Jon Sherman 7:46
Yeah, I mean, you know, it was a, there’s just no precedent for it, and no real guidance from anyone anywhere, you know, I think our overarching, you know, feeling was, we want to keep people safe, and you know, our teams and our customers. But at the same time, we also wanted to keep them employed. And I think that we were hearing that from them as well, it’s kind of, you know, over the first couple of weeks of March 2020. You know, everyone, first off, everyone reacted to this differently and felt differently about it, but the kind of perceived risks and health risks of the situation. And so, you know, we really just tried to keep an open dialogue with our teams to understand first and foremost, you know, do they want to continue working? And, and if they did, then, you know, frankly, we wanted to keep on serving our customers. And we just, we really tried, you know, really put all of our focus and emphasis on, you know, what are the new, what are the new procedures, you know, around cleanliness and safety that we need to put in place for a restaurant to keep them going?
John Corcoran 8:56
Right now, fortunately, you’re not a fine dining restaurant without any takeout operation. You did take out already? Did you have delivery? Did you have to make any changes in order to be able to shift largely from any in person at all dining to delivery takeout online ordering that sort of thing?
Jon Sherman 9:17
Yeah, I mean, thankfully, as you know, our concept was well situated for this type of environment, even before the pandemic, you know, we had already delivered off premise was already a big part of our business. We built our own ordering website and ordering app. And you know, we already had all that infrastructure set up. And so you know, we just had to lean on that harder, you know, and then offer and really figure out how we can make that even more comfortable for our guests. And so, you know, trying to quickly pivot to things like contactless delivery, which we work with our delivery partner to do and curbside pickup, which we work with our technology partner to do to enable that. So you know, particularly in the suburbs, but even in the city where you could, you know, bring where customers didn’t want to come into the restaurant and stuff. Right. Right. We were able to, you know, enable some of those features. But, you know, again, we were already well situated beforehand. And, you know, additionally, you know, we had a business where some of our some of our best stores in Manhattan, we’re doing 150 plus orders of Campbell in store orders an hour. And, you know, we have stores that have 15 20 seats. So clearly, most people were not dining in already.
John Corcoran 10:32
Yeah, yeah. Yeah, so many restaurants had to do layoffs. And you said you did as well, how did you handle that?
Jon Sherman 10:42
Yeah, so this one, you know, we really, we, we really wanted to be thoughtful about how we did it. I mean, I’m just thinking back to those early days, I recall, like, Come March 17, like the day the city shut down. I mean, I remember hearing from peers and other concepts that they just did, you know, mass layoffs right away, you know, letting go of everybody, except for kind of GMOs, and maybe, you know, AGM and that kind of thing. You know, I wanted to be really, you know, I didn’t want to be too knee jerk, because it’s just, these are people’s lives that were that we’re talking about. And so, you know, what we did was, we waited a couple of weeks to for, you know, felt like at least had a little bit a better understanding of where, where the world was at, and where it was going, at least in the short term. And so, you know, what we did was, we actually, we called, we certainly called each, each team member at all of our restaurants, and, you know, had a conversation with them, you know, explaining to explaining all of the different enhanced unemployment benefits that they could get, and also all of the benefits that we were going to be offering them as part of kind of a voluntary layoff program that we were me know, that we had put together and really asked them, like, you know, dude, are you comfortable coming to work, because if you’re not, then you know, they’re there, then these things will make that a little bit better for you. And so, you know, we reached out, we had around, you know, about 170 employees in our, in our restaurants at the time. And so we reached out to all of them and had these conversations, and I think, probably roughly around a quarter of them came back to us and said that, you know, they really weren’t comfortable working at this time, whether it’s that they take care of a grandparent or, you know, whatever, whatever, or, you know, whatever the reason was, and, you know, that kind of gave us the guidance to say, this is, you know, that’s kind of how we size the layoff. And it really just kind of worked out in terms of the the number of people that we probably didn’t have hours for given the big drop off in demand. And so, you know, we were able to, we didn’t lay off anyone who kind of didn’t volunteer for the program.
