You are what they eat: a how-to for the budding restaurant

Entrepreneur,  Feb, 2003  by Jacquelyn Lynn

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ONLINE EXCLUSIVE

For additional tips, check out our online startup guide on starting your own restaurant at www.entrepreneur.com/startupkits/restaurants.

THE FRANCHISE OPTION

A viable alternative to starting a restaurant from scratch is buying a franchise. There are a variety of options in the foodservice category, from fast-food operations and ice cream shops to fine-dining restaurants and everything in between.

The benefits of a franchise include a proven format, marketing and operations support, and at least some degree of name recognition. But if you have your own ideas for the concept or menu, you may find a franchise too restrictive.

Franchise consultant Gene Getchell says the most important thing to look for when considering a restaurant franchise is that the concept is new and unique. "Look for quality and creativity, something that stands out, that's not a 'me, too,'" he says.

The unique element may be the food, the building or the presentation--whatever it is, it needs to be different enough to fill a gap in the market and attract the consumer.

For a winning restaurant franchise, Getchell recommends that the franchisor:

* Have a proven track record of success

* Demonstrate financial stability

* Have a dear expansion strategy

* Be very selective about who can purchase a franchise

* Not put any pressure on you to make a fast decision

For rankings, listings and additional information about franchised restaurants, check out Entrepreneur.com's Franchise Zone (www.entrepreneur.com/ franchise).

THE HUMAN FACTOR

People are a critical component of the restaurant business. Not only is the operation itself labor-intensive but guests will remember--and talk about--poor service long after they've forgotten how good the food was. Managing your human resources must be a top priority. "I tell employees we work for them,--they don't work for us," says Bill Ellison of Frasier's. "lt's our responsibility to make sure they have the training, the equipment, the food and beverage to get their job done."

Here are some tips to help you find and keep great people:

* Hire right. Take the time to thoroughly screen applicants. Be sure they understand what you expect of them. Do background checks, lf you can't do this yourself, contract with a human resources consultant to do it for you on an as-needed basis.

* Create detailed job descriptions. Don't make your employees guess about their responsibilities.

* Understand wage-and-hour and child labor laws. Check with your own state's Department of Labor to be sure you comply with regulations on issues such as minimum wage (which can vary depending on the age of the workers and whether they are eligible for tips), when teenagers can work and what tasks they are allowed to do.

* Report tips properly. The IRS is very specific about how tips are to be reported; for details, check with your accountant or contact the IRS at www.irs.gov (or see your local telephone directory for the number).