BUS 300 – Fall 2017
Writing Assignment #1
RightFoods, Inc.
Instructions
You are an analyst for RightFoods, Inc., a publicly-traded corporation that owns several casual
dining and fast food chains. Your boss has asked you to write a memorandum to RightFoods’
Board of Directors in which you will recommend a plan for one of RightFoods’ subsidiaries. Your
recommendation should be presented in the Two-Criteria, Two-Alternative Decision Template
(handout).
For purposes of this assignment, you should assume that Applebee’s, Chili’s, Red Lobster,
Chipotle, and Panera do not exist. Do not include any outside information, e.g. data, studies, or
reports, in support of your recommendation. Therefore, only the relevant criteria and facts from
this business scenario prompt and your own reasonable inferences from those facts may be used
in your final analysis. However, to understand the business concepts implicated in this prompt,
you may find it necessary to conduct outside research for the sole purpose of familiarizing yourself
with those concepts and effectively analyzing the prompt. You are strongly encouraged to conduct
such research.
Your memorandum should include a proper memorandum heading (i.e. “To”, “From”, “Re”, and
“Date” lines). In addition, you should use Times New Roman 12-font type with one-inch margins
and double-space your memorandum. The word count for this assignment is a minimum of 500
words and a maximum of 800 words (exclusive of the memorandum heading and any interim
headings). You will not receive credit for any submissions below 500 words.
Upload your memorandum to the folder labeled “Writing Assignment #1” under the
“Assignments” tab on Blackboard by no later than the deadline. If you have trouble uploading your
memorandum, email a copy of the memorandum to your professor by that deadline. Late
submissions will be subject to the policies in the course syllabus. If you have any questions
regarding Writing Assignment #1, please contact your professor.
BUS 300 – Fall 2017
Writing Assignment #1
RightFoods, Inc.
Prompt
Arnie’s Neighborhood Bar and Grill, Inc. (“Arnie’s” or the “Company”) is a national chain of
casual dining restaurants founded in St. Louis, Missouri. Arnie’s is known for offering primarily
mainstream American dishes such as burgers, sandwiches, salads, pasta, and barbeque. Each
location offers a full-service bar. The Company’s largest profit margins are made from alcohol
and desert sales. Arnie’s currently has around 1,000 restaurants throughout the country including
locations in all fifty states as well as in Puerto Rico. Nine hundred thirty of these locations are
franchise-owned. Arnie’s is most popular in suburban areas. In 2016, approximately 88% of
Arnie’s customers were adults over the age of forty-five and young children. Its locations are
roughly modeled after its original restaurant, which was opened in 1990. The Company orders its
products and raw ingredients from a single national food distributor, which delivers to each Arnie’s
location. The Company also contracts with a single alcohol distributor.
Arnie’s primary competitors are other casual dining chains including Peppers, Bartleby’s, and Blue
Crab. Peppers and Bartleby’s offer similar menu items to similar clientele at similar prices while
Blue Crab attracts similar clientele but specializes in affordable seafood. Although Arnie’s was
one of the United States’ most beloved restaurant brands in the late 1990’s, the Company has
struggled in recent years. 2016 was Arnie’s worst year since the recession, as it experienced a
2.4% drop in same-store sales. Thirty-seven franchises declared bankruptcy and closed last year.
Most of Arnie’s competitors have experienced recent difficulties as well. However, one notable
exception is Blue Crab, which was recently sold to a private equity firm. In a recent interview, a
representative of the firm stated that Blue Crab had been doing “very well” since completing recent
renovations and adding premium seafood items to its menus.
Still, many younger customers have left the casual dining market for fast casual offerings like
Jalapeño Burrito’s and Panorama Bread. Market research suggests that many Americans have lost
interest in casual dining chain restaurants. When spending larger amounts of money on a meal,
they are gravitating towards independent restaurants. Alternatively, they are electing to save
money with delivered meal-kit services and by buying more groceries. In a poll conducted in
December 2016, only 20% of respondents said they would describe Arnie’s as “cool”.
In July 2017, RightFoods, Inc., a large publicly-traded corporation acquired Arnie’s. RightFoods
now seeks to implement a plan to resurrect Arnie’s, and its Board of Directors is considering two
alternatives. The selected plan should:
• Best address Arnie’s financial issues; and
• Help to distinguish Arnie’s from its competitors.
The first option is to offer a series of perpetual large-scale discounts including an all-day happy
hour, where the Arnie’s would offer two-for-one draft beers and wells liquor drinks (with a slightly
increased price for the initial drink). It would also offer a limited “two-for-twenty” menu, where
dine-in customers could purchase two entrees for $20. Additionally, Arnie’s would begin offering
unlimited appetizers at a set price during sporting events.
BUS 300 – Fall 2017
Writing Assignment #1
RightFoods, Inc.
Also under this first plan, Arnie’s would partner with Grub Dash and Ultra Eats, two popular
smartphone app-based food delivery companies. Customers would be able to use the apps to order
any food item from Arnie’s. The delivery company’s drivers would then pick up the order and
deliver it to the customer. For the first year, RightFoods would cover the delivery fee of $4 per
delivery, and customers would simply have the option to tip drivers. Currently, Pepper’s,
Bartleby’s, and Blue Crab do not offer delivery service. App-based delivery services have become
very popular in the past few years. For instance, Grub Dash currently makes more food deliveries
in the United States than any Pizza chain.
The second option is to broadly rebrand Arnie’s as a Gastropub/fast-casual hybrid. Gastropubs
have become very popular in the United States over the past five years, particularly in urban areas.
The plan would include a four-year process to remodel all franchise and company-owned
locations, requiring each location to close for approximately eight months. Once completed, the
locations will have a modernized exterior and interior with a more upscale look and feel.
Additionally, approximately one third of each location’s space will be reallocated as a fast-casual
section. The section will include an order counter and a modest amount of seating. Customers
will be able to order most food items as well as bottled beer but will not have a server. RightFoods
would cover the cost of renovations of corporate-owned locations and split the cost of other
locations with franchisees.
Moreover, under this plan, Arnie’s would begin offering higher end items such a poke bowls, pan-
Asian short rib, and cedar plank wild-caught snapper. To make room on its menu, the Company
would eliminate some of its older offerings. The bar and main dining room would also begin to
offer a large selection of craft beers and specialty “mixologist” cocktails. Arnie’s would purchase
specialty food items from two new food distributors and would contract with multiple high-end
alcohol distributors.
