Executive Connections Newsletter: Issue 59, APRIL 2005
| DICK WRAY & CONSULTANTS - MONTHLY EDITORIAL
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Written by Bob Gershberg, Executive Vice President of Dick Wray & Consultants
Much has been said about the art and science of leadership both within and outside
of our industry. Originally defined by Webster as "the ability to lead", the
concept itself is now characterized as a process of influencing people to accomplish
an objective, meet organizational requirements and improve through change.
It is interesting to note that recent thinking supports the nurture over nature
philosophy. Great leaders are made, not born.
Initially the leadership "trait" was thought to be hereditary. It took only the study of a few bungling first born sons of reigning royalty to shoot this theory full of holes. Contemporary thinking shifted our focus to the charisma trait merely to change again after observing some very charismatic leaders failing miserably when the task of execution brought test. It is not just vision, a particular competency set, style and trust that make for great leaders but a blend of so very many characteristics both learned and mastered through experience and tutelage.
I had the distinct honor of becoming a member of the Women's Foodservice Forum
and subsequently attending its venerable Leadership Conference this month.
As a seasoned restaurant veteran, I've attended countless industry confabs
and leadership conferences. WFF clearly raises the bar when it comes to the
focus of leadership development. I am confident I sat amongst the future great
leaders of our industry. Moreover, I was elated to see our current proven leaders
so very driven to mentor those with the dreams of reaching the sky in our incredible
arena.
Our industry is rich with leadership talent from those at the helm of billion dollar brands to the many forging a path at the emerging concepts. As the economy appears to be taking pause and restaurant financials have softened a bit of late, we remain bullish on the industry as the overall momentum is positive and perhaps because we are flush with great leaders.
All the best,
Bob
Bob Gershberg, Executive Vice President
bob.gershberg@dickwray.com
888-929-WRAY
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| SAMPLING OF CURRENT ENGAGEMENTS
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Dick Wray & Consultants is pleased to report that the demand for our service is strong. The following list is a sampling of our current engagements. 1. Senior VP Development, West Coast 2. VP Operations, West Coast 3. COO, Family Dining, Midwest 4. Director of Franchise Services, Southeast 5. VP Finance, Southeast 6. VP Operations & Development, QSR, West 7. VP Franchising, QSR, USA 8. VP Purchasing, West Coast 9. VP Marketing, Northeast 10. Director of IT, West Coast Referrals are the lifeblood of our business. If you know of anyone who may be interested in one of these opportunities, we would be happy to review their credentials.
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| EXECUTIVE MOVEMENT
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President and chief operating officer for O'CHARLEY'S INC., operator and franchisor of 226 namesake restaurants, STEVEN J. HISLOP, has been appointed concept president for O'Charleys. STEVE CABLE was hired by NOODLES & COMPANY, operator and franchisor of more than 100 fast-casual noodle shops based in Boulder Co., as vice president of restaurant development. Former Chipotle executive, KEVIN REDDY, was hired by NOODLES & COMPANY, based in Boulder, Colo., as president and chief operating officer. He replaces AARON KENNEDY, the company's founder, who will remain chief executive. Reddy will oversee restaurant operations, including purchasing, distribution and culinary research and development. MICHAEL MONTELONGO has been hired as senior vice president of strategic marketing for SODEXHO INC. He replaces CHRIS ROCHETTE, who is taking a position with Sodexho Inc.'s parent company, SODEXHO ALLIANCE. Most recently, Montelongo was the assistant secretary of the U.S. Air Force for financial management and comptroller. Also, Sodexho Inc. promoted JAMES TAYLOR to the newly created position of vice president, office of the president. He previously was senior vice president of national accounts for Sodexho's Corporate Services division. CHURCH'S CHICKEN named Pizza Hut veteran JAMES PARRISH executive vice president and chief operating officer completing a key executive realignment which begun earlier this year. Last December, Church's was acquired from AFC Enterprises by CRESCENT CAPITAL and HARSHA AGADI, a veteran of Domino's Pizza and Little Caesar's, was installed then as president and CEO to streamline and rebuild the 1,556-unit brand. Parrish joins chief financial officer DUSTY PROFUMO, chief franchise officer DOUGLAS PENDERGAST and international business vice president TOM JOHNSON, all appointed since the Crescent takeover. Effective June 2005, Orlando, Fla. based DARDEN RESTAURANTS INC., elected CHARLES A. LEDSINGER and WILLIAM M. LEWIS JR. to its board of directors. Ledsinger is president and chief executive of Choice Hotels International in Silver Spring, Md. Lewis serves as managing director and co-chairman of investment banking at New York-based Lazard Frères & Co. LLC. CRAIG BENNETT was named to the newly created position of director of research and development at MRS. FIELDS FAMOUS BRANDS. Bennett has more than 25 years of experience in the bakery and dairy business and has worked for Kraft, Quest International and Sensient. Mrs. Fields also named PAUL KERSHISNIK to the new post of director of product development. Prior to joining the team at Mrs. Fields, Kershisnik worked for General Mills and Pizza Hut. BILL RICHARDSON has been named by ABUELO'S MEXICAN FOOD EMBASSY RESTAURANTS, a 22-unit Mexican chain, to the newly created post of vice president of expansion markets. He will oversee Abuelo's market areas outside of Texas, Oklahoma and Arizona. Richardson most recently served as regional vice president for Romano's Macaroni Grill, a division of Dallas-based Brinker International Inc. After discovering accounting irregularities, BUCA INC., operator of 107 Buca di Beppo and Vinny T's of Boston dinnerhouses, fired vice president, controller and interim chief financial officer DAN SKRYPEK and chief information officer JOHN MOTSCHENBACHER. The company has begun an internal investigation of matters relating to their termination. According to Buca, KAYE R. O'LEARY assumed the post of CFO in March, not April, as previously scheduled. DANIEL GEEDING was elected chairman by FRISCH'S RESTAURANTS. He replaces the late JACK MAIER, who passed away in February. The board also elected KAREN MAIER, who has been vice president of marketing since 1983, as a new director. A director since 1992, Geeding is vice president and chief financial officer of the Health Foundation of Greater Cincinnati and the Health Foundation Fund. The vacant position of chief operating officer at BLIMPIE INTERNATIONAL INC., the 1,600-unit sandwich chain based in Atlanta has been filled with the appointment of MICHAEL HARDEN. Harden, who was retired from the restaurant industry, brings 35 years of experience at McDonald's with him to his new position. H. G. "CAREY" CARRINGTON JR., senior vice president of finance for APPLEBEE'S INTERNATIONAL INC., operator and franchisor of nearly 1,700 units has resigned to accept a post as chief financial officer for FIRED UP INC., which operates or franchises the 142-unit Johnny Carino's Italian chain based in Austin, TX. STEVE LUMPKIN, executive vice president and chief financial officer, will take over Carrington's duties as Applebee's said it does not intend to refill the position. FIRED UP INC. declined to say whom Carrington would replace. Carrington also served as interim president, executive vice president and chief financial officer for California Pizza Kitchen. Former retail marketing executive JOHN BULLER has been appointed by TULLY'S COFFEE CORP. to its board of directors, replacing retiring director ARTIE BUERK. AVADO BRANDS INC. named KURT SCHNAUBELT chief financial officer in the wake of continuing Hops Grillhouse & Brewery and Don Pablo's Mexican Kitchen unit closings. He succeeds LOUIS PROFUMO, who resigned in February to join Atlanta-based Church's Chicken. THE HOLLAND INC., parent of the 39-unit quick-service Burgerville chain, three Beaches casual-dining venues and two Noodlin' fast-casual outlets appointed industry outsider JEFFREY P. HARVEY to the newly created post of chief operations officer. DAWN WORTHINGTON was promoted by the NATIONAL RESTAURANT ASSOCIATION to vice president of human resources and benefits for the organization. Worthington was most recently the NRA's senior director of human resources, and will continue reporting to PETER KILGORE, the NRA's senior vice president of operations, general counsel and corporate secretary. Saying the title recognized his contributions to the company and the community, the board of FAMOUS DAVE'S OF AMERICA INC. in Minneapolis appointed founder and former executive DAVE ANDERSON to the post of chairman emeritus. Anderson, who will have no formal responsibilities with the 108-unit barbecue chain, recently resigned as assistant secretary for Indian affairs at the U.S. Department of the Interior. JOHN M. MORTON was hired by BUFFALO'S FRANCHISE CONCEPTS INC., franchisor of the Buffalo's Southwest Cafe chain, as director of operations, replacing GREG JACKSON, who had left the company. Morton is responsible in his new role for all of the approximately 50-unit chain's corporate restaurant operations. BILL ALLEN has been promoted to chief executive at OUTBACK STEAKHOUSE INC., operator and franchisor of 1,196 casual-dining units and replaces CHRIS SULLIVAN, who stepped down from his post as CEO but will continue to serve as chairman. PAUL AVERY, Outback president, will take on the duties of chief operating officer, replacing BOB BASHAM, who will become co-chairman with Sullivan. MICHAEL O'DONNELL has been appointed chief executive, president and chairman of CHAMPPS ENTERTAINMENT INC., franchisor and operator of 63 Champps dinnerhouses, following the resignation of WILLIAM BAUMHAUER. As chief executive of Melville, N.Y.