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The week's 5 head-spinning moments: Money & calorie tracking edition

Darden’s virtual pink slip in earnings-report form

In case you’ve just awakened from a Rip Van Winkle-scale sleep, Darden Restaurants reported a 35 percent drop in net income for the quarter ended May 25. It might as well have insulted the children of the dissident shareholders who’ve been fighting for months with management over the direction of the company. The results aren’t exactly going to muzzle the loudest and most active of the discontented.

The executives under fire can’t blame the free fall on extenuating circumstances; same-store sales and traffic dropped like a guillotine blade at Red Lobster and Olive Garden, the company’s core brands, while corporate costs spiked 7.1 percent. The culprits were management fundamentals, not some macro-force beyond their control.

Disappointed investors could offset the blow to their portfolios by dabbling in bookmaking. They just need to set the odds on whether CEO Clarence Otis will still be in his job a month from now. His departure would likely trigger a bigger shake-up; who’ll get the reins, and what will he or she do about the pending sale of Red Lobster to a private-equity firm?

The iPad as diet nag

Consumers can already use their Apple tablets to choose a restaurant, figure out how to get there, and maybe even place their orders. In yet another advance, they’ll soon be able use the touch screens to compute the weight and precise nutritional breakdown of what they’re served—and whether they should eat it.

A new gizmo called The Prep Pad is actually intended for use in home kitchens; it’s basically a portable scale that feeds info into an iPad, according to the story on TheLempertReport.com. Using the current version in a restaurant would be a stretch.

But what should have necks craning is the momentum added by the Prep Pad to a phenomenon that definitely affects restaurants. A new generation of gadgets is emerging to help consumers easily determine what on the menu they should eat to satisfy diet and health standards that have been programmed into their mobile devices. Through Apple’s new HealthKit suite of mobile apps, Siri in effect becomes a personal, always-present dietician.

Suddenly, your menu will have to satisfy a new authority.

Nuclear remedy for a bad restaurant deal

A group of investors were understandably pissed when the multi-concept restaurant company they bought in Washington, D.C., went bankrupt about 18 months later. So, according to a Wall Street Journal blog, they’ve asked the bankruptcy court if they can hire a fraud lawyer and investigate the sellers.

Among the activities they want to probe: What kind of job one of the entrepreneurial sellers did when he was retained as a consultant after the deal. Among other things, the buyers allege, he didn’t provide them with a lot of information about how the restaurants were performing. Hence their surprise when the eight-restaurant group had to seek protection from creditors—including the very consultant they’re probing.

Buyers sue sellers all the time. What’s unusual here is the leap to allegations of fraud and the retention of a fraud specialist to hunt for criminal activity. If the action proves to be a precedent, restaurateurs could find themselves in new legal waters.

A union tips its hand

As TV drama, it was a head-spinner indeed: Hourly restaurant workers struggling to survive on the wages they were paid by McDonald’s, storming the company’s headquarters to plead for a decent living. Single mothers, young people looking to pay for college, educated professionals who couldn’t find a job in their fields—what news program wouldn’t give them prominent play in covering last month’s protest? 

So where were the follow-up reports about the deep pockets that poured more money into the spectacle than many of the protestors make in a year? When the demonstrators crashed McDonald’s headquarters compass, police arrested 138 of them for trespassing. Their court hearings were held this week; only one showed up. He and all the others were fined $160 each, but didn’t have to pay a dime. Service Employees International Union picked up the whole $22,080 tab.

Turning the employer-employee table

Many restaurant operators strive to make their employees feel as if they’re the owners of the business. Zingerman’s Deli, a foodie favorite in Ann Arbor, Mich., intends to make that a reality.

Management has disclosed plans to transfer its ownership over several years to an employee cooperative, an idea that’s been tried with mixed results throughout the industry’s history. Some of the failures attributed their downfall to having too fat of a management structure; who’s in charge when everyone’s a boss-owner?

The 17 partners who currently own the company are already sharing all financial information with the staff. Zingerman’s CEO Ari Weinzweig wants to go one step further by allowing several employees to have a vote, just like the partners, in budgetary and management decisions. The company operates eight restaurants in addition to its flagship deli, with reported sales of $50 million.

Stay tuned on this one.

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