Effective vs. Ineffective Franchise Operators. Where do you fall?

By Vladik Rikhter

future fast food pic.jpg“Expect problems and eat them for breakfast.” – Alfred Montapert

I think this is one of the most inspirational quotes for franchisees. Not just because it’s food related, but because it’s the truth of the business they know. Foodservice franchises, whether they are restaurants or convenience stores, are a messy business to manage. Food safety is its own realm, not to mention the expectations of customer service. Then there’s all the equipment and storage responsibilities.

The restaurant manager encounters challenges every day. It’s how they respond to those challenges that makes or breaks a brand. Are you eating them for breakfast, or are you letting them consume you?

If you’re a franchise operator, you know that you can’t be everywhere at once. You sign a contract and you place a great deal of trust in another operator to uphold your brand’s standards and best practices, which you’ve taken great care to define and communicate… or at least you think you have.

That’s the thing about compliance in a franchise network—you need to communicate well with franchisees early on and clearly define serious standards violations.

To make this point clear, I’ve created the following 5-point progressions of an ineffective vs. effective franchisor.

The Dichotomy of the Ineffective vs. Effective Franchisor

Ineffective

  1. Has a contract but never extracts the most relevant information to create simple checklists.
  2. Doesn’t clearly communicate core brand expectations with franchisees on a regular basis.
  3. Visits each location, documenting with paper and pen. Notices some problems that aren’t yet violations. Never follows up on them.
  4. Expects franchisees to readily answer phone calls and emails during business hours. Feels like they find out about problems when it’s too late.
  5. Feels blindsided by a franchisee’s problem that goes public.

Effective

  1. Has broken out the contract into manageable lists, with some criteria that are not simply “yes” or “no.” The checklist requires detail and explanation to complete.
  2. Regularly communicates with franchisees. Pushes out updates and notifications quickly and in real time.
  3. Documents store conditions using a cloud-based mobile technology on a readily accessible device. Use of a nimble platform alerts senior managers to core inefficiencies, enabling them to act on their findings at a particular location and assign follow-up tasks. Therefore, compliance is well-documented.
  4. Understands that franchisees need to operate their business during business hours and can benefit from new technologies.
  5. Can predict franchisee failures before they happen. And in the worst-case scenario, if the franchisee relationship results in legal action, the franchisor has thorough documentation of non-compliance.  

If your operations sound more like the “Ineffective” model, don’t fret. The “Effective” model is well within reach. It starts with your commitment to explore new systems and update your processes through technology.

Get started by looking at what Zenput can do for restaurants and c-stores.  Or schedule a demo here.

Topics: Business Operations, Franchise

How to Stay on the Winning Side of Digital Disruption

By David Mostovoy

digital disrpution.jpg

If your high school was anything like mine, you were required to read the “7 Habits of Highly Effective Teens Workbook”.  I feel like this is very much an early 2000s/Millennial experience (we are the gold-sticker, trophy-loving generation after all).

From the Amazon excerpt: “In this interactive volume, teens will find in-depth tools to improve self-esteem, build friendships, resist peer pressure, achieve goals, get along with parents, and strengthen themselves in many other areas.”

I’m a firm believer that there are some things that can’t be taught in a handbook—like the natural ability to get along with people and not be a complete knucklehead. However, I do agree that improving one’s self-esteem, staying on task, and working towards goals do require some skills that can be improved with time and practice. This handbook, and our freshman year course in Leadership, was designed to prepare us to meet the pressures of being in high school and become young adults in—let’s face it—the traditional sense.

As we sat in that class, little did we know that social media platforms would change our lives forever, whether we realized the impact right away or not. The invention of social media platforms was about to majorly disrupt traditional systems. The idea of a 20-year-old digital influencersomeone who could personally reach more people than the CEO of any given companywas about to be a possibility.

If you think about it, social media platforms are “babies” compared to 100-year-old brands that are now suddenly forced to play by the rules of the digital age. This is what’s referred to as the “digital disruption.” Technology came along and threw a major wrench in traditional notions of advertising and networking. Say what you want about their cultural impact, but social networks might be why you’re reading this story on your phone right now! They get the content to the people.

