Using data and technology to make better business decisions

Alison Shillington, National Real Estate Director, McDonald's

Nick Avgerino, National Franchise Development Manager, The Cheesecake Shop

Facilitator: Peter Buckingham, Spectrum Analysis

Process driven

• SWAG approach

• Some process (even for small systems)

• Check chart

• Analogue or regression model.

National Franchising

Convention

Using data and technology to make

better business decisions

McDonald’s

877 restaurants

35 restaurants open in 2012

31 to open in 2013

McDonald’s

Real Estate selection – priorities

•V.A.T.T.S.

Visibility

Access

Trade Area

Traffic

Signage

Technology

Technology used to enhance business:

• Free and readily available

• Consumer driven (ie external consultants)

• Internal program development

At McDonald’s technology is used to be more efficient and

deliver to the market faster. It only provides strength behind our

decisions made by our employees.

McDonald’s Developed Technology

• PMO (Profitable Market Optimisation) • strategic business process built on current, fact based

information to identify under/over performing sales areas and develop targeted activities to produce actionable, measurable plans for growing profits, sales and market share

• Cross-functional program to determine causes of performance ie input required from all departments across the business

• Enable the business to better plan for growth – armed with more information

• NDG Workspace • Internal Development Project Management system

McDonald’s Developed Technology

• PMO •Indicates priority areas for new store growth by direct

comparison with existing stores performance and

population figures

•Information provided:

•Census data

•Competitor locations

•Vision Planning

•Current restaurant performance

What can PMO provide?

•Gap Analysis Assessment •Census data - population gaps in market

•Existing restaurant locations •Competitor activity

•High Level Data •Census data •Traffic counts (to be included in new version)

•Restaurant age, sales, comp, type

•Sales comparison vs market

•Market performance analysis •Highlights higher and lower than average markets

•Generally not unknown but provides data for ‘next steps’

Gap analysis

High level data

NDG Workspace

• Sales Estimates •Based on Comparables

•Cross reference to over 850 restaurants around the Country

Store Site Rating TA Rating TA Pop Traffic Sales

Existing Store A AAA Excellent 20,000 35,000 $4.1M

Existing Store B AAA Excellent 22,000 38,000 $4.3M

Existing Store C A Excellent 19,000 36,000 $4.7M

Existing Store D AAA Very Good 21,000 36,000 $4.2M

Existing Store E A Excellent 20,000 37,000 $4.5M

Proposed Store AAA Excellent 20,000 36,000 $4.2M

Post Opening

To improve process and learn for future....

Estimated Versus Actual (EVA)

Virgin Sales (actual impact)

Post Opening Review

The Cheesecake Shop Site Selection Process

Presented by Nick Avgerinos

National Franchise Development Manager

The Cheesecake Shop

• Established 1991

• Operates in Australia, UK, New Zealand and Poland

• Group turnover approximately $100 million

• 200 site portfolio

• New store investment level circa $400k

The Cheesecake Shop

• 3 Part Process

• A) Demographics

• B) Site selection

• C) Term negotiation

The Cheesecake Shop

• Demographics • Source – 2011 Census, censusdata.abs.gov.au • Population in catchment area • “Red” threshold – don’t open store below • “Amber” threshold – only open store if low

competition, excellent site located, large average household size, good distance from other Cheesecake Shop franchises.

• “Green” threshold – find a site

The Cheesecake Shop

• Average age/average household size

• 2011 Census average – 37 years and 2.6

• “There are no cake shops on Bribie Island”

Opportunity?

The Cheesecake Shop

• Bribie Island – average age 57, household size 2.1

The Cheesecake Shop

• Site selection

• Threshold road traffic level – Information Source – Zenith.com.au

• Threshold shopping centre specialty mat/sqm

• Access

• Parking

The Cheesecake Shop

• Visibility

• Location vis a vis population

• Near other food stores

The Cheesecake Shop

• Term Negotiation

• Incentives vs rent

• Focus on strengths – Size

– Longevity

– Non competitive

– Stable

Summary

• Process driven decisions.

• Anything is better than the SWAG approach

QUESTIONS