Intro To Hospitality Management - The Restaurant Business (Chapters 6&7)

Quick Service Restaurants (QSR) Defined

- One of the largest segments of today's popular-priced restaurant business - The Quick Service segment is a very unique segment for a variety of reasons. You have all been consumers of "fast food." Think about why you go to QSR restaurants! - QSRs have a very long history, they are among the most productive types of restaurant operations in the entire industry

Developing a Restaurant

- Operating Philosophy - Market (Customers) - Concepts - Location - Ambiance

Operating Philosophy

A restaurant philosophy is a set of beliefs and principles that a company strives to work toward. It's essentially the company's operational blueprint. It explains the restaurant's overall goals and its purpose. The philosophy also outlines the values that are important to the company. Once a restaurant creates a business philosophy it must articulate the philosophy to its employees

Steak Houses

A restaurant that specializes in serving steaks is called Steakhouse. Modern steakhouses can also offer other cuts of meat such as poultry, roast prime rib, veal, and seafood.

The Dining Market

- Includes sales that take place at the food service location - This type of sales actually declined in 1992, but has increased each year since

Benefits to Independent Restaurants

- Independence - Flexibility - Creativity

Changes in Quick Service Restaurants

- Introduction of healthy items - Expansion of menus - Nontraditional locations

Locations

A good restaurant location is harder to find than some people think. There are many things that should be considered when selecting a restaurant location such as parking, visibility, safety, knowing the neighbors, etc. Each of these can significantly affect the success of companies

Purchasing Volume (QSR)

When Wendy's first added baked potatoes to its menu, the entire US potato market was disrupted by huge increase in demand.

Market

When it comes to successfully running a restaurant, one of the most important things to consider is the customers. Restaurants rely on the customers for business, and their business brings in revenue; and it is the amount of revenue that they bring in that determines their success. Many restaurants try to appeal to everyone, which is a mistake. This is so because people have all different tastes and interests and obviously there is simply no way that they are going to be able to appeal to all of them.

Use of Unskilled Labor (QRS)

Because the fast-food industry relies on an operating system and machines, it does not require its workers to be skilled.

Family Restaurants Characteristics

- Evolved from the coffee shop style of restaurant. - Most are individually or family operated. - Hard to survive vs. chains because of branding cost, marketing cost, and operating cost

The Eating Market

- Includes operations such as drive-through, takeout, and delivery - Biggest growth in food service industry for many years - Since the late 1980s it has the lion's share of growth in total restaurant sales

Chain Restaurants Characteristics

- A group of restaurant that are identical in market, concept, design, service, food, and name - They share (most of the time) menu, food quality, and level of service - Atmosphere can be found in any one of the restaurants-regardless of location

Trends in The Restaurant Business

- Demographics: Baby boomers - $$$ - Fine Dining on the decline - Local, casual independents on the rebound - Health awareness: "Food Revolution"

Quick Service Restaurant (QSR) Characteristics

- Limited menus - Fast service - Chain domination - Purchasing volume - Part-time employees - Use of unskilled labor - Key roles for unit managers

Ethnic Restaurants Characteristics

- Majority are independently owned and operated. - Mexican restaurants are the fastest growing segment- Chipotle - Major cities offer a great variety of ethnic restaurants, and their popularity is increasing

Advantages of Chain Restaurants

- Marketing - Menu information - Training/HR support

Fine Dining Characteristics

- May be formal or casual and may be further categorized by price, decor/atmosphere, level of formality, and menu - Many serve haute cuisine-a French term meaning "elegant dining," or literally "high food" - Most are independently owned and operated by an entrepreneur or a partnership - The level of service is generally high

Restaurants As Part of A Larger Business

- The restaurants in this category do not really fit neatly into another category - These restaurants exist to serve another business or businesses - Restaurants in retail stores - Restaurants in shopping malls (Cheesecake Factory, Ruby's Tuesday)

