Case Studies

America's Largest Chinese Restaurant Chain Has Never Suffered a Non-Compliance Incident

P.F. Chang's China Bistro and its subsidiary Pei Wei Asian Diner (P.F. Chang's) are two of the best-known culinary brands in the food service industry. With 400 American locations geographically distributed among 39 states, there is no limit to the complexity of their business operations. Nevertheless, their operators forge ahead without incident and that's partly due to the efficiency with which their legal department processes the requirements for new locations and the sophistication by which they use the Business License Management System (BLMS)® to oversee them.

400 Restaurants = Thousands of Heavily-Regulated Licenses and Permits

As industry insiders will attest, there is nothing new about the need for a restaurant chain to possess a mammoth business license portfolio. P.F. Chang's is no exception. Their portfolio contains… well, it contains just about every type of license known to the full-service restaurant business:

  • Food permits
  • Health permits
  • Catering permits
  • Liquor, beer & wine licenses
  • Outdoor patio permits
  • Milk & cream permits
  • Refrigeration licenses
  • Sign permits
  • Awning permits
  • Franchise filings
  • Fictitious name filings
  • Environmental permits
  • Grease control permits
  • Waste water discharge licenses
  • Corporate annual filings
  • And more

Joanne Feinstein, Paralegal Supervisor, has been procuring and renewing these governmental licenses on behalf of P.F. Chang's for 2 decades, first at a law firm overseeing their compliance issues and then internally from within their legal department. When asked about the challenges she's faced, she sighs audibly and proclaims, "Oh my goodness."

For one thing, many of the requirements for operating a restaurant are idiosyncratic at best and just plain random at worst. Consider employee permit cards, just one of the many obstacles to compliance that she navigates on a regular basis:

"Think about what happens when we apply for a liquor license. In Tennessee, you must have employee permit cards on the bodies of every person serving alcohol. California is surprisingly pretty lax since they suggest training, but don't typically require it. Arizona requires training of the person in charge of day-to-day operations but not anybody else. Utah requires training and then they audit you. It's different everywhere."

Again, that's just one license type, while some of their restaurants have 15+ licenses associated with them. Making matters even more challenging, the day-to-day operations of the legal department don't merely depend upon the know-how of the Paralegal Supervisor and the competence of her hand-picked staff. Those who manage P.F. Chang's many individual restaurants are inadvertently at the vanguard of the company's compliance.

These "operating partners" don't sit at office desks across the hall from the legal department. They are geographically spread out – literally from coast to coast! – and their attention is often understandably focused on their own immediate needs. According to Joanne Feinstein, this fragmentation makes compliance extra tricky in the restaurant business:

"It can be an enormous challenge to get the folks in the field to respond. Sometimes they need to do things we can't do from headquarters. For instance, in Massachusetts and New Jersey, often times you need a person to attend a hearing so a license can be renewed. Someone from the restaurant needs to pick up and pay for these licenses in person. And what happens if they try to do this and they don't have crowd control training which happens to be a requirement in Massachusetts? There are many moving pieces and we sometimes struggle to get them to be on top of their licenses."

Such problems are endemic to the hospitality industry, which is decentralized by necessity. That may be cold comfort, however, to a legal professional if fines accumulate or a location loses the ability to serve alcohol and squanders the revenue that comes with it.

"With BLMS®, I think we gain 20% to 25% more time that we can use to do other things."
P.F. Chang's Stays Proactive with the Business License Management System (BLMS)®

Given the risks associated with non-compliance, there are only two paths forward for a thriving company like P.F. Chang's. They can either count their losses or get proactive. They have wisely chosen the latter course and their efforts have been enabled by the powerful workflow management tools of BLMS®.

In many B2B applications, reporting is a classic example of a "rear-view mirror" application; reports illuminate for senior management what has already occurred. In the hands of P.F. Chang's licensing staff, it's a different dish entirely. Joanne Feinstein uses reports to proactively alert her operating partners of the tasks ahead.

"First, I formulate a view of what licenses and permits are likely to expire in the days ahead. Sometimes you have to file 45 days in advance and sometimes you know that you need to file 60 days in advance. BLMS® makes those kinds of reports very easy to generate. Armed with knowledge of what's approaching, we use BLMS® to alert our operating partners via email (and sometimes phone) that they have an expiration approaching. I need them to know that the renewal forms may not arrive here at headquarters, but rather in their mailbox. I don't wait for them to alert me."

This take-charge approach is critical for Joanne Feinstein. She assumes the initiative and then uses BLMS® to manage the comprehensive workflow from start to finish. When her team acquires the renewal form, it goes into BLMS®. When a check is requested from Accounts Payable, the request is generated by BLMS®. When the check goes out to a licensing authority, the check and shipping information go into BLMS®. When the license is received, it's scanned into the system so that it can always be retrieved at a moment's notice. "Without this software, we'd be coping with a huge volume of paper," she adds with a wry laugh.

But paper may be the least of her concerns. Without this marriage of expertise and technology, she would also be coping with perpetual crises.

"I sometimes get desperate calls from an operating partner or restaurant manager who says 'An inspector just asked for our current health permit. I don't have it. Can you send a copy?' Of course I can, but what went wrong? Did I fail to renew the license? No, I can see in BLMS® that my staff ran through the proper workflow. Did I neglect to send the hard copy to them? No, I can pull up the FedEx number in BLMS® and see that they signed for the delivery. It's great that I can retrace our steps and pinpoint the problem. More often than not, it turns out that they took it off the wall and forgot to put it back up or never checked their mail in the first place. My philosophy is to treat our operating partners with kid gloves until I need to take the gloves off."

Some say that to err is human. Nevertheless, since the BLMS® workflow is centralized under one watchful eye, problems like this can be remediated. Click a few buttons and a fresh copy of the license is back in the mail. Another potentially debilitating crisis is averted.

In the Restaurant Business, Productivity is Not to be Trifled With

Joanne Feinstein is candid about the impact that BLMS® has on her department's productivity. Without this cloud-based system, her staff would be spending more time filing papers... And more time on the phone with licensing authorities... And more time pestering operating partners across the country... And more time documenting a complex workflow... And more time correcting foreseeable errors... And so on... And so forth...

When asked if she can measure this impact to P.F Chang's and Pei Wei's bottom line, she is quick to respond. "With BLMS®, I think we gain 20% to 25% more time that we can use to do other things." To a business license professional, this type of productivity gain speaks volumes. When there are thousands of business licenses and permits needed to operate a growing portfolio of physical locations, 20% to 25% more time is the difference between novices that struggle in vain to keep up with their deadlines and professionals that proudly boast that they have never suffered a non-compliance incident.