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Archive | October, 2010

Motorola Makes Tableside Ordering Easy

Handheld Ordering: The Wave of the FutureMotorola recently released a case study highlighting the latest in restaurant POS system technology: handheld, wireless ordering systems for servers.  The handheld device is about twice as big as a BlackBerry, and connects directly into the restaurant’s POS software via a wireless connection.

The case study focuses on Sam’s Chowder House in the San Francisco bay area, a high volume seafood restaurant that seats about 280 people.  According to the study, the restaurant achieved a return on investment on the hand-held devices in one month.  That’s because check averages went up and table turnover times and labor costs went down.  Servers no longer have to write down orders and then re-enter them into the POS system.  Instead, they enter orders directly into the handheld device, which then sends the order along automatically.  This allows servers to focus on customer service and sales, which explains the check averages and improved table turnover times.

Labor savings were realized by Sam’s because more efficient servers means less front of house staff could serve the same amount of people in the restaurant.  This also makes the servers happy because they get more tables and therefore more tips.  Staff turnover rates have plummeted since the introduction of the handheld ordering devices as a result.  Finally, these devices can also process credit cards, allowing servers to run customer checks while standing tableside, further improving turnover times and customer service.

The handheld ordering device is obviously the future in restaurant technology, but for now, I suspect the cost of the system is still prohibitive for most restaurateurs.  Yes, Sam’s realized an ROI in one month, but Sam’s also does A LOT of business ($6 million in annual sales).  If you’re a larger operator, I really don’t see why you shouldn’t buy handheld ordering devices today.  The benefits I list above are admittedly direct from Motorola, who has an interest in hyping the good points, but they also make good logical business sense.  Imagine if your servers never had to leave their tables.  Of course sales and table turnover times are going to improve.

If you’re a smaller operator, wait for the day when these devices are much more affordable.  It’s just like any new technology (HD TV, cell phones, iPods): they’re always extremely expensive at first and then eventually become affordable to the masses.

I’m personally looking forward to the day when all restaurants have these handheld ordering systems.  Every restaurant should be able to focus on the customer, and on making the best sale possible, and handheld ordering technology is the way to get there.

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The Skinny On The FDA’s 2009 Food Code

FDA 2009 Food CodeThe Food and Drug Administration has officially released an updated Food Code for the first time since 2005.  The Food Code details procedures for implementing a food safety program in any food service environment, from grocery stores to fine dining restaurants.  The agency updates the code every four years to accommodate new developments and address ongoing food safety issues.

The most significant changes to this year’s Food Code include:

  • Leafy greens must have a time and temperature control in a HACCP food safety program
  • New requirements focus on preventing the cross contamination of food allergens and aim to improve the awareness of allergens by food service workers
  • Children’s menus cannot include cooked-to-order meats
  • Revised cleaning and sanitizing procedures for restaurant equipment

Any restaurant’s food safety program should be informed by the guidelines set out in the Food Code.  This is especially true for restaurants employing a HACCP food safety program.  The updated code addresses two of the major food safety issues of the past couple years: allergens and pathogens in fresh uncooked greens like lettuce.

To view the complete 2009 Food Code, check out this link:

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Restaurants Deliver Entrees And Keep Sales Up

Restaurants Are Delivering EntreesMore and more restaurants are relying on alternative sources of income to help them weather the current economic storm.  Many sit-down restaurants are turning to delivery as a way to boost their sales.  If you had told any restaurateur 10 years ago that they would be relying on the delivery of casual and fine dining entrees to grow sales, you would probably have been laughed at.

Oh, how quickly things change.  A December 2008 National Restaurant Association survey revealed that 50% of consumers would patronize a restaurant more frequently if it had delivery and/or take out options.  4 out of 10 casual dining restaurants and a full third of fine dining establishments think delivery is going to become a huge trend in their niche.  Those are some pretty impressive numbers.

Consumers have embraced the prospect of a delivered meal from their favorite restaurant for several reasons.  Most importantly it saves them the two things they are short on: time and money.  The time factor is obvious, but what may  not be as apparent is how restaurants can be perceived as offering a deal on entrees delivered to the door.  There’s no way it’s arriving for a better price than served in the restaurant.

