1. CHAPTER 9

2.  TRACE THE HISTORY OF THE FOOD AND
BEVERAGE INDUSTRY.
 ENUMERATE THE DIFFERENT TYPES OF
RESTAURANTS.
 EXPLAIN THE IMPORTANCE OF FRANCHISING
TO THE RESTAURANT INDUSTRY.
 DISCUSS RESTAURANT PROFITABILITY AND
CALCULATE FOOD COST PERCENTAGE, GROSS
PROFIT AND AVERAGE GUEST CHECK.
 CALCULATE THE RESTAURANT’S BREAK-EVEN
POINT.
 EXPLAIN THE ROLE OF THE MENU IN A
RESTAURANT’S SUCCESS

3.  DIFFERENTIATE AIRLINE CATERING
FROM RESTAURANT CATERING
 DESCRIBE RESTAURANT PROMOTION

4. Early History Certain groups of people cooked
together in big groups and that the inns
provided a crude menu.
Roman Era There were some establishments which
offered sausage or roast meat, bread
and a cup of wine.
After the fall of the Roman Empire The manors and castle’s provided food
to large numbers of people.
In 1200’s Public cook shops were open in London
which offered precooked take-out food.
The Royal Families of Europe Introduced cutlery, table linen, crystal
glasses, new foods such asTurkey and
potato, and road side tavern.

5. 16th Century British inns and taverns began to serve
one meal a day at a fixed time and price
and at a common table.
The meal was known as ORDINARY and the dinning rooms were called
ORDINARIES. the most famous ordinary in London was the castle and Lloyd's
which was meeting place for merchants and ship owners
17th Century The Ordinaries became fashionable
Clubs and Gambling places as well as
centers for political activities.
19th century the word RESTAURANTS was used in
Paris for dining room serving dishes.
1834 The famous Delmonico's was opened in
NewYork.
Early 19th’s Several events were significant to the
food industry occurred.

6. 1904 First hamburger was served, at the
St.LouiseWorld’s Fair.
Roy Allen & Frank Wright Founded the first stand of root beer
Second WorldWar Brought many changes to the American
Public.
1960’s Fast food establishments merged.
At present Modern popular cuisine including
French, Chinese, Mexican and Japanese
have become common inmost cities.
The role of food plays in tourism may not a Direct an Indirect attraction.

7.  FAMILY OR COMMERCIAL RESTAURANTS
FAMILY-STYLE OR COMMERCIAL RESTAURANTS, OFFER A
WIDE MENU OF “MEAT AND POTATO” SELECTIONS
WITH A PRICE RANGETHAT APPEALSTO AN AVERAGE
FAMILY INCOME.
 COFFEE SHOPS
ARE CHARACTERIZED BY: FAST FOOD SERVICE .
CAFETERIAS ARE USSUALLY LOCATED IN A SHOPPING
CENTERS, OFFICE BUILDINGS.

8.  GOURMENT RESTAURANTS
GENERALLY REQUIRE A HIGHER INITIAL INVESTMENT
THAN OTHERTYPES OF RESTAURANTS, BECAUSETHEY
REQUIRE AN EXPENSIVE AMBENCE AND DÉCOR.
 ETHNIC RESTAURANTS
FEATURETHE FOOD OF SPECIFIC REGION OR COUNTRY.
 FAST-FOOD RESTAURANTS
HAVE INCREASED INTHE PAST 20YEARS AS PEOPLE HAVE
BECOME MORE MOBILE.

9.  DELI-SHOPS
PROVIDE DELICATESSEN FOOD SERVICE, COMBINING
TRADITIONAL DELICATESSEN COLD MEATS AND
CHEESESWITHTAKE-OUT SANDWICHES, SALADS AND
SIMILAR ITEMS.
 BUFFET RESTAURANTS
ESTABLISHED ON A COMPLETELY SELF-SERVED BASIS.
 TRANSPORTATION RESTAURANTS
THERE IS NATURAL LINK BETWEENTRANSPORTATION
AND FOOD SERVICE.

