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By Chloe can end ties with namesake co-owner

Nation's Restaurant News - Mon, 2017-03-27 18:16

By Chloe backers ESquared Hospitality can terminate ties with the concept’s namesake co-owner Chloe Coscarelli, an arbitrator has ruled, according to reports Monday.

New York-based ESquared Hospitality, which also owns the BLT Steak brand, can continue to grow the five-unit By Chloe chain without Coscarelli’s involvement, the ruling said.

However, Coscarelli told The Wall Street Journal: “I will protect the integrity of my brand.” Coscarelli and ESquared Hospitality’s Samantha Wasser founded By Chloe in 2014, expanding the vegan fast-casual concept in New York, Boston and Los Angles.

In the arbitration, which began last year, ESquared Hospitality CEO Jimmy Haber claimed Coscarelli “did not negotiate in good faith” when he was seeking to expand By Chloe. 

ESquared Hospitality launched in 2004, with BLT Steak, and has grown to more than 20 restaurants, including BLT Prime with David Burke, BLT Burger, BLT Market, Tavern 62, Casa Nonna, the Florentine, Horchata and The Wayfarer. 

By Chloe’s menu includes vegan burgers, sandwiches, fries, pasta, salads, beer, wine, juices and baked goods in a fast-casual setting. Sandwiches range from $8.95 for avocado toast with vegetables and almond “Parmesan,” to $11.95 for the Whiskey BBQ with smoked portobello and seitan. Salads start at $10.95.

Nation’s Restaurant News named the concept a Breakout Brand in 2016.

Coscarelli is a cookbook author and winner of the Food Network’s “Cupcake Wars” TV competition. NRN named Coscarelli and Wasser to its Power List in 2017.

Last March, By Chloe partnered with Whole Foods Market to open a restaurant inside the grocer’s first 365 store in Los Angeles.

Contact Ron Ruggless at Ronald.Ruggless@Penton.com

Follow him on Twitter: @RonRuggless

Ruby Tuesday gets interesting new investor

Nation's Restaurant News - Mon, 2017-03-27 17:45

This post is part of the On the Margin blog.

On Friday, Leon Capital Group announced through federal securities filings that it had made a 9.5-percent investment in Ruby Tuesday Inc. The filing was activist in nature, meaning that Leon Capital plans to hold talks with the company’s management. 

Here’s the kicker: Leon Capital is not an activist investor. It is an investment fund that focuses on — wait for it — real estate.

Earlier this month, Ruby Tuesday said it was exploring strategic alternatives, including a potential sale.

The company’s primary asset isn’t its restaurant chain. It’s the 300 or so restaurant locations the company owns, rather than leases — an asset that itself is valued at far more than the company’s market capitalization of nearly $160 million. 

That real estate, as we said earlier this month, makes Ruby Tuesday a potentially attractive target for a buyer and makes it likely the company gets sold despite more than a decade of weak sales in a casual dining market that is in decline. 

Ruby Tuesday’s stock was up nearly 9 percent Monday on the news.

According to the filing, Leon Capital has acquired its shares since early February and now owns nearly 5.8 million of the company’s shares, which it purchased for $12.6 million.

In the filing, Leon indicated that Ruby Tuesday’s shares were “undervalued and represented an attractive investment opportunity.”

Leon Capital also noted that it “may seek to participate in strategic transactions that the issuer may evaluate or undertake in connection with its recently announced exploration of strategic alternatives.” In short: Leon Capital is interested in Ruby Tuesday’s real estate.

Leon isn’t the only investor who has taken interest in the 613-unit Maryville, Tenn.-based bar & grill chain. There are other investors who see value in the chain based on the value public stock investors are putting into the company.

Donald Smith & Co., Inc., for instance, has amassed more than 10 percent of the company’s shares in recent months, according to securities filings.

Donald Smith & Co. is a “deep value manager” that invests in “out-of-favor companies” that are well undervalued and “have significant earnings potential over the next two to four years,” according to the firm’s website. 

Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter at @jonathanmaze

Darden to buy Cheddar’s for $780M

Nation's Restaurant News - Mon, 2017-03-27 16:50

Darden Restaurants Inc. said on Monday that it has agreed to buy Cheddar’s Scratch Kitchen from the private-equity groups L Catterton and Oak Investment Partners for $780 million in an all-cash deal.r

The acquisition, coming three years after Darden sold Red Lobster, gives the Orlando-based casual-dining operator its eighth concept — along with Olive Garden, LongHorn Steakhouse, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s.