But when you factor in all the costs most consumers encounter just to get to your front door, it starts to make sense.  Between gas, baby or dog sitting, and parking, consumers are starting to realize that paying a little more at their front door is actually a deal.

Another important factor has made working out the logistics of delivering food for a traditional sit-down restaurant much, much easier: the internet.  Already two websites, and GrubHub, will take and process orders as well as pick up and deliver the food, making it easy for operators to add service without having to hire or train staff.

As I have discussed in a past post, online ordering is a seemingly inevitable trend in the food service industry.  As consumer expectations trend towards food service that doesn’t necessarily involve your dining room, restaurants are going to be forced to develop new ways to deliver their menu.  The good news is that these new trends shouldn’t require lots of new investment from restaurants.  Whether you decide to use a third party or simply hire and train your staff to handle outside orders and delivery, this is a trend that will help you diversify sales revenue without having to spend a lot of money.

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Do Price Reductions Dilute Your Restaurant’s Brand?

Restaurant PricingIn a very well written post on titled “Self-Fulfilling Prophecies,” the author examined in-depth the price reduction strategies the owners of the two restaurants where he works have employed over the last year.  The main point revolved around how cut-rate specials were bringing in more traffic (although not more than before the recession) but that the reductions were hurting profits, check averages, and the restaurant’s brand overall.

Considerable worry has been circulating the food service industry about the issue of price reductions and customer expectations.  There is no doubt that most of the industry has embraced aggressive pricing as a way to keep traffic and sales up, and for the most part this strategy has accomplished those two goals.

But at what price?  Servers like the one on Waiternotes are understandably upset because check averages have surely plummeted and are unlikely to go up again any time in the near future.  Perhaps a more creative compensation strategy is in line.  The argument that this dilutes a restaurant’s brand and/or reputation is a compelling one, but not without its problems.

For starters, study after study have shown that the new economic reality means consumers are putting a premium on value.  The point is debatable, but in general this seems to be a function of consumers pinching their pennies even as the economy begins to improve.  Some have even suggested that the freewheeling heavy spending days of the recent past are permanently gone as consumer psyche shifts.

That means restaurants, along with most other businesses, are going to have to adjust their products and marketing to reflect new customer expectations.  Prix fixe dinners, half-portion specials, and all the other strategies restaurants are adopting to get customers in the door are a symptom of the times, rather than an ill-advised effect.

The jury is still very much out on whether restaurants can survive their own race to the proverbial bottom of the price (and consequently profit margin) barrel.  But I suspect that those who figure out how to walk that tightrope between value and profit will become the new power players in the food service industry.Subway's $5 Footlong Promotion

A good example is Subway’s $5 foot long promotion.  The price is through the floor.  The competition scrambled to catch up and then quickly undercut the $5 price.  The dark prophecies of brand devaluation and vanished profitability spread quickly through the crowd of panicked onlookers.  6 months after Subway launched the promotion, they’re rolling in profits.  It doesn’t matter that Quizno’s undercut their $5 price.  Customers still see a value there and Subway is doing much more business at a lower margin, which still translates into more net profit.

Which brings me to an interesting article from the Harvard Business e-newsletter titled “Why High Profit Margins Don’t Prove Smart Pricing.”  There is a trade-off between volume and margin.  Those two lines intersect at some point for any business.  For the past two decades, the prevailing model was to pursue higher margins in smaller and smaller niches.  Consumers, lulled into a false sense of security by easy credit, happily paid more for products that seemed suited just for them.

Now the trend has been reversed, and value is the watchword of the day.  That means price reductions are probably here to stay, and because consumer expectations have changed, will more than likely improve brand perception rather than dilute it.

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Restaurant Management Tips: More Is Not Always Better

Should You Serve A Crowd?Large parties present a difficult choice for restaurant managers.  How many times have parties of 12, 16, or even 20 shown up at your restaurant ready to experience the great food and service you have to offer?

Your initial reaction is probably: “Great!  We love more customers!”

Of course you always want to have a packed house.  And that party of 12 is a great way to fill the front house quickly.  But, as most of you already know, that party of 12 can also turn into a headache very quickly.

