Today we launch a daily edition of our News Bites column so readers are better informed on restaurant and hospitality industry headlines. Send news items of interest to Modern Restaurant Management (MRM) magazine's Executive Editor Barbara Castiglia at email@example.com or firstname.lastname@example.org.
Grubhub and Yelp Announce Partnership
Grubhub Inc. and Yelp Inc. announced a long-term partnership designed to capitalize on each company's unique assets and propel online takeout and delivery. As part of the agreement, Grubhub will acquire Yelp's Eat24 business and Yelp will integrate online ordering from all Grubhub restaurants onto its local goods and services platform.
"Grubhub and Yelp, market leaders in their respective fields, have a shared mission of connecting consumers to local businesses," said Matt Maloney, Grubhub's founder and chief executive officer. "With such complementary goals and strengths, Jeremy and I are excited to form a partnership that will allow each company to focus on its respective expertise, while working together to expand local e-commerce for diners and restaurants. Adding Eat24's large diner base and thousands of restaurants to our platform will accelerate Grubhub's mission to become the most comprehensive marketplace connecting takeout diners and restaurants. The long-term agreement ensures that Grubhub also has access to Yelp's enormous user base and clear content leadership to help drive more diners to our restaurants."
"Bringing Grubhub onto the Yelp Platform through this long-term partnership will be a win for everyone," added Jeremy Stoppelman, Yelp's co-founder and chief executive officer. "Consumers get a high-quality end-to-end experience with a wider selection of restaurants and better delivery options. Restaurant partners receive increased online exposure and the opportunity for increased order volume, as well as expanded delivery support. Yelp and Grubhub benefit from greater scale and sharper operating focus. We expect Grubhub's acquisition of Eat24 to create significant value for our consumers, restaurant partners and stockholders. The Eat24 team deserves credit for the transformational impact they've had as part of Yelp, and I'm pleased that we will continue to pursue this huge market opportunity in partnership with Grubhub."
According to the companies, the acquisition will benefit diners, restaurants, Grubhub and Yelp:
- Diners: Together, Grubhub and Eat24 will form the largest network of restaurants offering online and mobile food ordering in the United States. Diners will have the ability to discover and order from approximately 75,000 great local restaurants through either Grubhub's or Yelp's easy-to-use interface and take advantage of the industry's lowest diner fees.
- Restaurants: Connecting Grubhub's unmatched restaurant network and efficient delivery infrastructure to Yelp's large purchase-oriented audience will give Grubhub's restaurant partners access to new potential diners and the opportunity for increased orders. Extending Eat24's restaurants to Grubhub's sizable diner network will help drive new diners and incremental revenue to Eat24 restaurant partners.
- Grubhub: The combination of Eat24's brand and significant reach will enable Grubhub to address more diners and drive more volume in all markets.
- Yelp: The partnership adds tens of thousands of order-ready restaurants to the Yelp Platform and increases the availability of food delivery via Yelp, which will drive usage and transaction velocity in Yelp's most highly-trafficked category.
The long-term partnership agreement between Grubhub and Yelp has an initial term of five years, commencing upon the closing of Grubhub's acquisition of Eat24. Additionally, Grubhub has entered into a definitive agreement to acquire Eat24 for $287.5 million in cash, subject to standard closing conditions, including the expiration of U.S. antitrust waiting periods. Grubhub's acquisition of Eat24 is expected to be funded through a combination of cash on hand and debt.
This deal comes directly after Grubhub announced a partnership with Groupon. In financial results for the second quarter ended June 30, Grubhub said DAGs grew 16 percent year over year, and the Company posted revenues of $158.8 million, which is a 32 percent year-over-year increase from $120.2 million in the second quarter of 2016.
- Active Diners were 9.18 million, a 25 percent year-over-year increase from 7.35 million Active Diners in the second quarter of 2016.
- Daily Average Grubs (DAGs) were 313,900, a 16 percent year-over-year increase from 271,100 DAGs in the second quarter of 2016.
- Gross Food Sales were $880 million, a 20 percent year-over-year increase from $733 million in the second quarter of 2016.
In connection with the acquisition of Eat24, Kirkland & Ells LLP is acting as legal advisor to Grubhub and Orrick Herrington & Sutcliffe LLP is acting as legal advisor to Yelp.
Golden Corral Names Darryl Webb Senior Vice President of Operations
Golden Corral hired restaurant industry veteran Darryl L. Webb, Sr. as Senior Vice President of Operations, marking one of the few times the 44-year-old brand has hired someone from outside the company to a senior operations position.
