CHAPTER

2 Menu
Development
Learning Objectives
After reading this chapter, you should be able to:
• summarize the importance of understanding the customer base when writing a menu;

• describe how menu selection impacts other aspects of the operation;

• describe the three menu types and their impact on cost control;

• employ principles of good menu design;

• describe the dollar and sense system of menu engineering.

In Practice

Myla Thomas walked into the ofice of the owner of the Sea Breeze Hotel for her
11 A.M. meeting with the owner, Eric Breeze, and the executive chef, Robert.
“Good morning, Myla, and welcome aboard!” exclaimed Eric as he extended
his hand for a handshake. “We are very excited to have you on our team;
I have prepared a meeting schedule for you to meet with everyone. Please
have a seat,” Eric continued, indicating a chair for her.
“Thank you very much,” Myla responded, as chef Robert strolled into the
room to a corner chair. As soon as Myla and Robert finished exchanging
greetings, Eric commented on the work that Robert was doing with the res-
taurant menu. “It’s an excellent example of what is needed.” With that open-
ing, Myla asked Robert about the timing of the previous menu overhaul.
Robert answered, “It hasn’t happened since I have been here, which is a little
over two years.” Myla politely followed up with another question: “What
challenges do you have with the current menu?” For Myla, Robert’s answer
was very revealing: “The menu is dull, and it doesn’t really address our cus-
tomer complaints. Customers want many choices nowadays, and we need to
provide that. My goal is to review and make appropriate changes every sea-
son to relect what is available and affordable. And, of course, cost of sales is
an issue, and Eric will be the irst person to point that out.”
Unexpectedly, Eric turned and handed Myla the menu and said, “Here is the
menu Robert is talking about. What do you think?” Myla responded, “I don’t
see the Sea Breeze identity in the menu. Something else I notice is that it’s
not easy to read the print font sizes.” To his credit, Robert realized some of
the errors that had been made. “Yes, you’re right. The irst version is kind of
faulty. The process really has to be corrected.”
 Menu Development  31

Overview
In the food service industry, everything revolves around the menu. Types of menus vary as
much as restaurants do. The design and item selections in a ine-dining restaurant’s menu are
completely different from those of a fast-food or casual restaurant. These differences affect
every aspect of the operation—labor cost, food cost, choice of latware and china, staff train-
ing, storage requirements, and restaurant layout and design. In this chapter, we will focus our
attention on menu development as it relates to the customer and the menu. Later, after we go
into detail about cost control relating to purchasing, recipe costing, inventory and labor, and
similar issues, Chapter 13 will cover menu analysis.
As shown in Figure 2-1, menu development and menu analysis differ not only in their user
orientation, but also in their emphasis on the future and past performance of the menu. Menu
development has a strong future orientation of what the restaurant should represent, based
on a predetermined concept. On the other hand, menu analysis is the evaluation of the past—
menu cost and/or sales data—for the purpose of identifying customers’ needs and perceptions
and improving menu performance. When you learn these sets of skills, you will be able to
undertake more effective decision making with respect to marketing and operating the menu.

Menu Development Process

1 2
CHAPTER 2

Customer/Competition
Knowledge Menu Plan

Menu Launch

Review of Menu Effectiveness/Analysis

Dish and Price Modification

1 2 3
Review Pricing Evaluate Menu
Strategies Elasticity Engineering
CHAPTER 13

Traditional Target Price-Revision Profitability Popularity

Product Cost Question

Cost Plus Introduce New Menu

Mark-up Menu Item(s) Evaluation

Launch Revised
Menu Item(s)

Figure 2-1 Menu Development Process

32  Chapter 2

Menu Development
The way a menu is developed or adapted is a relection of how well the restaurant concept
or business plan has been defined. Successful menu development depends on two pillars:
customer/competition knowledge and menu planning.
Sometimes the menu evolves over time as a restaurant’s business plan is reined. In other sce-
narios, the concept comes irst and the menu comes later. In yet other instances, the menu
may be the guide that directs the restaurant toward a particular concept. The menu also holds
the key to whose responsibility it is to prepare certain dishes, and how those dishes should be
served to the customer. The choices that guide your menu call for certain types of advance
preparation to help the manager adjust to the worklow. Even if a written menu is not provided
to the customer—as in a bed-and-breakfast—some form of menu list in the kitchen and service
area is essential for smooth operation of the restaurant. All successful menus start with a good
knowledge of the customer base and the competition.

Customer and Competition

Knowledge
Designing and preparing a successful menu begins with understanding your customer base and
competition. You must assess what customers will want and what they are willing to pay, and you
must consider the direct and indirect competition. A good survey is one way to collect focused
opinions about your restaurant from current and future customers. This can reveal the demo-
graphics of the operation’s customers and give insight into what they really think about the restau-
rant and its competition. A customer survey would contain questions about the following topics:
• menu selection

perceived value The • menu pricing and perceived value (described below)
customer’s perception of
value as it relates to his or • food quality and quantity
her restaurant experience.
• waiting times

• server’s knowledge of menu

• cleanliness

• décor

• restaurant location

• promptness of service

• professionalism and friendliness of staff

Designing Your Survey: The Restaurant Minimum

Standards Survey
Maximizing sales is tied to how guests respond to your operation, its food, and its service.
Many restaurants prepare questionnaires about service levels in order to solicit customer com-
ments. Restaurants use the responses from customers to act upon perceived deiciencies. The
customer survey acts as “eyes and ears” for management in the areas of perceived value, clean-
liness, service standards, and ambience—the whole restaurant package. How the customer per-
ceives the value of his or her restaurant experience will determine business competitiveness.
These quantiied questionnaire responses can be measured and charted over time, and they
offer an excellent picture of growth and decline.
 Menu Development  33

