The Official Publication of
The Commercial Food Equipment Service Association
CFESA ANNUAL SPRING CONFERENCE
MAY 14-16, 16, 2008
IN THIS ISSUE
• Spring Conference Agenda
• Fact-Based Decision Making
• A Day in the Life of a Warranty Administrator
• Voice of the Industry
• What is Additional Insured?
• Profit Survey Update
• Online Certification—A Breeze!
• Strategies are Different than Tactics
• Certified Company Spotlight—Eichenauer Services Inc
ON THE MENU
President’s Gavel 4
Fact-Based Decision-Making 5
On Target is the official publication of the Commercial Food
Equipment Service Association. On Target is published on a bimonthly
basis. Current advertising prices in On Target are available
now through the end of 2008. Lock in your price and lock out your
competition. If you have any questions regarding advertising, content
or need further information you may contact Lauri Smith at
CFESA Headquarters: Toll Free 877-414-4127 or via email
Executive Director’s Message 6
Email Chronicles—A Tale of Woe 7
Industry News 8
Headquarters News 11
Spring Conference Agenda 14
A Day in the Life of a Warranty
Voice of the Industry—Article III 18
T&S Brass 21
Tomlinson Industries 19
CFESA 2008 Training Classes 19
What is Additional Insured? 20
NAFEM Show Makes Important Shifts 23
Identify your Organization's
Strengths, Weaknesses and Identity
Equipment Service Association
2216 West Meadowview Road, Suite 100
Greensboro, NC 27407
The President’s Gavel—Jean Choquette
In just a couple of weeks CFESA will host its annual conference
in Chicago. That would also mark the end of my
term as president of the association. It has been a very
interesting two years and I am very upbeat by the projects
our committees are currently focusing on.
As you may know by now, the Marketing Committee, led
by John Swanson and Tina Reese, assisted by Lauri
Smith at our headquarters office, have created a great
DVD that you can obtain from headquarters. This DVD
can be accessed on the CFESA website’s homepage and
is currently featured on youtube.com – Foodservice Careers
– A Solid Choice. It is designed to help our members
go into their communities and encourage young talent
to join our industry. One of our directors, Wayne
Stoutner, reported to the Board that he had given the
DVD to his intern, coming from the local HVAC trade
school. In turn, the intern used the DVD in a presentation
to his class about his internship with A.I.S. Out of 20 students
he had presented the DVD to, three or four students
came to Wayne expressing an interest in a career
with our Industry. Wayne referred them to local CFESA
members in upstate New York. The class instructor also
informed Wayne that he would present the video to his
future classes. If each of our members would visit their
respective local HVAC trade schools with the DVD, think
of the impact and the positive results this might achieve.
In line with our Marketing Committee work, our Ad Hoc
Training and Education Committee, composed of David
Hahn, Scott Hester, Tina Reese, John Schwindt and supported
by Carla Strickland and Heather Price, has done
great work and introduced the Board to M3, a company
specializing in technical writing and training programs. We
have entered into an agreement with M3 to write a 200-
page curriculum for distribution to various colleges and
training institutions such as CTI. Career Technical Institute,
located in Huntsville, Alabama, is just one such institution
interested in offering a “hot side” to potential students
but did not have the proper curriculum. The majority
of CTI’s students are comprised of adults either seeking
alternative careers or those experiencing major layoffs.
Potential students come from across the United
States. Our hope is to see more of these schools embark
in the training of students for possible entry into the
foodservice industry. The foodservice equipment repair
industry is a great trade and we need to keep promoting
it. Our members are certainly the best ones to reach out
to our communities and do just that. We encourage the
manufacturers and their service personnel to promote the
trade in their own environment as well. They too, have a
lot to offer students who want an interesting career.
Manufacturers have always generated good resource
people with the great technical knowledge that have been
an indispensable resource to our industry. Attracting new
blood in their realm is certainly a plus for us all.
The Ad Hoc Training and
are continuing the
evaluation of a dedicated
regional trainer program.
M3 has offered their services
for such a program;
Committee will first deal
with the production of
the curriculum and then
a dedicated regional
trainer. M3 is widely
known for their production
of many manufacturers’ technical information. They
have produced information for such companies as Montague,
Enodis, Turbo Chef and many others. You may view
their information at www.m3com.us. M3 has created 3D
animation film illustrating repairs and operating processes
for different type of products along with a good understanding
of our industry.
Our Membership Services Committee is also working on
a very interesting project: a parts catalogue. Mark Le-
Berte who co-chairs that committee, is preparing a fantastic
tool for our membership. This catalogue will allow all
members a tool to offer to their local customers. In addition
to being a benefit for the service companies, it will
promote the use of OEM parts – a benefit to the manufacturers
as well. The NAFEM/CFESA Liaison Committee
has already had several meetings about their support of
this project. Inevitably, this project will be incorporated
into a global strategy to continue promoting such parts
throughout the Industry. I personally hope to be able to
join Mark and help him complete this project once our
new president takes over in May. This is a project I value
tremendously and I am very appreciative of the great
Continued on page 23
Bruce Hodge, General Parts LLC
I have often been asked how we manage the labor rates
that manufacturers pay us for warranty service. My standard
reply is that we don’t! We manage the manufacturer
relationship and negotiate rates based on our business
needs and financial goals. Over the years our company
has developed a larger broad based approach to manufacturers
that looks at the entire block of business that is
driven by the relationship with that manufacturer. By taking
this approach, we are better able to measure the entire
relationship and the overall effect on our bottom line.
Today as it stands in our industry, warranty labor rates
are reviewed and adjusted only on an annual basis. In
some extreme cases, the review can stretch out two
years or more. This annual adjustment of rates would not
be so bad if the adjustments were substantial enough to
keep up with the spiraling costs of running a quality service
company. The fact of the matter is that these adjustments
do not keep pace. Currently, warranty labor rates
hover at levels from 15% to 35% below the rates we
charge our best end user customers and the gap is widening.
Many of us remember when that difference was no
more than 15%.
Additionally, the discussion centered on warranty service
rates is often one sided. Most manufacturers state what
they are willing to pay (either in dollars or a range) and
service companies, for the most part agree. There doesn’t
seem to be any real discussion involved or any substantive
exchange of ideas.
I don’t know whether this annual rate dance we do is a
hard and fast rule or done just for expediency, but I do
know that all businesses should have the ability to adjust
their pricing when significant changes in costs drastically
alter their bottom line.
In an effort to help us better understand what our warranty
rate should be for each manufacturer, we decided a
few years ago to take a different approach. First, we developed
a financial matrix that measures the amount of
overall business that the manufacturer brings to our bottom
line. This includes parts sales, non warranty service
labor and parts as well as warranty labor and parts. We
feel it is important to look at the whole picture.
Secondly, we divide the amount of money we were paid
for our labor by the total hours invoiced to determine our
“effective” billing rate. In every case this will be lower that
your contracted rate because of write offs, credits and
invoice adjustments. This effective billing rate is the core
measurement for warranty labor rates.
Third, we recently developed a manufacturer evaluation
that considers the other factors in the relationship such as
accounts receivable, parts policies, training and overall
support. The program assigns each component a numeric
grade. This scorecard is tabulated and measured against
a maximum score. The financial components of the
scorecard are weighted more heavily than the other sections.
After reviewing these three components, we have a realistic
idea where our warranty labor rates should be for
While the above calculations are necessary and helpful,
the process still leaves some wiggle room. To assist us
further in determining a walk away point, we developed
another financial matrix that measures fully our cost to put
a trained technician in the field in a properly equipped
vehicle. This model takes into account wages, training,
benefits and management oversight and distills it down to
an hourly rate. The hourly rate we are paid from any
manufacturer has to exceed that number in raw form and
also exceed the actual effective billing rate once all the
adjustments are made. Additionally, we have established
a combined overall gross margin of 45% or more for the
entire block of business that a manufacturer brings to us.
We have found it to be a poor business decision to represent
any manufacturer that fails to meet these basic criteria.
The determination to continue a relationship with a
manufacturer or to end it is then a business decision
based on empirical data instead of emotion.
Throughout the years, I have cancelled numerous manufacturers
based on their warranty rates. I continue that
practice today. Some of these were very large, high profile
companies. The difference is that today I have good
information to make an informed decision. In the past,
dropping a manufacturer had mixed results at best. While
our overall service margins did increase, sales in some
product lines decreased and our cost of parts for those
manufacturers increased as well. We also lost out on the
revenue that “special programs” such as installs, retrofits
and scheduled maintenance programs delivered that are
driven exclusively by the manufacturer. The real positive
that came out of it was that in future discussions with
these same manufacturers, they knew we were prepared
to enter into a more equitable relationship. By taking that
firm historical stance along with having hard data that we
share openly with them, we have managed to improve our
warranty compensation and forge stronger business relationships.
