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Have you ever owned or helped run a restaurant?
Topic Started: Jan 10 2008, 04:47 PM (554 Views)
CrashTest
Pisa-Carp
I am curious just how profitable restaurants are. There seem to be many obstacles, especially dealing with overhead and competition - but a lot of people seem to make it work.

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apple
one of the angels
i actually did own a small one.

a difficult row to how
it behooves me to behold
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George K
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Finally
Don't most privately owned restaurants fail in the first couple of years? Lot of hard work, little reward with high risk of failure. Sounds like the woman(tm) saga all over again.
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John D'Oh
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MAMIL
George K
Jan 10 2008, 08:26 PM
Don't most privately owned restaurants fail in the first couple of years? Lot of hard work, little reward with high risk of failure. Sounds like the woman(tm) saga all over again.

A difficult ho' to know.
What do you mean "we", have you got a mouse in your pocket?
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CrashTest
Pisa-Carp
Oh, the woman™. ;o

It seems like restaurants do have high risk. On the other hand, some of them seem to do very well - like the Italian ones.
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apple
one of the angels
i've helped run quite a few.

lots and lots of work and quite dirty too.
it behooves me to behold
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Larry
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Mmmmmmm, pie!
Why the sudden interest in restaurants, Crash - have you taken a job at McDonalds?

Of the Pokatwat Tribe

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Frank_W
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Resident Misanthrope
McJob... And yeah, I want some f'ckin' fries with that!!
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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DivaDeb
HOLY CARP!!!
enough with the burger jokes

yes, we own and operate restaurants. Prior to buying the drive-ins, my husband was in fine dining management. Burgers have been very good to me

:lol:
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Mikhailoh
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If you want trouble, find yourself a redhead
Sonic rocks.

Crash, the way to make a small fortune in the restaurant business is to start with a large one. You really should have a proven system, like Deb's Sonic franchise stores, or have a LOT of experience and capitalization. Plus a burning desire to run a restaurant.

I ran a deli for Iranian friends in San Diego at the height of the Iranian hostage crisis. They wanted to keep pretty low profile in a military town. It is a LOT of work.



Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Riley
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HOLY CARP!!!
George K
Jan 10 2008, 08:26 PM
Don't most privately owned restaurants fail in the first couple of years?

Franchising is probably a lot safer. Or even a privately owned pizza joint, which usually seem to do well.
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DivaDeb
HOLY CARP!!!
Mikhailoh
Jan 10 2008, 10:47 PM
Sonic rocks.

Crash, the way to make a small fortune in the restaurant business is to start with a large one. You really should have a proven system, like Deb's Sonic franchise stores, or have a LOT of experience and capitalization. Plus a burning desire to run a restaurant.

I ran a deli for Iranian friends in San Diego at the height of the Iranian hostage crisis. They wanted to keep pretty low profile in a military town. It is a LOT of work.

that is all very true

Restaurants that fail (and there are a load of them) are those that come into being because somebody decides they want to have restaurant but are not the least bit interested in doing the grueling work it takes to run one. Do not make the mistake of thinking you can hire people who will run it...that just doesn't work. If they wanted to work that hard, they'd open their own damn restaurant. Even with several managers on board, if you aren't there with your fingers in operations most of the time, you'll fail. It's not a good hobby investment.

Don't open a restaurant for the same reason women buy purse dogs.
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David Burton
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Mikhailoh
Jan 10 2008, 07:47 PM
Deb's Sonic franchise stores

That’s it, next drive through that part of the country I must stop in to one. I’ve never had Sonics and hear they’re great.
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DivaDeb
HOLY CARP!!!
come here, David! We'll treat!
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CrashTest
Pisa-Carp
Franchising definitely adds certain benefits. Do you ever feel it limits your own stamp on the restaurant, though? Do you rely mostly on the brand name to bring in the customers?

