Every restaurant has to deal with complaints. Don’t take complaints personally or consider them a nuisance. Rather, consider complaints to be what they really are, valuable feedback on how you’re doing and how you can improve.

Complaints also give you the opportunity to make up for the problem and, if handled right, can even turn dissatisfied diners into loyal, repeat customers.

Here are some tips for handling disgruntled guests:

1. Show you care. Thank the customer for letting you know about the problem. Once upset people know you care, their mood often improves immediately.
2. Offer a sincere apology. Don’t get defensive or make excuses. The guest doesn’t care about why it happened. They just want to know you’re going to fix it after they’ve heard you’re sorry for the situation.
3. Tell them you are going to fix the problem the best you can. If it’s food related, fast track another meal. If it’s service related, do what you can to get them taken care of NOW.
4. Offer them something for their trouble. Depending on the situation, offer the guest something for the unpleasant experience. A couple free deserts may be all that’s needed.
5. Get them back in your restaurant. Let them know that you can do a better job and offer a discounted or complimentary meal when they return. This is not about the cost of a free meal, this is about turning a disappointed diner into a satisfied, repeat customer who may be worth hundreds, even thousands of dollars, in future business.

(Source: Restaurantowner.com)

As an industry, we are facing the continuous rise of commodities that adversely affect our businesses. The rising price in grains and feed affect the price of raising cows, pigs, and chickens, and increases the price for milk, eggs and of course the meat and poultry. Efficient use of these staples in our restaurants is essential in remaining competitive in the marketplace. This translates into food cost. We can’t afford to waste the food we sell either in the inefficiencies of converting raw product into sales – or theft.

The “Usual Suspects”

When looking into high food cost we usually investigate the usual suspects:

• Back door security
• Inventory control
• Proper documentation of “waste” (raw and completed)
• Portions and yields

We start with accessibility of the back door. If not controlled, and employees have unlimited access, product can easily be stolen during trash runs, breaks, or – whenever. Effective inventory control involves a systematic approach to counting inventory and ordering properly. Improper counts leads to under or over ordering negatively affecting sales, quality of the product, and inefficient use of inventory. Not documenting raw and completed waste properly misses the mark on effective inventory control. Improper portions and yields again negatively affect either sales if they are too small or profitability if they are too large.

The Connection

We know that controlling food cost is all about controlling the inventory. We know so much about it, and focus so much on it, we may fail to include the front end of the operation as an accomplice to poor food cost. Handling the sales transaction improperly will negatively affect food cost. Very often we fail to make the connection of poor food cost performance with poor cash management. A cashier or server rings a customer transaction and the food is prepared and served to the customer. It happens hundreds of times a day. The sale is rung and the food is delivered to the table, or to a car in the drive thru, or even to a home or place of work. If the customer received their food and that cash transaction is negated by a void, price reduction, deletion, no sale, refund, coupon, promotion, under ringing, or some kind of manager override – you lost money!  Your inventory was negatively affected (food cost), and, if done fraudulently, the cashier committed theft and you may never know it!

Cash Components

A cash shortage in the register usually triggers questions. It grabs our attention. Who was operating the register and what happened to cause the shortage? If the shortage is unusual, it may be a ringing error, a fraud perpetrated by a customer, or simply unexplained. However, if the cash components such as those mentioned above are not routinely audited, it may go unnoticed if any of those categories are significantly high. If a cashier is stealing by one of the methods above, it is easily hidden.

Dig, Drill Down, Explore, Investigate…

Run the reports on your POS system that allows you to assess cash handling. Cash handling includes performance of voids, no sales, average check, refunds, price reductions, etc. Know what acceptable limits are on those categories and investigate those that are abnormal. Look for patterns of abnormal activity and then drill down by individual cashier. When you discover abnormal or even suspicious activity, incorporate progressive disciplinary measures to change the behavior. If theft is occurring, you will quickly know.

