A Blurring Of The Line
Between Chains & Indies
I n recent months, there’s been some heated discussions in this column over the growing friction between chain and independent restaurants. Much of the discussion was fueled by Washington, D.C. chef/restaurateur Bob Kinkead, who heads the Council of Independent Restaurants of America (CIRA).
Kinkead’s argument, made on behalf of CIRA, is that the large, mid- to upper-scale chains are running independent restaurants out of business. He’s ticked off because he says most of these chains are inferior to the independents they’re destroying. He’s also concerned that the chains will soon be moving into the fine-dining arena and taking over there, as well. I’ve gotten dozens of letters from independents who say Kinkead is right on.
In light of this argument, I was intrigued when a story came over the business wire recently about The Cheesecake Factory making a deal with SYSCO, North America’s largest foodservice distributor. Under the agreement, SYSCO will offer to its foodservice customers The Cheesecake Factory’s line of desserts. These desserts will be offered under the name, The Dream Factory.
The Cheesecake Factory’s Bakery division will also produce a line of 11 upscale, premium cheesecakes to be marketed under the SYSCO Supreme brand for customers who are looking to serve "cutting edge" desserts in their restaurants. These upscale desserts will begin appearing in SYSCO outlets in April.
According to Howard Gordon, The Cheeecake Factory’s senior v.p. of development and marketing, the restaurant company has been offering the desserts through SYSCO for some time, but the new deal greatly expands the dessert offerings. Originally, the desserts were offered under The Cheesecake Factory name, but some restaurants did not like the idea of serving a competitor’s product. As a result, The Cheesecake Factory name was replaced with The Dream Factory label.
Darden Restaurants and Applebee’s are two chains that sell Cheesecake Factory desserts, says Gordon. Independents will find that selling Cheesecake Factory desserts will give them an edge, he contends.
"We have the highest percentage of dessert sales in the industry," says Gordon. "Independent restaurants that can’t afford to produce desserts on this level can now put them on their menu and drive dessert sales."
Gordon says there isn’t a chain in the land trying to drive independents out of business. There is room for both, he says. "In this business if you have a great location, a nice decor, good food and service and offer value, nobody can put you out of business."
"I agree with that," says Bob Kinkead. "As I’ve said, the independent’s worst enemy is bad independent operators." With that said, Cheesecake Factory is an 800-pound gorilla that will drive a marginal independent out of business. Imagine buying desserts from a competitor who will put you out of business.
Kinkead says he can’t fault any restaurant for making a profit. Nevertheless, he says he wouldn’t buy a chain’s dessert on principle. Would you?