The 2012 class of MenuMasters Award winners demonstrates there are many paths to success.

All of this year’s winners displayed a flair for innovation in product development — some by introducing items that carried them out of their comfort zones, and others by sticking to their knitting but with a few imaginative stitches worked in. Meanwhile, others recast their menus to enhance the customer experience.

Winners will be honored during the Nation’s Restaurant News MenuMasters Awards Ceremony May 5 at the Drake Hotel in Chicago. The MenuMasters Awards program, which marks its 15th anniversary this year, is sponsored by Ventura Foods. Winners are selected by NRN’s editorial board.

Learn more about this year’s winners and honorees:

Best Menu/Line Extension: Wendy's The "W"

Wendy’s played to its strengths as a quick-service hamburger chain with the launch of The “W,” a premium-but-not-too-premium burger. Full profile>> 

Best New Menu Item: Premium Beef Hot Dogs, Sonic, America’s Drive-In

Similarly, Sonic, America’s Drive-In built on the popularity of its existing Chili Cheese Coney by introducing a new line of premium beef hot dogs. Full profile>>

Best Menu Revamp: Buffalo Wild Wings

Buffalo Wild Wings understands how much consumers like to take control of their meals through customization. Full profile>>

Best Limited-Time Offer: Shake, Wrap & Roll!, Quaker Steak & Lube

Quaker Steak & Lube, a motor sports-themed chain that specializes in wings and beer, won the award for Limited Time Offer by matching food with cocktails. Full profile>>

Best Healthful Innovations: SkinnyLicious Menu, The Cheesecake Factory

The Cheesecake Factory, known for indulgent foods and large portion sizes, won the award for Healthful Innovations with its SkinnyLicious menu. Full profile>>

Menu Trendsetter: Bánh Mì Vietnamese Street Sandwich, Mama Fu's Asian House

This year’s Menu Trendsetter award went to the 18-unit Asian chain Mama Fu’s. The Austin, Texas-based brand took its business in a new direction by introducing a sandwich to the menu. Full profile>> 

Chef/Innovator: Stan Frankenthaler

This year’s MenuMasters Innovator, Stan Frankenthaler, vice president for global product innovation and culinary for Dunkin’ Brands, has worked to move Dunkin’ Donuts into the lunch daypart with new sandwiches as well as noncoffee drinks. Full profile>>

Hall of Fame: José Garces

Philadelphia-based restaurateur José Garces is being inducted into the MenuMasters Hall of Fame this year. Since opening his first restaurant, Amada, in Philadelphia in 2005, Garces has emerged as a nationally recognized celebrity chef and cookbook writer as well as the operator of 16 popular restaurants. Full profile>>

The International Franchise Association introduced new tools to help bridge the gap between banks and franchisees looking for financing, including a Franchise Lending Index and Franchise Lending Template, at its second annual Small Business Lending Summit last week in Washington, D.C.

The index will measure franchise credit access on a monthly basis and was created in partnership with BoeFly.com, an online lending marketplace. The new lending template, set to debut in the second quarter, was developed with the Consumers Bankers Association to ease communication and establish an easier way to handle due diligence between potential borrowers and lenders.

The moves were announced at last week’s summit, which was hosted by the IFA, The Financial Services Roundtable, Consumers Bankers Association and the National Association of Government Guaranteed Lenders. The groups came together to discuss the lending environment for small businesses, especially franchisees, during a time when growth has been stifled by lack of access to credit. In 2012, franchise businesses demand $11.72 billion in capital, but will receive $9.5 billion, creating an 18.6-percent shortfall, according to the IFA. The gap, although smaller than in 2011 when it hit 19.6 percent or in 2010 when it totaled 22.8 percent, is created by tighter credit standards, increased regulations and tax uncertainty, the association said.

“While we have seen an improvement in lending since we began this campaign, more education and outreach from the franchise industry will be critical to closing the gap between franchisors’ demand for growth and banks' ability to meet that demand,” said Steve Caldeira, president and chief executive of the IFA.

“With the tools and solutions we have developed, including the franchise lending template, IFA’s award-winning website smallbusinesslendinghub.com, and partnerships with companies such as BoeFly and Guidant Financial to connect better bank-ready franchise borrowers with lenders, we are on the right track,” he noted.

Franchise Lending Index

The IFA/BoeFly Franchise Lending Index delivers a monthly analysis of both proprietary data from the BoeFly lending marketplace and franchise loan data from the Small Business Administration. It is set to become a standard measure of franchise credit access based on volume of loans and lender interest in new loans. Set to a value of 100 based on data from January 2002, the index will show relative trends — a rise indicates expanding access to credit for franchise borrowers and a decline indicates contracting access to credit.

According to the index, franchise lending has steadily increased during the past 12 months, but still remains below the 100 mark. Franchise lending rose 10.6 percent between February 2011 and February 2012. During the past two years, the steepest increase in access to credit occurred from November 2010 to December 2010, when Small Business Administration lending rose as part of the American Recovery and Reinvention Act of 2009, which allotted $730 million in SBA loans.

“The index confirms that access to credit in the franchise industry has achieved relative stability, a non-trivial achievement in the wake of the financial crisis,” Mike Rozman, co-president at BoeFly, said.

Franchise Lending Template

The Consumers Bankers Association represents some of the largest financial institutions in retail banking, or banks servicing consumers and small businesses, and the group worked with the IFA to develop a tool to help the lending process, both for potential borrowers and lenders.

The template, expected to be available in the second quarter of the year, will also help lenders better understand the franchise business and what franchise lending entails, therefore encouraging more investment.

“It’s an opportunity to provide franchisees — all in one place, on one template — the questions and information banks want,” said Mark Luppi, chairman of the small business committee of the Consumers Bankers Association. Luppi oversees small business banking for HSBC in the U.S.

Contact Sarah Lockyer at sarah.lockyer@penton.com.
Follow her on Twitter: @slockyerNRN

Café Enterprises Inc., the parent of the 49-unit Fatz casual-dining chain, plans to launch two new expansion vehicles this summer.

The two concepts—a new casual-dining concept with a bar focus called Tavern 24 and an as-yet unnamed fast-casual brand—will debut in upstate South Carolina, the company said.

Earlier, Café Enterprises’ chief executive Jim Balis said the Taylors, S.C.-based company planned to open two new Tavern 24 locations and two fast-casual concepts by the end of the year. The company said Tavern 24 will feature “a laid-back sports bar environment without the loud audio.”

The menu will feature such selections as baked chicken wings, handmade pizza, salads, and Certified Angus Beef steaks and burgers, including a Beef Greek burger topped with goat cheese, mint and tzatziki sauce. Other dishes include a Cajun chicken sandwich, Asian chicken salad with vine-ripened grape tomatoes and seasoned edamame, St. Louis-style ribs, Calabash chicken—a Fatz specialty—and fresh, hand-cut salmon.

Balis had said if the Tavern 24 concept is successful, it could replace Fatz as its casual-dining growth vehicle. “It will be more economical,” he noted.

