What is "Shared?"
When setting up the internal economy of a food hall, one thing we see often is a lot of confusion on “what is shared?” And, “what is mine?” This has multiple variants, such as “what do I clean?” And, “what do you clean?” And, the all important, “What do I buy? and “What do you buy?”
Of course, each flavor of food hall will most often have a particular set of inclusions and exclusions, and there is little uniformity on the subject across operators. It’s an often avoided subject as it gets complex very quickly, isn’t standardized, and both developer and purveyor (in the last ten years) have often had little historical experience with it.
Money also exerts a heavy influence, because the eventual decisions affect each party’s separate income statement through operational expenditures. Many landlord-driven food halls typically favor less coordination, which seems freeing in the planning stages but can often feel chaotic to the customer in actual implementation.
Size also exerts an influence. The larger the food hall gets, the less the developer tends to control. This is primarily due to the difficulty of managing competing opinions, personalities, and perceptions of fairness. Smaller food halls typically want to be more cohesive in experience, because the hall under 25k square feet is typically considered “one experience” by the guest.
Finally, guest experience necessitates a good amount of sharing. Specifically, if you have interior aesthetic, seating, and customers utilize washable wares, these things will necessitate some sharing. The guest will typically find value in ordering from multiple vendors as a part of the experience. They will stay longer, use the bathrooms, do meetings, socialize, drink, and generally, hang out. This means you will have crossed a rather large guest “expectational chasm” from QSR to seated dining.
Hospitality practitioners will find this last bit very important and it involves a lot of operational consideration. To illustrate the point, let’s use an example. Diners will often receive food, but forget to pickup a fork or a napkin. When they put the food down to return to get a fork or a napkin, they will go to the closest food purveyor, not necessarily the one they ordered from. Who pays for the napkin? It seems like a triviality, but those costs add up, and there are dozens more examples like this. Moreover, if one purveyor has a branded napkin and another uses a paper towel, is that acceptable or confusing? Does the guest favor one napkin more than another? Of course they do. So how do we deal with this? When we meet with clients they often come up with three options, quickly:
The developer can “buy napkins in bulk so that they are standardized and CAM them back to the vendors.” Seems simple in theory, but we suddenly have an accounting activity, ledgering, ordering, storage, and waste from inappropriate usage. Wow, that escalated quickly!
“Let the purveyors deal with it. This is their area of purview.” But no two operators will really solve the solution the same way. Guests get confused. Overtime vendors ask the developer to provide some rules and streamlining, because guests keep getting frustrated by the lack of cohesion.
Adopt a (well-researched) standard that balances price, availability, and quality. Let purveyors stock and support the standard in uniformity. The operator can then easily stock for service gaps.
The third option is the best, but it requires some up font planning. This begins with understanding the basic SKU list, planning for balance, meeting a supplier, negotiating a stocking arrangement, and then setting up the structure by which the supplier direct bills the underlying purveyors fairly/cleanly. Obviously, this is best done with two different suppliers for fairness of competition.
Can everything be done this way? No. Other items require a different approach. Garbage, for example, necessitates total unification and management. As does grease trap cleaning, bathroom maintenance, common area floor scrubbing, music selection, and lighting (and there’s a lot more). Then there is grey area of shared walk-ins, trash ferries, delivery carts, ice machines. And then further grey areas that are technically in shared space, but generally utilized singly such as directional signage, menu specials boards and decor.
It’s easy to spot the planning gaps amongst early generation food halls. For example, some try to enclose spaces with gating for security, while others don’t. Signage is varied, so that the guest often has to figure out where and how to order from stall to stall. Lighting may be limited to overhead gym lights. Purveyors may provide their own sound through the use of boom boxes. You might wipe your face with commercial paper towel instead of a napkin, while the next stall provides rolled silverware.
So, how do you solve for these gaps?
Start with customer journey.
Follow a customer through the shopping cycle. Make a list of everything they may encounter.
Take this series of steps and convert it to a longer list of “needs”
Decide operationally how the purveyors will best supply/solve these needs for the customer and what success looks like if it is done well/efficiently.
Test each decision using the following questions?
Will the new process create excessive labor requirements of the purveyors?
Will the new process subject the developer to significant amounts of waste expenses?
Does the new process create breakage/theft that would be abnormal for a hospitality setting?
Does the new process prioritize creative expression of an individual brand over the guest experience?
Will it require in-the-moment coordination between vendors?
If you answer yes to any of these questions, consider it a red flag. If you answer yes to two or more of these questions, find a different solution.
You have probably now filled several pages in a notebook at this point. Turn that into a single page with two columns. Put everything you are responsible for in the first column and everything the purveyors are responsible for in the second column. Make this an exhibit to the agreement. If anything takes more than a few sentences to explain, Add it to an annually updated “rules/policies” document that appends the agreement.
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Politan Group specializes in operating food halls, bars, and bars within food halls. We also provide remote accounting, HR, and administration for food halls. Finally, we sell software that organizes much of the routine processes. If you are thinking of building a food hall or need help with an aspect of a food hall you already own, reach out to us. Politan is the most-awarded food hall operator in the industry.