Ethics & Integrity: A Crisis at the Top

Written by Bob Gershberg,
Executive Vice President, Dick Wray Executive Search

My first real job was not in the restaurant industry. I was hired as an appliance salesman at a large discount department store in greater NY just days after my sixteenth birthday. At my interview Stanley, the general manager, indicated he had picked me from a massive stack of applications because he knew from my last name I’d be a success in short order (Not exactly politically correct by today’s standards!) He warmly welcomed me to his team and while shaking my hand added, “…and if I catch you stealing, I’ll break your “expletive” fingers!” A few short months later, both Stanley and his assistant manager were being escorted out of the store in handcuffs by the FBI. I learned a bit about integrity that day, but readily lied about my age to get a waiter’s job at the cool new steakhouse down the road the very next day.

A recent survey of employees conducted by Fast Company magazine indicated 95% believe a CEO’s business ethics play a meaningful role in the way business gets done while only a mere 28% believe CEOs “have integrity”. Not overly surprising in the post Enron/WorldCom era. Integrity is defined by Webster’s as “firm adherence to a code of especially moral or artistic values, incorruptibility,an unimpaired condition, soundness”. This begs the following questions:

• What is the line between passion and ruthlessness?
• Are ruthlessness and integrity mutually exclusive?
• Do the pressures of expedient performance abet the lack of ethical or moral adherence?
• Can a viable leader create necessary trust without the highest levels of ethics & integrity?

Intellectually, we are all quite clear on the answers.

We in the recruiting world without fail query each candidate’s references about the subject’s ethics & integrity. “Beyond reproach”, “Absolute highest”, “I’d trust him with my life”, “None higher” are the only responses we accept. An “ok” is a failing grade in response to this question. It is perhaps odd to expect more of team members than of its leaders. The “official resignations” of C-level leaders we’ve witnessed in our own industry of late are cause for substantive reflection. Whether we accept the premise that power corrupts or greed is at times an uncontrollable human vice, it is imperative that our expectations remain unwavering. We have seen global conglomerates crumble as a result of integrity lapses. It is the ultimate charge of every CEO to cultivate a corporate culture. It follows logically that each and every decision made requires the highest ground when it comes to ethics & integrity.

All the best,

Bob

Bob Gershberg, Executive VP
bob.gershberg@dickwray.com

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PAUL HARTGEN has been named president and chief executive of the NEVADA RESTAURANT ASSOCIATION based in Las Vegas. He replaces SAM MCMULLEN, who had served as interim president since June 1 when VAN HEFFNER left the association. A 20-year veteran of the hotel and restaurant industry, Hartgen was previously president of the New Hampshire Lodging & Restaurant Association. He is charged with improving the Nevada association’s industry ties as well as communication within the organization, among other duties, the NRA said.

LARRY BEHM was named to the newly created position of vice president of operations, support and innovation for PANDA RESTAURANT GROUP, operator or franchisor of more than 700 Panda Express locations worldwide. Panda said Behm is expected to help the company in achieving its goal of expanding to nearly 1,500 locations in the next three years. Prior to spending four years with Taco Bell as vice president of restaurant systems engineering, Behm served as a consultant to Panda Restaurant Group for the past six months and led its drive thru improvement team.

DANIEL BARRANTI , has been named vice president of franchise sales and operations by CATALINA RESTAURANT GROUP INC., parent to the Coco’s Bakery Restaurant and Carrows Restaurant chains. He was formerly vice president of operations for Burger King and Denny’s franchisee C&L Restaurant Group. Catalina also appointed BRENDA SCHERMERHORN director of lease administration and promoted TONY BARR to senior vice president of operations for both Coco’s and Carrows. MARK FICHTNER was named vice president of operations for Carrows. Catalina named CECI ECCLES, former senior manager for training and development, director of training for both brands.

KIM FEIL has been appointed to serve as senior vice president and chief marketing officer of SARA LEE FOOD & BEVERAGE. According to the company, Feil will “lead all marketing efforts for the company’s retail brands in North America.” Feil was formerly vice president and senior marketing officer at Kimberly-Clark Corp.

TORI HARMS has been named public relations manager by MCCORMICK & SCHMICK’S SEAFOOD RESTAURANTS INC. He will report to GREGG LEBLANC, who is the director of marketing. Most recently, Harms was the senior account executive for Rockey Hill & Knowlton of Portland.

WILL LIPHART was promoted by DAMON’S GRILL, the 120-unit casual-dining chain based here, to the new post of vice president of quality assurance, with responsibility also for food safety. Previously the 16-year Damon’s veteran was senior director of the chain’s Learning Center, director of operations and a regional manager.

RICHARD SCANLAN was hired as chief operating officer for CHAMPPS ENTERTAINMENT INC., operator or franchisor of 65 upscale-casual restaurants in 23 states. He replaces DON LAMB. From 1997 to 2000, Scanlan was Champps’ director of operations and he was recently one of the creators and vice president of operations for Carmela’s, a full-service division of Sbarro Inc. Also DAVE WOMACK was promoted to chief financial officer from his position as finance VP, and he replaces FRED DREIBHOLZ, who left the company.

MARK WOLFINGER will replace ANDREW F. GREEN effective September 26 th as chief financial officer at DENNY’S CORP. NELSON MARCHIOLI, Denny’s president and chief executive, said “Andrew has expressed a desire to move on to new opportunities at this stage of his career. He has been an integral part of the Denny’s turnaround.” Wolfinger was formerly chief financial officer of Danka Business Systems.

WILLIAM E . KOZIEL was promoted to the position of chief financial officer at COSÍ INC., the 92-unit fast-casual sandwich specialty chain. He succeeds CYNTHIA JAMISON. KEVIN ARMSTRONG, Cosi’s president and chief executive said “We believe Bill’s performance and rapid assimilation of the restaurant industry over the past year, as well as his prior experience, make him the right person to lead our finance organization into the future.” Koziel was corporate controller of sporting goods retailer Galyan’s Trading Co. Inc. before joining Cosí last September.

EDWARD GREENE was named strategic initiatives senior vice president, a newly created post, at CBRL GROUP INC. He was the former packaging and food purchasing vice president for Coral Gables, Fla.-based Restaurant Services Inc., Burger King’s exclusive U.S. purchasing agent. Greene will join the company Oct. 3 and report to CBRL chairman, president and chief executive MICHAEL WOODHOUSE.

JOHN ALLEGRETTO was named to chief supply chain officer by BJ’S RESTAURANTS INC., based in Huntington Beach, Calif. He will be responsible for all purchasing, inventory and distribution activities. An 18-year supply chain management veteran, Allegretto most recently worked with Pick Up Stix, the Asian quick-service chain that is a sister brand to T.G.I. Friday’s. In addition, BJ’s said that SAL NAVARRO, current senior VP of food and beverage, would become a part-time purchasing consultant to the company, effective Oct. 15. STEVE MINTZER and CHRIS PINSAK were promoted to regional VPs of operations, and RAY MARTIN was promoted to VP of culinary research and development.

APPLEBEE'S INTERNATIONAL has a systemwide focus on improving the company's people practices that was started with Chairman and CEO LLOYD HILL two years ago. Management retention at the 325-company-operated Applebee's restaurants has improved 10 points year-to-date, with turnover coming in well below the industry average of 50 percent. Retention of hourly employees was up 30 points since 2000 and retention of new hourlies is also on the rise. Approximately 40 percent of all new managers are now internal promotions and manager tenure was estimated above the two-year mark. Reinforcing the positive impact of employee retention are senior vice president and chief people officer, LOU KAUCIC, and executive director of field human relations, JOHN PRUTSMAN. Prutsman says, "We had all these great training tools, but we need to make sure the operators were accessing, reviewing and utilizing them. We marketed the catalog through the system and emphasized that the suppliers guaranteed the products. This effort brought into focus the treasure trove of training programs available and prompted the operators to select the ones they need to address their specific issues."

