UNIT 2 PLANNING A FOOD SERVICE UNIT

Structure
2.1 Introduction
2.2 The Management Process
2.3 Planning: What is it?
2.3.1 Steps in Planning
2.3.2 Types of Plan
2.4 Preparing a Planning Guide or Prospectus
2.5 Registration of the Unit
2.5.1 Application for a Licence
2.5.2 Rules Regarding Grading of Hotels and Restaurants
2.6 Systems Approach in Food Service
2.7 Let Us Sum Up
2.8 Glossary
2.9 Answers to Check Your Progress Exercises

2.1 INTRODUCTION
In the previous unit, we learnt what a food service unit is, and reviewed the different
types of food service units operating in our neighbourhood. We also realized that to
run the unit successfully you have to adopt various management processes. This unit
will focus on management, the processes involved in management and its significance.
The other aspect covered in this unit is the process of planning - the types and the
steps involved - how to prepare a planning guide or prospectus and how to register
a food service unit. Finally the concept of system approach and how the concept is
operated in a food service unit is described.
Objectives
After studying this unit, you will be able to:
discuss the process of management and how it affects the planning of a food
service unit,
enumerate the steps in planning of food service unit,
formulate budgets to establish food service unit,
describe the requirements for obtaining a licence to run a food service
establishment, and
discuss the concept of systems approach and how it is applied in a food service unit.

2.2 THE MANAGEMENT PROCESS

Management is identified as a body of systematized knowledge, based on general
principles, which are verifiable in business practices. If management is a profession,
then the key problem is to decide what a manager does. Strong answers by saying
that a manager plans, organizes, delegates, motivates, directs and controls. These
are some of the aspects of his work as you may also recall studying earlier in
Unit 1. He adds foresight, order, purpose, integration of effort and effectiveness to
the contribution of others. Therefore, we can say that management is a process of
planning, organizing, delegating, leading and controlling the efforts of the
organization members and by using all other organizational resources to achieve the
. stated organizational goal. Gullick has suggested POSDCORB an acronym for
management created from the names of seven functions, which include planning,
organizing, staffing, directing, coordinating, reporting and budgeting.
Entrepreneurship and Food You may recall studying about these functions in the last unit. Lei us briefly define
Service Management these here as well, before we move further.
Planning: The planning function according to Gullick is the basic function of
management on which others are dependent. It is on this premise that an organization
is able to clearly determine its objective and policies and fornlulate a plan of action
to delegate its employers and for smooth functioning of the organization. Planning
can be short term and long term. Day-to-day planning of activities can be referred
to as short-term planning. Another important concept of planning is forecasting.
Forecasting is an essential factor that allows future activities based on the goals and
objectives of present and past situations. We will learn about the planning function
in greater details later in section 2.3 in this unit. Now let us move on to the organizing
function. Thus, we can say that planning is the foundation for top management
provided the participants at each level execute their work effectively and sincerely.
Organizing: Through this proper structure of authority with which work is divided
and coordinated to meet the goals and objectives of the organization is achieved.
This function identifies various tasks of an individual organization and divides it into
positions, sub positions by clubbing workers of one particular skill and ability together
to bring about correct use of manpower and resources. Organizing serves as a link
between various other functions of management.
Stafiizg: This function involves employing and training of manpower and their
maintenance. The prime function of staffing is to hire skillful people that yield desired
results according to the need of an organization.
Directing: This function requires the skills and quick continuous process of decision-
making. This function essentially deals with delegating responsibility for distribution
of workloads along employees and in turn looking after their interesis.
Coordinating: This function helps in interlinking and interconnecting various types of
activities for its sn1c.o~l1iurilting as highlighted in r'igure 2.1. This process of
compartmentalization and specialization can only bring about effective functioning of
work, which is the part of coordinating.
PLANNING ORGANIZING DIRECTING CONTROLLING

Kitchen Space I I Performance I

service area
Equipment
Staff
ra~ll~ties
l2-,.:1:
Standards
Materials I
I Policy on
* profit Services

EVALUATING
Products
People
Resource use
Procedures
1 1

-
Customer's tastes
Environmental
forces, etc
Coordination
Figure 2.1: Importance of coordinating in performing the function of management
Reporting: This involves keeping various authorities of a department such as managers,
executive etc. informed about various tasks through reports, papers, and records.
Reporting acts zs a meao for smooth fiinctioning of an organization plan.
Budgeting: This is an iinpor~antpart of any food service unit. All activities are
planned keeping in mind the monetary resources available on hand. It also involves
fiscal planning as well accounting. It is also concerned with keeping the interests of
the employees and also at the same time the ability to direct and develop respc Tibilities.
Thus, management can be summed up as a process of planning. organizing, directing Planning A Fcwd Service
and controlling to accomplish the organizational goals though a coordicated use of Unit
human and material resources. It is the process by which human and non-human
resources are coordinated to accomplish the set objectives. Thus it is the efficient
utilization of resources. What are the resources that they manage? In general terms.
the six "M" - money, matrrial. nzan, machines, nzinutes and markets.
With this basic recapitulation of the management process, we move on to study the
first function of management i.e. planning. Our focus here will be on how to plan a
food service establishment.

