November 19th QSR Roundup: Bankruptcy Restructuring at Fired Pie, Smoothie King's New CIO and Festive Innovations from Vicious Biscuit

QSR news for Nov 19th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 56 articles to bring you the latest. Estimated reading time saved (at 200wpm): 294 minutes. It'll take you only 10 minutes to catch up.

Restaurant Industry Challenges and Restructuring

Fired Pie Declares Bankruptcy

Phoenix-based pizza chain Fired Pie has filed for Chapter 11 bankruptcy due to challenges from COVID-19 and rising inflation. The 13-unit chain plans to restructure operations and close underperforming locations to preserve the business and the jobs of its 201 employees. Owner Douglas Doyle cited decreased foot traffic and increased inventory costs as major factors. The company owes approximately $440,000 in secured debt and aims for a successful reorganization.

KBP Foods Restructures Amid Economic Pressures

KBP Foods, the largest KFC franchisee in the U.S., is laying off 29 corporate employees (less than 9% of corporate staff) amid restructuring efforts due to inflation and consumer challenges. Despite operating over 830 KFC locations and recently acquiring 85 Sonic Drive-Ins, they face a complex consumer environment. KFC U.S. reported a 5% decline in same-store sales during the third quarter.

Sources: QSR Magazine, Nation's Restaurant News, QSR Web

Leadership Changes and Appointments

• Smoothie King's New CIO
  • Jyoti Lynch appointed as Chief Information Officer.
  • Brings over 25 years of experience in technology and operations.
  • Aims to enhance digital transformation and franchisee profitability.
• Charlie Morrison Departs Salad and Go
  • CEO Charlie Morrison to leave at year-end due to strategic differences.
  • Under his leadership:
    • Expanded from 50 to over 150 locations in a year.
    • System sales increased by 67.5%.

Highlights:

These leadership changes signal significant shifts in strategy and growth plans. With experienced executives at the helm, brands like Smoothie King and Salad and Go are poised to navigate the competitive landscape and drive innovation.

Sources: QSR Magazine, Restaurant Business, Restaurant Dive, Nation's Restaurant News

Innovations and Festive Offerings

Vicious Biscuit's Holiday Delights

Vicious Biscuit is spreading cheer with festive treats from November 29 to December 31:

• White Peppermint Mocha Latte ($5.50): Blends white chocolate, peppermint, and espresso.
• Sweet Potato Biscuit ($3.50): A savory-sweet delight with cinnamon and brown sugar.
• The Angry Elf Cocktail ($12): A winter drink mixing peppermint with Bailey’s, Kahlua, and Jameson.

Merchandise and gift cards are available with discounts, perfect for holiday gifts!

Pizza Hut's Tomato Wine Launch

In a bold move, Pizza Hut introduces its first-ever pizza wine made from tomatoes, collaborating with Irvine's Just Beyond Paradise Winery. This unique beverage:

• Mimics the taste of a chilled white wine with a tomato twist.
• Available online at $25 per bottle.
• Designed to shake up your holiday gifting—cheers to that! 🍅🍷

Sources: QSR Magazine, Restaurant Dive

Major Acquisitions Shaping the Industry

Jersey Mike's Acquired by Blackstone

• Blackstone acquires a majority stake in Jersey Mike's.
• Deal valued at approximately $8 billion.
• Founder Peter Cancro retains significant equity and leadership role.
• Expansion plans:
  • 300 new openings in 2024.
  • Aiming for 300 stores in Canada by 2034.

Craveworthy Brands Expands with Fresh Brothers Pizza

• Craveworthy Brands acquires Fresh Brothers Pizza, a 22-unit California chain.
• Specializes in Chicago-style tavern pizza.
• Plans to franchise and expand nationally.
• Focus on quality ingredients and diverse dietary options, including vegan and gluten-free.

Summary:

These acquisitions signal significant growth in the QSR industry. With Blackstone's investment, Jersey Mike's is set for rapid expansion and technological advancements. Craveworthy's acquisition of Fresh Brothers allows it to tap into the West Coast market, broadening its brand footprint.

Sources: QSR Magazine, Restaurant Business, Nation's Restaurant News

Expansion and Growth Plans

Toppers Pizza Grows in Wisconsin

Toppers Pizza is set to open a new location in Monona-McFarland, Wisconsin, in 2025. Operated by siblings Theresa and Cyrus Hoppe, this expansion aims to serve local fans without the need to travel to Madison. Toppers focuses on internal growth, bold flavors, and innovative menu options.