TECHNOMIC announced that gas prices are “finally” taking a toll on consumer spending confirming what a number of restaurant companies already know. In a their report, Technomic said that approximately 18% of restaurant customers have reduced spending in quick-serve establishments as a result of higher fuel costs. The comparable figure for casual-dining customers is 19%. RON PAUL, president of TECHNOMIC, said “It appears that the threshold has been reached where consumers are feeling the pinch. We are also seeing softness in restaurant same-store sales, which we track monthly, further validating a reduction in consumer spending.” APPLEBEE'S INTERNATIONAL, FRISCH'S RESTAURANTS and others have reported that high gas prices are dragging down comparable sales.

In an attempt to fend off a trademark lawsuit filed by the Estate of Jerry Garcia, franchisees of MOE'S SOUTHWEST GRILL are suing corporate headquarters according to court documents.

The franchisees want Moe’s corporate to indemnify them against any claims asserted by Garcia’s estate contending that Moe’s CEO, MARTIN SPROCK , is responsible for the chain’s marketing strategy. Garcia’s estate is suing Moe’s for improperly lifting Garcia’s image and song lyrics to push burritos and tacos and the estate also named Moe’s franchisees as defendants. Moe’s franchisees, in nearly identical complaints, state that Sprock required them to feature Garcia’s image and lyrics inside restaurants as part of an “interior signage package.”

A lawsuit filed in U.S. District Court in Atlanta against MCDONALD’S CORP . by the NATIONAL FRANCHISEE ASSOCIATION , representative of more than 7,000 U.S. and Canadian BURGER KING restaurants has been cancelled. The suite alleged unfair competition from its “Monopoly” game promotions from 1995 through August 2001. FRANK CAPALDO , the NFA group’s chief executive and executive director, has said they were seeking in excess of $500 million. The legal action alleged that the “rigged promotional games took business away from Burger King franchisees restaurants and allowed McDonald’s to generate windfall profits, customer loyalty and market share that it would not otherwise have obtained.” Attorney CHARNA SHERMAN of Squire, Sanders & Dempsey, who filed the lawsuit in U.S. District Court for the NFA, declined to comment.

A financial services firm based in Los Angeles, TRINITY CAPITAL LLC, has partnered with CHRIS SCANLAN, former president and chief executive of KAZI RESTAURANTS, to form a new company called TRINITY RESTAURANTS LLC, which will also be based in Los Angeles. The former chief financial officer of Kazi, EDDIE PARK, joins Trinity Restaurants. They intend to focus on the acquisition and management of quick-service and fast-casual restaurants. As the largest operator of Burger King and KFC outlets in Hawaii, Kazi Restaurants, said it also is the second-largest U.S. KFC franchisee, and operates other Yum! Brands concepts in eight other states.

PIZZA HUT has been replaced as the official pizza supplier of Qwest Field and the Seattle Seahawks pro football team by the nation’s sixth-largest pizza chain, PAPA MURPHY’S TAKE ’N BAKE, which specializes in bake-at home takeout. Last month, Papa Murphy’s began selling pizza at all 10 Seahawks home games, and will participate in many of the more than 200 other events tat Qwest Field throughout the year. Also, Papa Murphy’s plans to develop a “Seahawks Signature Pizza,” to be available exclusively at field outlets.

A second outlet of SAM & HARRY’S, the high-end steakhouse located in Washington, is scheduled to open in the Renaissance Worthington Hotel in Fort Worth, Texas, in late summer. LARRY WORK, owner, said he decided to open a second Fort Worth branch because the town “blends a small-town feel with big-city culture.”

SONIC CORP . agreed to acquire 15 units from a Tennessee-based franchisee. Sonic Corp. owns about 600 Sonic drive-ins and franchises some 2,400 to others.

In an effort to reduce debt and fund expansion elsewhere, Seattle-based TULLY’S COFFEE CORP. sold its trademarks and intellectual property rights in Japan to licensee FOODX GLOBE CO. LTD. Tully’s said Tokyo-based FoodX Globe Co., which operates 270 Tully’s coffee houses in Japan, agreed to pay $17.5 million. Tully’s will now have about 100 company-operated and licensed coffee bars in five Western states and a wholesale coffee business supplying supermarkets and foodservice accounts after the sale.

J U S T I N o n t ’)

According to a research note by Piper Jaffray analyst PETER OAKES, it is presumed that MCDONALD’S CORP. will announce an initial public stock offering for its CHIPOTLE MEXICAN GRILL fast casual chain at an analysts meeting this month. Reuters reported that Oakes met with McDonald’s chief financial officer MATTHEW PAULL and the chain’s president for North America, RALPH ALVAREZ. Also, the note reportedly stated that McDonald’s has looked at doing an unspecified “real estate-type transaction.”

Blaming their recent acquisition of nine JILLIAN’S dining and entertainment complexes for depressing yet-to-be-reported second-quarter results, DAVE & BUSTER’S INC. said it plans to convert most Jillian’s to the Dave & Buster’s concept this month and has closed the Jillian’s at the Mall of America in Bloomington, Minn. A net loss of 8 to 9 cents per share on a 16.8-percent increase in revenues to $111 million for the July-ended second quarter is expected. According to D&B, net loss would include a pretax charge of about $2.5 million, or 12 cents a share, for the Bloomington closure, which also would cause a $500,000 charge to be recorded in the third quarter.

A second MAGIC PAN CREPE STAND, a quick-service concept,was opened by LETTUCE ENTERTAIN YOU ENTERPRISES with plans to expand throughout the Chicago market. The restaurant is in the Northbrook Court Mall. The concept is a contemporary version of the former MAGIC PAN full-service chain that had different ownership and ceased operations about 20 years ago. It features savory and dessert crepes and two salads. According to company chairman RICHARD MELMAN, crepes are popular sellers at LEYE’s MON AMI GAB in Las Vegas.

According to a poll by THE GALLUP ORGANIZATION, Americans rate the restaurant industry as the most highly regarded business sector in the country. Last month, Gallup asked Americans to rate their image of 25 business sectors on a five-point scale from “very positive” to “very negative” in telephone interviews with 1,001 adults nationwide. According to the study, 58 percent of Americans had a positive attitude toward the restaurant industry while 8 percent had a negative attitude and 31 percent were neutral toward the industry. National Restaurant Association chief executive, STEVEN C. ANDERSON, said “Each and every day, the restaurant industry earns the respect of the American people” and added that U.S. restaurants would serve more than 70 billion meals and snacks this year.

BURGER KING has been accused by the heavy metal band Slipknow of illegally copying the ban's image by outfitting musicians in masks in its "Coq Roq" marketing campaign. Stating that they want a quick resolution to this issue so they can continue planning their ad calendar, Burger King has filed suit against the band.

RICK ROSENFIELD and LARRY FLAX, owners of CALIFORNIA PIZZA KITCHEN, believe the key to the chain's turnaround success and revenue boost is due to their Asian-influenced appetizers and salads.

A new prototype for BAJA FRESH MEXICAN GRILL opened in Willow Grove, Pa. featuring an exposition kitchen, softer lighting, warmer colors and state-of-the-art fixtures and equipment. The new store can seat about 100 people with indoor and outdoor seating utilizing 3,000 square feet of space.

