Chapter 23 — Exercises

Thirty-two items, graduated from recall to judgment. Items marked † have worked solutions in the answers appendix. No answers appear in this file — if you find yourself guessing at a number, go back and find the section that built it.

Unless a problem says otherwise, use the Bellwether figures: $46.00** dinner check, **$24.00 brunch check, 60.0% prime cost (so 40% contribution), 9,035 distinct guests at 4 visits a year, 36,140 covers, Year 1 revenue $1,550,000**, Hearth Chicken at **$8.52 plate cost and $29.00 on the menu.

A. Recall and definitions (1–8)

1. State the difference between service and hospitality in one sentence each, and give one example of a restaurant that has the first without the second.

2. Write out the guest lifetime value formula and name all four inputs.

3. What are the four moves of service recovery, in order? Explain in one sentence why the order matters more than the content.

4. † Name the three tiers of recognition from §23.5, and say which one cannot survive high staff turnover and why.

5. Define repeat-visit rate as Bellwether will measure it, and name the one word in that definition that limits what the measurement can tell you.

6. What is the service recovery paradox, and give two reasons it must never become an operating philosophy.

7. List the five steps of the guest feedback loop and name the step most restaurants fail at.

8. In one sentence each, state what Chapter 22 owns and what Chapter 23 owns about the dining room.

B. Applied reasoning (9–16)

9. A restaurant executes every step in its sequence of service flawlessly and its guests describe the experience as "fine." Which quadrant of Figure 23.1 is it in, and why is that quadrant more expensive than the one where guests complain?

10. Your GM proposes running the same table touch script at every table on a timer, so that compliance can be audited. Give the strongest argument for the proposal and then the argument that defeats it.

11. † A server tells you they didn't comp a slow table's dessert because they "didn't want to go find a manager during a rush." Diagnose the problem. It is not a training problem — what is it, and what document fixes it?

12. Explain why the offset formula $x = (A-1)/(5-A)$ does not contain $n$, the number of reviews you have — and then explain why the number of reviews you have still matters enormously.

13. Bellwether's plan needs 7.7% of the ten-minute drive-time population to visit four times a year. Rewrite that requirement as a hospitality statement rather than a marketing statement, and say which department it makes accountable.

14. A guest tells a server it is their first night out since a difficult year. The server writes it in the guest profile so the next visit can be warmer. Argue both sides, then take a position.

15. Your survey average is 4.7 on a 6% response rate. A consultant says this proves your guest experience is excellent. Give three separate reasons that inference is unsound.

16. §23.3 says the best pace decisions are made in the reservation book, not at the table. Explain the mechanism, and name the Chapter 22 tool that has to cooperate for it to work.

C. Cost this (17–20)

17. A bartender pours a $16 cocktail incorrectly, dumps it, remakes it, and comps the remade drink. The pour and garnish cost $3.40. Compute (a) the cash cost of the mistake, (b) the total contribution forgone versus a clean pour, and (c) explain to a skeptical owner why (b) is not $3.40.

18. † A four-top on Saturday: appetizers land nine minutes late, one Hearth Chicken comes out wrong and is re-fired, and the server comps that entrée, two glasses of wine at $14 each, and one dessert at $12. Compute: (a) the extra food cost actually incurred; (b) the total contribution forgone versus a clean night; (c) the value at risk if all four guests are lost; (d) the break-even probability of loss that would justify the recovery.

19. Compute guest lifetime value for each of the following and rank them: (a) a $46 dinner guest, 4 visits/year, 3 years, 40% contribution; (b) a $24 brunch-only guest, 8 visits/year, 3 years, 40% contribution; (c) a $46 guest who comes twice a month for 18 months, 40% contribution; (d) a $92 special-occasion guest who comes once a year for 5 years, 40% contribution.

20. Bellwether's comp budget is 0.8% of $1,550,000. Compute it per year, per week, per service (7 services a week), and per cover — then compute how many guests at $220.80 it has to save to break even, and express that as a percentage of the 9,035-guest base.

D. Price this / set the policy (21–24)

21. A 40-seat neighborhood bistro has a $28 average check and a 38% contribution margin ratio. Its guests come four times a year and it assumes a three-year relationship. (a) Compute its guest lifetime value. (b) Rebuild the SVC-1 through SVC-3 dollar authorities from §23.4 scaled to this restaurant, and justify each number against the GLV you computed. (c) At what GLV would you stop giving servers standing comp authority at all? Defend the threshold.

22. A restaurant with a 35% contribution margin ratio is considering a 25%-off email promotion to its existing list. (a) Compute the contribution per cover at full price and at the discount, on a $40 check. (b) Compute the minimum incremental share of redemptions required to break even. (c) State the general rule about discount depth versus contribution margin, and give the discount level at which this restaurant's promotion becomes impossible to justify at any incrementality.

