Executive Connections Newsletter: Issue 51, JUNE 2004
| DICK'S EDITORIAL
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There has been a surge in the searches over the last several months. Companies are taking stock of their people and the businesses and preparing for growth.
The searches are across the board, i.e., Sr. VP of Development, a number of senior level Franchising positions, and Marketing. Companies are upgrading their existing training departments. Research and development is expanding to reposition the concept and menus. Many operational changes have taken place and are still in the works at all levels from CEO, COO to all levels down the line.
The restaurant business is growing but food costs are rising at astronomical rates (for example, butter is up 45%, milk, 75%). These costs have to be absorbed or passed on in some way to the customer. The big question is how high can you raise your prices without losing your customer base. High gasoline prices could also cut into disposable income and sales growth.
These are all situations that have to be addressed, as the food service moves in to the 500 billion range.
Regards,
Dick Wray, CEO
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| SAMPLING OF CURRENT ENGAGEMENTS
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1. VP Marketing, Family Dining Chain 2. Director/VP Operations, Family Dining Chain 3. Vice President of Franchise Development, Regional QSR 4. Director of Training, QSR Southeast 5. Regional Ops Directors, Casual Dining, Mid Atlantic 6. Director/VP Franchising, QSR Southeast 7. VP Food & Beverage National Club Mgmt Co., Southwest 8. District Managers, Area Directors, Quick Casual, Mid Atlantic 9. Purchasing Manager, National QSR, Southeast 10. Area Director, Casual Dining, New England
Referrals are the life-blood of our business. If you know of anyone who may be interested in one of these situations we would be happy to review their credentials.
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| RESUME TIPS
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By: Jim Weber, COO, Dick Wray & Consultants, Inc.
One page, two page, three pages, Oh my!
Which is best, a one page resume? Two Pages? Is three too many? Should the resume be the standard reverse chronological, or functional? Should I include an objective statement, or a career summary? So many decisions! One point is clear; all of the advice you have received that falls on one of these options to the exclusion of the others is most certainly incorrect.
We recommend that you look at your resume as if it were a portfolio. Components with different functions, which collectively best tell your story. For those of you with marketing backgrounds, think of in-store point of sale material. Each step toward the cash register presents a unique opportunity to give the customer a specific message. Another analogy is that of a book. The story is "Your Career". A book has a cover page, a table of contents, the main body, a conclusion, epilogue, and appendix. Tell them what you are going to tell them; tell them; and then tell them what you told them.
Work with the concept of your resume, your career story, as a book. Think of a one-page resume as your table of contents. A two or three-page resume, functional or reverse chronological, is the main body. A one page key results summary, also know as a Career Accomplishments Summary, is the conclusion. Your references are the appendix. This is the book of your career. Every one of these components, and maybe more, are needed to tell your story effectively. It is unlikely, however, that you will ever present all of these components together to anyone. Instead, each component has a specific purpose and delivery time.
The one-page resume is the teaser to get your foot in the door, and generate some interest. If more detail is requested, you will present a two or three page document. At this point, there is little concern on the reader's part as to whether you provide two or three pages. The reader has asked for more detail, so don't hold back. More years of experience will necessarily generate more pages of history. Save the Accomplishments Summary for the interview. I like to think of that document as a handout to guide the interview. If done correctly, this document becomes the agenda for the discussion. Remember the old adage, "the one who controls the agenda, controls the meeting." Give the interviewer a break. Help the interviewer let you tell your story. This document really tells the reader why you should be considered for the position in question. If your accomplishments best parallel the employer's needs, you get a leg up on the competition. The last document you should ever deliver, and only when requested of you, is your reference list.
In conclusion, your resume is not a single document. It is a collection of documents that tell your career story. Don't limit your story.
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| EXECUTIVE MOVEMENT
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BURTON "SKIP" SACK was elected as chairman of the NATIONAL RESTAURANT ASSOCIATION's board. Sack is chairman and partner of CLASSIC RESTAURANT CONCEPTS, which is based in Longboat Key, Fla. Also, Sack had served as executive vice president of Applebee's International. He was elected to the NRA's board in 1995 and is the immediate past vice chairman and past treasurer and for nine years was a voting member of the board. Joining Sack as officers for the 2004-2005 term are new NRA vice chairman CRAIG S. MILLER, president and CEO of Ruth's Chris Steak House in Metairie, La.; and NRA treasurer EDWARD R. TINSLEY, III, president and chief executive of Albuquerque, N.M.-based K-Bob's USA Inc. According to the company's proxy filing last month, CARL KARCHER, SR., resigned as a director from the company he founded, CKE RESTAURANTS. KENNETH KEYMER was named by POPEYES CHICKEN & BISCUITS as president, filling a post that had been vacant for more than a year. Keymer replaces Jon Luther, who left Popeyes in early 2003. Before resigning last year, he most recently worked at Noodles & Co. as co-CEO. Prior to that, he served as president/COO of Sonic. DARRYL"CHIP" WADE was appointed chief operating officer by LEGAL SEAFOODS. Most recently, he was senior vice president of development for Darden Restaurants' barbecue concept, Smokey Bones. Wade will be responsible for operations for the seafood chain's 30 restaurants as well as its mail order and catering businesses. CALVIN C. SMITH was hired as executive vice president of franchising for ULTIMATE FRANCHISE SYSTEMS INC., parent of the Jreck Subs and Gator's Dockside chains. Most recently, he was a consultant for Fuddruckers. UFSI is the franchisor of approximately 524 locations, also under the Central Park