September 25th QSR Roundup: McDonald's Market Share Gains, Employee Empowerment, and the Rise of Tech in Restaurants
QSR news for Sep 25, 2024. We checked 15 QSR publications and over 41 articles for you to bring the latest news. Estimated reading time saved (at 200wpm): 122 minutes. It will take you only 20 minutes to catch up.
McDonald's Market Share Surge
Source: Nation's Restaurant News
- 87% of U.S. households visited McDonald's at least once in the past year, with an average of 54 visits and $461 spent.
- McDonald's launched a $5 Meal Deal, attracting 20 million households in three weeks, particularly appealing to lower-income customers.
- As a result, McDonald's gained 0.5% market share, outperforming competitors like Burger King and Wendy’s, which lost 20% and 18% market shares, respectively.
59% of Meal Deal consumers plan to visit McDonald's more often, driving their sales momentum into December.
Confronting Customer Harassment
Source: Nation's Restaurant News
- Erin Wade, founder of Oakland's Homeroom, transitioned from law to creating a unique mac 'n' cheese dining experience combining fine dining hospitality with casual pricing.
- Despite success with three locations, Wade faced the unexpected challenge of customer harassment towards employees.
- To tackle this, she instituted a color-coded reporting system for staff, fostering a culture of trust and reducing turnover.
Wade shared insights during a discussion on her book, emphasizing that better experiences stem from genuine care, and that prioritizing employee safety enhances restaurant performance.
Starbucks Promotes New CEO for China
Source: Nation's Restaurant News
Molly Liu has been named the sole CEO of Starbucks' China division, following her role as co-CEO. Belinda Wong will remain as chair for China. Liu, a former COO and VP of digital ventures, emphasizes an enhanced operational and innovation approach. Starbucks maintains 7,300 locations in China, their second-largest market, despite speculation about a potential spin-off due to declining sales and competition.
McDonald's Boosts Employee Pride
Source: Nation's Restaurant News
- McDonald’s launched the "Employees Only" campaign celebrating past and present crew members, emphasizing that 1 in 8 Americans has worked for them.
- Over 70% of employees reported gaining vital skills like communication and leadership during their tenure.
- Events began in Chicago with notable alumni like Chris Redd and chef Kwame Onwuachi, featuring mentorship opportunities and professional headshots.
The campaign aims to foster networking and pride among employees while opening 900 new restaurants in the next four years.
Build vs. Buy in Restaurant Tech
Source: Nation's Restaurant News
- The debate between creating proprietary tech (build) versus purchasing existing solutions (buy) is intensifying in the restaurant industry, highlighted at FSTEC 2023.
- Key players: Papa Johns and Kura Sushi favor building; Potbelly and Brooklyn Dumpling Shop prefer buying.
- Build Pros: Complete control over tech and data; allows customization that enhances the consumer experience.
- Build Cons: Development is a slow process, often complicated by other operational priorities.
- Buy Pros: Cost-effective, especially for startups who benefit from established vendor expertise and resources.
- Buy Cons: May lack the tailored experience that custom-built solutions can provide.
Both sides agree on the importance of customization, emphasizing alignment with brand needs to enhance customer journeys.
Starbucks CEO Engages Union
Source: Nation's Restaurant News
CEO Brian Niccol commits to constructive dialogue with SB Workers United, ensuring respect for employees' right to unionize. As of June 2024, 463 stores are represented by the union. Niccol emphasizes a goal of making Starbucks the best place to work while promoting transparency and collaboration between partners.
Boston Market's Legal Woes
Source: Nation's Restaurant News
Boston Market's appeal against a court order to pay $11.9 million to US Foods has been dismissed due to a lack of prosecution. An Illinois U.S. District Court determined that Boston Market had shown bad faith in avoiding the case and had intentionally dodged court obligations. The lawsuit stemmed from Boston Market falling behind on payments, accumulating a significant debt of $10.5 million plus $800,000 in interest, leading to serious financial troubles for owner Jay Pandya, which included a failed personal bankruptcy filing.
