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R&IEditorial Archives2002 — July 15 — Special Report

2002 R&I Top 400 Chains

Achieving positive momentum is difficult in a business environment deformed by recession, terrorism and wars. Yet the operators of the restaurant concepts that make up the 38th annual rankings of R&Is Top 400 chains managed aggregate sales of $196.55 billion in 2001 from more than 227,000 units (open as of the end of the year).

The 3.4% increase was below the 5.5% improvement the Top 400 managed in 2000, but any gain was a notable accomplishment in last years stormy business seas, which spawned unusually high numbers of bankruptcy filings, acquisitions and management-led buyouts.

While a strict comparison cannot be drawn because Top 400 sales numbers are global, these chains total revenues of $196.55 billion are not far below the $251.8 billion Chicago consultancy Technomic Inc. estimates as the 2001 food-and- beverage sales total for all U.S. restaurants and taverns.

Concepts 1 through 100 account for 85.5% of the Top 400s total sales. Because of their relatively large sales bases, these chains also contributed much of the growth. Global sales for McDonalds, for example, increased less than 1% in 2001, yet it still contributed $77 million toward the Top 400s overall sales improvement.

Chains 101 through 200 represent 8.6% of the total, while for the third and fourth hundred chains the shares are 3.7% and 2.2%, respectively.

Also worth noting is that though the full-service restaurant segment is growing more rapidly than quick service, three-fourths of the Top 400s total sales came from QSRs (including convenience stores), as has been true for many years.

Seeking protection
Beyond the numbers are myriad actions taken by companies controlling the Top 400 chains to keep these concepts among the industry leaders. Methods range from tacticalsuch as shifts to the Damons Grill and Ground Round Grill & Bar namesto strategic, including mergers and acquisitions.

Sometimes these actions are defensive, taken to protect holdings until balance can be regained. In 2001, 257 publicly traded companies in all industries filed for bankruptcy protection, compared with 176 in 2000. With 67 filings during the first quarter, 2002 is on track to set another unfortunate record.

Restaurant companies are not immune to the pressures that often lead to court-directed reorganizations. Last year, Cooker Restaurant Group, Phoenix Restaurant Group (owners of Black-eyed Pea restaurants), Planet Hollywood International Inc. and Wall Street Deli Inc. were among the parents of Top 400 chains filing Chapter 11 petitions. In 2002, Houlihans Inc., Prandium Inc. (parent to Top 400 members Chi-Chis and Koo Koo Roo), Roadhouse Grill Inc. and Steakhouse Partners Inc. (operator of the Hungry Hunter and Mountain Jacks concepts) filed for bankruptcy protection as well.

Wall Street Deli subsequently was acquired by Lake Success, N.Y.-based TruFoods Corp., which also has acquired the Arthur Treachers fast-fish concept. Since its filing, Prandium has received and rejected an acquisition proposal from Austin Grills Inc., a Washington, D.C.-based operator of Tex-Mex casual-dining restaurants.

As in most other global industries, acquisitions and mergers in the restaurant business consolidate power, putting ownership of the Top 400 concepts in an increasingly smaller number of corporate hands.

Wendys International, already parent to Wendys and Tim Hortons, has acquired fast-casual Mexican chain Baja Fresh. McDonalds Corp. has expanded a portfolio that includes Boston Market, Chipotle and Donatos Pizzeria through a joint venture withand option to acquireSeed Restaurant Groups Fazolis Italian chain. Yum! Brands (formerly Tricon Global Restaurants) used revenues from its Taco Bell, Pizza Hut and KFC holdings to acquire A&W and Long John Silvers. CKE Enterprises, owner of Carls Jr. and Hardees, has added quick-service Green Burrito and full-service Timber Lodge Steakhouse through its acquisition of Santa Barbara Restaurant Group.

