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20 Things You Didn't Know about Olive Garden

Olive Garden is a chain of restaurants that is centered on the United States but has operations in other countries as well. It is huge, as shown by the fact that its revenues must be counted in the billions on an annual basis. Due to this, Olive Garden is a notable presence in its chosen market. Here are 20 things that you may or may not have known about Olive Garden:

1. It Is a Subsidiary

Olive Garden is a subsidiary. This means that it is a corporation that is either owned or otherwise controlled by some other corporation. In the case of Olive Garden, it is wholly owned, meaning that its parent company controls 100 percent of its voting shares.

2. It Used to Be Owned By General Mills

There was a time when Olive Garden was owned by General Mills, which should be a very familiar name for a lot of consumers out there. After all, General Mills is a huge U.S. multi-national that manufactures as well as markets a wide range of branded food products for consumers, meaning that chances are good that most consumers in the United States have come upon its products at some point in time. Some examples of its brands include but are not limited to Cheerios, Pillsbury, and Betty Crocker.

3. It Is Now Owned By Darden Restaurants

Nowadays, Olive Garden is owned by Darden Restaurants, which is a U.S. corporation that specializes in operating restaurant. To be exact, it operates restaurants through a number of brands, with Olive Garden being one of them. With that said, Olive Garden is one of the best-known brands owned by Darden Restaurants, though a number of the other brands are significant players in their own right as well.

4. It Was Never Founded By a Single Individual

There are some restaurant chains out there that start up because of a single individual with plenty of ambition as well as the resources needed to start up their own businesses. However, there are other restaurant chains that are not. Olive Garden falls into the second group, seeing as how it was started up by General Mills from the start instead of being something that was purchased from someone else once it had become successful enough to catch the interest of a multi-national corporation.

5. Fast Expansion

From the start, Olive Garden saw very fast expansion. For example, the first Olive Garden restaurant opened its doors on December 13 of 1982. However, by 1989, there were 145 Olive Garden restaurants. Suffice to say that this made for a remarkable pace of expansion by any set of standards, which in turn, explains much about how Olive Garden has managed to become such a significant presence in its particular niche of the restaurant business.

6. Per-Store Sales Came to Match That of Its Sister Brand

Speaking of which, it is important to note that Olive Garden wasn't just doing well when considered as a whole. Instead, each individual Olive Garden restaurant was managing to secure excellent numbers as well. Eventually, Olive Garden's sales per store were a match for that of Red Lobster, which was notable for a couple of reasons. Once, the two were once owned by the same operators, thus making for increased ease of comparison. Two, Red Lobsters had been founded in 1968, meaning that it had a lot more time to build up a brand that would make it easier for it to market to interested individuals as well as all of the operations needed to actually get food that people want to eat.

7. Full-Service Casual Dining

Olive Garden fills an interesting segment of the restaurant market that can be summed up as full-service casual dining. Said segment can be considered in between fast food restaurants and fine dining restaurants in the sense that it offers full service but in a more casual environment that is more suitable for a wide range of people. Casual dining is popular in a wide range of countries, but it is interesting to note that there can nonetheless be significant differences between them. For example, a U.S. casual dining restaurant is often part of a restaurant chain. In contrast, an Italian casual dining restaurant is often independently-owned as well as independently-operated.

8. Has Seen Stumbles From Time to Time

There are very few businesses out there that have never stumbled. After all, a lot of factors have to come up right for a business to be successful, meaning that even a single mistake can have serious consequences in the short run as well as perhaps the long run. In the case of Olive Garden, it saw a period of serious falls in revenue, so much so that a 12 percent fall was recorded at one point in time. Even worse, this fall was combined with new Olive Garden restaurants being opened, which tends to be rather expensive to say the least. Generally speaking, falling revenues and rising expenses are seen as a serious problem for businesses.

9. Is an Italian-American Restaurant Chain

Olives have been a very popular food in the Mediterranean since ancient times. As a result, Olive Garden was an excellent name for an Italian-American restaurant chain. As for the food, well, Italian-American cuisine is a great example of how the cuisines that immigrants brought with them to the United States were transformed over time into something that is still recognizable but nonetheless stands on their own. It is interesting to note that Italian-American cuisine tends to be influenced by Southern Italian cuisine for the most part, though there is a fair amount of Northern Italian influence as well.

10. Didn't Used to Do Franchising

There was a time when Olive Garden didn't do franchises, which is a popular method for restaurant chains to expand their presence in various markets while cutting down on their expansion costs. Instead, Olive Garden restaurants used to be owned by the company and no one but the company. However, the previous model became outdated when the people in charge of Olive Garden started contemplating a new wave of expansion, with the result that they decided that franchising would be the best way forward.

