RESTAURANTS Restaurant Industry in 2019 VS 2021 in the U.S • $799 billion: Restaurant industry sales in 2021, down $65 billion from 2019's pre-pandemic levels • 14.5 million: Restaurant industry employees at the end of 2021, down 1 million from pre-pandemic levels • 90,000: Restaurant locations temporarily or permanently closed because of the pandemic • 9 in 10 restaurants have fewer than 50 employees • 7 in 10 restaurants are single-unit operations • 8 in 10 restaurant owners started their industry careers in entry-level positions • 9 in 10 restaurant managers started in entry-level positions • Restaurants employ more minority managers than any other industry • 41% of restaurant firms are owned by minorities – compared to 30% of businesses in the overall private sector. • Waitstaff at full-service restaurants earn a median of $27.00 an hour, with the highest paid group making $41.50 an hour and the lowest, $19.00 an hour. Classic Cuisine • North America gained most of its culinary legacy from France through 2 main events: • French Revolution in 1793—caused the best French chefs of the day to lose their employment because their bosses lost their heads! Many chefs came to North America as a result. • In 1784, Thomas Jefferson spent five years as envoy to France, and brought a French chef to the White House when he became president. Marie-Antoine Careme (1784–1833) • Considered to be one of the first “celebrity” chefs. • Served as a chef for Napoleon and George IV. • Carême produced a new refined style of eating, using fresh herbs and vegetables and simplified sauces with fewer ingredients. • He is credited with creating the standard chef's hat the “toque”. • Credited with developing the service of individual courses of food. • His secret was “mother sauces” which simplified and codified the French cuisine. • He is remembered as the founder of the haute cuisine concept or the refinement of French “high cooking”. Auguste Escoffier (1846–1935) • Emperor of the World’s Kitchens • Escoffier's most noted career achievements where revolutionizing and modernizing the menu, the art of cooking and the organization of the professional kitchen. Escoffier simplified the menu as it had been, writing the dishes down in the order in which they would be served. • He also developed the first à la Carte menu. • He refined Careme’s work on French cuisine. • He codified the recipes for the 5 mother sauces. • He published “Le Guide Culinaire” – still a major reference work today. Five Mother Sauces • Bechamel - milk-based sauce, thickened with a white roux. • Espagnole - a fortified brown veal stock sauce, thickened with a brown roux. • Velouté - light stock-based sauce, thickened with a roux or a liaison, a mixture of egg yolks and cream. • Hollandaise - an emulsion of egg yolk, butter and lemon or vinegar. • Tomate - tomato-based • Any sauce which is derived from one of the mother sauces by using additional ingredients is called a “daughter” or “secondary” sauce. CLASSIFICATION OF RESTAURANTS • Independent restaurants – typically owned by one or more proprietors, who are involved in the day to day operations of the business. Even if they own more than one they are not a chain because each restaurant functions independently. • Advantages include: independence, creativity, and flexibility. • Risk: failure due to lack of knowledge, cash, and popularity of the restaurant. • Chain restaurants – a group of restaurants which are identical in market, concept, design, service, food, and name. Standardization and consistency removes the uncertainty from the dining experience. They can be owned by individuals, companies, publicly traded, or franchised. Franchise Advantages • • • • • Allows for rapid expansion. Uses other people’s money Franchise fee & royalties of 3-6% Proven & unlikely to fail Assistance with opening, training, & advertising Drawbacks • • • • • Franchise fees: $20,000 - $40,000 + Construction costs: $ 100,000 + Royalty payments of 4% Marketing & advertising 2% Limited flexibility & creativity Franchisors and franchisees have become millionaires as the result of this process! Fine Dining Restaurants • This type of concepts offers at least 15 different entrees, and are cooked to order, with all the food being made from scratch, using raw or fresh ingredients. • Can be formal or casual and categorized by price. • There is always a high level of service. • Greeter/host, Wait Captain, and Sommelier are often employed. • Food, service, and décor combine to create a memorable experience. • Most fine dining restaurants are independently owned. • Examples of chain fine dining: Morton’s, Ruth Chris’s, & Houston’s. • Examples in Costa Rica: Divina Comida, Furca, Silvestre • Some offer “fusion” cuisine which is a blending of two different cuisines. Other Types of Restaurants • Theme Restaurants – popular for the last 30 years. has a particular décor and atmosphere with a limited menu. They are located in prime locations. Examples: TGI Fridays, Chili’s, and Cracker barrel • Celebrity Restaurants – have a great combination of design, atmosphere, and food; along with occasional visits from the owner. Chefs, Sports Celebrities, and Movie Stars are owners. Examples: Jon Bon Jovi, Soul Kitchen; Gloria & Emilio Estefan, Estefan Kitchen; Robert Deniro, NOBU • Steakhouses – often add value-priced items like chicken and fish to the menu to attract more customers. Guests return every two to three weeks and the heart of the business is red meat. • Casual Dining – is relaxed and can be chain or independent, ethnic or theme. • Family Restaurants – an informal setting with a simple menu and service designed for the whole family. Usually independently owned. • Ethnic Restaurants – originally targeted immigrant groups and are routinely