Food-Cost Metrics and Negotiations That Actually Protect Profit with Bo Bryant.

And welcome to Restaurant Coach Podcast. It is Zeke here for The Common Restaurant. I am so honored to have back on the show today for a repeat visit, Beau Bryant, the Restaurant Giant. Beau, man, it's good to see you, brother.

Donald Burns, it's always great to see you, buddy.

It's always good to see you, man. Well, hey man, you've had some— you moved, man. You should live in Arizona now. Like, now we have to talk long distance because you live in Colorado now, right?

Yeah, that's correct.

That's correct.

Yeah, yeah, it's, uh, the heat beat me, man. It got me. I'm good. Tapped out.

Yeah, I just can't do it. 107. What was your— what's your threshold for weather in Arizona? Everyone has a threshold.

Um, yeah, man, I mean, like, when it gets over 105, that's, that's stupid. That's ridiculous. It gets, it gets really crazy, and it gets a hell of a lot hotter than that there.

Yeah, I think I'm good till like 110. 110. After 110, I'm like, I'm out. Yeah, I can do up to 110, and after that, I just can't do anymore.

I think a lot of people have the luxury of kind of being in their home, right? So the context I would give you, like owning the 2 restaurants there, like, this is the shittiest part that you're not thinking about, that I certainly wasn't thinking about. And I think about everything, but I missed this one. So fully aware that the restaurant sales in Arizona just tank in the summer, right? It's too hot. People don't eat. It's ridiculous. But what you're not thinking is, wow, I got a $5,000 utility bill from running my AC at the same time. So like the highest peak of my utility bills and the lowest peak of my revenue like intersect at that same time. And it's like, oh shit, that sucks. That was, that was brutal. But, and I didn't, I wasn't in the bubble of, you know, the luxury of my office or my home, you know, especially on the weekends. I was always working at the restaurants, hot as piss. It's already hot in the kitchen. When you get off the line to take a break, you go outside, you're like, oh, this is worse. I'm gonna go back.

Yeah, no, it's like, I'm gonna go back inside because it's not—

Stand over the grill and cool down.

Yeah, at least the grill's only 105. It's 117 outside. I think I'd rather go sweat over the Over on the line.

Yeah, definitely. Anyway, needless to say, that's ridiculous. Happy to be gone. Yeah, happy to be back in Colorado. Colorado is fantastic.

Colorado is beautiful. Except, yeah, I mean, I just— the winters, man. I just can't do the winters. That's the only downside.

Oh, like, I went hardcore winter. Like, I moved up into the mountains in a log home.

You did?

Yeah, yeah.

That's right, you have a log home. That's right.

Yeah, yeah. Bunch of acreage, totally secluded. Just went the 100% opposite direction.

You're not like— not— you're not like going Unabomber over here.

I mean, are you?

I'm out in the woods.

I got a lot of shit I'm cooking up in the lab, you know, uh, on the business side of it.

On the business side.

I got some truth bombs I'm probably gonna drop on people that they're not gonna like.

But, uh, true, we're gonna talk about some of those today. We're gonna talk about some of this. So if you guys haven't— if you, if you're new to the show, uh, Restaurant Coach Podcast, we usually get together. I like to have experts on like Beau. Beau actually has—

I—

this would be my 8th restaurant— do you believe this? This is my 8th Restaurant Success Summit this year.

Oh yeah, wow.

Everyone.

Wow, everyone.

This will be the 8th annual Restaurant Success Summit. And if you don't have the dates down, if you want to join us for the Restaurant Success Summit, I would say it is a great time. We always, we always have fun at the Restaurant Success Summit. This year it's October 19th, 20th, 21st here in Scottsdale, Arizona. We got all kinds of bonuses. Beau actually has a bonus he's giving to everyone who comes to the summit this year. I'm also going to give an advanced copy of my new book, What the Fork Out. Normally doesn't come out until November, it's scheduled for November 15th, but if you come to the summit October, you'll actually get an advanced copy. All you gotta do is just go to restaurantsuccesssummit.com. You'll see Beau, you'll see our agenda, you'll also see all the perks you get, all the different bonuses you get, and you'll see some of the other amazing speakers we have. Like Kelly Jones. Bo's been around Kelly Jones.

Dude, Kelly's amazing.

Crushes it.

Yeah.

Dan Carroll, also one of the most incredible leaders I've ever met.

Zach Oates, funniest guy, greatest guy, good storytelling, dynamic software product. That dude's, that dude's legit.

Yeah, yep, yeah, it's gonna be a good time. So let's jump into some stuff like today. So like one of the reasons I love talking to Bo is like, hey, And I always say the same time, every time I talk to Beau, every time I talk to Beau, I always learn something new. And I love it because again, if you wanna learn and grow and develop as a leader, you should have this kind of this growth mindset. You wanna learn, you wanna grow, you wanna become 1% better. So restaurant owners constantly say, oh, Beau, man, my food cost is too high.

Right.

But before changing anything, what number do you need to see To determine whether they actually have a food cost problem?

Okay, this is gonna get real heady right off the bat.

So—

Do it, baby.

We're jumping in. We're diving in headfirst.

So the first thing I need to understand is, do they have a food cost problem or do they have a sales problem?

There you go.

And so the fastest hack that I use to try to establish that is just This really, really simple idea of rent being a portion of sales. The magic number is 7% or less.

Yes.

So ultimately, if what you're doing in sales revenue in a month, and if your rent is higher than 7% of that number, you do have a food cost problem, but you have a food cost problem because you have a sales problem.

Exactly.

And, and that's a big difference. But if the sales are there, if the rent is below 7%, 7% or below, um, and your food cost is too high, then you might have a food cost problem. But I couldn't say definitively that you have a food cost problem because there's one more piece of context clue that's missing, and that's what's your labor cost, right? I have to understand prime cost as a whole. So let me give you an example. Let's say you're a pizza place and you're running a 30% food cost. Like, that sounds crazy for a pizza place.

Yeah.

But if— and I'm not— no judgment here— if you're buying your pizza dough and your cheese is already shredded and your sauce is already completely made, and if you essentially have no labor, and let's say you're running Mid to low 20s in the labor, that 30% food cost now doesn't matter. It's— and operators hear these magnanimous numbers that really miss context, right? Like, oh no, pizza restaurant should be 24%, 22% food cost. Yes, when you're doing everything from scratch, when you're making dough, when you're shredding cheese, when you're making your own sauce, you've got a high labor burden, right? So your labor is going to be closer to 34%. So that 22% is critical. You have to be at that 22% food cost. But that's how they mix. Hopefully that makes sense to the listening audience. Yeah. Because it's a lot more dynamic than just what your actual food cost is.

And that's where a lot of people go crazy is that they hate to say Google can be a godsend, but also could be a nightmare. Especially people go on and start Googling what's the average food cost for a restaurant? What's the average labor cost for a restaurant? Right. The only thing that matters is your restaurant.

You know what I'm saying? Absolutely.

No matter what the average is. I mean, and by the way, does anybody want to be average?

No one wants to be average.

That's another thing I was like, well, I, I Googled— hey, I Googled what the average food cost was. It says that my food cost should be 28 to 34%, right? All right, yeah, yeah, we don't want everything.

34, 6 points.

Yeah, 6 points.

It's a terrible answer.

A terrible answer, man. Especially, especially when you get into like— and you taught me this lesson— like theoretical, actual food costs. Like every month someone will call me and say, hey Donald, my food costs 30%, is that good? And I'll say, I don't know. They say, what do you mean you don't know? I'll say, what's your theoretical? And they go, I don't know. That's the problem. If your food costs 3% but your theoretical is 28%, actually that's not too bad, you know. But if your theoretical is like a lot of restaurants, like 21%, uh, that's your problem right there. Because like you told me, the average restaurant has a gap of 9 points.

