The shift from on-premise to off-premise dining has made restaurant operators evaluate their back of house operations and restaurant repair protocols. HVAC updates and an all-around new restaurant experience has led to many restaurant owners reconsidering how to efficiently prepare and run their kitchen spaces - and restaurants as a whole.
Daniel Estrada, CEO of 86Repairs, recently spoke with Claudia Saric and explored what the restaurant industry can do to keep their back of house running smoothly as we shift between off-premise and on-premise dining. Catch up on what you missed!
Thank you for joining us! Let’s dive in. What should operators be thinking about right now when it comes to repairs and ongoing maintenance?
That's a good question. Cost is obviously top of mind for full service operators - from fine dining to casual restaurants. More than ever we’re seeing operators be extremely cost sensitive, as they should be, when it comes to maintenance and repairs. Sometimes that's a good thing and sometimes we over do it in the industry. We find there needs to be a broader strategy associated with reducing costs around repair maintenance than what most operators think of - which is you know is basically just squeezing as much as they can out of the service companies that they use.
What sort of shifts have you seen from your customers, especially those who have moved to a much higher volume of off-premise dining and takeaway orders? When the pandemic first hit, a lot of restaurants obviously had to close and they had to all of a sudden deal with a bunch of takeaway orders instead of having folks inside at peak hours. Can you talk to us a little bit about that?
Yeah, so a couple of things. Number one, I mentioned earlier the strategy of managing repair and maintenance costs. We've seen folks start asking about what more they can be doing right now. People have been negotiating with a service company around rates or around specific jobs and trying to get as many concessions as possible. We actually find that's a very small part of the overall opportunity to lower cost around. There’s a couple examples of other things that are really important. One thing is equipment warranties.
A lot of times operators overlook that equipment is under warranty. Either the whole unit or, in some cases, a specific part may have a longer warranty than the unit itself. If you think about a refrigeration unit, the compressor (which is what basically creates the cold air inside a refrigerator) typically has a longer warranty. So you might only have a three-year warranty on the fridge as a whole but you might have a five or a six-year warranty on a specific part.
So a lot of operators we work with are keeping track of that warranty information in a more organized way and they're training staff differently to troubleshoot issues and really avoid service visits in the first place since a visit alone can run $150-$200. Operators often think of repairs as kind of inevitable and certainly they are right. It's kind of the price of admission when you run a restaurant. It's sort of a terrible aspect of the job, but a really important one.
I'll also mention that operators should review their service provider mix to really clearly understand the difference between hourly rates, which vendors are performing better in different categories, and optimizing for that is important.The last thing i'll say around the maintenance side is really thinking about preventive maintenance. When preventive maintenance is done well it lowers costs and saves operators a lot of downtime. Unfortunately a lot of operators don't have a lot of trust in preventative maintenance because they're really focused on the cost of it and a lot of times they've bad experiences with vendors who don't stick to the schedule that they were supposed to or the work wasn't done properly. It often doesn't feel like it's really worth the investment because operators have to monitor it closely for it to pay off.
Now that restaurant operations may be running a little bit slower in the cooler months, and given the cooler temperatures, how can they be utilizing this time to revamp their back of house? What do you recommend and what are you seeing your customers doing right now?
I'll go back a little bit to your question about shifts in general around the business first so we can talk about the back of house and facilities specifically related to the winter. The shift away from on-premise dining and fewer on-premise customers makes the front of house experience a lot less important, however the back of house experience really does translate to your guests’ experience.
What I mean by that is a lot of restaurants are using third-party delivery platforms, or even running their own delivery process, to basically deliver the guest experience at home. So we see full-service restaurants behaving more like quick service restaurants or even fast casual. They're shifting toward thinking about things like packaging, how do you get your food traveling well, what does your menu need to look like when you're delivering food to a customer versus something you can plate and serve in the restaurant. Thinking about all those things from a guest experience perspective becomes much more important. Then the other thing that we've heard operators say is they have less predictability for the load on their kitchen and their back of house staff. When you run a front of house experience you only have so many tables that you can seat and your dining room kind of caps your capacity. Operators who are new to off-premise are seeing an influx of orders at different times of the day than they’re used to and they have to adjust staffing and equipment. There might be things like changing the configuration of your lines or building new lines or changing the way that you prep and and the cooking itself.
The last thing I would say just around this whole topic of front of house versus back of house is you have to think about those channels as third-party delivery channels in a little bit of a different way. Yes, they can be a new marketing opportunity but you only have one chance to get it right. You're one restaurant in a sea of other restaurants, and you can't rely on your front of house experience or great service to differentiate you. The things that people often come to a full-service restaurant for aren’t in play anymore so that take home experience is really important to think about.
During our prep call you had talked about some of the new QSR businesses you've added to your list of customers, some of their success stories, and how they're doing. How can restaurant operators in more independent, multi-unit restaurants integrate some of the lessons learned from QSRs and some of these fast casual restaurants?
Obviously I'm here talking generally - every business is going to be different and operators need to look at their own you know menu and operations and staffing and all those things. That being said, behaving more like a QSR means thinking more about “day parts” and when you know orders are coming in and when you have customers and adjusting staffing around that.
Think about the equipment reconfiguration that we talked about. The marketing and brand focused work that QSR operators do, like launching ghost kitchens, and understanding if you can market some of your menu items under a different brand. Do you keep everything under your existing brand? We see full service operators getting more into ghost kitchens and embracing that kind of off-premise and delivery first from a marketing perspective but also from an operations perspective. They're all things operators have to think about based on the dynamics of their lease and the fixed costs versus variable costs in their businesses.
Let's talk HVAC - this is a really hot topic right now with restaurant operators and especially with indoor dining beginning to reopen. What do operators need to know about HVAC in 2021 and how should they best prepare their systems?
