<Successful recovery tactics.
Pat & Oscar?s
During an outbreak of E. coli Pat & Oscar?s lost 70% of its business in some units.
The company reacted as follows:
They emailed and called every general manager at each of its units and
ordered them to discard all produce and any other suspicious food that
could be contaminated.
They coordinated its own private investigation with state and county
health officials to pinpoint the source of the outbreak.
The distributor of the lettuce was fired and a new supplier found.
Within eight to 10 days they made a public statement making customers
aware of their concern. They apologised and mentioned the link to
school illnesses also caused by the distributor?s lettuce to distance
the outbreak from the restaurant.
Camera crews were invited. They sent food to news crews and published
a full-page ad in the local San Diego newspaper offering three days of
free pizza, salad and breadsticks in 10 units. While customers waited
for hours in line they were entertained by clowns and jugglers.
The also published an 800 number offering customers the opportunity to
call in with their medical claims which they paid in full. (Source:
Damage Control. Pat & Oscar?s wins back customers after E. coli
outbreak. By Christine Zimmerman. Chainleader.com.)
http://www.chainleader.com/archive/0304/foodsafety.htm
Foodmaker Inc. (Jack In The Box) used a combination of
crisis-management moves, new food-safety standards and marketing to
recover from the bad publicity generated by an E. coli outbreak The
company immediately accepted blame and quickly settled law suits.
Chairman and Chief executive, Jack Goodall and Chief operating
officer, Robert Nugent often attended mediation hearings in person. An
independent food-safety consultant, Dr. David Theno, was appointed to
review product safety. A week after the crisis, Theno began
investigating where Foodmaker bought its food, how it was distributed
and how it was prepared. Theno's adopted a food-handling program
developed by NASA in the 1960s to ensure sterile food for astronauts.
The company then re-introduced the company mascot, Jack, back into
ads. (Source: Southern California Spotlight; Foodmaker Inc. Isn't
Clowning Around; Restaurants: Written Off After 1993's E. coli
Outbreak, Jack In The Box is Back. Bloomberg News.)
http://www.marlerclark.com/news/jackbox8.htm
Robert Nugent describes the two-step formula for recovery.
1. Commit all resources to regaining the public?s trust.
They ensured the safety of their food from farm to fork which included:
Developing the industry?s premier food safety system.
More stringent requirements for meat suppliers.
Microbiological testing of meat.
Developing stronger food safety laws with legislators.
Creating a customer relations department.
2. Spread the word.
Launching a national public relations campaign.
Keeping investors, financial analysts and bankers informed about how
the company intended to recover.
(Source: How to Recover from a Nightmare. By Robert Nugent. Horizons
Magazine. Food Engineering.)
http://www.horizons.uc.edu/expertadviceMay02/tips15Nugen.htm
This article describes the Jack in the Box, We Won?t Make It ?Til You
Order, marketing campaign in 1998. According to Quick-Track, in 1996,
the restaurant ranked last in quality of ingredients and next last in
taste or flavour of food. The aims were to increase sales and to
improve relative standing on food quality and food taste. (Source:
Effie Awards Brief of Effectiveness.)
http://64.233.183.104/search?q=cache:FbIjV9MVVJEJ:www.effie.org/award_winners/images/162_2000.pdf+restaurant+%22e-coli%22+%22to+recover%22&hl=en
Wimpy and BSE.
Faced with the BSE crisis, UK burger chain Wimpy had to withdraw from
using British beef and destroyed all the beef stocks from every Wimpy
restaurant. It took Wimpy only five days to get newly produced
non-British beef products into their restaurants.
Just five weeks to the day after the crisis broke, Wimpy launched a
supplementary menu which contained ten new product lines, none of
which contained beef. The new menu was developed, sourced, printed and
distributed in five weeks. When the crisis was over Wimpy announced
their return to British beef, gaining tremendous press coverage and a
mention in Parliament. They secured their supply lines and had an
audit trail in place for all beef supplied, right back to the farm.
This was implemented in addition to the Government emergency order
guaranteeing that all beef used is less than 30 months old. In
undertaking this move Wimpy became spokesperson for the industry.
(Source: British Franchise Association.)
http://www.british-franchise.org/casestudies.asp?id=67
Lizard head in salad.
