentioned earlier. This scenario actually provides an opportunity for IHOP to increase its market share as some independents close their doors permanently and IHOP continues to grow through traditional and nontraditional development.”

IHOP franchisees opened 13 restaurants in the first half of the year.

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Categories: Restaurants

The $4 Million Question Facing The Cheesecake Factory

Restaurant Management - Thu, 07/30/2020 - 11:10
The $4 Million Question Facing The Cheesecake Factory danny Thu, 07/30/2020 - 11:10

Can the casual leader continue to soar outside the four walls? Time will tell.

July 2020

The rise of COVID cases is out of the Cheesecake Factory’s control.

The same is true for decisions by state and local governments and the federal government’s stimulus package response.

So as reopening plans are reversed and capacity limits are shifted, what does remain under Cheesecake’s direction? CFO Matthew Clark said it’s building the off-premises channel, an area in which the brand has thrived throughout the pandemic.

Quarter-to-date, the channel mixes 50 percent. Since reopenings began in mid-May, Cheesecake has held 90 percent of the growth it’s seen in off-premises sales.

At the 146 restaurants that have indoor dining, sales are at 80 percent of prior-year levels, driven by the strength of off-premises. That’s equal to more than $8 million per unit on an annualized basis—even with 50 percent capacity restrictions. Thirty-six stores are serving outdoor diners. In those instances, Cheesecake has expanded patio seating in partnership with landlords and has seen off-premises accelerate. At the 22 units performing off-premises only, weekly sales equate to $4.2 million per unit on an annualized basis.

Quarter-to-date, the brand is down 32 percent.

“The off-premise business we think is going to be sticky,” president David Gordon said during the brand’s Q2 earnings call. “So, as restrictions continue to lift, not just in those 50 percent capacity, but in the 25 percent moving to 50 percent, and who knows when we could even get to 75 percent dining rooms reopen again, we think we'll be able to keep a decent percentage of the off-premise sales, be able to handle that capacity, and get back to where we were before in the dining rooms with the waits on the weekends and even the waits during the week.”

Clark said the demographics of dine-in and off-premises customers is similar. The brand tends to skew toward educated, affluent, and tech savvy guests, which is about the same across all sales channels.

As for how much of the off-premises growth will remain in a post-pandemic world, Clark said that’s the $4.2 million question.

“I think we were pleasantly surprised at the levels that we're maintaining right now, but I think it's very difficult to know where exactly that will land,” Clark said. “I think that you will see the guest behavior does get permanently modified after periods of three to six months out. So, it's good to be elevated. It's just a matter of where it lands.”

Cheesecake said its off-premises performance has been supported by marketing campaigns, including the 4th of July Burger—an item that resonated with new and existing consumers. The promotion was covered in more than 120 media outlets and generated more than four billion media impressions. The response was so overwhelming, that the brand had to reduce the duration of the offer because demand exceeded supply levels.

Most of those sales from the promotion came through online ordering, which has eclipsed delivery in terms of volume. Online comprises 40 percent of off-premise sales while delivery contributes 35 percent.

Cheesecake has also built North Italia’s off-premises business, which was in its infancy prior to its acquisition in the fall of 2019. The company leveraged its relationship with DoorDash and launched an online ordering platform utilizing the same technology used at the Cheesecake Factory. Off-premises now represents more than 30 percent of North’s sales. The Fox Restaurant Concepts have seen strong contributions from off-premises, as well.

“We know that what's in our control—to continue to drive some of the off-premise business. I mean the fact that with those open dining rooms we're keeping 90 percent of our elevated COVID off-premise sales I think is a testament to how we've always talked about the quality and the value of Cheesecake Factory off-premise,” Clark said. “And I think guests are seeing that, and we have really been developing innovative new ways to market that, and I think we can continue to do it. So I think that also that channel will be something that we can continue to grow, and whether that's through our own online ordering or delivery or even guests still calling in the old fashioned way, we're happy to do that.”

Comp sales dropped 56.9 percent in Q2. Through the first and second quarter, same-store sales have declined 35.9 percent. The brand improved from a 66 percent plummet in April to a decrease of 42 percent in June. Total revenue at Cheesecake restaurants dropped from $551.5 million in 2019 to $241.1 million this year, or a 56 percent slide. North Italia’s comps declined 59 percent in the quarter.

At the 33 Cheesecake locations opened at 50 percent for the full month of June, sales were at 87 percent of prior year levels, with a nearly flat margin of 17.5 percent.

The company ended Q2 with 206 Cheesecake and 23 North Italia units. Including other concepts, the brand has a portfolio of 294 restaurants. Roughly 71 percent of the system has reopened dining rooms. About 16 percent have reopened outdoor seating in accordance with guidelines in California, Florida, and New Mexico. Sixteen stores, including one Cheesecake Factory unit in San Francisco, are temporarily closed.

