Nuts and Bolts Books

Introduction from The Street-Smart Restaurant Development Handbook by James M. T. Chao

INTRODUCTION

It has been a long accepted fact in the restaurant industry that approximately 85% to 95% of the individually started restaurants fail.

It is also widely accepted in the restaurant industry that approximately 85% to 95% of franchises restaurants do not fail.

Having been in the franchise restaurant end of the industry we (this writer and two of his close associates) can tell you that a lot of franchise salesmen sold a lot of restaurant franchises with the above information.

The fear of wasting their life savings, not to mention the savings of their relatives, or the taking on of heavy debts, signing on to long term leases and all the hard work involved in starting and running a restaurant have convinced thousands of would be restaurateurs to pluck down tens of thousands of dollars to buy the rights to open one FRANCHISE restaurant on a single plot of land with no guarantee of success and hundreds of thousands of dollars to invest in the way the franchisor told them to do.

In addition, out of every dollar that the franchise restaurant brings in after it opens, the restaurant owner has to pay a percentage as franchise royalty. And very often in addition, another percentage off the top, the restaurant owner has to pay for national and sometimes also regional and local company marketing.

This is in addition to the local marketing each restaurant owner is often required to do, under his franchise agreement.

Obviously, for most of the people who were able to buy a franchise right, the benefits from being a franchise restaurant owner out weighted the cost. We can all attest to that fact.

However, because of the huge amount of initial capital and the difficulty to get a franchise right, a lot of would be restaurant owners go it on their own, usually without the know how that they need in order to succeed in the restaurant business.

Over the years we have consulted with scores of clients in the restaurant business to help them, on an one to one basis, to do the right things, at the right time, in the right ways so that they have a better shot at their dreams.

Some of them were also franchise owners who did not get all the information and/or support they needed to become successful, especially at the initial (site selection, negotiation, design, building, purchasing and starting) phases.

But it has been frustrating for us to see so many other restaurant owners do the wrong things and virtually insure their failure or, at the least, waste lots of time and money for the simple reason that they could not get the "tools for success" that they so desperately needed.

They didn't have the money or could not qualify to buy a franchise. They also could not afford to hire qualified Consultants to help and/or guide them.

WANTING TO PROVIDE AFFORDABLE HELP TO THESE PEOPLE AND OTHERS LIKE THEM IN THE FUTURE, IS WHAT MOTIVATED THE WRITING OF THIS HANDBOOK.

HERE IS INFORMATION PROVIDED BY OVER THREE DECADES OF "IN THE TRENCHES" KNOWLEDGE AND EXPERIENCE, INFORMATION WHICH WE CONSIDER CRITICAL FOR SUCCESS IN STARTING A RESTAURANT BUSINESS.

THIS IS AN EASY TO UNDERSTAND AND SIMPLE TO USE HANDBOOK WITH CHECKLISTS AND EXPLANATIONS SO THAT MORE OF THE NON-FRANCHISE RESTAURANT OWNERS CAN GET A BETTER SUCCESS AVERAGE THAN 5% TO 15%.

WE HOPE THAT BY USING THE KNOWLEDGE IN THIS HANDBOOK, MORE OF YOU WILL ACHIEVE YOUR DREAMS WHILE IMPROVING THE LEVEL OF RESTAURANT EXPERIENCE FOR YOUR COMMUNITIES.

Ask yourself why is it that 85% to 95% of the airline flights don't crash? This may sound over simplistic as a question but we're asking you to think about this for a reason.

Would you get on an airplane if you knew that you had a 85% to 95% chance of being in a crash?

Yet every day, hundreds of people get on the "airplane" of starting a restaurant even though 85% to 95% of them will "crash".

If you fail in the restaurant business, isn't it almost like losing everything you own?

The answer to the airline's success rate is obvious. The pilots and co-pilots and the navigators have to under go hundreds of hours of actual air time experience preceded by another hundreds of hours of study and training before they're allowed to fly a commercial airplane.

In other words, the pilots, co-pilots and navigators are TRAINED AND PREPARED for their job of getting the passengers and the plane safely to their destination.

Even with all their training and experience things can go wrong. But, at least, they've got better than a 95% chance of success. Statistically, it's even safer to fly than it is to drive.

The answer is simply: THEY HAVE TRAINING AND THE AVERAGE RESTAURANT OWNER DOES NOT!!!

