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Business Plan for Chinese Restaurant Mr. Chois Kitchen - Essay Example

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The paper 'Business Plan for Chinese Restaurant Mr. Choi’s Kitchen' aims to discuss market opportunities and problems faced by Mr. Choi’s Kitchen that is a Chinese fast food restaurant within the University of Arizona area. It specializes in classic Chinese cuisine, incorporated with a Western touch…
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Business Plan for Chinese Restaurant Mr. Chois Kitchen
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Business Plan for Chinese Restaurant I. Executive Summary Mr. Choi’s Kitchen is a Chinese fast food restaurant within the University of Arizona area. It specializes in classic Chinese cuisine, incorporated with a Western touch. Products as well as the restaurant shall be designed and implemented taking into consideration the target market which is predominantly Western, without losing the oriental touch and feel. A start up company, Mr. Choi is owned by partners who have strong desire to offer a food product without alienating the target market. The owners wanted to provide the market, students from the University and nearby places, with an option for a quick-service restaurant that offers quality food at an affordable price. As an added novelty, the owners will add a twist to the product line by fusing oriental Chinese cuisine with western food to give customers something to rave about and come back for. The main vehicle for its Marketing is online advertising, utilizing the internet as a main tool in engaging the potential customers and enticing them into sampling the products. Social media and search engine optimization tools shall be utilized to enable the company to have a wider reach and focused marketing. II. Market Opportunity/ Problem Definition 1. Customer Value Proposition Mr. Choi’s Kitchen will appeal to customers who are always on the go because the business will adapt a fast food concept and pacing. Clients will spend little time to wait for their ordered food. This set up is best for busy students, young professionals and young married couples who have the buying capacity and would want to enjoy classic Chinese food without the frills and fuss offered by the usual Chinese restaurants. Owners have already made initial implementation plans targeting university students. The initial plan was to bring the Chinese restaurant set up to the universities, which is our target market. This restaurant shall be complete with sit down and dine in amenities. Mr. Choi’s Kitchen targets the young crowd with its East meets west and fast food concept. These are people who are always on the go, and would most likely appreciate food being served fast. In this case, they can choose their dishes from among the wide array of food products to be served ala-carte. 2. Customer Landscape Our target market is college students who need a quick and healthy lunch or dinner during their busy school time and interested in Asian food. In the year of 2012, there are 39,236 students and 12,053 employees in the University of Arizona. This is our primary target market. They are a busy group of people who would prefer the service of a fast food chain. They are constrained by time due to school work, and are highly mobile. They also have a penchant for quick service. This figure does not include other potential customers such as employees working in companies around University of Arizona or downtown of Tucson. The number of residents around the campus within one mile radius is about 20,000. 3. Industry Dynamics There are over 600,000 restaurants and food shops in the United States. Gross annual receipts total more than $ 172 billion dollars per year (National Restaurant Association 2012). It is one of the country’s largest grossing industries. The food industry also employs over ten million people, and generates an annual payroll of more than $ 34 Billion per year. In the article “How and Where America Eats”, more than 40% of American families eat out at least one night per week. Americans, on the whole, have also become much busier. More and more families now have two incomes and as such, the tradition of staying at home and cooking meals is vanishing. Among these establishments, a significant part offer Chinese cuisine as their food genre. 4. Competitive Landscape Our main competitors include Panda Express in the Student Union, Jimmy Johns on Park Ave., Chipotle Mexican Grill on University Blvd, and Bagel Talk in Park Student Union. They either have the similar business model or similar products with us. They also focus on providing customers a quick and healthy meal. They have several advantages against us. First of all, they have been in business around the campus for years and thus have a very good reputation and brand awareness among students and employees. Secondly, location is also an important competitive feature. For example, Panda Express is located in the Student Union which has a plenty number of school buildings and dorms surround it. The last but not the least, they are more likely to gain acceptance from customers than our restaurant. They are either traditional western cuisine or Chinese cuisine. It might be not easy for customers to accept our fresh new idea at the beginning period of our business. However, on the other hand, it also could be our competitive