The Complete Guide to Foodservice in Cultural Institutions: Your Keys to Success in Restaurants, Catering, and Special Events41584

Correctly administered museum restaurantsand special-events and catering services also generate goodwill andpublicity, enhancing an institution’s overall stature and importancea long-nee

The Complete Guide to Foodservice in Cultural Institutions

The Complete Guide to Foodservice in Cultural Institutions

Keys to Success in Restaurants, Catering,

and Special Events

Arthur M Manask

with Mitchell Schechter

JOHN WILEY & SONS, INC.

Front cover clockwise from left: © Long Beach Aquarium of the Pacific,

photograph by Mark Beat; Oldfields home, © 2000 Indianapolis Museum of Art,

photograph by Hadley W Fruits; Chicago Botanic Garden, photograph by

William Biderbost; © National Gallery of Art, photograph by Dennis

Brack/Black Star

Back cover from top: National Gallery of Art, Washington D C., © National

Gallery of Art; Chicago Botanic Garden, photograph by William Biderbost;

Long Beach Aquarium of the Pacific; The Los Angeles Zoo, photograph by Tad

Motoyama

Copyright © 2002 by John Wiley & Sons, Inc., New York All rights reserved.

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Foreword vii

Chapter 2 Understanding Foodservice Requirements in a

Chapter 3 The Role of Catering and Special Events in Membership and

Chapter 5 Performing Evaluations and Assessments: Challenge-Solution

Chapter 6 Developing and Marketing Special-Events Programs:

Chapter 7 Performing Special-Events Department Assessments:

Chapter 8 Analysis of Demand and Architectural Program Statement

v

by Jeffrey M Hurwit

Museums, by their very definition, are repositories of the world’s

greatest works of art and other treasures This is no accident.Museums (and other cultural institutions) reflect the collec-tive generosity, gifts, and talents of past and present-day individu-als from around the globe, many of whom have dedicated theirlives and careers to ensuring that the standards of excellence thathave come to define modern museums are neither diminished norcompromised

Museum-goers’ sense of appreciation comes not only from gaging in the core activities of a museum visit—gazing upon an artobject, participating in an educational presentation, attending a liveconcert that helps to interpret and enliven what’s been seen—butalso from other aspects of the visit, including experiencing the aes-thetic and functional qualities of the building, participating in

en-an on-site special event, en-and dining in en-an institution’s restauren-ants

or cafés

Today, museums and other cultural institutions must not onlystrive to acquire and display premier collections, they must alsoearnestly endeavor to attain the same level of quality in all theirfoodservice operations and services During a typical day at a mu-seum, visitors may spend several hours viewing top-quality work bysome of the world’s foremost artists of all time A pause for a meal

or refreshments in one of an institution’s foodservice facilitiesshould, ideally, serve as a no less pleasant respite Given this ex-pectation, it is truly essential that by their quality, variety, and service, museum foodservices provide as much satisfaction, wonder, and joy as visitors have experienced in viewing the exhibitsthemselves

vii

that can be generated by a well-defined and successful foodserviceand special-events program will contribute significantly to annualincome available to underwrite and even expand cultural institu-tions’ core activities Correctly administered museum restaurantsand special-events and catering services also generate goodwill andpublicity, enhancing an institution’s overall stature and importance

a long-needed reference work that can help administrators ing restaurants, special events, and catering at cultural institutionsperform our jobs to our full potential

oversee-Darrell R Willson

Administrator National Gallery of Art Washington, D.C.

We set out to produce this book for several compelling reasons.

The first is drawn from our understanding that business grams and missions have changed radically in recent years atmost museums, as well as zoos, aquariums, and other public cul-tural institutions This transformation has been driven both by ris-ing visitor volumes and by guests’ increasing expectations for service, which are challenging many administrators to maximize existing revenue-producing opportunities and seek to develop new ones

pro-We also believe that there are several other factors affecting themanagement of foodservice and facility rentals that administrators

at museums and other cultural institutions need to see addressed.These include the fact that public funding has recently been re-duced for many such institutions, requiring them to earn greaterrevenue from on-premise restaurants, catering programs, facilityrentals, and special events Increasingly forced to seek financial sup-port from visitor retail purchases and from parties and receptionsfor corporations and community groups, a growing number of cul-tural institutions are looking for guidance to optimize their food-service programs and create new or larger profit centers Most ad-ministrators also now realize the importance of ensuring that allfoodservice activities and facilities reflect their institutions’ com-mitment to providing the finest possible visitor experience

What this comes down to is that many administrators are nowseeking assistance in their efforts to expand and enhance their over-all visitor services This is giving foodservice new significance as ameans of “branding” and extending a cultural institution’s reputa-tion to new and returning guests

ix

manage the development, operations, renovation, and evaluation offoodservice programs at museums, zoos, aquariums, and similarcultural institutions As you read through this book, you will alsonotice a selection of case studies that recount problems or short-comings that foodservice programs have encountered and howthese impediments were overcome to provide improved financialperformance, management efficiencies, visitor satisfaction, and in-tegration with institutions’ missions and cultures Our case studiespresent a cross-section of cultural institutions, including examples

of “small” (less than 500,000 annual visitors), “medium” (500,000

to 1 million visitors), and “large” (over 1 million visitors)

All told, the goal we’ve set out to achieve is to help tors at cultural institutions succeed in their professional responsi-bilities and respond to the growing need for progressively run food-service operations Our intention has also been to offer a work thatyou, as an administrator at a leading cultural institution, can refer

administra-to over and over again, administra-to help resolve problems and evaluate theperformance of your foodservice program To this end, a glossary

of commonly used foodservice terms and phrases has been included

at the end of this volume We hope you will find the experiences

of your peers and our advice to be useful and effective in helpingyou oversee foodservices that both reach their full potential and ex-press your institution’s mission to your community

