Restaurant and Food Service Blog

The pubs in Britain are serving fewer drinks than ever. Publicans say that they are pulling 1.4 million pints a day – 1.6 million fewer than at the height of the market in 1979. The decline has been blamed on closures after the smoking ban, rising costs and competition from supermarkets.

With an economic downturn as well as other rising costs, many are foregoing the typical run to the local pub and instead drinking their beer at home in front of the television.

The Campaign for Real Ale, a consumer group promoting traditional pubs, says more than 1,400 pubs made their final “last call” last year. the campaign says more than half of British villages are dry for the first time since the Norman Conquest of 1066.

With beer being such a staple in the entire country, you may wonder how this could happen. But it almost seems like a perfect storm. Rising costs, a nationwide ban on smoking, a poor economy and a new fad of hard ciders has made beer less interesting.

But maybe this is a sign that pub owners need to adapt to the times. One particular pub goer in Leeds mentioned that he was going out more now with the current ban on smoking. It has become more family friendly for him and his family to go out and enjoy a meal. With so many other of the old guard pubs going out of business and many of these being the places where many would booze and smoke until early in the next morning, we may see a new kind of British pub appear in the wake of this movement.

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Brinker Restaurant v. Superior Court of San Diego County, et al.
Case No.D049331 (Cal. Sup. Ct. 7/22/08)

The One Sentence Summary: On July 22, 2008, the California Court of Appeal issued a ruling on meal breaks and rest periods that may make it easier for California employers to comply with meal and rest break requirements. Because it is likely that the case will be appealed, however, employers should be cautious in relying on the opinion until all appeals are finally concluded, which may take several years.

What They Were Fighting About:
In Brinker Restaurant v. Superior Court of San Diego County, et al., plaintiffs brought a class action complaint against Brinker Restaurants (operator of 137 restaurants in California including Chili’s, Romano’s Macaroni Grill, and Maggiano’s Little Italy) for various alleged violations of California meal and rest break requirements. In vacating the Superior Court’s order granting class certification, the Court of Appeal made several significant rulings concerning employers’ responsibility for meal periods and rest breaks:

(1) Providing Meal and Rest Breaks: The Court held that while employers cannot “impede, discourage or dissuade employees from taking” meal periods or rest breaks, employers need only provide employees the opportunity to take meal periods and rest breaks, not ensure that employees actually take them.

(2) Scheduling Meal Breaks: The Court overturned the trial court’s conclusion that the employer was required to provide meal breaks on a “rolling” five hour schedule-that is, providing a thirty minute break for each five hours worked. Because Brinker allowed its food servers to take meal breaks in the first hour of an eight hour shift (so they could work and earn tips during the busiest part of the shift), plaintiffs had argued that Brinker was required to provide a second meal period within five hours of the first meal break. The Court held that employers need provide only one meal break for employees who work between five and ten hours during a shift, regardless of when the meal period is taken. A second meal break is only required if an employee works more than ten hours.

(3) Scheduling Rest Breaks: The Court also rejected the argument that employees need to take their rest breaks in the middle of each four hour period. The Court found that Brinker did not violate the rest break requirement by allowing employees to take their meal period in the first hour of an eight hour shift and then to take their two rest breaks later in the shift.

What Brinker May Mean to You:

If this case is not overturned on appeal (which we may not know for months or even years), then employers will have more flexibility in scheduling meal periods and will not have the burden of ensuring (and proving) that employees actually take the full meal periods provided. In addition, employers will not have to pay the one hour of premium pay to employees who take an “early lunch,” a break at the wrong time, or a break of less than 30 minutes, as long as the employer provided a meal period and the employee did not work more than ten hours total.

In light of the likelihood that this case will be appealed, many recommend that employers do not make changes to meal and rest break policies without consulting legal counsel.
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Celebrity chef-restaurateur Bobby Flay and business partner Laurence Kretchmer are moving downscale with the launch of what is expected to be the first of a chain of fast-casual burger joints. It seems as though the “better burger” segment may be the “it girl” today. With the current news on other better burgers such as Five Guys and The Habit, it seems as though every one wants some skin in the game.

But with the scare du jour, ie, salmonella, mad cow, etc, how are we so sure that this latest craze will not get snuffed out by something so random? Peter Romeo in his latest blog posting, Bugging Out, talks about how something such as the current salmonella breakout can turn into something very different once in the hands of the public perception.

