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CASE STUDY: NEWK’S EATERYTHE NEWK’S WAY TOLABOR COST CONTROLIf yo u ’ r e l o o k i n g fo r atantalizing variety of madeto-order menu choices forpick-up or in-café dining,then look no further thanNewk’s Eatery.Once you taste their fresh-tossed salads, ovenbaked sandwiches, California style pizzas, ormade-from-scratch soups and experience theirrefreshing and stylish atmosphere, you’ll knowwhy customers continue to return to Newk’s.Newk’s first location opened in February 2004 andadded some pizzazz to the sleepy college townof Oxford, Mississippi. Now, as part of the fastestgrowing segment in the restaurant industry,Newk’s proudly promotes their 31 companyowned and franchise locations, and plans to openanother 20 restaurants in calendar 2011.A s s u cce s s fu l a s t h ey a re, t h e te a m atNewk ’s began noticing a problem as theygrew. Managers were using disparate andc u m b e r s o m e p ro c e s s e s to c re ate t h e i rschedules. Some used pen and paper, whileothers were using spreadsheets. Both solutionstook an exceedingly long time. Scheduling errorswere common as well—managers occasionallycopied an incorrect, older schedule andposted it without catching the issue. Outdatedschedules were left posted on bulletin boards,Challenges Managers using disparate and cumbersomeprocesses to create their schedules. Scheduling errors commonplace. Outdated schedules often postedby accident. No corporate-level visibility.Solutions & BenefitsHOTSCHEDULES 75% reduction in time to create schedules 0.6% reduction in labor costs initially, with2-3% predicted without increase in hourly rate Won EEOC wrongful termination case usingDigital Logbooks

CASE STUDY Newk’s EateryPage 2creating confusion amongst the staff. What’s more,as Newk’s grew and added locations, the team hadno corporate-level visibility from a reporting andmanagement perspective.Stephen Hinkis, long time restaurant industry veteranand current Vice President of Franchise Operationsfor Newk’s said, “Everyone knows there are manychallenges in the restaurant industry, particularlyaround managing labor and labor costs. Wewanted a tool where we could analyze and evaluaterestaurant performance in real time, comparingactual hours used compared to plan. We neededto see what was happening without having to callindividual managers to determine staffing hours.”The team began researching scheduling and labormanagement solutions and quickly settled onHotSchedules as the best option for Newk’s.Adam Karveller, Newk’s Director of InformationTechnology noted, “ What drove us to adoptHotSchedules is that it’s a technology-basedsolution that is centralized, allowing us to look outacross the restaurant level.”Our franchisees continue toreport that the time and costsavings are real, validating thatwe have the right technology inplace with HotSchedules.- Stephen J. Hinkis,VP of Franchise OperationsAloha, HotSchedulesHot Schedules was rapidly adopted andimplemented, and the team was pleasantlysurprised at the ease of integration with their AlohaEnterprise POS system. “The integration was 100%seamless,” said Karveller. The HotSchedules teamis really good at what they do and there’s very littleto do as an IT administrator. That’s really important,especially when IT resources are scarce.”As with many in the restaurant industry, users werea little suspicious of technology. Karveller said,“Getting people to accept something new anddive right in and start using a technological tool isalways a challenge in this industry. But once theyget in there and get past writing the first couple ofschedules, everybody changes their tune.”HotSchedules has on-demand training via theHotSchedules portal to help users become fullyfamiliar and comfortable with the solution. Userscan attend either live, moderated sessions with aHotSchedules trainer, or a pre-recorded sessionto walk through the functionality of the toolset.Karveller noted, “The advantage of the moderatedsession is that it allows you to ask questions realtime, but with HotSchedules, it’s also very easy toreach out and talk to someone via the toll free 800number or email. HotSchedules makes it easy to getup and running right away.”Immediately, positive change began occurring at theNewk’s restaurants. Using the scheduler’s “createfrom template” and “create by copy/paste” featuresallowed managers to reduce the time it took tocomplete the tedious scheduling chore. Odair Ferro,general manager of Newk’s most successful location

