Culinary salvation is officially coming to Olive Garden

Big changes, and not just to the menu.
Big changes, and not just to the menu.
Image: AP Photo/Steve Helber
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Just a month releasing a detailed slide deck detailing Darden and Olive Garden’s corporate and culinary failures, activist hedge fund Starboard won its proxy fight, replacing all 12 of the company’s directors with its own nominees.

If the new board chooses to execute the plan laid out in September, Olive Garden customers can expect a whole suite of changes.

On the culinary side, there will be a more moderate approach to endless salad and breadsticks, properly salted pasta water, sauce mixed in with pasta instead of ladled on top, a significantly leaner menu, a larger and more aggressive wine and liquor program, and a return to more authentically Italian food.

On the corporate side, one of the biggest moves will likely be a big sale of real estate. Darden owns a whole bunch of the property its restaurants stand on, and Starboard argues selling it will return cash to shareholders. It says it will also force restaurants to perform well independently of a “rent subsidy,” the artificially lowered costs gained operating rent free on company land.

Also expect a franchising program, new executive leadership, a spinoff of brands like Bahama Breeze, Seasons 52, The Capital Grille, and Eddie Vs from the Longhorn Steakhouse/Olive Garden core—and a new executive team.

Employees are concerned, perhaps rightly. The presentation mentions significant cuts in labor costs. Increased rent bills and closed restaurants could result in lost jobs, and may be a shift away from full-time employees towards part-time labor.