Profit Tip: How Gift Certificates Can Provide More Holiday Cheer

Article Courtesy of RestaurantOwner.com

Tri-State Area's Premier Digital Dining POS Provider

In the next 30 days or so we'll be getting into the hottest selling time of the year for restaurant gift certificates and gift cards.

Restaurants that sell gift certificates see several benefits, most notable of which is the immediate bump in cash flow. One of our members, whose restaurant opened last October, said he raised over $70,000 selling gift certificates during the holiday season, enough cash to pay off the balance of his opening costs.

Whether it's re-loadable gift cards or printed certificates, operators are finding creative ways to promote their sales

including point of sale marketing at the counter, on table tents, their website and even by displaying promotional material in the restrooms. Some restaurants also provide incentives for servers to sell gift cards and certificates to their guests.

Value added promotions, such as buy a $25 gift certificate for $20, or get a $25 certificate free with purchase of a $100 certificate, are well received by guests looking to find a welcome gift at a bargain price. Considering that gift certificate redemption rates average around 80-85%, the cost of printing and promotion is usually offset by the savings of those that are never redeemed.

Another advantage to operators is that most guests will spend more than the value of the gift card, resulting in higher check averages and increased sales. Add that to the fact that most gift certificate users are accompanied by full paying guests.

If you don't presently offer gift certificates, now would be a good time to reconsider. If you do sell them, start planning soon about ways you can promote them, making for more holiday cheer for all.

How Important are Your Guests?

Profit Tip of the Week courtesy of restaurantowner.com

The Tri-State Area's Premier Digital Dining POS Provider

You know this but how long has it been since you reminded your staff just how important your guests are?

OUR GUEST

 1. Our guest is the most important person in our business.

 2. Our guests are not dependent on us. We are dependent on them.

 3. Our guests are not an interruption of our work. They are the purpose of it.

 4. Our guests do us a favor when they come in. We are not doing them a favor by waiting on them.

 5. Our guests are parts of our business -- not outsiders.

 6. Our guests are not just money in the cash register. They are human beings with feelings, just like us.

 7. Our guests are people who come to us with their needs and wants. It is our job to fill them.

 8. Our guests deserve the most courteous attention we can give them. They are the lifeblood of this and every business. They make it possible for each of us to receive a pay check.

 9. Without our guests we would have to close the doors of our restaurant.

 . . DON'T LET ANYONE ON YOUR STAFF FORGET THIS.

New Federal Legislation Impacts Expiration Dates and Fees for Gift Cards

Featured in Nation's Restaurant News by Lisa Jennings

Tri-State Area's Premier Digital Dining Provider

New rules involving the sale of pre-paid gift cards and incentive offers, including limitations on expiration dates and dormancy fees, went into effect Sunday as a result of federal legislation adopted earlier this year.

The legislation, which affects gift cards sold or issued on or after Aug. 22, is designed to address concerns raised in recent years by consumers, who are increasingly buying gift cards.

For the first half of 2010, the number of restaurant gift cards sold rose 12.4 percent over the same period last year in the quick-service segment alone, according to a study by Atlanta-based First Data Corp., an electronic commerce and payment processor. At casual-dining restaurants, gift card sales increased 6.1 percent for the first half of the year. The sale of gift cards overall, including those offered by retailers, rose 2.7 percent.

Under the new rules, gift cards must be good for at least five years from the purchase date. Any money later added to the card must also be good for at least five years, said David Koenig, director of tax and profitability for the National Restaurant Association.

In addition, consumers may be able to use the unspent money on a card even after it expires. If the card expires in five years, for example, but the money left on the card doesn’t expire for seven years, consumers can request a replacement card at no cost.

The new rules also place limits on fees for dormancy or inactivity, as well as usage or maintenance fees. Generally, fees can be charged if the card has been inactive for at least 12 months, for example, but a fee can be charged only once per month after that. Restaurants are allowed to charge fees for replacing a lost or stolen card.

Restaurant companies must disclose the card fees and expiration dates clearly on the card or packaging, though Koenig said the rules do not specify how such disclosures must be made.

Rebekka Rea, associate director of the Retail Gift Card Association in Oklahoma City, said the new rules are not likely to have much of an impact on the gift card industry as most retailers and restaurants have long eliminated expiration dates and dormancy fees.

“Our industry has already been self-regulated to be more consumer friendly,” Rea said.

The Retail Gift Card Association, which represents about 33 companies and 60 brands — including major restaurant companies such as Subway, Dunkin' Brands, Darden and Brinker International — asks members to abide by a code that includes limiting fees and eliminating expiration dates, she said.

“The biggest impact for restaurants will be the way gift cards are packaged,” Rea said. “They need to be sure the terms and conditions are clearly visible, and we would recommend that they also be stated on their websites.”

The new rules do not apply to some reloadable pre-paid cards that are not intended or marketed as gifts, said attorney Amy Pierce with Pillsbury Winthrop Shaw Pittman in Sacramento, Calif.

Chain operators have to be careful, however, because if any location markets the card as a gift — even a picture of a bow on the card could be a problem — the entire chain’s cards would lose the exemption and must comply with the new rules, Pierce said.

