How This Problem-Solving CEO Is Keeping Her Restaurants' Doors Open Dawn Lafreeda breaks down the incredible struggles (and opportunities) of operating 85 Denny's locations during the pandemic.
By Dan Bova
Dawn Lafreeda is President, CEO and founder of Den-Tex Central, Inc. dba Denny's Restaurants. In 1984, she opened her first Denny's and since then, has built an incredible 85-location operation. Lafreeda, like so many business owners in the restaurant space, has been massively impacted by the pandemic but has found a way to manage her way through this incredibly destructive crisis.
Or more appropriately, has found ways to manage her way through the crisis. Lafreeda's operation is challenged to follow safety protocols that vary from state to state, city to city, and frequently change with little or no warning. "In some instances, we had less than six hours notice to shut down dining rooms," she told Entrepreneur. "We have had to learn and adapt to new ways of doing business to sustain."
Related: Check Out Denny's Inc. Franchise Information
In the following interview, Lafreeda breaks down the challenges that she and other multi-state business owners continue to face, and how she is fighting every day to keep her business, employees and customers healthy.
You have locations in multiple states. Can you explain the challenges this has presented?
I have restaurants in seven states and the rules vary from state to state and the challenges are never-ending. We typically follow the rules of the governor, but we have situations where the mayors also exercise authority that we need to take into account. This presents a huge challenge in ordering and staffing as we are unable to predict from week to week what we may be up against.
In order to stay compliant in each city and state, we have a spreadsheet that details PPE requirements, social distancing rules, hours of operation, curfews and allowed capacity. The rules can be a moving target and they change frequently, sometimes on a daily basis.
There are also challenges in dealing with the human resource aspect of things as there are many different employee situations that require a lot of sensitivity while trying to keep business open and save jobs. For instance, you may have an employee who lives with a family member who is elderly or compromised so they may be afraid to come to work. You may have a person who tests positive, so you must close for a period of time, and this affects the livelihood of your whole staff. There have been supply chain issues, staffing issues and widespread fear of getting sick.
How has Covid affected your overall business?
We have had to make some extremely hard and painful decisions to survive, this includes closing locations. We are not able to run our business in the way we know makes it successful. In certain industries, we no longer are in control of our destiny but instead, we are at the mercy of the rules enforced on us by civil authority due to the pandemic. Additionally, this hit us very quickly without a lot of time to prepare. In some instances, we had less than six hours to shut down our dining rooms with no known date of when we could reopen. In some states, we reopened and then had to close again adding even further strain to operators. The restaurant industry at large is dealing with a lot of unknowns, but dining restrictions being re-enforced have now been built into Denny's contingency plans for restaurants around the country, including mine. Where we have been able to reopen and operate, we are trying to offer the best customer experience we can. We pride ourselves on delivering the best dining experience imaginable and that has not changed, even with new challenges to overcome.
What solutions and innovations have you seen that are working for restaurants?
The level of innovation at Denny's I've seen during this pandemic has been incredible, and most of it has come straight from the restaurant teams. At the restaurant level, we feel empowered by Denny's to ideate, innovate and help grow our businesses. This is how outdoor dining at select locations was born, to help compliment the curbside and dine-thru services we have in place to feed our guests while socially distancing. We have also added booth partitions, a digital menu via scannable QR code, touchless options and more portable meal options.
Has customer feedback affected that way you are running your business?
Absolutely, we believe it is important to listen to our guests and our number one priority is keeping our customers and our employees safe and top of mind. Earlier this year, Denny's created the Sanitation Specialist position to help keep restaurants safe and sanitized. These individuals are trained on the proper cleaning and sanitizing procedures, and how to clean using the proper tools and approved disinfectants. That, along with other safety and satiation protocols have helped make our guests feel more comfortable having a meal with us. We deep clean all high-touch and non-contact surfaces regularly. Employees are required to wear face masks and gloves, take a mandatory temperature check before work, fill out a health screening questionnaire and wash their hands thoroughly with an alcohol-based sanitizer every twenty minutes. Additionally, all of our dining rooms have been rearranged to accommodate social distancing.
Related: Why Denny's CEO John Miller Prioritizes People and Purpose to Deliver Profitability
We are heading into truly uncertain times, with the election and colder weather on the horizon. How are you preparing and how would you recommend other business owners to prepare?
We are paying close attention to every line item on the P&L and looking for opportunities for improvement to carry us through the winter and get us through to the other side. Some specific things we are doing is analyzing hours of operation, menu size and simplification, staffing hours, and contract renegotiations. We are creating food offerings that are portable as well as family meal packs. We are learning to be more flexible and open to ideas that do not necessarily fit our traditional business model. We are looking at this as an opportunity to add offerings and ideas to our 67-year brand and heritage.
What are some of the positives you see for entrepreneurs who are able to come out on the other side of the pandemic?
There will be some silver linings from this pandemic for the restaurant industry and for entrepreneurs in general. While sadly many businesses have closed, the positive side is this will offer a bigger pool of employees to businesses that have been struggling to find enough help. Pre-pandemic, record low unemployment made staffing a huge problem for many years.
Unfortunately, while not all will not survive the pandemic, the ones who do may see an increase in volume as there will be fewer choices for consumers. Many markets have been over-saturated for a long time making it difficult for some to sustain.
Entrepreneurs who can get through this will be able to take advantage of the vacant locations that will come on the market and at more favorable lease terms. It will be an opportunity to expand.
The pandemic has spawned new products, industry and innovation which will move us forward into the future and create new jobs and opportunities.
What do you advise for people who are scared to try and start a new business now? If you were starting your career all over again, what would you do if today was day one?
Don't let fear keep you from your dream. I see this as a prime opportunity for entrepreneurs. There are so many demands for new products, services, and innovation that it can be an entrepreneur's dream. This is a unique moment in time and with the right idea and business plan, you can experience huge success. I see opportunity everywhere. While the pandemic is bringing us great grief, it will also bring us new and unexpected gifts.
If I were starting my career all over again, I would do many things the same. People are always going to eat and I believe 100% in the benefits of a franchise system. I would take my learnings from this period of time and make different building design decisions and menu decisions. I would negotiate my leases, contracts, loans, and insurance policies to better protect my business from things like civil authority, terrorism and pandemics. I would do everything in my power to ensure I have a sustainable and scalable business that would endure the test of time and unpredicted threats.
There is nothing that would ever prevent me from starting over. We are fortunate to live in a place where the American dream is at our fingertips if we want it. I wanted it and I will always want it.
