Erle’s Top 13 Reasons Why a Restaurant Catering Operation Fails

letstalkrestaurantcatering
Erle Dardick, CEO & Founder of the Catering Institute and MonkeyMedia Software

I was looking at some old files today and then I found this fun image that my friend Mike Tyler made for me a few years ago!  Those were from the days long before the Catering Institute!  Life is so much different today…. As the Catering Institute continues to evolve, so do I!

Today at the institute, we have successfully trained more than 2000 satisfied foodservice students using our various classes and curriculum.  We have also had tens of thousands of restaurateurs download our various resources, articles, essays and webinars.  Check out this video to see how much fun we have during our training sessions.

Much of my work these days in our software division,  MonkeyMedia Software ,is to remind and teach our team to remain true to the key principles that we have documented using the business framework of the ‘5 Pillars of Successful Restaurant Catering‘.

The way I see it, our software division has a core client responsibility.  They must use the 89 characteristics of the 5 Pillars to benchmark the operations.   (Call me at 604-831-7422 if you’d like to discuss the characteristics).  Using our scoring systems allows the group to decide as to whether or not a restaurant company is ready to implement our world class technology into restaurant operations.  We have so much experience now to know that  companies that are trying to implement sophisticated technology on top of poor business processes, are not suited for a successful implementation.  They must score high on the 89 characteristics that we have documented to succeed with software implementation.

And so of course the story goes.  It is the 89 characteristics that the Catering Institute will to continue to work on…..

And so, this leads me to today’s list of reasons why I believe off-premise programs fail.  I’m sure there are dozens more that we could add.  Here goes…..

1.  Lack of a documented takeout, delivery & catering strategy 

2.  Inability to establish standard operating procedures.  Management of off-premise business by “seat of the pants”

3.  Frequent critical incidents “putting out fires is common practice”

4.  No focus on takeout, delivery & catering as its own business unit

5.  Lack of investment

6.  Lack of  leadership and catering business experience

7.  No Separation of Menu Items between takeout and catering

8.  No differentiation in packaging between takeout and catering

9.  Too many service gaps

10.  Lack of catering authenticity

11.  Lack of management commitment to catering

12.  Lack of operational evaluation tools

13.  Inability to start entrepreneurial businesses 

How to Grow Catering Sales: A Franchisee’s Perspective

Franchisee/Franchisor

It’s no secret that the franchise model for growing restaurant companies continues to be a key driver in the restaurant industry. The restaurant industry is no different than other industries such as the music industry, the movie industry or even the software industry. Ours is an industry full of creativity, processes, proprietary flavors and company cultures. It makes good business sense for our industry to leverage that intellectual property across the globe through franchising. Like any business, a restaurant’s strategic plan is critical.

A franchisee is a very important community member within the restaurant industry. Happy franchisees promote positive energy. Happy franchisees invest in their restaurant operations. Happy franchisees will strive to meet restaurant brand standards. Happy franchisees care about results. And happy franchisees make more money!

Yes, when franchisees make money we have a healthy franchising ecosystem that thrives, prospers and grows for many generations forward. And so, that is why a franchisee is so important to our restaurant community.

Thinking about restaurant catering as a franchisee, I’d like to encourage you to take some time to understand the perspective of restaurant catering from the franchisor’s perspective. This is very important because, well frankly, they need your help to do catering right. What follows is my perspective on the franchisee/franchisor relationship and how it impacts the decisions that need to be made around catering out of franchisee locations.

As we all know, the franchising business is only successful if the franchisees believe they are getting timely services from the franchisors. Good franchisors understand this service dilemma and go out of their way to make sure they invest in the proper infrastructure to provide services to their franchisee community. When it comes to franchising, the franchisor is the seller and the franchisee is the buyer. It’s no different when it comes to catering out of franchise ecosystems.

As a franchisee, please consider how rapidly the market for healthy and convenient food is growing. Franchisors everywhere are in a constant race to position their restaurant brands in front of consumers, and demands and tastes are shifting every day.

Because catering out of restaurants has primarily been an industry afterthought, many franchisors have neglected to make this important sales channel part of their brand’s core business strategy. And the ones that have are still in the early days of our industry’s evolution.

