Executive Connection Newsletter:

Issue 68, FEBRUARY 2006

DICK WRAY EXECUTIVE SEARCH - MONTHLY EDITORIAL

Forget Real Estate……Restaurant Companies are Hot!

Written by Bob Gershberg, Managing Partner
Dick Wray Executive Search

It takes a freight train traveling at 50 miles per hour about 1.5 miles to stop.  At the risk of sounding overly optimistic and perhaps appearing oblivious to the pressures facing the economy at large, I wholeheartedly contend ’06 will be a stellar year for the restaurant industry.  The train is moving down the track at a darned good clip and showing no signs of slowing any time soon.  Sorry John Hamburger, your November Restaurant Finance Conference was splendid but I cannot buy into the bearish overview purported by the industry pessimists.

Chipotle hit the market at $22 per share ascending to $45 on day one and has remained in that lofty range ever since.  Dunkin’ Brands brought $2.43 billion, 11.5 X EBITDA from a consortium of private equity firms clearly expecting Jon Luther and team to redefine growth opportunity. Darden, Cheesecake, Panera, Starbucks, Mc Donald’s and YUM are all trading at close to their 52 week highs.  Upcoming IPOs include Morton’s, Burger King and Tim Hortons.  Although a couple of consistently strong performers have fallen flat, fear not we are nothing if not a resilient lot.

In spite of the compounding negative effects high energy costs tend to bring about and notwithstanding Greenspan’s quarter point kiss good-bye we are moving forward with vigor and conviction.  The industry weathered last year’s storms quite literally and is now enjoying the sales boost of a mild winter, not to mention lower than expected natural gas costs.  Early reports indicate strong same store sales in most segments.  Robust industry trends appear to be the norm rather than the exception. Why even executive recruiters are burning the midnight oil trying to keep pace with growing demand for top-notch talent.

Total restaurant sales for this year are expected to top $500 billion.  We will employ 12.5 million people.  Our 925,000 locations will serve $70 billion meals.  The train is accelerating and the brakes appear quite comfortably out of reach.  This may just be the year to sell the condo in Naples and invest in that magical arena we call the restaurant industry.

All the best,
Bob

Bob Gershberg, Managing Partner
bob.gershberg@dickwray.com

“Dick Wray Executive Search – Maintaining the same ethical recruiting standards for over 34 years.”


EXECUTIVE MOVEMENT

PAUL CURHAN has been hired by TACO DEL MAR, the quick-service burrito chain, to be vice president of marketing and advertising, and company executive NEAL HOLLINGSWORTH was named vice president of franchise sales. Previously, Curhan worked for Pyramid Brewing, Tully’s Coffee and Starbucks Corp.  Hollingsworth formerly worked for Burger King Corp. in Seattle and for the past two years, he had handled both marketing and franchise sales for TDM.

STEPHEN SATHER was named vice president of operations of EL POLLO LOCO INC., the 333-unit grilled-chicken chain. Previously vice president of retail operations for Great Circle Family Foods, a franchise operator of the Krispy Kreme Doughnuts brand in Southern California, Sather will replace KEN CLARK, who was named president and chief operating officer of a 50-unit chain, FARMER BOYS restaurants, based in Riverside, Calif. At El Pollo Loco, Sather will oversee the fastcasual takeout specialist’s previously disclosed plan for franchise expansion outside its core West Coast market.  Clark will assume positions at Farmer Boys previously held by co-founder, DEMETRIS HAVADJIAS, who is now the chain’s CEO.

Effective in June, following the company’s annual shareholder’s meeting, PHILIP GAY will become chief executive officer and president of GRILL CONCEPTS INC. and will replace co-founder ROBERT SPIVAK.   Most recently, Gay was Grill Concept’s executive vice president and chief financial officer. The company said that he will continue his duties as chief financial officer until a successor is named.  They also said that Spivak will remain with the company on a full-time basis through the end of 2006, “after which time he will remain on the board of directors and continue to actively serve the company under a 10-year consulting agreement” .

DANIEL J. DOMINGUEZ was promoted by NEW WORLD RESTAURANT GROUP INC., franchisor of Einstein Bros. and three other bagel chains with a total of 643 locations, to chief operating officer. A 30-year foodservice veteran, Dominguez was senior vice president of New World’s Noah’s Bagels brand and director of operations for Einstein’s Midwest division.

RONALD S. BISKIN, was named president of WOLFGANG PUCK EXPRESS LICENSING LLC, which will oversee the growth of the Wolfgang Puck Gourmet Express fast-casual chain.  Biskin is a veteran senior executive of Baja Fresh, Burger King and T.G.I. Friday’s.  The 69-unit chain, formerly Wolfgang Puck Express, underwent a rebranding last year.   

CINDY “SUGI” SUGIMURA RANDALL was hired for a new post as senior vice president of human resources and training at ROCK BOTTOM RESTAURANTS INC., the 93-unit operator of four brands.  Previously, Randall was vice president of human resources and organizational development at WIS International, a retail services company and held posts at Noodles & Company, Seattle Coffee Co. and Champps Entertainment Inc.

The chief operating officer of ROUND TABLE PIZZA INC., operator and franchisor of 500 Round Table units, J. ROBERT MCCOURT, was promoted to the additional post of president, succeeding JIM FLETCHER, who shed the title to assume the duties of chairman but remains chief executive.

BOB MCCARTHY was promoted by MARRIOTT INTERNATIONAL INC., to president of its North American hotel division, which operates or holds the franchise rights to 2,600 lodging properties. McCarthy, who joined Marriott as a waiter 30 years ago, previously oversaw the division as executive vice president. The presidency is believed to be a newly created post.

