October 21th QSR Roundup: Spicy Trends and Digital Innovations Amid Challenges in the Fast Food Industry

QSR news for Oct 21th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 44 articles to bring you the latest. Estimated reading time saved (at 200wpm): 155 minutes. It'll take you only 13 minutes to catch up.

Fast Food Trends and Innovations

As Halloween approaches, ghost peppers are making a spicy comeback in the fast food scene. While these fiery peppers are known for their intense heat, restaurants are toning down the spice to make dishes more approachable for customers. KFC is making a strategic move by shifting focus from their chicken sandwiches to introducing new Original Recipe Tenders, seasoned with their signature 11 herbs and spices.

The TikTok generation is setting new expectations for restaurant brands. In the age of social media, a single post can significantly influence brand reputation. Even a small mistake on social platforms can impact a restaurant's image, regardless of its prestige.

Sources: Nation's Restaurant News

Restaurant Industry Highlights

• $1 Billion Lawsuit: Restaurant Brands International faces a hefty lawsuit for allegedly pressuring Carrols Restaurant Group into a massive buyout after its acquisition in May.
• Starbucks' Hiring Spree: CEO Brian Niccol brings on former Chipotle marketing executive Tressie Lieberman as the new Global Chief Brand Officer, starting November 4.
• Struggling Independents: A concerning 43% of independent restaurant operators missed rent payments in September. While this is a slight decrease from August's 45%, it's an increase from summer lows.
• Election Impact on Dining: Red Robin CEO G.J. Hart suggests that electoral uncertainty is deterring consumers from dining out, but he expects a resurgence in traffic post-election.

Sources: Nation's Restaurant News

Halloween Specials and Promotions

Wendy's is getting into the spooky spirit with the introduction of its limited-edition Boo! Bag Meal Bundle for Halloween. This festive package includes a Dave's single, fries, a Frosty, and a glow-in-the-dark Bone Chiller figure. Alongside the food, customers receive a Boo! Books coupon booklet offering free Jr. Frosties and a discounted kids' meal. Each Boo! Book sold supports foster care initiatives through the Dave Thomas Foundation for Adoption, showcasing Wendy's commitment to family and social responsibility.

Sources: Nation's Restaurant News

Digital Innovations in Dining Experiences

Chick-fil-A is launching the Chick-fil-A Play app on November 18, aiming to promote family interactions through a variety of digital content, including games, podcasts, animated series, and e-books.

The app's development spanned two years, driven by consumer feedback and changing family dynamics. With digital sales reaching nearly 50% at some locations, Chick-fil-A is investing in mobile pickup lanes and innovative technology.

Content Offerings:

• WATCH: Original animated shows featuring the Chick-fil-A Cows.
• LISTEN: Kid-friendly podcasts perfect for trips.
• PLAY: Engaging games and conversation starters.
• CREATE: Interactive video recipes and crafts.
• READ: E-books and interactive stories for family enjoyment.

This initiative complements previous ventures like pennycake, a brand focused on family activities. Chick-fil-A aims to foster quality family time, countering the average 37 minutes of weekday family interaction.

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

Financial and Legal Updates in the Restaurant Industry

Investor Push for Potbelly Sale

An influential Potbelly shareholder is urging the company to boost shareholder value, possibly through a sale. Immersion Investments claims that the stock is undervalued despite growth and improvements. They suggest potential acquisition interest from private equity, aggressive share buybacks, and cost controls.

Potbelly’s franchise program has seen 234 commitments and aims for 2,000 stores, achieving significant margins and a notable increase in digital business. The firm estimates a potential $17 million in franchise revenue from current commitments, enhancing future EBITDA significantly.

Sources: QSR Magazine

TGI Fridays Bankruptcy Preparations

TGI Fridays is reportedly preparing for a potential Chapter 11 bankruptcy filing, highlighting ongoing struggles in a competitive market.

Key Points:

• Engaging with advisers and lenders regarding a bankruptcy filing in Texas within weeks.
• Closed about 50 locations this year.
• Struggling to manage sales growth, exacerbated by inflation.
• Securitization issues leading to mismanagement of fees and loss of control over assets.
• Would mark the third casual-dining chain to declare bankruptcy this year, following Red Lobster and Buca di Beppo.

