Wednesday, May 28, 2008

Who wants a CEO's job? Not some CEOs

This has been a day of eerie coincidences. Bombshell developments required us to change the top story on our website three times in roughly eight hours. In each instance, a big-name restaurant chief was leaving a sizable multi-chain company, to the gape-mouthed surprise of everyone else in the business. Russ Bendel from Cheesecake Factory, Ken Keymer from the parent company of Village Inn and Bakers Square, Clay Dover from Bennigan’s operator Metromedia Restaurant Group—each seemed firmly entrenched in the job, if for no other reason than the ink on his business cards had barely dried. The longest-serving among them (Keymer) had logged a mere 13 months in the job; the most recent to stake out the corner office (Dover) had been there just six months. (Bendel, for the record, had only nine months’ of wear on his office chair).

All persevered for far less than the three to four years that studies have pegged as the average time of service for a corporate top executive. It’d be easy to attribute the simultaneous changeovers at three radically different companies to sunspots, global warming or the behind-the-scenes meddling of mutant Steinbrenner offspring, were it not for another trend emerging in restaurant-executive employment.

Last week, we reported that Phil Hickey, the former CEO of LongHorn and Capital Grille parent Rare Hospitality, had bought the four-unit Jocks and Jills sports bar chain. Phil has the sort of resume that would make every headhunter in the country want to have him on speed-dial, regardless of the industry they served. And when Rare was sold to Darden last year, securities filings indicated that Hickey recieved enough of a payout to make work an option, not a requirement. Yet what does he do? He opts for something entrepreneurial.

Similarly, David Goronkin resigned last December as CEO of the Famous Dave’s barbecue chain to take the top day-to-day management job at Redstone American Grill, a start-up from the same concept creator who hatched Champps.

Perhaps not coincidentally, Bendel told Nation’s Restaurant News that he resigned as president and COO of Cheesecake’s restaurant division to pursue “an entrepreneurial opportunity.” He wouldn’t say what it was, but noted that he’ll be switching to the new undertaking in a matter of weeks.

Against that backdrop, it’s easy to understand why executives might stay in a top restaurant job for a shorter stretch than they did in the past. Metromedia’s Dover, for instance, readily acknowledged that he opted to leave because of disagreements with the company’s owners. The times are grueling, investor patience seems to have shortened, stakeholders insist on an active management role, and we’ve reached the age of the plug-in executive, where a chief may be brought in for a very specific task. Vicorp stressed that it chose Harem Ouf to succeed Keymer because of the newcomer’s experience in bringing companies out of Chapter 11 bankruptcy protection, where it slid during Keymer’s watch. (Keymer, for the record, said he would retire at the end of the week).

Restaurant executives can be ground up and spat out in no time in an environment like the present one. The job is so grueling that it's hard not to be dissatisfied--with the individual who's trying to fulfill it, or with the situation itself. No wonder so many seasoned pros are assessing the task of running a big public restaurant company and deciding it’s not for them. They’ve decided to forego the pressure, lessen the hassles, and get back to doing what they enjoyed. Why waste your fruitful years dodging bullets?

Regardless of which party opts for a CEO or president’s exit, there’s little doubt that the foodservice revolving door is going to spin a little faster in the months to come. We were actually investigating reports today that a top executive had left a fourth well-known restaurant company, but couldn’t get a confirmation from the concern itself. But stay tuned. He's likely to be one in a parade of executives who find themselves arising from a hot seat in the near future. By their employer's choice, or theirs.

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Tuesday, May 27, 2008

'No-match'? How about 'no-sense'?

In another sign the donkey from “Shrek” is really running the country, a much-respected restaurant operator in Minneapolis is reportedly being picketed, petitioned, denied business, flayed on the internet and possibly left short-staffed, all because it followed the White House’s rules for countering illegal immigration. Straight from the files of Ripley‘s is this account of a company getting caught in a disastrous tug-of-war. And if that’s not enough of a sideshow draw, consider the really amazing part: It could be a preview of what’s in store for other restaurateurs if the government makes good on a pledge to drop more no-match letters into the mail within the next few weeks.

