Category: Foodservice

Starbucks investors have filed a class action lawsuit in the state of Washington against the Seattle-based coffee chain over allegedly making “false or misleading” statements regarding company financial performance. The group of investors claim that Starbucks is in violation of national securities law for making misleading claims around the company’s 2023 revenue, expected guidance for fiscal year 2024, and “the company’s reinvention and diversification of its global portfolio.”

According to the lawsuit, filed on Wednesday with the U.S. District Court in the Western District of Washington, Starbucks “provided overwhelmingly positive statements” about company performance and potential future performance while simultaneously “concealing material adverse facts” about the company’s reinvention plan, particularly in international markets like China. This in turn caused shareholders to purchase securities “at artificially inflated prices.”

Related: Starbucks is allocating $250k annually for Brian Niccol to commute to Seattle via private jet

During the quarter in question, Starbucks reported its first same-store sales decline since the pandemic for 2Q 2024, which resulted in stocks of the company plummeting 16% over the course of one day. Narasimhan conceded during the earnings call in May that the results were “disappointing” and revised its annual fiscal guidance to reflect the negative shift in performance.

This disappointing second quarter was followed by a similar third quarter performance of 3% same-store sales decline driven by shrinking traffic. At the time Narasimhan continued to blame the more cautious consumer environment and doubled down on Starbucks’ reinvention plan.  

Related: Starbucks offered incoming CEO Brian Niccol $85 million in cash and equity as he left Chipotle

Earlier this month, following the two quarters of disappointing earnings results and alleged internal scuffles with multiple activist investors, Laxman Narasimhan was ousted from the CEO role after just under 18 months at the helm and replaced by Chipotle CEO Brian Niccol, who will officially take over as CEO of Starbucks on Sept. 9.

The class action lawsuit was filed on behalf of all investors who purchased or acquired Starbucks shares between Nov. 2, 2023, and April 30, 2024, and seeks to recover damages caused by the alleged violations of securities law.

Contact Joanna at [email protected]

Slim Chickens has inked a deal with second-generation franchisee Slims Midwest, which owns 23 Arby’s locations in Eastern Michigan, to open 12 locations in several counties in Michigan and Northern Ohio.

The group, which plans to introduce Slim Chickens to Jackson, Monroe, Saginaw and the Toledo Area in Northern Ohio, will open its first location in the latter half of 2025.

“We have been looking to diversify our portfolio, and Slim Chickens stood out as a great fit for us due to its strong brand reputation, unique market presence and high-quality offerings,” a representative from Slims Midwest said in a company press release. “The brand’s emphasis on quality, consistency and speed aligns perfectly with what we know consumers in the Midwest are looking for. We are excited to bring this stand-out chicken concept to our communities and expand our business portfolio with Slim Chickens.”

The better-chicken brand has over 280 locations in the United States, Turkey and the United Kingdom.

“We are thrilled to continue to see our name extend further in the Midwest region and are looking forward to how the group continues to thrive in their community with stores in Michigan and Northern Ohio,” Jackie Lobdell, Slim Chickens VP of franchise development, said in the release. “We are so thankful for operators like them who are dedicated to sharing our Southern hospitality and cooked-to-order chicken tenders with more members of the community.”

Slim Chickens has experienced a 70% restaurant growth over the last three years, a nearly 40% increase in same-store sales over the last four years and has reached an AUV of $3.8 million.

This week on NRN.com, the top story was about the abrupt closure of approximately 25 KFC restaurants in Illinois, Indiana, and Wisconsin. All of the restaurants were owned by franchisee EYM chicken.

Meanwhile, many more CEOs were appointed to lead major restaurant chains. Damola Adamolekun will be Red Lobster’s chief executive officer if its sale to an affiliate of Fortress Capital goes through. And at Outback Steakhouse’s parent company, Bloomin’ Brands, Mike Spanos was named CEO, succeeding David Deno, who announced his impending retirement in May.

Related: Trending this week: Taco Bell is testing a ‘Nostalgic Menu’ with popular items from the past

It’s not all doom and gloom for the industry. CAVA became an exception to an otherwise dismal second-quarter earnings season, showing that it has found consumers’ sweet spot for value. And Chick-fil-A launched its long-awaited new elevated drive-thru prototype.