Pizza Hut Franchisee Bankruptcy
Source: Nation's Restaurant News
EYM Pizza L.P., a Pizza Hut franchisee, is selling its 127 stores across multiple states after filing for bankruptcy. The company owes over $21 million to Manufacturers Bank and approximately $2.25 million to Pizza Hut. Despite previous legal battles, EYM is working with National Franchise Sales to support asset recovery and ensure creditor interests are met. Meanwhile, EYM Chicken has already closed 25 KFC locations as part of this restructuring process.
Dunkin' Franchise Expands
Source: QSR Magazine
Private equity firm Beach Point Capital Management has made a majority investment in Metro Franchising, one of Dunkin's largest franchisees operating 105 stores in the New York metro region. This investment aims to fuel local expansion and entry into new markets like the Southeast. CEO Stuart Cohen and President Paul Waltzer will remain in leadership and as shareholders. Previously, Metro grew from 44 to 105 stores under Quilvest Capital Partners, which significantly improved its operational infrastructure and added new locations. Beach Point currently manages around $17 billion in assets.
Mo’ Bettahs Promotes COO
Source: QSR Magazine
John Konyn, a decade-long employee from an hourly role to COO, plays a crucial part in Mo’ Bettahs' expansion and success, overseeing 55 locations across 7 states with positive sales growth for 13 years.
Growth Leadership: Konyn's leadership resulted in development and training opportunities for staff, helping them ascend to higher roles, even during the pandemic.
Profit Boost: He enhanced food cost management, boosting EBITDA from mid-teens to mid-20%.
Cultural Impact: Konyn loves fostering a mentorship culture within the team as the brand grows, ensuring opportunity and improvement for future leaders.
Coffee Day Celebration
Source: QSR Magazine
Beans & Brews Coffeehouse celebrates National Coffee Day on September 29 with a $2 discount on drinks through their app. A National Coffee Association report shows that 65% of Americans drink coffee daily, highlighting the beverage's popularity. Research suggests that having 1 to 3 cups daily can lower the risk of serious health conditions. Their unique high-altitude roasting method enhances coffee flavor, making it a staple in several states. New fall offerings include the Pumpkin Pie Fritalia and pumpkin spice donut holes, available until year's end.
Hang Welcomes New CRO
Source: QSR Magazine
Jeremy Theisen joins Hang as Chief Revenue Officer, bringing a wealth of experience from his time scaling Punchh to $50 million. Hang aims to revolutionize customer engagement with its AI-powered platform, designed for personalized commerce and brand loyalty. Co-Founder Matt Smolin expresses excitement for Theisen's impact in expanding Hang's vision and tools for brands to enhance customer interaction.
Shipley Do-Nuts Growth Surge
Source: QSR Magazine
Shipley Do-Nuts, nearing its 88th anniversary, is experiencing unprecedented growth under CEO Flynn Dekker.
- 33% increase in development pipeline and 15 consecutive quarters of positive same-store sales.
- Currently operates 360 locations across 12 states, with plans to open 25 stores in 2024.
- Average store gross sales hit $902,517, with top performers reaching $2.726 million.
- Digital sales have risen to 8%, tripling in two years, significantly boosting ticket prices and overall revenue.
- New products include the Egg & Cheese Kolache, with weekly sales exceeding 50,000, addressing a demand for heartier breakfast options.
- Future growth will focus on evening meal items, beverages, and broader menu categories as the company explores its real estate flexibility,
- Startup costs reduced by 23% over the past year with shift towards smaller footprint units, enhancing ROI for franchisees.
Dekker emphasizes a blend of innovation and core products is key to the brand's ongoing success.
AI's Energy Impact on Businesses
Source: QSR Magazine
- Artificial intelligence (AI) drives massive energy consumption, particularly impacting businesses like restaurants with thin profit margins.
- The International Energy Agency predicts global electricity consumption from AI will double in under two years.
- Electricity costs include 60% energy and 25% capacity, influenced by market dynamics and fuel prices.
- Businesses can strategize by collaborating with energy partners and adopting energy-efficient practices like LED lighting and smart HVAC systems.
- Demand-side management can help shift energy use to off-peak times, essential for cost-saving, especially for 24/7 operations like restaurants.
- Conducting an energy audit and understanding peak demand can lead to significant savings.
Overall, while AI aids efficiency, it dramatically escalates energy demand—a crucial challenge businesses must navigate to maintain profitability.