With plans to open four of its concepts this October, RAVING BRANDS has rented approximately 15,000 square feet of space at the new ATLANTIC STATION development in the city's midtown area. According to a company spokeswoman, they plan to debut units of its fast-casual Moe's Southwest Grill, Mama Fu's Asian House, Doc Greens Gourmet Salads and PJ's Coffee and Wine Bar concepts. The Atlantic Station features both retail and entertainment shops, offices, hotels restaurants and residential units.

An agreement between FAMOUS DAVE’S OF AMERICA INC., and franchisee JP’S BAR-B-QUE NORTH LLC has been finalized and they will open 10 more Famous Dave’s Legendary Pit Bar-B-Que units in the Tampa Bay, Fla., area. The Fort Myers, Fla.-based franchise is owned by hospitality veteran JIM GYARMATHY, whose Gyarmathy & Associates Inc. is the franchise operator of 11 KFC units in Florida.

LARRY SALONE , a franchisee of QUAKER STEAK AND LUBE, a 14-unit casual-dining concept has agreed to open three units in Pa. The unit slated for the State College location would open in mid-January and a Harrisburg restaurant will open next fall followed by the Allentown location in spring 2007. Salome currently owns a food processing equipment engineering company in Dubois, Pa. He was a former restaurant owner in Cary, N.C.

Two new franchisees signed development agreements with DEL TACO for Colorado and Washington. One agreement, for five units in the Colorado Springs and Pueblo, Colo., areas, is with brothers PHILLIP and JORDAN FISHER and their father ROBERT FISHER. The other agreement with JERALD A. HANSON, C. CARLETON WALLACE and THEODORE K. STREAM, under the name DELQUATRO LLC, calls for the opening of three of the quick-service restaurants in the state of Washington.

Scottsdale, Az.-based CREATIVE EATERIES CORP., has acquired the fast-casual FIT-N-HEALTHY MARKET CAFÉ brand from FRANCHISE CAPITAL CORP. Creative Eateries plans to open the first Fit-n-Healthy Market Cafe in next year’s second quarter and wants to sell agreements for more than 20 units within the following year. They currently own 80 percent of the casual-dining chain Q’s House of Barbecue. Fit-n-Healthy Market Cafe is a concept that would combine a quick-serve restaurant with a retail store selling health-oriented products.

EAT ’N PARK RESTAURANTS announced that its 79-unit chain will replace its cooking oil for French fries, chicken and other fried foods with a trans-fat-free oil “to better meet the needs of today’s guests.” According to the company, the change reflects increased health concerns among experts over the link between trans fats and heart problems.

GOOGLE INC . announced that is has started a global search for two executive chefs to oversee preparation of the Mountain View company's most notable employee perk – free gourmet meals. SUSAN WOJCICKI, a Google vice president on the hiring committee, said, "It's been a challenge to get someone who has the scale and quality to live up to the company's expectations." Requirements for the position include five or more years as a sous chef and three years as an executive chef. Also, the candidate must be able to cook for vegetarians and carnivores and use organic food whenever possible.

An agreement was made by PAPA JOHN’S INTERNATIONAL to sell 84 company-owned outlets in major markets in Colorado and Minnesota to a new franchise group, PJCOMN ACQUISITION

CORP ., an affiliate of Washington, D.C.-based private equity firm MILESTONE CAPITAL MANAGEMENT. Former chief marketing officer of McDonald’s U.S. division , LARRY ZWAIN, is chief executive of PJ COMN’s.

DOHERTY BREADS, franchisee of PANERA BREAD, has agreed to open 11 bakery-cafes in Queens County, N.Y. Doherty Breads, headed by ED DOHERTY, a multiunit franchisee of Applebee’s and Chevys, previously agreed to open 20 Panera units in New York’s Suffolk and Nassau counties.

According to filings with the U.S. Securities and Exchange Commission, BRINKER INTERNATIONAL INC., operator or franchisor of about 1,500 other restaurants, including the 1,074-unit Chili’s Grill & Bar, 235-unit Romano’s Macaroni Grill, 33-unit Maggiano’s Little Italy, 135-unit On The Border Mexican Grill & Cantina and 21-unit Rockfish Seafood Grill chains, signed a letter of intent to sell its 90-unit CORNER BAKERY division. The potential buyer was not identified by the company and they did not specify terms of the deal.

A franchise agreement was signed by DAIRY QUEEN with Shanghai, China-based RCS GROUP CO. and Guangzhou, China-based GUANGDONG FOISON calling for them to open 14 Dairy Queen locations in China. Debut of the first four in Shanghai and Guangzhou is scheduled for the end of the month.

Former chairman, chief executive and president of RED ROBIN GOURMET BURGERS INC., MIKE SNYDER, has reimbursed the company $1.25 million for expenses covered under a restitution agreement. A class-action shareholder lawsuit was filed against RED ROBIN GOURMET BURGERS INC., the 275-unit casual-dining chain. LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP, a San Diego law firm, filed the complaint in U.S. District Court in Colorado seeking damages, interest and legal costs for Red Robin shareholders who purchased stock between Nov. 8, 2004, and Aug. 11, 2005. The suit cited issues related to the departures only two business day’s earlier of the company’s chairman, president and chief executive, MIKE SNYDER, and senior vice president and ex-chief financial officer, JAMES MCCLOSKEY. It is alleged that Red Robin and co-defendants Snyder and McCloskey violated securities regulations and issued “materially false and misleading statements regarding the company’s business and prospects” and concealed “improper self dealing by the company’s CEO.” After an internal investigation revealed travel and entertainment expenses and documentation the company said were inconsistent with its policies, Snyder retired Aug. 11 and was replaced by a Red Robin board member, DENNIS MULLEN. McCloskey resigned the same day. The following day, Red Robin’s shares fell 24 percent to close at $45.55. Red Robin said it believes that the allegations made in recently filed shareholder litigation “are without merit, and the company intends to vigorously defend [against] this lawsuit.”

Last month, REAL MEX RESTAURANTS INC., parent of the nearly 200 El Torito, Acapulco and Chevys Fresh Mex casual-dining eateries, relocated its corporate headquarters from Long Beach to nearby Cypress, Calif., in Orange County.

Marking the casual chain’s entry into the state of Florida, CAMERON MITCHELL RESTAURANTS LLC, is launching a new MITCHELL’S FISH MARKET restaurant in Tampa. Cameron Mitchell operates 26 restaurants under nine brands, including Cameron’s American Bistro, Columbus Brewing Co. and Mitchell’s Fish Market.

THOMAS KELLER, famed chef-restaurateur, is partnering with VINTAGE ESTATE HOTELS to launch a special-events and private-dining venture, with an opening planned in Yountville, Calif. next April. The business, called BOUCHON-VINTAGE ESTATE HOTELS CATERING, will feature “custom menus with an emphasis on casual French cuisine.” Keller will oversee all onsite events at the Vintage Inn and Villagio Inn & Spa, located at the Vintage Estate Hotel. Daily operations for Bouchon-Vintage Estate Hotels Catering will be jointly directed by Vintage Estate Hotels general manager, MARY CROWE; Bouchon’s director of operations, NICOLAS KURBAN; and, executive chef, JEFFREY CERCIELLO.

THE HOLLAND INC ., parent of the BURGERVILLE chain, is buying wind-generated electricity in amounts equal to nearly its total requirements in what is believed to be the largest commitment to that power source made by any U.S. fast feeder. The company believes that its purchase of wind power from northwestern Oregon and southwestern Washington utilities and non-profit groups will reduce atmospheric emission of ozone-damaging carbon dioxide by 8,700 tons a year and is equal to removing 1,700 cars from the road, they said.

