Dunkin’ is Going Private in $11.3 Billion Deal

Inspire Brands, a holding company backed by the Roark Capital Group, a private equity firm, is purchasing Dunkin’, which also owns Baskin-Robbins. Inspire already owns 11,000 Arby’s, Buffalo Wild Wings, Sonic, Jimmy John’s, and other restaurants. Inspire, which will take on Dunkin’s debt in the deal, plans to acquire outstanding Dunkin’ shares at $106.50 apiece. The stock was priced at $99.71 per share when the market closed on Friday. Dunkin’ and Baskin-Robbins will be “complementary” to Inspire’s portfolio, said Inspire CEO Paul Brown in a statement announcing the deal late Friday. He noted that through the two brands, Inspire will have access to international customers and more than 15 million loyalty program members, among other things. The purchase will almost triple Inspire’s restaurant footprint: Dunkin’ has more than 12,500 locations, and Baskin-Robbins has nearly 8,000. Dunkin’ CEO Dave Hoffman said in a statement that the deal will “bring meaningful value to shareholders,” and that he expects it to drive growth for franchise operators. “The acquisition makes sense as it gives Inspire an established national brand with Dunkin’,” wrote BTIG restaurant analyst Peter Saleh in a note published after news broke about a week ago. With Dunkin (DNKN)’, Saleh said. Inspire’s portfolio will include a chain that serves customers in the morning. In recent years Dunkin’ has been emphasizing its coffee.

In 2018, it dropped “Donuts” from its name and since then has invested in espresso machines and new brewing equipment. It’s also tested out new breakfast items, including a plant-based sausage sandwich. Before the pandemic, breakfast was one of the few growing sectors in the fast-food space. But now, breakfast sales are slumping because of the disruption to morning commutes. Many who work from home have been eating breakfast and drinking coffee at home, too. In the three months that ended on June 27, sales at US Dunkin’ locations open at least a year dropped nearly 19%. But sales have been improving. In the following three months, same-store sales at US Dunkin’ stores ticked up .9%. They improved from month to month in the quarter, the company said. To help turn sales around, Dunkin’ made a few quick pivots. It added foods, like cream-cheese stuffed bagel minis, that would appeal to customers who visited stores in the afternoon. It also started serving its fall menu earlier in the year and partnered with TikTok star Charli D’Amelio in a bid for younger customers. That gambit paid off: When the Charli promotion launched, Dunkin’ hit a record for daily active app users. And with local and independent coffee shops struggling, bigger chains like Dunkin’ could swoop in to steal market share or grow their footprints. “Dunkin’ is thriving in a COVID world,” said Scott Murphy, president of Dunkin’ Americas, during a call discussing the company’s third-quarter results. “We are excited about the future.” The company has been under private ownership before. Dunkin’ Donuts and Baskin-Robbins were sold by Pernod Ricard SA to three private equity firms including Bain Capital, Carlyle Group, and Thomas H. Lee Partners for $2.4 billion in 2005. The company went public in 2011. – Source: — CNN Business

Women’s Foodservice Forum CEO Therese Gearhart on how the Pandemic has made Gender Equity more of an Uphill Climb for Women

Before the pandemic again, gender equity was still a challenge in leadership positions within the restaurant industry with only 22% of women in leadership positions (as compared with 47% of women in entry-level positions). But with the onset of COVID-19, that gap grew even wider as women have to increasingly choose between a changing situation at home as schools and daycares closed, and keeping up with work outside the home. In a Restaurants Rise by MUFSO session, “Emerging Stronger on the Side of Gender Equity” sponsored by Glen Valley Foods, Women’s Foodservice Forum CEO Therese Gearhart discussed gender inequities, the restaurant industry needs to address, and how they can use the unusual circumstances of the pandemic to come out ahead as people get back in the workforce and face the “new normal.” According to Gearhart, with the onset of the pandemic, women are 2.1 times more worried than men about being judged harshly at work for trying to balance their home life with their jobs. Additionally, one in four women industry-wide are considering leaving the workforce or downshifting. “Mothers are more likely than fathers to feel judged with the added responsibilities of work around childcare and homeschooling,” Gearhart said. “Women are faced with the potential decision of keeping their jobs or this new job of taking care of their families full-time. Working mothers always had a second shift after a full day of work, and now the support like daycares and schools that made that possible has been upended.” Gearhart said it will take time and a new kind of effort to reverse this worrisome trend. Here are some of her ideas:

Enforce a nondiscriminatory workforce all the time

Gearhart said that it’s not enough to put anti-discrimination policies down on paper or in employee handbooks; you have to make sure the policies are consistently followed upon. She recommends communicating these policies regularly with employees and following up to make sure the values of the company match what’s on paper. Anti-bias and anti-discrimination training is a good start, Gearhart said, but it needs to be followed up with action plans to put what employees learned into action. “Match training with real conversations and make sure you’re actually listening and hearing people’s voices,” Gearhart said.

