Chapter 2: Kinds & Characteristics ofRestaurants & Their Owners• Chain or Independent• Franchised• Quick-Service• Fast Casual• Family• Casual• Fine-Dining
2Kinds & Characteristics ofRestaurants & Their Owners• Steak House• Seafood• Ethnic• Theme• Chef-Owned• Women Chefs & RestaurantOwners• Centralized Home Delivery
3Chain or Independent• Chain restaurants havesome advantages & somedisadvantages overindependent restaurants.• The advantages include:recognition in themarketplace, greateradvertising clout,sophisticated systemsdevelopment & discountedpurchasing.
4Chain or Independent• Independent restaurants arerelatively easy to open.• The advantage for theindependent restaurateur isthat they can “do their ownthing” in terms of conceptdevelopment, menus, décor &so on.• Some independent restaurantswill grow into small chains &larger companies will buy themout.
5Franchised Restaurants• Franchising involves theleast risk:– Restaurant format,including building design,menu & marketing plans,have already been tested inthe marketplace.– Less likely to go “belly up”than independentrestaurants.– Training is provided.– Marketing & managementsupports are available.
6Franchised Restaurants• To open a franchise there is afranchising fee, a royalty fee,advertising royalty & requirementsof substantial personal net worth.• Franchisors help:– Site selection– Review of any proposed sites– Assist with design & buildingpreparation– Help with preparation for opening– Train managers & staff– Plan & implement pre-openingmarketing strategies– Conduct unit visits & provide on-goingoperating advice
7Quick-Service• The Plate House, openedin the 1870’s, was the 1stknown quick-servicerestaurant.• They served a quick lunchin about 10 minutes.• Quick food productiontime is key.• Many quick-servicerestaurants precook orpartially cook food so thatit can be finished offquickly.
8Quick-Service• The segment includes allrestaurants where the foodis paid for before service.• Limited menus featuringburgers, chicken in manyforms, tacos, burritos, hotdogs, fries, gyros, teriyakibowels & so on.• Goal is to serve maximumnumber of customers inminimum amount of time.
9Fast Casual• Defining traits are:– The use of high qualityingredients– Fresh made to order menuitems– Healthy options– Limited or self-serving formats– Upscale décor– Carry-out meals
10Bakery-Café• Mainly quick-serviceestablishments.• Different than a bakery in thatthey serve soups, salads &sandwiches.• Many bake off goods that areprepared elsewhere or do finalproofing after receiving goods.• Many use central commissarysystems.• Variety of setting, products &ambiance.
11Family• Grew out of coffee shopstyle restaurant.• Are frequently located inor within easy reach ofthe suburbs.• Are informal with asimple menu & servicedesigned to appeal tofamilies.• Some offer wine & beerbut most offer noalcoholic beverages.
12Casual• Fits the societal trendof a more relaxedlifestyle.• Defining factorsinclude:– Signature food items– Creative bar menus orenhanced wine service– A comfortable, homeydécor
13Fine Dining• Cuisine & service is expensive& leisurely.• Very low table turnover (canbe <1).• Customers dine on specialoccasions & businessrelations.• Usually proprietor- or partner-owned.• Restaurants are small, usuallyless than 100 seats.
14Economics of FineDining• Expensive, average check runs $60 or more• High rent -Large PR budgets• High labor costs due to the necessity of highlyexperienced employees• Much of the profits come from wine• Tables, linen, dishes, décor very costly• http://www.ushgnyc.com http://hospitalityq.com/Programs/view/1• Union Hospitality Group
16Steak Houses• Limited menu caters toa well-identifiedmarket.• Service ranges fromwalk-up to high end.• High food costs (ashigh as 50%) & lowlabor costs (as low as12%).• Majority of customersare men.
17Steak HousesHigh-end operations:• May have sales of $5million or more per year• Serve well-aged beef• High percentage of wine &hard liquor salesLow-end operations:• Sales of $500,000 or lessper year• Beer & moderately pricedwine
18Types of Steak• Steaks vary from a few ounces to 24 ounces!• Tenderloin is most tender & runs along backbone.• T-bone is cut from the small end of loin.• Porterhouse contains T-bone & piece of tenderloin.• New York Strip is a compact, dense, boneless cut of meat.• Delmonico steak (or club steak) is a small, often boned steak,taken from the front section of the short loin.• Sirloin steaks come from just in front of the round, between therump & the shank.• Wet aged: Meat that’s wrapped in cryovac, sealed & refrigeratedfor several days.• Dry aged: Takes place under a controlled temperature,humidity & air flow process that causes weight loss of 15% ormore.