Continued on page 21
Executive Director’s Message—Carla Strickland
Allied Association Meetings Are Always Interesting
As is customary, your CFESA president and I attend the
allied association conferences. This year is no different.
Jean and I first attended the NAFEM Executive Conference
in February. Equipment operators are paying close
attention to their energy consumption. As a result,
NAFEM focused their Conference on “Going Green.”
Their keynote speaker was Joel Makower, chairman and
executive editor of Greener World Media. Makower has
helped a variety of companies develop and implement
business strategies including GE, IBM, Hewlett Packard
and Nike. Each presenter followed the same theme including
the wrap-up, which featured a representative from
Fast Company Magazine leading a panel of restaurant
and foodservice people who are leading the green revolution.
In March, Jean and I attended the FEDA Convention in
Tucson, Arizona. The highlight of my time there, other
than visiting with industry friends, was hearing Herman
Cain speak. You may remember him from years ago
when he spoke for CFESA as a favor to his friend, Frank
Burns. Mr. Cain is the former chairman of Godfather’s
Pizza and past president of the National Restaurant Association.
In his presentation, titled Leadership is Common Sense,
he began with the statement, “you can’t motivate people –
people motivate themselves. Leaders must identify and
remove the obstacles that keep people from being selfmotivated.”
How do you work with your employees? Do
you say they work with you or for you? My staff, albeit
small, works with me. That is, I would never ask them to
do something I wouldn’t do myself.
Mr. Cain says there are three critical qualities that a
leader must possess. They are:
• The ability to recognize that people must motivate
• The ability to take risks and make the tough decisions
• The ability to block out the unnecessary and concentrate
on the necessary
He says you need to ask your employees the right questions,
such as “do you know what is expected of you and
do you have the right tools to do your job.” If the answer
to either of these questions is “no,” then, as the employer,
you must first identify and focus on correcting the problem.
Secondly, you must ask the right questions to correcting
the problem. And finally, in order to keep the employee
motivated, you must remove the barriers that prevent
the employee from doing
his or her job.
Mr. Cain suggested praising
each employee at least once
per week. He further suggested
asking these three
questions during each employee
review – not requiring
the answers – but asking the
employee to think about the
answers to themselves: (This
is Mr. Cain’s definition for happiness)
1. Do you like what you do professionally?
2. Do you have a goal to strive for both personally and
3. Do you have support for your goals both personally
Now, although these questions sound pretty elementary.
But, in reality we all should ask and answer these questions
Here is a bit about Mr. Cain’s background directly from his
website. “He is the USAmerican Dream. A Horatio Alger
Award Recipient, Herman grew up in Georgia with wonderful
parents and little else. Herman's father worked
three jobs - a chauffeur, barber and janitor because he
wanted his sons to have "a little better start in life." As a
result of his dad's encouragement, Herman earned a
bachelor's degree and master's degree and would succeed
at the highest levels of corporate America.
On another note, I would like to thank Jean Choquette for
all the time and effort he has put into CFESA. I have to
admit being a bit “gun shy” about this very vocal French
Canadian. However, it has been a most enjoyable experience,
including translating his articles from what Jean
calls “Frenglish” to “English!” We will have a new president
in May and I hope you will all provide the support
and energy needed to further advance CFESA.
See you in Chicago. ■
Email Chronicles - A Tale of Woe
Lauri Smith, Marketing Director
Email is great. It keeps us in touch with each other no
matter where we are or what time it is. A recent study
found that In 1999 the USPS was delivering over 600 million
pieces of mail per day but by 2007 electronic mail
outnumbered postal mail by 1000 to 1. The study also
revealed that email is much older than the Internet. It was
never invented; it evolved from very simple beginnings.
Ray Tomlinson is credited with inventing email in 1972.
Like many of the Internet inventors, Tomlinson worked for
Bolt Beranek and Newman as an ARPANET contractor.
He picked the @ symbol from the computer keyboard to
denote sending messages from one computer to another.
Now more than 700 million people internationally use
However, email can wreak havoc and crash your PC. All
sorts of viruses can be attached to email by masquerading
as love letters, photos of family and friends, security
passwords, program updates, and almost anything else
you can think of. These viruses bring chaos to many users
of the internet every single day.
One of the most popular email programs used in offices
today is Microsoft Outlook. Countless people rely on this
program every day. While it is not perfect, Microsoft Outlook
is fairly reliable as an email client with great potential
for organizing—virtual folders, fast search, solid spam
and phishing filters, and seamless integration with to-do
lists and scheduling. While Outlook is a fairly stable program
and has a multitude of features and functions, it's
cousin, Outlook Express, is a loose cannon. In my opinion,
Outlook Express is miserable and needs to be exterminated.
The question on my mind is how Microsoft could
let this program fester like an open sore and not do anything
about it. Outlook Express also has a nasty history of
A friend of mine, Carl, uses Outlook Express as his primary
email program at work. Recently a box appeared
while using his email prompting him to "compress files to
save space." His choices were; yes, no or cancel. Carl
thought this sounded like a good idea, so he clicked yes. I
mean who doesn't want to save space, right? The program
started to run and the familiar hum of the hard drive
was beginning to perform it's command, when another
box appeared showing Carl his progress in compacting
his email files. The box let Carl know that in about four
minutes his email would be all bundled up - saving him
some much needed space. After about one minute, the
time changed to 20 minutes for the process to be complete.
Carl was not happy with this, as he is a very impatient
man. So he decided not to wait for the process to
finish and attempted to cancel the operation. Outlook Express
didn't like this command and refused this latest request.
He tried again but to no avail. Carl figured he'd
just shut his computer off and be done with it until he had
more time to sit and wait. Since the cancel option wasn’t
working for him, Carl decided he would try a different way
so he hit the power button on his tower to perform a hard
shut-down. That is the WORST way to shut down a computer
but as I said Carl is very impatient and didn’t realize
the repercussions of such an act.
The next day Carl came to work and as usual, the first
thing he did was open his email. He began receiving
email much like any other day. Carl then decided to
browse a folder that he created a couple of years ago to
locate a file for someone. He opened one of the email
folders, but to his horror all of the saved emails were
missing. Carl opened other folders to find his saved
emails but they were all gone! He began to panic and with
good reason. He could not locate the past four years
worth of stored emails. These were not just chatty office
and personal correspondence but projects, documents,
notes, agendas—in short, irreplaceable work. I gave him
some assistance in locating the files but we could not import
them. So we decided it was time to give in and call
Microsoft. After jumping through the many hoops to get to
an actual human voice, Shawn offered to assist me with
Carl's problem. After several wasted minutes of trying to
understand what he was saying, he asked “Can I hold
you?” Of course he meant put me on hold. Fast-forward
one hour—Microsoft could not fix the problem with THEIR
program. They determined that the email was on the
hard drive (I already knew that), but it was corrupted.
Their advice—contact an outside computer repair company.
Thankfully, they did not charge me for the support
I contacted a computer repair company and they came to
Carl’s office to evaluate his email situation. After about
90 minutes they advised me they would have to download
a program, OE Recovery Tool, that would be able to repair
the corrupted emails. The technician downloaded the
software and attempted to recover the corrupted files. No
such luck! I asked him if we could get a refund and he
said “Nope, it’s just a crap shoot anyway.” So here we
are almost $300 into this process and Carl still did not
have any way to open or view his stored emails. He’s
pretty much resigned to the fact that the emails are lost
but I have not given up. I can see that the files are on the
hard drive so there has to be a way!
The moral of the story—Outlook Express should be
avoided at all costs. If you must use Microsoft email, use
Outlook and DO NOT COMPRESS OR COMPACT! But
just remember Outlook Express enjoys a 75-80% share of
the corporate email market, which is similar to Internet
Explorer’s share of the browser market—they make the
rules. Unless of course, you change them, or Microsoft’s
competitors force them to change by offering alternatives
to Microsoft’s often bloated, buggy software. Remember
you have a choice.
To be continued…. ■
McDonald’s Partners with Enodis to Introduce New
Low Oil Volume Fryer System
Enodis is pleased to announce that Frymaster has been
selected by McDonald’s as one of the suppliers of their
new Low Oil Volume - LOV fryer systems to its
restaurants. Frymaster worked with McDonald’s on the
development of the fryer and worldwide field testing to
validate the benefits of this system for over two years.
The new frying system uses 40% less oil than the
previous models and includes an automated vat “top off”
feature and automated filtration technology, making the
fryer easier to use for the restaurant staff.
The electric models are now available to the McDonald’s
System world wide, and gas models will be offered later
this spring. ■
Steak n Shake Announces Management Changes
The Steak n Shake Co. announced several changes in its
management structure. Wayne Kelley was appointed
interim chairman and chief executive officer, replacing
The company also promoted Jeffrey Blade to interim
president, from executive vice president, chief financial
and administrative officer. Steak n Shake said the
company is continuing its search for a permanent CEO. ■
Blodgett Names New Sales Director
Blodgett named Chris Brinkerhoff director of sales. Most
recently, Brinkerhoff served as regional vice president of
sales for Pitco/MagiKitch’n.
