FOOD SERVICES

LEARNING OBJECTIVES
 TRACE THE HISTORY OF THE FOOD AND BEVERAGE
INDUSTRY.
 ENUMERATE THE DIFFERENT TYPES OF RESTAURANTS.
 EXPLAIN THE IMPORTANCE OF FRANCHISING TO THE
RESTAURANT INDUSTRY.
 DISCUSS RESTAURANT PROFITABILITY AND
CALCULATE FOOD COST PERCENTAGE, GROSS PROFIT
AND AVERAGE GUEST CHECK.
 CALCULATE THE RESTAURANT’S BREAK-EVEN POINT.
 EXPLAIN THE ROLE OF THE MENU IN A
RESTAURANT’S SUCCESS
 DIFFERENTIATE AIRLINE CATERING
FROM RESTAURANT CATERING
 DESCRIBE RESTAURANT PROMOTION
HISTORY OF FOOD AND BEVERAGE
SERVICE
Early History Certain groups of people cooked
together in big groups and that the inns
provided a crude menu.
Roman Era There were some establishments which
offered sausage or roast meat, bread
and a cup of wine.
After the fall of the Roman Empire The manors and castle’s provided food
to large numbers of people.
In 1200’s Public cook shops were open in London
which offered precooked take-out food.
The Royal Families of Europe Introduced cutlery, table linen, crystal
glasses, new foods such as Turkey and
potato, and road side tavern.
16th Century British inns and taverns began to serve
one meal a day at a fixed time and price
and at a common table.
The meal was known as ORDINARY and the dinning rooms were called
ORDINARIES. the most famous ordinary in London was the castle and Lloyd's
which was meeting place for merchants and ship owners

17th Century The Ordinaries became fashionable

Clubs and Gambling places as well as
centers for political activities.
19th century the word RESTAURANTS was used in
Paris for dining room serving dishes.
1834 The famous Delmonico's was opened in
New York.
Early 19th’s Several events were significant to the
food industry occurred.
1904 First hamburger was served, at the
St.Louise World’s Fair.
Roy Allen & Frank Wright Founded the first stand of root beer
Second World War Brought many changes to the American
Public.
1960’s Fast food establishments merged.
At present Modern popular cuisine including
French, Chinese, Mexican and Japanese
have become common inmost cities.

The role of food plays in tourism may not a Direct an Indirect attraction.
TYPES OF RESTAURANTS

 FAMILY OR COMMERCIAL RESTAURANTS

FAMILY-STYLE OR COMMERCIAL RESTAURANTS, OFFER A
WIDE MENU OF “MEAT AND POTATO” SELECTIONS
WITH A PRICE RANGE THAT APPEALS TO AN AVERAGE
FAMILY INCOME.
 COFFEE SHOPS
ARE CHARACTERIZED BY: FAST FOOD SERVICE .
CAFETERIAS ARE USSUALLY LOCATED IN A SHOPPING
CENTERS, OFFICE BUILDINGS.
 GOURMENT RESTAURANTS
GENERALLY REQUIRE A HIGHER INITIAL INVESTMENT
THAN OTHER TYPES OF RESTAURANTS, BECAUSE THEY
REQUIRE AN EXPENSIVE AMBENCE AND DÉCOR.
 ETHNIC RESTAURANTS
FEATURE THE FOOD OF SPECIFIC REGION OR COUNTRY.
 FAST-FOOD RESTAURANTS
HAVE INCREASED IN THE PAST 20YEARS AS PEOPLE HAVE
BECOME MORE MOBILE.
 DELI-SHOPS
PROVIDE DELICATESSEN FOOD SERVICE, COMBINING
TRADITIONAL DELICATESSEN COLD MEATS AND
CHEESES WITH TAKE-OUT SANDWICHES, SALADS AND
SIMILAR ITEMS.
 BUFFET RESTAURANTS
ESTABLISHED ON A COMPLETELY SELF-SERVED BASIS.
 TRANSPORTATION RESTAURANTS
THERE IS NATURAL LINK BETWEEN TRANSPORTATION
AND FOOD SERVICE.
FRANCHISING
 ARE MAJOR COMPONENT OF THE FOOD SRVICE
INDUSTRY, PARTICULARLY IN FAST FOOD SECTOR.
 FRANCHISE ARE BENEFICIAL TO THE FRANCHISEES
BECAUSE THEY PROVIED OPERATIONAL,
TRAINING, LAYOUT AND DESIGN ASSISTANCE,
LOCATION ASSISTANCE, MANAGERIAL EXPERTISE,
GROUP PURCHASING POWER, AND MOST
IMPORTANTLY, THE IDENTIFICATION OF A WELL
KNOWN BRAND SUPPORTED BY REGIONAL,
NATIONAL, AND INTERNATIONAL ADVERTISING
AND PROMOTION.
 FRANCHISED RESTAURANTS CAN EASILY
GET FINANCING FROM LENDING
INSTITUTIONS THAN INDEPENDENTS.
RESTAURANT PROFITABILY