So that's been updated too. That's crazy. So I just read this higher, even 2 days ago. Now the average gap between theoretical and actual is 12%. But that 12% has a little asterisk. It's 12% when companies aren't measuring theoretical versus actual. So if you have no implementation system in, if you're not using any kind of software or any way of physically measuring it on what theoretical is versus actual, that gap As soon as you implement that theoretical, you'll find that gap at 12%. It's crazy. Yeah.

Wow.

And I'm sure that has so much to do with inflation, plenty to do with, plenty to do with so much that's changed in the industry. I mean, the aptitude has certainly gone down. We, you know, I'm not trying to be a broken record, but post-COVID, we culled a lot of, you know, the legacy tenured talent in the industry. And it's a much younger, fresh future bumper crop of, you know, young kids without the same disciplines and education. And there's, and there's a lot to learn. And, and it also hits this apex, you know, to me, and I could speak of this firsthand, you know, when I had opened my previous 2 restaurants 4 years ago. You know, I did this intentionally to try to identify what had changed about the industry because plenty had changed about the industry. I'd been out of it for probably 6 years. And so pre-COVID and then post-COVID. And that was pretty, pretty eye-opening. But the biggest driver is labor costs, right?

Yeah.

I date myself, but when I opened my first restaurant back in 1998, I was paying line cooks like $8 an hour, dishwashers like $6 an hour, servers on a tip wage differential were making like $3.25 an hour. I had the luxury of investing time and money into training.

Yes.

When that multiplier is now, you know, I got somebody who's, you know, making $25 in the back of the house. And, you know, I get, how much time can I really spend in training? So you gotta develop smarter systems anyway. Didn't mean to go down a bunny hole, but—

That's a good bunny hole.

But it's part of the reason why The aptitude has not risen, right? Because we have no one to blame but ourselves. I mean, sure, there's— there was this huge culling of the talent in the industry. We lost a large group of people that didn't come back.

Yep.

But here we are 6 years later, right? This shouldn't still be the problem. It's the problem because those people that have been sitting there for 6 years now, 6 years of experience, Only have functional line experience or prep experience, no context, no greater growth in their training or development because it costs us too much damn money to do it. I mean, restaurants are not holding staff meetings like they used to. They're not doing training times and sessions. They're not doing coachings and mirrorings and shadowing and shit like that that we grew up doing because that majority of cost is way too high.

Yeah.

And it's high because there's been so much downward pressure on profitability due to inflation and wage increase. So it's a perfect storm and we understand why we are where we are. But the good news is there's hope on the horizon.

That's true. Very, very true.

Yeah. Sorry, that was a hell of a bunny hole. Apologize.

No, it's a good bunny hole. You know, and you mentioned something like this, like, you know, everyone uses— and I just actually wrote a blog post about this about a week ago. I said, I call it the pandemic hangover. It's like I still have people this day. You probably hear this too from people that you work with, that they still use COVID as an excuse.

Every day. Every day I hear it. Absolutely.

And I was like, you understand that was 6 years ago, right?

Yeah.

Yeah. It's like, like, like, remember like when the economy crashed in 2008?

Yeah.

Yeah. That would be like me saying, well, you know, hell, you know, I can't get ahead because, you know, the economy crashed in 2008. That was a long time ago.

People complained about that shit 10 years into it too, man. I heard it. That's just life.

Life changes. Life changes. You have to pick it up. You just gotta move on.

Yeah, and look, life changes for the better too, right? I mean, there's a lot of upside to the downside.

Yeah.

So yeah, anyway, I pulled us way off topic.

So we're good. We're good. No, that's perfect, man.

So hey, pull me back, Donald.

Pull you back. Pull you back. Hey, let's say, let's say that where are the— so you're looking at someone's restaurant. What are the first 3 places you look at for food cost dollars when they're starting to disappear? But the PNL doesn't say why.

Oh, okay. You, you always have such beautiful, simple questions, and then I shit all over them with these really, really long, terrible, complex answers.

They're supposed to be long. I give you simple ones because I— we need the complexity for people to understand that there's no such thing as like a simple solution sometimes. Sometimes the solution is sometimes you got to go around the, around the horn to get to the answer. Yeah.

There you go. So the question was, when seemingly somebody's food cost is high, where are the first places that I look?

Yeah.

So I think the very first place that I look is, tell me how you arrived at that number. And, and I'm trying to qualify one very rudimentary concept here, and that is, what's the financial discipline look like, um, from an accounting standpoint?

Right.

And so more often than not, when I hear somebody complain about a high food cost and I say, tell me how you got to that answer, they're saying, here's all my Cisco invoices and here's my sales, right? Here's my general ledger or my AR statement from Cisco for the last month, right? And I spent $40,000 and I did $200,000 in revenue or $100,000 in revenue. You know, so I'm 40% food cost. Well, No. No, you're not. You just created a shit ton of work and I don't know if I want to do it. But okay, so let's, let's break down some general ledger codes. Let's see where the problem is. Is it with food? Is it with your cost of goods outside of food, like your paper and packaging and chemical and all that other bullshit? So I think people basically give a cost of goods statement as a percentage, but they accidentally call it food cost.

Right.

And we can work with either, right? I mean, cost of goods is gonna run 5 to 6 points on top of your food costs. So if you had a 30% food cost, but you're talking cost of goods, I'd be like, holy shit, you're doing great. That probably means you have 24, 25% food cost and, you know, 5 to 6% cost of goods on your non-food items. So that's typically the first place. And listen, this is the hardest thing for operators to do. It's the hardest thing for accountants and bookkeepers to understand.

Yep.

And it— and the measurement is all screwed up. So basically, the first thing that every operator should be doing is they should take their entire master product list of every single thing that they purchase, and they should attach what's called a GL or a general ledger code to it.

Yep.

There is— you can go to— there's a lot of great resources. RestaurantOwner.com is a good resource, but you could go to the National Restaurant Association webpage and you could pull up what's called the Standard Chart of Accounts. And this is an agreed-upon restaurant standard chart of accounts for sequencing all the products that you purchase. And it's done in conjunction with Deloitte, which is one of the biggest accounting firms in the world. And it's very, very smart. And it's, it's a really great baseline. It's what I use as a model when I work with clients.

Me too.

That's the first thing we unfuck is, okay, let's look at every single thing that you purchase and let's attach the proper GL. Once we attach that proper GL, that becomes the bucket that sits on a P&L line, right? Like, because some of it might be non-foods, some of it might be paper packaging, chemical, janitorial. There's all these things that don't count against food costs because you can't put a portionable amount of that into food costs. But there's also benchmarks and averages that are important. So the reason why we spend that real heavy-duty lift of putting everything in the proper GL code is because we could then look at benchmarks and say, okay, my paper and packaging is 6% of my total purchases. Holy shit, that seems like a lot. It is a lot. Maybe.

Maybe.

If you're a pizza place that does 90% takeout delivery, that's not a lot. Unfortunately, boxes are expensive and all the other stuff that falls into it. So we only want to allocate the measurable, predictable items that are going on a plate or in a glass as your food and beverage cost. None of that other stuff matters. But once we separate it all out, then we can start to look at the benchmark standard and see, okay, what is the benchmark standard for a pizza place? On paper and packaging, on janitorial, on chemical, on fryer shortening. I mean, we measure fryer shortening as a single one-off GL code for interesting reasons that we don't necessarily have to get into, but it's such an expensive item. But it's not— it's, it's a vehicle to cook food, but it's not something that we can actually proportionately add to a menu recipe because I have no idea what the dispensation of actual fryer oil consumption was into my chicken wings.

