Priszm Sells 232 Units for $46.4 Million
Priszm Income Fund announced this morning, Dec. 13, that it is selling 232 restaurants in Ontario and British Columbia for $46.4 million to a numbered company, 7716443 Canada Inc., a firm controlled by a current European franchisee of Yum! Restaurants International. Priszm operates most of Canada’s KFC, Taco Bell and Pizza Hut restaurants, many of them franchised or licensed from Yum! The proposed transaction is subject to due diligence and financing by the purchaser to be completed by Jan. 15. It also requires consent by both Yum! Restaurants International and Priszm’s senior debt holders. For more information, click here.
Priszm also announced that it has reached an interim agreement with Yum! regarding the franchise agreements for 70 restaurants that were set to expire Dec.10. The franchise agreements for the 70 restaurants have been extended to Jan. 15 and include 24 restaurants that are part of the proposed sale transaction. “In an effort to conserve cash as the company prepares for the traditional KFC sales decline during the winter season, Priszm withheld its continuing fee that was payable to the franchisor on Dec. 7, 2010 as well as its debt interest, which was payable to its senior debt lender on Dec. 10, 2010,” reads a statement posted on Priszm’s website.
Priszm Income Fund holds approximately a 60 per cent interest in Priszm Limited Partnership, which owns and operates more than 400 KFC, Taco Bell and Pizza quick-service restaurants in seven provinces. Approximately 100 locations are multi-branded, combining two or more of the Fund’s restaurant concepts.
U.S. A&P Files for Chapter 11
The Great Atlantic & Pacific Tea Company, Inc. (A&P), Montvale, N.J. has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. Founded in 1859, A&P is one of North America’s first supermarket chains and currently operates 395 stores in eight states and the District of Columbia. It sold its Canadian interests in 2005; these stores are fully stocked and will remain open. The company has entered into an US$800-million Debtor in Possession (DIP) facility with JPMorgan Chase & Co. subject to satisfaction of certain conditions and receipt of court approval. On July 19, 2005, the Great Atlantic & Pacific Tea Company, Inc. and its subsidiary, A&P Luxembourg S.à.r.l, announced sales of its Canadian operations to Quebec-based Metro Inc. for an acquisition price of $1.7 billion. Subsequently, Metro invested $200 million to consolidate the company’s conventional food stores under the Metro banner, with all Dominion, A&P, Loeb, the Barn and Ultra banners converted to the Metro name.
Kraft Rejects Starbucks $750-M Offer, Files Injunction
What began as a partnership between Kraft Foods Inc. and Starbucks Corp., involving the sale of bagged coffee at supermarkets, has led to a bitter battle. Kraft Foods Inc. filed a preliminary injunction in a U.S. District Court in New York last Monday “to stop Starbucks Corp. from proceeding as if the agreement has been terminated, when, in fact, the contract is still in force.” In its filing, Kraft said four months ago, in August, Starbucks had offered Kraft $750 million as a breakup fee but described the amount as “far less” than the business’ fair market value. Several weeks ago Starbucks reps announced it was ending the 12-year-old partnership to sell bagged Starbucks, Seattle’s Best Coffee and Tazo Tea brands at supermarkets and other retailers. Subsequently, speaking at a New York investor conference, Howard Schultz, chairman, president and CEO, announced dramatic “multi-channel” growth plans in packaged groceries, expanding its consumer packaged goods on a global scale and possibly making new grocery product acquisitions. The injunction process in a U.S. court can be drawn out, often for many months.
High Liner to Acquire U.S. Value-Added Foodservice Firm
High Liner Foods Incorporated has announced plans to purchase privately held Viking Seafoods, Inc., a value-added foodservice company based in Malden, Mass. The $31.5-million transaction is expected to close within the next week. In 2010, Viking had net sales of approximately $40 million. The Lunenburg, N.S.-based High Liner Foods is a North American processor and marketer of high-quality seafood. High Liner Foods’ go-to-market arm for the U.S. foodservice industry is Fishery Products International (FPI), a supplier of seafood to the foodservice market. “Our vision is to become the leading value-added frozen seafood company in North America. A key component of High Liner’s overall growth strategy is to acquire complementary businesses that strengthen our market leadership position. This deal fits perfectly within that plan,” said Henry Demone, president and CEO of High Liner. “Viking is well established in many key market segments and known for offering its customers quality and value.” Viking brand products are distributed nationally in the U.S. to customers in the health care, education and commercial and independent restaurant markets.
