I work as an independent consultant and one of my recent projects was a study on the fast-casual restaurant industry on behalf of a long/short investor. It's a fascinating industry, and a bit depressing to learn about in depth (kind of like reading this article).
The basic business model of all franchised restaurants with fixed menus and nationalized marketing budgets is getting people in the doors with something appealing (e.g. a value meal) and then get them to buy high-margin products (i.e. coffee, soft drinks, french fries, and food items that don't contain vegetables or meat).
One thing I think most people don't realize is how much the house loses money when you go in there and buy the healthy stuff. At QSRs from McDonald's to Panera the cost of delivering a salad to the customer exceeds the salad's price. If you're a starving entrepreneur and you can be disciplined about shopping for value, the healthy stuff at QSRs might be your best bet on a daily basis.
> Is this mostly due to the higher cost of fresh ingredients, or the additional labor required to assemble them?
Both. On ingredient cost alone, restaurants will analyze across multiple dimensions: the per-unit pure cost (e.g., the wholesale price of a head of lettuce), transportation cost, storage cost, and spoilage rate (lots of interesting volatility modeling done on this).
Salads are profitable for QSRs in a broader sense -- they're loss leaders.
QSRs are happy when the customer comes in to buy a $5.59 salad that costs them $5.85 to make, because the customer also usually buys another product that has great margin, e.g., a $1.79 drink that costs the restaurant $0.20.
This matched my anecdotal experience. I find a Chipotle burrito bowl, the way I "construct" it (1), to be fairly healthy and a relative bargain. I order it with a glass of water (into which I can squeeze a "free" lime wedge, if I choose).
I guess I'm being subsidized particularly by all the families whose kids insist on sodas.
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1) And as I understand it, this is another popular aspect of modern dining: The ability to "construct" the order you "want". I think I've read that, although I don't know all of the financial ramifications, from the industry's perspective.
The “construction” is a cost optimization pioneered by Benihana. Instead of having 12 menu items based on 12 different ingredients, which would end up with more wastage at the end of the day (or running out of product if you kept smaller inventories), you provide 12 menu items by combining one of 3 choices with one of 4 choices. Boom, you’re only inventorying 7 items now.
Years ago, my wife’s friend who was the marketing director of a regional chain of family friendly restaurants told us about a few menu positioning tactics that are used to maximize revenue. The one I still remember is the item on the first inside page on the top right corner is the item with the highest margin, usually pasta. The reasoning for the placement is that people who didn’t have a strong preference for what they wanted would scan the entire menu and then return to the beginning of the menu and get “stuck” in the corner on their second pass. I’m not sure if this is based in any research but it’s a fun thing to look for when you are out to eat.
You are 100% correct and there is plenty of "science" that goes into it.
It is similar to how a person reads a website[0][1], in an F pattern; The most important information should be top right, with lower importance being down below.
Also, all hier tier items (think steak/shrimp) are always near the middle of the menu, to "sandwich" them between items that are more cost conscious in order to downplay the price difference.
I worked for a large restaurant retailer in the corporate office. It's a mistake to call it a restaurant company. These companies are marketing companies and marketing drives everthing. Even to the detriment of operations and efficiency.
> These companies are marketing companies and marketing drives everything.
This is a huge problem with our society. Marketing is important, but when it takes over it destroys companies, people and eventually society itself.
We see it with restaurants. Once, a restaurant was simply a place which served food; now it's a brand, an experience, a carefully-crafted image which imparts all the right feelings but only some of the substance — if any.
We see it with food. The produce we buy isn't the healthiest or the most nutritious: it's what looks healthiest & most nutritious, by metrics which no longer come close to making sense (e.g. the redness of a tomato doesn't signify ripeness in a world with artificial pseudo-ripening, and the shininess of an apple is meaningless in a world with vegetable wax).
We see it with relationships, with entertainment, with hardware (c.f. speculative execution & caching), with software (c.f. shiny effects), with political parties, with 'news' — in a word, everything. Our world is being destroyed by marketing, by appearance with no substance to back it up.
I can only identify the problem; I don't know what the solution is.
>“Asian food no longer has a health halo merely by existing,” the manager explained as I cleared away plates of mangled spring rolls. “The once ‘healthy’ perceptions of brown rice and lettuce cups aren’t believable anymore. Today, guests are linking health to nutrient density. Ancient grains. Avocado. Micro-greens.”
The experts' domain here is not what is actually healthy. Actual health doesn't even enter consideration. It's what "guests" are "linking" with health, that is, only perception matters because the operational goal is personal profit above doing right. Our food industry at large is suffering from a total preoccupation with orthogonal concerns, of which our insane food culture is the natural consequence.
Michael Pollam has written about this extensively... the proliferation of "magic ingredients" that confer "healthy" status on the same old food. "Ancient grains" are just starch. Omega-3 fatty acids are just oil. Etc. The fashion changes, but the structure stays the same.
Chain restaurant food relies on year-round availability of ingredients of consistent quality (although "seasonal menus" exist, they're more about marketing than availability, the illusion of freshness again). Lots of white flour, vegetable oil, refined sugar, factory-farmed meats. Restaurants are more factory than art. Raw ingredients go in, get turned to finished products and sold on-site.
> Chain restaurant food relies on year-round availability of ingredients of consistent quality (although "seasonal menus" exist, they're more about marketing than availability, the illusion of freshness again)
Yep. The yearly appearance of the mcrib and its huge marketing push tracks the price of pork futures. McDonalds is a commodities trader as much as it is anything else.
My mind jumps to something Budweiser did, after being purchased by InBev. Their recipe uses a particular hops from a unique valley in Germany. Under InBev, they suddenly declared they had enough of these hops, and wouldn't buy any more for a year. This crushed farmers in that valley, of course... and then Budweiser could negotiate for better prices with the survivors a year later.
