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Case Studies

Case StudyClientService
1Full Service RestaurantTurnaround Practice
2Global Food Products CompanyTurnaround Practice
3226 Unit Fast Food Restaurant ChainMulti-unit Turnaround Practice
4Multi-unit Restaurant & Club OperationExpansion and Growth Practice
5Global Hotel ChainOperational Improvement Practice
6Airline – Industrial Food ServiceOperational Improvement Practice
7Golf Club – Restaurant & LoungeTurnaround Practice
8Resort – Full Service Restaurant & LoungeTurnaround Practice

Case Study #1

Hospitality Sector: Restaurant
Client: Full Service Restaurant
Service: Turnaround Practice
Situation:
This Family restaurant was in operation for over fifty years. This former $4.2 million annual revenue location was operating at $2.3 million revenue levels. The third generation of this family was in place with a 54% food cost and a labor cost of 52%. Liquor cost was unknown. Inventories had not been conducted in four years. On the first day of the engagement the bank accounts were overdrawn. All vendors were on a COD basis. The workforce was plagued with nepotism, negativity and a lack of direction. This operation was within days of closing.
Result:
PHA assessed the situation and implemented a multi-faceted re-engineering and turnaround program. Food and Liquor costs controls were implemented. New payment arrangements were made with the vendors. Policies and procedures were created and implemented. Labor and productivity controls were introduced. New and recurring working capital was immediately generated. New branding, advertising, catering and menu programs were introduced. This family legacy was not only saved but began the next fifty years with confidence and a new outlook.

Case Study #2

Hospitality Sector: Frozen Food Distribution
Client: International Food Products Company
Service: Entry into International Multi-Unit restaurant operations
Situation:
A decades old, globally prominent frozen food distribution company wanted to showcase and sell their product lines through a newly created multi-unit hospitality venue.
Result:
PHA assessed the clients needs and expectations. An opperating template addressing branding, design, operational improvement and franchising was developed.

This client has become a global leader in their sector while generating industry leading financial returns.

Case Study #3

Hospitality Sector: Global Fast Food Restaurants
Client: 226 Unit Fast Food Restaurant Chain
Service: Turnaround – US Based 226 Unit Franchisee
Situation:
One of America’s largest fast food franchisees had a real estate development background. The company had grown quickly from coast to coast. The organization’s direction and leadership lacked restaurant and multi-unit experience. The financial performance of the restaurants was well below the franchisor’s norms. Ownership was preparing for the worst.
Result:
PHA evaluated restaurant operations and management oversight and performance. A system wide plan of revenue performance, cost improvement and control and strict franchisor program adherence was implemented. Appropriate monitoring and analysis functions were introduced. PHA’s plan was met with widespread enthusiasm. Financial performance immediately improved. The chain was saved and properly positioned for a subsequent successful sale to restaurant operators.

Case Study #4

Hospitality Sector: Restaurant, Clubs
Client: Multi-unit Restaurant and Club operation
Service: Expansion and Growth Practice (EGP)
Situation:
This multi-unit restaurant and club organization had grown through individual acquisitions over the years. Each venue continued to operate utilizing the operating procedures of their former owners. Food, liquor and labor costs were problematic at each of the locations. The operations were operating without the proper levels of direction or support. The chain was living on borrowed time with ever decreasing operating margins and cash generation.
Result:
PHA developed and implemented system wide procedures and controls. Food, liquor, labor and operating costs and lackluster marketing programs were significantly reduced by the implementation of an effective operating template. Each operation participated in budgets, operational variance analysis marketing campaigns and incentive programs. Marketing and advertising programs were implemented for the first time. This fragmented and under performing business was transformed into a cohesive cash generating multi-unit enterprise.

Case Study #5

Hospitality Sector: Hotel Chain
Client: International Hotel Company
Service: Turnaround Practice – Food and Beverage Operations
Situation:
A major international hotel chain was undergoing a major internal restructuring process. Senior management had identified the non-core business of the food and beverage operations at most of their properties were generating a substantial cash drain. As a result, the core business of lodging was in jeopardy. An inconsistent out of control 24 hour restaurant chain was to blame.
Result:
PHA implemented a multi-faceted plan that improved operations where food and beverage were maintained, divested operations that were no longer part of the strategic plan and coordinated the turnaround outsourcing/subleasing of food and beverage operations.

