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Articles published by us in the NEREJ
“Why hasn’t my business sold?” For the most part this question is asked not only of restaurant brokers but also of general business brokers, and as well of other commercial brokers.
The scenario is that an owner seeks out, what he feels is a competent professional to help him exit a business that has provided him with the luxuries of success or the pains of failure. In either case, if we take on the responsibility of accepting the listing, we’re promising the seller, and therefore morally obligated, to do everything in our power to extricate the owner from his business with the best price and most favorable terms.
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It’s amazing how many food and beverage businesses dot the landscape. If it’s true that “small business drives our country”, then restaurants are the life-blood of our society. No matter where you go, look to your left, look to your right…convenience stores, liquor stores, fast food, slow food, pubs, full-service, nightclubs, function facilities, ad naseum. Then you can break them down into chains, into ethnic subsets…every downtown, every shopping center, most office complexes. “my God, they’re everywhere.”
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National Restaurant Exchange is a recognized leader in the sale of food and liquor businesses. If you think its expensive to hire a professional, wait till you hire an amateur. Why would you go to anyone else to represent your interests? With many major life-style shopping centers in various stages of development, we can provide you with prime restaurant space, in prime markets, with all the assistance to bring your newest project to fruition.
Restaurant News
Beware: The “Cash Discount” is Coming
Feb 15th 2024
I first saw a note stating a cash discount at a restaurant I frequent three or four months ago. I remember thinking that this was only the beginning. Surcharges are nothing new. With rising costs in everything, it is only natural that businesses pass on the charge to the customer. However, with what we are seeing now, it is a bit misleading. Below are two notes from separate restaurants (ironically both in Red Bank—one was taken by me, the other is shared from a food forum posting) offering, respectively, a “cash discount” and “cash adjustment discount” for customers paying cash rather than using a credit or debit card. At first glance, it seems logical and almost goes unnoticed. But when you examine the menu, you realize there is no actual discount. The “discount” is just paying the original price. While both of these examples lead to less than $4 worth of charges for every $100 you spend, this is another example of nickel-and-diming within the hospitality industry. I do not want this opinion to negatively affect these two specific restaurants, which is why I left their names out. I am trying to see both sides of the story myself. Part of me is thinking that it makes sense because there are no transaction fees for cash, so of course those using it should pay less because it is not costing the business any additional money. We also rarely get frustrated when a business asks for a $10 minimum charge for card-carrying customers.
The other part of me says, “More fees? Really?” So far, such changes have been met with more disdain than understanding. A third business (in Matawan) experimented with a credit card surcharge a few weeks ago and did away with it after only a couple of days due to angry backlash…which also resulted in the owner posting an angry diatribe directed at customers on the restaurant’s Facebook page.
On the restaurant’s side, this is a damned if you do, damned if you don’t situation. They are trying to do the right thing by not raising costs for everyone, but somehow, there would be less backlash if they simply changed the prices on their menu by raising everything 35-40 cents, which is less than price increases normally are. How often do you hear someone complain that a restaurant raised its prices? When was the last time an Italian joint’s chicken parm going from $15.95 to $16.50 caused a riot? Not often, because it is expected. But to specifically target a group of customers by way of payment, that receives an outcry. It will be interesting to see where this goes. Keep an eye out, because once more restaurants catch wind of this, I am sure they will switch over to this “cash discount” scheme. Can I call it a scheme, or is that too harsh? I just wish people would call things what they are.
Restaurant turnover rates improve to pre-pandemic levels.
March 8th 2004 Restaurants and bars added nearly 42,000 jobs in February, marking the sector’s strongest monthly increase since January 2023.
The United States economy added 275,000 jobs in February – about 75,000 more than expected – while the unemployment rate ticked up to 3.9%, from 3.7% in January. According to data released March 8 from the Bureau of Labor Statistics, the 3.9% unemployment rate is the highest level in the past two years.
Employment at restaurants and bars accelerated in February, with net 41,600 jobs added during the month versus a loss of 2,400 jobs in January. February marked the strongest monthly increase since January 2023 for the industry’s workforce, illustrating a continued demand for both restaurant employment and usage.
“It's exciting to see both total U.S. employment and hospitality jobs rise by 42,000 and 275,000 positions, respectively, in the second month of the year. We know that in many parts of the country, January can bring a slight lull after the holiday rush, but February arrived in full swing, and rising restaurant jobs are a positive indicator of a strong consumer economy this year," Tony Smith, CEO and co-founder of Restaurant365 said in a statement.
Eating and drinking places are 31,000 jobs above their February 2020, pre-pandemic employment peak. Still, there continues to be room to grow. According to the BLS, there were 941,000 job openings in the combined restaurants and accommodations sector at the end of January.
According to a recent survey from the National Restaurant Association, 88% of operators, both limited-service and full-service, said they are likely to hire additional employees in the next six-to-12 months. The association expects the industry to add an additional 200,000 jobs this year.
As operators look to fill more roles, retention rates are improving in the industry, according to the BLS and reported by the National Restaurant Association. During the last four months, an average of 4.8% employees in the sector quit their jobs, which is a full percentage point below the average monthly quit rate of 5.8% during 2021 and 2022. It’s also slightly lower than the average quit rate of 4.9% from 2019.
