Chapter 3

Concept, Location, and Design

Objectives• After reading and studying this

chapter, you should be able to:– Recognize benefits of a good restaurant

name– Explain the relationship between

concept and market– Explain why a restaurant concept might

fail– Discuss some qualities of successful

restaurant concepts2

Objectives (cont’d.)– Identify factors to consider when

choosing a restaurant’s location– Identify factors to consider when

developing a restaurant concept– List restaurant knockout criteria

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Restaurant Concepts• Matrix of ideas

– Constitute what will be perceived as the restaurant’s image

– Should fit a definite target market– Distinguishes the establishment as D&B

(different and better), than the competition– May be necessary to modify as competition

arises– Best concepts are often the result of

learning from mistakes

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Restaurant Concepts (cont’d.)

• Tips:– Make it different enough from the competition– Do not let it be too far ahead of current times– Do not price your menu out of the market– Pay attention to food costs– Make your concept profitable– Good concepts are on-trend– Make your concept easily identifiable– Take inspiration from others and love your concept– Make sure the concept and location fit

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Concepts: Clear Cut or Ambiguous?

• Many restaurants lack clear cut concepts – No integration of the atmospherics– Everything should fit together:

• Signs• Uniforms• Menus• Décor

• Concept is strengthened if it establishes an identity

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Protecting a Restaurant’s Name

• Lawsuits over names happen– If another party uses your name, you

should take action– Loss of the right to a name means:

• Changing signs, menus, promotional material, etc.

• Court costs and, perhaps, loss of power that has been built into the name by the superior operator

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The McDonald’s Concept and Image

• Greatest restaurant success story of all time– Concept: all-American family restaurant

• Clean• Wholesome• Inexpensive• Fun

– Simple, straightforward menu • Key to effectiveness of McDonald’s

advertising

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Defining the Concept and Market

• Selecting a concept – Define it precisely in the context of

which markets will find it appealing– Market may constitute a small

percentage of the total population • Coffee shop with counter service appeals to

interstate travelers

• There must be a market gap – Need for the concept offered

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Figure 3.1: The concept and market comprise the hub around which the restaurant develops

Successful Restaurant Concepts

• Examples:– T.G.I. Friday’s– Spago– Planet Hollywood– Lettuce Entertain You Enterprises– Corner Bakery Café – Hard Rock Café– Union Square Hospitality Group– Parallel 33

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Concept Adaptation • Concepts that have not been tested

– Most need some adaptation to the particular market

• Concept development – Always has been important in the

industry• Becoming more so now that dining districts

are developing in almost every community

– Different menus and prices attract different markets

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Changing or Modifying a Concept

• Many highly successful concepts that have worked well for years gradually turn sour – Customer base and demographics change– Morale and personal service may decline

• Copy and improve– Every concept is built on ideas from other

concepts• Modifications and changes, new combinations,

and changes in design, layout, menu, and service

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Restaurant Symbology• Includes the logo, line drawings,

linen napkins, and service uniforms– All helps to create the atmosphere

• César Ritz: waiters dressed in tails• Chart House: servers dressed in Hawaiian

attire• McDonald’s: Ronald McDonald

– Take cues from larger companies to come up with symbols and signs that reflect the restaurant’s concept

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When a Concept Fails• Concept can be changed to fit the

market – Conversion can take place while the

restaurant is doing business

• Name, decor, and menu can be changed– Customers who have left may return if the

new concept appeals to them– New concept may better appeal to the same

market • Siphon customers away from the competition

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Multiple-Concept Chains• Can have five or more restaurants in

the same block– Each competing with the others– Each acquiring a part of the restaurant

market

• Tricon Global Restaurants, Inc.– Largest of all restaurant companies– Three concepts: KFC, Taco Bell, and

Pizza Hut

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Sequence of Restaurant Development

• From concept to opening:– Business marketing initiated– Layout and equipment planned– Menu determined– First architectural sketches made– Licensing and approvals sought– Financing arranged– Working blueprints developed– Contracts for bidding created

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Sequence of Restaurant Development (cont’d.)

– Contractor selected– Construction or remodeling begins– Furnishing and equipment ordered– Key personnel hired– Hourly employees selected and trained– Restaurant opened

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Planning Services• Many aspects of design are carried out

by other parties– Designers perform the following services:

• Basic floor plan and seating layout• Equipment schedule• Electrical requirements• Plumbing requirements• Equipment• Equipment elevations• Refrigeration requirements• Exhaust and in-take requirements

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Common Denominators• Some common factors:

– Human needs met by the restaurant– Menu prices and cost per seat– Degree of service offered– Space provided for each customer– Time of eating and seat turnover– Square-foot requirements– Advertising and promotions expenditures– Productivity per employee– Labor and food costs

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Planning Decisions• Include:

– Who are the target markets, the customers?

– Buy, build, lease or franchise?– Food preparation from scratch or from

convenience items?– A limited or extended menu?– How much service: limited or full?

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Planning Decisions (cont’d.)– Young part-time or older career

employees?– Paid advertising or word-of-mouth

advertising?– Grand opening or soft opening?– Electricity or gas?

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Profitability• Most profitable restaurants are in

quick-service category– Predominantly minimum-wage

personnel– High sales volume– The use of systems – Excellent marketing

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The Mission Statement• Encapsulates objectives for the business

– Can be brief, encompassing, and/or explicit

• Elements:– Purpose of the business and the nature of

what it offers– Business goals, objectives, and strategies– Philosophies and values followed by the

business and employees

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Concept and Location• Good location depends on the:

– Kind of restaurant • Roadside restaurants

– Clientele• Professionals

– Size of potential market– Price structure

• Criteria for locating a restaurant– Restaurant Business

• Annual Restaurant Growth Index25

Location Criteria• Includes:

– Demographics of the area– Visibility from a major highway– Accessibility from a major highway– Number of potential customers passing

by the restaurant – Distance from the potential market– Desirability of surroundings

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Some Restaurants Create Their Own Location

• Dinner or family-style restaurants – Need not place the same high priority on

convenience of location • Necessary for casual and quick-service establishments

• Sources of location information– Location decisions

• Based on asking the right questions and securing the right information

– Real estate agents are prime sources• Other sources: chamber of commerce, banks, town or

city planner, other restaurant owners, etc.

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Knockout Criteria• Includes:

– Proper zoning– Drainage, sewage, utilities – Minimal size– Short lease– Excessive traffic speed– Access from a highway or street – Visibility from both sides of the street

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Other Location Criteria• Includes:

– Market population– Family income– Growth or decline of the area– Competition from comparable

restaurants – Restaurant row or cluster concept

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Suburban, Nook-and-Cranny, and Shopping Mall

Locations• Restaurants do well in a variety of locations– Depends on menu and style of operation

• Additional considerations:– Minimum population needed – Downtown versus suburban– Average travel time to reach restaurants– Matching location with concept– Takeover locations– Restaurant topographical surveys– Cost of the location

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Visibility, Accessibility, and Design Criteria

• Visibility and accessibility – Important criteria for any restaurant

• Visibility: extent to which the restaurant can be seen for a reasonable amount of time

• Accessibility: ease of arrival

• Design – Needs to correlate with the theme and

includes:• Space allocation • Lighting and color • Layout of the dining area

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The End