John Corcoran 12:50
Well, what was that, like, personally, for you having gone into it in particular, you know, having to lay off people, or at least give them the voluntary option to leave their jobs.
Jon Sherman 13:05
You know, like, it was, it was certainly a hard decision to make, and probably why we waited a few weeks more than some others to make the decision at all. But you know, whether it was employees in the store or employees in the home office, yeah, obviously, I feel like a personal responsibility for their well being. And, you know, that this kind of tries to be a guiding principle. And so, it was, it was challenging, and it was heavy, but, you know, at the same time, like things were happening. So real time and so you had to be so reactive to this thing that no one’s coming. So, you know, it was you didn’t have too much time to stop and reflect because there’s so many moving pieces,
John Corcoran 13:45
right, right. Now, in terms of your staff went down in terms of activity or order numbers or, or overall gross revenue, what kind of you don’t have to give exact numbers, but what what kind of was, was experienced like because, you know, some is interesting, some businesses and 2020 took a big steep dip in in a month or two and then came back very quickly. Was it like that for you? Or was it a slow recovery and you’re still recovering.
Jon Sherman 14:17
We kind of have three different stores in three different types of locations. We have New York City stores that are driven by kind of corporate office traffic, we have New York City stores that are more neighborhood driven. And then we have three stores in New Jersey. And so they kind of each have taken a little bit of a different pattern. New Jersey fell off the hardest, right at first. Two of our three stores are kind of attached to malls and so those malls just, you know, close, you know where it goes down for a couple of weeks there and they are kind of the first two months. And so those, you know, fell off the hardest but then once things started to open up a little bit, they Actually returned really strongly. And, you know, by q3 of last year, those stores in New Jersey were actually doing stronger sales than before the pandemic. Wow, that was an interesting phenomena. But then, you know, as you kind of look at the New York City stores, you know, the ones that are driven by corporate traffic fall off hard and you know, have days day down, they stay down for a while. And you know, while we’re kind of we’re seeing an uptick, really everywhere over the last couple months. Those are still the furthest away from where they were before the pendant. Interesting. I think as we see activity returning, you walk on the streets in New York, and you see a lot of people and you know, like, we’re talking about others with concerts, and like, you know, events are happening again, but the offices are still relatively vacant.
John Corcoran 15:50
Yeah, yeah, where they were,we were talking beforehand, we were talking beforehand about, you know, maybe what you would do differently in retrospect. And, you know, we were talking about how you were geographically concentrated in Manhattan, which was, obviously, heavily hit by the pandemic. But from what you just said, I don’t know if it’s intentional or not, but in a sense, you’re diversified a little bit, you know, you had some stores, and they were driven by corporate traffic, you had some neighborhoods, you had some in Manhattan. So that was kind of a bit of a diversification. But overall, what you know, knowing what you know, now, you know, how do you make different decisions going forward in order to protect your company?
Jon Sherman 16:32
Yeah, well, you know, we hadn’t started to diversify geographically, but we still, you know, in throughout the pandemic, 10 of our 13 stores were in New York City, and, you know, beyond that, the rents that we pay are much higher in New York, and they are outside of New York. So, you know, in terms of our kind of rent obligations, it’s way more than 10 out, you know, it’s, you know, 90 plus percent of our rent obligation is in New York City. And so, yeah, I mean, you know, the market, it was, it was certainly a hot and competitive market to go after the lunch office crowd and all the big fast casual players were all playing in that market and going after these, you know, premier high traffic, Midtown type sites, and, you know, that really drove drove the rents up. And so if you even wanted to compete in that market, before the pandemic, you know, you really had to have to pay up to get to those sites and had, which, you know, I think, frankly, may or may not have been the best decision for our business anyway. You know, but we were still kind of punching above our weight class, you know, before the pandemic, and then obviously, when this happened, you know, in hindsight, we certainly would have made some, you know, different real estate choices sooner.
