JERRY SCOTT

BE OUR GUEST
• Oregon UI payroll tax deferred / forgiven
• All systems restaurants received PPP funding
• All system restaurants are ERTC eligible
• Web site update
Sign of the Apocalypse

The youths of the mafia aren’t up to snuff,

according to senior mafia leaders.
“Everything is on the phones with them.”
- Wall Street Journal
• Delta Park closed
• Return of aggressive regulation
• NLRB packing
• PRO Act
• Joint employer
• Restaurants in 3 of the 5 hardest
lockdown areas
• ABC test dropped from Wyden’s UI bill
• California federal court: franchisees are not employees
• Top 20% of income earners account for more than half of consumer
spending
• Egg N’ Joe single-page menu
• ABC test dropped from Wyden’s UI bill
• California federal court: franchisees are not employees
• Top 20% of income earners account for more than half of
consumer spending
• Egg N’ Joe single-page menu
• FTC is cracking down on McDonald’s ice cream scam
Risks
• Biggest risk remains government action
• BBBA
• Accelerated depreciation may be going away
• Allows NLRB to levy fines
• Hyper-activism
• Covid stickiness
• Inflation
• Labor costs / supply
System Action

• Four restaurants have moved to suspended dinner

• Partial operations
• Increased inventory levels
• Equipment lead times
 19% of adults say they’ve completely stopped
going out to restaurants because of the Delta variant.

Source: NRA
Covid Risks

• New variants
• Recurring “health emergency”
• Vaccine mandates
59% of operators state that employees would quit.

Source: Blackbox Intelligence

Covid Risks

• New variants
• Recurring “health emergency”
• Vaccine mandates
• Masking has become divisive
• Government funded through December 3
• Technomic Intent to Purchase Index:
• Elmer’s / Egg N’ Joe Stuffed Hash Browns ranked #1 nationally
• Not a public company
Sign of the Apocalypse

: We know Instagram is toxic to teens.

Solution
: We are developing an Instagram for
kids under thirteen.
Conference Board Consumer Confidence Index

Source: The Conference Board

US12-MONTHConsumer-Price
CHANGE
Index

Source: Labor Department

U.12-MonthS. Producer-Price
Change
Index for Food Manufacturing

Source: Wall Street Journal

Food Away From
Year-Over-Year Percent Change
Home Vs. Food at Home Inflation

Source: Bureau of Labor Statistics

Source: Marine Traffic
Money in the Bank
Household Cash and Cash-Equivalent Holdings

Source: Federal Reserve

Inflation
• CPI up 5%+ in the last 12 months
• M2 money supply at record levels
• Rapid rise in labor and supplies
• Loss of consumer buying power
• Menu price increases
• Dollar Tree in now Dollar Tree-And-A-Quarter
Food Service
Change From Prior Months
Jobs

Source: Labor Department

Share of Small Businesses with Positions Not Able to Fill

Source: National Federation of Independent Business

Jobl e ss Gauge
Economists Expect That the Unemployment Rate Continued to Decline in September

Source: Labor Department, WSJ

Workforce Participation

Source: Labor Department

Share of Workers Who Quit Their Jobs

Source: Labor Department

 12.8%

Foodservice wages

Accommodations/Foodservice
up dramatically
4.8%

All Industry
Average
Source: Bureau of Labor Statistics and Technomic analysis
August 2021 v. August 2020: Non-supervisory and production personnel
Average Hourly Wage Change

Source: Bureau of Labor Statistics and Technomic Analysis

Restaurant Monthly Year-Over-Year Hourly Wage Change

Source: Bureau of Labor Statistics and Technomic Analysis

Minimum Wage Changes
Washington: $13.69 to $14.49 (5.8%)

Oregon:
PDX: $14.00 to $14.75 (5.4%)
Standard: $12.75 to $13.50 (5.9%)
Rural: $12.00 to $12.50 (4.2%)

Arizona: $12.15 to $12.80 (5.3%)

Tip wage: $9.15 to $9.80 (7.1%)

California: $14.00 to $15.00 (7.1%)

Shortages
• Ham • Chicken broth • Take-out containers
• Bacon • Lids • Straws
• Hash browns • Syrup • A-1
• Anything that begins • Chicken tenders • Kid’s menus
with “Smucker’s” • Toothpicks • Biscuits
• Tomato juice • Hamburgers • Any equipment
• Portion cups • Aluminum foil • Cooks
• Coffee cups • Trash can liners • Dish machine operators
• Ramekins • Hair nets • Servers
• Sugar sticks • Oil filter cones • Hostesses
• Onion rings • Pan spray • Kitchen Managers
• Chicken gravy • Griddle oil • General Managers
• Brown gravy • Sandwich picks
August 2021 vs. August 2020 Producer Price Index
Beef 59%

