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Posts published in February 2019

Change Management in the Restaurant Industry

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There is no doubt that in the face of current market conditions, leadership in our business most likely will not sustain and grow their groups by maintaining the status quo. Change management must have a high priority in any Restaurant CEO's or President's vision. The question lies in how that leadership responds to the challenges of rising commodity prices, consumers who are less willing to part with their dollars, and a lending industry wary of where and to whom they make loans. There are those in the restaurant industry in executive positions who not only embrace change but who initiate the change necessary before the situation demands it, particularly in three key areas, Attitude, Focus, and People.

When I asked their approaches to managing change versus initiating it, here's how some in the quick casual segment put it. B.J. Dumond, CEO of J&H Foods, a franchisor of the 240 unit Simple Simon's Pizza, told me his attitude has to remain flexible. "You've got to be practical and have a common sense approach. But don't be afraid to get outside the box." Dumond told me. Seth Salzman, SVP of Corporate Operations for Stevi B's Pizza sees his concept in a favorable position, given the consumers' focus on value right now. "For the first time in company history, we've hired an advertising agency and we're launching a system-wide marketing campaign." Mike Shumsky, CEO of Dallas based la Madeleine sounded prepared for the current struggles when he told me, "You've got to get your organization right, lean and productive, regardless of the economic climate." While the attitudes vary, the theme seems to be one of proaction and not reaction.

Focus is another area I asked them about. Shumsky said his group started making realignments back in February of 2008. One area of particular attention was to "maximize what we already have and use." Shumsky went on to share how his group is rolling out a new web page for the company's website to emphasize the franchising opportunity with la Madeleine. Salzman informed me that Stevi B's marketing, which has in the past been mostly geared to highlight value, will change emphasis. "With everyone pushing price and value, we're shifting our focus to quality in our marketing message. Everyone already knows the value we offer." Dumond, of Simple Simon's, who has seen an increase in the number of franchising agreements when compared to two years ago, is focusing on maximizing those increased inquiries from potential franchisees interested in taking control of their careers through ownership. "We've always found the most success swimming upstream of the market.", Dumond told me. An increase in concentration on specific areas of opportunity seems to be paying off for those who recognize the needs and make appropriate and timely changes.

The people piece, which seems the most sensitive subject, also revealed different methodologies from restaurant leadership. Salzman's immediate take is to "move people and shift or expand their roles for now." "We need to be ready to bring the right people on board as soon as we can though." Shumsky has a different strategy. The focus here is on where they invest in the people piece, and not so much the amount they're investing. "We were pretty heavily weighted on the accounting, financial, and processing side as far as staffing was concerned. We automated many of those processes and focused on investing in marketing and service." This is apparent by the $1 million increase in both the marketing and labor portions of their budget. Both strategies are a result of restaurant leadership understanding the need to manage and initiate change in the best interest of their companies.

Some Tips To Help Your Dining Place Make A Mark In The Restaurant Industry

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The restaurant industry is dynamic and highly competitive. Whether it is classy and expensive fine dining venues or budget eateries, they all face the tough challenge of attracting new and repeat customers on a daily basis. As a restaurateur, you must have seen too many restaurants folding up within a few months of operations to take your business lightly.

It is quite tough to survive in the high-energy restaurant business that needs you to be active, innovative and a hands-on business owner. The burden of the daily operations involved in running a restaurant is such that not everyone can keep up with it. To be successful, you must be as knowledgeable about business and financial management as you are passionate about food.

Location is an important factor influencing the success of a restaurant. Choose an approachable, decent and clean area to set up your eatery. You should also create a warm, welcoming, comfortable and elegant ambience that can fascinate your customers.

The quality of food, undoubtedly, is the mainstay of any dining place. Try to offer an imaginative menu that is full of variety and keeps evolving to accommodate the changing food trends and seasonal food items. Ensuring impressive presentation of the dishes is also essential. Creating a signature dish for which your restaurant can become famous is an excellent idea. However, you must maintain consistent high quality in its preparation.

Your customers' dining experience depends as much on the quality of service they get as it does on the food they eat. They leave with memories of not only how delicious the food was, but also how professionally they were served. Make sure that you hire soft-spoken, well-mannered, personable, trained and experienced waiters, managers and other staff who know what is expected from them and deliver it, too.

