Global Fast-Casual Restaurant Chain

The more locations a restaurant brand or franchise has, the more difficult it becomes to achieve operational consistency. From a financial standpoint, one of the main challenges is to achieve consistent and optimal operational performance across a portfolio.

THE CHALLENGES:

Our international client owns and operates more than 30 fast-casual restaurants across Canada. The client was experiencing variances in operating performance levels across its managed restaurants and did not have the systems and processes in place to understand the causes. In addition, the client was forecasting margin pressure as a result of an imminent increase to minimum wage and rising food costs. Furthermore, the client was planning expansion in the following year that would grow its portfolio by 25% and sought guidance to develop an operational model to meet the needs of its growing business.

Carpedia Hospitality conducted an analysis of the operations and the findings identified that inconsistent staffing models were being used regardless of fluctuating demand patterns. Informal forecasting practices also created uncertainty for line-level management that resulted in additional labor spending and high food waste. We also found that menu preparation varied throughout the organization resulting in longer food preparation times and increased customer wait times. Carpedia Hospitality identified a significant opportunity to help the business define optimal performance, to achieve consistent operational results throughout the individual units and to alleviate margin pressure to gain a solid base from which to expand from in the following year.

THE SOLUTIONS:

The engagement spanned across a 2-year period and our consultants travelled across Canada to implement the program alongside the corporate and line-level management teams. We helped our client to:

• Introduce process changes that focused on the number of steps required to prepare menu items
• Install system tools that allowed management to accurately schedule labor based on daily revenue forecasts
• Develop performance visibility tools at the regional and executive level that measured operational performance

THE RESULTS:

Given the large scope of the project, the results were wide-ranging. Overall, the changes and tools that were developed provided the client with an operating model that was used to improve performance in the existing restaurants. Specifically, changes to the client’s inventory management practices and food preparation process resulted in reduced food costs while the dynamic staffing model alleviated labor cost pressure. Operational performance became stabilized throughout the portfolio, regardless of the restaurant’s geography or layout.

Furthermore, the operating model was scalable and used in the roll-out of the new restaurants the following year. The improved model resulted in the new restaurants achieving stabilized operating performance in half the time compared to past openings.

Feedback from the client was extremely positive given operating results became more consistent across the business. It was identified that the benefits of the project were long-lasting and continued to yield results well beyond the year after the project was completed.