Private lives
For many restaurant companies, the crash of the dot-coms also damaged the lure of financial windfall through public stock offerings. Trading began last year in three Top 400 chain parent companies: AFC Enterprises (owner of Churchs Chicken, Cinnabon, Popeyes and Seattles Best Coffee); Peets Coffee and Tea Inc., and Smith & Wollensky Restaurant Group. So far this year, Red Robin Gourmet Burgers and Cosi Inc. have filed for offerings. Baja Freshs announced public-ownership intentions were curtailed by its acquisition by Wendys.

More numerous are companies that reversed gears, reverting to privately held status. Buyouts removed from stock listings such companies as Blimpie International Inc., Il Fornaio America Corp., Jerrys Famous Deli Inc., Quiznos Corp., Uno Restaurant Corp. (owner of Pizzeria Uno Chicago Bar & Grill) and Vicorp Restaurants Inc. (Village Inn and Bakers Square).

Proposed this year but not completed as of press time are investor-group buyouts of Dave & Busters Inc., Mortons Restaurant Group Inc. and Tumbleweed Inc. (Tumbleweed Southwest Mesquite Grill & Bar).

Menu makeovers, unit redesigns and unit expansion will continue to occupy executive attention no matter what direction the economy takes this year and in 2003. The freewheeling days of the late 1990s dont seem likely to make a return, however, and the Top 400 chains can be expected to defend their turfs by whatever means necessary, tactical or strategic, to retain their positions of leadership.

400 Snapshot: Dairy Queen
Not quite fast-casual, but certainly beyond traditional ice cream shops, the DQ Grill & Chill units that opened in Chattanooga and nearby Hixson, Tenn., move Minneapolis-based Dairy Queen into new menu territories. The chains signature Blizzard dessert and other soft-serve treats are available but so are a full breakfast menu and such offerings as Philly steak and grilled turkey sandwiches, chicken and vegetable quesadillas, and burgers, served on buns baked in-house. The 3,200-square-foot restaurants seat 80 insideat booths and wood tableswith patio space that can accommodate 20 more seats.

As many as 15 Grill & Chill units could be openthrough conversions as well as new constructionby year-end, says Charles Chapman, executive vice president of franchise development. Were still testing to be certain it has broad consumer appeal. Weve had food in Dairy Queen for 40 years, and the customer is giving us permission to evolve the Brazier [food menu] into Grill & Chill.

The chain initially is targeting markets such Fort Myers, Fla., that are small enough that all stores can be converted to Grill & Chill and be supported by advertising. The shift to the broader-menu format is about improved economics for our franchisees through retrofits rather than about building new stores, Chapman says.

Dairy Queen says the two company-owned stores cost a total of $1.5 million.

400 Snapshot: Bennigan's Irish American Grill & Tavern
Changes at Bennigans Irish American Grill & Tavern begin at the top: President Jerry Comstock unexpectedly resigned in late May to become CEO of a music retailer. Named his successor was John Wright, previously president of the Steak Division for Bennigans parent, Metromedia Restaurant Group.

At Bennigans, Wright directs Metromedias best-performing chain, one that is polishing its menu with an upscale shine. Plano, Texas-based Bennigans recently introduced eight food items ranging from appetizers to entrées. More introductions are planned through year-end, according to David Sonzogni, recently named to the new post of vice president of culinary services.

We wanted someone from outside the casual-dining segment to expand fare thats traditionally not available at casual-dining restaurants, Comstock said before his departure. Sonzogni, a 22-year industry veteran, recently served as corporate chef and director of operations for Dallas-based Lombardis Inc., which operates nine upscale and casual concepts. Bennigans sought out Sonzogni after a consultant examined its brand positioning and the casual-dining segment in general. Based on that research, the chain realized it had an opportunity to increase its dinner sales.

New menu items include a bamboo-skewered chicken and shrimp appetizer, ahi tuna steak salad, Caribbean crab cakes and Asiago chicken pasta. Bennigans plans to do menu implementations of up to eight items twice a year.

