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April 25, 2022by David Klemt David Klemt No Comments

Hiring Struggles? Engage These Age Groups

Hiring Struggles? Engage These Age Groups

by David Klemt

Staff turnover rates are still above pre-pandemic levels and there’s no silver bullet solution. However, two companies have some helpful advice.

Both Service Management Group and Technomic shared their tips during Restaurant Leadership Conference. Interestingly, each company has a different approach to the current hospitality industry labor problem.

In short, both SMG and Technomic advise operators to engage with vastly different age groups. However, they each have information that supports their recommendations.

Service Management Group

Jennifer Grimes, senior vice president of client services for Service Management Group, co-presented a session with Jim Thompson, COO of Chicken Salad Chick.

SMG is a software-with-a-service platform that seeks to the employee, customer, and brand experience. One crucial element of the company’s mission is the reduction of staff turnover.

During the RLC session, Grimes shared several years of hospitality turnover rates:

2017: 72%
2018: 75%
2019: 79%
2020: 130%
2021: 86%

First, some context. The general consensus is that the industry’s average turnover rate has been between 70 and 80 percent for close to a decade. However, in comparison to other industries—10 to 15 percent—that’s stratospherically high.

Secondly, the turnover rate has been on rise since before the pandemic. Per some sources, the rate jumped from 66 percent in 2014 to 72 percent in 2015, a trend that continues to this day.

For SMG, the age group operators should seek to engage—generally speaking, of course—is 25 to 34 years old. Per the SWaS platform, this group was the most engaged pre-pandemic.

One reason for SMG’s suggestion is that Boomers appear to opting out of the workforce.

During the presentation by Grimes and Thompson, the latter shared that Chicken Salad Chick predicts the 2022 turnover rate to be just slightly above the 2019 rate.

Technomic

Unsurprisingly, Technomic had some numbers to share during RLC 2022 in Scottsdale, Arizona.

Per data provided by Joe Pawlak and Richard Shank, 70 percent of operators are still struggling with labor. Recruiting, hiring, and retaining staff doesn’t appear to be getting any easier four months into 2022.

Technomic also pointed out that the US saw the lowest population growth in its history last year: 0.1 percent.

Additionally, almost 17 percent of the country’s population is now at least 65 years old. In 2019, 48 percent of people 55 or older retired. That number is now just over 50 percent for the same age group.

Nearly seven million American consumers turn 60 each year, while four million turn 70 or older.

Logically, one may assume that Technomic is saying a significant portion of the US population is leaving the workforce. So, it’s best to focus on the same age group as SMG recommends.

However, Technomic is recommending a different strategy. Per Pawlak and Shank, retirees (mostly ages 55 and up) tend to have valuable managerial skills and experience.

Obviously, those skills and all that experience can be of great benefit to operators and our industry.

Certainly, all groups should be engaged by operators seeking to recruit, hire, and develop their teams. So, as KRG Hospitality sees recruitment, operators should craft targeted, authentic messaging that appeals to each age group.

Image: Sebastian Coman Photography from Pexels

April 22, 2022by David Klemt David Klemt No Comments

Código 1530 Pursuing Low-waste Initiatives

Código 1530 Pursuing Low-waste Initiatives

by David Klemt

Blue Weber agave plant in Tequila, Mexico

Tequila Código 1530 is making the upcycling of the agave they use a cornerstone of the brand’s sustainability efforts.

Some agave growers and tequila producers the plant as mulch, fertilizer, and biofuel. Bagasse, the fibrous material distillers separate from agave piñas, along with the leaves, is composted and used to fertilize agave fields.

While not common, some distillers will even take other producers’ agave bagasse and leaves to compost it.

However, Código 1530 is now doing even more with their agave.

Agave Sustainability

According to some in the spirits and hospitality industries, tequila may end vodka’s dominance in the US this year. Obviously, this would be the result of an increase in consumer demand.

Well, that necessitates an increase in production. So, it follows that agave growers have motivation to grow and harvest as much mature agave as possible.

However, it takes about eight years for some agave plants to mature. Others take more than ten years. For some rarer species, maturation takes twelve years or more.

Of course, production leads to waste. In simple terms, that’s the problem producers must solve.

One definition of “sustainability” is striking an ecological balance that preserves natural resources. For tequila production in particular, this means finding ways to meet consumer demand while harvesting agave reponsibly.

While composting and mulching is a great idea, Código 1530 sees the need to take things further.

