Foodservice Facility Design Project Scope PDF

**PRELIMINARY PLANNING** **THE SCOPE OF A PROJECT** Scope refers to the size and complexity of a foodservice facility design project. Scope can be divided into four levels of complexity, each of which requires the involvement of different individuals and different amounts of planning time. Determi...

**PRELIMINARY PLANNING** **THE SCOPE OF A PROJECT** Scope refers to the size and complexity of a foodservice facility design project. Scope can be divided into four levels of complexity, each of which requires the involvement of different individuals and different amounts of planning time. Determining the scope of the project is an important first step before the planning begins. - Level I Scope Projects of level I scope involve no more than the selection of a major piece of equipment or the replacement of a small area of a foodservice facility. Examples of level I projects include: ❏ Replacement of a dish machine and dish tables in a school cafeteria ❏ Replacement of the display refrigerator and service counter in a delicatessen ❏ Purchase and installation of an outdoor walk-in freezer in a nursing home ❏ Replacement of the range section in a country club Projects of level I scope typically can be carried out under the leadership of the owner or manager, assuming that he or she is familiar with foodservice equipment and has a good grasp of the workings of the food facility. If the owner does not have a working knowledge of equipment, a food facilities design consultant may be needed. The owner also will require the assistance of the kitchen equipment dealer and/or manufacturer's representatives in selecting and installing the equipment. Level I scope projects usually can be completed in a period of six to twelve weeks. - Level II Scope Level II scope projects involve the renovation of a significant portion of an existing foodservice facility. Examples of level II scope projects include: ❏ Renovation of the entire service area in a university foodservice facility ❏ Replacement of all of the walk-in coolers and freezers in a country club ❏ Replacement and relocation of the warewashing system in a hospital ❏ Addition of banquet rooms and serving kitchens in a hotel The professionals likely to be involved in level II scope projects include the owner, an architect, mechanical and electrical engineers, a foodservice facility design consultant, and a kitchen equipment contractor. - Level III Scope Level III scope projects involve the complete renovation of an existing foodservice facility or the design and construction of a new foodservice facility. Examples of level III scope projects include: ❏ Renovation of the dietary department of a hospital ❏ Construction of a new theme restaurant ❏ Renovation of the kitchen, service, and dining areas in a country club ❏ The development of foodservices for a new hotel The planning process for the renovation of a foodservice facility often is even more complex than designing a new facility because of the difficulty of dealing with existing walls, structural members, utilities, and space, and the demolition of parts of the existing structure. Moreover, in renovation projects decisions must be made about which pieces of existing equipment should or could be used in the newly renovated facility. The professionals likely to be involved in level III scope projects include the owner, an architect, mechanical and electrical engineers, a foodservice facility design consultant, an interior designer, a general contractor, and a kitchen equipment contractor. Level III scope projects may take from one to three years from design to completion. - Level IV Scope Level IV scope projects involve the development of a chain or franchise prototype. Chain or prototype foodservice facilities require intense planning and design efforts because they will be constructed in multiple locations. Inefficiencies in design or inadequacies in equipment could be repeated hundreds of times, and thus will be exceptionally expensive to correct. Such projects, in addition to the requirements of level III scope projects, involve a corporate strategy, a well-researched marketing plan, complex financial planning, and a strong management team. The food facility design at level IV must fit the needs of the menu, market, strategy, and financial package that is being developed by the corporation. Professionals likely to be involved in level IV projects include investors and/or owners of the corporation, marketing consultants, financial planners, bankers, and corporate staff specialists as well as the design team, consisting of an architect, engineers, a foodservice design consultant, an interior designer, and contractors. The time required for a level IV scope project is longer than for a level III project in the design phases but may be shorter in the construction phases. **CONCEPT DEVELOPMENT** The concept of a foodservice operation is the overall plan for how it will meet the needs and expectations of its intended market. A foodservice operation's concept is expressed in many ways, including its menu, decor, form of service, pricing, and location. Concept development means developing a plan for the success of the operation in its market in advance of actually designing---let alone building---the facility. It is not unusual for a person to consider a new restaurant or, in fact, to open a new restaurant without knowing what type of food facility will have the best chance of succeeding. The potential entrepreneur may have some investment money, a location or a theme in mind, and a great amount of enthusiasm for the food business, but has not really thought through the total concept of the operation. Unfortunately, enthusiasm and great food products are only half of the success equation. The other half of the equation is the market. Concept development precedes the actual design of a foodservice facility because the foodservice design team must know what the menu, demand, hours of operation, and mode of service will be. Single-Unit Restaurant Concept Development The client who most frequently comes to the food facilities design consultant for help with concept development is the individual restaurant owner. The restaurant owner typically organizes a corporation comprised of a small number of local businesspeople and then begins to develop a concept that will eventually become a freestanding restaurant. The success or failure of the venture often depends on how well the concept was planned and how well the plan was followed. Numerous concepts are possible for single-unit restaurants. Commonly found concepts often are described in terms of the following general categories:\* ❏ **Fine-dining restaurants.