CASE STUDY Newk’s EateryPage 3you document and find critical information. It’s simpleto stay organized because the DLB includes all thecapabilities managers need and use most. The DigitalLogbook also serves as an audit trail that can be ofbenefit in EEOC cases because employee incidentsare quickly and easily searchable, as needed.said, “As soon as we implemented HotSchedules,we went from taking 3-4 hours creating schedules to45 minute, an hour, max. That saves a lot of moneyon wasted labor and allows us to be more focusedon store operations.”Communicating Like Never BeforePart of what makes scheduling easier and fasterfor managers is the ability to share information inthe HotSchedules portal. HotSchedules enablescommunication on multiple levels across locationsand within individual locations, and quickly becomesan integral part of the workplace and culture.Ferro commented, “With HotSchedules, managersdon’t have to remember staff availability andrequests. The responsibility is put back on thehourly partner to make the request through theHotSchedules portal so that the manager canaccount for everything as they build the schedule.”Without exception, restaurant managers havenever had a better tool for corresponding with theirteams. Ferro continued, “HotSchedules is a greatengagement tool, and we can now communicatewith our employees like never before.”Documentation That Stands Up In CourtA n ot h e r a i d to in -s to re an d cros s- co m p anycommunications is the Hot Schedules DigitalLogbook (DLB). The DLB is designed to simplify how“We were in the unfortunate position of needingreally accurate logs to combat a recent workforcecommission case. A previous employee claimedthat she had been wrongfully terminated becauseshe hadn’t been properly informed of the schedule.We were able to utilize features of the HotSchedulesportal and the Digital Logbook to show exactly whenshe had logged into the system and viewed theschedule. We won the case,” Hinkis stated.When calling HotSchedules,I have a wait time of zero toget a live person on the phone.They’re also very quick withthe resolution.- Adam Karveller, Director of ITYes, There’s an App for ThatEmployees love that they can easily access theirHotSchedules tools online and communicate withmanagers and co-workers using any online interface.They enjoy the flexibility and work-life balance thatHotSchedules makes possible. Whether you’re in theiPhone, Android or Blackberry camp, there’s an appthat allows you to be on the go and still connectedto HotSchedules.“Mobile access is one of our franchisees favoritefunctions. Operators are often out in the field andcan operate strictly from their smartphone. Hourlypartners appreciate it too—they can download theapp and see their schedule with a push of a button,”said Karveller.

CASE STUDY Newk’s EateryPage 4Reporting Functions DaylightControllable Labor CostsFrom a restaurant operator’s perspective, oneof the most revered functionalities is the myriadreport functions that are available to them throughHotSchedules. “We use so many reports on a dailybasis, I can’t even list them all,” Karveller said. “Theactual vs. scheduled labor report is an absolute lifesaver. It lets you dial into each position to see whereyour labor disparities are and you can see whichpositions you over/under-scheduled. The graphicalrepresentation makes it really easy to read.”Ferro went on to say, “The report most fundamentalto me is the Labor Proforma, where we comparehours used vs. the schedule. I also use the rosterreport, which shows the hours of each person soyou can make adjustments to the schedule at anypoint in time. And HotSchedules has great toolsto help prevent you from generating scheduleswith overtime built in, as well as tools to alert youif you do. This really helps ensure you are staffingappropriately and effectively.”HotSchedules is a greatengagement tool, and we cannow communicate with ouremployees like never before.- Odair Ferro, General ManagerPromptness PaysAn additional advantage gained by integratingHotSchedules with the POS system is that you canutilize punctuality controls - a function Newk’s reliesheavily on to slice off incremental pieces of labor cost.The system allows you to set times and grace periodsfor clock-ins and outs, and requires staff clocking inearly to secure manager approval before doing so.“The scheduler is smart too—even if someone hasmore than one job code, the system knows whichjob code is scheduled when and ensures thatthey user doesn’t make a mistake. These types ofcontrols are among our most highly utilized features,and they truly are a source of supplemental laborcost savings,” said Karveller.Increasing Productivity and ProfitMost locations adopting HotSchedules are seeinglabor cost savings within weeks of implementingthe solution. The Newk’s team checked in withone of their franchises to collect some data onsavings impact to the P&L. Even with a year overyear increase in their average hourly rate, theywere still able to document a .6% savings that wasdirectly attributed to their implementation of theHotSchedules solution.Hinkis commented, “If they hadn’t experiencedthe increase in the hourly rate, the savings wouldhave been more like 2-3%. Still, to see a net savingseven with an increase in average hourly rates, that’squite significant.”Hinkis continued, “From a company perspective,we’ve also documented an increase in productivity.We’ve gone from a 42-43 sale per man-hour to a 50 sale per man hour. That’s really impressive,especially when you factor in an even larger increasein average hourly rates at the company level.”