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Sonic hits on a program to boost margins

Sonic Drive-In has developed a program to help franchisees realize the full cost-cutting potential of their POS and back-office system, an initiative that now has a waiting list of operators looking to take part, say executives of the quick-service chain.

“Instead of being a high-priced cash register, we’re able to use the POS system as the management tool we paid a lot of money to get,” says Jerry Fogel, one of Sonic’s Margin Improvement Managers, the squad that’s administering the program.

The operators of about 1,000 franchised Sonics have already participated in the program, which usually lasts for two days. On Day One, a franchisee’s personnel meet with Fogel or his colleagues in a classroom setting for an exchange of information. The operator shares detailed information about his stores’ operations, and the MIMs provide a download of best practices for using their POS system to manage the costs.

“We want to make it very quick and easy—‘Let’s look at these five or seven reports. It’ll take 10 or 15 minutes,’” says Fogel.

On the second day, the MIMs go into the stores to shadow a GM and identify ways of better monitoring and managing cost factors like inventory control.

“The operators, they know how to ring up the orders and get the food out the door. But they don’t know how to maximize the POS system,” says Fogel.

Joe Moore Group, a 29-unit franchisee, was able to trim its food and paper costs about a half a percentage point by employing what it learned from Fogel, said Chris Coffin, who oversees 22 of the stores.

“Starting out, it was definitely a little bit of a task, but I wouldn’t say it was hard by any means,” he says. “That’s what Jerry taught us: ‘Is there 15 minutes in your day where you’re interested in making more money?’”

The staffs of Moore Group’s restaurants needed a month or two to incorporate the practices taught by Fogel into their normal routines, says Coffin, “but it was worth it. I can’t say enough good things about the program.”

The stated purpose of the MIM program is helping franchisees realize the full margin benefits of technology investments. Toward that end, the program will likely expand in scope as more capabilities are added to the POS system, says Fogel.

For instance, Sonic has just added labor-scheduling and food-cost control functions, he says.

Fogel started with Sonic as a cook 22 years ago, and has risen through a variety of hands-on operational posts. Sonic’s other three MIMs similarly have deep operational experience, a key to winning franchisees’ trust and buy-in, he says.

The program is offered as a free option to franchisees, not a mandatory training component. Fogel says his calendar for much of the summer is already booked with training appointments.

“It’s gone viral,” he says.

About 3,500 Sonics are currently in operation. Most are franchised.

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