Balis said while the company expects to convert some Fatz locations to Tavern 24, not every Fatz store will be altered. “We’ll just improve upon those,” Balis said.

The fast-casual concept will offer a broad menu that features selections across all dayparts. The concept will offer a variety of fresh, locally sourced menu items including:

• Small bites, such as char-grilled seared shrimp with spicy Dijon dipping sauce

• Artisan salads, including spinach, onion and goat cheese salad, served with a warm vinaigrette

• Soups, such as carrot, rosemary and ginger soup

• Burgers, like fried egg, ham and cheeseburger made with Certified Angus Beef

• Sandwiches, including roasted turkey with cranberry aioli

• Center-of-the plate items, such as traditional shrimp and grits

• Side dishes, like Truffle Mac-N-Cheese

The fast-casual concept also will offer daily blackboard specials as well as grab-and-go sandwiches and salads.

Philadelphia-based private equity firm Milestone Partners has owned Café Enterprises since 2008. In addition to developing the two new growth concepts, Balis has been in the process of steering Fatz through a major revamp, including overhauling marketing, launching quarterly LTOs and upgrading menu ingredients.

All locations are company-owned and operated, but Café Enterprises expects to begin franchising in 2013, Balis said.

Café Enterprises is forecasting systemwide sales of about $110 million in 2012.

RELATED: FATZ says rebranding paying off

Contact Paul Frumkin at paul.frumkin@penton.com.

Brinker International posted Monday a 12 percent increase in third-quarter profit as it saw its new two-level steak platform and bar initiatives at Chili’s Grill & Bar help boost sales.

Dallas-based Brinker, which also owns and operates the Maggiano’s Little Italy casual-dining chain, reported earnings of $44.9 million, or 56 cents a share, in the quarter ended March 28—up from $40.2 million, or 45 cents a share, in the prior-year period. Revenue in the quarter rose to $742 million from $717.1 million in the year-earlier quarter, partially boosted by higher menu prices.

Same-store sales at company-owned Chili’s increased 4.6 percent in the third quarter and rose 3.9 percent at company-owned Maggiano’s. However, March traffic performance raised a red flag, with Chili's up by only 0.5 percent and Maggiano’s down by 3.4 percent.

“This is our fifth consecutive quarter of positive growth,” said Doug Brooks, Brinker’s chairman, president and chief executive, during a Monday call with analysts. “We have successively lapped positive sales from last year. Our top-line growth is a result of the changes we have made to our business to attract guests, providing everyday value, enhancing our menu and upgrading our atmosphere.”

Brooks cited continuation of the $20 Dinner for Two and Lunch Combo platforms at Chili’s, and the Classic Pasta and Marco’s Meal for Two programs at Maggiano’s. He also credited growth to third-quarter upgrades in Chili’s steaks, fajita meat and salads.

"The biggest news, though, is probably the success we’ve had with our steaks,” said Wyman Roberts, president of the Chili’s division. Chili’s introduced a two-level steak initiative, which offers a six-ounce top sirloin steak at a value price and a 10-ounce cut for customers who are less price-sensitive, toward the end of the second quarter.

“We were considerably under-indexed when compared with some of our benchmark competitors on steak, and we saw that as a big opportunity,” explained Roberts in the conference call.

Chili’s is now selling three times as many steaks as it was before the initiative, noted Roberts. “We’ve seen a significant number of lunch guests trading up to this item,” he said, which has increased the lunch check.

The March sluggishness in traffic reflected a segment-wide slowdown in casual dining during the past four to six weeks, Roberts said. “It looks like it leveled off, but we’re not exactly sure where it’s going from here.”

Guy Constant, Brinker’s chief financial officer, said that while increasing gas prices might be a contributor to the recent traffic softness, it would likely have no long-term impact on casual-dining traffic. "Historically, sometimes when the prices move very quickly you see a little bit of a wobble for a four- to six-week period,” he explained.

Constant added," It's hard to look and see any real pockets of weakness across the entire business. … Almost all the regions are performing really well; maybe not quite as well in the Northeast, but you know California has picked up really well for us, and Texas continues to be extremely strong for us.”

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Among other topics Brinker executives discussed in Monday’s third-quarter earnings call with analysts:

Alcohol Sales: Chili’s is continuing its focus on the bar, Roberts said. “Even though we index fairly high in our alcohol mix relative to other casual dining, we think we can take it even higher,” he said. “The bar is a real important area for us because the margins are good and it differentiates us from some of the fast-casual competitors in the space.” Chili’s has introduced more coaching and teaching for the bar teams, introduced new drinks and increased marketing and incentives, he said. “We’ve already seen our alcohol mix increase 30 basis points,” Roberts added.

Chili’s “Kitchen of the Future” Initiative: Constant said the new kitchen equipment is in about 360 Chili’s units, “with completion of all company-owned Chili’s restaurant installations still anticipated by the end of December.” The rollout of a new point-of-sale system is in 144 restaurants, Constant added, with full rollout expected by the end of December. With those two initiations, Constant said Brinker expects capital expenditures to be $120 million for the fiscal year.

Brinker California Meal Break Case: Brooks said the company was pleased with the “positive outcome” of the California Supreme Court ruling. “Basically the court decided that California employers have to provide breaks but they don’t have force employees to take them,” Brooks said.

Gift Card Breakage: Third-quarter financials included a one-time $5.2 million gift-card revenue reduction. “This reduction was the result of a change in the estimate of gift-card breakage, driven by an increase in redemption experience,” Constant said.

Commodity Costs: Cost of sales increased 30 basis points over the prior-year period, to 27.5 percent, driven by unfavorable commodity prices of 60 basis points, stemming from higher meat, oils and dairy costs, Constant said, partially offset by lower produce costs.

Team Service: Chili’s team service model, introduced a year ago, has increased average service staff compensation to more than $18 hour, Roberts said, “which allows us to attract a high-caliber team member.”

Brinker has 1,574 casual-dining units worldwide, with 820 company-owned Chili’s and 44 company-owned Maggiano’s in the United States, and 462 franchised Chili’s domestically. Internationally, Brinker has 248 units.

EARLIER: Chili's 'kitchen of the future' retrofit drives menu changes, sales

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

Wendy’s is introducing three new Signature Sides — macaroni and cheese, baked sweet potatoes and chili cheese fries — at its more than 6,000 U.S. restaurants.

The products are available a la carte for a recommended price of $2.49 each. The macaroni and cheese and baked sweet potatoes will be available for a limited time, but the chili cheese fries are a permanent menu addition, the quick-service chain’s parent, The Wendy’s Co., said.

“Consumers want new foods with exciting flavors and satisfying tastes,” said Gerard Lewis, Wendy’s senior vice president of product innovation. “Our new side items have high-integrity ingredients like cavatappi spiral noodles, Cheddar cheese and freshly baked sweet potatoes with buttery cinnamon topping. No one in our industry offers this unique variety of high-quality products.”