This summer, the board of directors of APPLEBEE’S INTERNATIONAL INC. will separate the roles of chairman and chief executive LLOYD L. HILL and begin a leadership succession plan. The company said Hill will continue to serve as chairman of the board but a new chief executive will be named.   According to Applebee’s, president and chief operating officer DAVE GOEBEL will assume “additional executive responsibilities” and he will also assume one of two new seats on the company’s board of directors. 

BUCKHEAD LIFE RESTAURANT GROUP, fine-dining powerhouse in Atlanta, named industry veteran GREG CAREY president and chief operating officer of the 12-unit group.  Additionally, plans were disclosed on taking its high-grossing CHOPS LOBSTER BAR brand nationwide, with an opening in Boca Raton, Fla., set for late 2006. Previously, Carey served in high-end posts for Olive Garden, Palomino, Rainforest Cafe, P.F. Chang’s China Bistro, Pei Wei Asian Diner and most recently Paul Lee’s Chinese Kitchen.   The front-of-house operations team at Chops Lobster Bar will be headed by Buckhead Life founder and chief executive PANO KARATASSOS’ son NIKKO KARATASSOS, director of human resources, training and development.  Another son, who is the company’s corporate chef and executive chef at its restaurant Kyma, PANO KARATASSOS, will head Chops’ culinary development team.

RICHARD PEABODY has been recruited from the chief financial officer’s spot at Romacorp by TB CORP., the operator and franchisor of 145 Taco Bueno quick-service Mexican restaurants, to serve in the same capacity at TB.   He succeeds DAVID LLOYD, who left the company when Taco Bueno was sold by Jacobson Partners to Palladium Equity Partners, which formed TB Corp.

JOHN KOCH has been named vice president for research, development and culinary operations by AVADO BRANDS, parent of 97-unit Don Pablo’s Mexican Kitchen and 22-unit Hops Restaurant and Brewery.  He succeeds FRANK JOCK who resigned last October.  Koch previously served as menu, product and purchasing vice president for IHOP Corp.

A longtime veteran of the family restaurant business, KERRY KRAMP, emerged as a behind-the-scenes player in the acquisition of the 100-unit SHARI’S regional chain by a group of private-equity companies. A New York-based participant in the deal, CIRCLE PEAK CAPITAL, said Kramp was serving as a senior operating adviser in the acquisition and would have oversight of Shari’s as an outside board member.  Also agreeing to become a franchisee of the RAISING CANE’S, Kramp was the chief executive of BUFFETS INC. until his departure last year.   

Reportedly, the world’s largest contract catering firm, COMPASS GROUP PLC, has approached the former head of BPB, RICHARD COUSINS, a plasterboard manufacturer, to take over as chief executive when the company’s current chief executive, MICHAEL J. BAILEY, steps down later this year.  Several candidates, including Cousins, are being interviewed for the top job by headhunter KORN FERRY. Cousins left his post as BPB chief after the company was acquired by SAINT-GOBAIN, a French building materials firm in November.  Approval of the appointment would have to be made by SIR ROY GARDNER, who will replace SIR FRANCIS MACKAY as Compass’ chairman in the spring.

LINDSEY NICHOLS MARTIN has been named by SONIC CORP., operator and franchisor of more than 3,000 drive-ins, to the post of director of people technology.  Martin will be responsible for integrating technology into the human resources department to streamline processes and information.  Previously, she was a data management representative at energy company, Kerr-McGee.

NOELA CARTAGENA was promoted to director of store marketing for HOOTERS OF AMERICA from her position as marketing manager which she served in for five years.  She will oversee media purchases and assist company stores with local promotional spending.

The corporate counsel and director of government relations for JACK IN THE BOX INC., operator and franchisor of more than 2,000 namesake restaurants, has been named chairman of the NATIONAL COUNCIL OF CHAIN RESTAURANTS or NCCR. STEVE BRIGANDI formerly vice chairman and a member of NCCR for more than four years will hold the chairman position through October 2006.

ELIE MAALOUF was promoted by AUTOGRILL GROUP INC. to the position of president and chief executive of its HMS HOST airport concessions business based in Bethesda, Md.  He fills the vacancy left by the death of JACK MCCARTHY last year.  Maalouf’s appointment came as Autogrill’s Italian parent, AUTOGRILL SPA, seeks to buy SELECT SERVICE PARTNER, an overseas travel venue concession operator, from COMPASS GROUP PLC .

DON ALLIO was named president and chief operating officer for FRANCHISE CAPITAL CORP.  and replaces EDWARD HEISLER, who resigned. Most recently he was owner and operator of Mexi-Kenny’s Mexican Grill in Gilbert, Ariz.  He began his career in foodservice in 1966 at McDonald’s Corp. where he held a variety of positions until he retired from the company in 2001. Franchise Capital Corp. franchises several restaurant concepts through CREATIVE EATERIES CORP., including Kokopelli Sonoran Grill and Kirby Foo’s Asian Grill.

The duties of chief executive at RUBIO’S RESTAURANTS INC. were assumed by RALPH RUBIO following the resignation of SHERI MIKSA, who assumed the post when she also joined Rubio’s board. 

Longtime Metromedia Restaurant Group executive and former chairwoman of the Women’s Foodservice Forum, DIANNA WYNNE, agreed to join Cracker Barrel parent CBRL GROUP INC. in the newly created post of senior vice president of corporate affairs.  She will oversee communications, outreach and government relations functions.

MEL HOPE was promoted by AFC ENTERPRISES INC. to chief financial officer, succeeding FREDERICK BEILSTEIN, who resigned in December.  In 2003, Hope joined AFC as finance vice president and then became senior vice president and chief accounting officer as well as chief executive officer of the company’s Popeye’s Chicken & Biscuits chain.