** Fine-dining restaurants are distinguished by fine cuisine prepared by celebrity chefs, attentive service, stylish decor, and high prices. ❏ **Theme restaurants**. Theme restaurants offer a dining experience that evokes special times, places, or events, such as English pubs, restaurants owned by sports celebrities, and re-creations of diners from the 1950s. ❏ **Casual dinner houses**. Casual dinner houses emphasize a comfortable and contemporary decor, as well as high value. Well-known casual dinner houses are not single-unit restaurants, but chains such as Bennigan's, T.G.I. Friday's, and Max & Erma's. ❏ **Ethnic restaurants**. Ethnic restaurants are closely tied to the cultures or foodways from which they originated. They include Mexican, Italian, French, German, Thai, and Indian restaurants, to name but a few. ❏ **Family restaurants**. Family restaurants specialize in relatively inexpensive fare and are kid-friendly. ❏ **Quick-service restaurants**. Quick-service restaurants specialize in convenience and fast service and include fast-food operations as well as delis, bagel shops, and sandwich shops. Each of these categories of foodservice concept involves differences in menu, decor, mode of service, and price. However, not all of these factors are equally important within a given concept. Price is a critical factor in the success of quick-service, family, and casual dinner restaurants, where customers are value-conscious. However, price may not be as important in fine dining restaurants, where customers expect to pay top dollar. Similarly, location is crucial for quick-service restaurants because their clientele depend upon convenient access. But for some fine-dining and theme restaurants, location is not critical. Concept development for a single-unit restaurant is thus a complex process. **Chain Restaurant Concept Development** When Dave Thomas, the late chairman of the board of Wendy's, traveled around the country with Colonel Sanders in the mid-1950s trying to promote a chicken franchise, he learned many of the dos and don'ts of food franchise marketing. Thomas certainly picked up good ideas about concept development for chain restaurants and franchises, as the success of Kentucky Fried Chicken (known as "KFC") and then Wendy's demonstrates. The basic objectives he developed, which led to the formation of Wendy's, were the following: ❏ Produce a "Cadillac" hamburger with a large number of available condiments. ❏ Limit the menu to the smallest number of items possible, as most restaurants can prepare only a few food items extremely well. ❏ Create an image different from major competitors. In the case of Wendy's, distinctive features included an old-fashioned, nostalgic theme, carpet on the floor, marketing directed at adults, and a larger hamburger than the competition's. Concept development for Wendy's was more comprehensive than that for a single-unit restaurant. The franchise strategy was carefully thought out to create a balance between company-owned stores and franchised stores. In 1970, only two stores were open, both of them owned and operated by the company. By 1975, 83 company-owned stores and 169 franchised stores were in operation. A ratio of 30 to 40 percent company-owned stores to 60 to 70 percent franchised stores permitted a balance of control and greater financial return. The strategy entailed rapid expansion of the franchise and heavy promotion of the Wendy's name through national advertising. Wendy's now has over 5,400 stores worldwide. Multiunit casual dinner houses and theme restaurants, such as Chili's, Bennigan's, and the Olive Garden, follow a similar pattern in concept development. Their emphasis is on identifying the key characteristics of their target markets and then locating restaurants where there is a high concentration of individuals who have those characteristics. Key characteristics may include income, age, education, and home ownership. **Multi-theme Restaurant Concept Development** A particular form of multiunit restaurant for which concept development is critical to success is the restaurant organization that opens and operates restaurants whose concepts are not identical but different. The Levi Organization and Lettuce Entertain You are two examples of successful restaurant chains that have developed multitheme restaurant concepts. These two companies each use several different themes, and each restaurant is promoted with its theme rather than by using the corporate name. Lettuce Entertain You, for example, operates Papagus (a Greek concept), Maggiano's (an Italian concept), Ben Pao (an Asian concept), Cafe Ba-Ba-Reeba! (a tapas bar), and the Corner Bakery. The development of these restaurant concepts through excellent marketing, well-planned menus, and good design comes about through the efforts of a very sophisticated management team. **Hotel Food and Beverage Concept Development** The development of foodservice concepts for hotels has evolved in recent years from the traditional view that considered the food and beverage department as a necessary evil to the modern idea that the food and beverage department is an important profit center. Some large hotels have food and beverage sales of over \$35 million per year, an amount that exceeds room sales and creates in management a high expectation of profit from these two departments. The Hilton Hotel in Atlanta, Georgia, has developed a concept for its first-class rooftop restaurant that goes beyond the idea of a foodservice facility as a profit center. The restaurant, called Nikolai's Roof, was conceived as a luxury dining room and is marketed to the city of Atlanta as well as to hotel guests. The decor is exquisite, the food is served with flair and showmanship, and the entire theme captures the imagination of the city's residents. The concept was developed with such success that the hotel's own guests had great difficulty getting reservations to