Also not covered are cards given as a reward or part of a promotion, Koenig said. For example, a $15 gift card given by a restaurant if consumers purchase $100 or more may have fees and an expiration date of one year, rather than five. Regardless, however, restaurants must clearly disclose the terms, he said.

Also excluded are cards that might offer a free meal or a percentage off the next visit — so long as they do not mention a specific value.

Pierce said restaurant operators must also be careful to comply with state laws regarding gift cards, as the federal rules do not pre-empt local requirements, so long as the state requirements are more protective of consumers.

In California, for example, gift cards can’t have expiration dates, but cards are exempt when no money has been exchanged, such as for a loyalty or reward card. So retailers can set an expiration date on such cards, but, according to state law, it must be printed in all caps in 10-point font on the card, Pierce said.

“The devil’s in the details,” she said.

7 WAYS TO JUICE UP BEVERAGE SALES

Featured in Restaurant Hospitality

Tri-State Area's Premier Digital Dining Business Partner

Your waitstaff carries a lot of weight when it comes to your beverage business, according to a new report from Technomic. Nearly one quarter (23 percent) of consumers in a recent online survey say they would consider ordering a beverage they had not tried before if the server recommended it. Heavy consumers of beverages were most likely to be swayed by a suggestion, with 30 percent acknowledging that a server’s plug for a drink would influence them.

“This likely indicates that these consumers are more open to trying new beverages overall and suggests that operators may be able to use server recommendations to market new, limited-time offers or seasonal beverages toward this group,” says Darren Tristano, executive v.p. at Technomic.

The findings are included in Technomic’s new Beverage Consumer Trend Report, which looks at more than two dozen beverage types, including soft drinks; coffee beverages; bottled water; sports, energy and fusion drinks; lemonade; tea; smoothies; and more. The report contains menu, consumer and competitive insights and looks at current and emerging menu trends and consumer consumption behavior, purchasing decisions, attitudes and preferences for beverages.

Tristano suggests these strategies to spur liquid refreshment sales:

1. Consider investing in a separate nonalcoholic/adult beverage menu and table tents to promote limited-time only seasonal beverages and signature items.

2. Servers should always take a beverage order separately from the food order to create an additional point of choice.

3. Pointing out limited-time only seasonal drinks and signature beverages, which can promote impulse buying behavior.

4. When taking adult food orders, servers should recommend adult beverages that pair well with their entrée.

5. For teenagers, nonalcoholic (and potentially high-profit) mocktails provide an opportunity to feel more like a grownup.

6. Innovative options could be suggested to younger consumers, who show a greater interest in new and unique beverages.

7. Finally, servers should be diligent in recommending coffee, tea or specialty beverages that can be served with desserts.

Overall, Tristano adds, servers should be educated in understanding the varying interests and needs of consumers age groups in offering specialty, adult, traditional and energy drinks.

And if you’re wondering whether the economy has affected alcoholic beverage sales, you’ll be happy to know that the latest Gallup poll says 67 percent of U.S. adults now drink them—a 25-year high. 

To Serve is To Rule in ANY Economy

Featured in RunningRestaurants.com by Laurie Brown

When the economy declines, many companies suffer and some even go out of business. It's not just that people are buying less, it's that their buying habits are changing. I don't know about you, but when money gets tight, I get choosier about where I spend my money. I want not ONLY a great product - I want exceptional customer service too.

It is critically important to up your game when the market is tight. Businesses that have learned to thrive in tough economic times are worth looking at and learning from.

Why is Beau Jacks (a suburban Detroit restaurant) doing so well? What keeps their customers coming back three or four nights a week — even in the midst of Detroit's depressed times? Why are customers willing to stand in line or wait at the bar for long periods of time? The reason is magic – and that magic is the owner, Gary Cochran, and his take on running his business the right way.

Don't do traditional advertising
Cochran doesn't buy traditional advertising. He puts his money into supporting his loyal customers' causes. When his customers ask him to buy ads in yearbooks, pay for sponsorships, or support charitable golf outings, he does it. He says, "I do my advertising with the people who eat with me." How are your potential customers finding out about you?

Keep your staff pumped up
Cochran created a weekly newsletter for his employees. It includes a motivational quote — intended to keep his people thinking positively — at the bottom of every issue. He tells them, "We don't have to take part in this recession if the food and service is great." What are you doing to inspire your staff on a weekly basis?

Have high standards
Cochran makes sure that his parking lot is repaved and painted every year whether it needs it or not. He has an iron and ironing board available outside of the staff's dressing room to help everyone look impeccable. He believes that good is not good enough, and says to his customer's, "I don't want you to pay for good, you pay for great." Paying attention to details can make all the difference.

Treat your customers like members of a private club
Cochran encourages his staff to learn customers' names and preferences. "I always tell my staff that if they worked in a country club, they would remember their customers' names and that they like five olives in their martinis." He also provides his staff with business cards that they give out when they hand their customer the bill. He encourages the staff to tell the customers, "Ask for me next time you come in." How many customers are asking for you?

Treat special needs customers differently
Even though Cochran's customers may be willing to wait up to 45 minutes to be seated, he understands that it can be a hardship. When a customer is using a walker, he tries to seat that customer sooner. If customers have small children with them, the wait staff may place an order for chicken strips (on the house) so that there is food for the kids the minute the family sits down. "One size fits all" is a completely out-dated concept. Don't be afraid to cater to the special needs of your customers. They will love you for it.

