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Critical Success & Failure Factors
in
Food Court Design
and
Food Court Management
Remember that:
A Customer sees more in an hour
Than Management sees in one year!
The Retail Property Developer’s
Simple Truths!
Value Creation!
The Single Purpose of
Retail Property Development
=
To Start the Value Creation Process you need 3 things:
1 A Good Location
2 A Good Location
3 A Good Location
To Continue Creating Value you need:
1A Good Understanding of the Retail Property Business
2 Good Building and Landscaping Design
3 Good Marketing & Promotion to attract the Right Tenants
To Continue Creating Sustainable Value with Retail
Properties you Need:1 Retail Properties that offer The Right Products and
Services for the Customers they Target!
2 Retail Properties that offer these Products and Services at Competitive Prices!
4 Retail Properties that adapt Continuously to The Trends and Dynamics of The Retail Industry
3 Retail Properties where all the Tenants are running a Profitable Business.
All these
Simple Truths also apply to Food
Courts and F&B units inside the Mall
Remodeling Phase 1 is related to presenting
all Foods during peak hours for instant service.
Entertainment Sectors in the Mall
What is the Function of Food Courts
in Shopping Malls?
What are the F&B Needs & Objectives
of Customers who come
to the Mall?
The Customer F&B Needs
can be looked at from 2 angles!
1 Necessity (Rs 50-150)
2 Business (Rs 100-250)
3 Leisure (Rs 200-500)
1 International Branded Food
2 Asian Branded Food
3 Indian Branded Food
4 Local Indian Unbranded Food
Customer F&B Objectives:
7 To have Romance
6 To Satisfy their Ego
5 To Impress others.
4 To Achieve Something
3 To Entertain
2 To Maintain and/or Enhance (Family) Relationships
1 To Satisfy Physical Needs
It’s Time to Play!Let’s Play some Mind-Games!
NOW!!!
First Question!
From each 1000 Indian Shoppers that come to your Mall
and want to eat
How many will prefer Indian Food over International Food?
Second Question!If you have two Retailers who sell similar Shoes at similar prices and
their Products and Brands are equally popular
One has a store on the Ground Floor and the other on the 3rd Floor.
Who will sell more shoes???
WHY ???
If we have a Food Court that sells mainly Popular Indian Foods on the Ground Floor at prices ranging between 50 and 100 Rs
And a group of 4 International Branded F.Food Restaurants that sell on the 3rd Floor at prices ranging between 50 and 100 Rs
Who sell More?
Third Question
If you allocate both on the Ground Floor
Or if you allocate both on the 3rd Floor
Who will have an Unfair Advantage
over the other?
Critical Success Factors for F&B units
in Shopping Malls
To offer a wide variety of choices in
Fast Food Restaurants Business Restaurants
& Specialty Restaurants
To Serve Fast-Food
Fast
To present all the F&B Products and Services
in an Entertaining way
To be Competitive
To be Unique!= To have as many
USP’S as possible
To Strive for The Critical Mass
Effect
To Integrate
International Branded F&B Concepts with
Asian Branded Concepts
with
Indian Branded Concepts and
Local Unbranded Concepts
To Integrate The F&B units with
The Entertainment units
To have High Visibility Easy Access and Exit
For the Food Court inside the Mall
Critical Failure Factors for F&B units
in Shopping Malls
To have International Branded
Fast Food outlets on the ground, first and second floors
And the Foodcourt with local Branded and Unbranded outlets on
a higher floor.
Not to have a clear Zoning with Definite
Allocation of Units for certain types
of Food and/or Brands of F&B Units.
Not to Coordinate The F&B
Promotional activities for all the F&B units in the Mall
in an Integrated way
Not to recognize that all F&B units
in the Mall Together can function like a Key Anchor
of the Mall.
Not to recognize The Key role The F&B Services in a Mall play towards
The Overall Image of the Mall as a One Stop Shopping Destination.