Get off Facebook, stop eating at chain restaurants, stop buying branded clothes at national retailers, so on and so on, and encourage family and friends to do the same. Think you can’t make a difference? If as white-collar, voting, monied professionals we can’t alter the landscape with our spending habits… then use our entrepreneurial abilities to create businesses that are the antithesis of these trends.
Looking too far into this issue depresses me so much that it's hard for me to talk about without getting emotional.
Consider an easy recipe for a tasty lunch- bread, cheese, tomato, mustard. In the US, buying these ingredients off the shelf of a major grocery store and assembling a sandwich results in a disgusting combination.
These are four ingredients that should be delicious- and yet you have to hunt to find edible versions of each of these items and often pay wildly high prices. Store-bought tomatoes taste like water. Even the artisan bakery sections yield bitter, preservative-laden bread. Mustard is created in vats to maximize shelf life instead of quality. If you don't know how to find artisan cheese, you're stuck with plastic garbage. But the sandwich will look* incredible, like the platonic ideal of a sandwich.
This trend of cheap, attractive food is trickling up even into restaurants. I just moved to Houston, and with every new restaurant I go to I become more and more frustrated with the bland, uninspiring food even at local "hot spots". I've seen the most beautiful, awe-inspiring sushi, tacos, and burgers- all that taste like nothing.
The only places that remain safe are immigrant-run foreign grocery stores, most of which who will go out of business in the next two decades as their owners die, and their kids go into fields that actually generate money.
*Emotional because of how the basic pleasures of existing are continually sold out in order to protect the bottom line- for instance imagine living in a world with zero wilderness, in which there literally wasn't a direction you couldn't turn without seeing human influence. It's already hard to go to coastal towns and watch the waves because you'll be able to see the giant mega-hotels lit up with balcony lights.
Wow this affected me more than I'd like to admit. As an avid veggie gardener, I highly recommend growing your own veggies and baking your own bread (there are cheap bread loaf machines).
That's what I'm planning on. I almost cried (okay, that's hyperbole) the first time I grew tomatoes in my backyard in college. If I wasn't in an apartment right now I'd have planted already.
While I agree with the gist of your comment, most restaurants have never been "simply a place which served food." They've always been about the experience, excepting maybe cafeterias which are purely functional food delivery facilities.
A taco/hot dog stand is a deliberate choice wrt to the food delivery experience, i.e., informal and on-the-go. Steakhouses have always presented themselves as more formal dining options. (This includes Sizzlers! In rural areas, chains like Sizzlers have the same cachet that Mastro's or Ruth's Chris has in a big city.)
Wow, quite a long-distance abstraction. Kinda blew my mind. From restaurants to relationships and speculative execution.
It’s all about the looks, indeed.
One thing that maybe fits with this is the societal hierarchy of our senses.
Seeing is somehow assumed to be much more objective than hearing, touching, smelling, and tasting.
If you have very good hearing you might have found yourself in situations where you perceive an unpleasant noise that’s below other people’s thresholds and then it’s not too uncommon to be seen as a bit of a loony if you bring it up.
Smelling is the most subtle, instinctive and animal-like sense. Usually people are very polite there and in our current time it’s the norm to not say anything even if e.g. someone emits strong body odor that’s actively bothering the environment.
Vision however is thought to be objective.
Photography. Pic or it didn’t happen.
If object classifier checks out, it’s legit. (What else could there be?!)
Digital image just like retinal image, right!?
So if you get what looks desirable (that shiny tomato or that pretty partner), you have it, you have made it. You don’t have to doubt anything because you saw similar images a thousand times in contexts that clearly said “this is desirable”.
A lot comes down to how well our associative brains work with visual stimuli.
The way out of this IMHO is to stand up and build confidence and trust in your senses. If something tastes off, treat it of same significance as if that steak was suddenly of green-blue color. That would be alarming. It’s probably fine, maybe these veggies are just lacking in taste, so not dangerous but unsatisfying. If you need acting inspiration, watch that scene from Mulholland Drive where the Italian guy doesn’t quite like his espresso.
And regarding trends, the tomatoes in Europe have gotten a lot better in the last decade, particularly in the last five years and that’s largely due to Dutch farmers starting to focus on producing strains with a lot of aroma. It started off as a more pricy premium option but now they’re affordable and available all year-round.
It's all a simulation. The chain restaurant's food is a simulacra of food; a collection of symbols with associations to food, the symbols targeted directly rather than via what they're supposed to signify. Baudrillard put his finger on this pretty well.
In fact, a lot of marketing dollars are spent advertising the things you seem to cherish. Organic food, healthy food, fitness, health — they're multi-billion dollar industries, with multi-billion dollar advertising budgets.
This is also the case for the majority of businesses that produce consumer goods these days. Companies are now purely design and marketing shops (for example, any company involved with sporting goods). Engineering, manufacturing, materials, warehousing, the "boring" parts...all farmed out with added markup.
Yes. So much of our economy is driven by marketing. Many of the smartest young people in our economy used to go to Wall Street, now many get MBAs and go into marketing.
Same thing with Google, Facebook - marketing and advertising control our economy. (And the danger western democracies face: It’s a natural switch from marketing to political influencing. Tools and methods are the same and the same infrastructure can be used.)
You do realize that engineers make much more then marketers as a rule, right? Marketing careers start at like 30k a year and are competitive. You can make a lot of money later in your career if you're good at it, but same is true for engineers.
I don't think it's about the political system so much as the economic system.
Any economic system is an attempt to solve the core problem of how to best distribute resources to consumers of resources. But what happens at the point when ideal distribution is attained, and all consumers are satisfied? If the economy just shut down, it would be a social disaster, so instead it enters this kind of degenerate state you mention where marketing and advertising predominate over production and distribution. Like a star going supernova- all the useful fuel is burned up, but we must sustain the reaction somehow, so we have to turn to heavier and heavier elements.
There is an upside to this, actually order the money losing items at fast casual restaurants etc and it's a great deal.
PS: Also, look for companies that defect from the marketing game which allows them to sell very high quality products for cheap. Think store brand items etc.