dine. A hotel restaurant so overcrowded that it could not serve the guests of the hotel would have been unthinkable in earlier days of hotel keeping in the United States. Nikolai's Roof is an excellent example of the execution of a hotel dining concept that complements the hotel itself as well as drawing a significant number of guests from the community. Hotel managers have known for many years that hotel restaurants must have certain desirable features if they are to be successful. These features include: ❏ Availability of parking ❏ Unique theme or decor (differing from the decor of the hotel itself) ❏ Strong promotion to the community ❏ A menu and a method of service that are distinctive The developers of hotel properties, and in some cases hotel chains, have used outside foodservice facilities and interior design consultants to create unique specialty restaurants that can be successfully marketed to both hotel guests and the community. **Institutional (Noncommercial) Foodservice Concept Development** Institutional foodservice is usually conceived as a service to an organization, and most often has a not-for-profit philosophy. Most institutional food operations are expected to break even, and all are expected to budget and operate within well-defined ranges of costs so that they do not become a financial burden on the organization they serve. In some cases, the institutional food operation is expected to make a profit and to pay for all of its direct and indirect operational costs. The development of an operational concept for the institution is often ignored, and this is usually a serious mistake. The institution must accurately interpret its market and must "sell" its products, even when the food is indirectly paid for by the customer. For instance, in hospital foodservice, an unattractive meal presentation will cause dissatisfaction and complaining on the part of the patient and possibly adverse health effects as well if he or she does not eat a meal and thus does not get sufficient nourishment. In a college or university dining hall, a comprehensive concept of service and decor can greatly influence financial success. Attractive food court service or a scramble design, for example, can increase the popularity of a college foodservice operation and generate additional profit. A dining facility operated by a corporation for its employees should also have a well-planned concept and decor. The ability of corporate foodservice operations to attract employees may influence the degree of subsidy that a company is willing to contribute to the operation. **THE FIVE M'S OF CONCEPT DEVELOPMENT** The successful foodservice operation combines the following elements of concept development: market, menu, money, management, and method of execution. **Market** The importance of conducting market studies before proceeding with the construction of a food facility cannot be too heavily stressed. The basic marketing questions that must be answered are: ❏ To whom is the food operation being marketed? ❏ Is the market large enough to generate sales and produce a profit? ❏ How will the market be identified? ❏ What method will be used to communicate to this market? ❏ Will the potential customer want or need the food product? ❏ Will a quality assurance plan be developed that will encourage the customer to return because of superior service and/or product quality? ❏ Will internal marketing successfully sell the customer additional services or products after he or she arrives at the food facility? A classic mistake made by both large corporations and individual restaurant operators is to conduct the market analysis and then fail to act on the basis of the information obtained. There are several cases in which extensive marketing feasibility studies were conducted by outside marketing firms, but the owners and managers made their decisions on gut feelings rather than from the hard data derived from the study. Even owners (or potential owners) of food operations who have no marketing background can conduct their own market research, with a small amount of guidance and a large amount of energy and common sense. **Menu** The importance of the menu to the design of the food facility cannot be overemphasized. The subject of menu writing is too broad to be addressed adequately in a book on foodservice facilities design. The owner or manager is encouraged to seek additional sources of information as a part of the process of developing a menu for a new or renovated food operation. The menu has a tremendous influence on the design and success of a food operation. From a design and layout perspective, these are just some of the factors determined by the menu: ❏ Amount of space required. A complex menu requires more space to prepare than a limited or simple menu does, because separate workstations and additional equipment are necessary. ❏ Service area size and design. The greater the number of menu items, the more area required for service. For example, in a cafeteria each beverage requires a dispenser and each entree a point of service. ❏ Dishwashing area size and dish machine capacity. Complex menus often require multiple plates, dishes, and utensils, and so the dishwashing area and machine capacity will need to be greater than in the case of simple menus. ❏ Types of cooking equipment. Complex menus require multiple types of equipment, especially in the final preparation area, where it may be necessary to steam, fry, bake, broil, and sauté. ❏ Equipment capacity. Limited menus may require relatively few pieces of equipment but need large capacities of each. Complex menus may require many different types of equipment with relatively small capacities. ❏ Size of dry and refrigerated storage areas. Complex menus may require larger storage areas to maintain the par stocks necessary to meet demand. ❏ Number of employees. Simple menus require fewer employees than do complex menus. ❏ Amount of investment required. When large or complex menus require more equipment, space, and employees, costs rise. **Money** Successful capitalization of a food facility includes funds for: ❏ Planning costs ❏ Furniture and fixtures ❏ Building construction or renovation ❏ Decor ❏ Equipment (fixed) ❏ Operating costs ❏ China, glassware, utensils These funds must be identified and committed before serious