1. 7
Restaurant Manager

2. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Describe a restaurant’s front of the house.
Explain how restaurants forecast their business.
Describe restaurant service.
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3. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Describe front- and back-of-the-house systems.
Outline back-of-the-house operations.
Summarize restaurant management financials.

4. Front of the House (FOH)
Operations are divided into two sections: the front of the house (FOH) includes anyone with guest contact (dining room manager/hostess/bus persons/servers) and the back of the house (BOH) (kitchen manager/ cooks/prep cooks/expediter/receiving/dishwashing).
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5. Front of the House (FOH)
The restaurant is run by the general manager, or restaurant manager.
Depending on the size and sales volume of the restaurant, there may be more managers with other responsibilities.
Managers should all be cross-trained to relieve each other.
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6. Front of the House (FOH)
The hostess’ job is to greet the guests and to manage seating in the dining room sections.
Tools such as seating charts and reservations books help the hostess to control the flow of seating.
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7. Front of the House (FOH)
The FOH must create and maintain a curbside appeal—meaning keep the restaurant looking attractive both inside and out.
In addition to the 7 steps of the table service, servers are expected to be NCO—neat, clean, and organized—and to help ensure that the food is served at the appropriate temperature.

8. Restaurant Forecasting
Most businesses, including restaurants, operate by forecasting a budget of estimated sales and costs for a year.
These expenses are broken down in a weekly and monthly basis. Sales budgets are forecasts of expected business.
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9. Restaurant Forecasting
The two components used in forecasting are guest counts (covers) and the average guest check.
The guest count reveals the number of guests patronizing the restaurant over a period of time.
The number of guests will vary during the week.
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10. Restaurant Forecasting
Mondays are usually the slowest with Friday, Saturday, and Sunday usually providing up to 50% of the operation’s revenue.
Day of the week, meal period, previous forecast materializations, and special holidays are all factors of forecasting.
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11. Restaurant Forecasting
The average guest check is calculated by dividing the total sales by the number of guests.
Multiplying the number of guests by the average guest check reveals the forecasted sales.
The year is divided into twelve 28-day and one 29-day accounting periods.
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12. Restaurant Forecasting
The 13 accounting periods, when totaled, become the annual total.
Beyond using forecasts for estimating sales, managers also use them to predict staffing levels and labor cost percentages.

13. Service
Today, the quality of service has become very important to American diners.
A new American service has emerged.
A less formal yet professional approach is preferred by today’s restaurant guest.
Servers are not merely order takers.
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14. Service
They are salespeople of the restaurant and must learn to gauge the guests’ satisfaction levels and to be sensitive to guests’ needs.
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15. Service
Restaurants in the United States, Canada, and many other parts of the world use American service, in which food is prepared and appealingly placed on plates in the kitchen, carried into the dining room, and served to guests.

16. Suggestive Selling
Suggestive selling can be an exceptional tool to increase food and beverage (F&B) sales.
Servers report that most guests are not offended or uncomfortable with suggestive selling techniques.
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17. Suggestive Selling
Through training and practice, servers become sellers.
Guests will more likely be receptive to suggestions from competent servers.

18. Front of the House Restaurant Systems
Point-of-sale or POS systems, are common in restaurants and other foodservice settings, such as stadiums, theme parks, airports, and cruise ships.
They are used to track F&B charges and other retail charges that may occur at a hotel or restaurant.
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19. Front of the House Restaurant Systems
The POS system is made up of a number of POS terminals that interface with a remote central processing unit.
A POS terminal may be used as an electronic cash register, too.
Video monitors replace kitchen printers to present orders to the kitchen staff and monitor how long the orders take.
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20. Front of the House Restaurant Systems
Kitchen monitors are widely used in quick-service restaurants (QSR) and increasingly used in table service restaurants (TSR).
Guest services solutions help a restaurant develop a dining relationship with its guests.
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21. Front of the House Restaurant Systems
Their applications include frequent diner programs, delivery management with caller ID interface, guest accounts receivable, and gift certificate management.
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22. Front of the House Restaurant Systems
Applications are accessed through the POS system and give restaurateurs the opportunity to offer their guests convenience, while allowing the restaurateurs to track who their best customers are.

