Chapter 7

The
Restaurant
Business
Copyright 2010 by John Wiley & Sons, Inc. All Rights Reserved

THE RESTAURANT BUSINESS

The word restaurant covers a broad
range of types of operations (restorer of
energy)
The term food service is even more far
reaching , encompasses all sorts of public
and private locations that provide food for
sale

 Servicio de alimentacin
Se puede definir como el proveer alimentos
totalmente preparados para su consumo
inmediato.

 Pueden ir desde restaurantes de fullservice hasta de self-service buffets. De

fine restaurants to take-out operations
(on- or off- premise)Tambin pueden ser
independientes, de cadena o franquicia.

Tipos de Foodservice
Comerciales

Independientes
En hoteles
Clubes
Catering
En otros establecimientos
Eatertainment

No comerciales

Escuelas
Militares
Correccionales
Hospitales
Comedores
Industriales

THE VARIED FIELD OF FOOD

SERVICE
Restaurants (and the larger food service industry)
represent an important part of North American
society for most of us it is an everyday activity
Think of your last restaurant occasion Breakfast?
Lunch? Dinner? Coffee? Snack?

INDUSTRIA DE LOS
ALIMENTOS

NRA (National Restaurant Association)

https://www.restaurant.org/News-Research/Research/What-s-Hot

2014 Facts at a Glance

$683.4 billion: Restaurant industry sales.
3.6%: Restaurant industry sales increase in nominal terms.
1.2%: Restaurant industry sales increase in real (inflation-adjusted) terms.
990,000: Restaurant locations in the United States.
13.5 million: Restaurant industry employees.
10%: Restaurant workforce as part of the overall U.S. workforce.
47%: Restaurant industry share of the food dollar.
Eight in 10: Restaurant owners who started their industry careers in entry-level
positions.
Nine in 10: Salaried restaurant employees who started as hourly workers.
Nine in 10: Restaurants with fewer than 50 employees.
Seven in 10: Restaurants that are single-unit operations.

 3.8 veces a la semana el comer fuera

45.8% del presupuesto de comida se gasta en
establecimientos de alimentos
Desde 1970 crecimiento del 7.5% anual
Agosto y Sbado los ms populares
Comer fuera: cumpleaos (50%), da de las madres
y da de San Valentn
La comida ms popular: Italiana, china y mexicana
http://jobs.aol.com/articles/2014/10/06/how-workingat-mcdonalds-prepares-you-for-bigger-and-better-

Mxico
http://canirac.org.mx/pdf/canirac-20110713-cifras-delsector-restaurantero.pdf

Classifications of Restaurants
There is not a single definition of restaurant
classification.
Most experts agree there are two main categories
independent and chain restaurants.
Individual restaurants are 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.

 Other categories include fine dining, quick

service, ethnic, family, dinner house,
occasion, casual, etc.
We can classify them by price, service
level (of type), menu, etc.
Some restaurants may fall into more than
one category. For instance, a restaurant
can be both ethnic and quick service, such
as Taco Bell.

THE VARIED FIELD OF FOOD SERVICE

Some segments of the industry with which you should be familiar include:

Quick-service restaurants (QSR)

Fast Casual

http://nrn.com/article/consumers-rank-favorite-restaurant-chains#ixzz0vqOOFPlb

Fine dining

http://www.qsrmagazine.com/reports/top-10-fast-casuals

Casual dining

http://www.qsrmagazine.com/reports/qsr50-2012-top-50-chart

http://www.executivetravelmagazine.com/slideshows/americas-best-fine-dining-restaurants/3

Others include ice cream, coffee shops, food courts, etc.

CLASSIFICATIONS
In the next segment, we will classify
them into dining and eating

http://algarabia.com/top-10/top-10restaurantes-raros/

THE DINING MARKET vs. THE

EATING MARKET
Restaurants serve both:
social needs (dining) and
biological needs (eating)

some restaurants serve one or the other

while some serve both markets

 The dining market is defined as including

those restaurants that primarily serve our
social needs
People will eat in restaurants (that makeup
the dining market):
to escape from boredom
to socialize
to have a different experience
and for convenience

THE DINING MARKET

Certain elements of the dining market
distinguish these restaurants from the eating
market:
the importance (and sophistication) of service

the customer
the occasion

The most obvious example of a restaurant

type that makes up this market is fine

dining

THE DINING MARKET

Fine dining restaurants tend to be
characterized as:
full-service
Small
Independent
high-quality food and service
nice ambience
Expensive
http://www.theworlds50best.com/

 Casual upscale restaurants are

characterized by:
sophisticated menus
excellence in food
strong management (typically run by chains),
good wine lists but are slightly less expensive
and more casual than traditional fine dining
restaurants

THE DINING MARKET

Examples of casual upscale chains would
include.
Houstons, Mimis, Cheesecake Factory, and
McCormick & Schmicks, Mortons
http://www.mccormickandschmicks.com/

