Restaurant Planning

UNIT I

Dept. of Hotel Management,

DSMS College
Planning & Operation of F&B Outlets

 The prospectus includes physical and

operational characteristics such as the
style of the building, type of food served,
type of service system to be followed, a
profile of customers, etc.

 It also includes regulatory information

such as fire plan, standards of safety,
hygiene, noise control, etc.
Steps followed in Planning
 Planning is the first and the most important factor to be considered
while establishing an outlet. Proper planning reduces project time
and labour cost.

 There are three steps involved in planning.

STEP 1: Doing market survey and gathering information. Actually
developing the blue prints and putting plans into practice.
STEP 2: Procuring funds and the required space area or building and
equipment; setting standards (SOP) and recruiting staff.
STEP 3: Listing out policies and procedures, setting goals and targets to
be achieved in a particular time frame. Defining service standards and
focusing on operations to bring in more profits.
Points to be considered
 Location: Location of the outlet plays a major role in deciding the operations. It
also affects the profitability. Operations of an outlet located in tourist spot or in a
resort area is different from those in an outlet located in an urban area.

 Target market: Recognizing a market segment and understanding their

preference is very important to cater to a target market.

 Business Potency: Knowing the potency of a particular market segment or

location is essential to start an outlet, because business comes from the potential
guest and not from the population of the market.

 Availability of skilled manpower: Success of any operation depends on the

quality of services offered. Quality service can be achieved by setting high
standards. To maintain the high standards and to provide speciality services,
skilled staff is required. Getting skilled labour is expensive.
 Budget: Budget affects the size and quality of operations. Most of the planning
is directly connected to budgeting. One should remember to include initial
operational costs in the budget.

 Space availability: Procuring space for establishing an outlet is one of the major
difficulties faced. Sufficient space is required to accommodate the potential
guests, and more often this is expensive. Space should not be very from
targeted location.

 Competition: Identifying and studying competitors is important while planning

an outlet. A detailed analysis of the competitors helps in introducing new
concepts and better services in an outlet.

 Legal aspects: This is important and generally ignored aspect of outlet

planning. Finding and completing all legal formalities is essential. It is always
advised to adhere to local laws.

 Local Influence: The greatly affecting factors are religious and communal
restrictions, culture life style, and eating habits of a particular locality.
Location or site- feasibility study for
F&B Service outlet
 Population Base – Are there enough people in the area to support your business?
For example, is the restaurant location in the heart of a thriving downtown
shopping district, or along a busy freeway? There needs to be enough people who
live in the area, or pass through the area on a regular basis.

 Parking – Will there be enough parking to accommodate all the seats in your new
restaurant? Ideally, a new restaurant location should have its own parking lot. If
that isn’t an option, is there public parking near the restaurant location.

 Accessibility – There’s a reason that major restaurant chains are often located
near highway and freeway exits: It makes them accessible for customers.
Motorists can reach the restaurant without fighting traffic or driving out of their
way. Most successful restaurant locations (but not all) are easy to find.
 Visibility – This goes along with accessibility very important for new
restaurant locations. People have to know the restaurant is there. This is why
property prices in downtown districts and developed strips are higher than
other areas. They offer a level of visibility that can bring in a great deal of
walk-in business.

 Space and Size - Even the smallest bistro or coffee shop requires adequate
space for a kitchen, walk-in refrigerator, dry storage and an office for
paperwork. Your dining room needs space for a side-station and/or a bar. You
must plan how much space/size will the equipment cover and need to ensure
smooth operation of your restaurant.

 Safety First - One of the first steps is finding out if the building has been well
maintained. Checks like proper wiring, fire alarms, sprinkler systems,
handicap-accessible doors, restrooms, ramps etc. A walk through the building
with your local code enforcement officer will help you determine what needs
to be done to be complaint with the rules & regulations before you open the
restaurant.
Sources of Finance
 Personal investment - When starting a business, your first investor should be
yourself—either with your own cash or with collateral on your assets. This
proves to investors and bankers that you have a long-term commitment to
your project and that you are ready to take.

 Private Investments/Friends & Family- This is money loaned by a spouse,

parents, family or friends. Investors and bankers considers this as ‘patient
capital’, which is money that will be repaid later as your business profits
increase.

 Venture Capital funding- As you know more and more start ups are growing
in the country, as a result more VC’s are looking out for businesses which have
the potential to grow. However, You should only seek investment from Venture
capitalist when you want to scale and want to replicate your success in other
cities.
 Partnerships- Another great way to fund your business is to find a partner who
can put money in your budding venture.

 Bank Loans- Banks are a great way raise capital when your business is in the
initial stage. But they involves a great deal of documentation and high interest
rates. Budget a lot of time for the extended approval process and don't get too
discouraged by rejections - at least you're getting helpful feedback from the
reasons they cite and the questions they ask.

