00:00:00:00 - 00:00:03:24
Rob Napoli
The restaurant is four walls, right? But there's that fifth wall, which is the technology space
00:00:04:01 - 00:00:21:20
Tom Rutledge
Your data is literally everywhere. So looking at good data, timely data, using technology to make decisions, everybody sells everything and trying to figure out what actually works, what keeps this a human experience? That is definitely where I've spent all my time.
00:00:22:00 - 00:00:32:03
Rob Napoli
There's two generations of people. There's the digital natives who are always on their phone and love it. And then there's still that you want that old school. And knowing when to use that QR code, I think is super important.
00:00:32:08 - 00:00:53:02
Tom Rutledge
Different menus can tell you so many things about the restaurant. I think the physical menu in the restaurant, regardless of how digital I can get, there's so much about a menu that I think is part of the guest experience. I think when you're dealing with fast casual, airports, kiosk and QR codes are going to maybe be the only thing that's available not to disturb you
00:00:53:04 - 00:01:01:08
Rob Napoli
Food in such a passion. There's so many moving parts of restaurant, from staff and overhead to technology to the cost of goods. How do you manage all of that?
00:01:01:11 - 00:01:23:14
Tom Rutledge
For me, it's can you explain your restaurant in a sense? What is your vision I don't understand. What is your menu going to mean they spend? Does your idea have financial literacy? That's going to mean you can actually make happen what you want to have.
00:01:23:16 - 00:01:47:13
Rob Napoli
Hey, how I do and we are back for another episode of hospitable. Hospitable is a podcast where we talk about how to make technology more human. And today, excited to have Tom Rutledge on our podcast. Tom is the owner and managing partner of RDMS Group, and he blends his culinary training, operational finesse and financial acumen to craft extraordinary dining experiences.
00:01:47:13 - 00:02:05:24
Rob Napoli
He's had a over a 20 year journey in the restaurant industry, and has mastery of restaurant technology, financial acuity, and perceptive grasp of customer trends that really have him as an expert on strategies for success in this ever evolving industry. So, Tom, welcome to the show, my friend.
00:02:06:01 - 00:02:07:15
Tom Rutledge
Yeah, thanks for having me.
00:02:07:17 - 00:02:30:19
Rob Napoli
Yeah, excited to have this conversation. I know we had a little, you know, pre-show, conversation and chit chat and, while we are also troubleshooting tech. So excited to, be rocking and rolling now. And so, Tom, you know, we met, I guess a couple months back. And, you know, I know that you did a podcast on, telling stories through data.
00:02:30:21 - 00:02:50:23
Rob Napoli
A friend of mine, Shawn Walchef, on his podcast, Digital Hospitality. And that was one that really piqued my interest and really was excited to get me, to talk to you today. So excited to have you, on board. And, you know, you've been in the restaurant industry and we're talking about pre show. You know, the restaurant is four walls right.
00:02:50:23 - 00:03:19:14
Rob Napoli
But there's that fifth wall which is the technology space. And you've been around this industry for a long time before we dive into the meat potatoes. You know what is the what are some of the key lessons that you've learned? You know, operating in restaurants, throughout your journey? And what are the things that really made you want to take a broader view and look at the technology and financial acuity, because RDMS is not just, a consultancy, you know, it's heavily focused around the accounting side and technology and really creating full on experiences.
00:03:19:14 - 00:03:33:09
Rob Napoli
So how did you go from being a restaurant tour and the lessons and the things that, like said, you know, I love running restaurants, but I want to I want to take a broader scope and really see how to make this, a bigger thing.
00:03:33:11 - 00:03:53:11
Tom Rutledge
Yeah. You know, the restaurant space is amazing and terrible and fun and awful and all those fun things all at the same time for a lot of reasons. And, you know, I come from an analytic. My personality is one of analytics. It's just kind of who I am as a baseline. I was in finance before I went to culinary school very briefly.
00:03:53:13 - 00:04:27:06
Tom Rutledge
Culinary school was me being like, there's got to be more to life than what I think I'm supposed to do. And as soon as I got into the restaurant space, it became so clear that it was a people business, which it remains as such. And the other side was it's a passion industry, often fueled by people who are artistic and creative and have this intense, almost monastic pursuit of something a lot of times, or on the exact opposite, fell into it because it's just the way life took them.
00:04:27:06 - 00:04:47:18
Tom Rutledge
And, you know, it's this really weird dichotomy of how different people come to the game. But every decision was driven mostly from passion, mostly from the heart or the gut, and it became pretty obvious to me when I got into kitchens and started talking about like, why are we using that it seems expensive? What is the food cost on that?
00:04:47:18 - 00:05:12:23
Tom Rutledge
People are like, those aren't questions we ask around here. And it was like, well, they should be right. Like, this is there's things about how do we stay open next year. What this is, you hear the horror stories of how often they close or the turnover rates or, you know, the long litany of things that plague the restaurant business and historically, it was harder to get information from the restaurant game.
00:05:13:04 - 00:05:43:02
Tom Rutledge
What did we sell? How much of it are we selling? You go back to the diners with the wheels and the paper tickets. I mean, good luck compiling information off of that, right? And the advent of how much data such a small industry, such a small concept of an industry. When you break down what a restaurant, it's your manufacturing, your sales, your marketing, your legal, your HR, you as a manager and owner or managers/owner, you're wearing every hat that every small business has.
00:05:43:05 - 00:06:04:11
Tom Rutledge
This isn't an uncommon story for small business, but you're dealing with margins that range in like on average in the 1 to 5%. That's such a small margin of error that can lead to catastrophic failure. And whether it was in the kitchen, whether it was in the front of house when I transitioned and realized I'm not the next Thomas Keller, I'm my skill sets.
00:06:04:11 - 00:06:26:04
Tom Rutledge
Not that that's this isn't who I am. Getting people to realize that you have to look at everything at the right time, in the right way, and you know, we try to make it so people don't swallow the elephant, but they do using the things that are out there. And as we get into this technology conversation, I think that anybody who runs a restaurant will know this.
00:06:26:06 - 00:06:52:16
Tom Rutledge
Nothing is consolidated. Your data is literally everywhere. So looking at good data, timely data, using technology to make decisions. What technology? It seems like everybody has a crackpot idea and everybody's selling something and everybody promises you it'll do everything. And then you kind of have to be like, well, do I need a point of sale that can claim to do X, Y, and Z?
00:06:52:16 - 00:07:26:20
Tom Rutledge
Or do I need a social media platform that can claim to do my accounting? Is that really what they're capable of doing? Or can this you know, everybody sells everything and trying to figure out what actually works, what keeps this a human experience, right? What keeps people wanting to come back to your restaurant? That is definitely where I've spent all my time, because I feel as though this industry can get overly saturated with ideas, but not necessarily execution when it comes to technology in particular.
00:07:26:22 - 00:07:38:18
Rob Napoli
Wow. I mean, I love that you kind of share that, but there's a lot to kind of pull for a lot of that. You know, it's funny, I just finished reading the book Unreasonable Hospitality by Will Guidara I love that book
00:07:38:20 - 00:07:41:03
Tom Rutledge
Yeah, and it's on my desk.
00:07:41:05 - 00:08:06:21
Rob Napoli
It was an amazing, read and kind of eye opening in a sense of there are so many practical takeaways now working in hospitality. Now, when I was a kid and I was starting, you know, my dad was a manager of all you can eat pizza buffet and I that's why I started working and, you know, back, in when you were doing a lot of the manual books right before all this technology or thinking over dating myself a little bit two decades ago.
