QSR Magazine

Amid the global financial crisis, with the world’s largest banks reporting losses in the billions of dollars, Duane Clark, a 24-year veteran of the commercial banking industry, did something he never expected to do: He opened a smoothie shop. 

“I always swore I would never go into the restaurant business,” Clark says. “I always called it the beast. You live it, you drink it, you eat it—that’s your life.”  

But in October of 2009, Clark opened a Tropical Smoothie Café in Panama City Beach, Florida. On June 12, he opened a second location further north along the Sunshine State panhandle in Pensacola.

At AmSouth Bank (now Regions Bank), Clark had helped Tropical Smoothie Café, which is based in Destin, Florida, get financing to open several locations. Over the years, he met the company’s corporate officers and gained a nuanced understanding of how Tropical Smoothie operated.

As a banker, Clark knew how to evaluate an investment, and he concluded that a concept offering low-priced food and smoothies was a winner in a down economy. He also liked Tropical Smoothie’s young, health-conscious customer base.     

But above all, Clark was looking for something steady after one of the most chaotic years in the history of global finance, when giant banks teetered and some, like Lehman Brothers, toppled. 

“The draw was the stability, and that quick service has shown such growth trends,” Clark says.

With a money background, Clark says he avoided a common mistake of the upstart restaurant operator: incorrectly assessing costs.

“Most people getting into it don’t understand the financing, and financing is crucial,” he says. “They don’t know how to manage their cash.”Read more

Here's a feature I wrote for QSR Magazine's May 2010 issue about the state of the restaurant industry in Detroit, perhaps the city hit hardest by the 2008 recession. Interestingly, despite many dire indicators -- an unofficial employment rate of nearly 50 percent and a bad outmigration problem -- many restaurant operators and businesspeople in general see Detroit as a worthwhile investment. Enjoy.

I interviewed Neil Howe, co-author of Millennials Rising: The Next Great Generation, earlier for a QSR Magazine piece on how Millennials will continue to impact the way America does business in general and the restaurant industry in particular. Along with William Strauss, Howe literally wrote the book on the Millennial Generation (a.k.a. Gen Y), which he defines as the cohort born been 1982 and approximately 20 years thereafter. This generation is set off from Gen X'ers and the Boomers, Howe says, by being community-oriented, establishment-friendly, supportive of the military, not brand- and corporation-phobic, generally confident and optimistic, and politically engaged.

While at first blush I agree with many aspects of Howe's assessment of the Millennial generation -- my generation -- I find others surprising. For one, Howe finds us optimistic in our financial outlook. In an essay titled "Yes We Can," Howe and co-author Reena Nadler found that 65 percent of youths between the ages of 18 and 25 expected to be more financially successful than their parents.

Really? I know I'm not banking on it, and many friends and acquaintances, despite their master's degrees and whatnot, aren't either. And why would they, what with unemployment up around 10 percent, the economy backing away from a cliff, et cetera et cetera? Even more surprising is Howe's belief that the Great Recession of 2008 likely won't change the Millennials' sunny outlook re their bank accounts. "The recession leaves the underlying life goals in tact," he said in our interview.

A few more surprising/interesting tidbits from the interview:

• Citing parenting practices that have led Generation Y'ers to consider themselves "special," Howe says Millennials are more likely than earlier generations to demand more benefits from employers, such as retirement funds, investment options, counseling, evaluation and other forms of back patting. This could be significant for the restaurant industry, notorious for being stingy with fringe benefits as well as for high turnover. Expect a more loyal worker base once benefit packages become the norm, Howe says.
• Howe labels Millennials risk-averse and, hence, trusting of big brands. Basically, we find comfort in Wal-Mart, Google and McDonald's because of their prominence, whereas earlier generations, particularly the Boomers, distrusted corporations for precisely this reason. While this bodes well for household names in the years ahead, I hope it doesn't spell trouble for independently owned businesses. For what it's worth, I retain a healthy aversion to the big boys and would hate to see places of character and quality fall under consumer suspicion merely because of their size. On the bright side, Howe says our risk-aversion may lead to greater emphasis on public health (a prediction ostensibly validated by the slow-moving FDA Modernization Act.)
• Obama wasn't a fluke, says Howe. He sees our generation as tearing down the myth of political apathy among youth. "It's going to surprise people how politically powerful this generation is going to be," he said.

Well, that's all for now. I have an article to write (coming out in August) and don't want to empty the notebook prematurely. For now, I leave you with this:

Last week’s decision by the New York City Board of Health to give restaurants sanitation grades and require them to publicly display their “report cards” garnered mixed reactions from operators.

“Like everything else, it’s change and it’s something you worry about,” says Mike Savini, director of operations for Hale and Hearty Soups, which has more than 20 locations in the city. “But as much as I hate to admit it, I can’t say it’s a bad thing.”

Savini’s wary trust of city restaurant policy comes after decisions to implement smoking bans and require some chains to post calorie counts have not come back to bite Big Apple eateries.

“Honestly, from an operator’s standpoint, the grading system is probably a good thing,” he says. “It will probably force some subpar operators to step up their game.”

Inspection reports today are pass/fail and posted on the health department’s Web site. Under the new system, which is set to take effect in July, restaurants can receive an A, B, or C based on the number of demerits they receive during a sanitation inspection, and they are required to display their grades near their front doors.

Restaurants receiving a B or C do not have to post their grades for 30 days, following a second inspection. A-graded restaurants can display their mark immediately and are subject to less-frequent follow-up inspections than their lower-scoring peers.

Alan Dell, owner of Katz Deli, calls the grading measure a “super important” step in boosting customer peace of mind.

“I’m happy about it,” Dell says. “Now you’ll feel comfortable and safe when you go out to eat.”

But not everyone shares Dell’s enthusiasm.

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