Levendary Cafe
Levendary Café was born as a small soup, salad and sandwich restaurant. Under the direction of former CEO Howard Leventhal, who stood behind Levendary’s vision of “delighting the customer”, the restaurant was transformed into a multi-billion dollar firm comprised of 3,500 cafés nationwide. Leventhal stated that “Its wholesome soups, salads, and sandwiches using high quality ingredients, and a commitment to service in a comfortable, friendly, environment distinguished Levendary Café from other quick casual restaurants.”
Although Leventhal had done remarkably well with Levendary’s domestic expansion, analysts were concerned with the lack of future domestic endeavors and sought to expand on a global level. Levendary soon identified China as an ample market to occupy due to the increase in urban population, an “affluent middle class, a large increase of women in the workforce, and a growing lifestyle trend to eat out”.
To lead the China initiative, Leventhal selected Louis Chen. Chen, armed with a great deal of knowledge of the culture, consumers, local neighborhoods, and meaningful business connections to support Levendary’s expansion, began modifying Levendary’s signature menu items and the overall café environments without consulting U.S. management. Soon, newly appointed Levendary CEO Mia Foster was faced with a number of pressing matters ranging from how to link Chen and his management team to those in corporate headquarters, to the standardization of future Levendary Café locations.
Q1: What is a Multi-unit Restaurant (MuR) Business? How big is it? Is it a consolidated or fragmented industry? What are its economics (use the Porter’s (Model to evaluate profitability in addition to the data given in the case)?
A1: A Multi-Unit Restaurant Business is a franchise operation associated with a single brand. “In 2010, the U.S. restaurant and contract foodservice industry was a $600 bullion industry with 960,000 locations. Multi-unit restaurant concepts
Although Leventhal had done remarkably well with Levendary’s domestic expansion, analysts were concerned with the lack of future domestic endeavors and sought to expand on a global level. Levendary soon identified China as an ample market to occupy due to the increase in urban population, an “affluent middle class, a large increase of women in the workforce, and a growing lifestyle trend to eat out”.
To lead the China initiative, Leventhal selected Louis Chen. Chen, armed with a great deal of knowledge of the culture, consumers, local neighborhoods, and meaningful business connections to support Levendary’s expansion, began modifying Levendary’s signature menu items and the overall café environments without consulting U.S. management. Soon, newly appointed Levendary CEO Mia Foster was faced with a number of pressing matters ranging from how to link Chen and his management team to those in corporate headquarters, to the standardization of future Levendary Café locations.
Q1: What is a Multi-unit Restaurant (MuR) Business? How big is it? Is it a consolidated or fragmented industry? What are its economics (use the Porter’s (Model to evaluate profitability in addition to the data given in the case)?
A1: A Multi-Unit Restaurant Business is a franchise operation associated with a single brand. “In 2010, the U.S. restaurant and contract foodservice industry was a $600 bullion industry with 960,000 locations. Multi-unit restaurant concepts