Serving up higher performance at Quiznos

Every day, restaurants ring up $1.5 billion in sales at nearly one million locations worldwide. In a highly competitive industry that is constantly changing, franchise executives must respond to market changes and consumer trends, as well as optimize the dining experience, in order to compete. Developing a unified mission statement, managing unit-level planning and meeting expansion goals are also key challenges facing franchise restaurants in this dynamic environment.

To stay ahead, smart organizations monitor their operations and depend on a dynamic, integrated planning process to guide their decisions so they can grow the business and quickly adapt as challenges arise.

Until recently, Quiznos - like many restaurant chains - was using spreadsheets for budgeting, financial reporting and forecasts. As a result, business units created their own plans, which created a lack of consistency across the organization. This manual process also created a disconnect between reporting actuals versus the company's plan, and it created a long cycle time for consolidating financial results, generating reports, measuring actuals and creating the annual plan.

Another challenging factor was the company's franchise business structure, which consists of 35 separate legal entities across five business segments. Executives were challenged to reduce the amount of details around these entities while maintaining accurate plans and financial statements.

As a top growing restaurant chain, Quiznos selected JCB Partners to implement a solution that would help the planning and financial systems and processes keep pace with company growth.

The goal was to implement a solution that would help Quiznos standardize, integrate, consolidate and simplify the financial reporting and planning process across all of its business units. The first step was to implement a financial reporting tool that would integrate the company's general ledgers, automate the consolidation process, and support standardized reporting across the business.

The planning solution was designed to serve as the cornerstone of the company's enterprise-wide financial performance management solution. This sophisticated solution gives managers real-time visibility into resource requirements and future business results, which helps improve version control, keeps everyone tied to the same set of numbers, and creates a more meaningful relationship between actuals and budgets.

Further work was done to link the reporting and planning solutions so that data could be easily shared between the two. In addition, the complete solution was integrated with the company's human resources and payroll information, enabling managers to better view and control headcount-related expenses.

As anticipated, the new solution helped solve many of the company's financial and planning challenges and led to a more streamlined process. Today, consolidations are completed in a matter of hours instead of days, and the annual budget takes weeks instead of months to prepare. Specifically, the financial reporting and planning solution helps Quiznos:

• Integrate its general ledgers and create standardized financial reporting across the business;
• Reduce monthly close by automating the consolidation process;
• Shorten planning cycles to support monthly forecasts for operations;
• Initiate driver-based planning to improve forecast accuracy; and
• Measure sales, costs and margin performance against plan.

Further, the company's business structure was simplified by building the planning process around the five business segments instead of the 35 detailed entities: franchise operations, food distribution, equipment, advertising and corporate function. Rather than all 35 entities preparing standalone financial statements, today the five primary business segments use the automated system to create the budget.

Linking the planning and financial systems to the human resources system has also reduced time and effort in the HR department. Whereas information such as raise percentage, bonus percentage and hire date used to be tracked manually in a spreadsheet, HR managers now save a significant amount of time using the seamless new process that is integrated with the company's overall planning system.

In addition to streamlining the company's financial planning and reporting process for Quiznos managers, eliminating spreadsheets has also made company auditors much happier in terms of regulatory compliance. Today, the company has fewer reporting errors, and the new solution allows for much tighter security and controls around different versions of a budget. Now, management can determine who sees which versions, and who can make adjustments.

Perhaps most important, the financial planning and reporting solution supports the company's new focus on driver-based planning. Since implementing the solution, the company has tied its entire P&L to gross margin so that all revenue and cost of goods sold are linked to key drivers, such as same-store sales and the number of stores the company plans to open. Now, the company can effectively use a key set of business metrics to drive all of its financial planning, making the entire process more efficient, more effective and more profitable.