> But what happens at the point when ideal distribution is attained, and all consumers are satisfied?
I don't think we are anywhere close that, nor that we can ever get there. What happened is that most low-hanging fruits of actual value got picked, to the point that sales & marketing started to have much better ROI than trying to invent and build better things. It's a gradual shift towards a zero-sum-game economy.
The reason we can't ever totally satisfy consumer demand is because of marketing itself. As much as the profession likes to pretend it's about informing consumers of available choices in a free market, it is more fundamentally about creating demand. If we had spent the last two centuries fulfilling the consumer demands of 1818 consumers, we'd have been "done" decades ago, worldwide, if not sooner. Instead, before we ever get to the "demand satisfied" state, our demands are manipulated by marketeers so that we never reach this equilibrium.
It's absolutely based on research, and franchised restaurants have been at the forefront of figuring a lot of stuff out.
Ever notice how the price of an individual hamburger or cheeseburger is nearly impossible to find on the McDonald's drive thru menu? That's because they want you to buy a value menu where they're making ~70% fully costed margin on the fries and north of 90% on the soda.
National level chains were mercilessly A/B testing different menu configurations for both average order size and average order margin a long time ago, way before it was cool.
There are companies that do face and eye tracking on large menu displays. They can AB test new menus or layouts quickly, on the fly during the day, at different locations. They can recognize customer demographic (maybe even individuals now), what they look at and for how long, and then tie that to what they buy.
Think bigger. Like all menus at all McDonald's, each individually addressable. They probably have a marketing command center where they run experiments on all kinds of things.
I see the results of these consultant-driven places everywhere and, everywhere it’s like they all used the same consultant in a dire bid for relevance. It’s poke-this, quinoa that, avocado toast with a side of “authentic” matcha.
The hell with it. Give me a “voice” — do something with your food. Don’t Kardashianize every damned item.
An example of someone I feel that is doing it right is a guy in Houston named Russell Ybarra. He just started his latest place called Burger Libre — and it wasn’t consultant driven, it was driven by his decades of success with his Gringo’s chain in Houston. The “consultants” are his friends and employees along with actually knowing how to make a restaurant succeed.
Tillman Fertitta is another guy who uses years of experience to create great chain experiences.
The restaurant business is filled with people that have more money than sense. It’s obviously about the food, but it’s about having something to say with the food and experience — and that voice rarely comes from consultants that travel to 20 restaurants in 2 days looking for insight.
The same could be said about startups. Want to make money? Don’t chase yoga pants. Yoga pants follow, they rarely lead. If you are duplicating what’s working with the yoga pants crowd, you are already 5 steps behind.
“Don’t skate to where the puck is, but where it’s going. — Wayne Gretzky” — Michael Scott.
>The restaurant business is filled with people that have more money than sense.
This. Speaking with my decade of experience within the Industry.
Seriously, forget about Menu placement, settings, services, etc... The first thing a restaurant should worry about is the quality AND consistency of their food.
Not saying others not important, but they are not "First". Location , services etc... these can only buy you time until you fix your "First"problem. Gordon Ramsay's Kitchen Nightmares are not just reality shows, they are what is happening around the Real world, and not just in US.
I am also, baffled, by how little most restaurant owners knows about their food. Different type of Beef, poultry, different cuts, brand of French Fries, types, type of sources etc.
Edit: I should have written something in the Startup idea thread two days ago.
I’m sure those guys’ consulting firms will be delighted that you have been convinced of the ‘authenticity’, ‘independence’, and ‘personality’ that they carefully helped their clients craft based on their mood boards and focus groups :)
I don't know where it's like where you are, but around here, there's a dozen established eateries, and corners of strip malls that get new restaurants every 8 months or so. There's gotta be a solid profit in selling loans to people who have a dream of owning a restaurant (or bar, or eatery, or whatever), but haven't the faintest clue how to run the business.
The statistics thrown around are 75-80% of new restaurants won't last the first two years.[1]
That day want terribly surprise me, as I spent a sizeable portion of my career travelling around fixing restaurants.
Biggest issue I've seen is people creating a restaurant because they think it will be fun, or high profit margin. (Spoiler: it is neither).
(Source: chef for 18 years).
[1] I don't have a source to back this up, it's just been repeated so many damn times. I think it would be closer to 60-70%
Quite possibly the complete opposite. Especially when today's asset / property prices are being pushed up to a ridiculous level by QE, rent eats into profits, And most restaurants owner I know has thin profits margin and lots of long hours working.
>The statistics thrown around are 75-80% of new restaurants won't last the first two years.
I guess it depends on location, but 50%+ of new restaurants changes hand within the first 3 years.
The standard costing for a restaurant meal is 25% food cost.
It approx breaks down as:
.25 food cost
.25 staff cost
.25 rent and gas/elec etc
.25 profit.
That's not real world though, that last .25 is going to be eaten into. I personally prefer to try and run at .21 - .22
It may seem like an awfully unbalanced profit margin, (in relation to me saying low profit margin), but you need to add in wastage on top of this, both due to staff error(eg keeping by too much stock on hand), unexpected quiet periods or even supplier sending lower quality produce. There's also the matter of variable prices for ingredients as well.
This is one of the biggest things I had to drill into clients, it's not just about making good food and slapping a fee on top, it's a strict regieme of training, control and excellent book keeping on top of a passion for food and a desire to make people happy.
As to your last paragraph, I believe that's covered by closing, I should have clarified on that point, my apologies
Interesting. When I first got into the industry, knowledge pass down to me as 30% Food Cost, 30% Staff, 30% Rent / Electrics, and 10% Profits. Again this differ from places, City and non City restaurants. And This is mostly in Asia, HK, Taiwan and China. ( Not Japan )
When I left the industry, Food Cost are now pushing down close to 20%. Staff Cost and Rent made up of nearly 70%. With Rental taken nearly 40%. Since Staff Cost, and Rent are mostly fix cost, the only way they could improve Revenue was to becomes fast food alike, i.e faster table turnover. ( A trend I really dislike )
>This is one of the biggest things I had to drill into clients, it's not just about making good food and slapping a fee on top, it's a strict regieme of training, control and excellent book keeping on top of a passion for food and a desire to make people happy.
