Fare Share: Guzmans' The Original Pancake House is one of many small businesses powering through pandemic
Each week, I have the opportunity to speak with dozens of Ohio Restaurant Association members and small-business owners across the state.
Recently, I spoke with Ruben Guzman, co-owner and operator of The Original Pancake House in central Ohio and a former colleague at the Wendy’s Co.
Guzman and his wife, Patty, are from Puerto Rico and Mexico, respectively, and they own locations in Upper Arlington and Westerville. With their famous Dutch Baby and their "Breakfast Execution" menu, they are known for fresh, bold flavors, made-from-scratch cooking, high-quality ingredients and operational excellence.
While still in the COVID-19 coronavirus pandemic and amidst a dire workforce shortage, my conversation with Guzman was optimistic. However, he wasn’t without hesitation, especially when it came to considering opening a third location and waiting to hear back on his application from the Restaurant Revitalization Fund. The RRF, a program affiliated with the U.S. Small Business Administration, is intended to provide a lifeline to our industry, which lost nearly $300 billion in revenue since the pandemic began.
“We’re experiencing difficulties with higher-than-normal turnover," Guzman said. "There’s a lot of speculation, but the reality is that the labor base is not there."
When asked why the workforce shortage perpetuates, he answered, “I think most people want to work in a stable environment that can support their family. There’s not one easy answer or solution to this complex problem.”
Many restauranteurs are so desperate to hire new employees, they’re looking to different strategies including retention bonuses, training and additional paid time off.
Guzman believes in a much deeper-rooted way of building people up through a positive work environment.
“I can’t speak for other operators, but our point of differentiation is that not only do we provide above average wages, but we care about our people," he said. "During the pandemic, we didn’t lay off anybody and kept everyone on payroll, at our cost. That creates loyalty.”
Rather than seeing hiring as a short-term experience, Guzman doesn’t buy into gimmicks, and instead, he invests both financially and emotionally into his current staff. He sticks with rewarding what they do best, and that’s an incentive to come to work every day.
What’s amazing is that Guzman actually opened a second location in November 2020.
“Everyone thought we were crazy at the time. Now everyone thinks we’re geniuses!” he said with a hearty laugh.
To him, that showed the tremendous amount of faith they have in The Original Pancake House brand, which originated in 1953 in Portland, Oregon.
But Guzman and the team don’t want to stop there.
“We have plans to open a third store to serve the Gahanna and New Albany area, because many of our customers drive 30 minutes or more to enjoy our food and service," he said. "Right now, there’s a pause until this situation settles down and we see a normal flow of employees.”
Guzman said the workforce shortage isn’t affecting him in hard numbers, but labor costs are soaring at most restaurants. Wages are up 4.6% nationally from January through March, which is 18% on an annualized basis according to federal data.
Labor pressure also is causing restaurants to limit operating hours.
“This is a new arena for restaurateurs,” he said.
Although consumers are bursting at the seams to get back to normalcy and want to go out to eat, there’s simply not enough employees to provide top-shelf hospitality and support new growth.
“We don’t open stores just to open stores," Guzman said. "We have very high standards and want to be really great operators by being ready to serve the community, which is a win-win.”
Another win Guzman is looking forward to is receiving money from the recent RRF, which is worth $28.6 billion, just around 10% of the $280 billion dollars lost in revenue over the course of the pandemic.
“It’s incredibly exciting to apply for grant money," he said. "We prepared well ahead, working with our accountants. So when the portal opened for registration, we were ready to go.”
Fortunately, Guzman said, it was a painless and efficient process, proving opportunities for many operators.
“It gave us renewed energy to keep going," he said.
What is unique for this particular round of financial relief is that for the first three weeks, applications are prioritized to businesses predominantly owned by women, minorities and veterans.
For the Guzmans, this is an extra help, as both are minorities, and 49% of the business is owned by Patty.
“As a minority small-business owner, there’s a stigma around your experience and education, which are important to your success," Guzman said. "We’ve learned to live with it and know that once people get to know us and our business, they’ll be more comfortable to trust.”
Before Guzman’s life revolved around pancakes and omelets, he owned 11 Wendy’s franchise locations. He knows it can be a bumpy road in the beginning for minorities.
Although it’s been a rough 14 months during the pandemic, Guzman's positivity about the outlook for the restaurant industry is endless. In fact, the Guzmans' two locations just saw the largest day ever in sales on Mother’s Day since opening four years ago.
“I’m the consummate optimistic," he said. "I think we’ve seen the worst and all we can see are clear skies ahead.
"The restaurant industry will be solid in central Ohio, and there are many great operators in the area. People are ready to enjoy a meal out with their friends and family, and we’re excited to serve them.”
John Barker is president and CEO of the Ohio Restaurant Association.