The Restaurant
Business
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Chapter 3
The Restaurant Business
The Restaurant
Business
Types of Restaurants
Restaurant Operations
2
The Restaurant Business
Chapter Objectives
Explain the difference between commercial
and on-site food-service facilities.
Identify the various categories of the
commercial food-service industry.
Describe types of restaurant businesses.
Explain front- and back-of-the-house
operations.
Identify ways restaurants can increase and
measure profits.
3
The Restaurant Business
Introduction to Food
Service
Food satisfies a basic need and provides comfort.
The food-service segment of the hospitality industry
continues to grow.
Twelve million employees work in the U.S. foodservice industry.
Section 3.1
4
The Restaurant Business
Introduction to Food
Service
A commercial site can be
a chain, franchise, or
independent facility.
commercial site an
establishment, such as a
restaurant, where a foodand-beverage business
competes for customers
A school cafeteria is an
example of an on-site
facility.
on-site facility
an institutional or
noncommercial
establishment, such as
a hospital or corporation,
that provides meals for
people involved with the
property
Section 3.1
5
The Restaurant Business
Introduction to Food
Service
To be successful at any location, all food-service
establishments must consider these factors:
Market
Section 3.1
Location
Atmosphere
Concept
Menu
6
The Restaurant Business
Commercial Sites
The commercial for-profit segment of the foodservice industry is broad.
Section 3.1
7
Commercial Sites
Chains
Franchises
Independent
facilities
Commercial
Sites
Stand-alone
facilities
Section 3.1
In-house
restaurants
Off-premise
catering
8
The Restaurant Business
Commercial Sites
A full-service restaurant
is a destination for
customers.
full-service restaurant
a restaurant where a
customer sits at a table,
gives an order to a server,
and is served food at the
table
Types of full-service
restaurants include fine
dining, casual dining, and
limited service.
Section 3.1
9
The Restaurant Business
Commercial Sites
The quick-service
restaurant (QSR) has long
been considered the
standard and most profitable
category of restaurant in the
limited-service sector.
Section 3.1
quick-service
restaurant (QSR) a
restaurant offering
speedy basic services,
convenience, and
consistent quality at low
prices
10
The Restaurant Business
Commercial Sites
Restaurant specializations include:
Theme
Ethnic
Breakfast
Sandwich shops
Pizza
Section 3.1
Seafood
Chicken
Steak
Hamburger
11
The Restaurant Business
Types of Restaurant
Businesses
Types of restaurant
businesses include:
Chain
Franchise
Independent
Section 3.1
chain a type of business
that has more than one
location with the same name
under the same ownership
franchise a type of
business that is set up
through a franchise
agreement, which is a
contract between a
franchisor and franchisee
to sell a company’s goods
or services at a
designated location
12
The Restaurant Business
Restaurants Within Other
Properties
Examples of restaurants within other
properties are:
Sports and theme parks
Retail establishments
Lodging establishments
Section 3.1
13
The Restaurant Business
On-Site Facilities
Examples of on-site facilities are:
Primary/secondary
schools
Colleges and universities
Health-care facilities
Business and industry
Section 3.1
Military
Airlines and airports
Correctional facilities
Convenience stores
14
The Restaurant Business
Range of Food Service
The food-service segment of the hospitality
industry includes restaurants for every taste and
price range.
Opportunities exist on all levels of this growing
industry for front- and back-of-the-house positions.
Section 3.1
15
The Restaurant Business
3.1
1.
What is a full-service restaurant?
2.
What are three examples of specialty
restaurants?
3.
What are on-site dining facilities?
Section 3.1
16
The Restaurant Business
Restaurant Organization
Most restaurants are
divided into front of the
house and back of the
house.
front of the house the area
in a hospitality establishment
that guests view, such as the
entrance and dining room
back of the house the area
in a hospitality establishment
that guests usually do not
view, including all areas
responsible for food quality
and production, such as the
kitchen and receiving, office,
and storage areas
Section 3.2
17
The Restaurant Business
General Manager
The general manager (GM) is responsible for the
overall management of front- and back-of-thehouse operations.
The general manager determines the number of
staff members needed for each shift at each
station in the restaurant.
Section 3.2
18
The Restaurant Business
Front of the House
Front-of-the-house service includes these
functions:
Section 3.2
Initial
impression
Greeting
Taking and
transmitting orders
Serving food
Presenting bill
Preparing for
next guest
19
Front-of-the-House
Positions
General
Manager
Section 3.2
Opening
Manager
Assistant
Manager
Closing
Manager
Server
Host or
Hostess
Cashier
20
The Restaurant Business
Back of the House
Back-of-the-house staff perform these tasks:
Section 3.2
Plan menu
Select and contract
vendors
Prepare food and
beverages
Place orders or
award contracts
Determine product
specifications
Receive and inspect
deliveries or shipments
Develop purchase orders
Store and issue products
Obtain bids or quotes
Evaluate service and
products
21
The Restaurant Business
Back of the House
Depending on the size of
the property, production is
handled by a chef, head
cook, or food-production
manager.
production an
assembly-line process by
which food is prepared,
plated, and expedited by
teams at various food
stations
In larger facilities, a team
assists with meal
production.
Section 3.2
22
Back-of-the-House
Positions
General
Manager
Sous
Chef
Executive
Chef
Prep
Cook
Steward
GardeManger
Busser
Pastry
Chef
Expediter
Baker
Section 3.2
23
The Restaurant Business
Production and Other
Operations
Efficient production helps control portions, waste,
and, therefore, costs.
