The past two weeks have been sobering for Waffle House President Joe Rogers Jr. The 24-hour no-frills breakfast chain has defiantly remained open in the face of so many disasters that the The Federal Emergency Management Agency uses a Waffle House index to measure their severity.
Hurricane Hugo couldn’t shut the doors for long in Charleston in 1989. The same thing in Georgia when Irma crashed two years ago. The index was solid green in Joplin, Missouri, after a tornado killed 158 people there in 2011.
Then came the coronavirus pandemic.
“We’ve never seen anything like it,” said Rogers, 73, the son of a 65-year-old co-founder who has run the channel since the 1970s. “Any disaster temporarily cripples parts of the business and we we rush to save her. But we have the rest of the healthy system to do it. There is no healthy part of this system today. We burn money every week.“
The FEMA Index uses the time it takes for Waffle House locations to reopen after a disaster. Normally it doesn’t take long, even if they stop. Its system of 2,000 diners in 25 states is “almost comedic” well positioned to mobilize in a crisis, Rogers said: it is a family business, tightly controlled and able to move resources and supplies from unaffected restaurants. to those who urgently need it.
This week he had close 20% of locations, or around 420 in total. Waffle House generally has annual turnover of more … than $ 1.3 billion, but with the country on lockdown – and a single drive-thru location and a fringe takeout business – sales are about 30% of what they should be, Rogers said. Thousands of its 40,000 workers are now on leave.
FEMA’s appreciation because the chain hit the road half a century ago, when Rogers took over and started chasing every hurricane, snowstorm, and tornado that hit a place. He found that when he showed up to help keep the bacon sizzling and the coffee flowing, many other employees did too.
He was 26 in 1973 when he took over the company, which had four family-owned groups, growing into debt and controlling only 30% of the sites. He changed everything five years later when a financial crisis hit and gasoline shortages loomed, first consolidating ownership within his family, who now owns a controlling stake. He created an employee share ownership plan that now provides 3,500 workers with a share of the company. And he ended the company’s dependence on debt.
This fits with the slow growth strategy that he has pursued from the start. Rogers had planned to open around 80 new locations this year, while Burger King, which franchises 99% of all locations, added 1,000 last year.
“Most of the reasons we’re here today are to learn what not to do, ”Rogers said. “We don’t have the most creative restaurant concept you’ve ever seen. We are just a return to a restaurant.
“We’ve tried to show them love over the years during these disasters,” said Rogers of Waffle House. “We might need a little of that backwards now.”
A retro dinner with a devoted cult that returns over and over again, at all hours of the night. During a crisis, it’s a source of comfort food, freshly brewed coffee, and community for regulars, truck drivers, and first responders, even if they don’t quite get it at first.
When Hugo hit Charleston, Rogers battled with a National Guard who wanted them to shut down, until the guard realized it was the only restaurant open in the area that could feed 3,000 rescuers. A Georgia fire department attempted to shut down a site after Irma struck the state in 2018. The manager refused and firefighters ordered 15 meals instead.
“While we have tried to show them love over the years during these disasters, it has not always been easy,Rogers said. “We might need a bit of that in reverse now.”
So far he gets on the contrary, he said, and the decidedly right-wing businessman is by no means happy. He is in the camp of business leaders who wonder whether “the cure is worse than the disease”When it comes to dealing with the spread of COVID-19, putting him at odds with scientists leading efforts to stop it.
“When you lose the Waffle House, you lose the local economy,” he said, noting that the quarantine and shelter-in-place measures would leave the restaurant industry, as well as the economy within the meaning wide, in a state of disrepair.
“If we let this economy go on as it is, we are driving people to ruin. How many people are you sacrificing at the hospice? “
Rogers said he would not pay hourly workers if locations are closed, unlike decisions made at other chains, including Starbucks
“We will do our best to protect their income,” he said. “But if our business is 30% of what it used to be, how long can we protect them? You have to save the business. Otherwise, you won’t be good for anyone.
What is the worst case? Rogers now controls over 90% of the system and says it can always shut down more locations, weather the downturn, and reopen when the economy recovers. He estimates that if the recession turns into a full blown depression, “then in a sustainable way we will probably only be able to operate half of the restaurants.”