Shortening/cooking oil 44%

Turkey 41%

Pork 34%

Chicken 32%

Eggs 32%

Fish/seafood 18%

Source: U.S. Bureau of Statistics

 TOP CATEGORIES WHERE OPERATORS ARE EXPERIENCING ABNORMALLY HIGH
CATEGORY SHORTAGES IN LAST TWO MONTHS

Poultry 47%

Beef 45%
• Proteins and
nonfoods are
Paper products 32%
major shortage
categories
Other disposables 29%

Gloves/masks/other PPE 29%

Pork 26%
Source: Technomic September 2021 Foodservice Planning
Program operator survey

Source: Technomic
Coffee
U.S. Dollars Per Pound

Source: Technomic
Market Basket Index

13.4% 10.0%
w/o price increase 3.8% 2.8%
w/ price increase 2.8% 1.9%
Sign of the Apocalypse

Nationwide Alcohol Shortage

Source: Restaurant Business

• Elmer’s Kitchen development
• Elmer’s Kitchen development
• Boise and Roseburg
• Egg N’ Joe – Lacamas Square
Pricing

• FS menu 5%
• QSR menu 7%
• 2-year growth in GCA hits record – Black Box Intelligence
Restaurant
12 Month Change %
Menu Price Changes

Source: U.S. Bureau of Labor Statistics and Technomic analysis

Closures

• 16 months = 65,755 restaurants closed – IFA

• 12% - 17% fewer seats – NRA
• Midscale restaurants counts down dramatically
Change in Number of Seated Di n ers
From Online, Phone & Walk-In Reservations –Compared to Same Day Average in 2019

Source: OpenTable
U.ChangeS.SiRetai l & Food
nce January 2020
Service Sales

Source: Census Bureau

Consumer Spend at Food Service > Retail
• Volatile 16 months
• Combined $139.8 billion,
record large in August
– Driven by record large
foodservice spending
– 6th consecutive month
of new record
spending
• Stimulus money
supporting this surge

Source: Smithfield
Year-Over-Year Index TINDEX
2019=100*

106.3
105.7
101.8
101.1
98.1
94.1 94.6 94.3

86.1
84.3
82.5 82.2
79.4 79.8
77.4 76.7 77.7
• Foodservice 75.5
sales still strong,
but moderating 60.8

49.1
Aug 2020

Aug 2021
Oct 2020
Mar 2020

Mar 2021
Dec 2020
Apr 2020

Apr 2021
Jun 2020

Jun 2021
Nov 2020
Jul 2020

Jul 2021
Jan 2020

Jan 2021
May 2020

May 2021
Feb 2020

Sep 2020

Feb 2021
Source: Technomic
*Note: Each month’s index correspondence to the same
month in 2019 where the index=100
Recovery Situation
Real Sales Index Through 2025
Varies by Sector

Source: Technomic
Casual / Family Dining

• 2-year stack 1% – Baird Research

• Best Recovery Category – FS Guests visiting 1x per month
– Black Box Intelligence
• Mid-scale 2-year stack 3.7% 2Q – Chain Restaurant Data

Source: Restaurant Business

Same-Store Sales, Traffic

Source: Blackbox Intelligence

SSS Change
US Sales Change %

Applebee’s 3.7% Cracker Barrel 0.6%

BJ’s 0.6% Denny’s 2.3%
(Corporate)
Chili’s 4.1% IHOP 1.5%
Olive Garden 6.8% 45.0%
Red Robin 2.6%
63.0%
Bob Evans 3.6%

Source: NRN, Restaurant Business, ERI

COGS as a %
Comp Restaurants Only
of Sales-ERI Locations

Source: ERI
Labor % of
Comp Restaurants Only
Sales-ERI Locations

Source: ERI
Prime Cost-ERI
Comp Restaurants Only
Locations

Source: ERI
COGS as a %
Comp Restaurants Only
of Sales-ENJ Locations

Source: ERI
Labor % of
Comp Restaurants Only
Sales-ENJ Locations

Source: ERI
Prime Cost-ENJ
Comp Restaurants Only
Locations

Source: ERI
Reviews

• August Intent to Return 0.7%

• Drop in “good” and “reasonable” price mention
• FS: Increase in “not worth it”

Source: Blackbox Intelligence

 Online Review
System Average
Metric

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

69.7 73.4 74.8 76.8 77.5 78.5 80.0 81.0 81.1 81.4

3.7 1.4 2.0 0.7 1.0 1.5 1.0 0.1 0.3

Source: ERI
Increased Online Review Score
Palm Springs
Corvallis
Grants Pass
Springfield
Cornell Oaks
Andresen
Medford
Roseburg
Salem
Source: ERI
 5 Star Yelp Review –

