2015 BRFA Annual Member Meeting

2015 BRFA
Annual Member Meeting
Meeting Objectives
• Discuss our priorities • Share ideas, opinions and concerns
– 2‐way communication
• Present information to help you improve your business.
Agenda:
Today:
• BRFA Update • Priorities
– Remodel
– NAF Reporting
Tomorrow:
• Labor Law: Trends, Risks, Actions
– Ted Boehm, Fisher & Phillips, LLP
• Government Affairs – Jason Straczewski, CFRA / Pancake PAC
• Insurance Industry Review ‐ Leavitt Group
• PCI Compliance ‐ Tracy Libertino, Netsurion
• Legal: Franchise Agreement
– Jeff Haff, Dady & Gardner, PA
• Cost Management ‐ Rosnet
• Utilities – Voyant Solutions, Small Box Energy, Creative Energy
• Open Discussion
General Business: BRFA Board
Chris Milisci
Paul Kenny
Alex Anthraper
Karen Miles
Russ Powell
Sal Alaimo
At Large: David Reller (Chair) and Tyoka Jackson
General Business
Board Seats up for Election in November: •David Reller (At Large)
•Sal Alaimo *
•Paul Kenny *
•Alex Anthraper *
•Russ Powell *
*Eligible for re‐election
General Business
• Dues per store:
– Current: – Platinum: $100
$1,000
– Industry Norm: $200‐250
– Proposed 2016: $200
Dues Per Store • Other Restaurant Associations:
– Hardees: – Denny’s: – Domino’s
– Dunkin’ Donuts
– Longhorn – Wendy’s
– DQ
– Burger King
$100
$200
$200
$250
$75
$150
$250
$200
Key Focus Areas for BRFA
1.
2.
3.
4.
5.
Remodel NAF reporting transparency
Non‐Traditional development
Provide support where Corporate doesn’t
Share best practices to maximize profits.
Remodel
• Virtually all Franchisees are very
concerned about the new remodel.
– “Doubles my annual cost.”
– “Where will I get the funds?”
• Franchise agreement and legal precedents are generally not favorable.
• Challenging Economics BRFA Survey
• #1 Issue for IHOP Franchisees: Remodel
Percent Very Important / Critical 1
Remodel
98%
2
Franchise Renewal
84%
3
Cost Management
81%
4
ACA
77%
5
Encroachment
74%
55% rate it #1
Remodel: Investment Comparison
160,000 +2.9x
Total Investment
Per Year
55,000 11,000 Current 5‐yr "refresh"
22,857 New‐7 yr remodel
Source: IHOP Corp. Memo 2/24/15
2/24 Letter from Jay McDermott
•
•
•
•
If the test results meet our rollout criteria, this will become our new standard, which best case would become available in July, 2015. And, as I presented at the October 2014 convention in Phoenix, with this greater scope of work, we will extend the remodel lifecycle from Five Years to Seven Years.
In the alpha phase, the seven restaurants have delivered a range of sales increases from ‐2% to +11% and traffic increases of +1% to +16% when compared to similar, non‐remodeled restaurants.
The remodel is expected to range from $140k to $160k WITHOUT the restroom upgrade, and $145k‐$175k with the restroom.
Those with remodels due after June 30, 2015 will not be permitted to accelerate their remodels, and will be required to utilize the then current standard, which, assuming the test results meet our rollout criteria, we expect to be the new remodel image.
Remodel Economics
Analysis is Complicated:
1.
2.
3.
4.
5.
Test Sample Size determination
Calculation of Incremental Sales
Is Sales Lift Permanent? i.e. Will it last for 7 years?
Profit Flow‐Thru %
Financing is usually expensive and lengthens payback.
“Beta” Test Size Considerations
Confidence
Required Number of Level
Test Stores
80%
=
11
90%
=
17
95%
=
24
Within a 20% Margin of Error
Test Stores should represent the system
(age, building, sales, etc.)
Incremental Sales
•
•
•
•
•
Test Period vs. Pre‐Wave vs. Control
NAF Impact?
Seasonality, weather?
Industry trends?
Other store factors (hours, ops, competition, road closure, etc.)
What is the right flow‐thru assumption?
Flow‐thru =
26% to 34%
(Depending on percentage rent)
Variable Costs: Food
Craft Labor
Workers Comp + ACA
Payroll Tax
Advertising
Royalty Supplies
Credit Cards
Utilities
Repairs
Other
Subtotal
Rent
Total
% 24.0
21.0
1.5
2.7
3.5
4.5
1.5
1.5
2.5
2.0
1.5
66.2
8.0
74.2
Remodel Payback
Flow‐thru=34% (no percentage rent)
Incremental Sales/Week
Investment
$1,000 $1,500
$2,000
$2,500 $200,000
11.3 yrs
7.5 yrs
5.7 yrs
4.5 yrs
$150,000
8.5 yrs
5.7 yrs
4.2 yrs
3.4 yrs
$100,000
5.7 yrs
3.8 yrs
2.8 yrs
2.3 yrs
Note: Excludes Interest Expense
Remodel Payback
Flow‐thru = 26% (with Percentage Rent)
Incremental Sales/Week
Investment
$1,000 $1,500 $2,000 $2,500
$200,000
15 yrs
10 yrs
7.5 yrs
5.9 yrs
$150,000
11 yrs
7.5 yrs
5.5 yrs
4.4 yrs
$100,000
7.5 yrs
5.0 yrs
3.7 yrs
3.0 yrs
Note: Excludes Interest Expense
ROI vs Payback
• ROI: % of investment recovered in year 1
= $ Annual Profit ÷ Total Investment
• Payback: # years to recover investment
= Total Investment ÷ Annual Profit
¾(ROI = 1 ÷ Payback)
• Over 7 years, 14.3% ROI = breakeven
(excluding financing)
Sales Lift duration is important
• Beta Tests are very short.