According to the company, executive chairman WILLIAM FOREST will continue in that capacity through 2006, at which time he will become non-executive chairman of the board of COSÍ INC. operator and franchisor of 99 fast-casual sandwich cafes. Other Cosí directors are ROBERT MERRITT, former CFO of Outback Steakhouse; EDNA MORRIS, ex-president of Red Lobster; and CREED FORD, chairman of Fired Up! Inc., franchisor of the Johnny Carino’s Italian concept.

CHRISTOPHER PLUNKETT was named senior vice president of operations for LOGAN’S ROADHOUSE, a subsidiary of CBRL GROUP, and replaces JOHN LUSH, who left last June.  Plunkett, an industry veteran who spent 29 years with Red Lobster said, “This is an exciting time to be joining Logan’s Roadhouse.  The growth plans and the work underway to define the roadhouse niche provide a lot of opportunity.  It’s up to operations to provide our guests with the experience they want and expect every time they visit Logan’s.”

Shortly after BURGER KING CORP.’s senior management severed relations with them and reallocated an annual $1 million subsidy from the NATIONAL FRANCHISEE ASSOCIATION to BK’s advertising fund, five Burger King franchisees, who headed the independent NFA of BK operators, resigned their elected posts. Those resigning their NFA posts were DAN FITZPATRICK, chairman; MIKE WALLSTEIN, vice chairman; BILL HARLOE, treasurer; MICHAEL DEROSA, secretary; and JULIAN JOSEPHSON, past secretary. The NFA claims to represent nearly 5,900 U.S. Burger King outlets, or about 90 percent of the chain’s franchised branches. Commenting on the resignations, FRANK CAPALDO, NFA executive director, said the group’s officers “felt it was in the best interest of the entire system.”  In a statement, Burger King said: “The foundation of our success over the last year and a half has been the very positive relationship that we enjoy with our franchisees. We have always fully supported the NFA and its members as part of this process. We have invited the former chairmen of the NFA to meet with us to redefine our relationship in a positive manner and to position the NFA to best serve the Burger King brand. We are pleased that they accepted this invitation.” Among the NFA’s former chairmen are Josephson, DeRosa, STEVE LEWIS and DON WHITE.  

GREG CREED was appointed to the position of chief operating officer for YUM! BRANDS INC.,   He replaces DAVE DENO, who resigned for personal reasons. Creed most recently served as chief marketing officer for Yum subsidiary Taco Bell and prior to that, served as chief marketing officer and interim general manager of the KFC and Pizza Hut businesses in Australia and at various business-building roles at Unilever.   

Three members of WESTERN SIZZLIN CORP., were named to its board of directors. The new board members are SARDAR BIGLARI, chairman and chief executive of Biglari Capital Corp. of San Antonio, DR. PHILIP L.COOLEY, who works at Trinity University in San Antonio and is a member of the board of directors of The Lion Fund LP and PAUL D. SONKIN, the managing member of Hummingbird Management LLC in New York. In addition, STANLEY L. BOZEMAN JR. resigned from the board. Chairman PAUL C. SCHORR III says, “Though we are sad to see Stan leave the Board, our relationship with him will remain strong in his capacity as a franchisee.”

A Burger King and Chili’s franchisee, QUALITY DINING INC. has promoted JOHN C. FIRTH to president, succeeding DANIEL B. FITZPATRICK, who remains chief executive and chairman.  Previously, Firth was executive vice president and general counsel.

STARBUCKS, the world’s largest specialty coffee chain, and who once shunned the drive-through concept, says that drive-throughs will continue to add to Starbucks’s bottom line.  Stores featuring drive-throughs will make up about half of the new stores the company will open domestically over the next few years according to JIM DONALD, Starbucks’ president and chief executive.  “When a customer has six kids in their car or their favorite pets and it’s raining or snowing, that creates an experience for them that will want to make them use a drive-through.  The drive-through is another convenience for our customers as we want them to enjoy a great cup of coffee.”

 


NEWS

Beginning this summer, CARRABBA’S ITALIAN GRILL plans to open a takeout restaurant inside of a Sarasota Publix store which could lead to similar arrangements elsewhere in the chain.  According to the Lakeland-based grocer’s spokeswoman, MARIA BROUS, Carrabba’s will lease a space for the 1,000 square foot restaurant in the store’s deli area.  The in-store Carrabba’s will offer pizza from a wood-burning oven and daily specials and is intended for takeout although Carrabba’s customers can also share seating with Publix’s deli patrons.  Brous said that Publix will watch the results of the experimental market before deciding whether to sign more leases with Carrabba’s or its Tampa-based parent company, Outback Steakhouse Inc.

Private equity firm LEVINE LEICHTMAN CAPITAL PARTNERS received $7 million in fees and expenses from FOX & HOUND RESTAURANT GROUP, operator of 84 pub restaurants after Fox & Hound Restaurant group accepted a competing takeover bid from affiliates of Newcastle Partners LP and Steel Partners II LP.  The payment to Levine Leichtman reflected a previous merger agreement requiring a $5 million termination fee and $2 million for expenses after Fox & Hound entered into a definitive merger agreement with the Newcastle-Steel consortium private equity group to purchase all outstanding Fox & Hound shares for an all-cash price of $16.30 per share.

Agreements to sell the real estate were made by BOB EVANS FARMS INC. who said they have closed their eight remaining OWENS RESTAURANTS in Texas.  President and chief executive officer of Bob Evans Farms, LARRY CORBIN,  said: “Financial results at these locations had not met our expectations for some time. We were not able to grow the concept based on our performance combined with the high cost of advertising in the Dallas Metroplex.… No additional closings are planned for fiscal 2006, which ends in April 2006.”

