By Peter Saunders

Mark Halpern, president of Profit Shield, helps businesses prevent liquor-related losses. Photo courtesy Profit Shield.

While helping manage the Saint Cinnamon franchise, Mark Halpern became familiar with VisualTouch point-of-sale (POS) systems from Visual Information Products in Woodbridge, Ont., which help quick-service restaurants (QSRs) keep track of customer orders. In 2009, Visual owner Marius Kimel developed an offshoot concept: software to help the hospitality sector minimize loss of high-value alcoholic beverages. Halpern became president of a new franchise, Profit Shield, which uses this software to audit clients’ inventories.

On the problem:
Canadian hotels, bars, restaurants and nightclubs suffer losses up to 40 per cent, with the average topping 15 per cent of gross sales. This happens for several reasons: a cash-based business is open to theft; servers may overpour to earn better tips; and the bottles are just sitting there, where people can easily take them.

Restaurant and bar owners have tended to look at these losses as part of the way they do business, but they can lose thousands of dollars per month.

On the process:
We visit our clients’ establishments in the morning, before they open, and take inventory. The first audit can take hours, especially when bottles don’t have scan codes that are in our database. The second audit a week later adds any cocktail recipes to the system, so we know the amounts of ingredients poured into each drink, and then the two inventories are compared to find any variance.
We also have a meeting with the employees and tell them what we’re doing. While many employees are really honest, some are there to steal. We explain the past is the past and our intent now is to reduce shrinkage.

Typically, we continue to audit on a weekly basis. It’s like counting cash.

Read the full article: Unusual Franchises: Profit Shield