The Fast-food Chains - Example

Feasibility Analysis Student’s Name Institutional Analysis Table of Contents Table of Contents 2 General Description 3 Products and services 4 Location 4 Competitive Analysis 5 Facility Planning 6 Well and Septic 6 Restrooms 6 Plumbing 7 Hand-wash sinks 7 Sinks for Food Preparation 7 Mop sink 8 Cold and Hot Potable Water 8 Food supplies 8 Contracts and Agreements 8 Inventory management 8 Inventory management using accounting software 9 Variance and Usage 9 Legal issues 10 Employees 12 Jobs Descriptions and Requirements 12 Performance appraisal of the employees 13 Employee’s legal issues 14 References 15 General Description In the recent years, fast food chains have grown at an increasing rate in the United States of America. Fast food restaurants provide people with an opportunity to grab food whenever they are in a hurry or late from work. Similarly, the food is usually inexpensive and affordable for people whenever they need it. Fast food and beverages restaurants in the U.S take up 46.7% of the entire food service sector. On the other hand, sit-down restaurants like the proposed Comfort-Zone Restaurant account for 39.3%. Therefore, this compels sit-down restaurants to seek diverse markets in order to capture a larger market share from the tourism industry. In most cases, sit-down restaurants will provide their clients with full menus that include sides, appetizers, entrees, desserts and a wide variety of beverages and alcohol. Most restaurants employ a hostess who welcomes people as they enter into the restaurant and direct them on tables where they are supposed to be served with their meals depending on the duration the meal will take. Sit-down restaurants such as the proposed Comfort-Zone Restaurant will usually employ highly skilled chefs to prepare food for both local and international customers including the tourists. Similarly, the chefs are supposed to serve the customers in the most hygienic manner and respond to customer requirements while eating. Similarly, it is imperative to involve hardworking and trustworthy customers’ attendants at a sit down restaurant in order for customers to appreciate the services offered at the restaurant. Hence, if a restaurant will seek to offer unique services to both local and international customers its reputation will be improved and will attract more customers especially the tourists. Therefore, for a restaurant to acquire loyal customers, it should offer high quality services and food. Hence, Comfort-Zone Restaurant will offer unique services to its customers that different from other restaurants of its category. Products and services Comfort-Zone Restaurant will be unique from other fast food restaurants as it will target to offer unique menus and services to its customers. The restaurant will target both the local and the International customers. Unlike other fast food restaurants, it will serve as a form of entertainment for the customers. Instead of customers going to Comfort-Zone Restaurant just to get a bite like other ordinary sit-down restaurants, it will provide its clients with entertainment facilities. Further, the clients will be allowed to enjoy themselves with their families and colleagues for an extended duration of time. The proposed Comfort-Zone Restaurant will also offer bar services, which most fast food and sit-down restaurants in Ventura do not offer. At the bar customers will be able to enjoy a few beers while being entertained. Additionally, customers will be given a chance to watch sport games on the television as they relax at night. Similarly, the restaurant will serve as a good place for middle aged college students who like spending part of their time at a bar dancing and relieving stress. Since the proposed Comfort-Zone Restaurant will be located near two colleges in the area, it has a chance of attracting more tourists as compared to other competing fast food chains. Therefore, the Ventura, CA would be a strategic place to establish a new restaurant. Location The city of Ventura is in the southern California and its current infrastructure makes it an attractive centre for many various people including tourists, traders, investors and college students. Recently, the population of the city has increased significantly with the construction of residential and commercial houses. Similarly, the city is an attractive site for both local people and the tourists as it has been regarded as a beach town with large numbers of people visiting the beach during summer and spring. A significant proportion of the population in Ventura is usually composed of Caucasian who makes up approximately 72.3% of the entire population; the rest of the population in the area includes Asians (3.4%), American Indian (1.1%), Africa American (1.1%), other races (17.2%), as well as any other remaining race that makes up to 4.9%. Competitive Analysis The process of starting a restaurant would take much effort and time particularly in the identification of a suitable location and competitors. The competitors of the new venture will include both the fast food