This. So Much.
I still wanted to get back into Food and Hospitality business someday. I think Food is a topics that connects with everyone. And I still think there is lot of innovation and tech could help with the industry, it is rather unfortunate no one is taking a look into it.
VC is equity not debt, and very very few restaurants raise money via equity.
Often they'll take out large loans secured on both house and business, along with a chunk of their own (or investor/friends) money to get things started. The lenders get to stick nice chunky rates on the whole thing and generally have limited downside because collateral.
I don't mean to imply the banks are doing anything wrong, just that the business model is based on managed downside rather than "striking it rich"
Correct, but I would say it's next to impossible to find a VC who treats a SAFE/Convertible Note as debt. Nobody wants it paid off, the VC will always choose to convert to equity because that is the VC's model.
> it’s like they all used the same consultant in a dire bid for relevance.
I have a friend who works at a big management consulting firm and he told me that one of the partners built his practice/client base around optimizing menus for these big chain restaurants. It's apparently been very lucrative, so I think you're right that in many cases they are using the same consultant.
> For every perfect, client-ready pizza, there were at least six that missed the mark— ... pepperoni that curled when cast in the oven, pockmarking the pie with tiny buckets of grease.
Ummm, that's a feature, not a bug. Right? best pepperoni is the curled up kind as far as I'm concerned.
After reading that passage in the article, I thought maybe I’m misremembering - weren’t cupped pepperoni the superior?
And then, when it got to the passage about “truffle oil” being “craveable” I stopped doubting myself. Truffle oil is synthetic garbage used to sucker people unaware of the non-relationship between truffles and “truffle oil.”
Now I just can’t figure out whether this is a fast food consultancy that knows nothing about actual food (which would be ironic, but not surprising), or whether they know about food, and this is pure cynicism on their part regarding the public’s taste in food.
I'm aware that truffle oil is synthetic, but I like it anyway. True truffle flavor isn't soluble in oil. To get the same strength of flavor with real truffles would be too expensive for me.
Truffle oil is like wonderbread. If you can afford the good stuff, you can look down your nose at it. But I'm glad both exist.
> Truffle oil is synthetic garbage used to sucker people unaware of the non-relationship between truffles and “truffle oil.”
I've had real truffle oil in Croatia and it is absolutely divine. A far cry from the synthetic stuff, which I can now smell a mile off. The real deal is incredibly expensive, mind.
I suppose I just wanted to point out that not all truffle oil is garbage, although perhaps in the US the real stuff is vanishingly rare.
> I've had real truffle oil in Croatia and it is absolutely divine. A far cry from the synthetic stuff, which I can now smell a mile off. The real deal is incredibly expensive, mind.
There is no such thing as real truffle oil: take real truffles, put them in olive oil, the olive oil is going to just coat them and not extract anything. 2,4-Dithiapentane needs to be added anyway.
Real or not, if you give me a quinoa salad next to some truffle oil mac & cheese, the truffle oil is going to ruin whatever you tried to get me to taste in the quinoa salad. It would be like drinking wine with a chili dog.
Interesting a guy in the UK planted a forest a ten years ago to start production of Perigord truffles - after ten years is first harvest was 25 Truffles.
Olive oil is oil from olives, with marketing playing up differences between brands for the sake of price stratification.
Truffle Oil is olive oil with synthetic flavor and perfume added, to make people think it's somehow related to truffles. Real truffle oil isn't a thing: truffles are consumed shaved into food like a hard cheese, generally, and their flavors don't infuse oil well at all. Marketing here isn't about making some truffle oil look better than others; it plays the role of making people believe that truffle oil is a thing at all.
Not the same issue. Similar in that marketing misleads the consumer. Different in that true truffle oil (without the synthetic ingredients) would not taste like truffles. Truffles are generally kept dry and then shaved onto your food, kind of like Parmesan cheese.
I'd second this! I'm very much into making pan pizza at home, and I totally love when the pepperoni pieces get just a little crispy and curled up at the edges. This (as well as the cheese color) tells me when it's time to fetch the pizza from the oven.
But maybe that's just the commonly agreed ideal for pan pizza. The article was about New York style pizza, after all.
and here I remember pizza where the pepperoni is put on after the pizza is baked as there is sufficient time for it to "cook" from oven to presentation or boxing without it curling or leaving grease behind
A related video from Dan Jurafsky where his team analyzed the words in 6500 menus and found correlations of adjectives & nouns used by the cheap vs expensive restaurants.[1]
(Or put another way... imagine this thread's "menu design" story being multiplied 6500 times and DJ researchers analyze the output of those consultations -- the 6500 menus. The corpus reveals some interesting repeating text patterns.)
To apply DJ's findings, we notice that the author India Mandelkern writes:
>Back at the office, our team pooled our observations on multicolored sticky notes that we stuck to a giant whiteboard. “Dishes have no freshness cues.”
We assume this results in a Pei Wei menu[2] with these excerpts (and with particular words _underscored_):
>Then we wok-sear it in our _delectable_ orange sauce and finish it with _fresh_ orange slices
>our Wei Better Orange Chicken and Wei Veggie Orange Chicken are made with _fresh_, not frozen chicken,
According to DJ, the expensive restaurants would not use words like "delectable" and "fresh".
I learned the concept of counter-signalling from that video
"Contrary to this standard implication, high types sometimes avoid the signals that should separate them from lower types, while intermediate types often appear the most anxious to send the “right” signals. The nouveau riche flaunt their wealth, but the old rich scorn such gauche displays. Minor officials prove their status with petty displays of authority, while the truly powerful show
their strength through gestures of magnanimity. People of average education show off the studied regularity of their script, but the well educated often scribble illegibly. Mediocre students answer a teacher’s easy questions, but the best students are embarrassed to prove their knowledge of trivial points. Acquaintances show their good intentions by politely ignoring one’s flaws, while close friends show intimacy by teasingly highlighting them. People of moderate ability seek formal credentials to impress employers and society, but the talented often downplay their credentials
even if they have bothered to obtain them. A person of average reputation defensively refutes accusations against his character, while a highly respected person finds it demeaning to dignify accusations with a response."