Pizza Hut Franchisee's Bankruptcy
Source: QSR Magazine
EYM Pizza, a bankrupt Pizza Hut franchisee, is set to sell 127 restaurants across five states as part of a financial restructuring. They owe $3 million in overdue payments and claim to have invested $46.6 million into the franchise. Despite the overall Pizza Hut system seeing a 7% increase in same-store sales, EYM experienced a 10% decline, attributing performance issues to both financial mismanagement and the franchisor's failure to modernize.
Magnolia Bakery's Sweet DoorDash Partnership
Source: QSR Magazine
Magnolia Bakery teams up with DoorDash to unleash an exclusive new flavor, Banana Pudding with Peanut Butter, available only through DashMart.
- Leveraged DoorDash's reach to scale operations across the U.S., bridging the gap to customers outside major cities.
- Initial collaboration began with Confetti Banana Pudding Cookies, showcasing significant sales growth since launch in March 2023.
- Future plans include more retail partnerships focusing on limited-time offerings and exclusive flavors, driven by data on customer demand in untapped markets.
Successful integration highlights the importance of aligning bakery innovations with third-party platform capabilities, proving the synergy creates more opportunities for growth.
Tip Credit Limit Lifted
Source: Restaurant Business
A U.S. district court has ruled in favor of the restaurant industry by ending a significant restriction on the tip credit, which allows employers to count tips towards minimum wage obligations.
- This decision opens the door for larger employer flexibility in wage structures.
- However, employers remain in a gray area regarding how to navigate this change in the law.
- The implications of this ruling could reshape compensation practices across the restaurant sector.
As the industry adapts, many are questioning what this means for wage inflation and employee earnings overall.
Rising Dominance of Delivery Services
Source: Restaurant Business
- Delivery's popularity is attributed to ease of use, as highlighted by a recent study from Intouch Insight.
- The study used secret shoppers to assess speed, accuracy, and overall consumer satisfaction with major delivery platforms: DoorDash, Uber Eats, and Grubhub.
- Consumers show a clear preference for restaurant delivery, which outperforms convenience store delivery regarding service quality.
There's increasing competition between fast-food chains and convenience stores in the delivery landscape.
Wendy's Frosty Promotion
Source: Restaurant Business
Wendy's is selling small Frosty desserts for $1 through the end of this month, leveraging McDonald's notorious ice cream machine issues in their marketing. The campaign pokes fun at nearly 15% of McDonald's machines being inoperable, using McBroken.com to map out available machines. It highlights that McDonald's outages are most common between 11 a.m. to 3 p.m. in cities such as Chicago, Houston, and Las Vegas. This promotion reflects Wendy's playful and irreverent marketing style, capturing customer attention at a time when fast-food prices are key.
Delivery Apps Win Data Fight
Source: Restaurant Business
- Victory for delivery apps: Judge Torres ruled that DoorDash, Uber Eats, and Grubhub do not have to share detailed customer data with NYC restaurants.
- Customer Data Law blocked: The law aimed to provide restaurants with customer insights but was deemed a violation of the delivery services' First Amendment rights.
- Limited information: Restaurants currently receive only customers’ first names, last initials, and orders.
- Data ownership dispute: The ruling highlights ongoing tensions over customer data and its importance for marketing and growth.
Small wins for restaurants: NYC capped commission fees charged by delivery apps to restaurants, but the debate continues over app charges.
McDonald's Celebrates Employee Achievements
Source: Restaurant Business
McDonald's launches "Employees Only" events to honor current and former employees.
- 1 in 8 Americans have worked at McDonald's, with many alumni achieving success in various fields, including Kamala Harris, Kwame Onwuachi, Chris Redd, and Clarissa Molina.
- Alumni share how their McDonald's experience funded major life milestones, with Redd noting it helped his music career and Molina highlighting pageant funding.
- The initiative aims to destigmatize fast-food jobs, showing the potential for career growth, as workers can move from entry-level roles to management and franchise ownership.
A standout story includes a former crew member now earning $120,000 as a director of operations.
Tip Credit Changes in Restaurants
Source: Restaurant Business
A U.S. district court's decision has removed major limits on the use of tip credits in the restaurant industry, allowing employers more flexibility. However, uncertainty remains regarding how this change will impact restaurant operations and compliance. As tip credit rules evolve, businesses must consider both employee compensation and customer tipping behaviors to adapt effectively. This ruling marks a significant shift in the financial landscape for restaurants that depend on tips.