Off-premises has supplemented pent-up demand from dine-in customers, with many locations seeing wait times from 20 to 60 minutes on the weekend. Despite capacity restrictions, the brand’s flexible seating layout has allowed it to recapture meaningful sales levels.

As capacity limits increase and off-premises remains strong, Cheesecake believes total sales could eventually rise above where they were before COVID.

“I'm incredibly proud of how nimble our teams have been, constantly adapting to whatever changes come their way,” Gordon said. "While there is little doubt that 2020 has been the toughest period that the restaurant industry has ever faced, I'm confident in our ability to continue to navigate through this dynamic landscape and we expect to emerge stronger on the other side of the pandemic.”

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Categories: Restaurants

Navigating the Coronavirus Crisis

Restaurant Management - Thu, 07/30/2020 - 07:11
Navigating the Coronavirus Crisis danny Thu, 07/30/2020 - 07:11

What you need to know to protect your employees, guests, and business as the coronavirus pandemic spreads across the globe.

March 2020

Stay up to date as the coronavirus pandemic spreads across the globe.

The week of June 29

How COVID-19 Will Impact Restaurant Design

The Digital Journey Evolves at Qdoba

The Future of Healthcare for Restaurant Franchise Owners

GFG Café Cuisine Continues Goal to Expand Greek Cuisine

Metro Diner Morphs into the Restaurant Brand of the Future

Restaurant Industry Added 1.5 Million Jobs in June

Congress Votes to Extend PPP Deadline by 8 Weeks

McDonald's Pauses Reopening as COVID Surges Nationwide

Outback Parent Reinstates CEO’s Salary as Sales Rebound

Complacency Has Become New Hurdle for Restaurants

What Should Restaurants Do if an Employee has COVID-19?

How COVID-19 Will Impact Restaurant Design

Grumpy’s Maintains ‘Traditional Americana’ Identity Amid Crisis

At Papa John’s, the Comeback is Just Beginning

Aurify Brands to Revive Over 40 Le Pain Quotidien Stores

How Mighty Quinn’s Barbeque is Gearing Up for Reopenings

COVID and Digital Ordering: What Have We Learned?

Four Months Into COVID: More Uncertainty than Ever for Restaurants

When Restaurants Go Rogue with COVID Regulations

Pie Five Shutters Another 10 Restaurants

9 Ways Restaurants Can Mitigate COVID-19 Risks and Keep Guests Safe

Burger King Gets Back to Pre-COVID Sales

9 Ways Restaurants Can Mitigate COVID-19 Risks and Keep Guests Safe

The week of June 22

Three Twisted Root Burger Units File for Bankruptcy

Consumer Interest in Dining Out is Returning to Pre-Pandemic Levels

Chili's Owner Launches Virtual Wings Concept

Why the Current Market is Ripe for Franchise Growth

Why the Pandemic Could Turn Darden Into an Even Bigger Juggernaut

Darden Invested $75 Million in its Employees During COVID Crisis

Court Orders McDonald’s to Provide Better COVID Protection

It Will Take Years for the Restaurant Industry to Recover

How Panda Express is Taking Charge of Delivery

Restaurants are Saying Goodbye to Third-Party Delivery Apps

How Fast-Food Brands Can Build Emotional Loyalty Amid COVID-19

PizzaRev Down to 13 Locations After Round of Closures

Surge in COVID Cases Hasn’t Slowed Restaurants So Far

Blaze Pizza Rises to the Pandemic Challenge

Out of Bankruptcy, Brio, Bravo Seek Return to ‘Old Glory’

Sales at Ruth’s Chris Continue to Rebound as Dine-in Returns

Want to Restructure Your Restaurant Lease? You’re Not Alone

Main Event Reopens as a Redefined, Galvanized Brand

Reopening a Restaurant Can Be Risky Business

How Casual Dining Will Survive the COVID-19 Crisis

Can On-Demand Pay Help Rebuild the Restaurant Workforce?

Communication Leads Franchisees through Crisis Times

The Week of June 15

To Reopen or Not? Restaurants Face a Make-or-Break Moment

Why Chipotle has ‘Home Run’ Potential After COVID-19

Zinburger Permanently Shutters 15 of 18 Restaurants Due to COVID

Noodles & Company Keeps Eyes on Off-Premises as Sales Rise

Restaurants, Don’t let a Grubhub Horror Story Ruin Your CX

Why Restaurants Need to Diversify Away from Delivery Marketplaces

Over 45 Million Have Filed Initial Unemployment Claims

Popeyes, the Pandemic Proof Fast-Food Chain

Contactless Carryout Isn't Going Anywhere

Why the Restaurant Event Business Will Make a Comeback

Wayback President on Staying Safe, No Matter Your State’s Status

How Do You Prove Your Restaurant is a Safe Environment?

