Chapter 9 — Quiz

Twenty-six self-check questions. Answer from memory first; the key is collapsed at the bottom.

Multiple choice

1. A pre-opening budget covers the money spent: - (a) from lease signature to opening day - (b) from the end of construction to the first paying guest - (c) from the letter of intent to the certificate of occupancy - (d) during the first ninety days of operation

2. According to §9.1, the structural reason the pre-opening line is the most reliably underestimated in a restaurant project is that: - (a) contractors routinely misquote it - (b) it is the only line with no physical object attached to it - (c) it is the smallest line in the budget - (d) lenders do not require it to be itemized

3. Bellwether's plan carries \$35,000 for pre-opening. The chapter's bottom-up build totals: - (a) \$42,500 - (b) \$55,130 - (c) \$71,300 - (d) \$94,600

4. The two largest blocks in that bottom-up build are: - (a) marketing and licensing - (b) licensing and utilities - (c) labor before revenue and opening inventory - (d) opening inventory and rehearsal food

5. Bellwether's pre-opening payroll of \$31,510, expressed against the plan's \$500,000 of annual all-in labor, is approximately: - (a) 1.5 weeks of steady-state payroll - (b) 3.3 weeks of steady-state payroll - (c) 6.5 weeks of steady-state payroll - (d) 11 weeks of steady-state payroll

6. Bellwether's rent commences on: - (a) delivery of possession - (b) lease signature - (c) substantial completion of construction - (d) the earlier of opening or thirty days after the certificate of occupancy

7. Three months' abatement at Bellwether is worth \$23,800. Every week of delay past the thirty-day window burns approximately: - (a) \$610 - (b) \$1,831 - (c) \$5,950 - (d) \$7,933

8. The chapter's "thirty-day rule" says that the certificate of occupancy should be treated as: - (a) the finish line of the project - (b) the starting gun for a thirty-day training program - (c) the trigger for hiring the management team - (d) the point at which the soft open is scheduled

9. A four-week slip after Bellwether's full crew is on payroll costs approximately: - (a) \$7,324 - (b) \$18,200 - (c) \$32,968 - (d) \$47,500

10. The sequencing rule in §9.3 is that a position joins the payroll: - (a) as late as legally possible - (b) on the first day it can do work that could not have been done without it - (c) all at once, two weeks before opening, to build a team - (d) when cash flow permits

11. A menu rehearsal differs from a tasting principally because a rehearsal: - (a) includes the service staff - (b) uses the final plateware - (c) produces written artifacts — cost cards, photographs, portion standards, station map, fire times, and an 86 plan - (d) happens after the certificate of occupancy

12. Bellwether's kitchen must send roughly how many plates in the peak hour of a plan night, at 95 covers, 35% peak-hour arrival, and 1.8 plates per cover? - (a) 33 - (b) 45 - (c) 60 - (d) 95

13. A plate-up is: - (a) a staff meal before service - (b) the practice of plating a dish twice to check consistency - (c) a service-staff tasting at which every menu item is plated as it will go to a table and documented - (d) the point at which the expediter releases a table's entrées

14. The distinction between friends-and-family service and a soft open is best stated as: - (a) one is free and one is paid - (b) one tests whether you can do it; the other tests whether you can do it repeatedly, at pace, in front of people who will talk - (c) one is for staff and one is for press - (d) one uses the full menu and one does not

15. Serving alcohol at an unlicensed friends-and-family service is generally: - (a) permissible because nothing was charged - (b) permissible if guests bring their own - (c) a licensing offense in essentially every American jurisdiction, and often treated the same as selling it - (d) governed solely by the health code

16. The honeymoon period is dangerous principally because it: - (a) causes staff to become complacent - (b) inflates revenue and biases the feedback sample at the same time - (c) attracts press coverage too early - (d) makes reservations difficult to manage

17. In Bellwether's ramp projection, from weeks 1–4 to weeks 9–13, Tuesday dinner covers fall 29% while Saturday falls 2%. The correct reading is that: - (a) Tuesday marketing has failed - (b) weekend demand is the least elastic and therefore the least informative; Tuesday reveals the underlying repeat demand - (c) the kitchen is performing worse midweek - (d) the sample is too small to interpret

18. Bellwether's projected first-quarter prime cost is 66.6%. For the year to land on the frozen 60.0%, weeks 14–52 must run at: - (a) 54.2% - (b) 58.0% - (c) 60.0% - (d) 62.5%

19. The projected excess prime cost of the first ninety days (\$23,854) is almost exactly equal to: - (a) the working-capital reserve - (b) the pre-opening budget line - (c) the three-month rent abatement - (d) the annual equipment lease payment

20. In the first ninety days, the chapter's instruction is to: - (a) measure little and decide quickly - (b) measure everything and decide very little - (c) wait until month four to begin measuring - (d) measure only what the accountant asks for