Egg Flights Take Off
Source: Restaurant Business
The egg flight trend on TikTok is reviving interest in assorted small food and drink tastings.
- Egg flights have surged in popularity, spiking Google searches by 350%, with halved hard-boiled eggs topped with ingredients like Kewpie mayo and gorgonzola.
- Millers All Day launched a Donut Flight and expanded cocktails to include a Bloody Mary Flight and a Mimosa Flight catering to variety-seeking customers.
- Snooze A.M. Eatery updated its Pancake Flight offerings, now including flavors like Pineapple Upside Down and Cinnamon Roll.
- New flight ideas include fries, milkshakes, and queso flights featuring unique dips like street corn and chorizo, targeting adventurous diners.
Overall, the food and drink flight trend reflects a growing desire for diverse tasting experiences within dining.
Starbucks Leadership Shakeup
Source: Restaurant Business
Molly Liu has been appointed the sole CEO of Starbucks China, succeeding Belinda Wong, who remains chairwoman. The change comes amid economic challenges in China, where Starbucks has 7,300 locations but has faced stiff competition from local brands. Newly appointed CEO Brian Niccol aims to focus initially on the U.S. market while exploring growth options in China. Liu, a 12-year Starbucks veteran with prior leadership roles, emphasized the company's innovation and operational strength. Wong has significantly expanded the store count in China by 15 times since taking leadership in 2011, earning praise from Niccol for her contributions.
Olive Garden Embraces Delivery
Source: FSR Magazine
Olive Garden is transitioning to a delivery model through an exclusive partnership with Uber, testing in a limited number of locations by late 2024. Customers will find that delivery prices match in-restaurant menu prices, with a transparent $5 delivery fee and a 5% service charge. Projected same-store sales growth from delivery could range from 3-5% when rolled out nationwide by May 2025. Darden recognizes that delivery is a preferred convenience for customers, and 80% of current takeout orders are small. This service will not disrupt in-restaurant experiences, maintaining a curbside pickup system for drivers. Darden's total sales for Q1 reached $2.8 billion, marking a 1% increase, even with Olive Garden's same-store sales down 2.9%.
Sushi Bar Dallas Welcomes Chef Bordayo
Source: FSR Magazine
Sushi | Bar Dallas announces Rico Bordayo as the new lead sushi chef.
Bordayo brings decades of experience from top sushi kitchens in NYC and beyond, focusing on integrating non-traditional ingredients and his Mexican heritage into sushi creations.
The restaurant offers an intimate 17-course omakase menu for 12 guests, featuring fresh fish flown in weekly.
Reservations for the $165++ dining experience are available monthly, with optional drink pairings and a welcoming cocktail.
AI Revolutionizes Workplace Food Orders
Source: FSR Magazine
- ezCater has unveiled Smart Ordering, an innovative AI-driven tool simplifying food orders for workplaces.
- It leverages 17 years of data, making ordering for groups of 20 to 300 quicker and more efficient.
- Offers menu recommendations across different price points that can adapt to preferences and group sizes.
- This feature enhances budget management by providing clear per-person pricing.
- Smart Ordering is now live in over 50,000 restaurants, making workplace meals easier to coordinate.
- Chief Technology Officer Erin DeCesare emphasizes that this tech will save time and ensure teams are well-fed and satisfied.
- Users can complete what was previously a time-consuming task in just a few simple steps.
Estimated time saved: 4 minutes.
Sonny’s BBQ Goes Digital
Source: FSR Magazine
- Sonny’s BBQ revamps its dining experience with a new mobile app using Thanx for loyalty, Olo for online ordering, and Flybuy for seamless pickup.
- The mobile app has acquired 200,000 new customers in just three months, with 750 new members joining monthly per location.
- Partnering with Olo and Flybuy has achieved a 92% decrease in wait times, enhancing customer satisfaction and operational efficiency.
The integration aims to deliver a frictionless off-premise dining experience, ensuring food freshness and satisfaction.
