Make a Buck or Please Members? | Suppliers | General Managers | Booze and Board Meetings | Membership Issues (part 1) Membership Issues (part 2) | Membership Issues (part 3) | Membership Issues (part 4) | Boards are the Key to Success | Course Expectations | Speed Kills | The Tree Mission | Getting Your Board on Board | Cell Phones  | Hey, Here's a Tip  | The Capital Budget | Significant Others | Newsletters | Pig in the Middle | Technology | Protecting the "Private" in Private Clubs | F & B Minimums! | Wine Case Decision | How Much Do Members Have a Right to Know? | Clubs Need Members...Not Magicians! | Understand Your Issues, Develop Your Solutions! | Boards Need Clear, Concise Info to Make Financial Decisions | Don't Let 'Red Ants' Spoil Your Picnic

Make a Buck or Please Members?
It's a Dilemma for Food & Beverage
Managers Between a Rock and a Hard Place

Can you make a buck with a burger? Maybe, especially if you're one of the flippin' burger joints!
But a private club...not likely. Why? Well that leads to another question: Are private clubs meeting the needs and expectations of their members in their food and beverage operations? And do clubs even know the expectations of their members...their customers?
How does the food and beverage operation work in private clubs? What do members really want? If the food operation is different than a commercial restaurant business, why is it different?
In a nutshell:
  • clubs face a limited user base
  • members are sophisticated, demanding patrons
  • they want better value because it's their club
  • there's a high cost for services and
  • quality demands creative culinary minds
And another reason..."is that it serves multi-functions: fine dining, casual dining, snack bar, and in-house or outside functions, often simultaneously," says Richard C. Day, president and CEO of The Hospitality Resource Group, a private club consulting firm specializing in food and beverage issues.
"The dining window is often shorter and diners often arrive all at the same time. One of the perceptions that members have about joining a private club is that they will be treated promptly with special attention, consequently, they become upset when their needs are not met immediately."
The limited user base has implications. "A private club sells food to members and their guests," says Gregg Patterson, general manager of The Beach Club of Santa Monica. So "members are limited in number, each member has multiple dining choices within the local community and each has only so many dining opportunities in a given week."
On the other hand Patterson expounds, "there are too few families for the facilities available and there is too little variety for the repeat users of the dining room. How many time will anyone eat in the same location in a given month?"
But really, what do private club members want in the food and beverage operation? The answers are many and varied.
"The answer is anything and everything," says Tarun Kapoor, CEO and managing director, Kapoor and Kapoor Hospitality Consultants, San Marino, CA. "After paying a hefty initiation fee, and continuing to pay monthly dues, it is only reasonable for one to want what they want when they want it,
"In my humble opinion, that is the wrong question for a club manager to ask. It, in fact, allows the member to have unrealistic expectations," says Kapoor, who is also professor, Collins School of Hospitality Management at Cal Poly Pomona, CA.
"Members expect food and beverage to provide good value, the highest standards of quality and implementation of a level of personalized attention not found in the public sector," comments Mitch Marron, general manager of the Metropolis Country Club, White Plains, NY.
"Members believe perceived value ought to be greater in their own club because of the ownership and entitlement philosophy that goes with paying dues and initiation. Members also expect you to jump through hoops to provide them options, not on daily menus, that they can get at anytime.
And there's the seat-me-now mentality.
"Members also expect that the table they have reserved will be their table for the evening. Members also expect to be recognized by name with great emphasis placed on instant yet discreet service, "Marron opioned.
Patterson is one general manager who agrees that member wants are different.
"Members want different things from different parts of the food operation. Sometimes they just want food-quick, inexpensive, tasty with little service and none of the "rituals of dining." Food like this is intended to ease the hunger and little more. The Grill is a good example," Patterson said.
"At other times, they want the food to be given in a "ritual of dining" atmosphere-tablecloths, trained waiters and the like. The main dining room is an example. And sometimes there's a middle ground between these two-lunch service in the patio, for example. The mistake is trying to give them one thing when they're searching for the other. Under most circumstances, people use food and beverage as a social opportunity-eating and talking with friends-and one is mistaken if they don't know that good companions makes all food taste better," Patterson suggested.