Denny’s Off-Premises Sales Stick as Dining Rooms Reopen

Why Coronavirus Will Spark a Fast-Food Takeover

Eggs Up Grill CEO Looks at the Sunny Side

Full-Service Restaurants Embrace Off-Premises Menu Innovation

Mighty Quinn’s is Ready for the Post-Pandemic Landscape

Breaking the Dependency on Delivery Apps

Post-Coronavirus: A Changed Restaurant Customer with New Expectations

Restaurant Industry Has Already Lost $120 Billion

Imagining the Restaurant Industry After COVID-19

How Marketing is Changing for Quick-Service Restaurants

What the Restaurant World Will Look Like After Coronavirus

The Week of June 8

Dave & Buster’s Takes $43 Million Virus Hit, Looks to Future

Restaurants Must Adapt Key Performance Indicators During COVID-19

Church's Chicken Innovates the Post-Pandemic Workplace

The Recovery is in Full Swing at Bloomin’ Brands

BJ’s Continues to Rebound as Dining Rooms Reopen

TripAdvisor Study: Restaurants Lead in Recovery

Red Robin is Prepared to Accelerate its Reopening Strategy

Emerging Franchise Revs Up Growth Despite Pandemic

5 Tips for Protecting Your Restaurant’s Online Reputation During Reopening

Influencer Marketing and COVID-19: Can it Reinforce Customer Trust?

J. Alexander's was Nearly Sold Before the Pandemic

Report: 85 Percent of Independent Restaurants Could Close Without Direct Aid

COVID-19 Accelerates the Transformation of Starbucks

Yum! Sales Gain Momentum, Set New Heights

Shake Up Your Takeout Menu with Convenient and Unique Cocktails

Health and Wellness Brands Find their COVID-19 Purpose

Chili’s is Outpacing its Casual-Dining Competitors

Wendy’s Solves Beef Supply Problems as Sales Bounce Back

4 Guidelines for Managing Restaurant Workers in a ‘New Normal’

Dunkin’ Wants to Help America Get Back to Work

When’s the Right Time to Reopen Your Restaurant?

What to Know about Claiming Insurance after Riot Damage

Everything Restaurants Need to Survive the COVID-19 Crisis

The Week of June 1

Chef Daniel Boulud Embraces Off-Premises

How to Ace Third-Party Delivery in a Pandemic

5 Top Dining-Out Trends for a Post-Pandemic Society

Restaurant Industry Gained 1.4 Million Jobs in May

Huddle House CEO: Ghost Kitchens to Rise as Brick and Mortar Fades

Why Brand Identity Has Never Been More Important for Restaurants

Geofencing Can Minimize Face-to-Face Interactions in Restaurants

Ruth’s Chris is Getting Back to Business

A Coronavirus Opportunity for Restaurants: Off-Peak Hours

Potbelly’s Sales Improve as Permanent Closures Loom

Senate Passes Sweeping Paycheck Protection Program Reform

HopCat Parent Files for Bankruptcy as COVID-19 'Put it Over the Edge'

Dunkin’s Sales Increase, Shift from Breakfast Daypart

Creating a COVID-19 Restaurant Playbook: Where to Begin

Protests Shut Down Dozens of Cheesecake Factory Restaurants

At Cracker Barrel, Guests are Coming Back and So are Sales

When Will Americans be Ready to Dine-In Again?

3 Ways Restaurants Create Customer Engagement During COVID-19 

Dealing with Your Lease Agreement (and Landlord) During a Pandemic

Reopening 101 for Restaurants: Divide Customers into Three Main Groups

Red Robin's COVID-19 Response Goes All-In on Customer Experience

In a Touchless World, 3D Cameras Will Make Restaurants Safer

How Has COVID Exposed the Restaurant Industry?

Chuy’s Opens Nearly All of its Dining Rooms

6 Ways Tech Can Improve Food Safety in a COVID-19 World

The Week of May 25

When Lockdowns End, Which Restaurant Changes Will Remain?

A CEO’s 5 Takeaways on What Works Post-Pandemic

The Impact of COVID-19 on Employer Policies and Operations

COVID-19 Sends East Coast Wings + Grill on a ‘Super-Regional’ Path

Popeyes and its Chicken Sandwich are Still Soaring

How to Manage Leases and Landlords in Uncertain Times

5 Factors That Can Affect Your Restaurant’s Reopening

Simplification in the COVID-19 Era: What it Means for Restaurants and Suppliers

Delivery and Online Ordering Partnerships are Essential Right Now

Domino's is Thriving During Uncertain Times

Papa John’s Continues to Reach Unprecedented Sales

Can Family Meals Bridge the COVID-19 Gap for Restaurants?

Chili’s is Coming Back to Life, and its Culture is to Thank

Is COVID-19 Going to Accelerate the Ghost Kitchen Craze?

