Flavor, Spring 2024

flavor flavor

QFA Board of Directors

Ron Stokes Chairman

Tom Lewison Vice Chairman

Matt Herridge Secretary

John Ghirardelli Treasurer

Randy Key Director

Jiger Patel Director

Leo Stathakis Director

Jacob Stauffer Director

Chase Andrews Association Manager

Christy Williams Elevanta CEO

QFA Editorial Board

Rachel Jackson Editor-in-Chief rachelj@qdobafa.org

Tyler Ryan Communications Editor tylerr@elevanta.com

Jared Johnsen Communications Specialist jaredj@qdobafa.org

Advertising Sales

Brad Seton Sales & Development Manager brads@qdobafa.org 678-439-2284

table of contents

Design and Layout

Kristen Thomas

KT Graphic Design ktgraphicdesign@gmail.com

the Cover

Now more than ever, people are connecting with the brands they know and love through digital platforms. Turn to page 10 to learn how franchisees can leverage tools like social media, search engine optimization (SEO), digital loyalty programs and more to keep up with trends, promote their businesses effectively and stay connected to the modern customer.

1701 Barrett Lakes Blvd. NW, Suite 180 Kennesaw, GA 30144

Phone: 678-797-5160

Fax: 678-797-5170 www.qdobafa.org

Qdoba Franchisee Association publishes Flavor. Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of Qdoba Franchisee Association. All Rights Reserved.

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Our Association and Brand Sees a Positive Shift

2024 has started off strong for most of us in the restaurant and fast-casual industry, and as the months march on, so does our association and brand. A number of changes – positive changes – are taking place within Qdoba Franchisee Association (QFA) and QDOBA Mexican Eats®. I would like to extend a warm welcome to our new association manager Chase Andrews! Chase comes to QFA with a strong background in not-for-profit organizations as executive director and will be able to bring fresh ideas and insights to the table. Welcome Chase!

Please help me welcome not only Chase but also our 2024 QFA Board of Directors: Tom Lewison, Matt Herridge, John Ghirardelli, Randy Key, Leo Stathakis and Jiger Patel. Together, we can accomplish great things! I want to express my gratitude to every one of you for your time and commitment. I look forward to seeing what this new chapter brings! Our association is headed in the right direction, and with this strong of a team, I know QFA will remain a positive asset for its members.

As most of you know, QDOBA Mexican Eats is also making headway on some positive shifts. From Sept. 30, through March 30, 2025, the brand is entering a six-month test in various markets around the country to simulate what a national marketing campaign will look like. John Cywinski is spearheading this effort to take brand marketing to a national level. The QFA Board will ensure that the read-on results is in alignment with franchisees’ business goals. As our brand looks toward these newfound potentials in marketing, look toward your

association for best tips and practices on what is happening at both the local and national levels for the brand and the restaurant industry.

As our brand looks toward these newfound potentials in marketing, look toward your association for best tips and practices on what is happening at both the local and national levels for the brand and the restaurant industry.

Within this publication lies a wealth of information, including a feature on marketing and promotion, and how to approach modern marketing. Read more to brush up on how to stay ahead of our evolving industry by staying attuned to customer preferences and communication trends. Navigate the competitive fast-casual restaurant industry landscape by deploying innovative marketing tactics and leveraging social media platforms to engage customers through interactive content while building brand loyalty and community.

Also found in this issue of Flavor are tips for combating inflation. As our country contends with persistent inflation post-COVID-19, it is imperative that we adapt to inflation and strategize ways to maintain profitability while sustaining the quality and customization of food we are known for. In navigating these challenges, we must evolve while preserving our unique brand identity and customer appeal. Tools such as the Flavor magazine remain a valuable source for members to share what works within their own organizations and provide a fresh perspective on strategies and ideas that could work for you and your locations.

Positive changes are headed our way. Positive changes that reflect the success of the brand and our association. Utilize these changes to your advantage. Reach out to Chase and the QFA Board of Directors. Get involved with QFA. Contribute to the Flavor magazine and become energized about what the brand is doing. Together, we can pave the way for a successful 2024 and beyond. l

Ron Stokes Ron Stokes Chairman

The Power of QFA Membership and Our Resilience Amidst Change

To begin, I want to extend my heartfelt thanks to the entire Qdoba Franchisee Association (QFA) family. Your presence in the association truly makes a difference and allows QFA to remain a community based on supporting one another’s success. As we move further into 2024, it becomes that much more important that members look out for their fellow franchisees and come together to share insight on best business practices.

One benefit of QFA membership that will be integral to getting through the rest of the year is our ability to band together to weather any storms that may arise in the fast-casual restaurant industry.

One benefit of QFA membership that will be integral to getting through the rest of the year is our ability to band together to weather any storms that may arise in the fast-casual restaurant industry. In times like these, when many business owners are trying to respond to inflation or find new ways to market their products,

smart business strategies are key. It's about resilience, innovation and exploring new avenues to thrive. Economic shifts affect how people spend their money and what they look for in dining options. Being resilient means being able to adapt quickly to these changes. There's a wealth of resources at your disposal as QFA members – including opportunities to connect with other members, learn more about how fellow franchisees work to better their business and gain the tools necessary to do the same.

Being resilient also involves building strong relationships within the franchise community. By working together with other franchisees and the franchisor, owners can share ideas and support each other through tough times. Associations that prioritize their fellow members’ success and overall well-being are the ones that shine brightest. QFA is committed to prioritizing members’ needs, day in and day out, so that we can all live up to the expectations customers hold for QDOBA®. Each member's businesses are unique, and QFA will always celebrate the diversity and collective strength of our community.

It is my pleasure to serve QFA as association manager. You may reach me by email at chasea@qdobafa.org or visit https://qdobafa.org for more information regarding QFA.

Together, we're not just navigating the challenges of working in our industry – we're charting a course toward franchise resiliency. And with your continued support, there's nothing we can't accomplish! l

QFA is committed to prioritizing members’ needs, day in and day out, so that we can all live up to the expectations customers hold for QDOBA.

Warm regards,

Chase Andrews Association Manager

QDOBA® Franchisee The Integritty Group Strategizes for Company Growth

Restaurant management and development company The Integritty Group (TIG) has its headquarters in Philadelphia and operates restaurants throughout Pennsylvania, New Jersey, Delaware, New York and Florida. “The Integritty Group” is a name that captures the company’s foundational values. When co-founders Pranav Desai, Jiger Patel and Raj Mahadevia launched the company in 2015, they wanted to acknowledge the core values all three of them shared – integrity and honesty – and the vision they had for the company. Why the unusual spelling, ‘Integritty?’ The founders also wanted to acknowledge the grit and perseverance required to build the business.