There are many ways to design a survey. Below are some generally acceptable steps to creating
an effective customer survey.
1. Decide what the survey is supposed to elicit. Asking about age group and musical
taste can reveal what type of music or entertainment is appropriate for your restaurant.
Customers’ occupations and education levels will indicate the economic level of the
marketplace—including information such as disposable income. Finding out about eth-
nic and religious orientations can help you formulate food preferences. For example,
a Mexican restaurant may not do so well in an Italian community, unless perhaps that
community is indeed looking for something different.
2. Identify the audience of the survey and how they will relate to the questions asked. For
example, senior citizens and a group of young adults may relate differently to a ques-
tion about customer parking and access for people with disabilities.
3. Create questions that identify the survey demographic. Experts call these qualifying restaurant minimum
standards Refers to
questions. For example, you can ask “What is your zip code?”
service, food and beverage
4. Design the questions after deciding on the format of each. Questions can be optional or offerings, and the entire
required, multiple-choice or open-ended. Open-ended questions might be as follows: operation—for instance,
cleanliness.
What is your favorite restaurant? What do you like about its menu?
direct competition
5. Write the survey. Figures 2-2 and 2-3 are examples of a customer survey based on
refers to the homogenous
restaurant minimum standards. environment: for example,
6. Conduct a competition survey. This will identify the direct and indirect segments of all the restaurants nearby
that offer the same type of
your competition. Direct competition refers to what is called the homogeneous envi-
menu that you want to offer.
ronment: for example, all the nearby restaurants that offer the same type of menu that
you want to offer. If one such restaurant decides to increase its prices, it may lose sales. indirect competition
comes from those
Indirect competition comes from those restaurants that do not share your restaurant’s
restaurants that do not
cuisine but do share your customer base. You want to know if the surrounding popula- share the same cuisine but
tion can support another restaurant or menu item like the one you are proposing. do share a customer base.

Restaurants Comparison
2007 and 2008
12
Dissatisfied 10 = Highly Satisfied

10
Means Rating: 1 = Highly

Average 2007
8
Average 2008
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Minimum Restaurant Standards

Figure 2-2 Restaurant Comparison
34  Chapter 2

7. Administer a pilot survey with a small sample of people to review the effects.
8. Validate that the results of the pilot survey are meaningful and complete.
9. Make adjustments based on the results of the pilot.
10. Publish the survey and distribute it to your customers and/or potential customers.
11. Collect and tabulate the results.
12. Analyze the results.

Figure 2-3 Example of Restaurant Survey

Restaurant Date
Server’s Name Host/Hostess Name
Items Ordered
Were you greeted properly/promptly by host or hostess?
Were you shown to the table and seated properly?
Was the table properly set up?
Were the cushions clean?
Were you properly and promptly greeted by your server?
Did your server offer items from the menu?
Were your questions answered with conidence and poise?
Were dishes served hot or cold, as ordered?
Were the overall appearance and taste of high quality?
Were your water, soda, coffee and/or bread service reilled?
Did your server offer you desserts and coffee?
Were your plates cleared all at once at the end of each course?
Did the server return to the table to inquire if the meal was enjoyable?
Was the menu clean?
Was the lighting level acceptable?
Was the overall cleanliness of the room acceptable?
Was the music volume acceptable?
Was the outdoor volume, if applicable, acceptable?
Was the temperature level acceptable?
Do you feel you received a good value for the price you paid for this meal?

In Denial

Robert Mancuso, gold medalist in the Culinary Olympics, reported, “When I

took over at the Sardine Factory in Monterey . . . I got two different pictures from
our employees and our customers. While our employees were saying that we
were delivering 98 percent customer satisfaction in food quality, our customers
thought we were at 60 percent. The irony was, instead of trying to address the
customer’s complaints, we seemed to think we had to show that we were right
and they were wrong.” Note the two messages contained in this short quotation.
First, make sure you measure the right things. Apparently, the internal measure
of food quality that had been used at the Sardine Factory was deicient; it did
not capture customer perceptions, which are absolutely crucial. Second, if cus-
tomers are unhappy, don’t tell them they are wrong. Try to igure out why they
are unhappy, so you can work to improve that aspect of your operation.
 Menu Development  35

In the example below, we compared ive restaurants for two years. The deiciencies noted on the
graph clearly show problems that inhibit the effectiveness of menu engineering and up-selling.
The performance of these ive restaurants shows a bumpy trend. On average, the cleanliness of
the facilities is down compared to the previous year. No matter how well waitstaff up-sell, and
no matter how well the menu is engineered, if the customers perceive an unclean restaurant,
they will not return. These questionnaires reveal where the basics, such as cleanliness, have been
neglected. In general, a weekly or monthly evaluation of the guest comments is essential.

Menu Planning
The menu affects every step of a restaurant operation, from planning to everyday function-
ing. Menu planning involves the following information: menu types,menu nutrition,and menu
design. The diagram in Figure 2-4 compares five restaurants to show you how the menu
impacts every aspect of their operations. Customers’ menu preferences drive equipment needs
and procurement cost.For example, a holding cabinet and expensive china and glassware for
serving may not be required in a casual bagel shop, but a bagel maker or display case might be
required.

Figure 2-4 Restaurant Comparison

Brew Elegant
Casual Pub-upscale Russian Institutional Ethnic ie.
Bagel Shop Environment Tearoom ie. Hospital Thai

Menu Style Casual and A la carte or High quality Cycle Menu A la carte
simple a la table d’hote a la carte or semi a la
carte or semi a la carte
carte

Stafing Not too Semi skilled Highly Skilled in Skilled in

skilled skilled special diets ethnic food

Equipment Bagel Full range Alto-sham, Full range of Suitable

maker, meat of kitchen steamer, equipment. equipment
slicer equipment sauté, pan, Budget for ethnic
stove, frig. constraint food

Check $5 - $10 $10 - $15 $40 - $80 Set sum. $10 - 18

average $5 - $12

Type of Fast and Fast not High Tray service, Not casual
service casual casual expectation. cafeteria
Elaborate