So now a few years into this disruption, everyone has adjusted and is killing it on these exciting new platforms…right?

As it turns out, not so much.

Most Leaders Are Unprepared for Digital Disruption

To study responses and needs in the age of digital disruption, The Global Center for Digital Business Transformation (DBT Center) surveyed more than 1,000 executives across 20 different sectors. This study had “heavyweight” backing as an initiative of IMD business school, Cisco, and HR consultancy metaBeratung.

Perhaps not surprisingly, 92% of the leaders surveyed said they are feeling the effects of digital disruption, with one third rating the impact as “very significant.” Now here’s where it starts to get a bit uncomfortable for us in the mobile tech space:

-> Less than 20% of respondents indicated that digital technologies, such as analytics, mobile and social media, are fully integrated into their organizations.

->Only about 30% of respondents either rarely or only occasionally use digital tools and technologies.

Moment of truth: Are you trying to be a “cool” brand, yet not exploring options in digital?

While you’re in good company, according to this survey, you could be so much more...effective, if I may borrow the word!

Being a Highly Effective Operator

The DBT Center has identified four competencies and three behaviors that business leaders need in the era of digital disruption. (When 4+3 = 7, you can see why this reminded me of my high school workbook.)

I’ll briefly summarize the “HAVE” competencies:

Humble - Own what you don’t know about digital and seek help from inside and outside your organization.

Adaptable – Adapt or die. If you can’t adapt with new technologies, your competitors will take advantage of your weakness.

Visionary – Keep your “eye on the prize.” What is your end goal in becoming more efficient through technology? Navigating digital disruption can be demanding.

Engaged – Not to keep using cliché phrases, but don’t “lose the forest for the trees.” Your vision is important, but engagement—finding out what works and what doesn’t in practice—is how you’ll bring your business to the next level.

If you’re succeeding at the HAVE competencies, DBT calls you an “Agile Leader.” And when it comes to tech, they run circles around non-agile leaders.

According to the survey:

26% of Agile Leaders use digital tools and technologies frequently, compared to just 7% of non-agile leaders.

28% of Agile Leaders use virtual networks and forums

32% of Agile Leaders seek disruptive approaches to deal with challenges.

It takes an Agile Leader to say, “Hey, you know what? Let’s try something new with tech.” However, the smart Agile Leader has done their homework. Nearly half of those Agile Leaders (42%) said they were making more informed business decisions as the result of three behaviors:

  1.  Well-directed data gathering
  2.  Effective analysis
  3.  Good judgment

And logically speaking, they must occur in that order!

Collecting “well-directed” data starts with the right platform that helps you analyze and make better judgments. The right platform can also improve engagement and interaction throughout your organization.

For instance, a mobile app like Zenput encourages managers and store-level employees to communicate about their everyday challenges in real-time through a streamlined platform. Communicate with tasks and forms, and send a photo or video to get your point across faster. Get out of email and create a better chain of accountability than phone or fax.

The 21st century has arrived and with it, so have digital disruptions. Will you resist the change or start using technology to your advantage?

Topics: Business Operations

How to Spot a POS Vulnerability Before It Becomes a Security Breach

By Vladik Rikhter

Skimmer.jpg

If you’re a restaurant operator and you haven’t heard of the blog Krebs On Security, definitely check it out. Former Washington Post journalist and self-taught computer security expert Brian Krebs is often the first to break major news about restaurant security breaches.

For instance, in February, Krebs got Arby’s to acknowledge a data breach at its fast-food restaurants. Frankly, the cause is enough to lose your lunch: malware on payment systems once again!In a 2015 interview with Eater, Krebs warned that any restaurant company that uses point-of-sale (POS) systems is vulnerable to attack. POS systems are often set up to be accessed remotely, making them vulnerable to hackers.

As identified by Krebs, other security vulnerabilities with POS systems include enabling the same password for each system and running on outdated operating systems that don’t offer security updates and are simpler to hack. It’s no coincidence that chain restaurants are being hacked with greater frequency; often, several restaurants are linked to one internal system.Now you might be asking (because I definitely did): how a guy like Krebs breaks a story. As it turns out, hacked credit cards are often sold on the black market, usually web forums, and when there’s a major breach, there’s an influx. Krebs then reaches out to banks to see if they’re seeing or hearing anything suspicious. If there’s a pattern, Krebs then reaches out to the suspected chain to confirm whether or not they had a breach. Voila! That’s what led him to Arby’s in February. The company confirmed that it had recently remediated a breach, but had not publicly revealed the incident at the request of the FBI.