Iwas introduced to foodservice and catering in cultural institutions

in 1963, when I started work for my father and his foodservicecompany during the opening of the Los Angeles County Museum

of Art’s (LACMA) Plaza Café The experience gained at LACMAproved invaluable when we opened the Garden Tea Room at the

J Paul Getty Museum in Malibu, California, in 1974

Over a period of almost 20 years, we worked with museum ministrators and professionals at LACMA and the Getty, includingStephen Rountree, Barbara Whitney, and Catherine Klose (who arestill with the Getty Center), learning that operating museum cafésand providing catering services for special events in a museum set-ting pose unique challenges and opportunities

ad-After 25 years as an operator, I ventured into consulting My firstclients—Sherwood (“Woody”) Spivey, at the Phoenix Art Museum;Darrell Willson, at the National Gallery of Art; and Tim Boruff, atthe Indianapolis Museum of Art—encouraged me to expand ourservices to other cultural institutions in the months and years thatfollowed

Soon after completing the initial assignments that launched us inthe unique world of offering consulting services to museums, zoos,aquariums, historic homes, and botanic gardens, I had the chance

to work with Tom Mathews, at the Nelson-Atkins Museum of Art;Pat Grazzini, at the Minneapolis Institute of Arts; Warren Iliff, for-merly of the Phoenix Zoo and currently chief executive officer atthe Aquarium of the Pacific, in Long Beach, California; and Deb-bie Ives, at the Los Angeles Zoo All these individuals and the onespreviously named have been invaluable supporters and advocates asour practice and services have grown during the past eight years

xi

seum of Science and Industry; Teresa Sterns, formerly of the ence Museum of Minnesota; Laura Sadler, at the Field Museum;Sarah Christian, at the Denver Museum of Nature and Science;Susan Cole Bainbridge, Barbara Whitney Cole, and Suzanne Boué,

Sci-at the Chicago Botanic Garden; Melody Kanschet and StefanieSalata, at the Los Angeles County Museum of Art; John Easley, for-merly at the Minneapolis Institute of Arts and currently at theNelson-Atkins Museum of Art; and attorney Jeff Hurwit for theirinput and support in making this book become a reality

I also offer a special thank-you to Susan Babcock Manask, JoAnnaTurtletaub, of John Wiley & Sons, Inc., and coauthor MitchellSchechter, whose support and efforts are sincerely appreciated

I send thanks to the New York University student who sent me

an e-mail several years ago asking if there were any reference worksavailable on the management of restaurants and catering services incultural institutions It was this person, who said she had searchedhigh and low for information on this topic on the Internet and uni-versity libraries and could find nothing, who originally motivated

me to pursue publication of this reference work And a very specialthank-you goes to Ray Coen, who contributed to Chapter 6 andhelped me develop the vision, mission, and marketing strategy forManask and Associates, which has become the leading foodserviceconsultants to cultural institutions

CHAPTER

Foodservice and the Visitor Experience

1

Why do millions of people in countries around the world flock

every year to museums, zoos, aquariums, historic homes, andbotanic gardens? While we can’t state that a desire for mem-orable dining experiences or special events is an exclusive motiva-tor, it would be wrong to undervalue the relationship between cul-tural education and hospitality services

To us, it seems that even the basic activity of assembling and playing selected man-made artifacts or items from the natural world

dis-is itself an act of hospitality, one extended by the organizing groups

to the widest possible community and generations to come ning with the collections, menageries, and fabled gardens createdand displayed by rulers ever since antiquity, cultural displays haveplayed a significant role in extending new knowledge about theworld and humans’ place in it Improving the understanding of fel-low citizens is an act of generosity and good intentions—hospital-ity in its very definition

Begin-That the notion of offering more tangible nourishment (and anaesthetically pleasing and thematically coherent dining experience)

should naturally arise in environments established by cultural stitutions is easy to grasp What has proven more difficult for boardmembers, directors, and senior staff, especially in our time of in-tense competition for consumers’ disposable income and guests’ in-creasing expectations for service and entertainment, has been theexecution of foodservice strategies that successfully blend the ob-jectives of an institution with its audiences’ hospitality preferencesand the needs of foodservice operators Yet to operate institution-based restaurants, catering programs, facility rentals, and specialevents successfully, board members, executives, and administrators

in-of service programs must regard foodservices as extensions in-of theirinstitutions’ core mission of informing and entertaining the public.Just as every cultural institution was founded and is operated to ex-press a particular viewpoint, whether it be the meaning and history

of the fine arts or the interrelatedness of elements of the naturalworld, so, too, should this purpose be applied to all aspects of vis-itor foodservice, from the simplest mobile snack cart to the grand-est wait-served special event

Museums and other organizations must also position their service programs to meet their particular audiences’ needs and ex-pectations We will address the logistics and processes by which thiscan be accomplished in subsequent chapters, but to begin to un-derstand guests’ foodservice likes and dislikes, programs should beviewed from three aspects—service (including management andplanning), products, and facilities

food-Most guests who visit a cultural institution’s foodservices

gener-ally expect service that is polite, quickly responsive, knowledgeable,

and offered in their own language Younger and elderly guests, pecially, may be unfamiliar with a cafeteria’s scatter-system servingpattern or a café’s self-service protocols, or they may have a hardtime deciphering the choices presented by a multipart menu board.These kinds of visitor challenges, as well as the more sophisticateddifficulties that can arise at catered and special events, need to beunderstood and addressed as proactively as possible by staff, man-agers, and senior personnel to ensure that guests receive an optimalservice experience

es-Due to the breadth and growing cultural diversity of the guestbase served by institutions such as museums, zoos, botanic gardens,

