5 essays

HMD 101

1

The Restaurant Business

Restaurant - the term derived from the French “restaurat” , meaning to “restore” Restaurateur - a restaurateur is a person who restores, as opposed to restaurat, describing the act of restoring

Restaurant

HMD 101

2

Low barriers to entry Extremely competitive Failures result from lack of working capital Success result in “cash cows”

Restaurant Business

Restaurant versus Cooking at Home Powerful cooking equipment Higher quality ingredients Extensive use of aromatics From scratch cooking Butter - lots of butter Cost controls are mission critical

HMD 101

3

Menu items Price points Sense of place Location Service method Unique selling points

The Restaurant Concept

Unique Selling Points Portion size From scratch cooking Menu variety Dining room design All you can eat Tableside preparation

Farm to table Fast service Freshness Food with integrity Sustainability Affordable wines

HMD 101

4

Industry Segments Restaurants/Bars Retail/Supermarkets Hotels/Resorts Convention Centers Business & Industry Schools/Universities

Sports/Entertainment Hospitals/Nursing Homes Military Correctional Facilities Airlines Specials Events

HMD 101

5

Barriers to entry Franchising Average check Number of staff Skill level of staff

Profitability Number of properties From scratch preparation Alcohol sales percentage Compensation

1 2 3 4 5 Quick

Service Restaurants

Fast Casual

Casual Dining

Casual Fine Dining

Fine Dining

HMD 101

6

Show me the money . . . Feed the masses, live with the classes Feed the classes, live with the masses

HMD 101

7

HMD 101

8

Restaurant Management Skill Set Real estate Design Capital management Culinary management Service operations management Cost control Revenue enhancement

Restaurant Metrics - Sales Comparable sales (comps) Average transaction Average check Guests per day (cover count) Table turns per day Sales per square foot

HMD 101

9

Concept Guests Per Day

Table Turns Per Day

Sales Per Square Foot

Cheesecake Factory 1,420 4.7 864

BJ’s Restaurant & Brewhouse 1,193 4.5 666

PF Chang’s 673 3.4 730

Olive Garden 835 3.5 640

California Pizza Kitchen 667 3.3 587

Casual Dining Comparative Restaurant Metrics

Restaurant Metrics - Expenses Food cost percentage Beverage cost percentage Labor cost percentage Prime costs Fixed and variable expenses Flow through percentage

HMD 101

10