Restaurant Franchisee Ed Doherty Had To Make Significant Staff Cuts To Keep His Business Going

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Soon after the coronavirus pandemic forced restaurants around the country to close their doors to in-person diners, Ed Doherty had to have many, many tough conversations.

By the end of March, the restaurant franchisee had contacted about 120 landlords to have an upfront conversation about the challenges his business faced. He had to talk with his banks about what payments would be realistic to make. And he had to lay off thousands of employees.

Doherty is the chairman and co-CEO of Doherty Enterprises, which owns and operates 146 restaurants in four states, including many in New Jersey and on Long Island.

In New York City, it has nine Panera locations across the five boroughs. The company is based in northern New Jersey.

Doherty operates franchises of Applebee's, Panera Bread, Chevys Fresh Mex, and Quaker Steak and Lube, as well as two restaurants each of two original concepts, Spuntino Wine Bar and the Shannon Rose Irish Pub.

Annual sales are typically around $475 million a year, and Doherty Enterprises usually employs 8,000 people nationwide.

The year had started well for Doherty, but by about the second week of March, he saw business declining rapidly. When New York and New Jersey closed all restaurants for sit-down service, sales dropped by 85 percent. Florida and Georgia, where he also has restaurants, later made the same move.

Doherty first had to lay off between 4,000 and 5,000 people in New Jersey and Long Island, and by the end of March, he had laid off people in Florida, too.

"Out of our 8,000 people, we've laid off 7,500, which were mostly hourly workers," he said in March. "We cut our headquarters staff by 50%, and anybody who made above $100,000 or more had their salaries cut 30 percent to 50 percent, and I stopped taking a salary.

"We’re devastated," he added.

By mid-April, 19 of the 146 restaurants had closed altogether because they weren't doing enough sales to cover the cost of the payroll, food, packaging, delivery and credit card fees. At those that were still open, orders were significantly down —anywhere from 75% to 85%.

"If a restaurant did $10,000 on a typical day, it's now doing $1,500," Doherty had said.

By Liz Young, Staff Reporter 
May 28, 2020
Source and complete article: Bizjournals.com