historic homes, and aquariums, foodservice menus need to be morediverse and creative than ever, though few items need to be rotatedmore often than seasonally to satisfy the needs of institutional staff,due to the relatively low frequency of repeat traffic Today’s guestswant items that will be served quickly, can be eaten without for-mality (except at table-service facilities and events), appeal to atleast two generations of family members, are fresh (not premade)whenever possible, and are both rich in flavor and relatively health-ful Food and beverage items should be of “high street” retail qual-ity, and all merchandising and branding should be identical orequivalent to commercial standards, since neither your guests’ tastebuds nor their learned expectations degrade when they walk intoyour facility In fact, since Americans now consume more mealsaway from home than in it, aspirations for food quality and choicemay be even greater for cultural institution foodservices as, rightly

or not, guests usually compare them to commercial counterparts.Because many cultural institutions are housed in eye-catchingspaces and/or grounds and excel at creating environments con-ducive to evoking particular visitor experiences, the development

of appealing venues for visitor foodservices can and should be one

of a program’s strengths It is useful for board members and seniorstaff to keep in mind, however, that many foodservice customersarrive at hospitality locations at least somewhat fatigued (and, onehopes, also exhilarated) after long walks perusing exhibits, so com-fortable, ample seating and relaxing lighting and noise levels shouldall be high priorities when facilities are planned or renovated.Many visitors to cultural institutions also appreciate a chance toenjoy a break outside; therefore, patio, terrace, or courtyard seat-ing is almost always popular And, regardless of their check aver-ages or level of decor, foodservice spaces offer excellent opportuni-ties to remind guests of popular exhibits, reinforce an institution’spurpose (through posters, theme menus, wall treatments, and thelike), or allow access to a notable installation, such as a sculpturegarden that can be viewed through a dining facility’s windowedwalls In this way, guests are encouraged to remember why theyhave chosen to visit and are able to feel that they are still assimi-lating an institution’s experience even as they are taking nourish-ment or refreshment

Regarded in its entirety, the successful operation of restaurants,catering, and special events can do much to burnish—or tarnish—

a cultural institution’s reputation in its community As the istrators cited in Chapter 3 point out, well-run hospitality programsand events can attract new clientele, daily revenue, donations, andbequests; forge productive relationships with new corporate spon-sors; help to promote special exhibits and exhibitions; and generallyincrease visitor satisfaction with an institution’s service offerings.However, these same programs and events can also, if presentedindolently, indifferently, or even just inconsistently, diminish a cul-tural institution’s renown and curtail the degree of support it finds

admin-in its community duradmin-ing fund-raisadmin-ing and membership drives.The point is, the operation of your restaurants, catering pro-grams, and special events should never be taken for granted; nor (as

we will show) should you assume that your foodservices havereached their peak of either efficiency or creativity Ensuring thateach component of your hospitality program is judged first ac-cording to how appropriately it enhances guests’ on-site experiencewill do much to keep these services on target Our ageless interest

in humankind’s artistic expressions and the world’s fauna and flora

is complemented by our equally ancient desire to be welcomed,nourished, and made to feel as if our needs have been met with at-tentive concern Cultural education and hospitality services, thoughnot synonymous, overlap in their connection to our civilization’sritualistic roots, as they both offer us a means of creating order,even drawing inspiration, from the ineffably mysterious in life

The opening of a new cultural institution or the expansion of an

existing facility provides an important opportunity to considerwhich types of foodservices would best serve an institution’s vis-itors and coordinate with its mission This chapter covers the fac-tors that should go into an administrator’s decision about whattypes of foodservice to offer in a new or expanded facility

The first decision is whether a new foodservice operation is even

a good idea Administrators need to look carefully at the followingquestions:

䊏 Why is adding another food/beverage location desirable?

䊏 Have visitors (as well as staff and volunteers) been surveyed todetermine if there really is a need for an additional facility?

䊏 If the new facility is popular with visitors (including staffand volunteers) but is not profitable to operate, can it beeliminated without undue ill will?

䊏 Can a temporary form of foodservice be developed and ated where the permanent operation would be located, allow-ing a sort of trial run to see if the planned program meetsidentified visitor needs and financial operating criteria?

situ-TYPES OF FOODSERVICE OPERATION

Once the need for a new operation has been established, the nextdecision is what type of facility it should be Foodservices provided

in cultural institutions such as museums, aquariums, botanic dens, historic homes, and zoos typically are offered from one ormore of a variety of facilities, including:

A cafeteria typically includes a full or finishing kitchen, a serverycontaining multiple points of service or food concepts (pizza sta-tion, grill, deli, salad bar, and the like), and a dedicated seating area.Serveries can be designed either with a single, continuous servingline or, more usually, in a scatter-system layout with separated, dis-persed points of sale or food concepts Some item pickup pointswill be self-service (salad bar, beverage station), while others will bestaffed by servers and/or cooks (hot-entree station, grill) Cafeteriasmost often offer sufficient menu variety for customers to select one

or more full meals during each day of operation Decor and nishings will usually be more functional and durable than aesthet-ically impressive, though theming these to cultural institutions’ col-lections and exhibits will enhance the ambiance Lately, cafeteriashave begun to emphasize display food preparation at servery points

fur-of service, reducing space and equipment requirements for back-fur-of-the-house kitchens Cafeterias’ dining and seating spaces are alsoused as special-event venues; at such times, servery areas are screenedoff while dish up and service take place Cafeterias are usually open

back-of-to both visiback-of-tors and staff, though separate facilities of this type can

be built to accommodate these customer groups individually terias with separate, branded food concepts and/or distinct points

Cafe-of service are also referred to as “food courts.”

