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Full Article in USA Today

Reducing the glut. With way too many restaurants serving far too few customers, at least 1,000 casual dining units will close over the next 12 months — helping to lessen the glut of casual dining spots, says Ron Paul, president at researcher Technomic. “In the eyes of consumers, these restaurants are the same. There are too many. They are too similar. And their prices got out of whack.”

Stand out. Casual dining’s long-term problem is one that vexes all companies as they age: how to stay fresh, while offering a unique draw to which no one else in the category can lay claim. Such as Cheesecake Factory’s giant portions. Outback’s high-quality steaks. Olive Garden’s Tuscan-like ambience. And Seasons 52’s bite-size desserts. “Each concept must stand for something unique to survive,” says Christopher Muller, an industry consultant.

Lower prices. More than anything, high prices are what rile USA TODAY readers. “The prices used to be reasonable, so you could go out more often,” says Marcia Lafferman of Paradise, Calif. Now, she says, casual dining prices have crept so high, she’s stopped going. To save money, Brace Cain, an events planner from Atlanta, stopped going to casual dining spots for dinner but goes at lunch, when prices are lower.

Fix the food. Casual dining’s takeoff 20 years ago was driven a lot by the fact that the food quality far exceeded fast-food offerings — but the prices did not. Fast food’s quality has gone way up, but the prices have risen relatively slowly.  At the same time, casual dining’s food quality and innovation stagnated, even as its prices kept creeping up, he says.

Improve service. Slow service and discourteous staff have given casual dining a black eye. Lengthy waits for meals “don’t reflect how Americans eat,”

Spiff up stores. “We have an entire industry of 20-year-old locations,” says Marc Buehler, CEO of Lone Star Steakhouse. “They need more than a coat of paint.”

Get kid-friendly. Families are a big part of casual dining’s business, and for many parents, what matters most is how happy their hungry kids are. Looking for casual dining spots to be more kid-friendly, she wonders if they could install kid playgrounds. Or maybe they could lend kids handheld video games at the same time parents are handed those electronic pagers.

Filed under: Restaurant News - - - Tags: Marketing your restaurant, Slow economy
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FULL Article

Restaurants, now working to secure supply and price contracts for meat and other commodities for the upcoming year, are expecting big increases in food costs – increases that will likely lead to menu changes and price hikes.

Some chains are already adjusting their menus to reflect current high costs for both beef and chicken. CKE Restaurants Inc., which operates the Hardee’s and Carl’s Jr. chains, stopped offering Double Cheeseburgers in its 2 for $3 promotion at the end of August and replaced them with Jumbo Chili Dogs and Hot Ham ‘N’ Cheese Sandwiches to avoid selling pricey beef at a lower price.

Even fast-food leader McDonald’s Corp. is considering making some changes to its popular dollar menu – either by changing the items on the menu or bumping up prices – saying the cost of selling meat at such low prices might be too high.

The decision to raise prices or change menus could have some harsh repercussions, especially because more diners are already eating at home to avoid pricey restaurant food. With the stock market dropping and consumers questioning whether their retirement savings will be available when the time comes, paying more for a meal out may be even harder to stomach.

But for restaurateurs, there may not be much of a choice.

“This is the most challenging environment for restaurant operators regarding food price inflation on the wholesale level for almost 30 years,” said Hudson Riehle, senior vice president of research at the National Restaurant Association.

Riehle said wholesale food prices have jumped 8.7 percent year-to-date through August. That’s on top of a 7.6 percent increase in 2007.

Restaurants typically either pay for their meat on the spot market, which can be volatile because prices are based on supply and demand, or they negotiate longer-term contracts with suppliers that set the price.

Part of the problem stems from protein producers’ plans to cut back on production in the next year to avoid paying more for animal feed, which has been a huge weight on profits as the cost of corn has skyrocket. Beef producers cut supply by slaughtering more animals, which sends more product to market initially but reduces the size of herds to lower future inventory levels. Chicken producers, meanwhile, set fewer eggs to hatch.

