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Insider Theft Can Have a Major Effect on Bar Profits

September 29, 2011 19:10 by administrator
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By Elizabeth Godsmark
Atlantic Publishing
 

This is an alarming fact: most types of beverage operations lose a crippling percentage of profits through insider theft. The vast majority of employees in the beverage industry are honest and hardworking; it is the small minority of staff that can ruin your business through dishonesty. Insider theft can often escalate if there are weaknesses in the following general areas of the operation:

  • Lack of supervision. Theft from behind the bar, storeroom or storage areas is a major problem. Curb losses by increasing supervision, either in person or by means of strategically positioned security cameras.
  • Proprietor attitude. Don't make matters worse by treating all employees with suspicion. Get the honest staff on your side.
  • Weak management. Unfortunately, some beverage managers compound the issue of insider theft by turning a "blind eye" and simply increasing prices to cover "shrinkage." Owners need to question unwarranted price rises.
  • Pouring costs A common danger area. These costs need to be carefully monitored, especially in relation to bartender productivity.
  • Inventory records. This is one of the easiest areas for dishonest employees to "fiddle the books." Tighten up your record keeping. Never leave inventory control to one person. Double-check.
  • End-of-shift cash count. Another prime target area for insider theft. Never let a bartender reconcile the cash in the register at the end of his or her shift.

 

Bartender Theft: Top Ten Ploys

Controlling theft behind the majority of bars is no mean task; eliminating it altogether is virtually impossible. Temptation is a fine thing, and unfortunate­ly, the opportunity for bartender theft is overwhelming. However, in the interests of long-term survival, you have no choice but to tackle the problem head on. Be wary of the following top-ten common ploys:

  • Open theft. A bartender pours a drink, doesn't ring the cash register and puts the cash in a "holding" place, such as the tip jar.
  • Overcharging. Bartender pockets the difference. A variation is to charge regular prices but ring up "Happy Hour" prices and, again, pocket the difference.
  • Ringing "00" on the cash register. The bartender simply steals the value of the drink.
  • Overpouring. Bartender hopes to get a heavy tip.
  • Underpouring. Bartender keeps a mental note of the number of half measures poured throughout the evening and then thieves the equivalent value in drinks, gives them away or drinks them him-or herself.
  • Rounds of drinks. Bartender rings up for a "round" rather than separate items. It makes it easier to inflate the overall price of a round of drinks, particularly if guests are unfamiliar with individual prices.
  • Shortchanging. Common variations include: counting aloud while handing the customer less money, distracting the customer by sliding the change along the bar, and giving change for lower -denomination bills (while keeping the difference).
  • "Soft" inventory. Bartender neglects to charge for the mixer component of a drink.
  • Substitution - bringing in own liquor. This is often done with vodka because it is odorless and looks like water. Dilution is another similar ploy.
  • Padding the tab. The bartender pencils in an inflated total and later erases it, replacing it with the correct total. Warning! Ban pencils from behind the bar.

 

Less Common (But Equally Damaging) Employee Theft

The more experienced the dishonest employee, the better equipped he or she is to manipulate the system. Thieving members of staff are quick to detect exactly how much an owner really understands about the business. In the beverage industry, take nothing for granted. Alert yourself to the following, somewhat extreme, possibilities.

  • Reusing closed tabs. The bartender appears to ring up the drink price but, in actual fact, only halfway enters the tab into the register. He or she then hits "0" to give the impression of ringing it in.
  • Over-ringing. When the customer isn't looking, the thief over-rings an amount on the tab and then re-rings the tab for less than the amount charged.
  • "Paid outs." The bartender claims that the money was refunded for various reasons, such as faulty cigarette machines.
  • Jigger substitution. The bartender brings in his own shot glass that looks identical to the official jigger but is actually smaller. Several short measures over a shift add up
  • Changing shifts. It is easy for the thief to make, serve and collect several drinks during a busy "hand-over" period.
  • Deliberate mistakes. Drinks are then returned and resold or given to a friend.
  • Breaking empty bottles and pretending they were full. Full bottles are then requisitioned to replace the "broken" empty bottles.

Substituting water in the drip tray. The bartender pretends he or she had to waste a pint to clear the lines and then pockets the difference.

 

This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company
Amazon.com

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2011


BARTENDER THEFT: A longtime worker financially crippled the owners through her many thefts.

August 13, 2011 17:49 by administrator


BARTENDER THEFT:

Crescent ‘No Lawyers’ Bar & Grill embezzler Kristi L. Hurles gets 14 years

A longtime worker financially crippled the owners of the Crescent through her many thefts.

  • BY KATY MOELLER 

A longtime Boise business owner wept in Fourth District Court Thursday morning as she told a judge about the damage inflicted by a former employee who prosecutors say embezzled more than $155,440.

“She did about the worst thing that someone could do to another human being,” Crescent “No Lawyers” Bar & Grill owner Jody Morrison told Judge Darla Williamson. “She took our trust and feelings for her, and she took the ultimate advantage.”

“She stole more than money,” Morrison said. “She stole our hearts as well.”

Kristi L. Hurles, 45, pleaded guilty to one count of grand theft. She was sentenced to 14 years in prison and must serve at least two years before she’s eligible for parole. She received credit for 85 days served.

Williamson said Hurles also must pay full restitution of $204,174.61, including attorney’s fees of $48,734.61.

Hurles had worked at Jody and Butch Morrison’s bar and grill for more than 20 years off and on, doing bartending, serving and some bookkeeping.

Her last year as an employee was in 2009, and she was charged with two felony grand theft counts last fall. As part of a plea deal, one count was dropped.