More than Mulch

We’ve probably all been given at least one drink served with a paper straw. Unfortunately, that means most of us know how quickly that experience can become less than enjoyable.

Even some of the best-made paper straws can turn soggy long before a drink is finished. On the operator side, that’s not great for the guest experience, to say nothing of the costs associated with stocking paper straws.

However, some operators and their guests are willing to stick with paper straws to be sustainable. That’s admirable but there may be a better way, and it involves agave.

“We quickly realized that after harvesting agave to distill Código 1530 Tequila, the remaining agave was only being used as mulch to top our soil for future plants or burned as a fuel source,” explains George Strait. “We are still using some of the excess agave fiber as mulch, and now have begun producing straws and cups in a sustainable and eco-friendly manner.”

Strait, as some may know, is an investor in Código 1530. A lesser-known fact is that Strait graduated Texas State University (formerly known as Southwest Texas State University) with a degree in agriculture.

“This is a lifesaving program for sea life affected by plastic pollution,” says Strait of Código 1530’s new agave sustainability efforts.

Unlike paper straws, agave straws don’t get soggy or deform. Additionally, they can be thrown out in normal trash after use as they’re biodegradable.

However, this agave initiative doesn’t end with straws. Código 1530 is also making agave fiber cups, coffee cups, cocktail shakers, and shot glasses.

Tea-quila

To celebrate Earth Day and their sustainability efforts, Código 1530 has created the drink below.

Image: Amir Shafii, Código 1530

1.5 oz. Código 1530 Blanco
3 oz. Bergamot tea
0.75 oz. Lemon juice
0.5 oz. Lavender simple syrup
Lavender sprig to garnish

Housemade simple cuts down on the waste associated with producing and shipping bottles of syrup. To make the lavender simple syrup, bring one cup of water and one cup of sugar to a boil. Add ten sprigs of lavender while water and sugar are boiling, let cool, then strain. For this low-waste cocktail build, add all ingredients and ice to a shaker. Shake, then strain into a Collins glass with ice. Garnish with a sprig of lavender.

Image: BRUNO EMMANUELLE on Unsplash

April 20, 2022by David Klemt David Klemt No Comments

Chain Restaurants: Present & Future

Chain Restaurants: Present & Future

Technomic presented the state of chain restaurants, now and next, during Restaurant Leadership Conference 2022 in Scottsdale, Arizona.

Obviously, the entire hospitality industry is facing significant struggles. Rising costs, supply chain chaos, labor shortages and challenges, inflation… The past two-years-plus haven’t been easy.

However, there’s reason for operators and their leadership teams and staff to be optimistic. Additionally, independent and small-chain operators can learn from Technomic’s findings.

Challenges & Threats

Well, let’s take our medicine first, starting with the supply chain. In short, it’s bedlam.

Joe Pawlak (standing in for David Henkes) and Richard Shank of Technomic said as much during RLC 2022. Per their data, 35 percent of operators dropped at least one manufacturer between 2020 and 2021.

Whether because of rising costs, an inability to consistently deliver product, or other factors, operators had to adapt. Clearly, there’s a nasty trickle-down effect when an operator drops a supplier.

And then there’s inflation. Interestingly, Shank calls what we’re seeing currently as “existential inflation.” Relating to consumers, this means their confidence is shaken in terms of spending.

Of course, this type of consumer perception manifests in several ways. For example, some guests cut down on visits. Others will cut down on ordering, skipping appetizers and desserts. Perhaps they have one less beer, glass of wine, or cocktail.

Also, some guests “trade down.” Meaning, there are consumers who opt for casual restaurants rather than fine dining. Or, they’ll move from fast-casual to QSR.

Looking at the numbers, however, nearly 40 percent respondents to a Technomic survey say they’re visiting restaurants less. This makes sense, as 81 percent are concerned about how inflation will impact them personally.

On the operator side of inflation comes pricing. During Pawlak and Shank’s presentation, they used QSR dinner pricing as a real-world example.

According to Technomic, the tipping point for guest perception of good value is just $7. At only $10, consumers feel things are getting expensive.

As Pawlak and Shank pointed out, this is a problem. After all, the average price for dinner at a QSR is $10.08. That number may already be higher today.

Opportunities

Medicine taken, we can move to the good news.

First, Technomic predicts a strong Q3 this year. Additionally, they don’t expect double-digit year-over-year inflation.

In terms of labor, Technomic doesn’t expect costs to go down. However, they do anticipate that they’ll level off rather than rise.

