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The economics of specialty restaurants with particular reference to Los Angeles

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The economics of specialty restaurants with particular reference to Los Angeles

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Content THE ECONOMICS OF SPECIALTY RESTAURANTS WITH
PARTICULAR REFERENCE TO LOS ANGELES
A Thesis
Presented to
the Faculty of the Department of Economics
The University of Southern California
In Partial Fulfillment
of the Requirements for the Degree
Master of Arts
by
Frederick L. Schwartz
June 1951
UMI Number: EP44710
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TA/j thesis, written by
JEEDEBLGK.Ii^..jSCMAEfZ,
under the guidance of his....Faculty Committee,
and approved by all its members, has been
presented to and accepted by the Council on
Graduate Study and Research in partial fulfill
ment of the requirements for the degree of
MAS.TBR..QP1..ARTS
Faculty Committee
Chairman
TABLE OF CONTENTS
CHAPTER PAGE
I. INTRODUCTION............................. 1
An introduction to specialty houses .... 1
Statement of the problem................ 3
General considerations in specialty
house operation...................... 3
The value of specialization ............ 5
Definitions of terms used . ............ 5
Specialty restaurant .................. 5
Restaurant........................... 6 ^
The field 6 ^
Buffet dinners ........................ 6
Smtfrgasbord........................... 6
La Cienega Boulevard .................. 7
Sunset Boulevard ..... ............ 7
Specialty houses surveyed ................ 7
What a specialty house i s ................ 10
An introduction to those specialty houses
covered ...................... ..... 11
Name similarities...................... 11
An historical note; the location and
clientele 13 ^
Atmosphere............................ lb ^
The importance of the restaurant industry . 16
CHAPTER
Procedure followed ................ . . .
Collection of data ....................
The questionnaire............. . . . . .
Presentation of data ..... ........
II. LOCATION CONSIDERATIONS FOR SPECIALTY HOUSES
A general statement on restaurant
location considerations........... . .
Type of district ........................
A competitive location ..................
Restaurant competition ................
Specialty house competition ............
A "jinxed1 1 location......................
Competition in different districts . . . .
Accessibility, transportation, and parking.
Ability to move ..........................
Is specialization restricted to large
eities? ...............................
Is Los Angeles a good specialty house
town? .................................
Chapter summary ..........................
III. THE RESTAURANT PUBLIC AND BUILDING
CONSUMER ACCEPTANCE ......................
The restaurant public ....................
iv
PAGE
18 -
18 ^
19 ^
21
2b
2b
2b ^
26 ^
26
27
28 ^
29
32
3b
35
36
39
39"
V
CHAPTER PAGE
Type of people catered t o .............. b® ^
The tourist trade .................... k-2
Building consumer acceptance............ **3
Building repeat business *f3 ^
The effects of turnover................ k-5 ^
The demand for reservations ....... *f6
Psychological a i d s .................... *f8
The belief that specialty houses
serve the best meals.............. M-8
The psychological effect of waiting
for a table .............. ^9
Chapter summary ..... ................ 50
I?. THE PROCUREMENT AND SERVICE OP FOODS AND
BEVERAGES................................ 52
Food procurement........................ 52
Quantity purchases 53 ^
Futures................. 53
Advantage of storage facilities .... 53
Food producing activities.............. 5^
The foods and beverages served.......... 55
Menu considerations................. 55 ^
Price then menu, menu then price .... 56
The limited menu ideal................ 57
vi
CHAPTER PAGE
A balanced meal................... 59
The serving of liquor.................. 60 ^
Chapter summary * . . . . ............... . . 61
V. COSTS AND PRICE RIGIDITY.................. 6k
Breakdown of costs..................... ^
Price rigidity......................... 67 ^
Chapter summary......................... 69
VI. COMPARATIVE EFFICIENTY IN UTILIZATION OF
FOOD AND EQUIPMENT............... 71
Slow moving items avoided 71 ^
Reduction of waste...................... 72 ^
Dependence on high turnover.............. 7k ^
The kitchen and cooking procedure ........ 75
Chapter summary.......................... 78
VII. LABOR POLICIES AND PROBLEMS ................ 80
Labor turnover 80 ^
Type of background required of employees . 83 ^
Tipping of waiters......... 81 *
Pilferage................. 86
Chapter summary . ...................... 88
VIII. ADVERTISING TECHNIQUES .................... 90
Restaurant advertising "musts" .......... 90
Originality . . . .................... 91
CHAPTER PAGE
Atmosphere as advertising.......... 92
Paid advertisements................ 93
Advertising effect of other activities . . 9^
Chapter summary.................... 9?
IX. LONG RUN QUESTIONS OF IMPORTANCE...... 97
Common mistakes in restaurant planning . . 97
Profit prospects ........................ 98
The possibility that specialization is
a temporary fashion .................. 99
Effects of business fluctuations ..... 101
The effects of war......... 10*+
Attempts to capitalize on "a good thing” . 107
Business expansion ...................... 109
In the restaurant field.......... 109
In allied fields.................. Ill
Chapter summary.................... 112
X. SUMMARY AND CONCLUSIONS.............. 115
Summary............................ 115 |
Local considerations.............. 115
The restaurant public and consumer
acceptance...................... 115
Food procurement and service...... 116
Costs and price rigidity.......... 117
Utilization of food and equipment . . . 117 :
i
viii
CHAPTER PAGE
Labor policies and problems............. 118
Advertising techniques ................ 118
Long run questions of importance .... 118
Conclusions............................. 119
BIBLIOGRAPHY ....................................... 122
APPENDIXES......................................... 12*f
A. LAWRY'S, "THE PRIME RIB* , = V STEAR'S FOR
STEAKS, RICHLOR’S .................. 126
B. THE ORIGINAL PANTRY........................ ibl
C. ORIGINAL BARBECUE .......................... 150
D. KNOTT1 S BERRY FARM AND GHOST TOWN........... 158
E. COCK’N BULL.............................. . 165
F. ROUND-UP ROOM.............................. 17^
G. THE CAPTAIN’S TABLE........................ l8l
H. SMITH BROTHERS FISH SHANTY................ 187
I. BIT OF SWEDEN.............................. 191 *
J. SCANDIA.................................... 201
K. EL CHOLO ............................ 208
L. GRANDVIEW GARDENS .......................... 215
M. DON THE BEACHCOMBER........................ 221
N. T A I X ...................................... 231
0. THE FARMER’S MARKET........................ 239
CHAPTER I
INTRODUCTION
I. AN INTRODUCTION TO SPECIALTY HOUSES
A great deal of the credit for the material progress
of the United States has been conceded to specialization.
Those who do nothing but weave baskets should be able to do
a better job, a quicker job, and a less expensive job of
basketweaving than a watchmaker could hope to do.
In food growing and processing, specialization has
reaehed a rather advanced stage. One of the causes of this
has brought about what is known as "geographic special
ization.'1 Climatie and land conditions have made it more
profitable to cultivate a crop, say wheat, in one area than
in another. The cultivation will continue to be profit
able so long as there is a great demand for wheat. Even
with a decreasing demand, there should still be a profit.
With the best wheat land, experience in growing wheat, and
the best machinery for that purpose, the wheat farmer is
certainly in a more advantageous position than the farmer
who raises a little wheat and a little of many other crops.
The advantages of specialization in farming must
have shown the early Americans that what is good economics
2
in one business is apt to be good in another. If
specialization can produce a better crop and a larger
profit, why can’t it produce a better meal? It can and
i
it has. All it needs is sufficient demand. Modern
i
transportation will take care of the supply problems.
The entire population of a town, patronizing a
local specialty house daily, may not be sufficient to
make it a profitable enterprise. However, some people
from many towns or a city could make it a success. On
the eighteenth of June, 1950, Knottfs Berry Farm, a
specialty house in a small town approximately twenty-two
1
miles from downtown Los Angeles, served 11,3^6 dinners.
This is an exceptional example which well illustrates the
drawing power of the specialty house.
For specialty houses to sueceed, they require a
large population from which to draw. Los Angeles provides
such a population. With approximately 2,000,000 people in
the city, and 000,000 people in the county, with all
racial groups represented, and with excellent highways for
2
its 1,712,5^5 automobiles, the greatest concentration of
I 1
Menu of Knott’s Berry Farm. (Buena Park,
j California: Knott’s Berry Farm), p. *+.
! 2
News item in the Los Angeles Times, March 22.
1951. —
3
3
motor vehicles of anywhere in the world, Los Angeles
cannot help but provide a profitable location for most
types of specialty houses.
I
I
II. STATEMENT OF THE PROBLEM
It is the purpose of this paper to analyze the
main considerations confronting the operators of and those
intending to open specialty houses. Where these consid
erations are handled in the same way as they are handled
by the field, they will be given but brief attention.
With so little in the way of background material
available, it has been necessary to limit the scope of this
paper to the Los Angeles area. It is realized that many
local problems are unique and that perhaps the sampling
can be criticized, but these and other faults will not
become apparent until further research is conducted in
this field. By that time, this paper will have served its
purpose as an introduction to the policies and problems
involved.
General Considerations in Specialty House Operation
Restaurant men generally agree that specialization !
t
is the ideal in their field. More often than not, it is
News item in the Los Angeles Times. March 22, 1951j
the small operator who offers the greatest variety. He
attempts to assure volume by trying to please everyone.
This necessitates the stocking of many slow moving items.
i
i With slow moving items come storage problems, spoilage and
other types of waste, and, therefore, added cost to the
consumer.
The small operators realize this but they also
i
j realize that specialization, in the beginning, means a
i
j greater risk. A specialty house cannot thrive on the
| trade from a limited area. Three times a day are too
<
often for fried chicken or fish sandwiches. People will
go away because they are not in the mood for fried
chicken. However, in time, they will return when they are
in the mood for chicken and if the chicken is good, they
! will bring other prospective regular customers on their
next trip. Eventually, assuming success, the specialty
house will be able to draw trade from far greater
distances than the regular restaurant can. Mr. Knott of
the Berry Farm has found out that people will drive up to
twenty-five miles for one of his dinners. Mr. Bachtold
i stated that the Beachcomber enjoys the patronage of a few
! 1
j people who drive one hundred miles just for a Cantonese ;
j I
' dinner.
I The ability to draw from a large area is very
definitely an advantage, as well as a requirement, of
specialization. Frequently, however, the small operator
cannot afford this advantage for it brings with it,
disadvantages.
The Yalue of Specialization
The American people have proved the value of
specialization. In the automobile industry and in the
food industry, the two largest industries in the United
L l
States, the investigation into the advantages of
specialization and the application of the findings have
been most significant. Yet in the restaurant industry,
the third largest,^ specialization is still very limited
and writings on its advantages and disadvantages are
almost non-existent.
III. DEFINITIONS OF TERMS USED
Specialty Restaurant
A specialty restaurant, more commonly referred to
as a specialty house, as here considered, serves one type
of meal, such as steak dinners, roasts, or fish dinners,
Ll
Authority: Mr. Robert M. Riley.
^Idem.
: 6
almost exclusively, or serves the dishes of a foreign
country almost exclusively. The operators* opinion of
what constitutes a specialty house can be found in Section
Y of this Chapter.
Restaurant
All establishments, which primarily derive their
income from the service of food, are considered
restaurants in this paper. Occasionally, the word is used
to distinguish between specialty houses and other eating
places. To assure clarity, sueh words as "regular” or
Mother" usually precede the word "restaurant" in doubtful
situations.
The Field
When restaurants, as an industry, are considered
they are spoken of as the field.
Buffet Dinners
At a buffet type restaurant the portions are served
for the diner by an employee located at the buffet table.
Each diner accompanies his plate, much as he would in a j
i
cafeteria. I
!
Smorgasbord
This is a Swedish type of dinner served buffet
7
style which consists of many hors d’oeuvres, meats, fish,
salads, and desserts. This differs from buffet service in
that the patron usually serves himself and has a larger
i variety of dishes to choose from.
La Cienega Boulevard
Since 1938, fine restaurants have been locating on
La Cienega Boulevard which joins Beverly Hills and Los
Angeles. This has become a restaurant district which is
]
| often referred to as ’ ’ restaurant row;'!
j
Sunset Boulevard
Sunset Boulevard in Hollywood has gained a reputa
tion for both its restaurants and its night clubs. A
portion of it outside the incorporated limits of Los
; Angeles has come to be known as ’ ’Sunset StripiH
17. SPECIALTY HOUSES SURVEYED
It was not feasible to include all, or even most,
of the local specialty houses in this survey. Only those
houses which appeared to be successful were considered.
The opinions and experience of an unsuccessful man were
considered to be of doubtful value.
