The Restaurant Industry is home to different types of business. You can categorize every establishment according to the type of service, such as full service and limited service restaurants, menu style, and even pricing.
Market conditions today may present a challenge to you. Almost every business is trying to develop safer, more efficient, and healthier ways to interact with customers. You may want to consider a limited-service concept if you are remodeling or building your new restaurant.
A proven workflow has enabled this concept to survive the adverse effects of the ongoing pandemic. When sales fell during the outbreak, restaurants of this type only reported a nine percent decline, compared to the thirty percent reported by restaurants of the full-service type.
The purpose of this article is to explain how this business model creates opportunities for you as a business owner. Both the advantages and disadvantages of running this concept will be discussed. To build a solid understanding of a more casual restaurant, read along.
Limited Service Concept For Restaurants
You have to keep in mind that this concept carries subcategories. You have plenty of options on what type of subcategory would you like to incorporate in your restaurant. The difference mainly will fall on the flow of each service.
The main service flow of this type of restaurant is that the customers will have to pay first at a counter and then the service will be delivered right away. Others are trying to adopt a more modern style, such as the use of kiosks for their ordering process.
Up to this point, you may already have an idea or two on what this business model is about. Let’s dig deeper to know more.
What is a restaurant with limited service?
Just as it’s called, it is a concept where service to consumers is maintained at the minimum. It is commonly known as LSRs in the industry. The interaction between your servers and your customers ends when the food is already served to them, which often happens at the counter.
No table service is provided to your customers. Your staff is trained with the most common workflow: customers enter the establishment, choose from your menu, pay, and pick up their meal. It’s like a drive-thru experience, except that your customers can choose a seat inside the premises.
Self-service is the name of the game with this concept. Diners are responsible for finding their seats, getting their own set of cutlery, refilling their drinks, cleaning up their tables, and even packing their leftovers.
Some of the most popular food businesses fall under this type of services such as fast food, fast-casual, quick service, cafes, and even some pizza places.
What are the key features of this concept?
To give you a better understanding, here are the defining factors of this type of business model. It’s important to remember that other subcategories may differ from one another, but these are the most general characteristics that can indicate that your service is limited.
Customers should find their seats by themselves.
Restaurants are known to have a fast-paced environment, well it’s doubled under this concept. You’re not under obligation to require your staff to guide your customers to find their seats. Guests entering your establishment already have an understanding that they have to do it on their own.
Reservation and assigned seating services are not available for your customers. Rather, they have to find their table right after they complete their order transaction.
Customers should have to wait in line to place their orders.
Unlike in full-service restaurants, customers are required to queue in line before they place their order. Whether you’re already using kiosks or just the traditional meet-at-the-counter process, there’s still a possibility of line build-up, especially if it’s your peak hours.
Following the workflow, counter to payment to food service to the table. Customers will be flocking into your counter first to finish their entire ordering process. Another reason is that customers usually think about what to order right after approaching the counter.
If the line is taking too long already, you may require one of your staff to take orders in advance (while on the line). This way, your staff at the counters and cashiers can process their orders faster.
Customers should pay first.
Before they receive the menu items that they’ve ordered, your guests should settle the payment first. It is helpful to have a customer-facing display POS to show diners the real-time update about their order.
Deploying a POS system with a customer-facing display helps reduce errors in the order-taking process. This helps facilitate the order process more quickly, thus, creating a faster ordering experience for your customers.
It also helps you establish trust between your brand and your customers. The payment process is one of the most critical touchpoints in the service industry, so you must ensure that it is secure even if you have to speed up the process.
Customers should order all food items at the same time.
Unless they want to queue in line again, your customers should place all their orders the very time they’ve approached the counter. Keep in mind that service in this type of restaurant is limited, thus there’s a small chance that staff will be entertaining an additional table-side order.
Consumers should be able to self-serve.
If you’re adopting this business concept, you have to provide a safe and adequate space where your customers can practice self-service. While limited service is not the same as no service at all, the interaction between your staff and guests is still greatly reduced.