Then there are the numbers. For the top 500 chains in the US in particular, 2021 was a “banner year,” according to Pawlak. On an aggregate basis, sales for the top 500 (McDonald’s is number one, for those wondering) are up 17.9 percent.

Also, every category of restaurant is performing better. The top 500 chains, for instance, are up 18 percent year-over-year. Midscale restaurants are up 38.5 percent. Casual is up 30.2 percent while fast is up 22.2 percent, QSRs are up 13.2 percent. As far as the biggest bump, fine dining is up 56.9 percent.

Looking at 2019 for obvious reasons, the industry was down 49.1 percent in sales in April 2020. However, the industry was down just about a single percentage point in February of this year compared to the same time in 2019.

So, how do we keep sales trending upward when facing inflation and other threats? Pawlak, Shank, and Technomic have some advice.

Operators, for instance, can implement the “balanced barbell” pricing strategy. In this model, high-value items drive business alongside premium offerings. In other words, don’t discount the entire menu just to entice guests to keep visiting.

Once guests get a taste for falling prices, they’ll consider the lower prices the standard. After that, any increase can be perceived as “too expensive.” Of course, discounting the whole menu also impacts guest perception of the brand negatively.

In addition, Technomic suggests offering higher net profit discount bundles, and implementing off-premise, large-party strategies.

Should Technomic’s predictions prove true, the industry may see an even stronger Q4 and start to 2023.

Image: Alex Haney on Unsplash

April 19, 2022by David Klemt David Klemt No Comments

Dining Room Tech on the Rise

Dining Room Tech on the Rise

by David Klemt

After years of restaurant technology adoption moving at a glacial pace, the industry now appears to be embracing innovations at light speed.

In fact, in just two short years some in the industry think it may be time to slow down. New tech can be exciting but jumping on every “innovation” is expensive, time consuming, and inefficient.

However, slowing down doesn’t equate to hitting the pause button.

Dining room tech was a topic of discussion at the 2022 Restaurant Leadership Conference in Scottsdale, Arizona. The two speakers agree that our industry needs to ease off the tech throttle a bit.

However, they also feel that tech innovations in the restaurant space will continue at a faster rate than they did pre-pandemic.

Session host Raymond Howard, a co-founder of Ziosk, interviewed Chris DeFrain and Hernan Mujica about dining room tech. DeFrain is a CPA at Lehigh Valley Restaurant Group, which operators 21 Red Robin franchises throughout Pennsylvania. Mujica is CIO for Texas Roadhouse.

Red Robin

Industry professionals and consumers alike should be familiar with Ziosk. After all, Red Robin has been a client with tech company since August, 2012.

Anyone who has visited a Red Robin has certainly interacted with a Ziosk terminal.

According to DeFrain, there are some interesting consumer behaviors taking place in Red Robin dining rooms. When it comes to tech, guests appear satisfied to place orders for appetizers and desserts via Ziosk terminals.

As DeFrain sees it, the guest would rather not wait for a server for ordering those types of food items. However, guests do seem to prefer ordering entrees from a server.

That’s a positive in DeFrain’s opinion, as he believes that ordering must remain the domain of servers. While he contends that the tech-based ordering process needs streamlining, DeFrain doesn’t appear interested in taking it out of servers’ hands completely.

This makes sense; the server as an integral element of the guest experience. How can a casual dining restaurant build guest loyalty and deliver a memorable guest experience without an engaging front-of-house team?

Of course, dining room tech should do more than accept orders, summon a server, and offer tableside payments. Today, data is king. Powerful platforms collect as much useful data as possible.

To that end, DeFrain appreciates that Ziosk provides data Red Robin leadership teams can share with staff. For example, a server can be shown how much they’re making in tips during their shift.

Finally, DeFrain says that guest usage of Ziosk terminals is improving feedback and comments.

Texas Roadhouse

In comparison to Red Robin, Texas Roadhouse took longer to sign on with Ziosk. In part, interestingly, this was due to the redesign of the terminal itself.

Turns out, Texas Roadhouse waited for a Ziosk terminal that took up less space and looked better on the chain’s tables.

Per Mujica (and any Texas Roadhouse guest), the in-person experience is core to the brand. Therefore, dining room tech must be an enhancement, not a detriment.

Like Red Robin, the chain has no interest in adopting tech that replaces FoH staff.

Another consideration regarding dining room tech should be important to all operators: The tech must be user friendly. According to Mujica, restaurant guests are happy to embrace tech innovations—if it’s easy to use.

