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Archive | Restaurant Management and Operations

Find great resources and tips on restaurant management and operations topics like human resources, food safety, going green, and more.

LEAN Act Gaining Popularity In Congress

The Labeling Education and Nutrition, or LEAN Act, is gaining sponsors and votes in the United States congress.  The legislation would create a national standard for labeling menu items across the entire food service industry.  Consumers overwhelmingly support menu labeling, with some polls showing a 75% majority in favor of nutrition information on menus.

The National Restaurant Association (NRA) and its offshoot, the Coalition For Responsible Nutrition Information (CRNI), support the LEAN Act and are lobbying congress for its passage.  As more and more municipalities and states have passed menu labeling laws, restaurateurs, and especially national chains, have recognized the need for a national standard that will eliminate the growing patchwork of local laws.

The biggest issue many restaurants have with menu labeling is the complicated and sometimes expensive process of analyzing the nutritional values of menu items.  Each ingredient must be separately assessed for its nutritional value, and even slight variations in portions can alter the numbers.

Traditionally, ingredients were analyzed in a laboratory, which usually translated into a lot of time and money to get each ingredient’s nutrition information.  Recently, some companies, like MenuCalc, have compiled databases of ingredient nutrition information from USDA labs, eliminating the need for expensive laboratory testing.

No matter what, menu labeling is coming, and restaurants are going to have to deal with that reality.  A vote on the LEAN Act is expected during this session of congress, and we could see a national standard for menu labeling by as early as next year.

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Missouri Legislature Debates Wage Cuts For Servers

In 2006, voters in the state of Missouri overwhelmingly passed Proposition B, an initiative that mandated a minimum wage increase for hourly workers.  Prop B passed with a 75% majority, and after some debate, Missouri decided that workers who receive an hourly wage plus tips were eligible for the pay increase.

Times have changed since 2006, to say the least.  The economic downturn has hit Missouri’s restaurant industry hard, and now the state’s restaurant association is backing a Republican bill to cap hourly wages for tip earners at $3.52, half the hourly minimum wage of $7.05.  A compromise amendment would cap the minimum wage after a planned increase this summer.

Neither servers nor restaurant owners are happy with the bill.  Servers say the cap is tantamount to a wage cut, something they can ill afford in a down economy.  And restaurant owners say their payroll expenses have skyrocketed since 2006, something they can ill afford in a down economy.

Interestingly, the catch in this whole debate is who would actually be affected by the passage of the bill. 

The average server earns $10 – $15 an hour in tips, which means most if not all of their hourly wage goes to taxes, regardless of whether their wage is capped or is raised slightly.  And this bill would not change a Prop B clause that requires restaurant owners to pay their servers the $7.05 minimum wage if they don’t make at least that in a given week.

So servers who claim they’re taking a pay cut aren’t really getting hit that hard since the vast majority of what they make is in tips.  And they’re guaranteed a minimum wage if tips aren’t sufficient.

At the same time, restaurant owners who claim they can’t afford the current wage are not going to get the wage cut they were looking for.  At best, wages will be capped at their current levels, which does nothing to help restaurateurs who blame the current wages and the recession for their problems.

That means Missouri restaurant owners are going to have to look elsewhere to cut costs and increase revenues.  And in the end, looking to cut costs in staff first is probably not the best option on the table.  After all, wait and kitchen staff are what make every restaurant tick, and in the long run, well paid staff means better sales and reduced turnover, both of which translate into more profits.

Perhaps it’s time for restaurateurs in Missouri to look at other operational costs and see how they can streamline their business before they start putting a lot of energy, money, and time towards targeting their payroll.

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Gordon Ramsay: The Restaurant Black Widow

Celebrity chef Gordon Ramsay’sshow Ramsay’s Kitchen Nightmares USA has been a huge hit, garnering thousands of American viewers and elevating the chef’s celebrity even further.

Unfortunately, the restaurants he’s supposed to be helping are dropping like flies in the wake of his black widow touch.  The show’s premise is to bring Ramsay’s expertise and creativity into a struggling restaurant and turn the place around.

