Fast food

by David Klemt David Klemt No Comments

Tips from Tipps on Cool Concepts

Tips from Tipps on Building a Cool Concept

by David Klemt

Mama Foo Foo Daytona bar and DJ booth

It’s true that “cool” is difficult to define, and yet as amorphous a concept as it can be, we can create a vibe that embodies this important design element.

Some people have an innate understanding of the cool factor. They can identify it, design for it, and reënvision it. However, even these people can’t always explain the concept of cool.

To repurpose a 1964 quote from Supreme Court Justice Potter Stewart, “I know it when I see it.” And to paraphrase that quote, many of us would say we know cool “when we experience it.”

Of course, I can say that the KRG Hospitality team knows cool and develops concepts around this nebulous design concept. But that wouldn’t be cool; if you call yourself cool, you’re not. It’s sort of like attempting to give yourself a nickname—it really doesn’t work. (When I was in the Air Force I witnessed what happened to a few brand-new F16 trainees who tried to give themselves their own call signs. The results? Yikes.)

So, I’m going to share some helpful thoughts on this topic from a friend of KRG. Invictus Hospitality co-founder Michael Tipps, who knows cool when he sees and feels it.

Importantly, he and his team can also design for it. During the 2023 Bar & Restaurant Expo in Las Vegas last month he shared his thoughts on this idea to a room full of operators and leadership team members.

To check out some of the cool concepts in the Invictus portfolio, click here. For the KRG portfolio gallery, follow this link.

So, You Wanna be Cool…

With very few exceptions, most people thinking about their dream restaurant, bar, nightclub, eatertainment concept, or hotel don’t want to embody the antithesis of cool. In fact, I’ll say that if someone does design an “uncool” concept purposely and does so successfully…it’s cool.

That said, here’s an important tip from Tipps on developing a cool concept: “If your bar or restaurant is epic, it will attract everyone.”

However, that doesn’t mean designing a place that attempts to make everyone happy. Instead, consider your target guests—groups of people you and your partners understand, ideally—and design for them.

Nailing your concept for your target guests will attract other groups. And before anyone says that sounds exclusionary, that’s not what Tipps or I are talking about. Listen to anyone from the KRG Hospitality and Invictus Hospitality teams speak and you’ll know making any guest feel unwelcome isn’t on the menu.

Instead, consider the longstanding maxim that you can’t please everyone. Hence, focusing on your target guests to pull the threads tighter during the concept development phase.

Another key consideration when trying to nail down the cool factor? Differentiation.

“If everyone is used to westerns, somebody wants an action movie,” says Tipps. In other words, in a market saturated by one or two types of concepts, there are people dying for something different.

So, develop your dream concept with the idea of delivering something different in mind.

Stay True

This isn’t exactly a hot take but at the end of the day, all restaurants serve food. All bars serve drinks. All hotels provide rooms.

In other words, people can go anywhere for at least decent food and drink, and a place to sleep. The differentiators that separate one concept from another are atmosphere, service, and culture. Those three elements (along with some others) define a particular brand.

When your dream concept is on paper and you’re ready to make it a brick-and-mortar reality, you must stay true to it. Using the KRG process as an example, our feasibility studies, concept development plans, and business plans combine to form our Roadmap to Success. This is a document hundreds of pages long that’s unique to every client and concept we develop.

Once that deliverable is in your hand, it’s crucial to stay true. Or, as Tipps said at BRE in March, “You have to remain steadfast and focused on your concept.”

Designing a cool concept can take you into deep, uncharted waters in your chosen market. The voice telling you that you need to rein things in can be a loud, nagging one. Learn to quiet that panicking voice.

It can be daunting to design something you think is cool. You may find yourself asking if anyone would even want this “cool” concept.

Well, an unfiltered Tipps suggests you consider your answer to the following question: “How do people know what they want if they haven’t fucking seen it?”

You can build the next Applebee’s, Chili’s or Fridays. Or you can build something unique that will set a new standard in a market. And that’s not a knock against those chain restaurants—they’re successful on a global scale. But if you don’t want to operate an Applebee’s, don’t design yourself one.

A Word on Rebranding

Owing to the pandemic, rebrands are, as Tipps says, ubiquitous. This makes sense as people’s perspectives are different now. Operators want to finally own their dream concept. Hospitality pros want to work for brands that share their values, and that they deem cool. Guests want to spend their time and money on brands with which they identify (and also deem cool).

“If somebody wants to rebrand, they probably should,” says Tipps.

According to Tipps, however, “a lot of people confuse a rebrand with a refresh.”

While new tables, chairs, and paint can feel like a huge change, that’s not a rebrand. While many guests appreciate a refresh, their relationship with the brand won’t change much.

So, if an operator doesn’t plan and execute a full rebrand carefully, Tipps says they need to temper their expectations for a measurable ROI.

