Author : Tommy Yionoulis

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Should I Start Taking My Employees Temperatures?

Since the WHO and CDC have declared that we are in the midst of a COVID-19 Pandemic, the EEOC has allowed the taking of employee temperatures.

I recently was a panelist on a webinar hosted by the World Health Congress & The Validation Institute and I was able to discuss the taking of employee temperatures with Dr. Ian Lipkin, head of Epidemiology at Columbia University.

Dr. Lipkin stated that a person with COVID-19 might be asymptomatic so the taking of employee temps shouldn’t be the only thing you do or rely on. On the other hand, you may identify a person who has a fever who might not be aware of it. Overall, it is a worthwhile exercise.

It is so worthwhile that Burger King, McDonalds, and many other fast food restaurants are rapidly procuring thermometers to start this process.

A couple of things to consider:

  1. You should know why are you doing this?
    1. Is this to protect you from a potential future liability?
    2. Is this to stop a potentially sick employee from working today?
    3. Or Both?
  2. Where are you storing this data?
    1. Not planning on recording the temp, just checking as the employee enters the restaurant.
    2. In a Platform like OpsAnalitica.
    3. Keeping this written down on paper.
    4. How long are you planning on storing the data?
    5. This data must be kept confidential.
  3. You are allowed to ask questions about COVID-19 only, and I suggest that you do.
    1. You should definitely ask if the person has taken fever reducers in the last 24 hours.
    2. You should also ask specifically if an employee has been in contact with someone who has been diagnosed with COVID-19.
    3. You should ask the employee if they have been diagnosed with COVID-19.
  4. Do you have a plan for what you are going to do if you identify a sick employee?
    1. You should document that you sent the employee home and what symptoms they were exhibiting.
    2. If a person is exhibiting symptoms today, they could have been contagious for up to a week. You should pull schedules for the last week.
    3. I would suggest that the person get a COVID-19 test and offer to pay for it if necessary.
  5. Where in your restaurant are you going to fill out this questionnaire and take their temperature?
    1. If the person has COVID-19 and they are on the line, what are the consequences of them being close to food?
    2. Doing this by the entrance door makes a lot of sense, it would be the easiest area to clean and sanitize?
  6. What kind of thermometer are you going to use?
    1. Make sure to disinfect it in between uses.
    2. Definitely use a forehead thermometer or ear. You don’t want to use an oral thermometer.
  7. Is the manager going to take the temperature or is the employee.
    1. Some thermometers are hard to take your own temperature.
    2. If a manager is going to be getting very close to an employee, they should wear a mask.
    3. Managers and employees should do their best to maintain social distancing protocols.
  8. What if an employee is coughing but doesn’t have a fever?
    1. Coughing and fever are the two main symptoms of COVID-19. I would recommend sending the employee home until their coughing stops.
  9. Do you have health insurance and Sick Leave?
    1. I believe you have to cover 14 days of sick pay for people who are diagnosed with COVID-19. You should confirm this in your state.
    2. Does your current sick leave policy create an incentive for employees to lie to you? If yes, you should correct that immediately.

We have created a health verification form to use for employees. It guides the manager through asking questions and taking temperatures. It is a part of our free COVID-19 resources.

If you are interested in learning more or taking advantage of these resources, please open a chat in the bottom right hand corner of the page.

To get some more information on the legal aspects of taking temperatures of employees you can check out these resources:

Free COVID-19 Tools From OpsAnalitica

Updated with new tools on 4/16/20

We have created Free Tools for restaurant operators to help them manage their restaurants and decrease risk during the COVID-19 crisis. As with all OpsAnalitica Processes, these are 100% customizable for your business.

To get these free tools, click on the chat bot in the bottom right hand corner of this page.