Honeygrow's Northeast Expansion

Philadelphia-based Honeygrow is expanding with new leases in Massachusetts, Maryland, New Jersey, and Pennsylvania. Surpassing 50 locations and entering its eighth state, the chain is excited to introduce its unique dining experience to new customers.

Sources: QSR Magazine, Fast Casual

Legal and Regulatory Updates Impacting the Industry

Overtime Rule Overturned

A Texas judge struck down the Biden administration's overtime rule that would have raised the threshold to nearly $60,000 by 2025, affecting nearly 4 million workers. The threshold reverts to $35,568, with industry leaders welcoming the decision as a relief for small businesses.

McDonald's Invests Over $100 Million Post E. Coli Outbreak

McDonald's is investing over $100 million to recover from an E. coli outbreak traced to raw onions, affecting 104 people across 14 states. Recovery strategies include:

• $65 million supporting impacted franchisees.
• $35 million for marketing initiatives.
• Shifting towards "holistic value" marketing.

Sources: Restaurant Business, Nation's Restaurant News

Technology and AI in Restaurants

AI Lessons from Fast Food Chains

Restaurants are cautiously exploring AI technology:

• White Castle and Taco Bell adopted voice AI for drive-thru orders.
• McDonald's paused their AI order-taking due to challenges like background noise.
• Wendy's attempted dynamic pricing but faced customer confusion.

Key Takeaway: AI should enhance customer experience, not complicate it. Thoughtful implementation and clear communication are essential.

Sources: Point of Sale Cloud, LLC

Market Trends and Consumer Preferences

Rising Labor Costs

• 89% of restaurant operators anticipate rising labor costs.
• Average industry wage climbed to $14.58.
• 65% have raised menu prices to cope.
• 48% are cross-training staff to manage various roles.

Rise of Solo Dining

• 60% have dined solo in the past year.
• Restaurants encouraged to adapt by offering smaller menus and modern technology.
• Solo diners present an opportunity to enhance customer service and optimize operations.

Sources: Restaurant Business, Modern Restaurant Management

Ingredient Innovations and Sustainability

Milkish Introduces Watermelon Seed Milk

A new plant-based milk alternative made from watermelon seeds, Milkish offers:

• 50 calories per cup with 2 grams of protein.
• No added sugars and a natural nutty flavor.
• Priced at $4.99 for a 32-oz bottle.
• Aims to be an affordable and sustainable option.

Phytolon's Natural Food Colors

Israeli startup Phytolon:

• Receives investment from Rich Product Ventures.
• Uses precision fermentation to create natural food colors.
• Focuses on sustainability and health benefits.
• Aims to integrate innovations into bakery and dessert segments.

Sources: Food Business News

Operations and Management Insights

Avoiding Legal Pitfalls in Restaurants

Key strategies to navigate legal challenges:

• Always have legal counsel for leases and disputes.
• Ensure supply chain transparency for food safety.
• Implement honest communication in crisis management.
• Utilize third-party HR tools for impartial employee relations.
• Maintain accurate record-keeping for inspections and claims.

Delivery App Strategies

Restaurant owners face high fees up to 45% from delivery apps like Grubhub and DoorDash. Strategies include:

• Adjusting menu prices to cover costs.
• Focusing on volume to improve margins.
• Converting app customers to in-house customers.

Sources: Fast Casual, /r/restaurantowners

Food Safety Alerts

Carrot Recall Due to E. coli

Grimmway Farms has voluntarily recalled organic carrots sold under various brands due to a deadly E. coli outbreak:

• Resulted in one death and at least 38 illnesses across 18 states.
• Consumers advised to dispose of affected products and sanitize surfaces.

Costco Butter Recall

Costco recalls nearly 80,000 pounds of butter due to an undeclared allergen (milk):

• Affects both unsalted and salted Kirkland Signature butter.
• Customers advised to return the product for a refund.

Sources: Salon

Culinary Highlights and Trends

Houston's Cocktail Revolution at Julep

Julep, founded by Alba Huerta in 2014, celebrates:

• Julep Day declared on November 18.
• Earned a James Beard Award.
• Signature cocktails like the Cherry Bounce Sour.
• Integration of Southern hospitality and Mexican-American heritage.

Mendoza's Culinary Transformation

Mendoza, Argentina:

• Gains recognition for innovative restaurants.
• Received four Michelin stars in 2024, surpassing Buenos Aires.
• Chefs embracing global culinary trends alongside local wines.

