Restaurant workforce demographics are shifting

The teen labor force participation rate declined sharply in recent years, a development that directly impacted the restaurant workforce.  Although restaurants are still the economy’s largest employer of teenagers, the shrinking teen labor pool has led many restaurant operators to look to alternative age cohorts to fill their staffing needs, according to the NRA’s chief economist Bruce Grindy.  His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.

The Great Recession and its aftermath had a significant impact on the U.S. labor force. The labor force participation rate fell to a 37-year low, with many people who lost jobs deciding not to return to the workforce. Contributing to this decline was the retirement of baby boomers, as well as a growing proportion of teenagers choosing to remain on the sidelines.

As the nation’s second largest private sector employer, the restaurant industry was directly impacted by these shifting labor demographics in recent years. Of significant note for the restaurant industry was the sharp decline in the teenage labor pool.

At its peak in the late 1970s, roughly 58 percent of 16-to-19-year-olds were in the labor force. This participation rate remained above 50 percent until 2001, when it started trending downward. The Great Recession exacerbated this decline, with the teen labor force participation rate plunging from 41.3 percent in 2007 to just 34.0 percent in 2014 – a record low.

The net effect was a decline of 1.4 million teenagers in the labor force between 2007 and 2014, a development that was reflected in the restaurant workforce. In 2007, 16-to-19-year-olds represented 20.9 percent of the restaurant workforce. By 2014, these teens made up only 16.6 percent of restaurant employees. 

To be sure, the restaurant industry is still the economy’s largest employer of teenagers, providing jobs for 1.5 million individuals between the ages of 16 and 19. Put another way, one-third of all working teenagers in the U.S. are employed in a restaurant. However, the shrinking teen labor pool has led many restaurant operators to look to alternative age cohorts to fill their staffing needs.

With teen representation in the restaurant workforce declining, a majority of the new restaurant jobs went to millennials in recent years. The share of restaurant jobs held by 20-to-24-year-olds rose from 21.4 percent in 2007 to 24.2 percent in 2014, while 25-to-34-year-olds also took on a larger role in the restaurant workforce.

Although older adults still make up a relatively small proportion of the restaurant workforce, they were the fastest growing demographic group in recent years. In fact, the number of adults aged 55 or older working in the restaurant industry jumped 38 percent between 2007 and 2014, an increase of 218,000 individuals. This trend is expected to continue in the years ahead, as older adults make up a larger share of the U.S. labor force.

American palates growing more adventurous

Nine in 10 restaurant operators say their guests are more knowledgeable about food than they used to be and pay more attention to food quality than just two years ago, according to the National Restaurant Association's (NRA) 2015 Restaurant Industry Forecast.

"As dining out has grown into an everyday activity over the last few decades, we essentially have become a generation of 'foodies' with a much wider base of experience and trial of new cuisines and flavors than previous generations," said Annika Stensson, director of research communications for the NRA. "Growth of international travel and increased diversity of cuisines offered here at home have driven today's diners to be more adventurous and generally more willing to try new things when dining out."

NRA research shows that 64 percent of consumers consider themselves more adventurous in their food choices when dining out now than just two years ago. This sentiment is even stronger among millennials, where 77 percent consider themselves more food adventurous. 

Seventy-two percent of consumers also say that restaurant food provides tastes and flavors they can't duplicate at home, which especially true for global cuisines. Roughly seven out of 10 consumers say they are more likely to try ethnic cuisines in a restaurant than they are trying to cook such dishes at home.

The rise of ethnic cuisines has been evolving for decades, resulting in ethnic cuisines and flavors increasingly making their way onto mainstream menus. Currently, more than a third of restaurant operators say they offer ethnic cuisine items outside of their main menu theme, with the highest number reported among fine-dining restaurants (51 percent) and casual-dining restaurants (48 percent). In addition, a majority of operators believe this will become even more common in the future. 

40 hours is full-time

The Affordable Care Act needs a check-up, the National Restaurant Association and American Hotel & Lodging Association said in a joint op-ed today.

One top concern: The health care law defines full-time as 30 hours a week.

"The ACA changed the definition of a full-time employee from someone who works the traditional 40-hour workweek to anyone who works 30 hours a week," NRA President & CEO Dawn Sweeney and AH&LA President & CEO Katherine Lugar write in The Hill. "Instead of benefiting workers, this provision is actually harming them ... Businesses of all sizes are having to reduce the hours of workers who had been working 40 hours a week."

The ACA's full-time definition affects which businesses are considered large employers, and which employees must be offered health coverage. The law exposes large employers to possible fines if they don't offer health plans to full-time employees and their dependents.