Now, if you have ideas for a cool rebrand, planning is crucial. But that doesn’t just relate to knowing what you want. You need to have your new name, logo, colors, menus, and exterior and interior designs finalized, of course.

However, you need to plan for how long the rebrand will take. As an example, when Invictus last rebranded their own concept they planned for two months to prepare to shut down for a full week.

Your cool new concept and its cool new details? They cost money and, as importantly, they take time. Which, as we all know in this business, costs even more money when you’re shut down.

Now’s the time to move forward with your cool new concept. Don’t hesitate to take your first step toward owning the cool brand you’ve always really wanted. While you’re dreaming about your concept, someone else in your market is making theirs a reality.

Image courtesy of Invictus Hospitality

KRG Hospitality brand identity. Restaurant. Bar. Cafe. Lounge, Hotel. Resort.

by David Klemt David Klemt No Comments

Empower Your Team to Make Decisions

Do You Empower Your Team to Make Decisions?

by Kim Richardson

Chess pieces on chess board in grayscale

Empowerment is about so much more than trusting someone to follow clearly defined rules; you must learn to trust your team’s judgement.

Yes, even when things don’t go according to plan. If you’re only training your team on the “rules,” you’re doing a disservice to them and yourself. So, let’s have a little chat about empowerment. What does it mean to you? What are your expectations of your team when you tell them they are empowered?

Looking back throughout your own work history, have you ever had a job where your boss told you that you were empowered to make decisions, but you didn’t actually know what to do or how to make decisions? Did anyone ever explain “the how” of decision making to you?

Now, look at yourself as a leader. Have you ever had employees that you’ve told are empowered to make decisions, yet they get a manager every time someone needs something out of the ordinary? Are you explaining to your staff “the how” of decision making, along with your expectations?

It’s frustrating to feel like the house might fall down when you’re not in it. That’s no way to operate a business. We all want our staff to be able to make educated decisions when we’re not around. We shouldn’t have to hold their hands and be part of every single decision.

Still, there are times when, left to their own devices, a team member doesn’t make the decision you’d want them to make. This makes owners and leadership team members feel as though they must be at work every second.

So, how do you move away from micromanagement and learn to trust your team’s decision making?

Leverage Teachable Moments

You’ll never be able to give an example of every possible situation that may arise. Therefore, you’ll never be able to train your team on everything that they’ll encounter on any shift.

How do you tell someone how to handle situations when you’re not around? You don’t, and I don’t suggest you even try. Instead, you need to instill a sense of empowerment in your team.

However, “empowerment” is just a word if you’re not educating your team. You need to teach staff how to make good decisions. And how do you even start to do that? Cash in on all the teachable moments that happen throughout the day!

Once upon a time we were all new to this industry. I’m sure you have a few stories of some mistakes you’ve made along the way. I know I certainly do.

Think back to those situations. Did someone explain to you why you made a mistake? More importantly, did they then help you understand what to do next time? Or did they just get mad and make you feel like a failure?

I’ve had the privilege of working with some amazing people over the years. There are several people that really put effort into teaching me. The different things they taught me helped me to understand the ins and outs of decision making, even in situations I know very little about.

Example 1: The Restaurant

For my first job ever, I was a hostess at an Italian restaurant and pizzeria. During the training process I was told to rotate sections when seating tables. That’s easy enough, right? Well…maybe not.

Sometimes I’d see exceptions to this rule. The same section would get sat twice in a row, for example. I watched exceptions to “the rule” get made with no clue as to why.

One day, I sat the same section twice in a row. I don’t remember why, but I do remember the server’s reaction.

Right after seating the second party in the server’s section she let me know how annoyed she was by my decision. Now, I knew I messed up immediately—she let me know. But I didn’t know why it wasn’t okay that I had double-sat her this time.

All I knew is there was a rule I was expected to follow…unless I wasn’t supposed to follow it. Sometimes it was okay to disregard the rule, sometimes not. The rule wasn’t clarified before I began my role as a hostess, it wasn’t explained during training, and it wasn’t explained in the moment I “broke” the rule.

At some point it was explained to me that there were several factors that influenced the “double-seating rule.” For instance, you might skip a section in the rotation if they were just sat a big party. You might double-seat someone if they were regulars, family or friends and the server was able to accommodate an additional table. Of course, there were several other factors that could come into play.

The biggest issue is that none of that was explained to me during training. Moreover, I was left to figure out the nuances of seating on my own.

Example 2: The Hotel Sales Office

I worked at a hotel in the sales office for my first job out of college handling group room blocks.

The contracts I sent out to clients had cutoff dates 30 days prior to the event. Again, sounds pretty simple, doesn’t it?

One day a bride emailed me asking if she could extend the cutoff date. The cutoff date fell on a holiday weekend and she was concerned that people might not have time to book their rooms. I wrote her back and very politely told her no. So she reached out to my boss, Jill, who told her yes.

And then I got called into Jill’s office.