It absorbs into the chicken wings, right? Right.

It'd be the same as trying to rationalize how much gas you use on the stove per recipe. You can't. Those become more of a fixed cost. And they're not really a fixed cost. They're variable costs because they do float, but they float within an average. And I'm sure every restaurant who are listening to this right now just fell asleep because we're talking about a bunch of accounting shit. And that's not the stuff that's exciting.

Well, hey man, you know what? You gotta get excited about numbers if you wanna make money nowadays, man.

You gotta get excited about numbers. Yeah, dude, if you wanna make money, you gotta get excited about the numbers. 100%.

Yeah, yeah. That's one of the things— that's a mistake I made, like, when I opened my first restaurant, you know, being a chef like you, you know, I wanna come in to do the creative shit, right? Yeah. Didn't wanna really— didn't wanna understand my numbers, didn't understand my food costs. Just, uh, you know, as long as the dining room was packed, I was happy. And that's what I, I call the prof illusion, that you can have a busy dining room and you can still be broke. Yeah, I mean, it doesn't matter.

Sorry, I just had a drink of water, but the concept starving artist, that's where we lived with that mentality.

We are starving artists, dude, 100%.

And, and I wore that as a badge of honor. I loved to be a fucking artist. It was like, oh my God, look at this beautiful plate, look at all this cool shit that I'm doing, and everybody loves me, look at how busy I am. Oh my God, I think I was making— when I owned my first restaurant, I think I was making like $60,000 a year, and I was working fucking 80, 90 hours a week. No joke. That's not— I'm not— that's not hyperbolic. I mean, that's what I was doing. Um, that's garbage. But, you know, I was a starving artist. It was great, you know.

Yeah. I ever tell you— I ever tell you a story about my first chef job? My first— I got like— it was the typical battlefield promotion. So I'm the sous chef of this place. The chef got in an argument with the owner about fries. He wanted a big old steak fry, big hearty thick steak fry. The owner wanted this super thin shoestring fry, and they argued about it. And the chef basically, of course, threw the ultimatum down. If I don't get what I want, I'm walking. Well, then walk, right? So the guy, guy, chef walks out. Owner walks back to me and says, you're the chef now, right? All right, sorry, my first chef job, 25.

All right, here we go.

And then, of course, you know, I'm gonna have my culinary integrity. I'm gonna make sure you cannot have substitutions. The plates are the plates are meant to be consumed the way I designed them. They are composed perfectly. I'm actually taking salt and pepper off the table for you because you don't even need salt pepper because it's been salted and peppered perfectly. And then about a month later, owner calls me in his office. He goes, "Hey." You know how you won't make substitutions for people? I go, yes, yeah, my food has integrity. I will not compromise my art. He goes, yeah, about that. Well, here's the thing, uh, those people won't come back, and if they don't come back, uh, I can't pay you. So it's like, oh, so this is not about my— this is not the, the vehicle or the springboard for my culinary artistry and interpretation and to advance my career, but actually making food that people want to love and come back for. Again and again. Okay. And then when that sunk in, I was leaving the office, he goes to me one last— he goes, oh yeah, uh, put the salt and pepper back on the table. Yes, definitely.

Oh, that story resonates more than you know. I was the same kind of bossy. Maybe, but my, you know, mine was probably for different reasons. I think there was— there's a lot of truth in what you said. That resonates with me. But additionally, it was just the way it kinked the fucking system. Like, for me, like, my guys, like, like the wires would touch if there was a mod. Yeah, because they were built for speed but not to read. That was always my, my quote. Yeah, yeah, yeah. It's speed, not read. We can't read and be fast at the same time. And it, and it does, it does kink the system. I mean, because you got a method and you're flowing, and I mean, you know, any seasoned badass line cook, you know, you put that little kink in their shit and it's just like—

You see, like, you see, like, yeah, your eyes start twitching. Yeah, they're basically— your brain short-circuiting back there.

And it was always— it was always some weird shit too. Like, a lot of it came from the servers. Like, you know, they would put in like avocado toast, no toast. You're like, what the fuck? Am I supposed to just smear avocado on a plate? Like, what the shit is that?

Avocado on a plate with a poached egg on it.

to wait for like 2 minutes, and 2 minutes is a lifetime. They just stop and they're like, I need to talk to Kayla, you know, I need to see Kayla in the back. And they'd be like, what the hell does this mean, you know? And then, but all of a sudden the whole train just comes to a stop, right? Each car is just smashing into the other one. Like, I could talk about mods all day. It's a shit deal. But yeah, for all those reasons and more. Yeah. All right. Another bunny hole.

Okay. Let's pull this back up. Hey, you know what? One of the things that you're a specialist in, one of the things, and you work with some of my clients too, some of my members of my coaching program, broadline food service negotiations. Okay. And this is going to be something that you're going to actually talk about at the summit. But one of the times, think a lot of people like, here's a misconception a lot of owners think. They think distributor negotiation, you know, negotiation just means, hey, uh, you give me a better price. All right. What does it, what does it really mean to start a professional negotiation process with a vendor if you're an independent restaurant owner?

Oh, it means a lot.

A lot.

So yeah, this is— I'm literally spending— this is where I spend 90% of my time. I go out and I do negotiations for customers and help them drive down their costs, like at a real, real number. Average client right now is about 9% reduction in their purchases. But here's, here's the, here's the flip side of the coin. There, there is certainly money to be leveraged, negotiated, and pulled back from the distributor. But there is also some huge behavioral changes that have to happen at the operations level.

There's where I'm gonna go.

Yeah, it's, man, it's a big deal. And I'll give you the, I'll give you the first, the first precursor. The first requirement when I work with a client is I want to take a look at their master product list, everything that they buy. And I give them a homework assignment. And that's to rationalize their product list. It's the fancy corporate way of saying that shit. But basically what that means We use a little acronym called ABC. That's a good one. So I want you to go down your entire list and I want you to qualify every single item as an A, a B, or a C. And those letters have meaning. A is an absolute, has to be this brand, this pack size, this manufacturer, this quality level, this, in fact, this exact GTIN manufacturing number, the 10-digit code. It's gotta be this exact match.

The one I want.

Then B is kind of the basic need that this product serves, right? It's 2%, you know, milk or whole milk. I don't care what farm it comes from. Maybe you do, maybe you don't. I don't know that from looking at your list. And 99% of the time, either as the operator, they'll sit down and collaborate with the chef or the kitchen manager, or GM or whatever. And they can't even agree on it. I mean, it's crazy. And then C See, we call commodity, like, I don't really care. It's, I need a black straw that's wrapped. I don't— 7 and a quarter.

Cilantro.

So maybe that becomes, maybe that becomes a basic, but, uh, yeah, cilantro. But you'd be surprised, everybody I do this with, I'm like, you know, like plastic wrap, plastic wrap doesn't matter. Most people don't give a shit about what, you know, Mylar gauge, you know, it's measured. Yeah, yeah, yeah.

Trash.

No, absolutely, it has to be Shamrock plastic wrap. That is the only one that truly sticks and wraps and is thick enough. And okay. So, but, but this is, this is the point. If you don't know what's critical, then you don't know where you have any room to move.

Yeah, you have no leverage. Yeah.

