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— A N D DOLLARS—ARE MORE ELUSIVE. P

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 RESTAURANT BUSINESS / FEBRUARY 2018 / VOLUME 117, NUMBER 2

CONTENTS
IN THE KNOW
The best restaurant companies to
work for, Tesla’s retro QSR, pot
smokers’ fave spots and more. . . . . 15

VOICES
Ron Shaich’s farewell . . . . . . . . . . . 19
Panera founder reflects on success.
Reality Check . . . . . . . . . . . . . . . . . . . . . 20
The Bottom Line . . . . . . . . . . . . . . . . . 22
Advice Guy . . . . . . . . . . . . . . . . . . . . . . . . 25

BEST PRACTICES
Data-driven loyalty . . . . . . . . . . . . . 27
How restaurants are using analytics
to drive repeat business.
Mapping a tech strategy . . . . . . . 28
Trump’s labor impact . . . . . . . . . . . 31

CONCEPTS
Slapfish slows it down . . . . . . . . . . .33
Fast casual finds efficiencies with
a full-service spinoff next door.
Pie Five’s pizza lab . . . . . . . . . . . . . . 34
(Veggie) burger joints. . . . . . . . . . . 36

MENU INNOVATION
FEATURES The vegetable bet . . . . . . . . . . . . . . . . 39
How far is too far? . . . . . . . . . . . . . . . . . . . . . . . . . 54 Operators weigh the pros and
Flavor innovation has its hurdles. cons of plant-based dishes.
Here’s how operators are jumping them. Krystal’s breakfast LTO . . . . . . . . 42
Bar menus expand . . . . . . . . . . . . . . 44
18 flavors shaping modern menus . . . . 62 Solving soda’s slump . . . . . . . . . . . 46
Make the most of the ingredients that
are poised to break out this year.
IN EVERY ISSUE
LEADERS Editor’s Welcome. . . . . . . . . . . . . . . . 10
The acquirer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Publisher’s Letter . . . . . . . . . . . . . . . . 12
Michael Kulp has helped turn KBP Foods Products . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
into a formidable franchise group. Advertiser Index. . . . . . . . . . . . . . . . . .74
Classifieds . . . . . . . . . . . . . . . . . . . . . . . . . .74
The Big Idea . . . . . . . . . . . . . . . . . . . . . . . .76
COVER AND PHOTOGRAPH THIS PAGE BY
CLINT BLOWERS, STYLING BY LISA KUEHL

Restaurant Business (ISSN 0097-8043 USPS 917-180) is published monthly by Winsight, LLC, 300 S. Riverside Plaza, Suite 1600, Chicago, IL 60606.
Copyright 2018 by Winsight, LLC. All rights reserved. Subscriptions in the U.S. $119; Canada $160; air mail outside U.S. and Canada $360. Single copies in the U.S. and
Canada $15. Vol 117, No. 2. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER send address
corrections to Winsight Media, P.O. Box 1328, Northbrook, IL 60065-1328.

F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 3
 EDITORIAL, FOODSERVICE GROUP
DIRECTOR Kelly Killian
EXECUTIVE EDITOR EDITOR-AT-LARGE MANAGING EDITOR
Jonathan Maze Peter Romeo Sara Rush Wirth
SENIOR EDITORS Patricia Cobe, Kelsey Nash
EDITOR Heather Lalley
ASSISTANT EDITOR Benita Gingerella
CONTRIBUTING EDITORS Brett Dworski, Lizzy Freier,
Aaron Jourden, Alaina Lancaster

DESIGN SALES
CREATIVE DIRECTOR GROUP PRESIDENT
Bruce Ramsay Chris Keating
SENIOR ART DIRECTOR REGIONAL VICE PRESIDENT—
Sara Stewart MIDWEST
Mark Cullum
EDITORIAL PRODUCTION (312) 940-1566, mcullum@winsightmedia.com
DIRECTOR
REGIONAL VICE PRESIDENT—
Jennifer Bulat MIDWEST & SOUTH
ASSOCIATE EDITOR Tim Vaughan
Lexi McPike (312) 940-2274, tvaughan@winsightmedia.com

ASSISTANT EDITOR REGIONAL VICE PRESIDENT—

Joe Guszkowski WEST
Mark Weinstein
MARKETING AND MEDIA OPERATIONS (562) 375-0377, mweinstein@winsightmedia.com
DIRECTOR, MEDIA OPERATIONS REGIONAL VICE PRESIDENT—
Erin Kuyper NORTHEAST
PRODUCTION COORDINATOR Chris McCoy
Christina Kayalik (781) 793-7888, cmccoy@winsightmedia.com

DIRECTOR, CONTENT MARKETING CORPORATE

Kayley Bogdan CHIEF EXECUTIVE OFFICER
Michael Wood
DIGITAL PRODUCTION
DIRECTOR, DIGITAL PRODUCTS CHIEF FINANCIAL OFFICER
& DEVELOPMENT Joe Carroll
Lindsay Holley PRESIDENT, MEDIA & EVENTS
MANAGER Ward Downing
Kim Collie PRESIDENT, TECHNOMIC
WEB PRODUCER Shawn Edwards
Emily Adams CHIEF CUSTOMER OFFICER
Nick Hayman
SUBSCRIPTION/ CHIEF OPERATING OFFICER
CIRCULATION INQUIRIES Alanna Young
(800) 685-4152, RB@omeda.com CHIEF DIGITAL OFFICER
SINGLE-COPY SALES Tara Tesimu
(800) 685-4152 EVP, TALENT & CULTURE
Andrea Scott McCluskey
SVP, CONTENT
Sarah Lockyer

300 S. Riverside Plaza

Suite 1600
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Unless otherwise indicated, all email addresses are first initial and last name
@winsightmedia.com (e.g., ckeating@winsightmedia.com)

4 R e s tau R a n t B u s i n e s s f e b r u a r y 2 0 1 8

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 ONLINE
TO SEE WHAT’S TOP OF MIND FOR RESTAURANT
OPERATORS, VISIT OUR WEBSITE:
restaurantbusinessonline.com

75 % WHAT’S HITTING YOUR INBOX

As busy executives, we know your inboxes get crowded.
of foodservice But we also know that you seek restaurant-specific
business intelligence. The numbers prove it: RB Daily—
operations Restaurant Business’ eNewsletter providing the latest
industry news, tips and insights—has more than 100,000
subscribers. Now you can drill down further into those
140,000 industry smarts with segment-specific eNewsletters along
with your daily dose of news. These weekly products are
consumer tailored to different audiences, delivering information to
visits tracked help operators become more efficient and profitable.

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See what we see. with the news

and ideas they
need to make
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and local
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6 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 S C R A T C H S TA R T.

© 2017 Hormel Foods, LLC

S C R AT C H F I N I S H .
EDITOR’S WELCOME

STAFF AS
TOUR GUIDES
Want customers to buy in
WELCOME
TO THE TEAM!
Veteran reporter
to new flavors? Start with and writer
servers’ selling skills. Jonathan Maze has
joined Restaurant
Business, bringing
his background
as a well-known
financial journalist
SARA RUSH WIRTH Managing Editor
to the team. He’ll
SWIRTH@WINSIGHTMEDIA.COM
help us strengthen
our coverage of top
Being a flavor innovator in 2018, especially as a chain restaurant, comes with an ar- restaurant chains
ray of challenges. Operators have to weigh adding a trendy dish against the current even more, offering
news, analysis
call to simplify menus. Plus, between new SKUs, development time, marketing
and data that
and staff training, the costs add up. But is that new dish—an LTO or a permanent senior executives
addition—going to help bring guests in and keep a brand top of mind? need to run their
The Cheesecake Factory recently opened its second location of RockSugar businesses better.
Jonathan has
Southeast Asian Kitchen in suburban Chicago, so some co-workers and I went spent more than
to check it out. The menu is large, in the same style as its Cheesecake Factory 10 years covering
parent. The items notably are not fusion or funky interpretations of Asian food; Top 500 chains
and emerging
RockSugar embraces authenticity (read: on-trend). restaurant
The challenge in digesting RockSugar’s menu isn’t in the size, but rather in companies and is
the server knowledge—and this is where a strong staffer could have made a dif- known for his deep
insight into the
ference. While our server was perfectly nice and attentive, he never mentioned economics of the
a section of signature sodas—which we would have purchased, had we been di- industry, as well as
rected there. He didn’t suggest any of his favorite dishes or highlight any flavors. trends in financing
and franchising.
Whether a menu is huge or it’s full of lesser-known dishes or ingredients, the Maze is a prolific
server becomes the most crucial element of the experience. An explanation of blogger, reporter
what “Hainanese style” or “Char siew style” are, or a quick description of the dif- and social media
personality and is
ference between red, green and masala curry, would be helpful in making smarter a regular speaker
ordering decisions. Without it, we got what we knew. at industry events.
The experience with our clearly green server at RockSugar took me back to my In addition to
writing his monthly
college days, when I was a server at Flat Top Grill in Madison, Wis. One position
column, The
in the restaurant was the “tour guider.” Part of the job was to literally walk people Bottom Line (Page
through the build-your-own-stir-fry-bowl line, making suggestions and asking 22), you can find
more from Maze at
questions to help guide guests. At the time, we mocked it. As young servers, we
RestaurantBusiness
didn’t understand; we figured guests would know what to do. Online.com.
Looking back, though, I get why the manager would constantly call for a tour
guider. That’s how every single server should function, especially with less famil-
iar flavors: as a tour guide.

10 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
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PUBLISHER’S LETTER

make a restaurant fast casual? What’s

the difference between casual dining
and family dining—or is it midscale?
Is polished casual a thing? Can you
call a place fine dining if you’re al-
lowed to dine in (fashionably) ripped
jeans? And what the heck is a ghost
restaurant?
As hard as we’ve tried to put
restaurants into categories, you
restaurateurs keep defying definition.
From Angus steak with Gouda at
Arby’s to burgers and fries at the Four
Seasons, menu creep has been going
on for years. When Chevy Chase said,
“I’m so hungry I could eat a sandwich
from a gas station,” in “Vacation”
back in 1983, it was funny. Now, a
made-to-order Turkey Veggie Hoagie
from a Wawa convenience store is as
good as anything you can get at your
local deli.
Perhaps more importantly, restau-
rant concepts of different stripes
learn from each other. The tradition-
al menu life cycle—from ethnic indie
to fine dining to casual dining to QSR,

STAYIN’ ALIVE ACROSS CHANNELS

the journey that took hummus from
Mediterranean restaurants to a full
selection at your local CVS—is old
news. Now, food types, service styles
and more jump genres all the time.
Expanding our reach as restaurants continue David Chang aspires to Taco Bell’s
to defy traditional categorizations. tech game. Subway was offering Sri-

A
s a teenager in
the 1980s, I hated
disco. Hated it
with the heat of a
thousand suns. I’m
pretty sure I even owned a “Rather
Dead Than Disco” T-shirt.
Well, at least I claimed to hate
it. You see, I was a rock ‘n’ roll fan (I
don’t think we called it “classic rock”
yet), and if you liked Led Zeppelin
and The Who, you were honor-bound
to loathe the Bee Gees and Donna
Summer. Tight lines were drawn
between musical genres, and you
crossed those lines at your own peril.
And yet, somehow, I know most
of the words to “Stayin’ Alive.” And
there is plentiful wedding video
footage of me getting down to “Last
Dance.” At the end of the day, mu-
sic is music, and a good melody can
hook you, whatever genre the art-
ist has been tagged with. (If my 14
year-old self knew I was ever going to
write this paragraph, he’d borrow Doc
Brown’s DeLorean time machine, zip
to the future, and bop me on the head
with Lynyrd Skynyrd’s “One More
from the Road” double LP.)
So, too, with restaurants. We’ve
spent a lot of time the past 10 years
debating the definitions of different
restaurant categories. What qualities
racha before most of us knew how to
pronounce it.
So, beginning with this issue,
we’re expanding the circulation of
Restaurant Business magazine to
100,000. Our readers run every-
thing from one-unit independents to
global mega-chains, and everything
between. Top content appeals to all
CHRIS of you, and as a result, our readership
KEATING
keeps expanding. Even though we’re
Group President, going to keep trying to put you in box-
Winsight es—calling you casual dining and fine
CKEATING@ dining or whatever—you’re going to
WINSIGHTMEDIA.COM
keep busting out of those boxes.
And at the end of the day, you’re
all trying to do the same thing. Bring
guests to your restaurant and give them
a wonderful experience, so they come
back again. And again. (And again.)

