Emily Bryson York of the Chicago Tribune reports that the new Royales with Cheese Quarter Pounders will come in three flavors: bacon and cheddar, a more basic lettuce, tomato, and onion, and a spicy version with habañero ranch sauce. Speaking of bacon, McDonald’s is reportedly also swapping out its current bacon for a thicker-cut applewood smoked bacon to bring some heightened texture and class to its burger lineup:

"We've had some feedback from our consumer that our bacon may not have been as high quality or met their expectations but we are just in the process of rolling out a new bacon system wide," Neil Golden, chief marketing officer of McDonald's USA said in an interview. "We feel like that bacon is a fabulous enhancement to many of our products," such as the chain's premium McWraps and chicken sandwiches. 

Of course, the question is: why replace Third Pounders with Quarter Pounders? The obvious answer would be to save money, but a spokesperson for the brand insists that it isn’t all about the bottom line so much as getting back to basics and giving consumers what they want:

[McDonald’s spokesperson Danya] Proud said the burgers were created because the chain has seen sales surge when it revisits core menu items such as the Big Mac and chicken nuggets. McDonald's hasn't done anything with its Quarter Pounder in more than 40 years, she said.

Regardless of motives, they’re happening. The new Quarter Pounders are set to roll out in June.

[SOURCE: Chicago Tribune]

In stepping into this new position, Marc Caira has some seriously large shoes to fill: Paul House has been a part of Tim Hortons since 1985, originally joining the business as vice president of marketing before working his way up to president in 1995 and CEO in 1996.

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But although Caira may not have spent decades coming up through the ranks of Tim Hortons, he is no stranger to the food industry or the brand itself. The National Post notes that, over the course of a nearly four-decade tenure at Nestlé under such titles as CEO of Parmalat North America and Global CEO of Nestlé Professional, Caira has worked closely with Tim Hortons to develop soups and other products.

Caira isn’t walking into the strongest position that the chain has ever been in – this week Tim Hortons posted its first quarterly report of the 2013 fiscal year, revealing a 3 percent drop in net income to 86.2 million Canadian dollars (down from last year’s 88.8 million). But executives for the brand are optimistic that its push south into the United States will ultimately prove successful and help unlock further revenue potential in the future.

Marc Caira will take over officially as CEO starting on July 2, upon which House will then move into a non-executive chairman role.

[SOURCE: Yahoo Finance; National Post]

According to theChicago Tribune, the agency’s fine follows McDonald’s marketing tactics in Brazil back to 2010 when the franchise advertised Happy Meals featuring toys tied in with the movie Avatar – but while it may have been the first time that McDonald’s rolled out targeted Happy Meal advertising, it wasn’t the last:

Marketing activity since then has followed similar patterns, [Procon lawyer Renan Ferraciolli] added, giving the agency grounds to consider additional fines.

Now, $1.6 million over Happy Meals isn’t likely to break the bank and devastate McDonald’s – considering the fact that the company saw $27.6 billion in revenue over the 2012 fiscal year, $1.6 million is practically a drop in the bucket. But Brazil doesn’t intend for this to be the end of their fight against McDonald’s marketing to children, and is already looking into the possibility of adding on those aforementioned additional fines:

"This is not an isolated case," said Procon's top lawyer in Sao Paulo, Renan Ferraciolli. "There's no need to appeal as they do to children without the maturity or the rationality to enter the market as consumers."

 As they add up, it may not be worth McDonald’s while in the long run to keep Happy Meal toys on the menu. But it’s likely that they will start by appealing, necessary measure or not.

[SOURCE: Chicago Tribune; PHOTO CREDIT: McDonald’s]

Over the weekend, Foodbeastbroke the news that a hand-scooped Strawberry Pop-Tart Ice Cream Sandwich had emerged in select Southern California test market locations – specifically the Newport Beach location off Newport Blvd. and Industrial Way. At first it was just a delicious-sounding rumor backed up by a grainy photo of restaurant signage, but before long a Carl’s Jr. spokesperson reached out to the blog to confirm what we already knew in our hearts to be true:

Update: 04/22/2013

A Carl’s Jr. spokesperson has provided us with the following window cling graphic being used in the product’s test markets. As a policy, Carl’s Jr. and Hardee’s does not comment on test products. The only information we got was a confirmation that the Strawberry Pop-Tart Ice Cream Sandwich is indeed being tested at limited number of Carl’s Jr. restaurants.

Developing a product that merges two distinct entities is a smart investment right now. Even if it only works even half as well as Frito-Lay and Taco Bell’s Doritos Locos Taco, that’s still millions upon millions of dollars in profits at stake. Even better is the fact that the product can become a gateway to even more products or branding opportunities. Similar to the new Doritos Locos Tacos-flavored Doritos chips (!) on shelves right now, imagine Carl’s Jr.-Kellogg branded Pop-Tart ice cream sandwiches coming soon to a freezer aisle near you. It’s not just a product – it’s also clever marketing for both brands.

We’ll be waiting with bated breath to see if this new ice cream sandwich does well in the rising Southern California heat and makes its way to menus nationwide. If it succeeds, we expect that the wave of joint venture products is only just beginning.