planning can begin. Yet, in concept development, the commitments may not be made in the early planning stage because the costs are not yet known. Therefore, planning for capital funds is a two-step process: First the financial needs are estimated and sources of financial support are contacted to determine the possibility of obtaining investment funds; then, after concept development has taken place, preliminary designs and construction estimates have been made, and market research is completed, financial commitments are made by lenders and investors. **Management** The quality of the management of the foodservice operation will be the most important element in achieving success. Following are typical questions to be addressed by the owners: ❏ Who will operate the foodservice facility? ❏ What kind of food experience and educational background must this person have? ❏ Who will assist this person in covering the long hours that are usually required to operate a foodservice facility? ❏ What level of pay will this person receive? ❏ Will this person be rewarded in some way for excellent sales and profit results? ❏ How will the owners set operational policies and communicate these to the management staff? The answers to these questions will determine the organizational structure and the kind of management team that will be used to operate the food facility. The successful restaurant often is owned and operated by one individual whose personality becomes a part of the guests' dining experience. On the other hand, the management of the food and beverage department of a hotel may be under the control of more than one person and usually is part of a more complex organizational team. In this case, the policies and procedures of the food facility should be described in an operations manual to ensure consistent implementation of management policy. From the point of view of the investor or the institutional administration, the management of a food facility must follow traditional management principles of good communication, strong controls, and sound personnel relations regardless of the number of people operating the facility. The operational philosophy and specific management guidelines to be used in foodservice operations must be carefully considered by the investors in a foodservice facility. Failure to develop management guidelines will very likely lead to the financial failure of the operation. **Method of Execution** The last step in concept development involves operational matters. Although the opening date might seem to be in the distant future to the person planning a food facility, decisions about operating methods must be made during the concept development phase on matters such as production methods, control systems, and personnel. Will convenience foods or traditional "from scratch" cookery be used? This decision will have a great influence on the size of refrigerated and dry storage areas and on the size of the kitchen. Production methods will also determine the number of employees in the kitchen and the skill level of these employees. CONTROL SYSTEM Food and beverage controls involve many different parts of the facility, and planning for these controls before the project is under construction is strongly recommended. The following areas of control should be carefully considered: ❏ Cash control ❏ Sales analysis ❏ Guest check control ❏ Food production forecasting ❏ Storeroom and refrigeration control ❏ Back door security ❏ Labor control ❏ Purchasing and receiving control ❏ Quality control\ ❏ Portion control PERSONNEL The development of financial feasibility studies cannot begin until the amount of labor required is known. The employee schedules, hours of operation, staffing patterns, staff benefits, skill levels, and level of supervision of employees must all be determined before serious development of the food facility begins. As part of its concept development, the fast-food industry based its low labor costs on the use of hourly unskilled labor, scheduled to work short periods of time. When the food operation is busy, part-time employees are scheduled to work. The traditional eight-hour day is seldom used in the fast-food industry, except for supervisors and managers. The use of part-time employees in fast-food restaurants has also significantly reduced the cost of benefits. The use of part-time employees was an important part of concept development in the fast-food industry. FEASIBILITY Many terms are commonly used in the hospitality industry to describe the process of determining whether or not a food facility is likely to return a profit to its owners. The following is a partial list of these terms: ❏ Market or marketability study ❏ Market segmentation analysis ❏ Market and operations analysis ❏ Appraisal report ❏ Economic study ❏ Time-share feasibility study ❏ Feasibility study, report, or analysis ❏ Financial feasibility study ❏ ROI (return on investment) ❏ Sales/performance study Although each term has a slightly different meaning or involves a slightly different approach, they all share the goal of determining the potential of a facility to generate sales and a profit. In the case of the financial feasibility or ROI (return on investment) analysis, the emphasis is on financial matters such as capital needs, operating funds, cash flow, and return on investment. However, even financial feasibility reports have as their primary focus the determination of whether or not a facility under good management can give investors or owners a return on their investment. For purposes of explaining the feasibility studies and of guiding the owner, manager, or student into a commonsense approach to these studies, they are classified here into two general categories: those that deal with market feasibility and those that attempt to determine financial feasibility. The two forms of feasibility study can be understood in relation to the financial statements for the operation. The market feasibility study focuses on the income statement and is conducted to determine whether revenues are sufficient to generate a profit. The financial feasibility study focuses on the balance sheet and is conducted to determine whether retained earnings (derived from net income) will be sufficient to satisfy the owners' expectations for a return on their investment.