When the COVID-19 pandemic started to take effect, Elisia Flores, CEO of L&L Hawaiian Barbecue and company executives embarked on a listening tour with franchisees in 15 states and Japan that resulted in more than 95 percent of the 200 locations to not only remain open, but stay profitable.
Taking this personalized approach helped many quickly adapt and modify operations using problem-solving skills tailored to the unique conditions of their individual markets. For example, the L&L Colorado Springs, Colorado location used a small wagon attached to a remote-controlled car to bring food from the store to the parking lot during curbside delivery, top photo.
Sarah Yee, who owns an L&L franchise in San Antonio, Texas, kept all 16 of her employees working their regular hours while growing her existing customer base. She saw double digit percentage sales increases in March, April and May.
The franchisees were community forward as well. Each Friday, L&L’s social media platforms showcase Acts of Aloha. These included Matt Chang, who owns and operates the L&L location in Point Loma, Calif., donated plate lunches to the UCSD Medical Center. In Los Angeles, the Northridge Hospital Family Medicine Center’s cafeteria had to curtail its hours, which resulted in limited access to on-site meals for staff. Arsen Shahnazarian, who owns one of the longest-running franchises in the area, donated plate lunches to staff after one of the doctors reached out.
Specializing in Hawaii-inspired plate lunches and comfort food since 1976, the brand took other initiatives including:
- Navigated new rules on the fly, while ensuring open lines of communication with its franchisees, who are treated like family – the company’s motto is “We Are Ohana (family).” L&L convened an emergency meeting with leadership, tackling four major issues: safety, marketing, expedited communication and financial assistance.
- Safety: L&L emphasized the importance of following health regulations. Corporate leadership sent the most current information, such as installing plastic shields at cash registers, using enhanced sanitization measures, providing face masks for employees, and installing social-distancing markers.
- Marketing: The company immediately changed its marketing approach to take-out and delivery service only. It created take-out menus, posters, instructions and specials, and increased its marketing budget to communicate the new options.
- Expedited Communication: Timely communication was critical in notifying franchisees about developments relating to safety, marketing, government regulations and financial support. The company sent updates via e-mail, phone calls, text messaging and a variety of video chat and webinar platforms.
- Financial Assistance: L&L implemented a plan to help franchisees financially and to obtain private and government assistance. The company waived its one-percent advertising fee and deferred its three-percent royalty fee for two months. It also helped franchisees (many of whom speak English as a second language) work with their landlords, apply for assistance, establish relationships with banks, and coordinate vendor deferments and contracts.
- As the framework of the CARES Act rolled out, L&L spent hours combing through materials and communicating with their financial team to help franchisees take advantage of funding. Company leadership reached out to each franchisee to make sure they were ready to apply for the Paycheck Protection Program (PPP) when it opened. Flores personally reviewed and followed up on more than 50 PPP applications, and every one of the franchisees who applied received funding, Flores said.
- While all locations offer the brand’s core menu items – such as its signature chicken katsu, SPAM musubi and macaroni salad – they are also allowed to add menu items. L&L also offers a decentralized supply chain with major distribution partners, and franchisees can purchase their main proteins from local sources.
“I don’t know of any other large franchise system that had as generous of a relief package as we have,” Flores added. “Because of the speed and vendor partnerships of our corporate office, along with partnership and communication with our franchisees, we were able to secure much-needed funding.COVID-19 has given our flexible franchise model an opportunity to prove its strength and ability to survive in a constantly changing, and now completely disrupted, industry. This hand holding provided them with crucial liquidity."
Yee said, that while every aspect of our operation has been impacted., there has been a positive side.
"We've always been a close knit team, but the relationships have been further bonded. We check in on their and their family's health; providing them with hand sanitizers and masks."
Yee added that L&L execs have been with her team every step of the way during the pandemic.
"Early on they walked us through the PPP forms and identified lenders who were accepting applications. They hosted video conferences to explain the SBA rules and field questions. They also waived and deferred franchise fees. They have sent out a number of merchandising and training tools to assist in our daily operations. When we encountered beef shortages with our local suppliers, they offered suggestions on menu substitutions. All in all, the corporate leadership and staff have been very responsive and supportive."
For Yee, the future is customer driven.
"Until a vaccine is discovered, we’ll continue to be in a state of flux. I look at my restaurant differently now. I see all the places that can be touched by a person and I figure out how to eliminate that contact or ensure disinfection immediately after. My job is to understand my consumer behavior and stay nimble to meet their expectations. Similarly my staff need to be adaptive. I check out the competition more then ever as I know I don’t have all the answers, but the solutions are out there and I need to stay optimistically creative. I need to be accept all the unknowns, while running a smooth operation."
Flores said L&L's pandemic response aligns with core values of putting franchisees first.
“Our ability to provide a holistic support system to our franchisees during this crisis has allowed us to thrive. And our franchise model allowed for greater flexibility and deeper trust than a traditional franchisor-franchisee relationship. We are are navigating the unknowns and now planning for our new normal together because we know we will come out of this stronger. This keeps dreams alive."