Your partner and you have just purchased a 50-seat restaurant called Nelly’s. The business has been in operation since 1996. It was a vibrant restaurant for many years and the locals were faithful regulars. Over the last 20 years the business has been gradually waning. This overwhelmingly residential neighbourhood saw its street widening, and vehicular traffic increasing to reflect the increased commercial presence. Real estate prices also rose dramatically making it difficult for young families to afford homes in the area, while those who bought their homes in the 80s and 90s sold at high profit to wealthy buyers. A few old timers are hanging on to their homes to see how high the market will go; they still come to Nelly’s regularly. You and your partner saw a golden opportunity given the shift in demographics and trends. Your examination of the business records and sales trends as well as your interviews with the current owners have revealed the following: • High employee turnover (84%) • Employees are hired through Kijiji • Menu is old school, 75% static. The static portion has not changed much in 20 years • Remaining customers are old school but faithful • Current owners don’t know the food cost ratio but you calculate it out to 48%. • Two cooks have been employed by Nelly’s for over ten years. The others are parttimers or staff which has been employed for six months or less. Four cooks in the kitchen on a busy night, 3 cooks for lunch shifts is what the current structure is, however business has been less than full capacity. Senior kitchen staff earn $21/hour while the junior cooks earn Ontario’s minimum wage. The owner currently assumes the role of floor manager and has 6 servers on duty on busy days and 4 on slow ones. They make servers’ minimum wage (less than the official minimum wage – please research this) and make most of their earnings through tips. • The restaurant is open Tuesday to Saturday, closed Monday and Sunday YOUR NEW CONCEPT You are to redesign the restaurant into a whole new concept. Nevertheless, you want to be respectful to the neighbourhood tradition Nelly’s has become and to its faithful customers. Given the increase in commerce and competition, Nelly’s no longer has to be “all things to all people”, and you decide to venture into a hyper-specialized niche which will make your establishment different from the growing number of casual restaurants in direct competition with you. As such you will ONLY have FOUR items on your menu. Your menu could be static or market, or hybrid. As the restaurant is licensed for 50 seats, you must retain dine-in but you ALSO decide to offer take-out but not delivery. (Hint: this is how you increase capacity beyond 50 seats without incurring new expenses from delivery. However, there will be added food and labour costs which you must factor in) Questions to Answer: 1.Describe your food cost control SYSTEM. 2.In one paragraph, describe how you plan on addressing the current labour issues experienced at Nelly’s? What are the REAL issues? (the roots of the problems described in your guidelines) 3. What makes a restaurant successful? What will make YOUR new concept successful? What metrics will you use to measure your success/progress? 4.Using the methodology presented in chapter 3, explain clearly your CONCEPT? List 5 factors that together help formulate your restaurant concept 5.Perform a S.W.O.T. Analysis of your competitive environment. 6.Discuss how the four Ps of marketing mix are utilized in your restaurant
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