1. 6
The Restaurant Busisness

2. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Describe the significance of classical cuisine
Identify food trends and practices.
Summarize menu planning.
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3. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Identify some of the top chain and independent restaurants.
List the classifications of restaurants.

4. The Restaurant Business
Restaurants are a vital part of our everyday lifestyles; because we are a society on the go, we patronize them several times a week to socialize, as well as eat and drink.
Restaurants offer a place to relax and enjoy the company of family, friends, colleagues, and business associates, and to restore our energy level.
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5. The Restaurant Business
The word “restaurant” derives from the word “restore.”
There are more than 990,000 restaurants in the United States, with sales of $683.4 billion and 13.5 million employees.
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6. The Restaurant Business
The restaurant’s share of the food dollar has risen to 47.0%.
On a typical day, more than $1.8 billion is spent in the U.S. visiting a restaurant or foodservice operation.

7. Classical Cuisine
Two events were responsible for our culinary legacy coming from France.
First was the French revolution, which caused all the best French chefs to lose their jobs; and the second was Thomas Jefferson installing a French chef in the White House when he became president.
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8. Classical Cuisine
North America gained most of its culinary legacy from France.
Marie-Antoine Carême and Auguste Escoffier are credited as the founders of classical cuisine.
One of the main foundations of classical French cooking is the five mother sauces: béchamel, velouté, espagnole, tomato, and Hollandaise.
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9. Classical Cuisine
Nouvelle cuisine, which became popular in the early 1970s and late 1960s, is a lighter cuisine than French and is based on simpler preparations. Instead of thickening a sauce with a roux, a puree of vegetables would be used instead.
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10. Classical Cuisine
Nouvelle cuisine combined classical techniques and principles with modern technology and scientific research.

11. Food Trends and Practices
The level of professionalism is rising for chefs of the 21st century, and they will need a strong culinary foundation with a structure that includes multicultural cooking skills and strong employability traits, such as passion, dependability, cooperation, and initiative.
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12. Food Trends and Practices
Back-to-basic cooking has been redefined to mean taking classical cooking methods and infusing modern technology, and science to create healthy and flavorful dishes.

13. Culinary Practices
To be a good cook, one must understand the basic techniques and principles of cooking.
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14. Culinary Practices
There are six skill areas that are important to becoming a successful chef:
Cooking skills
Strong employability traits
People skills
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15. Culinary Practices
There are six skill areas that are important to becoming a successful chef:
Menu development skills
Nutrition knowledge, sanitation/safety knowledge
Accounting skills, and Computer skills for the new millennium.

16. Franchises
Through a contractual agreement, the franchisor grants the franchisee the rights to use their designs and plans, sell their products, and use their logos, promotional materials, and operational services.
The franchisor normally supplies the operational systems, menus and recipe design, and management expertise.
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17. Franchises
The franchisee must agree to maintain the standards set by the franchisor, who will also want the franchisee to meet minimum qualifications.
The franchisee benefits by joining a proven successful restaurant concept, which is more likely to succeed than an unproven concept.
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18. Franchises
However, the increased likelihood of success does incur costs.
Franchise costs include a franchising fee, a royalty fee, and advertising royalties, and require lots of personal net worth.

19. Chain Restaurants
Independent restaurants (also called “indies”) are typically owned by one or more owners who are usually involved in the day-to-day operation of the business.
Even if the owners have more than one store (restaurant-speak for a “restaurant”), each restaurant usually functions independently.
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20. Chain Restaurants
These restaurants are not affiliated with any national brand or name.
They offer the owner independence, creativity, and flexibility, but are generally accompanied by more risk.

21. Sustainable Restaurants
The average American meal has a shockingly large carbon footprint, usually travelling 1,500 miles to the plate and emitting large amounts of CO2.
Each meal produces 275 pounds of waste a day, making restaurants the worst aggressors of greenhouse gas emissions in retail history.
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22. Sustainable Restaurants
Utility costs are a big line item for restaurants, accounting for a median of between 2.3% percent and 3.6% of sales.

23. Menu Planning
The menu may be the most important ingredient in the restaurant’s success.
The menu must agree with the concept and exceed guest expectations.
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24. Menu Planning
Guests’ needs and desires are what is important when planning a menu, not what the owner thinks.
The menu must harmonize with the theme, concept, guest expectations, etc.

25. Capabilities of Cooks
Cook capabilities must harmonize with the menu and concept.
An appropriate level of expertise must be employed to match the demands of the guest.
This will affect many other aspects of the operation such as equipment needs, purchasing, salaries, etc.
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26. Capabilities of Cooks
Menus must be developed with regard to the capacity and layout of the equipment, or, the menu more or less dictates the competency of labor to hire and type of equipment necessary.