As a franchisee, your job is to help your franchisors understand your needs. Because catering is tied to the business strategy of your restaurant, it requires attention at the most strategic level of the brand you represent. You need support to execute the catering operation with precision.

In many franchise systems, good franchisee operators went ahead with catering services in earnest. Why? Because catering out of restaurants is simply smart business. Catering makes you more money.

Every restaurant franchisee today has customers asking for catering services. In addition, every restaurant franchisee needs more sales to help make this week’s payroll. Saying no to customers is never an option for any growing venture. Good franchisees find a way to do it.

And so, as the telephone rings more and more for these services, we must raise our service to a standard that can be measured and ultimately improved. That is the only way to yield more sales and we need to get better at it.

On this franchisee-catering journey, we must deeply understand the subtlety in restaurant operations when it comes to catering. It requires a sturdy organizational foundation at the executive level committed to solid catering leadership and enterprise-level catering alignment. No business can advance without clear leadership, financial accountability and a vision for future growth. Therefore, franchisees must work together with their franchisors on restaurant catering to implement a scalable business focused on incremental sales. Franchisors can utilize the scale and resources of the full ecosystem to drive more sales for everyone by representing the brand properly in the marketplace.

As part of this strategic alignment exercise, franchisees must include their restaurant unit managers and their community team members. If employees at the restaurant level are not trained around your designed catering culture, that culture will cease to exist and your catering program will fail.

To get everyone in your operation on the same page — whether you have one restaurant or 100 — here are 4 characteristics of organizational restaurant catering alignment that should be agreed upon and communicated to the rest of your restaurants and your franchisors:

1. Sales Goals: A clear and concise sales goal must be posted publicly and promoted visibly within all areas of your restaurants. Growing catering sales takes a full team commitment to selling.

2. Financial Investment and Resources: Restaurant catering represents a high-margin sales opportunity. A few small investments in the right places will yield incremental sales with few incremental costs. These investments need to be well defined, qualified, quantified and committed to.

3. A Commitment To Training & Standardization: People development is a key aspect to succeeding in your restaurant catering division. It takes ongoing people development to solve catering problems.

4. Coordinated Action Through Conscious Leadership: Results in an aligned customer service action throughout every department of your organization. Catering team ambassadors in every department all working together for seamless execution of catering, while maintaining existing business operations.

Let’s talk catering!

Your Restaurant’s POS System is not designed to scale catering sales – Another Perspective

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For many years I’ve been publicizing the sales, marketing and overall business case for layering a catering program on top of your existing multi-unit restaurant operation. I believe strongly in the year-over-year sales life that a solidly executed catering program can provide.

Yet in order to fully sell your catering services, and to capture those transactions at the point-of-purchase, you will need to apply the business logic and technology to keep this aspect of your business organized and streamlined.

While there are several items to discuss as they relate to how catering software fits into an existing IT infrastructure, I’d like to focus this conversation on the role that your POS systems plays in the catering ecosystem.

As restaurant operators, we are sunk into our POS systems as the core technology infrastructure for our restaurants.  Many restaurateurs believe that POS integration is a requirement when it comes to catering; however, in my nearly 20 years experience at MonkeyMedia Software, I can tell you confidently that POS integration is not required for the successful execution of the catering transaction.

Today’s point-of-sale systems have not been built with the right business logic needed to succeed in the catering market.  As you approach the business logic for catering execution, consider that your POS cannot manage the conversational ordering or the batch manufacturing and distribution requirements that are so integral to the successful catering transaction.  POS was designed for a retail transaction, not a business-to-business transaction.

Because catering orders are taken online and by telephone, conversational ordering systems are needed during the catering transaction so you can provide your catering customers with a consistent and predictable order experience.

From the beginning, you will need an order-entry system to generate invoices, statements, collection notices, and to manage accounts receivable. Naturally, the system must also extend into your production and distribution process. It’s important to understand that order fulfillment for a catering transaction, follows a different internal dynamic when it comes to making and delivering your products to your catering customers.  POS is designed to fulfill one single transaction at a time and when it comes to catering, we are facing a micro-batch production dynamic.