12 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 Today, meat alternatives aren’t a maybe—they’re a must.
Thankfully, Bush’s Best® beans can save the day.
Loaded with protein and nutrients, and versatility that spans
the menu, they truly are the most super of super foods.
www.bushbeansfoodservice.com

©2017 Bush Brothers & Company.

All rights reserved. 9/17
 RESTAURANT EXPERTISE IN 20 MINUTES

IN THE KNOW
Workforce Watch

5 OF THE BEST RESTAURANT

COMPANIES TO WORK FOR
Not every employer can be Facebook,
but a handful of restaurants just might
be coming close. The social media
company topped Glassdoor’s 2018
Best Places to Work ranking, in part
thanks to perks such as free food, on-
site medical centers and 17 weeks of
paid parental leave. Competing with
a $27.6 billion company’s culture is
not easy, but employee feedback puts
these restaurants alongside Facebook
as some of the country’s best
workplaces. —Alaina Lancaster

#4 IN-N-OUT BURGER #37 KIMPTON HOTELS #72 CHICK-FIL-A #85 DARDEN #96 STARBUCKS
Employees praised the
company’s benefits
& RESTAURANTS Operator Brian Davis
launched a leadership
One manager wrote
that the company’s
The company last year
vowed to hire 10,000
The recruiting tools
and opportunities Kimpton wields to win program for millennial leadership considers refugees by 2022 in
for advancement, over talent include employees called The their employees’ response to President
noting flexibility some nontraditional Jumpstart Experience. quality of life. For Trump’s executive
with scheduling, benefits for the The two-year starters, team order prohibiting
good pay and a free industry: Moms, dads program gives young members earn an refugees from certain
meal when working. and partners can earn professionals the average of $15 an hour countries. It was
CEO Lynsi Snyder up to six weeks of paid opportunity to work and are paid weekly, also one of the first
said in an interview parental leave, and as a director while according to Darden’s restaurants to offer
with Glassdoor that employees grieving receiving one-on-one career site. Staff full- and part-time
listening and spending the loss of a pet can coaching, attending benefits also include team members—and
quality time with staff take time without experiential learning health insurance, their partners—health
are reasons employees having to worry about retreats and advancing wireless phone benefits, according
value their experience covering shifts. through a leadership service discounts and to The New York
with the chain. curriculum. computer loans. Times.

F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 15
IN THE KNOW
Consumer Beat
MAKING THE MOST
OF THE MUNCHIES
As more states legalize the recre-
ational use of marijuana, a new study
suggests restaurants should target the
mellowed indulgers in those areas,
and quickly. In legalized-pot markets,
more than 40% of marijuana users
go to a McDonald’s when the munch-
ies hit, according to the report from
Green Market Report and a group
called Consumer Research Around
Cannabis (CRAC).
McDonald’s following among the
bong set is the result more of distribu-
tion than the craveability of its food,
according to the report’s collabora-
tors. “McDonald’s wins by virtue of
the sheer number of locations—by
default, really,” said Jeff Stein, VP
of CRAC. “Those competitors [who]
better [understand] cannabis users
and their consumer habits can cer-
tainly close the gap by integrating
what they learn through their mar-
keting efforts.” —Peter Romeo
PERCENTAGE OF LEGAL WEED BUYERS
WHO GO TO THE BIG CHAINS:
McDonald’s ...... 43.4%
Taco Bell ............. 18.3%
Wendy’s ............... 17.8%
Burger King ...... 17.6%
Subway................. 8.7%
16 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
Concept to Scout
TESLA REVEALS
ITS NEXT
RESTAURANT
After giving restaurants
a limited try, Tesla is
planning to push deep-
er into the business with
the opening of a retro
quick-service restaurant at one of its
Los Angeles charging stations.
The facility will include an “old-
school drive-in” and a movie screen,
founder and CEO Elon Musk said in a
series of Twitter posts in January. He
also mentioned a rock theme and roll-
er skating, but it wasn’t clear if servers
or customers would be on wheels.
At the request of someone who re-
sponded to the tweets, Musk said he
would look into having a menu auto-
matically appear on a Tesla vehicle’s
dashboard screen as soon as the car is
parked. He assured another respond-
er that popcorn would be provided to
complete the drive-in-movie feel.
Tesla has been drawn into the
restaurant business by the need to
build an infrastructure of charging
stations for its electric vehicles. The
new age service stations feature park-
ing slots where a car has to sit for a
“Gonna put an old school drive-in,
roller skates & rock restaurant at
one of the new Tesla Supercharge
locations in LA.” @elonmusk
18
considerable stretch to replenish its
batteries, with the exact time deter-
mined by the model.
At the FSTEC conference in Sep-
tember, Tesla Chief Technical Officer
JB Straubel said the car company had
realized people waiting for a charge
to be completed would welcome an
opportunity to have a cup of coffee or
something to eat. He said at the time
that Tesla would investigate partner-
ships with restaurants.
But the car company subsequently
opened two charging stations in Cal-
ifornia that featured a lounge where
Tesla drivers could buy coffee, other
beverages and sandwiches. The fa-
cility is self-serve and accessible only
by a code that appears on a Tesla’s in-
formation screen as it approaches the
station. The two are open 24 hours a
day, and feature additional amenities
such as a play area for children and a
place for dogs to be walked. They are
branded as 24H Lounges.
Musk’s tweets did not indicate
when Tesla might try its more ambi-
tious offering. —P.R.
« Stat of the Month
The number of states that
saw minimum wage increases
at the outset of 2018. There
are now 29 states that have
laws mandating pay higher
than the $7.25 federal
minimum. At the same time,
increases will go into effect in
20 sizable cities this year.

Who’s on Your Back?
THE FIRST OF
MANY ICE RAIDS
A firsthand account from the Associ-
ated Press of the immigration check
that went down in a Los Angeles
convenience store paints a dramatic
scene: Shortly before dawn, seven
immigration agents waited for cus-
tomers to file out of the store, while
telling others to wait outside while
they conducted a federal inspection.
“Within 20 minutes, they verified
that the cashier had a valid green card
and served notice on the owner to
produce hiring records in three days
that deal with employees’ immigra-
tion status,” the report says.
Meanwhile, similar incidents
were taking place at 97 other 7-Elev-
en stores across the country. Here’s
what went down on a national basis,
and what it means to restaurants.
What happened?
On Jan. 10, U.S. Immigration and
Customs Enforcement descended
on nearly 100 7-Eleven convenience
stores in 17 states to open surprise
employment audits and interview
Future View
PIZZA’S DRIVERLESS
PUSH CONTINUES
Pizza Hut is one of the partners in a
Toyota-led effort to develop self-driv-
ing delivery vehicles. The car com-
pany unveiled the e-Palette concept
vehicle at the Consumer Electronics
Show in January as part of its “mobil-
ity service business alliance” that also
includes Amazon, Uber, Mazda and
Chinese ride-sharing company Didi.
The first U.S. road tests of the
e-Palette, an autonomous bat-
workers. Agents arrested 21 people
suspected of being in the country ille-
gally during the sweep, but the action
was primarily aimed at management,
according to reports, as most or all
store franchisees were served notices
to produce hiring records.
“Businesses that hire illegal work-
ers are a pull factor for illegal immi-
gration, and we are working hard to
remove this magnet,” Thomas D.
Homan, ICE deputy director, told
AP. “ICE will continue its efforts to
tery-electric vehicle that looks like
a toaster on wheels, are at least two
years away, according to a company
press release. The car is being pitched
as not only a potential human-free
delivery vehicle for Pizza Hut, but
also as a possible mobile kitchen for
the global pizza chain.
Starting early this year, Pizza Hut
and Toyota will jointly test communi-
cation technology in pizza delivery ve-
hicles to gather data on driver patterns
and behaviors, the release says. But it’s
not the first chain to test human-free
vehicles. Domino’s last fall tested de-
livery via driverless cars outfitted with
pizza ovens as part of a partnership
with Ford. —Heather Lalley
IN THE KNOW
protect jobs for American workers by
eliminating unfair competitive ad-
vantages for companies that exploit
illegal immigration.”
Will there be more raids?
Count on it. Derek Benner, a top offi-
cial at ICE, told AP that the operation
was “the first of many” and “a harbin-
ger of what’s to come” for employers.
He said there would be more em-
ployment audits and investigations,
though there is no numerical goal.
“This is what we’re gearing up
for this year and what you’re going
to see more and more of is these
large-scale compliance inspections,
just for starters. From there, we will
look at whether these cases warrant
an administrative posture or criminal
investigation,” said Benner, acting
head of ICE’s Homeland Security
Investigations, which oversees cases
against employers.
“It’s not going to be limited to large
companies or any particular industry,
big medium and small,” he said. “It’s
going to be inclusive of everything
that we see out there.” —RB Editors
The 7-Eleven raids came one day after
President Trump met with lawmakers
from both parties to negotiate a
compromise on immigration reform.
Toyota’s e-Palette is a
couple of years away
from its first road test.
F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 17
 INSIGHTS FROM INDUSTRY INSIDERS

VOICES

RON SHAICH
FOUNDER & CHAIRMAN, PANERA BREAD

“Moving Panera forward took a

willingness to share in a dream.
And it took countless hours of
assessing, reassessing, iteration and
tough decisions. Along the way we
sold divisions and bakery-cafes, cut
G&A, and postponed initiatives to give
ourselves air cover. As well, we endured
the uncertainty of committing to long-
term initiatives in a short-term world.”
Before giving up his post as CEO on Jan. 1, Ron
Shaich penned a farewell to employees. The note,
posted on Facebook, boasted of Panera’s ability
to set trends, but also shared part of the story not
always heard: having to say no to drive success.

F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 19
VOICES
Reality Check
AN IMAGE
PROBLEM
The industry has been
hit with some bad PR—
so now it’s time to get
on the soapbox.
O
bviously, one of
r e s t a u r a t e u r s’
must-reads in
Ja n u a r y m u s t
have been that
slim self-help volume, “Charlie
Sheen’s Guide to Reputation
Management.” Little else explains
why an industry with an entrenched
standing as the galaxy’s worst place
to work would stumble into not one,
but two crises of perception.
Granted, one is a tarring by asso-
ciation. A few lizard-caliber creeps
slithered out from under their rocks
and let their reptilian brains lead
them into behavior that has no place
in unscaled civilization. These were
the men who figured their success as
businessmen and chefs entitled them
to prey on female employees, guests
and peers. There were just a few of
them, but big names like Mario Bata-
li and John Besh, who stepped down
from their companies in the face of
sexual harassment allegations, con-
firmed suspicions that restaurants
are places where sexual predators can
20 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
realize their dreams.
Truth be told, there’s reason for
those suspicions, as anyone in the
business knows. For too long, dam-
nable behavior was tolerated, or at
least overlooked. But still, the whole
business was tarnished by fewer than
a half-dozen lowlifes.
The other condemnation is a dif-
ferent matter, a result of patently mis-
understood intentions. Profess you
want to help the lowest-paid among
us raise their living standards, and
you could end up being drafted for
a congressional seat. But suggest
that a gross misallocation of wealth
in restaurants be corrected, and you
might as well read Sheen’s other
book, “5 Ways to Outrun a Mob.”
The match set to tinder was the De-
partment of Labor’s suggestion that
guests’ tips be shareable under law
with back-of-house staff members.
Restoring the legality of tip pooling
would instantly give dishwashers and
vegetable peelers a nice bump in pay.
The proposal to reinstate a prac-
tice that was legal until 2011 was
greeted like a plan to ban baseball.
The storm of outrage wasn’t triggered
by restaurants’ refusal to simply dig
into their pockets for higher back-of-
house pay—an objection that would
have been understandable, albeit
somewhat misguided. What horrified
outspoken members of the public was
the possibility restaurant proprietors
could skim money from the tip pool
before it was allocated.
Restaurateurs weren’t accused of
being greedy. They were portrayed as
crooks you should never, ever trust.
The outcry was so intense that
DOL extended the comment period
on its tip pooling proposal by another
month, or double the usual time for
citizens to air concerns about pending
rule changes. That comment period
was still underway at press time.
What hadn’t even started was a
publicity effort to defend the indus-
try’s motivations and tell another part
of the story. Unless they’ve worked
as servers, most people don’t realize
how much money a waiter can make.
Yes, it’s hard work—but someone can
pocket $50 or $65 an hour. An income
tax rate of 21% for corporations in De-
cember’s reform package was viewed
as a giveaway. The rules and realities
allow many servers to report about
PETER half that amount of their tip income
ROMEO to the IRS, and those are the scrupu-
Editor-at-Large lous ones.
PROMEO@ The reality is that guests tip based
WINSIGHTMEDIA.COM
@PETERROMEO
on their meal and experience—the
contribution of everyone in the
restaurant, from the person respon-
sible for a clean plate to whoever
washed the lettuce.
It’s only right that the gratuity
be shared. Yet that story isn’t heard,
largely because it’s not being told.
Restaurants are afraid they’ll look
like money grubbers if they ask servers
to share the wealth, instead of giving
up profits to pay back-of-house work-
ers more than the business can afford.
That’s all right. Survival is cool. It’s
why Sheen still has a career. Now’s
the time for the industry to get on
the soapbox and do some tongue-
wagging of its own. Loudly.
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VOICES