 Mudra Loans- Micro-units Development and Refinance Agency (MUDRA) is an

organisation established by the government of India to provide business finance
to microbusiness units. MUDRA Loans are also a refinanced business loans,
approved and disbursed through public sector banks, private sector banks, co-
operative societies, small banks, scheduled commercial banks and rural banks
that come under the scheme. Small Industries Development Bank of India
(SIDBI) SIDBI established in April 2, 1990 under small industries
development bank of India act, is the Principal Financial Institution for :
Promotion, Financing Development of the Micro, Small and Medium Enterprise
(MSME) sector.
Design Consideration
 Brand Personality- The personality of brand should be defined and programmed.
This programming should happen before the sketch of the restaurant design even
considered. The brand name should stand out for the right reasons and should also
live up to ones expectations and authenticity and/or uniqueness. eg. Celebrity,
Specialty cuisine, Grills Brand to have integrity one must establish a distinct set of
promises that differentiate that brand and define it.

 Brand Positioning-
 The idea of being better is subjective for eg. Your outlet has better burger
or Restaurant design or both
 When you are only you (unique)become a sole source provider and can
dominate the market.
 The brand positioning should be such that the concept would niche in the
market and should have least competition. When competition does arrive, you should
be established and be the known as the best brand in the business.
 Silverware/Crockery/Glassware- Light flimsy and cheap silverware will give an
impression of light flimsy cheap food. Tableware reflects on the restaurant and
should be considered overall restaurant design and concept development.

 Uniform- The uniform is a reflection and extension of your brand. Employee

image should be viewed through the same lens as your overall restaurant design
process.

 Ventilation- Need to take an entirely different approach to seasonal temperature

fluctuation. Ventilations is an important consideration restaurant design and it is
more than just good aesthetics.

 Restaurant menu design- The most important piece of marketing collateral of

restaurant is its menu. The weight, size, paper presentation, fonts and typography
photos and use of language are important consideration of restaurant menu.

 Storage Needs- The kitchen area should be at least 50% of dining space and
storage 1.5 times of kitchen areas.
Furniture, Fixtures & Counters
 Typically including large fixed elements such as countertops, bar counters, booths,
and fixed tables, dining fixtures and outdoor fixtures.

 Fixtures that are typically found in restaurants include bar counters, fixed tables,
seating booths, and cash registers. Other fixtures found in restaurants are
refrigeration systems, countertops, wine racks, and kitchen equipment.

 Customer requirements -include a menu display near entrance, near waiting room.
Seating in restaurant must be planned so that variety of seating can be arranged.
(tables of 2 or 4 can be used for 4 ,6 8).
 Waiter stations – located so as not to disturb the guests ,the number will vary
according to the standard of service.
 Bars – these should be planned so as to forward customers when tables are ready.
Summary of table spacing considerations:
 Table to back of chair – seated: 450mm
Table to back of chair – sitting: 550mm
Table to back of chair – getting up: 750mm
Wall to back of chair – seated: 200mm
Service corridor table service: 900mm
Service corridor self service: 1050 – 1350mm
Lighting & Decor
 Different lighting levels can be used in order to set the mood of your restaurant or
bar. This means that customers can either be drawn into your establishment or put
off by it simply because of your lighting choices.

 Low Lighting Low lighting can be relaxed and romantic, and it encourages
customers to stay longer. Think of a candlelit dinner at a formal restaurant. These
settings typically have overhead fixtures with dimmers and lots of accent lighting.
The low lighting creates more intimacy, as sections of brighter light, like those over
dining tables or your bar area, allow customers to feel like they are more isolated
from the other guests in the room.
 Bright Lighting Bright lights provide more stimulation than low lighting. This means
that your customers will be awake and alert. Bright lighting is good for high-energy
establishments like smoothie shops, cafes, or family-friendly restaurants. This
lighting can be achieved with large windows that let in natural light or bright
overhead light fixtures
Equipments & Fire Safety
 Kitchen Equipment (Back of House) The equipment that you find
in a restaurant kitchen is very different from the ones you will see in your house.
For a restaurant kitchen, you will need to purchase restaurant grade stoves,
fryers, mixers, blenders, steamers and slicers as well as dishwashers, coffee
makers, beverage dispensers and more. You will also need a variety of pots, pans,
measuring cups and spoons, and utensils to prepare food.

 Having a proper fire extinguisher is crucial to the safety of your restaurant, your
employees, and your customers. You’ll need a Class K extinguisher for kitchen
fires involving grease, fats, and oils that burn at high temperatures. Class K fire
extinguishers are only intended to be used after the activation of an automatic
hood suppression system. Keep Class ABC extinguishers elsewhere for all other
fires (paper, electrical, etc.). Also install an automatic fire-suppression system in
the kitchen.
Approvals and Licenses
1) FSSAI License
2) Liquor License
3) Health Trade License
4) Police Eating House License
5) Shop Establishment License
6) GST Registration
7) Fire Safety Certificate
8) Music License
9) Health Trade License /Environmental Clearance

 Among all, liquor licenses, FSSAI license, GST registration and local municipal
health licenses are the most important one to start the restaurant operations
with. The rest can be applied for once the bar, restaurant is operational and can
be procured in the next two to three months. The total cost of licenses can be
around Rs 10 lakhs.
FSSAI License

 Food Safety and Standards Authority of India (FSSAI) is a statutory body

established under the Ministry of Health & Family Welfare, Government of
India. The FSSAI has been established under the Food Safety and Standards
Act, 2006, which is a consolidating statue related to food safety and
regulation in India. FSSAI is responsible for protecting and promoting public
health through the regulation and supervision of food safety.

