McDonald’s Easterbrook – “the UK is our major market pacesetter”: McDonald’s chief executive Steve Easterbrook has described the UK as the company’s “major market pacesetter” and “far along” four turnaround phases he has identified to improve overall company performance around the world. In a video outlining his plans released yesterday, he said: “The UK is our major market pacesetter with eight consecutive years of like-for-like sales, operating income and franchisee cashflow increases. (There is) strong alignment among franchisee, suppliers and the company (with) an emphasis on food quality and progressive employment practices. (The UK has) insightful market analysis and is effective in identifying and quantifying attractive segments for growth, with continuous improvements in restaurant operations.” Easterbrook, who reported McDonald’s serves 69 million customers a day, plans to move 3,500 restaurants from managed to franchised by 2018, meaning franchised sites will account for 90% of the total number of company restaurants, up from the current 81%. Previously, the company planned to refranchise 1,500 sites. Easterbrook, who argued that the world “had changed faster outside the business than inside it” in the past five years, said there would be $300m of cash savings each year by the end of 2017, while the company would still be opening 1,000 restaurants a year. He also reported that the company began a delivery trial in New York yesterday involving 88 sites.
 
Call for legislation in US after survey reveals high levels of franchisee dissatisfaction: More than half of foodservice franchisees in the United States struggle to make a decent living, and nearly two thirds would not recommend investing in their franchise system, according to a survey in the US sponsored by a coalition of unions pushing to reform the franchise business model. In addition, two in five – 42% – of franchisees surveyed were dissatisfied with their franchise system. The survey was conducted for the coalition Change to Win by FranchiseGrades.com, which surveyed more than 1,100 operators over a one-month period in February and March. Keith Miller, chairman of the Coalition of Franchisee Associations and the owner of three Subway outlets, said: “The results of the poll highlight the need for legislation to reform our industry. CFA has been active in legislation to protect the independent contractor status of franchisees. Franchisees, as a class, are the largest investors in franchising, and as such should be treated as co-investors in their respective brands.” Change to Win is a coalition of unions pushing for higher wages and working conditions in various industries. It includes the Service Employees International Union, which is lending its weight to legislation in California that would provide franchisees with stronger protections against terminations and non-renewals by franchisors.

Rick Stein – red tape is stopping us buying fish locally: The chef and restaurant owner Rick Stein has hit out at the red tape around quotas that he says stop him sourcing local fish at one of his new restaurant in Cornwall. Stein opened his ninth venue five months ago, in Porthleven, which specialises in locally caught species. However, he says, the restaurant has faced constant challenges by all the barriers designed to protect fish quotas. Stein said he was bogged down with so much paperwork and lengthy waiting times that the restaurant has struggled to get any fish directly from the town's harbour. He said: "In my day, you just went straight to the boats. I didn't realise there was all this paperwork involved now. All I say is that we have to buy local fish. If you go round the restaurants tasting food, you'll soon know the ones that use fresh fish." To cope with the shortfall, Stein said, he resorted to buying fish from Newlyn, which is 14 miles away.
 
UK food and drink manufacturing a 'national asset': A dedicated, industry and government-led food and drink manufacturing council would unlock huge shared value for a "world-leading" industrial sector, society and the UK economy, delegates heard at the Food and Drink Manufacturers’ Dinner last Thursday. UK food and drink manufacturing is a national asset, employing around 400,000 across the UK and contributing annually £21.5bn of gross value added to the national economy, delegates were told. Dame Fiona Kendrick, chief executive of Nestle UK & Ireland, who became president of the federation in December and also spoke at the event said: “We are a hugely diverse sector and I want our needs to be better understood. More than 95% of our businesses are SMEs, rooted in their communities and helping to drive both growth and innovation in the sector. We are calling on the next government to work with us through a dedicated food and drink manufacturing council. By working in partnership, in the same way the automotive and aerospace industries do, decision-makers will understand our challenges and help provide the right support to boost our productivity, drive exports and turn creative ideas into brand new, world-class products.”
 
