Chapter 6

Chapter 5:
The Restaurant Business
Walker: Introduction to Hospitality Management, 3 rd Edition
© 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Chapter 5
 The Restaurant Business
 Classical Cuisine
 Food Trends and Practices
 Developing a Restaurant
 Menu Planning
 Classifications
 Trends
Walker: Introduction to Hospitality Management, 3rd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
2 All Rights Reserved.
 Restaurants are a vital part
of our everyday lifestyles;
because we are a Society on
the go, we patronize them
several times a week to
socialize, as well as eat and
drink.
 The word restaurant comes
from the French word
meaning restore.
Classical Cuisine
 North America gained most of its culinary
legacy from France through 2 main events:
 French Revolution in 1793—caused the best
French chefs of the day to lose their employment
because their bosses lost their heads! Many chefs
came to North America as a result.
 In 1784, Thomas Jefferson spent five years as
envoy to France, and brought a French chef to the
White House when he became president.
Classical Cuisine
 Mari-Antoine Careme is credited as the
founder of classical cuisine.
 August Escoffier is also noted for his

many contributions to cuisine
Classical Cuisine
 There are five mother sauces:
Béchamel, velouté, espagnole, tomato,
and hollandaise
 Nouvelle cuisine is a lighter cuisine
and is based on simpler preparations—
with the aid of processors, blenders,
and juicers—using more natural
flavors and ingredients.
Food Trends & Practices
 Chefs will need:
 A strong culinary foundation.
 Multicultural cooking skills and strong
employability traits.
 Additional management skills as
passion, dependability, cooperation,
and initiative.
Culinary Practices
 To be a good cook, one must understand the
basic techniques and principles of cooking. There
are six skill areas that are important to becoming
a successful chef:
 Cooking,
 menu development,
 sanitation/safety,
 accounting,
 computer training,
 food trends and practices for the new
millennium.
Culinary Practices
(conclusion)
 The most important thing to learn about

the industry is that you can’t do it
alone; it’s a team effort
Developing a Restaurant
 The successful development of a restaurant is
dependent on a number of factors:
1. Operating philosophy: represents the way the

company does business.
2. Restaurant Market is composed of those

guests who will patronize the restaurant.
• A niche is a specific share or slot of a certain
market.
• This area is analyzed by marketers to determine
the demographics and potential business
Developing a Restaurant
3. Concepts are created with guests in mind and
should fit a definite market.
4. Location should also appeal to the target

market.
5. Ambiance, or the atmosphere, that a

restaurant creates has both immediate
conscious and unconscious effects on guests.
Menu Planning
 There are six main types of menus:
 A la carte menus—items are individually priced
 Table d’hôte menus—a selection of one or
more items for each course at a fixed price

 Du jour menus—lists the items “of the day”
 Tourist menus—used to attract tourists’
attention
 California menus—are so named because in
some California restaurants, guests may order

any item on the menu at any time of the day
 Cyclical menus—repeat themselves
Menu Planning
 The many considerations in menu planning
include:
 Needs and desires of guests
 Capabilities of cooks
 Equipment capacity and layout
 Consistency and availability of menu ingredients
 Price and pricing strategy (cost and profitability)
 Nutritional value
 Accuracy in menu
 Menu analysis (contribution margin)
 Menu design
 Menu engineering
 Chain menus
Needs and desires of
guests:
 Guest needs and desires are what is
important when planning a menu. The
menu must harmonize with the theme,
concept, guest expectations, etc.
Capabilities of cooks
 Cook capabilities must harmonize with
the menu and concept. An appropriate
level of expertise must be employed to
match the demands of the customer.
This will affect many other aspects of
the operation like, equipment needs,
purchasing, salaries, etc.
Equipment capacity and layout
 Menus must be developed with regard
to the capacity and layout of the
equipment, or, the menu more or less
dictates the competency of labor to hire
and type of equipment necessary.
Consistency and availability of
menu ingredients
 Ingredients must available year-round.
Some may be more expensive at certain
times of the year due so seasonality.
Price and pricing strategy
(cost and profitability):
 The target market generally determines
the menu pricing strategies. Factors to
consider include, competition, food
cost, labor cost, other costs, expected
profit and contribution margin.
Nutritional value
 Customers are more health conscious
which has promoted changes in menu
selections and preparation methods.
More and more businesses are posting
nutritional value of food and some are
using heart healthy approaches.
Accuracy in menu
 Laws prohibit misrepresentation of
menu items. Truth in menu laws refers
to the fact that descriptions on the
menu must be accurate.
Menu analysis (contribution
margin)
 Menus are analyzed by owners and

