Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
August 17, 2004

Economic Report:
Sponsored by:
Atlas Metal Industries Inc.

MAFSI Barometers Show Healthy Second Quarter Sales Gains
Strong Second Quarter for Public E&S Companies
Blue Chip Economists Pare Back Forecasts
Chain International Growth Rebounded in 2003

Regulatory Report:
Sponsored by: ES3

Washington State’s New Food Code May Mean Capital Outlays
Connecticut Tightens Grip On Fat, Oil And Grease Disposal
New Overtime Regs Kick In Next Week
Yavapai County, Ariz., To Require More Than Lip Service
Maryland Restaurants Dodge Another Smoking Bullet

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In This Section:
Some Chains Revising Construction Projections Downward
FCSI White Paper: No Subs Without Approval
Aga Foodservice Acquires La Cornue
Harrah’s Acquires Caesars

This issue's Economic ReportSponsor: Atlas Metal Industries Inc. |  Regulatory ReportSponsor: ES3

Industry ReportSponsored by Vollrath Co.

Some Chains Revising Construction Projections Downward
Construction forges ahead for McDonald’s, Jack in the Box and Papa John’s—just not quite as quickly as initially projected.

McDonald’s Corp. expects to open 500 traditional stores in 2004, down from its May forecast of 550. The Oak Brook, Ill., company also plans to open 250 satellite restaurants this year, down from the May projection of 300. On the opposite side of the books, McDonald’s trimmed estimates of store closures to 350, down from the originally projected 400.

Meanwhile, Jack in the Box announced that construction delays meant it would be opening 60 new stores in ’04 instead of 65. The San Diego restaurant company also slightly eased off on opening plans for its other concepts. Jack in the Box will open 67 Qdoba stores this year, which is 11 fewer than originally projected; and 13 new Quick Stuff c-stores, two fewer than projected.

Over in pizza land, Papa John’s Int’l. recently told investors it would be opening 100 to 120 stores this year, slightly down from the 120 to 140 initially planned. The Louisville, Ky., chain expects to shutter more units than previously stated, with up to 130 domestic closures compared to the 60 to 80 closures stated earlier.

Section sponsored by Vollrath Co.

FCSI White Paper: No Subs Without Approval
Foodservice Consultants Society Int’l.’s North American Division is moving forward on the issue of equipment substitution, the topic of a recent white paper written by Len Bundy, George E. Bundy & Associates; and John Cornyn, The Cornyn Fasano Group.

On Aug. 31, a cross-industry meeting will work out procedures to ensure clients receive equipment that’s been specified for the job, or at least retain approval on suitable substitutions. The meeting will include representatives from FCSI, the North American Association of Food Equipment Manufacturers and the Manufacturers’ Agents Association for the Foodservice Industry. FCSI also will be reaching out for more industry input from the Foodservice Equipment Distributors Association as well as several operator groups.

"The industry as a whole should support what the client wants in the specifications created," said Georgie Shockey, chairperson of FCSI’s North American division and principal of Ruck-Shockey Associates. Shockey said consultants should be able to write tight specs "that leave little room for unequal substitution."

"We hope to have procedures in place by yearend, but that’ll depend on the results of the August meeting," Shockey added.

Download a copy of the white paper, called "Proprietary Specifications—In the Client’s Interest, a Critical Need for a Set of Protocols," from

Section sponsored by Vollrath Co.

Just when you thought you knew all the association acronyms, one of them goes and makes a change. In this case, it’s the group formerly known as the American School Food Service Association.

Effective July 25, members agreed to change the name of their organization to the School Nutrition Association. The new name and logo—a cross-section of an apple with a bite missing, over a tagline that reads "Making the right food choices, together"—better reflect the association’s "commitment to working with the education and health communities to provide 33 million nutritious school meals daily," according to a press release.

The group gets a new Web address, too: The 58-year-old professional organization represents more than 55,000 school foodservice members nationwide.

Section sponosred by Vollrath Co.

Aga Foodservice Acquires La Cornue
Hot oven acquisition in Europe! Aga Foodservice Group expands its position in the premium cooking range market with the recent acquisition of La Cornue, the high-end French range manufacturer. Under terms of the agreement, Aga will pay Euro 5.1 million to La Cornue’s U.S. parent company, Nortek Inc.

La Cornue ovens, like those made by Aga, use radiant heat for cooking. The company has a manufacturing site near Paris and a dealer network in France and the United States.

"La Cornue is an internationally renowned brand," said William McGrath, Aga CEO. "With our manufacturing support and linking with our established professional stainless steel ranges, we expect it to grow rapidly as Aga and Rangemaster are now."

Aga, of West Midlands, U.K., specializes in cooking equipment for foodservice and consumer markets. Its commercial brands include AFE Serviceline, Falcon Foodservice Equipment, Victory Refrigeration and Williams Refrigeration.

Section sponsored by Vollrath Co.

Harrah’s Acquires Caesars
Another Vegas marriage, only this time between two high-rollin’ casinos. Harrah’s, in a move to stake out the lion’s share of the gambling market, in July announced the purchase of rival Caesars Entertainment. The $5 billion deal would make Harrah’s the nation’s largest casino.

The gaming acquisition comes about a month after MGM Mirage bid $4.8 million for the Mandalay Resort Group, owner of some of theVegas strip’s prime properties. And at the beginning of July, Harrah’s completed its acquisition of Horseshoe Gaming Holding Corp., a three-unit entity with casinos in Indiana, Louisiana and Mississippi.

Las Vegas-based Harrah’s operates 28 casinos with nearly 1.7 million sq. ft. of gaming space and 15,650 hotel rooms. Caesars Entertainment, also of Las Vegas, runs 28 properties that include 2 million sq. ft. of casino space and 26,000 rooms. The company’s key markets include Atlantic City, N.J; Las Vegas and Mississippi.

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