THE EATING MARKET

The eating market is differentiated from the
dining market in that it caters more to meeting
biological needs
The best example would be quick-service
restaurants or QSR
The other primary segment is the family dining
segment which offers table seating and full
service (examples, Dennys, IHOP, and Cracker
Barrel)
http://www.vips.com.mx/

THE EATING MARKET

The eating market can be sub-divided into:
(1) on-premise and
(2) off-premise dining

Off-premise can be further classified into:

Takeout (or take-away)
Drive through
Delivery

Together, these three areas have grown tremendously

as a result for customers demand for speed and
convenience

The Eating and Dining Markets

Vending

QSR

Upscale
Casual

Family Dining

Fast
Casual

Casual
Dining

Fine Dining

HIGH CHECK AVERAGE

RESTAURANTS
High check average restaurants also
known as fine dining restaurants
Fine dining restaurants are solidly
established as serving the dining market
The average check begins at about
$30.00 and goes up from there a notable
$200 meal in New Orleans comes to mind
http://www.thedailymeal.com/americas-28most-expensive-restaurants-slideshow

Fine Dining
A fine dining restaurant is one where a
good selection of menu items is offered
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.

HIGH CHECK AVERAGE

RESTAURANTS
They cater to people going out for special
occasions (birthdays and anniversaries),
celebrations (end of the school year) and
business meals

Celebrity Restaurants
Celebrities who may or may not have F & B
backgrounds own these operations.
The operations are designed to be entertaining,
drawing heavily on the notoriety of their owners.
Celebrity restaurants generally have an extra
zing to thema winning combination of design,
atmosphere, food, and perhaps the thrill of an
occasional visit by the owner(s).
http://www.businessinsider.com/restaurantsowned-by-celebrities-2011-11?op=1

Steak Houses
The steak restaurant is still strong in spite of
recent nutritional concerns.
To remain more competitive, many operations
are adding value priced items such as chicken
or fish. These items serve to attract more
customers.
The upscale steak house, like Mortons of
Chicago, Ruth Chriss, and Houstons, continue
to attract the expense account and occasion
diners.

MIDSCALE RESTAURANTS
Midscale restaurants include those
restaurants that have simplified production
systems (requiring lesser skilled
employees), specialized menus and
moderately priced food
This category of restaurants include:
Family restaurants
Cafeterias and buffets
Pizza (sit-down)

CASUAL RESTAURANTS
Casual restaurants are a step-up from Midscale
Restaurants
These restaurants are characterized by:
a relaxed atmosphere
more varied menus
reasonable prices

CASUAL RESTAURANTS
Casual restaurants such as Applebees,
Chilis, Ruby Tuesday, and Fridays
Specialty restaurants such as those
focusing on steak (Outback), seafood
(Red Lobster) or pasta (Semolinas)
Ethnic restaurants include, among others,
Chinese, Italian and Mexican
Theme restaurants including Hard Rock
Cafe

Fast Casual
Full-service quality in a quick-service
format
Hybrid that combines convenience with
higher-quality ingredients
Examples include Panera Bread, Baja
Fresh, and Qdoba Mexican Grill

Family Restaurants
Family restaurants evolved from coffee
shop restaurants. Many are individually or
family operated.
Most often they offer an informal setting
with a simple menu and service designed
to please all of the family.
The lines separating the various
restaurants and chains in the family
segment are blurring as operators upscale
their concepts.

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

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 by the total
experience.
People are attracted to theme restaurants
because they offer a total experience and
a social meeting place.

QSRs
The Quick Service segment is a very unique
segment for a variety of reasons
QSRs have a very long history, are among the
most productive types of restaurant operations in
the entire industry and have a history of leading
the industry in terms of innovation

Tarea: Realizar una investigacin sobre la

historia de los QSR

QSRs
The QSR industry is
characterized by a variety of
things including:

Location

Limited menus
Sales volume

Fast service
Types of
employees (many
part-timers)

Use of unskilled labor

Key roles for unit
managers
Highly competitive
menu prices
Chain domination
Simple unit, complex
system

Quick Service/Fast Food

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 co-branding at stores and
nontraditional locations, including highway
plazas and shopping centers.

Hamburger
The worlds greatest fast food success
story is undoubtedly McDonalds.
McDonalds story is amazing because its
larger than the next three mega-chains
combined Burger King, KFC, and Pizza
Hut. McDonalds is now in 117 countries.

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.

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 15,000
units.

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 chains
advertising dollars in national advertising.

RESTAURANTS AS PART OF
A LARGER BUSINESS
These restaurants exist to serve another
business or businesses
Examples include: restaurants in retail
stores such as Liverpool, Palacio de
Hierro, and restaurants in shopping malls
We differentiate these because they are
not free standing