WEBVTT - Checker's and Rally's CEO on 'Not Missing a Beat'

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 1>Jason Kelly on Bloomberg Radio. All right, so as we

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<v Speaker 1>begin our last hour today, we've got a guest that

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<v Speaker 1>Carol and I have both been looking forward to, in

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<v Speaker 1>part because this Carol tease me about earlier. It's sort

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<v Speaker 1>of a walkdown, uh future, past current. It's my teenage diet.

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<v Speaker 1>Maybe I have to say maybe current. I'm still a

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<v Speaker 1>young adult at heart. Francis Allen joins us. She is

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<v Speaker 1>the CEO of Checkers and Rally's Drive in restaurants. She

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<v Speaker 1>joins us on the phone from Colorado, and it's notable

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<v Speaker 1>in part because this is a relatively new job for

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<v Speaker 1>she hasn't even been able to show up to her

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<v Speaker 1>office yet. We're told that's in Tampa. The quarantine obviously

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<v Speaker 1>has thrown everything into all sorts of flux. So Francis,

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<v Speaker 1>first of all, how are you, what's going on with you?

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<v Speaker 1>I'm well, thank you Jason and Carol, and thank you

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<v Speaker 1>for having me on. It is a bizarre situation where

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<v Speaker 1>you started a new role and four weeks later there's

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<v Speaker 1>a world's a nation lockdown. So I at least have

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<v Speaker 1>visited the office. I have done my restaurant training, UM,

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<v Speaker 1>but the majority of time I have been in Colorado,

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<v Speaker 1>and I would say that, UM, huge compliment to add

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<v Speaker 1>teams that you know, we've really not missed the beat

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<v Speaker 1>working remotely, and I think a lot of companies are

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<v Speaker 1>finding them. So you, like us, are working from home. UM,

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<v Speaker 1>tell us about not missing a beat. What does that

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<v Speaker 1>meant for the company, UH in terms of the type

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<v Speaker 1>of demand that you've seen, and what does it meant

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<v Speaker 1>for your employees to make sure that you're keeping them

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<v Speaker 1>safe as well as keeping your customers safe. Yeah, it's

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<v Speaker 1>it's really been so rewarding to UH to work through

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<v Speaker 1>this crisis with a with such a dedicated and resilient

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<v Speaker 1>team of people. There's always a silver lining rate and

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<v Speaker 1>in every crisis, and I think you know, usually it

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<v Speaker 1>brings out the best of people. And I can certainly

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<v Speaker 1>say that that's true for the Checkers and Raleigh's whole organization. UM.

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<v Speaker 1>From AH, I'll start with the safety. Obviously, when when

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<v Speaker 1>we put a tassbolts together to create a response plan,

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<v Speaker 1>we had two priorities. The first priority was the safety

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<v Speaker 1>of our guests and their employees, and the second was

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<v Speaker 1>really to keep our restaurants open so we can continue

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<v Speaker 1>to employee our team members and feed our guests. So

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<v Speaker 1>UM incredibly proud of the of the operations team we

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<v Speaker 1>actually as as well as complying with all of the

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<v Speaker 1>CDC mandates both individual, state and local government requirements, we've

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<v Speaker 1>actually put in fifteen new contact lists experiences to protect

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<v Speaker 1>our employees and I guess everything from UM plexigous areas

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<v Speaker 1>at the window those UM, UM sorry, I just need

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<v Speaker 1>to have my phone's got brin UM cashiers with color

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<v Speaker 1>coded gloves for handling payments, UM praise for handling payments,

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<v Speaker 1>infrared thermometers obviously. Fortunately we already did fifteen minute hand washing,

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<v Speaker 1>so UM you know, we already had a very high

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<v Speaker 1>standard of cleanliness. UM you know, cup refills with always

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<v Speaker 1>refilled people's cups. But now we'll still do that, but

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<v Speaker 1>we'll give you a fresh cup. So a ton of

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<v Speaker 1>new UM procedures at the restaurant sanitation obviously to keep

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<v Speaker 1>people safe, on people and labor um you know, obviously

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<v Speaker 1>at this priority as the employees who show up for

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<v Speaker 1>work every day, and I'm so proud of them and

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<v Speaker 1>what they've done and how they kept going We're fortunate

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<v Speaker 1>in that we have not had to lay off anybody.

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<v Speaker 1>We did follow some people at this corporate office, but

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<v Speaker 1>we're able to bring them back after thirty days. But

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<v Speaker 1>we've been looking after our team members with sickly with

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<v Speaker 1>closure pay if if the restaurant has to close, and

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<v Speaker 1>we've also instigated a thank you pay for those restaurant

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<v Speaker 1>team members that that have UM stayed with us through

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<v Speaker 1>throughout the best Virus UM. I'm very proud to say

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<v Speaker 1>we also have a an employee relief fund. It was

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<v Speaker 1>actually established in fire thousands five, following the days of

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<v Speaker 1>Hurricane Katrina, and has provided more than five hundred thousand

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<v Speaker 1>dollars and assistance to about six hundred employees and their families.