And it's, man, I see, I see some nightmares. But this seems like such a simple task, Donald, but I'm telling you, this is one of the most arduous tasks to put in front of somebody. And there's a lot, especially if it's more than one person doing it, man, there's all this bickering back and forth. And there should be more than one person. I mean, I think the owner of most establishments are gonna have some feedback on what they think are critical items that just are not negotiable. And I think then the chef is gonna have some non-negotiables for different reasons. And, you know, the owner might be more focused on the quality of the flavor, the brand, or even some relationship he might have with a manufacturer. The chef might be more focused on the practicality of the way that an item is packed. And I'll give you a great example. We were doing— we did vendor negotiation with a group up in Park City, a large multi-unit group, and they had buffalo, and they had called this buffalo patty that they were buying a B, right? Like, we don't care if it comes from this manufacturer. And in fact, I think they were buying it from a different distributor.

Yeah.

And it was like a house brand or something, or maybe something that was exclusive. And so we knew that, and we had asked them, okay, that's a B. We're gonna have to get you a different brand, but we'll match all the specs. And so they said, okay, great. When the product came in, there was this giant piece of distinction none of us thought about. They were getting a pillow-packed 10-pound box.

Oh, wow.

And this place was going through 12 to 15 boxes a day. The product that we bought in, because we ended up going with a different distributor because that distributor had better pricing through the negotiation. And we go through this other distributor and they packed their, their bison patties in 4 sleeves of 5, right, with liner in between it.

Wow.

And it was a nightmare having to open all of these boxes to try to throw 20 patties on the grill at one time. And the chef lost his mind. He's like, I can't do this. Like, this is too hard, the packaging difference. And you'd never think that a packing difference would matter. So that item really was a lot more A type of an item than a B, even though we could switch the brand. We kind of didn't think about packaging. So it's a big deal. And some of it you're never gonna know, but at least creating a baseline of that, that's the first place to start is rationalizing that list. Because what we do when we go out and negotiate with vendors is we tell them, here's the list.

Yep.

Here's the volume of all of them that we use.

Right.

You're more than welcome to substitute straight across the board the lowest price, highest quality item for anything that's a C. On the Bs, they're important, but not critically important. So We're open to samples and looking at alternatives, but we'll have to do a cutting, a side-by-side cutting and a tasting to see. And if the flavor and everything meets our needs and the price is better, fantastic, we'll elect for that item. And then those A's, those non-negotiables, those are the items— excuse me— that are usually tied to the highest volume. And then that becomes our leverage. In a different proposition, and this is an important thing, I think, and I don't mind giving away all the keys to the city if you want to go try to negotiate. for yourself, you should. You won't do it as good as me. And I don't charge you, I charge the distributor, but you're welcome to do it. But here's, here's, I think, one of the, one of the critical things that most operators don't know. There are, there's 2 levels of negotiation.

Yes.

You can negotiate with the distributor. And all they are is the last mile guy, right? In most cases, they're not the one manufacturing the product. They're just— they're UPS, FedEx, UPS. They're just the shipping company that consolidates everything that you buy, packages it up, and sends it to you. But they're not manufacturing it. So first place negotiation, which does probably foster the most savings when it's done correctly, is through the distributor.

Yes.

But the second place negotiation is through the manufacturer. And Those two aren't directly tied. They're not in cahoots at all. A manufacturer is held, you know, to a, to a law called the Robinson-Patman Act that says they have to post a stated price if they're not selling something exclusively, but they're selling it, you know, in commerce to multiple distributors. They have to post a price and that price has to be the same to all distributors.

Hmm.

So the baseline cost of the product, that's called the Robinson-Patman Act. The baseline cost of that product is posted the same to every distributor. So there are caveats. A distributor may not buy as much of it as another, so they might be paying a higher freight rate on it.

Right.

There's some distributors have higher overhead costs than others, and so they just might have a higher markup rule as a baseline rule. But there's also a lot of distributors where the majority of their salespeople are still on commission. And so There's no continuity at all in what you're gonna pay for it because if you have a sales rep who's on commission, they're gonna charge whatever they think they can get away with charging. So a big part of our negotiation takes that functionality out of it where the rep doesn't have the autonomy to just randomly what we call hand price.

Man.

We don't do that. But in order to have the leverage not to do that, you have to give something in exchange. And so typically in order to get a contract relationship out of a distributor, first you have to buy enough. It's gotta be worth their time. If you're buying $200,000 a year worth of groceries, might seem like a lot to you, but it's a drop in the bucket.

Nothing to them. Yeah.

So unfortunately the sad news is vendors won't typically start to contract and take that, that hand pricing out of the rep's hand until you're about $1 million a year worth of purchases. $800,000, $900,000, maybe. So that's kind of where the first piece of leverage requires how big the stick is, right?

The—

and then it's a consolidation effort.

Right, right.

A lot of operators, and I don't know how to untrain this behavior, it's really, really hard. And unfortunately, a lot of chefs and cooks and KMs today, have established their value as being professional shoppers. And this is a big disconnect.

Funny you mentioned that because I actually talk about that in my new book, What the Fork? It's called identity enmeshment.

Dude, it's crazy. Even after we've done like full contracts and systems and proven out like, okay, look, I was buying $400,000 over here. I was buying half a million from these guys. I was buying $200,000 from these guys. and $200,000 for this little produce company. Dude, altogether, that's, that was $1.3 million. When I take that $1.3 million to a distributor and say, hey, we were only buying $400,000, $500,000 from you. I've got $1.3 million I wanna put in front of you. Here's the rules you have to abide by. Here's the requests. All that comes in what we call an RFP or a request for proposal.

Yep.

And we put that out to all distributors, but we weigh it, right? So I look at, okay, I spent $1.3 million. in 4 different places. If I give this $1.3 million to this guy and have him give me back pricing with all of my terms and conditions that I expect the pricing to be done in, I'm gonna wait how many cases I bought of every single item. Right? So when I get that bid back, I'm basically comparing everybody's response to $1.3 million. So because that was what I spent, that's not deniable. But by giving somebody that you were buying a little bit from, $400,000, $500,000 and saying, how much better can you make it if I give you $1.3 million of it? Give me your pricing back.

Yeah.

I can compare their pricing to that pricing. I can compare my $1.3 to whatever the new answer is. And if that answer is $1.1, I'm like, holy shit, that's a good deal. But here's the problem. I just saved $200,000 by putting all my eggs in this basket, basket, going with this contract. The ownership agrees. We sign the deal. Then the product comes in. And the guy in the kitchen who used to always shop is like, hey, what the fuck? These gloves are $30 a case. I used to pay $22 a case. Like, I'm gonna get my gloves from that guy.

Yeah. Yeah.

No, you're not. Because we leveraged our entire basket to get all of this pricing down lower. Stop tripping over dollars to pick up dimes. You're focusing on one thing, and it's really hard to get that mindset. They're like, no, no, no, but I could still save this money. No, no, no. That's not how the relationship works. We leveraged our total spend to get this kind of savings. You've got to stop looking at the single item cost and you got to look at what the total leverage cost is. And here's the other fascinating thing that I've never met an operator that does it. Nobody measures the soft cost, right? And so I give you the example of what this is.

They don't even know what the soft cost is, dude.

Right. So soft cost in this example, Let's say you got— who's doing the shopping? It's always the highest paid guy in the kitchen. It's always the chef or the KM, right? So you got a guy making $30 to $40 an hour, spending 3 to 4 hours a week going through 3 different order guides from different vendors to look and see who's got the cheapest one, right? So then they make their list. Here's the cheapest of this, here's who has the cheapest of this, and I'm going to call all 3 of these vendors. Then I'm going to get 3 times as many invoices.