00:08:06:21 - 00:08:32:11
Rob Napoli
Right. And, and so I think that's a really cool thing is you've kind of gone through that experience, right? And looking at it and seeing it at each level where the restaurant industry has gone and it is, food is such a passion, right? It's experience. And, you know, when you go to a restaurant, whether it's a quick service or, super fancy place, you're going for whatever that experience is, maybe that you want a good meal quickly and cheaply.
00:08:32:11 - 00:08:45:03
Rob Napoli
It could be that you want a full on dining experience. It could be that you want to feel like you're eating at home, but you don't have to cook, right? We all know those restaurants. Like if you ask any person, what's one restaurant you go to that makes you feel like you're at home? Everyone has that one restaurant.
00:08:45:03 - 00:09:03:10
Rob Napoli
I know mine's Ryan's Pizza shop in Kansas City like that. I always feel like home, whenever you went there. And it's just like that place. And you have those seen And so it's cool to see how you've kind of worked through that whole of owning restaurants, being restaurateur, from being in the kitchen to front of house to owning and operating to, this bigger picture.
00:09:03:10 - 00:09:14:00
Rob Napoli
And if you look at it, it is such a unique thing because there's so many moving parts, a restaurant from staff and overhead to technology to the cost of goods, right food.
00:09:14:04 - 00:09:17:01
Tom Rutledge
Incredible Yeah, it really is.
00:09:17:03 - 00:09:32:19
Rob Napoli
And you can only imagine somebody who is opening a restaurant. How do you how do you manage all of that? How do you keep all that in your head? All right. This is what I want to serve. This is I want the look and feel. This is how I want the experience. So, you know, as you consult on these things, and we'll get into the technology piece.
00:09:32:19 - 00:09:46:15
Rob Napoli
But when you actually talking with restaurant groups, like where do you start? Is it starting from why did you start in the look and feel as it's starting from goals and revenue? Like where do you start when you get in so group and start having these conversations.
00:09:46:17 - 00:10:14:18
Tom Rutledge
Yeah. And I mean whether it's consulting our own projects, we just opened a restaurant a couple of weeks ago. And, you know, we signed the lease a year ago. And I think there's a few main takeaways. And for me, it's can you explain your restaurant in a sentence? I think a lot of people, when they want to open a restaurant, you ask them what kind of restaurant they're opening and you end up with this conversation that's like, we're going to be Mediterranean with a Lebanese thing that's going to be partially vegan and this and that and this and that.
00:10:14:18 - 00:10:32:22
Tom Rutledge
And then you're like, what is your vision I don't understand your vision. Right? And then immediately when you can say what you're going to be, I'm going to be a red sauce joint that has California sensibilities. Put it to me, that's a sentence I can take that, you know what I mean? Like, we're going to be a delivery based fried chicken concept.
00:10:33:00 - 00:10:52:21
Tom Rutledge
Great. We know who we are. To me, the next concept is you brought this up and I go by average check. How much is the goal of the average person who's coming in and what is your menu going to mean they spent right? So are you going to be under 20 bucks. So you're going to be 20 to 30 or you're going to be 30 to 45, or are you going to be north of 100?
00:10:52:21 - 00:11:11:01
Tom Rutledge
Like, what are you hoping to be? And I to me, average check is your identity. So a lot of what we you know, just bringing this back to technology, we want to make sure that we're hitting those goals. So what I'm trying to ascertain is from an average check, you mentioned it. If you're McDonald's, your average check. I mean, once upon a time it was under $10.
00:11:11:01 - 00:11:30:15
Tom Rutledge
I don't it's not true anymore. But let's just use the state ourselves and go back in time. You know, you're I jokingly refer to that like you're a slumlord, you're going to go after plastic chairs and disposable things, and the ambiance isn't as big of a deal. You move north of 20 bucks, now you're getting into a family kind of thing and you're 20 bucks ahead.
00:11:30:15 - 00:11:42:00
Tom Rutledge
And that's your average check. You get north of 40/50, you're entering a tough space. I mean, I'm in California, so for the numbers I'm giving to anybody who's listening, I'm biased to one of the most expensive places.
00:11:42:00 - 00:11:44:11
Rob Napoli
In the United States. I'm in New York City, so.
00:11:44:13 - 00:11:45:16
Tom Rutledge
You get the.
00:11:45:18 - 00:11:46:10
Rob Napoli
Same. But for the.
00:11:46:12 - 00:12:04:16
Tom Rutledge
Apples to apples, right. So but it's like, okay, if you're a 40 to 50, you're going to be your service is going to be compared to people that are $100. Right. And your food quality is going to be compared to $100, but you're not thinking you're that. So to me, average check drives. Who are you? It's your identity.
00:12:04:18 - 00:12:18:00
Tom Rutledge
And a lot of what you decide from that point on is where we take the average check and go, well, how many seats do you have, how many covers you're going to do, how many times you think you're going to turn it? If you're in New York, you could get 3 to 4 turns. If you're in San Francisco, you can get max 2
00:12:18:03 - 00:12:39:22
Tom Rutledge
We just don't dine out late here. So now we can start to get a picture of, hey, based on your plan and how many people you can have, we can forecast you're going to do one and a half to 2 million, or you're going to do three and a half to 4 million. Is that reasonable? So to us it starts with does your idea have financial literacy.
00:12:39:22 - 00:13:00:09
Tom Rutledge
That's going to mean you can actually make happen what you want to happen. If your lease is going to be 20% of your monthly revenue, you're dead before you open, right? So those are kind of first steps. The decisions like then come with that is like, oh, you're going to spend $40 on a plate for a place that's serving $15 or, you know, main entrees.
00:13:00:09 - 00:13:19:05
Tom Rutledge
That's probably not a good idea. Oh, you're going to spend you're going to serve paper boats on something that's you're trying to charge a $38 thing for. That's also probably not going to work. So the when it comes to an opening in particular, how much can you spend on branding? How can you afford the PR budget that you need to have?
00:13:19:05 - 00:13:40:13
Tom Rutledge
All of that falls out of those early conversations, right? Yeah. Because most of this industry, the issue isn't the problem. When the door is open and you're operating, you might be in a place where you can make it. But if you just took out $800,000 worth of debt and you can't make those interest in principal payments, you're dead in the water.
00:13:40:13 - 00:14:07:09
Tom Rutledge
So you have to be within a buildout budget that can actually be written down. I know I'm speaking to finance initially, but yeah, I think most restaurants don't do the legwork to figure all of those levers out that come together, because once you get to opening, it is a different game. There's kind of a pre-opening, a first 2 to 3 months of opening and then the ongoing operation, and you have to kind of break out of restaurants, life cycle into those parts.
00:14:07:11 - 00:14:30:18
Rob Napoli
Yeah. I think a couple things that you brought up are interesting and I never thought of it this way, but that $40 to $50 a plate and this is also kind of sliding scale, right. Depending on, you know, where you're coming in as, as the diner that that $40 to $50 a plate is,being looked at similar to $100 and $120 a plate, which is a very different kind of level of service that you expected.
00:14:30:18 - 00:14:46:23
Rob Napoli
And dining experience. And the fact that those kind of fallen in similar space is really interesting. And the other thing that you brought up that, you know, I've always wondered about, because, you know, I grew up in the Midwest where we had a lot of bigger restaurants, which make you full on the weekends and like certain events and things.
