According to a recent poll, only 36% of Americans favor the new healthcare legislation. It has far reaching potential affects into the food service industry and could burden heaviest on independent restaurants and their employees with more than 50 full time staff members. If the “mandate” is upheld, what are your plans if you are one of the thousands of larger independent restaurants, food services or chains that this would directly affect? Are you prepared for the additional record keeping regulations?
Great article by Roy Bergold via QSRMagazine.com
This story just goes to show that great food and a great concept just aren’t enough in the restaurant business. Even the best idea can fail without proper management and marketing. Check out the story here….
In order to effectively convey what it takes to create an effective logo, I think it is important to outline the qualities of an effective logo.
- An effective logo is easy to recognize, even at a glance or at a distance
- An effective logo is easy to remember
- An effective logo tells people who you are
- An effective logo tells people what you do
- An effective logo suggests your service style
An effective logo may also have one “bonus” attribute that can make it not only effective, but outstanding. Your logo may also convey your unique selling point.
Knowing what it is that an effective logo conveys, we can start to look at some design qualities an effective logo has and doesn’t have, and why they are important.
Hopefully, your restaurant has a color scheme. Your scheme helps identify you and should consist of two contrasting colors. From those two colors, you can also find complimentary colors to use in the interior and exterior decoration of your restaurant. Often, the color black or another third color can be used to make the primary colors “pop”. It’s also good to know that certain colors have distinct psychological effects on how people behave. You may have noticed that many large chain restaurants use the colors red and yellow in their restaurant designs. These two colors make people feel “excited”. Research has shown that this excitement leads customers to eat more inside the restaurants they are used in.
A gradient is the resulting color pattern when one color fades into another color. This effect may look artistic and interesting, but it muddles your logo and makes it harder to recognize at a glance or distance. It also makes reproducing your logo more expensive or even impossible with some reproduction methods, like embroidery. Stay away from gradients if you want a logo that is easy to recognize and easy to remember.
Bevels and highlights
Effects such as beveling, which makes the center of an object look raised while the edge appears to “drop down”, and highlighting serve to muddle an images appearance just as gradients do. While the effects look artistic and make the logo more interesting, it also makes the logo more difficult to see at a glance or distance, and harder to commit to memory. In logo design, too much detail results in a bad logo.
After the last two paragraphs, I hope you don’t need much detail on why shadows, especially drop shadows, are bad for a logo. They add artsy detail that only serves to confuse the image. It’s extra detail that is there more for the logo artists ego than to make the logo more effective. Remember, “attractive” doesn’t equal “effective”.
One of the most common logo design mistakes is using a font that is too hard to read, or putting a font on a background whose color does not contrast enough with the color of the font, resulting in lettering that doesn’t stand out enough. If the words on your logo are lost because they are too hard to read, you don’t have an effective logo.
What words you use in your logo and how they are emphasized based on the font size and color will greatly affect your logo’s ability to be recognized and remembered easily. More importantly, a poorly worded logo will not communicate to your potential customers who you are and what you do. Without communicating your identity and your message, your logo might as well be a blue dot with no words. An example would be a restaurant that just calls itself “Ralph’s” and has a logo consisting of the name “Ralph’s” over a plain background, like a circle, with no other words. This logo could easily convey what the business does by adding the word “restaurant” to the logo. It could communicate even better by including words that says what Ralph’s Restaurant sells, like “Ralph’s Sub Sandwiches”. Another approach would be to not have the extra words, but to use an image or background that infers “restaurant” or “sub sandwiches”. For example, Ralph’s could be spelled out between two hoagie bun images with a lettuce leaf on top and a tomato on bottom. This would leave no doubt that Ralph’s is selling sub sandwiches.
An effective logo doesn’t just need an easy to recognize color scheme, and words that effectively convey what the business sells. An effective logo also needs to utilize a basic geometric shape that helps identify the logo when someone is too far away to read the words. Along with a basic two color scheme, a shape in a logo makes that logo very easy to recognize. Think of McDonalds big yellow “M” or Burger King’s split yellow sphere (probably a bun) with a blue swoosh around the name and sphere. They create basic shapes and color patterns that are easy to recognize as soon as the sign comes into view, long before you are close enough to read the words.