To offset the costs, some restaurants are already planning price increases.

Chipotle Mexican Grill Inc. has said it will raise its prices in its fourth quarter to offset an expected 7 percent to 10 percent rise in food costs next year. McCormick & Schmick’s Seafood Restaurants Inc. has also said it will boost its prices due to higher commodity costs.

Filed under: Restaurant News - - - Tags: Slow economy
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Eatery samples cheap eats

The Yellow Dog Lantern Restaurant has an answer to falling stock prices, the national credit crunch and turmoil in world financial markets. It’s called “the recession menu.” “Even people who have money are scared to spend it right now,” said Janet Clinger, owner. “I just tried to come up with something for people who are afraid to spend money.” So, from 5 to 7 p.m., recession-menu diners pay $10 a meal and get a choice of nine entrees. Choices include stuffed chicken breast, Hawaiian pork chop with sweet-and-sour sauce, and linguine with white clam sauce. The $10 price is a break from the regular prices for prime rib, veal and fish dishes that cost up to $20. The restaurant is an upscale dining establishment that has survived in a small town that has taken its economic lumps over the years.

But it has not been easy for a restaurant like the Yellow Dog Lantern to hang on. “Times are tough for everyone right now, but times have been tough here for a while,” Williams said. “We have to be resourceful businesspeople and work very hard and rely on customer relationships.”
But the Yellow Dog Lantern is hardly the only restaurant suffering. Annika Stensson, spokesman for the National Restaurant Association, a Washington, D.C.-based trade organization, said restaurants have not seen an economy this tough in 17 years — since the downturn in 1991. The industry, 70 percent of which is single-unit operators, has been buffeted by soaring food prices, growing labor costs and energy price spikes.
The trade association compiles a monthly national restaurant performance index. The latest figures were for August — before the crisis in financial markets — and that report showed soft performance figures for the 10th straight month. Those numbers are expected to worsen for September and October. “Restaurant owners tend to be an optimistic bunch overall, but according to our research, their outlook for the next six months is dampened by the current situation,” Stensson said.

Filed under: Restaurant News - - - Tags: Marketing your restaurant, recession, Slow economy
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Growth at casual dining chains slows

Casual dining companies, caught between cash-strapped consumers and a tight financing environment, are slashing U.S. expansion plans and some are looking overseas for growth.

While the U.S. economy was booming, casual dining became a frequent indulgence for consumers. But with the country mired in its greatest financial crisis since the Great Depression, many have changed their habits to eat at less expensive restaurants or prepare more of their own meals. To contend with a slowdown in customer traffic and rising costs to run their business, casual dining chains have been raising menu prices, cutting portion sizes and controlling raw material costs. They have also tried to manage their labor requirements closely and step up promotions.

This year, Asian-themed restaurant chain P.F. Chang’s China Bistro Inc, is on track to open 17 of its namesake restaurants and 25 Pei Wei stores, but for next year it plans to open only 12 to 14 P.F. Chang’s restaurants and 6 to 10 Pei Wei locations.

Expansion at O’Charley’s, which operates bar and grill restaurants under the O’Charley’s, Ninety Nine and Stoney River Legendary Steaks brand names, has come to a halt.

“We are not building restaurants right now,” Chief Executive Gregory Burns said at a recent Thomas Weisel Partners Consumer Conference.

“The industry is going to a very slow-growth mode and so the number of restaurants in the pipeline is being decreased.”

Burns said O’Charley’s has also deferred remodeling work on some units that had been planned for the second half of 2008 as it awaits more clarity on the economic climate and higher sales and profits.

Financing has also become a major restriction on unit growth for both company-owned and franchised restaurants, said Ron Paul, president of restaurant consulting firm Technomic.

This could hurt companies that rely heavily on a franchising model such as Denny’s, DineEquity’s Applebee’s chain and Brinker International’s Chili’s brand, Wedbush’s Moore said.

Casual dining as a segment has traditionally been company-owned, but that has been changing as some companies opt for more franchised stores to reduce operating exposure.

