43. Waffle House Index: Red
As it turns out, the Waffle House is a great barometer for the state of a local economy. Who knew.
The Waffle House Index sounds like a joke. It isn't. It is a metric loosely used by the Federal Emergency Management Agency (FEMA) to define the severity of a catastrophe.
The index is based on the insanely great preparedness of the Waffle House restaurant chain.
In case you don't know, the Waffle House is a twenty-four hour breakfast joint. They are open all the time. And I mean - All. The. Time.
Location, Location, Location
You see, since Waffle House locations are often in tornado and hurricane zones, they have detailed back-up plans to keep the restaurants open and serving, regardless of the circumstances. (Editor's Note: If you put on events and have yet read the 11 Guidelines to Plan for Event Cancellation - do it, cause you need to be more like the Waffle House)
Remember when that tornado ripped through Joplin, Missouri and killed 158 people? Guess how many Waffle Houses in the area closed. None. That's how many.
In some cases, for instance, if power has been destroyed in a town, the Waffle House will resort to temporarily serving a limited menu that doesn't require power, but they will be open and serving.
As the former head of FEMA so eloquently said, "If you get there and the Waffle House is closed, that's really bad."
The WH Jump Teams
The moment there is even the inkling that a disaster may happen in a WH area, the Waffle House "jump teams" get geared up like a breakfast-centric Delta Force. They swoop in to the impacted town with generators, pots, pans, sausage, biscuits and all the supplies needed to get that Waffle House up to full speed as fast as humanly possible. In some catastrophes, it only takes a few hours to get the Waffles back in business.
Waffle House is like the Terminator of restaurants. No matter what artillery you throw at it, no matter how hard you try and destroy it, it's not going away.
The Endurance Event Index
This brings us right to the endurance event industry, which I'd say is an equally important index, though with slightly less syrup.
Event organizers are a willful, highly driven group. They don't back down easily. They will do whatever it takes to keep their events happening.
Will a little rain stop them? Nah. Snow? No way. Global pandemic? They may slow down a little, but you can't stop them.
If the Waffle House is like the Terminator, the event industry is like Forrest Gump: they just keep running, no matter what happens.
A Flush Economy
No matter how many endurance events you threaten to destroy, there will always be others behind it. Organizations in this business have come and gone, but somehow every weekend in every town is still jam packed with endurance event options.
No matter the corner of the country, if a town's economy is thriving, there are events thriving in that town. The more economically vibrant the location, the more endurance events there are.
The endurance industry, in that way, is like the Waffle House Index. Whereas the WHI, with its focus on locations serving breakfast today, is all about the current status of a market, the Endurance Industry Metric is more about the future growth of a market.
If somebody is still collecting registrations for an event in the future, it means there is still belief in a flush economy.
Waffle Threat Levels
The Waffle House Index has three levels:
Green = full menu
Yellow = limited menu
Red = closed
There are currently 1,992 Waffle House locations in the United States.
When Hurricane Katrina hit Louisiana, 107 of the locations shut down. That was the worst disaster in history for the Waffle House.
Until the Coronavirus Pandemic.
When a couple of terrorists bombed the Boston Marathon in 2013, that was the worst disaster in history for the endurance industry.
Until the Coronavirus Pandemic
The Waffle House Index hit an unprecedented level in 2020. Waffle House Index: Red became widespread.
But keep in mind, at the time of this writing there are 495 Waffle House locations that are closed. That means a total meltdown in Waffle House standards is currently 25% of stores.
Coincidentally, the Endurance Event Index (which I just made up) is showing nearly the exact same ratio at the exact same time. From what we can tell, about 5,500 endurance events have been cancelled or postponed to date. This represents about 25% of events on the 2020 calendar.
If I were a betting man (which, by the way, I am), I'd say we're going to see the market go down by about 25%.
Canary in a Waffle Mine
The important thing about the Waffle House Index is not to tell you whether or not you can eat a waffle that day, though I'd consider that information as an added benefit. The Waffle House Index is about economic recovery.
The Waffle House is the proverbial canary in the coal mine.
Since they are notoriously the last businesses to ever close and the first to open, the index level becomes a barometer of the damage done to an area. If that restaurant has to close, things must be pretty darn grim.
Similarly, the speed in which the Waffle House can reopen, is a barometer of the speed in which the area can achieve economic recovery after a disaster.
Endurance Event Index: Yellow
Even though, as of this writing, 75% of the Waffle Houses are still open and receiving orders, the company's revenue has dropped 70%.
Even though 75% of endurance events are still planning on happening, endurance event revenue has dropped 85%.
If trends continue like this for another 60 days, both the Waffle House and the endurance market could lose 40-50% of all locations/events.
But like the Terminator, the event industry is not giving up. They never do. Because they are athletes, they are competitive, they don't back down.
Yes, there is going to be collateral damage - we know that. We're already seeing it. But now is the time to remember that neither the event industry nor Waffle House are going anywhere.
To the contrary. Those businesses that emerge from this pandemic will emerge stronger and savvier than ever.
So alert the endurance event jump teams. Help them load up their backpacks with cones, barricades and barrels of electrolyte fluid.
We're not down yet.
We're still running.