An examination of cost management behavior in small restaurant firms

The purpose of this study is to test cost management behavior of small restaurant firms and identify whether managers of these small restaurants behave differently depending on their management and ownership structure. The sample was comprised of 87 small restaurant firms identified from the 1998 Survey of Small Business Finances (SSBF). Cost of doing business, size of staff, and five performance measures were used as dependent variables. Independent variables included management and ownership type. Study findings identified significant differences in the profit margin depending on management type and ownership percentage of the primary owner. We also find that the cost of doing business (total expenses) varies depending upon single-family majority/minority ownership and the ownership percentage of the primary owner. The results support the notion that small restaurant firms are operated differently depending on their management and ownership structure.     

Using verbal attention to enhance restaurant customer satisfaction and behavior

Managing and developing positive customer relationships is a critical factor in the success of a restaurant. In this study, waitresses either asked customers about their satisfaction with the food or service before proposing tea or coffee, or they directly proposed coffee or tea without asking about satisfaction. It was found that the number of customers who ordered coffee/tea was significantly higher when the waitress asked the customers about their satisfaction. The theoretical and practical interest of studying the effect of verbal communication toward customers is discussed.     

Revisiting the financing behavior of restaurant firms: The firm-size perspective

In International Journal of Hospitality Management, Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166] published a research article about the financing behavior of restaurant firms, using a canonical correlation analysis. Even though the study presents a general picture of financing in restaurant firms, the financing behaviors of firms of different sizes may differ because they often face different financing environments. Thus, this study re-examines restaurant firms and compares the results with Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166] to further enhance the understanding of the financing behaviors. The results show that, despite the differences in firm sizes, overall financing behaviors are similar to those reported by Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166], although they also suggest that restaurant firms of different sizes do indeed exhibit some different cross-balance sheet interdependencies including relatively more reliance on accounts payable among small and medium firms and more use of long-term debts among large firms. Moreover, long-term assets related to stockholder equity more among large firms but related to supplier credit more among small and medium firms.     

Effects of the Door-in-the-Face technique on restaurant customers’ behavior

We tested the Door-in-the-Face technique in a restaurant. After the refusal of a dessert at the end of the meal, waitresses proposed a tea/or a coffee to the customers. This later proposition was addressed immediately after the refusal of the dessert or 3 min later. It was found that the number of customers who ordered coffee/tea was significantly higher in the no-delay condition. Contrast theory was used to explain this effect.     

Advertising expenditure,intangible value and risk: A study of restaurant companies

This study investigates the relationships between advertising expenditure, intangible value, and risk in stock returns of restaurant firms between 2000 and 2005. Tobin's Q was used to examine intangible value, and the variance of common stock return was used to measure the investment risk. The results indicate that the level of advertising expenditure has a significant positive effect on the intangible value of the firm, suggesting that advertising expenditures could help generate intangible value in restaurant firms. However, this study did not support a significant relationship between the advertising expenditure level and the stock return risk of restaurant firms.     

Effective restaurant rating scale development and a mystery shopper evaluation approach

Dining is a major attraction for tourists visiting Taiwan. In 2008, the Taipei City Government commissioned a project to produce a list of recommended restaurants in Taipei for tourists. To facilitate the selection process, we developed a restaurant rating scale using a mystery shopper approach. This study entailed 20 questions that covered all elements of the consumers’ dining experience in a table-service restaurant setting, as well as a comprehensive mystery shopper training program to ensure consistency of quality in the evaluation process. This research involved the top 500 restaurants in Taipei. The findings revealed that our rating scale achieves internal consistency, validity and model fit. This study provided an important tool for further industrial applications and research opportunities. Further, this study proposes future research directions.     

