Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
May 4, 2010

Economic Report:
Sponsored by:
Henny Penny
NRA Performance Index Signals End Of Great Foodservice Recession
E&S List Prices Barely Budged Last Six Months, AutoQuotes Reports
MAFSI Barometer Sales Numbers Still Negative, But Less So
State Tax Revenues Posted Fifth Straight Decline In 4Q 2009
Technomic Top 500 Now Available

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
Food-Safety Bill Sidetracked By Financial Reform
Salt Comes Under Fire—Again
NRA Convenes On Public Affairs
Smoke Bans Set For Kansas, Michigan
NSF OK'd To Register Food-Safety Management Systems

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In This Section:
Wendy's/Arby's Creates E&S Sourcing Co-op
CKE Picks New Merger Deal
Chick-fil-A Plans 78 Units, Will Debut In Chicago
Dunkin' Donuts To Add 17 Stores Across Florida
Manitowoc Named Energy Star Partner Of The Year
First-Ever AHF Conference Nears

This issue's Economic ReportSponsor: Henny Penny
Regulatory ReportSponsor: Manitowoc Foodservice

Industry Report Server Products

Wendy's/Arby's Creates E&S Sourcing Co-op
Wendy's/Arby's Group has created an independent purchasing cooperative for its fast-food chains to source foodservice equipment, smallwares and other products and services not covered by its existing co-ops.

The Strategic Sourcing Group Co-op LLC will leverage the purchasing power of the company's 10,000 units. SSG was put together by Wendy's/Arby's Group and the existing co-ops for Wendy's, Quality Supply Chain Co-op, and Arby's, ARCOP Inc. The two existing co-ops arrange for perishable and certain disposable items.

The company has its eye on purchasing efficiencies for its dual brands, as well as reducing general and administrative expenses. The focus of the new co-op is on securing competitive contracts for equipment, kitchen smallwares, furnishings, menu boards and signs, as well as energy and restaurant-level contract services. SSG will evaluate items or shared suppliers that are not proprietary to either brand. Wendy's/Arby's will fund approximately $5 million of start-up expenses, and will transfer strategic sourcing employees to the co-op.

SSG will have a nine-member board co-chaired by Wendy's franchisee Don Haynes and Arby's franchisee Tom Browne. Les Karel, v.p. strategic sourcing for Wendy's/Arby's Group, will become president of SSG and lead its day-to-day activities.


Section sponsored by Server Products

CKE Picks New Merger Deal
Hardee's and Carl's Jr. will have a new owner. CKE Restaurants has terminated its tentative merger agreement with one private-equity firm and signed a definitive merger agreement with an affiliate of Apollo Global Management. According to CKE, the transaction is valued at approximately $1 billion, including the refinancing of CKE's outstanding debts. CKE's board of directors has unanimously approved the merger agreement.

CKE had earlier entered a merger agreement with affiliates of Thomas H. Lee Partners. The Carpinteria, Calif., company has 3,141 franchised, licensed or company-operated restaurants in 42 states and in 16 countries, including 1,224 Carl's Jr. and 1,905 Hardee's restaurants.

Company CEO Andrew F. Puzder called the agreement an exciting and positive development. "Our franchisees and employees will also benefit from Apollo's retail sector experience and widely acknowledged financial expertise."

In a statement, Apollo affirmed its commitment to CKE's management and to its continued growth as a QSR. The transaction is expected to occur by the end of the second quarter of fiscal 2011. At that time, CKE will become a private company, wholly owned by an affiliate of Apollo Global Management.

Section sponsored by Server Products

Chick-fil-A Plans 78 Units, Will Debut In Chicago
Chick-fil-A is thinking big—with plans to open 78 new stores this year, including its first-ever stores in Chicago—and rolling out its first new sandwich since 1989.

New units for 2010 include 66 stand-alone restaurants, two mall/retail outlets, and 10 licensed outlets in non-traditional locations such as college campuses. The chain also will spend millions to remodel and redesign 86 stand-alone and shopping mall outlets across the country. In addition, the company announced all restaurants, new or old, will add a new spicy-chicken sandwich on June 7.

Chick-fil-A started construction on three stand-alone restaurants in Aurora, Orland Park and Wheaton, Ill., which will kick off the Atlanta-based chain's expansion into the Chicagoland area. The chain anticipates opening up to six more restaurants around Chicago in 2011, representing 10% of its overall annual restaurant growth.

The privately held chain normally opens an average of 75 or more new restaurants annually. It has nearly 1,500 locations in 38 states and Washington, D.C. The Chicago expansion joins recent developments in other major markets such as Southern California, Kansas City, Mo., and Phoenix, Ariz.

Section sponsored by Server Products

Dunkin' Donuts To Add 17 Stores Across Florida
Dunkin' Donuts is going south, expansion-wise, anyway. The Canton, Mass., chain has signed agreements with three franchisees to develop 17 new restaurant franchises in south Florida and Jacksonville over the next several years. The chain will also be opening more stores in Georgia, where it has inked a multiunit store-development agreement with veteran nine-unit franchisee Tom Sottile for five new restaurants in Savannah. One restaurant will open this year, with the remainder debuting by 2015. Dunkin' Donuts development throughout Savannah is part of a steady and strategic growth strategy, which includes expanding in existing markets while entering new cities and non-traditional venues.

Part of the plan is offering single and multi-unit franchises with no minimum unit requirements. In Florida, two restaurant franchises will open in 2011 with the remaining units scheduled to open by 2017. Ten units will be developed in the northeast Dade, Doral-Hialeah and South Miami regions of Miami-Dade County by MMM Franchising Group. S. Gordon Restaurant Group, LLC, will open five units in southeast Palm Beach County and southwest Broward County. The first location is scheduled to open in 2011 and the remaining locations are scheduled to open by 2016. Two restaurant franchises will be developed in Jacksonville in 2012-13.

Dunkin' is going the non-trad expansion route as well, opening six units along Florida Turnpike travel plazas, as well as 13 locations at various airports and five units at universities throughout the state. The subsidiary of Dunkin' Brands has more than 9,000 restaurants in 30 countries.

Section sponsored by Server Products

Manitowoc Named Energy Star Partner Of The Year
Energy Star has named Manitowoc Foodservice a Partner of the Year. The award was formally presented at the Energy Star Awards ceremony on March 18 in Washington, D.C.

Energy Star honored Manitowoc Foodservice for key accomplishments including the addition of some 140 Energy Star-qualified models in 2009, bringing the total to 420; introducing new technologies to increase efficiency; displaying the Energy Star label prominently; and providing hands-on training about Energy Star products and their significance.

Manitowoc Foodservice brands include Cleveland, Convotherm, Delfield, Fabristeel, Frymaster, Garland, Jackson, Kolpak, Kysor/Warren, Kysor Panel Systems, Lincoln, Manitowoc Beverage Systems, Manitowoc Ice, Merrychef, Multiplex and Servend.

Section sponsored by Server Products

First-Ever AHF Conference Nears
The Association for Healthcare Foodservice is kicking off its inaugural conference next month. The Power of One: Uniting People, Igniting Possibilities is set for June 5-9 in Austin, Texas. Speakers and competitions and roundtable discussions abound. Details are available at

The association was created from the merger last year of the American Society for Healthcare Food Service Administrators and the National Society for Healthcare Foodservice Management.

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