Anti-bias starts with recruitment

Inclusivity does not just mean diversity or hitting a certain number of quotas to change workplace culture. Create better hiring practices where you’re looking at diverse slates of candidates, to begin with before even considering the right candidate. Gearhart said the “old method” of making sure to consider at least two women as final candidates for every leadership position as a good start. “But don’t just focus on the numbers, you can get more people in the room but it’s not about the numbers alone,” she said. “You want to make sure you are empowering them and giving them a place and a voice at the table.”

Build a flexible work-life balance

One of the biggest challenges women face, particularly in a post-COVID world, is figuring out how to take care of these new at-home responsibilities while still keeping up and staying ahead at work. This could look like taking meeting times into consideration for working parents who have responsibilities at home or setting aside blocks of flexible work time. “It’s about recognizing what the needs [of the working parent] look like today,” Gearhart said. “Learn how to embrace genuine flexibility.”

Promote intersectionality

Do your policies help all women reach the next rungs of success, or do they only help white women and other advantaged groups? Gearhart said that it’s important to apply strategies of inclusivity and equity to all groups of women, and to think — as both a leader and an employee — am I only working with women who look like me? Am I only mentoring or promoting people who look like me? “Every person should be able to bring their whole self to work,” Gearhart said. “How are you making adjustments as a leader and asking yourself what you’re being told? All women are not just one group. Look at courageous authentic conversations.”

Commit to being a people-first company

“If you put people first, then there’s no way you can underestimate the benefits of opening your ears to hear things differently,” Gearhart said. “We’re at risk of losing even more women in the workplace but if we take bold steps to rise to the moment, we can end up laying the foundation for a flexible and equitable workplace where gender diversity is accelerated to levels like never before. It’s not, ‘can you?’ or ‘can we?’ It’s ‘will you?’ or ‘will we?’”  — Source: Title sponsors for MUFSO include the Coca-Cola Company, PepsiCo Foodservice, and Johnsonville Foodservice.

Bankrupt HopCat Parent Bought for $17.5 Million

BarFly Ventures, parent of HopCat, Stella’s Lounge, and Grand Rapids Brewing Company has emerged from bankruptcy, selling for $17.5 million to private investment firms Congruent Investment Partners and Main Street Capital. Congruent and Main Street, previously lenders to the company, will operate 11 units under the name Project BarFly LLC. “We know the business extremely well from our experiences over the last five years,” Travis Baldwin, founder of Congruent, said in a statement. “We strongly believe in each restaurant concept and intend to return the company’s focus to providing a unique, best-in-class customer experience. Our goal is to focus efforts around the company’s key markets and ensure HopCat, Stella’s, and Grand Rapids Brewing Company remain a thriving part of these communities.” When BarFly filed for bankruptcy in June, founder Mark Sellers attributed the company’s decline to an increase in competition and saturation of the craft beer market. He said BarFly was meeting those challenges until the COVID pandemic arrived. State and local restrictions forced a 100 percent drop in revenue for three months. He told the Michigan House of Representatives Regulatory Reform Committee at the time that his company was evicted from one HopCat location and was in default at other stores. The company entered court proceedings with more than $30 million in debt.

According to MLive, HopCat attempted takeout, but the switch to off-premises wasn’t breaking even. Baldwin said BarFly is renewing efforts to focus on off-premises sales and restoring hours of operations across each of the 11 locations. “Over the last several months, the home office support team, general managers, and restaurant team members have worked hard to reopen the restaurants and stabilize the company,” said Ned Lidvall, CEO of Project BarFly. “The company has continued to improve operating results in a difficult environment by focusing on keeping our team and guests safe, improving our off-premise sales, and reconstructing our business as the marketplace expands and allows. The whole management team and I are very excited about the new owners. We think it’s a great fit for the company, and the energy and collaboration they bring will only enhance our recovery and growth. We are also thankful for our loyal guests and teammates—and vendor and landlord partners who have been working hard to make our progress possible.” BarFly was founded 12 years ago when HopCat first opened in Grand Rapids, Michigan. The chain’s expansion was financed by debt instead of cash to accelerate growth. However, underperforming locations shuttered and the COVID crisis worsened the trend. However, the new owners said BarFly is preparing for a turnaround. “HopCat, Stella’s and Grand Rapids Brewing Company are important to both Grand Rapids and the state of Michigan,” said Nick Meserve, managing director of Main Street, in a statement. “We intend for these restaurants to succeed and very much believe the company can return to growth as the pandemic subsides. This is much-needed good news for the local community and restaurant industry as a whole.” – Source: fsrmagazine.

