The issue with visibility
Ask any emerging restaurant operator their greatest fear and you’ll likely to hear the following: I won’t be able to see what’s happening, every day, at every store, if we grow or franchise. It’s arguably the biggest challenge to becoming a multi-unit organization. It’s tough to let go of something that might as well be related to you.
Only one in three of those surveyed by Zenput said they had “very clear visibility” into individual restaurant compliance with operating procedures, standards, and the rollout of new initiatives.
The inability to track compliance, Zenput said, is only part of the problem, though. If restaurant operators can’t peer into day-to-day workings, they can’t find out about routine problems—including ones that could easily be resolved. By the time they do, the small issue has become a big one, and a nuisance is now a threat.
We’re talking things like broken equipment, dirty restrooms, and incorrect signage. While these should be a quick fix, they can have lasting and negative impacts on your brand when left to fester. Forty-six percent of respondents said it takes anywhere from one to four weeks to address store issues once identified. Perhaps even more concerning, Zenput said, is the response time as it pertains to food safety issues—when the ability to act fast is absolutely essential.
On that food-safety note
We don’t need to go too deep into Chipotle’s past issues, but it’s worth noting one example. If you go back to the summer of 2017, long before Brian Niccol entered the picture, Chipotle founder Steve Ells was left addressing a Sterling, Virginia, incident that affected more than 130 customers. He explained the norovirus flare up like this: “We have isolated the failure that occurred. It was a failure in one restaurant to comply with our procedures to prevent norovirus.”
That last point is exactly what Zenput is preaching. Without real-time visibility, it’s easy for food safety to slip through the cracks. Only half of respondents said they were “very confident” in their ability to identify potential food-safety concerns before they become an issue. “That’s staggering given the fact that just one well-publicized bad experience in a single store can undermine your entire brand and negatively impact sales across all locations,” Zenput said.
Zenput said the effectiveness of store audits are partially to blame. Only 26 percent of restaurant operators said audits were performed “very effectively” in terms of timeliness and issue resolution despite committing what seems like adequate time and resources to the task.
In fact, operators reported that field personnel spend anywhere between 4–10 hours (or more) per week conducting, reporting on, and tracking audit-related issues.
So if restaurants are dedicating a reasonable amount of time and talent to audits, and still don’t feel comfortable, what’s going wrong?
Scale, for one, slows the process down. When looking across restaurant segments, 76 percent of smaller franchise operators (those with 10 or fewer stores) said they were “very confident” in their ability to stay ahead of potential food-safety issues. Larger brands, however, were less certain—only 48 percent of franchisees with 10 or more stores, and 33 percent of corporate brands (those with 50-plus locations) felt confident in their ability to avert a food-safety crisis.
This is kind of the rough reality of a multi-unit system once it blossoms. But, ultimately, the biggest underlying failure, Zenput said, appears tied to visibility and communications. The more stores you manage the harder it is to quickly disseminate information and verify compliance, at least using traditional manual solutions.
Why is this such a big deal? According to a Johns Hopkins Bloomberg School of Public Health study, the cost of a single foodborne illness outbreak at a fast-casual restaurant could cost upward of $2.5 million depending on the severity of the outbreak, the amount of lawsuits, fines, and legal feels, as well as the number of employees and guests impacted.