Hamburgers, Li'l Dino's Deli and Grille, NY Burrito, and Sobik's Subs names. DOUG HASSELO was hired by KFC as its chief food innovation officer, a position that previously was held by Denny Post, who left the company recently to join Burger King in a similar role. KFC said Hasselo would take up his duties mid June. KIM LOPDRUP was named president of the Red Lobster chain by DARDEN RESTAURANTS INC., based in Orlando, Fla., replacing RICHARD RIVERA, who resigned in January following months of declining sales at the 1,300-unit chain. Lopdrup had been executive vice president of marketing for Red Lobster since 2003, and before that was North America chief operating officer for Burger King. According to Lodrup, Red Lobster has made critical missteps in relating to its target audience of Middle America and did not provide specifics beyond saying that Red Lobster will provide more "middle of the menu" entrees, designed to appeal to slightly more cost-conscious consumers. Darden also named KELLY BALTES executive operations vice president for Red Lobster and JANE DIANGE was named Red Lobster senior vice president for human resources. BRIAN MCCARDLE has been promoted to the newly created posts of executive chef and regional director of culinary operations by the PALM MANAGEMENT CORP., parent of 29 upscale steakhouses. Most recently, he was executive chef of the Palm's original restaurant in New York. STARBUCKS COFFEE CO. announced that KENNETH T. LOMBARD, president of JOHNSON DEVELOPMENT CORP. and MAGIC JOHNSON THEATRES, would leave those posts to become a Starbucks senior vice president and president of Starbucks Entertainment. Lombard will head Starbucks' newly developing Hear Music division and wireless Internet services, reporting to JIM DONALD, president of Starbucks North America. The corporate chef and senior director of product development for Miami-based BURGER KING CORP., PETER GIBBONS, is slated to leave the No. 2 burger chain at the end of June. Gibbons was hired by Springfield-based NOBLE & ASSOCIATES to fill a newly created post as senior vice president and director of innovation. Days after the Japanese company posted its first quarterly earnings gain following a two-year slump, YASUYUKI YAGI, president and chief operating officer of MCDONALD'S HOLDINGS CO. (JAPAN) LTD., which is 50- percent owned by MCDONALD'S CORP., resigned, published reports said. Yagi's departure had been expected since earlier this year, when 3,600-unit McDonald's Japan tapped Eiko Harada, former chief executive officer of computer firm Apple Japan Inc., to serve as the new CEO and vice chairman. Parent of a 23-unit chain, BD'S MONGOLIAN BARBEQUE, , hired DEBORAH A. FRATRIK as chief operating officer, effective June 1. Most recently, she was vice president of operations, innovation and training at Metromedia Restaurant Group in Plano, Texas. JOHN LUSH was promoted to senior vice president of restaurant operations by LOGAN'S ROADHOUSE INC. He was vice president of operations. ANTHONY J. GIOIA, president and chief executive will resign from TULLY'S COFFEE CORP. effective July 11 to spend more time with his family. The parent of a chain of 94 coffee shops said it had begun a nationwide search for Gioia's replacement. Also, the company divulged in a regulatory filing that is has agreed to pay Gioia $343,752 in severance. The board of directors of THE COCA-COLA CO. appointed E. NEVILLE ISDELL chairman and chief executive, replacing DOUG DAFT, who announced in February that he would retire at the end of the year. Company officials indicated the transition is expected to take place this summer. LYNN MCKEE was named executive vice president of human resources for ARAMARK. Most recently, she was senior vice president of human resources for the contract foodservice provider. RANDY HICKS was appointed by BOB EVANS FARMS to executive vice president of restaurant operations, replacing LARRY CORBIN, who is retiring. Hicks will oversee the company's 558-unit Bob Evans Restaurants chain and will chair its executive committee. He was senior VP of operations. Corbin will remain on the board of the meat products maker and chain operator. ROMA CORP INC., parent of 255 Tony Roma's units, hired SARAH JACKSON as vice president of training and human resources. Prior to joining Roma Corp. Inc., Jackson directed service excellence strategies for Olive Garden, a division of Darden Restaurants. JOE MICATROTTO, chairman and chief executive of BUCA resigned after several years of disappointing results at the Italian dinner house chain. SALLY ABSHIRE, longtime company veteran of WENDY'S INTERNATIONAL, was named as COO of its BAJA FRESH concept, the second major appointment at the company in a matter of weeks. Abshire will report to Baja Fresh CEO BILL MORETON, another longtime Wendy's executive who took over the fast-casual Mexican brand last month. Most recently, she was VP of training and development for Wendy's North American and a division VP. JIM DUNN is leaving Corporate to open and operate the company's next steakhouse in Boston scheduled to open in the fall. He stepped down as president and COO of 17-unit SMITH & WILLENSKY RESTAURANT GROUP. The company said that founder and CEO ALAN STILLMAN would assume the duties of COO until Dunn's successor is named. Director EUGENE ZURIFF will function as president.
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| NEWS
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According to the company, WALT DISNEY CO. will launch an 18-month marketing blitz pegged to next year's 50th anniversary of Disneyland's opening. New attractions will be added at the company's parks around the world, backed by a global promotional campaign. After a slump that began with the recession in 2001 and amplified by the travel slowdown brought on by the Sept. 11, 2001 terrorist attacks, Disney's theme parks have begun to rebound. JAY RASULO, Disney theme-park chief, said the promotion marking Disneyland's opening in 1955 is intended to bolster the entertainment offerings at each site, tied together with a broad message about what Disneyland has meant to travelers over the years.
Raving Brands announced that it has signed multiple franchisee groups in Southern California to open 10 MOE's SOUTWEST GRILLS and four MAMA FU's NOODLE HOUSES throughout the state. Moe's Southwest Grills is the fastest growing fast casual concept in the country and their success is due in part to its fresh, made-to-order burritos as well as its popular tacos and salads that offer smaller portions and light menu options to consumers. Mama Fu's Noodle House's success comes from its Pan-Asian offerings of Vietnamese, Korean, Thai, Chinese and Japanese cuisine and its eclectic, high-energy atmosphere. None of the menu items contain MSG and authentic Wok-cooking is a standard.
