Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
August 11, 2009








Economic Report:
Sponsored by:
Food & Hotel Vietnam 2009
FER Forecasts E&S Market To Shrink
MAFSI Business Barometer Falls 12.8% In Q2
NRA Restaurant Performance Index Falls Again In June
Job Losses,Unemployment Rate Dip

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
U.S. House Food-Safety Bill Fails, Then Passes
Albany Mulls County Calorie Counts
Pennsylvania Wants State Food-Safety Standard
Increased Deduction For Meals Proposed



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In This Section:
Yum! Scores In India
CKE Unveils Five-Year Expansion Plan
Pizza Inn Rolls Out Franchisee Stimulus
Chick-fil-A Ramps Up Openings
Starbucks Makes New Name For Itself

This issue's Economic ReportSponsor: Food & Hotel Vietnam 2009
Regulatory ReportSponsor: Manitowoc Ice Inc.

Industry Report Server Products

Yum! Scores In India
Yum! Brands is doing something right in India. During the past 11 years, it has become the country's largest and fastest growing restaurant company, with 157 Pizza Huts in 35 cities, 50 KFCs in 11 cities, and the subcontinent's first Taco Bell..

And for the fifth year in a row, Pizza Hut has been named the country's most trusted foodservice brand. The consumer survey by The Economic Times of India placed it ahead of all other Indian and global brands. Pizza Hut India is part of Yum! Restaurants Int'l.

"India is an important emerging market for us," said Graham Allan, president of YRI. "Both Pizza Hut and KFC are proving very popular with consumers, and we have high hopes for Taco Bell as well. We continue to make significant investments in India as part of our plan to capitalize on this large and rapidly growing market of more than 1 billion people."

International development continues at what Yum! calls "a robust pace" for the brands, with 338 new openings for YRI and 246 in its China division, which includes Thailand and KFC Taiwan. In its second quarter alone, YRI opened 193 new units in more than 50 countries, Discounting store closures, the chain opened more than 130 new KFCs and 47 Pizza Huts internationally. Mainland China welcomed 118 new units in the second quarter; the company acquired an additional interest in the entity that operates 236 KFC units in Shanghai, boosting its ownership from 51% to 58%.

On the domestic front, 79 company-owned U.S. restaurants were sold to franchisees in the quarter, bringing Yum!'s year-to-date refranchise total to 188 units. The Louisville, Ky., company has announced it expects to refranchise 500 units in 2009.

In terms of system restaurants, Yum! Brands is the world's largest restaurant company, with more than 36,000 restaurants in more than 110 countries and territories.

 

Section sponsored by Server Products

CKE Unveils Five-Year Expansion Plan
CKE Restaurants is making no small plans for its Hardee's and Carl's Jr. chains. The company has said it plans to open 370 new domestic units by 2014, focusing on growing the two concepts across a wide swath from Arizona and Washington to the Carolinas and Virginia. The total count of 70 new company-owned stores and 300 franchised stores would reduce the company's reliance on Carl's Jr. business in California, where it has 367 company-owned and 361 franchised units. Hardee's stores are more concentrated in the Midwest and Southeast. The company estimates that by '14, franchised units will represent about 75% of the system and 90% of all new units.

The company's second-quarter indicates overseas expansion plans as well. CKE is aiming to nearly double its total percentage of international units, from today's 10% of total stores to 18% by '14. The company currently has 325 stores in 14 countries outside the United States, primarily the Middle East and Mexico. The new goal is to more than double the current number by opening 375 stores over the next five years, including debuting units in China, Kazakhstan and Singapore.


Section sponsored by Server Products

Pizza Inn Rolls Out Franchisee Stimulus
Development incentives at Pizza Inn are working to ramp up franchisee interest, the company indicates. The incentive program, offered to new and existing franchisees, focuses on reducing start-up costs, with royalties kept at zero for the first year of operations and 2% for the second year. Thirteen new deals have been signed, including those with two current franchisees planning to open five locations in the Spartanburg, S.C., area.

Pizza Inn's global presence will get a boost with the addition of Anthony Kwok as managing director of development, Asia Pacific. Kwok, most recently regional director of development and franchising for Domino's Pizza, will oversee Pizza Inn's international franchise development program. The chain has 68 locations in nine countries outside the United States. Its presence in the Middle East will soon be strengthened with the opening of new stores in Oman and Bangladesh.


Section sponsored by Server Products

Chick-fil-A Ramps Up Openings
With sales up 10% for the first half of the year, Chick-fil-A is expanding its store-opening plans. The Atlanta-based chain announced in early July that it would add five more units to its previously announced plans for 64 new stand-alone stores for the year. Those 69 new stores, along with a new mall retail outlet and 10 licensed outlets in sites such as college campuses and airports also on tap, make 80 total new-store openings for 2009.

The chain has already opened half of the new restaurants, and is remodeling approximately 70 stand-alone and shopping mall locations.

Chick-fil-A also operates drive-through-only restaurants, Chick-fil-A Dwarf House and Truett's Grill full-service restaurants. It has more than 1,450 restaurants in 38 states and Washington D.C. Last year's nearly 4.6% same-store sales gain extended to 41 years the chain's streak of consecutive sales gains. Sales in 2008 were up 12%.


Section sponsored by Server Products

Starbucks Makes New Name For Itself
Starbucks Corp., which plans to achieve LEED certification with all new company and international joint-venture stores beginning in 2010, has unveiled three units as part of its Shared Planet program.

The stores—two in its hometown of Seattle and unit No. 50 in France—share common goals such as incorporating reused and recycled elements, boosting energy-efficiency by 25%, and deriving 50% of energy from renewable sources. The new Disneyland Paris store is Starbucks' first European store to be registered for LEED certification. Its unique equipment specs include a ventilation system utilizing natural convection-exhausting heat rising through a titanium-paneled tower.

Water conservation, too, is getting a lot of emphasis in both new construction and renovations. Some stores are transitioning to a higher-pressure water spray to clean blender pitchers and to mechanical dishwashers that use less than 1 gal. of water per cycle through high-pressure spray arms. Espresso machines are now programmed to dispense less water when rinsing shot glasses. And after years of cleaning spoons under a continuous stream of water in dipper wells, the chain has begun installing hand meter systems to monitor water usage.

To test different energy- and water-saving strategies without adding to building costs, Starbucks plans to open 10 pilot stores registered to be LEED-certified in six different "bio regions." The pilot stores will open by next spring.

The coffee giant has also unveiled a new store concept, which omits the Starbucks name and logo in favor of a neighborhood identity. The 15th Avenue Coffee and Tea is the first of at least three Seattle-area coffee shops that will be named after their neighborhoods, rather than take on the company's brand name. Beer and wine will be served in addition to espresso from a manual machine, rather than Starbucks' standard automated machines.


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