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Restaurant Management: A Best Practices Approach

Author(s): Frederick DeMicco, Cihan Cobanoglu, Joseph Dunbar, Robert Grimes, Chen Chen, James R Keiser

Edition: 1

Copyright: 2015

Pages: 752

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Details: Electronic Delivery EBOOK | 180 days |

The Recipe for Success in Restaurant Management…

Restaurant Management: A Best Practices Approach introduces the reader to the vast menu of opportunities available in the restaurant industry - from creating business plans to guest service, quality management, labor costs and beyond.

Written by a diverse collection of restaurant industry and education experts, Restaurant Management: A Best Practices Approach:

  • Includes a section dedicated to career opportunities, job prospects, and the differences between self-ownership and franchised operations.
  • Describes the five types of managerial control and discusses the importance of cost control to a foodservice operation.
  • Explains what a menu should accomplish for a foodservice operation as well as the nine factors involved in menu pricing and the seven quantitative menu pricing methods.
  • Includes learning objectives, key terms, summaries, review questions, and more to facilitate and assess student learning.
  • Describes different types of foodservice operation budgets and offers advantages and disadvantages of each. 

Chapter 1 The Restaurant Industry
Objectives
Outline
Introduction
Restaurants
Examination of Commercial and Noncommercial Food Service
Food Service Within Commercial Operations
Noncommercial Food Service Operations
Summary
Restaurant Management Priorities
Organizational Structure of a Restaurant
Front of the House
Back of the House
Management Responsibilities
Multiunit Operations Business Models
Simple Form
Mixed Franchise Form
Management/Franchise Form
Brand Management Form
Bar and Beverage Operations
Management Responsibilities
Products
Wine
Fortified Wine
Beer
Coffee and Tea
Spirits
Brandy and Cognac
Aperitifs
Cordials and Liqueurs
Bottled Water
Career Opportunities
During School
After Graduation
Profitability
Cost Control
Pricing Trends
Summary
Resources
References
End Notes
Key Terms
Review Questions

Chapter 2 The Function of Control and Cost Control
Objectives
Types of Control
Importance of Cost Control
Cost Control as a Management Function
Cost-Volume-Profit Relationship
Contribution Margin
Variable Rate
Traditional Control Theory
Prime Costs
Behavioristic Approach to Control
Costs
Absentee Ownership or Management
Relationship with Quality Control
Cost-Benefit Relationships
Uncontrollable Costs
Managerial Concern
Percentage Systems
Financial Control
Summary
Key Terms
Review Questions
Problem

Chapter 3 Total Quality Management (TQM)
Objectives
Quality Control
The Real Costs of Poor Service and Quality
Customer Valuation
Service Quality: Why, What, How
The Process
Establishing a TQM Process
Data Collection Systems
Standards
Empowerment
Human Resources
Benchmarking
Outsourcing
Service Design Blueprinting
Service Blueprints: Basic Concepts
How to Read a Service System Blueprint
A TQM Application
Failures in TQM
Summary
Key Terms
Review Questions
Project

Chapter 4 The Feasibility Study, Business Plan, Financing, and Franchising
Objectives
Purposes of the Feasibility Study/Business Plan
Differences between a Business Plan and Feasibility Study
Analysis of a Feasibility Study
Part I: Market Survey
Part II: Site Analysis
A Sales Estimate in Tabular Form
A Pro Forma Income Statement
Primary Preliminary Capital Cost Estimates
Working Capital Requirements
Analysis and Return on Investment
Financing an Enterprise
Debt and Equity
Debt Financing
Applying for a Loan
Basis for Lending
Government Programs
Leasing
Franchising
Advantages and Disadvantages of Franchising
The Business Plan
Statement of Purpose
The Business
The Marketing Plan
Legal Organizational Form of the Enterprise
Financial Data
Pro Forma Statements
Labor
Vendors and Suppliers
Summary
Appendices
Summary
Key Terms
Review Questions
Projects