An attempt was made to secure information on one or
two houses of each of many types. Fish houses, steak
houses, roast beef houses, chicken houses, buffet-style
restaurants, and foreign restaurants were among those
surveyed. Any conclusions, therefore, will be based on
the experiences of many persons, each with a background in
his own specialty.
It was possible to talk to an owner or the manager
in every restaurant surveyed, and all of them were found
to be most cooperative. Some, however, did not care to
have their names used in this paper. For that reason,
their statements will be credited to the manager or to the
management when their restaurants are discussed.
A complete list of the specialty houses surveyed
follows:
1. Bit of Sweden — smorgasbord —
9051 Sunset Blvd., Hollywood
Mr. Fred Glow, owner.
2. The Captain’s Table — sea foods —
301 South La Cienega Blvd., Los Angeles
Mr. G. B. Tohl, owner.
3. Cock’n Bull Restaurant — serves roasts buffet
style —
9170 Sunset Blvd., Hollywood
Mr. Richard D. Hopkins, manager.
b, Don the Beachcomber Cafe — Cantonese food —
1727 North MeCadden PI., Hollywood
Mr. 1. T. Bachtold, Vice President.
5. El Cholo Restaurant — Mexican food —
1121 Southwestern Ave., Los Angeles.
9
6. Grandview Gardens — Chinese food —
951 Mei Ling Way, New China Town, Los Angeles
Mr. Doc Wong, owner.
7. Farmer's Market — many small specialty
booths —
Third St. and Fairfax Ave., Los Angeles
(covered in Appendix section on Farmer's
Market only).
8. Knott's Berry Farm and Ghost Town — chicken
house and steak house —
Buena Park, California
Mrs. Nelson, Publicity Director.
9. Lawry's, "The Prime Rib" — prime rib dinners —
55 North La Cienega Blvd., Beverly Hills.
10. The Original Barbecue — barbecued spareribs
and barbecued chicken —
801 South Vermont Ave., Los Angeles
Mr. James Niekoloff, owner.
11. The Original Pantry Cafe — steaks, and chops,
ham and eggs —
915 West Ninth Street, Los Angeles
Mr. Dewey Logan, owner. !
0
12. Riehlor's — sea food and planked hamburger —
13^ North La Cienega Blvd., Beverly Hills
A Lawry Restaurant.
13. Round-Up Room — serves roasts buffet style —
7580 Sunset Blvd., Hollywood.
I1 *. Seandia — smorgasbord —
9131 Sunset Blvd., Hollywood
Mr. K. S. Hansen, owner.
15. Smith Brothers Fish Shanty — sea foods —
North La Cienega Blvd., Los Angeles
Miss Evelyn Smith, owner
Mr. William Kaiser, manager.
16. Stear's for Steaks — steaks and chops —
116 North La Cienega Blvd., Beverly Hills
A Lawry Restaurant.
10
17. Talx French Restaurant — French food —
321 East Commercial St., Los Angeles
Mr. P. L. Larquier, manager.
V. WHAT A SPECIALTY HOUSE IS
The first of many questions asked the representa
tives of the above restaurants was, "What is your idea of
a specialty house?" Since there is general agreement,
| each definition will not be reproduced here but only the
main points and the noteworthy differences of opinion will
be covered.
The most inclusive definition appears to be that
which was given by the manager of the Beachcomber. To
Mr. E. T. Bachtold, a specialty house is a restaurant
which confines itself to one class of food, usually by
country or by the food world itself. Sea food offers a
good example of a food world class.
To some others, the number of dishes offered deter
mines whether a restaurant specializes or not. The Berry
Farm publicity director, Mrs. Nelson, restricts the field
to those who concentrate on one or just a few dishes. The
representative of the Lawry organization sets an arbitrary
limit of five dishes. There is nothing magic about the
number five but its use does demonstrate the limited menu
requirement. Only when a restaurant is in the foreign
11
class, can it ignore the limited menu requirement and
still remain a specialty house.
Mr. R. D. Hopkins of the Coek’n Bull agreed with
j the above but added that a specialty house is probably
known for only one dish.
Mr. Dewey Logan of the Original Pantry stated that
the menu, even though limited, should not vary much from
day to day.
To Mr. Bachtold's definition then, the limited menu
requirement should be added. The more limited and constant
the menu, the closer the restaurant comes to the specialty
house ideal.
VI. AN INTRODUCTION TO THOSE SPECIALTY HOUSES COVERED
Name Similarities
* If specialty houses choose names which publicize
their specialties, the sixteen restaurant sample (those at
the Farmer’s Market not included) does not show it. Even
the foreign restaurants do not follow any set pattern. One
could easily guess what type of food is served at Bit of
Sweden or El Cholo, but such names as Cock’n Bull and
Grandview Gardens tell very little.
Specialty house names vary from the completely
■ descriptive ones, such as Smith Brothers Fish Shanty, which
li
tell who the owners are and what is served, to those which
leave one wondering, such as Richlor's and the Round-Up
Room.
Lawry’s, Stear’s, and Richlor’s all have coined
names. The names, Coek'n Bull, Bit of Sweden, Seandia,
and El Cholo all indicate that foreign dishes are served.
Three possess the name of their owner. They are Knott's
/
Berry Farm, Smith Brothers Fish Shanty, and Taix French
Restaurant. The Original Barbecue and the Captain's Table
both give an idea of what is served. The Original Pantry,
i
I the Round-Up, and Don the Beachcomber have names which
indicate the type of atmosphere to be expected. The name,
Grandview Gardens indicates that a pleasant atmosphere can
be expected but that is about all.
"A well-chosen name, carefully guarded, can be made
/
a very valuable business asset....Short names are prefer-
y' 6
able. So are those that have a melodious sound.” There
shpuld be nothing about names to bring up prejudices.
One should consider how the name will wear, what
effect the years to come might have on it. It should
sound inviting, not be easily made into a joke, be catchy,i
I ---------5---------
! Joseph Oliver Dahl, Selling Public Hospitality
! (Hew Yorks Harper & Brothers, 1929), p. 20.
13
easy to pronounce and remember, and yet it should not be
7
j too common.
; All sixteen specialty houses have names which
■ appear to be well-chosen. Even the Knott*s Berry Farm and
»
the Smith Brothers names, in spite of the fact that they
just grew with their organizations, meet all of the
requirements, except the one governing length.
The only conclusion from this is that specialty
house names do not follow any set pattern. In fact, it
would seem that a special attempt is made to keep them
unique.
j An Historical Note; The Location and Clientele
l
| Except for those specialty houses which were opened
! by people from other cities, and the Lawry chain, all of
those surveyed had modest beginnings and grew to their
present size. Most of this growth took place in the late
1930*s and/or after the close of the Second World War.
This helps strengthen the belief that Los Angeles has only
recently beeome a good restaurant city. Many of those
interviewed still are of the opinion that the local people
do not know good food as do the inhabitants of the large
7
i Joseph Oliver Dahl, Restaurant Management.
' Principles and Practice (New York; Harper & Brothers,
j I 9M + , *fth rev. ed.) p. 225 *
lb
Eastern cities and San Franeiseo. Whether this is true or
not, restaurant men maintain the Los Angeles citizen has
at his disposal as fine a group of restaurants as can he
j found in the United States.
The locations vary from the finest neighborhoods to
the poorest. Even though many restaurant men believe that
a move can be safely made, they seldom move out of their
original neighborhood. Very often the neighborhood does
not even supply the customers, but in time people come to
associate a given restaurant with a given location. Taix
exemplifies this. Taix is located in one of the poorest
sections of Los Angeles and yet people willingly drive
many miles to get there.
The clienteles do not vary as much as the locations.
The prices charged by some limit the patronage primarily
to the upper income groups. However, those with just
moderate incomes might be seen in any one of these
restaurants.
Atmosphere
This is an important yet evasive factor concerning
which it will be difficult to draw conclusions.
I ■ :
! The Original Pantry is assplainly furnished as any
i
restaurant could be. This might indicate a lack of atmos-
| phere. However, the fact that space is at a premium, that
15'
the restaurant is a series of little rooms tacked to
gether, and that it is painted a bright orange on the
outside are probably enough to provide all the atmosphere
i
needed.
I
For the most part, the restaurants visited were
very clean looking, nicely decorated, and set up for
efficiency. To the writer, only four ©f the specialty
houses put more emphasis on atmosphere than a regular
restaurant might. Knott's Berry Farm and Ghost Town was
one. Here the atmosphere was found in the shops, on the
grounds, and in the Ghost Town, but not in the dining room
where it is normally found.
The Cock'n Bull emphasizes atmosphere. Theirs is
! authentically British. Thousands of dollars have been
j
| spent to acquire authentic English tavern pieces and
antiques which provide this setting. Now that this atmos
phere has been ereated, the management plans no redecorat
ing or enlarging or anything else which might destroy the
effect.
A basic policy of Don the Beachcomber Cafe is
atmosphere. The soft lights, the background music, dishes
and drinks prepared so that they are pleasing to the eye,
and a building which reminds one of a Pacific island
paradise are all part of it.
16
The Scandia management has also placed a great
deal of emphasis on atmosphere. Seandia could easily fit
into a Copenhagen or Oslo setting. Its atmosphere,
although not elaborate, is certainly appropriate.
Specialization does encourage originality in serv
ing and in dining room layout. Sometimes it requires
^originality. This has a certain amount of appeal but
seldom enough to draw people in by itself. The Original
Pantry atmosphere draws few people; that of Knott's Berry
Farm and the Beachcomber draws many.
The subject of atmosphere will be further discussed
in its relationship to advertising in a later chapter.
VII. THE IMPORTANCE OF THE RESTAURANT INDUSTRY
Unfortunately, statistical data available do not
differentiate between specialty houses and the field.
Many of them do not even differentiate between those
places which are primarily eating places and those, such
as drug stores, which handle food as well as many other
items.
The figures do, however, show the importance of the
restaurant industry. In 1950 gross sales for the United
171
8
States exceeded twelve billion dollars. Of that twelve
billion dollars, three hundred million, or two and one
9
half percent, were accounted for in Los Angeles. This
I gross makes the restaurant industry the third largest in
i
the nation, being surpassed only by the automobile and the
10
food industries.
There are approximately 11,000 establishments which
serve food in Los Angeles County. Of these, 6,500 are in
the city of Los Angeles. Somewhere between 2,500 and
3,000 of these are primarily eating places.1" 1 ' It has been
estimated that the food serving establishments of a city
such as Los Angeles will serve at least twenty-five
j percent of all the meals served in that city and that
i about half as many for the country at large are served in I
i i
i
i
8----
Authority; Mr. Robert M. Riley, Assistant
Secretary of the Southern California Restaurant Associa
tion. The national figures are based on the findings of
the Department of Commerce. The local figures are based
on the findings of the Restaurant Association.
9
Idem.
10
Idem.
11
Idem.
\
\
\
18
12
commercial eating places.
Although figures are not available, it can safely
be stated that the number of specialty houses in the
United States has been increasing and that the number in
Los Angeles has been increasing faster than the national
average. Aside from rapid population growth, the fact
that Los Angeles is a vacation area partially accounts for
13
the rapid growth of specialization here. Tourists
appreciate the novel in food service as in anything else.
VIII. PROCEDURE FOLLOWED
Collection of Data
For the most part, the data presented herein was
obtained through personal interviews with people connected
with the restaurant industry in Los Angeles. Since no
previous related studies were found and since the only
useful books dealt with the restaurant industry as a whole,
this paper will not be too well documented with references
to published materials. Very often experienced restaurant
people have little time or inclination for writing. Since
12
Woman's Institute of Domestic Arts and Sciences,
Establishing a Food Business (Scranton. Pennsylvania:
I International"~Textbook Company, 19^2), p. 1.
Authority: Mr. Robert M. Riley.
19
they are the best source of material on this subject, '
information must be compiled in such a manner as was
followed here.
In every case, either an owner or a manager volun
teered the information needed. Only successful and well-
known restaurants were covered in this study. To some, it
might appear that the beginning and less successful
operators should have been included. It was presumed that
the successful operators have encountered the same
problems as the others and are better able to distinguish ’
between real specialty house problems and Just plain
mistakes.
The Questionnaire
With the advice of Mr. Robert M. Riley of the
Southern California Restaurant Association, a list of
questions was compiled. The operators* answers to these
questions provide a great deal of the material used in the
body of the thesis and that used in the case histories.
The questions follow:
1. Would you object to having your name and the
name of your restaurant used in this thesis if the
material is submitted for your approval before publication?
2. Do you have any articles or other information
on your restaurant?