In a recent statement, FRIENDLY’S ICE CREAM CORP., franchisor and operator of 515 Friendly’s restaurants, announced reduced health-care benefits for about 450 of its restaurant-level hourly employees but corporate-level employees were not affected by this change..  According to published reports, the new “limited benefit” plan provides a maximum annual benefit of $2,000 for outpatient care, and covers only a small portion of the costs associated with major illnesses.

The operator of 16 fine-dining restaurants, SMITH & WOLLENSKY RESTAURANT GROUP INC., disclosed that it was shifting its development focus to a smaller, less expensive concept called WOLLENSKY GRILL. The company said that this new concept will feature a menu that yields a $45 per-person check average.  Each unit will cost approximately $2.5 million and measure about 9,000 square feet. The news was included in a statement issued last month about a renegotiation of the company’s licensing deal with ST. JAMES ASSOCIATES LP, which owns both the original Smith & Wollensky steakhouse and the adjacent first Wollensky Grill, and therefore controls both trademarks.

BENNIGAN’S GRILL & TAVERN has opened its first BENNIGAN’S EXPRESS restaurant in the Diversia Fun Center in Monterrey, Mexico offering a condensed menu from larger units making it the ninth Bennigan’s unit in Mexico.. They are a 310-unit casual-dining division of METROMEDIA RESTAURANT GROUP out of Plano, Texas. The Diversia Center features movie theaters, miniature golf, bowling and video games.

Scottsdale, Ariz- KAHALA CORP. has finalized their purchase of the 1,600-unit BLIMPIE sandwich-and-salad chain and the corporate headquarters for the mostly franchised chain is expected to move to Arizona within the year. Not included in the acquisition, however, is a chain of Blimpie restaurants in the Northeast owned by METROPOLITAN BLIMPIE INC. and operated by licensee BLIMPIE ASSOCIATES LTD as well as Blimpie sister brands, Maui Tacos, Smoothie Island and Pasta Central.

CBRL GROUP INC. disclosed that it is seeking a financial advisor to review potential capital structure initiatives to build shareholder value.  CBRL is the operator of 540 Cracker Barrel Old Country Store restaurant and retail locations and operator and franchisor of 156 Logan’s Roadhouse restaurants. The company publicly announced the move because it had been approached by a “significant” shareholder that had suggested undertaking certain initiatives that CBRL management had already considered during its annual capital structure review.

A deal was made between DUNKIN’ DONUTS and JET BLUE airlines, making Dunkin’ Donuts the official coffee of the airline. Last month, JetBlue started serving Dunkin’ Donuts’ Original Blend Coffee and Dunkin’ Decaf on all of its domestic and international flights. According to Dunkin Donuts, the freshly brewed coffee is served in a 10 oz. cup, making it one of the largest sized cups available on an airline.

CHIPOTLE MEXICAN GRILL INC. increased the price range of its initial public offering of 7.9 million shares to $18 to $20 per share from $15.50 to $17.40 per share. Chipotle offered 6,060,606 shares of class A common stock and MCDONALD’S VENTURES LLC, the selling shareholder, is offering 1,818,182 shares.  Chipotle Mexican Grill Inc. is an operator and franchisor of 480 restaurants. Shares at Chipotle Mexican Grill Inc. doubled in value on their first day of trading on the New York Stock Exchange, to close at $44.

An operator of 72 restaurants nationwide, BENIHANA INC., announced last month that the BENIHANA OF TOKYO INC. family trust, which was created by ROCKYAOKI, founder of the Benihana teppanyaki chain, had filed a notice of appeal over a December court decision that upheld the company’s $20 million private-financing deal from early 2004. The trust contended that Benihana’s board of directors had breached its fiduciary duties by approving a transaction that diluted the voting power of the family’s majority common stock holdings according to regulatory filings.  However, Benihana had asserted that the financing was necessary to fund restaurant growth. The Delaware Court of Chancery, in December, rejected all claims asserted against Benihana and in the decision said the board of directors had “acted in good faith.”  The original court complaint sought temporary and permanent injunctions to undo the preferred-stock deal as well as unspecified monetary damages and recovery of legal costs.

According to a release from the U.S. Department of Labor’s Wage and Hour Division,  WATER’S EDGE RESTAURANT, an upscale eatery in Long Island City, owned by QUINN RESTAURANT CORP., has been ordered to pay $202,682 in minimum-wage and overtime back pay to employees and a $12,000 civil money penalty.  The Labor Department’s Wage and Hour Division conducted multiple investigations of labor practices at the restaurant and found that the operation was in violation of the Fair Labor Standards Act in that some employees were paid less than the required federal minimum wage and many employees worked more than 40 hours a week without being properly compensated for overtime hours.  A later investigation discovered that the employer was changing employees’ hourly rates each week to limit overtime compensation liability, depending on the number of hours they worked.

Launched in 2001 by RARE Hospitality founder GEORGE MCKERROW JR. and media mogul TED TURNER, Atlanta’s TED’S MONTANA GRILL said it will debut a Ted’s in the Time & Life Building at New York’s Rockefeller Center late this year. Ted’s Montana Grill is a 39-unit upscale-casual saloon and bison specialty brand.  Last month, however, Ted’s Montana Grill closed three restaurants in south Atlanta and Columbus, Ohio.  McKerrow labeled the move as a “restructuring: and said that it does not interfere with plans to open another 12 Ted’s in 2006.  

