A Restaurant Turnaround:

From Crash to Cash

August 14, 2012


Presented by
Don J. Avalier, FCSI, FMP, Principal
Manask Hospitality Group
Don Avalier, FCSI, FMP
40+ years experience as a Restaurant Operator, Hotel Divisional
Food & Beverage Director, Court recognized Foodservice Expert and
Industry Restaurant Consultant
Opened more than 70 restaurants, 9 hotels and 6 country clubs
throughout career
Seminar Presenter, Industry Judge and Author
Memberships / Accreditations:
California Restaurant Association
Foodservice Consultants Society International (FCSI)
Accredited Food Management Professional (FMP) through the Educational
Foundation of the National Restaurant Association
ServeSafe certified
The RestaurantA Case Study
Independent steak and seafood restaurant, 30+ years old, with
annual sales volume of 1.4 million
Recessionary economy had contributed to decreased cover counts
and increased cost of food, beverage, labor and operating expenses
Restaurant owner was subsidizing the restaurant 12-15K monthly for
more than 3 years
Many long-term management and hourly employees with 15+ years at
restaurant
BottomLine: Client could no longer continue to subsidize losses and
was contemplating closing the restaurant

Our Process
1. Request of restaurant background information
2. On-site meeting with owner
3. Tour of restaurant facilities
4. Key department heads introduction: Chef, Sous Chef, Day
Manager, Night Manager, Banquet Manager, Head Bartender
5. Food sampling
6. Wrap-up meeting with owner regarding priorities and next steps
7. On-site evaluation

Step 1: Restaurant Background Information
Collect information before on-site evaluation
Prepare proposal detailing objectives/goals/priorities of engagement as discussed
with client during initial meeting
Prepare a D&I (document and information) request of financial, operational and
marketing materials from restaurant
Three-year review of operating statistics and financial key indicators including:
Covers and revenue by day and by day-part
Prime costs
Food, beverage, labor and operating costs
Sales per labor hour
Sales per square foot
Set up the on-site evaluation timing



Shutter or Save? That is the Question!
Client meeting to update engagement and prioritize on-site activities for maximum
exposure to operations for all day-parts (weekday and weekend)
Conduct interviews with management department heads and hourly staff
Observation of kitchen operations including: purchasing, receiving, storage,
preparation, production controls, scullery operations and inventory management
practices and controls
Observation of front-of-the-house guest services including: guest reception, seating,
table set-up, order taking, table-side service and sales technique, check
presentation and closing salutation
Oral and written recap of the on-site evaluation with client and determine next steps
to be taken


Step 2: On-site Evaluation
Findings: Food Costs
No standardized recipes in place
No cost cards
No photoplating of items to ensure consistent presentation of items
No purchasing or receiving controls; i.e. specifications, order sheets
with amounts and pricing, no weighing of incoming products, no
inspection of goods, no competitive bidding, no par stock or build-to
inventory standards and no established potential or ideal food cost
No preparation/production controls to anticipated levels of business
No plating/portion controls
Chef was doing both the purchasing and the receiving!
No updating of inventory sheets in previous six months


Findings: Beverage Costs
Free pouring of beverages
Over-pours for regular customers
No par stock or perpetual inventory system in place
No updating of beverage inventory sheets
No full for empty policy for re-stocking daily beverage usage
(Breakage Report)
No established cost potential established for bar
Employees drinking at bar at close of their shifts
No tracking of Void, or No Sale rings on POS system
Drinks being prepared on-call before orders entered into POS
system


Findings: Labor Costs
No established criteria for labor scheduling
No scheduling synergies between beverage and dining room service
No established job descriptions, or Table of Organization, for
employees leaving duties and responsibilities open for interpretation
by employees
Overstaffing in front and back-of-the-house for volume of business
No service training meetings in past two+ years
Management not on the floor during peak periods of business at lunch
and dinner
Service staff hanging around in the kitchen/bar rather than
at their assigned dining stations


Findings: Operating Costs
No oversight of Chefs purchasing of food and supplies
No security to monitor the many exits from the restaurant
No linen controls (no credits for clean, but unserviceable linen, use of
napkins for clean up, accepting vendor counts at delivery without
random checking)
Flatware costs excessive (no monitoring of garbage cans for flatware)
No quarterly, or semi-annual, inventory of china, glassware and
flatware
All equipment and utilities being turned on at 7:00 am although the
restaurant did not open until 11:30 am