So, operators must be careful and deliberate when choosing their tech stack. Generally speaking, native tech users (Gen Z) will likely be much quicker to learn how to use a particular technology than a Baby Boomer or even Gen X counterpart.

As such, operators must know their guests in order to adopt tech that enhances rather than alienates.

Another reason Texas Roadhouse chose Ziosk, per Mujica, comes down to mobile pay. In short, the chain didn’t like the mobile pay guest experience.

In terms of the future, Mujica predicts that handheld, tableside ordering is the future of dining room tech.

Takeaway

Like Mujica says, operators have now seen what tech innovations can do for them. In short, there’s no turning back.

And I agree with Mujica and DeFrain: it’s likely (and necessary) that tech development will slow a bit moving forward. Honestly, we all need room to breathe, consider the innovations available currently, and decide what works best for a particular business.

Likewise, I agree that tech can’t be allowed to alter the service model. Technology shouldn’t be seen as a replacement for staff.

Interestingly, restaurateur David Chang addressed this very subject during a 2022 RLC conversation. In his opinion, tech won’t replace restaurant roles, it will streamline them. At most, said Chang, tech will replace small, repetitive tasks, such as the physical flipping of a burger.

In closing, when deciding on the tech stack, operators should consider the following: ease of use for guests, ease of use for staff, streamlining of operations, and cost.

In this space, tech should never be embraced simply because it’s shiny and new. Not only is that costly in terms of investment, it can cost guest loyalty and visit frequency.

Image: Vishnu Mohanan on Unsplash

April 18, 2022by David Klemt David Klemt No Comments

This Simple Test Reveals Process Problems

This Simple Test Reveals Process Problems

by David Klemt

There’s an easy way to identify whether there are changes that need to be made to processes and practices that only requires observation and time.

Luckily, it doesn’t take much time, either. In less than a week, an operator can determine if there are issues relating to onboarding new hires.

This simple test was shared during the 2022 Restaurant Leadership Conference in Scottsdale.

Interviews are Just the Start

It should go without saying but here we go: The hiring process doesn’t end with the interview.

An operator or their leadership team found an amazing job candidate? Awesome! That’s no small feat these days.

However, that’s just the first step in hiring and building a rock star restaurant, bar or hotel team.

Step two is onboarding, step three is training, and step four is advancement.

For KRG Hospitality, onboarding goes far beyond filling out federal and state paperwork. There’s more to it than setting up direct deposit and getting a new hire on the schedule.

Rather, operators need to implement a fully developed onboarding process. The key word there is “process.”

True onboarding includes the review of an employee handbook and an introduction to the business. During this process new hires should become familiar with the brand’s history, vision, culture, mission, and core values.

By the end of this process, a new team member should understand what’s expected of them, both in their individual role and behaviorally. Additionally, they should be introduced to the entire team.

In reality, the onboarding process is the development of a professional relationship.

The Test

Technically, the actual test for operators is for them to have in-depth hiring, onboarding and training processes in place.

So, operators should take a moment to review whether they have those processes.

However, the test I’m talking about here relates to onboarding directly. It’s simple and it was shared during RLC 2022 by Jim Thompson, COO of Chicken Salad Chick.

The only requirement is a few days’ time and an observant operator and/or leadership team.

Let’s say a candidate nails the interview. In particular, their personality is perfect for the available role. As the the hospitality industry maxim goes, hire for personality, train for skills.

The new hire works their first shift but their personality doesn’t shine through. However, that could be first-day jitters. Unfortunately, that personality the leadership team hired for is nowhere to be seen during their next few shifts.

According to Thompson, if a new hire’s personality doesn’t shine through within four shifts, there’s likely a process and practices issue. The lack of personality is an indicator that the new team member doesn’t feel confident in their role.

The onboarding process—either too shallow or nonexistent—is a likely culprit. Operators can use this test, a simple four-shift observation of a new hire, to determine if there’s a problem.

Once identified, the operator and their leaders can put their heads together, review the issue, and implement effective, positive change.

Image: Caroline Attwood on Unsplash

April 15, 2022by David Klemt David Klemt No Comments

The Uber Effect: Recruit and Retain

The Uber Effect: Recruit and Retain

by David Klemt

To better understand how to recruit and retain top talent these days we can simply look at what’s known as the Uber Effect.

We just got back from the Restaurant Leadership Conference in Scottsdale, Arizona. The education was top-notch, featuring a wide range of restaurant industry experts.

One outstanding session illustrates the need for operators—chain and independent—to change their approach to recruiting and retaining staff.