– Most are just getting started.
• Will sales lift will last all 7 years?
• Sensitivity Analysis is important.
Sales‐Lift Duration Sensitivity Example
Payback
Base Case *
6 years
Loss of 1% after 1 yr.
7.7 years
+ 28% * Sales = $35,000, 4% sales lift, 34% flow-thru
Remodel hurdles are more challenging for lower‐volume stores
SALES / WK
% Sales Growth at
$1,500 per week
Bottom 25% of IHOP’s = $22,300
…and for smaller IHOPs
At $1,500/wk
Industry Experience is Not Encouraging
Sales Lift by Remodel Type
($150-250K)
Source: Restaurant Research LLC, 2012
“Minor” Remodel Paybacks
Source: Restaurant Research LLC, 2012
Stipulated Remodel Frequency
IHOPs are remodeled most frequently
12
10
10
8
6
7
7
7
10
10
10
7
6
5
5
5
5
5
4
2
0
Source: Restaurant Research LLC, 2012
Scope of Work Considerations
• Explore ways to get “bang for less bucks”
– Same look with lower dining room investment
– Signage
• Incentivize larger scope with longer remodel cycles
• Consider store age, size and volume. – Remodel must fit store‐level economics
Remodel Conclusions
• Ensure Adequate Testing
– Number of units and length of test
• Conservative financial analysis
• Scope of work options
– Flexibility for “Disadvantaged” and new restaurants
– e.g. lower cost options and/or longer cycle
• Offer Low‐Cost Financing • Minimum 7‐yr cycle
Remodel
Discussion
NAF Reporting
IHOP Advertising Spending
COOP
NAF
$94,000,000 $61,000,000 $21,000,000 $5,000,000 2013
2015
Source: BRFA Calculations
Why NAF Reporting?
IHOP Corp. G&A allocated to the NAF:
$4.2 Million
4.4% ‐2015 budget
2013 NAF Allocation
Media
1.5 3.3
1.5
3.3
Production
6.7
Administrative
9
Agency
Market Research
77.6
Restaurant
Advertising
Why NAF Reporting?
• IHOP Corp’s Position:
– Presenting (vs. Distributing) is sufficient disclosure and complies with Franchise Agreement
– Confidentiality: Concern that proprietary advertising information will end up in the wrong hands
Why NAF Reporting?
IHOP Franchise Agreement:
“Within a reasonable time after the expiration of each of Franchisor’s fiscal years, Franchisor shall furnish franchisees summary information with respect to…. The National Advertising Fund.”
“A reasonably itemized summary breakdown and description of all disbursements from the National Advertising Fund during such preceding fiscal year, sufficient to indicate separately each of the various classes of expenditures made from such Fund and the amount of the expenditures made for each class thereof”
Why NAF Reporting?
• BRFA’s position:
– We acknowledge that transparency has improved
– Transparency more important now than ever :
• NAF spending is significantly higher now
• Loss of Coop oversight and control • IHOP Corporate G&A allocation
– IHOP’s solution: insufficient time for analysis
– Confidentiality concern does not override the Franchisees’ contractual rights.
Please visit all of our vendors
Allied Industries, Int’l
Baker Commodities, Inc.
City Lighting Products
CreativEnergy Options
DTT
EcoLab, Inc.
First Data
FLAT Tech, Inc.
Global Remodeling
Intuit Quick‐Books
Leavitt Group
Lees Carpets
Lytle Signs, Inc.
Manitowoc Foodservice Group
• Lytle Signs, Inc.
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Manitowoc Foodservice Group
Merric Millwork & Seating
National Restaurant Designers
Oracle MICROS
Payless ShoeSource
Performance Food Service
Red Mountain Lighting
Restaurant Services, Inc.
Seating Concepts
Small Box Energy
Snagajob
Spirit Realty Capital
Marcus & Millichap
Turnkey Technologies
Voyant Solutions
Wasserstrom
THANK YOU SPONSORS
2015 Priorities Discussion
Labor Law
FLSA Compliance and Litigation Prevention
Labor Law – FLSA Trends
FLSA Litigation: Hot Issues for restaurants
• Tip Credit / 20% Rule
• Salaried Overtime exemption
• Off‐the‐Clock
Fisher & Phillips LLP
ATTORNEYS AT LAW
Solutions at Work®
Blue Roof Franchise Association
Member Meeting:
Litigation risks for IHOP
Restaurants under the
FLSA
Presented by: Ted Boehm
Phone: (404) 240-4286
Email: [email protected]
www.laborlawyers.com
Atlanta · Baltimore · Boston · Charlotte · Chicago · Cleveland · Columbia · Columbus · Dallas · Denver · Fort Lauderdale · Gulfport
Houston · Irvine · Kansas City · Las Vegas · Los Angeles · Louisville · Memphis · New England · New Jersey · New Orleans
Orlando · Philadelphia · Phoenix · Portland · San Antonio · San Diego · San Francisco · Tampa · Washington, DC
National Law Firm Serving Employers
Fisher & Phillips LLP
ATTORNEYS AT LAW
Solutions at Work®
Why is it important to understand and follow the FLSA requirements?
• Increasingly negative political environment
– Plaintiff’s lawyers and the Department of Labor are targeting the restaurant industry. – President Obama’s push to address “misclassification” problem.
• Penalties can be significant
Wage and Hour Litigation is Expensive
• March 2014: McDonald’s operator settled claims for $500,000 that it made unlawful deductions for uniforms and cash register shortages and that employees worked “off the clock.”
• March 2012: Mario Batali’s restaurant group settled FLSA claims for $5.25 million. Employees claimed that owners took percentage of tip pool.
• Jan. 2009: Class of waiters, bartenders and bus staff sought
approval of $2.5million settlement of claims with NY restaurants.