23. † Design the review-response protocol for a 120-seat restaurant that receives roughly 25 reviews a week across three platforms. Specify: who responds, the response-time commitment, what must be checked before drafting, the approval step, and the three things that are never written. Then compute the annual labor cost at 15 minutes per response and a $34/hour loaded manager rate, and the percentage of revenue that cost represents if the restaurant does $2.4 million.

24. Set a repeat-visit target for a new restaurant whose revenue model requires 5,600 distinct guests at 5 visits a year. State the steady-state repeat share of covers implied by 5 visits, and build a three-year ramp toward it with a leading indicator for each year.

E. Build the shift to a labor target (25–26)

25. A Friday forecast: 120 covers, $46 average check, a 30% labor target. (a) Compute forecast sales and the labor budget in dollars. (b) Your scheduled floor comes to $1,548. You are considering keeping a fifth server on for a six-hour shift at a $18/hour loaded rate, whose job after 8:00 p.m. is table touches, recovery, and the door. Compute labor cost and labor percentage with and without them. (c) Compute how many guests that extra server would have to save, at $220.80 each, to pay for themselves — and state what you would need to observe over a quarter to find out.

26. Chapter 14's Friday: the grill cook no-shows at 3:40, 142 covers are booked, and eleven tables will run past the 22-minute standard. Write the 4:00 p.m. plan that protects the guest experience specifically — not the ticket times, which Chapter 14 handles. Name at least five concrete actions, assign each to a role, and price the ones that cost money.

F. Read this and find the leak (27–28)

27. † Four consecutive weeks of a comp and recovery report. Find the leak, name the chapter that owns it, and say what you would do Monday.

(SVC-1 over ticket standard · SVC-2 wrong/mis-fired dish · SVC-3 table compromised · SVC-4 allergen/safety · MKT-1 discretionary.)

Also compute: what the week-4 rate annualizes to on $1,550,000 of sales, and the overrun against a 0.8% budget.

28. A different restaurant's comp line has run at a steady 0.35% of sales for six months, well under its 0.9% budget, and the GM highlights it in every meeting. SVC-2 and SVC-3 counts are also flat. Reviews mention slow service four times in the same period, up from once. What is your first question, your second, and the specific report you would pull?

G. Write it (29–30)

29. Draft the public response to this review. Two hundred words maximum. Do not offer anything of value publicly, do not identify the guest, and do not name a change you would not actually make.

★★☆☆☆ — "Fine food, weird evening" We came for a work dinner, six of us, 7:00 on a Wednesday. Food was genuinely good. But we were seated at a table for six that was clearly two four-tops pushed together, the seam was right in the middle, and two people were basically sitting at a different table all night. We asked at booking for a round table and were told it wouldn't be a problem. Nobody mentioned it or apologized. Small thing, but for $480 you notice.

30. † Write the one-page guest-notes policy for your staff: what goes in a guest profile, what never does, the single rule that covers the edge cases, who may read the notes, and how long they are kept. Include one sentence directing the reader to verify local privacy obligations.

H. Judgment and ethics (31)

31. Take a position on each, in writing, with the arithmetic where it applies:

(a) A guest emails offering to delete a one-star review if you send a $100 gift card. What do you do, and what do you write back?

(b) A regular worth roughly $1,300 in contribution over three years is consistently demeaning to one of your servers. The server has not asked you to do anything about it. What do you do, and what do you tell the staff?

(c) Your reservation platform offers a feature that scrapes public social media to enrich guest profiles with photos and employer information. It is legal in your jurisdiction and your competitors use it. Do you turn it on?

(d) A server has been writing notes like "difficult, seat in the back" on guests who tip poorly. They argue it improves service for everyone else. What do you do, and what is the policy consequence?

I. Business Plan extension (32)

32. † Write the Guest Experience section for your own concept — the one you have been building since Chapter 1 — in no more than two pages. It must contain all four elements and every number must compute from your own check average and contribution ratio:

1. The hospitality standard, in one sentence a new hire could act on.
2. The service-recovery policy: an authority ladder with dollar figures scaled to your GLV, reason codes, and the review cadence.
3. The comp budget: as a percentage of sales, in dollars per year, per week, and per cover — plus the number of guests it must save to break even.
4. The repeat-visit target: a three-year ramp, the steady-state repeat share your revenue model implies, the measurement stack you will actually have, and an honest statement of what percentage of covers it will fail to identify.

Then add the section every plan needs and almost none contains: what would have to be true for this section to be wrong, and what you would watch in the first ninety days to find out.