Chapter 5 Restaurant Technology Systems
Objectives
Point-of-Sale Systems
Elimination of Arithmetic Errors
Improved Guest Check Control
Increased Average Guest Check
Faster Reaction to Trends
Reduced Labor Costs and Greater Operational Efficiency
Reduced Credit Card Expenses
Reduced Late Charges
Terminal Design Varies
Are Server Terminals Always Needed?
POS Printers
Course Firing
Video Monitor or Kitchen Display Systems
Hardware Platforms
System Evaluation Begins with a Detailed Checklist
Table Management Systems and Home Delivery Software
Reservations Processing and Wait List Management
Table Assignments and Balancing
Restaurant-Wide Communication Network
Customer Relationship and Marketing Management
Detailed Service Analysis
Home Delivery Software
Frequent Dining and Gift Card Programs
Gift Cards
Inventory Control System
Create Vendor and Product Files
Design Inventory Worksheets
Take Inventory
Print Reports
Menu Management System
Create Ingredient Files
Create Recipe Files
Create Menu Item Files
Post Quantities and Generate Menu Analysis Reports
Key Terms
Review Questions
References

Chapter 6 Marketing
Objectives
Consumer Orientation
Customers
Market Segmentation
Elements of Marketing and the Marketing Mix
Marketing and the Mission Statement
Market Share
Selling and Appeals
Creating an Image
Motivation and Sales
Basic Marketing Moves
Competition
Advertising
Using the Internet
The Menu
Internal Selling Techniques
Importance/Performance Analysis Matrix
Summary
Key Terms
Review Questions
Problems

Chapter 7 Forecasting
Objectives
Why Forecast?
What to Forecast
Forecasting Theory
Total Covers to Be Served
Forecasting Menu Item Quantities
Item
Forecasting Methods
Quantitative Methods
Qualitative Forecasting
Evaluating the Accuracy of Forecasting Methods
Capacity Management of the Foodservice Delivery System
Flexible Capacity Strategy
Smoothing Demand Strategy
Restaurant Revenue Management (RRM)
Running Out of an Item
Summary
Key Terms
Review Questions
Problems

Chapter 8 Menu Pricing and Control
Objectives
The Menu
Menu Planning
Menu Rotation
Writing the Menu
Number of Items
Leftover Food Control
Contribution to Overhead and Profit
Menu Pricing Factors
Listing Prices on the Menu
Menu Pricing Methods
Quantitative or Rational Approaches to Menu Pricing
The Factor System
The Prime-Cost System
The Actual-Pricing Method
The Overhead-Contribution Method
The Gross-Profit Method
The Base-Price Method
The Texas Restaurant Association Method (Modified)
Computerized Menu Pricing
Labor-Cost Calculations
Energy-Cost Calculation
Measuring Menu Effectiveness
Menu Profitability and Popularity Comparisons
Menu Scoring
Menu Engineering
Computerized Forecasting
Average Profit per Item
Summary
Key Terms
Review Questions
Problems

Chapter 9 The Challenge of Labor Costs and Utilization
Objectives
Unique Foodservice Labor-Cost Problems
Payroll Determinants
Actual Labor Costs
Productivity
Kitchen Versus Factory
Cost-Solving Approaches
Employee Morale
Management and Productivity
A System for Employee Control and Productivity
Summary
Key Terms
Review Questions
Project

Chapter 10 Analyzing Labor Costs
Objectives
Labor Cost as a Percentage of Sales
Work Production Standards
Determining Work Production Standards
Using Work Production Standards in Scheduling
Examples of Typical Analyses of Payroll
Bar Charts
Preparing Bar Charts
Computerized Technology for Labor Records
Summary
Key Terms

Chapter 11 Staffing and Scheduling
Objectives
Defining Staffing and Scheduling
The Importance of Scheduling
Difficulties in Foodservice Scheduling
The Scheduling Process
Types of Schedules
Scheduling Patterns
Activity Patterns
Scheduling Guides
Computerized Scheduling
Summary
Key Terms
Review Questions
Problem

