Richard Eisenbarth
May 5, 2016
Can a Boost in the Federal Minimum Wage Affect Hospitality Design for the Restaurant Industry?
Can a Boost in the Federal Minimum Wage Affect Hospitality Design for the Restaurant Industry?

We have all heard conversations lately about boosting the federal minimum wage and many states are passing legislation to raise their own minimum wage over the next few years. In fact, the federal minimum wage has become a talking point in the presidential campaign as well.   We know that many restaurant workers need a boost in pay but how exactly does the minimum wage hike affect the industry and hospitality design?

I recently attended a presentation given by Dr. Richard Ghiselli, Head of the School of Hospitality & Tourism Management at Purdue University, my alma mater. The presentation focused on a research study about the effects of offering a Competitive Wage in Limited – Service Restaurants. The study suggested that, “In order to compensate for higher wages, prices would have to be increased between 4% and 25%, and/or product size would have to be scaled back between 12% and 70%.” All of us in the meeting felt that was detrimental to a restaurant’s viability.  Many operators will not be able to raise prices dramatically and then decrease portion sizes.

This got me to thinking about how we, as foodservice facility designers, can assist our clients in creating designs that allow them to operate a facility that is labor efficient, offer savings in utility conservation and lower first time capital cost. And, where can we save on ongoing operating cost to help offset the higher wage cost?  Let’s take a look at some options.

Reduce the Kitchen Footprint

Look at building smaller kitchens that do more in less space. I refer to this as vertical kitchen design. Use every square inch of both the horizontal and vertical space to create an efficient work station design. By doing this, you save on labor with efficient work station layout and reduce the building size.

Equipment Selection Matters

Look for equipment that can perform multiple functions like combination convection oven steamers (Combi’s) and blast chillers that chill, shock freeze, proof and reheat. Both these equipment items can replace several individual equipment pieces, thereby saving floor space. With proper planning, these types of equipment can be used essentially 18-24 hours a day, increasing the quality of the product being produced and potentially extending shelf life, which equals savings in food costs as well.

Energy Efficiency is Key

A free resource that anyone can use is the Life Cycle Cost Calculator, offered by the Foodservice Technology Center www.fishnick.com.  Using the calculator, you can compare specific equipment to determine what the operating costs are for many brands of equipment to determine which have the lowest cost of operation and fastest payback. We find that, many times, the specification of a particular brand of equipment can have significant operating cost savings to the owner, thereby reducing their overall cost of operation.

Pay Special Attention to Exhaust Hood Design

Did you know that between 40% and 60% of the “typical” restaurant energy consumption is for kitchen and restaurant heating, ventilation and air conditioning (HVAC)? We need to do whatever we can to reduce the exhaust airflow out of the kitchen. Three means to reduce HVAC cost are:

  • Design a smaller cooking battery whenever possible which will reduce the size of the exhaust hood needed.
  • Proper placement of both the exhaust hood in the space and the equipment under the hood can affect the exhaust hood air velocity requirements.
  • Provide demand-control equipment as part of the exhaust hood system. Just by providing demand controls as part of the kitchen exhaust package, the airflow reduction out of the exhaust hood can be potentially 40% to 50% less. That can save on first-time cost of air-conditioning tonnage as well as provide ongoing utility savings to heat and cool the kitchen.

 

I feel that if the above measures, along with others, are implemented in either a renovation of an existing kitchen or the design of a new kitchen facility, then the impact from a federal mandate of a higher minimum wage, resulting in higher labor cost, can be offset with lower operating cost and first time capital cost for the restaurant.

By:  Richard Eisenbarth, FCSI

President & COO | Ft. Lauderdale

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