Operations

Vintage sale or lease sign in Minnesota
by David Klemt David Klemt No Comments

This is How You Win When Leasing

This is How You Win When Leasing

by David Klemt

Vintage sale or lease sign in Minnesota

At this year’s Bar & Restaurant Expo, the Invictus Hospitality team tackled a crucial step of any project: The lease.

Invictus (IH), friends of KRG Hospitality, know a thing or two when it comes to leasing a space. Principal Homan Taghdiri is a tenacious negotiator.

Case in point, an Invictus project in Orlando that opened during the pandemic. The space was owned by the city, which can certainly complicate matters. Taghdiri sunk his teeth in and refused to let go—for seven months. That’s crocodile or Komodo dragon patience.

The result? Favorable terms and massive cost savings.

Taghdiri presented “Understanding the Leasing Game & How to Get Ahead” at Bar & Restaurant Expo 2022. You know this show by its former name, Nightclub & Bar.

Knowing that when Taghdiri smells blood in the leasing water he’ll clamp down and death roll until he gets his way, I attended his session.

Before we dive in, know this: If we disagreed with the IH approach to leases, we wouldn’t share their tips. The information below would cost, as Taghdiri points out, about $2,000 coming from an attorney.

Of course, neither KRG Hospitality nor Invictus Hospitality is providing legal or financial advice in this article. I’m just passing along information, as IH was doing during their session.

Leasing Dos and Don’ts

If you take nothing else from this article and Taghdiri’s session, make it this tip: Do negotiate your lease.

“You have to negotiate your lease,” says Taghdiri. “It is a must.”

Not you should. Not you can. You must negotiate your lease. Neither of us can emphasize this enough.

In fact, it’s your right to do so. Which brings us to our first leasing don’t. Do not believe anyone who says you can’t negotiate a lease.

“Anyone who tells you that you can’t negotiate your lease is lying to you,” says Taghdiri.

And if they’re not lying, they just don’t know what they’re talking about. Either way, don’t listen to them. Walk or run away.

Also, do your due diligence. Knowing what you’re getting into before signing is on you. Taghdiri recommends you ask the following before signing anything:

  • What generation is the space? Is it brand-new? It’s first generation. Did the first tenant leave? It’s second-generation, and so on.
  • Is the space totally empty?
  • Does it have space allocated for gas, electric, etc.?

Ideally, you’ll find a second-, third- of fourth-generation bar or restaurant space. Why? They can provide massive cost savings to you.

Do fight for the terms that are important to you. These include amount of the lease, the length of the lease, and any incentives.

However, don’t over-negotiate your lease. Do put yourself in the landlord’s position. They’ve invested significant capital developing the space and they need an ROI. Pick your most important terms and negotiate them. You risk a landlord walking away from a deal if you negotiate every single item and make things difficult.

Lease Types

So, you’ve found your perfect space. Do you know which type of lease you want? Not certain which is right for you?

No problem, because Taghdiri broke them down during his session.

  • Standard. This is the easiest to explain because it doesn’t exist. A particular landlord may have “standard” lease, but their isn’t one that spans the industry.
  • Full service gross is the easiest of the actual leases. Everything is negotiated and clear in the lease, and you simply pay the agreed-upon amount.
  • Triple net is the opposite of the FSG lease. You pay your base rent. Then, your landlord passes on operational costs to you, which you also pay.
  • Percentage Rent. Basically, this is a hybrid lease. You pay base rent plus a percentage of sales. For example, you may pay natural breakpoint on top of base rent. This type of lease can be beneficial to newer businesses. However, some landlords do not like percentage rent leases.
  • Modified gross is, basically, any lease that isn’t an FSG. This is the most common lease, and it’s most easily explained as a modified FSG.

First-time operators or owners entering an unproven market will likely want to first focus on modified gross or percentage rent leases. However, FSGs are certainly attractive.

Length of Lease

Landing on a lease amount that you can live with is only part of the battle. Far too many people overlook the length of their lease, focusing too hard on the amount.

So, let’s take a look at some crucial factors you need to consider before signing anything.