Chapter 12 Other Factors That Influence Labor Costs
Objectives
Job Evaluation
Job Analysis
Organizational Structure
Wage and Salary Administration
Absenteeism
Turnover
Measuring Turnover
Reducing Turnover
Training
Overtime Control
Safety and Accident Prevention
A Formal Safety Program
Recognition
Wellness Programs
Evaluating Corporate Wellness Investment
Levels of Wellness Programs
The Cost of Smoking
Employee Assistance Program (EAP)
Substance Abuse
Review Questions
Problems
Workers’ Compensation Insurance
Elder Care Programs
Control Reports
Flex (or Cafeteria) Benefit Plans
Medical Benefits
Who’s Covered by the Employer Mandate?
Deferred Compensation and Retirement Plans (Pensions)
Profit Sharing
Labor Management Audit
Summary
Key Terms
Review Questions
Problems
Project

Chapter 13 Food Purchasing
Objectives
Changes in Food Purchasing
Food Distribution Systems
One-Stop Purchasing
Who Should Purchase?
Purchase Quantities
The Best Cost
Purchasing Methods
Open Market Buying
Sealed Bid Buying
Cost-Plus Buying
Co-Op Buying
Warehouse Club Buying
Contract Purchasing
Purchase Size Determination
Economic Order Quantities (EOQ)
Standard Specifications
Bargains and Overbuying
Yield Factors (AP and EP Costs)
Forecasting Food Needs
Standing Orders
Salespeople’s Visits
Placing Orders
Written Purchase Orders
Can-Cutting Tests
Trade Credit and Payment Policies
Cost of Deliveries
Ethics in Purchasing
Procurement Planning
Value Analysis
Summary
Key Terms
Review Questions
Problems

Chapter 14 Receiving
Objectives
Functions of Receiving
Essentials for Effective Receiving
Competent Personnel
Facilities and Equipment
Specifications
Sanitation
Supervision
Scheduled Hours
The Receiving Clerk’s Daily Report
Daily List of Deliveries
Dating Perishables and Groceries
Meat Tagging
Pricing Merchandise
Invoice Stamps
Blind Receiving
Credit Memorandums
Collusion
Receiving Pitfalls
Receiving Procedures
Computerization
Summary
Key Terms
Review Questions
Problem

Chapter 15 Food Storage Management, Issuing, and Inventory Control
Objectives
Food Storage Management
The Storeroom (Dry Storage)
Adequate Space
Location
Security
Temperature, Humidity, and Lighting
Shelving and Arrangement of Contents
Protection from Vermin and Insect Infestation
Dry Storage Essentials
Refrigerated Storage
Amount of Refrigeration
Physical Construction
Temperatures and Humidities
Other Refrigerated Storage Considerations
Frozen Food Storage
Issuing
Direct Purchases
Storeroom Issues
Computerized Issuing
Inventory Control
Physical Inventory
Storeroom Reconciliation
Inventory Turnover
Perpetual Inventory
Uniform Product Code (UPC)
Summary
Key Terms
Review Questions
Problems

Chapter 16 Preparation and Portion Control
Objectives
Forecasting
Food Production Sheet
Work Assignment Sheet
Quality Control
Standard Recipes
Factory Production Techniques
Cook/Chill Systems
Computerized Equipment Control
Kitchenless Kitchens
McDonald’s
Taco Bell
Ingredient Rooms
Portion Control
Determining the Proper Portion Size
Serving the Proper Portion Size
Training
Time and Motion Studies
Summary
Key Terms
Review Questions
Problem

Chapter 17 Beverage Control
Objectives
Defrauding an Operation
General Beverage Control Practices
Par Stock Control
All Bottles Identified
Return of Empty Bottles
Use of Guest Checks
Red-Lining Guest Checks
All Drinks Rung Up When Served
Use of Code Numbers
Signed Requisitions
Standard Drink Recipes
Standard Glassware
Cash Register Control
Full Bottle Sales
Tip Jar
Beverage Purchasing
Bottle Sizes
Receiving
Beverage Storage
Inventorying
Accurate Beverage Management Using Technology
Issuing
Pricing
Beverage Cost-Control Systems
Percentage System
Inventory or Quantity Control
Standard Cost Systems
Standard Sales
Integrated Beverage Control Systems
Dispensing Drinks
Dram Shop Liability
Summary
Key Terms
Review Questions
Problems