I am clear that POS systems are not geared to handle the subtleties of each catering transaction and that they do not have the right business logic to properly and effectively service the catering channel.  Catering is about relationships and to be successful, your sales teams need the appropriate customer relationship management tools that POS systems cannot provide.

In our world at MonkeyMedia Software, our products stand outside the POS and our customers use our technology to focus solely on the catering transaction.  POS is not required.

Now, as part of a successful enterprise deployment of catering software in your ecosystem, allow me to move the conversation to reporting.  We do need to continue to find ways to report catering data into the overall restaurant’s IT infrastructure in order to scale.  In many instances, we can look to an end of day catering process where we drive the day’s catering transaction data back into the POS ecosystem, not for the execution of orders, but simply to report data in real time to your management team.  This is where POS integration can play a role in the catering transaction.

Catering software: What to consider

The right software will ensure that the correct data is gathered from your catering client at the point of order capture. Additionally, once fully deployed, the catering software system should be fully integrated with your back-end reporting systems, where it makes sense. Your catering software system should be web- and enterprise-based, and should be standardized to easily share data across your entire organization. This will provide complete transparency into your catering business and will provide the organizational framework to grow catering sales while feeding customers where they live, work and play.

Let’s talk catering!

 

Improve Kitchen Production Efficiency to Grow Restaurant Catering Sales

Kitchen Design

When it comes to selling and marketing your catering products and services, reliability, predictability and scalability are three key elements required to ensure long term success. Until you thoughtfully design your restaurant catering production process, you will not be able to maximize the opportunity for catering out of your restaurants. Catering is a different business!

You must adopt a “manufacturing mentality” for your catering operations and how you engineer that dynamic into your kitchens directly relates to the execution success of your catering business. You must appreciate that an adjusted workflow will create new operational dynamics in your restaurants.

This is where planning and flexibility with regards to your catering production methodology becomes an important part of your overall strategic catering plan.  Your team must be prepared to consider “batch based” manufacturing and assembling of products, as well as be able to handle last-minute order adjustments.  Your catering policies and procedures must be well documented and publicized to deliver a smooth catering experience for both your store-level employees and your guests.   You have to follow some sound business logic when managing order dynamics for catering.  So, what you do in your kitchen really matters to your catering customers!

As catering sales grow in your restaurants, so too will the demands and competition for more resources. In my view, this is one of the biggest challenges facing our restaurant community. It is hard to teach people to respond to this kind of dynamic demand, while also filling their regular duties related to your daily restaurant operations.  To overcome this intellectual challenge, I’d recommend that you take the time to re-engineer the roles and responsibilities of your kitchen production teams to make room for your catering operation.   Start by putting a single point of contact in charge of all catering orders when it’s time to get product out the door!  There is more to consider, but you need leadership at all levels of the catering transaction!

If you design properly, you can use your existing labor at the restaurant level to help facilitate the production and assembly of catering orders.  If you look at the order flow, you will see that when we add the element of delivery and order distribution into the workflow, in fact, orders have to be out of the kitchen long before your guests consume your catering products.   As such, we need to adjust our human capital to begin producing products long before your regular restaurant day parts begin to impact operations.  The beautiful thing about that dynamic is that catering sales will yield higher margins because you are utilizing your labor far more efficiently.   Saying that, you will have to really look at each step of the order manufacturing and assembly process.  I am proposing, that there should be very little incremental cost in human capital as you increase catering sales.  Simply re-engineer the workflow of your current team members to take on some catering-related tasks on each shift.  In addition, consider that menu engineering can have a serious impact on creating more capacity for catering sales.  You don’t have to offer every item on your restaurant’s menu.  Catering can be a subset of products and a very specific experience.  Engineer a catering menu that takes pressure of your kitchen!

Depending on which day-parts for catering you are focused on, your production start and stop times will ramp up and down just before your retail business traffic hits your restaurants.  For example, if implemented successfully, your lunch catering orders will already be in transit to your customers, by the time the in-store lunch rush begins. This synergy will create more overall efficiency in your entire restaurant operations and will make better use of your assets. Ultimately, if you can engineer this dynamic properly, you will fundamentally shift the economics of your restaurants!