New deals were signed between TACO BUENO RESTAURANTS, the 145-unit quick-service chain that began franchising last year and five franchise groups for stores in the new markets of New Mexico and North Carolina. There will also be additional locations in Texas and Oklahoma. EAT, DRINK LLC of Texas, headed by BILL SPAE, former president of STEAK AND ALE and BENNIGAN’S, with partners JOHN WARMACK and MARK VAN HERPEN, is the largest deal which agreed to develop 48 stores over the next seven years in Austin and San Antonio and parts of central and south Texas.  Other agreements call for CAROLINA BUENO to develop 11 Taco Buenos in the Charlotte, N.C., area; COMIDABUENO, to develop five units in East Texas over the next four years; and QUALITY BRAND MANAGEMENT, the Taco Bueno franchisee in Little Rock, Ark., to launch the chain’s first captive-audience restaurant in the Riverwinds Casino in Goldsby, Okla. BUENO NEW MEXICO agreed to open five restaurants in the Albuquerque area.

Chief executive ROGER BERKOWITZ of LEGAL SEAFOODS, said the upscale-chain operator will open its second LEGAL’S TEST KITCHEN in April, in Boston’s Seaport area. The new 4,500-square-foot outlet will be almost twice as large as the concept which debuted last year at Boston’s Logan International Airport and will seat about 140. The menu will focus on meat dishes, although about 35 percent will be seafood. 

According to the company, RUBIO’S RESTAURANTS INC. said that FOOD COURTS OF NEVADA LLC agreed to develop five Rubio’s Fresh Mexican Grill fast-casual restaurants over the next five years in Las Vegas. The franchisee, specializing in casino food courts, expects to open the first Rubio’s at Station’s Red Rock Casino Resort and Spa in April.  

It has been reported that in Russia, coffeehouse chain parent STARBUCKS CORP., base in Seattle, was victorious in a court battle for control of the Starbucks brand name there.   MONEX TRADING, an arm of Turkey-based ALSHAYA GROUP,  has been selected by Starbucks as its development partner for Russia.

REAL MEX RESTAURANTS INC., said it plans to explore “strategic alternatives,” a term that usually connotes an intended sale or recapitalization.  Real Mex Restaurants, Inc. is the owner of the El Torito, Chevys Fresh Mex, Acapulco and Fuzio Universal Pasta chains in Cypress, Calif.

BUFFETS HOLDINGS INC. also said it plans to retain an advisor to explore “strategic alternatives to maximize shareholder value”, again a statement signaling a desired sale, merger or divestiture.  Buffets Holdings Inc. is the parent of the Old Country Buffet, HomeTown Buffet and Tahoe Joe’s chains.

The JAMES BEARD FOUNDATION In New York has a search underway to replace EDNA MORRIS as president.  A New York-based executive search firm, HERBERT MINES ASSOCIATES, has been retained to conduct the search. A former president of Red Lobster and a founder of the Women’s Foodservice Forum, Morris was hired as interim Beard Foundation executive director following the ouster and subsequent arrest of former president LEONARD PICKELL on embezzlement charges. Morris was asked to extend her contract with the foundation, which ends in February, however, she wants to return to the restaurant world.

JAIME PLASCENIA and his wife, ANNA AYALA, the husband and wife who tried to scam WENDY’S INTERNATIONAL INC. by planting a severed finger in a bowl of the chain’s chili, were sentenced to 12 and 9 years in prison, respectively.  Both pled guilty to conspiracy charges in September.  Because of the publicity that followed the attempted con Wendy’s said it lost some $2.5 million in sales.

A revised proposal presented to MCDONALD’S CORP., by PERSHING SQUARE CAPITAL MANAGEMENT, was immediately rejected as nothing “fundamentally new” for its restructuring.  The plan included a suggestion the franchisor spin off its 8,000 restaurants into a new entity in order to sell 20 percent of MCOPCO to the public. Owners of 5 percent of McDonald’s stock, Pershing Square, was also rebuffed last year by the operator and franchisor of 30,000 burger restaurants when Pershing first called for McDonald’s to boost shareholder value and retire debt by raising an estimated $3.27 billion from the sale of 65 percent of its restaurants and issuing $14.7 billion of financing secured by its worldwide real estate, which the hedge fund estimates is worth $46 billion.

COMPASS GROUP PLC, a London-based foodservice conglomerate, who has owned a 49-percent minority stake in LEVY RESTAURANTS since 2000, is acquiring the remaining 51 percent of the restaurant and foodservice management company for $250 million.  ALISON WEBER, Levy spokeswoman, said no management changes will occur and the purchase is expected to close by April.  

Jurisdiction of a 7-year-old lawsuit by a co-founder of the Guatemalan-based POLLO CAMPERO chain, who alleges improper diversion of his assets by two nephews who are majority owners of the 150-unit brand, will be retained by U. S. Courts after a ruling by a federal appellate panel in Atlanta.  A motion for rehearing filed by JUAN LUIS BOSCH and DIONISIO GUTIERREZ MAYORGA, who control Pollo Campero through Corporacion Multi-Inversiones, and who want the case moved to Guatemala was denied by the court’s decision.  JUAN ARTURO GUTIERREZ,  the plaintiff in the suit, filed in 1999 in Miami-Dade County Circuit Court. 

According to TACO DELMAR, the 183-unit chain based in Seattle, a Canadian franchisee, TDM FEDERAL HOLDINGS INC., has agreed to develop nearly 600 units in central and eastern Canada over the next nine years. Taco Del Mar also stated that TDM’s expansion this year will focus on Alberta, Manitoba, Saskatchewan and Ontario.

INVESTORS MANAGEMENT CORP., parent of the Golden Corral grill buffet brand, is acquiring a 16-percent stake in PORT CITY JAVA.   RICHARD URQUHART, finance vice president for IMC, which is based in Raleigh, N.C.-based, said the deal positions his group to offer support in marketing, franchising and multiunit management as Port City continues its growth program.  The chairman of IMC, JAMES MAYNARD, will join the Port City Java board.