Flexibility in the Workplace

According to Jennifer Grimes, senior vice president of client services for Service Management Group, people in the labor pool are after three things when seeking employment.

Generally speaking, they want better pay, better benefits, and better scheduling. Gone are the days of people focusing only on their paychecks.

And per Jim Thompson, chief operating officer of Chicken Salad Chick, the Uber Effect is largely responsible for this shift in focus. The Uber Effect refers to people realizing they can be much more in control of their careers.

In simplest terms, Uber drivers are in control of their workdays. They can work as often as they want, whatever hours they want, and wear what they want while working.

Of course, it’s not complete anarchy. There are rules, there are expectations, there are standards. However, there’s also flexibility.

Along with more flexibility in scheduling, people want the following:

workload balance;
ability to trade shifts;
better communication; and
paid vacations.

Today’s modern scheduling platforms make it simple for operators and their leadership teams to meet these expectations. With these apps, operators and leadership can:

assign specific roles to individual team members;
communicate clearly with staff;
allow staff to trade, drop, and pick up shifts; and
fill available shifts.

One Size Doesn’t Fit All

Thompson has an interesting anecdote about availability.

A Chicken Salad Chick manager conducting interviews didn’t proceed with a candidate. Asked by Thompson why they wouldn’t be moving forward, the manager pointed to the candidate’s availability.

During the interview, the candidate provided only a single day and the manager felt that wasn’t enough. However, Thompson disagreed with the manager’s assessment.

What if, Thompson posited Thompson, their availability filled a currently open shift? At least there would be one less shift for leadership to worry about.

But it went deeper than just that point. Good operators and leaders know that job interviews aren’t one-way streets. Candidates are also interviewing their potential employer.

What if this candidate provided limited availability because they’re unsure about a particular employer? They may not know the brand all that well, they likely don’t know the leadership team, and they don’t yet understand the workplace’s culture.

As Thompson says, “One size fits all is over.” Operators and their leadership teams need to be flexible.

It’s highly possible that just a few shifts in, if the narrow-availability team member is a good fit and finds the job engaging, they’ll broaden they’re availability.

Developing the Culture

Of course, the above scenario comes down to culture. And Thompson has an interesting thought on that operational element.

If an operator isn’t constantly developing their culture, it will grow stagnant. Maintaining the current culture isn’t good enough.

Failing to do so will ultimately lead to a decline in guest satisfaction. When that happens, a decline in traffic comes along with it.

It’s really rather simple: How an operator and the leadership team treats employees trickles down to guests. Unhappy and unsatisfied staff provide poor service. How long are guests going to tolerate negative guest experiences?

And no, simply offering competitive compensation doesn’t automatically equate to treating staff well.

“Competitive pay, to me, is the cost of entry,” says Thompson.

To this point, the COO, also the self-appointed chief smile officer, addresses how the restaurant chain respects personal time.

Chicken Salad Chick, founded in 2008, is closed on Sundays. This isn’t due to any religious influence. Rather, the founders, per Thompson, were influenced by what they perceived as a high divorce rate in the restaurant space.

So, the brand wants employees to have family time. That’s also why there stores are also closed by 8:00 PM. In some cases, they close at 5:00 or 7:00 PM. Again, personal and family time.

Could they generate more revenue if they opened earlier and closed later? Probably. However, their culture is crucial to their success.

Takeaway

If operators want to begin the process of truly developing a positive workplace culture, there are several questions Thompson suggests operators and their leaders should ask.

Is the brand purpose driven? Does focus on fun, family, and culture?

How can the business offer incremental value to staff? Are the pay and benefits competitive? Is the workplace safe and are their opportunities for staff to advance?

What’s the community like within the four walls? How’s the energy within those walls?

Are the processes and practices in place helping or hindering recruitment and retention? How can the processes be simplified so employees learn what they need to know quickly?

How flexible is the business, honestly? What’s being done to truly help leadership create better relationships with the team?

Finally, I’ll end on something interesting from Grimes. Analyzing employee engagement, SMG has found that isn’t just about compensation.

In fact, when it comes to what makes most people perceive their job as fulfilling, the top influencer is working with people they like. Second is salary and benefits. Third, rewarding work.

Operators need to adapt to employee expectations, just as they need to focus on those of guests. Sitting down with their leadership teams to discuss Thompson’s questions is a great first step toward developing a culture that works and rewards.