NYC Court Ruling on Delivery Data
Source: Restaurant Dive
A New York judge ruled that requiring delivery services like DoorDash and Uber Eats to share customer data with restaurants violates the First Amendment. The law was ruled unconstitutional as it constituted compelled speech and failed to achieve its goals against exploitative practices. This ruling is part of ongoing regulatory battles, including delivery fee caps and minimum wage laws for delivery workers. Meanwhile, Florida has passed its own delivery regulations that do not require customer data sharing, while Washington, D.C. has begun studies on delivery worker conditions.
Handel's Ice Cream Leadership Changes
Source: Restaurant Dive
- Handel's Ice Cream appointed Hillary Frei as Chief Marketing Officer and Erin Snyder as Vice President of Franchising in September 2024.
- Frei previously boosted sales at Wetzel’s Pretzels and has a strong e-commerce background, including a 40% revenue increase at FAO Schwarz.
- Handel's anticipates $130 million in systemwide sales this year, a surge from $29 million in 2019.
Under CEO Jennifer Schuler, the brand aims to expand its footprint with a strong franchise pipeline, enhancing growth opportunities for franchisees.
DoorDash Launches Commerce Platform
Source: Restaurant Dive
DoorDash has unveiled its Commerce Platform, offering restaurants five customizable products for enhancing business operations. Key features include the ability for merchants to create native mobile apps, an AI-driven phone ordering system, and dedicated customer support solutions. The platform aims to address the needs of the growing delivery market, with 60% of U.S. consumers ordering food weekly. Additional enhancements to DoorDash's Business Manager app provide efficient sales tracking and marketing tools, supporting restaurants in maximizing their sales potential.
Essential Apple Picking Tools
Source: Eater
- Embrace autumn with cozy outfits and adventures in apple picking at scenic orchards like Carter Mountain.
- Master your technique: Aim for weekday visits for fewer crowds; functional boots are a must for muddy hills.
- Essential Tools:
- Apple Picker: Telescoping 12-ft poling picker makes gathering fruit a breeze.
- Market Basket: Fair-trade woven baskets from Ghana add flair while being useful.
- Vegetable Peeler: Kuhn Rikon Swiss Peelers are ergonomic and available in vibrant colors.
- Apple Corer: Efficiently removes cores with a serrated stainless steel head.
- Slicer and Corer: Adjustable model allows for different slicing sizes for various baking needs.
- Hand Crank Apple Peeler: Old-school charm; it peels, cores, and slices apples with ease.
Following these tips ensures a fruitful and fun apple picking experience!
Perfect Mushroom-Leek Frittata
Source: Eater
- Two types of frittatas: Breakfast-style is quick and firm, while dinner-style is cooked low and slow for creamy texture.
- Start with 4 oz of mushrooms (shiitake recommended) and 1 small leek, cleaned and chopped.
- Cook mushrooms in olive oil until browned (about 8 minutes). Mix 3 eggs, season, and add 1 oz of goat cheese.
- Combine mushrooms and leeks, pour egg mixture, top with ½ oz of grated Parm, and bake at 300°F for 13-15 minutes until set.
Enjoy this comforting dish whenever a breakfast craving hits!
Raising the Bar on Nonalcoholic Drinks
Source: Eater Atlanta
Local Atlanta eateries and bottle shops have expanded their zero-proof drink offerings amidst rising interest. Premium nonalcoholic cocktails, costing upwards of $7, demand careful crafting akin to alcoholic beverages. Ingredient quality drives prices higher, with nonalcoholic spirits often costing more at wholesale than traditional options. Drinks like St. Cecilia’s Tsarina’s Slippers can reach $12 due to complex preparation and ingredient sourcing. Industry experts emphasize the need for restaurants to educate customers on the value and craftsmanship behind these sophisticated alternatives, which aims to make all patrons feel included and cater to growing sober-curious clientele.
Gong cha's Tech-Driven Strategy
Source: Kiosk Marketplace
Rebecca Kahn, Gong cha’s U.S. and Canada franchise leader, underscores the need for a balance between technology and personal touch in enhancing customer experience. The brand uses guests' names to personalize orders, even in kiosks and apps, making clients feel valued. SMS communication is key for real-time updates and promotions, while loyalty programs significantly drive repeat business. As technology evolves, Kahn envisions an increasing role for self-service, focusing on seamless customer experiences.