2.3 PLANNING: WHAT IS IT?

Having gone through the discussion above, it must be evident that decision-malung
is an important function in any enterprise. A person who manages an enterprise is
called a manager. He has to take many decisions in running the unit. The function
of decision-making can be termed as Planning.
In all the management functions, the function of planning as described by Gullick
involves developing in broad outlines the activities required to accomplish the goals
of the organization in the most effective way. Planning is stated to be the prime
function from which all other functions evolve. It is a crucial part of management as
it involves assessing the pro and cons of any situation or condition and making
appropriate decisions. In this section we will learn what planning means. its significance
and the type of plans that are essential for any organization.
Let us begin our study on planning by considering an example. Suppose you have
decided to go for a picnic or a trip to a hill station, you will first sit down and consider
all activities that will facilitate you to complete this venture well. When you plan to
go for a picnic you will first think or decide about the place you would want to go,
think about the mode of transport, the activities you plan to do there, the food you
want to carry and what each member of the family will do to ensure that all thlngs
go well. This exercise is called Planning.
During the process of planning you realize, we ask certain questions such as: Wiiat
to do? Where to do? When to do? Who will do it? How to do it."
When we find answers to these questions we ilre planning our work to achieve our
goal. This kind of fact-finding helps us to foresee how things will turn out before they
actually happen. So it helps not only to see the end result but also gives scope to plan
alternative course of acrion if s8mc p!::,ns do not work out the way you anticipate.
The basic objective of planning is to think ahead, clearly determine
the objectives and policies and determine and select the course of action towards
the accomplishment of goals. We shall now look at the various steps involved in
planning next.

2.3.1 Steps in Planning

While planning, we first gather icformation about all the activities that have to be
undertaken, such as the money needed, the raw material that will be used. people
who will do the work, the place where the work will be done and the tools needed
to do it. This means we start looking at the resources we have and seek information
about it, and then chalk out a scheme to use them optimally to accomplish our goal.
In other words we gather information about the resources and assess both the
external and internal factors which will influcnce and affect the use of it. Seeking
information about our resources will enable us to take the right decision.
The next step is to use this information to chalk out all the activities that will enable
to accomplish our goals. Goals are targels that have to be achieved within a pre-
determined time. The goals nlust fairly reflect the accurate forecasting of ekents.
Goals are of many lunds, some short and lnng term. Short-term goals would be some
activity that has to be done and outcome realized in a ~ h o r tperiod of time. Certain
Entrepreneurship and Food other goals are termed long tern as they are tangible or accomplished after a long
Service Management time. For example if a caterer produces food and sells it each day it is a short goal,
and the prcfit he generates from this exercise can be termed as a long tenn goal.
It is here that you have to know the different types of plans that are evolved when
we plan. So let us get to know about the types of plan next.

2.3.2 Types of Plans

To understand the different types of plans let us trace the life experience of Ramu
who desires to be an entreprenuer. What do we mean by the term entreprenuer?
Unit 4 later in this course focuses on this aspect.
Ramu was a young man who was desirous of becoming an entrepreneur. This desire
of his life can be termed as Purpose that motivated him to think in the direction in
which he could become an entrepreneur. When he looked around at some of his
friends and neighbours, he found two of them successfully running catering units.
He realized that he too had the interest and aptitude to take up catering as vocation.
So he surveyed the market for the right opportunity and realized that there was scope
of producing and delivering packed food to office employees. To do this he then spelt
out his objectives.
Objectives were a set of formulated plans drawn up to achieve his goal of catering
to the specified target. In establishing his objective he spelt out who his target would
be, what kind of food he will make and delivel; where and how he would make
it, the type of facility and people needed to do it and at what price he would
sell his product. From this exercise it will be clear to you how when you spell out
the objectivzs it brings about clarity of thought processing which is the essence of
planning.
Ramu realized that to.run his enterprise he has to establish certain basic Rules, which
had to be abided by all. In any enterprise it is essential to formulate certain rules or
directive, which has to be adhered to by all to ensure that the work is coordinated
-T
towards attaining the goal. Some of the rules he enforced were of punctuality of
worker and delivery, ensuring hygiene and quality of product.
For the maintenance of standards that Ramu had established he had to spell out the
procedures for the activities that had to be taken. Procedures are step-by-step
instruction of activities to be undertaken. This gives a sense of direction, clarity of
work to be done and consistency in the work that is done. Some examples of
procedures he used were standardized recipes, instruction manual for use of the food
processor and use of purchase order.
When procedures are formulated it has to be devised considering the environment
in which it has to be executed. Some times there is more that one way of doing a
jhing, for example, if you have to purchase commodities it can be done from retail
market, whole sale market, or from the manufacturer or even get it delivered by a
dealer. In such a situation taking a decision becomes difficult. So if some guidelines
are prescribed to limit your choices then planning becomes much easier. This parameter
within which decision can be made is termed as Policy Guidelines. The policy
guidelines that Ramu adopted for purchase was to buy from fair price shops like
Mother Dairy vegetable shop and Kendriya Bhandar.
In the catering unit which Ramii established, he found that when a series of procedures
was put in a sequence, a Programme was devised. This is best illustrated in seeing
how his unit is operating. He had one procedure to purchase, another to store the
raw material, one or more procedures for cooking and then finally packing the food.
When all these were performed in the right sequence a programme of food production
was accomplished. So in any food service unit, programme such as these have to
be undertaken to realize the goal.
 Very often the procedures and programme planned for a unit is influenced by both Planning A Food Service
Unit
internal and external factors. These factors may alter the plan. Therefore, it becomes
necessary to plan alternate plans, which can be adopted to suit the situation. This
is termed as evolving a Strategy. A strategy may be needed when you do not get
the desired item and it calls for thinking of an alternative, a strategy for promotion
of products have to be thought of in your sales decline. Evolving alternate plans to
meet your goals is termed as developing strategy.
The final plan that you draw up which gives a bud's eye view of operation and
management of your resources is the formulation of the Budget. The budget is the
numerical expression of your plan. It is a plan that reflects the monetary value of
your resources and indicates your income as cent per cent and the expenditure as
fractions of it.
You would have by now realized how a simple plan like objective finally culminates
in the holistic plan called budget. Given in Figure 2.2 is a schematic reference of
types of plan.
PURPOSE
( Desire to do something)

