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3500 seats, more than 400 knuckles of pork a day, gallons of beer and an annual turnover of more than 50 million euros. For 400 years, the Hofbräuhaus in Munich has been a supreme gastronomic institution. The owner of this money maker with a total of 13 franchise outlets is actually the Free State of Bavaria. In an exclusive interview, managing director Michael Möller explains how to run a company as a state-owned enterprise, how to bring tourists and locals together at the same table and why they don’t need dishwashers in the restaurant.
For more than 20 years at the helm of the Munich Hofbräuhaus.
What has changed during this time?
Michael Möller: When I started back then, my main goal was of course to continue running the brewery successfully. Things had already become a little harder back then. On the one hand, beer consumption in Germany has been declining since the 1980s and on the other there was a growing number of breweries. This meant that there were more and more players on an increasingly smaller market. This was really a major challenge. Nevertheless, we have succeeded in doubling our sales in the last 20 years. At the same time, we were never volume-oriented. Much more important to us than volume is the return, in other words to deliver what the owner expects, namely a profit.
You have already mentioned the owner. In contrast to almost all other catering and brewery businesses, the Hofbräuhaus is not run by a private company, but rather by the Free State of Bavaria. How do you run such a company?
Möller: Just like any private brewery or restaurant. The only difference is that we are not a separate legal entity. We are the Free State of Bavaria. Everything we do goes straight into the Bavarian budget. With regard to this budget, a budget law that is not built for the private sector, we have certain special rights that are very much based on stock corporation law. That’s also how we work. We have a legal system, and are audited. Like any other company, we have to publish our profits and of course pay taxes. The owner is the state. This means that advertising should remain above the belt and that the responsible consumption of alcohol is particularly important to us.
But it is not only the Hofbräuhaus business form that is without equal.
Hardly any other restaurant at one of the most popular tourist locations in Munich has managed to establish itself as a place to be for tourists and locals alike. How was this feat accomplished
Möller: We offer the locals here a home which isn’t just down in the Schwemme on the ground floor, but also in the Braustüberl and the adjoining rooms, which are very modern. They are well furnished inside – like the Bavarian economy – but the technology is state-of-the-art and offers everything you need for various events, whether for private parties or company events. We also have over 120 Stammtische for regulars. I don’t know of any other restaurant that has as many Stammtische as we do. And these regulars come a lot. There’s no “Wait to be seated” in the Schwemme, you just go in and see where there’s room. And our regular guests have no qualms about accepting guests who do not speak German or Bavarian. That is why there is so much mingling that goes on between our regular guests and tourists. All our guests cherish this and it’s what has made the Hofbräuhaus so famous.
The Hofbräuhaus am Platz’l has been an institution in Munich for over 400 years.
What is the difference between beverage and food sales?
Möller: We have a total of 3500 seats on three levels. There’s a limit, though. In total we can take reservations for 2,500 seats, not including the beer garden. This is because fire protection regulations have become much stricter over the years. But really, we only try to be completely booked out twice a year: on New Year’s Eve and Carneval.
Today we generate 55 percent of our turnover with beer and 45 percent with food. This meant that we constantly had to expand the kitchen. However, we quickly reached the limits of our space, so we are now outsourcing many of the additional services we need for the kitchen. The preparation, making dumplings, seasoning, washing lettuce – all this is done outside of Munich. Our trucks are constantly driving back and forth. The same applies to dish washing. We collect all the dishes and drive to the outskirts of the city, where they are washed and then come back here because we simply don’t have the space in the Hofbräuhaus.
However, this has the advantage that we can use completely different machines that are much more environmentally friendly. This difference was noticeable right away, and so now we can focus on what we are really there for, namely cooking, eating and beer.
The Hofbräu is now not only at am Platz’l in Munich, but in a total of 13 locations worldwide.
How does the franchise work with such a one-of-a-kind concept?
Möller: This is not a recent idea. The first franchise was actually opened on Broadway in New York in 1903. That made a lot of headlines back then and our books show that quite a lot of beer was transported there. But I don’t want to know what it tasted like back then, because it had spent four weeks in a wooden barrel before it was served. You can’t keep the quality that long in a wooden barrel. But it still worked. The Hofbräuhaus in New York was then wiped out by Prohibition. What good is a Hofbräuhaus without beer?
It was not until the 1990s that the topic came up again, and especially in the US many people wanted to open a Hofbräuhaus. You have to realize that the Hofbräuhaus is not a small pub, not the village’s old innkeeper. This is an established company with an accordingly large number of employees and turnover. This can only be achieved with the right partner behind it who knows how to run a large business. We do not actively sell these licenses. Many people visit us and ask about it. A lengthy process begins here, where we check whether the conditions are right. After all, we have to write some things into the franchise contract where we state how things must be run and what is allowed. In the US, for example, franchisees would like to put dishes on the menu that are neither Bavarian nor American. Someone might come who wants nachos. This is not who we are, nor what we expect from ourselves.
We have to focus on what we do and we have to be outstanding. Of course you need French fries, ketchup and a burgers on the menu in the US, but no other ethnic food can be offered. It either has to be Bavarian or American. We require this and we check regularly. For this purpose we have a subsidiary in the USA, which regularly takes our chefs and master brewers on a tour of the facilities, does quality checks and holds training courses with the staff in the kitchen and dispensing technology areas. Because the expectations of our guests, no matter where they are, are always high..
How does product logistics work? Do you manage all routes from Germany or do you work with local partners?
Möller: In America, our subsidiary oversees both the franchise business and the import of our products, because the US is now our largest export country. It is located near Las Vegas and serves virtually the entire United States. When exporting beer to other countries, we cooperate with local partners.