Q3: Red Robin permanently closes 5 restaurants, loses $6.2 million 

Same-Store Sales at the Casual-Dining Restaurant Decreased 25.1% for the Quarter

Though Red Robin Gourmet Burgers is experiencing same-store sales improvements in recent months, the casual-dining chain is still struggling with plunging visits due to dine-in restrictions tied to COVID-19. Same-store sales for the quarter ended Oct. 4, decreased 25.1% driven by a 24.6% decrease in guest traffic. Average check declined by 0.5%, driven, in part, by fewer orders for beverages and premium burgers, the company reported Thursday. The company logged a $6.2 million net loss, widening from last year’s third-quarter loss of $1.8 million. Six of 35 temporarily closed company-owned restaurants reopened during the quarter and five shuttered permanently, the company said. CEO Paul Murphy, who started last year, called the quarter an “inflection point” for Red Robin, which has seen sales improve since the onset of the pandemic. “Comparable sales grew from negative 41.4% in the second quarter, two negative 13 to 14%. exiting the third quarter,” he said. Off-premise sales increased 127.2%, accounting for 40.7% of total food and beverage sales. Expanding outdoor seating by adding tables and heat lamps under all-weather tents has helped offset indoor seating restrictions. This makeshift outdoor dining allows restaurants to increase capacity by 10% to 15%. It’s also driving a 4% increase in comps, Murphy said. Murphy said the company is starting to install partitions between tables in order to expand indoor capacity, where allowed, as winter approaches. Later this month, Red Robin will return to traditional TV advertising to help drive visits Monday through Thursday. The company was “filled with optimism” before the pandemic, Murphy told investors. Through the first eight weeks of the year, same-store sales grew by 3.7%. COVID, he said, served as a catalyst to prioritize certain strategies including streamlining operations, trimming the menu, and adding Donatos pizza to the menu. To date, Donatos is now in 79 restaurants. The company plans to add Donatos to 120 locations in 2021. “We are confident in our ability to invest in the growth of Red Robin as we emerge from the pandemic,” Murphy said. – Source: NRN.

 

Economic recovery for restaurants remains uncertain, National Restaurant Association CEO Tom Bené says

The uncertain economic recovery for restaurants in the wake of the COVID-19 pandemic has slowed in recent months, posing more hurdles for operators. In September, 32 states reported losses in restaurant jobs, and industry employment remained about 2.3 million positions below pre-COVID-19 pandemic levels. “It’s been a very challenging environment,” said Tom Bené, president and CEO of the National Restaurant Association and CEO of the National Restaurant Association Educational Foundation since June 1, during a “The State of the Industry” session, sponsored by Del Monte Foods Inc., at Restaurants Rise powered by MUFSO. After a growing number of openings during the summer months as cities and states eased coronavirus restrictions, the fall started to see closures again. “A recent survey found that 40% of operators are unlikely to be in business six months from now if there is not additional support,” Bené, left, said, adding that the association has been polling restaurant owners nearly monthly since the coronavirus pandemic was declared in March. “We need to do everything we can to not only keep these restaurants healthy and profitable but also open,” he said, adding that the federal government needed to consider more help beyond the initial Paycheck Protection Program and other initiatives enacted immediately after the pandemic was declared. About 75% of full-service restaurants have been taking advantage of outdoor dining, accounting for about 44% of sales exclusive of take-out and delivery, but that will be challenged as northern-tier states move into the cold weather of fall, Bené said. Holidays, often a lucrative season for restaurateurs will be difficult for operators this year, especially as local jurisdictions are imposing new restrictions on dine-in capacity as COVID-19 cases surge. The impact of the pandemic could total $40 billion in lost sales just in the final two months of the year, Bené noted. “We have started to see an acknowledgment by some of the public health officials that COVID is not necessarily spread in restaurants,” Bené noted. “In fact, they’ve talked a lot more about family gatherings and other types of activities that are having a bigger impact on the increased transmission of cases,” Bené said the National Restaurant Association works to focus on the entire industry, despite some segments — such as quick-service, drive-thru and delivery — showing success during the pandemic. “The reality is there are operators across the entire industry that have been impacted,” Bené said. “We are much better together. All types of operators — including independents, franchisees, and chains — working together will make us stronger.” Bené, who served as president and CEO of Houston-based distribution giant Sysco Corp. before taking on the association role, added that suppliers, distributors, and operators have to work together to help the recovery. “Great ideas come from everywhere,” he said.

Some pandemic trends are likely to remain, even after a potential vaccine is widely available, Bené said. Consumers’ adoption of off-premise use of restaurant will likely remain, he said, and they have accelerated their use of new technology, such as smartphone apps and quick-response, or QR codes. The savings of not having to print menus and the flexibility to change prices quickly could be long-term advantages, Bené noted. With reduced dine-in capacities, brands will discover ways to use real estate better with smaller footprints and catering possibilities. Bené advised that the top thing anyone in the industry should do is to remain engaged and to join some organization to make sure their voices are heard on issues from the economy to diversity. “This is so much we can do,” he said. “There is so much impact we can have.” The association has estimated that as many as 100,000 of the nation’s restaurants closed permanently because of the pandemic, and it estimated sales losses by the end of the year could total $240 billion. Prospects for more federal aid are on hold until after the November elections. “Certainly for restaurant operators, we didn’t have a lot of vote in whether we were closed or when we’d get a chance to reopen,” Bené said. “We’ve done an amazing job as an industry, trying to create the environment where consumers and guests can feel safe coming into a restaurant,” he said. “But we need to continue to tell that story.” title sponsors for MUFSO include the Coca-Cola Company, PepsiCo Foodservice, and Johnsonville Foodservice.  – Source: NTN

Wendy’s Breakfast Nabs new Customers as Pandemic Pushes Consumers to Break Habits