Cafés

Simpler in concept and food selection than restaurants and rias, cafés are essentially like a “Starbucks with a limited menu” of fin-ger foods with coffee and noncoffee beverages, with seating provided

cafete-Snack Bars

Snack bars, which commonly serve primarily visitors to a culturalinstitution rather than staff or members of the public, range in de-sign from built-in-place “shops” to mobile units situated in busytrafficways Rather than providing full meals, snack bars customar-ily offer items such as premade cold sandwiches and salads, bakedgoods, chips, fruit, candies, and ice creams, as well as hot and cold

beverages Typical equipment includes cold-holding units, chandising racks or shelving, menu boards, and beverage dispensers.Customers serve themselves, and these snack bars almost always re-quire no more than one or two staff to handle transactions andkeep food and beverage displays and holding units fully stocked.Depending upon their location, snack bars may be adjacent tofixed or temporary seating for up to a few dozen customers.

mer-Coffee Bars

As the name suggests, coffee bars (which, like snack bars, range

in design from built-in-place “stores” to mobile, temporary blies) are intended to offer a variety of coffee-based drinks, bakedgoods, and other light snack foods to members of the public andstaff at cultural institutions Product storage units, brewing and dis-pensing equipment, menu signage, and merchandising shelving orracks are all typically required in facilities of this type Dependingupon facility size and customer demand, coffee bars may requireanywhere from one to several staff This sort of bar is more likelythan a snack-based facility to have themed decor reflecting a cul-tural institution’s identity and ambiance, and to have dedicatedseating adjacent to points of service

assem-Kiosks

Kiosks are usually temporarily or permanently assembled standing foodservice points of sale, typically located in high-trafficareas within or on the grounds of a cultural institution Units ofthis sort are sometimes branded (e.g., Mrs Field’s Cookies) Be-cause of their flexible design and “footprint sizes,” kiosks can beused to display and sell a wide variety of items, including alcoholicbeverages, grilled or heated foods, soups, baked goods, packagedsnacks, soft drinks, coffees, and teas A kiosk’s labor requirementsshould not exceed two staff members If hot foods or drinks areserved, equipment can include roller grills, hot holding wells, mi-crowave ovens, and brewing and dispensing units; otherwise, onlystorage units, cold holding cases, and merchandising racks or shelv-ing will be required Kiosks, unless of a “fixed” design, rarely havepermanent utility or plumbing connections and usually do not

free-have adjacent dedicated seating Facilities of this type traditionallyserve primarily museum visitors and not staff or members of the public.

Carts

Mobile by definition, carts are small, versatile points of sale thatare usually situated wherever guest traffic is greatest They are fre-quently used to augment built-in-place foodservice facilities duringpeak demand periods indoors and on outdoor patios A cart’s prod-uct assortment is limited only by the imagination of the foodser-vice provider and the tastes of institutional visitors and/or staff, buttypically includes packaged snacks, baked goods, fruit, premadesandwiches, and salads and soft drinks in containers More elabo-rate carts, with hot wells, grill tops, and equipment to brew anddispense hot beverages, are available but, when so equipped, thesemobile service points will be larger, more difficult to relocate, andmay require utility and plumbing connections Due to their verylow labor requirements, portability, and flexible product-display ca-pabilities, carts can provide an acceptable, low-cost alternative tobuilt-in-place or freestanding permanently assembled foodservicefacilities Depending upon their location, carts may be supported

by adjacent customer seating

QUESTIONS THAT GUIDE DEVELOPMENT

While different types of cultural institutions tend to have differentmixes of foodservice options and thus different planning needs—for example, a museum or aquarium is more likely to consider arestaurant, café, or cart as part of a facility expansion, whereas zoosare more likely to include snack bars/stands and carts as part oftheir initial building project—there are certain key questions thatneed to be addressed by any institution during the planning process

䊏 What are the capital costs associated with the project? Doesthe institution have to pay them, or can a foodservice opera-tor be expected to front the build-out cost?

have to be subsidized?

ex-isting foodservice operations, catering, and special-eventsprograms?

outsourced to a contract management company or cial catering firm?

commer-PERFORMING MARKET RESEARCH

TO ASSESS DEMAND

Performing market research is the best way for administrators to termine with any certainty whether a proposed new foodservice facil-ity will attract customers If an institution is adding a foodservice fa-cility as part of an expansion or renovating an existing facility, the firststep is to survey current visitors, members, volunteers, board mem-bers, and staff If the facility will be located to afford the general pub-lic access without having to pay a separate museum admission, thenlocal residents and/or members of the business community who mightfrequent the facility should be included in the research

de-This market research can provide preliminary direction on able users, concept, menu selections, hours of operation, style ofservice (such as table service versus self-service), size (number ofseats and total square footage), and price points Such research willalso be helpful to the prospective facility operator (or manager, ifthe facility is to be operated in-house) In addition, it can help de-termine if an institution is a likely candidate for a branded restau-rant concept; that is, a well-known local, regional, or national food-service brand that in and of itself will draw visitors to the facility

prob-It is worth repeating here that market research should also be ducted on an ongoing basis as a way of measuring the effectiveness of

con-the current foodservice program and of determining whecon-ther changesneed to be made to ensure the highest level of customer satisfactionand the largest possible customer base and participation.

visi-mined by analyzing 12 months’ worth of visitor counts, broken out

by day of the week and by month (If an expansion is planned, itor count projections for the new addition should be taken into

vis-account, as well.) Traffic patterns will help determine where the

cility should be sited; the best location is where visitors pass the cility at least twice, once upon entering and again when leaving.Such a location will ensure the highest possible participation level,since visitors have at least two chances to make a purchase As well,

fa-a newly opened foodservice operfa-ation will be further enhfa-anced if it

is in a “free zone,” or a location the public can access without ing to pay admission A free zone location will further increase vis-itor usage, as well as enhance the prospect that the facility will at-tract “restaurant only” customers from nearby residences and/orbusinesses (If it cannot be placed in a free zone, customers can be

hav-given an identifying button or tag that permits free access to thedining facility.)

