Catering Industry in America
Franchising is becoming a popular way for investors to own businesses in many countries around the world. Due to the recent economic depression, the rates of unemployment has increased. Similarly, there are worries that the possibility of getting permanent employment is decreasing. In response, a significant number of investors are directing their capital to catering franchises attracted by low initial costs as well as less severe restrictions and higher autonomy of the owners. Besides, the owners are not required to have higher education levels and special trainings. As a result, catering industry in the United States is marking an increased number franchises as a primary management system.
The annual revenues of the companies in the catering industry amount to approximately 5 billion dollars. However, the industry is very fragmented with the top 50 companies constituting less than 15 percent of industry revenue. Despite the fact that many hotels and restaurants cater events, they are not recognized as the element of the discussed industry (“Industry Profile: Catering Industries”). The competitive landscape in the catering industry is very specific too. On the one hand, large companies have the advantages to offer a vast range of services including facilities management and guest rooms renting. On the other hand, small companies compete by serving a smaller consumer base and providing personalized services (“Industry Profile: Catering Industries”).
Despite the wide array of catering services, the industry sometime faces critical situations. First, there are economic slowdowns that may significantly reduce the number and the size of catered events. During these periods, many corporations limit their spending on the events to special occasions only. Second, most of these companies provide services and compete directly with independent caterers (“Industry Profile: Catering Industries”). In this case, many restaurants and contractors have the resources and staffs performing off-site catering functions thus being able to leverage their activities efficiently. However, the issues relating to food safety and contamination as well as food allergies pose significant challenges on the businesses forcing them to respond to a special request and prepare the food with accordance to restrictive diets. In order to address these challenges, the catering industries in the United States are exploring possible opportunities, namely expanding cuisines, going green, turning food into retail products, and expanding into managing events (“Industry Profile: Catering Industries”). These are expanding cuisines, going green, turning food into retail products, and expanding into managing events.
Unique Catering & Management Services Ltd is one of notable companies in the catering industry. Although it is based in the UK, it reflects the realities of the operation of the companies that deal with food provision in the United States. First, the increasing number of population and economic growth is beneficial because more consumers can get products from these companies (“Unique Catering & Management Services”). Similarly, economic growth implies that the income levels are rising too, making it even easier for people to visit foods joints. On the contrary, the increasing costs of work force have a negative effect on food companies. For example, the employees are fighting for wage increment, which in turn influences the profit margins. Besides, there is a major threat posed on food companies related to the failure to follow stringent food regulations. Furthermore, the changing preferences and tastes of the consumers often appear to be a significant threat too (“Unique Catering & Management Services”). In fact, if the company fails to respond to latest trends and menus quickly, it may lose a significant number of customers.
There are common characteristics that catering industries with franchises share since franchise serves as a management system that aims at establishing a central operation system and delegate responsibilities to each department (Hsu). In addition, there is a corporate identity system present in chain stores, which primarily deals with the way companies present themselves thus defining the perception of the chain stores. At the same time, it also ensures that consumers are engaged in generating new ideas thus making it easier to attract more customers and franchisees. In addition, all financial aspects as well as personnel, product, and data reporting are managed in a competitive manner (Hsu). Notably, catering industries that have franchised successfully can undergo consultation with instructors that have different responsibilities. For instance, there is a supervisor who assists chain stores in developing strategies for competitions, inspecting store management, promoting the policies of the franchisor, and building the relationships with the franchisees. Furthermore, chain stores in catering industries are managed through contract planning (Hsu). Since contract planning determines the relationship between the franchisees, the terms should be clear for understanding, legal, and suitable for long-term planning.
It should be mentioned that there are several sources of competitive advantages for franchisees in the catering industry. They include low costs, unique line of production, a large scale of economies, complete personnel, and human resource system (Hsu). Other sources that enhance the success of franchisees are the presence of complete logistic system, popular and favorable image as well as high-quality, standardized products. However, for a chain store to be lucrative in the catering industry, several conditions should be developed to facilitate effective management (Hsu). These conditions include complete and powerful franchisor with good training of personnel, sensitive to information regarding delivery of products and services, and good financial systems. Additionally, due to the fact that franchising is becoming a well-known trend in the American catering industry, there is a need to run business activities on specific grounds, that is correct understanding, forming an organizational culture and styles, developing unique sales, and creating awareness and favorable images (Hsu).
Since catering services involves providing the consumers with food products, food safety is a critical issue in this industry. Specifically, there are concerns about the potential outbreaks of food-borne illnesses and contamination (Ghezzi & Ayoun). These concerns increase with the appearance of the events that require transportation of food to off-site locations. Normally, foodstuffs should be kept at proper temperatures, but when en route to the serving locations, changes in temperatures can increase the risk of contamination. Although there are managers who are responsible for hygiene supervision, it is imperative that all those involved in food handling adhere to respective regulations (Ghezzi & Ayoun). Maintaining food hygiene is important, and if personnel have the wrong perceptions on food hygiene, it can lead to significant losses.
On a further note, the failure to follow food regulations is caused by high rates of turnover, expenses of training part-time employees, and stressful nature of the catering environment. Therefore, as food safety continues to be an issue, business owners in the discussed industry should strive to maintain a healthy environment (Ghezzi & Ayoun). They should ensure that all catering personnel, especially in off-site locations, maintain proper hygiene when cleaning the site, setting the buffet, and serving the food to guests. In addition, other routines such as hand washing is crucial because poor hand hygiene has been identified as the major factor resulting in food borne diseases (Ghezzi & Ayoun). Improper food-handling practices also lead to severe contamination, especially in relation to raw products. If food handlers or equipment carry pathogens, poor hand hygiene will increase the chances of transmitting these pathogens to customers (Ghezzi & Ayoun).
Food safety should be maintained through critical procedures of hand washing, cleaning equipment, utensils, preventing cross-contamination. It is also important to ensure that food is prepared thoroughly. However, food safety in the catering industry cannot be maintained without the active participation of caterers and other staffs. There are concerns that some employees do not adhere to hygienic practices even when they are aware of safety regulations in the food industry. Therefore, managers in this industry should conduct routine training to ensure that protocols for food safety are improved and are adhered to in order to avoid the cases of food-related issues.