Corner Office | By Deborah L. Cohen
Everywhere you look, companies are cutting fat to reduce overhead, and annual meetings—often essential to the lifeblood of many quick-serves—are no exception.
With budgets under intense scrutiny, quick-service chains are eliminating extras such as giveaways and raffles and paring down hotel accommodations, fancy meals, and recreation to the bare essentials at annual meetings.
Constrained budgets provided one of the biggest challenges for meeting professionals this year, according to a June survey released by the Professional Convention Management Association and American Express; 90 percent of the 500-plus respondents said funds were reduced because of economic conditions.
But skipping the yearly get-together can be a costly mistake for a restaurant company, according to communications experts, who stress its value as an important tool to rally the troops. With industry-wide sales and margins under pressure, franchisees, store-level managers, and staff need to hear directly from top brass about their plan of attack and how the organization is weathering the economic storm.
Rick Cornish, president of Minneapolis-based Flying Colors Inc., a communications and production company that develops large-scale events, says the collaboration facilitated by the annual meeting is essential to the franchise organization’s survival, especially in tough times.
“Everybody knows franchising is a relationship business,” says Cornish, whose firm produced the yearly meeting for the International Franchise Association and has worked with several quick-serve concepts. “It’s really about the day-to-day emotional engagement that franchisees have with the business they’re in.”
Companies should look for creative ways to hold down expenses without sacrificing the quality of the meeting, he says. That may include persuading vendors to underwrite portions of the event, choosing host cities slightly off the beaten path, and opting for plated meals rather than buffets to control food costs.
“There are always common-sense things that can be cut without getting in the way of senior management delivering the message people need to hear,” Cornish says.
John Baldoni, a leadership consultant and author of the book Lead by Example, agrees. “You can trim entertainment, you can trim food costs, you can trim your location,” he says. “What you don’t want to trim is your message.”
Baldoni recommends restaurant companies use the annual meeting as an opportunity to dispel defeatism: Senior executives should address economic woes head-on, providing the company’s targeted strategies for coping. Everyone from regional development heads to general managers to hourly employees, if attending, should come away with a clear understanding of the actions necessary to remain competitive.
There should also be time for storytelling, including breakouts and panel discussions, where executives, franchisees, vendors, and others can exchange best practices. Management must be accessible, making themselves available for questions and one-on-one discussions with operators and employees. “You have to tell people the truth,” Baldoni says. “Don’t sugar-coat it.”
Event trackers report that all the added recessionary penny-pinching is prompting at least one positive outcome for big, annual events: a more judicious approach with a focus on measurable results.
According to the June MPI Business Barometer, a bimonthly survey of executives in the event planning field, “a trend toward strategic approaches to meetings and events continues, such as careful location selection, greater use of technology and social networking, a greater focus on efficiency and ROI, greater cost controls, and reconsideration of meeting architecture.”
Consider the 2009 meeting plan for owner-operators of Mr. Goodcents, a chain of about 110 sub and pasta restaurants in the Midwest. This year the DeSoto, Kansas, company chose Kansas City for its one-and-a-half-day September convention, a location within just a four-hour drive for most of its 85 franchisees.
The company cut operators’ expenses by about half by changing the location, limiting pricy four-course meals, and using email in lieu of print invitations, says Donna Gordon, director of operations for the company. Franchisees didn’t spend more than about $500 in basic fees, she says.
“We’re cutting the miscellaneous extras; we are not cutting the information that our operators are getting,” Gordon says. “It’s our responsibility to make this exciting every single year. This is a huge way to get operators motivated.”
In addition to sessions dedicated to building sales and profits, Mr. Goodcents included a conference with featured QSR columnist Roy T. Bergold Jr. and hosted education sessions on the use of next-generation technology such as Facebook, Twitter, and online ordering. Event formats were geared toward smaller, interactive groups, which Gordon says was a change from the standard format of presenting to all participants at once. “That’s really primarily to get honest live feedback, to see what’s really going on,” she says.
At Tropical Smoothie Café, a Destin, Florida–based chain of about 285 restaurants, management sharply reduced operators’ travel burden by taking this year’s event on the road, packing senior executives into an RV for an extended tour. It also pushed up the time frame to May from October, allowing management to strike while the economic iron was hot.
“I want to provide a service for my franchisees to be successful,” says Jim Valentino, president and COO of Tropical Smoothie. “We could get more franchisees; they could invite managers and crew members. We could arm them with tools to better combat the 2009 economy.”
Built around the theme “Mission Possible: How to Survive and Thrive in These Challenging Economic Times,” the tour featured Valentino and six executives traveling about 4,000 miles, conducting 11 meetings in nine cities. Vendors helped to keep costs down by hosting the events at their facilities.
Rene Arcemont, who, along with his wife, Samantha, owns and operates a Tropical Smoothie Café just outside of New Orleans, was in attendance at the Memphis meeting.
“What I like about it is we were able to communicate like a small family; we were able to bounce ideas off of each other,” says Arcemont, who was away from his store for only a few days at the cost of hotel and a few tanks of gas. “It’s extremely important.”
That’s just the kind of response that meeting strategists like Baldoni strive for. “You want your people to come together, especially in times of crisis,” he says.