Another Restaurant Chain Goes Chapter 11 Route

Fast Casual Magazine just issued an article Taco Del Mar files for Chapter 11 highlighting the continued woes of chain operators. In the recent 10 days, Daphne's, Pizzeria Uno and now Taco Del Mar have decided to seek protection under Chapter 11 bankruptcy rules.

Morningstar Article on Casual Restaurants

In their January 8th article The Casual Restaurant Bankruptcy Epidemic, Morningstar analyst R.J. Hottovy takes a look at the shaky casual dining segment. The article focuses on the primary risk factors and the tight credit markets. Examples of fallen chains and potential failures highlight the need to remain vigilant with cost control.

This is a sober financial analysis of this industry segment. Like any other Wall Street analysis, the analyst provides his insight into the direction of restaurant stocks publicly traded on major markets. I drilled into the data on Darden (DRI) and found the stock price has increased less than 20% in the most recent 5 year period. This is better than a loss but the 3.7% average annual appreciation probably won't go too far in attracting major investors. Mr. Hottovy expects Darden to weather the storm. He is more negative regarding the chances of Dine Equity (parent company of IHOP and Applebees). Although he would like to see Dine Equity refinance some of their debt, Morningstar rates DIN as a 3 star stock (about average return expectation for the risk level).

Great Advice For Any Economy

Chef Jason Sandeman is a blogger working in Montreal (my favorite city). In a recent blog post he summarizes the 7 laws of Italian Cooking which if followed will help you eat well for less.

Upbeat RAMW Holiday Party

We all enjoyed the annual Holiday Party for the Restaurant Association of Metropolitan Washington held on Tuesday. This year, the party was hosted by Tony and Joe's and the food was fantastic!. The cocktail shrimp were fresh and huge with great flavor. They also offered oysters on the half shell with freshly grated horseradish. There was a terrific cheese display and a steamship roast of beef.

Everyone loved the shrimp and oysters and we were comparing different sauces for shellfish cocktails in my group. I stuck with beer and the selection was perfect for my tastes.

Although everyone expects this year to be slower than Q4 2007, most people feel the bottom is in and we will all do as well or better than Q4 2008.

It was great to see a big turnout and hopefully this is a good sign for special event caterers.

FoodTrak Update

I was in Las Vegas last week for the HFTP Annual Convention at Green Valley Ranch Resort. After my presentation, I was invited to dinner by Bill Schwartz, the founder and owner of System Concepts Inc. SCI is the developer of FoodTrak.

Bill invited me to a Version 4 Boot Camp in Scottsdale. The new version of FoodTrak is now web-based. There was always a web-based option but now all customers will enjoy this feature. The previous license fee for e-FoodTrak has been removed.

Operations with an ambitious wine list will find the recently added Wine Module a tremendous tool. This module has optional wine attribute data fields. Wines may be classified by brand, country, origin, region, sub-region, vineyard, vintage, type and varietal. In addition, a perpetual inventory report for wine is included in the new module.

Food Service Technology

Dear Joe Dunbar,
Thank you very much, for updating the latest tech & happenings in Hospitality world.

Regards,
Abraham

You are welcome Abraham. I am currently taking a look at a very improved product in the $1,000 range. Stay tuned for my review.

Great Article on Managing Food Costs

Brad Nelson, Marriott's Corporate Chef, wrote a great post on his blog last summer when food costs were beginning to spiral high due to the energy crisis. His article focuses on the backyard grilling options for the frugal home cooks.

The chef uses less tender cuts of beef and garden fresh vegetables from his own garden. There's a great recipe for new potatoes which cook in a cast iron skillet over slow coals.

New York Times Features Butchers

This week, the New York Times featured butchers in an article Young Idols With Cleavers Rule The Stage just when everyone thought butchering was a dying art. They interview young butchers from around the country working primarily in boutique butcher shops.

Check Out The Hospitality Finance Blog

I took down my well crafted Yahoo Finance Pipe with a filtered news feed for the hospitality industry. Eric Hertha's Hospitality Finance Blog will keep you up-to-date on any and all reports for public companies in our segment.

Food Cost Tips and Tweets

I started a daily food cost tip tweet on Twitter a week ago. All readers are welcome to join Twitter and follow my tweets.