The ACA's so-called "employer mandate" covers businesses with the equivalent of 100 full-time employees this year, and employers with 50 to 99 full-time-equivalent employees starting in 2016.

The NRA supports bringing the ACA's definition of full-time employment more in line with traditional workplace standards. The House passed a bill in January to make the change, and more than 30 senators are now sponsoring the bipartisan "Forty Hours is Full Time Act" in the Senate. The NRA is a lead member of the "More Time for Full Time" initiative.

Read more about the impact of the ACA's 30-hour definition on restaurant and hotel employers.

Patent trolls are still coming after restaurants, and yours could be next

If your restaurant hasn’t been on the receiving end of a legal shakedown from a patent troll, your time may be running out.

Over the past few years, patent trolls—companies that purchase vague patents and threaten to sue restaurants and other businesses that don’t pay licensing fees for their use of common technologies—have cost the economy more than $20 billion a year. The number of lawsuits is on the rise. Patent Freedom, which collects data on patent troll activity, reports that 3,716 companies faced lawsuits from patent trolls in 2013, up from 3,352 the year before. 

And patent trolls aren’t just going after big companies. A 2012 study by Boston University researchers found that most defendants in suits brought by patent trolls were small or medium-sized companies—those that can least afford the often seven-figure costs of defending against patent infringement lawsuits.

Patent trolls have come after restaurants for common service-enhancing features like online ordering, in-store WiFi, and digital menu boards.

Seeking relief for restaurants

The National Restaurant Association (NRA) recently joined United for Patent Reform, a coalition of businesses and trade groups representing technology, retail, communications, construction and other sectors, to ask Congress to make changes to help end frivolous patent-infringement lawsuits.

Among other reforms, the coalition is seeking an end to vague demand letters designed to extract early settlements; clear, specific explanations from patent trolls regarding their interest in the patent; protections for the end users of products and technology; and requirements for patent trolls to pay plaintiffs’ legal costs when their infringement lawsuits are unsuccessful.

Help could be on the way in the form of the Innovation Act, recently introduced in the House by Rep. Bob Goodlatte (R-Va.). The bill aims to curb frivolous infringement lawsuits by requiring plaintiffs to disclose the owner of the patent and why they’re suing the defendant, as well as allow some of the costs of defense to be shifted to the plaintiff if the lawsuit is unsuccessful. The bill passed the House with bipartisan support in 2013 before stalling in the Senate.

Tell Congress to support legislation to stop patent trolls.

Is E-Verify expansion on the horizon?

The House Judiciary Committee has passed the Legal Workforce Act, a bill to require businesses to use the federal E-Verify system to determine whether an employee is eligible to work in the United States.

The committee’s sign-off is the first step in a long process that would be required before the measure could become law.

E-Verify use is currently voluntary. About 500,000 employers use it, and 23 states have laws requiring some or all employers to use the system. The National Restaurant Association supports a federal law requiring businesses to use the system, to free them from the challenge of complying with different state and local laws requiring E-Verify.

“Uniformity and consistency are the keys to helping grow our workforce,” said Angelo Amador, the NRA’s senior vice president of labor and workforce policy and regulatory counsel. “Actions by 50 different states and numerous local governments in passing employment verification laws create an untenable system for employers and their prospective employees. A standardized E-Verify system would strike the right balance with the employer community and provide clarity and certainty in their hiring decisions.”

The NRA believes a national verification system is a key part of immigration reform but only if the system protects employers’ flexibility and limits liability. The Legal Workforce Act addresses some of those elements, including:

No cost to employers: E-Verify would continue to be available for employers at no charge under the Legal Workforce Act.

A reasonable time frame: The Legal Workforce Act would phase in a federal mandate according to a business’s size. Businesses with more than 10,000 employees would have six months to implement E-Verify after a law is enacted. Businesses with 500 to 9,999 employees would have a year to begin using E-Verify. Businesses with 20 to 499 employees would have 18 months, and all other businesses would have two years.

Legal protection for employers: Businesses that used E-Verify in good faith wouldn’t be prosecuted for errors in the system that happened through no fault of their own.

State law preemption: The Legal Workforce Act would prevent states from enacting their own laws requiring E-Verify.

It’s not clear when the Legal Workforce Act will go before the full House of Representatives for a vote, and the legislation would still require the approval of the Senate and President Obama to become law.

Older workers on tap as teen labor dips

The restaurant industry is the country’s largest employer of teenagers, but that labor pool is shrinking so operators are looking at alternative age groups to fill the gap, National Restaurant Association (NRA) research has found.

According to the 2015 Restaurant Industry Forecast, restaurants currently provide jobs for 1.5 million people between the ages of 16 and 19. That means one-third of working teenagers in America today work at restaurants. Still, the number of teens in the overall workforce plunged from 41.3 percent in 2007 to 34.5 percent in 2013, a decline of 1.2 million individuals.

