1996 Ad

Nation's Restaurant News, Dec 23, 1996

By anybody's yardstick, 1996 certainly measured up to be a dramatic 12 months.

The year commenced with "the storm of the century" burying operators on the Eastern Seaboard under mountains of snow and ended with the American voting public raining all over Bob Dole's presidential parade.

Players in the burgeoning entertainment niche raised the curtain on even more new concept themes, while several prominent operators testing the uncertain waters of home-meal replacement decided to pull the plug.

Quick-serve and dinner-house chains fought the value wars on Main Street and Wall Street as the trend toward consolidation continued in the noncommercial segment.

It was "the year of the grown-up" as McDonald's debuted the Arch Deluxe line and "the year of the schmear" as bagel chains spread their brands across the country.

It was the year Taco Bell "bought" the Liberty Bell and the year another kind of bell finally tolled for most of the Roy Rogers chain.

From the best of times to the worst of times, the industry had its ups and its downs. So grab a seat and turn the page as Nation's Restaurant News recaps 1996: The Year in Review ... Was it coincidence or the National Restaurant Association's flair for the dramatic that Herman Cain was named the full-time chief executive and president of the NRA just two days after President Clinton won a second term?

In trouncing Bob Dole at the polls, Clinton probably thought he had seen the last of his archnemesis from the land of foodservice, and there'd be no more nationally televised dressing downs of the White House's proposed policies.

However, in making the "Herminator" the industry's standard bearer, the NRA let Clinton know he had another thing coming if he thought his victory was a ticket to Easy Street. The outcome of the presidential elections should have been the biggest story of the year in an industry that worked so hard to secure a different result.

Nevertheless, 1996 may be remembered longer as the year when the restaurant division of mighty PepsiCo blinked; when the previous successes of innovators like John Martin were darkened by reappointments to less-strategic roles; when dual branding reached a fever pitch; when the bagel segment evolved into a $2 billion industry, igniting some $500 million in merger and acquisition activity; and when the once-imperiled CKE Restaurants zoomed into the role of an industry, powerhouse, single-handedly saving the double-drive-thru segment from extinction.

Those developments were just a few of the events that rocked the restaurant world in 1996. Here's a month-by-month playback of a few other memorable stories.

JANUARY

Terrible weather would be the big news story as the New Year began. A blizzard blew up the Eastern Seaboard just a week into 1996 and buried foodservice sales in one of the most brutal winter storms recorded this century. From Georgia to Maine, snow accumulations as high as 3 feet shut schools, airports and even major highways - a first for many states. Au Bon Pain, Uno Corp., Back Bay Restaurant Group and other operators whose core revenues are made in the Northeast were hammered.

Planet Hollywood's efforts to become a multibrand player in the specialty-theme restaurant segment came to fruition. Just days before 1995 ended, Planet Hollywood launched the Official All-Star Cafe in New York's Times Square, which, at $13 million, became one of the highest single-unit investments in New York in recent years. Like Planet Hollywood, which used movie superstars as investor-spokespersons, the All-Star borrowed from the same playbook in recruiting some of the world's most recognized athletes to fulfill the same celebrity roles.

Brinker International and Phil Romano raised a few eyebrows with the launch of Eatzi's in Dallas. The concept carried home-meal replacement to an upscale height by fusing the eclecticism of a gourmet delicatessen with the refinement of a specialty food store. "We want to take people from the restaurants and to take people from the grocery stores," Romano said in describing his battle strategy.

Few concept adjustments would be as big in January, indeed in the entire year, as Hardee's decision to dump its long-ailing Roy Rogers division. Almost five years to the month since buying the once-600-unit Roy Rogers from Marriott Corp. for $345 million, Hardee's said it would sell all company-owned units, about 200 stores, mostly in the Washington-Baltimore corridor. The remaining franchisees in the system operated fewer than 100 stores in total.

Another company that divested a subsidiary in January in order to shore up the performance of its core concept was Chart House Enterprises Inc., which put its 17-unit Islands concept on the sales block. "Islands performed well, but Chart House is the heart of our company and we felt that was where we should concentrate our efforts," said Harold Gaubert, chief financial officer, in explaining the decision.

Flagstar followed suit, disposing of its Volume Services Inc., the stadium-concessions subsidiary, to a group led by the division's management and Blackstone Capital Partners II for $75 million.