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An Interesting Article about Olive Garden
- Thread starter pitzerwm
- Start date
New Investor
Member
Great article
My wife and I ate at our regular Red Lobster last friday nite.When we arrived the parking lot wasn't crowded as usually it is.We go inside and there is usually a 15-20 minute wait but we were seated promply in a section that had one other party eating.We ordered and the salad and the meal wasn't nearly as good as it usually is.I don't know if they have become laxed on their quality or they were having a bad day.I do know their business was down on this one occasion.We will just have to wait and see if their business is trending down like others.
Waxman
Super Moderator
"The Restaurant"
I began watching reruns of "The Restaurant", where chef Rocco Dispirito opens Rocco's 22 in NYC, backed by financier Jeffrey Chodorow. On last nite's episode, Chodorow had a meeting w/Rocco and addressed the fact that the restaurant was $600k in the negative and consistently losing money. Staff pay was a very high % of expenses. Rocco said "no comment"....
Granted this is a tv show, but the restaurant biz looks pretty darn tough from what I've seen and read. I think barriers to entry (like detailing) can be low and many w/out experience jump in with a fantasy of being a restaurant owner.
I began watching reruns of "The Restaurant", where chef Rocco Dispirito opens Rocco's 22 in NYC, backed by financier Jeffrey Chodorow. On last nite's episode, Chodorow had a meeting w/Rocco and addressed the fact that the restaurant was $600k in the negative and consistently losing money. Staff pay was a very high % of expenses. Rocco said "no comment"....
Granted this is a tv show, but the restaurant biz looks pretty darn tough from what I've seen and read. I think barriers to entry (like detailing) can be low and many w/out experience jump in with a fantasy of being a restaurant owner.
After reading the article I went to an Olive Garden. For a chain it was first rate. I used to hate chains. Part of the fun, sometines the only fun, of traveling, is to try new restaurants. So many of the independents are gone with mainly the chains left. But I have to admit that when you've been on the road and working for a 16 hour day, finding a nice chain with a good meal is still a treat.
robert roman
Bob Roman
Yes, Bill, restaurants do have a high small business failure rate.
Several years ago, I did feasibility studies for several banks that were lending to restaurant start-ups; mostly family-style restaurant. Unlike carwash, most of these investors had previous experience in the business. I learned quite a lot from them.
Family-style restaurant is primarily about location, bend-over backwards customer service, quality at a reasonable price, cost control and having enough seats and parking spaces.
My ex-sister in-law left the airlines industry to own and operate an Italian rest. She has become extremely successful after working her butt off for three years at a pace of about 75 to 80 hours a week.
Some of the other reasons it is a tough business is high employee turnover, cost of goods and customer satisfaction. The turnover rate is almost as bad as full-service carwash. COG is huge and increased by 30% last year alone. Customers are far more finicky about what they eat and how they are served as compared to, say, carwash services.
You couldn't pay me to own a restaurant.
As for Red Lobster, I envisioned their downturn several years ago. Quite frankly, its pretty simple. RL serves up fairly pricy food for the amount you get and its absolutely loaded with fat. I can't remember getting out of there without shelling out almost $50 for two people. Olive Garden is a bargain by comparison.
Several years ago, I did feasibility studies for several banks that were lending to restaurant start-ups; mostly family-style restaurant. Unlike carwash, most of these investors had previous experience in the business. I learned quite a lot from them.
Family-style restaurant is primarily about location, bend-over backwards customer service, quality at a reasonable price, cost control and having enough seats and parking spaces.
My ex-sister in-law left the airlines industry to own and operate an Italian rest. She has become extremely successful after working her butt off for three years at a pace of about 75 to 80 hours a week.
Some of the other reasons it is a tough business is high employee turnover, cost of goods and customer satisfaction. The turnover rate is almost as bad as full-service carwash. COG is huge and increased by 30% last year alone. Customers are far more finicky about what they eat and how they are served as compared to, say, carwash services.
You couldn't pay me to own a restaurant.
As for Red Lobster, I envisioned their downturn several years ago. Quite frankly, its pretty simple. RL serves up fairly pricy food for the amount you get and its absolutely loaded with fat. I can't remember getting out of there without shelling out almost $50 for two people. Olive Garden is a bargain by comparison.