  • Base Term. Let’s say you’ve invested several million dollars into your project. It’s sort of hard to imagine paying that investment off in two years, isn’t it? So, a two-year lease probably isn’t ideal. Give yourself the time you most reasonably need to open your doors and make money. Again, don’t focus solely on the amount of the lease.
  • Option Periods. Taghdiri explains term options thusly: “Jump into the pool safely before knowing what’s in it.” The real-world example is easy enough to understand. Agree to a three-year lease but bake one or two (or more, if you want or can) five-year renewal options into the agreement. Doing so means that you can trigger the renewal prior to the term’s conclusion. In other words, the landlord won’t be able to (easily) kick you out if you want to keep leasing the space. Just be aware that your landlord will likely also want to bake new terms into the agreement along with the renewal options.
  • Early Termination Rights. When it comes to this element, Taghdiri explains that this may be limited to longer-term (ten years or more) leases. Essentially, it’s what it sounds like. You should be confident in your concept before you even get to the lease stage. However, it’s not a bad idea to have an early exit plan in mind. So, you may be able to sign up for a long-term lease but bake in an 18- or a 24-month termination clause. Just remember that if you don’t exercise this agreed-upon right within the timeframe, you’ll be responsible for the original term of the agreement.

The Million-Dollar Question

You likely have a burning question searing itself into your brain right now. It’s a common question: “How much rent should I pay?”

There are a few ways to approach a satisfactory answer. The bullshit answer is, “Whatever you can afford for the space you really want.”

That’s the first step toward blowing a budget, blowing out already razor-thin margins, and skyrocketing costs.

One way to approach the how-much question is due diligence and comparables. What are the comps in your selected area? What are people paying in the neighborhood? What’s best for your business, and is that identified in your pro forma?

That said, Taghdiri did present a general lease amount rule. Try to keep your rent at 11 percent of gross sales, or less. Ten percent is even better, obviously. Anything less than that and you’re a master negotiator.

Image: Randy Laybourne on Unsplash

Apple iPad and Apple Pencil with calendar on screen
by David Klemt David Klemt No Comments

5 Reasons Why You Need a Calendar Audit

5 Reasons You Need to Conduct a Calendar Audit

by Jennifer Radkey

Apple iPad and Apple Pencil with calendar on screen

Keeping a hospitality business running smoothly takes an immense amount of organization, and at times you may feel pulled in a million directions at once.

As an operator of a restaurant or bar, your daily calendar may seem like an endless stream of tasks.

You are most likely already using some sort of organizational tool: an agenda, calendar, your phone, or Post-Its all over your office walls. But when was the last time you actually analyzed your calendar?

I’m going to challenge you to sit with your calendar and take a deep-dive audit of just how you are spending your time.

Here are the five reasons you need to do a calendar audit today.

You Aren’t Making Money or Reaching Goals

As the operator of your hospitality establishment, you are responsible for your business’ success. So, dissect your calendar.

What actions are you taking on a daily or weekly basis that directly lead to making money? What percentage of your time is spent on growing your business, rather than running your business? There is a difference.

You are Burnt Out

When you are not at your best, your business will not be at its best. It’s as simple as that.

How many daily operational tasks are you taking on that could be delegated to someone else? You don’t need to be involved in every aspect of the daily operations of your business.

Take a look at your calendar and highlight any tasks you have been doing that could easily be done by someone else on your team. Then, give those tasks away.

Team Morale is Low

Go back and audit your calendar.

When was the last time you scheduled a team meeting? How about individual meetings with employees to go over their successes, growth opportunities, etc.? Is there regular time delegated to improving your workplace culture?

Carve some time out for the people who choose to spend their days working for you, and watch team morale improve.

You Feel Stuck in a Rut

Maybe your business is doing well but has plateaued. Maybe you aren’t excited to go to work anymore. Take a close look at your calendar.

What have you done in the past week or month to create excitement? For example, did you attend any industry related shows or events?

As operators, it is easy to get stuck in a daily routine that doesn’t allow time for creativity. However, it is imperative to schedule time to be inspired.

Your Work/Life Balance is Off

The hours can be long, and with so much to do, you can often feel as if your entire life is your work. Take a close look at your calendar.

Are you scheduling in family time? Time for friends? Time for physical health? Hobbies? Fun?

This can be as simple as scheduling time for something you enjoy that changes up your week:

  • A 15-minute call with your mom every Monday morning.
  • Walking/biking to work twice a week.
  • Meeting up with a friend once a week for a coffee.

We often say that we will do these things. However, unless they are prioritized and written down they aren’t going to happen as much as we need them to.

Performing a calendar audit can be eye-opening and give us an entirely new perspective on how we are using our time. Doing so can help us improve time management, productivity, happiness, and goal achievement.

So, go ahead and mark some time for a calendar audit into your calendar. You will thank yourself later that you did.

Cheers to professional and personal well-being!