The Restaurant Business

- The word restaurant comes from the French word meaning restore - Restaurants represent an important part of North American society-for most of us it is an everyday activity - We spend about 50% of our food dollars away from home - Americans spent over $500 billion in food service establishments in 2006.-$1 billion each day and 47.5% of the "food dollar"

Family Restaurants

An eating establishment that serves relatively simple food at reasonable prices, and welcomes children as well as adults. Family style restaurants offer table side service, non-disposable dishes, while still keeping the menu moderately priced. The ambiance of a family style restaurant is comfortable and inviting

Casual Dining

Casual restaurants have been an important component of the restaurant industry in recent years. Casual restaurants provide a relaxed atmosphere and reasonably priced menus that appeal to multiple demographic segments. The types of restaurants, and affiliated chains, that are a part of this segment are becoming almost as recognizable as certain quick -service chains

Celebrity Restaurants

Celebrities putting their passion for food into a restaurant all their own.

Chain Restaurants

Chain restaurant is one of a number of restaurants (under one ownership) operating under the same brand name and selling similar food items.

Limited Menu (QSR)

Each item on the menu has been engineered to simplify and standardize its purchasing, production and service. Simplification of the production process permits the use of unskilled labor

Nontraditional Locations (QSR)

It has been shown that nontraditional expansion would let restaurants reach more customers and better serve their franchisees. Drive-thru and stand alone stores still dominate the fast food landscape, but some chains are exploring new options such as counter service within larger stores, catering and even delivery.

Key Roles For Unit Managers (QRS)

Managers usually make the majority of decisions.

Marketing (Chain Restaurants)

More young children in America recognize Santa Claus than any other public figure. McDonald comes second. Because McDonald's and its franchises spend well over $2 billion on marketing and advertising.

Chain Domination (QSR)

Most of this type of restaurant is chain-affiliated, which introduces an interesting note of complexity into what appears to be a fairly simple operation

Concepts

One of the first steps toward opening a new restaurant is defining the concept. Restaurant's concept is a general idea of what you offer. For example, if the menu does not fit the overall ambiance (Very high price for a casual restaurant), when this happens, customers might not be enthusiastic about coming back. Every process of restaurant such as design and planning should be consistent with the concept of the restaurant.

Quick Service Restaurants (QSR)

QSRs account slightly less than half of all restaurant sales and nearly three-quarters of customer traffic. QSR operations lead the in productivity- such operations tend to simplify their production process and use self-service. The result is a drastic reduction in labor in both the front and the back of the house. Because QSRs require less labor, they can pass on their savings to the customer in the form of lower prices. The key to the success of QSRs is its simplicity. A key simplification remains quick service's limited menu. Each item on the menu has been engineered to simplify and standardize its purchasing, production, and service. Simplification of the production process permits the use of unskilled labor. The quick-service operation is, in many ways, more like a manufacturing enterprise than a traditional restaurant.

The Dining Market vs The Eating Market

The Eating Market: is differentiated from the dining market in that it caters more to meeting biological needs. The eating market can be sub-divided into (1) on-premise and; (2) off-premise dining. Off-premise can be further classified into: Takeout (or take-away), drive through, delivery. Together, these three areas have grown tremendously as a result for customers' demand for speed and convenience The Dining Market: is defined as including those restaurants that primarily serve our social needs. People will eat in restaurants (that makeup the dining market) to escape from boredom, to socialize, to be waited on, to have a different experience, and for convenience. Certain elements of the dining market distinguish these restaurants from the eating market: the importance (and sophistication) of service, the customer, and the occasion as well as others.

Menu Information/Training (Chain Restaurants)

The advantages of a chain restaurant is that you receive consistent quality of food and a menu that is familiar. They also have processes in place that makes it easy to train employees and run the restaurants. Some restaurant chains have established sophisticated training programs for their employees using computer-based and, increasingly, Internet-based techniques to demonstrate the proper ways of performing food service tasks and jobs. The standardized procedures emphasized in company training programs lower the cost of training and improve its effectiveness.

