Event Recap: BDO Restaurant CFO Bootcamp

By Lisa Haffer

Our semi-annual BDO Restaurant CFO Bootcamp was held in Chicago at the end of May. Finance accounting professionals in the restaurant industry spent three days immersed in hot topics and trends in the industry, including: 
Serving up Data to Drive Business
Kirstie Tiernan, Director in BDO’s Forensic Technology Services Practice, shared real-life stories of how big data can be used to understand operations, improve efficiencies and discover fraud. She discussed how to conduct market reviews and site analysis by analyzing local demographics, competition, proximity to existing locations and travel times. We also learned about how to analyze data on social media to glean insights into what is being said about your restaurant on which social media platform. Finally, Kirstie reminded us that restaurants are prime targets for fraud, which can take many forms, from fraudulent gift card and loyalty card activity, to ghost vendors and fake employees. 
Timely Employment Issues
Labor is one of the largest expenses that restaurants face. Constantly changing employment tax laws can cause confusion and give rise to additional costs for unknowing restaurant owners. Janet Grumer and Roy Salins, partners in the law firm of Davis Wright Tremaine, provided an overview of some of the hot issues in employment law today. Perhaps the hottest topic was Overtime Pay.  Restaurant CFO Bootcamp coincided with the DOL’s announcement of the increased pay threshold for non-exempt “white collar” employees from the current $23,660/year to $47,476/year effective Dec. 1, 2016. This increase, meant to provide “a fair day’s pay for a fair day’s work,” will result in overtime pay for millions of employees, including those in the restaurant industry. 
Other topics discussed include the recent minimum wage hike announcements in New York and California. Under these new laws, tipped employees in NYC could earn as much as $10/hour in cash wages in 2019 and fast food employees in NYS will earn up to $15/hour in 2021 (NYC will implement the $15/hour requirement for fast food employees in 2018). In California, a law was passed setting a $15 minimum wage by 2022 for businesses with more than 25 employees and 2023 for smaller companies. Changes like this will have a significant impact on restaurants’ bottom lines, and may lead to increased menu prices, administrative fees and/or a reduced workforce. We also discussed  joint employer status between franchisees and franchisors, which could lead to a franchisor being liable for employment-related infractions by a franchisee. 
Tax-Saving Opportunities
Thursday’s session started off with an overview of tax issues specific to the restaurant industry. Despite the early morning start, attendees’ ears perked up when we started talking about tax-savings opportunities like those contained in the Protecting Americans from Tax Hikes (PATH) Tax Act. This tax law, signed in December 2015, could be considered an early Christmas gift to the restaurant industry, as it extended many restaurant-specific tax provisions that were slated to expire at the end of 2015. Temporary extensions include the Work Opportunity Tax Credit (WOTC) and “bonus” depreciation (extended through 2019). Permanent extensions include the enhanced deduction for charitable contributions of food inventory and the 15-year depreciable lives for restaurant property and qualified leasehold improvements. Another tax-savings opportunity for restaurants that undergo rebranding or refreshes are the new Retail Remodel rules, which allow restaurants to write off 75% of certain remodel costs. 
Keynote Speaker: Brent Johnson (President and CFO of Giordano’s)
Pizza is synonymous with Chicago; so what would a conference in Chicago be without a guest speaker from a pizzeria? Brent Johnson, President and CFO of Giordano’s, shared the story of Giordano’s remarkable turnaround and success. He discussed their growth strategies, and offered insights on the role of a modern CFO. After all of that talk about pizza, the group dinner at Giordano’s flagship store on Rush Street was the perfect way to cap off our day. 
Other hot topics and lively discussions included sessions covering unclaimed funds rules as they apply to gift cards, latest trends in restaurant technology, and ways to measure ROI and company and store-level performance.
Don’t miss out on our next Restaurant CFO Bootcamp on September 21-23 in Las Vegas. And be sure to keep up with our latest thoughts by following our practice on Twitter at @BDORestaurant.