Chapter 18 Some Aspects of Property Management
Objectives
Energy Management
Measurements of Heating Energy
Electrical Rates
Sensible and Latent Heat
Controlling Kitchen Fuel Costs
Cost Comparison
Energy Committees
Water Management
Preventive Maintenance
Elements of a Preventive Maintenance System
Maintenance Contracts
The Preventive Maintenance Cycle
Risk Management
Reasons for Insurance
Purchasing Insurance
Types of Insurance
Waste Management
Fast-Food Operations
Waste Removal
Summary
Key Terms
Review Questions
Problems

Chapter 19 Financial Statements and Their Analysis
Objectives
Financial Statements
Statement of Income and Retained Earnings
Balance Sheet
Statement of Cash Flows
Analyzing Financial Statements
Types of Financial Analysis
Comparative Analysis
Common Size Analysis
Ratio Analysis
Analyzing Sales
Sales Analysis Ratios
Average Check
Seat Turnover
Sales per Square Foot
Analyzing Expenses
Analyzing Cost Percentages
Profitability Ratios
Records and Forms
Other Indices
Summary
Key Terms
Review Questions
Problems

Chapter 20 Food-Cost Accounting Systems
Objectives
Food-Cost Accounting Functions
The Cost of Food
Cost of Food for Employee Meals
The Food-Cost Percentage
Types of Food-Cost Accounting Systems
Percentage Control Systems
Summary of Food Cost and Sales
Sales Mix
Standard-Cost Systems
Total Estimated Costs Compared with Total Actual Costs
Precost-Precontrol Accounting Systems
Steps in a Computerized Precost-Precontrol System
A Standard Food-Cost Accounting Application
Summary
Key Terms
Review Questions
Problems

Chapter 21 Internal Control
Objectives
Accounting Definition
Plan of Organization
Safeguarding of Assets
Providing Reliable Financial Records
Promoting Operational Efficiency
Adherence to Management Policies
Security
Employee Theft
Patron Theft
Cash Control
The Cashier
Robbery and Burglary
Key and Lock Control
White-Collar Crime
Theft Investigations
Point-of-Sale (POS) Systems
Input Devices
Output Devices
Prechecking Systems
Restaurant Guest Check Control
Guest Check Handling
Summary
Key Terms
Review Questions
Problems
Project
Case Problem
APPENDIX 21

Chapter 22 Budgetary Control
Objectives
What Is a Budget?
Advantages of Budgets
Disadvantages of Budgets
Factors to Consider in Budget Preparation
Adding Flexibility to the Budget
Institutional Budgeting
Capital Budgeting
Economy Study
Anticipated Payback Period
Anticipated Rate of Return (Accounting Rate of Return)
Cost Categories
Relevant Costs
Sunk Costs
Opportunity Costs
Incremental Cost
Other Methods of Ranking Proposals
Summary
Key Terms
Review Questions
Problems

Chapter 23 Cost-Volume-Profit Analysis (Break-Even Analysis)
Objectives
Cost-Volume-Profit Analysis (Break-Even Analysis)
The Break-Even Chart
Preparing a Break-Even Chart
Disadvantages of Break-Even Analysis
Summary
Key Terms
Review Questions
Problems

Glossary

Index

Frederick DeMicco

Frederick J. DeMicco is ARAMARK Chair and Professor for the department of Hotel, Restaurant and Institutional Management at the University of Delaware. Formerly, he was Associate Director in the School of Hotel, Restaurant and Recreation Management at Penn State University, where he was Professor-in-Charge of the HRIM undergraduate program, and presently is a Penn State Conti Professor of Hotel, and Restaurant Management. Dr. DeMicco teaches courses in international management and strategy, foodservice management, with research in the areas of cost control, international strategic management, and gerontology. His research spans the human life cycle from children to older employees and mature customers in the hospitality and tourism industry. He has worked on projects with ARAMARK for the Summer Olympics in Atlanta, Sydney, and Athens.

In 1986, he completed his Ph.D. in Hotel, Restaurant and Institutional management at Virginia Polytechnic Institute and State University. In 1996, he completed a sabbatical in Hotel Management at Walt Disney World, Florida. He is on the Editorial Board of the Hospitality Research Journal, as well as author and co-author of more than 100 publications in the area of hospitality and tourism management. Dr. DeMicco is ranked 12th among the 119 most cited international hospitality faculty. Dr. DeMicco has taught and conducted research in Europe, Scandinavia, Australia, and the Caribbean (including cruise ships).

