White Castle’s Family Philosophy Drives its Fleet Operations
For more than 80 years, White Castle Management Co. has developed a very “different” work atmosphere. With more than 380 restaurants and 500 million burgers sold last year alone, this distinctive company treats its employees like family members. In fact, employees are called team members.
“I believe the most important ‘best practice’ White Castle has is that all team members are considered part of the White Castle family,” says Diana Stokes, director of administrative services for White Castle, based in Columbus, Ohio.
Owned and operated by the Ingram family, White Castle does not franchise its businesses. It is common for members of the same family through third and fourth generations to work for White Castle.
“Every year we celebrate those team members who have worked for White Castle for 25 years,” says Stokes. “This year we will induct 74 people into the White Castle 25-Year Club.”
White Castle’s notable operational approach has extended to fleet
management, in operation since the 1960s. Not only does the “family” atmosphere distinguish White Castle’s fleet, but its management and maintenance policies also differ from the industry standard.
Drivers Choose from Three Selection Options
White Castle’s fleet of 230 cars, minivans, light-duty trucks, and SUVs are leased from Emkay Inc. in Itasca, Ill. Vehicle eligibility is determined by position and/or job necessity. Vehicles are provided for management, service, and salespeople in the restaurant and factory divisions. Executive vehicles are provided to team members in director positions and above at the home office and to division managers. Motor vehicle records (MVR) are run when a new vehicle is ordered and at least annually on each driver.
Vehicle replacement policy is three years/75,000 miles for cars and minivans and four years/80,000 miles for service department vehicles, including pickup trucks and cargo vans.
Stokes offers team members three vehicle options; they select the option they feel most comfortable with.
“The first option allows team members to select a recommended model for their driver group, including regional management, service department, or sales,” says Stokes. “The second option allows team members to obtain management approval to choose a vehicle other than the specified recommended model.”
With the first option, team members may choose and pay for certain optional equipment with the fleet administrator’s written approval. In the second option, team members pay only the difference between the cost of the recommended model for their driver group and their chosen vehicle. All team members may use their vehicles for personal use, including vacations, a benefit that’s considered “compensation” for tax purposes. Spouses are also eligible to drive vehicles.
Under options one and two, team members are responsible for vehicle maintenance, upkeep, and fuel. White Castle pays for tire replacement. Team members must turn in weekly mileage logs, and business miles driven are reimbursed at a rate determined by Runzheimer International, based on certain criteria set by White Castle. A portion of the mileage reimbursement covers preventive maintenance.
“A third option is available for team members who are eligible for a leased vehicle,” says Stokes. “They may choose to purchase or lease their own vehicle and drive under a reimbursement program rather than the lease program.” For this option, Runzheimer International provides reimbursement rates with guidelines set by White Castle.
“We strive to keep this benefit equal to the lease program,” adds Stokes.
This model year, 39 percent of White Castle drivers chose option one, 29 percent selected option two, and 32 percent chose the third option. An individual’s tax situation may make option three more advantageous than lease options one or two.
Sense of ‘Ownership’ Promoted
Driver satisfaction highlights the program’s success, says Stokes
At the end of a vehicle’s replacement cycle, team members may purchase the vehicle for the amount owed, designate a buyer, or Stokes will remarket it through the leasing company.
“Any profit at resale is passed on to the driver,” says Stokes. “This is their incentive to keep the vehicle properly maintained, generally take good care of the vehicle, and not abuse the benefit by putting excessive personal miles on the vehicle.”
If a team member chooses a vehicle other than a specified recommended model, the rules are the same with the exception of disposal. The team member becomes responsible for the amount owed on the vehicle. They can purchase or sell the vehicle themselves or turn it in for remarketing through Emkay, Inc. If the sale does not bring an amount equal to what is owed on the vehicle, the driver must reimburse White Castle for the shortage.
“Because the driver is responsible for the maintenance, general upkeep, and fuel, they feel an ownership in their vehicle,” says Stokes. “Many of our drivers will take the title to their lease vehicle themselves or purchase it for a family member.”
Driver satisfaction is evident in a number of ways, according to Stokes. Because drivers can choose options to fit their individual needs, she receives few complaints about the program. Some 58 percent of White Castle’s drivers either purchased or sold their own vehicles in 2004, and 68 percent of all eligible team members choose the lease option.
“It’s a win/win situation,” says Stokes.
Web and Area Reps Aid Efficiency
White Castle drivers are spread out over 12 operating regions. The fleet administrator handles day-to-day fleet operations, such as ordering, remarketing, licensing, driver questions, and lessor issues. However, to effectively manage the fleet, White Castle has designated one “helper” in each region to assist drivers with questions, ordering, annual registrations, performing periodical vehicle inspections, and coordinating the vehicle sale.
“To enhance communication, our leasing company has a driver Web site that is very helpful,” says Stokes. “We are also in the planning stages of an Intranet site for our drivers.”
Stokes communicates policy to drivers through direct mail, e-mail, and telephone. With each vehicle delivery, the driver receives a driver information booklet outlining White Castle policy.
Stokes reviews and updates fleet policy each year or as needed. She examines benchmarks using lessor information, the National Association of Fleet Administrators (NAFA), and other fleet managers to determine necessary adjustments.
“Our ongoing policy reviews include vehicle use, recommended models and their specifications, and what the industry has to offer that may help us run our fleet more efficiently,” says Stokes.
After 15 years experience in the fleet industry, Stokes says that remaining proactive and staying involved in the industry is the key to success. “One of the most valuable tools that I use in fleet administration is NAFA,” concludes Stokes. “The information I have gained from networking with other fleet managers in the organization, and the contacts I have made with our suppliers have been invaluable.”
White Castle’s fleet is unique. It may take more time and effort to manage, but it’s worth it, according to Stokes. “Satisfied team members help make satisfied customers — and that sells hamburgers!” she says.
At a Glance
White Castle offers three vehicle options:
A model recommended for the driver’s company position and group.
With management approval, a vehicle not among specified recommended models.
A reimbursement program for drivers eligible for lease vehicles.