“Cheddar’s is an undisputed casual-dining value leader with broad appeal and strong average restaurant volumes,” Darden CEO Gene Lee said in a statement. “Cheddar’s is a great fit in the Darden portfolio because it complements our existing brands. This addition will also enable Darden to further strengthen two of our most competitive advantages: Our significant scale and our extensive data and insights.”

Darden had been speculated to be on the lookout for another acquisition candidate, and one with room to grow, so it could generate sales growth targets.

In Cheddar’s, Darden gets a high-volume concept with more room to grow. The casual-dining chain was founded in 1979 in Arlington, Tex., and has 165 locations in 28 states. The locations boast average unit volumes of $4.4 million.

The $780 million represents a multiple of 10.4 times Cheddar’s 2016 cash flow.

Ian Baines, Cheddar’s CEO, will remain president of Cheddar’s and will report to Lee. The deal is expected to be complete this spring. 

“We are excited about the opportunity to be part of Darden,” Baines said in a statement. “Our operating philosophy and values are similar and we believe this transaction provides a great opportunity for our team members to continue to grow and develop in their careers. Additionally, Darden’s expertise will enable us to further capitalize on our growth potential.” 

The deal comes just weeks after Cheddar’s bought its largest franchisee, the 44-unit Greer Companies. That left Cheddar’s with 25 franchised locations and 140 company-owned units. The company long ago decided to concentrate on company-owned units.

Darden is a largely company-run operation.

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter at @jonathanmaze

Buffalo Wild Wings nominates former McDonald’s executive to board

Nation's Restaurant News - Mon, 2017-03-27 16:05

Buffalo Wild Wings Inc. named two nominees Monday to its board of directors, including former McDonald’s USA president Janice Fields and CTI Foods CEO Sam Rovit, who was proposed by an activist investor pushing for changes.

The nominees would give the Minneapolis-based casual-dining chain more food industry experience on its board, assuming shareholders approve them.

By nominating Fields and Rovit, Buffalo Wild Wings all but assures that its nine-person board will have at least five new members. In October, the company named three new board members: CBS Radio president Andre Fernandez, eBay Inc. executive Harry Lawton and Levi Strauss & Co. CFO Harmit Singh.

The board change “demonstrates our commitment to enhancing Buffalo Wild Wings’ governance practices through board refreshment,” Buffalo Wild Wings chairman Jerry Rose said in a statement.

But the new nominees did not satisfy activist shareholder Marcato Capital Management, although Rovit is one of its own nominees. The investor, which owns 5.6 percent of the company’s stock, called the nominations “desperate,” and said they do not go far enough.

“Buffalo Wild Wings’ desperate actions only confirm that there is substantial deficiency at the board level and lack of a cohesive plan to create long-term shareholder value,” Marcato said in a statement. 

“It is deeply troubling that the company would take these steps without consulting us or other major shareholders, as we have continuously endeavored to engage in constructive dialogue with the board and management on the strategic, operational and financial issues that we believe are plaguing the company. Unfortunately, every attempt we’ve made has been stymied.” 

Marcato has been pushing for changes to Buffalo Wild Wings’ business model and operations, and has nominated four people to the company’s board. In addition to Rovit, Marcato has nominated former Pizza Hut CEO Scott Bergren, former Buffalo Wild Wings executive Lee Sanders and Marcato managing partner Mick McGuire. 

Fields has more than 35 years of restaurant experience, much of it with McDonald’s Corp. From 2010 through 2012, she was president of McDonald’s USA, overseeing 14,000 domestic restaurants. Before that, she was chief operating officer with the domestic division and led the development of the McCafé business.

Rovit has been CEO of food maker CTI since 2015, and previously worked with Kraft Foods.

With the nominations of Fields and Rovit, James Damian and Michael Johnson will retire from the board. Both had been directors at the company since 2006. 

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter: @jonathanmaze

Deeper Understanding

Hotel Interactive - Mon, 2017-03-27 12:41
Expedia Launches New Sentiment Analysis Tool To Help Hotels

How self-serve kiosks can rescue corporate dining — part 2: how the solution came to be

FastCasual.com - Mon, 2017-03-27 11:59
While self-serve kiosks allow corporate dining locations to eliminate the cashier and improve the speed of service for customers, there had been no "off-the-shelf" solution - until now.

Velvet Taco names Clay Dover president

Nation's Restaurant News - Mon, 2017-03-27 10:00

Velvet Taco has named Clay Dover to the newly created position of president, the fast-casual operator said Monday.