Cost Minimum Minimum Extensive High portion Extensive

control cost control cost control cost control control cost control

Design Open long Casual, Very Open space, Not casual,

atmosphere counter. square foot comfortable, self-service square foot
Less per person low dim per person
comfortable, (11 to 16), light, square (10 - 14),
bright lights, comfortable, foot per pleasant,
square foot pleasant person (15 low music
(7 to 12) to 23), quiet

As you can see, the menu sets the stage for an operation’s daily functioning. The choices you
make with regards to the menu, staff, style, ambience, price, customers, and equipment will
determine the restaurant’s proitability.
36  Chapter 2

McDonald’s Chic
McDonald’s France has been spending lavishly to remodel its restaurants
to blend with local architecture and to make their interiors less uniform and
sterile. For example, some outlets in the Alps have wood-and-stone interiors
similar to those of alpine chalets. The idea is to defuse the negative feelings
many French people have toward McDonald’s as a symbol of American culture
and, perhaps more importantly, to entice customers to linger over their meals
and to spend more money. This investment in operating assets has apparently
been successful—even though a Big Mac costs about the same in Paris as in
New York, the average French customer spends about $9 per visit versus only
about $4 in the United States.

Source: Carol Matlack and Pallavi Gogoi, “What’s This? The French Love McDonald’s?”
BusinessWeek, January 13, 2003, p. 50.

Menu Type
Once the menu is determined, decisions about purchasing, labor skill levels, and pricing can be
made. Menus can stay the same each day (this is called a static or standard menu), change each day,
or be a combination of the two. Most of the menus commonly used in the food service industry
are either standard or combination. Standard menus are common in chain and ethnic restaurants
such as Thai Cuisine. Each type of menu affects the operation’s costs in different ways.

Standard Menu
Many bagel shops, diners, and chain restaurants use the standard menuformat. This type of
menu offers the same selection of menu items from day to day. Since the same menu items are
offered every day, an operation can maintain a record of daily sales for each item. The advan-
tage is that the sales record makes future sales easier to predict. When forecasts are accurate,
expenses due to waste from overproduction of a menu item can be minimized. Amounts of
food to purchase can be more accurately predicted, resulting in less spoilage and fewer dollars
tied up unnecessarily in inventory. Another advantage of the standard menu is that it simpliies
culinary processes and employees can be trained on production consistency. A third advan-
tage is that customers know what to expect because they may be returning to their favorite
menu item.
A drawback of the standard menu is that it offers little opportunity for use of excess produc-
tion. If a restaurant prepares too much prime rib, for example, it is dificult to carry over this
item for the next day’s service. The item will not be the same quality as the irst day of service.
Some restaurants may use specials either to utilize carryover or to try out new menu items.
Also, a standard menu may not be cost effective in a time of rising product cost, since manage-
ment may not react quickly enough to change the menu to reduce cost. The same is true if
management cannot quickly take advantage of inexpensive item that could beneit the business
proitably.

Combination Menus
Combination menus offer the manager the lexibility to introduce new menu items through a
cycle menu or daily menu and to maintain some amount of signature or standard menu items.
These signature items, the ones customers associate speciically with restaurant or operation,
constitute a “brand name.” Branding is a way for you to make a name in your market by mak-
ing a unique mark on customers’ perceptions.
 Menu Development  37

Combination menus require daily taste testing and training for both kitchen and service staff.
They can create imbalances in equipment use and skill-set requirements, depending on the
menu of the day. Take, for example, one day’s menu item that calls for grilling as opposed to
sauté preparation. The chef will depend heavily on the grill and less on the burner during this
day. This can change the pattern of operation in the kitchen, affecting different parts of the
meal and how quickly meals are served.

Specials
Once a special is determined, it must be communicated to the guest. Attractive boards describ-
ing the special can be placed within view of the seated guests. Include a generic Specials section
in a prime place on the menu, or use a clip-on to advertise the day’s specials. Many operators
ind it cost effective to print pages of specials or even entire menus daily. Durable, attractive
menu jackets can be purchased to hold menu inserts. A quality laser printer that prints the
appropriate page size is needed.
Specials can be an excellent way to increase proits. Chef’s specials can be proitable items that
are not on the current menu. They may be left over from different cuts of other menu items,
or they can be one of your vendor’s best buys for the day. The key to increasing the proit from
specials is creativity. Chefs need to be creative with planned daily specials and the use of left-
overs, and they should price specials at higher proit margins than regular menu items.
In addition to acknowledging the importance of menu placement, managers ind that a sig-
niicant number of customers accept the suggestions of their servers, who should be trained
to offer the specials effectively. You can offer incentives to servers who sell the most specials.
Care must be taken to ensure that the plate appearance of a special is particularly pleasing to
the guest. The appearance and aroma of the food determine how most people judge a special’s
acceptability. Even the perceived taste of the food is improved by its visual presentation.

Cycle Menu
Cycle menus are common in schools, hospitals, business cafeterias, conference centers, and
lodging facilities that offer room and meal packages. It is favorable and practical in these types
of environment that the customers are very frequent and require some variety and choice. Such
menus have a set of selections for a period of time, and this set of selections repeats. For exam-
ple, a four-week menu cycle would start over on week ive with the same selections offered on
week one. Depending on the previous day’s leftovers and on special buys, the chef may intro-
duce new menu items for the day to minimize waste and to improve proitability. The advan-
tages of cycle menus includes those of the standard menu as well as the fact that management
can identify customer preferences and make menu changes to enhance customer satisfaction.