Claims alleged that restaurants violated law by requiring them to
share tips.
• March 2008: Federal court in Florida allows class of employees to
proceed to trial with claims alleging that the company violated
federal law by improperly compensating tipped employees
Tip Credit Eligible Employees
• Tipped employees: regularly receive
more than $30/month in tips.
• Employers must notify employees
about the tip credit allowance
before the credit is utilized.
• Employers must be able to show
that the employee receives at least
minimum wage when direct wages
and the tip credit allowance are
combined.
Tip Credit – Contents of Required Notice to Tipped Employee
• Cash wage amount
• Tip credit amount
• That tip credit claimed by employer cannot exceed the amount of tips received by the tipped employee
• That all tips are to be retained by employee except if valid tip pool exists
• That tip credit will not apply to any tipped employee who does not receive notice
• No Notice = Full minimum wage is owed
• Sample notice in handouts
Tipped Employees: Credit Card fees
• Credit Cards: If tips are charged to a credit
card, the employer may pay the employee
the amount of the tip, less the percentage
paid to the credit card company.
• Example, the credit card company charges
an employer 2%. Employer may pay the
tipped employee 98% of the tip without
violating the FLSA.
• However, this practice, while upheld by DOL,
can hurt employee morale and must be very
carefully administered.
Tipped Employees: Service Charge
• A compulsory service charge (e.g. 18% of the bill) is not
considered a tip and cannot be applied to tip credit.
– Rather, such charges are a part of the employer’s gross
receipts.
– Where service charge is imposed and employee receives
no tips, the employer must pay the entire minimum wage.
– Consider eliminating automatic service charges but
printing suggested gratuity amounts on receipts.
Dual Jobs
• Example: a cook who also works as a server for the restaurant.
• Employer can only take tip credit for hours worked in the server position.
• Not a common issue in the restaurant industry. The more likely issue will be the “20% rule”……
The 20% Rule
• The tip credit is available for hours
spent doing tipped work and work
“related to tip earning work.”
– For example, a waitress spends some time
making coffee and cleaning/setting tables.
These duties are not tip producing
themselves but may still constitute tipped
work subject to the 20% time limitation.
The 20% Rule
• If a tipped employee spends more than 20% of the time doing preparation or incidental work, no tip credit can be taken for time spent performing those tasks.
• This is the position of the DOL and most courts.
The 20% Rule
• Example: You have a server that works 11am‐5pm.
From 2:00‐4:00pm you have no orders, so you
have him wash dishes and tables.
• He has spent 2 hours of his 6 hour shift, or 33%, on
incidental work. He must be paid $7.25 per hour
for that 2‐hour period – cannot take tip credit for
that time period.
The 20% Rule
• Fast v. Applebee’s (2011). – Servers alleged the following “non‐tipped” work: cleaning blenders, cutting fruit for garnishes, taking inventory, preparing drink mixes, cleaning the restaurant after‐hours, cleaning bathrooms, sweeping, etc.
– The Court refused to answer which specific duties count towards the 20% rule.
– BUT, the court upheld the 20% limitation.
• 2014 NY Class action involving 2,600 TGI Fridays wait‐staff: settlement of the claims for $2.86 million.
The 20% Rule – Best Practices
• Designate most (or all) preparation and incidental work to non‐tipped employees.
• Spread the “non‐tipped” work among all tipped employees; do not assign to just a few tipped‐employees exclusively.
• Monitor time spent on “incidental” work. For example, no more than 1 hour and 12 minutes for a 6 hour shift.
• Never allow tipped (or any other) employee to finish work “off the clock.”
The 20% Rule – Best Practices
• Do not regularly assign “non‐tipped” work to just 1 or 2 employees at the beginning or end of a shift. This may implicate “dual job” concept.
• No clear consensus from courts as to which activities will count towards the 20% limitation.
– Be conservative and use common sense. Assume that nearly every “non‐tipped” duty will count towards the 20% threshold.
State Law
• Be sure you check state minimum wage laws
• Some states have special rules regarding tip credit
• http://www.dol.gov/whd/state/tipped.htm
FLSA: Overtime Exemptions
• Every employee must be paid overtime unless clearly exempt
• “White collar” exemptions: executive, administrative, professional, outside sales
• Employer has burden to show exempt status
• Detailed criteria must be met
Executive Employees
• Main work must be managing
• Must manage a recognized department
• Must customarily and regularly direct the work of two or more other full‐time employees (or the equivalent)
• Receives a salary or guarantee of at least $455.00 per week
Concurrent duties – may lead to problems
• Example: a “kitchen manager” who supervises kitchen staff but who also cooks. • The question will be which job duty (management of employees vs. cooking) is his “primary job” duty. • If the majority of his time is spent cooking and he only occasionally directs other kitchen staff, he will be deemed non‐exempt. Misclassification in the restaurant industry
• 2001: Tennessee federal court. Waffle House hit with $2.8 million verdict for improperly classifying its “unit managers” as exempt. Court found that primary job duty was not management but working as a grill operator. One of the first cases. • 2015: Jimmy John’s sued by ASMs who claim they were wrongly classified as exempt under the executive exemption. They claim that primary job duty is making sandwiches; that they have no control over hiring/firing/employee discipline. • 2011: KFC sued by ASMs who claimed they did not manage and that they performed same job duties as hourly‐employees.
Administrative Employees
• Main work must be office or non‐manual work directly related to management policies or general business operations
• Work must include the exercise of discretion and independent judgment
• About “matters of significance”
• Receives a salary or guarantee of at least $455.00 per week
Changes to Executive and Administrative Exemptions?
• DOL scheduled to release proposed revisions to these exemptions this month. • Published reports suggest that the salary threshold requirement will be increased from $455 per week to $900 or $1000 (annualized to $46,800 to $52,000).
