October 17th QSR Roundup: Global Flavors and Industry Shake-ups: What's New in the Restaurant World

Interviewy Team

Interviewy Team

— 10 min read
October 17th QSR Roundup: Global Flavors and Industry Shake-ups: What's New in the Restaurant World
QSR news for Oct 17th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 58 articles to bring you the latest. Estimated reading time saved (at 200wpm): 219 minutes. It'll take you only 12 minutes to catch up.

Burger King's Legal Troubles and Menu Innovations

Burger King’s owner is facing a lawsuit from shareholders over the Carrols acquisition, alleging that the company was pressured into a deal that was not favorable. This legal battle raises concerns about the potential impact on Burger King's operations and reputation.

In the same vein, Subway is spicing up its menu with the introduction of a new Ghost Pepper Bread, marking its first bread innovation in three years. The bread is infused with a blend of ghost pepper, habanero, and paprika-seasoned panko breadcrumbs, topped with Monterey cheddar and jalapeño slices. This fiery addition aims to cater to customers' growing appetite for spicy foods.

Meanwhile, Taco Bell is collaborating with emerging chefs to reinvent its iconic Crunchwrap Supreme. These culinary innovators are bringing creative flavor twists inspired by diverse culinary backgrounds, offering a fresh take on a classic favorite.

Highlights:

  • Subway's Ghost Pepper Bread features a unique spice blend to heat up sandwich options.
  • Burger King’s legal issues could have significant ramifications for the brand.
  • Taco Bell's menu innovations reflect a trend toward culinary collaborations in fast food.

Sources:

  • Nation's Restaurant News
  • Restaurant Business
  • QSR Web

Hot Concepts and Growth Strategies

Insights from 2024 Hot Concepts Winners

At the CREATE conference in Nashville, executives from the 2024 Hot Concepts winners shared their strategies for building successful restaurant brands:

  • Toastique prioritizes franchise partnerships with owner-operators passionate about healthy food, emphasizing team management and a shared vision.
  • Mecha Noodle Bar draws inspiration from immigrant parents, aiming to create a transformational company culture that resonates with both staff and customers.
  • Puttshack combines entertainment with casual dining, offering high-tech mini-golf experiences with patented tracking systems. They're set to open their 20th location soon.
  • Rodney Scott’s BBQ focuses on perfecting barbecue traditions while embracing modernization, blending heritage with contemporary practices.
  • Tacombi started by selling tacos out of a VW in Mexico and now invests heavily in customer experiences and community support to grow their brand.
  • Angry Chickz stands out in the competitive chicken market with a concise menu, no advertising, and strong word-of-mouth, maintaining quality and customer experience as their main drivers.

Jersey Mike's Impressive Growth

Mike Manzo of Jersey Mike’s highlights the importance of brand consistency and culture amidst their substantial growth:

  • Reported $3.34 billion in sales for 2023, a 24.8% year-over-year increase.
  • Expanded to 2,684 locations, marking a 12% growth.
  • Prioritizes intensive training with 500 hours required for operators and over 5,000 classes conducted for nearly 35,000 employees.

Sources:

  • Nation's Restaurant News

Financial Turbulence in the Restaurant Industry

Applebee's Franchisee Bankruptcy

Louisiana Apple, an Applebee's franchisee operating 14 locations, has filed for Chapter 11 bankruptcy. The franchisee is facing a lawsuit over an $8.3 million debt to City National Bank of Florida. Struggles began in mid-2023 with missed payments, leading to legal action from Applebee's due to unpaid royalties. This situation reflects a broader trend of restaurant bankruptcies in 2023, with franchisees grappling with high debt and declining sales.

Navigating Restaurant Bankruptcies

The industry is seeing an increase in bankruptcies due to inflation and cautious consumer spending. Key challenges include:

  • Over-leveraging and past decisions leading to financial strain.
  • Difficulty in securing funding amidst a tight financial landscape.
  • Over-reliance on third-party delivery and discounting harming customer loyalty and profits.
  • Successful brands are prioritizing customer experience and sustainable brand loyalty over short-term financial gains.

