With its massive menu offer everything from crispy craven sandwiches to coconut cream cakes, Cheesecake Factory Inc. already ran amongst the nigh complicated operations in the restaurant industry. It'due south emerging from the pandemic with a model that'southward fifty-fifty more sprawling and complex.

When Covid-driven closures cut deeply into sit-down business concern in Cheesecake Factory's clangorous, lavish dining rooms, the 208-restaurant chain emphasized to-become orders to aid buttress sales. It worked: The chain is averaging more than than $3 million in to-become orders per location this year, more than double its typical amount before the crisis.

Cheesecake, in item, travels well, and people order it at all hours. The company said it sold more cheesecake as a percent of sales final twelvemonth than information technology did before the pandemic. "Yous take a few more than people who are but getting slices at 9 o'clock at nighttime delivered to their firm," said David Gordon, the chain's president.

At present more customers are returning to Cheesecake Factory's x,000-square-foot dining rooms too. And the combination has stretched the visitor and its workers, some of whom say they are at a breaking point.

An editorial stock photograph of The Cheesecake Manufactory eating house in Las Vegas, NV.

Cheesecake Factory has staked its make on expansive choices and precise service detailed in a nearly 500-page operations manual which includes roughly a full page of rules for the handling of strawberries for its cakes and a 12-step breakdown for hot tea service, according to a copy viewed past The Wall Street Periodical. Different many competitors last twelvemonth, Cheesecake Mill didn't cut its card, which runs more than a dozen pages. Instead it added more afterwards the pandemic hitting, debuting a "Chocolate Caramelicious Cheesecake Fabricated With Snickers" and bringing back its grilled shrimp and salary club, among other new options.

"Somebody today would be crazy to starting time something this complex, but nosotros figure it out," said Mr. Gordon in an interview.

Some chain workers said the book of the new to-get orders can be burdensome. At one California restaurant, cheesecake boxes are stacked floor to ceiling in its freezer in preparation for sales. Prepping the cakes by the chain's standards becomes more difficult with then many orders, some workers said.

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"The sheer volume of what y'all are expected to churn out is unsustainable," said Sophia Um, a baker worker in a Cheesecake Manufacturing plant outside of Los Angeles. "I have had co-workers run to the breakroom for a mental breakdown." Workers said servers, managers and fellow employees have left because of the strain or easier opportunities elsewhere.

Mr. Gordon said he recognizes that it tin can be difficult for workers to come across the demand, particularly during peak hours. He said the company has improved its systems during the pandemic to assist with the to-go sales equally they have grown and incorporated worker feedback into the changes. Concluding year, the company added access to mental health professionals, through virtual visits, equally a benefit for employees, he said.

What he worries about at dark, Mr. Gordon said, is keeping enough meridian-notch workers. "Is information technology more challenging today?" he said. "Information technology is."

Humble Beginnings

The Cheesecake Factory traces its origins to Evelyn Overton, a mother of two from Detroit, who started baking cheesecakes in the 1940s later clipping a recipe from a newspaper. She and her husband moved due west to open The Cheesecake Manufactory bakery in 1972, and establish success selling her creations to restaurants in the Los Angeles area. In 1978, her son, David Overton, opened a Cheesecake Factory restaurant in Beverly Hills, Calif., to showcase his mother's baking. Mr. Overton kept adding menu items, and expanded the concatenation to malls across the U.S., to the Las Vegas Strip, and to international outposts including Beijing and Bahrain. Mr. Overton remains chief executive of the now $2.xv billion company.

Everywhere it expanded, the company has pushed pages of choices and portions that guarantee a doggie purse.

"The Cheesecake Manufacturing plant is well-nigh as American equally you can get when it comes to selection," Mr. Gordon said.

Subsequently going public under the symbol "Cake" in 1993, the Calabasas Hills, Calif.-based company managed to continue growing same-store sales and attracted richer valuations than many coincidental-dining peers. Its growth hit a bump in 2017, when same-store sales barbarous and the company told investors it would practise more to abound. The company, which often had hourslong waits at its locations, began advertizing more broadly. It acquired another full-service restaurant visitor, Phoenix-based Fox Restaurant Concepts, in 2019 in a bargain valued at $353 million to help fuel its growth. Fox, run past restaurateur Sam Fox, operates brands that include North Italia and Flower Kid.

Ticker Security Terminal Alter Change %
CAKE CHEESECAKE FACTORY INC. 31.65 -0.41 -1.28%

Less than five months afterwards the bargain closed, the pandemic striking. Cheesecake Factory furloughed 41,000 of its hourly workers in March 2020, i of the first prominent signs of the wreckage that the pandemic would bring to restaurants. Information technology closed dining rooms. It asked its landlords for breaks on rent. For a time, it cutting pay for its elevation executives and lath by 20%.

