Flame-grilled:
Why Supermac’s boss Pat McDonagh is feeling the heat
FLAME-GRILLED. It’s how one of Supermac’s rivals likes to bill its burgers. And the Irish chain’s owner, Pat McDonagh, got a taste this week of how a few ill-advised remarks can suddenly put you in the line of fire.
Mr McDonagh (66), with an estimated worth of €117m, dug himself a supersized hole on RTÉ radio on Thursday when he compared the emergency pandemic payment of €350 a week as being like “winning the Lotto” for some part-time workers.
And while it’s true that the broad-based payment introduced in a hurry by the Government as the lockdown started had some unintended consequences, comparing it to a Lotto win was not one of Mr McDonagh’s finest moments.
He tried to backtrack, saying it was like a GAA lotto win, but the damage was already done. It was like trying to fish out the gherkins from the mayonnaise – messy, and you feel like it’s just not the same anymore.
To compound things, Mr McDonagh confirmed that Supermac’s takes €1.60 a day from all its employees to cover the cost of a meal and coffee.
To be fair, it’s doesn’t look like a bad deal, but free would be better and the money is taken irrespective of whether or not employees actually avail of the chain’s food and drink.
Working at the coalface in a fast food business isn’t easy. I know. I once spent a long summer working at a burger joint in Dublin Zoo when I was 16. I made £1.90 an hour and thought I was rich. But for anyone trying to make a living out of it, it was peanuts.
The work was tough, tiring and thankless. I still have the scars, literally, to prove it, after an urn of boiling water was spilt on me.
Fast forward more than 30 years and at least the general lot for low-paid workers has changed.
The minimum wage isn’t a
panacea, but it means something. Yet making a meaningful living from these jobs is still far from easy, if not downright impossible.
Mr McDonagh has built a sizeable empire on the back of grit, bravery and determination. His risk-taking and achievement should be applauded. In expanding Supermac’s, he has provided employment to thousands of workers – full and part-time. He made a fortune along the way, and there’s absolutely nothing wrong with that. We live in a society that, more than ever, will rely on entrepreneurs and businesspeople to take risks and create jobs.
But the former national schoolteacher might still have some lessons to learn about just how difficult it is for low-paid workers to raise themselves out of the handto-mouth existence that many have.
Fast-food chains are built, generally, on being able to offer food cheaply. Low costs are a part of the model.
And flipping burgers does not, let’s be frank, involve the same skill levels as inserting an IV.
Still though, great workplaces build great reputations. And while higher pay might not always be an option for some employers, respect goes a long way.
Mr McDonagh has long come across as a people’s champion.
Highly regarded because of the way he and his wife Una built their own business, he’s been vocally tackling insurance fraud for at least 25 years.
He took on the might of McDonald’s in a trademark dispute – and won.
Supermac’s has sponsored the Galway hurling team since 1991, and later sponsored the county’s football team too (last year, Supermac’s called for Galway GAA’s finances to be made public, and for details about how its sponsorship money had been spent).
It’s not bad for the man whose empire might never have been.
The Kilrickle schoolteacher initially intended to open a pool hall in Ballinasloe in 1978.
But the pool hall was refused permission and Mr McDonagh was stuck with a building he’d bought. He’d been selling burgers and chips from a van at the Galway Races and decided the town needed one of two things – a furniture shop or a fast-food joint.
We know what he opted for, and within a decade the business was generating millions of pounds a year in sales.
Now with about 120 outlets, the holding company behind Supermac’s recorded revenue of €172.2m in 2018 and a pre-tax profit of €23.8m. It employed about 1,720 people that year and paid €34m in wages and salaries.
There have been business missteps along the way.
A foray into the United States during the boom saw Mr McDonagh get his fingers burnt.
He invested in the Claddagh Irish Pub restaurant chain, which had been established in 2001 by US national Kevin Blair, who was once a Supermac’s employee.
Mr McDonagh financed the business, loaning it more than $21m (€19m). Following a rapid expansion, Mr Blair was desperately seeking additional finance from Mr McDonagh by late 2004. But the Supermac’s founder refused to lend any more money.
A courtroom battle ensued, with Mr McDonagh eventually buying the chain out of bankruptcy. He expected to lose the $21m he had already invested in it.
Claddagh once had 16 outlets across states including Indiana, Ohio, Kentucky and Illinois. Today it has four: two in Indiana, one in Michigan and one in Minnesota.
Supermac’s, meanwhile, has found itself caught up in more recent controversy at home.
As the chain tried to secure planning permission in 2018 for a €10m motorway plaza in Co Clare, it emerged that dozens of letters sent to the local council in support of the project were bogus.
Neither Supermac’s nor Mr McDonagh was aware of the fake letters, which included one purporting to be sent from a person who had actually been dead for 15 years.
In 2018, Supermac’s asked gardaí to investigate the letters, saying it was “horrified” to learn of them. Last year, a consultant working on behalf of Supermac’s on the proposed plaza project – Howard Williams – was disciplined by the Chartered Institute of Ecology and Environmental Management for orchestrating the letter campaign.
Expansion remains a key focus for Mr McDonagh, with motorway plazas a significant element, while Supermac’s has also trialled home delivery of its food with Uber and Deliveroo.
But Mr McDonagh has his finger in other pies too.
He and his wife own six hotels through their Só Hotels Group, including The Loughrea Hotel & Spa, The Athlone Springs Hotel, the Castletroy Park Hotel in Limerick and The Killeshin Hotel in Portlaoise.
The storm this week over Mr McDonagh’s controversial comments will soon be forgotten by most.
But it’s possible he might have to rebuild some bridges with his own staff.
One thing’s for sure: the burgher knows now what it’s like to get a roasting.
While higher pay might not always be an option for some employers, respect goes a long way