11. Might Have Been Connected to Foreign Expansion

The reveal that Olive Garden would be franchising came at around the same time as a reveal that it would be opening a lot of new locations as well as a reveal that it would be expanding into foreign markets. As a result, it is possible that these choices were connected to one another, which would make sense because foreign markets are a natural choice for franchising. After all, while franchising provides plenty of benefits for the franchisees, it can provide benefits for franchisors as well, with an excellent example being the increased local know-how.

12. Pursued Foreign Expansion Because of Mature NA Market

The people in charge of Olive Garden made the choice to pursue foreign expansion because the core market in North America was mature. In other words, the North America market already had most of the Olive Garden restaurants that it could support, meaning that adding new locations would have resulted in marginal gains. Meanwhile, foreign markets had not been saturated to the same extent, meaning that there were richer pickings in said locations provided that Olive Garden could make the adjustments needed to succeed in similar but not quite the same business environments.

13. Used to Be Olive Garden and Red Lobster Co-Locations

In the past when Olive Garden and Red Lobster were still run by the same people, there were co-locations. The co-locations were meant to cater to smaller markets, which were big enough to be profitable but not big enough to support both a full-fledged Olive Garden and a full-fledged Red Lobster. However, the co-locations were still a relatively new concept by the time that the choice was made to sell Red Lobster. When that happened, two of the six locations were closed down, presumably because the local markets were deemed to be insufficiently large to support the option that happened to the other four locations, which was to convert them into Olive Garden restaurants.

14. Has Seen Efforts to Revitalize Its Brand

Olive Garden has become well-established enough for it to be considered a relatively well-liked icon for a lot of people out there. Unfortunately, it has also become well-established enough for it to have suffered some of the issues of longevity in the business world, with an excellent example being the dilution of its brand. In the not so distant past, there were people who criticized the restaurant for being so diluted that they could no longer figure out what it was supposed to be focused upon, which is a huge problem for businesses because a memorable presence makes it much easier for them to sell their products and services to interested individuals.

15. Has No Presence in Ontario and Quebec

The core market for Olive Garden is the United States. However, considering that Canada is so close, it should come as no surprise to learn that there are Canadian locations as well. With that said, it is curious to note that Olive Garden has no presence in the Canadian provinces of Ontario and Quebec. There used to be between 10 and 15 Olive Garden restaurants in the province of Ontario in the 1990s, but all of them went down during the early 2000s with no exceptions whatsoever.

16. Has Engaged in Some Serious Cost-Cutting Measures

It isn't uncommon for businesses to practice cost-cutting measures in an effort to boost their net incomes. However, there are some businesses that take this to an extreme. For instance, Olive Garden instituted a mandatory tip-out program in 2011, which was carried out so that it could cut some of its employees' wages to a mere $2.13 an hour. For those who are unfamiliar with the concept, a tip-out program is when a part of the server's tips is shared with bartenders and other staff members whose duties and responsibilities support them in performing their duties and responsibilities in an indirect sense.

17. Experimented with Converting Full-Time Staff to Part-Time Staff

Speaking of which, Olive Garden has also engaged in experimenting with converting most of its workforce from full-time employees into part-time employees. Essentially, this is meant to let it stop paying for expensive healthcare benefits for its full-time employees, which is something that plenty of other businesses in a wide range of other sectors has engaged in as well.

18. Has No Cooking Institute in Tuscany

Sometimes, Olive Garden has made claims about having a cooking institute in Tuscany. However, this isn't actually true because there is no such cooking institute. Instead, what happens is that Olive Garden sends some of its staff members to Tuscany on an annual basis, where they stay at a hotel but spend a few hours in a local restaurant. To be exact, said staff members spend a few hours in a local restaurant during its off-season, which doesn't exactly suggest that they are just soaking in vast amounts of culinary experience.

19. Got Its Entire Board of Directors Replaced Once

At one point in time, Darden Restaurants got its entire Board of Directors replaced. In short, what happened was that an activist hedge fund called Starboard Value launched a blistering attack on various faults. The existing directors mounted a defense, but in the end, they weren't sufficiently convincing, as shown by how all of them were replaced with Starboard Value's recommendations.

20. Breadsticks Were a Point of Contention

The criticisms voiced by Starboard Value covered a wide range of topics. For example, there was mention of bad pasta-making as well as mention of nonsensical menu options such as vegetable lasagna topped with chicken. However, one of the more notable criticisms were the unlimited breadsticks. In Starboard Value's view, this was needlessly wasteful because most of the breadsticks tended to go stale without actually offering much value. Meanwhile, the directors defended it as an example of the kind of Italian hospitality that the restaurant chain wanted to project to interested individuals, which was one of the points that they bothered to defend instead of just conceding.

Garrett Parker

Written by Garrett Parker

Garrett by trade is a personal finance freelance writer and journalist. With over 10 years experience he's covered businesses, CEOs, and investments. However he does like to take on other topics involving some of his personal interests like automobiles, future technologies, and anything else that could change the world.

Read more posts by Garrett Parker

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