get cold food. This resistance stands

out at a time when so many compa-
nies, from McDonald’s to Cheesecake
Factory, are working on delivery—and
investors are pressuring other chains
to look into the service, in spite of the
operational costs.
Restaurants have long complained
about the services’ fees, which can
hurt profits. But the fees aren’t the only
costly consideration—some worry that
delivery cannibalizes the more profit-
able dine-in business. At the same
time, operations can be a challenge,
with some even turning off delivery
availability during peak hours.
But it’s the services’ long-term via-
The Bottom Line bility that might concern me the most.

DELIVERY IS THE
Ultimately, all of these services are go-
ing to have to make a profit. And it’s not
entirely clear that consumers in places

FUTURE … OR IS IT?
like suburban Des Moines are going to
pay the prices demanded to have food
delivered. “The whole world is not San
Francisco and New York,” Lawrence
said. “If you go to Indianapolis and
For all the hype behind delivered food, not Denver and Milwaukee and Detroit,
everybody is convinced it’s inevitable. I’m not sure they’re going to pay those

D
elivery is the future
of the restaurant
business. Consumers,
led by tech-savvy
millennials staying
at home binge-watching “Stranger
Things” on their 60-inch curved TVs, are
increasingly demanding their restaurant
food be brought to them. And third-
party delivery services are the way to
go, making the service a price of doing
business for restaurant operators.
Or is it?
To some, the business model
among third-party services may not
be sustainable enough to survive long
term. It’s a difficult service to employ,
and companies may find the eco-
nomics prove to be too challenging
to deliver nationally. “We’re pretty
agnostic,” Domino’s CFO Jeff Law-
rence said at the ICR Conference last
month. “But we think the economics
will rule the day here for aggregators
to be successful at scale.” He’s not the
only one who believes this.
“My guess is that it all fades away
and people end up doing it them-
selves,” Gene Lee, CEO of Olive Gar-
den owner Darden Restaurants, said
at ICR. Darden has been slow to add
the service. Lee, a well-known bear on
delivery, is concerned about the future
of these services as they expand and
work with Darden’s competitors.
“Nobody is a clear winner and has
built scale,” he said. “We’re going to
go slow here. We’re very concerned
about what happens with food. We’re
not pleased with how long it takes.”
He also noted that takeout is “big in
urban and heavy suburban areas, but
in a lot of suburbs where Olive Gar-
dens are, there are no people out in
Uber cars delivering food.”
Texas Roadhouse has likewise
avoided delivery, for many of the
same reasons as Darden. CEO Kent
Taylor has actively encouraged com-
petitors to deliver so their customers
kind of consumer fees. You might be
paying double to get the food product
in twice the amount of time and, oh by
the way, it’s cold,” he added. “The val-
ue proposition doesn’t work.”
Lawrence said that Domino’s
charges its franchisees 1% of sales for
orders made on its digital platform.
That’s a lot less than third-party de-
JONATHAN liverers charge—though, to be fair,
MAZE
restaurants using these aggregators
Executive Editor aren’t paying drivers’ wages.
JMAZE@ “Our platform is better than ev-
WINSIGHTMEDIA.COM
@JONATHANMAZE erybody else’s,” Lawrence said. “It’s
a Grand Canyon-size difference in
economics, and I feel that economics
will rule the day.”
Ultimately, those economic chal-
lenges could force many companies
to do delivery themselves, much like
Jimmy John’s. Already, companies
such as Panera Bread and Bloomin’
Brands, the owner of Outback Steak-
house, are doing it in-house. Darden
and Red Robin are testing self-deliv-
ery, too. But, as Lawrence said, “It’s
extraordinarily difficult. It’s not easy
to do it at scale.”

22 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
©2017 Butterball Foodservice

Turkey’s versatile. It’s delicious. And it’s fully qualified to work all over the menu. It can stand alone, or it can
stand in for other proteins. Dress it up. Dress it down. Make it crazy. Make it classic. And make it your own.

butt erballfoodservice.com

Advice Guy
WHO’S GOING TO PAY?
Should employees
cover uniform costs?
Whether it’s a shirt
or something small
like a beard net, is
it the company’s
JONATHAN responsibility to
DEUTSCH
pay for it?
Professor of
Culinary Arts Making sure employees are
and Food in proper uniform, including
Science at Drexel safety gear like hairnets and
University beard snoods, is important in
running a safe and profession-
al foodservice operation. The
Occupational Safety and Health
Administration does require
paying for certain gear consid-
ered personal protective equip-
ment (PPE) such as hard hats for
construction workers. Howev-
er, hairnets and gloves for food-
service workers are exempt from
this requirement.
Many employers provide all
uniforms and related materials.
But practices and what is allowed
by law vary widely from employ-
ees paying all costs, to employers
being allowed to deduct costs,
to employers needing to provide
everything.
At the federal level, employ-
ers are allowed to deduct uniform
expenses from wages (except for
PPE), provided the costs do not
reduce employee pay below min-
imum wage or cut into overtime.
However, many states have stricter
regulations.
My advice is that employ-
ees should have what they need
to do their jobs well—including
uniforms.
Is it OK to make
servers do the
dishes? When my
restaurant doesn’t
have a dishwasher,
the servers wash their
F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S
VOICES
own. What’s the right
course of action?
Proper protocol for bussers and
servers at the dish station varies by
operation. There are a lot of factors
that might determine the best sys-
tem for your operation, including:
● Layout. Is there enough room
for multiple people to maneuver
in the dish area?
● Staffing levels. Does having a
server take longer than necessary
at the dish station keep guests
from receiving optimal service?
● Job descriptions. Some restau-
rants have designated bussers, for
example, while others rely on serv-
ers to clear.
Sanitation is another factor to
keep in mind. Ed Sherwin, found-
er of Sherwin Food Safety in Balti-
more, says, “My recommendation
is for servers to allow dishes and
glassware to stack up, and then if
clean tableware, glasses, or eating
utensils are needed, wear dispos-
able plastic gloves when scraping
and spraying, removing the gloves
and washing hands with soap and
hot water in a handwashing sink We’re a resource
(not in a prep sink or three-com-
for articles, infographics
partment sink) before removing
clean items from the mechanical and industry insights
dish machine. Wearing disposable to help you stay on top
gloves when scraping and spraying
of the latest foodservice
©2017 Butterball Foodservice
will help protect hands from com-
ing in contact with potential bacte- trends. Dig in at
ria and viruses.” butterballfoodservice.com/
This question is a great example resource-center.
of the importance of proper staff-
ing and systems. While it may save
some money to run leaner staffing
in the dish area, the costs in terms
of risk of foodborne illness; loss of
goodwill and potential for turnover
among employees; and the nega-
tive impact on guest service, both
in terms of servers’ appearance and
satisfaction and time away from the
table, far outweigh those savings.
butterballfoodservice.com
25

BEST
BEST PRACTICES
PRACTICES
MORE THAN A NUMBER
How restaurants are driving repeat
T
business through analytics.
he word “data” might
have sterile spreadsheets
and cold, hard sales num-
bers dancing through
operators’ heads, but the
next generation of data in restaurants
looks much more personal. Ralph
Brennan Restaurant Group collects
metrics from its online reservation
platform to create a seamless guest
experience. Data-driven personaliza-
tion is a major key to guests’ percep-
tion of quality and satisfaction, says
Charlee Williamson, EVP of the New
Orleans-based group. “The bargain
made is the expectation of a better ex-
perience in exchange for the personal
data surrendered,” she says. Here’s
how restaurants are giving diners
more than they bargained for—and
getting repeat visits in return.
BUSINESS IDEAS YOU SHOULD STEAL NOW
Technology
Hospitality
Data on diner frequency, spend and
meal-period preference helps RBRG
segment and target guests. For in-
stance, a restaurant can give some
extra love, in the form of a discount
or shoutout, to a customer who made
several reservations in one month. As
for guests who have ghosted its eight
concepts, the marketing team can try
to entice them with an email deal for
their favorite special, based on past
orders.
In addition to the reservation soft-
ware, the group uses a dashboard to
identify server strengths and opportu-
nities. Managers can track which serv-
ers have a high percentage of voids
and offer extra point-of-sale training
or a lesson on how to better describe
menu items.
Premiumization
At six-unit City Winery, data helps
sommeliers cater to Platinum-level
members of its Vinofile program. The
sommelier can review guests’ order
history and recommend rare wines
stocked especially for them. “That hu-
man element is so important for how
we set ourselves apart,” says Rebecca
Spindler, City Winery’s national direc-
tor of guest services. Members seem
to think the personalization is worth
the $2,500 annual fee—City Winery
has kept every Platinum member since
the program began, Spindler says.
But it’s not just premier members
getting attention with the help of an-
alytics. Standard Vinofile members,
who pay $85 a year, get access to City
Winery’s virtual sommelier, which
recommends wines based on previ-
ous purchases. It’s the most popular
feature of the program, says Spindler.
Execute on insights
Data is so important to multiconcept
operator Levy Restaurants that it spun
off its own analytics company that
tracks transactional data and custom-
er satisfaction through digital tools,
surveys and in-person interviews.
After data showed that 70% of
food sales at American Airlines Arena
in Miami were beverages and snacks
versus cooked items, Levy added a
“captain” who helps direct custom-
ers to the correct point of sale for the
different items. Wait times at the ven-
ue’s concession stands have been cut
in half since adding the position.
“Guests expect you to be able to
customize and adjust on the fly,”
says Jaime Faulkner, CEO of the sub-
sidiary group. “Making that happen
means having a handle on your data.”
—Alaina Lancaster
“All companies that collect data on
their guests are tech companies, even
restaurants.” —Charlee Williamson
F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 27
BEST PRACTICES

Build a BetterÉ

TECH ROAD MAP

“I get emails constantly. Probably three
a day from different [tech] solutions,”
said Bareburger CTO Eric Kinniburgh at
the FSTEC conference. “It is extremely
important to actually read those emails.” Not
only are vendors smart, but now they’re also
affordable, he said.
Brian Pearson, CIO of Stacked: Food Well
Built, says he also has an eye on startups
as an indicator of what’s next. But he can’t
plug in every solution. With so many new
technologies—and needs for different
departments—a well-planned road map is the
key to long-term success. —Sara Rush Wirth
“A cobbled-together set of tools becomes a barrier to
growth and efficiency down the road. You need a codified
vision that’s driving implementation.” —Brian Pearson