[SOURCE: Foodbeast via Gawker]

The Wall Street Journal reports that, along with picky Millennials, one of the myriad uphill battles that McDonald’s faces as it claws its way back to the top of the franchise mountain is a mounting dissatisfaction with customer service, which has been described as everything from chaotic to simply broken:

In a webcast McDonald's executives held with franchise owners last month, the company said 1 in 5 customer complaints are related to friendliness issues "and it's increasing," according to a slide from the presentation reviewed by The Wall Street Journal. The webcast identified the top complaint as "rude or unprofessional employees."

One slide said that complaints about speed of service "have increased significantly over the past six months." Another mentioned that customers find service "chaotic."

That isn’t to say that quick service isn’t a crucial part of the quick service restaurant industry – it’s in the name, after all. But the research seems to suggest that trying to maximize speed and turnover during customer service transactions leads to employees sacrificing friendliness in the process.

How will McDonald’s manage to instill that required cheerful demeanor in its employees? No one is sure yet, and spokespeople declined to comment on the matter to the WSJ. But it won’t be easy. Anyone who has ever worked on the cash register end of a retail setting knows how irritating it can be when even customers come in and tell you to cheer up or give them a smile. It’s more serious when the order comes from corporate, but sometimes you have an especially bad day that even world class acting skills can’t match.

Of course,one thing McDonald’s could always do is raise its hourly wages – judging by the growth of the recent Fast Food Forward protest movement, that would almost certainly put a smile on its employees’ faces. But the franchise will likely try other tactics like secret shoppers and bonuses before that’s brought to the table.

[SOURCE: Wall Street Journal via HuffPost]

Businessfriend is one new social media tool that’s hoping to tap into precisely that potential, offering to help businesses bridge the gap between networking and productivity in every sector including the food and beverage industries.

“For me, online networks dealt with inappropriate or undesirable extremes – either too social to help my professional life, or too boring and useless to do me any good,” explains Rhonda Marable, Communications Director at Businessfriend. “Networks were either slapped together for fun or made only as a means of making money for a company, but Businessfriend fills voids and really puts the needs of professionals and companies first.”

That train of thought makes Marable a perfect fit within the Businessfriend team, a team assembled by media entrepreneur Glen White* to solve the problem of developing a functional social media site with executives and businesses in mind.

Where most social networks today focus on marketing and consumer outreach, Businessfriend’s applications – document sharing, public and private groups, and the ability to engage employees directly through a brand page – lend themselves to be envisioned as both a social network and a productivity-increasing business utility.  

“Businessfriend is absolutely capable of being a global intranet for brands,” says Marable. “With employee verification, companies can be directly attached to their employees and organize them into departmental, location, or project groups. Businessfriend allows you to organize and get as specific as you want, in regards to who you contact and which groups see your communications. Individuals can video chat or instant message directly on the platform making nearly all forms of communication possible.” Over time this communicative improvement could help connect flagship offices and far flung branches, franchisors and their franchisees, ultimately build stronger and more mutually productive connections.

Even manufacturers and commodity groups, with less need to reach out to end consumers over the usual social media channels, can find use in Businessfriend’s utilities.

“Unlike other businesses, I think commodities and agribusinesses are unique in the sense that you won't find them on top of each other – there are fewer opportunities to network, share ideas, and communicate trends, developments, and business tips because they don't have the luxury of happy hours and other in-person social events that many businesses take for granted,” Marable notes. “Social media sites are an equalizer for these businesses in that sense: farmers and ranchers can host digital networking events and discussions, as well as share blogs and other articles on business tips, technology innovations, and nurture important business and peer relationships without flying halfway around the world.”

Not that the platform leaves consumers out in the cold – as an example Marable points to the potential for brands to utilize Groups as a way to conduct focus groups or think tanks online across wide demographics, interacting with consumers in a more meaningful way. “I think since Businessfriend is more about the productivity intent, we can fulfill B2B and B2C needs,” she explains. “We're catering to social professionals, so the quality of engagement with these members is going to be higher than on other social platforms. Businessfriend utilities give companies the chance to have two-way communications with consumers that are taking the time to watch them, to attend their events, and to discuss their products and services in groups – because they care, not because they're looking for gimmicks.”

As a fledgling platform, Businessfriend still has a lot of room to grow – at the moment the brand is working on its mobile app and moving into foreign language markets. But as it does grow, it hopes that its user base will grow alongside it and find new ways of using it to help their businesses grow and succeed.

“Social media has indeed changed our world,” says Marable. “”I hope that, with Businessfriend, people can see that at least a few of us are looking to ensure that it's for the better – on purpose.”

*Full disclosure: White is also the executive mind behind the magazine you’re reading right now

Perhaps this shouldn’t come as too large a surprise, considering that Joh. A. Benckiser acquired Caribou Coffee for $340 million in December of 2012 and Peet’s Coffee and Tea for $974 million earlier in the same year. While each coffee chain has its own fans and followers, from a coldly objective point of view it isn’t too hard to envision the logic behind merging the two brands wherever possible – not to mention focusing substantially more attention on the brand that you spent more on to purchase.