Staff is not required to provide anything to your customers aside from the food item they’ve ordered, and their change (if they have some). Your guests are the ones responsible for almost their entire dining experience. They get their utensils, condiments, and beverage refills.
Take out is the priority.
Especially now, most of the restaurants under the umbrella of this service emphasize their take-out and curbside pick-up services. The minimal interaction is constantly evolving and adapting to every trend and market situation. This is how establishments survived and even thrived, during the pandemic.
Disposable and to-go packaging are the best tools for this service. Even with the ones who have a seating option, there will be no need for staff to clean up and pick up silverware.
Customers should bus their tables.
This is why disposable utensils are mostly utilized under this concept. Customers are expected to clean up on their own after they dine. You should provide trash bins, disposable trays, and cutleries to make it easier for your guests.
If you opt to lessen your carbon footprint and adopt a more eco-friendly solution, reusable tools will be perfect for you. But you should provide clear directions to your guests to sort your cups, silverware, trays, and dishes to their assigned bussing stations.
Full-service restaurant vs Limited-service restaurant
There’s a great difference between these two types of restaurants. Aside from service, they also differ in terms of interior design, meal preparation, and staff training process.
In general terms, restaurants that offer full-service have longer menus. They provide a more intimate ambiance and make sure that the service will complement the mood of the establishment.
The staff is trained to provide the best customer service to complete the best dining experience for their guests. Starting from the moment they walked inside the premises, they were promised the utmost attention and service from the staff.
The staff will take care of every touchpoint as much as possible. They will see to it that every need and demand from the customers will be met, even before they asked for it. Unlike LSRs where they expect customers to be responsible for their experience.
And although some full-service establishments offer takeaway and delivery options, there’s one service a limited-service can’t offer – reservation. Guests have the liberty to book a table in advance or simply walk in for the sake of spontaneity.
Primary Types of LSRs
It is not surprising to see this branch of the foodservice industry expanding. This is one of the most fruitful businesses to manage as it promises a great return on investment over time. But what exactly are the types of restaurants that offer limited service?
Fast Casual Restaurants
This is a newborn concept retracted from the fundamentals of LSRs. While its service is the same, consumers perceive this as an establishment that offers healthier types of food items.
Service may be quite different as staff may bring your order to you, at your table. Everything is higher a notch, the utensils, trays, interior, and beverages are almost different from an LSR. But technically, it’s just a classier and fancier fast-food, but still doesn’t meet the requirements of full-service businesses.
Fast Food Restaurants
This is the most common type under this category. These restaurants offer customers a small yet flexible menu where most of the food items come from the same base ingredient. For instance, the salads, pasta, and sandwich dishes use the same chicken (just different parts).
Through this, you can outsource or mass-produce the ingredients to produce more food faster.
And while you can adopt some methods to make it appear fancier to others, your interior is not your priority. Your focus is how you will facilitate the entire ordering and dining process in a faster way. Getting people into and out of the building as quickly as possible is your goal.
Technology That Should Be Present In A LSR
Since the contact between your staff and customers is limited, you must ensure that every customer touchpoint is smooth and hassle-free. This is where technology appears to be beneficial for your business.
Here are the technologies and solutions that you should deploy to ensure that you have the proper support for the working environment and culture you have built.
POS / EPOS System
A point-of-sale system will act as the core of your entire operations. Keep in mind that starting from the beginning until the end of the interaction between your staff and guests will just happen to the counter. You must ensure that at this moment, you can secure customer satisfaction right away.
Utilizing this type of tool helps you facilitate the payment process in an instant. It also allows you to send out the order ticket right away just with a few pushes of the screen. And if you’re using a bit more advanced version, inventory management and sales reports will also not be a problem for you.
Payment Processing Software
While the above-mentioned tool offers a basic process of payment, incorporating this type of software allows you to accept different types of payment methods. Google Pay, Apple Pay, credit card, debit card, mobile wallets, you name it!