Think about how the night progresses:

A good portion of your “turn & burn” four and two tops are gone for the night.  Not only does your wait and buss staff have to scramble to put together a section for the large party, but the inevitable disruption this creates disturbs other diners and distracts the staff.  And you know this party will probably be there for a good portion of the night, meaning a table you might turn three or four times in a night is no longer available.

Your best server(s) are also gone for the night. Handling a large table is not for the new guy or the faint of heart.  You’ll probably assign your top wait staff to handle the large party, and this will keep them occupied, and not serving other important guests, for the rest of the night.  Plus, large parties are notoriously bad tippers, and the automatic gratuity is usually less than what the server earned and more than the guest wants to pay.

Your kitchen gets slammed. You’ll do your best to get all those entrees out at the same time, and inevitably that’s going to cause problems in the back of the house as your kitchen staff scrambles to get out the big order and fill all the other orders at the same time.

Other guests feel ignored. Big parties make lots of noise, and draw a lot of attention from your staff.  This leads to other guests feeling like they’re being ignored, and they may be annoyed by how loud the large party is being.  Seating 12 does you no good businesswise if you lose other loyal guests in the process.

Many restaurant managers are probably reading this and thinking to themselves:

  1. I’d still never turn down a large party; most of those people have probably never been here before and this is my chance to show them what we’ve got
  2. My staff is trained to work as a team and we’ll show them what good service is all about
  3. If I don’t seat them, they’ll go somewhere else.  What if those tables sit empty for the rest of the night?
  4. We can handle it, and a packed house is always best

The key to serving large parties is to set parameters and not bite off more than you can chew.

Large parties demand an extra level of service because they are so large, and taking on a large party can actually hurt your business if overall product quality and service suffer.  Anyone who has been in the food service business has seen a large party negatively affect overall product and service quality.

Some strategies for handling a large group:

Separate them as much as possible, but not too much. If you have an area of your restaurant that is off to one side or separated by dividers, place large parties there whenever possible.  This strategy is a double-edged sword, however, because large parties usually don’t want to feel like they are being stuck in a forgotten corner either.

The customer is always right, except when they’re wrong. It is vitally important when handling large parties to draw the line when accommodating their requests will interfere with the quality of your service.  Separate checks on a group of 20 is going to lead to problems.  Seating them in the bar area so they can watch the game means you can’t keep track of who sat where since they keep moving around.

Maybe you’re able to handle these particular examples.  Either way, something will come up eventually that will affect your ability to serve a large group.  Know when to say no.

Don’t get too greedy. If you have the dubious luck of having more than one large party walk in to your restaurant on a given night, be careful.  Don’t automatically assume you can handle the business.  Remember, creating a situation where overall service and product quality is affected is going to cost you more customers over the long run than you’ll gain with this one large party.

Rock Bottom Brewery handles a lot of large parties, and their strategy is to have the host communicate directly with the kitchen, and if the kitchen’s “plate count” (unfilled orders) gets too high, they alert the host and he or she doesn’t seat anybody until the plate count goes down.  Make sure you have some system in place to evaluate your capacity to meet incoming demand and adjust accordingly.

Get all hands on deck. Make sure your staff is supporting the server or servers who are working the large party.  As the manager, you’ll probably end up getting personally involved with the large table and doing what you can to expedite service to a large group.

Whether you consider large parties the bane of your existence or the butter on your bread, coming up with an effective strategy to handle them is an essential part of doing business.  What are your strategies for handling a large party?  We’d love to hear from you.  Leave a comment below!

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Obama Fried Chicken Stand To Change Name

Politically incorrect?  Or just an immigrant's attempt to honor the President?

Politically incorrect? Or just an immigrant’s attempt to honor the President?

A fried chicken stand in Brooklyn, NY changed its name recently from Royal Fried Chicken to Obama Fried Chicken in honor of the United States’ 44th President.  The stand’s owner, who remained anonymous but was represented by employee Mohammed Jabbar, thought the renaming would celebrate President Obama’s election and create goodwill in the neighborhood.