But it was revealed recently that over half the restaurants that have appeared on the show have since gone out of business.

Some owners and managers complain that Ramsay’s management style, which includes making everything fresh every day and using high-end product and ingredients, created a standard too expensive to maintain in a down economy coupled with rising food costs.

Other victims of the show are less diplomatic, calling Ramsay a jerk who thinks he can impose his lofty standards on any restaurant.  Some are even suspicious it doesn’t really matter to him whether a restaurant on the show makes it or not, as long as ratings remain high, which they have through multiple seasons in the U.S. and the U.K.

Perhaps the most important lesson to take away from the Ramsay “kiss of death” is that every restaurant is different, and managers and owners have to account for the many divergent factors that make up the success of any establishment.

Of course, the ideal situation is to be able to attain Ramsay-style high standards and still make a profit, but any restaurateur will tell you that the situation on the ground is hardly ever ideal.  Instead, being highly adaptive, creative, and flexible are the traits that will eventually spell success in the food service industry.

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The Golden Gate Restaurant Association Denied By Supreme Court

The Golden Gate Restaurant Association Denied By Supreme CourtThe Golden Gate Restaurant Association (GGRA) petitioned the Supreme Court recently to prevent the city of San Francisco from enacting legislation that would require employers to pay a fee to provide health coverage for their workers.

On Monday, the Supreme Court refused a temporary stay on the San Francisco legislation.  All businesses in the city with 20 or more employees would have to meet the new requirements.

The law in San Francisco was originally passed in 2006, but has since been held up by a successful court challenge by the GGRA.  A federal appeals court decided the law could be enacted temporarily last year, and now the GGRA is appealing to the U.S. Supreme Court for an emergency injunction to prevent the law from going into effect this year.

Similar legislation in New Jersey and Maryland were struck down by other Federal appeals courts, setting up a conflict in the lower courts that usually means the Supreme Court will weigh in.

However, it is also noted that the Court does not like to get involved in current national policy issues, and the Obama administration’s lofty health care goals for this year could prevent the Supreme Court from weighing in on the San Francisco petition.

The $1.17 to $1.76 per hour per employee healthcare fee has been decried by business owners in the Bay Area as putting an undue burden on business.  Business owners also claim the law violates a federal act that prevents local government from enacting separate pension and benefit plans from national ones.

San Francisco lawmakers counter that healthcare for the city is a necessary, progressive service that benefits everyone.  They also say the hourly fee can be applied in multiple ways, including towards a company’s health premiums, the city’s Healthy San Francisco program, or employee health accounts.

The question of how universal health coverage will affect business in the United States is only now heating up as progressive policies are being considered at all levels of government in the U.S.

Will universal health care wreck business and entrepreneurship?  Or will it create a progressive, egalitarian society for the 21st century?  Somewhere in between?  Weigh in with your opinion below!

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The Economics Of Free

The Economics Of Free

Should everything be free in the new economy???

Google has profoundly affected the way business is done the world over.  Besides becoming a frequently used verb (meaning “to search”) in multiple languages, the internet search and advertising giant became an international success on a business model that has never been attempted before.

Google offers its primary service, internet search, for free.  Ten years ago, when Google started, offering anything for free was unheard of, unless you were hocking towels on an infomercial.  Google’s success has shown that such a business model is not only viable, it’s the wave of the future.

While restaurateurs probably won’t start giving away their entire menu for free anytime soon, new economic realities have forced some innovative approaches to luring customers back to the food service industry, and free has played a huge role.

Denny’s kicked off the new approach to restaurant marketing with a Super Bowl ad announcing that Grand Slams would be free for one full day after the big game.  The success of that promotion has encouraged other chains to get in on the act, including Quizno’s, who recently wrapped up a million sub giveaway through a specially created site called millionsubs.com.

A café owner in Ohio even removed prices from his menu and allows customers to pay what they want for the coffee and breakfast items he serves.  Sales and customer visits have shot up as a result.  The practice of pay-what-you-want was invented in Europe, and has become even more popular since the economy started going south.

