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TRANSCRIPT
Today’s Expectations
Let’s review the agenda:
• Drive People Capability – Lisa
• Break!
• Execute High Operational Standards - Steve
• Grow Real Sales – Robert
• 2010: The Bonus Plan – Robert
• Wrap-Up!
• Have A Safe Trip Home!!
Meeting Expectations
Let’s have a good time!
Be engaged!
Participate!
• Breaks
Be a leader at your table!
Take away and share some your ideas!
• Your managers
• Your team members
Leave with a common vision!
Go back and make a difference!
A Common Vision
The Importance of Vision
Why is it so important for leaders to have a
common and clear vision?
Because leadership is about going
somewhere. If you and your people don’t
know where you are going, your leadership
doesn’t matter!
Let’s talk today about our common vision….
2010
Another Year of Growth Joe Langteau
President & Chief Executive Officer
2010 Key Accomplishments
Comp sales of -.19% despite continued
economic challenges & cannibalization
Labor cost reduced from 32.33% to 31.95%
Food cost declined from 21.85% to 21.62%
9 restaurants were remodeled w/ “Momentum”
elements
Team member turnover annualized at 90%
2010 Key Accomplishments
2 new restaurants opened - one under
construction
Record OAR scores
Field OPS Team stronger than ever
LRM efforts are having a positive impact
Recognition culture is building
2010 Opportunity Areas
Growing Real Sales remains challenging
New restaurant performance below targets
Facility challenges resulted in higher than budgeted
R&M expense
Must take coaching process to next level
Voice of Guest program has exposed operational
weaknesses
We need to build a stronger bench
Comp Sales Trends are Soft
-4.00%
-2.00%
0.00%
2.00%
4.00%
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12
-2.91%
2.56%
-1.40%
-1.28%
-2.62%
0.78%
-1.03%
0.86%
-0.50%
1.06%
0.65%
1.16%
-.19% 2010 YTD
Comp Sales By Market
-8.00%
-4.00%
0.00%
4.00%
8.00%
12.00%
16.00%
DFW Austin Houston El Paso Waco Amarillo
0.73%
-1.57%
-4.30% 0.22%
-0.03%
9.88%
-.19% 2010 YTD
2010 Top 10 Scoreboard!
1. Kendell Bolden #1468
2. Son Laveau #3007
3. Randall Cook #1333
4. Dave Lucas #1487
5. Ivan Lagunes #1467
6. James Bush #1392
7. Robin Castaneda #1454
8. Marty Huss #3010
9. Staci Robeson #1939
10. Stan Venne #3025
2011
The Year AheadJoe Langteau
President & Chief Executive Officer
2011 Outlook
Economic environment predicted to
improve
Substantial competitive activity at breakfast
IHOP continues to outperform the category
Guest expectations remain high - no tolerance for poor
service
Best operated restaurants will widen their lead
Opportunities exist to secure real estate at reasonable
prices
Solid marketing calendar in place w/ LRM support
Doubled Market Share in 10 Years
51% 51% 49% 47%58%62% 59% 55% 53%
47%
7% 7% 7% 7%
6% 6% 6% 7%7%
7%
13%12% 12% 13% 13%
10%9%9%11% 11%
15%14% 15% 16% 16%11%9%9% 12% 13%
18%16% 16% 16% 17%15%16%15% 15% 16%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$1
4.2B
$14.
5B
$14.
6B
$14.
5B
$14.
1B
$13.
9B
$13.
8B
$14.
0B
$13.
9B
$14.
2B
CRESTFamily Dining
Family-style Market Share by Brand
Mark
et
Share
Independent /
Other Chains
Increasing Competitive Pressure from
Family Dining, Fast Casual and QSR
$74.0MM
$2.6MM
$4.2MM
$29.8MM
$3.4MM
$17MM
$2.2MM
$36.7MM
$37.9MM
$8.3MM
$3.0MM
$36.6MM
2011 Critical Priorities
Grow sales by 1.62% w/ traffic increases
Launch RosNet food cost tool
Take LRM efforts to the next level
GLI of 80% through focus on guest service
Improve restaurant cash flow thru focus on labor &
food cost control
Effectively manage labor costs
Achieve team member & management turnover
targets
Complete 10 remodels & open 2 new restaurants
Recognition acceleration
What Do We Stand For?
