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January 2015
HEAL HEALTHCARE REFORM
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EDITORIAL STAFF Publisher, Bob Bonney Executive Editor, Lex Nepomuceno Managing Editor, Andrew Cook Contributing Editor, Barb Hergenroether Contributing Editor, Paul Schlienz Art Director, Lisa Ellefson MRA Executive Officers Chairman, Mark Dirnberger Bella Italia Ristorante
Inside Features 10
MRA prepares for 2015 Missouri legislative session
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Affordable Care Act: What’s next?
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Health-care timeline
President, Vic Allred Jazz, A Louisiana Kitchen
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Health insurance – Who is covered?
Vice-President, Bob Luke Rib Crib Barbecue
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What wellness means to restaurants
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Affordable Care Act resources
Treasurer, Buddy Lahl Kingswood Senior Living Community Secretary, John LaRocca University Club of Missouri University
Other stories 5
Department of Revenue audits target restaurants
Director of Operations, Barb Hergenroether
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A Letter from the Chairman of the Board
Executive Director GKCRA, Shannon Hickey
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President’s Column
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Menu engineering for maximum profit
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Menu engineering step by step
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Teaching next generation of restaurateurs key to industry’s longevity
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Grow profitability by retaining loyal guests
MRA Executive Team CEO, Bob Bonney
Southwest Regional Director, Shelli Luke MRA State Office/Eastern Regional Office 1810 Craig Road, Suite 225 St. Louis, MO 63146 Toll Free: 877.413.7029 P 314.576.2777 | F 314.576.2999 morestaurants.org
Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification. Reproduction of articles appearing in Missouri Restaurant Magazine are authorized for personal use only, with credit given to Missouri Restaurant Magazine and/or the Missouri Restaurant Association. Articles written by outside authors do not necessarily reflect the views or positions of the Missouri Restaurant Association, its Board of Directors, staff or members.
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HEALTHCARE REFORM HEAL
Products and services advertised in Missouri Restaurant Magazine are not necessarily endorsed by the MRA, and do not necessarily reflect the opinions of the MRA, its Board of Directors, staff or members. ADVERTISING INQUIRIES MAY BE DIRECTED TO: Bob Bonney, CEO Missouri Restaurant Association Mobile 636.432.9506 Office 314.576.2777 | Fax 314.576.2999 bbonney@morestaurants.org Missouri Restaurant Magazine is published monthly for Association members. We welcome your comments and suggestions. email: bbonney@morestaurants.org
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On the cover The Affordable Care Act is one of the most complex and far reaching pieces of legislation ever. It will effect every restaurant in numerous ways. This issue of Missouri Restaurant Magazine will help you be prepared for the big health-care changes that are coming soon.
Department of Revenue audits target restaurants In a major shift of position, Missouri Department of Revenue (DOR) has apparently decided the employer, not the employee, shall be responsible for the employee’s state income tax on under-reported cash tip income. The negative consequences for restaurants are significant. Restaurants are being assessed 6% of the amount of under-reported cash tips as calculated by the DOR’s testing methodology – 6% being the highest individual income tax rate in Missouri. In conducting the audits, DOR is separately calculating the tip percentage claimed on charge sales and the tip percentage claimed on cash sales. If the cash tip rate is less than 8%, DOR has deemed the shortfall to be under-reported tip income and given the restaurant an assessment equal to 6% of the shortfall. Based on the opinions of professionals, MRA believes the DOR has no authority for the assessments and, further, that the position taken by the Department puts the employer in an untenable position, because there is no authority for the employer to withhold additional Missouri income tax beyond the amount associated with the cash tip income reported by the employee. MRA has received new information that the DOR may be contemplating adopting a more punitive position on future audits: that the charge tip percentage and the cash tip percentage should be the same. Accordingly, DOR’s calculation of under-reported cash tip income would be greater under this methodology for restaurants with charge tip rates in excess of 8%.
To protect the interests of the industry, MRA will work to introduce legislation in Jefferson City during the 2015 session to preclude DOR from proceeding in this fashion. We will work tirelessly to secure its passage. In addition, MRA is evaluating available options to secure refunds of assessments restaurants have already paid as a result of this DOR audit practice. MRA recommends all restaurants employing workers who receive tips take the following steps: 1. Remind employees verbally and disclose in writing in your employee handbook that the law clearly states all tips, both charge tips and cash tips, received must be reported to the employer. 2. Perform a separate calculation of the tip percentage claimed by employees on charge sales and the tip percentage claimed on cash sales. 3. Follow up with employees when the results look out of line, reminding them of the requirements of the law. 4. If your POS system allows, require employees to indicate cash tips received when closing out a ticket. 5. The employee should be required to sign off every day to confirm total charge tips and cash tips reported, either by signature on a tip form or through your POS system. A form, designed by MRA allied member, Jeffrey L Katz, CPA with Freirich & Katz L.C. Certified Public Accountants, that can be used to assist with the calculation recommended in step 2 above, as well as a blank template of the form is available for download on the MRA website. ▪
January 2015 | 5
Thank You
to Our Advertisers MRA expresses its heartfelt gratitude to those companies who purchased an ad in this first edition of The Missouri Restaurant. We realize it took a leap of faith to purchase advertising in a magazine we were able to discuss only in conceptual terms. Thank you for your belief in what we are attempting to accomplish with this publication. MRA will long remember your faith in us and we will strive to create ever-increasing value for your advertising dollars.
