Chapter ONE

Operating Controls
in the Foodservice
Industry
 Define Control.
 Identify the internal environments in a foodservice operation and the
external environments that affect all foodservice organizations.
 Recognize the interrelationship between front-of-the-house operations
and back-of-the-house operations.
 Identify the steps of a basic management control system.
 Relate the steps in the basic management control system to the steps
in the Operating Cycle of Control.
 Use the Operating Cycle of Control to trace the coordinated
procedures involved to manage a foodservice operation.
 Identify the variety of sources of information required to manage a
foodservice operation.
 Be familiar with the elements of the restaurant profile designed for
this text.
 Maximize food and beverage sales
 Control expenses
 Manage employees
 Maximize profits
 Control over all items of income
 Control over all items of expenses
 Control over the flow of products and
services
 Front-of-house functions
 Back-of-house functions
 Management functions
External Environment
Media
Government
Front of- Back of-House
Regulations
House Functions
Functions •Menu planning
•Seating •Purchasing
New •Sales •Inventory
Technology •Serving management
•Busing •Food production
eemela
•payment •Dish-room operations Local
Market
conditions
Management function
Supplier •Planning
Relations •Organizing
•Influencing
•controlling Labor-Force
National Demographics
Economic
conditions
 Perspective for Control
 Causes of Excess Cost in Foodservice Operations
Having clear, precise standards in place eliminates:
◦ Inefficiency
◦ Fraud
◦ Errors
◦ Waste
The four greatest causes of excess cost in the foodservice
operation
 Employer and Employees have a vital interest in
ensuring that control system is reliable and
effective
◦ Managers use cost-control systems to help pinpoint

responsibility for inefficiency, fraud, errors, and waste.
◦ Employees should be aware that control systems can
protect them and reward them for good performance.
 CostControl system for foodservice
industry are designed for three primary
purposes:
◦ To establish an efficient operation
◦ To prevent fraud or theft by employees or guests
◦ To ensure that the operation functions in a
manner that compiles with the goals of
management
Step 1
Set standards Recycle
through
the process
Step 4 Step 2
Take corrective Measure
action performance
Step 3
Have standards been
met?
 The Operating Cycle of Control is
defined as
◦ A control cycle that divides any food and
beverage operation into a series of
coordinated procedures that are necessary to
profitably and efficiently supply food and
beverage products and services to guests,
given an accepted volume of business.
Pre-Purchased
Functions
Guest Check
Standardized recipe
Guests Recipe Cost Cards
Specifications
FOH Functions Par Stock
Requisition
Kitchen Production
Shopping Lists
Product Issuing
Purchase Orders
Storage Practices &
Inventory Management & Issuing
BOH Functions
Invoice Management
Receiving Activities
 Control and Labor Costs and Technology
 Service and Labor
 Prime Cost
❖Food Cost: the cost of food products to generate
sales.
❖Beverage Cost: the cost of the alcoholic beverage
products used to generate alcoholic beverage sales.
❖Labor Cost: the cost of payroll and benefits needed
to generate sales.
 New technology affects Costs and operating
efficiencies:
❖Old Paradigm
• The customer’s order is taken by a server and
transmitted either verbally or on a handwritten guest
check to the kitchen staff.
❖New Paradigm
 Servers utilize a handheld touch-screen
 Or fixed-position point-of-sale (POS) terminal with a
touch-screen
 The new technology that has changed “DOING”
in the food service business:
1. Point-of-sales systems.
2. Touch screens for server ordering.
3. Customer and server pager ordering.
4. Automated kitchen systems.
5. Internet Web sites for restaurants, suppliers, and other
related businesses.
 Information available to managers must help
them to do several things:
1. Set goals
2. Plan strategies
3. Implement procedures
4. Evaluate results
 The following are some specific subject areas of
information that are relevant to foodservice
operation:
1. Menu concept
2. Food cost
3. Beverage cost
4. Labor cost
5. Other operating cost
6. Revenue
 The menu provides the customer with essential
information for making a choice. Its is designed to
reflect the foodservice concept.
 Examples of Foodservice Concepts:

❖Seafood restaurant
❖Mexican theme restaurant
❖Asian cuisine
❖Steak house
 Therecipe determines the ingredients
needed to produce meals.
 Food ingredients are all the food product

items used to produce meals.
 The information needed to control food

purchasing, receiving, storage, and
preparation cost may be presented manually
or electronically.
 Types
of Food-Cost Reports
❖Food cost percentage reports
❖Inventory forms
❖Invoice payment schedules
❖Recipe-cost charts
❖Standardized recipes
 Beverage costs must be controlled. Many of the
techniques used for controlling beverages costs
are the same as for controlling food costs.
 Techniques for ordering, paying for, transferring,
and requisitioning beverage.
 Types of Beverage-Cost Reports
❖ Alcohol use reports
❖ Beverage recipes
❖ Beverage-cost reports
❖ Bar-and inventory-control reports
 All foodservice establishments must use labor and
facilities to accomplish their service goals.
 Labor and productivity information can be
collected and evaluated using the following
forms:
❖Job descriptions
❖Daily work sheets
❖Productivity charts
❖Work schedules
❖Kitchen production charts
❖Workers’ compensation reports
 Information related to the sale and service of menu items to
customers is referred to as sales information.
 This information also relates to collecting money and

measuring how satisfied customers are with their
experience.
 Sales
information is collected and
monitored using several types of reports:
❖Guest checks
❖Cashier’s reports
❖Daily, monthly and annual reports
❖Server shift reports
❖Guest check daily report
❖Marketing program analysis

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Operating Controls

◦ Managers use cost-control systems to help pinpoint

 Examples of Foodservice Concepts:

 Food ingredients are all the food product

 The information needed to control food

 This information also relates to collecting money and

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