Daily Menu
A daily menu is another form of daily special.It also allows the manager to take advantage of
special buys and to offer them as daily specials to the customer. With a daily menu, manage-
ment can quickly react to ever-changing product costs and take advantage of specially priced
items to improve profitability. This is a very common practice in upscale and non-ethnic
restaurants. Daily menus are generally very proitable if there is no over- or underproduction.
If the operation underestimates production and runs out, customers will be dissatisied. They
could also be disappointment if a return customer expects the same item from a previous visit,
only to ind that their favorite item is not being prepared the same or with the same ingredi-
ents. Another disadvantage is that, since the menu changes daily, sales records are more difi-
cult to maintain and to interpret. The main disadvantage of daily menu is planning: purchasing
and cooks’ training may not be adequate for the daily variation of cuisine.
38  Chapter 2

Menu Nutrition
As the American palate becomes more sophisticated and health-conscious, restaurateurs are
aggressively catering to nutrition-minded customers. The trend is toward providing nutrition-
conscious customers with ample menu choices. Figure 2-5 provides some of the major food
sources for menu consideration. It shows the two major nutrient groups: vitaminsand miner-
als. Vitamins are chemical compounds that promote good health. They consist of fat-soluble
vitamins (A, D, E, and K), and water-soluble vitamins (B and C). Like vitamins, minerals
are chemical elements that perform various healthful functions in the body. Minerals comprise
about 5 percent of a person’s body weight. It is the job of the chef to incorporate all of these
elements into the menu.
As little as 15 years ago, healthy menus were something that only hospitals needed to provide
for their patients. Now, according to a recent NRA consumer research report, nearly 90 percent
of adults prefer more healthful menu choices in order to have greater control of what they eat.
In response to the Centers for Disease Control and Prevention’s estimate that more than six in
ten adults meet the clinical deinition of overweight or obesity, restaurants are adding low-fat,
low-calorie, and low-carbohydrate items, as well as other healthy selections, to their menus.
In addition, virtually all restaurants allow patrons to customize their meals by either substi-
tuting foods or altering cooking methods. As the recommended dietary guidelines continue
to change, one thing remains the same: Portion control is essential to maintaining a healthy
weight. Appropriate portion size depends on the customer’s daily caloric requirements, result-
ing from age, weight, build, and level of physical activity. Experts suggest very limited amounts
of fat, oils, and sweets. If you can work with your chefs to design a menu rich in grain prod-
ucts, vegetables, and fruits that are low in fat, saturated fat, and cholesterol—and moderated in
sugars, salt, and sodium—it could set your restaurant apart from the rest.

Menu Design
When planning for sales, no tool is more inluential than the menu itself. And when design-
ing a menu, generating a proit is a prime consideration. For customers, the menu is the irst
impression and the most complete representation of a restaurant. The menu describes products
and prices these items in order to generate enough sales to make a proit. Studies conducted
by the Foodco Corporation indicate that 80 percent of new customers and up to 50 percent of
repeat customers don’t know what they’ll order when they enter a restaurant. Thus the menu
plays a large part in determining sales. Menus need to be designed in a way that ensures repeat
business, high sales volume, and healthy proit. A good design addresses the menu’s layout,
physical characteristics, and content.
An effective menu layout entices customers to order the items you want. You achieve that by
strategically engineering the layout through graphic design, format, photos, icons, colors, and
pricing that, while not the focal point of the menu, should lead to selection of highly proit-
able items. Everything about the layout should relate to the restaurant and the environment
you are creating. You don’t want to create an upscale restaurant and then hand customers a
cheap, poorly printed menu. If in doubt, hire a professional designer to establish a basic design
template. What follows is an account of a not-so-successful restaurant that created a successful
experience in a matter of four weeks by improving its menu design.
At Michael’s Bistro in downtown Monterey, all menu items were treated the same on the
menu, and therefore nothing really caught the customer’s eye; nothing was exciting or special.
Sales were 45 percent below their seasonal average. The manager learned about menu layout
and decided to undertake a new layout for her menu. She learned that most customers don’t
read menus, but rather scan them, and what they see irst and last are the items most likely to
remain in their minds longest. It is important, then, to put your most proitable items in places
where studies show that customers’ eyes are most likely to land.
 Menu Development  39

Figure 2-5 Vitamins. Courtesy of “The Professional Chef, 8th Edition”: by the Culinary Institute of America. © 2006 by the Culinary
Institute of America. Reproduced with permission of John Wiley & Sons Ltd.

Vitamins: Their Function and Common Sources

Name Function Food Source

WATER-SOLUBLE VITAMINS

B-complex Allow of proper release of energy in the body Grains; legumes; vegetables; animal
(thiamin, ribolavin, protein (B12 only found in animal
niacin, folate, foods)
biotin, pantothetic
acid, B6, B12)

Vitamin C Increases body’s absorption of iron, aids in growth and Fruits and vegetables (berries,
(ascorbic acid) maintenance of body tissue; boosts immune system; melons, tomatoes, potatoes, green
contains antioxidant properties leafy vegetables)

FAT-SOLUBLE VITAMINS

Vitamin A Aids in proper vision, bone growth, reporduction, cell Animal protein such as liver
division and differentiation; regulates immune system; and eggs; the precursor—beta
maintains surface linings caroteen—is found in orange,
deep yellow and dark green leafy
vegetables

Vitamin D Aids in proper bone formation Milk; some cereal and breads; fatty
ish; egg yolks

Vitamin E Protects body from damage by free radicals; contains Nuts; seeds; seed oils; avocados;
antioxidant properties sweet potatos; green leafy
vegetables

Vitamin K Aids in proper blood clotting Dark green leafy vegetables, such as
spinach, kale, broccoli

MINERALS

Calcium Used in the development of bones and teeth; regulates Dairy products (milk, yogurt);
(body’s most blood pressure; aids in muscle contraction, transmission broccoli; green leafy vegetables
abundant mineral) of nerve impulses, and clotting of the blood

Phosphorus Plays a key role in energy-releasing reactions; used in Animal protein; nuts; cereals;
conjunction with calcium for maintaining bones and legumes
teeth

Sodium and Aids in the regulation of bodily functions; help to Sodium is plentiful in many foods;
potassium maintain the body’s normal luid balance; involved in potassium is found in virtually all
(electrolytes) nerve and muscle functions fruits and vegetables

Magnesium Promotes healthy teeth and bones; muscle contractions; Green vegetables; nuts; legumes;
nerve transmission; and bowel functions whole grains

Fluoride Helps to prevent tooth decay; may help to prevent Community water; saltwater ish;
osteoporosis shellish; tea

Iodine Essential for the normal functioning of the thyroid gland; Table salt; cod; grains
helps to regulate metabolism, cellular oxidation, and
growth

Iron Helps to carry oxygen from the lungs to cells; involved in Liver and red meat; whole grains;
cellular energy metabolism legumes; green leafy vegetables;
dried fruit
40  Chapter 2

First, the most proitable items in the three-page menu were placed on the inside right page,
toward the middle; the manager had learned that this is the menu’s “prime real estate.”
Figures 2-6 through 2-8 identify the best spots on different types of menus, based on the pat-
terns most people’s eyes follow when they open a menu. The most proitable items should be
placed in these places.

