CFO Role Is Not Like Yesterday’s, RFDC Panelists Say
Tony Laday is CFO of Fogo de Chao.
Chief financial officers do much more today than pay the bills and make sure payroll goes out on time, said a panel of CFOs who opened the Restaurant Finance & Development Conference Monday in Las Vegas.
“The role has become much more strategic over the last 10 years,” said Tony Laday, CFO of Fogo de Chao.
“We try to understand what drives the guest into the restaurant, and understand the behaviors of the employees in the restaurant,” he said, and they’ve made many adjustments to the pricing model to try to drive frequency.
Fogo de Chao, a chain of Brazilian-style steakhouses, formerly had only one price, around $50, for an all-the-meat-you-can-eat model, and “people thought it was high,” Laday said. They might come in for a celebratory occasion, “but then how do you drive frequency?”
Fogo de Chao’s answer was to add a $15 lunch, for example, and special offers at different price points to get people coming in all weekend.
Blake Bailey, CFO at Zaxby’s, said part of his role is to make general managers feels like business owners. “We’re trying to create the ownership mentality among the GMs,” who too often feel like only the police officers or the enforcers in a restaurant. “We did that through a deferred compensation program that looks like preferred equity. We take out part of the profits they help to generate and put them into a deferred comp trust,” he said.
The brand still has a ways to go on the program, thinking they’d have 30 to 40 percent of their GMs who qualified, but so far it’s more like 10 or 15 percent.
Ira Fils, CFO of Habit Burger, agreed he plays a big role in human resources. All managers at Habit get a one-on-one meeting with someone in the people development department every quarter, to talk about growth targets. “What it shows is you’re investing in them. It’s crucial,” he said.
On the hourly side, Habit creates training targets that individuals can work toward, and when they reach certain targets they get a raise. At the same time, the training targets are the single biggest thing for which managers receive incentives.
The panel, moderated by Michael Gottlieb with Ernst & Young and also featuring Liz Williams, CFO of Taco Bell, was part of the Restaurant Finance & Development Conference in Las Vegas, which ends at noon today.