A news sampler

My cubicle usually makes FEMA's newsletter two or three times a year. Mentions like, "Congratulations to Joe Smith in Dispatch for scaling Mount Everest this summer. What’s next, Joe, cleaning Romeo’s desk???” And there was that discovery of a condor colony during a routine bulldozing of the guest-chair area in ’06.

It’s not that I prefer the post-cyclone look of my workspace, despite its likelihood of being the next “Survivor” setting. I just can’t bring myself to bury news tidbits in files that defy easy labeling. I prefer to maintain a desktop Miscellaneous mound, so I can savor informational details that would otherwise be lost. Consider, for instance, these gold flakes in the recent stream of news.

Wal-Mart wants your pizza business. During primetime Olympics coverage, the retailing bully aired a commercial that should’ve had pizza chains sweating like Chinese gymnasts being asked for proof of age. The spot explains that ordering a pizza from a restaurant usually costs about $14, while bringing home a take-and-bake pie from Wal-Mart will set a family back just $8. “If your family eats pizza once a week, you could save $312 a year,” the voice-over explains. Better push those pastas, Pizza Hut.

Little burgers are now Chili’s biggest. Big Mouth Bites, Chili’s version of the mini-sandwiches that competitors of all stripes seem to be sporting these days, are now the chain’s best selling burgers, according to officials of parent Brinker International.

McCormick & Schmick take a different group-business tack. Everyone targets local businesses for catering and party business. M&S is trying the different path of pursuing companies on a national basis. The high-end seafood chain is reaching out to corporate accounts that are planning road shows to hawk their wares or services. The restaurant company offers those road warriors the ease of setting up the feeding operations of the whole tour with just one call to a centralized sales and support center.

Cheesecake Factory isn’t alone in trying delivery. BJ’s Restaurants, the high-volume chain headed by Cheesecake alumnus Jerry Deitchle, is already offering the service at 71 of its 75 casual-dining restaurants, according to executives. If it’s indeed blazing a path for Cheesecake, the latter may soon be seen walking the aisles at BestBuy. BJ’s is also upgrading its TVs to flat-screen models.

Outback’s parent sells its plane to familiar parties. As it was losing $176 million during the second quarter, OSI Restaurant Partners decided it was time to thin out its fleet of aircraft. It sold one on July 1 for $8.1 million to a company called Billabong Air II Inc., which happened to be owned by two of the company’s founders, co-owners and executives, according to securities documents. That’s not to say other residents of the executive floor will always have to fly commercial. As part of the deal, Billabong agreed to let OSI lease the plane for up to 200 hours a year, at a cost of $2,500 per hour. Blankets and pillows were apparently not part of the deal.

There are probably far more tidbits I could share with you, but there's movement under the pile of papers near my keyboard, and it could be something alive. Unfortunately, that’s also where I left the number of Animal Control.

Best of breed: franchisee or franchisor?

Did chain headquarters forget to tell franchisees we’re in a downturn? Maybe franchisors are just too embarrassed to gripe about the times when so many licensees are turning conditions to their advantage. Consider what happened recently within several of the industry’s oldest chains. Franchisees proved once again that they can adapt far more readily than the home office to changes in the marketplace, no matter how trying. Their pockets may not be as deep, but their street smarts often make them better.

S&A Restaurant Corp. went bankrupt in spectacular fashion, turning away employees and patrons in preparation for a fire sale of the 200 Bennigan’s and Steak & Ales it operated. And franchisees? As the Bennigan’s on Pittsfield Road in Lenox, Mass., boasted on a banner this weekend, “Locally operated and still open.” It may not be one of the licensees that are looking to scoop up the franchisor’s shuttered stores, but it appeared to be doing just fine, capitalizing on local events like the area’s fifth annual Zucchini Festival and Sunday morning’s crafts fair/pancake breakfast fundraiser in a local park. All told, Bennigan’s franchisees hope to turn S&A’s inability to stay solvent into a chance to swell their ranks by 40 to 60 properties, presumably at prices that would make Wal-Mart wince.

S&A’s franchisees weren’t the only ones to spot an opportunity amid what many brand parents portray as the third circle of hell. Pizza Hut, another greybeard of the business, saw franchisee NPC Corp. ink a deal to buy 99 of the chain’s units from a fellow licensee for $35 million—or roughly $354,000 per store. Pizza Hut seems to be gaining sales traction after some difficult years, thanks to a new pasta takeout line and the addition of a bolt-on chicken wing concept called Wing Street. But while the home office is getting on its feet, NPC is galloping.