Word of mouth publicity plays a big role in the success of a restaurant. So, you must market your place suitably. There are a number of avenues available these days for business promotion. You should use both the offline and online marketing tools. Local advertising through the print and audio/visual media should be combined with online marketing methods such as maintaining a strong social media presence, having a SEO friendly website, interacting with new and regular customers through blogs, articles, forums, etc. and getting your restaurant listed in popular, high traffic local business directories. A happy customer can generate a lot of business for you, but first you have to attract the customers to try you out!

Investing in Restaurants – Trends in the Restaurant Industry for 2011

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From food trucks to back to the farm restaurants, as the restaurant industry climbs back from the abysmal years of the economic crash, there are investment opportunities galore for investing in restaurants. Investors who want to start investing in restaurants might want to take a look at predicted trends in the restaurant industry. Some formerly widely popular restaurants have peaked out, but there are some emerging trends that are slated to explode the next few years. So, what are the big ideas expected for 2011 and 2012?

Mobile food has been big business in 2010. Food trucks touting everything from tacos to sandwiches to Italian cuisine have found success with low overhead and the ability to take the food directly to a crowd of potential customers. Well-known restaurants have expanded into this area with catering and recognizable brand food trucks as well. 2011 is expected to bring increased governmental regulation of this niche of the restaurant industry which may affect profit margins. However, it is still expected to be a good bet for investing in restaurants.

Restaurants that show the farm sources for their food or are located on farms have also soared in popularity. Farmers have been made into celebrities; celebrities have become farmers in an attempt to follow up massive sales in books about returning to whole foods. Pleasing health food fans, environmental activists, and the tide of citizens wanting to return to real food rather than highly processed chemical equivalents, these types of restaurants or restaurant chains are expected to perform well for investors venturing into investing in restaurants.

Southern comfort food, soul food, and Old Italian favorites are also making a strong come back. When the economy has tanked and everything is feeling somewhat uncertain, people turn back to the favorites that marked their childhood memories (or, what they wished their childhood memories were). Investing in restaurants that specialize in these types of food can be very profitable. However, with any of these trends, investors should do appropriate amounts of research themselves. Some well-known comfort food restaurants are in heavy debt and have cut all expansion. Some food trucks do not maintain an efficient enough bottom line, even with low overhead, to sustain substantial profits. The location of a farm restaurant may not have access to a large enough customer base. There are exceptions to every trend, especially in the highly risky business of the restaurant industry.

Differing Leadership Strategies in the Restaurant Industry

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As I talk with restaurant industry leaders around the country, I ask them how they are responding, in terms of growth and staffing, to the current market climate. What I've discovered is that there are primarily three schools of thought on the matter.

One reaction I'm hearing is some concepts, out of necessity, are making cuts in many areas to insure they weather the storm. Mitchell Moore, Vice President of Operations for Nestle Cafe, told me, "We cut about 12-15 positions in the corporate office to lean up the outgoing costs. We will need to replace these positions at some point as we are still planning aggressive growth in 2009." Carl Howard, CEO of Fazoli's, whose concept is taking advantage of improving commodity prices and investing in quality in their menu, told me his concept "Made the necessary cuts back in October, 2008 as we saw what was coming." Fazoli's will be changing about 40% of their offerings starting 2/16/2009.

Another response from restaurant leadership that I'm hearing is to "wait and see". Some concepts are, for the most part, maintaining the status quo. David Newman, President of BP Newman Investments, who oversees 33 Church's Fried Chicken units, put it this way, "Let the economists say what they're going to say. We're going to control what we can control." David is using some of this time to "sharpen the saw" of some of his key people by sending them to leadership training. "This is a time to invest in my people." According to Mitchell Moore, there's a lot of "wait and see" from Nestle Cafe franchisees as they look for loans to become more accessible before they open additional units. That being said, "We're aggressively growing 25-30 units in 2009.", according to Mitchell. Sam Beiler, President and CEO of Auntie Anne's had this to say, "In alignment with our focus on careful management of expenses in 2009, we are taking a conservative approach when it comes to the creation of new positions."

