SCOTTSDALE ARIZ. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
The coping strategies recommended during the three-day conference here were as varied as the speakers themselves, but they tended to gravitate toward contradictory extremes: fundamentally changing to fit the times, or focusing more intently on the evergreen issues of operations, cost controls, service and personnel. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Many of the restaurant operators appearing on the stage fell into the latter camp. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“I wish I had that silver bullet,” said Mark Snyder, vice president of franchising for T.G.I. Friday’s and a recipient during the RLC of Nation’s Restaurant News’ 2008 Leadership in Franchise Management award. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Instead, Snyder said, the venerable casual-dining chain is looking at such tactics as imparting greater value—“not discounting, but value.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
The chain is also stressing service, he suggested. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“It’s more important now than ever that every guest is valued,” he said. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Dunkin’ Donuts franchisee Danny M. Costa, the recipient of NRN’s Franchisee Entrepreneur of the Year award, said his 11-unit Costa Donuts Two Inc. was “retooling” the responsibilities and compensation of shift managers to transform into more than just a “glorified crew member.” The company also was strengthening its infrastructure by increasing health benefits and payroll, according to the second-generation Dunkin’ operator. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“Now it’s up to us to find efficiencies that don’t affect the customer,” he said. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
The wisdom of astutely cutting costs was championed several times during the meeting. Sharon Lacaze, whose co-leadership of Which Wich franchisee Campus Wich LLC earned her NRN’s 2008 Franchisee Star award, said her eight-unit company strives to keep construction costs low by looking for shuttered businesses that could easily be converted into sandwich shops. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
During a later panel presentation by restaurateurs and financing specialists, several noted that rising construction expenses were becoming as much of a financial wallop as soaring fuel and food costs. Cutting even $100,000 in expenses at that stage of a restaurant’s life cycle can greatly affect its pro forma, said Paul Rubin of Olympus Partners, a private-equity firm that owns large franchisees of Chili’s and Taco Bell. Rubin said Olympus’ holdings are looking at every way of cutting a location’s costs, right down to how many garbage pickups are scheduled each week. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“Operations are critical this year,” said Todd S. Jones, managing director of structured finance services for GE Capital Solutions, Franchise Finance. He noted that the financial-services concern’s restaurant customers have been embracing new technology to eliminate crew positions while entering into purchasing cooperatives as a way of tempering food costs. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
The squeeze on margins from soaring food and labor costs was a constant focus during the conference. But restaurateurs were advised to keep those problems in perspective. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“If you think you have employment problems, consider our situation,” said Drayton McLane, chief executive officer of the Houston Astros. He explained that the baseball team employs 25 youngsters who don a uniform for just a few hours a day. Yet they collect an average of $3.7 million in pay for the eight-month season, he noted with amazement. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
GE’s Jones also urged the audience—a mix of restaurant chain franchisees, executives, financiers and suppliers—to look beyond the problems of the moment. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“Be patient,” he said. “This is a cycle. No one knows how long this will last.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“As you head into tough times, don’t get mired in where you are, focus on where you’re going to be,” advised Doug Parker, chairman and chief executive of U.S. Airways Group, one of the standout performers in the much-battered airline business. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
He noted that his industry shares a number of present similarities with the restaurant business. Margins are being crunched by rising fuel costs, and competition is intensifying as spending softens. “Our industry is struggling,” he said, warning of further consolidation and more cost pressures. “We’ve gone through a lot of change, but we’re still not fixed.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Yet even with those rough skies, he said, “you gotta take risks.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“It’s so easy to listen to the pundits and the skeptics and play it safe,” he said. “I’d submit that’s why they’re pundits and skeptics.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Sure, the situation is sobering, said Michael Mack, chief executive of Soup Plantation and Sweet Tomatoes parent Garden Fresh Restaurants. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“I also happen to see this as an environment of opportunity,” he said. “We’re looking for opportunities to increase market share.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
One of the conference’s motivational speakers reeled off examples of businesses and individuals who had turned seemingly hopeless situations into stellar successes by disregarding longstanding fears and preconceptions. Each example illustrated the presenter’s thesis that extraordinary times mandate extraordinary change. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“The kind of change I’m talking about goes beyond coping,” said Alan Deutschman, author of the book “Change or Die.” “The kind of change I’m talking about is earth-shattering, ground-shaking change.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Foodservice leaders may have no choice but to contend with that sort of upheaval, he warned. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“The restaurant industry realizes that it’s on the brink of a lot of scary change,” Deutschman said. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
An appeal for seismic change in the way restaurants manage their staffs was sounded by Joni Thomas Doolin, chief executive of People Report, a human resources research company that specializes in the foodservice industry. She noted that demographics are working against the industry, with the so-called millennial generation posing at least some relief from the trade’s current dearth of job candidates. Yet those youngsters have different attitudes about where they want to work, if they work at all. For instance, she said, “79 percent want to work for a company that makes a difference. Fifty-six percent refuse to work for an irresponsible company.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
Traditional considerations like wages or hours are less important. Restaurant companies have to re-engineer accordingly, with attention paid to such millennial enticements as the opportunity for continuous education or the feeling of being part of a team, Doolin suggested. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
“We’re not talking about blowing up your enterprise,” she said. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
But companies have to rethink the conventional command-and-control structure, where directives flow down a hierarchical structure. Collaboration is the new watchword. —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
She termed the near term “a tsunami of change.” —Wincing from conditions in their own industry, restaurateurs attending the Restaurant Leadership Conference learned the grass isn’t always greener on the other side, be it professional baseball or the airline business. Speakers from other sectors of the economy cited the familiar one-two punch of consumers spending less while operating expenses skyrocket. Yet each lament—along with the predictions of worse times ahead—was accompanied by assurances that astute leaders could weather the downturn, if not capitalize on it.
