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Serving Up Security in the Chain Restaurant Industry

EDITORS NOTE: Gene James is director of assetprotection for Jack in the Box, where he is responsiblefor safety and security for nearly 1,600 quick-servicerestaurants in seventeen states.After a twenty-year career in the U.S. Army militarypolice, James moved into loss preventions positionswith Kmart, Kentucky Fried Chicken, Tricon GlobalRestaurants, and AVI Foodsystems prior to going toJack in the Box in 2001. James currently serves as president of the NationalFood Service Security Council (NFSSC), an affiliate of the NationalCouncil of Chain Restaurants (NCCR). The NFSSC provides education andinformation-sharing opportunities for safety and security professionals inthe chain restaurant industry. James also is an adjunct instructor in the masters degree program in securitymanagement for Webster University at their San Diego metro campus.

EDITOR: You just completed your annual conference withthe NFSSC. Give us some background on the conference and what the National Food Service Security Council does.

JAMES: The National Food Service Security Council is anorganization that started 26years ago when fivesecurity directors in the chain restaurant industry begangetting together on an annual basis to talk about trends,what issues they had been having, and best practices. Yearby year, as word got around, more and more people cameto the meeting, including vendors who came to show theirwares. Finally, the task of putting together the meeting andkeeping track of the membership reached the point aboutten years ago where we formed an alliance with the NationalCouncil of Chain Restaurants to manage our organizationand activities.

EDITOR: What are the objectives of the council?

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JAMES: The council consists of fifty member companies, whichrepresent about 50,000 restaurants doing $300 billion a year. Atthis years conference in San Antonio, we had 100 attendees fromthirty-five member companies and 140 representatives of someforty-five vendor companies.The three-day conference not only allows us to meet with ourvendor partners and see whats new on the product side, moreimportantly it allows us to bring together practitioners in ourindustry to share our best practices, our concerns, whats goingon, and learn from each other. The networking connections weestablish are critical in our industry.For example, we at Jack in the Box dont have anyone locatedin the Carolinas. If we have an issue in North or South Carolina,Mike Flachs, the Jack in the Box asset protection manager in St.Louis who supports that area, can reach out to Eddie Tallon, whois the vice president of security and auditing with Ryans SteakHouse whose offices are located in Greer, South Carolina, and askhim for assistance. If we need help in the Carolinas, Eddie would stop what hes doing and help us out as if hes working on aRyans issue. That is the nature of who we are as an organization.We all fully understand that we have an almost sacred obligationrelating to the safety and security of our guests and employees.Many of us have accountabilities for things above and beyond lifesafety issues, but have no doubt the safety and security of all whoenter our restaurants is our primary accountability.The security departments in our industry talk to each otheran incredible amount. Were not a function thats specificallyabout competitive advantage. If Wendys has an issue, guesswhat, McDonalds and I have an issue, too. It may not havebubbled up to us yet, but its likely brewing. By staying in touchwith my peers, Ill see issues coming that I might not otherwise.

EDITOR: Not only is there a tremendous amount of sharing of information from one company director to another, but itwas very evident at your conference that there is a great dealof sharing between the practitioner and the vendor. Tell us thevalue you get from that.

JAMES: The relationship we have with our vendors is beyondbelief. They have an acute understanding of our restaurants andour industry and are very, very helpful to us as practitioners. Icant tell you how many times Ive gone to one of our vendorpartners about a particular product or service and said, I thinkI want that. Yet, if its not the product or service for me, theywill say, Gene, thats not going to work for you, and here arethe reasons why. You might want to think about product X, Y,and Z, which might not be a product they have, but one of theircompetitors.

EDITOR: In addition to the annual conference, you haverecently created some strong mini-conference initiatives that willoccur throughout the year. What are those about?

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JAMES:Wouldnt it be great if industry couldpartner with the military to hire thoseyoung people wounded in combat?The government could help entice theprivate sector by issuing significant taxcredits. And we, as a loss preventionprofession, could bring these people intoour companies and train them in lossprevention. Theyre already bright. Theyrealready motivated. They already live awonderful code of ethics and morals.Wouldnt it be great if we could repaythem in some small manner for theirservice to our country and the sacrificestheyve made by training them in thiswonderful profession we work in? This isnot a hand out; this is a hand up.