Don't ask your employees to do anything you wouldn't do
Cochran hasn't had a day off in the last 18 months. He can often be found with a coffee pot in his hand, bussing tables, or picking up a dropped napkin. He treats his staff so well that he has kept many of his employees for decades. His newest employee has been with him for six years.

Are you a servant leader? Do you model the kind of behavior that you want your employees to emulate? Don't be afraid to do what has to be done. It will inspire your employees and your customers.

Empower your employees
Cochran's servers know that if they are overwhelmed with customers and are unable to provide great service, they can buy the customer a dessert with apologies. If there is a problem with food, they know that they can go to the chef or a manager and get the issue resolved. Are your employees empowered to solve the problems that occur in your workplace?

Even in the hardest times, focusing on exceptional customer service can make your business virtually recession-proof. Pick one tip and try it for two weeks. Then add another. Be patient and stay focused. Truly great customer service is a differentiating factor that can't be beat.

4 Ways to Beat Your Restaurant Competition

1. Know Your Enemy
In the ancient words of author Sun Tzu ("The Art of War") , you must "Know your enemy as you know yourself and you can fight a hundred battles with no danger of defeat."

In today's world I hope you look upon your competition in a friendlier light then Tzu did but the message still holds true. It is extremely important to know the details of your competitors.

Go eat at their establishments and find out for yourself how their food tastes, what their service standards are and what their marketing message is. My advice, make sure your food is as good and your service is better.

2. Market Your Specialty
Once you know everything about your competition you can identify what it is you offer that is unique or special. So what do you do if you don't have anything that makes you unique or special...you get it! When a guest asks their waiter "what makes this restaurant special", or "what's your specialty here", they need something to talk about.

Once that specialty is defined you can build your marketing message and spread the word with the help of your service team (who are really your salespeople).

3. Tune in Your Customers
If you want to be competitive you have to give your guests what they want while keeping in mind their wants may change quickly. Of course we all know they want great service but there are other things as well.

For instance, if a large percentage of your lunch comes from a business that just implemented a strict lunch hour you need to make sure your staff understands that those guests need to get in and out in under 1 hour. If you are noticing people aren't ordering as much chicken because of the bird-flu scare then run beef specials.

If you really want to know what your customers want, ask. Say something like this: If you could wave a magic wand and change one thing about my restaurant what would it be?

4. Touch Your Guests
In any business, complacency is the enemy. If the owner, general manager and service team aren't continually working the floor, thanking the guests for their business and asking them to come back, you can be sure your competitors are. People like to eat out at places where they feel welcome, special and important. So make this a top priority in your restaurant.

Setting up an ongoing marketing program that "touches" your customers is a great tool to build your business as well.

The Real Value of Tableside Handheld Ordering

Posted in Hospitality Technology by Brian Vick, Owner of Brian's Cheesesteaks



The on-going goal of improving both profitability and customer return visits is constantly on the minds of restaurant owners and mangers. While numerous articles and opinions have focused on how to use loyalty programs, aggressive (and smartly applied) promotions, and advertising through social media, these are not the only strategies that operators need follow in the pursuit of their goals. Handheld wireless ordering, which has remained under the radar as a way to realize tremendous costs savings and increased profitability for some time, is rapidly coming to the forefront as more proprietors recognize the value of such devices. What's more, new, low-cost technologies like Apple's iPod touch and iPhone, are putting handhelds in an even brighter spotlight.

Six Benefits of Handheld Ordering
The first improvement realized was a decrease in the average amount of time a ticket was open (from order until delivery) at the table by a little over 40%. Servers no longer had to waste time walking to and from the point of sale (POS) station, wait to place the order due to being stopped by customers at a another table, or stand in line if another server was using the POS station to place their own order.

The second and third improvements that resulted were directly related to the decrease in the open ticket time. Speedier service led to increased table turns, and perhaps more importantly, a greater average check amount. Why? Customers now had time for dessert which was additional revenue that went right to the bottom line. Restaurants are able to seat more customers during the day and generate a 10% revenue increase at the same time.

The fourth improvement came in the form of improved customer service levels. Not only did customers' meals arrive more quickly, but they knew that as soon as they told the server what they wanted, the order was off to the kitchen. That helped drive more repeat business. Believe it or not, customers pay attention to how long it takes their server to place their order after leaving the table. Since the order was placed instantly, servers simply moved on to the next table to make sure everything was all right, take the next order or up-sell that dessert.

A fifth improvement was a dramatic reduction in order errors. The kitchen no longer had to decipher hand-written tickets and eliminated the precious time spent recalling the server to clarify an order. That not only improved customer service and speed-of-order-delivery even more, but it directly took out cost and waste from orders read incorrectly and the resulting remakes.

A final benefit is that environmentally conscientious proprietors can "go green." It may seem trivial, but using handhelds significantly reduced power consumption. Even the most efficient POS terminals use a lot of electricity, but handhelds use only a fraction of that.

New Technologies Come Into Play
Today, handheld POS ordering and payment solutions have moved toward low-cost, easy to use and intuitive devices such as an iPod touch. This is dramatically changing the attitude toward tableside ordering and payment. The iPod and iPhone interface is well known to today's generation of servers, and some input methods, such as using abbreviations, is as easy as texting without requiring servers to drill up and down through endless order entry screens. In addition, many servers already have these devices so there is virtually no additional cost as they simply download the POS app.