• Duties tests are likely to be made more difficult, including time limitations on non‐exempt work.
• Goal: to make it more difficult for employers to correctly misclassify employees as exempt under any of the white‐
collar exemptions. • Widespread belief among federal and state labor departments that employers are misclassifying.
Thank You
Presented by:
Ted Boehm
Phone: (404) 240-4286
Email: [email protected]
Fisher & Phillips LLP
ATTORNEYS AT LAW
Solutions at Work®
20% Rule:
Actions Taken by IHOP Franchisees
• “Guest Ready Program”
• ACG
9Applebee’s program
• Mashoor Awad
“Guest‐Ready Program”
• Eliminates the term “side‐work”
• Establishes new procedures and guidelines:
1.
2.
3.
4.
5.
Servers work less than 20% in non‐tipped duties
Servers self‐report non‐compliance
Servers are paid full minimum wage when appropriate
Tip Credit policy is adequately disclosed
New job‐aides
Tip Credit – 20% Rule Best Practices
• Limit time spent in “related” duties to 20% • Cleaning/setting tables, making coffee, occasionally washing dishes or glasses, side‐work, etc. “Provided they are incidental to regular duties and generally assigned to servers.”
• Consider 15% policy (ACG)
• NEVER assign “unrelated” work to servers
• Rest Rooms, Parking Lot, Windows, mopping floors, etc.
• Be conservative with gray areas, especially duties routinely assigned to non‐tipped employees
Tip Credit – 20% Rule best practices
•
•
•
•
•
Train management / signoff
Document non‐compliance and discipline
Remind Servers of 20% limit at clock‐in (EDM)
Specify “related” guest‐ready duties via job aids
Shift all non‐related work to combos/hosts, especially deep‐cleaning, or have servers clock‐
in as host/combo
– Beware of traditional IHOP practices
• Pay $7.25 (or State min wage) for pre‐opening and post‐closing
Tip Credit – 20% Rule Best Practices
ACG: Signoff on Micros Clock‐Out
“By my signature below, I
acknowledge, understand, accept
and agree to comply with the
information contained in the
employee handbook provided to me
by my manager.
As a tipped
employee, I have worked 85% of my
shift directly serving guests and 15%
of my shift completing guest ready
steps. It is my responsibility to notify
my manager immediately if there are
any concerns regarding my shift.”
Employee Name
____________________
Employee Signature
____________________
Date: _______
Witnessed by:__________________
FLSA Lawsuit Prevention
BRFA Next Steps:
1. Modify Applebee’s rollout materials for IHOP use
• Incorporate ACG/Awad’s ideas & materials
2. Publish via BRFA.net
3. Continue to monitor legal trends and share best practices
Government Affairs/Pancake PAC
Political & Legislative Outlook for IHOP Restaurant Owners Jason Straczewski
Vice President, Government Affairs
CFRA, LLC
Political & Legislative Outlook for IHOP Restaurant Owners
• Key Issues Facing IHOP Owners
– 40 Hours is Full Time
– Overtime Regulations
– Joint Employer & the NLRB
• Political Landscape in 2015 & Beyond
• Pancake PAC ACA Reform: 40 Hours is Full Time
• Top priority for Leadership in House/Senate
• Two bipartisan bills introduced at start of new Congress
– H.R. 30, Save American Workers Act
– S. 30, the 40 Hours is Full Time Act
• January 8 – House floor vote 252‐172
• Senate HELP Hearing on January 22
• President Obama issued veto threat
ACA Reform: 40 Hours is Full Time
What is the Opposition Saying?
• Employers more likely to keep hours below 40 to drop insurance coverage. More workers at risk.
• Increases budget deficit • Unfair to companies offering health insurance
Get involved at
www.moretimeforfulltime.o
rg
Overtime Regulations
• In 2014, President Obama instructed DOL to review and revise Overtime regulations
• Regulation last updated in 2004
• Goals:
– Increase exemption threshold from $455/week
– Clarify management exemption
– Review concurrent duties test
– Expand access to Overtime for more workers
Overtime Regulations
Current Speculation
• Raise Salary test to $42,000‐$51,000/year ($800‐$971/week)
• Bright‐line test for “Concurrent Duties”‐‐51% of time spent on exempt work (CA model)
• Specify that exempt workers must exercise real independent judgment in how they accomplish their work
NLRB Joint Employer Policy
ƒ NLRB has formally charged McDonald’s USA as a joint employer with its franchisees in New York state
ƒ First legal hearing before ALJ is scheduled for March 2015 ƒ Charges still pending against other franchisees include Taco Bell, Panera, Wendy's, Jimmy John’s
ƒ Spreading to other federal laws, McDonald’s USA and its franchisee in VA were jointly charged in violation of Title VII
ƒ National coalition to fight back formed:
www.savelocalbusinesses.
com
NLRB Joint Employer Policy
What does this mean for Franchisees?
• Increased liability for franchisors will increase costs and royalties for franchisees
• Brand will demand more control over employment practices without regard to your operating cost
• Increased litigation as trial lawyers go after franchisor
• Brands could decide to forego franchising—loss of equity
• New standard applied to other employment laws
• Unionization – force brands to the bargaining table, allow pickets at all locations, compel terms within franchise system. 2015 Political Landscape
President
Congress
Governors
Senate: 54-46 (GOP 54%)
House: 246-188 (GOP
56.6%)
31-19 (GOP 62%)
State Legislatures
68-30 (GOP 69.4%)
2015 Political Landscape
• Last Congress, 392 House‐passed bills were stuck in the Senate. Over 100 of these measures were supported by +100 Democrats
• Of the 60 Democrat Senators who voted for Obamacare in 2010, 29 are no longer in office
• Of the 219 House Dems who voted for Obamacare in 2010, 94 are no longer in office
• Nearly half the current House were not in office in 2010
Who is Dictating These New Policies?