chains, as well as sit-down restaurants. The new business targets customers in rush times and the working class individuals who are normally too tired, thus preferring to dine-out with their families. Comfort-Zone Restaurant will strive to meet the demands of such customers through providing recreational and entertainment facilities and equipment that will make them feel comfortable and get relieved from work related stress. Further, the restaurant will strive to offer their menus and services at a relatively lower prices compared to those of its competitors thus increasing their clientele base (Glader, 2006). Facility Planning According to the state approved plans, buildings in the State of Ventura should not be taller than 50,000 cubic feet and their plans must be approved by an engineer or an architect. Similarly, plans for building that are more than 25,000 cubic feet taller must be approved by the Department of commerce, although it must meet all the state approved plans. Well and Septic While planning on accessibility of water and better waste disposal methods, the management of the new venture, must take into consideration the requirements for well and septic. For example, the systems of the septic must be in line with the codes stipulated by the Department of Commerce. Similarly, wells must meet the criteria for the DNR codes. Therefore, the restaurant management must contact a licensed well driller and plumber in order to meet the requirements of the Department of Commerce. Similarly, the Comfort-Zone Restaurant will need to ensure that the plumber is aware of the future expansion of the kitchen, as well as the seating so that the septic system will be fixed appropriately. Therefore, this will help the new hotel in avoiding the occurrence of future expenses. Restrooms Since the new hotel falls in the category of a sit-down restaurant, the hotel will seek to meet the requirements for the facilities required for public restrooms. Therefore, the number of seating per single restroom in the restaurant will rely on the seating capacity of a new venture. The restroom in the new venture will be commercial with the capacity of 300 patrons. It will be a unisex family restroom that is expected to be located in Ventura, a city in California. The customer restrooms will be designed such that the doors will not open into a serving area, food preparation or the storage area. Employees’ restroom will be equipped with food court facilities. Plumbing Utensil Washing – the facilities in the Comfort-Zone Restaurant will need a 3-compartment sink fitted with drain boards. Strainer baskets will also be needed on drains. Similarly, the facility will be installed with a commercial dishwasher, as well as a prewash sink. Commercial garbage grinders will also be installed under the assistance of a licensed plumber in so as to ensure appropriate back flow. Hand-wash sinks Hand –wash sinks in the new venture will be next to the sinks for washing the utensils or the dish water. The management of the Comfort-Zone Restaurant will liaise with the Department of Health in California State in order to meet the required health standards. Sinks for Food Preparation The new venture will include air gapped sink for food preparation. The facility will be important in washing of vegetable and fruits, quick thaw foods and pre-chill hot foods that will pass under running water. The management of the new venture will also need to communicate with the Department of Health to establish whether they have met all the requirements for a sit-down restaurant in order to be allowed to operate in Ventura, California. Mop sink The restaurant will have the mob sink facility according to the regulations of the Health Department in order to provide quality services for their customers. Cold and Hot Potable Water The facility in the new venture will comprise potable cold and hot water that will be produced under pressure. Food supplies The new venture will target to obtain all its food supplies in wholesome and acquired from the source and will be expected to meet the legal requirements that relate to food labeling. Contracts and Agreements In terms of supplies, procurement and transport, the new venture will make a binding agreement with its suppliers. Thus, this will be helpful in determining mutual relationship between the business and the suppliers. These types of contracts are usually the service level agreements that stipulate the service that will be delivered by the supplier. The contractual clauses of the supplier will be more specific to the kind of food and equipments that the new venture will be ordering (Bolton & Dewatripont, 2005). Inventory management Restaurant inventory refers to all beverages, food, serving, and cleaning supplies. There is a need to count inventory once or more per week so as to have control of the goods at hand and to be preparing comprehensive menu for the customers. In the restaurant, there are key items that are the best selling and are the most important detail in the menu. The key items should be controlled through inventory almost every day before