Why Bother with Resident Meal Plans?


Residents Dining at TableI was recently speaking to the executive team of a community who objected to offering meal plans to their Residents. At first I thought perhaps they were onto something that other communities weren’t, but deeper investigation proved otherwise.

The Reasoning:

  • We don’t need a meal plan.
  • Our residents prefer to eat in their homes.
  • Meal plans are too much effort to manage / track.
  • People (Residents) don’t want to be locked into a plan they won’t use.

I asked “what is the Resident participation rate in your dining program?” (ie how many residents regularly dine with them now).  While the Executive Director and the Dining Director argued as to whether it was 15 or 25 percent, it became clear that with participation that low, it did not really matter who was right!  At that participation rate and likely cost per square foot, the space would be better off used as just about anything else.

The Challenges:

While the community was several years old, the restaurant was newly opened in 2014 to serve the resident population. Prior to that there was only a small café in the main building so residents were not used to having the dining room as an option.  Since opening to what should be a captive audience, the dining room is ¾ empty every night and has yet to open for breakfast or lunches on a regular basis. The restaurant is not yet even open 7 days a week! Regardless of what’s on the menu, this seems like a recipe for failure.

Do the (Business) Math:

For a restaurant to do well, it needs customers. Regular customers.  Most retirement communities are not open to the public and often even if they were, it’s a tough job marketing to the public to come dine at a retirement community unless you are the only game in town or your chef’s reputation is right up there with Jamie Oliver or Gordon Ramsay. Anyone who has renovated, opened or operates a dining operation knows what a large capital investment is needed and, moreover, how high operating costs can be once you are open.  Just to exist, you have fixed costs (utilities, taxes, maintenance contracts, licensing, etc) and even just the bare minimum variable costs (eg minimum labor, raw food, etc), all need to be offset with revenue otherwise your dining operation becomes a financial drain on the community.

The Meal Plan Financials:

Offering a meal plan not only helps to ensure a nice steady recurring revenue stream for the community that will cover your basic costs for running a dining services operation, it can offer a great value for residents both financially and socially.  Financially, your operation can deliver a high quality meal for a lower cost per meal than if the resident prepared it themselves in many cases, and with much greater convenience.  Socially, a meal plan “drags” residents out of their living units into a social environment on a daily basis which makes for a happier, healthier and more engaged community.

Create not just one, but several meal plan choices to suit the desires of your residents.  Make them flexible enough that residents can choose which meals to eat, when to eat and where (eg. use credits in dining room or café).  Dining Dollar plans give even more flexibility by allowing the resident to pay only for what they order rather than being forced to take a full meal credit even if they only eat lightly. Roll-over of a small amount of unused credits into the next month can help to overcome objections from residents concerned that they will not be able to use up all their credits in every month. Spousal plans allow couples to share meal plan credits often balancing out a big and small eater giving just the value they need.

Meal Plan Headache cure

The Administration of Meal Plans

Like anything you do for your resident population, meal plans require a system to support it.  No one enters accounting numbers by hand in a paper ledger book anymore so why are there still so man

y communities tracking meals with paper and pencil?  Your dining operation is an integral piece of your business that, in survey after survey, ranks in the top three influencing factors for prospective residents and only expected to rise in the ranks as the younger generations move into our communities. 

The Solution

CARDWATCH is a system that automates all your meal and charge plans for residents, employees, departments and even 3rd party customers (think catering).  Extra helpings of flexibility and choice in your plans are easily managed in the system with automatic renewals and export of charges to your resident billing or employee payroll software systems.

 

Give your residents what they want and reduce your administrative burden. A win for your residents, your staff and the community as a whole.

 


 

About the Author: Kevin McIntosh has more than a decade of experience in the Point of Sale and Privilege Management (meal & spending plans) market for senior living providers and has provided consulting services and developed innovations for customers to help shape what is possible today.