How Bareburger Took Back the Digital Experience

Sales are Up 20 Percent, But Marco’s Isn’t Sitting Back

Data-Driven Decisions Will Help Restaurants Navigate COVID-19 Recovery

Reopening Considerations for Restaurants and Bars

The Week of May 18

Why First Watch Will Reemerge an Even Better Restaurant Chain

Chuy's Has Reopened 70 Percent of its Dining Rooms

How Restaurants Should Communicate Reopening with Customers

COVID-19 Will Inspire a Dunkin’ 2.0

Fortress to Acquire Craftworks for $93 million

Reopenings Provide Some COVID-19 Hope, Especially for Casual Dining

Taco Bell to Hire 30,000 People in Coming Months

Welcome to a New Era of Customer Appreciation for Restaurants

Millions File Unemployment Claims for 9th Straight Week

Starbucks Accelerates Plan to Relocate, Transform Low-Performing Stores

How Jack in the Box Adapted Its Messaging to Stay Relevant

Steps to Sharpen Safety Focus as Restaurants Reopen

Could COVID-19 Create Opportunities in the Food Supply Chain?

Subway Lays Off 150 Employees

Restaurateurs, Trump Administration Talk Industry Concerns

Chuck E. Cheese Uses New Name on Third-Party Platform

Famous Dave's Stays Nimble in Face of COVID-19

Still Trying to Decipher the Paycheck Protection Program

Darden Inches Closer to Life as Normal

Operating Restaurants in a COVID-19 Environment

7 Ways to Take Down the Third-Party Marketplace

Better Culture, Better Plan, Better Papa John’s?

Don’t Let Mosquitoes Ruin Patio Reopenings

Reopening? Here are 4 Ways Restaurateurs Can Reset the Table

What the COVID-19 Future Holds for Emerging Restaurant Chains

Specialty's Café & Bakery to Permanently Close 

Former College Football Star Joins Toppers Pizza as Co-Franchisee

The week of May 11

49-Unit IHOP Franchisee Files for Bankruptcy

Restaurants’ Greatest Competition Post COVID-19: Home-Cooked Meals

A Program Geared to Help Restaurants’ Main Street

Denny's Reopens 500-Plus Restaurants, Sees Sales Bump

Garden Fresh Restaurants Declares Chapter 7 Bankruptcy

Pandemic has Redefined Value for Jack in the Box

NYC Puts a Cap on Third-Party Delivery Fees

Bankrupt Krystal Agrees to $48 Million Deal with Fortress Investment Group

Will Employees Actually Return to Restaurants?

Does the Stimulus Help Restaurants?

McDonald’s to Boost Recovery with Significant Marketing Investment

COVID-19, and the 4 New Paradigms of Guest Perception

Customers Will Support Restaurants Again

Restaurants Take Heed: Uber Eats May Soon Own Your Relationship with Customers

How Restaurants Will Satisfy America’s Post-Pandemic Appetite

Where Technology Fits in the COVID-19 Response for Restaurants

Democrats Push for Restaurant-Focused PPP Changes in New Package

Planning to Reopen Your Restaurant? Here’s What an Expert Would Do

Georgia Restaurants See a Sales Spike from Reopenings

Bamboo Sushi Parent Files for Bankruptcy

Uber Seeking to Acquire Grubhub: Report

Does Restaurant Business Insurance Cover COVID-19 Claims?

What’s Wrong with the Food Supply Chain? It’s Not Supply

Hooters Shares Reopening Safety Measures

How Burger King Plans to Keep Guests, Employees Safe as it Reopens

Buffalo Wild Wings Unveils To-Go Only Concept in Atlanta

Ruth's Chris Prepares to Reopen Dining Rooms as Sales Slide 83.5 Percent

Steak ’n Shake Permanently Closes 51 Company Stores

The week of May 4

April: A Month Like No Other for Restaurants

After COVID-19, Prepare for the Breakfast Wars

BJ’s Seeks to Maintain Off-Premises Growth as Dining Rooms Reopen

April Unemployment Rate Highest Since Great Depression

What the Restaurant of the Future Will Look Like After COVID-19

What the Future Holds for the Coffee Industry Post COVID-19

The Mindset of a Restaurateur in a Time of Crisis

Tips for Creating a Full-Service Experience at Home

McDonald’s to Reward Company Employees with Bonuses

Noodles & Company Turns the COVID-19 Corner

Legal Issues to Consider as Restaurant Employees Return to Work

An Early Look at How Reopened Restaurants are Faring

Your Best Innovators Right Now Could Be Your Franchisees

Unemployment Claims Above 3 Million for Seventh Straight Week

4 Ways to Optimize Your Restaurant’s Onsite Content During COVID-19

What's the Deal with Wendy's Beef Supply?