In Los Angeles Superior Court, a lawsuit was filed by IN-N-OUT BURGER vice president, RICHARD BOYD, accusing LYNSI MARTINEZ, the 23-year-old heir to the chain, of trying to force her 86-year-old grandmother, company co-founder ESTHER SNYDER, out of her leadership role. Boyd, who is also a board member and co-trustee of nearly two-thirds of In-N-Out’s stock, contends that Martinez is trying to accelerate her takeover of the iconic drive-thru brand, which was founded in 1948 by Snyder and her late husband HARRY SNYDER. In addition, the lawsuit also accuses Martinez and In-N Out president, MARK TAYLOR, husband of Martinez’s half sister, of attempting to fire Boyd from his trustee position and of thrusting the brand into new markets prematurely.  With ownership of 25 percent of the company, Martinez stands to inherit about a third of its remaining shares on her 25th birthday and own them all by the time she turns 35.  General Counsel for In-N-Out, ARNOLD WENSINGER, was quoted by the Los Angeles Times as saying that Boyd’s lawsuit “contains numerous false allegations and inaccuracies.”

A new prototype of REAL MEX RESTAURANTS opened in Sherman Oaks, Calif. The company said the design uses warmer colors, ambient lighting and sheer fabrics for a more upscale environment. The unit is the seventh El Torito Grill. two new-design prototypes of Real Mex’s flagship El Torito brand opened last month.  

After having their franchise license revoked earlier last month, GREAT CIRCLE FAMILY FOODS LLC, one of the largest KRISPY KREME DOUGHNUTS franchisees, has had its license reinstated.  According to Great Circle, the two companies reached an agreement and that shipments of ingredients to permit restaurant operations have resumed.  Krispy Kreme terminated Great Circle’s licenses because the franchisee hadn’t paid its sales royalties and brand fund fees.

In a statement to investors, JACK SCHUESSLER, chairman and chief executive of WENDY INTERNATIONAL INC., said that their previously announced sale of 250 to 450 restaurants would not bring a price that reflects their true value if the properties were put on the market today.  He restated the company’s plans to divest the holdings during the next one to three years insisting the company is “right on track” with the strategic initiatives announced last July to improve shareholder value.  According to Schuessler, Wendy’s would begin operations and market tests of breakfast and plans to debut its highly anticipated Frescata deli sandwich line in the spring.

Also, Wendy’s International publicly repelled accusations of shareholder disregard, countering one investor’s claims of being ignored by management with assertion he’d actually tried to strong-arm Wendy’s executives into addressing his demands for asset spin-offs and cost cutting.  Schussler’s letter to NELSON PELTZ, whose TRIAN FUND MANAGEMENT hedge fund had claimed in a securities filing that it was rebuffed when it asked to confer with Schussler was released.  In the letter, Schussler told Peltz, “you presented us with an ultimatum to meet with me within 48 hours or you would immediately file a 13-D” (a document that indicates an investor has purchased at least 5 percent of a public concern) which can affect share prices and said that Peltz had refused to reveal Trian’s intentions when the meeting was sought.

The first franchised unit of PAPAYA KING, the 73-year-old hot dog and fruit drink cult favorite in New York, opened at JetBlue Airway’s hub in JFK Airport and is operated by Philadelphia-based OTG MANAGEMENT.  DAN HORAN, Papaya King chief executive and president, said the chain expected to open six more franchised units within the next six months, including one outlet in New York’s LaGuardia Airport and two at BWI Airport in Baltimore. 

As part of an expansion push, LENNY’S, a 5-unit sandwich chain in New York, is planning to franchise.  The 16-year old company had a five-year plan to have a total of 20 company-owned stores in Manhattan and to have 80-100 franchised units in the outer boroughs, tri-state area and other population centers by 2011 according to partner, JOHNNY HEIL.

A guide for helping franchisees retrofit their stores with a new format and design unveiled last May in Tempe, Ariz. has been completed by the PORT OF SUBS sandwich chain.  According to Seattle-based designer 3M, the new prototype showcases a chef-like Master Slicer character to underscore the chain’s freshly sliced cold cuts and made-to-order sandwiches.

A Danville, Calif.-based vending company, PELICAN COMMUNICATIONS INC., has agreed to install and maintain arcade games inside the 120 ROUND TABLE pizzerias operated by ROUND TABLE DEVELOPMENT CO.  Pelican said that a similar deal has been made with the 570-unit GODFATHER’S PIZZA chain.

According to PHIL ROBERTS, chairman and co-founder, two more OCEANAIRE seafood dinner-houses will open this year bringing the total to nine.  The Miami location is expected to open in the spring and there will be one opening in Philadelphia in the fall.  Major cities with National Football League teams are targeted for initial expansion.

Last month, SHARI’S MANAGEMENT CORP. was acquired for $80 million by a consortium including big-name restaurant investors, led by foodservice newcomer CIRCLE PEAK CAPITAL LLC.  Other buyers included Shari’s executives; CapitalSource Finance LLC; Carlyle Mezzanine Partners LP, an affiliate of Carlyle Group; Falcon Investment Advisors LLC; Magnetar Capital LLC; Sankaty Advisors LLC, a unit of Bain Capital LLC; and Wells Fargo Foothill, a unit of the Foothill Group Inc.  Sellers included FAIRMONT CAPITAL INC. and WINDJAMMER CAPITAL INVESTORS LLC.

An acquisition of 11 franchised units in three states has been completed by TEXAS ROADOUSE INC., operator and franchisor of 200 casual restaurants.  The company said the deals will result in a non cash, pretax charge of $800,000 for the first quarter of 2006.

Entertainment conglomerate, RANK GROUP PLC, owner of the HARD ROCK CAFÉ brand, announced it would accelerate expansion of its Hard Rock restaurant and hotel chains by selling the Rank movie business to a holding of U.S. investor RON PERELMAN for $750 million.

