The Foodservice Design Team

“I have spread my dreams under your feet;Tread softly because you tread on my dreams.”

Hotel Operator Develops the

concept (perhaps with consulting assistance)

Establishes financial goals, which in turn influence the budget

Major Players and Roles

Major Players and Roles Architect

Typically the first design professional hired

Key roles in all phases: Programming Design Contracting Construction

Needed if proposing any significant change to building

Major Players and Roles Engineer(s)

May be independent or part of arch. firm

Designs and coordinates building systems:

electrical mechanical HVAC

Design professionals may bear legal liability for their designs over a span of years.

Major Players and Roles Interior designer:

May be independent or part of arch. firm

Creates the “experience” element of the FOH

Should have restaurant experience!

Major Players and Roles Foodservice

consultant (also called foodservice designer) More to follow…

Contractor: Coordinates efforts of Kitchen Equipment

Contractor, Electrical and Mechanical Contractors, and Finishes Contractors

If involved early, may offer helpful input on design execution

Major Players and Roles

Major Players and Roles Lenders

Construction or permanent

Required return

Investors Joint venture partners “Silent” equity Desired return

Choose both with caution!

Major Players and Roles Additional

Operator Support: Lawyers Accountants Business

Consultants Concept

Consultants

ARCHITECT Basic building design (walls, doors, ceilings) Coordinates design team (typicallly) May also be interior designer

ENGINEERS Designs electrical, plumbing,

venting, structural systems Computes and coordinates utility

loads May be part of arch. firm

FOODSERVICEDESIGNER

May be consultant or KEC Designs all storage, preparation,

and warewashing areas Selects equipment

Location and sizeof mechanical

spaces

Location of kitchendoors & partitions;necessary finishes

Location and utilityinformation for

equipment

Specialconditions (floor

depressions,etc.)

INTERIOR DESIGNER

Designs public spaces Selects finishes, furniture Designs lighting and

custom counters etc.

COMMUNICATION

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Hiring a Foodservice Consultant Services provided:

Programme document Drawings

Floor plan, elevations, details, spot connections Specifications

General, itemized Cost estimates Tender analysis Inspection/acceptance at jobsite

Costs for Consulting Help Fixed fee (preferred) or percentage basis

Typically 5-7% of equipment contract Proportion of fee based on stages

Programming and Schematics 30% Design Development 25-30% Contract Documents 25-30% Construction Administration Services 15%

Selection Criteria Successful experience with comparable projects

in terms of scope and size Good working relationships with designers and

builders Willingness to identify and, where appropriate,

reuse existing equipment Willingness to work in partnership with client

Consultant or KEC? Foodservice

Consultant: Does not buy or sell

equipment Must pass tests to

have FCSI designation

Charge for all services

Kitchen Equipment Contractor/Dealer: Primary business is

selling of equipment No licensing Design services may

be included in price of equipment

Construction Contract Types Lump Sum Cost Plus (fee or percentage) Guaranteed Maximum Price

Lump Sum Contract Contractor agrees

to complete the work for a set price

Pros: Total cost known

ahead of time Good when prices are

stable

Lump Sum Contract Many cons:

All CDs must be 100% complete before a price can be determined

There is incentive for the contractor to cut back

There is incentive for the contractor to “pad” the bid

Changes are more costly and cumbersome Unfair to one of the parties in periods when

prices are unstable

Cost Plus Owner pays for “time and

materials” plus an agreed upon fee or a percentage of costs

Pros: Covers contractor if

plans or prices are not stable

Owner benefits if prices drop

Cost Plus Many cons:

No incentive for the contractor to reduce costs

No way to really know how much project will cost in advance

Owner must take on more of a decision-making role

Guaranteed Maximum Price Owner agrees to pay

“cost plus” up to an agreed maximum

Contractor estimates agreed maximum based on estimated costs plus a healthy contingency

Guaranteed Maximum Price Pros:

Owner knows the maximum price up front Allows construction to begin before all CDs are

finished Allows flexibility if prices are unstable Opportunities for incentives via shared savings

Con: Can end up more costly than lump sum

Contractor will generally over-estimate

Where Costs Typically Fall: Leasehold Leasehold improvements: 45 - 60% FF&E: 30 – 40% Opening costs: 5- 8% Contingency & Fees: 10 – 15%

Leasehold ImprovementsMost costly

(usually)

Least costly (usually)

Ventilation changesMajor structure changes

Widen windows/doorsPlumbing changes

Electricalupgrades

Lighting & finishes

Where Costs Typically Fall: New Construction Base building: 20 - 25% Interior finishing/lighting: 15 – 20% Furnishing & equipment*: 35 - 45% Site work: 8 - 10% Opening costs: 8 – 10% Contingency & Fees: 10 – 15%

* Includes rooftop ventilation systems

Return on Capital Targets Sales to investment ratio shuld be

greater than 1 in the first year For non-hotel restaurants, investors

seek a minimum return on capital of 20% (30% for some chains)

R on C = ATCF* Capital outlay for facility

* After Tax Cash Flow attributable to facility – more accurate than EBITDA