Better burger brand shows McDonald’s how it done with 12.6% like-for-like increase: The American fast burger chain Habit Burger Grill has reported a 12.6% increase in like-for-like sales for the first quarter ended 31 March. Russ Bendel, chief executive of The Habit Restaurants, said: “We are pleased to have delivered another strong quarter of operating results for the first quarter, resulting in our 45th consecutive quarter of comparable sales growth. Our broad menu of high-quality, fresh ingredients, our comfortable and current atmosphere in our stores, and a strong operating culture continues to differentiate us from others in the fast-casual segment.” Revenue rose 44% to $54.6m from $37.8m in the same quarter last year. The 12.8% increase in like-for-like sales was driven by a 6.8% increase in transactions and a 5.8% increase in average spend per head. The company opened four restaurants during the quarter, for a total of 113 company-owned and one licensed location. It plans to open 26 to 28 new restaurants this financial year.

British Street Food visits Oxford: The British Street Food Festival hosted Oxford’s Street Food Festival in the grounds of Oxford Castle over the weekend. Tasting portions of the food at the festival cost £3, and a full dish cost £6. The public were encouraged to vote for the food they like most. By downloading the British Street Food app they could vote for their favourite stalls for the 2015 British Street Food Awards. Winners will go on to compete with three other regions at the finals to be staged in London during September.
 
Legal update: Solicitor John Gaunt & Partners produces a useful licensing update – this useful monthly update is being issued later today but is available to preview here: LINK
 

Company News:

Top vegetarian restaurant 1847 launches Kickstarter campaign: The vegetarian restaurant brand 1847 has launched a crowdfunding campaign on Kickstarter to raise £60,000 to open a site in Liverpool to add to existing restaurants in Manchester and Birmingham. Owner Damien Davenport, who won Cook Vegetarian magazine's Best Vegetarian Restaurant Outside London title in 2014, also wants to establish a new cookery school and launch 1847 Pantry, a range of vegetarian takeaway meals. As of yesterday morning, 27 investors had pledged £4,434. Davenport told Manchester Confidential: "We've been trading successfully for five years and have managed to grow organically to two sites in Manchester and Birmingham. But we've still found it difficult to secure traditional bank lending. We were offered investment last year but they wanted to take half of the business. We've seen what other restaurants like Sticky Walnut can do with crowdfunding and we think it's achievable for 1847. I think being a vegetarian restaurant, there's already a strong community out there," he says: "We've looked at the competition and we're sure that a city as big as Liverpool would benefit from an 1847. We've identified potential sites, we're ready to go – we just need our community to back us. If we were successful in raising more than £60,000), the money would be used to plan for our fourth site.

Whiting & Hammond secures eighth site, plans £750,000 co-investment with Star Pubs & Bars: Whiting & Hammond, the gastro-pub operator led by Brian Whiting, has secured its eighth pub site, the Blue Ball in Walton on the Hill, Surrey, a Star Pubs & Bars site which will undergo a £750,000 co-investment. The pub has been closed for two years and, last year, was considered by Peter Linacre’s New Pub Company as a ninth site after it added the Telegraph on Putney Hill in south west London to its estate. It is understood that New Pub Company decided it would focus on its existing estate, which includes seven Star Pubs and Bars sites, leaving the way clear for W&H. Whiting told Propel: “The site has been closed for over two years so it’s in a pretty poor state. We are adding an extension and putting in a top kitchen on the first floor of the building along long with three huts in the garden for alfresco dining all year round. If all goes well we will be open by mid-August. It’s the first time W&H has worked with Star Pubs and we are looking forward to working closely together. Walton on the Hill is a little out of our heartland. However, we have been very keen to move into Surrey and are confident we have found the right spot. This will take us back to eight sites and we have a site in mind for later in the year growing the business to nine.” Last week, Propel reported that Whiting & Hammond's turnover passed through £10m in its most recent financial year.
 