Quick Synopsis of all of the Tools:

  • COVID-19 Customer Temperature Screening: The State of California just released guidance on screening customers temperatures before allowing them to enter your restaurant. We have modified our Employee Temperature Pre-Screen process to address this new use case.
  • COVID-19 Employee Temperature Pre-Screen: The FDA Stated that they want restaurants to Pre-Screen employees for COVID-19 by taking temperatures and assessing the employees health before their shift. This process does both. Check out this Resource to learn more
  • Hourly Disinfectant Schedule: This checklist is meant to be customized to your locations and provides a great starting point for creating a routine restaurant disinfecting process. Focusing on Human Touch Points.
  • Risk Evaluations (Full Service & QSR): These risk assessments guide you through the different potential virus transmission risk points in your operations and provides you with a clear understanding of how to mitigate those risks. See the video below.
  • Sick Employee & Customer Incident Logs: These logs will allow you to document any sick customer or employee incidents in your locations. Documenting your COVID-19 procedures will protect your location and your brand, to learn more check out this blog: Document, Document, Document, everything you do around COVID-19
  • Take-out/Drive-Thru Scorecard: A lot of Field Team Managers are unable to visit their restaurants today because of COVID-19. This Scorecard will allow those team members to grade the restaurants on how they are doing from a take-out/drive-thru perspective without having to enter the restaurant.

We have created additional tools for restaurant companies that will allow them to effectively scale their above store leader’s patch sizes and have effective interactions with their restaurant remotely, to learn more check out this blog: Reduce Ops Expenses without Sacrificing Customer Satisfaction

One of the most important tools on this list is the Employee Health Verification Process. This process is bullet proof and it guides your manager through the taking of the temperature and the asking of a few key questions about the employees potential exposure to COVID-19.

Here is a quick video that shows the process in action:

https://youtu.be/0iuAyTN5wU8

If you have any questions about this content or if you would like to get access to our free COVID-19 tools. Please access the chat bot in the bottom right corner of the screen.

Check out our blog on New Front Of The House Sanitation Standards In A Social Distancing World

New Front Of The House Sanitation Standards In A Social Distancing World

On April 1, 2020, we hosted a webinar about the New FOH changes that are going to be required for restaurants in a COVID-19 world.

Below is the full presentation about the changes that are coming for restaurants. This presentation takes you through 3 main steps in mitigating risk and increasing consumer confidence.

  1. Conducting a Risk Assessment
  2. New FOH Sanitation Standards
  3. Sanitation Theater

https://youtu.be/aDLI5bGOeKs

If you have any questions about this content or if you would like to get access to our free COVID-19 tools. Please access the chat bot in the bottom right corner of the screen.

Check out our blog on Free COVID-19 Tools from OpsAnalitica

New FDA Guidance on Face Masks for Restaurant Employees

The FDA has updated their guidance on restaurant employees wearing face masks while working. I’m going to post the link and the direct text from the FDA’s site below to save you some time.

If you want to learn more about how to wear the masks and keep them clean, the 3rd bullet point below will take you to the CDC’s site that has more info.

This is the link to the FDA’s site, Food Safety and the Coronavirus Disease 2019 (COVID-19)

In the first response under the Questions and Answers for Industry Section – Social Distancing, Disinfecting & Other Precautions

Should Employers in retail food and food production settings wear face coverings to prevent exposure to COVID-19 Posted 4/42020

On April 3, the CDC released an updated recommendation regarding the use of cloth face coverings to help slow the spread of COVID-19.  CDC recommends the use of simple cloth face coverings as a voluntary public health measure in public settings where other social distancing measures are difficult to maintain (e.g., grocery stores and pharmacies). 

For workers on farms, and in food production, processing, and retail settings who do not typically wear masks as part of their jobs, consider the following if you choose to use a cloth face covering to slow the spread of COVID-19:

NOTE:  The cloth face coverings recommended by CDC are not surgical masks or N-95 respirators.  Those are critical supplies that must continue to be reserved for healthcare workers and other medical first responders, as recommended by current CDC guidance.

Creating a World Class Sanitation Program for your Business in the COVID-19 Era

Quick answers to common questions

I’m going to continue to update this section with new answers to questions as we get them. So check back often or submit a question that isn’t addressed in the comments and I will do my best to find you the answer.

