holy shit, they really tear Olive Garden a new one here

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320597)

Some analyst there definitely poasts. Or would have in xo glory days.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320603)

EDIT: slide 165 is all about the breadsticks

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320605)

"Olive Garden’s breadsticks are part of the brand equity, as they come

to every

table. The breadsticks

need to be of the

highest quality,

with

a better

taste and

a firmer

texture, and each

table must

receive

hot

breadsticks."

these hedge fund bros are on our side

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320609)

pg 11 - Even after the sale of Red Lobster (the “Red Lobster Sale”), Darden still has the largest real estate portfolio in the casual dining industry, owning both the land and buildings on nearly 600 stores and the buildings on another 670.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320815)

pg 56 - Darden bases its CEO compensation on companies 4-6x its size that

aren’t even in Darden’s industry, like VF Corporation, Hilton Hotels, General Mills, and Hershey, or quick-service restaurant

companies more than 15x its size like McDonald’s.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320834)

pg 67 - Darden GMs:

$60,000 - $80,000 (per Darden

management)

Currently, Darden pays 15% - 25% of

total compensation as bonus

Best-in-class peers

$70,000 - $100,000

With a goal of promoting incentive

alignment within the organization,

best-in-class pay 30% - 40% of total

compensation as bonus

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320848)

pg 94 - Management utilizes private aircraft for most travel needs, even when it is more cost efficient and

reasonably convenient to fly commercial (one of the incumbent Board nominees sells private

aircraft services to Darden).

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320867)

pg 104 - Servers placed one breadstick per guest plus one

breadstick for the table. For example, if you had 4

guests, 5 breadsticks were served.

The same rule exists as 10 years ago, but restaurants

lack training and discipline to deliver. Now, servers

will bring an excess of breadsticks significantly

outnumbering the number of guests.

Darden management readily admits that after

sitting just 7 minutes, the breadsticks deteriorate

in quality.

Olive Garden uses 675 million – 700 million

breadsticks a year across all their restaurants (average

of 3 per customer). The average customer does not

consume 3 breadsticks, leading to massive

unnecessary waste.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320881)

container of the industry.

To-Go bags are

made with high-end

materials adding

25-30% cost above

competitors’ To-Go

bags

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320886)

containers

need to be

dishwasher

safe?

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320889)

up to 90 minutes, but if a store is already at its labor hour cap, Darden’s corporate policies encourage GMs to turn

away hungry customers rather than staff additional servers during peak hours.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320904)

– Innovation and use of technology must improve to

keep up with current industry trends.

Darden did not even own the ad space on Google for Olive Garden

until recently. When we searched “olive garden” in May 2014, the

first sponsored link was for Carrabba’s!

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320921)

– Several competitors in both the fast casual and casual dining segments have focused more attention on higher

margin adult beverages as they look to expand check average and traffic.

– For example, Chili’s 2013 adult beverage mix totaled 14% (as compared to 12.8% in 2010).

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320931)

2013 alcohol sales as a % of total sales for casual dining restaurants Bonefish 24% Buffalo Wild Wings 22% Bravo Brio Restaurant Group 18% Maggiano's 17% Carrabba's 16% Applebee's 15% Romano's Macaroni Grill 15% Chili's 14% Cheesecake Factory 13% Joe's Crab Shack 13% Outback Steakhouse 11% Ruby Tuesday 11% Texas Roadhouse 11% LongHorn Steakhouse 10% Olive Garden 8% Red Lobster 8%

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26320970)

We believe Olive Garden has false waits at these peak times due to execution errors, particularly slow table turns.

 A successful casual dining restaurant can clean a table and set it for the next guest within 1 minute of the previous guest

leaving, but Olive Garden takes 3-5 minutes to turn their tables on average.(2)

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321062)

pg 152 - Tablets create a much more efficient dining experience and can reduce dining times by 5-10 minutes

per table (allows the guest to pay whenever ready instead of waiting for the server).(4)

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321065)

– Shockingly, Olive Garden no longer salts the water it uses to boil the pasta, merely to get a longer warranty

on its pots.

 This appalling decision shows just how little regard management has for delivering a quality experience to

guests.

– We believe this results in a mushy, unappealing product that is well below competitors’ quality despite similar cost.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321068)

Before

Olive Garden used to offer dishes such as:

Pork Filettino (a tender grilled tenderloin

served with roasted vegetables)

Lobster Spaghetti (had a marvelous flavor

and was loved by guests)

Tortellini Fizzano (authentic pasta dish from

Olive Garden’s Riserva di Fizzano restaurant

located in an 11th century village in Italy)

Now

Fried Lasagna Fritta?

“Tuscan” White Bean Hummus?

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321072)

Olive Garden’s

Yelp reviews are

low in middle

America, which

represents their

core customer

base.

Olive Garden national average 3.03

Peer national average 3.27

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321078)

a high quality producer who will be able to manufacture recipes and distribute the product (e.g. a perfect “Quality up, cost down” opportunity is with the

soups)

i don't see why you are focusing on the soups either. there is plenty of other stuff in there about improving quality that has nothing to do with outsourcing.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321103)

Commercial leases for something like that are typically pretty long (10+ years) and they often have renewal options that are pegged on some roughly objective and non-discretionary measure.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26321525)

its "bad" because they don't pay rent, which means their profits per store are higher, and then they point to those high profits as if they're an example of their execution genius. they compare those profits to competitors who lease their stores, and use that to mask the fact that they actually have restaurants that significantly underperform the competition by a fucking longshot.

its basically like your friend who lives rent-free in his moms basement telling girls he's a better catch than you because he's able to afford a 5 series lease with all his free cash flow while you're stuck paying a mortgage/rent like a god damn loser

also its just not tax/economically efficient to own the real estate, because REITs have big tax advantages that makes, all else equal, a parcel of real estate held in a RIET simply worth more than a parcel of real estate held by anything else.

(http://www.autoadmit.com/thread.php?thread_id=2673326&forum_id=2#26329664)