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Chapter 3

Chapter 3. Concept, Location, and Design. 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

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Chapter 3

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  1. Chapter 3 Concept, Location, and Design

  2. 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 concepts

  3. 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

  4. 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 mistakes

  5. 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

  6. Concepts: Clear Cut or Ambiguous? • Many restaurants lack clear cut concepts • No integration of the atmospherics • Everything should fit together: • Signs • Uniforms • Menus • Décor • Concept is strengthened if it establishes an identity

  7. 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, promotional material, etc. • Court costs and, perhaps, loss of power that has been built into the name by the superior operator

  8. 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 advertising

  9. 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

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

  11. 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

  12. Concept Adaptation • Concepts that have not been tested • Most need some adaptation to the particular market • Concept development • Always has been important in the industry • Becoming more so now that dining districts are developing in almost every community • Different menus and prices attract different markets

  13. 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

  14. 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

  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. 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 Hut

  17. Sequence of Restaurant Development • From concept to opening: • Business marketing initiated • Layout and equipment planned • Menu determined • First architectural sketches made • Licensing and approvals sought • Financing arranged • Working blueprints developed • Contracts for bidding created

  18. Sequence of Restaurant Development (cont’d.) • Contractor selected • Construction or remodeling begins • Furnishing and equipment ordered • Key personnel hired • Hourly employees selected and trained • Restaurant opened

  19. 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

  20. 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 • Time of eating and seat turnover • Square-foot requirements • Advertising and promotions expenditures • Productivity per employee • Labor and food costs

  21. Planning Decisions • Include: • Who are the target markets, the customers? • Buy, build, lease or franchise? • Food preparation from scratch or from convenience items? • A limited or extended menu? • How much service: limited or full?

  22. Planning Decisions (cont’d.) • Young part-time or older career employees? • Paid advertising or word-of-mouth advertising? • Grand opening or soft opening? • Electricity or gas?

  23. Profitability • Most profitable restaurants are in quick-service category • Predominantly minimum-wage personnel • High sales volume • The use of systems • Excellent marketing

  24. 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

  25. 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 Index

  26. 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

  27. 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 • 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.

  28. 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

  29. Other Location Criteria • Includes: • Market population • Family income • Growth or decline of the area • Competition from comparable restaurants • Restaurant row or cluster concept

  30. Suburban, Nook-and-Cranny, and Shopping Mall Locations • Restaurants do well in a variety of locations • Depends on menu and style of operation • Additional considerations: • Minimum population needed • Downtown versus suburban • Average travel time to reach restaurants • Matching location with concept • Takeover locations • Restaurant topographical surveys • Cost of the location

  31. Visibility, Accessibility, and Design Criteria • Visibility and accessibility • Important criteria for any restaurant • Visibility: extent to which the restaurant can be seen for a reasonable amount of time • Accessibility: ease of arrival • Design • Needs to correlate with the theme and includes: • Space allocation • Lighting and color • Layout of the dining area

  32. The End

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