  • What should I be sanitizing in my business?
    • Every business is different so it is impossible to create a definitive list of items, follow these guidelines and assess your individual space.
    • Everything that people touch, with a focus on things that your customers touch or things that multiple employees might touch.
    • Knobs (doors, faucet, cabinet, etc..)
    • Counters
    • Phones and keyboards
    • Chairs – seats, arm rests, and backs
    • Pens – if you need to have people physically sign things consider purchasing promotional pens and giving them away to customers.
    • If you’re the only person who uses your phone and keyboard then that isn’t as important as a phone that is shared by multiple employees.
  • How long can COVID-19 live on surfaces?
    • At least 72 hours right now. That guidance may change.
    • Realistically, that should never happen because you should be sanitizing things that people touch much more often than that.
  • How often should I be sanitizing these items?
    • It depends on customer traffic. If you are super busy and a lot of people are coming in and out of your business, every 30 minutes to an hour.
    • If you are slow and maybe one person a day comes in and out of your doors then maybe right after the person leaves.
  • How do I sanitize?
    • See below in the blog, there is a description of the differences between sanitation and disinfection. Short answer you need a chemical that kills germs.
  • What products should I use?
    • I’ve included two screen shots of the residential items in the appendix at the bottom of the blog.
    • Here is the EPA List: https://www.epa.gov/pesticide-registration/list-n-disinfectants-use-against-sars-cov-2
  • What kind of Sanitizers should I use on surfaces?
    • Non-porous: hard surfaces like counters and stainless steel.
    • Porous: fabrics and cloth
  • Should I require my customers to sanitize their hands when they enter my business?
    • I think you should, its for your safety as well as theirs.
    • I can tell you from my own personal experience that on a Disney Cruise you cannot enter a dining room of the buffet withOut washing or sanitizing your hands.
  • Should I require customers to wear masks and gloves?
    • That is up to you. I think that after these initial shortages go away having masks and gloves available upon request for customers and employees would be a good.
  • How important is social distancing in a business and how do I do it?
    • If you are within 6 feet of someone that has COVID-19 for 10 minutes you should isolate for 14 days to see if symptoms appear. This is according to the State of Washington Department of health. Social Distancing is very important.
    • Put lines on the floor around counters and desks.
    • Remove chairs or block chairs off to create space.
    • Implement schedule times for people to come into your business.
    • Ask people to wait in their cars or in public areas and get their phones numbers and call them to come in when it is safe to do so.
  • Can I use UV light to Sanitize rooms?
    • Yes, they make robots and lamps that do this.
    • Make sure you read the safety warnings as UVC, the frequency of light that can kill COVID-19, can be dangerous to skin and eyes.
  • What is Sanitation Theater?
    • Sanitation Theater is making a very public display of sanitizing or disinfecting an area. It is meant to reduce anxiety of people who are concerned about how safe an area is.
    • The purpose of Sanitation Theater is to make people feel safe and secure that they aren’t going to get sick from your environment.
    • It is as important as Sanitizing from a marketing perspective.

The New COVID-19 World

We are in the COVID-19 Era which is creating a new paradigm in how we interact with people and objects that we touch. The COVID-19 virus is highly contagious, either through direct contact with a COVID infected person or by touching something that has COVID-19 germs on it. What makes this even worse is that COVID-19 germs can live on hard shiny surfaces for up 72 hours.

Like many of you, I’m sure already know, but it bears repeating, a person who is infected with COVID-19 may not show any symptoms for at least 7 days with 97% of people showing some symptoms by 11 days. The infected person is contagious that entire period.

Meaning that there are people walking around right now shedding COVID-19 germs on objects, interacting with people, who do not know they are sick and are spreading the virus around.

That is a new reality and we as business owners need to recognize that our customers will need new public space bubbles and demand businesses engage in increased sanitation protocols to keep them safe during interactions.

Being exposed to COVID-19 can result in a bare minimum of having to self-isolate for 14 days and at maximum could result in life-threatening illness. Something else to consider, in the near future, a person who is sick with COVID-19, will have a contact trace done on them, this is what they do today in South Korea and across Asia.

Contact tracing is where you have to identify each person you came into direct contact with and businesses you visited over the last 7 to 10 days so that they can isolate, get tested, and go through contact tracing as well. Meaning that 1 person could cause 10’s to 100’s of people to have isolate and get tested.

This could be devastating to a business or a brand if you are the source point of an outbreak.