In addition to production start and stop times, the preparation process for receiving, inputting and preparing catering orders is something that is critical to appreciate.  As an example, your catering captains on each shift at your restaurants should begin preparing for catering orders the night before they are scheduled for delivery or pick up. As such, you will get a jump on tomorrow’s orders long before your kitchen closes for the day.  This makes the next day’s catering orders easier to execute as we prepare tomorrow’s raw materials for assembly and cooking.

Meanwhile, shelf-stable items such as chips, beverages and paper service should be gathered and prepared by the closing shift, thereby making better use of downtime during slow nights at the restaurant.  If it’s a busy night, experience tells me that the work still gets done and the numbers look even better.  People tend to work to the speed at which business is coming in the door!  We just have to teach them how.

During my time at Tony’s Deli, we had a single catering supervisor for each shift at the restaurant whose sole responsibility was to fold boxes, organize labels, prepare beverages and paper service for the next day’s catering orders. In addition, they also helped with the store’s closing procedures and cleaning that allowed us to operate our entire business far more efficiently.  This kind of workflow dynamic makes better use of your existing resources that might otherwise sit idle between day parts, and is another critical part of the efficiency equation!

If you have planned and executed well, on the day of catering production and distribution, your kitchen team’s energy should go into the assembly and packaging step to fill orders and not all the tasks that should have been pre-prepped earlier in the process when time was not as critical.

There is more to discuss here.  However, I have learned that we can design and implement a more thoughtful workflow in our kitchens when it comes to executing restaurant-catering orders.

Let’s talk catering!

 

What are you doing with all that extra food? – Reduce Catering Waste

 

I have been spending alot of my time in restaurant kitchens these days.  Helping our customers to streamline their catering operations.  It is the part of my job at MonkeyMedia Software and the MMS Catering Institute that I enjoy the most.

 

Of course, like all of us in the restaurant industry, I’ve always got my eyes peeled for better ways.  When it comes to catering our of our restaurants, we have to handle the issues of “off-premise” and sometimes that leads to events that lead to waste.

 

I recently supervised a restaurant catering event where so much extra food went into the garbage bin.  Then I realized, restaurant catering needs to manage it’s waste carefully.

 

I stumbled upon this great video from Australia and thought that it would be a great post to help raise awareness to this issue.

 

 

What are YOU doing in your restaurant operations to curtail catering waste?

 

 

 

 

Catering Tip #3 – Pricing your restaurant catering menu

I often have restaurant operators asking me about how to manage their menus.  At the MMS Catering Institute we believe that catering out of restaurants is a separate business;  a business unto its own.

When it comes to menu pricing, I’d like to put forward the following recommendation.  Check you this video for my perspective.

 

Catering is getting easier for the restaurant operator

This september will be the beginning of my 16th year working on advancing catering in the restaurant industry.  When I thought about that, I scared myself!  Sixteen years is a long time.  Tons of roadwork, sweat, tears and laughter too.  I love what I do and I am very lucky to serve my team and clients.

“It’s possible that I am only 15 years into what will be a 30 year process!”, I thought to myself.  Well, if that’s the case, I’d better pace myself.  There is alot of work to be done.

My work at MonkeyMedia Software and the MMS Catering Institute continues to evolve and our team gets stronger and better every single day.  They achieve these results, because they just “chip away” at restaurant catering day in and day out.  Our work in the field with restaurant operators matters a lot and our team has a deep belief system.  We just don’t waiver.

On top of that, we make our customers money.  That’s what we do;  help them to grow sales and increase profits by teaching them to become experts at feeding their customers where they LIVE, WORK & PLAY.

And so, I was thinking about how restaurant catering is getting easier for operators.  It’s really great to see.  Well, I believe the best is yet to come.  It’s going to get easier and easier and in the future, the entire restaurant supply chain is going to innovate products and help support the tremendous growth opportunity that we all have.  It will be a wonderful thing for everyone when we hit all cylinders together.

If your organization sells services to restaurants, give me a call and I’d be happy to share my thoughts with you on why you should get into the restaurant catering conversation, sooner rather than later.