POS-itive Results!: How Sonic's POS System Boosts Profits
Leveraging new technology has always been at the forefront of the Sonic Drive-In business. When the brand launched 65 years ago in 1953, founder Troy Smith wanted to offer guests "service at the speed of sound." He did so by connecting guests in their vehicles to the crew members indoors through a two-way radio adapted from drive-in movie speakers, allowing guests to order without having to wait for a Carhop. At the time it was a novelty, but it also led to faster service, a reduction in labor costs, and an increase in revenue and guest turnover. It revolutionized our business, and we've remained dedicated to guest-oriented innovation ever since.
As a franchisor, we work to improve the Sonic experience for guests as well as for franchisees, who own and operate more than 94 percent of our drive-ins. Enabling our franchisees to run profitable drive-ins is mutually beneficial, and is the basis for the development of the Margin Improvement Management (MIM) team in recent years. The MIM team helps franchise operators kick-start a process in which existing technology tools and sophisticated POS systems are leveraged to their full capacity, allowing for closer monitoring of a bevy of variables that have a significant cumulative impact on the individual drive-in and the franchise group overall.
The MIM training initiative is designed to help franchise operators better monitor and evaluate inventory, discounting, and staffing, all through the POS software at each drive-in. While most operators understand how to use the POS system daily to manage guest orders and crew schedules, they may not be aware of the functionality available at their fingertips to optimize available data and reporting options. We work to shed light on the newer POS software functionalities at hand that, when they are all working together, lead to more profitable operations, including: loss prevention, inventory control, staffing efficiencies, predictive forecasting, waste reduction, discount tracking, and more. While many franchisees we have trained were already doing some combination of the above, the addition of the MIM training has allowed us to showcase how these tools and reporting options work together to improve their business.
Our MIM training process takes place over the course of a few months. It begins with two days of in-person trainings with supervisors and general managers in drive-ins. To start, we dive straight into the onsite technology and software to demonstrate new ways of analyzing all available data to better inform their day-to-day operations, especially when it comes to inventory management, one of the greatest opportunities for measurable change. This is the bulk of the education process, with in-depth, hands-on guidance.
After two intense days, we give the operators a month to digest the information and get to know the system. We then have a follow-up call to talk through any questions or challenges they have faced. At this time, we take the opportunity to retrain, redirect, or solve problems. We then circle back another month later to discuss preliminary results. This is when many operators and general managers get excited about the long-term ramifications of this program. They begin to see how all these cost savings and efficiencies start to add up over time, especially if they run more than one location. Drive-in leadership at this level often have bonuses tied to drive-in success, so showing them tangible ways to improve profits results in a real financial boost to the individual as well.
We continue to follow up with franchisees, as regular visits help keep teams focused on the program and allow for training any new managers. Throughout the entire process, our MIM team members are only a phone call away, available to problem-solve or give personal guidance to anyone in the drive-in. This is by far the most important factor of this entire program, and without this person-to-person connection we would not have the success we have seen to date. Additionally, as the program expands throughout our system, franchisees are talking with each other about their experiences, leading to stronger interest in the program and a faster spread of awareness, adoption, and success.
The success has been impressive. Franchisees who have been through the MIM process have experienced significant decreases in food costs, paper costs, and order voids, leading to higher profits. These higher profits are resulting in more dedicated (and happier) general managers, which in turn creates a better workplace for hourly crew members and the overall franchisee organization. Beyond the financial benefits, franchisees have seen other unintended but equally beneficial outcomes of the program.
First, there is a greater understanding of how small actions (burning a burger patty, wasting napkins, making guest order errors, etc.) can affect the bottom line, giving the crew greater accountability for and ownership of the success of the business.
Second, there are happier crews in the drive-ins owing to increased collaborative opportunities, with management and hourly crew members feeling empowered and working together toward a shared goal.
Finally, the MIM training leads to more knowledgeable and business-minded general managers who become more invested in their jobs and interested in additional career paths at Sonic, building a pipeline of potential operators and franchisees who will help grow the brand in the future.
The moral of the story is simple. Provide the right tools for your business and ensure you are using every capability of that tool to its fullest to improve performance, profits, and passion in the workplace.
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