Arby’s confirmed that malware was placed on payment systems inside corporate stores, but franchised locations were not affected. In other words, the Arby’s breach was evidence of the vulnerabilities Krebs warned about two years ago!

Learning the Lesson

Here at Zenput, we try to provide our customers with the mobile tools to communicate better about their POS audits as well as possible breaches. We’ve discussed measures to prevent ATM skimming, and we offer a mobile form for audits of payment terminals in stores or at the pump. See below screenshot for an example:

POS audit on mobile

But in the case of Arby’s, they were a victim of a malware attack through their central system. Of course, we’re not privy to the inner workings of Arby’s security system, but you have to hope that they regularly ran updates and that software was updated. Keeping systems updated and making sure employees understand the POS terminal and its functionalities are critical tasks for any restaurant operator. When you create a procedure to protect against physical POS breaches, you can also create a checklist for POS employee training. Security is a team effort and one that’s executed from the top down, so make sure your team is in compliance with best practices. Also make sure they know the right steps to take if a breach is detected. That kind of preparedness can go a long way when recovering from an attack. Arby’s now faces class-action litigation with strong accusations: “The Arby’s Data Breach was the inevitable result of Arby’s inadequate data security measures,” says a credit union suing on behalf of its customers. Arby’s denies those allegations and plans to offer a vigorous defense.

But one company’s struggles are a reminder that any multi-unit restaurant operator is at risk, and it begs—or rather, demands—the question: are you up to date on your security measures?

Topics: Business Operations, C-store, ATM skimming, gas stations

Restaurant Monitoring Done Right

By Jennifer Hoffman

restaurant-security-camera

Repeat after me: Restaurant video surveillance isn’t the end-all solution to your operational needs.

Now more than ever, video solutions are extremely accessible via the Internet. Sure, they might help reduce losses at the point-of-sale and decrease inefficiencies. For instance, a manager might be able to observe peak traffic times and adjust staffing needs accordingly. Video may also help to spot Hillary Clinton at a Chipotle, if you remember that story from April.

Then there are those retail chains that use video surveillance as a “gotcha,” big brother management tool.  In 2012, 7-Eleven spent $40 million on digital technology, reported the Los Angeles TImes. One one hand, some franchisees were indeed stealing from the company. However, one franchise attorney called this level of security “paranoia city.”

7-Eleven is a different industry, but I use the example to show how video surveillance can be a slippery slope. In addition to the risk of making your employees feel uncomfortable, video surveillance in operations has three drawbacks:

1. Video needs to be constantly monitored

Seriously, who has the time to watch through hours of video per day to gather notes? It’s so much easier when you are presented with real-time data that lends itself to clear and actionable insights.

2. Video doesn’t tell the whole story

Why are customers not going near the new promotional display in the middle of the store or ordering the new menu item? Could it be that new promotional materials were not displayed correctly to let customers know that a promotion is taking place?

3. Video misses the customer perspective

Even a high-quality video won’t pick up on a dirty restroom, poorly washed utensils and the awful noise coming from the vent under the table.

Great News for the Restaurant IndustryJust this week, Technomic Inc. released its 2015 midway report with excellent news: Customer traffic is back to pre-recession levels. Employing qualitative data analysis, Technomic’s researchers were able to pinpoint six key trends:

  1. Fast-casual restaurants show no signs of slowing down and are outpacing other segments in growth.
  2. Build-your-own concepts keep growing. (For example, Blaze Fas-Fire’d Pizza currently has a pipeline of more than 400 restaurants that are slated to open in 42 states, Washington, D.C, and Canada by 2020.)
  3. Some quick-service restaurants have achieved cult-like status.
  4. More restaurants are removing additives from their menus because of increased consumer awareness.
  5. Everyone is now a foodie thanks to blogging and social media platforms like Instagram.
  6. Tech is necessary. However Technomic does not identify digital cameras as the kind of tech restaurants need. Rather, consumer-facing technology--online ordering, table tablets and mobile apps--rule the day.