LINDLEY FOOD SERVICE won bids to prepare and serve meals for two senior-services programs. Lindley Food Service is a subsidiary of HOST AMERICA CORP. A five-year, $12.5 million deal with the state of Massachusetts will have Lindley producing assembled and home-delivered meals for 3,500 elderly residents. Separately, a four-year contract worth $3.6 million was signed with LIFESTREAM SERVICES of Yorktown, Ind.
COSÍ INC. is relocating its corporate support center to Chicago from New York to "economically" satisfy its space and accessibility requirements. Cosi Inc. is parent of more than 80 fast-casual sandwich shops. The transition is scheduled to be complete by September. Cosí said it expects the new Chicago facility to yield ongoing annual cash savings beginning in 2005 of approximately $1.85 million, versus expenses at its current New York base. However, the company said it would take a one-time charge for general and administration expenses associated with the move of $900,000.
The barbecue operator announced that GODFATHER's PIZZA founder, WILLY THEISEN, has signed a deal to develop an additional four FAMOUS DAVE's OF AMERICA restaurants in Pennsylvania.
A top official said that QDOBA MEXICAN GRILL recently signed development pacts with three franchisees from sister chain, JACK IN THE BOX.
According to the company, ALLIED DOMECQ has suspended franchising of its troubled sandwich chain, TOGO's, pending a brand overhaul.
The Maitland, Fla. based Franchisee, METRO CORRAL PARTNERS INC., added 13 restaurants to its seven-unit Golden Corral system with the acquisition of Atlanta-based WINSTON GROUP. Metro Corral already ranked as the first to have sales of its restaurants exceed $5 million each a year stands to become the largest-volume operator among all Golden Corral franchises as a result of the acquisition,. Headed by family-dining veteran ERIC HOLM, Metro Corral is a sister group to GEORGIA BAR-B-Q CO., which operates 15 Sonny's Bar-B-Q units in the Atlanta market.
ZAXBY'S launched the fast-casual chicken chain's 200th restaurant, a 3,500-square-foot company-owned test site for new menu, service and design features, in its home market in Athens, Ga. According to ZACH MCLEROY, Zaxby's founder and CEO, the menu would include Zides, or side items, homestyle Tater Chips, Zestable Dip, three new wing sauces and new desserts. The new outlet incorporates casual-dining elements in its 90-seat dining area, and will use food runners to deliver orders. New uniforms also will be tested.
Staffing at the PIZZA INN headquarters and distribution center in The Colony, Texas, whose chain has more than 400 units, was cut by 15 percent and several variable expenses were trimmed. The company said the cuts would save more than $1 million annually and would be passed along to franchisees through price reductions on items sold through its distribution division.
TAOH INC. of Barrington, Ill., signed a franchise development deal calling for the opening of eight restaurants in the next four years with HOULIHAN'S RESTAURANTS, parent of 78 casual-dining units. TAOH principals MIKE ASSAD and GEORGE WIGHT are Dairy Queen and Sierra Suites hotels franchisees.
Santa Ana, Calif. based WINCHELL'S DONUTS, debuted its first Midwestern unit in Wayne, Mich. It is franchised by AL BADRAN of Dearborn, Mich.-based PLATINUM BRANDING LLC and he says he hopes to open 15 units in southeastern Michigan.
DAVE & BUSTER'S INC., parent of 33 restaurant entertainment locations, said its wholly owned subsidiary TANGO ACQUISITION INC. signed a deal to acquire the JILLIAN'S brand and nine of its restaurants and other related assets for $27 million cash. Jillian's filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court Western District of Kentucky. According to company officials, the sale is subject to court approval and is expected to close later this year.
RED HOT & BLUE, the barbecue chain, filed a lawsuit against CAROLINA BLUE ENTERPRISES, alleging that the three-unit franchisee owes nearly $200,000 in monthly royalties, advertising fees and loan installments. Carolina Blue filed for Chapter 11 bankruptcy protection in May and operates Red Hot & Blue outlets in the North Carolina cities of Cary, Raleigh and Chapel Hill. Claiming that Carolina Blue violated franchise agreements, Red Hot & Blue asked a federal judge to force the franchisee to sell back the three restaurants for $1.8 million.
POPEYES CHICKEN & BISCUITS, a division of AFC ENTERPRISES INC., said it is targeting three new markets (Knoxville, Tenn.; Albuquerque, N.M.; and Raleigh and Durham, N.C.) for expansion. The company said it also is targeting increased expansion in Phoenix; Chattanooga, Tenn.; Tulsa, Okla.; Indianapolis; Buffalo, N.Y.; Cleveland; Denver; Detroit; and Los Angeles.
The Muscatine County Board of Supervisors ended the contract it had with ARAMARK to operate foodservice at the county jail. According to the supervisors, they believed they could save the county money by bringing cafeteria service in house. The county said it would pay Aramark $19,000 for kitchen equipment the Philadelphia-based food management firm had installed.
Lawsuits were reportedly filed against STEAK N SHAKE, for alleged job discrimination, and BOB EVANS FARMS, for alleged sexual harassment of female employees by the U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION's district office in St. Louis. The lawsuits stem from incidents at St. Louis area branches of the restaurant companies. Steak N Shake is accused of refusing to hire a deaf job applicant because of his disability. Bob Evans Farms reportedly faces the EEOC's accusations that a Bob Evans restaurant manager in Bridgeton, Mo., directed vulgar sexual comments and conduct toward female employees.
ANTOIN "TONY" REZKO, a former operator of 30 Papa John's Pizza units in Chicago and six in the Detroit area, who recently converted the restaurants to the name Papa Tony's is being sued by PAPA JOHN'S INTERNATIONAL. Papa John's, which was left with only six Chicago branches after its recent termination of Rezko's franchise agreement, alleges that he owes the company $782,000 in unpaid bills for food and other items. Papa John's said it also sued Rezko to stop him from operating under the Papa Tony's name.