-based SBARRO INC., O'Donnell had served on Champps' board of directors since 2002. PETE BEAUDRAULT was promoted by SBARRO INC. the post of president and chief executive. He replaces Michael P. O'Donnell, who recently resigned to become chief executive of dinnerhouse operator Champps Entertainment. Formerly president of Hard Rock Café International, Beaudrault joined Sbarro in mid-2004 as corporate vice president and president of its quick-service division. To fill the vacant Oregon House of Representatives District 19 seat, the Marion County Board of Commissioners appointed KEVIN CAMERON, co-founder and chief executive of the 11-unit CAFE TODAY chain. That seat was vacated by Republican lawmaker Dan Doyle's resignation earlier this month amidst allegations of campaign finance mismanagement. LARRY BADER was hired by COSÍ, the 90-unit fast-casual sandwich chain based in Deerfield, Ill., for the newly created post of vice president of franchise sales. Most recently, Bader was vice president of franchise development at Atlanta Bread Co. KATE SMITH LAVELLE was named chief financial officer of DUNKIN' BRANDS INC., operator and franchisor of more than 12,000 Dunkin' Donuts, Baskin-Robbins and Togo's restaurants. She replaces JENNIE WILSON. CHERYL SLOMANN was appointed chief accounting officer at the CHEESECAKE FACTORY INC. Slomann, who previously served as the Calabasas Hills-based company's controller, will replace MICHAEL DIXON as the principal accounting officer, though Dixon remains chief financial officer and senior vice president for the 88-unit casual-dining chain. ROBERT L. HOGAN was named to the new position of senior vice president of marketing and strategic planning for AVADO BRANDS, parent of Don Pablo's Mexican Kitchen and Hops Restaurant, Bar and Microbrewery. A 25-year foodservice industry veteran, Hogan most recently served as a marketing consultant for The Restaurant Marketing Group in Concord, Mass. JACQUES PETRY was hired by contract foodservice giant, SODEXHO ALLIANCE, for the newly created position of chief executive of its continental Europe and South America business. The parent of Gaithersburg, Md.-based Sodexho USA, Sodexho Alliance, also stated that chief operating officer JEAN MICHEL DHENAIN will retire at the end of the year. SALLI SETTA, formerly culinary and beverage senior vice president at the group's 547-unit Olive Garden division was promoted by DARDEN RESTAURANTS INC., to executive marketing vice president at its 680-unit RED LOBSTER chain. Setta succeeds KIM LOPDRUP, who kept his title as Red Lobster executive marketing vice president after being named president of the brand last May. Darden also named TERRY STANLEY, former marketing vice president for ConAgra Foods' Healthy Choice brand, to fill Setta's post at Olive garden. Effective immediately, RAJ RAWAL was named by BURGER KING CORP. to senior vice president and chief information officer. BK said Rawal was president of Axya Corp., which helps large corporations improve their information technology systems. Rawal reports to GREG BRENNEMAN, BK's chairman and chief executive. According to the company, COO WILLIAM VAN EPPS has signed a two-year extension at $500,000 with PAPA JOHN'S INTERNATIONAL. The deal provides Van Epps with 10,000 stock options per year. Van Epps is responsible for Papa John's operating plan, franchisee relations and marketing. HUHOT MONGOLIAN GRILL LLC, franchisee of 11 restaurants, named MOLLY VAP, founder Andy Vap's sister, to the newly created position of director of franchise development. Vap has previous marketing experience with Clorox.
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| NEWS
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Following a recent food scare in Shanghai, YUM! BRANDS INC. 's China division,
which operates 1,200 KFC units in the country, said it would invest more than
$240,000 to develop a "state-of-the-art food safety inspection laboratory" in
which a red dye linked to cancer showed up in some of the chain's "New
Orleans" flavor roast chicken wings and chicken burgers. Meanwhile, published
reports said the Chinese government has detained a manager of TIAN YANG FOOD
CO. of Guangzhou, the supplier apparently found to be the source of the dye,
which is known as Sudan I.
The busiest MCDONALD's restaurant in the world is located in Pushkin Square in Moscow, not in America. The store has served 30,000 customers a day since they opened January 31, 1990. With the addition of cabbage pie among other traditional Russian food items, the menu is essentially the same as in the United States. The Pushkin Square restaurant is part of a growing real estate empire that ranks McDonald's among the largest corporate landowners in Russia. Following McDonald's lead, other big companies are getting their foot in the door by becoming real estate developers. McDonald's early lock on top locations helps it stand up against other corporations seeking a place in Russia, including coffee giants like STARBUCKS, which has yet to enter the country. KIELD SORENSEN passed away several weeks ago in Hawaii from complications of a traffic accident at age 67. Sorensen was a local restaurant owner and Chef, ex-VP of Research & Development for CHEVYS RESTAURANTS (assisted in founding the chain) and worked with a number of other restaurant chains. His career began in Copenhagen Denmark at one of the five star Hotels and he worked for numerous hotel chains in America before settling in the Bay Area. With the debut of a franchised unit in Athens, Ga., RAVING BRANDS began the regional rollout of SHANE'S RIB SHACK, its newest fast-casual brand, which is operated by SHANE'S RIB SHACK ATHENS ONE LLC. According to a Raving Brands' spokeswoman, FULL PLATE FOOD CO. LLC will open a Shane's in Buckhead and operators JOSEPH STOCKDALE and THOMAS HAYNES will debut a unit in Conyers by May 31. Despite the fact that sales at WENDY'S restaurants in Northern California dropped when a woman claimed she found a severed human finger in a bowl of chili while dining at a franchised unit in San Jose, Calif., PETER OAKES, a restaurant analyst with PIPER JAFFRAY & CO. in New York said Wendy's sales nationwide have not been hurt by the incident and he doesn't expect the chain's business to suffer long-term. Based in Dublin, Ohio, Wendy's International said it concluded that none of its employees or suppliers was the source of the finger. An online training program has debuted at BIG BOY RESTAURANTS INTERNATIONAL LLC, operator and franchisor of 455 family-dining units. The new program, scheduled to be updated on a biweekly basis is provided by Bellevue, Wash.-based KNOWLEDGE ANYWHERE. The system covers customer service, new products, company initiatives and other relevant information and employees can train on laptops at units during their workdays, rather than off-site or after hours. Officials have said that plans to bring the popular New York restaurant MEGU to Los Angeles have fallen through. The partnership has dissolved for unspecified reasons between FOOD SCOPE NE W YORK LLC, which operates Megu in New York, and SBE RESTAURANT GROUP in Los Angeles, which operates several restaurants and nightclubs in Los Angeles. The company announced that KRISPY KREME DOUGHNUTS INC., operator and franchisor of 401 units, gained additional time to file overdue financial statements without defaulting on its $150 million credit facility. In a statement issued by the company, it was announced that Krispy Kreme's current lenders agreed to extend the date when the company would default on its loans for failure to deliver financial statements for the quarter ended last Oct. 31. Krispy Kreme's deadline to file its financials or default on its credit facility was March 25th. This is the second extension from its lenders. According to a Dow Jones report, KRISPY KREME DOUGHNUTS INC.'s company spokeswoman, AMY HUGHES, announced Krispy Kreme decided to close six test outlets located in Wal-Mart stores. Hughes reportedly said the test units were closed because of lower-than-expected sales and not because of the company's recent financial situation. Another lawsuit has been filed against KRISPY KREME DOUGHNUTS INC., this one on behalf of workers who claim they lost millions in retirement savings and profit sharing stock plans because executives allegedly failed to provide "complete and accurate information" regarding