Image: Omar Al-Ghosson on Unsplash

Broadway-style McDonald's sign in Chicago, Illinois
by David Klemt David Klemt No Comments

A Lesson in Guest Perception

A Lesson in Guest Perception

by David Klemt

Broadway-style McDonald's sign in Chicago, Illinois

At this point, it’s becoming more of a surprise to not be told that the ice cream machine isn’t working at a McDonald’s restaurant.

Per a report from earlier this year, 25 percent of their machines are broken at any time. In fact, the brand made a joke about it in 2020.

Interestingly, with all the road trips and flights I’ve taken, I had never encountered a nonfunctional ice cream at a McDonald’s. Until last week.

Feeling nostalgic, I drove to a McDonald’s near my home for a Shamrock Shake. Growing up, my father always enjoyed the Shamrock Shake LTO. I’ve had maybe one or two in my entire life.

So, I drove over, got in line, and confidently asked for a Shamrock Shake and a Mint Oreo Shamrock McFlurry. And then I heard the words I’d never heard before:

“I’m so sorry, our machine isn’t working.”

Devastated, I did what any well-adjusted adult would do: I ordered a double cheeseburger and a 10-piece Chicken McNuggets combo. Same thing as a shake and McFlurry, right?

Guest Perception

I won’t dive too far into the minutiae of the longstanding McDonald’s ice cream machine saga. By now, we’re all familiar:

  • These machines break so often there’s a website dedicated to the problem. McBroken shows people where ice cream machines are working and where they’re broken. (If only I had used that before my ill-fated visit…)
  • The machines reportedly take four hours per day to clean.
  • There are claims that Taylor, the manufacturer of the machines, makes 25 percent of their revenue from performing repairs.
  • Outlets have reported the FTC is investigating the situatithe machine’s manufacturer, Taylor.
  • The latest news is that Kytch is suing McDonald’s for $900 million.

I’m not a McDonald’s board member, nor am I a franchisee. So, I’m not privy to any discussions swirling around the ice cream machines in use currently.

However, I do find it surprising that a brand as massive as McDonald’s would allow this issue to continue. For a brand that claims nothing is more important than delivering a high-standard of quality food, this joke is no longer funny.

What’s more, the issue is an opening for their competitors.

Leave an Opening and a Competitor will Take it

Jack in the Box has roasted McDonald’s for their ice cream machines in the past. This month, however, they’ve amped up their trolling.

Now that the Shamrock Shake has returned, Jack in the Box has pounced.

It would’ve been enough for Jack to mock McDonald’s on Twitter during Shamrock Shake season. But nope—Jack is dragging McDonald’s even harder.

Head over to McBroken and you’ll see a huge banner that reads, “DON’T GET McSHAMMED.” You’ll notice that the map is now also populated with Jack in the Box locations.

Click the aforementioned banner and you’ll find yourself on the Jack in the Box website. More specifically, it’s a page promoting their mobile app.

Taking it further, there’s currently a promotion encouraging the download: using the code “McSHAMMED” scores the user a $2 shake.

Since we’re in Shamrock Shake season, Jack is offering their new Oreo Cookie Mint Shake. And yes, it’s green.

Innovation and Problem Solving are Crucial

Look, I’m in no position to tell McDonald’s how to run their business. If they’re comfortable with negative guest perception and experiences, that’s on them.

It’s also on them if they want to show their guests and competitors a failure to innovate, solve problems, and be agile.

The ice cream machine debacle should be a lesson for all operators. Leave an opening and your competition will take it, slamming it shut behind them.

At best, maybe you’ll be able to adapt and overcome. At worst, they’ll be social media and marketing savvy, and roast you publicly. Once a brand’s perception slips, it can be incredibly difficult to get it back to where it once was.

As an operator, you’re an entrepreneur. Entrepreneurs innovate and solve problems.

Image: Joshua Austin on Unsplash

"What Now?" graffiti in black spray paint on wall
by David Klemt David Klemt No Comments

What Current CDC Guidelines Mean

What Current CDC Guidelines Mean for Restaurants and Bars

"What Now?" graffiti in black spray paint on wall

Less than two weeks ago, the U.S. Centers for Disease Control and Prevention once again updated the agency’s Covid-19 guidance.

For many in America the updates simply led to more confusion. Others see the changes to CDC guidance as another blow to the agency’s credibility.

The reality of the situation appears to be rather easy to understand. Business owners are most likely ignoring the CDC and just following state and local requirements.

And who can blame operators and their teams for doing so? After all, the guests they serve are likely more concerned about local guidelines than CDC guidance.

