October 27th QSR Roundup: The Hidden Cost of High Turnover and Healthcare in Fast Food – and How to Fix It

Interviewy Team

Interviewy Team

— 6 min read
QSR news for Oct 27th, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 16 articles to bring you the latest. Estimated reading time saved (at 200wpm): 97 minutes. It'll take you only 8 minutes to catch up.

Rising healthcare costs are significantly impacting both franchisors and franchisees, leading to struggles in maintaining operational excellence, employee satisfaction, and customer experience. Healthcare premiums are surging due to double-digit hikes, staffing shortages, and inadequate insurance coverage options. Employees with high-deductible health plans often become functionally uninsured, resulting in absenteeism and decreased productivity.

Employee turnover in hourly fast-food positions can reach a staggering 225-500%, with recruiting and training expenses costing approximately 33% of an employee’s salary. To combat this, a “Culture of Health and Caring” is emerging as a solution, focusing on enhancing employee loyalty and engagement by prioritizing well-being through wellness programs and mental health support.

Innovative healthcare models like Revive are offering cost-effective, accessible primary and mental health care without out-of-pocket expenses, promising to combat healthcare cost inflation and improve overall employee health. Franchise leaders need to act now to foster transformative cultural change, ensuring long-term business success and a healthier workforce.

Sources:

  • QSR Magazine: Franchise Healthcare Challenges

Tech Transformations in Quick-Service Restaurants

The quick-service restaurant (QSR) industry is embracing technology to enhance customer experience and operational efficiency. With 37% of Americans consuming fast food daily, the reliance on QSRs for quick meals is substantial.

Connected products like self-service kiosks and AI-driven systems are significantly enhancing operations. However, not all tech adoptions are smooth. McDonald’s AI ordering experiment faced challenges, with customer interactions not meeting expectations. In contrast, Shake Shack’s kiosks doubled sales by embracing user feedback during the pandemic.

Domino’s streamlined ordering with Pulse POS, noting that online orders are 25% higher than phone orders, improving efficiency and revenue. Chick-fil-A employs a “Buy or Build” strategy for technology, balancing in-house development with external solutions. Ensuring device reliability is critical; issues like payment terminal failures can lead to frustrated customers and lost sales.

While technology reduces human error and enhances operational costs, QSRs must prepare for potential complexities in device management.

Sources:

  • QSR Magazine: Tech Transformations in QSRs

Rising Food Recall Anxieties Among Parents

Parents are increasingly anxious about food safety due to a surge in food recalls, particularly involving contaminated products like frozen waffles and meat. Recent recalls have affected nearly 12 million pounds of food, often alarming parents who feel a loss of control over their children's diets.

Experts suggest staying informed through official recall alerts and employing practical safety measures at home. Parents are encouraged to reconsider reliance on processed foods and hold corporations accountable through collective action, emphasizing their power in advocating for stricter food safety regulations.

Sources:

  • Salon: Rising Food Recall Anxieties

Exciting New Food and Beverage Launches

Pop-Tarts introduces Frosted Marshmallow Hot Cocoa flavor, available for $3.89, perfect for the holidays.

Nestlé Toll House launches Cookie Nachos with customizable kits, featuring cookie dough and toppings, starting November 6.

REBBL unveils 26g Protein Shakes in three flavors—vegan and Non-GMO, available at Target.

Whole Moon presents new plant beverages made from whole almonds, oats, and pistachios, delivering complete protein, priced at $5.79.

Feel Good Foods offers the first gluten-free chicken soup dumplings, with microwaveable convenience, available nationwide.

Chosen Foods introduces Avocado Oil Shortening, versatile and pure, retailing for $10.99 to $12.99.

Nature’s Path launches an organic flour line with multiple varieties for health-conscious baking.

Sources:

  • Food Industry Executive: New Food and Beverage Launches

Challenges and Insights from Restaurant Owners

Third-Party Delivery Dilemmas

A family-owned bar and grill in Milwaukee considers adding third-party delivery services like DoorDash and Uber Eats to increase revenue but raises concerns about food quality, kitchen capacity, and customer service control. Experienced restaurateurs advise caution due to:

  • High Commissions: Up to 30%, impacting profitability.
  • Food Quality Issues: Items like fries and sandwiches may arrive soggy.
  • Kitchen Capacity: Managing additional orders during peak times can strain operations.
  • Tips Distribution: Third-party apps often do not offer tips to kitchen staff.
  • Alternative Solutions: Suggestions include using platforms like ChowNow or creating a ghost kitchen.

Sources:

  • Reddit: /r/restaurantowners - Third-Party Delivery Insights

Understanding Restaurant Failures

A Reddit discussion explores why many restaurants fail, highlighting common pitfalls:

  • Poor Management: Lack of necessary restaurant experience.
  • Financial Mismanagement: Underestimating expenses and overestimating profits.
  • Location Challenges: A bad spot can doom an establishment.
  • High Rents and Labor Costs: Economic strains post-COVID.
  • Market Mismatch: Owners imposing culinary preferences without assessing demand.
  • Owner Involvement: Direct engagement in daily operations is crucial.
  • Adaptability and Marketing: Failure to adapt to trends and lack of targeted strategies.

Running a restaurant is a challenging endeavor requiring more than culinary talent; it demands strong business acumen.

Sources:

  • Reddit: /r/restaurantowners - Reasons for Restaurant Failures

Dealing with Scammers in the Digital Age

Restaurant owners face challenges with scammers exploiting platforms like Grubhub. One owner describes a persistent scammer who orders food, falsely claims he received the wrong order, and obtains refunds. Despite checking cameras and realizing the scam, stopping him is difficult as he creates new accounts.