The company’s first venture was with The Greene Turtle Sports Bar & Grille. After that, the business quickly expanded. “From there, we built up to four restaurants right before COVID-19, and we were in a pretty good swing of things until the lockdown happened,” said Desai. “We were primarily in full-service restaurants. We had Checkers restaurants, which is a QSR [quick-service restaurant], but other than that, we were all full-service, which was heavily impacted as we all know. So, it was a time when we had to quickly figure out how to pivot; we looked at 10 different things at that time. We were in that discovery mode again and figuring out what our next course of action looked like.”

The team made the right choice with that pivot. “One thing led to another, and we were introduced to the brand QDOBA,” said Desai. “We had looked at that segment of Mexican fast-casual eats. And QDOBA, with their values and with their vision of what they wanted for growth, was a perfect fit. So, we went aggressively in partnering with them, and we acquired a series of stores and opened new stores.” The plan began with just one QDOBA at the beginning of 2021. Fast forward to 2023, and the business was already operating 33 QDOBA locations across five states.

When asked to describe the company’s services, Desai said they are in the “people business and hospitality business. The brands that we work with, or we have partnered with are franchise concepts, and we rely on the product for what they represent.”

TIG looks for employees who are “family-first and community-first type of people, not just about themselves. When we have talent like that, it makes it easy for us to build a culture where it is never about hierarchies or titles,” said Desai. Instead, the focus is on being a member of the TIG family.

After such a strong start — and overcoming the challenges of the pandemic — the team has an ambitious plan in mind for the future. TIG is looking forward to building another 10 to 12 restaurants for 2024, and their target is to hit above 75 restaurants in the next two to three years.

“We are always opportunistic,” says Desai. “But at the same time, we want [to] only grow with the like-minded people who

are aligned with our culture and our core values.” With such strong values to back up its growth plan, TIG is sure to keep enjoying a rapid and successful expansion for many years to come. l

Franchisee Matt Herridge Elected Chairman of the West Viriginia Republican Party

I n January, QDOBA® franchisee Matt Herridge was elected the new chairman of the West Virginia Republican Party during a winter meeting. Herridge served as chairman of the Government Relations Committee of the National Franchise Association for several years, developing relationships in the political world, writing political op-eds for various publications and lobbying for the concerns of restaurant industry members and small-business owners.

Herridge’s company, Charton Management, sold eight franchised BURGER KING® stores in May of 2023, leaving Herridge the co-owner of three QDOBA restaurants in Athens, Ohio, Marietta, Ohio, and Vienna, West Virginia. The sale allowed Herridge to lean more into his interest in politics and consider running for public office. After speaking with state leadership, Herridge concluded that his aim should be to learn more about the typical protocols and innerworkings of state and county politics.

Herridge, after being elected through a unanimous vote, replaced the outgoing chairwoman of the West Virginia Republican Party, Elgine McArdle. Within his first week as chairman, he traveled to the Republican National Committee’s

(RNC) annual Winter Meeting in Las Vegas, where he was able to congregate with members of the committee’s national leadership. Herridge is now a member of “The 168,” a group comprised of the voting members and leadership of the RNC.

“I am more convinced that there are opportunities for businesspeople to impact legislation and the regulatory environment by working directly with our legislators,” Herridge said about how his new political position has affected his outlook on the business world. “I’m blessed to be in a pro-business state where we can affect legislation without too much difficulty or push-back.”

Herridge stated that one of his main focuses moving forward is to encourage more fundraising for candidates’ campaigns and the party’s growth overall. “It energizes me, and I like being able to make a difference,” he said about his experience thus far as chairman. “It’s a steep learning curve, but that goes for anything; you just have to jump in and figure it out.” l

Grand opening celebration outside of The Integritty Group’s QDOBA Hylan location.

Matthew Herridge

Lost Toy Takes Up Residence at a QDOBA® in Anchorage, Alaska

In early February, a Facebook post by QDOBA® Alaska went viral, detailing the story of a stuffed dog that was accidentally left behind in the parking lot of QDOBA Abbott in Anchorage, Alaska. Behind the post was marketing manager Alley Rollins, who found the lost toy and knew immediately that it was beloved once she saw that the dog had been re-stitched several times.

“You can definitely tell that a mom stitched him up real nice,“ Alley said in an interview with Alaska’s News Source.

The viral post on the QDOBA Alaska page, which has been shared more than 800 times, read: “Hi! I'm looking for my family! I accidentally got left behind at QDOBA on Abbott. They are taking very good care of me, and even made me a kids' meal! It was delicious! I made a friend named Danny, and he made me

an honorary QDOBA team member! I'm having lots of fun!” The post included several pictures of the child’s toy stationed around QDOBA Abbott, having been welcomed and taken care of by the location’s team members. Community members took to the comment section to detail their own stories of their beloved stuffed toys, and to commend the team for making the effort to find the family it belonged to.

“The internet is so full of negativity that seeing something this light-hearted and sweet was nice for people to grasp onto,” Alley said about the positive response the post elicited on social media. Though she did not expect the amount of shares and comments the post would receive, she felt it would be the most effective method for finding the toy’s owner, as

other businesses have made similar posts for lost toys. As of April, the stuffed dog has still not been reunited with its owner — but it remains a resident at QDOBA Abbott, ready to be claimed. l

QDOBA® Sponsors Luncheon Workshops for Marietta College Students in Marietta, Ohio

On March 12, students at Marietta College in Marietta, Ohio, participated in the first of several workshops included in the ‘Life After Graduation’ mini-series, organized by the Marietta College’s Center for Entrepreneurship and Career Development (CECD). While sitting in on the session, students were able to enjoy food provided by QDOBA Mexican Eats® as part of a partnership between the brand and the college.

The 'Life After Graduation' mini-series was designed to equip Marietta College seniors with the tools and knowledge necessary for a smooth transition into life beyond graduation. Topics like budgeting, preparing employment documents, student debt, etc., were covered in the series of workshops. The CECD has been organizing events on campus aimed at inspiring and empowering students to take ownership of their future and facilitate their ability to start building a better life for themselves and their communities through their professional activities from the moment they arrive at Marietta College.

Between participating in classes and a variety of extracurricular activities, finding the time to participate in an hour-long evening workshop can get challenging. So, the CECD decided to make their sessions shorter, hold them during lunch hour and provide food so students can eat while they learn. QDOBA acted as an informal sponsor for such events after the current Senior Director of the CECD, Jacqueline Khorassani, Ph.D., initially reached out to ask if the brand would supply snacks like salsa and chips.

“This was before they had catering services,” Dr. Khorassani said, “so I would have to send some students to the store to pick up the food. It was a little bit of work, but QDOBA has always wanted to help and be accommodating.”

