Background
Robert Song, Maru Hospitality Group’s founder and president, brought a fresh concept to Michigan in 2009 when he opened the first Maru Sushi in Okemos. Along with his chef, Moon Yang, Mr. Song built a chef-driven concept with a passion for incorporating love into every dish and every guest experience. His recipe for success soon expanded into markets across Michigan, with new locations opening in Detroit, East Lansing, Grand Rapids, Kalamazoo and Midland.
A second concept, Ando Sushi + Bar, tucked away in Grand Rapids’ Westside neighborhood, has become a favorite local spot, welcoming guests with bowls of steaming ramen, sushi rolls, Asian-inspired sharing plates, and classic cocktails with a twist.
As Maru Hospitality Group grew, the company never strayed from its roots. From the California-sourced premium sushi rice, to the freshest fish and vegetables, and the scratch-made sauces, the emphasis on craft is embedded into the culture and guest experience of Maru.
Challenge
Not unlike many restaurants starting out, the company found QuickBooks Desktop met its initial needs. But, as the restaurant business grew, controller Aimee Byars began to see some of the drawbacks of QuickBooks. The restaurant locations were using QuickBooks as a tool to pay checks and had to enter invoices manually, which was both time consuming and error prone.
She also said the company wasn’t getting daily sales information. Consequently, she wanted more detailed and accurate data to empower the company to become more efficient. Additionally, she was wasting time on bank reconciliation, spending between seven and 35 hours per month on the task each month for the seven locations.
Solution
In 2017, Maru Hospitality Group started looking for a system that would meet more of its needs. “We needed a system that could cover a lot more bases than just accounting. We weren’t going to pay for something that did just accounting. We wanted a system that was all encompassing,” said Ms. Byars.
After discovering Restaurant365, an all-in-one, cloud-based platform built to help restaurant operators run their businesses more efficiently and profitably, Ms. Byars said Maru didn’t seriously consider other solutions. “We really didn’t look at other systems because there wasn’t anything that seemed to be as robust and well-rounded as Restaurant365.”
Maru specifically wanted a system that would help save on food and labor costs, deciding that Restaurant365 accounting and operations software, along with its detailed reporting, met the needs of the growing restaurant business.
Results
After implementing Restaurant365 in early 2018, Maru Hospitality Group started seeing immediate results. Lorenzo Castillo, accounting business partner and interim general manager at Maru Hospitality Group, was particularly impressed with some of the operational reports, including the actual vs. theoretical food cost report (AvT), the menu item analysis report, purchases by vendor report and purchases by item report because he says the combination of those reports help to drive sales and lower food costs.
By using those four reports in combination, Mr. Castillo said that Maru Hospitality Group saw a sales increase of about $900,000 and a decrease in food product purchases of $300,000 between 2018 and 2019. “Adding those together, it was about a $1.2 million difference,” proclaimed Mr. Castillo. How did the sushi chain do it?
Maru Hospitality Group saw a sales increase of about $900,000 and a decrease in food product purchases of $300,000 between 2018 and 2019. Adding those together, it was about a $1.2 million difference.
For starters, based on insights gained from the menu item analysis report, Maru changed up the menu. “Overall, we reduced our menu options by about 20% so that we could focus on our more profitable and more popular items. We identified items that were opportunities and handed those over to our culinary team so they could change the recipes to make them better cost recipes and increase sales,” he explained. “We saw sales on items jump more than 20% on the very next menu, just by where we put the item and how we changed it. Then since we lowered the cost of making the items, it was directly related to profits.”
Maru Hospitality Group experienced similar success by using the AvT report. According to Mr. Castillo, the report helped the restaurant group significantly reduce food waste. He cited a particularly significant savings on ribeye steaks.
“For ribeye, we found that it was such a high waste item that it wasn’t very profitable. So we switched from using full ribeyes and hand cutting them, to a vacuum sealed product. Between 2018 and 2019, we were able to reduce over 1,000 pounds in ribeye waste, which would equate to about $10,000 in sales that we were able to keep in our pockets versus going in the trash,” explained Mr. Castillo.