3. How long has the restaurant been open; what Is
its history?
. Is your organization engaged in any other
business activities?
20
5. What is your idea of a specialty house; are
foreign restaurants included?
6. ©f how much importance is location to a
specialty house, to other restaurants?
7. After a following is gained, is location still
important?
; 8. Why was this location selected?
; 9. Is it an advantage to be located near other
restaurants, other specialty houses?
10. Is Los Angeles a good location for specialty
houses?
11. Do you know why some towns, cities, or regions
might or might not be good locations for specialty houses?
12. Were public transportation, highways, and park
ing considered when this location was chosen?
13. How were the first prices and the clientele to
be catered to, decided?
l*f. Is your clientele the general public, foreign,
wealthy, tourists?
15. Do customers tend to return as often as those
of regular restaurants?
16. Is your business more seasonal than that of
other restaurants?
17. Would it pay to increase facilities to the
point where there would be little or no wait for a table
I even on rush nights?
I 18. Does the space allotted to the bar and that
j allotted to the dining room guarantee the highest possible
| turnover?
19. What is the turnover per chair at breakfast,
lunch, and dinner?
20. What hours is the restaurant open?
21. What are the peak hours?
22. What do you serve?
23. What are your prices?
2k-. What is your buying procedure?
25. Does specializing permit purchasing from foreign
markets at a saving?
26. Do you watch commodity prices, try to buy cheap
for future delivery?
27. How does specializing effect storage problems?
28. What are your food costs? (percentage)
29. What are your labor costs? (percentage) |
30. How do your other costs compare with those of i
other restaurants?
31. How many employees are there in each department
1 of the restaurant?
I 32. What is your training policy?
21
33* Does the fact that you specialize simplify
training?
3*f. What is your labor turnover?
35. Should specializing reduce labor turnover?
3o. Are your employee relations satisfactory? Have
you made the usual provisions for tips, vacations, meals,
and insurance?
37. Do tips vary much from the average non
specializing comparable restaurant?
38. Does specializing reduce pilferage problems?
39. What food control and waste checks do you employ?
*f0. Can a higher quality item be turned out when it
is the only one served?
*fl. Are there important serving advantages?
b2. Is avoiding slow moving items quite an advantage?
*+3« Is there a saving on kitchen equipment?
M k Do you attempt to put out a well balanced meal?
What is your advertising policy?
M'O. What are the advertising advantages in special
izing?
M-7. Is it wiser to put a low price on the meal and
charge extra for such things as a beverage or to set a
price for a complete meal?
** 8. Is it more difficult for you to raise prices -than
for regular restaurants which can change the name of an
item when its price is raised?
k9. What are the important restaurant planning
points?
50. What is the difference in the profit prospects
for the specialty houses?
51. Is there a possibility that specialization is a
temporary fashion?
52. What are the effects of the business cycle on
specializing restaurants as opposed to non-specializing?
53• What are the effects of war on business, profits^
and sources of supply?
51 *. Do others successfully capitalize on your
reputation?
Presentation of Data
Each chapter of the study covers a certain phase of
restaurant operation or some major consideration. Buying
is an example of a phase of restaurant operation and
22
location is an example of a major consideration.
In each chapter any pertinent findings of writers
and the results of the survey, as far as the point under
, discussion is concerned, are set down. The findings of the
I
writers are usually of a general nature and apply to
restaurants as an industry. However, they do provide
points of departure at times and at other times they estab
lish the similarity between specialty house problems and
those of the industry as a whole. Only where the problems
I differ to an appreciable extent was it found necessary to
go into detail. The experiences and the beliefs of the
operators contacted are used either to substantiate an
i
| opening academic statement or to show why it does not apply
i
! to specialty houses in the Los Angeles area. Each chapter
i
! is concluded with a summary aimed at defining the contribu
tion of the sections of that chapter to the entire study.
The final chapter summarizes the entire paper,
except for Chapter XI which covers questions of long run
t
importance, and lists the conclusions and recommendations
of the restaurant people and of the author. Chapter XI,
which partially depends on the earlier chapters, is consid-
! ered to be somewhat of a summary itself.
i
i The discussion in the following chapters is intended
l
! to be rather informal and in the nature of a summary. The
23
detail has been reserved for the Appendix where the sixteen
specialty houses surveyed are considered in detail. The
seventeenth Appendix section covers the Los Angeles Farm
er’s Market, which embraces several specialty booths. It
was not compared with the sixteen in the body of the paper
since its type of operation is unique.
1
1
I
I
CHAPTER II
LOCATION CONSIDERATIONS FOR SPECIALTY HOUSES
I. A GENERAL STATEMENT ON RESTAURANT LOCATION CONSIDERATION^
i
Restaurant operators cannot agree as to the impor- !
I
tance of location. Some maintain it is everything. Others
do not go that far but do contend that ”a poor location is
always going to be an expensive handicap."3- As far as
specialty houses are concerned, the statement which follows
I
comes the closest to being correct. ’ ’ Location makes little I
!
difference if you have other features that go to make up a j
good restaurant.A popular specialty would certainly be
a feature.
In this chapter, the main considerations which in
fluence location will be taken up. On some of them, there
will be statements by writers in the restaurant field.
Most of the material, as throughout this paper, will be the
i
jfindings of the restaurant operators interviewed.
■ II. TYPE OF DISTRICT
I
! The criteria for location here (of a specialty
i place) are much the same as in the large showy
place. Since again you will be serving a select
clientele, you can either be in the heart of
■4>ahl, Restaurant Management, on. cit., p. 9.
j
! ^Ibid.. p. 19.
........ 25
things and smart, or off the beaten track and
a discovery....Here it is not so much location
as_what you have to offer that can make your
name and fortune.3
The operators are in general accord with the author
of the above statement. It is wisest to choose a location
where the uniqueness of one’s type of operation would be an
advantage. To do this, a Chinese restaurant would locate
I in China Town. By locating elsewhere, a Chinese restaurant
I would forfeit some tourist trade but might gain a central
■
location, an asset to those catering to all classes, or a
t cheaper contractual rent.
It Is believed that high contractual rent will ruin
a restaurant far quicker than a low-rent location which is
otherwise an undesirable one for its type of operation. In
time, many of the disadvantages of this poor location,
| especially where there is the advantage of low contractual
rent, can be overcome. People want an excuse to travel and
a good specialty at the right price is just such an exeuse.
Specialty houses generally select a neighborhood in
which their scale of operation fits. If they intend cater
ing to a better class trade, they locate in a better class
I
neighborhood. |
i
i , *
I Madeline Gray and Vass De Lo Padua, How to Be A
Success in the Restaurant Business (New Yorks Greenberg
Company, 19*+$), pp. 17-1$*
26
Once a location has been developed and a specialty
house has become associated with its neighborhood, most
owners will not move it away. They might build a second
; restaurant in a more suitable location, however.
Restaurant Competition
Don't think you will be more successful if you
locate where there is not another eating-place in
sight....By settling in what is known as a res
taurant neighborhood, you will catch a lot of
people who are just hungry, but do not know
exactly what they want to eat....This principle,
however, works only if you settle among compet
itors who attract roughly the same class of trade
that you do.4-
As a general statement, the restaurant people would
agree with the above. Its writers could easily have had
Hollywood's "restaurant row" in mind. Today there is a
new trend, however, and that is away from the "row*’ ! High
contractual rents in the Hollywood area and fear of the
keen competition there are two basie causes of this trend.
The high mortality rate among roadside houses would
tend to substantiate the above quotation. People like to
travel and are willing to go out of their way for a good
III. A COMPETITIVE LOCATION
---------
Gray, op,, cit., p. 21.
Authority! Mr. Robert M. Riley
27
specialty but they will not by-pass an excellent one to get
to a good one.
It is more difficult to become established in a
restaurant neighborhood than in an undeveloped neighbor
hood. Once a restaurant is established in a competitive
neighborhood, the other restaurants and all comparable new
restaurants draw business to it as they are drawing it to
themselves.
Specialty House Competition
For many of the same reasons that it is an advantage
to be located near other restaurants, it is also an advan
tage to be located near other specialty houses. Some
operators, however, eontend a neighborhood can only support
one of each type specialty house. Experience has not just
ified this belief. The Captain’s Table welcomed the Fish
Shanty's coming to La Cienega Boulevard because its manage
ment believed another good fish house would help make the
people of Los Angeles more fish conscious.
Two specialties are seldom exactly alike. The Cap-
j tain's Table specializes in Eastern shell fish while the
jFish Shanty features Great Lakes fish. People who like one
itype of sea food might not like the other.
I
Scandia and Bit of Sweden are located within two
blocks of each other. Both serve smorgasbord and yet the
owners of both stated it is an advantage to be near the
other. If nothing else, one can catch the overflow from
the other.
i
If one specialty house were to duplicate another,
I
especially in a poor location, it is quite possible that
one or both would fail. This does not ehange the conclu
sion that it is an advantage for a specialty house, which
can compete, to be near other restaurants and other
specialty houses of all types.
j IV. A "JINXED" LOCATION
i
A restaurant failure "Jinxes" a location for all
other restaurants opening there. Whether there is some
thing to this superstition, whether the bad reputation of
1 one restaurant attaches itself to the successor, or whether
each fails because of organizational inadequacies, is
difficult to say. It generally holds that restaurants do
6
not do too well where others have failed.
There are noteworthy exceptions to this. Two
restaurants had failed in the building in which Lawry*s was
first opened. Qne had failed and one saw fit to move from
—
Authority: Mrs. Julie Layne, Editor of Key maga
zine. Key is a guide put out weekly for those who are
j interested in the best restaurants and entertainment in
Southern California.
29
the building in which the Fish Shanty is located, and five
had failed where the Round-Up is now doing so well.
It may be that the operators talked to, all success
ful individuals, have enough faith in their own ability to
believe that location disadvantages can be overcome. It is
possible that the operators of less successful restaurants
would attempt to avoid the so-called "jinxed” locations.
Nevertheless, a conclusion of this chapter is that
specialty houses can overcome most locational difficulties.
The bad reputation of a restaurant that failed is just
another difficulty.
Y. COMPETITION IN DIFFERENT DISTRICTS
"Competition is not the same in any two places.
! (However) people will not pay more in one place than
(
i
another, unless there are features which make it worth
while.
The management of Lawry’s considers La Cienega
I Boulevard to be the finest restaurant street in the world.
j
i Competition is at its keenest there. For that reason,
! successful operators in less competitive areas often fail
! on La Cienega. If they succeed they will be bringing new
I
i______________
1 7
'Joseph Oliver Dahl, Kitchen Management (New York:
Harper & Brothers, 1928), p. 231.
30
business to the ^row" for all to enjoy,
j Competition is severe in some areas because of a
1 great demand for eating facilities. Restaurants are
attracted by this demand. They attempt to gain all of the
i
; trade they possibly can. Some succeed in doing this, others
do not, and fail. Of those attempting the specialty house,
with its many advantages, competitively speaking, should be
' in a better position than the regular restaurants.
I It is a purpose of this paper to set down some of
j those advantages.
VI. ACCESSIBILITY, TRANSPORTATION, AND PARKING
If anyone intends opening a....restaurant, her
first business and her most serious one is the
choice of location. Locate centrally, with a
j constant flow of persons past your door....and
I you willf t have taken a first long step toward
success.
This quotation is an example of what the writers
believed to be the most important location consideration.
Neither transportation nor parking, generally more important
to a Los Angeles specialty house than accessibility,
received a very thorough treatment in any of the books
available for this sfeudy. Perhaps the reason for this is
that these books were written for the East, some of them \
i
a---------
°Alice Foote MaeDougall, The Secret of Successful
Restaurants (New Yorki Harper & Brothers, 1929)? p. 13«
31
many years ago, where cities are more eompaet and where
public transportation is relied upon.
Accessibility was not given too much consideration
by the houses studied. Those located in the Hollywood
area were designed mainly to catch the evening trade, which
travels by automobile. Of these, only Bit of Sweden
thought a more central location would be a more advantag
eous one. There were two reasons for this belief. In the
first place, the lunch trade suffers because the restaurant
is not located in a busy shopping or business district.
People do not make a big affair out of lunch as they do
dinner. In the second place, Bit of Sweden depends very
heavily upon the tourist trade. In turn, the tourists
depend largely upon public transportation. The more
accessible a popular restaurant, the more tourist trade it
receives.
Places such as the Original Barbecue and the Orig
inal Pantry, which depend upon all types of customers, are
more centrally located. The Original Barbecue has opened
a second restaurant in Hollywood. So far, business there
has not been up to expectations. This might indicate that
operations designed for the service of all types do not do j
well in less central locations.