This is the result of the input we received from ourmember companies who say they love the annual conference,but want more of it. So, our board came up with a series of threeevents that well put on between now and the annual conferencenext July. The first one will take place in late September inAtlanta. Bill Heine of Brinker will host a roundtable focusingon robberies. Not only will this seminar be open to our regularmembers, but we want to reach out to those in other industriesthat are impacted by robberies, those restaurant chains that donot have a security or LP department, as well as those new LPpractitioners at all levels in our industry who may not come tothe annual conference.Then, in February, I will host a seminar in Dallas called FoodService LP 101. Again, the target audience are those samepeople who will get to spend a day and a half with some of ourindustrys more experienced VPs and directors who will addresssuch topics as internal theft, food costs, robbery prevention, andtalk about trends in a roundtable-type discussion.Well finish off in May 2006 in San Diego where well replicatewhat we did in Atlanta and, hopefully, build and improve upon it.

EDITOR: Would you welcome LP professionals from other retailsegments, such as grocery and even big-box retailer who havefood services?

JAMES: Absolutely. I think grocery and big-box retailers shouldconsider attending our events and becoming members in ourorganization. I believe the cross-pollination of their skill sets andour skill sets would pay dividends for both industries. It wouldcreate a synergy for everyone involved.When I started coming to our conference twelve years ago,I had the privilege of becoming acquainted with a group ofbusiness associates, and today I am blessed that those business associates have turned into a circle of close friends. My point isthat not only would we welcome LP professionals from other retailsegments, we would embrace them.

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EDITOR: Lets take a moment and talk in more general termsabout the world of restaurant security. How has the role of thesecurity professional changed over the past decade or so?

JAMES: Twelve years ago when I was a brand new loss preventionmanager with KFC Corporation, our emphasis was on robberies,burglaries, and internal theft. All three of those componentsare still critical to what an LP professional does in our industry.However, since 9/11 the Department of Homeland Security (DHS)has designated the food and agriculture sectors of the economyas part of the countrys critical infrastructure. We interface on aregular basis with DHS. In fact, each director in the NFSSC gets adaily update from the Department of Homeland Security.

EDITOR: What are the loss prevention initiatives that you and yourcounterparts are working on today that are different than what youwere working on ten years ago?

JAMES: I think POS exception reporting is going to pay us greatdividends. Were in the infancy stages of that right now. Several ofour member companies have started using it, but many have not.I think sooner or later, the vast majority of us will be involved withPOS exception reporting in one way or another.Additionally, the ability to store video images and data off-siteis very, very attractive to us. In the past with the old analog VCRs,a robber would typically come in and trash your VCR. In the olddays, a time-lapse VCR would cost you maybe $1,000. Now atime-lapse VCR costs about $350. However, DVRs might cost you$4,000 to $5,000 depending on the amount of hard-drive capacityand the type of processor, and you just cant afford to lose thatkind of investment. So we have to put those DVRs in very hardcases and hope the robber cant get into it. So, I have a greatattraction to having the ability to store data and images off-site.

EDITOR: With the span of control that your industrys LPmanagers have…sometimes several hundreds of restaurants…ishaving a data management system important to you?

JAMES: The average loss prevention manager in our industry isresponsible for about 350 restaurants, so its not onlyimportant, its critical. We need to be able to manipulate data andturn it into actionable information.In our industry, the loss prevention manager is more of acoach and consultant. He needs information that allows him tocall an area manager and say, These are the issues I see in storesX, Y, and Z, and these are the remedies I recommend. Do youunderstand how to get there? While you cant respond to everyhundred dollar cash loss, if you have a restaurant manager whois trying to do the right thing, working a twelve- or fourteen-hourday, and calls you at nine at night because hes short $300, you need to stop what youre doing and talk him through how heresolves his issue. If you dont, hell never call you again.

The security departments in our industrytalk to each other an incredible amount.Were not a function thats specificallyabout competitive advantage. If Wendyshas an issue, guess what, McDonaldsand I have an issue, too. It may nothave bubbled up to us yet, but its likelybrewing. By staying in touch with mypeers, Ill see issues coming that I mightnot otherwise.

EDITOR: Before you started your second career in retail lossprevention, you had a twenty-year career in the US Army. Howcan corporate America help those coming out the military whomaybe dont know of the career opportunities we can provide?

