Restaurants Organization and

Management
In this chapter, we will learn how to set up a restaurant to make it successful. We will discuss three
important things: guests, ambience, and menus. After that, we will talk about financial and
operational controls, which include:

Managing money and expenses

Planning menus and forecasting demand

Buying, storing, and using ingredients properly

Serving food and handling customer payments

Analyzing food costs and using technology like POS (Point of Sale) systems

Controlling labor and beverage costs

 Organizing a Restaurant for Success
A restaurant manager needs many skills to run a restaurant smoothly. These skills include:

Ø Marketing skills – to bring in customers

Ø Quality control and service skills – to keep customers happy and coming back

Just having a lot of customers is not enough. Many restaurants go out of business even when they are full every night. The
key to success is good organization. A well-organized manager can control expenses, make budgets, and maximize profits.
Even non-profit food services, like school cafeterias, measure success by how well they manage their costs. All food
businesses share the same goal: serving food while managing expenses. Because of this, they all follow similar management
and control strategies.

• The three most important factors for a restaurant’s success are:

• Guests (customers)

• Ambience (atmosphere and environment)

• Menu (food choices)

 Understanding Guests (Customers)
The most important part of any restaurant is its customers. The success of a restaurant depends on how well it
attracts and keeps customers happy and satisfied.

To do this, restaurant owners need to understand:

• Where customers come from

• What kind of food and service they want

• What kind of environment they prefer

This research helps in deciding:

• The best location for a new restaurant

• The right menu that matches customer preferences

• The style of service and ambience

• The best marketing and advertising plans

However, customer preferences change over time, so research should continue even after a restaurant opens. A restaurant that was popular for years
can lose customers quickly if it stops meeting their expectations. For example, some restaurants failed because they did not adapt to customer needs:

• Sambo’s: A once-popular restaurant chain, but it failed because it did not keep up with customer demands.

• Royal Castle: This chain offered 5-cent hamburgers but didn’t modernize. The restaurant buildings became outdated, and the land they were built on
became more valuable than the business itself.

• Victoria Station: This restaurant was famous for roast beef and train-themed decor. But as people ate less beef, its concept became less attractive.
The company kept changing its theme, confusing customers, and eventually lost them.

Ø Changing Trends in Dining

Today, casual dining restaurants are very popular. These are restaurants that:

• Have medium prices

• Offer a comfortable atmosphere

• Include chains like Applebee’s, Chili’s, Olive Garden, and The Cheesecake Factory

Customers today also want healthier food choices. For example: The Cheesecake Factory introduced a menu without trans fats and offers "weight
management salads".
• Steak ‘n Shake now has promotions like "all-you-can-eat pancakes" to attract customers. Eating out has become a normal part of life rather than
an occasional treat. According to the National Restaurant Association, 45% of adults say that restaurants are an essential part of their lifestyle.
There are about 990,000 restaurants in the U.S., and this number is still growing.

• Changing Attitudes Toward Smoking and Health

• 35 years ago, all restaurants allowed smoking.

• By the late 1980s, most customers preferred smoke-free dining.

• Today, most large cities have laws that ban smoking in restaurants and bars.

• McDonald's made all of its company-owned restaurants 100% smoke-free and encouraged franchise owners to do the same.

• Health trends have also changed menus:

• Customers prefer fresher food because they believe it is healthier.

• Restaurants now offer more fresh-baked bread and pastries.

However, not all trends apply everywhere. What is popular in California may not work in Vermont. Restaurants should do local research to understand
their customers.
 Importance of Ambience (Atmosphere and
Environment)
Ambience is everything that creates the mood and feeling of a restaurant. This includes:

• Decor and lighting

• Furniture and tableware

• Menu design

• Service style and staff personality

• Music and even the type of guests who visit

• Ambience can be as important as food. Some customers choose a restaurant because of its environment rather than its menu.

• For example:

• Seafood restaurants are often built near water to make customers feel like the fish is fresh.

• Fuddruckers has a glass-enclosed meat storage area where customers can see fresh beef, making them believe the hamburgers taste better than
frozen ones.
Ø How McDonald's Used Ambience to Attract Families

When McDonald’s started, founder Ray Kroc wanted to attract families with young children. Research
showed that:

• Families were a large and growing customer group.

• Children often decided where the family would eat.
• To make McDonald's more kid-friendly, they:

• Lowered the counters so children could order easily.

• Used bright colors like yellow and red (popular in children’s toys).

• Created a fun and welcoming environment for kids.

