Week 1 - Introduction - Restaurant Business Lecture Notes PDF

Week 1 - Introduction FOOD8000 – North American Food and Culture Why did you eat breakfast this morning? TASTE NUTRITION SENSORY APPEAL MEMORIES PERSONALITY/ METABOLISM COST...

Week 1 - Introduction FOOD8000 – North American Food and Culture Why did you eat breakfast this morning? TASTE NUTRITION SENSORY APPEAL MEMORIES PERSONALITY/ METABOLISM COST TRADITION  What is the Role of a Restaurant? Health? Food safety? Nutrition? Familiarity? Value? OR Art, enlightenment, prestige, an EXPERIENCE? Reasons to Open a Restaurant? Restaurants play a significant role in our lifestyles Dining out is a social activity Successful restaurants offer a reasonable return on investment Restaurant concept determines talents required There is no substitute for experience (Walker J, 2018) Reasons for going into the restaurant business: Changing Potential for Place to Money work buyout socialize environment Too much Challenge Habit Fun lifestyle time on your hands Opportunity to express yourself (Walker J, 2018)  Employer establishments by employment size category and province/territory (2020) Employment size category (number of employees) Medium Province/territory Micro (1-4) Small (5-99) (100-499) Large (500+) Ontario 6,081 19,044 341 5 Source: Statistics Canada, Quebec special 2,766 10,844 144 3 tabulation, unpublished data, British Columbia 1,839 8,238 153 6 unclassified excluded, 2020. Alberta 1,573 6,146 104 2 Saskatchewan 406 1,449 15 0 Manitoba 329 1,521 42 0 Nova Scotia 298 1,273 11 0 New Brunswick 213 898 13 0 Newfoundland and 129 531 11 0 Labrador Prince Edward Island 59 230 10 0 Yukon 16 66 0 0 Northwest Territories 8 40 0 0 Nunavut 1 12 0 0 Canada 13,718 50,292 844 16 Percent distribution 21.2% 77.5% 1.3% 0.0% Note. Statistics Canada, special tabulation, unpublished data, unclassified excluded, 2020. Challenges of Restaurant Operation Long hours Excessive fatigue can lead to health problems Lack of quality time with family Little security for managers working for others Family life can suffer Possibility of losing investments and investors Endangers financial security Failing economy Lack of consumer spending (Walker J, 2018) Challenges of Restaurant Operation (cont’d.) Restaurant operators and staff must: Enjoy serving people Handle frustration easily Be tireless Have lots of energy and stamina Be able to withstand pressure Be outgoing Have knowledge of food (highly desirable) (Walker J, 2018)  Challenges of Restaurant Operation (cont’d.) Starting a restaurant involves high risk Must be taken to achieve success Results of Dr. Parsa’s study: Highest failure rate during first year: 26% Second year: 19% Third year: 14% Three year period failure rate: 59% Many fail due to family problems (Walker J, 2018)  Buy, Build, Franchise, Comparing or and the advantage Manage? disadvantages of buying, building, franchise or working as a professional Several career and investment options: manager. Individuals should assess: 1. Buy an existing restaurant, operate it o Temperament as is, or change its concept o Ambition 2. Build a new restaurant and operate it 3. Purchase a franchise and operate the o Ability to cope with frustrations franchise restaurant 4. Manage a restaurant for someone else o Different risks and potential Individual or a chain rewards o Aesthetic personal desire (Walker J, 2018) Buy/Build/Franchise/Manage Advantages and Disadvantages Original Experience Potential Psychological Financial Potential Investment Needed Personal Cost of Failure Risk Reward Needed Stress Buy Medium High High High High High Build Highest High High Highest Highest High Franchise Low to Low Medium Medium Medium Medium (A) Ex. Subway Medium to High Franchise High High High High High High (B) Ex. Applebee’s Manage None Medium Medium Medium None Medium to High 12 Starting from Scratch Would-be restaurant operators Mix of different experiences in the business Industry does not have enough Turnover rate is high employees Requires inordinate energy, long hours, and Business is highly competitive willingness to accept a low salary Culinary training programs Costs vary 13  Analyze existing restaurants that are successful Be a Borrow good points and practices discriminating copycat! Successful mix Quality control is critical 14  Why do humans eat what they eat? Why experiences are we seeking when going to a restaurant? What are reasonable reasons to open a Summary restaurant? Questions What are some of the challenges of opening or working in restaurants? What are the advantages and disadvantages of buying? Building? Franchising? Or Managing?