FEMA's Waffle House Index

Working Like Waffle House

FEMA gauges disaster severity by how many Waffle House restaurants are open.
By: | November 1, 2013 • 9 min read

The category EF5 tornado that tore through Moore, Okla., on May 20 etched a 17-mile path of destruction through thousands of homes and businesses, three schools and one hospital.

Estimates of insured losses reached $2 billion in the first 24 hours after the disaster, topping the cost of the twister that ravaged Joplin, Mo., in 2011. Sitting about three-quarters of a mile south of the tornado’s path, near 19th Street and Tower Drive, sat the local Waffle House.

“It was down without power, and the town was just devastated,” said Waffle House Vice President of Culture Pat Warner. “A normal 20-minute drive to work took about three hours to get around all the debris and roadblocks.”

Employees of the restaurant, however, were undeterred. Warner said the workers convinced a sheriff’s deputy to let them into the limited-access area in order to “get the restaurant open for our customers.”

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“If you have a storm and you can get a restaurant operational quickly that can provide water and food, that’s a really good thing because otherwise people go hungry,” said Ted Devine, CEO of insureon, a small business insurance provider.

Though its power was knocked out, Moore’s Waffle House sustained no physical damage. It procured a backup generator and was serving up hot meals to neighbors and relief workers within two days after the tornado hit.

But quick recovery is nothing new for the popular breakfast destination.

Waffle House spokeswoman Kelly Thrasher said that Hurricane Katrina in 2005 forced 100 restaurants to close, and 60 were able to reopen within one day.

R11-13p72-74_11Waffle.indd” … If you don’t have a plan and know exactly what you’re going to do when the event happens, you’re [in trouble].”
— Ted Devine, CEO, insureon

 

In 2011, restaurants affected by deadly tornadoes in Alabama and Missouri and by Hurricane Irene along the Southeast coastal region saw similarly speedy recoveries, she said. Waffle House’s ability to get up and running so quickly in the wake of disaster has earned it a stellar crisis management reputation.

So much so that the “Waffle House Index” has become a mainstay in the damage analysis toolbox of FEMA Administrator Craig Fugate.

The Waffle House Index — seeing if the local Waffle House is open and fully operational — is the informal way Fugate measures a community’s post-disaster damage and potential speed of recovery. A closed restaurant is coded red; an open restaurant serving a limited menu is yellow, and an open establishment with a full menu is green.

Fugate hatched the idea of the Index while surveying tornado damage in 2011: “If you get there and the Waffle House is closed? That’s really bad. That’s where you go to work,” he said.

Panos Kouvelis, an Olin Business School professor at Washington University in St. Louis and an expert in supply chain management, said Waffle House is one of several “world-class examples in their disaster management and humanitarian response planning approaches.”

His academic paper, “The ‘Waffle House’ Emergency Level Index,” detailed the challenges faced by businesses, including Wal-Mart, Lowe’s and Home Depot, that provide key services to a recovering community.

“Predicting customer demand after a disaster event, providing product required to the affected stores in an accurate and timely manner, establishing appropriate and ethical prices for their products, and maintaining adequate work-force levels after the event” are all part of an ironclad recovery plan.

Waffle House knows its customer demand will be high when scores of homes lose power to keep and cook food. Their employees’ commitment to serve those customers helps take care of the rest.

“We’ve been a 24-hour restaurant since 1955. We’re open on the holidays, on weekends and nights. So for us to close down is kind of against what we do.”
— Pat Warner, vice president of culture, Waffle House

The Waffle House Way

“[Our associates] know that their neighbors are going to be hungry, and opening the restaurant is their way to pitch in and get the community back on its feet,” Warner said. In addition to employee altruism, he credited the company’s dedication to quick recovery to its history as an around-the-clock restaurant.

“We’ve been a 24-hour restaurant since 1955. We’re open on the holidays, on weekends and nights,” he said. “So for us to close down is kind of against what we do. And our folks who run the restaurants really know that because they see their customers every day, and we’re fortunate enough to have regulars who come in sometimes more than once a day.”

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Even associates from restaurants hundreds of miles outside of affected areas have been known call the corporate office offering to send relief workers. Warner said the company takes on crisis recovery with a “family approach.”

But if employees’ desire to pitch in and restore their community is like the gas that fuels a car, executive leadership and proactive planning are the steering wheel and tires.

Waffle House has no dedicated response team; the executive vice president of a region where a store has been hit heads up recovery, according to Warner, by overseeing delivery of emergency supplies and determining the availability of workers in the area.