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A Letter from the Chairman of the Board Dear MRA Members & Friends: When the Patient Protection and Affordable Care Act, commonly called the Affordable Care Act (ACA), or “Obamacare”, became law in March 2010, it created quite a controversy and much concern. One provision of the ACA that largely flew beneath the radar, caught the attention of Missouri Restaurant Association and similar stakeholders, including our partner organization, the National Restaurant Association. That provision required restaurant menus, menu boards, drive-thru displays, catering lines, and self-service buffets to contain calorie counts for all items. In addition, more detailed nutritional information – total calories, calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, fiber, sugars, and protein – was required to be provided in written form to diners upon request. Recognizing compliance would work an extreme hardship on many within the industry; particularly the independent restaurants operating one or just a few locations, MRA followed the NRA’s lead and remained engaged on the issue from its passage into law in 2010 until the U.S. Food and Drug Administration (FDA) published its final regulations on November 25, 2014. The FDA’s final rules represent a balanced and common-sense approach recognized by the industry as sound public policy. The MRA / NRA influence on them is obvious and represents yet another example of our work on behalf of the industry. Our work manifests itself in many important aspects of the final regulations. 1. The regulations apply only to chain restaurants operating 20 or more locations under the same name. For this group, the regulations replace a maze of confusing state and local laws and are, therefore, seen as a positive development. 2. Similar retail establishments, such as grocery and convenience stores, must also comply with the law in the same manner as restaurants. 3. There is a one-year implementation period, until December 1, 2015, to fulfill the requirements of the regulations. 4. The law applies to standard menu items; there is an exception for daily specials and custom menu orders. 5. The required standard of accuracy is a “reasonable basis” standard. 6. The FDA regulations cannot be preempted by state or local law. This is just the latest example of the work MRA undertakes, often behind the scenes, to protect the interests of Missouri’s restaurants. A delegation of MRA members traveled to Washington DC on three separate occasions to lobby for a fair and common-sense result on this issue. Representing and protecting the interests of the industry on matters relating to regulation, taxation, and legislation is a core tenet of MRA’s mission of service to the industry. It has been a key component of our mission for nearly a century – since our founding in Kansas City in 1916. The business and regulatory environment in which Missouri’s restaurants operate would be much different if not for the work of MRA. Recent successes resulting from the Association’s diligence include work on important issues such as liquor liability and minimum wage. Thank you for your support of Missouri Restaurant Association. I wish you all the best in 2015. Sincerely, Mark Dirnberger, Chairman Missouri Restaurant Association Owner, Bella Italia Ristorante – Cape Girardeau MO
January 2015 | 7
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President’s Column Victor (Vic) Allred, MRA President
As my year of service as president of Missouri Restaurant Association nears its conclusion, I am amazed at how quickly the time has passed. I have been an MRA member since the day I opened my first restaurant in Missouri in 1993. My neighbor, Steve Cole, who was then operating the acclaimed Café Allegro, encouraged me to become involved in MRA. Although I have been active in the Association for many years, I will leave my year as president with an increased appreciation for MRA, its mission of service to the industry, and the inherent goodness of its members. It is tradition for MRA’s president to visit our affiliated chapters across the state. I have attended several golf tournaments, Royals and Cardinal baseball games, a trivia night in St. Louis, and the 29th annual Taste of Mid-Missouri in Columbia. All of these terrific events, conducted largely with significant commitments of volunteer time, raised money for many worthy causes and provided valuable networking opportunities. MRA is fortunate to have such broad-based support from its allied members. They support the Association with their time and expertise, countless sponsorship and advertising dollars, in addition to their dues. Without our loyal allied members, MRA simply could not accomplish all it does to benefit the industry. The generous spirit of MRA members never ceases to amaze me. Where else could you find a group that, while working in an industry that is a challenge on even the best of days, is so willing to take the time to do so much in the service of others? The more deeply I became involved in MRA, the more I was made aware of options to improve the profitability of my business. Let me give you an example. As the renewal date on my property and casualty insurance was approaching, I was contacted by a member of the MRA Insurance Alliance and agreed to allow him to provide a quote on my policy. That decision saved me a couple thousand dollars. You can imagine how pleased I was to learn MRA’s endorsed provider of property and casualty insurance, Illinois Casualty Company, came in with the lowest premium and that my savings would be increased by the member-only discount the company offers. Not surprisingly, I consider the formation of the MRA Insurance Alliance to be among the most significant member benefit programs MRA has established during the past year. I encourage you to visit the MRA website, or call the MRA office, to learn more about the MRA Insurance Alliance and other benefit programs. I promise you will find many things of real value to your business. I recommend all members resolve in the year ahead to become more familiar with the Missouri Restaurant Association. You will be impressed by all MRA undertakes on your behalf, the important role it plays in the business climate in which the industry operates, and the value inherent in your dues investment. Consider attending the quarterly Board of Directors meeting in Springfield on January 25 and 26, 2015. I remember Herman Styles of Colton’s Steak House & Grill commenting after he had attended his first meeting, “I really enjoyed meeting everyone and the organization is much more than I expected.” It has been my distinct honor to serve Missouri Restaurant Association as its 2014 president and to have the name of Vic Allred added to the role of those distinguished men and women who have faithfully served this storied organization since its founding in 1916. I wish you every success in the New Year. Sincerely yours, Victor (Vic) Allred, MRA President Owner, Jazz - A Louisiana Kitchen
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MRA prepares for 2015 Missouri legislative session Effective representation before the Missouri legislature is an exercise in diligence and persistence. An integral component of this representation is the continual education of legislators on the importance of Missouri’s restaurants to the overall health of our state’s economy. MRA continually emphasizes to legislators that the restaurant industry, along with Missouri’s other small businesses, can lead the state out of the recession and into a new era of prosperity if government will help create a business climate that is free of unnecessary and excessive mandates, regulations, taxes, and fees. December 1 marked the first day for the Missouri legislature to pre-file bills for the 2015 session. The session will convene on January 7 at noon. Spring break is scheduled from March 19 - 30. The 2015 Missouri legislative session will adjourn on May 15. Hundreds of bills are pre-filed every year and many hundreds more are introduced during the session. Along with our contract lobbying firm, Brent Hemphill & Associates, MRA’s Government Relations and Public Policy Committee reviews each bill to assess its potential impact on the industry. The bills are divided into two primary categories: bills MRA will support, and bills MRA will oppose. Of course, bills can be amended so it is therefore necessary to monitor all legislation through the end of the session. Before each session, MRA also decides on legislation that the Association will endeavor to introduce to protect and further the interests of the industry. This process leads to the establishment of MRA’s priorities for each session of the Missouri legislature. Legislation MRA will seek to introduce. A. DOR Tip Audits: The Missouri Department of Revenue (DOR) has apparently decided the employer, not the
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employee, shall be responsible for the employee’s state income tax on cash tip income the employee fails to report. Restaurants are being assessed 6% of the underreported cash tips as calculated by the DOR’s testing methodology – 6% being the highest individual income tax rate in Missouri. MRA will work to introduce legislation that precludes the DOR from proceeding in this fashion. MRA believes, based on the opinions of professionals, the DOR has no statutory authority for the assessments. B. Sales Tax on Mandatory Gratuities: Restaurants commonly charge a mandatory gratuity on parties of a certain size. The policy protects the server against the risk of a substandard tip. The collection of sales tax on mandatory gratuities results in double taxation. The tip is taxed as wages to the employee, and the tip is also subject to sales tax. MRA will introduce legislation that stipulates that mandatory gratuities, when the full amount of the gratuity is given to employees and thereby taxed as wages, are not subject to sales tax. C. Missouri School Year: Tourism will be increased if schools are adjourned for summer break during the traditional summer vacation months of June, July, and August. Increased tourism is good for Missouri businesses, including restaurants and hotels, and will result in additional tax revenues. MRA will introduce legislation that prohibits the school year from beginning before the first day of September or extending beyond the last day of May. Legislation MRA will support. The following legislation has been pre-filed. MRA will support these bills. A. HB 32: Denny Hoskins (R-Warrensburg) The bill extends the provisions of the Big Government Get Off My Back Act for an additional 5 years. The act: 1. Specifies federal mandates regarding a federal regulatory program must be subject to authorization through appropriation or statutory enactment;
2. Extends the restriction on any increase of any state-imposed user fee that adversely impacts small businesses; 3. Revises the definition of “small business” to include businesses with fewer than 50 employees instead of the current 25; and, 4. Authorizes, under certain conditions and for a specified period of time, an income tax deduction for small businesses that create full-time jobs. B. HB 97: Elijah Haahr (R-Springfield) The bill increases the requirement to pass a statutory ballot measure via initiative petition from a simple majority vote to 60% of the votes cast. A companion constitutional amendment would preserve overall symmetry by also requiring a 60% majority vote to approve constitutional amendments submitted to the people. C. HB 101: Craig Redmon (R-Canton) The bill authorizes a state sales and use tax exemption for utilities used or consumed in the preparation of food ultimately sold to customers for consumption on or off the premises of a restaurant, cafeteria, delicatessen, bakery, grocery or convenience store. MRA observation: This bill was passed by the Legislature in the 2014 session; however it was vetoed by Governor Jay Nixon. D. SB 4: Eric Schmitt (R-Kirkwood) The bill increases the rate by which the individual income tax rate is being reduced under current law, provided general revenue growth triggers are met, to 0.2% per year, up from the current 0.1%, and stipulates the reduction will continue until the top rate of tax on personal income is 5%. The bill also increases the rate by which the business income deduction is being phased in under current law, provided general revenue growth triggers are met, to 10% per year, up from the current 5%, and stipulates it will continue until fully phased in and
Riddle of the month MRA will send a $50 gift certificate to the member restaurant of your choice to the first reader who provides the correct answer via email to bbonney@morestaurants.org. You decide to take a trip of exactly two miles and want to average 60 miles-per-hour. You drive the first mile at 30 mph. At what speed do you need to drive the second mile to average 60 mph on your two-mile trip?
