Success Story

Skyline Chili Franchise Credits Reduction in Food Cost to Inventory Control Improvements

Mark-Bil Company Owner Mark Keilhoz, Operator of a Skyline Chili franchise, knows that restaurant operations require supervision and constant scrutiny. He found a variety of tools on RestaurantOwner.com that, along with many other benefits, help him keep track of the small details that make a big difference to his bottom line.

Exactitude isn't a word restaurateurs use a lot. Except the successful ones.

A system like that requires supervision, however, and lots of it, he adds. "Unless somebody was watching the employee, especially a new person who's not real familiar with things, there was really no control."

Not good.

By using some of the inventory procedures he picked up from RestaurantOwner.com, Keilholz says, he and his staff were able to narrow usage down to specific days and times, allowing him to "go back and say, 'Hey look guys, we need to kind of watch it a little bit.' Those little things like that make a big, big, big difference." The cheese and chili products he is buying are proprietary items, he adds, "so we have no control over what that price is going to be other than what the co-op guy can negotiate."

A 30-year industry veteran, Keilholz's restaurant seats 116 and features an average per-person check of $8 to $10. The menu includes Coneys, chili, salads, wraps, burritos, steamed potatoes and more. His largest daypart is lunch, from 11 a.m. to 2 p.m., which accounts for approximately 45% of sales. Total annual sales top $1 million.

Thus far, Keilholz has shaved food costs by 1.2%. "We had to take a physical inventory to determine how much of the key products, especially the cheese and the chili, we had on hand. The chili is a beef base, so you know as well as I do that beef has gone through the roof, to say nothing of dairy." Inventory management was good, he adds, "but it can always be better. So those two items in and of themselves, just monitoring them more closely, has really provided the bulk of the savings."

While some of this knowledge is "probably" available from the franchisor, he says, "it's not something that they really push to their franchises. Nor is this kind of expertise something he has been able to pick up from his fellow franchisees. "We are kind of a stay-at-home breed. We do have a three-day convention once a year where we hook up, but most of the time we're just so busy trying to keep our stores going that there is not a lot of sharing - 'Hey, this worked for me.'" Thus, the knowledge he gained from visiting RestaurantOwner.com has proven invaluable, and paid major dividends.

Another benefit of the knowledge he has gained from RestaurantOwner.com has been markedly improved communication among his 30 staffers -- upper management, shift management and hourly employees. "RO is not just about food cost. It's opened the door to better communication all together. Everybody is on the same page."

The bottom line is, well, the bottom line.

"Everybody is interested in saving money, especially in today's economy," Keilholz says. "I would say that would be the biggest plus right there. I don't think people realize how many tools are there for the taking. For a newby, or somebody who's just getting into (the restaurant business), these tools would probably be invaluable."