Richard Griffin
NLRB General
Counsel
Sharon Block
David Weil
Former NLRB Board
DOL Wage & Hour Administrator
& DOL Advisor
Get INTO Politics, or Get OUT of Business!
• Restaurant industry & service sectors are under threat
• Unelected academics are dictating & altering public policy
• Government policy is your GREATEST non‐
controllable cost!
Top 25 Food Service Industry PACs
PAC
Total
PAC
Total
National Restaurant Assn
1,054,000 Brinker International
185,190 International Franchise Assn
1,013,000 KFC Franchisees Assn
174,320 Bloomin' Brands
928,113 Burger King Franchisees
167,118 Coca‐Cola Company
858,669 Yum! Brands
141,005 Darden Restaurants
633,969 Cracker Barrel Old Country Store
84,284 McDonald's Corp
623,843 Pancake PAC (IHOP Franchisees)
73,800 PepsiCo, Inc
442,640 White Castle System
65,355 Wendy's Company
410,341 Hershey Company
61,294 TACO PAC (Taco Bell Franchisees)
312,913 DineEquity
36,503 Dr. Pepper Snapple Group
264,226 Aramark
33,039 American Beverage Assn
228,264 Sodexho
30,661 Pizza Hut Franchisees Assn
214,945 Dunkin' Brands
23,646 Buffalo Wild Wings
198,809 Thank You to our 2014 Supporters!
Mohamed Ahmed
Patti Ann Handelson
Robert Rosenberg
John Anthraper
Brian Horne
Scott Schrier
Crystal Blue
Tyoka Jackson
Susan Scott
Donna Broccoli
Stephen Lee
Jason Straczewski
William Butler
Christine Luciano
Scott Studner
Tony Cerillo
Norman Maes
Chris Suh
Cynthia Chambers
James Martin
Richard Taylor
Bong Hyun Chung
Mary Ellen Martin
Steven Terpstra
Kelly Fellows
Louis Maschi
Geoff Trout
Tom Gough
Karen Jo Miles
Billy Vollenweider
Milagros Hagar
Nicholas Peters
William "Doc" Wilhelm
Ramzi Hakim
David Reller
Scott Womack
Contribute TODAY!
www.pancakepac.com
The 11 Most Pro‐Active Strategies to Change Your Safety Culture
Andy Pettise and Howard Massey, Leavitt Group Insurance
11 Most Proactive Things
To Create A Safety Culture
1. Interview / Selection of Employees
7. Injury Illness Prevention Program
2. Medical Provider Network (clinics)
8. Behavior Based Safety Coaching
3. Post Accident Approach
9. Preventing Fraudulent Claims
4. Safety Committees
10. Incentive Programs
5. Safety Training – Monthly
11. Personal Protective Equip. Pgm.
6. Job Specific Safety Training
Interview & Selection
•
Don’t hire your own Workers’ Comp claims
•
Ask questions like:
- Has a MD ever told you that you can’t do a certain job?
- Have you missed work in the last 5 years, why?
•
Reference check all new hires
• Listen for what the reference is saying as well as what they
are not saying
•
Go to secondary references
Medical Provider Network
• Get the right clinics
• Visit the clinic
• Interview the clinic director
• Buy them lunch
• Agreement on what is first aid
• If they won’t cooperate, change clinics
• Have one person as focal point for all claims
Post Accident Approach
• Utilize Nurse Triage
• You or a manager take the employee to the
approved clinic
• Drug test all injured workers
• Follow-up on treatment – show the employee you
really care – stay in touch – team approach
• Get them back to work – return to work duties
• Stocked First Aid kits
Safety Committees
•
Safety Leader in each location
•
Safety Committees required by CA SB198 – all locations
• Made up of 5 people – FOH, BOH
• Monthly inspections
• Your eyes / ears
•
Problem areas identified before they become a
workers’ compensation problem – Take action
•
Direct correlation between number of claims – quality of
managers.
Safety Training Monthly
• Safety Training has to be done consistently
• Utilize monthly Safety Training Calendar and Lesson
Plan
• Topics are based on actual losses
• Managers to teach different class each
month utilizing Lesson Plan
• Employee documentation – OSHA
Job Specific Safety Training
• Train each employee in safety aspects of their job
9 Hostess / Cashier, Cook, Prep, Server, Combo,
etc.
• Identify jobs they do and how to do that
job safely
• Just as easy to train someone in their job
the safe way
Injury Illness Prevention Program (IIPP)
•
OSHA mandated
•
Tool Box
- Safety Orientation Check List
•
12 years to develop
- Accident Investigation
•
Unique Items
- Interviewing Selection / References
- Attitude Survey
- Job Specific Safety Training
- Letter To New Employees
- How to set up a Safety Committee
- Property / Liability Safety Tips
Behavior Based Safety Coaching
• Identify what are the Safety Standards
• Increase Safety Awareness
• Teach managers how to coach employees to
change unsafe to safe behavior
• Recognize and enforce safe behavior
• Key is the Area Coach, Dist. Mgr., Dir. of Ops
Preventing Fraudulent Claims
•
Discipline & terminate employees in a peaceful, graceful manner
•
DM / Manager / Employee resolve issues
•
JYM Example
•
Accident Investigation / Documentation – be aggressive
•
Cameras in the right places (i.e. walk-ins)
•
Attend all depositions
•
Deny claims – go to trial
•
Happy employees don’t file work comp claims
Incentive Programs
•
Simple
•
Mascot
•
Pens, Hats, Jackets, Aprons, Watches
•
On the spot recognition
•
Safety Bingo
•
Safety Party
•
Rotating Safety Trophy
Personal Protective Equipment Plan
• Identify / Stock all PPE Needed
• Safety Board – Place to Store
• PPE Inventory / Order
• What is to be Worn / When
• Zero Tolerance for not wearing PPE
Personal Protective Equipment
Important IHOP Items:
● Slip Resistant Shoes
● Cutting Gloves
● Burn Gloves
● Rubberized Apron
● Safety Glasses / Face Shield
● Safety Box Cutters
EPLI Coverage Discussion
Andy Pettise and Howard Massey,
Leavitt Group Insurance
Current Trends
•
EPLI prices are increasing.
