Small Restaurants CAN Combat Corporate Competition

In my fifteen years as a chef, I have consulted many a small restaurant owner that thought they could never combat the corporate giants in the industry. Alot of the could not because they did not have the will to adapt. Adaptation, in any situation, is the sure means to survival. Despite the many strengths of corporate franchises, they also carry with them many weaknesses. The key to them staying on top is to keep their weaknesses hidden. I am here to tell you how to exploit those weaknesses and grab a larger marketshare in your local economy.

First things first. You need to understand the psyche behind making a mega restaurant work. There are several factors that need to be monitored constantly to survive in the most oversaturated industry in the country. First, turnover--how many times a dining room can be turned over in a particular timeframe to maxamize profit for the day. Second, food cost percentage--that is what your food costs you in comparison to what you are selling it for. Third, labor cost percentage--that is what your labor costs you in comparison to your sales. Fourth, quality control--that is what industry giants call "consistency." Quality does not necessarily mean alot, as long as every plate leaving the kitchen looks and tastes the same. And finally, marketing--that is what businesses use to get you in the door.

The largest weakness of a high-volume restaurant is volume itself. If a place has a long waiting list, and you are right next door with no wait, you can instantly piggyback their marketing dollars and ineffiency. You can capitalize on just being at the right place at the right times. Usually, in my experience, franchises purchase high-end food because they believe that is what people want. That is a myth. People just want good food at a decent price. Subsequently, they run a higher food cost, meaning another department must suffer to make up the difference. Usually, that turns out to be labor. Now, a kitchen full of chefs with an average or lower than average salary, can't keep up with high volume the same as well paid chefs. Thus leading to a backup and a wait, that the surrounding smaller places can capitalize upon.

This leads me into my next strategy: you get what you pay for. Both with food and with labor. But, why skew your vision? Look at it as a whole. Better paid chefs usually make more money simply because they posses a higher aptitude for the culinary arts. With that being said, better paid chefs plus lower cost of food equals lower food cost, higher labor cost, higher turnover, less wait, and better quality. Whereas lower paid chefs plus higher cost of food equals lower labor cost, higher food cost, less turnover, more mistakes (which can raise your food cost), more wait, and lower quality (quality is sacrificied to keep up with volume).

Now, what did we learn? You get what you pay for. Food is food, but talent is more scarce. Invest your money in your talent (proven talent, of course). The chef makes the food, not the other way around. Exploit that to the fullest, as franchises usually put their money into their food.

Another strategy that small business owners tend to overlook is change. Alot of restauranteurs are afraid to sacrifice the small amount of business they have, in order to gain more. This industry is all about taking chances, that is how trends are developed. The small restaurant has the upper hand in this matter. They can change quickly, and if they see the changes are in the wrong direction, they can also change back quickly. Corporations do not have that flexibility. There are too many people involved in ownership, leading to too many different approvals required for change (back or forth). Therefore, it takes them longer to execute decisions and implement change. Exploit that also.

As far as change goes, that is one of the upper hands corporations hold--variety. Most mid-level corporate franchises carry an array of different ethnicities, styles, and types of food, so as to please more people at the same time. Some corporations are so large, that they release different franchises under the same corporate umbrella, forming a foodservice conglomerate. For example, Pizza Hut, Long John Silver's, A&W, KFC, and Taco Bell all seem quite different from each other. However, they are all part of the same holding company, YUM! Brands. While I strongly recommend against trying to beat them at their game, it's still conceivable to run seasonal and special menus to complement your regular menu.

That is my next emphasis. The menu must be short and concise, yet informative and visually pleasing. You must convey your ingredients and pricing, yet not assault the guest with decisions to make. They are coming to relax. Keep your decor and your menu simple and your guests will stay longer. But what about turnover? Well, this is an exception to the rule, because if people are staying longer because they are purely enjoying the experience, that's great. As long as they are not waiting for their food, this does two things for you. One, those people will tend to spend more money, being in a calm, relaxed state of serenity. Two, although this cuts your turnover down, the benefit is that you will also get more peak hours. Make sure to be flexible with that. Open earlier. Stay open later. If somebody desires to come inot your establishment and spend money, never tell them no, unless it is a very serious circumstance.

On your menu, you should have very basic dishes. That has always been a popular tradition. You can jazz up if you like or you can strive for the best of what you are selling. For instance, you could buy an alto-sham (slow roaster) and put nicely marinated cheap roast cuts in it to slow roast for hours. You could also put heavy emphasis into your simpler things; mashed potatoes, carrots, and, most important, gravy (or jus). Make it the best in town. Or, you could take a potato, split it lengthwise, and deep fry it. Put some garlic and chive mashed potatoes in there, cover with the roast, and bake it. Make a sweet rosemary, marsala jus to top it of with, and carrots with ancho chile, fresh garlic, and honey. Just mix and match different flavors and textures to add depth to your flavors. Work with infusion techniques. You can really capitalize with unique cuisine, but it requires alot of practice. The Golden Rule is do not sell what you would not eat. Feel free to be different, however, you should try to avoid being pretentious. Listen to your customers and give them what you want.

Honestly, alot of mid- and even upper-level franchises are terribly misguided. You can walk in the door and get pulverized with a full on sensory overload. Multiple colors, noise, mixture of low lighting with bright accents, dark backgrounds, lengthy menus, ridiculous service uniforms, televisions, games, etc. All of these things are distractors implemented to manufacture a "good time" and distract you from the food and the service--which is what you came for. Some, however, carry a relaxing ambience, but they still lack as a restaurant because they aren't focused on the food and the guests.

Basically, if you can manage to keep things simple you will do fine. It also helps if you can not only find the good help, but also pay them enough to keep them happy. The best thing you can do for yourself, in any business, i guess, is to learn all facets. Know everything about your business and how it works. With these methods, any small restaurant having trouble competing with corporate franchises can find their footing in this grossly oversaturated industry. Keep watching your competition. Sometimes they will show a weakness, but sometimes, they just might show you a trick. The corporate giants will always make mistakes, but so will you. It is very important that you learn from those mistakes quickly and adapt. For that is the sure means for survival.