Stopping the Crash
Realizing a problem exists
Getting help as soon as possible
Setting up priorities to correct the problem(s)
Instituting change communications (internal and external)
Staff involvement and empowerment
Measuring the results
Sharing the success


Actions Taken: Food Cost
Preparation of new standardized recipes and cost cards*
Improve menu flavor profiles and plating presentations
Photoplating of all luncheon and dinner items to ensure consistent production and
presentation of all food items
Re-train staff to prepare menu items in accordance with new recipes and portion
controls
Inventory updated to reflect current pricing
Purchased digital scale to weigh items purchased by weight and instituted new
policies and procedures checklist for purchasing and receiving of goods
Competitive bidding practices
Comparison of quoted pricing to invoice pricing
Reduction in inventory on hand
Inspection and weighing of all incoming proteins (meat, poultry, fish)
Establishment of a daily prep sheet
Cost/benefit analysis of complimentary appetizer bar and happy hour
promotions
* Sample hand-outs available


Recipe Card
YOUR RESTAURANT NAME
RECIPE CARD
DATE: MEAL PERIOD:
RECIPE NAME:
YIELD: PORTIONSIZE:
COOKING
METHOD: TEMPERATURE:
INGREDIENTS AMOUNT MEASURE METHOD

















PLATING/PACKAGINGINSTRUCTIONS/GARNISH:




Recipe Cost Worksheet




YOUR RESTAURANT NAME
RECIPE COST WORKSHEET
DATE:
MEAL PERIOD:
RECIPE NAME:
LASTUPDATE:
YIELD:
PORTIONSIZE:
COSTPERPORTION:
PROFITPERPORTION:
CURRENTSELLINGPRICE:
FOODCOSTPERCENTAGE ATCURRENTSELLINGPRICE:

RECIPE COSTPER EXTENDED
PURCHASE UNITOF UNITOF INGREDIENT
INGREDIENTDESCRIPTION PRICE PERUNIT MEASURE MEASURE COST
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
TOTAL RECIPE
COST: $0.00
SUGGESTEDSELLINGPRICE TOACHIEVE A28%C.O.S. N/A
SUGGESTEDSELLINGPRICE TOACHIEVE A30%C.O.S. N/A
SUGGESTEDSELLINGPRICE TOACHIEVE A32%C.O.S. N/A
Actions Taken: Beverage Cost
Measured speed pourers on all bottles and staff re-training
Bottle identification program
Establishment of a par stock system for front bar
Updated pricing on beverage inventory sheets
Instituted a full for empty policy for re-stocking daily breakage
33% reduction in wines by the glass inventory
Instituted new policies related to management and hourly employees
use of bar at close of their shift
Random exchange of cash drawers during shifts, tracking of voids
and no sale rings, use of spotters, cash drawers closed at all times
Drinks being prepared before orders are input into POS system


Actions Taken: Labor Cost
Developed 13-week (quarterly) covers history, by week, by day and
by day-part as basis for staffing*
Established benchmarking standards for dining room and lounge
staffing
Cross training of service staff with hostess staff
Quarterly training meeting for all front-of-the-house staff
Established job descriptions, for ALL front, and back-of-the-house,
employees and provided each with a Table of Organization
Pre-forecasting of labor and projected costs prior to scheduling to
allow for adjustments based on projected revenues*
New policies related to entry/exit to restaurant, use of sign-in sheets,
parking and packages/purses/food being brought in, or taken
from, restaurant


Covers Tracking Forecast - Dinner




YOUR RESTAURANT NAME
Quarterly Dinner Covers - TrackingAnalysis
WeekEnding 7/31/11 8/7/11 8/14/11 8/21/11 8/28/11 9/4/11 9/11/11 9/18/11 9/25/11 10/2/11 10/9/11 10/16/11 10/23/11 Total Maximum Minimum Average

Dinner Forecast
Monday 0 0 0 #DIV/0!
Tuesday 0 0 0 #DIV/0!
Wednesday 0 0 0 #DIV/0!
Thursday 0 0 0 #DIV/0!
Friday 0 0 0 #DIV/0!
Saturday 0 0 0 #DIV/0!
Sunday 0 0 0 #DIV/0!
WeeklyTotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dinner Actual
Monday 0 0 0 #DIV/0!
Tuesday 0 0 0 #DIV/0!
Wednesday 0 0 0 #DIV/0!
Thursday 0 0 0 #DIV/0!
Friday 0 0 0 #DIV/0!
Saturday 0 0 0 #DIV/0!
Sunday 0 0 0 #DIV/0!
WeeklyTotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Variance+/-
Monday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Tuesday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Wednesday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Thursday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Friday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Saturday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Sunday 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
WeeklyTotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Pre-Forecast of Labor