With PCI Compliance and the ever-present threat of customer's credit card information being "skimmed," pay-at-the-table will soon come to the front and center as customers are more reluctant to let their credit card leave their sight.

The proven benefits of handhelds, along with the changes in technology, have put tableside ordering and payment more into the spotlight than ever before.

Sign Up to Find Out "How To Select A POS System For Your Restaurant" Webinar

As a leader in your organization, you’re expected to make smart business decisions to stay ahead of your competition. Your team looks to you for strategy, ideas, and leadership.

We know it’s not easy to stay on top of emerging technologies and new business strategies. There never seems to be enough time in the day to learn what strategies the elite restaurant and hospitality organizations are implementing to thrive in this challenging economy.

Join us on August 5 for our Thought Leader webinar series as we present, How To Select A POS System For Your Restaurant

You’re an expert in the restaurant and food service business, but do you know how to select a Point of Sale (POS) system that fits your business today and will grow with your business in the future?

In this webinar, you’ll learn:

The differences between a general POS system and restaurant POS system

How certain technologies can speed up service

Which POS features are must-haves for restaurant owners

How to select a POS system that fits your business today and will grow with you in the future

When you stop learning, you stop growing. Register Now >>

9 Ways Restaurants Can Use Facebook

Should your restaurant be on Facebook? Well, Facebook has over 400 million users, and it claims that 50% of its active users log in at least once per day. It’s a great way to promote your restaurant and its going on and best of all, it’s free. So the question is really why you wouldn’t be on Facebook. To help get you started or to help you get the most out of your restaurant’s current Facebook page, we bring you 9 ways restaurants can use Facebook.

1.Create a Facebook Page
This one seems obvious. Creating a Facebook page is simple: Just sign up and fill out the basic information about your business. Click here to sign your restaurant up for its own business page. You can also designate yourself as a local restaurant under the “Local” option. Many smaller restaurants have abandoned their own website in favor of their Facebook page. Some restaurants have both and link them together.

2.Use Updates to Convert Fans to Your Marketing Goals
Posting simple status updates about your business — or really, anything you think is relevant — will be seen by users in their homepage news feeds. This is a great way to keep your “fans” updated with your goings on as well as to stay top of mind when your fans are thinking about dining out.

3.Interact with Your Fans as Much as Possible
When a customer approaches you in real life to tell you what they think of your business, you’ll listen. So why not on Facebook? You might hear some useful criticism, or some timely compliments. Also, when you respond, you’re more likely to get them to respond — this additional activity further increases the chance your fans’ friends will see and learn about you.

4.Create and promote events online and offline
Let people know about a special Mother’s Day brunch or a regular Friday Happy Hour by sending invitations and ask people to RSVP on Facebook. This can be a great way to increase viral marketing as information about Facebook Events travels through news feeds from your network of friends and family outwards to create a greater social media footprint.

5.Use Multimedia to Show Off your Food and Dining Experiences
Photos and videos say a lot about food, if not the overall style of your establishment. Make sure to let your fans see what you offer by posting your latest or most prized dishes. Also, photos and videos of events and happy hours can be great PR.

6.Integrate Your Page with Other Marketing Efforts
Are you also running some sort of contest or special on another site? Make sure your Facebook fans know about it. Integrate all your marketing channels. The more touch points you have with your customers and potential customers the better chance of success you have.

7.Use Existing Applications to Promote Your Story
Polls, quizzes and other types of applications are readily available within the admin section for page owners, and they just take a few clicks to install. Start off modestly, try a few, and see what works.

8.Make your Page engaging with applications
Show your restaurant’s great ratings by displaying the Zagat application or add a reservations widget through Open Table on your main page; display a video of the chefs making the house’s special; allow users to click through an interactive menu. The possibilities are endless.

9.Create an App Just for Facebook Fans
A little more advanced and this is for restaurants with larger marketing budgets, but it’s worth exploring whether or not an app would make sense for your users.

Are You Ready for IRS Audits?

Over the past several years, the IRS examination of small businesses, which it defines as those with assets less than $10 million, has significantly increased. In fact, a recent report by Syracuse University’s Transactional Records Access Clearinghouse (“TRAC”) shows that IRS audits of small businesses has increased by 30% over the last five years. Surprisingly, that same report showed that the audit of large businesses, defined as those with assets greater than $250 million, have actually decreased by 33% over the last five years. With this increase in IRS scrutiny, small businesses must be ever mindful of maintaining internal controls and excellent books and records to support their tax filings.

In its review of total revenues, the IRS will often begin by comparing daily POS system information and the related bank deposits. This procedure should provide the examiner adequate comfort that revenues have been properly recorded. However, if the examiner has difficulty using this procedure to tie out total revenues, other indirect methods may be used to estimate food sales.

Those techniques may include, for instance, ingredient mark-up calculation: The IRS agent may test the restaurant’s reported pizza sales, for example, by reference to the amount of ingredients, such as flour, cheese and sauce, purchased during the year. The agent would also need specific pizza recipe information, such as the amount of ounces of flour, cheese and sauce that are used in making a large cheese pizza. Based on this information, the examiner may attempt to approximate the number of pizzas sold during the year, and estimate the total revenues from pizza sales accordingly.