Section 3.2
24
The Restaurant Business
Production and Other
Operations
Some common purchasing activities include:
Maintaining an adequate supply of products
Establishing and maintaining quality standards
Negotiating the best price
Maintaining a competitive advantage
Section 3.2
25
The Restaurant Business
Production and Other
Operations
The most commonly used inventory system for
restaurants in the United States is FIFO, or first-infirst-out.
The PAR is the amount of each item that the
restaurant wants to keep in stock.
Section 3.2
26
The Restaurant Business
Return on Investment
In the food-service industry,
an operator can either
increase sales or reduce
cost to generate more
profits, or receive a return
on investment (ROI).
Section 3.2
return on investment
(ROI) a calculation used
to determine the ability of
a product to generate
profits
27
The Restaurant Business
Return on Investment
One way to increase sales is to increase the
average check amount.
A second strategy to boost sales is to increase the
number of customers, or covers, through better
marketing and advertising campaigns.
Section 3.2
28
The Restaurant Business
Return on Investment
Cost of sales measures the cost of products
consumed by the guest.
The most common costs are food cost and
beverage cost.
Section 3.2
29
Return on Investment
Calculating Food-Cost Percentage
Food sales for the period
$6,000
– Starting Inventory
($2,000)
– Purchases
($1,000)
=
$3,000
– Spoiled items
$200
– Employee Meals
$300
– Complimentary Meals
$500
= Cost of Goods Sold
Formula:
$2,000
Cost of Goods Sold
X 100 = Food Cost Percentage
Sales
Example:
Section 3.2
$2,000
$6,000
X 100 = 33.3%
30
The Restaurant Business
Return on Investment
Restaurants can increase profits by reducing costs
and increasing efficiency through:
Applying portion control
Monitoring usage
Controlling breakage
Using point-of-sales systems (POS)
Section 3.2
31
The Restaurant Business
Return on Investment
To control costs, restaurants create annual
budgets.
Budgets measure fixed costs and variable costs.
To measure profits, the restaurant industry uses
the Uniform System of Accounts (USAR).
Section 3.2
32
The Restaurant Business
Working Together
Both the front- and back-of-the-house staffs must
work as a team to ensure that a restaurant
maintains the standards necessary to compete in
the fast-paced industry of hospitality.
Section 3.2
33
The Restaurant Business
Better Buying Online
Operating
an e-tail
business
on an
electronic
The
food-service
industry
is taking
advantage
ofchannel—the
the Internet
Web—can be costly, due to design, delivery, returns, and
to improve
Restaurants are getting better deals and
operatingbusiness.
expenses.
better distribution by finding their supplies online.
Though Many larger dot-com companies crashed in the
1990’s,a small
Cyclery
West Newton,
In 2000,
surveystores
notedlike
thatHarris
51 percent
of of
restaurants
Massachusetts,
actually
increase
basic
Web
purchased
food using
suppliers’
Websales
sites.using
Theyacan
place
site. Today, a third of Harris’s bicycle business rides in on
their orders at any hour of the day and night.
the Web to get hard-to-find parts and personal service.
Describe an e-business’s home page to your class after
viewing one through marketingseries.glencoe.com.
For more information, go to marketingseries.glencoe.com.
Section 3.2
34
The Restaurant Business
3.2
1. How would you define the term front of the
house?
2. How would you define the term back of the
house?
3. What are three purchasing activities?
Section 3.2
35
The Restaurant Business
Checking Concepts
1. Identify the primary
difference between
commercial and on-site
facilities.
2. Cite the factors all foodservice establishments
must consider.
3. Name three examples
of on-site facilities.
continued
Examples
commercial
of on-site
site
an
1. A
2.
3.
The
factors
thatisall
establishment,
facilities
includesuch as
food-service
a restaurant, where a
primary/secondary
facilities
must
food-and-beverage
schools,
colleges and
consider
include
business competes
universities,
health- for
market,
location,
customers.
care
facilities,
An on-site
facility
businesses
is an and
institutional
atmosphere,
or
industries,
non-commercial
military
concept,
and
establishment
facilities,
airlines
where
and
menu.
meals are
airports,
correctional
provided for
facilities,
people
directly
and involved
with the property.
convenience
stores.
36
The Restaurant Business
Checking Concepts
4. Describe examples of
food-service options
available at colleges and
universities.
5. Define a chain
restaurant business.
6. Define a franchise
restaurant business.
continued
franchise
4. A
5.
6.
Food-service
chain restaurant
restaurant
one that
options
is
a typeatofismost
is
set up through
a
colleges/universitie
restaurant
that has
franchise
agreement,
s include
more
than
faculty
one
which is a contract
clubs, student
location
with the
between a franchisor
unions,name
same
catering
under
and franchisee to sell
services,
the
same goods
a company’s
convenience
ownership.
or services at a
stores,
andlocation.
vending
designated
machines.
37
The Restaurant Business
Checking Concepts
7. Identify the staff
members who work in
both the front and back of
the house.
Critical Thinking
8. Discuss some
strategies that might
increase business in a
failing restaurant.
staff
Two ways
7. Front-of-the-house
8.
include:
assistant
restaurants
can
manager,
increase opening
profits are:
manager,
closing the
(1) by increasing
manager, cashier,
check amount by
host/hostess, server,
raising
prices or
busser, and bartender.
selling
more food;staff
Back-of-the-house
and
(2) executive
by increasing
include:
chef,
the
of cook,
sousnumber
chef, prep
customers
through
garde-manger,
pastry
chef,
baker, steward,
marketing.
and expediter.
38
End of
The Restaurant
Business
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The Restaurant Business
40