Restaurant Business Plan Template - Fast Business Plans

www.FASTBusinessPlans.com
Restaurant Business Plan
The US restaurant industry includes about 480,000 restaurants with combined annual revenue of
about $400 billion. Major companies include McDonald's; YUM! Brands (KFC, Pizza Hut, Taco
Bell); and Darden Restaurants (Olive Garden, Red Lobster). The industry is highly fragmented:
the 50 largest companies hold just 20 percent of the market. (First Research).
The industry consists of full-service restaurants (FSR) and limited service eating places, which
include quick-service restaurants (QSR); cafeterias; buffets; snack bars; and nonalcoholic
beverage bars. (First Research)
4.1 Industry Analysis
This analysis is based on the Standard Industry Code (“SIC”) 5812: Eating and Drinking
Places Establishments primarily engaged in the retail sale of prepared food and drinks for
on-premise or immediate consumption. It is also based on the North American Industry
Classification System (“NAICS”) 722110 - Full-Service Restaurants.
This industry comprises establishments primarily engaged in providing food services to
patrons who order and are served while seated (i.e., waiter/waitress services) and pay after
eating. These establishments may provide food services to patrons in combination with
selling alcoholic beverages, providing carry out services, or presenting live nontheatrical
entertainment.
Demographics, consumer tastes, and personal income drive demand. The profitability of
individual companies can vary: while QSRs rely on efficient operations and high volume
sales, FSRs rely on high-margin items and effective marketing. Large companies have
advantages in purchasing, finance, and marketing. Small companies can offer superior
food or service. The industry is labor-intensive. (First Research)
Wages form a significant proportion of operating costs. The existence of a statutory
minimum wage in most states increases the need for players to keep other costs as lean as
possible, which in turn increases the importance of suppliers. A slight complication is that
in some states, foodservice employers are able to treat tips received by their staff as
contributing to their wages; in such states, this policy reduces the impact of the minimum
wage from the employers' perspective. (Data Monitor)
Annual revenue per worker is less than $50,000.
Restaurants compete with companies that serve meals or prepared foods, including grocery
stores, warehouse clubs, delis, and convenience stores. In addition, restaurants compete
with home cooking.
Among FSRs, most establishments focus on Italian cuisine, steak, or seafood. Hamburger
joints make up a majority of QSR locations, along with pizza parlors and sub sandwich
shops. Industry revenue is roughly evenly split between FSRs QSRs.
11