YOUR RESTAURANT NAME
Blind Staffing Worksheet
Prepared by: Date:
Day of Week FRIDAY
Owner Manager Hostess Hostess Chef Kitchen Kitchen Kitchen Kitchen Dish Dish Server Server Server Server Busser Busser Busser Bar Server Server Server Tot. Hrs.
6-7 AM 0
7-8 0
8-9 0
9-10 0
10-11 0
11-12 0
12-1 PM 0
1-2 0
2-3 0
3-4 0
4-5 0
5-6 0
6-7 0
7-8 0
8-9 0
9-10 0
10-11 0
11-12 0
12-1 AM 0
TOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Category RATE # HRS TOTAL $
TOTAL HOURS SCHEDULED 0.0 HRS. $ %
Owner $ - 0 0.00 BOH LABOR 0.00 $0.00 #DIV/0!
Manager $ - 0 0.00 TOTAL DAY'S WAGES $0.00 FOH LABOR 0.00 $0.00 #DIV/0!
Hostess $ - 0 0.00
Chef $ - 0 0.00 EST PAYROLL TAX & BENEFITS $0.00
Kitchen $ - 0 0.00
Dish $ - 0 0.00 GROSS WAGES $0.00
Server $ - 0 0.00
Busser $ - 0 0.00 PROJECTED SALES for DAY $0.00
Bar $ - 0 0.00
Server $ - 0 0.00 LABOR PERCENTAGE 0.0%
$ - 0 0.00
0 $0.00

Actions Taken: Operating Costs
Implementation of weekly operations meeting with Chef, Head
Bartender, Banquet Manager and General Manager
New security system to cover front desk, and all entry points in and
out of the restaurant
Competitive bidding of new linen contract
Use of magnets on garbage cans in dishwashing area and random
dumping of garbage to review contents
Implementation of 13, 4-week, accounting system to improve
comparative analysis of food, beverage and labor costs*
Restructuring of the financial reporting system to conform with
Uniform System of Accounts for Restaurants



13 Period 2012 Calendar




2008 - 13 Period Year (28 days each)

Period 1 Period 7
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
30-Dec 31-Dec 1-J an 2-J an 3-J an 4-J an 5-J an 16-J un 17-J un 18-J un 19-J un 20-J un 21-J un 22-J un
6-J an 7-J an 8-J an 9-J an 10-J an 11-J an 12-J an 23-J un 24-J un 25-J un 26-J un 27-J un 28-J un 29-J un
13-J an 14-J an 15-J an 16-J an 17-J an 18-J an 19-J an 30-J un 1-J ul 2-J ul 3-J ul 4-J ul 5-J ul 6-J ul
20-J an 21-J an 22-J an 23-J an 24-J an 25-J an 26-J an 7-J ul 8-J ul 9-J ul 10-J ul 11-J ul 12-J ul 13-J ul

Period 2 Period 8
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
27-J an 28-J an 29-J an 30-J an 31-J an 1-Feb 2-Feb 14-J ul 15-J ul 16-J ul 17-J ul 18-J ul 19-J ul 20-J ul
3-Feb 4-Feb 5-Feb 6-Feb 7-Feb 8-Feb 9-Feb 21-J ul 22-J ul 23-J ul 24-J ul 25-J ul 26-J ul 27-J ul
10-Feb 11-Feb 12-Feb 13-Feb 14-Feb 15-Feb 16-Feb 28-J ul 29-J ul 30-J ul 31-J ul 1-Aug 2-Aug 3-Aug
17-Feb 18-Feb 19-Feb 20-Feb 21-Feb 22-Feb 23-Feb 4-Aug 5-Aug 6-Aug 7-Aug 8-Aug 9-Aug 10-Aug

Period 3 Period 9
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
24-Feb 25-Feb 26-Feb 27-Feb 28-Feb 1-Mar 2-Mar 11-Aug 12-Aug 13-Aug 14-Aug 15-Aug 16-Aug 17-Aug
3-Mar 4-Mar 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 18-Aug 19-Aug 20-Aug 21-Aug 22-Aug 23-Aug 24-Aug
10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar 16-Mar 25-Aug 26-Aug 27-Aug 28-Aug 29-Aug 30-Aug 31-Aug
17-Mar 18-Mar 19-Mar 20-Mar 21-Mar 22-Mar 23-Mar 1-Sep 2-Sep 3-Sep 4-Sep 5-Sep 6-Sep 7-Sep

