THE
THE MAGAZINE OF FRANCHISE BUSINESS SERVICES
WE’RE
OPEN Though the nation continues its emergence from the economic crisis caused by the coronavirus pandemic, business owners and managers – particularly those in the restaurant industry – are finding that recovery is bringing with it a whole new set of challenges in 2021
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PROUD TO BE YOUR WINGMAN SINCE 2012
McLane Foodservice offers its sincere gratitude to the BUFFALO WILD WINGS franchisees for their years of partnership and success in growing together.
© 2021 McLane Company, Inc. All rights reserved.
TABLE OF CONTENTS
2021 Issue 2
FBS Board of Directors Wray Hutchinson Chairman Mark Jones Vice Chairman Jenny Beaudoin Director
ON THE COVER
As the nation and economy recover from the pandemic, there’s a whole new set of challenges for Buffalo Wild Wings franchisees to navigate with labor and thirdparty food delivery.
COLUMNS 2
From the Chairman
James Bitzonis Director
DEPARTMENTS
Brian Carmody Director
4
FBS Member News
10 Look, Listen, Read
6
Event Calendar
11 One Topic: 10 Facts
6
Recognitions
12 Franchisee Spotlight
Steve Grube Director Roz Mallet Director Bobby Pancake Director Larry Podlogar Director Christy Williams Executive Director
FBS Editorial Board Sean Ireland Editor-in-Chief seani@myfbsonline.org Rachel Jackson Managing Editor rachelj@myfbsonline.org Savannah Daly Associate Editor savannahd@myfbsonline.org
Advertising Sales Jeff Reynolds Director of Business Partner Relations jeffr@myfbsonline.org 678-797-5163
Design and Layout Kristen Thomas KT Graphic Design ktgraphicdesign@gmail.com
FEATURES 8 9 14 18 21 22 24 26 28 29 30
Buffalo Wild Wings Foundation: Boys & Girls Clubs of America Rise to the Challenge Spotlight on the 117th Congress: Rep. Troy Nehls (R-TX-22) The Road Ahead: Franchisees Navigate Bumpy Path on Post-Pandemic Journey by Sean Ireland, FBS director of communications Restaurants Doing Their Best to Make Delivery Work by Sean Ireland Pandemic Challenges Affecting Health Insurance for Franchisees by Christy Williams, FBS executive director First BWW Franchisee Blazed Trail for Others by Sean Ireland Employee Off-Duty Conduct: Are There No Consequences? by Douglas H. Duerr, Elarbee Thompson Sapp and Wilson LLP Comparing LLCs to S-Corporations by Stacy Smith, Mize CPAs Inc. Feed Your Mind by Dan Coughlin, The Coughlin Co. Four Customer Service Lessons From Just One Store Visit by Dennis Snow, Snow & Associates Inc. Three Steps to Greatness: Using Your Habits to Influence Your Goals by Laura Stack, The Productivity Pro®
DIRECTORIES 7
Associate Member Listing
32 Advertisers Guide and Editorial Calendar
Headquarters 1701 Barrett Lakes Blvd. NW Suite 180 Kennesaw, GA 30144 Phone: 678-797-5161 Fax: 678-797-5171
In keeping with our commitment to the environment, this publication is printed on certified, environmentally-friendly recycled paper using eco-friendly inks. Franchise Business Services publishes The SCORE. Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of Franchise Business Services. All Rights Reserved.
Copyright© 2021
Printed in the U.S.A.
www.myfbsonline.org
From the Chairman
W
hat a difference a year makes! It is a wonderful feeling to be writing to you as our nation continues to emerge from the global coronavirus pandemic. Our economy is reopening to a more normal state as many of the dining rooms in our Buffalo Wild Wings® sports bars do the same.
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As more people are vaccinated and COVID-19 infection rates continue to fall, it’s good to see sales on the rise and people happy to be back watching sports and enjoying our food and atmosphere once more. Though there is more work to be done, the trends continue to improve. A year ago, we were facing the depths of the pandemic crisis. Most of our dining rooms were closed, and we were scrambling to adjust operations to focus on our takeout and delivery sales platforms. Keeping team members working and our locations open was a daily challenge that required ingenuity, dedication and a lot of hard work, and it came with much anxiety and sacrifice. Of course, one of the losses we
suffered in 2020 was the postponement of the annual FBS Summit, which had been planned for early May. Our yearly meeting is something we all anticipate with a lot of excitement. It offers great information and best practices to take back to our businesses as well as time to meet with our vendor partners and each other in a relaxed atmosphere away from the day-to-day pressures we all face. The return of the Summit is another reason it’s so good to have the last year in our rearview mirror and be looking ahead. The Summit is planned for Aug. 4-6 at the Bellagio in Las Vegas, Nevada. The keynote speaker is a perfect choice after our recent experiences. Scott Burrows is a former college football player and kickboxer who was forced to remake his life and his identity after he was paralyzed from the chest down in a car accident. His book and presentation, “Vision Mindset Grit!” promise to give us a needed motivational perspective on taking on the challenges of life.
We’ll also have a brand update from Lyle Tick, president of Buffalo Wild Wings, as well as informational presentations on minimum wage best practices, pay equity, brand valuation and lenders, and unionization. We’ll finish with a town hall meeting featuring the FBS board of directors. Of course, there will also be trade show time with the wonderful vendor partners who have supported our organization during this time and, of course, the traditional Casino Night and Texas Hold ’Em tournaments so we can let our hair down, relax and enjoy each other’s company. While it’s good to be anticipating the Summit and happier times to come, we also know that pandemic recovery has been presenting us with a whole new set of challenges. We are all being affected by a labor shortage that is quickly becoming our biggest hurdle to complete economic recovery. While customers are coming back to our restaurants, if we don’t have the teams to serve them, we risk being unable to fully return to normal as the year moves ahead. This issue of The SCORE examines the challenges we’re facing now as we move into the post-pandemic world. From the labor question and its effect on restaurant recovery to embracing delivery services in ways that work for our businesses and customers, there’s still plenty ahead we have to navigate. We’ll move forward as we always have – together. It’s good to begin this transition to a new journey together, starting with the Summit. Be sure to make your plans to join us. You can register here: www.cvent.com/d/9hqd4s/4W
Wray Hutchinson
MEMBER NEWS
Frequent Guests at Indianapolis Buffalo Wild Wings Turn Reward Points Into Meals for the Homeless
Bob and Laura Dugan donated food purchased with over 200,000 Blazin’ Rewards points to a local homeless shelter, Wheeler Mission, in Indianapolis.
B
ob and Laura Dugan have been regular guests at Buffalo Wild Wings® in Indianapolis, Indiana, for the past few years. The couple loves to relax, watch sports and eat wings several times a week. Over two years, the couple collected more than 200,000 Blazin’ Rewards points, which can be used on food and merchandise, and came up with the idea to donate the points during 2020. “It was right when the pandemic hit, and the shutdown started and doors closed, and we said, ‘We’ve got to do something,’” Bob said. “‘We’ve got to make people happy and do something good for the community.’” So, the Dugans did just that – they worked with franchisee World Wide Wings and a local homeless shelter, Wheeler Mission, to get meals to those who needed them the most. As soon as it was safe for the shelter to distribute group meals again,
the lunch plans were set. Wheeler Mission is a nondenominational, Christian, social services organization that provides critically needed goods and services to the homeless in Indiana. The Dugans used their collection of rewards points to buy lunches for residents, who roared with applause when they heard the menu for that day. “To be honest with you, I was kind of shocked,” one resident told a local news reporter. “Being that we’re in a homeless shelter, people look down on us because we’re homeless. As long as we get people from outside showing that they care about us, it tells us something different.” The couple was happy to make the donation and encourages others to follow suit. “We encourage people to give back whenever,” said Laura Dugan. “Even if it’s just purchasing a gift card or buying the person behind you lunch.” S
LaHaise Management LLC Gives Back to Local First Responders With Gift Card Donation
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aHaise Management LLC, owned by Todd and Susan LaHaise, operates 12 BWW® restaurants across South Dakota, North Dakota and Minnesota. When the duo opened their first restaurant back in 2000, they knew being involved in community initiatives would be a priority. Over the years, LaHaise Management has shown support in various ways to its communities across the Midwest, but the company’s most recent efforts benefitted first responders and high school graduates. The group ran a first responder gift card program during May 2020, when for every $25 gift card purchased, Buffalo Wild Wings® gave guests an extra $5 gift card. In addition, the restaurant also donated an additional $5 toward buying meals for local first responders. In total, the company has donated $40,000 in meals across its 12 sports bars as a thank you to first responders for their efforts. The LaHaises also donated over $100,000 in BWW gift cards to graduating high school seniors whose ceremonies were cancelled or postponed in 2020. “This franchise was built on a community-involved foundation. Todd and Susan have continually given back to every
Franchisee Todd LaHaise operates 12 sports bars across the Midwest with his wife, Susan.