1 2
SYSTEMATICALLY
ENGAGE VENDORS.
Papa John’s has a process
to engage startups and
the Silicon Valley set.
Sometimes it reaches
out directly or through
a third party, inviting
companies to either
work on a small project
together or participate
in its innovation days
or hackathons to get to
know them, says Justin
Falciola, VP of digital
solutions. Companies
are often then put in
categories based on the
type and scale of the
opportunity, he says.
MAINTAIN THE VISION.
“The end goal never
changes, but the tech we
end up using changes,”
says Anthony Mejia,
VP of technology for
Lazy Dog. He, like
Papa John’s, maintains
a multiyear strategy,
but the execution of
the plan changes. To
avoid becoming too
task-saturated, Pearson
has a forced ranking of
priorities. And to ensure
the results are effective
on his team, Kinniburgh
attaches a metric to all
innovation, using data to
inform future decisions.
3 4 5
KNOW WHO INTEGRATE SMARTER. THINK AHEAD.
TO INVOLVE. If a vendor’s API doesn’t “[The road map] needs
integrate with Stacked’s to be strategic, because
“The toughest part
system, Pearson asks, there are time and cost
of the road map is
“Do you have a way considerations, and
convincing the rest of
to give me the data not everything can be
the company,” says
whenever I want it?” done—especially all at
Jarrod East, IT director
Papa John’s has found once,” says Rob Jakoby,
for Lazy Dog. He’s
it tricky when vendors VP of IT for Firehouse
learned to reveal pieces
aren’t advanced enough Subs. Lazy Dog, for
“when the audience can
for its cloud-first example, recently
appropriately receive it
mentality or are building implemented smarter
without rejecting it for
on other platforms. video surveillance to
being too visionary.”
“You need to do due upgrade its security,
While Lazy Dog’s plan
diligence,” says Falciola. but the technology may
goes out six years, the
He wants to know how also be used for facial-
team doesn’t share more
data is cached, which recognition loyalty and
than two years out,
country it resides in and payments down the
except to a few who can
which interfaces are used road.
socialize ideas to others
to ingest and load data.
in the chain.

28 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
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 BEST PRACTICES
Line Item

THE SHIFTING
3.4%
salary threshold determining which pooling. Under the proposal, tip pool-
restaurant employees are eligible for ing would be permitted in restaurants

COST OF BEING
overtime pay when they work more that do not take a tip credit. The move
than 40 hours per week, as proposed would ideally aid the growing com-
by the Obama administration. pensation disparity between tipped

AN EMPLOYER
In December, the DOL also pro- employees and nontipped kitchen Percentage
posed rule adjustments that would workers, which in its current state that wages in
the leisure and
allow front-of-house tips to be shared is making recruitment for back-of- hospitality industry
with kitchen employees, reversing house positions a steep challenge. rose during the
the 2011 decision that prohibited tip —Peter Romeo past year1
The Trump
administration takes on
tip pooling, insurance

F
costs and overtime.

inding a champion in
today’s administration,
restaurant employers
have had reason to ap-
plaud the Department
of Labor multiple times over the past
few months. The latest: Employee
health insurance could become more
affordable for restaurants and other
small businesses under a regulatory
change proposed in January by the
U.S. Department of Labor. The mea-
sure would enable employers like
restaurateurs to band together, even Master’s Reserve® Renewal™ cut glass
across state lines, for more leverage
in negotiating rates from insurance
companies. Forming a group could
also provide the scale that enables so you can serve up
larger companies to self-insure, or
essentially form a funding pool of suf- full houses
ficient size to pay employees’ health-
Elevate your crafted creations with Master’s Reserve®
care expenses.
Small employers could come to- premium glassware. Its optical purity, sensual lines
gether on the basis of geography and enduring elegance help you pour powerful
or industry to obtain insurance for presentations that enrich your patrons’ senses.
employees. The expectation is that
existing national trade groups and It’s one more way Libbey is Serving Experience™ to
affiliations such as franchise associa- support your success and your vision by combining
tions would add coverage options for
inspired tableware, trend knowledge and expertise
members.
The proposed change—about into innovative, insights-driven tabletop solutions.
which the DOL will collect comments
Discover insights that help bring your
from the public until early March—is
just one of the recent examples of vision of success to life.
the DOL becoming more employ-
er-friendly under President Trump.
The department has also delayed
adoption of new overtime-pay regula-
tions, which would have doubled the

Bureau of Labor Statistics

1
© 2017 Libbey Inc.
 EVERY VINE
TELLS OUR
STORY
SUSTAINABILITY. QUALITY. INNOVATION.

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 CONCEPTS THAT ARE CHANGING THE GAME

CONCEPTS
Art of the Business

SLAPFISH SPINS OFF

RAW BAR
The CEO finds efficiencies in a
full-service/fast-casual combo model.
WHEN A MENCHIE’S FROZEN YOGURT SHOP closed next to
the flagship location of fast-casual chain Slapfish, founder
and CEO Andrew Gruel decided to turn the space into a
shellfish and beer bar spinoff called Raw Bar by Slapfish.
The space in Huntington Beach, Calif., didn’t have a hood,
but it had plumbing for a restaurant, making for a relatively
inexpensive flip into an adjacent oyster bar. While the
concepts will remain separate, they do have some shared
elements—kitchen, point-of-sale system and staff—and
customers will be able to see from one space to the other
via porthole-style windows. —Sara Rush Wirth
Shared menu opportunity
To encourage guests to stay, and
hopefully hit a $25 check average, diners
at Raw Bar can order from the Slapfish
menu. The chilled seafood—oysters,
smoked fish, ceviche, seafood charcuterie
and more—is only available at the oyster
bar, though, as are the 16 craft beers
(priced between $2 and $5), sake and
wine. This is made easier by the use of a
single POS system that has more than
one terminal, as well as handheld devices.

Cross-trained staffers
Gruel says labor will be more efficient,
especially during slower times, where
cooking staff can potentially man both
concepts. While Raw Bar mainly offers
cold preparations, it will utilize the
Slapfish kitchen for cooked options.
One position unique to Raw Bar: the
unofficially dubbed “oyster sommelier,”
which Gruel says is likely to be him or
his wife, initially. The room is too small
for a maitre d’, with 16 counter seats and
another 20 at booths and communal
tables, but this person can walk around
the room at busy times and explain the
oysters. “It will be a fun add-on,” he says.

New franchise option

The two restaurants are about 3,500
square feet combined, a size Gruel says
landlords are offering at a better price.
He is likely to add it as an option for
franchisees—given a 4,000-square-foot Gruel says the hope is that Slapfish
space, they can put in the fast casual will catch spillover from the smaller
alongside the oyster and beer bar. Raw Bar, where guests are likely to sit
longer (and spend more) over drinks.

