Modena, an Italian restaurant opening in Brooklyn, New York, recently hired a consultant to assist with the opening of the new operation. The owners, Jeff and Nancy Brown, have never owned a restaurant before.
The space is a 38 seat restaurant, with an 8 seat bar, located on an off avenue between two very busy avenues in Brooklyn. The neighborhood is very gentrified, with little Italian food exposure, so there is serious upside to the property. Jeff is in real estate, so he secured a long term lease at a favorable rate.
The menu appetizers range from $8-$15, the entrees from $15-$22, wines by the glass range from $8-$12, beers are $6, and specialty cocktails cost $9. Hours of operation are; dinner service, 5PM to11PM Monday through Sunday, brunch on Saturday and Sunday from 10AM to 3PM, and a late night bar on Saturday and Sunday from 11PM to 3AM.
Hospitality Enhanced has been hired to do the sales projections for the property, and came up with estimated figures weekly figures, with assumptions expected for the first 60 days of operations.
Hospitality Enhanced also came up with projected labor scheduling needs to staff appropriately for the projected sales.
The cost of this labor is as follows:
This means that projected labor cost will far exceed the industry standard of 30%.
Jeff Brown, the owner, is upset at these figures, and demands an explanation. “How can we run a restaurant with such high operating expenses?”
What should the consultants at Hospitality Enhanced recommend?
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