The tale began last fall when the D’Amico & Sons chain received a batch of the letters from the Social Security Administration. The letters, if you’ve strangely never had the experience of receiving one, alerts employers that the Social Security numbers provided by an employee don’t match the information in the agency’s data banks. Perhaps the numbers were assigned to someone with a different name, or the number just doesn’t exist. Or perhaps the new hire was recently married or divorced and is now using a different surname.

Regardless, the employer is given the heads-up that the discrepancy has to be reconciled. Otherwise, the Bush Administration would like the employees to be canned because they could be illegal immigrants using bogus I.D.s. It tried without success late last year to make that preference an obligation, but was thwarted by the courts.

In any case, D’Amico dutifully alerted the 15 or so employees of the no-match notices. According to reports by media ranging from Minneapolis Public Radio to the Twin Cities Daily Planet, the employees were given seven months to rectify the mismatches of information. Initially, according to the reports, the staffers were told to write the Administration. Later, D’Amico execs advised them to go visit agency and clear up the problems in person.

Only one employee apparently followed the counsel. The rest did not settle anything with Social Security. So D’Amico fired them at the end of March.

The company acknowledged that no-match letters aren’t yet grounds for firing people. But it also argued that some employers have been accused of helping illegal immigrants break the law because the companies had unresolved no-match letters in their files. The unheeded communications were taken as signs of complicity.

According to the MPR report, D’Amico said it terminated the employees, including several with more than a dozen years of tenure, because they didn’t follow the company’s directives.

The weeks since have made D’Amico the targets of such big-name dvocacy groups as the Students for a Democratic Society, the Industrial Workers of the World (better known as the Wobblies), and the sanctimonious-sounding Workers Interfaith Network. The discharged workers have also turned for assistance to the Equal Employment Opportunity Commission, alleging that they were the victims of prejudice since all were Latinos.

Meanwhile, petitions have reportedly been drafted, and Minneapolis-based bulletin boards carry consumers’ accounts of seeing picket lines outside the restaurants they’ve known as customers. Some delivery trucks apparently refused to cross the pickets. The Wobblies claim that some D’Amico employees staged an impromptu sit-down at one restaurant.

“I went to D’Amicos often and loved their food and ambiance,” said one poster on the Daily Planet’s website. “I will be boycotting the company from now on.”

MPR said in its report that a banquet customer cancelled its booking with D’Amico because of the situation.

Meanwhile, the federal government apparently hasn’t commented on the situation, much less clarified the obligations and rights of both parties in the matter. Instead, it’s silently leaving D’Amico as its proxy.

After a court struck down the Bush administration’s efforts to require employers to fire staffers who can’t fix a no-match situation, officials from the Department of Homeland Security expressed confidence they’d eventually prevail in their efforts. It indicated at the time that it would address the objections that prompted a federal court in San Francisco to strike down the fix-it-or-nix-it aspect of the law. Among the flaws that were cited by the court was the mere 90 days that was granted to fix a mismatch in Social Security info. That and other concerns prompted the court to bar the Social Security Administration from sending out letters that threatened penalties. The SSA said it didn’t have time to fix the content and resume sending the no-match letters, and suspended the practice.

But the agency said it planned to address a court directive and resume sending no-match letters again in the spring of 2008. The season ends on June 19, or about three weeks from now.

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Thursday, May 22, 2008

Tales of the talks

Sit long enough in one spot at the NRA show and you’re likely to witness either an awards ceremony or a speech. Yet, my fellow sore-footed conventioneers, where was the event that tied the two together? Honors were bestowed for standout performances in any number of areas, from culinary-school academics to menu making. Similarly, I listened to more than 50 presentations from a podium during my four days at the show. Some of them clearly deserved the distinction of a prize. So here, to plug an obvious hole in the book-sized list of convention activities, is the inaugural presentation of the Outstanding Oratory Achievement Awards, popularly known as the Oo-Aahs.