Right now the US isn’t engaging in contact tracing today because we are in full-blown outbreak mode right now and the resources and the systems don’t exist to do this. Once the curve is flattened and we go back out into society, contact tracing will be a big part of the procedures for containing COVID-19 moving forward. The watchwords are Isolate, Test, Contact Trace, Rinse & Repeat.

In the future, you can expect that groups of people who have been exposed to COVID-19 will be isolated for 14 days while the rest of us are able to interact in society vs. these huge shutdowns that we are in now.

This is a big deal but also an opportunity for business owners to differentiate themselves by really thinking through how to create an atmosphere that is safe and reassuring for customers.

Sanitation

I work in the restaurant industry so we are very familiar with sanitation, especially in kitchens. For a lot of you sanitation is going to be a new concept as you will have to be sanitizing your business throughout the day as customers come and go.

I’m taking these guidelines from the CDC for cleaning schools.

Know the difference between cleaning, disinfecting, and sanitizing

Cleaning removes germs, dirt, and impurities from surfaces or objects. Cleaning works by using soap (or detergent) and water to physically remove germs from surfaces. This process does not necessarily kill germs, but by removing them, it lowers their numbers and the risk of spreading infection.

Disinfecting kills germs on surfaces or objects. Disinfecting works by using chemicals to kill germs on surfaces or objects. This process does not necessarily clean dirty surfaces or remove germs, but by killing germs on a surface after cleaning, it can further lower the risk of spreading infection.

Sanitizing lowers the number of germs on surfaces or objects to a safe level, as judged by public health standards or requirements. This process works by either cleaning or disinfecting surfaces or objects to lower the risk of spreading infection.

How do I know what to Sanitize and Disinfect?

We are going to introduce the concept of Human TouchPoints. Human TouchPoints are exactly what they sound like they are the things that humans touch in your business. These touchpoints could contain COVID-19 germs and be a point where they are spread to other customers and employees.

Our goal, in the new COVID-19 world, is to reduce Human TouchPoints and Unnecessary Human Interactions wherever possible. Contactless is the new standard that customers will be judging businesses on.

What we recommend doing is a risk assessment of your business to identify where you are going to need to focus.

Here is how you can do that.

  1. Enter your business from outside.
  2. Pretend you have COVID-19 germs all over your hands.
  3. Re-enact a typical customer interaction in your business.
  4. Write down all of the different things that as a customer you touch or interact with throughout your visit.
  5. Everything you touch or come into contact with needs to be written down as they will need to be sanitized upon you concluding your interaction.
  6. As you are conducting this exercise, pretend to sneeze or cough and try to determine what impact that could have on your customers, employees, and property.
  7. Also, pay attention to social distancing during these interactions, are their times when the customer and the employee are too close to each other and could put each other at risk of spreading COVID-19.
  8. When looking at human interactions, ask yourself, is this completely necessary? Is there a way I could remove this interaction or automate it using an app or technology to make the process more contactless.
  9. Don’t forget about your employees. Are they in a safe distance from each other and what things do they touch throughout a shift that might pass COVID-19 germs to other employees? Registers, phones, keyboards, water coolers, doorknobs, etc..

Once, you have completed this initial audit you will be in a position to start optimizing your operations. You are going to first focus on reducing as many Human TouchPoints as possible. Some things will be easy, for instance, maybe you can move to contactless or app payment, then you can get rid of credit card machines and pens. Some things, like railings and doorknobs, are required and therefore you will have to be sanitizing those items on a schedule.

The businesses that do a good job of moving their operations to a contactless or more contactless state are going to impress their customers and make them feel safe and secure doing business. Take this opportunity to really streamline your steps of service and interactions and rethink how you do business.

There are two kinds of Sanitation you are going to be engaging in:

  1. Immediately After Use
  2. Schedules Sanitization

Immediately After Use means that interaction is complete and the employee will immediately sanitize the area to kill any germs. This would be chairs, pens, tables, phones, etc. that a customer used or touched during their interaction.

Scheduled Sanitation is the process of sanitizing and disinfecting items around your property on a schedule based on how busy you are. If you don’t get that many customers during a day, you may just sanitize every 4 hours. If you are very busy, you may be sanitizing every 30 minutes. Generally, scheduled sanitation is going to be focused on those human touchpoints that must exist. Knobs, counters, railings, buttons, screens, keyboards, phones. Pretty much anywhere people touch on a regular basis.

