Fast-casual barbecue chain Mighty Quinn’s adopted its delivery and takeout program more than three years ago in anticipation of franchising and the overall trends it saw in the industry.
The proactive mindset proved crucial once the pandemic hit, especially considering eight of the brand’s 12 units are temporarily closed due to their location—Yankee Stadium, Madison Square Garden, Wall Street, Times Square, and malls.
“We’re hopeful that we start seeing people filling up those office buildings again,” CEO and co-founder Micha Magid says. “My best guess is probably tourists don’t start traveling until next year.”
The four open stores transitioned seamlessly to off-premises only, he says.
To better execute the new style of operation, Mighty Quinn’s streamlined the menu by focusing on higher-selling items and reducing lower-selling ones to ensure everything is as fresh as possible. The chain started offering family meals and Cryovac sealed brisket and spare ribs—with reheating instructions—for customers who are concerned about employees handling food. Moving forward, the brand is considering selling products at grocery stores as another revenue stream.
In April and May, volume increased weekly. The brand has seen a 50 percent increase in sales compared to what it experienced when the pandemic initially hit.
Magid says the decision to keep four stores open was twofold.
“We wanted to have our team and jobs working and not freaking out about what’s going to happen to the restaurant industry,” Magid says. “The second thing we did was we really wanted to support our communities when the pandemic hit and the most obvious way to do that was to start feeding the hospital teams who are really working around the clock.”
To his point, Mighty Quinn’s has offered a free sandwich to hospital employees and donated more than 6,000 meals in the past few months.
Mighty Quinn’s still has an eye on growth, as well. Two franchised locations are expected to open this year, including one next month in Long Island. Next year, three to five stores are projected to open.
Magid says the real estate market will benefit restaurants post-pandemic because of less saturation, and the site selection process will heavily consider the viability of off-premises.
“I think the dining rooms, despite social distancing, will actually be shrinking,” Magid says. “You just don’t need the number of seats anymore. And that was a trend we saw moving pre-pandemic with the shift to off-premise dining. So I think we’ll still focus on areas that have worked for us historically, but we’ll be thinking about logistics of deliver couriers, the number of dining room seats that are actually needed to hit sales numbers, and in addition, how we can become part of the community in a way that’s supportive. Obviously just being a restaurant that’s providing food, but also participate in things like support structures of those neighborhoods like hospitals, community centers.
In regard to temporary closures, Magid says, his team is doing its best to stay in touch with core employees who were laid off. They’ve told workers that once there’s more visibility on reopening, their job is available.
However, rehiring won’t come without its obstacles.
“One of the challenges has been that we are effectively competing with the unemployment dollars that Congress has put through, which in some cases with the additional $600 is actually more than full-time employees could be making with us,” Magid says. “That’s been an impediment obviously in bringing those people back, so it’s one of those weird things where they put the CARES Act through to encourage employment, but they also simultaneously started a fund that competes with your ability to reemploy. That would be an interesting dynamic that we’re dealing with.”
The additional $600 per week is set to end July 31. Right now, lawmakers are debating whether to extend the benefits. Republicans are against an extension because of how it may deter employees from returning to work. Democrats say it’s too early to pull benefits because of current unemployment levels; they wish to extend the enhancement to the end of January. According to a report by the Congressional Budget Office, five out of six workers would make more money on unemployment compared to their full-time job if the deadline was extended.
Another area of business that has received much attention during the pandemic is the relationship between restaurants and third-party delivery providers.
Operators are upset with fees that sometimes reach 30 to 40 percent. In response, several cities have instituted emergency caps like Los Angeles, New York, San Francisco, Seattle, Washington, D.C. and more.
Magid says the cut in revenue is becoming unmanageable for restaurants. He explains that conversely, third-party companies have an operating model that can’t sustain lower commission rates.
That’s why consolidation is happening, the barbecue chain co-founder notes. Just Eat Takeaway, a European food delivery company, recently acquired Grubhub for $7.3 billion. Grubhub previously considered merging with Uber, but talks fell through due to antitrust concerns.
“When these guys consolidate, we view that as a good thing if they’re able to cross off overhead to make their commission rates lower to allow them to operate profitably, which would then in turn allow restaurants to be more accommodating to third-party networks because now all of a sudden you can afford them,” Magid says. “So it becomes a win-win for both sides of the transaction.”
As for on-premises business, Mighty Quinn’s dining rooms remain closed. The stores are based in New York and New Jersey, which have been two of the most cautious states in terms of easing dining room restrictions.
Although it’s frustrating, Magid says his team understands that safety comes first.
“We recognize, even when you read the paper, the people who are in charge of understanding this virus are giving us new information each week,” Magid says. “If you’re a politician that’s digesting this hourly flow of new information, I think you have to operate with an abundance of caution. Because the worst outcome would be reopening the economy and then having to shut it in the fall with a spike in infections. That would be the worst-case scenario. It’s not pleasant and it’s something that’s going to hurt across the board economically, but I think that operating with an abundance of caution and extending the lockdown for an additional 30 days far outweighs the pain that would be caused by shutting down the economy again.”