The coronavirus pandemic has upset consumers’ usual breakfast habits, leading fast-food Wendy’s has become the rare restaurant company to lure customers to its restaurants for breakfast even during the coronavirus pandemic. In the last eight months, consumers broke their old breakfast habits and began eating the early morning meal at home, spurred on by office closures and virtual schooling. The shift in behavior has translated into higher sales for cereal makers General Mills and Kellog, who had been struggling to revive consumer appetite for the likes of Cheerios and Frosted Flakes before the crisis. For fast-food restaurants, on the other hand, the abrupt transition has dragged down breakfast sales, even as their broader business recovers quickly. Coffee chain Starbucks, which relies on the early morning commutes of its loyal customers, reported same-store sales declines of 9% in its latest quarter. Executives said customers have shifted to making their coffee runs later in the morning or in the early afternoon. Some franchisees of Yum Brands Taco Bell decided to open restaurants later, which helped with labor costs but temporarily cut breakfast from their menus. The early morning meal accounted for 4% of sales in the third quarter, down from its usual contribution of 6%, although more than half of operators continue to serve breakfast. But Wendy’s, which began offering its breakfast nationwide just a few weeks before lockdowns went into place, is bucking that trend. Breakfast accounted for 7% of the company’s weekly sales — down slightly from last quarter’s 8% — and added about 6.5% to its U.S. same-store sales growth of 6.6% during its third quarter. Executives said that breakfast sales grew in the third quarter, compared with the previous three months. Reduced competition from Taco Bell and higher spending on marketing to boost awareness could be helping Wendy’s breakfast sales. In its most recent quarter, Wendy’s reported spending $6.2 million on advertising its breakfast offerings, up from $2.2 million in the prior quarter. CEO Todd Penegor told analysts Wednesday that the chain’s number of repeat customers is “very strong,” suggesting that Wendy’s Frosty-ccino and Breakfast Baconator are convincing consumers to build new breakfast habits. “We are confident that we can continue to grow this business into the future as more and more people fall back into their daily routines,” he said. Across the broader industry, breakfast traffic is improving, according to data from the NPD Group. In September, visits were down just 12%, compared with a low point of 35.8% in April. As consumers return to the drive-thru lane for breakfast sandwiches and hot coffee, Wendy’s is in a unique position of strength to attract new consumers to form different habits. Despite Wendy’s breakfast success, shares of the company were down more than 4% in afternoon trading after it fell short of analysts’ revenue estimates. Wendy’s stock is up more than 6% over the past 12 months. The shares, which have a market value of nearly $5 billion, hit a 52-week high of $24.91 on Oct. 16. On Wednesday, Wendy’s also announced plans to restructure some of its operations, a move that will cost it between $7 million and $9 million for severance and office closures. The company also plans to test drive-thru-only locations. Both decisions likely to have their roots in pandemic-inspired habits. More diners are using drive-thrus to take their food to go and Penegor said Wendy’s needs less office space since workers have been effective working from home during the Covid-19 crisis.  – Source: CNBC.

Starbucks’ Holiday Menu and Red Cups Return Across the US

Red cups are returning to Starbucks. Starbucks announced that its holiday menu returns on Friday, November 6. That means drinks including the Peppermint Mocha, Toasted White Chocolate Mocha, and Eggnog Latte are back on the menu, as well as four new festive “red cup” designs. The chain is also giving away free reusable, collectible holiday cups on Friday to customers who order a holiday beverage. Starbucks’ limited-edition seasonable merchandise, including mugs, tumblers, and festive gift cards also go on sale on Friday. “While the holidays may feel a bit different, there are moments of joy to be discovered with a holiday cup from Starbucks in hand,” the coffee giant said in a press release. This year, Starbucks is launching four new designs. Starbucks has suspended its practice of refilling reusable cups, due to the pandemic. However, the coffee giant continues to offer a 10-cent discount for people who show up with a reusable cup. Many Americans are grasping for whatever festive celebrations they can find during the pandemic, making the red cups more relevant than ever in 2020. Katherine Cullen, the National Retail Federation’s senior director of industry and consumer insights, told Business Insider that Halloween spending was up among those celebrating, as shoppers sought a little joy in a time when people are dealing with a lot of uncertainty. Starbucks already saw the power of its seasonal drinks with the Pumpkin Spice Latte and Pumpkin Cream Cold Brew. Sales of pumpkin-flavored drinks reached record highs in 2020, Starbucks CEO Kevin Johnson said on a call with investors last week. “We’re excited with the momentum we saw from our fall promotion,” chief financial officer Pat Grismer said. “And so that gives us confidence that, as we move into the month of November with our holiday promotion, we will sustain the momentum.” – Source: Business Insider.

