Theodore Farrand


By:  Theodore E. Farrand, FMP
President – Washington, DC Office

 Definition and Purpose:

 The term “programming” is a very broad category in the design world.  It can mean a simple list of rooms/spaces  with square footages assigned to each, or it can mean a detailed description of the operating parameters and design criteria for a new or renovation project. It can take many forms in between the two.

 The purpose of a Program in any design is to define the scope and parameters of the project that will guide the planners in all that is designed, so that the final product meets all the objectives of the client and users.

 A carefully developed design program saves time in the entire process, avoids costly changes after the design has been finalized, and is based on sound data and analysis early in the process to allow well thought-out decisions by the stakeholders of the project.

 Participants:

 In addition to the owners, architects, engineers, and others on the design team, other parties may also be involved in the early data gathering stage. Current or future operators, maintenance personnel, and customers are likely to have valuable insights to assist in the process.  There may also be an opportunity to survey the employee base for their input as to preferred food types and favorite outside dining establishments, which guides the planners in including food outlets that will likely be most successful.

 Objectives:

The goals of the owners must be the starting point.  A number of questions must be posed before any planning begins, such as:  What is the client’s vision for foodservice?  Do they want to update their older, facilities in exchange for a more efficient and/or sustainable operation?  Do they want to increase or decrease capacity to match a new demand?  What policies exist in this corporation’s culture that will affect the future foodservice, such as virtual work policies?  Do they have a cashless payment system in place today or do they want to implement such a system?   

 If they have no on-site foodservice today, do they need assistance in learning all about the capital, space and operating costs that will be required for full or scaled back foodservice operations?  What is the client’s estimated budget for the new or renovated facilities?   Visits to comparable sized operations can provide important impressions of what the client wants, particularly if they have no current foodservice or need to see new concepts that are popular today.

 Data Gathering:

 The basic information needed includes employee population, general breakdown of employee categories (i.e., portion of the staff that are in sales and therefore frequently out of the office, the portion that may be call center staff, who have very limited times for dining, the ratio of executive/management to general staff categories, etc.).  In addition, the projections for population growth are critical for the design team, as they must determine what the “design population” is to be.  In other words, what is the targeted population for the design?

If the project is a renovatiton, current operating statistics are very important and should include customer counts at all day parts, for every day, for a representative period, and if seasonality affects participation, then different months’ statistics may also be included.  This will tell the team what the current participation rates are today, and allow calculation of what the potential increased participation will be in the new facilities.  Current sales mix (what foods are purchased today) will help with planning the menu platforms for the new facilities. The amount of customers purchasing take out foods tells the team how much of the foodservice should be “express” or “grab n go” concepts versus “cooked to order” stations.  It is also important to understand check averages and client P&L or subsidy goals to understand what the market will bear in considering the stations to be included.

Concept Development:

 Today’s successful on-site dining concepts focus on foods freshly prepared in front of you, and incorporate healthful menu choices along with traditional foods. The “cafeterias” of yesteryear, with their huge kitchens and a sea of stainless steel steamtables have been replaced with “dining centers”, or “cafés”.  Servery Stations have been replaced with exciting “destinations”, where oftentimes food is prepared or finished to order in front of customers.   Fresh food displays, locally sourced foods, vibrant graphics all contribute to lively dining experiences today.  The majority of cooking is done in the servery, and much less in the kitchen.  The programmer must translate all the previous information into a clear list of what will be included in the new foodservices. What part does sustainability play in the project?  Is it to be LEED certified?  If so, have all possibilities for foodservice been considered, such as Energy Star equipment, variable speed exhaust hoods, composting and other solutions?

 Quantitative Requirements:

 The projected demand levels for the peak serving period guides the programmer to adequately size the facilities.  Industry rules of thumb are used to calculate the peak demand throughput. The dining spaces are sized based on the degree of comfort the owner desires.  Many dining rooms are subdivided spaces with a mix of types of tables: traditional tables for two and four, lounge type “soft” seating, bar type seating, etc.

 How do the sizing calculations relate to the expected operating costs?  Is the facility sized right?  Is the owner/client willing to subsidize operating costs if the offerings are more generous than the sizing directs?

 Cost estimates for major foodservice equipment is generated early, to which the architect adds the total costs of construction and other furnishings and finishes.  The estimates keep the project on target and are revised as the project progresses through each design phase.

 Strategies are often developed at this stage for the following elements:

 Centralization and decentralization:  If there is more than one point of service, is it practical to group some of the function components in one facility to be able to supply all locations?