“The U.S. workforce continues to change, and the pool of restaurant job candidates with it,” said Hudson Riehle, the NRA’s senior vice president of research. “While the industry will remain an important training ground for young people getting their first job experience, it also provides opportunity for more seasoned workers looking for rewarding employment with flexible schedules.

In the wake of the decline in teen labor, more restaurant jobs have gone to older employees. In fact, the number of adults 55 or older working in the restaurant industry rose 32 percent during the same period, an increase of 180,000 individuals.

“Youth workforce participation has been declining for years, and teenagers have traditionally been a significant part of the industry’s workforce, often filling part-time and seasonal positions,” Riehle said. “However, aging baby boomers are staying in the workforce longer and filling some of those positions. And though older adults are a relatively small proportion of the industry’s workforce now, that number will only expand in future.”

6 factors consumers consider when choosing a restaurant

For consumers, choosing where to eat is a complex decision. Today’s diners are concerned about the quality of the food they're eating, but they're also looking at factors beyond food, like technology and a restaurant’s environmental impact. 

Here are six things consumers take into account when choosing a restaurant, according to the National Restaurant Association’s 2015 Restaurant Industry Forecast:

Healthier options: More diners are looking for healthful options when they dine out, and restaurants are responding to that demand. More than eight in 10 restaurants say their guests are paying more attention to the nutrition content of their food today than they were two years ago. Diners are also seeing more options from restaurants, and 81 percent of adults say restaurants offer more healthful options than they did two years ago.

Eco-friendly dining:  When they choose a restaurant, many consumers are thinking about the earth as much as their palates. Nearly two-thirds of consumers say they’re likely to consider a restaurant’s eco-friendly practices when they decide where to eat.

Technology: The number of consumers who say technology options like smartphone apps or self-service kiosks are an important factor in choosing restaurants is on the rise, up to about 25 percent from roughly 20 percent a year ago. The increase spans generations, with older and younger customers alike expanding their use.

Quality, innovative food: Nine out of 10 consumers say food quality is an important factor in choosing a restaurant, and six in 10 claim to be more adventurous diners than they were two years ago. More than half are looking for innovative meals that they can’t make at home.

Local foods: Locally sourced meats and seafood and produce were near the top of the list of the NRA’s Top 25 lists of 2015 tableservice and limited-service menu trends. Find out what else is on the list, including trends in breakfast, appetizers, desserts and classic favorites.

Ethnic cuisine: When diners crave ethnic foods, odds are they’re heading for a restaurant. More than two-thirds of consumers say they’re more likely to order ethnic foods at a restaurant rather than trying to cook it at home.

What’s ahead for restaurants in 2015? Get your copy of the NRA’s 2015 Restaurant Industry Forecast.

Bipartisan bill would bring restaurant taxes down—permanently

The U.S. House and Senate are considering bills that would put in place a 15-year tax depreciation schedule for restaurant improvements and new construction, leasehold improvements and retail improvements. If the legislation passes Congress and is signed by President Obama, it would mean the end of the uncertainty that has led restaurant operators across the country to put improvement projects on hold while they awaited word on the tax treatment of the projects.

Historically, Congress has renewed the 15-year depreciation schedule every year or two, but partisan battles last year delayed renewal until just before the year ended and only applied retroactively for 2014. Without action, improvements and new construction will be subject to a 39.5-year depreciation schedule.

National Restaurant Association (NRA) research shows that a 15-year depreciation schedule is more in line with reality for restaurant operators. A 2014 NRA survey of 1,000 restaurateurs found that a majority of restaurant operators said it was necessary to renovate or remodel their dining areas and kitchens a median of every five years. Only eight percent of restaurant operators said they could wait more than 10 years to renovate or remodel their kitchen area, while just six percent said they could wait more than 10 years to improve their restaurant’s dining area.

The issue has bipartisan support, with bills being introduced in the Senate by Sens. Bob Casey (D-Pa.) and John Cornyn (R-Texas) and in the House by Reps. Mike Kelly (R-Pa.) and Richard Neal (D-Mass.). The latest 15-year depreciation schedule expired at the end of 2014. Both the House and Senate are most likely to vote on permanent extension of the 15-year schedule as part of a larger package of tax provisions.

Economic impact

The economic benefits of a 15-year depreciation schedule are felt well beyond the walls of restaurants. NRA research conducted in 2012 found three in 10 restaurateurs had delayed renovation and construction projects because they weren’t sure how those projects would be taxed. Those projects stood to generate $23 billion in economic activity and create 200,000 jobs across construction and other industries.