Return of the Herminator: With Indiana Jones and Batman making their comebacks, is it any surprise that one of the industry’s own action heroes would strut back onto the stage? Herman Cain has been out of the business for eight or 10 years, working in politics and hosting a radio show in Atlanta. But he clearly hasn’t lost his touch for rousing an industry audience. The former head of the NRA and Godfather’s Pizza, who once shot up at a town-hall meeting to out-debate a stunned President Clinton, knocked the dust off chandeliers with two booming presentations. At a luncheon that brought together hospitality-school students and industry luminaries, the one-time senatorial candidate recounted how his father worked three jobs so he could realize his dream of buying a house where Cain and his brother would each have his own bed. “Twin beds?,” Cain boomed. “We’d been sharing a cot in the kitchen. We thought we’d died and gone to heaven.”

That night, at a gala where he was awarded the lofty distinction of Diplomate by the NRA Educational Foundation, Cain sounded a more somber tone. “Some of you may have heard that I had cancer,” he said in a voice that could slip deeper than a foghorn. “I say ‘had cancer,’ because I had cancer. I’m now 100 percent cancer free.” Word that he’d beaten Stage Four colon cancer, delivered in his evangelical style, had the audience roaring.

But he was no match for his fellow award-winner, a thoughtful, a bashful by comparison chef from Washington, D.C.

Ricchi rocks the house: The Diplomate designation was also bestowed that night on Chris Ricchi, chef-proprietor of Ristorante i Ricchi in the nation’s capital. Looking more like a surfer on spring break than a working mom with two grown children, Ricchi was profiled in a video that highlighted an aspect of her life that was unfamiliar to many of us. Ricchi’s son, the tape explained, had a disability that required his enrollment in a specialized school in the D.C. area. The place sounded like a wreck, with a leaky roof, grounds that had all the warmth of a war zone, and a food service whose only recognition would likely come from health authorities. An administrator recounted how Ricchi took a look at the place and calmly informed another parent, “We can do better.” She then proceeded to raise some $4 million for a transformation.

Taking the podium, Ricchi acknowledged that she’d raised the money by turning to her peers in the restaurant business, who “all opened their checkbooks.” Then she asked her children to stand, including the son whose life had been so powerfully affected by people in that very room. The applause could’ve been heard on the space station.

“This is it,” she roared with a fire that could only come from the heart. “This is what’s important. It’s all about how we can help others. And no one does it better than this industry.”

There were more napkins dabbing eyes than you’d see at a wedding.

But Ricchi wasn’t the only speaker to prompt the sort of sniffling you might hear from first graders on Day One of school. The industry was introduced the next morning to the well-spoken young director of training for Whataburger, who pulled no punches about where she came from.

‘I had to get out.’ “I grew up in Haines City, Fla., in a neighborhood where drugs were available 24 hours a day,” Nicole Jackson recounted in the printed bio that was handed out for the NRA’s Faces of Diversity Awards. “My mom worked a lot but partied a lot, so we lived with my grandmother.”

“We lived on public assistance, and I was told I could aspire to be a janitor or a maid,” she wrote. “I knew I had to get out.”

She did, ultimately picking the restaurant industry as her path. The first step was a crew position at a McDonald’s, earning $3.35 an hour. She quickly moved up there, was hired away by Krystal, and then by Whataburger. And there she was on Sunday, winning an award from the restaurant association for showing others how to climb out of their dire circumstances.

“It may seem like an award to you,” she told the directors of the National Restaurant Association. But for her, she explained, it was validation of the good she’d found in the job—not only for herself, but for the people with whom she worked every day. “We are counselors to 16-year-olds,” she exuberantly reminded the industry greybeards. “We are supplemental income because someone was a little short that month.”

Addressing some of the biggest names in the business, Jackson summoned an extra measure of volume and enthusiasm to let them know, “You wrote the lyrics to our new song. And we will pay it forward.”

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Wednesday, May 21, 2008

On the rack at Steak n Shake

Back in feudal times, kings merely boiled alive the serfs who failed to deliver all the wheat that was demanded of them. Today we have the far more gruesome ritual of the quarterly conference call. Expensive suits clearly fail to protect public-company officials from being grilled by disgruntled portfolio managers. And seldom has the sizzle been louder than it was during the recent confab between analysts and the executives of Steak n Shake. When the company’s co-founder dials in to deliver her can of whup ass, you know it’s going to be a tough Q&A session for the folks from headquarters.