January 2015 | 11
taxpayers are allowed to deduct 50% of business income on their individual income tax returns. E. SB 140: Mike Parson (R-Bolivar) This bill deals with tort reform. The act states each defendant in a tort action is liable only for compensatory and punitive damages in direct proportion to the defendant’s percentage of fault considering the fault of all persons contributing to the plaintiff’s injury regardless of whether the person is a party to the lawsuit. Under current law, when a defendant is found to be 51% or more at fault, then the defendant is jointly and severally liable for the entire judgment amount. F. SB 18: Will Kraus (R – Lees Summit) This act requires the Department of Revenue to notify sellers if there has been a change in the interpretation of sales tax laws that modifies which items of personal property or services are taxable. If the Department fails to notify a seller of the change, the seller will not be liable for the additional taxes to be collected until the seller is notified. The waiver of liability shall not apply to sellers that had prior notice or who have previously remitted tax on the property or service which is the subject of the change in interpretation. The Department is also required to update its website with information regarding modifications in sales tax law. Legislation MRA will oppose. The following legislation has been pre-filed. MRA will oppose these bills. A. HB 73: Brandon Ellington (D-Kansas City) The bill increases Missouri minimum wage to $10.25 per hour effective January 1, 2016. The wage is subject to annual increases or decreases on January first of successive years based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as is the case under current law. B. SB 44: Jamilah Nasheed (D – St. Louis) This bill 12 | morestaurants.org
relates to inquiries into the criminal history of applicants for employment. The act makes it an unlawful employment practice for a public or private employer with at least six employees to inquire into or consider the criminal record of an applicant before the applicant has received a conditional offer of employment. Once the applicant has been offered the position, the employer may inquire into and consider whether the applicant has been found guilty of a felony or a misdemeanor. Felonies may be considered only if less than ten years have elapsed since the applicant was released from custody or supervised release. Misdemeanors may be considered only for a five-year period. The employment offer may only be withdrawn based on an offense that bears a rational relationship to the duties of the position. In addition, this act specifies a list of factors the employer must consider before withdrawing a job offer based on the applicant’s criminal record. The factors include: 1. The nature of the offense; 2. Information relating to the degree of rehabilitation and good conduct, whether produced by the applicant or produced on behalf of the applicant; 3. Whether the prospective job provides an opportunity for the commission of a similar offense; 4. Whether the circumstances leading to the offense are likely to reoccur; and 5. The length of time that has elapsed since the offense. This act does not apply to religious or sectarian employers, law enforcement agencies, the Department of Corrections, or any position when federal or state law requires or expressly permits the consideration of an applicant’s criminal history. MRA observation: Similar legislation was passed on December 1 by the Columbia Missouri City
Council. The State of Illinois has also passed similar legislation which goes into effect January 1, 2015. There you have it – MRA’s assignment as of December 12, 2014 as it relates to the 2015 Missouri legislative session. This is the tip of the iceberg. We will continue to support, oppose, and monitor all legislation filed up until the last day of the session. That’s no small task – in 2014 a total of 1,939 bills were filed. On behalf of the restaurant industry, MRA members and staff will travel to Jefferson City to speak with legislators, testify at committee hearings, write letters, make phone calls, and visit with legislators back home in their districts. MRA will have a presence at the Capitol each and every day the legislature is in session. There is always strength in numbers. You need to be a part of the process, and your fellow MRA members, who have done this for many years, are happy to help you. We were all beginners at some point. Your first step in becoming an effective advocate for Missouri’s restaurants can occur on February 17, 2015 at MRA’s Annual Legislative Day. Make plans to join us – we are preparing a place for you! ▪
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Affordable Care Act: What’s next? By Paul Schlienz, staff writer
Make no mistake about it. No matter what size your restaurant may be, the Affordable Care Act (ACA) of 2010 will impact the way you run your business during 2015 and beyond. How the health-care law affects your restaurant depends, in great part, on whether it is classified as a small or large business. Small or large, however, one thing that holds true for all employers is that they must inform all employees about how they can access the health care exchange. Large employers “Applicable large employers” are defined by the health-care law as those businesses with 50 or more full-time-equivalent employees including full-time salaried and hourly workers and counting part-timers based on the hours they work. First and foremost, large employers generally face an employer mandate that they offer all full-time employees and dependents affordable coverage of minimum value beginning on Jan. 1, 2015. (The mandate phases in; employers with 50 to 99 full-time-equivalent employees have until Jan. 1, 2016, to provide coverage or face penalties. The Jan. 1, 2015, deadline applies to companies with 100+ full-time-equivalent employees.) If employers fail to comply with this regulation, they will potentially face penalties of up to $2,000 per year for each full-time employee. Penalties will begin when at least one employee receives subsidized coverage through the premium tax credit on a state health-care exchange. In calculating their penalties, employers generally will be able to exclude the first 30 full-time employees (For 2015, employers with 100 or more full-time-equivalent employees can exclude the first 80 full-time employees). Employers would also get hit with penalties of $3,000 per year for each full-time employee who seeks subsidized
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coverage through the exchanges if an employer’s plan is deemed unaffordable or not of minimum value under ACA regulations. According to the ACA’s definition, “affordable” plans are self-only coverage that cost employees no more than 9.5 percent of household income. Minimum value refers to the richness of the plan’s benefits and must meet a 60 percent test. Beginning in 2016, companies of up to 100 will be able to buy health plans for their employees through the health care exchange. In 2017, the exchange may offer plans to employers with more 100 employees. “Large employers should be getting ready for January 1 to comply with their employer shared responsibility requirements, and that’s everybody with over 100 full-time equivalent employees,” said Michelle Neblett, director for labor and workforce policy for the National Restaurant Association (NRA). “It’s also important to note that those employers that are part of ‘common– control’ groups with 50 or more full-time equivalent employees, if they’re offering coverage, need to be tracking starting January 1, so they can report in to the IRS in 2016. The thing that many people with 50 to 99 fulltime equivalent employees don’t know is that this applies to them in 2015. Even if they’re not offering coverage, they still are going to have to submit and do the statements, in 2016, to their employees and claim that they’re taking the transition relief to the IRS. Everybody with 50 full-timeequivalent employees or above needs to comply with the reporting requirements under tax code Section 6056.”
