Fonzie said it best.

“I was Wrrrrr, I was wrrrrr". He couldn’t spit it out to Ralph Malph in a classic episode of Happy Days. Fonzie, choked on the realisation that he'd made a mistake, he was wrong. Our industry, got it wrong. To Rrrrright the wrongs, we need to consider the 5 R’s (Thanks McKinsey & Company)

R.1 - Resolve

Address the immediate challenges that COVID-19 represents to our business, our people, our customers, technology and the supply chain that are partners in our business.

R.2 - Resilience

Address near term cash management challenges and broader resilience issues including the health and well being of ourselves, our families and our staff. Consider the investment of retaining a core group of people (and yes, paying Super) on the mental health of your business and the members of it, including yourselves.

R.3 - Return

Create a detailed plan to return the business to the ‘new normal’. Consider new business models, seating plans, technologies, service models and cost saving measures. Put a microscope on everything from financed equipment to insurance and utilities. Start a conversation with suppliers to see what a new supply agreement might look like with stricter credit terms as a negotiation piece to reduce pricing. Call your landlord and arrange a meeting ( to discuss the remainder of your term and what an option extension might look like. Open your books and provide new forecasts to demonstrate what your business can afford to pay (my suggestion is a base rent or greater variable pegged to 5% of sales) which will allow the landlord to benefit if trade recovers and allow you to recover. ScoMo’s idea to start a conversation is a good one. I hope Landlords heed the call. Unite in a voice to abolish Payroll Tax and eliminate Penalty Rates. It’s simply good business practice. We have grown lazy, it’s time to get fit.

R.4 - Re-imagination

Re-imagine the new normal. What does it look like? Close your eyes, what do you see? I see technology, altered table plans, reduced service models, lower cost of food (smaller portions, cheaper ingredients, production on scale, cryo vacs, freezers and smaller menus). I see proper COGS pegged at less than 25% of price. If you can’t put it on the table with a 75% gross margin, it doesn't go on the menu. Smaller wine lists, smaller beer offers and greater focus on clarity of offer and brand. Wha are you going to stand for post the crisis? What do you do well and better than your competitors. What do you stand for?

R.5 - Reform (My favourite)

There are 4 cornerstones of cost in our industry and all require reform. Some major, some minor. COGS, WAGES, RENT & TAXES. Enough said.

126 views0 comments

Recent Posts

See All



Subscribe Form

  • Facebook
  • Twitter
  • LinkedIn

©2020 by HOSPITALITY VETERAN. Proudly created with