Digital, Delivery Boost Wingstop’s Sales Beyond Expectation

Zaxby’s COVID-19 Response: Keep it Real

Papa John’s Sees Highest Sales Month in Company’s History

Cheesecake Factory is Taking a Deliberate Approach to Reopening Restaurants

How Biggby Coffee Wrote a New Chapter in Change

Starbucks: 85 Percent of Corporate Stores to Open by Week’s End

Bloomin’ Brands Gets a Jolt of COVID-19 Recovery Hope

Shake Shack Turns to Pickup Windows in Pandemic Squeeze

New PPP Guidance: Restaurants Won’t be Penalized if Employees Reject Job Offer

3 Ways Restaurants Will Adapt to a Post-COVID World

How Restaurants Can Tell their Story During COVID-19, and Why it Matters

Qdoba Sees a Bump During COVID-19 Pandemic

Texas Roadhouse’s To-Go Sales are Up 575 Percent

How COVID-19 has Changed the Off-Premises Game Forever

Dave & Buster’s Strikes $100 Million Agreement with Jefferies

Coronavirus Crisis No Match for Popeyes’ Chicken Sandwich

What Customers Want from Restaurants as They Reopen

Denny’s Sales Dropped 76 Percent in April

Pandemic or Not, Dave’s Hot Chicken is Growing

5 Ways to Serve Gluten-Free Customers During COVID-19

Subway Franchisee Delivers 5,000 Sandwiches to the Frontlines

Casual Dining Looks to Fast Food for Survival Tactics

How to Take Care of Restaurant Staff Through the COVID-19 Crisis

The week of April 27

BJ’s Inks $70 Million Deal with Panera Bread Founder Ron Shaich

It’s Not Restaurants Customers Fear. It’s Other People

Restaurant Sales are Improving, but it’s a Complicated Landscape

Dunkin’ Adds Curbside Pickup, Doubles Delivery Footprint

11 Tips to Improve Your Restaurant's Cyber Security in the COVID-19 Era

Expert Tips to Grow Restaurant Sales During a Pandemic

Will the ‘Ghost Kitchen’ Trend Continue During and After COVID-19?

Cracker Barrel Reopens Dining Rooms in Georgia and Tennessee

McDonald’s CEO: People Will Return to Familiar Brands

TooJay’s Declares Bankruptcy as 'Direct Result' of COVID-19

Chili’s CEO: ‘No One Will Get More Out of a Half a Dining Room’ Than Us

Why Schlotzksy's is Holding Off Reopening Dining Rooms in Georgia

Applebee's Could Soon Have 200 Dining Rooms Open

Unemployment Filings Surpass 30 Million in Six Weeks

Restaurants and Workers During COVID-19: How to Avoid a Bitter Divorce

Fazoli's CEO: Even as Restaurants Reopen, Delivery and Carryout are Staying

At One Point During COVID-19, Yum! Had 11,000 Closed Restaurants

José Andrés: Restaurants We Love are on 'Brink of Extinction'

Buffalo Wings & Rings Responded Quickly to COVID-19

Portillo's Has Doubled Down on Drive-Thru and Delivery, and It's Working

How COVID-19 is Changing the Restaurant Industry

COVID-19 Has Cost Starbucks $915 Million So Far

15 Chick-fil-A Employees in Texas Test Positive for COVID-19

FAT Brands Appears Primed for a Buying Spree

As Restaurants Start to Reopen, the Challenge to Rehire Employees Begins

Habit Grill Evolves at ‘Warp Speed’ During Pandemic

COVID-19 for Restaurants: What’s Working and What Will Become Part of the New Normal

Keeping Track of States Reopening Dine-In Service

Will Foodies Save the Restaurant Industry?

Are Customers Ready for Restaurants to Reopen?

Commander’s Palace, and the ‘Spirit of Hospitality’ After COVID-19

Moe’s Stays Nimble During COVID-19 Response

Will Restaurant POS Vendors Survive the Domino Effect of COVID-19?

The Opportunity of Innovative Pandemic Packaging

Potbelly Decides to Give Back $10 Million PPP Loan

Everything You Need to Know Before Reopening Your Restaurant

The week of April 20

Raising Cane’s Avoids Layoffs as Sales Return to Pre-COVID-19

How Edible Pivoted to Serve Customers During COVID-19

Trump Signs Law that Adds $310 Billion to PPP

BJ’s Prepares to Reopen Once Officials Give Permission

Domino’s is Already Building for a ‘New Normal’

Ruth’s Chris to Return $20 Million in PPP Loans

Sweetgreen to Give Back $10 Million PPP Loan

Can Mobile Apps Bring Customers Back to Restaurants?

Stimulus Checks Appear to Give Restaurants a Boost

Unemployment Claims Reach 26 million in Five Weeks

How to Do Well by Doing Good in Midst of Crisis

10 Reasons Why Curbside Pickup is the Next Big Thing

What Restaurants Need to Consider as America Reboots

Senate to Inject $310 Billion Into Paycheck Protection Program

5 Innovative Ways Restaurants Can Drive Sales During COVID-19

How COVID-19 Could Change Chipotle as We Know It

Trust Will Mean Everything to Restaurants After COVID-19

Chuy’s Furloughs 80 Percent of Hourly Staff

Tropical Smoothie Cafe Puts Franchisees, Community First During Crisis

How Customers are Interacting with Fast Food in COVID-19 Era

The Importance of Restaurant Pest Control During COVID-19

Georgia to Reopen Restaurant Dining Rooms on April 27

Restaurant Industry Has Lost Two-Thirds of Workforce

Darden is Making Progress in COVID-19 Sales Recovery

Could COVID-19 Usher in a Golden Era for Pizza?