“Large employers should be getting ready for January 1 to comply with their employer shared responsibility requirements and that’s everybody with over 100 full-time equivalent employees,” Michelle Neblett, director for labor and workforce policy for the National Restaurant Association
Small employers According to the ACA, a small business is one with fewer than 50 full-time-equivalent employees. This includes fulltime salaried and hourly employees in addition to part-time workers counted based on their total working hours. If your business qualifies as a small one, you will be much less impacted by ACA healthcare regulations than businesses that employ 50 or more workers. Most significantly, small employers are not subject to the ACA’s employer mandate. Small employers offering coverage may qualify for a tax credit for contributing to their employees’ health coverage. This benefit is available to restaurants with up to 25 full-time employees, based on a 40-hour workweek, who also pay at least half of the cost of coverage for their full-time salaried and hourly employees, and whose employees’ wages average no more than $50,000. Employers who take advantage of this tax credit must purchase their coverage through the state exchange. The maximum credit for the smallest restaurant with the lowest wages is 50 percent. Small businesses that offer health plans are prohibited from imposing annual/lifetime limits on coverage. The plans must cover employees with preexisting conditions. Coverage cannot be rescinded, and children must be allowed to remain on parents’ plans until they are 26 years-old. Keep in mind that small businesses are also subject to a 90-day limit on maximum waiting periods, and
restrictions on flexible savings accounts, health savings accounts and health reimbursement, and will be subject to nondiscrimination rules once guidance has been issued by the Department of Treasury. They must also offer a “plain English” summary of benefits and coverage to employees and are required to report the value of health care coverage on W-2 forms. Look out for some new taxes and fees under the law. Medicare tax rates have gone up for some, and some new taxes and fees imposed on health care plans under the ACA, including the “exchange reinsurance fee,” which is in effect from 2014 through 2016, may hit small businesses that purchase insurance. Get ready “I really am trying to encourage everyone to take a close look at those reporting requirements and instructions, what those requirements are, what changes they will mean,” said Neblett. “It will absolutely mean changes to how you keep track of all this data. The IRS is asking us to track and report a massive amount of data like we’ve never had to do before. There are going to be system changes that need to happen. At the very least, everything has to be collected and recorded on a calendar month basis. You can’t do it by payroll periods. It has to be, for example, January 1 to January 31. That, in and of itself, is going to be a change for our current system. So people need to take a close look at it and get ready.” Whether your restaurant is a small or large business, it is of utmost importance that you stay on top of the changes wrought by the ACA. Don’t take anything for granted. While this law is complex, it is the law, and you are responsible for following it. “It’s going to be important that everyone pay attention to this now as opposed to a year from now,” Neblett concluded. “If you do not begin collecting the required information in January, it will be very difficult, costly and time consuming to rebuild the data you will need to report.” For more information on what you need to know as you prepare for the new ACA requirements, visit the NRA’s Health Care Headquarters at Restaurant.org/HealthCare. The IRS’ draft forms and instructions are posted in the website’s regulatory section. ▪
Health-care timeline Oct. 8, 2009 – H.R. 3590, Patient Protection and Affordable Care Act passed by House.
March 21, 2010 – House agrees to Senate-passed H.R. 3590.
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2 Dec. 24, 2009 – H.R. 3590, Patient Protection and Affordable Care Act (PPACA) passed by the U.S. Senate with amendment.
March 23, 2010 – President Barack Obama signs H.R. 3590 (PPACA) into law (P.L. 111-148).
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4 March 21, 2010 – House passes H.R.4872, Health Care and Education Reconciliation Act of 2010.
March 30, 2010 – President Barack Obama signs H.R. 4872 into law (P.L. 111-152). Combined P.L. 111-148 and P.L. 111-152 are known as the Affordable Care Act (ACA).
Jan. 1, 2011 – Changes to tax-free savings accounts. Excludes costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through a Health Reimbursement Account or health Flexible Spending Account and from being reimbursed on a tax-free basis through a Health Savings Account or Archer Medical Savings Account. Taxes are increased on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20 percent of the amount used. Sept. 23, 2012 – Private individual and group health plans must provide a uniform summary of benefits and coverage to all applicants and enrollees. The provision applies to all individual and group health plans, regardless of whether they are grandfathered or not.
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6 March 25, 2010 – Senate amends and passes H.R. 4872, Health Care Education Reconciliation Act of 2010.
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10 Jan. 1, 2013 – Excise tax of 2.3 percent imposed on the sale of any taxable medical device.
House agrees to Senate amendments and passes the Senateamended H.R. 4872.
Sept. 23, 2010 – ACA market reform provisions, such as allowing adult children to remain on their parents’ health plan until age 26, takes effect for new plans or existing plans when they renew. 16 | morestaurants.org
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July 2013 – U.S. Department of Treasury grants transition relief for employers compliance with the employer mandate for tax year 2014.
Oct. 1, 2013 – Exchanges open. Seventeen states and Washington, D.C., operated their own exchange or partner with the federal government on an exchange. Thirty-three states choose to let the federal government run the exchange in their state for 2014.
Jan. 1, 2016 – Employer mandate covers employers who averaged 50 or more full-timeequivalent employees on business days in 2015.
Employee-notification rules. All employers covered by the Fair Labor Standards Act are required to provide written notice to current employees as of this date, and all new hires thereafter, about health care coverage options through the new health insurance marketplaces/exchanges.
Feb. 12, 2014 – Employer mandate final rule issued.
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Jan. 1, 2014 – Individual mandate. With limited exceptions, all Americans are required to obtain “minimum essential coverage” through their employers, exchanges, Medicaid/ Medicare or elsewhere for themselves and their dependents or face potential tax penalties.