Unfortunately, many community organizers and activists aren’t on the same page with Jabbar, who is an immigrant.  Within days after the fried chicken stand’s new signs went up, Jabbar started receiving complaints that the new name was offensive and racist, and reinforced stereotypes about African-Americans.

Brownsville, the Brooklyn neighborhood where Obama Fried Chicken resides, is made up of primarily minority populations.  Reactions on the street were mixed.  Some didn’t see the big deal with the new name.  Others thought it was extremely offensive.

Obama Fried Chicken’s competition, located right across the street, has taken advantage of the controversy by attracting customers who are offended by the name.  Obama Fried Chicken has promised to rename themselves soon, and Jabbar can’t wait for it all to blow over.

In the end, it appears to have been an honest attempt to honor President Obama, although a White House spokesman did say that the Oval Office has long looked down upon attempts to use the President’s name for commercial purposes.

It’s also a strange phenomenon to see new immigrants who are unaware of America’s troubled past offending older minority groups like African-Americans without realizing it.  And it appears that political correctness has won out again.

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How To Cut Bar Inventory Losses 20%

precision poursWe’ve all been there.  The bartender is super busy and splashes some alcohol in your glass before topping it off with whatever mixer goes with your drink – and you end up with a strong one or a weak one.  And of course flirty girls and good tippers regularly expect – and get – a good pour on their refills.

The problem is, inconsistent drink pouring can account for as much as 20% in lost revenue for a busy bar or restaurant.  Drink taste can also vary widely with different amounts of liquor, which means mixed drinks have to be one of the most inconsistent products you sell in your establishment.

No one would tolerate such variation on a prime, high margin entrée, and increasingly bar managers are using technology to gain control of their liquor inventory.  Precision Pour spouts measure exactly how much alcohol is poured in each drink using a 3-ball measuring system that is both accurate and smooth.  The result is the  elimination of over and under pouring.

In addition to putting an absolute clampdown on waste and theft, Precision Pour spouts allow bartenders a chance to upsell stronger drinks for customers.  Since bartenders don’t have the option to pour drinks stronger or weaker, customers wanting a stiffer drink can purchase a double instead of just plunking a couple extra bucks in the tip jar and getting a nod from the bartender.

Competition has always been tight in the bar and nightclub scene, and profit margins can be thin, so many owners perk up when they hear about ways to cut costs and generate more upsells.  But taking care of good customers is something anyone who wants to succeed in the restaurant industry had better excel at.  The tradeoff with more control is reduced intimacy with customers because everyone gets the same pour, no matter if you’ve been coming to that bar for years or tonight is your first time.Precision Pour Spout

The flip side of that argument is that stronger drinks also mean drinks that don’t taste as good.  The hottest trends in the industry are all pointing towards craft cocktails that give the consumer a taste that’s at least as good as the buzz.  That makes precise alcohol pours even more important if you want to address the customer’s new expectations when it comes to taste.

That makes Precision Pour spouts a good investment from and inventory control and a quality control point of view.  The Precision Pour can fit in almost any liquor bottle, is easy to clean, and can handle even the thickest liqueur.  You can get Precision Pour spouts that dispense various amounts of alcohol, measured in ounces and milliliters, and even color code the spouts to make it easier for bartenders to find bottles during the rush.

Simply put, you’re losing money and negatively affecting quality if you don’t accurately measure the amount of alcohol in each drink you serve.  The Precision Pour spout is a great way to knock out both those birds with one stone.

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Man Who Wanted To Be A Hooter’s Girl Settles Class Action Suit

Please, God, say it isn't so

Please, God, say it isn’t so

Local man Nikolai Grushevski brought a class action lawsuit against a Hooter’s franchise in Corpus Christi, Texas after the restaurant passed on hiring him as a waiter, who are also known as the Hooter’s Girls.  Grushevski’s lawyer claimed he was proud to have stood up for his rights under the Equal Opportunity Employment Act.

Hooter’s settled the case out of court recently for an undisclosed amount.  The restaurant chain was expected to mount a strong defense known as the “Bona Fide Occupational Qualifications,” which has also been used by Playboy and Sports Illustrated to defend their female-only hiring policies for models.