Paradox of authenticity versus standardization: Expansion strategies of restaurant groups in China

Restaurant customers demand both personalized innovative, yet, affordable service delivery. Accordingly, restaurant groups that seek expansion must consider how to respond effectively to the standardization–authenticity paradox. This paper addresses two questions: what is the relationship between standardization and authenticity? How can restaurant managers use these concepts for the strategic positioning of their restaurant group? Typically, researchers present the two dimensions as a binary. In contrast, this paper first presents a theoretical model and analyzes the variations in the standardization–authenticity relationship. Subsequently, it classifies restaurant group expansion strategies into four categories: standardization of authenticity, authentic alliance, standardized chains and heterogeneity, and examines their respective level of competence required to increase performance. It concludes by presenting suggestions to position restaurants in terms of the extent of standardization and the extent of flexibility.     

American theme restaurants: A study of consumer's perceptions of the important attributes in restaurant selection

In recent years, a number of American theme restaurants have established in Hong Kong. Keen competition exists for this type of restaurants. Customers who visit this type of restaurant seem not only to enjoy their food but also to enjoy their environment. However, little is known about what customers expect and how they select this type of restaurant. In order to have an understanding of customers’ behaviour in relation to the customers’ perceptions of important restaurant attributes in selecting an American theme restaurant in Hong Kong, a study was conducted. The results indicated that ‘Food quality’, ‘Servers’ attitude’, ‘Value for money’, ‘Atmosphere’ and ‘Word‐of‐mouth’ were the five important restaurant dimensions as considered by consumers in selecting an American theme restaurant. Customers for this type of restaurant are likely to be professionals, highly educated and belong to the middle‐income group in the society. Customers usually go to the American theme restaurants for meetings, fun and enjoyment. Marketing implications and directions for future studies are discussed.     

Supplier selection and partnerships: Effects upon restaurant operational and strategic benefits and performance

This study focused on identifying strategic criteria involved in selecting suppliers of restaurant products/services specific to casual dining, full service independent restaurants to obtain operational and strategic benefits for those managers operating in this highly competitive marketplace. A total of 765 responses were obtained from managers at independently owned restaurants throughout the U.S. Results revealed that ‘product’ and ‘financial/technical’ criteria had significant and positive effects upon operational benefits, while ‘product’ and ‘service’ had positive effects upon strategic benefits. When the sample was segmented into low and high supplier partnership groups, the positive effects of ‘financial/technical’ and ‘cost/price’ were significantly greater for the ‘high’ partnership group pertaining to operational benefits. ‘Product’ and ‘service’ and their effects upon strategic benefits were greatest for the high partnership group. Based on our findings, implications, limitations, and recommendations for future studies have been provided.     

Crisis-management practices in the restaurant industry

This study examines crisis-management practices in the Israeli restaurant industry. The study uses a questionnaire for evaluating the importance and usage of different practices for crisis management. The findings show that managers are generally consistent in crisis management and that they generally use the most important practices. The findings illustrate the significance of government support in external crises and suggest that improved competitiveness and cost-cutting activities are significant for combating business hardships. The paper concludes with recommendations for future research and management of crises.     

The sway of influencer marketing: Evidence from a restaurant group

Influencer marketing has become a powerful channel for brand promotion and market expansion in the hospitality industry. However, those responsible for implementing influencer marketing campaigns are susceptible to the “myth of viewability” and rely on the Cost Per View (CPV) evaluation metric, rather than the more appropriate Cost Per Action (CPA). The current research explores the aforementioned myth from a hospitality management perspective by identifying the types of image (or photo) which attract more audience commentary or liking. A qualitative research approach is adopted involving two experiments with influencer pairs across the restaurant context in Taipei, Taiwan. We selected influencers Q and S as our manipulated group. In sharing images on their social media platform, it was found that they make greater use of personal than of food related images. The opposite was the case for the controlled group - influencers X and A – who shared more food than personal images. The researchers tracked viewer responses and then actions towards influencer postings to determine (a) which influencer approach draws more views and (b) the costs that are attributable to views and/or actions. They drew upon the findings to formulate an Owner-Influencer Matrix, a strategic planning tool and framework that helps owners and influencers to optimize influencer marketing. It is concluded that interactions between influencers and business owners should be beneficial to both parties. This empirical study may provide business owners and social media influencers with insights about communicating the respective brand values of their counterparts and designing sponsorship collaborations with a capacity to generate the desired consumer responses.     