A new foodservice’s visitor capture rate is likely to run between

20 and 35 percent, depending on where the facility is located The

35 percent figure would be a safe estimate for a restaurant situatednear an entrance, while 20 percent rate (or less) would apply to arestaurant that is not as convenient or easy to access The capturerate can be used in conjunction with other data to help determinethe size of the facility (see Chapter 8 for more information)

FINANCIAL CONSIDERATIONS AND

JUSTIFICATION FOR A NEW FOODSERVICE

As a general rule of thumb, a cultural institution can expect its lic restaurant or other foodservice facilities to generate from $1.00

pub-to $3.00 per visipub-tor in gross revenue Why is there such variability?Determining factors include:

an entrance, where all visitors walk by it at least twice, or is it

in a remote location, where visitors will have to search for it?

payment of an admission fee?

the institution itself?

A primarily adult group will generate higher per capita enue than an institution that has children and school groups

rev-as a large percentage of its visitor brev-ase

with visitor demographics, it is likely that the per capita revenuewill be higher than if an unbranded restaurant was installed

OUTSOURCE OR SELF-OPERATE?

The next step is to determine whether to outsource or self-operate

the new facility Most not-for-profit cultural institutions do not

self-operate their foodservice programs, because running a restaurant orother dining facility tends not to fit well with an institution’s pri-mary mission Therefore, it is advisable to prepare an estimate of in-come and expenses to determine whether the proposed foodservicewill be financially viable This can be done internally or by a knowl-edgeable outside consultant If outsourcing is the desired direction,the request-for-proposal (RFP) process should be started as early inthe planning stage as possible, with the goal of having the operator

on board during at least part of the planning

Most restaurants in cultural institutions are not big ers, especially when operating costs and expenses such as utilities,building repairs and maintenance, heating and air-conditioning,and related services are factored in (such expenses are often not seg-regated or tracked) There is no precise rule linking annual visitorcount to profitability—there are institutions with annual visitorcounts of 100,000 to 200,000 or less that have profitable, self-sustaining restaurants, and there are institutions with 500,000 ormore annual visitors that have unprofitable or marginally profitablefoodservices Generally, it is safe to assume that a well-located restau-rant with high visibility and significant walk-by traffic will draw alarger visitor count, giving it a greater likelihood of financial success

moneymak-If a restaurant is not well located or is too small to handle visitorfoodservice needs on its busiest days, then establishing secondary,temporary points of sale such as kiosks or carts should be consid-ered However, we do not recommend setting up permanent sec-ondary points of service, as this risks cannibalizing sales from other,more potentially lucrative foodservice facilities Also, while addi-tional locations may increase overall foodservice revenue slightly,they can be very costly because of the attendant overhead (includ-ing labor, utilities, equipment repair and maintenance, janitorial ser-vices, and related out-of-pocket costs) Permanent secondary food-

service facilities should be considered only when a primary restaurant

cannot adequately service the average daily visitor count

REMODELING AN EXISTING RESTAURANT

In the restaurant industry, a rule of thumb is to reconceptualize arestaurant about every seven years This same timeline should be

applied to a restaurant located in a cultural institution When areconceptualization is being planned, it is useful to conduct mar-ket research among current restaurant customers and, equally im-

portant, visitors who are not currently patronizing the foodservice

operation, to gain valuable input on which changes most need to

be made in order to provide guests with a dining experience towhich they look forward

Dining trends and restaurant-goers’ tastes continuously evolve,and administrators must be sure that their foodservice keeps upwith these changes; otherwise customer counts and per capitaspending will go down over a period of years Administrators mustnever forget that visitors have a choice to dine in the institution oroutside of it, and they must be sure to keep up with the many out-side competitors looking to capture the same foodservice dollars.When undertaking a foodservice remodeling, especially in olderbuildings, administrators should anticipate that it will take longerthan planned and that the project may well go over budget, due tothe many unknowns that will be encountered during and after de-molition and during actual construction Another consideration isthe need to provide a temporary foodservice program during anymajor renovation It is important to satisfy visitors’ foodserviceneeds, if at all possible, during the period when a restaurant orother facility is closed Temporary services can be offered fromcarts, fixed points of service set up in a gallery space, or even a tent(space and weather conditions permitting) If an institution’s cur-rent foodservice routinely serves, say, 30 percent of daily visitors,the goal should be to serve the same 30 percent during remodel-ing, albeit with a more limited menu It is usually sufficient to pro-vide just hot and cold beverages, packaged sandwiches and salads,and bakery, dessert, and snack items All of these foods can be pre-pared off-site and brought in daily It is important, however, tohave ample refrigeration on-site to ensure safe holding and service

of perishable foods

If a cart setup is selected to provide provisional service prior to

a new permanent facility’s opening, administrators need to view several manufacturers that sell carts designed for public venues.Administrators should also interview users of these carts at institu-tions most similar to theirs to learn about likes and dislikes, what

inter-works and what does not, and what peers would do differently ifthey could do it again Be aware that most local health departmentshave very strict rules and guidelines governing food-and-beveragecart operations to ensure the health and safety of customers Ad-ministrators must be sure that they (or their operator) thoroughlyresearch health department requirements, including storage andcleaning, before ordering or purchasing any mobile food-servingequipment A cart manufacturer with extensive experience sellingequipment appropriate for public attractions and cultural institu-tions can be a valuable source of real-world lessons and advice, but

be certain to verify all information with the local health department

CAPITAL AND START-UP COSTS, AND

COMPOSITION AND FUNCTION OF

THE DEVELOPMENT TEAM

The cost of building out a café or restaurant in a museum, ium, or other cultural institution can range between $150 and

aquar-$300 per square foot (⫹/⫺), depending on the style, look, type ofservice, and quality of materials and finishes selected

