1851: Tell us what you do in one sentence.
Garschi: I oversee company-owned and franchised restaurant operations, brand and operations training, operations services, concept innovation, new market and restaurant openings.
1851: What’s your approach to working with franchisees?
Garschi: Franchisees are my customers. My job is to understand what their needs are and be a true partner. I look at us as one system sharing the same purpose. Our success comes from a strong commitment to each other and upholding Togo’s brand integrity. The community wins when I operate as a true partner. Our franchisees want labor efficient, quality and easy-to-execute programs and an effective way to train and develop people in this job market. They clearly want to have the best product and to encounter profitable growth.
1851: Describe your philosophy that forms the base of your foundation for thinking about Togo’s business model.
Garschi: My business model is a pyramid. The bottom of the pyramid is Great Operations. Great Operations means friendliness of staff, cleanliness of restaurants, quality of product, accuracy, speed with service, connecting with our guests and using technology to create win-win processes. In order to achieve great operations, we need great people and the next level on that pyramid is People Development. I believe people development and profitability can become one. Most companies focus on profitability and feel people development is an additional step. I believe that if we can create an environment in which our people can organically develop and grow, Our Company can grow due to our employees’ focus and efforts to enhance our guests’ experience. At the top of the pyramid is profitable growth; we need to generate enough excess capital to keep growing our business and enhancing our mission. But we can’t do this without Great People. It’s a formula I call GP2. Great operations starts with “G.” People development starts with “P.” Guest experience and profitability form the second G and P.
1851: What’s a typical day for you like?
Garschi: I try to keep my efforts focused on the components of the GP2 formula I just mentioned. At the end of each day, I ask myself if I made a difference in our guest experience or on our people development. The rest of the stuff I do is just additional fun. So I try to keep myself focused on those two.
My typical day starts at 7 and sometimes goes to 11. It varies from conference calls, visiting stores, creating processes and being in touch with GMs, employees, franchisees, and business partners and continuous learning.
Today, for example, we have town hall meetings, plus we have our own team meeting. If there is more time left, I will review the P&Ls with our Director of Operations and perhaps stop by a restaurant to review the progress of our “pay first” testing.
1851: What’s the first thing you’ve been concentrating on since coming aboard?
Garschi: We are focusing on evaluating the pay first method of operations that we’ve been testing. From April to July, we tested the pay first model at our corporate location in San Pedro. In August and September, we are testing it in select stores. From October to December, we are going to evaluate the test results. If everything goes well, we plan to roll out the pay first system-wide in 2018.
1851: How does pay first work?
Garschi: Right now, one person makes the entire order and the guest pays after the order is completed, known as “Deli style of service”. With the pay first model, the guest pays first, and we broke sandwich assembly into four stations to improve speed and consistency and simplify employee’s training. Station one just does bread and spread. Station two does meat and cheese. Station three takes care of produce assembly. The last station cuts the sandwich and passes it to the guest. We also created two cashier stations to take care of our guests in a much improved speed with service. Guests quickly adapted to the system, and we saw the outcomes we hoped for.
We are also testing point-of-sale improvements. As guests place orders, they are printed out in the sandwich making station. If you order a sandwich and salad at the same time, tickets go to two different assembly stations, and the system recognizes they are part of one order. We are expanding our tests to another 9-12 restaurants; three corporate and 9 franchisees in September. We are also testing it out in different operating systems.
1851: What do you think of the recently rolled out menu transformation?
Garschi: Based on the new menu rollout, we measured sales three weeks prior to the new menu rollout and then looked at sales in the three weeks after the new menu rollout. Same store sales increased 5% based on these three weeks. We are still accumulating more data to increase our learning. So far the results are encouraging, and we are happy with it.
I think it’s successful for several reasons. The high quality visual impact of our new menu boards is a nicer and brighter look, simpler for our guests to order due to improved panels with different protein selections, farm fresh greens and specials, which is more consistent with how guests search to place their order. The middle of the menu promotes our special, like right now it highlights our improved quality and quantity of oven roasted deli style turkey sandwiches. We also highlight our signature daily fresh sliced pastrami and roast beef on our panels. Also we had products that were somewhat hidden in the previous menus. They are now clearly shown on our menu, such as the Pastrami Reuben or Turkey Cranberry.
As part of the rollout, most sandwiches have the designation “Togo’s Style.” Before different sandwiches had different toppings, and it took employees a longer time to learn. Now they know “Togo’s Style” sandwiches all have the same produce toppings, lettuce, freshly sliced tomatoes and onions, pickles and pepperoncini and guests’ choice of bread and dressing. Needless to say, we will be more than happy to make sandwiches to every guest’s unique & individual style. We made other changes on a number of items such as our albacore tuna, where we increased the quantity of tuna and added more flavors. We also changed the chicken portion on our chicken sandwich and enhanced the flavor of our avocado. These are just a few examples!
1851: What are your thoughts on the state of the sandwich industry?
Garschi: The sandwich business is around $22 billion in the US. Our sandwich product is the best quality. Our bread is much larger, artisan, baked fresh daily and four inches wide versus two to three inches among our competitors. People call our sandwiches “meaty.” The other day, I was looking at competitors, the amount of meat we use in a six inch sandwich is more than what some of our competitors use in a larger sandwich. In short, we are well positioned!
1851: What are you doing to address Millennials’ need to use technology more than previous generations?
Garschi: We are testing several initiatives right now to enhance our offsite sales capability via online ordering and catering. Improving the way catering is handled could expand our franchisees’ business from 7 days a week to 8 or 9 days, as they can do equal to a day or two of store line business through catering orders. That’s why we are working on a centralized number for catering, so we help serve our franchisees with this part of their business more efficiently and provide a more consistent experience for our guests.
Right now, we are also migrating to a new ordering platform called o|o and adding increased capabilities through third party delivery services like Door Dash, Grubhub, ezCater. We are also expanding the capabilities and efficiency with the way these types of orders feed into our stores and are processed. For example, our technology can simplify a large office lunch order and give each person their own customized selection. We’re excited about these efforts. Best practice for our guests is to visit our website the most efficient and one stop shop. Let us take care of delivering it to your doorstep.
1851: What’s your role at the upcoming November Togo’s conference?
Garschi: I want to be part of the community, to be a good listener and to make sure I shake every hand. I want to touch base with all our franchises and really be open to what they have to say. I’m also looking forward to a hands-on demonstration of the pay first model we’re testing. We really believe pay first is going to impact our guests’ experience and aim to show it through this simulation hands on practice with franchisees and the corporate team.