Dr. Khorassani reached out to QDOBA a few months prior to the Life After College series to request that they officially join the CECD’s sponsorship program as an in-kind Platinum sponsor. In this partnership, QDOBA has committed to sponsoring the Center’s

Students at the workshop were provided with a bag of snacks from QDOBA.

future events and workshops by providing lunch bags or snacks to attendees, at least until the end of the next academic year.

“We really appreciate QDOBA’s partnership. Our relationship is based on mutual trust; I trust QDOBA and they trust us. We have been working together for a really long time, so the relationship is really based on that instead of a formal contractual obligation,” said Dr. Khorassani. “Our students love QDOBA!” l

The lost toy, enjoying a kids’ meal provided by QDOBA Abbott team members.

2024 QFA Board of Directors Highlight

Qdoba Franchisee Association (QFA) is happy to present your 2024 board of directors. Thank you to all board members for continuing to share your business knowledge and expertise with the rest of the QFA community. With your support in 2024, QFA is poised for continued prosperity and success.

Ron Stokes, Chairman

Roaring Fork Restaurant Group, based in Wisconsin States restaurants operate in: Wisconsin, Illinois and Iowa

Tom Lewison, Vice Chairman

QCarolina Restaurants LLC, based in North Carolina States restaurants operate in: North Carolina

Matt Herridge, Secretary

QMG Venture LLC, based in West Virginia States restaurants operate in: West Virginia and Ohio

John Ghirardelli, Treasurer

Burrito Concepts LLC, based in Missouri States restaurants operate in: Missouri, Arkansas and Oklahoma

Randy Key, Director

Delicio LLC, based in Ohio

States restaurants operate in: Ohio and Kentucky

Jiger Patel, Director

Tig Corp., based in Pennsylvania States restaurants operate in: New York, New Jersey, Pennsylvania, Delaware and Florida

Leo Stathakis, Director

QNorth Development Corp., based in Ontario States restaurants operate in: Ontario, Canada

Jacob Stauffer, Director

North Fork Fresh Mex., based in Missouri States restaurants operate in: Missouri, Illinois, Indiana, Kentucky and Virginia

One topic: 10 facts

Digital Marketing and Your Local Presence

1

With smartphones giving consumers access to the world at their fingertips, how business owners present their digital brand is more important than ever. After all, 89% of people search for local businesses on their smartphones weekly.

2

In the digital marketing space, search engine optimization (SEO) matters. The top three ad spots on search engine results pages attract 40% of all clicks on the results page.

3

While the normal assumption is that ads are a nuisance to the consumer, the statistics say otherwise. Seventy-five percent of people say paid ads make it easier to find what they need.

4

For the restaurant industry, search optimization is a pivotal way to increase business. “Restaurants near me” is by far the most popular “near me” search with 6.2 million searches per month.

5

In the digital marketing space, email marketing is not outdated whatsoever. Twenty-one percent of promotional emails are opened within the first hour.

6

The most popular marketing channel in the U.S. is social media, with 55% of businesses in the United States optimizing it.

7

Social media marketing can prove to have fruitful results. Seventy-one percent of consumers are more likely to recommend a brand after having a positive social media experience.

8

Half of consumers are likely to unfollow a social media page due to low-quality products or poor customer service.

9

The more ways you can engage your audience, the better. Businesses using three or more channels in a campaign have an engagement rate 250% higher than those using single-channel campaigns.

10 Technology can be implemented into your business to streamline your marketing. Of those that have utilized marketing automation software, 63% saw positive results within six months.

Sources: Ambassador, BrightLocal, Entrepreneur, Fast Company, GetResponse, Hyperlocology, Marketing.com, Restaurant Dive, Thrive Internet Marketing Agency, WordStream

LOOK LISTEN READ

Look, Listen, Read is a quarterly compilation of some of the most highly rated and reviewed apps, podcasts, books, websites and other resources. QFA 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.

1

HubSpot stands as a premier CRM platform dedicated to empowering businesses in their growth journey. Through its comprehensive suite of software and support services, HubSpot offers solutions across marketing, sales, service and website management. The platform begins with a free entry point and scales seamlessly to accommodate customers’ evolving needs at every stage of their growth trajectory.

2

Franchising presents itself as a “sure-fire” path to wealth that is much less risky than starting your own business. But is that actually true? “The Dark Side of Franchising” reveals how and why thousands of buyers succumb to coercive sellers every year and exactly how these manipulative tactics are employed.

5

Short-term wins are easy. Sustained achievement is another story. On “Business Accelerator,” join New York Times bestselling author Michael Hyatt and CEO Megan Hyatt Miller as they discover how current research combines with timeless wisdom for lasting success. From personal productivity to personal development, self-leadership to team leadership and intentionality to influence, get the insights and tools you need to win at work and succeed in life.

6

“The Franchisee Playbook” equips readers with everything necessary to thoroughly assess franchise systems and select the right one. It offers practical exercises to evaluate personal suitability for franchise ownership, target top-performing franchises, interview franchisees, assess financial viability, explore financing options, decode Franchise Disclosure Documents and ultimately make an informed decision.

7 On “The Mind Your Business Podcast,” James Wedmore serves as the host, guiding CEOs in unlocking their inner potential for success. Beyond conventional business counsel covering finance, marketing and economic trends, this podcast delves into unconventional methods like harnessing the power of the mind to manifest one’s destiny and achieve success. These unique insights set it apart from more technically focused podcasts. With a conversational tone, Wedmore engages industry experts in weekly episodes, offering valuable lessons not typically found elsewhere.

8

3 When I Work leads the market in shift-based workforce management software, prioritizing an employee-centric approach to empower shift workers with fair scheduling and improved work-life management. Their integrated solutions encompass employee scheduling, time tracking and communication, fostering collaboration and delivering consumer-level simplicity to organizations of all sizes.

Experience efficiency with ClickUp, the comprehensive productivity platform that seamlessly integrates teams, tasks and tools into one centralized hub. ClickUp transcends mere task management, offering a plethora of features including document management, reminders, goal setting, calendars and an inbox. With its fully customizable interface, ClickUp caters to all types of teams, enabling seamless planning, organization and collaboration within a single app.

9

Establishing and overseeing a business demands strong leadership capabilities, and the good news is that leadership and managerial skills are acquirable. Dr. Dave Stachowiak explores the realm of effective leadership and management practices in “Coaching for Leaders,” engaging in discussions with bestselling authors, expert researchers, distinguished scholars and business leaders.

10

4 In “Franchise Vision: Transform Your Future Through Franchise Ownership,”

author David Busker offers a comprehensive guide for aspiring franchisees. Covering topics such as entrepreneurial mindset evaluation, franchise models, research, financing and overcoming obstacles, Busker provides practical advice based on his own experiences transitioning from employee to multi-unit franchisee and business owner.

