Owner Finacing

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Seeya99
Junior Burger
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2005/05/30 21:54:00 (permalink)

Owner Finacing

What's the +'s and -'s on owner finacing over bank finacing?

Also is 47% food cost high or does some restaurants run a 47%? I know the norm is 30-35%.

Thanks for any info.
#1

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    -Tricky-
    Cheeseburger
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    RE: Owner Finacing 2005/05/31 09:44:21 (permalink)
    quote:
    Originally posted by Seeya99

    Also is 47% food cost high or does some restaurants run a 47%?


    I can't help much, but I know chefs who have been fired for running 40+% food cost, so I don't think many restaurants happily run 47%. Maybe very expensive restaurants, restaurants run more as hobbies than businesses and restaurants who are just opening will habitually run a 47%, but I doubt you can stay in business very long with a 47% food cost under normal circumstances.
    #2
    2010Vision
    Junior Burger
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    RE: Owner Finacing 2005/05/31 14:14:17 (permalink)
    You have more negotiating power with owner financing than bank.

    47% food cost = closing in progress
    quote:
    Originally posted by Seeya99

    What's the +'s and -'s on owner finacing over bank finacing?

    Also is 47% food cost high or does some restaurants run a 47%? I know the norm is 30-35%.

    Thanks for any info.
    #3
    Seeya99
    Junior Burger
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    RE: Owner Finacing 2005/05/31 17:23:11 (permalink)
    Thanks for the input. Owner told me he doesn't know what he is doing. He bought the restaurant to bail out his son who got into it. Before them..it was a 1 owner for 25 yrs.

    Owner is never there. He has a fulltime job else where. If I can get the food cost down to 30-35% then this is a great deal. I really think it is just being managed wrong.
    #4
    Scallion1
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    RE: Owner Finacing 2005/05/31 18:03:42 (permalink)
    If I were you, the very next thing I'd do, and I mean like tomorrow, if you haven't already done so, is to make sure the seller paid his taxes. A lien out of the blue will make you real unhappy, regardless of how much you lower the food cost. And after that check for outstanding vendor debt.
    In both cases, you're much better being proactive and contacting the creditor to work something out (assuming, of course, that you can't get the seller to clean up his mess).
    Regarding food cost:either way, as other posters have noted, if it's still in the 47% range, don't worry about it, because you won't be in business long. But what I think is critical is to find out WHY it's so high. Waste is one thing, but if shells of beef or 5 lb blocks of frozen shrimp are walking out the back door, you might even consider closing up for a week, AFTER you've hired a new staff, to clean house. Theft is epidemic; "everyone's doing it, why shouldn't I?" is the mindset.
    The other thing is underreported sales. If the checks for 10% of your tables (those from cash-paying tables) don't get into the system because servers are tossing them so they can keep the boodle, that too will kill your food cost, by attacking from the other end of the equation. And, again, if this is going on - and the only way to know is to spend a week in the kitchen watching and accounting for every order - you may have to clean house, because it might mean that at the least the servers are in cahoots with the bartender or cashier, and may very well be doing a tapdance on your bank balance with the kitchen as partners.
    I did a lot of expediting years ago, in very busy places (e.g., Tavern on the Green), and my rule, with the total backing of the Chef and GM, was that NOTHING left the kitchen without a dupe, except for bread. NOTHING. Works wonders for food cost.

    Bill

    #5
    bassrocker4u2
    Double Cheeseburger
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    RE: Owner Finacing 2005/06/01 08:38:27 (permalink)
    i agree with scallion, those are great points. i would like to add a few.... if all else fails. the problem may be deeper than just employees. do you have any old records to compare to? its tough jumping in the water blind. food cost is first figured theoretically, going by the menu prices and the vendor prices and the yeilds of all the products. figure what it would cost you to make one of each item on the menu. now ring up one of each item on the register. with these 2 numbers you can find your theoretical food cost. this is the target food cost your menu is set at. you may have to adjust menu prices accordingly. not everything on the menu is low food cost. some of my items run upwards of 80 percent, but i keep them cause they draw families with a diversified taste.
    another thing to do is just check the most popular items sold. they usually set the trend for food cost. if you sell more clubs than anything, they better be low food cost. paper trails are important.
    kitchen checks, register tape, vendor invoices. if you see that you are buying a ton of something, but no sign of it on kitchen checks, see scallion's post....
    it never hurts to put in cameras, i used them many times in the past. fired a ton of thieves because of them. first step, know what you should be running. second step, find out why not. third step, fix it.
    easy as one, two, three.
    #6
    bassrocker4u2
    Double Cheeseburger
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    RE: Owner Finacing 2005/06/03 08:17:50 (permalink)
    more security measures.....
    (front of house) you have a hostess, right? one thing is to make sure your hostess writes down every table that comes in the door, number in party, table sat, e.t.c. at the end of a night, you can compare the hostess's tally to that of each server's report, to see who isnt claiming all their customers. that will give you a clue. another thing is to monitor your a.c.e. (average customer expenditure)
    you can find out on what shift the ace is too low,or which server's ace run to low, and that will help you get closer to the source of your problem. also, never underestimate the bussers...if you have a few that are content with their job, there must be a reason why, like no brains, or..... 'special benefits', if you know what i mean.
    but most frequently, the problem is in the management staff. the most trusted of your crew is the highest of suspect. someone maybe found a loophole, or a way to skim, seemingly without notice.
    we once caught our bookkeeper with three grand!
    (back of house) definitely, monitor food cost more closely. i would set up a 'primary food cost list' of the most expensive and most used items on the inventory. usually its about a dozen items. then, those items would be inventoried three or four times every day. after a while, you will learn how to recognize huge variations that dont belong. if only certain items are driving up the food cost, then you can monitor those items from door to door.
    if its everything across the board driving up the food cost, then its most likely a money scam in progress.
    good luck.
    #7
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