Prosecutors say Hurles —known to bar patrons as “Cookie” — stole money by taking business checks intended for business accounts and cashing them.

Ada County Deputy Prosecutor Shawna Dunn said the Morrisons gave Hurles bonuses and a retirement account, while the highly trusted employee stole from them over and over again.

Dunn said in court that Hurles had filed bankruptcy three times and had refused to bring her lifestyle in line with her income. The Statesman was able to confirm only one filing, in 2010.

Hurles, dressed in a purple jail jumpsuit, expressed remorse in court.

“I totally apologize for everything I did to the Morrisons. They were a good family,” Hurles said. “It was a hard time. And, no, I did not take money for the whole 25 years, like you guys are saying I did.”

“I took about 14 months,” she said. The crimes that she was prosecuted for occurred between 2005 and 2010.

Hurles tried to speak directly to the Morrisons in court, but they looked away.

“Please look at me, I’m telling the truth,” she implored the couple.

Hurles’ attorney Charles Crafts pleaded for leniency, arguing that his client had no prior criminal record, has strong family and community support and wants to re-pay the money she stole.

In handing down the sentence, Williamson said Hurles had essentially established a criminal record when she stole repeatedly from her employers.

The judge said the substantial amount of money that Hurles stole affected not only the Morrisons — who drained a retirement account, tapped their savings and ran up credit card debt to keep their business open — but the 30 employees whose jobs were jeopardized, or who didn’t get raises or other compensation.

“Your honor, I didn’t steal a large amount of money,” Hurles said, interrupting the judge.

Williamson told Hurles that she made hard economic times even harder for those around her.

“I think that punishment is important in this case,” Williamson said. “It’s got to send a message to other employees.”

Hurles has 42 days to appeal.

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2011


Defense Attorneys Win Dram Shop Case

June 30, 2011 19:52 by administrator

Defense Attorneys win dram shop case because their client had proper safe guards in place and a good system of care for alcohol service. This verdict specifically exemplifies the need for good alcohol servicng policies and procedures. If they DID'T have this in place, then they most likely would have suffered $5,000,000.00 in damages (see red below).

DRAM SHOP NON-AWARD:

Hartline Dacus Attorneys Win Defense Verdict for Adult Entertainment Company

This jury trial ended in victory for the Defendant after attorneys of the firm successfully defended a publicly traded adult entertainment establishment in a case involving an automobile-pedestrian accident that resulted in the death of a 43 year-old man.

Dallas, TX (PRWEB) June 30, 2011

Hartline Dacus Barger Dreyer LLP today announced a jury trial victory after attorneys Darrell Barger, Brian Rawson and Stephanie Roark successfully defended their client in a two week Dram Shop liability trial in Harris County, Texas. The client is a publicly traded adult entertainment establishment with nightclubs in major markets across the U.S. According to court documents, the case involved an automobile-pedestrian accident that resulted in the death of a 43 year-old man in 2007. The driver of the vehicle was an adult entertainer, who was driving home from work at the defendant’s nightclub when the accident occurred. She had a blood-alcohol level almost four times the legal limit, and eventually pled guilty to felony intoxication manslaughter. Relatives of the victim filed suit against the nightclub, alleging the defendant was negligent in continuing to serve alcohol to an obviously intoxicated person, and then allowing her to drive home from the defendant’s establishment.

“While we certainly feel a great deal of sympathy for the family of the victim in this tragic accident, we were confident that our client had not been negligent in this situation. We knew we needed to mount a strong defense to prove that the company played no part in the criminal actions of this independent contractor,” said Darrell Barger, a partner in the Corpus Christi office of Hartline Dacus Barger Dreyer LLP.  The jury heard testimony from a variety of expert witnesses and was presented with a reconstruction of the accident. The plaintiff’s counsel claimed the victim experienced unimaginable conscious pain and suffering when he was struck by the entertainer’s vehicle and asked the jury to award $5 million plus punitive damages to the family of the victim.

Defense counsel argued that their client had safeguards in place to prevent serving alcohol to someone obviously intoxicated, as well as to prevent their patrons from driving under the influence of alcohol. The defense also brought in expert witness to establish that alcohol played no role in the accident. After hearing testimony from both sides, the Harris County jury of seven men and five women deliberated and returned a verdict for the defense on June 15, 2011.

SOURCE: Hartline Dacus Barger Dreyer LLP

Cause Number: 2009-07180
Court: 334th Judicial District Court, Harris County, Texas


10 Tips to Curb Employee Theft

March 1, 2011 16:58 by administrator

Sunday, February 27 2011

The Restaurant Blog

By John Foley

Fraud, missing cash, disappearing draft beer, and voided Vodka sales are all signs you may have a few unprofessional employees.

One perplexing observation: You can't assume your most professional employees are necessarily the most honest. True career professionals are honest. But there are also employees who seem professional but only have their own best interests in mind.

Any time you mix cash, booze, and food and leave the items unsupervised or unlocked you are going to have some degree of problems. If you add opposite sexes into the mix -- with even the slightest attraction towards each other -- it is the perfect formula for a party. It's just human nature. Owners need to accept the responsibility to address the problem.

Here are ten tips to help curb employee theft and fraud.

1). Announce your position on theft early on. During the first employee interview make sure you let potential employees know that you have a section in your employee manual dealing with theft. They need to read it and initial it. Simply stated – you prosecute. Now, do you send someone to the crowbar hotel for eating a steak? Probably not. But if they just happen to take a whole rib-eye out in the nightly bag of garbage and return later to pick it out of the dumpster, bye-bye.

