Chapter 8Chapter 8Restaurant OperationsRestaurant Operations

After Reading and Studying This After Reading and Studying This Chapter, You Should Be Able to:Chapter, You Should Be Able to:

Apply the forecasting technique used in the Apply the forecasting technique used in the chapter to measure expected volume of chapter to measure expected volume of businessbusinessName and describe the various types of Name and describe the various types of servicesservicesExplain the important aspects of food Explain the important aspects of food productionproductionDescribe the key points in purchasing, Describe the key points in purchasing, receiving, storing and issuingreceiving, storing and issuing

After Reading and Studying This After Reading and Studying This Chapter, You Should Be Able to:Chapter, You Should Be Able to:

Explain the difference between controllable Explain the difference between controllable expenses and fixed costsexpenses and fixed costs

Explain the components of an income statement Explain the components of an income statement and operating ratiosand operating ratios

Describe the important aspects of a control Describe the important aspects of a control system for a restaurant operationsystem for a restaurant operation

Outline the functional areas and tasks of a Outline the functional areas and tasks of a foodservice/restaurant managerfoodservice/restaurant manager

Front of the HouseFront of the House

““Curbside Appeal”Curbside Appeal”

Organizational chartOrganizational chart– Dining Room ManagerDining Room Manager– HostessHostess– ServersServers– BussersBussers

Restaurant ForecastingRestaurant Forecasting

Budget projectionsBudget projections

Guest counts or coversGuest counts or covers– Meal periodsMeal periods– Day of weekDay of week– Special holidaysSpecial holidays

Average guest checkAverage guest check

Food and Beverage Occupancy Food and Beverage Occupancy StatisticsStatistics

Occupancy StatisticsOccupancy StatisticsCover = A guestCover = A guest

Number of Turns = Number of Turns = Number of CoversNumber of Covers

Number of SeatsNumber of Seats

Average RestaurantAverage RestaurantCheckCheck

Average check =Average check =

Food and Beverage SalesFood and Beverage Sales

Number of CoversNumber of Covers

ServiceService

Guests want less formal, yet professionalGuests want less formal, yet professional

Training is necessaryTraining is necessary

Servers are salespeopleServers are salespeople

Suggestive sellingSuggestive selling

Types of RestaurantTypes of RestaurantServiceService

French ServiceFrench Service

Russian ServiceRussian Service

American ServiceAmerican Service

Balancing the FOH with the BOHBalancing the FOH with the BOH

PurchasingPurchasingReceivingReceivingStoring and issuingStoring and issuingFood productionFood productionStewardingStewardingBudgetingBudgetingAccounting and controlAccounting and control

Food ProductionFood Production

Based on expected Based on expected volume of businessvolume of business

Prep work done prior to Prep work done prior to service timesservice times

Kitchen layoutKitchen layout– Cooking lineCooking line

TeamworkTeamwork

Kitchen/Food ProductionKitchen/Food Production

Staffing and schedulingStaffing and scheduling

Training and developmentTraining and development

Management involvementManagement involvement

Employee recognitionEmployee recognition

Production ProceduresProduction Procedures

Production sheetsProduction sheets– Count the product on Count the product on

hand (par levels)hand (par levels)– Determine production Determine production

level level – Determine actual salesDetermine actual sales

Key to consistency Key to consistency and quality of foodand quality of food

PurchasingPurchasing

Use of standards (product specs)Use of standards (product specs)

System of control for theft and lossSystem of control for theft and loss

Par stock and reorder pointsPar stock and reorder points

Who will do the purchasing?Who will do the purchasing?

Who will handle receiving and storage?Who will handle receiving and storage?

Receiving, Storing and IssuingReceiving, Storing and Issuing

Time and date delivery is to be madeTime and date delivery is to be made

Point of controlPoint of control

Authorized requisitionsAuthorized requisitions

FIFOFIFO

Food Cost PercentageFood Cost Percentage

Opening inventoryOpening inventoryPurchases are added to Purchases are added to opening inventoryopening inventorySubtract returns, spoilage Subtract returns, spoilage and complimentary mealsand complimentary mealsSubtract closing inventorySubtract closing inventoryFinal number = Cost of Final number = Cost of goods soldgoods sold

Food Cost PercentageFood Cost Percentage

Food Cost Food Cost Percentage (cont.)Percentage (cont.)

Food Cost / Food Sales Food Cost / Food Sales X 100 = X 100 =

Food Cost %Food Cost %

Typical Cost PercentagesTypical Cost Percentages

Cost PercentagesCost Percentages– Labor costs 20 to 24%Labor costs 20 to 24%– Food costs 28 to 32%Food costs 28 to 32%– Beverage costs 18 to 24%Beverage costs 18 to 24%

Lease and Controllable Lease and Controllable ExpensesExpenses

ExpensesExpenses– Lease cost should be 5 Lease cost should be 5

to 8% of salesto 8% of sales– Typically also pay for Typically also pay for

insurance, utilities and insurance, utilities and commercial feescommercial fees

– Controllable expenses Controllable expenses are also variable are also variable expensesexpenses

ControlsControls

Loss of $20 billion a year due to theft and Loss of $20 billion a year due to theft and cash mishandlingcash mishandling

One out of every 3 employees will stealOne out of every 3 employees will steal

35% of restaurants fail due to theft35% of restaurants fail due to theft

75% of missing inventory is from theft75% of missing inventory is from theft

73% of all job applications are falsified73% of all job applications are falsified

Use of POS can solve some problemsUse of POS can solve some problems

TrendsTrends

More flavorful foodMore flavorful foodIncreased takeout Increased takeout meals and home meal meals and home meal replacementreplacementFood safety and Food safety and sanitationsanitationGuests becoming Guests becoming more sophisticatedmore sophisticated

TrendsTrendsMore food court More food court restaurantsrestaurants

Steakhouses are again Steakhouses are again popularpopular

Segments are splitting Segments are splitting into tiersinto tiers

QSRs in convenience QSRs in convenience storesstores

Difficulty in finding good Difficulty in finding good employeesemployees