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.While there may be differing strategies for successfully navigating the current stormy market, some things remain constant. Fiscal responsibility is wisdom in every aspect of business, as is upgrading the talent piece on your team when that talent is available.
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!With a systematic and well-thought out approach to running a restaurant, you can be sure that soon enough, your restaurant will become the favorite haunt of the gourmands of your region.