The connection of cash management contributions to poor food cost will be made and interrupted with sound auditing and disciplinary procedures. When future issues crop up with high food cost, you will know to place another “suspect” in the lineup.
(Source: Libby Libhart, May 2011)

Deciding whether a “prime vendor contract” is a wise choice in your purchasing process is something that confronts many operators today.

By definition, a “prime vendor contract” is a pricing mechanism that distributors offer to operators for the items they frequently buy. Generally, the distributor seeks to obtain a high percentage of the operator’s purchasing power, in exchange for better or preferred pricing for key menu items. Like any contract, a prime vendor contract is a mutual agreement that is intended to benefit both parties.

Prime vendor contract pricing is formulated on the following criteria:

Cost-Plus pricing – (also called “fixed price”) which is cost of the product plus a flat markup for items that tend to be market stable such as canned, frozen and dry goods for the duration of the contract.

Cost-Percentage pricing – which is cost of the product plus a percentage used for high volume products that are prone to volatile market conditions such as produce, dairy, meat and seafood.

Cost Pricing – which is when the distributor is willing to sell you items at cost

Market Pricing – Used on items that tend to fluctuate heavily throughout the year, such as produce, seafood, meats, and dairy.

When negotiating a prime vendor contract, an operator needs to be aware of the conditions that apply to the distributor in order to get the product to the establishment. Distributors face challenges in delivering product that are out of their control, such as weather, fuel costs, road conditions and routing changes. Any part of these components can affect the costs of the products, delivery dates or times, or possibly the amount of product that can be delivered.

On the other hand, distributors should always have a good understanding of the nature of the establishments they serve. Restaurateurs are always concerned about quality, freshness, prices and availability of their products, but most importantly distributors should always understand that service is paramount to retaining their customers’ satisfaction.

Negotiating a prime vendor agreement should be based upon the service aspects of the agreement. The most important elements of the service component are:

• Terms of payment and/or credit lines
• Ability to communicate with sales representative
• Understanding of unit weights and measures of the products being ordered
• Ability to resolve errors in the orders

Deciding whether a prime vendor agreement is the right choice for your establishment, will depend on the nature of your restaurant, the menu, and the purchasing habits of the decision maker. If your operation is small, seasonal, or ethnic (e.g. Mexican, Italian, Greek or Chinese), a prime vendor agreement may be something to reconsider. Operations of these types often use small quantities of product, or they need larger amounts of specialty foods to meet their menu demands. Because prime vendor contracts are typically offered by larger, broadline distributors such as Sysco or U.S. Foods, specialty food items may be special order items and not ordinarily stocked in their warehousing facilities.

If you decide on a prime vendor contract for your establishment, determine whether or not the following conditions apply with the distributor you choose to do business with:

Financial rewards or “kickbacks” to the person in charge of purchasing
If the person placing the orders is getting financial rewards for buying key items, rather than expected items, your prime costs may increase.

Degree of labor and time investment shopping for products
Always communicate and interact with the sales representative. Eliminating affective communication in lieu of saving time placing orders can be a big mistake. Operators have a right to be analytical and carefully audit their invoices – utilize this option in your contract!

Length of the contract
Always pay attention to the costs of items over time. If cost + plus pricing is prominently negotiated in the contract, those items should not change in price over the duration of the contract. If cost + percentage or market pricing is prominently negotiated in your contract, always ask the distributor when these prices are most vulnerable during the year, and plan your menu accordingly.

In summary, the prime vendor agreement is intended to be an equitable arrangement between the operator and the vendor. With great emphasis, the relationship between the vendor and the operator must be mutually respectful and expected to benefit both parties over a length of time. Like any marriage, both sides have a job to do, and both seek profitable results over the length of the contract. Weighing all the options pointed out in this article will allow you to make wise and informed decisions on your purchasing habits.
(Source: Kentucky Restaurant Journal, March 2011)