Early during the project planning process, the project teamshould include the building architect, a foodservice facility designerrecommended by the architect or by the foodservice operator or op-erations consultant, an institution representative, and the outsidefoodservice operator (or manager if facilities are self-operated) Ad-ministrators need to be certain that the selected foodservice facilitydesigner has had experience on similar projects

If an institution’s foodservice operator is a large regional or tional restaurant/foodservice company, it is likely that this organi-zation will provide the facility design, either generating it in-house

na-or through a designer who is familiar with its restaurant concept(s).Capital costs associated with the build-out of a museum’s restau-rant can be paid by the institution, by the operator (if outsourced),

or shared In most cases if the institution pays capital costs, the erator will be more interested in running the new facility When

op-an institution looks to op-an operator to put up all or part of a new

facility’s capital costs, this operator should be looked upon merely

as a financing source—that is, when the facility is opened, all niture, fixtures, and equipment (FF&E) will be owned by the in-stitution, not the operator When an operator provides the capitalfor a build-out, the total dollar amount is usually amortized over

fur-a ten-yefur-ar period (fur-assuming fur-a low- to mid-six-figure investment

as a minimum) with a buyback option This means that in theevent the operator’s contract is terminated for any reason beforethe end of ten years, the institution will have to reimburse the un-amortized capital investment (usually interest-free) unless it canpass off the obligation to a successor operator Therefore, it should

be an institution’s goal, if at all possible, to provide the capital

to build out a new foodservice operation as part of the overallbuilding budget

It is common for an external operator to provide the capital topurchase (and, in this case, own) the small wares and loose equip-ment, including point-of-sale (POS) system, required to run a newfoodservice facility, as well as pay all preopening and start-up ex-penses and provide petty cash and change funds If the facility isself-operated, these expenses will be incurred by the institution

CONCEPT DEVELOPMENT:

WHO’S RESPONSIBLE?

If management of a new foodservice is being outsourced, the ator will develop the overall program (including menus, style of ser-vice, presentation methods, merchandising, and other elements)subject to the prior review and approval of the institution If ad-ministrators want a highly themed restaurant, then their institutioncan create the concept with the help of outside consultants whospecialize in such development Contract management and restau-rant companies typically either have a collection of concepts amongwhich administrators can choose or will be willing to develop aconcept in conjunction with an institution, subject to prior reviewand approval by the institution If the facility is being self-operated,the foodservice manager may, depending on his or her capabilities

oper-and the point at which he or she is brought on board, be able toestablish the theme or concept An outside consultant who special-izes in concept development may also be hired

EQUIPPING THE FRONT AND

BACK OF THE HOUSE

Foodservice fixtures, furnishings, and equipment should be selectedaccording to the proposed facility’s concept, design, menu, and ser-vice program as developed by the project team (architect, foodser-vice facility designer, and operator or foodservice manager) But be-cause, as noted above, all FF&E will usually belong to the culturalinstitution, and because it will usually remain in place for manyyears, it is important for administrators to maintain control andright of final approval over all such selections and budget

The best choices are durable products with appropriate ics that reflect the image of the institution If a foodservice providerproposes any equipment or signage that is proprietary to the oper-ator or its suppliers, administrators should be sure the contract withthe outsourced company provides for the removal of these itemswhen it leaves (at the institution’s option) This will enable admin-istrators or a successor operator to replace the equipment withitems more suitable to a new menu program or food concept

aesthet-CONTROLLING ARCHITECTURAL INPUT

Architects are often most concerned with establishing the designstatement a foodservice operation makes However, it is importantfor administrators to be sure there is a balance between aestheticneeds and the practicalities of operating a foodservice facility of anytype This means that administrators should be at pains to listen tothe restaurant operator, foodservice designer, and/or foodserviceconsultant during the design process

ESTIMATING FINANCIAL RETURN

A rule of thumb for institutions with annual attendance of 500,000

to 750,000 is to expect a return from all foodservice operationsranging from 5 to 10 percent of total annual gross revenue As an-nual attendance increases, higher gross percentage returns can beexpected; for example, a museum with 1 million or more annualvisitors can expect an average return from its foodservice operations

of at least 10 to 15 percent—though it is important to note thatthe return on a restaurant or café will be lower than that on cater-ing (Different types of institutions can expect different rates of re-turn In zoos, for instance, the base return may be in the 10 to 15percent range for annual attendance of 500,000 to 750,000 andapproach 20 to 25 percent if annual attendance tops 1 million.)

If an institution provides the capital to fund a build-out of a new

or expanded foodservice facilities, the annual percentage return will

be higher; conversely, if the operator is required to provide the ital for build-out, an institution’s percentage return will be lower If

cap-a restcap-aurcap-ant opercap-ator is cap-also the institution’s exclusive ccap-aterer, viding both food and alcoholic beverages, administrators are likely

pro-to see a higher overall percentage return If the restaurant operapro-tor

is only the exclusive alcoholic beverage provider (which is common)and the nonexclusive food caterer (whose presence is supplemented

by a list of approved caterers), the return will not be as high (notcounting income from approved caterers, if any) as under a totallyexclusive arrangement

Restaurants in cultural institutions with annual attendance below500,000 tend not to be very profitable in themselves However,when combined with catering opportunities, both internal (eventsfor the institution) and external (served to outside groups and orga-nizations that book events at the institution), a restaurant operation

is able to spread fixed overhead such as management and chef ’scompensation over both programs, resulting in a more potentiallyprofitable venture It must be noted that there are a number of verysmall (under 100,000 annual visitors) cultural institutions in theUnited States that have very successful and profitable restaurants.Profitability is a possibility when a cultural institution’s foodser-vice facility becomes a destination restaurant on its own account