3 2

1
5
7

4 6

Figure 2-6 Eye Patten for a Three-Page Menu

3 2

5
1

4 6

Figure 2-7 Eye Pattern for a Two-Page Menu

Another tactic is to use boxes and icons to sell what you want. Boxes might include specials,
or they might simply highlight proitable items. Icons might point out items that are made
with a particular fresh ingredient for which your restaurant is famous, or they might indicate
heart-healthy items. Figure 2-9 is an example of the use of boxes and icons to sell what you
want. According to Dimitri, director of Barneby’s Hotels, “You don’t have to drop items that
are seasonally expensive, but you can minimize their impact” by adjusting their positions in
the menu.
 Menu Development  41

Figure 2-8 Eye Pattern for a One-Page Menu

Entrées
Custom 28 Day Dry Aged CERTIFIED ANGUSBEEF ® PRIME, Hand Selected by John Tarpoff

New York Steak Filet Mignon Baseball Cut Top Sirloin Filet of New York
16 oz 54.95 8 oz 59.95 12 oz 53.95 16 oz 57.95 8 oz 40.95

CARVED TABLE SIDE

Peppercorn New York Chateaubriand for Two Chateau of New York for Two Porterhouse Steak
16 oz 56.95 24 oz 115.00 24 oz 115.00 24 oz 58.95
Rack of Lamb
45.00
Frenched Rib Steak
Steak EL Gaucho 18 oz 44.95
club sirloin and lobster medallions
39.95 ROQUEFORT Double-Thick Vension Chops
40.00
Baseball Top Sirloin
Salmon Creek Farms 16 oz 40.95 Original El Gaucho Baby Back Ribs
Pork Porterhouse 24.00
18 oz 29.95

FLAMING SWORDS
Shish Kabob of Lamb Brochette of Tenderloin Cornish Game Hen
29.50 56.95 21.95

Fresh Fish and Lobster Sauté

3 Fresh Fish Nightly* market price Veal Scaloppine Marsala 28.00
Dungeness Crab Cakes 26.00
Australian Lobster Tail 12-16 oz market price
Vegetarian Cannelloni 17.00
Australian Lobster Tail and Small Filet market price Wild Mushroom Risotto 18.95

Figure 2-9 Fully-Fleshed Menu

42  Chapter 2

Physical Characteristics
The type of restaurant sometimes dictates the physical characteristics of the menu. For exam-
ple, in Mexican restaurants, long menus are common because a Mexican menu often offers a
tremendous number of items. Italian menus sometimes have colorful Italian art. And because
coffee-shop menus wear out quickly due to extensive use, they are typically laminated or in a
holder—like a booklet that lets you slide pages in and out. At Michael’s Bistro, the manager used
the physical size of the menu to grab attention and to affect subtly customers’ impression of the
menu. The old menu was too large to be handled easily, so the staff changed the size to 8½ by
11 inches. To highlight proitable items, the manager added appropriate eye-catching graphics
with color shading. Take a look at Figure 2-10. Which item in the menu draws your eyes irst?
The simple graphic pointing to Item Number 2 draws the reader’s eye immediately. Another
idea is to use photographs of the items you wish to sell. Customers can be persuaded to order
an item because they have a visual guarantee that the actual presentation will match the photo
on the menu. Managers at Michael’s Bistro decided against using photographs because the
size of the menu didn’t permit pictures of many items, and because customers could reject or
judge their meal harshly if its presentation did not resemble its enticing photo closely. Instead
they changed the font size to 14 points, which made the text easier to read. They also started
using a thick-grained paper with a high-quality feel.

Item #1 Item #2

Item #3

Item #4 Item #5

Figure 2-10 Fish Icon Menu

Menu Content
Menu content should appear in the sequence of how the menu items are served: drinks, appe-
tizers, entrées, and then desserts. In Figure 2-11, all elements of good menu description are
present. The customer will not wonder what these items are, how they are prepared, or how
they are served. They will know what accompanies each dish, and they are reading appetizing
descriptive copy to help them decide what to order. Certain words have more selling power
than others. For example, “marinated,” “roasted” or “cooked in wood-ired oven” have more
allure than simply “fried.” Also important is the perceived value of the meal and the pricing.

Customer Value Perception

All customers have some idea of price and value when they come to a restaurant to eat. If your
prices are above those people expect to pay, your restaurant will have to provide a greater perceived
value—better ingredients, friendlier or more eficient service, more creative menu items—to empha-
size the value and de-emphasize the price. In Figure 2-11, the menu designers have started by de-
emphasizing the price. Notice that the price is not the focal point; it does not stand out when all
elements of good menu description are present. The customer should not wonder what menu items
are, how they are prepared, or how they are served. They should know what accompanies each dish,
and read appetizing descriptive copy to help them decide what to order. Certain words have more
selling power than others. For example, marinated, roasted, and cooked in wood-ired oven have more
allure than simply fried. Also important is the perceived value of the meal and the pricing.
If customers ind menu items that are offered at prices that are somewhat less than they would
expect to pay, they perceive them to be of good value and tend to be attracted to those menu
items and the operations that offer them. If the customers see prices as too high, either because
of their own budgets or because of perceived value, they will avoid an operation in the future.
 Menu Development  43