 FOOD COST PERCENTAGE

FOOD COST PERCENTAGE IS OFTEN TO USE
TO MEASURE A RESTAURANTS
MARKETING SUCCESS.

FORMULA:
DIVIDE, FOOD COST FOR A PERIOD (A DAY,
A WEEK , A MONTH) BY SALES FOR THE
SAME PERIOD THEN MULTIPLY IT BY 100 .
FOR EXAMPLE:

IF THE COST OF FOOD FOR 1MONTH IS

$40,000 AND SALES IS $100,000 THE
FOOD COST WOULD BE:
$40,000
$100,000 IS EQUAL TO =0.4
0.4 x 100= 40%
GROSS PROFIT
ITEM COST PRICE SELLING COST GROSS
PRICE PERCENTAGE PROFIT
1 $4.00 $8.00 50 $4.00
2 $1.00 $4.00 25% $3.00

IN THIS ILLUSTRATIN, IT WOULD BE BETTER TO SELL ITEM 1

RATHER THAN ITEM 2 SINCE ITEM 1 HAS A HIGHER COST
PERCENTAGE, A HIGHER GROSS PROFIT AND HENCE, A
CONTRIBUTION TO NET PROFIT THAN ITEM 2. FOR EACH OF ITEM 1
SOLD 50 PERCENT FOOD COST, THERE IS A $4.00 GROSS PROFIT
COMPARED WITH $3.00 WITH ITEM 2.
 LABOR COST
 LABOR COSTS ARE CONTROLLED BY EXPRESSING THEM AS A
PERCENTAGE OF SALES ON A DAILY, WEEKLY OR MONTHLY
BASIS ANG COMPARING THE ACTUAL COST WITH THE
STANDARD DESIRED.
 INSTEAD PF TREATING LABOR COSTS AS SEPARATE FROM
FOOD COSTS, MANY SUCCESSFUL RESTAURANT LOOK AT
THESE TWO AS A COMBINED COST. FOR INSTANCE, THEY SET
A STANDARD OF 75 PERCENT ABOVE IN WHICH FOOD COST
PLUS LABOR COSTS MUST NOT INCREASE. AS LONG AS THE
OPERATION MAINTAIN THE COMBINED COST BELOW THIS
LEVEL THE RESTAURANT WILL BE PROFITABLE.
 IN A LARGE RESTAURANT, THE ORGANIZATION OF THE LABOR
FORCE IS IMPORTANT TO LABOR COST CONTROL. THE FOOD
SERVICE STRUCTURE IS ILLUSTRATED IN FIGURE 7.
AVERAGE GUEST CHECK

 ANOTHER PROFITABILITY MEASURE USED

IN RESTAURANT IS THE AVERAGE GUEST
SPENDING OR AVERAGE CHECK. AVERAGE
GUEST SPENDING IS CALCULATED BY
DIVIDING THE TOTAL REVENUE RECEIVED
FOR A PARTICULAR PERIOD(A DAY, A
WEEK, A MONTH OR A YEAR) BY THE TOTAL
NUMBER OF GUEST SERVED DURING THAT
PERIOD.
FOR EXAMPLE:
 IF 350 GUESTS ARE SERVED DINNER AND
THE TOTAL REVENUE RECEIVED IS $3,610,
THE AVERAGE SPENDING WILL BE:
$3,610
350 = $10.31
BREAK-EVEN POINT