Three separate sections of the same lizard turned up in food at an
eastern Iowa restaurant. Applebee's believes the small `fence lizard'
imbedded itself in a head of lettuce delivered from California, to its
restaurant in Coralville. Health inspectors say there was never any
public health risk. They believe this was an isolated incident and
cite good marks for safety rankings in the past. (Source: Angie Hunt.
Free Republic)
http://209.157.64.200/focus/f-news/909339/posts
Apple Corp. LP, the owner of the Applebee's restaurant, issued a
statement Friday. In it, the corporation apologized and said it had
confirmed it was an isolated incident. The restaurant is now using
pre-cut, pre-cleaned lettuce for its salads, the statement said.
(Source: No Salmonella In Applebee?s Lizard-Head Salad. Associated
Press. May 12, 2003).
http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2003/05/12/MNlizard.DTL
Applebee's sent out coupons to local residents offering a free meal if
you buy one. (Source: Applebees Has No More Plans For Lizard Head
Salad. Applebee?s puts lizard behind it. Seung Min Kim. Daily Iowan.
6.10. 2003.)
http://www.june24.net/antioch-road/posts/000046.html
Thumb in salad
A woman found the severed tip of a thumb in her lunch salad at Red
Robin Gourment Burgers. Red Robin spokesman Dwayne Chambers said
employees, in their haste to get the injured man to a doctor, failed
to follow the chain's procedures and throw out all food in the area.
"We clearly had a breakdown," he said. "We are incredibly sorry about
what happened."
Chambers said he spoke with the woman. "She obviously was pretty
upset," he said. (Source: CNN.com.)
http://www.cnn.com/2004/US/Midwest/03/05/offbeat.fingertip.food.ap/
Quick reaction by Wendy?s helped to support the case for a hoax.
In 1995, a Wendy?s customer claimed that she bit into the head of a
mouse imbedded in her chili. The day after the alleged incident, the
woman went to local television stations, and the story received
considerable play in the New York metropolitan market.
The franchisee immediately impounded that batch of chili and sent it
to an independent lab for testing. The lab report found no rodent
presence in the chilli. Wendy?s claim that this case is a hoax. They
also asked the health department to inspect the restaurant right after
the incident, and the health department reported that the restaurant
was clean. There had also been a health department inspection three
days earlier which found the restaurant clean. The case is still
pending but the actions of the company have helped to build up a
strong defence. (Source: Workplace Torts: Preventing an Overindulgence
in Just Desserts. By Jay Iwanowski. Restaurants USA online.)
http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=102
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How to handle the crisis.
The National Restaurant Association provides Crisis Communication Services.
The PROTECT program makes preparatory and rapid-response crisis
communications services available to members. Food safety issues are
the highest priority of our industry. PROTECT offers media training,
emergency response exercises, crisis communications plan development
and risk assessment and audits at discounted rates to members.
For further information telephone
202-289-4001.
http://www.restaurant.org/join/services.cfm
According to Protect the five steps to take immediately are:
1. Form a crisis management team.
2. Gather and understand the facts.
3. Take control.
4. Decide on a strategy.
5. Prepare to actively engage the media.
http://www.crisissupport.com/
This case study looks at how an E. coli outbreak was dealt with by a
Steak House restaurant. Steps that were taken included:
To prepare an immediate response plan.
To organise an independent review of the cases by third-party experts.
To organise an independent review of the company?s food handling processes.
To co-operate with local/state/regional health officials.
Immediate measures were taken to remove any potential sources of contamination.
Instruction were issued that all request from customers for rare,
medium-rare or medium cooked meat were to be denied.
Monitoring the media.
A call center was established with scripted responses provided.
(!Manage This! The Challenge ? Effectively Communicate in a Crisis. By
David A. Fuscus.)
http://www.bernsteincrisismanagement.com/nl/crisismgr020601.html
This article describes how to react when faced with a law suit. It
advises ensuring your attorney is representing you and acting in your
best interests. Simply handing over a case to an insurance company can
be a recipe for disaster as they will be more interested in cutting
their losses which may do serious harm to a restaurant. This situation
was apparent in the Jack in the Box case resulting in the original law
firms being replaced. Jack in the Box ensured the victims were cared
for, acknowledged that it had a problem and demonstrated that it was
willing and determined to fix it. This article suggests that at the
discovery phase neglecting to disclose information can result in a
company digging itself into a bigger hole. If your company is at
fault, the settlement must also be accompanied by a company-wide
commitment to improve operations to assure that such an event will not
occur again. Make sure that injured parties are adequately compensated
quickly and without hassle, announce plans to improve and follow
through with those plans. (Avoiding courtroom drama. By Richard F.
