In this installment, we speak with industry veteran, and real veteran, Jim Short. Jim has been in the industry for over 30 years, most of that time working for Pizza Hut franchises. He started in the kitchen washing dishes and has moved up to Facilities Manager for a large multi-unit operator.
There is a better way to run multi-unit restaurants, managing an entire chain using daily checklist software in real-time, which provides your Ops Teams with store level visibility and managerial accountability. Plus when restaurants are held accountable to following your procedures, they run better, safer and more profitable locations.
Restaurant companies spend millions of dollars and untold hours developing, training and implementing procedures so that the restaurant store teams know exactly what they need to do at every part of the day so they can make sure the restaurants are ready for guests. The food is prepared correctly and it is safe and delicious. The problem has always been, that no one at the restaurants uses the checklists or follow the systems as they are designed. See our blog on the Industry’s Dirty Little Secret.
These benefits of increased visibility and accountability are what has been missing from multi-unit operations mainly because the technology to make this easy to do just wasn’t available. Today for the first time in the restaurant industry’s history, not only is the technology affordable but it is widely available. Your operations team knows that by implementing a daily checklist system that it would be better for your customers, your stakeholders, and your bottom line, but they don’t want you to implement it.
No restaurant professional
We all know as restauranteurs or as diners, restaurants that serve good and safe food in a clean environment, with a decent staff generate more sales and profits than their competitors. Duh!
We are currently talking to a national chain about implementing our daily checklist software at their restaurants. We are speaking with their QA team, who recognizes that they could do better as a chain at ensuring that the restaurants are clean and that the food they are serving is held at proper temps and safe for consumption. Our contact told us to tread lightly with Ops because they were a little scared of our software.
Not scared of the software itself but scared of the accountability and visibility it would bring to their department.
I was speaking with a friend who manages several hundred restaurants last year and I was telling him how our software could provide his area managers with visibility into what was happening in each of his franchise stores. Alerting them to critical food safety violations in real-time. His response was, who is going to manage all these alerts?
I was talking with one of the top pizza chains in the US and I was told that their lawyers weighed in and they didn’t want to know if their franchise stores were safe or not safe. If they knew then they could assume co-liability.
That is such a lawyer mentality. 1. People can sue you for anything. 2. If you got sick at one of their restaurants, would you only sue the mom and pop who own the
The mentality that it’s better not to know where we have issues at the restaurants rather than discovering where we have operational gaps and fixing those ourselves to protect our brand and customers is such a short-sighted mentality and quite frankly it’s mind-boggling to me.
The question is; why are restaurant operations teams hesitant to implement Ops Management systems, like OpsAnalitica, that could help them run better daily restaurant operations?
I think it comes down to being held truly accountable,
Now, I want to acknowledge that running 1 or 4000 restaurants is hard. From my experience, they are both equally challenging with different problems but it takes everything you have to keep the doors open at these locations.
I also want to acknowledge that the technology that one would use to get real-time visibility and oversight at the restaurant level is fairly new, we launched in 2015. There were a few players when we started but not many. This technology really became prevalent with the invention of the tablet and smart phone.
Today, most restaurant companies have very little oversight into daily operations. Because of this, they look at the following data points to determine how well a restaurant is operating:
- Audits: restaurant inspections that are conducted on a quarterly basis by the field teams or by 3rd party auditing companies. These inspections are thorough but happen so infrequently that they can’t be used to change behavior or ensure that daily operations are being executed to standard.
- Costs: looking at controllable costs: food, labor, paper, liquor, etc. to determine manager efficacy.
- Customer Feedback: looking at number of complaints and compliments. This number is skewed because so few people care enough to actually leave a comment. These people are the most passionate from a good/bad perspective, that they are willing to take the time to tell you what they are experiencing, you have to look at these numbers with some skepticism. You could also lump social reputation, Yelp Scores, into this category and I would suggest that social media is easier to use than traditional customer experience programs.
- Health Inspections: most restuarant companies don’t do much with this data because it is hard to get. Also, health inspections are notoriously skewed up according to Google, see our last blog, and they only happen a couple of times a year.
- Sales: Another measure that looks at manager efficacy but really need to be looked at in comparison to other restaurants in the immediate area, including competitors. A restaurant could have incredibly high sales but still not be running all that well, look at airport restaurants, who have high volumes because of location and a trapped clientele.