community for over 20 years,” Director of Operations Jeremy Lembke told Inspire Stories. “Through good times and bad, we will always be dedicated and support those that ultimately support us.” S
MEMBER NEWS
Four M Franchising Turns Win into Donation for Boys & Girls Clubs
James Bitzonis of Four M Franchising presented officials and members of the Boys & Girls Club of Milford, Connecticut, with a donation of $3,500. Accepting for the Milford club were Charlie Kittleman and Megan Altomare.
learn all about the club,” Bitzonis said. “The clubs we chose were well deserving and based on longtime relationships between them and us at the local level,” Bitzonis said. “They were extremely grateful and appreciative and seeing the work they do made us very proud to help in any way we can. We are looking to repeat next year!” S
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SCORE | 2021 Issue 2
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our M Franchising LLC recently made donations to Boys & Girls Clubs of America chapters in two communities where the company operates Buffalo Wild Wings® sports bars. The company was able to make the donations after its victory in the Team Up for Kids tournament last fall. The tournament is the annual fundraising event for the Buffalo Wild Wings Foundation, and Four M Franchising was one of three bracket winners. “All corporate and most franchise stores participate in the annual October fundraiser,” Four M Franchising President James Bitzonis said. “This year, to make things interesting, the brand pitted franchise groups against each other in a weekly, tournament-style, knockout competition. To beat our opponent and advance, we would have to achieve higher donations, as a percentage of sales, than our opponent. The final week, we achieved over 1.45% of sales to win.” Team Up for Kids is a brand initiative that began in 2013. Collectively, BWW locations have raised over $20 million since. As a system, $1,235,000 was raised in support of youth sports in 2020, exceeding the $1 million goal. Over 230,000 individual donations were made. Bitzonis said winning the tournament was important to the Four M Franchising team. “I must confess that we wanted to win and incentivized our team to do so by offering a pizza party to our store with the highest percentage of donations and a $50 gift card to the top fundraiser per store, as well as a $25 gift card to the second-highest fundraiser per store,” he said. For its win, the company received $7,000 to award to local Boys & Girls Clubs. The team chose to donate $3,500 each to the Boys & Girls Clubs of Milford and Stamford, Connecticut. Bitzonis noted the facilities at the Stamford club, which serves more than 600 children per day and has two gyms, a weight room, a theater, a technology lab, a math and science lab, a library, a rec room, outdoor fields and a kitchen for training for Servsafe certification tests. “It was a treat to tour the facility and
Restaura
F
Four M Franchising and Bitzonis also donated $3,500 to the Stamford club and Andrea Figueroa, Steve Basquiat and Rowena Track.
MEMBER NEWS
High 5 Hospitality Celebrates Accomplishments With Virtual Awards Ceremony
High 5 Hospitality gave out many awards to its restaurant teams for their hard work last year.
S
ocial-distancing guidelines did not stop High 5 Hospitality (H5H) from rewarding its employees’ hard work after a challenging year. Normally the H5H team hosts in-person celebrations for its restaurant staff, but the process was a bit
EVENT CALENDAR FBS Summit Aug. 4-6 Las Vegas, Nevada
different this year. “Each year at our High 5 Hospitality Awards Party, we take a moment’s pause to celebrate our teams, our guests and our vendors and the success of the previous year,” the company posted on its LinkedIn page. “Usually, we host a party and invite folks. This year, for the safety of all involved, we held it virtually.” The company gives out many awards and recognitions to high performers, including its “Most Valuable Team Member” awards for each of its eight BWW® restaurants on the East Coast.
H5H even awards its regular patrons with a “Most Valuable Guest” award, which thanks guests for their consistent visits. The B-Dubs® in Bear, Delaware, took home the Restaurant of the Year Award along with several other individual team member awards. Following the virtual ceremony, the various winners were given plaques for their achievements and had photos taken over the course of several weeks. High 5 Hospitality is grateful for its hardworking team members and knows it is important to reward them for their tenacity, especially after 2020. S
Lexy Darden, bartender at the B-Dubs® in Dover, Delaware, is the first High 5 Hospitality team member to achieve five-STAR performance status, consistently demonstrating each one of the company’s core values. “It has been a pleasure to see Lexy grow into the star she is today,” said her general manager, Jimmy Gallagher. “She has a way of brightening up the bar with her smile. Her dedication to our team and our guests is truly amazing.”
Ryan Carl, assistant manager, celebrated his 10-year anniversary at the Buffalo Wild Wings® in Christiana, Delaware.
RECOGNITIONS Congratulations to the following High 5 Hospitality employees …
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Lori Ewald was recently promoted to director of human resources for the company. She has been with High 5 Hospitality (H5H) since 2017 and has held various positions, including marketing manager and brand awareness manager. “Lori is an incredible human being and a huge asset to H5H. Her consistent demeanor and her vision for our culture will change the way our organization looks from the inside out,” said franchisee Bobby Pancake. “We are thrilled to see what the future holds. She is doing exactly what she encourages others around her and her adult children to do: Live their best lives.”
Mandy Lloyd
celebrated 10 years of service as a bartender and server with High 5 Hospitality. S
We want to highlight your company’s achievements (employee promotions, new hires, employee or restaurant anniversaries, and sales records). To submit information for Recognitions, complete the online submission form at www.myfbsonline.org/submissions, email communications@myfbsonline.org or call 678-797-5161.
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Boys & Girls Clubs of America Rise to the Challenge
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he BWW Foundation interviewed Jim Clark, president and CEO of Boys & Girls Clubs of America, to learn how clubs are adapting to easing COVID-19 restrictions and how this impacts youth sports this fall. Q: 2020 was a year like none other. What were some of the challenges for Boys & Girls Clubs? A: The past 15 months have uncovered
deep gaps in equitable and equal opportunities that exist for kids and teens. Lack of access to technology, positive mentors and guidance, food accessibility and other critical factors are impacting kids in ways that could cause long-term setbacks and trauma for millions of young people. We’ve also witnessed terrible tragedies related to racial inequities that leave an indelible mark on our youth. But we know that positive mentorships and environments can build resiliency in young people, giving them the ability to better handle stress and rebound from challenges. Clubs are also community catalysts, where kids and teens of all races and backgrounds are encouraged to have difficult conversations and use their voices to create positive change.
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Q: How did the organization step up to meet these challenges? A: More than 4,000 Boys & Girls Clubs have offered additional
services to local communities, including serving meals to families, providing child care to essential workers and launching virtual programming, and we’ve even had some clubs partner with local hospital systems to become temporary vaccination sites. As we begin to recover, many clubs will continue new programmatic elements like the virtual club experience and inclusive and culturally relevant programs and resources that help nurture and elevate youth voices, and so much more.
Q: With restrictions easing and COVID-19 numbers going down, what changes can we expect to see at Boys & Girls Clubs around the country? A: As clubs and communities begin to return to a more traditional
way of operating, our kids’ safety remains our top priority. Boys & Girls Clubs will continue to follow the guidance of the Centers for Disease Control and Prevention (CDC) and local health departments. But as clubs can do more, we are excited to continue to infuse our impact programming with fun, positive experiences and influential opportunities. Kids need the space and the opportunity to be kids and to learn the essential skills that are necessary for them to succeed. ALL STARS is a great example of programming that is fun but also provides intentional skill-building.
Q: How are Boys & Girls Clubs sports programs adapting while keeping kids safe? A: ALL STARS is encouraging league play and sports to start the season outside, continuing to follow the guidance of the CDC and local health departments. For sports and games that need to be played inside, we are encouraging small-group games, clinics and skill-development sessions that allow for social distancing and other safety measures.
Q: How does being active and playing sports benefit youth development? A: Sports is about much more than winning or losing. Organized sports teach kids essential skills many employers say they’re not finding in entry-level job applicants: skills like communication, empathy, perseverance, problem-solving, discipline and teamwork. Thanks to Buffalo Wild Wings® and the ALL STARS program, Boys & Girls Clubs offer league sports for kids ages 6 to 18 in flag football, basketball, volleyball and soccer. ALL STARS aims to increase opportunities for physical activity, social interaction and recognition through high-quality sports programming that teaches athletic fundamentals, team-building and leadership. S
Spotlight on the 117th Congress:
Rep. Troy Nehls (R-TX-22) Q
much the federal government’s decisions impact businesses. I saw how the increase in federal unemployment benefits has had an adverse effect on small business.
As a first-term member of Congress, what are you learning about the ways that government affects businesses?
A
Regulation on businesses directly impacts their ability to grow and operate. Government’s intrusion into the free market can often harm businesses. A great example of government intrusion harming business is the federal government’s overstimulation of the economy in response to COVID-19. The overstimulation has led to rising inflation and decreased labor participation, both of which are straining businesses.
Q
Your first job was at a BURGER KING® restaurant. What qualities and perspectives did you develop that you use as a representative?
