Critical Success & Failure Factors

in
Food Court Design
and
Food Court Management
 Remember that:

A Customer sees more in an hour

Than Management sees in one year!
 The
Retail Property Developer’s

Simple Truths!
 The Single Purpose of

Retail Property Development

=
Value Creation!
 To Start the Value Creation
Process you need 3 things:
1 A Good Location

2 A Good Location
3 A Good Location
 To Continue Creating
Value you need:
1 A Good Understanding of the
Retail Property Business
2 Good Building and
Landscaping Design
3 Good Marketing & Promotion to
attract the Right Tenants
 To Continue Creating
Sustainable Value with Retail
Properties you Need:
1 Retail Properties that offer The Right Products and
Services for the Customers they Target!
2 Retail Properties that offer these Products and
Services at Competitive Prices!
3 Retail Properties where all the Tenants are running
a Profitable Business.
4 Retail Properties that adapt Continuously to The
Trends and Dynamics of The Retail Industry
 All these
Simple Truths
also apply to Food
Courts and F&B units
inside the Mall
Remodeling Phase 1
is related to presenting
all Foods during peak hours
for instant service.
Entertainment Sectors
in the Mall
What is the Function
of Food Courts
in Shopping
Malls?
What are the F&B
Needs & Objectives
of Customers
who come
to the Mall?
 The Customer
F&B Needs
can be looked at
from 2 angles!
2 Necessity (Rs 50-150)
3 Business (Rs 100-250)
4 Leisure (Rs 200-500)
1 International Branded Food
2 Asian Branded Food
3 Indian Branded Food
4 Local Indian Unbranded Food
 Customer F&B Objectives:

1 To Satisfy Physical Needs

2 To Maintain and/or Enhance (Family)
Relationships
3 To Entertain
5 To Impress others.
4 To Achieve Something
6 To Satisfy their Ego
7 To have Romance
 NOW!!!
It’s Time to Play!
Let’s Play some
Mind-Games!
 First Question!

From each 1000 Indian Shoppers

that come to your Mall
and want to eat

How many will prefer Indian Food

over International Food?
 Second Question!
If you have two Retailers who sell
similar Shoes at similar prices and
their Products and Brands are
equally popular
One has a store on the Ground Floor
and the other on the 3 Floor.
rd

Who will sell more shoes???

WHY ??
?
 Third Question
If we have a Food Court that sells mainly
Popular Indian Foods on the Ground Floor
at prices ranging between 50 and 100 Rs
And a group of 4 International Branded
F.Food Restaurants that sell on the 3rd Floor
at prices ranging between 50 and 100 Rs

Who sell More?

 If you allocate both
on the Ground Floor
Or if you allocate both on the 3 rd

Floor
Who will have
an Unfair Advantage
over the other?
Critical Success Factors
for F&B units
in
Shopping Malls
To offer a wide variety
of choices in
Fast Food Restaurants
Business Restaurants
&
Specialty Restaurants
To Serve
Fast-Food
Fast
To present all the
F&B Products
and Services
in an
Entertaining way
 To be
Competitive
 To be Unique!
=

To have
as many
 To Strive for
The Critical Mass
Effect
 To Integrate
International Branded F&B Concepts
with
Asian Branded Concepts
with
Indian Branded Concepts
and
Local Unbranded Concepts
 To Integrate
The F&B units
with
The Entertainment units
To have
High Visibility
Easy Access and Exit
For the Food Court
inside the Mall
Critical Failure Factors
for F&B units
in Shopping Malls
 To have
International Branded
Fast Food outlets on the
ground, first and second floors
And the Foodcourt with local
Branded and Unbranded outlets on
a higher floor.
Not to have a clear Zoning
with Definite
Allocation of Units
for certain types
of Food and/or Brands
of F&B Units.
 Not to Coordinate
The F&B
Promotional activities
for all the F&B units
in the Mall
in an Integrated way
 Not to recognize
that all F&B units
in the Mall
Together can function
like a Key Anchor
of the Mall.
 Not to recognize
The Key role
The F&B Services in a Mall
play towards
The Overall Image of the Mall
as a One Stop
Shopping Destination.
 Not to realize
That the different types
of F&B products
have different Pricing Levels, Sales
Levels, and Cost Structures
and as a result Different Capabilities
to pay certain levels
of Lease & Service charges
per sq Foot.
 Not to Organize
random Hygiene
and Bacterial Tests
by a Professional
Laboratory
 Fast Fast Fast
Food Food Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 30 30 30
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
 Fast Food Fast Food Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0
Estimated Profit Counter Operations to be shared Owner/FC
Operator 61,160 52,416 44,583
Estimated Profit Counter Operations Owner/FC Operator in % of
Sales 16 16 16
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 61,160 52,416 44,583
In % of Sales 16 16 16
Av. funds above min Cost of Space/Mth FoodCrt Operator 23,908 19,346 15,544
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT
PROFITS 85,068 71,762 60,127
In % of Sales 23 22 21
 Fast Fast Fast
Food Food Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 70 70 70
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
 Fast Food Fast Food Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0
Estimated Profit Counter Operations to be shared Owner/FC
Operator 43,560 34,816 26,983
Estimated Profit Counter Operations Owner/FC Operator in % of
Sales 12 11 9
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 43,560 34,816 26,983
In % of Sales 12 11 9
Av. funds above min Cost of Space/Mth FoodCrt Operator 6,308 1,746 (2,056)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT
PROFITS 49,868 36,562 24,927
In % of Sales 13 11 9
 Fast Fast Fast
Food Food Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 110 110 110
Space in Square Feet Allocated to the Fast Food Counter 110 110 110
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Counter
Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
 Fast Food Fast Food Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Number of Customers per Day 244 107 63

Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191

Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603

Manpower Costs Counter as a % of Sales 18 21 23

Estimated Profit for the Counter Operator 0 0 0

Estimated Profit Counter Operations to be shared Owner/FC Operator 25,960 17,216 9,383
Estimated Profit Counter Operations Owner/FC Operator in % of
Sales 7 5 3

EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 25,960 17,216 9,383

In % of Sales 7 5 3

Av. funds above min Cost of Space/Mth FoodCrt Operator (11,292) (15,854) (19,656)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT
PROFITS 14,668 1,362 (10,273)

In % of Sales 4 0 (4)
 Fast Fast Fast
Food Food Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150
Cost of Space per Month per square Foot for Counter 150 150 150
Space in Square Feet Allocated to the Fast Food Counter 150 150 150
Estimated number of staff Counter for 2 shifts, Opened 7 days 9 9 9
Estimated Average F&B Costs of the Counter Operator 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Counter Operator 62,940 62,940 62,940
Management & Service & Overhead Costs of the Food Court Operator 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Counter Operator 5% 5% 5%
Depreciation of Interior Investments of the Food Court Operator 5% 5% 5%
Counter Operator's Portion 70% 70% 70%
Property Owner's + Counter Operator's joint Portion 30% 30% 30%
Allocated budget for Marketing and Promotions of the Counter Operator 2% 2% 2%
Average Estimated Franchising Fee of the Counter Operator 6% 6% 6%
 Fast Food Fast Food Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Number of Customers per Day 244 107 63
Estimated Net Sales per month Excluding Sales Tax 348,818 305,931 270,191
Estimated Average F&B Costs of the Counter Operator 148,433 122,047 100,603
Manpower Costs Counter as a % of Sales 18 21 23
Estimated Profit for the Counter Operator 0 0 0
Estimated Profit Counter Operations to be shared Owner/FC Operator 8,360 (383) (8,216)
Estimated Profit Counter Operations Owner/FC Operator in % of Sales 2 (0) (3)
EST JOINT PROFITS COUNTER & FOODCRT OPERATIONS 8,360 (383) (8,216)
In % of Sales 2 (0) (3)
Av. funds above min Cost of Space/Mth FoodCrt Operator (28,891) (33,454) (37,256)
TOT AV. FUNDS ABOVE MIN BUDG.COSTS+JOINT PROFITS (20,531) (33,837) (45,472)
In % of Sales (6) (10) (16)
Why the International Fast
Food Chains can be
Profitable while
paying high leases
 Fast Food Fast Food Fast Food

Av. Exp. Av. Exp. Av. Exp.

Average Expenditure per Customer on F&B per visit 50 100 150

Cost of Space per Month per square Foot for the Fast Food Company 150 150 150
Space in Square Feet Allocated to the Fast Food Company 2,000 2,000 2,000
Estimated number of staff Counter for 2 shifts, Opened 7 days 28 28 28
Estimated Average F&B Costs of the Fast Food Company 40% 37.5% 35%
Estimated Minimum Manpower Costs of the Fast Food Company 146,820 146,820 146,820
Management & Service & Overhead Costs of the Fast Food Company 5% 5% 5%
Depreciation of Kitchen, F&B Equipment & Interior of the Fast Food Company 5% 5% 5%
Depreciation of Interior Investments of the Fast Food Company 5% 5% 5%
Reality check % regarding Cost of Space per Month for the Fast Food Company 10% 10% 10%
Allocated budget for Marketing and Promotions of the Fast Food Company 2% 2% 2%
Average Estimated Franchising Fee of the Fast Food Company 6% 6% 6%
 Average Number of Customers per Day 1,045 497 315
Estimated Net Sales per month Excluding
Sales Tax 1,493,915 1,421,006 1,350,956
Estimated Average F&B Costs of the Fast
Food Company 635,708 566,891 503,016

Manpower Costs Counter as a % of Sales 10 10 11

Estimated Profit for the Fast Food
Company 141,073 148,829 156,281

In % of Sales 9 10 11

Av. funds above min Cost of Space (141,073) (148,829) (156,281)

TOT AV. FUNDS ABOVE MIN
BUDG.COSTS+PROFITS 0 0 0

In % of Sales 0 0 0