As you can imagine, each of these methods can result in an unreliable estimation of total revenues by the IRS examiner. For example, factors such as food spoilage are often not considered within these calculations. As a result, such indirect methods of estimating revenues could lead to a proposed adjustment by the IRS examiner, and additional income taxes assessed. Unfortunately, such an assessment could have possibly been avoided if the restaurant owner had maintained a more reliable set of records to support its sales activities.

For larger restaurants that tend to have more internal controls in place, an IRS agent may be able to verify total revenues without having to use any indirect methods in the process. In that situation, the agent may focus more on the deductions and income tax incentives claimed, including:

Costs of intangible items: There are many intangible costs unique to the restaurant industry, such as franchise costs and liquor license costs, which must be spread over 15 years, even though the useful period of such costs may be considerably less. Restaurants that either immediately deduct such costs or amortize them over shorter periods may find themselves with disallowed tax deductions upon examination.

Employment related tax credits: Restaurants are eligible for several tax incentives related to its workforce, most commonly including the Work Opportunity Tax Credit (WOTC) and the FICA Tip Tax Credit. Since recent legislation has made these credits even more beneficial for restaurant owners, IRS agents approach these credits with even greater scrutiny. Accordingly, restaurants should be certain to properly maintain the related documentation, including certified employment forms, that are often required to claim such credits.

The overall IRS examination rate for small and mid-size businesses is still relatively low, even considering the recent increases. However, restaurant owners should remain focused on maintaining proper internal controls and reliable books and records. Doing so will not only make an IRS examination less painful, but will allow the restaurant to maximize its long-term profitability and growth.

Every Restaurateurs Number 1 Priority Should Be Backing Up the POS Server

You are the owner or manager of a restaurant. You come into your store on Monday and the computers are missing. You were robbed.

You are a student and just completed your history term paper. You turn on your printer and a power surge fries your computer. It won't turn on.

You have over 2,500 baby pictures of your newly born child (now 3 months old). You boot your computer and get a blue screen.

You spent three weeks getting your checkbook up to date, turn on your computer and get a virus notification. You can no longer get to your checkbook.

You illegally downloaded over 10,000 songs from Lime Wire and your computer hard drive no longer spins.

No matter what you use your computer for, just imagine what will be lost should your computer be gone (lost, stolen, fried, or just plain broken). You have just lost all of your important data, files, photos, music or whatever else you may have stored on your computer.

Backing up your POS server is YOUR responsibility. If you are the owner or manager of a restaurant, you need to know how your POS server gets backed up. You also need a written plan to get your business up and running due to the loss of one or more of your POS terminals via computer failure or theft.

Understand, a broken or stolen computer can be replaced. The inventory, other data, photos, music, and other lost items can never be replaced. That's why, you need to make sure you backup all of your data.

The way you back up your data depends on the importance of the data.

If you own or manage a restaurant, you may want to backup your data on a daily basis. Should you lose your data, you will only be losing one day's worth of data which may not be catastrophic.

Profit Tip: How Do I Handle Separate Checks

If You Dread Hearing "SEPARATE CHECKS PLEASE"

Many servers cringe inside when they hear the request for 'separate checks.' It can add several extra steps to the settlement process, takes more time and can leave guests frustrated, especially when they're in a hurry to leave.

Most operators wouldn't think of refusing separate check requests so here are some ways to help servers better deal with them.

Train servers to tactfully ask, when appropriate, up front, who is on what check. Don't wait until the end of the meal to find out when it will take more time to separate the tabs. Most POS systems will allow entering separate tabs and can assign them all to the same table.

If you use a cash register, servers can write checks separately and record the entire order on one of the kitchen copies or write the table number boldly on both copies.

Identifying separate checks and creating separate tabs at the beginning of the meal can definitely help speed settlement but another factor to keep in mind is how many POS and credit card terminals you have. Regardless of how you process separate checks you run the risk of gaining a reputation for slow service if you don't have enough.

A reliable rule of thumb is to have one terminal for every 4 to 5 servers on the floor. Anything less may result in bottlenecks and slow downs at the POS terminals when it's busy.

Separate check requests aren't going to go away. A few adjustments could help your servers deal with them much more efficiently.

6 Common Dining Room Floor Plan Mistakes

Did you know that people sitting at a good table will purchase 15% more than people sitting at a bad table.

People sitting in a booth will buy more than people sitting at any other type of table.

Stephani Robson is a Ph.D. and an expert in consumer seating behavior. She's also the author of Seating Charts That Work (6 Common Dining Room Floor Plan Mistakes and How to Avoid Them) that appears in the July 2010 issue of Restaurant Startup & Growth.

Dining Room Mistake No. 1. Having the Wrong Table Mix.
Many restaurants have too many tables for four ("four-tops) because it allows you to seat parties of one, two, three or four at any of these tables. If your restaurant is quiet, it doesn't matter. In a busy restaurant, you are wasting 50% of your space when you seat a party of two at a table for four. Analyze your restaurant statistics. What proportion of your guests are deuces? Do you need more tables for your parties of two? If you have too many deuces, you can easily combine two of these tables and make it suitable for a party of four. You can't divide a table designed for four people in half.