Sources:

  • Nation's Restaurant News
  • Restaurant Business

Another Broken Egg Café Expands Lunch Offerings

In response to declining customer traffic, Another Broken Egg Café is innovating its menu with a focus on lunch:

  • New items include Chicken Salad Sandwich, Southern Fried Chicken Salad, Blackened Shrimp Salad, Brunch Jambalaya, Louisiana Gumbo, and Chicken Tortilla Soup.
  • CEO Paul Macaluso emphasizes expanding dayparts and enhancing busy periods to attract a diverse customer base.
  • Seasonal menus are used to differentiate from competitors and keep offerings fresh.

Wild Eggs Partners with Crazy Bowls & Wraps

Wild Eggs, a breakfast and brunch chain, has acquired Crazy Bowls & Wraps. Key points:

  • The Louisville location of Wild Eggs will operate as a virtual kitchen for Crazy Bowls from 4 p.m. to 10 p.m., offering healthy bowls, wraps, and salads via delivery apps.
  • CEO Andy Abbajay states this partnership allows for market expansion with minimal capital outlay.
  • Plans to add standalone Crazy Bowls locations within 12 to 16 months.
  • The merger enhances franchising prospects and revenue opportunities for both brands.

Sources:

  • Nation's Restaurant News
  • FSR Magazine

Global Expansion and Investment

Chick-fil-A's Bold Move into Asia

Chick-fil-A is making a strategic expansion into Asia, starting with Singapore by late 2025:

  • Investing $75 million over the next decade.
  • Over 1,000 people attended a successful pop-up event in Singapore, raising $30,000 for local charity.
  • Singapore is seen as a gateway to the broader Asian market, valued at $33 billion, where KFC currently holds a 39% share.
  • Chick-fil-A plans to replicate its successful owner-operator model to connect with local communities.

Chipotle's New Investments

Chipotle Mexican Grill is investing in:

  • Lumachain, an AI supply chain platform offering real-time visibility and high-quality data analytics to reduce waste and improve efficiency.
  • Brassica, a fast-casual restaurant specializing in customizable Eastern Mediterranean-inspired dishes using locally sourced ingredients.
  • These investments are part of Chipotle's $100 million Cultivate Next fund focused on innovative food concepts.

Highlights:

  • Chipotle's commitment to fresh ingredients and supply chain efficiency.
  • Chick-fil-A's ambitious international growth despite operating only six days a week.

Sources:

  • Nation's Restaurant News
  • QSR Magazine
  • Restaurant Business

Restaurant Sales See Significant Increase

  • Sales at restaurants and bars increased by 1% in September, marking the fastest growth in nearly a year.
  • Food service revenues rose 5% in 2024, surpassing total retail sales growth of 2.6%.
  • Restaurant menu prices are up 3.9% this year, but customers continue to dine out more, especially at independent venues.
  • Factors contributing to this surge include lower gas prices and a generally healthy economy.
  • The industry added nearly 70,000 jobs last month, reflecting strong consumer spending.

Value Promotions and Traffic

  • Despite special value deals, quick-service restaurants face a decline in traffic, with a 2.2% drop in June, worsening to 4% in August.
  • Some chains saw mixed results from value promotions:
    • McDonald's $5 Meal Deal led to higher consumer interest, attracting new and returning customers.
    • Burger King's $5 Meal gained new customers but didn't significantly boost traffic overall.
  • Fast-food delivery traffic increased by 14.7% in Q3, while drive-thru sales declined by 10.2%.
  • Consumers are attracted to larger portions and perceive higher value in offerings, influencing their dining choices.

Sources:

  • Restaurant Business
  • QSR Magazine

Rusty Taco's Fresh Vision Under New Leadership

Revitalizing the Brand

Daniel Smith, the new president of Rusty Taco, acknowledges that the brand needed a refreshed perspective:

  • With over 30 locations across 13 states, the focus is on realigning support and engaging franchisees more effectively.
  • 80% of the team has been switched out to bring in new ideas and energy.
  • Emphasis on listening to franchisees' feedback and utilizing their insights to improve operations and customer engagement.

Marketing and Menu Enhancements

  • Natalie Johnson, the new marketing director, aims to boost brand awareness and better tell the Rusty Taco story.
  • Recent menu evaluations have led to popular additions like the Sunrise Slammer breakfast burrito.
  • The marketing strategy is being revamped to showcase their commitment to real ingredients and authentic flavors.

