Chick-fil-A continues its digital dance, Taco Bell rethinks breakfast and Los Angeles lets the robots roll. One fast-casual chain files for bankruptcy, while another seemingly gets closer to doing so, too. Two concepts change owners while another gets a financial boost. Plus, consumer confidence improves. These stories and more This Week in Foodservice.

Chick-fil-A is embracing the digital era. For proof look at two of the chicken chain’s more recent initiatives.

The company took the wraps off a two-story drive-thru concept that features a kitchen on the second floor and a conveyor belt that delivers orders to team members on the first floor. Notably, it includes what the chain calls “Mobile Thru” lanes for guests that order ahead using its app, per a QSR magazine story. The location also includes a pair of traditional drive-thru lanes. Earlier this year, Chick-fil-A opened a Mobile Pickup store in New York City.

And, according to Deadline, Chick-fil-A plans to open its own streaming platform. The chain is reportedly working with some production companies to develop family-friendly programming. Naturally, the funny folks at Eater had a few cheeky programming suggestions.

Foodservice News This Week

• Mulitconcept operator Sage Hospitality Group has acquired Mercantile Dining & Provision. Mercantile will operate as an owned restaurant concept for Sage, alongside brands such as Urban Farmer and Departure. Sage Hospitality plans to open additional locations of the brand, which opened in 2014. In addition, Mercantile’s chef Alex Seidel will join the company as a collaborator, per a release announcing the deal.
• Sun Holdings added Freebirds World Burrito to its portfolio by acquiring the 64-unit chain from Tavistock Restaurant Group, per multiple published reports including this one from Fast Casual magazine. Sun Holdings is a restaurant company with more than 1,500 locations and is a franchisee of such chains as Applebee’s, Arby’s, Burger King, and Popeye’s, among others. “This acquisition is especially notable for Sun Holdings as it demonstrates our ability to grow not just as a franchisee, but as a brand owner,” said Guillermo Perales, CEO of Sun Holdings.
• Shake Shack is letting the robots roll in Los Angeles. Customers who order through Uber Eats from select Shake Shack restaurants in L.A. may receive their orders from autonomous delivery robots, per a Robotics and Automation News story. This also marks the expansion of sidewalk delivery in L.A. for Uber Eats, which has been partnering with the robotics provider to offer this service since 2022.
• Taco Bell is allowing franchisees to discontinue serving breakfast, per a variety of published reports, including this one from Nation’s Restaurant News. Franchisees have the option to streamline their menus and focus on other dayparts. For its part, Taco Bell has not hit the snooze button on breakfast. Rather, it is testing some new menu items and ramping up its coffee platform.
• Franchisees of Nautical Bowls are suing the chain saying it misrepresented or lied about sales expectations, per a Franchise Times story. One suit by a former franchisee claims Nautica Bowls said to anticipate 22% of gross sales as bottom-line profit, the story says. Nautical Bowls experienced rapid unit growth in recent years, going from opening two stores in 2021 to 24 in 2022 and 35 in 2023.
• In another move that may portend a bankruptcy filing, BurgerFi hired a chief restructuring officer, per Restaurant Dive. Filling this role is Jeremy Rosenthal, who will help the company in various restructuring affairs, assist in legal counsel in executing restructuring plans and help with motions, responses or other court activity if necessary.
• Baseball-themed eatertainment concept Home Run Dugout received a $22.5 investment. The investment from Lagniappe Capital Partners, also an investor in Puttshack, will go to fund Home Run Dugout’s growth plans which include new locations in San Antonio and Scottsdale, Ariz., per a Restaurant Business story.
• Roti is the latest restaurant chain to file for bankruptcy. The chain has suffered from higher costs, inconsistent location performance and challenging macroeconomic conditions, per a QSR Magazine story. The mediterranean-themed fast-casual chain will use the bankruptcy proceedings to attract investors or a new owner, the story adds.
• A Pennsylvania restaurant and its owner will have to pay workers $1.3 million in back wages, withheld tips and liquidated damages. This is the result of a judgement obtained by the U.S. Department of Labor against La Tolteca Wilkes-Barre Inc., operator of La Tolteca Authentic Mexican Restaurant, and owner Carlos De Leon. The division found the employers violated the Fair Labor Standards Act by requiring servers and bartenders to surrender a percentage of their tips, based on their total sales, to the restaurant at each shift’s end, instead of contributing them to a valid tip pool. The employers failed to keep records of how the tips were used, making them unable to prove the restaurant’s tip pool was valid. Investigators also determined the employers did not pay three non-exempt salaried cooks overtime wages for hours over 40 in a workweek, as the law requires.
• What are the chances Circle K parent Couche-Tard’s bid to acquire c-store 7-Eleven will go through? Roughly 50-50 according to experts interviewed by C-Store Dive. The recent deal between Kroger and Albertson’s serves as a cautionary tale about how difficult it can be to execute a transaction of this magnitude.
• The National Restaurant Association has released an updated version of “The Always Ready: Foodborne Illness Outbreak.” This guide covers best practices to prepare for, respond to, and recover from an incident of foodborne illness or the implication of one from a complainant. This release happens on the eve of National Food Safety Month, which began on August 26, 2024, and covers foodborne illnesses. The NRA’s Patrick Guzzle will serve as a panelist on FE&S 2024 Food Safety Webcast, “Understanding and Managing Foodborne Illnesses,” which will take place on September 5, 2024.

Economic News

• Their confidence may be improving but consumers remain concerned about the labor market. The Conference Board Consumer Confidence Index totaled 103.3 in August, up 1.4 points from July. Consumers were more positive about the current and future business decisions, per a Conference Board spokesperson, but were concerned about the labor market as well as future income.
• Existing home sales increased 1.3% in July compared to the previous month, per data from the National Association of Realtors. This snapped a streak of four consecutive months of decline. The news was not all good, though, as July 2024 sales of existing homes were 2.5% less than the same period in 2023.
• Sales of new single-family homes increased 10.6% in July compared to the previous month, per data from the U.S. Census Bureau and the Department of Housing and Urban Development. This is also 5.6% greater than July of 2023. This is the highest level housing sales have been since May of 2023, per a Reuters story, and is an indication that the housing market may be stating to recover.
• Initial jobless claims increased by 4,000 for a total of 232,000 for the week ending August 17, per the U.S. Department of Labor. The 4-week moving average was 236,000, a decrease of 750 from the previous week. Economists had projected 230,000 claims for the week, per Yahoo! Finance. That said, the jobs market is gradually cooling and there is no immediate concern that unemployment will speak.