Comparing your locations fairly: the numbers and the formulas

This is part 5 of 7 in our series Running a multi-location restaurant group. Earlier: what changes for the owner, standardizing across stores, sharing staff and hiring a general manager for each store.

Once you have two stores, you'll compare them. Everyone does. The trouble is that a raw comparison is usually unfair: a bigger store sells more, an older store has regulars, a store with higher rent makes less profit however well it's run. Compare raw numbers and you'll praise the manager with the easy store and blame the one with the hard one.

This post covers which numbers to compare, the formula for each, and six rules that keep the comparison fair. Every figure is hypothetical. For the weekly routine around these numbers, see the owner's weekly check.

The numbers to compare

For cost of goods sold with more than one store, use: opening inventory + purchases + transfers in − transfers out − closing inventory. The transfers matter more than they look. If North sends South $1,500 of milk and cups in a month and nobody records it, North's food cost looks $1,500 too high and South's $1,500 too low. On the sales below, that's 1.25 points on North and 1.79 points on South, enough to reverse the ranking.

Our post on the manager's numbers covers labor %, food cost % and sales per labor hour for one store in more detail.

Six rules for a fair comparison

1. Write the definitions down, once, for every store. What's in net sales (after discounts, before tax and tips)? What's in labor cost (wages only, or the manager's salary, payroll taxes and benefits too)? Which day are the counts done, and which invoices count in which week? A two-point gap in labor % can be a definition, not a performance.
2. Compare the same periods. The same weeks, with the same number of each weekday. Use four-week periods or a rolling 13 weeks for anything you'll act on; single weeks are noisy. Watch for a holiday that lands in one store's busy daypart and the other store's quiet one.
3. Use per-hour and per-guest measures when stores differ in size or hours. A store open 11 hours a day can't match the sales of one open 14, but it can match its sales per open hour.
4. Judge young stores against their own plan, not against mature ones. Decide when a store becomes comparable, for example after a full year open, and until then compare it with its forecast and its own month-to-month trend.
5. Separate what the manager controls from what they don't. Labor %, food cost %, waste, checklist completion and reviews are the manager's. Rent, the building and the trade area are yours.
6. Act on trends. One bad week is a question. Four weeks in a row is a conversation.

A worked example

Four weeks at three hypothetical stores. North has been open three years, Old Town two, and South eight months.

The numbers that follow:

What the raw numbers say: North sells the most, Old Town sells a fifth less than North, and South earns less than half of North's contribution.

What the fair comparison says:

• Old Town isn't the weaker older store. It sells more per open hour than North, at the same labor and food cost, and earns the same 23.5% contribution. It's smaller and open fewer hours, that's all.
• Most of South's gap isn't the manager's. Its occupancy is 6.8 points higher than North's, a lease decision. Its average ticket is the highest of the three.
• But South's prime cost is 4.3 points higher, and that part is the manager's. Sales per labor hour of $52.50 against $60.00 at the others says the schedule hasn't caught up with sales yet. That's the conversation for South's one-on-one, along with its sales against its own opening forecast.

Shared costs: when to allocate them

The group also has costs no single store causes: your own salary, bookkeeping, a shared marketing budget, an area manager.

• To compare how well stores are run, leave shared costs out. They don't change with anything a store manager does.
• To ask whether a store makes money for the group, allocate them with a simple, written rule, such as each store's share of sales. With $12,000 of shared costs over the four weeks and $300,000 of total sales, North carries 40% ($4,800), Old Town 32% ($3,840) and South 28% ($3,360). South's $10,400 contribution becomes $7,040 after its share.

Use the same rule every period, or the comparison moves for reasons that have nothing to do with the stores.

Where Mays fits

• Insights by location. Prime Cost, Labor Cost and Vendor Spend have a Branches list under Filter data. Ticking several stores adds them together, so to compare, look at one store at a time. Prime Cost needs your POS connected, and labor cost doesn't include payroll taxes or benefits. Insights is for admins by default. See Prime cost.
• Reports in your inbox. A scheduled report under Insights → Alerts & Reports goes out weekly or monthly. Pick Specific locations and make one report per store to compare them; one report with several stores shows their totals, and a report set to All locations currently arrives with zeros. See Alerts and scheduled reports.
• Transfers in food cost. Posted transfers appear in the Transfers column of Inventory → Theoretical at both stores, so each store's usage accounts for what it sent and received. See Theoretical vs actual usage.
• Today at a glance. The Dashboard opens on All Locations, and with Square connected, Show per-location breakdown splits today's sales by store.
• Your own comparison. Insights → Custom Reports builds a report from a sentence, such as net sales by location for last month. See Custom reports with Mays AI.

What Mays doesn't do: there's no single page that puts every store's numbers side by side, so the comparison table above still lives in your spreadsheet.

Your comparison checklist

• Written definitions of net sales, labor cost and cost of goods, the same for every store
• Transfers in and out recorded in each store's cost of goods
• The same periods, four weeks or longer, for anything you act on
• Per-hour and per-guest measures next to the totals
• Young stores compared with their own forecast and trend
• The manager's numbers kept apart from the owner's
• Shared costs left out, or allocated with one written rule

Compare stores on the numbers that matter

Filter Insights by store, schedule a report for each one, and count transfers on both sides.

Start your free trial: 30 days, every module, no card needed. Or book a walkthrough and we'll set up a report for each of your stores.