3 reasons why we should never ban tipping | Yahoo! Finance

Some great points made here as to why the movement to ban tipping is misled. Another major point I would like to throw in is that tipping is the single most direct way for a patron to get the most money possible to an employee of an establishment. The Fed and states have laws restricting what businesses can do with money left as a tip for an employee. By forcing pay to run through the whole restaurant system, we add overhead and pieces of those dollars start disappearing to pay for things that don’t directly benefit the employee. Leave tipping alone. It’s in everyone’s best interest.

3 reasons why we should never ban tipping

O’Dell Restaurant Consulting offers operations and strategic consulting services for small to medium sized food services and restaurants. Learn more at www.bodellconsulting.com. Download helpful restaurant tools and spreadsheets at our download store.

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Groupon dying a slow, painful, and welcome death | blog.bodellconsulting.com

New article out by Joan Lappin at Forbes about Groupon’s recent struggles:

Groupon still searching for a viable business plan as stock crashes

Here’s my take.

It’s been years since I started warning restaurant owners against using services like Groupon, Restaurant.com and other parasitic daily deal sites to market their businesses. Restaurant.com was really the first one on the scene in my industry. Groupon however, has been the most “successful” at what they do. I remember years ago when restaurant owners were first investigating these companies and asking opinions about them in some of the restaurant discussion forums I frequent.

The daily deal site promise sounded good at first, “Access to thousands of new potential customers,” they’d say. “Think of all the new loyal customers you could get?”. “We bring them in and your great food and service will bring them back.”

It was a good sales pitch. From the start though, it was obvious to myself and many others that these people coming through the door were never going to become new, loyal customers to the restaurant. Their loyalty was going to lie with the service that was bringing them the discount, namely the daily deal sites like Groupon.

We started warning people from the beginning that these people were going to be loyal to Groupon, not to the restaurant. They were going to follow the next deal right out the door to the next restaurant, and they did. The owners I know who did try these deals learned this the hard way. They would be overwhelmed with business for a short period of time, preventing them from putting their best foot forward. This wave of temporary customers tipped on the discounted check, not the original check, and servers lost tip money. The cost of the campaigns that Groupon projected never included all the costs of doing business, like extra staffing and other overhead. It never included the lost revenue from the Groupon customers filling seats that could have been seated with customers paying full price. Regular customers were put off by the fact that these drive-by customers were paying less for their meals than they were. Staff were inconvenienced, and in the end, restaurant owners were left with no extra customers and a business that felt like it had just been hit by a big storm.

Luckily, after years of horror stories from restaurant owners who had decided to use these daily deal sites, the word got out. While there are a few positive stories out there, there have been so many horror stories, these sites started getting a reputation. Restaurant owners started listening to people like myself who were showing them the real math behind a daily deal.

Now, the inevitable is playing out. Groupon is in trouble. A couple years ago, its founders cashed in by offering an IPO and selling stock. Since then, they’ve been divesting themselves of Groupon stock and cashing out. The unfortunate people who were dumb enough to buy stock in a company who is in the business of killing the very businesses it depends on for revenue are losing their shirts. Groupon’s current stock prices is half of what it was in it’s initial public offering. Groupon’s revenues are faltering and they can’t come up with a viable business model after coming to the realization that theirs is unsustainable.

I, for one, am happy to see them fail. I feel a little bad for people who have lost money on their stock, but they should have known better. Daily deals are great for the people who buy them, great for the daily deal site, and can even work for businesses who don’t carry much overhead, mainly service based businesses without any competitors on the same daily deal sites. For the vast majority of businesses though, the daily deal sites are the beginning of the death march, and I am glad to see Groupon floundering. It’s demise can’t come fast enough for me.

Brandon O’Dell is an independent restaurant consultant and owner of O’Dell Restaurant Consulting and Friend That Cooks Home Chef Service. The O’Dell Restaurant Consulting Blog offers helpful articles and tips for restaurant owners, managers and food service professionals. Downloadable spreadsheets and other tools can be found in the webstore on the main website at www.bodellconsulting.com/webstore.html.

Restaurant Product Positioning: Being In The Right Place At The Right Time – HotOperator® Restaurant Menu Builder

Here’s a great article from our favorite menu design company, Hot Operator. The article teaches you how studies have shown your customers eyes to move across a one, two or three page menu and helps you decide where to place your top sellers.

