The Restaurant Blogger

How is Your Restaurant Managed?

So what makes a good business a great business? It’s having a sound concept managed well. Few restaurants have both pieces of the puzzle but the ones who do are highly successful.

I have worked in three types of managed restaurants throughout my career:

1. High Quality Management
2. Satisfactory Management
3. Poor management

Scenario#1: High Quality Management

The first type of restaurant I ever worked at was a very well managed fine dining restaurant. This 65-seat fine dining restaurant achieved one of the highest sales volumes per seat in the industry including a 6% staff turnover rate compared to the average industry of over 250%. How did the owner do it? He was committed in placing a smile on every customer and staff member everyday. The people loved him including the food, service and the atmosphere and that’s why people continued to return. He interacted with his customers at every table ensuring their expectation was met, he treated his suppliers with sincerity and most of all he respected and cared for his staff.

Today, he no longer is a restaurant owner and has pursued his second longtime dream of coaching CEO’s and other executives in achieving their goals to becoming great employers. Up to this day I look back at the opportunity given to me. I was only 18 at the time while the rest of the staff was 28-45. Age didn’t matter. From being a customer at the restaurant, I became a waiter. I was crossed trained in every position of his restaurant which provided valuable experience up to now. I was fortunate to work and learn from one of the very best who I consider to be one of my close friends and mentors.

Scenario #2: Satisfactory Management

The second scenario type of restaurant was a highly successful concept but with problems in upper level management. Within the company’s chain of command too many positions with no hands on experience created havoc for restaurant managers. What may have seem to be a quick fix solution of terminating the weak, deemed more difficult as the chain was controlled by an inexperienced investment firm. The pressure to achieve higher profits was a constant agony for managers. Similar to any other restaurant owner, they wanted higher revenues and lower costs, but at what cost? Labor and food costs were significantly reduced to the point where both quality of food and service were reduced. Supplier relationships were destroyed and ended. New suppliers were signed based on price versus quality. Weekly food costs were achieved, but then targets were reset for the following week. If we achieved a 29% food cost, our goal was 28.5% the following week and so on. How could any restaurant continue to operate within those parameters? In the eyes of our corporate controllers and investors, this was an easy call. We did as we were told, to cut back on inventory and if it meant closing parts of the restaurant early, that was okay. The only aspect of the business the owners could understand was when profits were up or down.

Today, the chain somehow continues to do well, but how long will this type of management practice continue is questionable. For any restaurant, we want the very best of both worlds; high revenues and low costs. These goals are attainable, but it requires great restaurant management skills and owners who will provide the necessary support. Sadly, this corporate restaurant didn’t understand that for any business you need to spend money to make money.

Scenario #3: Great concept, Poor Management

The third type of scenario I have worked at was actually a great concept but with such poor upper management that it failed. This 120-seat Japanese restaurant was a unique concept offering a twist to traditional Japanese. The menu was large enough allowing anyone who was hesitant in trying sushi a chance to explore. We had rave reviews and a number request to franchise within in the United States and overseas. Again, the owners, a group of inexperienced investors was money driven and did not have any of the “know how” skills of the restaurant business. There were over 20 investors involved with each one having a different view. They all agreed on only one thing – excellent food! It was surprising how we could remain open for over one year. During the week, it was so quiet, except the usual Fridays and Saturdays. If only we made half of what we did on a Saturday throughout the week, then maybe the restaurant would still be open today.

The investors relied heavily on the managers to run the business, but when change or improvements had to be done, they were denied. What the owners could not grasp was the concept of a new startup. They expected profits within the first few months and with that mind set, anger was building among the investors. Pay checks began to bounce, rent was behind, lawsuits arose and finally bankruptcy. The owners were blind sighted to knowing that their actions and decisions caused the restaurant chain to fail. Entire meal comps were given left, right and centre to each investor, their friends and families who came to dine. Worst off, not a single penny was left for the servers who had to serve them. How this restaurant was managed on a corporate level is everything that a restaurant should not do or repeat. The concept was great but it was poorly executed. Sometimes I wonder where the company would be today if the owners were real restaurant owners.