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Early last month, RAVING BRANDS, operator and franchisor of the Moe’s Southwest Grill and Mama Fu’s Asian House chains and other brands, launched the prototype for its seventh concept, BONEHEAD’S GRILLED FISH, and fifth fast-casual brand, PIRI PIRI CHICKEN. In addition, the group has developed a kids’ entertainment concept, MONKEY JOE’S, which features pizza.

In its quarterly earnings statement released last month, OUTBACK STEAKHOUSE INC. said that OUTBACK STEAKHOUSE TROPICAL INC. became the sole owner of CHEESEBURGER IN PARADISE LLC, the entity that developed and currently owns 17 Cheeseburger in Paradise restaurants. OS Tropical, an Outback subsidiary, previously owned a 50-percent stake in Cheeseburger in Paradise LLC, with singer and songwriter JIMMY BUFFETT owning the other half.

Starting this month, chef-owner THOMAS KELLER will replace optional tipping with a mandatory 20-percent service charge at PER SE, his celebrated luxury restaurant in the Time Warner Center in New York. Common in Europe, the practice of all-inclusive service has been used at only a handful of U.S. restaurants. MICHAEL MCCARTY, owner of MICHAEL’S in Santa Monica, Calif., and New York is one such upscale practitioner, who for years opted for a service charge rather than optional tipping. However, several years ago, McCarty abandoned his longtime championing of that system of subsidizing server salaries and fringe benefits.

A class-action lawsuit, was filed last month on behalf of shareholders by the New York law firm SARRAF GENTILE LLP, alleging securities fraud against HOST AMERICA, a foodservice and energy management specialist based in Hamden, Conn. The suit alleges that Host America misrepresented a deal it had made with Wal-Mart to supply it with an energy-efficient lighting system and that the erroneous information caused Host America’s share price to rise nearly 354 percent between July 12 and July 22, when the Nasdaq exchange halted trading of the stock.

A private equity firm in New York, PALLADIUM EQUITY PARTNERS, announced the completion of its acquisition of TB CORP., parent of the TACO BUENO chain for an undisclosed sum, from JACOBSON PARTNERS, another private equity firm in New York. Former president of Brinker International Inc.’s Romano’s Macaroni Grill chain, JOHN MILLER, was named chief executive of 137-unit Dallas-based Taco Bueno and replaces STEPHEN CLARK, who is remaining with Jacobson Partners as CEO of its BERTUCCI’S ITALIAN RESTAURANTS.

In a statement issued by the company, KRISPY KREME DOUGHNUTS INC. will restate its past earnings through the third quarter of fiscal 2005 downward by $25.6 million to reflect accounting errors, thus ending Krispy Kreme’s internal investigation into accounting practices, which began last fall. Former chairman and chief executive SCOTT A. LIVENGOOD and former chief operating officer JOHN W.TATE, were blamed for failing to establish “the management tone, environment and controls essential for meeting the company’s responsibilities as a public company” according to the committee. Krispy Kreme, however, is still under investigation by the U.S. SECURITIES AND EXCHANGE COMMISSION and federal prosecutors.

MCALISTER’S DELI , based in Ridgeland, Miss., has been acquired by Atlanta-based private equity firm ROARK CAPITAL GROUP, operator or franchisor of 923 Carvel and Cinnabon units through its Focus Brands division, for an undisclosed sum. Roark said McAlister’s will operate as an independent brand led by its current management, including chairman, president and chief executive PHILIP FRIEDMAN.

In a bulletin linking at least 14 cases of rare Salmonella Typhimurium illnesses in six states to cake batter ice cream sold by COLD STONE CREAMERY shops, the U.S. FOOD AND DRUG ADMINISTRATION warned restaurateurs not to add ingredients that require cooking to ready-to-eat foods. The FDA bulletin indicated that the ice cream, which had been recalled by Cold Stone Creamery, contained an uncooked dry cake mix labeled “bake before use” by the manufacturer.

According to research firm, Technomic Inc., consumers rated RUBY TUESDAY their preferred casual-dining chain for takeout dining. Respectively, RED LOBSTER and OUTBACK STEAKHOUSE were ranked second and third. Seventy five percent of the survey respondents said they buy takeout or delivered meals from full-service restaurants at least once a month, with 30 percent of the regular users saying they would rather order takeout than eat in a restaurant, except for special occasions.

JOE FERNANDEZ has been named to the newly created position of vice president of operationsfor OCEDON COS., a 22-unit BURGER KING franchisee. Previously, Fernandez was franchise business leader at Burger King Corp. for six years and before that spent 18 years at McDonald’s Corp. in various operations posts.

In addition to cashless payment options by debit or credit card now being offered at THE KRYSTAL CO., operator or franchisor of the quick-service Krystal chain’s 433 restaurants, they are also expanding services in all of their 243 corporate-owned restaurants by providing free Wi-Fi Internet access to guests. According to the company, this announcement makes Krystal the only restaurant chain to have extended Wi-Fi access to all company-operated locations and the largest provider of free Wi-Fi of any fast-food chain nationwide. Participating locations can be identified by “Krystal HotSpot” window decals and in-store signage.

A federal court has “dismissed with prejudice” federal class-action claims brought against COSÍ INC., operator or franchisor of 94 fast casual sandwich and salad restaurants, by shareholders that participated in Cosi’s initial public stock offering in November 2002. According to a statement released by Cosí, the U.S. District Court for the Southern District of New York found that plaintiffs had failed to prove any “material misrepresentation or omission” by Cosí in the prospectus for its IPO in its decision. It was ordered by the court that there be a dismissal of all of the claims against the defendants and that a final judgment be entered dismissing the action.

Two franchise groups have agreed to open a total of six units according to CHURCH’S CHICKEN. Three units would be launched by SHAHID and ABDUL CHAUDRY of ARIANS INC. in Virginia Beach, Va. In addition, in the Dallas-Forth Worth market, LAWRENCE and MARY GILES expect to open three Church’s Chicken units.

In Tampico, Mexico, a DAIRY QUEEN operator has opened the chain’s first foreign DQ TREATWORKS location. It is the first of five of the dual-brand units planned over the next three years by Mexican franchisee DOPITAM. Co-branded with ORANGE JULIUS, the new concept recently debuted in the Pittsburgh Mills mall in Tarentum, Pa. The Deutsch Azccarraga family operates DOPITAM, which runs restaurant and dry cleaning franchises in Mexico.

ROBERT POITRAS , who chairs the new body and operates Carolina Brewery in Chapel Hill said that the NORTH CAROLINA RESTAURANT ASSOCIATION has launched the NC Licensed Beverage Council “to be the voice of restaurants that serve alcohol". According to SAM HOBGOOD, NCRA chair-elect, who operates Hillsborough, N.C.-based Hobgood Hospitality, the NCRA also endorsed the National Restaurant Association Educational Foundation’s ServSafe Alcohol program for restaurant staff training. PAUL STONE, NCRA president and chief executive, said the new council will lobby to adopt standards on premise alcohol regulations statewide.

In a move officials said was an affirmation to corporate responsibility, Irving, Calif.-based YARD HOUSE RESTAURANTS LLC, is discontinuing the use of the nine-unit chain’s namesake yard-long beer glass. The glasses, requiring a floor standing wooden holder to serve because they were so long, held three pints of beer, and officials believe that was too much to serve any guest at one time. However, half-yard glasses, which hold roughly a pint and a half, will still be available. Also, Yard House has slated the openings of four new outlets for 2006, in Brea, Calif.; Kansas City, Kan.; Glendale, Ariz.; and Las Vegas. A Honolulu branch is expected to open in early 2007. The company is set to open its 10th unit in Phoenix next month.

