May 2002

Eatec Corporation and Applebee's International, Inc. - With EatecNet, Applebee's International has increased operational efficiency and reduced food cost variances.

Market Leader
"You're invited over for a meal anytime, and you're always welcome," is the genuine sentiment that greets each customer as they walk into any Applebee's Neighborhood Grill and Bar® restaurant across the country. Applebee's International, Inc. of Overland, Kansas, takes great care to ensure that each of its restaurants provides a regionally tailored menu and consistent dining experience for its guests. Applebee's Neighborhood Grill & Bar restaurants can be found in 49 states and 8 countries outside of the United States.

Each location is designed as an attractive, friendly, neighborhood establishment featuring moderately priced, high-quality food and beverage items, table service and a comfortable atmosphere that appeals to all ages. As "America's Favorite Neighbor®", each Applebee's reflects the neighborhood in which it is located. The decor further conveys this theme with photographs and memorabilia highlighting hometown heroes, local schools and area history.

Capturing Meaningful Numbers
Consistent portions, carefully selected ingredients, and high-quality preparation make up the culinary foundation of a satisfying dining experience at Applebee's. The quality and uniformity of the food servings is what Applebee's uses to create loyal customers from first-time guests. For Applebee's home office management, one of the challenges of meeting these high standards is to keep track of and manage food costs-the single largest expense in operating a restaurant. In a restaurant such as Applebee's, with a set menu, this is achieved by correctly ordering, measuring and preparing ingredients that go into each item being served. Getting the right serving size on the plate - neither too much nor too little - is not just common sense, but a determinant of who leads and who follows in this highly competitive market.

To properly prepare servings for any of the menu items, Applebee's kitchen and restaurant managers follow thoroughly tested preparation methods furnished by the home office. "Best practices" are only half of the recipe for food cost control. The restaurant manager also needs to accurately report food deliveries, usage, inventory-on-hand and spoilage data. For Applebee's, this challenge was magnified by the breadth of their geographic operations.

Applebee's restaurants compiled weekly food cost results on a Microsoft® Excel spreadsheet, which recorded the current item cost, how much was purchased and how much inventory was used for each major food category: meat, seafood, frozen food, etc. This data was then e-mailed to the home office to create simple profit-loss analyses of major food categories, but offered no indication as to why food costs fluctuated.

This initial information was too general to give any indication of how much of a specific ingredient, bought at a specific price, was being used to create a standard serving portion at a selected restaurant. Such calculations are necessary to determine the theoretical cost for each menu item sold. Theoretical food costing is based on the management principle of buying the correct product at the right price, receiving what is paid for, and then preparing, producing and serving based on precise recipe and portion control.

This inability to analyze weekly food costs from a theoretical baseline prompted Applebee's to seek out an enterprise-grade solution for managing food costs, which could be added to their existing Microsoft technology. Applebee's narrowed down their options for food-costing software packages to only those that could offer the reliability and scalability to keep pace with their aggressive expansion.

A Modular Approach to Customization
To attack the food-costing challenge directly, Applebee's selected EatecNet, an enterprise ready client/server foodservice management solution from Eatec Corporation. Eatec's modular architecture has allowed Applebee's to construct the exact solution they required - one that would integrate purchasing and receiving, requisitions and transfers, inventory management, recipes and menus, production management, and sales and profit analysis. EatecNet has been rolled out to the Applebee's corporate-owned restaurants.

Management can view consolidated reports for multiple restaurants enabling them to make further improvements in operational efficiencies and to track food costs across regions. EatecNet's standard reporting functions record all inventory activity with respect to purchases, inter-location transfers, inter-site transfers, and depletion due to production, sales, loss and physical inventory variance.

Applebee's is able to manage their food costs and achieve a timely return on investment with their EatecNet solution. Through Eatec- Net's recipe analysis module, they can calculate more precisely what inventory is necessary to meet daily requirements, thus minimizing over and under-production. EatecNet also provides reports regarding the theoretical usage versus actual usage of physical inventory, so that variance and waste can be identified, tracked and managed.

Building a Virtual Private Network with Microsoft Technology
Eatec provided Applebee's with a true enterprise solution with EatecNet. EatecNet is a client/server application written in Microsoft Visual Basic® and employs a single, centralized database built on Microsoft SQL ServerT technology. The database is accessed online in real-time from each operational site across Applebee's Intranet. All of the data, including inventory, recipes, and supplier information, is maintained centrally and accessed remotely by the restaurant employees in a Citrix application server environment over a 56K frame-relay virtual private network (VPN). VPN technology uses encryption and tunneling to securely connect users to Applebee's Intranet over the Internet.

The Eatec solution's reliance upon Microsoft technology also insures Applebee's return on investment as their operations expand and the need for data processing increases. The company's Microsoft SQL Server database currently supports more than 250 concurrent users using Windows® NT® workstations and over 50 gigabytes of data. The solution also integrates with Applebee's JD Edwards financial software and their in-house point of sale (POS) software. In addition, EatecNet is integrated with a B2B exchange service from Instill Corporation. By automating and streamlining the ordering and receiving process for inventory through this B2B exchange, Applebee's was able to reallocate manager hours to more profitable tasks.

For more information:

About Microsoft
Call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft office.For more information about Microsoft-based hospitality solutions, visit the Microsoft hospitality home page on the World Wide Web, at http://www.microsoft.com/hospitality.

About Eatec Corporation
Eatec Corporation
1350 Ocean Avenue
Emeryville, CA 94608
Phone: 510-594-9011
Fax: 510-594-9091
E-mail: sales@eatec.com
Web site: www.eatec.com

Eatec Corporation is a leading provider of enterprise back-office solutions for the hospitality and foodservice industries. EatecNetX, Eatec's webcentric software solution, helps organizations reduce costs and improve operational efficiencies, resulting in a quick return on investment. Eatec clients include restaurant chains, hotels, resorts, casinos, stadiums and arenas, convention centers, universities, theme parks, airline caterers and supermarket foodservice.

Microsoft Software Used
Microsoft®Windows® NT® Server 4.0 - Enterprise Edition
Microsoft Windows NT Server -Terminal Server Edition 2000
Microsoft SQL ServerT 7.0 Enterprise Edition
Microsoft Visual Studio® 6.0 Enterprise Edition
Microsoft ActiveX® Data Objects7.0
Microsoft ODBC
Microsoft Internet Explorer 5.0
Microsoft Visual Basic® 6.0

Eatec Products and Services
EatecNetX 1.7
EatecNet 8.3
EatecB2B 2.1

© 2002 Microsoft Corporation. All rights reserved. This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, ActiveX, Visual Studio, Windows, and Windows NT are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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