Typical renovations eligible for the 15-year depreciation schedule include the building shell, electrical system, fire protection systems, lighting, security systems, ceramic tile, HVAC, plumbing, and restroom fixtures and accessories.    

Technology, lifestyle food choices evolving trends in 2015

Technology is a rapidly evolving trend for 2015. According to the National Restaurant Association’s 2015 Restaurant Industry Forecast, roughly one-quarter of consumers say technology options are important features that factor into their decision to choose a restaurant.

This is up from the nearly one-fifth the prior year that said the same, underscoring that technology quickly is becoming an expectation rather than a novelty when dining out. 

“Consumers – especially younger generations – have come to expect certain connectivity attached to their dining experiences, be it the ability to order restaurant delivery with a smartphone app, access wi-fi in their favorite coffee shop, or review menus and make reservations online,” said Hudson Riehle, the NRA’s senior vice president of research.

“While restaurateurs understand their guests’ desire for technology options and more are adopting various forms thereof, the cost and integration into existing store systems can still pose challenges,” Riehle said.

A gap remains between what consumers want and what restaurants currently offer. That gap is narrowing, though, and it will close further over the next several years as restaurant technology evolves and more options enter the marketplace.

Despite increased consumer use of tech, machines may be an inadequate substitute for the personal service that many consider to be the hallmark of dining out. NRA research clearly shows that consumers still want humans as part of their restaurant experience, yet look to technology to increase service speed and convenience.

Lifestyle choices

Another developing trend for 2015 is related to how today’s consumers tend to make lifestyle choices in a “big picture” kind of way and apply those preferences to a wide range of situations – including dining out. As Americans lead ever-busier lives with little leisure time, they want and expect menu options that allow them to adhere to their chosen life philosophies.

“As restaurants have become part of our daily lives, consumers want to stay consistent in their purchases across broad spending categories,” said Annika Stensson, the NRA’s senior manager of research communications. “Food choices very much fit into that pattern.”

“People who buy electric cars and eco-friendly household cleaners also look for environmental sustainability when picking a restaurant. And consumers who adhere to healthy lifestyles want to find nutritious options no matter where they choose to go without sacrificing convenience,” Stensson said.

NRA research shows that nine in 10 consumers say food quality is an important factor for choosing a restaurant, and six in 10 consider themselves more food adventurous now than two years ago.

Sixty percent of consumers say they are more likely to pick a restaurant that offers menu items that were grown or raised in an organic or environmentally friendly way, up from 55 percent the previous year.

In addition, consumers are showing increasing interest in local sourcing, and more restaurateurs are taking notice. More than eight in 10 tableservice operators say their guests are more interested in locally sourced items this year, compared with seven in 10 who said the same a year earlier. And, 69 percent of consumers say they are more likely to visit a restaurant that offers locally produced food items. That’s up 5 percentage points from what consumers said a year earlier.

Meanwhile, eight in 10 of consumers say restaurants offer a wider variety of healthy menu options now compared to two years ago, and three-quarters say they are more likely to visit a restaurant that offers healthy options; seven in 10 say they also order more healthful options in restaurants than they did two years ago.

For additional information and to buy the 2015 Restaurant Industry Forecast, visit Restaurant.org/Forecast. 

Riehle: Food costs will remain a top challenge in 2015

The restaurant industry is set to post record sales and employ 10 percent of the total U.S. workforce in 1 million locations this year, according to the just-released 2015 Restaurant Industry Forecast. Food costs will remain a top challenge for restaurant operators this year, says Hudson Riehle, the National Restaurant Association's senior vice president of research. Watch him summarize additional key points from the report. 

Positive outlook for 2015 for U.S., Louisiana restaurant industry

The restaurant industry will reach some landmark numbers in 2015 – more than $709 billion in sales, one million locations and 14 million employees - according to the National Restaurant Association's (NRA) 2015 Restaurant Industry Forecast released today.

The good news: sales growth is expected to accelerate and represent the sixth consecutive year of real (inflation-adjusted) sales growth for the industry.

The bad news: growth rates are still modest in historical terms, as the economy continues its struggle to reach normalcy after the Great Recession, begging the question “Is this the new normal?”

It might just be. America’s restaurants are expected to post record sales and continue to be a leading job creator in 2015, but the operating environment will remain challenging due to the slower-than-normal economic recovery after a recession, as well as rising costs.

“Population growth and Americans’ continued desire for convenience and dining out continues to fuel industry growth,” said Hudson Riehle, senior vice president of research for the NRA. “Certain components of the business climate remain a challenge, however, as regional variability in employment levels and disposable income gains still put a damper on the overall environment.”

