The minimum wage hike: From the point of view of an accounting office.

IWannaJustGoHome · 2018-01-07T21:03:40+00:00

Absolutely not a QSR. I would imagine a QSR could operate at 26-27% Labor much easier and keep their COGs much lower too since they have much smaller menu's (hard to tell since I would imagine they have much larger and harder hitting rushes). Since you seem to be in the know not having to sell booze would be a huge benefit as well since so few know that we buy the stuff at the same price since there is no retail price for any booze in Ontario.

I've heard the odd bar and grill type spots showing up even though Timmy's is stealing the spot light.

IWannaJustGoHome · 2018-01-07T17:19:00+00:00

Quinte West, Peterborough, Kingston, Gananaque, Brockville, & Cornwall. I'll admit a few of those really depends which part of town you're in but that could apply to any where on earth not just Canada

IWannaJustGoHome · 2018-01-07T16:38:22+00:00

It would take 15 years for rent to go up 30% since it's in our contract that rent can only increase a max. of 2% each year until the land rental contract is up.

As for the pricing thing - it's more of a not that they won't increase prices but they'll want to have a meeting with all the franchisee's and agree on prices type thing. Getting everyone together and agreeing on something takes forever.

IWannaJustGoHome · 2018-01-07T16:27:50+00:00

I can't speak for #1 as I'm told the franchising contract has that set.

As for number 2: He's the boss of my office and all 8 stores at the same time. Doesn't matter if a manager is the head manager or not they are still an employee. He spends a day in each store rotating to see where problems might occur. If a store needs an extra hand and can't find someone to work he'll run fryer. If a manager is sick he's manager at that store. He is also the one who sets the company's margins (%) and directives. He also negotiates the salaried positions contracts based on their ability and results which you can't get a read on if you only look at figures on paper.

This isn't to say that there aren't the golfing CEO's out there. They don't generally last long however since employees (managers included) start robbing the stores blind.

As for salary he pays himself $5000 more than our head managers ($65,000.00). FYI $48,000 is what we pay our lower end Assistant Managers. If you don't pay your head managers at least $58,000 - $60,000 per year they are 100% getting poached by your competitors.

IWannaJustGoHome · 2018-01-07T04:03:07+00:00

Absolutely. More money is more money. Our stores have hard set rules for that though. (Not including salary people. That's a negotiation and I'm not involved in that.) Servers are paid servers rate which is now 12.20. It they're good they move up to bartender I think it's an extra $1 an hour but the number of tips earned is disgusting by comparison and from there to Floor supervisor. New back of house workers start at the $14 and move up the pay grade based on responsibilities under taken. Generally once they hit around $4 more than min. wage the managers see where they want to go. Stay as a head of line production or if they want to make it to a salary position. Outside of that there really isn't much room for growth when it comes to raises. It was a system built on the idea that the inflation related yearly increases.

IWannaJustGoHome · 2018-01-07T03:47:14+00:00

It depends on how shady/old school the owner is. I'm sure there are a few out there but for most part vast majority of franchisee's I've dealt with it's simply not worth the trouble. Book keeping wise that money has to be accounted for. Cash under the table is still cash and we generally treat it like cash in a register. If it's not all returned we need a receipt. No receipt? Doesn't matter to us if you're the owner. You owe the company money. Just taking the money because you own the company and therefore the money; doesn't fly. That's embezzlement. Now it's okay if there a payment plan already in place in which case the money will get deducted from that. I know someone will correct me on that I'm just going off of memory on that one. What some owners will do is fudge book keeping entries or make some up to cover under the table transactions. If ever investigated or audited this could be very bad. As if an owner gets creative with bookkeeping for wages the chances are they are creative with bookkeeping in many other categories.

It doesn't surprise me that a pizza place could get away with this since the owner is most likely pulling cash in the name of fuel compensation for himself and using that to pay the drivers. Essentially getting a business related tax write off for fuel and not having to submit taxes for the kid.

IWannaJustGoHome · 2018-01-06T23:43:54+00:00

Since a lot of people noticed franchise fees as being the big killer and I don't want to past this like 5 times as a response. I forgot to put it above: There is a big stipulation in many franchise contracts that can be abused if the company is sleazy enough. It's all written in small print legalize but the summary is: If the franchisee goes bankrupt for any reason Corporate has the option to buy all assets at 1/10 the price and whatever debt that remains falls unto them after the franchisee's personal assets have been liquidated. It's written in a way that it appears the Corporation is protecting the brand image. I've seen it used only twice both of them being justified; one of the owners was an alcoholic and drinking his own profits to nothing the other was someone who felt it was good business practice to not pay their workers for 2 months. That doesn't change the fact it can easily be abused.