JOEL SCHWARTZ, president and CEO said that new leases signed by BENIHANA INC., operator of 72 teppanyaki and sushi restaurants under the brand names Benihana, RA Sushi Bar, Haru and Doraku, to open new RASUSHI stores in Glenview, Ill., and Tustin, Calif. reflect Benihana’s plan to accelerate expansion of RASushi. This will bring the brand’s total to eight units open and five under development.

Tulsa, Okla.-based franchisee QUALITY BRAND MANAGEMENT LLC has agreed to open Taco Bueno units in Arkansas according to TACO BUENO RESTAURANTS. Quality Brand Management is led by longtime Burger King franchisees MAX FELTON and RICK VERITY. The first would debut by year-end in Little Rock.

HOWARD SOLGANIK filed for Chapter 11 bankruptcy protection for SOLGANIK FOOD SERVICE MANAGEMENT, as well as for his grocery store consulting firm. According to a Dayton Business Journal report, the restaurants debts total between $500,000 and $1 million. Solganik operates two restaurants, the full-service SOLGANIK’S and the quick-service SOLGANIK’S TAKEAWAY AND CAFE.

KRISPY KREME DOUGHNUTS INC . has agreed to an equity-based “success fee” with turnaround firm KROLL ZOLFO COOPER LLC, who has been employed since January in an effort to overcome slipping profits and regulatory and legal investigations. Krispy Kreme said in a statement that New York-based Kroll Zolfo Cooper will receive a warrant, which does not expire until Jan. 31, 2013, for 1.2 million shares of Krispy Kreme common stock at $7.75 a share. The company said that the warrant can be exercised on the latter date of either Jan. 29, 2006, or 30 days following the appointment of a chief executive officer to replace STEPHEN F. COOPER, chairman of Kroll Zolfo Cooper and interim chief executive of Krispy Kreme.

A Phoenix-based franchise development company, FRANCHISE CAPITAL CORP., said first-time-franchisee RAJ SUTARIYA had agreed to develop 12 KOKOPELLI SONORAN GRILL restaurants in Michigan. Under the pact, two to three stores are to be opened each year, and the first is expected to debut in early 2006.

TOM SASSER, locally acclaimed dining veteran and chief executive of 12-unit HARPER’S RESTAURANTS INC., and PIERRE BADER, operator of TOWN, SONOMA and SONOMA KITCHEN, are partnering to launch a 150-seat expansion of Sasser’s popular tapas and wine bar, ARPA, on West Trade Street in downtown Charolotte, N.C.

After an investor group, New York-based hedge fund PERSHING SQUARE CAPITAL MANAGEMENT's appeal for WENDY’S INTERNATIONAL to sell off all but 50 of its 1,300 company-owned Wendy’s units, spin off its Tim Hortons division and buy back Wendy’s stock with the proceeds to boost shareholder value, the company has said that it will pursue a similar course, but on a smaller scale. Wendy’s said it would divest 15 to 18 percent of Tim Hortons in an initial public stock offering and use the cash to repurchase shares, pay down debt and increase its annual dividend ending months of speculation about the future of its highly profitable doughnut chain. The company also said that the Tim Hortons IPO could be completed by next March, and the rest of Wendy’s equity in the chain could be spun off over the next 18 to 24 months. In addition, Wendy's also said it would sell up to 414 Wendy’s to franchisees and close 40 to 60 underperforming units of the No. 3 burger chain and slow its rate of Wendy’s unit development to between 30 and 40 new units annually starting next year to save $50 million to $60 million a year in capital expenditures, compared with its 71-unit-a-year growth in corporate outlets over the past four years. an additional $1 billion for share repurchases and a 25-percent increase in its annual dividend, from 54 cents a share to 68 cents has been authorized by Wendy's board.

DAVID BURKE, chef-restaurateur, announced that he will open a 2,500-square-foot, dual-concept restaurant in the BLOOMINGDALE’S department store in New York in November. DAVID BURKE AT BLOOMINGDALE’S will have its own 59th Street entrance and will feature a fast-casual format and a coffee-wine-and-liquor bar. Burke said the fast-casual section will offer sandwiches, soups, salads, meat dishes, a pasta or risotto of the day and Asian-style dumplings and the bar will offer high-end coffees, pastries, tapas, soups, salads, sandwiches and such items as “lobster sticks,” “baby sliders,” baby calzones and pizzettes.

A multistate master franchise development deal has been signed for the Midwest between TACO DEL MAR and veteran Subway restaurant operator JOHN ROSBERG, who is expected to open his first Taco Del Mar unit this fall in Lincoln, Neb. The agreement with Rosberg ’s TDM DEVELOPMENT INC. of Norfolk, Neb., covers the states of Iowa, Minnesota, Nebraska and South Dakota.

A Reuters report said that increased activity in call options on MCDONALD’S CORP. for two straight days fueled rumors that private equity firms want to acquire a stake in the company for “certain real estate assets”. McDonald’s declined to comment.

Operator or franchisor of about 115 casual-dining restaurants, ROCK BOTTOM RESTAURANTS INC., announced that it has closed a refinancing deal allowing the company to lower its capital costs and continue an aggressive growth strategy. In a statement issued by Rock Bottom, under the new capital structure, they would more than double the current growth rate and open 17 new locations in 2005 and 21 new units in 2006, including both corporate and franchised restaurants.

Toasted sandwiches are the hottest rage in the fast food industry. SUBWAY sandwich chain has installed high-tech ovens and now offers customers nationwide the option of toasting their sandwiches. The world's largest restaurant chain, MCDONALD's CORP., is testing deli-style sandwiches, some toasted, at some 400 of its 13,600 plus U.S. restaurants. POTBELLY SANDWICH WORKS, a sandwich chain based in Chicago, says orders for its toasted sandwiches are continuing to grow steadily due to heavy television promotion of Subway's toasted option. BRYANT KEIL, chief executive of Potbelly's, says "Their advertising is helping spread the word." According to market research firm, TECHNOMIC INC., sandwich shop sales grew by about 9.5% last year to $16.8 billion. A possible drawback to the toasted sandwiches, however, is the process often adds about 20 seconds to overall preparation time, which is a considerable delay in the fast-food industry.

New companies catering to customers' growing desire for quick but healthy meals at home are opening up throughout the country. Such a company is DINNERS READY, based in Mukilteo, Washington. They offer customers the ability to assemble 6 to 12 meals in less than two hours at one of its kitchens. Each meal will feed six people, enough for dinner and lunch the next day averaging out to approximately $3 a serving. At Dinners Ready, the customer follows posted recipes and controls specific ingredients avoiding anything to which they are allergic or merely do not like. Preservatives and artificial ingredients are eliminated in their recipes. Vice president of the NPD GROUP, a consumer marketing research firm, HARRY BALZER, says, "We want to buy fresh, but we don't want to deal with it." With the help of these types of businesses, he says, "I can make pretty exotic meals, but I don't have to deal with buying ingredients, chopping vegetables and cleaning up." The whole concept saves time and helps the customer eat healthier. For an additional fee, customers can pick up meals already prepared by Dinners Ready employees.