TLC Inns – fourth Grand Central opening has broken all records, in talks for fifth site: TLC Inns, the pub and restaurant operator led by Steve and Jo Haslam, has reported that its fourth Grand Central Bar & Grill opening, in Ipswich, has broken company records for an opening week, with sales topping £50,000 even with the team holding back so that capacity did not exceed 75%. Steve Haslam told Propel: “Both food and wet sales beat all previous opening weeks for pubs and Grand Centrals, with wet sales exceeding any wet sales ever achieved at any Grand Central site in any week. Dayparts, including breakfast, have been stronger than anticipated, with evenings being very buoyant with many guests being unable to get a table. Future bookings are flooding in, and corporate interest for larger parties is higher than we have ever experienced. We have maintained a good level of service but suffered major IT failure and the collapse of a chef during our peak on Saturday night, which lead to some negative feedback. However, the team were immense in recovering as quickly as possible from this. We have been very surprised by the level of cocktail sales, again breaking records, with nearly 500 sold. On the whole, we are really pleased with the positive feedback from our guests, who have been genuinely excited by our opening. We are now in early stage discussions to secure another site for Grand Central, and if successful this will be our highest profile site to date – discussions we hope will lead to a deal within the next couple of weeks, if terms can be agreed. We would anticipate further sites in this financial year, after our results, reported recently, showed solid growth. Ebitda is expected to grow with our new Grand Central to £1.5 million in the current financial year. This could possibly exceed £2m if we secure the sites we are targeting.”
 
Burger & Lobster bags prime Soho site: A prime slot in Soho, Central London has been snapped up by Burger & Lobster as it continues its expansion programme. The new outlet is just down the street from its Dean Street base and will probably operate as an up-market takeaway. The brand now has eight sites, with a branch in Cardiff another planned for Threadneedle Street in the City. Sammy Weinbaum, of the property lease specialist CDG Leisure, who handled the sale, sais: “Lobster restaurants are the growth factor in London, and their success is continuing with this new site.” The site was formerly a bubble tea shop.

BrewDog attracts hundreds of investors from six mainland European countries: The Scottish brewer and retailer BrewDog is reporting that its latest £25m fund-raising has attracted hundreds of investors from European mainland countries. The company has produced a colour-coded map showing when investors in its latest round of fund-raising are based. It shows that France, Germany, Switzerland, Norway and Finland have all produced between 100 and 499 investors, with Sweden producing between 500 and 999 investors. The UK has produced more than 1,000 investors already.

YO! Sushi opens first two new US locations under franchise: YO! Sushi has opened two locations in the United States under its new franchise agreement. The restaurants opened at malls in Sarasota, Florida and Paramus, New Jersey. The 1,700-plus sq ft YO! Sushi in Sarasota seats 60 and the 2,200 sq ft outlet in Paramus seats 75. YO! Sushi will also open in Tampa, Florida and Short Hills, New Jersey, in the autumn. The new openings represent a fresh start for YO! Sushi in the US after a site in Washington under a different franchise partner, closed last year

Gaucho launches its own beer: Gaucho Restaurant Group has introduced its own beer. The Rubia Pilsener, brewed exclusively for Gaucho, has been created in a joint venture between Gaucho Group bar manager Ian O’Reilly and the Eichbaum Brewery in Mannheim, Baden-Württemberg. O’Reilly worked in Germany with the brewery to create a crisp beer with body and bite: He said: “We wanted a beer that is easy to drink and enjoy during those sunnier afternoons and evenings. The food we serve at Gaucho is of the highest quality and our aim was to create a beer of equal quality that would really compliment our menu as well as being perfect for our guests to enjoy on its own." Of the black, silver and gold bottle label, O’Reilly: "It had to be something that looked smart and elegant, representing the elegance and glamour of Gaucho."
 
PappadamS expands into Swindon: The Indian restaurant brand PappadamS has opened in Swindon, taking the site of the long-closed Italian restaurant La Dolce Vita at the corner of Groundwell Road and Clarence Street, close to the Wyvern Theatre and the new Regent Circus leisure complex. Rijo John and Robby George, from the southern Indian state of Kerala, opened the first PappadamS in Reading in 2011. PR and event manager Daniel J Webb said: “I’m sure that many will agree, it’s about time the old La Dolce Vita unit was occupied, and with the Regent Circus doing so well, this is prime placement for any restaurant looking for success in the town.”