BJ’s Furloughs 200 Managers, 40 Support Center Employees

Restaurants May Never be the Same. But Could They be Better?

Fast Casual Leader: Follow These 4 Tips to Outlast COVID-19

Cheesecake Factory Inks $200 Million Investment with Roark Capital

Subway Franchisees Launch Subway Marketplace

Shake Shack Returns its $10 Million PPP Loan

The week of April 13

Cameron Mitchell’s Solutions to the Paycheck Protection Problem

How a Subway Franchisee is Helping Feed Thousands of Healthcare Workers

How to Ensure Meaningful Experiences When Dining Rooms Reopen

Shake Shack Gets $10 Million PPP Loan, Looks to Sell Shares

Trump Releases Plan for Reopening States

80 Percent of Independent Restaurants Aren’t Sure They’ll Survive

Starbucks to Reopen 'as Many Stores as We Can' in May

When COVID-19 Ends, Here’s How Restaurants Will Win

What Restaurants Can Do Now—and What They Should Do When It’s Time to Reopen

SBA's Relief Fund Runs Out of Money

22 Million File for Unemployment in Four Weeks

Franchise Disclosure Document State Extensions

Nearly All Jack in the Box Restaurants Remain Open

Outback Parent Hasn’t Laid Off or Furloughed Any Employees Due to COVID-19

Noodles' Sales Slid Almost 50 Percent During Early Weeks of Pandemic

Restaurants Join National Plan to Reopen Economy

The COVID-19 Bottom is Probably Behind Restaurants

Tensions Run High Between Restaurants, Delivery Apps in Pandemic

Mobile Gains Even More Importance During COVID-19

Adapting to the New Restaurant 'Norm'

Tip Pools in the Era of COVID-19 and Takeout-Only Operations

Your Favorite Restaurant Dishes, Now Available in the Deli Aisle

2020 Future of Fast Casual Report

Sardar Biglari Calls Cracker Barrel's Punch Bowl Move 'Panic Exit’

Red Robin Temporarily Closes 35 Locations, Cuts Support Center Positions

Dave & Buster’s to Sell Up to $75 million in Shares

Why the Pandemic Could Create Investment Opportunities

Off-Premises Menu Innovation Has Never Been More Critical

Beef ‘O’ Brady’s CEO Looks to June for COVID-19 Breakthrough

The Enduring Legacy of Chef Floyd Cardoz

13 Things That Could Change for Restaurants After COVID-19

5 Benefits of Having a Kitchen Ordering System

8 Strategies to Succeed in the Post-Lockdown World

San Francisco implements 15 Percent Cap on Third-Party Delivery Fees

Cybersecurity Concerns Spike for Restaurants During COVID-19

FirstFood Global Declares Bankruptcy Amid COVID-19 Crisis

10 Top Takeout Innovations During Coronavirus

Post-COVID 19: The Pros and Cons of Location Takeovers

Week of April 6

First Watch Temporarily Closes All Company Locations

A Two-Week Period that Wreaked Havoc on Restaurants

Can Restaurants Fill the Supermarket Void?

Bar Rescue’s Jon Taffer: The Future of Restaurants Will Be Led by Trust

Are Grocery Stores Really Safer than Restaurants?

Texas Roadhouse’s Executive Team Donates Salaries to Hourly Employees

Fine Dining is Getting Slammed by COVID-19

Restaurants Warn Congress They Need More Funding

16 Million Have Filed for Unemployment in Three Weeks

FDA Temporarily Lifts Nutrition-Labeling Regulations for Restaurants

Trying to Make Sense of the Relief Loan Process

Starbucks was Preparing for the Coronavirus in February

El Pollo Loco Sees Slight Drop in First-Quarter Sales

McDonald’s to Cut $1 Billion in Spending as COVID-19 Derails Sales

Restaurants Fight for a Slice of the Spending Pie

White House Asks Congress for Additional $250 Billion to Aid Small Businesses

Starbucks to Provide Direct Relief Grants to Employees

Panera Launches Grocery Service Nationwide Out of Restaurants

The End of the Tunnel: 5 Steps for Getting Past COVID-19

Tilman Fertitta Taking Bold Steps to Keep Landry's Afloat

Wingstop Keeps Momentum Going Despite COVID-19

MTY Food Group Closes 2,100 Stores, Cuts Workforce in Half

Temporarily Closing Your Restaurant Due to COVID-19? Here’s a Checklist

A Restaurant's Guide to No-Contact Delivery

Denny’s Execs Take Pay Cuts as Sales Fall Due to COVID-19

Darden CEO: COVID-19 Challenges 'Far from Over’

Chick-fil-A Adding Handwashing Stations to Drive Thrus

'Extraordinary' Conditions Sink TGI Fridays' $380M Sale

BJ’s Restaurants Lays Off 16,000, Opts Not to Pay Rent

Independent Restaurants: Relief Bill is ‘Small Step on a Giant Staircase’

Have Restaurant Sales Bottomed Out?

