November 6th QSR Roundup: Dual-Branded Restaurants, AI Innovations, and Market Trends

QSR news for Nov 6th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 53 articles to bring you the latest. Estimated reading time saved (at 200wpm): 175 minutes. It'll take you only 15 minutes to catch up.

Restaurant Expansion and New Concepts

Dine Brands' Dual-Branded Innovations

Dine Brands is pioneering a dual-branded Applebee’s/IHOP restaurant in Seguin, Texas, expected to open by Q1 2025. This unique concept merges Applebee’s classic fare with IHOP’s beloved breakfast menu, operated by R. Hakim Corp. The restaurant will feature a shared kitchen, allowing customers to seamlessly order from either menu, potentially doubling revenues compared to standalone establishments.

• Up to 15 additional dual-branded sites are planned across the U.S.
• The model includes a drive-up window for both brands, aiming to boost revenue and maintain steady customer traffic.
• Current Applebee’s locations will transition, offering team members new positions.

Source: Nation's Restaurant News, Restaurant Business, FSR Magazine

Beard Papa's Sweet Expansion

Beard Papa's is set to tantalize taste buds with new locations in Cambridge, MA, and NYC, opening on November 14 and 16, 2024. Renowned for its freshly made cream puffs featuring a variety of shell and filling options, the chain operates over 485 stores worldwide. The latest menus promise inventive desserts, and the first 100 customers in NYC will enjoy a special free gift.

Source: Nation's Restaurant News

Tropical Smoothie Cafe's Leadership Shift

Tropical Smoothie Cafe has appointed Max Wetzel as its new CEO, succeeding Charles Watson after 16 years. Wetzel brings extensive experience from CKE Restaurants, Papa John’s, and Kraft-Heinz. He is eager to guide the brand’s growth with a focus on its fun atmosphere and health-centric menu.

• The chain now boasts nearly 1,500 locations across 44 states.
• Acquired by Blackstone for $2 billion.
• Roland Smith has joined the board of directors, supporting the company’s strategic initiatives.

Source: Nation's Restaurant News

Nekter Juice Bar's Ambitious Expansion

Nekter Juice Bar is pursuing a dual-executive strategy to accelerate growth, aiming to double its locations to 500 within three to five years. Corry Reid has been appointed as CMO to modernize the brand and enhance market presence, while Jon Asher transitions to CTO to drive technology innovations and system optimizations.

• Focus on digital solutions in marketing success.
• Initiatives like brand updates and personalized products targeting health-conscious consumers.
• Plans include technology advancements like loyalty programs and data analytics to improve guest experiences.

Source: QSR Web

Thompson Restaurants' New Ventures

Thompson Restaurants launched Hen Quarter Prime in Washington, DC's Buzzard Point, enhancing its presence in the culinary sector. Known for Southern-inspired dishes, the new 6,600-square-foot venue blends comfort with luxury, accommodating over 200 guests with features like private dining and retractable windows.

• Facing challenges from DC's Initiative 82, which eliminates tipping systems.
• The company opts for transparent pricing without service charges.
• Despite rising operational costs, Thompson Restaurants prioritizes customer experience.
• Plans to expand into catering and future openings in Virginia Beach and Norfolk.

Source: Total Food Service

Additional Highlights

• Portillo's is expanding in Texas, utilizing new kiosks and smaller restaurant formats to enhance customer experience and reduce costs.
• Hungry Howie's introduced the Chicken and Waffle Pizza, a unique offering available for a limited time through December.

Source: Portillo's Sales Strategies (Restaurant Business), Hungry Howie's (QSR Web)

Financial Performance and Industry Challenges

Burger King's Sales Trends

U.S. same-store sales dipped 0.4% in Q3, with a 1.5% drop in systemwide sales amidst challenging consumer conditions. The Fiery platform underperformed, while the Royal Crispy Chicken Wrap gained traction. Marketing campaigns like the Addams Family Meal revitalized sales and competitive positioning.

