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Keep an eye on measurables to grow profits

DALLAS —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

During the session “How to Maximize Your Profitability and Lock in Long-term Success” at the Multi-Unit Foodservice Operators conference, Saltz discussed best practices for management bonus plans, menu engineering and financial leverage. —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

First and foremost, he said, restaurateurs need to measure elements of the business that they have identified will help them succeed, such as the profit margin of each menu item, the return on investment of new kitchen equipment, the effective use of seating capacity or employee retention. —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

“You must set it and measure it,” he said. “What you don’t measure can’t help you.” —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

Leading restaurant chains keep their general and administrative costs under 7 percent of sales, prime costs between 55 percent and 60 percent, and a sales-to-investment ratio of 1 to 1, Saltz said. —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

He also noted that the best chains prune both their menus and their workforce at least once a year, identifying the “stars, workhorses, puzzles and dogs.” Companies should take care of the stars, with salary raises for the best employees and higher prices for the best-selling items; manage carefully the workhorses; set goals for the puzzles, whether through an employee performance review or the re-evaluation of price or cost of a puzzling menu item; and eliminate the dogs. —The basics of good food, unit-level execution and the right location can lead to restaurant chain success if managed properly, said Brad Saltz, director of restaurant services at SS&G Financial Services and the former chief financial officer of a restaurant company.

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