advantage. Customers who like to challenge themselves and try new things are more likely to come to our restaurant instead of others that they are already familiar with. Chinese food has become more and more popular in the United States during the last decades. Cuisines from other countries always have been reformed to accommodate the local culture and taste such as Panda Express and Chipotle. Our restaurant not only provides a Chinese food taste, but also an American food style. A negative impact made by the current trend is the number of people that chase a healthy lifestyle is increasing. A lot of researches show that fast food is not healthy. This may stop people from coming to our fast food restaurant. Our future goal is to become a chain store in the west coast in ten years. With the presence of so many competitors, Mr. Choi’s Kitchen is confident of attracting its own group of loyal customers to be able to create additional revenues. In the food business, there are always a lot of direct competitors, but the novelty that Mr. Choi’s Kitchen presents will surely tap the interests of the target market. The key is to get the target market to sample the products, so they will be enticed to continue patronizing the restaurant. III. Merchandising Plan 1. Merchandise Description The primary focus of Mr. Choi Kitchen will be the sale of a number of traditional Chinese dishes, with a twist of western taste and presentation. The company will offer an expansive menu of Chinese cuisine, which will include traditional items and other entrees such as grilled stir-fry and other cooked entries. The restaurant will also provide a number of appetizers. Mr. Choi Kitchen will serve a wide variety of liquors and non-alcoholic beverages that are available in the menu. The specialty drinks offered by the restaurant include a number of cocktails. It will also serve bottled water, sodas, and other non-alcoholic beverages. 2. Competitive Comparison Our main competitors include Panda Express in the Student Union, Jimmy Johns on Park Ave., Chipotle Mexican Grill on University Blvd, and Bagel Talk in Park Student Union. They either have the similar business model or similar products with us. They also focus on providing customers a quick and healthy meal. They have several advantages against us. First of all, they have been in business around the campus for years and thus have a very good reputation and brand awareness among students and employees. Secondly, location is also an important competitive feature. For example, Panda Express is located in the Student Union which has a plenty number of school buildings and dorms surround it. The last but not the least, they are more likely to gain acceptance from customers than our restaurant. They are either traditional western cuisine or Chinese cuisine. It might be not easy for customers to accept our fresh new idea at the beginning period of our business. However, on the other hand, it also could be our competitive advantage. Customers who like to challenge themselves and try new things are more likely to come to our restaurant instead of others that they are already familiar with. Chinese food has become more and more popular in the United States during the last decades. Cuisines from other countries always have been reformed to accommodate the local culture and taste such as Panda Express and Chipotle. Our restaurant not only provides a Chinese food taste, but also an American food style. A negative impact made by the current trend is the number of people that chase a healthy lifestyle is increasing. A lot of researches show that fast food is not healthy. This may stop people from coming to our fast food restaurant. Our future goal is to become a chain store in the west coast in ten years. 3. Keys to Success a. Create a unique, innovative, entertaining menu that will differentiate us from the rest of the competition. b. Control costs at all times, in all areas and implement a conservative approach to growth policy. Although, we provide more than enough fund to open more than one outlet, we want to be on the safe side of the business. c. Sell the products that are of the highest quality, as well as keeping the customers happy with all of our product categories from food to store merchandising. d. Provide 100% satisfaction to our customers and maintaining the level of excellent services among other competitors. e. Encourage the two most important values in fast food business: brand and image, as these two ingredients are a couple of main drivers in marketing communications. f. Get access to high-traffic shopping malls near the target market. g. Promote good values of company culture and business philosophy. IV. Marketing Strategy 1. Promotion Strategy Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (What is Internet marketing 2004). Moreover, statistics show that Internet users increase at a rapid rate that in five years’ time, it is predicted that 80% of United Kingdom’s population will have a computer with Internet access at home (Advertising 2007). Since Mr. Choi’s Kitchen’s target market are students from 18 to 25 years old, who most likely have internet access either at the office or at home, it chooses to primarily utilize internet marketing to promote its products. First and foremost, Mr. Choi’s Kitchen shall create a website that contains pertinent details regarding the company’s profile and its products. It would contain the company’s mission-vision