Editor’s note: This is the second in a series of three articles focusing on specific cost savings and cost recovery strategies for Dunkin’ Donuts franchise owners. In this article we examine water,  sewer and trash expenses. To see the first article about energy expenses: Saving Money & Recovering Costs: Strategies for Franchise Owners

For five years, Michael Lefkowitz owned and operated four Dunkin’ Donuts stores in Miami-Dade County. Before selling his stores in August of this year, he established ECS Business Services (ECS), a cost reduction and cost recovery consultancy. As ECS President, Lefkowitz is dedicated to helping franchise owners and other clients save money and recover costs related to fixed expenses.

As a former Dunkin’ Donuts franchisee, Lefkowitz brings a unique and valuable perspective–he’s been in your shoes–together with more than 30 years of experience managing hotels, including overseeing all purchasing and facility management.

His team of experts at ECS can perform thorough and meticulous analysis of your fixed expenses to identify opportunities for saving money on future bills as well as recouping overpayments made due to erroneous billings. This can typically be accomplished in a few weeks. When it comes to recovering costs from private vendors, the time frame from which expenses can be recouped is unlimited. If a municipality provides the service, that time frame is limited to a maximum of 36 to 48 months.

Water and Sewer Audits

In order to conduct a Water and Sewer audit on your behalf, ECS requires at least three to six months of historical billings along with your current service agreements or contracts. If you are billed on a quarterly basis, a full year of bills is preferable. ECS may also secure additional documentation from your service provider. Once ECS receives this information, the data is entered into the firm’s proprietary software. Based on the data and other relevant factors like peaks and valleys, size of facility/facilities and hours of operation, ECS performs an in-depth analysis to determine a baseline average of your costs.

As with its energy audit process, ECS builds a “virtual meter” to reconcile your billing. If the firm finds a significant discrepancy between its reconciliation and your bill amounts, then it can pursue cost recovery for you. If ECS’s calculations match or closely approximate your actual charges, then the chance of cost recovery is unlikely. There may still be cost savings possibilities, however, related to your service agreements and other factors.

“Since municipalities typically provide water and sewer services, as opposed to private vendors, the audit process can be more challenging,” said Lefkowitz. “One of the advantages we offer is our experience and familiarity with these systems, so we know who to call and how to best pursue the information we need.”

The ECS virtual meter and detailed analysis can identify any number of issues that could be resulting in erroneous water and sewer billings. ECS can arrange service verification to ensure that:

  1. The municipality or other provider is conducting actual meter reads, not estimated reads.
  2. The meters are functioning properly.
  3. The meters on your account are actually on your property.
  4. Your billing is tied to the accurate classification or rate category for your type of operation.

Further, if your shop is not free-standing, for example if it is within a shopping center, often your landlord pays the water and sewer bill and charges you a percentage. ECS can examine your lease to make sure you are being charged an appropriate percentage.

When ECS performs a 12-month analysis, if the firm notes a huge jump in charges during that time frame, this is a red flag that there could be a leak somewhere on the property. In such cases, ECS advises clients to engage a professional service to investigate this possibility and rectify the situation.

Trash Audits

“Trash is probably one of the most misunderstood utilities out there,” Lefkowitz said. “Services may be supplied by a municipality or by a private hauler, and each has its own system.”

When a municipality provides trash services, there is no specific agreement or contract with the client. Services are dictated by ordinance, and there is no flexibility in scheduling pick-ups. With private haulers, there is a written service agreement that addresses such factors as frequency of service (i.e., number of pick-ups in a defined time period) and level of service (i.e., on-site equipment, such as a compactor or an open bin). Consequently, private-vendor billing is more complicated.

As with its other audits, ECS gathers historical billing and service agreement data, which it analyzes in order to reconcile your charges. ECS conducts an investigation to ensure that your billing is in sync with your municipality ordinance or private-vendor agreement and that the actual services you are receiving match those defined by your municipality or private vendor. For example, are you being charged for three pick-ups per month but, in reality, only two pick-ups are happening? Are you being charged the proper franchise fee for your municipality? Has your fuel surcharge, which varies month-to-month and is based on federal guidelines, exceeded the fixed cap?

“With a municipality, we can rectify erroneous charges associated with the terms of the related ordinance. With private haulers, we can not only recover costs but also negotiate modifications to an existing agreement or write a new agreement altogether,” said Lefkowitz. “We can also assist clients in arranging a procedure to monitor services on an ongoing basis to ensure that charges consistently match services received.”

For more information, contact Michael Lefkowitz at michael@ecssaves.com or 786-220-9250. You can also learn more at www.ecsbusinessservices.com