PORTABELLA MUSHROOM SOUP BRAISED VEAL SHORT RIBS

Fresh portabella and crèmini mushrooms, caramelized Harissa maple glaze, veal stuffed ravioli,
onion, cayenne, fresh leeks, sherry cream 6.95 fresh herbs, natural jus 18.50
GREEK SALAD BISTRO STEAK
Vine ripened tomatoes, cucumbers, kalamata olives, Herb chickpea fritters, baby arugula,
crumbled Feta, toasted pita croutons 6.95 balsamic ketchup 22.95
CHOP CHOP SALAD STEAK FRITES – NEW YORK
Smoked Turkey, wine salami, Provolone, fresh basil, garbanzo beans, Palomino signature steak, herb de Provence butter,
Parmesan, crisp romaine, tomatoes, balsamic vinaigrette 8.50 red wine shallot topping, pomme frites 33.95
BRAISED LAMB SHANK ROTISERRIE PORK CHOP
Chilled romaine, chopped bacon, diced Roasted root vegetable and braced pork
tomato, toasted hazelnuts 7.50 ragout, wilted swiss chard 18.50

CHOP CHOP SALAD LOBSTER RAVIOLI

Smoked Turkey, wine salami, Provolone, fresh basil, garbanzo beans, Fresh sheets of saffron pasta, lobster and tarragon filling,
Parmesan, crisp romaine, tomatoes, balsamic vinaigrette 13.50 lobster cream sauce, finished with herb mascarpone 19.95
SPICED PRAWN AND MANGO SALAD RIGATONE BOLOGNESE
Ginger grilled prawns, spiced jumbo cous cous, Fuji apples, Spicy Italian sausage, pear tomato, crushed garlic,
mango, bell peppers, cilantro, toasted walnuts 15.95 oregano, roasted red pepper cream 16.95
CAESAR SALAD FETTUCINE ALFREDO WITH SEAFOOD
With grilled chicken 13.50 Pan seared prawns, Manila clams, Penn Cove mussels,
With blackened salmon 15.95 alfredo cream sauce, Parmesan, cracked black pepper 19.95
GRILLED CHICKEN SALAD PENNE GORGONZOLA
WITH WARM PECAN CRUSTED BLUE Toasted Hazelnuts,
Baby organic greens, crisp romaine, sliced pear, black pepper, parsley 13.95
roasted pecans, maple vinaigrette 15.95

Figure 2-11 Menu Content

On the other hand, if prices are substantially less than customers would expect to pay at a simi-
lar restaurant, the customer may question the quality or portion sizes.

Menu Costing
Menu cost is different from menu price. The cost is the money spent by the operation on
labor, ingredients, and overhead. In this chapter, menu cost refers to potential cost—the potential cost The
expectation of what the food cost should be, if you comply with all cost control procedures expectation of what the
cost should be, if you
(discussed in detail in Chapter 9). In other words, it is the standard by which you measure the
comply with all cost
food cost eficiency of your operation. Using menu recipes, you can easily calculate what each control procedures. It is
item should cost by adding the cost of each recipe ingredient. You should keep all of this infor- the standard whereby you
mation in your database and update it as prices or menu items change. Before setting menu measure the cost eficiency
prices, you should determine what each item costs to prepare. According to the NRA’s 2008 of your operation.
survey, only 30 percent of restaurants actually cost out their menu before setting prices. Chain
restaurants account for 85 percent of that 30 percent. It’s no wonder that the percentage of
failed restaurants is so high among other food service operations.

Menu Pricing
While menu cost is what the operation spends to make an item, menu pricing is the establish- menu pricing How much
ment of how much a customer is charged for an item. Menu pricing is an integral part of menu a customer is charged for
content. Pricing methods can help or hinder cost and proit objectives. Pricing can determine an item.
sales volume and dramatically affect your bottom line because customers will react to prices so
quickly that you often won’t get a second chance. Consider your market and your costs to plan
what you can—and need to—charge.
Although pricing is often as much an art as a science, your proit margin determines how prof-
itable you are—and you don’t want to leave that to chance. Many software programs, such as
44  Chapter 2

Menu Magician from Foodco and Chef Tec, are designed to analyze menu items in order to
facilitate maximum guest satisfaction and restaurant proit. One way software programs can
help is by suggesting an average guest check amount, which can be used as a planning tool.
Such programs can also outline sales according to “entrée-only” items so that managers can
actually see the sales and proit distribution of all items. This can also be done manually on a
simple spreadsheet, but doing so is more time-consuming.
Before we get to detailed menu pricing information in Chapter 13, you will learn about pur-
chasing and costing, which will form the basis of your pricing decisions.

Truth in Menu Content

Truth in menu content is a legal issue as well as a matter of integrity and conidence. The man-
ager must ensure that the menu content is accurate. If you say that your beef is prime or your
chicken is free-range, for example, it must be purchased and served that way. Laws limit the
substitutions you may make. Often, customers must be told about substitutions so that they
can make an informed choice. Think of this as a promise that the manager must keep. More-
over, if you claim certain health or nutritional values associated with any of your menu items,
the U.S. Food and Drug Administration (FDA) requires that you substantiate and communi-
cate these facts to your customers. For example, you might make a nutritional or health claim
such as “low fat,” “organic,” or “heart-healthy.” Symbols to denote such desired qualities
are often printed on a menu. Managers should research how to substantiate such claims—for
example, by providing nutritional information upon request—as well as the best ways to ensure
consistency in the kitchen. Iis illegal to mislead customers or misrepresent what you serve.