27. Price and Pricing Strategy
The target market generally determines the menu pricing strategies.
Factors to consider include competition, food cost, labor cost, other overhead costs, expected profit, and contribution margin.
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28. Price and Pricing Strategy
The two main ways to price a menu are the comparative approach, which refers to analyzing the price ranges of local competition.
The second method is to cost each menu item and multiply it by a ratio amount necessary to achieve the desired food cost percentage.

29. Classification of Restaurants
Most experts agree there are two main categories, or classifications of restaurants: independent and chain.
Other categories include fine-dining, quick-service, ethnic, family, dinner house, occasion, casual, etc.
Some restaurants may fall into more than one category.
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30. Classification of Restaurants
For instance, a restaurant can be both ethnic and quick service, such as Taco Bell.
Americans are eating out up to five times a week, as well as on special days such as Mother’s Day, Valentine’s Day, birthdays, and anniversaries.
The most popular meal to eat away from home is lunch.
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31. Classification of Restaurants
Individual restaurants have typically one or more owners who are usually involved in the day-to-day operation of the business.
Chain restaurants comprise a group of restaurants, each identical in market, concept, design, service, food, and name.

32. Fine-Dining
A fine-dining restaurant is one where a good selection of menu items is offered, with at least fifteen or more different entrees cooked to order and nearly all the food being made on the premises from scratch or fresh ingredients.
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33. Fine-Dining
Most fine-dining restaurants are independently owned and operated by an entrepreneur or a partnership.
In recent years, fine dining has become more fun because creative chefs offer guests fine cuisine as an art.

34. Celebrity Restaurants
Celebrities who may or may not have food and beverage backgrounds own these operations.
The operations are designed to be entertaining, drawing heavily on the notoriety of their owners.
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35. Celebrity Restaurants
Celebrity restaurants generally have an extra zing to them—a winning combination of design, atmosphere, food, and perhaps the thrill of an occasional visit by the owner(s).

36. Steak Houses
The steak house is still strong despite recent nutritional concerns.
To remain more competitive, many operations are adding “value priced items,” such as chicken or fish.
The upscale steak house, like Fleming’s, Ruth Chris’s, and Houston’s, continue to attract the expense account and “occasion” diners.

37. Casual Dining and Dinner House Restaurants
The types of restaurants that can be included in the casual dining restaurants category are: midscale casual restaurants, family restaurants, ethnic restaurants, theme, and quick-service/fast-food.
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38. Casual Dining and Dinner House Restaurants
Casual dining is relaxed and could include restaurants from several classifications: chain or independent, ethnic, or theme.
Hard Rock Cafe, TGI Friday’s, The Olive Garden, Houston’s, Romano’s, Macaroni Grill, and Red Lobster are good examples of casual dining.

39. Family Restaurants
Family restaurants evolved from coffee house restaurants.
Many are individually or family operated.
Most often they offer an informal setting with a simple menu and service designed to please everyone in the family.

40. Ethnic Restaurants
The majority of ethnic restaurants are family owned and operated, and sprang up to cater to the tastes of various ethnic groups.
The fastest growing segment of ethnic restaurants is Mexican.

41. Theme Restaurants
Many theme restaurants are a combination of a sophisticated specialty and several other types of restaurants.
They generally serve a limited menu but aim to wow the guest with the total experience.
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42. Theme Restaurants
People are attracted to theme restaurants because they offer a total experience and a social meeting place.

43. Quick-Service/Fast-Food Restaurants
This quick-service sector really drives the industry.
Quick-service or fast-food restaurants offer limited menus.
In an attempt to raise flat sales figures, more quick-service restaurant (QSR) chains are using cobranding at stores and nontraditional locations, including highway plazas and shopping centers.

44. Hamburgers
The world’s greatest fast-food success story is undoubtedly McDonald’s.
McDonald’s story is amazing because it’s larger than the next three megachains combined—Burger King, KFC, and Pizza Hut.
McDonald’s is now in 118 countries.

45. Pizza The pizza segment continues to grow due to delivery services.
The segment continues to grow by marketing discounts and continuing its very successful delivery business.

46. Chicken
Chicken has always been popular, in part because it is inexpensive to prepare, readily available, versatile, and perceived as a healthier alternative to burgers.
KFC dominates the chicken segment with a worldwide total of more than 14,000 units.

47. Sandwich Restaurants
Sandwich restaurants are a popular way for entrepreneurs to enter the restaurant business.
Subway is a particularly successful chain in this segment.
Part of its success may stem from the strategy of investing half of the chain’s advertising dollars in national advertising.

48. Bakery Café
Headed up by Panera Bread, with the mission of “a loaf in every arm” and the goal of making specialty bread available to consumers across the country, Panera focuses on the art and craft of breadmaking.

49. Trends in Restaurant Business
Social media, sustainability and local foods, concerns over public health, environmental responsibility, global menus, locally sourced foods, and healthful kids menus.