Krispy Kreme stock. The class-action suit, filed in U.S. District Court, seeks relief for participants in Krispy Kreme's 401(k) and stock ownership plans. The suit names as defendants former CEO SCOTT LIVENGOOD, former board member JACK MCALEER, former chief financial officer RANDY CASSTEVENS and current CFO MICHAEL PHALEN but does not seek punitive damages. The complaint alleges that they should have sold the company's stock from the plans when the investment became "imprudent". Dallas-based Pizza Hut, a division of YUM! BRANDS INC., is testing a bistro concept at nearly 50 units nationwide from Ohio to Wisconsin. PIZZA HUT franchisee FUGATE ENTERPRISES of Wichita, Kan., has opened a 5,300-square-foot concept dubbed "Italian Bistro". The bistro menu features a variety of new pastas, like Italian sausage penne and chicken commodore; personal-sized pizza varieties, including a margarita and buffalo chicken; and toasted sandwiches, such as meatball, chayote chicken, and roasted turkey provolone. Home delivery operator and franchisor with 70 restaurants in 17 states, STEAK-OUT FRANCHISING, said the first two of 25 planned Jacksonville units will open by year-end. According to President DONALD HARKLEROAD, 19-year-old Steak-Out, which is based in Norcross, Ga., expects to double its unit count in 10 years with additional expansion in Tampa, Fla., and St. Louis. Because of STARBUCKS CORP.'s recent agreement to market a coffee liqueur product with JIM BEAM BRANDS in on-premise and retail locations but not in Starbucks stores, PAX WORLD FUNDS, which bills itself as the first socially and environmentally responsible mutual fund in the United States, said it had divested 375,000 shares of Starbucks Corp.'s common stock worth $23.4 million. Pax said it applauded Starbucks' track record on the environment, sustainable business practices, efforts to promote Fair Trade coffee and its commitment to its employees and charitable giving. However, the fund said its policy is to avoid investing in companies that produce liquor. Franchise deals were signed by HUHOT MONGOLIAN GRILL LLC to open five new stores by August 2006, in San Antonio; Fraser, Mich.; Sioux Falls, S.D.; and Davenport and Council Bluffs, Iowa. Founder ANDY VAP said he is traveling to the Middle Eastern country of Qatar as well as Mongolia in northern Asia to meet with potential franchisees. According to a report in The Spokesman-Review, FRED GLICK, the president of Oceanside, Calif.-based HOOTWINC LLC, a HOOTERS operator with 20 locations in four states, said his company will open a 6,000-square-foot mini-casino operation called The Owl Club in Spokane, Wash. Glick said the casino will adjoin a 6,000-square-foot Hooters unit already under construction and is scheduled to debut in July. A licensing agreement was signed between ARAMARK CORP. and CAMILLE'S SIDEWALK CAFÉ, a 60-unit chain of fast casual restaurants based in Tulsa, Okla. Senior director of franchise brands for Philadelphia-based Aramark, DIANE COYNE, said Camille's units will be opened in several markets, including corporate, university and health-care accounts. Separately, Aramark was awarded the contract to manage foodservice at the Cameron County Jail in Brownsville, Texas. B.R. GUEST RESTAURANTS opened its second BLUE WATER GRILL location by venturing into the Chicago market. The original Blue Water Grill is in New York. The operator of two PANDA EXPRESS units at O'Hare International Airport, CRUCIAL INC., is at risk of losing its minority-business status after records uncovered by the Chicago Tribune showed that it apparently won its concessions contract in spite of city officials' knowledge that it was not minority-owned and operated. Even though records listed TONY REZKO as vice president and general manager in charge of operations, rather than JABIR HERBERT MUHAMMAD, a black individual who originally was listed as Curia's primary owner, documents show the city certified it as a minority business eligible for city contracts in 1997. DOC GREEN'S GOURMET SALADS, a sixth brand by RAVING BRANDS, parent of the Mama Fu's Asian House, Moe's Southwest Grill, App.'s Coffee, Planet Smoothie and Shane's Rib Shack chain concepts, debuted in Atlanta. Spokeswoman HEATHER GRAHAM said the unit will market itself as a destination for "comfort food, diet food, meat-and-two and everything in between". She said the group intends to open 10 Doc Green's in Atlanta by year-end and is targeting Charleston, S.C., and Jacksonville, Orlando and Tampa, Fla., as growth markets. The Atlanta Business Chronicle recently reported that TRIARC COS., parent of ARBY'S LLC, intends to relocate the 3,350-unit chain's headquarters from Fort Lauderdale, Fla., to Atlanta in connection with an announced plan to merge with 774-unit Arby's franchisee RTM, the chain's New York-based franchisor. The 642-unit quick-service chain, WHATABURGER INC., acquired 13 franchised restaurants from four franchisees in northern and central Texas, bringing its number of corporate-owned restaurants to 486. BLIMPIE INTERNATIONAL INC., will feature two new meatless menu items beginning this spring: the Garden burger's Garden Fresh and Santa Fe subs. Prices will range from $3.49 to $3.60. The Garden burger items will replace the Morning Star Farms brand meatless options available previously. Blimpie officials said Garden burger had developed the sandwiches exclusively for Blimpie. Also, Blimpie now describes itself "a contemporary deli" with new menu items, a store redesign, a new logo and a marketing campaign, which will include ads that reference an episode of "Sex and the City". Owner of the award-winning L'ETOILE restaurant in Madison, Wis., ODESSA PIPER, plans to sell the business this spring to TORI MILLER, her chef de cuisine, and his sister TRACI. PepsiCo Foodservice sponsored the 2005 Nation's Restaurant News FRANCHISE EXCELLENCE AWARDS last month. The awards honor companies and individuals for superior leadership and performance in franchise management. MYRIC & MYRIC INC., a Charles's Grilled Subs franchisee was the winner of the 2005 Franchisee Star Award, AZIZ HASHIM, president of NATIONAL RESTAURANT DEVELOPMENT INC., a Checkers Drive-In franchisee won the Franchisee Entrepreneur of the Year Award and GROUND ROUND/THE INDEPENEDENT OWNERS COOPERATIVE LLC was the winner of the Leadership in Franchise Management Award. Two former female managers at CHECKERS DRIVE-IN RESTAURANTS INC. who claimed a male area manager sexually harassed them will be paid $206,000. A spokeswoman for the company, which operates or franchises 407 Checkers and 389 Rally's Hamburgers units, said it had decided to settle because it was less costly than defending itself in court. The spokeswoman said the company could find no evidence to corroborate the women's claims. According to a survey by the NPD GROUP research firm in Port Washington, N.Y., approximately 62 percent of customer traffic for takeout is serviced by independent, full-service restaurants, while 38 percent flows through chains. Takeout traffic at independent casual-dining locations rose 6 percent in 2004, after being down 2 percent in 2003. For chains, takeout traffic also was up 6 percent in 2004. Parent of Denver-based VICORP INC., owner and operator of more than 375 Village Inn and Baker's Square restaurants, VI ACQUISITION CORP., is suing the family-dining chain's former owners and employees for allegedly misrepresenting information and failing to disclose certain facts, including Vicorp's alleged failure to comply with certain labor laws. Last December, Vicorp said it had agreed to pay $6.55 million to settle two class action lawsuits that claimed the chain had violated California law regarding meal and rest breaks for employees. The company announced that BAJA FRESH MEXICAN GRILL franchise owner, ED CASEY, opened a unit in Bend, Ore. that includes a drive-thru pick-up window for phoned-in orders, a first for the fast-casual brand. Guests at the freestanding restaurant also can order and pay at the window and then wait in a designated parking spot for delivery to their cars. Owner of the former LE CIRQUE 2000, SIRIO MACCIONI, signed a lease to open a restaurant in the Bloomberg building in midtown Manhattan. According to a representative for Macaroni, the new restaurant is slated to open by early 2006 and may possibly be called Le Cirque. Le Cirque 2000, which had been located in the New York Palace Hotel, closed in January. Also, the Macaroni family is looking to open a third branch of their more casual restaurant, OSTERIA DELCIRCO, in Paris sometime next year. Franchisee SAVIN FOODS USA had agreed to open 15 locations in Connecticut according to MATCAL INC., operator and franchisor of eight-unit WINGS OVER. According to MARK SIMONS, Metcalf's president, Saving Foods also purchased two branches from Metcalf, in Storrs and West Hartford, Conn., and agreed to open two new restaurants a year. He said Saving Foods also bought an option for expansion in Rhode Island and eastern Massachusetts. TRIMARAN CAPITAL PARTNERS, a New York-based private equity investment firm, has completed the acquisition of CHARLIE BROWN'S, the 55-unit operator of three dinner house brands, from CASTLE HARLAN INC. for $140 million. RUSSELL D'ANTON, CEO, and members of the senior management team are investors in the company and will remain in their current