Leadership is the #1 Pillar for successful Restaurant Catering – It begins with the CEO

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I’m very proud of both my teams at MonkeyMedia Software and The Catering Institute.  For the last 20 years we have focused on a single business strategy called the 5 Pillars of Successful Takeout, Delivery and Catering.  All of our products and services are focused on helping restaurant operators to grow sales and increase profits through feeding their customers where the LIVE, WORK & PLAY.

Through our consulting and coaching, and our curriculum and technology, we have been able to provide a sound business framework that is scalable and predictable to the Fazoli’s team.  I want to point out here that the ONLY reason it is working is because of the leadership and franchisees at Fazoli’s.  They are leveraging it properly and are applying it methodically.  This is yielding exemplary results.

Yesterday, Fazoli’s put a statement out to the marketplace that they are doubling down on technology and catering.  I am not posting it here to boast, but simply to call out that because of Carl Howard’s leadership and the conviction of his whole team, they are moving the needle for their franchisees in a meaningful way.

For me, it’s always been about the people and I am blessed to be able to work with the leadership team at Fazoli’s.

The article is below:

Fazoli’s, The Catering Institute and MonkeyMedia Software Announce Strategic Partnership to Deliver Takeout, Delivery and Catering Solutions to Franchisees

 

Grub hub? Doordash? Uber? Postmates? Dispatch?- Stop wasting your time

 

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OK.  I am going to upset a lot of people with this post tonight.  I’ve been at this for far too long and have watched our customers work way to hard to grow their restaurant companies.  And so, I’m throwing my hat into the ring on this 3rd party delivery issue.

As a restaurateur, are you feeling confused about your options of how to handle 3rd party delivery services?  Are you being bombarded by Doordash, Postmates, UberEATS and so many other providers promising you the moon?  Promising you more sales?

Well, good luck with all that!  It’s a shakedown!  None of these services are adding value or growing your sales.  It’s a ticking time bomb.

Read this article in the Washington Post last week, “Not All Restaurants Are Fans of Food Delivery Services“.  The author does a great job at demonstrating how restaurants are losing control over their brand and off-premise experience.

I applaud In n’ out Burger for taking a stand and suing these guys for misrepresenting their brand.

Need more?  Check out these employment reviews about Doordash one of the darlings of the industry.  That’s a whole lot of bad will right there.  These are the people that are delivering your brand to the consumer.  Do you really want your restaurant to be reflected this way?

Here is another guy, taking to Youtube to show how Doordash is messing him up.

Postmates?  No better.  Check out this reality.

And then there are these guys!  These heavy hitters are claiming that they are going to revolutionize the business.  Not a restaurant operator in the bunch.  Technology engineers that are pitching their “fast growth” stories to Wall street and getting billions of dollars in funding.  Do they have any appreciation for restaurant operations?

None of these companies seem to care about your restaurant operations.  If they did, they would appreciate how complicated they are making things for restaurants.   As a matter of fact, they are working hard to further disrupt your restaurant operations, and they are taking a piece of the action while they do it.  And because this is a technology play, people will get super rich in the process.  This has Dot Com all over it.  The business model is doomed.

Well, I am really concerned about where this is going.  It’s a runaway train and it’s going to create dismal economics for our industry.  A lot of restaurant companies are going to go out of business in the process.

Let me share with you that I have worked in restaurants for more than 20 years.  And I can tell you, delivery for takeout is (and always has been) a challenge.

Let’s work on an example:

  1.  Let’s take a transaction of $12.00 (sandwich, drink and cookie)
  2. If you are a GREAT operator, your gross margins are at best 35%.
  3. This gives you a gross profit of $4.20
  4. 3rd party delivery services are charging 18% – 25% as a commission.
  5. This equates to $2.16 to $3.00
  6. This reduces your gross profit to $2.04 – $1.20.
  7. Your realized gross margin is actually 17% – 10%, depending on your arrangement.
  8. If you look at the math, you will actually see that with this scheme, you are splitting 50% or more of your gross profit with these services.  It’s just not affordable.

Now, I can tell you from experience that with a gross margin this dismal, it is impossible to make any money on this transaction.  In fact, I might argue that you will lose money on this transaction and you are better off not taking the business.  This is steep discounting.  It’s not going to work.

So go ahead!  Ramp up your takeout delivery business with these 3rd party players and watch your profits fly out the back door.  Watch your customers walk out the door and watch as you lose total control over your takeout business.  BEWARE!

