Charlotte, North Carolina-based Raydal Hospitality Group was in a bind. The company, which launched in 2010 when founder and CEO Dalton Espaillat opened the first Three Amigos Mexican Kitchen & Cantina, was growing but didn’t have the back-office systems it needed to support its expansion from a half dozen restaurants to the 23 across four concepts it has today. None of the company’s locations were taking inventory. The only cost data leadership had came from purchasing and vendor invoices and was often delayed. Generating anything beyond a profit and loss statement for the bank was nearly impossible.
Today, with Restaurant365, things are far different across the entire company, which in addition to Three Amigos, includes 19 fast-casual Sabor Latin Street Grills, a burgeoning ramen concept called Saru, and a slimmed-down food hall version of Sabor called La Caseta. CFO Edgar Hernandez no longer spends his days buried in QuickBooks and Microsoft Excel. Regular inventory counts across all locations feed into weekly P&Ls. In addition to closely monitoring and controlling food and labor costs, actual versus theoretical reporting has helped Raydal do more than identify problems. It empowered leaders to pinpoint top managers and use their leadership style and expertise to transform all locations into top performers.
Over the past two years, Raydal has reduced its prime cost by four percentage points, and Restaurant365 has played a critical role in helping the company identify strong operators and managers, providing critical data to negotiate with vendors, and identifying labor and food cost issues in underperforming stores.
“Having all of the information in one system makes a world of difference,” Hernandez said. “Today, we’re able to produce a weekly flash P&L on Tuesdays that everybody can look at, feel comfortable with, and use to make decisions that drive the bottom line.”
Hernandez joined Raydal on the operations side in 2016 and experienced first-hand the struggle with limited technology that didn’t provide tools to drive better experiences and margins. He moved to the back office in 2019 and immediately began searching for a technology platform to streamline management and drive growth. At the time, Raydal struggled with three key issues. First, the company’s performance was inefficiently managed with a combination of spreadsheets and limited reports from their point of sale (POS) system. Second, they needed a system to handle the growing company’s inventory and track its complex list of dishes and ingredients and their nearly unlimited combination. The final challenge was a lack of reporting to help store-level managers drive margins.
The Devil & Dollars in the Details
Fast forward four years and not only does Raydal have data, it’s using it to dynamically save on food costs by controlling waste and ordering while reliably managing recent years’ wildly unstable prices and supplies.
“When the price of something like chicken is going up, I can see that in a minute, myself and others can get automatic alerts every time the price goes above a certain level, and for us, that’s invaluable,” Hernandez said.
While restaurants can’t control prices, when wholesale numbers start climbing, they can double down on training to limit waste as much as possible while ensuring team members are portioning and serving correctly. Having the data available daily, particularly the actual versus theoretical (AvT) report, helps Raydal know where it’s at in relationship to its goals and helps drive companywide accountability that ultimately leads to growing margins.
“Those first four or five columns on the AvT report tell you how much to prep and how much to order, and that’s half of the game in a restaurant,” Hernandez added.
When one location’s food cost is running higher than average, leadership can dig into the numbers to find out, for example, that a manager ordered 100 pounds of ground beef when the recipe only called for 60. Then, the team can have productive conversations about why the order increased, share the numbers behind projections and the negative impacts of overordering, and ultimately drive tighter processes to bring costs back under control.
Having operating and inventory data to drive lower costs has only been one piece of Raydal’s success. The company didn’t lay off any staff during the pandemic, although there was some attrition. That experience, and the shift to takeout and delivery, forced the company to focus on efficiency, which has since helped Raydal open five new locations with the same team of 250. The changes included a significant reduction in front-of-house staff positions, and operational efficiency increases to offer guests better food faster and accommodate fast-growing takeout and delivery operations.
“R365 Smart Labor helped us enforce what we realized, which was that we could sell the same amount of food with half the staff in some location, which we translated into labor metrics,” Hernandez said. “That exercise allowed us to figure out how to train our staff and set up things differently on the line to make it all work without cutting anyone.”
With data-driven efficiency at each location and across the entire company and the tools to get there, Hernandez said leaders can effectively plan what comes next. That includes potentially transforming some existing Sabor locations into newer concepts due to market saturation, franchising Sabor for expansion beyond the Charlotte market, and developing new concepts.
Raydal may also bring the back-office expertise it’s developed into outside concepts to further drive the company’s growth while opening a commissary kitchen.
“We’ll be handling the commissary kitchen with R365 and project saving about two percent of sales once that’s up and running,” Hernandez said. “That will not only help take on the big catering orders that will drive a lot of revenue we can’t take on now, but will hopefully allow us to consolidate the business as we use more Restaurant365 in more locations.”
By the end of this year, the plan is for all locations for all concepts to be using Restaurant365 for scheduling and labor management, in addition to using R365’s manager log to streamline and centralize shift-related tasks and closing checklists across all facets of the business.