Tracy Johnstone 12 February 2023

There is a Hair On My Sweater

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Photo by Alena Shekhovtcova from Pexels

I was a McDonald’s franchisee for 30 years. More specifically, my husband and I were McDonald’s owner/operators, which is a whole other thing. Ray Kroc believed if you owned a McDonald’s, you should know every aspect of how to operate a McDonald’s.

We did well in the quick service restaurant (QSR) business. Really well. But that was not a given. Believe it or not, it is entirely possible to fail as a McDonald’s franchisee. The idea that you get your franchise and automatically become Scrooge McDuck swimming in gold coins is a myth.

We made good money with McDonald’s because we knew how to fine tune that machine. And that came down to one simple precept – count the ketchup packets.

Profits Are Made of Pennies

McDonald’s is a penny profit business. A handful of ketchup packets to a customer will wipe out the margin of the hamburger and small fry they just purchased. If 20 people clock in 30 minutes early this week, you just added, on average, $130 to your labor line. If that becomes the norm, you just added $6,760 to your annual labor line.

You make money in this industry by serving more guests more often, driving average checks, shifts in product mix, and labor line controls. All the other P&L line items matter but no amount of saving on those other lines will make up for out-of-control food and labor. Sales make up for a multitude of missteps but we don’t just want to pay the bills, we want to build cash. Systems and routines are the keys to the kingdom in the food service industry. And every ketchup counts.

Building Profits Means Building People

You can’t be everywhere all the time and wouldn’t want to be. To truly grow a business that hums and thrives, you have to inspire your people, teach them the value of those pennies, and reward them for tracking every cent. You must empower them to operate along with you and let them share in the profits they help you earn. In the end, the best entrepreneurs are the best and most detailed teachers.

Developing people, giving them a roadmap to the next level, and shining a light on the path to success is what builds and sustains a team that can master those systems and routines, those keys to success. That is your job, business owner.

When your team is equipped, appreciated, and rewarded for their good effort, they will count the ketchup packets too.