Only the centrally loeated establishments seriously
32
considered public transportation as a location factor. To
the others, a record number of automobiles was a satisfac
tory answer to the transportation problem. Mr. Walter
i
Khott of the Berry Farm believes his establishment can*draw
within a radius of twenty-five miles. That gives him, by
his count, 1,500,000 potential customers, not even counting
the tourist trade.
The automobiles solve the transportation problem but
they pose another problem. That is parking. All of the
]restaurants surveyed have free parking for their patrons.
The Round-Up and the Cock'n Bull built their business with
out parking, but like the others, they now have it and also
like the others, they would not consider a new location if
parking facilities were not available.
Mr. B. G. Tohl of the Captain^ Table stated that a
»
1
j city restaurant should have one half as much parking as it
has chairs.
VII. ABILITY TO MOVE
An Important question is, can a specialty house take
most of its trade with it if it should move? Most of the
operators do not want to find out the answer to this
question.
It seems logical that the better established restauv
I 33
rants, especially those with higher class clientele, should
find moving the easiest.
A move by any restaurant means a loss of some food
: customers and a gain of some others. lie gain can outweigh
the loss. As far as bar business from passersby is con
cerned, there might be an almost complete loss if the move
were a long one.
j A restaurant tends to become a part of its surround-
j ings and the one comes to be associated with the other. It
i
! might be completely out of place but the customers will
come to believe that it belongs there. The longer a res-
j taurant remains in one location, the more difficult it is
! for the owner to separate it from its surroundings. The
j
| Beachcomber building was built across the street from the
I
original location. Mr. E. T. Bachtold stated that better
locations were available. However, the Beachcomber had
already become part of that neighborhood and any change
would have meant the loss of important atmosphere.
The operators agree that it is easier to move a
specialty house than a regular restaurant. Its ability to
put out the best meals and the advertising advantages it
enjoys facilitate moving so long as the move is made to a
comparable neighborhood. The loss of trade will depend on
i
the new location, how well established the specialty house
3^
was before the move, and its clientele.
VIII. IS SPECIALIZATION RESTRICTED TO LABGE CITIES?
It is further desirable to study the character
istics of the city in which one contemplates
opening a restaurant. New York is ideal because
it has an enormous transient population.. . . .Avoid,
as you would the pestilence, those towns whose
inhabitants are home-loving, home-staying. They
may make a good showing at lunch....But like the
proverbial lady-bug, they fly away home for
dinner.9
Is specialization restricted to large eities? The
above quotation seems to be a long way of giving a more or
less ’ ’ yes" answer to this question. Mr. B. G. Tohl of the
Captain’s Table was the only operator who believed that
some specialty houses could survive without large popula-
i tions from which to draw. He stated that sea food houses
]
t often do well in small Eastern towns even without highway
or tourist trade. Sea food is probably basic in the diets
of those people and a fish house can prosper in such towns
for much the same reason that a Chinese restaurant can
prosper in a small Chinese settlement.
Mr. Walter Knott believes that roadside houses can
succeed so long as they are located where people can get to
them.
Q
7MacDougall, ©e, . eit.. pp. 13-11 *.
35
Foreign restaurants, sinee most of them eater to the
average American, require large populations. Chinese res
taurants enjoy an advantage where there is a large local
Chinese population. The same applies for other foreign
restaurants. It is not that they depend upon these people
for patronage but their presence in the community makes the
public more eonscious of their customs and foods.
* Ifoless a specialty is basic in the diet of the local
population, its service requires a large population from
which to draw. That population need not even be loeal if
the specialty house is readily available to travelers.
IX. IS LOS ANGELES A GOOD SPECIALTY HOUSE TOWN?
The operators seem to be divided on an answer to
this question. Many believe that the citizens of Los
Angeles do not know good food. Mrs. Layne of the Key con
siders the local people small town diners. Some operators
contend that New York is the best specialty house town and
that San Francisco is the best in the West. Those cities
are considered to be more cosmopolitan than Los Angeles.
Mr. E. T. Bachtold of the Beachcomber maintains that
if New York or any other city is a better specialty house j
town than Los Angeles it is because there are more people
there and more apartment dwellers among them who find it
convenient to eat out.
The operators do agree that in the last ten to
fifteen years Los Angeles has made great strides in becom
ing a good restaurant city. It would appear that those who
1 i
' i
j still contend that Los Angeles is not a good specialty
house town are not speaking as operators who are mainly
| interested in profits but as individuals who like to believe
i
1 it takes years for a city to develop an understanding of
I foods.
i
j X. CHAPTER SUMMARY
"After you make your place famous for good food....
you can disregard every rule on location in this book.1,10
Taix French Restaurant just about did that to begin
with. It located in one of the poorest districts of Los
Angeles, away from all comparable restaurants. Although
fairly accessible from downtown Los Angeles, there is
nothing else in that area to draw or hold a dinner crowd.
All that area had to offer was low rent and a novel atmos
phere. That must have been enough, however.
The opening quotation was designed to put across the
point that location troubles should be worries of the past
for the successful restaurateur. In spite of this, there
in
■^Gray, ©g. cit., p. 22.
3 7
are basic location rules to be observed. Those of the most
importance to specialty homses ares
1. Cheap rent. This is one of the first things to
i look for unless a firm intends to compete in a high rent
district such as La Cienega Boulevard.
2. Locate near other restaurants. It is even
advisable to locate near other specialty houses so long as
there is not a complete/conflict of specialties. All the
restaurants in a limited area should cater to the same
class clientele.
3. Be hesitant about buildings in whieh other res
taurants have failed. They are not * * jinxed” but bad
reputations can carry over and for this reason a given
building might be a poor restaurant location.
N-. Room for expansion and room for parking. Very
few restaurateurs begin with enough capital to build the
most profitable size restaurant. Expansion funds usually
come from earnings. Space should be obtainable when funds
are available.
5- Choose an accessible location. A certain feel
ing of accomplishment results from the finding of a secluded
restaurant. Heavy traffic past the door is more profitable,
however. j
6. Do not leave a profitable location. A restaurant!
38
becomes a part of its location. It requires a great deal
of advertising to make it part of a new location.
CHAPTER III
THE RESTAURANT PUBLIC AND BUILDING CONSUMER ACCEPTANCE
To Mrs. Layne of the Key, the restaurant patrons in
Los Angeles are small town diners. In New York, she
stated, a table, some chairs, and good food are all that a
restaurant needs. In Los Angeles, people make a big thing
out of dining. At times it appears they are more inter
ested in the atmosphere than the food.
I. THE RESTAURANT PUBLIC
I
According to Mr. Ray Fling, as quoted by Mr. J. 0.
Dahl, there are ten individual classes of restaurant
customers. They are the following:1
Shopping Office Workers, Women
Society Family
Tourist and Transient Factory Workers
Professional Men and Women Laborers and Mechanics
Office Workers, Men Rural
Many restaurants successfully cater to more than
one of the ten classes. This can be done when there is an
overlapping within the classes or when the appeal of loca
tion, price, or some other factor is exceptionally strong.
Normally,
The banker will run from the poets, and the
dowagers will surely flee from the workers,
1Dahl, Restaurant Management, op. cit.. p.
md
(so) you must make your choice....For when
your restaurant is established, you will
find it very difficult to change.
The specialty houses do not cater to the lowest
income group but emphasizing turnover, as most of them
do, they have set their prices so that all others might
patronize them occasionally.
Type of People Catered to
It does not appear that specialty houses are set up
to cater to any particular occupational or financial
group. If anything, specialty houses have the ability to
overcome group barriers. Mr. E. T. Bachtold, manager of
the Beachcomber, stated that people eat because they have
to, and for pleasure. If a specialty house has a reputa
tion for serving the best steak in town, all classes will
patronize it. Those who can seldom afford to eat out will
go there as will those who can afford to eat anywhere they
ehoose.
It seems that people expect more for their money
when they buy a specialty than when they buy a regular
dinner. To give them more, a restaurant must have a high
volume or high prices. Most specialty houses depend on
the high volume. To insure the fastest turnover possible,
bl
most of them do not take reservations. This general
policy encourages all but the very wealthy.
Knott's Berry Farm and Bit of Sweden cater to older
people and family groups. They believe that these people
are the more dependable customers and that they are finan
cially better able to support a restaurant. The Berry
Farm does not serve liquor and Bit of Sweden does not en
courage its bar business. This policy has won the approval
of the older and the family groups.
The specialty houses that serve excellent food at
fancy prices are largely catering to the upper income
groups. The average wage earner cannot afford to pay four,
five, or six dollars every night for a dinner. He can
afford it occasionally, however. This makes his patronage
of some value even to the more exclusive specialty houses.
Many foreign restaurants do not cater to the people
whose food they serve. Mexican foods at El Cholo are
seasoned to suit American tastes and real Chinese foods,
according to Mr. Doc Wong of Grandview Gardens, bear little
resemblance to those featured in the Chinese restaurants of
this country. El Cholo, in trying to please American
tastes, has produced something comparable to the Hindu
dishes of India. By doing this it has gained as much Hindu
trade as it has Mexican trade.
b2
Grandview Gardens employs a four piece dance band
from 9*00 P.M. to 12s00 P.M.. The others, at most, have
recorded music. The lack of entertainment discourages many
young people and people who are looking for excitement.
This results in a quiet, well-mannered atmosphere which
appears to be common to specialty houses.
The Tourist Trade
The operators agree that a decline in business
volume is not uncommon during the summer months for those
restaurants serving heavy foods such as steaks and roasts.
Those featuring lighter foods, salads, sea food, Chinese
dishes, can normally expect an increase. Fortunately for
those serving the heavy foods, the summer decline is not
apparent in Los Angeles. In fact, summer is the best sea
son for both restaurants specializing in heavy foods and
in light foods. The tourist trade, of course, is respon
sible for this. People will try the nationally known res-
tatirants in spite of the thermometer reading.
During August, the biggest tourist month, Lawry's
and the other restaurants with national reputations are
f
i
filled to capacity. The overflow and the countless people
who have heard that La Cienega Boulevard is Los Angeles's
! "restai*rant row," fill the other restaurants. At that
!
I time, location means more than reputation.
The Beachcomber, a restaurant with a national
reputation, estimates that "steadies” account for eighty-
percent of its business and that tourists account for the
other twenty pereent.
Bit of Sweden, another restaurant with a national
reputation, depends very heavily on the tourist trade.
According to Me. Fred Glow, the owner, profitable operation
without it would be impossible.
Knott’s Berry Farm also depends heavily upon the
tourists. Their advertising is designed to bring in the
tourist trade.^
For the average specialty house, which only has a
local reputation, the tourist trade represents a minor per
centage of business which increases enough during the
siammer months to maintain the total volume.
Since there is the belief that the specialty house
does the best job of preparing its dishes, it can be
asspmed that they attract more wandering tourist trade than
the regular restaurants do.
II. BUILDING CONSUMER ACCEPTANCE
Building Repeat Business
Without repeat business, restaurants, like most
o
JSee Appendix, Knott’s Berry Farm, p.163 on this
point.
other businesses, could not survive. Building this is of
prime importance to all except a few road houses and those
restaurants located in such places as railroad stations.
The specialty houses depend upon the "steadies" too.
Since people like variety, a specialty house cannot expeet
the same people to patronize it night after night. The
manager of El Cholo considers a person a regular customer
if he comes in once a month.
Some operators claim that people visit their favor
ite specialty house as often as they visit any other
restaurant. For those specialty houses, this means a
decided advantage, in addition to the ability to draw cus
tomers from a larger area.
Building repeat business requires eareful planning.
The following points should be considered:
People like to be remembered. Managers and hosts
find it advantageous to remember the names, preferences,
k
and a little about each steady customer.
Those in the upper income groups are usually willing
to pay for the convenience of being seated when they arrive
at a restaurant. Reservations must be accepted if the
steady patronage of these people is desired. A eharge
k
Townsend. Griffin, "Building Repeat Business^ The .
Restaurant Digest, (December, 1950)? 3»
account plan, such as that of the Beachcomber should be
considered.
Where turnover, rather than high prices, is to be
depended upon, waiting should be made as pleasant as
possible. Lawry's, with one of the largest restaurant
lounges in the United States does an excellent job of
making people comfortable.
An atmosphere which wears well also has a business
building value. If people enjoy being in a restaurant, it
should not be difficult to make steady customers of them.
The Effects of Turnover
The operators agree the average member of the res
taurant public believes that he can get more for his money
at a specialty house than at a regular restaurant. If a
dish costs more at a specialty house, it is of a higher
quality or part of the price covers exceptional atmosphere,
convenience, or service.
