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Much depends on lunch Add to ...

What saves a restaurant from losing money at lunch is a tricky thing called menu engineering. A simple example is soup. Canoe's mushroom soup is exemplary, but better than that, its food cost is close to 25%. "Soup is a no-brainer," says Walsh. Items like soup, and the romaine salads that are whipped up by a chef de partie named Amanda at the garde manger (the cold station where "apps"-appetizers-and sandwiches are made), help offset the costs of items featuring caribou or steak (or even pasta, when it's the ravioli that Canoe offers, hand-rolled by an Italian mama named Tina). Food costs for these items climb closer to 40%, and even higher. Getting proportions right is key. The Silverware software that waiters use to punch in each order tells management how many salmon dishes are selling versus the famous lobster clubhouse. With a food cost of 45.4%, that sandwich is almost too popular for Canoe's own good.

VERTICAL: OCTOBER, 2004 The first thing Gary and Joe had to do was find out whether the opportunity to take over Boland's Tasting Rooms was for real. Because Gary was still working at Reds, he couldn't be seen to be openly manoeuvring to launch his own place, so they had a go-between, a downtown guy familiar with both parties, make the initial contact. It turned out Boland was at the 81/2-year mark on a 10-year lease and needed to get out while he still had some negotiating power. With time left, he could find someone willing to buy him out of the lease and take some of the chattels and assets off his hands. If he'd left it till the end, the landlord-initially it was Olympia & York-would have slapped a For Rent sign on his window, and Boland would have had to sell his assets cheap.

Once they knew the opportunity was real, Gary and Joe set to raising their capital. That wasn't so hard-as it happens, the idea of owning a piece of a restaurant appeals to a lot of players in the financial district (see "I'll have a slice," page 40). Via "fractional ownership," they contribute chunks of cash for the right to be able to take their clients and buddies out for dinner and say, "Whaddaya think of my restaurant?" For Gary and Joe, the advantage of fractional ownership was that none of their investors would hold too much of the business; nobody would have them by the throat.

CANOE: 10:45 a.m. The servers finish the staff meal they're given every morning, then tend to their pre-lunch duties, broken down according to colour-coded section (e.g., copper's server polishes the coffee thermoses; blue wipes down the fountain). Each server is responsible for his or her own table maintenance-polishing each piece of cutlery and crystal, and setting the big S of each Spiegelau wine glass to face the tip of the place setting's knife. The chairs that face the banquettes are lined up by three waiters with a very long string. Server assistants fold 30 linen napkins to create orifices for the sliced walnut bread. Everyone knows to look for burned-out light bulbs, a management pet peeve. "It's second nature to everybody now," says Claude, a 40-year-old waiter from Montreal. "If I go to a restaurant and see a burnt light bulb in the chandelier it's like, Okay, there's something missing here."

In the kitchen, Nathan, the saucier, sears off the pork tenderloins he's going to need for the early crush, as well as the salmon fillets, beef strip loins and even the tart-sized scallops. Almost everything is cooked rare and stored on a rack. At the same time, as a tray of poached gulf shrimps floats by on the hand of a prep cook, Anthony Walsh counsels the happy pasta cook, Sassi, about his bolognese special. Walsh prides himself on his teaching ability, and he wants the pasta strands loose, bathed in sauce. He twirls his fork in the dish to demonstrate. "You understand me, Sas?" "Yes, boss!" Counting servers, assistants, cooks, hosts, bar staff and managers, there are as many as 35 people on duty during a lunch at Canoe, to serve 110 covers (the restaurant term for a complete meal) in the dining room, with more staff added to serve the up to 64 guests in the private dining rooms the restaurant rents for a minimum of $800 per room (a major profit centre). Oliver Bonacini is management-heavy for a restaurant company-there are nine managers at Canoe, not counting four chefs-with a minimum of two on the floor at any one time to handle crises, open wine as needed or brisk-walk to the cellar down the hall. But it's such a tricky labour-cost dance that Cliff Snell has designed a spreadsheet program to help managers anticipate their staffing needs, based on bookings as well as historical precedent. Once it's fully functional, they'll be able to fine-tune their schedules to hit their labour-cost percentages in advance. And they'll take advantage of this tool, the OB group knows, because the quarterly bonuses for Canoe's managers are tied to how closely they hew to their budgeted costs. It used to be that managers lost points only if they exceeded their budget, but now they also lose if they come under. OB's executives saw everyone coming in under budget, and started to worry they were gouging.

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