The Securities and Commutation Commission after said the company was losing almost $6 one thousand thousand in greenbacks weekly and estimated it had merely about four months' worth of cash left. The regulator said the company misled investors virtually its operations.

Cheesecake Factory didn't admit to the SEC's findings merely agreed to a penalty of $125,000 in December. The visitor said in a filing that it fully cooperated with the SEC.

The company had added online ordering and delivery before the pandemic, and information technology quickly ramped upward its to-go operation that leap. Cheesecake Mill converted spaces in parking lots of many of its more than than 200 locations into pickup stations for orders. Within, while dining rooms were closed, restaurants converted tables no longer seating guests into associates lines for commitment.

Cheesecake Factory sign

Cheesecake Factory sign (iStock)

The company spent $16 1000000 on advertising in 2020, upwards 60% from the year before, in an try to achieve customers who might society to-go, but hadn't dined within before. Indoor dining returned this year, only almost three-quarters of the to-go business has remained.

Enough of other restaurants undertook like overhauls of their operations and staffing. To-go orders were 45% of casual dining restaurants' concern in the year ending in September, more than double the level in the aforementioned period before the pandemic, according to consumer research firm the NPD Grouping.
The trend is straining employees at a time when eating place operators across the U.Southward. are struggling to discover enough people to handle the workload. The rate of food service and hotel employees leaving their jobs hit half dozen.8% in August, the highest since the Labor Department began reporting the data more than than 20 years ago.

Part of the staffing shortage at Cheesecake Factory stems from the furlough of hourly workers when Covid-19 start hitting. However, the visitor did retain some key restaurant employees equally it pondered its future in the commencement weeks of the pandemic. Amid the staffing cuts that jump, the company decided to continue its more than iii,000 managers to assist get its restaurants running again as soon as possible. To pay their salaries, Mr. Gordon raised $200 million cash by selling preferred shares to individual-disinterestedness firm Roark Capital Group. The chain tapped those lieutenants to oversee the rapid expansion of its to-get effort as it tried to bring back hourly workers.

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"We were educational activity servers how to be cashiers. Nosotros were didactics people how to pack food," said Rebecca Perkins, a general manager in Sherman Oaks, Calif.

At present, finding and retaining workers is a major challenge. To speed hiring, Cheesecake Factory said it has simplified its application, and managers are trying to reply faster to candidates. The company said it has cut experience requirements for servers to half-dozen months from the traditional year.

Coping With the Crush

Many of their new hires are getting a baptism by burn. By this past summer, nearly all the company's restaurants had reopened their dining rooms—often festooned with Egyptian-style columns, night wood paneling and limestone floors—to full capacity. That has complicated operations as employees try to juggle those dining in with the to-become orders, while trying to live upward to the visitor'south exacting and extensive standards for food presentation and client service, some workers said. Orders at peak times tin particularly scramble operations, they said.

In the second quarter, same-store sales were up 150% from a year ago, and 7.8% from the aforementioned period in 2019. Cheesecake Manufactory restaurants averaged virtually $xi million in almanac sales before the pandemic; when the company concluding updated that figure in late July, information technology said information technology was now running at a footstep of about $12 million a year per store.

Mr. Gordon said the company is developing new tools to help its employees cope with the trounce. Cheesecake Manufactory managers at present have the ability to temporarily halt delivery service if their kitchen becomes overwhelmed, a feature it introduced this twelvemonth before its busiest mean solar day of the yr: Mother's Day. The company is also working with its nutrient-delivery provider, DoorDash Inc., about spacing out online to-go sales and then they don't all come in at once. The technology aims to help operations and reduce errors, the company said.

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A DoorDash spokesman said that it's working with the Cheesecake Factory to enhance its applied science to manage capacity while maintaining sales.

Mr. Gordon said he is personally familiar with the rising pressures on Cheesecake Factory'due south employees. Earlier in his career at the company, while working as a senior manager, Mr. Overton took Mr. Gordon aside to confer over a quesadilla that had sat too long in the restaurant'due south kitchen window before being served. Mr. Overton'due south message: No detail is too small at the Cheesecake Manufactory.

Mr. Gordon says he frequently tells managers the story.

"Everybody in that restaurant is just every bit fanatical well-nigh the quesadilla coming up in the window at three o'clock today as they were 27 years ago," said Mr. Gordon.

This article originally appeared in The Wall Street Journal