The “Dollars and Sense” of Menu Planning

through Staff Training
Menu planning is a powerful tool for realizing objectives of minimizing operating costs and maxi-
mizing sales. This can be aided by speciic staff training in the area of suggestive selling techniques.
Knowing your menu mix percentages is just the irst step toward gaining a competitive edge.
Menu mix percentages are the number of speciic items sold divided by the total number of items
sold. Communicate these strategies to your staff members and discuss how they can up-sell or
cross-sell items. The knowledge they gain can translate into conidence in dealing with customers.
Here is an example of a manager “sleeping at the wheel”:

I led a training workshop for servers at a restaurant that will remain unnamed.
By the end of the workshop, I was conident in our servers’ abilities to sell, as
I witnessed their abilities grow in role play after role play. The room was alive
with enthusiasm; I could see them mentally counting their additional tips as
they grew more conident in their abilities. As a professional trainer and sales-
person, I was satisied, and I was sure our guests would be, too.
A couple months later, when I found myself sitting in the very restaurant whose
servers I had trained, accompanied by the hotel’s general manager and our com-
pany president, I must admit I was a little smug about what was about to happen.
We were approached by one of the workshop attendees. When the president
asked, “How are the crab cakes?” I was ready for her to take the opportunity
and run with it. Instead, to my horror, I heard, “Nobody’s sent them back yet.”
I knew the training session was two months ago, but did nothing stick? Although
the president was appalled by the response, to add insult to injury, the gen-
eral manager did not appear to see anything wrong with the server’s answer.

(continues)
 Menu Development  45

(continued)

The GM’s reaction told me what was wrong, and it had nothing to do with my
training techniques.
It was apparent that the server had been “re-educated.” Apathy, lack of appre-
ciation, and an obvious lack of conidence in the product had killed the server’s
enthusiasm before it had a chance to mature into practiced ability. This attitude
can run through an organization like a virus and kill any chance of business and
personal growth.

Source: Lizz Chambers, CHE, CHA, and Ralph Miller. “Enthusiasm: Have It. Transfer It or Lose It.”
Hotel News Resource Dec. 6, 2006.

A trained waitperson can conidently suggest the perfect combination of good food and wine
if he or she can say, “I’ve tasted this wine with the pasta special, and it was excellent” or “Have
you considered a chardonnay with the salmon you’re having?” Perhaps the salmon is one of
your slow-moving menu items, and it only needs recognition to achieve the popularity its taste
warrants. Many customers are looking for their server’s knowledgable opinion. All it takes is
familiarity with a few good wines and how they taste with menu items.
Wine can be particularly proitable, and your waitstaff is the key to that proitability. When
coaching your staff, ask them to remember this phrase: “Have you decided on a wine with your
dinner this evening?” It carries a powerful punch but is so subtle that customers will not feel
pressured. The secret is to train employees always to think positively about every order. For
example, with customers who request an opinion about the menu, train your staff to suggest
the chef’s special or the slow-moving but proitable menu item. If customers order three glasses
of wine, the staff should thank them and then suggest, “For about the same price, you can have
a bottle of the house wine and still have enough left over to top off your glasses later on.” This
idea is bound to bring an order for the bottle—or at least an appreciation for the interest.
Timing is essential. When the waitperson suggests the second bottle before the entrée but after
the irst course, he or she has hit upon perfect timing. The customers are going to look at the
little bit of wine left in their glasses and think about the good meal yet to come. On the other
hand, suggesting the second bottle too soon amounts to pushing the guest. Suggest it after
the dinner is served, and the sense of anticipation will be gone; many customers will decline
and make do with what they have. And if you or your staff needs some incentives, share with
them the chart in Figure 2-12, which assumes an entrée cost of $40.
For the server, the increase in income from two glasses of house wine to two glasses of
Chardonnay in 52 weeks is $1,443. The increase from two glasses of house wine to a bottle
of Chardonnay in one year is $8,775. From the restaurant’s perspective, assuming that ifty cov-
ers a night order Chardonnay instead of house wine, the company will gross almost $22,812
more. If every three covers order a bottle of wine, the difference is nearly $119,000. The bot-
tom line is that the staff needs to understand the menu, the wines, and the customer. The staff
and the company can both beneit tremendously.

Menu Launch
Once the menu is developed, an effective menu launch becomes the critical step to its success.
You launch a menu when you premiere that menu with the public. A menu launch for a new
restaurant is far more time-consuming and costly than one for an established restaurant. This is
primarily due to name recognition.
You’ve created a menu that the customer really wants, right? Before attempting a menu launch,
make sure that all operational issues (staff training, equipment, and supplies) are taken care of.
46  Chapter 2

Figure 2-12 Wine and Tips Table

With 2 Glasses With 2 Glasses With a Bottle of

of House Wine @ of Chardonnay @ Chardonnay @
$3.25/ea. $4.50/ea. $24.00

Wine Charge $6.50 $9.00 $24.00

Total Dinner $46.50 $49.00 $64.00

Employee’s Tip @ 15% $6.98 $7.35 $9.60

Tips for ive tables $34.90 $36.75 $48.00

Tips for three turnovers $104.70 $110.25 $144.00

Tips in ive days $523.50 $551.25 $720.00

Tips in four weeks $2094.00 $2205.00 $2880.00

Tips in 52 weeks $27,222.00 $28,665.00 $37,440.00

This will minimize customer dissatisfaction. To maximize your chances for good customer
turnout, you may have to spend money on promoting your restaurant through radio, TV, the
Internet, magazines, or newspapers. This could be very expensive. Most restaurants barter
with other organizations to relieve the expense. There are excellent books on how companies
launch new and old products with more ideas than can it within the scope of this book. We’ll
limit ourselves to just this very useful one: bartering.