A
Going through the markup process of President Biden’s $1.9 trillion American Rescue Plan showed me just how
My team and I have been diligent in aiding small businesses with understanding and accessing the Paycheck Protection Program and other COVID-19 relief programs to help them stay afloat and rebuild. In Congress, I work hard to voice their frustrations with having to compete against the federal government for employees. My own brother, who owns a small business in Wisconsin, told me business picked back up, and he wants to bring on new workers but the same guys he’d pay $17 per hour pre-COVID-19 are saying they want $25 per hour because, they ask, “Why work if you don’t have to?”
Q A
In what ways are you seeking feedback from small businesses in Texas and using that information in Washington, D.C.?
I make trips around my district visiting with business owners and hearing their concerns. They’re telling me that they’re trying to rebuild in the aftermath of COVID-19, and the last thing they want or need is the federal government making that rebuilding more difficult through more regulation and higher taxes. I keep that in mind every time we vote. S
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How has your role on the House Committee on Transportation and Infrastructure influenced your opinions on the impact of legislation on small businesses?
What challenges have you helped small businesses in your district overcome?
THE
It showed me the value of working hard for your money. This is the perspective I maintain when evaluating a spending bill. The federal government is spending taxpayer money like it is nothing, the national debt continues to skyrocket and inflation is putting a strain on the little guy. These facts are not lost on the millions upon millions of Americans who work hard for their money.
Q A
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Small-business owners know better than anyone how hard it can be to find and maintain high levels of productivity. In “Getting Things Done: The Art of Stress-Free Productivity,” David Allen shares the secret to increasing productivity: being able to relax. And he outlines a system that will help you achieve it.
LOOK LISTEN READ 5
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ook, Listen, Read is a quarterly compilation of some of the most highly rated and reviewed apps, podcasts, books, websites and other resources. FBS does not support or endorse the use of these tools, which merely serve as a guide to exploring a new level of knowledge and productivity for your business.
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Connecteam is the employee app that connects everything a business needs from field to office, all in one place. In the click of a button, you can connect your staff, manage day-to-day operations, improve employee experience and engagement, and drive your business forward. Connecteam offers the full package.
2
In “Delivering Happiness: A Path to Profits, Passion and Purpose,” Zappos CEO Tony Hsieh shares the different lessons he has learned in business and life, from starting a worm farm to running a pizza business, through LinkExchange, Zappos and more. It’s an interesting, relevant and inspiring book for all entrepreneurs.
3
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On “Breaking Down Your Business,” hosts Brad Farris and Jill Salzman take a chatty, friendly approach to business that acknowledges the problems on small-business owners’ minds, such as “How do I make more money without driving myself nuts?” Farris and Salzman know you’re busy, so each episode is short (about 20 minutes) and easy to digest, focusing on a list of five things (such as “Five Things to Look for in a Networking Group”). Most podcasts also feature useful tools for smallbusiness owners.
SAP SuccessFactors makes it simple to engage your entire workforce and complete HR tasks. A main feature of SAP is to boost productivity – connect all your employees so they receive key information and processes no matter where they are. It includes self-service tools for managers, employees and HR. This way everyone stays on top of critical tasks.
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Morning Brew is a daily email that comes with an overview of business news made for millennials. The podcast “Business Casual” is the new podcast from Morning Brew brought to listeners by host Kinsey Grant. The episodes focus on a range of topics in the news like breaking up big tech and interviewing CEOs and other executives on hot business topics.
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If humans were always logical, the conventional accounting formula would be perfect. The formula says when you take away expenses from sales, you get profit. But somehow, it’s not that simple. Mike Michalowicz considers that humans won’t always make logical decisions. So, he approached accounting from a behavioral angle. He flipped the formula to say, “You get expenses when you take away profit from sales.” It’s quite shrewd – every bit of waste or unnecessary spending eats into profit instead of expenses. Suddenly, every cent matters, and every cent hurts. His formula shows that you’ll succeed better when you think in terms of taking profit first, and then using what you have left. “Profit First” is a practical book with many case studies, advice and a unique sense of humor.
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Melio is a web-based accounts-payable platform that lets you conveniently pay bills via bank transfer and debit card for free, even for vendors who only accept check payments. S
One topic: 10 facts
Restaurant Industry Labor Challenges
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In the first quarter of 2021, restaurants added 442,000 jobs.
2
Through March, employment at eating and drinking establishments remained 18.8 million jobs below pre-pandemic levels.
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3less
8 Seventy-six percent
In March, the median limited-service chain restaurant staffed each of its restaurants with about one employee per location on average than it did in 2019.
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Through April, restaurant employment in 49 states remained below the February 2020 pre-coronavirus level.
9
The top three reasons restaurant workers are leaving their jobs are low wages and tips (76%), COVID-19 safety concerns (55%) and concerns over hospitality and harassment from customers (39%).
10 Fifty-seven percent
of restaurant operators believe a boost in federal unemployment benefits is exacerbating the labor shortage. Sources: Alignable, Black Box Intelligence, Joblist, Restaurant Dive, U.S. Bureau of Labor Statistics
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In March, the average workweek of eating and drinking place employees increased to 25.9 hours per week, the highest monthly reading since the data series began in 2006.
of job seekers say that benefits were “important” or “very important” to them when considering a new position. Fifty-five percent said they would accept a lower-paying job if it came with better benefits.
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Sixty-six percent of restaurant owners report that they cannot fill their open positions.
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Average hourly earnings rose for production and nonsupervisory positions at eating and drinking establishments from $13.89 per hour to $14.57.
FRANCHISEE SPOTLIGHT
Steve Grube Grube Inc. Year Became a BWW® Franchisee: 2001 Total Number of BWW Locations: 33 Total Number of Employees: 1,400 Grube Inc. is a family business, with Steve Grube and his sons, Mathias and Mitchell, all playing active roles in the business.
How did you and your partner(s) meet? I began my Buffalo Wild
Wings® career with Kornel Miksa, who currently has part ownership of two of the 33 stores today. Kornel has been a great resource and is one of the system’s best operators.
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What drew you to the brand? I attended Ohio State University, and there were only two stores nationwide at that time. Sometimes I ate there twice a day. I loved the concept, and wings were only 7 cents on Tuesdays. How could you not love that? What is your favorite thing about the brand? BWW is the place to be!
It’s really all about the wings, beer and sports, which makes BWWs the best sports bars in the nation.
What other concepts do you own?
purchase and grow? Our company
What are your current top three business goals?
What is the best business advice you have received? My wife, Kelly,
A Rusty Taco location in Maumee, Ohio, opened in May 2018.
1. Become a $150 million company. 2. Help develop emerging talent as a giveback. (Family inclusive.) 3. Develop another concept.
Describe your best recent business decision: Acquiring 11 additional
stores in northeast Ohio. Seven were acquired in late September 2020 and four additional locations were added in March.
Last year, your company bought several BWW sports bars. Why was it a good time to make that
vision was to bet on America and believe in the strength of our brand.
encouraged me to leave an executive banking position to pursue my dream. At the time, I owned three BWW locations. Additionally, I would like to thank fellow franchisees Wray Hutchinson, Brian Carmody and Mark Jones for their leadership and friendship, as they have always been willing to offer advice when called upon.
Describe the biggest industry change since you started: 1. COVID-19 2. Increased competition 3. Wing supply and pricing
Describe your current biggest challenge as a franchisee: Product
shortages and the labor shortage. The wing shortage has been a monumental challenge, yet we have managed it quite well. The labor shortage, which has affected nearly every facet of business, was and still is our No. 1 challenge.
What is your favorite BWW wing sauce? How can you pick just one? OG, Mild and Caribbean Jerk.
If I weren’t a franchisee, I would be … a coach of major college basketball!
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Steve Grube, left, with Ohio State University men’s basketball coach Chris Holtmann inside a Buffalo Wild Wings restaurant.
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American India Pale Ale | Drink Responsibly | Bellsbeer.com
The Road Ahead: Franchisees Navigate Bumpy Path on Post-Pandemic Journey
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by Sean Ireland
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hough the nation continues its emergence from the economic crisis caused by the coronavirus pandemic, business owners and managers – particularly those in the restaurant industry – are finding that recovery is bringing with it a whole new set of challenges in 2021. A labor shortage has taken center stage, quickly pushing past the lingering effects of the pandemic and vaccination policies as the biggest hurdles for franchise owners to face, even as sales climb back to or above pre-pandemic levels. Of course, not all recoveries are alike. Many locations are experiencing a boom in receipts in states and cities where pandemic restrictions have been eased or removed, with sales far above anything seen over the last year. However, in places where capacity restrictions remain, sales have been slower to rebound. Virtually everywhere, however, there is overwhelming concern over how to keep businesses staffed. A shortage of workers in the spring led some businesses to report that they were cutting hours of operation. Some restaurants were closing sections some nights for the same reason. The situation led employers to try new and creative measures to hire new team members, with varying results.