posts. Investment firm PIPER JAFFRAY & CO. has been hired by CLAIM JUMPER RESTAURANTS to explore options for stepping up growth, including a potential sale of the 34-unit chain or going public. Chief financial officer BILL HUSTEDT said construction on the first Chicago unit has begun, and the chain's 10 newest units, with an updated design, have averaged $8 million in annual sales. A trademark infringement lawsuit was settled with QDOBA RESTAURANT CORP. against another fast-casual operator, Atlanta-based MOE'S SOUTHWEST GRILL, over its use of the word "naked." Qdoba filed suit last winter to stop Moe's from using the phrase "Buck Naked" to describe a burrito made without a tortilla. Qdoba claimed it already had trademarked the term "Naked Burrito" to refer to its dish of meat, rice, salsa and cheese served on a plate instead of wrapped in a tortilla. According to Qdoba, Moe's admitted in the signed agreement that "Naked Burrito" is a valid, federally registered trademark and agreed to stop using "Buck Naked," beginning June 18. Reportedly, several prospective buyers of the bankrupt BRIAZZ sandwich chain have offers pending for the 17-unit system. But creditors of Seattle-based BRIAZZ INC. are said to be displeased with its reorganization plan, which would provide debt repayment of just pennies on the dollar. A 177-unit BURGER KING franchisee owned by ALCABRERA, HEARTLAND FOODS CORP., said it has acquired 41 BK locations in Illinois and Indiana from JOHNSON ILLINOIS, WILSON MANAGEMENT and D&L, three BK franchisees. Bankrupt LE PETIT BISTRO INC., a group of 37-food court units operating in retail malls and airports on the East Coast was acquired by New York-based UNITED ENTERPRISE FUND, or UEF, for $7.1 million. The system will be managed by a new UEF group, BISTRO FOODS INC. Last November, Atlanta-based Le Petit Bistro filed for Chapter 11 bankruptcy protection following difficulties that began in 2003 when the state of Minnesota sued the then-80-unit chain for felony tax evasion. Last month, the company put itself up for sale. Franchisor of the Big Apple Bagels, My Favorite Muffin and Brewster's Coffee brands, BAB INC., said franchisees would open their first co-branded units of Big Apple Bagels and COUSINS SUBS this month in Cedar Rapids, Iowa. According to BAB representative LESLIE WALTERS, most of the full menus of both concepts will be offered. Parent of the quick-service Burger Time chain, STEN CORP., based in Minneapolis, acquired Holt, Mich.-based HOT 'N NOW LLC for $175,000. Having filed for Chapter 11 bankruptcy protection in January 2004, Hot 'N Now, which franchises 14 drive-thru burger units in Michigan, once attracted heavy expansion funding as part of the old PepsiCo Restaurants group and was overseen by its Taco Bell arm. Parent of KFC and Taco Bell, YUM! BRANDS INC., informed chief executive DAVID NOVAK that he is obligated to use the company's private corporate jet for both personal and business travel as part of an executive security program developed by Yum's board of directors. An activist affiliated with the group People for the Ethical Treatment of Animals splattered Novak with fake blood and chicken feathers in Germany in 2003. A nutrition program called Balanced Choices by COMPASS GROUP, the British foodservice contractor whose U.S. arm is based in Charlotte, N.C., was introduced for all its American divisions. Balanced Choices is expected to be in place at 2,500 Compass Group accounts by year-end. The program includes a mandatory 10-session nutrition education class for the company's chefs and unit managers and uses nutrition-oriented icons, recipes and marketing materials. Also, multisector chefs are required to take a one-day course in healthful food preparation at Johnson & Wales University. Published reports recently said a bookkeeper for GRAMERCY TAVERN in New York, a fine-dining restaurant owned by UNION SQUARE HOSPITALITY GROUP, was arraigned in Manhattan's Criminal Court on charges of second-degree grand larceny and falsifying business records. The reports indicated the bookkeeper, SANDRENE AUSTIN, allegedly stole more than $250,000 from the restaurant between 2002 and December 2004. A supervisor was said to have noticed accounting discrepancies and informed the police. Twenty-five DENNY'S restaurants operated by Scottsdale, Ariz.-based GOLDEN MANAGEMENT were shut down or foreclosed by the FLORIDA DEPARTMENT OF REVENUE. DOR spokesman DAVID BRUNS said a District Court of Appeals plea to revoke Golden Management's sales tax registration and six Circuit Court injunctions to bar the operator from doing business were taken after failed attempts to collect $2.6 million in tax and $1.9 million in penalties and interest. According to the Washington Business Journal, PHILLIPS SEAFOOD is slowing the growth of its 2-year-old fast-casual PHILLIPS FAMOUS SEAFOOD while it fine-tunes the concept. The company, which currently operates two units in Falls Grove Village Center in Rockville and Silver Spring, Md., previously said it would open 10 outlets in its second year of development, the Journal reported, and added that the company is not looking for new locations. An agreement was signed between JOEY'S ONLY SEAFOOD USA, in St. Paul, Minn. and RICHARD WRIGHT of Omaha, Neb., to open 15 units in Nebraska, Kansas and Missouri. Wright said he plans to open his first two restaurants by the end of 2005 in the Omaha and Lincoln, Neb. markets. According to DAVID KRISTAL, chief executive, 13 of the seafood units are operating in the United States. Atlanta-based MOE'S SOUTHWEST GRILL, a 200-unit Tex-Mex fast-casual chain, said Metropolis, Ill.-based LAKEE INC. had agreed to open 19 Moe's outlets over the next six years in the St. Louis area and one location in Paducah, Ky. LaKee franchises several restaurant concepts, including Nick's Family Sports Pub and Bucket's Neighborhood Pub & Grill. A division of Buffalo, N.Y.-based DELAWARE NORTH COS., DELAWARE NORTH COS. AUSTRALIA, is set to feed athletes at the 2006 Commonwealth Games, to be held in Melbourne, Australia next March. Chairman of the games, RONALD J.WALKER, said the company would feed 4,500 athletes from 71 countries, along with another 1,500 coaches and officials. A private equity firm that owns the Church's Chicken brand, CRESCENT CAPITAL INVESTMENTS INC., and CCI's parent company, FIRST ISLAMIC INVESTMENT BANK, are changing their names to ARCAPITA INC. Church's was bought by Atlanta-based Crescent Capital last November from AFC Enterprises for $390 million. Looking at a possible expansion outside of Florida, the 100-year-old COLUMBIA RESTAURANT GROUP in Tampa, Fla. launched its seventh fine-dining unit, at the 72-acre City Place complex in downtown West Palm Beach. The 312-seat West Palm Columbia restaurant operates in a 10,000-square-foot space. RICHARD GONZMART, Columbia's president and fourth-generation owner, said he admires the growth accomplished by Boston based Legal Sea Foods. The Gonzmart family is eyeing Atlanta as a possible expansion site, yet is wary of accumulating too much debt, he said. DUNKIN' DONUTS plans to open 100 new stores in the Detroit area by 2009 following an East Coast expansion. Franchisees in the Detroit area recently invested in a 14,000 square foot baking facility to produce baked goods for the region's stores. In a move to expand its Thickburger line, HARDEE'S will now include a Frisco Thickburger on its menu modeled after a similar burger the company retired two years ago. The Frisco will feature Swiss cheese, bacon, tomato and onion-flavored mayonnaise. Bethesda, Md-based HMS HOST, has partnered with Dallas-Fort Worth International Airport to open eight business centers that include outlets of Seattle-based STARBUCKS COFFEE in four terminals. HMS HOST/DFW JOINT VENTURES enlisted the involvement of three local minority firms, which will hold a 49-percent interest in the business centers. The business centers will be open 24 hours a day while the Starbucks outlets will be open during "normal operating hours". The operator of nine upscale casual restaurants known for offering as many as 250 draft beers, YARD HOUSE USA, plans to launch a new, more downscale concept called YARD HOUSE BAR & GRILL aimed at competing with such mass-market chains as Applebee's and Chili's. The new concept will feature some of the same Asian-inflected fusion dishes and the draft beers, but on a smaller scale. Lunch will be offered on weekends at the dinner-only concept. SHORTY's BAR-B-Q packs crowds into its four Miami-area locations, which have brought in $13 million in annual sales for more than 50 years. The restaurant attributes its success to its controlled growth program and intense site selection process for new locations. On a per capita basis, Anchorage, Alaska, has the largest number of coffee shops while California's Los Angeles-Long Beach area tops the list based on number of locations. Industry research says that even though the majority of Americans still drink most of their coffee at home, the retail coffee sector recorded a 7% annual growth rate through September 2004. Coffee shops, including STARBUCKS and CARIBOU COFFEE, are teaming up with consumer banks to offer customers beverages while they do their banking. FATZ CAFÉ and POPEYES CHICKEN & BISCUITS are creating a stir with effective advertising campaigns. Fatz Café is touting