Not to realize That the different types of F&B products
have different Pricing Levels, Sales Levels, and Cost Structures
and as a result Different Capabilities to pay certain levels of Lease & Service charges
per sq Foot.
Not to Organize random Hygiene and Bacterial Tests
by a Professional Laboratory
Fast Food
Fast Food
Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 30 30 30
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
Fast Food Fast Food Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0 Estimated Profit Counter Operations to be shared Owner/FC
Operator 61,160 52,416 44,583 Estimated Profit Counter Operations Owner/FC Operator in % of
Sales 16 16 16
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 61,160 52,416 44,583
In % of Sales 16 16 16
Av. funds above min Cost of Space/Mth FoodCrt Operator 23,908 19,346 15,544 TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT
PROFITS 85,068 71,762 60,127
In % of Sales 23 22 21
Fast Food
Fast Food
Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 70 70 70
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
Fast Food Fast Food Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0 Estimated Profit Counter Operations to be shared Owner/FC
Operator 43,560 34,816 26,983 Estimated Profit Counter Operations Owner/FC Operator in % of
Sales 12 11 9
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 43,560 34,816 26,983
In % of Sales 12 11 9
Av. funds above min Cost of Space/Mth FoodCrt Operator 6,308 1,746 (2,056)TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT
PROFITS 49,868 36,562 24,927
In % of Sales 13 11 9
Fast Food
Fast Food
Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 110 110 110
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
Fast Food Fast Food Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0
Estimated Profit Counter Operations to be shared Owner/FC Operator 25,960 17,216 9,383
Estimated Profit Counter Operations Owner/FC Operator in % of Sales 7 5 3
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 25,960 17,216 9,383
In % of Sales 7 5 3
Av. funds above min Cost of Space/Mth FoodCrt Operator (11,292) (15,854) (19,656)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT PROFITS 14,668 1,362 (10,273)
In % of Sales 4 0 (4)
Fast Food
Fast Food
Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 150 150 150
Space in Square Feet Allocated to the Fast Food Counter 150 150 150
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Counter Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
Fast Food Fast Food Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0
Estimated Profit Counter Operations to be shared Owner/FC Operator 8,360 (383) (8,216)
Estimated Profit Counter Operations Owner/FC Operator in % of Sales 2 (0) (3)
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 8,360 (383) (8,216)
In % of Sales 2 (0) (3)
Av. funds above min Cost of Space/Mth FoodCrt Operator (28,891) (33,454) (37,256)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT PROFITS (20,531) (33,837) (45,472)
In % of Sales (6) (10) (16)
Why the International Fast Food Chains can be
Profitable while paying high leases
Fast Food Fast Food Fast Food
Av. Exp. Av. Exp. Av. Exp.
Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for the Fast Food Company 150 150 150
Space in Square Feet Allocated to the Fast Food Company 2,000 2,000 2,000
Estimated number of staff Counter for 2 shifts, Opened 7 days 28 28 28
Estimated Average F&B Costs of the Fast Food Company 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Fast Food Company 146,820 146,820 146,820
Management & Service & Overhead Costs of the Fast Food Company 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Fast Food Company 5% 5% 5%
Depreciation of Interior Investments of the Fast Food Company 5% 5% 5%
Reality check % regarding Cost of Space per Month for the Fast Food Company 10% 10% 10%
Allocated budget for Marketing and Promotions of the Fast Food Company 2% 2% 2%
Average Estimated Franchising Fee of the Fast Food Company 6% 6% 6%
Average Number of Customers per Day 1,045 497 315
Estimated Net Sales per month Excluding Sales Tax 1,493,915 1,421,006 1,350,956
Estimated Average F&B Costs of the Fast Food Company 635,708 566,891 503,016
Manpower Costs Counter as a % of Sales 10 10 11
Estimated Profit for the Fast Food Company 141,073 148,829 156,281
In % of Sales 9 10 11
Av. funds above min Cost of Space (141,073) (148,829) (156,281)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+PROFITS 0 0 0
In % of Sales 0 0 0