2). Credit card fraud in any amount is considered a felony, and you will immediately call the police. Today, nothing is worse than being intentionally double-charged for a meal on a credit card. It revokes the trust the customer had with the restaurant and the employees.

3). Inventory is the road to financial success. Lock your liquor room. Take complete product inventory weekly. Keep a perishable list and have someone inspect the product before it is tossed and listed.

4). Your staff is not part of your family. I know this hurts, but it is true. You cannot be "one big happy family" and expect to succeed. Become a team -- winning teams work together. Families can be completely dysfunctional, and they are still a family. Families share everything in the refrigerator, the liquor cabinet, and the spare change.

Say it…"T E A M."

5). Only the house buys drinks. If you ever hear a bartender say, "This one's on me," fire them. They are working for themselves. You bought the booze wholesale; you deserve credit for the complimentary cocktail.

6). The staff meal. Everyone needs to eat.. The staff meal consists of whatever the chef wants to make within your guidelines. Set a time the staff can come early or stay late. And everyone eats the same meal -- no exceptions.

7). Do not under any circumstances allow your staff to drink at the bar after work. It seldom ends in one drink, and eventually it will cost you a lot of money, a server or two, and possibly your liquor license. Feeling gracious? Give them the money for a drink next door.

8). Have a secret shopping customer. Make sure it's a regular and someone you can trust. Have them come in on occasion to eat, drink, and spy. Pick up the tab. It will be worth it.

9). Short of silverware? Is all that being thrown away? Inventory it – quarterly.

10). It's The Art of War. Read it. If you find someone stealing, termination is a must. Bring up the incident, not the person, at your next pre-shift meeting. State your theft policy again. Drive the point of prosecution home.

BARTENDER THEFT:

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010

 


Mixing dining, dancing pays off for restaurants

February 6, 2011 18:08 by administrator

Valley eateries profit from adding nightlife

At 7:30 p.m. on a Friday, the dining room at Canteen Modern Tequila Bar on Tempe's Mill Avenue is packed with groups of stylish young people. Servers hustle out Latin fare, and indie rock plays in the background.

At 11 p.m., the dining room is still packed, but with gyrating couples. Sexy scruffy bartenders rapidly fire off tequila shots and a DJ plays Top 40 dance tunes, from Cee Lo Green's "Forget You" to "Raise Your Glass" by Pink.

In increasing numbers, this is the newest face of Valley nightlife, with a small-but-growing percentage of restaurants converting into dance clubs. As the effects of the recession linger, restaurateurs are working harder than ever to get the most profit out of their buildings.

"A lot of this is mandated by a poor economy," said James Spiers, senior lecturer of marketing at Arizona State University's W.P. Carey School of Business. "Restaurants that were cruising along all of a sudden now had to think, and be creative. 'How can I survive? What else can I do?' So they tried to utilize the time they wouldn't be open and offer something specialized, whether it's dance nights or cooking classes."

At Canteen, it's working.

"We had planned to have DJs on Thursdays, Fridays and Saturdays from the get-go, but we didn't expect it to catch on as quickly as it has," owner Julian Wright said.

Wright said his profits have doubled since opening, and nightlife sales are growing more quickly than dinner.

"We need to transition gently," Wright said. "We slowly start turning the music up in the bar areas from 9:45 to 10:45, and keep it down in the dining room. By 10:45, we put the pedal to the metal."

The idea of restaurants transitioning into dance spots has been around as long as owners have paid rent or mortgages. But owners are getting much more strategic.

Many Latin and Mediterranean restaurants, such as Pepin in Scottsdale and the Olive Branch in Tempe, host salsa nights. Lessons start after dinner, followed by DJ'd salsa dancing until 2 a.m.

The dance night must match the restaurant's concept, and must be marketed as an extension of the brand, said Donna Hood Crecca, publisher and editorial director at Nightclub & Bar.

"You can't just throw up a dance floor, bring in a DJ and expect the guests to flow in the front door," Hood Crecca said.

In Phoenix, Heinrich Stasiuk started throwing late-night dance parties at his restaurant, Black Forest Mill, in 2009. The DJ-driven parties were runaway successes that made up in liquor sales what Stasiuk was missing in slumping food sales.

When he opened the Brick Pizzeria & Wine Bar in downtown Phoenix in 2010, Stasiuk brought along the concept. Brick has a lounge feel even during lunch, so staff just move tables and switch on mood-setting blue lights to create the Cheap Thrills atmosphere. The party routinely packs the restaurant.

"The night has exceeded my expectations," Stasiuk said. "With the amount of volume we do in liquor sales, it's like adding another day."

 

Stasiuk then launched a jazz night at his Sedona restaurant, Ken's Creekside American Bistro.

As general manager at the District American Kitchen and Wine Bar at the Sheraton Phoenix Downtown Hotel, Stasiuk introduced Valley DJs on Friday nights; the party is still strong.

"Any restaurant can do it," Stasiuk said. "They just have to do it right."

But it takes a lot to lure dancers into a spot used for dining.

In 2008, Lyte Lounge & Bistro in Old Town Scottsdale served sophisticated dishes from celebrated chef Justin Chacon by day, and by night became a beat-bumping club with bottle service. It closed after a year.

"I really believed in the idea and thought it had a decent following," Chacon said. "But maybe it was too far out. . . . And then the economy just ran it down."

Even now, managers struggle.

Primebar at Scottsdale Quarter hosts bands and DJs every weekend on the dining room's oversize stage.

"When we first started, we had a few bands that did detriment to our business," said bar manager Sean Snelling. "So we try to change it up on Fridays, and have a contract with EastonAshe on Saturdays, who are one of the more popular cover bands in town."

