Happy Friday! 

Here’s a headline that feels like a game of Mad Libs: “Minor League Players Accused of Insider Trading in Del Taco.”

Yes, according to an SEC lawsuit, four current and former minor league baseball players allegedly traded on inside information pertaining to Jack in the Box’s 2021 purchase of Del Taco.

The lawsuit states that after one player was told about the deal by a former college teammate, he shared the news with three baseball buddies, and all four bought out-of-the-money call options on Del Taco stock. They made about $190,000 in profit after Jack in the Box (publicly) announced the acquisition. Now the SEC is trying to claw back the money, along with fines.

The four did try to cover their tracks, according to Bloomberg, by “texting each other … that Del Taco was a great investment opportunity.” Texted one: “Check out this stock guys Del taco, this chart is looking bullish to me. Might try to gamble on some options or something.”

He added, “I love to eat at del taco,” which, yeah, who doesn’t?

3 Numbers

380

Percentage increase for Wingstop’s stock over the past five years. The stock (Wingstonk?) has doubled over the past year, thanks in part to Wingstop’s historically good 2023 (18.3% same-store-sales growth for the year).

$365 million

Price paid by One Group Hospitality for Benihana (including debt). With the acquisition, One Group, which also owns the STK and Kona Grill chains, will now own 168 locations generating $900 million in annual sales. The company sees a pathway to $5 billion in systemwide revenue, which would place it, as Restaurant Business says, “in league with major full-service conglomerates like Bloomin’ Brands, Brinker International and Texas Roadhouse.”

18

“Golden tickets” awarded to general managers and head chefs at Snooze, an A.M. Eatery (had to hit ‘em with the full brand name). The innovative employee perk includes cash bonuses, a month of PTO, and “life enrichment dollars” that can be put towards a family vacation or passion project. All told, the 18 tickets are worth over $700,000.

What’s In the News

A potentially huge development in the now 20-year legal battle between merchants and credit card companies, via Restaurant Business:

The credit card companies call the agreement the “biggest in U.S. antitrust history” and are pegging the savings to merchants at $29.79 billion.

But the National Restaurant Association — which has been lobbying legislation currently before Congress that would foster competition against Mastercard and Visa — says not so fast:

According to the NRA, swipe fees now rank below just food and labor among restaurants’ highest costs. Merchants paid over $90 billion in fees in 2022 (that’s up from around $30 billion in 2012).

So, regardless of what happens in Congress, a five-year freeze on additional rate increases could be significant. Just a few months ago, the industry reacted with disbelief when news broke that the credit card companies were planning to increase merchant fees. This settlement, at the very least, puts a pause on those plans for the near future.

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After a successful test at 160 locations, McDonald’s will begin selling Krispy Kreme donuts nationwide, with the rollout expected to be complete by the end of 2026.

Via CBS News:

Don’t sleep on this detail: Krispy Kreme will deliver donuts to McDonald’s locations each morning. That shows the belief the company has in its “DFD” (delivered fresh daily) distribution network (as well as its ability to ramp up donut production over the next two years).

McDonald’s franchisees will have the option to decide whether to offer donuts, but it seems like a good bet that a good portion of the 13,500 locations will opt-in; Krispy Kreme expects the deal to “more than double the locations where Americans can buy Krispy Kreme products.”

Headlines

Chick-fil-A cited supply availability as a reason why it’s modifying its far-reaching stance towards antibiotics — it will now serve chicken treated with animal antibiotics (but will still bar the use of antibiotics that treat people). Panera suffered a multi-day digital outage. Starbucks ended its Odyssey NFT rewards program. DoorDash made some high-profile AI hires to help grow its voice ordering product. Darden posted its first same-store-sales decline since the pandemic (albeit against very strong 2023 comps). Union Square Hospitality Group launched an e-learning platform for a wider audience. Pizza Hut CEO David Graves is leaving the company. Wendy’s is testing drone delivery.

Name That Menu Item!

Perhaps Ray Kroc’s most (in)famous creation, this menu item was introduced in 1962 as a Hawaiian-themed “burger” aimed at customers observing Lent. An alternative option, the Filet-o-Fish, proved much more popular.

What was the name of this sandwich?

Last week’s answer: Nando’s Peri Peri

#Content Recs

• How hotels are making it easier for delivery drivers to get meals to your room.

• The franchises cutting jobs and hours ahead of California’s minimum wage increase.

• What happens when crashes and cyberattacks affect restaurant tech platforms.

‘Member When?!

It’s time to talk about the Spongmonkeys.

In 2004, two, uh, creatures — one wearing a bowler hat, the other adorned with a Napoleonic tri-corner — burst onto our TV screens. Who were they? What did they want to tell us?

“We love the subs,” they sang. “Cuz they are good to us.”

According to a fascinating 2019 Huffington Post article, the Spongmonkeys originated in a 2003 online video called “We Like the Moon,” which was created by writer and animation director Joel Veitch. An exec at Quiznos’ ad firm saw the video, somehow “decided it was perfect for a new campaign” and launched a series of commercials centered around the Spongmonkeys.

The Spongmonkeys were immediately divisive — many Quiznos franchisees weren’t happy with the campaign, and, according to a 2004 AdAge article, the brand “received as many as 30,000 calls the first week.” They have since showed up on Time’s list of the “Top 10 Creepiest Product Mascots,” and in some ways they became emblematic of the troubles Quiznos would soon have — most articles about Quiznos’ store closures cite the Spongmonkeys as a quasi-Big Bang event that precipitated the chain’s fall.

But perhaps they were just ahead of their time. In an era when restaurant marketing is much more Internet-native — think of the Wendy’s Twitter account or McDonald’s Grimace Shake — the Spongmonkeys probably wouldn’t look too out of place if they were introduced today. And in fact, Quiznos did re-introduce them last year in a campaign asking customers (and prospective franchisees) to “Bring Quiznos back.”

Like the writer of the Huffington Post article, I’ve never stopped thinking about the Quiznos Spongmonkey commercials. And twenty years later, the line “They’ve got a pepper bar!!” still gets me. There’s something hypnotic about these rat-human hybrids. I suppose that’s good marketing.

Thanks for reading! We’ll be back next Friday with a recap of industry news.

Andy