400 Snapshot: Fazolis
At McDonalds Corp.s annual shareholders meeting this spring, Chairman and CEO Jack Greenberg said the Partner Brands in which it has full or partial ownershipBoston Market, Chipotle, Donatos Pizzeria and Pret A Mangerwill increasingly have a potent impact on our business. He predicted these businesses will add a point or two to [McDonalds Corp.s] growth rate within five years.

Fazolis could hasten that achievement. Under a joint venture announced in April, McDonalds will develop 20 to 30 Fazolis in three markets and hold an option to buy the chain from Lexington, Ky.-based parent Seed Restaurant Group after three years. According to Greenberg, McDonalds is interested in acquiring concepts with potential for at least 1,000 restaurants. Fazolis is well on its way with 392 units as of Jan. 1, 2002.

Seed Chairman, President and CEO Kuni Toyoda says the joint venture will enable Fazolis to benefit from McDonalds competencies in site development, supply chain and other business systems. The chain already was growing rapidly, however, opening 32 restaurants in 2001 (though closing 16). The company plans to add 23 this year.

Fazolis was created in 1988 by Jerrico Inc. as a full-service complement for its Long John Silvers quick-service chain (now part of Yum! Brands), then sold in 1990 to Seed. Units averaged annual sales of $1,044,000 in 2001, selling a variety of Italian pasta dishes, salads and subs. Nearly one-third of sales come from drive-thru business while carryout accounts for 5% of sales.

400 Snapshot: Village Inn
Village Inn is on the move. The 43-year-old Denver-based chain, a division of Vicorp Restaurants Inc., operates 225 family-dining restaurants. Plans are underway to bring its trapezoid logo, neon colors and signature skillet breakfasts to the East Coast. With a solid foundation in Rocky Mountain, Midwest and Southwest states and Florida, the company eyes locations and prospective owners in the District of Columbia, Indiana, New Jersey, North Carolina, Pennsylvania and Virginia.

The time is right to broaden the demographics and attract new customers, says Frank Scherer, vice president of development. Theres not enough room to grow in existing markets. By the end of the year, 10 new restaurants will have been added, with 100 new units within five years.

The current design measures 4,411 square feet, smaller than early units. It features seating for 152 and operates with 75 to 100 employees, with per-person checks averaging $6. The ideal franchisee has local experience in the family-dining segment and can go head-to-head with competitors such as Perkins, IHOP and Dennys. Village Inn claims that its edge is its positioning as the breakfast experts, a moniker earned by the line of skillet breakfasts. The unit redesign, with its eye-catching logo and teal-and-orange color scheme, adds curb appeal, Scherer insists. People know Village Inn for breakfast. But the recently opened stores report higher sales volume from 11 a.m. to 9 p.m. The new look is changing that mix.

400 Snapshot: Damons Grill
Since being named president and CEO three years ago, Shannon Faust has redeveloped the Damons Grill brand with an eye to accelerated unit growth. Faust plans to attract multiunit franchisees who can help the Columbus, Ohio-based company become a national player in the barbecue/sports bar niche.

We asked ourselves some hard questions, says Faust. The best thing to do was to be honest about ourselves with franchisees. Faust said the changesincluding the name change for a concept that had been simply Damons along with alterations in unit design and menuwere intended to maintain its emphasis on ribs while developing a more broadly appealing, casual atmosphere. We now have the right brand with the right people and we are ready to take the company national, says Faust, who hopes to more than double the number of units to 300 by 2008.

The new unit design incorporates a separate dining room, bar and clubhouse, which features tiered seating and booths fronting large television monitors. A wood-burning fireplace gives the dining room added family appeal. New operations will be built in one of two sizes: 6,800 square feet, seating 230, and 5,800 square feet, seating 190. The smaller restaurants are designed for densely populated markets where large sites can be difficult to find.

The majority of entrées are grilled and include pork chops, smoked bacon burger and apple-bourbon chicken.

