Panera Bread’s (Panera) recent outage disrupted the chain’s digital ordering systems, including online ordering, mobile app, and in-store kiosks and employee scheduling. For franchise operators, it highlights the vulnerability of modern restaurant operations heavily reliant on technology. While the corporate entity has remained tight-lipped about the cause, speculations of a potential cyberattack or ransomware incident have been swirling around the internet. This incident, along with the NCR and McDonald’s outages that preceded it, serves as a wake-up call for franchisees and operators to prioritize resilience and implement robust measures to safeguard their businesses against disruptive events.
Impact on Franchisees
Panera’s reported three-day outage had far-reaching consequences for franchisees. An inability to process digital orders through the website, mobile app, and kiosks resulted in a loss of revenue, as a substantial portion of its customer base relies on these convenient ordering channels. Additionally, the disruption impacted loyalty program management, catering services, and gift card transactions, further compounding the financial implications.
Beyond the immediate financial impact, the outage also posed reputational risks for franchisees. Customers accustomed to Panera’s seamless digital experience were left frustrated and inconvenienced, potentially damaging brand loyalty and customer retention efforts. Moreover, the lack of transparency from the corporate entity regarding the cause and resolution timeline only fueled uncertainty and speculation, leaving franchisees ill-equipped to address customer concerns effectively.
Ensuring Resilience: A Franchisee’s Perspective
In the face of such disruptive events, franchisees must adopt a proactive approach to ensure the resilience of their operations. Here are some key strategies that franchisee operators should consider:
- Advocate Open Communication with the Brand: For franchisees dependent on a brand’s corporate entity for crucial technology systems and restaurant processes, the time to have a discussion on how a disruptive event will be handled should happen before the event. Engage with the brand as if they are a third-party provider so that they understand the brand’s contingency plans and their role in such an event.
- Invest Your Own Cybersecurity: While a brand outage will not be prevented by local cybersecurity controls, this should serve as notice that cybersecurity should be a top priority for all operators as the threat of cyberattacks and ransomware incidents continues to escalate in the restaurant industry. Investing in robust cybersecurity measures, including risk assessments, penetration testing, employee training, regular software updates, and secure backup systems, among other things, can help prevent and mitigate the impact of such attacks.
- Develop Contingency Plans: Operators should have well-defined contingency plans in place to address various scenarios, including technology outages, supply chain disruptions, and other operational challenges. These plans should outline clear communication protocols, alternative processes, and resource allocation strategies to ensure business continuity. Register to join GBQ on June 18th for a MasterClass exploring how to build controls for resiliency into your restaurant business.
- Foster Open Communication: Maintaining open and transparent communication channels with customers, employees, and the franchisor is crucial during disruptive events. Operators should proactively address customer concerns, provide regular updates, and collaborate with the corporate team to ensure a coordinated response and resolution efforts.
- Invest in Redundancy and Backup Systems: Implementing redundant systems and backup solutions can help mitigate the impact of outages and ensure data integrity. Operators should explore options such as failover mechanisms, backup servers, and cloud-based solutions to maintain critical operations during disruptions.
- Prioritize Employee Training and Empowerment: Well-trained and empowered employees are invaluable assets during disruptive events. Operators should invest in comprehensive training programs that equip employees with the knowledge and skills to handle various scenarios, including manual processes and customer service protocols during outages.
- Manage Vendor Risk: This should not only be seen as a technology problem. Develop an awareness of dependencies on third-party suppliers and plan for outages of food suppliers and other critical non-technology-oriented vendors.
By implementing these strategies, operators can enhance their resilience and better navigate the challenges posed by technology disruptions, cyberattacks, and other operational risks. A proactive approach to resilience not only safeguards business continuity but also strengthens customer trust, employee confidence, brand reputation, and long-term success in an increasingly digital and interconnected industry. To discuss this material in more detail, contact a member of our IT Services team.