I've gone darker than that. I've argued that the obsession with "self-defense" firearms is kind of like a lottery ticket. You don't buy a lottery ticket to get rich. You buy it to fantasize about getting rich. Likewise, you don't buy a gun to defend yourself. You buy a gun to fantasize about defending yourself - to shoot some bad guy and be called a hero for it, rather than a murderer.
One of the first jobs I had after graduating with a culinary arts trade degree was at one of the big 5 chains of restaurants where they nail salvage items to the walls and play classic rock. After 2 years working the kitchen and bar, I can attest fully these are the equivalent of a Chuck-E-Cheez for adults.
"food" is slightly more than a step up from fast food. main course Items are delivered frozen and reconstituted in a high speed sous vide system. Fries or any fried finger food are frozen, and depending on the franchise owner there is a specified hold time of up to 2 hours. My location ignored this because 'we sell so much food!' when in reality we're ignoring it because wastage is logged and reported to corporate and the franchise owner wasnt interested in lectures from the suits.
Other items like specials and anything that read 'grill' was placed in one of four high speed commercial microwaves, then sent to a 'finisher' which resembled a grill but simply imparted the markings on the food in about 20 seconds. Hamburgers didnt receive this treatment as they arrived fully cooked in many cases, with the exception of the angus burger, which was one of 2 items on the menu that was actually thawed and cooked on a real grill.
The bar isnt operated on a razor-thin margin of profit, its just flat out greed. items are chosen for hold time and markup. Frozen margaritas/anything can be held for up to 2 weeks, as the mix from corporate is largely preservatives. distributer orders do not specify a brand, only a negotiated price for a specific liquor. Beer provided almost for free, as corporate aggressively negotiates the terms and in some cases, owns major stake in distributors. all poured alcohol is underpoured partly because the establishment is cheap, and partly because the only thing that can shut down these shitty chains is an alcohol violation or poor customer experience because of an 'over-service event' at the bar. they just reopen in a week 'under new management' anyhow.
If you're wondering how franchise owners play into the restaurant, theyre basically nonexistent. Our franchise owners only visible presence was a plaque on the wall with their names, and occasional half-hearted sentiments from the managers on things the owners would like us to do which were basically restatements of what corporate wanted us to do. It wasnt until my last year of employment when I learned they were in their early eighties, and confined to a nursing home somewhere out of state. Power of attorney rested with their son, who had been in and out of drug treatment programs somewhere in california. We were eventually purchased as a franchise package by a venture holdings company in chicago.
The New York area is full of diners with enormous menus that are not chains. Quality varies highly (and often not correlated with price), but I believe it's mostly made in-house.
Made in-house in the sense of thawed and microwaved in-house. I learned quickly to stick with the handful of items that are eaten frequently. Everything else tastes like it came off the assembly line a few months ago.
Restaurants that focus on quality frequently change the menu, very often following the seasonality of their ingredients (asparagus season, etc).
Same can be seen in high-quality fashion. A new collection every season, comprised of a few well crafted items.
And don't get me wrong, I have no qualms with fast food. I find it just interesting how few have bothered to look behind the curtain given all the cooking shows, books, etc. Bourdain's Kitchen Confidential came out ages ago.
More items means larger learning curve for actual cooking. If you make 5 things then you can quickly and cheaply teach someone to do that well, make 500 things and that's not going to happen. With a large menu each step must be simple and easy to follow based on step by step instructions.
The article mentions Applebee's and that made me think of Chili's. I remember in the late '90s going Chili's somewhat regularly and always being happy with the food and service.
On a whim, we went to a new Chili's about a year ago and nothing was very good. Anything that wasn't deep fried was microwaved. It made me wonder if my tastes had changed over the past 20 years or if Chili's changed their processes. Is this the result of relying on consultants?
Everything changed. We're not the generation they're catering to any more? An upbringing of burgers and fried food has brought a new generation to restaurants.
I want to believe that said generation, if they really are into burgers and such as much, would gravitate towards higher quality products, but I guess convenience, lack of competition / options, familiarity, and probably most importantly, cost would stop anyone from making it in that area.
Maybe 'quality' is in the eye of the beholder. Really good, boutique burgers are quite tasty. And you can fry food badly or well. There's room for it all in a good restaurant.
The other possibility is that they're badly managed. They didn't figure out a way to measure food quality and therefore chased a local optima, ignoring an important dimension.
Evidence for this hypothesis is that many branches of these chains are closing and several chains are nearing bankruptcy.
The biggest take away (no pun intended) I got from this article is that the owner was cluless and the chef was non existent.
Where I come from, the chef designs, costs and impliments the menu. If I, or the theorical they, don't draw customers or sufficient funds to cover the business they are out on their arse.
For a chain, there needs to be an executive chef whose sole job is to cost, oversee each location, ensure quality standards are being kept, use the fact that the restaurant is order x amount more than anyone else to get a better price from suppliers and make sure everything is running at cost (our next cinname in the industry is bean counters for a reason haha).
This sounds to me like the owner got in way over their head.
Working in the hospitality field for half my life, I can attest to this article. Its really on point (company I work for went through a similar exercise a year or so ago).
The thought that goes into menu design is spectacular but it's less science and more shooting darts in the dark; No one can predict consumer behavior but there are always "staples" that have been proven to work.
I wonder how often consultant-driven revampings like this actually succeed. I seem to remember that the show "Kitchen Nightmares" generally fails to turn around the restaurants they work with.
From personal experience: 50/50. If a brand has solid OPs, then consulting firms do wonders; Menu is only part of the equation.