OBJECTIVE
( Clarification of thought)

RULES
( Certain steps to be followed)

PROCEDURES
(Prescribed steps for action)

POLICIES
(A guideline for decision making)

PROGRAMMES
(A compilation of procedures)

STRATEGIES
(A course of action)

' I (
BUDGET
a numerical ex~ressionof ~ l a n s )
Figure 2.2: Schematic reference of types of plan
! So then the planning function of management is quite clear. Take a break here and
try to answer the check your progress exercise given next. This will help you assess
your understanding regarding the planning function.
- -- - - - -

r
I
Check Your Progress Exercise 1
1) Define management and list the functions of the acronym POSDCORB.
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2) What is planning? Give the significance of this function of management
process.
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Entrepreneuship and Food
Service Management 3) What are the different types of plan which evolve in the planning process?
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In the last section we learnt about the planning function and the types of plans. Next,
we shall review the aspects to be considered while preparing a planning guide.

2.4 PREPARING A PLANNING GUIDE OR PROSPECTUS

The first step in the planning process is to prepare a planning guide. Let us fust of
all define a planning guide or what we call a prospectus. A prospectus is a formal
summary of proposed work; in other words a written description detailing all
aspects of the situation under consideration. The prospectus becomes a good
communication tool, which spells out all the course of actions and making available
all information pertaining to the operations to other team workers.
In the context of planning a food service unit, a prospectus will be developed around
questions such as:
What type of food service is planned?
Who are the clientele?
What kind of menu to be offered?
How many will be served at a time?
The type of service
The time of service
How and where from will the raw materials be purchased?
What storage facilities will be needed?
What kind of equipment will be needed?
What kind of manpower will be needed to run the unit? Their number, qW1cations
and skills.
What kind of facility in terms of space and furnishing has to be provided?
What are the safety measures to be incorporated?
What are the cost limitation and projected income?
What energy sources are available?
The prospectus must be written clearly, concisely, yet in detail. Usually it has various
parts. The major divisions being:
A) Rationale
This preliminary section of the prospectus needs to be defined first. It includes the
project title, goal, objectives, policies and procedures. This has been discussed as
plans to be drawn out earlier in sub-section 2.3.2. Recollect, in our example earlier
how Ramu had drawn up these and formulate these.
B ) Physical and Operational Characteristics
Physical characteristic relate to the architectural or design features such as an
appropriate structural facility compatible with the type of food to be served. For
example, for Ramu to produce the Indian menu and pack it in the unit, he has to plan
. the space and equipment needed for it. Operational data refers to the activities
pertaining to the production of food and the menu is the key item of concern. Other
operational characteristics are the hours of service, volume of business and the
number of clientele who would dine in the unit. The customer profile is necessary
to plan the menu and the space. The employee profile is also to be considered to
determine the number, shift and facilities necessary for them. All these information Planning A Food Service
Unit
is necessary and need to be included in the prospectus.
C ) Regulatory Information
This is an essential component and deals with knowing all the regulatory information
pertaining to running the food service unit. Information about the license to operate,
insurance and information on food, labour laws, standards of sanitation and safety and
use of energy resources have to be ascertained. The person who writes the prospectus
and later helps to implement it should be a professional food service manager and
should have the knowledge and authority to make the decisions.
D) The Planning Team
It is necessary to include the experts in the field to draw up the prospectus so that
all aspects are thought off and included in the plan. Generally the owner or administrator
who has the authority to spend the money and give approval, the foodservice manager,
the architect, foodservice design consultant, equipment representative and any others
who can help with specific information are included in the planning team. The
prospectus should clearly spell out the planning team.

E ) Market Survey
The prospectus must mention the type of food service unit to be established. Let us
look at the experience of Ramu, who is currently running a canteen, and see how
he decided to open his food service unit.
How did Ramu decide to run a canteen? Ramu was a young graduate who wanted
to venture out in food business. So he first undertook a survey of the various food
service units in his neighbourhood, he observed its working and spoke to the managers
of the places to learn about its operation. He realized that in this field some technical
knowledge which can be acquired through academic pursuit and some working
experience is essential to run a unit. Having taken a course in catering management
and also having worked in a restaurant for a few years, he felt confident in starting
his business.
During his survey he found a dhaba, eateries attached to sweet meat shops, few
restaurants some offering all kinds of food and others specialize in certain cuisine, a
kiosk in the market place and in the theatre complex, a canteen in the school. He
also saw that a district center was coming up and many firms were shifting their
office to the premises. He realized that most of the units were running well and saw
no point in opening a similar one. But he saw scope in opening a canteen for the
office complex or establishing a catering unit to supply packed food to office workers.
This exercise where he surveyed the market to analyze the type of food service units
that exist and learn about their profire and operation, and also to discern the scope
for new venture is called a market survey. Thus market survey is an important
aspect of a project plan.
Next, aspect to be considered while planning a prospectus is the profile of the
clientele, their food choices and preferences.
F ) Identifying Clientele
Having decided the type of food service unit that is to be opened, it is now very
important to study the profile of the clientele, know their food choices and preferences
and design your food service to suit their need. How did Ramu get to do this? During
his survey he had visited canteens in both government offices and in office complexes
and observed its operations. He saw the type of people that work in the offices and
the kind of food they eat. He had also seen people who worked in offices but not
having a good eating place depending on road side vendors to buy snack items. In
his interview with a few people working in the offices he was able to gather information
about the type of food they would like to eat and buy. After gathering this information
he got a handbilVpromotional leaflet made which gave the profile about his catering 51
Entkpreneurship and Food institution and his ability to provide hot nutritious meals to office employees. In this
Service Management handbill he listed all the items that he can provide with its approximate cost. His
menu was depicted to be unique as it was similar to home food, hot and nutritious
as it included more of vegetables, fruit and curd. He priced the packed lunch at Rs
30. He distributed this handbill in the office complex. This served as a first point of
contact with his customer, generating in them an interest to try him as their source
of food supply.
Along with identifying the client, surveing their preferences is also an important
consideration. This aspect is highlighted next.
G ) Customer Preferences
Knowledge about customer preference is important while planning a food service
unit. Let us see how it can be done by looking at Ramu's example. After the
handbills were distributed, Ramu checked with the people in the offices as to who
were willing to patronize him for their meals and also got the tally of items they
would buy. He made a proforma of the items and requested his probable customers
to tick their preferences. With others he found their choice verbally. And thus was
able to enlist information about the customer's preference and choice.