High quality dishes are common to those specialty
houses surveyed. Exceptional atmosphere, convenience, and
service are not common to them all. When these factors are
lacking, price becomes a major attraction. The trade will
5
See Appendix, Don the Beachcomber Cafe, p.223 on
this point.
go where the best dinner for the lowest price ean be
obtained. Specialty houses, as a group, enjoy advantages
in buying, cooking, and serving. These enable them to
serve more meals than the average restaurant. The profit
margin per meal can be lower than that of the regular res
taurant and the greater turnover will more than make up the
difference.
It must be difficult for the new customer to imagine
how the Original Pantry can make a profit on its steak
dinners. The prices, from one dollar to two dollars and
seventy-five cents, could only leave a slight profit margin.
What the new customer does not know is that the Pantry has
a turnover of thirty each day. In that sixty-seat estab
lishment, over 1,800 people are served daily.
Even large expensive places such as Lawry’s and
Stear’s depend upon turnover. ttm the Beachcomber Cafe is
one of the few where quick turnover does not happen to be a
fundamental part of planning.
The Beachcomber, by serving the best Cantonese food
and the best rum drinks available in an excellent setting,
has been able to set prices at a point where a substantial
margin of profit exists.
The Demand for Reservations
The taking of reservations, even for specific tables
if they are desired, is a must for those restaurants
catering to the higher income groups. Those people are
willing to pay for the convenience of being seated immed
iately upon arrival at a restaurant.
Where turnover is essential, reservations are not
made. Reserved tables are often unoccupied for a substan
tial period when a party does not arrive at the appointed
time.
Bit of Sweden has what seems to be an ideal set-up.
Its kOO seats make possible the acceptance of reservations
without a reduction of turnover. Tables of all sizes are
almost always becoming available. If a table for two at
7*00 P.M. is desired, one usually becomes available within
a minute or two of that time. This makes holding a speci
fic table for more than four or five minutes unnecessary.
The Beachcomber, Scandia, and Cock'n Bull are run on
a reservation basis. Each of these restaurants has devel
oped an atmosphere which makes leisurely dining a pleasure.
For this and for immediate seating, higher priees can be
charged.
In addition to the reduction of turnover, reserva
tions have two other detrimental effects. Some operators
have observed that patrons resent having to wait while
others are seated ahead of them even though they know that
b8
the other parties had reservations.
The adverse effect on bar business accounts for a
third argument against reservations. Some restaurants, the
Round-Up is an example, use their food as a "come on”. A
profit on the food is not expected. The profit comes from
the bar business. While waiting for a table, a customer
will buy enough drinks to guarantee the owner his profit.
If reservations were taken, people would not arrive until
the appointed time. This would mean a critical loss of bar
business.
Psychological Aids
The belief that specialty houses serve the best
meals. — Restaurant people maintain, with justification,
that a specialty impresses more people than many good items
without any outstanding ones. The Lawry representative
offers their national reputation as proof of this.
The American people are surrounded with the results
of specialization. It is only natural that they should
believe it can be extended to food service. With this be
lief goes the general opinion, shared by Mr. E. T. Bachtold
of the Beachcomber, that people discuss the restaurant
business, from the consumer standpoint, more than any other
^See Appendix, Lawry's, "The Prime Rib*1, p. 131 on
this point.
* f 9
business. Accepting the above conclusions, the psycholog
ical advantages enjoyed by the specialty house can be
understood.
The psychological effect of waiting for a table. —
It must be human nature to want what one cannot have. The
harder something is to get, the better it must be. If
there is a line waiting for tables in a specialty house or
even a regular restaurant, people assume that the food is
worth waiting for. If there is no line, people are dis
appointed. They immediately begin thinking that the
restaurant is "slipping".
Many operators contend that the best advertisement
is a line of people waiting to be seated. Mr. Dewey Logan
of the Original Pantry said that if he did not have a line
at meal time he would take out tables to create one.
The specialty houses are best able to capitalize on
the beneficial effects of waiting because people are
already convinced that they serve the best meals. If a
regular restaurant Is crowded, people assume they can go to
another and get the same thing.
Of the sixteen specialty houses surveyed, only
Khott's Berry Farm and Grandview Gardens did not believe
there is an advantage in having people wait to be seated.
50
III. CHAPTER SUMMARY
The specialty houses eater to all but the lowest
income groups. Even those that cater, more or less, to the
higher income groups are within the financial reach of many
with modest incomes.
Because of good food, the efficient service required
by an attempt at high turnover, the quiet atmosphere par
tially attributable to the absence of entertainment, except
for background music, and the reasonable prices, the
specialty house can draw from all of the special groups
which form the restaurant public.
Repeat customers are essential to businesses in
general. Specialty houses are no exception. They are in
the best position of all restaurants to draw repeat evening
business. The public has been convinced that the specialty
house does the best Job on its dish. When people want that
dish, they go to the specialty house.
Tourist trade is important. The restaurants with
national reputations draw many tourists. Those with only
local reputations have to be content with catching those
tourists who pass their doors. Specialty houses are in a
better position than the average restaurant, for a
specialty has greater attraction.
The average specialty house caters to those who are
interested in the most for the money and are not too con
cerned with exceptional atmosphere, convenience, and
service* To provide the most for the money, turnover must
be maintained at a high level* Only a few specialty houses
are in the enviable position of being able to eater to
wealthy people who are willing to pay for the specialty and
for the privilege of dining in style.
People prefer the restaurants where they have to
wait for a table. They believe that if others are willing
to wait, the food must be good. This does not always hold
true, but generally it takes a specialty to make people
content to wait.
CHAPTER IV
THE PROCUREMENT AND SERVICE OF FOODS AND BEVERAGES
I. FOOD PROCUREMENT
Restaurant Association figures show that eating
places use twenty-five percent of all food grown, processed,
or manufactured in the United States.^ This figure seems
rather high. Nevertheless, buying is big business. A good
buyer can mean the difference between profit and loss.
Most specialty houses buy through local jobbers just
as most regular restaurants do. Because of inadequate stor
age facilities and limited operations, they are unable to
enjoy the benefits of large scale buying. They do manage,
however, to contract for future delivery of enough of their
i
i
[specialty to obtain a price advantage there.
The large specialty houses, like all large restau
rants, are able to take advantage of price fluctuations.
Since they buy fewer items in larger quantities than regular
restaurants, they are in the most favorable position of all.
Since buying does not vary appreciably from that of
regular restaurants, it need not be considered here in de
tail.
■^Authority: Mr. Robert M. Riley.
53
Quantity Purchases 1
Futures. — "The buying of futures is almost neces
sary if the buyer wants a guaranty of standard quality
throughout the year."2 A buyer will contract for future
delivery of a certain commodity at a given price. If
prices go up, he gains and if the supply happens to be cut
off to others, he also gains. In this day and age there is
not much danger that the price will go down, but if it
should he still might not have to lower his prices during
the period required to exhaust the existing inventory.
J. 0. Dahl quotes one Robert D. Regan who holds that
buying in large amounts is not as profitable as it might
seem. He argues that the faster turnover offsets the small
added cost of buying small quantities. He only suggests
buying canned goods and imported goods on the futures
market.^
The small operators and those with inadequate stor
age facilities are forced to agree with Mr. Regan's state
ment.
Advantage of Storage facilities. — Buying in large
quantities and watching futures can mean a great saving for
a restaurant. By carrying a $75*000 inventory, the Bit of
i
p
Dahl, Kitchen Management, op. eit.. p. 215.
^Dahl, Restaurant Management, op. cit.. p. 209.
Sweden has saved from $10,000 to $15*000 a year, above
storage costs. By buying 8,000 turkeys at once, a six
months' supply, ten to twelve cents a pound has been saved
by that organization.
Those restaurants that specialize in foreign dishes
are often forced to buy in quantity in order to guarantee a
supply. This is especially true for those featuring
Chinese foods, due to the unsettled conditions in the
Orient.
All foreign goods are either bought through local
jobbers or brokers. A broker's license is required of
those desiring to buy in or directly from a foreign country.
Food Producing Activities
What seems to be an ideal, although exceptional,
situation occurs when an organization is able to produce
some of the food it distributes. Smith Brothers' Fish
Shanty and Khott's Berry Farm are able to do this. Smith
Brothers catches and processes its own fish. The Berry
Farm raises its own berries, rhubarb, and some of its
vegetables.
II. THE FOODS AND BEVERAGES SERVED
55
Menu Considerations
Managers say the following points must be considered
k
in making out a menus
Seasons Dishes and time required for
Dietetic values service
Maintaining qualities A la carte or table d1hote
Color combinations ” service
People to be served Food on hand or that can be
Weather conditions obtained
Amount of waste in Prices at which food can be
preparation purchased and resold
When first opening, the specialty house operator
must give these points very careful consideration. He must
attempt to forecast future events. He must be sure of his
sources of supply. The regular restaurant can discontinue
serving a dish whieh becomes too expensive to prepare. A
specialty house very often cannot. The regular restaurant
can serve foods that fit the season. The specialty house
should decide on foods that come the closest to fitting all
seasons.
Such points as dietetic values, color combinations,
and the amount of waste in preparation depend on another of
the points. That is, the people to be served. Dietetic
values and color combinations are not too important to
i f
Dahl, Restaurant Management, op. eft., p. 120.
56
truck drivers. Proper color combinations are essential,
but waste is not too important at such places as the Beach-*
eomber.
In short, all of the points must be earefully con
sidered. A serious mistake by a specialty house can prove
fatal. A serious mistake by a regular restaurant can
usually be corrected in the next day's menu.
Price Then Menu. Menu Then Price
Hundreds of eases have proven out the fact
that people want quality and are willing to pay
for it. Then buy the best and fix your price
afterward for a legitimate profit and you are
sure to get the business.-*
The commonest way for a specialty house to determine
its menu and prices is by starting with a main dish.
Lawry*s, as an example, chose roast beef. The next step
was to discover what people expect in the way of side dish
es when they order roast beef. It was decided that a
tossed salad, breads, mashed potatoes, and Yorkshire
pudding would please most people. Persons desiring a
beverage, a vegetable, or dessert could order it a la carte.
After setting up the basic food combination, the price, for
which it eould profitably be sold, was determined.
The Round-Up approached the problem from the other
^Dahl, Restaurant Management, op. cit., p. 210.
57
side. It was first decided that a great number of people
are willing to pay one dollar and fifty cents for a dinner
which should sell for more. Then, what could be sold at
that price, perhaps without profit and probably without
loss, was determined. This approach made food the ncome
on*1. Liquor sales were intended to be the profit producing
factor.
For some specialty houses, public opinion has pretty
well determined what is to be served and at what priee.
Chinese and Mexican restaurants belong in this category.
People expect Chinese restaurants to serve chop suey and
rice, and they expect Mexican restaurants to serve tamales
and fried beans. They also expect these dishes to be
reasonably priced. This does not exclude originality, but
it certainly restricts it.
Since specialty houses usually depend on turnover,
they try to feature dishes which are quick and easy to
prepare and serve. The fried potatoes, eold slaw, and sour
dough bread, served with the Original Pantry steaks, are
easily prepared and served. Simplicity in the menu then,
is another point whieh the specialty houses stress.
The Limited Menu Ideal
It has been a recognized fact among many of
the most successful restaurants that a limited
variety of listings on the menus that are well
58
prepared and merchandised bring in the mpst
business and result in the most profits.®
Specialization is not a fad, but the ultimate.
Buying, preparation, and service are all simplified when
only a few items are handled. Most operators, when in a
position to do so, will reduce their menu. The limited
menus of private clubs and hotels exemplify this. They can
affort to list a limited number of offerings because they
eater to a trade which can be depended upon. If they had
to appeal to everyone passing their doors, the situation
would be different.
Even when a large variety is offered, certain basic
dishes are the ones most often ordered. If the menu were
limited to these basic dishes, only a small percentage of
the business would be lost. The savings in storage,
spoilage, and service might more than compensate for this
loss.?
Most foreign restaurants and some fish houses offer
a large variety. Some of the foreign restaurants do this
because they believe it is necessary to carry all the
dishes for which a country is known. Very often the ingre
dients are usable in many different dishes. This permits
%1 chard A. Van Nostrand, ' ’Test Your Menu”, The
Restaurant Digest. (Oetober, 1950), 1.
?Dahl, Kitchen Management. op. cit.. p. 168.
them the advantage of offering a variety as well as the
advantage of buying a limited number of foods. Being able
to use the same ingredients in many dishes gives Bit of
Sweden a serving advantage over the average restaurant even
though eighty-two different dishes are served. This advan
tage does not extend over other specialty houses.