• Emphasis on value offerings, particularly the $5 Your Way Meal, has been crucial.
• Burger King is in the midst of a $400 million turnaround plan, aiming to modernize 85%-90% of its locations by 2028, projecting a low-teen sales uplift.
• $120 million of the budget is dedicated to advertising, enhancing market share and digital engagement.

Source: QSR Magazine

Popeyes Faces Sales Decline

Popeyes U.S. reported a 3.8% decline in comparable sales in Q3 2024, marking the first drop in recent quarters. The decline is attributed to a value-sensitive market and a lack of appealing promotions.

• Despite 3.6% net restaurant growth, systemwide sales decreased by 0.8%.
• Competitors like Taco Bell and McDonald's are excelling with their value menus.
• Popeyes plans to introduce new $5 chicken offers to attract customers.
• RBI is streamlining operations with simplified kitchen conversions to enhance the guest experience.

Source: Restaurant Dive

Portillo's Q3 Performance Review

Portillo’s Inc. presented mixed results for Q3, with revenues on the rise but same-store sales experiencing a decline. The company faces challenges from inflated costs and competition from discount brands.

• CEO Michael Osanloo is focusing on improving average checks and expanding the restaurant footprint, particularly in the Sun Belt.
• The introduction of kiosks has enhanced the customer experience.
• Despite reduced advertising effectiveness amid election noise and price wars, Portillo's maintains high annual sales per unit at $9.1 million.
• Reported a 33% increase in net income to $8.8 million on revenues of $178.3 million across 89 locations.

Source: Nation's Restaurant News, Restaurant Business

TGI Fridays Faces Bankruptcy Challenges

TGI Fridays has filed for Chapter 11 bankruptcy amidst leadership turmoil and a shift towards entertainment and sushi offerings that may not resonate with its core identity. The chain has seen a 70% decline in U.S. locations since 2013, now with only 164 outlets remaining.

• The COVID-19 pandemic has significantly impacted foot traffic.
• A 39% drop in foot traffic recently as customer preferences shift away from after-work gatherings.

Source: Nation's Restaurant News

Buca di Beppo's Auction Outcome

Buca di Beppo is being sold to Main Street Capital Corporation for $27 million following court approval. After filing for Chapter 11 bankruptcy in August due to $39 million owed to Main Street, the chain has struggled with a 5% sales decline in 2024 and 14% since 2021.

• Closure of 20 underperforming locations reduced the total from 64 to 44.
• Despite implementing cost-saving measures, liquidity issues persisted.
• Net revenue at $74.8 million and EBITDA at $3.1 million from January to May 2024, declining by 10% and 18% respectively.

Source: Restaurant Dive

Highlights

• Challenges Facing QSR Profitability: Labor costs are skyrocketing, outpacing price increases and squeezing profit margins. Ingredient prices have surged, leading to menu simplifications and a focus on high-margin items.
• Fast Food Market Recovery: Sales for Burger King and Popeyes saw improvement in October, driven by enhanced promotions and favorable economic conditions like lower gas prices and decreasing inflation rates.

Source: Restaurant Business

Technology and Innovation in the QSR Industry

Yum Brands Embracing AI

Yum Brands is integrating AI across its Taco Bell, Pizza Hut, and KFC operations, with over 40 AI-driven projects underway. Focus areas include labor scheduling, inventory management, customer feedback, and quality control to enhance efficiency.

• Taco Bell has implemented voice-activated AI in drive-thrus, managing over 2 million orders with positive feedback.
• AI optimizes loyalty programs, leading to membership growth and improved service speed in 160 locations.
• Plans are in place to expand AI initiatives to other brands, enhancing marketing and personalized customer interactions.

Source: Restaurant Business

Nekter Juice Bar's Tech Advancements

As part of its expansion strategy, Nekter Juice Bar is investing in technology innovations and system optimizations.