Certified Master Chef Program Announced at Humber
Toronto’s Humber College will be the first — and only — Canadian college to offer a Certified Master Chef (CMC) program after signing a five-year contract with the Canadian Culinary Institute (CCI), an institution overseen by the Canadian Culinary Federation (CCFCC). The CMC will be the highest culinary academic designation available in Canada. Prior to instituting the program, students had to enrol in similar programs in the U.S. or Europe. “Being selected by the CCFCC to be the only Canadian college offering CMC certification shows the depth and quality of Humber’s culinary programs, faculty and students,” says Rudi Fischbacher, Humber culinary program coordinator and national CCI chair. “We have developed a comprehensive and challenging online program and in-person practical workshop exam that will produce the next generation of Canada’s greatest chefs who will have reached the pinnacle of their career upon earning the CMC credential.” The CMC professional designation is recognized by the Canadian Tourism and Human Resource Council and its network of partnering agencies and associations throughout Canada. The program requires a minimum two-year commitment, with a maximum allowance of four years to complete all components.
“Cup-to-Cup” Recycling Announced at Starbucks
In a move that could have significant positive impact for the entire foodservice industry, Starbucks Corporation has announced a successful “cup-to-cup” recycling test with paper cup manufacturer International Paper and pulp mill Mississippi River Pulp LLC. As part of the testing, the supplier used recycled cups from Starbucks stores to create new cups during a six-week test period. At present, only a few pulp mills in North America can turn a recycled paper cup into non-food or beverage paper products, such as paper towels, napkins and office paper. “What we have is the unique capability of eliminating the optical brighteners [called a de-inking process] typically in the waste paper stream,” explained Rob Garland, CEO of Mississippi River. “You have to eliminate those if you want FDA-quality pulp that can go into food and beverage contact uses.” For more information, click here.
For Best Results, Go Topless — BIC
To achieve “restaurant quality” roast beef in the kitchen, “Go Topless” advises the Beef Information Centre (BIC), of Calgary, and Mississauga, Ont. In a Canada newswire press release BIC stresses “oven roasters ‘go topless’ (not use a lid), ‘go dry’ (not use liquid in the pan) and ‘go low’ (roast at 275°F)” to achieve best restaurant-quality roasting.” For more information, click here.
McDonald’s to Add Oatmeal to All-Day Menu in U.S.
As of Jan. 3, oatmeal will be added to the all-day menu at more than 14,000 U.S. McDonald’s Corp. restaurants. Fruit & Maple Oatmeal, with or without brown sugar, will sell for US$1.99. According to the QSR company, the oatmeal contains half a cup of fruit, including red and green apples, dried cranberries and golden and regular raisins as well as five grams of dietary fibre and two-thirds of the U.S. Department of Agriculture’s recommended daily allowance of whole grain. The dish contains 290 calories with sugar and 260 calories without.
Q4 al Centro Opens in Vancouver
Q4 al Centro, sister restaurant to Vancouver’s Q4 Ristorante, opened for its first dinner service last week. The name al Centro, which translates to “at the centre” in Italian, pays homage to the Vancouver resto’s location downtown on Richards at Robson and for its connection to the L’Hermitage Hotel. The interior, created by Box Interior Design, is described as a “warm, stylish and comfortable space” with 70 seats plus room at the cocktail and kitchen bars. The room features natural cork flooring, a not-so-subtle nod to Q4’s reputation for wine excellence; the eco-friendly choice absorbs sound naturally. In the kitchen, longtime Q4 executive chef, Bradford Ellis has made the move downtown where he has created a menu of classic, unpretentious Italian food, including a wood stone Forno pizza oven that takes centre stage in the kitchen, with four pizzas and three house-made focaccias on the menu for both lunch and dinner. Other highlights from the dinner menu include the Corsi family meatball recipe, spaghetti Q4; classic pistachio-crusted sablefish with roasted red peppers; and provimi veal chop with lemon caper gremolata. The resto is managed by Albert Chee who honed his skills working with B.C. Restaurant Hall of Fame inductee, Bud Kanke, for more than a decade, most recently at Goldfish Pacific Kitchen.
New MLSE Restaurant Opens in Toronto
E11even, a new Maple Leaf Sports + Entertainment (MLSE) restaurant that offers an updated take on North American classics amidst a “Rockwell-inspired” design, is the newest tenant at Toronto’s Maple Leaf Square, which also houses Hôtel Le Germain, Real Sports Bar & Grill and Longo’s. The name e11even is derived from the 11 points found on a maple leaf. “Our goal at e11even is to ensure our guests feel at home,” said Robert Bartley, the MLSE director of Culinary. “The menu is familiar, yet refined and contains all of the items you might crave from your favourite restaurant. It’s a place you can feel comfortable coming to before an event, out for a drink with friends, family or entertaining clients.” Leather banquettes, wooden tabletops, antique mirrors and masonry floors provide the setting for dishes, such as seared tuna salad ($21) and a platinum service kosher hotdog ($16) for lunch and tuna tartare ($18) and twisted primavera ($19) for dinner. Aside from food, beverages are also a priority with more than 600 selections of wine and a communal table made from excavated hemlock timbers that serve as the bar where New York’s Fred Dexheimer acts as mixologist. For more information, click here.