Not that they were snapping on the “Applause” sign for the company’s performance. “Unacceptable,” spat acting president Jeffrey Blade. “We remain dissatisfied.” That “we” presumably refers to the whole executive team, though Blade might have been speaking only for himself. In addition to holding the job of interim president, he’s also serving as chief financial officer, chief administrative officer and executive vice president. And, of course, spokesman during conference calls.

At least he’s not responsible for finding a permanent CEO. That task is being shouldered by the interim holder of the title, who’s also filling in as chairman. Here, in full, is an update on the search from that point person, Wayne L. Kelley: “Since beginning the search process back in February, we have seen several well-qualified and enthusiastic candidates and we remain optimistic that this process of obtaining our new CEO will be concluded in the near future.” The decision to hire a new CEO was made in August, by the way. The sort of search that Kelley detailed apparently takes a few months to get rolling.

That wasn’t okay with one of the callers. Sue Aramian is little known outside of Steak n Shake, but she should be hailed as an industry pioneer, along the lines of Jackie Trujillo or Gretchen Mathers. Long before there was a Women’s Foodservice Forum, she was blazing a trail that led to what may well be the first vice-chairmanship in the industry to held by a woman. Aramian quietly oversaw a company called Consolidated Products, known today as The Steak n Shake Co.

“My name is Sue Armanian,” she said during the Q&A portion of the call. “I have been asked many, many times to comment upon the company that I co-founded with E.W. Kelley in 1981. I have refused every request until this statement that I am making to you.”

According to a transcript provided by Seeking Alpha, the online financial-information clearing house, Aramian proceeded to take Blade and another Kelley to task. She cited a “vacuum of leadership” and the “intolerable manner” in which shareholders’ values have dropped.

“You have operated with the same team doing the same thing get the same results,” she asserted, describing the status quo as “undesired.”

Noting that employees have voiced similar concerns to her, she told the officials, “it all stems from lack of good leadership and an understanding and appreciation of the basic concept.”

Blade’s response, quoted here in full: “I don’t believe there was a question in that, so we’ll go on to the next question.”


Monday, May 19, 2008

Skinner to casual dining: Watch your prices

Jim Skinner, the CEO of McDonald's, offered some free advice to casual-dining executives during his keynote address yesterday afternoon at the National Restaurant Association's convention in Chicago. "If I were in casual dining, I would make sure I had an affordable menu, even if it had to hurt a little bit," he said. "That's where I'd spend my time, particularly today."

Skinner cautioned that he was speaking as a consumer, not as someone who's ever run a casual chain. Yet the readiness with which he offered that counsel in response to a question clearly indicated he'd thought about the matter from a business standpoint.

Earlier, he'd cited his own brand's offer of "everyday affordability" as the key reason for the chain's phenomenal success at a time when most chains are struggling.

"It's the most improtant thing right now with our customers, and you all know it," said Skinner.

"People like to say we benefit from a down economy. We do not," he said with considerable emphasis. He termed the chain "recession-resistant, not recession-proof."

Regardless of what type of restaurant or chain you run, he stressed, "now matter how good the experience is, if you don't have an affordable menu, you're going to have problems."


Sunday, May 18, 2008

Miscellaneous stuff I learned at the NRA show

The National Restaurant Association’s annual convention abounds in educational sessions, including 14 on green issues alone. But many of the revelations come elsewhere, as these minor gems attest:

Who said restaurants don’t offer health insurance? Oh, sure, you may find an operator here or there that takes a progressive stance on benefits, and there’s always Starbucks, the exception that ostensibly proved the rule. But few people in the general public—much less those in the industry—would expect to find health coverage available from the mega-sized quick-service chains, where the size, turnover and young age of the workforce presumably pushed the benefit beyond the point of feasibility. Not so, McDonald’s CEO Jim Skinner revealed in his address to convention attendees this afternoon. All 9,000 of the franchisor’s company-operated restaurants now provide employees with access to coverage. But, Skinner acknowledged in one of several surprising flashes of candor, “it’s available, but not necessarily affordable.” He seemed to suggest that affordable health coverage is one of the goals the industry should pursue in collaboration, instead of each operation scrabbling in isolation. More on that in a later post.