So if there are all these different expectations from members, is it possible for a club to meet those expectations? Yes, Patterson says. "Expectations can certainly be met, if clearly understood. This is the key...what type of food and service do they really want." These expectations for food and service, Patterson suggests, come as much from the local community as it does from the club.
Scott Samuels, president, Horizon Hospitality Associates, Inc. an executive search and consulting firm for the hospitality industry, says, based on his experience of working with various clubs across the country, "consistent quality in both food and service" are key requirements for members. It's his opinion that while clubs can meet expectations many clubs do not.
"The standards must be set from the leaders of the club (i.e., general manager, food and beverage director, etc.) and trickle down to the line employees. There are many times that employees do not understand the expectations or do not "buy into" the vision that the club is trying to achieve, thus it becomes more difficult for them to exceed the expectations of the members. On-going communication and training are key components to achieving success in this area."
If clubs work on the basis of what members expect, "good food", or perceptions about "good food" is likely one way to tell or understand if member's needs are being met, or better still, exceeded.
"Good food has to do with perception and expectation," Patterson added. "People think our Grill tuna sandwich is outstanding-but it's served on a paper plate and ordered at the counter by the member. Good has to do with the expectations of the member community."
In fact, Marron says the challenge isn't necessarily that the food is "good, but rather creating the dynamics of having offerings like meatloaf and a roasted half chicken for the more traditional members and fois gras and sesame crusted tuna for the more culinary adventurous members.
"The single most important reason members come to their club is because they know if there is anyway we can make happen what it is they need, they know we won't let them down. I can promise you we are buying the best quality in the marketplace and our members are well aware of this. Clearly, the house committee and management must listen to the members to make sure the correct menu mix is in place and that the needs and wants are reflected, " he observed.
The fact that many food and beverage areas are empty and money losers emphasizes the point that members' need are not being met, and for several other significant reasons.
"The biggest objection members have...is the inconsistency in food and service," Day stressed. That he says, "relates to having a knowledgeable chef, food and beverage manager and written standards as to what leaves the kitchen."
It's also Patterson's opinion club dining rooms are empty because they're not providing the type of food service members really want. "Often it can be overpriced, unexciting and uninspired Club food.
Kapoor is blunt. "Too many clubs have fallen into a routine. To put it mildly, they have become boring and stale. As a result the member goes elsewhere to spend their discretionary time and money."
Food, says Day, is one issue. Service problems are a completely different issue.
"Often, front line service personnel are the lowest paid and least trained of your club staff. Yet, they often have the most contact with your members. To me, this makes no sense. Most clubs lack a comprehensive on-going training program that invests in its employees and empowers them to take care of problems when they occur. I can't begin to tell you how many times I have seen this," he observed.
"Yet, ask any general manager or club president how important it is to invest in and train their employees, they will all say it is very important. Few practice it. Members aren't dumb. They notice it. They talk to their fellow members. That's one of the big reasons dining rooms are empty.
"Boards and managers need to wake up! Hire, invest in, and train good people," he stressed. "Tell them how important they are to the success of the club, because they are. Don't treat them like servants. Treat them with respect. Take care of them and they, in turn, will take care of your members.
Develop a training program that allows for the staff to contribute to it. Develop ownership in the plan and pride.
"If you don't make this investment, your food and beverage program will suffer," he says matter-of-factly.
The alternatives for members also affect usage significantly, simply because there are so many.
"For example," Marron added, "Johnson County, KS, where I worked for five years had 500 restaurants in 1985 and in 1999, there were 1800 restaurants. Also, there are more after school activities children are involved in.
"Because of the activities, members do not think of the club first as a potential dining alternative. Spouses, who play golf on the weekends, will play golf at 7:30 a.m. and be home by 12:00 p.m. to relieve their spouse. Consequently, they are not eating lunch at the club. Additionally, both spouses are "bread winners" and they are less apt to go to the club for dinner, but rather eat at home or order takeout, " Marron expressed.
