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Consumer Trends

3 battlefronts threatening restaurants

Not all the fights threatening trouble for restaurants are raging within the industry proper.
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Not all the fights threatening trouble for restaurants are raging within the industry proper. Yet those distant rumbles could have direct and significant impact on the business, tomorrow and long thereafter. Here are three of the struggles that could throw an elbow restaurants’ way.

  1. Cyclospora vs. health authorities

McDonald’s had to pull salads from 3,000 restaurants because the microscopic parasite had contaminated at least some of the lettuce and carrots. But that’s just a small part of what’s shaping up to be the summer of cyclospora. Before the McDonald’s outbreak, which has sickened nearly 400 people, health officials were warning that the microbe had also tainted some fruit platters sold in supermarkets.

After the McDonald’s pathogen had been traced to Fresh Express, a well-known salad packager, the warning was expanded to include packaged beef, pork, chicken and turkey salads and premade wraps. The products were made with Fresh Express lettuce and distributed by Caito Foods.

The U.S. Department of Agriculture indicated the suspect products could have been shipped to food sellers other than McDonald’s, including Trader Joe’s, Kroger and Walgreens.

Ironically, the Food and Drug Administration noted that it has implemented new methods this year of detecting cyclospora contaminations and pinpointing the origins.

  1. 7-Eleven vs. its franchisees

Conflicts between franchisees and franchisor are as old as franchising itself, but this is open warfare, and it’s been raging for more than a year now. The franchise agreements for thousands of units are set to expire in 2019 and 2020. The operators say they’d have to be suffering near-fatal Slurpee brain freeze to sign something as one-sided as the new contract offered by the franchisor

Their specific gripes could have been voiced by any unhappy restaurant franchisee: too much focus on sales instead of profits, and accusations of being bulldozed into doing what’s not best for their business.

The sniping comes more than a year after groups representing a huge swath of the franchisees called for boycotting the chain’s annual operator convention. Licensee and licensor have also sued one another.

This year, a group representing the franchisees held a meeting themed “Franchisees are the brand.”

7-Eleven's woes make the ongoing franchisee conflicts at Tim Hortons and Quiznos seem like a love fest.  But they may also serve as a preview of the battles restaurant franchisors are likely to face as refranching and asset-light development strategies concentrate more power in franchisees' hands.

  1. Immigration officials vs. New York City and California

Restaurants are grousing that they have enough labor problems without federal immigration officials raiding the kitchen to find undocumented workers. But Immigration and Customs Enforcement has shot back that it’s being forced to target jobsites in places such as New York City and California because those areas refuse to cooperate. Both jurisdictions have declared themselves sanctuaries for immigrants, which means local law enforcers won’t turn over undocumented aliens who are suspected of being hardcore criminals.

The agency declared in a recent statement, “ICE has no choice but to continue to conduct at-large arrests in local neighborhoods and at worksites, which will inevitably result in additional collateral arrests,” or apprehensions of workers who merely lack proper documentation.

Some contend that ICE is purposely targeting those areas in retaliation for the lack of cooperation. The agency issued its statement after arresting 65 people in New York City and Long Island for being in the country illegally.

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