It will be impossible to have every human touch point completely disinfected 100% of the time and that is ok. You just need to have a mitigation strategy in place. Your mitigation strategy needs to be in place to mitigate the effects of germs being passed to people. I believe that we will see sanitizer and Clorox wipes everywhere in the near future as they are going to make people feel better that they can double check or wipe down surfaces they are going to be coming into contact with. It might also be a good idea to have masks and gloves available for customers and employees upon request. Obviously at the time that I’m writing this blog, those items are in high demand and should be reserved for medical personnel but the belief is that in the very near future we will have an excess and it would be fine to maintain a stock of those items at your business.

Offering a customer a Clorox wipe or sanitizer or pro-actively wiping down a chair or counter will go along way with customers who are very concerned about COVID-19 germs.

Other Things to Consider while Sanitizing

  1. Always use approved Sanitizer and disinfecting solutions.
  2. Always follow the instructions on those solutions.
  3. Allow surfaces to air dry, wiping surfaces dry with a cloth can lead to cross-contamination or a reinfecting of an area.
  4. Have chemicals present for different types of materials, like cloth and concrete.
  5. You are never going to be able to ensure a 100% germ-free environment and that is totally ok. That is why we include the mitigation strategy items to make up for that.
  6. This sanitation process has to be rooted in the reality of your business and it shouldn’t interfere with your operations.

Sanitation Theater

I want to introduce the concept of Sanitation Theater, it is making a big deal of the sanitation activities and the reduction of human interactions that you are doing to ensure that your customers are and feel safe and secure doing business with you.

I would argue that sanitation theater is almost as important as actually sanitizing. We are all feeling a lot of stress and anxiety right now about being in public, touching things, being too close to other people. Until there is a vaccine and our medical system can effectively treat COVID-19 these feelings are going to be a reality.

It isn’t going to be enough to have an effective sanitation program. You are going to have to be able to communicate that program and the lengths you are going to protect your employees and customers to them. You are going to have to show them what you are doing and why.

Your customers are going to need to feel comfortable and safe doing business with you. Don’t be afraid or shy in communicating what you are doing because it is going to be a differentiator and could help you drive sales.

Sanitation Software

I would highly recommend that you invest in a platform or program to help you manage and document your new sanitation procedures. Especially if you have multiple locations and you are not able to be in each location every day.

The benefits of using a software platform to manage your sanitation program:

  1. You are going to be adding a lot of new sanitizing tasks to your daily routines.
  2. You need a program that guides your employees through those processes to ensure that everything is completed on time and on schedule.
  3. Data is coming in rapidly from around the world, having a centrally managed solution that is easy to update and implement will be imperative in keeping your sanitation procedures up to date across all of your locations.
  4. You will want to review that each of your locations and employees are executing these procedures because it is going to be imperative to your brand that you are operating safe locations.
  5. You are going to want to document your sanitizing procedures and also that you are executing them, just to be on the safe side moving forward. I fear that after this initial outbreak that litigious people are going to start being litigious. To protect your business it makes sense to document your actions to show your due diligence.

We at OpsAnalitica have been working with the restaurant industry for years, helping multi-unit restaurant operators manage their daily operations and food safety compliance. Many restaurant companies use us today to manage their restaurant sanitation processes. We have 1000’s of locations and operate in 18 countries.

There is no difference between sanitizing a restaurant, hospital, business, school, etc.. If you are interested in learning more about how we can help you implement our Sanitation Software Platform to help you protect your employees, customer, and brand, please click here.

Appendix

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Area/District Managers Should Stop Visiting Restaurants During the COVID-19 Crisis

I’m writing this in early April of 2020 and I’m setting the stage of the current environment so readers of this blog in the future will understand the situation here in the US at this time. 2/3 + of the US is on mandatory social distancing, stay at home isolation through 4/30/20, restaurants are only allowed to sell take-out and delivery, and we are two to four weeks away from the dreaded peak of cases.