Samuels suggests that the limited audience of a club is one reason for less usage of club dining facilities. But there's a more crucial question to be asked.
"Over the past 8-10 years has your club's food and beverage usage and dining increased or decreased? If your usage and revenue is trending up, you are obviously headed in the right direction," he said.
"However many clubs will see that the trend is not positive which translates into member dissatisfaction with your food and beverage operation," he opined.
So as we see, members' perceptions, usage, uncaring or inexperienced staff and uninspired fixin's all contribute to members' dissatisfaction with food and beverage services, let alone the fact it doesn't make money for a club.
And that brings us to costs, particularly food costs and labor costs.
"Clearly members pay for the right not to use their club," says Marron.
"Boards and management struggle with the philosophy of attempting to create further enhanced value for its members while at the same time being fiscally responsible," Marron added.
Clubs pay more for their food costs than they would if they were restaurant managers. Most clubs' member dining cost of good runs at 50 percent and higher. This differs greatly with restaurants where typical food costs range from 28 to 32 percent. Food costs at commercial restaurants are lower because food purchased in larger volume is produced quickly, and more inexpensively in manufacturing kitchens. And they-the McDonald's of the world-make money doing so.
Fine dining at your club requires a creative kitchen with higher food costs because of fewer customers, greater waste and lower selling prices. All of which contributes to the fact food and beverage operations at many private clubs lose money more often than turning a profit.
But the kicker, so far as Marron and others are concerned, is labor costs.
"Payroll...is still the single most important element as to why club food and beverage operations will never make a profit daily," Marron stressed. "Managers must staff dining rooms as if maximum capacity would occur because managers must be ready for their members if they decide to utilize the dining room. Invariably 50 percent of all expenses are payroll related, " he concluded.
"Food costs and labor costs...are primarily the two costs that contribute to a club's inability to make a profit everyday," Samuels adds.
Patterson feels "high turnover, low expertise and youth keep labor costs down-the very things you find in a manufacturing food environment like Wendy's or a Holiday Inn."
Some clubs on the other hand have high labor costs because they have "executive chefs with creative skills (or they should have), clubs seeking consistency by retaining staff for a long time and they have a team capable of developing personal relationships with the members."
So how do clubs reach the objectives of good value, high quality and personalized service without going broke?
"Participation," says Kapoor. "If the management of my club articulates what they are providing, they will, in fact, influence and maybe manage my expectations. Members will not patronize the operation if it isn't fun, exciting and of great value."
Marron has no doubt clubs can meet and exceed members expectations.
"If there is any challenge, the issue of service remains the biggest obstacle because of the availability of qualified service personnel," he explained.
"Most clubs do not have the resources to be financially competitive with wages for service personnel. However, that places even more emphasis on training and education for all service employees. Managers must spend more time training service personnel as to club philosophy, standard operating procedures, and the empowerment employees must have in insuring the members' experience in the club.
"Our club has a proactive training program whereby new employees go thorough an extensive orientation about all aspects of the club. As a result, our club enjoyed one of the most successful seasons in recent years," he concluded.
Richard Day suggests that because most club food and beverage operations lose money, they must go looking for money. "It is critical that you bring in as many functions as possible to help offset this. Someone should be designated to pursue this business. It is very competitive, but also very lucrative."
Publisher's final thoughts
No question, food and beverage is a core issue for private clubs not only because of what a sophisticated club clientele expects, but also what it costs a club to provide that "experience." It's a dilemma because there are few clubs that do make money on their dining operations. Clubs handle this differently with some raising dues enough to cover losses while others assess their membership at the end of the year to bring food and beverage operations to a break even point. Other clubs encourage private events, which can generate profits. It behooves club managers to also seek ways to cut costs and ultimately services, all of which may not be particularly attractive to a club's membership. It becomes efficiencies with constraints that still puts managers between a rock and a hard place.
At least, that's the way I see it!
What's your opinion. If you wish to respond to the Publisher's Perspective, or other BoardRoom articles, contact Publisher John G. Fornaro by email at john@pcma.net.
John Fornaro
Publisher