In “Pinnacle,” authors Steve Preda and Gregory Cleary present a five-part formula applicable to any business aiming to break free from stagnation and achieve significant growth without requiring an MBA. Through real-life anecdotes and practical strategies, readers will discover how to implement the Five Principles for business growth, quintuple the value of their business within five years, cultivate an energized leadership team and establish their business as a category of one in their industry. l

by Jared Johnsen

QDOBA Mexican Eats® franchisees are always looking for ways to stand out in a crowded market. The competition among fast-casual restaurants is fierce, and franchisees must use creative and effective marketing strategies to attract and retain customers.

One of the key ways that QDOBA franchisees can market their businesses is through social media. Platforms like Facebook, Instagram, Twitter and TikTok provide franchisees with an opportunity to showcase their food and engage with customers in a meaningful way. Engaging with followers through comments, messages and interactive polls helps build a sense of community and loyalty around the brand. By regularly posting high-quality images of their dishes and sharing information about promotions and events, franchisees can build a loyal following and generate buzz around their restaurants.

Social media also offers franchisees the ability to target specific demographics, as well as run ads to reach potential customers who may not have heard of their locations. Consistency on social media is essential to keep customers engaged and informed about the restaurant's promotions, events and menu updates.

Qdoba Franchisee Association Chairman Ron Stokes believes modern marketing needs a digital approach.

“More customers are using their phones than ever before,” Stokes said. “TikTok, in particular, has been a huge influence for Gen Z.”

In addition to social media, franchisees are finding success through community events. By partnering with local businesses and organizations, franchisees can get involved in their communities and build relationships with potential customers. For example, many operators have hosted events like charity fundraisers, school spirit nights and sports team sponsorships. Engaging with attendees through interactive activities or contests creates memorable experiences that leave a lasting impression.

These events can not only help to raise awareness of their restaurants but position them as active and caring members of their communities. By leveraging community events as a marketing platform, franchisees can effectively reach new audiences, drive foot traffic to their locations and cultivate a loyal customer base rooted in their local community.

Using tools like Google AdWords and Facebook Ads can aid franchisees in reaching potential customers who are actively searching for Mexican-inspired cuisine or who fit a specific demographic profile. This type of advertising can be particularly effective when combined with other marketing strategies, like social media and community events.

Search engine optimization (SEO) emerges as a pivotal force, intricately connecting local visibility, brand coherence and competitive edge. Franchisees leverage SEO to carve out a distinct presence amidst a crowded market, capturing the attention of prospective patrons scouring the web for their offerings. With each website, strategic keyword deployment and data-driven analysis, franchisees not only ascend the ranks of search engine results but also foster a devoted following within their communities.

Loyalty programs can generate brand advocates who will recommend the restaurant to their friends and family. By offering rewards such as discounts, free meals or exclusive promotions to repeat customers, franchisees can incentivize frequent visits and increase customer retention. Additionally, loyalty programs enable businesses to collect valuable customer data, including purchase history and preferences, allowing for personalized marketing

campaigns in the future. By engaging with customers through loyalty programs via email, mobile apps or in-store promotions, franchisees can foster a sense of community and brand affinity. Moreover, by highlighting the benefits of loyalty programs through targeted marketing efforts, such as social media campaigns or signage, franchisees can attract new customers while reinforcing loyalty among existing patrons.

Franchising allows operators to utilize corporate marketing in conjunction with their local marketing efforts to spread brand awareness of their business. QDOBA Mexican Eats franchisees approach local marketing by creating a customized marketing plan that caters to their local market(s). Each market is unique and requires a tailored approach to attract and retain customers. One way they approach local marketing is through local media outlets, such as newspapers and radio stations, to promote their business and reach a wider audience.

Keeping up with trends is essential to staying relevant in the fast-casual restaurant industry. Franchisees must also keep up with the latest technology and marketing trends to create innovative and effective marketing strategies.

“It's important for franchisees to talk to their customers and find out what is important to them,” Stokes said. “Handing out samples is a great way to do so.”

QDOBA franchisees employ a multifaceted approach to track the efficacy of their marketing campaigns. Utilizing a blend of digital tools and traditional methods, franchisees meticulously monitor customer engagement and conversion rates. Unique coupon codes and customized URLs enable precise tracking of campaign-driven sales, while QR codes facilitate seamless customer interaction tracking.

Franchisees can leverage customer surveys to gauge campaign awareness and effectiveness. By analyzing sales data, social media metrics and email marketing analytics, QDOBA franchisees gain invaluable insights into campaign performance, enabling them to optimize strategies for maximum impact. Through strategic partnership tracking and continual refinement, QDOBA franchisees ensure their marketing efforts resonate with their audience, driving growth and customer satisfaction.

QDOBA franchisees are finding success by using a combination of traditional and digital marketing strategies to promote their businesses. By leveraging social media, community events, targeted advertising loyalty programs and more, franchisees can build brand awareness, engage with customers and drive traffic to their restaurants. As the fast-casual restaurant industry continues to grow and evolve, business owners will undoubtedly continue to find new and innovative ways to market and stand out. Franchisees must know their target audience and understand their preferences to create a successful marketing strategy. The fast-casual restaurant industry is becoming more competitive, and franchisees must differentiate themselves from their competitors to stay relevant.

“Marketing is always evolving and that is why it has always been a challenge,” Stokes said. “Be current with how you communicate to your guests.” l

JARED JOHNSEN is the communications specialist for QFA. You may reach Johnsen at 678-439-2291 or jaredj@qdobafa.org.

Industry’s Response To Infation TheFast-Casual Restaurant

by Tyler Ryan

For the past few years, as America has attempted to bounce back from the impacts the COVID-19 pandemic had on the economy, inflation has been a persistent presence in people’s day-to-day lives. As of early 2024, Americans have been awarded some relief from rising prices of certain goods like gasoline, smartphones, household appliances, used cars, etc., but one expense has continued to break budgets: food/groceries.

Grocery prices have risen by 25% over the past four years. In comparison, overall inflation has reached approximately 19% over the same period. Anyone roaming the grocery store aisles looking for staple ingredients over the past several months was sure to see inflation in action; retail egg prices rose 8.9% in December 2023, and then another 1.8% in January of this year. The U.S. Department of Agriculture has predicted that all food prices will increase by 2.5% over the remainder of the year.