But as the US economy continues to look bleak there is still a ray of hope for the restaurant industry as smaller concepts continue to grow and show that they have legs. These smaller concepts, although very risky, are probably where we are going to see the greatest grow potential in the next year.

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More than a quarter of all Americans are now obese, the latest U.S. government figures show. The percentage of U.S. adults who are obese grew by nearly 2 percent between 2005 and 2007, from just under 24 percent to 25.6 percent, the Centers for Disease Control and Prevention reported on Thursday.

This problem is getting worse here in America. With so few Americans exercising, you wonder why we seem to be running into so many overweight people. This has been an issue that the chain restaurant industry has been trying to attack with pressure from local municipalities. But in my opinion, this transcends what the government should bear. More importantly, there needs to be a public outcry for everyone to get back into shape.

I live in a very suburban area in North Carolina. When my wife and I moved here from Washington, DC, I think we gained 10 pounds because we did not walk anymore. Instead of walking to the grocery store and post office, we drove. But we made changes to our life style to get back into shape and make up for the lack of walking that we did living in a city.

Everyone’s got to find the time.

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Mr. Aoki founded the theatrical Benihana chain of steakhouses, where Japanese chefs with flashing knives double as performers. His restaurants were key to bringing Japanese restaurants and acceptance to America. His restaurants were ahead of its time. The “theatre” of cooking food in front of the guests and making them feel a part of the action was sheer brilliance. Before Aoki opened up Benihana, most of the Japanese restaurants in America were tailor towards the Japanese population. Aoki changed all of that.

This larger than life figure loved to “cheat death.” From racing on power boats and sailing in hot air ballon races, Rocky was a man who loved living life.

Aoki is a true American success story. He came to the United States from Japan when he was 19, and several years later he opened the first restaurant with $10,000 he had earned selling ice cream out of a truck. Within seven years, he had expanded his empire to 15 restaurants.

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Max & Erma’s Restaurants, Inc. (NASDAQ/Capital Market: MAXE) announced Friday the signing of a definitive agreement with G&R Acquisition, Inc. (G&R), an entity formed by Gary Reinert, Sr. of Pittsburgh, Pennsylvania. This will probably be a great move for the struggling casual dining chain. They will have more breathing room in a segment that is really taking it on the chin over the past couple of years.

The regional brand has been a stronghold in the Ohio and Indiana regions. But it hasn’t been able to break out. I love the food and the concept. We will see if this acquisition will bring more to the brand.

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The Habit Burger Grill, a 23-unit chain with a cult following and restaurant-savvy private-equity backers, is ramping up for regional growth while eyeing In-N-Out Burger’s market share and the expansion aims of several other burger brands with formidable pedigrees.

Typically when Southern Californians refer to a burger chain with a cult following, they mean Irvine, Calif.-based In-N-Out, which has grown from a single drive-thru in 1948 to 218 branches in California, Arizona, Nevada and Utah.

For its part, The Habit Burger Grill has a 35-year history in Santa Barbara, where founder Brent Reichard began working at a burger stand in 1976 at age 16 then bought it four years later with his brother Bruce.

Russ Bendel, inset, was hired away from The Cheesecake Factory in May to lead 23-unit The Habit Burger Grill as president and chief executive.
Just like In-N-Out, The Habit, as it’s called, has a simple menu based on select ingredients, including never-frozen meat and real ice cream shakes.

In August 2007, private-equity firm KarpReilly LLC, based in Greenwich, Conn., bought majority ownership of The Habit. Last month the investment firm hired Russ Bendel to head the chain, luring him away from the post he’d held for only eight months as president of The Cheesecake Factory Inc.’s restaurant division.

That was the second such hiring of Bendel by KarpReilly, which recruited him away from Outback Steakhouse eight years ago to head Mimi’s Cafe before the investment firm sold that growth chain to Bob Evans Farms Inc.

Under Bendel’s leadership as president and chief executive, The Habit is now targeting an expansion by 100 to 120 units over the next five to seven years in California, Arizona and Nevada.

However, competition is heating up in California among other burger chains with reputations for high-quality ingredients and avid customer followings.

Lorton, Va.-based Five Guys Burgers and Fries, the 286-unit chain known mostly on the East Coast but sometimes compared to In-N-Out Burger, opened its first West Coast location in Carson, Calif., in May. That branch is operated by franchisee Phil Ratner, a former president of the Marie Callender’s chain, who plans to open 30 Five Guys outlets in Los Angeles and Orange counties over the next five years.

