Market Immersion Key After Panera Acquisition
M&A continues at a frantic pace in the restaurant world, and the number of restaurants changing hands is just incredible. The tactics to integrate those restaurants into a new organization vary from company to company, but the cultural efforts are getting more important with the incredible competition for labor.
When Mike Hamra, the founder and CEO of Hamra Enterprises (No. 38 on the 2018 Restaurant 200), acquired a handful of Memphis, Tennessee-area Panera Bread cafes, he said integration didn’t only mean systems and processes; the most important part was building trust with the new Hamra employees.
“We had a couple weeks where we spent a few days in the market going around to the stores and being in the stores and with the people to get to know them,” said Hamra.
That’s nothing unheard of, but with competitors offering what Hamra called “bright shiny objects” left and right, a ownership change is a critical time to demonstrate that the new owners are there to support the staff. Just taking care of that wonky coffee maker or fixing that enormous pothole goes a long way.
“One of the things we do almost immediately is look where there’s money to put back into the facilities: fix equipment and do things that have been ignored in the past,” said Hamra. “We create a list to make sure those things get addressed. That’s showing them that we’re in it, that we’re here not just to generate sales but to be here and support you and put money back into the facility.”
The acquisition of 13 Panera locations was a bit of a market hop for the Missouri-based Hamra. He said that makes the cultural inclusion post sale even more important. With 91 Wendy’s, nine Noodles and now 70 Panera locations, employees can get pretty wary about the new, big owner.
“We have to create trust. A lot of people fear change, it’s hard to communicate to employees in an employee meeting when they’re first finding out who you are,” said Hamra. “You can share PowerPoints and talk about benefits, and talk about who you are. But that doesn’t really resonate until what your sharing in that meeting is true. That takes time, to trust who you say you are as an organization.”
He said since the early March acquisition, the new locations are already seeing a bit of a bump in sales even without pushing marketing quite yet.
“A lot of that is just around supporting teams in the store, it’s less about going out and putting marketing dollars out. It’s more about getting people to take care of the guest, basic blocking and tackling,” said Hamra.
He said all this is the same reason he’s pushing for more locations under Panera’s new owner, the Luxembourg-based JAB that owns a huge chuck of the American coffee and café market. Since going private, he said the franchisees are getting similar support from the new owner, with an eye on what makes their lives better.
“One thing that was really had to get my head around was the new leadership. This is a completely different regime since the company was taken private under JAB,” said Hamra. "But I think they’re more aligned with the franchisee than they ever have been.”
He said while they’re still a far-off ownership group with little by way of direct communication, a renewed focus on the bottom line has Hamra and other operators eager for the future.
“When we were publicly held, there was a strong focus on top line sales, we still are but more in the way that it affects restaurant level EBTIDA. That’s one of the biggest changes in how the business is managed today,” said Hamra. “That creates a much better bond between franchisees and franchisor.”