These trends provide enough reason for why managers need to be present in their stores. How do you know if your quick-service restaurants are executing menu items correctly? How do you know if you’re delivering the branded experience that makes QSRs reach that cult-like status?

We often say that you need eyes and ears in the field. In the restaurant industry, you also need a heart out in the field. The most successful restaurateurs are passionate about their food and their culture. So, get out there and make technology work for younot the other way around.

Topics: Business Operations, Restaurants

Is a Restaurant REIT the Right Move for Darden’s Olive Garden?

By Vladik Rikhter

olive_garden_exterior

Is it a matter of financial success or a move that indicates a larger operational problem lurking beneath the surface? Ultimately, that’s what investors are trying to determine regarding Darden Restaurant Inc.’s decision to transfer approximately 430 of its more than 1,500 Olive Garden restaurants to a publicly traded real-estate investment trust (REIT) and lease them back.

Darden is the first major restaurant chain to take such a step, reported the Wall Street Journal. Prodding by Darden’s activist investor, Starboard Value LP, contributed to this decision (more information on this below).

Switching to an asset-light model via a REIT is becoming an increasingly popular move among large chains.The WSJ article sites Bob Evans Farms Inc. and McDonald’s Corp. as two companies who have recently explored this financial option. Notably, all of these brands have something important in common. They have all made recent headlines for financial and brand struggles.

Here are three examples: 

  1. McDonald’s is closing more restaurants that its opening for the first time in nearly 40 years. 
  2. Bob Evans Inc. will close 20 underperforming locations and eliminate 60 positions as part of $14 million cost cuts.
  3. In October 2013, an activist investor group won all 12 seats on Darden’s board of directors after arguing the Olive Garden chain is poorly run. It is true that 2014 Olive Garden sales plummeted. This is a big problem since Olive Garden reportedly accounts for 56% of Darden’s total sales.

Through the REIT, Olive Garden will pay back $1 billion in debt. It raises the question, is a real estate investment trust a sign of bailing out the sinking ship?

It could be, according to one analyst for Motley Fool, who calls an REIT a short-term solution to a long-term problem. Darden owns more than 1,500 U.S. restaurants, so “being a landlord is a sideline business that distracts from its real purpose of serving food,” one analyst remarked.

“This REIT is ultimately just a gimmick -- financial engineering that does not address Olive Garden's real long-term problems, including a shift in consumer sentiment away from carb-heavy foods like pasta toward healthier fare,” he concluded.

Maybe that’s true about the healthy trend, or maybe not. It could also be that people were just getting bored with the brand or had a disappointing meal.

Olive Garden’s Silver Lining

Fortunately for Olive Garden, there’s a silver lining in this pasta bowl. The restaurant chain recently reported an increase in sales and profits, and experienced a  4% lift in stock prices.

For now, the REIT is resounding with investors as Olive Garden returns to the basics that gave its brand a national presence. The chain brought back its “Buy One [entree], Take One” program for a limited time in March and its new breadstick sandwiches have also seemed to resonate with customers.

Menu innovation might be the key to Olive Garden regaining market share and gaining new customers. Consistency across the franchise will be just as important.

Interestingly, when activist investors Starboard Value Partners took control in late 2013, they created a presentation about what Olive Garden was doing wrong. Problems included not salting the pasta water, putting excessive amounts of sauce on its food, and having non-Italian menu items, CNN Money reported.

It may be too early to tell if Olive Garden has raised the bar on its menu, but at least these consistency issues were noticed and documented. It’s further evidence that Starboard is righting the Olive Garden ship instead of merely bailing it out.

Topics: Business Operations, Restaurants

How to Hire & Retain the Right Retail Employees

By Brian Harris

happy-apple-retail-employees

“Your people make all the difference. The only thing your competitors can’t copy is your culture and your people.” – Mel Kleiman, expert on hiring the best hourly employees

In one day, Mel Kleiman’s “employee from hell” totaled nine Hertz rental cars. Kleiman, who once owned the largest group of Hertz Rent-A-Car franchise locations in the U.S., is also the founder of Humetrics, a consulting firm that specializes in helping companies hire the best hourly employees.