Dedicated teams lend support from corporate headquarters in Norcross, Ga., sending in construction teams and a mobile communications RV, which keeps workers in the field connected to a “situation room” back at the office. At the end of the day, though, “the folks in the field are the ones calling the shots,” Warner said.

Though they reach as far west as Phoenix and as far north as towns in Ohio and Pennsylvania, Waffle House’s nearly 1,700 restaurants are clustered heavily in the Southeast. They are, therefore, particularly susceptible to hurricane damage.

“We spend a lot of time with our suppliers in the off-season to ensure that they are ready when a hurricane hits,” Warner said. “Typically, they’ll have trucks loaded and ready to roll in right after the storm. That’s a key part of it, getting that safe food supply in because you really don’t know what you’ll have after the storm that’s local, and we wind up having to purge a lot of food.”

What Kouvelis dubbed as the gold standard of disaster response, then, seems to have no secret weapon. There is no superstar risk manager at the helm, no hidden stashes of backup generators or fresh water and supplies, nothing to incentivize employees’ swift actions other than the satisfaction of helping their hometown. The key to excellent crisis management is nothing more than swift execution of a simple but well-laid plan.

Planning Ahead

Devine of insureon compares this to athletes knowing how to react in different game situations.

“I coach hockey,” he said. “When the puck’s going 90 miles per hour and a 200-pound human being is skating at you at 20 miles per hour hitting you into the boards, if you don’t have a plan and know exactly what you’re going to do when the event happens, you’re [in trouble].”

Getting operational quickly happens when plans are executed immediately, not when plans are just  made when an event demands it.

Documenting and outlining all possible risks and exposures should be top priority for risk managers, Devine said. That lays the groundwork for developing a plan of action.

“That means thinking through your insurance covers and making sure you have all the business interruption and contingent business interruption policies in place, both for yourself and your supply chain,” he said.

Then come the non-insurance-related courses of action. How will employees be contacted? How will customers be notified of the business’s status? Where will backup supplies like a generator come from? Has the facility been weather-proofed? How will the IT platform be managed? Having the pieces aligned brings the puzzle together much more quickly when the worst happens, he said.

David Cox, president of Arby’s supply chain co-op ARCOP, said risk can be mitigated by considering the proximity of suppliers and distributors. When an event knocks out a link in the chain, a backup plan should be quick and easy to set in motion.

“Some of our distributors have three or four distribution centers, so it would be easy for them to figure out a plan to get product to those stores that are serviced out of a damaged center,” Cox said. “Where we have single distribution centers, there are competing centers close enough that would pick up the slack.”

Restaurant owners and risk managers should also list key items that make up a good chunk of their menu and have two suppliers for each of those ingredients or products. Especially in a disaster, knowing where to get water and ice is crucial.

According to Cox, Arby’s will have refrigerated trucks packed with product situated just outside of forecasted storm areas, waiting to move in when the hurricane passes. If electricity is down, they will station those trucks in the restaurant parking lot so workers can continually withdraw fresh food until their own freezers get power again.

Some of these preparatory steps only apply, though, in the case of hurricanes.

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Weather forecasters can predict with a high degree of accuracy when and where a hurricane will make landfall, what path it will take and how intense the winds and rain will be. That gives businesses time to prepare their facilities and contact their suppliers.

Tornadoes are a different story. The current average lead-time for tornado warnings is 13 minutes, according to the National Oceanic and Atmospheric Administration. Barely enough time to take cover, let alone call for backup.

Tornado recovery is inherently reactionary, but the upside is that twisters cause damage on a much smaller scale than hurricanes, allowing for greater focus of resources. It also means more people are available to help, without their own devastation to deal with.

Some companies rely on simple, good-willed help more than others.

Devine’s clients, for example, are small businesses with tighter budgets and limited resources. They depend entirely on local support and loyalty to thrive.

“If the small businesses can get operational quickly, they can actually make the community a better place more quickly,” he said. When nearly 40 percent of small businesses fail to reopen after a disaster, however, that’s a formidable challenge.

With more than 1,000 locations, Waffle House is hardly small. But the warm atmosphere of Southern hospitality each outpost strives to create may make it feel like it is.

As the Waffle House Index evinces, the restaurant chain has certainly carved itself a niche as a community mainstay, fitting into the unique fabric of each town it serves. Perhaps it’s that combination of big business leadership and resources, and small business customer and employee loyalty that makes its recovery efforts so effective.