By TwitterButtons.com

These tweets all start with #FCTip: which you can enter on Twitter's search to see the earlier days. Earlier today, I discovered Ping dot FM which allows the same micro-blogs to be posted here on the Food Cost Control blog, on Twitter, my FaceBook page, LinkedIn and Plaxo.

Arizona Republic Article-Small Portions

Cynthia Benin of the Arizona Republic called me last week to discuss the smaller portion menu options at TGIF.

Concepts of Tomorrow at Red Rock Casino

Restaurant Hospitality is celebrating the 10th anniversary of the Concepts of Tomorrow conference this October in Las Vegas. The 3 day conference will be held at the Red Rocks Casino and Resort.

You can sign up for email updates at their website .

Strategy Pays Off For TGIF

TGIF's gutsy "Right Portion, Right Price" strategy has proven successful. Friday patrons have 11 smaller portion choices and these menu items now account for 15% of sales.

Major Chain Adopts Smaller Portion Policy

T.G.I.F. has taken a leadership position in the smaller portion size issue. In an article sent to me two hours ago by Casual Dining (NRN publication) Friday's Right Portion, Right Price policy is reviewed. Personally, I believe this policy is solid. I work in many restaurant kitchens and the mounting garbage is proof positive our restaurants are serving guests too much food. With everyone trying to work through the current economic puzzle, buying less food and holding menu prices low seems like a winning strategy.

Beef Recall Follow Up Article

Jamie Hartford contacted me for information on her follow up article regarding the recent beef recall. QSR Magazine Online

Record Beef Recall Article

Just in a couple of hours ago, the USDA Orders Largest Beef Recall involving over 140 million pounds of frozen beef.

Spread Too Thin?

In a recent post, I explained the profile photo for this blog. The hat I'm wearing in the blog profile photo is from Pick Up Stix. Carlson (owners of TGIF) acquired Pick Up Stix from their founder, Charles Zhang, in 2002. The commissary manager gave me the hat on a visit I paid to Charlie's commissary in San Clemente, CA.

There's a recent story in the Sacramento Business Journal about a huge number of closings in the Pick Up Stix units in California, Nevada and Arizona. Having observed the well run commissary in San Clemente, I think the concept benefits from the central production facility. I wonder if the new owners utilize the San Clemente commissary for units in Northern California, Nevada and Arizona. Perhaps, the high cost of transportation is an issue. I'm speculating since I haven't been involved with Pick Up Stix in the Carlson era.

Profile Photo Story

I have been asked by several readers about the logo on my hat in my profile photo. The photo was taken 4 years ago at Disneyland in Anaheim, CA. The cropped shot leaves out my then 6 year old daughter sitting on my lap. The logo on the hat is for a fast casual concept called Pick Up Stix.

I took a day away from my vacation to visit their commissary in San Clemente, CA. The hat was a gift from the commissary manager. If anyone is contemplating a commissary, the Pick Up Stix operation is a great model. Carlson (TGIF, etc.) purchased the concept from the original owner and they are expanding beyond Southern California.

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Welcome to the Food Cost Control Blog! Most of you reach here via a search engine. If you are new to blogs, the posts are listed in chronological order with the most recent post on top. The left sidebar has many industry links and other information sources. I encourage you to signup for our monthly newsletter. Readers are encouraged to join the online conversation. At the end of each post, you may click on the word COMMENTS and post any questions, comments or criticisms. The best comments include additional industry insight.

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I'd like to welcome everyone with an interest in the food and beverage industry. This blog is set for open comments. Every month has a central theme. The most popular blog posts are listed on the sidebar (left hand column). Everyone is encouraged to comment.

Actual consulting services are offered on a fee basis. Most of my clients start with a short two-day site visit. The visit gives me time to review the operation and develop an action plan. We review the plan and discuss possible assistance in the implementation. My clients include restaurants, hotels, caterers, clubs, institutional dining accounts and sports venues.



I'm often asked "What do you do?" and I'd like to quote a client: "You're very analytic but you're also down to earth." The advice you receive is not difficult to implement. If you would like me to train you in the advanced analysis I use, we would progress in stages geared toward your comfort zone.

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