Revelation #1
Cracker Barrel, a grand pappy of the family restaurant segment, plans to enter the fast-casual market. CEO Sandy Cochran didn’t divulge details in her conversation this week with investors, revealing only that the start-up of a fast-casual prototype is a top initiative. Other items high on the To Do list are rolling out a new kitchen set-up, expanding the food print of a Cracker Barrel, and selling merchandise from the restaurants’ gift shops through other channels. The kitchen introduction will begin next year, Cochran said.
The spin-off of a fast-casual format would not be Cracker Barrel’s first diversification experiment. In the mid-1990s, the company tested a take-out only concept called Corner Market. The start-up was scrapped after a relatively short time, and Cracker Barrel vowed to focus more intently on its knitting.
Revelation #2
The Champps Americana brand is slated to be executed Sunday. A bankruptcy court has ordered parent company Fox and Hounds and all franchisees of the casual chain to remove the name from building exteriors and discontinue using the identity on everything from napkins to uniforms.
Non-franchised restaurants and brand-name rights have been sold to Cerebrus Capital Management, the owner of the Albertson’s supermarket chain. The Champps concept is expected to be rechristened and restored to full operation.
Fox & Hounds, which also owned restaurants operating under that and the Bailey’s brand name, filed for bankruptcy in December.
Revelation #3
The next bun in Wendy’s ovens will likely be a cornbread, according to first-person sightings recounted this week in the blogosphere. Fashioned into the shape of a split bun, the bread holds a quarter-pound cheeseburger topped with barbecued brisket. Barbecue and cornbread—get it?
The chain is also experimenting with a second barbecued sandwich, a serving of pulled pork tucked into a brioche-style bun.
Also added this week to the list of fancy breads showing up in fast foods: The buns for Starbucks’ new fast-casual-style burgers. The company’s La Boulange chain will serve burgers on croissant-like rolls at a Los Angeles store that opens in about two weeks. The unit is the chain’s first outside of San Francisco, and is the prototype for stores being developed elsewhere in the nation.
Revelation #4
If fast food had a version of “Top Chef,” Chipotle and McDonald’s would make spirited contestants. Both boasted publicly this week that they actually cook in their kitchens, unlike the heat-and-serve fakers who abound in the chain world.
“We actually crack eggs in the restaurant and cook sausage and bacon and toast muffins and we place cheese on muffins,” McDonald’s CEO Don Thompson said of his charge’s culinary efforts. “This is a not pre-prepared deal that comes in and it’s microwaved. We haven’t spoken enough about it. So we as McDonald's need to do more of telling that quality story.”
Chipotle had a similar message for attendees of the Sanford C. Bernstein Strategic Decisions Conference in New York. “Look into the kitchen at Chipotle and you see something really revolutionary, you see cutting boards and knives, pots and pans,” said CEO Steve Ells, a graduate of the Culinary Institute of America and a former fine-dining chef. “Go into a typical fast food restaurants and you see none of those things.”
There were no reports of knife play between Thompson and Ells during the conference.
Revelation #5
The two also came close to trash-talking the rest of the industry when they explained how temporary a low paycheck can be within their organizations.
Thompson noted that McDonald’s general managers typically earn about $60,000 annually, and about half of the group push their compensation past the mean, some to $80,000 or thereabouts. About 50 percent of the chain’s GMs started as hourlies, earning the minimum wage or close to it, Thompson indicated. He added that two of the company’s top officers, USA President Jeff Stratton and COO Tim Fenton, started as crewmembers.
He didn’t provide a timeline for hourlies’ rise to higher-paying posts, but Ells did.
An employee might start at Chipotle for $8.50 an hour, he explained. Last year, 3,500 of those base-pay earners were promoted to kitchen managers, with wages hovering around $10.50. The climb typically takes 13 months, Ells said.
In another four months, a kitchen manager can be promoted to service manager, paid at the rate of $11.50. About 2,500 kitchen managers were elevated to that level last year, according to Ells.
His point: Instead of worrying about bumping hourly pay by 50 cents or a dollar an hour, efforts to improve young job holders’ economic situations should focus on providing the skills that can propel leaps in income.
“You could talk about just taking somebody from $8.50 to $9, from $9.50 to $10. Or you could teach people how to be a kitchen manager,” Ells commented. “You can teach them how to run a kitchen, you can teach them how to order food, you could teach them how to hire and lead others and then they soar [by] $10.50 an hour.”
Head-spinning bonus revelations
The throughput of Chipotle’s highest-volume restaurants is about 350 transactions per hour, Ells revealed. But the average for all stores is less than half that rate, he added … Asked if he would consider franchising Chipotle outside the United States, Ells said he would never do that to his people. One of franchising’s key objectives is pulling people into an organization who know foodservice and their local markets. Drawing outsiders, and potentially denying opportunities to crew-level hires, just doesn’t fit with the concept’s promote-from-within culture. “Franchising, I think, would be a slap in the face to them,” Ells said.
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