The sad truth is that anybody, with enough money, can go out and buy a restaurant and run it without an iota of proof that he or she knows the first thing about food preparation, sanitation, employee management, marketing, accounting, running a business.

You know what we're talking about.

Governmental agencies will issue you a permit or license to operate your restaurant without any proof that you have any ability to do it right, like doctors or lawyers do before they can go into business.

Before we get into the "meat" of this HANDBOOK, we'd like you to know a little bit about us, the guys "in the trenches". We're not just some people with a little experience and a lot of guessing.

We're not professional writers or researchers. We don't talk about how things should be. We talk about HOW THINGS ARE.

We won't waste your time and money.

The Author & sources have over three decades of experience in the restaurant business. ALL OF US HAVE OWNED AND OPERATED MORE THAN ONE RESTAURANT.

We have all had to MEET PAYROLLS, dealt with TAXES, BILLS FROM SUPPLIERS, INSURANCE, LICENSES, PURCHASING, EMPLOYEE PROBLEMS, SCHEDULING and MARKETING, not to mention SELECTION and NEGOTIATION FOR SITES, and well as DESIGN and CONSTRUCTION and PURCHASING of FURNITURE, FIXTURES AND EQUIPMENT ( F.F.& E.).

Oh yes, all of us have been on our hands and knees, cleaning under the ovens, sinks, make tables and everything else in the middle of the night, after closing, so that the health inspector wouldn't slap a re-inspection fee or, even worse, shut us down.

In addition to that, we have all worked for national franchise restaurant companies. Our experiences include being Director and/or Manager of Real Estate, Construction, Architecture, Interior Design, Purchasing as well as serving in Marketing Committee and in senior management capacities making decisions effecting all aspects of a national franchise restaurant chain.

Our credentials includes professional education (including post-university level graduate studies), professional licenses, professional affiliations as well as certifications by State Agencies to lecture to Real Estate and other Professionals in seminars which qualified as REQUIRED CONTINUE EDUCATION for the purpose of maintaining their licenses.

In addition, our accomplishments in our careers have led to recognition in reference publications such as seven different categories of WHO'S WHO publications.

Currently, we are independent business owners in Architecture, Construction and Purchasing with one of us in Commercial Real Estate. WE ALL SPECIALIZE IN THE RESTAURANT BUSINESS.

Finally, before we leave this chapter and get you started, we want to make one thing absolutely clear: WE CANNOT GUARANTEE YOU SUCCESS IN THE RESTAURANT BUSINESS.

Even if you use the checklists and follow all our suggestions, there are just too many variables in the development and operations of a restaurant. WE CAN ONLY GIVE YOU THE BENEFIT OF OUR EXPERIENCE AND KNOWLEDGE. WE CANNOT BE RESPONSIBLE FOR HOW YOU USE THAT KNOWLEDGE OR THE RESULTS YOU ACHIEVE.

We want you to read through the HANDBOOK and then go over the HANDBOOK a second time. After that, make copies of the CHECKLISTS and take them with you as you go about looking at sites, working with Real Estate Brokers, Leasing Agents, Architects, Interior Designers, General Contractors, etc.

YOU ARE GRANTED THE LICENSE TO USE THE CHECKLISTS FOR THE DEVELOPMENT OF YOUR OWN RESTAURANT.

This is a TOOL to help you make the RIGHT DECISIONS. You'll have to make YOUR OWN decisions. But at least, with this HANDBOOK, you'll have a better chance to make MORE INTELLIGENT ones.

NOW, BEFORE YOU GO ANY FURTHER IN THIS HANDBOOK, . . .

RELAX!!! TAKE A DEEP BREATH AND RELAX!!!

WE KNOW THERE'S A LOT OF MATERIAL HERE. BUT, WE'LL TAKE YOU THROUGH IT ONE STEP AT A TIME.

WITH EACH CHAPTER YOU'LL GOING TO KNOW MORE ABOUT HOW TO INTELLIGENTLY DO THIS. YOU'LL GOING TO FEEL LESS AND LESS ANXIETY ABOUT THIS. YOU'LL GOING TO FEEL THAT YOU HAVE CONTROL.

YOU'LL GOING TO KNOW AND FEEL THAT YOU KNOW WHAT YOU'RE DOING. YOU'LL KNOW WHAT TO EXPECT. AND, YOU'LL KNOW WHAT YOU CAN EXPECT FROM OTHERS AND YOURSELF.

ALL RIGHT? LET'S GET STARTED.

GOOD LUCK!