•
Some Franchisees paying more now for EPLI than Prop/Liab.
•
Most insurance costs are rising.
•
•
▫ None more than EPLI.
All Insurance costs are claims-driven.
▫ Based on claims in your area.
▫ Based on claims for the industry.
▫ Based on your claims history.
•
Deductibles are rising:
▫ $500 to 1k to 5k to 10k to 25k to 50k.
Current Trends (continued)
•
Judgment awards are increasing.
•
What is the average EPLI claim amount?
•
State courts favor the employees.
•
These same states have high WC costs.
•
What are some of these states?
•
New trend – starting to see EPLI claims everywhere.
“Claims-Made” Policy
•
Totally different than your WC or PKG policy.
•
Claims must be reported during the policy period.
•
You must notify them immediately of any suspected claim .
•
After your policy ends, you cannot turn in any claims.
•
Do not delay the process in hopes the claim will go away (big mistake).
•
You must consult with their attorney at all times.
•
Hammer clause.
What are the most common EPLI claims?
Wage & Hour
•
This coverage does not come automatically with your policy.
•
Make sure your broker adds it for you.
•
W&H claims are huge in some cases.
•
Class action W&H claims are on the rise.
•
Attorneys love these cases because they get a big chunk of the money.
•
ie. emp. goes back from break 1 min. early ever day for 10 years.
•
How is this viewed by the courts?
•
Why is this a big payout?
Sexual Harassment & Social Media
•
ie. Employees or Mgmt. takes inappropriate photos.
•
They share those photos with other people. (how?)
•
You will lose this case every time (why?)
•
What do we do?
▫ Get EPLI coverage in place for all your locations.
▫ Train your employees on zero tolerance.
▫ Do your required Sexual Harassment training every 2 years.
▫ Update your employee handbook.
▫ Have a labor attorney review it.
▫ Have an arbitration clause (specific to EPLI) in your handbook.
Wrongful Termination
• Usually filed to get back at the manager.
• Can be avoided if you follow proper SOP:
▫ Document violations.
▫ Reprimand accordingly.
▫ Terminate respectfully.
ADA Claims
•
These claims are not covered.
•
Some carriers will pay to defend you.
•
EPLI policy will not pay for an ADA judgment.
•
Also, remember ADA laws vary from state to state.
•
Current ADA trends.
•
Recent IHOP ADA judgments.
Questions & Answers
Please come and see us with any questions.
Feel free to call us anytime.
BRFA: PCI Update and Tips to
Avoid Data Breach from Hackers
Presented by Daryl Airhart
Director, National Accounts
[email protected]
O: (713) 929-0208
Agenda
• Common Installation Mistakes (as it pertains to PCI)
• 2 Real Life Lessons Learned
• The New SAQ’s and What They Mean to You
Common Installation Mistakes (as it pertains to PCI)
Remote Access
• Shared accounts are not allowed. Each user must have their own account.
• Vendors must use different credentials for each customer (not location). In this case, 2‐factor authentication could count as a unique login and meet this requirement.
• Disable access when it is not needed. The best systems require the user to allow you to access them on demand
2 Way Internet Traffic
• Most People know that the firewall needs to stop things from the Internet, but what about traffic that starts at the POS side?
• Blocking outbound Internet traffic from the cardholder data environment is the most important method to counteract modern malware.
Malware Today
Blocking the right Internet traffic makes all the difference here
Too Many Functions
• Using the POS server or the back office machine to browse, send e‐mail, or other not POS services.
• If a machine can access the POS server, it needs to be limited on what it can do.
• When systems have too much access, malware and remote attacks are able to send data off the network. Use segmentation whenever possible.
2 Real Life Lessons Learned
Real World Issue #1
• National QSR managed part of the POS implementation using LogMeIn. Their setup required unique passwords, 2 factor authentication, and other PCI requirements. Had 24/7 access.
• Franchisees used their own configuration for LogMeIn (not PCI compliant)
• 300 locations were breached
Real World Issue #2
• 400 franchisees of a national brand managed to get the malware “Backoff”
• All franchisees were required to have a firewall.
• The locations that properly managed the outbound access did not lose any credit card data
• 187 franchisees did not block outbound traffic properly and were breached
The New SAQ’s and What They Mean to You
The SAQ’s for PCI 3.0
2 most common
2 most common
Rosnet Cost Management Tools
Patrick Bobrukiewicz and Gene Peters,
Rosnet
BRFA Cost Reduction
Session
BRFA Cost Reduction Session
• Four Critical Areas
–
–
–
–
Automation in Restaurant Systems
Labor Coverage & Cost Savings
Food & Inventory Cost Controls
Business Intelligence
Automation In
Restaurant
Systems
BRFA Cost Reduction Session
• How do you process your accounting & payroll
today?
– Do you do it yourself?
– Do you have someone do it for you?
– Is it automated?
• What if it could be done more accurately in less
time and save you money?
BRFA Cost Reduction Session
• Current state options
–
–
–
–
–
–
Print paperwork and send to office fax
Print paperwork and send to office via weekly pack
Call or email in time-sheets from POS
Enter numbers in to spreadsheets and send to office
Enter numbers in to multiple systems
Office rekeys or combines numbers to final package
• What do these all amount to?
– Unnecessary costs to your business!
BRFA Cost Reduction Session
• How do these processes work when automated?