Recognition
Coaching
Guest Service
Recognition
Must become a part of how we do business
Praise progress
Build strong systems
Recognition is a great accelerator
Personalize to fit your team
What gets recognized gets repeated
Coaching
Feedback is the breakfast of champions
Define the performance breakthrough
Structured coaching sessions matter
Taking advantage of coaching moments
Managing the difficult conversations
Keep score of progress
Active listening can be eye-opening
Our Passion to Serve
“Outstanding Guest Service is the Only
Long-Term Sustainable Competitive Advantage”
Guest perception really matters
Create an environment where team members are
rewarded for exceeding guest needs
Eliminate barriers that negatively impact guest
service
Hire the smile & attitude
Reward guest service role models
2011
The Year Ahead
Thank You!
2011
Optimize Restaurant
ProfitabilityDoug Shaw
Chief Financial Officer
2010 Achievements
Project 10 was implemented and achieved!
• We budgeted over $900K in improvements
For the first time in ACG history, we will end the
year with 10% Margins!
• Projected Sales of $110M and EBITDA of $11M
All General Managers have been trained by
Darylann on the P&L Review Process.
• You now have the tools to more effectively manage your
P&L’s
Micros 4.8 was successfully rolled out to every
restaurant
• We were once again the pacesetter in the IHOP System
2011 Initiatives
Launching a 4 restaurant test with
RosNet (Food Cost & Reporting Tool)
Implementation of Restaurant Financial
Audit Process
Continue to focus on unprofitable &
questionable discounting
Test the RosNet Labor solution in the
second half of the year
RosNet Food Cost Solution
Launching a 4 restaurant test with RosNet
(Food Cost & Reporting Tool)• This is our project, not IHOP’s project
• RosNet is a proven food cost and reporting tool in the Applebee’s
system
RosNet will provide us with…• Actual vs. Theoretical food cost down to the ingredient level
• Actual vs. Budget Weekly P&L
• Full suite of reports on Sales, Food Cost, Labor and P&L
Performance
• No more package logs, no more e-mailing of product transfers, no
more 9 numbers files…
The test should last a couple of periods then we will
start training & rolling
Restaurant Financial Audits
Darylann has created a Restaurant Audit
Document
The intent of the audit is to coach and teach• Goal is to have consistently applied processes across the system
• Focuses on Cash Handling, Inventory, Accounts Payable,
Discounts, etc.
The Restaurant Audit will be a graded audit so you
will know where you stand
Results will be communicated to you, the Area
Director and the RDO
Reduce Discounts
Every 1% In Discounts equates to $1.0M
In Restaurant Cash Flow!
Focus on the Outlier Restaurants• Daily Reporting of Server Sales & Discount %
• Identify Patterns of Behavior
• Execute Server Checkouts with Excellence!
We did this in 2008 and achieved an $800,000 P&L
Impact
Every time we focus on this we make an impact.
Let’s make it permanent!
