1995: the year in review – a retrospective of the restaurant industry in 1995
Milford Prewitt
Politicians didn’t think too much about the foodservice industry in 1995, and that turned out to be a very positive development.
With Congress’ attention diverted to the Contract With America, the budget battles with President Clinton and the start of the official presidential sweepstakes, the restaurant industry, for the first time in years, enjoyed a full year without any new federal regulations, taxes or mandates.
Although Clinton continued to push for a 20-percent hike in the maximum wage, despite little support, much of the national legislative agenda turned out to be just what the industry wanted: less intrusion, less government.
Just as operators had hoped a year ago when the Republicans took over both Houses, Congress had refocused its sights away from restricting business growth and realigned its sights on restricting government growth.
There were even some legislators, believe it or not, who were talking about restoring 80-percent or even full business meal deductibility
That kind of optimism, combined with a Dow that popped the 5000 mark twice and projections of another year of flat inflation, bodes well for the industry in 1996. But before the promise of 1996 unfurls, 1995 ended with some disturbing economic and social trends that promise to haunt the foodservice industry for some time to come. Among the troubling ones are the shrinking labor pool, accelerated market saturation in the casual-theme segment, the near deathwatch on the double-drive-thru burger category, the loss of steam for several once-powerful foodservice companies and a deepening scarcity of seafood.
JANUARY
1994 ended with a bombshell: General Mills announced plans to divide into two companies in December, spinning off its restaurant division to a management-led team headed by Joe R. Lee, who would be named chairman and chief executive of a new publicly held company. For more than a quarter century, General Mills had been the parent company of Red Lobster. Later General Mills launched The Olive Garden and China Coast. The company said the split was necessary so that General Mills and the new restaurant company could each focus on their separate restaurant and consumer foods businesses. Among the casualties would be Ron Magruder, president of The Olive Garden, who I company months later.
January had another bombshell.
Just one year after the passage of the North American Free Trade Agreement, the Mexican peso collapsed, falling more than 30 percent against the dollar, despite Mexican government pledges to defend its currency. For U.S. operators in Mexico who are expanding units or franchising south of the border, the devaluation pulverized business and doubled the cost of U.S. imports.
But the fuse was removed from some ongoing fights.
In a breakthrough the National Council of Chain Restaurants, along with groups representing employers with tipped employees, hammered out an alternative tip-tax program with the Internal Revenue Service that could eliminate audits. The alternative program would require employers to take a more active role in educating employees about tip taxes — something the current law does not require. The new plan also required employers of tipped employees to keep a record of their workers’ charged sales receipts to prompt tip reporting.
In other places battles were just beginning.
In New York operators were fuming over the passage of the Smoke Free Air Act, one of the toughest anti-smoking bans in the country. The act, which became law in April, prohibited smoking in restaurants with 35 seats or less.
New York made waves for more benevolent reasons in January with the opening of One City Cafe, the first non-profit restaurant in Gotham. Founded by the Food and Hunger Hotline, One City Cafe became the first table-service restaurant in New York to accept food stamps.
In Manhattan’s financial district, the New York Vista hotel reopened, virtually two years to the day of the World Trade Center bombing by Islamic fundamentalist terrorists. Renovations and repairs cost nearly $60 million.
A dual-branding marriage led to divorce court, a separate courtship that could have led to a half-billion-dollar merger dissolved and a management-led buyout fizzled in January.
Just three months after combining several of its Carl’s Jr. units with Green Burrito Mexican restaurants in a dual-branding alliance, CKE Restaurants abandoned the test. The company said it would create its own fast-food Mexican concept, the Picante Grill.
Just two weeks after the launch, Green Burrito’s parent, GB Foods, sued CKE for more than $100 million, claiming that its onetime partner had appropriated trade secrets and breached its contract in making a “copy” of Green Burrito in everything except name. CKE denied the allegations, arguing that it had been selling Mexican food for 40 years.
Less than a week later, CKE Restaurants would counter-sue, claiming that the dual-brand concept was mutually developed and therefore could not have been copied illegally.
The other divorce was the breakup in the courtship of Triarc Cos. — Arby’s parent — and Long John Silver’s. Citing escalating interest rates and adverse conditions in the bond markets, Triarc abandoned its plans to buy LJS.
At The Ground Round a senior-level, management-led attempt to buy the casual-theme dinner-house chain through a new company called GRR Acquisition Corp. ended. Executives said they were unable to raise the $106 million to take the company private.
While the move was not necessarily a breakup, Pizza Hut pulled the plug on its 2-year-old Fastino’s fast-food foray. Instead of a new concept, the largest Pizza chain began testing the Pizza Hut’s Pizza & Pasta Cafe concept in an attempt to revive its lethargic red- roof business. The first site was in Bowling Green, Ohio.
In another name change and market repositioning that month, Morrison Restaurants abandoned its 2-year-old test of Snapp’s, a home-style concept, in favor of converting it to Fresh Cooking, the company’s cafeteria concept.
Not to be outdone in the testing arena, McDonald’s began testing a self-serve, all-you-can-cat breakfast buffet at several restaurants in Georgia.
In a major executive suite change that was not too unexpected but was still two years earlier than planned, Norman Brinker, founder and spiritual icon of Brinker International, turned over the chief executive’s mantle to Ron McDougall. Brinker would remain chairman of the company he founded. Diversified restaurant conglomerate Shoney’s Inc. underwent some executive suite shuffling when chairman and chief executive Taylor Henry resigned. But under pressure from its franchisees and investors, Shoney’s formulated a plan to pump as much as $100 million into revamping the company’s namesake chain and to improve its competitiveness.
At Hooters of America, Richard Akam, previously executive vice president, was promoted to president. Upon the appointment Hooters announced it had signed a contract to link its name with the Hula Bowl, the college all-star football classic.
Richard P. “Dick” Bermingham, after heading Sizzler International for nearly three decades before his retirement a year ago, resurfaced as vice chairman of American Golf Corp., managers of more than 200 golf courses in 22 states. Birmingham’s role is to oversee an upgrade in all of the properties’ foodservice capabilities.
FEBRUARY
The month of love didn’t start out that way.
Operators attacked President Clinton over his renewed efforts to raise the minimum wage from $4.25 to $5.15, forming a group called Coalition for Job Opportunities. Created right after the president’s state of the union address, the organization’s members included the National Council of Chain Restaurants, the U.S. Chamber of Commerce, Marriott, General Mills Restaurants and other economic groups.
Following a trend that began in January, several companies began to scale back their operations or restructure their top executive management core.
The biggest was Walt Disney Co.’s intention to cancel its $3 billion expansion of its 40-year-old Disneyland theme park in Anaheim, Calif. Under a greatly scaled-back plan, the Anaheim-based amusement Mecca will undergo only incremental improvements and hotel additions.
Another big scaling back occurred at the Pittsburg, Kan.-based NPC International, parent company of Skipper’s, Tony Roma’s Ribs and Pizza Hut’s largest franchisee. NPC said it would cut its 197-limit Skipper’s chain in half, citing chronically poor sales, disappointing investment returns and troubled operations.
Simultaneous with NPC’s news, the company also said that Mitchell Boyd, president and chief executive and former Shoney’s chief executive, would retire. He was replaced by Jim Schwartz, promoted to the office from executive vice president and chief financial officer. At 34, he became one of the youngest heads of a major foodservice company.
Whataburger, Corpus Christi, Texas, also realigned its top management corps in February to streamline management and get the company “back to basics. ” Among the changes were John M. McLellan, a 15-year veteran who was named senior vice president, and R. Bruce Abel, appointed senior vice president of the company’s support group.
Robert Colombo, founder of the Sfuzzi restaurant chain, Dallas, resigned as president. He cited brutal competition and a need to be with his family as the reasons for his decision.
Siblings John, Elk Dick and Dottie Brennan, all of Commander’s Palace fame in New Orleans, retired from day-to-day operations and said they will turn over the reins to a new generation of family members.
Warner LeRoy, the flamboyant owner of Tavern On The Green in New York’s Central park, snatched celebrity chef Patrick Clark away from the Hay-Adams Hotel in Washington to head the kitchen at his swanky dining palace.
Another big trend that surfaced in February was the large number of hotels investing in the takeout business. Several prominent, independently owned hotels and chain operations in New York, Chicago, San Francisco, Detroit and elsewhere confirmed that takeout was helping to boost their food and beverage business as much as 15 percent.
But few trends were placing as much pressure on the industry as the dwindling labor shortage. In February, new statistics from the Labor Department showed that the nation’s 5.7-percent unemployment rate was presenting severe staffing and expansion quandaries for chains in the Northeast, Southeast, Midwest and South Central.
One result of the tight labor market was that several chains said they were re-examining their expansion plans. In addition to a dearth of workers, chains attending the Montgomery Securities Growth Stocks Conference in New York said a lack of access to capital would force them to slow their growth. Among the chains attesting to the trend were Taco Cabana, Quantam Restaurant Inc., Flagstar Cos. and Pollo Tropical.
Several major chains entered new businesses, changed menu categories or repositioned themselves in the marketplace in February.
Among the biggest was Boston Chicken’s decision to change the name of its units to Boston Market. The company also dropped the word “rotisserie” from its logo. Both moves were meant to highlight the chain’s greatly expanded menu offerings. Boston Chicken Inc. would remain the name of the corporate parent.
Taco Beff, stinging from criticism from nutrition groups about Mexican food, launched Border Lights, a series of menu items that boast one-fifth fewer calories and less than half the fat of the chain’s usual fare. The rollout is backed by a $75 million marketing budget.
After a period of some quiet in January, court litigation throughout the industry picked up in February.
Actor Wilford Brimley sued Hardee’s, claiming an actor the chain had hired was impersonating him and would confuse viewers who identified him more with Quaker Oats. He was seeking $30 million. Hardee’s denied the allegations, claiming its intent was to find an actor who resembled the typical San Francisco cabdriver.
A federal district court judge in Baltimore threw out a 2-year-old lawsuit against Host Marriott Corp., filed by a group of Marriott Corp. bondholders who opposed the company’s split in 1993.
A Blimpie franchisee, Mike Arodak, filed a suit against his franchisor, charging that a nontraditional outlet in a gasoline station in Tampa, Fla., was encroaching on his business. His suit would uncover several similar actions in other chains where nontraditional expansion would be linked with encroachment.
Back Yard Burgers, Memphis, Tenn., settled a yearlong sexual and racial-discrimination suit against a franchisee by buying back the licensee’s single unit in Austin, Texas, for $355,000.
Lone Star Steakhouse was barred permanently from using the chain’s name anywhere in the state of Georgia. A U.S. district court judge upheld a permanent injunction secured by thre-eunit chain Lone Star Steaks.
Mayhem and murder returned to the foodservice arena.
Eugene Frieling, a 27-year-old T.G.I. Friday’s manager, was killed after four armed men wearing masks robbed his unit in Memphis, Tenn. A bartender was wounded seriously.
MARCH
Julius Caesar had legitimate reasons to fear this month, and so the restaurant industry in 1995.
A rash of highly publicized food-borne illness epidemics raged through the Southwest and Mountain states, depressing sales and spirits. A Taco Bell franchisee in Utah said business fell 34 percent following news about a hepatitis outbreak linked to a company-owned unit miles away. Sahnonella infections linked to eggs, hepatitis outbreaks and the lingering nightmare of the E. coli crisis three years earlier at Jack In The Box prompted the U.S. Department of Agriculture to enforce more stringent meat and poultry inspection measures.
At the same time some of the restaurant industry’s most senior executives joined a food safety task force formed by the National Restaurant Association to address the problem. The NRA found that 4,500 people each year die from diseases transmitted in restaurants.
Just one month after expressing fears about market saturation and a decline in quality sites nationwide, operators were surprised when Alex. Brown Sons, the Baltimore-based food-service investment and equity analysts firm, released a study finding there is plenty of room for new growth. In examining 211 major advertising markets, the analysts concluded there is substantial room for expansion, especially in the casual-theme dinner-house segment.
Restaurateurs in Denver cheered when the problcmplagued Denver Airport, which at $3.2 billion was the largest price tag on a publicworks project in recent years, finally opened after costly and embarrassing delays. About the size of the island of Manhattan, the airport includes a 6,000-square-foot food court, where operators will pay $300 a square foot.
The stability of the senior management ranks of the Irvine, Calif.-based Family Restaurants Inc. — formerly known as Restaurant Enterprise Group — parent company of Chi-Chi’s, El Torito, Coco’s and Carrows, was shaken when Mohammad “Mo” Iqbal resigned as president of the company’s Mexican dinnerhouse division. Iqbal, who said he departed to pursue other ventures, was being positioned as a substitute for chief executive Jack Goodall. Both Goodall and Iqbal assumed their posts in early 1994 when Foodmaker Inc. — which owns 39 percent of FRI — acquired its stake as part of a bankruptcy reorganization.
But FRI was not the only major foodservice company to experience changes among its top executives in March.
D. Randy Laney, executive vice president and chief administrative officer at Flagstar Cos. Inc., resigned. Previously, he had been at Rally’s as chairman, Before that, he was chief financial officer at Wal-Mart, having spent at that point his entire career at the giant discount retailer.
Dave Wachtel, president and chief executive of Western Sizzlin’, Nashville, Tenn., was removed from his post by the board of directors of the 300-unit chain. Disagreements with the board over the company’s direction was at the heart of the firing, and Wachtel said he was considering a breach-of-contract lawsuit.
And there was no element of accommodation between Dennis Riese, president of the Riese Organization in New York, and Bill and David Liederman, restaurant entrepreneurs best known for Mickey Mande’s and David’s Cookies. The two sides are suing each other over the Riese Organization’s refusal to abandon a site in Rockefeller Center that was to be turned into Television City, a theme restaurant.
Roy Rogers converted its 60 stores in Baltimore to Roy’s Char-Grill, a new concept with Western menu themes.
While others were looking at quick comfort. Pizza Inn Inc. was expanding nontraditionally with its new Pizza Inn Express kiosk concept for convenience stores.
Heartland Food Systems, Columbus. Ohio. the company formerly known as Rax Restaurants Inc., said it would drop the Rax brand name over the next two years after more than a quarter-century of operating the quick-serve roast-beef concept. The company would focus on its 163 Hardee’s units and other franchise operations. After the end of the current Rax franchise agreement in two years, licensees will be granted the option to keep the Rax name or switch.
Another company with a name change was Billy Blues Food Corp. Stung by bad publicity and management shuffles, the company changed its name to Watermarc Food Management Co. Watermarc said it needed a fresh start after suffering a string of losses.
Joining the anti-smoking crusade against secondhand smoke, Dunkin’ Donuts banned smoking in an of its 3,000 company-owned and franchised restaurants.
Meanwhile, in Maryland the state’s Court of Appeals upheld a lower court ruling that allowed a ban on smoking in all workplaces.
Arturo Toffes, an ex-Pizza Hut franchisee who expanded his restaurants to more than 234 units before he sold them back to the chain to end a bitter franchising suit, resurfaced to announce his intentions to launch a chain of upscale steak houses called Veladi Ranch Steak House.
