Powering Up With POSBy Baselinemag | Posted 2008-04-30 Print
Johnny’s Lunch is on a roll with a combo of good food at reasonable prices, great service and the right technology.
Powering Up With POS
Johnny’s Lunch owners also have begun investing in technology-based solutions that will enable and support the quick, extensive growth they’re planning. “We all agree that technology is the backbone of success,” says Goulson.
That’s why, once Johnny’s Lunch finalizes the right locations and the right people to run the restaurants, the company will put the right POS technology into their hands—something that many aspiring chains forget.
“In the QSR space, you see small one-store operations, or those with less than 10 stores, invest in a processor-based POS system that they’ll outgrow at 15 stores,” says Sheldon of the IHL Group. “It’s impressive that Johnny’s Lunch is looking at their endgame so early, and it is absolutely critical if they are going to scale at the pace they want to.”
The right POS system is vital to the success and competitiveness of any quick-service restaurant—for both corporate management and individual restaurants. “The point of sale technology is hugely important,” says Charles Cross, chief financial officer (CFO) of Johnny’s Lunch. “In the restaurant environment, you have food that spoils quickly and profit margins that aren’t huge. You have to watch the pennies and control ordering, waste and inventory levels.”
That’s why each restaurant will be required to buy a MICROS 3700 POS system from MICROS Systems. “The MICROS system gives us the ability to look at sales trends and quickly make necessary changes,” Goulson explains. “We can look at both products and operational techniques.”
The company’s “Keep It Simple” mantra, which requires each store to invest in the same technology, has solid strategy behind it, according to IHL’s Sheldon. “If you have 400 stores and they have three POS systems to choose from, that can create problems from a hardware platform standpoint,” he adds. “It also can create havoc in terms of data uniformity, polling, communications, PCI compliance and more.”
The MICROS system has been simple for workers to understand and use, an important feature in a business that often suffers from quick employee turnover. “For a complicated system, it’s remarkably user friendly,” says CFO Cross. “It’s also important that MICROS is a large company with deep resources and a national reach. When we are nationwide, we will need a vendor that has service locations throughout the country—and they do.”
For the day-to-day running of the store, the POS system can make the difference between success and failure. “The point of sale system allows me, as the general manager of the Waterford restaurant, to be in touch with the business numbers for ordering purposes,” Brown says. “We run a tight inventory, and controlling waste and inventory allows us to raise profit margins by keeping money in the bank, rather than putting it in the garbage or on the storeroom shelves.”
The POS system also helps franchisees adhere to government regulations and other rules. “The alert manager on the system allows the manager at Johnny’s to configure the system so that he or she will be alerted if food takes too long to prep, or if a labor law is about to be violated, or if a cashier has voided too many transactions,” says Ed Rothenberg, vice president of operations, restaurant sales for MICROS.
Brown also uses these alerts as a training tool in the Waterford restaurant: By monitoring order fulfillment, he can spot bottlenecks in the food preparation and cooking process and make appropriate staffing changes or training efforts to bring everyone up to speed.
The system also allows various sales data to be gathered and analyzed for overall trends concerning menu items, locations, store hours, inventory, waste and more. “From a management point of view, we must have the right reporting and tracking devices,” says Cross. “The POS system supplies a lot of immediate online information, and it does it in all sorts of ways so we can respond immediately to customer themes.”
For example, the POS system allows the company to track parameters such as how much food is being eaten in the establishment versus how many meals are being carried out. “We have a fixed size of restaurants, and if the amount of eating inside goes up, we need to consider whether we have to go to another type of restaurant,” Cross explains.
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