© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Chapter 7 The Restaurant Business

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition After Reading and Studying This Chapter, You Should Be Able to: Describe the different characteristics of chain and independent restaurants Identify some of the top chain and independent restaurants List the classifications of restaurants Differentiate the characteristics of chain and independent restaurants

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Restaurants Vital part of everyday life Patronized several times a week for social purposes as well as to eat and drink Offer society a place to relax and “restore” Offer an opportunity to enjoy the company of friends, family, colleagues, and associates

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition More About Restaurants 50% of the food dollar is spent away from home Multi-billion-dollar business Employ 11.7 million people

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition French Cuisine and Its Foundation The French are credited with culinary art, largely due to two main events:  French Revolution  Thomas Jefferson French cuisine and its foundations:  Mother sauces  Nouvelle cuisine (lighter cuisine) American adaptation: Infusion:  Blending of flavors and techniques of two cuisines

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Culinary Greats Auguste Escoffier:  Patron saint of cooking Julia Child Emeril “BAM” Lagasse Bobby Flay Charlie Trotter:  Considered America’s finest Alice Waters Paul Prudhomme

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Chefs of Today Need to Possess: Cooking skills Employability traits People skills

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Figure 7-1 Approximate Market Share of Restaurant Segments

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Full-Service Luxury Restaurants National Restaurant Association Good selection of menu items made on premises Haute cuisine Fine Dining Hall of Fame:  Le Bec Fin  Spago There are few national chains :  Morton’s  Ruth Chris’s  Roy Flemings

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Reasons for the Small Number of Luxury Restaurants Labor intensive and require a higher level of skilled labor Small percentage can afford high prices Overhead costs may not be reasonable Economies of scale are not as easily reaped Consistency and quality are not easy to maintain Limited market appeal

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Other Restaurant Classifications Theme restaurants Celebrity-owned:  Owned by celebrities such as Michael Jordan, Dan Marino, Steven Segal, Gloria Estefan, Junior Seau, Denzel Washington  Seau’s San Diego  All Star Café  House of Blues

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Casual Dining and Dinner House Restaurants Mid-scale casual restaurants Family restaurants Ethnic restaurants Specialty restaurants

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Specialty Quick Service Restaurants (QSR) Theme related $111 billion annual sales Better known as fast food Limited menus Guest helps defray labor costs

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Quick Service Hamburger McDonald’s and Ray Kroc:  Added breakfast  Expanding overseas  Co-develop sites with gasoline companies  $33 billion worldwide sales  Drive thru

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Quick Service Pizza Local and regional chains all with delivery service $20 billion market Four major chains:  Pizza Hut  Domino’s  Papa Johns  Little Caesars

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Quick Service Chicken KFC is market leader:  Home delivery  “3-in-1” restaurants Other chains:  Church’s Chicken  Popeye’s

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Other Types of Restaurants Steakhouses:  New growth area  Outback Steakhouse Seafood restaurants Pancake restaurants Sandwich restaurants Family restaurants

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Ethnic Restaurants Independently owned and operated Mexican restaurants are largest growth segment Different types are developing:  Thai  Indian

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Walker: Introduction to Hospitality Management, 2 nd edition Trends  Demographics  Branding  Alternative outlets  Globalization  Continued diversification  More twin and multiple locations  More points of service  More hyper-theme restaurants  Chains vs. independents