If you are a restaurant without a delivery or takeout business channel you are probably closed and you are worried about ever being able to re-open. The National Restaurant Association is predicting that 30,000 units have already closed permanently. This is the new reality and this isolation only went into effect 2 1/2 weeks ago.

Currently, I have clients that are still open and operating because of their robust delivery and take out models and their Area Managers are still visiting their restaurants in their local patches.

AREA/DISTRICT MANAGERS NEED TO STOP VISITING THEIR RESTAURANTS IMMEDIATELY!

An area manager that is infected with COVID-19 and who didn’t show symptoms for the average time period of 7 to 10 days could visit 5 to 10 restaurants, or more. Exposing those employees to the COVID-19 germs.

The following guidelines come directly from the state of Washington’s Dept of Health, most states are following similar guidelines here, I chose this one because it was very easy to understand:

Look at the 3rd bullet point: being within 6 feet of an infected person for about 10 minutes. That is all that it takes. The bottom paragraph states what you are supposed to do.

“You should monitor your health for fever, cough, and shortness of breath during the 14 days after the last day you were in close contact with the sick person with COVID-19. YOU SHOULD NOT GO TO WORK OR SCHOOL AND SHOULD AVOID PUBLIC PLACES FOR 14-DAYS.

The reason for this isolation is that you can be sick and contagious with COVID-19 for 7 to 10 days without having any symptoms. You could be infecting people for a week before you get your first fever or sniffle.

Because Area Managers are visiting restaurants, any customers that come into contact with employees who get sick have to do the same.

I’m not trying to be overly dramatic but having your Area Managers visiting their restaurants is exposing your brand, your employees, and your customers to an incredible risk.

The whole point of this blog is to avoid this:

A worse case scenario is that an Area Manager spreads the COVID-19 virus to multiple restaurants, resulting in their shutdown for a period of 14 days and the requirement of a major deep cleaning.

The part that is going to damage the brand immensely is going to be the public acknowledgement that customers who visited those restaurants are going to need to isolate, get tested, etc..

This could ruin confidence in your brand and will hurt the restaurant industry as whole as people will rethink eating from any restaurants during this time.

Some unlucky chain or restaurant is going to be the first. It is inevitable, and it is going to happen in the next couple of weeks or month. There are simply too many people that are infected right now that don’t have a clue that they are sick.

Do everything you can to not let it be you, I fear that very few brands could come back from that.

We recognize the need for Area Managers, they are a very important part of the multi-unit management infrastructure of our restaurants. We need to get them the tools they need so they can be affective from managing from home. We cannot risk them getting sick or exposing the units to unnecessary risk during this period.

We are hosting a webinar on how to make area managers more effective from home. You can click this link to sign-up: https://calendly.com/oa-sales/webinar-enabling-field-team-wfh

FYI: after the webinar is over, we’ll post a video in the blog of the webinar content.

OrderUp: Recap of Restaurant Operators being Duped by Silicon Valley’s Big Money

In this episode of the OrderUp Show Tommy recaps his blog on the big money that has been funneled into 3rd party delivery companies that has been used to convince restaurant operators that delivery will solve all their problems.

Well the data suggests otherwise. Take a listen below.

https://soundcloud.com/orderupshow/30-silicon-valley-big-money-is-trying-to-trick-restaurant-operators-recap

OrderUp: Murk Maddock Interview

In this episode of the OrderUp Show Tommy sits down with Murk Maddock, an ops services guru,. They discuss Murk’s career and his thoughts on the state of the restaurant industry today. He’s a very interesting person take a listen below.

https://soundcloud.com/orderupshow/29-interview-with-murk-maddock-ops-services-guru

How to fix Subway

In this two part series of the OrderUp Show Tommy walks us through the rise and fall of the largest sandwich chain in the world.

He also gives his thoughts on what he would do to save the chain. He’s got experience in this area as he was involved with a very similar situation in the late 2000’s with another iconic sandwich chain out of Denver.

Give it a listen at your leisure. It has been broken in to two separate podcast episodes below.