JAMES: Last October I had dinner in Washington, D.C. withmy good friend and long-time mentor, Major General Gil Meyer,who is now retired from the Army. He suggested I take theopportunity to stop by Walter Reed Army Medical Center tovisit the young men and women…he actually used the wordpatriots…coming home from the war. Itll bring a tear to youreye, he said.So, I drove up there the next day and walked in and I sawan amazing number of amputees throughout the hospital. Itbreaks your heart. But whats truly amazing is you dont seeembittered, angry young people. These fantastic men andwomen have a great outlook on life. It makes you ask yourself,If that happened to me, would I have that kind of attitude?Quite frankly, I personally dont know the answer to that. I doubt anyone could answer that if theyve not had the experience ofsuffering a horrific injury or wound.That experience got me to thinking about when I left themilitary. You know the military does a great job of targetingmissiles across the globe or deploying divisions of infantry andarmor prepared to fight halfway around the world, but themilitary is rather inept at preparing soldiers to leave the militaryand preparing them to take positions of responsibility withinprivate industry. This situation is even more acute when youthink about the challenges these combat-wounded amputees willhave in order to prepare themselves to support their families,enter the business world, and have fulfilling careers. I know thatthe creativity of the private sector would by far outperform thebureaucracy of the government.Several years ago there was a tax-credit program for hiringthe disabled. It basically gave businesses a revenue-neutralproposition to hire someone that was physically or mentallychallenged. Wouldnt it be great if industry could partner with themilitary to hire these young people? The government could helpentice the private sector by issuing significant tax credits. And we,as a loss prevention profession, could bring these people intoour companies and train them in loss prevention. Theyre alreadybright. Theyre already motivated. They already live a wonderfulcode of ethics and morals. Wouldnt it be great if we could repaythem in some small manner for their service to our country andthe sacrifices theyve made by training them in this wonderfulprofession we work in? This is not a hand out; this is a hand up.

EDITOR: Thats a fantastic objective. What do you think needs tobe done to spur this type of initiative?

JAMES: Well, Gene James cant be the primary motivator. Theindustry needs to take on this challenge. Industry associationslike ASIS should look at this. As citizens, we should lobby ourcongressmen. Just think, if we could get the interest of justone congressman who would introduce a bill into congress,who would oppose it? But, its getting the interest of that onecongressman thats going to be critical.

EDITOR: As you know, weve been running a series of articlesin the magazine and on our website about loss preventionprofessionals who have been deployed to the war effort. Oneof our editorial board members suggested that this was a goodway we could honor those people from our industry who haveput their loss prevention careers on hold to serve the country.We here at LossPrevention would certainly be supportive of thiseffort.

JAMES: That would be wonderful. When I pick up yourmagazine and see the faces of those wonderful reservists who are activated and serving in harms way in Iraq and Afghanistan,you realize that they are proud of their LP profession, yet theyrealso proud patriotic soldiers serving our country. I have nothingbut the utmost respect and admiration for you for acknowledgingthese patriots. And kudos to the employers who support thoseyoung people and bring them back into the industry whenthey finish their tours. But just think how much more we as anindustry could do to support those returning from this war.

EDITOR: You are very supportive of educating and training youngprofessionals. You actually teach security, dont you?

JAMES: I recently accepted a position as a part-time adjunctinstructor with the Webster University masters degree programin security management. Ill tell you it wasnt for the money. Idhad several universities with masters degree programs approachme about being an adjunct instructor over the years, but whenI spoke with the folks at Webster, I was impressed. They areworking in conjunction with ASIS to build a cadre of professionalsecurity and loss prevention practitioners who will sit as equals atthe table with operations, marketing, legal, logistics, whomever.I think as a profession, we need to continue to strive to advancethe educational level of our people. Thats why I am pleased tosee so many young, recent college graduates going into advancedsecurity management programs and joining the loss preventionfield. Its a great thing for our profession and for those companiesand industries that we support.

EDITOR: What are those skills that you are teaching and that youlook for in a loss prevention manager or security practitioner?

JAMES: I am absolutely, totally committed to the concept that aloss prevention professional be seen by the organization, by hisinternal customers as a business partner. We cant be seen as thecompany cop, as an intimidating force. We need professionalswho can show their internal customers the need to adhere topolicies and procedures, who can sell programs, who are able toshow a return on investment of any capital expenditure wepropose. We need to be a full-fledged business partner within ourrespective organizations.

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