Arby’s Franchisee Tightened Belt, Weathered Storms, and Came Out Stronger
Putting stringent food cost controls in place not only helped Utah’s Premier Restaurants weather the recession, it also helped this Arby’s franchisee emerge stronger and better equipped for the next challenge.
ATLANTA — When Premier Restaurants, LLC put in a back office system to lower food cost in their 14 Arby’s restaurants, they didn’t know how timely that decision would be. But when the recession hit and sales dropped, the controls they’d put in place for food and labor with RTIconnect™ enabled them to weather first the recession, then soaring food prices and a tough sales environment.
“We put RTIconnect in and within the first year we saved a ton on food and labor—about 3 percent on food and 1–2 percent on labor,” said Shannon Gardner, regional supervisor for Premier Restaurants. Back then, she said, “we had the sales but didn’t have the controls we needed. With RTIconnect, we got control of food and labor, and we were so excited because we knew it was going to pay off. And it did. However, then the economy turned and sales crashed. Fortunately, we had the system in place so we were running our best food cost even while the economy was bad. Now we’re getting sales back, but food inventory prices are through the roof.”
Curb food theft
Premier Restaurants employs several measures to compensate for soaring food prices. “When the economy worsened, food theft increased. Because managers use RTIconnect to calculate orders and monitor variances, they’ve been able to lower inventory and curb theft. We’ve caught trends of things missing, found out why, and fired those people,” said Ms. Gardner. Each restaurant takes a daily inventory count of their 15 key items and runs Daily Food Variance reports to see overages/shortages.
“The managers are much more aware of their food, the cost of the food, and whether they’re selling it or losing it, because they have to run their variances,” she said, adding that occasionally supervisors take items listed on the report, pile them on a cart and wheel them into a managers’ meeting to give everyone an eye-opening visual of the variance impact. Further, Premier ties manager bonuses to variances, so everyone wins when variances are down.
With restaurants in both north and south Utah, Premier’s stores are served by two distribution centers, McLane Company and SYGMA Foodservice, both of which are RTI Supply Chain Partners. Managers save time because RTIconnect’s calculated orders only request the quantity of items required for the current sales forecast, the orders are placed electronically, and the software ensures that pricing and packaging stay up to date. Because managers are electronically ordering, she said, “We can check prices at any moment. The Recipe Cost Report tells us what something is going to cost us. Before, Arby’s could suggest a menu price, but we didn’t really know what that equated in food cost to us. Now we are better able to manage our menu pricing so the menu price is going to be a good deal for the customer but also not kill us in food cost.”
Labor to grow the business
Ms. Gardner said she relies heavily on her Labor Report-Weekly, a report custom-built for her by RTI. “This report was huge in controlling our labor, because we knew right away where managers were making scheduling mistakes,” she said. “It shows me every day, Monday through Sunday, what stores forecast in sales and what they actually did. It’s the first thing I run every morning. For example, it can show me a store thought they would do $2,300 yesterday and they only did $2,100. It shows me how many hours they scheduled and how many they used. If they were down almost $200 and they added four hours, that’s a problem.”
Supervisors use this report and the RTIconnect Scheduler not just to run and monitor business but also as training tools, showing managers their forecasted sales and the hours needed to support those sales. Red and green lines on the Scheduler indicate when the store is overstaffed or understaffed. “It’s a huge training tool for them,” Ms. Gardner said. “We were able to show this and say, ‘if you’re going to have red any time on the day, it better be during your lunch or dinner rush, where we want to grow our business, not for 8 a.m. and not in the afternoon when it’s slow.’ As managers began to schedule more efficiently, they took the labor they were saving in certain hours of the day and used it more to our benefit, and our sales started growing.”
Proactive, not reactive
How would they have fared the recession without the technology? “With the team we have, we would have managed,” said Ms. Gardner, “but RTIconnect made it a lot easier. It gave us the tools to quickly dial into issues and problems. We feel like we got RTIconnect at a great time. When sales dropped, we were successfully managing the controllables--the labor, the food. We were in a good place. A lot of people had to tighten their belts when the economy fell, whereas we had tightened our belt with the system a year before. With RTIconnect we were seeing where our money was going and made changes. Our labor came down and we were managing our food and labor and cash through the system so well that we were able to ride through some of the worst times in the industry. Arby’s took a bigger hit than most but now there’s some good things happening.”
Quicker, better information gives everyone the time to work on the business to make it better, she said. “We can be proactive throughout the week, not just reactive at the end of the month. We know well before the P&L’s come out what they’re going to say. We don’t go a day without looking at the numbers. We have the answers.”
RTI is a leading developer of technology solutions for the restaurant industry and a Microsoft Certified Partner. Today more than 10,000 restaurants, including many of today’s best known brands, rely on a broad suite of RTI hospitality solutions. Incorporated in 1985, the company is headquartered in Atlanta, Ga. For more information, visit our web site at www.internetRTI.com.
Vice President, Sales & Marketing
Premier Restaurants, LLC