2011 Budget Assumptions
Annual Adjusted EBITDA Goal is $11.9M
Comp Sales Growth = 1.62%
Open 3 New Restaurants; 1 in January and 2 mid-
year
Remodel 10 Restaurants
Base Business Restaurant Cash Flow Growth of
$866,000
2011
Enhance Facility BasePhil Slyby
Director of Construction & Real Estate
Christina Castillo
• Facility Manager – North Region
Dan Parada
• Facility Manager – South Region
Mari Martinez
• Real Estate & Facilities Project Coordinator
• Hotline to communicate all facility issues
• Goes to all Facility Managers mailboxes
Enhance Facility Base
3 NRO’s in 2010:
• IHOP #3023 Mesquite
o 6-12-10
• IHOP #3027 North Park
o 11-10-10
• IHOP #3026 Arlington
o 1-15-11
Real Estate, Construction &
Facilities
Sites under contract:
• Harker Heights
o Suburb of Killeen
o Estimated opening P7, 2011
Real Estate, Construction &
Facilities
Sites being negotiated:
• Abilene
• Webb Chapel – Dallas
• Freedom Crossing – Fort Bliss
• Kyle Crossing – Kyle, Texas
Real Estate, Construction &
Facilities
Cities being searched:
• Tyler
• Lindale
• Stephenville
• Cleburne
• Houston
• Lakeway (Austin)
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
#3027 Northpark in Dallas
Real Estate, Construction &
Facilities
#3026 Arlington
Real Estate, Construction &
Facilities
2011 Remodels• IHOP #1437 - The Woodlands
1/9 – 1/12
• IHOP #1459 - Uvalde
2/6 – 2/9
• IHOP #1450 – Cedar Hill
3/27 – 3/30
• IHOP # 1937 - Decatur
4/17 – 4/20
• IHOP # 1404 - Garland
5/15 – 5/18
Real Estate, Construction &
Facilities
2011 Remodels• IHOP #1413 - Plano
6/5 – 6/8
• IHOP #1929 – The Colony
7/10 – 7/13
• IHOP #1438 - Lewisville
8/21 – 8/24
• IHOP # 1439 - Austin
9/25 – 9/28
• IHOP # 1934 – El Paso
10/16 – 10/19
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
Real Estate, Construction &
Facilities
http://www.acgtexas.com/acgintranet/intranet.php?id=1
Real Estate, Construction &
Facilities
2011
Grow Real SalesMike Grady
Regional Director of Operations
South Region
Grow Real Sales
Properly Implement the Pancake
Revolution Internet Marketing Plan
Establish and Execute IHOP Nights in Every
Restaurant
Drive Improved Execution at the Front Door &
Host Areas
Grow Real Sales
Properly Implement the Pancake
Revolution Internet Marketing Plan
• Q1 Milestones Plan and implement comprehensive program
to drive overall E-Club membership to at least 100,000 members by April 1, 2011.
Create and implement E-Club marketing program to supplement current IHOP Corporate LTO and marketing campaigns.
Grow Real Sales
Establish And Execute IHOP Nights
in Every Restaurant
• Q1 Milestones
Implement specific training guidelines
including:
Internal restaurant guest connect
practices
Proper use of available marketing and
support materials
Proper IHOP Night operational implementation
Grow Real Sales
Drive Improved Execution at the
Front Door & Host Areas
• Q1 Milestones
Enhance front door execution to achieve a
minimum 80% “Greeting” VOG Score thru the
following:
Verify proper scheduling procedures in all
restaurants
Readdress hospitality expectations
Re-train guest timing procedures
Re-train wait lists/times
IHOP National
Pancake Day 2011
Mike Grady & Wendell Patterson
IHOP National
Pancake Day 2011
Who are the Shriners?
• Key focus areas
International fraternity of approximately 375,000 members (volunteers) from 191 temples throughout the US, Canada and Mexico.
They support a one of a kind international health care system of 22 hospitals dedicated to improving the lives of children.
These hospitals provide care for children up to 18 years of age free of charge:
Orthopedics
Burns
Spinal cord injuries
It costs approximately $2M a day to operate their 22 hospitals.
IHOP National
Pancake Day 2010 – The Review!
What happened last year?• Last year, we once again focused an entire
month to drive a company-wide initiative to raise funds for The Shriner’s Hospitals.
• Overall, it was an unbelievable success!
• Business was great!
• Donations were at an all time high!
• Great job to everyone!
IHOP National
Pancake Day 2010 – The Review!
Four Year History of Shriner’s Donations
IHOP National
Pancake Day 2011
What’s the plan this year?