Prior to that, Brinkerhoff spent seven years at Blodgett,
starting in 1998 as the national account manager for the
company’s combi product, as well as director of sales in
the worldwide chain group. He also served as director of
sales for North America. ■
Peter MacFarland has been named president of MERCO
SAVOY/ENODIS. MacFarland will oversee development
of the Merco brand and its products, which include countertop,
holding, warming and display equipment. ■
Officers and Directors Elected
NAFEM announces the following new officers, who
began two-year terms (2008-2010) during the Annual
Business Meeting, Saturday, February 9, in San
• President: Paul K. Angrick, CFSP, president,
Wells/Bloomfield LLC, Verdi, Nev.
• President-Elect: Steven R. Follett, CFSP,
president, CEO & chairman, Follett Corporation,
• Secretary/Treasurer: Tom Campion, CFSP,
president, Franke Foodservice Systems, Inc., La
The results of the recent director elections include
these incumbents, serving three-year terms:
• Tom Campion, CFSP, president, Franke
Foodservice Systems, Inc., La Vergne, Tenn.
• Mike McNeel, CFSP, president, Berkel Company,
South Bend, Ind.
• David Wasserman, CFSP, president, Focus
Foodservice LLC, Vernon Hills, Ill.
• Mark Whalen, CFSP, president, AFE Group Inc./
Victory Refrigeration Company, Cherry Hill, N.J.
In addition, Joe Carlson, CFSP, president, Lakeside
Manufacturing Inc., West Milwaukee, Wisc., was
appointed to fill the director position vacated by Tom
Campion who ascended to the secretary/treasurer
QualServ Names Heller CEO
Richard Heller has become president and chief
executive officer of QualServ Corp., a provider of
custom and standard kitchen equipment, furnishings
and smallwares to the foodservice industry, based in
Kansas City, Mo. Heller replaces interim CEO
Laurance Nowak, who will continue to serve on the
company’s board of directors.
An industry veteran with more than 25 years of
experience in sales and marketing, Heller previously
served as CEO of The Steak-Umm Co.; vice president
of marketing for ConAgra Foods; chief operations
officer for Lea & Perrins; and has held other senior
marketing and sales positions at Frito-Lay and
Richardson Vicks, a division of Proctor and Gamble. ■
Manitowoc Ice Machines Earn the ENERGY STAR®
Manitowoc Ice and the ENERGY STAR® program share
a common passion. For Manitowoc Ice it’s the desire to
provide energy efficient products to
their customers and for ENERGY
STAR, it’s promoting those energy
efficient products to their customers.
In January of 2008, the EPA’s EN-
ERGY STAR program announced
that ice machines that meet maximum
potable water and energy
consumption limits would become eligible for ENERGY
STAR recognition in its commercial kitchen equipment
category. Manitowoc ice machines that have earned the
ENERGY STAR are up to 15 % more energy and water
efficient than standard models.
According to John Sara, senior product manager for
Manitowoc Ice, “Our ice machines have always been
known for their low operating costs. Now, with ice machines
being included in the ENERGY STAR program, it
will be even easier for customers to quickly identify the
most energy efficient models.” By May 2008, over 97% of
Manitowoc’s cube ice machines will meet or exceed stringent
Energy Star and CEE performance criteria. To view
the most recent list of qualified ice machines visit:
Industry Mourns Tomlinson’s Chernak
John Chernak, past-president of both Tomlinson Industries
and NAFEM lost his long time battle with diabetes in
January. He was 78. Chernak joined Tomlinson in 1957
and became president of the organization in 1994. He
was an active NAFEM member for more than three decades.
John is survived by his wife Arlene and four daughters.
Rational USA has appointed David Krites to serve as its
new president. His responsibilities include increasing
sales of the SelfCooking Center, creating operational efficiencies
and building relationships with consultants and
Giles Foodservice Equipment Annnoucement
Giles Foodservice Equipment has appointed David Byrd
as company president. In his new role, Byrd will apply his
extensive industry experience to continue to grow the
company as the brand expands its network. ■
Carlisle Acquires Dinex
Carlisle Cos., parent company of Carlisle FoodService
Products, has acquired Dinex International. The purchase
will help Carlisle levergage its product and
manufacturering capabilities in the healthcare segment. ■
Bargreen-Ellingson Named 2008 Dealer of the Year
FES has named Bargreen-Ellingson the magazine’s 2008
Dealer of the Year. The award will be presented druing
FE&S’ annual Dealer of the Year & Industry Awards Gala,
which takes place May 17 at Chicago’s Four Season
In addition to Bargreen-Ellingson, FES will recognize a
dealer, consultant, service agent and manufacturer’s rep
with the Top Achievers Awards. ■
Enodis plc Acquired by Manitowoc
We're very pleased to share with you the news that Manitowoc
Foodservice Group has reached an agreement to
acquire Enodis plc, subject to regulatory clearances.
As you know, we've seen the potential benefits of a combined
company for some time both for our shareholders
and for customers such as you. Among the many market
benefits of the combined company are:
• Providing enhanced solutions to customers around
• Offering a broader product portfolio to meet customer
• Accelerated and improved innovation in equipment,
solutions and service
• Global, regional and local support teams, facilities
Bringing together two of the industry's leading suppliers
will create one great company.
We'll share additional details of this exciting combination
in the coming months.
Manitowoc Foodservice Group will have a major presence
at the upcoming National Restaurant Association trade
show in Chicago, May 17-20. We invite you to schedule
in advance an appointment with one of our management
team during the show, or to drop by the exhibit for an informal
conversation. View the entire press release here:
Malachy Mechanical Sponsors Booth at Local College
Malachy Mechanical, Bayonne, NJ, sponsored a booth at
Hudson County Community College in April, 2008 for the
Culinary Arts & Hospitality Open House & Food Service
Market Place. Located in Jersey City, NJ, Hudson County
Community College offers associate degrees in a variety
of certificate programs including culinary arts.
The attendance for the event was very good. There was a
diverse group of visitors such as restaurant owners,
foodservice partners, chefs and culinary students. There
were demonstrations and sessions that provided a
wonderful oppurtunity to gain industry information and
network with peers. Enodis provided literature for their
new equipment and preventive maintenance programs. ■
“Texas Size Service” - Available throughout East
On March 3, 2008 RSI, a CFESA Certified Company,
opened in Tyler, Texas to provide 24-hour service (903-
287-2004) to the booming East Texas communities
included in zip codes 750-758. George Carr, CFESA
Master Technician (11 years with RSI in D/FW) takes on
duties of Regional Manager and Mike Via will support
market & client development. “Our focus will continue to
build success by working closely in our role as a key
member of the supply channel to the food equipment
industry” said Scott Hester, Partner. Services include
Deliver-Installation-Start-Up (DIS), Ongoing Performance
Maintenance (OPM) & Break-Fix services for hot & cold
food storage, ice, soda, beer & frozen beverage systems
as well as stainless welding, hardware & gaskets. We are
very excited to bring our valued premium service levels to
this market. ■
Gary’s East Coast Service, Inc of Shelton, CT has
achieved CFESA Company Re-
Certification status. Gary Petitti, is
pictured (right) with the re-certification
plaque. Gary has been a member of
CFESA since 1998. Gary and his staff
remain very active members of
CFESA by attending conferences, training classes, and
participating on committees.
A-Tech Commercial Parts & Service, Inc. Opens New
A-Tech Commercial Parts & Service, Inc. opened its new
Medway, MA office this winter to support Boston area
technicians. The new location is headed up by Bill Davock.
“All our technicians have over ten years experience,”
notes General Manager Alan Basch. “We’ve got two
CFESA Master Technicians and another four with CFESA
According to Wes Tyler, President of North American;
“When we purchased A-Tech, we bought a successful
business. We’ve just tried to improve their model.” Enhancements
have included a new computer system and a
significant increase in truck inventory to improve the rate
of first call completions. In addition, A-Tech now provides
refrigeration service. “We always had a good company”
says Service Manager Ed Dorey. “And I’ve enjoyed helping
make it more professional.”
A-Tech’s growth has come from a focus on serving chain
restaurants. “Selling parts in New England is very competitive.
Service is our best opportunity” Says Basch. “By
focusing on multi-unit operators we have the greatest opportunity
to have the right parts on the truck and techs
with the right training. When we fix it on the first call, everybody’s
The branch location address is:
A-Tech Commercial Parts & Service, Inc.
