The Rise and Benefits of Central Production Units Across Multi-Site Restaurant Chains

Traditionally the corporate catering industry has run successfully by utilising a hub and spoke model, relying on Central Production Units (CPU). This model helps businesses achieve higher margins and success over the long term in several ways. Firstly having a central production hub where the bulk of food is produced and then delivered out to different locations, allows for consistency of product and high-quality control between locations. Secondly, it allows teams to be centralised, this reduces headcount across the business and concentrates and streamlines expensive talent into a single location without compromising on quality. Finally, the centralising of purchasing reduces over-ordering, food waste and logistical costs.

It is time for restaurants to join the party.

Multi-site restaurant chains are beginning to take advantage of CPUs. One excellent example in the UK market is Tortilla. Tortilla built its first CPU at 12 locations, they achieved incredible product consistency and growth through a large central production kitchen for all the sauces and slow-cooked meats with ‘just in time’ items like guacamole made fresh on-site daily.

MD, Andy Naylor and I recently discussed the benefits Tortilla achieved by using a CPU starting with a lowering of CAPEX at each location. It “allows us to simplify the kitchen setup in our restaurants” with “less equipment needed to prepare the food” This “helps lower the CAPEX to justify the business case”.

The second key benefit Andy highlighted was how CPUs have “been a key enable to franchising” allowing them to “de-risk food quality which is normally one of the biggest franchise risks” leading to consistent products and more control when working with multiple franchises.

Initially, the CPU mindset requires some adjustment. This space, running independently from your restaurants, will not be selling directly to clients. Unlike brick-and-mortar locations, which pay for themselves, a CPU works in a different way. It's all about the long-term gains it can deliver to a multi-site restaurant group and short-term it can be a capital investment.

Generally, the benefits of a CPU can be seen at three plus locations; these gains increase with the number of branches. We have all had an experience of visiting a restaurant we love and then visiting a second branch where it’s not quite the same. CPUs are the answer to consistency in products at a reduced cost. Ivo Poklepovic, the Co-Founder of the restaurant chain Al Dente, opened their CPU at four locations, “The primary advantages of having a CPU centres around the standardisation of our food. With the implementation of a CPU, we've been able to ensure consistent, high-quality products are served across all our sites”. Before the launch of Al Dente’s CPU, each branch acted independently, handling its own food preparation and ordering, which led to consistency issues and difficulties in accurately tracking food costs. The CPU “has led to a significant reduction in food wastage and the standardisation of recipes”.

Cost savings derived from CPUs form part of a restaurant’s long-term vision. Ivo comments on how “cost savings become more evident as the CPU reaches its full capacity. The concept revolves around the idea that we can expand our restaurant branches while maintaining the same number of staff members in the CPU, thus reducing the need for a large kitchen staff in each branch.” Therefore it’s evident that the gains at four locations are tied to product quality and ordering, with long-term wins in cost saving on head-count.

Lam He, the founder of Bun House restaurant, has a different use case for her CPU. Lam’s, cult following, from her two incredibly popular locations in Chinatown, has pushed them to launch a production kitchen with Karma Kitchen, a turn-key option, to keep up with the high demand without having to take on the CAPEX of building their own kitchen or the cost of taking another central London location at higher rents. Lam found that “there was no way they could have a proper production unit in any of their restaurants given their central locations, high rents and restriction on planning” A separate CPU made their operations “more efficient and organised”. Bun House has also benefited from having the production unit out of central London, making it easier with deliveries, logistics and transferring of products.

The QSR and restaurant sector is operating in a tough climate with tight margins and high costs combined with expensive debt that makes growth expensive. Today more than ever before restaurants are looking at smart ways to save money and spend in the area that makes their brand resilient, consistent and scalable. By streamlining and concentrating operations, headcount, procurement and equipment whilst reducing waste, growth becomes achievable in smaller locations or creates more room for covers, in central locations. Having one core team working centrally supported by on-the-ground chefs, guarantees product consistency across sites, and focuses on expanding the business as a whole cohesively, versus ten locations running very independently

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