Menu innovation has been a major force behind Wendy’s turnaround efforts over the past two years, and its upgrade to its French fries predated the launch of Dave’s Hot ‘N Juicy Cheeseburger and the “W” cheeseburger. The chain launched Natural Cut Fries with Sea Salt in November 2010, and reportedly spent 80 percent of its advertising budget in December 2010 on its upgraded fries. The Wendy's Co. disclosed at an investor meeting that sales of the fries rose 16 percent in the first two months of their rollout.

Wendy’s competitors also have paid attention to side dishes in their recent menu and marketing moves. McDonald’s, for instance, ran a “You Want Fries With That” promotion last December, giving away a $25,000 sweepstakes grand prize and gift cards to people who described how much they loved McDonald’s fries on a special microsite. And as part of its recent menu revamp, Burger King has begun selling Crispy Chicken Strips and several dipping sauces.

Dublin, Ohio-based The Wendy’s Co. operates or franchises more than 6,500 locations in the United States and 26 foreign markets.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

Dunkin’ Donuts continues to move forward with its goal to double its number of units in the United States with the signing of multiple deals in Texas.

Parent company Dunkin’ Brands Inc. said it signed three franchise groups to develop a total of 25 restaurants in San Antonio and Houston over the next six years:

• 521 Interests Ltd, led by David Greenberg and Stephen David, has agreed to develop 16 restaurants in Houston between 2013 and 2018.

• Rick Molina and Guy Ellison committed to developing five restaurants in San Antonio between 2012 and 2016.

• Kishore Samtani has signed an agreement to open four restaurants in a different section of San Antonio between 2013 and 2016.

“We believe these new franchisees will cultivate lasting customer relationships and become an integral part of the San Antonio and Houston communities,” Gran Benson, vice president of development for Dunkin’ Brands, said in a statement.

Those deals fall on the heels of a limited partnership agreement announced last month with the Jerry Jones family, which owns the Dallas Cowboys, and former Cowboys quarterback Troy Aikman to open at least 50 Dunkin’ Donut restaurants in the Dallas/Fort Worth area over the next five years.

Dunkin’ Donuts also is the official coffee of the football team and already has a limited presence in both Dallas and Houston.

New Houston franchisee Stephen David, a principal in 521 Industries, is a former chief operating officer of casual-dining chain Buffalo Wild Wings and vice president of the operating company for limited-service chicken chain Kenny Rogers Roasters. He’s currently president and chief executive of Aloha Restaurant Group, which operates casual dining sports restaurants in Houston and Austin.

“We’re obviously very excited about the opportunity,” he said, adding that he’s currently scouting for sites and plans to hire someone to handle daily operations.

David said his business partner, David Greenberg, in 2010 had secured rights to open Dunkin’ Donuts in nontraditional locations in Houston but didn’t end up developing them. Then, in 2011, the two men started pursuing a broader territory.

“We got a terrific territory — downtown, midtown and one of the largest medical centers in the world,” David said. He also noted that although the development deal is for 16 locations over seven years, he thinks that the territory will be able to support as much as three times that amount over time.

Kishore Samtani, one of the new franchisees for San Antonio, also owns several liquor stores and hotels in north central San Antonio, where his Dunkin’ Donuts units will be located. He said that although he is not required to open his first unit until 2013, he hopes to open his first one this fall.

“We’re getting close to finalizing on a couple of locations,” Samtani said, adding that he plans to expand beyond his current four-restaurant agreement. “We’d like to grow farther with Dunkin’. I lived on the East Coast for a number of years, and Dunkin’ was a place that I frequented quite a bit. It’s always been a brand that’s interested me, and it’s been absent from our market for awhile.”

Dunkin’ Brands officials have previously stated that their expansion strategy includes signing on multiple franchises in adjacent territories within a single market, as they have done with the San Antonio franchisees, in order to accelerate market penetration.

Canton, Mass.-based Dunkin’ Brands franchised 7,015 units in the united states as of the end of the last quarter, ended December 31, 2011. The company will announce its latest quarterly results on Thursday.

RELATED: MenuMasters Innovator of the Year, Dunkin’ Brands’ vice president for global product innovation and culinary Stan Frankenthaler

Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary

The National Labor Relations Board ruled that MikLin Enterprises Inc., a 10-unit Jimmy John’s franchisee in the Minneapolis-St. Paul area, committed unfair labor practices against members of the Jimmy John’s Workers Union, an organization comprising several of its employees.

The Jimmy John’s union is supported by the Industrial Workers of the World, or IWW.

Administrative law judge Arthur Amchan ruled Friday that MikLin violated the National Labor Relations Act by firing six employees and issuing written warnings to three others on March 20, 2011, after those workers pressed the franchisee for paid sick leave and posted about 3,000 posters calling attention to MikLin’s sick-leave policy.

The poster featured two pictures of Jimmy John’s sandwiches side by side with a caption reading: “Your sandwich made by a healthy Jimmy John’s worker. Your sandwich made by a sick Jimmy John’s worker. Can’t tell the difference? That’s too bad, because Jimmy John’s workers don’t get paid sick days. Shoot, we can’t even call in sick.”

MikLin Enterprises owners Mike and Rob Mulligan argued in court that the National Labor Relations Act did not protect the union members’ actions because they showed disloyalty to their employer and demonstrated a malicious intent to disparage Jimmy John’s products and MikLin’s reputation.

The NLRB disagreed, however, ruling that the “sick day” posters were sufficiently connected to a labor dispute, and thus protected by the act. Not only were the posters connected to the issue of paid sick leave, the NLRB noted, but they also did not stray from the truth so egregiously as to lose the act’s protection.

“There is no question that if employees posted or handed out flyers asking the public not to patronize their employer because they did not get paid sick leave, such conduct would be protected,” Amchan wrote in his decision. “The postings were clearly tied to a labor dispute. … The statement, ‘Shoot, we can’t even call in sick,’ is not a sufficient departure from the truth to render the posters unprotected. … The union’s first factual assertion, that Jimmy John’s employees do not get paid sick days, is true, at least with regard to MikLin.”

A call to MikLin co-owner Mike Mulligan was not returned by press time.

The company’s justification for firing six workers was disclosed in the termination notice of union member Micah Buckley-Farley, which the IWW entered as evidence in the hearing before the NLRB in February.

“The widespread malicious distribution of these posters on March 20 was clearly intended to harm the company and to injure its business and reputation and that of the owners,” the termination notice read. “Its malicious intent is underscored by its failure to identify MikLin Enterprises and its calculated blanket indictment of all other Jimmy John’s stores in the country, none of which has any kind of dispute with the IWW. You clearly intended to damage not only the Jimmy John’s brand image of all franchisees, but that of the franchisor organization as well.”

RELATED: California Supreme Court: Restaurants must provide, not ensure employee breaks

The termination notices for Buckley-Farley and Davis Ritsema also noted their role in distributing the union’s press release, which included an image of the “sick day” poster, as grounds for their firing, according to Amchan’s decision. The NLRB also ruled that MikLin officials violated the act by removing the union’s “sick day” poster from its property and from nearby posts.