According to Kleiman, hourly employees comprise more than 60 percent of the U.S. workforce, but many companies fall short on retaining top employees long enough to see a return on their investment. The result is high turnover rates and high costs to the employer.

How do you find the right retail employees? It’s a two-way street between the applicant and employer. Kleiman says to hire tough and manage easy. (In fact, that’s the name of his book.)

He urges employers to ask tough questions during the interview process. Don’t just ask them about their ability to do the tasks required in your job opening. Kleiman says that 95 percent of applicants will come to the interview prepared to tell you only what you want to hear.

Instead, ask them about their past job experiences and their ability to work with others. Ask them what their most difficult job was and how long they stayed at it.

Retention of Great Retail Employees is Self-Reflective

The hiring process isn’t just applicant/employee-centric. It’s also employer-centric. What kind of company are you inviting the applicant to join?

In the above video, Kleiman identifies five things all great employee is looking for in a job:

1. Great Bosses, Great Employees
Your employees are more likely to stay when they are surrounded by good people who want to see them succeed. How do managers measure up? How effective is the senior management team at communicating?

2. Growth
Employees are more likely to stay when they have an opportunity to advance or grow their skill set.

3. Interesting Work
Challenge your employees. Give them new responsibilities.

4. Family Friendly Work Environment
Life exists outside of work. Employees want to work for people who recognize and respect that fact.

5. Recognition
It’s a human emotion to crave recognition. People want to know when they are doing a good job. An occasional reward can go a long way!

Here’s an important question: Do you use the right tools to measure your store’s progress so you can identify your great employees, grow your business, experiment with new tasks/responsibilities, properly staff your stores so employees have a consistent schedule, and recognize your staff?

Falling short in one or more of these areas may also be holding you back from hiring the right people. You can’t just hire people who look good on paper to fix your business. Your company needs to be strong from the ground up, so you can attract good, hardworking employees who will grow with your business.

“We hire people for who they are, not what they know. Your most important job is making sure you hire the right people,” Kleiman concluded.

Topics: Professional Development, Business Operations

Auditing Branded Gas Station Forecourts Can Increase Supplier Payments

By Scott Hill

Shell Gas Station forecourt
Photo by Daniel Oines, on Flickr

Branded gas station operations are an interesting business. According to NACS, the Association for Convenience & Fuel Retailing, approximately half of the fueling stations in the country sell branded fuel from one of 15 major refiners/suppliers. Often, these stations have signage that make them look like they are owned by the refining or supply company. However, many major oil companies have left the retail fuels business to concentrate on upstream production.

As NACS explains, the contractual relationship between a supply company and the retailer is similar to the relationship between soda companies and branded fountain dispensers.

Common Problems in a Typical Supplier Scenario

For the purpose of examining the typical supplier/retailer relationship, let’s consider a fictitious c-store chain, Sandy’s Shops. Sandy’s is a regional company that operates a Shell-branded forecourt as part of its supplier agreement with the fuel supplier. Sandy’s also pays a premium on the gas it sells because of the brand value Shell holds.

Since Shell’s brand image is at stake at this station, Shell routinely audits the forecourt. If Shell finds that this area is maintained according to brand standards, Shell will repay Sandy’s a portion of the gas markup.

See Also: Converting Your Forecourt into a Moneymaker

Sounds like a good deal, right? It is, as long as the forecourt is held up to standards. When it isn’t, this contractual arrangement becomes a disaster for Sandy’s.

Even when standards are considered low, it takes Sandy’s an average of 90 days to receive a copy of Shell’s audit report. Shell will deduct those 90 days from their premium reimbursement total. Ouch!

In a business where gas prices change overnight and customers complete a purchase within minutes, this arrangement doesn’t make a lot of sense.

The Case for Real-Time Data & Shared Responsibility

If Sandy’s had been self-auditing their forecourt on a regular basis, they would be able to report and respond to maintenance issues in real time. They wouldn’t have lost out on the money Shell pays back.