I know that competition is fierce. Heck, take most Italian restaurants - just where I live there are literally a handful to choose from within close distance. So you need to attract your repeat customers with quality food, and good value - or else they will just go elsewhere.

The price of food seems reasonable - so the question becomes attracting repeat customers and making it unique.
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DivaDeb
HOLY CARP!!!
Unique isn't necessary for success. When people return to a restaurant, they do so because they want a similar experience (not the same menu item necessarily, but in some cases that is exactly what they want). Good franchises do limit too much individuality because when customers frequent a franchised business, they know what they want 95 percent of the time. If you individualize the brand identity away, you lose their business, not just for one store, but for the chain.

If you want to do unique, be prepared to lose, no matter how good your concept is, or your food. Some, but very few, new single unit restaurants succeed and it really doesn't have that much to do with quality. Mom and Pop kind of places do a little better than the upscale attempts, but not that much better. It is a very high risk business. Before embarking on anything of this sort, a tremendous amount of time/bucks should be devoted to ascertaining what the market will bear in the area you're considering. You may have the greatest idea that's ever been, but if the demographic is wrong, you're screwed. A word of advice...be prepared to lose money for at least 5 years, possibly longer if you want to hang around instead of folding (as most do) before their business has a chance to get established. Between rent, advertising, salaried employees, hourly crew, equipment/overhead, taxes and licenses, you'll do VERY well to break even at that point. Count on another half decade before you make a consistent profit.

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CrashTest
Pisa-Carp
Deb, that is very interesting.

When you run a franchise, how is your communication with the headquarter office? Do they issue standards and changes frequently, keep in close contact, etc?
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sue
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HOLY CARP!!!
DivaDeb
Jan 11 2008, 10:57 AM
A word of advice...be prepared to lose money for at least 5 years, possibly longer if you want to hang around instead of folding (as most do) before their business has a chance to get established. Between rent, advertising, salaried employees, hourly crew, equipment/overhead, taxes and licenses, you'll do VERY well to break even at that point. Count on another half decade before you make a consistent profit.

We used to say you will lose money for a minimum of 2 years, back when I studied restaurant management in the 70's. I suspect your 5 years is more accurate now.

Be prepared to lose money, have no life outside of work, stress coming out of your eyeballs. Oh, and forget about weekends off, vacations, etc. Maybe after 5 years or so, if you make a go of it.
Not a career decision to be made without a lot of research (as Deb says) and soul searching.
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Mikhailoh
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If you want trouble, find yourself a redhead
And an independent source of income.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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CrashTest
Pisa-Carp
Isn't there way to bypass the common pitfalls of restaurants? Surely there must be some new ventures that are successful - what if you hire the correct people to help organize and manage?
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Frank_W
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Resident Misanthrope
The other famous saying, when running things:
"Good help is hard to find."
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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sue
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HOLY CARP!!!
CrashTest
Jan 11 2008, 12:33 PM
Isn't there way to bypass the common pitfalls of restaurants? Surely there must be some new ventures that are successful - what if you hire the correct people to help organize and manage?

Sure, and good luck with that. But the 'correct' people, those who know what they're doing, and care about what they're doing, are most likely already in a position; in a position where they know for sure they'll be getting their paycheques on time, and not dealing with a stressed out newbie owner.
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TomK
HOLY CARP!!!
I am trying to put a Howard Johnson's Restaurant coupled with a Howard Johnson's Motel (Two separate companies for years,) up in International Drive in Orlando. I want it to be kind of a mini-nostalgia kind of place.

Unfortunately The La Mancha Group, which owns the rights to the restaurant (there are only, I think, two left) are real pains to deal with--and the project is on hold.
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Frank_W
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Resident Misanthrope
Maybe you could build one out of Legos first, and make your little Lego people go in and out of it, to see how you like it. :)
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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CrashTest
Pisa-Carp
Frank, everything I do is done in Legos first. In fact I had sex with a Lego train before I had my first woman.
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