COVID Complicates the Tipping Debate Even Further for Restaurants

The topic of tipping and its impact on server wages is hardly a new one, but the coronavirus presented full-service restaurants and the industry at large with an opportunity to dismantle—or at least change—the default model. Greg Ryan, co-owner of Bell’s Restaurant in Los Alamos, California, accelerated his decision to phase out tipping after the pandemic left too much uncertainty for employees. Prior to COVID-19, Ryan anticipated moving to a no-tipping model in early 2021, when minimum wage in Santa Barbara County was set to increase. But the pandemic turned his initial economic decision into a moral one when he felt the well-being of his staff was on the line. “As we got closer to understanding that we could reopen for dining service—which happened June 12—we weren’t really sure what we were going to be looking at,” Ryan says. “I did know that I wanted to try to understand how to maintain and keep all of our staff employed.” As a result, Ryan’s restaurant has implemented a service-included model that adds an automatic 20 percent service fee for meals. The restaurant has also removed the option to tip more, which may seem odd at a time when customers may be inclined to tip more generously. But Ryan says tipping, even if in addition to the service fee–included bill, still questions employee value. “The reason that we don’t allow any other tipping is that I feel like it dissuades the point of what we’re trying to do, which is to give value to both the experience and the operation of the restaurant, as well as equally show value to the employee who works with us here at Bell’s,” Ryan says. “Once you allow outside gratuity or tipping, I feel like you’re back to the same place.” One source that Ryan has consulted throughout Bell’s business model transition is Saru Jayaraman, president of national nonprofit One Fair Wage. The organization focuses its efforts on increased minimum wages rather than complete removal of the tipping practice. It also advocates for non-discriminatory tips, which take the form of tip sharing between the front and back-of-house employees. By putting the onus on restaurant operators to supply employees with their wages rather than the customers, Jayaraman says other workplace issues, such as sexual harassment, decrease. This issue is especially important in an industry where 70 percent of waitstaff in the U.S. are women. “[Servers] are largely women who work in casual restaurants, IHOP, Denny’s, Applebee’s, dive bars across America. They struggle with the highest rates of economic instability and sexual harassment of any industry in the U.S.” Jayaraman says. “And now they’re being asked to go back to work for a subminimum wage when tips are down 50–75 percent across the country.” Seven states require employers to pay tipped employees full state minimum wage before tips: California, Oregon, Washington, Nevada, Minnesota, Montana, and Alaska.

But Jayaraman says the pandemic has brought a new openness toward changing the status quo across the country—and that this new attitude is here to stay. Thattu co-owners Margaret Pak and Vinod Kalathil changed their attitudes toward tipping when they started doing pop-ups after closing their food stall in Chicago’s Politan Row in May. Pak says fellow Chicago restaurant Superkhana International’s service fee–an inclusive model inspired them to adopt a similar model moving forward. But, Pak adds, service charges are only a short-term solution to tipping. Long-term viability would require industry-wide price increases. Kalathil says the change would need to be throughout the community because customers often compare restaurants when assessing the value of a product. Asking restaurants to collectively raise prices is something of a prisoner’s dilemma that relies on all parties acting in a way that may not immediately serve their own self-interest. But while keeping low price points may attract customers, Kalathil says the razor-thin profit margins keep restaurants and employees undervalued in the long run. “In the restaurant industry, the profitability is so bad,” Kalathil says. “I think a lot of that is because people are really suppressing how expensive labor is.” Kalathil says the approach to a successful no-tip reality requires effort from the bottom and top of the industry. To him, an approach that includes guidance from organizations such as the National Restaurant Association (NRA) would facilitate a cohesive industry shift. However, it’s unlikely the movement will receive support from the NRA. The association has frequently lobbied against legislation that raises federal minimum wage, such as the Raise the Wage Act. In a press release against the bill, the association wrote that large rises in labor costs could force restaurant owners and operators to raise menu prices and cut back on current employees’ hours, among other problems. While a restaurant ecosystem sans tipping seems more of a possibility than in years past, the timeline of implementing new practices remains unclear when tipping has been such an integral part of the American dining landscape for decades. “The restaurant industry as a whole is so antiquated in regard to tipping,” Pak says. “We feel like we’re passing the buck by asking customers to pay tips so that could be used to help supplement a livable wage.” – Source: fsr.

JINYA Ramen Bar Names Tom Cardenas Director of Hospitality and Beverage

Cardenas brings more than 25 years of industry experience to JINYA. For nearly 20 years, Cardenas worked for Innovative Dining Group, where he served as opening general manager for Sushi Roki and Katana Restaurant. After being promoted to director of operations and then vice president of operations, Cardenas added several domestic and international brands to his portfolio. Most recently, Cardenas was chief operating officer for Global Dining Inc. of California, where he oversaw and led operations for La Boheme and 1212 Santa Monica. “Tom has a wealth of invaluable industry knowledge, specifically about Japanese restaurant concepts, and we couldn’t be more excited to bring him on,” Takahashi says. “He’s spent over half his life managing and operating some of LA’s and Tokyo’s top restaurants, so I can confidently say there is not a better fit for our director of hospitality and beverage role.” In his new position, Cardenas will be responsible for training service and hospitality to JINYA’s employees and ensuring the brand is prepared to train franchisees according to JINYA’s high standards. Additionally, Cardenas will create a new beverage program and train those working within it. “I’ve been at JINYA for a few weeks now, and I am so happy with the decision I made to join this team,” Cardenas said. “As a breakout Japanese ramen restaurant that’s seeing success in franchising, I know I will be busy training those within the system. I’ve always believed in ‘leading by example,’ so I look forward to being someone who shows everyone what’s possible at JINYA.” At JINYA, experience ramen like it’s meant to be – with thick, rich broth in perfect balance with flavorful noodles. Discover a wide array of authentic toppings, from tender pork chasu to a perfectly cooked and seasoned poached egg to fresh garlic. Then, elevate the experience further by pairing it with tapas or a craft beer. JINYA is a ramen culture, where the relationship between broth and noodles is serious but delicious business. To learn more about JINYA’s full menu, visit jinya-ramenbar.com. – Source: fsr.