I remember that conversation like it was yesterday. Jill was very nice about the situation and explained that it was okay to make exceptions for people sometimes. Sometime later, I extended a cutoff date for another group. Should be an acceptable exception, right?

Nope. I got my hand slapped on that one. There was a citywide event going on over those dates. The hotel was fully sold out and turning away business. In this circumstance, it was actually a huge problem to extend the cutoff date.

Great—here we go again with a rule that exists in a gray area, and no one explained its nuances. As it turns out, there are factors that go into extending a cutoff date, such as how many rooms the group has already picked up; how busy the hotel is over the dates of their room block; and the relationship you have with the client.

I don’t know if anyone ever flat out explained these gray areas to me. Instead, I was left to figure out the nuances through trial and error.

Example 3: The Dish Tub Incident

At that same hotel several years later I started handling banquet events. One day, a client told me their registration desk needed dish tubs lined with cloth napkins. I threw it on the banquet event order.

Well, I happened to work at a Five Diamond hotel. Dish tubs with napkins sitting out in view of the public? That’s not how we did things. Enter: Bruce the Banquet Manager.

No detail, however small, escaped Bruce. Referring to the dish tubs and napkins, Bruce asked me why they were necessary. I actually had no idea what the client wanted with the tubs and napkins. So, I reached out to the client.

Turns out all she needed was a way to store welcome packets for event attendees. These days, we just put up a QR code and call it good. Once I let Bruce know what the containers were actually for, he understood. However, we weren’t about to load unsightly dish tubs with welcome packets. Instead, we found something more aesthetically pleasing and in line with our level of service.

I spoke about the Dish Tub Incident with Jill. To her credit, she helped me understand that people who are planning meetings so frequently are sending standard specs. Sometimes there would be a request on a BEO that wouldn’t make sense for the venue. Crucially, she taught me that if I ever saw something that didn’t make sense I needed to ask questions.

Truthfully, I don’t remember if it was that conversation or another but Jill taught me one of the best lessons: Ask the client what goal they’re trying to achieve. By understanding their goals we could provide solutions that made sense for us and honored their wishes. Additionally, we’d deliver the excellent service they had come to expect.

Example 4: The Hotel Cafeteria

Let’s take a little break from talking about my mistakes and talk about somebody else’s.

Many years later, I was working at another hotel. One day, I went to the cafeteria and the fruit bowls had Asian pears in them. I love Asian pears, so I was really excited about those bowls.

Now, those particular pears were probably a day away from being spoiled. I went to the cafeteria the next week and there were the Asian pears again! This time, they were perfectly fresh, crisp pears.

Well, I certainly enjoyed that. You want to know who didn’t enjoy that? The executive chef!

As it turns out, Chef sent the pears that were about to go bad to the cafeteria because they were leftovers from something else. He didn’t want them to go to waste. But the fresh, crisp pears that were out the following week? Those were a different story.

There was a kitchen team member who saw the Asian pears go down the week before. When he was setting up the cafeteria the following week he threw some in the fruit bowl. No one had told him that Asian pears are expensive. Also, no one had told him the pears were just going down to the cafeteria because they were close to spoiling. They’re not typically the type of thing set out in the employee cafeteria.

While I would never expect Chef to stop and explain every single decision he’s making, it’s the perfect example of seeing one of your superiors doing something and thinking you’re supposed to do the same.

Leaders Teach

When I look back on some of the mistakes I made, they seem pretty obvious with many years of hindsight.

The solutions to unexpected situations are common knowledge to me now. If you also have some years in this industry, they’re likely common knowledge to you.

And that’s my point.

I was young. I was inexperienced. People didn’t always tell me the things they had learned that were common knowledge to them. So, they also didn’t share their expectations with me.

I can only assume that you have people on your team that are young and inexperienced. As seasoned hospitality professionals, we all make decisions every day that can be teaching moments. These moments are part of the learning experience. Using them to shape your team will help your business run better.

Have you implemented an onboarding process? Do you have a detailed employee manual? Do you have actual systems in place? If so, great—you’re ahead of the curve.

But do you think that you’re training new and existing employees on every situation that will ever pop up during their shifts? Really, that’s impossible. Instead, be on the lookout for teachable moments. Put people on your leadership and empower them to do the same.

In turn, they’ll help empower your staff to make the “right” decisions for your business. And importantly, they’ll feel empowered to learn from mistakes so they don’t repeat them. Over time, and it won’t take long, you and your leadership team will be able to step away and work on other parts of the business. In fact, you’ll find that you can step away from the business from time to time.

People are going to make mistakes. That includes you. Don’t let these teachable opportunities go to waste.

Image: Hassan Pasha on Unsplash

KRG Hospitality. Boutique Hotels. Resorts. Properties. Consultant. Feasibility Study. Business Plan

by David Klemt David Klemt No Comments

Alternatives to ServSafe

Just.Safe.Food. and More Alternatives to ServSafe

by David Klemt

Server carrying two plates with one hand

ServSafe, the National Restaurant Association‘s food safety training program, isn’t the only food handler training game in town.