Probably the least touted and most enviable position some concepts find themselves in…being financially sound enough to take advantage of the current market conditions in the restaurant industry to grow their units through acquisition and attractive real estate terms from landlords who are currently much more willing to make concessions. Leon Irons, President of Churpeye's, a Sonic and Church's Fried Chicken franchise group, said he's "Adding stores this year and should increase the total number of units for our restaurant group by a third. (They currently operate 53 Sonics and 33 Church's.) Lance Benton, CEO of the 100% franchised Buck's Pizza, is very optimistic about their position and says they're getting many inquiries about their concept right now. "I don't like to hear about people being out of a job, but those people have to replace their income with something and many are looking at our franchise opportunity to do just that." Sam Beiler of Auntie Anne's continues,"Based on the cyclical nature of the economy that historically shows that for the past 100 years, we experience a downturn every 7 to 10 years, we began to prepare for a soft economy over 18 months ago." "Over the past few years, we've experienced strong same store sales comps and specifically in 2008 we had a strong year which has nicely poised us for continued growth in 2009. We anticipate opening 42 domestic locations and 53 international locations, adding to our over 980 store total in 20 countries."

These same restaurant companies are also able to take advantage of the current candidate pool to make "upgrade" hires from talent that hasn't typically been available. Mike Hamra, CEO of Hamra Enterprises, which operates 27 Wendy's and 47 Panera Bread locations, indicated his group's stance this way, "We are strategically reviewing opportunities to improve the quality of our staffing and are upgrading consistent with our growth plans and attrition." President of Wendy's of Missouri, Chuck Ocarz, told me that while the next 3-6 months are a concern for him, he is definitely "taking advantage of the availability of the talent that is out there to upgrade my team." Tim Cullers, Vice President of Restaurant Operations for Timberlodge Steakhouse is "taking a very aggressive approach when looking at talent" and sees the potential for his restaurant group to grow in this market.

Careers In The Restaurant Industry

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The next time you go out for dinner to a fancy restaurant, take a look at the staff there. Well-groomed, polite and giving timely service, they may seem less in number, but every person has a distinctive job of his or her own. But there are more people involved in the restaurant than those that are visible. From the chef to manager, the restaurant industry would be nothing without these people.

With at least one-third of adults having worked in a restaurant during some part of their life, the restaurant business is said to be the industries largest private-sector employer. According to some studies, the food and restaurant services sector is said to grow nearly 12% each year, with 1.9 million estimated jobs, out of which approximately 47,000 are management positions.

Formal Education

With most people becoming masters in the restaurant industry through sheer experience, having a valid certificate from a good school is an added advantage. Skilled staff is sought after in the restaurant industry, and the compensation is considerably better for those with formal training.

One could opt for any job, in marketing, human resources, food technology, customer relations or even business and finance management. There are courses offered by various hospitality management institutions in each of the given fields, but a person from the business arena could also fit in with management skills. The duration of courses vary from 2-4 years including the area of specialization. Some colleges also offer hand-on experience, as well as an internship. Besides this, some restaurants have their own training services. In this way, employees learn around the clock and excel as time passes.

Major Job Options In The Restaurant Industry

The hotel industry offers greater job options in administration and culinary services, hotel maintenance and marketing. Employees learn the functioning of departments such as kitchen, banquet operations, restaurants and bars. Besides the administration and human-resource functions, a manager's job also includes recruiting new employees and monitoring the performance of the current.
An individual could be promoted from a front office trainee to a manager and further to a general manager in a matter of months, depending on the quality of work.

Next is the housekeeping department, which sometimes demands working at odd hours, and is ideal for anyone open to working under these conditions.

Coming to the most important part of the restaurant, which is the kitchen, one could work as a chef, managing and overlooking the subordinate cooks or be a food manager, monitoring the food and beverage stocks of the restaurant.

Like any other job, working in the hotel industry also requires dedication and motivation. Irrespective of the experience involved, this would apply whether your giving or being given orders. In modern times, the thinking of a customer has also changed. It is important for a hotel employee to be well groomed and practice good etiquette. Employees should keep themselves updated with the market trends and always explore new ways to enhance the business by offering better service.

There is a famous saying in the industry: "you can train skills but you can't train personalities"; so let your personality do the talking for you. The friendly banter you may have always enjoyed would come handy when you want to make a connection with your customers. To conclude, if you relish it and the restaurant industry does appeal to you, enroll in a decent course and get a good job in your own city or anywhere in the world.