Traditionally, Ops Teams have evaluated all of these measures and backed into restaurant operations scores but these measures don’t tell the full story. As a side note, when you take these traditional data points and overlay them onto the data you can get from an OpsAnalitica or any other Ops Management system, that is the holy grail. You can directly correlate how operations affect sales, costs, and customer satisfaction.
Because of the way most restaurant companies structure their organizations and how we currently measure restaurant operations, see above, there is very little direct accountability anywhere in
Restaurant managers/franchise owners are in charge of their restaurants, and in a perfect world, they would execute to all company standards.
The restaurant’s direct supervisors, Area Directors, traditionally manage multiple units and are very rarely in each of their restaurants on a daily basis. Depending on the size of the organization they may only get to a restaurant 1 time a month or a quarter.
The Area Director level of management is corporates representation within the organization but it is a very hard job to be effective at. It goes up from there with upper levels of management getting to restaurants on even a more infrequent basis.
Today chains rely on audits for direct contact with the restaurant. Audits are only so
There are two things wrong with these “are people following procedures” questions: 1. they aren’t worth enough points to truly affect the audit score, therefore they don’t penalize people enough for not following the daily procedures. You have procedures but have no mechanism for holding people accountable
2. Audits generally happen quarterly, so they don’t meet the timely standard for providing effective feedback. If you are auditing in December, it’s impossible to hold people accountable for not following procedures in October.
Restaurant organizations lack direct managerial accountability and since they’ve never had it, they don’t perceive that they absolutely need it today. I think it goes a little deeper than that. I think they know, I knew when I was in corporate ops at Quiznos, how things are at the restaurant level and they are worried about being completely overwhelmed with new issues if they started to hold people accountable.
They see holding people accountable to following procedures at least in the short-term, could be creating a ton of new work for themselves that they don’t have today because they don’t know what they don’t know.
Staffing is also a problem because current org structures are not staffed to handle real-time management of all their restaurants. This is a fair and real concern but not an impossible one to be overcome. With our technology, one or two people could effectively manage a large organization of restaurants from corporate using our alerts and reports. Staffing shouldn’t be used as an excuse for not implementing a system that would increase sales and customer satisfaction across the organization, it is an opportunity to reorganize your current teams to be more effective.
Visibility and Perceived Liability
If you start to get real-time visibility and issues are being bubbled up to management, you have a brand and legal responsibility, due care
I would agree that this a real legal liability to know something is wrong and not take action. As an Ops Leader, you should absolutely put into place procedures to deal with issues in real-time and work to make sure that your operations are safe. That goes back to staffing and being able to address things in a timely manner.
When in the history of the world was it a better long-term policy to ignore bad things happening within your business instead of addressing and fixing them? Never!!!!!
I think that a lot of restaurant company executives would be surprised or at least overwhelmed by the amount of daily critical infractions they would find if they had the OpsAnalitica system implemented across their restaurants. I’ve seen the data coming in and it is pretty scary.
Pretending that you don’t have issues is not the same as not having issues. Not having issues because you are proactively managing them out of your business is better.
I’m not going to harp on self-preservation for 20 paragraphs. Nobody wants to be perceived as not doing a good job. It takes strong leadership to lead substantive change into an organization and to build new skills and change procedures. It’s not easy or fun.
Let’s pose this question to ourselves. Would you fly on an airplane if airplanes were franchised and operated similiarly to how restaurant companies operate their restaurants? Hell No!
The comparisons between airplanes and restaurants is very relevant. A busy restaurant will serve as many people as a plane would transport on a trip. Both airlines and restaurants have massive responsibilities in ensuring the health and safety of their guests. If a restaurant or an airline doesn’t do everything they are supposed to do, the results can be
If you are a restaurant executive that wouldn’t fly on a franchised plane that was operated by one of your franchisees. Then you have to ask yourself why a person should eat at one of your restaurants.
I’ve made the case that restaurant Ops Teams have been resistant to implement Ops Management systems like OpsAnalitica, because they are concerned about being held accountable for their restaurants, the potential for an increased amount of work that would cause them in the short-term, the liability that could be incurred by knowing what is happening in their restaurants if they are unable to get those issues rectified, and their own self-preservation. All of these reasons are BS.
We now have a technology that can help us run better restaurants, keep our guests safer, and increase customer satisfaction which will lead to increased sales and profits. Restaurant leaders have a fiduciary responsibility to their stakeholders to implement systems that are going to protect and grow their investments. We have a human responsibility to run better restaurants for our customers.
If you want to learn more about OpsAnalitica, click here.