Having gone through the discussion above you would have got a fairly good idea
about the components which form a planning guide. We surely can learn from
Ramu's experience.

Now that Ramu knew who his clientele would be and had'a fair idea about their food ,

preference he set about to formulate the plans for starting his food service business.
Let us review this next.

The first thing Ramu did was to list down the resource that would be essential in
running a food service unit. As you know now, Ramu has undertaken a business and
finds himself in the role of a manager; so what would be the resources that he would
have to plan. Let us say he has to Plan the 6 "M". What are the these? You may
recall studying earlier, that for any enterprise to be established or run some Money
is needed, this helps to buy the Material that has to be processed, who does the
processing - the Manpower and he will have to be facilitated by Machine. All this
has to be done with a time structure so the next resource to manage is Minutes and
all this is done to capture a good Market. So to start or run any enterprise we will
need money to buy all our resources and also plan the exact detail of our resources.
This process is called budgeting, which is explained next.

H) Budget
Planning our money to utilize it for procuring all other resources is an exercise known
as making the budget. It is also defined as a numerical expression of all your
expenditure. In making the budget we look at our proposed income and allot a certain
percentage of our income for each head of expenditure. First of all let us identify
the heads of expenditure. Let us do so by taking Ramu's example. To be able to
offer ready meals Ramu will have to buy raw food material which is termed as food
cost, he will have to hire people to do the work so incur labour cost, to run an
establishment he will have to pay for fuel, electricity, water, insurance etc, all these
are categorized as overhead expenditure. He will also have to set aside some money
for maintenance of his building and equipment and repayment of loans as percentage
of income allotted for maintenance cost. This whole exercise of running an
establishment is for the sole purpose of income generation, so he has to design for
profit and build in the profit in planning the expenditure. Ramu being a commercial
operator bill plan a budget, which will be as given herewith.
Ramu's Budget Planning A Food Service
Unit
Proposed Income is = 100%. ( Rs 1,75,000) Rs 35 per meal from 200 customers for
25 days in a month).
This will be allotted as;
Foodcost : 50%
Labour : 15%
Overhead : 10%
Maintenance : 5%
Profit : 20%
Using the budget breakup presented above, Ramu will run his enterprise once he
starts his operation. But before that he has also to plan a budget to start his enterprise.
This needs identification of all the resources and costing of it, to know the capital
investment needed and also the recurring expenditures.

Let us first look to see where he proposes to run his enterprise. Initially when he
started contemplating to start the business he spoke to some of his friends and one
of them suggested that a premise where a hosiery factory was running had to shut
down (as it was situated near a residential colony) and was now available for rent
or sale. So he negotiated with the owner and was able to lease the premises for five
years (a good enough time to try his hand also). So now the building was available
to him on a monthly rent of Rs 10,000. The building had to be redesigned to provide
the necessary work place and equipment. He met an architect and found the
approximate cost of remodeling the unit. Ramu now had to decide the equipment that
would be necessary to make his unit operational. During his survey he had observed
and made a note of the different types of equipment used in food service units. He
made a list of them in light of the menu that he was to produce and the delivery
system he was planning to adopt. He went to the dealers and found the prices of all
these and estimated the cost of these equipment. Then he also calculated the cost
of the wiring and electrical installation and other utility cost. This estimated cost
(Rs 1,25,000) was labeled as capital investment.

He then had to calculate the cost of raw material to be purchased, the labour cost
in terms of wages and benefits and the overhead expenditure as rent and utilities
incurred in a month when he undertook production and sales. These are termed as
recurring expenditure. The total money needed by Ramu to start his unit can be
summarized as :
INVESTMENT TO START AN UNIT
ITEM COST (Rs)
Cost of remodeling the premises
and purchase of equipment I, 25,000 (Capital investment)
Recurring expenditure
Food cost for producing a meal @ Rs 15.75 (50% of Rs 35)
for 200 persons for 25 days in a month 87,500
Salary for 5 persons for 1 months 25,000 (15% approx.)
Overhead as rent and utilities pm 17,500 (10%)
Maintenance pm 8,750 (5%)
Profit 35,000 (20%)
Total recurring expenditure 1,38,750 (total of recurring
excluding profit)

Ramu realized that the anticipated income of Rs 1,75,000 (i.e. Rs 35 per person
from 200 customers in a month (25 working days) will be slow in coming to cover
Entrepreneurship Pad Food all the expenditure, so he planned the finances needed for 3 months of operation
Service Management which amounted to 541,250 lakh rupees (1,25,000 + 1,38,750 x 3 ) to start this
venture.