Higher retention levels were a major theme during the latest round of earnings calls. Brinker noted its 12-month turnover improved at both manager and hourly levels, while Chipotle reported it is also seeing less turnover. Shake Shack executives reported the best staffing levels “in years,” which directly impacted a stronger labor and restaurant-level margin performance. And, BJ’s CEO Greg Levin said his company’s retention levels are now better than pre-COVID levels, “bringing added stability and less training time and cost to our business.”
The improvement in retention rates comes as wages continue to increase; in February they were up another 0.1% and are 4.3% higher year-over-year. The National Restaurant Association’s survey shows that 62% of operators said they’re “very likely” to expand payrolls this year.
10 MA Restaurants, Chefs Named 2024 James Beard Semifinalists. Restaurants and rising local chefs have garnered nominations from the James Beard Foundation this week. Here's who and where.
MASSACHUSETTS — 3-23-24 Ten Massachusetts restaurants and chefs were named 2024 James Beard semifinalists, the organization said Wednesday.
The James Beard Foundation awards, sometimes known as the “Oscars of food,” are among the nation’s most prestigious culinary honors. It recognizes eateries and chefs who create exceptional food, food media content, and better food systems, the organization said. They also demonstrate a commitment to racial and gender equity, community, sustainability, and a culture where all can thrive.
Categories include outstanding restaurateur, outstanding chef, outstanding restaurant, emerging chef, best new restaurant, outstanding bakery, outstanding pastry chef or baker, outstanding hospitality, outstanding wine and other beverages program, outstanding bar and best chef.
In Massachusetts, the following restaurants and chefs were named semifinalists this year:
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Comfort Kitchen, Dorchester
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haley.henry wine bar, Boston
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Rebel, Rebel, Somerville
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Tracy Chang, Pagu, Cambridge
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John daSilva, Chickadee, Boston
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Conor Dennehy, Tallula, Cambridge
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Patricia Estorino, Gustazo Cuban Kitchen & Bar, Cambridge
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Cecelia Lizotte, Suya Joint, Boston
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Laurence Louie, Rubato, Quincy
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Rachel Miller, Nightshade Noodle Bar, Lynn
"We are thrilled for the return of the James Beard Awards—recognizing the outstandingly talented leaders making their mark on American food,” Clare Reichenbach, CEO of the James Beard Foundation, said in a news release.
January 22, 2024
Firehouse Subs, the nearly 1,300-unit premium sandwich concept, plans to offer cash franchise incentives — as much as $100,000 per store for first responders and military veterans — as it prepares an expansion push, the company president said this week.
Firehouse Subs was purchased in in 2021 by Restaurants Brands International Inc.,the Toronto-based parent to the Burger King, Tim Hortons and Popeyes Louisiana Kitchen brands.
Firehouse Subs, the nearly 1,300-unit premium sandwich concept, plans to offer cash franchise incentives — as much as $100,000 per store for first responders and military veterans — as it prepares an expansion push, the company president said this week.
Firehouse Subs was purchased in in 2021 by Restaurants Brands International Inc.,the Toronto-based parent to the Burger King, Tim Hortons and Popeyes Louisiana Kitchen brands.
2023 restaurant openings surpassed pre-pandemic numbers, according to Yelp. Yelp’s data shows that 10% more restaurants opened in 2023 versus 2022, while 2% more restaurants opened in 2023 versus 2019, driven by new dessert and pop-up concepts.
January 24th 2024
We’ve covered at length the weird macroeconomic backdrop casting a tall shadow for the past two or so years. To summarize the weirdness, consider debilitating inflation, meteoric interest rates and spiraling consumer debt coupled with low unemployment rates and pent-up demand driving high discretionary spending levels. The restaurant industry has benefited from this resiliently discretionary consumer, who has shown a remarkable willingness to visit despite elevated menu prices.
This almost-counterintuitive trend also seems to be driving more optimism for operators and aspiring operators. According to a new report from Yelp, new restaurant openings surpassed pre-pandemic openings in 2023. This indicates the industry may have made a full recovery nearly four years after mandated closures were put into place to control a then-unknown and quickly spreading virus, which impacted an estimated 110,000 restaurants.
Related: New restaurant listings grew by 10% on Yelp in the past year
“The restaurant industry has proven to be resilient throughout the pandemic, with the industry seeing higher restaurant openings in 2023 than pre-pandemic levels for the first time. Even through economic challenges, restaurant owners continue to delight their diners, staying responsive to shifts in consumer preferences like the increasing demand for earlier reservation times and higher-end experiences, as Yelp data shows. In 2024, we expect to see this positive momentum continue as the restaurant industry continues to meet the moment,” Cliff Cate, Yelp’s VP and GM, Restaurants, said in a statement.
In addition to consumer habits, driving many of these openings is an influx in entrepreneurial activity, including franchising, created by the pandemic. In 2022, for instance, over 5 million new business applications were filed in the U.S., the second highest on record.
Zoomed in a bit, Yelp’s data shows that 10% more restaurants opened in 2023 versus 2022, while 2% more restaurants opened in 2023 versus 2019. Generating most of these numbers were dessert and pop-up concepts, both up 66% year-over-year. Additionally, creperies (63%), hot pot concepts (53%), and pasta shops (48%) showed strong growth in 2023.
Categorically, Mexican cuisine had a strong 2023, with over 9,100 new restaurant openings. This was followed by bars (6,863), sandwich concepts (6,562), breakfast and brunch concepts (5,939), and food trucks (5,297).
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