– Numbers are automatically loaded to Rosnet via POS
or supplier connections
– Managers review and approve numbers in Rosnet
– Home office user is able to download a file from
Rosnet
– Home office user can load file(s) from Rosnet in to
accounting or payroll platforms all at once
• What does that save?
– Time and unnecessary costs to your business
BRFA Cost Reduction Session
• Where do the cost savings come from?
–
–
–
–
–
Paper
Shipping
Storage
Human Capital (restaurant manager)
Human Capital (office or accountant)
• When these processes are all automated you
turn hours in to minutes.
Labor Coverage
& Cost Savings
BRFA Cost Reduction Session
• How do your managers create schedules today?
–
–
–
–
Paper
Excel
Micros
Both paper and Micros
• When they make them how do they adjust for
changes in volume?
• How are time-off requests and availability updated?
• How long is it taking them?
• How is the staff communicated with?
BRFA Cost Reduction Session
• The simple answer is that in most cases these
either aren’t being done or they are being done
VERY manually.
–
–
–
–
Request off book
Tape the schedule to the wall
Copying schedules from last week
Rekeying in to Micros
• Our research shows that 72% of the time copies
are moved week to week and that managers
spend 4-6 hours in an IHOP making schedules.
BRFA Cost Reduction Session
• How does scheduling work when automated?
– Labor matrices are defined (administrator)
– Forecast is written
– Manager has Rosnet create a schedule
• Smart Copy
• Manual adjustments (if needed)
• Auto-Fill
– Validate
– Rosnet then automatically communicates with the
staff via StaffLinQ (app and/or website) and Micros
POS for time enforcement
BRFA Cost Reduction Session
• Where do the cost savings come from?
– Hourly Labor
• Labor coverage
• Time enforcement
– Human Capital (restaurant manager)
• Other benefits
– When proper labor coverage is deployed GLI scores
are positively impacted
– When staff communication and tools are increased
employee engagement and retention go up
Food & Inventory
Cost Controls
BRFA Cost Reduction Session
• How do your managers track food costs today?
– Paper (invoices)
– Order Guides
– Excel
• Do they do “inventory” when placing an order?
• Do you calculate your costs as purchases?
• Have you said to yourself “My food costs are
good, I run a 23%”?
BRFA Cost Reduction Session
• How should this process look?
–
–
–
–
Inventory is taken weekly
Highest variance items are identified
High variance items are counted daily
Issues with high variance items are addressed
• Over portioning
• Over prepping
• Theft
– New item(s) next week
BRFA Cost Reduction Session
• Where do the cost savings come from?
– Reduction in food costs
•
•
•
•
1.5-2% on average with IHOPs
Less inventory on hand
Less product being thrown away
Proper portion control
– Human Capital (restaurant manager)
• Suggested orders, freezer pulls, prep sheets, mobile
inventory
Utility Cost Management
How to reduce rates, usage and save thousands
IHOP Controllable Costs
8%
8%
Utilities
$60 - $100,000
37%
Food
Labor 47%
Percent of total Controllable Costs
Restaurants are Energy Hogs
Cost per s.f.
Restaurant Energy Hogs
Utility Cost Management
1. Usage 2. Rates (but electric rates are also a function of usage)
Usage Management
Past / Today
–
–
–
–
Turn it Off
Turn it Down
Equipment Maintenance
Manual – dependent on people Future
– Efficiency Lighting, Equipment, etc
• LED
• Energy Star
• Demand Controlled Ventilation
• Automated defrost – EMS Systems
Energy Management Systems (EMS)
• Technology Advancements (cloud, remote sensors, apps, etc.)
–Now much more affordable
–1‐2 Year Payback
–User‐Friendly
Energy Management Systems (EMS)
Sean Kennedy, Voyant Solutions
Tracy Markie, Small Box Energy
Enterprise Energy
Management for
Restaurants
How to reduce energy use and
maintenance costs while improving
customer comfort and your bottom line.
Enterprise Energy Management
Agenda
Why Enterprise Energy
Management?
What is Enterprise Energy
Management?
Important Things to Look For
Review EEMS Benefits
Questions
Why Enterprise Energy
Management?
Depending on how many restaurants
you have, the M&E systems
(HVAC, Lighting and Refrigeration)
represent thousands to millions of
dollars in assets and use thousands
to millions of dollars of energy.
Why Enterprise Energy
Management?
Running your restaurants
without it is like driving a car
without gauges.
What is Enterprise Energy
Management?
The hosted, automated, centralized control and
monitoring of facility related mechanical and electrical
systems in all your locations and bringing that access
through a single Web interface.
Enterprise Energy
Management System (EEMS)
EEMS Objectives
Reduce Energy Costs by 10% to
20%
Get Control of and Information on
Expensive Assets:
• HVAC, Lighting, Refrigeration
Optimize Energy Usage and
Equipment Operation
Improve Comfort and Atmosphere
Reduce Repair costs
Extend Equipment Life
Energy Savings Strategies
Roof Top Unit Synchronization
Compressor, Fan Failure and Reduced
Capacity Notification
Free Cooling
System Scheduling
Lighting Control Based on Actual Light
Level
Demand Control
Advanced Refrigeration Control with
Temperature Monitoring for Food Safety
Total Energy Monitoring
Analytics
Important Things to Look
for in an EEMS
Hosted Platform
PCI Compliance
Remote Device Management
Status Points
Smart Meters
Analytics
Work Order Management
Post Service Unit Diagnostics
24-7 Service Desk with HVACR experts
No More than 2.5 Year Payback
EEMS Summary of Benefits
Reduced Energy Use (Green)
Reduced Energy Cost
Improved Customer and
Employee Comfort
Reduced Repair and
Maintenance Expense
Improved Contractor Service
Extended Equipment Life
Utility Cost and Energy Management
Presented by:
Tracy Markie
Small Box Energy, LLC. – CEO Copyright Small box Energy, LLC 2015
Perspective?