How Tropical Smoothie Became One of COVID’s Success Stories 

Digital Innovation Keys the Progress

Tropical Smoothie Cafe has been one of the industry’s true COVID-19 success stories. The brand’s same-store sales ballooned 19.5 percent, year-over-year, in Q3—a company record. Year-to-date comps are 3.4 percent higher than 2019 levels. Meanwhile, it opened 75 restaurants and is on track to surpass 85 by year’s end. Perhaps equally vital, Tropical Smoothie’s pipeline hasn’t slipped, despite cautious conditions (to put it lightly). By October, the chain signed 184 franchise agreements to expand well into the future. Yet this swell wasn’t a day one reality. Tropical Smoothie pivoted just like everybody else. And part of that was accelerating technology to better serve a COVID climate as well as whatever might arrive next. Tropical Smoothie’s digital sales consistently climbed over recent months. In August, digital accounted for 35 percent of the brand’s business, with some stores generating 65 percent or more. Michael Lapid, chief information and digital officer with the brand, spearheaded COVID lifelines like curbside pickup, third-party partnerships, and helped advance communication tools in Tropical Smoothie’s mobile app and guest contact center, among other plans. Lapid, who joined the company in October 2019, chatted with QSR about the brand’s journey and what it has planned for the next stage of the crisis. Let’s go back to the early days of COVID. How much of the business was dine-in before the pandemic? How did the digital split up (between carryout/delivery, etc.)? The shift away from dine-in business across the restaurant industry was something no brand had experienced before the pandemic. Fortunately, as a fast-casual concept, our business model incorporated operational procedures for carryout business prior to the pandemic, and while the dine-in part of our business was initially impacted, we were able to quickly mobilize a more convenience-based ordering model to meet the new needs of our guests and sustain business for our franchisees. Prior to the pandemic, we were 31 percent dine-in to 69 percent carry out. Today, we break down carryout a bit more to include all digital ordering and off-premise sales because our dining rooms remain closed and we are experiencing 35 percent digital transactions. When dining rooms started to close, from a tech side, what were some areas Tropical Smoothie targeted from the outset? Where did you see customer behavior going and how did you move to meet it? The pandemic completely transformed consumer behavior. As dining rooms closed, our guests began ordering food to be delivered or picked up, whether that was through the drive-thru or curbside, and we knew we needed to pivot our strategies to stay relevant. Within two weeks of the pandemic striking, our team rapidly expanded or rolled out new initiatives to adhere to the team member and guests’ safety, such as third-party delivery, curbside pickup, and shortly thereafter Tropical Smoothie Cafe branded delivery available in the mobile app and via online ordering.  Talk specifically about curbside. What did it take to roll that out, how fast was it, and what were some learnings you’ve continued to try to improve upon? Our team was able to launch curbside pickup in 10 days from when businesses started to close dining rooms, which includes the development of the mobile and web experience and the execution across all of our locations. We strongly anticipate that curbside ordering will remain in high demand for consumers and we will continue to refine our processes. For example, we are currently piloting a guest notification experience to alert the cafe when the guest arrives to pick up a curbside order.

 

TROPICAL SMOOTHIE CAFE –Michael Lapid Joined the Brand in October of Last Year.