 BREAK EVEN IS THE POINT AT WHICH

BUSINESS WILL MAKE NEITHER PROFIT
NOR A LOSS. THE OPERATION FOR
DETERMINING THE BREAK-EVEN POINT IS

FIXED COSTS
CONTRIBUTION MARGIN
 FIXED COST ARE THOSE COSTS THAT REMAIN THE SAME
REGARDLESS OF THE VOLUME OF BUSINESS. FOR
EXAMPLES ARE SALARIES, INTEREST, DEPRECITION,
INSURANCE RENT, AND THE LIKE. THE CONTRIBUTION
MARGIN IS AVERAGE CHECK LESS VARIABLE COSTS. FOR
EXAMPLE, IF A RESTAURANT HAS AN ANNUAL FIXED
COST OF $125,000 AND AN AVERAGE GUEST SPENDING
OF $10.00 AND ITS VARIABLE COST SUCH AS FOOD,
LABOR AND OTHER IS 75 PERCENT OF REVENUE OR $7.50
PERCENT GUEST SERVED, ITS BREAK-EVEN POINT IS
$125,00
$2.50 =50,000
 THE CONTRIBUTION MARGIN IS AVERAGE CHECK
LESS VARIABLE COSTS OR $2.50 LESS $7.50. THE
BREAK-EVEN NUMBER OF CUSTOMERS IS 50,000.

THE PROOF OF THIS IS

TOTAL REVENUE: 50,000 x $10.00 = $500,000

VARIABLE COST :50,000 x $7.50 = 375,000

FIXED COSTS: 125,000
PROFIT OR LOSS: O
 FOOD SERVICE
----------------------------------------------------
FAST FOOD TRADITIONAL
CAFETERIAS
RESTAURANT RESTAURANT

INDEPENDENT CHAIN

SPECIALTY SPECIALTY

BROAD MENU
ETHNIC

LOCAL
 MENU
 THE MENU IS THE BASIC PLANNING
DOCUMENT FOR A SUCCESSFUL RESTAURANT.
 THE MENU ALSO DETERMINES THE EQUIPMENT
NEEDED AND THE INVESTMENT REQUIRED.
 THE MENU CAN ALSO DETERMINE THE LABOR
COST OF A RESTAURANT.
 THE MENU CAN ALSO DETERMINE THE COST
FOR UNIFORMS, THE CHASES, STORAGE AND
SPACE AND ACTUAL FOOD COSTS.
 AIRLINE CATERING
 AIRLINES SPEND BILLIONS OF DOLLAR EVERY YEAR
FOR FOOD PURCHASES. THE AVERGAE COST PER
AIRLINE PASSENGER IS BETWEEN $1.00 AND $7.00
DEPENDING ON THE LENGTH OF THE JOURNEY. THE
AMOUNT IS LESS FOR SHORTER TRIPS, SINCE
PASSENGERS MAY BE OFFERED ONLY A NON-
ALCOHOLIC BEVERAGE AND A LIGHT SNACK. FOR
LONGER TRIPS, IN WHICH TWO OR THREE MEALS
MAY BE OFFERED INCLUDING FREE ALCOHOLIC
BEVERAGES, THE AMOUNT IS HIGHER. AROUND 3
TO 4 PERCENT OF AN AIRLINE’S TOTAL COSTS IS
SPENT ON FOOD.
FOOD QUALITY

 THE MAIN PROBLEM OF AN AIRLINE IS TO

COOK THE MEAL ON THE GROUND AND
SERVE IT SEVERAL HOURS LATER IN AN
EXTRAORDINARY DRY CABIN
ATMOSPHERE, SEVEN MILES HIGH TO
DIFFERENCES AND WHOSE MAIN
MOTIVATION IS TO TRAVEL RATHER THAN
TO EAT.
LOGISTICS
 TO PRODUCE HOT MEAL, THE AIRLINES HAVE TO
PREPARE SPECIFICATIONS FOR RECIPE,
INGREDIENTS, COOKING METHODS AND
TEMPERATURES AND LABOR FOR EACH FLIGHT.
ALL THIS REQUIRES A FORECAST USING THE
ACTUAL PASSENGER RESERVATION FOR EACH
FLIGHT INCLUDING AN ALLOWANCE FOR
STANDBYS AND LAST-MINUTE RESERVATIONS IN
ORDER TO HAVE THE CORRECT RAW MATERIALS,
EQUIPMENT AND FOOD PRODUCTION STAFF FOR
EACH SHIFT.
 AIRPLANE GALLEYS

IN 1936 BY DOUGLAS FOR ITS DC-3 THE FIRST AIRPLANE GALLEY WAS DESIGNED
MEALS PREPARED ON THE GROUND WERE KEPT
HOT OR COLD IN INSULATED CONTAINERS ON
THE AIRCRAFT.

