Food Service Industry

• Defined as “the art of supplying food and beverage services

away from home or to the home but prepared elsewhere”.
• The National Restaurant Association (USA) divides the
foodservice industry into two categories:
– Commercial
– Noncommercial

Regean U. Ellorimo
• However since 1993,Restaurants and Institutions (USA) no longer
divided the industry into these categories because menu item and
facility ambience choices between categories are almost nonexistent
overseas.
• In Malaysia, there are still obvious differences between the two
categories of foodservice.
• The term commercial and noncommercial are still used to indicate
the degree of choice a customer has in selecting where to eat.
Regean U. Ellorimo
 Types of Food Service Operation
• The foodservice industry can be classified into 2
major groups:
1. COMMERCIAL FOODSERVICES
2. INSTITUTIONAL FOODSERVICE

Regean U. Ellorimo
 1. Commercial Food Service
A. EATING PLACES
• Full-Service Restaurants
• Limited Service (fast-food) Restaurants
• Commercial Cafeterias
• Social Caterers
• Specialty Restaurants-ice cream, yogurt stands
• Ethnic Restaurants
• Food Courts
Regean U. Ellorimo
B. Food Contractors
• Manufacturing and Industrial Plants
• Commercial and Office Buildings
• Hospitals
• Colleges & Universities/Primary & Secondary Schools
• In-transit Foodservice (airlines/railways)
• Recreation and Sports Center
Regean U. Ellorimo
C. Lodging Places
• Hotel Food and Beverage Outlets
• Motel Restaurants
• Retail-Host Restaurant
• Recreation and Sport
• Mobile Caterers
• Vending and Nonstore Retailers
Regean U. Ellorimo
 2. Institutional Foodservice
A. EMPLOYEE FOODSERVICE
• Staff canteens/cafeterias
B. GOVERNMENT NURSERIES, ELEMENTARY AND
SECONDARY BOARDING SCHOOLS
• Subsidized foods for infants, toddlers, children,
students in residential halls, boarding schools, hostels.
Regean U. Ellorimo
C. College and Universities
• Government/semi-government higher institutions
• Student dining halls
• In-house foodservices
• Academic and non-academic staff cafeterias
D. INDUSTRIAL FOODSERVICE
• In-house subsidized mass foodservice for employees
Regean U. Ellorimo
E. Government Hospitals
• District hospitals/healthcare centers
• City/general hospitals
• Staffs/nurses/doctors’ canteen
F. REHABILITATION CENTERS
• Prison Foodservice
• ‘Boys’/Girls’ rehabilitation centers
Regean U. Ellorimo
G. Government Nursing Homes
H. Clubs, Sporting and Recreational Camps
I. Community Centers
J. MILITARY/ UNIFORMED FOODSERVICE
• Officers and Open Mess
• Airforce
• Army Navy
• Police
• Fire Brigades
Regean U. Ellorimo
 Commercial Operations
• Three (3) basic commercial food service operations
are:
1. Independents
2. Chain Restaurants
3. Franchises
Regean U. Ellorimo
 Independents
• Owned by an owner or owners who have one or
more properties that have no chain relationship.
• Menus may not be identical among properties.
• Food purchase specifications may differ, operating
procedures are varied, etc.

Regean U. Ellorimo
 Chain Restaurants
• Part of a multi-unit organization
• Often share the same menu
• Purchase supplies and equipment cooperatively.
• Follow operating procedures that have been standardized for every
restaurant in the chain
• May be owned by a parent company, a franchise company or by a
private owner or owners
• Some chains are operated by a management company.
Regean U. Ellorimo
 Advantages
• Large chains can readily acquire cash, credit and long term leases on
land and buildings
• Ability to experiment with different menus, themes, designs and
operating procedures
• Can afford staff specialists who are experts in finance, construction,
operations and recipe development
• Able to generate internal financial information that can be used as a
basis of comparison among properties
Regean U. Ellorimo
 Disadvantages
• Difficult to keep up with changing markets and economic
conditions.
• Involve a large amount of paperwork, rules and procedures
that can slow them down.
• Top management may lose motivation to keep up and what
is best for the company might not always receive the
highest priority.
Regean U. Ellorimo
• A special category of chain operations 3. Franchises
• The franchisee (the owner of the franchise property) pay fees
to:
a) Use the name
b) Building design
c) Business methods of the franchiser (the franchise
company)
• The franchisee must agree to maintain the franchisor’s
business and quality standards.
 Institutional Operations
• Traditionally, a large percentage of institutional food service
operations have focused on nutrition and other non-economic factors.
• Today, as pressures for cost containment accompany reduced income,
there is a need to manage institutional food service operations as
professional businesses.
• Sometimes this is done by the institutions themselves.
• Other institutions choose management companies to help them
minimize costs.
Regean U. Ellorimo