Innovation,entrepreneurship, and restaurant performance: A higher-order structural model

Drawing on theories from hospitality, innovation, and entrepreneurship, this study examines a higher-order structural model investigating business innovation, the owners' entrepreneurial self-efficacy (ESE), and human capital as drivers of restaurant performance. The theoretically derived model was tested on data from 198 café and restaurant owners in Australia. The PLS-SEM analysis found restaurant innovation activities and the owner's ESE to positively influence restaurant performance. Furthermore, the six ESE dimensions had varying effects on restaurant performance, with ‘Developing new product and market opportunities’ having the strongest effect. In contrast, the entrepreneur's ‘human capital’, representing their levels of business ownership experience and entrepreneurship/industry education, did not significantly affect restaurant performance. However, human capital indirectly affected performance through innovation and ESE. The findings of this study advance theories in restaurant entrepreneurship and performance and present important implications for industry authorities to develop a successful and sustainable restaurant sector.     

Entrepreneurial motives and characteristics: An analysis of small restaurant owners

The purpose of this study was to gain information about the characteristics of small restaurant owners in China. The data for the study were hand-collected by survey questionnaires in four cities across three provinces in China. We found three main results. First, small restaurant entrepreneurs were characterized by one of three distinct motives in that they were autonomy seekers, family protectors, or profit seekers. Second, their funding sources were predominantly private rather than institutional. And third, the entrepreneurial business was the main source of the family's income. These findings have implications for development programs, financing, and education in developing China's restaurant industry. This study appears to be the first to investigate empirically entrepreneurial activity among small business owners in the Chinese restaurant industry.     

Estimating the impact of entertainment on the restaurant revenues of a Las Vegas hotel casino: An exploratory study

Considering the growing presence of non-gaming amenities in a mature casino market such as the Las Vegas Strip, this study examined the indirect contribution of showroom entertainment to casino-operated restaurant business volumes. Using the internal data of a Las Vegas hotel casino, this research found a statistically significant and positive relationship between daily showroom headcounts and food and beverage revenues. For each additional show attendee, daily food and beverage revenue increased $6.96. This finding suggests that casino executives should consider leveraging show traffic with additional revenue-enhancing venues such as restaurants.     

New performance indicators for restaurant revenue management: ProPASH and ProPASM

Measuring business performance is the first step of the improvement process but without knowledge there can be no purposeful action. Revenue per Available Seat Hour (RevPASH) is an effective and reliable indicator of a restaurant's performance, however, it may not provide the whole picture of a restaurant's business performance. In restaurants, the contribution margin of each menu item is different and it should be taken into consideration when evaluating restaurants’ performance, because the goal of restaurant revenue management is to maximize profit, not just revenue. Although several researchers have explored various issues regarding restaurants’ revenue management (RM) strategy, there has been little discussion on how to measure the performance of RM strategies as they apply to restaurants, except RevPASH. Therefore, this study proposes new metrics, ProPASH (Profit per Available Seat Hour) and ProPASM (Profit per Available Square Meter) and discusses how they can be applied to measure the effectiveness of restaurants’ RM strategies.     

International tourism and consumer prices in Pakistan: a wavelet-based analysis

This study aims to investigate the relationship between the tourism activities and price level in Pakistan by using monthly data set from 1972 to 2016. In this study, aggregated as well as disaggregated price level have been considered. Co-integration results suggest significant long-run relationship between tourism and all price level of goods and services except fuel and lightning. Results of the wavelet transformation show a strong variation in short-run. The results of the wavelet transformation coherence also show an in-phase as well as out-phase both associations between the prices and tourism receipts in the mid-term and long-term periods.     