Onee a limited menu has been set up, it should not
be varied unless certain foods become unavailable or the
quality of those available deteriorates. There are more
complaints from people who resent a change than there are
from people who tire of a particular meal, according to
Mrs. Nelson of Knott's Berry Farm.
A Balanced Meal
People who are looking for balanced meals do not
look for them in specialty houses. The operators agree
that meal balancing is fine in the home and is an essential
in the hospitals, but people do not look for balanced meals
in steak houses and Mexican restaurants. They even resent
any attempt at telling them what their meal should consist
of. When they order steak, they want all the "trimmings".
Even some of those establishments that cater to the
family trade do not put out a dietetically correct meal.
The Berry Farm's chicken dinner is too starchy but people
like it that way. Miss Smith of the Fish Shanty and Mr.
60
P. L. Larquier of Taix were the only operators who had
made an attempt at balancing meals. Since Miss Smith had
been catering to the family trade, she might have thought
it wise to put out balanced meals.
The Chinese and the Scandinavian restaurants are in
a fortunate position. They offer such a variety that it
is no problem for a customer to balance his meal. Meal
balancing, however, was not the reason for offering such a
selection. People expect variety in such foods and so
variety is what they get.
The Serving of Liquor
Liquor presents many problems. Some people refuse
to eat where it is served. Others refuse to patronize
expensive restaurants if liquor is not served. Liquor
brings with it many undesirable people, as far as the
quiet, respectable eating houses are concerned.
Those restaurants, such as Knott’s Berry Farm, whieh
have established a family type atmosphere can do nicely
without liquor. In such restaurants as the Original Pan
try, where large portions, reasonable prices, and fast
turnover are emphasized, liquor can be done without. Al
though profits are higher on liquor than on food, it might
not pay a place such as the Pantry to put in a bar. In the
first place, space is not available and in the second
6l
place, a bar would reduce turnover. Liquor encourages
people to dine slowly and make an "affair" out of eating.
The Pantry cannot afford to have people dining slowly.
Due to a good job of advertising, many people assoc
iate Mexican food and beer with one another. This virtu
ally requires Mexican restaurants to serve beer. French
food and wine are also considered to go together.
The large Hollywood restaurants enjoy the patronage
of many people who dine out purely for the pleasure of
doing so. Even though they do not provide entertainment,
these restaurants can hold their customers for a good part
of an evening. It is not uncommon for people to stay two
hours at the Beachcomber. If it were not for liquor, few
customers would stay more than half that time. 'They may
drink very little, but they still expect to have liquor
available.
The Round-Up induces people to come In by means of
low priced food. There food is used as a "come on". Other
operators might use a special atmosphere or entertainment.
Profit is derived through the sale of liquor. It is truly
an essential.
III. CHAPTER SUMMARY
Buying, for all restaurants, is dependent upon the
size of operations and the storage facilities available.
62
Quantity purchases, because of discounts, and the buying of
futures, because of price fluctuations, can be profitable
undertakings. They are more profitable for the specialty
house than for the average restaurant since it buys fewer
items ''in larger quantities.
The ideal situation would seem to exist when an
organization can produce some of the food it sells.
There are menu considerations which confront all
restaurant operators. When first opening, the specialty
house operator must give these points very careful atten
tion. A regular restaurant can correct and adjust its menu.
Often the specialty house cannot.
A continued demand and the ability to meet that
demand at a profit are the most important considerations.
These functions require a study of the people to1 be served,
as well as a knowledge of buying and methods of preparation.
Specialty house customers expect ”a good value,”.
They also esqpeet the side dishes which are customarily
served with the specialty. A balanced meal is of little
coneern to the average specialty house patron.
The reduced food costs made possible by a limited
menu can almost offset the temporary loss of business such
a change entails.
The serving of liquor has its advantages and dis
advantages. In specialty, houses with lower priees where
turnover is emphasized and in those that cater to the
family trade, liquor can be dispensed with. For those
that cater to the higher income groups, the people who go
out to dine, not Just to eat, liquor is very important.
CHAPTER V
COSTS AND PRICE RIGIDITY
I. BREAKDOWN OF COSTS
Normally a restaurant can allow just so much of the
food dollar to go to each of what might be called the
factors of production. If food costs go up and for some
reason prices cannot, profits, or the amount set aside for
depreciation, or even wages will have to go down.
In their book, How to Be a Success in the Restaurant
Business. - * - Madeline Gray and Vass De Lo Padua set down what
part of the food dollar they thought could go to each' fac
tor. Their figures were a 19*4-7 estimate for the entire
restaurant industry. Increasing food and labor costs during
the past four years, and the possibility that costs in Los
Angeles are generally higher than the national averages,
explain the difference between the Gray figures and current
Los Angeles figures which are compared on the following
page.
The figures in the second column are those of the
Southern California Restaurant Association for the Los
Angeles restaurant industry in 1951.2 The other three
-*-Gray, op. cit., p. 2*t3.
Authority: Mr. Robert M. Riley.
65
columns show the high, low, and average costs for the
specialty houses.
TABLE I
Restaurants in General Specialty Houses
Cost Percentages Gray
Nat. figs.
Res. Ass'n
L.A.figs.
High Low Av.
Food 38 - 1+2 b0 - kb
52.5*
38 kb.2
Payroll - inel.
Mgr. salary
23 -
2g***
30 - 35 39.2**
25
30.2
Rent b -
7 b - 7 av. av. av.
General Overhead
- inel. int. &
depreciation
15 -
20 av. av.
****
av.
Profit
3 &
up 10 6i 8-V?
*For those houses which stated their food costs, the per
centages ran from thirty-eight to sixty-five percent. Both
sea food houses reported costs of thirty-eight percent.
These brought the average down to forty-four and two tenths
percent. The Coek’n Bull was the highest used with food
costs ranging from fifty to fifty-five percent. Fifty-two
and five tenths percent was taken as its average. The food
costs of the Original Pantry average sixty-five percent.
This figure was not used because it is felt that the Pantry
is unique in its operation due to its high turnover.
«A» jb
Payroll costs ranged from a high of thirty-nine and two
tenths percent at Bit of Sweden to a low of sixteen percent
at the Original Barbecue. This low figure was not used be
cause there was no distinction made between food eaten in
the restaurant and that sold to take out. The Cock'n Bull
and the Captain*s Table both had labor costs of twenty-five
percent. The average labor cost was thirty and two tenths
percent.
***The Gray-De Lo Padua figures on payroll eosts appear to
be very low. It may be that they included establishments
66
Complete figures for rent and general overhead were
not obtained. Aeeording to the operators, their rent and
general overhead costs are right in lime with the average.
According to L. Wilbur Smith in the Pacific Coast
Record, the average satisfactorily operated restaurant
shows a labor cost of thirty p e r c e n t .3 This would tend to
substantiate the claim that the Gray-Be Lo Padua figures
are too low for Los Angeles at the present time.
The food costs for the specialty houses, even in
cluding the fish houses with their relatively low eosts,
averaged higher than the Los Angeles range for restaurants.
This should be an inducement to patronize specialty houses.
{continued from p. 65)
*$*which are not primarily designed for the service of food.
Or it may be that payroll costs have increased substantial
ly in the Los Angeles area since 19*+7.
****Sinee figures on profits were usually not available, no
detailed comparisons earn be made. Profit prospects are
discussed in Chapter XI. Knott’s Berry Farm profits for
1950 were listed at six and one quarter percent. One other
operator said his profits average about ten percent. He
did not care to have the percentage associated with his
name. The two figures average at eight and one eighth per
cent. From all indications, it would appear that specialty
house profits are higher than those of the average restau
rant. The six and one quarter percent figure published by
Knott’s Berry Farm seems very small for an organization
whieh has broken the previous year’s dinner sales record
every year for the past fifteen years. Perhaps much of
what would have been profit was used for expansion.
^L. Wilbur Smith, ’ ’Lowdown Given for Food Profits,
Pacific Coast Record, XXX7III (May, 19*+7), 52.
t »
67
Labor costs were lower than the average. Smith
Brothers Fish Shanty reported high labor costs, between
thirty-four and thirty-five percent. The management con
tends labor costs are high because the La Cienega Shanty
has only been in operation for a few months. Bit of Sweden
reported exceptionally high labor costs. Excessive waste
would be their only alternative.
The labor figures substantiate the operators’ belief
that labor costs are lower in a specialty house than in a
regular restaurant.
II. PRICE RIGIDITY
It would seem to the easual observer that p&trons
might closely associate the specialty of a house with its
price. If prime rib costs three dollars and twenty-five
cents one night at Lawny’s, people might expect it to cost
the same the next night. Would there be resentment if
prices were raised to meet increasing costs? Mrs. Layne of
the Key believes there is generally no price rigidity.
This does not apply to eertain types of food, such as Mexi
can and Chinese, which people have come to believe are
inexpensive to prepare.
In 19^8 it was necessary for the Cock’n Bull to
raise its prices from three dollars and twenty-five cents
to three dollars and fifty cents. Within a short time
patronage had dropped twenty dinners a night. It is
possible that the business adjustment of 19*+8 would have
caused this drop anyway but it followed the price rise so
closely that the increase would seem to have been the
cause.
Most of the operators agree with Mrs. Layne that noj
special price rigidity exists. Even the manager of El
i
I
Cholo believes he could raise prices without suffering a
loss of business. He grants that Mexican food cannot be
sold for as much as many other types of food but he con
tends his prices could be raised and would still be lower
I
than those of most other Mexican restaurants.
The representative of the Round-Up was the only
operator who felt that his prices had a definite ceiling.
He has capitalized on an Mall you can eat for one dollar
and fifty cents deal.'1 He thinks that any ehange, even
though people realize food costs have increased, would
affect business adversely.
Mr. P. L. Larquier of Taix stated that an a la carte
house, when the cost of a dish goes up, can either discon
tinue serving that dish or can raise its price without J
changing the prices of the other dishes served. A complete
meal, or table d'hote house, must raise the price of the
■ ' 69
! entire meal when the eost of one dish goes up. This change
is quiekly noticed by the patrons. Most specialty houses
have a table d*hote type service.
III. CHAPTER SUMMARY
*
Costs are something a restaurant must watch very j
l
closely. If they rise too mueh, profits will disappear. j
If they fall too mueh, business will disappear. (This
assumes that falling costs are made possible by a reduction
of quality.) The specialty house is in a better position,
eostwise, than the average restaurant. It spends more on
food but that is an advantage for good food brings more
customers back than any other factor.
t
The operation of a specialty house is less compli-
j
cated than the operation of an average restaurant. For that
i
reason, labor eosts are lower. The reduction in labor costs
makes up for the added food costs and often leaves a little
extra for profit.
Rent and overhead are mueh the same as in any
restaurant.
The operators have found that specialty houses are
faced with no more price resistance than other restaurants '
unless they serve food, such as Chinese food, which is
assumed by the restaurant public to be inexpensive to pre-
pare. Table dfhote houses experience more difficulty in
raising prices than a la carte houses do because an in
crease in the cost of one dish raises the priee of the
entire meal. An a la carte house may even discontinue
serving a dish which has become more expensive. Host
specialty houses have a table d'hote type service.
CMP TEH VI
COMPARATIVE EFFICIENCY IN UTILIZATION OF FOOD AND EQUIPMENT
The saving in national effort through such
cooperation as demonstrated by many well-known
examples of simplification and standardization,
runs into millions of dollars....The rate of our
advance must be, and will be, in proportion to
the extent in which we all cooperate for the
elimination of waste.1
The above is a quotation from a speech by former
president Herbert Hoover. The simplification and standard
ization of which he spoke are big selling points for the
specialty house idea. The specialty house is best able to
avoid slow moving items. It can keep waste at a minimum.
A high turnover deserves a great deal of the credit for
this. It also deserves credit for maintaining the highest
possible productivity from labor and equipment.
I. SLOW MOVING ITEMS AVOIDED
"Hotel and restaurant buyers often purchase goods
beeause they are afraid to lose a guest or customer....It
might not be unprofitable to lose a few guests once in a
while."2
Most of the demand, even in restaurants with large
^-Herbert Hoover, as quoted by Dahl, Kitchen Manage
ment. op. cit., p. 168.
2Dahl, Kitchen Management, op. cit.« p. 168
72
menus, is for the common dishes. People like variety but
they like their favorite dishes better. Certain dishes
move very slowly. The wise operator will drop them from
his menu. What they add to profits is very often offset by
the cost of carrying them.