independent. Quick-service/Fast food Restaurants • Offer limited menus featuring, hamburgers, fries, Hot dogs, chicken, tacos, burritos, gyros, and other convenience items. • QSR have increased in popularity through location strategies and co-branding. • Offer limited menus that are well organized and easy to read. • Service is fast and self-service is promoted when possible with minimum use of Skilled and unskilled labor. • Cheaper processed ingredients are used to allow for low, competitive prices. • QSRs are targeting international growth. Types of QSRs • Hamburger – McDonald’s is larger than the next three competitors (Burger King, KFC, & Pizza Hut). It has 36,899 restaurants with 16,000 outside the U.S. It serves 69 million people daily. Half its profits come from outside the U.S. • Pizza - a $40 billion dollar market that is fueled by convenience and delivery. • Chicken – is relatively cheap to produce, readily available, and adaptable to a variety of preparations. It is perceived as healthier than beef. Two largest chains are KFC (18,875 units) and Church’s Chicken (1,650 units). • Sandwich Restaurants - have star status due to America’s obsession with quick and convenient. • Subway has 40,000 units in 108 countries. • Delivery Services – is another way of expanding the customer base without taxing the restaurant and increasing profits. Restaurant Operations Front of the House • Includes anyone who has guest contact from the hostess to the busser. • Curbside Appeal – keeping the restaurant looking attractive. “Management begins in the parking lot and ends in the bathroom.” • Host/Greeter – welcome guests and often hold the door welcoming customers as they arrive. • Servers – use suggestive selling to offer guests, specials, adult beverages, and bring attention to items on the menu. Orders are generally taken in a clockwise manner. • Plate Times – Target times are 12 to 18 minutes at dinner; however, the industry average is 23 minutes and wait times are getting longer. Lunch menus should be served more quickly than dinner. Seven Steps of Service 1. Greet the guests. 2. Introduce and suggestively sell beverages. 3. Suggest appetizers. 4. Take orders. 5. Check to see if everything was prepared to the guests’ liking. 6. Ask if anyone would like another drink. 7. Offer desserts and suggest after dinner drinks and coffee. Restaurant Forecasting • Sales are forecasted through budgets that are set up for a year, monthly, and weekly. • Financial viability of a restaurant is predicated on sales, and sales are forecasts of expected business. • Forecasting is based on two components: • Guest Counts/Covers – the number of customers over a given period of time. • Average Guest Check – divide total sales by the number of customers. • Forecasting is divided into 13 accounting periods over a year. • Projections are used to predict labor cost percentage and staffing levels. • Generally, Mondays are slow and business builds through Friday, being the busiest day. Friday, Saturday, and Sunday usually represent 50% of the week’s revenue. Table Etiquette • We serve plates from the left and remove plates from the right. • Dishes are passed from the left at a table. This is due to most people being right handed. • Host is always served last. • Most fine dining is 5 courses and includes: appetizer, soup, salad, entrée, and desert. • When serving wine do not hold the wine glass by the bowl. Use a napkin to wipe the excess wine from the bottle. • Napkins on the table and cutlery placed in the vertical position. • Ladies and senior citizens are served first. Back of the House • FUNCTIONS OF BACK OF THE HOUSE: • • • • • • • • Purchasing Receiving Storing/Issuing Food Production Stewarding Budgeting Accounting Control • CONSIDERATIONS OF BACK OF THE HOUSE: • • • • • • • • Staffing Scheduling Training Food Cost Analysis Production Management Involvement Management Follow-up Employee Recognition Food Production • Most kitchen layouts are similar and include: • Receiving area • Walk-ins • Freezer • Dry Storage • Prep-Line • Salad bar • Cooking Line • Expediter • Dessert Station • Service Bar Area Cook Line • The most important part of the kitchen: • Broiler Station • Pickup Area • Fry Station • Salad Station • Sauté Station • Pizza/Salad Station Restaurant Operations – Chapter 8 Staffing • A restaurant’s goal is to satisfy employee needs but use staffing strategies that maximize profitability and minimize unnecessary labor costs. • Historically restaurant turnover is very high. 2017 saw a 72.1% turnover in the economy’s hospitality segment. It was the fifth consecutive year of turnover rate increases. • A recent study found that 30% of restaurant owners say staffing is their biggest problem. • Basic Rules of Restaurant Hiring • Referrals are the best option for staffing when possible! • It is better to overstaff than understaff. • Easier to send people home than to call someone in to work. • Extra employees allow for cross training and development. Ten Ways to Keep your staff • • • • • • • • • • Model the behavior you want to see. Have Fun at Staff Meetings Reward your staff Don’t Be Cheap Respect Your Staff Get to Know Your Staff Address Problems Quickly Encourage Fun at Work Ask Your Staff’s Opinion Say Thank You and Mean It! Training & Development Training is a process of: Tell, Show, Do, and Review • Training is an ongoing process that is continuous. • It can be verbal, written, audio, or video in format. • Job Shadowing (slow nights are best) • Hands-on with Supervision • Proper training ensures that little time and money will have to be spent on correcting errors. • Cross-training employees is essential to a successful operation. • Developing employees requires delegating duties and projects. • Examples include: projections of