Chain Operators Look for Ways to Help Employees and Stay in Business

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Besides finding ways to stay open and serve their communities, restaurant chains are responding to the COVID-19 crisis in various ways.

With 44 states and Washington, DC, limiting restaurants to pick-up and delivery service only, chains are developing programs to protect employees and continue business. 

Examples abound: Darden Restaurants is providing paid sick leave for all hourly workers across its restaurant chains. The company said March 23 that it has been working on the policy for a while, but sped up the process due to the COVID-19 outbreak. 

Darden Employees will accrue one hour of sick leave for every 30 hours worked. Current employees can use the benefit immediately, and their starting balance is based on their most recent 26 weeks of work. In addition to Olive Garden, Darden operates Longhorn Steakhouse, The Capital Grille, Eddie V’s, Cheddar’s Scratch Kitchen, Yard House, Seasons 52 and Bahama Breeze.

Other chains have developed programs to mitigate employee dislocation. Chili's has established an emergency relief fund for team members and an emergency sick pay program. Starbucks workers who continue to come to work at the chain’s open locations will get an extra $3 an hour in "service pay" through April 19.

In operational terms, free delivery has become the order of the day as chains try to build some business. Such chains as Buca di Beppo, Moe's Southwest Grill, Outback Steakhouse, P.F. Chang’s, Chili’s, Red Lobster, Ruby Tuesday and many others are offering free delivery depending on the amount of the order.

Discounts to get customers used to the new reality are becoming common. Mellow Mushroom is offering 10 percent off pick-up through April 30 and free delivery where applicable. The Cheesecake Factory is adding a free slice of cheesecake with any online pick-up order of $30 or more through April 16. Olive Garden is offering a "buy one, take one" offer of a hot, ready-to-eat meal and one packed for later for curb-side pick-up. 

Some operators are getting creative in looking for ways to stay afloat: One wartime tactic is back as establishments are issuing dining bonds, which work like discounted gift cards, purchased now and redeemed for a higher value after a specified date. In Southern California, at least two dozen bars and restaurants have joined a program called the Dining Bond Initiative. Atlanta fast-casual chain Gusto began selling bonds online in which customers spend $100 to receive $150 in restaurant value or $200 to receive $350 in value. Gusto raised more than $20,000 in bond sales by March 24. 

Some restaurants are turning into grocery stores. Frisch’s Big Boy, a quick-service chain in Kentucky, Ohio and Indiana, is opening its locations as Big Boy’s Markets to sell milk, produce, bread, sugar, cereals, ketchup, mustard, bottled water as well as Frisch’s tuna salad and one of the scarcest commodities: toilet paper. Last week, 100 locations transitioned to grocery stores, allowing customers to shop by drive-through or for delivery.

Unfortunately, the crisis broke the back of at least one major chain operator. CraftWorks Holdings, the parent of Logan’s Roadhouse and Old Chicago Pizza, furloughed thousands of employees and closed its restaurants after the outbreak ruined its bankruptcy plans. The brand had planned to sell its 261 company-owned locations. The furloughs included most of Craftworks’ 18,000 employees.

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