400 Snapshot: Baja Fresh Mexican Grill
Were fulfilling a desire for sophistication and for higher-quality food, but without the time investment and the dollar investment necessary to go to a casual restaurant, says Gene Cameron, vice president of marketing for Thousand Oaks, Calif.-based Baja Fresh Mexican Grill. His words provide a concise definition of the fast-casual niche between quick- and full-service operations that appeals to consumers and competitors: Dublin, Ohio-based Wendys International in May announced an agreement to purchase Baja Fresh parent Fresh Enterprises for $275 million in cash. That deal was set shortly after Fresh Enterprises filed for an initial public stock offering. Wendys now will provide growth capital for the 151-unit chain, which will operate as a subsidiary of Wendys (as does the Tim Hortons doughnut chain).

Currently, company-operated stores account for nearly half of total units. Baja Freshs intention has been to maintain a fairly even balance between company and franchised stores, with plans to open 59 stores in 2002, 37 of them franchised. We need to be an operating company as well as a franchising company to understand our business, Cameron says. When youre running a concept like ours that is truly fresh, everything in the chain from the produce to the actual delivery to the customer has lots of complexities.

Despite the multitude of fresh-Mexican concepts, Cameron sees ample opportunity. We are nowhere near meeting the demand of the American consumer for this kind of concept, he says. Everywhere theres our type of customer, we can certainly go.

400 Snapshot: La Madeleine
Even from as far away as Paris it was clear last year that the bakery-cafe niche was among the fastest-growing foodservice segments in the United States. That led French cafe operator Groupe Le Duff to assemble an investor group that in December acquired the Dallas-based La Madeleine bakery-cafe chain.

The concept was ripe for re-energizing. Although it had not opened a new location in more than two years, the 62 units in operation (more than half of which are in Texas) averaged $1.9 million in sales. Operating in only five states and the District of Columbia, La Madeleine has more than ample room for growth, and Groupe Le Duff President Louis Le Duff says expansion potential was a factor in making the investment.

The new owners made clear their intentions to build the La Madeleine brand earlier this year when they brought in Wallace Doolin as CEO. Previously president and CEO of Carlson Restaurants Worldwide in Dallas, parent of the T.G.I. Fridays chain, Doolin received an equity stake in La Madeleine and has been assembling a team to move the concept forward. Jean-Pierre Lombard recently was named to the new post of chief great product officer and is overseeing a top-to-bottom reassessment of the chains menu, which now ranges from freshly baked breads, rolls and muffins to quiches and salmon en crote. Re-imaging will be directed by Debra Tippett, a branding consultant who this month joined La Madeleine as chief marketing officer. Were starting from scratch, Tippett says of the ongoing reevaluation, looking at every menu item and every daypart. Were taking a good brand to great.

400 Snapshot: Foxs Pizza Den
Underlying the success of Foxs Pizza Den is the American dream. The chain proves that hard work, vision and service reap rewards. Founder and President Jim Foxs (r.) up-by-the-bootstraps story started in 1971 when the native of Pitcairn, Pa., borrowed $500 and salvaged used equipment to realize his dream of owning a pizza shop. On his first day, he sold out of everything, 300 pizzas in six hours.

Today, Foxs employs 1,950 and sells more than 6 million pizzas and 5.5 million sandwiches annually. With 217 restaurants in 10 states, systemwide sales for 2001 were $100 million, 25% from carryout. Fox plans to open 20 units this year.

Fox financed his first 15 stores by using his home as collateral. Franchises sprouted in 1974 as Fox approached friends, selling them on the potential of the pizza business. The low franchise fee of $8,000 plus $200 a month royalty attracts prospective partners, he adds. Offering advice on site selection, business plans, inventory, purchasing and advertising comes with being a mentor.

Staying innovative has helped grow the chain. Fox added delivery in the early 70s with a fleet of vans and hot bricks in holding boxes to keep pizzas warm. Direct-mail coupons and promotional flyers tapped diners in their homes and provided the beginnings of a corporate database.

People think you have to be smart to be in business, he says. You need dedication and motivation.