Famous Dave’s to Acquire Granite City Food and Brewery

BBQ Holdings Inc., the parent company of Famous Dave’s, announced Thursday a purchase agreement to acquire the assets of craft beer chain Granite City Food and Brewery. Terms of the deal were not disclosed. The move is BBQ Holdings’ first foray outside of the barbecue sector. Its other two brands are the recently created Clark Crew BBQ and fast-casual prototype Real Famous BBQ. The move comes two months after Granite City filed for Chapter 11 bankruptcy protection so it could reorganize and facilitate a structured sale. Richard Lynch, chairman of the board and CEO of Granite City, said in an affidavit in December that competition in casual dining hurt operating performance and margins. Seven restaurants were closed prior to the filing. At the time of the bankruptcy, the beer chain employed more than 2,200 people across 15 states. Granite City, founded in 1999, had 25 units, located primarily in the Midwest, at the time of the filing. “This meaningfully accretive acquisition of Granite City Food and Brewery aligns with our strategy to accelerate growth and expansion as a multi-brand restaurant company,” Jeff Crivello, CEO of BBQ Holdings, said in a statement. “As an award-winning concept, Granite City is a fantastic addition to the BBQ Holdings family, and we look forward to the synergies we can create between multiple brands. “Granite City fits in well with our operating philosophy of great food and great service,” he added. Minnesota-based Famous Dave’s formed the publicly-owned BBQ Holdings in September 2019, with hopes of expanding its barbecue footprint across the country. In December, BBQ Holdings opened Oklahoma City-based Clark Crew BBQ in partnership with Travis Clark, a pitmaster who previously worked with Famous Dave’s to improve food quality and consistency. At the end of January, the brand announced the opening of Real Famous BBQ in Provost, Utah, a fast-casual offshoot of Famous Dave’s, in partnership with Ascend Hospitality Group. Combined, BBQ Holdings oversees 126 locations in 33 states and three countries.

When Granite City filed for Chapter 11, its assets included four rock-and-roll-inspired Cadillac Ranch restaurants and a centralized beer production facility in Ellsworth, Iowa, which enables each unit to brew beer on-site (the production facility generates the “wort” that’s transported to fermentation vessels at Granite City locations). In addition to increased competition in the casual space, Granite City credited “the number of new entrants into the craft beer and brewpub space exploded during the second decade of the new millennium” for its struggles. The brand is considered an early entrant into the craft beer market sector, but “suddenly faced competition from hundreds of new brewpubs and craft brewers,” the company said. Also, Granite City was saddled with real-estate baggage. Many of Granite City’s locations were located in or near shopping malls and locked into long-term leases the company said appeared favorable at the time, typically with options to renew. It simultaneously spent heavy capital building out restaurants “in a manner that featured those distinctive characteristics associated with the brand.” Units are typically 9,800 square feet with interior finishes that incorporate granite and other rock materials and natural woods and glass. Granite City restaurants are open-concept and have outdoor patios. “As a result of the Great Recession that began in 2008, consumer income growth stagnated for nearly a decade. This led to an overall decline in consumer spending, including retail spending and spending to eat out,” the company said. Granite City has worked to improve traffic and sales declines this year. In February, it introduced a menu and guest experience relaunch in six of its markets. By July, it expanded to 17 additional locations. It also attempted to improve financial performance and enhance liquidity by pursuing lease concessions and seeking extensions of the time afforded to pay food and beverage suppliers. As for Famous Dave’s, the brand’s company-run same-store sales lifted 0.4 percent in the third quarter. Off-premises business rose 4.7 percent and catering jumped 12.7 percent. Domestic franchise units saw a 2.1 percent same-store sales boost in Q3 versus a negative 1.4 percent drop in the year-ago period. For the nine months leading up to September 29, same-store sales increased 1.4 percent versus a 1.3 percent decline. Famous Dave’s system had 32 corporate stores and 96 franchises as of September 29. The chain has several initiatives planned for this coming year, including drive-thru locations and the introduction of 17 units bought back from franchisees. BBQ Holdings also tapped Jim Gilbertson as CFO in January. Gilbertson spent seven years at Granite City from 2007 to 2014. – Source: fsr.

Pizza Hut partners with Beyond Meat on two new Pizzas

Pizza Hut has joined forces with Beyond Meat, Inc. to develop two new pizzas featuring plant-based sausage. The collaboration will make plant-based meat pizzas “more widely available to the masses,” the Yum! Brands, Inc. subsidiary said. New Beyond Pan Pizzas were co-created by the Pizza Hut and Beyond Meat culinary teams to mimic the taste of Pizza Hut’s Italian pork sausage without the meat. To achieve the flavor, the plant-based sausage is made with a mix of Italian herbs and spices including garlic, onion, paprika, and fennel seeds. Beyond Italian Sausage is featured in both Beyond Pan Pizzas – the Beyond Italian Sausage Pizza and The Great Beyond Pizza. “I’d challenge anyone to go try the new Beyond Pan Pizza and tell the difference. I shared it with friends and family, and they couldn’t,” said David Graves, chief brand officer of Pizza Hut. “The Beyond Italian Sausage is rich, juicy, and has the signature Pizza Hut flavors—pizza lovers everywhere are going to love it.” The Beyond Italian Sausage Pizza starts with Pizza Hut’s classic cheese pizza and tops it with Beyond Italian Sausage crumbles. The Great Beyond Pizza features Pizza Hut’s original pan crust topped with Beyond Italian Sausage, tomatoes, sliced red onions, and banana peppers. Additionally, Beyond Italian Sausage is available as a one-topping option. Both pizza recipes are also available on Pizza Hut’s Original Stuffed Crust, Hand-Tossed and Thin ‘N Crispy crusts. “Our partnership with Pizza Hut is a category first and together we will continue to raise the bar on game-changing product innovations as we introduce the delicious taste of Beyond Meat products to pizza fans nationwide,” said Ethan Brown, chief executive officer of Beyond Meat. “We’re thrilled to be on this journey with Pizza Hut that enables us to further increase access to better-for-you plant-based meat as we continue to expand our partnership with Yum! Brands.” The Beyond Italian Sausage Pizza and The Great Beyond Pizza are available at Pizza Hut locations nationwide for a limited time. – Source: Food Business News.

KFC to Sell Chicken in Replica ‘Holiday Buckets’ from the ’60s and ’70s to Remind us of a ‘Simpler Time’

Fried chicken in an old bucket from the ‘60s? Where do we sign up?

In what would seem to be an ongoing global quest to conflate Colonel Sanders with Santa Claus, KFC has announced that restaurants in the U.S. will be serving up fried chicken in replicas of its “iconic” holiday-themed buckets from 1966 and 1971, complete with imagery of Colonel Sanders in a Santa hat. “KFC bucket meals have been bringing people together around the dinner table for more than 60 years,” said Andrea Zahumensky, the chief marketing officer of KFC U.S. “Even though the holidays may look a little different this year, we hope our holiday buckets help everyone harks back to a simpler time and bring some comfort and joy to your homes and your families throughout the season.” KFC’s vintage buckets, which will be available in limited quantities starting on Nov. 24, are said to be recreations of both the 1966 and 1971 containers “down to the smallest detail,” which means the 1966 bucket even includes a tagline not used since that decade: “North America’s Hospitality Dish.” Fans who miss out on the 1966 and 1971-inspired buckets will instead be treated to an all-new vintage-style bucket, which features the same Santa-hat-wearing Colonel Sanders, albeit with other “modern” designs. “Fans can complete their holiday tablescape by collecting all three buckets in the 2020 holiday collection,” KFC wrote in its press release, essentially revealing its hopes that we’ll all consume three separate buckets of chicken between Nov. 24 and Christmas, and then want to save those greasy empty buckets for posterity. KFC has a long history of Christmas campaigns, but nowhere are the brand’s efforts more visible than in Japan, where KFC has become the go-to restaurant for Christmas dinner. Accounts on the origin of this practice differ, although it’s generally agreed upon that KFC began advertising its fare as a traditional Christmas food sometime in the 1970s. Takeshi Okawara, the manager of KFC’s first Osaka location and later the head of KFC Japan, has even fessed up to misleading the country’s consumers into believing Americans eat fried chicken on Christmas, claiming he told this “lie” on a national TV program in the early ‘70s when his restaurant was struggling. – Source: Fox News.

