Scott Campbell, who owns a network of Dunkin’ Donuts shops in New York City, knows change is coming. His team has been preparing for it for months. Coming on the heels of a city-wide mandate that raised minimum wage to $11 per hour this past January – and will top out at $15 an hour by the end of 2018 – small business owners like Campbell are now adjusting to new scheduling rules, which demand managers give employees two-weeks’ notice before changing their shifts.
“We call it restrictive scheduling,” says Campbell, spoofing the official name.
“Predictable schedules and predictable paychecks should be a right, not a privilege,” New York City Mayor Bill de Blasio said last May, while signing into law widespread changes to employment laws. “With these bills, we are continuing to build a fairer and more equitable city for all New Yorkers.”
That may be fine for Democratic politicians and union chiefs who lobbied for the changes, but how will it affect operators like Campbell—not to mention franchisees across the country that will likely face similar restrictions in the months and years ahead? Campbell says if a franchisee doesn’t take the proper steps to manage human resources, it could be a real problem.
“We write schedules in advance already. The key is to live to the letter of the law and minimize schedule changes as much as you can,” he says. “Your team members need to be very good. You need skilled, developed players on your bench; you can’t have those weak players.”
Predictive scheduling grew out of the labor-friendly Obama administration and continues to gain steam in Democratic cities like New York, San Francisco and Seattle as well as in blue states like Oregon and Massachusetts. Its impact will be among the topics discussed at this year’s DDIFO National Conference being held October 30 and 31 at Foxwoods Resort and Casino in Mashantucket, Connecticut.
Among the speakers expected to appear is Cicely Simpson, the head of policy and government affairs for the National Restaurant Association.
“We are thrilled Simpson is planning to join us in October,” says DDIFO Executive Director Ed Shanahan. “Her experience on issues related to our members, and her long-time work as vice president of government affairs at Dunkin’ Brands, makes her a natural fit for our program.”
According to Reuters, “With several states and municipalities having increased their minimum wages to as high as $15 an hour in recent years, scheduling in the often unstable fast-food sector has become the new frontier for unions and advocates for low-wage workers.”
“Minimum wage increases and scheduling laws will hurt all restaurant owners, including QSR. Restaurants need to invest in technology, including mobile order and pay, kiosks and server handhelds, to offset the higher labor costs,” notes Mike Halen, Bloomberg Intelligence senior restaurant analyst, who will also be on hand at Foxwoods. Halen will join John Gordon, DDIFO’s Restaurant analyst, for a panel discussion about what lies ahead for Dunkin’ Brands and the QSR segment.
A view of the future
One of the most challenging questions facing Dunkin’ Donuts franchise owners is how a sale of the brand would impact their day-to-day operations. Gordon has been monitoring industry signs and Wall St. conversations and believes “There is now less interest in a big investor purchasing Dunkin’ Brands, since a transaction did not happen earlier in the year,” when the international conglomerate JAB was seen as a likely buyer. JAB has since purchased Panera Bread and is working to integrate that chain into its operations. Halen notes, however, that “Dunkin’ could still be a potential target down the road as JAB has shown no signs of slowing its [merger and acquisition] binge.” Dunkin’ and Starbucks are now the only U.S. publicly traded coffee chains.
The situation could well be complicated by CEO Nigel Travis at the time he announces his resignation from the corner office—a scenario many believe will happen in the short-term.
CEO on stage
Every year DDIFO’s Shanahan sends a letter to Travis, inviting him to present the keynote address at the National Conference. Shanahan believes association members would benefit from a straight-talk speech delivered by a QSR chief executive. With Travis unavailable again this year, Shanahan turned to Firehouse Subs CEO Don Fox.
“Mr. Fox has to be one of the most well-respected operators in any system,” says Shanahan. “We are so fortunate to have him kicking off the 2017 National Conference.”
Indeed, Fox has been recognized by his peers and others. He was the Nation’s Restaurant News 2011 Operator of the Year and also named the 2010 Hands-On CEO by QSR Magazine, which recognized him for, “setting strategic objectives, visiting stores, developing franchisee relationships, building a strong organization, mentoring tomorrow’s leaders,” while balancing a hands-on approach.
Fox told the magazine, getting out of the office and into the field is what “keeps you very close to the business, how the business is being operated, and where the dollars are flowing.” Plus, he says a leader needs to be close to the customers to understand how customers interact with the brand.
What is perhaps of most interest to Dunkin’ franchisees, however, will be Fox’s view of franchisees. During his Operator of the Year acceptance speech, he openly bragged about the men and women who carry the Firehouse Subs flag. “I’d put my franchisees up against franchisees of any system at any time.”
In fact, Fox has an interesting view of franchisee associations, having approved the creation of one at Firehouse Subs.
“Most franchisee associations are formed out of adversity, and we didn’t want that to happen,” he said. Firehouse hasn’t been sued by a franchisee in the years since the chain started selling franchises, he added.
A former assistant restaurant manager at Burger King, Fox worked his way up the chain to the role of Franchise Business Manager during his 23 years with the company. Interestingly, he was also once an area manager for Six Flags Adventure, so he is familiar with the ups and downs life – and quick service restaurants – can present.
A Winning Record
Another guest at this year’s conference who knows something about the ups and downs of life is former NFL quarterback Steve Grogan, who led the New England Patriots to their first Super Bowl in 1986.
Grogan spent his entire 16 year career with the Patriots and is a member of the team’s Hall of Fame. Today, he is a motivational speaker and still revels in the glow of his success in New England—something about which many Dunkin’ franchisees are also familiar.
Timing is everything
The 2017 DDIFO National Conference will close out promptly at 2:00 p.m. on October 31, after lunch celebrating the formal induction of the 2017 Hall of Fame class. The timing is significant, Shanahan says, because conference attendees are eager to get home in time for Halloween festivities in their neighborhoods and communities. With the truncated format of this year’s conference, Shanahan and the team has less time to deliver more content and more insight than in previous years. He says it promises to be a well-spent two days.