00:14:47:00 - 00:15:05:06
Rob Napoli
But if you go in there and off time, it feels really weird because you're this big restaurant with very few people versus that I moved to, you know, I was living in Milan, Italy and New York, where you're actually smaller, very tight, compact, and thinking about that turnover and then, you know, you think like Italians, you know, they and food is a religion, right?
00:15:05:07 - 00:15:06:12
Tom Rutledge
You consider you can sit for two hours
00:15:06:16 - 00:15:31:14
Rob Napoli
Two hours, So you don't have a chance to turn over tables like you do in the States. And so thinking about those things is really intriguing and interesting and have honestly, you kind of forget to think about that and location and, you know, different parts of the country where you eat out more like in New York City, where, I mean, I'm lucky if I cook once a week to be honest.
00:15:31:16 - 00:15:50:05
Rob Napoli
I know that's great. But, you know, it's different, you know, by the time you get home. One of the things last thing you want to do is spend an hour cooking or even 20, 30 minutes. So it's really unique to think about that from the restaurant space in just the first part of it. But then you brought up this whole idea of the average check size, which I find extremely interesting.
00:15:50:07 - 00:15:58:15
Rob Napoli
Because we all know that we've gone to those diners or restaurants where you look at that menu and you are like, man, you're doing too much. Wow. Yeah. It's like 50 items on the menu. And yeah.
00:15:58:15 - 00:16:16:11
Tom Rutledge
Like, I grew up in new Jersey, in New York. So I remember like at three in the morning, if you wanted a lasagna next to a Greek salad, next to a hot dog next to pancakes, that was all totally possible. You know what I mean? So. But to me, check average has become the guiding light of everything because people come to me and say, we're not fine dining.
00:16:16:12 - 00:16:43:19
Tom Rutledge
It's like, well, you're $42. So you know the guest perception. Are you really not fine dining as far as the guest is concerned? And don't get me wrong, it's a sliding scale. If you're enticing people to get a second drink or to throw on dessert because it all looks really good, but you have a really approachable mid price point where somebody can come in and get out for $25, or they can treat themselves and make that check, climb and climb and climb you.
00:16:43:21 - 00:17:09:14
Tom Rutledge
You have to have a solid understanding. So again this is where people are like oh I use this point of sale versus that point is if I can, it doesn't really matter. What matters is how much are you looking at what that technology is bringing to the table. Like to me, product mix, what you sell and how you sell it at our restaurant right now, I have an amazing group of people running that place, and our pizza station feel super overwhelmed.
00:17:09:14 - 00:17:26:12
Tom Rutledge
From top 5 to 7:00. Then you run the day and you're like, we sold 32 pizzas. Like, you know, like, I know emotionally it's draining. It's high pressure, it's intense. It's a very hot oven. We got three people on this line because we don't know how to keep up. And you break it down, you're like, we did that to sell 30 things.
00:17:26:14 - 00:17:44:07
Tom Rutledge
Like, yeah, you know, we sold just as many of this other dish, but no one's talking about it because that part of the kitchen's doing it quickly. Right. Like, yeah. So how are we going to approach that item? Do we have to change the price point? And you know, there's great cycle. A lot of what we're talking about is the human side is the psychology.
00:17:44:07 - 00:18:03:20
Tom Rutledge
So you make some assumptions, you make some guesses. And then you have to have ways to see if your assumptions and guesses are accurate or not. And then you have to. And I think this is the part that great restaurateurs understand intrinsically or have figured out over time and put thumb on it. You have to listen more than you have to, like, be a trendsetter.
00:18:03:21 - 00:18:22:01
Tom Rutledge
Oh, yeah. No one here wants salad and it's a steak and potato kind of place. Let's do more in that realm. No one's buying steak and potato. And this is a truly heavy, vegetable focused place. All right, well, let's get into the veggies. Right. Like that's where we have to spend our time. I think bar programs have the same thing.
00:18:22:01 - 00:18:47:09
Tom Rutledge
It's like we have this amazing or, diverse, super local, you know, cocktail program. I'm in California, we have our hands. We can I can throw a stone here in Sonoma and hit amazing producers of everything you can think of. But if everybody walking in the door says, I want a jack and Coke, and we have to take the time to educate them that we actually use a local sour mash bourbon that's not quite there.
00:18:47:09 - 00:19:08:04
Tom Rutledge
Like, I don't care. I don't want to spend $16 on that cocktail. Like, listen, pay attention if you're fully committed to getting that done and your goal is to educate people, bless you. I wish you the best of luck, but you're taking the hardest possible path. So is your check average there? Is your staff educated enough? What you know, what does the data tell you?
00:19:08:06 - 00:19:12:06
Tom Rutledge
What do the systems you've installed tell you that people want? Yeah.
00:19:12:06 - 00:19:27:05
Rob Napoli
So and I find that really interesting because depending on how you set up the vibe and look and feel and the menu does depend, there are some advice I go out and like, I just want like a whiskey Coke, like, well, whiskey and I don't want to pay for that top one. And there's certain bars that I go towards, like, I'm definitely going because I love whiskey.
00:19:27:05 - 00:19:28:21
Rob Napoli
I'm a huge whiskey aficionado.
00:19:28:21 - 00:19:44:19
Tom Rutledge
I trust you, your team knows what they're doing. The place looks great. The color scheme is good. I love how it vibes in here. I think you know more about cocktails than I do. So make me something cool versus you walk into a dive bar and you're like Jameson and Ginger because you probably can't mess that up, right?
00:19:44:19 - 00:20:02:01
Tom Rutledge
Like in all you have to know. And there's nothing wrong with the dive bar. There's nothing wrong with the Jameson & Ginger. Just who do you want to be? Yeah. And bringing that home, I think, is a lot of things. And it's 50%. Who do you want to be? And it's 50%. What does your clientele want you to be?
00:20:02:03 - 00:20:23:11
Tom Rutledge
Right. I have a location in Ghirardelli Square, and that's a tourist central location in San Francisco. Nobody locally thinks, where am I going to go for a great to Latin concept? Where's a great taco? It's literally going to be impossible for me to convince somebody to come to Ghirardelli Square to get a taco in San Francisco, considering where we are.
00:20:23:13 - 00:20:48:03
Tom Rutledge
Yeah, but any tourist going by, we make everything from scratch. We make all of our masa from scratch. We go an extra mile. If we looked at it from a pure business sense, do we need to? No I don't think our clientele is necessarily drawn to us because we make everything from scratch. I think we provide an experience that we have a low bar and we deliver higher, and that is part of our business model, right?
00:20:48:03 - 00:21:10:22
Tom Rutledge
Like low expectation below their might. Will we ever see them again? Probably not. But we have done very well by using that as our business model. We could default to just buying store bought tortillas and making our labor lower, but we feel we have a better opportunity doing what we're doing, and we have done that through a lot of technology and data analysis.
00:21:10:24 - 00:21:32:12
Rob Napoli
Yeah, that's super interesting because if you think about it, depending on where your restaurant is located, are you getting repeat customers and you're getting that long term value, the lifetime value of a customer by coming back in all right basis? Or is it very transient and now I think about this average check size. It was something that when I used to work on this pizza restaurant back in the day, it was like all you can eat pizza buffet.
00:21:32:14 - 00:21:54:22
Rob Napoli
And we knew as for $4.99 for all you can eat and there's pizza. There's a pasta bar, salad bar, what was amazing is we broke it down for somebody to out eat for $4.99 that eat 35 slices of pizza, there's not many people who would eat out, eat 35. I'll eat for $4.99. And it was a you think about it for $4.99 5 bucks and you can all you can eat.
