In late August 2005, Hurricane Katrina struck the Gulf Coast of the United States. It was one of the worst storms on record and devastated the area. Just a few weeks later, an even stronger hurricane, Rita, hit the same region, producing a one-two punch of destruction that was all but unfathomable.
A year after the disaster, life might not be back to normal, but the area is recovering. QSR sat down with three restaurateurs—who, all things considered, weathered the hurricanes rather well—to discuss the effects on their businesses, the lessons they’ve learned, and how they have approached the current hurricane season.
Todd Graves is founder, chairman, and CEO of Raising Cane’s Chicken Fingers, a 44-unit concept based in Baton Rouge, Louisiana, 80 miles northwest of New Orleans. Raising Cane’s had 28 stores in the affected areas, 21 of which were closed for some period. That accounted for 60 percent of the total system at the time.
Phil Friedman is president and CEO of McAlister’s Deli, a 200-unit concept based in Ridgeland, Mississippi, just outside Jackson, in the middle of the state. McAlister’s had 40 restaurants that were closed anywhere from a few days to a few weeks, and 8 locations in the Gulf area itself, of which two have not yet reopened.
Billy Maisano is the franchisee of one Smoothie King location in River Ridge, Louisiana, a community just outside New Orleans in Jefferson Parish. His restaurant was closed for 17 days after Katrina, and the day after he reopened, Rita came through.
Despite the obvious loss of sales from being closed, we’ve heard that business is actually up since that time.
TODD GRAVES: When we reopened, we were up anywhere from 60 to 80 percent. Response from the community was unbelievable. When you’re open, the community understands how hard you’re working. Everybody’s coming in, they’re distressed, they’re emotional, they haven’t had a shower in a couple days, and they’re seeing us in there tired as all get-out but trying to serve them. They would say, “Thank you for being open,” and we would say, “Thank you for coming in—we’re going to do this together.”
We’re still 20 percent up. I think the community got a lot more loyal to Cane’s.
PHIL FRIEDMAN: The stores that closed reopened with very big volumes: 50, 75 percent increases in sales. We were able to get open relatively quickly, and so many other restaurants didn’t re-open or opened later than we did. We just kept food coming from our distributor so that none of our restaurants ever ran out. In the immediate areas we’ve had a tremendous increase in sales.
BILLY MAISANO: When we reopened, sales went through the roof. My business increased 88 percent. New Orleans was uninhabitable and then all the emergency workers were in Jefferson Parish, so the concentration of people was four times greater. And half the businesses weren’t coming back. So any business that’s open is going to have more people visiting. It’s slowed down, but we’re still above where we were last year.
How does an organization deal with a catastrophic event like this?
GRAVES: The biggest lesson I got out of this is, in times of crisis, leaders emerge and teams form. You find out just how resilient people are. We had general managers who lost everything—their house, their car, everything—and they were at work. It became part of a mission. We had people offer their homes, their apartments. We had 20 people sleeping on floors to support the crew.
What was different with this storm was the levees broke, and that changed our world. You saw people dying, people being rescued off their roofs, and it was just a horrible, horrible time. I learned a lot through that, because, as a leader, how do you manage your emotions? I was conflicted that I wasn’t helping these people get rescued, but I had to take care of my business. I got my wife and kids to go to Virginia, where we have family, and then I was able to concentrate. The first five nights I slept an hour each night. I couldn’t eat.
One thing I really learned, too, was managing the hysteria. That’s something I was not prepared for. It was a time of unrest, and it just made people nervous. The rumors that spread…here’s an example: “The Wal-Mart behind us got held up at gunpoint five times today!” No, it didn’t. We had to learn to get police reports and tell them this stuff is rumor.
FRIEDMAN: We were prepared for it only in the sense that we have good communication with our people and our franchisees. As long as there was communication—and there was a period of time where there was no communication—we were able to find out where people were and what they were doing. What I did as a leader was just make sure we were communicating.
It’s like every crisis you go through in life: We’re stronger for it. I’m proud of my people, and they’re proud of what they did. We all helped each other, and I think our franchise system is stronger because the franchisees were able to help each other, and we helped the franchisees. You always look to get strength from adversity, and I think we did.
MAISANO: People banded together. I was fortunate to have some team members I was able to say, “If you’ll help me clean this up, I’m still going to pay you, and the faster we can get open and get other people open, the faster our lives are going to get back to normal.” Our franchisor would send an army—all the people from the corporate office who were able to get back into their homes—to a store to get it cleaned up and running. We were in constant communication with the operations consultants who were part of that territory, and they would help with scheduling the orders through the distributor to make sure product was at the store when the store was cleaned up.