If a brand has spotty OPs (poor service, lack of "energy", employees who are not engaged) then a new menu will not help them.
McDonalds, Panda Express, and Subway did not win because they had the best food; They won because they had predictable food with good OPs and understanding of trends.
A real word example: Panda Express makes sure that when their orange chicken is coming out of the kitchen, it's always in a sizzling wok. That "experience" is trained (by their OPs) from the beginning to embody the story of "hot & fresh right off the stove" feeling (from the guest).
Chipotle attempted to simulate a similar feeling with their open kitchens: sounds of knives chopping and grill sizzling provides an atmosphere that their food is fresh, regardless if its mass produced.
This wasn't by chance but heavily researched, including the sound (in decibels) of the sizzle from the guest's side.
OPs is Operations. Kinda like DevOps for development, they keep the wheels turning.
OPs are usually everything after the GM (General Manager) so the area manager (would have multiple stores), then regional manager (would have several areas) and above.
Operations also include anything that has to deal with getting product into the store like Research & Development, supply chain, or commissary.
This article is a sad reminder that the goopy atrocity that is PF Chang’s is the ONLY encounter swathes of Americans ever have with “Asian” food. What a shame.
I don't get all the sadness in these responses. Are you guys all surprised that businesses finely tune their marketing and operations in order to maximize profit, and sometimes they hire consultants to help? You wouldn't be surprised that retail clothing stores measure and optimize everything about their ops, store layout, merchandise presentation, color palette, music, the fragrance in the air. Your favorite grocery stores are carefully engineered, too, and your favorite hotels, home improvement stores, gas stations. Nobody would be surprised that these places are tweaked and optimized for profit by MBAs. But, suddenly it's shocking that your favorite restaurants are all phony too?
> “Yes,” the strategist answered. “That’s an operational solve.”
I recall several years ago 'ask' being used as a noun (which struck me as very odd, given that 'request' exists and suffices); the use of 'solve' instead of 'solution' seems equally gratuitous.
Has anyone spotted any other similar oddities in the wild? I wonder if it's a trend. One wonders if 'food' will someday just be called 'eat' (yes, there's already 'eats,' which is subtly different) or 'article' 'read.'
Reading the article itself, it's a little amusing how much of this is trend-chasing (European blazers, odd habits of speech, 'lighter, brighter, fresher') rather than trend-setting. It's a bit like a middle-aged dad trying to seem 'hip' and 'with-it.'
Incidentally, the restaurant in question appears to be Pei Wei.
>Has anyone spotted any other similar oddities in the wild? I wonder if it's a trend.
The noun-ifying of verbs and verb-ifying of nouns has been a trend in language evolution for hundreds (and possibly thousands) of years. For example, the etymology for "drink" is a verb of "to drink"[1]. A few hundred years later, it was noun-ified. (We can now say "I need a drink" -- without the language police snickering.) We just don't notice it and/or it doesn't bother us because it acquired its extra "noun" meaning before we were born.
By some quirk of human nature, we are extremely annoyed if words acquire these new extra meanings after we are born. This means the cycle repeats itself... the people living in 2018 are irritated by it but the people living in year 2130 won't care. (To the world: Please stop changing the language and keep all meanings+spellings+pronunciations static while I'm still alive!)
The line from the old Hobbit movie of "you're the burglar, go in there and burgle something" was quaint enough that I still remember it from my childhood.
The minor fascination with noun-er & noun was probably why.
'ask' is a noun in finance because 'bid-ask' is one of the most commonly used noun pairs to represent both sides of the market. As for why it's not 'bid-request', probably because request has an extra syllable—one too many for trading pit jargon.
I'd wager that a lot of unusual vocabulary uses come from jargon where the requirements are different. There's plenty of that in software engineering too:
1. You 'ls' a directory, not 'list' it
2. 'Ack' packets instead of 'acknowledgement'
3. 'Build' as a noun instead of a more idiomatic gerund like 'building', presumably since it would get confused with the more common 'building' as a structure.
4. 'malloc' instead of 'memory allocation', 'googling' instead of 'searching', 'ripping' (an MP3) instead of 'transcoding'
We just don't notice it because the jargon has become invisible through repeated use.
It seems like 'ask' in the financial sense is subtly different from 'request', also.
A request is commonly something you make to someone, which doesn't apply to the case of offering a sale to an open market. An ask is the thing for which you set your 'asking price', so it's almost closer to a challenge than a request - "I'll reward whoever hits price X with a share of stock".
And that subtly different meaning seems to carry over to 'ask' as a common noun. You wouldn't say "the Lunar X Prize was a huge request" because it wasn't requested of any specific group, but you might say "the Lunar X Prize was a huge ask", meaning "whoever tried to meet this bar had a very hard task".
... well, "this article is a good read" is already a timeworn collocation – according to Google, "good read" first peaked around 1920.
It's interesting. The brutalization of "ask" and "solve" into nouns is a shibboleth of the it's all just business to me crowd, just like the buzzwords on their "driven professional" LinkedIn pages. It's obnoxious.
But put that aside, and it becomes a creative exercise: what if the English language had no nouns, and we thought of the objects around us purely in terms of their functional affordances?
At a previous company, I got a rousing, multi-meeting game of “punch learnings” going. Eventually, management issued a memo that the term “learnings” should not be used in larger meetings as it was too disruptive. I felt like I had done good work.
What about "code"? In the scientific community it's used to refer to a piece of software. As in, "vector computers are good at running CFD [computational fluid-dynamics] codes" or even "I am trying to write a code to calculate foo".
I'm guessing it's gotta be something related to Fortran. Some seminal book or maybe some reference to the "coding sheets" that people would fill out to have keyed in. If your program is long, then you have multiple sheets, so maybe that's where the plural comes from?
About the verbs used as nouns, I work with a team based in China, and they do that all the time (and sometimes they used nouns as verbs). I know nothing of Mandarin but maybe it's a thing common in this language that they do uncounsciously when they speak English.