So the next question is how he found the finance. Usually when a person starts a
venture he invests some personal money in the business. Ramu's family supported
him with one lakh rupees given from personal savings and loan from his father. Now
this was not enough so he took the advice of one of his friends in the bank who
mentioned that loans can be obtained from banks for specific purpose. He also
visited the office of small scale industries to find out the scope of them financing him.
He was advised to make a project report showing his anticipated income and
expenditure and his modus operandi of repayment of loan and submit the proposal
to a national bank, which had a scheme for self-employment for youth. He developed
a project proposal seeking a loan of 4.5 lakhs and indicated repayment of loan in a
period of 4-5 years by repaying Rs 10,000 per month as part of profit generated. He
mortgaged his father's house to the bank as security for the lease of loan and he
was thus able to start his venture. This is only one way of planning the finances;
there are other source of finance and financial institutions.

So then having gone through the discussion above, it is clear that budget forms an
important part of a planning guide. Arranging the finances and planning the expenditure
in advance is crucial for setting up a food service establishment. One another aspect
which is crucial for Ramu is to register the unit and obtain a licence for running the
same. This is discussed in section 2.5. Before we move on to the licence section,
let us recapitulate what we have learnt so far. Answer the questions given in the
check your progress exercise 2.

Check Your Progress Exercise 2

1) Explain briefly the steps you Gould bear in mind before planning a food
service unit.
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2) What is a rationale? Why is it important for a food service unit?
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3) How important is a market survey for an individual to start a food
service unit.
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 Planning A Food Senice
4) Briefly discuss the following: Unit

a) Budget
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b) Identifying clientele
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2.5 REGISTRATION OF THE UNIT

According to the PFA Act, 1954, no person is allowed to manufacture, sell,
stock, distribute or exhibit for sale any food article without a valid licence. The
purpose of this act or policy is to protect the public's health, to prevent the
spread of disease, and to promote good health through education, prevention and
inspections. Any person who owns, operates or maintains a food service establishment
in violation of this act or does not have a valid current registration issued, by the local
health authority will be subject to enforcement actions including monetary fines.

In this section we shall therefore learn how to apply for a licence to run a food
service unit.

2.5.1 Application for a Licence

Before starting any food business, the food service operator should apply for
a licence in the prescribed form, as given in Figure 2.3, to the licencing authority
and pay a fee for the licence. This licence is issued by the local health authority
after necessary inspection of the premises. Following aspects are considered:

1) Whether the premises conform to the municipal corporation norms. If

the structure is an authorized one, a permanent licence may be issued.
If the building or structure is unauthorized, a temporary licence is issued for
11 months.
2) Sanitation of the site
a) Whether surroundings are clean and free from any pollutants.
b) Drainage facilities and waste disposal facilities available potable water supply.
C) Ventilation and lighting in the kitchen.
d) A bin for temporary disposal of garbage.
Entrepreneurship and Food
Service Management *
Municipal Corporation
Food Licencing Section
Application/Renewal
Form No ..................
Price Rs.1.00
Sales lbx 0.10
Total 1.10
Form A
(Application to Rule No.5)
(An application for manufacturing eatables for selling, stocking, distributing on
a commercial basis under the PFA act 1955 Rule No. 50).
To,
The Food Licencing Authority
1. I (Full name of Licencee) ..........................................................
Age (years ) ..........................FemaleMale ...................................
Address:
2) Address of business place ............................................................
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3) Type of business and name of establishment ....................................
..........................................................................................
(preparation/storage/sale/distribution)
4) Is the building an aathorized construction or any other .....................
.........................................................................................
5) Total area of business premises ......................................................
.........................................................................................
6) What is the annual rate of turnover ..................................................
...........................................................................................
7) In my absence Mr./Ms ................................................................
Complete Address: .............................................................
Age .......................................M E will look after this work.
8) Do the business premises belong to you (if not, attach letter from owner
giving permission to start business ................................................
..........................................................................................
9) As per the PFA Act '(Maharashtra Amendment Act, 1962), the licence fee
of Rs .............................. is being paid.
10. Names. ................................................................................
Address and .........................................................................
Age of partners if any ..............................................................
I hereby certify that I am fully aware of the rules and regulations of the
Prevention of Food Adulteration Act 1954 and the information given in the
above form for obtaining a licence in the corporation limits, to the best of my
knowledge, is true and correct.
Date: Signature
Figure 2.3: Format for obtaining a licence
Following documents are to be attached along with the application form. PIaanhrg A F d Service
Unit
A copy of completion certificate of building.
If place is rented, receipt of rent paidowners permission to start business.
Proof of ownership of building.
For handcart business: two photographs and copy of licencelpermission from
anti-encroachment division.
For medical stores: permission from Joint Commission Food and Drug
Administration.
If construction is unauthorized an agreement on Rs.10 stamp paper.
Photocopy of partnership deed if business is in partnership.
No objection certification from corporation.
Once the licence is issued, it should be renewed every two years. A licence once
issued may be suspended or cancelled if the licence holder does not comply with the
regulatory requirements and if the food service operation constitutes a major health
hazard. The conditions for issue of licence are enlisted herewith.

Conditions for Licence

1) The premises should be free from sanitary defects.
2) No employee should suffer from contagious or infectious diseases.
3) The manufacturers should maintain a record of food articles received, sold or
dispatched.
4) A notice holder in English or Hindi should clearly state the kind of products being
sold.
5) Hawkers should wear a metallic badge with licence number, name and nature
of article for sale.
6) A licence holder shall manufacture or sell pure products only. If any substance
is mixed, it should be mentioned on the label.
7) Shopkeepers and proprietor of hotels and restaurants selling sweet or savory
snacks should clearly mention the coking media (ghee, edible oil, hydrogenated
vegetable fat or any other fat) used in preparing sweetmeats and savories. This
information should be clearly displayed on a notice board in the premises.
8) Food should not be served or covered with printed paper, waste paper or
newspaper.
9) An application for renewal of licence should be made at least 30 days before
expiry of existing licence.
10) Food articles which are not meant for human consumption should not be stored
or sold on the same premises as edible food items.
11) No person shall manufacture, store or sell any article or food in any premises
not effectively separated from any toilet, urinal, drain or garbage dump.
The food inspector is responsible for the issue of the licence. What is the role and
responsibility of the food inspector? We shall get to know next.
Food Inspector
The food inspectors are appointed by the government and report to the local health
authority, i.e. the medical officer health who appoints them. Let us have a look at
their powers and duties.
1 EnmpmneurshiP and Rwd
ServiceMnagement
Powers of Food Inspectors
Given herewith are the powers of food inspectors. These are to:

