3 ways top-performing restaurant chains retain general managers

Determining the secret sauce for a high-performing restaurant brand can be a tall order. Chains with top sales figures cross all different segments and business models, but one strategy they do have in common is an investment in their general managers, according to Victor Fernandez, executive director of insights and knowledge for data firm TDn2K. Fernandez says data shows a strong relationship between management and hourly turnover: the lower the management turnover, the lower the hourly turnover. “Who would likely be in the position to have a bigger impact than anyone else?” he says. “That GM impacts manager turnover and the hourly turnover overall.” Since the recession, general managers have been asked to do more, often with fewer resources, Fernandez says. Here are three things top-performing brands do for their general managers.

With declining traffic, constant social media scrutiny and tight labor markets, stakes might be higher for general managers but compensation hasn’t risen to match. In fact, general managers are making less in real dollars than they were a decade ago, as target bonuses and bonus payouts have decreased, Fernandez says. On the other hand, top-performing restaurant chains tend to have GM base salaries that are 12% higher than the benchmark as well as elevated target bonuses, he says.

At fast-casual chicken chain PDQ, general managers, dubbed operating directors, are compensated based on performance. According to a single employee review on Glassdoor, operating directors earn a base salary between $48,000 and $52,000, totaling up to $83,000 with stock bonuses and profit sharing. (The national average for general managers comes in just over $50,000, according to Payscale.) “For our leaders excited about driving results, the performance side of our model makes us very competitive,” says Rick Lenderman, vice president of people and culture for the chain’s more than 60 units.

For running an operational environment with more than 250 menu items, The Cheesecake Factory rewards its general managers with company-leased 3 Series BMWs and equity in the chain. Each year, the highest-performing GMs are also rewarded with a culinary experience somewhere around the world. “We’ve always treated our general managers as the kings and queens of our company,” says David Gordon, president of The Cheesecake Factory. “They are the most important leaders in our company because they are the closest to our managers, staff members and guests.”

Overall, staffing levels are on the decline for both manager and hourly positions, Fernandez says. However, top-performing companies tend to have more managers per unit than those at the bottom, he says. In some cases, larger footprints account for the higher staffing levels. But in other cases, it means brands have more managers available to serve as leaders and coaches.

Across all roles, Fernandez has seen restaurants benefit from providing training on leadership and supervisory skills. “HR topics are getting more complicated,” he says. “Those brands that have well-prepared mangers are having better results in terms of retention.”

Yard House brings together GMs from its 69 locations once a year for continued learning and recognition alongside their peers. The craft beer-focused chain also pays for its general managers to become certified cicerones, an accreditation that demonstrates beer expertise and service.