Ø Benihana: A Unique Ambience

Benihana is a famous Japanese restaurant chain known for live cooking shows. The founder, Rocky
Aoki, wanted it to feel authentic. He trained chefs in Tokyo before bringing them to the U.S.
• Imported real Japanese wooden beams for decoration.
• Refused to use cheaper American materials, ensuring a truly Japanese dining experience.
Ø How Location Affects Ambience
• Restaurants often design their ambience to match the local culture:
• New England inns use colonial-style furniture.
• Seaside restaurants often have a nautical theme.
• Southwest restaurants in places like Santa he use native decor.
• Some restaurants are located in landmark buildings, making them more attractive.
Examples include:
• The Space Needle Restaurant in Seattle
• Restaurants inside historic castles or train stations in Europe
 Understanding Menus in Restaurants
Ø Introduction
A menu is the most important part of a restaurant. It is not just a list of food items; it tells customers
what kind of restaurant it is and what they can expect. A good menu attracts customers and helps the
restaurant make a profit.

Ø Why Menus Are Important

• A well-designed menu helps a restaurant in the following ways:

• It gives customers a clear idea of what food is available.

• It shows the restaurant’s specialties (the best dishes they offer).
• It helps the kitchen and staff prepare food properly.

• It influences what customers order and how much they spend.

• It helps the restaurant manage costs and profits.
 Basic Rules for Creating a Good Menu
A good menu follows these important rules:

Ø 1. Give Customers What They Want

• The menu should have the type of food customers expect.

• If the restaurant is known for fast service, the menu should not have items that take too
long to prepare.

• If the restaurant serves Italian food, it should have more than just pizza and pasta.

Ø 2. Use Standard Recipes

• A standard recipe means using the same ingredients and cooking method every time.

• This ensures that the food tastes the same whenever a customer orders it.
Ø 3. Match the Menu with the Staff’s Skills

• The menu should have items that the chefs and waiters can handle properly.

• If the menu has dishes that require special skills, the staff should be trained

for them.

Ø 4. Consider Kitchen Equipment

• The menu should match the equipment available in the kitchen.

• For example, if grilling is required, the restaurant should have a grill.

Ø 5. Provide Variety and Balance

• The menu should have a mix of colors, flavors, and textures.

• It should include light and heavy meals.

• Creamy dishes should not be served one after another (e.g., a cream soup
followed by a creamy pasta).

• 6. Pay Attention to Seasonal Ingredients

• Fresh ingredients taste better and cost less when they are in season.

• Out-of-season fruits and vegetables are expensive and may not taste as good.
Ø 7. Consider Nutrition

• Many customers prefer healthy food options.

• The menu should include dishes that are low in salt, fat, or sugar.

Ø 8. Use Food Wisely

• Restaurants should avoid wasting food.

• Leftover ingredients can be used in soups, stews, or other dishes.

• For example, old bread can be used for croutons or stuffing.

 Types of Menu
Menus can be divided into different types based on how often they change.

1. Fixed Menu (Static Menu)

• A fixed menu stays the same for a long time.

• It is common in fast food restaurants and chain restaurants.

• Example: McDonald’s and KFC have fixed menus.

• Advantages:
Easy to manage.
Simple for kitchen staff to prepare.
Helps control costs.

• Disadvantages:
No variety for regular customers.
Hard to adjust to changes in food costs.

To add variety, some restaurants introduce daily specials along with their fixed menu.
2. Cyclical Menu

• A cyclical menu changes every day for a set period (e.g., a week or a month), then repeats.

• It is common in places like hospitals, schools, and cruise ships.

• Example: A cruise ship may have a seven-day cycle where each day has a different menu.

• Advantages:
Provides variety for regular customers.
Easy to plan and repeat.

• Disadvantages:
Requires more planning and organization.
Customers may not always like the repeating cycle.
3. Specialty Menus

• Specialty menus are designed for special occasions or groups of people.

• Examples:
• Holiday Menus (e.g., Thanksgiving, Christmas).
• Kids’ Menus (small portions, fun meals for children).
• Senior Citizens’ Menus (healthier options for older adults).
• Take-Out Menus (for food delivery services).

• These menus are great marketing tools because they attract specific groups of
customers.
 Menu Design: How Menus Attract Customers
• A well-designed menu influences what customers order and how much they spend.

1. Layout and Appearance

• The menu should be easy to read.

• Colors, fonts, and images should match the restaurant’s theme.

• Example: A fancy restaurant might use elegant fonts and soft colors, while a fast-food place might use bright colors and bold
fonts.

2. Menu Psychology: Encouraging Customers to Spend More

• Restaurants use smart menu tricks to increase sales:

• Highlighting Best-Selling Items → Popular items are placed in a box or made bold.

• Using Descriptive Words → Instead of "Grilled Chicken," menus say "Juicy, Flame-Grilled Chicken with Fresh Herbs."

• Placing Expensive Items First → This makes the rest of the menu seem cheaper.

• Avoiding Currency Symbols ($) → This makes customers less aware of prices and more likely to order freely.
3. Menu Pricing: How to Set the Right Prices

Setting menu prices is important to cover costs and make a profit. Prices depend
on:

• Food and labor costs – Expensive ingredients mean higher prices.

• Customer expectations – Fine dining restaurants can charge more.

• Competitor prices – Prices should be similar to other restaurants in the area.

• Perceived value – Customers should feel they are getting a good deal.