400 Snapshot: Pollo Tropical
Pollo Tropical is the essence of a regional power. Not aiming for national presence, the chain has built a large and loyal following for its 54 units in Florida and 25 in Puerto Rico, Ecuador, El Salvador and Aruba. The Miami-based concept appeals with authentic Caribbean flavors and value-priced meals.

Our thrust is to develop items for both our Anglo and Latino customer bases, with an emphasis on portable, handheld foods, says President and CEO Nicholas Castaldo, adding that about 60% of meals are purchased for off-premise consumption. A typical 95-seat store generates about $1.9 million annually.

The concept specializes in grilled chicken marinated in tropical fruit juice and spices. A half-chicken with a side of black beans and rice is priced at $4.99 while the Whole Chicken Family Meal with two sides is $11.99. Sides range from 89 cents for white rice to $2.69 for a large Caesar salad. Latino customers are drawn to Caribbean specialties such as yucca with garlic sauce, Yucatan fries, plantains and flan. Checks average $7.50 for lunch, $8.50 for dinner.

Castaldo credits Pollo Tropicals success to its employees. Most of our cooks come from the Caribbean, bringing their experience, knowledge and traditions, he says. They work with a level of pride thats uncommon in the quick-service industry.

400 Snapshot: Back Yard Burgers
If its initial co-branding agreement with Yum! Brands is a success, Back Yard Burgers previously prudent growth strategy may give way to nationwide expansion. In January, the Memphis, Tenn.-based regional burger chain agreed to a two-part joint venture with Yum! to build 10 hybrid test restaurants around Memphis and near Louisville, Ky. (where Yum! is headquartered). The first unit, combining Back Yard Burgers and Yum!s Taco Bell concept, opened in Shepherdsville, Ky., in March. Two more Back Yard Burgers/Taco Bell locations are scheduled for the Louisville area while at least two Back Yard Burgrs/Pizza Hut operations (full-service, with no drive-thrus) opened in June near Memphis. These initial stores are owned and operated by Yum!, licensing the Back Yard Burgers name.

According to Back Yard Burgers President and COO Mike Myers, if this first phase goes well, a second, more ambitious phase will kick in, calling for an additional 500 co-brand sites. We dont have specific plans to go nationwide as of yet, Myers says. Despite the cautious approach, he admits it would be a great opportunity for the company to grow existing markets if not expand nationally.

Myers says co-branded restaurants will serve both rural and urban markets. Whether Back Yard partners with Taco Bell or Pizza Hut depends on demographics. We want to see how [the brands] complement each other, Myers adds.

400 Snapshot: BJs Restaurant & Brewery
During his student days at the University of Illinois, Paul Motenkos goal was to own a pizza franchise. Now co-CEO with Jerry Hennessy of Chicago Pizza & Brewery Inc., he runs the companys BJs Restaurant & Brewery, a Huntington Beach, Calif.-based chain that originated as a deep-dish pizza concept.

In 1991 Motenko assembled an investor group that purchased the rights to operate and franchise BJs. Four years later, Motenkos group bought the parent company. At that time, BJs consisted of five restaurants, with pizza accounting for 80% of sales. Today, there are 26 units in Arizona, California, Colorado and Oregon (four stores have been added in 2002, with another four planned). The menu offers more than 100 items with pizza accounting for 18% of sales. BJs checks average $10 per-person.

Some units have on-premise microbreweries that supply beer to up to three other company restaurants. Motenko views the breweries as an extension of the restaurants brand. BJs always had an extensive beer list. Brewing our own seemed like a natural thing to do. Motenko also likes the breweries profitability.

However, he insists that BJs is a family restaurant, not a brewpub concept. We offer a wide menu variety at affordable prices, says Motenko. The key to our success is that we create an environment different than what people expect in our category.

In April the company exercised redeemable warrants that yielded $36 million in expansion capital.

