Trans-fats, lawsuits and E. coli dominate 2006 headlines

This was one year that operators didn't necessarily have control over their own fate. Politicians debated banning trans-fats, spinach was contaminated with E. coli, and many brands faced a plethora of litigation.

 

Perhaps the biggest story of the year was New York City's Board of Health banning trans-fats in roughly 24,000 Big Apple restaurants. According to the National Restaurant Association, the city is not giving operators enough time to adjust to the mandate.

 

"The Board of Health shows an ignorance of the challenges New York's 24,000 restaurants will face in trying to eliminate trans-fat and may well take a step backward for public health," the NRA said in a statement.

 

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Before New York passed the ban, Wendy's switched its 6,300 U.S. and Canadian restaurants to a corn and soy oil that has no trans-fats. Other brands followed Wendy's lead. KFC, Culver's, Taco Bell and Arby's all switched to no trans-fat oils, too.

 

After KFC made its announcement, the Center for Science in the Public Interest dropped its lawsuit against the chicken chain. In June, CSPI and a Washington law firm sued KFC over its use of trans-fat-laden partially hydrogenated oil. But CSPI continues to pressure the fast-food industry as a whole to stop using such oils.

 

"What are McDonald's and Burger King waiting for now?" CSPI executive director Michael F. Jacobson said in a news release. "If KFC, which deep-fries almost everything, can get the artificial trans-fat out of its frying oil, anyone can. Colonel Sanders deserves a bucket full of praise."

 

E. coli was another big headline maker in the QSR segment as Taco Bell and Taco John's served food contaminated with the virus. Both brands quickly responded to consumer and public concerns with targeted store closures and the temporary removal of green onions from its menu. Taco John's even paid hospital bills for those inflicted with the illness. Despite their efforts, however, both brands are being sued.

 

"This latest outbreak is proof that the food industry has not done enough to protect consumers from deadly pathogens like E. coli O157:H7," said William Marler, a food safety advocate who has represented over a thousand victims of E. coli outbreaks. "It is time for Congress to step into the arena and call hearings to explore the causes of recent outbreaks and to help prevent future outbreaks from happening."

 

It seems as though Congress listened to Marler, who also represented the plaintiffs in the 1993 Jack in the Box case.

 

"We've just got to go in and have, really, a top-to-bottom look at what is going on," said Rep. Rosa DeLauro, a Connecticut Democrat. The food safety system "appears to have broken down when you have these outbreaks almost every single week."

 

Believe it or not, not all of this year's top stories weren't negative: 2006 was a great year for QSR breakfast sales and many brands executed innovative marketing plans. Here's a month-by-month look at who did what.

 

 

In Singapore, McDonald's adds rice burgers: "We believe that rice burgers will be a substantial product in the Singapore market because rice is a general staple here and for the rest of Asia," said Shirley Foenander, vice president of marketing and communications for McDonald's Restaurants.

 

Yum! Brands becomes first fast-food presenting sponsor of The Kentucky Derby: On Derby Day, the Yum! Brands logo appeared beneath the Twin Spires on a Kentucky Derby sign. Yums logo will appeared on the jockeys' jackets during the post parade and on television billboards before and throughout the broadcast.

 

 

Quiznos faces class-action lawsuits: Plaintiffs in two lawsuits claimed the toasted-sub chain sold them franchise territories while failing to locate or approve sites and threatening to terminate their franchise agreements because operators have not opened stores within the required time.

 

Burger King goes public: Burger King's Wall Street debut follows one week after a successful IPO by Chipotle Mexican Grill.

 

Captain D's buys Del Taco: Terms of the deal weren't disclosed.

 

 

McDonald's introduces new PlayPlace design: The "R Gym" has climbing walls, dance games, basketball goals and classic climbing toys.

 

Church's Chicken sales reach $1 billion: "This day is the biggest milestone in the history of Church's Chicken," said president and chief executive officer Harsha Agadi. "The billion dollar mark is the most significant milestone a global restaurant company can achieve."

 

McDonald's coffee: "Coffee has increased in popularity beyond a breakfast beverage," spokesman William Whitman told USA Today. "We see an opportunity to bring our customers a better-tasting product at a value price."

 

 

Subway and franchisees fight over advertising plans: Subway restaurants, in a new contract with franchisees, attempts to assert control over the company's $400 million advertising fund that, in the past, has been managed with franchisee input.