When it comes to meals away-from-home — food coming from sit-down establishments and quick-service restaurants (QSRs) to fast-casual restaurants — the Consumer Price Index (CPI) was 4.5% higher in February this year than it was in February 2023. Inflation in both grocery prices and away-from-home dining has shaped consumer behaviors in recent years, with industry publications like FSR Magazine and Nation’s Restaurant News reporting a widespread and ongoing drop in restaurant traffic and sales in 2023. The reality is clear as we move further into 2024 — many Americans cannot afford to go out to eat as much as they used to, and such a trend is bound to have an impact on not only sit-down restaurants but fast-casuals as well.

Studies have shown that the prices of quick-service and fast-casual menu items have continued to rise, even potentially outpacing inflation overall. Historically, deals, coupons and promotions have been offered to consumers to not only encourage increased traffic and loyalty to brands, but to also simply allow room on the menu for food that is more affordable to a wider consumer base. In 2024, it seems that even the menu items that were once designated as “low-price options” are becoming a thing of the past. (Remember when the Dollar Menu at McDonald’s actually had $1-items?)

For a brand like QDOBA Mexican Eats®, which prides itself on offering customers high-quality ingredients and highly customizable menu items, it is important to consider the ways the business may be impacted by all the changes taking place within the industry. As food prices rise and consumers’ willingness to eat away from home falls, restaurants need to be prepared for the potential transformations their menus may need to endure to adapt to this era of dining.

As franchisees of a brand that specializes in authenticity and customization, one has to consider how they might work to ensure their businesses can weather the storm that is inflation. How can the dining experience be improved to account for potential rises in the daily costs to guests? Are there any modifications, or even simplifications, that brand leadership may someday apply to menus to mitigate rises in ingredient costs? These are questions to consider as a franchise owner. It is best to be prepared for

any similar scenarios that may come to fruition if food costs don’t begin to decline sometime soon — and recent trends suggest they won’t.

At the higher levels of operations, there are several changes fast-casuals can make to respond to inflation in a way that allows them to preserve both profitability and the ideals that appeal to customers, like a commitment to quality ingredients, a wide range of flavors, the ability to customize orders to their hearts’ content, etc. Such changes can include:

• Menu Optimization – Fast-casuals can reevaluate their menu offerings to prioritize items with higher profit margins. This might involve streamlining the menu and removing less popular or less profitable items.

• Supplier Negotiations – Building strong relationships with suppliers and negotiating favorable terms can help fast-casuals mitigate the impact of inflation on ingredient costs. Bulk purchasing, long-term contracts and exploring alternative suppliers or ingredients can also provide cost-saving opportunities.

• Operational Efficiency – Improving operational efficiency can help fast-casuals reduce overhead costs and increase productivity. This might involve investing in technology to streamline ordering and food preparation processes.

• Marketing and Promotions – Creative marketing campaigns and promotions can help fast-casuals drive traffic and boost sales without relying solely on price adjustments. Limited-time offers can incentivize customers to visit fast-casuals even in the face of rising prices.

• Embrace Technology – Leveraging technology such as mobile ordering apps, self-service kiosks and delivery services can enhance the customer experience while also reducing operational costs.

Overall, the fast-casual and QSR industry is not immune from being impacted by inflation rates in the U.S. Like in any other industry, fast-casual restaurants must find ways to evolve alongside the state of the economy — and without sacrificing the unique qualities that separate their brand from others. As we move further into the year and food price increases persist, the QDOBA brand may very well find new ways to keep its menu items both accessible and enjoyable to its loyal consumers. l

TYLER RYAN is the communications editor for QFA. You may reach Ryan at 678-439-2300 or tylerr@elevanta.com.

THE PROCESS PRESSURE PRESSUREPOINTS POINTS

ARE PERSONAL PERSONAL

Much of what plagues organizations these days has to do with their processes. And the processes have everything to do with the personal processes of the individuals involved. (Read between the lines here: “organization” can refer to two people in a relationship, as well as a multi-national corporation.) Process vulnerabilities are challenged with stress, which is mounting daily in our world because of the increasing volume and speed of input that changes things. Most of you reading this have received more priority-shifting and project-creating stuff in the last seventy-two hours than your parents probably received in a month.

Change always produces pressure on a system, even if it is totally for the best. Because systems are created to match the needs, direction and outcomes of the organization at a certain point in time, when times change and those drivers are altered in any way, it puts stress on the organism until it adjusts appropriately. How well does it respond to new situations and input? What happens to the systems, the grooves, the procedures, when something out of the ordinary, something unexpected in substance or scope, lands on the radar? And not just the unexpected stuff out of left field – what happens when already-foreseen new goals and horizons are identified and tossed into the organization to implement?

Pressure on a system will always show up at the weakest connection points. Where are they, organizationally? The same places they are individually – avoidance of decisions; unclear, incomplete or non-existent communication; ambiguous accountabilities; and swollen inventories of potentially conflicting commitments.

One of the greatest sources of stress and saboteurs of productivity is mid- to senior-level people avoiding action decisions about situations when they first arise.

Example: A new situation occurs (a competitive product launched, a senior executive fired, a new regulation enacted, an irate neighbor, etc.) Someone is aware of the situation senses that something ought to be done about it, but doesn’t decide what, exactly, needs to be done. People who ultimately will need to know about the problem or issue to deal with it are not informed. There is a lack of clarity about who owns the resolution of the situation and therefore no one has their gut tied enough to it to move it to completion (amidst the chaos of everyone else’s current set of agendas). And anyone aware that they have some involvement with the situation or its impact feels the pressure of an “open loop” holding some piece of their psyche hostage, contributing further to overloaded circuits. This then leads that person to avoid action

decisions, and the whole cycle becomes contagious. Does any of this sound familiar to you, about something in your universe, as you read this? Virtually everyone I have ever coached has identified at least one if not several such scenarios going on, at that moment.

by David Allen

The insidious factor is that the faster things change, the easier it is for these unproductive and unhealthy syndromes to emerge and multiply. And the more senior the person involved in these lessthan-ideal practices, the more they are magnified in consequences for the culture, simply because his/her micro is a lot of other people’s macro. Ever been whipped around at the end of a chain of folks hanging on to each other on an ice rink? One of the greatest sources of stress and saboteurs of productivity is mid- to senior-level people avoiding action decisions about situations when they first arise; waiting until the heat gets so hot (from their boss, the client or the circumstances) to determine what needs to happen and who needs to do it; and at the last minute spewing the resultant crisis through multiple levels in the organization, creating pain, frustration and the derailment of process and morale.

The bad news is that this seems almost universal, in even the best of environments. The good news is that there are things that can be done to improve those practices. But it’s not handled by blaming individuals or preaching platitudes about productivity and quality. It can only be improved by a change in the behaviors of all the people involved. If physical and mental environments were kept cleaner, focus was more specific on discrete inputs, systems made seamless and more efficient and kick-start actions were determined and appropriately allocated on open items from the start, these weak spots in organizational process can be plugged up. Whole cultures can move themselves up the food chain in constructive responsiveness to change. We’ve seen this happen in varying degrees, depending upon the buy-in of the most visible players and whether those old dogs are willing to learn new tricks.