• Another aggressive 3 ½ week window
• Raise more money again this year by sticking to our plan!
• Again this year, the RSC will be included!
• Promotion begins on Friday, January 31, 2010.
• Culminates with NPD – March 1, 2011
• Christy will be in the lead this year!
• Daily reporting!
• 2011 Goal - $250,000.00!!
• $5.00 per server – per shift!!!
IHOP National
Pancake Day 2011
What are the specific components?
• Wall plaques for donations
Yellow Wall Tags - $1.00 donation
Red Wall Tags - $5.00 donation
$5.00 donation comes with a complimentary $5.00
Bounce Back Card.
$5.00 Bounce Back Card is for use on NEXT visit.
• In-restaurant POP materials
• Christy will supply everyone with specific details in the coming
weeks.
• Remember – it’s for the kids! Let’s do it again this year!
2011
Execute High
Operational StandardsWendell Patterson
Regional Director of Operations
North Region
Execute High
Operational Standards
Provide a Consistently Superior
Guest Experience - Measured by the VOG, Complaint Reductions and A/B Operator Targets
Ensure that Managers are On the Floor Touching Tables & Connecting w/Community
Exceed Food Safety & Sanitation Targets
Execute High
Operational Standards
Provide a Consistently Superior
Guest Experience - Measured by the VOG, Complaint Reductions and A/B Operator Targets
• Milestones
Enhance operational execution to achieve a minimum
80% “Speed” and “Food Quality” Scores thru:
Daily monitoring of table turn times via B-50
Focus on outlier approach with servers in areas of table
turns and VOG scores
Re-train and enhance expo and food running
performances
Re-train and enhance server table service performances
Area Directors to target underperforming restaurants.
Execute High
Operational Standards
Ensure that Managers are On the Floor Touching Tables & Connecting w/Community
• Milestones
Enhance manager’s operational execution of shift
management, guest interaction, and guest connections
by rolling out specific training guidelines including:
Focus on outlier approach using restaurant’s VOG scores
Re-focus on shift management and guest interaction
expectations during MIT training
Re-train shift management expectations to all members of
management
Area Directors to target underperforming restaurants.
Execute High
Operational Standards
Exceed Food Safety & Sanitation Targets
• Milestones
Implement enhanced Green Book.
Area Directors to implement enhanced
Visitation Report
Enhance higher level of accountability in each
restaurant.
2011
Drive People CapabilityLisa Hammond
Senior Director
Human Resources
Drive People Capability
Hire Right – 2010 Year In Review• Management turnover
2009 – Manager turnover was 31%
2010 – Manager turnover was 27%
2011 – goal is 25%
• Team member turnover 2008 TM turnover was 152%
2009 TM turnover was 95%
2010 TM turnover goal is 95% and we finished the year at 86%!!!
Drive People Capability
2010 Retention Awards• First Place
Erin Blackmon - IHOP #3019 10%
• Second Place Jon Knoke – IHOP #1439 23%
• Third Place Jon Dyess – IHOP #1486 36%
• Fourth Place Walter Steele – IHOP #1487 37%
• Area Director Scot Thomas 51%
Drive People Capability
• Most Improved Jeff Holman – IHOP #3003
2009 – 263% to 147% in 2010
Dodd Berendt – IHOP #3017 2009-157% to 63% in 2010
Drive People Capability
Hire Right!
• Through the Implementation of Click and Hire, Enhance the Selection Process, resulting in Best in Class Retention
Train Right!
• Through enhancements to the coaching process, ensure all employees receive timely, productive feedback
Treat Right!
• Through the implementation of the Pour It On! Program, continue building a recognition and retention culture at all levels of the organization.
Drive People Capability
Progression Reports• Team members will be completed in February.
• GM & Managers will be completed in March
Raises will be effective Week 1 of P4.
• Progression report forms
Available for download on the Netchex web site.
Drive People Capability
“Setting a goal is not the main thing. It is deciding
how you will go about achieving it and staying
with that plan.”