Click through the gallery for these stories and more, including the Canadian franchise expanding in U.S. malls, the death of the 80/20 rule, and the latest bankruptcy filing.

Checkers Drive-In Restaurants Inc., parent company of Checkers & Rally’s, has named Chris Tebben president and CEO effective Sept. 4, according to a press release.

Tebben succeeds Frances Allen, who announced in April that she was stepping down in order to focus on board work.

“After a thorough search process, we are very pleased to welcome Chris to the Checkers & Rally’s organization. His comprehensive experience in nearly every aspect of restaurant leadership, coupled with his proven track record of delivering sales, traffic, and unit growth, make him a perfect fit to take these brands to the next level,” said David Barr, Checkers & Rally’s independent Board member. “On behalf of the entire Checkers & Rally’s family, I would like to thank Frances Allen for her leadership and dedicated service, and we wish her the best on all her future plans.”

Tebben joins the brand has served in leadership roles at Mars, Starbucks, P.F. Chang’s China Bistro and Pizza Hut, among others. Prior to joining Checkers, Tebben served as president of Mars Retail Group, leading the M&M’s retail arm. He also served as Starbucks VP of retail strategy, VP of licenses stores and VP of Starbucks Frappuccino and Tea businesses.

“I have been honored to lead Checkers & Rally’s for nearly five years, and I am proud of all that the organization accomplished, especially given the unprecedented challenges of COVID, staffing, and inflationary pressures,” Frances Allen, who has served as president and CEO of Checkers since February of 2020, said in the press release. “As I depart, I am delighted to welcome Chris to the organization, and I am confident that he not only has the right professional experience to lead and grow this business, he also has a leadership personality that will make for a great cultural fit with our franchisees, operators, and teams.”

Tebben said he is fortunate to inherit a strong foundation laid by Allen and the current leadership team in place.

I am honored that the Board has entrusted me to steward the Checkers & Rally’s brands into their next chapter of profitable growth,” Tebben said in the press release. “I couldn’t be more excited to lead these two iconic brands that have endured for over 40 years by serving up craveable burgers and the best fries in the business, while delivering a tremendous value proposition for both customers and franchisees. As I look to the future, I believe Checkers & Rally’s is primed to exceed consumers’ rising expectations when it comes to hyper-convenience, and I look forward to working with the team to continue to innovate in every area of our business.

“As I take on this leadership role, I am humbled by the honor to lead more than 4,700 company team members and nearly 150 franchise partners, and at the same time, excited about the mission before us. It is through working as one team that we will win in delivering incredible food, service, and value to our customers and unlimited opportunity to our team members and franchisees. I am confident that working together we will deliver growth for years to come.”

Checkers Drive-In Restaurants operates almost 800 Checkers and Rally’s restaurants.

Portland, Oregon-based Killer Burger has signed a second six-unit agreement with Cascade Dining, which owns 26 Papa Johns and opened its first Killer last year in Salem, Oregon, as part of a previous six-agreement deal.

“We are excited to extend our partnership with Dave Edwards (of Cascade Dining) and his team to open six more Killer Burger units in the coming years,” John Dikos, CEO of Killer Burger, said in a company press release. “Dave and his team’s dedication to operational excellence ensures that we’re providing the ultimate burger experience that we promise each and every customer, and their recommitment to our brand demonstrates the value proposition we are able to offer franchisees. As we continue to scale our concept, we remain focused on expanding into new markets and filling out whitespace in the markets we’re currently in with incredible franchisees like Dave.”

Edwards also recently bought a company-owned Killer location in Gresham, Oregon, bringing his potential total to 13 locations.

“We were incredibly impressed with the immediate success we saw following our first opening in Salem, and are confident in our decision to extend the partnership to another six units,” Edwards said in the release. “Killer Burger is more than a great burger joint with high-quality food, it’s a truly unique experience. We were huge fans of the brand prior to partnering with John and the team, and view these agreements as a great opportunity to use our operational excellence to grow the brand and round out our franchising portfolio.”