Future Growth Plans

  • Exploring both traditional locations and nontraditional settings like airports and grocery stores.
  • Seeking operators who invest in local engagement and community connection.
  • Smith promises exciting developments aimed at rejuvenating the brand.

Source:

  • QSR Magazine

Embracing Technology and Improving Operations

The Benefits of Sous Vide Cooking

  • Labor Savings: Implementation of sous vide technology can reduce staffing needs, as seen with a collegiate dining operation decreasing one full-time employee.
  • Speedy Service: Sous vide allows for faster preparation times, such as burgers cooked in under 3 minutes.
  • Waste Reduction: Extends shelf life of products and minimizes moisture loss, leading to greater food yield.

Kitchen Maintenance Importance

  • Neglecting kitchen maintenance can lead to severe financial consequences.
  • Costs for outfitting a kitchen can reach $500,000 or more.
  • Simple issues, like air compressor leaks, can result in annual energy losses exceeding $12,000.
  • Regular preventive measures and staff training are critical to efficient operations and extending appliance life.

Sources:

  • Foodservice Equipment & Supplies
  • FSR Magazine

Surge in Digital Gift Card Sales

  • Gift card sales revenue has risen by 4% year over year, with digital gift cards leading at a 7% increase in 2023.
  • Digital gift cards now represent 34% of the gift card market and are the fastest-growing segment.
  • They are redeemed twice as fast as physical cards, averaging 16.8 days for online versus 35.3 days for in-store.
  • $25 cards are the most sold, making up 34% of sales, while $50 cards saw a 17% increase.
  • Holiday gift card sales increased by 5%, with peak sales in November and December.

Implications for Restaurants

  • Restaurants integrating gift cards with their mobile apps and digital wallets enhance customer loyalty and engagement.
  • The trend underscores the importance of providing seamless digital experiences for consumers.

Sources:

  • QSR Web
  • QSRNext

Community Discussions and Industry Insights

Mentorship in Restaurants

  • A former architect seeks guidance in starting a fast-casual restaurant.
  • Reddit community suggests:
    • Visiting SCORE offices for mentorship and resources.
    • Hiring professionals like CPAs and accountants for financial management.
    • Selecting user-friendly POS systems like Clover and Toast.
    • Understanding that on-the-job experience is invaluable and preparing for hard work.
  • Emphasis on the supportive nature of restaurateurs helping newcomers.

Achieving 20% Labor Costs

  • Discussion on the feasibility of maintaining 20% labor costs in restaurants.
  • Managers and operators express skepticism, citing typical labor costs closer to 27-30%.
  • High-volume sales are necessary to support such low labor percentages.
  • Concerns that cutting labor costs too much could hurt service quality and customer satisfaction.

Sources:

  • /r/restaurantowners
  • /r/Restaurant_Managers

Culinary Mixes and Customer Preferences

Burger Meat Blend Discussion

  • Proposal to mix ground brisket with pork butt to offset rising beef prices.
  • Community feedback highlights concerns:
    • Transparency is essential: Customers must be informed of pork content due to dietary restrictions.
    • Cultural considerations: Important to respect religious and health-related dietary needs.
    • Cooking requirements: Pork must be cooked thoroughly, affecting burger preparation.
  • Overall, the consensus leans toward avoiding pork in beef burgers to prevent customer alienation.

Sources:

  • /r/restaurantowners
  • /r/restaurant

Safety and Operational Challenges

Safety Concerns for Closing Managers

  • A restaurant manager faces harassment from a homeless individual when closing late at night.
  • Community suggestions include:
    • Banning the individual from the premises.
    • Filing police reports and calling for escorts.
    • Ensuring staff don't leave alone and have safety measures like pepper spray.

Brewpub Challenges in Small Towns

  • A brewpub with a tech-heavy self-service model struggles in a small town.
  • Challenges identified:
    • Lack of human interaction leading to decreased customer engagement.
    • High labor costs despite the self-service system.
    • Suggestions to enhance hospitality and adjust the business model to better suit local preferences.

