June 2014

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Restaurant Owners Were Bullish In May

Sales turned north for most operators in May, which is the biggest reason why the National Restaurant Association's monthly performance index stood at its highest level in more than two years.

Nearly Everybody Is Raising Prices This Year

According to a new survey by the food purchasing co-op SpenDifference, 93 percent of restaurant chains plan to raise prices in the second half of the year. The reason? Rising prices for meat, notably pork, is driving up food costs.

Bob Evans Tries To Settle Its Proxy

Bob Evans offered Sandell a pair of board seats and a commitment to strongly consider proposals to spin off its packaged foods division and sell real estate. Sandell rejected that deal—and yet Bob Evans is apparently giving the activist investor those board seats, anyway.

Tully's Coffee Shops Could Lose Its Name

What's in a name? Everything. Tully's Coffee Shops, the company rescued from bankruptcy by a group that was once led by the actor Patrick Dempsey, could lose its brand name, thanks to a lawsuit filed by that name's owner, Keurig Green Mountain.

El Pollo Loco Makes A Big Comeback

El Pollo Loco is going public, a scenario that was almost impossible to imagine four years ago when the Hispanic chain was close to filing for bankruptcy. But a surge in the chain's sales has set the company up for an IPO.

Furr's Sold Quickly To Don Pablos' Owner

Chatham Capital didn't keep Furr's for long. The investment firm, which bought the company out of bankruptcy in March, has turned around and sold the company to San Antonio-based restaurant operator Food Management Partners.

Restaurant Sales Down, Especially For Private Chains

As if we needed any more evidence, another report has come out saying that first quarter restaurant industry sales were terrible. But the report, from the consulting firm Technomic, also found something else: Publicly traded chains easily outdid private concepts.

Second Set Of Franchisees Sue Papa Murphy's

Papa Murphy's, the take-and-bake pizza chain that has been dogged by questions about some of its low-volume locations, has been sued by a second group of franchisees. Those operators claim that the company doesn't work well outside of its home area in the Pacific Northwest.

Kona Grill Prices A Secondary Offering

Kona Grill today priced a secondary offering of stock at $18.50 a share, a deal that should enable the Scottsdale, Arizona-based upscale casual chain the ability to add new units. The company should raise $37 million.

Darden Has Another Tough Quarter

Spring didn't bring a whole lot of relief to Darden Restaurants and its two biggest concepts, Olive Garden and (for now) Red Lobster. The latter chain, in fact, saw traffic decline about 10 percent during the period, even though the concept is almost fully remodeled.

Franchisees And The Importance Of Buying Low

The largest restaurant franchisees in the country all operate their businesses in different ways, using a number of different strategies. But most of them have one thing in common: They didn't overpay for their businesses.

Sandell Blasts Bob Evans' Financial Delay

Bob Evans Farms this week delayed its fiscal fourth quarter financial report until July 8, citing its ongoing assessment of the impact of weakness in its financial controls. But that delay also pushed back the financials until after the record date of the chain's annual meeting, a move that didn't sit well with its activist investor, Sandell Asset Management.

Big Chains Lose Ground To The Small Guy

Why do small chains and independents appear to be outperforming their big chain rivals? Here's one explanation: customers like them more right now. According to the recent American Customer Satisfaction Index, satisfaction with big chains mostly fell, while they increased for small concepts.

The Economy: Tough On Small Franchisees

Rising minimum wages, higher food costs and discounting has tightened margins for the restaurant industry. But it's especially tough for the little guy, contributing to a trend in which the mom-and-pop franchisee is far less common.

Are Papa Murphy's Franchisees Distressed?

The Papa Murphy's Franchise Association has asked for royalty breaks for low-volume franchisees, which has intensified concern that a large percentage of the system is in trouble. But most of the chain's numbers say the system is healthy.

Deal Gives Red Lobster Little Room For Error

When Golden Gate Capital sold Red Lobster's real estate for $1.5 billion, it added rent costs to a chain with rapidly falling earnings. This will give the troubled seafood chain little room for error in the next few years.

In A Difficult Market, Restaurants Keep Hiring

Restaurants continued to add jobs in May, adding a net of 31,700 jobs last month, according to federal data and the National Restaurant Association. The job creation is the best sign that the industry is healthy, and yet traffic numbers keep falling.

Hillshire Bidding War Puts Pressure On Bob Evans

Bob Evans Farms has steadfastly resisted the idea of selling off its retail food products division—despite pressure from an activist investor. But pressure is intensifying for the company to sell the division, whose value is rising thanks to a bidding war over another company, Hillshire Brands.

How Seattle's $15 Minimum Will Affect Restaurants

Seattle's decision to raise its minimum wage to $15 an hour will have a substantial impact on the restaurant industry there. And given that labor costs will likely go up by about a third as a result, price hikes will have to follow.

Crowdfunding Generating Buzz

Restaurant Finance Monitor Editor Jonathan Maze sat down with Joe Sorge, a restaurateur and guest host of Foodable Web TV Networks’ Turn & Burn program, to talk about crowdfunding and its risks and rewards.

Cold Winter Is A Boost For Delivery

The cold winter kept people from eating out as much in the first quarter, according to the latest report from the market research firm NPD Group. But one sector of the industry did do well in the period: delivery.

Everybody Jumping On Board The Pizza Train

A major part of Sbarro's bankruptcy exit plan centers around its new, make-your-own Pizza Cucinova concept. It's one of four major restaurant chains investing big in the burgeoning market for quick-serve pizza. But what's the big draw?

The Term 'Fast Casual' Should Go Away

The term "fast casual" has become industry jargon used to describe a generation of fast-growing restaurant chains that offer quick service and higher price points. But it's a term that needs to go away. Here's why.