A special group of independepent was selected into Nation’s Restaurant News Fine Dining Hall of Fame:
* Claude Rouas, Bob Harmon and chef Andy Sutton of Auberge du Soleil, Rutherford, Calif.;
* Chef-owners Christianne and Francesco Ricchi of i Ricchi, Washington;
* Guy Coscas and chef-owner Christopher Gross of Christopher’s, Phoenix;
* Maguy Le Coze and chef Eric Ripert of Le Bernardin, New York;
* Chef-owner Pierre Pollin of Le Titi de Paris, Chicago;
* The Swig family, Prince Alwaleed Bin Talai Bin Abduiaziz Al Saud and chef John Edwards of The Pyraudd Room at the Fair-mont Hotel, Dallas;
* Chef-owner Jean-Louis Gerine and Linda Gerine of Restaurant Jean-Louis, Greenwich, Conn;
* Hallmark Cards and chefs Michael Smith and Debbie Gold of The American Restaurant, Kansas City, Mo.;
* Mike Weinstock, Richard Shapiro and chef John Sola of The Grill, Beverly Hills, Calif.;
* and John Curtis, Marcel Desauhiiers and Andrew O’Conner, of The Trellis, Williamsburg, Va.
APRIL
April would witness the worst act of terrorism on U.S. soil in history.
Scores were killed and hundreds were injured when members of a suspected right-wing militia group bombed the Murrah Federal Building in Oklahoma City on April 19.
Concealed in a pickup truck that was parked on the street right outside the building, the bomb had more explosive power than that of the terrorist bombing at the World Trade Center in New York three years earlier.
The blast occurred on the first day of the scheduled Midwest Foodservice Convention and Exhibition. Organizers immediately canceled the show — which was expected to draw more than 15,000 attendees — and redirected their efforts to feeding and comforting the injured and the army of rescue workers who descended on the scene.
For 48 hours after the blast, operators, suppliers and distributors worked around the clock providing sandwiches, hot meals and drinks to rescuers and families of those trapped in the debris.
The role the foodservice industry played in the Oklahoma disaster made national headlines for weeks.
Meanwhile, stung by the big-budget discount counterattack of Wendy’s, Burger King, Hardee’s, McDonald’s and KFC, operators in the doubledrive-thru burger segment have — next to cafeteria operators — begun to look like the foodservice industry’s most economically besieged players.
Segment leaders like Rally’s, Central Park U.S.A., Checkers, even Taco Bell’s Hot ‘n Now, are slowing expansion plans as average unit volumes suffer. Fighting back, however, the segment is rolling out a new round of sandwiches and 99-cent price points to outflank their giant rivals.
Another segment of the sandwich business was under siege when the Center for Science in the Public Interest blistered the made-when-ordered sandwich category in a report that was reminiscent of its attacks on Italian cuisine, Tex-Mex fare, Chinese and seafood. “People tend to think of a sandwich as just a bite to eat,” said Jayne Hurley, a senior nutritionist for the CSPI. “But often sandwich shops are giving you an entire dinner’s worth of fat and calories between those two slices of bread.” Virtually, every sandwich the segment is known for, like tuna subs, chicken salad sandwiches, the BLT, even a vegetarian sandwich with avocado and cheese, met or exceeded recommended daily allowances for fat in one meal. But the turkey sandwich with mustard and the roast-beef sandwich with mustard won high marks as good choices.
The casual-theme dinner house segment, whose appreciation in stock prices and chain expansion had outpaced the rest of the industry, began to reveal the dark side of rapid growth. Operators said the shortage in hourly workers was beginning to spread to unit managers who are becoming scarce and expensive. Operators at a financial conference told of competitors luring general managers away with new cars, sign-in bonuses and lavish vacation plans. Recruiters even are violating a long-standing gentleman’s agreement not to recruit employees while they are working, others charged. But April saw a lot of positive trends develop, not the least of which was the end of the professional baseball strike.
The 234-day strike that knocked stadium concessionaires on their backs killed the World Series in 1994 and threatened to ruin business in 1995. The industry’s dependence on sports was n&t iost to operators in Atlanta, who have been struck with Olympic fever in preparation for the 1996 Summer Games, to begin in mid-July year. Out-of-town chains were swarming to the city, and aggressive hotel development was at an all-time-high.
More good news fell to contract feeders when portions of the federal welfare reform act proposed cutting school nutritional programs by as much as $3.6 billion over the next five years. Large contract feeders said the bill, if passed, would allow them to penetrate a segment of the market that is still dominated by independent operators.
April was a month when several of the industry’s biggest players overhauled their menus, entered new market segments, repositioned their concepts or shed ailing divisions.
None of those initiatives generated as much attention as Pizza Hut’s rollout of Stuffed Crust Pizza to all 8,600 domestic units. Pizza Hut’s new product was the first to feature pizza crust that had been stuffed with a mozzarella cheese ring, giving 50-percent more cheese than the traditional pie. The Pepsico subsidiary said the new product was needed to boost flat same-store sales.
While Pizza Hut was enjoying the attention of its new product, Wayne Calloway, chairman of PepsiCo, told a gathering of Wall Streeters in Scottsdale, Ariz., that in light of the conglomerate’s first-ever earnings dip, the company might refocus its resources on expansion through franchising. Up until now, Pepsico has preferred to own the lion’s share of its chains.
In another major change in menu position with wide-runging consequences, Boston Chicken Inc., parent company of Boston Market, entered into a loan and management agreement that will allow it to enter the gourmet bagel breakfast business. Under the terms of a $20 million loan agreement, Boston Chicken could end up with the majority ownership of Progressive Bagel Concepts, parent company of three different regional bagel chains. Boston Chicken said the loan to the bagel maker was for investment purposes even though chairman Scott Beck told a gathering of Wall Street analysts a year earlier that the company would enter the breakfast bagel business.
However, Boston Chicken suffered something of a setback in its expansion plans when the company that could have become its largest franchisee, CKE Restaurants Inc., the Anaheim, Calif.-based parent of Carl’s Jr., turned over its territory and 27 existing units to the franchisor.
Citing a need to redirect its assets to the long-ailing Carl’s Jr., CKE said it would transfer management to help Boston’ Chicken form a new company, Boston West LLC.
Chick-fil-A, Atlanta, rolled out a new menu product, Chick-n-Strips, a higher-fat version of its marinated, grilled tenderloin product. The company dropped its Grilled’n Lites as a result of poor sales. Grilled’n Lites was hailed by the CSPI as the “best chicken” product in fast food, at just 97 calories and little fat.
Apple South Applebee’s International’s largest franchisee, said it would convert its Gianni’s Little italy concept into a new casual-dining format called Tomato Rumba’s. Based in Madison, Ga., Apple South said the purpose behind the conversion of the 17-unit chain was to avoid potential trademark conflicts in two markets and to create a livelier dining atmosphere.
In Atlanta, Longhorn Steaks began a systemwide revamping of its decor and menu, while in New England, Papa Gino’s, the 205-unit pizza chain with a low profile, revealed that it just had completed a chain overhaul and menu upgrade.
Also enjoying positive samestore sales gains after the start of a massive chain renovation was ShowBiz Pizza Time Inc., parent company of the Chuck E. Cheese kiddie-oriented pizza chain. With 22 of its 327 restaurants remodeled, Showbiz said the newly renovated units enjoyed same-store sales gains of 12 percent.
Some old, familiar companies, changed their names in April.
The biggest name change, of course, was General Mills Restaurants switch to Darden Restaurants Inc. The change was a symbolic salute to the late Bill Darden, founder of Red Lobster. The name change came just two months after ex-parent General Mills split in two.
Gilbert/Robinson Restaurants, operator of the Houlihan’s and Darryl’s casual-dinner-house chains, changed its name to Houlihan’s Restaurant Group. “Once you go outside of Kansas City, nobody knows what the company means,” said Frederick Hipp, president and chief executive, explaining the change.
April would prove to be one of the year’s most active months for promotions, firings and new appointments in the executive suites of restaurant companies.
None generated more attention than C. Stephen Lynn’s appointment as chairman and chief executive at Shoney’s Inc. Lynn, who had been chairman, president and chief executive at Sonic Corp., was charged with revitalizing the onetime diversified restaurant company. Lynn became the fourth chief executive of Shoney’s since 1989 and the first who is not an insider. He replaced Taylor Henry Jr., who resigned in January as part of a reorganization plan.
Just weeks before the Lynn appointment, Paymond Danner, the controversial cofounder of Shoney’s and an ex-chairman and chief executive, wrote a letter to the board of directors. offering to return to the company to revive its fortunes for $1 a year and stock options. But Danner, who remains Shoney’s largest shareholder with 10.5 percent of the company’s stock, rescinded the offer, claiming the company took too long to make a decision.
Another Shoney’s executive who made the news was Michael G. Richmond, formerly operations vice president, who was named president and chief executive at PoFolks Restaurants, Mt. Sterling, Ky.
Meanwhile, Sonic replaced Lynn with Clifford Hudson as chief executive and Dean Werries as chairman. Both men were longtime Sonic veterans.
In Orange, Calif., Walter Strycker, chairman of Marie Callender Pie Shops inc., resigned and was succeeded by Leonard Dryer, president and chief executive of the 143-unit chain.
Churchs Chicken veteran Stephen Clark was tapped to be president and chief operating officer at Taco Cabana.
Michael P. O’Donner, who for five years was president, chairman and chief executive of Ground Round Restaurants Inc., Boston, resigned. He was replaced by Daniel R. Scoggins, a former president and chief executive of TGI Friday’s, as an interim chairman.
Quantum Restaurant Group, New Hyde Park, N.Y., named Thomas Walters president of its Morton’s of Chicago subsidiary. He replaced Michael Archer, who resigned to “pursue a better opportunity” after more than a decade with the company.
MAY
May easily could have been a month best remembered for the return of basketball wizard Michael Jordan to the Chicago Burs. His return would spark a 30-percent increase in sales at Michael Jordan’s Restaurant in Chicago. However, the comeback of the man who walks on air was overshadowed in the world of foodservice by the departure of one of the industry’s most admired men.
Jerome J. “Jerry” Richardson resigned in May as chairman of Flagstar Cos. Inc. A onetime pro football player who rose from a single Hardee’s franchise to turn Flagstar into a $3.7 billion concern, Richardson left to devote full attention to the start-up of his Carolina Panthers National Football League franchise. James B. Adamson, president and CEO, was subsequently elected by the board to succeed Richardson.
Just weeks after Richardson’s resignation, Flagstar’s 6-month-old effort to sell its TW Recreational Services division to Aramark collapsed. The two giant contract feeders could not agree on a fair price for the subsidiary, whose accounts are mainly national parks.
Richardson’s departure would be just one of several high-profile exits that would make June an active month for executive suite changes.
In another major executive-suite change it a billion-dollar company, Carlson Cos. lost president Juergen Bartels to the Westin Hotels chain, Seattle. Bartels was credited with developing Carlson’s hotel presence from regional to worldwide.
Management disagreements between himself and Taco Bell led to the resignation of Mike Hislop, chairman and chief executive of Chevys Mexican Restaurants for the past four years. Taco Bell bought 62 percent of the Tex-Mex dinner-house in 1992.
Hislop immediately was named chairman and chief executive of II Fornaio America Corp., also of San Francisco, an Italian dinner-house concept.
In another resignation born of displeasure in results and management direction, Martin J. Culver, co-founder, president and chief executive of Fresh Choice, Santa Clara, Calif., resigned and severed all professional ties with the soup-pasta-salad buffet chain. Culver’s decision to leave came following the company’s first money-losing quarter and amid the revelation that investor Richard Raintree of Texas had acquired 9 percent of the company.
Nation’s Restaurant News named Dave Thomas, founder and advertising pitchman for Wendy’s, the MUFSO Pioneer of the Year. An early partner of Colonel Harland Sanders, in the founding of Kentucky Fried Chicken, Thomas helped redefine fast food.
In New York, The James Beard Awards bestowed its annual honors on a select group of operators. Drew Nieporent, co-owner of the Myriad Restaurant Group, in Manhattan, won four major awards. Owner of Montrachet, TriBeCa Grill and Rubicon in San Francisco and Nobu in New York, Nieporent and company won best wine service, best new chef, best new restaurant and outstanding service.
Rick Bayless, chef-owner of Frontera Grill fame in Chicago, was named Farberware Millennium Chef of the Year.
Le Cirque, acclaimed French fine-dining restaurant in Manhattan, was named Perrier Outstanding Restaurant.
Lone Star Steakhouse, the Wichita. Kan.-based dinner-house chain, revealed plans to move upscale. The company disclosed its intention to create an upscale, fine-dining steakhouse concept and said that the $75 million it raised in a secondary offering three weeks earlier would be used to either buy a concept or create one.
Just one week after announcing the project, Lone Star would tap Michael J. Archer, president of Morton’s of Chicago, to develop its fine-dining steak-house concept.
Lone Star’s confidence and seduction of Wall Street as a company that can do no wrong is in sharp contrast to Brinker International, which, for the first time in the company’s history, is beginning to show some troubling signs of overextension. A string of flat-to-negative unit sales reports resulted in a 60-percent decline in the company’s stock price, from a 52-week high of $28.50 to a low of S 17. For a few weeks in 1995, the stock would dip as low as $14.75.
Looking to provide more support for its growing international division, Pizza Hut moved its headquarters from Wichita, Kan., to Addison, Texas, a suburb of Dallas. The company had been based in Wichita since its founding in 1958. The move will cause the layoff of 105 workers. Marriott Family Restaurants broadened its market presence through a contract with Miami Subs to franchise the concept at two of Marriott’s eight Florida Turnpike outlets. Another dual-branding test saw Long John Silver’s team up with Carl’s Jr. in a three-unit test in Alpine, Calif.
Looking to increase its revenue streams, Rally’s teamed up with the Green Burrito in a dual-branding test. Three retrofitted Rally’s units in Los Angeles, Phoenix and Louisville were the first to blend the concepts. Just weeks later the test would end, however, because of the management of each company’s inability to sign off on a development deal.
In the dinner-house segment, Boston Restaurant Associates launched Pokari’s North End as a home-style Italian concept to cater to time-starved consumers in Boston.
Metromedia Restaurant Group, thrilled at the results of its new Rising Star Grill launch, said it plans to convert some of its long-ailing Bonanza Restaurants to the new concept.
Kenny Rogers Roasters rolled out catering systemwide. The new program was aimed at groups of 25 or more people and had fed as many as 3,000 by the time the company formalized the new market assault. Kenny Rogers also would attempt to grab a new market niche and stimulate sales later in the month with the rollouts of an expanded char-grilled chicken line featuring fresh-prepared side dishes.
Not to be outdone, quickserve, home-cooking specialist Grandy’s began testing a new prototype to compete in the quick-comfort war zone. At the same time the 165-unit company filled the vacant post of president and chief operating officer with George Miller, who had headed Shakey’s Pizza since 1993.
Two major contract feeders changed owners in May.
In the biggest deal Onex Corp., a diversified Canadian foodservice conglomerate based in Toronto, bought debt-laden Caterair International Corp. for $500 million. The acquisition will triple Onex’s in-flight feeding revenues.
Compass Group PLC, a London-based foodservice conglomerate, bought the Mamaroneck, N.Y.-based Flik International for $16 million.