Stier.)
http://www.foodengineeringmag.com/CDA/ArticleInformation/features/BNP__Features__Item/0,6330,132551,00.html
The Essential Guide to Managing Corporate Crises: A Step-By-Step
Handbook for Surviving Major Catastrophes. By Ian I. Mitroff,
Christine M. Pearson, L. Katharine Harrington. Oxford University
Press. ISBN 0195097440. $35.00.
The authors, academics and consultants in crisis management, explain
how to assess a company's strengths and vulnerabilities before a
crisis happens, how to handle a crisis once it hits (including what to
do if there has not been any pre-crisis planning), and how to learn
from a crisis so that future problems can be minimized.
http://www.amazon.com/exec/obidos/tg/detail/-/0195097440/002-0272331-3564015?v=glance
---------------------------------------------------------------
Time taken to recover sales.
It took Jack in the Box 2 years to recover from the E. coli outbreak
in 1993. Initially the crisis was not handled well with the company
not addressing the public until two days after one of their suppliers
had been discovered as the source of the bad meat. It was a few days
before the stores were shut. This article then goes on to describe the
steps taken to recover including introducing a new cooking procedure.
(Source: The Ethical Edge by Jon Entine. November/December 1999.
Business Digest.)
http://www.jonentine.com/ethical_edge/jack_crisis.htm
When Hudson Beef, one of Burger King's major hamburger suppliers, was
hit with an E. coli outbreak last year, sales took eight months to
recover even though no fast-food customers got sick.
http://64.233.183.104/search?q=cache:K1866DdQ5eAJ:www.spcnetwork.com/mii/1998/980906.htm+restaurant+%22sales+took%22++%22to+recover%22&hl=en
Some companies never recover.
Chi-chi?s Mexican Restaurants failed to recover after an outbreak of
Hepatitis A that killed 4 people and made 660 sick. The outbreak was
caused by contaminated onions and not the restaurants food-handling
practices. After closing Nov. 3 when diners began to fall ill with
hepatitis A, which attacks the liver, the Beaver location reopened
with fanfare on Jan. 15, publicizing a stringent new set of
cleanliness standards. (Mexican chain closes for good. By Kim Leonard
and Sam Spatter. Pittsburgh Tribune-Review. September 22, 2004.)
http://www.pittsburghlive.com/x/tribune-review/business/s_253745.html
------------------------------------------------------
Effects.
Food poisoning cases in one restaurant can have a knock-on effect in
others. This article shows how a death in after contamination with
shigella bacteria at a restaurant in Redwood City resulted in a 50%
drop in business at other local Mexican restaurants. A sign explaining
the predicament to customers was quickly tacked up in several
restaurants' windows. But the notices have done little to bolster
sales. (Source: 50% Sales Drop Since News of Food Poisoning.
HyGenius).
http://users.aol.com/comcontrol/ITN11102K.htm
The National Restaurant Association estimates that an outbreak of
food-born illness costs a business more than $75,000.
http://66.102.9.104/search?q=cache:242nqrIrRzYJ:www.commercialdiplomacy.org/pdf/ma_projects/stoffers_jill.pdf+%22food+poisoning%22+%22sales+fell%22+restaurant&hl=en>
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<Additional links:>
<This article looks at a fictional case study and discusses the best
approaches to take in dealing with the crisis.
Seven dimensions of crisis communication management: A strategic
analysis and planning model. By James E. Lukaszewski, APR, Fellow
PRSA.>
<http://www.e911.com/monos/A001.html>
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<Search strategy:>
<restaurant "sales took" "to recover">
<://www.google.com/search?hl=en&lr=&q=restaurant+%22sales+took%22++%22to+recover%22>
<restaurant "e-coli" "to recover">
<://www.google.com/search?q=restaurant+%22e-coli%22+%22to+recover%22&hl=en&lr=&start=40&sa=N>
<"jack in the box" "e coli">
<://www.google.com/search?hl=en&lr=&q=%22jack+in+the+box%22+%22e+coli%22>
<Hope this helps.> |