To be sure, not all franchisees are finding the current market to be a time of opportunity. Papa John’s recently acknowledged to investors that it’s “subsidizing” franchisees by eating some of increased costs of items it distributes from its commissaries to the field, instead of directly passing along the heightened expenses. It also noted that it sometimes exercises patience with franchisees whose situations make royalties a tough nut to cover.

But, as executives stressed during a conference call with analysts, nothing keeps a system healthier than able franchisees. “We are very focused on keeping good franchisees healthy during these tough times,” said CEO Nigel Travis.

There are probably a lot of franchisees saying the same thing these days about their franchisor.

Signs of the (new) times

This is a good time to be in the sign business. First KFC reveals that it might replace its familiar exterior logos with ones reading, “Kentucky Fried & Grilled Chicken,” a dramatic act of support for the chain’s new roasted chicken (it’s roasted on a plate that leaves grill marks; hence the name. Apparently “Kentucky Fried & Roasted/Grilled Chicken” was adjudged to be a bit much.)

Then sister chain Pizza Hut disclosed that the home office in Dallas will replace its exterior nameplate with one reading, “Pasta Hut,” a not-so-subtle shill for the $11.95 trays of pasta that will be added to stores’ delivery menu on April 6. The rechristening is supposed to happen next Tuesday, otherwise known as April Fool’s Day, and last for a month. But, remember, Pizza Hut is run by the same company that announced on a past April 1 that it had purchased the Liberty Bell for promotional use by its Taco Bell chain.

You have to wonder what Taco Bell’s parent has in store for the exterior signs of that chain. If it follows the patterns set with its other holdings, Yum! Brands will be swapping out the current trade dress for logos reading, “Taco Platters,” or “Taco Smoothies.” Platters were introduced a short ways back, and smoothies are on the rollout schedule for this summer.

But in the meanwhile, the signage business can pick up a little more coin from Ruth’s Chris Steak House Inc. The high-end operation doesn’t feel that its corporate identity should be based on only one restaurant brand when the fold was enlarged through a recent acquisition to include the Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse concepts. It reportedly plans to ask shareholders at their annual meeting on May 22 to approve a switch to the more inclusive handle, “Ruth’s Hospitality Group Inc.”

Crunch time?

The business week is only a few hours old, but it’s already yielded indications that restaurant chains are trying two new tacks in their product introductions: Tout texture, and crow about being better if you can’t brag about being first.

Both trends are evident in KFC’s new product, a knock-off of McDonald’s Snack Wrap called the Toasted Wrap. Like McDonald’s chicken snack, a home run by anyone’s standards, the new Toasted Wrap snack is priced at $1.29. It, too, consists of all-white chicken, lettuce and a flavored sauce, all wrapped in a flour tortilla. But the little bundle is then grilled, giving it a bit of a chewy texture. The chain is touting that difference in feel with consumer “touch” tests, presumably pitting the Toasted Wrap against the Snack Wrap in head-to-head comparisons where consumers indicate which feels preferable.

KFC makes no bones about following McD’s lead; the latter’s product is cited in the announcement of the Toasted Wrap’s introduction.

Meanwhile, Papa John’s, an arch-rival of KFC sibling Pizza Hut, is pursuing a similar strategy with its latest product promotion. The chain is touting the texture of its re-formulated pan pizza, the Papa’s Perfect Pan. “The product features a crust that’s irresistibly crunchy on the outside and soft and chewy on the inside,” explains the promotional materials. The literature also describes the pizza as tasting better than ever, without a word about the flavor.

The chain is offering a free perfect pan to anyone whose birthday falls on Feb. 29.

Interestingly, arch-rival Domino’s Pizza also launched a promo today tied to the current Leap Year, though you have to do more to cash in than merely have a Feb. 29 birthday. The delivery chain is offering to throw a pizza party for every family that has a child on Feb. 29 and names it “Brooklyn,” a tie-in with Domino’s Brooklyn-style pizza. The first to use the name gets a sweetener of $1,000. Which, no doubt, will go toward later therapy for a kid who was named after a pizza so his or her family could get a free party.