The most successful executives/professionals/people keep their decks clear, make decisions on the front end, dispatch the results to trusted people and systems, track commitments rigorously (their own and others’) and get physically engaged taking actions on the projects they own. Those are learnable behaviors, able to be systematized, that build capacity for dealing with the next surprise as the next opportunity. l

After decades of in-the-field research and practice of his productivity methods, DAVID ALLEN wrote the international best-seller Getting Things Done (GTD). Published in over 28 languages, TIME magazine heralded it as “the defining self-help business book of its time.” In 2015, he released a new edition of the book, with new insights, updates, and discoveries about the GTD methodology and its many personal and professional applications.

Avoiding The Gutter:

As a customer experience speaker, I often share how the smallest interactions can impact a customer's perception of a brand. It can be in negative or positive ways. A recent experience at a bowling alley brought this to light in an unexpectedly vivid way.

While enjoying an afternoon of bowling with my son, a seemingly minor interaction on the lane next to us caught my attention. A young man who was in his mid-20s was there with his girlfriend and he was struggling at the beginning of his first game.

After his third consecutive gutter ball, an employee happened to see this. The employee walked by and jokingly offered to put up the bumpers for him. In my mind, I found this to be rather amusing. It’s the same kind of joke I would make to a buddy of mine if we were bowling together, and he did the same thing.

At the same time, I realized how embarrassing this moment must have been for the guy in front of his girlfriend.

Having been a league bowler at this particular alley for the past year, I knew the employee who made the comment. I also knew her intention at that moment was light-hearted. Had this been a regular bowler at the alley, it likely would have been received very differently. Unfortunately, the man was clearly embarrassed. He likely found the experience to be rather emasculating.

I’m a big believer in having fun with your customers (when appropriate). You should always be on the lookout for opportunities to interact and connect with them throughout your daily work routines.

When I worked on Big Thunder Mountain at Walt Disney World, we’d see thousands of people every day. As cast members, we all tried our best to interact with as many guests as possible in the brief moments we had with them. We knew it was close to impossible to have a moment with every guest. But, with that mindset, we knew we had the opportunity to elevate the experience for a large number of guests every single day.

You should always be on the lookout for opportunities to interact and connect with them throughout your daily work routines.

particular setting resulted in a very embarrassed customer. Embarrassing your customer isn’t a winning strategy to build loyalty.

Critical Aspects of Exceptional Customer Service:

1. Empathy in Customer Experience:

by Danny Snow

Understanding your customer's feelings and situation while doing business with you is crucial. Connecting and having fun with your customers is a key component to building ongoing loyalty. However, your connection should be customized to each customer based on their unique situation. What might be a joke in one context can be embarrassing or hurtful in another.

Every interaction contributes to the overarching perception of your brand.

2.

Training for Customer Service

This particular interaction at the bowling alley illustrates a critical aspect of customer experience: reading the situation and understanding the customer dynamics. As I mentioned earlier, joking with a friend or one of their regular customers would have likely been received with laughter.

But, the same joke to a customer that you don’t know in this

Excellence: Proper training in customer interaction can help avoid these pitfalls. Employees should be equipped with the skills to engage in a positive manner with customers, recognizing the thin line between a light-hearted comment and one that might be offensive.

3. Building Brand Image and Customer Loyalty: Every interaction contributes to the overarching perception of your brand. Negative experiences, even if minor, can overshadow previous positive impressions.

The incident at the bowling alley serves as a potent reminder of the complexity of customer interactions. It's not only about what we say but understanding the broader context in which we say it. As businesses, it's our responsibility to cultivate an environment where our customers feel respected and valued at every turn. By fostering empathy, training employees and always considering the context, we can avoid embarrassing our customers and build lasting, positive relationships.

Our actions, no matter how small, can impact our customers’ perception and loyalty. Strive to make every moment with your customer count! l

DANNY SNOW is a sales and marketing director and professional speaker with over 10 years of experience in customer service, leadership and training. With a proven track record in driving business success and fostering strong teams, he specializes in helping organizations achieve excellence through employee development and exceptional customer service. Danny can be reached at www.snowassociates.com or at (407) 294-1855.

Thoughts on Excellence: Five Sustained Focused Efforts

by Dan Coughlin

Iused to think that businesses were remarkably complicated and beyond my comprehension.

Then I learned that I was wrong.

Businesses are remarkably simple. A business creates relevant value for an intended audience, charges for that value, and works to continually improve that value for that audience. That’s it. It’s not complicated at all. And it’s true for small, medium and large businesses.

I’ve also learned that there are a few things that all successful businesses have in common. One of those things is they sustain focused efforts.

The Crucial Role of Focus

The number one reason that I have seen why businesses fail is that people lose their focus. There are literally dozens of reasons why people let this happen. They chase a hot new idea that people are talking about, they get bored with what they are doing, they get tired of the infinite number of little challenges that they have to deal with as an entrepreneur, they start bickering with other people on the team, and on and on.

The number one reason why businesses succeed is that people sustain focused efforts. They keep on keeping on and they keep getting better at what they are doing. I’m always amazed at the incredible number of different ways that businesses provide value to customers and get paid for it. Please don’t fall into the trap of thinking you have to pick the perfect industry to be in. It’s not true. If you identify something that would be of real value for a certain group of people who are capable and willing to pay you for it, then you have the makings of a successful business. However, that’s just the starting point. The more important key to success is to wake up every day and sustain focused efforts.

I thought about giving you a very long list of the many, many different industries and methods that people I’ve known have used to make a very good living as entrepreneurs, but then I realized that’s not necessary.

What is necessary is for you to realize that one of the most important keys to success as an entrepreneur is to sustain focused efforts. You have to be wise with money and not go into the poor house through your own stubbornness. You may need to adjust the

value you are delivering or the audience you are pursuing until you find the true sweet spot where you are delivering relevant value for a specific audience who is capable and willing to pay for that value. You may need to improve to a point that what you are offering is truly better than your competition. However, over the long term the key is to sustain focused efforts.

When money is short, adjust your spending, but sustain focused efforts.

When a long-time customer decides to stop working with you, sustain focused efforts.

When a potential great customer decides to go with someone else, sustain focused efforts.

When you injure yourself playing pickleball because you decided you needed a break from too much work, sustain focused efforts.

When you feel lousy or worn out, take a vacation, give your mind a rest and then sustain focused efforts.