23. Back of the House Restaurant Systems
BOH applications, also called PMSs, include inventory control and food costing, labor management, and financial reporting features.
FOH systems track employee working time.
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24. Back of the House Restaurant Systems
A BOH management package adds the ability to manage payroll and human resource information.
Labor management includes a human resources module to track hiring, personal information, vacations, tax status, availability, and so forth.
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25. Back of the House Restaurant Systems
Scheduling capability lets managers create schedules based on forecasted business.
These are enforced as employees check in and out, allowing management control of labor costs.
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26. Back of the House Restaurant Systems
The labor management package also tracks actual working time and pay rates, feeding data into a payroll processor to generate paychecks and file tax data.
FOH and BOH systems post data into a relational database on the CPU.
Restaurant managers use these data for reporting and decision-making.
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27. Back of the House Restaurant Systems
It is important to get reports in real time so that losses can be limited.
Some reporting packages provide a continuous graphical representation of financial data.
Personal digital assistants (PDAs) allow improved time management and speedier service.
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28. Back of the House Restaurant Systems
They allow servers to post data on the spot and not at a computer terminal.
Orders don’t have to be written down.
PDAs also can be used in hotels, especially in housekeeping where they can give housekeepers and the front desk real-time information about room status.

29. Back of the House
The BOH refers to all areas that guests do not typically come in contact with; it is generally run by the kitchen manager.
The BOH includes purchasing, receiving, storing/issuing, food production, stewarding, budgeting, accounting, and control.
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30. Back of the House
The kitchen manager, cook, or chef begin the production process by determining the expected volume of business for the next few days.
Much of the prep work is done in the early morning and afternoon.
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31. Back of the House
The kitchen manager checks the head line cook’s order, which will bring the prep area up to the par stock of prepared items.
The kitchen layout is set up according to the business projected, as well as the menu design.
The cooking line is the most important part of the kitchen layout.
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32. Back of the House
The size of the kitchen and its equipment are all designed according to the sales forecasted for the restaurant.
The kitchen will also be set up according to what the customers prefer and order most.
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33. Back of the House
Teamwork is especially important in the kitchen—for example, helping each other with the prepping and the cooking.
A number of chefs are joining the green hospitality movement by encouraging the purchase of sustainable farming produce.
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34. Back of the House
More than 20,000 American Federation members are emphasizing organic and locally grown produce, whole-grain breads, and grass-fed meat products.

35. Kitchen/Food Production
Practicing proper staffing is crucial in running a successful kitchen.
Overstaffing, rather than understaffing, is often the best idea, because it is much easier to send someone home than to call someone in.
Extra employees allow for cross training and development.
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36. Kitchen/Food Production
Problems can also be eliminated if a staffing plan is created.
Also crucial to a smoothly run kitchen is a competent staff.
Implementing a comprehensive training program is vital in the kitchen due to a high turnover rate.
Often, the most competent chefs are used to train new hires.
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37. Kitchen/Food Production
Developing the skills of all employees is critical to the growth and success of the kitchen and, ultimately, the restaurant.
A development program may consist of delegating duties or projects to the staff, allowing them to expand their horizons within the kitchen and the restaurant business.
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38. Kitchen/Food Production
Such duties include projections of sales, inventory, ordering, schedule writing, and training.
When determining production, par levels should be changed weekly according to sales trends to help control and minimize waste levels.
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39. Kitchen/Food Production
The use of production control sheets is critical in controlling how the cooks use the products since production plays a key role in food cost.

40. Management Involvement and Follow-Up
Management should know firsthand what is going on in the BOH.
As management spends more time in the kitchen, more knowledge is gained, more confidence is acquired, and more respect is earned.
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41. Management Involvement and Follow-Up
Continual management follow-up is necessary to ensure that policies and standards are being upheld.

42. Employee Recognition
Recognizing employees for their efforts creates a positive environment that motivates the staff to excel and to ultimately produce consistently better quality food for the guests.
This is an important aspect of BOH management.

43. Purchasing
Purchasing for restaurants involves procuring products and services that the restaurant needs in order to serve its guests.
Operators need to determine standards to set up an effective purchasing system.
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44. Purchasing
The following must be established: standards for each food item, systems to minimize theft/pilferage, par stocks, who will do the buying, who will do the receiving, storage, and issuing of items.
Product specifications establish standards for each product.
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45. Purchasing
Computerized or manual systems can be used to minimize theft and pilferage—but it can’t prevent it.
An efficient and effective system establishes a stock level that must be on hand at all times; this is called par stock.
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46. Purchasing
The person who is responsible for ordering and the person who is responsible for receiving should not be the same person.
Keeping these responsibilities separate is important to guard against theft.
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47. Purchasing
Pre-purchasing functions include - planning menus, determining the quality and quantity needed to produce the menus, determining the inventory of stock levels, identifying items to purchase and the amount to be purchased, and writing specifications and market orders for purchase.
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48. Purchasing
Purchase orders come as the result of the product specifications.

49. Receiving
When placing an order, the restaurant operator specifies the time and day the delivery is to be made.
Receiving is a point of control in the restaurant.
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50. Receiving
The purpose is to ensure that quality, quantity, and price are what was ordered.
Perishable items may go directly to the kitchen and non-perishable items go into storage.

