Really Right

We have many fictions in our society that are not true but regarded as such. The parable of the Emperor’s New Clothes is sadly more the case than not. One such fiction in our society is private property and/or home ownership.

Folks you don’t really own your home or the land that it sits on; you have it by the king’s pleasure. Don’t believe me then try not paying your property taxes and see what happens. If you really own it then the government couldn’t take it away. Furthermore, if you really owned your land then you wouldn’t need a hunting or fishing license to take game off your own land but the king claims to own that too.

While today’s blog is not about the California Legislature’s plans to dismantle Prop 13 which will happen under Garvin Newsom or plans for statewide rent control, it applies to that too. No, today I am going to briefly blog about a line in an article at the heart of property ownership dispute in San Francisco. Enter the Flintstone House.

A rich lady in San Francisco bought a house in 2017 for 2.8 million and is being told she must undo the decorations on the property. Owner, Florence Fang, doesn’t live in the home but uses it for entertainment and charitable events. She decorated it with the theme of the 1960’s cartoon, The Flintstones.

If you recall, the Flintstones theme song is “Have a gay old time” but invoking that motto hasn’t been enough to avoid conflict in this suburb of Bagdad by the Bay.

City officials said that Fang was given three stop work notices, a code violation citation, and then a hearing in front of an administrative panel made up of neighbors before a lawsuit was ultimately filed in March over unpermitted garden installations.
“If the lawsuit is successful, the judge will order her to remove the statues and the mushrooms and the Yabba Dabba Do sign,” Hudak told KTVU. “There are some other safety code violations that she needs to correct and the judge would order that as well.”
But an attorney for the 84-year-old told the Associated Press that snobby officials are after Fang’s constitutional right to enjoy her yard.
“Mrs. Fang has made people smile, she’s giving them joy. What’s not to love about Dino, who acts like a dog?” Angela Alioto, a former San Francisco supervisor, told the AP. “What is wrong with these people?”
While inviting reporters on a tour of the home this week, Alioto told the San Mateo Daily Journal the home is Fang’s “happy place.”

Link: San Francisco suburb says ‘Yabba Dabba Don’t’ to Flintstones house, owner fighting back

Having the Alioto family in your corner is a plus in San Francisco but that is not what caught my eye in the article. If you read down to the bottom, you will see this gem from one Tim Iglesias, a professor at the University of San Francisco School of Law.

“If they let her get away, then all the other wealthy people in Hillsborough can say, ‘Hey, I can do whatever I want with my property.”

Hey Tim, if she owns it and it’s not structurally unsound or a fire hazard then leave her alone. You have enough other crap to take care of in your foul city. Perish the thought that your city might have something for tourists to enjoy besides of needles, crap, and wards of the welfare state on your sidewalks.

Just look at the photo, the grounds are immaculate and maintained better than any part of the city that the taxpayers own. Besides, it’s her property. If she really owns it, the city has no grounds (no pun intended) to tell her what to do.

The Chief takes another scalp in this real-life story of how a jerk reacted to not getting his fries piping hot at a local Red Robin Gourmet Burgers in Elk Grove.

The jerk was unhappy about not getting his fries piping hot as described above, so how does he react? Well like any other irrational prick would when complaining on the Internet; he fills out the online survey attached to his receipt and proceeds to light both the store and his waiter on fire. I guess it makes him feel better. After doing so he said he didn’t want a coupon…a first for him, didn’t want free food, also a first, and said he will never go back because the experience was so bad. Keep in mind he paid $10 for a burger, fries and coke, and left no tip.

For those unfamiliar with Red Robin, they are a sit-down place not a fast casual order at the counter place. Leaving no tip is the ultimate jerk move, especially when you ordered the loss leader and complained about your order not being adequate.

The only comments I’ll make on Red Robin is they never have a consistent experience. I have always loved their burger, but the fries run the gamut of being piping hot; lukewarm, and soggy; and being almost straight out of the freezer cold. However, since they are “bottomless” I just order another basket and move on.

I have always found the food to be decent. If a complaint is warranted, it would be they don’t have a niche market and are trying too hard to be all things to all people. All you can eat fries draws a certain crowd, high priced entrees draw a different crowd, just like a dollar menu draws its own crowd. Pick a lane, decide what customer you want to attract and go from there. There is a reason if I go to a fast food place that I go inside to order and eat. I’ve gotten short changed at the drive thru too many times! I never once felt like lighting the store up.

This however wasn’t even the best part of the story. Literally a week later, he spoke about wanting to go back to the same Red Robin for the same deal! Hubris? Holy smokes man, the embers aren’t even out yet, and here you are wanting to go back? For what? A chance to light them up again? Little does the jerk know, he paid with a credit card so the transaction has time and date stamped, so the store knew what he ordered and who his waiter was. Suffice to say the waiter was likely “axed” the question a few days later and terminated for having a horrible complaint filed. Like I said now you’re going to return to the scene of your 1-star service experience?

The jerk doesn’t get it, and likely never ever will. The jerk consumes more television in a week than William and I combined in a month. He knows very little about current events or history, but knows everything going on, on every reality TV show or soap opera…. all while claiming that he watches no TV mind you. He embodies the millennial generation in a nut shell. He lit both the business and his server on fire, and then believed he could just walk on in and all will be forgotten? Sorry dude, your credibility goes out the door with me. A complaint would be justified if a trip to Morton’s or Ruth’s Chris was subpar, but a local chain restaurant? I also believe the jerk lacks cognitive ability to reason. A rational human looks at the experience and says, well I have never been here before, didn’t know what to expect, came in the door for the cheap meal, and left saying I won’t be back…no negative review needed or necessary. Alternatively, a rational person who is a regular might say he is disappointed but is willing to reserve judgment until a future trip can confirm said slippage of service and product. However, this would require far too much from your reality TV aficionado.