Here are some additional facts:

  1.  The customer is not yours.  The customer belongs to the 3rd party delivery company.  The orders are being placed in their database and systems.
  2. Depending on your agreement, the more you pay and the more transactions you allow, the higher your listing and more visible your restaurant is on their websites.  They will drive more “non profitable” business your way.
  3. Not one of these 3rd party companies is making any money.  They are ALL being funded by Venture Capital and Private Equity.
  4. The business model is not sound.  Neither restaurants or the delivery companies can sustain this model.
  5. Their valuations are starting to decline.

Conclusion:

If you want to deeply discount your products and quickly cannibalize your sales, sign up for these 3rd party delivery services today.  It’s a sure way to lose your money, and fast.  Oh, they will bring you a “ton of sales”.  Thats for sure.  But you will lose money on each one.  Good luck with that.

Delivery for takeout has always been a challenge because the cost of distribution is prohibitive.  Delivery for catering works because the order values make sense.  You can afford to absorb the cost of distribution when an order is a few hundred dollars.

Saying that, do you want this guy doing your catering delivery?  Seriously?

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This topic is complex.  My recommendation for restaurants is that they should focus on the basics.  Do what you do well.  Focus on your core business strategies and don’t run head on into a technology gold rush.

If you want to do delivery, then do it yourself.  Do a good job.  Take good care of your customers and just do a good job.  Pizza operators have done that forever.  Just ask them.

Focus on a solid catering and takeout program and take care of the last mile yourself.

My two cents.

 

 

 

Catering is Alive and Well in our Restaurant Community!

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September 2015 was a whirlwind!  Conferences, Speaking Engagements, Consulting, Training and Software Implementations!

MonkeyMedia Software is humming along with more than 5000 restaurants using our solution, The Catering Institute is growing very rapidly and working with so many great teams and our readership at Catering Insights is growing exponentially.

I always knew in my own heart that catering out of restaurants was a HUGE opportunity for the brands that really decided to take it seriously.  And the data is presenting positively towards this belief.

Next year I will celebrate my 20th year since entering the foodservice space and I am just as excited and bullish about our industry as I was n 1996, when I acquired Tony’s Deli & Catering Company.

Catering was the force multiplier at Tony’s and was the catalyst that led to the work that I am doing today at MonkeyMedia Software, The Catering Institute and Catering Insights.  I am amazed to see how catering is also the force multiplier for so many brands that we are working with.

As I traverse North America and work with the greatest restaurant and foodservice companies in America, I am left with a feeling of optimism and hope.  In fact, I am so certain that the work we are doing is changing the way our community operates, that I can’t wait to see what the next decade brings.

It’s going to be a fantastic ride!

I am grateful today to the team members that I am blessed to lead forward, and even more grateful to the more than 5000 restaurants and their teams that have placed their trust in our organization and for believing in our dream of helping restaurants to feed their customers where they Live, Work and Play.

Catering is here to stay and I am so grateful to be part of it.

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

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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 

Schlotzsky’s names MonkeyMedia Software as Vendor of the Year!

 

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http://www.qsrmagazine.com/news/schlotzsky-s-names-monkeymedia-vendor-year

Very proud of my team today at MonkeyMedia Software where we implement Monkey, the #1 Cloud Platform for Takeout, Delivery & Catering.

Thank you to Schlotzsky’s for this wonderful honour.

 

 

Be wary of online & mobile ordering solutions when it comes to Catering

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Alright!  This post is sure to raise a few eyebrows!

Let’s mix it up a bit today.  As we all know, Online & Mobile Ordering for restaurants is all the rage these days.  (again!).  As an industry, we suffer terribly when it comes to technology and the deployment of that technology into the operations of our restaurants.  We just don’t get it. And to make matters worse, the technology companies are using confusing marketing and messaging to further confuse everybody.

Online and Mobile ordering is just e-commerce.  It’s simple and is great for extending a transaction to the consumer, but it just won’t help you run you business better.  Not even close to better.  It has no operations based logic.

But it’s important to understand where a transaction online will impact your operations.  As restaurateurs, we must understand that catering out of our restaurants is an operations based business problem.  It’s not about just taking an order online.  It’s about how to execute that order flawlessly.  It’s about order fulfilment.  It’s not about taking the order, it’s about getting it out the door, on time, every time.  Order execution is the key to growing your catering operations, not just taking orders online.

