Beyond supporting efforts to educate and lobby state and federal lawmakers and regulators, restaurateurs and their associations must engage elected officials and employees at the local level, a trio of industry experts said Tuesday.
That advice came from speakers on the Emerging Industry Issues: What’s Next educational panel at MUFSO.
The panelists were Don Fox, chief executive of Firehouse Subs parent Firehouse of America LLC; Robert S. “Bob” McAdam, senior vice president of government and community affairs for Darden Restaurants Inc., parent of the Olive Garden, Red Lobster and LongHorn Steakhouse chains, among others; and Joe Taylor, vice president of corporate affairs for Brinker International Inc., operator and franchisor of the Chili’s Grill & Bar and Maggiano’s Little Italy chains.
McAdam noted that workforce regulation “is an area that poses a very big threat to us all” in foodservice because, “the labor line in our P&L statements is a huge part of what costs us money and [key to] how our business models work.” From paid sick leave to so-called “living wages” to minimum-wage hikes to healthcare-benefits matters to tip credits, this area of business “is going to come under greater scrutiny and attack,” he predicted.
Given recent voter polling data, McAdam said, the chance that after the November elections “Washington will completely change and be a workable governing body that will solve our problems is pretty dim.”
“From my point of view, at best we may have a different Administration but the chances are that we’re going to have the same type of House of Representatives and, maybe, a marginally different Senate,” McAdam said. “But nobody is going to have 60 votes in the Senate to control things, so you can very easily see a more polarized and less functional government in Washington, which means that the people who want to do things in workforce regulation will leave D.C. for the hinterlands and start to do it in state capitals and in local jurisdictions.”
Supporting his own position, the Darden executive explained, “We’ve had no fewer than a half dozen communities around the country during the past six months try to pass minimum wage increase or paid sick leave legislation.”
The panelists agreed that it can be difficult to talk to people outside the industry and some non-management employees about concerns with workforce regulations without sounding “greedy” or “insensitive” to the workers on which all restaurant companies rely to take care of customers and represent the brand. They also agreed that educating elected officials and employees about restaurant business models was an important prelude to such conversations.
Firehouse Subs’ Fox said company officials, when touring markets in which the 600-plus-unit chain operates, have conducted a “game-show” exercise in which they asked restaurant crew members to guess how much of each sales dollar is allocated to business expenses. The facts were a revelation to some employees, such as those who believed that restaurants generate profits of 50 cents on the dollar, he said.
To get headquarters employees engaged in the political process, Fox said, his company has hosted appearances by candidates for office. At the restaurant level, he said, managers are talking with employees about how proposed laws or regulations will impact operations, as workers then seem to quickly grasp the ramifications for their own roles and situations.
Fox gently chided restaurant companies that contribute little or nothing to the National Restaurant Association political action committee by pointing out that the NRA PAC this year will raise what amounts to about $1 for each restaurant in the industry. “It should be 10, 20 or 30 times that, at least,” he added.
To keep operators in the audience from getting the idea that the panelists were encouraging them to get out the vote or engage with politicians in a strictly partisan fashion, Brinker International’s Taylor reminded the crowd, “We need [elected] friends on both sides of the aisle.”
Taylor said research and other indicators suggest that elected and regulatory officials may be more sympathetic to arguments against workforce regulations when they understand that a protesting industry is more labor intensive and has lower profits per employee than others. That opens the door in the future to possibly successfully lobbying for foodservice exemptions from workforce rules that incur significant costs, he indicated.
Among the panelists’ observations and recommendations:
• Independent restaurateurs and chain restaurant managers should get to know elected officials who dine in their establishments and help them understand the industry’s role as the private sector’s second-largest employer and its challenges.
• Foodservice operators should better communicate with elected officials about their involvement in raising funds for non-profit groups, such as youth athletics and veterans groups, work training initiatives and other community support endeavors.
• Operators that belong to state restaurant associations that do not have chapters or field offices to help monitor and respond to city or county lawmaking and regulatory activities should encourage their associations to develop such capabilities.