Right.

Then I've gotta code those invoices, put those in, or the accountant does. That accountant spends 4 hours a week doing that bullshit, chasing credits, writing checks, sending out checks, or doing, you know, some type of payment over the computer. The net-net is, okay, that person's making $30 an hour, that person spent 4 hours, and now I've got the person who's receiving the order And it takes them 2 hours to put an order away, and they have to do that now 6 times because I'm getting 3 vendors delivery twice a week. There's another 10 hours of that. So when you add it all up, you're spending 20 hours a week on the soft cost. That those 20 hours a week don't completely go away, but they would be 5 or 6.

Right?

Exactly. But you're spending 20 hours a week at $30 average hourly wage. Holy shit, that's a lot of money. I'm spending $1,200, $900, whatever it is, to shop all this. Did I save that much? And without leveraging it all, did I— was I able to get the lower cost that I could have in the first place? So people don't measure it. It's a nightmare. It's hard to change that behavior and the mentality. When I speak to most owners, they get it, but There's a big disconnect in the way that they kind of prepare their workers to deal with it. So now that's something we have to spend a lot of time with too, is almost having like an economics class for, you know, the back of the house guys saying, this is how this works. You have to trust the process. Yeah. So I hope that answered your question.

It did. It did. It did. It did. It did. Yeah.

It's dynamic. And, you know, I think this is the shameless plug for me is that I've worked in food service distribution at a consultant and a development level for 30 years, even while owning restaurants. I speak both languages and I understand the nuances that happen in both companies. And I also understand the gap in between them and where the communication breaks down. And in distribution, I mean, honestly, I know where all the bodies are buried. I know where all the money is buried. I know what they're able to give versus what they can't give. Right. I'm able to call them on their bullshit and point out all the tricks and all the crazy shit. So, that's the why hire me. You can certainly go try to do it yourself. It's a heavy task.

It's a heavy lift. Yeah.

But I wouldn't discourage somebody from doing it because they're not working with me. I'm just telling you, if you already don't have time and you already don't have money, good luck with this process. It's a challenge.

This wasn't on that list of questions, but I want to throw it out there to you because you probably have some good input for it. So, One of the things I sent out to all my members the other day, I'm always tracking like industry trends and I'm always tracking like commodity prices, what's going on. Well, oil just hit like $100, right? How is that? Yeah, how is that as far as like diesel? How's that gonna trickle down to food vendors and how's that gonna trickle down to an independent restaurant owner, if at all?

Look, it will, and it is. There's, there's a National Highway Fuel Index. I can't remember what the hell it's called, but—

Yeah.

There's a baseline, and every distribution company knows they've got a, they've got a high watermark for that baseline, and they know once it trips over that number, which it has, and it's— diesel's been ridiculously high for a while, um, uh, and it's at the highest it's been Historically ever right now. I think I just heard it was $1.04, $1.14 national average higher than it was this point last year.

Wow.

So let's say the dealer sets an index average based on this National Highway Fuel Index. So let's say once it trips $5, then that's when we have to raise our rates, period. Whether you're a contract customer or non-contract customer. If you're a contract customer, most contracts have the stipulation where that's indexed and it's not erroneous. I mean, they say, hey, pull that national average index and it'll show you, and we set it in our contract, it's over it.

Yeah.

So now we're gonna have to charge you 5 cents more a case or whatever. But to the non-contracted customer, typically what happens is either your margins go up and you don't know about it 'cause you have that rep who's kind of hand pricing indiscriminately, or the distributor will put in pad. So, There's more of a civics lesson in distribution than anybody wants to know. But let's say, you know, the company buys X product, your French fries or whatever, at $19 negotiated from the, from the vendor. Well, this fuel index has tripped, and so now they're going to put $0.05 in pad. So the sales rep who used to see it at $19 a case now sees it at $19.05.

Yeah.

That's the lowest they can go. So the company's padded it to insulate it to make sure they make that money back without worrying about what the you know, sales reps' compensation is. So that's a big part of it. But another thing that a bunch of distributors do, either in supplement to raising the pad or raising the cost of an item, or in conjunction with it, is they're just going to increase their fuel surcharge. You know, and so many of them have gone to a fuel surcharge. So what might have used to have been $5 for each delivery is now $8. And they're just Eating that, pulling that cost right in so it doesn't affect their bottom line.

Yes.

So it's real. It's happening. It's been happening forever.

Years.

But it's not something that they're gonna go to the customer and be like, hey, we gotta raise our pricing because fuel's going up. Because customers don't understand that, right?

No.

But 98, 99% of all your goods is shipped on a semi-truck that uses diesel. You know, Elon hasn't replaced the fleet with electric yet. Even if he does, they're still using crude in some capacity or another to power that power plant, to charge that battery, to get that battery—

Get my electric car charged up. Yeah, I have an EV and like, I am not like ignorant. It doesn't take some fuel to make the power that makes the— charges up my battery in my car. Yeah, I'm not like— yeah, I'm not that naive, like, oh, I'm, I'm, I'm so, I'm so clean now. No, I'm not.

Yeah, no, you're not. You just want to drive in the HOV lane with one person.

That's exactly what I want to do.

That's exactly what—

now you know why I got the car for Arizona. It's like I can drive in the HOV lane with just me by myself. Don't worry, I got that EV plate and I can just go wherever I want now. Yep, saves myself a lot of time and traffic in Arizona.

Yeah, absolutely.

Exactly.

All right, so hopefully that answered your question.

It does, it does, it does. So hey, what another thing too is like somebody asked me the other day, and I know I, I tried to describe it the best I could. When a vendor is guilty of, like I say, a salesperson is guilty of speeding, what exactly is speeding?

So speeding goes back to that hand pricing, um, Algorithm, right? So the concept is very, very simple. They're a commission salesperson. They're given their entire order guide at a cost that they can't sell below, but they can sell above. And there's you know there's a baseline rule. I mean, listen, and now distribution has gotten a lot more responsible about this than they were thirty years ago. The speeding used to happen quite a bit, and it was unchecked, and it. And it was unchecked because they didn't want to know. Nobody wanted to be complicit in the behavior, so they just didn't have any checks and balances. Like, we didn't want to know. You know, the managers, you know, of the company—they didn't want to know. So there was no cap. There was no ceiling. And it's not that there's necessarily a cap or a ceiling now, but most most distributors have put in. a report that now shows if it goes, if, if a sales rep is pricing above a certain threshold, you know, then it'll get flagged and then they're just gonna talk to that sales rep. They're not gonna make them change the behavior. And that sales rep might have justification. And I'll give you an example. You might be paying 20% more than you should. Well, not maybe than you should, but you might be paying 20% margin On top of whatever the cost of the product is. And I've literally seen the sales reps march in the room and say, hey, you're charging this guy 20%. That seems a little rich. You know, we're gonna need you to throttle back a little bit. The rep's like, bullshit. This customer is so fucking disorganized. They call me at 10 o'clock at night. They get orders every single day of the week. They don't get their orders in right. So I have to do a recovery or a will call or some bullshit or pay for a courier to get out there. Like, these guys take up 10 of my working hours a week, and you better believe this is an asshole tax. I'm charging them what I think is fair based on how disorganized they are.

Yep.

And this is this insidious cyclical problem with distribution. Distribution wants to keep the customer dumb. And because— what, what should they be doing? They should say, hey, listen, We need to go sit down with that customer and explain to them, based on your inefficiencies and your lack of organization, this is what we're charging you. If you could clean up this behavior, I could reduce your cost by X.