States Make First Moves

At this point, it appears the CDC is following rather than leading the way. Several states moved to rescind Covid-19 mandates around two weeks before the CDC changed its guidance.

For example, Nevada Governor Steve Sisolak lifted the state’s mask mandate on Thursday, February 10. Unlike in other states, the mandate was rescinded regardless of vaccination status.

Five days later, California lifted its indoor mask mandate for the vaccinated. The unvaccinated, as of February 16, are still required to mask indoors.

However, the requirement for businesses to check for proof of vaccination was also rescinded. Of course, businesses can still require masks and proof of vaccination if they so choose.

So, Now What?

The CDC and many state health officials are encouraging caution. Another surge in infections is expected.

In fact, the CDC points out that Covid-19 has not yet reached its endemic stage. Some predict the pandemic won’t become endemic until some time in 2023.

For now, the CDC is using three designations to identify different areas throughout the country: low risk, medium alert, and high alert.

Per the agency’s website, 90 percent of the US population is in a low-risk or medium-alert area. People can check their community’s current CDC designation via their new map here.

Low, Medium, High

The three CDC designations each carry specific guidance:

  • Low Risk: People should stay current with their vaccinations. If someone has symptoms, they should get tested.
  • Medium Alert: In addition to Low Risk guidance, people who at high risk of serious illness if infected should ask their healthcare providers if they should wear masks indoors and/or take other Covid-19 precautions.
  • High Alert: Wear a mask indoors, stay current with vaccinations, and get tested if symptoms are felt.

Endless CDC guidance revisions have mainly resulted in confusion and an unfortunate lack of faith in the agency. So, these recommendations really don’t mean much for operators.

Rather, business owners should make they’re in compliance with state and local requirements while taking steps to ensure workers, guests, and their community are safe.

Image: Tim Mossholder on Unsplash

Restaurant worker using SevenRooms on tablet
by David Klemt David Klemt No Comments

SevenRooms Kicks Off 2022 with Growth

SevenRooms Kicks Off 2022 with Growth

by David Klemt

Restaurant worker using SevenRooms on tablet

SevenRooms continues their growth by kicking off 2022 with the announcement of a new, crucial addition to the team.

Today, the hospitality technology company announces the hiring of Brent-Stig Kraus. Formerly the senior vice president of sales for ChowNow, Kraus will take on the role of chief revenue officer at SevenRooms.

As CRO, Kraus will play a crucial role in further accelerating SevenRooms’ impressive global growth. The company’s new CRO will accomplish this goal by identifying and pursuing partnership opportunities, targeting high-growth sales, and scaling sales globally.

Steady Growth

In March of last year, SevenRooms brought on Pamela Martinez as the company’s chief financial officer.

By September of 2021, the platform announced a multi-year partnership with TheFork. In particular, this was major news for operators throughout Europe and Australia. Additionally, this partnership illustrates how SevenRooms is pursuing long-term global growth.

A month later, in October of last year, the company entered into a partnership with Olo. In doing so, SevenRooms ensures clients who also use Olo can capture their off-premise customers’ information. That data then creates profiles for those customers automatically, meaning operators can learn more about and effectively market to customers who engage with them via online orders.

In December of 2021, SevenRooms and ThinkFoodGroup—the hospitality company behind Chef José Andrés’ portfolio of restaurants—announced their partnership. Interestingly, this partnership sees ThinkFoodGroup joining SevenRooms in an advisory role.

And it’s not just filling crucial C-suite roles and entering into partnerships that benefit operators and the industry that are examples of SevenRooms’ rapid growth.

Along with hiring Martinez as CFO, the platform launched Direct Delivery in March 2021. This online ordering solution helped operators eliminate third-party fees; retain control of guest data; and fulfill guest desire to order from restaurants directly and seamlessly.

Finally, the company ended 2021 by sharing their 2022 trend predictions.

Why this Matters

Tech innovations are crucial to the long-term future of the hospitality industry. Restaurateurs, bar owners, and hoteliers, were once wary of adopting new tech.

Now, they’re investing more to streamline operations; automate reservations, online ordering, and marketing campaigns; and improving customer and staff relationships.

However, without growth a platform eventually becomes outdated. When that happens, the investment made by an operator to include it in their tech stack becomes a burden and liability.

As SevenRooms continues their growth, they prove worthy of an operator’s support and investment. We continue to support SevenRooms—without receiving any compensation for doing so—in large part because of the platform’s growth.

In addition to their available tools, we’re always eager to see what they’ll release next to make life simpler for operators.