• Jon Asher, the new CTO, is focusing on tech advancements like loyalty programs and data analytics.
• Aims to improve guest experiences and operational efficiency through digital solutions.

Source: QSR Web

Ventless Cooking Insights

The No Vent November event in New Jersey will highlight the profit-boosting benefits of ventless cooking systems, tailored for today's restaurant industry. Attendees will gain insights on integrating ventless technology into their kitchens, enhancing efficiency and flexibility.

• Continuous advancements in ventless technology make this gathering a key opportunity for industry professionals.

Source: Total Food Service

Maximizing Restaurant Performance

During the Fast Casual Executive Summit, industry leaders discussed financial management and data utilization challenges.

• The necessity for centralized data systems and effective coaching for franchisees.
• Focus on critical KPIs, scalable technology solutions, and storytelling with data to demonstrate financial benefits.

Source: Networld Media Group

Highlights

• Maximizing Limited-Time Offers: LTOs have increased by 53% over the last four years, highlighting their effectiveness in attracting customers. Strategies include aligning LTOs with brand values, capitalizing on market trends, and creating immersive dining experiences.

Source: Restaurant365

Impact of Elections and Legislation on Restaurants

Key Wage Initiatives for Restaurants

• California's Prop 32: Proposes raising the minimum wage to $18 per hour, effective January 1, 2024, with adjustments based on living costs. Voter support is uncertain due to concerns over rising prices.
• Massachusetts' Question 5: Seeks to phase out the tip credit, opposed by Governor Maura Healey, who warns it could harm restaurants and jobs.
• Arizona's Proposition 138: Aims to enshrine the tip credit in the state constitution, allowing employers to pay tipped workers a lower cash wage as long as tips make up the difference.

Source: Restaurant Business

Food Traceability Rule Deadline

The food industry faces challenges in meeting upcoming federal safety regulations requiring ingredient tracking from farm to table. The Food Traceability Rule (FSMA 204), effective January 2026, mandates data tracking systems to trace certain foods.

• Independent restaurants are particularly concerned about the $50,000 per product compliance cost and the complexity of implementation.
• Industry advocates, including the National Restaurant Association, are lobbying for a two-year extension.

Source: Restaurant Business

Impact of Elections on Restaurants

The recent presidential election has raised questions about its impact on the restaurant industry's financial trajectory.

• Experts stress the importance of the restaurant industry remaining engaged and vigilant in political developments that affect daily operations and regulatory environments.

Source: Restaurant Business

Trump's Presidential Win Impact

Donald Trump secured a decisive victory in the presidential election, eliciting concerns among restaurateurs about potential regulatory changes.

• Key ballot measures saw mixed outcomes, with some states rejecting tip credit phase-outs while others voted to increase the minimum wage.

Source: Restaurant Business

Labor and Staffing Challenges

Hilton Workers' Strike Ends

After a 24-day strike, 600 Hilton hotel employees will return to work following a tentative agreement between UNITE HERE Local 26 and Hilton Hotels.

• The agreement aims to match wages and benefits of similar contracts in the area.
• The strikes have underscored significant issues like wage stagnation, rising operational costs, and high staffing demands within Boston's hotel industry.

Source: Total Food Service

Transforming Hospitality Wage Structures

Restaurant operators are addressing staffing and retention challenges by enhancing employee support beyond wages.

• Positive Company Culture: Foster supportive environments to attract and retain talent.
• Operational Efficiency: Implement systems ensuring clarity for teams.
• Ongoing Training: Encourage growth through structured training programs.
• Tech Investments: Prioritize technology that boosts employee satisfaction and business success.

Source: Modern Restaurant Management

Dealing with Bad Staff

A restaurant manager faces challenges with missing kitchen staff during service.

• Community feedback emphasizes the importance of staying open if possible, strategic hiring, establishing clear rules, and possibly making tough decisions about existing staff.
• Strategies include immediate hiring efforts, focusing on quality over quantity, and utilizing managerial experience to handle the situation effectively.