Difficulty in servicing existing debt could also put the brakes on a company’s growth plans.

Ruby Tuesday, for one, has suspended new restaurant openings as its “business sector is overbuilt and demand has declined.”

In its latest annual report, the operator of more than 950 bar-and-grill restaurants, said its spending could be restricted as it sets aside cash to repay its “significant” debt.

Analysts also say most restaurants are being careful about opening new stores in areas hit the hardest by a U.S. housing slump, such as California, Nevada, Arizona and Florida.

Filed under: Restaurant News - - - Tags: casual dining, Slow economy
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WASHINGTON — Lobbyists for restaurants hunted votes Wednesday for the $700 billion financial industry bailout package, touting new provisions that leaders added in hopes of finally pushing the bill through Congress.

Working off a color-coded spread sheet listing House members whose “no” votes sank the bill in that chamber on Monday, business groups contacted dozens of lawmakers _ at home and in Washington _ to seek their support. By late-afternoon, that list showed five legislators who’d voted “no” now leaning toward supporting an overhauled version of the bill the House rejected by 23 votes.

The all-out lobbying came as the Senate easily approved the revamped legislation late Wednesday. The added language _ designed to win House approval later this week _ included higher limits on federal deposit insurance, extended tax breaks for some states’ sales taxes and requirements that some businesses improve coverage for workers’ mental health.

“This is sausage-making, of course,” said Jade West, lobbyist for the National Association of Wholesaler-Distributors, describing the often messy process of collecting votes for a bill. “But it’s sausage-making in a favorable context.”

Efforts by the National Restaurant Association were typical of how many trade groups were working to round up votes.

Besides contacting lawmakers directly in Washington, the organization asked its 50 state chapters and its 18,000 most active members around the country to contact their members of Congress directly.

The focus was on House members because the business community thinks they may be willing to reverse their “no” votes, and the new provisions attached to the bill would help, said John Gay, the group’s top Washington lobbyist.

“Those who voted ‘no’ need an excuse, a rationale to say, ‘I changed my mind and here’s why,'” he said.

Among the extended tax cuts added to the bailout bill is one allowing those who build new restaurants or improve existing ones to write off the cost faster than the current 39.5 years, he said.

“People were 99-1 against the bill, then the market went down and people said, ‘You’re crazy, why’d you vote against the bill?'” Scott said Wednesday. “The next day the market went up and people said, ‘You did the right thing.'”

Filed under: Federal News, Restaurant News - - - Tags: Bailout, Lobbyists, National Restaurant Association
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Five states announcing minimum wage increases for Jan. 1, 2009.

Arizona will increase from $6.90 to $7.25 per hour.
Colorado will increase from $7.02 to $7.28 per hour.
Oregon will increase from $7.95 to $8.40 per hour
Vermont will increase from $7.68 to $8.06 per hour. Tipped employees will increase from $3.72 to $3.91 per hour.
Washington will increase from $8.07 per hour to $8.55 per hour.

Filed under: Payroll News, State News - - - Tags: Arizona, Colorado, Minimum Wage, Oregon, Vermont, Washington
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Complete article on the Wall Street Journal
Franchise companies, facing what many say is the toughest economic environment they’ve seen, are offering two-for-one deals, reduced fees and financing help to woo new buyers. They are also paying existing franchisees to help spread the word.

The economy has made many would-be franchisees wary of taking big financial risks, while others simply can’t get the necessary loans. Meanwhile, competition among franchisers is growing, giving investors a lot more choices. There are now about 3,000 different franchise concepts, according to the International Franchise Association.

In a survey released last week of some 150 franchise companies, respondents said their franchise sales were about 72% below their 2008 goals, with inquiries from prospective franchisees down about 48%, according to Franchise Update Media Group, San Jose, Calif.

