“Few things are more beautiful to me than a bunch of
thuggish, heavily tattooed line cooks moving around each other like ballerinas
on a busy Saturday night. Seeing two guys who'd just as soon cut each other's
throats in their off hours moving in unison with grace and ease can be as
uplifting as any chemical stimulant or organized religion.”
― Anthony Bourdain
I imagine if you are a celebrity chef, like Emeril Lagasse, Gordon
Ramsay or Wolfgang Puck the restaurant business may seem glamorous and the rewards
immense. Lucrative sponsorship
opportunities (pasta sauces with your name on it), television appearances,
extravagant appearances in Beverly Hills, Aspen and Palm Beach – the sky is the
limit. But for most chefs and restaurant
owners, the reality of the restaurant business is quite different from the Food
Network, and it more closely resembles indentured servitude than Lifestyles of
the Rich and Famous. Long hours, a
constant need for staffing in an industry beset with immigration and
documentation issues, rising food prices, inflation pressures and more, it’s a
wonder any restaurant can succeed.
Yet, there are over 1 million restaurants in the United
States, generating $799 billion dollars in sales and employing approximately
14.7 million people. “The restaurant
workforce represents 10% of the total U.S. workforce,” explains Abraham Zaiderman, a food
services and retail restaurant consultant based in Potomac, Maryland, “it is a
powerful social and economic force in this country.”
We all have our favorite local restaurants, those reliable
neighborhood places where you always know you will find a good meal. Maybe it is a friendly waiter or bartender,
perhaps it is the consistent food or early bird pricing that brings us back
week after week. I think we all know of
favorite restaurants that lost their way and eventually closed. The restaurant business is a notoriously
difficult place to succeed, but that does not dissuade many from trying.
According to a study
about failed restaurants by Ohio State University, 60 percent close or
change ownership in the first year of business, 80 percent fail within five
years.
Customers rarely consider all the different factors that
impact the bottom line for a restaurant, explains Abraham
Zaiderman, “food prices, wages, legal and compliance costs, rent,
demographics all play a major role in whether a restaurant will succeed. Kosher restaurants, for example, are closed
Friday evenings, Saturdays and often Saturday nights, in addition to Jewish
holidays. Think about how challenged
your restaurant’s business model is when you are closed more than one-seventh
of the time.”
Online reviews and social media are also playing an
important role in determining the future of the restaurant business. “A Harvard Business School study found that a
one-star increase in Yelp rating leads to a 5-9 percent increase in revenue,”
says Todd William, founder and CEO of Reputation
Rhino, a digital agency in New York City, “consumer reviews and word of
mouth on social media channels, especially Facebook and Instagram are now
critical for the restaurant business.”
Negative news events can cost companies hundreds of millions of
dollars. Chipotle Mexican Grill has
struggled since its highly publicized E. coli outbreak in 2015. 2016 sales totaled $3.9 billion, tumbling 13%
from a year earlier.
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