The concept can be pricey and time-consuming, but worth it financially.

At Tuscan Oven in Glendale's Westgate City Center, general manager Cody Lewien not only hires DJs on Friday and Saturday nights, but hosts a ladies night on Wednesdays, salsa dancing on Thursday and an industry night on Sundays. To make the transition, candles are lit and staff members change into dressier ensembles - corsets for waitresses, suits for doormen.

Now the late nights account for 40 to 50 percent of the restaurant's profits.

"In the environment we are in financially, we have to do a lot of different things to diversify, and to maintain and keep guests coming in," Lewien said.

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811


Bar Spotters - All Bartenders Steal

November 3, 2010 01:01 by administrator

Kristine G. Bottone - LA Bartender Examiner

November 3rd, 2009

I’ve stated this before, all bartenders steal. The theft could range anywhere from having an extra shift drink, heavy pouring, giving away more than the allotted amount of comps to get bigger tips or pilfering glassware, napkins, toilet paper or other bar supplies. Bar owners are well aware of this and accept it as one of the hazards of the bar business. But when the bar begins to lose profits, it’s gone too far.

The idea is to prevent in house theft before it starts. Surveillance cameras in bars is a growing trend and is a good way to cut back on theft but not always as effective as a bar owner might hope. The view of the cameras, depending on their location, can be limited and will only tell part of the story. If you’re an honest worker then it won’t matter where the cameras are. But bartenders looking to steal will find a way to avoid detection. This is when bar owners use another theft detection method called Spotters.

Spotters are essentially secret shoppers who come into the bar to spy on employees, mostly bartenders. They’ll sit at the bar and observe, watching the bartender for signs of theft or misconduct. Most reputable Spotter services employee former bartenders who are quick to pick up on scams that would go unnoticed by a regular customer. Spotters are often equipped with hidden cameras and record every exchange of a bartender suspected of stealing. At the end of their visit they’ll review the video and present their findings to the owner. Depending on what the tapes reveal the bartender could wind up with a warning or immediate termination. In some cases where the bartender has been caught stealing money outright charges have been pressed and the evidential tapes held up in court.

Some bar owners choose a Spotter service because the company boasts that they employ retired cops. While that may look good on paper, 9 times out of 10 they have no idea what they’re looking for. They’ll hone in on “suspicious behavior” but a lot of things a bartender does behind the bar can be misconstrued or deemed suspicious. Cash over rings are a perfect example. Instead of complicating the matter further by trying to find a manager to void it; bartenders usually make up the difference over the next couple of cash sales. The money goes into the register but they don’t ring it up until they make up the difference. This can easily be misinterpreted as ‘padding’ the register.

Bar owners have also been known to send friends and family into their establishment to spy on employees. They’ll offer them free food and drink in return they report what they see. Again, this leads to the issue of the Spotters not knowing what they’re looking for or at for that matter. Sometimes friends and family Spotters feel compelled to embellish the truth of something negative in order to justify what they ate and drank on the owner’s dime. True story: I was working full time at a bar, going to school full time and interning at a radio station. One night behind the bar my energy level wasn’t what it normally was and a customer asked if I was OK. I said I was fine, just a little tired and left it at that. The customer later asked why I was tired. I simply told him work, school, an internship and not enough nearly caffeine. That was that, or so I thought. The next day I got a call from the owner telling me that a Spotter, a friend of his, reported that I complained to him that I was tired. I was able to recall the entire exchange perfectly, pointing out that the Spotter failed to mention that he asked what was wrong and why I was tired, other wise I never would have mentioned it. He also failed to mention that he spent the majority of the night hitting on women and buying them drinks. It was never brought up again nor did I ever see the face of that Spotter in the bar after that night.

For the most part bartenders are hard working and straightforward people. It’s only a handful of dishonest self serving bartenders that give the rest a bad name. In all my years of bartending I have found that if the bar is making money and the bartender isn’t then the bartender needs to reevaluate their work ethic. If the bartender is making money and the bar isn’t, it’s safe to assume the bartender is stealing. Slow nights aside, if the bartender is doing their job well then the bartender and the bar both make money.

BARTENDER THEFT:

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010


Bars and Restaurants Using Spotters to Increase Profits

November 3, 2010 00:48 by administrator

By Gregory Scott McGuire

A bar spotter, or "nightclub secret shopper," is a person sent into a bar by the owner or manager to conduct a secret quality control review of bar staff.  Spotters carefully observe bartenders and other employees, watching for telltale signs of theft and misconduct.  Most spotters were once bartenders themselves, and understand the industry and how it works.  Many companies across the U.S. have sprung up in recent years to meet the rising demand of restaurants and bars for spotters.

The worst thing a bartender can do is give away drinks for free by never ringing up the sale or just pocketing the cash.  Only about 10% of bartenders are caught stealing, however.  Most bar owners get a lot more value out of the other things a bar spotter watches for during their visit, like generous pours on drinks, failing to up sell customers on top shelf brands, and long wait times.

In general, bartenders are making a lot less than they used to from tips as patrons dial back on bar visits.  This has led many of them to try to earn tips in creative ways, like giving customers an extra long pour.  The drink rings up the same for the owner, however, and that costs the bar money.  And if bartenders simply push out well drinks whenever someone orders a rum and coke instead of asking the customer what kind of rum they would like, that's costing bars money too.

For bar owners, revenue is down as well.  Many have found that the solution, counterintuitive as it may be, is to spend money on a bar spotter to identify places where thin profits are leaking out.  Hiring a bar spotter isn't cheap, often running into the hundreds of dollars per visit, but the invaluable information you can gain from having an anonymous person observe your bar staff has proven to be more than worth the cost.