00:21:54:23 - 00:22:12:03
Rob Napoli
You walk out of there happy every day. And it's and I never thought about that as you're like, bring up this concept of a I've never thought about that way. It's just like somewhere in the back of my mind is like, hey, you remember your dad telling you that if any way to out eat and that's not make money on a single customer, is that you, 35 slices.
00:22:12:09 - 00:22:17:16
Rob Napoli
Now, they're not New York slices. They're like smaller slices. Probably most people, but 35 slice of pizza.
00:22:17:18 - 00:22:42:19
Tom Rutledge
You also have there has been an engineering platform of what the expectation that $5 is going to get somebody. They're not, you know, expecting housemade Italian sausage with a local buffalo mozzarella and a 72 hour fermented dough situation. Right. So like if you did that and you change your price point, you'd have a completely different model, which is the fun part, I think, of this industry.
00:22:42:21 - 00:23:07:16
Tom Rutledge
Some people get very lucky and have a good feel for it. And others, you know, if your restaurant is currently struggling, you have to look at so many different data points. And I think that what I find fascinating, you know, we've been talking about the startup side of things. And then when you get into it, though, there's this toilet bowl swirl of bad decisions that tend to happen as restaurants struggle.
00:23:07:16 - 00:23:31:19
Tom Rutledge
We're not getting the sales. Should we lower the prices? Should we have less staff on the floor? We can't afford the staff and therefore our service suffers and we started buying cheaper ingredients and therefore our food quality slips. And what do people want? How do they want it and what do we do? So I think the classic move in the restaurants is often to just cut, cut, cut, cut, cut as opposed to analyze and reassess.
00:23:31:19 - 00:23:55:14
Tom Rutledge
I'll give you a couple examples. Using technology is kind of what we do. So we look at, you know, prime cost is in my opinion, and I'm just going to speak financially for a moment. But prime cost is the single most important number in the restaurant world. And a lot of technology that I focus on is and it could be schedule writing software, it could be what point is sale to use?
00:23:55:14 - 00:24:15:13
Tom Rutledge
It could be how often do we have manager meetings? What's included in line up? They all have to circle around prime cost goals. And prime cost is you take your total sales and you compare that to food costs, wine cost, beer cost, all of your cost of goods and your total labor. That's benefits that salary, that's hourly. That's the whole kit and caboodle.
00:24:15:15 - 00:24:36:17
Tom Rutledge
And you have to set up your budget based on that. An industry standard is 65%. So set another way. For every dollar somebody spends in your restaurant, they've spent $0.65 just on the things you've purchased to make the food and the drink and the labor to put it together. We haven't covered anything else if you're over 65%, you should focus on nothing but getting prime cost in line.
00:24:36:17 - 00:24:56:01
Tom Rutledge
So then the question is what do you have to focus on? That is a deep well and you have to focus on again, what's my average check? Am I getting enough turns? I have a couple tricks and I'll just kind of share some examples. I know that the easiest way to raise an average check and help, usually food cost isn't as good as beverage costs across the board.
00:24:56:01 - 00:25:13:21
Tom Rutledge
Just generically speaking. All of my menus are designed to drop drink up. So if you take the piece of paper, it looks like the beverage menu should be facing you. The logos up there looks pretty if you turn it over. The food menu also looks pretty, but the drink menus there and we even go then and say steps of service.
00:25:14:02 - 00:25:36:09
Tom Rutledge
Hey server, I want a drink order before an appetizer because if we get the bar to drop the drink and then the appetizer hits, you have a much better probability of getting the second drink before the entree, right? Yeah. So you have to engineer these steps of service. So now talking about a full service restaurant, if you're at a fast food place, you just if they didn't order a drink, ask if they want a drink right.
00:25:36:09 - 00:25:54:16
Tom Rutledge
Or sell the bundle, whatever it might be. But let's stick with full service. So we use polling software to attach to our point of sale so we can say, hey, I want a report that tells me what is the each server's average check and we rank it, and then we put it up on the board. My managers don't have to do a lot because technology is integrated.
00:25:54:18 - 00:26:20:00
Tom Rutledge
Running a report. Print the report every week and we post it and we go, hey, dinner servers, here's your average checks. You know, Tom, you're at 35, Steve, you're at 42. Rob you're at 46. Tom what are you doing? Right. Like, yeah, we need you to come up or I can't put you on the floor. And it's not it's not the you know, there's those classic movies out there, like waiting or welcome to my restaurant.
00:26:20:00 - 00:26:38:16
Tom Rutledge
Do you want the blue raspberry? It's not that. Right? It's like we have a great product. You should drink this product. Oh, you're getting this for your entree. You should drink this with your entree. Just giving the opportunity for the sale. That's step one, right? Deliver your average check. Analyze your average check. Move that in the right direction.
00:26:38:16 - 00:26:59:12
Tom Rutledge
See how your staff is organically staffing up. And then also look at your menu design when you know, the other side of technology is when we buy stuff, we scan that into software. That software says, by the way, avocados one up and cost by 40% this week. Yeah. In our manager meeting it's predetermined. We have one meeting a week that talks about sales forecasting and schedule writing.
00:26:59:18 - 00:27:17:19
Tom Rutledge
We have another meeting every week that talks about cost of goods and in the cost of goods meeting we go, hey, avocados are up 40%. We are a Latin concept. People don't even look at the menu and they just sit down and scream chips and guacamole because they assume we have. So when avocado goes through the roof, like we tell our servers, hey guys, avocado is really expensive.
00:27:17:19 - 00:27:34:21
Tom Rutledge
Sell the trio. It's got queso, salsa, and a much smaller portion of guacamole. So if they say chips and guac I want you to go, hey, we actually got this really cool trio. We do everything in house. The queso is amazing. Do you want to get that instead? One it increases the check average, but two, it puts less guac on the plate.
00:27:34:21 - 00:27:57:20
Tom Rutledge
So I'm having a food cost. So those are the places where and I'm just kind of throwing out some random examples. But yeah by using a point of sale that can be analyzed with good data and having a routine of what to look at and when to look at it, we can really move that prime cost. And you know, that location, my prime cost is like 58% more often than not.
00:27:57:20 - 00:28:15:04
Tom Rutledge
Like it's yeah, stellar. Right. So I think that's where a lot of operators, they just kind of go oh man our steaks selling great. It's like yeah but it's 33% food cost. Like you're never going to be making money if you're number one moving items so expensive like where's your value proposition in that area.
00:28:15:10 - 00:28:33:04
Rob Napoli
Yeah I love share that. And this is I think what's really interesting with all the data that you can collect from and I'm a sucker for like drinks that I drink when you also if you're drinking these too big and I have to scan it for too long like that is overwhelming, right. 100%. But I love that because I'm also the kind of person that I can't just have one.
00:28:33:06 - 00:28:40:15
Rob Napoli
Like, for me, if I get a drink, it's always good to have one to start and one during my meal. It's just feels wrong to like.
00:28:40:17 - 00:28:56:22
Tom Rutledge
So service has to be set up to kind of get you there too, right? If you if they ask you about your second drink when you're halfway through your entree, and they have been relatively slow to bring things to your table or ask you questions or unattended, you're going to be like, no, I'm not going to get a dessert, I'm just going to pay my bill.