Proper menu item placement on a menu design can increase sales from 5-15% in my experience.

http://blog.hotoperator.com/2014/02/restaurant-product-positioning-being-in-the-right-place-at-the-right-time.html

For other great tools to help you manage your restaurant or food service, visit the O’Dell Restaurant Consulting webstore.

How to run your restaurant out of business…

http://m.pitch.com/kansascity/blogs/Post?basename=chef-restaurateur-ray-pete-peterman-says-hell-close-peanches&day=30&id=FastPitch&month=11&year=2013

Here’s an article from a Kansas City circular about a chef restaurateur who decided his ego was more important than his success. Make sure to read the comments as the owner replies and reveals all you need to know about why he has had three consecutive failed restaurants.

The first rule of opening any business is to make sure you are offering a product or service your customers want to buy at a price they think is a good value. If you expect people to spend their hard earned cash in your restaurant, you have to give them want THEY want, not what you want to give them. A little humility and a smile doesn’t hurt either. If you can’t be hospitable in the restaurant business, you can’t be a successful restaurant owner.

If you’d like to see my opinion on the top reasons why restaurants fail, read my article, The Biggest Mistakes Restaurant Make and Why They Have a High Failure Rate.

I don’t post this to pile on to a restaurant owner whose business failed. It sad when anyone’s dream is smashed. However, the failings of others present a great learning opportunity for the rest of us.

Brandon O’Dell
O’Dell Restaurant Consulting
www.bodellconsulting.com

31 Mind-Blowing Examples of Brilliant Packaging Design – BuzzFeed

http://www.buzzfeed.com/peggy/brilliant-packaging-designs-that-will-blow-your-mind?s=mobile

Are Burger King’s “low” calorie FrankenFrys the way to appeal to a health conscious public?

Burger King is banking on a new lower fat, lower calorie French fry to try and appeal to health conscious eaters. They are calling them “Satisfries”. While I applaud the thought, I’m not sure how a health conscious public is going to react to a processed “FrankenFry”. Health conscious people don’t normally seek out processed foods, however, there might be plenty of people out there more worried about ‘appearing to eat healthy’ than actually ‘eating healthy’. Personally, I would rather not eat a potato that has been mixed with special fillers just to make it absorb less oil. What do you think?

Satisfries: Will Burger Kings low-calorie french fries revolutionize fast food? – Yahoo News.

Who can compete with Subway | Bloomberg

Here’s an article from Bloomberg on Subway’s fastest growing competitors in the profitable “sub sandwich” market. Better run sub shop chains can earn around a 30% profit margin, compared to an average 10% margin earned by fast food restaurants as a whole.

Three Sandwich Rivals Trying to Shave a Few Inches Off Subway’s Footlong Empire | Bloomberg Businessweek

Three Sandwich Rivals Trying to Shave a Few Inches Off Subway's Footlong Empire article pic

Three Sandwich Rivals Trying to Shave a Few Inches Off Subway’s Footlong Empire

Move Over, McDonalds: The 5 Fastest-Growing, Publicly Traded Fast Food Restaurants | Stocks | Minyanvilles Wall Street

Move Over, McDonalds: The 5 Fastest-Growing, Publicly Traded Fast Food Restaurants | Stocks | Minyanvilles Wall Street

Move Over, McDonalds: The 5 Fastest-Growing, Publicly Traded Fast Food Restaurants | Stocks | Minyanvilles Wall Street.

 

Study: Restaurants not making Americans fat | National Restaurant Association

Restaurants do not contribute the majority of calories

This is an article discussing an important study recently published on the amount of calories Americans receive from restaurant food and beverages. It has been peer reviewed and is based on a large sample size and data from five consecutive years. This study completely dispells the myth that restaurants are to blame for America’s obesity issue as it proves that a much smaller portion of food or beverage calories are coming from restaurants than activists and regulators claim.

Help us fight bad regulation based on bad science by getting this information out. Please share this article link.

Restaurants can expect beef prices to keep rising | Commodities content from Nations Restaurant News

What’s your plan for increasing prices? Beef prices are at an all-time high and they don’t look to be coming down any time soon.

Restaurants can expect beef prices to keep rising | Commodities content from Nations Restaurant News.

 

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