400 Snapshot: Smoothie King
Smoothies are hotliterallyat Smoothie King. Warm Heaterz drinks, introduced last November by the 264-unit chain, combine oat bran, egg and soy and whey proteins with familiar flavors such as coconut, blueberry, cinnamon oatmeal raisin and banana nut.

Smoothie King has positioned Heaterz not just as a coffee alternative but also as a portable meal. Its a great way to drink a hot cereal product when youre on the move, says Kevin Donovan, president and CEO of the Kenner, La.-based chain. A 12-ounce Heaterz sells for $2.99 and comes with sipper top and coupon-imprinted belly-band.

In their first season, hot smoothies accounted for 5% to 6% of per-store sales. Donovan expects that share to double this fall. By winter, nearly all Smoothie Kings will be equipped to prepare the offbeat drinks.

Also new on the menu are KingStix , a line of stuffed breadsticks designed to enhance Smoothie Kings beverage-oriented menu. The handheld snacks (priced at $1.99) include apple cinnamon, blueberry turnover, pizza, Cheddar-jalapeo, spinach-feta and Bavarian. More varieties are in the works.

400 Snapshot: Tias Tex-Mex
From its mostly Mexican roots, Tias Tex-Mex is branching out to embrace the eclectic tastes of the Lone Star State. Texas-themed items such as mesquite-grilled chicken, ribs and shrimp already had their places on Tias menu, but the Maryville, Tenn.-based chain wanted more. Last October, it introduced several new Southwest flavors, ranging from barbecued beef brisket to fried breaded catfish and country-fried steak.

Our big focus has been on bridging the Mex segment with the Tex segment and making sure we have the best of both worlds, says James CarMichael, president and CEO of parent company Specialty Restaurant Group.

The 29-unit concept made its debut in 1984 in Lubbock, Texas, as Tias Tortillas. Since then, growth has been slow but steady, spread among seven Southeastern states. All restaurants are company owned.

I certainly think the brand could open to franchisees in the future, but for now we want to focus on the markets were in today, CarMichael says.

Checks average $11.25, with entrées ranging from $6.99 to $14.99. CarMichael describes the décor as rustic, featuring saddles, serapes and sombreros, with colorful wall graphics promoting menu items and specialty beverages.

Tias offers off-site catering as well, which proved a boon as the economy weakened. It has been very hot, says CarMichael, noting that May 2002 catering sales outpaced the previous May by more than 50%. A lot of companies are choosing to bring food in-house instead of taking people out.

400 Snapshot: Beef OBradys
Beef OBradys Family Sports Pubs success is driven by its focus on the family market. The 62-unit Tampa, Fla.-based chain operates where families shop, providing good food, value and sports entertainment. We open venues in strip shopping centers, not Main Street, says Chuck Winship, president.

Units typically seat 100 and range from 2,600 to 3,000 square feet. Menus offer proven all-American favorites such as chicken wings, burgers, sandwiches, salads and desserts. Annual per-unit sales average $900,000 with 20% from sales of beer and wine. Sports help create a lively environment with big-screen televisions and video games.

Founder Jim Mellody created the concept in 1985 with the idea of developing a family pub. Critical to growth is working with enthusiastic franchisees with roots in their communities. This year, the company will add 20 units, increasing its base beyond Florida with operations in Alabama, Georgia, Kentucky, North Carolina and Mississippi.

Our strategy is getting into neighborhoods and developing a relationship with the community, continues Winship. That means sponsorships of Little League, softball teams and school athletic events.

This summer, Beef OBradys launches a corporate training store in Valrico, Fla. Instead of training new owners at various sites, the centralized location will create consistency across the company. Also on the agenda are new menu items and revamped operations and packaging to improve carryout, which is responsible for 10% of overall sales.

400 Snapshot: Woodys Bar-B-Q
When Woody and Yolanda Mills opened the first Woodys Bar-B-Q in July 1980 , only one employee had restaurant management experience: Woodys mother, Grace. The restaurant in Jacksonville, Fla.,was an instant success.