How has delivery progressed? How does the delivery customer during the pandemic compared to the one before? How much of this are new customers versus core? While many locations participated in third-party delivery at a local level, we rolled out third-party delivery systemwide to accommodate the consumer demand across four of the largest providers—Uber Eats, DoorDash, Postmates, and Grubhub. Making Tropical Smoothie Cafe available on these platforms has resulted in an increase in third-party sales overall. Through our presence across these platforms, we’ve been introduced to new guests. Additionally, due to the steady growth in demand for delivery, we launched Tropical Smoothie Cafe branded delivery, powered by DoorDash, to accommodate those loyal guests who frequently order via our mobile app or .com site. Where do you see both of these channels headed? Is curbside here to stay? How do you think third-party delivery will evolve? Is first-party on the table? Absolutely! Our business model was able to easily adapt to curbside pickup and delivery, and our franchisees have seen great success with these order modes. So much so that digital sales currently make up 35 percent of all sales, up from 24 percent at the beginning of the year, with our best performing cafes seeing 65 percent in digital sales. These initiatives are here to stay, as we don’t believe this consumer demand will be going away anytime soon. How critical has the app been during this time? Have you seen a major boost in usage? What are some ways Tropical Smoothie has incentivized visits through the platform, as well as reduced friction in the ordering process? We launched a new mobile experience for the Tropical Smoothie Cafe app in late-September to enhance the guest experience. The app is powered by Punchh, a robust CRM (customer relationship management) system that will allow us to communicate more effectively with our guests. The app has allowed us to provide more convenience to our guests with increased self-service abilities including scanning receipts to earn rewards. Guests can place their orders through the app for delivery, curbside and in-cafe pickup, and scan their app or receipt to redeem and earn rewards. The app has also helped streamline the ordering process for our cafes. In the first three weeks, we migrated over 46 percent of our most active members identified prior to launch. We have also more than doubled the number of new members we gained during the same timeframe last year. With these captive users, we can now target our marketing strategies based on their frequency and preferences. Do you believe mobile apps are going to remain a key element in the consumer journey after COVID? And if so, how can brands keep customers engaged even when dine-in returns? Mobile apps will most definitely remain a key element after the pandemic especially given the ubiquity of mobile phones. Businesses were already developing ideas to elevate mobile apps pre-pandemic. The pandemic accelerated many of these initiatives, forcing businesses to prioritize it. We’ve seen some markets reinstate dine-in, and brands are prioritizing the launch of creative strategies that will keep customers engaged (in-app touchless menus, payments, reservations, etc.). For Tropical Smoothie Cafe, our new app and loyalty provider will allow us to deliver relevant personalized messaging and drive engagement across various channels and in a variety of formats (SMS, push notifications, email, etc.). All of this is possible because of the combination of a new mobile app and loyalty technology. How is the data coming into play here? What are some insights Tropical Smoothie has gleaned from COVID spending that can play a role after? In what ways is it helping now? Data is the backbone of the enterprise. We have a variety of sales, operational, and guest data across the business and a world-class analytics team. Throughout this pandemic, our digital sales have accounted for 35 percent of our total sales, and our best performing digital cafes have seen 65 percent or more in digital sales. We’re continuing to see a sustained lift in digital ordering and higher checks due to shifts in consumer preferences. As part of our “Anytime, Anywhere” strategy, we continue to see strong demand for our products in third-party marketplaces. Each third-party delivery partner brings in an average of $117 per cafe per day, resulting in 10 percent sales increase for the year. These numbers show an immense increase for this to-go consumer demand, and it’ll continue to play a big role after the pandemic. Lastly, we’re always looking at our franchisee’s profitability and with new national rates, these third-party transactions are profitable for our system. What are some other tech initiatives the company has strengthened during this time? Accommodating the shift in consumer demand, curbside pick-up and delivery has been our biggest focus. Because our staff and guests’ safety are of the utmost importance. Our team is dedicated to fine-tuning the experience across all order modes outside the four walls of the cafe and driving traffic and frequency through 1:1 marketing across those order preferences. Where is there still an opportunity ahead? Tropical Smoothie Cafe is looking into several new opportunities and has developed a robust roadmap to help enhance the brand and meet the demand of consumers. A high, short-term priority for us is the implementation of touchless payment that is compatible with Google Pay or Apple Pay. Just generally, what do you think might be the biggest tech-fueled change to come out of COVID for restaurants? Today, everything is touchless or contactless. Restaurants have adapted their models to provide a seamless and risk-reduced experience for their staff and guests with touchless menus, touchless payments, pre-order pickup, and more. The key is making these touchless interaction points integrated so it doesn’t feel clunky and doesn’t take away from the hospitality or experience. For us, we continue to explore innovative technology to deliver on this experience. These initiatives will be the new normal moving forward. – Source: QSR.

Qdoba Accelerates Non-Traditional Growth

QDOBA Mexican Eats continues to grow its non-traditional footprint across universities, airports, and other venues where a premium is placed on convenience, speed, quality and value. Since August, the Brand has opened eight locations on college campuses across the country, including the University of Cincinnati, University of Nebraska —Lincoln, Purdue University, University of Pittsburgh—Bradford, ASU Polytechnic, North Carolina A&T University, Kentucky State University, and Northern Illinois University. An additional two non-traditional locations are slated to open by the end of the year. This year’s non-traditional openings add to a collection of QDOBA restaurants which includes flexible footprints in several highly attractive settings. QDOBA has nearly 100 restaurants in non-traditional environments open today, including dozens of restaurants on university and college campuses, military bases, airports, and a variety of other venues. “Our success in growing the non-traditional segment of the business comes from our belief that we bring flavor to people’s lives no matter where their lives take them,” says Mary Richardson, Director of License Operations and Business Development at QDOBA. “We are a nimble brand that works with partners on space restrictions and menu offerings to meet their needs and the needs of the customers they serve. College campuses and military bases especially are looking for fresh and healthy options, and QDOBA’s menu is a perfect fit. As we continue to strengthen our existing partnerships and develop new ones, we’re eager to expand our non-traditional footprint and bring more flavor to people’s lives.” Several design and floor plan options make QDOBA an attractive development opportunity within airports, university campuses, hospitals, and other venues. Additionally, QDOBA benefits from four strong dayparts; attractive unit economics; national brand awareness; a chef-driven, a diverse and flavorful menu featuring healthy options; and nationwide distribution channels. “Foodservice companies and operators love our concept because we are able to fulfill our promise of great food and fast service in a variety of venues across the country,” says Peter Ortiz, QDOBA’s recently appointed Vice President of Franchise Development. “Growing our non-traditional footprint is an important part of our franchise strategy and I’m excited to continue to develop close ties with high-caliber, multi-brand operators.” As QDOBA continues to expand in traditional and non-traditional venues throughout the United States, it is actively seeking qualified multi-unit and multi-segment groups with experience in development strategy and focused on diversifying with a bold concept. – Source: Fast Casual.

