Miracle Restaurant Group, LLC RESTAURANT MANAGEMENT BONUS PLAN EFFECTIVE January 1, 2007 I have read and understand the Miracle Restaurant Group’s Restaurant Management Bonus Plan. A Director of Operations, Area Director or Company Representative has reviewed it with me. _____________________________ Print Name _____________________________ Signature _____________________________ Date
MRG’s RESTAURANT MANAGEMENT BONUS PLAN January 1, 2007 BONUS PLAN OBJECTIVE As a company and as leaders, we must get four things right: • • • •
We must hire the best people, train them well, and keep them with us. We must provide our guests with a great experience so that they come back again and again. (Secret Shops) We must create profitability for the company by flowing our increased sales to the bottom line in ways that do not rob our guests or our associates of the experience they deserve. We must Reward and Recognize our top performers
These four things are linked. By getting them right and in the right order, we can create a recipe for success for ourselves and for the company. • • • •
It starts with having good well-trained associates in our restaurants – you and they together are the key to providing our guests a great experience time after time; If we provide our guests a great experience – greeting them, preparing and serving them good food at the right temperature in the appropriate time frame, and providing them with attentive service throughout their meal – they will come back again and again and our sales will build. If we control what we can control – food waste, scheduling, and managing our other controllable costs – we’ll drop those increased sales to the bottom line. If we reward and recognize our top performers – Base Compensation, Bonus Compensation, Hourly Compensation, Special Incentives
More profit for MRG means more bonus for you. This bonus plan is designed to reward General Managers who are creating a recipe for success by focusing on associates, guests, and the financials. Outlined on the following pages are the details of the plan which begins January 1, 2007. Of course, the provisions of the plan may change in the future as our business focus changes. This plan is designed to make that easy for you and for us when that time comes.
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ELIGIBLE MANAGERS All General Managers are eligible to participate in the bonus plan as long as they meet all eligibility requirements as set forth by this plan. Miracle Restaurant Group reserves the right to change or amend the bonus plan at its discretion.
DEFINITION OF TERMS This bonus plan measures three things: Performance Measure Sales Bonusable UCI (Unit Controllable Income) Flow-thru on Sales Above Budget Secret Shops
Definition Total Budgeted Sales Sales, COS, Labor, Franchise Expenses and Advertising, All Controllable expenses (Actual Controllable Profit – Budgeted Controllable Profit) divided by (Actual Sales – Budgeted Sales). Both must be greater than 0 and “Flow-Thru” must 38% or more to qualify No Bonus will be paid in month of a failed shop. Bi-Annual Bonus will be prorated based on number of shops passed divided by number of total conducted.
How the Plan Works
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Monthly Bonus • Threshold: ≥ 95% of Both Sales and UCI Budget • Payout $175 • Target: ≥ 100% of Both Sales and UCI Budget • Payout $175 • Multiplied by your performance rating Individual Multiplier Rating Top 20 1.5 Middle 60 1.2 Bottom 20 .75
Example: Top 20 Player Monthly: You hit 95% of both sales and UCI *YOU GET $175 You hit 100% of both sales and UCI *YOU GET ANOTHER $175 You are rated Top 20: 1.5 Multiplier *YOU GET ANOTHER $175 TOTAL PAYOUT: $525
Bi-Annual Bonus (P1-P6) (P7 –P13) • Sales $ Above Budget x Position Percentage x Flow-Through Modifier Position Multiplier Individual % Rating Multiplier Top 20% 15% Middle 60% 10% Bottom 20%
Bi-annual: You took in an additional $5000 above budgeted sales. Your Position multiplier is at 15%. You were able to flow 57% or more to the bottom line:
5%
5000 x 15% x 1.20 = $900
Flow Through Multiplier % Multiplier 57% 46 – 56.9%
1.20 1.10
40 – 45.9% 38 – 39.9% < 38%
1.00 .50 0
Example: Top 20 Player
TOTAL Bi-Annual PAYOUT: $900
Monthly Performance Rating Multiplier The multiplier is based on your performance rating in Jan 07 and will run through the end of June 07. New Ratings will go into effect July 07 – December 07. New GMs will be placed in Middle 60%. Individual Rating Top 20% Middle 60% Bottom 20%
Multiplier 1.5 1.2 .75
Bi-Annual Performance Multiplier (Same as Above) Individual Rating Top 20% Middle 60% Bottom 20%
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Multiplier 15% 10% 05%
Accounting Errors and Adjustments Occasionally, accounting errors may occur on the P&L. For this reason, it is very important that the managers review the First Pass P&L very carefully for accuracy. Errors that occur during first pass which are noted by the GM/AD before the final pass deadline will be corrected and will affect the current bonus period. However, accounting errors not identified and corrected during first pass will not be considered for a bonus exception. Instead, they will be corrected in the following period. After final pass, only accounting errors that occur between first and final pass will be corrected to affect the current bonus period.
Bonus Exceptions All bonus exception requests must be submitted by the AD to the respective DO for review. If the DO agrees, he/she will forward the exception request on to the Director of HR to be researched and reviewed with the Vice President of Operations for final approval. Any bonus exceptions not sent through the DO will not be researched and reviewed for approval.
Management Tracking The bonus calculation and bonus payout will be based on the manager’s position and location on the first day of the period. If the manager is transferred to another restaurant, is promoted, or is demoted at any point during the remainder of the period, the bonus calculation for that period will not be affected (may be prorated). This means that the manager’s bonus will be based entirely on the results of the restaurant where he/she was located on day one. In the event of the untimely death of a member of the management team, bonus, if earned by the manager in that period, will be paid to the beneficiary. New managers starting after the first day of the period will not be eligible for a bonus until the following period.
Leave of Absence If a manager is on a Leave of Absence on day one of the period, the manager will not be eligible for that period’s bonus payout. (Example: Manager is on active duty on day 1 of Period 3. Manager goes on LOA on day 8 of Period 3, so he/she will still be eligible for bonus payout based on the results in Period 3. The manager remains on LOA through day 5 of Period 4. The manager will not be eligible for bonus payout for Period 4 since he/she was on LOA on day one of Period 4.)
Transfer/Promotion to a Non-Operations Position If a manager leaves the restaurant to take a position in a non-company operations position at the corporate level (i.e. Support Center or Field Staff), that manager would receive a bonus for the period in which the transfer/promotion occurred (May be prorated).
Bonus Eligibility Requirements Only associates currently employed and in good standing at the date of check distribution qualify to receive earned bonus from the prior period. General Managers that fail the “Service” component of an Arby’s Corporate Audit are 5
not eligible to receive a bonus in the month the failure takes place. Failed “Service” components will also affect BiAnnual bonus payouts (Pro-rated by number passed divided by the total number conducted). Associate must be “in good standing”. Associates who are suspended or who receive a written warning may forfeit the bonus for the period in question. Associates on an action plan will forfeit bonus for the period(s) covered by the action plan. Bonus pertaining to any period or periods may be forfeited due to neglect by restaurant management to comply with any administrative duty, responsibility or policy where the profitability of MRG may be adversely affected. Intentional manipulation that may affect any of the measurements in the bonus program is grounds for immediate termination. This bonus program will be reviewed on a periodic basis, at the sole discretion of MRG in light of changes in law and/or changes in Company policies, procedures or management philosophies and/or any other changes.
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