Reports indicate that the Minneapolis-based Caribou Coffee will be withdrawing entirely from Ohio, Michigan, Pennsylvania, and Washington DC. On the other hand locations will remain open in its flagship state Minnesota as well as in Iowa, North and South Dakota, western Wisconsin, North Carolina, Kansas, and Colorado.

Illinois will reportedly be hit harder by this decision than any other state, losing 66 locations altogether – Chicago will see fourteen Caribou coffee spots being rebranded as Peet’s Coffee and Tea and an additional two closing down entirely.

While consumers may be hit hard by the news, it’s nothing compared to the employees of closing locations. Huffington Post interviewed one Illinois store manager who notes just how little notice he and his crew were given:

The news came as a shock to Douglas Kwiecinski, manager of a Naperville, Ill. location. Kwiecinski told WGN he was notified of the news during a Friday conference call, offering only nine days notice that he was losing his job.

According to the brand, this drastic move comes after careful introspection on its business strategy and how to grow the business over the long term:

“Over the past few months, we at Caribou have revisited our business strategy, including closely evaluating our performance by market to make decisions that best position us for long-term growth,” the company said in a written statement, according to Consumerist.

It seems strange and even counterintuitive to imagine that shuttering dozens upon dozens of locations nationwide would position a company for growth. But after paying over a billion in total between Caribou Coffee and Peet’s, one would hope that their parent company knows what it’s doing.

[SOURCE: Huffington Post; IMAGE CREDIT: flickr.com/mastermaq]

Spoiler alert: it’s chicken. Boneless chicken, that is. Today the franchise announced to the press that on April 14 it will be introducing boneless, skinless fried chicken as a new option on the KFC menu.  

But isn’t there already boneless chicken at KFC? Are there not sandwiches and tenders and bites? True, but the Associated Press reports that KFC’s newest menu item does in fact differ from the established items – these new deep-fried chicken pieces will be whole muscle pieces filleted off the bone, each one much larger than a chicken strip, and will be available as part of KFC’s meal deals as well as in mixed buckets as a complement to old standby drumsticks and thighs.

So the question is: why boneless? Even if we hadn’t told you right up front, saying “because Millennials” would have been a safe guess and you would have been absolutely right: 

"Younger people don't tend to be fans of bones — they've grown up with nuggets," said KFC spokesman Rick Maynard, referring to people in their 20s and 30s.

We do love our chicken nuggets, that’s for sure, and we do love the convenience of eating on the go without having to stop and gnaw at bones (and without having to figure out to do with those bones when you’re done).

Of course, we figured that’s what the chicken sandwich menu option was for, and there was a time and a place for the juiciness of chicken cooked on the bone. But the market reflects that this preference is growing by leaps and bounds – the Associated Press reports that, according to KFC, four out of five servings of chicken sold in the United States today are boneless. The report also implies that KFC’s loyalty to bone-in chicken up until now may be hurting its sales against all-boneless competitors like Chick-Fil-A and the nuggets and strips available at every major chain.

In fact, if these trends remain unchanged, KFC sees some drastic changes in the future:

Based on customer trends, the chain says bones could eventually disappear from its menu.

Well, if nothing else, at least it will certainly be convenient.

[SOURCE: ABC News]

Salon reports that as many as 400 fast food workers representing a wide swath of franchises and chains – workers from Burger King, McDonald’s, Wendy’s, Domino’s, Papa John’s, and Yum! Brands’ Taco Bell, Pizza Hut and KFC were all expected in attendance – walked off the job this morning, demanding a raise to a living wage of $15 per hour and the right to organize a union without fear of retaliation. Salon spoke with one of these workers, who put the situation of most minimum wage earners in plain visceral perspective for readers who may never have experienced the stress for themselves:

“Obviously, it will piss off our bosses even more than before,” KFC worker Joe Barrera told Salon in a pre-strike interview. Barrera, 22, said that over his seven years in the industry, “we’ve had our complaints, but no one actually spoke out about it … I guess people were finally tired of the disrespect, under-compensation, being overworked, not having steady schedules and times, not having enough hours – basically, being played around with.”

[…]

Barrera, who’s paid the $7.25 minimum wage, said that a decent raise would allow him to stop skipping meals and start pursuing college. “Maybe I could afford to have a girlfriend, take her out on a date …” he added. “All of that money goes right now to just surviving.”

While it’s clear what workers are hoping for out of these strikes, Salon notes that their stated purpose is a little bit different and with good reason – workers on strike must tread lightly or risk being replaced. The one-day-strike tactics for this particular argument are also much different from the tactics employed during the now-legendary Hostess Strike, also with good reason:

Because it’s legal to “permanently replace” workers who just strike in order to win union recognition or higher wages, workers announce that they are striking in protest of violations of labor law by management (if the government finds this to be true, then permanently replacing them becomes illegal – though that doesn’t mean it couldn’t happen anyway). Because modern U.S. strikes are often more about humiliating management than shutting down business, workers go out on strike for a single day rather than walking off the job indefinitely. And rather than waiting until a majority of workers are willing to take the risk of going on strike, organizers mount strikes with a minority of the workforce, in hopes that their courage – and their safe return to work afterward – will inspire more of their co-workers to join in the next time.