When the specialty house sets up its meal it only
offers what people expect to get with their entree. If a
customer does not like fried potatoes with his steak he can
eat more bread or order soup or dessert, but there are not
six or seven other potato dishes prepared for the few who
do not like fried potatoes.
The lack of variety offends some people. They
would rather pay more just to have the right of selecting
from a large number of listings. The eueeess in food spec
ialization would seem to indicate that they are in the
minority.
II. REDUCTION OF WASTE
Mr. J. 0. Dahl estimated that in 1926 over
$120,000,000 in possible profits were thrown out in commer
cial restaurant garbage cans.3
In addition to the waste of food, there is the waste
^Dahl, Restaurant Management, op. cit.. p.218.
, 73-
of time. This,Mr. Bahl considers even more disastrous than
the other types of waste. ”It cannot be redeemed and it
has no secondary uses., , 1 +
Specialty houses, with their limited menus and with
their rapid turnover, are able to conserve both food and |
labor. i
Most of the specialty houses surveyed reported al
most no waste. In order to avoid waste, the Cock'n Bull
serves lunch. Sandwiches are made from the roasts which
were not finished the night before. 5his meat is more
expensive than sandwich meat need be but if it were not
used in this way it would have to be thrown out.
i
The Oriental restaurants do have some waste. This |
i
is due mainly to the method of service popular in Chinese
restaurants. The Beachcomber does not have much waste from
spoilage for most of the ingredients used go into many
different dishes. In preparation, they do have some waste.
The expert cook in the home is ”a little reckless” with
' !
ingredients. So is the cook in the fine restaurant. j
i
Bit of Sweden, in spite of eighty-two offerings, j
i
reported very little waste. There are several reasons for j
this, all steming out of food control and the accompanying j
!
i j
Bahl, Kitchen Management, o p . cit.. p . 183. .
^Authority; Mr_._E._T.._Baehtold.______________ _j
7*
high labor costs. If a dish does not move it is not made
a second time. Too little, rather than too mueh of a dish
is prepared. Many ingredients can be used in several
different dishes. In spite of all these savings, it seemsj
remarkable that waste can be kept so low.
At the Captain's Table waste can be expected because
i
the food used is highly perishable. Fish must be flown in,
daily from the East. Although it is edible after being
kept for two or three days, it can no longer be sold as
fresh Eastern fish.
It would seem that waste decreases as the number of
dishes offered decreases and as turnover increases..
III. DEPENDENCE ON HIGH TURNOVER
There is less and less cooking in the modern
home and more and more of it in the modern res- ;
taurant. But there has also been a revolution ;
within the industry itself. Realizing that the
greatest profit comes from volume, larger and
larger volumes have been sought by the Individual
restaurants.®
Mueh of what was said in Chapter III under the head
ing of turnover eould be resaid here. There, turnover was I
considered in relation to the customer and the price he
had to pay. Here, it is considered in its relatiob to
J
restaurant efficiency.
Many specialty houses of all sizes only serve two or
three side dishes with the entree. There is a psychologi
cal advantage here in that prices appear lower than they
would be if a complete meal were ordered. In addition to j
this advantage, there is also the advantage of turnover.
Soup, cocktails, and dessert all take time to eat. Most
specialty house patrons have had enough to eat without them
anyway. For those who want them, they are available. It j
is more profitable for the operator, however, to maintain a
high turnover than to sell everyone a five or six eourse
dinner.
I
A large turnover also means that the maximum produc
tivity is being obtained from the employees and that food
moves through the establishment fast enough to eliminate j
the possibility of spoilage.
IV. THE KITCHEN AND COOKING PROCEDURE
Cooking procedure differs from specialty house to j
<
specialty house as much as it does from specialty house to !
regular restaurant. The only conclusion is that specializ-1
ing generally simplifies cooking. !
All modern restaurant kitehens are set up on a pro
duction line basis. Efficiency and saving go hand in hand.(
.... _ 76
The kitchen of the large specialty house can be even more
efficiently set up than that of the average restaurant
since fewer dishes have to be prepared and served.
. The majority of the operators believe it is cheaper
to set up a specialty house kitchen than a regular restau
rant kitchen because fewer types of equipment are needed.
i
j The operators of El Cholo, the Round-Up, and Grandview
Gardens disagree. They believe that what is saved by not
■ having to buy one piece of equipment will be spent on
i
another piece necessary for the preparation of the special
ty.
Mr. K. S. Hansen of Scandia contends that with labor
costs constantly increasing, all restaurants should be able
to profit from the use of labor saving equipment. The
amount of such equipment and its cost have very little to
do with the type of food served.
The Original Barbecue has its main kitchen separat
ed from the dining room by a five foot partition. This
permits the patrons to watch while the ribs and chicken are
being barbecued. Potatoes are French fried right next to
the barbecue. Salad, which is prepared in the back of the
restaurant, and rolls are on the other side of the aisle
which divides the kitchen. Each plate makes no more than
two stops before it is ready to be served. There is an
'77
auxiliary kitchen behind the main kitchen which is used on
week-ends.
The Original Pantry does most of its eooking on a
grill and a three unit hot plate which are located behind
the counter. Only the roasts for lunch, toast, and
potatoes (boiled to be hash browned later on the hot plate ) j
are prepared in the Pahtry’s small kitchen. To the rear of
the dining room there are several small rooms in which meat
is cut, salad is prepared, and food is stored.
Both of these restaurants depend upon turnover and
yet, only the Original Barbecue has a kitchen and a serving
procedure designed for efficient operation. The not too
efficient set up at the Pantry no doubt explains Mr. Dewey
Logan's policy of hiring trained employees only. ;
I
Restaurants such as Lawry's and Stear’s serve only j
one item or a few. These are all prepared in the same way |
so both kitchen equipment and the spaee allotted for such |
equipment ean be conserved. 4s in all scientifically
planned kitchens, the assembly line principle is earried
out. j
i
The kitchen of the Beachcomber was designed for the 1
preparation of Cantonese food and, therefore, it would be
i
inadequate for the preparation of many other types of i
dishes. The kitchen ranges were designed especially for !
7S
the Beachcomber. Since all dishes are cooked to order,
steam tables are not needed. By not serving pastries the
Beachcomber has eliminated the need for a bake shop.
The same type of planning was employed by the other
restaurants which designed their kitchens for the service
of the featured dishes. At restaurants, such as the Beach-!
comber, where each dish is cooked to order, there are no
steam tables. At restaurants such as the Round-Up, where a
large amount of each dish must be ready at all times for
use at the buffet table, it is important that these be kept
at the proper temperature. So for that type of restaurant,)
steam tables are very useful.
I
I
V. CHAPTER SUMMARY j
The specialty house is in the most favorable posi
tion when it comes to the use of food and equipment. Be
cause of a limited selection of dishes, it can reduce waste
to a minimum. The ideal specialty house carries no slow
moving items. Its meal is served as a unit. This means '
there is a constant flow of every ingredient used.
Profit, for the average specialty house, depends ;
i
upon turnover. The customers must be kept moving through, j
Very often only two or three courses are served. More |
i
courses would slow turnover and, therefore, reduce profits.|
79]
Cooking procedure varies from specialty house to
specialty house. It generally holds that cooking is simp
lified. It also holds that kitchen equipment is less
expensive for a specialty house than for the average res- j
taurant. However, with labor costs increasing, all types
of restaurants should find it profitable to purchase more
labor saving equipment. ;
j
CHAPTER VII
LABOR POLICIES AND PROBLEMS
There are 8^,000 people connected directly with the
restaurant industry in California. Since there are approx
imately 3*f,000 food serving establishments in the State, I
|
the average plaee would employ about two and five tenths
people.^ If the owner is working in the average place him-j
self, it should not be difficult for him to train and con
trol his help. Unfortunately, specialty houses and most
other successful restaurants employ far more than the
average number of workers. The more employees, the more
complicated the control of labor becomes. The efficient
direction and food specialization are the only means of i
simplification. >
I
t
I. LABOR TURNOVER
i
i
The labor turnover in the food serving industry is j
exceedingly high. It averages from 200 percent to *+00 per-1
i
cent a year. An eating place with a turnover of 200 per
cent would have had enough people on the payroll during the
i
year to equal three times its necessary staff. It is es-
(
timated that the average labor turnover in industry is only:
^Authority: Mr. Robert M. Riley. The figures are 1
those of the Southern California Restaurant Assoclation.___
81
I o
ten to twelve percent.
There are many reasons for the high turnover in
eating places. The types of work both encourage and dis-
i
| courage it. Such jobs as dishwashing, with its lack of
I
opportunity and lack of challenge, do not hold people.
Traditionally, dishwashing and the other unskilled restau
rant jobs have been low paying occupations. This limited
their employee holding power. However, since eighty per- ,
cent of the unskilled restaurant workers in Los Angeles
have been unionized, wage rates have been improved consid
erably. The union minimum is eight dollars and forty cents
a day. A higher rate is provided for night work. The
rates for comparable work in industry are still generally '
•5 !
higher.J
Many people only take such jobs until they can find
something better. Table waiting, or rather the good tips,
tends to hold wgiters and waitresses. The turnover of
cooks also tends to be slight in the better places because
i
of progressive labor policies. It is just good business to]
J
retain efficient employees. A 1950 survey of restaurant i
j
operators showed that it costs an organization up to $105 !
^Authority: Mr. Robert M. Riley. The figures are
those of the Southern California Restaurant Association. >
3Authority i Hotel Employers’ Council of Southern !
California._______________________________________. . . _.J
every time it loses an employee.
Before proceeding any further into the labor turn
over problem, it might be well to point out that a high
turnover is peculiar to the smaller, less successful eating
places. The turnover appears to be well under control in
the specialty houses surveyed.
The labor policy of the average specialty house is
much the same as the labor policy might be in any progres
sive restaurant. The pay is union scale for those receiv
ing tips and generally above the scale for those in impor
tant non-tip positions. Meals, vacations, and insurance
plans are almost always provided. Knott's Berry Farm is
the only house not furnishing meals. Smith Brothers Fish j
Shanty on La Cienega Boulevard as yet has not instituted j
i |
! vacation and insurance plans. Such plans are under consid-
j
eration, however. The Lawry restaurants give Christmas
bonuses to their employees. Bit of Sweden has set up a
loan service for employees needing money.
As has been said above, such a labor policy is just
good business. When a specialty house has to depend on
volume, it is essential that its employees be satisfied
I
and efficient workers. j
I
II
"Hiring the Right Man," The Restaurant Digest. I
(November, 1950), 1. J
II. TIPE OF BACKGROUND REQUIRED OF EMPLOYEES
Each operator has his own requirements as to the i
I
i
background necessary to qualify as a cook or waiter in his ;
j
specialty house. i
f
Seven out of twelve of the operators like to train
their own cooks. Nine of twelve prefer training their own J
waiters. Those, for the most part, who prefer hiring j
trained people stated that their operations are not exten
sive enough to warrant a training program for new help.
Mr. Dewey Logan of the Original Pantry hires only expert
waiters whom he believes will be able to adjust to his type
of operation. The work is difficult and spaee in which to j
i t
I
j work is at a premium. An inexperienced man would reduce
| the efficiency of all the employees.
f
Six of the nine who commented on this point believe i
i
it is easier to train a specialty house eook than the ave
rage restaurant cook. The similarity between the dishes
served accounts for this. At the Scandinavian restaurants,
ElGbolo, and Grandview Gardens, where a variety of foods are*
served, training presents more problems. The Beachcomber
management disagrees with that of Grandview Gardens. Al- j
though the Beachcomber serves many dishes, the methods of
preparation do not vary materially. It may be that the
methods of preparation of the Chinese foods served at |
, --------------------------------------------------------------------------------------------------------------------------------------------------------------------- - 8 * 4
Grandview Gardens do vary materially.
Eight of twelve are of the opinion that specialty
house waiters are easier to train than those of regular
restaurants. For the two Chinese type restaurants, train
ing is understandably more difficult. Mr. R. D. Hopkins of
the Cock’n Bull believes that specializing reduces training
problems, but he points out that the qualities which make a
good waiter must be present in a specialty house waiter
just the same as in any other waiter.
Those houses which employ waitresses would rather
train their own girls than hire those with years of exper
ience. Waiting tables in many types of places is a rather
"hardening” experience. The older waitresses often do not
i
| have the proper outlook for service in a specialty house or
other nice restaurant. Waiters generally improve with age
and experience. Waitresses often do not.^
III. TIPPING OF WAITERS
Tips amounting to 0*+,000,000 were handed out by J
the restaurant public during 19^9, according to the Depart-I
f i j
ment of Commerce. j
]
i
i
}
-
•^Authority: Mr. R. D. Hopkins.