Smashburger, a Denver-based fast-casual concept created by Quiznos founder Rich Schaden, also has its sights set on the West Coast, though it probably won’t pull the trigger on development there for a few more years, officials said. Smashburger, which boasts such hallmarks as Black Angus steak patties, hand-sliced tomatoes and butter-toasted egg buns, has four units open in Denver and another two under construction.

Also, a new concept called Best-O-Burger debuted in San Francisco in May featuring high-end mini burgers in a walk-up-stand format. Created by Stephen Weber, owner of the fine-dining restaurant Mecca there, Best-O-Burger was created as a potential growth vehicle, but company officials have yet to disclose expansion plans.

Bendel concedes that what might be called the better-burger category is very competitive, but he feels The Habit is uniquely positioned because its streamlined menu also features chicken, freshly prepared salads and sandwiches with unique ingredients, such as roast beef tri-tip and char-broiled albacore tuna steak.

The Habit’s broader menu “eliminates the veto vote,” Bendel said, noting that the variety appeals to women, unlike most burger chains that focus on young men.

Unlike In-N-Out Burger, which is known for its drive-thrus, The Habit offers only walk-up ordering. Units range in size from 900 to 2,000 square feet with patio dining. Bendel said sales are “north of ” $700 per square foot with slightly more than half of sales generated at lunch and the rest at dinner. The chain has recorded a consecutive string of same-store sales growth for the past five years, he added, noting that transactions are in the $8 range.

The Habit’s signature “double charburger” is about $3.85, in the same range as the $3.99 price of In-N-Out’s signature burger or the $4.39 charged by Five Guys.

Like In-N-Out Burger, The Habit doesn’t spend much on advertising, preferring word-of-mouth buzz. Another similarity is that The Habit’s officials have no plans to franchise the brand.

Bendel said the company would continue to fill in the markets between Sacramento, Calif., where The Habit has five units, and the Greater Los Angeles area, where the company recently opened a unit in Torrance, its eighth in Los Angeles County. There are seven branches in Ventura County and three in Santa Barbara.

However, The Habit has agreed not to open in West Los Angeles within a certain radius of an unrelated restaurant called Hamburger Habit, which was the original name of Reichard’s concept. He renamed it in 1998 after learning that the Los Angeles operator owned the trademark in the state.

So far this year, The Habit has opened four units and plans to add another two. It expects six to eight more to open in 2009. Currently the company is focusing on building up its infrastructure for growth, following the owners’ incorporation of Habit Restaurants Inc. last year.

KarpReilly principals Chris Reilly and Allan Karp recruited Bendel. They also had made him president and chief executive of Mimi’s Cafe, whose multiregional growth Bendel directed for seven years before he joined The Cheesecake Factory last September.

The private-equity partners also have investment interests in the Southwestern-theme Z’Tejas upscale-casual chain, created by concept impresario Paul Fleming, and the casual-dining Elephant Bar restaurants.

Despite his background in casual dining, Bendel was attracted to The Habit as an entrepreneurial opportunity and by the company’s commitment to growth and “great culture,” he said. However, Cheesecake Factory, with its 141-unit namesake chain and 13 Grand Lux Cafes, books more sales in four days than The Habit may see in a year, he noted.

Regardless, The Habit “has a lot of blue sky in front of it,” said Bendel, who, as chief executive, replaced Reichard, who remains chairman. Dave Nordahl, an early partner of Reichard’s, is turning over the title of president to Bendel and remaining on the Habit’s board. The partners retained a 19.9-percent ownership stake after KarpReilly’s acquisition.

The Reichard brothers also retained ownership of The Habit’s three Santa Barbara branches, which evolved from the original chili burger outlet in suburban Goleta. That was the brand’s lone unit until the mid-1990s, when Fleming—creator of P.F. Chang’s China Bistro and Fleming’s Prime Steak-house & Wine Bar, among other concepts—was an initial backer of The Habit’s expansion, along with Jim Magglos, founder of the Baja Fresh Mexican Grill chain.

The Habit’s original restaurant, with outdoor seating only and fresh flowers adorning its ordering counter, will do close to $1.5 million in sales this year, Reichard said. He added that Bendel’s agreement to join the chain “really validates the concept” and its growth prospects. “I think it could be at least as big as In-N-Out Burger.”

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Austin-based Fired Up Inc. is going global, with a new licensing agreement to expand its Carino’s Italian Grill concept in the Persian Gulf region, Africa and parts of Asia.