00:28:56:22 - 00:29:13:12
Tom Rutledge
But if they got you, you know, you got this much left and you're still eating your appetizer and go, hey, did you want that glass of Nebbiolo to go with that whatever thing you got for it? Yes, I'm an open checkbook. I'm kind of like, you make me happy and I will just order things, you know what I mean?
00:29:13:14 - 00:29:24:24
Rob Napoli
It's really interesting because when I was in Italy, right, where the different level of service and they let you call them over, they didn't really come over. And so when I learned that I was the kind of guy that was like, I'd rather just because I know it's gonna take a while to get that next glass of wine.
00:29:24:24 - 00:29:37:03
Rob Napoli
I just saw a bottle, which for them is obviously a much better deal because they're bringing out a bottle. They probably have a better cost of the bottle per glass maybe. I mean, I don't know how you have it set up sometimes by glass is more expensive. Depends.
00:29:37:07 - 00:29:54:03
Tom Rutledge
Yeah. So the average is what you paid for the bottle. You sell the glass. So $50 bottles of $50 glass of wine. And usually because there's four servings in most bottles, the 750 milliliter you're going to go, hey, listen, this is $15 a glass, but if you buy the bottle, sell to you for 55. I'm giving you that $5 discount.
00:29:54:03 - 00:30:12:02
Tom Rutledge
So yeah, usually you want your wine cost at about 25% and your buy the glass at about 20 or excuse me, by the glass at 25 by the bottle 27. You know, if you're selling like $300 or $400 bottles of wine, you can't do the same thing. Yeah, you're going to give up, you know. So those tend to be in like the low 30s.
00:30:12:04 - 00:30:38:07
Tom Rutledge
But you know, benchmark analysis, how often are you looking at it. If the only time you know how you're doing, whether it's top line sales, labor percentages, product mix analysis, what you should buy, how much you should prep is at the end of the month. You are so far behind. I believe in some things being looked at daily and a lot of things being looked at weekly, but in sketchbooks and I think a lot of restaurant tours, you know, look, I've been there.
00:30:38:07 - 00:30:58:13
Tom Rutledge
So me, I'm there currently. It's like so one server called out because their boyfriend or girlfriend broke up with, the host quit because they can't. They don't want to work on Saturdays anymore. So maybe the kitchen just cut themselves really bad and need stitches. And I'm supposed to go look at how much avocados cost? Like, when am I going to fit that right?
00:30:58:13 - 00:31:27:09
Tom Rutledge
So I like I said, I have broken my world down into two days where we look at very specific metrics. And the most important thing for me is management shouldn't be compiling data, they should be using data. And to me that's where technology fits into this industry. The straw, because there's incredible operational tools. Your reservation systems these days should be able to tell you so many cool things, right?
00:31:27:09 - 00:31:52:15
Tom Rutledge
Like print a button. You know, table 42 has an anniversary and 46 has a nut allergy and yada yada. Like I remember back in the day pre shift and you'd get all your little chips even at the local restaurant. Don't forget table 42 has this and all that stuff that's now integrated into the point of sale. I love knowing that when Rob comes in, he's an IPA guy because he's come in six times and ordered 11 IPAs.
00:31:52:17 - 00:32:12:21
Tom Rutledge
I can not ever having served you before, but like, hey Rob, right, Rob, you want that IPA? And like you're like, this place is amazing. They're magicians. They know, I know, it's with technology, right? Yeah. And I will say, I think that the QR code has been overused in some cases and underused in other cases come winter time.
00:32:12:21 - 00:32:39:17
Tom Rutledge
For example, in one of my restaurants, I am in Gordo Square. I was talking about I have days where I have three people sit on my patio and then the sun comes out. I have 45 people who want to sit on my patio. We couldn't keep up staffing the right way. So what we decided was during certain months of the year, when we look at all of our information and we can't figure out cover counts, those patios, there's one person out there to help people, but the QR code takes the order.
00:32:39:23 - 00:32:56:03
Tom Rutledge
But inside it's full service no matter what. Yeah, so if someone's complaining about the quality of deck, they just hate the QR code. Come on inside. We'll take care of it. Right? Or hey, we got one guy on the floor where it used to be, 3 to 4 people to give adequate service, but then come busy season. It's full time.
00:32:56:03 - 00:33:13:03
Tom Rutledge
Full service, right? Yeah. We can standardize the flow. We know how much volume we're going to be doing. So I feel like that is a really interesting piece that people are kind of moving into. Yeah. Some people are like, well, I just need to cut my labor to nothing. So I'm just going to go QR codes everywhere.
00:33:13:05 - 00:33:23:08
Tom Rutledge
And then people maybe didn't like the user experience to be early on, especially during Covid. And it got a bad taste. And so I think it's really interesting how that's evolving too.
00:33:23:08 - 00:33:39:18
Rob Napoli
Yeah. I was actually like that was you kind of went to the next question is Vazquez. You brought this up a lot about the QR code. And I was just thinking at this, I think, you know, there's two generations of people, there's the digital natives who are always on their phone and love it. And then there's still that you want that old school.
00:33:39:18 - 00:33:54:10
Rob Napoli
And also when I go to a certain restaurant, if we're looking for a certain feel I want tactile menu where I can open it up and understand and do that thing. I think figuring out how to blend that. But like when I'm at the airport, I love now that I can order on a QR code, pay for my phone.
00:33:54:10 - 00:34:10:02
Rob Napoli
I don't have to wait. If I got to leave and finish quickly to go catch my flight, it's all done for me before the food even arrives so I can eat and go into like knowing when to use that and the QR codes. I think it's super important. And so then the next piece of that. You have a thought on that
00:34:10:05 - 00:34:25:24
Tom Rutledge
I was going to say too, I think menus aren't discussed. The physical menus aren't discussed because there's a lot of psychology and writing a menu. You know, they call it the Golden triangle where your eyes go top right, top left, middle. If you don't want to sell something, put it over here. If you want to sell the heck out of something, put it in a box.
00:34:25:24 - 00:34:45:00
Tom Rutledge
If you want to have some social media stuff. If you want to explain your concept. I think the physical menu in the restaurant, regardless of how digital it can get you lose something when you just give somebody their phone and they have to scroll and like, I guess I'll take that. I guess I'll take that even though I might have a picture, it might have super descriptions.
00:34:45:02 - 00:35:05:02
Tom Rutledge
I feel like the psychology of a menu, different menus can tell you so many things about the restaurant, right? How logos, how stylistic? What are they? Do? What's the quality of the paper or the paper color? What logos? What? There's so much about a menu that I think is part of the guest experience. Yeah, that like you said, I think the airport QR code makes total sense.
00:35:05:03 - 00:35:27:24
Tom Rutledge
I don't even love putting the QR code in my restaurant, except I can't have four people you had mentioned before. In the Midwest, you have these restaurants that might be 4 or 5 or 6000ft². How do you have how do you tell somebody that they have a 20 minute wait because you only have two servers on the floor, and they're looking at a cavernous, empty location like it's just yeah, you know, you still have to deal with the guest in that capacity.
00:35:27:24 - 00:35:56:02
Tom Rutledge
So I think it it has an interesting place. I still think at my core, 90% of the neighborhood, full service restaurants, it's a people game more than it is anything else. Yeah. And Full services is not formerly going anywhere. I think when you're dealing with fast casual, when you're dealing with counter service, when you're dealing with, airports, kiosks and QR codes are going to maybe be the only thing that's available in the not too distant future.