10.  ARE MAJOR COMPONENT OFTHE FOOD SRVICE
INDUSTRY, PARTICULARLY IN FAST FOOD SECTOR.
 FRANCHISE ARE BENEFICIAL TOTHE FRANCHISEES
BECAUSETHEY PROVIED OPERATIONAL,
TRAINING, LAYOUT AND DESIGN ASSISTANCE,
LOCATION ASSISTANCE, MANAGERIAL EXPERTISE,
GROUP PURCHASING POWER, AND MOST
IMPORTANTLY, THE IDENTIFICATION OF A WELL
KNOWN BRAND SUPPORTED BY REGIONAL,
NATIONAL, AND INTERNATIONAL ADVERTISING
AND PROMOTION.

11.  FRANCHISED RESTAURANTS CAN EASILY
GET FINANCING FROM LENDING
INSTITUTIONSTHAN INDEPENDENTS.

12.  FOOD COST PERCENTAGE
FOOD COST PERCENTAGE IS OFTENTO USE
TO MEASURE A RESTAURANTS
MARKETING SUCCESS.
FORMULA:
DIVIDE, FOOD COST FOR A PERIOD (A DAY,
A WEEK , A MONTH) BY SALES FORTHE
SAME PERIODTHEN MULTIPLY IT BY 100 .

13. IFTHE COST OF FOOD FOR 1MONTH IS
$40,000 AND SALES IS $100,000THE
FOOD COST WOULD BE:
$40,000
$100,000 IS EQUALTO =0.4
0.4 x 100= 40%

14. ITEM COST PRICE SELLING
PRICE
COST
PERCENTAGE
GROSS
PROFIT
1
2
$4.00
$1.00
$8.00
$4.00
50
25%
$4.00
$3.00
INTHIS ILLUSTRATIN, ITWOULD BE BETTERTO SELL ITEM 1
RATHERTHAN ITEM 2 SINCE ITEM 1 HASA HIGHER COST
PERCENTAGE,A HIGHER GROSS PROFIT AND HENCE, A
CONTRIBUTIONTO NET PROFITTHAN ITEM 2. FOR EACH OF ITEM 1
SOLD 50 PERCENT FOOD COST,THERE IS A $4.00 GROSS PROFIT
COMPAREDWITH $3.00WITH ITEM 2.

15.  LABOR COSTS ARE CONTROLLED BY EXPRESSINGTHEM AS A
PERCENTAGE OF SALES ON A DAILY, WEEKLY OR MONTHLY
BASIS ANG COMPARINGTHE ACTUAL COST WITHTHE
STANDARD DESIRED.
 INSTEAD PFTREATING LABOR COSTS AS SEPARATE FROM
FOOD COSTS, MANY SUCCESSFUL RESTAURANT LOOK AT
THESETWO AS A COMBINED COST. FOR INSTANCE,THEY SET
A STANDARD OF 75 PERCENT ABOVE IN WHICH FOOD COST
PLUS LABOR COSTS MUST NOT INCREASE. AS LONG ASTHE
OPERATION MAINTAIN THE COMBINED COST BELOWTHIS
LEVELTHE RESTAURANT WILL BE PROFITABLE.
 IN A LARGE RESTAURANT,THE ORGANIZATION OFTHE LABOR
FORCE IS IMPORTANT TO LABOR COST CONTROL.THE FOOD
SERVICE STRUCTURE IS ILLUSTRATED IN FIGURE 7.

16.  ANOTHER PROFITABILITY MEASURE USED
IN RESTAURANT ISTHE AVERAGE GUEST
SPENDING OR AVERAGE CHECK. AVERAGE
GUEST SPENDING IS CALCULATED BY
DIVIDINGTHETOTAL REVENUE RECEIVED
FOR A PARTICULAR PERIOD(A DAY, A
WEEK, A MONTH OR AYEAR) BYTHETOTAL
NUMBER OF GUEST SERVED DURINGTHAT
PERIOD.