21. Which of the following should be left alone longest in the first ninety days? - (a) a cooler that will not hold temperature - (b) a dish that consistently takes nineteen minutes - (c) the concept - (d) a shift that is consistently over-staffed by one person

22. If Bellwether's entire \$36,300 pre-opening gap is drawn from the working-capital reserve, the remaining reserve covers approximately how many days of the restaurant's \$48,933 of monthly fixed obligations? - (a) 5 days - (b) 12 days - (c) 21 days - (d) 28 days

Short answer

23. Explain in two or three sentences why cutting the rehearsal and training budget to close a pre-opening gap is a false economy, and support it with one number from the chapter.

24. State the three ways a rent abatement can be spent, and say which one Chapter 6's negotiated clause was designed to produce.

25. Why does the chapter insist that opening day be set after the liquor license is in hand, rather than treating a late license as a problem to manage? Give both the arithmetic reason and the structural one.

26. Bellwether's plan puts partner draws at zero during pre-opening. Explain what that does to the apparent size of the pre-opening budget, and what it does to the actual fragility of the business.

Answer key **1.** (b) — from the end of construction to the first paying guest. **2.** (b) — every other line is a thing you can walk through or point at; pre-opening is hours, training food, and fees that leave no physical trace, so nobody audits it. **3.** (c) — \$71,300. **4.** (c) — labor before revenue (\$31,510) and opening inventory (\$15,820), totalling \$47,330, which is already \$12,330 more than the entire budgeted line. **5.** (b) — \$31,510 ÷ (\$500,000 ÷ 52) = \$31,510 ÷ \$9,615 = 3.28 weeks. **6.** (d) — the earlier of opening or thirty days after the certificate of occupancy, per Chapter 6. **7.** (b) — \$95,200 ÷ 52 = \$1,831 a week. **8.** (b) — the starting gun for a thirty-day program. Everything that does not require a legally occupiable building should already be finished when it is issued. **9.** (c) — \$25,644 of payroll at \$6,411 a week plus \$7,324 of burned abatement = \$32,968, which is 94% of the frozen \$35,000 line. **10.** (b) — on the first day it can do work that could not have been done without it. **11.** (c) — the six artifacts. A rehearsal that produces no artifacts was a tasting. **12.** (c) — 95 × 0.35 = 33.25 covers; × 1.8 = 59.85 plates, or roughly one a minute for sixty consecutive minutes. **13.** (c). **14.** (b). **15.** (c) — and the downside is not a fine, it is your application. Verify locally. **16.** (b) — the second effect is the more insidious, because it temporarily disables the instrument (guest feedback) you would normally use to find problems. **17.** (b). **18.** (b) — (\$930,280 − \$241,714) ÷ (\$1,550,000 − \$363,100) = \$688,566 ÷ \$1,186,900 = 58.0%. **19.** (c) — the abatement is \$23,800 and the projected excess prime cost is \$23,854, a difference of \$54. The landlord's three free months pay for the education. **20.** (b). **21.** (c) — the concept. Ninety days of operation is evidence about execution, not about whether Chapters 2 and 3 were wrong. **22.** (a) — \$45,000 − \$36,300 = \$8,700; \$48,933 ÷ 30 = \$1,631 a day; \$8,700 ÷ \$1,631 = 5.3 days. **23.** Because the cost reappears within weeks under a different name. Cutting training roughly in half saves about \$8,870 and produces roughly \$8,244 of excess prime cost and comps inside the first eight weeks alone — before counting the second visits that never happen, which Chapter 23 prices. Separately, an unverified yield runs a point or two of food cost high all year, and one point on \$1,116,000 of food sales is \$11,160. **24.** (i) Spent on the ramp — abatement lands on months 1–3 of operation, which is what Chapter 6's clause was designed to produce; (ii) burned before opening, if the gap between the certificate of occupancy and opening day exceeds thirty days; (iii) spent on the honeymoon, in the sense that it lands on top of inflated opening revenue and makes the first quarter look structurally better than the business is. **25.** Arithmetically: the choice you are left with is between opening dry (roughly \$23,700 of lost beverage contribution over four weeks, assuming you hold every cover, which you will not) and delaying (\$32,968), and both are bad. Structurally: the license is a gate whose date belongs to somebody else, and you never place an opening date — which commits payroll, marketing, and reservations — on the critical path of an item you do not control. **26.** It makes \$35,000 look survivable, because roughly \$68,500 of real labor over six months has been moved off the project budget and onto two household balance sheets. It makes the business more fragile because the two people it depends on enter the hardest ninety days of their working lives with no personal cash cushion, which is precisely when an owner is most likely to take money out of the business at the wrong moment.