hometown values while Popeyes is promoting its Naked Chicken Strips with the help of a "naked" man. Under its Café fair trade practices program, STARBUCKS will purchase 1.7 million bags of certified coffee by 2007, an increase that will allow more purchases in Africa. Restaurant operators SHEETZ, DUNKIN' DONUTS and CHICK-FIL-A have all recently introduced new breakfast items for consumers on the go, while DENNY'S has introduced new coffee drinks, pancakes and egg dishes. BURGER KING introduced its Enormous Omelet Sandwich, a sausage patty, two eggs, two slices of cheese and three strips of bacon. To highlight the fun in its brand, the KRYSTAL COMPANY is featuring burger-eating champion Takeru Kobayashi on its food packaging and in-store materials and is also selling a Sackful Combo box for $9.99. Two franchisees of BUFFALO WINGS AND RINGS were behind the purchase of the Cincinnati-based chain, and they are currently looking to expand from 11 restaurants up to 300 restaurants nationwide. The BIG BOY family and the casual-dining FUDDRUCKERS brand, two prominent full-service chains, are expanding fast-casual "express" versions of their core concepts. Big Boy International of Warren, Mich., and Fuddruckers of Austin, Texas, share similarities in their fast-casual forays such as offering breakfast and they boast the respective signature hamburgers and other lunch and dinner items of the brands. The management of the New England restaurant company, PAPA GINO'S, has teamed up with a local equity investor, Bunker Hill Capital, to buy the concern for an undisclosed sum. RED ROBIN GOURMET BURGERS, INC. announced last month that the company was notified by the Nasdaq Stock Market Inc. that the their securities are subject to potential delisting due to the Company's failure to file its 2004 Annual Report on Form 10-K on a timely basis. Red Robin expects to complete its lease accounting review and has filed its Form 10-K once again putting them in compliance with the standards for continued listing on Nasdaq. With the change in drinking habits, SMITH & WOLLENSKY RESTAURANT GROUP hosts a week during which customers can pay $10 extra for lunch or dinner allowing them to sample up to 10 different wines. While the martini lunch may be dead, the wine lunch is alive and well. With the help of their wine suppliers, many restaurants are now hosting such events. Notorious for high turnover among servers and kitchen help, the restaurant industry is beginning to experience turnover in the executive level. A survey by brokerage firm, BEAR STEARNS CO., shows an increased number of senior management changes at major restaurant companies including MCDONALD's CORP., BURGER KING, YUM BRANDS INC. and STARBUCKS CORP. Even if customers like the food and prices of a restaurant, the noise can drive certain customers away according to some restaurant designers. Quiet restaurants are more likely to have carpeting and upholstered furniture while louder venues that attempt to attract a hip, younger crowd may have tile floors, no curtains and wooden benches. Many operators who close restaurants auction off their kitchen equipment to others in the industry, or even consumers in search of a high-end bargain. Even though auctioned items are sold as is and are usually cash only, a $50,000 walk-in freezer can fetch as little as $2,500. Residents of some of the world's emerging markets for restaurant chains including China and India lack disposable income for Western-style products and foods. According to one study, the size of a country's middle class determines the success rate for U.S. quickserve companies in that area, however, other factors include cultural environment, currency stability and regional tastes. Convenience store chain, 7-ELEVEN, is rolling out a new line of sandwiches. The chain has introduced wrap-style sandwiches it says are easy to eat on the go because they're packaged in a cup to fit in a car's cup holder. LANCE PERKINS, market manager for 7-Eleven's 2 South Bay area stores says, "This is designed so when you are not eating it, you can put it in your cup holder and it's not being squished, it stands straight up. It's not like the old wedge sandwich, or when you eat a hamburger and the juice flies all over the place." All the sandwiches are made to 7-Eleven's specifications by airline caterer LSG SKY CHEFS in San Jose.
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| FINANCIAL
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Saying the company would not restate prior year financial statements, BUFFALO WILD WINGS INC., operator or franchisor of more than 315 casual-dining restaurants, restated its most recent fourth-quarter and fiscal year results to account for lease accounting. Earnings per share decreased to 28 cents from 30 cents for the fourth quarter ended Dec. 26. Operator and franchisor of the 7,757-unit pizza delivery system, DOMINO'S PIZZA INC., repurchased and retired 4.4 million shares of its common stock from JPM ORGAN CAPITAL LP and its affiliates for $75 million, or $17.01 per share. According to Thomson Financial, for fiscal 2004, Domino's earned $1.12 per share and analysts expect the company to earn $1.25 in 2005. A fourth-quarter turnaround has been reported by MEXICAN RESTAURANTS INC., operator and franchisor of 80 restaurants. A profit of $24,136, or 1 cent per diluted share, for the quarter ended Jan. 2 was posted, versus a loss of $1.9 million, or 57 cents per share, in the year-ago fourth quarter. Twenty-percent-higher earnings for its third quarter on 11-percent-higher sales was reported by DARDEN RESTAURANTS INC., operator and franchsior of 1,368 Red Lobster, Olive Garden, Smokey Bones, Bahama Breeze and Seasons 52 restaurants. For the four weeks ended March 19, YUM! BRANDS INC. said U.S. blended same-store sales had risen 5 percent, including increases of 6 percent at Taco Bell, 1 percent at Pizza Hut and 10 percent at KFC. A 28-percent surge in second-quarter earnings was reported by SONIC CORP. as revenues rose 19 percent, boosted mainly by strong same-store sales throughout its system of 2,934 drive-in restaurants, the company said. For the fourth quarter, TRIARC COS. INC.'s ARBY'S restaurant division booked a profit, while sales for company-owned units rose 6.7 percent. For the quarter ended Jan. 2, Arby's posted an operating profit of $14.1 million, compared with a loss of $6.4 million, for the previous fourth quarter, when the company had recorded an asset impairment charge. Operator or franchisor of 788 double drive-thru restaurants, CHECKERS DRIVE-IN RESTAURANTS INC., reported a nearly 43-percent drop in profits for its fourth quarter ended Jan. 3, mainly owing to higher income tax expenses. A net income of $3.4 million, or 28 cents per diluted share, versus profits of $5.9 million, or 47 cents a share, in the year-ago quarter was reported by the company. A 38-percent increase in fourth-quarter income from continuing operations on a 12-percent jump in revenues was posted by LONE STAR STEAKHOUSE & SALOON INC., whose 267-unit namesake chain includes 251 branches owned by the company and 16 licensed to others. A 51-percent increase in fourth-quarter net profit to $272,000 for the period ended Dec. 26, the 13th straight quarter of positive same-store sales was reported by RUBIO'S RESTAURANTS INC., operator, franchisor or licensor of more than 150 Rubio's Fresh Mexican Grill "affordable fast-casual" outlets. Quarterly revenues rose 7.5 percent to $32.7 million. Saying its cash tender offer to purchase all outstanding common stock for $7.50 a share had been accepted, ERI ACQUISITION CORP., a company led by ELMER'S RESTAURANTS INC.'s chairman and president, BRUCE N. DAVIS, said it would take Elmer's private "as soon as practicable". ERI currently controls 91 percent of Elmer's outstanding common stock. According to the company, BJ'S RESTAURANTS INC., operator of 35 casual-dining restaurants, completed a $42.6 million private placement of common stock with institutional investors to fund restaurant expansion and other general corporate purposes. The transaction included the sale of 2.75 million shares at a purchase price of $15.50 per share. Blaming bad weather, WENDY'S INTERNATIONAL INC., said U.S. same-store sales for the four weeks ended March 6 had fallen 2.4 percent at company-owned namesake restaurants and declined 0.7 percent to 0.9 percent at franchised units. For February, MCDONALD'S CORP. said same-store sales for its burger chain worldwide rose 1.6 percent including gains of 4.6 percent in the United States and 1.7 percent in the Asia/ Pacific-Middle East-Africa region. The company said U.S. same-store sales were helped by a Chicken Selects giveaway. Fourth-quarter earnings rose to $12.3 million, from $1.5 million a year earlier, as revenues increased 2.2 percent to $259.8 million at LANDRY'S RESTAURANTS INC., operator of more than 280 casual-dining chain restaurants. February U.S. same-store sales at BURGER KING CORP., jumped 7.3 percent, including a 9.9-percent increase at company-owned restaurants and a rise of 7 percent at franchised stores, versus the year-ago period. Shares of KRISPY KREME DOUGHNUT INC., operator or franchisor of 401 doughnut and coffee shops, gained $1.38, or more than 22 percent in recent trading, the largest percentage gain of all foodservice shares over $3. The stock price