Period 4 Period 10
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
24-Mar 25-Mar 26-Mar 27-Mar 28-Mar 29-Mar 30-Mar 8-Sep 9-Sep 10-Sep 11-Sep 12-Sep 13-Sep 14-Sep
31-Mar 1-Apr 2-Apr 3-Apr 4-Apr 5-Apr 6-Apr 15-Sep 16-Sep 17-Sep 18-Sep 19-Sep 20-Sep 21-Sep
7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 22-Sep 23-Sep 24-Sep 25-Sep 26-Sep 27-Sep 28-Sep
14-Apr 15-Apr 16-Apr 17-Apr 18-Apr 19-Apr 20-Apr 29-Sep 30-Sep 1-Oct 2-Oct 3-Oct 4-Oct 5-Oct

Period 5 Period 11
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
21-Apr 22-Apr 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr 6-Oct 7-Oct 8-Oct 9-Oct 10-Oct 11-Oct 12-Oct
28-Apr 29-Apr 30-Apr 1-May 2-May 3-May 4-May 13-Oct 14-Oct 15-Oct 16-Oct 17-Oct 18-Oct 19-Oct
5-May 6-May 7-May 8-May 9-May 10-May 11-May 20-Oct 21-Oct 22-Oct 23-Oct 24-Oct 25-Oct 26-Oct
12-May 13-May 14-May 15-May 16-May 17-May 18-May 27-Oct 28-Oct 29-Oct 30-Oct 31-Oct 1-Nov 2-Nov

Period 6 Period 12
MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI SAT SUN
19-May 20-May 21-May 22-May 23-May 24-May 25-May 3-Nov 4-Nov 5-Nov 6-Nov 7-Nov 8-Nov 9-Nov
26-May 27-May 28-May 29-May 30-May 31-May 1-J un 10-Nov 11-Nov 12-Nov 13-Nov 14-Nov 15-Nov 16-Nov
2-J un 3-J un 4-J un 5-J un 6-J un 7-J un 8-J un 17-Nov 18-Nov 19-Nov 20-Nov 21-Nov 22-Nov 23-Nov
9-J un 10-J un 11-J un 12-J un 13-J un 14-J un 15-J un 24-Nov 25-Nov 26-Nov 27-Nov 28-Nov 29-Nov 30-Nov

Period 13
MON TUE WED THU FRI SAT SUN
1-Dec 2-Dec 3-Dec 4-Dec 5-Dec 6-Dec 7-Dec
8-Dec 9-Dec 10-Dec 11-Dec 12-Dec 13-Dec 14-Dec
15-Dec 16-Dec 17-Dec 18-Dec 19-Dec 20-Dec 21-Dec
22-Dec 23-Dec 24-Dec 25-Dec 26-Dec 27-Dec 28-Dec
29-Dec 30-Dec 31-Dec 1-J an 2-J an 3-J an 4-J an

(extra week every5 to 6years to keepmake upfor difference incalendar year (365
or 366days) and13periodyear (364days)
Benchmarking the Results
Comparison of key operating costs to industry best
practices for similar operations as shown in the Annual
Restaurant Industry Operations Report
Food cost
Beverage cost
Labor cost
Prime cost
Sales per square foot
Sales per labor hour

Cash Not Crash, or the 180 Turnaround

6 mos. Prior 6 mos. After +/-
Revenues $113,462 $125,807 +$12,345
Food Cost 42.0% 34.7% - 7.3%
Beverage Cost 27.3% 25.0% - 2.3%
Labor Cost 46.0% 37.0% - 9.0%
Total Cost Improvement (%) - 18.6%

Cash Not Crash, or the 180 Turnaround

Monthly revenues ($) +$12,345
Food cost reduction ($) -$63,897
Beverage cost reduction ($) -$2,567
Labor cost reduction ($) -$127,953
Total Turnaround Savings ($) -$204,417

Any Questions?...
Thank you!
Presented by
Don J. Avalier, FCSI, FMP, Principal

Manask Hospitality Group
(818) 557-0635 or (800) 686-8813
don@manask.com