“The number of dine-in guests has increased. We are also seeing the return of larger groups, like sports teams and birthday parties.” – Kevin Greene,
Four M Franchising LLC training manager
Continued on page 16
Regaining guest confidence together. Advancing cleaner, safer practices TM
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Learn more at www.ecolab.com/sciencecertified ESC_AD1.indd 1
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First, the good news: In places of the country where pandemic restrictions have been eased and locations are back open to dine-in service, sales are up. Whether spurred by stimulus money or by people eager to get their lives back to normal after spending months avoiding public places and crowds, operators of Buffalo Wild Wings® sports bars are seeing sales recover and even eclipse pre-pandemic levels. “My region was up 31% over 2019 in period four,” said JK&T Wings Inc. District Manager Jon Breunig, who works in Missouri. “I have locations in areas that have been restriction free for several months.” JK&T Wings owns 89 BWW® sports bars in seven states. In Michigan, a state still heavily affected by capacity restrictions at restaurants, a sales recovery has been slower to take hold, but there are still positive signs. “We are seeing an uptick in sales in several markets, but it’s still too early to tell,” said Joel Dover, another JK&T Wings district manager. “Michigan has not removed any of its restrictions. I do feel people are feeling better about venturing out of the house now that they have been
vaccinated.” “Concerns with social distancing and public gathering seem to be minimizing,” agreed Kevin Greene, a training manager with Four M Franchising LLC, a group with 11 BWW sports bars in Connecticut and New York. “The number of dine-in guests has increased. We are also seeing the return of larger groups, like sports teams and birthday parties.” “We have seen a massive uptick in sales since about August of last year,” said Joshua Theiss, franchisee with BWW Southern Management Inc. “We’re in Florida, so we’ve had to deal far less with lockdowns and restrictions than most states, but our sales are outpacing our ability to adequately staff the restaurants to handle the sales.” Therein appears to be the biggest challenge that franchisees and their managers face now. Finding enough new job candidates to fill out teams was difficult even before the pandemic. For many reasons, it has become even harder now. “We are in a very tough time with staffing,” Breunig said. “Applicant flow has all but ceased to exist. We can go weeks with zero applicants. Staffing levels are down 50% or more in some cases.” “We can’t get any applicants. All the restaurants in our markets are hiring,” Theiss added. “Nobody can get enough people. There are different theories as to why, but no matter the reason, it so far is the big challenge of 2021.” Blame for the tenuous labor situation has been placed on
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Road Ahead
Continued from page 15
additional federal government unemployment relief approved in March, which is thought to be keeping some workers on the sidelines collecting benefits rather than seeking work. While that’s a factor, there may be more to it. Child care issues and lingering concerns about COVID-19 are also playing a role in the availability of workers. A recent survey by employment platform Joblist suggests other forces are at work too. According to the survey, 30% of restaurant workers are switching out of the industry, with interest in restaurant jobs falling 40% since last June. In a story for QSRweb in May, Joblist CEO Kevin Harrington said the survey found that some workers are seeking higher wages in other industries. “On a wide scale, the pandemic created an opportunity for workers – especially in restaurant, bar and other customer-facing roles – to find new jobs outside of the industry,” he said. “Even as those businesses and job opportunities have come back, many of the workers have already moved on. They have switched industries altogether, already found jobs with new companies, or transitioned to remote or freelance work.”
“We still interview and train to ensure we’re getting the best people, but pickings are slim, unfortunately. At this point, we really just need more bodies.” – Joshua Theiss,
BWW Southern Management Inc. franchisee
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Whatever the reason, BWW sports bars are working harder than ever to build teams to meet the increased restaurant traffic they’ve seen so far and expect to grow throughout the year. “We’re utilizing Snagajob and TalentReef, which have yielded slightly positive results. We’re also offering a $200 recruitment bonus to existing employees who bring somebody in to work,” Theiss said. “We pay the bonus after the person works 60 days.” JK&T Wings restaurants instituted hiring incentives and employee referral bonuses. Managers conduct on-the-spot job interviews when potential employees walk in to keep them from going other places. They focus more on finding candidates with the potential to do well in the hospitality industry and less on previous job experience. At Four M Franchising, Greene said referral programs have been the most successful avenue for finding employees, and the company has also made online and social media pushes for job candidates. “Enthusiastic, fun and hard-working individuals are what we look for in new hires,” Greene said. “This has not changed during the pandemic. They just seem to be more difficult to find.”
Theiss agreed. “We still interview and train to ensure we’re getting the best people, but pickings are slim, unfortunately. At this point, we really just need more bodies.” That makes keeping the people already working in the restaurants an important part of labor strategies. Team member retention is always a less expensive proposition than hiring workers, even in the best of times. “To keep people, we’re flexible with schedules, making sure everybody gets their requested days off,” Theiss said. “We’re not working people more than five days unless they want to. On days when we’re significantly understaffed, we’re closing sections of the dining room to not overwhelm our servers and cooks. And we’re keeping our managers on five-day workweeks to not burn them out, either.” Breunig makes a personal touch part of his retention strategy. “Our teams are working their tails off. As operators, we need to show our appreciation more than ever,” he said. “I set a personal goal to point out at least one positive thing per day with everyone I interact with. We have always had a praise culture. It’s more important now than ever.” The labor challenge comes at a most inopportune time, with operators ramping up for growth while making changes to meet the new trends in consumer habits and sanitation expectations that have taken hold. JK&T Wings’ Dover fears that even when capacity restrictions are lifted in Michigan, the company’s Buffalo Wild Wings sports bars will still have constraints. “I feel very confident we will see restrictions lifted, but with the staffing needs, we will have to remain at limited hours with in-house dining restrictions,” he said. Compounding the problem are the additional cleaning and safety procedures that restaurants instituted because of the pandemic and the growth that occurred in takeout and delivery service channels as a percentage of overall sales. Takeout and delivery are expected to remain significant pieces of the business even as dine-in service returns. “We’re focusing more resources on takeout and delivery,” JK&T Wings’ Breunig said. “We have remodeled locations to expand our waiting and order-staging areas to accommodate volume.” Though these businesses spent the pandemic year hoping and preparing for the rebound that they’re experiencing, they’ve got to solve the labor crisis. The obstacles may be significantly different, but 2021 is turning into just as much of a challenge as 2020 was for the franchisee community. It may require just as much resolve and determination to make it through. “We’re anticipating a great summer tourist season and strong 2021 football season,” Theiss said. “Again, staffing is of great concern. There don’t seem to be enough people able or willing to work, and we’re concerned with being able to provide the best experience to each guest because of the staffing crisis. “We’re struggling for staff, like many, but we’re not relaxing our standards,” he added. “Our sales are strong, and if we could just find some more great team members, we’d be in a good position moving forward.” S
SEAN IRELAND is the FBS director of communications. You may reach Ireland at 678-797-5165 or seani@myfbsonline.org.
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content to any screen, anywhere in the restaurant, meaning your
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wall support, as well as multi-channel audio to seamlessly send your
Restaurants Doing Their Best to Make Delivery Work
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by Sean Ireland
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he popularity of takeout and delivery grew incredibly fast across the restaurant industry during the coronavirus pandemic. The shutdown of dining rooms at brands like Buffalo Wild Wings® in the spring of 2020 meant that those services were the only business being done at the restaurants. Since early this year, as vaccinations took hold and the public health threat from the pandemic receded, restrictions on capacity for dine-in service at restaurants have been rolling back in virtually every part of the nation. However, while dine-in service is ramping up, off-premise sales seem to be retaining a strong share of hospitality’s dining mix. Across all restaurant industry segments, according to a report from the National Restaurant Association cited by QSR Magazine in February, off-premise sales make a larger proportion of the sales mix now than before the pandemic for more than 60% of operators. For the fast-casual and casual dining segments, the numbers are 70% and 74% respectively.
“
We have seen a huge increase in our takeout and delivery sales and have managed to shift our business into a more friendly off-premise model.”
