Empty tables cost restaurants money, but many restauranteurs don’t know what this actually means in dollars and cents.
Every patron who leaves a restaurant because they don’t like the quoted wait time represents the loss of at least a 70% profit margin. As a provider of Table Management Systems, how can you help your clients maximize the number of guests served to keep the profit from walking out the door and going to a competitor?
Quantifying lost profits for empty tables
Floqque research has included talking to restaurant and service provider personnel as often as possible, asking questions about their scheduling service and traffic flow management.
Recently, a retired restaurant supply chain provider offered these statistics for a successful restaurant’s Profit & Loss breakdown:
- 30% = Cost of Goods Sold: Food, Liquor, Beer, Wine, To-go Packaging
- 30% = Labor & Management: Payroll, Payroll Taxes, Health Insurance, Other benefits
- 24% = Other Expenses:
- 5% = Direct Operating Expenses: Linen, China Glass, Kitchen Supplies, Restaurant Supplies, Uniforms
- 6% = Managed Expenses: Gas, Water, Hauling of Waste, Pest Control, Telephone, etc.
- 10% = Indirect Expenses: Rent, Taxes, Business insurance, Travel, Employee-related Expenses
- 3% = Marketing Expense
Total: 84% Net Cost
A full 54% of these expenses are fixed costs just to keep the doors open, regardless of how much revenue a restaurant has coming in.
A restaurant’s profits come from sales to diners: i.e., when tables are occupied. If you subtract the 30% cost of goods sold, the restaurant’s gross profit is 70% of the sale. If tables sit empty, not only is the restaurant losing revenue, but so is the staff, as restaurant servers earn most of their income through the gratuities received from patrons. Maximizing table occupancy is a top priority for restauranteurs.
These are the margins for restaurants that have figured it all out and are doing well. Are your clients even close to hitting these numbers?
As a reservations and table management system provider, you should take every opportunity to help your clients achieve numbers like these. Now you can help them greatly improve their rates of table occupancy! Floqque has a viable solution to dramatically help table management systems improve these margins for their customers.
Recent Case Study
Submitted by Tom Loya in Ohio:
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My wife and I really wanted to dine at this restaurant we recently heard about. Upon arriving, we were told the wait would be close to two hours. That’s a longer wait than we expected, but we had flexibility and decided to add our name to the waitlist anyway. The hostess told us that when our table was ready, we only had 10 minutes to check in or it would be cancelled.
We got a text confirming that we were on the list and confirming that the wait would be 2 hours, so we decided to go to the nearby Walmart to kill some time.
Four minutes later, as we pull into the Walmart parking lot, a new text came, saying our wait was updated to only 45 minutes. Then, four minutes later came ANOTHER text saying our table was ready. We sped back to the restaurant so we wouldn’t lose our table. When we got there and checked in, I heard the hostess still quoting the hours-long wait even though there was no crowd in the lobby.
So, long story short, after we were told the wait was two hours, the reality was that it only took eight minutes to be seated (full text message transcript below).
The food was excellent, BTW, but I have to wonder how many people walked out without putting their name on the waitlist because of the supposed “2 hour” wait. There’s no telling how much business that restaurant has lost because of it. Most people wouldn’t wait for such a long time. They’d just go someplace else.
My wife and I really wanted to dine at this restaurant we recently heard about. Upon arriving, we were told the wait would be close to two hours. That’s a longer wait than we expected, but we had flexibility and decided to add our name to the waitlist anyway. The hostess told us that when our table was ready, we only had 10 minutes to check in or it would be cancelled.
We got a text confirming that we were on the list and confirming that the wait would be 2 hours, so we decided to go to the nearby Walmart to kill some time.
Four minutes later, as we pull into the Walmart parking lot, a new text came, saying our wait was updated to only 45 minutes. Then, four minutes later came ANOTHER text saying our table was ready. We sped back to the restaurant so we wouldn’t lose our table. When we got there and checked in, I heard the hostess still quoting the hours-long wait even though there was no crowd in the lobby.