51. Storing/Issuing
Control of the stores is often a problem; therefore records must be kept of all items going into, and being removed from, stores.
The more people who have access to the storage areas, the more difficult it is to maintain strict controls.
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52. Storing/Issuing
Items should only be released when an authorized requisition has been completed.
First-in–first out (FIFO) ensures stock rotation by placing the most recent purchases in rotation, behind previous purchases.

53. Budgeting Budgeting costs fall into two categories:
Fixed costs are constant, regardless of the volume of business; and
Variable costs fluctuate with the volume of business.

54. Restaurant Accounting
One of the most important goals of any business is a fair return on investment, otherwise known as profit.
Accounting for income and expenditures is a necessary part of any business enterprise.

55. Balance Sheet
A balance sheet reflects how the assets and liabilities relate to the owner’s equity at a particular moment in time.
It is used by owners and investors to verify the financial health of a business.
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56. Balance Sheet
Restaurants are one of the few, fortunate types of businesses to operate on a cash basis for income receivables.
There are no outstanding accounts receivables because all sales are in cash.

57. Operating or Income Statement
The income statement, which is for a month or a year, begins with F&B sales; from this total the cost of F&B is subtracted and the remaining total is gross profit.
Other expenses and sources of income are identified by category to eventually realize net income.
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58. Operating or Income Statement
Managing the money to the bottom line requires careful scrutiny of all key results, beginning with the big-ticket controllable items such as labor costs, food costs, and beverages, on down to related controllable items.
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59. Operating or Income Statement
Additionally, management may want to compare several income statements representing operations over a number of different periods.

60. Operating Ratios
Operating ratios are industry norms that are applicable to each segment of the industry.
Several ratios are good barometers of a restaurant’s degree of success.
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61. Operating Ratios Some ratios are: Food cost percent
Beverage cost percent
Labor cost percent
Contribution margin and
Prime cost.

62. Food Cost Percentage
Food cost percentage equals cost divided by sales times 100 and is a comparison of cost of goods sold to sales.
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63. Food Cost Percentage
Food cost percentage has long been used as a yardstick for measuring the skill of the chef, cooks, and management to achieve a predetermined food cost percentage—usually 28% to 32% percent for a full service restaurant and a little higher for a high-volume, fast-food restaurant.

64. Contribution Margin
The contribution margin is the amount that a menu item contributes to the gross profit, or the difference between the cost of the item and its sale price.
Some items contribute more than others on the menu; therefore food operators focus more attention on the items that contribute more dollars.

65. Labor Cost Percentage
Labor costs are the highest single cost factor in staffing a restaurant.
Labor costs include salaries, wages, benefits, and training costs.
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66. Labor Cost Percentage
Labor costs are generally compared to sales as a percentage of sales, either as a whole or by labor category.
Labor costs are calculated by taking the cost of labor and dividing it by sales for the same period.

67. Prime Cost
Combined food, beverage, and labor costs are known as prime costs.
Prime costs should not go above 60% to 65% of sales.

68. Beverage Cost Percentage
The beverage cost percentage is calculated similar to food cost percentage and is used to compare the cost of goods sold to sales.

69. Lease and Controllable Expenses
The best lease is long term with options for renewal and should not exceed 5% to 8% of sales.
Lease costs are determined in different ways—by square foot, flat monthly rate, monthly rate plus a percentage of sales, etc.
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70. Lease and Controllable Expenses
Most leases are triple net, which means that the lessee must pay for all alterations, insurance, utilities, and commercial fees.
Some restaurants pay a combination of a flat amount based on square footage and a percentage of sales.

71. Controllable Expenses
Controllable expenses are all the expenses over which management has control.
They include labor, direct operating expenses, food costs, marketing, etc.

72. Restaurant Manager Job Analysis
The National Restaurant Association (NRA) has formulated an analysis of the foodservice manager’s job by function areas and tasks, which follows a natural sequence of functional areas from human resources to sanitation and safety.
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73. Restaurant Manager Job Analysis
Key elements that must be addressed by foodservice managers include:
Recruitment and training
Orientation and training
Scheduling for shifts
Supervision
Employee development
Accounting
Cost control
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74. Restaurant Manager Job Analysis
Key elements that must be addressed by foodservice managers include:
Scheduling and coordination
Planning
Communication
Marketing management
Facility maintenance
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75. Restaurant Manager Job Analysis
Key elements that must be addressed by foodservice managers include:
F&B operations management
Service
Sanitation and safety

76. Recycling
At the end of the night in most restaurants, leftover food, paper, bottles, and cardboard are typically put in a dumpster.
Separating garbage is dirty; it requires people and time.
But, many operators say making minor changes reduces trash and helps the budget.

77. Trends in Restaurant Operations
A few trends include more restaurant food truck and mobile vendor operators, simplifying menus, increased use of technology, delivery, fast fresh casual, credit card guarantees and overbooking, and more large retail restaurants.