CASE STUDY: Madre!

Moles, Mezcal, & Management Accounting

How Madre! Combined Oaxacan Cuisine & RRFMG’s Expertise To Achieve Restaurant Excellence

When people think of Mexican food, tacos, burritos, and fajitas typically come to mind. However, true connoisseurs of Mexican cuisine often gravitate towards the flavors of Oaxaca (wah-HAH-kah), a state in southern Mexico.

Oaxaca has become an international gastronomic destination for food enthusiasts, often referred to as the “Food Capital of Mexico” and “The Land of the Seven Moles.” Despite its culinary fame, Oaxacan cuisine remains relatively unknown in the United States.

Ivan Vasquez aims to change that.

Growing up in Oaxaca, Ivan closely observed his mother cook three times a day, studying her style & learning her techniques. When he immigrated to the United States, Ivan brought his mom’s treasured recipes along with him and now they form the backbone of the menu served at Madre!, his 4-location restaurant chain in the LA area.

Ivan’s success as a restaurateur goes beyond mole and mezcal. He is a hands-on operator, deeply involved in every aspect of his business. Ivan not only stays connected with the kitchen but also takes charge of major decisions to keep Madre! thriving. This includes managing a location if the general manager is on vacation, personally running the catering operation, supervising logistics, and of course overseeing financials.

Those financials were initially handled for Madre! by Restaurant Accounting Services Inc. (RASI). However, Ivan had a poor experience with them. He recalls, “The first problem was that the payroll was arriving late. We pay on Fridays, but sometimes checks didn’t come until Saturday, and a couple of times not until Monday! So you can imagine the team members, right. Like, where’s the check? So I would email RASI, but they wouldn’t respond, which was very irresponsible. Then when I would ask for printouts of reports to file quarterly taxes or to get a copy of payroll records from a couple years prior, RASI tried charging me between $300 – $500 per report! I fought them over it, but it was just terrible.

Their communication was awful. Nobody was accountable, and there was no representative you could talk to.”

Fed up with RASI’s poor service, Ivan switched Madre! over to another payroll vendor, and then replaced RASI with a different accounting services provider – Restaurant & Retail Financial Management Group (RRFMG).

RRFMG quickly got to work recreating an entire year’s worth of accounting records for Madre! to ensure they could compile historical results and file their tax returns. With that crucial task completed, RRFMG then tackled day-to-day functions such as accounts payable, bank and credit card reconciliation, and generating P&L statements.

Ivan notes that since switching to RRFMG, the difference has been night & day: “RRFMG has a great team that’s very punctual, respectful, & detail-oriented. I feel like they have my back, not only with bills but also financials in general. I don’t worry about reconciliations, payments, and accounts payable any more. They feel like part of my company and take ownership of their work. They respond promptly and treat you like family, which is a big difference for me. They go the extra mile, right? They don’t see you as a number. Every quarter and every year they do a 1-on-1 meeting to review financials, give you feedback, and provide industry updates. That’s very appreciated, and they don’t charge you for it.”

Ivan elaborates more about the 1-on-1 meetings, “It’s based on their experience, even though they’re not restaurant operators. They have multiple other restaurant chain clients, so they can give you some interesting feedback. ‘Hey – I think you can improve this number based on what we have seen.’ or maybe ‘We have seen other restaurants doing X, maybe you can do it too and improve your concept.’, and that insight is invaluable.”

The financial analysis RRFMG regularly provides Madre! has greatly aided cost management. Ivan states, “They compile numbers from all my restaurants into one Excel sheet so I can see costs are 30/30/30 for three of my locations, but my fourth location is at 32. RRFMG’s breakdown makes it easy for me to identify areas needing my attention. Then for each cost category, they break it down further and compare costs this year versus last year. It’s very simple, but incredibly helpful for us.”

These custom reports have had an unintended but welcome benefit for Madre! – training managers about awareness of the cost of goods. For example, RRFMG’s reporting revealed that one Madre! location had much higher beef costs than the others. Upon further investigation, it was determined that a particular menu item was selling much better at this location, but the kitchen’s measurements were off. The kitchen manager, with the help of RRFMG’s analysis, adjusted the measurements, resolving the issue.

This heightened awareness has transformed the managers’ mentality, making them more disciplined and organized, leading to better service for customers.

Ivan concludes, “I have a great partnership with RRFMG, and finally have peace of mind about my finances. I would recommend them for small companies like mine, and even for large ones. They’re experts at what they do and have all the tools and technology needed to service you. And I’m sure they’re always improving and looking for new solutions. If I had met RRFMG back in 2015, I think I would be at a different level now as a business.”

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