Grocery stores like WHOLE FOODS MARKET are increasingly designed to appeal to those who like to eat but rarely cook. Many food stores are now striving to gratify immediate cravings, through ready-to-eat cuisine. STEPHEN DOWDELL, editor in chief of Progressive Grocer magazine says, "Virtually any major-sized new stores and a lot of remodels will have some sort of space set aside for in-store eating of ready-to-eat foods." Food stores offering large selections of prepared foods, along with places to eat them, are setting up these areas as easy in, easy out for the lunchtime crowd who isn't willing to go through the whole store. The new sections appeal to the senses in the case of AGATA & VALENTINA, an independent gourmet market in Manhattan. EMILY BALDUCCI, director of public relations, says "as soon as you walk in, you know you want to eat. What we did was create an on-floor kitchen cooking all day so you can watch and smell the food being prepared, which is very key." BILL BISHOP, the president of WILLARD BISHOP CONSULTING agrees with the importance of making the preparation visible. Bishop says, "Having people see the food being prepared is very important because it communicates the product is fresh."

For the fourth quarter ended June 26, PIZZA INN INC., operator or franchisor of 405 restaurants, posted a net loss of $112,000 on an 11-percent fall in revenues to $13.7 million. Pizza Inn earned $564,000 in the prior year’s fourth quarter. Same-store sales fell 1.5 percent.

For the four weeks ended Aug. 20, a 0.1-percent dip in systemwide same-store sales was reported by OUTBACK STEAKHOUSE INC., operator or franchisor of 1,250 restaurants, for its namesake steakhouse chain.

Same-store sales for the four weeks ended Aug. 15 at CKE RESTAURANTS INC., operator or franchisor of 3,165 restaurants, were flat at Carl’s Jr. and fell 1 percent at Hardee’s compared with year-earlier levels. Nonetheless, CKE said it was “encouraged” by results at the 1,020-unit Carl’s Jr. and 2,029-unit Hardee’s chains, particularly as consumers “feel the impact of high gasoline prices.”

For the four weeks ended Aug. 21, APPLEBEE'S INTERNATIONAL INC. said same-store sales increased 1.3 percent including a 2.2 percent gain at franchised restaurants. At corporate units, same-store sales for the period decreased 1.5 percent compared with year earlier results.

A sharp improvement in second-quarter earnings was reported by AFC ENTERPRISES INC., franchisor or operator of 1,827 POPEYES CHICKEN & BISCUITS restaurants in its second-quarter results, compared with year earlier earnings, on lower operating and shareholder-litigation expenses and a systemwide same-store sales increase of 1.9 percent. For the quarter ended July 10, AFC’s net income was $4.9 million compared with $6.1 million a year earlier.

Compared with year-earlier results, BENIHANA INC., operator or franchisor of 93 Japanese restaurants, credited strong company-wide same-store sales and lower commodity prices for more than doubling first-quarter earnings on a 13-percent increase in revenues to $74.1 million.

The operator of 16 upscale steakhouses, THE SMITH & WOLLENSKY RESTAURANT GROUP INC., reported a 1.9-percent dip in second-quarter profit to $104,000 on total sales that rose 6.5 percent from the year earlier to $32 million.

A 5-percent increase in third-quarter earnings on a 13-percent increase in revenues was reported by the STEAK N SHAKE CO., whose 439-unit casual-dining chain includes 45 branches owned by franchisees. For the 12 weeks ended July 6, Steak n Shake’s net income was $7.8 million, or 28 cents per diluted share compared with $7.4 million, or 27 cents a share, for the previous third quarter.

The operator and franchisor of 80 restaurants operating under six different concepts, MEXICAN RESTAURANTS INC., reported a 19-percent drop in second-quarter profit to $502,174, or 14 cents per diluted share, on higher depreciation and amortization expenses than the year earlier and losses related to the sale of assets.

Last month, WENDY’S INTERNATIONAL INC. said it had bought back 2 million shares of its common stock in an accelerated share repurchase transaction for about $98 million, with the proceeds earmarked for general corporate purposes. The company said the initial price paid per share was $49.10 and the company has about $1.1 billion remaining under its board’s share repurchase authorization.

A nearly 50-percent decline in first-quarter earnings was reported by BOB EVANS FARMS INC., operator of 594 Bob Evans family restaurants and 93 Mimi’s Cafe casual eateries, to $7.2 million, or 20 cents per diluted share, on a 23-percent increase in revenues to $395.6 million.

Stock rose 15.45 percent on the Nasdaq exchange for KONA GRILL INC., operator of seven upscale-casual restaurants, to close at $12.70 on its first day of trading on August 16th. Kona Grill priced the IPO of 2.5 million common shares at $11 a share.

Operator or franchisor of 327 Mexican-style grilled-chicken restaurants, EL POLLO LOCO INC., reported that second-quarter operating income doubled with a 9.8-percent jump in revenues to $61.2 million. For the quarter ended June 30, net profit was $2.3 million, compared with a loss of $270,000 for the year-ago period.

For the period ended July 4, COSÍ INC., operator of 91 fast-casual sandwich and salad restaurants and franchisor of two Cosí units, widened its second-quarter net loss to $1.9 million, from a loss of $1.6 million a year earlier. The results, however, included charges of $1.1 million in the latest quarter, versus $500,000 in the comparable quarter of 2004, both for the repricing of stock options and amortization of deferred compensation related to restricted-stock grants.

For its fourth quarter ended June 29, BRINKER INTERNATIONAL INC., operator or franchisor of 1,269 restaurants, reported profit of $49.8 million, or 55 cents a share, down 22 percent from a year earlier. Revenue was up 2 percent at $1.04 billion.

Excluding a gain from the resolution of a tax issue on a 9.1-percent increase in revenues, JACK IN THE BOX INC., operator or franchisor of more than 2,030 namesake hamburger restaurants, posted a 7.1-percent increase in earnings per share for the third quarter. For the 12-week period ended July 10, net income was $23.9 million versus $20.7 million for the previous third quarter.

First-quarter net income increased 23 percent to $1.2 million, or 18 cents per diluted share, versus year-earlier net income of $950,000, or 16 cents a share at NATHAN’S FAMOUS INC., operator or franchisor 369 Nathan’s Famous, Miami Subs and Kenny Rogers Roasters restaurants.

According to published reports, for the six months ended in June, MCDONALD’S HOLDINGS CO. (JAPAN), the 3,700-unit group based in Tokyo that is 50-percent owned by MCDONALD’S CORP., posted a 58-percent drop in net earnings to $4.2 million.

An initial public offering of 13 million shares of common stock at RUTH’S CHRIS STEAK HOUSE INC. was priced at $18 a share, higher than the $15 to $17 each for 11.4 million shares the company had indicated previously.

For the second quarter ended June 28, NEW WORLD RESTAURANT GROUP INC., operator or franchisor of 659 bagel specialty bakery-cafes under the Einstein Bros., Noah’s New York Bagels, Manhattan Bagel and Chesapeake Bagel Bakery brands, posed a $4.3 million net loss on a 3.1-percent increase in revenues to $97.1 million.

A 93-percent surge in second-quarter profit on a 29-percent jump in revenues from year-earlier levels was reported by TEXAS ROADHOUSE INC., operator or franchisor of 204 casual-dining restaurants to $115.8 million.

Boosted by better-than expected results in Europe, MCDONALD’S CORP. posted a 4.9-percent jump in global same-store sales for July. Marking the chain’s 28th straight month of domestic growth, the company said its U.S. same-store sales rose 4.9 percent.

A fourth-quarter net loss of $27,000 was recorded by WORLDWIDE RESTAURANT CONCEPTS INC., which operates, franchises or joint ventures 310 SIZZLER restaurants, 112 KFC units located mainly in Australia and 21 PAT & OSCAR’S fast-casual restaurants, versus a profit of $661,000 in the prior fiscal year’s fourth quarter.