Overall, you can summarize these design points by just reminding yourself to “keep it simple”. Too much detail may win some “oohs” and “aahs” from your friends, or make you feel better about your design prowess, but it won’t result in a logo that accomplishes the most basic task a logo is intended for, making people remember you and what you do.
Concentrate your marketing efforts and dollars on people who already know you.
Try to be all things to all people. Find your niche.
Incorporate a few “signature” items into your menu. Having items that your competitors don’t have gives your customers a reason to come to you instead of them.
Depend solely on word of mouth marketing. Word of mouth marketing only works AFTER a lot of people know who you are.
Update your prices at least 3 times per year. Small, incremental price increases are likely to go unseen by your customers. Wait too long, and you’ll have to significantly increase all your prices at once, which WILL be noticed. Those frequent small increases are better for cash flow than occasional big increases.
Know your target market. Your target market is not the people you WANT to buy your food, but rather the ones MOST LIKELY to buy your food. A big red flag in any marketing plan is an assumption that your concept appeals to everyone.Don’t:
Have a large menu. Large menus confuse your concept, increase ticket times, decrease table turns, increase waste, make server training harder, and overall just make you lose money. You can’t be all things to all people. If you try, you’ll be very little to very few.Do:
Have an exit strategy. Knowing how you’re getting out of this venture if things don’t go right is more important than knowing how to get into it. What happens with your lease if your concept fails? Do you have provisions that protect you in case of road construction, building construction, or other cicumstances beyond your control?
Think if you “build it they will come”. Every new restaurateur thinks their food and product is so interesting and unique that people will flock to their restaurant just because they opened it.
Have a marketing plan. Word of mouth marketing only works if a lot of people already know about your business. You can’t depend on word of mouth for a startup. Marketing a startup takes money and a plan on how best to utilize that money to get people in your door, so you can build relationships and earn their referrals to their friends.
Sign a contract without having it reviewed by legal counsel, whether it’s for a lease, a partnership, or a vendor.
Create a unique selling point. Form an emotional bond with your customers by promising to make them FEEL something, then delivering on that promise. The memory of how you made someone feel with your restaurant will last long after they forget who served them and what they ate. “Good/great food and service” are NOT unique selling points. Every restaurant claims to have these. The emotion that you promise and deliver to your customers IS a unique selling point. Other restaurants will not have this.
We currently have 60 entrees and 24 soup/salad/apps. We are known for our pizza, so we have a full pizza section which includes 6 sizes, 2 types of dough, 33 toppings, calzones, strombolis, 6 specialty pizzas, 7 sandwiches, beer, wine, and standard beverages.Which is better, 50 items or 100?
If you ask me, you need to eliminate 2/3rds of your menu. Big menus mean big waste, big inventory, big kitchen staff, big cost control issues, big ticket times and big confusion for your customers.
One thing to keep in mind with a restaurant. You are only ever going to be as profitable as your peak dining periods. Meaning…. when you have a large menu, you can not serve as many customers in any given period of time. With a large menu, people take longer to order. Big menus clutter POS’s, making the average time to input a ticket longer. They mean more prep for the kitchen, resulting in more kitchen employees in earlier to prep, and more employees on the line to produce too many different types of food. Even with more employees on the line, it takes longer to produce food when you have less multiple orders of the same items being made at the same time. All this extra time means you can’t serve as many people during your peak periods, which is where 80-90% of your revenue, and 100% of your profit is made. If you can increase your customer counts during peak periods by 10%, then you can increase your profit by more than 10%.
From a customer viewpoint, more choices doesn’t mean you’ll get more regulars because you have so much to choose from that people will keep coming back to try everything. That is a huge misnomer among owners and managers, that perpetuates the use of large, inefficient menus. More choices on a menu for customers means more confusion about who you are, what your specialities are, and why they should like you better than the Italian restaurant down the road.
Simply put, more choices isn’t better for business, it’s worse.
As far as what’s better, 50 items or 100? Neither. They’re both way too many. If you want to be known for having great food, you need to have a limited number of items, that stand out to people each on their own merit. If you have 4 or 5 great menu items that stand out from your others, people may remember them if there are only 10 or 15 surrounding them. If you bury them under 60 other items, people are less likely to remember what it was they had that was so great, and they’ll be less equipped to sell their friends on how great your food is. Confusing your customers isn’t good for business.
