© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Chapter 8 Restaurant Operations

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition After Reading and Studying This Chapter, You Should Be Able to: Describe restaurant operations for the front of the house Explain how restaurants forecast their business Outline the back of the house operations Identify key elements of an income statement Identify the key restaurant operating ratios Outline the functional areas and tasks of the restaurant manager’s job

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Front of the House “Curbside Appeal” Organizational chart:  Dining room manager  Hostess  Servers  Bussers

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Restaurant Forecasting Budget projections Guest counts or covers:  Meal periods  Day of week  Special holidays Average guest check

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Food and Beverage Occupancy Statistics Occupancy Statistics  Cover = a guest  Number of Turns = Number of Covers Number of Seats

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Average Restaurant Check Average check = Food and Beverage Sales Number of Covers

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Service Guests want less formal, yet professional Training is necessary Servers are salespeople Suggestive selling

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Back of the House Refers to the areas that the guests do not come into contact with Food production Restaurant systems:  Point of sale systems (POS)  Kitchen display systems  Guest services solutions

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition More Kitchen Systems Labor management Financial reporting Personal digital assistants

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Balancing the FOH with the BOH Purchasing Receiving Storing and issuing Food production Stewarding Budgeting Accounting and control

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Food Production Based on expected volume of business Prep work done prior to service times Kitchen layout  Cooking line Teamwork

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Kitchen/Food Production Staffing and scheduling Training and development Management involvement Employee recognition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Production Procedures Production sheets:  Count the product on hand (par levels)  Determine production level  Determine actual sales Key to consistency and quality of food

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Purchasing Use of standards (product specs) System of control for theft and loss Par stock and reorder points Who will do the purchasing? Who will handle receiving and storage?

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Receiving, Storing, and Issuing Time and date delivery is to be made Point of control Authorized requisitions FIFO

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Restaurant Manager Job Analysis Human resources management:  Training and recruiting  Orientation Budgeting Restaurant accounting:  Balance sheet  Operating or income statement

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Figure 8-4 Sample Income Statement

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Food Cost Percentage Opening inventory Purchases are added to opening inventory Subtract returns, spoilage, and complimentary meals Subtract closing inventory Final number = cost of goods sold

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Food Cost Percentage (cont.) Food Cost / Food Sales X 100 = Food Cost %

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Typical Cost Percentages Cost percentages:  Labor costs 20 to 24%  Food costs 28 to 32%  Beverage costs 18 to 24%

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Lease and Controllable Expenses Expenses:  Lease cost should be 5 to 8% of sales  Typically also pay for insurance, utilities, and commercial fees  Controllable expenses are also variable expenses

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Controls Loss of $20 billion a year due to theft and cash mishandling One out of every 3 employees will steal 35% of restaurants fail due to theft 75% of missing inventory is from theft 73% of all job applications are falsified Use of POS can solve some problems

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Trends More flavorful food Increased takeout meals and home meal replacement Food safety and sanitation Guests becoming more sophisticated

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Trends (cont.) More food court restaurants Steakhouses are again popular Segments are splitting into tiers QSRs in convenience stores Difficulty of finding good employees