Manchester freehold housing Living Room, Botanist and La Tasca on the market for £7.5m: A three-storey building which houses La Tasca, The Botanist and The Living Room in Deansgate, Manchester is on the market with a £7.5m price tag, producing a net initial yield of 5.17%. Part of the site, 76-78 Deansgate, is a 35,000 sq ft property with around 10,000 sq ft let to New World Trading Company's The Botanist, which took the former Label unit and opened after a £1.5m refurbishment last August. La Tasca operates from a 7,000 sq ft unit. While the upper floors, totalling 17,000 sq ft, were recently vacated by ABA Leisure, which used the site for the Baby Blue nightclub. Next door, 80 Deansgate, which is occupied by The Living Room, is also part of the freehold ownership. CBRE and Jenics, which are marketing the building on behalf of the owner, La Roque Trust Company are suggesting that the vacant upper floors have potential for alternative uses such as a hostel, bar, gym or other leisure activity. Restaurant and bar operators nearby include San Carlo, Cafe Rouge, Cote, Las Iguanas, Cicchetti, Patisserie Valerie, La Vina, Gaucho Grill and Bella Italia.

Truffle restaurant Tartufi and Friends to open in Harrods: Tartufi & Friends' truffle lounge will open its doors at the Harrods department store in Knightsbridge this month. It will be serving dishes made with fresh truffles in season and offering a selection of gourmet take-away products branded Tartufi & Friends. The area, designed by the Italian architect, Laura Franco, will be on the lower ground floor of the store, alongside the wine shop and cigar room. All dishes will be made with Tartufi & Friends products and served with fresh truffles. Customers will also be able to purchase fresh truffles as well as packaged foods from the Tartufi & Friends range, including the limited edition extra virgin olive oil with white truffle, truffle-infused chocolates, truffle honeys, truffle salts and condiments. Tartufi & Friends has stores in Milan and Rome,.
 
Whitbread – 'We’ve got £700m to spend this year on property': Whitbread has told property sellers it is determined to move quickly to secure prime freeholds sites for the expansion of Premier Inn, and has a capex budget of £700m. Its recent acquisitions at 21 Tothill Street and 15 Dacre Street in Victoria, Westminster meant writing a cheque in excess of £80m, the company said. Jo Moon, director of acquisitions for Premier Inn, said: “For this new financial year, we are setting aside a considerable capex budget of £700m. This firepower will help us get to target the very best sites and complete freehold deals as and when we need to. By doing deals on or off market with willing sellers and partners, we can make things happen and, as we have proved with our recent Westminster double, move quickly and effectively.”

Gluten-free brewery Bellfield hits crowdfunding target: Bellfield Brewery, which plans to make gluten-free beers and lagers that taste as good as any other craft beer, has hit its crowdfunding push on Crowdcube, raising £150,000 in return for 15% of its equity from 142 investors with 19 days left. The pitch says: “The first four Bellfield Brewery beers have been produced and are being conditioned, ready for tasting panels in May: an IPA, two lagers and a stout. The founders have signed a collaboration agreement with Heriot Watt University and developed a proposal for a rigorous programme of research and further recipe development during April 2015. The company now wants to scale up its operation by opening the UK's first dedicated gluten-free brewery in Edinburgh. UK distributors and retailers have already expressed an interest in representing Bellfield Brewery and a number of pubs across the UK are keen to stock the company’s products.” The company's founders are Giselle Dye, director of the PR agency Pagoda PR, whose partner was diagnosed coeliac in 2000, and Alistair Brown, a director at STV Group, who was diagnosed coeliac in 2012.
 
Former Carlisle nightclub sells for £150,000, down from £2.06m: The former Mood2 nightclub in Carlisle has been sold for £150,000, down from its previous sale price of £2.06m. The 12,000 sq ft premises in Botchergate has stood empty since 2008. It failed to sell at auction in December when bidding fell short of the reserve price of £250,000. The site went back to auction in Manchester this month, with a lower reserve, fetching £150,000. Auctioneer Eddisons declined to name the buyer. A Manchester firm, Carlisle Assets, bought the site for £2.06m in 2005. Shortly after the club closed in July 2008, its operator, Herald Inns and Bars, went into administration. The lease reverted to Carlisle Assets, which followed Herald into administration. The sale at auction was on the instruction of the receiver Zolfo Cooper. Planning consent was granted last year for conversion to five units.

