Waffle House’s 'Best-Kept Secret' Is Out

Every manager in operations throughout the company started at Waffle House as a single-unit manager. Every promotion, at every tier, has been from within.

A key to this longevity is the fact managers are offered annual stock options based on a percentage of their compensation. Career stock options are granted at hire and with each promotion.

“We don’t bring anybody in,” Mizell says. “So that creates a strong culture. As you can imagine, if we only promote from within, retention has got to be pretty good, right? We can’t bet on stealing other people’s top management or senior management.”

Waffle House’s single-unit managers can evolve to district, overseeing three stores. And then divisions, with nine. Further up is area and region leaders, which direct anywhere between 20–30 locations and SVP, whose responsibilities cover 60–100 restaurants. EVPs are the level above.

But again, each tenured manager began with one store.

Waffle House leans heavily into performance-based growth. The stock options, in particular, are long-term career investments somebody makes in themselves as well as Waffle House, Mizell says. “We’re a privately held company,” he explains. “So we make money, our stock price goes up. It’s like you have stake in how well your stock does—the better you perform, the better your stock does.”

At the cook level, which Waffle House calls “grill operators,” there are three tiers (master and rock star are the next two up) and the better the skillset, the higher up the pay scale they go. They can become second or third shift supervisors, too. But all cooks are awarded bonuses based on the volume they cook each day. Once certified, pay rates range from $10–$16 per hour.

One of the most fabled of Waffle House’s perks is the “6 Days On, 2 Days Off Guaranteed” schedule it offers to managers. It’s as it sounds—six days on shift, two on break. “That’s kind of unheard of,” Mizell says.

More typical in the industry, at this level, is a “6 and 1” setup. Waffle House rotates the schedule and sets it at the beginning of each year so managers can plot time off, if they choose. So one week, somebody might have Monday, Tuesday off. The next, Tuesday, Wednesday. Etc.

“We take those off days very seriously,” Mizell says. “We do not let people work on them. If you are off, you are off.” District managers cover the days.

Waffle House managers also get three vacations per year. Essentially, they take the six days off three times, which amounts to three 10-day paid vacations.

At some of the senior levels (division manager and up), Waffle House has a “trip rewards” perk that used to be decided by an in-house competition. But in the last year, the chain decided to mirror the rewards systems generally associated with hotel or credit card systems—earn points based on performance and graduate into tiers. As you hit a certain level, kind of like sky miles, you earn a trip where Waffle House fronts a portion of the expenses.

All in, Mizell says, Waffle House’s compensation is competitive even without considering the additional carrots. Unit managers (in charge of a restaurant, with performance-based pay available) earn between $50,000–$65,000; district managers (responsible for two to three unit managers) $70,000–$98,000; and division managers (overseeing two or three district managers) $95,000–$120,000.

For going on 40 years, Boss says, hourly employees have had paid-time off at Waffle House. The company used to call it “vacation pay,” but a new generation of workers didn’t always connect the dots. In the last two years, Waffle House started calling it “paid time off,” and pays it in advance quarterly. Employees can use it however they wish as it accrues an hour for every 30 hours worked starting on day one. “It provides that option for even better flexibility than the flexibility they have with the job,” she says. “They can take a shift that actually fits their lifestyle.” Waffle House is a 24/7 operation and this comes into play with flexibility as well. There are employees, Boss says, who tap late schedules to free up their days.

Plus, workers can switch out shifts and adjust on the go. “That flexibility has always been key to what we offer at Waffle House,” Boss says. “Particularly at the hourly level.”

Continuing on from the 1980s, hourly employees have access to medical, dental, vision, and life insurance (there are three medical plans to pick from). Full-timers are eligible to enroll immediately with coverage beginning 30 days later.

Hourly employees, too, can purchase Waffle House stock for up to 10 percent of their pay after a year on the job. The company offers paid maternity leave of up to eight weeks (after two years). Also, Waffle House has direct deposit or pay cards to provide electronic pay each week.

Mizell says the brand has been working to get fully staffed—or close to it. Dining rooms, at least with social distancing, began to reopen in summer 2020 thanks to Waffle House’s dense Southeast footprint. “The majority of folks did come back,” he says. “We just need a few more to come back.”

Boss adds Waffle House navigated, and continues to address, the realities of today’s hiring climate. One point being the depth of people who left the hourly workforce due to childcare issues. Throughout the pandemic, women have been more likely than men to quit their jobs. Boss says Waffle House “lost a lot of women” who traditionally filled its ranks and were long-term employees.

She says some current, pressing issues trace back to the outset of COVID and the broader message presented by regulators. Namely, the line drawn between what jobs were considered essential and which were not.

“And the bottom line,” Boss says, “is every job that is out there is essential to the person who has it.”

The definitions created a lot of consternation on Main Street and in the workforce, she adds. It compounded for hospitality since officials commonly, and from the beginning, encouraged caution with dining at restaurants.

Pre-COVID, Boss points out, about 49 percent of all calories consumed came from restaurants. “So to make that key switch, the people having to go back to grocery stores to be able to cook their own food and meals—that was a huge shock to the system,” she says.

Yet the positive spin is what’s unfolding today: the “roar” in pent-up demand to get back to how things were Boss referenced earlier. And so, the employee angle factors in again.

When it comes to topics like sanitation and the “cleanliness theater” born by a more conscious consumer, it’s been a natural reaction, Boss says. Restaurants were always held to high food safety standards. “It wasn’t really difficult for us to enhance those measures,” she says. Waffle House cleans more frequently—and visibly—than before. Air inside restaurants turns over about every 10 minutes, and always has, Boss says. “There are a lot of things that restaurants were already primed to do, or were doing,” she says. “And they didn’t get the credit for.”

But having enough employees to satisfy that pent-up demand is the challenge. As of January, restaurants industry-wide were operating with fewer hourly staff than they did pre-pandemic, in 2019, per Black Box Intelligence.

“People who may not have frequented restaurants as often are now frequenting them more often,” Boss says. “And when you have the imbalance of the proper staffing numbers, we know how many people it takes to properly staff our restaurants; to be able to take care of crowds of people. When that is not present, it makes it very difficult on both our staff and the customer. So there’s frustrations going both ways.”

The median quick-service restaurant ran with 4.4 percent fewer hourly crew members per unit than two years ago, according to Black Box. Or one fewer hourly employee per restaurant. In full service, it was about 11 percent down in the front-of-house and 6 percent in the back.

It’s why, for Waffle House, retention surged to the forefront. When it gets great employees, it’s going to do everything it can to keep them, Mizell says. And that starts with sharing the message, both from a career potential standpoint as well as a quality-of-life one.

“You can build up a really good nest egg and we think it’s probably the best wealth generating deal that’s out there,” he says of the stock options in particular. “Not just in the restaurant industry, but just about anywhere.”

Waffle House’s off-premises business “probably doubled” during the height of lockdowns, Mizell adds. It’s still far higher than it was three years ago. In a way, he says, the fact people got used to it created a habit that’s likely to stick. Waffle House might just have expanded its customer base along the way.

However, reactions like selling sacks of hash browns to guests and rolling up food trucks, were pandemic success stories more than lasting changes in Waffle House’s DNA. As Boss noted, the brand is going to empty the playbook from a staffing and operations perspective to provide the experience it’s known for.

“Until our workers figure out how to remote what they do in the restaurant—remote the food—it’s just not going to work,” she says. “We’re not in George Jetson land yet.”

If everyone else pushes their chips on that table, Waffle House will consider it a win.

“We welcome it,” Boss adds. “Because that means we’ll be the only game in town where you can still enjoy that person contact.”