Jan 1 2016 – Employers with 100 or fewer employees can purchase coverage on the exchange.
July 24, 2014 – IRS releases first draft forms to comply with employer information reporting.
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Nov. 3, 2014 – End of comment period on IRS draft forms and instructions to comply with employer information reporting.
16 March 10, 2014 – Employer information reporting (IRC §§ 6056 and 6055) final rule issued.
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Aug. 28, 2014 – IRS releases draft instructions to accompany forms for employer information reporting.
Jan. 1, 2015 – Employer mandate begins to phase in. Employers who averaged 100 or more full-time-equivalent employees on business days in 2014 are considered “applicable large employers” for 2015 and will be required to offer full-time employees and their dependents the opportunity to enroll in a qualifying health plan starting in 2015, or face possible penalties. All entities that are members of an applicable large employer and self-funded employers begin tracking data to comply with the employer information reporting requirements.
23
22 Early 2016 – Large employer reporting requirements. Each entity in control groups with 50 or more full-time-equivalent employees will be required to file their first annual statement to employees on or before Jan. 31, 2016, about any health care coverage offered during 2015. The same information must also be sent to the IRS about a month later.
24 Jan. 1, 2018 – Tax on highcost insurance. Imposes an excise tax on insurers of employersponsored health plans (and employer sponsoring selffunded plans) with aggregate expenses that exceed $10,200 for individual coverage and $27,500 for family coverage.
January 2015 | 17
Health insurance – Who is covered? By Sheryl Jackson, staff writer According to the U.S. Census Bureau’s recent report, “Health Insurance Coverage in the United States: 2013,” below is a breakout of the U.S. population and their health insurance coverage in 2013: 86.6% of people in the US had health insurance 64.2% were covered by private health insurance 53.9% were covered by employment based health insurance
{
Government health insurance
Medicaid
34.3% were covered
17.3%
Medicare 15.6%
For children under age of 19, the percent of those not insured are: 7.6% in total
{
9.8% of those in poverty 7.0% of those not in poverty
Uninsured Rate Using the American Community Survey: 2008 to 2013 (Civilian noninstitutionalized population) 20%
2009 2008
2010
2011
2012
15%
10% Note: For information on confidentiality protection, sampling error, nonsampling error, and definitions, see <www.census.gov/acs/ www/Downloads/data_documentation/Accuracy/ACS_Accuracy_of_Data_2013.pdf>. Source: U.S. Census Bureau, 2008 to 2013 1-year American Community Surveys. Source: “Health Insurance Coverage in the United States: 2013”, United Census Bureau, September 2014 18 | morestaurants.org
2013
What wellness means to restaurants By David Faro, staff writer
Wellness is a state of optimal health that is oriented towards maximizing potential. A healthy restaurant is one that is moving toward physical, intellectual, emotional, social and environmental wellbeing at all times. The restaurateur who looks only to her bank balance for indicators of well-being misses out on a holistic understanding of what makes her store tick. The restaurant that overlooks the real needs of its employees opens itself up to infectious ideas that may or may not contribute to the overall well-being of the establishment. A restaurant that does not actively seek to understand its role in the community in which it resides - one that does not participate in the civic processes that define many of its operations quickly atrophies. You get the point. Wellness equals wholeness, and wholeness requires people to be aware of their whole being. A healthy restaurant is one where each system is looked at, assessed individually, then calibrated to fit into the complete organizational structure in a way that moves the whole machine forward with as little friction as possible. The well-being of individual restaurants is important to consider, and creating an environment where hospitality establishments can thrive is paramount to the over-all health of a local economy. Local restaurants allow people to move forward. Many stories from upper echelon hospitality professionals start in the dish room or as entry level assistants. Local restaurants treat workers fairly and
serve a vital role in the communities in which they do business. Healthy restaurants and healthy communities go hand in hand. The system is a cycle. As long as the local environment for restaurants allows them to prosper, they will be a pipeline of entry-level jobs for the community. They will generate the wages that allow young people to attend college and fund dreams. Many American dreams started in a local restaurant, and those dreams continue to be the building blocks of our local cultures across the state and the nation. Restaurants often lead on the issues of our times, and the change to healthy offerings, local products, going green and investing in education are all indicators that being part of a healthy society is a top priority for many restaurateurs. So, do a wellness check on your business; are you providing useful training and career opportunities for your staff? Does employee performance indicate that your business is helping to teach responsibility, time keeping and a strong work ethic? If you are doing these things, you are providing an avenue for young people - with no experience - to move toward a rewarding career. Your healthy restaurant is contributing to a healthy economy, healthy families and a healthy community. Beyond serving great food and being a meeting place for people, being an important part of a communityâ&#x20AC;&#x2122;s fabric is the real role of restaurants, and it should never be overlooked how important the health of your business is to the vitality of the whole state. Local restaurants employ almost a quarter of a million people in Washington. Thatâ&#x20AC;&#x2122;s important, too. The health of our industry starts with the well-being of YOUR business. Take care, be aware, be healthy and be well. â&#x2013;Ş January 2015 | 19
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Affordable Care Act resources Navigating the complex terrain of the Affordable Care Act and what it means to your business can be daunting. For many, knowing where to begin is the first hard step. How do you remain compliant? How do you know how many FTE’s (full time equivalent employees) you have working for you? What are the upcoming deadlines and what paperwork do you need to have in order? Use the resources below to begin to understand how to incorporate The Affordable Care Act into your business model. Use your smart phone or tablet to scan the QR codes, or type the link URL into your browser.
The Affordable Care Act: What you need to do.