Learn from Experience

Regardless of success or failure, take each working opportunity as a learning experience. Use what is presented to you as what you can do and what you will avoid for your own future restaurant. The greatest mistake you can do is having regrets. Remember, the best gain in knowledge is to learn from the best and the worst.

Stay tuned for my next posting about Common Restaurant Start up Mistakes.

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Do you ever wonder what happens to a waiter’s tip? What you may think is what most customers believe and what you about to learn will probably shock you. Depending on the type of restaurant, type of management and the number of staff, a waiter’s tip can vary.

Where Did My Tip Go?

A recent article published by the Chicago Tribune reveals the truth behind tips. There is one of two common types of tipping systems used in most restaurants; a Pool House or an Independent Contractor.

What’s the difference? Tips are placed in a pool and allocated to each staff member at end of the shift while the latter method involves a waiter breaking off a portion of his/her tips to share it among the support staff (i.e. busboys, food runners). Most of us have believed the notion, the waiter keeps everything. Well, if you are one of them, hopefully what you will read next will change your view the next time you enter a restaurant.

Take for example Chris Tallian, a 30 year old veteran waiter in Chicago who has been waiting for most of his adult life. Money has generally been good, but what he wants customers to know is what happens to tips.

At his present job at Nick’s Fishmarket, tips are divided among different staff members or so called support group, the people involved in creating the whole experience. Without their help there would be no table to serve. Therefore at the end of the night, Chris’ tip is broken down into the following:

• 1% to the hostess
• 5% to the bartender
• 13.4% to the busboys
• 26.8% to the captain
• 26.9% to the back waiter
• 26.9% to the front waiter (Chris)

So a $20 tip leaves Chris with only $5.36. All that work for not much at all.

What Happens to Credit Card Tips?

If you thought the tip you left on the credit card goes to the waiter, your wrong again. Instead, a restaurant may charge the waiter credit card processing fees. So even though it’s at no fault of the waiter to accept credit card payment, he/she is left paying for a restaurant’s credit processing charges. Sound fair to you?

Apparently this is legal in most states. Landry’s Restaurants, a Texas-based chain who owns the Rainforest Café subtracts waiter’s tips that are given on credit cards. Restaurants who practice this method usually charge 2 to 4 percent just to offset the credit card processing fees.

How to Get Most Out of Your Tip?

Waiter from the popular blog site, Waiter Rant states:

“If the customer knows tips are being pooled, they can slip the waiter a $20 and say this is just for you, nobody else.”

Waiter also suggest for customers to ask how the tipping system works. You may not get a detailed answer, but it is worth a try.

Three other tips to keep in mind include:

1. If possible, try to leave a cash tip just in case waiters are charged for credit card processing fees.
2. Observe the size of the restaurant and its support staff. If your service was met your expectations, then you may want to tip slightly more. The greater the support staff, the less gratuity for your waiter.
3. Leave a verbal tip by informing the management of your satisfaction of the service. Management will take notice and this should create job security for the waiter.

How Does your Restaurant Work?

Throughout my career as a waiter I have received two types of tipping systems:

Casual Dining – Japanese Restaurant

• 3.5% to the kitchen staff
• 96.5% to the waiter

In this instance, the tip distribution to the kitchen staff was insignificant. However the restaurant paid them well above average.

Fine Dining – Continental Cuisine

Lunch

• 1% of a waiter’s gross sale

Dinner

• 3.5% of waiter’s gross sale when one person is on the floor
• 3.0% of waiter’s gross sale when two waiters are on the floor
• 2.0% of waiter’s gross sale when three waiters are on the floor
• 1.0% of waiter’s gross sale when four waiters are on the floor

How much do you have to tip out? As a customer, how much do you normally tip a waiter?

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Have you ever gone to a restaurant and notice something scurrying across the floor? Maybe it was a cockroach or a mouse. Similar to any other customer’s reaction, you may have lost your appetite. Any type of rodent or insect is a sign of trouble.Insect problems can occur in even the cleanest and most sanitary working conditions. Keeping your establishment at a high level of cleanliness is ultimately the best way to help prevent such a problem. For the most part, restaurant owners need to know what they can do now and what they can do when insects become a problem.