Long-ailing Furr’s/Bishop’s Inc., struggling to stave off bankruptcy for years, was forced to sell nearly the entire company to its creditors. The 126-unit cafeteria operator developed a plan to give 97.5 percent of the company to its creditors by issuing a new class of stock.
Denny’s two largest franchisees. American Family Restaurants Inc. and Denwest Restaurant Corp., merged and formed a new company called DenAmerica Corp. The new company will be based in Scottsdale, Ariz. Good Times Restaurants Inc., Westminster, Colo., operator of a double-drive-thru burger chain of the same name, sold its 15-unit Round the Corner Restaurants subsidiary to division management for $425,000. Good Times said Round the Corner had become a distraction in its resolve to expand the core concept.
In Atlanta, The Buckhead Life Restaurant Group jumped into the luxury end of the Southwestern cuisine niche with a new concept, Nava. The 120-seat restaurant cost more than $2 million to build and occupies a site that had been home to the short-lived Resto des Amis.
Nearly a year and a half after two Princeton economists released a study on fastfood hiring patterns that found increases in the minimum wage do not cause unemployment — a refutation of a widely held industry belief — The Employment Policies Institute released a study to discredit the findings. The EPI, a research and lobbyist group whose findings enjoy strong industry support, said the economists relied on shoddy research practices and therefore reached an erroneous conclusion. Nevertheless, the economists stuck to their findings, which have since become the centerpiece of the Clinton Administration’s efforts to raise the minimum wage.
Although Congress has been focused on larger economic objectives by midyear, the National Restaurant Association endorsed a new bill that would make health insurance portable from job to job. The bill would stop insurance companies from denying coverage to workers with pre-existing conditions or illnesses.
Independent operators from small towns and suburbs attending the NRA’s show in Chicago said national chain penetration in their markets had forced them to change the way they do business if they are to survive. Many independent operators in the casual-theme segment said they are spending more on community advertising and doing every operational and marketing step the large chains don’t do, such as taking reservations.
JUNE
Some of the biggest corporate names in foodservice attempted to reinvent their version of the wheel in June. Little Caesars started home delivery; Brinker International tinkered with a quick-comfort, home-meal replacement concept; Darden Restaurants explored a Caribbean-themed concept; and Lettuce Entertain You entered the gourmet supermarket business.
But before all of those market changes took place, June turned out to be a month when restaurant companies were busy buying and selling one another or getting rid of underperforming divisions.
Some of the deals had international repercussions like Rank Leisure USA’s decision to sell its high-grossing dinner-theater restaurants in order to concentrate on its 34-unit Hard Rock International division. Among the units on the block were King Henry’s Feast and Wild Bill’s Wild West Extravaganza.
In another deal with international implications, Yogen Fruz World-Wide Inc., Ontario, Canada, agreed to buy the 413-unit Bresler’s Ice Cream & Yogurt Shops for an undisclosed sum. Yogen Fruz already controls 80 percent of the Canadian frozen-yogurt foodservice market with 170 outlets. In all it has 250 units in 30 countries.
Closer to home, Clucker’s Wood Roasted Chicken Inc., North Miami, Fla. — an area developer of Kenny Rogers Roasters — agreed to pay $6.7 million in cash and notes to acquire the 50-unit Paradise Bakery Inc., a chain of mall-based kiosks and cafe-bakeries launched by Chart House Enterprises. Chart House said the deal fulfills its plan to narrow its focus on its core brand and Islands, a gourmet burger concept.
In a rumor that was hotly disputed by PepsiCo Inc., the diversified restaurant, snack foods and soft-drink producer, told a gathering of Wall Street analysts that the company is not contemplating the sale of Taco Bell, KFC or Pizza Hut. Roger Enrico, vice chairman, said the company would accelerate its dual-branding alliance between KFC and Taco Bell domestically and internationally. After the company reported its first decline in annual earnings and, later, a disappointing first quarter, there was some speculation it would sell its 19,451-unit restaurant division, particularly after chairman Wayne Calloway told reporters earlier in the year that the company may begin to franchise more and decrease the number of company stores.
Borrowing a page from PepsiCo’s playbook on merging corporate siblings, TGI Friday’s and sibling Country Inns — both owned by Carlson Hospitality Worldwide — disclosed plans to build tandem restaurant and hotel outlets. TGI Friday’s would use the units is a springboard to enter the home delivery, business and provide room service.
A company controlled by ex-Chrysler chairman Lee Iacocca completed a $10 million private placement in Koo Koo Roo, the Los Angeles-based skinless, flame-broiled and rotisserie chicken chain.
Lettuce Entertain You Enterprises, Chicago, teamed up with Fresh Fields Markets, Rockville, Md., to launch a “healthy foods” supermarket chain. The stores will feature a number of prepared foods developed by Lettuce chefs and some whimsical touches reminiscent of LEYE’s restaurants.
Jerome J. Jerry Richardson, right, resigned as chairman of Flagstar Cos. Inc. to concentrate on his Carolina Panthers National Football League franchise. James B. Adamson, left, president and CEO, was elected by the board to succeed Richardson.
RELATED ARTICLE: THE WILD SIDE
The unkindest cut of all:
Earlier this year, vandals stole the 300-pound, 6-foot Big Boy statue from a Toledo, Ohio, Big Boy restaurant, dismembered the burger-bearing kid and dropped the pieces off around town. The fiberglass statue with the black pompadour, red-and-white checkered pants and suspenders had ushered customers through the doors of Big Boy restaurants across the World since the 1930s.
Big Boy was chopped into seven pieces. His hamburger was intact, but his right ear and part of his belly were missing. A note, which read “Big Boy is Dead,” was attached to all but one of the severed limbs. A note on the other limb said: “Big Boy is almost dead. Never mind. Now he’s dead. “
Each note was signed “Pimps of pimplyness.” The statue was worth about $4,000.
Sgt. Richard Murphy called it “a sad, sad day for the city.”
feature a number of prepared foods developed by lettuce chefs and some whimsical touches reminiscent of LEYE’s restaurants.
In an interesting acquisition, the 63-unit Longhorn Steaks bought two-unit Lone Star Steaks Inc., Atlanta, for S3.25 million in stock and cash. Just two months earlier Lone Star Steaks of Atlanta had won a U.S. District Court ruling that it owns the sole rights to the “Lone Star” name in Georgia, blocking Lone Star Steakhouse of Wichita, Kan., from using the name in the state. The Wichita company, appealed. Longhorn Steaks would not discuss its plans for the new concept.
Two years after buying Joe’s Crib Shack for possible conversion, Landry’s Seafood Restaurants, Houston, said it would expand the three-unit chain as a secondary-growth vehicle but a lower price point than th parent concepts.
In a major acquisition involving independent operators, Warner LeRoy, owner of Tavern On The Green in Manhattan’s Central Park — one of the single highest-grossing restaurants in the country — bought The Russian Tea Room for an undisclosed sum. Leroy said he intends to invest another 1 0 million in the building in a massive renovation that will add at least two floors.
Perhaps the most significant shift in strategy during the month of June was Little Caesars’ decision to enter the home-delivery business. The former takeout-or-eat-in-only chain said 95 percent of its 4,700 domestic units would be geared up for home delivery before the end of the year. The company said it would hire another 40,000 people as crew people and drivers to execute the plan.
Following the words of Horace Greeley a century earlier, several prestigious New York City restaurants headed west and invaded Las Vegas with replicas of their Manhattan dining palaces. Among those migrating or exploring the market are Le Cirque, The `21′ Club, Lutece — which a year ago had become Ark Restaurant’s crown jewel — and chef-owner Charlie Palmer of Aureole fame.
But another tourist-oriented town is beginning to lose its luster. Over development and saturation is making Branson, Mo., the new country-western music Mecca that nurtured a booming foodservice segment, a battlefield for operators. “Branson is overbuilt,” complained Keith Dunn, president of McGuffey’s restaurants. “Everybody jumped on the bandwagon. Now the bandwagon is overloaded.”
Perhaps the biggest executive change in the month was the resignation of Clyde Culp, president and chief executive of Long John Silver’s. He had been with the company since 1989.
Dennis McCart, previously vice president of marketing and new products for Shakey’s, a division of Inno-Pacific Holdings Ltd., was named president of that pizza chain.
Legal contests were few in June, but in one of the quirkiest plot twists, CKE Restaurants and GB Foods dropped their lawsuits against one another and agreed to resume their previously announced plans to pair their respective burger and Mexican concepts in 140 Carl’s jr. locations. The two began fighting earlier this year when CKE broke off the deal and decided to create its own proprietary Mexican concept.
Though they did not go to court, ShowBiz Pizza Time’s executives squared off against a dissident investor group that demanded a seat on the board of directors. Although ShowBiz had been enjoying a resurgence in sales after renovating most of the chain, a dissident investment group led by financier and leveraged buyout specialist Bennett S. Lebow had acquired a 6.4-percent stake in the company and demanded a change in direction. For its part ShowBiz charged that Lebow has a track record of saddling a company with debt and bleeding off profits.
In political news the possibility of restoring 100-percent meal tax deductibility and expanding the rights of franchisees were discussed when restaurant operators attended the white House Conference on Small Business.
And Share Our Strength, the national network of restaurateurs whose American Express-sponsored Taste Of The Nation raises money for homeless relief charities, broke all previous records with contributions in excess of $4.5 million.
JULY
In one of the biggest corporate defections of the year. Ronald N. Magruder, the man responsible for building The Olive Garden from an eight-unit concept to the nation’s largest Italian dinner-house chain, resigned as president and chief operating officer of Darden Restaurants to take those same titles at Cracker Barrel Old country Stores.
Magruder, who had been with The Olive Garden for 23 years, left six months after parent company General Mills Restaurants changed its name to Darden Restaurants and was spun off by General Mills. Magruder, who also was vice chairman of Darden, was succeeded as president and chief operating officer by GM veteran Jeffrey O’Hara.
Burger King shook up its senior management ranks when it named Robert C. Lowes, a financial executive and longtime company insider, president. He replaced James Adamson, who had left the company six months earlier to become chief of Flagstar Cos. in Spartanburg, N.C.
In other leadership changes, Scott Bergren, Senior vice president and general manager for Pizza Hut international’s North Latin America Region, was named president of Chevys Mexican Restaurant.
Former TGI Friday’s president Daniel R. Scoggin, interim president and chief executive of Ground Round Restaurant, was tapped by the Braintree, Mass.-based company to hold those posts permanently.
House of Blues founder and chairman Isaac Tigrett hired Richard Cervera as co-chief executive and president to help expand the three-unit specialty themer. Cervera, who would wind up keeping the job for only five months, said at the time that he would continue as chairman of Taco Cabana, but he quit that post in August. A small group of Domino’s Pizza franchisees and the chain’s franchisee association filed a class-action lawsuit against the third-largest pizza system, accusing it of violating federal anti-trust laws. At issue was the franchisees’ contention that they are forced to buy food, packaging and dough from Domino’s at high markups.
In another franchising flareup, a group of Schlotzsky’s franchisees sued Schlotzsky Inc., parent company of the 403-unit chain, for encroachment on protected areas, misappropriation of advertising payments and wrongful support of substandard restaurants.
Burger King agreed to pay $4 million to a franchisee to end a precedent-setting federal lawsuit that defined limits on franchisors’ rights to expand near branches of their own chain. Steven A. Scheck, a Massachusetts franchisee, received $2.6 million in cash and $1.36 million for three restaurants he is selling back to the company. Driven into bankruptcy after a competing BK opened two miles from his turnpike unit, Scheck sued BK in 1989 and later was permitted to add a fraud charge.
Just one week before cofounder and chairman Murray Riese died, The Riese Organization won a long-simmering disenfranchisment lawsuit filed by TGI Friday’s. A federal appeals court threw out a lower court ruling that would have terminated Riese’s contracts with Friday’s, finding that the franchisor failed to present enough evidence to support the claim that it was hurt when Riese co-mingled other restaurant brands with Friday’s in advertisements. Friday’s said it would appeal.
Management at Showbiz Pizza Time suffered a legal setback when a dissident group of investors won a seat on the board of directors following a shareholder vote. Michael H. Magusiak, president of Showbiz, lost his seat to Joshua S. Friedman, representative of a dissident group that owns 6.4 percent of the company. Richard M. Frank, chairman and chief executive, said the company would contest the results.
Among those companies entering new fields was Taco Bell, which rolled out the upscale, full-service Chimayo Grill in Newport Beach, Calif.
Brinker International acquired the Maggiano’s Little Italy and The Corner Bakery concepts, both from Lettuce Entertain You Enterprises in Chicago.
Brinker agreed to buy the three Maggiano’s and five Corner Bakery units for 4 million Brinker shares, worth about $73 million. Terms of the deal call for Lettuce to collaborate with Brinker on the creation of at least one new concept and figure out ways to improve Brinker’s existing units.
In a continuation of its dual-branding assault, Arby’s Inc. bought 12.5 percent of the Dallas-based Zuzu Inc. The deal also called on Arby’s to buy 50 percent of the 40-unit company’s stock over the next five years.
Not to be outdone, Arby’s largest franchisee, RTM Inc., Nashville, Tenn., said it would acquire the 275-unit Lee’s Famous Recipe chicken chain from Shoney’s Inc. No purchase price was disclosed. Under the terms of the deal, RTM will take over 60 company outlets and become the chain’s franchisor.
Meanwhile. Arby’s said it would expand its Arby’s Roast Town concept to another nine outlets. Arby’s Roast Town competes in the homemeal-replacement category.
Chicago-based Northbrook Corp.’s Amfac Parks subsidiary bought Flagstar Cos.’s TW Recreational Services for $110 million. TW Recreational Services, which specializes in national park accounts, had been on the block for several months.
Compass Group PLC, London, purchased the contract foodservice division of Accor SA, a French hospitality concern, for 941 million, to create the world’s largest catering firm.
House of Blues obtained a major partner when The Walt Disney Co. said it would open a 1,500-seat version of the entertainment restaurant at its Pleasure island and Disney Village Marketplace at Lake Buena Vista, Fla., in 1997. Disney said it also would add a Wolfgang Puck Cafe and a 1,500-seat outlet of Gloria Estefan’s Miami Beach restaurant-theater.
Daka International’s subsidiary, Fuddruckers, secured a nontraditional partner when it inked a deal with the Home Depot to open the gourmet burger concept in 10 locations.
In what would turn out to be one of several bankruptcies filed by major foodservice players, Wyatt Cafeterias Inc. sought Chapter 11 protection. The company, which had 90 restaurants just two years earlier, had 43 outlets at the time of its filing.
AUGUST
The home-meal-replacement, quick-comfort niche began to implode in August as several major chains scuttled plans to compete in the segment. Forced to retreat by higher food costs, higher investment costs and the operational complexities of handling fresh chicken were at least three major fast-food chains, among them McDonald’s.
The burger behemoth pulled the plug on its Hearth Express home-meal replacement contender, saying that it would close the Darien, Ill., test outlet in September. McDonald’s was not alone. Hardee’s abandoned its Roy’s Double R Grill test in Baltimore, and KFC said it would stop building Colonel’s Kitchen pending further evaluation. Of the four quick-serve chains to test the new niche, only Arby’s, with its Arby’s Roast Town, remained committed to the segment.
