How are you handling the challenge of finding and paying employees at your restaurants?

One of the biggest operational issues facing the restaurant industry today is being able to find, pay, and retain good employees. Restaurants often employ younger workers, and by nature, turnover is common. However, being able to hire the right staff and keep them happy creates a positive environment that can go a long way to the success of the business.

Franchise Update wanted to know how some multi-unit restaurant operators are handling this challenge. A few said they advertise open positions through social media or recruiting platforms. Others lean on connections or referrals from current employees. The latter approach comes with a built-in level of trust and may help develop a closer-knit work environment.

Several franchisees said creating a positive culture with true connections and a sense of appreciation for the staff can lead to greater employee retention. While that may help, keeping the best employees often comes down to financial compensation. To both attract and retain employees, some operators say they are offering competitive pay, strong benefits packages, and incentives. Others say they are invested in the growth and development of their employees, which can lead to promotions and increased pay.

The issue of employee compensation leads to this week’s Franchisee Bytes section, in which we asked other restaurant franchisees about the current laws and regulations that are impacting their businesses. Many pointed to the high minimum wage rates in some states, particularly in California. Others cited factors such as overtime pay, vacation time, scheduling, and tariffs. Read how they are handling some of the biggest challenges presented by the current laws impacting the restaurant industry.

Lisa Starnes

Company: Starnes Holdings, Inc.

Brands: 8 Captain D’s

Years in Franchising: 31

Staffing is critical and increasingly difficult in this current environment. We utilize social media to advertise employment opportunities and offer competitive pay. We have enhanced our benefit package, which includes health insurance, paid vacations, and an awards network (our associates receive an award after one, three, and five years, and at each following five-year interval). This year, for the first time, we are offering a 401k. We appreciate our team and want to demonstrate that in a tangible way.

Once on board, Captain D’s offers a great training program for our recruits (as well as ongoing training for our seasoned crew). We cross-train, which is a real asset as it provides more flexibility for our company and employees. As in any business, knowledge is power.

Rey Vasquez

Company: Vasquez Hospitality

Brands: 25 Golden Corrals

Years in Franchising: 13

The hiring landscape has improved since the peak of the pandemic, and it’s evident that the workforce is bouncing back stronger. My team and I have a people-first philosophy, which extends to how we compensate our team. We believe that when you treat your employees right, communicate clearly, and uphold consistent expectations, they will become your greatest asset. That approach has helped us attract and retain strong team members across ourrestaurants.

Misha Punwani

Company: TAM Group

Brands: 15 Playa Bowls

Years in Franchising: 11

Hiring can be a challenge in any restaurant business, but we have been able to manage it successfully by focusing on culture and consistency. Many of our best team members come through staff recommendations, which helps us build a reliable and close-knit team. Our training team and managers emphasize a family-like atmosphere where everyone feels supported and valued. We also keep operations straightforward and organized so team members can focus on delivering great service and taking pride in what they do.

Bob Ruggieri

Company: Synergy Restaurant Group LLC

Brands: 17 Checkers & Rally’s

Years in Franchising: 17

We use recruiting platforms to drive applications. We also offer incentives to existing employees for referrals of new hires who stay with us for a certain period of time. It sounds obvious, but it is certainly true that creating a good work environment, where everyone is treated with respect, will naturally help staffing. We also offer very aggressive incentive programs for meeting financial and operational goals each period.

Rebecca Johnson

Company: Triad Donut Corporation

Brands: 3 Duck Donuts units and one food truck

Years in Franchising: 13

I believe that investing in my team is investing in my business, so I focus on creating an environment where people want to grow and stay. Beyond competitive compensation, I personally work with my employees to help them achieve their professional and personal goals, whether that's working their way up to store manager, paying off student loans, or buying their first car. The culture and development opportunities we’ve created are unmatched, and it’s why many of my team members have been working at my locations for five or more years. While I lean on the brand’s training support to implement best practices, treating employees as partners in our success has been the key to building loyal, motivated teams.