An occurrence of pests can lead to a negative impact to your restaurant.

• Bad word out mouth which more than likely will lead to a drop in new and repeat customers.
• Turning away immediate customers as appetites are lost.
• Damage to equipment and furnishings, electrical, phone and data cables from gnawing rodents that can chew through almost anything.
• Fecal contamination which can lead to sickness and health risks to your employees.
• Possible closure of the restaurant from the Health Department.

What is the Root Problem?

You may have tried using an insecticide at one point and it may have worked. Sure you may be thinking if it worked last time why should I change? Insecticide products and brands such as Raid are good in the short term. What may seem like a quick inexpensive way of getting rid of insects may in fact be very costly. A small problem may lead to a larger one causing more damage to the restaurant in terms of lost customers, equipment damage and health risk factors to your staff. In the long term, doing it yourself may not be the wisest choice or best solution for a restaurant. Insecticide products such as those purchased in a department store only mask a problem but shortly after the problem will reoccur.

A prime example how a self bought insecticide could backfire is applying it on the pharaoh ant, a common pest in many establishments. When a pharaoh ant is stressed, it quickly builds new colonies as a form of defense. What may have started out to be one colony may lead to an invasion of your entire restaurant. In order to prevent or eliminate the problem, you need to know the root cause of it.

Insect and Rodent Hot-spots

Understanding the root cause of a pest problem is to know where insects and rodents live and feed on. The first step is to inspect your entire restaurant and search for potential entry points or problems that can be repaired. Hot-spots for insect infestation include doors and windows near trash receptacles, food storage areas, frequently damp areas or anywhere that food is temporarily stored.

Steps for Prevention

Any type of insect or bug is an inconvenience that can cause damage to your restaurant. Training your staff is critical so that every person is aware of the root cause of insect/rodent infestation and the steps to prevent it. Here is a list of simple procedures you should follow to prevent the most common types of pests:

Fruit Flies

• Kill fruit flies as they emerge.
• Fruits and vegetables should remain in a cooler.
• Discard old shipping boxes as soon as possible.
• Implement a daily cleaning schedule which includes cleaning all equipment, furnishing and floors.
• Ensure you have tight-fitting lids on all garbage cans.
• Any mops or washcloths used should be placed in an area to dry. Mops should be upside down and while washcloths should be hanged.

Ants

• Discard any food debris and clean up spills immediately.
• Never store firewood, unused equipment and other unnecessary things next to your building. Ants like to place nesting sites in these areas.
• If your restaurant is stand alone, ensure all shrubs and trees are not within contact of your restaurant.
• Eliminate any food trails.

Rodents / Occasional Pests

• Repair and seal cracks in walls or any openings in which feed pipes, cables and wires through.
• Ensure you have tight-fitting lids on all garbage cans and disposals. Try and keep it far enough from your restaurant.
• If your restaurant is a stand alone, keep the exterior clean and free from trash.
• Install weather stripping on all doors leading to the outside.
• Ensure tight screening on weep holes and vents.

Action Plan

Don’t be fooled if you don’t see any pests around your restaurant. There will always be bugs around and more than likely they are behind the scenes where you can’t see them. Leave it to the professionals to inspect your establishment. You must be proactive in order to control any occurrence of pests. Hiring a Pest Control Management (PMP) company is only a couple hundred dollars a month depending on the size of your restaurant. This may sound a lot, but it will be nothing compared to the lost when damage has been done. PMPs are there to help you design and implement a program. So put away those store bought insecticides and eliminate the Do-it-Yourself approach. A professional is there for you.

My personal Advice

When choosing a Pest Control Management company, know what kind of programs can be offered to you. A responsible PMP will ensure the safety of your employees, their employees and your customers. Ensure appropriate times are set for any chemical spraying required. The fumes of the chemicals can be overpowering and cause sickness and even drive customers away. If possible, set a time a couple hours prior to opening or after the restaurant has closed. This will enable your PMP to spend more time in problem areas and focus on eliminating them.

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