TGI Fridays Finds COVID to be a Mother of Invention

Restaurant Business

The casual-dining chain's adjustments run from field tents to headquarters

Corporate headquarters were closed in a flash when the COVID-19 pandemic struck, but TGI Fridays found a new use for its vacated home office. When restaurant dining rooms were similarly shut because of social distancing, the chain didn’t have a curbside pickup program in place, a significant shortcoming when sales were narrowed overnight to takeout and delivery. Unit-level processes were re-engineered in a matter of days, recalls CEO Ray Blanchette, but restaurants were hamstrung by having too few incoming phone lines. Customers couldn’t get through.

And yet all those phones at headquarters were sitting idle.

“We turned our headquarters into a call center,” albeit with social distancing, Blanchette says. “I can’t use my office because it’s being used to take orders.”

The recast is an example of the ingenuity and entrepreneurship the casual veteran says he’s seen from casual dining’s greybeard since it was hit by the coronavirus crisis. The chain’s three units in New Hampshire, for instance, are currently topping their year-ago sales because they found a different way to operate, including how they use their parking lots.

“The governor said that we could open patios, but our restaurants don’t have a lot of patios, especially in New Hampshire,” Blanchette explains. “So we went out and rented party tents and put them in the parking lots.”

That was after the stores had adopted several of what Blanchette calls “sales layers,” the alternative revenue sources that have become commonplace within Fridays and the rest of casual dining since coronavirus walloped the sector. In addition to adopting a curbside to-go program, the chain started selling airline-sized bottles of liquor along with the boozeless rest of a cocktail in states that eased their alcohol-service regulations. Stores added a Fridays Butcher Shop that sold raw and cooked food, and some units featured meal kits and family-sized to-go spreads.

Now that about 114 Fridays units are able to provide at least reduced dine-in service, the focus has shifted to fighting contamination and letting guests and employees know they’re being protected. One employee per store wears a bright yellow vest and floats from used table to used table. “All they do for their entire shift is wipe down surfaces that could have been touched,” says Blanchette.

A marker on the floor indicates where servers greet seated guests. The customers are asked if they want to keep that distance or if the server can approach.

Food and drinks brought to the table are presented on trays from which the patrons can lift off the items themselves.

The menu is a placemat, so it’s used only once, in keeping with the recommendation of virtually every state that’s reopened.

Like many chains, Fridays cut back its menu to ease the burden on a kitchen practicing social distancing. Blanchette says Fridays is in no rush to shift back to its complete menu, which once rivaled The Cheesecake Factory’s bill of fare in depth and complexity.

“A lot of visible cues around health and sanitation are likely to stay around for a long time,” Blanchette adds.

The various sales layers have worked, he says. After seeing same-store sales freefall 80% at the start of the pandemic, “now we’re closer to down 40%,” he says. ”In Boston, we’re down 30%. That’s with no dining rooms, no bars. Today, we’re feeling a lot more optimistic.”

But getting there hasn’t exactly been a nonstop fit of hurrahs and high-fives.

“We have restaurants in Las Vegas casinos, and those closed right away,” says Blanchette. “We had units in the interiors of malls, and those closed right away.” Elsewhere, dining rooms were being shut down, and off-premise business generated only about 13% of Fridays’ sales volume at the time. “Literally within 10 days, 80% of our revenues were gone. That was scary at first.”

Fewer than 300 of the chain’s 380 domestic units were able to remain open at the depths of the pandemic, though that number has since climbed back to 311, with more reopening every day, Blanchette says. The tally is already exceeding the 75 or so restaurants that Bloomberg reported would be permanently shuttered.

Blanchette said he told the news service that 10% to 20% of domestic units could stay dark, but told Restaurant Business that he’s not sure what the lasting attrition will be. He explained that the numbers depend as much on the action of landlords as they do on the behavior of consumers in a gradually reopening restaurant market.

“What we’re trying to determine is how realistic landlords are going to be,” he says. “If you’re doing 16% of your revenues, you can’t pay 16% of your rent. Are landlords going to work with us?”

Meanwhile, the franchisor intends to work with franchisees to keep their operations feasible. “We gave them a three-month abatement on their royalties,” he explains. “As their businesses start to recover in June, we plan to tie their royalty to how far their sales come back.”

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