Certainly, the program is the most well known in our industry. However, it’s fair to say that ServSafe is closer to infamous than just ubiquitous due to a New York Times article from January.

While it’s the most recognizable of the food safety programs, it’s not the only one. Although, ServSafe’s omnipresence likely gives many the impression that it’s ServSafe or nothing.

There are, however, alternatives to ServSafe. In fact, one challenger was announced a day after the explosive New York Times article that thrust ServSafe into a spotlight the NRA probably isn’t enjoying. (After all, one result of that article was a letter from six US senators demanding answers from the NRA about ServSafe by March 3.)

At any rate, the newest alternative to ServSafe comes from One Fair Wage. The program is Just.Safe.Food. and costs just $10. (As a reminder, ServSafe costs $15.)

For that $10, Just.Safe.Food. gives an individual three attempts to pass their exam and unlimited access to training materials. Additionally, One Fair Wage (OFW) says profits they raise from the program will go toward advocating for restaurant workers.

OFW, as many in the industry know, is owned and operated by restaurant workers. Two cornerstones of the organization’s mission are increasing the minimum wage, and ending the tip credit. OFW is also attempting to convince lawmakers to stop accepting donations from the NRA.

Basically, OFW and the NRA are—and it appears always have been—at odds with with one another.

Other ServSafe Alternatives

Before I list a few other alternatives, let me be clear: KRG Hospitality isn’t advocating for any food safety training program in particular. Operators and their team members will need to decide which program is best for them.

Whether that decision is based on employer requirements, state or local requirements, cost, ideology, or another reason makes no difference to us.

However, I will say that the more competent and comprehensive options there are, the better. Nobody should have a monopoly on food safety.

The key factor to consider is whether the particular state or county regulations are met by the program. If anyone is uncertain, they should reach out to their local health department before proceeding with any program. It’s likely the department only accepts food safety programs that are ANSI-certified.

That said, some alternatives to ServSafe are:

Operators and food-handler restaurant workers can also search for local programs that are accepted by their state/county.

Food Handler Requirements

Food safety isn’t, it turns out, universal throughout the US. Workers can be subject to state or county requirements. In some states, food handler certification is voluntary.

And then there are food safety manager regulations to consider, and those can also be state- or county-specific.

I can’t reiterate enough how important it is to know your state/county/local food handler requirements. As with many regulations, there are nuances and hospitality professionals need to know them.

Below, how different *states regulate food handler training.

State Requirements

  • Alabama
  • Alaska
  • California
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • North Carolina
  • Ohio
  • Oregon
  • South Carolina
  • Texas
  • Utah
  • Washington

County Requirements

  • Alabama
  • Arizona
  • Kansas
  • Kentucky
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Oklahoma
  • Virginia
  • West Virginia

Voluntary

  • Arkansas
  • Colorado
  • Connecticut
  • Delaware
  • Idaho
  • Indiana
  • Iowa
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • New Hampshire
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • South Dakota
  • Tennessee
  • Wyoming

*This information is believed accurate at the time of publication. No warranty of accuracy is given.

Image: Pixabay on Pexels

by David Klemt David Klemt No Comments

FAST Act Dealt Knockdown Blow

FAST Act Dealt Knockdown Blow

by David Klemt

Boxer being knocked back by punch

A bill we think is one to watch, California’s Fast Food Accountability and Standards Recovery Act, may be on the ropes already.

Assembly Bill 257, known as the FAST Act, is “on hold” until 2024. So, while the Save Local Restaurants coalition and voters have yet to kill the bill, it may be out on its feet.

We reported two months ago that fast food chains were moving quickly to kill the FAST Act. It appears that the initial attack on AB-257 was successful.

That is, the chains and coalition got what they want: the ballot initiative vote has knocked down AB-257.

For those unfamiliar with the Save Local Restaurants Coalition, the following organizations are members: The National Restaurant Association (NRA), US Chamber of Commerce (USCC), and International Franchise Association (IFA). Further, fast-casual and QSR chain coalition members—including Starbucks, In N Out, McDonald’s, and Chipotle—threw nearly $13 million at the ballot measure that halted FAST.

What’s FAST?

To read AB-257, the FAST Act, in its entirety, click here.

In summary, FAST:

FAST does the following:

  • establishes the Fast Food Council, ten members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee. The council will operate until January 1, 2029;
  • defines “the characteristics of a fast food restaurant“;
  • gives the Fast Food Council the authority to set “minimum fast food restaurant employment standards, including standards on wages, working conditions, and training“;
  • provides the council the power to “issue, amend, and repeal any other rules and regulations, as necessary”; and
  • allows the formation of a Local Fast Food Council by a county, or a city that has a population of more than 200,000.

Voters effectively stopped California from implementing FAST until November 2024 at the earliest. (That is, if the California Secretary of State verifies that the referendum effort did indeed secure the required amount of signatures.)

