Inside Cracker Barrel's war room: Military precision deployed in Hurricane Florence response

Key Points
  • Cracker Barrel has closed 15 stores in the Carolinas so far with five more that opened on a delay.
  • The company spent much of the first half of the week helping its employees evacuate affected areas.
  • Although Florence has slowed, it's still bringing a life-threatening storm surge reaching heights of up to 11 feet.
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The Cracker Barrel crisis operations response team — assembled in the company's "war room" at its corporate headquarters in Nashville, Tennessee, on Monday — sent its first group email out at 11:05 a.m.:

"Florence is projected as a Category 4 hurricane with the potential to reach category 5 status Friday morning at around 2 a.m. along the North Carolina coastline."

The email activated Cracker Barrel's emergency response plan, identifying the 10 restaurants and roughly 1,000 employees directly in the path of the storm. The company, which operates 655 of its Old Country Store and restaurants across the U.S. pulls together a core team of about 20 executives from human resources, loss prevention, security, communications, operations, facility services, information technology and other areas to respond to catastrophic events, said Janella Escobar, head of corporate communications.

Established in 1969, the restaurant chain is known for its casual dining and American comfort foods: chicken and biscuits, meat loaf, chicken fried steak as well as its quilts and signature meat and cheese gift baskets.

It's one of about two dozen publicly traded U.S. chain restaurants with significant exposure to Hurricane Florence, which was downgraded to a Category 1 as it made landfall in North Carolina on Friday. Chipotle and Outback Steakhouse's owner, Bloomin' Brands, also have a significant number of restaurants located along Florence's projected path, according to Jefferies analyst Andy Barish.

Although Florence has slowed, it's still bringing a life-threatening storm surge reaching heights of up to 11 feet with hurricane-force wind gusts and up to 40 inches of rain in some parts, according to the National Hurricane Center. It's already dumped more than 16 inches of rain in some areas.

"This rainfall will produce life-threatening flash flooding," the National Weather Service said in an advisory notice Friday.

Chipotle, based in Denver, has already closed 20 restaurants in the Carolinas and is monitoring potential damage through an extensive network of cameras.

"As long as the power is on, we are able to physically see activity inside the restaurants and assess flooding, damage, etc.," said company spokeswoman Laurie Schalow. It also uses technology to determine the impact of the storm on its equipment. Its energy management system, called Gridpoint, can determine if and how long outages or power surges impact its walk-in coolers or damage its grills and steam tables, she said.

Important resource

Restaurants are particularly important during natural disasters as they are often the last to close and first to open during a catastrophe, seen as a resource to get food to local communities, emergency responders say.

The Waffle House has its own storm center and "Waffle House Index" that is monitored by officials at the Federal Emergency Management Agency.

"The Waffle House test doesn't just tell us how quickly a business might rebound – it also tells us how the larger community is faring," Dan Stoneking, FEMA's director of external affairs, wrote in a 2012 blog post. "The sooner restaurants, grocery and corner stores, or banks can re-open, the sooner local economies will start generating revenue again — signaling a stronger recovery for that community."

Waffle House CEO Walt Ehmer, who was monitoring the storm from Myrtle Beach, South Carolina, on Thursday, told CNBC the company had teams on the ground up and down the coast.

"We try to stay open as long as we can because we try to serve the communities and first responders, but we certainly get out of harm's way before anything bad happens," he said on CNBC's "Closing Bell." The restaurant, which is normally open 24 hours a day, 365 days a year, has closed about a dozen restaurants so far.

Cracker Barrel has closed 15 stores in the Carolinas so far with five more that opened on a delay, Escobar said in an interview Friday. The company spent much of the first half of the week helping its employees evacuate affected areas, she said. Its human resources team contacted every one of the approximately 1,000 evacuated workers to ensure they could get out or arrange and pay for emergency transportation and housing if they couldn't, she said.

Everyone who was evacuated also received an application via text message for its Cracker Barrel Cares foundation, which provides grants to employees who suffer catastrophic losses from fires, natural disasters or other causes.

Cracker Barrel's logistics teams work with transportation and shipping to halt deliveries to closed stores or redirect shipments and goods to "comfort stations" that provide restrooms, showers, changing stations, water, food and other supplies to employees after the storm passes. The mobile stations were reserved earlier in the week and will only be set up at its parking lots if needed, she said.

It also sent security and loss prevention specialists to secure stores earlier in the week so rank-and-file employees could get out in time and set up local crisis response stations within the affected areas.

'Boots on the ground'

"On Monday, it was ensuring everyone could evacuate, our payroll offices are making sure all of our employees get paid," Escobar said. "Right now, the boots on the ground are assessing what's going to be needed, are the comfort stations needed, are they sending us water, are they sending us clothes, are they sending us food. For some of our areas, they're waiting still because of this very slow-moving storm."

The crisis operations team has a full-time core group of five people that swells to about 20 during catastrophic events like Florence, she said. They're now meeting first thing in the morning and twice again throughout the day since the storm has made landfall, with hourly updates, she said.

The restaurant chain monitors a 200-mile radius around the impacted areas, she said. Unlike other large restaurant chains such as Chipotle and McDonald's, Cracker Barrel owns all of its Old Country Stores.

"Because we have to be responsible for nearly 700 stores, and more than 70,000 employees, we feel a great responsibility to make sure our employees are taken care of. They rely on our systems and protocols being error-proof to support them to get through these things," she said.

When Jefferies' Barish looked at three scenarios for Florence's possible landfall this weekend, each centered around a different mid-Atlantic city — Wilmington, North Carolina, Charleston, South Carolina, and Virginia Beach, Virginia. Given the projection for high inland rains and flooding, Barish created a 175-mile radius around each city and determined how many restaurants from each chain were placed in these areas.

Bojangles', known for its chicken and biscuits, has about 83 percent of its restaurants located in states directly in the hurricane's path.

Barish estimates that about 31 percent of Bojangles' locations would be in danger if the storm hits Wilmington, 20 percent if it hits Charleston and about 16 percent if it makes landfall near Virginia Beach. Bojangles' spokesman Brian Little did not immediately return an email seeking comment.

Outback Steakhouse posted a note on its website, advising customers that hours may vary in locations impacted by the storm.

Cracker Barrel's crisis operations response team has its emergency planning down to military precision, which is no coincidence considering CEO Sandy Cochran is a former Army captain and its team includes several former soldiers.

"Unfortunately we do it often. It's like a checklist. No one is sitting around wondering what are we going to do, everyone knows," Escobar said. "Obviously every storm is different. In that preplanning, it's a pretty smooth process.

Watch: Looking at the Waffle House Index as Florence nears the Carolina coast

Looking at the Waffle House Index as Florence nears the Carolina coast

CNBC's Sarah Whitten contributed to this article.