Andrew Jones

Company: TAM Group

Brands: 13 PJ’s Coffee, one Zaxbys

Years in Franchising: 11

Coffee shops typically have fewer issues finding and retaining employees compared to restaurants. The struggle for us is not finding numbers; the struggle is finding employees who have the same work ethic that the previous generation had. There is a new employee today, and being able to communicate with them is key.

Franchisee Bytes

What laws and regulations are affecting your business, and how are you dealing with them?

Right now, the big, ugly thing on everyone’s mind is the impact of tariffs. Nobody’s certain what the full impact will be, so we just have to do what we can to stay nimble. We won’t bite off more than we can chew.
-Alex Karcher, Operating Principal, JCK Restaurants, 61 Carl’s Jr., 11 Jersey Mike’s Subs, 8 The Human Bean, 8 Dave’s Hot Chicken, 1 Hawaiian Bros Island Grill

Out of the four states in which we operate, the most challenging is California. This is due to high minimum wage and strict state/local laws and regulations, which contribute to a tough business environment.
-Phong Huynh, Co-Owner, Fuego Investment Inc., 30 El Pollo Loco

We stay current with all relevant laws and regulations across our markets. Every municipality is different, and we make sure to fully understand and adjust to local requirements, especially around minimum wage, HR, and payroll.
-Lawrence Kouri, Multi-Unit Owner-Operator, Dave’s Hot Chicken, 22 Dave’s Hot Chicken

Minimum wage, managing sick days, and advanced scheduling: We follow the rules and try to educate lawmakers to ensure that unnecessary or unreasonable regulations aren’t enacted.
-Sam Chand, CEO, Jasam Enterprises, 25 Checkers & Rally’s, 35 KFC

The minimum wage rate in California. Over the past four years, the economy has taken a toll on us. The margins are getting thinner and thinner.
-Yousuf Nabi, Owner & CEO of Gotham IP Inc., Gotham Cookies Inc., DBA Mrs. Fields Cookies, 10 Mrs. Fields, 10 Sbarro, 4 TCB

Labor laws are really having an impact on our business as minimum wage continues to increase. We are pushing third-party deliveries and adding kiosk ordering stations in our restaurants.
-Jerome Johnson, Multi-Unit Franchisee, John Cove Management and Jbar Inc., 4 Sonic Drive-In, 10 Dunkin', 4 Baskin-Robbins, 1 Jersey Mike's Subs

Our locations in Southern California have had to adapt to the $20 minimum wage rule. We increased menu prices slightly to pay members what they deserved. We also paid nonhourly employees more and didn’t cut hours for our staff.
-Chad Given, Brand President, Sizzling Platter, 361 Little Caesars, 107 Little Caesars Mexico, 185 Wingstop, 92 Jamba, 33 Jersey Mike’s Subs, 31 Dunkin’, 7 Sizzler, 5 Red Robin, 1 Cinnabon

There are so many regulations we deal with, and it is very challenging to follow them all. Some examples are overtime rules and wages for managers. It takes up a lot of my time.
-James Brajdic, President, Customer Maniacs and Green Bay A Dub, 13 A&W

Several laws impact our operations:

• Franchise disclosure rules. The FTC mandates a two-week waiting period after delivering the FDD, which requires careful planning during lease negotiations.
• Zoning laws. I've worked with city councils to secure variances, such as a drive-thru in Sandy City despite residential opposition.
• Corporate taxes. Utah's 4.65% tax rate affects cash flow, making growth more challenging compared to states without corporate taxes.
• ADA requirements. Stricter accessibility laws have increased construction costs. We've adjusted by focusing on small, takeaway-friendly store designs to minimize expenses.

-Jacob Webb, Franchise Owner, MPUT Holdings LLC, 22 Marco's Pizza, 4 Tropical Smoothie Cafe