Opposition

A statement from Save Local Restaurants reads, in part:

The quick-service restaurants targeted by the law – which include coffee shops, juice bars, pizzerias, delis, and salad shops – already operate on small, single-digit profit margins. These include more than 10,000 small businesses, including thousands of women- and minority-owned businesses.

If these restaurants are forced to absorb the costs, the result will be bad for workers and local communities. To survive, many restaurant owners will have no choice but to reduce worker hours or introduce automation. Some may choose to leave their communities entirely or go out of business.

As is often the case with overreaching California policies, this is likely only the beginning.

Additionally, the National Restaurant Association, a member of the coalition, has said the following:

The impacts of the FAST Act won’t be limited to quick service restaurants in California. The law allows the new regulating council to set a higher minimum wage for quick service restaurants. Independent restaurants will, however, be forced to increase their pay to match, so they can remain competitive when recruiting and retaining workforce.

Takeaway

We believe this bill is one to watch because similar efforts could spring up in other states. Also, just because the bill is on hold until 2024 in California doesn’t mean other states aren’t working on similar legislation right now.

Now, there are obviously two sides to consider. Opponents, as we see above, say FAST will raise prices, eliminate jobs, and hurt families.

Proponents believe FAST will protect the health, safety, and welfare of fast-food workers. Additionally, the Fast Food Council could increase the minimum wage for fast food workers above California’s $15.50 minimum (effective January 1, 2023).

We’ll keep an eye on FAST over the next couple of years. Perhaps the coalition can work with California on a bill that protects fast food workers and doesn’t hurt operators and the communities they serve.

At any rate, FAST is down but certainly not yet out.

Image: Johann Walter Bantz on Unsplash

by David Klemt David Klemt No Comments

Cali Chains Move Quickly to Kill FAST

California Chains Move Quickly to Kill FAST

by David Klemt

Huge pile of cash

If recent reporting is accurate, fast food chains with locations in California are fighting the Fast Food Accountability and Standards Recovery Act.

Several well-known restaurant chains have reportedly already dumped well over $10 million into a ballot drive effort. Among the chains lobbying to kill the bill are In N Out, McDonald’s, Wendy’s, and Chipotle.

In other words, the group of chains aiming to defeat AB-257 in California have very deep pockets. These heavy hitters are reaching deep to contribute millions of dollars to Save Local Restaurants, the coalition responsible for starting the ballot initiative.

And who are the Save Local Restaurants coalition members? The National Restaurant Association (NRA), US Chamber of Commerce (USCC), and International Franchise Association (IFA).

What is AB-257?

The Fast Food Accountability and Standards Recovery Act, also known as the FAST Act, is a California bill. Enacted on September 5 of this year, FAST amends a section of the state’s labor code that relates to food facilities and employment.

Click here to review the bill’s text in its entirety.

To summarize, FAST does the following:

  • Establishes the Fast Food Council, ten members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee. The council will operate until January 1, 2029.
  • Defines “the characteristics of a fast food restaurant.”
  • Gives the Fast Food Council the authority to set “minimum fast food restaurant employment standards, including standards on wages, working conditions, and training.”
  • Provides the council the power to “issue, amend, and repeal any other rules and regulations, as necessary.”
  • Allows the formation of a Local Fast Food Council by a county, or a city that has a population of more than 200,000.

It’s that third bullet point that likely stands out the most to chain operators. On January 1, 2023, California’s minimum wage increases to $15.50 an hour. If the Save Local Restaurants ballot initiative fails, the Fast Food Council could boost the minimum wage to $22 per hour right after we all yell, “Happy New Year!”

Proponents say the bill protects the health, safety, and welfare of fast-food workers. Opponents call it radical.

Fighting FAST

According to Save Local Restaurants, it’s not just chains that want to kill FAST:

“The FAST Act is opposed by small and family-owned businesses, minority-rights groups, workers, consumers, your favorite restaurants, taxpayers and community-based organizations,” reads their website.

Among their reasons for attempting to kill the bill are:

  • a resulting increase in the price of food;
  • the elimination of thousands of jobs in California;
  • an increase in the cost of living in the state; and
  • the millions of dollars the coalition claims the bill will cost California taxpayers annually.

Reportedly, full-service restaurant operators also oppose FAST. The reason is simple: If the Fast Food Council hikes fast-food worker minimum hourly wages significantly, FSRs will struggle to compete. FSR operators will have to hike menu item prices further, a situation that’s growing untenable as consumers balk at paying more at restaurants.

Then, there’s the fact that bills similar to FAST could pass in other states. So, chains are contributing millions to see that the Save Local Restaurants ballot initiative succeeds.

Should the effort be successful, FAST will be included on California’s 2024 ballot. That means it will be suspended until 2024 and be in the hands of the voters.