00:35:56:04 - 00:36:13:10
Rob Napoli
Yeah, I love that. I think that's really important to kind of understand and leverage that piece of technology, because we actually think about a restaurant and you start, you know, getting this technology piece. There's a point of sale, there's your reservation systems, there's, you know, data you need for accounting and the accounting for that. You have, there's your standard.
00:36:13:10 - 00:36:30:19
Tom Rutledge
There is whole BI tool that needs to exist. And that's probably the hardest piece to create too, is it data from one place to another. But then what that data is doing, how often do you look at it? What do you look at? Those. Those are the things that I think the restaurant business is still in the very early incubation stages.
00:36:30:21 - 00:36:53:01
Rob Napoli
Yeah. And I think, you know what? I think the average restaurant uses 5 to 7 different, people to run to run their restaurant. So when you look at that and you and you're talking with these restaurateurs and looking at it, how do you go about the audit process from a technology standpoint? And what is necessity versus accessory when you're looking at hitting the prime mark and understanding, you know, the data.
00:36:53:01 - 00:37:24:07
Tom Rutledge
Phenomenal question. It's a never ending pursuit is the short answer. I have the luxury of being that I own a restaurant specific accounting firm, that I must touch data in a lot of different places. So, I mean, if we just, I mean, off the top of my head, the things that I've looked at this morning prior to talking to you, two different point of sale systems, two different scheduling, writing systems, a cost of goods tool and my accounting software open table ready.
00:37:24:09 - 00:37:49:14
Tom Rutledge
Triple seat, I mean, Uber Eats, DoorDash and all the online platforms, order to integrate some things and yada yada. Yeah. I mean, not to mention the bank and the credit card system that it's that's just me today. So for me, I think it comes down to first and foremost, I don't think that you should just try to look at fancy dashboards for the sake of having a dashboard.
00:37:49:14 - 00:38:11:19
Tom Rutledge
I think you have to have a purpose of what you're looking at. I think that most people should find organizations that specialize in something and use them for what they specialize in. I can't tell you how many point of sale companies now claim to be inventory software programs that also claim to be schedule writing software programs that also claim to be social media posting, you know, and marketing programs.
00:38:11:19 - 00:38:31:24
Tom Rutledge
This is like you're not you can't payroll companies do payroll. Point of sale companies should be point of sale. And, you know, then get the data out of those good places and put it someplace that you can do something with it. Right. So to me, I have the good fortune to watch what other people sign up for and where it fails.
00:38:32:05 - 00:38:53:09
Tom Rutledge
Now, here's the other thing. When you're asking people for recommendations in the restaurant space, hey, what point of sale do you like? Oh, toast is terrible, I hate it. Okay, well, I love why do you hate it? Well, the integration was too hard. Well, yes, you're a restaurant person. You don't do database management for a living, right? You're not a database engineer.
00:38:53:09 - 00:39:13:18
Tom Rutledge
So I get it. It was hard when you did it. No one's going to do it any better, right? I like square, I dislike square, so getting feedback from people I think is like, okay, so you didn't actually put any time into doing the integration. You expected it to be done for you. That's not what they sold you and now you don't like it.
00:39:13:20 - 00:39:24:19
Tom Rutledge
I think a lot of it is trial and error. To answer your question a little bit more succinctly and doing a lot of peer review, I don't think restaurant tours talk to each other enough.
00:39:24:21 - 00:39:43:23
Rob Napoli
Yeah, I love that you share that because, you know, you mentioned a number of different systems and many of those are our partners of ours, right? Is we you know, we build integrations from POS to accounting and, you know, all the different the whole unification of data. And that's, you know, why we love this space is, you know, we built the data unification platform for a reason.
00:39:44:00 - 00:40:07:04
Rob Napoli
And I think that it's really great that you have all this data. And I know there's a, you know, if anyone has it, they should check out your data storytelling on Digital Hospitality with Shawn Walchef because data for data sake is useless unless you understand what you're looking at, how you're using it, and then fine tuning that data and understanding why you need that data, and what is the impact of that on your decision making process.
00:40:07:06 - 00:40:26:19
Rob Napoli
And it's really easy to get over analyzing of data and not looking at. And this is where I think you kind of start off with you know, the average check value. And that prime mark, right, is like those have to be home based, because all the data that we analyze is based on those things. And if you can find that kind of consistency then the data makes sense.
00:40:26:19 - 00:40:52:15
Rob Napoli
And then you can actually utilize data. And this is where I think it's really easy to get lost in data. And for us to restaurants do remember that the guest experience is what you want it to be, whether that is quick service or all digital or it's very high touch, high service. And then the day all the restaurant, the food gala the guest wants is to have a good meal and, you know, enjoy that experience.
00:40:52:17 - 00:40:56:09
Rob Napoli
Yeah. Regardless of anything else. Right.
00:40:56:11 - 00:41:16:14
Tom Rutledge
Does the guest see you? The way you see yourself, I think is another important comment. And the data can start to tell you that, right? Like, I want to open a fine dining Italian spot, but they're ordering 90% pizzas. I'm a pizza place, right? So like I can keep playing with some of this other fun stuff, but I'm a pizza place, so I better lean into being a pizza place.
00:41:16:15 - 00:41:34:03
Tom Rutledge
Yeah, and I think that's where the data really needs to drive. And then for people who are, you know, again, when do your customers come in? How are you writing your schedule? I deal with this a lot. And again, I'm going to go slightly back to the accounting because it relates to the operation. People like, oh, I just can't get labor in line.
00:41:34:03 - 00:41:58:23
Tom Rutledge
It's like, well, you do all of your sales between 5 and 7:00 and you phase nobody in your kitchen until 9:00. You don't need all these people for like start. You can find it 15 minutes at a time phase. Bring these people in 15 minutes later, cut these people 15 minutes early, a half hour earlier. Like use the information available to you to then make more achievable goals.
00:41:58:23 - 00:42:20:16
Tom Rutledge
It's very, very rare that you can pull one lever and fix all your problems. So if you're writing a schedule and you don't know when your guests are coming in and you're writing a schedule and you don't know what your sales forecast for the day is, what are you doing? So when you're trying to choose a labor scheduling tool, do they give you the ability to put in a forecast?
00:42:20:16 - 00:42:37:23
Tom Rutledge
Do they give you the ability to see how much it costs? Do they send you a report the next day that tells you what you scheduled versus the actual? To answer your question about using technology, I think you have to identify what am I hoping to get at? Like when I choose a scheduling platform, I want a decent UI that's not complicated for my managers to use.
00:42:37:23 - 00:42:56:10
Tom Rutledge
I want the staff to have an app so that they can see their schedule. I want the ability for people to request time off via that. But then from my end as an owner, I want to know what is my front of house percentage versus sales, my backer house percentage of sales. I want my managers to know if they're writing it to schedule.
00:42:56:12 - 00:43:11:20
Tom Rutledge
And the other thing is, I look at it with my team and go, guys, you need to be a 28% labor by the end of the week. I don't care if Mondays 98% what I care about is at the end of the week, we're where we are. Does the tool I'm giving you the technology I'm giving you doesn't help you get there.
00:43:11:20 - 00:43:14:06
Tom Rutledge
If it doesn't, I have to find something else.
00:43:14:08 - 00:43:35:19
Rob Napoli
Yeah, I think that's super interesting. And the fact that you can make data driven decisions on a day by day, week by week, month by month, with the right technology. And this is where understanding what the technology does and how to leverage it makes the most impact. Because the comment you made of does the guest see you as you see yourself?