QikServe Acquisition
Source: QSR Web
The Access Group has acquired QikServe, a digital commerce platform enhancing hospitality IT solutions. The integration will expand Access Hospitality’s capabilities in managing guest bookings, payments, and more. QikServe, active since 2011, enables transactions in over 8,000 outlets globally, processing hundreds of millions in transactions, contributing over $3.8 billion in digital sales. This acquisition aims to boost operational efficiency and create a comprehensive suite of solutions for an improved guest experience.
Filta's Biodiesel Breakthrough
Source: Fast Casual
Filta Environmental Kitchen Solutions has recycled 1 billion pounds of used cooking oil into biodiesel fuel, servicing various commercial kitchens. This milestone emphasizes their commitment to sustainability and reducing food costs through efficient oil management. Their efforts have led to substantial environmental savings: 1,904,761 acres saved, 1,344,670 gallons of water preserved, and 2.4 million gallons of gasoline conserved. Additionally, they achieved a 640 million pounds reduction in carbon emissions and saved 57 million pounds in packaging materials. Filta's operations help lower carbon footprints while moving towards a sustainable future through innovative recycling methods.
Handel's Ice Cream Names New CMO
Source: QSR Web
Handel's Homemade Ice Cream has appointed Hillary Frei as their new Chief Marketing Officer. With extensive experience in food and franchise marketing, Frei is recognized for her significant contributions to brands like Wetzel's Pretzels, where she managed 420 locations and successfully launched third-party delivery initiatives. Previously, she led e-commerce for FAO Schwarz, achieving over 40% revenue growth. Alongside Frei's appointment, Erin Snyder joins as VP of franchise development, supporting Handel's promising future under CEO Jennifer Schuler, who took the helm in March 2024.
Schlotzsky's Expands to Detroit
Source: QSR Web
Austin-based Schlotzsky's is set to open five new locations in Detroit through a franchise deal with husband-wife duo Vipul and Neha Patel. Their passion for the brand stemmed from the quality of its oven-baked sourdough bread, which they believe outshines competitors. The first of these locations is expected to launch by mid-2025 in the western suburbs, expanding their footprint beyond the existing three sites in Battle Creek. With over 310 locations nationwide, Schlotzsky's aims to solidify its presence further in Michigan, under the umbrella of GoTo Foods, which owns popular brands like Auntie Anne's and Cinnabon.
Virginia's Wholesale Produce Market
Source: BlueCart
- Virginia boasts over 43,000 farms, offering diverse and fresh fruits and vegetables.
- Customers' preferences are shifting towards organic and eco-friendly produce, prompting farmers to adapt.
- Distributors provide a range of products including fruits, vegetables, microgreens, canned goods, and more.
- Key players in the market include Keany Produce & Gourmet, Blue Ridge Produce, Cavalier Produce, Wood's Produce Company, and Roanoke Fruit and Produce Company, each with unique service offerings.
- The state's agricultural focus includes staple crops like soybeans, corn, and wheat, with popular fruits like apples and grapes.
A growing trend highlights sustainability and local sourcing to support community-based farming, aiming to reduce food waste.
Barriers to QSR Stability
Source: Modern Restaurant Management
- Turnover Rate: QSR industry faces a staggering turnover rate of 72% in 2023. Over 50% of employees leave within 90 days.
- High Costs: Replacing an employee costs 1.5-2x their annual salary, impacting service and operational efficiency.
- Employee Strain: 65% of QSR employees experience burnout due to long hours, low pay, and high customer interaction demands.
- Cultural Shift: The pandemic increased employee expectations for job satisfaction and work culture.
- Retention Strategies: Offering competitive pay, flexible schedules, and development opportunities are essential to attract and keep talent.
- Workplace Impact: 90% of employees believe their workplace experience directly affects customer service quality.
Streamlined Processes: Modernizing onboarding, shift management, and training can enhance employee experience and efficiency.
Stay tuned for more concise news updates delivered right to your fingertips, saving you valuable time. As industry professionals and restaurant operators, your time is precious—spent on running your businesses, innovating menus, and enhancing customer experiences. Let us keep you informed with quick, comprehensive summaries so you can focus on what you do best. Subscribe now and join us again for the latest insights in the restaurant industry!