Meanwhile, Arby’s, in a continuing exploration of dual branding, bought P.T. Noodles, a Fort Lauderdale, Fla.-based pasta concept that did not have a single operating unit. Terms of the deal were not disclosed. Arby’s said its plan is to offer P.T. Noodles-brand pasta in two corporate Arby’s units immediately and, later, to launch a phased rollout. P.T. Noodles was conceived by Perspectives/ The Consulting Group, Los Angeles.
McDonald’s bounced back from its retreat in the quick-comfort niche possibly to go far afield of anything it attempted in the past. Sources said the company was developing its own convenience store concept to complement its growing dual-branding alliances with oil companies. Although a company spokeswoman denied any knowledge of the project, sources close to the test said the new concept would be called McStop.
Worried that recent sales results reflected a concept that had become “dark, dank and dated,” the diversified restaurant company Metromedia Restaurant Group Inc. said it was overhauling its flagship chain, Steak and Ale. The company said it was updating the menu and changing the decor of the restaurant to look more like a French chalet, rather than a “club room for bankers.”
Metromedia said it also was updating the looks and menus at its other three divisions, Bennigan’s, Bonanza and Ponderosa,
Pizza Hut’s 3-month-old rollout of Stuffed Crust Pizza paid off handsomely for the company. In its second-quarter results, the Pepsi Co subsidiary, reported a 22-percent rise in revenues, a 68-percent rise in operating profits and a 14-percent increase in same-store sales, all attributable to the new pizza product.
In keeping with a strategy to develop more tightly focused operations, Host Marriott said it was splitting its hotel real-estate and concessions businesses into two independent divisions. A Morrison’s Family Dining Group cafeteria in Marietta, Ga., opened the company’s first drive-thru window. The outlet features a selection of five entrees daily in addition to sandwiches and salads.
Burger King rolled a new menu item, ‘stealth fries.” Unlike normal fries, stealth fries are coated with a proprietary substance that allows the products to hold more heat and have more crunchiness.
In an acquisition that affords Wendy’s International a boost into dual-branding and the breakfast daypart, the Dublin, Ohio-based burger giant bought Tim Hortons, a Canadian-based doughnut-shop chain, in a stock-forequity deal valued at more than $400 million. The market share held by 24-hour, 1,000-unit Tim Hortons is second only to that of McDonald’s in Canada.
Sbarro, the Commack, N.Y.-based Italian cafeteria chain, said it was exploring a dual-branding alliance with a Hardee’s franchisee, Northcentral Food Systems. Sbarro, primarily a mall operator, said its tandem-brand prototype would open next year in Longmont, Colo.
Shoney’s, which had its Pargo’s and Fifth Quarter dinner-house divisions on the selling block, said it would keep both. The company said it would combine the two chains with its Barb Wire’s Steakhouse operations to create a new division, Casual Dining.
Monterey Pasta, the Danville, Calif.-based pasta chain, said it would close or sell at least 20 restaurants in Southern California and Texas as part of a “major restructuring.”
Debt-strapped Family Restaurants Inc. said it was considering selling off operations and divisions. The company retained a financial adviser to help its performance, especially in the long-struggling, 200-unit Chi-chi’s.
Bertucci’s Inc. was hit with a $10.4 million wrongful-death suit, filed by the estate of a woman who died from an apparent allergic reaction after eating at one of the chain’s restaurants. The plaintiffs alleged that she was assured erroneously that Bertucci’s pesto sauce contained no nuts. The lawsuit contends that the chain withheld from servers a list of ingredients in the secret sauce.”
A group of Little Caesars franchisees suing the franchisor for anti-trust violations was dealt a setback when a federal district judge refused to grant the group class-action status.
In Plano, Texas, a group of restaurateurs led by Shoney’s franchisee Paul Brown sued the city for passing the state’s toughest anti-smoking ban. After reviewing the case, a judge ordered both sides to mediation. A subsequent settlement now exempts restaurants with 75 or fewer seats and requires those with more than 5 seats to provide separate smoking sections.
SEPTEMBER
September unfolded with the news that Darden Restaurants Inc. was extinguishing its 5-year-old China Coast concept. After opening 51 branches, Darden decided to close the restaurants and convert at least half into Red Lobster and Olive Garden units. Darden chairman Joe Lee said China Coast persistently was in the red and suffered chronically soft sales. Darden said it would take a $45 million charge against earnings to dispose of the division. At least half of China Coast’s 3,000 employees were promised jobs at Red Lobster or The Olive Garden.
In a long-awaited deal, Shoney’s Inc. bought its largest franchisee – TPI Enterprises Inc. of West Palm Beach, Fla. – in a stock swap valued at $65 million. Speculation had centered on a possible merger of the two for nearly four years.
In a similar but much smaller deal, Hardee’s purchased Hardee’s Enterprises, a 3 1 -unit franchise in Bloomington, 111. Terms of the deal were not disclosed. Hardee’s Enterprises had been the chain’s largest franchisee in Illinois and had been entertaining bids from Boston Chicken and Burger King.
Orient-express Hotels Inc., a London-based division of Sea Containers Ltd., bought the legendary 21′ Club for an undisclosed sum. The buyers and the sellers stressed that there would be tittle change in the operation of the dining landmark.
Two private investors acquired Houston-based Kettle Restaurants and took the 119-unit, financially troubled family chain private. The deal retired more than 15 million in debts, but 25 Kettle units immediately were sold to Denwest Restaurant Corp. of Scottsdale, Ariz., one of Denny’s largest franchisees. Kettle’s new owners changed the company’s name to Kettle Country Kitchen.
Revealing more about its strategy to develop an upscale steakhouse, Lone Star Steakhouse Saloon bought Del Frisco’s Double Eagle Steak House, operator of a single high-end restaurant in Dallas and the licensor of two others in Houston and Orlando, Fla.
In 1995’s second bankruptcy of a major chain, the 17-unit Italian dinner-house chain Sfuzzi sought protection from its creditors with a Chapter I 1 petition. The Dallas-based company said declining sales, escalating rents and troubled operations precipitated its filing.
Franchisee frictions were few in September, but what may prove to be the biggest was a lawsuit against Domino’s Pizza by a group of franchisees who alleged that the company has violated antitrust laws by overcharging for dough and other supplies. Little Caesars franchisees made similar accusations against that chain in August.
Carvel’s franchisees sued the company, arguing that its distribution of ice-cream cakes through supermarkets was ruining their businesses. At least 52 Carvel franchisees are plaintiffs in the case.
In a well-publicized law-enforcement move, the U.S. Department of justice took over the country’s largest restaurant and hotel union in an attempt to weed out longtime mob connections. The justice Department said it would supervise Hotel Employees and
Restaurant Employees International under a court-appointed monitor. The union represents nearly 300,000 workers in the Northeast.
The marketing potential of the Internet, the computer-accessed communications and information universe, were tapped by scores of operators and suppliers who began creating home pages and web sites on the World Wide Web, a segment of the Internet. McDonald’s, Taco Bell, Pizza Hut and Papa John’s are some of the companies marketing themselves on the Information Highway.
In other marketing advances in September, WSMP Inc., the Claremont, N.C.-franchisor of Western Steer, Prime Sirloin and Bennett’s Smokehouse, launched a dualbrand test with Green Burrito.
Domino’s Pizza, for the first time in the chain’s history, began testing drive-up units.
OCTOBER
The weather, which had been reasonably placid through most of the year, turned vicious for operators in the South, especially those on the Gulf Coast, when Hurricane Opal caused $1.8 billion in damages.
But a storm of another sort had far wider economic repercussions. Fine-dining operators attending the DiRoNA Awards presentations at the Distinguished Restaurants of North America convention in Charleston, S.C., said the labor crunch was the most pressing issue confronting their segment.
At the annual Multi-unit Foodservice Operators conference in Atlanta, chain officials were equally distressed about the dwindling labor pool. Operators attending the 36th annual MUFSO conference exhorted peers to view employee training and retention methods not as finite programs but as unending processes.
In a year that so far had been marked by major corporate makeovers, Morrison Restaurants Inc. split into three separate companies. The move was intended to permit the company’s thriving casual-theme division to distance itself from the lagging performance of its family-dining and healthcare siblings. Morrison orchestrated the disunion by spinning off those two divisions to shareholders through a series of stock exchanges, thereby creating a trio of independent, publicly traded companies: Ruby Tuesday Inc., Morrison Fresh Cooking Inc. and Morrison Health Care inc.
Looking to diversify its growing casual-theme portfolio, Daka International, the Danvers, Mass., contract feeder and restaurant chain operator, bought 15-unit Champps
Americana, a sports-themed restaurant-and-bar concept based in Wazata, Minn., in a $69 million exchange of stock.
October would turn out to be one of the most active months of the year for new and/or accelerated dual-branding alliances.
In one of the largest, McDonald’s Corp. teamed up with Amoco Corp. of Chicago to develop co-branded locations throughout the Midwest and Northeast and the Mid-Atlantic, North Central and Southeastern states. The deal came just two months after the burger giant signed a similar deal with Chevron Corp. of San Francisco.
KFC Corp. said the 115 corporate and franchised units that had so far added sibling brand Taco Bell were enjoying up to 100-percent sales gains over preconversion levels.
Borrowing a page from PepsiCo’s playbook, Carlson Hospitality Worldwide’s top executives said they would launch triple-branded complexes that would fuse its Country Inn Suites, Italianni’s and Country Kitchen concepts under one roof
Orange, Calif.-based Del Taco Inc., which earlier declared its intention to become a more significant player in the Mexican fast-food arena, teamed up with Mrs. Winner’s Chicken and Biscuits, an arm of RTM Inc., in a dual-brand launch at 14 converted Mrs. Winner’s units in metropolitan Atlanta.
Krystal Co., the Chattanooga, Tenn.-based burger chain of more than 370 units, said it was negotiating for dual-branding tests with such brands as Long John Silver’s, Lee’s Famous Recipe Chicken and Captain D’s.
Flagstar’s grilled-chicken chain, El Pollo Loco, forged a a duabl-branding alliance with Foster Freeze, a 50-year-old fast-food chain featuring soft serve dessert items.
McDonald’s increased the duties of two senior officers in a bid to improve unit-level operations. Those promoted were executive vice-president Patrick Flynn, who will oversee franchising, purchasing, human resources, development and information services, and senior vice president Robert Doran, who will run the company’s domestic regions and zones. Both men will report to president and chief executive Ed Rensi.
Dave Thomas, the founder of Wendy’s, was named Pioneer of the Year at the MUFSO Conference. Ted Fowler Jr., chief executive of Golden Corral was named Operator of the Year.
Brinker international said it was closing as many as 40 restaurants. The disclosure came on the heels of the company’s first quarter financial statement, which reported a 16-percent decline in earnings.
And Brinker was not the only company whose glow was dimming.
Taco Bell’s attempt to drive sales with a new line of low-fat entrees called Border Lights did not boost sales as hoped. An internal PepsiCo Inc. report showed that despite the Border Lights rollout in February, same-store sales continued to deteriorate through October, down 4 percent by the time the third quarter ended. Meanwhile, siblings Pizza Hut and KFC enjoyed a surge in sales and profitability, a flip-flop from the years when Taco-Bell led the brood.
With the firing of Family Restaurants Inc. top executive a month earlier, the new leadership at the struggling company moved the Chi-Chi’s division from Irvine, Calif., to Louisville, Ky. But the move did not quell rumors that bankruptcy was imminent.
Chi-Chi’s and Brinker International were not the only companies facing diminished prospects in October.
High-cost leases forced th PoFolks Inc. family dining chain to seek Chapter 11 bankruptcy protection from its creditors. Robert C. Orvington, chairman and chief executive, said, “You can write the same story about this company as you can about all the others that go into Chapter 11: It’s to get rid of all those dam old leases.”
Going head-to-head with one another in an increasing number of markets, Boston Market and Kenny Rogers Roasters simultaneously added a series of new sandwiches to their menus to bolster lunch business.
Remaining on course with its commitment to the home-meal replacement category, Arby’s Inc. said it would open 100 to 150 Roast Town units over the next year, pairing many of them with one of its two new dual brands, Zuzu and P.T. Noodles.
A race-car-themed restaurant sped out of the blocks when the Nascar Cafe debuted in Myrtle Beach, S.C. In a long-term licensing deal with Connor Concepts Inc., Nascar opened in an 18,000-square-foot prototype site. Ten more are planned.
NOVEMBER
November brought concerns about the mandatory payment of royalties on background music, the looming scarcity of some finfish and shellfish varieties, and fears that the spread of gambling will continue to siphon dollars from foodservice venues.
Thousands of small operators, frustrated by the arcane and — most would argue — unfair licensing fees they must pay to play music in their restaurants, saw a glimmer of hope when music licensors and one industry association proposed a compromise bill to rewrite the U.S. Copyright Act.
Under the measure, restaurants and bars with total gross leasable space of less than 3,500 square feet would not be subject to royalties for copyrighted background music from radios and television. Larger restaurants would be spared licensing fees if they operate no more than three televisions with 55-inch or smaller screens or if they use a radio receiver powering no more than four speakers in any one room.
In another industry wide imbroglio, seafood operators said they were bracing for an anticipated fish and shellfish shortage and escalating prices. The House of Representatives voted to reauthorize and strengthen the expired Magnuson Fishery Conservation and Management Act, a measure intended to prevent overfishing of both popular and unwanted species and to strengthen marine habitats.
“United” was not the adjective one used to describe the industry in November, as an increasing number of states considered the legalization of gambling. Worried by stories that gaming drained sales from restaurants, many operators were endorsing legislative proposals to block casino developments in their areas. But other operators argued that gaming would only enhance their businesses.
A resurgent Burer King made several executive changes rekindling speculation that the second-largest burger system my soon be put on the trading block by, London-based Grand Metropolitan PLC.
David Nash, chairman and chief executive of Grand Met’s Food Sector and the officer directly responsible for BK’s performance, stepped down, and his entire department was eliminated. His departure came in the midst of a major turnaround for Burger King. the company had been posting its best numbers in years, chalking up a 6.6-percent same-store sales gain at midyear. But the company insisted the division was not for sale.
To buttress that argument and renew its commitment to BK, Grand Met named as chairman Robert Lowes, who had been chief executive of the division. His new position gives him direct access to the company’s executive committee.
In another executive promotion with international ramifications, PepsiCo reassigned James O’Neal, its European snack foods chief, to the newly created position of chairman and chief executive of Dallas-based PepsiCo Restaurants International. He will be responsible for some 6,000 KFC, Taco Bell and Pizza Hut units outside the United States.
John Alderson, ex-president of the Steak and Ale restaurants, who resigned in September after a year on the job, was named president of casual-dining operations 21t Shoney’s Inc., which includes Pargo’s, Fifth Quarter and BarbWire.
Los Angeles-based Sizzler International hired Tim Ryan, a prominent marketing executive and former senior executive of Red Lobster, The Olive Garden and Taco Bell, to be president of its long-struggling Sizzler U.S.A. division.