“As a company we’re very flattered by the Waffle House Index,” Warner said. “It shows that our hard work is being noticed. When the emergency response people are looking to you, you know you’re doing something right.”

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Emerging Risks

Stadium Safety

Soft targets, such as sports stadiums, must increase measures to protect lives and their business.
By: | January 10, 2018 • 8 min read

Acts of violence and terror can break out in even the unlikeliest of places.

Look at the 2013 Boston Marathon, where two bombs went off, killing three and injuring dozens of others in a terrorist attack. Or consider the Orlando Pulse nightclub, where 49 people were killed and 58 wounded. Most recently in Las Vegas, a gunman killed 58 and injured hundreds of others.

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The world is not inherently evil, but these evil acts still find a way into places like churches, schools, concerts and stadiums.

“We didn’t see these kinds of attacks 20 years ago,” said Glenn Chavious, managing director, global sports & recreation practice leader, Industria Risk & Insurance Services.

As a society, we have advanced through technology, he said. Technology’s platform has enabled the message of terror to spread further faster.

“But it’s not just with technology. Our cultures, our personal grievances, have brought people out of their comfort zones.”

Chavious said that people still had these grievances 20 years ago but were less likely to act out. Tech has linked people around the globe to other like-minded individuals, allowing for others to join in on messages of terror.

“The progression of terrorist acts over the last 10 years has very much been central to the emergence of ‘lone wolf’ actors. As was the case in both Manchester and Las Vegas, the ‘lone wolf’ dynamic presents an altogether unique set of challenges for law enforcement and event service professionals,” said John

Glenn Chavious, managing director, global sports & recreation practice leader, Industria Risk & Insurance Services

Tomlinson, senior vice president, head of entertainment, Lockton.

As more violent outbreaks take place in public spaces, risk managers learn from and better understand what attackers want. Each new event enables risk managers to see what works and what can be improved upon to better protect people and places.

But the fact remains that the nature and pattern of attacks are changing.

“Many of these actions are devised in complete obscurity and on impulse, and are carried out by individuals with little to no prior visibility, in terms of behavioral patterns or threat recognition, thus making it virtually impossible to maintain any elements of anticipation by security officials,” said Tomlinson.

With vehicles driving into crowds, active shooters and the random nature of attacks, it’s hard to gauge what might come next, said Warren Harper, global sports & events practice leader, Marsh.

Public spaces like sporting arenas are particularly vulnerable because they are considered ‘soft targets.’ They are areas where people gather in large numbers for recreation. They are welcoming to their patrons and visitors, much like a hospital, and the crowds that attend come in droves.

NFL football stadiums, for example, can hold anywhere from 25,000 to 93,000 people at maximum capacity — and that number doesn’t include workers, players or other behind-the-scenes personnel.

“Attacks are a big risk management issue,” said Chavious. “Insurance is the last resort we want to rely upon. We’d rather be preventing it to avoid such events.”

Preparing for Danger

The second half of 2017 proved a trying few months for the insurance industry, facing hurricanes, earthquakes, wildfires and — unfortunately — multiple mass shootings.

The industry was estimated to take a more than $1 billion hit from the Las Vegas massacre in October 2017. A few years back, the Boston Marathon bombings cost businesses around $333 million each day the city was shut down following the attack. Officials were on a manhunt for the suspects in question, and Boston was on lockdown.

“Many of these actions are devised in complete obscurity and on impulse, and are carried out by individuals with little to no prior visibility.” — John Tomlinson, senior vice president, head of entertainment, Lockton

“Fortunately, we have not had a complete stadium go down,” said Harper. But a mass casualty event at a stadium can lead to the death or injury of athletes, spectators and guests; psychological trauma; potential workers’ comp claims from injured employees; lawsuits; significant reputational damage; property damage and prolonged business interruption losses.

The physical damage, said Harper, might be something risk managers can gauge beforehand, but loss of life is immeasurable.

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The best practice then, said Chavious, is awareness and education.

“A lot of preparedness comes from education. [Stadiums] need a risk management plan.”

First and foremost, Chavious said, stadiums need to perform a security risk assessment. Find out where vulnerable spots are, decide where education can be improved upon and develop other safety measures over time.

Areas outside the stadium are soft targets, said Harper. The parking lot, the ticketing and access areas and even the metro transit areas where guests mingle before and after a game are targeted more often than inside.

