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February 2007 |
Volume 8, Issue 2, Part 1 |
 While the general restaurant trade is expected to improve in 2007, analysts and industry experts are projecting another testing year for casual-dining spots which offer sit-down service and moderate menu prices. According to a 2007 industry outlook report by the analysts at Friedman Billings Ramsey & Co, Inc., the worst same-store sales trends were in the bar-and-grill segment of casual dining. The analysts also reported that these companies are stuck in the middle between quick-service restaurants and upscale casual dining and lack differentiation.
Technomic Inc. a restaurant research firm from Chicago, forecast that the number of restaurants run by quick-casual chains will grow by 35 percent this year. In contrast, casual-dining chains are scaling back expansion plans. In addition to competition from fast-casual restaurants, casual dining chains also are getting squeezed by the emerging class of upscale-casual restaurants. Those restaurants generate higher average checks but their prices fall short of the cost of fine dining therefore attracting diners. (Columbus Business First, 1/26/07)
Profitable Panera
 Panera Bread Co. reported a 17-percent jump in fourth-quarter profit from a year earlier on a 34.4 percent surge in revenues. The company, which operates or franchises approximately 1,027 namesake bakery-cafes, earned $18.9 million, or 59 cents per share, during the quarter ended Dec. 26, compared with earnings of $16.2 million, or 51 cents per share, in the year-earlier quarter.
Panera's revenues totaled $232.9 million, driven by a 2 percent systemwide same-store sales increase and the opening of 52 bakery cafes, including 26 corporate units. The company's latest quarter earnings included a one-time, 3 cents per-share charge for the company's $21.1 million purchase of a majority stake in Paradise Bakery & Café, a Scottsdale, Ariz-based operator of about 45 bakery-cafes. (Nation's Restaurant News, 2/9/2007)
Arby's Restaurant Group Inc., the 3,500-unit subsidiary of Triarc Cos., Inc., announced this month that it had signed development agreements during the fourth quarter of 2006 to open 51 Arby's Restaurants throughout North America. A total of 168 units were signed for development in 2006. The company said the agreements, which include seven and 12 existing franchisees, were for restaurants in Illinois, Indiana, Louisiana, Michigan, Mississippi, New Jersey, New York, South Carolina, Texas, Utah, West Virginia and Wisconsin as well as British Columbia in Canada. (Nation's Restaurant News, 2/9/2007)
 La Quinta has purchased eight Fairfield Inns, adding to its portfolio of corporate-owned hotels. The Irving, TX-based operator bought the hotels from affiliates of Olympus Real Estate Partners. La Quinta says it will spend about $12 million to renovate the properties. The newly acquired hotels are located in Baltimore, Linthicum Heights, MD; Jessup, MD.; New Haven, CT; Stamford, CT; Portland, ME; Salem, NH and Warwick, RI. The purchase adds 1,000 rooms, all in the Northeast, to the chain's more than 65,000 rooms. La Quinta operates and provides franchise services to more than 575 hotels in 45 states and Canada. (Dallas Business Journal, 2/6/2007)
 An Atlanta investment firm has completed its buyout of Shoney's restaurants. The last element of the deal was Royal Hospitality's Corp.'s purchase of 52 restaurants from Lone Star Funds. The firm last month also acquired trademarks and franchisor rights to 230 franchisee-owned Shoney's. Royal Hospitality hopes to accelerate the process of revitalizing the Shoney's brand as well as restoring Shoney's to its position as a premier dining destination. It was the second sale of Shoney's in the past five years. Lone Star purchased Shoney's in 2002 for about $275 million in cash and debt.
At its peak, the chain had more than 1,000 locations, where signature items such as the double-decker burgers and fudge cakes were hot sellers. Hundreds of locations closed over the past decade amid competition from new, casual restaurant chains such as Applebee’s and Chili’s. Shoney’s will keep its headquarters in Nashville, TN.
(AJC.com, 1/22/2007)
 Children's Orchard, Inc., franchisor of Children's Orchard, a nationwide chain of nearly 100 upscale resale children's boutiques in 24 states, announced that it is now offering a home-based franchise concept, Newcomers Welcome Service, which welcomes newcomers to the neighborhood by personally delivering community information and special offers from local retailers and professionals. Children's Orchard plans to develop it into a national concept and begin franchising in early 2007. Newcomers Welcome Service franchisees and their representatives set up appointments to visit newcomers in their homes. Sponsors pay the Newcomers Welcome Service franchisee a fee for delivering their information into the home and for promoting their business. The free Welcome packet is a valuable resource that provides information to new residents to help them get comfortable in their new surroundings. It highlights locally-owned shops, markets, restaurants in their area, in addition to doctors, dentists and other professionals. (Children's Orchard PR Release, 2/9/2007)
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