Johnson Service buys restaurant trade’s biggest linen supplier: Johnson Service Group has bought London Linen Supply, which supplies more than 900 customers at more than 3,400 locations, with clients including Jamie Oliver, The Wolseley and Brasserie Blanc. The move comes after the group's £22m purchase of the hotel linen supplier Bourne Services last year, a deal which continues to perform ahead of expectations, Johnson said. The company, which is based in Cheshire, also owns the workwear rental business Apparelmaster, and Stalbridge, which focuses on hotel, catering and corporate hospitality. London Linen operates from a 76,000 sq ft factory in Southall, West London, where it cleans up to two million pieces of linen a week. It reported sales up 8% to £29.4m and adjusted pre-tax profit up 12% to £5.5min the year to October 25 2014. Johnson has raised £21.1m for the deal by placing 30 million new shares and has also agreed a £120m financing package with its existing banks. Its chief executive, Chris Sander, said: "I have known London Linen for many years and have been very impressed with the quality of their business and the growth achieved in recent years.
 
Wetherspoon to open £3.5m hotel in Barrow in July: JD Wetherspoon has confirmed it will open a 52-bedroom hotel in Barrow, Cumbria in July. A £3.5m hotel being developed in a former department store is due to open in three months’ time. The hotel is above its existing Furness Railway pub, in Abbey Road, Barrow. John Hutson, Wetherspoon's chief executive, said: “We are getting closer to the opening of the new hotel alongside our existing pub in Barrow. The Furness Railway is well established in the town and we believe that the addition of a hotel will be good news commercially for Wetherspoon and an excellent addition for Barrow. Wetherspoon has enjoyed great success since it first opened its pub and believes it can replicate this with a new hotel. The fact we are building 52 bedrooms and investing £3.5m shows our commitment to the town itself.” The scheme will bring the Victorian-era Co-op building, which closed in 1996, back into full use.
 
Starbucks celebrate fifth anniversary of Fairtrade partnership: Starbucks and Fairtrade have celebrated the 5th anniversary of 100% Fairtrade-certified Starbucks Espresso Roast at the London Coffee Festival. Starbucks serves Espresso Roast as standard in core beverages as well as seasonal favourites such as Pumpkin Spiced Latte in Europe, the Middle East and Africa. Fairtrade estimates that since 2009 Starbucks has contributed more than $5m in Fairtrade premium to coffee farmers, from sales of Fairtrade coffee in the UK alone. Euan Venters, the commercial director at Fairtrade Foundation, said: “Fairtrade coffee purchases support the livelihoods of hundreds of thousands of coffee farmers around the world, ensuring a long-term supply of high-quality coffee and positively impacting famers’ lives, as well as the communities they live in. As one of the world’s largest coffee purchasers, Starbucks is setting a positive example and changing the industry for the better by supporting Fairtrade.” Starbucks was the first private enterprise to invest in the Fairtrade Access Fund in 2012. Today the fund, supported by a number of companies, has loaned more than $12m to cooperatives, helping them with their trade and long-term finance needs. In 2014, 8.6% of all Starbucks coffee purchases were Fairtrade-certified, with 96% of coffee ethically sourced through Coffee and Farmer Equity practices. Ian Cranna, vice-president for marketing and category at Starbucks Europe, the Middle East and Africa, said: “The five-year anniversary of Fairtrade Espresso Roast is an important milestone for us. We are proud to partner with this leading ethical certification mark as part of our commitment to buy and serve high quality Arabica coffee that is responsibly grown and ethically sourced. We’ve been doing this for 40 years and take a holistic approach using responsible purchasing practices, farmer loans and forest conservation programmes.”