1) collect samples of any food article and send it to the laboratory for analysis,
2) inspect any food premises, and
3) prohibit the sale of any article of food in the interest of the public, having taken
prior permission from the authorities.
What are the duties of the food inspector? These are enlisted herewith.
Duties of Food Inspectors
Following are the duties of food inspectors. Food inspectors must be able to:
1) inspect licenced establishments and check that conditions of licence are being
observed,
2) collect and send suspected food samples for analysis,
3) investigate complaints,
4) stop any vehicle carrying food or detain imported food packages which may
contain prohibited items of food, and
5) record all inspections and submit a report to medical officer of health.
Besides the activities mentioned above, each food inspector should collect and send
at least ten food samples per month for analysis to the laboratory. If the result is
unfavourable, the food service establishment owner is liable for punishment and the
punishment includes imprisonment for a term of six months to three years and a fine
of not less than rupees one thousand. All cases of food poisoning should be reported
to the nearest authority, i.e. the municipal corporation or the police. Suspected food
samples are sent to the'public health laboratory for analysis. If food samples are
not available, then a sample of vomit or a rectal swab may be sent for analysis.

Besides the collection of food samples, the food inspector also is responsible for
checking the medical records of the employees.

All workers who handle food and surfaces should be medically examined in corporation
hospitals every six months. The establishment should maintain a record of six monthly
medical reports for each employee and submit the same to the food inspector, when
asked for.

After having inspected the food premises, the inspector is expected to submit an
inspection report. What is the report? Let us read and find out.

Food Inspection Report

Food inspectors should make surprise visits to catering establishments and check
whether the following points are being followed according to the standards laid down
in the Municipal Health Laws:
1) quality of food used,
2) portability of water and ice and its storage,
3) food handling practices,
4) food storage, preparation and holding area; temperature control,
5) dishwashing and st&age area,
6) drains and sinks and sewage disposal,
7) flooring, ceiling, walls and their maintenance; ventilation and lighting,
8) personal hygiene of food handlers and servers,
9) protective clothing,
10) dining rooms and service disposal, Planning A Food Service
Unit
11) various storage areas (separate for different activities),
12) presence of pests and precautions taken,
13) staffroom for employees, adequ~te
'-
sanitary accommodation for employees and
customers, and
14) utensils, equipment maintenance and installation.
The food inspector should maintain a record of all inspections made and action taken,
and submit the record to the medical officer of health. If it is observed that conditions
mentioned in the licence are not being followed, the local health authority serves a
notice to the establishment demanding that the lapses should be rectified within a
stipulated period and check whether corrections have been made.

Apart from issuing licence, the local health authority holds exhibitions for food handlers
with the help of the public health laboratory, to educate members of the industry.
They alsb help food handlers to avoid misleading the public by false or misleading
labeling and advertising. They check water supply and pollution and report such cases
also.

So in our discussion so far we have studied how to apply for a licence and the
aspects which are considered by the local authorities and the food inspector for
issuing the licence.

Next, we shall focus on the rules regarding grading of food service establishments,
particularly the hotels and the restaurants.

2.5.2 Rules Regarding Grading of Hotels and Restaurants

Grading of hotels and restaurants is based on the points scored by the respective food
service establishment with respect to the pararneterslrules specified in the schedules
given in Box 2.1. Grading is done totally on the basis of 100 points as depicted
herewith. Out of 100 points, 75 points are given for matters specified in Schedule C.
The remaining 20 points are for aspects specified in Schedule A and 5 points for
facilities as per Schedule B.
Points
Schedule A 20
Schedule B 05
Schedule C 75
Total 100

If the licencee does not observe the rules and conditions specified in the licence, he
or she shall be refused licence. If the licencee observes the rules and conditions as
per schedule A, B, C, he or she may be given points and graded accordingly as
shown in the grading matrix herewith. If the licencee does not observe special and
important rules, he or she may be given minus points, as observance of these rules
are legally binding on the licencee.