Last month, the 100th PIZZA HUT ITALIAN BISTRO was opened by PIZZA HUT.  The company said that the outlet marks the third Italian Bistro in the Wichita, Kan. Market, with three more scheduled to debut in 2006.

A franchise agreement was signed by MARBLE SLAB CREAMERY INC. and AKBAR MAREDIYA to open its 500th store.  Also, the first store in the Middle East debuted and is operated by DRH GROUP INC., a master franchise team.

An agreement was made by ARAMARK INTERNATIONAL to provide foodservices for 21,000 employees at seven AIRBUS manufacturing facilities in Germany. According to the company, the five-year deal, which also calls for Aramark to operate kiosks and retail outlets, should generate $14 million annually in sales.

TIM O’BRIEN, president and chief executive of FRESH CHOICE said that new health-oriented menu options are among the enhancements they seek to offer following the buffet operator’s emergence from Chapter 11 bankruptcy protection in December.  The company operates 33 restaurants under the brand names FRESH CHOICE and ZOOPA.

After more than 20 years of operation, the MANHATTAN OCEAN CLUB, owned by the SMITH & WOLLENSKY RESTAURANT GROUP, has closed its doors.  A New York-based steakhouse specialist indicated that ALAN STILLMAN, SWRG chairman and chief executive, who founded the restaurant, is working on a project with his son, MICHAEL, which will occupy the midtown Manhattan space.  The new restaurant is expected to open this spring.

The operator and franchisor of 3,500 fast-food restaurants worldwide, ARBY’S RESTAURANT GROUP INC., acquired 15 of the 31 Arby’s units, located in Indianapolis and South Bend, Ind., run by franchisee RICHARD BEST.   ARG also indicated that it would make further acquisitions to control more select markets.  

Press reports have named private equity firms THOMAS H. LEE PARTNERS, BLACKSTONE GROUP, MADISON DEARBORN PARTNERS and APOLLO MANAGEMENT as four of the eight parties expected to bid for QUIZNOS MASTER LLC, owner of the 4,000-unit Quiznos Sub sandwich brand. The four other suitors were not named. The auction is being conducted by GOLDMAN SACHS.   

An agreement was signed between CHESTER’S INTERNATIONAL LLC, operator and franchisor of a chain of more than 1,700 quickservice restaurants, and VISION INVESTMENT GROUP LLC calling for Vision Investment Group to develop five Chester’s restaurants in the southwestern area of Birmingham. They plan to open their first two units in 2006 and to add one more per year over the next three years and is the Vision group’s first franchise investment.  This also marks Birmingham-based Chester’s first franchise sale for Alabama.  CLAUDE BRUNSON, EDDIE DOWDELL, THOMAS PORTERFIELD JR., PAMELA VICKERSTAFF and TERRANCE D. VICKERSTAFF are the principals for Vision Group.

According to its parent company, RAVING BRANDS, deals were signed with franchisees and MOE’S SOUTHWEST GRILL, calling for the franchisees to open 15 branches of the fast-casual chain. The largest of the deals was signed with Lubbock, Texas-based SCHULER ACQUISITIONS, which plans to open 10 Moe’s, in addition to its previous three-store contract, in Abilene, Amarillo, Lubbock, Odessa and Wichita Falls, Texas, by July 2007.

CAPTAIN D’s recently announced a deal to buy DEL TACO, a chain of 461 restaurants in mostly Western states.  The announcement comes a year after Captain D’s was bought by Northeastern private equity investors who promised to grow the restaurant by adding multi-branded restaurants in which two concepts operate under the same roof.  Chairman of Captain D’s holding company, Sagittarius Brands, SID FELTENSTEIN, said “We loved the same things about Del Taco that we love about Captain D’s”.  Chairman and chief executive of Del Taco, KEVIN MORIARTY, says "We believe this deal with Sagittarius Brands will give Del Taco strong growth opportunities that will benefit the brand, our employees and our franchise community.''

HOOTERS OF AMERICA will open a new restaurant in India and expects to start operations there in six months.  “India is changing rapidly,” JOHN WEBER, executive vice-president of franchisee operations, Hooters, said in a press release, spelling out the company’s international expansion plans. “We increased our international growth by 30%.  This year, we expect to have a 61% increase and plan to open 23 international locations. These include India, Greece, Japan and Australia, among others.”  Recently, the Delhi High Court ruled in favor of allowing women to work as bartenders in pubs and bars.


FINANCIAL

According to a company statement, KRISPY KREME DOUGHNUTS INC., operator and franchisee of about 324 doughnut-and-coffee stores, has received a three-month extension for continued listing and trading on the New York Stock Exchange through April 30. Krispy Kreme said the NYSE will initiate suspension and delisting procedures if the company does not make the April 30 filing.

The operator and franchisor of 1,638 restaurants, BRINKER INTERNATIONAL INC., reported a 3.6-percent increase in its second-quarter profit, on revenues that rose 10.9 percent to $1.01 billion. The company’s revenues were boosted by strong quarterly same-store sales at four of Brinker’s concepts, including Chili’s Bar & Grill chain, Maggiano’s Little Italy. Romano’s, Macaroni Grill, and On the Border.   

For the four weeks ended Jan. 22, APPLEBEE’S INTERNATIONAL INC., operator and franchisor of 1,810 casual-dining restaurants, said domestic same-store sales rose 6.3 percent systemwide.  

For the fourth quarter ended Dec. 31, MCDONALD’S CORP. posted 53-percent-higher earnings on revenues that rose 4 percent to $5.23 billion and said that it plans to invest $1.8 billion in 2006 to open 800 new restaurants and remodel others.