Dining Room Mistake No. 2. Putting Your Two-Tops in the Wrong Place.
In almost every case, guests strongly prefer to sit with at least one side of their table "anchored" by walls or other impermeable structures, especially when they are in a party of two. So put your deuces along walls or partitions, next to some kind of design element that helps your guests define their personal space.

A bad idea is to place deuces down the center of the dining room.

Dining Room Mistake No. 3. Ignoring Breezes and Blasts.
A cold, wind-blown guest is a miserable guest. It is not going to help your guests stay longer and buy more.

Dining Room Mistake No. 4. Forcing Guests to See What They Don't Want to See.
Guests want to see four things when they dine at your restaurant: What's on the table in front of them, the people they are dining with, the view (if you have one), and at least some of the rest of the dining room. People feel more comfortable when they have some idea of what is happening in the space around them, so don't make booth backs too high. Guests don't want to see things like wait stations, restroom doors and storage areas.

Dining Room Mistake No. 5. Keeping Staff From Seeing What They Need To See.
Great servers always know what needs to be done on their tables. Having partitions, high walls, and odd configurations make it more difficult for a server to properly serve their tables.

Dining Room Mistake No. 6. Hobbling Your Staff With Bad Service Area Design.
In many restaurants, service areas aren't so much designed as plopped into the dining room almost as an afterthought. Staff may have to walk too far to get an extra fork or refill water or coffee. Put your service areas no father than 25 feet from any table. As a rule of thumb, no table should be more than 60 feet from the food pickup area.

Tips on Selecting the Best Restaurant Lease Term (or Length)

The term (or length) of your restaurant commercial lease is an important part of your business plan and ensuing lease negotiations. However, most restaurant tenants do not take enough time to consider that one day they will eventually want to sell the restaurant. Alternatively, they may want to expand/downsize, relocate or close and so do not give the term of the lease the attention and consideration it truly deserves.

The industry standard lease term for a restaurant tenant can be either five, seven or 10 years, but often not shorter). We all know how restaurants are expensive to set up and, therefore, a 10-year amortization period is normally required on the initial term to justify that initial capital investment cost. Another point of consideration is that many restaurateurs can gain certain tax advantages by entering into consecutive shorter lease terms (for example, an initial term of four years followed by two renewals - of one and five years - and pre-exercised for a continual 10-year term). Your accountant can best explain this for you, but this effectively serves the same purpose for the restaurant tenant and the landlord, while benefitting the restaurant tenant.

Lease renewal options represent part of the overall term of the lease agreement and therefore should be negotiated at this time as well. The renewal option term is defined as the period of time which follows the initial lease term. This longer term protects the tenant so that the landlord cannot either take the space back or offer it to another tenant. Renewal options can benefit the restaurant tenant and, therefore, one to two five-year renewal option periods are common place if the landlord will agree to this.

In the real world, 10-year restaurant leases are attractive to both the landlords and the brokers who represent them. The landlord is assured of a long-term tenant while the broker, who works for the landlord, earns a commission for the term of the lease agreement. The longer the term you sign for, the more commission a broker is likely to earn. Overall, this should give the tenant increased negotiating power since the landlord is gaining the security of a 10-year term and the landlord's broker is earning up to twice the commission he/she would normally have expected from signing a five-year tenant.

Suppose you come to the end of your initial lease term and you do not have a new agreement, renewal or extension agreement in place. You will enter into what is called the overholding/holding over period. In itself, the overholding period is not a problem; however, many lease agreements contain a clause that states the restaurant tenant's rent will substantially increase during the overholding period. I have reviewed leases with built-in increases of up to 300 per cent for the overholding period. A 50 to 100 per cent increase is the industry standard. Why does the landlord charge so much? The landlord wants certainty. This is the landlord's way of preventing you from sitting back, stalling or remaining uncommitted about signing a renewal or going month-to-month.

If you wish to sell your restaurant business before your lease ends - for instance, during year four of a five-year term - the renewal option and terms will be critical to the purchaser. It is absolutely essential that the buyer be approved by the landlord and the option is transferrable to him/her (and not personal to you).

You should also know that the lease renewal term does not need to be made in five-year increments. A restaurant tenant can renew his/her lease agreement for any length of time the landlord will agree to. Alternatively, a right of termination could be negotiated if you need flexibility in the term. A right of termination is a special clause in the lease agreement which gives the tenant the right to cancel the lease. This is a one-time event … if things are not going well for you into a five-year lease renewal term, you can negotiate to leave earlier at 24 months.

Making Your Restaurant Website Sell For You

Does your restaurant's web site sell for you? If your site is like most then the answer is probably not. It's an opportunity that the large majority of independent restaurants are not taking advantage of. Let's look at some ways that your restaurant's site can go beyond the basics to help boost your sales and profits by capturing revenue that may currently be going elsewhere.

Online Ordering
This is a true growth category and area of opportunity. The large chains are getting into online take-out ordering in a big way. Independents need to get in on the action. Families are looking for better (i.e. not fast food) take-out options that are easy, flexible and familiar. This is a 20% to 30% sales growth opportunity waiting to happen for your restaurant.