Fast Service (QSR)

The average waiting time per customer at a fast food restaurant has been 7.5 minutes, compared to 26 minutes in other types of restaurants

Independence/Flexibility (Independent Restaurants)

The independent's flexibility affects restaurant success. In large organizations, a bureaucracy must grow up to guide decision making. Although this is a necessary, and in some ways healthy, it does result in slower and more impersonal approach to problem solving in larger organizations. One element of the independence is the personal identity of its owner. Independents rely on the differentiation provided by unique foods, outstanding service, pleasing ambiance, and personal identity to achieve clear differentiation and consumer preference. In terms of Flexibility, perhaps the key that independents can boast of is the flexibility inherent in having only one boss or a small partnership. Fast decision making permits the independent to adapt to changing market conditions.

Ambiance

There are many factors aside from the quality of the food served that can influence a customer's experience while they are dining. Setting the right mood, or ambiance, plays an important role in customer satisfaction as well as customer retention. For example, ambiance will make the food taste better, customers want the full experience, and eating out is a sensory experience.

Ethnic Restaurants

This type of restaurants offer a cuisine and theme that combine to provide a "gateway" experience. Ethnic restaurants are a mainstay in the US restaurant industry, and Americans continue to explore new types of foods and from around the world. Although the most popular cuisines continue to be Italian, Chinese. And Mexican, some of the ethnic restaurants that have been gaining ground in recent years include Thai, Ethiopian, and Indian.

Expansion of Menus (QSR)

To be competitive, many fast-food chains began to expand their menus to include a wider range of foods to meet the tastes and preferences of their customers.

Part-time Employees (QSR)

Very high sales volumes and extreme peaks of demands throughout the day require managers to hire numerous part-time employees whose schedules vary from day to day and week to week. Keeping this crew properly trained and motivated is a major task. The costs associated with turnover such as lost training time must be managed.

Introduction of Healthy Items (QSR)

With the obesity epidemic plaguing the United States, fast-food establishments have come under fire. Many fast-food offerings are high in calories and saturated fat and sodium. The demand for healthy fast food has led to changes throughout the fast-food industry. It's more than worth it for QSRs to work to meet their customers' demands for providing healthier food options by eliminating fats to making calorie counts available.

Theme Restaurants

are restaurants in which the concept of the restaurant takes priority over everything else, influencing the architecture, food, music, and overall 'feel' of the restaurant. Theme restaurants combine entertainment with food. The décor, menu, lighting, costumes of the servers, and music all provide a distinctive dining experience. A target market is a group of individuals that share certain characteristics. Age, gender, income, interests, education, parenthood, marital status, lifestyle preferences and geographic location are a few of these characteristics. Some restaurant themes appeal to specific age groups. For example, children are attracted to cartoon characters, fairy tales and animals. A sports-oriented theme is more likely to appeal to males than to females, while a fashion theme would attract more women.

Fine Dining

caters to an upscale clientele and provides the highest quality of food. A fine dining restaurant has a formal atmosphere, is almost always a sit down restaurant, and has a fancier menu than most restaurants. Fine dining restaurants are full service restaurants with specific dedicated meal courses. Décor of such restaurants features higher-quality materials, with establishments having certain rules of dining which visitors are generally expected to follow, often including a dress code. The portions at a fine dining restaurant may also be smaller than at a more casual or family style restaurant, but the food will generally be of a higher quality. Fine dining restaurants tend to be on the more expensive side.

Independent Restaurants

is typically a restaurant that is local, serves a specific city - or even a specific area or neighborhood within a city - and is definitely not part of a chain of corporate restaurants. They are almost always stand alone properties with the owner working daily in the property.

Creativity (Independent Restaurants)

it can come in the form of restaurant design, new dishes and drinks, presentation, and variations on service. Being creative is a competitive advantage for those restaurants compared to the chain-affiliated ones.