Bartering to Launch a Menu and Boost Sales

In today’s business environment, bartering, one of the oldest forms of trade, has been trans-
bartering Trading goods formed into a sophisticated way of doing business in the food service industry. Bartering is
and services without the deined as trading goods and services without the exchange of money. Restaurants use barter-
exchange of money. ing as a way to launch new menus and to increase business during slow periods, and magazines
or radio stations may barter to ill advertising spaces.
Let’s look at an example of how a restaurant might barter to make the difference for their
business levels. In 2008, at the urging of friends and family who had tasted his cooking,
Carlos Reyes opened a 100-seat restaurant called All-American Cuisine in a tourist area of
Los Angeles. The restaurant concept proved an immediate success, irst with the locals (who
approved of the price and variety) and then with holiday visitors.
After summer was over, restaurant business dropped by 50 percent and Carlos was contemplat-
ing closing the restaurant during the winter months. But he was concerned about the cost of
reopening the restaurant the following summer: Wouldn’t he need to advertise to let people
know he was open again? With that in mind, Carlos approached the local radio station with
the idea of trading lunches and dinners for airtime, at a rate about equal to his retail prices.
The idea was accepted, and both companies entered into a contractual agreement whereby All-
American Cuisine would supply lunches and dinners upon request for a total value of $10,000
in return for one hour of airtime every week for the months he planned to be in business.
Three weeks into his summer season, Carlos’s business started to pick up, and within six
weeks, it was at 95 percent capacity. Now the big question was as follows: How should the
restaurant account for its sales from the barter business with the radio station? No money
was exchanged, and the cost of the meals served was less than the $10,000 trade value.
To begin to answer the revenue recognition question, we must refer to generally accepted
accounting principles (GAAPs), which require that barter transactions be accounted for at
 Menu Development  47

“fair market value.” Fair market value in this case is $10,000, and that is what the sales tax
payment will be based upon. Without going in-depth into accounting practice, which is
beyond the scope of this book, the following journal entry should help clarify the revenue
recognition question:
To record contracted rate between All-AmericanCuisine and the radio station (external rate):

Debit—Balance Sheet Credit—Balance Sheet

Prepaid Asset—Barter $10,000
Deferred Liability—Barter $10,000

These accounts will be written off to zero as both parties redeem their trade value.
To record actual cost (internal rate): Assume food cost of 30 percent:

Debit—Proit and Loss Credit—Proit and Loss

Advertising—Radio $3,000
Food Cost $3,000

This entry effectively recognizes the food cost credit and charges the advertising expense
account.
From the above, it is clear that bartering is more than just a fair exchange of goods and ser-
vices between two businesses. It provides inancial bonuses for both companies. In a nutshell,
it is a cash-conservation vehicle because paying for business expenses such as advertising with
trade dollars leaves more cash available for other, strictly cash expenses.
For more information about barter, contact the International Reciprocal Trade Association:
175 West Jackson Blvd. Chicago, IL 60604.

Summary
When planning for sales, no tool is more important than the menu. Menus need to be struc-
tured in order to ensure repeat business, higher sales volume, and increased proitability. To
achieve these goals, meeting the customer’s needs is critical. Both the content and the appear-
ance of the menu must appeal to the customer.
To maximize profitability, the most profitable items should be emphasized. This may be
achieved through strategic placement, highlighting, server suggestions, and appealing descrip-
tive copy. Only by designing and pricing the menu properly can proit be maximized. Once a
menu is developed, the staff should be trained fully to sell the most proitable items and to
increase check averages. They also must be trained to provide excellent service and to seek
feedback from customers about opportunities for improvement, regarding not only the menu,
but also all aspects of the operation.
48  Chapter 2

Chapter Questions
Critical Thinking Questions
1. The menu is the primary food service sales tool. True or false?

2. A menu should be laid out to low in the same order as the items are served in a meal.
True or false?

3. Specials should generally be priced at lower-than-average contribution margins to ensure

that they will sell. True or false?

4. One advantage of a well-designed menu is that it eliminates the need to train the
waitstaff regarding sales techniques. True or false?

5. In maintaining minimum standards, the customers’ perception is primary. True or false?

6. What is a market survey, and what are the beneits of giving one?

7. What are the main characteristics of a standard and combination menu?

8. What factors should be considered in creating and designing a menu?

Multiple-Choice Questions
1. In designing a menu, which of the following should be considered?
A. customers
B. product availability
C. skill level of staff
D. kitchen design
E. all of the above

2. What is a good way to research your customers’ preferences?

A. Look them up on the Internet
B. Guess what their preferences will be
C. Conduct a market survey of past, present and potential customers
D. Ask your competition what their customers’ preferences are

3. Which of the following elements must menu planning include?

A. Printing the menus from a template
B. Consulting with your competition
C. Training your vendors to bring the right ingredients
D. Considering menu type, menu nutrition, menu design

4. How can you accurately calculate the menu cost of an item on your menu?
A. Using your menu recipes and the cost and amount of each ingredient
B. Remembering the cost of similar items at other restaurants where you’ve worked
C. Asking your vendors for their opinion of what it should cost
D. You cannot calculate menu costs because your vendors might change
 Menu Development  49

5. Let’s say your menu offers free range chicken and organic beef entrée items on the
menu. The vendor couldn’t bring either this week. What can you do?
A. Substitute more economical chicken and beef products
B. Substitute more expensive chicken and beef products
C. Inform guests and allow them to decide if they still want the item
D. Remind guests that free range and organic meats are healthier

6. Wait staff can increase sales by which of the following means?

A. Presenting the specials using appetizing language
B. Offering wine pairings to go with the entrées
C. Making their offers to the customers at the appropriate times during the meal
D. All of the above

7. Wait staff can also beneit directly from increased sales. Why is that?
A. Good salespeople can work in any industry.
B. When sales increase, tips generally increase as well.
C. Customers are more content when they have wine and dessert.
D. Wait staff enjoy additional training.

8. Which of these is an advantage to using a standard menu?

A. Standard menus allow for great lexibility from day to day.
B. You don’t need to select items for a standard menu, because these are created by a
franchise owner.
C. Since menu items remain the same, future sales are easier to predict.
D. Such a menu offers suggestions to your guests, so your servers don’t have to do so.

9. When you barter goods and/or services, how are these accounted for in your sales?
A. Barter transactions should be accounted for at fair market value
B. Barter transactions are inherently illegal
C. Barter transactions cost you less, so you should account for them at cost
D. Barter transactions need not be accounted for, because no money changes hands

10. If your restaurant is very expensive and upscale, your menu must:
A. Feature organic and vegetarian items
B. Include a long wine list
C. Spell out dollar amounts instead of using numerals and dollar signs
D. Match your image