OCEAN PINES CLUBS ADVISORY COMMITTEE

Yacht Club Recommendations – September 6, 2001

In an effort to improve the profitability and streamline operating procedures at the Yacht Club to meet the goal of breaking even in fiscal year 2003, the Clubs Advisory Committee submits the following comments for your consideration and subsequent action.

After reviewing the current standards of operations at the Yacht Club it is evident that the goal to improve profitability is impossible without a drastic change in the operating procedures, level of service expectations, support of the Ocean Pines Board of Directors, and patrons.

Current operating policies are such that over-staffing, fear of raising prices to make acceptable food and beverage costs, and the inability to charge uniform banquet and meeting room charges to all groups prevents the club from operating under normal acceptable levels of restaurant operations. In other words, no restaurant could remain in operation with the high cost and pricing levels currently being experienced at the Yacht Club.

In addition to the above, it is crucial that all controllable operating expenses be scrutinized to prevent over- stocking of supplies, to insure the best price for resalable goods received from purveyors, to limit overtime wages, and to pay newly employed staff wages that are comparable with the area.

Please be informed that it is a common practice with food vendors to offer incentives to insure continuity of sales. This incentive is not without a catch, as it is worked into the price of goods offered.

The Club Manager must be accountable to someone who has food and beverage experience. It is a must that financial statements be reviewed monthly and corrective action be initiated to monitor and correct those items that do not meet the budgeted forecasts or conflict with standard operating procedures that affect the image and identity of the club. The Profit & Loss Review Sub-Committee of the Clubs Advisory Committee is prepared to perform this review with the manager each month, with the Ocean Pines Board approval. Keep in mind the members of this Sub-Committee are volunteers with many years of food and beverage experience.

1.        Conduct a payroll audit of the clubs. Dave Ferguson or a designate should make an unannounced visit with paychecks in hand, and require that each employee sign for their check in person. This should be performed at least twice annually in an effort to prevent ghost employees. Most companies consider this standard operating procedure.

2.       It is important that Profit and Loss statements and charts, be prepared for review by the Clubs Advisory Committee no later than the second Thursday of each month.

3.       Food Cost Controls

a.                             Two persons monthly should conduct food inventories.

b.                             All food purveyor pricing should be reviewed semi-annually.

c.                              Menu selections should be monitored quarterly to insure projected food cost compliance and that each item meets sales expectations.

d.                             Prepare group menus with various entrée selections that meet food cost projections and are tailored to various people counts. All group bookings must receive the same prices and selections. Special menus may be tailored as needed but all items must be priced to meet expected food costs.

e.                             All banquet menus should be reviewed semi-annually for food cost, and to insure that all entree items are meeting sales expectations.

f.                              All goods delivered should be immediately counted, weighed, and placed in inventory. Rear delivery door must remain closed and locked during business hours and only opened for delivery purpose. Employees are not to exit or enter through delivery area.

g.                             Make every effort to reduce the number of food storage areas to simplify inventory control procedures.

h.                            Train wait staff to sell higher price menu items, wine, after dinner cordals, and dessert selections.

4. Beverage Cost

a.         Conduct in-house weekly beverage inventories to insure compliance of established beverage costs. Two persons are to inventory beverage stocks monthly in order to insure accurate count.

b.          Unopened bottles of liquor should be used for functions where a cash bar is utilized to insure accurate inventory and sales counts. Upon completion of the above, an remaining opened bottles may then be entered into the bar inventory and sold accordingly.

c.        It is crucial that when liquor items are delivered they are immediately counted and each bottle is marked and secured in the liquor room. All used empty liquor bottles should be broken before bar par stock is replenished.

d.         Only authorized management personnel should have access to the liquor storage areas or draw supplies. Liquor storage areas should be locked at all times.

e.Bar staff should be re-trained in standard pouring procedures established by management to insure uniformity in the quality of the drink and to meet liquor cost projections. No exceptions. If a patron requests a stronger drink it should be mixed as requested and priced accordingly.

f.         No complimentary drinks should be given without the manager's approval. If approved they should be entered into the system as per usual and charged to the manager's personal promotional account.

g.        Liquor, beer, and wine selections must be priced to meet targeted beverage cost projections.

4. Labor Cost

a.      Re-examine dining room demographics to determine the number of tables that a waitress can comfortably serve for cost efficiency.

b.      Re-evaluate the kitchen staff to establish the accurate number of employees needed to meet the needs of the menu being served.

c.      Guest histories need to be studied to accurately predict guest counts to prevent overstaffing. Time and patience is needed to refine this important function.

e.            All hourly wages must be competitive with the area. The average tips received by staff must be a determining factor in the hourly wage paid. This area needs to be explored and honestly evaluated to bring payroll costs in line.

f.            A continuing staff training program must be established to emphasize the importance of proper dress, greeting guests, handling guest complaints, up-selling of select menu items, continued awareness of menu specials, and fast efficient service. Busboys must be trained to bus tables quietly and quickly. Ongoing dining room etiquette training is a must.

g.          Reduce hostess positions to one if only serving downstairs or two if guest counts require both levels to be open and served.

h.          Assistant I Night Manager must be properly attired and recognizable by guests, and should be used as host if demand dictates.

I.           Assistant Manager should have the authority to reduce the staff as business dictates during his shift.

J.          Assistant Manager should be trained to be constantly aware of food, beverage, and labor costs expected by management.

k.         Employees must not check in or out, other staff members.

6. Sales and Promotional Activities

a. Manager's promotional account should be established to provide a vehicle for the manager to compliment food and beverage as needed. A guest check must be written for each instance entered into the system, and charged to this account. This account will be monitored and entered each month on the financial statements in the Sales and Promotion category.

b. Sales and Promotional account should also be developed to be used when promotional parties are held by the Board of Directors such as Volunteer Recognition affairs or other staff promotional functions where no revenue is received. A guest check should be written and entered into the system at retail prices and in lieu of payment be charged to this account and entered on the financial report monthly as a line item under Sales and Promotion.

a.         Comment Cards need to be placed on each table at each set up.

These cards are crucial in obtaining the feedback from guests on not only the service they received but the quality of food and beverage.

b.            Wait staff needs to encourage guest participation in filling out comment cards and placing them in the container at the entry hall.

c.         Comment Cards should be collected from the locked box in the Yacht Club entry hall by a member of the Clubs Advisory Committee bi-weekly, and a report completed by the committee, for review with the clubs management monthly.

d.         A special comment format should be available for all group functions and presented to the person responsible for the affair. All group comments should be forwarded to the Clubs Advisory Committee, processed, reviewed, and discussed with the clubs management as stated above.

e.         Meeting room charges need to be established to cover the cost of setup and cleanup for those groups that do not require established meals. Coffee and danish should be considered break items and charged. Break refreshments should not be considered as a meal when determining meeting room charges.

f All employees should enter and exit from the front door only.

Smoke breaks should l)e taken in an area other than rear delivery door area. Employee vehicles should be parked in an area designated by management, away from the delivery area.

g.It is recommended that the computer system be upgraded. Newer systems have the capability to control inventory, assist in the ordering process, staff scheduling, and include very good cash control capabilities.

h.       All patrons should be given the option to receive separate Checks.

In closing, I would like to request the permission and the endorsement from the Board of Directors to initiate the following two sub-committees from our committee as follows.