Image: SevenRooms

Full restaurant dining room at gastrolounge Rusted Crow in Detroit, Michigan
by David Klemt David Klemt No Comments

January 18 is National Day of Action

January 18 is National Day of Action to Save Restaurants

by David Klemt

Full restaurant dining room at gastrolounge Rusted Crow in Detroit, Michigan

Tomorrow, January 18, the Independent Restaurant Coalition is spearheading the National Day of Action to Save Restaurants.

The IRC is asking all hospitality professionals, vendors, guests and communities to participate.

In short, the time for asking nicely is over. On Tuesday, we must all demand that Congress actually put action to their professed support of the hospitality industry.

On Tuesday, the IRC will send out an email detailing how everyone can push for action on replenishing the RRF. So, click here to sign up for email updates from the coalition.

People can also follow them on Instagram for National Day of Action to Save Restaurants details.

A Dire Situation

According to an email sent out by the IRC (again, you should sign up), a significant number of restaurants and bars find themselves in dire situations.

Per IRC survey results:

  • more than one in four restaurants (28 percent) that didn’t receive RRF grants are facing eviction;
  • almost 50 percent are facing bankruptcy; and
  • close to 60 percent of restaurants are reporting sales drops of more than 50 percent during the surge in Omicron infections.

For context, let’s review how RRF grants helped some recipients survive:

  • Ten percent are facing eviction.
  • Twenty percent are facing bankruptcy.

Is an RRF grant a silver bullet? No, but it’s certainly valuable ammunition in the fight for the survival of independent restaurants and operators, and therefore the industry itself.

Time is Up

Actually, time ran out months ago. Congress has allowed months to go by without taking any meaningful action.

In fact, one US Senator, Rand Paul (R-KY), blocked a vote to provide the industry with $43 billion in emergency funding. The senator killed the unanimous consent motion back in August of 2021.

As a refresher, the RRF grant application portal was closed last year on May 24. A bipartisan group introduced the Restaurant Revitalization Fund Replenishment Act of 2021 in June.

And like I mentioned, emergency funding was smacked off the table just two months later.

In November, Build Back Better was passed. Of course, it didn’t include the RRF Replenishment Act. So, apparently building America back better doesn’t include restaurants, bars, lounges, etc.

It’s clear that America’s politicians and lawmakers are content to not accomplish much. “Owning” one’s opponents via social media and sound bites is apparently much more important.

Sniping at one another, not doing the jobs they were elected to do, is the order of the day. Meanwhile, independent owners and operators are being left out in the cold and crushed under the weight of a web of inconsistent Covid-19-related mandates and guidelines. Their staff members are expected to act as the Covid police, risking their health and safety.

I could go on but we all know what’s happening: The people elected to represent the people are abusing the privilege by ignoring us.

The time for asking nicely for Congress to take action is over. It’s time to demand action.

Image: Stanford Smith on Unsplash

Page in Olympus typewriter with "2021" typed onto it
by David Klemt David Klemt No Comments

Top 2021 KRG Hospitality Articles

Top 2021 KRG Hospitality Articles

by David Klemt

Page in Olympia typewriter with "2021" typed onto it

We’ve gathered the top KRG Hospitality articles from 2021 and separated them into five distinct categories: Food, Beverage, Operations, Marketing & Promotions, and Industry News

Food

Delivery and Takeout Food Trends for 2021: Canada

It should come as no surprise that interest in what food items Canadian consumers wanted to order for delivery and takeout skyrocketed last year. (link)

Delivery and Takeout Food Trends for 2021: United States

Obviously, owners, operators and management wanted to stay current on consumer food trends in the USA as well. (link)

Have a Slice of Nostalgia: The Return of Viennetta

Never underestimate the marketing, promotions, and profitability power of nostalgia. This is particularly true when people are seeking comfort. (link)

Beverage

Uncorked: 2021 Wine Trends to Watch

Understanding what wines are trending is an effective way to boost profits and overcome wine intimidation. (link)

Fever-Tree Cola: Set Aside Your Soda Gun

Outright eliminating soda guns may be a long shot. However, cocktails crafted using bottled craft ingredients can justify premium prices. (link)

These are the Drinking Trends to Watch in 2021

We may not have a crystal ball but we have the next best thing: Data. (link)

Operations

Container Kitchens: The New Footprint

Several industry experts and intelligence agencies predict smaller restaurant footprints moving forward. Container kitchens are certainly a viable method to shrink venue sizes. (link)

The Reality of Hiring Right Now

It really doesn’t need to be said but I’ll do it anyway: The labor shortage and “Great Resignation” are real. (link)

