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
FOODSERVICE
DESIGNER
May be consultant or KEC
Designs all storage, preparation,
and warewashing areas
Selects equipment
Location and size
of mechanical
spaces
Location of kitchen
doors & partitions;
necessary finishes
Location and utility
information for
equipment
Special
conditions (floor
depressions,
etc.)
INTERIOR DESIGNER
Designs public spaces
Selects finishes, furniture
Designs lighting and
custom counters etc.
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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 Improvements
Most costly
(usually)
Least costly
(usually)
Ventilation changes
Major structure changes
Widen windows/doors
Plumbing changes
Electrical
upgrades
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