What a difference a day makes. Or to update that rhetorical message, what a difference three months makes. Yes, it was just three short months ago when states like Florida, Texas, Arizona and a host of others across the south and southwest were seemingly enjoying some inexplicable level of immunity from the coronavirus pandemic. Businesses in those states were reopening, residents were enjoying the outdoors, without a mandate to wear a mask. Restaurants were serving food and drinks and life was slowly returning to some level of normal.
Conversely, many of the states north of the Mason-Dixon Line were grappling with unprecedented outbreaks of COVID-19 that pushed hospitalization rates close to capacity and claimed thousands of new deaths on a daily basis. New Jersey, New York, Massachusetts, Michigan among others were tagged as epicenters of the 2020 plague. In response, the COVID-19 hotspot states locked down tightly. As expected, businesses were battered. Caution was the guiding premise in those states as some residents bemoaned the drastic steps mandated by their political leaders.
As we’ve now learned, the virus immunity that we thought was in play across the southern and southwestern regions of the nation was a mirage, and the abundance of caution employed in the earlier hotspot states may have been the better approach. We are still searching for the right balance in California as well as New York; in Michigan as much as Tennessee; and in Maine as much as Arizona.
To the extent that the word fortunate is an appropriate word in this context, Dunkin’ franchise owners are fortunate that a good portion of their business comes from the drive-thru window. That reality has allowed a large percentage of franchisees to keep a portion of their business open and operating throughout the pandemic. But it wasn’t just good fortune that drove that result. To the contrary, it was a delicate balance between the wisdom of safely keeping the business open and the caution of recasting the service process to minimize risk. And, isn’t that the secret to almost all success? Respond to the immediate challenges cautiously, but without fear while always seeking to minimize the risk?
A 2009 study in the Harvard Business Review examined corporate performance during the last three recessions. It found, among other things, that about one in 10 corporations fared better during an economic crisis in terms of sales and profit growth. “According to our research, companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession. Within this group, a subset that deploys a specific combination of defensive and offensive moves has the highest probability—37%—of breaking away from the pack,” the magazine wrote, highlighting how a multipronged strategy “is the best antidote to a recession.”
Early in the pandemic, Dunkin’ Brands exhibited a careful balance when it granted franchisees unprecedented flexibility in their hours of operation. Notwithstanding the corporate desire to have stores open and serving Dunkin’ customers, the wise choice was to decentralize that decision-making and yield the final call to the franchise owner. That way, operators of restaurants in urban centers – without drive-thrus – could close their shops and redirect their labor resources to other units that made more sense against the pandemic backdrop. Through its deliberate actions, Dunkin’ established a strong, yet cautious balance. CEO Dave Hoffmann crystallized in comments to a business roundtable hosted by President Trump, explaining “We’ve rallied around that mantra of ‘people over profits,’ and doing the right thing there.”
Through the course of interviewing franchisees for the articles in Independent Joe every other month, that balance has become clear to our writers—and hopefully to our readers as well. Most Dunkin’ franchise owners have poured their heart and their life savings into building a successful and profitable business, but they can stand tall as well for putting the safety of their employees and their customers ahead of their bottom line.
Even as we continue to balance our concerns over public health with our need to live our lives, it remains to be seen whether the slow and cautious approach taken by some states or the more aggressive approach taken by others to reopen their economies truly represents the better response. In either case, the methodical balance employed by Dunkin’ and its franchise owners has proven the right formula for consistent customer service and employee safety.
Ed Shanahan
DDIFO Executive Director