Dover most recently served as chief marketing officer for Pei Wei Asian Diner, the fast-casual division of Scottsdale, Ariz.-based P.F. Chang’s China Bistro Inc. Prior to assuming that role in 2015, Dover held executive positions at Raising Cane’s Chicken Fingers.

Velvet Taco, a division of Dallas-based Front Burner Restaurants, this month opened its fifth unit in Austin, Texas. The brand was named a Nation’s Restaurant News Hot Concept in 2016.

“Clay is one of the most talented individuals in the restaurant industry, and we couldn’t be more pleased that he will be leading the Velvet Taco brand as it embarks on a path of significant growth across new and existing markets,” Front Burner CEO Randy DeWitt said in a statement.

Velvet Taco opened its first restaurant in Dallas in 2011, and later expanded to Chicago, Houston and Fort Worth, Texas.

In September, Velvet Taco received a “significant strategic growth investment” from the private-equity firm L Catterton.

Dover said he was attracted to Velvet Taco’s fast-casual niche for innovative tacos.

“I really had no intention of leaving Pei Wei any time soon, but the opportunity to join Randy and the Velvet Taco team with this extraordinary concept at such an early stage in its development was just too good to pass up,” Dover said in a statement.

Prior to joining Raising Cane’s, Dover served as CEO of Metromedia Restaurant Group and vice president of marketing at Apex Restaurant Group. 

Contact Ron Ruggless at Ronald.Ruggless@Penton.com

Follow him on Twitter: @RonRuggless

McAlister's franchisee: 'Don't climb the ladder; build your own'

FastCasual.com - Mon, 2017-03-27 08:47
Heather Ricks, a McAlister's Deli franchisee in Virginia, has a six-person management team. Five are females, and one of her restaurants boast an all-female kitchen.

Rosati's CEO: 'If your company is a boys club then join the club'

FastCasual.com - Mon, 2017-03-27 08:30
Marla Topliff, president of Rosati's Pizza, fell in love with the restaurant business after working as a marketer for Rosati's.

W Marbella To Debut On Spain's Sizzling South Coast

Hotel Interactive - Mon, 2017-03-27 07:52
NEW YORK, NY––W Hotels Worldwide, now part of Marriott International (NASDAQ: MAR), today announced the signing of W Marbella and The ...

Hilton Appoints Chief Customer Officer

Hotel Interactive - Mon, 2017-03-27 05:35
MCLEAN, VA--Hilton (NYSE:HLT) has named Jonathan (Jon) Witter as Chief Customer Officer. In this newly created role, he will oversee the ...

MNC Land And Hyatt To Bring First Park Hyatt Hotel To Indonesia

Hotel Interactive - Mon, 2017-03-27 05:33
JAKARTA, INDONESIA--PT MNC Land Tbk (MNC Land) and Hyatt Hotels Corporation (NYSE: H) today announced plans for the first Park Hyatt ...

Gap between sales and registrations narrowed in 2016

AutoNews - Mon, 2017-03-27 01:01
Questionable sales practices by the U.S. auto industry were thrust into the spotlight last year amid investigations into Fiat Chrysler's reporting. Yet the difference between industry sales and actual registrations considerably narrowed.
Categories: Latest News

Zellmer wins transformation role at Porsche

AutoNews - Mon, 2017-03-27 01:01
Porsche's U.S. chief Klaus Zellmer fell in love with the U.S. on an epic road trip as a 19-year-old. Now he gets the chance to shepherd the iconic sports car brand in the market he calls the most competitive in the world.
Categories: Latest News

Car-shopping sites could start selling

AutoNews - Mon, 2017-03-27 01:01
Third-party shopping sites are consumer-research havens. But the executives who run them are considering whether those sites could become platforms where people purchase vehicles -- without visiting a dealership or dealership website.
Categories: Latest News

Ford focuses on slimming down inventory

AutoNews - Mon, 2017-03-27 01:01
Ford Motor Co. is determined to avoid a glut of unsold cars and trucks piling up on dealer lots by trimming production - even if its vehicle volumes are relatively healthy compared to the rest of the industry.
Categories: Latest News

Getting payment figures down to the penny

AutoNews - Mon, 2017-03-27 01:01
With advancements in online tools for trade-in valuation and financing, could there be a day when consumers get exact payment offers via third-party sites before stepping foot in dealerships?
Categories: Latest News