This document provides an overview of different types of restaurants and their characteristics. It discusses chains versus independent restaurants, franchised restaurants, quick-service restaurants, fast casual restaurants, family restaurants, casual restaurants, fine-dining restaurants, steak houses, seafood restaurants, ethnic restaurants, theme restaurants, chef-owned restaurants, women chefs and owners, and centralized home delivery restaurants. For each type, it outlines defining traits, examples, economics, and historical background.

1. Chapter 2: Kinds & Characteristics of
Restaurants & Their Owners
• Chain or Independent
• Franchised
• Quick-Service
• Fast Casual
• Family
• Casual
• Fine-Dining

2. 2
Kinds & Characteristics of
Restaurants & Their Owners
• Steak House
• Seafood
• Ethnic
• Theme
• Chef-Owned
• Women Chefs & Restaurant
Owners
• Centralized Home Delivery

3. 3
Chain or Independent
• Chain restaurants have
some advantages & some
disadvantages over
independent restaurants.
• The advantages include:
recognition in the
marketplace, greater
advertising clout,
sophisticated systems
development & discounted
purchasing.

4. 4
Chain or Independent
• Independent restaurants are
relatively easy to open.
• The advantage for the
independent restaurateur is
that they can “do their own
thing” in terms of concept
development, menus, décor &
so on.
• Some independent restaurants
will grow into small chains &
larger companies will buy them
out.

5. 5
Franchised Restaurants
• Franchising involves the
least risk:
– Restaurant format,
including building design,
menu & marketing plans,
have already been tested in
the marketplace.
– Less likely to go “belly up”
than independent
restaurants.
– Training is provided.
– Marketing & management
supports are available.

6. 6
Franchised Restaurants
• To open a franchise there is a
franchising fee, a royalty fee,
advertising royalty & requirements
of substantial personal net worth.
• Franchisors help:
– Site selection
– Review of any proposed sites
– Assist with design & building
preparation
– Help with preparation for opening
– Train managers & staff
– Plan & implement pre-opening
marketing strategies
– Conduct unit visits & provide on-going
operating advice

7. 7
Quick-Service
• The Plate House, opened
in the 1870’s, was the 1st
known quick-service
restaurant.
• They served a quick lunch
in about 10 minutes.
• Quick food production
time is key.
• Many quick-service
restaurants precook or
partially cook food so that
it can be finished off
quickly.

8. 8
Quick-Service
• The segment includes all
restaurants where the food
is paid for before service.
• Limited menus featuring
burgers, chicken in many
forms, tacos, burritos, hot
dogs, fries, gyros, teriyaki
bowels & so on.
• Goal is to serve maximum
number of customers in
minimum amount of time.

9. 9
Fast Casual
• Defining traits are:
– The use of high quality
ingredients
– Fresh made to order menu
items
– Healthy options
– Limited or self-serving formats
– Upscale décor
– Carry-out meals

10. 10
Bakery-Café
• Mainly quick-service
establishments.
• Different than a bakery in that
they serve soups, salads &
sandwiches.
• Many bake off goods that are
prepared elsewhere or do final
proofing after receiving goods.
• Many use central commissary
systems.
• Variety of setting, products &
ambiance.

11. 11
Family
• Grew out of coffee shop
style restaurant.
• Are frequently located in
or within easy reach of
the suburbs.
• Are informal with a
simple menu & service
designed to appeal to
families.
• Some offer wine & beer
but most offer no
alcoholic beverages.

12. 12
Casual
• Fits the societal trend
of a more relaxed
lifestyle.
• Defining factors
include:
– Signature food items
– Creative bar menus or
enhanced wine service
– A comfortable, homey
décor

13. 13
Fine Dining
• Cuisine & service is expensive
& leisurely.
• Very low table turnover (can
be <1).
• Customers dine on special
occasions & business
relations.
• Usually proprietor- or partner-
owned.
• Restaurants are small, usually
less than 100 seats.

14. 14
Economics of Fine
Dining
• Expensive, average check runs $60 or more
• High rent -Large PR budgets
• High labor costs due to the necessity of highly
experienced 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

15. 15
Fine Dining Menus
• Expensive, imported items:
– Foie Gras
– Caviar
– Truffles
• Presentation very important.
• Focus on visual, auditory &
psychological experience.
• Extensive, expensive wine
list.

16. 16
Steak Houses
• Limited menu caters to
a well-identified
market.
• Service ranges from
walk-up to high end.
• High food costs (as
high as 50%) & low
labor costs (as low as
12%).
• Majority of customers
are men.