Buffalo Wild Wings locations. Meeting the demand for off-premise dining required restaurants to change their focus quickly in 2020. It was difficult, but the transition was direct – a complete shift away from on-premise to off-premise service models. In 2021, the challenge has been to add dine-in back to the mix without hurting the growth in the platforms that carried the day at the height of the pandemic shutdowns. “We have seen a huge increase in our takeout and delivery sales and have managed to shift our business into a more friendly off-premise model,” Torsiello said. For Antsul Group, that has included working with third-party delivery platforms such as DoorDash, Uber Eats and Grubhub, partnerships that have the potential to boost restaurant exposure to new customers but that have also been fraught with challenges. The troubles restaurants have had with the major third-party delivery services are well chronicled, with operators often unhappy with delivery fees and poor performance getting food to customers. The difficulties led the National Restaurant Association to work with members and the third-party services to establish a set of guidelines to try to improve relations. The guidelines, established late last year, include seven principles, including: • Restaurants have a right to know and determine when and if their food is delivered. • Customers should expect the same degree of food safety from delivery as they do when dining in a restaurant. Continued on page 20
– Jackie Torsiello,
Antsul Group LLC director of training and marketing
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Forty-four percent of operators in both the fast-casual and casual dining segments added delivery services since the beginning of the COVID-19 outbreak. A third of those segments added third-party delivery, and it looks like those services are going to be needed permanently: 53% of adults say purchasing takeout or delivery food is essential to the way they live, according to QSR Magazine reporting, and the percentages are higher among members of younger generations – Generations X and Z and Millennials – who use third-party services far more than their older counterparts. Overall, a December National Restaurant Association survey found that 70% of adults had ordered delivery from a restaurant and 40% used a third-party delivery service to do it. Those numbers agree with what some BWW® managers are seeing at ground level. “Our delivery and takeout orders have remained consistently at a high percentage rate [of overall sales], in between 42% and 46% the last few months,” said O’Neil Washington, a general manager for Four M Franchising LLC’s Valley Stream, New York, location. Four M Franchising operates 11 BWW restaurants total. “Our delivery/takeout [percentage of sales] has been the same, which is a wonderful thing to see as we continue to open more dining inside,” added Jackie Torsiello, director of training and marketing for Antsul Group LLC. Antsul Group has seven
Delivery
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• Restaurants should be able to offer alcohol to customers through third-party delivery in a safe and legal manner. • Restaurants deserve transparency on fees (including commissions, delivery fees and promotional fees) charged by third-party companies. • Third-party food delivery contracts need contractual transparency, and issues surrounding fees, costs, terms, policies and marketing practices involving the restaurant or its likeness, and insurance/indemnity should be clear. • Sales tax collection responsibility must be clear in terms of which party is collecting and remitting the specific sales tax to the appropriate authority. • As a best practice, third-party delivery companies should offer restaurants access to anonymized information regarding orders from the restaurant that originate on third-party platforms. Whether those principles are improving third-party delivery service remains to be seen. But the Buffalo Wild Wings franchise companies are working hard to overcome the unique challenges they are experiencing.
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Just like the restaurant industry, the third-party delivery companies are shortstaffed as well, causing issues with orders being delivered or even picked up.” – Dana Herman,
JK&T Wings district manager
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“In the beginning, it was interesting to navigate the usage of all our tablets. All units have a working tablet for orders for each of these third-party services and during high volume times, it could get chaotic, between the tablets, online orders, walk-in guests and call-in orders,” Torsiello said. “We have learned and trained how to properly manage this with proper staffing and an all-hands-on-deck approach. We are looking forward to the ItsaCheckmate to be incorporated in our system.” ItsaCheckmate is a software system tested in some Buffalo Wild Wings restaurants early in the year. It offers third-party delivery platform integration through a single dashboard that automatically pulls orders from those platforms directly into the restaurant’s POS system, eliminating the need for team members to enter them. It also allows operators to notify the delivery services of important menu updates at once rather than logging into all of them separately. With the increased and sustained emphasis on off-premise, it’s an important timesaver that both
streamlines operations and should boost the customer experience. JK&T Wings, with 89 BWW restaurants across seven states, is another franchise company that has experienced growth in delivery and takeout sales. Many of its restaurants are in Michigan, which lagged other areas of the country in allowing restaurant dining rooms to open and increase capacity. That has allowed those locations to maintain a focus on off-premise, and the company works with all the major third-party delivery platforms. “We have done an incredible job transitioning focus to all off-premise (third-party delivery, online ordering, direct delivery and takeout) orders,” said Dana Herman, a district manager. “Most locations have put a more senior manager in charge of that department to handle sales. You must have a manager inside the four walls who owns it in its entirety.” But even with that focus, there can be problems with thirdparty services. “Just like the restaurant industry, the third-party delivery companies are short-staffed as well, causing issues with orders being delivered or even picked up,” Herman noted. Four M Franchising also works with the major third-party delivery players, and like many others, has seen its share of difficulties. “The challenges we face on a day-to-day basis are that food is either too cold or orders are missing parts of the delivery, long wait times for deliveries and some not-so-friendly delivery drivers. We continue to do our diligence by executing at a high level and reaching out to our guests who give feedback,” Washington said. In some cases, the problems are so bad that third-party delivery has been abandoned. “My stores don’t do delivery,” said Joshua Theiss of BWW Southern Management. “We had too many bad experiences when we initially rolled out delivery and ceased doing it. The third-party delivery services couldn’t get the food to customers in a timely manner, and we were fielding entirely too many guest complaints for something we couldn’t control.” For those that elect to continue working with third-party delivery companies, industry observers suggest a few best practices for eliminating problems and providing the best customer service possible. According to Paul Tiedt, senior vice president, research for platform technology and professional services firm SMG: • Train teams to ensure there is a clear and precise order communication between the third-party app and the kitchen. • Assign a point person to check orders once filled. • Seal the bag in a clean, well-packed, closed container and stick the receipt to it after it’s checked. • Have a strategy to manage the restaurant’s reputation online and address complaints that may arise. Research shows consumers often blame the restaurant for a problem caused by the delivery service. Statistics suggest that third-party delivery, as part of the larger trend toward off-premise restaurant food sales, is here to stay, and that delivery, in particular, is a service that consumers will expect and depend upon going forward. It will be up to operators to embrace the trend and make the best of it. “I am excited to see how the company transitions into a more delivery-centric focus, including car-side service,” Torsiello said. “BWW works hard with great marketing techniques and continues to drive future business with better options for delivery and to-go.” S SEAN IRELAND is the FBS director of communications. You may reach Ireland at 678-797-5165 or seani@myfbsonline.org.
Pandemic Challenges Affecting Health Insurance for Franchisees by Christy Williams
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CHRISTY WILLIAMS is the FBS executive director. You may reach Williams at christyw@myfbsonline.org.
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We recently announced our 2021 health insurance renewal at a record-low premium increase. Employers who participate in Elevanta Health will enjoy an average renewal rate increase of only 1%. More exciting, over 64% of members who participate received a ZERO percent rate increase. After such a difficult 2020, it was very important to Elevanta and our board of directors that we offer the best renewal terms possible. In fact, Elevanta Health has maintained single-digit rate increases for the past eight years. Members have come to rely on the stability Elevanta Health provides. On top of the increasing costs, the coronavirus pandemic forced employers to become more technically savvy in the way health benefits for employees are managed. More carriers and insurers are requiring online applications and enrollment processes. Elevanta Health offers online enrollment for all employees and provides a back-end portal for employers to monitor the enrollment process of their employees. COVID-19 relief efforts also put new mandates on employers related to employee benefit plans. For example, there are new requirements in place specific to COBRA that apply to employees who were let go during the pandemic. Elevanta Health stays abreast of these mandates and provides updates to employer participants to ensure your compliance. One positive trend that has developed over the last year has been an increased reliance on telemedicine. With the offices of medical providers across the country still closed or operating with reduced hours while demand for services goes up, it’s become more difficult for consumers to make appointments for unexpected illnesses. Telemedicine has become a more widely accepted alternative that offers consumers more convenient access to medical advice and treatment at a much lower cost than a traditional visit to a doctor’s office. All Elevanta Health major medical plans include a state-of-the-art telemedicine program via our partnership with Teladoc. With Teladoc, insureds can schedule an appointment with a provider seven days a week from the convenience of their home. Both phone and video conference appointments are available. As we all continue to emerge from the pandemic, Elevanta Health will continue to focus on what is best for employers and your employees and ensure we are providing a cost-effective and quality health care program. Obtaining a quote is a simple and quick process. Visit the FBS/Elevanta website today: www.elevantahealth.com/fbs S
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o one needs a reminder that 2020 was a year filled with unprecedented challenges caused by the coronavirus pandemic. Small-business owners, and specifically those in the restaurant industry, were keenly affected by the economic fallout from the pandemic. From sales and labor disruptions to supply chain interruptions, little about life has been normal since March 2020. Now, though we continue to see positive signs about the nation’s recovery from the pandemic, new hurdles are emerging. Even though economic recovery seems well underway as the severity and number of COVID-19 infections decrease, we’re all keenly aware of how labor shortages are affecting operations in businesses across the spectrum. There are other consequences of the pandemic to consider as well, such as the pressure being put on health insurance expenses. A combination of factors is pushing costs higher as we transition to a post-pandemic world. During most of 2020, as health officials encouraged the public to stay home and doctors’ offices enacted restrictions on in-person visits, many consumers elected to delay preventive care for weeks, or even months, at a time, creating pent-up demand for care and services this year. Experts also fear that delayed diagnoses of medical problems could require more intensive treatment for medical conditions that could have been caught earlier and addressed less expensively. Additionally, the overwhelming claims related to COVID-19 are contributing to rising costs. Reinsurers, who typically cover the very large claims for the traditional insurance carriers, are increasing their rates to insurers by double digits to cover the volume of claims for the treatment of COVID-19. Elevanta Health recognized the challenges that small-business owners faced during the pandemic. In the spring of 2020, when the nation and its economy came to a screeching halt, Elevanta returned $2 million to members in the form of premium deferrals and participation refunds. As our partners face these new obstacles during the recovery, we remain just as committed to helping them overcome the difficulties ahead. Elevanta Health major medical and minimum essential coverage plans have comprehensive preventive care services with zero costs to the employees/insureds. All preventive care services are covered at 100% by the plan, including over 60 tests, treatments and some medications. Overall, Elevanta Health has 14 medical plans that are all ACA compliant. Each plan uses the national Blue Cross Blue Shield PPO network of providers, ensuring that with their 97% market share, insureds will have easy access to the providers of their choice. Elevanta is a one-stop shop for employee benefit programs, offering not only medical plans but also dental, vision, life and accident plans.
