How Kizuki Ramen & Izakaya Improved Profitability By Over $1 Million
Kizuki Ramen & Izakaya, a full-service ramen chain with 16 locations, dropped their labor percent from 24.6% to 23.3% and improved annual profitability by over $1 million after implementing Rightwork.
Overview
Kizuki Ramen & Izakaya, a full-service ramen chain operating out of sixteen locations in the Pacific Northwest, was experiencing incredible popularity as a result of their excellent quality product and timely customer service. Kizuki’s growth presented new operational challenges, causing their CEO to hire an experienced operations leader from Starbucks to help facilitate this growth. This leader assessed their current state business processes and found critical gaps in their scheduling and labor management system. Not only were Kizuki’s operations negatively affecting their operating margins through inefficient labor management, the cumbersome, non-standardized processes in place were limiting the business's growth trajectory and presented a potential point of failure should Kizuki continue to scale.
“I have seen many scheduling tools across my career in the service industry and Rightwork combines the best parts of all of them. The autoscheduler feels like we are giving our managers superpowers and the forecasted labor budgets make it easy to control costs as we grow. This should be a no-brainer for all restaurant chains.”
To address this business risk, the former Starbucks leader reached out to the founder and current CEO of Rightwork, who prior to Rightwork had been the driving force of the team responsible for developing Starbucks’ world-class labor optimization models. After the success of the labor optimization team at Starbucks, Rightwork was brought on to build a bespoke model for optimizing labor at the ramen chain. This collaboration marked the beginning of Rightwork's journey, with the ramen chain becoming its first customer.
Following a successful pilot in three locations, Kizuki expanded Rightwork’s solution to all locations. Impressed by the business results they were seeing, alongside the improved scheduling processes and reporting visibility, the chain’s owner decided to integrate Rightwork into their two other restaurant brands, making them Rightwork’s second and third customers.
Challenges Kizuki was experiencing
- Inefficient Staffing. They were struggling to determine correct staffing levels at demand peaks and valleys.
- Lack of visibility. Leadership had poor visibility to labor metrics and where and why these inefficiencies were occurring.
- Complex scheduling process. They didn’t have any kind of labor model to provide a labor budget or scheduling guidance to store managers, leaving them frustrated and on their own to build time-consuming, non-standardized schedules.
Solutions provided by Rightwork
- Efficient staffing. Rightwork helped Kizuki build a labor model to determine optimal staffing levels in 15-minute increments across the day based on their forecasted sales and product mix (pulled from their POS system).
- Actionable reporting. Rightwork sends out daily labor reports (showing how locations performed on a number of labor metrics the previous day), identified opportunities reports (showing what locations are over and under staffed for the next week), and a weekly overview report (showing how all stores performed the previous week and how they are projected to perform the following week based on their currently scheduled labor).
- Intuitive scheduling interface and automated scheduling features. This lets Kizuki store managers build schedules in a fraction of the time that they used to with instant feedback on how efficient the schedule is.
Results
For all 12 locations open before November 1st, 2022 comparing year over year comps for most recent timeframe November 1st, 2023 to January 20th, 2024 (excludes 4 newly opened locations due to not enough data).
- Labor percent dropped from 24.6% to 23.3%
- Average per location profitability increased by $28,314 over 80 day period
- Time saved scheduling per week per location: 1 hour