Online Ordering Service
If you’re not using a mobile or web-based app, or even a website for your restaurant business, then you’re missing a whole new market out there. You must have a secured, updated, and easy-to-use platform that enables your customers to place their orders online.
Modern diners have grown fond of ordering online, ever since the outbreak and the lockdowns, online ordering and food delivery are the most popular means to order food safely. This is also a great way to manage food deliveries, instead of accepting orders through telephone.
Kitchen Display System
Incorporating this type of software with your operations is a great way to connect your front-of-the-house team and back-of-the-house team. Meal preparation and delivery will be easier if counters can simply send the order tickets digitally and have them displayed in the kitchen,
It also helps you produce an organized system without requiring our staff to yell orders at the back. Imagine the chaos and shock to customers who are in line and will suddenly hear your staff yelling their orders.
Online and Digital Menu Board
Let’s make it clear, online menus are the ones that can be seen online. It can be on your website or app. While digital menu boards are the physical menus that your customers see inside your physical store.
Using a digital menu board is easier as you can update it should there be sudden changes in the menu. This feature applies to your online menu as well. Unlike with a traditional menu, changes can look messy if you push to implement them.
Traditional menu boards are not flexible as well. Applying changes to it can be confusing and leads to a lower customer satisfaction level.
Self-ordering kiosks can be optional. If you’re just trying the market for this one, you can place two or three inside of your establishment. Then there will still be counters to entertain customers that are afraid of using the said machines.
Using this type of tool can be quite intimidating for customers. They don’t see that it’s just like when they are placing their orders online, but they’re doing it physically. If you want to use this for your business, make sure that you’ll create a friendly user interface.
Another optional yet highly recommended tool for your LSR. Especially if you have a drive-thru service, this creates an illusion of a walk-in experience and allows your customers to check their orders before they finalize the transaction.
This creates a better experience as it provides your customers comfort and confidence towards your brand.
Identifying the difficulties in LSRs
Just like every business venture, this also carries some disadvantages at the table. While it can be different for most businesses, here are the most common problems you will face if you’re operating this type of restaurant.
Less customer engagement
You have limited ways to engage and build relationships with your customers. Even with the presence of loyalty programs, it is hard for customers to connect with your brand since they can’t associate you with anything other than your food item.
This is why you must maximize every customer touchpoint that your staff will share with your customers. Give them something to remember aside from your fish and chips, which is offered in other food establishments as well.
Large competitive pool
Since it’s a concept that’s known to produce a high table turnover rate and requires lower upfront costs, the competition is more aggressive than you think. Just think about the number of McDonald’s and other types of fast food available in a single country.
Lower average check size
Its competitive nature restricts you from growing your profit margin. You have to offer competitive and reasonable prices to stay relevant in the competition. Also, upselling is not a priority in this kind of setup, (and is also hard to implement).
Limited (to zero) alcohol sales
There are strict regulations when it comes to preparing and serving liquors to your customers. And for limited-service types, obtaining a license for it is not easy. Make sure you coordinate with your local authorities before bringing alcohol into your menu.
Identifying the opportunities in LSRs
Looking to the other and brighter side, as mentioned above, it positions your business to an advantageous position in the market as well.
Easy way to generate customers
A fast, affordable, tasty, and convenient way to get their food, what more your customers could ask for? There is nothing more attractive to modern diners, especially if you combined all of it in a single establishment.
An additional source of revenue through deliveries
This is the main reason why limited-service establishments appealed to the restaurant market during the pandemic outbreak. They provide an easy and safe way to get their food into the comfort of their home, and most of their food items are delivery-friendly.
Minimal cost for labor
Lesser customer interaction, lesser staff needed. The self-service practice also prevents you from hiring seasonal food runners and busboys. And if you’ll opt to use tools such as self-serving kiosks, the cost will be even lower.
Reduced food costs
Again, as mentioned above, restaurants adopting this type of service can use one set of ingredients for different food items. They utilize frozen ingredients as it is much cheaper compared to the fresh ones. Due to their strong focus on affordability and convenience, they can easily pull it off.