English is my second language, but ever since becoming somewhat proficient in it, I thought verbing and nouning are features of English (contrast with e.g. Polish, where while a possible and formally recognized transformation, it's still very much frowned upon).
This kind of thing drives me crazy. I've never understood the motivation behind it. The same goes for the use of the word "utilize", which in my experience, serves no purpose other than to make the author sound like a poser.
The motivation behind it is that this is where new words come from. Two words which start out with similar meaning can acquire nuance over time, which increases the subtlety and capability of the language. I don’t understand why people (often people who claim to love language and words) can be annoyed by the coinage of more words.
On one level, sure, utilize, use, and even employ are synonyms - but there is a shade to ‘utilize’ that suggests more ‘extract utility from’. It’s there more strongly when used comparatively - there’s a difference between
“How can we use Dave more?”
And
“How can we utilize Dave more?”
But of course the distinction is completely absent in
“This solution uses Golang and Mongo”
Vs
“This solution utilizes Golang and Mongo”
And likewise there is a nuance of difference between an ‘ask’ and a ‘request’, or a ‘solution’ and a ‘solve’. Maybe you can’t hear it yet because these words are new and people are experimenting to find the nuance, but it will likely emerge.
I believe it to be Pei Wei as well. Their menu is dated, their food preparation & presentation is haphazard, and I always feel like I'm being hustled through my meal. It's like I'm eating at a Disney theme park.
I think they'd do better if they were to have 20% of their menu devoted to locally sourced, seasonal items. And leave the 80% for the perennial favorites (with occasional pruning).
As a counterpoint, “solve” used as a noun is very common in the cubing community though, and I don't think it's supposed to sound trendy or anything. It also sounds quite normal coming from numerical analysis domain I think.
However it does seem strange if meaning “solution” generically.
I listened to a webinar for some software, and the presenter boasted that a feature has been “up-leveled” in the new version. I thought it was embarrassing tbh. As though is not enough to “improve” things any more.
With the ask/solve thing, this is pretty much my favourite part of the English language - any noun can be used as verb, and any verb can be used as noun, while still being understood.
I had thought it was Peiwei as well but Peiwei doesn't serve korean BBQ bimibap (maybe its their newest item and I haven't seen it yet). Everything else in the story matched 100% with Peiweis decision making.
Peiwei has had some... questionable management choices in my opinion. They revamped their website not once, but twice overhauling it with a new webstack in the last 2-3 years. Everytime its been changed, its gotten significantly worse to order online. They originally had a perfectly fine site built in PHP now its in ASP.net. They had broken functionality on their chile ramen noodles for about 3-6 months which is strange because I reported the issue to corporate and it didn't get fixed.
I didn't quite understand their marketing strategy until I read this article. I remember when poke bowls were introduced. Then dandan noodles. Then thai peanut noodles (which was removed). They are trying to do everything, which never works out at the end. Peiwei has a lacking brand identity, they do everything but at an extremely mediocre level.
They just.. simply are copying the current trends. Japanese / Korean fusion used to be the hottest trend in this market. Then it shifted towards hawaiin and pokebowls. Now the current hot trend I would say is streetfare food / tapas (taiwan, singapore, and thai).
Source: I eat at peiwei maybe once a month for 3+ ish years, personally have met the owner of Panda Express, and consulted with many growing restaurant and national chains as well.
Definitely Pei Wei, I w just ate there a few nights ago. It might be that it’s in a location with a thousand authentic Asian restaurants nearby, but it’s almost always empty.
The new menu is pretty good though, I have to say. I think they’ve been using it for a few years now.
i've been a corporate consultant for roughly 20years. Last year, I started working with the biggest restaurant consulting firm in NYC, The Restaurant Company. I can tell you, one of the most honest truths I can bring to this conversation is how the world works; plain and simple. We as consumers, pay for service. and I'm not referring to the service of a waiter; the service fees associated with service. NOTHING in this world is priced at cost, price is determined by the "perceived value". Not something you should be depressed about, but just aware of, as a consumer. If you pursue to purchase things at cost, you will have to chop out a few middle men. Your vendor, your farmer and the entity you walked in to purchase the meal. Your pockets are paying for convenience, unless you have an interest and time in growing your own garden and raising a few cattle.
James Leak
Head QSR Advisor
The Restaurant Company
www.therestaurantcompany.us
I remember reading a story once about how McDonalds wanted to start introducing wraps or salads or something. The impact on the supply chain at that scale was immense.
Anyone know the name of the consulting company featured in this article? I find this kind of stuff super fascinating -- the intersection of behavioral economics, lean manufacturing, queuing theory, and food.
I don't eat out very often any more, and I really don't miss it. I get better food at home, for less money, and counting travel time, it's probably faster too.
The NYC MTA calls passengers "customers" which drives me insane. It's just.. inappropriate, even though technically subway riders are customers of the MTA.
A restaurant "is a business which prepares and serves food and drinks to customers in exchange for money."
McDonalds prepares and serves food and drinks to customers in exchange for money. This clearly makes it a restaurant. It may not be a fine-dining type of establishment, but it is a restaurant.
More pretentious is all the hipsters that look down on restaurants like McDonalds simply because it doesn't fit their narrow, preconceived notions of what a restaurant should be.
At least they're not yet so pretentious as to call it an "eatery" which seem to be the latest trend among middling restaurants trying to distinguish themselves.
One of the biggest mistakes I see at mom and pop stores is too low prices. I told the mom and pop Asian place at the local high-end mall to raise their soda can prices from $1 and I just went back and they'd raised it to $1.50. It's really the mom and pop places that would benefit the most from consulting like this.
My local Ma & Pop diner charges 2.75 for drip coffee. I just don't order it anymore. At 2.25 it was already ridiculous.
I'm a soda-holic. I never order soda at any restaurant. 100% water for the last 3 decades. The cost is too high and the quality is shit as well. McDonald's Coke is probably the worst I've ever tasted. It's been shitty since the 70s.
