9 Numbers to Know for Greater Restaurant Success
Pay attention to these metrics to get a leg-up. Off the top of your head, I bet you can name three important financial numbers related to your restaurant without even thinking: food cost, labor cost and profit loss. That’s a good start. While there are many more numbers to know, I want you to shift toward running your restaurant by the numbers. And to do that, there are nine essential numbers you must understand.
No. 1: Your cost of goods sold by category in total. You have different targets for budgeting, and it’s important you’re measuring your food, bottle beer, draft beer, wine, liquor and merchandise separately. You also need this total for another number, which I’m going to talk about in a moment, called prime cost. Generally speaking, I aim for about a 25 percent cost of goods sold when I’m doing a budget. And I could lean up 5 percent or down a little bit.
No. 2: Your labor cost by position and total. Again, like cost of goods sold, you’re going to have different labor targets. When it comes to budget and measurement, to find where you might have some challenges, you need the total for your prime cost. Track by position, not front of house, back of house, not hourly or salary, but by position.
No. 3: Your prime cost. That’s your total cost of goods sold, plus your total labor cost, including taxes, benefits and insurance. This is the one number you must know to have any chance to make money. Make sure to search my YouTube channel for multiple videos on prime cost. You have to know how to calculate it and what your total should be, but I’m going to tell you right now the industry standard of 65 percent does not work anymore. With all the cost increases and all the challenges our industry has faced, the new number—if you do $850,000 a year or more in sales—is 55 percent or less. And that can be life-changing money for many of you.
Recent FTC Rule Implements Nationwide Ban
On most non-compete agreements. The Federal Trade Commission recently issued a rule largely banning the use of non-compete agreements nationwide. The stated purpose of the rule is to address the significant harm non-compete agreements have inflicted on fair competition in recent years. While several states, including California, already have similar bans in place, the FTC determined that a nationwide rule was necessary as the state-by-state approach did not adequately solve the problem. The FTC estimates that approximately 30 million workers are currently covered by non-competes. By wiping out these agreements, the FTC expects that the final rule will result in reduced health care costs, new business formation, a rise in innovation, and higher worker earnings. For purposes of the rule, a noncompete is defined as “a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.” (internal quotation omitted). Under the final rule, employers will no longer be permitted to require workers to enter into such an agreement. Moreover, the final rule not only bans use of non-compete agreements going forward, but it also invalidates almost all existing non-compete agreements. The one category of worker against whom existing non-competes may still be enforced are senior executives, who are defined as workers earning more than $151,164 a year and who are in a “policy-making position.” Estimated to make up less than 1% of workers, senior executives are exempted as they are “less likely to be subject to the kind of acute, ongoing harms currently being suffered by other workers subject to existing non-competes and because commenters raised credible concerns about the practical impacts of extinguishing existing non-competes for senior executives.”
Bielat Santore & Company – Restaurant Industry Alert
Bielat Santore Company Sells Highly Successful Burlington County Restaurant & Bar
Jimmy’s American Grill, located at 140 Route 130, Bordentown, New Jersey was just sold to the regional restaurant company B2 Bistro + Bar, according to Barry Bielat of Bielat Santore & Company, Allenhurst, New Jersey, the broker for the sale. This marks the seventh restaurant owned and operated by the extremely successful and capable B2 Bistro + Bar organization. Bielat Santore & Company has been the broker of record for the last five restaurant locations. Robert Gillis, a sales associate with Bielat Santore & Company, more familiar to some as “Diner Bob,” for his experience in the sale of diners in New Jersey, had established a sound business relationship with Jimmy Manetas the owner of several diners and Jimmy’s American Grill. With that relationship in place, Manetas gave Gillis the listing when it came time to sell.
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How Restaurants are Achieving Zero-Waste Status
Success in a zero-waste strategy hinges on the engagement of employees and customers. The restaurant industry—renowned for its dynamic nature and relentless pace—is making significant strides in sustainability, particularly in achieving zero-waste status. Aside from enhancing environmental stewardship, this commitment appeals to the increasingly eco-conscious consumer. Explore how leading full-service restaurants are innovating toward zero waste. The zero-waste movement is gaining momentum across various sectors, driven by the pressing need to address global waste issues. The hospitality industry—a significant contributor to food waste—is at the forefront of this transition.