YUM! BRANDS INC. and BACK YARD BURGERS INC. have terminated discussions regarding possible future licensing or sublicensing of the Back Yard Burgers concept to Yum for co-branding. Under the terms of a January 2002 deal, Yum obtained the right to use Back Yard Burgers' trademarks to establish up to 10 BYB outlets in dual-brand developments with the Yum-owned Taco Bell, Pizza Hut and KFC chains. The pact also gave Yum a never exercised option to co-brand up to 500 additional BYB units. LATTIMORE M. MICHAEL, BYB chairman and CEO, said his company was "disappointed" that the talks with Yum had ended.
CEO of PANERA BREAD CO., RON SHAICH, downplayed the impact of low-carb diets on the bakery-cafe category, just days after Krispy Kreme posted a much more dire story.
A former HOOTERS manager, JUAN M. APONTE, of Arcadia, was reportedly arrested in West Covina, Calif. on suspicion of multiple felony counts related to his alleged videotaping of job applicants as they were changing into the chain's uniform. He was accused of taping about 80 women, including several minors, who were applying for waitress positions at a Hooters in West Covina.
BEAR ROCK FRANCHISE SYSTEMS INC., parent of 29 fast-casual restaurants, said GARY SABINS, managing partner of DARK STAR RESTAURANT VENTURES, agreed to open five Bear Rock units in central Texas later this year.
The sole domestic franchisee of the ROMANO'S MACARONI GRILL chain, WATERLOO RESTAURANT VENTURES INC., signed leases to add three new restaurants in the Pacific Northwest by year-end. Waterloo already was slated to open its first Macaroni Grill in the Portland region, in Portland this month.
The Healthcare Management Services division of ARAMARK rolled out a program called Pizza For Patients at its hospital accounts nationwide. Provided the patient is not on a doctor-restricted diet, the pizzas are offered with a variety of toppings, including breakfast choices, and can be ordered in place of other entrees for patients' mealtimes and are guaranteed to be delivered within 30 minutes.
The second location of BUFFALO's SOUTHWEST CAFE is slated to open this month according to BUFFALO'S FRANCHISE CONCEPTS INC., operator and franchisor of the 45-unit chain. The 6,000-square-foot Coral Springs restaurant, which has 300 indoor seats and a large patio, is co-owned by BOB MATTIS, BFCI's franchise business partner.
BUFFALO's SOUTHWEST CAFE also broke ground on its first Las Vegas restaurant. The restaurant is part of the largest franchise development agreement in the company's history. Signed with WORKS FOR ME INC., owned by DREW ALEXANDER and SHELLI LANG, the newest location is the first of seven restaurants to be built over the next several years.
With the arrival of the warm weather, BUFFALO's SOUTHWEST CAFe is bringing back its popular spring menu promotion with "Sundance Specials" and includes two new entrees, a specialty appetizer and a brand new wing flavor.
According to news reports, NORMA'S restaurant in New York in the LE PARKER MERIDIEN hotel put an omelet priced at $1,000 on its menu. Reportedly, the omelet includes six eggs, a lobster and 10 ounces of sevruga caviar, which costs the hotel $65 per ounce.
FUDDRUCKERS, parent of more than 250 hamburger restaurants, said the company's first location in a casino would be opened by a franchisee. According to DINO CHAVEZ, Fuddruckers' franchise sales manager, PARK LANE OF NEW ORLEANS LLC is slated to open the Fudds Express in Harrah's Casino in downtown New Orleans. Fuddruckers' system already includes two "express" shops in malls. The also company signed a deal with THE PITTSBURGH FUDD CORP. to open three units in Pittsburgh.
Acceptance of its new fast-casual concept Schlotzsky's Sandwich Cafe & Bakery, continues to build says SCHLOTZSKY'S INC., operator and franchisor of a chain of 537 sandwich shops. The company also said approximately 43 percent of its system "voluntarily" had agreed to transition to the new prototype.
A subsidiary of Wilbraham, Mass.-based FRIENDLY ICE CREAM CORP., FRIENDLY'S RESTAURANTS FRANCHISE INC., said franchisee HAIBACK ENTERPRISES INC. agreed to take over a unit in New Providence, NJ. Haiback also would open two new Friendly's, the first in Old Bridge, N.J., this summer.
As part of a deal to open 10 in-store units over the next three months in Connecticut, Massachusetts, New York, Ohio, Pennsylvania and Vermont the DUNKIN' DONUTS division of ALLIED DOMECQ QUICK SERVICE RESTAURANTS said it had opened its first shop within a WAL-MART store, in North Wyndham, Conn. Dunkin' Donuts also has in-store deals with the Home Depot and Stop n Shop chains.
MCDONALD'S CORP. owned BOSTON MARKET, the 630-unit home meal-replacement chain, is testing delivery at some 138 locations in Washington, D.C., New Jersey, New York and parts of Maryland. According to spokeswoman PHYLLIS HAMM, starting next month, Boston Market, which also is slated to debut an outlet inside a McDonald's restaurant in Chicago this summer, said it would expand its home-delivery experiment to stores in Toledo, Ohio, and potentially could make the service available at two-thirds of all its U.S. restaurants by year-end.
A division of NEW WORLD RESTAURANT GROUP INC., MANHATTAN BAGEL, debuted a new fast-casual prototype in Fountainville, Penn. Dubbed the Manhattan Bakery Cafe, the prototype boasts a contemporary design including soft earth tones and wood accents and features the full Manhattan Bagel menu of salads, soups and bagel sandwiches. DAVID AMMONS, vice president of marketing for NWRG's franchised brands said, "The new concept continues the repositioning of the brand from a bagel shop to a new emphasis on lunch and day-long dining."