Grading

Points Grading

35-50 C

51-80 B

81-100 A
E n t r e p r e w aod Food If any hoteUrestaurant does not qualify for any of the above grades then the concerned
Service Management liencee is liable for prosecution, or the concerned licence may be suspended or
cancelled or the concerned hotel shall be permanently graded C.
I
Box 2.1: Grading Schedules
Schedule A: Grading chart for maintaining general cleanliness at hotels
and eating places:
S.No. Points
1) A place providing for cleaning with detergent or soap and disinfecting
and air drying of cooking vessels, cups, saucers, etc. 3
2) A place providing for washing with soap and water and disinfecting
of hands and feet of employees. 3
3) Physical cleanliness (daily baths, care of hair and nails, clean uniform,
etc.) of employees. 3
4) An independent rest-room for employees and a locker arrangement for
their clothes, etc. 3
5) An arrangement to keep off flies from the place of storage of food stuff
and the kitchen. 3
6) Cleaning with disinfectant of floor and walls (up to height of 1.8 m (6 feet))
1
7) A separate place for service of eatables and regular cleaning of tables. 1
8) A place with a location to transfer garbage from the area of activity, at
least thrice a day. 1
9) A wash place with soap and clean towels for customers. 1
10) Hygienic cleaning of trays used for service of eatables. 1
Schedule B: Grading chart for maintaining a ,special arrangement to
augment natural light and ventilation:
1) Arrangement to maintain a reasonable temperature or artificial
ventilation. 2
2) A coat of oil paint on all walls at the work place. 1
3) Chimney or an exhaust to reduce suffocation due to smoke where coal or
coke is used. Where coal is not used as a fuel, one additional point each
for 1 and 2 be granted. 2
Schedule C: General Rules:
S.No. Points
1) The licence must be displayed at an early visible location. 1
2) Eatables and beverages must be prepared at a completely separate
location. 3
3) A wash place of necessary measurement must be built at the work place
and be connected with a municipal water supply with a meter; drainage from
the wash place must be appropriately connected to the municipal drainage
system. 2
4) The floors must be tiled or impervious to disallow seepage; this floor
must be washed once a day. 10
5) Vessels, cups and saucers, glass and other equipment must be
thoroughly clean before and after use. 10
 PhmhgAFedSeniEe
6) Employees clothing must be kept clean, people suffering from contagious or Unit
skin diseases must not be employed; employees must be provided with
towels and soaps; they must not serve or handle items on sale without
cleaning their hands. 10

7) Garbage must be colleted in containers coated with tar, inside and outside;
such garbage must be emptied at least twice a day at a municipal garbage
bin and cleaned. 2
8) Walls and ceilings must be white washed twice a year (i.e. first week of
April and October); if walls are oil painted or varnished, they must be
cleaned suitably. 10

9) Eatables must be stored in glass cases that keep flies and dust away; eatables
must be prepared only in the kitchen. 10
10) Drinking water must be stored in a clean vessel which is placed at least
39 cm above the floor and should have tight fitting lids with a tap. 10
11) The licenced premises must not in any way be connected with a lavatory or
open drainage; the licenced premises must not be used as boarding. 5
12) General cleanliness must be maintained. 2

The grading should be done every two to three years as specified in the municipal
health laws.

With this we end our study regarding registration and grading of food service
institutions. Next, we shall learn about the systems approach in food service.

2.6 SYSTEMS APPROACH IN FOOD SERVICE

Food service units are establishments or organizations that need to adopt good
management techniques to meet their objectives effectively and efficiently. Basically
there are three types of approaches. These include:-
* Classical or traditional
Human relations
Systems approach
In the classical style the premise is on division of work, which will be executed by
a specialized person. It has a formal structure where responsibility and authority is
defined; having unitary command and a span of control and coordination of the work
is the responsibility of the manager. In this style the emphasis is placed more on the
accomplishment of tasks and goals. It becomes mechanical and does not recognize
the interaction of groups.

Human relation theory was evolved to compensate the deficiency in the classical
approach. Here the emphasis is given more on social systems and human behaviour
and it recognizes the existence of informal groups in which workers align themselves.
This is reflected in organization that has employee participation in decision-making
which yields positive effects in terms of morale and productivity.

In the modem world, the emphasis has to be placed equally on both the task and
people and a new approach has been evolved integrating the advantage of both the
classical and human relation theory with a concept of systems. What is the systems
approach? Let us find out.
Entrepreneurship and Food Systems Approach: What Is It?
Service Management
Basically, a System can be stated to be a set of inter dependent parts that work
together to achieve a common goal. Coleman states it more concisely "A system is
a set of interrelated parts with a purpose". The interrelated parts are known as
subsystems, each dependent on the other for achieving the goal. Each subsystem
contributes to the whole and receives something from the whole while working to
achieve the common goals. The management's role here is seen as a systemic
endeavour that recognizes the needs of all parts and decision is made in the light of
the overall effect on the organization as a whole and its objectives. This type of
leadership is called systems approach.
The word system has five fundamental implications that should be understood and
accepted. They are:-
* A system must be designed to accomplish an objective.
Each element (subsystem) of the system should have a specific work and
character.
Interrelationship must exist among the subsystem, and they should be synergistic
in nature.
The basic ingredients of process i.e. the flow of information, energy and material
are more vital than the basic element of the system.
Organization objectives are more important than objectives of the elements.
Organizations perceived as systems are made up of a variety of subsystems. The
most common subsystems found in most of the organizations are:
Operational subsystem - the activities and people who perform the primary
functions
Management subsystem - all people and all activities that plan, control and
take decisions
Information systems - the collection of people, machines, ideas and activities
, that gather and process data to provide formal information.
All these subsystems operate within an environment both internal and external of the
organization and with supporting resources such as money, material, time, equipment
utilities,facilities and personnel. These together with the information are the inputs
into the system. The work that is performed is known as operations, transforms the
raw material to the finished products or services. These afe the outputs. The
outputs provide the information on how the operation has worked or failed or how
it should be changed or modified. This information is known as feedback and
provides the management with data as base for decision making.

Interrekztionship and Interdependency are key concepts in system theory. Generally

a change in one part of an organization affects other parts of that organization. So
any change that is to be taken has to be done in light of its effect or repercussion
to other departments. System theory contains the doctrine that the output of the
whole of the structure is more that the sum of its parts. This is called wholism. The
cooperative, synergistic working of the sub systems often yields a total product that
exceeds the sum of individual contribution.