Knute Rockne
Mission Statement - 2011
Mission Statement
• This statement is a very brief statement of our
organizational goal. It should be easy to remember
and meaningful to employees and guests alike.
By serving high quality food in a
clean, friendly environment, we
ensure that each guest leaves
knowing “This is MY IHOP”.
Guiding Principles - 2011
Guiding Principles
• These phrases should be concise and limited in
number. It should drive home “what is important to
us and what we stand for”
We create great memories for our guests,
employees, local communities and each
other.
We are committed to recognizing the contributions
of every member of the team.
Individual accountability and execution is the
foundation of our team’s success.
Guiding Principles - 2011
Guiding Principles
• These phrases should be concise and limited in
number. It should drive home “what is important to
us and what we stand for”
We coach to give people the development they
need to achieve their goals.
We conduct ourselves with honesty, integrity, and
the highest business ethics.
We value the diversity of our team, guests and
suppliers; demonstrating respect for the individual.
Operations Awards
Robert Tomlinson
Senior Vice President – Operations
Operations Awards
90-90-90 Club Awards• IHOP #1375 College Station
Shannon Sabur
• IHOP #1396 Austin Leo Gaertner
• IHOP #1404 Garland Janelle Thompson
• IHOP #1421 Austin Masoud Madji
• IHOP #1477 Austin Mary Touchton
Operations Awards
90-90-90 Club Awards• IHOP #1487 Pflugerville
Dave Lucas
• IHOP #1934 El Paso Richard Cannarsa
• IHOP #1954 Gainesville Daren Mills
• IHOP #3000 Slaughter Lane - Austin Chris Montana
• IHOP #3004 Ennis Christina Dodson
Operations Awards
90-90-90 Club Awards• IHOP #3019 Highland Village
Erin Blackmon
• IHOP #3023 Mesquite Julio Dominguez
Operations Awards
Double Digit Awards
• IHOP #1468 Irving Kendell Bolden
11.52%
• IHOP #1337 Amarillo Roger King
23.32%
ACG Texas
Ring of Honor
ACG Texas
Ring of Honor
Ring of Honor Winners
• 2009 – 14
• 2010…………
ACG Texas
Ring of Honor
2010• IHOP #1337 Amarillo
Roger King
• IHOP #1404 Garland
Janelle Thompson
• IHOP #1413 Plano
Farooq Ahmad
• IHOP #1421 Austin
Masoud Madji
• IHOP #1486 Hillsboro
Jonathan Dyess
ACG Texas
Ring of Honor
2010• IHOP #1487 Pflugerville
Dave Lucas
• IHOP #1498 Southlake
Susana Cruz
• IHOP #1499 Main Street - Lewisville
Godwin Uba
• IHOP #3006 Allen
Al Lyell
• IHOP #3011 Terrell
David Robbins
ACG Texas
Ring of Honor
2010• IHOP #3012 El Paso
Hector Diaz
• IHOP #3017 North Frisco
Dodd Berendt
• IHOP #3018 Euless
John Flanagan
• IHOP #3020 El Paso
Ray Caro
ACG Texas
Ring of Honor
2010 – Double Winners!• IHOP #1408 Abrams - Dallas
Ava Hardin
• IHOP #1450 Cedar Hill
Estella Gallegos
• IHOP #1476 Austin
David Henson
• IHOP #3009 Lancaster
Clifton Davis
• IHOP #3024 Bryan
Chuey Cabrera
ACG Texas
Ring of Honor
2010 – Annual 100% Winner!• IHOP #3004 Ennis
Christina Dodson
2011
Choices!Robert Tomlinson
Senior Vice President – Operations
ACG Texas
Who is the Competition?
2011 - Tomlinson Top 7
VOG!
IHOP Nights
E-Club
The HOSPITALITY Gene!
Coaching
Recognition
Accountability
It’s not what happens to you…..
Voice of the Guest
Critical to our growth and is a key piece of
our A/B ranking.
