Case Study: The Paris CreperieBrookline, MA | 2015-present
After a good start but then several years of rudderless operation, Paris Creperie and its absentee owner, Chuck Silverston, engaged Henry Patterson to help. Henry mentored two long-standing Paris employees, Nick Mallia and Jack Ludden, to restore health and profitability to the Creperie. After the first years of turnaround, Nick focused on growing the Paris catering business while Jack became the GM. The restaurant’s debts were formalized and repayment proceeded on a schedule. The menu was refreshed, a new graphic look was created, the furniture and equipment was replaced, etc. etc., all out of the cashflow. The business had turned a corner.
Meanwhile, Henry had become intrigued with the business management strategy known as Open-Book. He sensed its potential as a way to address what he perceived to be a serious flaw in the foodservice business model, viz. the vast majority of staff people upon whom foodservice depends do not have viable jobs — career path jobs that pay a truly livable wage and afford long term opportunities for learning, growth and challenge. This means lost sense of direction and low self-esteem for industry employees, endless turnover expense and distraction for employers, and damage to the quality of the experience for guests. And perhaps most importantly, it means a team that is not truly invested in the success of the business.
In the summer of 2014, Henry recruited small business advocate Joe Grafton to join him in crafting an Open-Book training program tailored to foodservice. Henry and Joe saw Paris as an excellent first test case because rapport with the team was already established and the business was nearing basic health. With the absentee owner’s approval, Joe delivered our first Open-Book training program, starting in January of 2015, to train the Paris Creperie team, a “proof of concept” for the strategy we would come to call “ReThink Restaurants.”
The Creperie had shown a roughly $50,000 Net Operating Profit (NOP) in 2014 and was on track to approach $100,000 NOP in 2015. We agreed that if the team could achieve more than $100,000 NOP in 2015, the team would deserve to share in a substantial portion of the overage. GM Jack Ludden followed up each training session with discussions in the restaurant, and the Paris team exploded with ideas and business improvements. Cost of Goods Sold (Ingredient and necessary packaging costs) were reduced by an astounding margin (7%) when portioning tools and procedures were implemented, the menu mix was optimized and the entire team learned the impact of waste. Revenue growth was supported by events the staff created, and by their accelerated social media activities. Menu changes were now viewed through a financial lens as well as a guest experience lens, and star items were promoted, while low performers were eliminated. When the year ended, the Paris team delivered a shocking NOP of $204,000, over 4 times the previous year’s performance.
Today, the culture of Paris is strong. The team has implemented training programs, and with our help, developed training materials to continue orienting new team members to the Open-Book strategy. The team has a variety of committees that manage various aspects of the business: financial reporting, expense management, menu development and marketing. Functions that would traditionally fall to managers (or not be done at all) are being managed by front-line employees. Through profit sharing, compensation has also risen dramatically, with some full-time non-managerial staff now achieving a pay rate of $20/hour. Perhaps most importantly, the improved profitability of the business continues. The company has accrued some cash, a “war chest” they never had before. There is an annual plan developed by the team, and progress against plan is examined regularly. Team members know and understand the profit goal and key strategies of the business. Their profit sharing plan insures continued commitment and the skills they have developed enable them to deliver the outcome in which they now have a very real stake.
The Paris Creperie team at the Boston Pride Parade