Dr. DeMicco is co-author with Dr. Marvin Cetron and Owen Davies of Hospitality 2010: The Future of Hospitality and Travel (Prentice Hall, 2006).

Cihan Cobanoglu

Cihan Cobanoglu is an associate professor of Hospitality Information Technology at the University of Delaware. He earned his Ph.D. from Oklahoma State University in Hotel and Restaurant Management specializing in Information Technology. He is a Certified Hospitality Technology Professional (CHTP) commissioned by Hospitality Financial and Technology Professionals and Educational Institute of American Hotel and Lodging Association.

Dr. Cobanoglu has over 5 years of industry experience. He worked as System Manager for Ramada International Mersin, a five-star luxury hotel with 350 rooms. He is a Certified Micros/Fidelio programmer. Before working at Ramada, he worked in different segments of the industry including hotels, restaurants, blue voyage yachts, and clubs in different positions.

His research involves the use and impact of technology in hospitality industry. Dr. Cobanoglu published in scholarly journals such as Cornell Hotel and Restaurant Administration Quarterly, International Journal of Hospitality Information Technology and International Journal of Market Research. He has made over 100 presentations in national and international conferences, such as HITEC, FSTEC, MURTEC, and HFTP Annual Convention. Professional affiliations include Hospitality Financial and Technology Professionals, Hospitality Information Technology Association, and Council on Hotel, Restaurant, and Institutional Education. Dr. Cobanoglu also serves the hospitality industry as an IT consultant.

Joseph Dunbar

Joe Dunbar is a hospitality industry consultant specialized in management advisory services and cost control. He works with clients in 44 states, the District of Columbia, Canada and the Caribbean. These clients operate restaurants, golf and ski resorts, universities, corporate dining rooms, country clubs, hotels, health care facilities and special event catering services.

Formerly, he was Vice President of Finance and Administration for Sodexo’s remote site support services division in North America. His experience includes union contract negotiations, mergers and acquisitions, supply chain management, and responsibility for all finance and accounting activities.

Over 5,000 readers subscribe to Joe’s Food Cost Control blog and newsletter. His blog posts have been published in many industry publications.

Joe has offered seminars and webinars on food cost control, menu analysis and hospitality technology through the UNLV Distance Learning division, the Hospitality Financial and Technology Professionals convention and local meetings, and industry trade shows.

Robert Grimes

Robert N. Grimes is Chairman and CEO of Accuvia, located in Gaithersburg, Maryland. Mr. Grimes founded Cyntergy in 1988, which focused on providing computer support services to the hotel, foodservice, and retail industries. Under his guidance, Cyntergy has been expanded and repositioned within CynterCorp to offer these industries a range of technology-related solutions and products. In 1996, Mr. Grimes co-founded, with Nation’s Restaurant News, an international foodservice technology tradeshow and conference known as FS/TEC. Mr. Grimes has received many industry awards, including the Greater Washington 1994 Entrepreneur of the Year award sponsored by Inc., Ernst & Young, and Merrill Lynch.

Chen Chen

Chen Chen has her Bachelor’s degree from China in Information Technology. She is a graduate from the Master of Science program in Hospitality Information Management from the University of Delaware. Her research focuses on the use of tablet technology to provide service and training solutions to global hospitality and travel firms.

James R Keiser

James Keiser, an original author of this book, is a graduate of the Cornell School of Hotel Administration and Wharton School of the University of Pennsylvania. He is a retired professor of hotel and institution management at the Pennsylvania State University. Mr. Keiser has also been employed as a hospitality consultant, hotel manager, hospital foodservice director, food cost accountant, and hospital administration officer in the U.S. Air Force. He is the author of Principles and Practices of Management in the Hospitality Industry, published by Van Nostrand Reinhold (1989), and has prepared several correspondence courses. In 1989 he received the H. B. Meek award of the Council of Hotel, Restaurant and Institutional Education.

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