Image: Priscilla Du Preez on Unsplash

April 13, 2022by David Klemt David Klemt No Comments

Leadership Facepalm, Part Two

Leadership Facepalm, Part Two

by David Klemt

In a stunning example of tone-deafness and callousness, a franchisee executive sent an email that led to severe consequences.

And no, I’m not talking about the termination of the offending exec. That, in my opinion, was well deserved.

In this instance, the email has led to mass resignations and damage to a global restaurant chain’s reputation. What’s more, the negative impact to the brand’s reputation comes from consumers and employees.

Of course, I’m talking about the now-infamous Applebee’s “gas prices” email.

The Email: Labor

Let’s just jump right into the email, because…wow.

“Most of our employee base and potential employee base lives paycheck to paycheck,” writes the executive. “Any increase gas prices cuts into their disposable income.”

This could have been an excellent example of awareness and perhaps even empathy. In the context of this email, it’s appalling.

Why? Mainly because this executive appears to be celebrating the fact that Applebee’s employees, at least those who work for this franchisee, are barely earning a living wage.

“As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living,” continues the author.

In this exec’s view, this franchisee is “no longer competing with the government when it comes to hiring.” He cites stimulus payments and boosted unemployment support have run out. Therefore, he reasons that people will be forced to return to the workforce.

The author further points to competitors increasing wages to recruit and retain employees. This, he figures, is untenable and some will have to close their doors. So, the labor pool will fill up and this franchisee will benefit.

The Email: Wages

Some of what I’ve laid out above is accurate. According to some estimates, about two-thirds of Americans live paycheck to paycheck.

Additionally, it’s accurate to state that some employees will seek more hours to combat the effects of rising costs. Further, yes, the labor market is turbulent and challenging.

And, unfortunately, some independent operators are facing incredibly difficult decisions. To recruit and retain, they’ll need to be competitive and raise their wages. To pay for that, they’ll need to raise prices, passing on rising costs to customers. In some instances, for some operators, that will prove unsustainable.

However, an executive in this industry shouldn’t be delighted about any of this. And they certainly shouldn’t see it as an opportunity to potentially pay employees even less.

You see, the author of this email suggests that the franchisee can bring in new workers “at a lower wage to decrease our labor (when able).”

He then recommends monitoring employee morale to ensure that the Applebee’s operated by this franchisee is their “employer of choice.”

For me, however, the most eyeroll-inducing line is this: “Most importantly, have the culture and environment that will attract people.”

Images of printouts of the email reveal that at least a handful of recipients agreed. “Great message Sir! [sic]” reads one response. Another paints the email as “Words of wisdom.”

Clearly, the culture and environment are unhealthy.

The Consequences

Before I proceed, know this: I’m not going to name the author. It’s not remotely difficult to find the author’s name if you feel the need.

However, I will name the franchisee that finally fired him. American Franchise Capital reportedly owns more than 120 Applebee’s and Taco Bell locations in nine states.

So, to be clear, this executive didn’t work for Applebee’s directly. In fact, Applebee’s has disavowed the former executive and the email.

In the interest of clarity, it’s possible the author worked for Apple Central LLC, owned by American Franchise Capital.

As far as fallout, it was swift. According to reports, consequences were realized immediately. A Kansas franchise manager was shown the emails, printed them out for staff to discover, and comped the meals of everyone at the location. Then, he quit and the staff walked out.

Per reporting, four other Applebee’s managers quit, as did several employees. The location remained closed for at least the following day.

If reports are accurate, Applebee’s lost five managers, nearly a dozen employees, and sales from a location for at least two days. That’s just the localized fallout.

Applebee’s, of course, is distancing the company from the former executive. However, that’s not going to stanch the reputational bleeding and turnover.

As we know, a significant percentage of consumers want to know their dollars and support are going to companies that align with their values. The same is true of employees; they want to work for companies with values they can get behind.

A Final Thought

This now-infamous email was sent March 9. Just two weeks later, it was circulated and went viral. The author, gleeful about being able to hire employees “at a lower wage,” was fired before the end of March.

I’ve seen several takes on this situation, and I’ve read some accompanying leadership advice. One in particular caught my attention.

Unfortunately, it’s not because I thought it was great advice: Be cautious about what you send via blast emails.

I’m not saying one shouldn’t be careful about what they send out in emails—that’s good advice. However, that’s not the lesson I’ve learned from this situation.

Personally, I see this as a lesson in emotional intelligence, relationship intelligence, brand culture, and work environment.

At least two companies, one with annual sales in the billions of dollars, another in the hundreds of millions, have had their reputations tarnished. The fault may not lie with Applebee’s but they’ll be dealing with the consequences regardless.

