Article
The right stuff
An Arby's operator finds the formula for success.
April 25, 2007
If there's a secret to running a successful QSR operation, the folks at Arby's franchisee The Restaurant Co. know what it is.
The Arby's location the company operates in the Richmond, Va., suburb of Short Pump does about $3.5 million a year in sales, making it the highest-volume Arby's in the country. Five of the other 16 restaurants the company operates in the Richmond area rank among the top ten highest-volume Arby's in the chain.
The secret of the company's success isn't really a secret, though. The Restaurant Co. officials said it really comes down to an adherence to an exacting set of standards developed over years in the restaurant industry.
"We've focused for many years on some key things," said company president Bill Lowe.
"The first and probably the most important thing is to protect the integrity of the product you are selling," he said. "You have to make sure that it is right every time, down to the processes you have in place and the people you have preparing the product."
Sandwiches in the Richmond Arby's are assembled fresh-to-order by workers who take pride in what they do, Lowe said.
Virginia businessman Richard Ripp founded The Restaurant Co. in 1967, purchasing two existing Arby's restaurants in the Richmond area. Throughout the 1970s, the company operated several full-service restaurants, eventually shifting its focus to its Arby's properties, adding restaurants and garnering accolades from Arby's' parent company along the way.
"Dick Ripp is one of our founding franchisees and epitomizes what Arby's stands for – innovators with a mission to make a difference with our customers every day," said Tom Garrett, president and chief operating officer of Arby's Restaurant Group Inc. "We honored Dick with a Lifetime Achievement Award during our 2006 Worldwide Franchise Convention."
Raising the bar
Lowe attributes much of the company's success to hiring standards almost unheard of in the restaurant industry. The company has a turnover rate of slightly above 50 percent, unusually low for the industry.
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Before an employee goes to work for The Restaurant Co., they undergo a psychological profile, a drug test and a criminal background check, and that's after having gone through several interviews.
"We started doing this about 10 years ago," Lowe said "It was not very popular with our managers because they felt we were limiting the employment pool."
Most restaurant managers have been in the situation where they were short-staffed and either spending money on overtime or working the position themselves. Such scenarios create a situation where a manager hires the first person to walk through the door with an application in their hand, Lowe said.
"When you are shorthanded, sometimes you tend to panic and just try to fill the position with a warm body," Lowe said. "Occasionally managers can make bad decisions with regard to hiring if you don't have processes in place to help them make intelligent decisions."
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Inside a Richmond, Va., Arby's owned by The Restaurant Co. |
With such strict standards, especially in an area like Richmond, where the unemployment rate is less than 3 percent, how does the company attract new workers?
"In a lot of situations the people we would like to employ are working somewhere else," Lowe said. "They come into our restaurants as customers, size us up, and if they like what they see they make a decision as to whether this is a good place to work."
Once the company hires someone, Lowe said, the processes in the restaurant are designed to help them be successful. The company conducts employee satisfaction surveys twice a year to help spot problems.
Restaurant employees also have the authority to solve a customer problem, up to $100.
"We are not always perfect and we do mess some stuff up every now and then," Lowe said. "If a customer has a problem, their first contact is going to be with that part-time person, so if something goes wrong that part-timer can be a hero and fix things. As a result, they have more pride in what they do."
An untapped market
One key area where the company looked in order to increase sales in its restaurants was dinner. While the restaurants were packed at lunch, that wasn't always the case in the evenings.
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"We didn't have enough seats at lunchtime to service the customers who were coming in, but at nighttime the traffic count wasn't there," Lowe said.
"We are full-service guys running fast-food restaurants, so we look at things differently," he said. "We focused on dinner, where a lot of quick-service restaurants focus on breakfast."
The company supported that effort with innovative restaurant designs including carpet on the floors, softer lighting, granite countertops and wooden chairs. The Short Pump restaurant even serves beer and wine, although it's a small part of the business, Lowe said.
"If you are really trying to analyze why our average unit volume is so high, dinner has a lot to do with it," Lowe said. "Our lunch/dinner mix is about 50/50."
Over the years, The Restaurant Co. has shared many of its strategies with its parent company, Arby's Restaurant Group, and some of those have been adopted throughout the system. The company's current Pinnacle building design was developed in Richmond, and menu additions such as French fries and chicken products originated with The Restaurant Co.
"They have worked very well with us for many years and we have a great partnership with them," Lowe said of parent company. "They have given us a lot of room to experiment at our expense, and as a result we constantly provide them with results and share what we are doing."