KRISPY KREME DOUGHNUTS INC. cut by 10 percent its earnings forecast for the fiscal year, on lower-than-expected sales of packaged doughnuts blaming the popularity of low-carbohydrate diets. The plans for new store openings for this year are cut by around 20 locations. The company also said it would divest its MONTANA MILLS BREAD CO. chain of bakeries by closing the under-performing majority of its 22 stores and pursuing a sale of the remaining units. Analysts have blasted this explanation - the proliferation of low-carb diets- for the store closing, declining customer traffic and the abrupt sale of the Montana Mills bread chain. Also, two recent deals in which KRISPY KREME DOUGHNUTS INC. brought back franchisees could spark new concerns about accounting practices and conflicts of interest in investments that its executives made with franchisees.
SIZZLER USA opened its first company owned branch built from the ground up in more than five years. Sizzler is a division of WORLDWIDE RESTAURANT CONCEPTS. The Antioch location of the Los Angeles-based chain includes all elements of Sizzler's current remodel program, including a new color scheme and river rock accents.
ROY'S rolled out a 12-item "Yamaguchi Sushi" menu to the Pacific Rim-Hawaiian fusion chain's branch near Roy's Newport Beach, Calif. headquarters extending its sushi offerings to a fifth restaurant. Roy's president MARK RUNNING said the upscale brand had introduced sushi to mainland restaurants in Scottsdale, Ariz., and Las Vegas after having launched the program at the La Jolla, Calif., branch last year.
According to spokeswoman ALICE COGGIN, ATLANTA BREAD COMPANY named family-dining veteran RICK ARRAS interim president of the Smyrna-based chain of 167 bakery-cafe restaurants in the absence of president and chief executive JERRY COUVARAS, who is facing charges of investor fraud in Johannesburg, South Africa, following his arrest there in late March. JANE LANGLEY, Couvaras family spokeswoman, confirmed that BASIL COUVARAS continues as Atlanta Bread's vice president and chief operating officer while reviewing with attorneys his options in light of related charges. Coggin said Arras was brought in on a temporary basis to help conduct "business as usual" for the chain.
According to BIG BOY RESTAURANTS INTERNATIONAL INC., franchisor of more than 455 outlets, JIM TALGHANI signed a franchise development deal to open 16 Big Boys over the next eight years in Las Vegas, Lake Tahoe, Calif., and Reno, Nev.
Parent of a 70-unit quick-service chain, TACO DEL MAR , said A BETTER LIFE FRANCHISE DEVELOPMENT LLC signed a master development deal for the San Diego area. According to company officials, A Better Life is owned by JOHN and BERTHA BOYKEN, who were early investors in the Taco Del Mar brand.
CASTLE HARLAN INC. agreed to pay $340 million to acquire CARIBBEAN RESTAURANTS LLC, or CRI, which operates 165 Burger King units in Puerto Rico. They are a private equity firm based in New York. Castle Harlan said it would acquire CRI from OAK HILL CAPITAL PARTNERS L.P., which bought the Puerto Rican BK group in September 1999 in partnership with its management and American Securities Capital Partners. Their investment portfolio already includes the Morton's Restaurant Group and McCormick & Schmick's upscale chains.
According to CRACKER BARREL OLD COUNTRY STORE INC., it has signed a consent order with the U.S. Department of Justice that includes an agreement to expand the chain's existing program for preventing and addressing customers' claims of discriminatory acts that violate Title II of the Civil Rights Act of 1964. Cracker Barrel will expand diversity training and procedures for investigating complaints under the Agreement. The company also agreed to implement a third party testing program, hire an auditor to monitor implementation and post its equal-treatment policies for public inspection and has denied wrongdoing.
JIM TRELIVING, President and CEO of BOSTON's THE GOURMET PIZZA, announced at the company's Franchisee Conference recently that a recent flurry of franchise sales activity has greatly accelerated Boston's The Gourmet Pizza's growth plans for the future. Since January, the casual dining chain sold fifteen additional new single franchises and/or development agreements to various investors, groups and operators located in key areas across the country, representing commitments to build 29 new restaurants. Treliving, a Canadian native, move the U.S. operations to Dallas as a commitment to grow the company in the U.S. Says Treliving, "As the largest casual dining chain in Canada, we have a 40-year history that is parlaying into success in the States through strong franchise partnerships."
O'CHARLEY's says it is interested in acquiring some real estate sites from now-bankrupt Ground Round restaurants.
CHARLIE BELL, CEO of MCDONALD's underwent successful colo-rectal cancer surgery according to the company and his recuperation is expected to be brief.
MIMI's CAFe an 81-unit family restaurant chain, has filed registration documents for its initial public stock offering.
The top two executives at DAVE & BUSTER's were each awarded $854,708 in 2003, including substantial bonuses reflecting improved performance at the casual-dining chain.
According to the firm's proxy filing, LANDRY's RESTAURANTS boosted CEO TILMAN FERTITTA's cash compensation to almost $3.5 million last year, up from $2.4 million the year before.
APPLEBEE's INTERNATIONAL confirmed that it has won a bid in U.S. Bankruptcy Court for six Ground Round restaurants. On another note, the casual-dining chain said that takeout orders now make up 9.4% of total sales among company stores.
According to the company, CHICAGO PIZZA & BREWERY plans to drop its thematic connection to the Windy City.
In a market that proved to be a problem from the start for the barbecue operator, FAMOUS DAVE's OF AMERICA has closed its only two stores in Texas.
According to parent BRINKER INTERNATIONAL, a franchise pact has been signed by CHILI's to build 15 restaurants in South Carolina and Southern Georgia.
Executives of the 630-chain, WHATABURGER INC., said the company's recent acquisition of 92 burger restaurants from its largest franchisee fits into a corporate strategy of strengthening the Texas-focused brand and doesn't alter its franchising push. BOB MOORE, Whataburger's senior vice president of operations said, "Part of our strategy is to be a strong brand, especially in the state of Texas. This deal helps us fill out a number of areas in Texas as well as in Oklahoma and New Mexico", adding "it also makes us more efficient."