Taking Reservations Online
One rule of business is "make it easy for your customers to do business with you". This certainly applies to online reservation systems. For customers, online reservation taking offers a speedy, around the clock option for making dinner plans. There is a certain demographic that loves this feature. They are, for the most part, tech savvy, professionals with high levels of disposal income. Sounds like a good target audience, no?

Gift Cards
If your restaurant has a gift card or gift certificate program in place then you need to be promoting and selling your cards online. An easy to use secure order form can help your restaurant bump up its gift card sales to the next level. An online gift card option or even an instant gift certificate option meets the needs of the time crunched gift giver where an order can be completed in just a few minutes. Get this on your web site and promote it. This is a no-brainer

Parties & Catering
Events, parties and catering are terrific profit centers for your business. Rarely, however, does a restaurant use its web site well to promote these offerings. Think about having full screen photos of your private rooms or facilities. Event menus and catering prices should be readily available, even if they are only samples. Floor plans with layouts and dimensions can easily be included. A virtual tour similar to a "house-for-sale" listing can easily be created. Let beautiful pictures and bountiful information do the selling for you.

Merchandise
As with gift cards if you have logo merchandise or other products that you sell in your restaurant then have them for sale on your web site as well. For most restaurants a basic e-commerce application is all that is needed. This is cheap and easy and almost any web hosting company or developer can help you get up and running fast.

Now Open
The truth is your restaurant's web site should be selling for you 24/7/365. Don't make the mistake of having your restaurant's web site be just a yellow page listing with your name, menu and phone number. Take advantage of all that the Internet has to offer by expanding your web site to include some of these interactive and e-commerce options as a way to increase your restaurant's bottom line.

Rules of Thumb for Beverage Costs: How's Your Restaurant Doing?

Although every restaurant is unique, industry rules of thumb can provide a valuable starting point for evaluating and understanding how your restaurant is performing.

While there will always be exceptions, here are a few beverage cost rules of thumb that we've found to be quite reliable over the years when working with operators who have collectively managed thousands of diverse restaurant operations.

Alcoholic beverage costs: Liquor, beer and wine costs will vary among restaurants due to a number of factors but here are typical costs in percentages:

* Liquor - 18 percent to 20 percent.

* Bar consumables - 4 percent to 5 percent as a percent of liquor sales (includes mixes, olives, cherries and other food products that are used or consumed exclusively at the bar).

* Bottled beer - 24 percent to 28 percent (assumes mainstream domestic beer, cost percent of specialty and imported bottled beer will generally be higher).

* Draft beer - 15 percent to 18 percent (assumes mainstream domestic beer, cost percent of specialty and imported draft beer will generally be higher).

* Wine - 35 percent to 45 percent (the cost percentages of wine can vary dramatically from restaurant to restaurant depending primarily on the type of wines served. Generally, the higher the price per bottle, the higher the cost percentage).

NOTE - All percentages above are the ratio of each item's cost divided by its sales, not total sales or total beverage sales.
For example, liquor cost percentages above are based on liquor costs divided by liquor sales. This applies to the non-alcoholic beverage costs discussed below as well.

Non-alcoholic beverage costs: Historically it has been standard industry practice to record non-alcoholic beverage sales and costs in Food Sales and Food Cost accounts. However, we've found that many operators are now breaking out non-alcoholic beverage sales and costs and report on them separately as "Soft Beverages."

* Soft drinks (post-mix) - 10 percent to 15 percent (another rule of thumb for soft drinks is to expect post-mix soda to cost a little more than a penny an ounce for the syrup and CO2).

* Regular coffee - 15 percent to 20 percent (assumes 8-ounce cup, some cream, sugar and about one free refill).

* Specialty coffee - 12 percent to 18 percent (assumes no free refills)

* Iced tea - 5 percent to 10 percent iced tea is the low food cost champ of all time. Cost of the tea can be less than a penny per glass. Biggest cost component in iced tea is usually the lemon slice.

FINAL POINT: While every restaurant is different, if your costs are running significantly higher than the averages above, it might be smart to investigate your pricing, beverage controls and the possibility of theft.

New York City Set to Serve Grades to Eateries

The city's Department of Health rolled out its final rules yesterday for a system that will require restaurants to post letter grades based on inspection scores beginning in late July.

Those in the restaurant industry were quick to voice disappointment. The rules didn't have significant changes from those posted in April despite vigorous opposition voiced at a public hearing last month.


A city chapter of a restaurant trade group is exploring a legal challenge and protest, said Robert Bookman, an attorney for the New York City chapter of the New York State Restaurant Association. "We're looking at all of our options," said Mr. Bookman.

Don't expect A's, B's and C's to spring up at all of the 24,000-plus affected eateries overnight. The Health Department said it will take about 14 months before the placards appear in every storefront and the first wave of letters will be A's because of the way the policy is designed.

Restaurants that receive a B or C can opt for a second inspection a few weeks later. After that inspection, those that contest their grades can install "grade pending" signs until the matter is resolved.

Restaurants that fail to post their letters will be fined; the Health Department is recommending a $1,000 fine.

The scores are based on an inspection cycle in which restaurants are inspected about once a year.

Health officials said they listened to concerns about nonfood violations being factored into their letter grades and took some of them out. But restaurant owners say the inspections are arbitrary and too many nonfood violations will still be counted.