00:43:35:21 - 00:43:54:20
Rob Napoli
Probably not. And you know, they see you as this thing and that's what they're there for the experience of. And whether you have, you know, one pos versus another pos, like as long as I can tap to pay, which I love, like I don't think I can pull up my credit sometimes. So when I go to like, nicer restaurants, I like to pull up my credit card and put it in the thing, like the whole thing, but like 99% time.
00:43:54:20 - 00:44:09:02
Rob Napoli
I just want to be able to walk up with the. And that's what I absolutely love, that nowadays that happens a lot of restaurants is that server taking your credit card, walking away, coming back to the fact they bring it over, that was something I saw in Europe way before I came here. It's like they come to your table and swipe it right there.
00:44:09:02 - 00:44:22:00
Rob Napoli
So you see it all happen, or you go to buy it by doing just tap. You know, sometimes I don't mind put my credit card. I love having a tab open. Sure. I love when they give me my card back so I don't forget the card somewhere. Like, I can't tell you how many times in college and post-college I have.
00:44:22:05 - 00:44:23:07
Tom Rutledge
The next morning.
00:44:23:08 - 00:44:27:20
Rob Napoli
Right open the next day, and they all felt that pain fully.
00:44:27:22 - 00:44:48:11
Tom Rutledge
And I think there's a couple ways to do so. Speaking more personally, like to I opened a restaurant in the suburbs here where I live, and we wanted to be a New York Italian, like my family's from Brooklyn, and it's a love letter to my grandmother. And it was New York Italian. And I'm walking the floor as we open this place and people like, I'm going to Italy next week.
00:44:48:13 - 00:45:10:22
Tom Rutledge
I'm like, cool, this is Brooklyn, right? Like this. Like, I'm not going for Rome, I'm going for Queens or Brooklyn. Like, this is a this is a red sauce joint. And so people weren't quite getting it. So PR and social media started making sure that that was like red sauce joint became a term. And our website got changed for the term.
00:45:10:22 - 00:45:27:11
Tom Rutledge
And the blurb on the menu got adjusted for the term and some of the interior design and some of our plating choices. And, you know, some of those things. So people started understanding that this wasn't like, you know, when I was in Italy, this isn't how it was made. Yes. And how my grandma made it. Which family's from Italy
00:45:27:11 - 00:45:44:10
Tom Rutledge
There's a big difference in what we're going for. So that little bit of education, but understanding, they're not understanding who we are, we had to adapt to say, do we become who they want us to be and try to just be Italian at this point or do we stick to our guns and push red sauce joint? Right. Yeah.
00:45:44:10 - 00:46:05:21
Tom Rutledge
So we done that by looking at the mix by changing the menu design, by going in and looking at the data and making sure that what we train the staff to do, that our cocktails or, you know, we now named our pizzas after Central Park and the Palisades Parkway. And like things that have a throwback to that. And, you know, we get cheeky with some of our things.
00:46:05:21 - 00:46:24:13
Tom Rutledge
So if we're doing that because we're hearing that they don't understand who we are. Yeah. So you have to change that. And our product mix is showing us that they are you know, they're getting the eggplant parm. They're getting the chicken parm pizza that we're starting to vibe a little bit more with some small tweaks as we're paying attention.
00:46:24:15 - 00:46:39:13
Tom Rutledge
Yeah. And people are making notes and reservations and open are like really look, I haven't had this since I moved from New York. Excited to come by, you know, things like that. So we can use these reports in this information to see that it's kind of starting to click.
00:46:39:15 - 00:47:15:03
Rob Napoli
Yeah, I love that. And I think for me, what's interesting and where I get it really kind of jazzed up is that you. When it's all the end of the day, the way you brand it, the way you leverage all that, it's all about how the guests get to see themselves when they sit down and how they feel when they leave, and the fact that they're getting that authentic experience, whether it's authentic Italian or authentic Brooklyn, in a different part of the country especially, you know, across the country, if you've you grew up in Brooklyn and, you know, moves across the way, like you get to get to kind of feel like there's a
00:47:15:03 - 00:47:31:02
Rob Napoli
couple of dive bars that I love in Brooklyn that are that are an ode to the Midwest. And it feels like you're walking to a bar in Kansas City or Iowa or Wisconsin. You're, you know, you walk in into that rustic wood and it's those things that just kind of take you to a different place. And having that ability, it makes my day better, right?
00:47:31:02 - 00:47:38:12
Rob Napoli
Because, you know, I love New York, I love this city, and that I just want to feel like I'm back home watching for 100% Busch Light, you know.
00:47:38:18 - 00:48:04:05
Tom Rutledge
And as a restaurant to how do you make all that happen. And then the other interesting piece is like, okay, someone said the eggplant is too expensive, but everybody else is saying, oh, it's perfect. So kind of diving in, like, I'll be honest with you, if we're going to talk about technology in the industry space, we have to talk about things everyone hates, the yelp's of the world and all the other things as restaurant tours where it's like, you know, you love when people write something great about you.
00:48:04:05 - 00:48:20:12
Tom Rutledge
And then you look at the one guy who writes the two star and you're like, that guy doesn't know what he's talking about. Well, if you start getting a lot of those, yeah, maybe they do know what they're talking about. What are they saying? How are we interacting with that technology to make that two star review guy come back and have a five star experience?
00:48:20:12 - 00:48:39:18
Tom Rutledge
And yeah, what about how we go about our day? Are we making the notes? Are we following up the right way? Are we looking at is our costume? You know, if I go to a place and I see that there's a wine that I know that elsewhere is $13 and they're charging $17, I'm immediately like, okay, this isn't a value proposition.
00:48:39:18 - 00:48:58:01
Tom Rutledge
They're clearly, you know, do they hope I ever come back? Is this a tourist trap? Is that their goal? Is that why they're doing, you know, so I think if you do things on purpose and you have reasons for it, your model can work out. There's no perfect answer for everybody. I think you just have to do things very deliberately in this industry, more so than ever before.
00:48:58:07 - 00:49:24:07
Tom Rutledge
Because the other thing we haven't talked about, especially in New York, where I live more than anywhere, our labor costs have never been higher. If you're in San Francisco, you're paying 401 K, you're paying health care benefits, you're paying minimum wages that are approaching $20 for every single person in the building. So when I 20 years ago, I was working in kitchens in San Francisco for free for six months, staging because I wanted to have the experience and get hired, that's full on illegal.
00:49:24:07 - 00:49:31:19
Tom Rutledge
It probably was back then, but nobody said it. So we're playing a completely different game these days.
00:49:31:21 - 00:49:54:10
Rob Napoli
Yeah that's I think that's, you know, so much to digest. But if you kind of go back to that, prime mark number you're talking about, I think you, you open up everything. And this is where the technology within the restaurant industry could be so beneficial and helpful and consistency. Right. If you get multiple bad reviews okay, how do we change that.
00:49:54:12 - 00:50:14:11
Rob Napoli
And I think the big piece that the subtext of all this, right, is whatever stack you choose to use, whether it's 3 or 7, it comes down to, you know, finding that that consistency value of what is what are you what are you seeing and really understanding what the root causes are not making quick decisions. Oh, my labor cost was high this day.
00:50:14:11 - 00:50:28:10
Rob Napoli
We need to cut it now. I need to be cut by the end of the week. Why was it high on that day? Oh, because, you know, we also saw sales were up because we were super busy. Or maybe it was super slow and we were expecting it to be busy for the Monday Night Football games. And you can kind of like take that and don't course correct right away.
