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2008-07 The Dorn Group Hospitality Newsletter

As we enter the hot and nasty days of summer, we are faced with a difficult economic situation. In the case of the hospitality industry, rising food costs are wrecking havoc with budgets and financial statements while the rising cost of gas has had an effect on occupancy and cost. A recent article about rising costs below originally published in www.PrivateClubAdvisor.com may give you an idea or two. My friend Andrea Strong wrote a great restaurant review (see below) in her blog www.thestrongbuzz.com and would be a great model for those who think you need to always be politically correct. Finally and by no means last, I am excited to announce our first “Strategic Alliance”. Master Club Advisors (www.masterclubadvisors.com) was founded almost 10 years ago and brings resources to The Dorn Group we had not been able to offer. A full description of their services is below.

With best wishes for a great summer …
Please fell free to e-mail Dorn at charles@thedorngroup.com

  1. Food & Beverage -- Rising FB
  2. Announcement
  3. Bar Tabac

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Food & Beverage -- Can You Save Money?
Originally published in the Private Club Advisor (http://privateclubadvisor.com) A great publication keeping the industry up to date. If you do not subscribe to it, you should! It is a must…

Food and Beverage 2008….
Times demand for a more strategic approach.
By: Charles D. Dorn, CCM
Managing Director
The Dorn Group, Ltd.

“Intensified by high fuel prices, growing demands in developing countries, the weak dollar, and the diverting of grain to biofuel production, wholesale food prices increased 7.6 percent in 2007, the greatest single-year food price increase in 27 years, according to a National Restaurant Association (NRA) analysis of Bureau of Labor Statistics data.” QSR Magazine, May 12, 2008

Hardly a day has passed in the last year when rising food costs have not been an issue. Whether it’s the treasurer of the club, chair of the finance committee or a member of the house committee, all are voicing their concerns on a regular basis. Top managers and clubs are fighting back, taking proactive measures and educating members about the effect of rising prices on the club’s finances.

Think Globally, Act Locally
It is time to review purchasing from top to bottom. How many deliveries come through the door on a daily basis? Most invoices at this point include a fuel surcharge. While the charge may seem mandatory, some clubs have been successful in negotiating reductions or elimination of the fees. Another consideration: vendors may be willing to give discounts for delivering larger loads, making less frequent deliveries or deliveries scheduled during slower periods.

Consolidation may be another option. Are multiple deliveries arriving from a number of different vendors? A consolidation of orders that increased volume to the remaining vendor might lead to more favorable pricing. Traditionally, clubs have followed the lead of the hotel business and done daily bidding using as many as three vendors. After receiving the bids, orders are split as much as three ways. This practice may merit reconsideration in the current economy with cost-plus buying becoming more popular. This method allows for a customized agreement between club and vendor and eliminates the need for daily or weekly bidding.

Knowledge is Power
Implement “Flash Reports” as an addition to areas such as F&B where trends, changes and outside influences are significant and can cause considerable concern for the membership. A “Flash Report” is a one page easy-to-read report which should highlight key changes and issues the Club may be facing.  

For example, as an addition to standard food and beverage financials, a section of the F&B Flash Report entitled “Food Cost” might identify recent increases in beef prices or the fact that flour prices have risen 350 percent over the past year. The most effective examples are those that everyone will understand. Using items like milk, flour, eggs and beef are excellent examples while foie gras, saffron and aged balsamic vinegar might cause members to ask why their club is even using these specialty items.

Another section might be entitled “Changes.” This part of the F&B Flash Report should highlight and document changes such as portion reductions, substitutions or replacements as they occur. If board and committee members are aware of changes, they are ready for the questions members may ask or concerns expressed over the changes. A reduction in portion size may allow the club’s favorite items to be sold without raising prices and may be an appropriate response. If board and committee members know why the change was made there is less chance of negative feedback.

Arthur Maguire, General Manager of the Larchmont Yacht Club in New York recently created a list for his board showing what the club paid 12 months ago for major food items as compared to current prices. The list will be updated regularly. There may be no more shocking example then flour. According to the Portland Herald, Jim Amaral, owner of Borealis Breads, reported paying $8 for a bag of flour in 2005, $10 in 2006 and $12 last year. Most recently the cost was $20 a bag but his supplier anticipates prices soaring to $39 a bag.  This example of rising costs can be taken a step further on an F&B Flash Report and the resulting changes in pricing of bread, baked goods, desserts and other items using flour can be shown.   

As previously mentioned, most vendors are charging a fuel surcharge. These charges are another example of influences to be tracked and included on the “Flash Report.” No need to get technical in this report – quite the opposite. If you see a trend coming or the cost of items regularly on your menu going through the roof, educate the members. It’s their choice on how to handle the situation.

