DAWN NIELSEN - COO Kolache Factory

Segment: QSR Units: 57 Locations: 9 U.S. states

HOW HAS COVID-19 AFFECTED YOUR BRAND?

It feels like we are being affected in every way. Obviously, sales are down and that makes everyone nervous, especially the unknown of when things will start to turn around. But we are also taking this opportunity to position ourselves as part of a community effort to “pay it forward.” We have doubled down on our commitment in our communities with our Kolache Factory Cares campaign, a two-pronged initiative: 1) Kolache Factory Cares – Fueling the Frontline, offered medical workers and first responders a free kolache and coffee every day in April; and 2) Kolache Factory Cares – Adopt a Frontline Hero, encourages companies, organizations, or individuals in our community to choose a front-line hero (hospital, clinic, police, or any essential workers) in their community by placing a large kolache order to deliver to those workers. It’s a great way for local businesses that are able, to support front-line workers and local business owners (our franchisees) at a time when they desperately need sales. We hope this really catches on!

WHAT ARE YOU DOING TO HELP YOUR FRANCHISEES THROUGH THIS?

We immediately waived all franchisee fees (royalties, advertising, etc.) that are paid to corporate for the month of April. We have also been providing a steady stream of communication to them about how to handle Covid-19 in stores, suggestions on how they can cut down on inventory, and providing daily marketing and advertising support geared to prepare their stores and help drive sales. We also hope the launch of our Kolache Factory Cares initiatives will help them. Our internal franchisee Facebook page has been buzzing too, as different locations share issues, ideas, and struggles they face. We are all helping each other out and supporting each other the best we can.

HOW ARE YOU HANDLING YOUR CORPORATE EMPLOYEES?

We have reduced hours for employees at the corporate level, but so far we have not had to lay off anyone and we hope to keep it that way. At corporate, we have just a few essential people at the office to handle payroll and accounting. Other employees are picking up paperwork once a week to work from home and come in one day when essential workers are not there (Friday, Saturday, or Sunday). We are not mandating this, but some of them want to come in so they do not get far behind. I'm amazed at how grateful they are to us for how we have handled this and how much they want to help and contribute. Everyone is really pitching in to help keep us moving forward.

HOW ARE YOUR FRANCHISEES HANDLING THEIR EMPLOYEES?

I am really proud of how our franchisees are responding. Most of our franchisees have kept their employees on and are finding creative ways to do so. Some stores have put employees to work on spring cleaning projects, and others have granted vacation to employees who want to use it. Some franchisees have reduced employee hours but are buying them breakfast and lunch each day. At one location, employees banded together and came up with a plan where they voluntarily furlough one day a week without pay on a rotating basis. For example, after four weeks, four different employees have taken days off. This way the franchisee is able to reduce payroll but keep everyone productive on a part-time basis during rotation weeks, and full-time in the other weeks. Employees all felt better that no one was laid off and will be ready to bounce back quickly when all this blows over. I love how the employees worked together on the solution. Of course, some locations have had to lay off workers, which is very hard for them. But they want those folks to be eligible for any relief the government is providing.

WHAT ARE YOUR FRANCHISEES DOING FOR THEIR CUSTOMERS?

In April, as noted above, we offered free breakfast to go (kolache and coffee) for medical workers and first responders. We are offering takeout, curbside, and delivery orders as quickly and safely as possible. We are so appreciative of all of our customers who are making an effort to support us during this uncertain time.

HOW DO YOU SEE THE FUTURE OF YOUR BRAND, OPERATIONS, MARKET, ETC. POST–COVID-19?

I predict a bright future for our brand and expect things to fully rebound in 3 to 6 months. My hope is, despite the pain and hardships Covid-19 is inflicting on the economy and all Americans right now, that it will make everyone a little kinder, a bit more compassionate. I believe we will come out of this and people will be eager to get back to life as they knew it and come to appreciate normal routines, like stopping in for their daily kolache and coffee on their way to work. The big question is… when? The economy will certainly go through a down cycle, but our bakery-cafe offers products at a fairly recession-proof price point, so I don’t think we will face the uphill climb some other industries might face.

From an operational standpoint, this has taught us to be lean, and those are good lessons to learn. I foresee changes in cleaning and sterilizing procedures and possibly how we interact with our guests. I think the new measures we have put into place will no doubt remain, and I would not be surprised if local health departments or the FDA set new standards. Sneeze guards are already going up at grocery stores and my guess is, once put up, they will not come down. I do hope once things get back to normal, we will still have the ability to provide a welcoming and personalized experience for our guests. I would hate to see all of our environments become sterile and impersonal. I believe our biggest periods of growth come out of adversity and expect that, ultimately, we will grow as a country and as a brand. Kolache Factory is doing all it can not only to support our franchisees in word and action, we are also actively supporting our communities. My hope is that our brand emerges even stronger as a result of how we conducted ourselves in the tough times. Not unlike other wartime efforts, I am seeing a new national unity. Who knows, we may be part of the next Great Generation.