TO: Professor Clark Hansen, CEO, AMDP

FROM: Kelli Kosaka, Research and Development

SUBJECT: Cheesecake FActory is Qualified for AMDP Investment

DATE: July 15, 2013

 

In researching potential companies worthy of our investment, I came across the Cheesecake Factory, a highly successful casual dining restaurant chain headquartered in Calabasas, CA. Cheesecake Factory fits AMDP’s requirements in being socially responsible, green, and profitable. Below is a brief overview of the standards our company operates on followed by significant information about the Cheesecake Factory.

 

The Triple Bottom Line: The Full Cost Involved in Doing Business

Profit: an account of the financial gains and losses of the company and the traditional measurement of a company’s success.

People: a measurement of how socially responsible the company has been through its operations and interactions with its suppliers, employees, and consumers.

Planet: the level of the company’s environmentally friendly practices and principles (Hindle).

 

Corporate Social Responsibility

Corporate Social Responsibility (CSR) refers to the company’s initiative to assess and take responsibility for its effects on the environment and social welfare. CSR is usually associated with actions and efforts that go beyond the minimum required by regulators or environmental protection groups. Assuming such responsibility can involve taking on short-term costs that do not provide immediate financial gain, but instead promote positive social and environmental change.

 

Social Enterprise

Social enterprises are organizations built on the practice of the common good; such businesses operate efficiently, creatively, and sustainably.

 

Carbon Footprint

Carbon footprints measure how just much carbon dioxide we release as go about our daily lives. Driving, flipping a light switch, and flying on a plane all rely on the combustion of fossil fuels like oil, gas, and coal. When these fuels burn, they release greenhouse gases like carbon dioxide that contribute to global warming. Carbon footprints are usually a monthly or annual estimate of carbon dioxide output in tons (Dowdey). A low carbon footprint is essential for an organization to identify as beneficial to the planet and its consumers.

 

The Cheesecake Factory: More than Just Cheesecake

In 1972, Evelyn and Oscar Overton capitalized on their famous family cheesecake recipe and established the Cheesecake Factory as a moderate scale bakery distribution and delivery company. In 1978, the couple’s son and current CEO David founded the first Cheesecake Factory restaurant in Beverly Hills, setting out to please guests by providing generous portions and over a hundred meal options all made from scratch. Over three decades later, the family operated business has expanded to over 160 locations across the US, and has recently opened four locations in the Middle East (The Cheesecake Factory 2).

 

Showcasing a Concern for the Environment

The following are just some of the ways in which Cheesecake Factory has contributed to creating a modern sustainable workplace in each of their restaurants across the nation.

 

Recycling: Cheesecake Factory requires the use of 100% recycled material in all paper napkins and paper towels. Paper napkins are produced by “a new, state-of-the-art machine that produces napkins twice as fast while using half the amount of energy.”

Packaging: Restaurant to-go boxes are made of a Polypropylene base and a Polyethylene lid. These two substances are the most recycled resins in the country. In addition, the company uses a specific case size of to-go boxes to maximize each truckload, resulting in fewer deliveries, less fuel utilized, fewer greenhouse gas emissions, and a low carbon footprint.

Green Teams: Restaurant staff and management are encouraged to form “Green Teams” to set goals for their location on additional sustainability actions that can be taken at a local level, including recycling, waste reduction, and water conservation (Cheesecake Factory 3).

 

Financial Track, Growth, and Expansion

In 2012, the Cheesecake Factory reported $1.8 billion in revenue, a slight increase when compared with revenues of $1.75 billion in 2011 and $1.65 billion in 2010. According to the franchise’s website, the company plans to open anywhere from eight to ten restaurants domestically with a possibility for more international locations opening in the near future.

 

Reviews and Recognition

Cheesecake Factory has gained praise regarding its high quality food, employee relations, customer service, and research and development department. Most recently, the restaurant has earned the 2012 Nation’s Restaurant News MenuMasters Award for “Healthful Innovations” for their healthy options menu aptly named SkinnyLicious. Outstanding management, employee, and community relations gained Cheesecake Factory a 2011 Best Practices Award—People Report (Cheesecake Factory 1).

 

Regarding the company’s sustainability claims, Atul Gawande made a controversial, but compelling point in a 2012 New Yorker article, stating medical professionals and hospitals could learn from the almost alien efficiency in which Cheesecake Factory runs each of its kitchens across the nation, never sacrificing quality or invoking high costs. He later cites the company’s 2011 goal of throwing out no more than 2.5 percent of its kitchens’ groceries—a 97.5 efficiency rate—as so high it’s almost unbelievable they accomplished such a feat. Michael McLellan of Bizmology at Hoover’s highlights the other ways in which Cheesecake Factory epitomizes contemporary dining trends by using all-natural chicken with no added hormones, line caught fish, and cooking oils with no trans fat. The restaurant even sells “sustainably grown coffee certified by Rainforest Alliance and certified organic black and herbal teas.”

 

My Recommendation

The Cheesecake Factory has founded a unique brand that is consistently ranked high in customer satisfaction, sustainability, and environmentally friendly practices. Given that the chain is so established these accomplishments are even more commendable. Investing in this restaurant is a sure way to advance and support the beliefs and standards AMDP seeks to promote.

 

Works Cited

Awards (n.d.). In The Cheesecake Factory. Retrieved July 6, 2013, from http://www.thecheesecakefactory.com

 

CAKE Income Statement (2013, July 15). In Yahoo Finance . Retrieved July 10, 2013, from http://finance.yahoo.com

 

Dowdey, S. (n.d.). How Carbon Footprints Work . In How Stuff Works. Retrieved July 10, 2013, from http://science.howstuffworks.com

 

Gawande, A. (2012, August 13). Can Hospital Chains Improve the Medical Industry? The New Yorker. Retrieved July 7, 2013, from http://www.newyorker.com

 

Hindle, T. (2009, November 17). Triple Bottom Line . In The Economist . Retrieved July 6, 2013, from http://www.economist.com

 

McLellan, M. (2012, April 13). The Cheesecake Factory Still Bringing in the Cheddar. In Bizmology . Retrieved July 8, 2013, from http://bizmology.hoovers.com

 

Our Story (n.d.). In The Cheesecake Factory. Retrieved July 8, 2013, from http://www.thecheesecakefactory.com

 

Sustainability (n.d.). In The Cheesecake Factory. Retrieved July 8, 2013, from http://www.thecheesecakefactory.com