During the annual meeting of Berkshire Hathaway Inc., which bought International Dairy Queen in 1998, a group of DAIRY QUEEN franchisees said recently that they would protest pressures to convert their units to the DQ Grill & Chill concept.
BOJANGLES' RESTAURANTS INC. parent of approximately 127 quick-service chicken units, garnered two franchise development deals for 12 locations in Tennessee.
Created by noted restaurateur PATRICK COLOMBO, RESTAURANT WORKS, INC. is expanding its Cru' wine bar concept and spreading into management of other restaurant concepts.
E-BRANDS ACQUISITIONS INC. is expanding one year after acquiring a 12-unit "emerging-brands" group of upscale-casual concepts from CARLSON RESTAURANTS WORLDWIDE conforming a nearly 18-percent rise in revenues since culinary and service repositioning.
DAVID MALUFF, co-owner of the FULL MOON BAR-B-QUE chain is looking at rapid exportation to several cities nationwide for his old-fashioned, Southern-style barbecue.
A growing chain of dinner houses, BIAGGI's RISTORANTE ITALIANO, now has 14 locations and is meeting its goal of opening four units in prime locations while facing the challenges of competing in perhaps the most crowded dinner house segment of all.
The recent change at the Downtown Disney mall in Anaheim, Calif. of the nuevo Latino restaurant, Y ARRIBA Y ARRIBA, into the Patina Group's first Mexican restaurant, TORTILLA JO's, signals more than a change of ownership or interior design. It reflects the growing interest in Mexican products in this country.
Within hours after JAMES CANTALUPO's death in April, restaurant companies saw a textbook transition of leadership through succession planning when MCDONALD's named replacements for chairman and chief executive.
Later this year, according to the company, JACK IN THE BOX will expand its JBX fast-casual test concept to Boise, Idaho and Bakersfield, Calif.
In the most dramatic indication yet of problems within the high-volume brand, DARDEN RESTAURANTS is closing six of its 38 BAHAMA BREEZE restaurants and re-valuing four other stores.
Husband and wife team DAVID and KAREN WALTUCK's French cafe in New York, CHANTRELLE, was selected as the 2004 winner of the James Beard Foundation's Outstanding Restaurant award.
Plans were announced by FOOD, FRIENDS and CO. to purchase the 15-unit COZYMEL's MEXICAN GRILL concept from BRINKER. The new company will focus on Cozymel's fresh, authentic Mexican cuisine and they expect to add several new units over the next 24 months.
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| FINANCIALS
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According to OUTBACK STEAKHOUSE INC., domestic systemwide same-store sales at its namesake restaurants had increased 2.5 percent for the four weeks ended May 22.
The parent of approximately 300 steakhouses, LONE STAR STEAKHOUSE & SALOON, said it had lowered its earnings estimate for the second quarter as a result of high beef costs. The company lowered its earnings estimate to between 20 cents and 24 cents a share, versus the 30 cents a share earned in the year-ago quarter and said it expects food costs to be higher as a percentage of sales by 2.6 percent to 3 percent.
Contrary to a slowdown in sales hitting other segments of the fast-casual Mexican category, CHIPOTLE's same-store sales rose 22.3% in April.
Samestore sales for the four weeks ended May 17 at CKE RESTAURANTS INC. increased 9.4 percent at Carl's Jr. and 11.8 percent at Hardee's. For the first quarter, also ended May 17, same-store sales jumped 9.8 percent at Carl's Jr. and 11.9 percent at Hardee's, lapping negative results at both brands in the year-ago first quarter.
For the first quarter ended May 2, KRISPY KREME DOUGHNUTS INC. posted a net loss of $24.4 million, including a loss of $34.3 million from discontinued operations related to the company's pending divestiture of its Montana Mills bakery cafe chain. Krispy Kreme, whose net profit was $13.1 million in the year-ago quarter, said operating income in the latest quarter plunged 21 percent to $18.6 million with a $7.5 million asset impairment charge for closed stores.
As costs increased for restaurant openings, marketing, and general and administrative expenses, BENIHANA INC. posted a 4.8-percent decline in earnings on revenues that rose 9.4 percent during the fourth quarter.
APPLEBEE'S INTERNATIONAL INC. said systemwide same-store sales for the four weeks ended May 23 rose 5.1 percent.
Securities regulators were told by SCHLOTZSKY'S INC. that franchisees owed the company $1.1 million in back royalties as of March 31, a year-to-year increase of 21 percent for the first quarter, despite a sharp decline in the number of franchised restaurants.
RED ROBIN GOURMET BURGERS INC. posted a 46-percent increase in first-quarter net earnings to $5.2 million on a 26-percent jump in revenues to $116.7 million.
For the third quarter, CBRL GROUP INC., parent of the Cracker Barrel Old Country Stores and Logan's Roadhouse chains, reported a 12-percent rise in net income on improved samestore sales. However, the company warned that sales were trending downward in the first three weeks of the fourth quarter. For the three months ended April 30, CBRL's net income was $26.2 million, or 52 cents a share, versus $23.4 million, or 46 cents a share, in last year's third quarter.
The board of directors of YUM! BRANDS INC. said its had approved an initial dividend of 10 cents a share to be paid on Aug. 6 to shareholders of record on July 16. Yum also said its board had approved a new $300 million share repurchase program and that the company plans to pay down $350 million in long-term debt.
Securities regulators were told by DOMINO'S PIZZA that its planned initial public offering would be for 24.1 million shares at an estimated per-share price of $15 to $17. The Ann Arbor, Mich.-based company plans to sell nearly 9.4 million shares, and said current shareholders could sell nearly 14.7 million other shares.
In a regulatory filing, BERTUCCI's stated that same-store sales rose 4.9% in the first quarter despite declining guest counts.
The SMITH & WOLLENSKY RESTAURANT GROUP INC. reported a smaller first-quarter net loss on a 21-percent increase in restaurant sales. Says the high-end steakhouse operator, the "extreme high cost of Prime beef" continued to affect its results.
