critical success %26 failure factors in food court design %26 management

Critical Success & Failure Factors

in

Food Court Design

and

Food Court Management

Remember that:

A Customer sees more in an hour

Than Management sees in one year!

The Retail Property Developer’s

Simple Truths!

Value Creation!

The Single Purpose of

Retail Property Development

=

To Start the Value Creation Process you need 3 things:

1 A Good Location

2 A Good Location

3 A Good Location

To Continue Creating Value you need:

1A Good Understanding of the Retail Property Business

2 Good Building and Landscaping Design

3 Good Marketing & Promotion to attract the Right Tenants

To Continue Creating Sustainable Value with Retail

Properties you Need:1 Retail Properties that offer The Right Products and

Services for the Customers they Target!

2 Retail Properties that offer these Products and Services at Competitive Prices!

4 Retail Properties that adapt Continuously to The Trends and Dynamics of The Retail Industry

3 Retail Properties where all the Tenants are running a Profitable Business.

All these

Simple Truths also apply to Food

Courts and F&B units inside the Mall

Remodeling Phase 1 is related to presenting

all Foods during peak hours for instant service.

Entertainment Sectors in the Mall

What is the Function of Food Courts

in Shopping Malls?

What are the F&B Needs & Objectives

of Customers who come

to the Mall?

The Customer F&B Needs

can be looked at from 2 angles!

1 Necessity (Rs 50-150)

2 Business (Rs 100-250)

3 Leisure (Rs 200-500)

1 International Branded Food

2 Asian Branded Food

3 Indian Branded Food

4 Local Indian Unbranded Food

Customer F&B Objectives:

7 To have Romance

6 To Satisfy their Ego

5 To Impress others.

4 To Achieve Something

3 To Entertain

2 To Maintain and/or Enhance (Family) Relationships

1 To Satisfy Physical Needs

It’s Time to Play!Let’s Play some Mind-Games!

NOW!!!

First Question!

From each 1000 Indian Shoppers that come to your Mall

and want to eat

How many will prefer Indian Food over International Food?

Second Question!If you have two Retailers who sell similar Shoes at similar prices and

their Products and Brands are equally popular

One has a store on the Ground Floor and the other on the 3rd Floor.

Who will sell more shoes???

WHY ???

If we have a Food Court that sells mainly Popular Indian Foods on the Ground Floor at prices ranging between 50 and 100 Rs

And a group of 4 International Branded F.Food Restaurants that sell on the 3rd Floor at prices ranging between 50 and 100 Rs

Who sell More?

Third Question

If you allocate both on the Ground Floor

Or if you allocate both on the 3rd Floor

Who will have an Unfair Advantage

over the other?

Critical Success Factors for F&B units

in Shopping Malls

To offer a wide variety of choices in

Fast Food Restaurants Business Restaurants

& Specialty Restaurants

To Serve Fast-Food

Fast

To present all the F&B Products and Services

in an Entertaining way

To be Competitive

To be Unique!= To have as many

USP’S as possible

To Strive for The Critical Mass

Effect

To Integrate

International Branded F&B Concepts with

Asian Branded Concepts

with

Indian Branded Concepts and

Local Unbranded Concepts

To Integrate The F&B units with

The Entertainment units

To have High Visibility Easy Access and Exit

For the Food Court inside the Mall

Critical Failure Factors for F&B units

in Shopping Malls

To have International Branded

Fast Food outlets on the ground, first and second floors

And the Foodcourt with local Branded and Unbranded outlets on

a higher floor.

Not to have a clear Zoning with Definite

Allocation of Units for certain types

of Food and/or Brands of F&B Units.

Not to Coordinate The F&B

Promotional activities for all the F&B units in the Mall

in an Integrated way

Not to recognize that all F&B units

in the Mall Together can function like a Key Anchor

of the Mall.

Not to recognize The Key role The F&B Services in a Mall play towards

The Overall Image of the Mall as a One Stop Shopping Destination.

Not to realize That the different types of F&B products

have different Pricing Levels, Sales Levels, and Cost Structures

and as a result Different Capabilities to pay certain levels of Lease & Service charges

per sq Foot.