165 Main Street, Suite 303
Medway, MA 02053
800-832-8324 or 860-925-6272 ■
CFESA DVD—Foodservice Careers—A Solid Choice
AIS of Buffalo received three resumes after service technicians
attended BOCES HVAC Service Technician Program.
Wayne Stoutner forwarded the resumes to CFESA
Headquarters. He also passed them along to CFESA
members in the area due to the fact that his company is
fully staffed. This is a wonderful example of the new DVD
generating a genuine interest in the foodservice industry.
If you would like a copy of the CFESA DVD—please contact
CFESA Headquarters at 336.346.4700 or
CFESA Headquarters congratulations Gary’s East Coast
Service for their acheivement. ■
ATTENTION VOTING MEMBERS OF CFESA!
On April 15, 2008, the annual CFESA Profit Survey, conducted
by the Profit Planning Group, was mailed to all
Voting Members of CFESA. If you did not receive your
survey to be completed and returned, please call CFESA
Headquarters. If your company either has completed or
is trying to complete the requirements for becoming a
CFESA Certified Company, points are awarded for your
participation in this survey. In addition, this survey is the
best source for financial benchmarking information within
the service segment of the foodservice industry. The information
in the report – on gross margin, operating expenses,
average collection period and the like – is arranged
to provide direct comparisons with your firm. A
special Microsoft Excel-based tutorial will be designed,
using your particular company information, to compare
your figures to those of the average CFESA member, in
terms of sales size, line of business, etc. However, the
information is available only to those firms that participate
in the study.
Please note that only the employees of Profit Planning
Group will ever see your individual data. In over 20
years of conducting benchmarking surveys, the Profit
Planning Group has an unblemished record of maintaining
Once receiving the survey, you will have two options:
• Complete the balance sheet and income statement
on the survey, or
• Attach your latest full-year balance sheet and income
statement. Detailed financial statements are required
so that the Profit Planning Group can complete the
survey for you.
Do not delay completing the questionnaire. The deadline
for submission is July 15, 2008. As an added bonus,
CFESA has arranged for Dr. Al Bates, president of the
Profit Planning Group, to present the information to the
membership at the Fall Conference in Vancouver this August.
In addition to discussing this information, Dr. Bates
will discuss the issue of warranty rates and how they affect
your bottom line. Don’t wait. Return your information
before the July 15, 2008 deadline. ■
CFESA will exhibit at the upcoming NRA Show in
Chicago, May 17-20, 2008. The booth number is 5332
which is located in the North Hall. We will share booth
space with MAFSI again this year and the booth will be
very similar to the one last year. Be sure to stop by and
pick up a copy of the new membership directory. The
CFESA booth will offer show visitors a relaxing place to
have a cool glass of water as well as a bag of popcorn
thanks to Everpure and Star Manufacturing. If you would
like more details regarding CFESA and the NRA show
you may contact Lauri Smith at CFESA Headquarters;
336.346.4700 or via email: email@example.com.
The CFESA Marketing Committee was recently tasked
with a “re-branding CFESA” project. The first step in the
re-branding process was to create a new logo. As you
may have noticed this issue of On Target features the
new logo and it will soon appear on the CFESA website.
The official logo is the “Four as One Sphere.” The four
elements represent our industry usages. IE: Gas, Steam,
Electric, and Refrigeration. The logo is the formal identifier
for the Association. The official colors are Pantone
293 (blue), Pantone 187 (red), Pantone 123 (yellow), and
Pantone 422 (gray). The logo may be printed in either
four color or black and white depending on budget restraints.
The logo may be embossed, embroidered, engraved,
foil-stamped, etched in glass, etched in metal, or
carved on wood. Electronic files are available for all of the
approved logo marks. When reproducing the logo for any
purpose it is essential that you use only the authorized
If you will be attending the CFESA Spring Conference,
May 14-16, 2008 in Chicago, you will receive a disk with
the electronic files of the new logo, as well as a handbook
which details the new logo and it’s proper usages. If you
would like more information regarding the new logo
please contact Lauri Smith at CFESA Headquarters at
336.346.4700 or firstname.lastname@example.org. ■
CFESA Membership Directory
The CFESA 2008-2009 Membership Directory will be distributed
at the upcoming NRA Show in Chicago, May 17-
20, 2008. In addition, all CFESA members will receive a
copy of the directory which will be mailed the first week of
June, 2008. If you would like to purchase additional copies
of the directory you may do so for $10 per copy.
Please contact CFESA Headquarters for more information
at 336.346.4700. ■
Certified Company Spotlight
EICHENAUER SERVICES, INC.
If you’ve eaten in an area McDonald’s, Taco Bell or
Cracker Barrel you can thank the
technicians at Eichenauer Services,
Inc. (ESI) for keeping the
grills hot, the ovens baking and
the dishwashers humming. In
fact, ESI provides “after-market”
installation and technical repair
services to commercial kitchens
throughout Illinois. The company
also distributes parts and supplies
globally, providing crucial
replacements to keep restaurants, universities, and Army
mess halls operational from central Illinois to the Middle
East. Recognizing that commercial food services are not
productive unless equipment is functioning properly, ESI
embraces the motto: “We do not succeed unless our customers
Three generations share common bond of exceptional
service founded by Harold Eichenauer in 1946 as Eichenauer
Electric. The company provided electrical services
and operated a hardware store as a sideline. The company
moved into servicing commercial food equipment in
the late 1960s. Harold’s son, William “Bill” Eichenauer,
purchased the company in 1972, incorporating it as Eichenauer
Services, Inc. Bill’s involvement with the Commercial
Food Equipment Service Agencies of America (C-
FESA), an association he helped establish, boosted ESI’s
industry profile nationwide. Bill’s sons, Tom and Lee,
joined ESI in the early 1980s. Armed with business degrees
and competitive spirits, they expanded repair services
throughout Illinois and led the company into global
parts distribution. Splitting ESI into two divisions, Tom
presided over service operations and Lee took charge of
parts. Although they are identical twins, the brothers employed
distinct management styles. Tom focused on expanding
branches, while Lee focused on cost control and
automation. Their dual approaches quadrupled ESI’s
revenues and earned Tom and Lee the 1992 Foodservice
Equipment and Supply Industry’s “Young Lions Award.”
This award is just one of many accolades earned over the
years. In 1988, ESI was the only company in the nation to
receive the Vulcan Hart National Outstanding Performance
Award, followed by the Vulcan Hart National Outstanding
Service Award in 1989. These awards started a
chain of national recognition, including numerous Best
Value awards presented by the Defense Supply Center
for superior efficiency in meeting delivery schedules.
Continued on page 24
Not So Helpful
Wes Tyler, North American Commercial Parts & Service,
We’ve received requests from end user customers, and a
National Service Manager, to allow them to provide a
helper for installations that require two technicians. This
is, obviously, a way for the customer to lower their costs.
It is also a way to increase our costs.
First having someone who does not possess the training
and experience assisting our technicians on the job increases
the risk of injury to our employee. Second, if the
helper is injured on the job we will likely have an increase
in worker’s compensation cost.
Let’s say the helper works for the restaurant. If he is injured,
he will then file a worker’s compensation claim with
his employer stating he was injured performing an appliance
installation under our supervision. The restaurant’s
worker’s comp carrier will contact our insurance carrier
and seek to share the costs. Even worse, if the restaurant
has provided us with a day laborer, the entire worker’s
compensation burden would be on us.
When we hire and train our technicians, we are working to
create a safe environment for good people. When we
allow a helper, about whom we know nothing, on one of
our jobs, we put our reputation and money at risk.
Finally, in our business, the greatest challenge we face is
having enough technicians to do the work. We cannot
afford to lose a skilled technician to an injury. We also
can’t insult them by asking them to work with inexperienced
NRA Forecasts 4.4% Restaurant Industry Growth In
The National Restaurant Association doesn't think the
current general economic slowdown will have too much
impact on restaurant industry growth in 2008. The organization
released its annual forecast last Wednesday and
predicts foodservice operators will see 4.4% nominal
growth next year. With forecast menu-price inflation of
3.5%, real industry growth is expected to be 0.9%.
" The restaurant industry will enter its 17th consecutive
year of real growth next year, according to our 2008 Restaurant
Industry Forecast.," Hudson Riehle, NRA's senior
v.p. of research and information services, told Foodservice
Equipment Reports Executive Editor Jennifer Hicks.
"We expect to see sales in the nation's 945,000 restaurant
and foodservice locations reach $558 billion. & This
more modest growth compared to earlier years is due to a
number of factors, including higher food and energy
prices. The industry's workforce will grow to 13.1 million
employees, and the industry accounted for one out of
every five jobs created in the economy in '07."
NRA's revised estimate of '07 sales was not available last
week. The association originally forecast real growth of
2.1%, with 5% nominal growth, though those numbers
were probably revised downward in the current forecast.
