Operations

The tricky business of covering a QSR's COVID-19 costs

Masks, gloves, anti-viral sprays and all the many other additional costs QSRs have to take on in order to also take on business in a pandemic really add up. But covering those costs can be a slippery slope if not done right.

Image: iStock

July 10, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

A big chunk of COVID-19's collateral damage toll on the restaurant industry has got to be the many added expenses of operating a QSR under the heightened regulations and virtually overnight delivery channel changes that most restaurants have had to handle.

Last month, QSRweb relayed some of the issues encountered by restaurateurs as they have fought to quickly get up to speed on mask-wearing mandates. But at Rewards Network, leaders relay that their restaurant brand customers are bemoaning in ever louder tones the sheer cost of all these extra pandemic-era needs, of which masks are just one element.

The companies clients are stretching to pay for that array of items known as PPE or personal protective equipment, of course, but there are also the costs of employee medical testing and just the additional costs of producing meals in restaurants that now must be sanitized at a microscopic level on a nearly constant basis throughout the operating day.

In some cases, these costs are being grouped in COVID-19 surcharges tacked on to the cost of orders. Invariably though, Rewards Network said its customers have found that this approach can often create as many problems as it solves in an age when brand transparency about everything is essential to today's customer. In many cases, blankly added surcharges just don't spell out what the customer is paying for well enough to do anything but frustrate and often anger the very diner the QSR wants to attract in the first place.

But the costs still remain and must be compensated for, which is why Rewards Network President Steve Fusco said the company compiled a guide on the best approaches to cover these costs in daily restaurant operation

"Restaurants have been hit hard by these costs, so we shared a guide on how to best mitigate these additional expenses while being transparent with customers," Fusco told QSRweb. "Given the already slim margins that most restaurants are operating with, we're hearing from our restaurant partners that these additional costs are adding often intolerable pressure in an volatile consumer landscape and limited capacity laws."

Below are some of the most salient point the company reveals in its guide for recouping some of those COVID-19-related costs without perturbing already pandemic-weary customers.

Beware the phantom

Food sourcing, prep, practices and prices all fall under the heading of things restaurant customers demand transparency about from the brands they patronize. After all, nobody wants to pay for something when they have no idea what the charge is for and phantom charges are so-named because they do just that by putting a charge on the menu with no real breakdown on what it's buying.

Whether the brand labels it COVID-19 surcharge or any other general heading, it's basically telling customers that you, as the operator, just don't care if they're confused or bewildered about what they're buying, "Just trust us." Right.

Rather than trying to covertly recapture dollars in this manner of cloaked charges, the guide encourages operators to be upfront about their needs. This might take the form of table and/or packaging wording explaining the extra products and actions your brand has had to add to give customers a clean, safe place to buy great food during the pandemic.

Then make it plain that in order to feasibly operate and pay for these added costs during the nation's battle with COVID-19, a set charge will be added to each bill. Emphasize the additional percentage of revenue goes directly toward any of the added costs you're covering, like masks, gloves, medical tests and increased sanitation.

Spread it out

Sometimes things like added costs are less onerous when spread out across all the offerings, meaning brands may find a good approach is to increase all menu item prices by a certain percentage across the board. This is something that a typical QSR can also be transparent about through through signage, or packaging modifications that tell customers that the slight increases in menu prices are to offset the many new expenses the brand has incurred to make the restaurant safe and clean for guests during the pandemic.

Be sure to update website menus, post the changes across social media and consider sending an email blast to your database. But, above all, be transparent and tell the story of what the brand is using the extra charges for and that their duration is a temporary thing that will disappear when the added equipment and service needs are no longer required.

Let them lend a (gloved) hand

Customers naturally are not usually aware of the additional work, cost and resource load that COVID-19 has put on restaurant operators, so take time to plainly remind them of such efforts through everything from website, email, table tent and packaging infographics, to social media and in-restaurant conversations about these needs. Show diners exactly where the extra charges are going and what they're paying for and consider even printing something like a piece of COVID-19 health and safety advice on receipts.

Initiatives like these often spur additional monetary help from patrons who want to pitch into the cause at their beloved fast food brand. Remind restaurant staff to reinforce this spirit with customers in their interactions to build that sense of esprit de corps that has been so essential throughout the pandemic.

And speaking of esprit de corps

Remember just as restaurateurs are stretched, many customers are too at this time. Be conscientious of that fact when either adding a COVID-19 charge or increasing prices across the menu. Fair and equitable is the goal, but so is creating an increase that will help the brand without hurting its business and deterring customers.

Communication and transparency about the need and where the added costs are going are the first steps in recovering some of the costs of COVID-19. People want to help, they just have to know how they're helping and why, without breaking their personal piggy banks.

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.