Olaf Growald
Even after COVID-19 forced the temporary shutdown of in-store dining at his five Dairy Queens and pushed business into the drive-through and third-party delivery, sales still grew last year for Whit Wolman’s restaurant company.
“We did grow. As odd as it sounds,” says Wolman, a Fort Worth-based franchisee who, with a partner, owns Dairy Queens in Lewisville, The Colony, Flower Mound, and two in southern Oklahoma. “I almost hate admitting that. It’s great for the brand, and it’s great for us. But I know there are a lot of people out there suffering.”
To be sure, 2020 and its aftermath, as it was for all restaurateurs, was a challenge for Wolman. Fortuitously, Dairy Queen was several months into a technology push to facilitate online ordering and third-party delivery and improve its drive-throughs when COVID-19 hit. “It put us in a good position in terms of being ready,” Wolman says.
COVID dramatically shifted his business to delivery, takeout, and drive-through. Today, he estimates more than 80% of his sales come from customers who aren’t eating in his dining rooms. Gone are the groups — workers, families, and others — who used to eat in. Will that snap back?
“That’s the million-dollar question,” he said during an interview in February at the Lewisville store. “The longer this thing kind of drags out, the more it makes me wonder if we’ve changed long-term behavior.”
How this question plays out also has long-term implications for the kind of real estate fast-food restaurants need. “You used to want to pay for the main corner, and now, with the advent of delivery, it kind of makes you question that, right?” he says. “You’ve seen other brands come out with concepts where they’ve basically cut the dining room in half.”
Wolman calls himself an unlikely fast-food franchisee. After graduating Texas A&M, where he studied industrial distribution and systems planning, Wolman headed for Washington, D.C., where he spent five years working for U.S. Sen. John Warner of Virginia and then the State Department over five years. “I got to go to Beirut and Saudi Arabia.” Wolman headed next to the University of Texas, where he obtained his MBA. His wife is from Fort Worth; the couple moved in 2013 to Fort Worth where Wolman, through a connection, went to work for a Dairy Queen franchisee.
“Did site selection, going out, put together real estate deals, all the way basically up to the training and staffing of a restaurant,” he says. In 2016, he and a family member went into partnership and bought the three North Texas DQs they own today, financing the purchase “internally.” In 2019, they bought the two in Oklahoma, again, “internally,” Wolman says. Today, they have about 100 employees.
A federal payroll protection loan through their banker, Bank of Texas, helped Wolman and his partner over COVID. “You think of when it was available, early April last year, sales were falling out of everything,” Wolman says. “So, we jumped on it pretty quick.”
Six months prior to COVID, DQ had installed the new ordering technology. “We were kind of working our way through it,” Wolman says. “How do we interact with the customer, how do we ensure we’re saving great food, how do we make sure our ice cream’s cold when they get it. The pizza business’s been doing delivery for 35-40 years. We kind of had to figure it out on our own.”
Wolman and his partner today remain on the lookout for more stores. “I think it goes back to that disciplined approach, making sure it makes sense,” Wolman says. “Make sure the location makes sense. Make sure the real estate makes sense. Make sure it’s a DQ market. It’s not growth for growth’s sake. We’re not trying to get to a number.”
Wolman’s been following the national debate over the Biden Administration’s proposed hike in the federal minimum wage to $15 per hour. (Biden removed the minimum wage increase from the $1.9 trillion stimulus bill he signed into law, after the U.S. Senate parliamentarian ruled it could not be included.)
Wolman understands the arguments but warns against immediately doubling the minimum wage from its current $7.25 per hour, saying that would be a “shock to the economy” while business is still digging out from beneath the pandemic. Employers would likely have to raise the wage rates for employees who are already making $15 per hour, he says. Distributors and suppliers would also have to raise their minimum wages. “That could cause other prices to lift.”
Better, says Wolman, who typically starts teenagers with no experience at $8.59 per hour, would be to phase in an increase in the wage.
“To me, if we’re going to do it, that’s what makes the most sense,” he says. “I think if it’s over time, it allows all these businesses to price it in.”