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<v Speaker 1>And we've expanded that to UM to obviously include anybody

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<v Speaker 1>that can't work due to Corona related issues. So a

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<v Speaker 1>lot of a lot of work put together to for

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<v Speaker 1>our people, UM, keep our guests and our employees safe,

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<v Speaker 1>and then of course all the marketing ship up that

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<v Speaker 1>that we need to need it to make, so shifting

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<v Speaker 1>really into free delivery, meal bundles, UM, social media and

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<v Speaker 1>UH and just trying to stay very nimble and flexible,

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<v Speaker 1>right well, and I do wonder, you know, Francis, as

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<v Speaker 1>we are, you know, starting to see some reopenings. There

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<v Speaker 1>are there any sort of trends that you're seeing in

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<v Speaker 1>terms of traffic or in in terms of consumer behavior

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<v Speaker 1>that that you're picking up as you look at the

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<v Speaker 1>different regions that you serve at this moment. Yes, um,

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<v Speaker 1>so um. You know what's what's really interesting for our businesses,

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<v Speaker 1>We've we've kind of had this roller coaster experience. So

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<v Speaker 1>in the early weeks of the pandemic, we were down

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<v Speaker 1>double digits like many people, uh, everybody really in ah,

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<v Speaker 1>in our industry and left you're in the piece of

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<v Speaker 1>business and um. And that was really driven by the curfews,

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<v Speaker 1>the shutdowns and the and especially lower sales at late night.

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<v Speaker 1>But from about the middle of April we saw that

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<v Speaker 1>start to come back, and for the last several weeks

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<v Speaker 1>we've actually been up double digits. So imagine that swing

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<v Speaker 1>going from you know, down about to up about the same.

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<v Speaker 1>So um, but we think, yeah, we we think it's

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<v Speaker 1>a it's a number of things. Um, it's the the

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<v Speaker 1>majority of our restaurants drive through only, so we have

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<v Speaker 1>closed kitchens and have been able to really drive that

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<v Speaker 1>contactless experience. UM. We really have lead heavily into delivery.

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<v Speaker 1>We launched a comprehensive delivery business last year. UM, and

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<v Speaker 1>we've accelerated our efforts to promote order ahead. Combined with that,

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<v Speaker 1>we had a really well timed values of focused promotion.

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<v Speaker 1>We're going to continue our conversation still with us as

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<v Speaker 1>Francis Allen. She was named CE of Checkers and Rally's

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<v Speaker 1>Drive In Restaurants in February of this year. She was

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<v Speaker 1>also see a Boston market president of Jack in the Box.

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<v Speaker 1>She's held senior positions at Denny's, Duncan Donuts, USA, and

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<v Speaker 1>a lot more. She's with us on the phone from Colorado.

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<v Speaker 1>You know, you have such an incredible background, Francis, in

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<v Speaker 1>terms of the different restaurants and brands that you've you know,

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<v Speaker 1>worked with. How do you think this industry changes longer

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<v Speaker 1>term as a result of COVID nineteen. Yeah, it's a

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<v Speaker 1>great question, Carol, and UM, I think what we're going

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<v Speaker 1>to see and we've seen it a little bit already

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<v Speaker 1>with soft casual coming in and blurring the lines between

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<v Speaker 1>Q I saw in in casual dining, and I think

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<v Speaker 1>we're just going to see that even more so, we're

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<v Speaker 1>gonna see casual dining restaurants looking for doing copes I

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<v Speaker 1>pick up and you know, trying to get us close

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<v Speaker 1>to the whole drive through model as as I think

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<v Speaker 1>it's it's ease of all for them to get. I

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<v Speaker 1>think we're going to continue to see consumers who are

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<v Speaker 1>really quite concerned about a dining in and so there

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<v Speaker 1>definitely will be a move more towards delivery and and

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<v Speaker 1>take out. We're going to see an acceleration of, um

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<v Speaker 1>that digital engagement with brands as people try and order ahead.

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<v Speaker 1>And I think, sadly, UM, you know, the industry has

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<v Speaker 1>been overstored for some time, and that's meant that there

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<v Speaker 1>has been a very very anemic traffic growth. UM. Sadly,

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<v Speaker 1>I think we're going to see about twenty percent of units.

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<v Speaker 1>I mean, who knows, it's a it's a guest at

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<v Speaker 1>this point, but um, we've already had a lot of

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<v Speaker 1>permanent closures. So that's gonna actually, I think be good

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<v Speaker 1>for the industry as a whole because it's actually create

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<v Speaker 1>more more traffic growth than and more energy. So, UM,

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<v Speaker 1>I see, I see lots of changes. Does that does

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<v Speaker 1>apply to you? Guys as well that cut back potentially.