 Shri Rajesh Bhusan is the current chairperson for FSSAI and Shri Ganji Kamala
V Rao is the current chief executive officer for FSSAI.
 The FSSAI has its headquarters at New Delhi. The authority also has 6 regional
offices located in Delhi, Guwahati, Mumbai, Kolkata, Cochin, and Chennai.

 In 2021, with the aim of benefitting industries involved in manufacturing,

handling, packaging and selling of food items, FSSAI decided to grant
perpetual licenses to restaurants and food manufacturers on the condition
that they file their returns every year.

 Food Safety and Standards Authority of India License or Registration is

required for any food business in India that manufactures, stores, transports,
or distributes food. Depending on the size and nature of the company, FSSAI
registration or license may be required.
Liquor License

 liquor licences are issued by the legal authority of each province to allow an
individual or business to manufacture or sell alcoholic beverages. Usually
several types of liquor licences are available to apply for within each certain
province. There are many regulations which apply to all types of liquor
licences.

 These licences also apply to special events, which may occur outside of the
normal setting in which alcohol is served. Licence holders must strictly follow
all the terms and rules to avoid suspension, fines.
Health Trade License

 This license act as a work permit for businesses that involves trading goods
and services which can affect the health of the people at large. Example of
such businesses is eating houses, ice-making units, milk sellers, restaurants,
pharmaceutical business owners, etc.

 Registration Procedure of Health Trade License. 500- Rs.50,000. The owner

can apply for the license online or at CSB. Applicants can get the registration
form either at State's Municipal Corporation website
Police Eating House License

 An eating house license is an integral license for conducting business where

any kind of food or drink is supplied for consumption legally.

 Grant of registration shall come to the effect provided the authority fails to
locate any error in the application and attached documents.
Note: The validity of the eating house license is three years
GST Registration
 If the yearly aggregate revenue of a restaurant in a special
category state exceeds 10 lakhs, the restaurant must register for
GST. Any restaurant with a lower annual revenue than this can also
opt for voluntary GST registration.

 The GST rates for restaurants serving food and beverages are 5%
for non-air-conditioned restaurants and 18% for air-conditioned
restaurants.

 Restaurants can claim Input Tax Credit (ITC) on the GST paid on
the inputs used in their business. This includes GST paid on raw
materials, rent, utilities, and other business expenses. The ITC
can be used to offset the GST payable on the taxable supplies
made by the restaurant.
Restaurant Problems & Handling
Approach the guest and ask politely if there is a problem:

 Excuse me, may I help you Mr. ABC? (Listen with concern and empathy).
 Stay calm. And never argue with the guest.
 Be aware of the guest's self-esteem. Show a personal interest in the problem, Try to
use the guest name frequently.
 Tell the guest what can be the best done. Offer choices. Don't promise the
impossible, and don't exceed your authority.
 Set an approximate time for completion of corrective actions. Be specific, but do not
underestimate the amount of time it will take to resolve the problem.
 Monitor the progress of the corrective action done to resolve the guest complaint.
 Follow up. Even if the complaint was resolved by someone else, Contact the guest to
ensure that the problem was resolved satisfactory.
 Restaurant staff should take corrective actions without any hesitation.
For Complaints about the food:
 Shall I bring you another Juice ?
 I’ll bring you another one right away.
 I’ll change it right away.
 I’ll speak to the chef, and see what we can do.
 Would you like your steak cooked a little more?
 Would you like to order something else instead?
 I’ll have the kitchen prepare another one. Would you like some wine while
you are waiting?

About the air-conditioning:

 I’ll turn the air-conditioning (down / up / off).
 Would you like to move to a warmer place / table?
About the service:
 I’ll attend to it right away. / I’ll look into the matter at once.
 I’ll see about your order right away.
 Excuse me, Mr ABC. It will be about another (15) minutes for your chicken soup to
get ready.
 Your food will be ready in about (15) minutes. (Apologize if there has been a
delay.) Thank you for your patience.

Spillages and Breakages:

 Let me help you, Mr. Wilson. / Allow me, Mr. David.
 I’ll fetch you a (towel / some water).
 I do apologize for the accident, Mr. Langer. May I have it dry cleaned for you?

Thumb Rule:
 Rule no. 1: The guest is always right.
 Rule no. 2: If the guest is ever wrong, reread rule no. 1.