Technology: Restaurant POS System Long-Term Planning

Mr. Goodcents’ new POS system enables faster ordering now, and gift cards and rewards programs in the future.

By Lisa Bertagnoli, Contributing Editor -- Chain Leader, 7/1/2007

A growing chain can thrive using bare-bones technology for only so long. That’s why Mr. Goodcents Subs & Pasta, the DeSoto, Kan.-based chain of 115 quick-service sandwich shops, has begun installing updated POS systems in its restaurants. The technology, dubbed Goodcents Information System, or GIS, includes touch screens to make order-taking faster and more accurate.

It also is equipped with software that captures customer information such as names, addresses, birth dates and other special occasions. And soon Mr. Goodcents will use the new system to launch a customer rewards program and a gift-card program.

"It’s an evolution of change," says Vice President of Operations Bob Moreno. "We made a decision a year-and-a-half ago to move into a more advanced phase of the system."

A Technological Evolution

Mr. Goodcents began its technological evolution two years ago, when it started replacing electronic cash registers at the stores with the first iteration of GIS. It included the touch screens and software that tracked labor and food costs and helped franchisees with scheduling. Such software helps the chain keep labor costs at around 19 percent and food costs at or below 28.8 percent, according to Moreno.

The second generation, which began rolling through the system in February, is equipped with database technology that collects information on customers and their buying habits. The database will allow franchisees to send coupons and other offers to customers, initially via direct mail and later on, through e-mail. Moreno expected the database to hold 50,000 to 100,000 names by mid-spring.

About 20 percent of the restaurants are equipped with the second-generation technology; Moreno expects the rollout to be completed by the end of this year.

Installation and training are fairly simple, Moreno says. During installation, the electronic cash register is removed, and two touch-screen terminals are installed in its place. "It takes a couple of hours to link the systems and run the cables," he says. Franchisees take an online training class and can call a toll-free number for additional help.

"It’s a very smooth transition," Moreno says of the implementation.

Mike O’Toole, who owns a Mr. Goodcents franchise in Tucson, Ariz., agrees, lauding in particular the system’s touch-screen ordering process. "The old register, with the little buttons, wasn’t user friendly," he says. But his employees quickly picked up the new system, with its bigger, color-coordinated buttons.

Since his store received the system about nine months ago, O’Toole says delivery has grown to 30 percent from 20 percent of sales. He attributes the growth to the new system. "Before, we hand-wrote everything," a process that led to mistakes and misunderstandings, he says.

Now, O’Toole says, "The order tickets are consistent. Every ‘half Italian’ looks like ‘half Italian,’ not ‘half, what does that say?’"

Order-taking is also three to four minutes faster with the new system, O’Toole says. The order-taking process is so much faster that now one person, instead of three people, can handle phone orders during the lunch rush.

Free to a Good Home

What did O’Toole pay for the system? Nothing. Moreno is so convinced that the new system will increase unit volumes and profitability that the corporation is picking up the tab for purchase and installation. The cost, Moreno says, ranges from $500 to "a few thousand" per store, depending on whether the store has the updated GIS system and whether it needs one or two touch screens.

The technology "allows us as a system to make a huge impact with consumers," Moreno explains. If the system and its easy-ordering capabilities double catering and delivery sales, as Moreno expects them to, unit volumes, now at about $400,000, will increase by 15 percent to 20 percent. Delivery now accounts for about 20 percent of sales systemwide.

Plus, the change is crucial for Mr. Goodcents’ growth. "In order for us to grow the brand and build equity, we have to stay ahead of our competitors, and this is one way of doing it," Moreno says.

Plans for the Future

After franchisees are settled with the second-generation GIS, the company will launch the Mr. Goodcents Rewards Program. The program will use a magnetic-stripe card to store customer information; the card will be loaded with points every time a customer visits a Mr. Goodcents location. The points will be redeemable for free food and other prizes, and will also entitle customers to a discount, free cookie or other to-be-determined gift on their birthdays.

Then the chain will implement the third phase: an electronic gift-card system to replace its paper gift-certificate system. "Those are concepts we’re discussing right now," Moreno says.

The upgrade comes at a good time in Mr. Goodcents’ life cycle, says Dennis Lombardi, executive vice president of foodservice strategy at WD Partners, a Columbus, Ohio-based restaurant design and consulting firm. Installing new technology is a facet of "the evolution of the brand," Lombardi says. Brands that have grown to 75 to 100 stores are well-advised to consider installing updated technology that captures customer information and allows for the launch of gift cards and rewards programs, he says.

And while those programs are important, "the real benefit is to read what’s going on at the store level: menu items, the menu mix, changes to the menu mix when new items or limited-time offers come out," Lombardi says.

And the corporate investment is a wise one, provided that franchisees use the system to its full extent. "If you understand what a system can do, and use that to do something to decrease labor hours or build sales, the system pays for itself," Lombardi says.