Finding a bar spotting company is relatively easy.  Just type "bar spotter" into a Google search and you'll find several companies that offer services across the country.

Article Source: http://EzineArticles.com/?expert=Gregory_Scott_McGuire

BARTENDER THEFT:

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010


Waiter, Bring Me a Fresh Idea

October 2, 2010 18:57 by administrator

I thought this was a rather good read. Especially the last paragraph about takign the time to properly train you staff. -Michael

Waiter, Bring Me a Fresh Idea

10 strategies that are working in the tough restaurant economy

By Jason Daley   |   Entrepreneur Magazine

It was about 20 years ago that the casual dining boom got started in the United States. It was a golden, batter-dipped age: We were lured in by the novelty of mozzarella sticks and artichoke dip, marveled at the cluttered walls and uniform flair and gulped down two-liter mango margaritas like every night was Friday.

But the bloom is off the bloomin' onion when it comes to casual dining. The recession has customers trading down to fast food and the growing "fast-casual" segment of takeout specialists (think Chipotle, Noodles or Panera). Over the last couple decades, while drive-thru burger joints have kept their prices flat, the typical bill at casual dining chains has multiplied three or four times. And the quality of the food has remained pretty much the same while fast food has become better and more diverse. Add to that grumbles about predictable, high-fat menus and stale décor and it's understandable why in 2009 the category was down 5 percent to 8 percent with a 3 percent to 5 percent drop forecast for 2010.

But some chains are figuring out ways to keep customers coming through their doors. Red Lobster, for one, has designed a quick-turnaround lunch service designed to draw the time-strapped crowd, and its new wood-fired entrees are appealing to the health-conscious. Ruby Tuesday redesigned its menu, retrained staff, modernized its décor--and brought in almost 2 percent more customers in late 2009 than in late 2008.

There are plenty of steps to take in a down market, and it's important to remember that even individual franchisees are not powerless. We spoke with some of the leading thinkers in the casual dining field to find out what you can do to put a little flair back into your business.

  1. Think locally
    Casual dining chains are some of the most aggressive national advertisers out there. (Remember the "I want my baby back" jingle?) The problem is, plenty of franchisees think that's enough, especially after a splashy grand opening with big media buys. "Local franchisees are advised to put 1 to 5 percent of their money into local advertising by their franchisors, but they think the national TV commercials are enough to drive customers," says James Sinclair of OnSite Consulting, a Los Angeles firm that helps rescue flailing restaurants. "We often suggest local marketing like sponsoring soccer teams, participating in fundraisers, things like that. There's no better advertising than getting buzz in the community." Casual dining mom-and-pops haven't been hurt as much by the recession, mainly because people feel a strong connection to the businesses. Becoming a local leader and integral part of the community, versus a faceless chain, can go a long way to developing customer loyalty.
  2. Speed up lunch
    Lunch is when the fast-food joints and casual restaurants go head to head--and where casual dining loses out. "Business users want to get in and out quickly, and most don't have a full hour for lunch," says Darren Tristano, executive vice president of Technomic, a Chicago-based food-industry consulting and research firm. Shaving 10 to 15 minutes off a visit can mean the difference between drawing a lunch crowd or sitting idle for the afternoon. Cracker Barrel and Chili's have invested in system-wide redesigns of their kitchens and service procedures to help cut big chunks off their service time, but franchisees can help keep things moving by investing in more lunchtime staff, making sure servers are trained and efficient and streamlining the lunch menu to keep the kitchen on track. Tristano also suggests keeping prices competitive. Having lunch entrees in the $5-to-$8 range makes it less likely that budget customers will shift to the burger shack if times get tougher.
  3. Push the bottle
    Booze is always a high-margin item for casual restaurants, but more importantly it's a gateway to gaining customers for dinner. According to Technomic's research, only 14 percent of customers find occasion to drink in the afternoon, which is why national chains have started placing a new emphasis on earlier happy hours. Ruby Tuesday recently revamped its bar lineup, retrained its bartenders and introduced $5 signature premium drinks. T.G.I. Friday's offered free appetizers at the bar last year in an attempt to draw people in during the dead afternoon hours. Starting drink specials at 2 or 3 p.m. is a great way to attract shift workers, business people scheduling casual meetings or retirees looking for afternoon deals. "You have to remember," says Jeff Davis, president of Sandelman & Associates, a food-service research firm in Irving, Texas, "when times are tough alcohol is the one thing people don't cut back on."
  4. Push the plate
    Besides offering an extended happy hour on booze, create a happy hour on menu items, suggests Tristano, who points out that Steak 'n Shake's afternoon half-price milkshake promotion can easily lead to an order of burger and fries, and Braxton Seafood Grill's happy hour, when it sells lobsters at cost, often gets orders for a few beers and all the fixings. One innovative strategy to woo the late-afternoon crowd is offering items at ascending prices--$3 appetizers at 3 p.m., $4 at 4 p.m. and so on. "The only way to maximize opportunities is to trade up," Davis says. "The main goal when you get someone through the door is to trade up."
  5. Focus on the quality
    "If you're at a Mexican restaurant, people are going to notice if you're scraping broken tortilla chips from the bottom of the barrel and not filling their glasses to the top," Tristano says. Many chains also make the mistake of charging for soft drink refills or reducing the number of servers to save money. This sends a clear message to the customer that you're struggling. If it is necessary to reduce costs, he suggests making cuts across the board instead of pulling savings in the areas of servers and food costs. Instead of switching from a good cheddar to a block of "cheese product," try to renegotiate prices with vendors. "Be careful to negotiate pricing and to take cost savings out of other areas," he says, "not from areas where customers will feel it most."
  6. Don't chase Subway