Dozens of Buyers are Eyeing Bankrupt NPC International Restaurants

More than 50 potential buyers are eyeing at least a piece of the massive number of restaurants operated by the bankrupt Wendy’s and Pizza Hut franchisee NPC International, setting a stage for a remarkably competitive set of auctions that start later this month. One of those bidders is the biggest restaurant franchisee in the U.S., Flynn Restaurant Group, which last week was approved as the “stalking horse” bidder for all of NPC’s restaurants for $816 million—over objections from Wendy’s, which has not approved Flynn as an operator of the nearly 400 units in its system that are up for sale. Still, the Flynn bid is already 12.5% higher than the $725 million NPC initially hoped to get in a sale of the assets from a trio of auctions—one for each of the Wendy’s and Pizza Hut operations and another for the whole company. At least 26 potential buyers are eyeing some of the Wendy’s restaurants, while at least 32 are eyeing some Pizza Hut locations, according to documents filed with the U.S. bankruptcy court. NPC is the largest franchisee in both the Wendy’s and Pizza Hut systems, operating 900 of the pizza chain’s units after the closure of 300 in recent months. The franchisee filed for Chapter 11 bankruptcy in July with about $900 million in debt, and the potentially competitive bid process increases the likelihood that lenders recover all of that. As the stalking horse bidder, Flynn gets the inside track on the restaurants, setting a minimum bid that potential buyers have to overcome. But Flynn—which operates Applebee’s, Arby’s, Panera Bread, and Taco Bell restaurants–could also get a breakup fee of as much as $20.5 million if the company is not the winning bidder. Wendy’s objected to Flynn’s bid, in part because of the substantial increment “is unlikely to encourage bidding,” the company’s attorneys said in a court filing on Friday. Yet Wendy’s objected to Flynn’s bid for a bigger reason: Its ownership of both Arby’s and Panera Bread franchises. “Wendy’s files this limited objection to make it clear that it has not consented to Flynn becoming a franchisee, let alone the largest franchisee in the Wendy’s system,” attorneys for Wendy’s wrote in the filing. According to the filing, Flynn refused in negotiations to sell the company’s 369 Arby’s locations and 137 Panera Bread restaurants.

That is a particularly notable point because at one time Wendy’s owned Arby’s, and until recently Wendy’s held a significant position in the company and then its owner, Inspire Brands, until its divestiture last year. In addition, according to court documents, Flynn has also “not proposed a sufficient guarantee or finalized a development and reimagine plan to allay Wendy’s concerns.” Wendy’s typically wants franchisees to agree to develop new units or remodel existing locations as a condition of its approval for them to buy locations. The company has an aggressive strategy of steering restaurants into the hands of approved operators, in part by getting those operators to agree to such capital spending. Attorneys for Flynn, however, argue that the issues between the company and Wendy’s are “all solvable.” The operator also said in a court filing that it has “agreed to put significant capital into the business” for both Wendy’s and Pizza Hut, including development, reimaging, limitations on debt, and other issues. The franchisee also said it agreed to confidentiality provisions and operating covenants “designed to alleviate stated competitive concerns” as well as the size of Flynn’s portfolio. “As the largest or one of the largest franchisees for four of the nation’s leading brands, Flynn has a deep responsibility of being the largest franchisee in a system and knows how to work in partnership with its franchisors,” the franchisee said, adding “Wendy’s has demonstrated its willingness to work with the Arby’s and Panera brands in the past,” Flynn notes that Pilot Flying J operates both Wendy’s and Arby’s and that Hamra Enterprises operates both Panera Bread and Wendy’s locations. Pizza Hut, according to the filing, has reached an agreement with Flynn on business terms for their relationship. – Restaurant Business.

Papa John’s Reveals its new Atlanta Headquarters

Papa John’s on Tuesday revealed its new Atlanta facility, a 60,000-square-foot space in a shopping and entertainment area in the Northwest part of the city that is also home to an increasing number of corporate headquarters. The pizza chain, which will maintain its offices in Louisville, Ky., as well as London, U.K., plans to employ 200 people in the space, in The Battery Atlanta. The second U.S. headquarters will house menu innovation, marketing, communications, customer experience, operations, human resources, communications, investor relations, financial planning, and development. The Louisville offices will maintain IT, supply chain, accounting, and legal. Papa John’s started the process of searching for an Atlanta location last year, the company said. The plan for the move was announced in September. The company is targeting the city because of its airport as well as its concentration of restaurant headquarters—Inspire Brands, the owner of Arby’s and Papa John’s CEO Rob Lynch’s previous employer, Focus Brands, Chick-fil-A, and others are all headquartered in the city. “It’s going to be a big win for us,” Lynch told Restaurant Business earlier this month. “It’s giving us a lot of access to the talent we need to drive top-line growth.” Papa John’s will be the third corporate headquarters to be located within The Battery Atlanta—Comcast has a regional headquarters there, while the German conglomerate ThyssenKrupp has its North American headquarters there. Papa John’s said it will spend time in Atlanta preparing for the transition and recruiting roles. The new location and related organizational changes are expected to be finished by next summer. – Source: Restaurant Business.

Is The Restaurant of the Future Already Here?

We’re all scrambling to materialize the so-called “restaurant of the future.” What COVID-19 trends are fleeting? Which aren’t? Will customers clamor for the same safety essentials months from now? Have protocols and tech dehumanized the experience? Does it even matter? Picture this environment, outlined by consulting giant Deloitte. A customer strolls into a restaurant with few tables, but two large counters with separate assembly lines behind them. One is labeled “Dine-in/Takeout.” The other, “Delivery Drivers.” The kitchen is busy, but the dining room is quiet. There’s a queue of drivers watching screens for customers’ orders. The restaurant detects a guest when they drive into the parking lot. A notification confirms they’re dining in, and an app shows them to a table. The app then asks if they’d like their usual order. Based on the prediction, the kitchen already began initial preparations the moment they walked in. As the customer exits, they notice one of the drivers with an unusually large bundle. The driver is headed to a “delivery hub,” or a central spot where warmed lockers hold food until people arrive with codes to pick up their meals. Does this sound outlandish? All of it is taking place in some form today, in one place or another. And it’s what customers are telling restaurants they want—either subtly or directly—through their pandemic behavior. It’s the collision of experience and a new standard for technology and convenience. Or simply, proof the “restaurant of the future” is ahead of schedule. COVID’s crater into the restaurant space shoved brands into unknown territory within days. Just compare March 6 to March 12. Once dining rooms went dark and guests stopped leaving the house, everything changed. Those were dynamics businesses across the globe were not, understandably, prepared for. What followed was an outpouring of ad-hoc innovation, Deloitte said. Changes likely to endure, such as mobile tech acceleration and curbside, seized early headlines. But the truth was, a lot of these shifts were the result of forces already in action before the crisis. Some, like digital customer enablement and off-premises preference, will ride a pandemic tailwind well into the future.

