3. Keep a close watch on inventory
When Melanson was working as a chef at a chain restaurant, he dreaded going in every Monday.
“That’s when I had to do the weekly inventory report,” Melanson recalls.
Now, teaching at Johnson & Wales, Melanson champions that very same routine to his hospitality students. Chains do weekly or biweekly inventory, he says, so they know where they stand with goods, can proactively adapt to problems, and more efficiently manage their budgets.
“There’s a method to the madness,” Melanson says. “It’s not busy work, but necessary work to ensure a responsive, profitable restaurant.”
Keeping tabs on inventory also means closely monitoring prices, pivoting and adjusting to swings in the marketplace. While chains boast their own procurement departments, cleverly leveraging their size to increase buying power, the independent lacks such fame and fortune.
Jeff Elsworth, Borchgrevink’s Michigan State colleague, urges independents to be in regular contact with their distributor and vendors to better manage their inventory and costs. Distributor sales representatives (DSR) can offer important value-added services, such as menu analysis, providing trend information, suggesting substitutions, and sharing inventory control best practices. Given that DSRs see their operator clients regularly and learn about the restaurant’s operation, well-informed reps can play an important role in profitability.
“Go talk to your distributor and tell them what you need help with,” Elsworth says. “There are valuable insights they can provide.”
4. Create and document standards
Chains prioritize and prize consistency, which positions them to regularly meet guest expectations and, ultimately, stay in business. Whether it is training programs, opening and closing procedures, recipe development, or even something as granular as greeting and seating guests, successful full-service restaurant chains carefully design systems to fuel the front of house, kitchen, and back-office operations.
And these standards, Gruitch says, are most definitely documented.
“That way, there’s no gray area,” she says. “People know what’s expected and what to do.”
Recipes, for instance, are detailed and precise, while job descriptions are similarly explicit and well-developed so hiring managers can target the best possible fit for a specific post, whether that’s a line cook, host, or event coordinator.
“When you set and consistently follow clear standards, you’re then in a better position to hold people to those standards since there’s little room for people to wiggle their way out,” Roth says.
5. Know how and where to get credit
Before COVID-19 rattled American life, veteran restaurant consultant Fred LeFranc says the independents were “kicking the chains’ butts.” As the pandemic wore on, though, chains re-established their might. What ignited the shift? Access to capital, LeFranc says.
“The chains all have access to a line of credit and that helped them through COVID,” says LeFranc, founding partner of Results Thru Strategy.
Led by full-time chief financial officers, the chains know how and where to get capital, which helps them navigate downturns and endure challenging times. By contrast, independents often put credit on the backburner and only turn to capital considerations when they encounter trouble. As such, they frequently struggle to provide lenders or investors a crisp and compelling case for financing.
Working at larger enterprises, Gruitch says she learned how to behave in a corporate environment, which has proven critical whenever she’s needed capital for Crafted Concepts.
“Investors want to see a strong business plan and feel confident they’re going to get their ROI,” she says. “Without this, you’re playing from behind.”