Freshlunch Services

This case was co-authored with Vaggelis Giannikas at University of Bath, School of Management. It for educational purposes and is not intended to illustrate good or bad management practice.

“Carlos, are you ready to head out then?” Antônia called across the office. “Too right! After the morning I’ve had, I could do with the break!” Carlos laughed, as he grabbed his wallet and sunglasses. As the two headed towards the lift (elevator), they entered into a deep conversation. “So, what do you fancy Antônia?” after a short pause to think, Antônia responded, “Well, we could go to Byōōdē – their red curry is definitively one of the best around and the Pad Thai’s pretty good too. Or Pollo Picante? I had the chicken with chimichurri sauce the other day and it was really good.” As the lift descended from the 32nd floor of their building, the conversation continued. “If we’re looking for something hot Antônia, I guess we could also try the new Indian thali place? Rebecca went there last week and said it was excellent, though she did mention it was pretty slow service. Besides, it’s such a nice day, maybe we could have something cold instead? There’s the sushi at Kazoku – it’s so fresh and there’s loads of choice.” Antônia thought for moment, “Well I’m absolutely fine not having anything hot, but I’m not in the mood for Sushi today to be honest.” There were just so many options she reflected, “How’s about FreshLunch instead?” Carlos smiled as they walked out into bright May sunshine, “Sounds like a good plan to me!”

A few blocks away, Sofia had already been serving customers at FreshLunch for an hour and, as usual, things were picking up quickly towards the lunchtime rush. She was a chemist by training and had spent the first six years after her graduation working for a large multinational in a research laboratory based in Norway. But her passion was food and fresh produce. Having completed a part-time executive MBA, Sofia had changed her career direction dramatically and set up as a restaurant owner. Knowing how demand busy customers were, Sofia had established FreshLunch utilising the techniques she learnt from her studies in an attempt to manage her operation effectively. FreshLunch had taken the traditional cafeteria-style approach often found in universities and large hotels, and developed a process that offered quality, variety, and speed. The process was simple, involving five sequential steps from order placement to delivery (See exhibit 1). Having collected any items from the fridge (drinks and sweet treats), the customer first had to choose the base for their meal, a selection between rice and couscous. Next, they would choose their main protein, including chicken, lamb, steak, salmon and grilled vegetables. Then, two sides were selected to accompany the main meal, from a choice of around ten different plates full of vegetables and salads. Finally, dressings and sauces were available before the customer moved to payment at the end of the process. For each step, the customer moved along with their tray which was passed from one “assembler” to the next until it was put in a bag and handed to the customer by the cashier.

Exhibit 1: FreshLunch process

Since its opening, FreshLunch was always very busy around lunch time with long queues created at the counter, some of which extended outside the restaurant itself. Sofia was happy that her hard work over the past three years was paying off. However, she was beginning to appreciate that these long queues were not translating into the profits needed to create a sustainable business. Sofia tried to think again about how some of the things she had learnt during her MBA programme might help her tackle the situation. But whilst she had applied so much to the business and made plenty of improvements, she increasingly felt like she was too close to the problems to see them clearly. “What I need,” she reflected, “is a fresh pair of eyes.” That evening, scrolling through her social media, Sofia noticed that her friend Zuri, had just posted an interesting piece on the challenges of demand forecasting during ‘X-factor’ events. “Now why didn’t I think of her before?!” she thought. After their time together on the MBA programme, Zuri’s small consulting business, that helped its customers analyse and improve their operations, had grown substantially, so she was clearly doing something right. Sofia dialled her number and after a few rings, Zuri answered, “Sofia! Long time, no chat! How are you and how’s things in the restaurant business?!”

Fifteen minutes later, their conversation turned from generally catching up to FreshLunch. “I find it really hard to predict what my customers are going to choose every day and I often end up having to throw away quite a lot of food. I tried cooking fewer portions but then had a lot of annoyed customers and I can’t risk bad reviews!” Zuri already had a few ideas in mind but decided to ask a few more questions to understand the business better, “What about the customers? Do you know if they are happy with what they get?”, she said. “I love how busy we are” replied Sofia, “but some customers have already started posting negative reviews due to the long waits. To be fair, it’s normally only 20 minutes but since most people only have an hour for lunch, I completely understand where they’re coming from”. Zuri quickly did a search for FreshLunch and began scrolling through some of the most recent customer reviews (See exhibit 2).

4 days ago
I love this place. The food is perfect and simple, and the staff are on it. I try to go about 11.45 so I don’t get stuck in the long queues.

1 week ago
Pretty good food and reasonable price. Wish they had a bigger selection of mains and sides as I go regularly and am getting a bit bored with the same stuff.

1 week ago
The food is great and I love the roasted cauliflower salad. A bit inconsistent on the steaks and lamb – seems like they get cooked differently every time I order them.

2 weeks ago
Never again! We waited for ages and when we were finally served, they didn’t have any chicken and half of the side options weren’t available either. Loads of other better options nearby!

3 weeks ago
What a great little find. I had the salmon with baby spinach and a beetroot and feta salad. My colleague had chicken with some lentils and a Greek salad. We both really liked everything. Fast becoming one of our go-to places. Shame they don’t serve breakfast, as we’re often in work for 6am.

1 month ago
Best place for fresh salads in the area. The slow service isn’t ideal, but the food’s worth waiting for.