However, Shell could also help their retail partner by sharing its audit results in real-time via a mobile platform, rather than sharing this report quarterly. Sandy’s wouldn’t miss out on 90 days of payment, and Shell would maintain a high brand image.

When having a clean forecourt is in everyone’s best interest, suppliers and retailers should support one another. They can easily do so with mobile technology.

Topics: Business Operations, C-store

How Much Time Should You Spend at Your Franchises?

By Jennifer Hoffman

franchise-logos

If you’re a franchise operator who feels like you’ve been burning the candle at both ends lately, you might be told to “join the club.” Maybe your fellow managers say it, but hopefully that’s not the overall attitude of the corporate team. After all, who would want to join a club where the members feel exhausted and overwhelmed on a regular basis?

A franchise manager can’t be everywhere at once as a network grows. In fact, management should become less complicated over time – not more difficult. If you feel increasingly overwhelmed and short on time, it’s time to take a step back and look at your process.

“Focus on being productive instead of being busy.”Timothy Ferriss
Author “The 4-Hour Workweek

Consider how you might simplify franchise management. Take a few minutes to answer the following questions:

  • What are your current tasks in managing your franchise?
  • What are the goals you’ve wanted to accomplish, but haven’t had time for?
  • Which of your tasks can you absolutely not delegate at the store level?
  • Which of your tasks can you possibly assign to the store level?
  • What are your current productivity tools?

You may begin to see redundancies in your schedule, as well as opportunities to delegate and refocus your energies on a new initiative.

Take advice from New York Times bestselling author Tim Ferriss, author of “The 4-Hour Workweek.” Ferriss tells his readers how to “DEAL” with a packed work schedule, or “DELA” if you have a regular job like a franchise manager.

Definition

Set clear and attainable goals for yourself, your management colleagues and your franchisees.

Elimination

Focus only on those tasks that contribute to the majority of results, and delegate the rest. It’s the 80-20 rule, where 80 percent of your results come from 20 percent of your efforts.

Liberation

Free yourself from any one geographical location.  Ferriss talks about liberation as a lifestyle change, but from a franchise manger’s perspective it’s important to not be stuck behind a desk or constantly on the road. Let your store managers be your eyes and ears in the field. This kind of freedom will greatly reduce stress.

Automation

Ferriss talks about generating automated sources of income. However, this principle can also be applied to store operations. Automate your processes to save time and be more effective.

Coincidentally, Ferriss is a critic of technology and advocates hiring personal assistants from developing countries to free up even more time. However, unless you’re a solopreneur like he is, this may be rather difficult. If you need to stay connected, make sure mobile technology works for you and eliminates redundancies.

For instance, a series of emails to a store manager regarding a retail report might look like this:

  1. Did you get the store audit form?
  2. OK, here is the store audit form. Please see attachment.
  3. Did you complete the store audit form yet?
  4. I received the store audit form, and this is what I need you to do.

With the right mobile tools, these tasks can be consolidated onto one platform that identifies incomplete tasks and tracks progress.

So, how much time should you spend at your franchise? You’ll never have a four-hour workweek in retail, but you don’t have to have a 14-hour day, either. It’s a personal question and responses may vary. Before attempting to answer, though, take that important step back to look at your processes at the store level.

Topics: Business Operations, Franchise

3 Reasons Why Mystery Shopping is Dead

By Brian Harris

fry-mystery-shopper

It’s time to toll the bell for mystery shopping programs. Some retailers may be resistant to the change, and it’s sure to disappoint some faithful shoppers who earn extra money with these programs. However, the process of mystery shopping is outdated, time consuming and limiting when it comes to determining actionable insights.

Top 3 Reasons Why Mystery Shopping is Dead

 

3. Shoppers no longer see the time-cost benefit

Take, for instance, Johnny and Joanna’s mystery shopping experience. They are a young couple who were trying to make ends meet while living in New York City. At first, they enjoyed the free perks, extra cash and flexible schedule that mystery shopping provided. In the end, however, they decided the pay wasn’t worth their time and effort. They called the process of logging information and writing reviews “labor-intensive” and found that they were making less than minimum wage.

