October 10th QSR Roundup: Dive into Innovations, Workforce Challenges, and Tech Shaping the Food Scene

QSR news for Oct 10th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 59 articles to bring you the latest. Estimated reading time saved (at 200wpm): 182 minutes. It'll take you only 12 minutes to catch up.

Innovations and Collaborations in Menu Offerings

Restaurants are embracing creative collaborations and introducing bold new flavors to captivate customers.

• SpongeBob SquarePants' 25th Anniversary: Leading to numerous collaborations with brands like Wendy’s, Randy’s Donuts, and Harlem Shake until Oct. 27. (Source: Nation's Restaurant News)
• Krispy Kreme Celebrates Ghostbusters: Focusing on Ghostbusters' 40th anniversary with themed doughnuts instead of SpongeBob. (Source: Nation's Restaurant News)
• Chip City Cookies & Pop Tarts Collaboration: Offering exciting dessert options to delight sweet-toothed customers. (Source: Nation's Restaurant News)
• Halloween-Themed Treats: Beef-A-Roo and Jeremiah’s Italian Ice roll out spooky seasonal items, while Popeyes introduces the fiery Ghost Pepper Chicken Sandwich. (Source: Nation's Restaurant News, Restaurant Business)
• TooJay’s Deli and Sweet Paris: Anticipate the holidays with new Thanksgiving items and Christmas-themed lattes respectively. (Source: Nation's Restaurant News)
• Taco Bell's Innovations: Testing Chicken Al Pastor Street Chalupas in Minneapolis starting Oct. 31 for $4.99, marking the first variation from their successful Cantina Chicken menu. They're aiming to introduce more al pastor offerings in 2025. (Source: Nation's Restaurant News, Restaurant Dive)
• Taco Bell Brings Back Double Decker Taco: Fans rejoice as this favorite item returns to the menu. (Source: Nation's Restaurant News, Restaurant Business)
• Popeyes' Ghost Pepper Chicken Sandwich: Spicing up the menu with a new hot offering. (Source: Nation's Restaurant News, Restaurant Business)

Highlights:

• Bold Flavors and Seasonal Themes: Restaurants are leveraging popular culture and seasonal events to create buzz around their menus.
• Collaborations with Iconic Brands: Partnering with well-known characters and brands to attract diverse customer bases.

Expansion and Partnership Strategies

Major chains are expanding their reach through strategic partnerships and franchise agreements.

Krispy Kreme Expands with McDonald's

• The partnership is set to expand to Chicago-area McDonald’s locations starting Oct. 15, following a successful test in Kentucky.
• Celebratory Giveaway: Krispy Kreme offers free Original Glazed doughnuts to customers with a McDonald’s receipt from Oct. 10-14.
• Nationwide Rollout Vision: Aiming to have Krispy Kreme treats available at over 1,000 McDonald’s by year's end and 12,000 by 2026.
• Consumer Demand: Driven by the desire for accessible, fresh doughnuts, with logistics enhancements to ensure quality delivery. (Source: Nation's Restaurant News)

Pepper Lunch Secures 20-Unit Franchise Agreement

• Pepper Lunch partners with the Carl L. Karcher Group to open locations in Southern California and Las Vegas.
• Known for its do-it-yourself Teppanyaki dining experience, the brand aims to leverage the rising popularity of Asian cuisine in the U.S.
• Initial two locations expected to open within nine months. (Source: Restaurant Dive, Fast Casual)

Harumi Sushi's Inspiring Expansion

Jessica Kim, a first-generation Japanese-American, leads Harumi Sushi from humble beginnings to seven thriving locations with over 150 employees and projected $10 million in revenue this year. Despite facing sexism in the industry, Kim introduces innovative touches like Japanese cocktails and a unique rotational chef model, fostering team meritocracy and low turnover rates. Future plans include more locations in Phoenix, but no out-of-state expansions yet. (Source: Nation's Restaurant News)

Highlights:

• Strategic Partnerships: Brands are joining forces to expand their market presence and meet consumer demands.
• Franchise Growth: Leveraging franchise agreements to accelerate expansion plans.
• Innovation in Operations: Emphasizing unique operational models and menu innovations to stand out in a competitive market.

Technology and AI Transforming the Industry

The integration of AI and advanced technology is revolutionizing restaurant operations and customer experiences.

AI Tools Enhance Restaurant Operations

• Popmenu expands partnership with Square to provide AI marketing and phone answering services.
  • Automated menu updates and direct order flows.
  • Personalized marketing strategies and simplified reporting.
  • Special bundling rate for Square customers.
• Benefits: Helps restaurants navigate labor shortages and increased competition, showcasing potential for higher returns. (Source: QSR Magazine, FSR Magazine)

AI in Restaurant Drive-Thrus

• Bojangles is implementing voice-activated AI technology in their drive-thru operations.
  • Goals: Enhance customer experience and potentially save on labor costs.
• Broader Implications: Varying impacts on employees and consumers, with discussions on the role of AI in the industry. (Source: Restaurant Business)

Revolutionizing Restaurant Marketing

• SevenRooms launches a new Text Marketing feature tailored for restaurants.
  • Industry Growth: U.S. SMS marketing industry is on track to exceed $12B by 2025.
  • Features: Unlimited character campaigns via MMS, including emojis and multimedia.
  • Success Stories: Fabio Viviani Hospitality reported over $432,000 in revenue within six months using this feature. (Source: QSR Magazine)

Highlights:

• AI Integration: Enhancing efficiency and customer engagement through automation.
• Marketing Innovations: Utilizing SMS and personalized marketing to reach customers effectively.
• Operational Improvements: Streamlining processes to reduce errors and improve guest experiences.