Approximately one-third of all food produced globally is wasted. For restaurants, this number represents a substantial environmental burden and a financial loss. Here are seven ways restaurants are achieving zero-waste status. 1. Comprehensive Waste Audits. Successful zero-waste strategies often begin with a thorough waste audit. This process involves assessing the types and volumes of trash produced, which provides a clear picture of generation patterns. Identifying key waste areas can help restaurants develop targeted strategies to minimize and manage it effectively. These audits are crucial for uncovering inefficiencies and pinpointing opportunities for improvement. 2. Source Reduction. Source reduction is a cornerstone of the zero-waste philosophy. Improved inventory management has been proven to reduce food waste. Restaurants are increasingly adopting practices that minimize garbage generation from the outset. For instance, by refining inventory management systems, establishments can reduce over-ordering and spoilage. Additionally, menu engineering—designing menus that utilize ingredients more efficiently—is pivotal in reducing food waste. 3. Food Waste Management Methods. Food waste that cannot be prevented is increasingly being diverted to the following management processes.
How to Select Furnishings
For the design of a new restaurant or a major renovation. The design of a new restaurant or a major renovation of an existing space should include a thoughtful assessment of how furnishings enhance the overall aesthetic. There are scores of options when choosing shapes, fabrics, patterns, colors, and types of materials used to build furniture. Matching the numerous choices with the desired vibe of the space should involve more than taking a couple of hours to skim through manufacturers’ catalogs. “Furniture can make or break a property,” says Jason Maringola, director of interior design, ZDS Architecture & Interiors. The right furnishings bolster the vibe, creating a memorable experience that will please guests and make them eager to upload photos to social media. But, if you choose inappropriate tables and seating for a venue, you risk turning off guests to your establishment. In addition to aesthetics, choosing furnishings requires consideration of cost, durability, cleanability, order fulfillment timelines, delivery schedules and warranties. For best results when choosing furniture, take a systematic approach that begins during the conception of the design. Happy Joe’s, a 42-site pizza chain, hired a consulting firm for a refresh of its branding and restaurant design that included a deep dive into the company’s history and culture. The consultant’s work included development of a narrative encompassing the chain’s values and customer experience. This project included interviews with franchisees for a ground-level impression of operations and the brand’s links to their communities. After gathering that information, the consultant dove into design aspects including brand colors and decor. “It was a really detailed process,” says Tom Sacco, chief happiness officer, CEO, and president, Happy Joe’s. “It took about 18 months.” Burger chain MOOYAH recently developed a new prototype that also included a reassessment of branding and the company’s mission to devise an appropriate furnishing program. “We wanted to make sure that our environment matched the brand message,” says Landon Lane, senior director of construction and design, MOOYAH. “We’re proud of our food and its all-natural ingredients. All food is prepared to order.” The company chose chairs, tables, booths, to-go shelving, and a waiting bench constructed with unupholstered, unstained, and unpainted wood, resulting in a look that echoes the natural ingredients in its food. In contrast to the subdued aesthetic of MOOYAH’s furnishings, a new Washington D.C. Middle Eastern restaurant currently under development by architecture firm Dyer Brown will have a bold design concept accented by the furniture. Kirsten Smith-Sparrow, project manager for Dyer Brown, notes that the bold colors and patterns on the banquette upholstery reinforce the vibe. Another element, ottomans adorned with gold fringe, helps to create a unique look.
Owner of 3 N.J. Restaurants Sexually Assaulted 4 Women
Including job applicant cops say. The owner of three Trenton restaurants was charged with multiple sexual assaults after a woman who was interviewing for a job at Dubai Restaurant & Lounge reported being plied with alcohol to the point of becoming unconscious and taken to a Lawrence motel to be assaulted, the Mercer County Prosecutor’s Office said. A Mercer County restauranteur has been charged with sexually assaulting at least four women, including a job applicant he plied with drinks until she passed out and three former employees, authorities said Thursday. Gerald Araya, 44, of Ewing, was arrested Wednesday at the Mill Hill Restaurant & Lounge, one of the three restaurants he owns in Trenton, the Mercer County Prosecutor’s Office said Thursday. Araya also owns the El Catador Lounge Restaurant and Dubai Restaurant & Lounge. An attorney for Araya was not available on Thursday for comment. The investigation began after a woman told police that she went last month to Dubai Restaurant for a job interview with Araya and he convinced her go with him to another of his Trenton restaurants, “where Araya began making the victim drinks and insisting, she try them so she knew what she was serving patrons.” The woman told police she began to feel ill and informed Araya that she wanted to go home, authorities said. Her next memory was waking up naked in a Lawrence Township motel room and being sexually assaulted by Araya, authorities said. That room was the Mounts Motel on Brunswick Pike, according to an affidavit of probable cause. Investigators found security video of the pair there around the time the alleged assault happened, the affidavit states.