Others, such as touch-based kiosks and high-capacity dining rooms, could slow or reverse altogether, Deloitte said. Fast-casual Newk’s Eatery, for instance, was racing toward self-order kiosks before COVID. But it suddenly had to ask itself an odd question. Was the “touch” in touchscreen now controversial? “We don’t think anyone wants to go start touching things that somebody else already touched,” president Mike Clock says. The 120-unit chain abandoned the course. It switched gears to “hardware-less kiosks,” or a web app that enabled customers to order and pay using their own devices. Newk’s added mounted placards in restaurants with instructions to scan a QR code. Doing so downloaded a web app where guests could sit or stand wherever they wanted and order and pay. There was no waiting in line with guests. And nothing foreign to touch. Call it tableside ordering with a personal kiosk experience that used the same kiosk software as before, just optimized for a mobile device. Again, this brings us to the COVID question at hand: Which changes are part of the future, which will be adjusted, and which are evaporating? Deloitte conducted consumer surveys before and after coronavirus’s emergence to measure existing trends and the impact COVID had on their trajectory. The company then fielded one-on-one interviews with restaurant executives to examine the potential. It broke down across three key trends: Ultimate Convenience: Consumers demanded this before COVID (drive thus, the rise of third-party delivery). Frictionless digital experiences: Tech-savvy consumers continue to ask for digital engagement from restaurants and cutting-edge technology that recognizes them and their preferences.

Personalization, in every form. Heightened safety in the wake of COVID: Welcome to the world of remote work models and crowd avoidance. “Now more than ever, the ball is in each restaurant’s court,” says Jean Chick, principal at Deloitte. “What they do to respond will shape the future of each brand. Restaurants that emerge from this unplanned inflection point in the industry’s history will be set up to provide a new standard in customer convenience, responsiveness, and safety that can pay off long after the tumult of this pandemic is over.” Burger King has a prototype where customers get food delivered by conveyor belt. Convenience counts for more. This is nothing new for quick-serves. But as you’re witnessing with pick-up shelves and the like, customers today want to get their food and get out quicker than ever. They’re not just being lazy or reacting to busy schedules. A lot of guests see walking through the door of a restaurant like a real safety hazard. The faster they can leave and jump into the car, take their mask off, and breathe a sigh of relief, the better. While some of this is driven by necessity (fewer dining rooms open), the takeout adoption is remarkably high. Even in places with open dining rooms, personal safety is playing into the decision-making process—which is a COVID-specific outlier.

Per Deloitte, a lot of consumers don’t see spiking delivery and takeout behavior slipping away completely when this is over. Sixty-two percent cited “convenience” as the reason they’re patronizing restaurants today. What makes a convenient experience? Delivery costs, wait times, and pickup location. And now, contact, Deloitte said. Or a lack thereof. You have to consider, convenience is not always defined by speed. There are multiple factors at work. It’s like buying a car. Getting in and out is great, but so is the price, customer service, and how seamless (or agonizing) the experience was. Consumers want a convenient experience, Deloitte said, where they can get food on their own terms. They are willing to pay for it. On average, Deloitte found diners consider a $4 delivery fee fair. Wait time was important, yet people were flexible. Still, customers across all generations leaned toward quicker options. Going back to Deloitte’s image of a driver taking meals to a delivery hub, nearly two-thirds of customers said they were willing to pick up from a convenient location other than the restaurant itself. Imagine shelves arranged by restaurant and patron name, one friendly attendant, or even your own personal locker (like Amazon does)—along with reduced or eliminated delivery fees for guests who use the hub. This is a rather interesting notion. Perhaps the evolution of the ghost kitchen craze for pickup-centric operations? In addition, 44 percent of Deloitte’s respondents said they’d order delivery of uncooked meals they finish prepping at home. Take-home kits, in other terms. “For some consumers, the restaurant of the future may not look like a restaurant at all,” Deloitte said.

For operators, Deloitte cautioned brands that apply innovation and investment energy too broadly could end up with scattershot adjustments that don’t drive to the core of this new reality. Zero in on specifics. Countless restaurants are finding that dining out no longer means dining in. Once more, this is a multi-year trend line. The massive shift in 2020, however, with takeout, delivery, and drive-thru, is almost certainly going to stick long term. It’s why chains like McDonald’s, Taco Bell, Shake Shack, Wendy’s, Burger King, Chipotle, and others are building prototypes with smaller dining rooms, or no dining rooms, and a direct focus on drive-thru, app ordering, and curbside. Two “national fast-food brands,” told Deloitte they’re experimenting with stores 40 or 50 percent smaller than before, with less space for dining and more capacity for off-premises business. They’re also exploring updated location designs that allow employees to bring food from the kitchen straight to customers or delivery drivers. Burger King is even plotting a conveyor belt system. Meanwhile, salad bars and buffets have all but disappeared, Deloitte said. Indeed, Garden Fresh went Chapter 7, while Golden Corral’s largest franchisee declared bankruptcy. And as things transform inside restaurants, they’re changing outside, too. This is occurring with added drive-thru lanes and brands jostling for convenience share. Noodles & Company and Chipotle recently said the vast majority of their future growth will feature pick-up windows. In these cases, without menu-boards and the traditional ordering process. Both will flow exclusively through digital ordering.
Is your brand accepting payment the way customers want to pay? Sounds simple, but there’s a lot of nuance to it today.

Certain drive-thru legacy players, like Starbucks, are investing in things like order takers and tablets to roam the line and boost throughput. “Some stores are experimenting with express lanes that allow the ‘just want a coffee’ customer to finish and go while the minivan driver is still sorting out seven different value meal orders. One brand has established a location that is nothing but drive-through—five lanes, like a bank,” Deloitte said. Another anecdote was a restaurant using computer vision to recognize a car or license plate, eliminating the need for ordering or payment interactions. Voice recognition, as McDonald’s continues to test, is coming as well. In regards to staffing this surge, some quick-serves added parallel order preparation lines in stores to dedicate employees to off-premises needs (like Chipotle and its $1 million per unit second make-lines). Sometimes this comes at the expense of unused dining room space. It can be a way to rethink current stores instead of rebuilding new ones.