For the first quarter, PANERA BREAD CO. reported a 26-percent increase in net income, on increased revenues and same-store sales growth of 1.8 percent. The operator and franchisor of 637 bakery-cafes said it expects to implement a midyear price increase of about 2 percent to offset higher commodity costs. Systemwide same-store sales increased 4.1 percent for the four weeks ended May 15 according to PANERA BREAD CO. Average unit volumes for the 52 weeks ended May 15 increased 1 percent to $1.86 million.
ARAMARK CORP. reported a 23-percent rise in second-quarter earnings from continuing operations on a 12-percent increase in sales to $2.6 billion.
Same-store sales for the five weeks ended April 23 at BOB EVANS FARMS INC. fell 0.3 percent on 2.4-percent higher average menu prices. According to the company, lower-than expected restaurant sales and relatively high raw material costs for both its restaurant and pork sausage manufacturing businesses had led it to lower its earnings expectations for the 2004 fiscal year.
COSÍ INC. narrowed its first-quarter loss to $6.5 million on a 3.1-percent decrease in revenues. The company's $6.5 million loss compares with its loss of $11.6 million in last year's first quarter.
For its second quarter, JACK IN THE BOX INC., parent of the chain of more than 1,970 quick-service units, posted a 20-percent increase in net earnings, as earnings from operations increased 8.2 percent. The company indicated sales of new, upscale products, including the three-item Pannido sandwich line introduced earlier this year, were especially strong. A low-fat Southwest Chicken Pita is slated for roll out in June.
Parent of the 735-unit Einstein Bros. and Noah's bagel chains, NEW WORLD RESTAURANT GROUP, improved its operating income and narrowed its net loss during the first quarter, as lower general-and-administrative costs and interest expenses offset a 4.3-percent drop in retail sales. NWRG's net loss for the quarter ended March 30 was $2.6 million, versus a loss of $7.7 million a year earlier.
Parent of the Arby's chain, TRIARC COS. INC., reported an operating loss of $3.2 million, or 5 cents a share, for the first quarter. Sales at company-owned units had fallen 3.7 percent. Triarc's results for the quarter ended March 28 compared with a net loss of $2 million, or 3 cents a share, in last year's first quarter.
First-quarter earnings at PAPA JOHN'S INTERNATIONAL INC., parent of 2,809 Papa John's Pizza units, fell 23 percent, as revenues rose 2 percent. Papa John's net income for the quarter ended March 28 was $8.5 million, or 47 cents per diluted share, versus $11 million, or 61 cents a share, in the previous first quarter.
Net income at DOMINO'S INC. was reported to be $18.4 million for the quarter ended March 21, versus $18.3 million in the year-ago quarter. Revenues rose 2.1 percent to $318.8 million, boosted by a 24-percent increase in international revenue, but offset by a 2-percent decrease at domestic company-owned stores.
Portland based MCCORMICK & SCHMICK HOLDINGS LLC, operator of 49 high-volume, namesake seafood and other specialty restaurants, filed with securities regulators for an initial public stock offering to raise up to $172.5 million. The company, which would use IPO proceeds to pay down debt, reacquire shares, add restaurants and fund general corporate expenses, is controlled by the New York-based investment firms BRUCKMANN, ROSSER SHERRILL & CO. II LP and CASTLE HARLAN PARTNERS III LP. Other investors include senior McCormick & Schmick's executives and BELL ATLANTIC MASTER TRUST.
The Restaurant Performance Index for March for the NATIONAL RESTAURANT ASSOCIATION dipped 0.2 percent to 104.8, from February's record high, reflecting fewer operators reporting increases in same-store sales and traffic, but more operators increasing their staffing levels. The percentage of operators reporting improved year-over-year same-store sales for March fell to 59 percent, from February's record 70 percent, but was still higher than all monthly readings before February.
WENDY'S INTERNATIONAL INC. said same-store sales for the five weeks ended May 2 jumped between 8.3 percent and 8.4 percent at U.S. company-owned namesake units and between 6.3 percent and 6.6 percent at U.S. franchise stores.
T.G.I. Friday's largest franchisee, MAIN STREET AND MAIN INC., reported that first-quarter net income rose 10 percent as a result of lower interest expenses, despite a 3.3-percent drop in operating income. The company said net income for the quarter ended March 29 was $1.2 million, versus $1.1 million for the previous first quarter.
After a better than expected first quarter, OUTBACK STEAKHOUSE is upping average unit volume estimates for its namesake concept and ROY's according to the company. Outback reported that comp store sales were up 4.6%, Carrabba's was up 3.3% and Flemings was up 19.5%.
The TWP restaurant index declined another 2% as restaurant stocks continued to struggle in May. Specialty, Casual and Family Dining were down 3%, 3% and 6% respectively with only one stock, Starbucks (up 2%) closing in positive territory from the group.
Same store sales at Darden's were mixed with OLIVE GARDEN up 5.5% and RED LOBSTER down 8.5%.
Operating results for the quarter at CHICAGO PIZZA & BREWERY were announced with revenue up 21.8%. Contributing to the growth was a 7.7% increase in same store sales.
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| HOTELS
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A deal between HYATT HOTELS & RESORTS and T-MOBILE USA INC. will bring high-speed wireless Internet access to nearly all of Hyatt Corp.'s more than 200 hotels by the middle of next year. This hot, wireless technology known as Wi-Fi is quickly becoming a must have perk for hotels - right up there with health clubs and generous loyalty programs. According to a Boston-based telecom consulting and research firm, Pyramid Research, approximately 6,000 hotels around the world are expected to offer Wi-Fi to their guests by the end of this year. Despite the fact that Hyatt is actually late to the Wi-Fi game (Marriott International Inc., Starwood Hotels & Resorts Worldwide Inc., Omni Hotels Inc. and Hilton Hotels Corp. among others, entered the wireless race more than a year ago). However, unlike some of the other chains, Hyatt plans to have wireless access in nearly every one of its hotels and will offer the service in most of its rooms. This wireless access won't be free, though. Guests can expect to pay $9.99 a day, unless they are already subscribers to T-Mobile's Wi-Fi Service. Most other hotels charge $10 to $15 a day for the access but say they expect to be giving it away for free within a few years as they compete for business.