New fruits are ready to drop on the U.S. market. You never know who you’ll see or hear among the tens of thousands who attend the restaurant show. Who, for instance, would have expected to catch a cameo appearance by New Zealand’s ambassador to the United States at the NRA’s board meeting? Yet there was Roy Ferguson (are you supposed to put an “Honorable” or something before his name?), talking about the efforts underway in his country to provide American restaurants with delectable new choices. Among the bunch, Ferguson said, are new fruits like the kiwi berry, a kiwi that could be eaten without being peeled.

But that’s not the only new fruit heading to the States. Tonight a group of us from Nation’s Restaurant News visited the Chicago outpost of Sushi Samba, the popular fusion-cuisine concept from New York. The concept’s Joanna Cisowska mentioned that the restaurant is participating in a Brazilian food festival, a first-of-its-kind event in the city that was scheduled to coincide with the convention. The festival is aimed not at consumers but at American restaurateurs who are visiting Chicago for the show. The government of Brazil hopes to promote the foods of that nation to restaurateurs from all over our country. Among the items they’ll be invited to sample is a fruit called cupacu, which Cisowska described as a new “super-fruit” that could be as warmly embraced by the health-conscious as acai. At the end of the meal, we were surprised with desserts that were made with cupacu, a purple puree that contrasted beautifully with the tapioca below it. Apparently it’s hardly a novelty in its native land.

Pasta prices are hard to hedge. Bakers can try to temper the spike in wheat costs by locking into long-term contracts or otherwise striving to hedge against the inflation. Not so with duram wheat, the sort that’s by pasta makers, a supplier explained. The market for that variation is purely transactional—buy what’s available at whatever price you can, without the benefit of long-term deals. He also revealed that the price of the wheat appears to have topped out.

James Brown has a following on the NRA board. Association director and Golden Corral chief executive Ted Fowler once described the board as “stale, male and pale,” Multicultural Outreach Committee chairman Daniel Halpern revealed to his fellow directors in explaining why his committee had been launched several years ago. Now, Halpern said, the diversification push is bringing results, though the board can’t let up in that effort. The situation, he said, brings to mind the words of “the poet James Brown: ‘I’m not asking you to give me anything. Just open the door and I’ll get it on my own.’” Get down, y’all.

Vegas hookers will run you $250 an hour. That nugget was overheard on the hotel shuttle bus from the convention hall. The speaker was apparently enlightening a less-worldly compatriot who mistakenly thought Sin City was all about gambling, shows, and eating the food of famous chefs. The forced listener looked as if he’d have paid $250 at that moment for a can of Lysol. Given the look of the speaker, he must have had a coupon to get the rate he cited.

Elephant & Castle has the best meatloaf in Chicago. Overheard during that same bus trip.

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Saturday, May 17, 2008

Curtain rises on Chicago restaurant show

The restaurant industry did its part today for Dr. Scholl’s and the trophy industry, converging on Chicago for its annual epic march through the aisles of McCormick Place, then rousing itself to cheer through a marathon of awards presentations. Yet the usual epidemic of blisters and vocal-chord strains were darkened this year by the whispered laments of business conditions. Operators started off cheerily, then slid into grim assessments of customer-traffic and food-cost trends. And suppliers glumly speculated that booth traffic would be tempered as operators cut back on the number of people they brought to the show, if they budgeted to come at all. Nor, they pointed out, are their ingredients costs any better than restaurateurs’.

Yet the aisles were crowded today at McCormick, with a healthy showing of red badges, that all-important sign of the operator. Trying to navigate my way through the nibblers, tire-kickers and serious shoppers, I spied a McDonald’s director, a top executive of Auntie Anne’s, a large contingent from White Castle, a number of onsite feeders, and more than a smattering of independents. It was hardly a scientific assessment. But equally casual assessments in past years found far fewer of those red badges.

In the way of trends, clearly the green movement is gaining share of tongue. It was a standard add-on to dialogues, as in, “and it’s sustainable, too, because….” Or, “how about the environmental impact?” I was sorry to miss a discussion this morning between culinary educators, students and industry officials, about what’s being taught to restaurant and hospitality students about ecological practices.