and a statement of what the company wishes to achieve market-wise. It would also present the product lines, complete with the menu listing for food and beverage. More importantly, it would contain an updated catalogue and photos of the menu being offered. Advertising in the listings on the Internet can provide a website with a number of viewers. As such, Mr. Choi’s Kitchen shall do Search Engine Optimization (SEO) by subscribing to the most popular search engines such as Google and Yahoo, among others. Mr. Choi’s Kitchen shall subscribe to advertising services such as Google AdWords, in which Mr. Choi’s Kitchen’s website would appear immediately following key word searches from Internet browsers. This would prove to be cost-effective since Search Engines charge a company only whenever a person actually accesses its website. Further, this would guarantee that the advertising effort would reach the targeted market because one can limit its ad to appear only to people searching in a particular city, state or region. Mr. Choi’s Kitchen would also do Online Banner Advertising, as this is an effective way to promote brand awareness. Online Banner Advertising allows a company to flash its brand name and other details to browsers upon prompting through specified keywords. Although this does not guarantee sales leads, it nonetheless promotes the Mr. Choi’s Kitchen brand through its repeated appearance on the screen, consequently leading to brand awareness and recall. To save on cost, Mr. Choi’s Kitchen would employ a “cost per lead” or “cost per acquisition” strategy to ensure that it only pays for quality viewers or for browsers who actually expresses interest by logging in Mr. Choi’s Kitchen’s website. Mr. Choi’s Kitchen would secure numerous key words to maximize the opportunity to flash its banners to Internet browsers. Word-of-Web/ Online Promos Word-of-Web is actually a modified version of Word of Mouth Marketing, in which information is passed through verbal means. Word of mouth is typically considered a face-to-face spoken communication, although phone conversations, text messages and web dialogue, such as online profile pages, blog posts, message board threads, instant messages, chat exchanges and emails are also considered word of mouth. This might be informal, and non-quantifiable, but it is also a personal means by which information can be endorsed from one satisfied customer to a potential customer. Mr. Choi’s Kitchen would seek to further modify this means of communication by coming up with rewards for every referral made through its official website. Mr. Choi’s Kitchen shall launch the “Mr. Choi’s Kitchen Exclusive Circle’, a club exclusive to registered members who have provided their email addresses and other contact details for regular updates on Mr. Choi’s Kitchen’s products. Club members may be considered satisfied clients, who may have, at one point or the other, purchased Mr. Choi’s Kitchen products, or at the very least, repeatedly browsed through Mr. Choi’s Kitchen’s official website. Mr. Choi’s Kitchen would capitalize on the fact that these people who have actually seen, experienced and enjoyed the company website would have great influence when spreading the company’s products and offers through word-of-mouth. Registered members shall be given rewards or downloadable promo coupons for every 10 persons referred. Referral would mean that the club member has provided contact information regarding their referrals. Contact information such as email addresses shall be used to invite the referred customers to browse through Mr. Choi’s Kitchen’s website or visit the branch. The registered member who provided referrals, meanwhile, may enjoy discounts for every purchase of products either at the Mr. Choi’s Kitchen branch or if they purchase online through the use of the downloadable promo coupons. In addition to this, part of the efforts involved in word-of-web advertising is the use of direct mailers to be sent to club members and their referrals. Exclusive invitations to fashion shows and galleries, invitations to special promotions shall be given to these referrals to further ignite their interest in Mr. Choi’s Kitchen’s products. Merchandising and Promotional Materials Mr. Choi’s Kitchen shall further convey its message to its target market through using posters, leaflets and mini billboards as its media. These materials shall carry the company’s brand message and shall feature teasers of the product lines that Mr. Choi’s Kitchen carries. Particular attention shall be given to photo shoots that would feature the latest food shots so that these materials would definitely catch the attention of onlookers. Further, the ads should adhere to Mr. Choi’s Kitchen’s key message. The layout should represent sumptuous Chinese cuisine, and should be an embodiment of the Mr. Choi’s Kitchen. Mini billboards shall be displayed at areas where high foot traffic is present. And since Mr. Choi’s Kitchen’s target market includes students, these mini billboards and posters shall be displayed at bus stops in main avenues, where a lot of working men and women pass by on their way to work and on their way home. Promotional materials would also be displayed in highly crowded places waterloos, subway stations among others. Design and production of these materials would constitute the remaining 30% of the overall advertising and promotional budget. A bigger portion of this allocation shall be used