7 Things You Should Know About the ACA
http://www.restaurant.org/healthcare
https://www.myedge.org/resources /health.aspx
Understanding the ACA and “operationalizing” it in a restaurant business will be challenging, and deadlines are looming. Download the NRA’s “Affordable Care Act: Next Steps for Restaurateurs” for an overview of the law. http://bit.ly/110514a
The NRA has developed a Notification Tool that makes it simple for members to comply with the health care law’s employee-notification requirement. The online tool helps you inform your employees about exchanges, as federal law requires, and keep records of employees who have read and understood the required notice. http://bit.ly/110514b
Employer Benefits Marketplace Created by the National Restaurant Association’s Health Care HQ to provide its members and their employees affordable and high-quality health-care insurance solutions and products. http://bit.ly/restauranthc
The SHOP FTE calculator is a quick way to see if you qualify to use the SHOP Marketplace, especially if you have a mix of full-time and part-time employees. The Small Business Health Options Program (SHOP) Marketplace is open only to employers with 50 or fewer full-time equivalent (FTE) employees. http://bit.ly/ftehc2014
January 2015 | 21
Menu engineering for maximum profit By Heather Donahoe, staff writer
Eva Sutherland is really good at what she does. And the roughly 1,500 restaurant operators she has helped in the past five years would probably agree. As solutions program manager for a major food distributor, Eva is charged with helping restaurant clients run profitable operations. She accomplishes this by offering marketing solutions, menu engineering, staff training and various operational aids designed to help operators maximize efficiency and profit. Menu engineering has proven to be a particularly important tool in Sutherland’s arsenal of resources. Most importantly, she teaches operators the basics of menu engineering, so they’re not dependent on her expertise. “If customers know how to engineer their own menus, then they can redo their daily special or their fresh sheet or their happy hour menu 22 | morestaurants.org
whenever they want,” Sutherland said. “It’s sort of the ‘teach a man to fish’ philosophy.’ We want our customers to be successful, because if they succeed, so do we.” So what is menu engineering, anyway? Though it may sound complicated, it’s really just evaluating menu items based on their sales and profit-generating potential. Beyond that, a menu is designed in such a way that customers are driven to the items that yield maximum profit. By knowing a few simple techniques, operators can construct a menu that compels customers to order based on the item they really want—not its price. The first step, Sutherland says, is to focus on high profit items—not food cost percentages. In other words, resist the urge to bury the 22.99 steak on a menu, while giving the prime real estate to an 8.99 French dip. “Sometimes after I’ve redone a menu, an operator will call me, panicked about a jump in food cost,” Sutherland said. “I always have to say, ‘Don’t worry. It’s just a barometer. You’re going to be selling higher dollar items now, but
you’re going to be making a higher profit.”
Menu design principles and strategies
When it comes to playing up the item—not the price— Sutherland strongly discourages operators from listing prices in a single column down the side of the menu. While most restaurants have caught on to this design tip, plenty of menus still make it easy for customers to skim up and down, looking for the dollar amount that seems right. Instead, the menu designer should concentrate on attracting diners’ eyes to the menu items themselves. This is easily accomplished by considering the individual design principles.
Purposeful color: When developing colors for a restaurant brand and the menu, research what different colors represent. Colors have a psychological effect. The right ones create a mood, convey a personality, fire up the appetite and draw attention to food items. For example, red and yellow stimulate the appetite, while blue tends to suppress it.
The end game to a well-designed menu is, of course, bolstered profits. While all restaurants can appreciate a jump in sales, Sutherland remembers one client in particular who enjoyed significant benefits from her work on his menu. “He has a restaurant in a seasonal area, where he has lots of traffic and sales for about three months, but is pretty dead for the rest of the year,” Sutherland recalled. “He wrote me a thank you note, letting me know that because of the changes we made, this was the first year in more than 40 years of business that he didn’t have to borrow money to get through the slow season.” Restaurant operators looking to refresh their menu offerings can also benefit from working with their vendors. Many employ professionals who work with customers on new menu ideas, cross-utilizing multiple menu items, integrating trends into the menu lineup, controlling costs and improving kitchen flow and efficiency. Restaurants that haven’t had a menu update in years should consider reaching out to suppliers and vendors. Routinely ordering the same items every week, offering the same menu month after month may work well in some isolated situations, but ultimately customers will return again and again to a restaurant that has achieved the delicate balance of menu consistency and innovation.
Enticing graphics and photography: A strong menu will engage with professional graphics, illustrations and photography. Use these elements to attract attention to food items you really want to sell. A photo or an icon next or close to a description is one of the most effective tools for promoting highly profitable food items. Strategic font: Always think of the audience when choosing a font; seniors, for example, will appreciate larger type. The font should be no smaller than 12 points. Sans serif fonts – those without “feet” – are popular choices for menus. As a rule, don’t use more than three different styles of type. Avoid or be sparing with exotic typefaces, script fonts and italics. Deliberate placement and positioning: Menu design draws some inspiration from newspaper layout, which puts the most important articles at the top right of the front page. Some restaurants will place their most profitable items or specials in that spot. Elsewhere in the menu, items you want to sell the most should be shown in first and last position. These are typically your biggest sellers, so put careful thought into which items provide your greatest return. Another “power position” is the inside right page above the center. Categorization: Research reveals that customers appreciate and prefer variety in a restaurant menu. The menu design should subdivide all food choices into smaller, specific categories to give the impression of choice. The greater the categorization, the greater the perception of variety will be. National Restaurant Association
See next page for menu engineering step by step!
January 2015 | 23
Menu engineering step by step Courtesy of Food Services of America Name: Seattle Burger
Step 1: Recipe Costing
Ingredients
Break down recipe costs on your best sellers (at the very least) and update them regularly to monitor your gross profit.
WATCH PRODUCT YIELD: Accurate product yields are critical to an accurate costing. For help, use the product yield worksheet.
Amount
Unit
Cost
1/3 lb Beef Patty
1
each
$0.53
American Cheese
1
slice
$0.15
Sesame Bun
1
each
$0.16
Tomato
2
slices
$0.20
Lettuce
1
leaf
$0.06
Red Onion
2
oz
$0.04
Mayonnaise
2
oz
$0.11
Pickle
1
spear
$0.06
Fries
5
oz
$0.20
Condiments
1
each
$0.03
Seasoning/Oils
1
each
$0.02
Paper Products/Linens
1
each
$0.01
FOOD COST IS PLATE COST DIVIDED BY SELL PRICE.
$1.57
Plate Cost
$5.59
Sell Price
$4.02
Margin/Gross Profit
28.1%
Food Cost
Step 2: Point of Sale Information
Using your Point of Sale report for a 6 or 12 month period, review your profit for each category to see if you need to change placement of categories on your menu or delete slow moving items. Cost Items
# Sold Unit Cost
Sell
Total
Total
Price
Total
Margin
F.C.%
GP$
Macadamia Tuna
65
$5.08
$330.20
$17.99
$1,169.35
$12.92
28.2%
$839.15
Teriyaki Salmon
25
$4.02
$100.50
$14.99
$374.75
$10.97
26.8%
$274.25
Broiled Tuna
5
$5.04
$25.20
$15.99
$79.95
$10.95
31.5%
$54.75
Ginger Prawns
3
$4.50
$13.50
$13.99
$41.97
$9.45
32.2%
$28.47
Piccata Cod
100
$3.76
$376.00
$11.99
$1,199.00
$8.23
31.4%
$823.00
Crab Cakes
45
$6.55
$294.74
$13.99
$629.55
$7.44
46.8%
$334.80
Category Total
243
32.8%
$2,354.42
$1,140.15
$3,494.57
CATEGORY GROSS PROFIT
Step 3: Menu Gaze Pattern
Place your highest profit items in the locations your customers see first! People only spend about one minute reading a menu, so itâ&#x20AC;&#x2122;s important they see your high profit items before anything else!
2
3
7
1 3
24 | morestaurants.org
2
4
1
1
2
3
5 7
6
4
1
5
6
Step 4. Menu Item Selection
Item placement in each category should be based on profit dollars generated for each item.