Part 1:

https://soundcloud.com/orderupshow/27-how-i-would-fix-subway-part-1

Part 2:

https://soundcloud.com/orderupshow/28-how-i-would-fix-subway-part-2

Silicon Valley Big Money Is Trying to Trick Restaurant Operators

As I have been watching the industry over the last couple of years, I’ve concluded that the big Private Equity and Venture Capital firms from Silicon Valley are trying to hoodwink the restaurant industry.

What are the five big initiatives that most large restaurant companies have been focused on in the past couple of years:

  1. New POS Systems (Toast, Par, Oracle)
  2. Delivery (Uber Eats, Door Dash, Grubhub, Postmates)
  3. Carry Out
  4. Mobile Ordering
  5. LMS Systems (Learning Management Systems)

Have you ever asked yourself why you have been thinking about or focusing on these initiatives? It’s because these companies have raised millions/billions of dollars across their industries and they have been marketing/selling to you in every way possible.

Here at OpsAnalitica we have never raised money, we are bootstrapped and proud of it,  but we know a lot of people that have. For those of you who might not be as familiar with Venture Capital or Private Equity money, here is a crash course.

  • You trade equity/shares in your company for cash.
  • Investors are looking for Unicorns, Google was a unicorn, they give tons of money to companies to get them to grow as quickly as possible.
  • When a company raises 100 million dollars, they don’t always get all 100 million on day 1. They might get 33 million on day 1 and then they have promises to get the other 66 million over the next 12 to 18 months if they make their numbers.
  • If a company deploys the money and grows by some agreed upon metrics, they get more money. If they miss their numbers, then the investors can pull their future investments and the company runs out of cash very quickly.
  • These investors want you to spend as much money as you can as quickly as possible to try and generate as much growth/market share as possible.
  • This isn’t about responsibly spending money, they don’t want you to stretch this money out for 10 years, they want it completely spent in 18 months. Fast is the name of the game.
  • The belief is that you can grow market share and customer base quickly then you can figure out profitability when you are big enough.
  • When these guys get money, they hire the best of the best as quickly as possible. They focus on Marketing, and Sales People.
  • If you ever watched HBO’s Silicon Valley you see what it was like for those guys. Also, it is a hilarious show.

Over the last five years or so, the products I mentioned above, POS’s, Delivery, LMS’s, Carry Out, Mobile Apps have all been vying for a dominant share of the restaurant market. These companies have been getting acquired or raising massive amounts of capital to grow and to establish themselves as the number 1 players in their spaces.

Here is an article from 2018, The Spoon Blog, $3.5 billion invested in Food Delivery Start-ups This Year.

3.5 Billion, lets be conservative and say that 2 Billion of those dollars were deployed in selling restaurants and customers that food delivery was a must have.

Let’s talk POS Systems, look at this article from Venture Beat Toast POS raised $500 million dollars with a 2.7 Billion dollar valuation. This articles takes you through a series of other POS company capital raises that easily exceed over a billion dollars.

If you have been going to the NRA show over the last couple of years, you cannot spit without hitting a POS company.

LMS systems, aren’t as sexy as POS systems and Delivery but they have been raising money as well. Look at this article from Elearningside.com. These guys in this article have raised between 500 million and 1 billion dollars.

My point is this, that these companies have been getting billions of dollars in free money that they have been using to tell restaurant companies that they need their products to be successful.

The ROI numbers for the restaurants aren’t jiving with the marketing.

Remember, when you take 100’s of millions of dollars in investments, you can make yourself look huge, credible, and successful overnight. You can have a software platform, marketing & sales teams, conferences, ad’s on every type of media, public relations articles and interviews for your executives on TV, billboards across every city and airport, literally in a couple of weeks.

Raising money not generating revenue becomes the story, because people wouldn’t invest in your company if you weren’t growing and making real money, right? WeWork and Uber!

Because this type of investing is relatively new we sometimes forget that these companies are paper tigers, they haven’t generated their operating captial from actually being successful, organically fueling their growth through happy satisfied customers that got an ROI from their investment in their services. They are getting handed billions of dollars in cash and told to spend it.

Everyone is buying into it, every time we talk with an enterprise client they seem to have another project going around one of the aforementioned systems or platforms. Are those platforms generating an ROI?