F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 33
CONCEPTS
Concept Makeover
PIE FIVE BAKES UP
CHANGES TO LAUNCH
SHAREABLE PIES
Prototype unit serves as a lab
O
for systemwide rollouts.
nce a star of
the fast-casual
personal pizza
scene, Pie Five
has seen reve-
nues nosedive since the end of 2015.
But the struggling brand is noting
preliminary success with its new line
of shareable pizzas, one of several po-
tential turnaround items being tested
at the chain’s laboratory store in Pla-
no, Texas.
The prototype unit, known as Vil-
lage 121, has been the guinea pig for
all of the chain’s innovation since it
opened in August, from trialing craft
beer to wings, sandwiches and the
large-format pizzas, says Tim Breen,
vice president of franchise operations
and support. “This is the first location
we put everything into,” he says.
Once deemed ready, new offer-
ings expand beyond the lab, as seen
with the larger pizza, which rolled
out nationwide at the end of last year.
Sales have increased 8% to 10% in
units offering the 14-inch pizzas.
“And it’s growing,” Breen says. “It’s
huge.”
But the larger pizza wasn’t perfect
from its initial ideation. Employees
at the Village 121 unit first tried as-
sembling the larger pies on a second
makeline and baking them in a sep-
arate oven from the personal pizzas,
thinking those steps would boost
efficiency. But Pie Five diners like to
watch their pizzas being made, Breen
says. “We learned quickly that it lost
that guest interaction, and that guest
34 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
CONCEPT
Pie Five prototype
unit
LOCATION
Plano, Texas
FOOTPRINT
2,347 square feet
SEATING
76
KEY FEATURES
Second oven in
back of house for feel they’ve come to know Pie Five
testing, serves for,” he says. “The guest was much
beer and wine more receptive once we were making
from stand-alone
the pizza in front of them.”
bar, sells growlers
to go, uses third- With that in mind, Pie Five need-
party and in-house ed to find a way to prepare the 14-inch
delivery, offers pies as efficiently as possible. So the
happy hour, first chain developed a simple recipe for
location to offer
the larger pies: double the toppings,
expanded menu
with wings and one and a half times the dough, same
sandwiches two minutes and 30 seconds cook
time.
With every new item, Pie Five has
to factor in additional equipment,
Breen says. Before adding the 14-
inch pies, each store must undergo a
top-to-bottom cleanout and reorgani-
zation of the back of house to make
room for 48 of the larger pans, as well
as larger peels, spatulas and table
stands. Clearing out any equipment
or ingredients that aren’t absolutely
essential to the operation has been
key in giving the units enough space
for the new items. “We’re being cre-
ative with storage,” Breen says.
About 30% of the larger pizzas are
After tests at its prototype
location, Pie Five rolled out its
new 14-inch pizzas nationwide,
giving sales a boost.
ordered for off-premise, while only
around 40% of Pie Five units offer
delivery—using a mix of in-house and
third-party delivery, he says. Those
stores have added hot boxes to keep
pizzas hot for delivery.
The chain hopes to have all units
offering delivery by the end of the first
quarter of 2018. Pie Five uses online
vignettes and quizzes to train em-
ployees on proper handling of deliv-
ery orders—something they’ve been
doing for more than a year, since the
company introduced online ordering.
The prototype also features a
stand-alone bar, offering 12 craft
beers on tap, as well as wine and
growlers to go. So far, though, the bar
business has been slow, Breen says.
“We haven’t been known for beer,”
he says. “This is the first restaurant
that has a bar in it.” The prototype
is experimenting with some ways to
boost the bar program, Breen says, in-
cluding upping the bottled beer selec-
tion and increasing wine pours from 5
to 7 ounces. —Heather Lalley
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CONCEPTS
Ones to Watch
VEGGIE BURGER CONCEPTS
HOPE TO TAKE ON MCDONALD’S
Ready access to realistic meat-free burgers, coupled
with growing demand for vegetarian and vegan
options, is spurring a boomlet in plant-based burger
chains. Twenty-nine percent of consumers ages
18-34 say it’s important that restaurants offer vegan
burgers (versus 16% of those over 35), according
to Technomic. And operators are responding:
Mentions of vegetarian burgers at Top 500 chains
are up 43%, the researcher found. Still others are
building entire restaurants around the trend. Here’s
a look at some of those growing concepts. —H.L.
NEXT LEVEL BURGER
Bend, Ore.-based; 5 units
Next Level Burger launched in
Bend, Ore., in 2014, offering
traditional fast-food fare such
as indulgently topped burgers,
loaded fries and shakes—all made
without animal products. Two years
later, the chain opened in a 365 by
Whole Foods grocery store outside
Portland, Ore. Next Level Burger,
with a vibrant orange color scheme
reminiscent of Whataburger,
serves burgers made from tempeh,
produce and other ingredients,
as well as a faux meat burger. The
growing chain, which also serves
breakfast, plans to open its first East
Coast store at the end of this month
inside a 365 by Whole Foods in New
York City, continuing to grow its
footprint within the grocery chain.
36 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
EARTH BURGER
San Antonio; 1 unit
The concept announced
recently that it will open a
second operation early this year
at the Mall of America near
Minneapolis. Earth Burger’s
menu extends beyond meatless
patties to include “fish” tenders,
plant-based barbecue, faux
chicken tenders and wraps.
In nearby St. Paul, vegan
restaurant J. Selby’s—known
for its Big Mac-like Dirty Secret
burger—had to temporarily shut
down in its first week due to
overwhelming demand.
PLANT POWER
FAST FOOD
San Diego; 2 units
Financed in part by a
crowdfunding campaign, Plant
Power says it aims to appeal
to omnivores looking to try
something new just as much as,
if not more than, vegetarians and
vegans. In August, the concept
opened its second unit—in a
former Burger King. It plans to
expand outside of California and
is looking at franchising.
29
Number of units of Veggie
Grill, one of the biggest
vegan fast-casual concepts.
It plans to open its first
Chicago unit this month.
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MENU INNOVATION
Arooga’s aims to
draw meatless diners
with its mushroom-
based faux wings.
THE VEGGIE
VALUE PROPOSITION
Operators grapple with the challenges of
L
adding veg-centric entrees to the menu.
ong perceived as a mere
side dish, vegetables have
made headway in the
battle for center-of-plate
status. Yet even as some
consumers embrace more plant-for-
ward dining, veggies often still labor
under the appearance of being less
satisfying and cheaper than animal
proteins. Also, just 15% of consumers
follow even a semivegetarian diet1,
leaving operators to decide whether
it’s worth it to menu veg-centric en-
trees. So, how can chain operators
get the most value out of plant-based
meals while making sure consumers
feel that way, too?
“It’s easy to come up with a veg-
etarian or vegan dish, but then you
might only sell three a day and then
everybody’s angry it’s on the menu,”
says Matt McMillan, vice president of
1
Technomic’s Center of the Plate: Seafood & Vegetarian Consumer Trend Report, powered by Ignite
WHERE FOOD AND DRINK ARE GOING NEXT
Culinary Trends
culinary and beverage innovation for
upscale-casual Cooper’s Hawk Win-
ery & Restaurants. The Orland Park,
Ill.-based chain has evolved from of-
fering one off-menu vegetarian pasta
to featuring an entire specialty veggie
entree section with seasonal gnocchi,
a vegan ancient grain dish and roast-
ed vegetable enchiladas— a top seller.
The key for keeping the under-
performers viable, McMillan says, is
cross-utilization: “We may not sell
20 red quinoa plates a day; however,
every item on that vegan platter gets
used elsewhere.”
Cross-utilization is also essen-
tial for vegetable-heavy fast-casual
Mediterranean chain Luna Grill “to
keep perishable items moving and
rotating,” says co-founder and Chief
Cuisine Officer Maria Pourteymour.
Positioning meatless mains as multi-
purpose is another way to boost the
value proposition. Luna’s most pop-
ular veggie dish—a sampler platter
with stuffed grape leaves, hummus
and Israeli couscous salad—is listed
as an appetizer, since it works as both
a shareable and stand-alone entree.
Combating rising costs
While taste and texture are the
leading deterrents of veggie entree
consumption, Technomic finds, a
big challenge is the reigning misper-
ception that veggies are cheaper.
High-quality vegetables can cost as
much as animal products, and they’re
also time-consuming to process.
On the back end, chains such as
San Diego-based Luna combat rising
produce and labor costs by leaning
on suppliers for better pricing. And
both Cooper’s Hawk and Luna rely
on time-saving equipment to dice and
slice high volumes of fresh veggies,
versus depending solely on manpower.
Food technology can also play a
cost-savings role for operators turn-
ing to increasingly convincing, edgy
meat-analog products. Harrisburg,
Pa.-based Arooga’s Grille House &
Sports Bar partnered with a niche
manufacturer to create a mixed
59%
mushroom-based faux chicken wing.
They’re served with the chain’s 25
sauces and rubs, just like chicken.
Arooga’s says it was also the first
Percentage of full-service restaurant in Pennsylva-
consumers who
nia to roll out a plant-based burger that
eat meals without
meat at least once “bleeds.” Priced on par with its most
a week1 expensive wagyu burger ($13.99), the
26%
brand calls out in menu inserts the
environmental impact of replacing a
beef burger with the analog option.
“Vegetarians, vegans and people
Percentage of who care about the environment un-
Top 500 limited- derstand that this technology just costs
service chains more,” Arooga’s co-founder and Presi-
offering vegetarian
entrees; 28% of
dent Gary Huether says. “What’s sur-
full-service spots prised me is how many people come in
offer them1 requesting it.” —Maggie Hennessy
F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 39
 ADVERTISEMENT
3 WAYS TO BRING DINERS
IN FROM THE COLD
W hile operators everywhere are offering
innovative takes on new foods, using new
ingredients and expanding consumers’
experiences with flavor, most still offer the classics to
ensure there’s something for everyone on the menu. During
winter, when the wind blows cold and diners are looking for
something to warm them up, many choose comfort foods
to get the job done—these cheesy, toasty, saucy, often-carb-
heavy comfort foods offer stick-to-your-ribs warmth along
with their familiar, delicious flavors. For operators looking
to boost sales by offering warm, comforting foods, be sure to
keep these ideas in mind.
CONSIDER NOSTALGIA
Many foods consumers find comforting are ones that are
familiar to them from childhood or another period in their
life. According to Technomic’s 2016 Generational report, 28%
of consumers say they prefer sticking to their favorite flavors
and rarely try new ones. To satisfy those diners, offer tasty
comfort food favorites like macaroni and cheese, country-
fried steak, tuna melts, grilled cheese and tomato soup,
meatloaf and other classic dishes known for their heartiness.
Because so many of these comfort food dishes are ones that
diners had growing up, they’re likely to return to them when
they’re looking to warm up and feel cozy.
HIGHLIGHT A VARIETY OF SOUP
When trying to appeal to diners who want to warm up,
what better way to do so than by serving up hot foods like
soup? According to Technomic’s 2016 Left Side of the Menu:
Soup & Salad report, 75% of consumers say they are more
likely to purchase soup when it’s cold outside. Soup warms
diners from within, and because there are so many different
varieties of it, it’s easy for operators to offer an array of
flavors to please many diners. The leading soup ingredients
at limited-service restaurants are chicken, tomato, noodles,
cheese and broccoli, and the fastest growing are tomato
and cheese. These ingredients are all indications that when
choosing a soup, diners frequently choose ones that sound
familiar or have familiar flavors highlighted. Trying to decide
which varieties will sell best? The top five most-preferred
soups, according to Technomic, are:
• Chicken noodle
• Beef stew
• Potato
• Chili with beef
• Broccoli
DEVELOP NEW TWISTS ON
CLASSIC FAVORITES
Finally, to gain the attention of consumers who want
something comforting but aren’t looking to try something
completely new, operators should focus on updating classics.
For instance, offer grilled cheese sandwiches made with
artisanal cheese and a Sriracha-spiked tomato soup, or
chicken fingers with global-inspired dipping sauces like
gochujang barbecue sauce. Burgers can offer a twist when
topped with trending ingredients and unique cheeses, and
baked potatoes can get a twist by using Greek yogurt in place
of sour cream, or by changing the script entirely—serve up
baked sweet potatoes with an array of delectable toppings.
During the winter months when eating hearty, warm foods
is popular, operators have the chance to harness consumers’
interest by playing into diners’ nostalgic tendencies, serving
up a variety of soups, and updating comfort food classics.
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MENU INNOVATION

Ideation

LOADED BREAKFAST TO GO
The breakfast wars among QSRs rage on, so SATISFYING SNACKERS
Krystal put out an LTO that is “everything that’s Hash browns already are on
the breakfast menu, as are the
best about breakfast in one bowl,” says VP of scrambled eggs, sausage, gravy and
Marketing Alice Crowder. The Loaded Hash American cheese that complete the
bowl. No new SKUs or operational
Brown Scrambler Bowl is a heartier version of procedures were added to menu this
what’s already on the menu—meaning it’s easy item, making it an easy addition.
to execute—and the effort still drew attention Breakfast is Krystal’s strongest
and fastest-growing daypart, says
from consumers. Nearly 60% say they would Crowder, with traffic increasing in
order the bowl, ranking it among the top five midmorning as well. “Compared to
other QSRs, Krystal indexes higher
LTOs in purchase intent late last year, according for snackers,” she says, adding
to Technomic’s MenuSurf. (For more breakfast that customers are ordering the
insights, see Page 76.) —Patricia Cobe scramblers for a snack or second
breakfast. “We call this a mini
daypart.”

PACKAGED TO GO
THE LTO About 70% of Krystal’s traffic is
drive-thru, says Crowder. The
Loaded Hash Brown
Scrambler Bowl; breakfast bowl—which is really more
$3.50 the size of a large cup—is compact
and designed to fit in a car’s cup
holder. All the scramblers are sold
in these mini bowls, so the easy-
to-carry packaging was already
in-house.

SALES SPIKE
Marketing efforts tapped into
photography to target to Club
Krystal and fans on Facebook,
Twitter and Instagram. During the
LTO’s November-December run,
sales in the scramblers category rose
14%, Crowder says. Krystal plans to
bring back the hash brown bowl next
winter.

68%
CRAVEABILITY In this LTO, crispy hash brown
potatoes replace grits as the bowl base, which
makes for a heartier bowl that appeals in the
colder weather, says Crowder. She believes the
swap increases craveability.
32%
PURCHASE INTENT A third of millennials, as
well as a higher percentage of Hispanics, say
they’d likely buy the bowl. That’s not a surprise
for Crowder, who says Krystal’s customers skew
toward those demographics.

42 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8 Source: Technomic’s MenuSurf