The 5 Ds of Bystander Intervention

Sure, great food and beverage are crucial to luring people in, wowing them, and converting them to repeat guests. However, so is the experience. A key element of a positive memorable experience is ensuring guests feel safe. (link)

SevenRooms Reveals Third Party Delivery Impact

The high-tech reservation platform shows what many suspected to be true: Direct delivery is better for operators than third-party delivery. (link)

Marketing & Promotions

How SevenRooms Improves Operations

Not only does SevenRooms make handling reservations easier, it also makes setting up marketing campaigns simple and effective. (link)

This Generation is Most Likely to Dine In

If you want to know who to market in-person dining to, here’s your answer. (link)

0.0 to 0.5 Beers to Know for Dry January and Beyond

Dry January (along with Damp January) is here to stay. This is a sampling of alcohol-free and low-ABV craft beers to offer Dry and Damp January guests. (link)

Industry News

I Tried the Mask Made for & by Hospitality

None of us enjoy wearing face masks. This mask is comfortable to wear and amplifies the wearer’s voice. (link)

What’s the RRF Replenishment Act?

Well, here’s one take on an answer to this question: It’s the bill to replenish the RRF that has made zero progress since June of 2021. (link)

Build Back Better…Without Restaurants or Bars?

The BBB Act was passed in November. Of course, it didn’t include the Replenish RRF or ENTREE acts. It’s much easier for politicians and lawmakers to say they care about and support our industry than actually prove it. (link)

Image: Markus Winkler on Unsplash

Four disposable medical face masks in a pile
by David Klemt David Klemt No Comments

Current Restrictions: Canada

Current Restaurant Restrictions: Canada

by David Klemt

Four disposable medical face masks in a pile

KRG Hospitality’s headquarters is in Toronto but we operate in three major Canadian markets: Alberta, British Columbia, and Ontario.

I was visiting the Toronto office, traveling from Las Vegas, when new restrictions were announced due to Omicron.

By the time I landed, I knew each province in which we operate would be at least discussing possible restrictions.

Alberta

The following restrictions apply to restaurants, bars, nightclubs, cafes, and pubs participating in the Restrictions Exemption Program (REP):

  • No more than ten people may be sat at one table.
  • Alcohol service must terminate by 11:00 PM.
  • These businesses must close by 12:30 AM.
  • Billiards, dancing, darts, and other “interactive” activities are prohibited.

As a refresher, the REP program requires operators to require patrons age 12 and above to:

  • provide proof of vaccination, negative results from a test taken within 72 hours of service, or medical exemption; and
  • comply with mandatory masking.

Alternatively, operators can comply with all restrictions as outlined in Alberta’s public health orders.

However, businesses not participating in REP face the restrictions below:

  • Indoor dining is prohibited.
  • Outdoor dining is permitted. No more than six people may sit at the same table.
  • Groups are restricted to one household or two close contacts (for those living alone).
  • Alcohol service must terminate by 10:oo PM. Consumption must conclude by 11:00 PM.

British Columbia

At the time of publication, restaurants, cafes, and pubs can still offer both indoor and outdoor dining.

However, there are restrictions in British Columbia:

  1. No more than six people may be sat at one table.
  2. When not seated, guests must wear face masks.
  3. Guests may not move to between tables, visit other tables, or dance.
  4. Indoor gatherings are limited to 10 people (down from 25).
  5. Outdoor gatherings are limited to 25 people (down from 100).
  6. Operators must maintain physical distancing or barriers between tables.
  7. Alcohol can be served during normal service hours.

Unfortunately, bars, nightclubs, and lounges aren’t facing restrictions, they’ve been forced to close.

These restrictions and closures will remain in place until January 18, 2022. Exceptions include bullet points 2 and 3, which are expected to remain until January 31, 2022.

Ontario

As of December 19, 2021, restrictions that impact restaurants, bars, strip clubs, and other food or beverage venues went into effect:

  • Capacity reduced to 50 percent.
  • No more than 10 people may sit at one table.
  • Guests must remain seated. Only performers or workers may dance.
  • Venues must close for indoor and outdoor dining and drinking by 11:00 PM. However, businesses may offer delivery and takeout past that time.
  • On-premise alcohol sales are prohibited after 10:00 PM. Consumption of alcohol on-premises is restricted after 11:00 PM.