In this role, Webb will lead all operations of company and franchised restaurants. He will also oversee three regional franchise operations divisions, a newly created company operations division and an operations services department focused on field training and development.
Webb has spent more than 35 years in the quick serve and casual dining restaurant operations. Prior to coming to Golden Corral last year, he had spent the previous four years with Bloomin’ Brands. Webb started with Bloomin’ Brands as Regional Vice President for Outback Steakhouse before serving as Vice President of Operations for Carrabba’s Italian Grill. He also spent five years with Darden - Olive Garden from 2007 to 2012, where his last position was Regional Vice President of Operations. Webb began his professional career with McDonald’s in 1979 and spent 23 years with the chain, including his final four years as President and Managing Director of the first McDonald’s restaurants in South Africa.
“Darryl brings a tremendous amount of experience, success and leadership in the restaurant industry to the Golden Corral management team,” said Lance Trenary, President and Chief Executive Officer of Golden Corral. “We felt his knowledge of the casual dining segment, as well as his entrepreneurial experience, was very valuable given the direction we plan on taking the company. Darryl will play an important role in how Golden Corral elevates the dining experience for its customers.”
Since coming to Golden Corral, Webb has led a company-wide examination of restaurant operations and execution with the goal of optimizing guest service and overall dining satisfaction. Later this year Golden Corral will introduce new enhancements and procedures that will improve the overall dining experience in its restaurants. The buffet chain is also focused on putting more resources closer to the customer through increasing employees, resources, and training to each restaurant while adding an Operations Services department to the corporate structure.
“It has been a tremendous opportunity for me to join the Golden Corral management team and play a role in the ongoing development of the brand,” said Webb. “Golden Corral has been an industry leader by making pleasurable dining affordable for more than 40 years. I look forward to adding to that success and implementing some operational changes that will elevate the buffet experience for our co-workers and our guests.”
Shoney's Meal Pack-a-Thon
During Nashville-based Shoney’s 70th Anniversary convention this week, the entire franchise and corporate system gathered for a meal pack-a-thon to benefit three local organizations that share missions to feed the hungry and help those in need.
Shoney’s franchisees, employees and friends worked with Feed the Hunger to pack 17,000 ready-to-eat meals for Second Harvest Food Bank of Middle Tennessee, The Metropolitan Action Commission and Nashville’s The Bridge Ministry. An additional 8,000 meals will be sent overseas to countries and communities facing extreme hunger.
The meal pack-a-thon exemplifies one of Shoney’s core missions to make an impact in its communities through charitable donations, events and leadership. Since 1959, Shoney’s has been headquartered in Nashville and continues invest in the community, the local police department and other Nashville organizations.
P.F. Chang's Opens First U.K. Restaurant
P.F. Chang’s opened its first restaurant in the United Kingdom, the P.F. Chang’s Asian Table. With the opening, P.F. Chang’s now has a presence in 21 countries outside the U.S.
The 138-seat P.F. Chang’s Asian Table restaurant, a first-of-its-kind concept, offers a smaller footprint than traditional P.F. Chang’s restaurants around the world while adhering to the brand’s Farm to Wok food philosophy. It also is the first P.F. Chang’s restaurant in the world to offer breakfast every day and brunch on the weekend.
“We are thrilled to open in London with a new urban model that we believe will be the launching point to take P.F. Chang’s to other European countries,” said Mike Welborn, P.F. Chang’s president, Global Brand Development. “From the trendy location to the unique décor and food where our chefs use only real, whole, fresh ingredients that are hand cut every day, the P.F. Chang’s Asian Table will be a popular destination for Londoners.”
The décor pays homage to its location, the former site of Studio 51, the jazz club where the Rolling Stones got their start, complete with a gold vinyl record-lined bar. The restaurant also features an open kitchen and an in-house bakery.
P.F. Chang’s currently owns and operates almost 300 restaurants in the U.S. and in 22 countries and territories.
Push for Responsibly Sourced Salmon
Compass Group USA announced a contract for responsibly sourced salmon in the Mid-Atlantic region. Aggressive plans are in place to roll out contracts nationwide, an industry first. The contracted salmon is at least equivalent to the Seafood Watch yellow Good Alternative recommendation and is certified by the Aquaculture Stewardship Council (ASC).
"This is a huge success and Compass helped drive the industry toward a sustainably-raised farmed salmon. Salmon is one of the most popular choices of seafood among our guests and we are proud to meet customer demand with options that are responsible," said Julia Jordan, Director of Sustainability, Compass Group USA.