August 2015 Living Large: Brands Discuss People Practices

BY BETH EWEN

Tom Lewison, CEO of Wild Wing Cafe, believes in a formula for recruiting management: They want to develop 80 percent from within their ranks, and 20 percent from outside.

“The reason is so we do not have an incestuous look at the business,” he says. “Sometimes you get in the weeds, and it helps when you bring in diverse ideas and experiences to the team.”

The restaurant chain relies on a modular training program to give each person, from entry level all the way up to general manager, the experience needed to do the job, and also grow into the next one.

“We want to define a path of experiences that people go through to fully develop their skills,” he says, citing an example of a marketing person who will learn fulfillment and printing during the next 12 months, filling a current gap.  Another example is an administrative person who will tackle a cost control learning module, which includes a labor scheduling tool.

Much of the training information existed at the company, which celebrates its 25th anniversary this year, but Lewison charged his team with breaking up the material into smaller pieces, adding a table of contents so the right topic is easily found, and writing some new materials.

“We want to keep it simple, and that takes a lot of information in bite-sized pieces,” Lewison says. “How do you eat an elephant? One bite at a time, and the same thing goes for someone’s development.”

Lewison acknowledges the many controversies swirling around restaurants these days, from protests over the minimum wage, to arguments that McDonald’s corporate is a “joint employer” with its franchisees.

But he doesn’t get riled up. “We can’t control outside factors,” he says, but strives to keep the interests of three groups—“our employees, our guests and our shareholders”—in balance.

For example, the Affordable Care Act has been difficult to comply with, particularly when rules kept changing all the way through the U.S. Supreme Court decision in June. “So as leaders of people, we were having a hard time making firm decisions on how to approach it,” Lewison says. But he avoided the route some restaurant chains took, when they made employees part-time so they would not be subject to the act.

“You know what we didn’t do? We didn’t take people’s hours away, because they’re the heart and soul of who we are,” Lewison says, citing that case as an example of the balancing act all franchisors face.

“Employee relations is very tricky. There’s no one answer to any situation,” he says. “We’ve been in their shoes, a long time ago, but we’ve been in their shoes,” he adds about employees. “We try to put ourselves in their shoes and create the best environment we can, and still it’s hard.”

Sharing the love

One of Bottle & Bottega’s five key values is support for its franchisees, says Nancy Bigley, CEO. So it’s difficult to resist the urge to get involved in the details when franchisees have human resources problems.

“It’s a hard one. I know we’ve struggled with this as franchisors forever, honestly, but it’s certainly heightened now,” she says. That’s since the National Labor Relations Board last August called McDonald’s a joint employer along with its franchisees, and rattled the entire industry.

“We’re here to support our franchisees in everything we do, and it’s hard to say, ‘Sorry, we can’t help you there,’” she says, as franchise attorneys are strongly advising franchisors to do these days.

Her solution is to move to third-party firms for human resources matters, something she’s done with franchise sales, real estate and other functions. She’s testing a new payroll company, for example, which has a new-employee onboarding portal that will help franchisees quickly get paperwork and logistics handled for new staffers. That’s in tests now, and nearly ready to roll out.

Next up will be to retain a generalist company for HR. “There are some really great HR partners in franchising.” Earlier, “we just weren’t really ready for that expense, and the franchisees weren’t ready for it. But now with this heightened awareness we all have,” she’s taking the plunge.

She’s also tapping into the knowledge of existing franchisees, and connecting them with other owners, so they can discuss thorny personnel problems together. “We have a really great communications portal that we set up for our franchisees,” she says. “We encourage them to do a post on one of the forums and ask the whole community.”

Fellow owners are eager to help, she says. “Our group is wonderful about sharing, especially with new franchisees. They’re so encouraging, either online or setting up a call separately,” and they can discuss issues amongst themselves that a franchisor needs to avoid.

The right fit

“Our people are caregivers. They are the face of the company, and they either make us or break us,” says Lenny Verkhoglaz, CEO of Executive Care.

He’s not the only CEO who has uttered that statement, but his franchise does have an additional burden than most because they place people in the homes of clients to provide care, an intimate arrangement.

Some states, including Executive Care’s New Jersey headquarters, license and regulate caregivers, a situation that Verkhoglaz prefers. “Other states have no regulations regarding caregivers. You can pretty much get anybody off the street, and I consider that very, very dangerous,” he says.

Executive Care provides franchisees with hands-on training, bringing them into its corporate-owned facility to participate in such things as employee screening and live interviews.

“We have scripts on how to interview caregivers, what to ask for,” he says. “We give a lot of flexibility on how the franchisees hire,” but also provide them a detailed manual dedicated to hiring and screening best practices.

“We always look for people that have compassion, that love what we do, that can talk about their prior experience,” he says. “We ask them who they worked for, who they took care of, what did they like and not like about caregiving.”

Some people, he finds, prefer to give direct, hands-on care, while others may like to clean the house or prepare meals. The trick is finding the right match between caregiver and client.

Verkhoglaz works to stay on top of all regulations, which in healthcare include federal, state and local rules. For example, many of their caregivers are immigrants, especially on the East and West coasts, so following I-9 rules is important. “Although they’re not new to anybody, a lot of people aren’t aware. We have a consultant on retainer at corporate headquarters to advise on this,” he says. “Each violation of I-9 costs about $10,000, so we make sure our franchisees are following the regulations.”

He says recent efforts by the Obama administration to raise the salary threshold for overtime is a non-issue. “We do have employees that make $35,000 to $40,000 a year right now, and we have already been paying them overtime. We adopted this a long, long time ago, so we’re ahead of the game on that one,” he says.

He’s also been to Capitol Hill, lobbying with the International Franchise Association against the trend toward holding franchisors and franchisees as jointly liable for employer violations. “It’s a scary issue, especially for McDonald’s. They are the prime target,” Verkhoglaz says. “We have been trying to separate ourselves as much as we can from our franchisees, so we don’t appear as a common joint employer.”

He’s sought and follows advice from attorneys on the topic. “They are called independent operators for a reason, and we’ve always kept a distance away from them,” he says about franchisees.