I suspect that I’ll notice a marked shift when I poke around the booths tomorrow toward the slanted. Certainly slanted tableware—a soup bowl whose bottom is slanted, so the liquid pools in the bottom for easier spooning, for instance—has been noticeable during some of my recent restaurant visits. The Gage, for instance, sells its wines-by-the-glass in small carafes that are skewed. Their bottom is flat, but the body and neck slant forward, making for a more dramatic presentation and easier pouring. More on this after I check the dishware booths in the next few days.

But undoubtedly the dominant talk of the show was about the difficulties of the time. One person cited a supplier whose costs have jumped by the scale of a moonshot because of escalating grain costs. Several recounted conversations where the participants wondered what casual-dining brands would disappear. Others speculated about what wounded brands in the market would likely be acquired, possibly for conversion.

It would have been nice to check the possibility of an acquisition with some of those brands. But it seems that several decided not to send their executives to the show this year.

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Tuesday, May 13, 2008

The house party

A heads-up to National Restaurant Association show coordinators: There is a second political party out there, you know. The association served up a pleasant surprise Monday by announcing that John McCain is going to drop by the industry’s mega-get-together next week in Chicago, first to speak to attendees, then to powwow with industry leaders about travel and tourism. His participation will follow by two years the unscheduled appearance of President George W. Bush, one of a long line of political speakers that also includes his mother, Barbara (accompanied by her dog, Millie), Ronald Reagan (in his second post-White House public appearance), Gerald Ford and Herman Cain. In one of those uncanny coincidences that no bookmaker in Vegas could anticipate, all were Republican (though I can’t absolutely swear to Millie’s political persuasion).

It’s easy to see why. As James Carville quipped at his recent appearance at an industry event, “I’d like to say hello to all of my fellow Democrats. All eight of you.” This is a obviously a Republican industry. And the whole point of a convention is being with persons of your own calling.

It’s great that McCain will be addressing the NRA’s convention. Indeed, it’s a tribute to the association that it can land figures of that stature, and the timing couldn’t be more perfect. This election is truly a race, with the outcome as uncertain as any I’ve witnessed. And you’re talking about someone who can recall listening to John F. Kennedy’s warning about some missiles in the place where Ricky Riccardo came from. A presentation by McCain could stimulating experience indeed.

But even rabid GOPers would have to acknowledge that their flag-bearer may not be the one voted into office six months from now. Nor is there any speculation about the Arizona senator’s claim to represent the team. His appearance may be more of a rah-rah event than a sobering moment of thought.

Face time with Obama or Clinton, in contrast, might have been far headier. If they’ll truly be enemies of the industry, isn’t it better to have a sit-down now, figuratively speaking? Where do they stand on industry issues like menu labeling, no-match letters or foreign tourism promotion? Inviting the trade’s adversaries might have been far more educational than a pep rally. And if the choice of the Democratic candidate has still yet to be decided, wouldn’t it be interesting to determine which one the industry would prefer to see in the race?

For all I know, the NRA did invite one or both of the Democratic contenders, and was turned down by each. Or that there might be a surprise last minute stop-by by one or both, akin to George W. Bush’s unexpected presentation in 2006.

That would be a pleasant surprise indeed, and I don’t say that because of my own political leanings. During times of political uncertainty like these, it’s better to learn what your adversaries are thinking than it is to review the points of agreement with the entrant you prefer.

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Wednesday, May 7, 2008

The King, a spy?

Eric Schlosser, the muckraking author of “Fast Food Nation,” blew the cover this morning off a clandestine operation that explains why so many chain executives take their martinis shaken, not stirred. In an op-ed piece in the New York Times, Schlosser, about whom I have my own secrets to reveal, disclosed that Burger King has been secretly infiltrating a labor-affiliated group in Florida. Not that the group’s members work for BK, mind you. They’re students who sympathize with the workers who pick the Florida tomatoes that might end up as a Whopper garnish. BK, apparently fearing some sort of tomato-field uprising, hired a veteran spook to go undercover as a college student willing to work for the Student/Farmworker Alliance, according to Schlosser.

