Genghis Grill's operations and strategy adjustments during the COVID-19 pandemic

April 8, 2020
Genghis Grill's operations and strategy adjustments during the COVID-19 pandemic

HOW GENGHIS GRILL IS ADJUSTING ITS OPERATIONS AND STRATEGY AMID THE COVID-19 PANDEMIC

The local restaurant chain has seen slipping sales and has furloughed executive employees, but it continues to work to keep the lights on.

Author: Rebecca Ayers (Dallas Business Journal)

Published: 8:35 PM CDT April 8, 2020

Updated: 8:35 PM CDT April 8, 2020

DALLAS — Genghis Grill has seen slipping sales and has furloughed executive employees, but the restaurant chain is striving to keep the lights on, the company’s president and chief operating officer, Paul Carolan, said.

The Mongolian stir fry fast-casual restaurant chain has seen its sales decline by 80 percent amid the COVID-19 pandemic, Carolan said.

Additionally, the company has furloughed about 90 percent of its corporate employees, including executive employees, Carolan said. The company also had to temporarily furlough about 700 hourly employees, he said. Genghis Grill started 2020 with about 900 employees, but now runs a skeleton crew for both its in-store and corporate employees.

The restaurant chain, which has about 50 restaurants and is one of Irving-based Mongolian Concepts Restaurant Group’s brands, has average topline sales of $1.2 to $1.3 million. The company has only had to temporarily close two restaurants so far, Carolan said, so that the restaurant chain can be better prepared for when things turn back to normal.

“It’s just hard to restart from standing still,” he said.

In 2018, Genghis Grill began focusing more on its carry-out and takeout sales, and eventually partnered with DoorDash in November of 2019 to boost its off-premise dining sales. Coming out of 2019, about 20 percent of its sales came from takeout, which has helped to cushion the blow of the coronavirus, Carolan said.

Carolan said that the company has filed and submitted its paperwork to its lender for the Small Business Administration’s Paycheck Protection Program. Now, Carolan is waiting to hear back on final details and working to decipher the rules and regulations of the program.

“It’s very fluid,” he said.

Carolan spoke with the Dallas Business Journal about how Genghis Grill is innovating amid the pandemic, working with employees and what the rest of the year could look like.

What are the some of the challenges that have stemmed from the pandemic?

I think the hardest part is understanding that each of the municipalities and local governments that we work in – we’re in 15 states – has a different definition of stay-in-place. … We went from fully operational in one state with no changes to right away 100 percent just take-out. But, you have to react quickly. You get a day or two to react, but you have to manage your food inventory.

One of the things we (decided) was, “OK, don’t throw any food out. If food is getting ready, you can’t use it the next day, but it’s still good (food) today. Cook it and give it to the police department, give it to the hospitals. Thank people with the food.” It’d just be totally wasteful to throw it in the trash.

I found as this happened that we’re very creative in how we approach the situation that is put in front of us. As you toggle from one city and one circumstance to the next, you have to be fluid. We’ve reached out to all our vendors, and our vendors have been just tremendous partners with us. … The (vendors are) very appreciative of the situation we’re in. They’re partnering with us how they can with the situation that they’re dealing with.

How is your company working to innovate during this time?

It’s constant communication, constant relationship-building with our teams, and constantly checking in.

The manager in one store may have an idea that we can use and share with another store. Even within the industries, people are sharing information back and forth. It’s a very fluid environment that we’re in.

We went from just doing to-go meals, and now we (put together) instantaneously a meal package that you can combine a handful of things. It’s a whole meal package that’s much more economical for our customers, and we’re launching a meal kit. Our chef took one of our favorite chicken teriyaki recipes, and we’re testing it in three stores to share and sell meal kits that (customers) can take home and cook. But we’re also giving you the recipe along with it.

What long-term effects could these macroeconomic events have on Genghis Grill?

I don’t have that answer. I’d love to tell you things will be perfect, but we don’t know. We don’t know how many restaurants are going to be open. … You don’t know what the economy is going to be.

I do think that there is going to be pent-up demand. … Everybody has the best guess right now. I think what we’re doing is we’re gearing up with plans, (thinking), “OK, how do we start back up? If May 1 is the date, what do we need to get ready to start back up on May 1?”

I think it’s going to be a slow ramp that will pick up pace. If we’re open, we can ramp with the pace of the sales. But staying open, to me, is the key piece. If you close – it’s just hard to start a restaurant up when it’s closed. It’s not the next day (you’re able to start back up). You have to (gather) all your people in. You have to get everything turned on. You have to get everything deep cleaned again.

To read the Dallas Business Journal’s free coronavirus coverage, click here.

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