Sources: Restaurant Business, FSR Magazine

Grubhub Enhances Deliveries via Amazon Key

• Amazon Key gives Grubhub couriers easier access to apartment buildings and gated communities.
• Nearly 1 million deliveries completed with reduced help line calls by over 50%.
• Cancellation rates dropped by 22%.
• Over two-thirds of couriers rated their Amazon Key experience a 5 out of 5.
• This partnership bolsters Grubhub's position against rivals like DoorDash and Uber Eats.

Sources: Restaurant Business, Restaurant Dive

Impact of Politics on Fast Food

Trump Flips Fries for Votes

• Donald Trump serves fries at a temporarily closed Pennsylvania McDonald's, engaging with middle-class voters.
• The visit revolves around the contentious claim that Kamala Harris never worked at McDonald's, fueling political debate.
• McDonald's clarifies it does not endorse any political candidates, emphasizing neutrality.
• One in every eight Americans has worked at McDonald's, highlighting its role as a major U.S. employer.
• Despite backlash, the event gained massive media and social media attention, acting as an unintentional promotional stunt for the fast-food chain.
• Both Trump and Harris express their support for the working-class jobs McDonald's provides, intertwining the brand in political discourse.

Sources: Restaurant Business, Salon.com, /r/restaurant

Sustainability and Environmental Focus in Restaurants

Restaurants are facing the challenge of communicating sustainability while ensuring enjoyable dining experiences.

• PLNT Burger launched a digital tool that tracks resources saved through vegan meals, helping customers connect choices to environmental impact.
• Many restaurants focus on local and organic sourcing but avoid heavy climate discussions to keep the dining experience positive.
• Yang's Kitchen emphasizes quality ingredients while engaging in sustainable farming practices via Zero Foodprint.
• Crave Fishbar promotes sustainable seafood practices and maintains clear sourcing information without overwhelming diners.
• Despite growing consumer awareness, only 34% are willing to pay extra for sustainable options.
• Educating diners about the necessity and costs of sustainable eating remains a hurdle.

Sources: Eater, Civil Eats

Changes in Leadership and Management

Starbucks' New Vision with Tressie Lieberman

• Brian Niccol, the CEO of Starbucks, aims to retell the brand's story and reconnect with its roots as a community coffeehouse.
• Tressie Lieberman will join as the Global Chief Brand Officer on November 4, bringing experience from Chipotle, Taco Bell, and Pizza Hut.
• The company's structure is evolving, with Dawn Clark and Angele Robinson-Gaylor reporting directly to the North America President.
• Starbucks has faced challenges, with U.S. transactions dropping 7% in Q2.
• Niccol plans to focus on premium offerings rather than discounts, investing in technology, enhancing customer-employee relationships, and limiting menu complexity.
• Commitment from Niccol: “We’re getting back to Starbucks,” revitalizing the brand's welcoming coffeehouse identity.

Sources: QSR Magazine, Restaurant Dive

Fuzzy's Taco Shop Leadership Changes

• Patrick Kirk promoted to President and CMO, shaping the Fuzzy’s experience and future growth.
• Marshall Claycamp, formerly with IHOP, appointed COO, overseeing operations and franchises.
• Plans to open 40 new units over 8 years in Arizona and Texas, marking a 30% increase in store count.
• Successful value promotions like the Cali-style Steak Taco for $5.
• Store count declined from 137 to 127 units over the past year, with a 7.5% drop in same-store sales in Q2.
• Dine Brands acquired Fuzzy’s for $80 million in 2022, looking to innovate further.

Sources: Restaurant Dive, Foodservice Equipment & Supplies

Unique Dining Experiences and Cultural Highlights

The Ritual of Jebena

Ethiopian coffee culture centers around the jebena, a traditional coffee pot that embodies community and heritage.

• Ethiopia consumes more than half of its coffee production, highlighting its cultural importance.
• The jebena is a symbol of connection, often carried by refugees.
• Brewing with a jebena involves several steps, encouraging social interaction, including sharing aromas and serving by age.
• The coffee ceremony lasts 1-2 hours, promoting relaxation over fast-paced options.
• Brewing guidelines: Use medium grind coffee; 25g of coffee with 150ml of water per serving.
• Jebenas can be found in local Ethiopian shops or online, priced between $20 and $100.