Source: /r/Restaurant_Managers

Job Search After Being Fired

An individual shares their experience of being fired from a restaurant job as a runner despite extensive busser experience.

• Advice from commenters includes omitting the job from their resume or presenting it as a poor fit.
• Preparing to address the employment gap and possibly adjusting the narrative during job searches.

Source: /r/Restaurant_Managers

Marketing and Promotions in the QSR Sector

Taco Bell's Success Amid Economic Challenges

Taco Bell continues to outperform competitors like KFC and Pizza Hut, achieving a 4% increase in U.S. same-store sales in Q3.

• The brand accounts for 75% of Yum! Brands' U.S. profits.
• Launching Cheesy Street Chalupas has boosted chicken dish popularity by 10 points.
• Technological advancements include AI enhancements in drive-thrus.
• Digital sales surged by 30%, and loyalty program engagement rose by 50% year-over-year.
• Nostalgic menu items priced under $3 have resonated with customers.

Source: QSR Magazine

Cult-Like Brand Loyalty Strategies

Scott Snyder, CEO of Bad Ass Coffee of Hawaii, outlines five strategies to build a dedicated customer base:

• Authenticity: Integrate brand identity into every business aspect for genuine customer connections.
• Reward Programs: Offer unique incentives that mirror the brand's character.
• Mission-Driven Culture: Engage customers through meaningful initiatives linked to the brand’s values.
• Exclusive Community: Create clubs with special perks and access to unique products.
• Merchandising: Provide branded merchandise online to enhance visibility.

Source: QSR Web

Hungry Howie's Chicken and Waffles Pizza

Hungry Howie's has introduced the Chicken and Waffle Pizza, available for a limited time through December.

• Features a Maple Sugar Flavored Crust topped with mozzarella cheese, crispy chicken bites, waffle pieces, bacon, and a drizzle of maple syrup.
• Designed to delight customers with a sweet and savory combination.

Source: QSR Web

KFC's Recruitment Push

KFC is ramping up hiring, adding over 700 new staff in the U.K. and Ireland ahead of the busy Christmas season.

• Aiming to strengthen its presence in the competitive chicken market.
• Broader strategy includes opening 500 new restaurants in the next decade, creating over 20,000 new jobs.

Source: QSR Web

Restaurant Industry Insights and Trends

Culinary Adventures in Chicago

Chicago's vibrant dining scene is showcased through a tasting tour featuring:

• Chef Joe Flamm's Croatian-Italian creations, including Pork Ribs Pampanella and Beef Cheek Gnocchi.
• Publican Quality Meats' spatchcocked chicken and Porchetta Sandwiches.
• Leña Brava's Watermelon Aguachile and unique cocktails.
• Eataly's Pollo alla Milanese paired with fine red wine.

Source: Restaurant Business

Total Food Service Highlights

• Exclusive Interview: Tracy Kim, CEO of DIG Restaurant Group, shares groundbreaking strategies.
• Flynn Group’s Mercado: Discusses team building for franchises.
• Varnum Ascends: Takes leadership of SHFM, offering fresh perspectives.

Since 1990, Total Food Service magazine has been a crucial resource for hospitality operators and chefs.

Source: Total Food Service

DIG Restaurant Group Insights

Tracy Kim, CEO of DIG Restaurant Group, discusses innovative strategies transforming the foodservice landscape.

• Focus on sustainability initiatives and community engagement.
• Reflections on post-pandemic challenges and emerging trends shaping future dining experiences.

Source: Total Food Service

Global Caviar Market Insights

The global caviar market is expanding, valued at $330 million with an expected annual growth rate of 5% over the next five years.

• Dominated by suppliers from China, Russia, and the U.S.
• Growing trend towards sustainability is driving more environmentally friendly harvesting methods.
• As Asia-Pacific cuisines gain popularity, caviar is increasingly incorporated into luxury offerings.