I encourage you to study successful entrepreneurs, people like Oprah Winfrey, Sam Walton, Steve Jobs or the person in your neighborhood who built a successful enterprise in any industry. One secret that will reveal itself to you is how that person sustained focused efforts over an extended period of time. l

Since 1998, DAN COUGHLIN has worked with serious-minded leaders and executives to consistently deliver excellence. He provides Executive Coaching, Leadership and Executive Development Group Coaching Programs, and seminars to improve leadership and management performance. His topics are personal effectiveness, interpersonal effectiveness, leadership, teamwork, and management. He also guides strategic decision-making meetings. And now he is also focused on helping people to develop their entrepreneurial mindset. Visit his free Business Performance Idea Center at www.thecoughlincompany.com

The Anatomy of EPLI for Franchises

Employment practices liability insurance protects your business from common claims and lawsuits brought by your employees. The number of lawsuits in the industry is rising and the cost to defend yourself against a claim can be substantial.

A quick anatomy lesson on employment practices liability insurance (EPLI) can help business owners understand:

• Why EPLI matters in the current franchise industry.

• How coverage protects your business.

• How to get the best price on coverage to protect your business.

The Heart of EPLI for Franchises

The heart of EPLI is the benefit that it provides to your business. Laws around fair treatment of employees in the workplace are complex and include numerous statutes. Even with the best of intentions, it’s possible to make a mistake that results in a claim. Workers in the industry have won six- and seven-figure settlements for claims of:

• Discrimination based on gender, age and other protected characteristics.

• Being passed over for promotion and career advancement opportunities.

• Denial of accommodation for pregnancy and other health conditions.

• Hostile work environment due to nicknames, jokes and mistreatment.

A claim with drawn-out litigation, a big settlement or significant publicity could do major damage and threaten the future of your business. EPLI is coverage designed to protect this core vulnerability of your business.

The Brain of EPLI for Franchises

The brain of EPLI is the method that it uses to protect you. A lot of thought goes into the design of coverage to help protect your business from the most common claims and reduce the overall risks you face, including:

• Discrimination – Such as claims of discrimination based on age, sex, family status, pregnancy, religion, national origin or disability status brought over hiring, firing or during the course of employment.

• Wrongful termination – Such as claims resulting from an employee being terminated due to layoff, policy violation or performance alleging discrimination based on age, race, religion, disability, pregnancy, hostile work environment, harassment, FMLA violations, or retaliation for pay disputes, whistleblowing or worker’s compensation claims.

• Sexual harassment – Such as claims of sexual harassment and other hostile workplace behaviors alleging inappropriate comments, questions, requests or physical interactions by supervisors, employees or other third parties.

• Wage and hour law – Such as claims for back wages, bonuses, pay discrepancies, employee misclassifications and denied overtime that may be brought individually or as part of a class action lawsuit over work contracts, job roles, job duties, pay scales and time sheets.

EPLI is designed specifically to cover the costs associated with the claims made against your business, including the cost of defending against allegations in court.

EPLI is designed specifically to cover the costs associated with the claims made against your business, including the cost of defending against allegations in court.

The Guts of EPLI for Franchises

The guts of EPLI are the factors considered when building your policy. Your insurer offers EPLI policies that take several factors into account to determine the cost of your premium and level of coverage. Factors often include:

• Number of employees – Much of the risk of an EPLI policy depends on how many employees need to be covered. The more employees you have, the greater the risk of a claim and the higher your premium.

• Rate of turnover – Businesses with higher rates of turnover can present a greater risk for wrongful termination and other key claims. Therefore, the premium may be higher.

• Policies and procedures – Having HR policies and procedures designed to prevent, address and correct employment issues can lower your premium.

• Risk by industry – Franchise businesses face an elevated level of risk. Due to a higher level of claims, premiums are often higher too.

• History of claims – Companies with EPLI claims made in the last three years may face higher premiums due to an increased risk. Those with a clear history will likely pay less for coverage.

• Policy limits – Higher limits mean the safety of more insurance but can come at the cost of a higher premium. With the cost of many claims reaching six figures, a higher limit is advisable.

• Policy deductible – A lower deductible transfers more risk to the insurer and results in a higher premium for the policyholder, but too high a deductible may leave you underinsured.

While not all the factors affecting the inner workings of your policy or your premium are within your control, some of them are. You can lower your premium by choosing policy terms, limits and deductibles that cover your exposures without going overboard.

EPLI for Franchises

The anatomy of EPLI works together to help protect your business from risk and reduce the frequency and severity of claims. With EPLI for franchises from co-brokers Elevanta and Lockton Affinity, your business is protected from the costs associated with employment practices claims should a potential, current or former employee file a claim against your business.

To see what Lockton Affinity’s EPLI coverage will look like for your business, visit Elevanta.LocktonAffinity.com. l

The Elevanta Insurance Program is administered by Lockton Affinity, LLC d/b/a Lockton Affinity Insurance Brokers LLC in California #0795478. Coverage is subject to actual policy terms and conditions. Policy benefits are the sole responsibility of the issuing insurance company. Coverage may be provided by an excess/surplus lines insurer which is not licensed by or subject to the supervision of the insurance department of your state of residence. Policy coverage forms and rates may not be subject to regulation by the insurance department of your state of residence. Excess/Surplus lines insurers do not generally participate in state guaranty funds and therefore insureds are not protected by such funds in the event of the insurer’s insolvency. Elevanta will receive a royalty fee for the licensing of its name and trademarks as part of the insurance program offered to the extent permitted by applicable law.

Employers Need to Review Workplace Rules and Policies Following Recent NLRB Decisions

OnAugust 22, 2023, we advised all employers – whether their workforces are unionized or not – about the National Labor Relations Board (NLRB) decision in Stericycle Inc. In Stericycle, the NLRB articulated its new standard in analyzing whether employer work rules are impermissible under the National Labor Relations Act (NLRA). Under the new standard, employers must use caution when creating a work rule or policy that could reasonably be interpreted to “chill,” restrict or prohibit an employee’s rights to protected concerted activity under Section 7 of the NLRA, such as an employee’s rights to support unionizing or engaging in concerted activity to improve working conditions. Such a rule will be presumed by the NLRB to be unlawful.

Since the Stericycle standard was announced, the NLRB has issued a series of decisions finding a wide range of work rules to be unlawful, ranging from prohibitions on insubordination to prohibitions on falsifying employment applications. What follows is a short digest of some of the work rules that have recently come under scrutiny by the NLRB.

