Concept, Location, and Design Chapter 3 Courtesy of Columbia Restaurant Concept, Location, and Design The Restaurant: From Concept to Operation, 7th Edition

Objectives After reading and studying this chapter, you should be able to: Recognize benefits of a good restaurant name Explain the relationship between concept and market Explain why a restaurant concept might fail Discuss some qualities of successful restaurant concepts

Objectives (cont’d.) Identify factors to consider when choosing a restaurant’s location Identify factors to consider when developing a restaurant concept List restaurant knockout criteria

Restaurant Concepts Matrix of ideas Constitute what will be perceived as the restaurant’s image Should fit a definite target market Distinguishes the establishment as D&B (different and better than the competition) May be necessary to modify as competition arises Best concepts are often the result of learning from mistakes

Restaurant Concepts (cont’d.) Tips: Make it different enough from the competition Do not let it be too far ahead of current times Do not price your menu out of the market Pay attention to food costs Make your concept profitable Good concepts are on-trend Make your concept easily identifiable Take inspiration from others and love your concept Make sure the concept and location fit

Concepts: Clear Cut or Ambiguous? Many restaurants lack clear cut concepts No integration of the atmospherics Everything should fit together Concept is strengthened if it establishes an identity The name of the restaurant is part of the image. The restaurant name can tell the customer what to anticipate Courtesy of the San Diego Convention & Visitors Bureau Everything should fit together: Signs Uniforms Menus Décor

Protecting a Restaurant’s Name Lawsuits over names happen If another party uses your name, you should take action Loss of the right to a name means changing signs, menus, promo material, many costs Courtesy of Eat Here Changing signs, menus, promotional material, etc. Court costs and, perhaps, loss of power that has been built into the name by the superior operator

The McDonald’s Concept and Image Greatest restaurant success story of all time Concept: all-American family restaurant Clean Wholesome Inexpensive Fun Simple, straightforward menu Key to effectiveness of McDonald’s advertising

Defining the Concept and Market Selecting a concept Define it precisely in the context of which markets will find it appealing Market may constitute a small percentage of the total population Coffee shop with counter service appeals to interstate travelers There must be a market gap Need for the concept offered

© John Wiley & Sons, Inc. Figure 3.1: The concept and market comprise the hub around which the restaurant develops

Successful Restaurant Concepts Examples: T.G.I. Friday’s Spago Planet Hollywood Lettuce Entertain You Enterprises Corner Bakery Café Hard Rock Café Union Square Hospitality Group Parallel 33 Flamenco dancers entertain diners at the Columbia Restaurant in Tampa, Florida. Courtesy of the Columbia Restaurant Hard Rock Café- one of most successful restaurant chains Danny Meyer: A restaurant success story Union Square Hospitality Group  

Hard Rock Cafe The Hard Rock Cafe is one of the most successful restaurant chain concepts of all time Courtesy of Hard Rock Cafe

Restaurant Life Cycles Nearly all restaurants have an almost human life cycle: birth, growth, maturity, senescence, and death. Familial lack of enthusiasm Changing demographics Fashions change

Concept Adaptation Concept development Always has been important in the industry Becoming more so now that dining districts are developing in almost every community Concepts that have not been tested Most need some adaptation to the particular market Different menus and prices attract different markets

Changing or Modifying a Concept Many highly successful concepts that have worked well for years gradually turn sour Customer base and demographics change Morale and personal service may decline Copy and improve Every concept is built on ideas from other concepts Modifications and changes, new combinations, and changes in design, layout, menu, and service

When a Concept Fails Concept can be changed to fit the market Conversion can take place while the restaurant is doing business Name, decor, and menu can be changed Customers who have left may return if the new concept appeals to them New concept may better appeal to the same market Siphon customers away from the competition

Restaurant Symbology Includes the logo, line drawings, linen napkins, and service uniforms All helps to create the atmosphere César Ritz: waiters dressed in tails Chart House: servers dressed in Hawaiian attire McDonald’s: Ronald McDonald Take cues from larger companies to come up with symbols and signs that reflect the restaurant’s concept

Multiple-Concept Chains Can have five or more restaurants in the same block Each competing with the others Each acquiring a part of the restaurant market Tricon Global Restaurants, Inc. Largest of all restaurant companies Three concepts: KFC, Taco Bell, and Pizza Hut

Sequence of Restaurant Development From concept to opening: Choosing a location Business marketing initiated Layout and equipment planned Menu determined First architectural sketches made Licensing and approvals sought Financing arranged

Sequence of Restaurant Development (cont’d.) Working blueprints developed Contracts for bidding created Contractor selected Construction or remodeling begins Furnishing and equipment ordered Key personnel hired Hourly employees selected and trained Restaurant opened

© John Wiley & Sons, Inc.

Planning Services Many aspects of design are carried out by other parties Designers perform the following services: Basic floor plan and seating layout Equipment schedule Electrical requirements Plumbing requirements Equipment Equipment elevations Refrigeration requirements Exhaust and in-take requirements

Common Denominators Some common factors: Human needs met by the restaurant Menu prices and cost per seat Degree of service offered Space provided for each customer Rate of seat turnover Advertising and promotions expenditures Productivity per employee Labor and food costs

Utility versus Pleasure Include: - What is the purpose of a particular restaurant - Pleasure dining increases as service, atmosphere, and quality of food increases -Pleasure increases as menu price increases  

Degree of Service Offered Restaurant service varies from none at all to a maximum in a high style luxury restaurant. © John Wiley & Sons, Inc. Vending machines impersonal-no service at all. Luxury restaurant, captain and two bus-persons may attend each table Customer pays for food, also the ambience and attention of service personnel.