Mm-hmm.

The problem is that's not contracted. That's just a verbal conversation. And then the customer might clean up the behavior for a little while to get the price, and then their behavior falls back to what it is. And then the distributor is like, well, shit, now I gotta raise the price and risk pissing this guy off. But he only did this for like 2 weeks and now it's back to the way it was. So that's the argument that they make, but it's a bullshit argument in my opinion.

Yeah.

The reality is, and this is kind of how I prefaced the conversation when we first started talking about it, the customer disciplines are a big deal, right? Like, just understand, especially when you talk about the cost of diesel right now, right? The average distributor in broadline food service, their average customer's order is probably around $2,500. Right? Maybe $3,000 is the average, right? So they do an algorithm based on that average, and that doesn't make it right or wrong. I think it's lazy, but it's a baseline rule. So they say, okay, if the world is governed by $3,000, right? What is our cost to ship any order, right? Like, let's just, if we just take How many total orders did we ship? What was our total labor cost in the selectors and the loaders and the drivers and the managers? What was our total fuel bill for the month? They could take all of their total expenses, and they can take all of their total deliveries, and they can divide total deliveries by total expenses, and they come up with a number. That number happens to be probably somewhere around $300, $350 per order. That's what it costs them in overhead to ship a truck. And so if they're looking at, okay, our average, our average customer takes a $3,000 drop, that means we've got roughly 12%, 11.5%, 11.75% in margin just to neutralize that cost, right?

Right.

So basically, if you're a customer and you're buying less than $3,000, they're gonna make sure that you're paying more than an 11.75% Yes. Markup, because they got to cover their cost, right? Unfortunately, if you're buying 5,000, they're not saying, oh, well, we can reduce that 11.75% down to 9%. They don't do that, right? Because they just created this fixed rule, like the bare minimum is 11.75% markup for everybody, period. Unless you're below the average, then we're going to charge you more, right?

So, uh, people don't know, so they don't ask, right?

Right. But, but every business is running on a P&L just like the restaurant. They've got their fixed cost. And we should know these numbers. We talk about these numbers, right? Like, what's your per person check average? Why does that matter? It matters to me on what my PPA is, or some people might measure GCA, which is guest check average, right?

Yeah.

Some restaurants don't put in the headcount at the table, right? So they're just looking at total checks. And you can look at total checks. How many total checks did I run last month? What was my total sales divided by total checks? Boom. Now I've got my guest check average. My guest check average is $40. Like, distribution is looking at their business the same way as a restaurant. When my guest check average is $40, my focus is to get that $40 higher. If I already got you at the table, how do I get more money out of you? Right? Because that's exactly more profitable without me having to do more work or attract more customers, which is more expensive. So, that's where we focus on our employees and training and education and make sure that they're offering items and, you know, that they know what's profitable for us to sell and to recommend. That's the restaurant business. Well, food service distribution is the exact same. Okay. We know that our average cost for a truck is $350. Our average order is $3,000. We want our salespeople to act like servers or bartenders and go out and get that $3,000 higher. Right? And the higher that they get it, the better it is for us. We didn't have to attract more customers. We just had to sell the existing ones more. It's the exact same thing. Right? It's business is business is business. When you distill it all down, it all pretty much works the same.

Business model is a business model. It's just they have a different product.

P&L is a P&L. Yeah. It's 100%. 100%.

Yeah. Yeah.

So hopefully that kind of puts stuff in context, but that's our big point to leverage. And that's kind of the baseline. That's where we start. If we know that the average distributor is shipping 3,000 bucks per average delivery. If I know that I'm buying 5,000, I know right off the bat that I have leverage with that distributor, and I'm gonna go make sure that I'm not paying that $3,000 rate because I'm a better customer. If I'm spreading my business out to 4 or 5 distributors to try to save money and my average drop is $2,000, you just lost it. But it could be $8,000. Holy shit, that gap.

Yeah, if I can—

first, I want to shore that gap up. Let me consolidate so I can start working towards that $8,000 because I have more leverage than even the $5,000, right? Now I got a big stick and man, that's where we start to make big changes. I mean, 9% reduction. Can you imagine my average client, 9% reduction? I can't believe that. We were just running the numbers recently. We were updating our website and, you know, our consultant on the website was like, oh, you gotta have some testimonial. Like, what does your average customer say? I'm like, shit, I don't know. We should look. It's a big number. Um, so yeah, that's that. I'll shut up.

Yeah, and you can head over to globalrestaurantsolutions.com if you want to check out Beau's website, check out some of his testimonials and stuff like that. Um, one of the things I do want to hit before we kind of wrap up today is that, you know, coming up for the Restaurant Success Summit, Beau— Beau is going to challenge— I always love, I love having Beau at the summit because he likes to challenge the people who attend. And without giving too much away, all right, what commonly chased metric— because we're— I know you're talking about like you're chasing the wrong metric— what's a commonly chased metric that you're going to expose that they should— that people should examine instead of chasing the wrong metric? What's that? What's that? What's one metric you think they should start looking at and chasing besides just like, what's my case price?

Yeah, well, that's it. Stop. Focusing on line cost.

Yeah. There you go.

And focus on bottom line cost. Right? So this is that idea of, oh, $30 for these gloves versus $40, or I was spending $1.3 million. Now I'm spending $1.1 million. Nobody has time to shop every single line item. I'll do that for you. What you need to focus on is the bottom line. What was your bottom line spend? What was your bottom line earnings? Right? What was your savings? Those bottom lines are the ones that I want you to focus on. I'll take all the trouble and damage and the brain damage for sure out of that equation, but you've got to help me by getting your people to stop focusing on line by line, right? That's a consumer mentality. And I get where it comes from. We don't train people in the industry to do it. So they bring this tribal knowledge as a consumer over into the business and say, hey, I go to Safeway to get all of my food, but I go to Ralph's to get my toilet paper and my cleaning chemicals because they're cheaper. And I go to the farmer's market to get my produce because it's cheaper than the grocery stores. Like, that's cool. As a consumer, you've got a fixed amount of money you're making. So you have to figure how to budget that money and make it make sense. As a company, when you don't have the effort and energy, time or money to piss away on that, and this is, this is the focus. If I can take a guy in the back of the house who's spending 5 hours a week chasing cost, right? If I can fix the cost for him and say, okay, now I gave you 5 free hours. Here's what I want you to do with those hours. You're gonna spend those hours in 2 places, right? The 2 people doing the one thing that you need, right? So this is kind of my famous quote is we have 2 different people, the ones that pay us and the ones that we pay. That's my audience. That's all I care about. And I want one common outcome from those people. And that is Loyalty and shit. I can't remember my own saying. Doesn't matter. At the end of the day, I can say that I want that one thing. I want loyalty at loyalty and advocacy. Sorry. So I want my people in the back to be loyal to me and advocate for me. I want my customers to be loyal to my restaurant and advocate to other customers for me. Both people doing the same thing. So if I if you're the hey, I'm in the kitchen and you were spending five hours a week shopping. Where do you think I'm gonna put that 5 hours? I'm gonna have you spend more time with your guys in the back and your girls in the back, coaching them, making them better, creating loyal advocates out of them. And I'm gonna split that 5 hours. I'm gonna have you spend 2 and a half in the front of the house going and making table touches or working with your servers, talking to guests, doing whatever it takes to create loyal advocacy in the front of the house and the back of the house. That's where that 5 hours goes. And I promise you, The return on that investment is far greater than what you can ever save me on a box of gloves, guaranteed. Guaranteed. We'll do that part for you anyway, right? So yeah, sorry. Oh, I get real passionate about that.

