Industry Analysis Limited Service Eating Places Industry

Small and mid-cap restaurants that were heavily franchised (less than 25% of stores owned by the

Although the restaurant industry is perceived to have high risk of failure, the risk of a restaurant failing is not too different from other small businesses. Parsa et al. quantified the risk of failure at 26% in the first year and 57% by year 3. He also described several factors that can influence the risk of failure. Those include physical location, firm size, speed of growth, differentiation from other restaurants in the market, adapting to external trends, and management experience. In terms of location and differentiation, Paul’s bar will be located in a new development designed to attract affluent customers and with very few competitors. Paul’s small firm size increases risk because of barriers to attract partners (i.e. suppliers and bankers are prejudiced against smaller firms) and growth that may be too rapid to manage. On the other hand, Robert already has experience in the restaurant business and should know how to run the bar and subsequent restaurant. Their choice of a piano bar may be in response to local trends that favor success.

While faced with competitive markets and globalization, companies are always looking for ways to improve their overall cost and pricing structure. It is becoming increasingly more difficult to maintain quality levels of service while providing good and services at rates where companies can remain profitable.

competition and provides a commonly requested service. Customers will take notice to the fact that

The restaurant industry has been booming since the 90’s to now. With over 600,000 restaurants in the United States alone, and about 14.4 million employees

In the beginning of Chapter 2 of Fast Food Nation,Eric Schlosser recounts a visit to the McDonald’s headquarters in Oak Brook,Il where he is engulfed in the enormous amount of Mcdonald’s merchandise.The McStore is described as a store similar to Disney, Schlosser uses the word “Disneyesque”. From that point on the author begins to compare the establishment of the McDonald’s company with that of the Walt Disney company. Ray Kroc,predominant establisher of the McDonald’s corporation, is depicted as a great salesmen who targeted predominantly children;And portrayed working at his establishment as something greater than it possibly was-much like Walt Disney did. Later on in the Chapter Eric Schlosser goes on to explain that Ray reached out to

As read earlier, restaurants experience very slim profit margins, and a down fall to the economy could possibly lower or even eliminate those margins. One serious economic threat restaurants will be facing in the near future is the rise in minimum income. Wages already account for upwards of 35% of a restaurant's costs (10), and this increase will force restaurants to raise their prices or experience less profits.

Fast Food Nation, by Eric Schlosser, has given me a lot of insight on so many different aspects of food industries. About how the food industries was manifested and who were the people that made the industry grow into what it is today.

In terms of the restaurant industry, the capital requirements for entry are not large. Buildings can be leased, input food supplies can be bought fairly cheaply, and the fees for opening a business, as long as there are not liquor licenses involved, are manageable. Other barriers to entry play a larger role. Reputation is very important in the restaurant industry. It is difficult to build a brand/reputation from scratch. Panera possesses a strong advantage because they already have a great reputation. In 2011, Zagat gave Panera

Another competitive advantage is the excellent customer service as well as the willingness to provide customers with any products they request. Besides, the engagement to support the communities which are served by the store, helped to gain a loyal customer base.

The restaurant industry is said to be one of the oldest industries in the economy. As the economy and urbanization grow, so too does the industry of restaurants; it’s for this reason that the industry has been growing at a rapid pace. Even with the restaurant industry ebbing and flowing, there are still new entities entering the fray consistently. Some restaurants may close, but it will not be too long before a new restaurant opens in the place of the old one. Historically, the restaurant industry has contributed nearly 4 percent to the gross domestic product (GDP) of the United States (U.S.) economy. The most recent findings show that the restaurant industry employs more than 12.7 million people (which is approximately equal to 9 percent of the

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand

♦ Reliance on franchising "associate" stores and opening a few new company-owned stores as a means of expanding nationally and internationally. However, franchise licenses were granted only to candidates who have experience in multi-unit food establishments and who possess adequate capital to finance the opening of new stores in their assigned territory.

Advantages & Disadvantages of Franchising Franchising is ‘a continuing relationship in which the franchisor (the owner of a company) provides a licensed privilege to the franchisee (the buyer) to do business and offers assistance in organising, training, merchandising, marketing, and managing in return for a consideration. It is a form of business by which the franchisor of a product, service, or method obtains distribution through affiliated dealers (franchisees).’ (http://www.business.gov) A franchise is essentially a replica of an existing business. When you purchase a franchise, you buy the rights to use the parent company's name and to sell its product or service in exchange for an up-front franchise fee and ongoing royalties, which