19Seafood• In Colonial America, seafood was a staplefood in the taverns.• Many seafood restaurants are owned &operated by independent restaurant owners.• Red Lobster, with 677 restaurants, is thelargest chain, with $2.5 billion in annualsales & average sales per restaurant ofalmost $3 million.• Farm-bred fish is changing the cost & kindof fish that are readily available.• French-farmed salmon, grown in pens,outnumber wild salmon from the ocean by50 to 1.• Seafood prices continue to rise but are incompetition with shrimp grown in Mexico,India & Bangladesh.• Aquaculture is predicted to grow & maybring the price of seafood down dramatically.
20Ethnic• Mexican:– Menu is often built around tortillas,ground beef, cilantro, chiles, rice &beans.– Relatively inexpensive because of thesmall percentage of meat used,which results in a food cost of lessthan 28% of sales.– Labor costs are also low becausemany of the employees are first-generation Americans or recentimmigrants willing to work atminimum wage.– Menus, décor & music in Mexicanrestaurants are often colorful &exciting.
21Ethnic• Italian Restaurants– Italian restaurants, includingpizza chains, boast the largestnumber of ethnic restaurants inthe United States.– Offer an array of opportunities forwould-be franchisees &entrepreneurs.– Owe their origins largely to poorimmigrants from southern Italy,entrepreneurs who started smallgrocery stores, bars & restaurantsin Italian neighborhoods.– Pizza is native to Naples & it wasthere that many Americansoldiers, during World War II,learned to enjoy it.
22Ethnic• Chinese Restaurants:– Represent a small percentage of allrestaurants in America.– Historically, they are owned byhardworking ethnic Chinese families.– The cooking revolves around the wok, alarge metal pan with a rounded bottom.– China is divided into culinary districts:Szechuan, Hunan, Cantonese & Northernstyle centered in Beijing.– Cantonese food is best known in the UnitedStates & Canada for its dim sum (smallbites), steamed or fried dumplings stuffedwith meat or seafood.– Szechuan food is distinguished by the useof hot peppers.– Chinese cooking styles reflect the places inChina from which the chefs came.
23Theme• Built around an idea emphasizingfun & fantasy.• Glamorize sports, travel, eras intime.• Celebrities are central to manytheme restaurants (some areowners).• Short life cycle compared to othertypes of popular restaurants.• Do well outside major touristattractions.• Locals tire of the hype when food isoften poor.• Most of the profits come frommerchandise not food sales.• The cost of most of the large themerestaurants is high, both in capitalcosts & in operations.
24Theme Categories• Hollywood & the movies.• Sports & sporting events.• Time-the good old days.• Travel-trains, planes &steamships.• Ecology & the worldaround us.
25• Part of American tradition offamily restaurants.• Publicity is key in gainingattention.• One of the best-knownhusband-and-wife culinaryteam is Wolfgang Puck &Barbara Lazaroff.– Border Grill’s food truck!– http://tastingtable.com/entry_detail/la/391Chef-Owners
26Advantages:• Having an experienced, highly motivated person incharge.• Name often already known & synonymous with greatfood.• Can be very profitable.Disadvantages:• Chefs often less knowledgeable about “thenumbers”.• Can often make more money working as a chef in aname restaurant.• Location & other factors are just as important forsuccess as food preparation & presentation.Chef-Owners
27Women Chefs & Restaurant Owners• The “typical” restaurantmanager of the future may bea woman.• Those with stamina &ambition may be better suitedfor management than aremen with similarbackgrounds.• It is agreed that women aremore concerned with details,sanitation & appearance.• Women are more likely to besensitive & empathetic withcustomers.
28Centralized Home DeliveryRestaurants• Centralization reduces the costs of ordertaking, food preparation, & accounting.• Marketing costs may not decrease.• Home delivery centers verify & process creditcard information & use computers to performthe accounting.• Order taking & accounting can be done at anylocation connected to the Internet, locally orinternationally.• The system does not even require thatoperators know what the customer hasordered; they simply transmit the order to adelivery person.