John Corcoran 17:44
Right, right. Interesting. Any other, you know, learnings from this experience?
Jon Sherman 17:51
I mean, there’s been all sorts of learning. But you know, I guess, on the, you know, on the kind of geography and real estate side, you know, we already know, we already decided that we wanted to move outside of New York, and, you know, we’d kind of tested the suburban market in New Jersey. And, you know, frankly, the pandemics probably have a tailwind for that a bit. But, you know, I think it kind of accelerated that we also, you know, we’re interested in opening up drive thru restaurants. And now I think it is that much more of a focus for this kind of growth plan going forward. But, you know, I think the big chain now is just until, you know, given our exposure in New York already, I think our main focus is really on in the short term is really continue to develop the New York City suburbs and ideally, with with drive thru type locations,
John Corcoran 18:38
right now. A lot of companies restaurants in, especially in fast, casual, quick serve, have had trouble getting good labor, hiring people, you know, go from layoffs to hiring people back because Have you had labor problems hiring people? And if so, what have you done about it?
Jon Sherman 18:58
Yeah, you know, I mean, this is certainly all the talk of the industry right now. And, you know, so I’ve been hearing it from all sorts of places, you know, it has been a little bit of a challenge for us. Although, thankfully, I feel like we were probably in a better situation than others, partially because we maintained such a big portion of our staff and even touching back on the kind of voluntary layoff program that we did, at the start of the pandemic, you know, over the, you know, over the things then we have offered to rehire every single one of those employees, which was part of what we told them then, which is that this is, you know, a temporary thing and when we’re able to rehire you, you know, we will offer it to you before we start hiring externally, and, you know, we did that so, you know, I think that was a way that we’ve been able to keep our teams you know, a bit more intact. But it’s been a challenge you know, we do you know, we’re always kind of a need, you know, people here and there and, you know, it’s certainly a tight market right now. I think, you know, you put up some postings. When we found that a lot of people would reply to the postings, and then when you actually tried to get them in for an interview, they weren’t actually interested in interviewing, they’re satisfying their unemployment. So, you know, we’re frustrated, we certainly saw that and you know, we’re gonna be opening this fall, we’re gonna be opening a new location in Hoboken, New Jersey. And so, you know, I guess we will see then kind of what the labor market you know, hopefully the labor market eases up a little bit because that’s going to be kind of like a focused hiring push that we’ll need to staff. Yeah.
John Corcoran 20:33
Yeah. But Jon, this has been so great. Tell people where people can learn more about you. And also I know you’re launching a new boneless fried dark meat offering which is new for your company and for your restaurant. You mentioned you’ve got a new store that’s opening in New Jersey with their first drive thru restaurant. Anything else that you want to share?
Jon Sherman 20:53
Yeah, definitely. So you know, you guys, check out our website, sticky’s.com and check us out on Instagram. You know, we’re really active there. And yeah, you know, you mentioned the boneless by launch. No, that’s, that’s actually a product that we’re going to be launching at the end of the week. So really, really excited for that. It’s something I personally love. And it’s something we’ve thought about for a long time. And we’ve kind of dabbled with it a little bit. You know, I know when I kind of do my home party trick of cooking fried chicken for people either in my home or in theirs. That’s one of my go to is the boneless thighs. And it’s just, you know, I think it’s just such a delicious product, but not that, you know, obviously, I think our chicken fingers are also delicious. But you know, there are definitely people out there who prefer dark meat, chicken. And so, you know, I’m really excited that we’re able to, we’ve been able to get this going on.
John Corcoran 21:52
There’s been, you know, so much challenge over the last year, so it’s really inspiring to hear your story. Thank you for coming and for sharing it. Of course. Thank you for having me.
Outro 22:02
Thank you for listening to the Smart Business Revolution Podcast with John Corcoran. Find out more at smartbusinessrevolution.com and while you’re there, sign up for our email list and join the revolution. And be listening for the next episode of the Smart Business Revolution Podcast.