Soba Noodle & Bok Choy
Soup with Poached Eggs

Get bowled! Bowl cuisine is all about balance — artfully blending flavor,
texture and color. This Soba Noodle & Bok Choy Bowl is finished with a silky
textured poached egg that brings all the elements together. Poach this idea
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© 2018 American Egg Board
MENU INNOVATION
EXPANDED BAR MENUS
Bulked-up drink lists cater to consumers’
T
knowledge and interests.
here may be a push
to simplify restaurant
menus, cutting back on
the number of offerings
and going back to basics
for many chains. But the same can’t
be said at the bar. Adult beverages
saw a 9% increase on menus in 2017,
more than any other part of the menu,
according to Technomic’s MenuMon-
itor. At the same time, the share of
restaurant visits in which diners con-
sume booze remains steady. So why is
that section going against the trend?
According to Ervin Machado, bev-
erage director of Big Time Restaurant
Group, it’s because consumers are
more interested in exploring new fla-
vors and expanding their awareness
of the different kinds of alcoholic bev-
erages. “Before, [consumers] were
completely fine with a vodka tonic,
but now they want to know: ‘What
different kinds of vodka are there?
What gluten-free options do we
have?’” And as consumers become
intrigued by a wider swath of offer-
44 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
Beverage Tracks
ings at the bar, operators are finding
that bigger is better when it comes to
drink menus.
Betting on tequila
The beverage menu at each of Big
Time’s six concepts has expanded in
the past couple of years, and recently,
Machado has noticed that customers
have become increasingly drawn to
tequila. In response, the West Palm
Beach, Fla.-based multiconcept op-
eration expanded its tequila offerings
and created a special category within
its tequila selection to offer nontradi-
tional flavors such as tequila infused
with jalapeno. “We created the cate-
gory to give tequila a different dimen-
sion,” he says.
After analyzing its guests’ bever-
age preferences, Quaker Steak & Lube
saw a similar trend: Consumers are
drawn to tequila-based drinks—in this
case, margaritas. “Margaritas have al-
ways been a classic choice. … It gives
the general market consumer a vein to
explore new flavors,” says Corporate
Beverage Manager Shannon Salupo.
The chain expanded its margarita se-
lection last year, which had a financial
perk, too. “Our [top-shelf] margarita
is priced very reasonably. ... How-
ever, it did not allow for a very good
margin,” Salupo says. Expanding the
category with other flavored margari-
tas, such as a desert cactus margarita,
gave guests more options, which re-
sulted in a margin increase, she says.
Local beer still booming
Alongside margaritas, Quaker Steak
& Lube has expanded its bar menu
with local brews that vary across the
47%
brand, which has been key to Quak-
er’s successful beer program, Salupo
says. “We’ve seen many capitalize on
their local intelligence.”
At City Works, a chain known for
its expansive menu of at least 90 beers
on tap, VP of Marketing Angela Zoiss
Percentage of all says the restaurant has begun placing
dine-in occasions additional focus on local offerings.
involving a drink At two of its new Texas locations,
in which beer is the chain doubled the number of lo-
consumed, higher
than any other
cal craft beers to 40. “People like to
adult beverage1 drink local,” Zoiss says. “[For 2017],
at almost all of our locations, there’s
at least one local brewery some-
where in the top five of beers sold.”
—Benita Gingerella
1
Technomic’s MenuMonitor, powered by Ignite
MENU INNOVATION
SOLVING THE SODA SLUMP
Concepts get creative in response to
F
decreased consumption.
or much of its history,
California Fish Grill had
typical soft drinks inside
its fast-casual locations: a
self-serve soda fountain,
with iced tea on the side. Yet these
beverages didn’t quite align with
the chain’s healthier branding—and
drink sales were declining. So the 21-
unit seafood concept switched to a
craft soda brand, produced by one of
the “big” soda companies. And then
something interesting happened: Peo-
ple posted about it on Yelp, helping the
chain reverse its declining soda sales.
“People started taking pictures of
our soda machine and commenting
on the uniqueness of our offerings,”
says Paul Potvin, the chain’s CFO.
“You don’t see that with Coke. No-
body’s taking a picture of a Coke ma-
chine on their Yelp reviews.”
The chain’s change in its soda tow-
er reflects a rapidly shifting dynamic
46 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
California Fish Grill
jump-started drink
Beverage Trends
in the beverage business inside of
restaurants. With consumers’ tastes
changing—per-capita soda consump-
tion has hit a 31-year low, according
to Bloomberg—chains are getting
creative with what’s on their drink
menus, no longer content with simply
offering the big, well-known brands.
Buyer’s market
The decrease in consumption is also
prompting the soda makers them-
selves to get creative. Major suppliers
such as PepsiCo and Coca-Cola have
been broadening their variety and in-
vesting in craft soda brands. They’re
also working to reduce sugar in their
drinks to address health concerns.
At the same time, soda makers
are more willing to make deals with
restaurant brands to secure the rights
to in-restaurant brand sales. “The
cola wars are truly alive and well,”
says George Hiller, a consultant who
helps restaurant chains negotiate
contracts with beverage makers.
Hiller says the decline in soda con-
sumption and the increase in demand
for other drinks, such as lemonade
or iced tea, along with soda taxes in
many markets, has created “a perfect
storm” that has created a favorable en-
vironment for companies to get what
they want from beverage makers.
Selling it
While restaurant companies can get
better deals from beverage makers,
operators should still look for creative
strategies to generate sales. McDon-
ald’s has found success over the past
sales with a craft year selling soft drinks for $1 during
soda fountain. the summer and coffee drinks for $1
in the winter. Fast-food chain A&W
last spring went back to making its
own root beer in-house—something it
had done for most of its history before
shifting to traditional bag-in-a-box
root beer in the name of efficiency.
Smaller chains, meanwhile, are
experimenting with offerings that
fit more with their brand, eschewing
the traditional soda fountain, as Cal-
ifornia Fish Grill did, or simply ex-
panding their offerings. Italian chain
Piada, for instance, offers Italian so-
das in addition to traditional drinks.
Fast casual Slim Chickens recently
added a fresh-squeezed lemonade
bar to its restaurants.
The lemonade fits more with the
chain’s Southern roots, as well as
broadens the menu. “It allowed us to
take the bag-in-a-box lemonade off
the tower and offer a greater variety
of carbonated beverages,” says Slim
Chickens CFO Seth Jensen.
31
He also says it has increased guest
interaction inside what the chain calls
its “drink shack,” where it also offers
iced tea in addition to the carbonat-
ed drinks. “People are coming in and
making their own,” Jensen says.
At this point, beverage variety is
table stakes, says Jensen. “These are
macro trends we’ve seen for decades
Per-capita soda
now. You have to have more than just
consumption hit a take-it-or-leave-it carbonated bever-
31-year low in 20161 ages.” —Jonathan Maze
Bloomberg
1
PRODUCTS

2
1

4
3

On the Market

FEBRUARY PICKS
21 2 32 42 52
Organic Chicken As between- Vollrath Forty-one Sofidel
Breakfast meal items has expanded percent of coffee has launched
Sausage Sweet continue to be its line of consumers its Dry Tech
Potato Hash popular with buffetware say they Heavy-Duty
from Hip Chick consumers, with Miramar would switch hand towels,
Farms is made Anchor Spicy Contemporary foodservice which feature
from free-range Jalapeno Serving locations for enhanced

5
chickens on all- Cheddar Utensils. The more creamer absorbency and
vegetarian diets. Corn Nuggets stainless steel variety, are constructed
The product from McCain utensils are according to with negative
is gluten-free Foodservice ergonomic and Technomic. embossing
and free of provide an ideal versatile in Diners can to eliminate
antibiotics, snack. The design. Each customize linting. The new
added nuggets feature server is marked coffee with towels are ideal
hormones, cornmeal batter on the back DanoneWave’s for cleaning
GMOs, with fire- with its capacity International glass, aluminum
preservatives roasted corn, in ounces, Delight Portion and other glossy
and fillers. diced jalapenos milliliters Control surfaces where
hipchickfarms.com and red peppers and cups. The Creamers, dust and lint
in a cheddar utensils are in flavors such as can be highly
cheese blend. NSF-certified French Vanilla visible, even
anchororiginals.com and dishwasher and Hazelnut. after cleaning.
safe. danonewaveaway sofidel.com
vollrath.com fromhome.com

48 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 Handcrafted
PER FEC T ION
 Uncommonly
V ER SAT IL E
Since 1905, our standards of quality have never wavered. Our meats and cheeses are made of only the
finest ingredients: whole-muscle beef, pork, poultry, and spices sourced from around the globe.

Discover how our higher standards can inspire your entire menu by contacting
us at 1-800-352-6277 or visiting boarsheadfoodservice.com

NO artificial colors or flavors, trans fat*, added MSG, fillers or by-products, or gluten†.

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*From partially hydrogenated oils. †All Boar’s Head meats, cheeses, spreads, and condiments are gluten free.
For exceptional service, contact us at 1-800-352-6277
or visit boarsheadfoodservice.com
 Restaurant
Directions

, 0
360 STRENGTH IN Numbers
New stores
and small
chains
forecast
to open in

JUNE 25-27
NASHVILLE
2018

POWERED BY

RESTAURANTTRENDSANDDIRECTIONS.COM
HOW
When veering from its
signature chicken, Pollo
Tropical gave its shrimp LTO a
simple, approachable name.

FAR IS
TOO
FAR?
 OPERATORS GET
CUSTOMER BUY-IN BY
BALANCING THE FUNKY
WITH THE FAMILIAR. BY PATRICIA COBE | PHOTOGRAPH BY CLINT BLOWERS

N ow that menu developers have

had time to mull over 2018
trends forecasts, how many of the
predictions are actually going to
make it to the plate? While a chef
may get pumped about playing
with moringa, activated charcoal
and spirulina—all mentioned as trending this
year—these ingredients most likely won’t show
up on many chain menus. Most mainstream
operators have to play it a little safer, weighing
innovation against risk and appealing to palates
of all ages.
Van Hanswyk, director of culinary and menu
innovation for Qdoba Mexican Eats. “We’re
always looking to push flavor boundaries …
and while we try to stay ahead of trends, we
also want to make sure we don’t go too far, to
the point where our products are no longer
approachable by our customers.” With the
trend toward simplifying and reducing the size
of chain menus, there’s also the threat of losing
regulars if you take a favorite off to introduce
a trendier dish. Van Hanswyk and other chain
operators share their challenges and the
strategies they employed for striking the right
“It’s really a delicate balancing act,” says Jeff balance of flavor innovation.

F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 55
 CHALLENGE

TOO FUNKY TURNS

GUESTS AWAY
As the home of “American” Chinese food,
Panda Express finds it challenging to intro-
duce less common flavors and ingredients
to both its guests and associates, says Jim-
my Wang, director of culinary innovation.
“We set out to create dishes that reflect
Chinese origins while also appealing to the
American palate,” Wang says. Through-
out its testing process, the chain discovers
ways to make dishes more approachable.
Its newest LTO, the 8 Treasure Chicken
Breast, for example, was inspired by a
visit to Chengdu, China, where Sichuan
peppercorn is widely used. “We knew the
profile might confuse our customers with
certain tingling sensations, so we decided
to rebuild the taste by using three different
peppers to replicate—and tone down—the
“AFTER WE SELL FLAVORS INTERNALLY TO THE
bold flavors without using the peppercorn.”
Other chains turn to safer vehicles to TEAM, WE TAKE TO SOCIAL MEDIA TO TOUT THEM,”
SAYS MATT HARDING OF PIADA’S POWER BOWL
introduce bolder flavors. At fast casual Pi-
ada Italian Street Food, for example, the
approach is a relatively obvious route: to
“give guests a flavor profile that’s bold,
wrapped around things they understand,
especially when the flavor is just coming Giving an edgy flavor a familiar name is
on the adoption cycle,” says Matt Harding, more likely to encourage trial, says David
CHALLENGE
director of culinary for the brand. “We can Groll, corporate executive chef for Pollo

CHOOSING THE RIGHT

take enormous risks with sandwiches, be- Tropical. Groll developed a spicy Szechuan
cause consumers see them as all-Amer- sauce that goes on grilled shrimp, but the

NAME AND LOOK

ican.” Recently, Harding introduced a
porchetta sandwich with pickled onions
and fennel. Servers were given talking
points to explain unfamiliar ingredients,
describing fennel’s flavor as similar to
black licorice, imparting a sweet flavor.
“Most Americans like sweetness in food,”
he says, and that won them over.
While chains no longer shy away from
heat, they often introduce a new spicy
Several operators say boosting awareness
of a new offering is a key challenge, so
strategic marketing of innovative dishes
is crucial. When Piada first launched its
Mediterranean Power Bowl, it was driz-
zled with a traditional red harissa sauce.
“The bowl looked like it was bleeding,”
chain calls the item “citrus grilled shrimp”
so as not to make it too intimidating, he
says. Groll also tends to introduce bolder
flavors through shareables and “bites” that
go for $4.99 to $5.99. “The lower price
makes these a low-risk way to get guests
more adventurous with flavor,” he says.
CHALLENGE

FINDING A LOW-RISK SPOT

flavor in an LTO to gauge response. At says Harding, so he adapted the harissa
Gordon Biersch, the more “cutting-edge” recipe with green ingredients to achieve

TO SNEAK IN NEW FLAVORS

of the concepts in the CraftWorks Restau-
rants & Breweries group, “people are
more willing to be experimental,” says
Fred Genth, corporate chef for the com-
pany’s three largest brands. Nevertheless,
when he developed a limited-time popper
cheese dip with roasted jalapenos and
beer, he decided to serve it with cornbread
to “mellow the heat” a bit, he says.
the same flavor profile in a more pleasing
color. While appearance has long influ-
enced the appeal of a dish, social media
has increased its importance, Harding
says. Enticing photos on Instagram and
Facebook are powerful tools to get cus-
tomers to try new flavors. “After we sell
flavors internally to the team, we take to
social media to tout them,” he says.
Along with shareables, several operators
rely on condiments as low-risk platforms
for flavor experimentation. Pollo Tropi-
cal’s sauce bar offers options from mild
to fiery, with most built on fruit flavors in
keeping with the tropical island theme.