The NRA forecast compares with Technomic's projection
of 5% nominal growth and 1.1% real growth for '08. Normally
NRA is slightly more optimistic in its forecasts than
Technomic, so the fact the two groups arrive at similar
numbers suggests negative economic events of the past
several months apparently weighed on the slightly lower
real growth projection. Technomic predicts menu-price
inflation of 4%, a half-point higher than NRA's estimate.
The association forecasts full-service restaurants will
grow 4.3% and quick service restaurants 4.4% nominal.
The complete '07 forecast, including detailed segment
and state-by-state forecasts, as well as a wealth of trends
data, is available from NRA for a nominal fee by calling
800/482-9122 or by going to NRA's Web site
8:30 a.m.—11:30 a.m. Conference Registration is open.
2:00 p.m. — 4:00 p.m. CFESA Board Meeting—As is customary, the CFESA Board of Directors meeting is open to all Voting
Members to attend. This will be a business meeting.
7:00 p.m.—10:00 p.m. Opening Dinner and Casino Night—Kick back and enjoy a casual, networking dinner with industry partners
and try your luck at one of the tables.
8:00 a.m.—9:00 a.m. Buffet Breakfast—Join other attendees over breakfast and plan your day … truly the best part of waking
9:15 a.m.—12:00 Noon CFESA Committee Meetings—Select a CFESA Committee and jump right in! You’ll hear about existing
projects and help shape future activities. CFESA Committees include:
• Business Technology
• Membership Services
12:00 Noon—1:00 p.m. Luncheon with presentations—Lunch is served. Take a break from learning and enjoy lunch with your
1:00 p.m.—3:00 p.m. CFESA Membership Meeting-All attendees are invited to join CFESA’s membership meeting to hear the
latest committee reports and learn what activities are on the horizon.
3:00 p.m.—4:30 p.m. Rotating Workshops :
• CFESA Website Tutorial—Wayne Stoutner; This tutorial will teach you how to navigate the newly
designed website along with all the membership benefits that are available for you. Bring your laptop
computers to this session to participate in a guided tour of the CFESA website.
• Capitalizing on your Membership– Dan Farmer; Use the tools available to you through CFESA to
sell the value of your association membership to your customers. Take ideas back with you that are
easy to implement and will provide an instant return on your investment. Define to your customers
what service excellence is and then charge your customers for it.
• Membership Involvement—Gary Potvin & Carla Strickland; Learn how to get involved and make your
association work for you! Educate your staff about who and what CFESA is.
8:00 a.m.—9:30 a.m. Breakfast with guest speaker David Starkey, SOI, from Professional Employer Organization (PEO) Insurance
provides broad, general and professional liability protection for the alternative staffing industry including
administration service organizations and temporary staffing firms.
9:30 a.m.—12:00 Noon Strategic Planning & Implementation Workshop—Guest speaker, Kim Cheskey. Whether you own a
business or manage a service department, this workshop is a must! All personal must be involved with the
planning process. The overall process must be probing and inclusive to get the ideas flowing and the buy-in
for later implementation. This workshop will train you how to strategically plan for the future of your company
and the implementation of your overall plan.
12:00 Noon—1:30 p.m. Luncheon—Lunch is served with passing of the gavel. Seating will be by CFESA regions. Be sure to find
your region number located on each table.
1:30 p.m.—2:30 p.m. Strategic Planning & Implementation Workshop— Wrap up
2:40 p.m.—4:00 p.m. When to Sell your Business—with guest speaker Gary Moore. This seminar includes topics such as the
risks of selling your business as well as not selling.
A Day in the Life of a Warranty Administrator
John Sappo, Daubers, Inc.
Allow me to introduce “Sue” to you. She is an all around
nice person. That is, she is known as someone who
never has a bad word for anyone as well as being known
for getting the job done. She has been with our company
for eight years. The story opens as it does each and
every day. Sue arrives to work happy and refreshed, she
sits at her desk and turns on her computer. While it’s
booting up she stops by the coffee pot and enjoys some
lighthearted conversation with her fellow employees.
From my desk, I then see Sue walk slowly back to her
desk and, with that, the transformation begins. With each
step she takes, she is moving slower and slower, her
shoulders start to sink and she starts to shake her head
slowly back and forth. The happy face is gone and the
look of dread has replaced it. As she sits down you can
hear her sigh from across the room. One may think this
person is in charge of death row or maybe the county
morgue. But you would be wrong; she is our company’s
This may seem a little over the top but it is based on reality.
Each day Sue is confronted with a different set of policies
for each manufacturer. It is then her responsibility to
make sure the others in our company know the everchanging
policies. As an example, (we will use the manufacturer’s
name as ABC), whenever a warranty service
call is made for ABC, the technician must first receive an
authorization number from ABC’s third-party administrator,
Warranty Central. These types of policies become
overwhelming not only for the technician but also for the
claims processor. Knowing each manufacturer’s nuances
becomes a terrible burden. These policies change constantly
thus resulting in rejections and drag receivables
out 60, 90 and even 120 days. The return of defective
parts in no different. Some manufacturers want only certain
parts returned while others do not require any parts to
be returned. The research to know exactly what to do for
each manufacturer requires time = money.
Each day, every warranty submission is reviewed and,
based on the specific manufacturer’s requirements is
processed and submitted to the factory either online or by
mail. When filed on-line, you at least know within a few
hours that your claim has been rejected for some reason
As an example of the complexity when filing a warranty
claim, allow me to provide another example. (We will use
the manufacturer’s name as XYZ) XYZ rejected a claim
because when we provided a replacement disposal and
entered the replacement unit part number. We were told
that you must enter the replacement unit part number in
the “notes” filed and specify an authorization number from
the manufacturer’s warranty administrator. This, in turn,
flags the manufacturer to send a no-charge replacement
In another situation, the same manufacturer, XYZ, rejected
warranty claim for a replacement housing that had
a hole blown through the side, which had been hooked up
by an installer to the incorrect voltage. The reason for
rejection - the part number for the replaced housing is an
“accessory part number” vs. a “replacement part number.”
Please keep in mind that there is no difference in this
manufacturer’s part numbers for accessory parts and replacement
parts. How would one know the difference?
To clarify this we contacted the manufacturer’s warranty
processor about the rejection. We were told that the IT
person established all electronic procedures with the third
party claims processor. We were then forwarded to their
IT person, who, by the way, has nothing to do with warranty
policies. When we asked if this “filing rule” had
been in any written bulletin form to follow, the response
was, “nope, that would be the warranty department’s job.
We just put in what they request.” When we asked the
same question of the warranty department, their response
was “I don’t have time to do that and besides I’m only a
phone call away.” We now not only have to guess what
parts are valid, we now have to call the factory each time
to confirm this. Again, time = money.
Our warranty administrator maintains six-inch, three ring
binders for all manufacturer’s warranty filing procedures
that change very frequently and are very difficult and
costly to implement. Free start-ups, extended warranties,
one-year, two-year or more warranty (special customer
policies) are all very costly to implement accurately and
timely to get reimbursed at half the rate of our nondiscounted
field labor rate.
These are only some of the reasons why warranty rates
are just not keeping up with our field labor costs.
Recently, we conducted research on exactly how much,
per hour, it costs our company to provide a professional
field service technician. Very conservatively, the figure is
$62.00 per hour to employ a two-year technician and approximately
$70.00 per hour to employ a certified senior
field technician. Armed with this information, we approached
this manufacturer and requested an increase in
our warranty rate. The conversation went as follows:
Service Manager: “Is this call all about your warranty
rate? Why don’t you just ask for a raise? The policies
and rates are controlled by corporate and accounting, not
the service department. I don’t even oversee warranty
here anymore. You were eligible for an increase in September
of ‘07. Rate increase requests must be in a letterform
for us to have on-file for our auditors.”
It’s pretty simple—ask and you shall receive. If you don’t
ask, you won’t “automatically” be given an increase. As a
service company, take the time to ask!
NOTE: Jean Choquette was recently quoted from a
manufacturer that only 35% to 40% of ASAs actually do a
formal annual request. Only those get an increase in
most cases. ■
EGS TRAINING AT AN ALL-TIME HIGH
The first CFESA EGS (Electric, Gas and Steam) fundamentals
training course of 2008 was held March 3-8, at
the Duke Power Resource Center in Charlotte, NC.
The class attendance was at an all-time high, with 59 attendees
representing 39 service companies, thus proving
once again that the need for fundamental training is
greater than ever. The trainers continue to improve upon
course work as each session unfolds. In addition, the
trainers strive to incorporate as much hands on training
as possible, utilizing training modules. As is customary,
Reggie Medlin, Everpure, conducted Customer Service
Training. And, in another “first,” for EGS, First Aid and
CPR Certification was added to the course.