American Express Buys Tock Dining Reservation Service
The credit card company acquired Tock, after buying its rival, Resy, in 2019. The credit card giant American Express has acquired Tock, a restaurant reservation and event management company, from the digital commerce platform Squarespace for $400 million, American Express said on Friday. The purchase of the reservation system in an all-cash deal shows that American Express is continuing its pursuit of the market for dining-related services, especially after its acquisition in 2019 of Resy, a rival of Tock, which is based in Chicago. The credit card company is acting on insights that its customers are spending prodigiously on eating out, it said in a statement. Restaurants were a growing spending category for American Express cardholders, reaching a “high watermark” of $100 billion in transactions in 2023, Howard Grosfield, president of the U.S. consumer services division, said in an interview on Friday. “The passion and interest in dining and dining-related experiences just continues to grow,” Mr. Grosfield said. Tock and Resy broker some of the dining world’s most coveted reservations. Nick Kokonas, a former derivatives trader, and an owner of the Chicago fine-dining restaurant Alinea, started Tock in 2014. With Tock’s ability to offer prepaid reservations and deposits, tasting-menu restaurants like Alinea flocked to the service. Restaurants, bars, and other customers pay a flat monthly fee to use the Tock platform, which takes deposits, helps manage dining room traffic, and organizes and advertises pop-up events. Customers can download the Tock app to peruse restaurants and make bookings. Through the acquisition, American Express said it can give its card members the perk of access to hot dining experiences within the restaurant app’s network, as well as limited foodie experiences.
Hooters Closing Underperforming Restaurants
Due to current market conditions. Hooters announced several “underperforming” restaurants will close their doors permanently. A “select number” of restaurants will shut down due to “pressure from current market conditions,” the chain said in a statement to USA TODAY Monday. “Ensuring the well-being of our staff is our priority in these rare instances,” the statement reads. “This brand of 41 years remains highly resilient and relevant. We look forward to continuing to serve our guests at home, on the go and at our restaurants here in the U.S. and around the globe.” The company did not clarify which locations will shut down or share a timeline for the closures, but reporters around the nation with the USA TODAY Network found dozens of Hooters restaurants shuttered on Monday, including in Florida, Texas, Kentucky, and Indiana. The chain said they are continuing to open locations domestically and internationally while launching Hooters frozen products at grocery stores. Technomic Ignite shows that Hooters had 293 restaurants by the end of 2023, a 1.3% decrease from 2022, Nation’s Restaurant News reported. The company has experienced a 12% decline since the end of 2018, when there were 333 Hooters locations, per NRN. “Like many restaurants under pressure from current market conditions, Hooters has made the difficult decision to close a select number of underperforming stores. Ensuring the well-being of our staff is our priority in these rare instances. With new Hooters restaurants opening domestically and internationally, new Hooters frozen products launching at grocery stores, and the Hooters footprint expanding into new markets with both company and franchise locations, this brand of 41 years remains highly resilient and relevant. We look forward to continuing to serve our guests at home, on the go and at our restaurants here in the U.S. and around the globe.”
Did You Know?
What will we see on future menus? Diners should expect to be delighted by modernized comfort food and low-waste menus, according to Unilever Food Solutions’ Future Menus Top North America Trends 2024 report. It also acts as a recipe guide with solutions to industry-wide challenges, from cost-saving initiatives that ease labor shortages to recipes backed by forward-thinking trends. Modernized Comfort Food reflects the evolution of familiar dishes, making way for new recipes that reflect the heritage of the chef and the restaurant’s locale. The rising cost of ingredients and an ongoing commitment to sustainability is the driving force behind the Low-Waste Menu trend which encourages resourcefulness to reduce waste and maximize ingredient usage. In the face of sustainability concerns, 65 percent of foodservice operators consider this trend the most relevant and expect this trend to grow.
Employee Tip
How to take a customer from hell to heaven in 60 seconds or less. Everyone makes mistakes. When you screw up and say, “I am sorry. Our mistake.” it is good customer service but NOT Service Recovery. Most organizations never admit mistakes and less than 1% practice Service Recovery. Keeping customers is critical to your growth. Gaining a new customer is expensive. When you lose one it is super expensive. Not many customers know the lifetime value of a customer, so if a customer has a problem with a $25 purchase most employees say big deal. It’s only $25. The lifetime value of that customer could be $1,200, $3,500, or even $11,000. To employees, it is insignificant if the customer never comes back but the cost to your company is huge. In my book, Achieving Excellence Through Customer Service. I will show you how to measure the lifetime value of a customer and give an example that is for millions of dollars. I would not be surprised if the lifetime value of your customers is easily over $12,000.