Of course, it may not work so well if a guest can rack up a few hundred dollars worth of entrees and bottles of wine.

And there are hundreds of more examples of restaurants finding the benefits of giving something away for free.  In a larger sense, however, the advent of giving away products and services for free has become rooted in consumer culture, and once consumers get something for free, they’ll want other things for free in the future.

But the economics of free also make sense, even if they seem a little counter-intuitive at first.

First of all, your customer appreciates the gift, and if they get one thing for free, they are more likely to buy other things from you, either in the future or at the same time they redeem their free item.

Secondly, nothing should ever be free.  If your customer doesn’t pay money for the thing they get for free from you, then they should either be counted on to buy something else either directly or indirectly from the free thing or you should get something from them, like an email address or a survey.

In an information age, collecting data about your customers has become vitally important to the success of any company.  Giving something away for free is one of the cheapest ways to get the information you’re looking for.

Finally, giving something away for free is a great way to create buzz around your brand.  The free publicity chains like Denny’s and Quizno’s have gotten out of their free food promos has more than made up for the cost of the giveaways.

The economics of free are the economics of the future, and the business you can generate from giving away something for free can far outweigh the cost.  And making more money than you spend isn’t anything new: it just makes good old-fashioned business sense.

The Economics Of Free

Giving things away for free can mean more sales and customer loyalty.

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Do Public Smoking Bans Affect Restaurants?

Do Public Smoking Bans Affect Restaurants?

Smoking bans are coming to your restaurant. Are you prepared?

Despite the objections of many groups in the food service industry, public smoking bans have been passed with increasing frequency over the past five years.

Restaurants and bars are primarily concerned with losing business as a result of these smoking bans.  Advocacy groups claim that the health benefits of banning smoking far outweigh any other concern.

As a restaurateur, you are probably either already under a public smoking ban or will be soon, and it’s important to understand the pros and cons of these bans on your business.

For starters, research has shown that bar and restaurant revenue did not show an appreciable drop after the introduction of a smoking ban.

Smokers just don’t go home after a smoking ban is passed.  Instead, they cut down on their smoking and go outside when they need a smoke.  Some food service businesses actually saw a rise in business after the ban was passed as new customers ventured out because of the new smoke-free environment.

However, specific segments of the industry do not follow this general trend. In particular, blue collar establishments take the hardest hit when a new smoking ban is passed.  Bowling alleys and small local bars have seen as much as a 50% decline in business after the passage of a smoking ban.

While it is unfortunate that some businesses take a huge hit when a smoking ban is passed, the health benefits that are a direct result of banning public smoking are significant, and should really outweigh other concerns.

Heart attacks in public places drop as much as 40% after the enforcement of a public smoking ban.  The air quality of restaurants and bars goes from “dangerous” or “extremely unhealthy” classifications to “normal” and “good” overnight.  The body of evidence linking even small amounts of second hand smoke to short and long term health problems is now overwhelming.

For the food service industry, smoking bans are a reality that must be dealt with.

If you have the bad luck of operating in a segment that will suffer from the passage of a smoking ban in your area, start to develop a strategy for the day the ban arrives, because it will be here sooner or later.  If you have already found yourself under a smoking ban, tell us how it has affected your business.

What are the benefits?  The drawbacks?  Do you oppose or support introducing smoking bans in other states?

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A Restaurant Survival Guide (continued)

The Back Burner’s Restaurant Survival Guide continues with some more tips on how to keep customers coming in the door in these tough economic times.

Take your product to the customer. You have already developed delicious entrees, trained your kitchen staff to cook them, and purchased all the equipment you need to produce on a large scale.

Yet your restaurant is seeing falling or stagnant visits every month.

You’re all dressed up with nowhere to go.  So go out.

Many large chains like Applebees, Chili’s, and O’Charley’s have developed very successful fast takeout operations to supplement sales of their core menu items.

Now some of these businesses are getting into full catering services as a way to boost sales in a gloomy economic environment.

Recent surveys of restaurant patrons have indicated they plan to stay home in record numbers in 2009, but that doesn’t mean they always want to fire up the home kitchen.