Jack Goodall, chairman. chief executive and president of Foodmaker Inc., the San Diego-based parent of Jack in the Box, said he would relinquish his chief executive and president titles but remain chairman.
Richard Cervera, president and co-chief executive of House of Blues, vacated that post in Los Angeles after just five months on the job. The company said the parting was mutual, stressing there was no friction between Cervera and HOB chairman and founder Isaac Tigrett.
In the highest-profile regulatory squabble of the year, Atlanta-based Hooters of America Inc. said it would ignore an Equal Employment Opportunity Commission order to begin hiring male servers and to set up a $22 million “victim fund” to compensate males previously barred from such employment by the chain. Beyond rebuffing the order, Hooters launched a satirical public-relations campaign blasting the EEOC’s order.
Pizza Hut joined its two pizza-segment rivals, Little Caesars and Domino’s, in court as a defendant but for an entirely different reason. While Little Caesars and Domino’s defended themselves against franchisees who filed separate anti-trust suits, Pizza Hut was battling charges that the Pepsi Co-owned chain ripped off a Brooklyn family’s patented stuffed-crust brainchild. Angel Mongielo’s Children LLC claimed that Pizza Hut’s hot-selling Stuffed-Crust Pizza infringes on the family’s 1987 patent for “Stuffin the Crust Pizza.”
NPC International, the Pittsburg, Kan.-based parent of Tony Roma’s a Place for Ribs and Skipper’s and Pizza Hut’s largest franchisee, drew a shareholder lawsuit over a proposed bid to take the company private and sell two divisions to top management. Two shareholders, who are seeking class-action status, filed the suit to prevent a plan that would allow a group of the company’s managers to buy Tony Roma’s and Skipper’s from the parent company for $9 a share.
Impressed by the gains in unit volumes Pizza Hut has enjoyed since its April rollout of Stuffed-Crust Pizza, Little Caesars launched its own limited-run version.
Under pressure to attract new customers and build repeat business, Chart House Inc. of Solana Beach, Calif., overhauled its menu to include several price-friendly entrees in the $20 range. The dinner-house chain began testing the items at a single unit as a prelude to a nationwide roll-out next year.
Darden Restaurants Inc. said some of its shuttered China Coast units would be converted into an updated version of Red Lobster, which is slated to include a brighter color scheme, an extended bar area and a line of microbrewed beers.
Developing its own secondary concept for a co-branding effort, Checkers Drive-In Restaurants introduced L.A. Mex, a Mexican fast-food concept. Executives of Clearwater, Fla. based Checkers said the start-up is a way to boost declining average-unit volumes and reverse several disappointing quarters of losses.
Blimpie, the New York-based submarine sandwich chain, said one of its biggest co-branding partners, Uni-Mart Inc., a 414-unit convenience store operator based in college Park, Pa., agreed to increase the number of Blimpie restaurants inside its locations from 15 to 100 over the next five years.
Buoyed by customer reaction to its fine of branded supermarket products, Taco Bell said it would expand its 2-year-old test. About 13,000 supermarkets in November carried Taco Bell-branded burritos, nachos, salsa, queso dips and other make-it-yourself products.
Grandy’s, the Lewisville, Texas-based chicken and quick-comfort chain, introduced a new kiosk format called Grandy’s Express. the company said the new units will carry all of its menu items except fried chicken on the bone.
Meanwhile, rumors persisted that Grandy’s parent company, American Restaurant Group Holdings Inc. of Newport Beach, Calif., was contemplating the sale of the chicken concept. American, also the parent company of Stuart Anderson’s Black Angus, Spectrum Restaurants, Spoons and other concepts, said in an earnings statement that it would have to make a “substantial asset sale” in conjunction with the, extension of the maturity dates of its creditors notes.
Hardee’s Food Systems Inc. put a “For Sale” sign on its entire New York-area division of the Roy Rogers fast-food chain. The 89-restaurant group has been unprofitable a company spokesman said., noting that the Imasco subsidiary wanted to sell the units as quickly as possible, ideally in the next 60 to 90 days.
In what probably will be remembered as the most disappointing year in its history, Brinker international sold 37 Grady’s American Grill units and development rights to Spageddies Italian Kitchen to Quality Dining Inc. in a $70 million deal. The purchaser, based in Mishawaki, Ind., is a diversified restaurant company with Chili’s, Bruegger’s Bagels and Burger King franchises.
Family Restaurants Inc., the Irvine, Calif., company that was being run buy turnaround specialists and in default on its loan covenants, indicated a willingness to sell any or all of its chains, totaling 672 units. Analysis said the decision of the company to put it its most profitable chains — Coco’s and Carrows — on the trading block was a sign that its banks would not wait beyond January for an operational turn-around. Family, which is being run by Jay Alix & Associates, is the parent company of Chi-Chi’s, El Torito, Charley Brown’s, Reuben’s and other chains.
Facing similar circumstances, Furr’s/Bishop’s Inc. said it had drafted a restructuring plan for shareholder, approval. If the plan, which was two years in the making, is rejected, the cafeteria operator said it probably would file for bankruptcy protection.
Despite its high debt load and earnings troubles, Piccadilly Cafeterias Inc. was being eyed for purchase. Former Piccadilly chief executive James W. Bennett and Ralph and Kacoo Olinde, the founders of Ralph & Kacoo’s seafood dinner houses, confirmed that they are trying to buy the Baton Rouge, La.-based cafeteria operator with an investor group.
Stella Bella Corp. USA, a coffee company based in San Diego, disclosed that it was seeking to acquire the struggling Summit Family Restaurants Inc., parent company of JB’s Restaurants. Stella Bella president Jack Broberg founded JB’s in 1961 and was its chairman he retired in 1987.
Johnny Rockets International Los Angeles, had new owners in November when an investor group completed a takeover of the majority of the company and installed former Burger King chairman Jeffrey Campbell as chief executive. The new parent company would be named Johnny Rockets Group Inc.
The federal government’s six-day shutdown — a result of a budget impasse between President Clinton and Congress — wrought havoc on contract feeders, especially those who had accounts at the national parks. Aramark and TW Services were forced to furlough hundreds of employees as park rangers closed sites and forced tourists to leave.
DECEMBER
The restaurant industry ended 1995 much as it had begun the year — with a wave of new restaurant concepts, executive suite changes and companies grappling for answers to endemic quandaries.
CKE Restaurants Inc. agreed to buy the struggling Summit Family Restaurants, parent of the 104-unit JB’s Restaurant chain for about $37 million in cash and stock. CKE said it would sell Summit’s 16 HomeTown Buffet units and mull the sale of other JB’s stores. CKE’s plans also call for the rapid expansion of Summit’s family concept, Galaxy Diner, which currently numbers six units. Summit is based in Salt Lake City.
Eatzi’s, the long-awaited home-meal replacement concept conceived by, Brinker International consultant Phil Romano, said the first 8,000-square-foot Eatzi’s would be a cross between a restaurant and a grocery store. He is developing the concept in concert with Brinker.
A federal court in Illinois awarded landlords of a site that formerly housed a Subway Sandwich franchise more than $10 million in damages after finding Subway’s founders, the parent company and an affiliated firm guilty of fraud and breach of contract. The company said it is considering an appeal.
Marriott School Services said it was testing “Healthy School Meals” in 12 school districts. The menu was developed to satisfy the U.S. Department of Agriculture’s new guidelines for healthful school meals.
Hamburger Hamlet, an upscale family-restaurant chain based in Sherman Oaks, Calif., said it would file Chapter 11 upon closing 12 of its 31 restaurants. It would be the sixth largest chain operator in 1995 to seek bankruptcy protection.
MILESTONES
While people debated the meaning of 1995’s most overused foodservice phrase, “home-meal replacement,” operators debated the merits of the niche. McDonald’s Hearth Express burned out in August, with in year of its opening. Hardee’s likewise doused the flame in its Double R Grill, and KFC has all but closed the door on the Colonel’s Kitchen. Arby’s, however, still plans to populate the nation with its Roast Town quick-comfort concept, with at least 150 new Roast Towns forecast for the next year.
Meanwhile, the chain whose success spawned all the interest in home-meal replacement in the first place evolved from a side-dish specialist called Boston Chicken into a broad-menu, billion-dollar phenomenon called Boston Market. In addition to changing its concept name and menu over the past year, the company also bit off a piece of the breakfast daypart when it launched Einstein Bros. Bagels.
Between Einstein, Bruegger’s and all of the other fast-growing chains in the niche, 1995 might be remembered as the last year in which anyone in America had not vet chewed a bagel. If there’s not a bagel shop on a corner near you, check back in a few hours.
Restaurants continued to tie the knot with other concepts in 1995, as the co-branding trend accelerated. McDonald’s wed two petroleum companies, Amoco and Chevron, in major regional pacts, and KFC stayed in the PepsiCo family, to pair with its sister concept, Taco Bell, in a massive dual-brand retrofit campaign. Green Burrito was party to several marriages this year, including a 140-unit dual-brand agreement with Carl’s Jr. and smaller engagements with Western Steer and Rally’s. Checkers, meanwhile, created its own Mexican-food bride, L.A. Mex.
The station wagons of the family segment hired new drivers, as Denny’s parent Flagstar anointed U-turn master James Adamson, formerly of Burger King, as its new chairman and chief executive, and Shoney’s tapped similarly skilled Stephen Lynn from Sonic as chairman and chief executive.
While the low-fat Border Lights menu at Taco Bell didn’t prove to be a cure-all at that chain, PepsiCo compensated for it at Pizza Hut by filling those dry “pizza bones” with some mozzarella string cheese. Stuffed-crust pizza became one of the most successful product launches in the history of the chain. Little Caesars, the low-price leader of the pizza pack, followed with its own version, shortly after rolling out delivery systemwide.
Darden set sail, and China Coast sank. General Mills spun off its then-four-concept restaurant division in late May, naming it after Red Lobster’s founder. Three months later Darden abandoned its attempt at establishing the first national chain of Chinese eateries.
While O.J. Simpson’s Dream Team was busy proving that the glove did not fit, a dinner-house Dream Team shook hands in what many in the industry view as a perfect fit. Brinker international purchased two concepts, Maggiano’s Little Italy and The Corner Bakery, from Lettuce Entertain You Enterprises and agreed to form a think tank with LEYE that promises to launch new concepts and improve existing ones.
People who like to smoke after a good meal were booted from restaurants in New York City, California and other municipalities across the country, but restaurateurs in several states, including Florida and Maryland, were able to thwart legislative attempts to snuff the right to puff.
IN MEMORIAM
Tony Borrelli, Nation’s Restaurant News Product Showcase editor, a MUFSO coordinator and an office jack-of all-trades, died in New York. He was 65. Borrelli’s team spirit earned him Lebhar Friedman’s highest employee honor, the Arnold D. Friedman Citizenship Award.
Gill A. Centioli, a fast-food innovator who once operated the sixth-largest KFC franchise in the world, died of a heart attack in Seattle. He was 80. Centioli served on the advisory board for the School of Restaurant Management at Washington State University and was a past president of the Restaurant Association of the State of Washington.
Frank X. Cuellar Sr., a founder of the El Chico restaurant chain based in Dallas, died at 91. In 1993 Cuellar was named to the Texas Restaurant Association’s Hall of Honor.
Joseph L. Czarnecki of Joe’s Restaurant in Reading, Pa., died at 84. Joe’s — which is a member of The Nation’s Restaurant News Fine Dining Hall of Fame — attracted such food authorities as Craig Claiborne and James Beard. Czarnecki specialized in mushroom-based dishes long before they became a part of the American gourmet food scene. Davre J. Davidson, founder and former chairman of Philadelphia-based Aramark, died in Los Angeles of heart failure at age 83. He was the force behind Aramark’s growth from a Depression-era vending business into a $5 billion service-management company.
J. Peter Grace, chairman of industrial conglomerate W.R. Grace & Co., died of cancer in New York. He was 81. Grace was credited with engineering the company’s diversification and turnaround. The conglomerate operated several restaurant brands, including the El Torito Mexican dinner-house chain. Peter O. Keegan, an associate editor of Nation’s Restaurant News, died after a year-long battle with brain cancer. He was 33. Keegan, who joined the staff in April 1987, worked as desk editor, field editor and associate editor, covering several beats, including the casual-theme dinner-house segment, the quick-serve chicken segment and the New York restaurant scene.
Peter Kump, president of the james Beard Foundation and recognized this year as one of the 50 most influential people in foodservice in a special edition of Nation’s Restaurant News, died of cancer at 57. He also was the president and founder of the Peter Kump School of Culinary Arts and Peter Kump’s New York Cooking School.
Robert Louis Meyzen, who owned and operated New York’s La Caravelle for nearly 20 years, died from cancer at 68. La Caravelle, a multistar winner, was one of the pioneer French restaurants attributed with introducing Americans to French cuisine.
R. Boyd Morris, a foodservice veteran and former mayor of Greensboro, N.C., died of cancer. He was 83. For the past 13 years he worked for K&W Cafeterias Inc., traveling almost weekly. Morris was elected an honorary life director of the National Restaurant Association, and he co-founded the North Carolina Restaurant Association.
Franco Palumbo, restaurateur, teacher and television chef, died from AIDS at 52. In 1984 he opened Franco’s Hideaway in Provincetown, Mass. Earlier in his career, Palumbo was executive chef at Weight Watchers International, teacher at the Culinary Institute and host for two cooking series for PBS.
Gregory Pappas, a vice president of the Pappas family restaurant chain, was killed in a car accident in Houston. Pappas, 45, was one, of three brothers who own and operate Pappas restaurants Inc. with their uncle, Pete Papas, who founded the company in the 1940s with the brothers’ late father, Jim Pappas.
Ronald Wilson Plummer, prominent speaker in the foodservice industry, restaurant consultant and director of several foodservice advertising agencies, died from heart failure in New York. He was 62. In 1984 he became president of The Plummer Group at Diener, Hauser, Bates/Saatchi & Saatchi. The agency, which specialized in food service advertising, was incorporated with Warner, Bicking, Morris and Partners in 1987.
Murray Riese, chairman and co-founder of the Riese Organization, which pioneered the development of dual-branding, died in New York, of cancer. He was 73. Among the organization’s hundreds of diverse operations are such national franchises as TGI Friday’s, Houlihan’s, Pizza Hut, KFC and Arby’s. Marc L. Sarrazin, a prominent wholesale meat purvevor and culinary talent scout for young American chefs, was struck by a car and killed in New York. He was 69. Sarrazin was chairman of DeBragga and Spitler Inc.
Richard Sax, author of eight cookbooks and a columnist for Bon Appetit magazine, died of lung cancer at 46. His cookbook “Classic Home Desserts” brought him numerous awards.
Jan Sendel, who, despite his lack of culinary-school education, became executive chef of New York’s Aquavit, a nationally acclaimed Swedish restaurant, died of a heart attack. He was 32.