 

New design to save Culver's up to $150,000 per store: "Three factors of the industry prompted the Metro-98's development," said Craig Culver, Culver's co-founder. "Construction costs, energy costs and our desire to expand beyond the suburbs into more urban centers where space is a premium." 

 

McDonald's calling for new faces: The brand gave its customers a chance to be on McDonald's packaging.

 

 

Yum! Brands sponsors Macro Andretti: "From horses to horsepower, we're using two of the world's most famous sporting events to attract potential individual investors to Yum! Brands," said Jonathan Blum, the company's chief public affairs officer.

 

Burgerville recycles trash and leftover food: "It's estimated that food waste accounts for almost 60 percent of what restaurants put in their trash can," said Lydia Wardle, director of purchasing for The Holland.  "It is our goal with this program to try and eliminate that high statistic by reducing the amount of trash filling in our landfills for years to come."

 

 

Arby's tests Market Fresh-branded fast-casual concept: "We are playing on the strengths of our Market Fresh menu items," Gleich said. "With this concept, we're not just serving cold sandwiches like we do with our Market Fresh menu" at typical Arby's units.

 

Dunkin' Donuts launches biggest product initiative in years: The new Smoothie platform coincides with the launch of a new, multimillion dollar "America Runs on Dunkin'" advertising campaign.

 

 

Subway franchisee association files suit against parent company: Responding to Subway corporate's desires to control the company's ad budget, franchisees sued the sandwich company.

 

Wetzel's Pretzels to put employee in a movie: Acclaimed movie producer John Davis will choose the brightest "employee" star for a walk-on role in one of his fall 2006 productions.

 

 

Jack in the Box revamps breakfast menu: Jack in the Box rolled out two new Buttermilk Biscuit Sandwiches — the bacon, egg and cheese and the sausage, egg and cheese.

 

 

Captain D's unveils new menu, look, logo: The new logo features a stylized fish beneath the company's name, with the words "Seafood Kitchen" across a blue ocean below.

 

In-N-Out Burger matriarch dies at 86: Esther L. Snyder, who with husband, Harry, founded the iconic In-N-Out Burger chain, died Aug. 4.

 

 

Krystal Co. looking for buyer: Company spokesman Brian Cooley said in a statement Krystal "is currently providing information" to interested parties. "We are still in the preliminary stages of the process and cannot comment further at this time," he said.

 

Chick-fil-A Cows enter advertising hall of fame: "The Chick-fil-A Cows have become an American advertising icon that entices travelers with entertaining wit," said Stephen Freitas, chief marketing officer. "The brand's ongoing outdoor campaign has remained fresh with new messages while always maintaining the core integrity of the campaign."

 

 

Dallas Cowboys coach sues McDonald's: A Dallas Cowboys assistant coach sued McDonald's for $1.7 million alleging he found a dead rat in a salad purchased at a McDonald's restaurant.

 

Krispy Kreme adds Big Tobacco execs to overcome accounting mess: Nearly two years after its stock collapsed amid an accounting fiasco, Krispy Kreme Doughnuts Inc. faces a host of lawsuits, a criminal investigation and declining sales.

 

Chipotle free from McDonald's rule: McDonald's divested its ownership in 500-unit Chipotle Mexican Grill, a company it bought in 1998 when it was 15 units strong.

 

Wendy's sells Baja Fresh for $31M: "This transaction, as well as our September 29th spin-off of Tim Hortons, will allow us to sharpen our focus on the Wendy's brand," said Kerrii Anderson, Wendy's chief executive officer and president. 

 

 

Quiznos to face several major franchisee lawsuits: Franchisee lawsuits claimed Quiznos systematically defrauded them in a scheme designed to build the brand at their expense. Chris Bray, president of the Toasted Subs Association, a franchisee group, said the group will file lawsuits in several states.

 

 

Domino's franchisee gives away 2,000 pizzas: To celebrate a local high school football team making it to its state final, Alabama Domino's Pizza franchisee gave away 2,000 medium one-topping pies Dec. 11-12 to the 8,000 citizens of Guntersville, Ala.

 

Subway rolls out electronic Cash Cards: Subway rolled out its SUBWAY Cash Card, which can be used just like a gift or personal spending card.

 

Quiznos terminates franchisees on heels of suicide: The sub chain reacts swiftly following the Web-posting of a franchisee's alleged note. The deceased was one of several franchisees suing Quiznos for fraud, exploitation, saturating geographies and violating the conditions of its Uniform Franchise Offering Circular.