Thanks to higher bookings and a surge in hotel revenue, ORBITZ INC. reported a first quarter profit. The online travel company, based in Chicago and went public in December last year, posted a net income of $1.9 million compared with a year-earlier net loss of $2.4 million. Revenue from hotel, car, vacation packages and cruises more than doubled to $17.7 million amid a surge in hotel revenue.
ACCOR, the French hotel and leisure company, said that it is buying nearly 30 percent of CLUB MEDITERRANEAN for $305 million in a move that could accelerate the holiday resort operator's push to attract more affluent customers. Once the deal is complete, Accor will become Club Med's biggest shareholder.
Instead of finding cheap stays in cities like New York and Washington, travelers, will find higher priced rooms and far fewer freebies than they enjoyed last year. As hotels companies take advantage of a sudden surge in business travel, room prices in the U.S. are soaring approximately twice as fast as occupancies, meaning hoteliers are willing to forgo a few bargain hunters because they can land business travelers who will pay higher prices. The price recovery, however, is bypassing cities with weaker economies, like San Francisco, Seattle and Dallas. The biggest price increases will come at deluxe hotels, rising 3.7% while economy priced hotels are expected to rise only 1.1%. Assuming the trend continues, it will translate into big profits for hotel companies with a large business-traveler presence.
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| CASINO
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Saying there was too great a risk that the deal would not go through, the MANDALAY RESORT GROUP rejected a $4.5 billion takeover offer from MGM MIRAGE. Mandalay, which owns and operates 11 hotels and casinos in Nevada, said that MGM Mirage, the resort empire owned by Kirk Kerkorian, was trying to tie up Mandalay's business for 15 months and balking from doing whatever it might take to persuade regulators to approve the acquisition. A combination of MGM Mirage and Mandalay would have created the largest gambling company in the world. Executives involved in the discussions said that the companies had been in merger talks before MGM Mirage went public.
After the failed buyout attempt of rival MANDALAY RESORT GROUP and all the hype that went along with it, the recent overhaul of MGM MIRAGE's privacy policy went virtually unnoticed. In its privacy policy, which was revised on May 17 to include not just online transactions but all casino operations, MGM says it routinely collects a wide variety of information about visitors to its various properties. This information, which includes guests' names, addresses, birth dates, Social Security numbers and driver's license numbers, is shared with "strategic partners". An MGM Mirage spokeswoman in Las Vegas, Yvette Monet, says, "It's a competitive issue, we don't disclose anything about our strategic partners." Monet wouldn't say how many strategic partners there are nor would she even say what industries they are in. MGM Mirage's guests simply have to accept the fact that an unspecified number of strategic partners exist and that they have access to guests' personal information. The company does acknowledge, however, that it has no control over what its strategic partners may do with any data received. The company is essentially saying "trust us" when it comes to the handling of people's confidential information, even though it explicitly states that you may not be able to trust those receiving the information, whoever they may be. Monet says, "Our privacy policy is in full compliance with the law. It follows best marketing practices". For it's part, rival HARRAH's says in its privacy policy that marketing partners are not allowed to retain guests' data unless the guest expresses interest in any product or service offered. CAESARS ENTERTAINMENT says it only shares data with third parties to help process transactions. MGM does, however, allow guests to opt out from having personal data shared with strategic partners.
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| BREAKING NEWS
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Only 18 months after Brad Blum became the eighth chief executive in 15 years at Burger King, the chain's owners are searching for a new chieftain, people familiar with the situation said.
The closely held Miami company is expected to seriously consider its new chief financial officer, John W. Chidsey, for the post, people familiar with the situation said.
Chidsey joined Burger King four months ago as finance chief, and earlier this month was named president of Burger King North America.
Others believed to be in the running for the top job are Steven Heyer, Coca-Cola Co.'s departing president, and Paul Clayton, chief executive of Jamba Juice, who was president of Burger King North America from 1997 to 1999. The company also is considering at least one senior executive of a packaged-goods maker, one person said. Through a Coke spokesman, Heyer declined to comment Tuesday and Clayton, through a spokeswoman, also declined to comment.
The latest developments underscore the enormous challenges facing Burger King.
At least 20 percent of its roughly 7,900 units are losing money, and at least three of its 10 largest franchisees have filed for bankruptcy protection in recent years -- behind in lender, vendor and royalty payments.
One industry analyst said Blum's biggest problem was that he didn't get along with franchisees, who own the majority of Burger King's system.
The analyst, Allan F. Hickok, at Hickok McMillan Strategic Advisors LLC, said Edit this article down and put .ems there was no one tipping point, but that a shouting match last month at a franchisee meeting in Orlando didn't help.
Still, Hickok said that in removing Blum, Burger King is "just reverting to another chief executive because they need a quick fix, and there are none. That perpetuates the problem with the revolving door." Advertising Age reported news of the search for a successor for Blum. Burger King said Tuesday Blum declined to comment. Chidsey was traveling and unavailable.
Industry analysts believe Wendy's International Inc. may soon displace Burger King as the nation's second-largest hamburger chain, behind McDonald's Corp.
In 2003, according to Technomic Inc., Burger King had 7,904 units and sales of $7.9 billion, while Wendy's had 5,761 domestic units, with $7.35 billion in sales. But while Burger King has been closing stores, Wendy's has been growing fast.
Burger King was sold by Diageo PLC in late 2002 to Texas Pacific Group, Bain Capital and Goldman Sachs Partners.
Bain, on behalf of the investors, began approaching external CEO candidates six weeks ago without using a search firm, people familiar with the company said.
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