ACQUISITIONS
JANUARY
Seeking to further diversify, its product tine, high-volume food-service manufacturer Pittsburg Corp. purchased St. Louis-based Pet Inc., makers of the Old El Paso Mexican Foods and Progresso Soups, for $2.6 billion. Benihana National Corp., the 23-unit publicly traded arm of the Japanese dinner-house chain agreed to acquire 21 privately held Benihana of Tokyo restaurants from chain founder Rocky, Aoki for $6.15 million in a combination of cash and stock. Quaker Oats subsidiary Golden Grain Co. absorbed Scattle-based Niles Spice Foods, a supplier of healthful meals, for an undisclosed price. After months of negotiations, dinner-house operator Ground Round Corp. terminated its merger agreement with GRR Acquisition Corp., a management-led buyout group spearheaded by senior-level Ground Round executives. Societe D’Investissement 20/20 Inc., consortium of Canadian financiers. bought Sportscene Restaurants, parent to the 40-unit La Cage Aux Sports chain. Societe paid C$3,4 million for the Montreal-based sports bar/restaurant concern. Malcolm Glazer, the Palm Beach, Fla., financier and chairman of Gilbert/Robinson, parent of the Houlihan’s chain, acquired the Tampa Bay Buccaneers football team for $192 million. Distilled beverages conglomerate Seagram Co. Ltd. expanded its presence in South America with the purchase of Atlas Commercial SA, a maker of wines and spirits, for an undisclosed price.
FEBRUARY
Contract foodservice and restaurant operator Daka International acquired an 80-percent stake in the education and business and industry, foodservice accounts of ServiceMaster L.P. of Downers Grove, Ill. Terms were not revealed. Distributor and designer Rykoff-Sexton purchased broad-line distributor Continental Foods, Baltimore, form undisclosed price. English hospitality operator Whitbread PLC placed all 16 of its Australian-based Keg restaurants on the sale block. Asking price: $26 million. A Malaysian investment group, Berjaya Group BHD paid $22.5 million in return for a 52-percent stake in Roadhouse Grill, a seven unit casual-theme steak operator. Meanwhile, barbecue operator and retailer Billy Blues Corp. sealed a pact to buy Waterstreet Inc., a four-unit operator of mesquite-grilled seafood restaurants. Financial conditions were not revealed. Struggling KFC franchisee Morgans Foods Inc. sold 24 restaurants to Kazi Foods of New Jersey in an all-cash transaction. Stockholders of Magellan Restaurant Systems approved the share-for-share merger with Los Angeles-based Grill Concepts, operator of the six-unit Daily Grill. Chiquita Brands International said it would sell its New Zealand-based assets to Dole Food Co. for undisclosed terms. Arby’s of Canada, a 116-unit operator based in Ontario, purchased 16 sites from Thickson Road Inc., another Ontario-based franchisee. Terms were not revealed.
MARCH
CFS Holdings. Inc. acquired the assets of the famed seafood processor and wholesaler Chicago Fish House for $9.2 million. The landmark operation had been operating in Chapter 11 bankruptcy since September. Debt-laden Magic Restaurants Inc. said it would sell six of its Red Robin franchises for $5 million in cash. Following a dispute with the board of directors, Western Sizzlin’ chairman David Wachtel offered to buy the family, steak chain, offering $3.88 per share for the 3.4 million shares he did not already own. NPC International a 346-unit Pizza Hut operator, revealed it would acquire an additional 23 restaurants from parent Pizza Hut Corp. for an undisclosed price. A.T. Mallad Enterprises bought 116 Little Caesars restaurant throughout Orange and Los Angeles, Calif., counties for an undisclosed amount. Agribusiness conglomerate Cargill Inc. purchased a 75 percent share of flour and pasta manufacturer Minetti & Cia S.A. of Buenos Aires for $50 million. Elbowing its way into the morning daypart, Boston Market invested $20 million in Progressive Bagel Concepts, a 2 store network of three regional bagel operators. Seagram Co. reached a definitive agreement to purchase the worldwide juice and beverage business of Dole Co. Coffee retailer and operator Starbucks Coffee Co. purchased a minority stake in Noah’s New York Bagels for about $11 million. As settlement to a franchisee lawsuit, Food-maker Inc. repurchased 27 Jack in the Box units in the Las Vegas in Denver markets.
APRIL
IHOP bought 10 underperforming Shoney’s restaurants in the Chicago area from Lunan Family Restaurants. Terms weren’t disclosed. Manhattan Bagel signed a letter of intent to purchase L.A.-based I & Joy Bagel in an exchange of stock. Northstar Restaurants, a Boston Market franchisee, added 16 Boston Market sites previously operated by the parent company. Boston Market said it would provide some $24 million in financing to Northstar. New Valley Corp., a diversified investment concern in Miami Beach, bought a 6.4-percent stake in Showbiz Pizza Time, parent of the Chuck E. Cheese’s chain, for $7.5 million. Long John Silver’s struck an agreement to sell its 28-acre headquarters and training facility to Ashland, Ky.-based Ashland Inc., an oil concern. Atlanta-based RTM Restaurant Group bought a;l 42 Shoneys Restaurants from Atlanta Family Restaurants Inc. for an undisclosed amount. RTM franchises 282 Arby’s and operates 130 units of Mrs. Winner’s Chicken and Biscuits. The two largest Denny’s franchisees in the country, American Family Restaurants Inc. and Denwest Restaurant Corp., agreed to merge for an exchange of stock. Diversified foodservice manufacturer Dean Foods said it OK’d an acquisition of Rio Grande Foods., a McAllen, Texas-based processor of Southern style frozen vegetables. Terms weren’t revealed.
MAY
Onex Food Services, the Canadian-based parent to airline feeder Sky Chefs, said it would acquire the international assets of segment competitor Caterair International Corp. for C$700 million. Oldfield Eastern Corp. bought 72-unit Steak-Out Franchising Inc., a takeout and delivery concept, for an undisclosed sum. Yogen-Fruz Worldwide Inc., a frozen- yogurt operator here, acquired dairy products manufacturer Deering Ice Cream. Terms were not disclosed. Glass and dinnerware manufacturer Libbey Inc. reached an agreement to buy Syracuse China for an undisclosed cash sum. Veering from its poultry and meat roots, Tyson Foods struck a deal to buy the seafood division of Minneapolis-based Multifoods Corp. LKE Energy Inc. acquired Raspberry Entertainment Concepts, parent of a Canada-based string of restaurants and themed nightclubs, for $C2.6 million. Chart House Restaurants agreed to divest its Paradise Bakery chain to Clucker’s Wood Roasted Chicken for $6.7 million in cash and notes. Elxsi Corp., an Orlando-based parent of such family chains as Bickford’s, sealed a pact to acquire Massachusetts-based Abdow’s, a longtime Big Boy franchisee. Apple South, the largest franchisee of Applebee’s Neighborhood Grill & Bar, bought 18 Applebee’s stores from Milwaukee-based The Marcus Corp. for $48 million in cash. Good Times Restaurants Inc. approved the sale of its 15-unit Round The Corner chain to a group of company managers for $425,000. Compass International an international foodservice management company, bought regional contract feeder Flik International for an undisclosed sum.
JUNE
Canadian Brewer John Labatt Ltd. reached an agreement to buy all outstanding stock of Belgian brewing company Interbrew S.A. in a transaction valued at about C$4 billion. Flamboyant restaurateur Warner Leroy, owner of the famed Tavern on the Green, purchased New York landmark Russian Tea Room for an undisclosed amount. Making its second acquisition in as many months, Canadian frozen-yogurt operator Yogen Fruz purchased the 414-unit Bresler’s Ice Cream and Yogurt chain of Chicago. Financial terms of the transaction were not disclosed. Performance Food Group, a Nashville, Tenn.-based broad-line marketer of food and related products, bought Cannon Foodservice of Asheville, N.C., for undisclosed terms. Manhattan Bagel sealed an agreement to acquire Bay Area Baget parent of the eight-unit Holey Bagel chain, for a combination of cash and stock. Triarc Cos. Inc., a diversified company whose holdings include the Arby’s chain, purchased Mistic Beverages for some $95 million. Chemical conglomerate Monsanto Co. bought a 49.9-percent share of biotech concern Calgene Inc., makers of the Flavr Savr genetically engineered tomato. Watermarc Food Management, a 30-unit Tex-Mex operator, signed a deal to buy eight-unit The Original Pasta CO.
JULY
Stunning many, Brinker International announced it would purchase Maggiano’s little Italy and The Corner Bakery from Chicago-based Lettuce Entertain You as well as establish a strategic partnership between the two companies. Brinker agreed to tender 4 million shares of stock, about $73 million. British foodservice conglomerate Compass Group PLC agreed to purchase the catering divisions of Accor SA, a French hospitality concern, for about $932 million. CPC international, a diversified food manufacturer, bought the Golden Wonder Pot Noodle hot snacks business from Dalgety PLC for $280 million. Chicken products manufacturer Pilgrim’s Pride paid $32 million for Union de Queretaro, a Mexican chicken processor and marketer. Investor Gerard O’ Riordan and a consortium of investment partners contracted to buy the Orlando Entertains and LA Entertains dinner-theater operations of Rank Leisure USA for an undisclosed sum. RTM Restaurant Group purchased the Lee’s Famous Recipe division of Shoney’s Inc. for an undisclosed price. Diversified family operator Flagstar Cos. Inc. sold its Proficient Food Co. distribution arm to an affiliate of Rocky Mount, N.C.-based MBM Corp. for $130 million. Flagstar also sold its TW Recreational Services division for $1 10 million to Amfac Parks Inc. Recreational and corporate contractor Fine Host bought segment competitor Northwest Food Service of Boise, Idaho, for an undisclosed sum. Roast beef operator Arby’s Inc. bought a 12,5-percent stake in Tex-Mex quick-service concern Zuzu Inc. for $5 million. The pact included a proviso allowing Arby’s to purchase up to 50 percent over the next three years. Lone Star Steakhouse & Saloon, the 130-unit themed steak operator, purchased 11-unit Creative Culinary Concepts, an 11-unit Lone Star franchisee and operator of several independent themed restaurants. Distiller Seagram Co. bought a majority stake in the world-renowned Four Seasons restaurant for a sum that was not revealed. Tyson Foods purchased Mississippi poultry processor McCarty Farms for undisclosed terms.
AUGUST
Wendy’s International moved into the morning daypart in a big way with a $400 million acquisition of 1,000-unit Canadian doughnut operator Tim Hortons. Apple South signed an agreement to merge with Texas-based DF&R Restaurants, operator of the Don Pablo’s and Harrigan’s chains. The stock-for-stock transaction was valued at $208 million. Dean Foods purchased frozen-vegetable processor Norcal Crosetti of Watsonville, Calif., for an undisclosed price. Nestle SA and potato-processing giant J.R. Simplot acquired most of the Pacific Brand Food Divisions of Pacific Dunlop Ltd. Nestle paid $426 million for the processed dairy operations, while Simplot laid out 368 million for the canned frozen food and bakery divisions. LevMark Capital Corp. of Atlanta, a private equity fund, agreed to buy the Mike Rose Foods manufacturing division of Shoneys Inc. Terms were not revealed. Boston Market’s Progressive Bagel Concepts bought nine units of the Denver-based Bagel Stop chain. Baskin-Robbins said it would sell its 30-unit Caffe Classico division back to the family it bought the coffee chain from four years ago. CPC International reached an agreement to acquire the baking business of Kraft Foods Inc. for $865 million. Acquired brands include Entenmann’s, Freihofer’s and Oroweat. Quality Dining paid S8.6 million to acquire eight Burger King restaurants from its Detroit-based franchisee. Phoenix-based Peter Piper Pizza bought 30-unit Pistol Pete’s Pizza in a deal that was aided by a $12.75 million investment from a Chicago-based equity firm. Chase Capital, a private arm of Chase Manhattan Bank, bought Southern California Food Services Holding Corp., a 64-unit Wendy’s franchisee, in a transaction valued at about $30 million. Hardee’s Food Systems, operator and franchisor of the 4,000-unit Hardee’s chain, bought 31-unit Hardee’s Enterprises of Bloomington, Ill. Terms were not revealed. Food Trends Acquisition Corp., a capital concern in Newton, Mass., merged with Silver Diner Development, parent to the five-unit Silver Diner chain, for 5.3 million shares of stock.
SEPTEMBER
Shoney’s Inc. agreed to merge with TPI Enterprises, its largest franchisee, in an exchange of common stock. Shoney’s agreed to tender 0.28 shares of its stock for every one share of TPI and one Shoney’s warrant for cach 3.125 outstanding shares of TPI. A group of investors acquired an 80-percent stake in struggling Ketde Restaurants for an undisclosed price and said it would return the 119-unit family operator to private ownership. Following the announcement, Denwest Restaurant Corp., a large Denny’s licensee, bought 25 Kettle units in the Western and Southeastern markets. Hillco Ltd., a holding company with about $300 million in assets, acquired Asheville, N.C.-based McGuffey’s Restaurants for an undisclosed price. American Family Restaurants, an 85-unit Denny’s operator, paid $2.7 million and assumed debt for 11 Mr. Fable’s restaurants in western Michigan. Nestle Foods agreed to acquire the Ortega Mexican Foods business from Nabisco Inc. The `21′ Club, a New York tradition since the days of Prohibition, was sold to European consortium Sea Containers of America Inc. Terms were not disclosed. Meanwhile, Del Frisco’s Double Eagle Steak House, one of the country’s most renowned steak cateries, was purchased by Lone Star Steakhouse & Saloon. Toronto-based coffee retailer Second Cup Ltd. doubled its size with the acquisition of 224-unit Gloria Jean’s Gourmet Coffees. Terms weren’t revealed.
OCTOBER
Investors Bennett LeBow and Carl Icahn teamed up to purchase a 4.8-percent stake in RJR Nabisco Holdings Corp. for $390 million and said they plan to force the concern to spin off its Nabisco Holdings Corp. unit. Hannibal’s Coffee Co., an 11-unit coffee-cafe operator here, said it would buy 28-unit Brothers Gourmet Bar chain from parent Brothers Gourmet Coffee for undisclosed terms. Bahrain International Bank said it would spin off its share in a chain of more than 100 Burger King units and offer them to the bank’s customers. Patricof & Co., a New York investment firm, paid $12.5 million for a 25-percent stake in 78-unit Johnny Rockets International Inc. Daka International said it would buy 15-unit Champps International, a sports-themed restaurant-lounge for an exchange of stock. Nabisco Holdings Corp. bought the U.S. and Canadian table spreads business of Kraft Foods Inc. Franklin, Ill.-based Dean Foods Co. purchased the Rod’s Food Products and Royal Food Products division of Merico Inc. The priced of those deals were not disclosed. Dinner-house operator O’Charleys Inc. acquired six-unit Shoex Inc., a franchisee in Alabama, for an exchange of stock valued at $10 million. Apple Ventures Inc. said it would buy the 13-unit Hot Biscuit Family Restaurant chain for an undisclosed combination of cash and notes. Foodbrands America Inc., a broad-fine marketer and manufacturer of processed food products, struck a deal with KPR Holdings of Fort Worth, Texas, for $75 million in cash and $18 million in assumed debt. Just weeks after terminating a previous sale pact, ice machine manufacturer Manitowoc agreed to purchase Brentwood, Tenn.-based Shannon Group, a supplier of refrigerators and freezers, for about $126 million. EFC Holdings Inc., the Malaysian KFC licensee, purchased 29 Pizza Hut units in that country for $38 million.