Food allergy knowledge and training among restaurant employees

As the number of Americans with food allergies continues to increase, restaurant employees should be trained to serve customers who have this condition. This study investigated restaurant employees’ food allergy (FA) knowledge and identified previous FA training, the preferred characteristics of future FA training, and the reasons why some employees were not interested in FA training. A study questionnaire was developed based on interviews with restaurateurs and previous literature and was completed by 229 restaurant employees. The results showed that the participants have some FA knowledge (20.8 ± 3.4 of 28). Many were not trained in FA but expressed interest in attending such training. The participants expressed a preference for self-paced training programs that use real-world examples and simple language. Some reasons for not being interested in attending FA training included “time consuming”, “not beneficial”, and “boring”. The restaurant industry benefits from the findings of this study by gaining a greater understanding of the current food allergy knowledge and training of restaurant employees.     

Blowing minds with exploding dish names/images: The effect of implied explosion on consumer behavior in a restaurant context

Dish names and dish images can be widely found online, providing consumers with important information. Meanwhile, implied explosion (i.e., the perception of explosion induced by static stimuli) is increasingly utilized by real-world restaurants. The present research thus combines dish names, dish images, and implied explosion to examine the impact of implied explosion on various aspects of consumer behavior within a restaurant context. Three experiments demonstrated that exploding dish names and exploding dish images (i.e., dish names/dish images showing implied explosion) can create a more intense taste perception and a more favorable taste evaluation. Additionally, exploding dish images can enhance perceived dish liking and increase consumers’ willingness to pay. The present research suggests that exploding dish names/dish images are subtle but effective communication tools for the tourism industry, helping to deliver a more stimulating perception and experience to consumers and to generate higher margins. By exploring the effects of implied explosion, we also introduce the implied motion concept to the tourism management literature.     

Explicit expression of anti-black biases in the full-service restaurant industry: Legal responsibilities and risks

Anecdotes detailing racial prejudices and discriminatory treatment of Black Americans while dining in full-service restaurants surface routinely in the popular press. These anecdotes are buttressed by a small number of studies documenting evidence of racist language and observed mistreatment of Black restaurant customers. In an effort to further explore the pervasiveness and correlates of such explicit expression of anti-Black biases in restaurant workplaces, this study presents findings from an online survey that was administered in two independent, large, and demographically diverse samples of current restaurant employees. We find that on average between 15 % (Qualtrics sample) and 24 % (Facebook sample) of participants agreed with statements indicating that racist language and discrimination against Black customers is common in the restaurants where they work. We explore the individual and organizational correlates of such explicit expression of anti-Black biases in restaurant workplaces and highlight the associated legal ramifications. We conclude by encouraging restaurateurs to take action against manifestations of racial prejudice in their establishments in order to fulfill their legal responsibilities to both their customers and their employees and thereby to minimize the threat of litigation.     

A cross-cultural comparison of fast food restaurant selection criteria between Korean and Filipino college students

Despite the globalization of the hospitality and tourism industry, present cross-cultural research is limited to examining consumer behaviors or perceptions on the products and services the industry provides. The current exploratory study between Korea and the Philippines investigates college students’ perceptions on the fast food restaurant selection criteria with respect to the attributes they feel are important. A conjoint analysis, proven as a statistical marketing research tool with strong predictive power of consumer choices among multi-attribute product alternatives, was utilized for the analysis of the data for the study, and the analysis revealed that both Koreans and Filipinos viewed Menu Price as the most important attribute. Next important attributes, in Korea, were followed by brand, food-related factors and service- and hygiene-related factors, while in the Philippines, they were food-related factors, service- and hygiene-related factors and brand. This type of study is requisite for globalization of the food service industry in developing effective marketing strategies and establishing operational strategies, by understanding the different components of the Asian food service industry relative to the US market.