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<v Speaker 1>I know, um, we we closed um up to fifty

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<v Speaker 1>restaurants out of nine hundred. If they were ones that

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<v Speaker 1>were primarily in more locations, or or they or they

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<v Speaker 1>had dining rooms, Um, most of those will reopen. It's

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<v Speaker 1>it's more the you know, the people that just weren't

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<v Speaker 1>able to generate revenue during during this time. And I

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<v Speaker 1>think some of the hardest hit are actually going to

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<v Speaker 1>be the fine dining restaurants, because if you think about

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<v Speaker 1>fine dining, it's all about the business traveler. And I

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<v Speaker 1>don't see the business traveler really returning on mass the

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<v Speaker 1>way that we have been operating up to now. I

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<v Speaker 1>see business changing a lot over over becoming a couple

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<v Speaker 1>of years now. I think you're exactly right. I mean, listen,

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<v Speaker 1>we've had a number of those chefs on the program. Uh.

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<v Speaker 1>And you know, we're talking about some of the best

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<v Speaker 1>restaurants in the world, not the least of which is

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<v Speaker 1>eleven Madison Park, And you know they're chef and owner

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<v Speaker 1>Daniel Whome has has basically said he doesn't know if

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<v Speaker 1>if that restaurant is going to reopen. That's a really

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<v Speaker 1>interesting uh. And and salient point about business travel. I

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<v Speaker 1>do wonder, you know, Francis, at a time when we

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<v Speaker 1>all are and and I am a huge fan of

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<v Speaker 1>every place that you have ever worked, as I uh

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<v Speaker 1>as I laid out in the intro. But but I

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<v Speaker 1>do wonder, from your perspective, knowing what you know about

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<v Speaker 1>menus and and and health concerns and health trends and

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<v Speaker 1>all that, how does your menu change going forward? What

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<v Speaker 1>are people going to be angling for, especially as they

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<v Speaker 1>get back out in the world a little bit. Well,

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<v Speaker 1>I I actually think people are going to lean into

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<v Speaker 1>comfort suit. I think that they're really familiar to them

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<v Speaker 1>and value so that puts us in a great position

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<v Speaker 1>with that prize. Jason, I'm delighted that you're you're a fan. Um.

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<v Speaker 1>I'd like it to be your adult diet as well

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<v Speaker 1>as your teenage diet. You know, there's nothing like a

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<v Speaker 1>Checkers and Valley Spride actually make, you know, make the

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<v Speaker 1>day seem a lot better. I couldn't agree more so.

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<v Speaker 1>So I think we're going to see that. And you know, frankly,

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<v Speaker 1>I think the people that were really into healthier food

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<v Speaker 1>or organic or sustainable sustainability before there's h they're going

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<v Speaker 1>to continue afterwards. Um, but I think for most people

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<v Speaker 1>it's going to be a return to comfort food and

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<v Speaker 1>comfort brand um and value um and uh. And you know,

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<v Speaker 1>I think I think really looking at simplifying, So we'll

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<v Speaker 1>probably see a lot of many simplification over the coming

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<v Speaker 1>I get to say, France, as I see some loaded

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<v Speaker 1>fries in Jason Kelly's future, I'm just gonna say, um, yeah,

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<v Speaker 1>know I you know, we do have to ask you.

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<v Speaker 1>I think before we leave. We've just got about a

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<v Speaker 1>minute left. You know. Obviously we've been focused on the

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<v Speaker 1>virus and how your world comes back, but you know

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<v Speaker 1>what happened in Minneapolis and what we've seen there. UM,

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<v Speaker 1>I am curious. How is a company you can help

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<v Speaker 1>facilitate change. It's a great question, and I first want

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<v Speaker 1>to express my deepest condolences to the family of George

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<v Speaker 1>George Floyd. I also want to share that Checkers and

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<v Speaker 1>RALEI support the black community and we've always been proud

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<v Speaker 1>to be a part of the communities we serve. And

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<v Speaker 1>I believe that being a part of a community means

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<v Speaker 1>standing by each other in good times and in challenging time,

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<v Speaker 1>so together we can work for real change and to

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<v Speaker 1>that in what we'll be doing as an organization is

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<v Speaker 1>taking a close look at how we can be more

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<v Speaker 1>supportive of our neighborhoods than our communities in the future.

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<v Speaker 1>All Right, well, best of luck to you and uh

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<v Speaker 1>I hope to see you on the other side of

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<v Speaker 1>this and UH share some fries and from a socially

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<v Speaker 1>distant and safe perspective, for instance, Allen, thank you so much,

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<v Speaker 1>CEO of Checkers and Rallies drive in restaurants,