Stripping down a menu isn’t hard to do. The hardest part is convincing yourself it’s a good idea when you believe that more=better. Simply take your sales mix report, and eliminate most the items on the bottom half of your report that aren’t selling as much. Within the top half, keep all your top sellers, then make a list of what kitchen station those items are prepared in, saute, grill, fry, cold, etc. Use your top sellers, and a selection of the rest of the items you haven’t already eliminated to create a menu that balances your menu between each of your production stations. When you finish, I would suggest having NO MORE than 20 main course dishes, including sandwiches (10-15 would be better, I would eliminate the sandwiches altogether), 4-6 starters and 2-3 salads. If you are known for your pizza, then pizza should maybe make up 2/3rds of your main course selections. 6 sizes of pizzza is ridiculous though. Any more than 3 is complicating things unnecessarily. You could even think about going to only 1 individual adult size, and 1 individual kid size. This, and eliminating the sandwiches on your menu would greatly increase your average gross profit per item sold.
Stop worrying about trying to be everything to all your customers. While you should still accomodate special requests if possible, you should make sure you are charging a special price for that accomodation, and you also shouldn’t be encouraging them. Your servers and your kitchen staff don’t like it, regardless of what they tell you. It makes their job harder. If you cut your menu down, you are more likely to gain new customers, than to lose old ones. Take this statement to heart, THERE IS NO CUSTOMER OF YOURS THAT ORDERS ALL 60-80 MENU ITEMS. They WILL NOT be dissapointed enough about losing a few options to quit dining with you, especially if they are regulars, and especially if you train your staff to explain that your reduction in choices helps you give them better food, better service, and serve more people.
Discourage the ordering of those old menu items, clean up your POS, simplify your training, and make your operation capable of serving more people during your peak times. Your employees and your pocketbook will thank you.
Is the cost of food and supplies less when you own a franchise because of their buying power, or the same, or even more because of kick-backs from suppliers?
The franchise I am looking at shows cost of goods to be from 34% – 38%.
This sounds a little high to me. Is this what the norm is in this industry?
It all depends on the menu and prices. If you’re evaluating a potential franchise purchase, the food cost percentage is the last thing you should be worried about. Percentages don’t equal profit.
You should be concentrating more on the average profit and investment, how large the investment is, how fast that profit will earn back your investment, and whether that profit makes the investment worth your time.
Franchises do normally have increased buying power. Whether that results in a lower food cost percentage depends on the pricing, not the purchasing.
There is no “norm” for the industry. Some operations make a profit with 45% food costs, some need to be under 20%. Achieving either one doesn’t mean either will even make a profit. The profit is made with the money that is left over AFTER you pay for the food. While operating efficiently, and not wasting product is important to profit, the importance of running a particular food cost percentage is grossly overstated in the restaurant business.
In most cases, coupons are a path to disaster. Coupons undervalue your product, and getting customers to come in with coupons doesn’t give them a good idea of what type of value you really offer. You end up with customers that think your restaurant is a good value, “with a coupon”. Then, they wait til the next coupon to come out before they come back to your restaurant.
As far as chains that use coupons, they know something the average independent operator doesn’t. They have a sales history showing them how much of their sales are given away in the form of coupons. They track their discounts, and they price their coupon marketing strategy into their menu. If a pizza costs them $3.00 to make, and they need to make $7 gross profit for every pizza they sell, they know they have to make the regular price of that pizza $12 or $13 so they can send you a coupon and make you think you’re getting a good deal paying only $10.
How many people really pay $18.00 for a large pizza at Papa John’s? None. People wait until they have coupons. Sure Papa John’s makes money, but they know they’re not earning repeat, full price, customers by sending out coupons. They know how much money couponing is costing them, and they adjust their prices accordingly. They then use coupons as a “trick” to build value into their product.
Can coupons be used responsibly and still allow for a profit? Sure, if that is part of your marketing and pricing strategy from the get-go. Outside of that, coupons should only be used to promote items that earn you MORE gross profit than you need to make money AFTER the discount is applied. Even then, I suggest never offering a flat percentage discount, and only using coupons to promote package values, or to give freebies that are “extras” that won’t detract from the gross profit you’ll make by selling the rest of the meal at full price.