In response, the fast food restaurant industry has also gotten involved in this conversation by expressing concern that any increase in the current minimum wage could be detrimental to restaurants’ ability to hire more workers:

Reached over email regarding the Fast Food Forward campaign, National Restaurant Association executive vice president Scott DeFife warned that “Any additional labor cost can negatively impact a restaurant’s ability to hire or maintain jobs.”

But the advent of these protests shows that simply being hired might not be enough when workers still have to worry whether every paycheck will be enough to make ends meet. Salon reports that the strikers converged at one Wendy’s location in Brooklyn and one in Midtown Manhattan, plus a Burger King in Harlem; at 5:30PM, the strikers and others protesting in support plan to converge at Marcus Garvey Park in Harlem and march onward to a predetermined McDonald’s to continue the protest there. Check out the Salon article in full for in-depth details on the situation and what lies ahead for the Fast Food Forward movement. 

[SOURCE: Salon via Buzzfeed; IMAGE CREDIT: flickr.com/beleaveme]

Huffington Post reports that Tim Horton’s new corporate responsibility report for 2013 reflects this decision to phase out gestation grates, which the Canadian breakfast brand seems to have come to after a lot of careful thought and consultation:

"We consulted with our suppliers, the pork industry and other stakeholders on the use of gestation stalls for breeding sows and reviewed their plans throughout 2012. By 2022, we will source pork from suppliers who have made a transition to alternative open housing."

Why ten years though? Why not five years, or one year, or even immediately? The answer to that is that transitioning one’s farm from gestation crates to alternate housing is no easy feat – it’s extremely expensive and time consuming as farmers must redesign and retrofit their barns to meet new standards. Forcing changes immediately would likely require Tim Horton’s to break many (if not all) of its current contracts and find all new producers from which to source their meat, which is a major challenge in and of itself. By setting a timeline, on the other hand, its current suppliers are given the chance to allot the funds and time needed to update their equipment and maintain their business relationships.

Will this be easy? Not necessarily – as the article notes, Tim Horton’s may face some resistance from suppliers who still carry a lot of faith in the current system. But it’s unmistakable that the tides of agricultural practices are changing in many significant ways, and as more companies disavow gestation crate use it’s clear that this is one of them. If the demand is for pork that hasn’t been kept in gestation crates, the supply will have to keep up with the trends to stay successful. At least they have a reasonable timeline in which to make it happen.

[SOURCE: Huffington Post]

The Guardian reports that the Yum! Brands-owned franchise is planning to spend £40 million over the course of this mission. The franchise additionally plans to spend another £40 million on refurbishing 160 of already existing KFC locations in the UK and Ireland, a plan that will be at least partly funded by local franchisees.

This is all news for several reasons. For one thing it is proof positive that, despite the economic trials that have affected businesses globally over the past few years, improvement is on the rise and there is still plenty of room for franchise growth in Europe. The Guardian explains that, even with KFC opening new restaurants in the UK and Ireland at a steady rate of 30 per year on average, the franchise continues to see same-store sales improve on a steady incline:

Low-cost fast food restaurants have been prospering, despite the economic slowdown. McDonalds has reported improving sales in the UK and Domino's pizza delivery service recently reported a 10% improvement in annual profits despite sales growth slowing due to January store closures caused by bad weather.

What’s more, this expansion by KFC has the opportunity to provide a lot of service sector opportunities in the near future. It is expected that the forty new locations KFC intends to open in the UK and Ireland this year will result in the creation of around 1,600 jobs. That’s always a welcome addition to any economy.

[SOURCE: The Guardian via Business First; IMAGE CREDIT: flickr.com/jayneandd]

Arby’s® restaurants are an American institution, renowned for their fresh approach to ingredients and product innovation. Founded in 1964, the brand has enjoyed nearly 50 years of success, due to its ability to change and modernize without losing touch of its core values. Hala Moddelmog took over as President in May 2010 and Food Digital had the opportunity to speak to her about her inspiring career to date and her plans for Arby’s going forward. We spoke about the famous restaurant’s latest advertising campaigns, its product innovation and Hala’s leadership strategy, which have all helped put the brand back on the fast food map.

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Food Digital:Hala, tell us about you career to date. How did you become the President of Arby’s?  

Hala Moddelmog:“It’s funny because Arby’s was my very first job out of grad school. I began my career here in 1981 as a Sales Analyst working on product development and marketing and stayed with the company for three years. I wanted explore my options so went out into the world and did a few other things; I worked in telecommunications for a short time, however after a few years I received a call asking if I would come back to Arby’s as Vice President of Product Development and Strategic Planning. I took the role and stayed with the business for another three years.”

Hala worked at Churches Chicken as Vice President of Marketing for two years and then went on to become President of the Group – a role she held for more than 10 years. She also spent a small portion of her career within the non-profit world, as the President and CEO of the breast cancer foundation, Susan G. Komen for the Cure.

Hala left the foundation after three years and returned to her hometown of Atlanta.

“I took some time out, to see what was out there and the role of President at Arby’s became open. Immediately I was interested and then just a few days later I got a call from the headhunter who was working on the search. I took the role and now I will have been back at Arby’s for three years this coming May.”

FD:So what is it that keeps bringing you back to Arby’s?

