Improve Restaurant Margins by 5%-20% annually


This is not so much a question as a statement. Margin improvement is obviously a good thing for business profitability and sustainability. In the current economic environment margins are taking a hit, for sure. But, there are ways to improve margin without increasing menu prices, cutting corporate staff or reducing or eliminating the intangibles like advertising and marketing.

FohBoh is a dedicated B2B social network for the greater foodservice industry. That's restaurants and non-commercial businesses too. The "center of our plate" is fast becoming HR, training, development and education for our members. Along the way, we have developed an interesting strategy for increasing margins while improving FOH and BOH operations and customer service.

Concept
Improving employee | employer relations lead to a more engaged employee group; a happier employee group - resulting in less turnover and lower costs.

This is a fact. The higher the guest check average the lower the employee turnover is. Last year, QSR averaged over 145% employee turnover and the casual segment averaged right about 100%. This is a terrible statistic and, terribly expensive when you consider that the average cost to hire, train and develop one hourly employee is about $2,500, or $15,000 for a manager.

Imagine the following case:

Number of restaurants in chain: 100 restaurants
Average employees per restaurant: 75
Total employees (operating): 7,500
Turnover rate: 100%
New employees: 7,500
Cost per new employee: $2,500
Total potential cost annually: $18,750,000
Total cost per restaurant: $187,500
Projected sales per restaurant: $2.8mm
Estimated cost per restaurant: 6.7%
Cost per 1% of turnover: $187,500

Imagine being able to save 5% the first year and another 5% in turnover the second year. Or, $937,500 in year 1 and a total of $1,875,000 over two years? Without raising menu prices, cutting staff or reducing advertising and marketing expenses.

So, let me suggest that FohBoh may have a solution for you that will support this case. It's the co-branded, FohBoh dedicated channel concept that will engage your employees in an interactive environment.

If you are interested in learning more about total employee engagement and how social media technology can improve your margins; FOH operations and BOH food quality, ultimately help drive revenue, just ask.

Views: 501

Tags: employee, engagement, fohboh.com, media, social, total, using

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Comment by Michael L. Atkinson on June 29, 2008 at 3:22pm
Joe, thanks for asking. First, the Channel is both pubic and private, depending on how brave the enterprise is. With a flip of a switch, the employer | employee side is private. With another flip, the customer | company side is public. In both cases, fully interactive, transparent and meaningful.

Also, this technology is designed to work with any size organization (SME and franchisers, schools, and associations too) that wants to engage their employee | franchisees | students | members | group, and interact with their customers.

I see turnover dropping quickly in those organizations willing to work the system and benefit from linking to the entire restaurant industry.
Comment by Michael L. Atkinson on June 29, 2008 at 12:03pm
Yep, I agree. Employee turnover is the tip and there are many more ways to improve margins. I am writing a white paper on this subject area and would appreciate any case study materials from your experience. Once written, I will quote sources and provide you with copies as well. Please send yur thoughts, experiences and case materials to me at michael@fohboh.net.

Cheers!

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