WORLD WAR II THE INTRODUCTION OF LARGER AIRPLANES

ENABLED THEM TO HAVE OVENS AND
REFRIGERATORS ON BOARDS IN THEIR GALLEYS.
 FLIGHT KITCHENS
IN THE LATE 1930’S
THE FIRST AIRLINE FLIGHT KITCHEN WAS
OPENED NEAR THE WASHINGTON D.C.
HOOVER FIELD AIRPORT BY A
GENTLEMAN NAMED MARRIOTT. HE HAD
A RESTAURANT NEAR THE AIRPORT.

SOME AIRLINES HAVE THEIR OWN FLIGHT KITCHENS WHICH PREPARE MEALS
FOR THEIR OWN PASSENGER. OTHER AIRLINES CONTRACT WITH AIRLINES
THAT HAVE THEIR OWN KITCHENS. STILL OTHERS CONTRACT WITH AN
OUTSIDE CATERING COMPANY THAT SPECIALIZES IN AIRLINE FOOD
PREPARATION.
DIFFERENCE BETWEEN AIRLINE CATERING
AND RESTAURANTS CATERING

 AIRLINE CATERING IS DIFFERENT FROM

RESTAURANT CATERING BECAUSE IN THE
LATTER THE COOKS CAN MAKE LAST MINUTE
ADJUSTMENTS. FOR EXAMPLE, A STEAK MIGHT
BE PREPARED IN THE FLIGHT KITCHEN TO BE
ACCOMPANIED BY A SAUCE AND VEGETABLES
TO BE SERVED TWO HOURS LATER. DURING
THIS TIME IT MUST BE KEPT HOT. IF THERE IS
FLIGHT DELAY OF ONE HOUR,THE STEAK WILL
BE STRINGY,
 THE SAUCE WILL BE CONGEALED AND THE
VEGETABLES WILL BE MUSHY.
 IN AN ORDINARY RESTAURANT, A MEAL LIKE THIS
WILL NOT BE SERVED BUT ON AN AIRLINE, THE
SERVING CREW USUALLY HAS NO OTHER CHOICE
BUT TO SERVE IT.
 IN AIRLINE CATERING, THE LOGISTICS ARE VERY
COMPLEX BUT AIRLINES EXERT GREAT EFFORTS TO
SERVE GOOD MEALS TO THE PASSENGERS. THEY
EVEN RESPOND TO THE NEEDS OF PASSENGERS ON
SPECIAL DIETS IF GIVEN ENOUGH NOTICE.
RESTAURANT PROMOTION
 MANY RESTAURANTS ADVERTISE THEIRMENU OR PARTS OF IT IN
NEWSPAPER. LOCAL NEWSPAPER ADVERTISEMENTS ARE USED BY
MOST RESTAURANTS AS THE MAJOR FORM OF EXTERNAL PROMOTIO
SEVERAL RESTAURANTS ADVERTISE IN THE YELLOW PAGES OF THE
LOCAL TELEPHONE DIRECTORY. SOME USE LOCAL RADIO OR TELEVIS
STATIONS. THE MORE POPULAR RESTAURANTS AND NATIONAL
RESTAURANT CHAINS ADVERTISE IN AIRLINE IN-FLIGHT MAGAZINES,
COMSUMER TRAVEL MAGAZINES AND TRAVEL TRADE PUBLICATIONS
MANY RESTAURANT TRY TO FOSTER GOOD RELATIONS WITH NEARBY
HOTEL EMPLOYEES SUCH AS FRONT OFFICE STAFF, BELL DESK
PERSONNEL AND DOORMEN BECAUSE THEY ARE OFTEN ASKED BY
HOTEL GUESTS TO RECOMMEND GOOD NEARBY RESTAURANTS. GOO
PUBLIC RELATIONS AND WORD-OF-MOUTH ADVERTISING GENERATE
LOT OF BUSINESS