HM:“Arby’s was my first exposure to the quick service industry, and there is no doubt that’s where my passion lies. I have spent the majority of my career in the food service industry, and I love the Arby’s brand. Its definitely iconic – but it’s a brand that had lost its way a little bit before I came back.

“The recession disproportionally hit Arby’s, and the brand that in the past was very heavily influenced by innovation and product development, had let that side of the business slide. I felt very compelled to come back this last time because I felt if Arby’s could get back on track with new product innovation then the sky was the limit. The brand just needed a little extra strategic thinking.”

When Hala re-entered the business she realized that Arby’s needed a new management team to turn its ailing fortunes around. Immediately she recruited a new Chief Operating Officer (COO) and Chief Marketing Officer (CMO) who were tasked with taking a deeper strategic look at the business. Hala was adamant that Arby’s needed to re-understand who its core customers were and what they wanted, and then develop new products accordingly.

Hala has already achieved phenomenal success since coming back to Arby’s, reporting nine consecutive quarters of same-store sales growth. Arby’s has also experienced 85 percent growth in profits year-on-year since 2010. 

FD:Since you have been President, what are you greatest achievements at Arby’s?

HM:“I am really proud of the team we now have in place at Arby’s. I am also pleased that we have tripled the number of products in our product development pipeline. We have also unleashed a new advertising campaign based on targeted research into our core customer, something that we refer to as our design target. We went into about 100 of our heavy users’ homes and really obtained a  deep understanding of who our consumer is and what values they share.

“The values our consumers share go reach across many different age groups, many different ethnic groups and many different types of families – and if there is one thing that many of them have in common, its being time-starved and loving the brand. Understanding our core customer has really influenced what direction we take at Arby’s.

“However, the main thing I am proud of is the Arby’s Foundation. The Arby’s Foundation has been in existence for about 25 years but we have revitalised it in recent years. We adopted the ‘No Kid Hungry’ campaign, which is a division of ‘Share Our Strength,’ and we decided to become part of the movement in America to end childhood hunger. This really resonates with our group and in less than two years, we have raised over $5 million for the cause.”

FD:Talk to us about the Arby’s rebrand and logo update.

HM:“We felt like the logo needed a little bit of updating, but when we spoke to our design target they said: ‘Okay you can change your logo, but don’t change it too much and don’t change that hat!’ In America 96 percent of people recognised the hat as Arby’s even without the word ‘Arby’s’ in it, so we listened to our consumers and simply modernised the existing design.”

“Our new advertising campaign is called ‘Slicing Up The Truth About Freshness’. Our research indicated that only about 50 percent of people actually knew that Arby’s slices its meat fresh in the restaurants every day. Furthermore it also indicated that a little over 50 percent believes that Subway slices their meat fresh, which we know they do not.

“We compared ourselves to Subway quite a lot during the first round of advertising; however, the adverts coming out now are going to be more focused on our products vs. the fact that Subway doesn’t slice fresh in-store. That is our thing right now, we want to make sure that everyone who goes into an Arby’s knows they are going to get a freshly prepared sandwich.”

Arby's rebranding exercise has been very popular with customers

FD:Have you found social media to be an asset when reaching out to consumers?         

HM:Absolutely and let me tell you, when I first came here, back in May 2010, we literally only had 42,000 Facebook fans, I mean I was aghast, and now we have recently reached our two millionth Facebook fan. So we have really come on leaps and bounds in this area. Importantly, our fans are also talking about our ‘No Kid Hungry’ partnership and even though the vast majority of our money is raised in the restaurants, customers can also donate to the campaign via the web and social channels, including Four Square.

FD:What new changes and products can we expect in the future?

HM:“Last year we rolled out our Hot Turkey Roasters platform, and we would like to be to turkey, as we are to roast beef! Turkey is a growing protein and we slice our turkey fresh in the restaurant every day. Our new Hot Turkey Roaster Turkey products are doing well in tests so I expect to see a lot more turkey products available at Arby’s this year; probably a Hot Turkey Roaster and a new turkey product within our Market Fresh®line. The new products will also feature freshly slices salad and vegetables because if our meat is fleshly sliced then the same should be said of our salads. We want to send out the right messages to people.”

“The other two areas that we are working on are the Snack ‘N Save menu and our beverage line up.”

FD:Sum up what is key to success at Arby’s

HM:“Our overall goal is to grow profitable transactions, and that is a very clinical thing to say, but that is what we work on every day, day-in and day-out. However, having a solid understanding of our design target and their values, as well as focusing Arby’s innovation, is really the key to our complete turn around and growth of those profitable transactions.”

According to Ad Age, McDonald’s is considered the #1 fast food franchise in the United States – but it doesn’t even rank within the Top Ten among that magical age group between 18 and 32. It seems that young adults just aren’t as down with hamburgers as they once were, opting instead for fresher options like sandwiches and burritos. In particular, McDonald’s sees Subway as a major threat. Why? Because, when asked, Millennials told them as much directly:

Said the memo: "Our customers are consistently telling us, particularly millennials, they expect variety, more choices, customization and their ability to be able to personalize their food experience."

The importance of this ability is clear in the McDonald's memo. "In fact, they have told us that if we did not offer McWrap, 22% of these incremental customers would have gone to Subway."