One of the big temptations in casual dining is to simply slash prices until hordes of $5 deal-seekers start filling the tables. But Sinclair says that's exactly the wrong tactic. "All that does is draw in deal hunters, and when the promotion is over, they won't return," he says. "You can't focus on the short term. You have to be focused on what is going to make the customer return. If you're going to discount, rebuild the menu so the price of the dish doesn't lose you money." The same thing goes for cutting portions. For the most part, consumers see smaller portions as a loss of value--and the savings to the restaurant are small. In the end, Sinclair says, "you're not saving money per dish, you're losing customer satisfaction." Some portion-cutting campaigns have been successful: T.G.I. Friday's Right Portion, Right Price campaign hit a sweet spot and The Cheesecake Factory scored when it brought its lunch portions down to human scale. But the strategy was about "right-sizing" ridiculous portions. "Some places serve way too much," Davis says. "Why pay $15 for a salad that I can only eat a third of?"

  1. Give them something special
    It might seem obvious: People go to a specific restaurant to get food they can't get anywhere else. But that idea has become murky in casual dining, where fried appetizers and flatiron steaks have all melded into culinary clichs. Tristano says there are two ways to give your menu an edge: Offer items that are a healthful alternative for those looking to adopt a "better-for-you lifestyle" or dishes that most diners can't cook at home. "Quality Mexican entrees are difficult for people to make at home, or Asian appetizers like pot stickers. For crme brle you need to have that little flamethrower," he says. "People are drawn to items that require culinary expertise or ingredients that are difficult to purchase."
  2. Reward loyalty
    The best way to earn loyalty--and repeat visits--is to provide quality food and service. But Americans are suckers for deals, and loyalty programs are one of the things that keep diners coming back to their favorite booth. Sinclair suggests implementing programs that don't necessarily hand out freebies but still provide something meaningful to diners. Rewards can include priority seating, discounts or rebates on gift cards or--one of Sinclair's favorites--the chance to sign up and win prize money. "The idea," he says, "is to get customers involved in the brand and get them to feel a natural partnership with you."
  3. Get it out the door
    Fast-casual establishments are striking a chord with Americans--the food is better than a drive-thru burger joint, but it doesn't require an hour of time and a 20-percent tip. Full-service casual restaurants, however, can easily mimic fast casual. System-wide, Denny's and IHOP are experimenting with fast-casual annexes attached to their restaurants, and Buffalo Wild Wings, which has dedicated takeout ordering stations, is successfully bridging the fast- and full-service divide. Tristano says providing alternatives to sit-down dining--whether call-ahead, drive-thrus or catering--is a great way to create new revenue streams. "The more you drive off-premises growth, the greater opportunity you'll have to weather the economic storm," he says. "You have to understand what the customer wants and adapt to this environment and this economy."
  4. Take time to train
    In the constant rush of the restaurant business, sometimes it's hard to stop and take a good hard look at the big picture. "We don't always have time to train employees or go through a full menu evaluation," Davis says. "Maybe, with the recession, we have that time now." Don't be scared off by the extra investment involved in training--when restaurants are fighting tooth and nail to earn repeat customers, exceptional service is a huge factor in their deciding where to go, and good training often leads to less staff turnover. "It will cost money," he says, "but in the longer term, people who continue to invest in their businesses will succeed. Excellence always wins, top to bottom."

 

BARTENDER THEFT:

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010


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Tilted Kilt Pub & Eatery really understands how to utilize Eye Spy Spotter Reports

September 3, 2010 16:37 by administrator

By Michael Zenner

The Tilted Kilt Pub & Eatery is a fantastically successful concept and one of our best Eye Spy Spotter clients. They are growing by leaps and bounds, and all in a down economy; that really says something.

In my opinion, the Tilted Kilt’s success and wonderful growth pattern can be contributed to one single word – QUALITY. The Tilted Kilt designs their concept with a series of checks and balances to ensure that their vision of “quality” is always executed according to their franchise theme.

If you go to McDonald’s and order a Big Mac, whether in San Diego or Boston, you expect to get the exact same sandwich. Tilted Kilt fully understands this consistency concept and implements it very well with their franchisees. I have personally toured their Tempe based franchise training facility and was HIGHLY impressed. The training really covers the gamut of their concept. There’s even a full bar and test kitchen inside. This really helps set up there franchisees for success right from the beginning.

With that said, Eye Spy Spotter Service has been a vendor for the Tilted Kilt from their near beginning. We perform bartender theft integrity spots and restaurant service mystery shops in all of their stores nationwide. Our services are very unique and if used properly, can be utilized with incredible results. Tilted Kilt understands this.

Eye Spy helps them report on bartender theft issues and overall conduct and level of service are upheld to their standards. This provides them with information when discussing operations with their franchisees. The franchises can then in turn use our reports to better train their employees. Moreover, our reports help the Tilted Kilt to keep a finger on the pulse of each and every one of their locations. This can be invaluable information for them to take action if one of the pubs is deviating from their franchise norm. Eye Spy coins this the “Franchise Compliance.” It’s near impossible for the Tempe based corporation to have a bird’s eye view of the operations of each and every one of their Tilted Kilt franchises. Eye Spy becomes their necessary eyes and ears of each establishment.

Tilted Kilt is very concerned with maintaining their franchise “system of systems.” Eye Spy and their reports help them maintain this and report back to them, via our detailed reports, when deviations occur.