Packaging updates, delivery-only menus to omit foods that don’t travel well, and digital advances such as algorithms that precisely time cooking, are unlocks for restaurants, too, Deloitte said. For example, a pizza can be triggered to come out of the oven based on when the delivery driver is ready to pick it up, not when it was ordered. James Walker, SVP of Nathan’s Famous, says his brand put the practice into action once off-premises surged and it realized there was a driver shortage. It adjusted fire times to wait just a couple of minutes before arrival to start preparing orders. Better the driver waits a minute than the customer waits for 45. “The brand has to own the overall experience. So regardless of whom my delivery service provider is, I have to do everything within my power to deliver a great experience,” Walker says. “… While the overall delivery cycle time maybe unavoidable, just due to lack of drivers and increase in demand, I want to, certainly, deliver hot food to that guest. So I take it upon myself to adjust the fire times to make sure that that food that goes out, even if it should be 10 minutes and turns out to be 45, at the 45-minute mark it should go out hot and fresh.” “The tools the restaurant industry has relied on for generations—quality, service, and in-person experience—can carry them only so far in answering this rising demand for convenience,” Deloitte adds. “To win the battle for differentiation and market share, the new frontier is digital.”

Remove the friction, remove the doubt

It wasn’t that long ago customers could take a stance on tech adoption. They loved it or they didn’t. They can hate it now, but they still have to embrace it.

Prefer to order digital for off-premises delivery: 70 percent

Prefer to order digitally from a quick-service restaurant: 58 percent

Have a third-party delivery app on their phones: 57 percent

Follow a social media account from a restaurant or food brand: 48 percent

Would consider driverless or drone delivery: 40 percent

Have chosen a restaurant based on a social media post or photo: 21 percent

This might sound crazy, but before COVID, Deloitte’s data showed, restaurant customers across all segments preferred dealing with cashiers to using apps. Today, it’s reversed. Options like voice assistants and wearables are also gaining momentum. Whatever a guest’s preferred method of ordering, consumers said they would pay an average of 14 percent more for the chance to use it—and since 70 percent prefer digital interactions, digital equals dollars, Deloitte said. The roadmap to restaurants gathering app signups, Deloitte said, is to one, focus on ease of use. Two, look to the expected frequency of use. And lastly, invest in personalized offers and promotions. “Meet those needs and you may be more likely to win a place on their phones. But note that people delete restaurant apps they don’t use—so keeping users engaged will require giving them what they want,” Deloitte said. Knowing and understanding this customer isn’t easy. It breaks too many past molds. But the good news is there’s share to gain and innovation to introduce with something so unexplored. From Deloitte’s survey, here’s a look at some consumer attitudes about fresh approaches.

Ordering

When customers choose how to get their food, their top priorities are convenience (58 percent) and speed (49 percent). Any alternative ordering method should honor this twin mandate, Deloitte said. So a smart home device, text, or even a virtual reality app might seem cutting edge, but the minutes that pass while patrons await their food are the same minutes they counted when they used to order from the Yellow Pages. In other terms, the core tenets of running a restaurant still apply to running the restaurant of the future. Tech can’t cover for a poorly run restaurant.

Kitchen location

Deloitte brings up ghost kitchens. Basically, when it comes to takeout and delivery, do customers care where the food is actually located? More than half (56 percent) of respondents said they’d be willing to order from a restaurant with no customer-facing in front of the house. If there are more locations preparing food, it opens the possibility of shortening delivery distances and times. And in this particular dynamic, those factors are more important. This puts added emphasis on packaging and data collection. Brand value is always worth guarding.

Service areas

A smaller or more precisely defined delivery area can make using driverless cars or even drones more feasible, Deloitte said. It would also reduce costs and delivery times. Close to half (48 percent) of consumers said they’d be fine with one of those options.

Centralized go-to areas

Sometimes you go to a restaurant. Sometimes it comes to you. Deloitte suggested a “handoff in the middle.” Customers are familiar with retail locker delivery in many places, and 65 percent said they’d be willing to pick up food that way if the spot was less than a 10-minute walk or drive away, or if the location was along their commute. A digital app could help identify those convenient locations based on people’s driving routes and make the connection. Think of it like those charging station finders, but for food.

Deloitte brings up the question, are restaurants behind in delivering a next-generation digital experience? Before COVID, the answer probably was yes. But the sector is catching up faster than most. “Some digital offerings are just about de rigueur,” Deloitte said. “A user-friendly, frictionless digital platform that brings useful interaction—including payments—to web and mobile environments is the bare minimum required to capture customers and the market share they represent.”

In Q1 of this year, Dunkin’ completed an initiative to bring its app in-house—the intellectual property to run the platform. This gave the brand the ability to make two-and-half times the number of updates that it previously could have.

Gone is the novelty factor with apps. Apps can’t just exist; they need to stand out from the field. For the customer, Deloitte said, it must permit “order anywhere” functionality, not just ordering at the point of sale. For the restaurant, the app and its functions need to the integration with the existing CRM. Payment registration with a restaurant should make it possible for a guest to pay within the branded app no matter how the food is delivered or where it’s eaten. Deloitte put it this way: “On a future-ready platform, the context of a digital experience will depend on the ways a customer interacts with the brand, not by the channel the interaction flows through.’ A customer wants consistent, pervasive digital experiences across every touchpoint. Delivery, drive-thru, apps, and websites should all feel alike, Deloitte said. And digital interactions should be tailored to what users might want to see at each moment. For instance, if somebody selected a “delivery” tab on a menu on an app, the app could automatically display the current predicted delivery time at the top of the screen. If they pick “curbside,” it might offer open curbside spots to park in. Inside restaurants, it could tell them where to sit and wait for their food. Customized, consistent digital experiences that strengthen engagement and lead to confidence in the brand. It all has to be connected, otherwise, the burden could outweigh the benefit. Among the key reasons it’s important for digital POS technology to connect with a restaurant’s back-end functions, is to fuel customer analytics, inform loyalty program enhancements, and to come back to customers with an experience that’s truly personalized. It’s the next step after shedding “tablet hell” to prevent bottlenecks in the back.

Now, we’re talking about the evolution of serving digital orders to actually improve guest connections. “If all that happens is an order, a payment, and a delivery, the restaurant loses an opportunity to make each interaction additive to a long-term customer relationship,” Deloitte said. As customers interact with restaurants in new, digital ways, it’s more important for the restaurant’s systems to maintain a single, informed view of each customer no matter which ordering method they use next, the company added. Data is currency. With the right outlook, restaurants can steal one of digital retail’s signature methods—the “you might also like” menu offering. McDonald’s, for one, uses its Dynamic Yield technology to adjust suggestions based on things like past behavior, the weather, and what’s trending. Personal data and analytics are allowing for more “smart upsells” at the time of transaction. “When a brand understands the guest and his or her trends, frequencies, and patterns, it doesn’t just open the door to more sales,” Deloitte said. “It allows a deeper integration into the customer’s life. That’s the beginning of a relationship.” Additionally, well-informed loyalty programs are gaining speed. They can be profitable if they have the information to offer mutually beneficial deals, not just to give things away for free. Restaurants increasingly are moving rewards platforms away from direct transaction models to improve efficacy.