Seafood Specialties
Appetizers
Crab & Artichoke Dip 8.99 Potato Skins 6.99 Prawns 8.99 Nachos 6.99 Chicken Quesadillas 7.99 Chips & Salsa 4.99 Spicy Chicken Wings 5.99
HIGHEST
SELECTION BY GUESTS
Macadamia Tuna - Our specialty! 17.99 Ginger Prawns 13.99 LOWEST Broiled Tuna 15.99 PROFIT MARGIN Piccata Cod 11.99 Dungeness Crab Cakes 13.99 Teriyaki Salmon 14.99 Poached Salmon 14.99
HIGHEST
PROFIT MARGIN
TIP Don’t line up your prices. It is too easy for customers to “price shop.” Put prices at the end of your descriptions (in the same font) and you will sell more high profit items!
Step 5. Menu Merchandising
Draw attention to your highest profit items in each category. Try one of these ideas: Shading: Macadamia Tuna Grilled Tuna Fillet lightly dusted with Macadamia nuts and topped with Pineapple Salsa 17.99 Ginger Prawns 13.99 Broiled Tuna 15.99
Restaurant logo or other Icon: Macadamia Tuna 17.99 Ginger Prawns 13.99 Broiled Tuna 15.99
Different Fonts:
Macadamia Tuna 17.99 Ginger Prawns 13.99 Broiled Tuna 15.99
TIP Yellow, orange and red are “hunger colors.”
Step 6. Star Chart Plotting for Maximum Profits
Use the Star Chart Excel Program to determine item placement and use these tips for a successful menu. Plow Horses:
High Popularity/Low Profit Options 1. Change product or portion in recipe without changing perception of value 2. Check plates coming back for over-portioning 3. Use promotions and/or incentives to raise ticket average with high profit desserts, appetizers and specialty drinks 4. Raise menu price
Dogs:
Low Popularity/Low profit Options: 1. Delete from menu and replace with new products or higher profit items
7
Stars:
High Popularity/High Profit This is your #1 high profits zone to make more $$! 1. Keep these items 2. Raise prices as needed
Puzzles:
Low Popularity/High Profit Options 1. Taste item, have servers taste & comment 2. Is the prep time too long? 3. Should item be “jazzed up”? 4. Is the item over priced? 5. Rework menu description to increase sales 6. Offer incentives for servers 7. Relocate or change appearance on the menu
Step 7. Rounding Strategies Increase Profit and Maintain Consistency For items under $5: Use no more than 3 price points (example: 3.29, 3.59, 3.99) For items between $5 and $10: Use just two price points (example: 6.59, 6.99) For items over $10: Round up to the next dollar; 12.99, 13.99, etc. End prices with 9 - even 4 cents on every item adds thousands of dollars to your bottom line! Be consistent Don’t use dollar signs on prices Tip: if you sell 200 items/day and raise prices just 25¢, you’ll make over $18,000 in extra profit! Imagine the possibilities!
January 2015 | 25
I N S P I R E D
L O C A L F O O D C U L T U R E
FEAST DELIVERS YOUR CULINARY MESSAGE TO FOOD LOVERS AND INDUSTRY INSIDERS ACROSS THE STATE OF MISSOURI FOR INFORMATION, CONTACT ANGIE HENSHAW AT 314.475.1298 OR AHENSHAW@FEASTMAGAZINE.COM
FEASTMAGAZINE.COM
Chris Sutton We thank you, for your 15 years of tireless service, for the betterment of the Down syndrome community in the Kansas City area. The First Downs for Down Syndrome Board of Directors December 2014
The First Downs for Down Syndrome Board of Directors would like to say thank you to Chris Sutton for his 15 years of support to the Kansas City Down syndrome community. With Chris’s leadership and love of golf, he began the First Downs Golf Classic. For the past 12 years, the tournament has been very successful and one golfers look forward to each year. Chris, and KC Hopps LTD, has enabled First Downs for Down Syndrome (FDFDS) to make a significant difference in the lives of over 1,200 Kansas City families caring for a loved one with Down syndrome. Chris’s passion and heart for the Down syndrome community will never be forgotten. Thank you for so many laughs and good times. FDFDS is a non-profit, 501(c)(3) organization that was formed in 1992, in partnership with the Kansas City Chiefs offensive line. FDFDS raises money to help those in the community with Down syndrome and their families. The funds raised by FDFDS support the Kansas City Down syndrome community, specifically: the Down Syndrome Guild of Greater Kansas City, which provides support and resources to individuals with Down syndrome and their families, and also The Down Syndrome Clinic at Children’s Mercy Hospital, a clinic that addresses the medical and therapeutic needs of children with Down syndrome from birth through adolescence. Note from the Publisher: I was contacted by Amy Stoll, Executive Director of FDFDS, about placing an ad in our magazine to express the organization’s appreciation for the support Chris Sutton has provided. MRA is grateful for all of its members; however we are especially proud when a member’s commitment and support of a worthy cause rises to the level of what Chris has done for FDFDS. Mr. Sutton is CEO of KC Hopps, LTD. The company’s concepts include 75th Street Brewery, 810 Zone, O’Dowd’s Little Dublin, Barley’s Brewhaus, and Blue Moose Bar & Grill.
Teaching next generation of restaurateurs key to industry’s longevity During the past decade, the Coca-Cola Company has donated more than $7.5 million to the foundation, including $2 million in scholarships that have benefited nearly 1,000 students and educators around the country. Carlton Curtis, vice president of industry affairs for CocaCola FoodService as well as a key fundraiser for and past chair of the National Restaurant Association’s Educational Foundation, recently discussed the importance of the NRAEF’s ProStart program, which trains high-school students for careers in the restaurant industry. What is the impetus for Coca-Cola’s generous support for the NRAEF and its ProStart program? The Coca-Cola Company’s support for the ProStart program is, perhaps, the most significant thing we do around the foodservice industry and has been for a number of years. The reason for that is pretty simple: we at Coca Cola don’t have our own agenda about what programs should be supported within the foodservice industry, but we do listen very closely to what our customers tell us. And what do the leaders of the restaurant industry say is important? They tell us ProStart is important. You know, many wonderful things go on in our industry and Coca Cola is supportive of many of them, but ProStart is the one program that consistently is ranked at the highest priority level among our customers. Therefore, it’s a privilege for us to be able to be supportive of it. Why do you think operators value the ProStart program? Because of its reach and scope; ProStart reaches across all segments of the industry -- from QSR to fine dining -- and it reaches virtually every geography in the United States, certainly almost every state at this point and soon every state. There is no other program that has the appeal that ProStart does, based on those characteristics. Also, it is a proven success story, a program that has enough history where you can make very specific judgments about it based on the facts. And the facts are that this is a program that not only impacts the attitudes of young people and their families about the restaurant industry in a favorable way, but also provides wonderful youth development attributes in a number of areas relative to team building, discipline and understanding the value of work. That’s why operators in this industry rank it so highly.