Source: BlueCart

Food Safety and Quality Concerns

Cheese Recall Alert

A voluntary recall of several soft-ripened cheeses, including brie and camembert, has been issued due to potential listeria contamination.

• Initiated by Savencia Cheese USA after routine tests indicated possible contamination.
• Recalled Products: Aldi Emporium Selection Brie, La Bonne Vie Brie and Camembert, Industrial Brie, Market Basket Brie, and Supreme Oval cheeses.
• Health Impact: No confirmed adverse health reports linked to the cheeses.
• Consumer Action: Return recalled products for a full refund.

Source: Salon

Mystery of Digestive Issues at Benihana

A Reddit user experiences consistent digestive issues after meals at Benihana, despite trying various menu items.

• Community responses suggest potential causes like cooking oils, high sodium content, or specific ingredients like ginger sauce acting as a laxative.
• Recommendations include checking for food allergies or trying different locations.

Source: /r/restaurant

Restaurant Owner Discussions and Advice

Struggles with SpotOn Devices

A restaurant owner shares frustrations after switching from Toast to SpotOn, citing persistent connectivity issues and malfunctioning devices.

• Problems include a device that won't take payments and another that constantly beeps.
• Commenters have mixed experiences, with some suggesting reaching out to customer support.
• Others recount similar issues, including one user who reverted to Toast after only three months due to SpotOn's unreliability.

Source: /r/restaurantowners

Los Angeles Restaurant Food Suppliers

A Reddit thread seeking meat supplier recommendations for a Los Angeles restaurant garnered numerous responses.

• Users recommended suppliers like Newport Meats, Rocker Brothers, Chefs Warehouse, and Sterling Meats.
• Local suppliers such as Premier Meats and Luxe Seafood were also highlighted.
• Emphasizes the importance of regional preferences and reliable sources for restaurant success.

Source: /r/restaurantowners

Bar Ownership Without Experience

Reddit users debate the challenges of opening a bar without industry experience.

• Hiring Friends/Family: Can lead to entitlement and trust issues.
• Need for Proper Management: Hiring a qualified consultant or managing partner is recommended.
• Theft Awareness: Understanding potential staff theft and investing in security measures.
• Realistic Expectations: Emphasize education, hiring support, and preparation.

Source: /r/BarOwners

Bar Ownership Profitability

A Reddit thread explores the profitability of owning a bar, with mixed opinions.

• Income Comparison: Some argue that owning a bar doesn’t yield higher income than previous jobs.
• Success Factors: Taking over an existing bar can lead to success.
• Market Conditions: Current market conditions are tougher, making profitability more challenging.

Source: /r/BarOwners

Customer Experience and Feedback

Restaurant Improvement Suggestions

Reddit users share their wishes for restaurant improvements:

• Clean Restrooms: A fundamental expectation for hygiene.
• Seasonal Menus: Introducing variety and freshness.
• Paying the Bill at the Table: Enhancing convenience.
• Fun Experiences: Themed makeovers, like Halloween transformations.
• Mocktails and Smaller Portions: Catering to diverse customer preferences.
• Better Staff Compensation: Improving employee satisfaction.

Source: /r/restaurant

Mulled Wine Experiences

Bar owners discuss best practices for serving mulled wine:

• Waste Management: Monitor leftovers to minimize waste.
• Equipment Recommendations: Use induction burners or crock pots.
• Alcohol Preservation: Fortify with spirits like Grand Marnier.
• Serving Suggestions: Serve in mugs with unique garnishes.

Source: /r/BarOwners

Gratin Dish Confusion

A Reddit discussion about the correct name for a specific dish reveals varied terminology.

• Referred to as "boat," "rarebit," "au gratin," "gratin dish," or "oval stoneware rarebit."
• Highlights the lack of a universally accepted name and cultural variations.

Source: /r/restaurant

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