Last year, for example, a stadium in Manchester was the target of a bomb, which detonated outside the venue as concert-goers left. In 2015, the Stade de France in Paris was the target of suicide bombers and active shooters, who struck the outside of the stadium while a soccer match was held inside.

Security, therefore, needs to be ready to react both inside and outside the vicinity. Reviewing past events and seeing what works has helped risk mangers improve safety strategies.

“A lot of places are getting into table-top exercises” to make sure their people are really trained, added Harper.

In these exercises, employees from various departments come together to brainstorm and work through a hypothetical terrorist situation.

A facilitator will propose the scenario — an active shooter has been spotted right before the game begins, someone has called in a bomb threat, a driver has fled on foot after driving into a crowd — and the stadium’s staff is asked how they should respond.

“People tend to act on assumptions, which may be wrong, but this is a great setting for them to brainstorm and learn,” said Harper.

Technology and Safety

In addition to education, stadiums are ahead of the game, implementing high-tech security cameras and closed-circuit TV monitoring, requiring game-day audiences to use clear/see-through bags when entering the arena, upping employee training on safety protocols and utilizing vapor wake dogs.

Drones are also adding a protective layer.

John Tomlinson, senior vice president, head of entertainment, Lockton

“Drones are helpful in surveying an area and can alert security to any potential threat,” said Chavious.

“Many stadiums have an area between a city’s metro and the stadium itself. If there’s a disturbance there, and you don’t have a camera in that area, you could use the drone instead of moving physical assets.”

Chavious added that “the overhead view will pick up potential crowd concentration, see if there are too many people in one crowd, or drones can fly overhead and be used to assess situations like a vehicle that’s in a place it shouldn’t be.”

But like with all new technology, drones too have their downsides. There’s the expense of owning, maintaining and operating the drone. Weather conditions can affect how and when a drone is used, so it isn’t a reliable source. And what if that drone gets hacked?

“The evolution of venue security protocols most certainly includes the increased usage of unmanned aerial systems (UAS), including drones, as the scope and territorial vastness provided by UAS, from a monitoring perspective, is much more expansive than ground-based apparatus,” said Tomlinson.

“That said,” he continued, “there have been many documented instances in which the intrusion of unauthorized drones at live events have posed major security concerns and have actually heightened the risk of injury to participants and attendees.”

Still, many experts, including Tomlinson, see drones playing a significant role in safety at stadiums moving forward.

“I believe the utilization of drones will continue to be on the forefront of risk mitigation innovation in the live event space, albeit with some very tight operating controls,” he said.

The SAFETY Act

In response to the terrorist attacks on Sept. 11, 2001, U.S. Homeland Security enacted the Support Anti-Terrorism by Fostering Effective

Warren Harper, global sports & events practice leader, Marsh

Technologies Act (SAFETY Act).

The primary purpose of the SAFETY Act was to encourage potential manufacturers or sellers of anti-terrorism technologies to continue to develop and commercialize these technologies (like video monitoring or drones).

There was a worry that the threat of liability in such an event would deter and prevent sellers from pursing these technologies, which are aimed at saving lives. Instead, the SAFETY Act provides incentive by adding a system of risk and litigation management.

“[The SAFETY Act] is geared toward claims arising out of acts of terrorism,” said Harper.

Bottom line: It’s added financial protection. Businesses both large and small can apply for the SAFETY designation — in fact, many NFL teams push for the designation. So far, four have reached SAFETY certification: Lambeau Field, MetLife Stadium, University of Phoenix Stadium and Gillette Stadium.

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To become certified, reviewers with the SAFETY Act assess stadiums for their compliance with the most up-to-date terrorism products. They look at their built-in emergency response plans, cyber security measures, hiring and training of employees, among other criteria.

The process can take over a year, but once certified, stadiums benefit because liability for an event is lessened. One thing to remember, however, is that the added SAFETY Act protection only holds weight when a catastrophic event is classified as an act of terrorism.

“Generally speaking, I think the SAFETY Act has been instrumental in paving the way for an accelerated development of anti-terrorism products and services,” said Tomlinson.

“The benefit of gaining elements of impunity from third-party liability related matters has served as a catalyst for developers to continue to push the envelope, so to speak, in terms of ideas and innovation.”

So while attackers are changing their methods and trying to stay ahead of safety protocols at stadiums, the SAFETY Act, as well as risk managers and stadium owners, keep stadiums investing in newer, more secure safety measures. &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]