“Total restaurant industry sales are expected to advance at a 3.8 percent rate this year. That’s lower than the compound, pre-recession annual sales growth rate the industry experienced, but still a positive sign that the industry is in a better place now than six years ago,” Riehle said.

Sales in the tableservice segment are expected to reach $220 billion in 2015, a 2.9 percent gain over 2014 sales, while sales in the quickservice/fast casual segment are projected to grow by 4.3 percent and reach $201 billion.

Looking at the state level, the top five states for restaurant sales growth in 2015 are Arizona, Florida, North Dakota, Texas, and Colorado. Louisiana's projected sales revenue for 2015 is up to $7.3 billion, 3.6 percent over 2014 with $7 billion. 

Job gains expected in 2015 and over next decade
As sales growth improves in 2015, restaurant industry employment will perform even better. In fact, this will be the 16th straight year in which restaurant industry employment growth will outpace overall employment growth.

Restaurants will employ 14 million individuals this year as the nation’s second-largest private sector employer, representing one in 10 working Americans. In Louisiana this year, total restaurant industry employment is projected to exceed 203,000 and reach nearly 220,000 by 2025, an additional 16,600 new positions. 

Eating and drinking places – the largest subcategory of the foodservice industry – are projected to add jobs at a 3.2 percent rate in 2015, a full percentage point above the projected 2.2 percent gain in total U.S. employment.

In addition, the NRA projects that restaurant industry employment will reach 15.7 million by 2025, an increase of 1.7 million positions during the 10-year period. Over that decade, the top five states for restaurant employment growth are Arizona, Florida, Texas, Georgia, and Utah. 

Challenges include food costs, increased labor competition
While the restaurant industry is expected to grow this year, operators will continue to face a range of challenges, according to the NRA’s forecast. The top challenges cited by restaurateurs include food costs, building and maintaining sales volume, the economy, and recruiting and retaining employees.

Food costs continue to put pressure on many restaurateurs’ bottom lines.  Average wholesale food prices jumped more than 5 percent in 2014, which represented the fifth consecutive annual increase. During the last five years, average wholesale food prices rose roughly 25 percent.  Operators can expect to get pricing relief on several of the major commodities in 2015, including dairy and pork.

Restaurants are expected to spend $253.6 billion on food-and-drink purchases this year.

New tool will help zap food waste

The National Restaurant Association and LeanPath have teamed up to offer Association members a 10 percent discount on Zap, LeanPath’s food-waste prevention program.

The first 25 NRA members who sign up receive a free 60-day subscription.

“Our goal is to make it easier and more affordable for restaurateurs to prevent food waste,” said Jeff Clark, program director for the NRA’s Conserve sustainability program. “Many operators either don’t know how to get started or don’t think they have the money to install expensive tools to do it. This is a manageable way of making this environmentally responsible tool available to them.”

LeanPath says its goal is to help restaurateurs cut food waste before it’s generated, in an easy-to-use way that doesn’t take a lot of time.

“If we can help operators reduce food waste before it happens, that would be best financially and environmentally,” said Janet Haugan, the company’s director of marketing. “We want to make the process understandable and easy to digest. Zap will not only show operators what and how much they’re wasting, but how to prevent it from happening.”

LeanPath research indicates that approximately 4 percent to 10 percent of food purchased by foodservice operations is thrown out before it can be plated. Some of top reasons: overproduction, spoilage and excess trimming of meat and vegetables.

“If we can help capture some of what is being thrown out and put that back on the bottom line, restaurateurs will reduce food costs by 2 percent to 6 percent,” she said. “That is a significant savings.”

Haugan said LeanPath’s typical client ends up reducing kitchen waste by at least 50 percent.

The Zap program is available in three levels: 

• Zap Basic, which costs $69 per month and is designed for small operator who spend less than $300,000 a year on food
• Zap Connect, which costs $129 per month and provides the operator with more detail and customization
• Zap Enterprise, which costs $229 a month and is recommended for chains with 10 or more units

Subscribers get access to:

• LeanPath Online, a web-based reporting dashboard that records top-wasted foods, food waste by meal or day of week, and the top reasons for food waste.
• Automatic weekly emails summarizing waste and prevention opportunities from the prior week.
• A measurement and record of food waste on an ongoing basis. This allows restaurateurs to reduce waste by adjusting what they buy, how they produce it, what’s on the menu, and how they train staff.

Visit Conserve for more information on the program and sustainability solutions for the restaurant industry.

Pork prices down, but chicken flies high

Restaurateurs can expect some relief in the price of pork as producers increase supply, but the cost of poultry should remain high due to increased demand, industry experts say.