NOVEMBER
Quality Dining, a large franchisee of Burger King restaurants, said it would pay Brinker International $70 million for 37 Grady’s American Grill units. JP Foodservice, a large broad-line distributor, struck an agreement to acquire the foodservice distribution business of Rotelle Inc., a subsidiary of Richfoods Holdings. Emerging from a bidding war, Diamond Shamrock, a petroleum supplier and convenience store operator, said it would buy National Convenience Stores for $260 million. NCS operates the 660-unit Stop N Go chain. Char-broiled chicken operator Koo Koo Roo bought out its California franchisees as well as securing all area development rights in that state. After divesting Grady’s, Brinker International sold an 80-percent share of Kona Ranch Steak House, its one-unit themed steak test, to Red Hot Concepts, a British licensee of Brinker concept Chili’s. Outback Steakhouse said it would acquire 47 of its licensed units from five separate franchise groups for 3.65 million shares of its stock valued at $138 million. Linda’s Flame Roasted Chicken, a four-unit rotisserie operator, said it would acquire Jacksonville, Fla.-based Flamers Charburgers Inc., a 71-unit mall operator, for an undisclosed amount of cash, notes and common stock. Sacramento, Calif.-based coffee retailer and operator Java Centrale sealed an agreement with Chart House Enterprises to acquire the 51-unit Paradise Bakery division of the seafood dinner-house chain for $6.7 million in a combination of cash and notes. Chart House initially had agreed to sell the division to Foodquest Inc., parent to the Clucker’s rotisserie chain, but terminated the sales pact after Foodquest could not secure the financing. Expanding its overseas presence, Marriott Management Services bought England-based Taylorplan Services Limited, a foodservice and custodial provider, for undisclosed terms.
ANNIVERSARIES
In the high-risk restaurant industry, longevity is cause for celebration The following operators have been in business for 25 or many more years. Our apologies to any companies that quietly observed anniversaries and didn’t tell us.
MARCH
TGI Friday’s went back to a 1960s theme for its 30th anniversary with period costume contests, decorations, dance floors and the advertising slogan “Never trust a restaurant under 30.”
Gino, a New York restaurant founded by Gino Circiello in 1945, offered a menu with 50-year-old prices.
APRIL
Marchi’s, a family-owned Old World Italian restaurant in New York, celebrated its 65th year since its founding by immigrants Lorenzo and Francesca Marchi.
MAY
New Orleans-based Ruth’s Chris Steak House observed its 30th anniversary with dinners at all 46 restaurants that benefited the Horatio Alger Scholars Fund for disadvantaged high-school students.
JUNE
Geja’s Cafe in Chicago, known for fondue, wine and classical guitar players, celebrated its 30th year by offering 30-percent food discounts and 1965 wine prices on a special wine list.
Also commemorating its 30th anniversary in Chicago, Gullivers, an American Victorian and Art Nouveau antiques-filled pizza parlor and American restaurant on the far north side, held a drawing for an antique chandelier and other prizes.
SEPTEMBER
Columbia Restaurant in Tampa observed the 90th anniversary of the original restaurant with the publication of a cookbook by founder Casimiro Hernandez Sr.,
OCTOBER
Fleur de Lys in San Francisco, 25 years old, has survived hard times for French restaurants in America by remaining on the contemporary edge of French cuisine.
NOVEMBER
Marcus Corp. in Milwaukee, owner of hotels including the Pfister, Marc Plaza and Budgetel, movie theaters and restaurants, marked its 60th anniversary by donating $5 million toward the renovation of Milwaukee’s Performing Arts Center.
DECEMBER
Chicago’s Drake Hotel, now operated by Hilton International, is celebrating its 75th anniversary. Most of a $9 million-restoration was to be completed by the Dec. 31 anniversary date.
Professional Food Service Management, a university and college foodservice company based in Jupiter., Fla., commemorated its 30th anniversary with year-end parties.
RELATED ARTICLE: MENU TRENDS
Asian has extinguished Cajun as the hot menu trend of the moment. Wasabi-spiked everything, including vinaigrettes and mignonettes, is showing up on menus. Chefs also are adding other Asian ingredients, such as miso, fresh soy beans, soba noodles and pickled plums, to their pantry.
Mediterranean cuisine has not hit the heights that some predicted it would a couple of years ago, but interest is heating up as pots of couscous steam from coast to coast.
Vegetarianism is hotter than ever before, and it is not just among the Birkenstock-clad leftover hippie crowd. More and more mainstream restaurants are meeting an increasing consumer demand for dishes that contain little or no animal protein.
Steak is still sizzling despite the interest in vegetarian fare. But it is given a new look these days. Chefs and operators are varying their steak inventories with different cuts and preparations. The boneless New York strip and filet mignon still dominate the grill, but rib-eye, hanger steak, skirt steak and oversized porterhouse are gaining in popularity. The appeal of Tuscan cooking has put the classic Florentine steak on the map and on the menu.
Retro dishes are stirring up nostalgia. Just as some of Broadway’s biggest hits of the year have been revivals, such as “Hello, Dolly,” memorable favorites, such as baked Alaska, lobster Thermidor and hollandaise sauce, have made a showy comeback in restaurants.
Italian foods in general and regional Italian cuisines in particular are as hot as a pizza oven in Naples. American chefs are tossing up dishes true to their regional roots with ingredients from Piedmont to Palermo.
Comforting dishes, such as pork chops, meat loaf and roast chicken, can be had in restaurants ranging from quick service to fine dining. And diners can pay anywhere from $2.95 to $12.95 for a slab of meat loaf that takes them back to Monday nights at Mom’s.
RELATED ARTICLE: HOT CONCEPTS
Spanning some of the industry’s most explosive growth areas, such as coffee, brew pubs, themed entertainment eateries and bagels, 1995 Hot Concepts! demonstrated that a unique idea, service strategy or menu is only a fragment of the formula for being hot. Strong consumer appeal, solid concept definition, innovation and an entrepreneurial spirit help set Hot Concepts! apart from those just beginning to boil.
Entering 1995 the inaugural Hot Concepts! class were as follows: Bruegger’s Bagel Bakery The bagel boom broke last year, and Bruegger’s was there to lead the pack. Hearth-baked bagels are the main menu focus of the Burlington, Vt.-based company that operates more than 300 stores and plans to have more than 1,000 by 1998.
Cafe Express
Food for the thinking man and woman is how Cafe Express positions itself with fast food for ’90s lifestyles. With a mod interior, midscale prices and varietal menu of contemporary pastas, salads and sandwiches, the Houston-based operation operates five units.
Cafe Tu Tu Tango
Fire-eating servers and a Mediterranean tapas menu draw an eclectic crowd that seeks some adventure as part of its dining experience. The Miami-based operation currently features three stores throughout Florida and Atlanta.
The Cheesecake Factory
The chain’s name underscores its signature item but understates the broad menu that features hefty portions at moderate prices. Despite its pricing structure the chain churns out an average $8.5 million in per-unit sales. The menu, combined with an elaborately designed restaurant, makes guests feel as if they should be spending a fortune rather than the $13 that is the per-person check average.
Cozymel’s
Billed as an authentic escape place, the Brinker International concept takes patrons to the Mexican countryside. Complete with a marketplace atmosphere, the restaurant serves up a good time and good food.
Dive!
Bringing theme restaurants to a new low, Dive! features a high-tech submarine theme complete with portholes and periscopes. The concept combines the culinary creativity of Larry Levy and the entertainment expertise of Steven Spielberg and jeffrey Katzenberg.
House of Blues
Despite the recent executive turnover at the Isaac Tigrett-founded concept, House of Blues is singing anything but with its average $10 million in sales per unit, continued expansion and plans to open at Walt Disney World. The blues-themed restaurant, which also series as a top venue for live performances, is considering entering the hotel business.
Maggiano’s Little Italy
A concept so hot that it brought together two of the industry’s biggest powerhouses, Maggiano’s Little Italy features family-style Italian fare. The Lettuce Entertain You Enterprises Inc. menu and average $10 million in sales per unit created a concept so captivating that it drew interest from Brinker International. Now the two are working together to expand the concept nationwide.
Palomino
Seattle-based Restaurants Unlimited is looking to the Euro bistro concept as a primary tool for national expansion. The sleek, contemporary restaurants serve up wood-roasted and rotisserie foods in a casual atmosphere.
Pasqua Coffee
Capitalizing on the coffee craze and high-volume business centers, Pasqua Coffee captures the hungry with a savory menu that helps draw a solid lunch crowd. With more than half its sales generated through a salad and sandwich menu, Pasqua pulled in about $25 million in systemwide sales on 46 units for the year.
The Rock Bottom Brewery
As house brews continue to redefine what beer is all about, The Rock Bottom Brewery is poised to be one of the leading names in brew pubs. Mixing a tasty diverse menu with flavorful, hearty beers, The Rock Bottom will generate more than $2 million in profits for fiscal 1995. St. Louis Bread Co. With a greater role in top management by parent company Au Bon Pain, St. Louis Bread Co. is likely to expand quickly beyond its regional roots. Although the chain recently lost president and chief executive David Hutkin to retirement, the chain will not lose sight of its core product — freshbaked bread. With average sales of about $1 million, St. Louis capitalizes on the bakery segment that is warming the hearts of consumers nationwide.
Wolfgang Puck Cafe
The winning combination of Wolfgang Puck’s culinary savvy and his wife and business partner Barbara Lazaroff s design has carved out a casual niche for the once-upscale-only chef. The Cafe menu incorporates Puck’s signature California cuisine but at considerably lower prices, allowing customers to enjoy a Puck experience more frequently than the special occasion or Oscar party.
RELATED ARTICLE: TOP 10 COOKBOOKS
1. The `21′ Cookbook,by Michael Lomonaco. Doubleday. A tale well-told of a restaurant that began as a speakeasy and became a legend, with 150 recipes that are the next best thing to dining there.
2. The Lutece Cookbook, by Andre Soltner. Alfred A. Knopf. An outstanding collection of 333 recipes from a revered chef who made this restaurant a benchmark for French cuisine in Manhattan.
3. Texas the Beautiful Cookbook, by Patsy Swendson and June Hayes. Collins Publishers San Francisco. Two hundred great recipes that are accompanied by alluring photographs of this remarkable state and essays that will tell you all you ever wanted to know about it.
4. Roasting, by Barbara Kafka. William Morrow and Co. Not only bird meats but even vegetables and fruit are on the menu in this fine collection of 230 recipes for an innovative method of roasting by one of America’s most eloquent food writers.
5. How to Bake, by Nick Maigieri. Harper-Collins. A well-known baking teacher at the Peter Kump Cooking School concocts an international assortment of more than 400 tasty goodies.
6. Desserts to Die For, by Marcel Desaulniers. Simon & Schuster. Sixty dessert recipes that are beautifully illustrated and certain to seduce you into indulgences you’ll never forget.
7. In Julia’s Kitchen with Master Chefs, by Julia Child. Alfred A. Knopf An impressive cookbook by the grande dame who brought French cuisine to the American kitchen, it offers 150 recipes that represent the achievement of 26 leading American chefs.
8. Flatbreads & Breads, by Jeffrey Alford and Naomi Daguid. William Morrow & Co. A combination cookbook, travel diary and journal that contains 60 unusual recipes for the world’s oldest variety of bread.
9. Maida Heatter’s Brand-new Book of Great Cookies, by Maida Heatter. Random House. The versatile daughter of the 1940s radio emcee Gabriel Heatter adds another tier to her toque with a cookbook that showcases her drawings as well as the cookies she loves to give away.
10. Susanna Foo Chinese Cuisine, by Susanna Foo. Chapters Publishing. An illustrated collection of 175 unforgettable Chinese recipes by the owner of the well-known, innovative Philadelphia restaurant.
RELATED ARTICLE: THE WILD SIDE
Waiter, there’s no fly in my soup: Sick of the glut of Italian and Mediterranean cookbooks crowding store shelves? Here’s something new to buzz about — a culinary page-turner that will turn your stomach as well. “Entertaining with Insects” boasts 85 different buggy recipes for the truly adventurous palate. Written by Ronald Taylorand Barbara Carter, the book gives grasshopper pie a whole new meaning.
RELATED ARTICLE: BEST ADS
KIDS SAY THE DARNDEST THINGS
Pizza Hut, in an effort to introduce its version of the Buffalo Wing nationwide, used kids to underscore the confusion about just what Buffalo wings are all about. In one television spot named Buffalo Wings, a frazzled father is serving up lunch to a table full of inquisitive kids who want to know why they are eating Buffalo Wings since “Buffaloes don’t fly” and because “these wings are too small for a Buffalo.” The killer line? “Buffaloes arc hairy. Like my Dad’s back.”
COWS DEPEND THEIR LIVES
Chick-fil-A used a Gary Larsonesque approach to news that chicken consumption was on the rise. With the help of its agency of record, The Richards Group, Chick-fil-A created a billboard depicting two 3-D cows scrawling the words “Eat mor chickin.” The board was one in a series of outdoor ads created for the Atlanta-based chain.
A SPOKESCLOWN FOR ALL AGES
It’s hard to determine which ad is actually best, but suffice it to say the resurgence of the Jack in the Box spokesclown, Jack, presented one of the best ad campaigns of the year. The irreverent spokesclown made his debut by blowing up the conference room of the board of directors, the same board that actually had blown him up years ago. After getting his revenge, Jack appeared in numerous spots and as the target for many a giveaway premium.
HE JUST KEEPS GOING AND GOING
One wonders with each Little Caesars commercial how the ads can continue to be so funny. Whatever the secret – they are. But one introduced late summer really took the pie that mixed live action with animation. In order to introduce delivery service for the chain, the commercial featured a director trying to get the dubious little cartoon character to utter the words “delivery” rather than the only two words that have ever passed his lips — “Pizza. Pizza.” In the end, after trying numerous fumbling stand-ins, the director resorts to dubbing over the words. The blatant technique mimics the movie days of “Godzilla,” when Japanese-speaking actors were dubbed with American voices.
GETTING ITS ADS’ WORTH
While Burger King customers may be getting their “burger’s worth,” Burger King certainly got its worth from most of its spots throughout the year. Most noticeable, however, was the spot that helped introduce the tie-in with the Walt Disney movie “Toy Story. ” In the commercials a Burger King store manager is clearly on edge, awaiting the arrival of his share of premiums that will be issued as part of the promo. Just as the moment of doom approaches — opening the store with no premiums to hand out — the featured giveaways come scrambling into the store.
TH-TH-TH-THAT’S ALL, FOLKS!
McDonald’s timing was either really lucky, or somebody knew something. Looney Tunes commercials broke amid Michael Jordan’s return to the NBA. The creatively crafted spots feature such characters as Sylvester the Cat, Bugs Bunny and Elmer Fudd taking on Jordan, Charles Barkley, Reggie Miller and Shawn Kemp in a pickup game. The cartoons set the way for similar spots with NFL legends.
GETTING EVEN WITH DIRTY BIRDS
Carl’s Jr. got really messy when it threw clean, well-manicured food shots out the window in exchange for the real-life portrayal of fast-food sandwiches. Mendelson-Zien took a real-life look at real-life fast food for Carl’s jr. when the drippings of a Carl’s Jr. burger ruins the sneaks of a pro-basketball player. But in an even more engaging spot, Carl’s jr. turns the table on a pigeon when a construction worker drips onto the head of the urban dirty bird.