jumped to close at $7.50, according to published reports, on speculation that legendary investor WARREN E. BUFFETT, chief executive of BERKSHIRE HATHAWAY INC., might take an investment stake in Krispy Kreme. Operator and franchisor of 498 CHUCK E. CHEESE'S restaurants, CEC ENTERTAINMENT INC., logged a 42-percent surge in fourth-quarter earnings as an extra operating week helped to boost sales for the period ended Jan. 2. Net profits at the Irving-based company were $15.6 million, or 41 cents per diluted share, versus earnings of $10.9 million, or 28 cents a share, in the fourth quarter of 2003. A 14.5-percent jump in fourth-quarter earnings on an almost 4-percent increase in total revenues was reported by PAPA JOHN'S INTERNATIONAL INC., operator or franchisor of 2,832 Papa John's pizza units. In the quarter ended Dec. 26, the company earned $9.4 million, or 55 cents per diluted share, up from earnings of $8.2 million, or 46 cents a share, in the fourth quarter of 2003. For the four weeks ended Feb. 25, CBRL GROUP INC. reported same-store restaurant sales increases of 2.8 percent and 1.6 percent for its Cracker Barrel Old Country Store and Logan's Roadhouse chains, respectively. In addition, CBRL said its board of directors had authorized the buyback of 2 million additional shares of the company's common stock. Operator and franchisor of 348 grill-buffet restaurants, RYAN'S RESTAURANT GROUP INC., reduced its previously reported fourth-quarter and fiscal-2004 earnings to account for an additional income tax expense of $1.1 million. The change lowered the company's fourth-quarter earnings to $8.2 million, or 19 cents per diluted share, for the period ended Dec. 29, versus previously reported profits of $9.2 million, or 22 cents a share. Many franchisees are confident on the prospects of the chain after a year of same-store sales growth at BURGER KING CORP. saying reports last year of 1,000 store closures were exaggerated and insisting, in the words of BK's once-skeptical largest operator, that a "significant turnaround" is under way. DARDEN RESTAURANTS credits its decision to send OLIVE GARDEN chefs to train in Italy for the chain's string of positive results with a recent 10.5% increase in same-store sales. Darden Restaurants will accelerate expansion of the Italian-themed eatery with an expansion plan that would make Olive Garden the largest chain in the company.
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| MARKETING NEWS
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Comedian BRUCE BRUCE, a regular on Comedy Central and BET's Comic View is featured in new TV spots for POPEYES CHICKEN & BISCUITS under the theme "Stand up for flavor". The campaign was created by Cramer- Krasselt of Chicago for the 1,823-unit Atlanta-based chain, a division of AFC ENTERPRISES INC.
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| HOSPITALITY - HOTELS
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With an opening scheduled for September 12, 2005, officials say that the HONG KONG DISNEYLAND theme park has already received 10,000 room reservations for its hotel since it opened a customer call center earlier this month. BILL ERNEST, managing director of operations at Hong Kong Disneyland, said, "It really took us by surprise, the volume of calls coming in." Although the park expects that approximately 40% of the visitors will eventually come from Mainland China, Ernest said that Hong Kong residents have made most of the 10,000 reservations at the park's 1,000 room hotel. The park is being build on reclaimed land at Penny's Bay on Hong Kong's outlying Lantau island and is a joint venture between the Hong Kong government and Walt Disney Co. A recent article in INC. MAGAZINE featured TOM LATOUR, Chairman and CEO of KIMPTON HOTELS AND RESTAURANTS, a company that owns 38 properties in 16 cities. The article stated that in an effort to find out where his guests like to travel on a frequent basis, LaTour travels to each of his hotels and personally conducts wine tastings for his guests talking with them personally. LaTour was quoted as saying, "It's a great way to find out where we might want to open up a new property". According to Thomas Callahan, co-CEO of PKF Consulting, a lodging industry research firm, Kimpton "Is an exceptional company. They are extremely creative and have now gone from a regional boutique hotel chain to a national presence. Tom deserves all the credit for that." Going beyond the wine tastings, LaTour often stays at fleabag hotels searching for properties for acquisition. He makes sure that a new acquisition won't prove to be a money pit. LaTour experiences firsthand the plumbing, heating and electrical systems, troubleshooting details down to how well the stopper in the bathroom sink works, his pet peeve. Kimpton renovates old hotels that have either fallen on hard times or there is historical significance associated with certain buildings. They do not build hotels from the ground up. Such an acquisition is the circa 1795 Tariff Building in Washington, D.C. which Kimpton transformed into the HOTEL MONACO. Geographic diversification is a priority and Kimpton is expanding from Miami to San Diego, with more to come. "There are 30-odd cities on USA Today's weather map for a reason," says LaTour. "Those are where the business travelers are. I want a Kimpton hotel in each one." BILL LEE, a former Internet entrepreneur has recently opened EXTREME CABARET, the first in a planned line of adventure style hotels catering to action-sports enthusiast. The idea is that each outpost will serve participants of a specific pursuit, such as cliff diving. Located on a windswept Dominican Republic beach that is well know for kite-boarding, the Cabaret is a modest 20-room hotel that includes a skate-boarding ramp out back. Diane Clarkson, an analyst at Jupiter Research says, "Adventure travel is a fairly narrow niche in the travel industry, but it's growing." Lee says he's getting inquiries from a lot of wealthy "people in their 50s who are retired". The PLAZA HOTEL in New York is scheduled to close at the end of the month affecting some 900 workers. MIKI NAFTALI, president and chief executive of the company that owns the Plaza, ELAD PROPERTIES, is trying to modify current zoning so that they can convert the entire ballroom, along with two basement levels and some part of the first floor, into space for luxury stores. In addition to the stores, Elad wants to turn the structure into a multipurpose building comprising multi-million dollar condominium apartments and a much smaller hotel. However, the Plaza's owners say that they are not planning any structural changes in the major public spaces. The current zoning divides the hotel running through the center of the ballroom. One side of the ballroom along with the rest of the Plaza on that side of the line is in a residential zoning category that permits hotel rooms. The rest of the hotel on the other side is zoned for commercial use. The zoning change requested is separate from a proposal before the commission to designate half a dozen rooms inside the Plaza, including the Palm Court, the Oak Bar and the former Edwardian Room, as landmarks. LAS VEGAS SANDS CORP. is in advanced discussions with MARRIOTT INTERNATIONAL INC., STARWOOD HOTELS & RESORTS WORLDWIDE INC., FOUR SEASONS HOTELS INC. and INTERCONTINENTAL HOTELS GROUP for its plans to develop in Asia's gambling hotbed of Macau. The man-made island is the planned site for a $10 billion tribute to the Las Vegas strip. The hotels would manage the properties, having an equity in the stake in some cases, while Las Vegas Sands would operate the casinos, meeting spaces and convention centers under concessionaire agreements and the gambling license issued in 2002 by the Macau government. Last June, construction began on Las Vegas Sand's flagship resort, the VENETIAN MACAO and is on track for a spring 2007 opening. There are approximately 11,500 hotel rooms scheduled in the first phase of the project with a master plan for an eventual 60,000 hotel rooms and multiple mega-resorts. A group led by LEHMAN BROTHERS HOLDINGS INC. has agreed to buy 73 U.K hotels from INTERCONTINENTAL HOTELS GROUP PLC. for $1.9 billion. The Windsor, England hotel company's chains include HOLIDAY INN and CROWNE PLAZA. MARRIOTT's general managers of its full-service hotel brands recently attended a conference at the five-start J. W. MARRIOTT GRANDE LAKES HOTEL, which sits on a lake next to the RITZ-CARLTON, also a Marriott brand. The conference, intended to rally the troops, focused on not only getting room rates us as demand surges, but to incorporate superb new design elements into their brands, from three-star hotels to the most luxurious niches of the five-star category. Americans who travel a lot are very interested in the interior design at these hotels. Research indicates that hotel design is now having a clear effect on the home design market. Business travelers are bringing design and product ideas home, and creating a small revolution in the home products market so that retailers are increasingly promoting merchandise based on things travelers see in quality hotels. In addition to getting ideas for beds and bathrooms, people staying at hotels are also taking notice of how the public spaces work and are incorporating those same ideas into their homes.