By 1989, having added several more units, the Mills were torn between operating as a franchise organization or a publicly held company. They opted to grow though franchising, a path they headed down by themselves. After nearly a decades worth of effort, they brought in a more experienced team to direct an expansion strategy. Dave Berlin was named chief operating officer and Fred Rhoden the executive vice president. Over the past three years, Rhoden says they have been aggressive in executing a franchise-partner program, targeting Southeastern markets before moving into other parts of the country.

Half of the companys unit growth now comes from existing franchisees. Rhoden says the company provides franchisees with low food costs, service and consistency. This year, eight to 10 new Woodys Bar-B-Q restaurants will open.

Though Woodys core menu remains barbecue, Berlin knows the restaurant business has changed and tastes have broadened, so Woodys has added family-friendly menu items. We are sticking with what we do best, barbecue, but were doing it as a family restaurant, he says, confident of the concepts continued success.

400 Snapshot: Marble Slab Creamery
Ronnie Hankamer marvels at his customers creativity. Youd be amazed at what people order, things you wouldnt even think would go together, says Hankamer, president of Houston-based Marble Slab Creamery. With 38 homemade ice cream flavors and nearly 40 varieties of candy, fruit and nuts for mixing, is it any wonder a customer might crave a combination of banana-rum ice cream peppered with marshmallows, pineapple and pecans?

However curious the combinations, Marble Slabs formula is working. The concept is simple: Customers select an ice cream from the 20 available and choose up to three mix-ins. The ingredients are hand-blended atop a chilled marble or granite slab and served in a cup or on one of the creamerys housemade waffle cones.

Founded in 1983, Marble Slab Creamery posted sales of $36 million in 2001 as the chain continued its rapid expansion. Extra-rich, housemade ice cream with 14% butterfat is the signature product, but the menu also features regular and fat-free frozen yogurt, ice cream drinks, smoothies and other desserts.

Hankamer expects to sign 50 to 60 new franchises this year after successfully adding 30 units in 2001. The majority of operations are in Sun Belt states, but the company is open to development nationwide. Multiunit operators control two-thirds of the stores, something the chain encourages.

With a rising demand for ice cream, Hankamer sees a sweet future for Marble Slab Creamery. People want to reward themselves, he says. If youre going to have a good dessert, a good ice cream, you want the best.

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Never let them see you sweat is the advice often given to actors, speakers, job applicants and others who wish to make their performances appear effortless. Reporting that the Top 400 restaurant concepts totaled systemwide sales of $196.55 billion in 2001, a 3.4% increase over aggregate sales for the previous years list, doesnt do justice to the hard work behind this hard-won achievement.

Economic ebb and flow and the shifting currents of consumer food preferences are constants, making same-store sales growth and unit expansion tricky propositions for every chain in any year. Last year, however, included the extraordinary and tragic overlay of the events of September 11, downgrading what a slowing economy already had made into a difficult sales year for many chains to one of negative growth for some chains. A relatively quick rebound was managed in some industry segments, especially casual dining, positioned to provide much-needed socialization and reprieve from a national climate of uncertainty and grief. Some chains regained their footing more slowly, and a few have yet to reach their early September sales levels. Most, though, caught their breath and pushed on with the business of providing food, beverages and hospitality for people all around a troubled world.

For 38 years, Restaurants and Institutions Top 400 ranking has stood as a beacon of strength, signaling the power and scope of the foodservice industry. For every chain that falters and falls out of the Top 400, there is a concept on the upswingadding sales, locations and loyal customersready to take its place. The top 10 chains may be the same as last year, but Bakers Burgers, Biscuitville, Flemings Prime Steakhouse & Wine Bar and Me-N-Eds Pizzeria are among the concepts making debut appearances in the Top 400 this year, showcasing the industrys ability for self-renewal.

Even more than in recent years, the 38th annual Top 400 restaurant concepts can proudly wear the mantle of industry leadership as they continue their efforts to retain it. Scott Hume, Top 400 Editor

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