The board dismissed the claim that MikLin disparaged union supporters, with one exception. A restaurant manager for MikLin was found in violation of the National Labor Relations Act for encouraging members of an anti-union group to harass union member David Boehnke by posting Boehnke’s cell phone number on their Facebook group page and telling people to text him indiscriminately.

The board dismissed the charge that Mike Mulligan illegally interrogated union supporter Buckley-Farley.

The board has ordered MikLin to reinstate the six fired workers and to give them back pay. Union members celebrated the judge’s decision but noted that a lengthy appeal process could delay the fired workers' reinstatement and restitution.

“It has already been over a year since we were illegally fired for telling the truth,” Erik Forman, one of the six fired workers, said in a statement. “For all the hard work and dedication of the NLRB’s civil servants, employers like Jimmy John’s prefer to break the law and drag cases through the courts for years, rather than let workers exercise their right to win fair pay, sick days and respect through union organization.”

Champaign, Ill.-based Jimmy John’s has more than 1,400 restaurants in the United States.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

Pinkberry is moving into India for the first time in a move that will offer a “sizeable opportunity” as the frozen yogurt chain ramps up international growth, company officials said Monday.

The Los Angeles-based company has signed a franchise agreement with Mumbai-based JMS Corporation Pvt. Ltd., a franchise group that also operates other U.S. brands, such as California Pizza Kitchen, Trader Vic’s and Hard Rock Café in India. The franchise group will open its first Pinkberry in Mumbai later this year.

Ron Graves, Pinkberry’s chief executive, said India offers the chain “a sizeable opportunity over time.” He added, “India is an attractive market given there are over a billion people there.” The company is not releasing details about the structure of the deal or JMS’s plans for growing the brand Graves said.

Pinkberry has been aggressively growing overseas during the past few years, and India is the 18th country in which it will be present. The 180-unit chain saw the opening of about 70 locations in 2011, about half of which were domestic and half international.

The first international location for Pinkberry opened in Kuwait in 2009, and the franchise group there operates eight locations. Most of the chain’s international growth has been across the Middle East, but Peru is also a hot market for Pinkberry, Graves said. The franchisee there has eight locations open after moving into that country just last year.

Some analysts contend that India will soon surpass China as a potential growth market for restaurants companies.

Starbucks is another company with sights set on India. The Seattle-based coffeehouse giant plans to have units open in Mumbai and Delhi before the end of the year in a joint-venture partnership with Tata Global Beverages.

Howard Schultz, Starbucks Corp.’s chair, president and chief executive, serves on Pinkberry’s board, and he co-founded the Seattle-based venture capital firm Maveron LLC, which made a $27.5 million investment in Pinkberry in 2007.

Graves, however, said Starbucks’ plan for India was not a factor for Pinkberry. The key was finding the right franchise partner for the yogurt brand, Graves said — particularly in a complex market like India.

Pinkberry has yet to find the right franchise partner for China, another attractive market that can be tricky, Graves said. “I think that will be a stumbling block for many companies planning to move into China,” he noted. “It’s all about who you partner with.”

Domestic growth for Pinkberry will also continue, according to Graves. The chain has units in 19 states, and franchise growth across the U.S. will focus on both filling existing markets and moving into new cities.

Graves declined to project how many locations are planned in the U.S. this year, but he said a “small fraction” of them would be company-operated locations in Southern California.

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout

Pollo Tropical, the subsidiary of Fiesta Restaurant Group, has named Danny Meisenheimer to the newly created position of chief brand officer, the company said Monday.

Meisenheimer will oversee marketing, communications, research and development for the 122-unit, Miami-based chain. He was most recently president of San Antonio-based Souper Salad. Prior to that, he led marketing efforts at Pizza Inn Inc. of The Colony, Texas, and worked with Furr’s Restaurant Group, which is based in Plano, Texas.

Meisenheimer will report to Jim Tunnessen, Pollo Tropical’s chief operating officer.

“We have enjoyed 11 consecutive quarters of enviable positive comparable store sales gains," Tunnessen said. "We must now ready our system for future new market and new franchise expansion. Bringing someone of Danny’s caliber, with senior-level operations and marketing experience, will help us meet that challenge.”

Pollo Tropical owns and operates about 90 locations in Florida and Georgia and has 32 franchised units in the Bahamas, Costa Rica, Ecuador, Honduras, Puerto Rico, Trinidad and Venezuela.

Pollo Tropical’s parent company, Fiesta Restaurant Group Inc., also owns the Taco Cabana brand and is a wholly owned subsidiary of Carrols Restaurant Group Inc. of Syracuse, N.Y.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

Korean food in the United States has long languished in obscurity while the cuisine of its neighbors, China and Japan, have been active players in the development of the modern American pantry. The reason Korean-Americans often cite for the mainstream's rejection of their cuisine is the prominence of spicy, garlicky pickled vegetables known as kimchi — but it’s that very ingredient that chefs are now embracing across the country.

Kimchi is usually part of the panchan, or side dishes, served in a Korean meal, although Koreans also cook with it — and so do many American chefs.

Applications range from its use as a seasoning in the local white soybean soup with kimchi, sweet potato, sushi rice-and-mackerel croquette for $14 at Elements in Princeton, N.J., to a component in the $16 fluke crudo at Kelly Liken in Vail, Colo. In the latter dish, pickled beet kimchi tops the fish, which is accompanied by ginger-lemongrass sorbet and dressed in charred scallion vinaigrette.

Mat Clauser, executive chef of the newly opened Swift’s Attic in Austin, Texas, said the reason for using kimchi is simple: “We think kimchi tastes delicious.”

“We will always have two to four types of kimchi on hand, typically always a traditional, spicy red kimchi [chile flake, ginger, soy sauce, salt, sugar, carrots and scallions] with napa cabbage, and one traditional white kimchi [without chile] with daikon," he said. "The other vegetables will be done in either a red or white style and we feature predominantly local vegetables.”

Clauser added that the fact that kimchi is fermented means it has idiosyncrasies that he, as a chef, enjoys. “It changes with time and mood, and it is a lot of fun to make, to check on and to tweak over time,” he said.

Bob Cook, sous chef at Cypress in Charleston, S.C., has been making his own kimchi in-house for about four years. He puts it on items such as a $12 tuna tartare with kimchi, cucumbers, carrots, cilantro and citrus soy on flatbread or $12 crispy pork belly with Korean mustard and kimchi fritters. He also puts it on his $8 bánh mì sandwiches.

Cook said one of the nice things about kimchi is that you can use virtually any vegetable to make it.

Daniel Campbell, executive chef at Tallula Wine Bar & Bistro in Birmingham, Mich., makes Brussels sprouts into kimchi, which he uses in a $30 dish of roasted scallops and pork belly.

John Caputo, chef of Bin 36

in Chicago, accompanies seared halibut in ginger-shrimp broth with baby bok choy and pork belly and cabbage kimchi potstickers. That dish is $16.