Norman Abdallah, a co-founder of Fired Up, will move to Cairo to become senior vice chairman and president of the licensee, the Amer Group. What this shows is that the US economy is NOT the place to be for American concepts and future development. The real places to be are going to be Africa, Eastern Europe and Southeast Asia.

We have already seen 600 Starbucks being closed and there will probably be more to close soon enough. The Big Green Coffee giant has already stated that Asia is their prime market right now for development.

This global push comes right as the Olympics are about to start in China and is a real wake up call for the United States that we do not live in a US centric world anymore.

Some of the bigger concerns here will probably lead to sustainability and high standards of crop/agriculture growing techniques. The US is already mired in a tomato/jalapeno/cilantro/salmonella mess. Can you imagine what the food production landscape will look like in the near future?

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One coffee drinker’s bad news is another coffee drinker’s good news, it seems.

Financial woes at Starbucks Corp., which is planning to close 600 underperforming U.S. stores, is evoking glee and little sympathy from aficionados who say they resent the coffee shop giant and favor small independent cafes.

“I’m so happy. I’m so not a Starbucks person,” said Melinda Vigliotti, sipping iced coffee at the Irving Farm Coffee House in New York. “I believe in supporting small businesses. Starbucks, bye-bye.”

“Amen,” chimed in Keith DiLauro, a local caterer. “They went too big, too fast.”

Seattle-based Starbucks burst onto the national scene in the 1990s and grew to more than 6,000 locations around the world. But with cups of coffee that can cost several dollars, it faces a slowing economy and slowed consumer spending.

“Starbucks has really created a coffee culture, raising awareness of good coffee, which is good for independents,” said Carol Watson, owner of the Milk and Honey coffee shop in Chicago. “But on the other hand, they’re on practically every corner, and that makes it tough on the little guy too.”

In Birmingham, Alabama, retiree Peggy Bonfield, drinking coffee at the Crestwood Coffee Shop, said: “When a Starbucks closes, it makes room for a local business to start.

The schadenfreude of coffee drinkers drawing satisfaction from another’s misfortune is part of the popular culture that enjoys the downfall of companies or celebrities, said Jim Carroll, a Canadian-based trends and innovation expert.

“There are a lot of people out there who take delight in seeing an icon torn down by the masses,” he said.

Starbucks fell victim to a rapid change in attitude, fueled by Internet bloggers complaining endlessly about everything from layoffs to its breakfast sandwiches, he said.

“Starbucks was a cool brand, and then all of a sudden it’s not a cool brand,” he said. “There’s this new global consciousness that is out there that can suddenly shift.”

CAFE CULTURE

Indeed, said Pye Parson, who hails from Seattle and works at Birmingham’s Crestwood, “Once it went corporate, it wasn’t Starbucks anymore.”

New York Web designer Zachary Thacher, who favors Greenwich Village’s cafes, said he avoids Starbucks. “They’ve commoditized cafe culture, which is why I don’t go,” he said.

The environmental movement toward buying and appreciating locally grown products has helped neighborhood cafes and hurt the myriad look-a-like Starbucks stores, said Judy Ramberg, a consumer strategist at Iconoculture, a Minneapolis-based trend research company.

The company that began as innovative is now known for consistency and convenience, she said. “To me, that’s a huge step down,” she said. “You’ve built your franchise on people who are coming in because they know exactly what they want.”
Precisely, said Justin Sergi, explaining why he preferred Lux, a cafe in Phoenix serving lattes with a fern-like pattern teased from steamed milk in ceramic cups, over Starbucks.

“The people that work there are very pleasant, but the stores are devoid of any kind of real charm or personality,” he said. “They push a button, and a machine does everything from grinding the beans to brewing the drink.”

It’s not as though Starbucks doesn’t have defenders,

“It’s convenient,” said Anthony Castro, sitting in a Starbucks near his job at New York’s Museum of Modern Art. “I know what to expect.”

In Birmingham, Crestwood regular Gary Adkins said he felt Starbucks gave employees good salaries and benefits. But now Starbucks’ plans call for cutting up to 12,000 full- and part-time positions.

Not everyone felt strongly. “It’s just coffee,” said Marc Poulin, a systems administrator at Zibetto Espresso Bar in New York. “If I was an investor, I’d care.”


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Starbucks Corp. has announced it’s closing 600 underperforming stores in the United States.

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