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Industry meeting economy's challenges, banks on tech, marketing futures. (Special Report: Foodservice Financial Forum).

Article Excerpt
Economic uncertainty, the threat of war on multiple fronts, and changing consumer and employee expectations are making management of foodservice companies at the outset of the new millennium as challenging as ever. That became clear, as did the resolve of industry players to thrive despite such challenges, when Nation's Restaurant News recently convened a financial forum, sponsored by Visa USA Inc., in Orlando, Fla.

During the exchange the following participants shared insights into their companies and segments as well as some thoughts about general industry trends:

Mark Crager, vice president, merchant sales and integrated solutions, Visa USA Inc., San Francisco;

Michael Jacobs, chief financial officer, B.R. Guest Inc., New York;

Dave Koehler, chief financial officer and treasurer, Checkers Drive-In Restaurants Inc., Tampa, Fla.; and

Mike McLellan, executive vice president and chief financial officer, Whataburger Inc., Corpus Christi, Texas.

Alan J. Liddle, NRN editor-at-large, was the forum moderator.

The following is a highly condensed account of the forum that represented both quick-service and full-service casual-dining operators with businesses across much of the nation.

NRN: We are here today to talk finance, about some of the things you are doing, and to get observations you have about the industry in general.

MCLELLAN: [At Whataburger] we have approximately 600 restaurants. We operate 350 of those and have franchisees that operate another 250. The bulk of those restaurants are in Texas, but we also operate in Arizona, Florida, Louisiana and Oklahoma [among] nine states total.

KOEHLER: Checkers is the largest double-drive-thru concept in the country. We have close to 800 sites; 250 of those are owned by corporate, and the remaining 550 are [operated by] franchisees. As a publicly traded company, we certainly have a lot of challenges with all of the public-reporting requirements now [in place].

MCLELLAN: We're glad we're not publicly traded.

CRAGER: On an acceptance basis, we [at Visa] are focused tremendously on the quick-serve [and] quick-casual [segments] right now. We think it [represents] the biggest opportunity for growth and the biggest opportunity for our members to take care of the people who want to use cards in those locations. We are working with a number of [chains] in terms of offering advice about how they should be installing cards [processing technology and reporting systems] at the corporate level as well as at the franchise level. [We're doing that] so people understand the expenses associated with accepting cards and what they need to do to get up to speed.

JACOBS: [B.R. Guest is] a multiconcept, privately held operator with 10 restaurants all over New York City. Although our plans are to grow and expand outside of New York, we don't have property [leased] at this time outside of New York. Things are starting to get back to normal [in post-9/11 New York] to some degree.

NRN: What's the average check range for your concepts?

JACOBS: Quite varied. As low as $25 for dinner; [and] on the high end, closer to $75-$80.

NRN: What [other] cities are you interested in?

JACOBS: Primarily large cities that are similar to New York, whether it be Chicago, Miami, Los Angeles or Atlanta. We tend to be volume junkies in terms of looking for lots of traffic.

NRN: How did the last year go for your organization, and what are some of the bigger initiatives under way?

JACOBS: We saw, in our restaurants, a varied reaction to 9/11. Our neighborhood restaurants saw an increase, as people really just kind of wanted to go around the corner for meals. Our properties in areas such as Times Square or closer to downtown saw a dramatic, dramatic drop post-9/11. The good news was that drop was not long lasting. Now, more than a year from that time, we feel that we are pretty much back to what had been the prior norm in terms of customer counts and revenues. In terms of initiatives, our primary focus for the past year or two has been on technology and trying to build an infrastructure to accommodate what we hope will be significant growth.

KOEHLER: Over the last year Checkers has been in a turnaround situation. We have really been focusing on store-level operations [and] making sure we are meeting our customers' expectations. We have been putting a lot of emphasis on trying to increase our training, increasing some of our performance measurements and giving people the tools to really operate the stores and to really understand what is going on. We have had to do some workouts [closures, upgrades or relicensing]...