by Bob Gershberg, CEO/Managing Partner, Wray Executive Search
The federal government announced a proposed rule which would ban non-compete agreements between employers and employees, independent contractors, externs, interns, volunteers, apprentices, and even sole proprietors who provide a service to a client or customer. The Federal Trade Commission (FTC) stated the widespread use of non-competes agreements is an “often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” Under the proposed rule, a “non-compete” clause is defined “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.”
Although most states allow enforcement of reasonable non-competes, the increasing trend is to limit or ban their use. In California, North Dakota, the District of Columbia, and Oklahoma, non-competes are either entirely or largely unenforceable as against public policy. Other states, including Maine, Maryland, New Hampshire, Rhode Island, and Washington, have banned non-compete agreements for low-wage workers.
by John A. Gordon, Principal and Founder, Pacific Management Consulting Group
Personnel and M&A Moves Now Abound
So, with the New Year upon us, some personnel and M&A moves are now upon us. Both McDonald's and Wendy’s signaled people changes and new corporate reorganization charts, targeted at reducing the number of reporting pillars. It looks like the US and International pillars will be targeted, at least at headquarters. The CEOs indicate it will increase efficiency and improve time to market. As always the devil is in the details and we will see.
In M&A news, the earlier reported news about Darden (hat tip: Austin Fuller, Orlando Sentinel) came true: CEO Ric Cardenas noted at their ICR appearance that they were looking for a new brand acquisition. Darden itself is in fine shape, they seem to be looking for a brand to position the portfolio to changes in the consumer marketplace. So they will be looking for the best and this won’t be a rushed process.
Further, Andy Weiderhorn and FAT Brands confirmed the desire for a properly priced casual dining brand: multiples of 10X are too high.
As noted last month, there are several latent IPOs, waiting for the right market conditions. One of the very first will be Fogo de Chao. They have desired a reentry ever since 2020 and have been waiting for market conditions. They are a strong company.
“True leaders understand that leadership is not about them but about those they serve. It is not about exalting themselves but about lifting others up.”
— Sheri L. Dew
Check out the National Restaurant Association's latest report on restaurant industry job growth
Restaurant operators plan to continue expanding payrolls in 2023, as long as business conditions don’t significantly deteriorate.
Job growth in the restaurant industry continued at a moderate pace in December. Eating and drinking places* added a net 26,300 jobs in December on a seasonally-adjusted basis, according to preliminary data from the Bureau of Labor Statistics.