“Pork prices are beginning to return to normal, thanks to the stabilization of the pig virus outbreak that plagued producers last year,” said restaurant commodities expert John Barone. “The virus still exists, but two things are happening right now: first, there are two vaccines that seem to be working to a degree. Second, it looks as though the sows that contracted the virus and passed it along to the piglets in their litters have developed antibodies that are fighting off the spread of the disease.”

According to Barone, resistance to the virus is resulting in bigger herds and lower prices.

“The numbers are going in the right direction,” he said. “We’re expecting a good amount of pork supplies by the second half of the year and prices are forecast to be down double digits percentagewise.”

Barone added that U.S. Department of Agriculture estimates indicate pork prices have already decreased nearly 18 percent over 2014 levels.

Hudson Riehle, the National Restaurant Association’s senior vice president of research, said higher wholesale food prices last year put pressure on operators and relief this year would be welcomed.

“The intensity of the pressure related to higher wholesale food prices has been easing for some operators as prices on certain commodities seem to be moderating,” he said. “But, because overall food costs have increased for several years, prices in general remain elevated. The impact on operators can vary depending on what’s on their menus. For example, beef prices are expected to advance, but pork costs are likely to drop. That will give operators something of a break for now.”

Barone noted that poultry production is on the rise and prices are reflecting the increase. That could change, however, if demand grows.

“Chicken could result in a bit of a tug of war this year,” he said. “There will be a lot more supply, but also a lot more demand. Because of the high cost of beef, anybody who can use chicken for every [limited time offer] out there is going to. Operators last year couldn’t get enough given the increased demand resulting from the shortages in beef and pork supplies. They couldn’t even plan LTOs that required additional chicken volume, especially on breasts or wings. This year, there’s going to be extra availability and more demand, but the price ‑ because of that demand ‑ is going to be close to year-ago levels.”

In 2014, poultry prices averaged around $1.12 per pound, according to USDA estimates.

Leasing terms: up for negotiation

The National Restaurant Association's Manage My Restaurant has articles in categories such as Marketing and Sales, Workforce Engagement, Food and Nutrition and Operations. Visit Manage My Restaurant here for this and other helpful tips.

If you're ready to sign a lease because you've agreed on a monthly price, think again. The typical restaurant lease is 20 to 40 pages with provision after provision. When negotiating a lease, look beyond your monthly payment to ensure you protect your assets and control your costs.

An experienced retail commercial broker can help negotiate terms, often at no cost to you, because landlords typically pay broker commissions. It’s also wise to have a lawyer review the lease. You might be living with this document for 15 years or more, given renewals.

“It’s worth paying an attorney up front to make sure you have the best protection,” says Richard Muhlebach, a retail broker working in the Seattle and San Francisco areas. This article isn't intended as legal advice; seek legal counsel as needed.

“When negotiating lease terms, you must decide what’s essential, and be prepared and willing to stand your ground. It’s rare that you have to be at a particular site,” says attorney Gregory Apter, president of Hilco Real Estate, where he’s helped hundreds of clients negotiate leases. “Prioritize, weigh the costs and benefits before making concessions and then be willing to stick to your plan,” he advises.

Here are nine negotiable items to consider before signing on the dotted line:

Percentage rent. Some leases require “percentage rent.” Once a tenant’s sales reach a certain level, the tenant must pay the landlord a percentage of the restaurant’s revenue. “I’m not a big believer in percentage rent if it can be avoided,” Apter says. “It’s generally no one’s business but yours as to how you are performing.” Sharing this information can hurt future negotiations. “If the landlord knows the financial performance of a particular retail location, it can materially­—and negatively—impact your future flexibility,” he says. Nonetheless, percentage rent is fairly common. If you ultimately agree to it, negotiate the terms.  

Exclusivity and radius restrictions. Try to preclude direct competition in the same shopping area. It’s unusual to block all restaurants, but you might negotiate exclusivity within a category, such as pizzerias or burger joints. On the other hand, your landlord might want to impose radius restrictions, preventing you from opening another unit close-by. “Try to avoid these restrictions, which impinge on your business’s flexibility, Apter says. 

Assignment and subletting clauses. You’ll want the right to sublet or assign the space to another tenant, should you need to close or sell your restaurant. Avoid restrictions that require the transferee to have the same net worth or experience as you, advises retail broker Muhlebach. 

Option to renew. “Negotiate for as many options as you can get,” says Muhlebach. “An option is an obligation for the landlord and a right for the tenant.” Avoid making renewal contingent on your remaining the tenant, or your resale value will plummet, advises real-estate consultant Lewis Gelmon, president of Gelmon Enterprises based in San Diego.

Tip: You can negotiate renewal terms, rather than automatically taking your option to renew. Gelmon suggests starting negotiations early. “If you don’t like the way negotiations pan out, you still have the right to exercise your option to renew.”

