write an article about fonda mexican restaurant
- The operating model and its pros and cons
- Profit Sharing Structure
- What Profit Sharing means for the business
- Non-Financial Performance Indicator
- How was Business Planning done
- Relevance of Cost-Volume-Profit (CVP) Analysis
- Was CVP relevant to starting and expanding operations for Fonda?
Fonda Mexican Videos Business Structure (6) - Structure of Fonda is a combination of trust and company One parent company owned by family trusts - Shareholdings by himself and business partner (now two partners) Shares are held within own private discretionary family trusts The shares in a parent company Parent company owns the rest of the corporate structure Each restaurant is its own propriety limited company in its own right Separate propriety limited company which is in charge of all the payroll - Everyone in corporation is employed/paid by one company despite the fact they work in different restaurant Business Planning (7) - Business plan was a little different than conventional business plan - The most important part of the business plan was the cash flow projections Cash flow projections were how much Fonda was going to cost to set up, what sort of turnover it will have (revenue hard to project but looked at direct/indirect competitors), and what expenses will occur as the business is ran (percentage of turnover) From a product/brand side of things - ensuring that you have a product that people will want. Important to get feedback and collaborate with focus groups Base model of what they saw overseas in America Tested name, colours, menu, price Business planning is about derisking the venture - Business plan has been changed - core of product/brand hasn't changed, revenue was larger than expected (also larger costs) Infrastructure needed to operate business was at a higher level Non-Financial Performance Indicators (7) - NFPI are most important - often flow into financial performance indicators - Key NFPI is the secret shopper program - measured weekly Culture surveys and staff turnover can give a clear picture on how staff are feeling Strong link between happiness and financial performance of business Food safety compliance needs to be adhered to Food ordering times - Number of complaints Performance against Budget (8) - Performance is assessed by location Dashboard put together for each restaurant which incorporates secret shopper results, sales (tracks how leadership team are managing labour costs and cost of goods) Also have profit share system going - each leadership team are on base salary but also a % of profit that the restaurant performs Leadership team therefore looks closely at profit/loss statement Monthly meeting to go through results of each restaurant Quantifiable measurements means there is a high level of accountability Staff drive the budgeting Company structure (rather than franchise) means you maintain control of culture, who is hiring Disadvantage means you don't have necessary an owner - but get around this by having the profit share system CVP (9) - CVP has a huge impact on planning First hurdle is breaking even, next is making a profit - Had a worst case + realistic + best case projection - Worst case was breakeven - so no emotional/financial hardship Gives you a guide on how much you can invest as breakeven will change with investment Starting small means breakeven point is obtainable Profit Share Scheme (9) - Taken off flight centre model Every leader is making more money than on fixed company - Business is also making greater profits - even though there is greater saleries - Management links to accounting Fonda Mexican Videos Business Structure (6) - Structure of Fonda is a combination of trust and company One parent company owned by family trusts - Shareholdings by himself and business partner (now two partners) Shares are held within own private discretionary family trusts The shares in a parent company Parent company owns the rest of the corporate structure Each restaurant is its own propriety limited company in its own right Separate propriety limited company which is in charge of all the payroll - Everyone in corporation is employed/paid by one company despite the fact they work in different restaurant Business Planning (7) - Business plan was a little different than conventional business plan - The most important part of the business plan was the cash flow projections Cash flow projections were how much Fonda was going to cost to set up, what sort of turnover it will have (revenue hard to project but looked at direct/indirect competitors), and what expenses will occur as the business is ran (percentage of turnover) From a product/brand side of things - ensuring that you have a product that people will want. Important to get feedback and collaborate with focus groups Base model of what they saw overseas in America Tested name, colours, menu, price Business planning is about derisking the venture - Business plan has been changed - core of product/brand hasn't changed, revenue was larger than expected (also larger costs) Infrastructure needed to operate business was at a higher level Non-Financial Performance Indicators (7) - NFPI are most important - often flow into financial performance indicators - Key NFPI is the secret shopper program - measured weekly Culture surveys and staff turnover can give a clear picture on how staff are feeling Strong link between happiness and financial performance of business Food safety compliance needs to be adhered to Food ordering times - Number of complaints Performance against Budget (8) - Performance is assessed by location Dashboard put together for each restaurant which incorporates secret shopper results, sales (tracks how leadership team are managing labour costs and cost of goods) Also have profit share system going - each leadership team are on base salary but also a % of profit that the restaurant performs Leadership team therefore looks closely at profit/loss statement Monthly meeting to go through results of each restaurant Quantifiable measurements means there is a high level of accountability Staff drive the budgeting Company structure (rather than franchise) means you maintain control of culture, who is hiring Disadvantage means you don't have necessary an owner - but get around this by having the profit share system CVP (9) - CVP has a huge impact on planning First hurdle is breaking even, next is making a profit - Had a worst case + realistic + best case projection - Worst case was breakeven - so no emotional/financial hardship Gives you a guide on how much you can invest as breakeven will change with investment Starting small means breakeven point is obtainable Profit Share Scheme (9) - Taken off flight centre model Every leader is making more money than on fixed company - Business is also making greater profits - even though there is greater saleries - Management links to accounting