Mine…
• MBA & BSEE – Finance/Marketing & Electrical Engineer
• GridWise Architecture Council (Department of Energy appointee)
• Certified Energy Manager – Association of Energy Engineers, Charter member, Institute of Energy Managers
• Chairman – LonMark International, Board of Directors –
SunSpecs, standards bodies for building automation and energy industries
• 30 years in technology, building automation and energy industries
Copyright Small Box Energy, LLC 2015
Copyright Small Box Energy, LLC 2015
Real Life Example – Tennessee BBQ Restaurant
Results for 6 month period
Knoxville
• 32.5% reduction in KWh
• Savings for period = $14,546
• Average monthly savings = $2,078 Hermitage
• 18.3% reduction in KWh
• Savings for period = $6,622
• Average monthly savings = $1,104
Copyright Small Box Energy, LLC 2015
Price range for installed system: $9K ‐ $12K
Chattanooga
• 45.3% reduction in KWh
• Savings for period = $20,905
• Average monthly savings = $2986
Smyrna
• 32.6% reduction in KWh
• Savings for period = $12,017
• Average monthly savings = $2,003 Much more than just Energy Management
HVAC Control &
Monitoring
On‐Premise & Remote Dashboards
Multi‐site Control & Visibility from any device
Lighting Control & Monitoring
Equipment
Control & Monitoring
Energy
Management
System
Cloud‐based
Data Storage
Walk‐in Control & Monitoring
Realtime
Energy
Usage & Costs
Copyright Small box Energy, LLC 2015
Food Safety
Get the big picture!
Global Views
Analytics
Control from
Anywhere
Copyright Small box Energy, LLC 2015
Platform Independent Apps
Zone Monitoring & Control
Enterprise, Store and Energy Views
Alarm Monitoring & Management
Copyright Small box Energy, LLC 2015
Best way to make it happen?
• Capital Acquisition – client buys system upfront
•
•
•
•
Pay monthly fee for enterprise platform
DIY energy management strategy
Typical 1 year warranty
Client owns and is responsible for maintaining equipment
• Lease/Finance Option – client buys system over time
•
•
•
•
Pay monthly fee for enterprise platform
DIY energy management strategy
Typical 1 year warranty
Client owns and is responsible for maintaining equipment
9EMaaS – Energy Management as a Service
•
•
•
•
Supplier places equipment
No capex or upfront cost
Supplier maintains equipment
Built‐in “coaching” relationship ‐ supplier partners with client
Copyright Small Box Energy, LLC 2015
Summary: 3 Step “best practices”
1. Every solution needs PEOPLE
•
•
•
Incentivize managers and staff, make it a game
Involve the entire team, make consumption visible
Reward good saving behavior and results
2. Work with experts, DIY helps but does not achieve the same results
•
•
•
Take advantage of proven technology with integration throughout the restaurant
Learn from and partner with those who do it EVERYDAY
Make consumption visible in the restaurant
3. Make energy savings a priority!
•
•
•
Treat every dollar wasted as if someone took it right out of your cash register
Measure it so you can manage it
Show Electricity as a line item on your P & L
Copyright Small box Energy, LLC 2015
Source: energystar.com
EMS Economics @ 10% Savings
EMS: BRFA Next Steps
• Evaluate Vendors
• Test in 3‐5 IHOPS
– Need Volunteers
• Conduct Financial Analysis
• Establish BRFA Preferred Vendor(s) Utility Rate Management
• Utility bill audits
• Electricity‐ “peak demand penalty”
• Natural Gas / Electricity rate contracting
– Brad Lewis, CreativEnergy
Opportunity To Reduce Energy Costs
Brad Lewis/Gary Clemens/Greg Lewis
Tel: 913-498-8795
Fax: 866-496-0230
e-mail: [email protected]
Electric and Gas Competitive Opportunities
ME
MT
NY
MI
PA
CA
CO
NM
IL IN OH
KS
KY
VA
MA
RI
NJ
CT
DE
MD DC
OK
GA
TX
FL
Gas
Electric
Ele/Gas
IHOP Customers
IHOP
NAME
IHOP
NAME
AIG
AK Sal Inc
BRI JIL
Camgro Enterprise
Clamore
Douglas H. Gerson
Farah Franchise
Gaetee
Glen West Enterprises
Haidar Inc
Hakim
Halmony
Hanna Enterprises
Hotcakes
Hsiung
IHOP LLC
Knudson
Lachmont Pancake
MR. Stax
OC Midwest
Kishan Patel
Sal Janmohammed
Russ Chiandusse
Camille Gnolfo
David Reller
Doug Gerson
Kai Farah
GeorgeEbinger
Kurt Connell
Moussa Haidar
Ernie Law
Corey Bain
H. Keryakou
Evan Rosenburg
Chris Hsiung
Martha Deere
Cheryl Hussey
Peter DeGast
Terry Case
Michael Ruben
Peak Restaurants
Peasah Corp
Prof Rest Grp
R&M
R.R Ventures
Raheem LLC
Richies
Ristich & Ristich
River Road
RMLS
Ruben Rest
Sanrod Restaurants Inc
South Carolina Inc
Southern Rest Mgmt
SRL Enterprises
Sunshine Restaurants
Tripoli Inc
Trout Inc
Ty Pancakes
Wilhelm Rest Group
Robert Tomlinson
Jose Ruiz
Lisa Ami
Richard Miano
Tom Throm
Karim Bennouna
Bern Dejesus
Rose Ristich
Dan Campbell
Sari Hall
Mike Ruben
Jose Rodirguez
John Burke
Joe Scripture
Stephen Lee
John Salvaggio
Hussein Farhat
Jim Trout
Elizabeth TY
Rose Kemmerer
Natural Gas
Long-Run Cost
For How Long?