Image: Tima Miroshnichenko via Pexels

by David Klemt David Klemt No Comments

A Lesson in Guest Perception

A Lesson in Guest Perception

by David Klemt

Broadway-style McDonald's sign in Chicago, Illinois

At this point, it’s becoming more of a surprise to not be told that the ice cream machine isn’t working at a McDonald’s restaurant.

Per a report from earlier this year, 25 percent of their machines are broken at any time. In fact, the brand made a joke about it in 2020.

Interestingly, with all the road trips and flights I’ve taken, I had never encountered a nonfunctional ice cream at a McDonald’s. Until last week.

Feeling nostalgic, I drove to a McDonald’s near my home for a Shamrock Shake. Growing up, my father always enjoyed the Shamrock Shake LTO. I’ve had maybe one or two in my entire life.

So, I drove over, got in line, and confidently asked for a Shamrock Shake and a Mint Oreo Shamrock McFlurry. And then I heard the words I’d never heard before:

“I’m so sorry, our machine isn’t working.”

Devastated, I did what any well-adjusted adult would do: I ordered a double cheeseburger and a 10-piece Chicken McNuggets combo. Same thing as a shake and McFlurry, right?

Guest Perception

I won’t dive too far into the minutiae of the longstanding McDonald’s ice cream machine saga. By now, we’re all familiar:

  • These machines break so often there’s a website dedicated to the problem. McBroken shows people where ice cream machines are working and where they’re broken. (If only I had used that before my ill-fated visit…)
  • The machines reportedly take four hours per day to clean.
  • There are claims that Taylor, the manufacturer of the machines, makes 25 percent of their revenue from performing repairs.
  • Outlets have reported the FTC is investigating the situatithe machine’s manufacturer, Taylor.
  • The latest news is that Kytch is suing McDonald’s for $900 million.

I’m not a McDonald’s board member, nor am I a franchisee. So, I’m not privy to any discussions swirling around the ice cream machines in use currently.

However, I do find it surprising that a brand as massive as McDonald’s would allow this issue to continue. For a brand that claims nothing is more important than delivering a high-standard of quality food, this joke is no longer funny.

What’s more, the issue is an opening for their competitors.

Leave an Opening and a Competitor will Take it

Jack in the Box has roasted McDonald’s for their ice cream machines in the past. This month, however, they’ve amped up their trolling.

Now that the Shamrock Shake has returned, Jack in the Box has pounced.

It would’ve been enough for Jack to mock McDonald’s on Twitter during Shamrock Shake season. But nope—Jack is dragging McDonald’s even harder.

Head over to McBroken and you’ll see a huge banner that reads, “DON’T GET McSHAMMED.” You’ll notice that the map is now also populated with Jack in the Box locations.

Click the aforementioned banner and you’ll find yourself on the Jack in the Box website. More specifically, it’s a page promoting their mobile app.

Taking it further, there’s currently a promotion encouraging the download: using the code “McSHAMMED” scores the user a $2 shake.

Since we’re in Shamrock Shake season, Jack is offering their new Oreo Cookie Mint Shake. And yes, it’s green.

Innovation and Problem Solving are Crucial

Look, I’m in no position to tell McDonald’s how to run their business. If they’re comfortable with negative guest perception and experiences, that’s on them.

It’s also on them if they want to show their guests and competitors a failure to innovate, solve problems, and be agile.

The ice cream machine debacle should be a lesson for all operators. Leave an opening and your competition will take it, slamming it shut behind them.

At best, maybe you’ll be able to adapt and overcome. At worst, they’ll be social media and marketing savvy, and roast you publicly. Once a brand’s perception slips, it can be incredibly difficult to get it back to where it once was.

As an operator, you’re an entrepreneur. Entrepreneurs innovate and solve problems.

Image: Joshua Austin on Unsplash

by David Klemt David Klemt No Comments

Wendy’s Looks to Ghosts for Growth

Wendy’s Looks to Ghosts for Growth

by David Klemt

Wendy's fast food restaurant exterior and sign

Wendy’s is the latest foodservice company to announce plans to open ghost kitchens in Canada, the US and the UK.

The fast-food giant’s scheme is large-scale and part of an expansive growth strategy.

Per the company, Wendy’s plans to open 700 ghost kitchens.

Embracing the Trend

Here’s a question for you: Do you hear and read the word “pivot” or the phrase “ghost kitchen” more often these days?

Ghost kitchens seem to be the pivot of choice for restaurant groups and enterprising tech companies looking to leverage the next big thing. (There, a sentence with both “pivot” and “ghost kitchen” in it,)

The trend also appears more often than not to be the domain of Big Business.

Former Uber executive Travis Kalanick is the founder of CloudKitchens. DoorDash is also entering the ghost kitchen space, running a trial in California to see if pursuing the idea is viable.

Now, enter Wendy’s, not exactly a mom-and-pop shop in the restaurant space.