You do. You do. It's good.

It's good. But listen, the pride of my restaurants, you know, my 2 spots in Arizona that I recently sold, my pride was 4 years constantly, never ever once wavered at a 4.8%. on Google, TripAdvisor, Yelp ever. And you can go read my responses. I don't respond to people. I get unsolicited 4.8s over and over and over again without any kind of marketing promotion bullshit.

Yeah.

People did that because where we spent our time and energy with our people was right there to create loyal advocacy. And when I had that in, in my team that I paid and the people who paid me, butter, butter, dude. We're making money. People were our loyal advocates. We didn't ask them to be. They did it unsolicited. And that's where I knew I was putting the right money in the right place, not chasing cost and doing all that kind of bullshit. Anyway, that's my soapbox.

That's a good one. One of the things I do talk about a lot in, uh, What the Fork, the new book coming out, is— and you can probably relate to this too— and this is another thing I think independent restaurant owners have to take a look in the mirror about. And I have this argument that I say how you spend money Is how people spend money with you.

100%.

Yeah. So if you're like, you want to sit and nickel and dime your vendors, don't be upset when your guests nickel and dime you about all the little extra charges and little extra things, because how you spend money is how people spend money with you. That is—

I take it, I take it another way. Like, if you're just throwing money at problems, um, hey, the Robo Coupe broke, we need a new one. Sweet. All right. Here's the credit card. Go get one. Not that that's not important, but I learned this in my first restaurant, and it was an eye-opener. You got a budget. So I have a budget. Better carry your shit because guess what? You've got no budget dollars left for supplier equipment right now. You can't pull it from anywhere else. You don't have any left. You're gonna have to wait two weeks till the next budget, and then you have to shoot your whole wad on the RoboCoup, which means you can't replace anything else. So take better care of your shit. Like, sorry, guess what? Escoffier didn't have a RoboCoup. They were fucking mincing and brunoise and shredding and doing shit. Like, you're just gonna have to fucking do it the hard way. Sorry.

How am I gonna survive without a RoboCoup, right? What do you think they did before RoboCoups, right? Take better care of your shit. That's it. So if every independent restaurant owner listening today completed one food cost audit and took one action with their broadline distributor this week, What would those 2 actions be? One food cost audit thing, and then one action with their broadline distributor. What would those 2 actions be?

All right, the very first, the food cost audit would be if you don't have your recipes costed, cost your recipes. Um, if I'll tell you what, I'll take that a step further. This is crazy, but this is what I'm gonna do. I will give you a free piece of software to be able to do that for you.

You're doing that at the summit?

I am doing that at summit, but I'm jumping ahead now for anybody who's listening, this, this free software. There you go. And I'll talk about the software in just a second. Yeah. But this, yeah, the software, Is, I'll talk to that in just a second, but let me tackle the second piece, the vendor piece that you do.

Yeah.

So food cost, make sure you have your recipes and then make sure they're costed. The vendor piece is get that master product list and build your ABC list. Do that discipline. Once that discipline's done, then you could sit down with your vendor and say, hey, here's everything that I buy. Here's how we qualify it. You might have made assumptions because everybody that you talk to thinks they have to have this kind of turkey breast. It's got to be a 2-muscle, you know, double lobe turkey breast for their deli sandwiches. That's not us. So I don't know how many items you're projecting what everybody else's standard is on us, but we haven't told you otherwise.

Right.

So we're paying for a premium for something that's more than it is what we need it for. All we're doing is a turkey melt on our fucking kids menu. And it's $5. I don't need a double load $90 account.

I don't need the high end. Yeah. No, right.

It could be a terrible example, but you know what I'm saying? Oh yeah. So after you do that ABC, sit down with your vendor and say, hey, let's just rationalize. Where are these C items or potentially B items that we could look at that you have an alternative for? The average distributor stocks somewhere in between 5 and 25 different options for every single item you buy, right? The average distributor probably has 40 different SKUs for French fries. Right? There's 3 competitors in the French fry landscape that literally knock each other's recipes off. So if you can buy this 3/8 coated French fry from Lamb Wesson, I guarantee you Simplot and McCain also have a match for it.

I know.

Your distributor might buy truckloads from Simplot, but you're speccing a Lamb Wesson that they're buying less than truckload, and the variance on each case and the freight differences could be $4 to $6.

Yes.

For the exact same item, they're just not buying enough of it over here. So you're paying $6 more for a product match that's $6 less over here. So it's a very worthwhile exercise. It's a great way to go kind of groom and manicure your own product list with who you're already buying from to just create realization for them like, hey, there's other shit you could be selling me. You should be aware of it. So those would be my 2 tasks. Now, can I, can I take a second and talk about software?

Please, please.

Okay. So I have spent my life on this task, and I'm not literally not joking. I built my very first food costing program back in 1994 on a really dynamic VLOOKUP multi-tab Excel spreadsheet that had a shit ton of automation. It was really good. And from there, We then ended up building a software company. That software was so good, we ended up selling a white label to a major distributor. Then now we've taken it to a whole other level. There's a lot of products out there. And here's the problem. And when I talked earlier about being a restaurateur, a chef, and an operator, but also working in distribution. You know, and not, not being able to close that gap. That's a big problem. Not speaking the language, understanding how both sides work. The same is true in the software world. So there are great products out there. Like Restaurant 365 is a great product. There's all kinds of crazy little ones. ChefTech and Yellow Dog and—

GetMeats, GetFilet. Yeah. There's there's a shit ton of margin edge.

Margin edge, yeah. Here's the problem: they're almost all of them are written from the same code, from an accountant's.

Yeah, from definitely from an accountant's. Yeah, not from a mindset.

Because when you create a business, you say I'm building this for this outcome, and most of those businesses were built from an outcome that was to make closing the books. easier and faster at the end of the month. I look at that very antithetically. I don't think that that is the opportunity. I think the opportunity is to create awareness in cost of goods and theoretical food cost and to be able to measure the difference between the two so that you can take actionable steps immediately to reduce food costs because that increases profitability. And it also, it Its focus is prime cost and reduction of prime cost, right?

Yeah.

55 to 60 cents of every operator's dollar that goes into the till goes straight back out towards cost of goods and labor. So is that as good as it can be? We want to find out. So here's the challenge. And this is a real challenge. And this is what I've spent probably the last, literally the last 10 years focusing on. When I look at all those companies, I look at what's the barrier of entry? And the barrier of entry is cumbersome. It's so cumbersome. So the first thing you have to do is you have to get your order guide, you have to load your order guide up, then you have to get your invoice system to speak to the distributor so you get that in, then you have to get your POS system to speak to that software so that revenue comes in. And that's the delta of the 3 things. If I know my recipes, how much I purchased, and how much I sold, I should be able to triangulate all of that beautifully. No theoretical cost to the minute. But getting all of those products uploaded, all that information uploaded, then going out and building each one of the recipes is super, super cumbersome. So there's— those are 3 big barriers of entry.

Yeah.

So for the last 10 years, that's been the focus is how do we reduce that barrier of entry? So this software, it's called Forkast, F-O-R-K-A-S-T. And it, it is a forecasting tool that is done with incredible precision.

Mhmm.

Where we have removed the barrier of entry in 4 giant places. So you tell us who you purchase from. We send them a letter that tells them, okay, here's how you're gonna take all that customer's data, their order guide and everything, and here's how you're gonna send it back to us in an email. When that comes back, it's automatically loaded. Here's how you're gonna send their invoices to us. That's automatically loaded. Customer never touches it, doesn't have to do anything. We have an index of 720,000 different pack sizes.