I'm a soda-holic. I never order soda at any restaurant.
Counterpoint. I'm a very occasional and 'casual' soda consumer, but if I'm at a restaurant and feel like a soda I'll order a soda no matter if it's $1 or $5.
So I’m not the only one who thinks McDonalds coke is foul. Coke is supposed to be fizzy, and burn a bit going down. I don’t know what the hell McDonalds does. The only thing I can drink there is unsweetened ice tea.
Counter-example: Cheesecake Factory famously has phone-book menus, but if you look carefully, you'll discover the same thirty-five ingredients* arranged in a thousand* combinations.
If you can make it work without driving up the inventory cost, then fair enough. But it's still annoying to have to go through 4 pages just to see the entire menu. I want 4-5 different plates or so to choose between for the main course. If the restaurant is any good, I'll be fine with a Fish, Cow, Chicken, Vegetarian dish, and the chef can make what is fitting for the season and current availability of produce. Some of the best meals I've had there wasn't even a choice.
I really don't go to restaurants to research the difference between 4 similar but not identical dishes. I want to pay someone to know how to make a really good meal, and make it perfectly for me.
As a chef, these are the sort of preferences we in general have as well.
My current menu is 4 entrees, 4 mains and 4 desserts(lunch changes weekly), same for dinner.
The slight variations we have are gastronomic menu (a small portion of each dish), a plates menu (set courses) or a standard pick what you want to order and pay for a full sized your probably useto.
Edit to add:
This is so that we can concentrate on the meal. Each section only creates 8 actual dishes(for lunch), 4 are off the dinner menu and are quite rare to see ordered (due to cost difference from lunch), but those 4 lunch menu items I can spend a lot of time focusing on. Yes I might send 50-100 meals in one service, but if they are the same 4, I can create something of very high quality and consistent across the entire service.
> I told the mom and pop Asian place at the local high-end mall to raise their soda can prices from $1
Did you at least try to educate these restaurant owning rubes on simple economic principles first?
This is the most annoying kind of backseat driving. Because it’s coming from someone who’s only ridden in a car and never driven.
I mean just imagine if some random customer came to your work and told you to raise your prices. Wouldn’t your immediate post-eye—roll reaction be to think, “well it’s a little more complicated than that, this person doesn’t know about...”
I recently told my donut shop that their strawberry cream cheese filled pastry was too cheap at $2. I go there occasionally, and it was such a strange mix of emotions when I dropped in and ordered my favorite and heard "$2.25" - yes, get the money, but no, not _my_ money!
I hate these people. The pessimist in me thinks it's the emergent behavior of universities convincing people they have to have a college education to be successful, which turns out millions of MBA's, who then descend on society, looking for untapped profit to optimize.
It's a position that does nothing for the customer but convince them to spend more for less.
"I hoped he didn’t sense the sarcasm in my voice. As much as I enjoyed the perks of the job (free pizza), working at the agency had been a mixed bag. I had spent nearly eight years in grad school analyzing the politics of 18th-century venison feasting, and here I was, Googling high-res images of French-fry containers before I could leave for the day."
I suspect the agency he worked for is going to hear about the article, realize who it was, and hound all his future employers about what a disloyal cad he is.
I appreciated the insights that the article offered, but it felt like a scurrilous bit of whistleblowing to me, the kind you really don't want to know about, like married CEOs sleeping with their staff.
A CEO sleeping with subordinates absolutely crosses ethical and moral lines, but it isn't rape. It's not rape unless it's rape.
There's too much depressing shit in the world to report and publicly name and shame everyone that decides to be a cad. If he crosses over from cad to monster, that's when I want to hear about it.
There are plenty of examples of freshly failed companies in the sporting goods space.
It's not the optimization so much as the "If we give them 12.5 oz instead of 16 oz, and put it in a shiny box, we won't piss them off enough to stop buying our product!"
Interesting article about what’s involved, but there doesn’t seem to be any “science” in the article. Just a combination of knowledge, experience, competitor analysis, and “see what happens”.
As a consumer of carefully-tuned journalism offerings, it’s useful to know that magazine titles are generally selected without the approval of the author and often without full consideration of the content. The title should be taken with a significant g̵r̵a̵i̵n̵ ̵o̵f̵ ̵s̵a̵l̵t̵ dash of unami.
The article itself uses the word “science” only once: it concludes with “[…] there’s no science behind the secret sauce.”
This article is mainly about the science of convincing the client on updating their menu, the tactical "telling the client what they just told you" strategy doesn't work in this field.
Next you'll have people claiming vaccines cause autism and global warming isn't real and you'll have to believe them because "it's just a combination of knowledge, experience, analysis and 'see what happens'".
In capitalism it's all about illusion. Illusion of healthy, illusion of choice, illusion of ancient, illusion of homemade. If they can sell it to you, reality doesn't even matter.
"If any subject uses two words and one of them is science, then there is no science behind it" - My maths teacher explaining the word - "political science".
At the university I studied at it was still called "Government". I suppose the "science" is to make a distinction between the "practice of" and the "study of". If you study history you are a historian, but if you study politics you are not a politician (usually), so I suppose you have pick something academic sounding.
> I was a corporate restaurant consultant. Here’s how the sausage gets made.
Didn't even make two sentences without a tired old cliché, maybe supposed to be clever because of the food connection. Sounds like a venture capitalist.
The basic business model of all franchised restaurants with fixed menus and nationalized marketing budgets is getting people in the doors with something appealing (e.g. a value meal) and then get them to buy high-margin products (i.e. coffee, soft drinks, french fries, and food items that don't contain vegetables or meat).
One thing I think most people don't realize is how much the house loses money when you go in there and buy the healthy stuff. At QSRs from McDonald's to Panera the cost of delivering a salad to the customer exceeds the salad's price. If you're a starving entrepreneur and you can be disciplined about shopping for value, the healthy stuff at QSRs might be your best bet on a daily basis.