When we look at some of the data that we have around what kinds of repair categories cost operators a lot of money HVAC is near the top of that list. What we saw over the last nine months is in the earlier months of the pandemic there were a lot of operators looking into UV treatment of air circulation.
I don't want to minimize that technology, but I have seen operators kind of move away from this idea that they're going to kill virus particles in the air by installing these uv curtains to clean the air more effectively. That being said, HVAC is one of the areas that benefits the most from preventive maintenance. So good routine preventive maintenance on HVAC systems will keep them running longer and it will avoid downtime which means your dining room is uninhabitable particularly in the winter. Circulation is critical - the pressure in the restaurant and how much air is being sucked out through your hood systems are important to keep tabs on. I would highly recommend operators implement a good preventive maintenance strategy for HVAC because they'll save themselves a lot of headaches, a lot of downtime, and a lot of money. There's a clear payback in doing that work consistently.
You released a really interesting report at the end of 2020 called The State of Repairs” that surveyed your customers and aggregated a bunch of very important data and information on back of house operations. Can you share with us some of the trends?
You know our main reason for existing is we want to help operators lower costs. We do this very effectively, and we also collect all this data around what's breaking in restaurants, who are the best service companies to work on that equipment, what kinds of troubleshooting steps can staff take to avoid those unnecessary service visits, and a lot of other things about the reliability of equipment and average costs across the industry.
We started compiling that data and looking at trends and so we use all that data to help our customers lower their costs. Some broader trends have come up that are really interesting too. The volume of repairs at a full-service restaurant, meaning the number of service incidents that a full-service restaurant has on an average month, is higher than for QSR.
An average full-service restaurant has about two and a half service incidents per location per month. Your average QSR operator has about one and a half. So lower volume of repairs, but the cost per incident is actually lower with full service restaurant operations.
Another thing that we found is that cold side equipment, all the refrigeration equipment, ice machines, those sorts of things are the most common sources of repair incidents and because of that also one of the most one of the highest cost categories for an average operator. On our top five pieces of equipment that have service costs associated with them refrigerated prep tables, walk-in coolers, and ice machines top the list. We also see these pieces being neglected as far as preventative maintenance.
So if a restaurant operator is just starting to explore this now, where do you think they should start? What piece of equipment do you think they should start with then for preventative maintenance?
HVAC systems and refrigeration are absolutely the two places where operators should focus. We've seen full-service restaurants who are opening and closing really need to think about their reopening checklists and proper closure and shutting down on equipment.
For example, draining water lines on some equipment is really important especially if the heat's gonna be off during winter months so pipes don't freeze the lines and the equipment don't freeze. We actually have on our website a reopening guide which gives operators a pretty detailed checklist of things to think about when they're reopening a restaurant and there's also on the closure side we have a checklist of steps to properly close down a kitchen. That's really important during this time when we have the peaks and valleys for business.
It's an unfortunate thing that operators are facing right. We had a really good question come through the chat. How do you help restaurant owners train their staff?
We've seen operators do a few different things. You can go all the way to having your staff be trained on some basics of equipment repair and maintenance. What we generally see in the restaurant industry is when you're hiring people you'll find varying degrees of experience with this. Some managers are pretty hands-on with the equipment and they're willing to get some tools out and try to fix something themselves. That's less common in QSR.
We do have some operators who go through the effort of training their staff and provide troubleshooting checklists for different equipment. Oftentimes there's this tribal knowledge inside the operation about a piece of equipment inside the organization. I'd be remiss if i didn't mention services like 86 Repairs for backup as well. Training can start with something small like sharing tips with the whole team.
Honestly it just reminds me of Trust20's training too. It's very very clear on how to look at your staff and the checklist that you can go through while you train your staff on how to meet all of these new guidelines. We all know the industry looks a lot different than it did in early 2020. Kudos to the Trust20 team - this was a big gap in the industry in the beginning.
I always love to wrap up here with the future, since RelishWorks looks to explore the future of the food service industry. What do you think the future holds for the industry?
There are some changes that are here to stay and some things that are not really new, but it may be just accelerated through the pandemic. Guests have always wanted restaurants to be clean and so and then because there is such a focus on cleanliness, I do think restaurants are one of the safest places, one of the safest industries for guests. So that's not going to change. We're just going to see it become more visual so customers can see it.
Some trends are accelerating - obviously off-premise and the ghost kitchen movement. A lot of restaurants that would never have considered selling through a third-party platform or launching their own delivery operation have done that and the pandemic sort of forced them into that situation.
Indoor dining isn't going away - people want it. I mean I'm desperately looking forward to the day when I'm able to go out more regularly and spend time with friends and family in restaurants. I do think you'll see more operators stay in these other off-premise channels because they figured out how to do them and make them profitable. That's gonna be really interesting to watch.
Tell us where people can find you! Tell us where people can find all this information and any other information you want to share with folks.
Absolutely! 86repairs.com is a great place to start. We have a blog with a bunch of resources, we have some case studies of some things that other operators have done - there's a lot of good information there. Our marketing team’s doing a fantastic job with that. We're on all the social platforms under 86repairs as well. We are posting new content all the time as we find tips about things operators can do differently in their day-to-day operations.
Thank you so much for being here today and talking about this with us! I love the fact that operators can be even more prepared than ever and that you guys are here to help them.
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Trust20 is the new standard of restaurant safety and diner comfort, based on 20 tactics by health and safety experts. Supported by Gordon Food Service and General Mills, Trust20 provides an independently verified certification of restaurant practices, training, and other resources to help restaurants create safe, healthy, and welcome spaces for diners. www.trust20.co, @Trust20USA