sales, inventory, ordering, schedule writing, and training. • Development is enhanced through mentorship. • Development allows for growth and promotion. Production Procedures • Production control sheets are created for each station in the kitchen. They would include: broiler, sauté, fry, pantry, window, prep, dish, and dessert. • Control sheets set the stock levels for each day according to sales. • First step is to count what is on hand for each station. • Once the production levels are determined, the amount of product required to reach the level of each recipe is decided. (This needs to be done prior to the cooks arrival.) • Next the sheets are handed to the cooks. • Par levels should be adjusted weekly according to sales trends. More Production Procedures • After all production is completed the cooks are checked out. • Production sheets are critical in controlling how cooks use products, because production is a key to food cost. • Each recipe has a specification or “spec” to follow. When cooks deviate quality goes down, consistency is lost, and food cost goes up. • Standardized recipes are used to maintain consistency and minimize waste. Management Involvement • Management should know firsthand what is going on in the back of the house. • Management should be on the line assisting the staff in the preparation of the menu and other operations in the kitchen. • Active management involvement ensures employees are doing what they need to do when they need to do it; which results in consistent food quality. Management Involvement • Management should be continually talking food cost, cleanliness, sanitation, and quality. • Managers who spend time in the kitchen increase their knowledge and confidence. They earn respect. • Employee-management interaction produces a sense of stability and a strong work ethic. This results in higher morale and a positive work environment! Purchasing • Purchasing is obtaining products and services for the restaurant to serve guests. • Product Specifications – are standards for each item. • Example: Meat – cut, weight, size, fat content, and days aged. • Develop systems to minimize loss and theft and maximize control. • Par Stock & Ordering Levels – the amount of each item needed. • Who is responsible for buying and keeping the purchasing system in motion. • Who will do the receiving, storage, and issuing of items. • It is important to separate these functions to deter theft. Menu Planning • The corporate office of chains usually determine product specifications and menu development. • Plan menus • Decide on quantity and quality needed. • Write specifications. • Determine inventory stock levels. Receiving • When placing an order, the operator specifies the day and time a delivery is to be made. • Receiving is a point of control for a restaurant! • It ensures quantity, quality, and price are exactly as ordered. These are critical components of order specifications and standardization of recipes. • Some perishable items are issued directly into the kitchen and other items are put in storage. Storing & Issuing • Records have to be kept of all items coming into and leaving the restaurant. • There needs to be one person who is authorized storage and items issued should be signed for by that individual. • No inventory is kept in the production area! • All items entering the store should have a time stamp and rotated on a FIFO system. • Controls include: regular inventory and calculating food, beverage, and labor costs. Food Cost Control • Monitoring a foodservice operation requires checking the food, beverage, and labor costs on a daily basis. • Cost of food sold = Food Cost Percentage Total Food Sales • Food cost percentages can range from 28% to 35% • Controlling food cost: • Perform Calculations • Monitor & Develop Relationships with Vendors • Evaluate Menu Planning • Reduce Waste & Theft • Schedule Staff Efficiently • Cross-Train Staff • Improve Quality of Staff Beverage Cost Control • Beverage costs are calculated in the same manner as food cost. Cost of beverage sold = Beverage cost % Total beverage sales • Beverages are more profitable than food on a cost basis! Beverage costs should be between 16% to 25%. This can vary based on your sales percentage of wine, beer, and spirits and what types you use. • Controlling Beverage Costs • Accurate par setting Pricing of drinks • Established pour policies Record spills and complimentary drinks • Weekly Inventory Security Systems • Lock up liquor Clean Quality Draft System • Buy in bulk Invoices Reflect Orders • Hire Trust Worthy Staff Labor Costs • Generally, labor is the highest cost in operating a restaurant! __Labor Cost___ = Labor Cost % Total Food Sales • Labor ranges from 26% to 36% depending on the concept. • Labor and food costs should not exceed 60%. • Factors Affecting Labor Cost • Cost of recruitment Training • Turnover Idle time • Over time Shift work • Labor efficiency Number of employees • Wastage Spoilage • Wages paid Trends in the Restaurant Business • Demographics – Almost 1/3 of the American population (78 million) are retiring and many are wealthy. • Alternative Outlets – C-stores and home meal replacement will expand due to people’s lack of time. • Diversification Within Dining Segments – people want quick, casual, and better food choices from quickservice restaurants. • More Twin and Multiple Restaurants – due to high costs multiple restaurants are being housed under one roof or on adjacent locations on a pad cite. • More Points of Service – foodservice in new environments to reach more customers. • Sustainability – the greening of restaurants. • Locally Sourced Food – buying locally whenever possible. • Healthy Kids Meals – lean protein, colorful fruit, and vegetables, whole grains, and light marinades and sauces.
