copyright © 2014 by john wiley & sons, inc. all rights reserved. chapter 3 concept, location,...

Copyright © 2014 by John Wiley & Sons, Inc. All rights reserved.

Chapter 3

Concept, Location, and Design

Courtesy of Columbia RestaurantThe Restaurant: From Concept to Operation, 7th Edition

1


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 concepts2


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

3


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 mistakes4


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

5


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

6Courtesy of the San Diego Convention & Visitors Bureau


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

7

Courtesy of Eat Here


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

advertising8


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

9


10

Figure 3.1: The concept and market comprise the hub around which the restaurant develops

© John Wiley & Sons, Inc.


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.

11Courtesy of the Columbia Restaurant


Hard Rock Cafe

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

time

12Courtesy 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

13


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

14


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

15


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

16


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

17


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 Hut18


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

19


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

20


21


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

22


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

23


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

24


Degree of Service Offered

• Restaurant service varies from none at all to a maximum in a high style luxury restaurant.

25© John Wiley & Sons, Inc.


Seven categories of service

– Vending– Quick service– Fast casual– Casual– Family restaurant– Dinner house– Luxury restaurant

26


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

27



Square Food Requirements

• Amount of space per customer needed by each type of restaurant

28



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

29


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

30


Advertising and Promotion Expenditures

• Expenditures may vary according to the type of restaurant

31

The Hard Rock Cafe’s theme has been popular for years.

Courtesy of Hard Rock Cafe


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.

32


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?

33


Scoozi is an outstanding theme restaurant that gives the impression of an artist’s

studio

34

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?

35


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

36


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

37


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 Index38


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

39


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

40Courtesy 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.

41


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

42


Other Location Criteria

• Includes:– Market population– Family income– Growth or decline of the area– Competition from comparable

restaurants – Restaurant row or cluster concept

43


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

44


Suburban, Nook-and-Cranny, and Shopping Mall Locations

• Restaurants do well in a variety of locations– Depends on menu

and style of operation

45

Courtesy of City Zen


Minimum population needed

• New, fairly inexpensive food is in the American menu stream and is where the people assemble

46


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

• 47


Criteria

• Takeover locations• Restaurant

topographical surveys

• Cost of the location

Cantina Latina

48Courtesy of Cantina Latina


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

49

copyright © 2014 by john wiley & sons, inc. all rights reserved. chapter 3 concept, location,...

Documents