That’s pretty solid evidence to target Subway directly. It’s no wonder that, in the memo, McDonald’s referred to its new McWrap – which, as a tortilla full of lettuce and tomato and crispy chicken, could potentially satisfy cravings for both burrito and sandwich fixins – as a “Subway Buster.”

But whether it works remains to be seen. Eventually it will all come down to whether or not the taste lives up to the expectations.

[SOURCE: Ad Age via Business Insider]

The Daily Beast reports that Taco Bell’s Doritos Locos taco launch is largely responsible for the franchise’s impressive sales growth over the last year, which outpaced a number of other major players in the franchise field like McDonald’s and co-Yum! Brands denizen KFC:

“It has been the biggest launch in Taco Bell history,” said Greg Creed, chief executive officer of Taco Bell, which saw same-store sales rise 8 percent in 2012. “Last year, we added 15,000 people to handle the growth.”

Not to leave the Taco Bell Cantina menu out in the cold – launched last year as a budget-conscious alternative to fresh-focused fast food choices like Chipotle Mexican Grill or Rubio’s, the Cantina menu has also enticed its own fair share of new customer interest. But it’s the priced-to-move Doritos Locos taco that has provided the price point and the sheer novelty to boost Taco Bell to new heights. That massive sales growth should only continue with the recent launch of the Cool Ranch Doritos Locos taco earlier this month, and the brand is counting on it to lead to even more jobs in the future:

In the meantime, Taco Bell is relying on its alliance with Frito-Lay for growth. “We believe we can add 2,000 new restaurants in the next 10 years, because what we have is proprietary and exclusive. Nobody else can make a Cool Ranch Doritos taco. And that’s just in the U.S.,” says Creed.

Not bad for one little taco idea that was just crazy enough to work.

[SOURCE: The Daily Beast via The Daily Mail]

Franchising is a Whole New Ball Game

If there’s one thing that a business owner should keep in mind when transitioning their restaurant to a franchise, it’s that running a franchise is entirely different from running a standalone establishment – or even a company-owned chain.

“They have to realize that they’re going to go into a new business,” says Shelton. “That’s really the first thing, is to realize they’re going to go through this additional growth period – both business-wise, as they expand their brand, but also from a personal standpoint. They’re going to need to learn about how to become a franchisor and what that really means and what steps that takes.”

Get Help, Not Just Paperwork

When navigating a new business model, getting educated is vital. While there’s nothing wrong with doing it all yourself, Shelton points out that a guiding hand can help novice franchisors take the right steps when it comes to the drier business functions like drafting franchise contracts.

“They really need somebody that will not just dump all the paperwork on them and say here you go, good luck! – there are a lot of document farm type companies out there that have templates and just go ‘here, fill this out,’ and you inadvertently create a lot of risk for the franchise owner when you do that,” Shelton explains. “If they put too much control on their franchisees, they could inadvertently create liability for themselves. That’s huge in the restaurant industry, because they’re open to the public and so many patrons that come in and out. Slip and falls, food poisoning – there are so many things that a franchisor needs to make sure they insulate themselves from so that the liability does truly lie where it should: with the franchisee.”

Choose Your Vendors Well

Whether you’re a fledgling business or a chain entering the franchising process, how you spend your capital can make or break your business. Shelton notes that it is vital to find suppliers and business partners who have your best interests in mind.

“A really key component is making sure that they choose the right suppliers, whether it’s a franchising attorney or a marketing company or vendors – that they’re doing it in such a way that they’re getting the best bang for the buck,” says Shelton. “We require our franchisors to make monthly payments, we will not allow them to pay up front, because they need that cash flow for marketing and advertising and to be able to roll out that brand once it’s created. It’s the same thing goes with franchise brokers: you need to make sure those agreements reduce your financial risk of it in addition to your liability risk, because you can have the best brand in the world, but if you pay too much to get your concept branded and sold, you’re not going to be there in a year or two to support your franchisees.”

Get Involved with Associations

Just as a new franchise owner can benefit from the input of a franchise attorney, one can benefit even further from getting involved with associations built to help advance your industry. “We recommend that all of our clients join the International Franchise Association (IFA),” says Shelton. “For new franchisors it’s a two year membership to get started, but you pay half one year and half the next – like us, they believe that it’s important to reduce cash flow expenses as you grow. [The IFA] has a lot of strategic partners as well, so in many cases that gets discounts on other services and products, reduced booth pricing and free advertising at shows and conventions, so it pays for itself to join.”

But Shelton quickly points out that there is much more to joining an association than the discounts. As was mentioned before, education is everything for a new franchisor just starting out – and one of the best ways to avoid making mistakes on your own path is by learning from veterans who have been through it themselves.  Eligibility to attend the association’s national franchising conventions, where thousands of those veterans congregate each year, makes IFA membership even more appealing.