Deloitte suggested operators keep email on tap even as these new models emerge. Timely, personalized communications via a customer’s preferred channel could unlock frequency in an era where loyalty is stronger than it was pre-virus. As the adage goes, it’s always cheaper to retain a guest than to acquire a new one. And it’s probably worth giving away an appetizer for. Are kiosks going to be among the losers of COVID’s realignment? There’s no question they face a bumpier road today. Less in-store dining is naturally a deterrent. So is what Newk’s Clock mentioned earlier—the idea of multiple people touching the same screen. And if the solution is to constantly clean between use, how will that affect throughput? Labor? Deloitte said it’s more likely customers will see connected tablets in the hands of “augmented” attendants or at drive-thru and curbside points of sale. It added restaurants are questioning the future of previously essential POS systems “in a world where the sale can happen anywhere.” An answer for some has been to integrate the POS and digital assets onto a single technology platform that consolidates orders, operations, and customer data. Others, Deloitte said, are redefining business processes to welcome new points of sale. And some are even exploring getting rid of legacy POS systems to focus instead on cloud-based solutions, or even extending e-commerce functionality to the physical restaurant to process orders.

Is it time to rethink the kiosk?

Digital payment is getting easier for restaurants. Touchless options via near-field communication (NFC) on mobile phones is moving from innovative to table stakes, Deloitte said. Restaurant owners told the company high-level options like robotic and drone delivery aren’t an immediate focus. Instead, AI-driven natural language processing that can let machines handle text and voice orders, or integration with in-car or in-home digital assistants, like Alexa, for ordering on the go appears more imminent.

Sensing technologies, such as Wi-Fi, GPS, Bluetooth beacons, and NFC, are all potential pathways for a personalized customer experience, Deloitte said.

“For example, geo-fencing can match certain offerings to certain physical locations. Sensing paired with block-chain can enhance supply chain visibility. That can help deliver peace of mind when people know their ingredients are safely sourced and handled,” the company said. Digital tech in the back of the house can’t be overlooked, either. One example is demand management and automated forecasting that could drive robotic sequences so every morning finds the right amount of pancake and omelet fixings ready to use. Or imagine a fryer heating up in anticipation of a spike in French fry orders. Driver routing mechanisms could take traffic and weather into account in real-time, allowing a driver to make more deliveries, quicker, Deloitte said.

Important to this future outlook is to understand what works and what doesn’t, where to automate, and where to keep the human element involved. As an executive told Deloitte, “Nobody has ever said, ‘I love the way you guys unload a truck.’” But the idea of automating pizza might not work for everybody. It depends on the restaurant, of course, and the customer, and where it gets credit and where it doesn’t. Don’t take the labor out of the restaurant just because you can. Losing brand equity costs more in the long term than saving on hours.

Safety and trends

Deloitte’s Center for Consumer Insights discovered that, as of late July, restaurant spending was down more than 20 percent compared to year-ago levels. The gap, though, was starting to narrow. Meanwhile, average checks were climbing from June to July (this is mostly a quick-service reality. Full-serves feel the loss from beverages with off-premises orders). For quick-service brands, family meals and the lack of solo occasions drove the lift. One of the earliest social effects was an increase in at-home cooking. Half of Deloitte’s respondents said they won’t go back to normal for at least six months. However, when their cooking versus ordering patterns return to prior norms, almost a quarter (23 percent) said their new, more frequent takeout and delivery habits would be permanent. “This means the arena where restaurants need to win, right now, is off-premises dining,” Deloitte said. A top formula, the company added, isn’t just providing safety, but making safety consistently visible. This, too, is something nobody would have expected before coronavirus. Four out of five people said they’d be more likely to visit a restaurant if they knew what steps it took to enhance cleanliness, food safety, or guest safety, and when they did, they would be willing to pay an average of 10 percent more. It’s clear then why communication and transparency deserves a premium. Frequent diners said they were more likely (56 percent) to trust brand websites than the general clientele (43 percent). What about the long-term? Half of the people who stopped going to a restaurant said it’s not because of delivery options or safety practices, but rather because the location closed due to COVID. Half said they would visit a restaurant that returns to pre-crisis norms even without visible changes.

“The thread of hope brands can take from this is that as locations reopen, customers will have a desire to return,” Deloitte said.

What do consumers want from restaurants in the wake of COVID?

Surfaces cleaned after each use: 87 percent

Personal control of cleaning: 85 percent

Visible cleaning practices: 85 percent

Official certification of cleanliness: 84 percent

Measures to ensure employee health and safety: 82 percent.

A lot of restaurants are paring down menus to improve execution and allow stores to focus more on safety protocols. To also helps with supply chain interruptions. Other menu changes meet those check demands, like family bundles. “Like changes to the physical layout, menu changes are likely here to stay,” Deloitte said.

“Restaurants that emerge from this unplanned inflection point in the industry’s history will be set up to provide a new standard in customer convenience, responsiveness, and safety that will pay off long after the tumult of this pandemic is over,” the company added. – Source: QSR.

McDonald’s Corp. Names Tiffanie Boyd U.S. Chief People Officer

McDonald’s Corp. named Tiffanie Boyd to the role of U.S. Chief People Officer, the company announced Monday. Boyd, who comes to the chain from General Mills, starts Jan. 4. She is among several new executive hires made under Chris Kempczinski, who was named president and CEO last year when Steve Easterbrook was abruptly fired. Kempczinski has been especially focused on revamping the Chicago-based company’s human resources team. His first hire was Heidi Capozzi, who was named executive vice president and global chief people officer in March. She started in April and immediately began working with Kempczinski to refresh the company’s values. On Monday, Capozzi and Joe Erlinger, president of McDonald’s USA, told employees that Boyd will lead work that will “continue to make McDonald’s a safe, equitable, and rewarding place to work.”  “Tiffanie joins us at a time when our commitment to people has never been more critical,” the two leaders wrote in a note viewed by Nation’s Restaurant News.  “As part of our 2021-2022 U.S. Own the Ambition plan, crew experience is our most important growth priority. In partnership with owner/operator leadership, we intend to make bold moves for our people as we roll out our Employee Value Proposition and People Purpose throughout the system.” Boyd worked at General Mills for 23 years, having started her career working in one of the company’s manufacturing plants. She was previously vice president of Human Resources North America Retail, the company’s largest division. She led engagement and culture change for 11,000 employees in that business unit.