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| HOSPITALITY - CASINOS
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The new MORONGO casino and hotel outside of Palm Springs will not feature the Native Americans' touches and the mainstream glitzy décor that sets apart many of California's more than 50 other tribal casino operations. Instead, the Morongo features a hip, Hollywood-style hotel and a casino designed to draw L.A.'s young gamblers. Headlining the casino's opening last December was pop music act Destiny's Child. According to MAURICE LYONS, the Morongo tribal counsel's 55-year old chairman, "Like anything else, you start with the young people. When they walk in that door, they're going to think they're in Las Vegas. That's where the money's at." The Morongo casino is located on the tribe's 32,000-acre reservation two hours outside of Los Angeles on Interstate 5, a well-traveled freeway to Palm Springs. The casino's ultramodern design is set apart from other tribal casinos in California that promote their native heritage. Many members of the Morongo tribe wanted to showcase their culture in the resort, however, Lyons talked them out of the idea. Says Lyons, "When I explained it to them, they understood that this is a profit-making enterprise so we can spend the money elsewhere." Nonetheless, the tribal counsel plans to cater to demands that their culture be showcased and Lyons says plans will be made to build a museum on the reservation located about a mile behind the casino.
As the company took a reorganization charge related to its filing for bankruptcy-court protection, TRUMP HOTELS & CASINO RESORTS INC.'s fourth quarter loss widened. A fourth-quarter net loss of $99.8 million, or $3.34 a share, was posted by the New York casino operator. Trump Hotels filed for bankruptcy protection last November.
BORGATA casino in Atlantic City is enjoying a huge increase in business with extensive publicity on their weight policy. Their new policy has prompted a lawsuit and a storm of news stories. The casino recently put all of its bartenders and waitresses, called Borgata Babes, on a scale and warned them that if they gained more than 10 percent of their weight, they would be suspended without pay for 90 days while they try to lose the added weight. If they do not lose the extra pounds, except for a valid medical reason, they will be fired. CASSIE FIREMEN, the casino's vice president for talent, said "The intent is to maintain the Borgata brand and image that our costumed beverage servers and costumed bartenders have been a driving force in creating." With a reported 92% room occupancy rate, it is clear that customers approve.
Joining a growing list of international operators interested in developing business in the city-state, property company KEPPEL LAND LTD. announced that they are teaming up with U.S. casino operator HARRAH's ENTERTAINMENT INC. to propose building a casino in Singapore. Details have not yet been finalized but Keppel Land said it will hold as much as a 30% stake in the venture and Harrah's will have at least 70% To pursue growth opportunities in the region, Harrah's plans to establish its Asian headquarters in Singapore and the joint venture with Keppel Lan is in line with its Asian growth strategy.
In a recent memorial to her father, Judith Buckingham wrote that DICK GRAVES was an astute, fair casino pioneer. Graves, founder of the Sparks NUGGET, believed that the small railroad town east of Reno had potential. He believed in his employees and back in 1954, he established the first pension and profit sharing plan in any Northern Nevada casino offering it to all employees, giving them a 10 percent raise for their 2 percent investment. Graves also believed in JOHN ASCUAGA, present owner of the Nugget, which recently celebrated 50 years in business, saying John had the right personality and the understanding of Graves' vision to continue what he had started. Graves believed that Ascuaga had the same morals, integrity and work ethic as he did and was willing to learn how to operate the business.
On April 28th, STEPHEN A. WYNN, industry legend, will open the first new resort, WYNN LAS VEGAS, in five years on the Las Vegas Strip with a $7,500-a-couple benefit gala. It will be the most expensive casino in the world, at a cost of $2.7 billion, boasting such features as a three-acre man-made lake, a Maserati/Ferrari dealership and the Strip's only golf course. For 2006, cash flow is estimated at $350 million, generating a modest return on capital of 13% and the average price of a hotel room is $270 per night. Wynn will be competing directly with MGM, whose largest shareholder, KIRK KERKORIAN, snatched Wynn's MIRAGE RESORTS INC. away from him five years ago in a hostile takeover. Anthony Curtis, publisher of the Las Vegas Advisor, a newsletter for gamblers, says "It's going to be the revenge of Steve Wynn. He has put everything into showing he's the guy who makes the best resorts in the world." Wynn bought the old Desert Inn with 2,700 hotel rooms and 111,000 square feet of casino space, about a third smaller than rivals such as the BELLAGIO, the VENETIAN, and the MGM GRAND. During the Super Bowl and the Oscars, Wynn ran TV ads featuring a grinning Wynn standing atop the new hotel proclaiming its "the only one I've ever signed my name to."
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| WINE REVIEW
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By: Kevin E. Olmsted, Fine Wine Manager – Western U.S.
Pacific Wine Partners
kevin.olmsted@pacwine.com
My friends do not understand why my job is necessary. They know that a bottle of wine is produced in a winery, and that they buy that same wine from a store or restaurant. Yet, that bottle seems to touch and profit many hands along the way. What gives? What justifies negociants, importers, suppliers, brokers, educators and distributors all getting a couple of bucks per bottle? Why not just sell the wine? Who came up with this system anyway?
The system to which you refer, the Three Tier System, was brought to you by the same folks who concocted the DMV and Department of Homeland Security - the government. When we repealed the silly notion of Prohibition by way of the 21st Amendment to the U.S. Constitution, each state was given the right to regulate the manufacture, transportation, distribution and sale of alcohol as it saw fit. Further, each of the aforementioned verbs were kept independent and not allowed to serve the function of the others: if you manufacture, you can't distribute, if you sell, you can't produce. Though there are numerous exceptions to these laws, the point I'm am trying to confuse you about is that there are three distinct and separate parts to the mechanism by which you get your favorite bottle of Cabernet from your favorite winery. It goes a little something like this.
Let's say a winery - call it "Chateau Wow" - makes amazing whites and reds. This is considered Tier #1 and is generally referred to as a "Supplier". Unless we all hear about, find, and then seek out Chateau Wow, none of us will ever be amazed. So Chateau Wow needs a selling mechanism. These folks can drive around to every store and restaurant in the world, for which they will need a separate license apart from their production license, or they can just open a tasting room, for which (again) they will need a separate license. All the while, the time it takes to drive around, get appointments, ship the wine, bill the accounts, collect the money, get reorders, or run a tasting room, etc. which will somewhat hamper Chateau Wow's ability to keep supplying amazing wines. So they will hire someone from Tier #2.