Anthony Meidenbauer, chef at Holsteins Shakes and Buns at The Cosmopolitan hotel in Las Vegas, combines kimchi with kalbi, a Korean short rib preparation, in a $14 quesadilla that also has asadero cheese and chile mayonnaise.

He also makes a Korean-inspired hamburger called “Bull” Gogi, a play on the Korean barbecue dish bulgogi. The $16.50 dish is made with beef marinated in sweet soy and topped with kalbi glaze, chile mayonnaise, a fried egg and kimchi slaw.

For the slaw, Meidenbauer combines julienne kimchi, carrot, red onion and napa cabbage with chopped cilantro and green onion. He dresses that in lime juice and seasons it with salt and pepper. “The natural juice of the kimchi along with the lime juice makes the dressing for the slaw. It goes great with grilled meats,” he said.

Other kimchi dishes across the country:

• TAG Raw Bar in Denver: Haricots verts with kimchi, garlic chives, sesame soy and hijiki, $4 and kangaroo loin tartare with kimchi, rice crackers and truffle oil, $15

• Dragonfly in New York City: Kimchi tempura with green curry-nori yogurt, $12.95

• Burlap in San Diego: Australian A-7 Kobe beef with seared foie gras, charred bok choy and peach kimchi purée, $75

• The Dutch in Miami Beach, Fla.: Maine sea scallops with kimchi fried rice, $33

• Rosa Mexicano, which has 12 units based in New York City: Mexican kimchi taco with huitlacoche, silken tofu, pickled cabbage purée, toasted pumpkin seeds and Poc Chuc salsa, 2 for $11

• Street in Los Angeles: Chili-roasted hot dog with kimchi kraut, miso mustard and Sriracha pickled onions, $6

Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary

IHOP has rolled out a line of bottled syrups that is now available in grocery and other retail stores across the country, the family-dining chain announced Tuesday.

The IHOP at HOME syrup line includes some of the brand’s most iconic flavors, including Original maple, as well as Rooty Tooty Fresh N’ Fruity in both strawberry and blueberry varieties. The line also includes Lite and Sugar Free versions, and is produced by Sorbee International LLC, a subsidiary of Werther Partners LLC.

The products are available now in Walmart stores nationwide, as well as at some regional retailers, such as Winn Dixie, Bi-Lo, Bashas and Fred’s, the company said.

The move marks a big step in the Glendale, Calif.-based company’s plan to build a consumer packaged goods, or CPG, platform, an increasingly common trend in the industry as restaurants look for ways to build brand awareness and develop ancillary revenue streams.

Tanya Valenzuela, spokeswoman for IHOP, said the products are not meant to substitute the IHOP restaurant experience. “Our products satisfy consumers’ cravings like no other,” she said. “The new syrups give consumers an additional way to enjoy a taste of IHOP in between visits, and it allows us to forge a deeper connection with our guests.”

The suggested retail price for the Original, Lite and Sugar Free varieties (24 oz bottle) is $3.99; the suggested retail price for the Rooty Tooty Fresh ‘N Fruity Strawberry and Rooty Tooty Fresh ‘N Fruity Blueberry varieties (12 oz bottle) is $2.99.

IHOP began launching branded retail products in 2010, beginning with a Rooty Tooty Fresh N’ Fruity flavored lip gloss and a toy version of the chain’s “never empty coffee pot.” Earlier this year, IHOP introduced a line of frozen meals, such as French Toast Stuffed Pastries, Griddle ‘n’ Sausage Wraps and Omelet Crispers.

Valenzuela, however, said IHOP has no current plans for additional retail products.

Other restaurant chains have had success with similar CPG platforms. For example, Jamba Inc., the Emeryville, Calif.-based parent to Jamba Juice, sells a home smoothie kit in grocery stores as well as other retail products. Jamba officials have projected the chain’s licensed consumer packaged goods revenue will almost triple to $3 million in 2012.

In addition, Starbucks is developing what the Seattle-based coffeehouse chain sees as several-billion-dollar businesses within its CPG channels, including the VIA Ready Brew instant coffee, as well as K Cups, and the recently acquired Evolution Fresh bottled juice products.

IHOP, otherwise known as the International House of Pancakes LLC, is a subsidiary of Glendale, Calif.-based DineEquity Inc. The family-dining chain includes 1,550 locations worldwide.

Watch a promotional video for the new syrup line

EARLIER: DineEquity tweaks value strategy at Applebee's, IHOP

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout

Buffalo Wild Wings Inc. reported gains in first-quarter same-store sales and earnings based on the strength of traffic increases, solid sales at new locations and at units acquired from franchisees last year.

For the March 25-ended first quarter, the company reported net income of $18.2 million, or 98 cents per share, up 22.8 percent from $14.9 million, or 81 cents per share, a year earlier. Revenue increased 37.9 percent to $251.1 million, reflecting a same-store sales gain of 9.2 percent at company-operated restaurants and 7.3 percent at franchised locations.

“We are pleased with our solid start in 2012,” said Sally Smith, the company’s president and chief executive. “The combination of strong same-store sales, new restaurant performance and sales from franchised restaurants acquired in 2011 fueled our substantial revenue increase. We continued to invest in the infrastructure necessary to support our expansion in North America and internationally. Through leveraging expenses at the restaurant level, we limited the impact of higher wing costs.”

Restaurant analyst David Tarantino at Robert W. Baird & Co. estimated in a research note that Buffalo Wild Wings' 9.2-percent jump in same-store sales likely included 1.8 percent of increased menu pricing and an estimated 7.4 percent of traffic gains. He also noted that the company previously indicated first-quarter same-store sales had been running nearly 13 percent positive through the first six weeks of the period, including an estimated 3-percent benefit from greater redemption of gift cards.

Smith added that through the first four weeks of the second quarter, same-store sales are up 6.7 percent at company-operated restaurants and up 6.6 percent at franchised units.

Minneapolis-based Buffalo Wild Wings operates 319 restaurants and franchises another 498 locations in 46 states and Canada.

RELATED: Wing chains reveal post-peak strategies

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

International Franchise Association officials voiced their disappointment Tuesday after the U.S. Senate failed to pass a resolution seeking to overturn the National Labor Relations Board’s rule to abbreviate the time frame allowed for union elections.

But despite the loss in the Senate, opponents of the rule say the battle over “ambush” elections now will shift to the courts.

Senators rejected a joint resolution, S.J. Res. 36, by a bipartisan vote of 54 to 45 that would have nullified a regulation passed late last year by the NLRB. The resolution was sponsored by Mike Enzi, R-Wyo.

The new rule, which is scheduled to take effect at the end of this month, will speed up union elections from an average of 38 days after a petition to unionize is filed to as little as 10 days. Opponents say the agency overstepped its authority by passing the rule.

“We see the vote today as disappointing,” said Jay Perron, vice president of government relations and public policy of the International Franchise Association. “But we knew it was going to be a tough vote to get passed.”

President Barack Obama’s last minute threat to veto any legislation attempting to override the rule also had a dampening effect on the vote, observers said.