56 R e s tau R a n t B u s i n e s s F e b r u a r y 2 0 1 8
 HOW DO CUSTOMERS
“But we have the opportunity to take peo-
ple where they haven’t been before,” with
different ingredients such as guava, Groll

FAVOR FLAVOR?
says. Panda Express also introduces less
common ingredients first as condiments
or add-ons to dishes. “It’s a good way to
build familiarity both in terms of flavor
and cooking technique,” says Wang. Insights from Technomic’s 2017 Flavor Consumer
Salad chain Mad Greens has 20 made- Trend Report can help restaurants develop and
from-scratch dressings on its menu, rang- menu flavors that meet consumer demand.
ing from spicy Sriracha almond vinaigrette

20% 37% 60%

to miso-sesame and blue cheese. Although
salads are paired with dressings on the
menu, customers are encouraged to mix
and match—allowing them to experiment
with unfamiliar flavors—with trained team of millennials of consumers of consumers
members offering their own recommenda- and 22% of overall are find savory
Gen Xers more likely flavors the
tions, along with spoons for sampling, says actively seek to visit a most craveable,
Lucas Clarke, the brand’s VP of marketing. out flavors to restaurant that while 58%
try on a regular offers new crave sweet
basis, while flavors. and 54% spicy

43% 54%
CHALLENGE baby boomers flavors.

50%
are less

STAFF NEEDS TO SELL IT

experimental—
23% prefer to
stick to their
Many operators spend time training serv- favorites. of 18- to

43%
ers and other front-of-house employees, 34-year-olds of Gen Zers
as well as the R&D team. Mad Greens has like dishes that are more
feature a fusion interested in
a “dressing mixologist” at each location of flavors from trying ethnic
to help guests figure out which flavors suit more than one flavors than
their tastes. “These team members go of younger type of cuisine. they were a
through an extensive 20-hour training pe- consumers are year ago. That
looking for number drops
riod, learning how to understand dressing
beverages—not as consumers
flavor profiles,” says Clarke. just food—with age: Only
But the flavor knowledge doesn’t have unique flavors. 24% of baby of all consumers prefer very spicy
to be that intense for all employees. Once boomers show flavors. That figure skews to 59%
an item is ready to launch at Piada, Hard- that interest. for millennials and 58% for men.
ing travels to each location to train the unit
chefs, who, in turn, train the line. Well-in-
formed recommendations at point of pur-
chase can convince customers to try an
on-trend flavor, Harding has found. “Ev-
erything starts with teaching and mento-
ring,” he says.

CHALLENGE

CONSISTENCY
ACROSS THE BRAND MAD GREENS HOLDS GUIDED TASTINGS
FOR STAFFERS WHO MAKE ITS DRESSINGS
Standardized recipes are the first step
toward achieving consistent flavor
chainwide, but most operators agree it’s
not enough. Hiring a willing workforce
and training their taste buds are both
TO ENSURE CONSISTENCY FROM ALL KITCHENS.
crucial. Qdoba’s Van Hanswyk works

58 R e s tau R a n t B u s i n e s s F e b r u a r y 2 0 1 8
with operations and training teams
to create manuals, video demos and
hands-on training for the chain. “Ad-
ditionally, we have a call center so our
restaurant teams can reach out with any
questions,” he says.
Getting consistency down across all
locations is Mad Greens’ No. 1 challenge,
says Clarke. The chain has units in three
states with diverse environments, which
plays havoc with flavor. “Recipes made
by spec turn out differently in the humid-
ity of Texas, the dryness of Arizona and
the high altitude in Colorado,” he says.
The recipes are the smallest part of staff
training, he adds. Guided tastings are
conducted with employees who prep the
food, teaching them about ingredients
and seasoning. They taste on the line,
learning to spot more pungent shallots or
fresher tarragon, for instance, and adjust
flavor levels. “It may be their first [food-
service] job, but they get culinary train-
ing,” says Clarke.
CHALLENGE
SECURING A
SEASONAL SUPPLY
“The big problem is seasonality,” says
Genth. “Jalapenos may be blistering
hot during one part of the year and
much milder another time.” At Gordon
Biersch, the chefs know how to adjust the
recipes, but Old Chicago (another Craft-
Works concept) is staffed with less skilled
kitchen managers who can’t season to
taste, he says. Pollo Tropical solves that
problem by developing kits for dressings,
marinades and seasonings and distribut-
ing them to all 150 locations. “The kitch-
ens just have to add water, rice, chicken,
etc.,” says Groll.
CHALLENGE
INGREDIENT COSTS VERSUS
POTENTIAL SELLABILITY
Adding a new flavor to the menu often
means adding a new SKU to inventory—and
unique ingredients may be hard to source
from the usual suppliers. Genth ran into
this problem when he wanted to use sumac
in a recipe and discovered his broadliner
couldn’t get it. A specialty supplier came
through, but it charged a lot and required a
minimum number of cases, says Genth, so
he ditched the idea.
Mad Greens encountered a similar
roadblock trying to source prickly pear
syrup for a new dressing; supply was very
limited, says Clarke. Because the vinai-
grette was destined for an LTO, the chain
just shortened its run. But many of the
chain’s salads rely on local ingredients
that are available only in a small season-
al window, and weather conditions can
hamper production. Last spring, Colora-
do peaches for the popular Alferd Packer
Salad weren’t ready to be picked when the
local goat feta cheese was ready. “We had
to balance the two ingredients by running
a five-week LTO, when usually it’s eight
to 10 weeks,” says Clarke. The shortened
time frame is still worth it for the brand;
the salad had become one of the best sell-
ers each spring.
 FLAVORS
SHAPING
MODERN
MENUS

These on-the-rise ingredients are ABOUT THE RESEARCH

RB partnered with
set to pop on the radar for trendsetters. Technomic, a Winsight
company, for this
BY LIZZY FREIER | PHOTOGRAPHY BY CLINT BLOWERS report. Technomic’s
MenuMonitor, powered
by Ignite, is an online
tool that tracks current
and past menus on an

W
ongoing quarterly basis.
e’ve been hearing the same consumer trends for more This report represents
than a year: Consumers want spicy, they gravitate toward ingredient data
tracked at emerging
authentic ethnic foods and more nonvegetarians are chains and high-
seeking out veg-centric dishes. But these big trends volume independents,
collected from July 1,
are evolving and getting more granular. So what are the breakout flavors 2017, to Sept. 30, 2017,
and ingredients that will embody the macro trends this year, driving compared to those
dates in 2016. Growth
them forward? To find out, we mined menus and gathered data through is calculated by yearly
Technomic’s MenuMonitor. The research unearthed the rapidly growing percentage change
in the number of
ingredients at emerging chains and high-volume independents—the flavors operators menuing the
consumers are likely to become increasingly familiar with and also expect specific ingredients.
to see creeping into larger chains. Forward-thinking operators might just
consider adding these ingredients to stay ahead of the trends.

62 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 FLAVORS
TO WATCH
1. Chipotle aioli
14
8 2. Gochujang
5 3. Habanero
4. Turmeric
5. Sweet chili sauce
6. Harissa
7. Tomatillo salsa
10 8. Chayote
9. Guajillo
10. Salami
1 11. Ponzu
3 6
12. Nuoc cham
13. Mache
14. Mustard greens
15. Cremini
16. Cauliflower
17. Squash
18. Corn

4 13

16

11
12

15
2

17
18

9
 NEW OUTLETS FOR SPICE

4
2
1

HOT SAUCES WITH A COOL BASE DRINKABLE HEAT SPICY-SWEET FUSION

Balancing chili peppers with cooling in-
gredients like mayo, sour cream and aioli
increases the chance that they’re going to
be accepted by the greatest demograph-
ic. Ingredients such as chipotle mayon-
naise have increased (+8.2% overall).
Operators can make these concoctions
inexpensively in-house and market them
as restaurant signatures on menus.
Spice-infused cocktails and nonalcoholic
drinks are helping differentiate beverage
programs. Fast casuals that have seen sales
slow in the past year are looking to pungent,
aromatic and numbing ingredients to spice
up mocktails. “With casual-dining sales
slumping, operators are turning to adult
beverages to get customers in the door,
particularly creative specialty cocktails
More than a third of consumers—and 43%
of younger consumers—would like more
restaurants to offer foods featuring a com-
bination of flavors. Thus, spices and spicy
condiments with sweet, smoky and herbal
notes have grown on menus, such as herb-
al-hot chimichurri (+60% overall).
5 6

SWEET CHILI HARISSA

that would be difficult for diners to re-cre-
1 2 ate at home,” says Lauren Hallow, consum-

CHIPOTLE GOCHUJANG
er insights manager for Technomic.
SAUCE Growth 150%
Zoes Kitchen
AIOLI Growth 20% 3 4 Growth 16.7%
Harissa salmon

Growth 62.5%
Jack in the Box
Crunchy chicken
HABANERO TURMERIC Miller’s Ale House
Coconut shrimp
pita with Moroccan
harissa and tzatziki
Claim Jumper banh mi with Growth 11.1% Growth 76.9% with sweet Thai chili
Wagon Master gochujang sauce
McAlister’s Deli Nekter Juice Bar
Burger with chipotle mayonnaise Strawberry habanero Turmeric Citrus
aioli
lemonade Skinny Lemonade +
Camu Camu

64 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 NEXT ITERATION OF ETHNIC

DIFFERENTIATING REGION-SPECIFIC CALLOUTS CITRUS, BEYOND THE LEMON

THROUGH CONDIMENTS
Operators are globalizing classic condi-
ments like slaw and relish to breathe new
life into stagnant recipes. Often, incorpo-
rating an ethnic ingredient will differentiate
an otherwise dull recipe. This will appeal to
the 43% of consumers (and 59% of 18- to
34-year-olds) who want restaurants to offer
more ethnic sauces, according to Technom-
ic’s Flavor Consumer Trend Report.
7 8
To promote transparency and authentic-
ity, some operators are naming the spe-
Citrus fruits are some of the most com-
mon ingredients on menus, with 73.3%
cific cities or regions from which the food of operators overall menuing some sort of
originates or is influenced by, directly on citrus, according to Technomic’s Menu-
the menu. For example, callouts such as Monitor. Operators are taking advantage
Yucatan and Oaxacan are growing, while of the popular flavor—typically in the form
mentions of Mexican are falling. Some op- of lemon or lime—by incorporating it into
erators are even building entire concepts lesser-known ethnic sauces.
around the trend, such as Rick Bayless’
Chicago restaurant Lena Brava, which is 11 12
based on Baja California cuisine.
PONZU NUOC CHAM
9 10 Growth 1.6% Growth 200%

TOMATILLO CHAYOTE GUAJILLO SALAMI Crave

Blackened tuna with
Cafe Tu Tu Tango
Vietnamese tacos

SALSA Growth 11.1%

LYFE Kitchen
Growth
Cozymels
5.6% Growth 100%
on burgers
ponzu with nuoc cham slaw
(Orlando, Fla.)
Growth 17.9% Coastal Mex Mr. Hero
Buffalo chicken wrap
Romanburger, beef
Karl Strauss with chayote slaw Baja shrimp tacos
patty topped with
Brewing Co. with guajillo sauce
grilled Genoa salami
Guajillo shrimp tacos
with roasted guajillo
chili and tomatillo
salsa

11
7
9
10

12
8

66 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 Extraordinary

Open here
For the crispy, golden-brown goodness
customers crave, always start with shredded
hashbrowns that are basically

delicious.
Order your free sample and get inspired
at baf.com/freesample

Basic American Foods is a trademark and Golden Grill® is a registered

trademark of Basic American Foods ™
 BET TER-FOR-YOU TAKES A TURN

15 18
14

17

16

13

WEEDS FOR WELLNESS MOVES AWAY FROM MEAT SWEETENERS, NATURALLY

Wild edible weeds might just be the next
kale. Dandelion (+28.6%), amaranth
(+23.1%) and sorrel (+11.4%) are among
the many weeds seeing growth on menus,
per Technomic’s MenuMonitor. Not only
are most of these inexpensive, but they
are also nutritional powerhouses that add
earthy, sometimes nutty or sweet flavors
to most dishes.
13 14
Operators are leveraging the perception
that vegetarian dishes are just as filling
as meat (which 49% of consumers agree
with, according to Technomic’s Center of
the Plate: Seafood & Vegetarian Consumer
Trend Report) to build selling stories that
drive veggie sales. The Ruin Daily, for ex-
ample, markets its cauliflower sandwich
as “spicy and satisfying” on its Facebook
page. New York City’s The Cinnamon
Snail labels its all-veggie burger “Beast-
With recent studies about the health risks
of artificial sweeteners and increasing
consumer preference for real ingredients,
many operators have turned to sweeteners
such as honey, maple and fruit. However,
operators are also using certain vegetables
(such as carrots, squash, corn, sweet pota-
toes or beets) to bring a more nourishing
sweetness to savory dishes.
17 18