Chateau Wow will hire a "Distributor". The distributor employs a sales force whose job it is to call on retail shops, restaurants/hotels/resorts, and then Chain Grocery Stores. These sales folks represent a large portfolio of wine, ranging from Chateau Wow all the way to Chateau Guano. They may also sell spirits, beer, mixers and even nice wine glasses. The point is, distributors have the infrastructure to get appointments, sell, bill, collect, and resell. They also can leverage the size of their portfolio to Chateau Wow's advantage. If a Distributor A supplies all of the spirits use in the well of a huge restaurant/bar/nightclub, that account will probably give more attention to Distributor A and will then buy the necessary wines from Distributor A. In return for the volume of business, Distributor A will give that account huge volume discounts across their portfolio.
Finally, we little consumers have to come in to that same restaurant, or wine shop, or chain grocery store to get our favorite bottle of Chateau Wow. We can't buy it from the winery (unless they have a tasting room or we live near the winery), we can't buy it from the distributor (because they are not licensed for "retail" sales), so we seek out the #3 Tier. It is here that "the biggest selection" of fine wines and spirits are available at "unbeatable prices", blah blah blah.
But depending on your state of residence, the local flavor can be different. If you live in Utah, don't look for wine or spirits in your grocery store. You have to go to the State Wine and Liquor Store, conveniently owned and operated by the State of Utah. If you own a restaurant in Texas, your distributor can't sell you spirits with wine. You have to go to a retail shop, show them your restaurant license, and then buy 10 cases of Tanqueray for the bar. And if you own a winery, and you have a distributor in Nevada with whose performance you are not happy, you cannot simply take your wine to another distributor. You have to pull your wine out of the market for one full year, and then you may come back and hire another distributor (don't mind the analysis of how bad your distributor is doing against your goals versus selling NO wine for a full year in Las Vegas.)
If none of this makes sense, or you think the Three Tier System is a slightly bigger joke than the DMV, you are not alone. While it is an established system that employs a ton of people and "protects" a lot of business, it also makes Internet and winery-direct sales complicated, and tends to infringe upon consumer access to products. I don't make the rules, I'm just here to explain them. Now pardon me while I get back to that job that none of my friends understand.
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| RESUME TIPS
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By: Bettie Biehn
"Format, Format, Format"
In previous columns I've touched on the subject of resume format, but I've never addressed it directly. I know that the tried-and-true chronological format is preferred by many, and is alive and well on many a resume. This is not to say that this format is not a good way to go….I would simply like to suggest a different way of choosing your resume format.
Many of my clients are people who have been in the job market for more than a few years, who have often worked in a variety of settings, and who have a wealth of experience. For them, I usually suggest what is called a "combination" resume – that is, it is a combination of the standard chronological resume and a functional resume. The latter emphasizes skill sets and functional abilities while the "chron" resume highlights employment history.
I like to use a combo of the two, putting skills, functional abilities and accomplishments in the forefront, and then using the reverse chronological past job listing to reinforce these first sections. By placing relevant skills and abilities (and education, too, if it fits) upfront, you're giving a prospective employer your best points first, and then backing them up with your history. An earlier column, "Put the Good Stuff Up Front", encouraged resume writers to do just that, to get their very best material in front of the reader right away. This prevents that prospective new boss from wading through your work history looking for relevant skills. Most hiring managers or HR directors do not want to have to work to find a candidate's good points. It makes sense to make their jobs easier, right?
This combination format also works well in concert with the position description – you can list your skills, abilities, talents, accomplishments, and education as they relate to the job itself. You can also move these pieces around to suit your needs and to address an individual position description – if the job needs technical skills, move them up on your list, etc.
Make sure your resume features your strongest points, and meets the needs described in the job outline. To do that may mean changing the format, but change is good sometimes.
Bettie Biehn, a career human resources (HR) professional, is founder and president
of Career Change Central, LLC, a premier resume writing and career coaching
business. Bettie is also a freelance writer, and her published magazine articles
address key HR issues. Contact Bettie at bbiehn@careerchangecentral.com,
and visit her website, www.careerchangecentral.com.
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Dream-Lining Your Food Service & Hospitality Team! - Part II of a Two-Part Series By: Dave Timmons
"The quality of the play cannot surpass the quality of the cast." – author unknown
You are part of a Team. Whether you are formally in charge of people, a participating member, or a member by election or default, your influence helps determine your team's level of greatness. The simple truth is your team can become AWESOME! In fact, ALL teams have the potential of becoming phenomenal, record-setting, world class, untouchable, unmatched, and unforgettable…as long as ALL leaders have the courage to Dream-Line their teams. In last month's article (Part I) in this newsletter, we learned about the importance of having a vision and blueprint of what your ‘Dream Team' would look like. Let's now discover how Dream-Lining your team can make that vision a reality! ‘Dream-Lining Your Team' is defined as follows: Urgently assembling and developing the best group of people available for the results desired. Many teams underperform simply because their leaders don't understand the full scope of this definition. For example, some leaders don't sense the proper level of urgency. Others are good at developing people but don't make the tough decisions about acquiring the BEST people. Still others don't fully connect the right talent profile with the desired results. The best leaders of human talent understand you must do it all to reap the rewards of Dream Team performance. Once a Dream Team is assembled, their development becomes a continuous priority. Below are some high level but absolute Dream Team development tips for the three types of people on every team (discussed in last month's newsletter article.) THE TRAILBLAZERS: Profile: Self-motivated high achievers; Exceeds goals; Helps others; 1. Spend more, not less time with your top performers 2. Create special projects that highlight their special talents 3. Create skill transfer responsibilities to lift others to Trailblazer status 4. Give them up…to higher opportunities to seed new Dream Teams
THE CLUELESS: Profile: Quit and stayed; Not on board; Serious performance issues; 1. Stop infecting your Dream Team with Clueless people! 2. Free up their careers ASAP with candid feedback and concern 3. Offer suggestions on seeking a ‘better fit' opportunity elsewhere 4. Never transfer the Clueless within your organization…let them go to your competitors THE UNDECIDED: Profile: Up & down performance & commitment; Potential; Maintenance; 1. Set crystal clear, quantifiable expectations in writing 2. Set short yet reasonable timeframes for expectations to be met and sustained 3. Transfer total responsibility of achieving expectations to this person 4. Let them decide if they want to be a Dream Team member through their performance. Honor their decision.
It is likely some percent of your existing team is occupied by each of the three types above. How quickly and effectively you address their respective situations will determine when your Dream Team vision becomes reality. Many will decide to raise their game to stay on your Dream Team. Some will not. Dream-Lining requires courage, honesty, persistence, and a sense of urgency…all traits of great leaders. Somewhere between eliminating the Clueless, raising the Undecided, and creating more Trailblazers is a phenomenal Dream Team about to break out of the pack. The clock is ticking. Do you have the courage to become the leader of that Dream Team?
Dave Timmons is a Leadership Artist who helps people and organizations become BRILLIANT in the Art of Leadership. For more information on his programs, books, and music, please visit www.DaveTimmons.com.
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Super Chef : The Making of the Great Modern Restaurant Empires
By: Juliette Rossant
Veteran journalist, Juliette Rossant, known as the original "celebrity Chefs" columnist of Forbes Magazine has authored a book entitled Super Chef: The Making of the Great Modern Restaurant Empires which follows the careers and personal lives of chefs Wolfgang Puck, Charlie Palmer, Todd English, Mary Sue Milliken, Susan Feniger and Tom Colicchio. Rossant, who knows food, celebrity, and business, writes that these chefs are men and women who were not content to just run a great restaurant; they wanted to create multinational food empires and they did just that. Super Chef takes you on an amazing tour inside the business of the food business, one of the world's most glamorous -- and little-known -- industries. Rossant also goes behind the scenes with these chefs to divulge the key ingredients that go into making a Super Chef. Certainly, culinary talent remains the base component, but today's Super Chef must be a whole lot more -- equal parts entrepreneur, realtor, fundraiser, publicist, and media star. This book is a culinary journey that food lovers, celebrity watchers, and business fans will not want to miss. Learn more about Juliette Rossant. Visit her website at: http://www.superchefblog.com
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