Industry News | September 10, 2008

BK Franchisee Saves on Food Costs

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Everything isn’t always bigger in Texas. One Burger King franchisee is trying to go small—smaller food costs that is. Hart Restaurant Management, which overseas more than 30 Texas Burger King locations, cut its food costs by 2 percent recently thanks to back-of-the-house software RTIconnect.

Dustin Harris, IT manager for Hart Restaurant Management, helped implement the software at the company’s various locations, showing each manager how to use the program to identify problems and cut food waste.

According to RTI’s Vice President of Sales and Marketing, Greg Waddell, the technology works through a store’s point-of-sales system. From there, sales are compared to stored recipes in RTI’s database. For example, a recipe for a Whopper combo states exactly how much of each ingredient goes into one order. By multiplying the number of combos sold by the number of required ingredients, operators get a reliable food calculation or a “daily food variance report.”

“Our daily variance management process, when it is done properly, adds, in my opinion, 2 to 2.5 percent of profitability to our company,” says Hart’s Managing Director Gary Hodge in a statement. “That percent is based on a percent of sales. It drops straight to the bottom line.”

Hodge says that in one of the company’s best-performing stores, food purchasing was about $1,700 higher than it needed to be.

With the economy showing no signs of a dramatic recovery, Waddell says more quick-serves are looking at ways to tighten their belts and eliminate excess spending. “These people are operating on very tight margins, so every penny counts,” he says to QSR. There is so much competition. There’s an Arby’s, a Burger King, a Wendy’s on every major corner, and those are very expensive buildings, expensive land, and they have a lot of personnel costs as well.”

Waddell encourages the 2,047 stores using the system to run reports on their most expensive items, like meat and cheese, daily while other menu items can be checked weekly and paper products can be checked monthly.

Convincing Hart’s IT manager to put full faith in the system took more that Waddell had probably bargained for. In a statement, Harris said: “There were days Gary was dragging me kicking and screaming, and I was telling him this was not going to work for us.”

Startup costs for the system run about $250 per store and $99 a month per store after that. While most of RTIconnect’s clients are multiunit franchisees, Waddell says that the Arby’s corporation uses the technology to control food costs as well.

Calls to Hart Restaurant Management were not returned.

--Blair Chancey

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.