“It became very political,” said Angelo Amador, vice president of labor and workforce policy for the National Restaurant Association.

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Rob Green, executive director for the National Council of Chain Restaurants, said if the resolution had been passed “it would have sent a strong signal to the NLRB that they have been overreaching. But the education process continues and we’ve talked with a large number of lawmakers about NLRB’s ongoing activities.”

Proponents of the agency’s rule change maintain that it would streamline the election process by reducing delays in union elections. NLRB chairman Mark Pearce had said earlier that the current rule “is laden with unnecessary delays. It seeks to avoid multiple and unnecessary appeals in union elections, and does away with unnecessary waiting periods.”

Organizations like the IFA, National Council of Chain Restaurants and the National Restaurant Association have been urging their members to contact their Senators and ask them to oppose the NLRB rule. The NRA, in fact, made it one of its four priority issues last week when restaurant operators and executives gathered in Washington for the association’s Public Affairs Conference, when industry members visit Capitol Hill to lobby their lawmakers.

Late last year the U.S. House of Representatives passed The Workforce Democracy and Fairness Act, or H.R. 3094, by a vote of 234 to 188 that would override the NLRB’s ruling. With the recent Senate vote, though, that measure is “dead on arrival,” Perron said.

However, Green said, “the next fight is going to be in the courts. The litigation is ongoing.”

For example, earlier in April a federal judge in South Carolina ruled against the NLRB’s regulation that would have required companies to hang posters notifying employees of their right to unionize. Other litigation is addressing the right to form micro-unions, which theoretically could contain as few as two employees.

But while the associations see the Senate vote today as being a defeat, they maintain that some progress has been made. “We have talked to a large number of lawmakers about the NLRB’s ongoing activities,” Green said. “So we will just continue to tell our story. The education process continues.”

Contact Paul Frumkin at paul.frumkin@penton.com.

Burger King plans to complete the rollout of Cinnabon's Minibon product to more than 7,000 restaurants across the United States by September, the company said Tuesday.

Minibons, a miniature version of Cinnabon’s signature cinnamon roll, have been tested by Burger King in various markets over the past several months, including Charlotte, N.C.; Chicago; Miami; New Jersey and New York.

Recommended prices for the item range from $1.79 to $1.99.

Cinnabon products have also appeared on other restaurant menus, including Taco Bell's. Earlier this year, Taco Bell launched a new breakfast platform in about 800 units that included a proprietary Cinnabon Delights item, three small cream-filled mini donuts rolled in cinnamon sugar.

Cinnabon president Kat Cole said more partnerships are coming, with the goal of building brand awareness. “Our growth strategy over the next several years is aggressive and includes growth in franchising as well as licensing in other channels,” she said in a statement.

“Our guests throughout the U.S. want to be able to treat themselves to our products, and serving our products in Burger King restaurants helps us serve those fans,” Cole added. “We’re excited to have the opportunity to celebrate the Minibon roll’s 25th birthday by expanding its availability across the country.”

Cinnabon, which is owned by Atlanta-based Focus Brands, has more than 800 franchised locations, as well as more than 100 Cinnabon Express outlets located inside Schlotzsky’s delis. Schlotzsky’s is a sister brand also owned and franchised by Focus Brands.

For Burger King, the menu addition is part of an ongoing brand refresh by parent company 3G Capital Management, which acquired the chain in October 2010.

Earlier this month, Burger King unveiled the largest menu expansion in its 58-year history with the addition of new premium salads, snack wraps, chicken strips, smoothies and frappe drinks.

Although many of the items are similar to those found at competitors like McDonald’s, Burger King officials said they aim to establish the Miami-based chain as offering “best in class” products.

“From a tasty breakfast treat to an afternoon snack, the Minibon roll is a best-in-class product that fits in well with our newly expanded menu and will provide our guests with yet another reason to come in to their local Burger King restaurant,” Alex Macedo, Burger King Corp.’s senior vice president of marketing for North America, said in a statement.

Burger King operates and franchises more than 12,500 restaurants worldwide.

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout

Panera Bread Co. posted Tuesday a 25.7-percent increase in first-quarter profit, crediting a 6.3 percent gain in systemwide same-store sales.

The St. Louis, Mo.-based company reported net income of $41.2 million, or $1.40 per share, for the quarter ended March 27, up from $32.8 million, or $1.09 per share, in the same period last year. Revenue rose 18.1 percent, to $498.6 million from $422.1 million in the year-ago quarter.

"We are very pleased with both our strong 7.5-percent comparable store sales growth and 28-percent earnings growth in the first quarter, said Bill Moreton, Panera’s president and co-chief executive, in a prepared statement. "This marks the eighth out of the last nine quarters that our earnings have grown at a rate of 20 percent or greater.”

The company scheduled an earnings call with analysts for Wednesday morning.

Same-store sales increased 7.5 percent at company-owned units in the quarter and 5.2 percent at franchised stores. The same-store sales increases at company-owned restaurants included year-over-year transaction growth of 2.1 percent and average check increases of 5.4 percent. Average check growth included price increases of about 3.5 percent and a positive mix impact of about 1.9 percent, the company added.

During the first quarter, Panera opened seven new bakery-cafes, and its franchisees opened 15 new units, bringing its total to 1,562 stores as of March 27.

Average weekly sales for company-owned new units through the first quarter were $51,331 compared to $49,551 in the same period last year. Average weekly sales for new franchised stores were $47,982 compared to $45,532 in the year-earlier quarter.

In guidance, Moreton said Panera is targeting “full-year fiscal 2012 earnings slightly above the high end of [its] long-term range of 15 percent to 20 percent annual earnings growth.”

The company said it plans to open between 115 and 120 new units this fiscal year.

Panera owns and franchises bakery cafes under the Panera Bread, St. Louis Bread Co. and Paradise Bakery & Café banners.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

Buffalo Wild Wings increased its first-quarter profit nearly 23 percent, but the company will stay aggressive with growth plans and cost management measures in order to hit its 2012 earnings growth target amid high chicken wing inflation, brand officials said.

The brand’s immediate play in the short term will be a small menu price increase.

Chicken wing costs are projected to remain high throughout the year — the average commodity price through April and May is running $1.92 per pound, compared with $1.02 per pound last year, Buffalo Wild Wings officials said during Tuesday’s first-quarter earnings call. The brand will increase the promotional price of Wing Tuesdays to 50 cents per wing, up slightly from the 45-cent price in place at most of its 832 restaurants.

“Our strategy in the past has been to take small price increases as we roll out menus,” said chief executive Sally Smith. “We do this with a menu rolling out in July this year, as opposed to September. Wing Tuesday is an easier thing to adjust to. But we don’t do that lightly. We waited until we saw that we could sustain it.”

The chain has hiked menu prices between 1 percent and 3 percent over the past several years, leaving some room for another small price increase in July, she said.

“We had a number of company and franchise markets that were at 50 cents already,” Smith said. “We’ve begun rolling that out, through mid to late May, but so far in markets where it has already been 50 cents, it hasn’t been a problem.”

