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Chapter Three. The Restaurant Business. The meaning of the word Restaurant:. The word restaurant covers a broad range of food service operations. The term comes from a French word meaning “restorer of energy.” In the mid-1700s - it was known as any public place that offered soup and bread.

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Chapter three


The Restaurant Business

The meaning of the word restaurant
The meaning of the word Restaurant:

  • The word restaurant covers a broad range of food service operations.

  • The term comes from a French word meaning “restorer of energy.”

  • In the mid-1700s - it was known as any public place that offered soup and bread.

  • Today - it is any public place that specializes in the sale of prepared food for consumption on or off premise.

Varied Field of Food Service

Food away from home may be purchased in a variety of locations

Employee cafeterias

convenience stores

traditional restaurants

hotel facilities



Food Away From Home May Be Purchased in a Variety of Locations:

This speaks to the size and scope of the food

service industry, and most of these segments

are experiencing positive growth!

Varied Field of Food Service

On site food service
On-Site Food Service:

This is the other major food service sector and is

sometimes referred to as institutional food service.

  • This part of the industry is composed of contractors and caterers who serve food in the following places:

    • manufacturing plants

    • office buildings

    • healthcare facilities

    • schools and colleges

    • and many more...

Varied Field of Food Service

Share of food service market percentage of total sales in billions
Share of Food Service Market:Percentage of Total Sales in Billions

This slide identifies the relative shares of

the market held by the following segments:

  • Eating places: 67.4%

  • Bars and taverns: 3.2%

  • Institutions operating own food service: 8.7%

  • Managed services: 6.5%

  • Food service in hotels and motels: 5.2%

  • Other commercial: 8.7%

  • Military: 0.3%

Varied Field of Food Service

Off premise sales vs on premise sales

Off- Premise Sales:

Includes operations such as drive-through, takeout, and delivery.

Biggest growth in food service industry for many years.

Since the late 1980s it has the lion’s share of growth in total restaurant sales

On-Premise Sales

Includes sales that take place at the food service location.

This type of sales actually declined in 1992, but has increased each year since.

Off-Premise Sales Vs. On-Premise Sales:

Varied Field of Food Service

Fast food alters the meaning of restaurant
Fast Food Alters the meaning of Restaurant

  • During the 1960s and 1970s, fast food altered dramatically the meaning of what a restaurant was.

  • This trend toward off-premise consumption suggests a fundamental change in the business definition of restaurants and how they are evolving

  • But there were other changes happening as well...

Varied Field of Food Service

Fast food alters the meaning of restaurant1
Fast Food Alters the meaning of Restaurant

  • Formal fine dining has been declining in relative importance, whereas casual dining has been growing very rapidly

  • As mentioned in chapter one, this decline in fine dining and the rise in fast food preference may be due to the changing age composition of North America.

  • The Baby Boomers were raised on fast food and prefer the informal and casual atmosphere that is comfortable for the whole family

Varied Field of Food Service

Chapter three

  • QSR stands for Quick-Service restaurants.

  • These restaurants has seen sales continue to rise for the most part

  • Sales rose by 4.4 percent in 2000 over 1999

  • There are many QSRs throughout Florida

Varied Field of Food Service

The restaurant business
The Restaurant Business:

  • The restaurant Business is constantly changing

  • There are so many types of restaurants that it is difficult to devise a mode to fit them all.

  • Nevertheless, we need some basic terminology to describe the field, even in general terms. So here we go…

Basic restaurant terminology
Basic Restaurant Terminology:

  • Eating Market

    • This includes the off-premise operations such as takeout and delivery.

    • Much of it is now referred to as home meal replacement (HMR).

  • Dining Market

    • This includes the on-premise operations such as fine dining and casual upscale restaurants

More basic restaurant terminology
More Basic Restaurant Terminology:

  • Quick Service Restaurants (QSR)

    • This includes the midscale operations such as family restaurants.

    • These are the contemporary, popular-priced restaurants and this comprises the largest segment of the restaurant industry today

Let’s talk a little more about the

Quick Service Restaurants…

Characteristics of quick service restaurants

Many locations

Limited menus

High and variable sales

Fast service with much self service

Many part-time employees with varied schedules

Unskilled labor

Skilled management

Unit managers in key roles

Highly competitive prices

Chains dominate field

Simple units

Complex systems

Characteristics of Quick-Service Restaurants

Midscale restaurants
Midscale Restaurants

  • Family restaurants

  • Commercial cafeterias and buffets

  • Home meal replacement (HMR)

  • Pizza operations

Family style restaurant chains


Waffle House

International House of Pancakes (IHOP)


Cracker Barrel

Boston Market

Perkins Family Restaurant


Big Boy

Friendly’s Restaurants

Bob Evans Farms

Family-Style Restaurant Chains

Casual restaurants
Casual Restaurants

  • Specialty establishments

  • Ethnic restaurants

  • Entertainment – sometimes called “eatertainment”