If an operator is going to learn anything about being cautious, it’s this: Be cautious when hiring those in leadership positions. Be cautious about those with whom you enter into partnerships. And be careful about how you view those who work for you.

If you aren’t seeing those who choose to work for you as people worthy of your respect, as human beings, your brand’s culture is poisoned.

Image: Daria Nepriakhina on Unsplash

April 11, 2022by David Klemt David Klemt No Comments

Metallica Supports World Central Kitchen

Metallica Supports World Central Kitchen

by David Klemt

Metallica is supporting World Central Kitchen to #StandWithUkraine via donations made through their non-profit organization, All Within My Hands.

To start off AWMH’s annual Month of Giving, the band and their philanthropic organization awarded WCK a $100,000 grant. They then donated $500,000 to the humanitarian non-profit founded by Chef José Andrés and his wife Patricia.

However, Metallica and AWMH aren’t done there. The iconic metal band and their non-profit have committed to the goal of donating another $400,000 to WCK.

Additionally, Metallica and AWMH have unveiled the Month of Giving 2022 T-shirt.

View this post on Instagram

A post shared by Metallica (@metallica)

The shirt can be pre-ordered here (I placed my order last Monday). Proceeds will go to the WCK #ChefsForUkraine campaign. Artist Andrew Cremeans created the brand-new design and donated it to AWMH.

People interested in making a donation to AWMH that will benefit WCK but who don’t want the T-shirt can click here.

All Within My Hands

The All Within My Hands Foundation was founded in 2017. Metallica and the band’s management are the founding members.

James Hetfield, Lars Ulrich, Kirk Hammett, and Robert Trujillo are members of AWMH’s board of directors. In addition, the organization’s advisory board has eight members:

Chris Anthony (Salesforce)
Howard Ellin (Skadden, Arps)
Brenda Goodman (BGood Marketing)
Bill Moore (WRVI Capital)
Doug Palladini (Vans)
Gregg Perloff (Another Planet Entertainment)
Michael Rapino (Live Nation)
Paula Wagner (Chestnut Ridge Productions)

AWMH’s mission focuses on three crucial pillars:

Workforce education with partner American Association of Community Colleges. The Metallica Scholars Initiative is now supported by 23 schools across the US. To date, $4.1 in grants have been awarded.
Fighting hunger in collaboration with partner Feeding America. Food banks are a heavy focus of Metallica and AWMH, with proceeds from tour ticket sales going to the fight against hunger.
Critical local services with their partner Direct Relief, which is active in all 50 states of America and more than 80 other countries.

#ChefsForUkraine

World Central Kitchen mobilized incredibly quickly in response to Russia’s attack on Ukraine. Initially, WCK set up in Poland.

However, the the hunger-fighting organization has expanded operations to an additional six countries.

Further, WCK is now operating in over 30 cities located in Ukraine. As of this week, the non-profit is providing nearly 300,000 meals daily to those in need.

In staggering news, WCK has provided six million meals to the region in just over a month.

To donate to WCK directly, please click here.

Image: MasterClass

United States Capitol Building dome in greyscale

April 7, 2022by David Klemt David Klemt No Comments

House Votes to Replenish RRF

House Votes to Replenish RRF

by David Klemt

Eleven months after the closure of the Restaurant Revitalization Fund application portal, Congress has voted on RRF replenishment.

Earlier today, the House voted “yes” on $42 billion for the RRF via the Relief for Restaurants and Other Hard Hit Small Businesses Act of 2022 (HR 3807).

To clarify, the intent is that funds go to original applicants who were left out when the portal closed.

Neither the $1.7 trillion Build Back Better Act nor the $1.5 trillion omnibus spending bill passed in March included the RRF Replenishment Act.

So, this news is obviously fantastic. However, it’s also long overdue.

We’ve waited nearly 11 months for movement on relief for our ravaged industry. In comparison to the hospitality industry, the legislative process often moves at a glacial pace.

For obvious reasons, the long delay in replenishing the RRF has been devastating.

Nearly a month ago, I wrote and published “Congress is Abandoning Us.” Some considered the article harsh, others agreed with what I wrote.

To be clear, I stand by what I said after ten months of inaction. However, I’m relieved—cautiously—that the House proved their support for our industry today.

$55 Billion Lifeline

In its current form, the House bill would provide $42 billion. This is the amount believed to be enough to award grants to the original applicants from May of 2021.

