Wendy's Franchisee Taps Back-Office Tool to Lower Food & Labor Costs

While still having his morning coffee, Bobby Dunning studies a few key RTIconnect reports on Wen-Star, Inc.'s 15 Wendy's restaurants. In minutes and without leaving his Louisiana home, he has an accurate, detailed picture of the sales, labor, cash, and inventory in each of the restaurants spread across Louisiana, Florida, Georgia, and Alabama.

"You can really get the rhythm and beat of the store just by reviewing the RTIconnect reports and seeing what the numbers look like," says Dunning, business partner and vice president of operations for Wen-Star. "There's just a tremendous amount of knowledge in there, from food cost control to labor variance to schedules to cash controls."

Before implementing RTIconnect, a Web-based back office from Restaurant Technology, Inc. (RTI), each restaurant sent its sales and labor information to Wen-Star's headquarters in Thomasville, Ga., and waited for calculated numbers to come back. Now, with RTIconnect, the restaurants have nightly variances and schedules on the spot.

Food cost lowered
"At the beginning of 2008, we were actually running a 32.5 percent food cost. In July, we ran a 29.1 percent food cost," says Dunning. "Back in 2008 we got as high as a 2.5 variance to theoretical food cost, but as of July we were running only a 1.3 variance vs. our theoretical. The food cost percentage is [partly affected] by price changes, but the variance part of it has to do with us grinding this out every day in RTIconnect.

"Before we implemented RTIconnect, there was no way for us to count our food on a daily basis and know where we stood: there was no tracking of inventory. At the end of the week the stores were counting their inventory and sending the manual forms to the office. And the office was plugging in the numbers and sending it back out. We wouldn't know what the food cost was until it came back from the office. Now, RTIconnect allows us to zero in to the food cost almost immediately."

Dunning explains that they utilize the blue "drill-down" hyperlinks within RTIconnect reports for troubleshooting. "Any time we have an issue on any variance, we can hit that blue area and it takes us to the detail behind the report. For example, from receiving [the purchase] in July to the beginning inventory to the ending inventory to the actual usage of the product, it allows us to find where we lost that productÃ.‚¬"whether it was theft, whether it was portioning, maybe it was an incorrect invoice."

Another feature that has proved useful to Wen-Star is the ability to do a mid-day inventory count. "Now, at 4 or 5 o'clock, we count our 12 key inventory items. Then RTIconnect imports all the sales and products that we've used for that day. That lets us compare what we should have used to what we actually did use."

Interim inventory counts help management isolate and solve inventory variances. Using RTIconnect, Wen-Star was able to determine the shifts where the variances occurred and then make corrections to stop the losses. In one case the report showed them that food they thought they were short on was actually used in prep and could be accounted for in the prepped item. In other cases, they solved the mystery of unaccountable bacon and buns. "RTIconnect allowed us to find out that employees were throwing away bacon at the end of the night because the manager hadn't trained them what to do with it. The Bun Variance Report allowed us to learn that they were warming too many packs of buns at the close of the night" and then throwing away the excess.

Labor cost drops
The RTIconnect Labor Variance Report helps to track labor on the company's 600-plus employees. "The benefit of that is that it allows us to know what we were scheduled on labor, what we actually used, and the variance. From a dollar standpoint, we know right off the bat what store made their labor and who didn'tÃ.‚¬"for example, if a store should have had seven people in the afternoon and they had eight, the report will show me that. That's a huge financial savings for us, because we can pinpoint the labor waste. Last year around this time we were running about a 25.5 percent in labor. Right now we're running a 24.2Ã.‚¬"more than a percent drop in our labor cost just by using RTIconnect's scheduling process, which is a tremendous saving." he said.

"If a manager had to tell you what part of RTIconnect they like the most, they would tell you the scheduling, because the way we used to have to do scheduling was a nightmare. Now we can do schedules at the store level, make whatever adjustments we need to make and move on." Unlike other scheduling programs, he says, "RTIconnect does it all for you. It draws the shift lines; it tells you when to give people breaks and when you can't give them breaks; it tells you when people are supposed to be on line, and when you can't send them home. The only thing it doesn't do for you is put the names in." (RTIconnect gives managers control over the actual assignment of employees with an easy drag-and-drop employee availability chart.)

Reports offer cash control
Cash and Till reports have also proven valuable, he says, helping them identify excess inline voids, cashiers who shouldn't be handling money, or even cash that wasn't deposited. "We can see when the money went to the bank, when the manager came back, and whether they validated the deposit slip. If it's not validated, that's a red flag for us, to check to make sure the money made it to the bank. That's a huge saving in itself from a cash control standpoint," says Dunning.

"The Cashier Over/Short Report allows us to pull up each cashier individually and see what trend a particular cashier has in handling cash. That tells us that if a person doesn't deal with cash too well we need to not have that person on the register. On the Cash Report we look at manager voids. What we require is a reason for the void, a signature from the cashier and the manager, the original receipt, and the re-ring receipt. We allow our managers to run a 2.5 percent inline voidÃ.‚¬"where the cashier can go back and void an item without approval before they actually total it out. Anybody over that 2.5 percent is a red flag for usÃ.‚¬"that we need to be looking through the journal tapes to find out why there are so many voids on a particular cashier or a particular manager shift. It could be that they're not ringing up everything, or they're ringing it up and then voiding it out. All those reports are very, very important for us as an operator."

Operator's advice
Dunning has two pieces of advice for other operators using RTIconnect: (1) Be totally engaged in it, and (2) ease restaurant managers into it one section at a time.

"The number one thing that we had to learn was that the operators themselvesÃ.‚¬"whoever is responsible for the every-day operation of those restaurantsÃ.‚¬"have to be engaged and have to thoroughly understand RTIconnect in order for them to be successful," he says.

When Dunning left a decade-long career with Wendy's International to join Wen-Star, he came with extensive experience in theoretical food costing. But, he assured, it doesn't take that kind of experience to understand the software. "RTIconnect is not difficult. It's very user friendly. Whether a person has the kind of experience I have or is just getting into the business, if they're engaged in it they can understand it because RTIconnect has tutoring tools built in to help them. For example, if it's your first time making a schedule, you can watch a little movie clip, a video, and it will take you through how to complete the schedule. The bottom line is what you put into it is what you're going to get out of it. It's a really good system."

He also advises operators: "One of the mistakes that I see other franchisees doing is they try to start using all parts of the system at once. What I encourage is to implement one module at a time, starting with the easiest. A lot of managers today might not necessarily be computer literate, so it's better for them if you start with the easiest module. We felt our Cash module was the easiest, where you start to count the safe and put it in the computer, and you bank people on the register and bank them off the register. We did that for about two weeks, and after that we moved on to food cost and we worked that for about three weeks until everybody understood all those pieces. Later we came in and implemented the scheduling module. As we layered each one on, our business became more efficient."
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