As cities and states begin to reopen for business, franchisees are laying out their plans for operating in a new socially distanced world, where coronavirus remains a risk.
Beyond worrying about the safety of workers and guests, there are potential liability concerns and the biggest question of all: will consumers feel safe enough to patronize restaurants, hair salons and other businesses that bring people in close proximity to one another. To improve the odds, business owners are getting creative.
Daniel Halpern owns 35 TGI Friday’s restaurants across the country from Los Angeles to the Carolinas, as well as 15 airport locationss. He’s preparing to reopen his first store for dining in Georgia this Tuesday with “cautious optimism.”
Halpern said he’s taken cues from the government’s guidelines and will have his restaurants outfitted with proper personal protective equipment, sanitizing equipment and temperature checks for workers and guests, but he recognizes more might be needed to persuade cautious diners back in.
“One of the things that we’re going to do is require our guests to wear a mask. If they don’t have a mask, we’ll sell them a mask. If they spend over a certain amount of money in the restaurant, we’ll certainly give them the mask for free,” Halpern said. “We want to protect the health of our guests, we certainly want to be kind of a value-added participant in the country of trying to reduce the curve.”
Aside from that, Halpern said his restaurants will work to earn the trust of guests back again.
‘Time and trust’
“I think we have a lot of repair to do. Delivery sales and takeout certainly have grown significantly, and we hope that that continues, but I think we’re going to slowly but surely build our in-store guests through time and trust,” he said.
The latest read on optimism from the National Federation of Independent Business last week showed another steep drop in sentiment for the month of April, but small business owners said they expect the economy to improve over the next six months. So while things are tough on Main Street, there’s hope that operations will improve as time goes on.
Restaurant transaction data also supports a shift toward the positive, according to NPD Group. For the week ended May 10, restaurant chain transactions improved for the fourth consecutive week, down 23% overall, compared with a 26% drop the week prior.
There are 19 states allowing some level of on-premise dining. The researcher said “open states” performed eight points better than the remaining U.S. in the week reported, underscoring the idea that gradual reopenings may be met with some pent-up demand.
“Permanent restaurant closures, economically distressed consumers and the possibility of a second wave of virus cases still bring uncertainty, but at least for now, the recent run of weekly gains is encouraging,” said David Portalatin, NPD food industry advisor, in a statement. “The road back will be challenging and slow, but we’re headed in the right direction.”
‘A receptionist on steroids’
At James Cummings’ Great Clips franchise locations, some guests may be faced with a new reality: “hair traffic controllers” running point on social distancing guidelines.
Cummings has 46 locations in North Carolina, Kentucky and Tennessee, where both employees’ and customers’ health will be monitored.
“We’ve turned our shampoo bowls into hand washing stations so you can wash easily between every customer,” Cummings said. “We’ve added plexiglass to the checkout counter and have spots on the floors to encourage social distancing.”
One of the biggest changes was the creation of a new hair traffic controller role.
“It’s like a receptionist on steroids or a bouncer at the club,” Cummings said. “It’s making sure we get this right — training our employees on the new processes, educating the customers on the new expectations — and doing that in a thoughtful, professional way. Moving forward through this together, not rushing and making a mistake.”
Another unknown for both franchisees is how the Paycheck Protection Program forgiveness will shape up.
Halpern and Cummings were able to access PPP loans, but are looking out for more guidance and potential changes to the program being proposed around forgiveness timelines and what the capital can be used for under the program. The Small Business Administration and Treasury Department released a forgiveness application on Friday, but promised more guidelines for lenders and borrowers to come. Round two of the PPP is still funded, with 2.76 million loans made for a total value of $195 billion.
“I’m just not willing to jump into that PPP game without knowing the rules,” Cummings said. “It would be like asking a football coach to play the first half of a football game where you don’t know the rules. And then the referees are going to get together at halftime, and they’re going to say, they’re going to decide the rules, and then you get to play the second half to decide whether you win, which is loan forgiveness, or you lose, which it gets converted into a two-year loan. So I want to know the rules. And we’re going to be patient.”