Sources:

  • /r/Restaurant_Managers

International Flavors and Consumer Desires

International Fast Food FOMO

  • Discussion on Reddit about 11 international fast food items U.S. fans wish to try.
  • Mixed reactions:
    • Curiosity about unique offerings like curry tacos.
    • Skepticism toward certain items due to personal preferences.
    • Nostalgia for international experiences and desire for more diverse options in the U.S.

Subway's New Ghost Pepper Bread

  • Reddit users share their experiences with Subway's spicy new bread.
  • Reactions include:
    • Some find it only mildly spicy, while others are fatigued by the ghost pepper trend.
    • Desire for genuine new offerings rather than slight modifications.
    • Nostalgia for past successful menu items and marketing campaigns.

Sources:

  • /r/fastfood

Alleged Onion Scheme

  • A restaurant faces a potential scam where a customer claims an allergic reaction to onions, seeking $3,500 in medical bills.
  • Community consensus is skeptical of the claim:
    • The customer did not inform the staff of the allergy.
    • Suspicion due to lack of immediate reaction and delays in communication.
    • Advice to consult legal counsel and avoid admitting fault.

Music Licensing Concerns

  • Bar owners discuss a company named GMR demanding music licensing payments.
  • Comments express:
    • Skepticism about GMR's legitimacy.
    • Experiences of ignoring their demands without facing consequences.
    • Frustration with the complex landscape of music licensing in the bar industry.

Sources:

  • /r/restaurant
  • /r/BarOwners

Operational Enhancements and Owner Motivations

POS System Solutions

  • A cocktail lounge experiences issues with their outdated POS system.
  • Community advises:
    • Switching to modern, cloud-based POS systems like Toast or SmartTab.
    • Using ethernet connections instead of Wi-Fi for critical systems.
    • Having a backup payment option like Square.

Motivations for Bar Ownership

  • Bar owners share their reasons for entering the industry:
    • Maintaining a community presence in gentrifying neighborhoods.
    • Desire to improve management after experiencing poor leadership.
    • Continuing family legacies and preserving community spaces.
    • Personal journeys from various backgrounds leading to bar ownership.

Sources:

  • /r/BarOwners

Chick-fil-A Expands to Singapore

  • Plans to open first Asian restaurant in Singapore by late 2025.
  • Investment of $75 million over the next decade.
  • Sees Singapore as a crucial gateway to the Asian market.
  • The expansion leverages the owner-operator model for connection and profitability in a competitive landscape.

Essential Cooking Tools for Beginners

  • Highlighting the importance of key kitchen tools:
    • Spatulas: Versatile for flipping, stirring, and scraping.
    • Peelers: Speed up prep and allow for creative tasks.
    • Knives: Essential for various cuts; quality is important for longevity.
    • Tongs and Bench Scrapers: Enhance efficiency and safety in the kitchen.
  • Investing in quality tools contributes to a better cooking experience.

Sources:

  • Restaurant Business
  • Eater

Cultural Cuisine and Celebrations

Diwali Delicacies

  • The pressure cooker symbolizes Diwali's essence, preparing chole bhature, a cherished Punjabi dish.
  • Chole is a chickpea curry with a blend of spices, tempered with tamarind and mint chutneys.
  • Bhatura is a crispy, tangy fried bread accompanying the curry.
  • The dish represents familial bonds and traditions during Diwali festivities.
  • Sharing chole bhature at family gatherings embodies the spirit of love and togetherness.

Sources:

  • Eater

Conscious Consumption and Ethical Choices

Salaam Cola: A Conscious Choice

  • Salaam Cola offers an ethical alternative to Coca-Cola, with 10% of profits pledged to charities supporting Palestine.
  • Founded by Aykiz Shah and launched in the U.K. in November 2023.
  • Features unique flavors and healthier ingredients like natural cane sugar.
  • Part of a broader movement towards conscious consumerism and supporting social causes.
  • Raises questions about challenging market dominance of major brands.

Sources:

  • Eater

Freddy's Frozen Custard & Steakburgers Expands to Canada

  • Plans to open three locations in Winnipeg, Manitoba, starting in 2025.
  • Partnership with local entrepreneurs John Hall and Turner Ethans of Steakburger North.
  • Emphasis on quality and hospitality to provide an authentic community experience.
  • Marks Freddy's first locations outside the U.S., signaling international growth ambitions.

Source:

  • QSR Web

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