First BWW Franchisee Blazed Trail for Others Dave Kajganich’s leadership part of franchise system’s evolution Dave Kajganich, left, and his wife, Lynn, visited with Kris Paronto, keynote speaker at the 2019 Summit. by Sean Ireland
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eadership comes naturally to Dave Kajganich. From serving as captain of his college baseball team to becoming the first independent franchisee in the Buffalo Wild Wings® system back in 1992, blazing a trail for others to follow has never been too daunting. Kajganich, who eventually owned seven BWW® sports bars, is blazing a new trail these days. He and his former partner, Ken Brown, who combined their franchise companies in 2012, left the system last fall by selling their restaurants to Grube Inc. But Kajganich and Brown, another early franchisee of the system whose first store in Ashland, Ohio, was one of the original 25 franchised locations of the brand, found plenty of challenge and reward during their careers as pioneers
of the Buffalo Wild Wings system. The two Ohio natives met in 1980 as freshmen infielders on the College of Wooster baseball team in Wooster, Ohio, about 50 miles southwest of Cleveland. By their senior years, Brown and Kajganich were the starting shortstop/second baseman combination, with Kajganich serving as team captain. They maintained their relationship after college, both living in the Columbus, Ohio, area working corporate jobs, marrying and starting families. By the early 1990s, the former teammates and their wives often shared game nights with chicken wings that came in plain brown packaging bought from a local restaurant. Little did they know, those wings would lead to the start of a nearly 30-year
journey with what became the Buffalo Wild Wings brand. “I wanted to open up a sports bar, which at the time, weren’t as prevalent as they are now. My corporate job saw me get relocated to Columbus, Ohio, which is where I met [my wife], Lynn,” Kajganich said. “One day, I asked her, ‘Where can you get good wings in Columbus?’ She asked her brother, and he said that the BW-3 on North High Street had the best wings in the city. I became addicted to the Wild-flavor wings. Long story short, while waiting for my takeout order, I saw a small sign behind the counter: ‘For franchise information … .’ I wrote down
Dave Kajganich, right, was a fixture at FBS Summits for many years, including the 2018 event where he was photographed with former college and NFL football coach Lou Holtz.
to vacation rental real estate holdings in Destin and Miramar Beach, Florida, and, true to their entrepreneurial nature, considering new business opportunities. They are thankful for their time and experience with the Buffalo Wild Wings brand. “The experience was invaluable and was exactly what we needed to get started in this business. There is no way we would have succeeded had we tried to do it by ourselves without the guidance of Jim Disbrow, Scott Lowery, Mark Lutz, John Skeins, Dan Smart and Larry Podlogar,” Kajganich said. “Because of that, I am able to look at business opportunities more critically and understand the franchisor motives better and what to look out for as a franchisee.”
Ken Brown, another early franchisee in the BWW system, teamed up with Kajganich in 2012. The former college baseball teammates found they worked just as well off the diamond as on it.
SEAN IRELAND is the FBS director of communications. You may reach Ireland at 678-797-5165 or seani@myfbsonline.org.
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He remains proud of his designation as the first BWW franchisee and relishes the success of the franchise system in its four decades. He credits its growth to his fellow franchisees, all hard working and dedicated to seeing their enterprise succeed together. “The most rewarding part of owning the restaurants was the positive impact we were able to make with the people we employed and the communities we served,” he added. “We spent almost half our lives as part of the BW-3/Buffalo Wild Wings family. We will cherish the memories forever.” S
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the number, called Art Bowman and the rest is history.” Brown recalled, “He called and said, ‘Lynn and I are quitting our jobs, and we’re moving back to Cleveland, and we’re going to open a BW-3.’” In July of 1992 in Cleveland, Kajganich opened the first franchise location of what would evolve from BW-3, which stood for Buffalo Wild Wings and Weck, to become Buffalo Wild Wings. By 1994, he owned three locations in the Cleveland area, and Brown had also become interested in becoming a franchisee. With his friend’s help, Brown opened a location in Ashland, Ohio, the first of his three. “We operated separately. He had stores in northern Cleveland, and I operated three down here in smaller towns,” Brown said. “Then finally the anvil hit us in the head in 2012, and we realized that he was better at aspects of the business that I was weak at and vice versa. Our strengths and weaknesses meshed, and we combined operations and became much more successful.” “It really was just Lynn and I from the beginning and for over 20 years,” Kajganich said. “We had silent investors, but [the business] was ours to operate. Around 2012, Ken Brown and I were talking, and he brought up the idea of combining our companies. We had known each other since college, so I felt comfortable that we would make it work. It was an easy decision because Ken worked extremely hard for the success he had, and he is someone with high integrity and great character.” The combined company was called KATAR Holdings Inc. and had seven
BWW sports bars. The former college keystone combination was as smooth in the hospitality management game as they were on the baseball diamond, and, over the years, they had a lot to navigate: The brand name changed, and ownership also changed, more than once. Perhaps most notably, the brand format was transformed from counter service to full service. Brown said the growing use of technology in the business over the years was a particular challenge and noted the work their restaurants did to try to help the system as it grew was challenging as well. “We tested a lot of products,” he said. “We had our philosophical battles [with the franchisor] about direction. What we tried to do was make sure that if the franchisor was going to make changes, we wanted them to validate those changes with data and trial and error … . It got a little challenging and heated sometimes, but we all had the best interests of the franchisees in mind.” Through it all, Kajganich provided vision and guidance that moved things forward and made a positive environment that was good for employees as well as guests. “He is no question a leader,” Brown said. “He was captain of the team. Dave is without question the entrepreneur as it’s described. The dude takes risks. He’s been successful at a lot of things, and he’s failed at some. He’s constantly intrigued about new concepts and ideas. Dave went through the whole John Maxwell and Zig Ziglar leadership training programs. He connected with managers. It was about leading them in life and not so much the restaurant industry. That’s been his passion. “Our employees came first. They were always important to us,” Brown added. “We tried to help them where we were allowed to help them, and we always tried to do things the right way. Quality and character were big drivers for us.” Last fall, the time was finally right for the pair to exit the business. Selling to Steve Grube of Grube Inc. ensured that the BWW sports bars and their employees would be going to a good, capable operator who valued the work and community trust that had been built by Kajganich and Brown over nearly 30 years. Brown is now semi-retired with some commercial real estate interests and vacation rental property. He also volunteers time with a nonprofit workforce development startup program. Kajganich and his wife are tending
Employee Off-Duty Conduct:
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? s e c n e u q e s n o C o N re e h T Are
here is likely no workplace that does not have some rules of conduct: no sexual harassment, no violence and do not steal are some common examples. Such rules govern not only the way employees interact with each other and their supervisors, but also their conduct toward customers, visitors and the like. Such conduct rules are necessary to the smooth operation of the workplace, and there is no question that those rules apply while at the workplace or working, even if that work takes the employee away from the premises. But what happens when employees are away from the premises and not working? Do the rules still apply? What about off-duty conduct that is not specifically prohibited by a workplace rule? Can off-duty conduct that occurs away from the workplace result in disciplinary action, including termination? In May 2020, Amy Cooper, a resident of New York City, became known as “Central Park Karen” after a video surfaced showing her calling the police claiming that she was being assaulted by an African-American male. Her employer, Franklin Templeton, terminated her almost immediately from her $170,000-per-year job, releasing a statement that it did not tolerate racism of any kind. More recently, following the Jan. 6
by Douglas H. Duerr
insurrection, some participants lost their jobs as their actions became known. Are such terminations legal? What about conduct that does not make national news? What are the rights (or obligations) of the employers and employees in these situations? These questions are important, not only because employee off-duty conduct can have serious consequences in the workplace and for the business itself, but also because acting against an employee for off-duty conduct can also result in legal claims by the employees against their (sometimes former) employers. In fact, in May, Cooper filed a lawsuit against her former employer, stating that it lied in its public statements regarding its actions and defamed her (in addition to claims of alleged discrimination based on her sex and race), and some of those terminated following the insurrection are challenging their terminations in court. While there are federal laws that prohibit discrimination based on certain characteristics (e.g., race, religion, etc.) or on certain activities relating to the workplace (e.g., picketing for higher wages or for collective bargaining), unfortunately, what action an employer can (or must) take against an employee for