And small to medium sized get-togethers (of 10 – 50 people) still happen all the time, just not at your restaurant.  Customers see a great value in serving familiar foods from their favorite eatery right in their home, and you already have the staff and tools to service them there.

A little marketing, a slight adjustment in your menu offerings, and you’re on your way to finding your customers even if they aren’t coming to your restaurant as often as they used to.

Gift cards help. More and more chains are marketing gift cards, and smaller operations can do the same.  Not only are gift cards a quick and convenient gift for your customer, but they guarantee future sales that can help you through slow times.

They can also help bring in new clientele if they are offered as a promotion.  And best of all, customers who use gift cards tend to overspend the gift card amount, which means some added sales for you.

Meanwhile, the customer leaves full and happy, having spent less than he or she expected.

You can survive. The salient point here is that customers still want your product.  They haven’t forgotten how good it tasted two years ago.

They just don’t want to pay the same amount for it.

You have rising expenses to deal with, but that doesn’t mean a little repackaging and some clever marketing can’t help your customer realize exactly why they fell in love with your restaurant in the first place.

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A Restaurant Survival Guide

A Restaurant Survival GuideThe current economic downturn has affected every aspect of the American economy, including the food service industry.

The NRA has projected a 1% drop in all restaurant sales for 2009 (when adjusted for inflation), potentially making 2008 and 2009 the only two consecutive years where restaurant sales have fallen since the NRA started keeping track in 1971.

That’s sobering news for any restaurateur, and many restaurant managers can tell you after a quick glance over last quarter’s books that this NRA prediction isn’t coming as a huge surprise.

But there is silver all over the huge cloud bank of gloom that is our economy, and a smart business owner should be able to hang on until the ride is over.

For starters, the food service industry isn’t hurting as badly as other sectors of the economy (at least you’re not a UAW member, right?), and typically restaurants are the first to turn around after a slump.

The key lies in holding down costs while attracting new customers and retaining existing ones.  Sounds easy enough, right?  Right.

Here’s a few food service trends that can help you survive:

Comfort foods are rising in demand. Chicken, beans, and even spam all saw significant increases in sales in the last quarter of 2008.

These products can help your business manage costs while you portray them to the customer as a “value” menu item (well, maybe not spam), especially if you highlight them against perceived “luxury” items like beef.

Put together a value menu of comfort foods to bring customers in, then hope they decide on dessert.

Divide best sellers into smaller portions. Popular menu items are always going to be popular, no matter what the economy is like.  It’s just that when your customer takes his wife out this month, he doesn’t want to spend like he did in the freewheeling days of 2007.

Many restaurants are responding by taking popular menu items and offering an appetizer version of the same thing, or a two person value platter that can be shared.

Taking your core product offerings and making them affordable to your customer is a great way to retain your faithful base while enticing new customers who are searching for value.

Stay tuned for some more Restaurant Survival Tips from The Back Burner in the coming days.

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Menu Labeling Law Being Considered in Congress

The movement to accurately label menu items with nutrition information is gaining ground at a remarkable pace.  In 2008, the state of California, the cities of New York and Philadelphia, and two counties in Washington and Oregon passed legislation requiring restaurants to provide nutrition information to their customers.

20 more cities, counties, and states currently have similar laws on their dockets.

Studies have shown that 75% of consumers favor mandatory menu labeling in food service establishments.  Consumers are already familiar with nutrition labeling since it became standard on food products, and most want the same information when they dine out.

Critics cite the cost of analyzing menu items for their nutritional content as being prohibitively expensive for most small and mid-size food service businesses.

They also say menu variety will disappear because once a recipe is analyzed for its content, it cannot be changed even slightly since this will alter nutrition information.

However, the NRAsupports menu labeling legislation, but has chosen to lobby for a national bill that will preempt the growing patchwork of local and state laws regulating menu labeling and set a single national standard for menu labeling.