Advice includes:

  • Refusing Service: Denying orders from known scammers.
  • Documenting Scams: Keeping a record for potential legal action.
  • Trespassing: Legally prohibiting the individual from the premises.
  • Law Enforcement: Considering involving the authorities for theft.

Many face similar issues due to app policies that facilitate these scams.

Sources:

  • Reddit: /r/restaurantowners - Dealing with a Grubhub Scammer

California Type 40 Beer License Challenges

A restaurant owner in California faces challenges with a Type 40 beer-only alcohol license but does not wish to sell beer due to personal beliefs. Commenters note:

  • Value of License: Difficult to sell and has little value compared to others.
  • Profit Maximization: Serving alcohol is key in maximizing profit and attracting customers.
  • Business Viability: Turning away sales due to personal beliefs may not be advisable.

Sources:

  • Reddit: /r/restaurantowners - California Type 40 Beer License Questions

Choosing Between Bonefish Grill and Chili’s

A restaurant manager is torn between job offers from Bonefish Grill and Chili's. Considerations include:

  • Bonefish Grill: More laid-back, upscale atmosphere, closer to home, higher bonus opportunities.
  • Chili's: Higher salary but a more intense, party-like environment.

Commenters predominantly favor Bonefish Grill for its calmer vibe and potential for better management training. Chili's is often seen as more stressful.

Sources:

  • Reddit: /r/Restaurant_Managers - Bonefish Grill vs. Chili’s

Fast Food News and Customer Experiences

No Free Taco Bell in 2024

Taco Bell discontinues its 'Steal a Base, Steal a Taco' promotion for the 2024 World Series, sparking disappointment among fans. Commenters express:

  • Disappointment: Fans mourn the loss of free tacos.
  • Alternatives: Mention of other deals like Van Leeuwen's $3 ice cream scoop and Chipotle's free guacamole for Expos fans.
  • Speculation: Belief that Taco Bell is avoiding risk tied to game outcomes.

Sources:

  • Reddit: /r/fastfood - No Free Taco Bell 2024

The Ruby Tuesday Dining Experience

A Reddit user shares a humorous incident where a cucumber slice at Ruby Tuesday resembled a face. The post sparks:

  • Negative Experiences: Many share dissatisfaction with food quality and service.
  • Menu Changes: Complaints about recent changes and presentation.
  • Nostalgia: Some reminisce about better past experiences.

The consensus suggests that Ruby Tuesday's experience isn't what it used to be, blending humor with frustration.

Sources:

  • Reddit: /r/restaurant - Ruby Tuesday Dining Experience

Insights for Aspiring Restaurateurs and Staff

Opening a Seasonal Restaurant

An individual considers opening a summer restaurant serving authentic Spanish food. Reddit users highlight challenges:

  • High Failure Rate: 85% of restaurants fail within three years.
  • Seasonal Limitations: Operating only in summer may not attract locals or sustain profitability.
  • Staffing Issues: Attracting and retraining seasonal staff impacts quality.
  • Business Acumen: Success requires a solid business plan and market understanding.
  • Potential Success: If executed well, Spanish cuisine could thrive in areas like Cape Cod or Boston.

Sources:

  • Reddit: /r/restaurant - Opening a Summer Restaurant

Tackling Restaurant Staffing Challenges

A diner waits nearly an hour for a chicken salad sandwich in a busy family restaurant, suggesting the need for more cooks. The incident highlights:

  • Operational Challenges: Mistakes and delays can happen during peak times.
  • Communication: Importance of addressing issues promptly with staff.
  • Economic Balance: Hiring more staff may lead to increased prices.

The situation underscores the complexities of restaurant operations and customer expectations.

Sources:

  • Reddit: /r/restaurant - Restaurant Staffing Challenges

Advice for Nervous First Day on the Job

A new server feels overwhelmed on their first training day. Experienced servers advise:

  • Normalizing Nerves: Feeling uncertain is common and will subside with experience.
  • Practice and Patience: Skills develop over time; focus on manageable tasks.
  • Asking Questions: Seek guidance and take notes to ease the learning curve.
  • Enjoy the Role: Embrace humor and camaraderie among coworkers.

The consensus is that confidence will grow, and the industry is rewarding with invaluable relationships.

Sources:

  • Reddit: /r/restaurant - Nervous First Day Advice

UFC Pay-Per-View Streaming Costs

A bar owner inquires about the cost of streaming rights to host a UFC pay-per-view event. Insights include:

  • Cost Estimates: Ranging from $850 to $1400.
  • Negotiations: Potential for discounts from providers like Joe Hand.
  • Considerations: Need for security measures due to larger crowds.
  • Legal and Ethical: Some suggest dubious alternatives, but legitimacy is advised.

Experiences show costs can vary significantly based on location and capacity.

Sources:

  • Reddit: /r/BarOwners - UFC PPV Streaming Costs

U.S. Wine Distributor Layoffs Impact

Layoffs at the largest U.S. wine distributor prompt discussions about sales trends and economic factors:

  • Decline in Wine Sales: Noticing a decrease, especially in expensive options.
  • Consumer Spending Habits: Economic uncertainty affecting purchasing decisions.
  • Focus on Affordability: More affordable selections performing better.
  • Industry Concerns: Potential reflections of larger economic issues.

Commenters express concern about the impact on displaced workers and the industry as a whole.

Sources:

  • Reddit: /r/BarOwners - US Wine Distributor Layoffs

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