How We Have Overcome Our Daunting Ops Challenges
We used to have just one DM supervise all our locations. Now we have two top-quality, very well paid DMs and are searching for a third because we just opened a new store and will soon open more.
Incentivizing ambitious and capable DMs and GMs to move to small towns is expensive, but we believe this to be well worth the costs. All QSRs benefit from more frequent visits from talented DMs, and ours spend virtually all their time in the stores or traveling to them. Their hard work results in hiring, training and supervising higher quality GMs who in turn hire, train, manage and engage higher quality shift managers and staff.
Another key factor is that our workers receive higher hourly wages than the workers of other QSR chains in our markets. In addition, we offer health insurance, meal discounts, tuition scholarships and we award bonuses to employees who qualify. Since we now have higher quality managers in place to train, mentor and guide them, our workers are earning their relatively high compensation by increasing throughput, producing more consistent food quality and delivering fast, friendly customer service. This results in happy customers who add to our employees’ compensation by tipping generously.
Potential Directions to Scale Our Company in the Future
Just because we thrive in small metros and are passionate about becoming an important part of our communities doesn’t mean we want to remain a relatively small chain. Since we have finally overcome most challenges associated with small metro locations, we look forward to growing faster.
Currently, we continue to open new stores in New England and Eastern upstate New York. However, we are beginning to explore opening clusters of company-owned stores in different parts of the country.
Another direction we’re exploring is growing our business through franchising in new regions of the U.S.
Franchising is not new to us. We have had one franchised store for 12 years that is just as successful as our other stores. We believe our small metro business model could be a great addition to the portfolios of both multi-brand franchisee groups and independent franchisees.
The Works Café may someday become a well-known national brand, but that is not our primary vision. Our goal is to become a popular, well-respected local brand in small metros in different regions.
We have noted that it can be very challenging to supervise stores that are located far apart from one another. Here is one of the methods we’re exploring to help us grow in new regions while maintaining our high culinary and customer service standards.
Surveillance cameras are common in fast casuals. They are often utilized to identify or prevent inappropriate actions among store-level personnel. Aside from giving employees the impression they are working in a big city police state, tracking employee behaviors can be effective. But working in a setting where it feels like one is being watched, rather than trusted, isn’t appealing – especially in small metros where locals often trust their neighbors.
Why not expand the video camera functions and change their in-house branding and scope? Why not also use them to catch employees doing something right or extraordinary? Then recognize and reward workers with cash bonuses, desirable prizes and storewide recognition for their achievements. We are currently exploring this dual concept we call “Bonus Camera branding” by trying to answer these questions.
Conclusion and Takeaways
It is inevitable that some of the rapidly expanding fast-casual chains that currently focus on major and mid-sized metros will eventually try new locations in nearby, but separate, small metros. They may succeed if they:
- Possess or adopt appropriate branding
- Are willing and able to make the needed substantial HR investments
- Have unusually robust environmental sustainability policies and practices such as recycling and composting
- Feature at least some food options, including locally sourced ones, that make them stand out from competitors
- Offer broad menu selections like those found at Chipotle and Panera, unless their chains focus on America’s most popular foods: burgers, chicken and pizza
We are proud that at The Works Café we’ve learned to optimize the numerous advantages and mitigate most of the challenges associated with operating a fast-casual chain in small metro markets. The foundation of our success is the strong overall company culture we have built and expanded on in each individual location.
Richard French worked in his father’s restaurant, which was located in a small metro, throughout his childhood. After graduating from The University of Vermont, he became a serial entrepreneur by starting three innovative catering businesses. He then moved back to his hometown of Manchester Center, Vermont, to open his first fast casual, The Bagel Works. Over the last 35 years, he has expanded his business by opening new stores in other small metros and evolving his business model. Richard is slated to speak at QSR’s Evolution Conference in September.
Stuart Skorman is a serial entrepreneur who has started 12 businesses in nine different industries. He sold five of his start-ups to Fortune 500 companies. His favorite start-up was a chain of video stores that generated the highest AUVs in that industry. His stores were located in some of the same small metro areas as The Works Café. In fact, Stuart met Richard and began working with him because their first locations were next to each other. Stuart grew up in Ohio working at his father’s chain of discount stores that were also located in small metros.