CHAPTER 14RESTAURANT OPERATIONS,

BUDGETING, and CONTROLLING COSTS•Front-of-the-House Operations•Back-of-the-House Operations•Control

–Food–Beverage

•Controllable Expenses–Labor–Guest Check Control

•Productivity Analysis & Cost Control

FRONT-OF-THE-HOUSE• Front of the house refers

to the hosts, bartenders, servers & bussers.

• The visual appeal of the building & parking area are important to potential guests. – Guests receive a first

impression known as curbside appeal—or, would you even stop or get out of the car?

FRONT-OF-THE-HOUSE• The first thing restaurant

managers do is to forecast how many guests are expected and share that information with the kitchen.

• A guest count is arrived at by taking the same day last year and factoring in things like today’s weather, day of the week, and so on.

FRONT-OF-THE-HOUSE

• The elements of management are planning, organizing, communicating, decision- making, motivation & control.

• Schedules and checklists help organize the restaurant.

• A “lead sheet” lists staff on both shifts so you can easily see who is on duty.

BACK-OF-THE-HOUSE OPERTIONS:

• The back of the house is sometimes called the “heart” of the operation.

• The kitchen is the center of production.

• Production sheets are created for each station, detailing all the tasks necessary to bring the food quantities up to par stock of prepared items & to complete the preparation on time.

BACK-OF-THE-HOUSE OPERTIONS:

• The chef makes sure that all menu items are prepared in accordance with the standardized recipes and that the line is ready for service.

• During service, either the chef or a manager may act as a caller—in an attempt to control the ordering and expediting of plates at the pass.

CONTROL• There is so much food and

beverage in a restaurant that, unless management and owners exert tight control, losses will occur.

• Restaurants can use programs like Chef Tec, which shows the actual food cost compared with the ideal food cost. This is known as food optimization.

• The food cost percentage should be calculated at least monthly:– The formula for doing the

food cost percentage is Cost/Sales × 100

LIQUOR CONTROL• Control of liquor is critical to

the success of the restaurant.

• Management decides on the selling price and mark-up for beer, wine, and liquor. – This will set the standard for

the beverage cost percentage. – Normal pouring cost for beer is

24 to 25%. – Wine should have a pouring

cost of 26 to 30%. – Liquor pouring costs should be

16 to 20% of sales. – Combined, the beverage

pouring cost should be 23 to 25% of beverage sales.

CONTROLLABLE EXPENSES

• Term used to describe the various expenses that can be changed in the short term: – Variable costs – Payroll– Operating expenses– Marketing– Heat– Light– Repairs– Maintenance

LABOR COSTS

• Depending on the type of restaurant & the degree of service provided, labor costs may range from approximately 16% of sales in a quick-service restaurant to 24% in a casual operation & up to about 30% in an upscale restaurant.

LABOR COSTS• Projecting payroll costs

requires the preparation of staffing schedules & establishing wage rates.

• Staffing patterns may vary during different periods of the year, with changes occurring seasonally or when there are other sales variations.

• Payroll and related costs fall into two categories: • Variable (percentage ratio

to payroll). • Fixed (dollar amount per

employee on the payroll).

LABOR COSTS• Variable items include

those mandated by law: Social Security, unemployment insurance, Workers’ Compensation insurance & state disability insurance.

• The fixed items usually mean employee benefits & include health insurance, union welfare insurance, life insurance & other employee benefits.

GUEST CHECK CONTROL• Without check control, a server

can give food & beverages away or sell it & keep the income.

• Guest checks can be altered & substitutions made if the checks are not numbered. – To avoid such temptations, most

restaurants require that the server sign for checks as received & return those not used at the end of the shift.

GUEST CHECK CONTROL• For tight control, every

guest check is audited, additions checked, and every check accounted for by number.

• Some operators control restaurant income by having servers act as their own cashiers. – They bring their own banks of

$50 in change; they do not operate from a cash register but out of their own pockets; they deposit their income in a night box at the bank.

PRODUCTIVITY ANALYSIS & COST CONTROL

• Without knowing what each expense item should be as a ratio of gross sales, the manager is at a distinct disadvantage.

• The simplest employee productivity measure is sales generated per employee per year: – Divide the number of full-time

equivalent employees into the gross sales for the year.

The End

Copyright © 2008 John Wiley & Sons, Inc.