Menu Labeling Law Being Considered in Congress

The LEAN Act is currently being considered in Congress

The Labeling Education and Nutrition (LEAN) Act was introduced in 2008 and sets a national standard for restaurant menu labeling.  It is supported by the NRA and the Coalition for Responsible Nutrition Information (CRNI), an NRA-led advocacy group.  LEAN is currently in front of Congress and awaits a vote.

As restaurants in places like California begin the process of evaluating their menu nutrition information, a new industry has sprung up around nutrition.

One of those companies is MenuCalc, a San Francisco based organization that has compiled a huge database of laboratory analyses of common food ingredients.  Restaurateurs can use this information, which is accessible through the web, to create their own menu nutrition data.

No matter what, menu labeling is probably a trend in the food service industry that is beyond the point of no return.

It’s likely that in 10 years nutrition information will be as common on menus as Nutrition Facts labels are on food products today, and that leaves restaurateurs two choices:

Analyze and post nutrition information for their menu items today, or put it off for tomorrow.

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Hot Restaurant Trend: Menu Nutrition Labeling

Nutrition labeling is nothing new in the food industry.  Nutrition Facts have become ubiquitous on everything from milk cartons to candy bars.

But up until recently nutrition information on menus was largely absent.

That’s changing, and places like California and New York city have already passed legislation requiring nutrition information be displayed on menus.

Complying with new regulations is a compelling reason to begin recipe analyses, but it shouldn’t be the only reason why you start labeling your menu items with nutritional information.

Providing nutrition information creates customer loyalty and gives healthy menu claims credibility.

In an increasingly health conscious society, consumers want access to nutrition information.  The advent of nutrition labeling on grocery products has made them familiar with nutrition information and restaurants that have tried labeling have received an overwhelmingly positive response.

And menu labeling is a great way for you to market healthy menu choices because customers have all the information they need right in front of them.

Conducting recipe analysis will help you improve ingredient choices and streamline food preparation.  The process of analyzing the ingredients and preparation process you use for each recipe on your menu means you can reassess how you prepare menu items.

Often better ingredients can be employed to improve a recipe’s nutritional value.  Simple changes in food preparation methods can also improve nutritional value.

Perhaps most valuable to restaurateurs is the standardization of the food preparation process.  Small changes in how food is prepared, like variations in sauce and ingredient amounts and cooking times, can drastically change the nutritional value of a menu item.  Recipe analysis means you must prepare menu items the same way every time to maintain accurate nutritional labeling, and this has the valuable side effect of improving kitchen efficiency and reducing waste.

Laboratory Analysis vs. Database Analysis

Restaurateurs have two choices when deciding how to analyze their menus: a laboratory analysis of nutritional content or the computer database analysis of recipe ingredients based upon previous laboratory analyses of those ingredients.

Laboratory analyses are conducted by an independent laboratory, where each ingredient in a recipe is studied and it’s nutritional value calculated through testing.

This method is:

  • Generally used for standardized products with large distributions
  • Used by many large chain restaurants
  • Necessary for fried food products, because the variations in cooking times and the fat absorption qualities of individual foods require case-by-case analysis
  • Typically do not provide nutritional breakdowns of individual ingredients in a recipe, making it more difficult to adjust preparation methods and ingredients to achieve more healthy combinations
  • Requires a standardized food preparation method to ensure the accuracy of the analysis.  Slight variations in food preparation or ingredient amounts
  • Is much more expensive and time consuming than a database analysis

Database analyses collect the results from lab tests already conducted on a wide range of common recipe ingredients, eliminating the need to pay a laboratory to conduct a new test.

Access to database analyses:

  • Are much more affordable and less time consuming than lab analyses
  • Yield breakdowns of different recipe elements like sauces and condiments, giving you a more accurate picture of the nutritional content of each menu item
  • Allow you to adjust recipe ingredients and preparation methods to improve nutritional content and market claims like low sodium, fat free, etc.

Hot Restaurant Trend: Menu Nutrition LabelingMenuCalc is an online tool that uses database analysis to calculate the nutritional value of your menu’s recipes instantly.

You can do the analyses yourself using their wizard style interface and also get help from their experienced staff to create accurate menu labeling for your business.

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