off-duty conduct will almost always depend upon what state you are in and, in some instances, what the conduct is. A good example of how this works is the use of cannabis: As states liberalize the rules on cannabis use, we are seeing a rise in “cannabis tourism” in which individuals travel to a state allowing recreational use of marijuana (e.g., Colorado), lawfully smoke marijuana (posting about it on social media) and then return home (where smoking marijuana for recreational purposes is not legal) only to face potential termination for violation of their employer’s rules on drug use. If their workplace is not in one of the states that prohibit termination for engaging in legal conduct (e.g., California, Colorado, North Dakota) or for consuming a lawful product (e.g., Illinois, Minnesota, Montana, Nevada, New York, North Carolina, Wisconsin), then they can be lawfully terminated. While there may be some limitations on the ability to discipline (or terminate) an employee for some types of lawful conduct, there is generally no prohibition against acting against an employee for unlawful conduct. In such instances, as the recent lawsuit by “Central Park Karen” demonstrates, when action is taken based on off-duty conduct, make sure the action is not discriminatory based on a protected characteristic and be careful in what is communicated regarding the action and the reason why. For example, Franklin Templeton allegedly characterized her as racist rather than simply stating that it determined her conduct and the resulting impact on the company’s reputation and the workplace were unacceptable. Are there instances when an employer might be required
to act based on off-duty conduct? The answer is: yes. Title VII of the Civil Rights Act of 1964, and corresponding state laws on employment discrimination, require employers to provide a workplace that is free of unlawful harassment based on race, color, sex, religion and national origin, and there are other laws protecting against age discrimination and other characteristics. Unfortunately, off-duty conduct can have the effect of introducing prohibited harassment based on those characteristics into the workplace. For example, if an employee, while off-duty, begins sending a co-worker sexual emails or uses social media to spread rumors regarding the co-worker’s sexual conduct, even though the conduct is away from the workplace, it has the effect of creating a hostile workplace based on sex – something that the employer is thus obligated to remedy. So, can the employer act against an employee for off-duty conduct? Maybe, depending upon the nature of the conduct and whether state or federal law protects the conduct. Is the employer required to act based on off-duty conduct? If that conduct implicates the rights of other employees, then probably yes. When considering what you can and should do in these circumstances, make sure you fully understand what conduct the employee engaged in, the impact on the workplace, and the legal rights and obligations you have in the state where the workplace is located. S DOUGLAS H. DUERR is a partner at Elarbee Thompson, a national labor and employment law firm with an industry practice area focused on franchisees. Learn more at www.elarbeethompson.com.
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Comparing LLCs to S-Corporations
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our business is probably set up as a Limited Liability Company (LLC), an S-Corporation or both. But what’s the difference, and under what circumstances would it make sense to change your LLC into an S-Corporation? An LLC is a type of business entity (as compared to a sole proprietorship or corporation), while an S-Corporation is a tax election. An LLC is set up at the state level, while an S-Corporation election is made with the IRS at the federal level (and filed with your state’s secretary of state). Owners in an LLC are called “members,” while S-Corporation owners are called “shareholders.” Both LLCs and S-Corporations protect your personal assets from business creditors, unlike a sole proprietorship. That means business losses are limited to the amount of your investment in the business. It’s important to keep your personal and business financial affairs completely separate to maintain the corporate veil and not run the risk of losing that protection for your personal financial situation.
by Stacy Smith
Taxation of Business Income
Business income in an LLC flows to the members to be taxed at their personal rate. Owners are responsible for paying their own self-employment taxes (both the employer and employee sides of FICA and Medicare, a total of 15.3% of income). Taxable business income is reported on Schedule C of each member’s personal tax return. The LLC members need to make quarterly estimated tax payments to keep up with anticipated tax liability throughout the year. In contrast, S-Corporation shareholders take a salary, and like other employees, pay 7.65% in payroll taxes with the business paying the other half. The business can then take a tax deduction for the payroll tax expense. Any additional business profits are distributed to S-Corporation shareholders as dividends, which are not subject to payroll taxes. These dividends are allocated in proportion to each shareholder’s interest in the S-Corporation. S-Corporations file a separate tax return for the business using Form 1120-S.
Setup and Maintenance
It’s easier and generally less expensive to set up and maintain an LLC, which makes it a good choice for a smaller business just starting out. It also makes sense for a company with one or just a few owners who want maximum flexibility and control over the business. An S-Corporation is governed by a board of directors and is required to maintain corporate minutes and hold annual shareholder meetings. More structure and regulatory requirements make S-Corporations more expensive than LLCs to both set up and maintain. Additional costs can include articles of incorporation, attorney fees, additional accounting fees for financial statements and tax preparation for the S-Corporation, state annual reporting fees and potentially additional state taxes depending on state laws. When establishing your S-Corporation, you first register as either an LLC or a C-Corporation and then elect S-Corporation status. Some states allow S-Corporations to be taxed as a pass-through entity (where income is taxed at the personal rather than corporate rate), but other states tax S-Corporations the same as C-Corporations. All owners in an S-Corporation must be U.S. citizens, and the number of owners is limited to 100, with spouses being considered as separate shareholders. Be aware – in many states when a member joins or leaves an LLC, the state may require the LLC to be dissolved and re-formed with new members. In contrast, if any owners leave an S-Corporation, the corporation can continue with remaining owners.
Which One is Better?
Whether your business should be an LLC or makes an S-Corporation election depends on several considerations.
If you’re just starting and your business is smaller, an LLC makes sense. As your LLC generates more income, your selfemployment taxes will also increase, making an S-Corporation more attractive. As mentioned above, S-Corporation shareholders can share in company profits through dividends without having to pay self-employment taxes. However, S-Corporation shareholders must be paid “reasonable compensation” (compared to industry standards) for the services they perform for the business. It might be tempting to pay shareholders at a lower rate to compensate them through dividends and therefore avoid payroll taxes, but the IRS scrutinizes – and penalizes – such arrangements. Also, more-than-2% shareholders are not allowed to participate in tax-free employee benefits such as group health insurance or a cafeteria plan. The additional oversight required of S-Corporations might also provide your business with more credibility, especially if you’re seeking outside investors or bank loans.
The Bottom Line
There’s not a one-size-fits-all answer to the appropriate entity for your organization. As your business grows and changes, today’s answer might not be the same in the future. It’s important to visit with your tax and/or legal advisors before making any changes to be sure you understand the ramifications and are in compliance with all applicable regulations. S STACY SMITH, CPA, is a shareholder of Mize CPAs Inc. – a full-service accounting firm that has provided the Elevanta Accounting & Payroll solution since 2003.
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Feed Your Mind T
hirty-five years ago, I was just out of college, and I was the head soccer coach at a small college in Angola, Indiana, called Tri-State University. I bought an audiocassette program called “Masters of Motivation” that featured 12 head football coaches at major universities. I listened to those tapes over and over. On one tape, Lou Holtz said something that has stayed with me all these years. He said, “Five years from now you will be the same person you are today except for the people you meet, the tapes you listen to and the books you read.” There I was in my little dorm apartment making a total of $3,000 plus room and board for being the head soccer coach and a dorm director. That’s when I started seriously reading. And since then, I’ve kept reading and reading and reading.
Never Stop Feeding Your Mind
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In many ways I think education starts when school stops. Education means to draw out the best from the student, the teacher and the subject. I encourage you, no, I urge you, no, I challenge you to never stop feeding your mind. Your mind has so many compartments: logic, fantasy, imagination, dreams, problem-solving, checklists, desires, attention, intention, will, volition, calmness, enthusiasm, excitement, subjects, and on and on. Your mind obviously is the key to your future. Just like your body needs to be fed properly and exercised regularly, so does your mind. Books, podcasts, movies, conversations, short videos, articles, life experiences, travel, music, observing and listening all provide you with valuable inputs. Those inputs can connect in ways that you could never have predicted. However, if you don’t feed your mind a steady supply of thoughts,
by Dan Coughlin
you won’t have the fuel necessary to make those connections.
Vary Your Inputs
As you feed your mind, mix up what is going in there. If a farmer plants the same type of plant every year, he or she will eventually wear out the nutrients in the soil. It is important for the farmer to rotate the crops to keep the soil healthy. The same is true with you. Put a variety of ideas in your mind. The genres I read usually include biographies, autobiographies, nonfiction business books, sports books, books on ideas to improve human performance, history books and spiritual books. I try to read a variety at any one time. Right now, I’m reading: • “Jesus Calling” by Sarah Young • “An Altar in the World” by Barbara Brown Taylor • “The Ride of a Lifetime” by Bob Iger • “The Year of the Pitcher” by Sridhar Pappu • “William James” by Robert Richardson I encourage you to write down a variety of topics you want to feed into your mind. Then search for books, articles, podcasts, movies, videos and so on that fit with the topics you want to learn. It’s like you’re a freshman in college every day and you get to choose the topics you want to study and the courses you want to take. There is no diploma, and you never graduate. You just keep learning. And all that learning connects in unexpected ways that will help you in your work and in your life.