For instance, adherence to the Tilted Kilt costume is vitally important. Eye Spy spotters report back when they view employees not in compliance – and usually with photographic evidence.

The Tilted Kilt has a strict policy that franchisees are not allowed to post literature or hang posters that first, are not approved by the corporate office, and second must have the Tilted Kilt official logo present. Our spotters again report back to the corporate office if this franchise rule is broken – again many times with photographic evidence to support the claim.

As a vendor, Eye Spy Spotter Service operates as the Tilted Kilt Franchise Compliance Testers. Tilted Kilt is always looking ahead; however, and more importantly, they also continuously look behind, to be sure that the concept is maintained correctly and Eye Spy Spotter Service is there to help them do this.

Celtic-themed sports bar concept gains momentum

Tempe businessman Ron Lynch saw a winning franchise concept the minute he stepped into the Tilted Kilt at the Rio hotel in Las Vegas.

The Celtic-themed sports bar, with its publike ambiance, imported ales, Scottish food and sexy servers, was something new and different that hadn't been done. "It was like an upscale Hooters with a Scottish accent," Lynch said, referring to the restaurant chain known for its buxom female servers.

But instead of Hooters' sporty outfits, the Tilted Kilt's female servers wore knee-high socks, short plaid kilts and white camp shirts. Like Hooters Girls, the so-called Kilt Girls come off as sexy, but the idea is they don't cross the line into sleazy. "They looked like the girl next door, only with a kilt," said Lynch, who played basketball for the University of Oklahoma under longtime Phoenix Suns coach John MacLeod.

By walking the fine line between sexy and sleazy, businesses can use sex appeal as a draw and still maintain enough respectability to be generally accepted at most malls and shopping centers. That model has allowed Atlanta-based Hooters to grow into a chain of 455 restaurants in 44 states and many foreign countries. It's a success story that Lynch hopes to repeat.

Expanding in a downturn

The Tilted Kilt was developed in 2003 by Las Vegas restaurateur Mark DiMartino,who wanted to add an element of sex appeal to the Rio hotel's sports bar. After all, it was Las Vegas.

Lynch quickly recognized the Tilted Kilt as a concept that would also work outside Las Vegas and in 2005 acquired rights to franchise the concept.He set up headquarters in Tempe and started selling franchises in 2006. There are 36 Tilted Kilt locations open in 14 states and an additional 22 under development. Tilted Kilt ranked third overall on Restaurant Business' 2010 "Future 50" list, which ranks the fastest-growing franchises in the restaurant industry.

While the recession may have slowed the chain's potential growth, Tilted Kilt has continued to expand and will have about 50 locations open by the end of the year, during prime football season, Lynch said. Tilted Kilt sports bars are 6,000 to 9,000 square feet, significantly larger than a Hooters, and more elaborately furnished to achieve the ambiance of a Scottish pub. The Tempe location has 15 large flat-screen televisions, but some locations have as many as 40. There are 24 beers on tap in Tempe; some franchises offer double that. It cost $75,000 to buy a Tilted Kilt franchise but as much as $1.8 million to get one up and running, depending on the size and location of the outlet.

There are four Tilted Kilt locations open in the Valley, with a fifth scheduled to open early next year at the CityScape development in downtown Phoenix. The 9,000-square-foot CityScape location, near the downtown Phoenix sports venues, will be the company's flagship location in the Valley and do double duty as a training ground for new franchisees. Phoenix area businessman Mark Voss owns two Tilted Kilt franchises in Mesa and Denver and is pleased with the results so far. "It's one of the few restaurant chains that have been growing," he said. Voss' Denver location, a few blocks from the Coors Field baseball stadium, is currently the highest-grossing location in the chain. "It has elements that appeal to people on a lot of different levels," he said.

Another top franchise is near the entrance to Petco Park baseball stadium in San Diego. The company's biggest market so far is Chicago, with numerous professional sports franchises and six Tilted Kilt locations. For the $75,000 franchise fee, franchisees get the rights to use the name and concept, help getting their restaurants open, and ongoing marketing and product support.

Quality standards

New franchisees typically attend a monthlong training session in Tempe where they learn every aspect of running a Tilted Kilt franchise, from hiring Kilt Girls to cooking food. The first week is focused on maintaining the integrity of the Tilted Kilt brand and that fine line between sexy and sleazy. "It could come off as seedy, if you're not careful," Lynch said.

To prevent that, Kilt Girls and Kilt Boys, who work as bartenders, undergo rigorous training and are held to strict personal-appearance standards. They cannot have large visible tattoos, pierced body parts or over-the-top hairstyles. "It's important to maintain the wholesome cheerleader image," Lynch said. The uniforms, or costumes, must be worn in a certain way to avoid being overly suggestive. Male bartenders' kilts must be worn snugly around the waist and not on the hips.

"We do a costume check before each employee goes on shift," said Kristin Cronhardt, Tilted Kilt's vice president of marketing. The chain is very aware that it could come off as sexist and takes strides to avoid that perception. In the past Hooters has been hit with employment-discrimination suits from men who claim they were denied employment because of their sex and women who say they were passed over for jobs because they were overweight. "Thirty percent of our customers are women, and we go out of our way to make sure they are not offended," Cronhardt said. If there is a table with both men and women present, Cronhardt said servers are trained to always approach the women first. Top Kilt Girls can gain extra recognition by appearing in the company's annual calendar, which is distributed to suppliers and patrons. The calendars feature a photo of the women in their work outfits and another wearing something more casual - like a bathing suit.