As Zuri read, Sofia continued, “Unfortunately, the huge rent is kind of killing me to be honest. You can imagine how expensive it is to rent even a small place in the centre of London. It’s also hard to find good cooks and waiters as FreshLunch can only offer them contracts for 50-80% of their time.” Zuri leaned back on her chair, “OK Sofia, let me have a think about this over the weekend and I’ll get back to you with my thoughts. It’s been great catching up.” As she took a sip of her drink, she thought about how this could be a good exercise for the new associates in her company.

On Monday morning, it was Zuri’s time to pick up the phone and call her friend. “Sofia, I’d really like to help you with this. We’ve įust hired a small group of young associates and I’d be happy to assign them to work with you. From my perspective, it would give me a chance to see these guys in action and get a feel of how they work as a team, before I set them off on the paid įobs. And for you, it’d be some free consulting – feels like a win-win, right?! I can give them a little bit of supervision, but not much as its basically pro bono (without charge).” Sofia was delighted, “Wow Zuri, that would be fantastic! And I’m happy to give them a bit of advice on any client interaction issues that come up during this.” Zuri knew that could prove extremely helpful. Sofia had always been excellent at giving constructive feedback, “Good thinking – that would be brilliant. To get this started, can you please send me over some information about FreshLunch? I will ask my associates to get in touch with a data spec first thing tomorrow”.

Over the rest of the week, Sofia collected the information that Zuri’s team had requested for the project. She started with some basic information such as opening times (11.00- 15.30) and the daily menu (See exhibit 3).

Exhibit 3: FreshLunch daily menu

• Note: Some sides changed periodically based on seasonality and popularity

She also spent some time putting together information that could be used to analyse the demand patterns for FreshLunch. Luckily, she had recently installed a software package that allowed her to collect and analyse Point of Sale (POS) data. Now Sofia felt she was actually beginning to make some use of it. She remembered one of her professors talking about organisations ‘drowning in data’ and was starting to appreciate what she meant! To keep it simple, she began with what felt to her like a typical day and broke it down into 30-minute time slots (See exhibit 4). She included information on how many customers typically visited, but also the number of actual meals prepared, as some customers would order more than one meal. In addition, Sofia was asked by the associates to provide some information about daily sales of meals over recent weeks (See exhibit 5).

Exhibit 4: FreshLunch demand across a ‘typical’ day

Time slot Meals Customers (measured in number of receipts)
11.00 – 11.30 10 10
11.30 – 12.00 20 19
12.00 – 12.30 38 30
12.30 – 13.00 89 68
13.00 – 13.30 154 121
13.30 – 14.00 92 66
14.00 – 14.30 24 22
14.30 – 15.00 12 11
15.00 – 15.30 4 4

Exhibit 5: FreshLunch meals sold over three-week period

Day Med. chicken Chinese chicken Flank steak Persian lamb Thai salmon Grilled veg. TOTAL
Monday 139 44 28 83 105 155 554
Tuesday 83 33 34 66 57 57 330
Wednesday 102 53 44 89 75 80 443
Thursday 80 30 33 64 60 63 330
Friday 133 55 83 139 100 46 556
Monday 134 62 29 84 95 157 561
Tuesday 84 40 30 67 48 63 332
Wednesday 121 36 44 89 76 81 447
Thursday 85 34 34 68 57 60 338
Friday 129 62 84 138 101 45 559
Monday 141 56 30 85 96 158 566
Tuesday 88 39 34 68 51 61 341
Wednesday 104 55 44 90 77 81 451
Thursday 78 36 34 70 61 61 340
Friday 136 56 87 136 102 47 564
6,712

In Zuri’s firm, Bankole Consulting, the associates were looking forward to working on the project. For the group, it was a chance to get stuck into the world of consulting and prove that they were ready to step-up to the firms paying clients. It was also an opportunity to repay some of that faith that Zuri shown them when making her hires. After an initial meeting with Zuri, they started analysing the information that Sofia had sent over. They also decided to pay a visit to FreshLunch to get some first-hand experience of the operation.
With the approval of Sofia, they behaved as normal customers, queuing for food, ordering,

and then eating at the bench by the window. During their visit, they drew the layout of the main floor of the restaurant (See exhibit 6) as this could be useful for their discussions with Zuri. They also looked at the basement area – used for storing ingredients, crockery and utensils – and an area on the upper floor, which functioned as a break room and office space for the shift manager.

Exhibit 6: FreshLunch restaurant layout

During their visit, the team collected data on the size of the queues – something not currently captured by Sofia. There were two parts of the queue: The assembly queue was formed between the point a customer started giving their order and the point of payment at the cashier. This was always moving relatively quickly as the employees were used to receiving orders and serving the customers efficiently. The second, and more concerning, part of the queue was the one formed by people waiting to place their order. The team noted the size of the queue at 15-minute intervals over a 3-hour period (See exhibit 7).

Most of the people in the queue spent their time talking to each other, checking their phones, or looking at the printed menus to decide what to order. Zuri’s associates also noticed that some people left the queue (nine in total during the three busiest periods) and others decided not to join the queue (around 4-5 in the 15-minute intervals when the queue exceeded 10 customers). Finally, the associates talked to Sofia and her employees to gain further insights into FreshLunch (See exhibit 8).

Exhibit 7: Queue size during associates visit to FreshLunch

Time 11.30 11.45 12.00 12.15 12.30 12.45 13.00 13.15 13.30 13.45 14.00 14.15 14.30
Queue 0 0 1 3 6 11 15 21 18 8 3 2 0

QUESTIONS

1. What do you think are the key issues faced by FreshLunch and what are the underlying reasons for these issues?
2. What advice would you give Sofia and how would you prioritise potential improvements?