Coronavirus Diaries From the C-Suite
How We’re Pivoting Our Sandwich Chain to Avoid Layoffs
After sales plunged 40% in one month, a Midwest franchise grapples with how to hold onto talent
For Christine Specht, there has never been life without Cousins Subs. Her father, Bill, co-founded the Milwaukee-based sub sandwich chain in 1972, two years before she was born. She joined as the company’s human resources manager in 2001, became the COO in 2008 during the Great Recession, and took over as CEO in 2015, after her father retired. Now, as the pandemic has gutted much of the restaurant industry, Specht is fighting to keep the doors open. Her company’s sales have plummeted 40% over the past month, and 11 of the company’s 72 franchises have shuttered. Specht is now working out of the company’s corporate office in the greater Milwaukee area, while her husband J.J. stays home with their two young sons, ages 4 and 7, while school is shut down. Specht spoke with Marker about the importance of doing everything possible to hang on to your team during a crisis.
During the financial crisis I was COO of Cousins Subs, and that was a wild time. We ended up consolidating our franchise partners and focusing on a remodeling initiative to strengthen our brand. From 2011 to 2016 we closed 40 of our 140 stores. We also went from nearly 100 franchise partners in 2008 to 39, many of whom own multiple locations. Having fewer franchise partners has strengthened relationships with our franchise community and increased our restaurants’ average unit volumes. We came out of that recession, but we certainly didn’t have the overnight sales declines like we are seeing today.
Since the weekend of March 14, we’ve been trending down about 40% in sales. We’re in complete cash preservation mode right now. The decision-making process for cash flow has revolved around trying to preserve our people. There are around 40 who work at our corporate support center, and about 350 employees that work in our 27 restaurants. The remaining 72 restaurants are franchises that employ their own workers.
On Friday, March 27th, we put in place salary reductions for my support center team that ranged anywhere from 20% to 50% depending on the position. That…