Menu Changes
The club’s a la carte menus are the most obvious battleground for reducing food costs but they’re also probably the least popular. Clinging to tradition and refusing to adjust content, portion or pricing for fear of offending the one senior member who will yell when his or her favorite item is changed leaves many clubs at a disadvantage and is a bad business practice. If the budget has been approved with a targeted food cost of 30 percent and rising costs are driving it up, the logical solution is to review and reconsider the price, the portion size or even the item itself. Chefs throughout the country are finding pork a good substitute for beef and hanger steak an alternative to a New York Strip Steak.

If ever there were a time to reevaluate portion size, it is now. It is unlikely members will even notice if an 8-ounce hamburger is downsized by a single ounce. If the usual portion of fresh asparagus is six stalks, would members revolt over cutting back to five? Likewise, could it be time to downsize those monster buffets? What would be the effect of making dessert a choice of two or three pre-plated items rather then the 15 to 20 currently offered. The result would be a reduction in labor, in expense and in waste.

A favorite industry story illustrates how member sensitivity to pricing changes can also work to the club’s advantage. Years ago, The Lotos Club in New York City featured fresh raspberries on their dessert cart at market pricing. In winter months, the price was exorbitant – nearly equal to some of the entrees. Members hosting multiple guests actually started asking the raspberries be taken off the cart before it reached their table lest all their guests order them. The club ultimately set an annual price for raspberries which proved a more profitable solution.

Finally…..
Rising F&B costs, like anything else, should be treated strategically and logically. Ongoing discussions between club leaders and management should evaluate options as the problems arise. The issues must be dealt with aggressively, professionally and logically. No club leader or manager wants to stand up at the end of the season at the club’s annual meeting and say costs have risen 10 percent and there was nothing which could have been done. Instead, the knowledge shared between the club’s leadership and management can assure members their Club is doing the best possible job at maintaining control over rising costs.

Good communication between club leaders and managers will assure your club is doing all it can to be the best it can be. Transparency in this process assures both sides of achieving the common goal in these trying times.
 

To learn more about what you can do now, please contact Charles D. Dorn, CCM at charles@thedorngroup.com or via phone at (914) 921-3150. Dorn believes growth and change are a necessity. See how he can help you and your business move to the next level.

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Annoucement
By: Charles D. Dorn, CCM

The Dorn Group, Ltd. is pleased to announce that we have formed a strategic alliance with Master Club Advisors  

Master Club Advisors was founded nearly ten years ago to perpetuate "excellence in private club operations."  The four Partners – Ed Henderson, MCM, Bill Schulz, MCM, Norm Spitzig, MCM and Jim Muldowney, CCM – all have a long and enviable record of performance in, and service to, the private club industry. Three of the four partners are Master Club Managers, the professional designation for lifetime service and achievement held by only fifteen members (out of more than five thousand) of the Club Managers Association of America (CMAA). Specifically, Master Club Advisors:

  • Is now regarded by more and more leaders in the national private club industry as the “General Manager executive search firm of choice”.
  • Offers Board of Directors’ Leadership Orientations and Strategic Planning Sessions for both individual private clubs and international, national, and local meetings of club industry professional associations.
  • Facilitates several annual Symposiums featuring the highly interactive exchange of ideas among top industry professionals and compilation detailed operational and compensation data.
  • Offers an array of benefits and services to its Members (e.g., publishes articles of interest for the international private club community in two highly acclaimed newsletters).

For more information on Master Club Advisors’ many outstanding products and services, please visit www.masterclubadvisors.com or contact: Norm Spitzig, MCM at 352-735-5693 or normspitzig@hotmail.com for Searches, Leadership Orientations and Strategic Planning Sessions; Ed Henderson, MCM at 731-668-4322 or edh@masterclubadvisors.com for Searches and Operational Reviews; for Searches on the West Coast contact Jim Muldowney, CCM at 847-830-7048 or jim@masterclubadvisors.com
 

To learn more about what you can do now, please contact Charles D. Dorn, CCM at charles@thedorngroup.com or via phone at (914) 921-3150. Dorn believes growth and change are a necessity. See how he can help you and your business move to the next level.

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Bar Tabac
By: Charles D. Dorn, CCM

Every once and awhile we read a review or a story which captures our heart. Sometimes it is because of the restaurant, sometimes because we want the owner or operator to succeed or perhaps because someone has simply written an honest review. The review below was published on one of New York’s finest food blogs, www.thestongbuzz.com
and is the way every review or blog should be written, honestly. Reprinted with the permission of Andrea Strong….. Check her site out!! 

the strong buzz
the buzz
“I Hate Bar Tabac”
I guess the title of this piece says it all, but I do feel the need to elaborate on my distaste (perhaps hate is too strong a word, but it is effective) for this overhyped “restaurant.”

You see, I live down the block from Bar Tabac, a wannabe faux French bistro owned by the same folks that own Jules, Café Noir and Cercle Rouge, that recently and unfathomably to me, was voted best neighborhood bistro in the Time Out Awards. This place may be a bistro and it may be in a neighborhood but it is the farthest thing from a neighborhood bistro I’ve ever encountered. From where I sit, which is just a few yards from this hellacious restaurant’s front doors, it’s a rude, self-important, obnoxious cave (with al fresco seating) for French ex-pats and ubiquitous hipsters in the Brooklyn area.