Health Commissioner Thomas Farley said he didn't think restaurants with C's would necessarily lose business. "I actually think probably most people won't make their decision based upon a letter grade," he said. "But some of them will. And even a small percentage of them is enough to provide an economic incentive for restaurants to improve their practices."

Restaurants have said the system will put those with C's out of business. Dr. Farley said the industry has made similar dire predictions when the city banned smoking and required calorie postings in some restaurants.

Asked if he would eat in a C restaurant, Dr. Farley said, "You know, depending on the circumstances, I might."

But he added, "I certainly would prefer restaurants that have higher letter grades."

Digital Dining Recognized as a RSPA Certified Retail Technology Provider!

Retail Solutions Providers Association (RSPA) is an industry association dedicated to the retail technology industry. Their members include resellers, distributors, hardware manufacturers, software developers, consultants and service providers who bring retail technology solutions to the marketplace. RSPA has been in existence for over 60 years and is pleased to name Digital Dining/MenuSoft Systems as an RSPA Certified Retail Technology Provider.

Top 10 Reasons You Should Buy From an RSPA Certified Partner

10. You are assured that an RSPA certified reseller has integrity.

9. An RSPA certified reseller provides jobs for your community.

8. An RSPA certified reseller can service your equipment at 5pm on a Friday.

7. An RSPA certified reseller can guide you in your purchase decisions so your POS equipment supports the peripheral equipment that you need to interface in the present and in the future.

6. A certified RSPA reseller is qualified to consult with you about every aspect of your business that impacts the function of your POS system. Do you want to interface your security camera with your POS system? Why or why not?

5. Your RSPA reseller will guide your PCI compliance needs.

4. An RSPA certified reseller provides you what’s needed, not just what they have to sell, and shows you the way to increase profits by doing so.

3. An RSPA certified reseller will help you gain an edge over your competition by providing the products, services and support you need.

2. Your RSPA certified reseller can optimize your profits by showing you how to reduce waste,prevent employee theft, and create higher per-customer sales.

And The Number One Reason You Should Buy From an RSPA Certified Reseller
1. An RSPA certified reseller is your partner, not a one-time transaction. They want your business to be profitable just like you do, and can help you succeed.

46.4% of Restaurant Operators Looking Towards Wireless Tableside POS Solutions

When Hospitality Technology polled their readers on POS software purchasing plans, the POS Software Trends 2010 poll revealed that 46.4% of operators consider tableside POS for ordering and/or payment to be an interest for 2010. These sentiments were again reflected in the Restaurant Technology Study which indicated that there has been a significant increase in the percentage of companies using wireless handheld POS terminals in the period between 2009 (15.3%) and 2010 (27%). Sixty-three percent of respondents indicate that wireless POS terminals increase guest satisfaction, and 56% indicate that they increase guest credit card security. What's more, IHL's North American Hospitality POS Terminal Market Study identified that hospitality establishments are moving more and more toward wireless technologies, flagging this as a trend for the years ahead.

Our Client Cake & Shake Dessert Cart Makes Its Tasty Debut in Washington Square Park!

Cake & Shake opened its first dessert cart, on the northeast corner of Washington Square Park, with a concept that is oh-so-New York: high-end ingredients served in eco-friendly, portable packaging.

All the basic baking elements are organic, including the eggs, milk, sugar, butter and flour. The paper products are 100% recycled. The straws and cupcake wrappers are biodegradable.

Gina Ojile and Derek Hunt came up with the recipes for each $3 cupcake. The result? Chewy, moist and delicious snacks that go a leap and bound beyond run-of-the-mill.

The Cake & Shake cart will be in Washington Square Park from 9 a.m. to 9 p.m., seven days a week from here on out. Their second target is station outside the Metropolitan Museum of Art that should open in the coming months.

Read more: http://www.nydailynews.com/lifestyle/food/2010/05/27/2010-05-27_cake__shake_dessert_cart_makes_its_tasty_debut_in_washington_square_park.html?r=lifestyle/food#ixzz0p8lJSjz9

Arby's Utilizes Digital Dining for Immediate Cost Savings

RCNY Restaurants LLC, a New York City-based Arby's franchisee, is one of the most recent quick service restaurant owners to select the combined Digital Dining/DigitalPersona solution. RCNY discovered the addition of DigitalPersona fingerprint biometrics to their POS software provided immediate cost savings by preventing employees from clocking each other in and out and by eliminating unauthorized manager overrides at the register. The franchisee also realized that the Digital Dining/DigitalPersona solution helped to increase productivity by moving customers through order processes faster.

"With fingerprint biometrics, we have found a reliable way of preventing employees from clocking each other in and out that just wasn't possible before," says Raymond Chera, Franchisee, RCNY. "We are now able to hold our employees accountable for their time and the transactions they handle. The biometrically-enabled POS terminals are a key part of our strategy to reduce employee fraud and increase productivity at the till."

Leebro POS is a Digital Dining "Big 8" Dealer in 2009

Leebro POS was selected into the elite "Big 8" for Digital Dining. The Big 8 is an honor given by Digital Dining to the dealerships that ranked in the top 8 for new clients in a given year. Find out more about Digital Dining at www.leebropos.com