the restaurant is opened for sales. This daily inventory control may help in times where staffs are to be accountable in case of spill, theft or something gets overcooked. The major purpose of undertaking inventory control is a way of measuring the amount of supplies and usage of the restaurant product overtime. The inventory is good in determining the reorder levels, the economic quantity levels and lead time of the restaurant supplies. The determination of the maximum and minimum supplies of the restaurant goods is important in ensuring the provision of restaurant services does not halt even a single moment. The economic quantity levels are important as the managers of the restaurant will know the demand and order large quantities of supplies with discount. Therefore, the inventory control helps the restaurant to avoid the potential risk of depleting the food and beverages which may otherwise disappoint restaurant tourists. Inventory management using accounting software The use of the accounting software makes the inventory control as easier as it is seemed to be. The software is installed in the office computers and is used to keep track of all the inventory counts. Therefore, the software delivers the inventory reports and changes are clearly seen on a weekly basis in most accurate and convenient way. Variance and Usage The difference between actual usage and theoretical usage is known as variance. The ideal usage or theoretical usage is the inventory that the restaurant sells at the POS (Point of Sale) system. Every time the restaurant cashier enters sales, the Point of Sale System gives the record of the food supplies needed to make the product, subsequently end up recording the amount of the inventory used. Therefore, the theoretical usage is made of the wastes recorded in the accounting software. The actual usage represents the actual inventory counted. Ideally, the inventory count should be the one shown on the POS after all the sales have been recorded. In this ideal situation, the menu is assumed to have been prepared correctly and there is no variance. Realistically, there is always a variance between the theoretical and actual usage because of poor counting practices, spills and theft. Legal issues The legal concerns are one of the major considerations when starting operations of a new restaurant to ensure it is within the law. The legal framework covers a wide range of areas from negotiating a commercial lease to zoning laws. Therefore, there are a couple of legal compliances and steps required when opening up a new restaurant. There is a need to have the knowledge of the prevailing zoning laws to figure out whether there are restrictions that can hinder the operation of a newly opened restaurant. Moreover, it is important to get the best terms of the negotiating a common commercial lease. These can be obtained through consultation services from law expert so as to get tips of obtaining a commercial property lease without getting banned (Kaufman & Practising Law Institute, 2001). Equally importantly, there are various legal frameworks that the new restaurant can adopt. From our feasibility study, we found that many restaurants form LLC (Limited Liability Company). The main reason for adopting this legal structure is to protect personal assets against the company’s liability and insolvency. Although companies are complex to operate, it offers liability protection and tax benefits. The complication of the liability structure is due to issues regarding shareholders, board of directors, and other various administration extras. In order to obtain a good legal structure, it is advisable to seek guidance of prolific lawyer to obtain the best options available (Kaufman & Practising Law Institute, 2001). It is not astonishing for a restaurant to require permits and licenses for the operation to conform to the law of the land. Some of the permits and licenses include permit for providing food services, license for the alcohol beverages, and license for general business operation, as well as permit for food safety from the environmental health department for the conformation of state, county and federal requirements. About the food safety, all food regulations require restaurants to handle food safely in terms of preparation and storage. Therefore, restaurants are inspected regularly. While run and operating a new restaurant there are many fronts and vulnerability to injuries, lawsuits, and medical expenses that can be anticipated. Therefore, there is a need to insure to restaurants from various vulnerabilities. The insurance covers include general liability, liquor liability, and property insurance. In California state, requires any newly establishing restaurant to obtain a liquor license that carry liquor liability insurance. Additionally, the new restaurant will be required to insure its workers (Kaufman & Practising Law Institute, 2001). Once the new comfort-zone restaurant is opened, there will be so many legal requirements associated with operating day-to-day activities of the newly opened restaurant. In the feasibility study, various