Recipe for Success

3 October 2019

Considerations to ensure your kitchen is cost-effective, with or without a contractor.

Portion control, expense management and appropriate staffing are three critical elements that all clubs must consider in order to be profitable.

When it comes to kitchen profits, why do some clubs excel while others struggle to break even?  There are a number of factors involved here, including the perennial question regarding in-house versus contact catering.

Each club situation is different and it is important for the club to do their due diligence on the options presented.  One key issue is that regardless of who "owns" the kitchen, your customers see any food offering as belonging to the club.  Your contractor has to understand that is is also the club's reputation on the line, not just his or hers.  Therefore, if you have a contractor, you must work together to ensure that you are providing a winning offering - for the patrons, for the club and for the contractor.

In-house kitchens rely on finding and keeping at least two good chefs (one can't do every shift!) and finding and keeping at least two good kitchen hands, as well as a couple of reliable 'dishies".  Funnily enough, that is the same challenge for the contract caterer in your club - although, usually, one of the chefs is the owner, so they only need to find one other decent chef.

The next question is around expenses.  Many clubs offer contract caterers a kitchen to operate in rent-free and with no outgoings.  In other words, the club pays for the gas, electricity and water used by the kitchen.  Often clubs do this "just to secure the caterer", saying "we will get out money over the bar, because we get the drinks."

Let's say that each week a club is forgoing $100 rent and is paying $50 for gas, $50 for electricity and $100 for waste removal.  The club forgoes $300 per week in total - times that by 52 weeks and it works out to be $15,600 in additional expenses per year.  In order to recoup that cost over the bar, at just 50 percent gross profit for beverages, the club would need to generate an additional $600 per week over the bar - which is an extra $31,200 per year.

So, if you are getting a contractor in, make sure the lease is appropriate.  Try to negotiate a contract that suits your club while considering the needs of the caterer.  But remember, if they don't trade out of your premises, they will have to pay rent elsewhere and pay all of their own outgoings.

(Ron Browne, ClubsNSW manager, Professional Development, ClubLIFE Sept 2019)

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