The best-selling author and crackerjack journalist said he was told by an unnamed BK executive that the chain had for years employed a shadowy company called Diplomatic Tactical Services for what the source termed “security-related matters.” In March, Schlosser said, those matters extended to infiltrating the Alliance, which supports the mission of the Coalition of Immokalee Workers. As we’ve often reported online, the CIW is pushing BK to pay an extra penny a pound for tomatoes, as McDonald’s and the quick-service chains of Yum! Brands have agreed. The CIW says the money would be used to improve the wages and living conditions of tomato pickers. But BK has refused, citing concerns about the legality of paying part of a wage to workers whom it doesn’t actually employ.

Schlosser doesn’t say exactly what BK hoped to accomplish if, as he alleges, the company paid someone to spy on the Alliance. But he cites the situation as another reason why safeguards against corporate surveillance should be enacted by Congress, if not written into the Constitution.

Lest you write off Schlosser as someone who warns of monsters under the bed because it sells books, consider the other reports that have come to light about BK executives’ other dealings with the CIW. The Fort Myers, Fla., News-Press reported yesterday that the franchisor is investigating Steve Grover, head of the chain’s food safety and quality control functions, for slamming the CIW in blog postings that were written under the screen name of his daughter. “Appropriate disciplinary action will be taken,” BK spokeswoman Denise Wilson was quoted as saying. In the story, she stressed that Grover acted independently, without so much as sympathy from the home office. She did not deny that Grover had written the messages, which the News-Press characterized as “derogatory.”

Yet Schlosser’s account fails to answer the question of why BK would bother to infiltrate a student group that has probably never heard of Che Guevara or Cesar Chavez. At a time of runaway food costs, sky-high construction costs and a severe slowdown in consumer spending, do farm workers or youngsters working on their behalf really pose a significant threat, never mind one that triggers covert operations? Shouldn’t BK’s operatives be trying to turn Ronald McDonald, or maybe waterboarding that pig-tailed redhead from Dublin, Ohio? At the very least it should be eavesdropping on that cue-ball-headed guy who makes commercials for Jack in the Box.

And, of course, there are my personal qualms about Schlosser’s integrity. Many years ago, sometime between “Fast Food Nation” and his subsequent book, “Reefer Madness,” he called me while I was serving as editor of an NRN competitor. He was trying to track down the source for an expert’s assertion that I’d recounted in a column. I had the source material on an audiotape, a piece of pr-MP3 technology known as a “cassette.” It was a recording of a Technomic recording from COEX, and you couldn’t readily find material of that sort in those pre-YouTube days. So he begged to borrow it, swearing he’d return it ASAP. But, alas, I’m still waiting.

Perhaps I should slag him in a blog.

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Friday, May 2, 2008

Shooting themselves in the foot?

You have to wonder how gun advocates would reconcile the tragedy that befell a Florida Taco Bell with the push in Georgia to let patrons carry firearms while they drink in public. They’ve hammered a bill through the state legislature that allows gun-permit holders to carry a hidden pistol into restaurants and other places that serve alcohol. The proponents are arguing that Gov. Sonny Perdue should sign the measure into law because it would allow your average citizen to defend his or herself should trouble erupt, like the robbery that unfolded in late February at the Cape Coral Taco Bell.

Sure enough, someone in the restaurant that day was carrying a handgun. And, luckier still, it happened to be a police officer—someone with extensive training in how to handle a lethal weapon. Nor was the officer caught off guard. Local authorities had been warned that the fast-food restaurant might be robbed that night. Officer Doug Coons was sent specifically to protect the staff and patrons. When a man at the back door pulled a gun on manager Paul Price, Coons reacted. He fired twice at the armed robber, hitting him in the shoulder. But Price also caught a bullet, though his wound, like the perpetrator’s, was not fatal.

At first, according to local news reports, Price asserted that he’d been shot by the robber, apparently a not-too-quick fellow named Christopher Ward, who was promptly arrested with three accomplices. But authorities reportedly discovered that Ward’s gun hadn’t been loaded. The state attorney’s office also reportedly learned the bullet had come from Coons’ gun.

All parties agreed the injury to Price had been unintended. Indeed, the state attorney found Coons’ actions to be “reasonable and lawful,” according to the Cape Coral police department, and did not merit any criminal charges.