Capozzi and Erlinger said Boyd is a focused leader and “unyielding in her commitment to seeking continuous improvement for the business, people, and communities she supports.” “She also takes tremendous pride in leading with integrity, inclusion, and a growth mindset – the bedrock of our values,” according to the memo sent to employees Monday morning. Boyd said she is proud to join a “powerful brand” with a strong presence across our country. “I look forward to working with franchisees to bring the McDonald’s values to life through our people and their employee experience, as well as the communities in which we operate,” she said in a statement. “My goal is to ensure that McDonald’s is a place where people love the work they do, have opportunities to grow, and can make a meaningful contribution to society. As I step into my role, my first priority will be to spend time with employees, managers, crew, owner/operators, and other partners who bring the iconic McDonald’s brand to life.” Earlier this month, McDonald’s Corp. named Reginald J. Miller to the position of vice president and global chief diversity, equity, and inclusion officer. Former Boeing executive Bethany Tate Cornell was named chief learning and development officer. She previously worked with Capozzi, who also came to McDonald’s from Boeing. The HR leadership changes came after Chief People Officer David Fairhurst left the company following the firing of former CEO Steve Easterbrook. Since starting at the company in April, Capozzi has worked with Kempczinski to make changes both inside and outside of the company “to drive equitable opportunity for all who encounter our brand,” she said in late July at the chain’s Worldwide Connection conference. – Source: NRN.

Freddy’s Plans Florida Push with New Franchise Partner

Freddy’s Frozen Custard & Steakburgers has signed a franchise agreement with shopping center developer RSolution Holdings to develop 50 new restaurants over the next several years across the Southeast. The Wichita, Kan.-based fast-casual brand said that, as part of this 50-unit development agreement, Freddy’s will grow its footprint on Florida’s west coast and Panhandle. Locations are under development and scheduled to open next year in Pensacola and Tampa. St. Louis, Mo.-based RSolution, which develops shopping centers and is also a Slim Chickens franchisee in Missouri and Illinois markets, had acquired three Florida Freddy’s locations last year in Bradenton, Ocala and Sarasota. Freddy’s was co-founded in 2002 by Scott Redler and Bill, Randy and Freddy Simon and offers burgers, fries, hot dogs and frozen custard. “I was introduced to Randy Simon through our mutual involvement with the International Council of Shopping Centers,” said Gary Grewe, RSolution principal, in a statement. “Randy’s passion for the brand coupled with the impressive proven business model motivated our group to explore Freddy’s franchise opportunities. “After purchasing several existing locations in Florida,” Grewe said, “We saw firsthand how well the state’s dual demographic resonated with the concept and didn’t hesitate to expand our partnership with a larger multi-unit deal.” Since the COVID-19 pandemic was declared in March, Freddy’s said innovation and technology allowed it to continue its expansion. This year, Freddy’s has opened 29 new restaurants to date with additional locations in the pipeline slated to open before the end of the year, including its milestone 400th location. Freddy’s has locations in 32 states. – Source: NRN.

Jack in the Box Reports 12.2% Same-Store Sales Jump and Prepares to Expand

With a two-year-old dispute with franchisees resolved and restaurant profitability up, Jack in the Box is poised to start growing again, CEO Darin Harris told investors Thursday while discussing the San Diego-based quick-service chain’s performance in the fourth quarter, ended Sept. 27. It was a good quarter. Same-store sales were up by 12.2%, the best performance since 1994, as average checks skyrocketed even as traffic declined. The company’s net earnings were $37.85 million, or $1.65 per share, compared to $22.1 million, or 86 cents per share in the fourth quarter of 2019, on revenue of $255 million, up from $221.2 million. Harris, who just joined the chai in June, has been involved since then in negotiating a settlement with the National Jack in the Box Franchisee Association, which represents nearly 85% of the approximately 2,000 franchised Jack in the Box restaurants. The NFA has sued Jack in the Box in late 2018 for, among other things, failure to have a cohesive brand strategy. The dispute was resolved last week, although terms were not disclosed, which Harris said: “clears the path for our existing franchisees to grow, and they’ve expressed that desire to grow.” He said a recent survey of franchisees found that two-thirds of them wanted to expand and that in fact 27 new restaurants were opened in this fiscal year, “which is more than in the past ten years, despite the pandemic,” he said. The chain did close 29 underperforming restaurants, however, ending the year with 2,241 restaurants, down from 2,243 at the end of fiscal 2019. Those restaurants are making more money, however: Although franchisee reports for the fourth quarter aren’t in yet, Harris said that profitability in the third quarter was up by $20.000 per restaurant.

To help spur growth, Jack in the Box has rolled out a new lower-cost prototype with a small footprint and options for drive-thru only locations, Harris said. He also hired Tim Linderman, former chief development officer for family-dining chain Huddle House, to the newly created position of senior vice president, franchise, and corporate development. “You have an impressive track record of accelerating growth with innovative approaches and fostering exceptional relationships with existing and potential franchisees,” he told Linderman during the call. “We did not previously have a dedicated franchise sales leader at Jack, so we are very excited to bring him on board.” A search is still underway for a new chief financial officer — “I can tell you we have talked to several great candidates and made tremendous progress in or CFO search,” Harris said — and a chief marketing officer; the latter position has been vacant for two years. “While our two marketing SVPs have done a fantastic job of splitting the role and putting the customer first during this time, we are looking for a leader to come in and focus on three core areas for the long-term success of the brand,” Harris said. Those areas are overall brand strategy, evolution to a more digitally enabled experience, and continued strength in product innovation.  That innovation, and response to consumers’ changing needs, were keys to Jack in the Box’s success during the pandemic.  “We have certainly learned a lot about where consumers are headed during this pandemic … The continued importance of digital, the consolidation of transactions to drive higher checks … and the desire for more indulgence,” he said.

Average checks for the quarter were $10.72, compared to $8.50 a year ago. Mobil app and delivery sales were about double what they had been before the pandemic. Harris said that key drivers of success were the $4.99 bundles that were introduced in 2019, as well as the Tiny Tacos, introduced in January, which have been “highly incremental,” as customers add them to existing orders. The fourth-quarter relaunching of $3 mozzarella sticks also helped the chain in “meeting our guests’ needs for craveable, snackable and sharable sides,” Harris said. They also were helpful in bolstering average checks, he said. In mid-August, Jack in the Box brought back its spicy chicken strips, including an upsell of two more strips for $2 more. To drive mobile ordering, they offered a 10-piece spicy chicken option available only through delivery. “These upsell strategies are not only easy for our crews to execute, but they enable the guests to get what they want at a great value, and support profitability of these promotions for us and our franchisees,” Harris said. The chain also made operational improvements in the strips which led to better quality and reducing fryer time, leading to improved customer satisfaction, Harris said. He said there would be more on the chicken front in 2021. “Just to give you a kind of peek under the tent, we have a new major product line introduction coming soon. … The team has been working on a new chicken program and we’re eager to see what happens in a few weeks, but the focus is on improved quality, thickness and flavor, and who knows? My hope is we’ll be able to celebrate that by doing a new chicken dance,” Harris said. – Source: NRN.