labor laws were noted. These labor laws covered wide range of issues such as tipping, food safety, overtime and remuneration of employees. Therefore, complying and understanding of regulatory and legal requirements is a very powerful driving force for the successful operations of the restaurant (Kaufman & Practising Law Institute, 2001). Employees Jobs Descriptions and Requirements In the feasibility study, many restaurants in Ventura city employ workers who are able to withstand the strain and the pressure of the working environment such as long hours of standing, working in close quarters, lifting heavy kettles and pots, and ability to work in high temperature grills and ovens. Although the job hazards were found to be falls and slips, burns, and cuts, there was nothing to worry about as insurance covers for those job vulnerabilities (Collins, 2010). Nevertheless, from the feasibility survey many existing food-chain restaurants in the city of Ventura started with an average of 50 employees depending on the nature of the management. These employees are expected to perform different roles as the restaurant will be involved in providing different services to the tourists such as food, drinks, restrooms, music, among other services. Therefore, the following are employees with their different roles in a new restaurant that is about to start. Hostess will be involved in organizes seating, taking reservations, giving seats to the customers, and distributing menus. Also, hostess will be involved in operating the cash registry, take orders as well as liaising between dining and kitchen. The manager will plan and manage a new restaurant. Manager has various roles such opening and closing the restaurant, opening the registry, purchasing food and beverages, tracking inventory, managing and training the staff, advertising and connecting with suppliers. Senior Chef will be the person responsible for all kitchen undertaking. They are responsible for recruiting and training new cooks, dishwashers and prep persons. Cooks distribute the menu, equipment and buying of supplies. Therefore, chef should be the star of the attraction in the new comfort-zone restaurant. Each chef and cooks have special assignments and special job title such as pastry and breads baker, fry, vegetable or a sauce chef. Kitchen staffs measure and weigh the required ingredients, check pans and pots, strain and stir sauces and soups. They are also responsible for cleaning, peeling, and slicing fruits and vegetables for salads. They may grind and cut poultry, meats, and prepare seafood. Another important staff in any restaurant is the cashier who is in charge of the register. They are responsible for the credit and cash transactions, giving staff some tips and making sure that the register is balanced at the end of every shift. Therefore, restaurant chef must be able to operate a computerized cash register system and also possess skills for handling cash in a more responsible manner. Additionally, they must be experienced in restaurant sales before, be professional, reliable and polite Performance appraisal of the employees In order to develop a strong workforce, there is a need to perform continuous performance appraisal where the actual performance is compared to the standard performance. Performance appraisal is the best tools for rating employees so as to provide the basis for providing incentives and promotion to the best rated employees. These promotions and incentives are the best tools of coming up with the best and motivated workforce who will ensure the success of the comfort-zone restaurant in the tourism industry (Collins, 2010). Employee’s legal issues There are various labor and employment laws that regulate the way the business should treat its employees, in the United States of America. It is imperative to know that the department of labor describes regulations that guard and protect employees’ right, especially those young and vulnerable to discriminatory activities. There are various laws that are very important to the operation of the restaurant industry. These labor laws include the occupation safety, fair labor standard act and health act. The fair labor standard act maintains the minimum wage, record keeping, overtime payment, and employment standards for private sector, local, state, and federal governments. It protects the minority by regulating work and wages as: Minimum wage is prescribed as $6.55 per hour, overtime pay include all those hours above 40 hours per week which is expected to 1½ times of the normal rates, and keeping of the employees’ record of the hours worked of each employee (Collins, 2010). References Bolton, P., & Dewatripont, M. (2005). Contract theory. Cambridge, Mass. [u.a.: MIT Press. Collins, H. (2010). Employment law. Oxford: Oxford University Press. Glader, M. (2006). Innovation markets and competition analysis: EU competition law and US antitrust law. Cheltenham, UK: Edward Elgar. Kaufman, D. J., & Practising Law Institute. (2001). Understanding franchising: Business & legal issues. New York: Practising Law Institute. Read More