Wow.

So 6 number 10 cans can look 12 different ways on 12 different distributors' invoices. So we just have a line that runs across this big database that says, okay, here's every way that a 6 number 10 can could be listed. But it equals a 6 number 10 can. We know that the FDA or the USDA's minimum drain weight on every single number 10 can is X percentage. So this is what your yield is according to what the packing standard has to be. So your yield's already calculated. We know exactly how many usable ounces of product you're gonna get out of a number 10 can of whatever product you buy. So everything is there. Now all you have to do is put in your recipes. That's a little easier said than done, right? So now I gotta find them or write them or make them. So we have a really cool piece of AI tech built into ours. You can take a picture of any existing recipe, whether it's written or whether it's, you know, in Excel or in Microsoft Word or whatever. You can take a picture of it and this AI parser will rationalize every word in each step of your ingredients and find what matches that and automatically build the recipe and say, hey, according to what you sent us for a picture or uploaded from a Word document or Excel document, This is what we matched according to the product you buy. And as a chef, all you gotta do is look at it and say, yeah, that's it. Or no, actually, it's not artichoke hearts. It's whole artichokes on a fresh one. I'll change that item out. Boom. Recipe's done. Done. The 4th barrier of entry, which is a really, really huge one that most people don't talk about, is inventory. So—

Oh, inventory.

After you set up your inventory areas, Counting it can be very cumbersome. So we've rolled out a really cool functionality where it's literally talk to inventory. So you say what section you're in counting, and you just walk through and say 6 number 10 cans of black beans, 4 number 10 cans of pinto beans, 4 cases of fryer shortening, 3 bags of buttermilk pancake mix, 4 gallons of pancake syrup. That's it. It does that same type of reading technology where it says, okay, you said this word, this matches this ingredient on your list. Boom. Inventory's done with that talk-to-text function. That's how we think. That's how we talk. And instead of having to transcribe it, you just hit the record button when you walk into the inventory area. So we've removed 4 giant barriers of entry.

Yeah.

The 4th, actually, I skipped over the 3rd, and that's the most important. We have integration with 99.9% of POS companies out there.

Oh, that's cool.

And yeah, I would say you have to spend a shit ton of money to go to a POS company to get them to integrate with your software. Ours integrates with 99.9% of them. So that automatically pulls all the PMIX data and it actually runs a query and pulls PMIX data every half an hour. So you know what your live food cost is per shift based on the weighted value of the food cost of each plate and how many of each plate you sold.

Wow.

Hey, today your theoretical food cost was 26%. Great job. Tomorrow it might be 30%. You're like, why is it 30%? Because we sold a lot more of our high food cost items, burgers and steaks and whatever. So holy shit, we better tell our staff to, hey, start focusing more on the salad, start focusing more on the fried items, whatever, our better food cost items. It's that accurate and literal. It's crazy. Anyway, so that's the offer that I'm throwing out on this podcast.

So let's do so that I don't kill myself or get killed.

Today's September 10th. I don't know what day this is actually gonna be posted. Probably within a week.

It's gonna be posted today.

So okay. So I'm gonna put a limit on this till till the end of the month. The offer's over October 1st.

So let's say, let's say like, so today's September 10th. Let's say it's September 11th till the end of the month, till the end of September, right?

It's a, it's an act now because I'm crazy giving it away.

Act now. You are crazy, dude. You are so crazy to give this away. And here's what I would say, like, act now, get access to the app, and then if you got problems with it, come to the summit, corner Beau, and we can work it out. And we can help you work around and help you fix out whatever problems you're having with the app. Yeah. I know right now you're gonna have problems because, like, you know, most people are not very—

It's like a charm, but typically what we do— this is the thing. We've removed a shit ton of that out of the way, right? When you're buying a piece of software, you're getting a free piece of software that has all of your data already loaded into it, right? That's like— the only responsibility on you is, is building the recipes. We've made that easy. Taking inventory, we've made that easy. So the one thing I would say is it is coded, updated, and tweaked every single day. So we get customer feedback all the time. Like, hey, it'd be cool if you have this function. Cool. We just go write it. We write the code and respond to code requests for new functionality all the time. Anyway, that's it. Thanks for allowing me the shameless plug. And by the way, that offer, we charge $100 a month. So that's $1,200 worth of Free software for a year. Pretty good deal.

There you go. Perfect. So if you want to grab the software from now until the end of September 2026— I know some of my, some of my podcasts get like played over years later, but this is from— this is September 2026 to end of September 2026— go to globalrestaurantsolutions.com, right? Reach out to Beau. He'll get you hooked up with the software. If you want to come down and actually work hands-on and get some even like deeper dive into stuff. I know Beau's going to go through the software in detail at the Restaurant Success Summit. He's got 2 sessions he's doing at the Restaurant Success Summit. One's just gonna be about the software. I don't know what he's gonna talk about— chasing those bad metrics that you shouldn't be chasing anymore— and he's gonna set you up for success with that. But come down, join us 3 days here in Scottsdale, Arizona, October 19th, 20th, 21st. 3 days. It's the best time you're going to invest I mean, all your meals are taken care of here. Uh, we start at 9 AM, we go all the way till 5 PM. It's 18 workshops in 3 days, ladies and gentlemen. 3 days, 18 workshops, amazing speakers. Beau Bryant.

Amazing speakers. Not myself, I'm not counting myself.

I'm saying everybody else that you went through on that list. I only invite like rock stars, dude. Yeah, dude. Kelly Jones, Dan Carroll, Zach Oates, Beau Bryant, me. And Doreen Gorman, come on, you can't get a better lineup than that. These people are all— I mean, yeah, and I'm going to be doing a lot of stuff with What the Fork, the new book. I got a lot of deep dive, a lot of psychology stuff. I'm really going to help you see like what's holding you back, what's that bottleneck that's stopping you from making that, making that leap from where you are to where you want to be. And I'm going to give you the tools and stuff like that and the resources and the guide. And all my speakers— the other thing I love about the Success Summit is that Unlike the big huge like box conferences where you go and you're like, you go see Bo speak on stage at the NRA show and then Bo speaks and then also he's off to do something else and like he disappears and you have questions but you can't find him. I mean, these, these guys are at the summit, you know, they're hanging out, they're on the side. If you want to go corner them, just grab Bo. Hey man, can I ask you like a couple questions? All my speakers are very, very helpful in a sense that they want to see you succeed. All of them do. I can tell you that from experience. I only invite people to speak that I know want to help other people and that don't care. I mean, don't— I mean, they will give you their time if you're willing to listen. If you're willing to implement, they will give you their time. You just got to take the action. That's all you do. And the first step is get your butt down to the Restaurant Success Summit.

Yeah, no-brainer.

That's a no-brainer. That's a no-brainer. All right, good stuff. Thanks again, man. I appreciate it, my friend. It's always a pleasure having you on the call.

Thanks, brother.

All right, if you need to get a hold of Beau, globalrestaurantsolutions.com. Reach out. You got till the end of the month, man. I'm telling you right now, you don't understand what kind of a deal this is to get free access to software. That is a game changer for any independent restaurant owner listening right now. Beau knows. I mean, was— we were making a joke like, Beau knows. Yeah, Beau knows. All right, Beau knows big time. And if you want to get on the— on— you want to get on the fast track to making a lot more money This is the way to do it, right?

Yep. You cannot manage what you don't measure.

You cannot measure what you can't measure. You can't measure what you can't improve, what you can't manage, right?

Yep. That's it. All right. Thanks, brother. See you, buddy.

Bye.