Flipping the odds Featured

8:00pm EDT May 16, 2006
When Keith Sirois became president and CEO of Checkers Drive-In Restaurants Inc., he faced a daunting challenge: He had to find a way to make the company’s restaurants an attractive venture for franchisees in light of the company’s recent financial struggles.

Sirois knew he had to focus his attention on the company’s operating systems if he was going to present Checkers as the opportunity that he knew it was — and improving the operating systems would improve the bottom line.

“While the company was struggling, it was obvious there were many positive attributes to build upon,” says Sirois, who served as vice president of franchise operations before becoming CEO. “The most important thing we’ve had to do to get it done was to develop a culture where everyone was working toward the same thing — both franchisees and employees.”

Sirois and his team of executives had to get the company back on the path of great operational execution if they were going to continue to increase revenue and thus attract franchisees. With franchises comprising 604 of the company’s 804 locations (under both the Checkers and Rally’s Hamburgers brands), they are a key component to continuing growth.

So they developed a plan to improve training, communication and technology to both bolster Checkers/Rally’s revenue and its reputation.

On the go
The company’s unique double drive-thru format and 99-cent burgers were no longer enough to keep pace with the competition.

“We’ve performed very strongly, but the whole industry has gotten quicker at the drive-thru over the last several years, and as we’ve gotten quicker, we’ve gotten weaker in the accuracy department,” says Sirois. “Our customers continued to tell us that they loved our food and they loved our delivery system — the double drive-thru — but what they didn’t like about us was our inconsistency and their inability to rely on us to do it right more often than not. It was simply, in my mind, getting back in and addressing the basics and providing the consumer with what they relied on us for.”

The proposed solution was a Guest Obsessed training program. The GO program is driven toward achieving excellent speed while maintaining a high level of order accuracy and providing guests with the best possible experience at all of Checkers/Rally’s restaurants in 26 states and the District of Columbia.

A cornerstone of the GO program is to reinforce basic operating standards, such as service with a smile, that are absent in so many quick-service restaurants today.

“We talk a lot about making eye contact with the customer when they’re at the window, that there’s a very limited period of time where we interact with the guest, and we need to make sure we take full advantage by making eye contact, smiling, thanking people,” says Sirois.

It’s the little things that often make a difference and keep customers coming back — which is why part of the training involves standing outside by the ordering speaker to hear the difference between short, curt replies and what Sirois calls “smiling through the speaker.”

The second part of the program gives employees a reason to strive for excellence. Sirois believes strongly in incentives and acknowledgment to reward good work.

Checkers/Rally’s makes use of a third-party national shopper program at every restaurant six to eight times a year. He also has internal employees doing secret shopping more often.

“The third party goes to the restaurant, and they order their food according to guidelines and have their drive-thru experience,” says Sirois. “And if that restaurant meets ... specific criteria, that shopper immediately pulls over, parks the car, goes to the restaurant and awards that crew some type of an award depending on what part of the program we’re in at that point.

“It may be ‘Guest Obsessed’ pins. It may be gift cards. It may be any number of things. It may be shirts — but some type of immediate recognition that they demonstrated their Guest Obsessed abilities.”

Incentives for general managers are even better. Twice a month, Checkers/Rally’s gives away automobiles in a drawing of general managers who have placed in the top 25 percent of sales growth. And every year, the top 100 general managers and their spouses are taken on a five-night Caribbean cruise.

“We focus on our general manager level because we think that’s the critical position in our company,” says Sirois. “That’s where the rubber meets the road in our business. The general manager hires and oversees the training of the staff. They have ultimate control over costs, promotional execution, guest relations, etc. They are the company to our guests and employees.”

It’s no surprise, then, that Checkers/Rally’s has retention rates well above industry averages, and 75 percent of promotions come from within the organization. And while industry turnover rates for general managers averages about 33 percent, turnover rates for managers who have gone through the Checkers/Rally’s GO program is 13 percent.

“We could save a lot of money this year if we cut out our incentive programs — cruises and cars and things like that — but we think that’s money we get a great return on,” says Sirois.

The incentives and praise also play into improving Checkers/Rally’s corporate culture which, in turn, encourages people to work harder and drive sales.

“We’re all the time acknowledging excellence and acknowledging achievement, and that’s important because all around them, they’re being viewed as something less than excellent because they’re burger flippers,” says Sirois. “We’ve changed how a burger flipper is viewed in our culture.”

Tools for improvement
With more than 5,000 employees nationwide, Sirois knows that good communication and technology are critical to improving the company’s operational execution.

The company implemented a Web-based system to streamline and foster the exchange of information among corporate, franchisees and employees. The intranet improves the reporting of sales results and makes sure that everyone is getting the same unified message. It allows Checkers/Rally’s to communicate with its employees instantaneously and ensures that information such as promotional and training materials are up-to-date and sent out on time.

“People are able, via that Web site, to ask questions of our training department about materials or if it wasn’t clear to them what we’re talking about,” says Sirois. “It’s usually within 24 hours they get an answer to their question. And that question stays posted up for everybody else in the system, so if one person asked a question that 100 people had, they get the answer, too.”

The company has also spent the past few years upgrading Point of Sale (POS) systems in each of the restaurants.

“It’s very easy for folks to utilize these pieces of equipment,” says Sirois. “When they step up to a touch screen piece of technology, they understand it almost immediately. What that allowed us to do is shorten the time it takes to teach a cashier, for example, how to take orders and ring up things. If I can teach people quicker, that ... shortens the cost of training.”

The new POS system also enables the company to put prompts on the register screens so that employees don’t have to rely on memory to remember to ask if a customer would like fries or suggest adding cheese to a burger.

“All those little slices of cheese add up,” says Sirois. “And by the way, the consumer who forgets to say, ‘I wanted the cheeseburger’ is glad you told them.”

The company has also added timing systems at each restaurant’s two drive-thrus.

“There’s a little digital readout so that not only does each side of the restaurant see what their current time is on that customer, but they see what their average time is so far for that meal period, and they can compete back and forth, which helps improve the speed,” says Sirois.

Bright future
Even though the company’s turnaround isn’t complete, Sirois is confident that it is now operating at the highest standards and is starting to see the fruits of its labors.

Although Checkers/Rally’s revenue fell from $194 million in 2004 to $187 million in 2005, mostly due to restaurant closings as a result of Hurricane Katrina, the company still posted same-store sales growth 19 of the last 20 quarters. And in 2005, Rally’s was named “Best Drive-Thru in America” by QSR Magazine, whose annual survey ranks the top 25 quick-service restaurants in the country.

But Sirois knows that doesn’t mean the company can relax. He and his executives are constantly analyzing the GO program and technology, a process he compares to a TV show he once saw in which a man was trying to spin plates on sticks.

“By the time he started to spin the seventh, the first one would start wobbling like it’s going to fall,” says Sirois. “And that’s kind of how our program is. As we go through the GO program and work on various parts of the business, as we get two and three years into it, we’ve got to go back to the first wobbly plate.”

Sirois hopes the company’s dedication to accuracy, speed, great service and communication will help Checkers/Rally’s continue to expand through increased franchise operations. It has entered into development agreements for an additional 129 franchised units by 2009.

“Our turnaround and our success has come from us embracing who we are as a double-drive-thru restaurant,” he says. “Our consumers are coming back more often and spending more money with us, and our business is growing as a result.

“The better we do at our execution, the more we get awards like ‘Best Drive-Thru in America,’ that makes us much more attractive to potential franchise candidates and helps us accomplish these goals we have to add franchisees and new franchise restaurants.”

HOW TO REACH: Checkers Drive-In Restaurants Inc., www.checkers.com