How Food Halls Adapt to Social Distancing (podcast)

Psychologist: Restaurants Should Trust Experience to Navigate Pandemic 

How Checkers & Rally's New CEO Quickly Faced the COVID-19 Crisis

Foodservice Cleaning and Hygiene in the Age of COVID-19

3 Ways Restaurants Can Weather COVID-19 with Conversational AI

Why the CARES Act Shortchanges Restaurants

Week of March 30

Restaurants are Worried COVID-19 Could Break Them

Life as a Restaurant IT Director During COVID-19

How the Restaurant Industry is Responding to COVID-19

Food Halls and Trucks Feel the COVID-19 Burn

March Sales Drop 46 Percent at The Cheesecake Factory

Bloomin’ Brands CEO Forgoes Salary to Aid Employees

Dave & Buster's Considers Selling Stake as Stores Shut Down

Starbucks to Keep Stores Closed Until May 3

Restaurants Will Help America Return to a Sense of Normalcy

For Restaurants, Transparent and Consistent Communication is Key to Navigating COVID-19

Brinker CEO Cuts Salary in Half as Sales Fall, Delivery Rises

Popeyes' Sales Were Surging in Q1

Wendy’s to Give Employees at Corporate Stores 10 Percent Boost

A 10-Point Plan for Restaurant Employers During COVID-19 Crisis

McDonald’s to Check Employees’ Health Before Work

How an Award-Winning Restaurateur Keeps Guests Engaged During COVID-19

Full-Service Restaurant Spend Falls Below 5 Percent, Report Says

Contactless Ordering, and Other Tips to Navigate COVID-19

CraftWorks Fires Nearly All Its Employees

Red Robin Postpones Rollout of Donatos Pizza

Trying to Picture Life for Restaurants After COVID-19

Can the Paycheck Protection Program Help Your Restaurant?

How One Brand Raised $40K in the Midst of COVID-19

Insurers, Restaurants Ready to Wage War Over Policies 

Front Burner’s Furlough Kitchen is the Revolution Restaurants Need

Guy Fieri Partners with NRAEF to Help Restaurant Workers

Papa John’s Sees Steady Sales Amid COVID-19 Outbreak

How Restaurants Can Collaborate With Landlords to Secure Rent Relief

Great American Takeout 2: Back and Bigger Than Last Week

Domino’s Reports Positive Sales During Pandemic

Burger King Parent Advances Cash to Franchisees, Defers Rent

Who’s Growing During the Coronavirus Crisis? Pizza Chains

One Key Strategy for Life After Coronavirus (podcast)

Has COVID-19 Ended the ‘Live-to-Eat Society?’

5 Proven Restaurant Tactics During COVID-19

What Does the Stimulus Package Mean for Restaurants?

For Restaurants, there’s a Big Problem with the Stimulus Package

Ruth’s, Chuy’s Furlough Significant Amount of Employees

Yum! CEO Donates Salary to Employees

Trump Considers Restoring Full Corporate Tax Deduction for Meals

Week of March 23

Restaurant Catering in the Coronavirus Age

Switching to Takeout and Delivery Only? Here are 7 Critical Things to Know

House Passes $2 Trillion Stimulus Package

10 Perseverance Tips During COVID-19

Wow Bao Launches First-of-Its-Kind Off-Premises Strategy

The ONE Group Goes from 4,000 Employees to Under 100

Navigating Unprecedented Times: 5 Ways to Boost Your Restaurant’s Mobile App

The Cheesecake Factory Furloughs 41,000 Workers

Bankruptcy Cases Expected to Rise Significantly Due to Coronavirus Pandemic

COVID-19 Considerations for Restaurant Franchise Systems

Small-Town Restaurant Life During the Coronavirus Crisis

Communication Key to Cousins CEO in Time of Crisis (podcast)

The First 22 Days of March: Restaurants Have Lost $25 Billion

McDonald’s Suspends All-Day Breakfast Menu

Record-Breaking 3.28 Million File for Unemployment

Cheesecake Factory Says It Won’t Pay Rent

5 Strategies for Restaurant Survival to Implement Now 

$2 Trillion Economic Stimulus Plan Passes in Senate

Full-Service Restaurant Sales Drop 74 Percent in Five Days

Top Chef Masters Winner Floyd Cardoz Dies from COVID-19

Landry’s Furloughs 40,000 Employees

Coronavirus Hope No. 1 for Restaurants: Keep Staff Employed

Communicating About Coronavirus: 10 Ways Restaurants Should Engage

Yum! Brands Has 7,000 Restaurants Closed Globally

Punch Bowl Social Closes, Lays Off Majority of Employees

Texas Roadhouse CEO Gives Up Salary to Help Front-Line Employees

Massive $2 Trillion Stimulus Package Struck Early Wednesday

Can Kiosks Help Restaurants Stay Alive Through COVID-19?