Sources: FSR Magazine, Eater

Brand Identity Updates

Campbell Soup Co. Becomes The Campbell's Co.

To reflect its diverse brand portfolio, Campbell Soup Co. renames itself The Campbell's Co.:

• Expanding beyond soups into snacks and sauces.
• Aims to preserve its iconic reputation while showcasing growth.

IFMA Rebrands to The Food Away from Home Association

The International Foodservice Manufacturers Association rebrands:

• Adapts to post-pandemic changes in the foodservice industry.
• Broadens membership to include operators and supply chain professionals.
• Focuses on combating food waste as a key initiative.

Sources: Food Business News, QSR Web

Community and Social Impact

Empowered Leadership at Whataburger

Whataburger's leadership is notably female-driven:

• Features an all-women executive team.
• Honors the legacy of founder Lady Grace Dobson.
• Emphasizes community, empathy, and a flexible work culture.

Chicago Restaurants with Purpose

• Mac's Deli employs individuals in recovery from addiction.
• Gerry’s Café provides jobs for adults with intellectual and developmental disabilities.
• These initiatives foster life skills and support community members.

Sources: Nation's Restaurant News, Foodservice Equipment & Supplies

Notable Promotions and Deals

El Pollo Loco's $5 Value Meal

El Pollo Loco introduces the Original Pollo Bowl for $5:

• Responding to customer demand for affordable meals.
• Features citrus-marinated chicken, pinto beans, rice, cilantro, and salsa fresca.
• Part of a strategy to drive traffic growth in 2025.

Wendy's Spicy Chicken Sandwich Deal

Wendy's offers the Spicy Chicken Sandwich for $3.99:

• Available exclusively through their app from November 18 to December 29, 2024.
• Aimed at providing value to customers amidst competitive market offerings.

Sources: Nation's Restaurant News, /r/fastfood

Additional Highlights

McDonald's Espresso Machine Troubles

McDonald's faces temporary unavailability of espresso-based drinks due to faults in their espresso machines. While non-espresso beverages remain unaffected, this impacts offerings like lattes and cappuccinos.

McDonald's E. coli Crisis Response

Investing over $100 million, McDonald's focuses on recovering from an E. coli outbreak linked to raw onions. Recovery efforts include supporting franchisees and shifting marketing strategies to rebuild customer trust.

Sources: Nation's Restaurant News

Technology Investments

Tech24 Expands with New Acquisition

Tech24 acquires A-1 Service Group, marking its fifth acquisition in 2024. This expansion aims to enhance maintenance, repair, and installation services across Wisconsin and Illinois.

Middleby Coffee Solutions Leadership

Luciano Delpozzo appointed as president of the Middleby Coffee Solutions Group. His expertise in the automated coffee market is expected to benefit major chain customers.

Sources: Foodservice Equipment & Supplies

Sustainability and Ingredient Focus

Milkish's Watermelon Seed Milk

Milkish introduces an eco-friendly plant-based milk made from watermelon seeds:

• Low water footprint promoting sustainability.
• Nutty flavor similar to almond milk.
• Aims to be the top plant-based milk choice nationally.

Gum Arabic's Rise in U.S. Market

AGRIGUM INTERNATIONAL partners with AMPAK COMPANY to boost acacia product distribution:

• Emphasizes sustainable sourcing and versatile applications.
• Recognized for improving gut health and digestive wellness.

Sources: Food Business News

Consumer Health and Safety

Consumer Perception of Artificial Sweeteners

• Ongoing concerns despite FDA affirmations of safety.
• 10% increased intake for weight management.
• 11% reduced intake due to safety concerns.
• Honey remains the preferred caloric sweetener; stevia tops among low-calorie sweeteners.

Sources: Food Business News

Cultural and Culinary Experiences

Faroese Gas Station Hot Dogs

In the Faroe Islands, gas station hot dogs, or "meat apples," are a beloved snack:

• Made with Danish sausages and served "French-style."
• Offered with a variety of toppings and sauces.
• Reflects the essence of everyday life in the remote islands.

Sources: Salon

Investments in Food Tech

Keychain Raises $15 Million

Keychain, a platform transforming the packaged goods manufacturing industry:

• Secured $15 million in Series A funding.
• Aims to simplify manufacturer identification, selection, and management.
• Plans to expand AI-powered tools and enter new sectors.

Sources: Food Business News

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