Ghost vs. Virtual Kitchen

We don’t revel in the semantics game, necessarily. But we know people are going to refer to Wendy’s ghost locations as “virtual” kitchens as well.

However, ghost kitchens and virtual kitchens have unique definitions and characteristics.

Wendy’s isn’t creating a new brand with new items they’re preparing in their existing brick-and-mortar locations. Nor do they plan to do so with their new locations under constructions currently.

Were that the case, their strategy would be a virtual kitchen plan.

Instead, the 700 locations will be separate facilities without storefronts. Also, the units will focus solely on delivery, leveraging on-demand consumer behavior.

So, the lack of storefront is arguably the greatest defining characteristic of a ghost kitchen.

Conversely, a virtual kitchen operates in a location with a storefront. However, the brand on offer exists online and not in the brick-and-mortar world of an established brand. In essence, an existing brand is offering a brand that they don’t want to dilute what they’ve already built.

That’s a Lot of Ghosts

Per reporting, Wendy’s is joining forces with Reef Technology to open and operate their ghost kitchens.

At least 50 such locations are in the works to open this year. The other several hundred locations will open between 2022 and 2025.

That means we should see more than 150 Wendy’s ghost kitchens going live per year across Canada, the US and the UK.

Partnering with Reef Technology is an interesting and telling maneuver. Reef, per their website, focuses on “urbanization” and reshaping “our urban infrastructure.”

And as CEO Todd Penelow stated last week, Wendy’s doesn’t isn’t strong in urban areas. The vision for Wendy’s new strategy is to penetrate urban markets, adding new stores and new franchisees as the brand moves forward.

Should things go according to plan, Wendy’s expects to expand from 6,500 units worldwide to somewhere between 8,500 and 9,000 in 2025.

Image: Michael Form from Pixabay

by David Klemt David Klemt No Comments

Want Champagne Onion Rings with That?

Want Champagne Onion Rings with That $6,000 Burger?

by David Klemt

De Daltons gourmet Golden Boy hamburger, cropped image

Matthew McConaughey once said that the inventor of the hamburger was smart but creator of the cheeseburger was a genius.

So, what title should we bestow upon the person who created the first-ever gourmet burger?

Super-genius? Superhuman? Superhero?

Perhaps legend is high-enough praise for whomever made it acceptable to charge more than $10 for a simple menu item.

A Brief History of Haute Hamburgers

The United States is widely credited with the invention of the hamburger. However, the exact origin is unknown. Therefore, it remains heavily disputed.

Of course, we wouldn’t have today’s gourmet burgers without two decidedly standard burger powerhouses: White Castle and McDonald’s.

The former was founded 100 years ago this past March in 1921, while the latter really came into its own in 1955. However, thanks to films like The Founder, McDonald’s tends to get the lion’s share of modern burger and fast-food credit.

Regardless, the first haute cuisine burgers wouldn’t hit the market until the turn of this century. Chefs Daniel Boulud and Richard Blais are among the names that receive credit for creating the gourmet burger category.

Over the past several years, several high-dollar burgers have made headlines. For example, Corvallis, Oregon-located restaurant Juicys Outlaw Grill created a $5,000 burger ten years ago. Anyone interested in having one was required to provide 48-hours’ notice.

In 2017, Dutch chef Chef Diego Buik offered a $2,300-plus burger at South of Houston in the Hague. Just two years ago, Chef Hubert Keller featured a $5,000 burger on the menu at his Las Vegas restaurant Fleur.

Another Las Vegas restaurant, Burger Brasserie, has offered a $777 burger for nearly a decade.

Chef Gordon Ramsay’s latest restaurant, the cleverly named Gordon Ramsay Burger outpost in London (the original is in Las Vegas), features a burger that costs between $106 and $144. Oh, and it doesn’t come with fries—those come with an upcharge of ten bucks.

New King of Burgers

Now, there’s a new most-expensive burger making the scene. Interestingly, it’s not from an American restaurant.

De Daltons, a Dutch diner located about 40 minutes southeast of Amsterdam, is the home of a gourmet burger known as the Golden Boy.

De Daltons gourmet Golden Boy hamburger

Of course, this isn’t just any gourmet burger—at €5000, De Daltons is attempting to make it the gourmet burger.

So, what does one get for their nearly $6,000 investment in haute cuisine?

To start, there’s the burger. It’s made of ground A5 Wagyu brisket and chuck short rib. It’s topped with The Macallan- and Kopi Luwak coffee-infused barbecue sauce; truffled Cheddar cheese; Joselito vintage jamon (the best ham in the world); Dom Pérignon-battered onion rings; Beluga caviar; white truffle; Tiger tomato and cucumber that was pickled in matcha; smoked mayonnaise made saffron, chive and duck eggs; and king crab cooked in white wine.

Oh, and the burger is given a whiskey-smoked treatment before it’s served.

Speaking of service, what kind of bun is luxurious enough to hold the Golden Boy? A saffron- and Dom Pérignon-infused gold leaf one, of course.