Gourmet Burger Kitchen launches sauces at Tesco: Gourmet Burger Kitchen  has launched a range of sauces at Tesco, The Grocer has reported. The products, which went on sale at 450 Tesco stores last week, include BBQ sauce, house relish, habanero jam, harissa mayo, smoked chilli mayo and blue cheese mayo. Each jar comes with a recipe card. The restaurant chain's head of food, Tim Molema, told The Grocer: “At Gourmet Burger Kitchen we have always taken pride in making our sauces fresh from scratch every day and wanted to develop a range of sauces that allows people to enjoy the GBK experience in their own home. Now our burger aficionados can experiment at home to create their own perfect burger, with the same variety of flavours we use in out kitchens.” Tesco buying manager Tom Edwards told The Grocer that the sauces were a strong addition to the category. “They provide a wide range of flavours from a recognised and trusted restaurant brand,” he said. “The packaging is clean, modern and eye-catching and the size and product quality makes it clear that GBK and Tesco are providing value for the shopper. BBQs are becoming more and more about new flavours to impress quests as much as the girl. We believe these new sauces cater to this demand and we expect customers to response well to the GBK range at Tesco.”
 
Peel Hunt questions whether Wetherspoon has enough volume growth to offset gross margin hit: Peel Hunt's leisure analyst Nick Batram, issuing a “hold" note on shares in JD Wetherspoon, has argued that the company's third-quarter results will reveal whether volume growth deriving from the company’s aggressive breakfast offer has been enough to offset gross margin impact. He said: “The deceleration in LFL growth continued into the beginning of Q3, hitting a rise of 1.6% for the first six weeks of the period versus [a rise of] 6.3% in Q1 and 2.8% in Q2. At the time of the interims, management announced a number of aggressive pricing initiatives to grow volumes, particularly in the breakfast market. The question is whether volume growth has come through quickly enough to offset the gross margin hit. Q3 LFL in 2014 was 6.2%, so the comparative is tough. We wouldn’t be surprised for LFL improve from the 1.6% reported for the first six weeks – but at what cost? JDW is very much playing the long game. Unfortunately, in the short term this is not helpful for visibility. Furthermore, while there is little doubt that JDW is a category killer in the volume-driven pub sector, the world has moved on.”
 
Sky Business launches new website support for licensed retail customers: Sky Business has launched MySkySports.com, a new website dedicated to helping licensed customers make the most of sport. Replacing PreviewLIVE, MySkySports provides customer support tools and features to help landlords reach new customers and drive their business. According to Sky Sports, licensees will find a range of new features and tools to help them promote their business, including a new Sky Sports Pub Finder profile; online marketing tools; a fixture planning tool ;and a marketing hub: Alison Dolan, deputy managing director at Sky Business, said: “We’ve launched MySkySports as part of our continued investment in our Go Further range, products and services to help landlords make the most of sport and enhance their customers’ experience. MySkySports offers everything pubs need to promote sport in one place, helping them get more people through the door and more money in the till.”
 
Kozel supports return of Street Feast London: The Czech beer Kozel will once again be supporting the Street Feast London night markets in this summer. The beer will be on sale every Friday and Saturday night, 5pm until late, through to the end of September at events across London after last year’s success at Dalston Yard in Hackney with more than 75,000 visitors across the summer, Kozel has extended its partnership with t Street Feast London to cover three sites, Lewisham Model Market and Shoreditch Dinerama, as well as Dalston Yard. The 22-week-long run will feature more than 50  street food traders. Street Feast events started in May 2012, taking place in car parks, builders’ yards, warehouses and power stations across London. Dishes on offer will include burgers from Bleecker Street, barbeque from Smokestak and tacos by Breddos as well as new, experimental dishes. At Dalston Yard, the Kozel beer truck, a converted 1965 Citroën H-van will be used to supply beer to visitors. Kozel will also be pouring from the main bar at Lewisham’s Model Market and at Dinerama in Shoreditch later on in the summer. Tim Clay, Kozel's sales director, said: “We are delighted to be part of what is bound to be yet another exciting summer of sensational food and great beer at Street Feast. These events are fantastic places for people to experience the perfect pint of Kozel and match the beer with all kinds of mouth-watering food.”