Likewise, retailers must consider the time-cost benefit of their current programs. While a retailer may be paying a company to help them sort through paperwork and countless photos, is the cost worth it? As a senior management team, do you have the time and resources to decipher the actionable insights from this data and create a course of action?

2. Mystery shopping has been linked to a growing number of scams

Consumers across the country have reported mystery shopping scams and are increasingly skeptical of becoming involved in these programs. The government has confirmed there are dishonest mystery shopping promoters and scammers who issue fake checks in an attempt to get people to wire money to a third party. Of course, these scams are detrimental to retailers who operate honest programs.

Technology is the double-edged sword for mystery shopping. On one hand, it makes more scams possible. On the other hand, consumer awareness is heightened as people self-educate.

1. Mystery shopping falls short on tracking progress over time

Mystery shopping data may serve as a snapshot of your stores, but it doesn’t provide the kind of thorough analysis retail operators need over time. Ultimately, the need for mystery shoppers is decreasing as district managers in the field employ mobile technology on their store visits. By uploading photos and videos, store managers and employees can be the senior management team’s eyes and ears in the field. Plus, the company’s own employees are better at spotting issues related to their stores.

Also, these staged situations can sometimes tip off employees that they are being evaluated. The “big brother” aspect of mystery shopping – the idea that management is looking for things that are wrong in the consumer’s experience – can cause a salesperson to become defensive when they discuss results with managers.

However, with transparent, employee-led auditing, the senior management team gains the ability to assign tasks when problems are reported at individual stores and track progress to ensure that these issues are resolved. When tasks are completed, employees can be commended for performing their duties, which leads to a more positive work environment.

Topics: Business Operations, Retail

Improving Restaurant Labor Productivity with Mobile Technology

By Brian Harris

qsr-employees

The minimum wage debate is a hot-button issue facing the restaurant industry right now.

Los Angeles just became the largest city in America to raise its minimum wage to $15. The increase will be staged in over the next five years. By passing this measure, the city joins Seattle and San Francisco in the push for $15 by 2018. Meanwhile in New York, a board met Monday to discuss the implications of raising the minimum wage for fast-food workers.

For restaurants and restaurant management companies, there are potential pros and cons of paying minimum wage restaurant employees more. Without getting into the political nature of this debate, it’s important to discuss one overriding issue: labor productivity.

Labor costs are a growing concern for the restaurant industry, writes Jonathan Maze of Nation’s Restaurant News. The head of the National Restaurant Association’s research and knowledge group recently revealed that restaurants average $84,000 in sales per worker. In comparison, grocers average $304,000 and gas stations rake in $855,000. All of these industries are competing with restaurants for customers, so something must be done.

Mobile Technology Closes the Gap

As we’ve discussed previously, the restaurant industry is highly demanding in terms of brand consistency and customer service. While it’s not easy for restaurants to increase labor efficiency, there may be some options that have not yet been fully explored.

Maze points out that technology is often an untapped resource. At the restaurant level, tablets and ordering apps could help the wait staff become more efficient and possibly reduce the size of the staff.

However, there is a much greater opportunity for mobile technology to increase labor efficiency.  Think of all the time that could be saved if employees started their shift knowing exactly what needs to be done. Senior management could assign mobile tasks to quickly and efficiently resolve issues and complete tasks. Those extra minutes emailing and making phone calls are eliminated, adding up to hours saved.

Consider a scenario where a restaurant chain needs to start preparing for a summer menu promotion. At the front of the house, signage and menus have to change. At the back of the house, new supplies need to be ordered and the kitchen staff needs to prepare. This is a multi-step rollout that needs to be done accurately across a chain.

Senior management could assign mobile tasks with start and end dates to complete the rollout while checking that benchmarks are being reached. With progress monitored in real time, last minute scrambling and guesswork is eliminated, staff members aren’t stressed out, and the restaurant is poised to capitalize on sales.

When productivity increases, labor costs are kept under control because restaurants don’t need to hire as many employees. So, if the minimum wage does in fact increase in the city or state where you operate, a restaurant can afford to pay higher wages without a devastating financial impact.

Remember: If the senior management team wants employees to be more productive, they have to practice what they preach by implementing the right tools and strategies.

Topics: Business Operations, Restaurants