17.  IF 350 GUESTS ARE SERVED DINNER AND
THETOTAL REVENUE RECEIVED IS $3,610,
THE AVERAGE SPENDINGWILL BE:
$3,610
350 = $10.31

18.  BREAK EVEN ISTHE POINT ATWHICH
BUSINESS WILL MAKE NEITHER PROFIT
NOR A LOSS.THE OPERATION FOR
DETERMININGTHE BREAK-EVEN POINT
IS
FIXED COSTS
CONTRIBUTION MARGIN

19.  FIXED COST ARETHOSE COSTSTHAT REMAINTHE SAME
REGARDLESS OFTHEVOLUME OF BUSINESS. FOR
EXAMPLES ARE SALARIES, INTEREST, DEPRECITION,
INSURANCE RENT, ANDTHE LIKE.THE CONTRIBUTION
MARGIN IS AVERAGE CHECK LESSVARIABLE COSTS. FOR
EXAMPLE, IF A RESTAURANT HAS AN ANNUAL FIXED
COST OF $125,000 AND AN AVERAGE GUEST SPENDING
OF $10.00 AND ITSVARIABLE COST SUCH AS FOOD,
LABOR AND OTHER IS 75 PERCENT OF REVENUE OR $7.50
PERCENT GUEST SERVED, ITS BREAK-EVEN POINT IS
$125,00
$2.50 =50,000

20.  THE CONTRIBUTION MARGIN IS AVERAGE CHECK
LESSVARIABLE COSTS OR $2.50 LESS $7.50.THE
BREAK-EVEN NUMBER OF CUSTOMERS IS 50,000.
THE PROOF OFTHIS IS
TOTAL REVENUE: 50,000 x $10.00 = $500,000
VARIABLE COST :50,000 x $7.50 = 375,000
FIXED COSTS: 125,000
PROFIT OR LOSS: O

21. FOOD SERVICE
----------------------------------------------------
FAST FOOD
RESTAURANT
CAFETERIAS
TRADITIONAL
RESTAURANT
CHAININDEPENDENT
SPECIALTY
BROAD MENU
SPECIALTY
ETHNIC
LOCAL

22.  THE MENU ISTHE BASIC PLANNING
DOCUMENT FOR A SUCCESSFUL
RESTAURANT.
 THE MENU ALSO DETERMINESTHE
EQUIPMENT NEEDED ANDTHE INVESTMENT
REQUIRED.
 THE MENU CAN ALSO DETERMINETHE LABOR
COST OF A RESTAURANT.
 THE MENU CAN ALSO DETERMINETHE COST
FOR UNIFORMS,THE CHASES, STORAGE AND
SPACE AND ACTUAL FOOD COSTS.

23.  AIRLINES SPEND BILLIONS OF DOLLAR EVERYYEAR
FOR FOOD PURCHASES.THE AVERGAE COST PER
AIRLINE PASSENGER IS BETWEEN $1.00 AND $7.00
DEPENDING ONTHE LENGTH OFTHE JOURNEY. THE
AMOUNT IS LESS FOR SHORTERTRIPS, SINCE
PASSENGERS MAY BE OFFERED ONLY A NON-
ALCOHOLIC BEVERAGE AND A LIGHT SNACK. FOR
LONGERTRIPS, INWHICHTWO ORTHREE MEALS
MAY BE OFFERED INCLUDING FREE ALCOHOLIC
BEVERAGES,THE AMOUNT IS HIGHER. AROUND 3
TO 4 PERCENT OF AN AIRLINE’STOTAL COSTS IS
SPENT ON FOOD.

24.  THE MAIN PROBLEM OF AN AIRLINE ISTO
COOKTHE MEAL ONTHE GROUND AND
SERVE IT SEVERAL HOURS LATER IN AN
EXTRAORDINARY DRY CABIN
ATMOSPHERE, SEVEN MILES HIGHTO
DIFFERENCES ANDWHOSE MAIN
MOTIVATION ISTOTRAVEL RATHERTHAN
TO EAT.

25.  TO PRODUCE HOT MEAL,THE AIRLINES
HAVETO PREPARE SPECIFICATIONS FOR
RECIPE, INGREDIENTS, COOKING METHODS
ANDTEMPERATURES AND LABOR FOR EACH
FLIGHT. ALLTHIS REQUIRES A FORECAST
USINGTHE ACTUAL PASSENGER
RESERVATION FOR EACH FLIGHT
INCLUDING AN ALLOWANCE FOR STANDBYS
AND LAST-MINUTE RESERVATIONS IN
ORDERTO HAVETHE CORRECT RAW
MATERIALS, EQUIPMENT AND FOOD
PRODUCTION STAFF FOR EACH SHIFT.