There has recently been a trend for First Aid and CPR
training in the service field. As a result, the Education/
Training Committee decided to make this addition to the
EGS course. One of our own CFESA members, Lynn
Norwood, who owns a service company, Norwood’s Commercial
Appliances Inc, Banner Elk, NC, with her husband
Chip Norwood, taught the new session. Lynn is the Director
of the Health & Safety Services for the Watauga
County Red Cross in Boone, NC. She has been an Emergency
Medical Technician for 20 years, a CPR and First
Aid Instructor for 17 years and is an Instructor Trainer for
the Red Cross.
Our faithful trainers included Bill Findlay, Frymaster, who
taught basic gas, Frank Gorman, Cleveland Range, who
taught basic steam and John Schwindt, Hawkins Commercial
Appliance Service, Inc., who taught basic electricity.
We wish to thank the trainers and all those responsible
for allowing the trainers to take the time and provide
As is customary, the students were given a pretest on day
one and a final test on the last day of the course. Company
owners received the results of both tests, along with
a Certificate of Completion, for each student. These
scores indicate their marked improvement during the
week of training.
Below is a sampling of quotes from technicians who attended
• Class helped me to understand what I was being told
at work. The hands-on portion is great – 7months in
• Was a great refresher, had forgotten some of the basics
I need to use everyday – 20 years in the industry
• Great class, instructors really helped me to understand
the basics. Was able to ask any question and
get an answer without being made to feel like it was a
dumb question – 1 year in the industry
• Awesome class, every technician should attend,
hands-on is great, helped me to understand the written
material – 4 years in the industry
CFESA has scheduled two more training classes for
2008. The upcoming class information is as follows:
Management Training Class
Management personnel, within the CFESA service
agency, are responsible for “keeping operations moving.”
That is, they are responsible for the tracking and sales of
manufacturer’s parts, as well as service situations, which
develop with the manufacturer’s equipment. The CFESA
Management Training Class is a three-day classroom
course specifically designed to assist managers in doing
their jobs better. This unique three-day workshop is designed
to provide vital development for newer managers
while filling in the gaps and adding additional management
and leadership learning for seasoned managers.
Class Dates: Monday, October 20—Wednesday, October
Class Times: 8 am - 5 pm each day
Class Location and Hotel: The Platinum Hotel, 211 E.
Flamingo Road, Las Vegas, NV 89169, 702-365-5000.
Class will be held in the Pearl Room.
Refrigeration Training Class is a four day course specifically
designed to cover the basic principles of refrigeration.
The course focuses on introductory concepts including
the basic operation of domestic refrigerators, freezers,
defrost mechanisms, and electrical circuits. Topics covered
include the laws of refrigeration, compression cycle,
latent and sensible heat, methods of heat transfer, and
methods of cutting, bending, and torching tubing.
Class Dates: Monday, November 3—Thursday, November
Class Times: 8 am - 5 pm each day
Training Location: RSI, 3040 E Meadows Blvd, Mesquite
(Dallas/Fort Worth), TX 75150, 972-279-3800
Hotel: Fairfield Inn Dallas/Mesquite, 4020 Town Crossing
Blvd, Mesquite, TX 75150, 972-686-8286
Once again we want to thank all of you who continue to
support the CFESA Education Training programs! If you
have any questions in reference to the training course, or
would be interested in sending a technician to a potential
EGS course this Fall, please contact Heather Price at
“VOICE OF THE INDUSTRY” - (Article III)
As you may recall, the CFESA Board of Directors appointed
Patrick Duffy to contact up to 10 service company
members at random and ask for concrete facts and information
about decisions made, at the manufacturing level,
which may be detrimental to a service company’s profits,
operations and the services they provide. In addition,
members will be asked, at random, for decisions being
made, at the manufacturing level, which demonstrate a
true partnership. As outlined by CFESA’s counsel, specific
manufacturers’ policies may be outlined within the
article providing the policies are public knowledge. The
editorial below is the third in a series of articles titled
“Voice of the Industry.” Any topic suggestions and/or rebuttals
may be emailed to CFESA Headquarters at
Warranty Rates We Can Live With
Our costs for fuel, employee benefits and inventory continue
to increase at rates that we have no control over.
As mentioned in previous On Target articles our average
rate of return was most recently at 3.4% profit. Given the
lopsidedness of these statistics many CFESA members
have been forced to take a close look at our weakest link
in the income chain. That is, warranty rates, something
else most of us has no control over. Historically our options
have been accepting the rate or dropping the line.
We still have those options today but is there also a third
option? Are there manufacturers who understand our
predicament and offer warranty rates we can work with?
Are there any who base their warranty rates on our costs
instead of a figure based on some national formula?
Here is what we heard.
How often do you request a warranty rate increase?
The consensus was that most service companies ask for
an increase once each year. With the emphasis on the
word “ask.” Many reported going years without receiving
an adjustment. One respondent stated “I automatically
ask for an increase every July across the board.
How is your warranty rate calculated?
Here, we had many different responses. Some use their
street rate and try for a 10% to 15% discount. Others
have simple and complex formulas and matrixes for arriving
at their target number. When doing these calculations,
some take into account the true costs of having a
trained technician in a well-equipped truck, cell phone and
insurance costs. Still others look at potential parts sales
after the warranty period, including extended warranties,
as well as the timeliness in which warranty claims are
paid and how often they are adjusted. These factors and
many more are crunched and processed along with the
gross margin desired to determine what rate they would
like to get for each manufacturer. It is important to note
that these calculations often produce different rates for
different manufacturers. Most respondents did not use
the “one rate fits all” method. Another requested a 5%
increase knowing they would be allocated less.
How do you determine your “line in the sand” for warranty
Some servicers simply have a pass/fail mentality. If the
offered rate does not match their calculated target rate
they refuse to do business with that manufacturer. Others
take the calculated rate and use it as one factor in the
decision making process. Many service companies will
weigh their relationship with the manufacturer’s representative
heavily in their final decision. A good rep group and
local representation, which favors service, seem to play a
big part in the intangibles. After warranty profits, parts
discounts and overall factory support were also mentioned.
Another factor taken into consideration was if one
manufacturer was associated with others. That is, some
service companies were willing to do business with a loss
leader if it meant they would maintain a relationship with a
more profitable sister company by doing so. One servicer
stated that small manufacturers must pay their street
rates for warranty service. Another incentive was if a
manufacturer provided an exclusive territory. Still another
respondent “draws the line depending on how many warranties
I do per year and the amount of parts sales I get
from the factory as well as the discount I receive.”
Have you ever dropped a manufacturer because of
their warranty rates? How did this affect your bottom
Almost everyone responded, “yes” to this question. The
reactions were varied. Some reported that there were no
adverse affects after dropping a line due to insufficient
warranty rates. Others reported increased profit margins.
There were those who claimed their overall position with
their manufacturers benefited because now the others
knew he was serious. Yet some reported their profits decreased
because of lost margins on parts sales and less
installations. One respondent said he did not provide the
same type of service to one manufacturer after talks
“broke down.” Because of this decline in service quality,
the manufacturer eventually “awarded” the line to another
company in their area. One service company responded
that he has dropped manufacturers and never skipped a
beat. Another manufacturer actually opened their own
service network in response.
Do you have a suggestion for calculation warranty
Everyone agreed that you must know all the true costs of
doing warranty service for each manufacturer in order to
determine what rate you need to obtain. The 10% to 15%
of street rate scenario is something a manufacturer can
use to get a ballpark figure in each territory. It was unanimous
that “one size cannot fit all” when looking at coverage
for all of North America. Rates must take into account
the cost of doing business in each segment. Another
responded stated that “the calculation should be
25% off your street rates.” Two suggestions for moving
forward were brought up. One suggestion was to have
The Profit Planning Group derive true warranty costs for
the various size CFESA members.
Continued on page 20
What is Additional Insured?
Wes Tyler, North American Commercial Parts & Service,
During a recent renewal of our general liability insurance,
our carrier recommended that we begin asking our vendors
to add us as an “additional insured” on their liability
insurance. We chose not to pursue that idea because of
the additional administrative time it would take for us to
write vendors and follow up on our requests.
However, we are increasingly being asked by our vendors
and customers to add them to our policy as an “additional
In the past, it was easiest just to pass the request on to
our insurance agent, as it is part of the service they provide.
Recently, however, we started receiving charges
from our insurance carrier. It turns out that some of the
requests now include language-requesting coverage that
we don’t have; therefore the insurer increases the charge.
In one case, we would have had to pay $1,500.00 in insurance
to keep $3,000.00 of work for a municipality.
In addition, as the requests become more frequent, our
administrative burden is increasing as well. More requests
keep coming in which we have to pass to the insurance
broker. Every year when we renew our policy we
have to review the list to drop those that are longer
needed. Finally, our broker now calls us when we would
have to pay an additional premium for unusual language,
which is required by the customer, or vendor and we have
to review the charge against the value of the work to be
We have reached the point where we are considering 1.)