Sources: Eater

Instant Coffee Revolution

Craft roasters are transforming instant coffee, producing options that rival traditional brewing methods.

• Notable players like Swift Cup Coffee are creating unique flavors using high-extract concentrates.
• Cometeer emerges as a standout for its superior taste, though it's pricey and requires careful storage.
• Convenience, quality, complexity, and cost remain pivotal considerations in this market.

Sources: Eater

Operational Challenges and Advice for Restaurant Owners

Food Costing Essentials for Restaurants

With tight profit margins, effective food costing is essential. Owner Michelle O’Connor states food prices have tripled since 2021, making accurate cost assessments crucial for daily operations.

• Programs like reciProfity help owners track inventory and optimize pricing strategies.
• Technology allows for up-to-date analysis of ingredient costs and waste management.
• Vital for survival in an evolving market.

Sources: Restaurant Dive

Essential Traits for Restaurant Managers

Hiring often overlooks crucial traits:

• Adaptability: Managing fast-paced changes without stress.
• Strong Communication Skills: Ensuring clear information flow and team cohesion.
• Customer Centricity: Prioritizing dining experience and customer satisfaction.

Identifying these traits can elevate the hiring process, choosing managers who excel beyond basics.

Sources: Modern Restaurant Management

Reddit Discussions on Restaurant Ownership

First Restaurant Anxiety

A user shared their anxiety about buying their first restaurant, facing imposter syndrome despite experience. Commenters offered support:

• Self-Worth: Recognizing funding approval as a sign of viability.
• Managing Overwhelm: Suggestions to create to-do lists and focus on phases.
• Economic Timing: Warnings about the challenging time due to increased costs.
• Operational Advice: Tips on financial management, partnerships, and having advisors.
• Emotional Support: Encouragement that the journey is part of the fun despite challenges.

Sources: /r/restaurantowners

High Electricity Bill Concerns

A restaurant owner is frustrated over unexpectedly high electricity bills in a smaller new space. Potential causes and advice include:

• Possible Factors: Air conditioning usage, shared electrical systems, inefficient appliances.
• Recommendations:
  • Hire an electrician for an audit.
  • Check air conditioning settings.
  • Use automated power-saving plugs.
  • Explore metering equipment to identify high-usage appliances.

Sources: /r/restaurantowners

Closing Communication Strategies

A restaurant owner preparing to close due to tax debt asks about informing staff and patrons. Key insights:

• Timing: Early announcement may drive staff away; a one-month notice is suggested.
• Staff Support: Offer letters of recommendation and handle professionally to avoid burning bridges.
• Emotional Impact: Balancing transparency with operational stability, considering the emotional effect on employees and customers.

Sources: /r/restaurateur

Sandwich Shop Location Dilemma

A gluten-free sandwich shop owner is concerned about low visibility and attracting the wrong clientele.

• The shop covers expenses but relies heavily on delivery orders.
• Seeking advice on finding a new location with higher foot traffic or increasing marketing efforts.
• Commenters agree on the importance of foot traffic and suggest considering a move or focusing on delivery.

Sources: /r/restaurateur

Promotions and New Offerings

Ruby Tuesday's Garden Bar Pass

Ruby Tuesday is offering a 30-day All-You-Can-Eat Garden Bar Pass for $39.99.

• Community Reaction:
  • Surprise that Ruby Tuesday still operates.
  • Questioning the appeal and accessibility of the pass.
  • Some note the inconvenience due to location closures.

Sources: /r/fastfood

Pizza Hut's Exclusive Personal Pan Pizza

Pizza Hut launched The Personal Pan Pizza Hut pop-up in NYC.

• Offers the iconic Personal Pan Pizza with new toppings like Pesto Swirl and Chicken Sausage.
• Open on October 22 and 23, reservations on a first-come, first-serve basis.
• Aims to blend tradition with modern tastes for pizza enthusiasts.

Sources: QSR Web

Domino's Supports St. Jude

Domino's Pizza is kicking off its annual fundraiser for St. Jude Children's Research Hospital.