Additionally, there’s another $13 billion for businesses in other hard-hit industries. So, the House bill provides a total of $55 billion in relief.

Per bill co-author Rep. Earl Blumenauer (D-OR), those who applied last year for the first (and only) round of RRF relief won’t have to re-apply.

Rep. Blumenauer reportedly told Nation’s Restaurant News that “[t]he independent restaurant is the foundation of a livable community.”

Continuing, Rep. Blumenauer told NRN, “We need to have these institutions to provide a foundation for our neighborhoods.”

As far as the source of the $55 billion, the money is supposed to come from funds recovered from 2020 and 2021 pandemic relief programs. This includes billions of dollars stolen through fraudulent relief program claims.

In an effort to combat further fraud and show the public that the funds are indeed going to the correct recipients, the SBA will be required to be transparent about its process.

As it stands, grant recipients will need to spend the funds on eligible uses by March 11, 2023.

Bittersweet

While this is huge news for our industry, it’s somewhat difficult to let go of my frustration fully. The RRF portal opened May 3, 2021. It closed just 21 days later, shutting out an estimated 177,000 grant applicants.

In June of last year, Sens. Kyrsten Sinema (D-AZ) and Roger Wicker (R-MS), and Reps. Earl Blumenauer (D-PA) and Brian Fitzpatrick (R-PA) introduced a bill to replenish the RRF.

That was followed in July by the ENTREE Act, introduced by Rep. Blaine Luetkemeyer (R-MO).

Then, in August, Sen. Rand Paul (R-KY) objected to a unanimous consent motion to fund the RRF. Essentially, after that occurred, it was crickets.

As stated above, when the Build Back Better Act was passed in November, relief for our industry was nowhere to be found.

Given all of this, and the fact that the bill must now go before senators for debate and a vote, I find myself still uneasy about the fate of the RRF.

We often say hope isn’t a strategy. However, I hope our senators do the right thing and pass the relief our industry so desperately needs and deserves.

Image: Joshua Sukoff on Unsplash

April 6, 2022by David Klemt David Klemt No Comments

XDar Vodka Resumes Ukraine Production

XDar Vodka Resumes Production in Ukraine

by David Klemt

Over the past several weeks, the people of Ukraine have shown the world their resilience, tenacity, and refusal to submit to Russia.

The sovereign European nation has endured attacks and atrocities that began on February 24 of this year. Nearly six weeks since the invasion, Ukraine has resisted and repelled the vaunted Russian military.

There’s no end in sight. The world is learning daily about the atrocities and possible war crimes being perpetrated in Ukraine.

Because of this, any good news coming from Ukraine is welcome.

“Gift of Grain”

Incredibly, Ukrainian distiller XDar Vodka is resuming production. The brand, whose name translates to “gift of grain,” is reopening their distillery.

Now, this is all no small feat: XDar Vodka’s distillery is in the Cherkassy region of Ukraine. So, when I say XDar Vodka is a Ukrainian product, I mean they distill their spirits in Ukraine.

This wheat vodka is made using the region’s artesian water. Impressively, the result is a clean vodka that scored 92 points in the 2016 Ultimate Spirits Challenge.

Further, XDar Vodka flies in the face of the “definition” of vodka. Supposedly, vodka is meant to be odorless, colorless, and flavorless. Not XDar.

Instead, tasting notes include wet sand, floral notes, vanilla, cotton candy, burnt sugar, and a touch of sweetness.

And yes, XDar does have distribution in North America via Liquorum Imports, Inc. In addition, XDar can be purchased through Royal Wine Merchants.

Those who want to try XDar Vodka as well as support this tenacious Ukrainian brand can also place orders through Drizly.

Bittersweet Anniversary

2022 marks XDar’s 20th anniversary. Obviously, this is bittersweet for the brand and its 4,400 employees.

To that point, XDar stopped production when Russia attacked Ukraine. However, the distillery continued to pay its workers.

“The people at XDar are committed to their employees,” says Natalya Kolosok of Liquorum Imports, Inc. “They are some of the strongest people in the world.”

Now, the brand is resuming production. According to the distillery, XDar is doing so safely. According to a statement from Kolosok, this is in part due to the desires of the distillery’s team.

“The employees, while grateful for the assistance, don’t just want a check, they want purpose,” says Kolosok. “They want to work, which is why, as safely as possible, XDar opened up their facility to resume production.”

That’s resilience. That’s tenacity. And those characteristics exemplify the people of Ukraine.

Images provided by KLG Public Relations