PHA developed operating templates and procedures for lodging operators to better understand and operate restaurant locations. PHA developed, training and implemented financial and administrative programs to properly monitor the operational and financial performance of all food and beverage operations.
PHA transformed underperforming, unprofessional and cash draining restaurant operations into legitimate stand alone profit centers that were on the path to recurring increased cash flow contributions.

Case Study #6

Hospitality Sector: Industrial Food Service
Client: Leading Global Airline
Service: Operational Improvement Practice
Situation:
This U.S.based global airline operates out of their major hub operation with over 600 flights per day to over 50 countries. The airline’s foodservice operation accommodates nearly 20,000 employees in multiple food service outlets at this airport. Employee food service operations are spread throughout: passenger terminals, maintenance and cabin service facilities, training and conference centers, operations center, flight crew operations, and all employee work areas. Food service facilities include:

  • Cafeterias
  • Full Service Restaurants
  • Vending Operations
  • Food Service Trucks
  • Conference & Meeting Room Catering
  • Airline Catering

The airline had experienced dramatic growth over time. Food service operations were added absent of planning and control capabilities. Most food service outlets either barely broke even or lost money. Senior management at the airline knew they had a problem and wanted to change the culture and earnings performance. They turned to PHA.

Result:
PHA conducted a thorough review of all food service operations. Intensive interviews were conducted with airline management and employees, vendors and service personnel. A full financial review was conducted to determine individual outlet profitability.

PHA established policies and procedures to train, monitor and control operations in order to improve financial performance. PHA generated and implemented performance metrics guidelines and capital and operating budgets. PHA worked closely with all departments and employees to instill a new culture and discipline. A multi-unit operating template was installed. Individual outlet management was able to run their operations in an materially improved and profitable manner.

Case Study #7

Hospitality Sector: Golf Club – Restaurant & Lounge
Client: Private Investor
Service: Turnaround Practice
Situation:
This restaurant and lounge is located on a long established golf course. A golf club member and restaurant and lounge customer took over this failed operation. This investor had no restaurant or lounge experience and was “lending” material funds to this $2 million operation each month in order to keep the facility operating. The operation had developed a negative culture, lack of control, no procedures and significant cash and product shrinkage. This operation had significant local non-golf related patronage and heavy tournament activity. Inventories, food, liquor and labor controls were non-existent. Several menu and procedural changes were introduced to customer upheaval and were subsequently withdrawn. The investor had just invested over $1 million to update and renovate the restaurant and lounge. The investor wanted the operation to undergo a turnaround encompassing a new culture with consistent profitability.

Result:
PHA implemented the following changes:

  • Food & Liquor inventories
  • Theoretical vs. actual food and liquor costs
  • Generated menu specifications
  • Generated menu pricing sensitivities
  • Zero based labor requirement model
  • Improved customer relations
  • Establishment of policies and procedures
  • Implemented local area marketing program
  • Replaced key personnel: General Manager, Chef, Bar Manager
  • Worked with employees to insure success of new programs
  • Established a relationship with a new accountant to insure proper and effective financial reporting

The investor was able to cease monthly funding and began to obtain a return on his investment.

Case Study #8

Hospitality Sector: Resort – Full Service Restaurant
Client: Restaurant Founder & Owner
Service: Turnaround Practice
Situation:
This restaurant was situated between two five star luxury hotels in an upscale resort community. The restaurant experienced a severe downturn during the recent recession. The restaurant did not adjust to the daily operation to the new lower revenue levels. The restaurant fell materially behind with most obligations. Managing cash flow became a daily challenge. Food, liquor and labor levels were out of control. Revenue levels fell to all time lows.

Result:
PHA implemented the following changes:

  • Food & liquor inventories and controls
  • Generated new lower priced menus
  • The restaurant ‘s labor model was redesigned from a zero based prospective
  • Labor budgets and productivity were became daily priorities
  • Consolidated functions throughout the operation
  • Cost-of-goods sold were reduced by 5.5 % pts.
  • Labor cost was reduced 9.8 % pts.
  • Policies and procedures were redesigned to reflect new operating priorities
  • Implemented a marketing program to attract new customers to stress lower pricing in an upscale environment
  • Sales increased by 22%

Revenue began to increase to previous levels. The restaurant was able to pay current obligations. PHA negotiated repayment arrangements with older debts. The owner opened a second location six months after the conclusion of our engagement.