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This industry comprises establishments primarily

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This industry comprises establishments primarily engaged in providing foodservices to patrons who order and are served while seated (i.e.,waiter/waitress services) and pay after eating. These establishments mayprovide food services to patrons in combination with selling alcoholicbeverages, providing carry out services, or presenting live nontheatricalentertainment.Demographics, consumer tastes, and personal income drive demand. Theprofitability of individual companies can vary: while QSRs rely on efficient
operations and high volume sales, FSRs rely on high-margin items andeffective marketing. Large companies have advantages in purchasing,finance, and marketing. Small companies can offer superior food or service.The industry is labor-intensive. (First Research)Wages form a significant proportion of operating costs. The existence of astatutory minimum wage in most states increases the need for players tokeep other costs as lean as possible, which in turn increases the importanceof suppliers. A slight complication is that in some states, foodserviceemployers are able to treat tips received by their staff as contributing to theirwages; in such states, this policy reduces the impact of the minimum wagefrom the employers’ perspective. (Data Monitor)Annual revenue per worker is less than $50,000.Restaurants compete with companies that serve meals or prepared foods,including grocery stores, warehouse clubs, delis, and convenience stores. Inaddition, restaurants compete with home cooking.Among FSRs, most establishments focus on Italian cuisine, steak, or seafood.Hamburger joints make up a majority of QSR locations, along with pizzaparlors and sub sandwich shops. Industry revenue is roughly evenly splitbetween FSRs QSRs.In FSRs, waiters take orders, serve beverages and meals, present the check,and process payment. FSRs include casual dining (full bar); family dining(limited bar); and fine dining establishments.Annual sales average $860,000 for FSRs.An FSR’s square footage and the number of seats and tables dictate howmany patrons it can serve (also known as table turns or covers) directlyaffects sales. Because the restaurant industry is highly competitive, site
selection is critical: companies may consider population density, householdincome, competition, visibility, accessibility, and traffic.Companies carefully manage inventory of perishable food products, such asfresh seafood and dairy goods, to reduce losses due to spoilage.Computerized information systems can improve and link food preparationand serving operations. Touch screen ordering programs ensure accuratecommunication of customer orders. Timing systems monitor meal progressand can alert staff if an order is running behind schedule. Reservationsprograms maximize traffic flow and seating. Inventory management systemstrack supply levels and can help reduce waste due to spoilage. Costaccounting programs help companies determine the profitability ofindividual menu items. Handheld point-of-sale (POS) devices allow servers to

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Term
Fall
Professor
N/A
Tags
Marketing, Revenue, Chain store

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