Leaders Emphasize Importance of Empathy, Flexibility, and Safety During COVID

My team spends most of their days designing and deploying next-gen leadership-development tools for multiunit franchisees and above restaurant leaders. Naturally, we pay a lot of attention to the unique challenges facing multiunit leaders and the innovative ways they overcome them, especially in a global pandemic. Since COVID-19 hit, the foodservice industry’s area directors, district managers, and market leaders have proven to once again be the key connective tissue between the company and the customer. No franchisor or franchisee could be successful without the navigational (and improvisational) skills of their multiunit leaders (MULs). In my last two columns, I shared creative post-pandemic lessons in leadership from a variety of MULs across industry segments. This month, I’d like to share four more. Felicia White, vice president of operations training and development for Atlanta-based Church’s Chicken shared these three lessons in leadership: “First, I’d say to be flexible and open-minded. There may have been standards in place previously which now need to change, or possibly an ‘old way’ of doing something that could be replaced with a new and better way. Be forgiving of your team and yourself when there’s a change in direction that causes a deadline to be missed. Remember that when we began January 2020, no one had factored in a global pandemic to the business plan! Second, prioritize your health and wellness and make sure your team does the same. Remember Maslow’s hierarchy of needs. During times of crisis and chaos, our innate reaction is to ensure that our basic needs are met first. These include our physiological and safety needs. If those basic needs are not addressed first, we can’t expect people to thrive in other areas of life and business. I constantly check in on the mental and physical health of myself and my team.  “Third, take time to disconnect. It’s easy nowadays to be online constantly because that’s how we communicate and conduct the majority of business today. It’s important to have the discipline to put away the devices when there’s a need for personal time and when you need to focus on a project. This allows you the rare opportunity to simply think, and Innovation often happens during those quiet moments when you are alone with your thoughts.

These moments are where we find the answers to the complex people and business challenges we face every day.” Asra Khan, a multiunit leader for the Schererville, Ind.-based Taru Patel and Dave Patel Network, who franchise Dunkin’ and Baskin-Robbins restaurants, shared this insight: “Whenever I hear doctors and nurses being called frontline soldiers and heroes, I am reminded that the same is true of all the hard-working teams in our restaurants. Our people have produced outstanding results despite all the uncertainty and heightened food safety, sanitation, and social-distancing concerns since the onset of COVID-19. “In my network of 18 stores, our sales and transaction numbers are up considerably since the pandemic began. These results are a testament to both the team’s resilience and the brand’s commitment to — and support for — the safety of our team members and guests. Our people worked with smiling faces, a great positive attitude, and tireless dedication to excellence. This helped us win the guest’s trust and loyalty, which allowed us to grow. “Inspiring people to do something they thought they couldn’t do in uncertain times, demonstrating how the impossible is, in fact, possible, and believing in teams when they didn’t always believe in themselves, defines a post-pandemic leader. The three things I’ve learned are that leadership shapes consistency, consistency builds trust, and trust creates loyalty.” Robyn Lippert, a franchise business consultant with Wisconsin-based Culver’s Franchising System, LLC, shared these three lessons in leadership: “I’d like to qualify this by saying these are not new leadership strategies.

With or without COVID-19, these are important tactics in any leadership toolbox, but in light of the coronavirus pandemic, they’ve become essential. “First: Lead with empathy and understanding. The pandemic hit people on so many levels; professionally, physically, financially, mentally, etc.  It has been even more important to genuinely listen to what a business owner, manager, employee, or customer is feeling and dealing with.  With that understanding, you can better assess what is needed to serve and support them. “Second: Be flexible and agile. In many cases, restaurants have had to completely rethink and reprioritize their operations, including adjusting to more business in the to-go space, maximizing drive-thru efficiency, staffing/scheduling, and supply-chain challenges.  Being able to adapt and adjust was, and is, essential for survival in what is certainly the most challenging environment the industry has ever seen. “Third: Safety in everything. You can’t build customer and crew trust, confidence, and loyalty without a clear commitment to keeping them safe. We can never let our guard down.” Bill Spae, president and CEO of Lonestar DQ, operator of over 75 Dairy Queens in Texas and New Mexico, shared these three lessons learned: “First, thank goodness for drive-thrus! As a result of having them in all of our units, we have been able to sustain flat to positive YOY sales even with dining rooms closed.  We also put more focus on drive-thru performance like speed, accuracy, quality, friendliness, safety, and technology. Restaurant design will be dramatically affected by going forward. “Second: Don’t panic. Lead by example in a calm, positive, helpful manner. “Third: Survive to thrive! All things run their course. Keep your composure and be sure your team knows your steady hand is on the tiller and the business will survive with everyone’s help and commitment.”  — Source: NRN/Sullivsion.

Thompson Hospitality Acquires Matchbox in Bankruptcy Deal

Thompson Hospitality, a retail and facilities and management company, has acquired Matchbox Food Group LLC as the casual-dining chain emerged from Chapter 11 bankruptcy protection, the company said. Reston, Va.-based Thompson Hospitality in 2018 had made an $11 million investment in the Washington, D.C.-based Matchbox, a deal that had included an unexercised purchase option. In the bankruptcy deal, Thompson acquired Matchbox’s assets, which include nine company-owned restaurants and one franchised unit. As part of the reorganization, three Matchbox restaurants were closed earlier, including those in Dallas, on 14th Street in Washington, and in Potomac Mills, Va. Matchbox filed on Aug. 3 for Chapter 11 bankruptcy protection, citing the impact of the coronavirus pandemic and the need to “rationalize its store footprint,” the company said at the time. Thompson Hospitality had managed Matchbox for the past two years. Warren Thompson, president and chairman of Thompson Hospitality, said in a statement: “I want to extend our gratitude to the Matchbox and Thompson Hospitality teams, who continued to believe in the company and worked diligently to help this beloved restaurant brand successfully and swiftly emerge from Chapter 11 bankruptcy protection in a stronger long-term position.” Thompson said he was confident in Matchbox’s future despite the COVID-19 pandemic. “Never before have we experienced such trying times in the restaurant industry and the fact that this brand will continue to live on is one bright spot during these unprecedented times,” Thompson said. Matchbox has remaining units in the District of Columbia, Florida, and Virginia. The company said three Matchbox locations are slated to open in the coming months: Cathedral Commons in Washington, D.C.; Reston, Va.; and Las Olas in Fort Lauderdale, Fla. As part of the Matchbox growth plan, the company said, new locations will be less than 4,000 square feet, smaller than many current locations. Matchbox was founded in 2003. – Source: Restaurant Hospitality.

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