How Two Food Franchisees Are Affected by Covid, and How They're Responding

Covid impacts

We asked a wide range of multi-unit franchisees about the biggest impacts Covid-19 has had on their business, how they’ve responded, and which changes they think will be permanent. This week we hear from a 61-year-old multi-brand operator of mall-based snack foods, and a 35-year-old multi-brand franchisee who started young and has been a franchisee for 15 years. *Luis San Miguel, president and CEO of Fresh Dining Concepts, operates 40 Auntie Anne’s, 2 Cinnabons, 6 co-branded Auntie Anne’s/Cinnabons, and 2 co-branded Auntie Anne’s/Carvels.

At 61, he’s been in franchising for 10 years and in his current position for 5.* What are the biggest impacts of Covid-19 on your business? All mall-based businesses are obviously struggling with decreased foot traffic, but I see this issue as one that will be overcome with the development of new drugs and treatments in the near future.

I believe our biggest long-term issue is on the labor side. We are having a very difficult time attracting and retaining crew members. This is probably due to a number of factors, including the virus and the negative impact that the government’s stimulus and unemployment subsidies have had on our ability to compete for people.

How have you responded? We have revised our way of operating to rely on fewer crew hours than before. It is very difficult to achieve greater labor efficiency, especially with all the new health requirements, so we are also testing self-order kiosks and promoting ordering through our mobile platforms to increase efficiency on the order side.

What changes do you think will be permanent? Regardless of government mandates, attention to healthy practices and cleanliness is here to stay and rightfully so. This is an area where I think Auntie Anne’s, Cinnabon, and Carvel have always been leaders; cleanliness has always been a top priority for these brands.

Robby Basati is the CEO of RoboFran development, a multi-brand organization that operates 15 Mountain Mike’s Pizza; 2 branded gas stations; 1 Neighborhood supermarket; and 8 development agent stores for Mountain Mike’s with 4 new ones in development and 3 in the pipeline for 2021. At 35, he’s already been a franchisee for 15 years. What are the biggest impacts of Covid-19 on your business?

Labor and sales

Mountain Mike’s is known for its inviting, family-friendly atmosphere. So as a restaurant that focuses on entertaining the whole family, a local sports team, or a group of co-workers, losing the dine-in component of our business has brought on financial strain, and our ambience has changed significantly because our dining rooms are closed. We can’t wait for the day where the dine-in component of our business returns.

How have you responded? Since the beginning of the pandemic, our franchise support center has been providing us with the tools we need to get through these unprecedented times. We continue to put the safety of guests and staff at the forefront of everything we do.

To ensure that our guests feel confident about their experience, in addition to adhering to the strictest health and safety guidelines set by the state and the CDC (such as employees wearing masks and gloves), our dining rooms have been temporarily closed in counties that are currently in the “purple tier,” which restricts indoor dining. Previously, when our dining rooms were opened with limited capacity, sections of our dining rooms were blocked off to create physical distancing. What changes do you think will be permanent?