26. IN 1936 BY DOUGLAS FOR ITS DC-3 THE FIRST AIRPLANE GALLEYWAS DESIGNED
MEALS PREPARED ONTHE GROUND WERE KEPT
HOT OR COLD IN INSULATED CONTAINERS ON
THE AIRCRAFT.
WORLDWAR II THE INTRODUCTION OF LARGER AIRPLANES
ENABLEDTHEMTO HAVE OVENS AND
REFRIGERATORS ON BOARDS INTHEIR GALLEYS.

27. INTHE LATE 1930’S THE FIRST AIRLINE FLIGHT KITCHEN WAS
OPENED NEARTHE WASHINGTON D.C.
HOOVER FIELD AIRPORT BY A
GENTLEMAN NAMED MARRIOTT. HE HAD
A RESTAURANT NEARTHE AIRPORT.
SOME AIRLINES HAVETHEIR OWN FLIGHT KITCHENSWHICH PREPARE MEALS
FORTHEIR OWN PASSENGER. OTHER AIRLINESCONTRACTWITH AIRLINES
THAT HAVETHEIR OWN KITCHENS. STILL OTHERS CONTRACTWITH AN
OUTSIDE CATERING COMPANYTHAT SPECIALIZES IN AIRLINE FOOD
PREPARATION.

28.  AIRLINE CATERING IS DIFFERENT FROM
RESTAURANT CATERING BECAUSE INTHE
LATTERTHE COOKS CAN MAKE LAST
MINUTE ADJUSTMENTS. FOR EXAMPLE, A
STEAK MIGHT BE PREPARED INTHE FLIGHT
KITCHENTO BE ACCOMPANIED BY A SAUCE
ANDVEGETABLESTO BE SERVEDTWO
HOURS LATER. DURINGTHISTIME IT MUST
BE KEPT HOT. IFTHERE IS FLIGHT DELAY OF
ONE HOUR,THE STEAKWILL BE STRINGY,

29.  THE SAUCEWILL BE CONGEALEDANDTHE
VEGETABLESWILL BE MUSHY.
 IN AN ORDINARY RESTAURANT, A MEAL LIKE
THISWILL NOT BE SERVED BUT ON AN
AIRLINE,THE SERVING CREW USUALLY HAS
NO OTHER CHOICE BUTTO SERVE IT.
 IN AIRLINE CATERING,THE LOGISTICSARE
VERY COMPLEX BUT AIRLINES EXERT GREAT
EFFORTSTO SERVE GOOD MEALSTOTHE
PASSENGERS.THEY EVEN RESPONDTOTHE
NEEDS OF PASSENGERS ON SPECIAL DIETS IF
GIVEN ENOUGH NOTICE.

30.  MANY RESTAURANTS ADVERTISE THEIRMENU OR PARTS OF IT IN
NEWSPAPER. LOCAL NEWSPAPER ADVERTISEMENTS ARE USED BY
MOST RESTAURANTS ASTHE MAJOR FORM OF EXTERNAL PROMOTIO
SEVERAL RESTAURANTS ADVERTISE INTHEYELLOW PAGES OFTHE
LOCALTELEPHONE DIRECTORY. SOME USE LOCAL RADIO OR
TELEVISION STATIONS. THE MORE POPULAR RESTAURANTS AND
NATIONAL RESTAURANT CHAINS ADVERTISE IN AIRLINE IN-FLIGHT
MAGAZINES, COMSUMERTRAVEL MAGAZINES ANDTRAVEL TRADE
PUBLICATIONS. MANY RESTAURANT TRYTO FOSTER GOOD RELATION
WITH NEARBY HOTEL EMPLOYEES SUCH AS FRONT OFFICE STAFF, BE
DESK PERSONNEL AND DOORMEN BECAUSETHEY ARE OFTEN ASKED
BY HOTEL GUESTSTO RECOMMEND GOOD NEARBY RESTAURANTS.
GOOD PUBLIC RELATIONS ANDWORD-OF-MOUTH ADVERTISING
GENERATE A LOT OF BUSINESS