  • Flexibility of Destinations:  How much flexibility should and can be incorporated into the design?  Future concept shifts are possible with counter top equipment versus drop in equipment.
  • Flows of customers, product, serviceware, and trash/garbage/recyclables/composting:  Have all logistical routes been optimized in the planning?

   Preparation for Schematic Design:

  The next tasks are for the client/owner and architect to approve or modify the written design program so that the foodservice designer can begin to test fit the available spaces.   The designer develops the foodservice facility with a logical plan following the natural flow of the foodservice:  loading/receiving dock, storage components, preparation and production, service/final cooking areas, cashiering, dining, tray return, dishwashing, potwashing, trash/garbage/recycling/composting functions.  The designer must follow the goals of creating efficient workstations, following all applicable codes.

 A well developed foodservice design program will serve as a solid foundation for the design that evolves.

Advertisements

By:  Ted Farrand, FMP
President & COO

In the corporate dining centers at office buildings and other employee foodservice facilities, which are called “ON-SITE FOODSERVICE”, the factors that make them successful often depend on having the correct contract in place.  If you work in an office setting and your company provides a dining facility, consider yourself lucky. 

 WHAT MAKES ON-SITE DINING DIFFERENT FROM OUTSIDE RESTAURANTS?

There are many behind-the-scenes costs required to provide even the most minimal foodservice for employee dining settings, so many corporations avoid providing on-site foodservice and employees must find their own source for meals, most often for lunch.  The biggest difference between on-site dining facilities and outside dining options like restaurants and quick service outlets is that in the external market they have many more opportunities for capturing customers, unlike the on-site dining facility, which has a maximum number of potential customers—the number of employees at that location. Another significant difference is that outside restaurants can have a static menu, which has a higher profit margin.  The on-site dining facility must provide a wide variety of menu items, often changing them daily to keep the program interesting for the available employee population.  These all add up to higher costs of operation for the on-site dining facility.

HOW DO OWNERS/CLIENTS ARRANGE FOR ON-SITE DINING FACILITIES?

There are still companies that provide employee dining through an internal foodservice department—these are called “Self-Operated”. Many of these companies are emphatic in their belief that they can focus more on employee productivity, satisfaction and retention if they handle foodservice themselves.  The vast majority, however, contract foodservice out to a third partyto avoid the hassles and focus on their core business.

 HOW IS THE CONTRACT STRUCTURED FOR FOODSERVICE CONTRACTORS?

What motivates the contractor is the agreement that is in place.  There are two basic types of management agreements or contracts—“management fee” or “profit and loss”, with many hybrids of these in place today.

 Management fee contracts require the contractor to provide a foodservice program specified by the owner/client, and in return they are paid a management fee, typically as a percentage of revenues.

 Profit and Loss contracts require the contractor to provide a foodservice program that they specify and control, and the contractor receives payment for this service in the form of profits that are generated by the foodservice operation.

 The most basic management fee contract has the lowest risk to the contractor (of getting paid), and the highest risk to the owner/client (of a subsidy—where expenses exceed revenues).  The operator is guaranteed a fee and unless that contractor performs extremely poorly, will continue to receive the fee for services.  There are various limitations on these types of arrangements today, typically a budget adherence feature, where the contractor must maintain a budget of expenses to be below the total revenues, while also continuously working toward increasing revenues.  Other hybrids include guaranteed break-even arrangements, where the contractor takes a risk of having to cover any losses (subsidy), either with a subsidy “cap” or splitting of any losses with the owner/client.  This shifts more responsibility (risk) onto the contractor.

As we move farther up the scale of shifting risk from the owner/client to the contractor, we have the Profit & Loss contracts and its many versions. The pure profit and loss contract is very similar to a lease arrangement; however, the owner/client typically pays for all overhead (heat, light, space, maintenance and upkeep) and capital expenditures (equipment, furnishings).  In this arrangement, the contractor takes most of the risks of losses and may take most or all of the profits, depending on whether a profit split or profit cap arrangement has been established.

 SUMMARY

Whichever arrangement is in place, the most successful programs are those that provide an opportunity for steady income to the contractor and strong control by the owner/client of the expenses necessary for this important benefit for its employees.  What you see as the consumer is the operator’s skill in encouraging you to purchase meals from them, with creative menu items that are freshly prepared for you.  If all the contract conditions are correct, it is a true win for the owner/client, the  foodservice contractor, and most importantly, for you.