Market Trends and Consumer Behavior

Understanding shifts in consumer preferences and market dynamics is crucial for restaurant success.

Teen Brand Preferences Shift

• Chick-fil-A and McDonald’s: Still popular among teens but rankings have dropped.
  • Chick-fil-A: Now at 17% (down from 21%).
  • McDonald’s: At 11% (down from 12%).
• Starbucks leads beverage choices at 51%, down from 57%.
• Spending Habits:
  • Teen spending is up 6% year-over-year to an average of $2,361.
  • Boys spend most on food (23%), while girls favor clothes (27%).
• Technology and Trends:
  • 87% have iPhones.
  • Stanley Cups emerge as a popular trend but are on the decline.

(Source: Restaurant Business)

Wages Rise, Offering Hope for Restaurants

• Wages are increasing faster than inflation, giving consumers more spending power.
  • Wages increased by 0.4% last month and 4% over the past year.
  • Consumer prices rose just 0.2% in September.
• Dining Out Trends:
  • For the first time in over a year, grocery prices outpaced restaurant price increases.
  • Despite restaurant prices rising 3.9% over the past year, the gap is narrowing.
• Impact on Industry:
  • Traffic at fast-food chains has declined despite a strong economy.
  • Consumers may soon dine out more often due to better wage growth.

(Source: Restaurant Business)

Highlights:

• Changing Preferences: Teen loyalties shifting among fast-food and beverage brands.
• Economic Factors: Wage growth potentially leading to increased dining out.
• Consumer Spend: Understanding where different demographics allocate their spending.

New Product Launches and Promotions

Exciting new offerings and deals are hitting the market, aiming to attract customers.

Chicken Big Mac Unveiled

• McDonald's is launching the Chicken Big Mac, featuring tempura-battered chicken patties.
  • Strategy: Part of McDonald's aim to dominate the growing chicken category.
  • Previous Success: Quick sell-out in other regions, including the UK.
• Rollout: Across over 13,000 U.S. restaurants. (Source: QSR Magazine, Food & Beverage)

Potbelly's New Smokestack Sandwich

• Potbelly introduces the Smokestack Pork & Mac sandwich, available from October 14 for a limited time.
  • Features: Slow-cooked pulled pork, smoky BBQ sauce, and creamy mac & cheese.
  • Special Offer: Purchase any sandwich from Oct 14-20 to receive a free Craft Refresher.
• Availability: In stores or via Potbelly’s app and website. (Source: QSR Magazine)

Highlights:

• New Flavors: Introducing unique combinations to entice customers.
• Special Promotions: Offering deals to encourage trial and repeat visits.
• Seasonal Appeal: Launching products that align with seasonal preferences.

Franchising and Business Growth

Navigating the challenges and opportunities in franchising within the restaurant industry.

Franchising Caution

• Growing Interest: Franchising is rising as traditional funding becomes challenging.
• Risks:
  • It's not a universal solution; potential franchisees must address operational challenges.
• Expert Advice:
  • Proper evaluation is essential before adopting this business model.
• Statistics:
  • Growth in interest doesn’t guarantee success; many franchises face unique obstacles. (Source: Restaurant Business)

Rusty Taco Expansion and Challenges

• New Leadership: Daniel Smith aims to elevate the brand after its sale to Gala Capital Partners.
• Strategies:
  • Transforming operations while respecting heritage.
  • Marketing overhaul with a bolder voice and image.
  • Strengthening franchise ties and franchisee feedback.
• Expansion Goals:
  • Targeting growth in Texas, Oklahoma, Arizona, and Florida.
• Challenges:
  • Facing inflation and market uncertainty but setting up for sustainable growth. (Source: Restaurant Dive, Fast Casual)

Highlights:

• Due Diligence: Importance of careful consideration in franchising decisions.
• Leadership Vision: New strategies to drive growth and overcome challenges.
• Sustainable Growth: Planning for long-term success amid economic hurdles.

Community Engagement and Philanthropy

Brands are focusing on giving back and engaging with local communities to build loyalty.

Dunkin' Joy Foundation Awards

• $8.5 million in grants to over 360 nonprofits nationwide.
  • Focus: Families facing food insecurity.
• Highlights:
  • Dunkin' Iced Coffee Day raised $2.1 million in one day.
  • Over $50 million awarded since 2006.
• Community Commitment: Reflects strong commitment to service by Dunkin' and franchisees. (Source: Restaurant Operator Daily, QSR Web)

Franchise Success Through Community Engagement

• Nate and Lianne Straathof transformed their Austin-based Another Broken Egg Cafe locations.
  • Strategies: Community involvement and catering sales.
  • Community Impact: Active in local organizations, supporting food banks and schools.
• Success Metrics:
  • Consistently ranking in the top 25% among cafes.
  • Catering significantly boosts weekday revenue. (Source: FSR Magazine)

Highlights:

• Philanthropy: Engaging in charitable activities strengthens brand image.
• Local Involvement: Active participation fosters customer loyalty.
• Impactful Giving: Large-scale support makes significant differences.