Requesting being named as an “additional insured” in
return for doing the same for another company; 2.) Charging
for making someone an additional insured, and; 3.)
Turning away business that doesn’t meet a minimum
I’d be interested in hearing about what other members are
(Please submit comments to CFESA Headquarters at
email@example.com for publication) ■
Voice of the Industry continued from page 18
The other suggestion was for the NAFEM/CFESA Liaison
Committee to agree on actual determining factors for
standard warranty rates.
(NOTE: Dr. Al Bates, The Profit Planning Group, is
scheduled to present a session at the CFESA Fall Conference,
in Vancouver, Canada, Thursday, August 21, 2008,
titled “The Impact of Warranty Claims/Rejections.”) ■
Warranty Rates continued from page 5
In conclusion I would give the following advice to a service
agent when discussing rates. First, it starts with
knowing your costs. Anyone that tries to tie warranty rates
to their street rate is just kidding themselves. You are tilting
at windmills. All of our street rates have been developed
as a function of the amount of warranty work that we
perform. The more warranty work we do, the higher our
street rates must become to hit our financial targets.
Secondly, both parties must start with the premise that all
companies are not equal. There should not be a
“standard” rate for all companies. Many on both sides use
this model and it is an absurd way to compensate anyone.
Evaluate each one independent of the others and
you’ll be able to see clearly which ones are good partners
and the ones that are not.
Finally, you will always get the best deal if you are willing
to walk away. If both parties complain, it’s probably a fair
DID YOU KNOW?
IHOP updates Applebee’s condition, recovery plan
Outlining turnaround plans for the newly acquired
Applebee’s Neighborhood Grill & Bar brand, executives of
IHOP Corp. stressed the opportunities but acknowledged
to a roomful of financial analysts that proceeds from the
sale of company-operated Applebee’s units may fall short
Some 39 of Applebee’s 43 existing franchisees have
expressed interest in buying the company stores, IHOP
chairman and chief executive Julia Stewart said at the
conference. IHOP also is looking to private-equity buyers,
she said. IHOP said at the time of the $2.1 billion deal’s
closing that Stewart would oversee day-to-day operations
of Applebee’s on an interim basis.
With the Applebee’s acquisition last November, IHOP is
now the largest full-service restaurant operator in the
United States with almost 3,300 restaurants. Virtually all
of the IHOP family restaurants in that mix are franchised.
NEMCO Promotes Wibel to V.P. Sales & Marketing
“We’ll Stay Close to the Foodservice Trendsetters ”
HICKSVILLE, OHIO—After seeing significant sales
growth, several acquisitions, a multitude of new product
introductions and the successful establishment of a new
international presence—all since bringing her on board 11
years ago—NEMCO Food Equipment has named Michelle
Wibel its vice president of sales & marketing.
In addition to overseeing NEMCO’s domestic sales, while
participating in the development of international sales and
playing a key role in strategic planning, Wibel will continue
to manage all marketing and marketing communications
initiatives with a sharp focus on anticipating market
“We’ll stay close to the foodservice trendsetters,” says
Wibel, “so they continue to see us as a partner in innovation
for countertop equipment that improves profitability.
Right now, for example, when you consider menu churn,
consumer expectations and labor issues, as well as
‘green’ trends that are shifting from prepackaged to fresh,
NEMCO fits right in with our time- and space-saving designs.”
Wibel also plans to lead NEMCO in its strategy to grow
through nontraditional marketing channels, as they’ve
done in the last few years selling into convenience stores.
It’s one more reason why NEMCO has likewise expanded
its sales & marketing and customer service personnel
during Wibel’s tenure.
Before NEMCO, and while closing in on her bachelor of
science degree in restaurant, hotel and institutional management
from Purdue University, Wibel laid the foundation
for her 25-year resume in foodservice sales and marketing
at Lincoln Foodservice Products.
Wibel became a Certified Foodservice Professional
(CFSP) in 1995, earned the North American Association
of Food Equipment Manufacturers (NAFEM) President’s
Award in 2001 and has served twice on the NAFEM
NEMCO Food Equipment, an innovator of food-prep and
other foodservice equipment, specializes in developing
solutions that actualize new food concepts or address
specific kitchen needs.
Online Certification Testing – A Breath of Fresh Air!
Heather Price, Member Services Director
The Education Training Committee requested two service
member companies to “test” the new online certification
process. Hawkins Commercial Appliance Service Inc of
Colorado and Norwood’s Commercial Appliances Inc of
North Carolina were the participants.
Upon the completion of the test, both members reported
that the process was much easier than they had anticipated
and they liked the instant test results at the end of
the session. They offered a few suggestions that were
incorporated into the process.
Feedback from the online testing has been very positive.
Chip Norwood stated “I had an employee take the new
online test and the instructions for signing in were clear
and easy to follow. It was also nice to be able to get immediate
results about how the student did and what areas
of weakness he or she might have had. The whole testing
process took less than 11/2 hours to complete.” John
Schwindt remarked “We tested the Online gas certification
test and the results were very encouraging. We found
that the format was very user friendly, easy to do, and the
techs really liked not having a separate answer sheet to
fill out. (This tech did the test last time on paper and he
was a row off on the answer key for half the test and
found out at the end of the test). The tech conveyed to me
that since you could not skip a question and go back to it
later, it forced him to read the question carefully and think
hard about the question. He also liked getting both the
results and the areas of weakness report when he was
done. No more stressful weeks after taking the tests wondering
if you passed or not.”
The process for requesting a CFESA Certification test has
not changed. To order a test, visit the CFESA website,
www.cfesa.com, login in to the members only section,
complete the test request form located in the tech testing
section. Be sure to indicate on the form if you wish to
have your technicians take the test using the testing
booklet or online. Once this information is received into
CFESA headquarters, it will be processed and the testing
instructions will be sent directly to the proctor.
For more information or questions please contact Marsha
Cross at CFESA Headquarters, firstname.lastname@example.org or
For more information, contact NEMCO Food Equipment,
Ltd., 301 Meuse Argonne, Hicksville, Ohio 43526, (800)
782-6761 or (419) 542-7751, fax (419) 542-6690,
The NAFEM Show Makes Important Shifts
In 2009, The NAFEM Show shifts to the beginning of the
year, and makes an important move to Orlando - all to
ensure The NAFEM Show remains the premier equipment
and supplies venue for foodservice professionals.
Why these changes?
Why Q1? Better for Business
Customer research indicates The NAFEM Show attendees
make purchasing decisions early in the calendar
As the foodservice industry’s first exhibition of the year,
The NAFEM Show provides an ideal launching pad for
innovation – new year, new products, new budgets.
Owner/operators say the move to Q1 better matches their
planning and buying cycles, so they can implement something
they’ve seen at The NAFEM Show later that same
A consistent date pattern helps create brand recognition
and repeat participation because everyone knows when
the show takes place every two years.
Overall, The NAFEM Show’s move to February helps you
get a jump-start on attendee buying cycles.
Why Orlando? High Ratings, High Accessibility
With its expanding show offerings and a growing attendee
base, there are very few cities with the capabilities of
hosting The NAFEM Show today and in the future. Orlando
is the best choice for NAFEM because it offers:
An excellent infrastructure, both for exhibit and hotel
needs. An extremely attractive destination for The
NAFEM Show’s growing international attendee base.
Easy accessibility for the majority of the foodservice community.
However, The NAFEM Show has no intention of becoming
a regional show with a move to the Southeast. In fact,
research has shown:
Repeat shows in Orlando achieve continued attendance
growth over time.
Why The NAFEM Show? Same Quality, Same One-Stop
Most importantly, exhibitors should be confident that The
NAFEM Show continues its tradition of meeting the needs
of the foodservice community by delivering the highest
quality trade show in the marketplace:
More than 20,000 foodservice professionals convene at
The NAFEM Show to see the latest and greatest innovations.
More than 600 exhibitors provide a one-stop marketplace
that offers a complete spectrum of foodservice
equipment, supplies and technology.
The NAFEM Show offers the strongest collection of education,
networking and partnership venues in the industry.