Be Consistent
Rather than taking a two-year sabbatical to read everything you’ve ever wanted to read, I suggest you feed your mind in bite-sized chunks every day. If you read for 20 minutes a day, my hunch is that you can read 10 pages a day. If you read 10 pages a day five days a week, that’s 2,500 pages a year. If you vary the topics of what you read, you will naturally begin to make connections that other people simply don’t see. If you prefer podcasts or videos or articles, then invest 20 minutes a day into those and you will get the same incredible effect in your life.
Conclusion
By consistently feeding your mind every day and varying the topics you put into your mind, you will dramatically and exponentially expand the value you have to offer to the world. S DAN COUGHLIN provides both individual and executive coaching and group coaching programs on management, leadership and teamwork. To visit his free Business Performance Idea Center, go to www.thecoughlincompany.com.
Four Customer Service Lessons From Just ne Store Visit by Dennis Snow
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A warm sincere greeting is important if customers are to feel welcome. It takes almost no effort to make eye contact, smile and say hello. And yes, even while wearing a mask people can tell if you’re smiling. Assist customers who obviously need help. And even if it’s not obvious, it’s nice to hear an employee say, “Just let me know if you need help with anything.” When you can, take the extra step of guiding customers to the product or information they need. Customers truly appreciate that extra step. A fond farewell at the end of the interaction instills the desire for me to come back. It can be something as simple as, “See you next time!” It creates a warm feeling. So, there you have it – four customer experience lessons from a single store visit. If I was leading a team meeting, I could share this story, discuss the lessons learned and ask participants how those lessons apply to their own roles. Even better, I could ask attendees to share their own stories and lessons, which encourages them to keep their customer experience antennae up when they’re out in the world. Here’s something to think about: What’s a recent customer service experience you’ve had and what can you or others learn from that experience? S
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DENNIS SNOW is the president of Snow & Associates Inc. Dennis worked with The Walt Disney Co. for 20 years and now consults with organizations around the world, helping them achieve their customer service goals. He is the author of “Unleashing Excellence: The Complete Guide to Ultimate Customer Service” and “Lessons From the Mouse: A Guide for Applying Disney World’s Secrets of Success to Your Organization, Your Career, and Your Life.” You can reach Snow at 407-294-1855 or visit his website at www.snowassociates.com.
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s a customer experience speaker and consultant, I’m always analyzing the level of service I receive when I’m out in the world as a customer. I’m actually a very easy and forgiving customer, but I’m still watching and listening because there are often stories or examples I can use in a presentation or blog post. I try to balance the good with the bad. I believe this is a good practice for anyone to apply. When you’re a customer, notice what’s happening in terms of the service you’re receiving. Whether the service is good, bad or indifferent, there are always opportunities to learn from what we’re experiencing. If it’s good or excellent service, take a moment to determine why it’s so good and think about how you can apply what you’re seeing or hearing to your own role. If it’s bad or indifferent service, think about whether you’re ever guilty of those behaviors in your own role and vow to eliminate them from your approach. I was recently in a store and found it was a gold mine of examples of what not to do. The service wasn’t bad, it was indifferent. I didn’t feel valued as a customer – I felt more like an interruption. Even though there were two employees toward the front of the store who saw me when I entered, neither offered a friendly greeting. They just continued their conversation. As I wandered the aisles looking for what I was shopping for, no one offered help even though it was clear I was searching. When I approached an employee for help finding the product, he replied, “I think that’s on aisle 10” and went back to stocking shelves (with his large cart right in the middle of the aisle). This indifferent service kept up throughout my entire store experience. Again, no one was outright rude. It’s just that I didn’t feel that anyone was happy I was there. I felt more like an interruption rather than welcome. I will say that the cashier told me to have a nice day, but it was as he was turning away from me to the next customer, and it sounded more robotic than sincere. As I mentioned earlier, my store experience was a master class in customer service. Turning each of the interactions to focus on what SHOULD have happened I concluded:
Three Steps to Greatness: Using Your Habits to Influence Your Goals
by Laura Stack
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F
irst, forget inspiration. Habit is more dependable. Habit will sustain you whether you’re inspired or not. Habit is persistence in practice.” — Octavia Butler, American author and MacArthur Fellow. As complex as people are, when it comes down to it, you might consider us intelligent meat machines fueled by chemical reactions and guided, in large part, by programs we call habits. These boil down to repeated, automated actions – something like those of a robot on an auto assembly line, though not as stringent, and not always occurring in the same order. One of my colleagues almost always makes a large cup of coffee first thing each morning, eats a bagel and gets to work. After years of doing it daily, he doesn’t have to think about the process of coffee-making, nor does he have to remind himself to refill the water reservoir or add new pods to the holder when they run low. He does so without much thought. Some habits, like this one, we self-program over time. Others we have programmed into us by parents, teachers,
mentors, employers or pastors. But humans are more than just habit-based robots; we have free will. We can decide to change our programming to accomplish astonishing things. Constructive habits are pure gold when they become routine, as they help us achieve our objectives more quickly, with less heavy thinking. This can make a huge difference. However, doing the same thing the same way every day without deviation from the status quo at the appropriate times, in the appropriate ways, won’t accomplish anything new. So, when the need drives you, you can program yourself with new habits to achieve new goals. Start with these steps: 1. Clear out the deadwood. Kill off any habit failing to lead you toward your goal. For example: even spending a few minutes on Facebook or taking excessive personal breaks at work steals valuable time. So put stakes in the hearts of slacker habits and remove
the inappropriate ones. Just keep in mind: it’ll take a while. Mark Twain once said, “Habit is habit and not to be flung out of the window by any man, but coaxed downstairs a step at a time.” He’s right. Take the time to coax down each bad or unnecessary habit and make sure it leaves nothing of itself behind. 2. Cut and paste. Change your habits whenever necessary, no matter how deeply ingrained. Experts say it takes about 66 days (not 21) to form a new habit. However, you can coax new habits upstairs faster if you piggyback them on existing habits, crosspollinate habits and merge the best pieces of old habits when you can. To create new and specific “identity-based habits,” as James Clear calls them, you may need to change your assumptions, your self-image and even your worldview. Here’s an example. An acquaintance used to work seven days a week and got upset when unexpected client calls disrupted his to-the-minute schedule. When he got sick of the stress, he decided to loosen up. He realized client calls didn’t disrupt his schedule much if he didn’t allow it; old software was slowing him down; and some of his best ideas occurred when he either headed off for a bio-break or to weed the flower beds and sidewalks of his home office. Now he works six days a week (except during crunch times), uses updated software and takes longer daily breaks. He’s more productive than ever. His new habits are part of his current identity and help him more easily complete his goals. 3. Exercise discipline and decisiveness. Habits can be boring. To avoid boredom, you can mix things up a little, but you also must exercise strict discipline to stay on track. You may be tempted to procrastinate on some tasks, but don’t. This requires a level of firm decisiveness forcing you to do whatever’s next – another
positive aspect of habits, since you automatically know what’s next! Decisiveness also involves selecting which processes to kill, per No. 1, so you can function more smoothly. Reaching for the Gold Ring We’ve all heard about the old-fashioned practice of reaching for the brass ring on the carousel for a free ride – now symbolic of stretching to achieve a goal. A goal you don’t stretch for isn’t worth the effort, right? So, ignore the brass ring and reach for the metaphorical gold ring just beyond. To do so, harness your habits ruthlessly, channeling them in the directions you want to go, using the ways listed here to get started. S
LAURA STACK, MBA, CSP, CPAE, is an award-winning keynote speaker, bestselling author, and noted authority on employee and team productivity. She is the president of The Productivity Pro Inc., a company dedicated to helping leaders increase workplace performance in high-stress environments. Stack has authored eight books, including “FASTER TOGETHER: Accelerating Your Team’s Productivity” (Berrett-Koehler 2018). She is a past president of the National Speakers Association, and a member of its exclusive Speaker Hall of Fame (with fewer than 175 members worldwide). Stack’s clients include Cisco Systems, Walmart and Bank of America, and she has been featured on the CBS Early Show and CNN and in The New York Times. To have her speak at an upcoming meeting or event, visit www.TheProductivityPro.com.
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ADVERTISERS GUIDE 2021 FBS Summit
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CALL FOR FRANCHISEE NEWS Issue 3 is due out September 2021. As always, we want to highlight any news or events associated with our members. If you have ideas for potential stories, please submit online at www.myfbsonline.org, email communications@myfbsonline.org or call 678-797-5160 by Aug. 27. Our editorial staff can assist in writing the article.
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