Yelp: Consumer Interest for Restaurants Down 67 Percent

J. Alexander’s Furloughs 3,400 Workers Due to COVID-19

National Restaurant Association Cancels 2020 Show

Luby’s Closes 35 Units, Furloughs Most of Corporate Office

Tech CEO: We Feel for Restaurants Right now

Email Marketing During COVID-19: Is Your Brand Still on Autopilot?

Should Your Restaurant Add Third-Party Delivery, or Start its Own Network?

Here’s Where Restaurants and Workers Can Get Relief Funding During Coronavirus

Tips for Keeping the Lights On with Fazoli's CEO (podcast)

Grubhub CEO: 30 Percent of Restaurants Could Close

Fine-Dining Restaurants Adjust to a Brave New World

Restaurant Rescue Action Items for COVID-19

Frisch’s Adds Groceries to Help Guests During COVID-19 Crisis

When Delivery and Carryout Isn’t an Option for Restaurants

6 Ways Restaurants Can Drum Up Funds During the Coronavirus Pandemic

Financial Relief Isn't Coming Just Yet for Restaurants

Bankrupt CraftWorks Closes 261 Restaurants, Furloughs Most of 18,000 Employees

McDonald’s to Shutter All U.K. Restaurants

Starbucks Shuts Cafes Nationwide for at Least Two Weeks

Week of March 16

Chinese Restaurants Feel the Pain of the Coronavirus Pandemic

The Rush Away From Restaurants Continues

Adjusting Your Service Model on the Fly (podcast)

Casual-Dining Brands Bolster Cash Reserves in Uncertain Financial Future

Darden CEO Not Taking Salary as Company Braces for COVID-19 Impact

Where is All the Restaurant Traffic Going?

How Firehouse Subs' CEO Navigates Coronavirus (podcast)

This LA Fast Casual is Working to Stop Hunger

Trump Signs Law Granting Sick Leave for Employees

Eatertainment Venues See Huge Losses Amid COVID-19 Pandemic

Cameron Mitchell Ceases Operations, Furloughs 4,500 Employees

Is Your Restaurant Liable if Workers Test Positive for COVID-19?

Critical Planning and Communication for Restaurants Today

Inside the Chicago Restaurant World's Fight to Survive a Pandemic

One Restaurant’s Survival Idea? Become a Grocer

José Andrés’ Restaurants Transform into Community Kitchens

Nearly 30 Percent of People are Afraid to Eat Out

Danny Meyer’s Union Square Hospitality Group Lays Off 2,000 Workers

Economist: COVID-19 Presents Different Threat than Great Recession

National Restaurant Association Expects $225B Impact, 5–7M Jobs Lost from COVID-19

New York Eases Alcohol Delivery Law Amid COVID-19 Crisis

Amid Outbreak, Some Brands Rush to Support Employees

DoorDash to Temporarily Waive, Reduce Commission Fees

Report: 85 Percent of Upscale Restaurants Feel Traffic Hit from Coronavirus

A COVID-19 Cure for Restaurants: Reaching Older Diners

Trump: Don't Dine at Restaurants

McDonald's, Dunkin', Wendy's End Dine-In Service to Slow COVID-19

Uber Eats to Stop Delivery Fees for 100,000 Independent Restaurants

Restaurants to Offer ‘Dining Bonds’ to Lift Income

Where Fast Food Fits in the Coronavirus Crisis

Reports Differ on Possible Nationwide Curfew

Responding to COVID-19: Fast Food Focuses on Drive Thru, Pickup

Shake Shack's Dining Rooms Close Amid Coronavirus Spread

Why a Takeout-and-Delivery-Only Model Could Save Your Restaurant

Chick-fil-A Temporarily Shutters Dining Areas

Officials Across Country Close Restaurants, Bars

Coronavirus Crisis Communications for Restaurants: A Checklist

Starbucks Closes Seating in Favor of To-Go Model

The week of March 9

Golden Corral Employees are Washing Hands Every 20 Minutes

Grubhub Suspends Commission Payments to Help Independents

New York Cuts Capacity for Restaurants as Coronavirus Concerns Mount

What Customers Think About Restaurants and Coronavirus

Which Brands are Getting Hit the Hardest by the Coronavirus? Full-Service Spots

Why February was the Lull Before the Coronavirus Storm

Starbucks Expands 'Catastrophe Pay' for Coronavirus Care

McDonald’s to pay Quarantined Employees at U.S. Corporate Stores

Starbucks to Feel $400M Impact from Coronavirus

Darden Now Offering Paid Sick Leave for Employees

Here’s How Your Brand Should Prepare for COVID-19

Resources

Keeping Track of States Shutting Down Dine-In Service

The National Restaurant Association's Coronavirus Information Page

CDC's Interim Guidance for Businesses and Employers

World Health Organization on How to Get Your Workplace Ready

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Categories: Restaurants

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