New Restaurants are Starting to Open in the Pandemic

A lot of discussions have been held and predictions shared when it comes to restaurant closures and COVID-19. And, generally, talk of expansion and openings is framed against a post-pandemic backdrop—a world where big chains get bigger and well-capitalized brands flood the real estate left behind. But what about present growth? One potential byproduct of pandemic conditions is that it stirs the entrepreneurial spirit. Franchisors are banking on this. People want to take control of their destiny in a time defined by what they can’t do. Perhaps someone was let-go from their job and wants to get in business for themselves. Or maybe those same lowered barriers for entry can pave the way for an individual with a restaurant dream who needed a push. Yelp on Thursday released its Q3 Economic Average report. While certain signs reflected continued economic uncertainty, others uncovered promising signs of adaptability. “Restaurants and food businesses, an industry hit hard by the pandemic, have seen a significant number of brand-new business openings amid the increased challenges,” Yelp said. “These openings and re-openings have been sustained by focusing on health and safety, as well as new approaches to serve their customers, including moving their services and patrons outdoors.” Essentially, there’s a rising number of entrepreneurs opening up restaurants at this juncture in the crisis, at a higher rate than one might expect given the setbacks. Yelp’s data indicated the number of restaurants and food-based business openings are increasingly more in line with 2018 and 2019 volumes (Yelp determines openings by counting new businesses listed on its platform). The types of restaurants dotting the COVID landscape have changed, however. There aren’t many elaborate fine-dining interiors popping up, Yelp noted. Rather pandemic-optimized venues appear to be the eatery of the future—concepts with some combination of features like large patios, spaced-out tables, order-ahead menus, and efficient-service cuisine. Compared to this time last year, Yelp observed an increase in new openings nationally for open-air food services, such as farmers’ markets (211 openings) and food trucks (1,734). Additionally, pop-up restaurants (100) and seafood markets (84) experienced a jump in openings, year-over-year, “catering to consumers’ interests in novel ways to dine and shop for food outside of traditional restaurant experiences,” Yelp said. The company’s research indicated openings climbed for food businesses that specialize in sweet treats often enjoyed at home or sent to friends and family for socially distant celebrations. Think cupcakes (494 openings), custom cakes (512), and desserts (1,615). Going back to April, restaurants endured a large drop in new openings, as you might expect. But by May the rebound was set in motion, with a 29 percent average monthly increase in new restaurant openings from May to July. This leveled to flat in August and September, with roughly 6,600 new restaurants opening each month. There were only 100 fewer new restaurant openings in September compared to September 2019. New openings in Q3 as a whole were down just 10 percent, year-over-year. Keep in mind, however, this is running counter to heightened closures. In September, Yelp’s Economic Impact Report showed 32,109 closures as of August 31, with 19,590 of those listed as permanent, or 61 percent. The National Restaurant Association has predicted 100,00 could shutter in 2020. This chart below from Yelp illustrates the company’s sentiment—that opening rates have returned to pre-COVID days.  – Source: QSR.

 

Taco Bell to Throw 400 Socially Distanced Hiring Parties

More than 400 Taco Bell restaurants across the country will be hosting hiring parties Tuesday, a festive program the Irvine, Calif.-based chain first tested in 2018 to attract more applicants. The event, now in its third year, has been modified to incorporate social-distancing protocols as the company looks to hire hundreds of employees for the busy holiday season. The events typically include free swag and food for potential applicants. In the past, the company has targeted teens, a pool of job candidates that quick-service chains have seen dwindle in recent years. “From students who may be home for the holidays due to altered campus schedules, to people whose jobs were impacted by the pandemic, Taco Bell is a great option for part-time or full-time work,” the company said. New safety protocols include drive-up interviews, so candidates do not have to leave their car. Taco Bell isn’t the first quick-service chain to conduct “drive-up” interviews. In September, McDonald’s operators in Southern California held a similar hiring event. Tables and chairs will be six feet apart and set up outside under tents. Parties will be held from 2-5 p.m. To find a hiring party, Taco Bell said those interested can call their local restaurant. – Source: NRN.

Restaurants Turn to Innovative Outdoor Solutions Ahead of Winter

As coronavirus cases continue to spike, some states are reinstating restrictions on indoor dining. Restaurants already reeling with huge financial strains are trying to find innovative solutions to keep their doors open. Some are thinking outside the box and into a bubble. “What you’re seeing in Washington D.C. and Chicago and elsewhere are local mayors trying to incentivize and help restaurants winterize their outdoor spaces and really doing whatever they can to encourage outdoor dining,” said Mike Whatley, vice president of state and local affairs for the National Restaurant Association. But with indoor dining shut down in many places across the country, geodesic domes or igloos, tents and mini-greenhouses are popping up to help keep diners warm and safe. The National Restaurant Association says a recent survey indicates 49% of full-service restaurant operators say they are taking actions like installing tents or patio heaters to extend their outdoor dining season. Restaurant owner Sophie Huterstein and her staff built 14 4×6 greenhouses for use outside her restaurant, The Darling. “We’ve been utilizing this system of being able to dine together, apart from the moment we reopened after the initial shutdown, as a genuine intent to protect the guests and our staff,” she said. The idea was inspired by an installation in Amsterdam. Each one can accommodate two to four people and is helping sustain her business while indoor dining is restricted. “You are sitting closely in there, but it is our hope that no one would dine with people that they are not very familiar with,” said Huterstein. Safety experts say this type of seating can keep people safe if there are frequent cleaning and ventilation. California resident Sarah Moffat dined inside a greenhouse for the first time. “I don’t know if we’re gonna have a sense of normalcy ever again,” said Moffat. “But to have moments that you can share with friends and your close loved ones in a safe environment is kind of amazing.” The City of Chicago challenged designers from across the country to propose winter dining solutions. Atlanta-based national design firm ASD/Sky created a modular cabin inspired by ice fishing huts that would fit inside the footprint of a parking space. Their goal was to create a reason to stay on-site instead of taking out. “People just want an experience that’s what we’re lacking right now,” said ASD Sky Designer Nicole Grillet. “So that was the driver behind creating this idea.” Urban development designers Neil Reindel and Flo Mettetal were inspired by Legos with their “Block Party” concept. The compact, heated two-seater eat-in modules can be deployed and retracted. “Much like how you would previously push tables together, the idea would be that these frames of two could be connected in increments of two and you could have larger or smaller groups based on that,” said Reindel. It’s something they say could be utilized anywhere in the country. “It was really meant to be user friendly and kind of fit the needs of the restaurant wherever it is,” said Mettetal. With 40% of restaurant owners worried about staying in business through February, many are banking on futuristic dine-in concepts to help them brave the uncertain winter ahead. – Source: Restaurant Business online.