There are trendier spots, but I haven't found a place yet with
better breakfast food than Elmer's.
 5 Star Google Review –

Absolutely divine! Amazing food and even better staff. While

waiting for a table my toddler was super hungry and grumpy
and I didn't have any snacks and a sweet waitress noticed and
offered to bring him some fruit and it made our while day!
 Recommended on Facebook –

Passing thru; stopped in just after they opened. Teresa, the

server, was by herself at first; but she was delightful!! 2 of the 3
of us were happy with our choices. I was the one left longing. I
ordered the "ham and Tillamook omelet. The hash browns tasted
like once frozen spud-worms. The omelet was not quite as good
as the first one I ever tried to make. There are many other meals
I'm willing to try in the future, since I travel by here occasionally
(this was my first time); but probably just for Teresa's kind smile.
 3 Star Yelp Review –

Fantastic food. The service was THAT good (that’s why I’m spending this five minutes of my life to do
this). We walked in and the only downside was that the manager was on the phone talking to a superior
or someone about an issue. We waited maybe 10 minutes until Bella jumped in to help us and sit us
down. Shortly after, a guy named Miguel took our order. A couple minutes later another guy named
Brandon checked in to make sure we were taken care of. The food arrived within 10 minutes. Bella,
Brandon and Miguel Checked back in during the half hour we were there (eating). They gave me the
perception that they love working together. So glad to see this energy at such a nice place.
 5 Star Yelp Review –

My husband and I went to a doctor appointment due to me being

pregnant. Afterwards we stopped by Elmer's for a quick bit to eat.
Stephanie Olsen (Manager) gifted us a onesie for our newborn. It
was such a simple kind gesture that filled our hearts with joy.
 5 Star Yelp Review –

My husband and I went to a doctor appointment due to me being

pregnant. Afterwards we stopped by Elmer's for a quick bit to eat.
Stephanie Olsen (Manager) gifted us a onesie for our newborn. It
was such a simple kind gesture that filled our hearts with joy.
 5 Star Google Review –

Everyone there is awesome. They smile and mean it.

 2021 Goals

Sales and Guest Count Recovery

• Still under various restrictions
• Sales are up over 2019
• GC down mid-single digits

Source: Blackbox Intelligence

 2021 Goals

Enhance Training
• Service = Sales
• Added 7 training modules
• Retention at 76% for BLD; 68% for ENJ
• Need focus on new-hire training

Source: Blackbox Intelligence

 2021 Goals

Increase Flow-Through
• No profit if sales are zero
• Focus on quality $
• Ended take-out at ERI-operated Elmer’s
• Focus on dine-in experience

Source: Blackbox Intelligence

 2022 Goals
Fully Staff and Fully Open All Restaurants

Source: Blackbox Intelligence

Stairsteps to Success
Finance

Marketing

Operations

Facility

People
 2022 Goals
Fully Staff and Fully Open All Restaurants
• Staffing = “adequate number of well-trained team members”
• Stake out the hospitality experience
• Fully train
• Outrageously gracious service
• Guests should not be trainers
• Service mapping
• Targeted training
• Split Guest behavior
• Tough on standards, easy on people
Source: Blackbox Intelligence
Train employees well enough they could
get another job but treat them well
enough so they never want to.

- Kevin Kelly
 2022 Goals
Maintain Margins
• Table turns / re-seat times
• Ticket times
• Aggressive price increases
• 55%+ labor; COG below 20%
• Deliver $18 GCA experience
• Focus on profitable Guests
• Guests think “coming back” instead of “price”
• Systems

Source: Blackbox Intelligence

 2022 Goals
Always Meet the System Standards
• Without the system and brand, all you have is real estate

Source: Blackbox Intelligence

Top FS Sales Growth Drivers

• Service
• Ambiance

Source: Black Box Guest Intelligence

Ambience is the big new Guest mover.

Source: Restaurant Business

 2022 Goals
Always Meet the System Standards
• Without the system and brand, all you have is real estate
• Guests go to well-run restaurants
• Experience = Sales
• Dine-in Excellence
• Restore quality
• Reservations, take-out, whole party seating
• Increased focus on QHF and QA standards
• Think and act like a first-rate restaurants – always.
• Decide to thrive, not merely survive
Source: Blackbox Intelligence
 2022 Goals

Fully Staff and Fully Open All Restaurants

Maintain Margins
Always Meet the System Standards

Source: Blackbox Intelligence