Future rent prices. Negotiate future rent terms. Prices tend to be based on percentage increases or tied to fair market value. Given a choice, opt for percentage increases because they’re easier to budget for, Muhlebach advises. Otherwise, you could be shocked with a large increase.

Kick-out clauses. Consider negotiating for a kick-out clause, giving you a one-time right to cancel a lease after a specified time period if your sales haven’t surpassed a certain amount.

Start date of rent. Many landlords will waive rent payments during the build-out period. Typically they’ll waive payments for 60 to 90 days or more, or until you open for business, whichever comes first, says New York City restaurant real estate broker Frank Glasgall, of Glasgall & Associates. Consider asking to delay the clock from ticking until you get a building permit, Muhlebach advises.

Change of use. Try to maintain flexibility so you can change concepts if needed or can sublease/assign the space to a different business, Apter says.

Operating expenses. Negotiate whether you or the landlord are responsible for operating expenses, including property taxes, insurance and management fees. “Some landlords add in zingers that aren’t industry standard,” Muhlebach says. Watch out for administrative fees and capital improvement costs. “You’ve got to catch those things,” Muhlebach urges. “Once they’re in black-and-white and you’ve signed the lease, you have to hold up your end of the deal.”

BBQ, Italian food and fried chicken are top perennial menu favorites in 2015

Following the latest food and menu trends is important to planning menus strategically, but that doesn't mean that popular staples should be ignored. According to the National Restaurant Association's What’s Hot in 2015 culinary forecast, barbecue, Italian cuisine and fried chicken top the list of perennial menu favorites for the coming year.

"Just because something isn't considered trendy doesn't mean it's not popular," said Annika Stensson, the National Restaurant Association's senior manager of research communications. "The general themes we're seeing in the top perennial favorites are items that many would consider to be in the comfort foods category. And there's a reason these foods are tenured menu favorites - they have appeal with a wide range of diners and occasions. Many are also quite versatile and can fit into different restaurant concepts, menu themes and dayparts."

Rounding out the top 10 perennial favorite items are French toast, frying, oatmeal, comfort foods, fruit desserts, pulled pork, and chicken wings. 

Further down the list of favorites to spots 11 through 20 are milkshakes, hot tea, Eggs Benedict, Mexican cuisine, zucchini, waffles, bacon, macaroni and cheese, doughnuts, and bread baskets.

Additional items that registered as long-time favorites include kids' pizza, French cuisine, grilled vegetables, grits, cauliflower, brussels sprouts, smoothies, and Mediterranean cuisine.

The NRA surveyed nearly 1,300 professional chefs – members of the American Culinary Federation (ACF) – to identify trends on restaurant menus in 2015. The survey asked the chefs to rate 230+ items as a hot trend, yesterday's news, or perennial favorite. 

Chefs grow lukewarm to insects, foam and gazpacho

Nothing lasts forever, including food trends. What was hot yesterday might now be yesterday's news. The National Restaurant Association's What's Hot in 2015 culinary forecast identifies food and drink items that are no longer trending on menus. For 2015, insects as an alternative protein, foam garnish, and chilled tomato soup top the list of yesterday's news.

Rounding out the top 10 list of things that were trendy at one time, but professional chefs now believe are not anymore, are bacon-flavored chocolate, popovers, mini-burgers/sliders, molecular gastronomy, edible flowers, flavored water, and tater tots. Further, sweet-potato fries, fun-shaped kids' items and liquid-nitrogen freezing also ranked high on the yesterday's news list.

"When an item is losing ground as a hot trend, it can go one of three ways. It can move toward becoming a perennial favorite on menus - something that is timelessly popular. It can bounce back as trendy soon after dipping as a yo-yo trend that hasn't quite found its place yet. Or it can fade away further to become a fondly remembered thing of the past," said Annika Stensson, the National Restaurant Association's senior manager of research communications. "Only time will tell which way this year's yesterday's news items will go."

In addition to identifying yesterday's news items, What's Hot in 2015 chef survey also analyzes items that have lost the most momentum as hot trends since the previous year's survey. Some of those items still show up toward the top of the hot trends list, but fewer chefs now rate them as a hot trend, indicating that they are cooling off. For 2015, bruschetta, kale salads and nose-to-tail cooking each lost 10 percentage points in their hot-trend rating. In addition, hybrid desserts, house-made soft drinks and gluten-free cuisine lost ground. 

In the What's Hot in 2014 survey, nose-to-tail cooking had gained 16 percent as a hot trend, making this year's drop less severe. However, Greek yogurt lost 11 percent in its hot-rating in last year's survey, and another 6 percent this year.