It’s crucial that operators and leadership teams remain up to date on their province’s (and city’s) restrictions. At the start, 2022 will be challenging but opportunities for recovery will present themselves

Image: Markus Winkler on Unsplash

Square terminal in restaurant kitchen
by David Klemt David Klemt No Comments

Square: 2022 Threats & Opportunities

Square: 2022 Threats & Opportunities

by David Klemt

Square terminal in restaurant kitchen

As all hospitality professionals know, the past nearly two years is imposing rapid change on the industry, necessitating rapid, strategic adaptation.

The key word in the above sentence isn’t “adaptation,” it’s “strategic.”

Of course, it’s hard to make strategic choices without as much information as possible.

To that end, we’ve reviewed Square‘s recently released “Future of Restaurants: 2022 Edition.” This is the company’s second annual Future of Restaurants report.

Square partnered with Wakefield Research, surveying 500 operators and 1,000 consumers to identify 2022 threats and opportunities.

Threat: Labor Shortage

Most operators aren’t going to want to read this prediction from Square. However, we can’t identify and adapt for opportunities if we don’t acknowledge threats.

Per Square’s report, the labor shortage may never see a correction. In other words, welcome to yet another new normal.

More than 70 percent of operators say they’re facing a labor shortage, per Square. Just over 20 percent of available positions were, at the time the survey was conducted, unfilled.

Instead, operators will likely, according to Square, need to make operational and work culture changes:

  • Improve working conditions. For example, encouraging and acting on team feedback. Another example? Modernizing scheduling.
  • Ensure workers are being mentored and not simply managed.
  • Hire, train, assign tasks, and schedule more strategically to operate with a smaller team.
  • Offering incentives that entice higher-quality candidates to work for you.

One participant quoted in the Square report claims that QR code ordering dropped their labor cost percentage by 150 percent.

Threat: Lack of Tech

As SevenRooms suggested when looking forward to 2022, technology solutions can lessen the burden of labor shortages. That leads us to another big threat: failing to embrace tech.

Some operators bristle at the word “automation.” For many, it conjures an image of robots in the kitchen and delivering food to tables.

Obviously, we’re opposed to replacing staff with any form of automation. However, we support automating tasks if that means team members are better utilized.

Why not automate inventory? Why not automate online order filling? If it improves operations and the guest experience, automation is less threatening.

According to Square’s report, 62 percent of operators think automation is appealing for managing online, delivery, and contactless orders. Ninety percent of operators say that back-of-house automation—if staff can focus on more important tasks—is a good idea.

More than 90 percent think automated inventory is an appealing solution.

It has taken a lot of time for hospitality to catch up to other industries in embracing tech. But Square reports that 36 percent of restaurants upgraded their business tech in 2021.

Of course, automation will become a threat if operators lean too heavily into it and stop paying attention to detail.

Phrased another way, be tech-savvy, not tech-reliant.

Opportunity: Omni-channel

Square see implementing an omni-channel strategy as the way forward. In fact, their general manager for Square Restaurants, Bryan Solar, said the following:

“We see the time of the dine-in only or takeout only as largely done forever.”

Going omni-channel (diversifying) in the restaurant space means making online ordering and delivery important elements within the overall business strategy. To that end, Solar posits kitchens will grow in size to better handle online orders.

Square’s survey reveals some intriguing numbers:

  • 13 percent of consumers say they’ll avoid restaurants that don’t offer online ordering.
  • Among restaurants with online ordering, those channels generate 34 percent of their revenue.
  • Over the past year, 54 percent of restaurants either added or expanded online ordering channels.
  • Online ordering is likely here to stay: 69 percent of respondents plan to offer it post-Covid-19.
  • 24 percent of operators are planning to allow guests to order alcohol from them online.

Another interesting set of numbers pertains to first- and third-party delivery. As we’ve stated several times, we much prefer operators offer first-party or direct delivery. According to Square, 49 percent of operators plan go direct delivery. More than half—62 percent—will pursue third-party delivery. That suggests that some operators will offer both.

Opportunity: Direct Ordering

When it comes to engaging online guests, operators need to control the experience. As I wrote for another publication years ago, a restaurant or bar’s website is still very important.

This statistic proves that statement true: Per Square, 68 percent of online guests want to order via a restaurant’s website or app, not a third-party.

More than likely, a significant portion of those guests want to know they’re supporting a restaurant and its staff directly. Hence the importance placed on ordering via the website or their own branded app.

So, operators would do well to ensure their websites feature an ordering widget. Or, they can opt to have an app built (or at least skinned) for their business.

Opportunity: Kiosks

According to Square’s survey results, 79 percent of consumers prefer ordering from kiosks over ordering from staff.

