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					        Chapter 2

 Kinds and Characteristics of
Restaurants and Their Owners
• After reading and studying this chapter,
  you should be able to:
  – List and describe the various kinds and
    characteristics of restaurants
  – Compare and contrast chain, franchised, and
    independent restaurant operations
  – Describe the advantages and disadvantages
    of chef-owned restaurants
  – Identify several well-known celebrity chefs
  – Define centralized home delivery restaurants 2
  Kinds and Characteristics of
• Segments:
  – Chain or independent (indy), and franchise
  – Quick-service (QSR), sandwich
  – Fast/quick casual
  – Family
  – Casual
  – Fine dining
  – Other
         Chain or Independent
• Chain restaurants
  – Some advantages and disadvantages over
    independent restaurants
  – Advantages include:
    •   Recognition in the marketplace
    •   Greater advertising clout
    •   Sophisticated systems development
    •   Discounted purchasing

 Chain or Independent (cont’d.)
• Independent restaurant advantages:
  – Relatively easy to open
  – Restaurateurs can “do their own thing”
     • Concept development, menus, décor, etc.
  – Potential for growth
     • Some will grow into small chains while larger
       companies will buy them out

      Franchised Restaurants
• Involves fewer risks:
  – Restaurant format has been tested in the
     • Less likely to go belly-up
  – Training is provided
  – Marketing and management supports are
• Several requirements:
  – Franchising and royalty fees, advertising
    royalty, and substantial personal net worth   6
     Franchised Restaurants
• Franchisors:
  – Help with site selection and review
  – Assist with design and building preparation
  – Help with preparation for opening
  – Train managers and staff
  – Plan and implement pre-opening marketing
  – Conduct unit visits and provide on-going
    operating advice
            Sandwich Shops
• Characteristics:
  – Simple to open and operate
  – Little or no cooking required
     • Hot and cold sandwiches, soups, and beverages
  – Limited kitchen equipment needed
• Examples:
  – Jimmy John’s gourmet sandwich shop
  – The Sandwich Shop in San Francisco
  – Subway
• 1870s: Plate House
  – First known quick-service restaurant
     • Served a quick lunch in about 10 minutes
• Characteristics:
  – Many precook or partially cook food
  – Goal is to serve maximum number of
    customers in a minimum amount of time
  – Food is paid for before service
  – Limited menus
    Quick Casual Restaurants
• Defining traits:
  – Use of high-quality ingredients
  – Fresh made-to-order menu items
  – Healthy options
  – Limited or self-serving formats
  – Upscale décor
  – Carry-out meals
  – Inclusion of bakery-cafés

          Family Restaurants
• Characteristics:
  – Grew out of coffee shop-style restaurant
  – Frequently located within easy reach of
  – Informal
     • Simple menu
     • Service designed to appeal to families
  – Some offer wine and beer
     • Most offer no alcoholic beverages
         Casual Restaurants
• Characteristics:
  – Fits societal trend of a relaxed lifestyle
  – Signature food items
  – Creative bar menus or enhanced wine service
  – Comfortable, homey décor
• Examples:
  – Applebee’s, Outback, Chili’s, etc.

     Fine-Dining Restaurants
• Characteristics:
  – Expensive and leisurely
     • Average check of $60 or more
  – Very low table turnover
     • Can be less than one and evening
  – Customers: special occasions and business
  – Restaurants are small
     • Usually less than 100 seats
     • Proprietor- or partner-owned
     • Rent can be high
• Characteristics:
  – Limited menu caters to a well-identified
    market (i.e. steak eaters)
  – Service ranges from walk-up to high-end
  – High food costs (as high as 50%)
  – Low labor costs (as low as 12%)
  – Majority of customers are men

              Lore of Steak
• Steaks vary
  – Types include:
    • Tenderloin: most tender and runs along backbone
    • T-bone: cut from the small end of loin
    • Porterhouse: T-bone and tenderloin
    • New York Strip: compact, dense, and boneless
    • Delmonico: small, often boned steak, taken from
      the front section of the short loin
    • Sirloin: comes from just in front of the round,
      between the rump and shank
       Seafood Restaurants
• Colonial America
  – Seafood was a staple food in the taverns
• Characteristics:
  – Many are independently operated
  – Red Lobster is the largest chain
     • 682 restaurants
  – Farm-bred fish
     • Changing the cost and kinds available

         Ethnic Restaurants
• Mexican restaurant characteristics:
  – Menu is often built around tortillas, ground
    beef, cilantro, chilies, rice, and beans
  – Relatively inexpensive
  – Labor costs are also low
  – Menus, décor, and music are often colorful
    and exciting
  – Menus may include tasty seafood items and
    spicy sauces
          Italian Restaurants
• Characteristics:
  – Hold largest number of U.S. ethnic restaurants
  – Offer an array of opportunities
  – Owe their origins largely to poor immigrants
    from southern Italy
  – Pizza is native to Naples
     • Many American soldiers, during World War II,
       learned to enjoy it
  – Chain operators are spreading the pasta
    concept (e.g., Olive Garden)
        Chinese Restaurants
• Characteristics:
  – Small percentage of restaurants in America
  – Historically owned by hardworking, ethnically
    Chinese families
  – Cooking revolves around the wok
  – China is divided into culinary districts:
     • Szechuan, Hunan, Cantonese, and the northern
       style centered in Beijing

          Theme Restaurants
• Characteristics:
  – Built around emphasizing fun and fantasy
     • Glamorize sports, travel, or eras in time
     • Celebrities are central to many
  – Comparatively short life cycle
  – Do well outside major tourist attractions
     • Locals tire of hype when food is poor
     • Most profits come from merchandise
  – Costs are high
     • Capital costs and operations
  Theme Restaurants (cont’d.)
• Martin M. Pegler: Theme Restaurant
  – Theme restaurant categories:
    •   Hollywood and the movies
    •   Sports and sporting events
    •   Time: the good old days
    •   Records, radio, and television
    •   Travel: trains, planes, and steamships
    •   Ecology and the world around us

               Coffee Shops
• Characteristics:
  – Long part of our culture and history
  – Originally created based on Italian bars
  – Modified to include wider variety of beverages
     • Meet the tastes of consumers
  – Chain or independent
  – Requirements:
     • Good name and location, permits, coffee and
       espresso machine, limited kitchen equipment,
       tables, chairs, and some decorations
    Chef-Owned Restaurants
• Characteristics:
  – Part of American tradition of family restaurants
     • Papa is the chef and mama is the hostess
  – Publicity is key in gaining attention
     • One of the best-known husband-and-wife culinary
       teams is Wolfgang Puck and Barbara Lazaroff
  – Chef-owner should have a good backup person
     • Share in management, food preparation, and
     • Husband-and-wife teams are subject to divorce
   Women Chefs as Restaurant
• Characteristics:
  – Numerous examples
  – Typical restaurant manager of the future may be
    a woman
     • Those with stamina and ambition may be better
       suited than men with similar backgrounds
  – It is agreed that female restaurant owners are
    more concerned with details, sanitation, and
  – Female restaurant owners are more likely to be
    sensitive and empathetic toward customers 24
           Celebrity Chefs
• Bigger today than ever before
  – Emeril Lagasse
  – Rachael Ray
  – Suzanne Goin
  – Alice Waters
  – Marc Vetri
  – Barbara Lynch

   Centralized Home Delivery
• Characteristics:
  – Reduce costs of order-taking, food
    preparation, and accounting
     • Marketing costs may not decrease
  – Home delivery centers verify and process
    credit card information
     • Computers used to perform accounting
  – Can be done at any location connected to the
    Internet, locally or internationally

The End


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