Michael McHenry is no stranger to solving problems. In fact, the founder and CEO of the McHenry Group thrives on brainstorming solutions and maximizing potential—qualities that earned him the Restaurateur of the Year award from the Utah Restaurant Association in 2018.
But when McHenry was peering into 2020 he imagined he’d be facing the challenges of opening a new restaurant and growing business at the existing two. He didn’t anticipate a worldwide pandemic.
The McHenry Group, which was launched nearly two years ago encompasses three restaurant concepts, Oak Wood Fire Kitchen, Ginger Street, and Dirty Bird, the last of which opened its doors less than three months ago.
“I thought I’d timed this perfectly like, ‘Let’s get off the ground in January; we’ll get operations underway, and … we’re going to be building momentum as we spring into spring.’ March is typically one of the biggest, busiest months of the year for restaurants,” McHenry says. “And here we are: slammed with this pandemic going, ‘OK, this is not what we intended.’ Even our contingency plans from three weeks ago, our worst-case scenarios are almost our best case scenario [now].”
McHenry says the metrics he’s encountered suggest that restaurants still offering takeout and delivery have witnessed a near 80 percent loss of revenue. Findings from the NPD Group support this supposition: The week ending March 22 marked a 34 percent decline in transaction amounts at quick-service restaurants and a staggering 71 decrease at full-service establishments when compared to the same period last year.
The McHenry Group comprises both service models. Located in the bustling downtown of Salt Lake City, fast casual Ginger Street specializes in Southeast Asian hawker-style street food with a streamlined menu of dumplings, crispy rolls, and steamed buns. Nashville hot chicken concept Dirty Bird landed in The Hut, a food hall in Provo, which is about an hour south of the capital The group’s first concept, Oak Wood Fire Kitchen, is a casual, full-service restaurant in Draper, (about 20 minutes from Salt Lake proper) that specializes in wood-fired pizza, pasta, and small and large plates.
Helmed by chef Brandon Price, Oak Wood is the concept that required the most modification to fit within the COVID-19 restrictions.
During the first two weeks of the dine-in ban, Michael McHenry’s restaurants focused on tweaking operations to accommodate off-premises.
“It’s really about having to identify how we shape our full-service businesses into takeout, curbside, and delivery,” McHenry says. Pizza may be the golden child of delivery and off-premises, but Oak Wood was designed for dine-in with booths, tables, a bar, and an open kitchen. Adapting the business meant designating specific areas for delivery and takeout, adding curbside service, and implementing online orders. The McHenry Group was also proactive in its third-party delivery negotiations, leading DoorDash to step in and offer free delivery service.
Another crucial element that can be lost in translation from on- to off-premises dining is the people element. For safety reasons, exchanges with customers picking up orders is minimized, leaving a hole where organic interactions would normally take place.
“In the industry, we’ve always been safe and sanitary, but today, more than ever, there’s added discipline to make sure that we’re creating a good barrier. When you come from the hospitality business, that’s really difficult to do. All you want to do is be right there, front and center with every person and every experience,” McHenry says. “We work side by side, we hug our customers—that’s just the hospitality business.”
During the first two weeks of the dine-in ban, the restaurants focused on tweaking operations to accommodate off-premises. Now, McHenry is working on engagement. If he and his staff can’t have conversations with their patrons in person, he’s determined to find other channels. In addition to promoting daily specials, McHenry is also posting videos and interacting with fans on social media.
“Social platforms—Instagram specifically—in our business, it’s like the new host stand and server. It’s really that interactive,” McHenry says. “I think now there are so many people at home, craving that kind of social engagement. … I can’t think of a better way to market your business and stay relevant in the communities that you love and that you serve than to do it on social media.”
Like many restaurateurs, McHenry has come to grips with the possibility that the shutdowns and dine-in bans could stretch beyond weeks and into months. Most operators have already had to lay off or furlough most if not all of their staff and are struggling to make rent. Even restaurants performing well in the off-premises arena have lost a sizable amount of revenue. Some that have closed their doors may never open them again.
It’s a chilling reality facing all business owners in foodservice and beyond. But, true to his own spirit of innovation, McHenry chooses to view the current predicament as an opportunity to become a stronger company and stay nimble.
“Right now we have to realize that how we used to do business is forever changed,” McHenry says. “You’ve got to forget where you used to be, and you’ve got to go all in on where you are today and find out how you either adapt your current business or you evolve into a new business that can entertain in today’s market.”
For more insights from McHenry, stream the podcast above.