“The thing that makes our industry unique is that once we’re in those forums we’re all very friendly,” notes Shelton. “Every one of the franchisors has been in the exact same place – they’ve all had to get their first franchisee as they grew. So you might have a brand new chicken place sitting next to KFC, and they can literally ask: when you had only fifteen franchises, and you needed to add personnel but you didn’t have any cash flow, how did you get through it? What are some tricks of the trade that I can use and learn from you as I grow? And they answer and have conversations. They might walk out the door and be competitors again, but inside they are comrades and are having the same fight, just at different levels. So it’s a huge educational purpose to join in addition to the financial discounts, because it is a new business. They have no idea how to be a franchisor – they’ve never done it before.”

Always Be Evaluating

Above all, when it comes to avoiding risk while beginning a franchise, the most important thing to remember is: stay on top of the transition and be forever vigilant. “It’s constant evaluation and making sure that it’s not just [a new franchisor’s] eyeballs looking at their system,” says Shelton. “They’re asking questions, they’re involved in franchise associations, they’re constantly improving themselves and educating themselves on their new business – which is franchising.”

Bloomberg reports that McDonald’s is already sustainability-minded with its coffee, sourcing its Arabica beans from Rainforest Alliance Certified growers in Guatemala, Colombia, Brazil, and other countries where coffee is a hot commodity. Nevertheless, the investment aims to improve the brand’s supply by helping 13,000 coffee growers in Guatemala produce a more sustainable and higher grade coffee bean. The investment should also make growers better equipped to thwart crop-damaging blights like leaf rust.  

In an official statement, McDonald’s Vice President of Sustainability Susan Forsell stated:

“Investing in both certification and sustainable agriculture training addresses the immediate need to assist farmers today, expands capacity for greater sustainable coffee production in the future and helps assure our customers we will continue to provide the taste profile they have grown to love and expect from McDonald’s.”

As plenty of inquiring minds likely want to know, a spokesperson also saw fit to reiterate that McDonald’s still has no immediate plans to launch its coffee on the retail market in the United States. But the report does point out that, even if a home-game retail option never comes to fruition, coffee still accounts for a sizable chunk of the franchise’s revenue stream at seven percent of U.S. sales. The powers that be at McDonald’s clearly have coffee on their mind as another way to strengthen their sales further in the coming years.

[SOURCE: Bloomberg; PHOTO CREDIT: flickr/ineedcoffee.com]

The Associated Press reports that not only is McDonald’s for sure taking those aforementioned items off the menus, it is also taking a long hard look at its Angus Third Pounders:

The Oak Brook, Ill.-based company said in an emailed statement that it is "evaluating options as it relates to the Angus Third Pounders," which were introduced in 2009. The Selects chicken fingers were introduced in 2004 and the Fruit & Walnut Salad was introduced in 2005.

Earlier this week, the Kentucky New Era quoted a McDonald's franchisee's Facebook post noting the discontinuation of the three items.

"Sorry if one of these were your favorite, they just did not sell well enough nationally," the site quoted McEnaney Enterprises as saying. That post has since been removed.

Honestly, we would be surprised if too many consumers were seriously mourning the loss of Chicken Selects and Angus Third Pounders. McDonald’s strong point has always been its core menu, its Chicken Nuggets and its Double Cheeseburgers and its Egg McMufins and its Dollar Menu lineup. That’s what people have kept coming back for over the decades, and in the article it seems like McDonald’s franchise operators agree:

In the meantime, some McDonald's operators may welcome the company's plans to stop serving some items.

"The menu at McDonald's has gotten so broad and so jumbled that nothing sells in large numbers," said Richard Adams, a former McDonald's franchisee who now consults for franchisees. "This business was built on simplicity, and that's kind of gone out of the window in the last decade."

McDonald’s has also had a lot of luck with its LTOs – while it floundered as a full-time menu item, the McRib really blossomed and came into its own with a passionate fan base as soon as its availability was cut back to once a year. Perhaps by paring down its daily menu to the basics and creating some good old fashioned limited time urgency, McDonald’s can look forward to a more prosperous 2013.

[SOURCE: U.S. News and World Report]

McDonald’s partnered with Finland-based wireless solutions company PowerKiss Ltd. to bring the wireless charging technology to its test market locations. According to a press release launched by PowerKiss on Sunday, the stations are based on Qi technology standards and are both simple and user-friendly – all a McDonald’s patron has to do is set their phone on their table while eating to reap the wireless charging benefits. The release also explains that even patrons with phones that are not Qi-ready can take advantage of the service by plugging their phone into a nearby PowerKiss Ring.

Representatives from both McDonald’s and PowerKiss expressed excitement about this new experiment:

“Wireless charging will be seamlessly integrated into selected table tops of the pilot restaurants. It is hygienic, safe and unobtrusive, but at the same time also functional, aesthetic and innovative. Therefore it follows McDonald’s Europe interior philosophy very well,” says Eric Bourgeois, ERDDS (European Restaurant Development and Design Studio), Senior Director, McDonald’s Europe. “It’s always important for us to create premium value for our mobile customers. The PowerKiss wireless charging solution fits very well into this thinking.”

“Wireless charging is a rapidly growing technology, which significantly enhances the mobile user experience within all customer groups, from teenagers to families and businessmen. We are excited to enter the wireless world together with the industry leader McDonald’s Europe,” says PowerKiss CEO Mats Wolontis.