So, long story short, after we were told the wait was two hours, the reality was that it only took eight minutes to be seated (full text message transcript below).
The food was excellent, BTW, but I have to wonder how many people walked out without putting their name on the waitlist because of the supposed “2 hour” wait. There’s no telling how much business that restaurant has lost because of it. Most people wouldn’t wait for such a long time. They’d just go someplace else.
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Why are wait time quotes so unreliable? Here are just a few of the factors that affect estimating wait times:
- The number of people who are already on the waitlist but have abandoned the waitlist without telling the host(ess).
- The amount of time the host(ess) spends trying to find one of those people who abandoned the waitlist before realizing they are no longer there.
- The number of people who had an advance reservation or joined a waitlist remotely and are running late, or cancel at the last minute, or no longer have any intention of coming.
While reservation and table management systems are helpful, they just can’t account for the myriad changes in real time when trying to merge schedules, parties, availability, traffic, and dozens of other details. The result is gaps in the flow of business that are very costly and the reason why so many restaurants refuse to accept reservations.
This is a lose-lose situation, but not a lost cause. With Floqque’s patent-pending technology, waitlists and reservations are managed in real time, enabling a frictionless flow of patrons to the table management systems.
What Floqque Brings to the Table (Management Systems)
Floqque has patent-pending Predictive Virtual Queuing technology that goes in front of existing scheduling systems, dynamically coordinating reservations and waitlists with real time traffic flow using multiple tools such as GPS tracking, historical profile data, AI, and real-time app updates.
This new technology provides a solution to a system that is ripe for an AI intervention.
Floqque’s mission is to:
- Significantly reduce customer wait times
- Significantly increase patronage and profits for service providers
- Significantly improve Front of House operations
- Significantly improve customer service
- Significantly improve consumer satisfaction and loyalty
What does that mean to table management service providers? Those who embrace Floqque technology will benefit by:
- Increased customer loyalty
- Growing customer base
- Increased traffic flow
- Increased profits
- Automatic 2-way coordination with the patron allowing:
- Restaurants to seat patrons early, when possible
- Restaurants to avoid holding tables while waiting for late comers to show up
Floqque’s patent-pending algorithms help table management systems configure the best flow for a business to serve patrons expediently, as guided by actual real-time circumstances. Restaurants will be able to provide patrons far more accurate time estimates and ensure their experience is memorable for all the right reasons.
For restaurants who have refused to accept reservations because of the complexities and uncertainty, the real-time restaurant seating features being developed by Floqque provides a way to overcome their objections and finally ditch the pen and paper.
Despite the best-laid plans, life happens, but that doesn’t mean restaurants have to miss out on opportunities that are standing right in front of them. After all, a bird in the hand is worth two in the bush. Let Floqque help you help restaurants ensure that they are taking advantage of every opportunity that walks in the door.
Fly higher with Floqque...
Table Management, Scheduling and Queuing Providers: Dominate your industry! Learn how Predictive Virtual Queuing technology will make you a better solution for your clients.
Restaurant Owners: Ask your current table/reservation/waitlist management provider about EnRoute™ by Floqque technology.
And, as always, please add your thoughts to the comments below!
[7/17/21 6:40 PM] 346637: You've been added to the waitlist at [hidden] - Streetsboro! The estimated wait for your party of 3 is 2 hours. We'll text you here when your table is ready.
Text 9 at any time to remove yourself from the waitlist.
[7/17/21 6:44 PM] 346637: We've updated your estimated wait time to 45 minutes, starting now. We'll let you know when we're ready to seat you.
Text 9 at any time to remove yourself from the waitlist.
[7/17/21 6:48 PM] 346637: Your table is ready. Please make your way to the host stand.
[7/17/21 6:53 PM] 346637: Your table is ready. Please make your way to the host stand.