For the four weeks ended July 27, DENNY’S CORP., franchisor of 1,040 Denny’s restaurant, said same-store sales rose 1.6 percent at its 574 Denny’s outlets.

For the second quarter, FRIENDLY ICE CREAM CORP., operator and franchisor of 332 Friendly’s family restaurants and franchisor of 205 units in the Northeast, shifted to profit as revenues edged up 0.6 percent to $148.4 million on 28 fewer company-owned restaurants.

In the second quarter, BUCA INC., operator of 107 Buca di Beppo and Vinny T’s of Boston casual-dining restaurants, narrowed its net loss to $3.5 million, or 17 cents per diluted share, versus a net loss of $3.7 million, or 18 cents a share, a year earlier.

For the four weeks ended July 31, DARDEN RESTAURANTS INC., said samestore sales for its Red Lobster chain rose 4 percent, reflecting increases of 1 percent to 2 percent in guest counts and 2 percent to 3 percent in check average. At Olive Garden, same-store sales grew between 3 percent to 4 percent as guest counts rose by up to 1 percent and the check average increased 2 percent to 3 percent.

T.G.I. Friday’s largest franchisee, MAIN STREET RESTAURANT GROUP INC., with 53 units, reported an 89-percent jump in second-quarter profit on record revenues and a 10.8-percent increase in same-store sales over year-earlier levels. Main Street’s net income for the quarter ended June 27, was nearly $1.6 million, or 9 cents per diluted share, versus $821,000, or 6 cents a share, a year earlier.

According to a company announcement, DOMINO’S PIZZA INC., operator or franchisor of the 7,878 Domino’s Pizza delivery outlets, reported a 47-percent surge in second-quarter profit on strong sales both at home and abroad. For the quarter ended June 19, net income increased to $23.4 million from net income of $15.9 million in the second quarter last year.

Operator or franchisor of 2,998 pizza restaurants, PAPA JOHN’S INTERNATIONAL INC., booked a $10.9 million profit for the second quarter, compared with a $2.6 million loss last year, on a 5.3-percent increase in revenues. For the period ended June 26, Papa John’s reported net income of 64 cents per diluted share, versus a loss of 15 cents a share for the previous second quarter.

A 25-percent increase in second-quarter profit, excluding pretax impairment and closure charges booked in the year-ago period of $8.9 million related to the repositioning of company-operated restaurants was posted by IHOP CORP., operator or franchisor of 1,207 restaurants. For the quarter ended June 30, IHOP’s net income, was $11.9 million, or 60 cents per diluted share, compared with $4.4 million, or 21 cents a share, for the previous second quarter.

For the five weeks ended July 29, CBRLGROUP INC. said same-store restaurant sales increase 2.5 percent at its CRACKER BARRELOLD COUNTRY STORE chain and LOGAN’S ROADHOUSE chain were up 1.6 percent in July, reflecting a 2.5-percent increase in menu pricing, which helped boost the chain’s average check by 2.1 percent.

Operator or franchisor of about 115 casual-dining restaurants, ROCK BOTTOM RESTAURANTS INC., announced that it has closed a refinancing deal allowing the company to lower its capital costs and continue an aggressive growth strategy. In a statement issued by Rock Bottom, under the new capital structure, they would more than double the current growth rate and open 17 new locations in 2005 and 21 new units in 2006, including both corporate and franchised restaurants.

Systemwide same-store sales at PANERA BREAD CO. increased 8.9 percent for the four weeks ended Aug 9 at bakery-cafes open at least 18 months. During the period, corporate units reported an 8.2 percent jump while franchised units reported a 9.1 percent gain. Second-quarter revenues at Panera showed a 33-percent jump to $140.2 million. For the quarter ended July 12, franchise royalties and fees and fresh dough sales accounted for $31.1 million of the revenues.

For the four weeks ended July 27, DENNY’S CORP., franchisor of 1,040 Denny’s restaurant, said same-store sales rose 1.6 percent at its 574 Denny’s outlets. In its second quarter ended June 29, Denny's returned to profitability on a nearly 3-percent increase in revenues from year-earlier totals. The operator or franchisor of 1,584 Denny’s earned $2.1 million versus a net loss of $2.9 million for last year’s second quarter.

For its second quarter, CALIFORNIA PIZZA KITCHEN INC., operator or franchisor of 183 restaurants, reported a nearly 15-percent jump in profit on total revenues that rose 16 percent from year-earlier levels to $119.4 million.

Do Cover Letters Really Help?

By: Bettie Biehn

Cover letters used to be the mandatory sidekick to any resume, and it was unthinkable to send the resume solo. Today, however, the media that many of us use to send resumes do not lend themselves to cover letters, and many people consider cover letters old-fashioned, cumbersome and unnecessary. I’d like to come at this from at least two sides, and so I will present several opinions on the subject.

First of all, there is no “yes” or “no” to this subject. The most reliable phrase in the cover letter discussion is “it depends.” To cover letter or not depends upon many things, including the nature of the business, the job itself, the medium of transmission (e.g. email, industry jobsite, generic jobsite – Monster, CareerBuilder, snail mail, facsimile, etc.), the presence of an inside ally, and other factors.

On the plus side, a cover letter gives you an opportunity to personalize your application by addressing the letter to the best possible person , showing the hiring company that you not only have research capabilities but that you also know the right thing to do. A cover letter also gives you time and space to address items that may not fit on a resume, like ability to relocate, salary requirements – note: including the salary requirement (or not) is a whole other topic for another time-, special skills, keen interest in the job/industry, applicable volunteer experience, etc. Cover letters provide an opportunity to really punch up what’s important, and to emphasize why you’re the right one for the job.

On the minus side, many ways of transmitting resumes are not conducive to also attaching a cover letter. In fact, some companies seek only resumes, and prefer not to receive cover letters. I know that during my last job search, I often did not include a cover letter because it was discouraged by the hiring organization, or because I simply ran out of time. I don’t know if there is any hard data on whether cover letters help or not, but call me old-fashioned…. I prefer to attach one.

The decision is yours. Use your best judgment and your intuition to decide. Remember, there is no “yes” or “no” to this. Your best bet is to put yourself in the shoes of the hiring manager, and ask yourself what he/she would prefer.

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 articles address current HR issues. Contact Bettie at bbiehn@careerchangecentral.com, and visit her website www.careerchangecentral.com.

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. VP Franchise Services, Mid Atlantic
2. VP Operations, SE, QSR
3. VP Development, New England
4. Chief Marketing Officer, Southeast
5. Director of Purchasing, West
6. VP Operations & Development, QSR, West
7. VP Operations, New England
8. Director of Real Estate, West Coast
9. Director of VIPS, Mexico City
10. Regional HR Manager, Northeast

Referrals are the lifeblood 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.

With plans to spend more than $100 million to renovate the property, THOR EQUITIES, a closely held real estate developer in New York bought the PALMER HOUSE HILTON in Chicago from Hilton Hotels Corp. for $230 million. Built by entrepreneur Potter Palmer, the Palmer House was destroyed 13 days after opening on September 26, 1871 in the Great Chicago Fire. Every U.S. president was hosted at the hotel from Ulysses Grant to Bill Clinton.