00:50:28:10 - 00:50:50:20
Rob Napoli
It's like, look at that data, understand it and say, oh, okay, this makes sense. And looking at trends over time. And that's why I think data becomes really impactful with these different technology systems. Is that you can look at trends over time. One of the things that we see happen a lot, one of the most basic issues we have with the with the POS systems is that people forget to update their menu items, they forget to change all the mapping, right?
00:50:50:20 - 00:51:08:01
Rob Napoli
And our integrations. And it's something so simple that can cause a little bit of stress and confusion. And it's like taking that extra step to understand, hey, if we're going to make a change in the menu to all of our systems, get updated, is there a checklist for all the systems we upgraded so that we know that we're not having any issues on the floor when you're, you know, cashing somebody out and they look at their ticket weird or something didn't ring up properly.
00:51:08:01 - 00:51:21:19
Rob Napoli
And those are little things that you can just leverage and make a big difference. And if a little bit of an education on the back end can make the guest experience just so much cleaner, and you avoid some of those like, annoying things when you get your bill and it's not right, you know.
00:51:21:21 - 00:51:42:15
Tom Rutledge
100%, I think, 90% of restaurant and 100% of restaurants in this country, if they're not doing it now, if they have one meeting a week that looks at sales forecasting for this week, next week and the week after, and then a review of schedules for this week, next week and the week after. There's a lot of nuance to that, but just largely speaking it.
00:51:42:15 - 00:52:02:08
Tom Rutledge
That's a 20 minute meeting once a week where everybody involved in the management of a business comes together. They should all be done, should have your forecast done. Then everyone agrees and someone goes, hey, on Saturday there's actually a cruise coming we weren't aware of. We should change, you know, all that fun stuff. And then one day a week you're looking at your cost of goods, food, beer, wine, liquor, any beverage.
00:52:02:10 - 00:52:17:11
Tom Rutledge
And you're making, again, not rested. Avocados went up by 20%. Listen, there's nothing we can do about it. We should, you know okay. We're just going to have to write it. Or prices. Okay. Food costs can be a little high until it comes back down, but blah, blah, blah. You don't have to change it. Or like we did.
00:52:17:13 - 00:52:33:21
Tom Rutledge
Oh, cool. I'm not just going to raise prices. I'm going to I'm going to turn a nine ounce portion into a three ounce portion. But put two other things on there and turn that $13 chips and guac into the $19 trio like have the conversation. When's it going to get done? We'll have it done by Friday. Great.
00:52:33:23 - 00:52:52:03
Tom Rutledge
Then on Friday, confirm it can't stop. Right. So like just those are the things to me. Yeah. Literally today after this call we have I have my labor call on Wednesdays on one location. It's Tuesdays on another location. I have my cost of goods, on one location on Wednesdays, the other one's Thursday. Just because that's how it works out.
00:52:52:05 - 00:53:11:12
Tom Rutledge
And every Friday there's a 45 minute call set agenda. So my people are going to be like, how do you have free time for all these meetings? How do you afford not running sustainable prime cost to me is my biggest question for restaurant people. And if you're running a 55% prime cost, I'm done talking, you know, like, okay, yeah, you figured it out.
00:53:11:12 - 00:53:30:05
Tom Rutledge
But yeah, you know, and I do want to say this, I actually think there's one piece of technology that is a false claim in this industry that I think a lot of people spend a lot of time and money on, that. I don't think it works for most people, and that is inventory and cost of goods solutions. I think there are some that are very clever.
00:53:30:07 - 00:54:00:05
Tom Rutledge
I think if you have a constantly changing, somewhat seasonal menu, you're chasing a unicorn. And I think that the weekly meeting will have with the right tools, meaning the technology, for example, what you guys pull and what you place in different places. If you then look at the output of that information and you don't have somebody sitting behind a spreadsheet for three days putting something together for that 20 minute meeting, but instead the technology integrations allow you to print, the report will fundamentally change the name of the game.
00:54:00:07 - 00:54:18:02
Rob Napoli
Yeah, I love that. And I think you're 100% right. And this is where it comes back to that subtext and subtheme of this is that consistency. And just looking at the data and not making rash decisions and staying the course and understanding that prime crossed that prime number. And if you can just do that and stay consistent, the data will tell you what you need to know.
00:54:18:02 - 00:54:38:19
Rob Napoli
And if you do that on a regular, consistent data, regular, consistent basis, it's a game changer for the restaurant space. I love that. Tom, I could talk to you for another hour, but I know that you've got other meetings and whatnot, so I appreciate the time. The last question I want to ask you, you know, you were born in Brooklyn and grew up in the East Coast and move to the West Coast.
00:54:38:21 - 00:54:45:15
Rob Napoli
What's the one thing that you, generally miss about the East Coast? What's the one thing you're always Johnson for home on?
00:54:45:17 - 00:54:56:13
Tom Rutledge
I can answer that. So there's three things. Black and white cookies. A bacon, egg and cheese. Salt, pepper, ketchup and a Kaiser roll with butter and a cup of coffee.
00:54:56:15 - 00:55:19:17
Rob Napoli
I absolutely love all three of those. My additions are a bacon, egg and cheese salt, pepper, ketchup. Throw a little hot sauce on there and make a little spicy. And it is a game changer. My favorite. Whenever people come, I bring I work with a lot of Europeans. I come up with, you have to go to a random cart, get a bacon, egg and cheese, salt, pepper, ketchup and if you like spicy, add hot sauce on it and you'll be happy.
00:55:19:19 - 00:55:21:17
Tom Rutledge
I wake up dreaming of it every morning.
00:55:21:21 - 00:55:38:04
Rob Napoli
I mean, I stop, at the same coffee cart, like, you know, everyone goes to Starbucks and the every day I have my two coffee carts. I know the guys. I go ahead and get that. And that cup of coffee in that blue cup, and it's just like my favorite New York thing. And it's something that I didn't realize how much I love until I got here.
00:55:38:04 - 00:55:40:23
Rob Napoli
And yeah, I've been here for nine years. It's just it's amazing.
00:55:41:00 - 00:55:56:10
Tom Rutledge
It's literally DNA altering because I will tell you, in California, I can go get a house made brioche with a lovely rendered pancetta and a farm poached egg, and it's just like, thank you. This is beautiful. But this isn't the bacon, egg and cheese.
00:55:56:12 - 00:56:06:13
Rob Napoli
Yeah, I love it. Tom, I appreciate you. Thank you so much for the time today. Where can our listeners find you if they want to get in touch or learn more about what you're doing? How do they, find you?
00:56:06:15 - 00:56:27:10
Tom Rutledge
Yeah. Appreciate that. My website is definitely the best. RDMS group.com. There's a form there to fill out or my calendar is actually just there for the public to sign up. We do fully outsource accounting or we do phone calls. You know, we're all about continuing education and conversation in the industry.
00:56:27:12 - 00:56:46:08
Rob Napoli
Love it. Well, I'll make sure that the RDMS group.com is, in the, body of this, podcast, all you gotta do is click the show notes and click on the email address. That'll be right there for you. Tom, thank you so much again for joining. And for those listeners out there, it's been another episode of hospitable, make sure you be a tier one like subscribe.
00:56:46:12 - 00:56:52:07
Rob Napoli
You do all those things, and if you think, you should be a guest on the show, let us know. Appreciate you all. Have a wonderful day.