The Ella Sharp Museum, in Michigan; the Nelson-Atkins Museum

of Art, in Kansas City; the Denver Art Museum; the Bowers seum, in Orange County, California; and the Arkansas Art Center

Mu-in Little Rock are but a few examples of smaller Mu-institutions whoserestaurants have become attractive destinations in and of them-selves Though many institutions would like their restaurants to be-come financially successful destinations that can support their in-stitutions’ missions and goals in regard to visitor services, it may be

unrealistic to think that any cultural institution’s restaurant can

be-come a destination, though it is a good goal to strive for, as it helpsensure that the facility’s operator or manager will work to achievethe highest food and service standards

Though destination restaurants such as the ones mentionedabove may be truly profitable, administrators should look carefully

at the definition of profitability they are using Oftentimes, an stitution will determine profitability by subtracting from foodser-vice’s gross revenue the direct costs of food, beverages, labor, andsupplies without including utilities, bookkeeping and accounting,insurance, security, licenses and taxes, repairs and maintenance, jan-itorial supplies, telephone calls, pest control services, trash removal,armored-car transport of deposits, and other expenses, thus making

a restaurant seem profitable when it is, in fact, subsidized by the stitution This is another example of why administrators mustknow how all costs are being accounted for

in-When outsourcing, following is a list of the most common waysfoodservice expenses are shared between operator and institution:

(dining, servery, kitchen)

cleaning in dining areas

Ceiling and light fixture repair Pest control*

and maintenance

Advertising and promotion*There are three ways for administrators to determine what sort ofcommission or return from foodservice operations their institutionshould and can expect:

operators are willing to payWhile consultants who are knowledgeable about hospitality ser-vices in cultural institutions can offer advice and opinions, the bestway to determine the financial potential of foodservice facilities at anindividual institution is by initiating an RFP process that includes asmany potential operators as possible and presents a variety of restau-rant, catering, and service scenarios Determining appropriate finan-cial return through competitive bidding is the best and most accu-rate way to forecast projected foodservice income If planningself-operation, an experienced foodservice manager and/or a qualifiedconsultant can assist administrators with estimates and projections.Even if an institution’s foodservice is self-operated, administratorsmay still be able to draft an RFP and explore the financial ramifica-tions of outsourcing as an alternative However, we must stress that

we do not recommend an RFP process be conducted solely to checkpotential financial arrangements unless an institution is seriouslyconsidering outsourcing Prospective operators are not likely to ex-pend the time and money to submit a serious proposal (and it is notfair to ask them to do so) unless there is a real possibility that aninstitution will convert from self-operation to outsourcing if thefinancial and operational proposal so justifies

* Items that can be provided by either party.

To some extent, administrators can benchmark or compare theirfoodservice facility’s financial potential to those in similarly sizedcultural institutions However, while institutions may seem similar

on the surface (having comparable annual attendance figures, forinstance), when issues such as the location and type of foodser-vice(s), square footage of facilities, menus and menu pricing, visi-tor demographics, geographic location, outsourcing versus self-operation, number of points of sale, catering services, and alcoholicbeverage service agreements are reviewed, administrators will findfar more apples-to-oranges than apples-to-apples comparisons

SELF-OPERATION

Self-operation of foodservices is found most often in zoos, less quently in museums, botanic gardens, and aquariums, because self-operation historically has been part of zoo culture Many culturalinstitutions that currently self-operate foodservices with annualrevenues of around $2 million or less often times consider out-sourcing alternatives at some point Institutions that have highergross foodservice revenue are more likely to be successful, bothfinancially and operationally, at self-operation than are smallerprograms—though, as noted above, there are exceptions

fre-The ultimate success driver for any foodservice operation,whether self-operated or outsourced, is the on-site foodservice man-agement team, particularly the manager In the case of a self-operated restaurant, it tends to be more difficult for the parentinstitution to attract and hold outstanding management talent,because, in a single institution there is no career path or growth op-portunity equivalent to that which a manager would enjoy with achain restaurant organization or contract foodservice company.Further, most cultural institutions do not offer the kind of profitsharing and other financial incentives that are commonly available

in the private sector For these reasons, it is common for a operated foodservice in smaller institutions to have a revolving doorwhen it comes to the on-site manager’s position Larger institutionsthat can pay top dollar for their management (and culinary talent)tend to have fewer problems in this regard

self-When Should a Cultural Institution’s Foodservice Be Self-Operated?

Well-run self-operated foodservices can be more profitable (orless subsidized) than outsourced programs, because there is no thirdparty earning a profit and thus all profits go to the institution.However, oftentimes an experienced outside operator can managefoodservices (especially smaller programs) more efficiently, purchase

at lower prices, need fewer employees (because their proven ating systems are more labor efficient), and experience less staffturnover The most market-savvy professionals are most often em-ployed by foodservice contractors that can offer a cultural institu-tion branded concepts and foodservice programs that may increasecustomer spending enough to cover the operator’s profit, resulting

oper-in no loss of net oper-income (and perhaps even a gaoper-in) for an oper-tion, as well as a significant reduction in administrative hassles.Where administrators choose self-operation, we strongly recom-mend using the services of professional foodservice consultants,who can provide guidance, input, audits, and assessments of food-service performance on a regular basis Most cultural institutionsthat self-operate their foodservices do not have senior administra-tors or accounting and auditing personnel who are familiar with theoversight of a foodservice department While certain standard busi-ness principles apply, managing a foodservice business is very dif-ferent from managing the primary operations and services of a cul-tural institution