An agreement was signed by LASALLE HOTEL PROPERTIES to acquire Boston hotel WESTIN COPLEY PLACE at a price of $318 million. The acquisition is expected to close in the third quarter. The Bethesda, Md. Real-estate trust, LaSalle, intends to assume a $210 million first mortgage on the property and issue one of the current owners with about $59 million in preferred units containing a coupon rate of 7.25%. Proceeds from its senior unsecured credit facility will fund the balance according to the company.

Private-equity firm BLACKSTONE GROUP has put nearly $5 billion into hotel companies in the past 17 months as real-estate prices continue to soar. Acquisitions include such places as Extended Stay America, Homestead Village and Prime Hospitality Corp. The president of Blackstone Real Estate Advisors, JOHN KUKRAL, says hotels still have some room to appreciate in value. He says, "We were buying assets where you had very limited supply coming on. You actually have a shrinking supply of hotel rooms in New York, Hawaii and in other resort markets" as a number of hotels are cashing in on the condominium craze by converting existing hotel rooms into condos. According to Kukral, he believes the demographic trends ahead are for leisure travel and part of the firm's focus has been on resorts in anticipation of the wave of baby-boom retirees who most likely will increase their travel in the coming years. Hotel analyst, JOHN ARABIA, of Green Street Advisors, a real estate research firm in Newport Beach, Calif. says, "The lodging sector versus other real-estate types offers very attractive risk-adjusted returns."

Boutique hotels are commonly known for their hip clientele and haughty staff. The 18-month old GANSEVOORT, a boutique hotel located in the meat packing district of Manhattan, caters predominantly to the business traveler. TIM CUTRESS, marketing director, says the hotel is managed by executives with "classical backgrounds" and isn't snooty and the employees are not noticeably haughty. Occupancy rates at the Manhattan location were 80% in June and nearly that high in July. Cutress says that they are primarily a business hotel with a goal of keeping young mainstream business travelers coming back. As the brand enjoys success and celebrity status, the Gansevoort owners are now expanding to Miami Beach and Los Angeles. The Gansevoort in Miami Beach will have 240 rooms plus more than 300 condominium units while the Gansevoort in Los Angeles is being built in a demand 1914 landmark building with an 1,800 seat theater, featuring a pool with glass walls visible from the street.

Higher room and occupancy rates and strong tourism growth contributed to SHANGRI-LA ASIA LTD.'s 25% rise in net profit during its first half. Net profit for the Hong Kong luxury hotelier for the six months ended June 30 was $60.6 million, up from $48.6 million in the year-earlier half-year. According to the company, they filled 72% of all their hotel rooms in the first half of 2005 and its average room rate rose 15% to $114 per night. GIOVANNI ANGELINI, chief executive and managing director, said the company is in preliminary talks to manage two hotels in Macau, however no agreements have been reached yet.

First-half net profit for the HILTON GROUP PLC fell 8% reflecting a higher income-tax charge but the second-half outlook is strong, with their betting and hotel division showing steady growth. BRIAN WALLACE, Hilton Group finance director, said occupancy in London was down about 5% for July and into August but is now climbing back to the same levels seen last year.

An agreement was made that STARWOOD HOTELS & RESORTS WORLDWIDE, whose brands include Sheraton and Westin, will buy the upscale LE MERIDIEN HOTELS & RESORTS brand. In a separate announcement, affiliates of LEHMAN BROTHERS HOLDINGS and an investment firm owned by former Starwood Chairman Barry Sternlicht, will form a joint venture to acquire Le Meridien's real estate portfolio of owned and leased hotels.

JOHN Q. HAMMONS HOTELS, INC. reported basic earnings of $1.56 per share for the first half of 2005. for the six months ended July 1, 2005, total revenues from continuing operations were $228.9 million, an increase of 4.4% compared to the six months ended July 2, 2004. For the 2005 six months, average daily room rate increased 6.2% to $107.42 from $101.13.

Increasing and unexpected hotel surcharges are appearing on many hotel bills, even those rooms reserved through discount online services such as Priceline.com. Many listed rates fail to state hidden surcharges. Resort fees, minibar fees and various other fees such as $2 to hold a bag with the bell desk, automatic gratuities on room service and even maid service are being assessed to unknowing guests. Some hotels that offer free Internet connection will charge for the use of the Ethernet cable. Traditional fees are also being raised. Faxing documents typically ran $1 for the first page but can now cost $5 for the first page. According to BJORN HANSON, an analyst for PricewaterhouseCoopers said that a study conducted this past May by found that United States hotels this year will take in more than $1.4 billion by tacking on fees to room rates, more than double the $600 million they extracted from guests in 2002.

People Practices Auditing

By: Doug Gammon

The mention of audits creates fear in most of us. While financial audits are routine in all public companies and the Sarbannes Oxley Act has led to auditing of almost every process, procedure or policy that could create risk for shareholders, comprehensive human resources auditing remains anything but routine. There are no federal laws that mandate Human Resources processes and practices receive the same scrutiny as our asset inventories or financial statements. The risk is certainly there, due to the complexity of federal and state laws, and the difficulty in keeping current especially for those organizations with operations in multiple states.

In order to effectively audit the people/HR practices in an organization it is important to first understand the mission and expected outcomes for the individuals who provide HR services (staff and line employees). The goal is to assess and report on the alignment of people practices with the business purposes, compliance with Federal and State laws, and overall effectiveness in achieving stated goals. It is important to look at all major human resources functions and services, delivery methods, technology, management, and metrics. A service satisfaction audit can also be built into the compliance audit to report field and corporate levels of satisfaction with each key service and function provided by the HR department and/or outsourced providers.

People Practices Audits should include interviews with key members of the Leadership Team, members of the HR department, outsource vendors, and field management. Interviews and meetings can be accomplished in person, by telephone, electronically or a combination. It is important to review key policies, documents, procedures and systems to determine compliance, risk, opportunities for your current people practices. Utilize the following Six Step Process:

Step One / Determine priorities and clear goals

• Identify what is desired as a result of the HR Audit – what do you hope to learn and what are you willing to do with it
• Compliance with company policies, practices and procedures
• Compliance with state and federal laws and regulations
• Catch potential problem areas before they escalate
• Identify work processes that need improvement
• Identify levels of satisfaction with current services and HR products
• Identify areas of opportunity for HR staff development

Step Two / Gather Data

• Review of policies, documented procedures, and documented practices
• Interviews with HR practitioners who implement the policies and practices
• Interviews with “internal and external customers”

Step Three / Analyze Gaps & Design Feedback

• Compare data collected and observed to the desired or required practices
• Compare internal practices to Industry Best Practices
• Determine opportunities to improve internal effectiveness & better alignment with needs
• Evaluate the level of satisfaction with the services of the HR Department and/or outsourced HR providers

Step Four / Report Opportunities & Risks

• Assure the right audience for the reporting of results and observations (including HR leadership)
• Group the observations, risks, and recommendations in order of urgency and ROI to the organization
• Include an Executive Summary, general overview and observations and a detailed report on current practices, validation of workforce priorities, technology and outsourcing opportunities, and recommended changes
• Make sure that compliance gaps get specific action recommendations

Step Five / Design & Implement

• Gain commitments to take action, initiate recommendations
• Outsource, or internally develop, process improvements to assure that the organization will realize improved productivity, less risk and better internal customer satisfaction with all HR practices

Step Six / Manage & Follow Up

• Follow through on actions taken
• Monitor and measure key metrics
• Support continuous improvement efforts

Doug Gammon is a principal in HR Practices Consulting, a human resources & productivity consulting company specializing in designing and improving People Practices in Hospitality, Service, and Retail organizations. His Denver office is located at 287 Garfield Street, Denver, CO 80206; (303) 394-2455. www.hrpractices.net