TONGUE IN CHEEK
As part of a series of outdoor ads for Brackman Bros. Bagels, sarcasm, wit and a play on words helped create a successful campaign. Most noticeable in the series was a billboard that portrayed an exchange between one Roy Rogers and a horse named Trigger. The scenario went: Roy: Another bagel, Trigger? Trigger: No, thanks, Roy, I’m stuffed.
NEW NFL RECRUITING TECHNIQUES
Eager to bring another All Star name to the roster of America’s Team, Chili’s Neighborhood Grill & Bar appealed directly to Deion Sanders when it offered him an “eat free at Chili’s” deal if he signed with Dallas. The print ad was exclusive only to “the Deion who plays football, basketball and does shoe commercials” and noted, “Offer not valid in San Francisco.”
A LITTLE SINCERITY GOES A LONG WAY
While the big guys may have big bucks to spend, one little 31-year-old independent used sincerity to create one of the year’s best. In a print series for Ponzio’s, a Philadelphia operation, authentic servers were used to reflect the honest-to-goodness service of Ponzio’s. Mini employee profiles, reminiscent of the Dewar’s campaign of years gone by, featured an employee’s name, start of employment, foods most recommended, favorite customers and most embarrassing moments. The approach was subtle but loaded with solid points about the restaurant.
RELATED ARTICLE: AND THE WINNER IS…
The Council on Hotel, Restaurant and Institution Education honored several of its members at its annual conference in August. Peter D’Souza, assistant professor at the University of Central Florida, received the Chef Herman Breithaupt Award for contributions to foodservice education. Michael Olsen, professor at Virginia Tech University, earned the Howard B. Meek Award for his contribution to hospitality education. Jim Pickworth and Margaret Shaw, associate professor and professor, respectively, at the University of Guelph, received the Van Nostrand Reinhold Award for Innovation in Teaching. The Stevenson Fletcher Achievement Award went to Robert Brymer, a professor at Florida State University. Pizam, a professor at the University of Central Florida, earned the John Wiley & Sons Award for outstanding scholarship and research in hospitality and tourism.
Dave Thomas, founder of Wendy’s International Inc., received the MUFSO Pioneer Award from Nation’s Restaurant News. Restaurant concept developer Philip Romano was selected as Innovator of the Year. Golden Chain Awards for 1995 went to Scott Beck and Saad Nadhir, chairman and vice chairman, respectively of Boston Chicken Inc.; Jamie Coulter, CEO of Lone Star Steakhouse & Saloon; Robert Earl, CEO, Planet Hollywood; Ted Fowler Jr., president and CEO, Golden Corral Corp.; Jeffrey O’Hara, president and COO, Darden Restaurants Inc.; and Joseph Fassler, president and COO, Restaurants Inc. Fowler was also selected as Operator of the Year by NRN’s readers. Ecolab Inc. and Rich Products Corp. received Supplier of the Year Awards at MUFSO.
Ralph Bayard Evans, owner-operator of Evans Farm Inn, McLean, Va., was named the Small Business Person of the Year by the Small Business Council of America.
McDonald’s Corp. was awarded the Fair Share Award by the NAACP for the chain’s support of black entrepreneurship.
The American Culinary Federation honored George O’Palenick, associate professor at Johnson & Wales University, as its Chef of the Year. Joe Amendola, senior vice president, Fessel International, was given ACF’s Chef Professionalism Award.
The Culinary Institute of America inducted restaurateur Joe Baum into its Hall of Fame.
At the fifth annual James Beard Awards, honorees included Rick Bayless, chef-owner, Frontera Grill and Topolobampo, Chicago, Chef of the Year, and Chuck Williams, founder of the Williams-Sonoma cookware retailer, lifetime Achievement.
Ruth Fertel, owner of Ruth’s Chris Steak House, received the IFMA Gold Plate Award for operator of the year at the National Restaurant Association show. Silver Plate Award winners included Kurt Fischer, Westin Hotels Resorts; Michael Ilitch, Little Caesars Pizza; John Lovelace, Dayton Hudson Corp.; Joy Miltenberger, Palm Beach County School District; Ed Noseworthy, Florida Hospital Medical Center; Chuck O’Dell Marriott Management Services; Nick Valenti, Restaurant Associates; and Susan Wilkie, San Diego State University.
NRN publisher James Doherty was one of seven winners of the IFMA Sparkplug Award. Others included Fred Fleischbein, Olson Communications; Greg Lee, Tyson Foods; Kent Walrack, Lyons Magnus; Kim Ewers, Land O’Lakes; John Guy, Food Marketing Concepts; and Linda Schwaba, Groen. IFMA President’s Awards went to Ira Blumenthal, Co-Opportunities, and Robert Fletcher, Anheuser-Busch.
The Roundtable for Women in Foodservice named Marilyn Carlson Nelson, vice chairman of Carlson Holdings Inc., its Woman of the Year.
Walter J. Conti, chairman and owner of Conti Cross Keys Inn, Doylestown, Pa., and the Pipersville Inn, Pipersville, Pa., was named the recipient of the Thad A. Eure Jr. Ambassador of Hospitality Award by the Educational Foundation of the NRA. Inducted into the College of Diplomates were the late Richard Benefield; Reuben Cordova, executive vice president of IFMA; Wolfgang Puck, chef and restaurateur; and Dave Thomas, founder and senior chairman of Wendy’s International.
Victor and Roland Gotti, owners of Ernie’s Restaurant, San Francisco, were honored as Fine Dining Legends by NRN.
Thirteen innovative restaurants were recognized by NRN in its first Hot Concepts! Celebration. They were Bruegger’s Bagel Bakery, Cafe Express, Cafe Tu Tu Tango, The Cheesecake Factory, Cozymers, Dive!, House of Blues, Maggiano’s Little Italy, Palomino Euro Bistro, Pasqua Coffee Bars, Rock Bottom Brewery, Saint Louis Bread Co. and Wolfgang Puck Cafe.
[TABULAR DATA OMITTED]RELATED ARTICLE: THE WILD SIDE
The unkindest cut of all: Earlier this year, vandals stole the 300-pound, 6-foot Big Boy statue from a Toledo, Ohio, Big Boy restaurant, dismembered the burger-bearing kid and dropped the pieces off around town. The fiberglass statue with the black pompadour, red-and-white checkered pants and suspenders had ushered customers through the doors of Big Boy restaurants across the world since the 1930s. Big Boy was chopped into seven pieces. His hamburger was intact, but his right ear and part of his belly were missing. A note, which read “Big Boy is Dead,” was attached to all but one of the severed limbs. A note on the other limb said: “Big Boy is almost dead. Never mind. Now he’s dead.” Each note was signed “Pimps of pimplyness.” The statue was worth about $4,000. Sgt. Richard Murphy called it “a sad, sad day for the city.”
RELATED ARTICLE: TOP GOVERNMENT ISSUES
Although the unstoppable Change — note the capital C as in Contract with America –promised by Newt and his troops at year’s beginning hit the skids by year’s end, operators made headway on some matters political and, as in years past, felt the brunt of others. The following is a list of the good, the bad and the ugly. You determine which is which.
They’re singing songs of love, but not for free…
Lawmakers in 21 states tuned into the industry’s frustration with music-licensing organizations, like BMI, ASCAP and SESAC, and passed measures expanding their rights against sometimes strong-armed tactics. Among other things, these new laws exempt operators from fees for background music from TVs and radios, prevent them from having to travel to New York to litigate disputes and force licensing groups to distribute lists of their holdings. Similar bills pending on Capitol Hill were upset later in the year when the National Licensed Beverage Association cut a deal with the music-licensing groups exempting restaurants and bars with less than 3,500 square feet from paying fees. Larger operators and lobbyists were enraged at the compromise, which they contend doesn’t address such important issues as how rates are set or how operators are treated by licenser representatives. As usual, negotiations continue.
We’ll get back to you … we promise!
Efforts to restore meal deductibility and to expand franchisee rights survived three days of often rancorous debate during the White House Conference on Small Business in June to become part of a 60-item wish list intended to guide President Clinton and Congress — when they finish all the budget stuff — in future lawmaking decisions.
I’m from the government, and I’m here to help …
The Internal Revenue Service and restaurateurs hammered out an agreement that could spare operators from audits and participating in the agency’s more onerous tip rate determination program. Called the tip reporting alternative commitment, TRAC, the new program gives foodservice operators the option of helping with the tip-tax education of employees and the collection of tip taxes or risking an audit.
We are the champions …
— In a say” public-relations move the National Restaurant Association in January spotlighted its support for welfare reform by presenting congressional leaders with a letter from 250 restaurant owners and chief executives promising to help local authorities provide jobs, training and advancement to welfare recipients. Throughout the year state restaurant associations, like Arizona, Colorado, Kentucky, North Carolina and Wisconsin, carried the ball by making their own pledges to state officials.
Do you mind if I smoke?
New York restaurateurs were inflamed when city lawmakers passed the Smoke-free Air Act, a measure prohibiting smoking in nearly all enclosed public places and some outdoor places, except for restaurants and bars with 35 seats or less. Maryland operators fared far better when their governor, in a last-minute concession, signed one of the nation’s most restrictive no-smoking measures, banning smoking in all indoor workplaces except restaurants, bars and taverns.
From the people who brought you the O.J. show …
More than 20 states put some kind of tort reform on the books, with Illinois, Indiana, New Jersey, North Carolina, North Dakota, Oklahoma, Oregon, Texas and Wisconsin passing more comprehensive measures. Among the changes were caps on punitive damages, ending joint and several liability and in some cases instituting loser-pays rules. The House and Senate each passed their own version of reform to be worked out at a later date in conference.
More? You want more?
After months of wrangling between lawmakers and business groups, Massachusetts lawmakers voted to raise the state’s minimum wage in two 50-cent increments to $4.75 on Jan. 1, 1996, and $5.25 by Jan. 1, 1997, making it one of the highest in the nation. President Clinton in late January had claimed he would seek to increase the federal minimum wage of $4.25 to give women and children living on it more buying power.
The ABC’s of BAC
Efforts to lower blood alcohol concentration levels to 0.08 were doused in 21 states, except Hawaii and Alabama. Meanwhile, Maine legislators killed a measure to decrease BAC levels to 0.05.
Theirs, mine, ours …
Iowa lawmakers passed a measure to abolish or amend elements of the Iowa Franchise Practices Act of 1992 — otherwise known as the Franchisee Bill of Rights — including provisions dealing with encroachment, duty of good faith, repurchase of assets, sourcing of supplies and the transfer, termination or nonrenewal of franchises.
What’s the beef?
A House subcommittee earlier this summer delayed for at least nine months the USDA’s already long-awaited tougher meat standards to allow more input from interest groups. Operators have been waiting for the new regs since former Secretary of Agriculture Mike Espy called for them following four E. coli-related deaths in 1993.
RELATED ARTICLE: THE WILD SIDE
The check WAS in the mail: While unpacking a delivery of basil from California, workers at the Hunt’s Point Market in The Bronx, N.Y., found instead $80 million worth of unsigned traveler’s checks, Brandweek reported. The unsigned checks, which are so good as cash, were being shipped from Citibank to a bank in South America and had been in containers at Kennedy Airport bearing shipping order numbers similar to those on a load of basil intended for Hunt’s Point.
RELATED ARTICLE: WHO’S IN
Robert Kaltenbach, president, Village Inn Richard Akam, president, Hooters of America Inc. Ronald McDougall, CEO, Brinker International Charles “Chuck” Porter, president, COO, Shoney’s Inc. William Leonard, president, Global Food and Support Services, Aramark Victor Foti, president, CEO, Western Sizzlin’ Clifford Hudson, CEO, and Dean Werries, chairman, Sonic Corp. Leonard Dreyer, chairman, Marie Callender’s Pie Shops Inc. Thomas Walters, president, Morton’s of Chicago Dick Holbrook, president, America’s Favorite Chicken Maris Laipenieks, president, Acapulco Restaurants Michael G. Richmond, president, CEO, PoFolks Restaurants Mike Hislop, president, COO, Il Fornacio America Corp. James B. Adamson, chairman, Flagstar Cos. Inc. Juergen Bartels, chairman, CEO, Westin Hotels George Miller, president, COO, Grandy’s Charles A. Lynch, CEO, Fresh Choice Inc. Dennis McCart, president, Shakey’s Inc. Ronald LaBorde, CEO, Piccadilly Cafeterias Inc. Debbie Passmore, president, Applebee’s division, Apple South Inc. Scott Bergren, president, Chevys Mexican Restaurants Ronald N. Magruder, president, COO, Cracker Barrel Old Country Store Inc. Robert Hill, president, CEO, Souper Salad Daniel R. Scoggin, chairman, president, CEO, Ground Round Restaurants Inc. Albert DiMarco, president, CEO, Checkers Drive-In Restaurants Inc. Stewart Owens, president, Bob Evans Farms Jackie Trujillo, chairman, Harman Management Corp. George Hill, CEO, McGuffey’s Restaurants Inc. Norman “Ned” Dean, president, CEO, Monterey Pasta Co. Nicholas Castaldo, president, Pollo Tropical Inc. John E. Curtis Jr., president, COO, Luby’s Cafeterias Inc. Robert Autry, chairman, and Steve McManus, CEO, Hardee’s Food Systems Inc. James O’Neal, chairman, CEO, PepsiCo Restaurants International Tim Ryan, president, Sizzler U.S.A. Andrew Lansing, president, COO, Levy Restaurants Robert Lowes, chairman, CEO, Burger King Robert Nugent, president, CEO, Foodmaker Kevin Relyea, CEO, Family Restaurants Inc. Jack McGregor, president, Chi-Chi’s
WHO’S OUT
Taylor Henry, CEO, Shoney’s Inc. Robert P. Colombo, president, CEO, Sfuzzi Inc. Mohammed “Mo” Iqbal, president, FRI Mexican restaurant div.(El Torito, Chi-Chi’s) Barry Krantz, co-president, Family Restaurants Inc. David Wachtel, president, CEO, Western Sizzlin’ Jerome J. Richardson, chairman, Flagstar Cos. Inc. Martin J. Culver, CEO, Fresh Choice Inc. Gary Wollerman, COO, Ruth’s Chris Steak House Clyde Culp, president, CEO, Long John Silver’s J. Daniel Holland, president, Papa John’s International Inc. Ray Barshick, president, CEO, Souper Salad Michael O’Donnell, chairman, president, CEO, Ground Round Restaurants Inc. Richard Postle, president, COO, Checkers Drive-In Restaurants, Inc. Malcolm Stein, president, Piccadilly Cafeterias Inc. Richard Cervera, chairman, Taco Cabana Inc.; also, later, out as president, co-CEO, House of Blues Donald Doyle, COO, Hardee’s Food Systems Inc. John Alderson, president, Steak and Ale Jack Goodall, to retire as chairman, CEO of Foodmaker on April 1, 1996
[TABULAR DATA OMITTED]COPYRIGHT 1995 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
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