Most consumers and operators likely associate ordering kiosks with fast food restaurants. However, other categories can also benefit from these devices.

Close to half—45 percent—identified it as a preference when ordering at a casual-dining restaurant.

And fine dining isn’t immune to the convenience of tech. A little over 20 percent of consumers prefer to order via kiosk in the fine-dining space.

Overall, kiosks speak to the guest desires for convenience and safety. More than a third indicated that ordering via digital menu is appealing because they don’t have to touch a menu someone else has touched. And 37 percent like a digital option because they don’t have to wait for a server to bring them a physical menu.

Eleven percent of Square survey respondents will avoid a restaurant if they don’t offer digital menus.

Nearly half (45 percent) of restaurants are planning to offer QR code menus post-Covid-19. Another benefit of digital menus is dynamic pricing. As costs fluctuate, operators can increase or reduce prices easily without printing new menus.

Outlook

Representing a stark contrast from 2020 survey results, nearly 60 percent of operators say the survival of their restaurants is a concern in 2022.

That’s still a high number but vastly lower than how operators answered about 2021. Last year, 92 percent of operators surveyed said they were worried about survival.

According to Square’s report, operators are looking past surviving and making long-term plans. That’s a welcome sign that confidence is improving.

To review Square’s “Future of Restaurants: 2022 Edition” report in its entirety, click here.

Image: Patrick Tomasso on Unsplash

Military combat helmet in digital camouflage
by David Klemt David Klemt No Comments

Adding Veterans to Your Team

Adding Veterans to Your Restaurant, Bar or Hotel Team

by David Klemt

Military combat helmet in digital camouflage

Do more this Veterans Day by encouraging those who have served to apply and interview for available positions on your team.

There are several benefits to providing job opportunities to veterans, regardless of the country (or countries) in which you operate.

Of course, there are dos and don’ts that come along with recruiting, hiring and working with veterans.

Benefits to Hiring Veterans

Before we begin, a caveat: Remember that veterans are individuals. “Veteran” is a label, a designation, a descriptor. In no way is one person who is a veteran interchangeable with another.

That said, there are some elements of military service that are similar to those of successful hospitality operations.

Teamwork, a strong work ethic, leadership skills, precision in tasks, achieving goals, consistency in results… When a restaurant, bar or hotel team is operating at its best, it can be said they work with military precision.

Generally speaking, veteran job candidates bring experience to the table that can benefit an operator greatly.

Additionally, it’s commonly said that hospitality leadership should hire for personality because they can train requisite skills. Speaking generally again, many veterans are so used to receiving specialized training that they’ll likely appreciate and respond quickly to yours.

If you want your business to operate with military precision, why wouldn’t you hire military personnel who fit well within your team?

Questions to Ask During Interviews

Obviously, there are definite dos and don’ts when it comes to discussing a veteran’s military experience.

As curious as you may be about some aspects of a veteran’s experience, questions shouldn’t be invasive or offensive.

Some examples of questions you should ask are:

  • “What did you do (in the Air Force, Army, Coast Guard, Marines, Navy, National Guard or Reserves)?”
  • “Why did you choose that branch of the military?”
  • “How long did you serve?”
  • “Do you come from a military family?”
  • “Where were you stationed during your career in the military? Did you visit any other countries?”
  • “Where was your favorite place you visited or lived?”
  • “How do you think your experience in the military will benefit you here?”

As you can see, nothing in those questions should make a veteran applicant uncomfortable.

Questions and Behaviors to Avoid

Speaking of discomfort, there are many questions that you should never ask a veteran. Not just during the interview process, but ever.

Also, if a veteran informs you they’re uncomfortable answering a question about their service, that should be respected.

Examples of questions and topics you should avoid are:

  • “Do you have PTSD (Posttraumatic Stress Disorder)?”
  • “Do you find it hard to get back to ‘real/regular’ life after being in the military?”
  • “Did you ever get shot/stabbed/bombed?”
  • “Did you ever kill anyone?”
  • “What’s the worst thing that ever happened to you while you served?”
  • Current military conflicts, particularly if you haven’t served in the military.
  • Referring to elements of work through military analogies.
  • Insulting branches of the military if you never served.

In short, treat veterans with the respect their deserve, as you should any other member of your staff. Veterans aren’t novelties or curiosities—they’re people.

For too long, veterans have faced undue scrutiny and undeserved stigmatization. It shouldn’t be difficult to turn that around when the solution is simple: Give veterans respect; treat them like  people since that’s precisely what they are; and provide equal opportunity.

Image: israel palacio on Unsplash

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