28 | morestaurants.org
Why should students seek out participation in ProStart? All of us were this age at one time, and some of us, when we were 14, 15, 16 or 17, were very focused on our futures. We knew for any number of reasons what we wanted to do as young adults and, maybe, for our entire careers. But as we know, young people can sometimes be a little rudderless regarding their futures during this time. ProStart has been a very valuable program for so many young people. It’s given them a sense of purpose about their professional lives as well as a window into the world of work in a way nothing else we do can. Many of them have used ProStart over the years to find their calling. In fact, a high percentage of them go on to continue working in the foodservice industry and still do to this day. Others have used the skills and values they’ve learned in the program to propel them into other successful areas after their high school years, whether directly into the world of work or post-secondary education. That’s why I suggest that every young person at least look at the ProStart program available to them to accomplish some of those same things. What do you hope the program ultimately achieves? As we all know, and we talked about it often, the restaurant industry is right behind the health care industry as the largest private employment industry in the country. It is a vital part of the U.S. economy and it’s going to continue to grow in the years ahead. We’ve seen all the projections on the number of additional employees this industry will need over the next 10 or 15 years and it is important we have as many effective initiatives as possible to attract young people to the industry, to have them give it a fair look for the opportunities it offers. We obviously believe those opportunities are extraordinary; young people can start even at the lowest rung of a restaurant and rise as high as their talent and effort will take them. That is really the long-term vision for ProStart—to have it be as significant and impactful with as much reach as the restaurant industry itself. If we don’t do that, we are cannot create an environment for the industry to attract the next generation of chefs, managers and entrepreneurs we know we will need in the future. ■ Originally published by the National Restaurant Association, reprinted with permission.
SAVE THE DATES: Greater St. Louis Restaurant Association ACF Chefs de Cuisine Association of St. Louis, Inc.
Trivia Night 2015 Sunday, March 1, 2015 â&#x20AC;&#x201D; 4:00 pm - 8:00 pm Doors open at 4:00â&#x20AC;&#x201D;Trivia starts at 4:30
Orlando Gardens Banquet Center 2050 Dorsett Village Plaza Maryland Heights, MO 63043 Benefitting: The BackStoppers, Inc. Food Outreach Greater St. Louis Restaurant Association Education Foundation ACF Chefs de Cuisine Association Education Foundation Please contact the Missouri Restaurant Association: BHergenroether@MoRestaurants.org
Experience the Taste of Mid Missouri March 16, 2015 Join us at the University Club for the 30th annual Taste of Mid Missouri! Bring a date or your favorite group of friends, and experience the best treats Mid-Missouri has to offer. You'll sample delectable bites from over 30 area restaurants, with a variety of beverages from our local distributors, all in the comfort of Mizzou's University Club in the Alumni Center. Parking is available across the street at the Turner Avenue garage. Purchase tickets in advance for $25/person or at the door for $30/person!! https://www.eventbrite.com/e/30th-annual-taste-of-mid-missouri-tickets-13824767251
Ask the Expert | Restaurant Profit Coach
Grow profitability by retaining loyal guests By Rick Braa, CHAE
Q:
Recently, I spent a week straight in my restaurant covering for my manager while she was on vacation. It appears that fewer regular guests are visiting as I didn’t see many of the people I’m used to seeing. We’ve lost some, so how do I make sure we don’t lose anymore and build some back?
A:
Sales from loyal, frequent guests contribute 60 to 80 percent of annual sales for an average restaurant. Those numbers can be higher in a rural or neighborhood location and lower in a tourist location. According to the Gartner Group, 80 percent of your future profits will come from just 20 percent of your existing customers. Further importance is highlighted in a study conducted by Bain & Company, in coordination with the Harvard Business School. This study showed increasing guest retention rates by 5 percent increases profits by 25 percent to 95 percent. Loyal consumers spend on average 33 percent more than a typical consumer and return more often with zero cost of acquisition.
To make sure your business is set apart measure these things daily:
Ensure the guest experience is the focus of every
There are several tactics to make and keep loyal guests, including consistency, cleanliness and community impact among others. There is nothing more important than creating a place of connection. Starbucks has grown to over 20,000 stores worldwide; many stores are within a few blocks of one other. Howard Schultz’s vision was to create a third place, beyond work and home – a place to belong. Starbucks is successful because of consumer connectivity to the brand; consumers are part of it and live inside it.
What keeps loyalists coming back is an “ownership” stake in the business and a personal interest in building it. They recommend the business, post about it, brag about it and invite others while spending more; they’re evangelists. What happens in the restaurant is what makes them feel this way. The food is expected to be good, the facility is expected to be clean, the service is expected to be timely and appropriate and the atmosphere is expected to be right—those are entry points. The variable in all of this is connection and engagement of EACH guest.
Working with some of the best restaurants in the United States provides a rare glimpse into success and failure of many restaurants. Some are busy because of popularity of the food or the chef, but those draws fade and slow down eventually as the next new, hot spot opens and thrives. Restaurants that make the experience about the guest, not itself, have the highest, longest lasting success. Wellconceived restaurants find what consumers want and attract guests because the guest is the star of the show, not the restaurant. Those businesses build and become legendary. 30 | morestaurants.org
person on staff. From the front desk to the dishwasher, every greeting, clean plate, great product and point of service matters. Engage each person visiting the restaurant, not just the most vocal or visible people. As service becomes a commodity, customization of the guest experience is the differentiator. Use names. One of the busiest restaurants in the country requires servers and front desk to learn and use names of guests while in service. Remember faces. If a guest cannot be recognized by name, the next best thing is acknowledging their presence. Say, “Thank you” to each guest and mean it. Guests are 75 percent more likely to return to a restaurant if they feel legitimately thanked. Measure employee engagement on each shift. Make sure each person on staff has a connection with the management team and feels connected with the business. Create a place where the guest can belong outside the four walls. This can be in the form of a loyalty program, email list or great social media, the point is to communicate often enough so the guest feels “in the loop” and “part of the club.” Evaluate all touch points of the guest experience. Ensure they deliver the brand promise.
Strategically, set loyal guest acquisition as a priority and focus. Target, convert and keep guests who will evangelize for your restaurant and you’ll enjoy a thriving, profitable and healthy restaurant. ▪ For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.
WHEN THE UNEXPECTED HAPPENS, EXPECT NOTHING BUT THE BEST Restaurantsâ&#x20AC;&#x2122; #1 Resource for Disaster Restoration When a disaster strikes, you want your restaurant back in business as quickly as possible. At ServiceMaster Recovery Management, we have the experience with specialized services vital to restaurant restoration to make that happen. Call us today to get a FREE pre-loss plan for your restaurant!
32 | morestaurants.org I NOOI SI SCCAASSUUAALT LTYYCCOOMMPA PANNYY I LI L LI N
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