This concept can be made clear though this schematic presentation given in Figure
2.4 and understood better with an illustration using a food service unit.
 Planning A Food Service
Unit

Finished
I
Information
I
Inputs ----, Operatiom outputs -. -+ goods
Services
4 4 4 Ideas

Figure 2.4: Interrelationship and interdependency in systems theory

1
i Let us now see this concept in operation in a food service unit. A food service unit
I is an organization. In modern term to be successful it should adopt a Systems
I
Approach. How does a food service unit qualifjl as a system? Let us look and
match the fundamental principles of systems approach to a food service unit. Every
food service unit has a specific objective, that is, to use some raw material and other
resources such as energy, people and utilities to transform into finished good and
services. To do so the unit should have many subunits like purchase department,
I store, preparation unit, production and service centers which function independently
but in a sequence and is interrelated and interdependent on each other. For example,
the purchase department must buy the material for the production unit to process it.
The food that comes into the unit has to be received, then stored, issued, produced
and served. A pattern that is sequential and interrelated.

When each unit is given some freedom to function independently the work gets done
faster, but all decision has to be taken in consonance with other departments, for
example if the purchase department decides to buy pineapple in bulk it has to see if
appropriate storage space is available and that there are suitable recipes to utilize
them. When there is free flow of information and ideas through record keeping and
feedback the information can be utilized to generate more patronage and profit. Any
unit that subscribes to these principles is said to be practicing a systems approach.

We hope the discussion presented above should have given you a good insight into
what is systems approach and the concept in operation in a food service unit. With
this we end our study of this unit.

Now attempt the questions given in the check your progress exercise 3 and recapitulate
what you have learnt so far.

Check Your Progress Exercise 3

1) What do you understand by systemic approach? Briefly explain.
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
Entrepreneurship and Food
Servieenhmgment 2) List any five conditions which a food service unit should fulfil to get a
licence.
................................................................................................................
................................................................................................................
................................................................................................................
3) How are food service units graded?
................................................................................................................
................................................................................................................
................................................................................................................

2.7 LET US SUM UP

This unit focused on how to plan a food service unit. We learnt that to run the unit
successfully we have to adopt various management processes. The types and the
steps involved in the planning process were also described with a focus on how to
prepare a planning guide or prospectus. Finally the concept of system 'approach and
how the concept is operated in a food service unit was explained in this unit.

2.8 GLOSSARY
Budget : the numerical expression of a plan.
Planning : set of objectives one decides upon to achieve goal.
Purpose : the desire to carry out a plan.
Procedures : are step-by-step instructions of activities to be undertaken.
Policy guidelines : the realm or the perimeter within which decision can be
made.
Objective : set of formulated plans drawn to achieve a goal.
Rules : set directives an organization must adhere to in order to
ensure that work is coordinated towards attaining the
goal.
Rationale : the preliminary section of the prospectus needs to be
defined first. It includes the project title, goal, objectives,
policies and procedures.
Strategy : alternate plans thought out to implement a given goal.

2.9 ANSWERS TO CHECK YOUR PROGRESS

EXERCISES
Check Your Progress Exercise 1

1) Management according to Allen is a complex of administration of personal skills.

Another definition by Drucker states that it is management that enables the
organization to contribute a needed result to society. The functions of
POSDClORB include - Planning, organizing, staffing, directing, coordinating,
reporting and budgeting.
 2 ) The human relation< School of Management is a social process because Planning A Food Service
Unit
Inanagement actions are concerned with relations between the people. However,
according to the Decision-making School of Management is a decision making
body, a rule making and enforcing body. Hence the difference lies in the basic
fact of management as a social process and a enforcing body.

3) a ) Division of work is based on the concept of specialization of skills and the

amount of work done by an individual. In other terms it is assigning of
quantum of work to every employee of the food service unit.

b) Hierarchy is the chain of command drawn between the staff at the different
levels in the organization. It is the sequential and chronological arrangement
of ranks of different employees based on experience, remuneration and
amount of work done, as well as, skill of the individual.

c ) Di.3cipline can be defined as mean maintenance of punctuality. adherence to

1.11lesand regulations, obedience, courtesy and loyalty towards an organization.
This is absolutely essential for smooth functioning of an organization.
Check Your Progress Exercise 2

1) Before setting up a Food Service Unit an individual should gather information

about all activities required to he undertaken, raw materials to be used, people
to be employed, setting-up place of the organization and most importantly chart-
out the budget to start such an idea.

2) A Rationale can be defined as a preliminary section of the prospectus which is

defined first. It includes the pro-ject title, goal. objectives. policies and procedures.
It is important for planning the budget as it gives an overview of the goals and
policies of the organization.

3 ) A Market survey is an essential activity that gives you a idea as to what

prevailing trends are. What are the needs and wants of the people and how to
go about organizing and planning them. Market survey is like a preliminary
research carried out to have prior knowledge of all basic information needed to
begin an organization.
4) a) A Budget is aptly called the numerical expression of plans. The budget is
a document t h a ~de\crihes the monetary resources on-hand and that can be
utilized for pcrli)r~ningvarious tasks in a food service organization.
I
b) Identifying clitmt:.le is pan of all food service organization. Here an individual
I
like in a smvey can plan and focus the type of clients the food service unit
would like to cater to: For example, a food kiosk in a cinema hall can cater
I to all groups of people especially targeting the youth, by selling attractive
fancy foods.

Check Your Progress Exercise 3

1) Systems approach can be defined to be a set of inter dependent parts that work
together to achieve a common goal. These are also referred to as a set of
interrelated parts with a purpose. The interrelated parts are subsystem
each contributing to the goal. This type of approach is referred to as System
Approach.

2) Refer to sub-section 2.5.1. Any 5 of the following:

- authorized construction/premises.
- free from sanitary defects.
- contagious or infectious diseases should not be present in the employees.
 - food items suitable for human consumption should only be sold & stored in
the premise.
- cooking medium should be clearly indicated.
- no food article should be stored near a toilet, urinal, drain or garbage dump.
3) Grading of food service units is on the basis of the parameters or rules specified
by concerned authorities. Refer to sub-section 2.5.2 for details and list the
parameters on your own.