There are hundreds of technology companies out in the marketplace that are offering online ordering.  You all know who they are.  We all see them at the trade shows.  The reason why there are so many is because taking an order online is the easy part.  There is little to no barrier to entry and so, anybody can do it.

Airlines, Floral, Books, Music, Clothing and just about every other product you can think of is now available through online ordering.

But to run a successful catering operation out of restaurants, you need a real business solution.  You need a software solution that has all of the business logic you’d expect to find in an operations based system.  Focused on order execution and fulfillment.  It’s what you do with the order that matters, not taking the order.  Clearly we have to take orders!

WARNING:  If you are going to build your catering transactions online and drive them through your POS for order execution, you are going to fail miserably as your transaction volume increases.

Today’s Online & Mobile Ordering providers will either;

1.  Send the order to a fax

2.  Send the order to an IP printer

3.  Send the order to your POS

If you attempt to scale your restaurant’s catering business using any three of the above workflows, you are doomed to fail.

And so, what should you look for?

1.  An end to end solution set that facilitates mobile & online ordering, call centre ordering, billing, accounts receivable management, raw material forecasting, delivery logs, sales team management, invoicing, statements, collection notices, distribution calendars, deposits and so many other things that they cannot all possibly be listed here.

And so, where can you find this kind of solution?  Well, I’m biased but why not call your PepsiCo Foodservice Representative and ask them if they have a catering solution? I’m sure they will point you in the right direction!

Or, just call Mo Asgari (604-215-2163) at MonkeyMedia Software and he’ll show you what you need!  If you are a PespsiCo customer, make sure you ask him about the “PepsiCo Advantage” program for preferred pricing.

Oh, and to all the online and mobile ordering guys out there, if you’d like to send your online and mobile orders to Monkey’s system so restaurants can actually grow their catering operations, just give Mo a call.  He’s happy to chat about our API.

Let’s talk catering!

 

Want to grow your catering sales? Ask Your PepsiCo Sales Representative How!

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For the last 18 years I have been helping restaurants to grow off-premise sales through MonkeyMedia Software , The Catering Institute and Catering Insights.  I am so lucky to do the work that I do.

My passion for this space came out of my own deli in Vancouver, BC where I spent many years as an owner operator.  I experienced success in providing more takeout, delivery & catering to my customers and ended up developing Monkey, The # 1 Cloud Platform for Takeout, Delivery & Catering.  Today we support more than 5000 restaurants in North America and we are growing nicely!

In addition to our software, The Catering Institute continues to develop fantastic curriculum to help restaurants implement the strategy of the 5 Pillars of Successful Restaurant Catering.  We are deeply committed to education in the off-premise space and we are so excited about what we are seeing happen with catering from our industry’s most important suppliers!

Allow me to explain.

To me, catering out of restaurants is going through the same market dynamics that drive thru did in the 1970’s.  Here is what happened:

1.  Markets shifted and innovation by restaurateurs came first.  It was just an idea.

2.  Technology caught up and made it easier for restaurateurs to grow drive thru operations.

3.  The largest supply chain companies in the world got behind the innovations and investments and pushed towards helping our community to grow more sales and profits in this channel.

These three key factors made it easier for restaurant companies to grow drive thru sales and the more we prevailed, the more consumers rewarded us with their business.

Fast forward to 2015.  It’s happening again!  But this time, the sales channel is catering!

The same dynamics are happening with the entire off-premise business opportunity, especially with Catering.

1.  Restaurants have been trying to cater for years.  Early innovation.

2.  Technology (like ours) is helping to make it easier to cater.

3.  Supply chain Partners are investing and helping

And so, as I sit here today contemplating why the largest supply chain companies in the world need to help our community, I call your attention to the great work that PepsiCo Foodservice is doing in the restaurant space.

You see, they are not only innovating fantastic products under their portfolio for takeout, delivery & catering, but in fact, they are diving deep into helping restaurant operators with their overall off-premise business strategy.  They are investing resources into helping their customers do more takeout, delivery & catering.

To me, this is what sets companies like PepsiCo apart from their competitors.  They are forward thinking and not just focused on selling more of their products to their customers.  They are deeply engaged in learning and completely focused on helping their customers to grow sales and increase profits by educating them to become experts at feeding their customers where they Live, Work & Play!

Want to grow your catering sales?  Call your PepsiCo Sales Representative today and ask them how!

Let’s talk catering!