It takes a very special person to light-up a waiter who buy the way, is likely doing this while attending school trying to eke out a little spending money on the side. Your complaint likely got him terminated, and likely got the manager a call from corporate about poor customer service.

PS Truth is I visit Red Robin maybe 4 times annually, and I know what I am getting as a result, I ignore the noise and tune out poor experiences.

Kraft Heinz Co reported earnings February 21st and the results were well, not great, Sales were up, but they literally cooked the books as far as compliance goes, slashed the dividend, and wrote down the value of their products.

Before I break down that long sentence I’ll give a little background. Heinz was bought out by Warren Buffett and his Berkshire Hathaway Investment arm back in 2013 for 23 billion. He partnered with a Brazilian PE Firm 3G Capital and gave them a mandate to cut expenses. 3G obliged and what used to be a great place to work and make a living turned into hell on wheels at Heinz.

Manufacturing plants were closed, employees could no longer have free products or a mini-fridge at their workstation. To make a copy, employee’s had to ask permission from their supervisor; plus, they couldn’t print in color and were required to print double sided. Essentially employees were made to feel like they were back in school, under a ruthless teacher.

Every expense was questioned and if unjustified, it was denied. Executives installed by Buffett and 3G used to scold employees saying there is no work/family balance, you should devote all your time to Heinz. Layoffs were plentiful and executives were never afraid to swing the axe. After about 2 years of doing this, and out of ideas they bought Kraft. Buffett & friends, combined the companies and well…lather, rinse, repeat the same process. The combined company now loaded with debt, was aggressively trying to dig its way out…then the problems occurred.

Kraft Heinz fell victim to a corporate profit mentality. They are run by people who have zero experience in the consumer packaged goods field and the results show it. Jim Cramer of CNBC said it best, “Look at these products they make. They are tired and old and not healthy for you. Don’t believe me, look at the ingredients, could win a lot of scrabble games with some of those words!”

In today’s health conscious society people are reaching for products that are “organic, no antibiotics ever, and even buying the farm to fork lie.” Sadly this company offers nothing as far as those choices go. That being said, the advertising and development budget was essentially cut to zero, so I guess it’s a race to see how many bottles of Heinz Ketchup one can sell each quarter?

Kraft Heinz also competes in way to many segments where competition is stiff. Just a couple examples: look at the salad dressing market, it’s basically a race to the bottom, look at the competition and there is no more pricing power. The point I’m making is the store brand is selling for $1, it’s very hard to sell your product for $3. While the brand may be worth something, once you taste the cheaper brand and you see there is not much quality difference it’s not hard to make a switch. As a result Kraft Heinz was forced to lower their price to $1, and the margin on products sold for a dollar cannot be very high, likely you see a couple pennies in profit. The company has lost its way.

On to the disaster quarter. They cut the dividend 40%! Keep in mind, while people like Buffett get rich off this money, many retirees depend on it to subsidize their lifestyle. In addition Kraft Heinz was viewed as a stable company, not flashy, but stable in a sense they weren’t going broke like Sears. Also, heck everyone has at least 1 Kraft or Heinz product in their house. Kraft Heinz also wrote down the value of Oscar Meyer and Kraft by 15 billion, essentially saying the brands they paid for aren’t worth near what they thought they were. So in essence they loaded a company with unsustainable debt and now the brands aren’t even worth much anymore. Even more concerning was the report that they are being investigated by the SEC for accounting irregularities. I will say one thing, I don’t want the SEC investigating me for anything because they are not just a regulator agency; they can literally bring your company to their knees. To add insult to injury, the NASDAQ stock exchange has filed a report that the company is not in compliance with their rules after failing to file a 10-K report at the end of the calendar year. Ouch. Employee morale no longer exists, as evidenced by a 20 percent employee turnover rate annually. Also they have explored the idea of selling brands to try to pay down debt.

How to fix the company

If I were in charge, I would ask Buffett to buy the company outright. I would urge him to take us private and then we could work on the accounting and legal issues without being under intense scrutiny. There would be no dividend being paid out so that money could be put toward debt extinguishment. I would ramp up innovation and advertising dollars because it has become clear the brand power is no longer selling itself. Kraft Heinz has exactly two new products they have launched in the past decade, both were successes; Devour frozen food, and Just Crack an Egg by Ore Ida. This shows the company still has it when it comes to innovation. I would raise employee pay and while this may take a short term hit on profitability, I want employees productive and not looking to jump to a competitor. 20% employee turnover is something only a jerk would be proud of. Also there would be a moratorium on closing plants. Employees are the life blood of the company. I would create an incentive plan to bonus all workers based on production and quarterly sales goals.

As far as selling products for a dollar, that is gone. Advertising should be poured in to make our products worthy of customers trading up for value as opposed to buying it for a dollar because it’s on sale. When it comes to Oscar Meyer meats chock full of bad ingredients, the damage is done, I would create a different brand, with clean, simple ingredients and market it and price it as such. Regarding the current product mix, I would eliminate/sell several. Look at the barbecue sauce aisle alone; Kraft BBQ, Bull’s Eye, Heinz BBQ, and Jack Daniels line are all sold by the same company! In essence you are competing with yourself! Holy smokes, even the most uneducated will tell you they will reach for the cheapest one. Look at this example. Say the Chief kills a wild boar and brings it to Williams for a BBQ. William won’t care what kind of sauce I brought unless it’s a horrible tasting or very obscure one. Eliminating brands will go a long way to simplification and increase profitability. Paying down the debt and increasing employee morale, rather than looking for the next acquisition will go a long way toward getting back to prosperity.

The Chief