Additionally, the sushi restaurant group gathered data from the purchases by vendor report and purchases by item report and found more ways to cut food costs. “We reduced our food vendors by 10%. And with that, we got into contract pricing with our vendors. We would guarantee sales of products to certain vendors, if they gave us a price break on those items,” Mr. Castillo said.
Key to the reports in Restuarant365 is the integration with the point-of-sale (POS) system. R365 automatically polls detailed data directly from the POS system daily. Mr. Castillo definitely sees the benefit of POS integration. “With Restaurant365 I’m able to work remotely and I can get a picture of what’s happening in the stores just by looking at reports. I don’t have to use the managers’ time or my time to go to the store and gather all the information.”
Beyond efficiencies that drive sales increases and cost savings, Maru also enjoys time efficiencies with Restaurant365. For example, automated bank reconciliation time alone dropped significantly. Compared to its previous manual process, which took about one hour per restaurant if the numbers were in good shape to six hours or more if there were major problems, Maru has reduced that number to minutes for each restaurant. “Last Thursday, it took me half an hour to get through everything for all seven restaurants,” remarked Mr. Castillo.
Even when there are anomalies, Mr. Castillo says that Restaurant365 allows him to easily find the issue. “When the numbers don’t exactly match right off the bat, it’s just a matter of having a strategy to find the problem. Because of how the reconciliation is set up in Restaurant365, I can sort the numbers in so many different ways and find the outliers quickly.”
Maru Hospitality Group also found Restaurant365 to be a useful tool during the COVID-19 crisis. Ms. Byars explained that six of the seven restaurants remained open throughout the pandemic, moving to takeout and delivery only during the dine-in shutdown, then moving to 50% capacity when it was allowed in Michigan. According to Ms. Byars, staying on top of restaurant expenses has been critical in 2020. “It’s been particularly important to watch everything. Without those reports in R365 allowing us to drill down, see that information and cut expenses if we needed to, there’s just no way we would have been able to get through the season. We really feel like we’re starting to come out of it in a better place.”
Reporting also informs labor decisions at Maru, according to Mr. Castillo. “With Restaurant365 and the P&L reports, we created goals for all of our store managers. Pre-COVID, labor cost goals usually hovered somewhere between 32% and 37% based on sales volume. Now our goals have shifted, and everybody is running between 25% and 30% for their goals. So our cost of labor has dropped so significantly that we had to alter our goals. It’s just a more streamlined operation,” he stated.
Staying on top of the restaurant data also helped drive Maru’s promotional efforts through the pandemic, using the daily sales summary in R365 to see fluctuations in daily sales. “If we needed to see an uptick in sales, we could push that out on the marketing side quickly, run a special and we would bring those business numbers up relatively quickly,” commented Ms. Byars.
As the company controller, Ms. Byars spends her time in the financial reports. The profit and loss (P&L) report and the balance sheet are the two reports that she lives in, but she also keeps close watch on the GL account detail. “With clean reporting, we can close out the period fast. That definitely wasn’t happening before,” noted Ms. Byars. “Having accurate reports helps influence all of our decisions.”
She also appreciates the convenience of the information she gets from Restaurant365 reports. “If I need a P&L or some financial statements for a specific time period, it’s a couple clicks of the mouse and I have good financials to give to our banker or to the leadership team or to a store manager.”
She noted that with the help of Restaurant365 and the numbers at their fingertips, Maru Hospitality Group benefited from the Paycheck Protection Program (PPP) funds and multiple grants at the restaurant group’s locations. “We often speculate how a restaurant not using Restaurant365 could’ve turned around the applications as fast as we were able in these trying times,” Ms. Byars remarked.
Ms. Byars said the overall benefit of using Restaurant365 is the efficiency and good data output, as well as “seeing the real change and the real savings on all levels.” She also noted that account payable is more accurate with R365.
She would recommend Restaurant365 to other restaurant operators. “I think for all restaurants, big and small, to have a single platform that connects directly to your point of sale is a no brainer,” Ms. Byars stated. “It’s a win-win. It will help you track and save money.”