In a government filing, MORTON’S RESTAURANT GROUP INC., operator of 69 high-end steakhouses, said that it plans to sell 9 million shares of common stock in an initial public offering. Morton’s said 6 million shares are to be sold by the company and 3 million shares are to be sold by selling shareholders, the biggest of which is CASTLE HARLAN PARTNERS III LP.

A 40-percent decline in second-quarter earnings was posted by FRISCH’S RESTAURANTS INC., who blamed higher operating expenses and same-store sales declines of 1.8 percent at its BIG BOY units and 10.7 percent at its GOLDEN CORRAL outlets for the decline. For the 12 weeks ended Dec. 11, Frisch’s net income was $1.7 million on revenues that rose 0.3 percent to $67 million.

REAL MEX RESTAURANTS INC., in Cypress, Calif., said its unaudited revenues for the year ended Dec. 25 rose 63 percent from a year earlier to $534 million. The increase  is attributed to their acquisition last January of 69 Chevys dinnerhouses and 5 Fuzio fast-casual outlets.

Systemwide sales for 2005 at WINGSTOP RESTAURANTS INC., operator and franchisor of 269 chicken-wing restaurants, rose 32.3 percent to $118.5 million. with the fourth quarter marking the chain’s 10th consecutive quarterly rise in that measure, same-store sales advanced 4.8 percent for the year.

During the five weeks ended Dec. 31, YUM! BRANDS INC. reported a 3-percent gain in blended same-store sales for U.S.-based corporate restaurants.  Also, during the four weeks ended Dec. 31, total system sales for the company’s China division increased 6 percent prior to foreign currency conversion.

The Restaurant Performance Index for the NATIONAL RESTAURANT ASSOCIATION remained at 101.5 for November, which was the same for October.  The RPI is a monthly survey of about 500 operators that attempts to measure the health and outlook of the industry.  Compared to a year earlier, fifty-one percent of restaurant operators said same-store sales had risen in November 2005 while 31 percent said same-store sales had fallen.

A $2.2 million first-quarter net profit was posted by LUBY’S INC., the 131-unit cafeteria chain, versus a $1 million loss a year ago.

The operator of 9 American grill and sushi bars, KONA GRILL, forecasted lower revenues and a steeper loss for 2006 and said five outlets would open later in the year than planned.

A second-quarter loss was posted by ROADHOUSE GRILL INC., operator and franchisor of 74 casual-dining restaurants on a 7.1-percent dip in revenues.  Roadhouse said it plans to dispose of eight underperforming units.

With the intention  to “put greater focus on execution and to strengthen cash flow,” CBRL GROUP INC., has reduced the number of new Cracker Barrel Old Country Store and Logan’s Roadhouse units it plans to open in the near term.  For the second quarter ending Jan. 27, the company also said it expects to earn between 56 cents a share and 61 cents a share compared with 63 cents a share for the year-ago period, based on a revenue increase of 2 percent to 4 percent.

According to the NATIONAL RESTAURANT ASSOCIATION’s industry forecast, restaurant industry sales are expected to rise 5.1 percent to $511.1 billion in 2006. Sales are expected to increase 5.2 percent to $173.4 billion at full-service restaurants and 5 percent to $142.4 billion at quick-service outlets. The NRA foresees 925,000 industry locations employing 12.5 million employees this year, when the restaurant industry is expected to account for 47.5 percent of the food dollar.

Same store sales at AU BON PAIN remained healthy at almost 7% year-to-date through December and Café unit growth continues on both the company and franchise side.  According to the company, they will automate and streamline inventory processes, labor scheduling and production planning.  In addition, a summer rollout of gift cards is also part of the Compris project.


RESUME TIPS


Resume Revelation 

By:  Bettie Biehn

In the past few weeks, a number of tried-but-true adages have popped into my mind, even though I struggled hard to keep them at bay.  While I could not locate exact quotations, the main theme of the adages was “you can’t be objective about your own life/work/writing, thus you need a trusted colleague or friend to tell you the truth.”

This revelation came to me in the midst of a job search, while working with a recruiter. She suggested that I lop off the first 13 years of my career on my resume (blasphemy!), as the work I had done during those early years was not relevant to my search. “Not relevant!” I proclaimed. “Those work years were the basis of everything I’ve done since!”

The recruiter nodded wisely and sympathetically, but persevered. And I finally had to admit that she was right. Without revealing my exact age, suffice it to say that I’ve had a long, rewarding career, and those first 13 years, while precious to me, would not matter one whit to a hiring manager.

In an earlier resume tips column I talked about having a second, or even third, set of eyes read and critique your resume before launching it into employment cyberspace.  I would revise that suggestion to emphasize the need for someone objective to serve in this role, someone who would not be afraid to perhaps offend you with his/her honesty. The above-named recruiter was prepping me for an interview with a client of hers, and wanted me to do my best. She could look at my resume and made suggestions for cutting out unnecessary information while retaining the parts that were relevant to the job at hand.


I had also flown in the face of age discrimination in hiring, which is alive and well in today’s market, by listing every job I’d ever had on my resume. While I didn’t elaborate beyond employer, title and dates, the information was pointing squarely to my age. I had always believed in telling the full truth (harking back to my column “The Truth, The Whole Truth, and Nothing But”), but this recruiter convinced me that leaving out more than one-third of my work years was not dishonest. In her eyes, I was simply focusing on the experience relevant to the job, and could bring in earlier experience if needed during an interview.

This epiphany was nothing less than shocking to me, and was certainly a loud wake up call. Here I was writing other peoples’ resumes, providing the same advice to them as this recruiter provided to me, and yet not following it myself! Quite frankly, I was more than a bit embarrassed, and certainly chagrined. The lesson for me and all of us in the job search arena is to not get hung up on pride or ownership with our resumes. Instead, let someone you trust – a professional