Chief financial officer Mary Twinem said the adjustment of Wing Tuesdays’ price, combined with small hikes in food and alcohol prices in previous quarters, would yield a menu price increase of 1.8 percent for the second quarter, which would grow to about 2.1 percent in the third quarter. She added that the rest of Buffalo Wild Wings’ commodities basket was contracted out to a 4-percent increase over last year’s cost of goods sold.

RELATED: Wing chains reveal post-peak strategies

From ‘More March’ to more marketing

Buffalo Wild Wings also increased its media buying in the first quarter and ran its “More March” branding campaign for college basketball’s postseason. The increased marketing spending compared with last year would continue in the second quarter with national radio, Smith said.

“We’re always looking at how we spend our advertising dollars, be it TV, radio or digital,” Smith said. “We do have the ability this year to buy some national radio, so we will have coverage in all our markets, whereas it was 160 markets last year at this time, so there are some efficiencies there.”

A new TV commercial debuted this week to kick off the chain’s new “Iron Fan” campaign.

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The contribution rate to the chain’s marketing fund remains 3.5 percent of sales at the store level, the executives said, adding that the incremental spending is coming from increased sales and unit growth kicking more total dollars into the company’s coffers.

Same-store sales rose 9.2 percent at company-owned units and 7.3 percent at franchised locations in the first quarter.

“The increase [in media spending] in our normal promotional periods is pretty similar to our same-store sales increase,” Smith said. “We haven’t done anything dramatically different — maybe broadened a week here and there — but the ability to buy national really helps.”

Growth plans build momentum

The chain plans to open 90 net locations in North America in 2012, Twinem said. Two new locations featuring a new prototype design are expected to open before year-end in San Diego and Cincinnati. Some remodels also will include the new designs, as well as updated graphics and in-store branding.

“We have a new design that will ensure we are providing the ultimate gathering destination and sports-viewing experience,” Smith said. “We want to recreate the energy of a stadium on game day every day in our restaurants.”

During the first quarter, Buffalo Wild Wings remodeled three corporate locations and franchisees remodeled three units. Remodeling plans for 2012 call for 11 more company-owned restaurants and 21 more franchised locations to be refurbished.

Though an acquisition of 15 franchised locations last November was accretive to first-quarter results, Buffalo Wild Wings has no urgent need to purchase more franchised restaurants or another concept with its free cash flow, Smith said.

“We’re looking at it from a really long-term standpoint,” she said. “Is there something out there that’s small and a great concept, but doesn’t have the ability to roll it out? We have the infrastructure here to be able to do that.”

Any acquisition target would have to be able to work nationwide as a franchise concept, she noted. “We’ve received some information from a variety of sources on what to look for,” she said, “so our goal through this year is to take a look at what’s out there.”

Smith added that any concept the brand purchases likely would not compete directly in the wings, beer and sports space with Buffalo Wild Wings, but could occupy adjacent real estate and broaden the company’s base of customers.

“As we refine the plan, it probably won’t be quick-service and probably won’t be fine-dining,” Smith said. “It will be somewhere in that fast-casual or casual-dining niche, something that’s unique. We haven’t found it yet, but it won’t be a consolidation play.”

Minneapolis-based Buffalo Wild Wings operates 327 corporate restaurants and franchises another 505 locations in 48 states and Canada.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

Panera Bread Co.’s new co-chief executives on Wednesday said recent C-suite changes will have minimal effect on the bakery-café chain’s performance.

Ron Shaich, Panera’s chairman, and Bill Moreton, the company president, said during a call to discuss first-quarter earnings with analysts that their new co-chief executive titles, assumed in March, formalized their working relationship at the St. Louis-based company.

That co-CEO move, as well as the resignations of Panera’s chief financial officer and its chief operating officer, had raised eyebrows on Wall Street.

“We’ve gotten a number of questions and, frankly, heard a few rumors,” Moreton said. “To me, this is simply formalizing the partnership that Ron and I have had over the last 12 months of running Panera.

“Ron has been focused on the vision of how Panera best competes, both now and in the future,” Moreton continued. “He brings his 30 years of experience in founding and running our company and his innate sense of the consumer and consumer trends to making sure Panera keeps out front of our competition. At the same time, I have been focused on the day-to-day business of running Panera.”

Moreton also assured analysts that other recent executive changes offered career opportunities for Panera’s team.

In mid-April, John Maguire resigned, effective May 31, as chief operating officer to become chief executive of Friendly’s Ice Cream LLC, which emerged earlier this year from bankruptcy. Maguire will be succeeded by Charles Chapman III, who is currently Panera’s executive vice president of development and licensing.

Earlier in the month, Panera named Thomas Patrick Kelly as interim chief financial officer while the company continues to search for a permanent successor to Jeff Kim, who resigned in March to join IAC/InterActive Corp.

Shaich, who founded Panera and in May 2010 transitioned to executive chair, said he did so to “get a break from the unrelenting pace of 30 years of running this company and managing all of our constituent relationships.”

That break, Shaich said, helped re-energized him and over the past 12 months he has been back working on innovation and technology projects.

“Ultimately, we and the board came to conclude co-CEOs was the best way to reflect our actual roles,” Shaich said. “The change in titles we executed last month was simply a reflection of that reality.”

Shaich said he will focus on how Panera innovates food products and café experience in a role he likened to “chief product or competitive officer” and Moreton will concentrate on business and processes in a role similar to “chief corporate officer.”

“Together, we bring more than either of us can bring alone to the task,” Shaich said. “In our view, and I think in the view of the board, one plus one does equal three for Panera shareholders.”

Moreton added: “I want Ron here. It is a blessing to both me personally and to Panera. It is great to have someone who has been my friend and mentor for 15 years share the responsibilities for running our great company.”

Shaich said the 1,562-unit Panera has performed well under Moreton.

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On Tuesday, Panera Bread Co. posted a 25.7-percent increase in first-quarter profit, crediting a 6.3 percent gain in systemwide same-store sales.

Other topics the executives discussed in Wednesday’s analyst call were:

Drive-thru expansion: Panera plans to add drive-thrus to about 80 new or retrofitted stores this year. The company ended 2011 with 119 drive-thrus.

“We really have gotten to the place now where we think it’s concept-appropriate [and] that the drive-thru experience is not hurting the inside-the-four-walls dining experience. ” Moreton said. “It increases frequency and we have a chance to get that consumer visit that we might not otherwise, when they really have to be tied to their car because they have their kids or etc., etc.”

Drive-thrus are a factor in looking at new sites, Moreton said.

“We think it adds to our customer convenience factor,” he said.

Special promotions: The company plans an earlier start this year of its “Summer Celebration” promotion, which will feature a strawberry-poppy seed salad and smoothies.

New products: Panera will introduce a new roast turkey and avocado bacon-lettuce-tomato sandwich in May, which Moreton said has tested very well. That will be followed by a turkey-cranberry Panini in the third quarter and the rollout of a grilled cheese sandwich in the fourth quarter. The executives said last quarter’s Norwegian salmon salad introduction was popular.