institu-Mastering Manager Selection

Selecting and retaining the most qualified on-site manager is themost important and most difficult foodservice-related task for ad-ministrators at any cultural institution It is important to ensurethat an institution is offering a competitive financial package (salary,benefits, and bonuses—or regular salary increases if the institution’spolicies will not allow a bonus or incentive program) Administra-tors should look for managers whose experience in the foodserviceindustry best prepares them for the responsibilities at their partic-ular institution During the interview process, administrators shouldask why the prospective foodservice manager wants to work at the

institution, as opposed to pursuing a career in the commercialrestaurant/hospitality industry It is also important to find out howmanager candidates perceive their future at the institution Especially

if there are no foodservice industry staff members at the institutionwith foodservice backgrounds, we recommend working with a searchfirm or using a foodservice industry consultant who is experienced

at recruiting to assist with the interviewing and screening After thecandidates are narrowed down, be sure the first choice meets withand is interviewed by several department heads and others at the in-stitution with whom he or she will be dealing on a day-to-day basis,

to see how this candidate fits with the institution’s culture

Preparing to Add Staff

Foodservice managers at cultural institutions handle day-to-daysubordinate staffing Before an institution opens a new foodservicefacility, its human resources department should become knowl-edgeable about issues relating to the recruiting, training, salariesand wages, and working hours and conditions of foodservice work-ers These issues are often different for foodservice workers than forother employees at cultural institutions Administrators, therefore,need to anticipate and budget for what is needed to support ap-propriate staffing

OUTSOURCING—WHEN IS IT

THE RIGHT OPTION?

Outsourcing allows a cultural institution to provide visitors, staff,and volunteers with necessary foodservices without having to un-dertake the management of these programs itself While transition-ing from self-operation to outsourced operation may cause someturnover in foodservice management and possibly some disruption,these difficulties can be outweighed by the long-term benefits Forexample, an outside operator will handle all bookkeeping and ac-counting, human resources functions, purchasing, and related tasks.And while an institution might give up a little profit if it outsourcesits foodservices, in all likelihood it will get most, if not all, of it

back through reduced employee turnover, better purchasing power,and improved training, systems, food merchandising, presentation,management procedures, advertising and promotional programsand lower administrative costs.

Prospective outside foodservice operators typically come fromthe following organizations:

Preparing for Operator Selection:

The RFP Process

Cultural institutions can select an outside foodservice operatorthrough an RFP process that may be either formal or informal.The formal RFP approach includes the following steps:

1 Preparing a list of all prospective operators, grouping rately those that serve clients locally, regionally, and nationally

sepa-2 Advertising the business opportunity in national vice trade publications and through the state restaurant association

foodser-3 Sending letters to all prospective operators

4 Prequalifying prospective proposers

5 Preparing an RFP document that sets forth:

a An introduction and background

b The institution’s goals and objectives for its foodservice erations (restaurant, catering, vending, alcoholic beveragesales, etc.)

op-c A description of the services to be provided

d Submittal information, including operator data (such as afinancial statement and credit references), client references(current and former), proposed services (concept, menus,prices; if remodeling and renovation or build-out are de-sired, renderings, floor plans, layouts, and capital invest-

ment budget should be included), a financial proposal tothe institution, a transition and/or implementation planand timeline, proposed manager and on-site staffing andorganization, contract terms and conditions, confidentialityterms, RFP schedule, and disclaimers

e Criteria for evaluating the submittals

6 Holding a pre-proposal meeting

7 Distributing questions and answers from the pre-proposalmeeting to all potential providers

8 Conducting reference checks on finalist operators

9 Attending oral presentations and tastings by and and-answer sessions with finalists

question-10 Touring other, similar operations run by finalists

11 Interviewing finalists’ clients (should be done by institution’sadministrators via personal phone calls)

12 Interviewing proposed on-site manager candidates

13 Selecting the preferred operator

14 Conducting negotiations with the preferred operator

15 Drafting a letter of intent

16 Handling contract negotiations

17 Preparing a contract document

18 Making a transition from the incumbent operator or operation to the new operator (who will start-up a new facility)

self-An informal RFP process, on the other hand, starts with a shortlist of prospective operators and then moves through most of theabove steps on a one-on-one, negotiated basis

Sourcing Operators Successfully

While it is difficult for a cultural institution to develop a prehensive list of prospective foodservice operators, a good rostercan be developed from the following sources:

䊏 Contacts in the local restaurant community found throughboard members and/or the local chamber of commerce

food-service RFP processes with similar cultural institutionsThe more difficult task is determining which prospective opera-tors have the experience, expertise, organization, and financial re-sources to become a good partner for an institution’s foodservice Ifadministrators conduct a formal RFP process, requesting a tokenpayment ($25 to $50) from all prospective operators who wish toreceive the RFP is a good way to rule out those who are not reallyinterested (or qualified).*

Usually only larger, more sophisticated foodservice operators willtake the time and spend the dollars required to respond to a for-mal RFP process Local restaurant and catering operators usuallyare not equipped to respond in this way but will respond if trulyinterested If there is a local restaurant or catering operator that is

a likely and worthy candidate to operate a cultural institution’sfoodservice facilities and program, engaging in direct negotiationsthat follow most of the above steps is an optional approach

Common Contract Terms and Conditions

Contract options typically include either a management fee or aprofit-and-loss arrangement The following terms and conditionsare applicable to both types of contract, though they may varyslightly when applied to either type, depending upon individual ne-gotiations between the involved parties

*Another approach is to have operators respond to an RFQ (request for qualifications) ument This will create an extra step, but if administrators are doing their own RFP process, this might help them decide which operators should and should not be on their list.