I’ve been living down the block from Bar Tabac for over a month now and not once has anyone smiled as I have walked by (I smile), not once has anyone nodded hello. Perhaps I am spoiled because my old corner restaurant was Casa Mono where the staff there became like family to me. At Tabac, that’s not the case, but that’s okay. There’s no rule that says you’ve gotta smile at the neighbors.

What I find so horrific about this restaurant is not even the food, which, from what I have tasted, ain’t half bad. They serve a decent omelet, some great merguez and baked eggs, a wonderful fat juicy cheddar burger on an onion brioche roll, and excellent fries. That’s been the extent of my eating at Bar Tabac because I cannot bear to eat there one more meal. Not even just coffee. This is because of the service. The collection of incompetent misfits they have assembled here as “waiters” are not only unfriendly and clueless, they are potentially the worst wait staff in the five boroughs, if not the country. Based on my visits to the restaurant, this is what I believe the Bar Tabac Employee Training Manual says:

Welcome to Bar Tabac! You've been chosen because you're thin, pretty, speak French (or at least speak with a French accent) and have never waited on tables before. Congratulations! Please review the following guidelines before you begin work!

  1. Greeting Guests: When a couple walks into the restaurant to be seated, ignore them for at least 10 minutes, preferably 15. Turn your back to them as soon as possible. Then amuse yourself by playing with your hair, checking out your manicure, or just staring out into space. Do not under any circumstances pay attention to them before 10 minutes have passed. Anyone who is found to seat guests without making them wait at least ten minutes will be docked one of their 47 cigarette breaks per shift.
  2. Seating Guests: Make sure to seat people in the back room, or right next to a large party even when the restaurant is completely empty. In no event should you offer an outdoor table unless it is begged for, and in no event are you to seat a couple on a banquette with empty tables on either side. Put people right on top of each other. The more uncomfortable the better! Those waiters who succeed in this goal will be awarded two extra cigarette breaks.
  3. Taking Orders: No order should be taken until the couple is straining their necks wondering where their waiter is. If they are experiencing something close to whiplash, that’s even better! The general waiting period should be 10-15 minutes, no less! Take a drink order first and then refuse to take a meal order until you return with their drinks. But wait, there’s more! You must forget to bring their drinks, and instead, play with your hair, stare into space, or chat with other servers with your back to the room. You must wait until they call you over and ask where their drinks are before you bother to even submit their orders.
  4. Serving Beverages: Make sure to hold the glasses with your fingers inside the lips of the glasses. Do not use a tray. Then drop the glasses on the table so that at least a little bit of beer or wine spills out. Do not wait to see if your table needs anything. Turn and play deaf to their calls for bread and butter.
  5. Serving Food: Yes we know the tables are small, but that's the point. They’re French café tables and they look cute and that’s the important part. So there’s usually not enough room for the food with the water glasses, wine glasses, beers, bread baskets, and all. Do not attempt to make room for the dinner plates when serving food. Merely drop the plate in front of the guest so it bangs into their wine or beer glasses and hopefully spills some on their pathetic wanna-be hipster outfits. Do not apologize. Turn and walk away confidently and return to what you were doing (texting, chatting, staring at a cute boy/girl are all acceptable work activities).
  6. Checking Back: Do not ever under any circumstances return to the table to see if there’s anything else the guest may need, like another glass of wine, a beer, another napkin, or some more ketchup for their burgers and fries. Ignore all eye contact with guests at all times!
  7. Dropping the Check: When you drop the check, if the table looks disgusted, you’ve done a stellar job! Wait at least 10 minutes before dropping the check. Hopefully you’ve added wrong or perhaps mistakenly charged them for an extra beer or something and they won’t notice. Do not tell tables that we only take American Express until they've been waiting with their Visa or MasterCard for some time. Only then will you inform them of our exclusive Amex policy.

Now you can give the table a bit smile big and say, Thank you! That will insure a great tip for your wonderful service. Bon Chance!

Bar Tabac is located at 128 Smith Street, corner of Dean. I'd suggest that you do not ever eat here.

The Strong Buzz is a blog for people who love food, who live for hot new restaurants, priceless dives, and old school classics alike, and who make it their business to keep their fingers on the pulse of New York City’s dynamic world of dining. In short, The Strong Buzz is made for you. (Yes, you!) SO GET TO IT. READ IT AND EAT!
>> read more


To learn more about what you can do now, please contact Charles D. Dorn, CCM at charles@thedorngroup.com or via phone at (914) 921-3150. Dorn believes growth and change are a necessity. See how he can help you and your business move to the next level.

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About the author:
Charles D. Dorn, CCM and The Dorn Group, Ltd. aid hospitality businesses in discovering and implementing new strategies to develop their business. Are you looking into taking your business to the next level? Contact The Dorn Group by calling 914-921-3150 or emailing hospitality@thedorngroup.com. Discover and implement new avenues to help your hospitality business flourish.

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