Operational Challenges and Legal Battles

The industry faces various operational hurdles, including legal disputes and financial struggles.

Applebee's Franchisee Bankruptcy Battle

• Louisiana Apple, a 14-unit franchisee, filed for bankruptcy over unpaid loans and breached agreements.
  • Owed over $8.3 million to City National Bank of Florida.
  • Applebee's sued for unpaid royalties and unauthorized closures.
• Industry Trend:
  • Other franchises like BurgerFi, Red Lobster, and Pizza Hut face similar struggles. (Source: FSR Magazine, Restaurant Dive)

Cracker Barrel vs. Biglari

• Cracker Barrel attempts to appease shareholder Sardar Biglari by endorsing one of his board nominees.
  • Biglari holds a 9.3% stake and has attempted to join the board seven times.
• Annual Meeting: Set for Nov. 21, to be held virtually. (Source: Restaurant Business)

Highlights:

• Financial Struggles: Franchisees facing bankruptcy due to debts and legal issues.
• Shareholder Activism: Investors influencing company strategies.
• Industry Challenges: Economic pressures leading to increased creditor actions.

Culinary Events and Cultural Celebrations

Events celebrating culinary traditions and cultural heritage are gaining attention.

Lebanese Festival Resilience

• The Lebanese Festival at St. Maron’s Church celebrates Lebanon's rich culture.
  • Features: Authentic dishes like lahmajeen and chicken kebabs.
  • Solidarity: Promotes unity within and beyond the diaspora.
• In Light of Conflict:
  • Despite violence in Lebanon, the festival emphasizes cultural vitality.
  • 10% of proceeds aid relief efforts.
• Community Spirit:
  • Volunteers from diverse backgrounds foster connection. (Source: Eater Twin Cities)

Innovative Advent Calendars

• Advent calendars have evolved into festive treats for adults.
  • Williams Sonoma's spice calendar offers unique spices.
  • Bonne Maman's jam calendar features 24 flavors.
  • Murray's Cheese calendar includes gourmet cheeses.
• Conclusion:
  • Investing early can enhance the holiday experience with surprise flavors. (Source: Eater)

Highlights:

• Cultural Preservation: Festivals showcasing heritage despite challenges.
• Seasonal Traditions: New twists on traditional products bring excitement.
• Community Engagement: Events that bring people together.

Workforce Challenges and Solutions

Addressing labor shortages and employee retention through innovative strategies.

Education Boosts QSR Retention

• Travis Larrier emphasizes investing in employee education.
  • Statistics:
    • 80% of workers aspire to advance through learning.
    • Turnover costs average $5,864 per employee.
  • Success Stories:
    • A Mexican chain increased retention by triple through tuition support.
    • A fried chicken QSR saw over 40% engagement in educational initiatives. (Source: Modern Restaurant Management)

Workforce Challenges in Food Industry

• Key Issues:
  • 47% report a lack of qualified candidates.
  • 40% dealing with increased overtime.
• Retention Efforts:
  • 36% prioritizing training.
  • 29% increasing wages.
• Barriers:
  • Budget constraints (21%).
  • Resistance to change (45%). (Source: Food Industry Executive)

Highlights:

• Investment in Education: Providing learning opportunities to retain staff.
• Addressing Skills Gaps: Focusing on training and development.
• Overcoming Barriers: Tackling constraints to improve workforce stability.

Miscellaneous News and Updates

A roundup of various interesting developments in the food industry.

Trump and Kennedy's Health Agenda

• Robert F. Kennedy, Jr. aligns with Donald Trump’s MAHA initiative to combat America’s unhealthy food crisis.
  • Focus: Addressing chronic disease rates linked to the food industry.
  • Bipartisan Effort: Unexpected collaboration in tackling health issues. (Source: Civil Eats)

Potato Ricer: A Must-Have

• Emphasizing the importance of a potato ricer for perfect mashed potatoes.
  • Insight: Essential kitchen tools are worth the space and effort.
  • Cooking Rewards: Results can be deliciously rewarding despite cleanup. (Source: Eater)

SBA Loan for New Restaurant

• Discussion on obtaining an SBA loan to open a new restaurant after a previous tenant defaulted.
  • Advice:
    • Avoid starting from scratch; consider finding a new tenant.
    • Pursue recourse against the former tenant.
  • Industry Challenges:
    • Tough market conditions with many restaurants closing. (Source: /r/restaurateur)

Highlights:

• Health Initiatives: Political figures addressing food-related health crises.
• Kitchen Insights: Tips on essential tools for cooking enthusiasts.
• Business Advice: Cautionary guidance on starting new ventures now.

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