Author Archives: alvi

Investing in Restaurants – Trends in the Restaurant Industry

From food trucks to back to the farm restaurants, as the restaurant industry climbs back from the abysmal years of the economic crash, there are investment opportunities galore for investing in restaurants. Investors who want to start investing in restaurants might want to take a look at predicted trends in the restaurant industry. Some formerly widely popular restaurants have peaked out, but there are some emerging trends that are slated to explode the next few years. So, what are the big ideas expected for 2017 and 2018?

Mobile food has been big business in 2017. Food trucks touting everything from tacos to sandwiches to Italian cuisine have found success with low overhead and the ability to take the food directly to a crowd of potential customers. Well-known restaurants have expanded into this area with catering and recognizable brand food trucks as well. 2017 is expected to bring increased governmental regulation of this niche of the restaurant industry which may affect profit margins. However, it is still expected to be a good bet for investing in restaurants.

Restaurants that show the farm sources for their food or are located on farms have also soared in popularity. Farmers have been made into celebrities; celebrities have become farmers in an attempt to follow up massive sales in books about returning to whole foods. Pleasing health food fans, environmental activists, and the tide of citizens wanting to return to real food rather than highly processed chemical equivalents, these types of restaurants or restaurant chains are expected to perform well for investors venturing into investing in restaurants.

Southern comfort food, soul food, and Old Italian favorites are also making a strong come back. When the economy has tanked and everything is feeling somewhat uncertain, people turn back to the favorites that marked their childhood memories (or, what they wished their childhood memories were). Investing in restaurants that specialize in these types of food can be very profitable. However, with any of these trends, investors should do appropriate amounts of research themselves. Some well-known comfort food restaurants are in heavy debt and have cut all expansion. Some food trucks do not maintain an efficient enough bottom line, even with low overhead, to sustain substantial profits. The location of a farm restaurant may not have access to a large enough customer base. There are exceptions to every trend, especially in the highly risky business of the restaurant industry.For more information on investing in investment opportunities usually or normally not found in the marketplace

Seven Reasons the Restaurant Industry is Still a Great Bet

I placed my first bet on the restaurant industry years ago. I was a young army non-commissioned officer with a promising military career for the taking. The only problem was, I wanted to return to the civilian world and build a career in the restaurant industry.

Just three days before my discharge date my unit’s Sergeant Major, who had been both a supporter and mentor, dropped by the dining facility. In a comical attempt to encourage me to re-enlist he said “Wallace, it’s not too late to change your mind and save yourself. I hear that in the civilian world, the lines for soup in New York stretch all the way to California”. I smiled and replied, “With all do respect Sergeant Major, I guess that means the civilian world is in need of some well trained foodservice people”. I noticed him chuckle and shake his head as he walked away. A few months later I was in college pursuing my degree in Hotel & Restaurant Management.

Since then the industry has grown in ways that few could have predicted. My initial bet on the industry has paid off in spades. As a hospitality student, classically trained chef, restaurateur, and corporate executive, I have been privileged to experience the restaurant industry from several perspectives. Personal bias aside, I can say with certainty that there are many good reasons to know that the restaurant industry is still a great bet, in spite of our current economic storm. Here are seven reasons worth considering:

1. Needs Based – Restaurants serve two basic needs that are not going away any time soon. I am talking about the need to eat and the need to connect with others. When it comes to eating options, the industry has gone to great lengths to provide convenience. You can walk up, sit down, take it out, drive-through, and even drive up for curb-side services. When I travel outside of America, I am always amazed at how common it is for people to gather in town centers and open air cafes in the evenings to connect. Here at home, operations like Starbucks and casual bars have become our necessary “Third Place” for connecting away from home and work.

2. Lifestyle Driven – Generations “X” and “Y” have grown up eating meals prepared away from home. For them it is as common and expected as electric washers and dryers became for the previous generation. For these Americans, I don’t envision a massive or permanent return to cooking any more than I envision a return to scrubbing boards and clotheslines.

3. Decentralized – Unlike some industries that have suffered the most recently, the restaurant industry has remained decentralized with resources and assets dispersed across the country. In the case of some of the biggest industry players, use of a franchise business model, has also provided dispersing of capital investment and risk. What this means is that the industry is not subject to a massive implosion like the automobile or banking industries have experienced.

4. Massive Scale – With more than a half trillion dollars in annual U.S. Sales and nearly a million restaurants nation wide, the restaurant industry’s size attracts support from a wide range of industries. From back office technology to cooking equipment, companies across the globe invest heavily in research and development with the understanding that there will be a market for their best innovations.

5. Developed Infrastructure – Over the past few decades the restaurant industry has amassed an enviable infrastructure. From state-of-the-art distribution and logistics to national online reservations and employee training systems the industry has moved closer to being “Plug-and-Play” for even the smallest operators.

6. Entrepreneurial – In spite of the industry’s size, according to national restaurant association statistics, 7 out of 10 restaurants are single unit operations. Fortunately, the barriers to entry into the industry have remained relatively low. As a result the industry enjoys constant bottom up innovation. The next trend is as likely to come from a small Cuban Diner in Miami as a heavily staffed test kitchen in Dallas.

7. An Affordable Luxury – Now once the economy begins to recover there will be some industries that will come back slower than others. One of the reasons restaurants in general have not fallen as sharply as others sectors, is that, eating out is still an affordable luxury even in difficult times. Most consumers don’t have to take out a loan to enjoy a meal out. For this same reason pinned-up demand should drive strong growth as things recover.

Mobile Technology Meets the Restaurant Industry

Many industries can benefit from mobile technology – not just the industries that seem to go hand in hand with technological advances. One such industry that can join with mobile technology is the restaurant industry. This occurs because mobile technology offers innovative solutions that can make any industry run more smoothly by increasing the efficiency and productivity of that industry.

QR Technology

QR technology is one of the best ways by which the restaurant industry can benefit from mobile technology. To start with, you need to forget everything you know about QR technology. Most people have a very puerile and na├»ve understanding of this far-reaching technology. For example, what do you think of when someone says “QR”? You probably think of a black and white barcode. Did you know that QR codes don’t need to be black, white, and boring? It is now possible to create custom-designed QR codes: codes that are colorful and creative. These codes allow you to blend designs with your company’s logo, as well as background imagery, in order to create a code that truly stands out.

What’s more, QR codes do way more than what most people think they do. Many people think that QR codes simply bring a user to a website. This is a very limited understanding of QR technology; QR codes can actually do a number of different things. If you’re in the restaurant business, you can use QR codes to do the following whenever someone scans a code:

- Send a menu to someone’s email
- Send promotional coupons and specials to someone’s cell phone
- Display a detailed map explaining how to get to your restaurant
- Provide photos of your food and atmosphere
- Allow a user to watch a video advertisement of your restaurant
- Allow a user to enter a contest

And more!

The sky is the limit when it comes to QR technology. This technology is incredibly versatile, and can be used to solve a multitude of problems.

Smart Sites

Smart sites provide a great opportunity to anyone in the restaurant industry: namely, the opportunity to own a website that can be altered at anytime by anyone… regardless of web know-how. This is indispensable to the restaurant industry; because restaurants are commonly adding and taking away meal specials and promotions, as well as commonly altering menu items, they need a website that is dynamic and alterable. If a restaurant’s website is difficult and time-consuming to edit, that restaurant runs the risk of providing out-dated information that could potentially infuriate customers. More importantly, websites need to be able to be viewed on a mobile device. Many people browse the Internet on a mobile phone; therefore, it is very unwise to have a website that cannot be viewed on this device.