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Chapter 4Understanding the

Restaurant IndustryHospitality Today: An Introduction

Sixth Edition

(103TXT or 103CIN)

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Competencies forUnderstanding the Restaurant Industry

1. Describe in general terms the size of the restaurant industry, list restaurant industry segments, and describe eating and drinking places.

2. Describe food service outlets in lodging operations; the transportation, recreational, business and industry, educational, health care, and retail food service markets; corrections and military food service; and contract food management companies.

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3. Summarize some of the pitfalls of starting a new restaurant, cite reasons restaurants may fail, and outline some of the issues involved in starting a new restaurant, such as developing a concept, selecting a site, and having a feasibility study done.

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Competencies forUnderstanding the Restaurant Industry

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Restaurant Industry Segments • Eating and drinking places• Lodging operations• Transportation market• Recreational market• Business and industry market• Educational market• Health care market• Retail market• Corrections food service• Military food service• Contractors

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Full-Service Restaurants

• PriceLuxury, high-priced, mid-priced, low-priced

• MenuSteak and seafood houses, ethnic, regional, vegetarian

• AtmosphereResult of architecture, decor, and setting

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Quick-Service Restaurants

• Narrow selection of food

• Focus on convenience—speedy preparation and delivery

• Limited service

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Why Restaurants Fail

• Lack of business knowledge

• Lack of technical knowledge

• Lack of sufficient working capital