Seven categories of service Vending Quick service Fast casual Casual Family restaurant Dinner house Luxury restaurant

Time of Eating and Seat Turnover The seat turnover and speed of eating correlate with the restaurant classification but not perfectly Turnover is also highly correlated with the efficiency of the operation   © John Wiley & Sons, Inc.

Square Food Requirements Amount of space per customer needed by each type of restaurant © John Wiley & Sons, Inc.

Menu Price and Cost per Seat Menu pricing correlates highly with the degree of service offered, the time of eating, the labor cost, the amount of space offered the customer, and cost of the restaurant itself

Correct Number of Seats Theoretically, a given location will support a given number of seats with a particular concept Surveys show that 40 to 50 percent of all table service customers arrive in pairs; 30 percent come alone or in parties of three, and 20 percent in groups of four or more It is better to build too small than too large

Advertising and Promotion Expenditures Expenditures may vary according to the type of restaurant Courtesy of Hard Rock Cafe The Hard Rock Cafe’s theme has been popular for years.

Labor Costs as a Percentage of Sales Productivity per employee correlates highly with the various elements, moving from a high point at quick service to a low point in a luxury restaurant. Labor costs vary inversely with productivity. © John Wiley & Sons, Inc.

Planning Decisions that Relate to Concept Development Who are the target markets, the customers? Buy, Build, Lease, or Franchise? Food preparation from scratch or from convenience Items? Limited or extensive menu? How much service, limited or full?

Scoozi is an outstanding theme restaurant that gives the impression of an artist’s studio Courtesy of Lettuce Entertain You

Planning Decisions that Relate to Concept Development Cont. Young part-time employees or older career employees? Paid advertising or word-of-mouth advertising? Grand or quiet opening? Electricity or gas?

Profitability Most profitable restaurants are in quick-service category Oddly enough, few restaurant management students opt for quick-service management, believing it lacks the variety, glamour, and opportunity for self-expression Investor cares most about profitability and maximized profits

The Mission Statement Encapsulates objectives for the business Can be brief, encompassing, and/or explicit Elements: Purpose of the business and the nature of what it offers Business goals, objectives, and strategies Philosophies and values followed by the business and employees

Concept and Location Good location depends on the: Kind of restaurant Roadside restaurants Clientele Professionals Size of potential market Price structure Criteria for locating a restaurant Restaurant Business Annual Restaurant Growth Index

Location Criteria Includes: Demographics of the area Visibility from a major highway Accessibility from a major highway Number of potential customers passing by the restaurant Distance from the potential market Desirability of surroundings

Some Restaurants Create Their Own Location Dinner or family-style restaurants Need not place the same high priority on convenience of location Necessary for casual and quick-service establishments Courtesy of Danny Meyer

Some Restaurants Create Their Own Location Cont. Sources of location information Location decisions Based on asking the right questions and securing the right information Real estate agents are prime sources Other sources: chamber of commerce, banks, town or city planner, other restaurant owners, etc.

Knockout Criteria Includes: Proper zoning Drainage, sewage, utilities Minimal size Short lease Excessive traffic speed Access from a highway or street Visibility from both sides of the street

Other Location Criteria Includes: Market population Family income Growth or decline of the area Competition from comparable restaurants Restaurant row or cluster concept

Other Location Criteria Downtown versus suburban New restaurants continually displace old ones  Average travel time to reach restaurants Most diners-out select restaurants that are close by Matching location with concept Size of the lot, visibility, availability of parking, access from roads, etc. all have an impact on style of restaurant that will fit a location

Suburban, Nook-and-Cranny, and Shopping Mall Locations Restaurants do well in a variety of locations Depends on menu and style of operation Courtesy of City Zen

Minimum population needed New, fairly inexpensive food is in the American menu stream and is where the people assemble

Restaurant Chain Location Specifications Critical criteria Metropolitan area with 50,000 population 20,000 cars per 24 hour period Residential backup, plus motels, shopping centers or office parks Minimum 200 foot frontage Area demonstrating growth and stability Easy access and visibility Availability of all utilities to the property, including sewer    Location Information Checklist Dimensions and total square footage Linear footage Distance and direction Average 24 hour traffic Number of moving traffic lanes Traffic controls Posted speed limits On-street parking Parking requirements Landscaping and setback Topography Type of soil Drainage Existing structures Type of energy available Sewers Underground utilities Present zoning classifications Use and zoning of adjacent property Building limitations Character of surrounding area Population and Income characteristics Agencies requiring plan approval Status of annexation Signage Construction codes Restaurant competition Offering price of property  

Criteria Takeover locations Restaurant topographical surveys  Cost of the location Cantina Latina Courtesy of Cantina Latina Takeover locations Beginning restaurateur often starts by leasing or buying out an existing restaurant.  Restaurant topographical surveys Using town or city map and plotting the location of existing restaurants on the map.  Cost of the location Can the concept and the potential market support the location selected? 

Visibility, Accessibility, and Design Criteria Visibility and accessibility Important criteria for any restaurant Design Needs to correlate with the theme and includes: -the exterior, the entrance and holding area, the bar or beverage area, the dining area (including the table arrangements), the kitchen, and receiving (including access for deliveries), and storage and trash areas Visibility and accessibility Important criteria for any restaurant Visibility: extent to which the restaurant can be seen for a reasonable amount of time Accessibility: ease of arrival Design Needs to correlate with the theme and includes: Space allocation Lighting and color Layout of the dining area