The Secret Sauce
A recipe for restaurant success
When I was a child, we learned the lyrics to the iconic McDonald's Big Mac song:
"Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun."
The jingle concluded with the verse, "You deserve a break today, at McDonald's." We would sing this song, I am sure to great annoyance to my parents, on car trips. And the marketing work beautifully, because my sister and I would pester my father to pull over to a McDonald's for a lunch break.
My father was an independent restaurant owner. And in the 1970's, fast food restaurants were making their encroachments into small towns across our nation. He decried the competition and loathed the fast-food style of service. As a result, my father refused to stop the car to dine at that "clown's" restaurant.
Thinking back to the McDonald's jingle, I knew what all the ingredients were save one. What the hell was "special sauce?" Nobody knew and the folks at McDonald's kept it a secret as well. It was if the overly salty twin burger delight, served with lettuce, cheese, pickles, onions on a sesame seed bun simply could not be duplicated because the secret behind McDonald's "special sauce" was locked away in a vault and more tightly guarded than the gold at Fort Knox.
In the 1970's, all the burger franchises chasing the Golden Arches, adopted the same marketing schtick. They created their own versions of "special sauce" as their recipes for success. The "special sauce" game got so overplayed that by the time I got to high school in the '80s, the whole "special sauce" war had become a joke. So much so, that the joke made an appearance in the movie, Fast Times at Ridgemont High. (See movie clip here.)
As I transitioned my own restaurant career from dishwasher, to cook, to manager, I started looking for other restaurants' secrets to success. I worked in my father's restaurant, and in other operations about the State of Minnesota. And back then, success was defined by whether the restaurant had money in its bank account at the end of the month after making payroll, vendor payments and rent.
I asked the owners I worked for how they set up their restaurants for profit. If I got a coherent answer at all, it was usually something vague like, "keep your food cost below 30% or, watch what ends up in the garbage can or, provide good service and your customers will come back." I started to believe that all these restaurant operators knew the recipe for success, but just like McDonald's, they were keeping it a secret and hidden from my view. It was if the "special sauce" profit recipe was their very own creation and if their competitors got a hold if it, they would be ruined.
As I grew my career in the '90s, I approached my operational job as a scientist in a lab coat. I was determined to break down the profit "special sauce" recipe. In my effort to learn the ingredients that make a successful restaurant, I studied P&L statements and took notes on food, liquor and labor cost percentages. I studied operational SOPs and how to set up preferred vendor agreements.
I worked for some very successful restaurants, and I had access to their finances, and I had believed that I peered into their vault and got a glimpse at their "secret sauce." I was confident that I was armed with enough knowledge to open and operate my own restaurant. So, living out my own punchline (I know how to make a small fortune in the restaurant business, start with a large fortune,) I opened my own restaurant in 1999. That story is well documented in my book, Restaurant Management, the Myth, the Magic, the Math.
What did I learn?
Most independent restaurants that survive the first two years find profit by "trial and error," and not through a well thought-out and executed plan.
It’s not that owners don't want to share their profit "recipe," they simply don't really know what it is. Over time, they have adjusted it with a pinch of labor and a dash of social media, but they never write down the recipe.
They do, however, sense that if they stop doing what they are doing, they will be in trouble, but most really can't define what it is that they are doing that yields profit.
Ultimately, I learned that the "secret sauce" recipe for profit is just as much of a secret to independent restaurant operators as it is to the teams that run them.
In my book, I published the recipe for restaurant success. Here is a hint, it has everything to do with how a restaurant manages its overhead as a factor to Cost of Goods, and almost nothing to do with managing food, liquor and labor costs as a percentage of sales. As it painfully turned out for me, and countless other independent restaurant upstarts, we were all following someone else's "secret" profit recipe. And those restaurants’ particular mixture of financial ingredients could only produce a profit in our stores if we mimicked their identical overhead and sales conditions. Which is nearly impossible to do, even within a multistore concept of like restaurants.
My restaurant “secret sauce” profit recipe is no secret. I published it in my book and shared it with the restaurant community. It is my goal that every person that dreams of opening a restaurant knows the profit recipe for success. Dreams of independence start by making sure you own your business, and that your business doesn’t own you!