FS/TEC co-locates again with The NAFEM Show in 2009,
providing operators and attendees total solutions for their
foodservice operations – equipment, supplies and foodservice
related technology all under one roof. The
NAFEM Show continues its reputation of creating the #1
foodservice equipment and supplies spend opportunity in
the industry. ■
Last Call continued from page 4
work Mark has accomplished so far in the preparation of
Finally, I would like to thank everyone in the Association
for their great support during the last two years that I was
given the privilege to serve as President of CFESA. Our
Board Members, Tina Reese, John Swanson, Scott Hester,
John Schwindt, Patrick Duffy, Mark LeBerte, Joe
Pierce, David Hahn, Wayne Stoutner, Gary Schermann,
Roger Kauffman, our Executive Director, Carla Strickland
and the staff of Helm and Associates (Carla’s management
firm), Heather Price, Lauri Smith, Karen Afocx and
Marsha Cross have all brought an enormous contribution
to the well being of the Association and undoubtedly we
should all be thankful for that. Without the dedication of
these people we could not keep this great venture going. I
would also like to make a special mention to Todd Maxwell
who has served for many years on our board and
retired from the board at the end of last year. Todd has
been a great supporter and with his great sense of leadership,
helped craft many valuable programs while he was
on the board. ■
The NAFEM Show experienced high exhibitor satisfaction
ratings when held in Orlando previously. Foodservice professionals
indicate they will travel to The NAFEM Show
regardless of location. The NAFEM Show’s move to Orlando
provides an excellent backdrop to ensure exhibitors
and attendees have an outstanding show experience,
while contributing to the show’s growth over time.
Strategies are Different than Tactics
Strategic planning is an organization's process of defining
its strategy, or direction, and making decisions on allocating
its resources to pursue this strategy, including its capital
and people. Various business analyzing techniques
can be used in strategic planning, including SWOT analysis
(Strengths, Weaknesses, Opportunities, and Threats )
and PEST analysis (Political, Economic, Social, and
Strategies are different from tactics in that:
1. They are proactive and not re-active as tactics are.
2. They are internal in source and the business venture
has absolute control over its application.
3. Strategy can only be applied once; after that it is process
of application with no unique element remaining.
4. The outcome is normally a strategic plan which is used
as guidance to define functional and divisional plans, including
Technology, Marketing, etc.
Strategic Planning is the formal consideration of an organization's
future course. All strategic planning deals
with at least one of three key questions:
• "What do we do?"
• "For whom do we do it?"
• "How do we excel?"
In business strategic planning, the third question is better
phrased "How can we beat or avoid competition?"
In many organizations, this is viewed as a process for
determining where an organization is going over the next
year or, more typically, three to five years, although some
extend their vision to 20 years.
In order to determine where it is going, the organization
needs to know exactly where it stands, then determine
where it wants to go and how it will get there. The resulting
document is called the "strategic plan."
It is also true that strategic planning may be a tool for effectively
plotting the direction of a company; however,
strategic planning itself cannot foretell exactly how the
market will evolve and what issues will surface in the
coming days in order to plan your organizational strategy.
Therefore, strategic innovation and tinkering with the
'strategic plan' have to be a cornerstone strategy for an
organization to survive the turbulent business climate.
The following terms have been used in Strategic Planning:
desired end states, plans, policies, goals, objectives,
strategies, tactics and actions.
Ask yourself this question: when was the last time you
took a long hard look at your own company strategies in
an objective way? Because this topic warrants further discussion,
CFESA will feature guest speaker Kim Chesky at
the upcoming Spring Conference in Chicago. Mr.
Chesky’s presentation will include more information about
strategic planning. Be sure to attend. ■
Eichenauer continued from page 12
In 2002, Loyola University named ESI its “Illinois Small
Business of the Year.” As part of ESI’s continued expansion,
Tom and Lee Eichenauer purchased ESI in 2004,
reuniting the parts and service divisions and reorganizing
the management team. Tom now serves as Chief Executive
Officer and Lee serves as Chief Operating Officer.
The brothers rely on consultants to improve internal communication
techniques and synergize their divergent management
styles. Drafting an aggressive business plan,
they set a five-year goal to double ESI’s business by offering
“cold-side” servicing. Tom and Lee believe in education
– for themselves and their employees. The company
encourages personal growth by offering tuition reimbursement
incentives for higher education.
Within two-and-a-half years, the staff went from 9 percent
college-educated to 30 percent college educated. Valuing
employees’ contributions to the company’s success, Tom
and Lee also instituted a profit-sharing plan to allow employees
to share in ESI’s accomplishments. They also
recognize and reward employees through an annual company
celebration and events such as golf outings and
Texas Hold’em tournaments. Although 80 percent of the
company’s revenue is generated outside Decatur, ESI
recognizes the competitive advantages it gains from
headquartering operations in Decatur. Logistically, Decatur
provides a centralized location for servicing the entire
state and distributing parts across the country. Decatur
also offers favorable costs and tax incentives that enhance
the company's ability for future growth and expansion.
Strategic planning is a very important business activity. It
is also important in the public sector areas such as education.
It is practiced widely informally and formally. Strategic
planning and decision processes should end with
objectives and a roadmap of ways to achieve those objectives.
Five Food Trends to Watch This New Year
It's that trend-obsessed time of year when everyone's
looking back at the past year and forward to chart the
likely trends of the next. We've been checking out the predictions
of trend spotters like Mintel and Epicurious.com
and consulting our own crystal ball, and here are our
picks for the five food trends that you'll be hearing the
most about in 2008.
• Probiotics - The functional-food trend will probably
continue to run rampant, with producers adding all
kinds of nostrums to all kinds of products and touting
them as formulations for the brain or for the heart, for
older women or for the overstressed. But expect to
hear the most about beneficial bacteria. It's not just
yogurt anymore; bacteria-enriched products are
showing up all over the supermarket, from cereal to
baby food to fizzy kombucha fermented-tea drinks.
Expect, too, to see more "prebiotics" - foods that provide
nourishment for the good-guy bugs in our digestive
• The bottled-water backlash - Once so chic, bottled
water is becoming, as the Philadelphia Inquirer put it,
"the environmentally incorrect Humvee of beverages."
It's under attack for its effects on the environment,
from its depletion of water sources to its carbon footprint
to the problem of all those discarded plastic bottles.
Plus the fact that it costs more than gasoline,
while tap water, which is held to more rigorous contamination
standards than bottled, is basically free.
• Ungobbledygooked labels - Food producers are beginning
to feel pressure to remove the additives - preservatives,
stabilizers, coloring, all those chemicals
and such that you can't pronounce - from their cans
and packages. "In 2008," says Mintel, "we will see
more products with ingredient labels that read like a
home recipe rather than a chemist's shopping list."
• Fair trade - With organic food now solidly ensconced
in the mainstream, look for fair-trade products to become
the next big focus of conscience-driven consumers.
The movement seeks fair wages and treatment
for workers in developing countries.
CFESA Spring Conference
May 14-16, 2008
National Restaurant Association Show
May 17-20, 2008
School Nutrition Association Conference
July 20-23, 2008
American Correctional Association Summer Conference
August 8, 2008 -- August 13, 2008
New Orleans, LA
Association of Correctional Food Service Affiliates Conference
August 9-14, 2008
CFESA Fall Conference
August 19-21, 2008
Four Seasons Hotel
Vancouver, British Columbia, Canada
ACFSA Annual Conference
August 24, 2008 - August 28, 2008
Embassy Suites Hotel & Convention Center
North Charleston, SC
CFESA Management Training Class
October 20-22, 2008
The Platinum Hotel
Las Vegas, NV
CFESA Refrigeration Training Class
November 3-6, 2008
RSI—Refrigeration Specialist Inc.
You may register for the CFESA Conferences or Training
Classes online at www.cfesa.com.
• Focus on salt - While health activists press for lowersodium
processed foods, upscale "designer" salts are
going mainstream. Black, pink, purple, flavored with
aromatics, from the Himalayas or Peru, fancy salts
are moving from specialty stores to supermarkets. ■
Technicians Passing Certification Tests in November & December
American Kitchen Machinery
Windsor, Ontario, Canada
Montreal, Quebec, Canada
San Antonio, TX
Duffy’s Equipment Services
GCS Service, Inc.
St. Paul, MN
Goodwin Tucker Group
Des Moines, IA
Hagar Restaurant Service
Oklahoma City, OK
Hi Tech Commercial
Las Vegas, NV
Jay Hill Repairs
Des Moines, IA
Eau Claire, WI
Refrigerated Specialist INC
Whaley FoodService Repairs
To support quality service, CFESA has a program in which technicians are tested and certified only upon successful
completion of an exam. Our technicians are awarded seals of excellence in electricity, gas, steam or refrigeration and
given certificates noting their CFESA Certified Technician status in that area. Once a technician has passed 3 of 4 tests,
they are awarded a Master Technician Certification. The CFESA Certified Master Technicians are among the most
knowledgeable techs in the industry. Restaurant owners and foodservice managers alike recognize the value of a highly
educated technician when they request a CFESA Certified Technician to perform their maintenance and repairs.
If you are interested in having a technician test in the area of Electric, Gas, Steam or Refrigeration you may visit the
CFESA website and download the CFESA testing forms, proctor guidelines and other important documents that relate to
the CFESA testing programs. You may also contact Marsha Cross, Testing Administrator at CFESA Headquarters at
336.346.4700 or via email to email@example.com.