management to determine profit and
evaluate cost centers. Sales volume,
contribution margin, food, beverage
and labor costs are some of the tools
used to analyze menus.
Menu design
 Menu presentation varies depending on
concept; from verbal descriptions to
chalk boards to formally presented
menus. Menus are sales tools and play
an important role in influencing guest
decisions and help to establish a
restaurant’s image and ambiance.
Menu engineering
 Menu engineering is an approach to
setting menu prices and controlling
costs. It is also used to determine the
performance of menu items relative to
profitability and cash flow.
Classifications of Restaurants
Independent Restaurants
 Typically owned by 1 or more owners
—usually involved in the day-to-day
operation of the business
 Not affiliated with any national brand
or name
 They offer the owner independence,
creativity, and flexibility, but are
accompanied by the risk of failing
Chain Restaurants
 A group of restaurants
identical in market,
concept, design, service,
food, and name
 The same menu, food
quality, level of service,
and atmosphere can be
found in any one of the Hard Rock Café offers first-rate,
restaurants—regardless moderately priced casual American fare
of location with, of course, a side of rock and roll
Fine Dining
 May be formal or casual and may be further
categorized by price, decor/atmosphere, level
of formality, and menu
 Many serve haute cuisine—a French term
meaning “elegant dining,” or literally “high
food”
 Most are independently owned and operated
by an entrepreneur or a partnership
 The level of service is generally high
Theme Restaurants
 A combination of a sophisticated
specialty and several other types of
restaurants
 Generally serve a limited menu
Theme Restaurants
 Of the many popular theme restaurants,
2 stand out:
 First, the nostalgia of the 1950s—as done
in the T-Bird and Corvette diners
 Second, the dinner house category—
among some of the better-known national
and regional chains are TGI Friday’s,
Houlihan’s, and Bennigan’s
 Casual, American bistro-type restaurants that
combine a lively atmosphere created in part
by assorted bric-a-brac to decorate the
various ledges and walls
Celebrity Restaurants
 Growing in popularity
 Wolfgang Puck, Naomi Campbell, Michael
Jordan, etc.
 Celebrity restaurants generally have an
extra zing to them—a winning
combination of design, atmosphere, food,
and perhaps the thrill of an occasional
visit by the owner(s)
Steak Houses
 Adding additional value-priced items
like chicken and fish to their menus
in order to attract more customers
 Upscale market leaders are Ruth’s
Chris, Morton’s, and Flemings
 The mid-price market leader is
Outback Steakhouse
Casual Dining
 Relaxed—includes restaurants from several
classifications:
 Mid-scale casual restaurants: Romano’s Macaroni
Grill, The Olive Garden
 Family restaurants: Cracker Barrel, Coco’s,
Carrow’s
 Ethnic restaurants: Flavor Thai, Cantina Latina,
Panda Express
 Over the past few years, the trend in dinner-
house restaurants has been toward more
casual dining
Family Restaurants
 Evolved from the coffee shop style of restaurant.
 Most are individually or family operated.
 Located in, or with easy access to, the suburbs.
 Most offer an informal setting with a simple menu
and service designed to please the whole family.
Ethnic Restaurants
 Majority are independently owned and
operated.
 Mexican restaurants are the fastest growing
segment.
 Our major cities offer a great variety of ethnic
restaurants, and their popularity is increasing.
Quick-Service/Fast-Food
Restaurants
 Included in this category:
Hamburger, pizza, chicken,
pancakes, sandwich shops, and
delivery services
 Increasing in popularity because of
their location strategies
Hamburger
 McDonald’s
 New menu items (salads, breakfast, etc.)
 Expanding overseas
 Co-developing sites with gasoline companies
 Each of the major hamburger restaurant
chains has a unique positioning strategy to
attract their target markets
 Burger King hamburgers are flame broiled
 Wendy’s uses fresh patties
Pizza
 Continues to grow
 $21 billion market
 Some major chains:
 Pizza Hut
 Domino’s Pizza
 Papa John’s
 Little Caesars
Chicken
 Perceived as a healthier alternative
to burgers
 KFC is market leader
 Other chains:
 Church’s Chicken
 Popeye’s
Sandwich
 Recently, menu debuts in the sandwich
segment have outpaced all others
 Classics, like melts and club sandwiches,
have returned—but now there are also
wraps
 The leader in this segment is Subway—
which operates more than 20,000 units in
75 countries
Bakery Café
 Headed up by Panera Bread
 Goal is to make specialty bread broadly
available to consumers across the United
States
 Focuses on the art and craft of bread
making with made-to-order sandwiches,
tossed-to-order salads, and soup served in
bread bowls
Trends
 Demographics
 Branding
 Alternative outlets
 Globalization
 Continued diversification
 More twin and multiple locations
 More points of service
The End

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Chapter 6

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Chapter 5:

The Restaurant Business

Walker: Introduction to Hospitality Management, 3 rd Edition

 August Escoffier is also noted for his

 The most important thing to learn about

1. Operating philosophy: represents the way the

2. Restaurant Market is composed of those

4. Location should also appeal to the target

5. Ambiance, or the atmosphere, that a

 Table d’hôte menus—a selection of one or

more items for each course at a fixed price

 Tourist menus—used to attract tourists’

some California restaurants, guests may order

 Menus are analyzed by owners and

of location with, of course, a side of rock and roll

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