The NRA surveyed nearly 1,300 professional chefs – members of the American Culinary Federation (ACF) – to identify trends on restaurant menus in 2015. The survey asked the chefs to rate 230+ culinary items as a hot trend, yesterday's news, or perennial favorite. 

Want to blaze new sustainable trails in 2015? Here's how

Laura Abshire, the National Restaurant Association’s director of sustainability, recently attended the Last Food Mile conference at the University of Pennsylvania in Philadelphia. There, she discussed the Association’s Conserve program,   the issue of food waste, the Food Waste Reduction Alliance — of which she is co-chair — and making the business case for sustainability.

Why did the NRA start the Conserve program?

We started it to give operators the tools they needed to make their businesses more sustainable.  We believe in educating the industry on sustainable practices. Conserve is open to everyone, not just the association’s members. Before we began in 2009, there wasn’t really any place for restaurants to go to for information on this topic.

What is the biggest difference today in comparison to when Conserve began?

The program originally focused on energy and water conservation and some packaging issues. Food waste was just a part of it. But in the last few years we’ve been putting much more emphasis on that problem.

We also now have an advisory council – the Conserve Sustainability Advisory Council – which is made up of representatives from restaurant companies immersed in practicing sustainability at a high level, like Chipotle and Starbucks. They’ve really figured out how to apply some best practices at their stores so we’re taking our cues from them to figure out what more we can do moving forward.

You’ve become involved in the Food Waste Reduction Alliance. What is that?

The FWRA is an industrywide collaboration between the Grocery Manufacturers Association, the Food Marketing Institute and the NRA.  The partnership began in 2011 as part of an effort to see how the industry could work to reduce, reuse, and recycle food waste together.  Since then, we’ve worked to support those goals by sharing best practices and producing tools the industry can use in their daily operations.

What’s one of the biggest lessons learned from participating in the FWRA?

We’ve found there are several barriers to eliminating food waste and increasing food donation. Whether it’s perceived or real, a lot of manufacturers, retailers and restaurateurs think there are difficulties in reducing food waste and we want to overcome that. We need to train our staffs better, have the infrastructure built out and make it something restaurateurs really care about. To do that, we have to make the business case for them, show they can save money and that their customers will really enjoy the restaurant experience because of it. But beginning to track food waste – that’s the most important piece. Also, the FWRA recently released its newest assessment on food-waste reduction. We found barriers to donation and recycling differ based on the size of the restaurant.

What technologies are available to help restaurants track food waste?

Conserve just partnered with LeanPath, which specializes in reducing commercial food waste, to give our members access to a program that will help them track and reduce food waste at their restaurants.

What’s important for restaurateurs to know about food donation?

A lot of them don’t know if they donate food there’s a tax write off for doing so. Also, under the Good Samaritan Act, restaurateurs are protected against liability claims associated with donating food. We’re trying to let them know that participating in these programs not only benefits them financially, but helps their communities, too. It’s a win for everyone.

Congress gives restaurants temporary tax relief

Congress’ passage of a bill to renew four tax provisions that stand to have a direct impact on restaurant operations was a welcome relief after a year of uncertainty.

But unfortunately, the move only provides a temporary fix. While President Obama is expected to sign the bill into law soon, the tax provisions—commonly known as “tax extenders”—were renewed only for 2014 and will expire again when the year ends.

“While we are relieved by the Senate’s action and Congress’ decision to retroactively renew these key tax extenders and appreciate the members of Congress who secured this outcome, a return to the uncertainty surrounding taxes that has persisted over the past year is unfortunately only weeks away," said Scott DeFife, National Restaurant Association executive vice president of policy and government affairs. "This uncertainty is causing restaurateurs across the country to postpone decisions that would help them expand their business and create jobs."

Included in the bill were four of the NRA’s tax priorities:

• 15-year depreciation schedule: This allows restaurant operators to depreciate the cost of certain renovations, improvements, and new construction over 15 years. Had the bill not passed, any projects launched in 2014 would have been depreciated over 39.5 years.   
• Work Opportunity Tax Credit: Businesses will be able to claim tax credits of $2,400 to $5,600 for hiring employees from demographic groups who historically have a hard time finding employment.
• Enhanced charitable food donation: All restaurants can utilize this deduction to help offset some of the costs of storing and transporting food they’re donating to charity. 
• Section 179 expensing: Restaurants and other businesses can qualify for up to $500,000 in new deductions if they financed less than $2 million worth of new or used business equipment, software and qualified real property in 2014. Without the renewal, the deduction would have been capped at $25,000.

Legislation to permanently extend of these four provisions is one of the NRA’s top advocacy priorities for 2015.

Congress has historically renewed tax extenders with little fanfare, but dysfunction and gridlock over the past two years put renewal on the back burner until the final days of business for both houses of Congress.