Let’s look at the reality in the market today. As of  the end of January 2020, 3 restaurant companies filed bankruptcy in the last 10 days: Bar Louie, Village Inn & Baker Square, and Krystals. All of these companies had delivery and POS systems. I would hazard to guess that they had LMS systems as well. You could call in and order food or do it online and pick it up.

These companies all bought into the hype of the marketing and sales but it wasn’t enough to save them. Why? Because it doesn’t matter if you have a great POS system and Delivery if no one wants to eat your food. 

Restaurant customers care about the basics of the restaurant experience: clean restaurants, safe and delicious food, served by nice people, they care about sticky floors and tables, clean bathrooms, they care about wait times and food that doesn’t have them sitting on the can 30-minutes after they eat it.

The restaurant industry is in one of the toughest most competitive markets it has ever faced. I’ve learned from my own experience working at corporate for a large restaurant chain that when times get financially tough the first thing that goes is a focus on the basics of running great restaurants and delivery exceptional experiences.

The restaurant companies stop executing on the basics at the store and corporate level. Once you aren’t executing on the basics, then nothing else matters and nothing you do to increase revenue will work. As things get worse the leadership team starts looking for Hail Marry’s, delivery was that for a lot of chains.

Here is the reality, if nobody wants to come and eat in your restaurants because your operators aren’t delivering the Basics of good restaurant management and service, they sure as hell aren’t going to pay extra to have that horrible experience delivered to their homes. A fancy POS, better training, better mobile ordering experience, none of those are going to work either.

In this RestaurantBusinessOnline.com about Bar Louie’s bankruptcy they sited “The inconsistent brand experience coupled with increased competition and the general decline in customer traffic visiting traditional shopping locations and malls, resulted in less traffic.”

Inconsistent brand experience is code for bad operations and gross food. Delivery and mobile ordering is supposed to fix these issues of declining mall traffic because it shouldn’t matter where you are located right?

The point is that in the last five years as the labor and restaurant market has gone haywire that a lot of restaurant chains started to put all of their hopes into these highly marketed solutions to get their businesses back to profitability and lost sight of the basics of running great restaurants. That loss of focus is putting them into a hole.

One last dig at delivery as the savior of all things: in 2018 Subway inked deals with all 4 major delivery platforms, throwing 9,000 plus restaurants on delivery. It was the largest system to go on delivery at that time. Subway’s decline is staggering and reminds me of my days at Quiznos. Delivery isn’t working for them because nobody wants to go to their restaurants and they have more of them anyone else.

Here are some restaurant statistics that kind of drive home the importance of focusing on the basics of restaurant management first:

This is from the Steritech Diners Dish 2018 Customer Survey, let’s first look at basic restaurant cleanliness: 

Let’s look at the impact that a foodborne illness outbreak could have:

Here are some quick delivery statistics:

Now lets look at some statistics around employee turnover from Seven Shifts. The fact is that training is important but that we have to move away from our traditional method of memorization based training to a more business process oriented approach.

The fact is that employees arent staying long enough to warrent teaching them to memorize things. This is where checklists and daily processes with a training back-up can improve employee efficiency. To learn more about how Opsanalitica can help you improve employee efficiency and business process, click here

I know I through a lot at you in this blog. What I want you to take away from this blog post is the following:

  1. That the delivery, pos, and LMS companies have litterally spent billions of dollars marketing and selling to you that their solutions are going to change you world.
  2. None of those solutions will help your business if you don’t have a restaurant that is already popular and focused on the basics of great restaurant management and customer experiences.
  3. If your restaurants are hurting financially, double down on great experiences and the basics and get those inlign first before you add new sales channels. 

I’m going to leave you with one last thought around what is happening in the industry. My business partner got this in his daily email about restaurant technology.  

Red Lobster is going to grow through delivery, I don’t even want to guess what that is going to taste like. Grubhub says it can’t make 3rd party delivery work.

Grubhub was supported by millions of dollars of other people’s capital.

Please, please, please return to focusing on the basics of great restaurant management, systematize your operations, put all of your emphasis on wowing your customers, and your business will grow fast and sustainably.

Then when you are just crushing it, all these technologies will take you to the next level.

We at OpsAnalitica can help you rock the basics of running your restaurants and improve your business processes.