Gourmet Gimmick?

The latest headline-grabbing burger is truly a hedonistic indulgence. Unlike some haute hamburgers from the past, however, it’s made with truly impressive ingredients.

Before the Golden Boy made its appearance, one simply had to make a BOUS (Burger of Unusual Size) to get attention. One could also go the “gourmet” route by pairing their signature burger with a pricey bottle of Champagne.

After those two routes turned a bit stale, chefs with impressive credentials could make news by making gourmet burgers from “fancy” meats, slapping foie gras and an aged cheese on top, and dusting the bun with gold.

De Daltons’ burger is clearly taking the gourmet burger in an ultra-luxe direction. All challengers to the King of Burger throne will have to follow suit.

Yes, the Golden Boy is a gimmick. Yes, it has helped De Daltons pull focus and grab the global restaurant spotlight. However, as ludicrous as many will find the price tag, the burger does deliver on luxe ingredients and pageantry.

So, am I suggesting that restaurateurs review their menus, local suppliers, and market to come up with their own headline-generating luxury menu item? Well, yeah.

If an operator’s kitchen team has the skills to execute on a specialty high-priced item while remaining authentic and without alienating loyal guests, go for it. If there’s only PR, marketing and revenue upside, creating one incredible “off-menu”item is worth the effort.

Again, this comes down to operators knowing their guests, their markets, and what they’re great at doing. The word “gimmick” doesn’t have to be a dirty word—it can be a positive if done correctly.

Image: De Daltons

by David Klemt David Klemt No Comments

McDonald’s Facing Privacy Lawsuit

McDonald’s Facing Privacy Lawsuit

by David Klemt

Statue of McDonald's mascot Ronald McDonald waving

A McDonald’s customer in Illinois, a state with some of the strictest privacy laws in America, is suing the fast food giant.

The largest fast food chain in the world is testing artificial intelligence in select drive-thrus throughout the Prairie State.

In theory, the technology will become a valuable operational element and enhance the guest journey.

However, one plaintiff in Illinois says McDonald’s is violating the state’s Biometric Information Privacy Act (BIPA).

AI-powered Drive-Thrus

Two years ago, McDonald’s made two significant technology company acquisitions.

In March of 2019, the fast food company purchased Dynamic Yield for a reported $300 million. Six months later, McDonald’s acquired Apprente.

The former acquisition brought “decision tech” to the QSR, using its digital billboards and ordering kiosks to make recommendations to guests depending on preferences, item popularity, and time of day.

The latter purchase is intended to bring automated voice ordering to McDonald’s drive-thrus through artificial intelligence.

Per CNBC, McDonald’s CEO Chris Kempczinski says AI is delivering an 85-percent order accuracy rate in its test stores. Currently, AI is taking 80 percent of the orders at ten Illinois McDonald’s locations.

Clearly, McDonald’s is investing in tech the company believes will enhance and speed up the guest drive-thru experience.

Lawsuit

Shannon Carpenter’s class-action lawsuit alleges that McDonald’s “violated BIPA because it failed to obtain proper consent prior to collecting and disseminating Plaintiff’s and the other class members’ voiceprint biometrics who interacted with its AI voice assistant at its Illinois locations.”

Carpenter filed the lawsuit after visiting a McDonald’s location last year in Lombardi, Illinois. The location is one of ten test stores.

The complaint also says, “McDonald’s AI voice assistant goes beyond real-time voiceprint analysis and recognition and also incorporates “machine-learning routines” that utilize voiceprint recognition in combination with license plate scanning technology to identify unique customers regardless of which location they visit and present them certain menu items based on their past
visits.”

In short, the plaintiff is alleging that McDonald’s is violating Illinois’ BIPA law by:

  • collecting biometric information (voiceprints in this case specifically) without consent;
  • not making the company’s data retention policies public;
  • failing to declare how long customer biometric data will be stored; and
  • not starting how the company intends to use the collected biometric data.

So far, McDonald’s has not released a statement addressing Carpenter’s lawsuit.

Customer Data

How much is one’s privacy worth? The price of a Big Mac or a Quarter Pounder combo?

Guest data and user privacy is a hot-button topic. For example, Apple made big news this year with the rollout of iOS 14.5 and its accompanying privacy features.

Carpenter’s lawsuit against McDonald’s carries implications for how businesses can collect and use guest data.

However, it also highlights an element of operating a restaurant in our tech-driven world.

It has been suggested by some business experts that the adage “cash is king” should be replaced by “data is king.” And yes, customer/guest data is incredibly valuable.

But so is reassuring guests that their data is safe with a given business. Operators, therefore, should be transparent about what guest data they’re collecting and what they intend to do with it.

And, as the McDonald’s lawsuit makes abundantly clear, there are laws governing the collection and handling of guest data. Operators should ensure that they and their partners are handling guest data legally, ethically, and responsibly.

Image: Vijaya narasimha from Pixabay

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