17. 17
Steak Houses
High-end operations:
• May have sales of $5
million or more per year
• Serve well-aged beef
• High percentage of wine &
hard liquor sales
Low-end operations:
• Sales of $500,000 or less
per year
• Beer & moderately priced
wine

18. 18
Types 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 the
rump & the shank.
• Wet aged: Meat that’s wrapped in cryovac, sealed & refrigerated
for several days.
• Dry aged: Takes place under a controlled temperature,
humidity & air flow process that causes weight loss of 15% or
more.

19. 19
Seafood
• In Colonial America, seafood was a staple
food in the taverns.
• Many seafood restaurants are owned &
operated by independent restaurant owners.
• Red Lobster, with 677 restaurants, is the
largest chain, with $2.5 billion in annual
sales & average sales per restaurant of
almost $3 million.
• Farm-bred fish is changing the cost & kind
of fish that are readily available.
• French-farmed salmon, grown in pens,
outnumber wild salmon from the ocean by
50 to 1.
• Seafood prices continue to rise but are in
competition with shrimp grown in Mexico,
India & Bangladesh.
• Aquaculture is predicted to grow & may
bring the price of seafood down dramatically.

20. 20
Ethnic
• Mexican:
– Menu is often built around tortillas,
ground beef, cilantro, chiles, rice &
beans.
– Relatively inexpensive because of the
small percentage of meat used,
which results in a food cost of less
than 28% of sales.
– Labor costs are also low because
many of the employees are first-
generation Americans or recent
immigrants willing to work at
minimum wage.
– Menus, décor & music in Mexican
restaurants are often colorful &
exciting.

21. 21
Ethnic
• Italian Restaurants
– Italian restaurants, including
pizza chains, boast the largest
number of ethnic restaurants in
the United States.
– Offer an array of opportunities for
would-be franchisees &
entrepreneurs.
– Owe their origins largely to poor
immigrants from southern Italy,
entrepreneurs who started small
grocery stores, bars & restaurants
in Italian neighborhoods.
– Pizza is native to Naples & it was
there that many American
soldiers, during World War II,
learned to enjoy it.

22. 22
Ethnic
• Chinese Restaurants:
– Represent a small percentage of all
restaurants in America.
– Historically, they are owned by
hardworking ethnic Chinese families.
– The cooking revolves around the wok, a
large metal pan with a rounded bottom.
– China is divided into culinary districts:
Szechuan, Hunan, Cantonese & Northern
style centered in Beijing.
– Cantonese food is best known in the United
States & Canada for its dim sum (small
bites), steamed or fried dumplings stuffed
with meat or seafood.
– Szechuan food is distinguished by the use
of hot peppers.
– Chinese cooking styles reflect the places in
China from which the chefs came.

23. 23
Theme
• Built around an idea emphasizing
fun & fantasy.
• Glamorize sports, travel, eras in
time.
• Celebrities are central to many
theme restaurants (some are
owners).
• Short life cycle compared to other
types of popular restaurants.
• Do well outside major tourist
attractions.
• Locals tire of the hype when food is
often poor.
• Most of the profits come from
merchandise not food sales.
• The cost of most of the large theme
restaurants is high, both in capital
costs & in operations.

24. 24
Theme Categories
• Hollywood & the movies.
• Sports & sporting events.
• Time-the good old days.
• Travel-trains, planes &
steamships.
• Ecology & the world
around us.

25. 25
• Part of American tradition of
family restaurants.
• Publicity is key in gaining
attention.
• One of the best-known
husband-and-wife culinary
team is Wolfgang Puck &
Barbara Lazaroff.
– Border Grill’s food truck!
– http://tastingtable.com/entry_detail/la/391
Chef-Owners

26. 26
Advantages:
• Having an experienced, highly motivated person in
charge.
• Name often already known & synonymous with great
food.
• Can be very profitable.
Disadvantages:
• Chefs often less knowledgeable about “the
numbers”.
• Can often make more money working as a chef in a
name restaurant.
• Location & other factors are just as important for
success as food preparation & presentation.
Chef-Owners

27. 27
Women Chefs & Restaurant Owners
• The “typical” restaurant
manager of the future may be
a woman.
• Those with stamina &
ambition may be better suited
for management than are
men with similar
backgrounds.
• It is agreed that women are
more concerned with details,
sanitation & appearance.
• Women are more likely to be
sensitive & empathetic with
customers.

28. 28
Centralized Home Delivery
Restaurants
• Centralization reduces the costs of order
taking, food preparation, & accounting.
• Marketing costs may not decrease.
• Home delivery centers verify & process credit
card information & use computers to perform
the accounting.
• Order taking & accounting can be done at any
location connected to the Internet, locally or
internationally.
• The system does not even require that
operators know what the customer has
ordered; they simply transmit the order to a
delivery person.

29. 29
The End
Copyright © 2008 John Wiley & Sons, Inc.