for the services of a good layout artist and photography team to ensure that the company’s key message is delivered right through Mr. Choi’s Kitchen’s target market. These strategies were made in close reference to Mr. Choi’s Kitchen’s marketing mix. Pricing-wise, subscribing to relatively low-cost advertising consequently leads to competitive pricing of Mr. Choi’s Kitchen’s product line up. Promotions-wise, utilizing Internet marketing provides Mr. Choi’s Kitchen with the opportunity to touch base with its target market and interact with them on a more personal level. Interacting with customers online, particularly through interactive activities such as online surveys and the like through the Mr. Choi’s Kitchen Exclusive Circle gives Mr. Choi’s Kitchen the chance to collect valuable feedback regarding its product line up. This enables management to be in constant check whether the products being carried continue to be competitive. This way, the management would be able to keep track of the needed improvements and move on to achieve a distinct advantage compared to competitors so that the target market may prefer patronizing its products over other retailer stores. As a whole, Internet Marketing would definitely play a big role in showcasing Mr. Choi’s Kitchen’s product line up in the market since Mr. Choi’s Kitchen has only one branch to physically carry and showcase its merchandise. Schedule of Advertising Management targets to launch the business in December 2012. Two weeks prior to store opening, management will start announcing this new business venture through leafleting in strategic areas such as flyer inserts in university papers and other similar publications. Simultaneous during the launch date, the billboard shall be placed in the two strategic spots within the city, and shall be displayed for the first three months of operations. The effort shall be sustained by mini billboard displays in approximately 20 other locations in the city. The Official Website shall be made available from the very first day of operations. Word of mouth via internet shall be utilized thru advertisements in some of the cities local and tourist websites. Mr. Choi’s Kitchen will also post in social networking sites such as Facebook, Multiply among others to be able to make the rounds to target buyers online. Estimated Costs Flyer Inserts are at $ 700 per 10,000 pieces of flyers. Inserts will be done in three of the most popular broadsheets and/or local publication every Sunday starting two weeks prior to launch date until the sixth month of operations. After which, the management will gauge the effectiveness of this effort to determine whether to push through with the strategy or not. Flyers cost approximately $ 110 per 10,000 pieces, or a total of $ 8,580 production costs for flyer inserts alone and another $ 8,580 production cost for flyers to be used for other purposes. Design will be in house so it would not entail any extra cost. Billboard rentals are pegged at $ 5,000 per month or a total of $ 30,000 for the first three months, and additional $ 2,500 for the production costs. Website design and hosting is anywhere from $ 5,000 to $ 8,500 per month. Of course, there will be efforts to help lessen the advertising and promotional costs. One of these is to establish tie-ups with advertising and publishing companies, to cross sell products and promotions, and provide partners with discounts and support for their own marketing efforts. Mr. Choi’s Kitchen Garden shops will always be open to project tie-ups, because mutually beneficial activities provide maximum profitability among partners. 2. Customer Service V. Location Plan 1. Location Details Our restaurant is located at N. Park Ave. and E. Speedway Blvd. It is nearby the campus, and easy to park for customers who are not on campus. There is also a huge traffic flow at that intersection everyday. Expansion will be in the form of opening another branch or satellite branches in other locations, most probably within university areas. One target expansion project is to be able to bid for a business space in major universities, encouraging the student body and university management’s support by providing us with low rental costs and the participation of student volunteers. Eventually, a program for students taking up Hotel and Restaurant Management who will perform volunteer work for the business will be able to get extra credits in their academics. Mr. Choi’s Kitchen management will do this by tying up with targeted student organizations and the universities themselves. VI. Operational and Implementation Plan 1. Personnel needs Food production will be handled by the kitchen crew composed of one senior chef and one kitchen assistant. Since this Chinese restaurant will serve fast-food style, cooking time is structured and scheduled. Serving parts shall be pre cooked and ready to be re heated/ re cooked upon order. Prior to store opening, a senior Chef will be hired to plan, execute and oversee food production and ensure the quality of dishes being cooked. There will also be an operations manager who will supervise the store dine in area, and one cashier. There will be one marketing and admin officer who will provide support to the Marketing and Administration Manager. Management Team is composed of two main investors who will oversee overall operations of the Restaurant. One will concentrate on store operations, which will include the food production and dine in areas. He will monitor Finance and quality control. The other one will oversee marketing and administrative support. He will be in touch with local media to implement the marketing strategies for the store. The Operations Head is a graduate of Business Management, and has the essential know how in operating a food service business. The Marketing and Administration Head, on the other hand, has a Bachelor’s Degree in Marketing and has worked on two other food service businesses. These two will not work full time on the business but will relay on hired mid management personnel to run the business. 