 

YOU TUBE INTERVIEW WITH TILTED KILT CEO - Tilted Kilt President Ron Lynch on his restaurant chains concept and success.

http://www.youtube.com/watch?v=9LaZB0ksOmM

 

BARTENDER THEFT:
Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010


Bar Settles Dram Shop Case for $1 Million

August 31, 2010 20:34 by administrator

Ga. Bar Settles Dram Shop Case for $1 Million

Holt demand, spoliation sanction help put end to suit over fatal crash

Katheryn Hayes Tucker - Fulton County Daily Report - August 31, 2010

A Holt demand and a spoliation sanction from Cobb County State Court Chief Judge Toby B. Prodgers were the key ingredients in the $1 million settlement of a wrongful death case against The Sports Grill for serving alcohol to a customer who had a fatal crash on the way home.

The drama continued into the final hour before the settlement deadline set by plaintiffs attorneys James L. Creasy III of Gillis & Creasy and Lloyd N. Bell of Bell & Mulholland, who were fielding calls on their cell phones from their cars and offices until nearly noon on July 15, when Statewide Insurance Co., acting through RCA Insurance, wrote the check rather than risk exceeding the $1 million policy liability limit if the case had gone to trial.

"Frankly, I wish they hadn't settled," said Creasy, the lead plaintiffs attorney. "I'd like to have tried the case."

Creasy had made Holt demands, a demand for settlement of the full amount of available liability insurance, unsuccessfully twice before during nearly two years working on the case. The reason the tactic worked the third time was Prodgers' order granting their motion for spoliation sanctions and striking much of the defendant's evidence. Before Prodgers' order, the defense had served the plaintiff with a $50,000 order of judgment, according to Creasy.

"That was a remarkable ruling," said Brad C. Kaplan of Kaplan & Seifter, who represents the bar owner, Winston's Food & Spirits, but was not involved in the litigation. "It was very unusual." The defense attorney in the case, J. Robb Cruser of Cruser & Mitchell, declined comment and deferred to Kaplan.

Kaplan said the bar owner was "extremely disappointed" with Prodgers' order, which created a practical problem of not being able to present evidence. The company had never faced a dram shop case during 25 years in business, according to Kaplan, who said the owner brought him in near the conclusion of the litigation. "My role was to talk to the insurance company and ask them to do the right thing," Kaplan said.

The issue in the judge's order was four hours of videotape from the night in October 2008 when William Paul Davis IV, now 28, was drinking at The Sports Grill in Austell before he left and crashed into the car driven by Cuneyt Erturk, who was on his way home from work. Erturk was killed. His widow, Trivilla Ross Erturk, is the plaintiff in the case against Davis and The Sports Grill.

The bar recorded over most of the tape, producing only a few "seconds or minutes" according to the judge's order, showing Davis entering and leaving. The order also said the bar destroyed the tabs for two patrons drinking with Davis and that night's "spill sheets," lists showing free drinks given out by bartenders.

"The testimony given by the employees of the Sports Grill would indicate that defendant Davis consumed a certain amount of alcohol during the time he was on the premises, that he was not noticeably intoxicated, and that they had no reason to believe that he would soon be driving," Prodgers said in his May 10 order following a hearing in April. "However, the videos which existed at one time would have given an objective, impartial view of Davis during the entirety of the four hour period he was at the premises and not just the few minutes or seconds which the Sports Grill saved." He called the bar employees' testimony "self-serving."

Although the police did not initially demand the entire four hours of video, Prodgers said the spoliation was "not excusable."

"With respect to the sanctions to be imposed for such spoliation, it is particularly disturbing that the Sports Bar would permit the destruction of the subject evidence after it became aware that a patron to whom it had been serving alcohol was involved in a fatal crash after leaving its premises," Prodgers' order said. "The court hereby strikes those portions of its pleadings whereby it denied that it served alcohol to defendant Davis while he was in a state of noticeable intoxication knowing that he would soon be driving." Those allegations, the judge said, are "deemed admitted."

Bell and Creasy said they believe part of the reason the judge came down as hard as he did on The Sports Grill was the evidence in the part of the video that was played in court during the motion hearing. Over defense objections, they said, they played video showing what happened in the bar after Davis left.

The bartender had just testified that he never "free pours" drinks -- a flashy practice that may please patrons and earn tips as shown in the movie "Cocktail" but can lead to overserving alcohol, they said. In the video made just after Davis left, that same bartender could be seen free pouring drinks. In free pouring, a bartender holds a liquor bottle high and streams it into a glass, rather than measuring it. Creasy and Bell said it also helped their case that Davis admitted in his testimony exactly how much he had to drink in the bar that night: two Long Island iced teas -- which typically contain five kinds of liquor -- and six 16-ounce beers.

Davis refused alcohol tests the night of the accident, but witnesses smelled alcohol on his breath, according to Creasy. Davis faces charges of DUI and vehicular homicide.The bar still contends it was not liable for Davis' actions, Kaplan said. "A high bar has been set for plaintiffs in dram shop cases," he said. He also said "free pouring is not necessarily an indication of overserving." But once Prodgers ruled on the spoliation motion, Kaplan said, the defense had "a practical problem" of not being able to present evidence. "They did not believe they were liable, but based on the legal circumstances, they did what was correct," Kaplan said of the defense. And, he added, "The plaintiff's lawyers did a good job. The case is Trivilla Ross Erturk v. William Paul Davis Jr., Suzanne G. Davis, the Sports Grill a/k/a Winston's Food and Spirits, No. 2009A-1617-6 in Cobb County State Court.

BARTENDER THEFT:

Michael Zenner - CEO      
Eye Spy Spotter Services Inc.
eyespyspotter.com

bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com

PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

© Eye Spy Spotter Services Inc. 2010