Work Rules Concerning Disrespect

In United Electrical Contractors Inc., decided November 9, 2023, the General Counsel argued, and the NLRB agreed, that a prohibition on “disrespect toward supervision” violates the NLRA, because it could reasonably be construed by employees to prohibit protected concerted activity. The NLRB cited to Casino San Pablo for support, where the NLRB previously said, “the act of concertedly objecting to working conditions imposed by a supervisor, collectively complaining about a supervisor's arbitrary conduct or jointly challenging an unlawful pay scheme – all core Section 7 activities – would reasonably be viewed by employees as ‘disrespectful.’” The NLRB said the “disrespect” rule would reasonably tend to chill employees' exercise of their rights under the Act and under Stericycle is presumptively unlawful.

Work Rules Requiring Honesty

by Matthew Guerrero

Also in United Electrical Contractors Inc., the NLRB found rules requiring honesty on company records, including on employment applications, could reasonably be construed to chill an employee from leaving union-affiliated work history off of an application or falsely denying an intention to engage in organizing activity. The rule in that case did not refer to unions or unionization, but prohibited, “[d]ishonesty or falsification of any company records, including but not limited to employment applications and time entries,” and “[p]roviding false or misleading information to any company representative or in any company records, including the employment application, benefits forms, time entry, expense reimbursement forms and similar records.”

Citing to decisions that stood for the proposition that employees may lie about or omit their union employment or affiliation on applications, the Board found the above rules to be “overbroad” and stated that they interfere with the “rights of applicants and employees to falsely deny union affiliation or intent to engage in union activity, and to omit union-affiliated work history from their submissions.”

However, in General Motors LLC, decided January 24, 2024, the NLRB found a similar rule not to be overbroad and therefore legal. The rule there stated that “[f]alsification of personnel or other records” will be sufficient grounds for disciplinary action. In analyzing the work rule, the NLRB found that “no employee, though economically dependent on the employer and contemplating engaging in protected, concerted activity, would reasonably interpret the plain language of [this rule] to prohibit protected, concerted activity.” The NLRB further noted that the rule’s intent is to prohibit the falsification of personnel and other company

records, which the Employer had a legitimate interest in ensuring are accurate.

Because these two rules are very similar, employers need to narrowly tailor their work rules regarding honesty. The major difference between the two rules is that the improper rule in United Electrical Contractors Inc. explicitly referred to honesty on “employment applications” without creating an exception for union affiliation or union-related work history.

Work Rules Prohibiting the Restriction of Production

Also in United Electrical Contractors Inc., the NLRB found a work rule that prohibits, “[r]estricting production or influencing others to do so” unlawful. “I find that employees would reasonably construe the prohibition on ‘restricting production’ to encompass a prohibition on striking and picketing,” said the NLRB. Employees have a right to engage in those activities under Section 7 of the NLRA.

Prohibitions on Obscene or Abusive Language

Additionally, a rule against using obscene or abusive language was found to violate the NLRA because the rule was drafted “without stating that the rule was not intended to bar employees' Section 7 activity.” “The rule does not provide any additional context showing that it is meant to address only language that involves violence or other unlawful conduct or that it does not prohibit Section 7 activity. I find that a reasonable employee would understand this rule to interfere with statements that are protected by the Act.”

Employers should be aware that the NLRA has routinely decided that some profanity and even defiance must be tolerated. The NLRA protects employees even in instances where the employee is rude or disrespectful, and profanity will not bar an employee from invoking their rights under the NLRA. See, for example, NLRB v. Chelsea Laboratories

Prohibitions on Use of Telephones

Employers have to be careful in limiting employee cell phone use. “On its face,” said the NLRB on such a rule, “this rule gives the employer unfettered discretion to decide if an employee may use their personal phone at any time and in any area of a facility, including during breaks and other periods that are an employee's own time. Employees would reasonably conclude that they could not, without obtaining the [employer's] authorization, engage in activities such as using their own smartphone to call a union representative during a lunch break.”

The work rule in question, which simply prohibited “[u] nauthorized use of telephones” was thus found to be unlawful. The General Counsel argued, and the NLRB agreed, that “requiring an employee to seek the approval of management in order to use their personal phones for Section 7 communications is tantamount to surveillance of such activities, and would tend to have a chilling effect on employees' exercise of their rights.”

Prohibitions on Discourtesy to Customers, Vendors, or the General Public

Citing to precedent, the NLRB also recently said that employees would generally construe a broad prohibition against “disrespectful” conduct and “language which injures the image or

reputation” of the employer as encompassing Section 7 activity, such as employees' protected statements objecting to their working conditions or seeking the support of others to improve them. The rule, which prohibited “[d]iscourtesy to a customer, vendor, or the general public resulting in a complaint or loss of good will” was deemed unlawful.

A similar rule more recently in General Motors LLC, which stated discipline could result from “making or publishing of false, vicious or malicious statements concerning any employee, the Company, or its products” was found to be unlawful. Citing to precedent, the NLRB said that the Board has consistently found that rules prohibiting the making of “false, vicious or malicious statements” violate the NLRA because “they include within their proscription false statements that may nonetheless be protected.” In other words, the prohibition on “false . . . statements” is too broad. For, in the same decision, General Motors LLC, the work rule that discipline could result from “[a]busive language to any employee or supervisior” was lawful. The distinction is that the prohibition on false statements could reasonably relate to and deter an employee from engaging in their right to protected, concerted activity, but a similar prohibition on “abusive language,” without any further context, would not reasonably chill an employee’s protected speech.

What Employers Can Do

In the confusing wake of Stericycle, employers are often left not clearly knowing whether their work rules may be deemed presumptively unlawful under the NLRB’s current standards. Employers, however, are not left without some guidance. First, the more narrowly tailored their work rules are to legitimate and substantial business interests, the less likely they will be deemed unlawful. Even presumptively unlawful work rules can survive scrutiny where employers can show that the work rule “advances a legitimate and substantial business interest” that cannot be advanced “with a more narrowly tailored rule.”

Employers must use careful language and draft their work rules with an eye toward how the NLRB may view it. As seen above, very broad language can be interpreted to encompass and impede upon an employee’s Section 7 rights. All employers should be reviewing existing work rules to determine whether they can be construed as unlawful under the Stericycle standard and revise them as needed. Caveats that a policy or work rule is not intended or designed to impede upon an employee’s Section 7 rights can also aid employers in keeping their policies and handbook provisions lawful. Additionally, avoiding anti-union language anywhere throughout an employer’s policies and handbooks will also help avoid an interpretation that any given rule is designed to chill employees’ Section 7 rights.

If you have questions about how to comply with the recent NLRB decisions, contact your servicing Laner Muchin attorney, or Laner Muchin partner Robert T. Bernstein may be reached at rbernstein@lanermuchin.com. l

LANER MUCHIN is a firm that specializes in employment-related litigation, labor relations, employment law counseling, employee benefits, executive compensation and business immigration matters. Laner Muchin may be reached at www.lanermuchin.com or (312) 467-9800.

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