Breakfast: In the first quarter, the introduction of an egg-white sandwich helped drive breakfast sandwich sales up 19 percent in the quarter.

“Since we launched breakfast sandwiches more than four years ago, this category has grown more than 10 percent every quarter,” Moreton said.

Marketing: Panera plans to cautiously increase its marketing expenditures this year from 1.3 percent of sales in 2011 to 1.5 percent in 2012, Moreton said. The increase reflects a 27-percent increase in spending. The company started a cable television ad program in the first quarter that is intended as a test, he added.

Catering: Catering sale grew 25 percent in the first quarter on top of 26-percent growth in the first quarter of 2011, Moreton said. The company is working on targeted marketing efforts in catering, he added.

Commodity inflation: First-quarter commodity inflation was about 3.25 percent, Moreton said, but that is expected to ease for the rest of 2012.

“For the year, we expect all-in food and paper cost inflation of approximately 2.5 percent, down from our previous estimate of 2.75 percent as the result of falling dairy and coffee prices,” he said.

Panera owns and franchises bakery-cafes under the Panera Bread, St. Louis Bread Co. and Paradise Bakery & Café banners.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

Carvel Ice Cream will unveil a new yet familiar look at its more than 400 locations in the United States Thursday as part of its “Grand Reopening,” a move that president Gary Bales said was designed to leverage the brand’s decades of good will while appealing to younger customers.

Carvel guests on Thursday will be treated to a free junior soft-serve cone, as well as to the chain’s new interior design and high-tech touches like digital menu boards and digital cake books accessed through a tablet computer.

Bales said Carvel updates its image and interiors as often as any other well-run restaurant company, but this time the systemwide rebrand has the goal of broadening the chain’s appeal with external customers and “internal guests,” meaning Carvel’s employees and franchisees.

“I don’t care who you are, you have to look at the image you’re presenting to the guest and refresh it every so often,” Bales said. “We do that every three to five years, but this time we went further because we looked at our positioning and asked how we could differentiate, collaborate with our franchisees and innovate.”

Carvel’s main differentiators, its 78-year history and the nostalgia built from that, are driving the brand refresh this time around, Bales said. He compared Carvel’s attempt to blend nostalgia with cool new images to the recent success Ford and Chevrolet have had in relaunching their respective Mustang and the Camaro cars.

“We have a lot of great history with the brand, and we needed to bring back the classic, cool look to it,” Bales said.

To do this, Carvel brought back its former script-and-shield logo, but in a modern font. New graphics in units highlight that Carvel hand-makes all of its products, including soft serve, ice cream cakes, hand-scooped ice cream and candy novelties. Brand character Fudgie the Whale is still involved with Carvel, but Bales made no mention of him getting a makeover.

Employees also received new uniforms, which “the kids actually want to wear” and which also have a retro look, Bales said.

Brands in all industry segments have turned to remodeling and reimaging their restaurants the past several years to drive sales and traffic, often rolling them out on a market-by-market basis. Carvel, however, was nimble enough to reopen all its restaurants with the new look at once, Bales said.

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“We have an advantage there; we’re not a real big company,” he said. “With 420 locations, when we put our mind to it, we decided we could get it all done in 90 days. What was terrific is that we had everybody from all departments in our company — from purchasing to training to accounting — out in the field and engaged with our operators.”

The rebranding involved a small amount of incremental training, he added, but Carvel actually took the opportunity to simplify the menu and operations before rolling out the new menu boards or digital cake books. On the customer-facing side, Carvel also simplified its pricing structure into fewer tiers, he said.

High-tech upgrades, such as the digital cake books on tablet computers, were a clear play for the younger demographic, which Bales said came to fruition in test marketing.

The upgrades are happening while Carvel is at a position of strength, he added, as warmer weather and service upgrades yielded same-store sales increases in the high-single digits in the fourth quarter of 2011 and mid-single digits in the first quarter of 2012.

“As all brands age, you have to constantly reinvest in yourself, from the physical plant and the environment to the menu, not just to motivate your guests, but your internal guests as well,” Bales said. “We look at a lot of this as the investment of just being in business. It’s a longer-term build, and you don’t see the return overnight. But with our reimage layering on top of our first quarter, it’s momentum building on momentum.”

Carvel is one of several restaurant concepts owned by Atlanta-based Focus Brands Inc.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

A pick-up in catering sales and strength in some franchise markets could not completely offset weakness in traffic for barbecue specialist Famous Dave’s of America Inc. in the first quarter, as net income fell 32 percent compared with a year earlier.

For the April 1-ended first quarter, Famous Dave’s earned $817,000, or 11 cents per share, compared with $1.2 million, or 14 cents per share, in the first quarter of 2011.

Revenue rose 1 percent to $37.5 million, compared with $37.1 million a year earlier, reflecting a same-store sales decrease of 1.6 percent at company-operated restaurants and flat sales at franchised locations.

“While first-quarter sales in general fell short of expectations, we were pleased with the increase in catering sales,” president and chief executive Christopher O’Donnell said in a statement. “We are seeing pockets of economic strength nationwide, as evidenced by continued sales improvement from our franchise-operated restaurants.”

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Results included a charge of 1 cent per share for closure costs related to the sale of one company-owned location. They also included an impairment charge of 1 cent per share for nonrecoverable assets in a company-owned restaurant that is scheduled to be relocated in early 2013.

Franchise revenue rose 10 percent to $4.4 million, from $4 million a year earlier, reflecting six franchised openings and four franchised closures since the end of the first quarter of 2011.

Famous Dave’s operates 53 company-owned restaurants and franchises another 133 locations in 35 states. Its first international location is scheduled to open in Canada’s Manitoba province in June.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

Net income was up a modest 1.3 percent for The Cheesecake Factory Inc. during the first quarter, but guest traffic at its casual-dining restaurants was up 1.9 percent for the quarter — the best it has seen in a year, the company said Wednesday.

For the quarter ended April 3, Calabasas Hills, Calif.-based Cheesecake Factory reported net income of $20.7 million, or 37 cents per share, compared with $20.5 million, or 34 cents per share, a year ago.

Revenue was up 4 percent to $435.8 million for the quarter, reflecting a same-store sales increase of 2.4 percent for both the namesake Cheesecake Factory brand and Grand Lux Café.

By concept, same-store sales were up 2.6 percent for The Cheesecake Factory and up 0.3 percent at Grand Lux.

David Overton, The Cheesecake Factory Inc.’s chair and chief executive, said in a statement, “We had the best guest traffic levels in more than a year during the first quarter, as our culinary expertise and high service levels continue to attract guests.”

Overton said the company’s strategy was “experienced-based, not offer driven, with a focus on menu innovation and relevance to deliver full-margin sales.”

The company ended the quarter with 171 restaurants, including 157 Cheesecake Factory locations, 13 Grand Lux Cafes and one RockSugar Pan Asian Kitchen.

EARLIER: The Cheesecake Factory net income jumps 36% in 4Q

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout