Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
June 29, 2010








Economic Report:
Sponsored by:
Henny Penny
Tom Stundza To Provide Exclusive Materials-Price Forecasts For FER Forecast Meeting
Technomic Sees Slow Foodservice Recovery During Next 18 Months
General Economy Improving, Says Leading Economist At Technomic Conference
Traffic Jumps 2.3% In Canada First Quarter, Reports NPD
Food Prices Down, Menu Prices Flat, Gas Prices Up A Bit

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
A Special Announcement From Foodservice Equipment Reports: FER To Host New MUFES For Noncommercial Operators June 2011
Red Tape Gets Cut For Restaurant Development In L.A. County
House Bill On Child Nutrition Targets Food Safety
Walk Through The Regulated Restaurant
Menu Labeling Hits Down Under



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In This Section:
Plans Afoot For Emerging Markets At McD's
Arby's Has Big Plans for Turkey
CPK Debuts Travel-Plaza And Quick-Serve Sites
Luby's Has Winning Bid For Fuddrucker's
FHC China To Open A Day Early

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

Industry Report Server Products

Plans Afoot For Emerging Markets At McD's
McDonald's plans to open 100 more restaurants in South Africa and 120 in India over the next five years as the company seeks out further growth in emerging markets, according to recent interviews with two of the company's top executives.

Tim Fenton, president of the chain's Asia-Pacific, Middle East and Africa regions, told Bloomberg News that the area's growth is now responsible for about 14% of the company's operating income, compared with less than 8% five years ago. According to Fenton, China is the main focus for regional investment, with plans for 2,000 McD's outlets there by 2013. "It took us 19 years to get to 1,000 restaurants in China," Fenton told Bloomberg. "We will hit the second thousand in four years." McDonald's has what he termed the "critical mass" there for 15% new-store growth for the next four years. India and South Africa have also reached the point where the company can take advantage of economies of scale and a reliable supply chain to grow faster, Fenton added.

Don Thompson, McDonald's No. 2 and COO, echoed those comments in an interview with the Chicago Tribune. Since taking the reins in January, Thompson has been on a world tour of the chain's 32,000 stores to look at growth opportunities in each market. On a visit to South Africa for the World Cup, Thompson affirmed Fenton's plans for that country. "We have 134 outlets here now and we plan on building at least another 100 to 150 here over the next five years."

McDonald's currently relies on Europe for more than a third of its operating earnings. Around the world, it is relying on an ambitious plan to spark broader demand in its restaurants by introducing a spate of new products and redesigning its restaurants.

Thompson admitted that the chain has emphasized growth over same-store focus. Going forward, he said some markets will focus more on reimaging and reinvesting in existing stores, while newer and less developed areas will focus on continued market growth. "We don't have drive-thrus everywhere around the world in places that could really benefit from it. We don't serve breakfast all around the world and there are markets that will benefit from that."

 

Section sponsored by Server Products

Arby's Has Big Plans for Turkey
Ten Arby's units a year will be opening in Turkey under a just-signed contract. Arby's Restaurant Group and Tab Gida Sanayi ve Ticaret A.S. inked a development agreement to open at least 100 Arby's restaurants in Turkey over the next 10 years, including 50 during the next five years.

These restaurants will be incremental to the eight Arby's franchise units previously operated by Celebi in Turkey, which Tab Gida purchased as part of a separate agreement between the two organizations.

"Our agreement with Tab Gida is another important step in our international growth strategy," said Wendy's/Arby's Group president and CEO Roland Smith. "We're accelerating our international expansion opportunities by working with proven operators, like Tab Gida, who know how to successfully develop and operate quick-service restaurants."

Tab Gida, operating in the quick-service restaurant segment since 1995, owns or sub-franchises more than 430 restaurants in metropolitan areas throughout Turkey. Wendy's/Arby's Group is the third largest quick-service restaurant company in the United States. The combined restaurant systems include more than 10,000 restaurants in the U.S. and 24 countries and territories worldwide.


Section sponsored by Server Products

CPK Debuts Travel-Plaza And Quick-Serve Sites
California Pizza Kitchen has had a busy spring. Its first quarter saw the openings of CPK's second full-service restaurant in Dubai, UAE, and a quick-serve unit at Stony Brook University in Long Island, N.Y. Since the second-quarter began, the chain's franchise partners have opened CPK's first travel-plaza location, its eighth store in Mexico, and an airport quick-serve location.

The 25-year-old chain's first travel-plaza site is a 1,000-sq.-ft. unit in Philadelphia. Operated by veteran franchise partner HMSHost, it offers a specialized selection of CPK's most popular menu items and a Grab 'n' Go case for travelers on the move. HMSHost also opened a new CPK unit in the main terminal at Honolulu International Airport; that is the chain's 17th airport location. CPK now counts 24 units on campuses, airports, and at Dodger and Angel stadiums and the Staples Center in the Los Angeles/Anaheim market.

Store No. 8 in Mexico, opened by Grupo Calpik, S.A.P.I. de C.V., is located in the Coyoacán neighborhood of Mexico City. The new 7,000- sq.-ft. restaurant seats approximately 270 people. Additional CPK restaurants are located in Guadalajara, Cancun and five suburbs of Mexico City.

Of the Los Angeles chain's 254 restaurants, 204 are company-owned and 50 operate under franchise or license agreements. There are 196 full-service units, as well as seven CPK ASAP carry-out stores. The chain has 29 units in nine countries.


Section sponsored by Server Products

Luby's Has Winning Bid For Fuddrucker's
In a deal approved last week by a federal bankruptcy court, Luby's Inc. will acquire most of the assets of burger chain Fuddruckers Inc., its parent Magic Brands LLC and their affiliates for about $61 million in cash. The deal is expected to close by July 26.

The 96-unit Houston-based cafeteria chain also will assume some of Fuddruckers' real-estate leases and contracts. Luby's bought the assets in an auction on June 17, two months after Magic Brands filed for Chapter 11 bankruptcy protection. As part of the bankruptcy proceedings, Magic terminated certain Fuddruckers leases and closed 24 corporate-owned restaurants.

Fuddruckers operates 60 eponymous restaurants and three Koo-Koo-Roo locations, while franchisees operate 138 more Fuddruckers sites. The chain was founded in San Antonio, Texas, in 1980. Austin-based Magic Brands purchased the chain in 1998 and had sought to broaden its appeal through menu expansion.


Section sponsored by Server Products

FHC China To Open A Day Early
With new halls opening at the Shanghai New International Expo Centre this fall, China's biggest foodservice show is opening a day early. FHC China 2010, the 14th annual international exhibition for food, drink, hospitality foodservice, bakery and retail industries, will now run Wednesday-Friday, Nov. 10-12. The previously announced Nov. 11-13 show dates, running over a Thursday-Saturday span, were not considered ideal for trade visitors.

National and regional pavilions are in the works from 24 trade groups; large contingents are expected from France, Italy, Japan, South Korea, Taiwan, and the United States. Bookings for FHC China 2010 are already exceeding 2009 levels by nearly 20%. Attendance is getting a boost from the Shanghai World Expo 2010; more than 70 million visitors are anticipated to visit the six-month expo. Further information on FHC China 2010 is at www.allworldexhibitions.com/food


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