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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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Restaurant News
Beware: The “Cash Discount” is Coming
March 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.
What Martha Stewart learned from opening her first restaurant at 80
4-21-24 Martha Stewart was the keynote speaker at the Restaurant Leadership Conference and talked about her career—from her early days as a caterer to her first restaurant opening in Las Vegas.
Martha Stewart’s entire career as a businesswoman, media mogul, and champion of homemakers has always revolved around the foodservice world but never directly embraced it. In fact, as the keynote speaker for the 2024 Restaurant Leadership Conference in Phoenix, Ariz., she spoke about her career beginning as a stockbroker who invested early on in McDonald’s. Then she went on to become a caterer, began writing cookbooks (she just published her 100th book), starred in countless television shows, and started her own print media empire. But until 2022, when The Bedford in the Paris Las Vegas Hotel opened, she had never owned her own restaurant.
“Here I am at 80 years old, and why I didn’t do a restaurant sooner, I will never know,” Stewart said. “I kept saying, ‘Well, I really like to enjoy going out to restaurants, but I’m not sure about owning one.”
Related: Jersey Mike’s CEO Peter Cancro wins the 2024 Restaurant Leader of the Year award
Opened in Aug. 2022, The Bedford is modeled after her real home, with “the same furniture, the same accessories,” and illuminated windows that offer video “views” of her garden and farm that change with the seasons.
“Restaurants are one of the hardest businesses on earth,” Stewart said, prompting cheers from the appreciative crowd, though she did have a couple of pieces of advice from her own experience as a first-time restaurant owner. The first was to always believe in the value of your product.
Related: Martha Stewart to keynote at the Restaurant Leadership Conference in April
“When we were planning the menu, we wanted to charge for a breadbasket and they said, ‘you can’t do that, the bread is free!’” Stewart said. “But when they saw what went into the breadbasket, they rethought it, and now they’re charging $19 for it!”
The breadbasket itself is meant to turn heads and is topped with tall crispy bread rounds embedded with vegetables, as well as focaccia, and rolls. Her other piece of advice for restaurant operators was to not be afraid to embrace the old-fashioned way of doing things, even if it seems like everyone else is chasing down trends.
“People like deliciousness and sometimes tradition,” Stewart said. “They like the familiar and not too much of the unfamiliar. I was just at a restaurant that was very beautiful, but the food was so unfamiliar that it was kind of shocking… it's a fine balance between what you choose to serve, what you choose to promote, and how you serve it and show it.”
But that does not necessarily mean that restaurant operators should be stuck in their ways or rooted in the past. It was unfamiliar and somewhat shocking to her fans when Stewart began partnering with Snoop Dogg, but the atypical collaboration has really worked.
“Just working with a rapper was unusual for a woman like me a serious cook, but the give and take was so surprising that it was charming and funny,” Stewart said. “It was fabulous, demographically. My demographics broadened and so did his.”
She is also embracing new technology and hinted that there could be an AI collaboration with her brand sometime in the future, with “little Marthas” that home cooks, homemakers, and others could ask for advice. “I take advantage of whatever comes along,” Stewart said, adding that she has been involved on Twitter and Instagram since day one.
Before leaving, she reminded the restaurant operators in the audience to “keep farmers happy;” as a farmer herself, Stewart knows how crucial they are to the lifeblood of the restaurant industry.
Burger King Corp.
Burger King’s Sizzle prototype is more digitally focused, the company says, and will soon be available to all franchisees.
RBI adds $300M to Burger King remodeling program
The investment is on top of the restaurant company’s 2022 $400M Reclaim the Flame program
Ron Ruggless | Apr 30, 2024
Restaurant Brands International Inc. plans to expand its Burger King remodeling program with an additional $300 million from 2025 to 2028, the company said in announcing its first-quarter earnings.
The Toronto-based RBI, which also owns the Tim Hortons, Popeyes Louisiana Kitchen and Firehouse Subs brands, said it plans to remodel 600 Burger King units it will be adding from its announced acquisition of the Carrols Restaurant Group, which it plans to close in the second quarter.
Burger King in September 2022 announced its initial $400 million, two-year Reclaim the Flame investment in modernizing the burger system.
“Reclaim the Flame is working,” said Josh Kobza, CEO of RBI, said in a first-quarter earnings call. “And you're seeing another clear demonstration of that confidence in the expanded company investment we announced this morning.
“The $300 million investment will contribute to remodeling another 1100 restaurants and bring us to between 85% and 90% modern image by 2028,” Kobza said. “We're continuing to incentivize better operations and higher scope remodels while introducing another element to incentivize urgency by providing franchisees more meaningful contributions the sooner they reimage.”
Kobza said the Sizzle remodel platform should be available to all franchisees soon.
Digital-forward remodels have been made in the Miami, Las Vegas, New Jersey, Northern California and Asheville, N.C., markets, he said.
“I do expect that that all of these remodels should be fairly impactful,” Kobza added. “We're doing larger scope remodels in general, compared to what we did over the prior 10 years, so those tend to have a big impact on the consumer and on sales.”
Patrick Doyle, RBI executive chairman, added: “Going to a great looking Burger King but driving past another one that doesn't look great is not ideal. We thought it was important for us to get this last leg out there to show our commitment to the franchisees, to give you visibility on our path to getting this system all looking great.”
Remodels currently are under 50% of the system, he added, but the company awaits the positive impact on the brand overall as more remodels are completed.
The initial 2022 Reclaim the Flame program included $150 million in advertising and digital investments ("Fuel the Flame") and $250 million in remodels and relocations, restaurant technology, kitchen equipment, and building enhancements ("Royal Reset").
During the three months ended March 31, RBI funded $6 million toward the Fuel the Flame investments, including $5 million toward support behind the Burger King U.S. advertising fund, and $19 million toward Royal Reset investments, including $9 million toward remodels.
“The marketing is getting better,” Kobza said. “We have the biggest focus on operational consistency that the brand has ever had. We now have a path to be nearly fully modern image across the U.S. by 2028. Our franchisees are now on a path to strong profitability.”
As of March 31, the company had funded a total of $79 million toward the Fuel the Flame investments and $81 million toward Royal Reset investments.
For the first quarter ended March 31, RBI’s net income was $328 million, or 72 cents a share, compared to $277 million, or 61 cents a share, in the prior-year period. Revenues were $1.739 billion, compared to $1.59 billion in the prior-year quarter.
Same-store sales by concept were up 15.5% at Tim Hortons Canada, up 8.7% at Burger King U.S., up 3.4% at Popeyes US and up 0.3% at Firehouse Subs U.S. International same-store sales were down 3% at Time Hortons, up 12.5% at Burger king, up 29.8% at Popeyes and up 1.1% at Firehouse Subs.
As of March 31, Restaurant Brands International owned and franchised 31,113 restaurants, including 7,139 Burger Kings, 4,505 Tim Hortons, 3,412 Popeyes, 1,277 Firehouse Subs, and 14,780 in its international division.
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