The rumor mill has said that Grushevski got $1,000 and his attorney’s fees in the settlement, but this was unconfirmed.  Hooter’s settled a similar suit in 1997 for $3.7 million, and both that settlement and this one stipulated that Hooter’s would be able to continue its female-only hiring policy.

There was no word on whether Corpus Christi Hooter’s patrons would have wanted to see Grushevski in a tight white Hooter’s Girls T-shirt and those short shorts when they came in for a burger and a beer.  Perhaps it’s better for us all that Hooter’s was willing to settle this one out of court.  It sure does seem like a shady way to make a grand, however.

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The Public Smoking Ban Debate Continues

Restaurants And Public Smoking BansLos Angeles has taken the ongoing regulation of smoking in public places a step further and banned smoking in the outdoor patio areas of restaurants.  The city council voted unanimously in favor of the ban, despite repeated pleas by local restaurants that the ban would hurt business in an already down economy.  The ban will take effect one year from the time the mayor signs the ordinance.  The city plans to take that time to educate the public on the new ban and the dangers of second hand smoke in general.

It’s an argument the restaurant industry has been using for the last ten years as it attempts to maintain the status quo on smoking.  Unfortunately, a growing body of evidence shows there is no negative effect on business in restaurants when a smoking ban goes into effect, and some areas have even seen a slight rise in revenues after a ban as non-smoking patrons (who make up 75% of the population) stay longer and spend more.  The effects of second-hand smoke are also well documented, and some studies have shown a 40% drop in heart attacks in public places after the implementation of a smoking ban.

The reality is, smoking bans are here to stay, whether they regulate patios, dining areas, or any other area of a restaurant.  The argument that business will suffer also seems to ring more and more hollow as restaurants in areas with comprehensive smoking bans continue to survive, and even thrive, after the passage of the ban.

National public smoking regulation is probably coming in the next five years.  Even dyed-in-the-wool tobacco states like North Carolina and Virginia have passed public smoking bans in recent years.  It’s time for the restaurant industry to accept the reality of the situation and adapt their businesses to change rather than fighting fruitlessly to maintain the status quo.

For a more in-depth discussion of smoking bans and how they affect restaurants, plus an interesting debate in the comments section, read this public smoking ban post.

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Why Employee Benefits Are A Food Safety Issue

One of the biggest sources of contamination in any restaurant are the people who prepare and serve your customer’s food.  According to official food safety regulations, sick workers are supposed to go home, or even better, not come in at all while they are capable of spreading germs.

Unfortunately, two realities make sending a sick employee home a pipe dream in most restaurants: it’s a difficult regulation to enforce and going home means no pay for most food service workers.

Lack of enforcement means employers have little incentive to send home sick employees, and while the potential contamination of food served is a more compelling reason for employers, it’s often far too difficult to trace the origins of common sicknesses.  That means restaurants with sick employees on the job are rarely, if ever, blamed for spreading common colds or the flu.

An even bigger problem is the dilemma employees face when they’re sick: they can either stay home and not get paid or come into work and make money.  For a majority of food service workers, skipping a day’s pay isn’t an option.  That means they come into work sick.Restaurant Opportunities Center

A recent study conducted by the Restaurant Opportunities Center (ROC) is making its rounds through the media this month that highlights the numbers of food service workers who report coming into work while sick.  According to their research, over 60% of employees in the food service industry have reported working while sick.

The ROC advocates paid sick days and health insurance benefits for restaurant workers, and their study found a number of employers who support those ideas.  In theory a simple solution like paid sick leave sounds like a great idea that anyone could support.  There’s even substantial evidence that indicates basic employee benefits like health coverage and paid sick days actually save businesses money because turnover is reduced and employees work harder for an employer that supports them with benefits.

But the reality is that asking restaurant owners to face a permanent increase in payroll costs is going to be tough to swallow.  This is especially true after a year and a half of recession.  Owners are in survival mode and probably will remain that way for some time to come.  That means they’re not going to be very receptive to ideas that involve spending more money, especially for a program like paid sick days with an abstract benefit like reduced turnover.

Tune in tomorrow for a post exploring the ways independent restaurant owners can improve the benefits they offer employees.

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