To Catch A Thief
Posted by Ryan Volberg at April 14, 2008 10:00 AM

Barry had spent the first part of his life working for someone else. Then he discovered a franchise that changed his life completely. In a matter of months, Barry went from being an employee to owning his own business.

Barry was somewhat naive when he first opened up his first restaurant. That naivety was short-lived when a nearby competitor, who was a franchisee of a different system, confessed to him that they regularly underreported their sales to their franchisor.

"Aren't you concerned about getting caught?" asked Barry.

"Nah, they hardly ever check. And besides, I don't do it every day, so it would be tough for them to prove anything," replied the competitor, "You just stay under the radar. Don't be super-greedy and you'll be fine."

Barry considered the advice and began to underreport his sales. Just a little, but it was enough to put just a few more bucks in his jeans each day.

When Barry opened his second location, his cavalier attitude changed. He didn't want to set a bad example, since he knew that it could lead to theft from him by his own employees. So, in the months leading up to his second opening, he gradually reduced the gap between his real sales and what he reported. Corporate never even asked what he was doing differently to account for his 8% increase in sales.

Now, Barry owned 3 locations of the franchise and he was considering 2 more.

He ran his business by the numbers and while he trusted his employees to a point, he was all too aware of the temptation that a business which dealt with cash could provide to a just-above-minimum wage employee. That's why he insisted on getting his sales numbers via email at the end of each day from every location.

This morning however, the results puzzled him. About an hour before closing last night, he happened to stop by one of his locations on the way back from his cottage. The manager was out on a break, so Barry did a quick sales report on the POS system at the location.

This morning though, the sales for that location were less than the report that he'd pulled. He'd need more information, but already, his gut was churning.

In the next blog entry, Barry will assess the situation and consider his options for confronting his employee.

Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring restaurant success.

Category: Survival Tips

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