2. Store Layout As a fast food restaurant, considerations on space and ventilation are the primary concerns of the owners. Next is the branding consideration to enable the restaurant to convey a feeling of relaxed dine in experience despite the promise of quick service. The restaurant will be well ventilated, displaying bright and vibrant colors to represent the Chinese ambiance. It will have a high ceiling to demonstrate space, with the facilities arranged in such a way that there is plenty of room for clients to move around. The company will hire a freelance interior designer to ensure that space is properly maximized without the cluttered look. The interior designer will help in conveying the brand message and perform space management to ensure that each corner is utilized, basing on the desired look and feel that the owners want to have. 3. Capital Expenditures Capital expenditures include area renovation, facilities and amenities, kitchen equipment, PCs and peripherals and accounting software. These are essential must haves to be able to establish the brand and the store layout that would help in marketing the business as a whole. VII. Financial Projections 1. Basic Assumptions Estimated expenses: $100,000 to start. Rent: $1,067/month Sales Associate:$7.5/hr Store Manager: $8.5/hr 2. Pro Forma Financial Statements January February March April May June Add Start Up Capital $ 100,000.00 Income Individual Sales $ 12,000.00 $ 13,200.00 $ 14,520.00 $ 15,972.00 $ 17,569.20 $ 19,326.12 Sub Total $ 112,000.00 $ 13,200.00 $ 14,520.00 $ 15,972.00 $ 17,569.20 $ 19,326.12 Expenses Capital Expenditures Rentals $ 1,067.00 $ 1,067.00 $ 1,067.00 $ 1,067.00 $ 1,067.00 $ 1,067.00 Office fixtures $ 1,000.00 PCs and peripherals $ 2,000.00 Kitchen Facilities $ 20,000.00 $ 10,000.00 $ 10,000.00 Renovation $ 50,000.00 Facilities and amenities $ 25,000.00 Merchandise Cost $ 1,800.00 $ 1,980.00 $ 2,178.00 $ 2,395.80 $ 2,635.38 $ 2,898.92 Advertising and Promotions Website Design $ 3,000.00 Website maintenance $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 Online ads (banner ads and SEO) $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 Other below-the-line ads $ 500.00 $ 500.00 Operational Expenditures Phone and internet connectivity $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 Web Hosting $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 Manpower $ 1,900.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 Accounting Software $ 2,000.00 Other materials (accessories) $ 500.00 $ 500.00 Other expenses $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 Sub Total $ 110,067.00 $ 5,547.00 $ 16,245.00 $ 6,462.80 $ 16,202.38 $ 6,465.92 Net Income Before Tax $ 1,933.00 $ 7,653.00 $ (1,725.00) $ 9,509.20 $ 1,366.82 $ 12,860.20 Balance Sheet (Projected) Beginning Projected year 1 Assets Current Assets Cash in bank $ 933.00 $ 9,000.00 Accounts receivable $ - $ - Inventory $ - $ - Prepaid expenses $ - $ - Other current assets $ - $ - Total Current Assets $ 933.00 $ 9,000.00 Fixed Assets Machinery & equipment $ 1,000.00 $ 1,000.00 Furniture & fixtures $ 1,000.00 $ 1,000.00 Leasehold improvements $ 1,067.00 $ 1,067.00 Land & buildings $ - $ - Other fixed assets $ 3,000.00 $ 3,000.00 (LESS accumulated depreciation on all fixed assets) $ - $ - Total Fixed Assets (net of depreciation) $ 6,067.00 $ 6,067.00 TOTAL Assets $ 7,000.00 $ 15,067.00 Liabilities and Equity Current Liabilities Accounts payable $ - $ - Interest payable $ - $ - Taxes payable $ - $ - Notes, short-term (due within 12 months) $ - $ - Current part, long-term debt $ - $ - Other current liabilities $ - $ - Total Current Liabilities $ - $ - Long-term Debt Bank loans payable $ 7,000.00 $ 3,500.00 Notes payable to stockholders $ - $ - LESS: Short-term portion $ - $ - Other long term debt $ - $ - Total Long-term Debt $ 7,000.00 $ 3,500.00 Total Liabilities $ 7,000.00 $ 3,500.00 Owners' Equity Invested capital $ 100,000.00 $ - Retained earnings - beginning $ - $ - Retained earnings - current $ - $ - Total Owners' Equity $ 100,000.00 $ - Total Liabilities & Equity $ 107,000.00 $ 3,500.00 Works Cited “National Restaurant Association.” December 11, 2012. http://www.restaurant.org/research/ “Statistics: Floriculture Industry Overview”. December 11, 2012 http://www.safnow.org/statistics-floriculture-industry-overview “Benefits of an online marketing approach”. Nextsbd.com. December 11, 2012 from http://www.nextsbd.com/imarketing/benefits-of-online-marketing.php “United Kingdom Internet Usage and Broadband”. Internet World Stats. December 11, 2012 from http://www.internetworldstats.com/eu/uk.htm “Retail Sector – Top 10 Risks.” December 11, 2012 http://www.ey.com/GL/en/Industries/Consumer-Products/Turn-risk-and-opportunities-into-results--Retail-sector---The-top-10-risks Read More
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