Chick-fil-A Gets Modular with Restaurant Construction

This past month, Chick-fil-A quietly opened a location that could reimagine its construction for years to come. The company’s Restaurant Development team spent the past several years looking into modular growth as it explored ways to improve Chick-fil-A’s remodeling and rebuilding plans. In October, the first location rebuilt using modular construction opened outside of Atlanta in Roswell, Georgia. With this approach, portions of restaurants are built offsite and shipped to the location, where they’re pieced together upon arrival. Chick-fil-A said it’s able to reduce construction schedules for rebuilds and remodels by 6–10 weeks. The benefits are straightforward. But the most notable one might be getting operators and employees back to work. Industrywide, long wait times on redesign projects can lead to turnover and renewed recruitment efforts, which get costly. Also, recouping sales and collecting ROI from design improvements sooner than later isn’t a bad lure, either. The design style, Chick-fil-A said, also allows for more consistent quality, as well as a reduction in construction waste. The brand plans to bring additional modular building projects to life “in the coming months.” “At Chick-fil-A, we’re constantly looking for ways to innovate and improve how we build our restaurants,” Gregg Lollis, senior director of Restaurant Design at Chick-fil-A, Inc., said in a statement. “Our team at Chick-fil-A has been researching this type of construction for several years, and we expect to introduce additional modular building projects in the coming months.” Because restaurants are created off-site in a controlled environment, weather conditions, like rain, snow, wind, and extreme temperatures will play less of a factor in development schedules, the brand added. “When it comes to rebuilding or remodeling a restaurant, this is a huge factor for our team,” added Chad Baker, principal reinvestment lead at Chick-fil-A. “The modular option gives us an advantage of starting these projects ahead of schedule before the existing restaurant even has to close its doors,” Chick-fil-A noted its development staff will be able to better control costs and build time by minimizing uncertainties related to schedule and labor. “By incorporating modularized construction into our restaurant development programs, we will be able to reduce the construction time needed to rebuild existing restaurants by 6-10 weeks,” Lollis said. “That allows our operators to minimize lost sales and increase team member retention.” “A shortened construction time allows us to keep employees engaged and excited about what’s coming in the future,” added Jim Waddle, the operator of the Roswell location. There are other benefits, too. Since portions of multiple restaurants are built at the same time during modular construction, Chick-fil-A can work to ensure consistent quality through testing and inspections. In other words, flaws are called out before modules show up on-site. “We knew that taking a modular approach would shorten the construction timeline, but we weren’t willing to sacrifice quality in the process,” said Trent Gilley, the lead designer of the modular building program at Chick-fil-A. “By building the restaurant offsite, we maintain control over the build process without the interference of outside factors, which helps ensure a consistent quality of construction.” By reducing construction waste, Chick-fil-A units will be built in a more sustainable and efficient way, the company said. Modular construction reduces site disruptions and impacts to adjoining property owners due to a shorter duration and less traffic generated on-site. Chick-fil-A generally keeps expansion goals tight to the vest. But, if the brand wants to, there’s plenty of whitespaces to grab. In 2019, Chick-fil-A was only one of six restaurant brands to eclipse $10 billion in domestic sales. But it had far and away from the fewest locations at 2,500. In fact, in all of quick service, Chick-fil-A is just the 19th largest brand on the map. How it stacks up by total system-wide sales year-end 2019: McDonald’s ($40.4 billion); Starbucks ($21.5 billion); Chick-fil-A (11 billion); Taco Bell ($11 billion); Burger King ($10.3 billion); and Subway ($10 billion). Also to note, Chick-fil-A is closed on Sundays. It makes up for this with an industry-leading average-unit volume of $4.517 million. Now let’s flip to U.S. unit count for those brands. Subway (23,802); Starbucks (15,041); McDonald’s (13,846); Burger King (7,346); Taco Bell (7,089); and Chick-fil-A (2,500). – Source: QSR.

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