But even as “closing deals is becoming more of a challenge,” says Harold Kestenbaum, a franchise attorney in Uniondale, N.Y., franchise companies have to be careful not to alienate existing franchisees when they offer discounts and other incentives to new buyers. “How does it look for the guys who pay the higher price when they see the price is getting lowered?” he asks. Making the situation more sensitive, existing franchisees, especially in the retail and home-service sectors, are being hit by cutbacks in consumer spending.

Doug Disney, president and founder of tile franchiser Tile Outlet Always In Stock Inc., argues that “in a slower economy, you need to be creative with initiatives and ways to increase awareness cialisviagras.com.” As part of that effort, the Rancho Cordova, Calif., company hopes to make it easier for franchisees to qualify for loans. Tile Outlet paid a $2,500 fee and submitted its franchise agreement for review so that it could be added to the Small Business Administration’s preapproved vendor list. Potential franchisees still have to qualify for loans from banks and other lenders based on their credit, assets and other financial metrics, but joining a franchise that has already been reviewed by the SBA gives them a boost. Since Tile Outlet joined the SBA list, three potential franchisees have begun the loan-application process, the company says.

Last month, Tile Outlet also began offering a $2,500 bonus to existing owners who refer potential buyers. As a result, Mr. Disney says, in the past three weeks the franchiser has received two referrals that have begun the application process. Franchisees are “our best advocates because they already have successful stores,” he says.

Earlier this month, Seattle-based Emerald City Smoothie launched a “Buy One, Get One Free” initiative. Franchisees can purchase an 800 to 900-square-foot Emerald City Smoothie store for between $165,000 and $290,000 and get a free kiosk in a gym, airport or small retail space. For franchisees, “it’s a lot less money in terms of development and build-out,” says Rich Folk, the company’s chief executive.

With many banks tightening their lending requirements, Gold’s Gym Franchising LLC of Irving, Texas, is giving prospective franchisees more time to get financing by expanding its development cycle to three years from two. “If we’re happy with the guy as a franchisee and the only thing between him and the Gold’s Gym is that he needs more time to line up the financing, then I think it’s in my interest to do that,” says Keith Albright, senior vice president of franchising.

Filed under: Restaurant News - - - Tags: franchise, tough economy
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McDonald’s: Beverage program still on track
McDonald’s says its new coffee-drink venture has not been derailed by the current banking crisis, despite reports to the contrary. “At McDonald’s, we’re working hard to become our customers’ favorite beverage destination,” McDonald’s said in a written statement. “Our national beverage strategy is on target and progressing as planned.” The Seattle Times

Filed under: Restaurant News - - - Tags: Coffee, hamburger, McDonald's, Starbucks
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The latest issue of the Blue Pages will be mailed out today and you should be receiving them soon.

They are also now available on our web site. Fall 2008 Blue Pages
Be sure to make save the order for for W2s and mail or fax it in today. 2008 W2 Order  Form

All orders received before Oct 31 will receive a 10% discount.
All orders received before Nov 30 will receive a 5% discount.

Remember that all orders must be payed in full before we ship the forms.

Filed under: PayMaster Software - - - Tags: Blue Pages, Order Form, W2
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Of course PayMaster has been able to create the MMREF / EFW2 format for years but this is a reminder to be sure you have an account at SSA.GOV as you won’t be able to send the feds a floppy this year.

Beginning Dec. 1, 2008, filers of 250 or more Forms 1042-S, 1098, 1099, 5498, 8027, or W-2G must file the forms electronically through the FIRE (File Information Returns Electronically) System. After that date, the IRS will no longer accept these returns on magnetic media .

The IRS notes the following advantages to filing electronically:

(1) It’s paperless; no need to file Form 4804, Transmittal of Information Returns Reported Magnetically.
(2) It’s secure (Secure Socket Layer (SSL) 128-bit encryption).
(3) Electronic filers receive an e-mail of file status results within one to two business days after filing.
(4) Electronic filing is easy to use and there is better customer service due to the online availability of the transmitter’s file.
(5) The due date for filing electronically is March 31st, rather than February 28th.

Filed under: Federal News, PayMaster Software, Payroll News - - - Tags: EFW2, SSA
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