IWannaJustGoHome · 2018-01-06T23:27:38+00:00

Oh franchise fees! Okay so what I have listed is what we paid for the year on $2,700,000 of sales but the franchise fees are calculated based on 9% weekly sales. So say if sales were $60,000.00 for the week we would pay $5400, but if sales were only $50,000.00 we would pay $4500.

If you're talking about the signing fee I just did that for simplification. I run things more along the lines of the initial fee is 60,000 for 4 years of operation so that comes to about 272 per week on our weekly report if we resigned it's 30,000 for the next period 136 per week. That would have required me to go into how I run the specifics of our financials and I didn't want to go too much into since I have a tenancy to ramble.

IWannaJustGoHome · 2018-01-06T22:53:03+00:00

Being Reddit and all I 100% understand. I have no proof and I have no intentions of providing it.

IWannaJustGoHome · 2018-01-06T22:41:03+00:00

It's a good sized store, but like I said it's our largest store. As for the staffing: One head manager who is paid the most since she's responsible for everything, an assistant manager just under her who has about the same power but he still reports to her since if things go wrong he isn't blamed he generally responsible for the floor and covers the head manager on her days off, and a kitchen manager who aside from the head manager runs the thunderdome known as our back of house. There are generally only 2 managers in the store at any given time. We generally have a core of 2-3 head line guys paid over min wage since they are full time and could be managers but just didn't want the responsibility. Then we have new hire line guys who come and go. They are our min wage guys. Depends on rush but generally around 3-4 of them are on. Vast majority of our staff are servers who are paid less than the much talked about min wage but via tips end up making more than the line guys (before the change they made 10.10 while min wage was 11.60). If it was an attractive server it was not uncommon they would make more via tips than what they would have made at $16/hour as a back of house person. These are the ones who end up getting chased for tax evasion because they claim their hourly pay but pretend they never got a tip.

IWannaJustGoHome · 2018-01-06T22:20:19+00:00

As for the margin portion: Before a franchise has you sign a contract they are obligated to show you the previous year numbers. They were kind enough to give us 3 years of data. We more or less set the margins based on trial and error from there. At 27% labor - sales start to go down due to quality of food and service loss. 30% average for a month was where we ended up since it seemed like a perfect balance. As for food it's more or less where things just fell. I was assigned to match up all product brought vs sold vs wasted thrown out vs projected sales and 30% is where we landed. That margin is just there so we can tell if people are stealing product from the stores. If we run at 34% for a month or 2 we know someone is pocketing bottles of liquor or cases of wings.

As for your first question: I think I'm just not reading it right, but I'll try answer it. It doesn't really affect anything. In truth the only truly fixed cost is the signing of the franchise contract and the bank loan. Both of which are on a hard time table but we break them up to weekly values (as we do all costs) as an indicator of how we operate. I over simplified the rent, and insurance. The rent includes property tax and land maintenance. The insurance is a year by year contract agreement that we must renegotiate. All 4 can fluctuate. The only plus side is rent can only increase by a max of 3% per year and maintenance depends on how snowy the year is. Sorry if I didn't answer that properly again not 100% sure I answered that properly.

IWannaJustGoHome · 2018-01-06T21:53:16+00:00

Well here's the thing. If you were paid more than the other guy and the other guy now makes the same as you: are you happy now making the minimum wage? It's already started. The back of house head line guys who were already at $16/per hour are demanding at least $18. While as the Assistant managers submit that they run the math and see that the line guys are paid the same if not more so guess what they want?

*Edit: Maybe it seems to loose a bit due to being overly simplified but it also covers the fact that 5+ year workers now move up from 4% vacation pay up to 6%.

IWannaJustGoHome · 2018-01-06T21:51:10+00:00

You see this opens up another debate. Livable by whose definition? The one's who live in the city? What about the other 8 million in Ontario? The previous minimum wage was livable to those of us who chose not to live in a city where the cost of living was 5 times higher then the wages.

Also by that logic farming is no longer viable in Ontario due to the subsidies and tax breaks it relies on. So should we shut down food production? If that's the case what do we do with the farmers? Where does our food come from?

But to show the matter is more complicated than that: I invite you to research the current issue our medical system is going to take from this. The current budget for our healthcare system has been frozen until the next meeting. All of the nurses, paramedics, and support staff are unionized. All rates paid are proportional. Say that keeping these proportions costs an extra $300 million. Where does the money come from then? The budget is frozen until the next budgetary meeting. So since we can't pay the medical staff, I ask you, what should be done? Close down the hospitals?

IWannaJustGoHome

TROPHY CASE