Not to Organize random Hygiene and Bacterial Tests

by a Professional Laboratory

Fast Food

Fast Food

Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150

Cost of Space per Month per square Foot for Counter 30 30 30

Space in Square Feet Allocated to the Fast Food Counter 110 110 110

Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9

Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%

Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940

Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%Depreciation of Kitchen, F&B Equipment & Interior of the Counter

Operator 5% 5% 5%

Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%

Counter Operator's Portion 70% 70% 70%

Property Owner's + Counter Operator's joint Portion 30% 30% 30%

Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%

Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%

Fast Food Fast Food Fast Food


Average Number of Customers per Day 244 107 63

Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191

Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603

Manpower Costs Counter as a % of Sales 18 21 23

Estimated Profit for the Counter Operator 0 0 0 Estimated Profit Counter Operations to be shared Owner/FC

Operator 61,160 52,416 44,583 Estimated Profit Counter Operations Owner/FC Operator in % of

Sales 16 16 16

EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 61,160 52,416 44,583

In % of Sales 16 16 16

Av. funds above min Cost of Space/Mth FoodCrt Operator 23,908 19,346 15,544 TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT

PROFITS 85,068 71,762 60,127


Fast Food

Fast Food

Fast Food









Operator 5% 5% 5%












Estimated Profit for the Counter Operator 0 0 0 Estimated Profit Counter Operations to be shared Owner/FC

Operator 43,560 34,816 26,983 Estimated Profit Counter Operations Owner/FC Operator in % of

Sales 12 11 9



Av. funds above min Cost of Space/Mth FoodCrt Operator 6,308 1,746 (2,056)TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT

PROFITS 49,868 36,562 24,927


Fast Food

Fast Food

Fast Food









Operator 5% 5% 5%












Estimated Profit for the Counter Operator 0 0 0

Estimated Profit Counter Operations to be shared Owner/FC Operator 25,960 17,216 9,383

Estimated Profit Counter Operations Owner/FC Operator in % of Sales 7 5 3


In % of Sales 7 5 3

Av. funds above min Cost of Space/Mth FoodCrt Operator (11,292) (15,854) (19,656)

TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT PROFITS 14,668 1,362 (10,273)

In % of Sales 4 0 (4)

Fast Food

Fast Food

Fast Food








Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%

Depreciation of Kitchen, F&B Equipment & Interior of the Counter Operator 5% 5% 5%












Estimated Profit for the Counter Operator 0 0 0

Estimated Profit Counter Operations to be shared Owner/FC Operator 8,360 (383) (8,216)

Estimated Profit Counter Operations Owner/FC Operator in % of Sales 2 (0) (3)

EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 8,360 (383) (8,216)

In % of Sales 2 (0) (3)

Av. funds above min Cost of Space/Mth FoodCrt Operator (28,891) (33,454) (37,256)

TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT PROFITS (20,531) (33,837) (45,472)

In % of Sales (6) (10) (16)

Why the International Fast Food Chains can be

Profitable while paying high leases




Cost of Space per Month per square Foot for the Fast Food Company 150 150 150

Space in Square Feet Allocated to the Fast Food Company 2,000 2,000 2,000


Estimated Average F&B Costs of the Fast Food Company 40% 37.5% 35%

Estimated Minimum Manpower Costs of the Fast Food Company 146,820 146,820 146,820

Management & Service & Overhead Costs of the Fast Food Company 5% 5% 5%

Depreciation of Kitchen, F&B Equipment & Interior of the Fast Food Company 5% 5% 5%

Depreciation of Interior Investments of the Fast Food Company 5% 5% 5%

Reality check % regarding Cost of Space per Month for the Fast Food Company 10% 10% 10%

Allocated budget for Marketing and Promotions of the Fast Food Company 2% 2% 2%

Average Estimated Franchising Fee of the Fast Food Company 6% 6% 6%

Average Number of Customers per Day 1,045 497 315

Estimated Net Sales per month Excluding Sales Tax 1,493,915 1,421,006 1,350,956

Estimated Average F&B Costs of the Fast Food Company 635,708 566,891 503,016


Estimated Profit for the Fast Food Company 141,073 148,829 156,281


Av. funds above min Cost of Space (141,073) (148,829) (156,281)

TOT AV. FUNDS ABOVE MIN BUDG.COSTS+PROFITS 0 0 0

In % of Sales 0 0 0

critical success %26 failure factors in food court design %26 management

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