Fine-Wine Market Returning
“The fine-wine market appears to be returning to pre-recession levels,” reads a press release from the Liquor Board of Ontario (LCBO), which refers to the LCBO’s annual fall wine auction. Barry O’Brien, the LCBO’s chief auction organizer, reported more than $2.5 million in sales, making it one of the best years on record at the auction. More than 90 per cent of the products were sold, including two bottles of French burgundy Romanée-Conti, sold for $10,530, and 12 bottles of Château Lafite 2000 French Bordeaux, which were snatched up for $17,000. Meanwhile, Vintages fine wine and premium spirits sales topped $37.5 million in November, up 13.2 per cent from November 2009. “Many of our customers are starting to trade up again in their purchases, reversing the trend of the past couple of years where consumers were more focused on stretching their dollars,” said Tom Wilson, vice-president, Vintages. “Our November Vintages product releases featured a number of wines priced $100 and up, which sold out quickly. We haven’t seen that demand for a couple of years.” For more information, click here.
Centre of the Plate Training Set for Vancouver
A Centre of the Plate Training course will be held at Vancouver Community College, in Vancouver from Feb. 23 to 25. Previously held in Guelph, Ont, it is designed for operators, marketing executives, protein specialists and sales reps from retail grocery, foodservice and processing industries. In a partnership between the Beef Information Centre and the North American Meat Processors Association (NAMP), the course, which will be led by NAMP’s Steve Olson, covers beef, veal, lamb, pork and processed meats. The program has already attracted reps from M&M Meat Shops, Sysco, New Food Classics and Tim Hortons. “The Centre of the Plate Training course was a great opportunity to further my knowledge in the meat industry so that I can make better buying decisions for Tim Hortons,” said Mike Febbraro, Strategic Sourcing, TDL Group Corp. “The skills I learned in this course will help me find ways to optimize proper meat cuts to offer the best value for our restaurant owners.” Students will also get a copy of NAMP’s new, expanded Meat Buyer’s Guide during the program. For more information, click here.
Royal Host Chair Armoyan Challenges Holloway Board
Holloway Lodging Real Estate Investment Trust, Halifax, last week received a requisition from Royal Host Real Estate Investment Trust calling for a special meeting of the unitholders of the REIT to consider removing three of the independent trustees of the REIT and replacing them with trustees nominated by Royal Host. The board of trustees is reviewing the requisition and will respond in due course. Royal Host owns some 20 per cent of Holloway and is chaired by activist investor George Armoyan. The three new directors would include Armoyan, investment advisor Michael Rapps and experienced hotel executive John Carnella, formerly the CFO of Fairmont Hotels. In a statement, Holloway said that its trustees were considering the proposal. Holloway owns and operates lodging properties and full-service hotels primarily in secondary, tertiary and suburban markets. Holloway currently owns 22 hotels with 2,386 rooms. Royal Host operates 31 hotels across Canada, many in major markets, with branding such as Hilton, Best Western, Ramada and Travelodge. For more information on the requisition, click here.
Expansion Planned at Manoir du Lac William
Manoir du Lac William, Saint Ferdinand, Que., is set to undergo a $2.26-million expansion, including improvements to existing facilities, 21 new rooms, an indoor pool and nature spa as well as meeting, fitness and treatment rooms. Founded in 1956, and acquired by the Lessard family in 1992, the expansion will be supported by $800,000 in repayable funding granted through the Temporary Initiative for the Strengthening of Quebec’s Forest Economies implemented by Canada Economic Development. The funding from Canada Economic Development will be used primarily to conduct the work on the main building.
HotelsCombined.com Builds Chinese Presence
Worldwide hotel room price comparison site Fishery Products International database of 5,000 hotels in China will grow to 11,000, following an integration agreement with NASDAQ, N.Y. — traded eLong, Inc. A leading online travel service provider in China, headquartered in Beijing and Sydney, Australia-based HotelsCombined is the world’s leading hotel price comparison search engine handling more than 2,500,000 real-time international hotel deals simultaneously, including Canada. It aggregates prices from online travel agents and hotel chains such as Expedia.com, Hotels.com, Booking.com, Travelocity.com, Agoda.com, Accor Hotels, Hilton, Choice Hotels, Best Western and Intercontinental Hotel Group. With no mark-ups or additional booking fees, HotelsCombined.com is a free service.