• Customers can donate through Jan. 5, 2025.
• Part of the 'Thanks and Giving' initiative that has raised over $125 million since 2004.
• Aims to reach a $300 million fundraising goal by 2034, marking a 30-year partnership.
• Encourages customer participation across 21,000 stores in over 90 markets.

Sources: Pizza Marketplace

Additional Industry Insights

Wholesale Food Suppliers Overview

• Wholesale suppliers are essential for restaurants, providing bulk ingredients.
• Types of Suppliers:
  • Specialized Suppliers: Focus on niches like meat or produce.
  • Broadliners: Offer diverse products across categories.
• Local Distributors:
  • Offer flexibility and partner with local producers.
  • Unlike nationwide suppliers, they often have lower minimum orders.
• Ordering Made Easy:
  • Many have eCommerce platforms for seamless ordering.
  • Renowned distributors include Sysco, US Foods, and Gordon Food Service.
• Automation Trend:
  • Restaurants are increasingly using platforms like BlueCart to streamline supply chains.

Sources: BlueCart

Dust Extraction in Food Processing

Hidden hazards from dust and particulate matter are a concern in food processing.

• Risks Include:
  • Allergen cross-contamination from airborne particles.
  • Mold growth from spores.
  • Aerosolized pathogens like Salmonella.
• Effective Mitigation Requires:
  • Multi-layered dust control solutions.
  • Dust extraction systems and high-efficiency air filtration.
  • Personal protective equipment.
  • Environmental monitoring and regular audits for compliance and safety.

Sources: Food Industry Executive

Bar Ownership and Management Discussions

Small Bar Insurance Costs

A UK small bar owner seeks advice on insurance costs.

• Challenges: Lack of knowledge about necessary insurance types and costs.
• Advice from Peers:
  • Contact local brokers for tailored solutions.
  • One owner secured a policy for about £850 per year, including employers liability, public liability, and protection for loss of stock and property damage.
  • Emphasis on personalized insurance policies rather than generic online quotes.

Sources: /r/BarOwners

Bar Owners Q&A

A weekly Q&A for bar owners and customers brings up several topics:

• Insurance Woes: Handling cancellation of liquor liability insurance and exploring options.
• Customer Service Frustrations:
  • Bartenders avoiding eye contact can harm customer experience and tips.
  • Suggestion to monitor staff behavior and address engagement issues.
• Future Tech:
  • Interest in robotic service in bars, hinting at future industry trends.

Sources: /r/BarOwners

Technology and Operational Solutions

Restaurant POS System Suggestions

A restaurant owner seeks recommendations for a POS system to address bookkeeping discrepancies.

• Recommendations Include:
  • Square: Affordable and simple.
  • Aloha: Offers more features.
  • Toast: Functional but be cautious of fees.
  • Dinerware: Varies in cost and functionality.
• Considerations:
  • Identify specific needs like remote access and ease of use.
  • Contact merchant services that may provide a POS system.
  • Gather insights from fellow owners for informed decisions.

Sources: /r/restaurant

App for Managing Restaurant Shortages

An app creator seeks feedback on a tool to help manage staff shortages.

• App Features:
  • Customers scan a QR code to view menus, place orders, and pay.
  • Reduces wait times and eases staff pressure.
  • Tracks data for managers.
• Community Response:
  • Mixed feelings about QR codes; some diners prefer traditional service.
  • Concerns about replacing staff and the impact on the dining experience.
  • Some restaurants have excess staff, questioning the app's relevance.

Sources: /r/restaurant

Branding and Naming Strategies

Dumpling Restaurant Name Ideas

An entrepreneur is excited about opening a dumpling restaurant, proposing the name "Dumplism".

• Community Feedback:
  • Mixed opinions; name may be hard to pronounce and remember.
  • Suggestions for simpler names like "Mina's Dumpling House" or "Dumpling Dojo".
  • Concerns over negative associations with the word 'dump'.
  • Emphasis on Simplicity: For better word-of-mouth and online discoverability.
• Key Insights:
  • Importance of a catchy yet clear name in the restaurant industry.
  • Check for existing similar names before finalizing.

Sources: /r/restaurant

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