Currently, the IHOP system is at 76%.
We – on the other hand – are at 73%.
Remember, these comments come directly from our
guests – and some are troubling!
Voice of the Guest
Here are the details:
• Overall GLI 73%
• Overall Satisfaction 67.9%
• Likely to Return 79.9%
• Likely Recommend 71.3%
• Accuracy 93.1%
• Greeting 65.9%
• Friendly 77.1%
• Speed 64.6%
• Attentive 70.8%
Voice of the Guest
Here are the details:
• Food Quality 67.9%
• Staff Appearance 75.5%
• Clean 68.2%
• % Alerts 15.7%
• Number of Surveys 1,312
• High YTD – 49
• Low YTD – 4
• What will you choose to do?
IHOP Nights
Outstanding and proven way to drive top
line sales!
Our goal is to have one IHOP Night per restaurant
per week during 2011.
Why has this been a struggle to get off the ground?
• Culture?
• Commitment?
• Proven?
What will you choose to do?
E-Club
Due to your hard work, ACG Texas leads
the IHOP brand.
• IHOP 591,000 (1500 restaurants)
• Southwest Region 151,000
• ACG Texas (4%) 84,304 (14.3%)
E-Club
Six of the Top Ten performers!
The Top Performers!
6. IHOP #3020 2,683 Members #8
5. IHOP #3012 2,795 Members #7
4. IHOP #1413 2,845 Members #6
3. IHOP #3025 3,546 Members #5
2. IHOP #1437 3.998 Members #4
1. IHOP #1487 7,613 Members #1
E-Club
Fish Bowl is a restaurant industry “Best
Demonstrated Practice” and proven way to drive top
line sales!
Why has this been a struggle for some restaurants to
get off the ground?
Two per server – per shift!
New goal of 120,000 Members!
• 100,000 by end of P3!
• 120,000 by end of P6!
What will you choose to do?
The HOSPITALITY Gene!
What are our guests saying?
What about your team?
Do you have the gene?
How do we identify it? (Hire Right)
How do we train it? (Train Right)
How do we nurture its growth? (Treat Right)
The BAD examples!
How do we change our culture?
What will you choose to do?
Coaching!
It’s not a form!
It’s not a checklist!
It is about connection!
It is about commitment!
It’s time for us to get this right!
Honest and open feedback is an opportunity!
Here is another BAD example!
What will you choose to do?
Recognition!
Review our commitment in 2010.
How far have we come?
Where are our opportunities?
We need your help!
Recognition is something we are – not something we
do!
What will you choose to do?
Accountability!
Is our society is all about blame?
How hard is it?
What are the benefits?
We need to move forward!
What will you choose to do?
2011 - Tomlinson Top 7
VOG!
IHOP Nights
E-Club
The HOSPITALITY Gene!
Coaching
Recognition
Accountability
Choices!
Today, we begin our new
journey in 2011………TOGETHER!
We must change who we are!
• If it’s going to be – it’s up to me!
Commitment vs. Compliance!
Go back and make an impact!
• Be the “Ambassador of Change”!
• Make a difference!
• Take care of the guests – and each other!
Choices!
Who’s With Me?
2011
Quarterly VOG IncentivesRobert Tomlinson
Senior Vice President - Operations
Quarterly VOG Incentive
2011 Quarterly Sales Incentive
• Drive For Five!
This is the key to success!
• The only criteria is the GLI score!!
• Highest GLI scores during each quarter
First Place – GM earns $1,000.00
Second Place – GM earns $500.00
Third Place – GM earns $250.00
Most Improved – GM earns $250.00
One North and One South!
• All restaurants participate.
Quarterly VOG Incentive
2011 Quarterly Sales Incentive
• Drive For Five!
• Areas
Highest server GLI score in each AD area = $100.00!
One server per Area Director per period.
• Restaurants
Highest server GLI score in each restaurant = $25.00
One server per restaurant per period.
Servers must have a minimum of 5 surveys to participate.