But it’s a reason to stop and think about the legislation that’s on the governor’s desk in Georgia. An innocent man was shot in Cape Coral because a policeman, a highly trained professional accustomed to carrying a gun every day on the job, erroneously hit him. We’re not talking about an amateur unwittingly finding him or herself in mortal danger, possibly after having a drink or two, in a crowded facility where other people may be packing, too. Do the gun advocates in Georgia really believe that an accident shooting would be less likely in a situation like that?

We can only hope the governor listens to the Georgia Restaurant Association’s plea that he protect the public by vetoing the pending bill. As GRA chief executive Ronald Wolf put it in an Atlanta Journal-Constitution op-ed piece on Tuesday, “although we recognize the good intentions of the legislature to provide restaurant patrons with an increased sense of security, the reality is that the bill only increases the likelihood of an inebriated customer putting innocent citizens and law enforcement officers in harm’s way.”

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Thursday, May 1, 2008

How IHOP plans to fix Applebee's

After crowing for months that it could revive Applebee’s, IHOP started talking this week about how it’ll do it. In a presentation to financial analysts, CEO Julie Stewart spoke of such nuts and bolts changes as scaling back limited-time offers, installing new kitchen equipment, paring down the menu to a few specialties, and, perhaps most important, remembering what kind of consumer is likely to visit the restaurants. “We often overshot the brand in the pursuit of amore upscale customer while frankly failing to deliver on the expectations of our core users,” Stewart explained.

The casual chain’s new owner has already yanked Applebee’s much-ballyhooed “Talking Apple” ad campaign, which featured the sassy comedienne Wanda Sykes as the voice of the apple that’s now part of Applebee’s logo. Both the new logo and the edgy campaign, carefully slanted toward a hipper crowd, were concocted by the chain’s prior regime, which Stewart ousted in short order. The new campaign, “It’s a Whole New Neighborhood,” harkens back to the chain’s earlier positioning lie, “Eating Good in the Neighborhood,” which Steward helped to develop while she was president of Applebee’s domestic operations.

The new spots spotlight food, without any pretenses about attitude or cheeky sophistication. Or, as Stewart put it, “Our message is clearly focused on classic grill and bar food that you can only get at Applebee’s.”

That process of stripping down the concept to its core strengths, then updating those traditional draws, appears to be the basis of Stewart’s revival plan. As she told the analysts, a crowd usually more concerned with ROI than Riblets, “Signature grill and bar items, such as appetizers, burgers, salads, steaks, as well as beer, wine and other specialty drinks, are the key to differentiating Applebee’s from the competitive set while remaining true to our brand position.” Translation: The chain will stop trying to be a Cheesecake Factory or a trendy independent.

Part of the process, she continued, will be paring back the menu and updating kitchens.

In an interview with USA Today, Stewart also spoke about putting more emphasis in Applebee’s marketing on the concept’s bar. Most consumers, she suggested, don’t realize how much the brand offers to patrons who want to unwind with a cocktail.

During the conference call with investors, one of the portfolio managers asked Steward why she was veering from Applebee’s traditional reliance on limited-time offers and frequent menu changes.

“The short answer is that [the] LTO strategy did not work,” she said. “The idea of forcing people to come in for a limited period of time and order that item and somehow come more frequently did not work.” After all, she said, “if your base business and your base menu and your base service platform doesn’t provide enough for the consumer, then the LTO isn’t necessarily going to get you where you want to go, right?”

Stewart said that IHOP has plotted out a new marketing plan for Applebee’s for the remainder of 2008, starting with another flight of ads that debuts Monday. In those spots, consumers will be invited to submit videos they’ve shot inside Applebee’s units.

In addition, Stewart and her team “have developed a road map for all of 2009 that should be finalized in the next couple of months,” she said. In particular, she added, the new operating group will look at takeaway and Applebee’s rights to market Weight Watchers-brand meals.

Stewart also revealed that IHOP plans to “amend” a unit-manager bonus program that squeezed margins at company stores during the first quarter, without commenting how that effort dovetailed with the plan to improve unit-level operations.

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