While the press release didn't go into how much McDonald's has invested financially to launch these test wireless charging stations, equipping new technology is rarely cheap. But it's the kind of technology that ends up paying for itself: compared to coffee shops and restaurants where patrons have to jockey for position around sparsely placed electrical outlets, this service could give McDonald's a serious advantage as an appealing option for busy people who need a quick recharge (and a burger while they're waiting).

For now this service is only being offered within the McDonald’s Europe market, and only in select locations at that. But – much like the Spicy Paneer burger and Happy Meals that promote literacy – this is one regional promotion we hope McDonald’s will eventually see fit to expand to all of its franchise locations worldwide.

[SOURCE: PowerKiss via SlashGear; PHOTO CREDIT: pcruciatti / Shutterstock.com]

Taco Bell dropped the “out of the bag” news across all of its social media channels (including on Vine, because Taco Bell is seriously up there when it comes to cutting edge social media savvy) as well as through an official press release with a message direct from Taco Bell CEO Greg Creed:

“There has been enormous interest in the new Cool Ranch flavor of Doritos Locos Tacos and people are wondering why it took so long,” said Greg Creed, chief executive officer, Taco Bell Corp. “Originally we had planned to launch the Cool Ranch flavor in the same year as the introduction of Doritos Locos Tacos. However, the demand for Nacho Cheese Doritos Locos Tacos was so strong that we worked closely with our partner Frito-Lay to increase our capacity and meet the needs of both Doritos Cool Ranch and Nacho Cheese fans.” 

Taco Bell also warns that it’s planning to support the new Cool Ranch Doritos Locos Tacos through “the largest marketing campaign in [the brand’s] history, topping the launch of the original Nacho Cheese Doritos Locos Tacos.” Considering that the Nacho Cheese Doritos Locos taco train went as far as airlifting 10,000 Doritos Locos Tacos to a town in Alaska, we’re anticipating the brand’s next marketing endeavors with bated breath.

Speaking of breath, specifically breath that smells like Cool Ranch Doritos, the only question left to speculate on is: how are they going to taste? Huffington Post has its reservations:

Amid all the feverish speculation about the release, one thing seems to have gotten a little lost: the actual taste of the taco. Cool Ranch, with its ambiguously sour flavor palate, doesn't meld as perfectly with the taste of ground beef, iceberg and shredded cheddar cheese as the original Nacho Cheese flavor does.

To that we say: nonsense. In fact, our biggest complaint about the Nacho Cheese Doritos Locos Taco was that the nacho cheese flavor blended so well with the beef’n’cheese flavors of the taco that it really didn’t add much to what was already there. We are downright craving the cool, sour cream-like contrast that Cool Ranch Doritos promise to provide.

Buzzfeed is backing us up on the “okay” theory as well, and with actual evidence to boot. Buzzfeed staffer Ryan Broderick was invited to a special Cool Ranch Doritos Locos Taco tasting in Manhattan, and the report was that A.) they taste like Cool Ranch Doritos plus a Taco Bell taco…

Seriously, that's it. What were you expecting?

…and B.) that’s not a bad thing:

Definitely better than the nacho cheese one, though.

It’s a bit of guarded praise at best, to be sure. But we’re still eager to try it out and make that final decision for ourselves as soon as we’re able. The whole thing also gives us hope that we’re one step closer to our ultimate dream of a spicy Salsa Verde taco. Make it happen, Taco Bell. Make it happen.

[SOURCE: Taco Bell; Huffington Post; Buzzfeed; PHOTO CREDIT: Taco Bell]

According to the study, which looked at profits across 21 major restaurant chains and franchises from McDonald’s and Arby’s to IHOP and Red Lobster, restaurants that offered low-calorie choices (mains under 500 calories and sides under 150 calories) saw a 9 percent sales increase between 2006 and 2011. On the other hand, “traditional” restaurant sales dropped 16 percent over the same period of time. What’s more, French fry sales are in decline overall.

An important point that the study makes is that this growth doesn’t entirely hinge on salads, as consumers are also rewarding restaurants that offer meals with smaller and more manageable portions:

A former food industry executive at companies like Coca-Cola and General Mills, Cardello is of the belief that badgering people about eating healthy isn't necessarily the only way — or the best way — to solve the nation's obesity crisis.

"We found some good performance in restaurants that were selling smaller-portion chicken sandwiches," Cardello says. Even if that's a fried chicken sandwich, he notes, smaller means fewer calories. And for the restaurants, "You don't give up profits by doing that."

Why is this study important? It’s because it gives businesses a whole other incentive to think about changing up their menus to include healthier options. After all, changing your menu is a big investment of time and funding – and when your customers are coming back again and again for your triple bypass cheeseburgers, it’s not too out there to have reservations and concerns that any healthier items might be costly non-starters. But the study shows businesses that thinking about calories certainly isn’t hurting the average chain restaurant’s pocketbook, and that’s an important conclusion to draw:

"The restaurant industry as a whole is a very show-me industry; show me why I should change." He knows he's not going to convert the chains to being public-health advocates. But now, the chains will know that they should "get with the program, or you leave money on the table."

Will the results of this study change the way any restaurants do business or plan their menus? Only time will tell, but it certainly won’t hurt. Check out the study in full here.

[SOURCE: NPR]