MACHE MUSTARD
mode,” while LYFE Kitchen dubs its kale
Caesar “Mighty.” SQUASH CORN
Growth
in sides
12.5%
GREENS 15 16
Growth 8.3%
on sandwiches
Growth 30%
on pizzas
Roy’s
Watermelon salad
Growth 27.3%
Boiling Point
CREMINI CAULIFLOWER Pret A Manger
Fall harvest chicken
MOD Pizza
Bob pizza topped
with mache Lamb hot soup with Growth 10.8% Growth 50% flatbread with with house-roasted
on sandwiches roasted butternut corn
pickled mustard Nage
greens The Ruin Daily squash
All-natural Angus
burger, combines Buffalo cauliflower
80% beef with 20% sandwich (Chicago)
duxelle featuring
creminis and
portobellos

68 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
LEADERS

THE
ACQUIRER Multimillion-dollar franchise group
KBP Foods promises management a stake in the
business—and gets buy-in in return.
By Peter Romeo
MICHAEL
KULP
CURRENT JOB
President
and CEO, KBP
Foods

AGE
36

t age 36, Mike Kulp sits atop a
franchise empire that generated
sales of nearly $700 million from
570 restaurants in 2017. How he
got there is an illustration of how
restaurant franchising is evolving
into a business where scale and
sophistication are no longer exclusive to fran-
chisors. Yet it’s a homespun idea older than
Kulp himself that enabled his KBP Foods to
morph into an enterprise rivaling many brand
owners in size and financial might.
The story starts in the ancient days when
franchisors were OK with operating restau-
rants, and mom and pops were content with
the livelihood a handful of stores could pro-
vide. We’re talking all the way back in 2000. CHARGE
Kulp, still in his teens, was taken under The 571-restaurant
the wing of Gary Zancanelli, who’d learned franchisee of
KFC, Taco Bell,
the business from the original franchisee of Long John Silver’s
KFC, Pete Harman. Zancanelli and his son, and First Watch,
headquartered in
Gary Jr., had just purchased five wheezing Overland Park,
KFCs in Colorado. Kulp was hired away from Kan.
an Applebee’s franchise to help father and
son bring the stores back to sound health. YEARS IN
No sooner did he join the operation than RESTAURANT
an opportunity was presented to the Zan-
canellis. Another KFC franchisee wanted BUSINESS
22
out, and father and son could double the size
of their operation literally overnight. Kulp
was suddenly ringside to an acquisition and
EDUCATION
Mesa State
the challenge of assimilating distinct cul- University

70 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
 cultures into a unified $40 million opera-
tion. By 2001, he was COO of Zancanelli
Management.
The Zancanellis harkened back to a time
when franchisees were focused on opera-
tions, heads down and hands dirty from do-
ing whatever was needed to ensure success
inside a restaurant’s four walls.
“The one thing that they weren’t old
school about was how to engage restaurant
leaders on the above-store level,” says Kulp.
Besides coming up with the idea for KFC’s
bucket and slogan, “Finger lickin’ good,”
Harman had experimented with different
incentives for multistore supervisors within
what would become his 350-unit franchise,
Harman Management. Back in the 1950s,
’60s and ’70s, he hit on the idea of giving
above-store managers a piece of the business,
figuring no one would be more conscientious
and invested than an actual owner.
The Zancanellis had paid attention.
“They realized if you could engage [execu-
tives’] wallets, you could engage their heads
and hearts,’” recalls Kulp.
The idea was a game-changer for Kulp

DECADES
in two ways. First, “that really afforded me
the opportunity to buy into Zancanelli Man-
agement,” he explains. Once he became a
co-owner, “Gary [Jr.] and I worked on ev-
OF SATISFIED CUSTOMERS

BUILT
erything together. There wasn’t a strategic
discussion, a compensation discussion, an
operational discussion that I wasn’t involved
in.”
They learned how to scale an operation.
“It was the first business he and his father
had been involved in on an ownership basis,”

ONE BOX
Kulp continues. “We had to figure out how
we were going to build our own assessment
tools, to handle debt financing and the so-
phisticated side of the investment equation.”
The other benefit of Zancanelli’s frac-
tion-of-the-action incentive was the talent it AT A TIME
enabled Kulp to attract after Gary Jr. decided
“Trusted Excellence” is more than a phrase, it’s
he was ready to exit the business. Kulp found
an institutional investor, Boyne Capital Part- the foundation of what we do. Our customers
ners, to provide the money in 2010 to buy the rely on us for the quality products stocked on
company, which he renamed KBP, for Kulp their shelves, delivered on time and backed with
Boyne Partners. The name stuck, though
expert support every step of the way. It’s what
Kulp would subsequently work with a variety
of equity partners. we’ve always done…and we’re not stopping now.
At the time, though he might not have re-
alized it, Kulp was benefiting from currents
gaining force within the franchise commu-
nity. Younger generations often had little en-
thusiasm for taking over a family’s longtime
franchise and wanted to cash out. Other oper-
ators felt the pressure on margins of increased

Visit ibpTrustedExcellence.com to learn more.

F e b r u a r y 2 0 1 8 R e s tau R a n t B u s i n e s s 71
®/© 2018 Tyson Foods, Inc.
LEADERS

costs and the heightened competition of a bonuses. The company helps by matching 4 Q’S FOR
MIKE KULP
maturing market. Meanwhile, stockholders the bonuses, which are rewarded on the ba-
in big public franchisors were wondering sis of the top line (1%) and bottom line (4%)
why the companies were tying up capital by of a store’s P&L. They’re also put through an
owning and operating restaurants. Why not intensive education process, so they under-
stand the legal and financial aspects of being Was there a
unlock that money by franchising the stores?
decision you
Deals abounded, in part because fran- owners. About 36 individuals have become
worried about
chisor Yum Brands was looking to divest its partners through that route. at the time but
company-operated KFCs and Taco Bells. Only two employees who have partici- look back upon
“We went from $70 million [in sales] to pated in either track have left the company, now as a learning
$130 million, to $180 million within the first and that includes one who became COO of experience?
12 months,” Kulp recalls. another large franchise, Kulp says. The most
All told, KBP completed 23 acquisitions in influential decision
nine years, with $185 million spent in 2017 we ever made was
alone. The most recent flurry was the acqui- to give equity to the
sition of 78 restaurants in three deals late in first two people we
2017, bolstering the company’s portfolio of gave equity to.
KFC, Taco Bell, Long John Silver’s and First
Is there something
Watch franchisees. As Kulp notes, “We’ve
you can look back
done 23 deals, but probably said no to 100 on now in your
more.” career and laugh?
What he terms 100 mph growth was pos-
I used to worry
sible, Kulp says, because of the inspiration
in the eleventh
provided by the Zancanellis for setting up hour of every
an infrastructure. transaction we
The organization is flat by design, with did. Now it’s just a
three levels of supervision and a narrow matter of course.
scope of responsibility for executives. “Most
chains have someone responsible for 200 “In the first 12 months, we had already Was there a
or 300 stores in several markets,” he says. met our five-year pro forma. So that mistake that
turned into a
“We put someone in one city, and that’s all took some pressure off.” —Michael Kulp real learning
they’re responsible for—that’s it. We don’t experience?
test their elasticity by having them stretch to When KBP acquires a company, it usually
assume responsibility for another market.” keeps the management layer above the store When the
Zancanellis parted
In total, the 570-unit operation has nine level, and installs its own people in higher
ways with KBP,
VPs, two SVPs and a COO. All are in the field, supervisory levels. that was a tough
says Kulp, close to the stores in their charge. “The most influential decision we ever moment for me. I
The incentive to maximize a territory made was to give equity to the first two peo- was parting with
is the individual’s stake in the business. In ple we gave equity to,” says Kulp. “Watching my mentor. But it
one program, senior execs buy an interest what happened to those two people and their worked out great,
for around $100,000 to $400,000, with families and lives absolutely changed the and I sleep a lot
financing provided on attractive terms by way we operate.” more soundly now.
the company, if need be. “They’re someone The model will keep KBP growing at a
What’s the best
who has a very comprehensive skill set, who rapid clip, Kulp vows, and not just through advice you’ve ever
could be put into the role of a division pres- acquisitions. “We plan to open a new unit ev- gotten?
ident,” Kulp continues. “They have all the ery other Monday next year,” he says. That
It would be to
hiring discretion they need. They have all will add about another $100 million in sales,
definitely find
the accountability, with a lot of autonomy.” he figures. the smartest, best
But they also have a significant equity And the company isn’t forgoing its fran- mentors who you’d
stake in a growing company, something usu- chisee-acquisition mindset. Kulp doesn’t never think would
ally deferred for senior officers and totally rule out the possibility of buying a franchisor take time out of
missing at the regional or divisional level. or a brand as well. “The question is, ‘Can we their day to talk
A second program extends equity to find enough opportunities of scale and keep with you, because
managers who are closer to customers. If people motivated?’ If we can do that, I don’t they just might.
selected, they can work toward a partner- see the need for us to diversify. If we can’t,
ship through a vesting process, using their then we’ll do so.”

72 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8
Years of Leadership
April 15-18,
5 8 2018
JW Marriott Phoenix Desert Ridge, Phoenix, AZ
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F E B R U A R Y 2 0 1 8 R E S TAU R A N T B U S I N E S S 75
 AN INNOVATION ROAD MAP

THE BIG IDEA

Nearly half of all consumers like to
eat breakfast foods at nontraditional Percentage of diners who
times, with 32% gravitating toward strongly agree that they’d order
midmorning snacks. breakfast for delivery, if available
(44% of younger consumers).

“The lines between traditional dayparts

continue to blur due to the rise of a grazing
culture—in which more consumers snack
throughout the day—and consumers’ more
46% “Today’s consumers look for, and to some
extent expect to see, viable menu options to

28%
fast-paced and fragmented lifestyles.” suit a wider range of occasions.” —WEIKEL
—KELLY WEIKEL, DIRECTOR OF CONSUMER
INSIGHTS, TECHNOMIC

Two in five older millennials

But it goes beyond liking enjoy eating foods
breakfast later in the day—30% associated with lunch or
are purchasing breakfast outside dinner for breakfast.

BREAKFAST 40%
of morning hours more often.

The most preferred menu

BEYOND TYPICAL
Consumers
option during second
TACO BELL’S breakfast: eggs, follwed want poultry at
BREAKFAST by hash browns. breakfast; 26%

MORNING MEAL
CRUNCHWRAP
want more chicken
and 24% want
On the
more turkey. Stats
“Brunchfast”
menu, it’s a beef are even higher for
patty topped millennials.

35%
with an egg,

25%
cheese, bacon
and mayo, on a
croissant.
JACK IN THE
BOX’S BRUNCH
BURGER

Offering all-day breakfast can help Health halos matter.

drive traffic. This percentage of A quarter of diners
diners say they’d visit a restaurant will pay more for
they typically don’t frequent if breakfasts made
it were to offer breakfast foods with no artificial
beyond morning hours. ingredients. High
protein (23%) and
whole grains (18%)
also drive decisions to
Some 57% of diners
pay more.
order breakfast from
a restaurant at least
once a week, though
traffic is quick-
Healthy callouts
service heavy. Still,
that have digestion-
just 33% of Top 500
supporting properties
LSRs offer breakfast.
would get 15% of
guests paying more.

76 R E S TAU R A N T B U S I N E S S F E B R U A R Y 2 0 1 8 Source: Technomic’s 2017 Breakfast Consumer Trend Report, powered by Ignite
 We’d bet the
farm on it.
Third & Fourth Generation
Family Ownership

From left to right:

Colt Reichart, Brian Reichart,
Selita Reichart, & Beau Reichart

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 MOVE OVER
EGGS.

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© 2017 Jones Dairy Farm *All Natural except for calcium alginate casing.