^"Tipping Volume,” The Restaurant Digest. (November,!
_1950)_,_12.______________ : ________i
85
I
Table waiting ean be a very profitable type of
employment. It is not uncommon for a good waiter or wait
ress to make over one hundred dollars a week in tips. In
i
addition to this, they receive the local union scale of j
eighty eents an hour. Waiters generally keep their own :
tips. Seldom are tips pooled. In some restaurants it is i
customary for the waiters to give about ten percent of
their tips to the bus boys.
Tips, in all restaurants, are usually based on the
amount of the check. Ten percent has been the accepted
figure for many years but it is not uncommon for tips to
average closer to fifteen percent in the better restau
rants . ?
Tips are generally better in specialty houses than !
in regular restaurants, or at least the day’s total is
higher. There are several reasons for this. One is volume.
The turnover in specialty houses tends to be greater than
in regular restaurants. Another reason for better tips is '
t
due to the type of clientele specialty houses draw. Even
though all working and financial elasses are served, there
are people in each of these classes who are accustomed to !
eating out and others who are not. Specialty houses draw
^Authority: Mr. Robert M. Riley
. _ _ _ _ _ 8 - 6 _
people who are accustomed to eating out, people who know
where to find good food. These people are better able to
recognize good service and are more apt to pay well for it,
IV. PILFERAGE
l
|
"It often seems as if people are divided into
groups, one of which is trying to invent systems to prevent|
stealing, and the other to find ways to 'beat1 the sys
tems .
Alice Foote MacDougall has an answer to this
dilemma. She says,
You cannot stop stealing. But by bringing up
the morale in your organization, by education and j
good salaries, you can reduce the desire, and by
checking and rechecking, rechecking and checking, 1
you can hold it in check.9 i
i
So long as restaurants have to employ people there j
will be pilferage and graft. A good system of food checks j
i
and portion control are the best method of controlling thisi
The more people who have a hand in the operations, the more;
difficult pilfering becomes. If the steward buys the food !
and then turns it over to the warehouse manager who issues !
it to the chef, all three of them would have to be conspir-j
ing together in order to take any appreciable amount. Very
i
I
Q !
wDahl, Kitchen Management, op. cit., p. 181.
Q !
______?MacDougall._op._cit..—p 99.-----------------------i
' ' ' 8?
seldom is it possible for three people to develop such an
unders tanding.
Specialty houses employ much the same checks as
I other restaurants. They have a decided advantage in that
i
f they only have to watch a limited number of items. They ;
t
f
have another advantage in that they are better able to I
estimate the approximate number of servings in a given
amount of each commodity bought.
The ideal method of control is that of the Original
Pantry. Mr. Dewey Logan has no system of controls. He
knows how many meals he can get out of a fifteen pound ham
but he never cheeks to see if that many were served. By
hiring the best men available and by treating them better ;
than waiters are generally treated, he has gained their
friendship and has instilled in them a genuine interest in ;
t
the business. The Junior waiter has been at the Pantry forj
!
over six years and most of the employees, except for dish- j
j
washers, have been there well over ten years. This method
would be risky business for many restaurants but some
owners who run their own businesses can get away with it. j
Liquor controls must be very strict in all restau- |
1
rants. Many operators find it necessary to make daily j
!
inventory checks. Very often one man, the bartender, will j
control the operation of the bar, will mix and serve the
, . -- 88
drinks, and will collect for them. This eliminates the
need for collusion and, therefore, makes pilfering rather
tempting.
i
V. CHAPTER SUMMARY
i
i
Labor turnover continues to be exceptionally high in
the restaurant industry. This is partially due to the fact
that many restaurant Jobs require very little training and,,
therefore, pay very little. In the better restaurants,
which include the specialty houses, more skill is required
in the majority of jobs. These jobs are financially more
attractive than those in the poorer eating places. The j
i
i
tips make table waiting jobs in many establishments very j -
attractive. ,
Most operators agree that laborers in specialty I
I
houses require less training than those in regular restau- j
rants. There are some notable exceptions. The cooks in j
many foreign restaurants require a great deal of experience]
Where the size of operations permits, the managers generally
prefer training their own employees.
i
i
Pilferage must be carefully controlled, especially !
in liquor, because it can become an unbearable expense. |
The methods for its control do not vary much from restau-
i
rant to restaurant. Constant vigilance is the main method.:
Specialty houses have an advantage in that they have fewer
items to check on. Handling fewer items enables them to
better estimate the number of servings in a given amount
of each commodity bought.
CHAPTER VIII
ADVERTISING TECHNIQUES
I. RESTAURANT ADVERTISING "MUSTS”
"Not many restaurant managers realize the value of
good publicity."Advertising is essential to the growth
of a restaurant...and continued advertising is essential to
continued prosperity."2 Mrs. Layne of the Key contends
that restaurants should he continuously putting their name
before the public. A simply worded ad often meets this
requirement. The Beachcomber merely lists its name, the
fact that Cantonese food is served, and the phone number.
No, prices, no address, and no words of self-praise are ever
included. i
!
"The best advertisement any restaurant can have, j
•3 j
is good food on the plate.The next best advertisement is
a specialty, "something for which you are famous in a small
h
way, and whieh will set people talking about you."^ After
these in importance come such things as originality, atmos
phere, paid advertising, service, a staff which is sold on j
” 4)ahl, Restaurant Management, op. cit.. p. 223.
^MaeDougall, op. cit.. p. 152.
*
Gray, op. cit.. p. 220.
^ibid.. p. 181.__________________________________
91
the restaurant, and such added attractions as gift shops
and markets. Those of the above, whieh are employed by the
specialty houses surveyed, will be considered further in
i this chapter.
!
i
II. ORIGINALITY
”Be original is one of the rules of my business.
Anything that is done elsewhere doesn’t do here.”^
As has been said, the combination of really good
food and specialization is a difficult one to beat. Accord
ing to Mr. Ei T. Bachtold of the Beachcomber, people dis
cuss the restaurant business, from the consumer standpoint,1
more than any other business. Sueh discussion brings in
i
customers. Those who get discussed the most have a spec-
I
ialty. ”It doesn’t matter what the specialty is...People
I
are funny. They must have something to ’hang their hats on'j
when thinking about a restaurant.”^
The builder of a specialty house has an excellent
opportunity to exercise originality. Very often this is
I
possible for both food and service. The Round-Bp and Coek'n
Bull serve roasts buffet style. Lawry’s serves roasts from:
I
a cart which is moved from table to table. The Berry Farmj
I
%acDougall, ©£. cit.. p. 26.
s I
°Grav. op ._cit.. „p. 181.____________________________ I
serves chicken directly from the kitchen and includes otherj
dishes with it which might he served at a farm dinner. The
Original Barbecue barbecues its chicken and serves it with
j fried potatoes, salad, and rolls, all easily served spec- !
i
ialty house side dishes. Chicken at the Beachcomber is 1
slieed and served in several Cantonese dishes. i
I
A chicken dinner may be bought at any one of these j
three houses mentioned above but in no two places will the j
taste of the chicken or the service be the same, for
originality has been exereised.
III. ATMOSPHERE AS ADVERTISING
To date (probably 1927) I have eaten in 198 j
of the 16,800 restaurants in New York. Not over ;
; six of those in which I have eaten stand out as
i models of beauty— and all of these six are I
exceptionally successful. This speaks well for j
the business-building value of b e a u t y .7 {
Atmosphere, however, must be suited to the clientele
to be catered to. The hungry worker in an industrial sec
tion is not interested in a tea garden setting.
Knott's Berry Farm, Scandia, Cock'n Bull, and the
Beachcomber, to the writer, exploit atmosphere to the full-
l
est. All, except Scandia, have national reputations as |
I
outstanding restaurants. Scandia, an excellent but younger!
^Dahl, Restaurant Management, op. cit.. p. 67.
restaurant, is developing the same type of reputation.
Like the six beautiful restaurants Mr. Dahl mentioned,
these four do exceptionally well. The fine food served at
i
i
these establishments brings in the most people but it should
not be given all the credit. If one is undecided as to :
»
which of two comparable restaurants to patronize, the one
with more atmosphere will generally get his business.
I
IV. PAID ADVERTISEMENTS
Most of the operators are of the opinion that there
is very little value in the paid ad. The food, the service,
the prices, the atmosphere, and originality all are rated
higher than the paid ad. The best most of them can say for
!
it is that it does keep a firm’s name before the public. !
i
Some of the operators, however, do believe that one or more
types of advertising pays off.
Walter Khott maintains that newspaper ads are of
i
doubtful value but he admits that other types of advertising
are responsible for a great deal of his tourist trade. He
publishes a booklet on the Berry Farm and the Ghost Town j
i
which he sends to tourist agencies, auto courts from San
Diego to Santa Barbara, and organizations that are planning:
conventions in the Southern California area. >
Mr. R. D. Hopkins stated that a ”no advertising”
, _91_
poliey never hurt the Cock’n Bull. However, the Coek’n
Bull has been contributing lately to the eosts of a tele
vision show put on by a former employee. This person acts
i
as a food consultant. She mentions the restaurant quite
i
frequently and Mr. Hopkins believes this advertising has j
done the business some good. j
i
Both the Original Barbecue management and the Bit j
of Sweden management argue for paid advertising. They
state it takes more people to support a specialty house
than a regular restaurant and the only way to get more
people in is to let them know such a place exists. Word
of mouth advertising is the best but sometimes it can use
a little help. Bit of Sweden might be stressing advertis
ing more than the others in order to hold its tourist
i
trade. Just because word of mouth advertising works well j
locally does not indicate that it works well nationally.
Many restaurants, especially those with more than
the average amount of atmosphere, give picture post cards,
menus, or booklets to their guests which they hope the
guests will give to their friends. I
i
V. THE ADVERTISING EFFECT OF OTHER ACTIVITIES I
i
i
Five of the restaurants surveyed have profitable j
sidelines which are advertising assets. The Beachcomber I
95i
has a gift shop. The Cock'n Bull operates a package store
and distributes Ginger Beer and Bombay Water nationally.
Lawry’s distributes salad dressings and seasonings nation
ally. Smith Brothers have large fishing interests and a
national market for caviar. In this case, it is the res
taurant operation whieh is the sideline. The fifth
specialty house with a sideline is Knott’s Berry Farm. The
Knotts operate a Ghost Town with fourteen shops, have sev- !
eral large gift and food shops, and have a national market
for their jellies and jams.
It would seem that one undertaking contributes to
the success of the other. Any business one might get can-
i
not help but be of publicity value to the other. Looking i
i
i ,
, at a bottle of Cock’n Bull Ginger Beer ean bring only one ;
i !
: restaurant to mind. ;
There is no better advertisement than good food.
Second to good food would be a good specialty, something
that makes a restaurant stand out in people’s minds. After’
these come such things as originality, atmosphere, service,
paid advertising, employees who enjoy working in the res
taurant, and any added attractions such as gift shops or ,
markets. 1
VI. CHAPTER SUMMARY
Originality pays dividends. The specialty house is
in the best position, both as far as food and service are
concerned, to show a little originality. People like some
thing new and different.
Atmosphere, another important factor, ties right in
; with originality. It takes originality to create the type
of atmosphere which makes people enjoy just being in a
i
restaurant. Very few restaurants and very few specialty
i houses have an outstanding amount of atmosphere. Those
that have it appear to be exceptionally successful.
The Majority of the operators agree that the bene
fits of paid advertisements are of doubtful value. Ads
keep the name of a restaurant before the public, but that
is about all. Other operators, especially those dependent
upon the tourist trade, believe that paid ads are quite
valuable.
Other activities, such as gift shops or the distri
bution of some original products, are beneficial both
financially and publicity-wise to the specialty houses
which undertake them.
CHAPTER IX
LONG RUN QUESTIONS OF IMPORTANCE
I. COMMON MISTAKES IN RESTAURANT PLANNING
i The three commonest causes of disaster in the !
j restaurant business are incompetence, over investment, and!
poor l o c a t i o n . i
i
Another common mistake, bordering on incompetence
j
perhaps, is the belief of a chef or waiter, or perhaps a I
bartender, that he can succeed alone in the restaurant
business. All businesses need a well-balanced executive
force. That advantage the chains have. The chef, if he
does not have other specialists with him, is apt to over- 1
emphasize the importance of the kitchen. Overemphasizing
i
i !
; any one part of the operation can be fatal.
To the operators talked to, the following are some |
I
of the commonest mistakes in restaurant planning and opera
tion.
Everyone who opens a new restaurant can expect to
lose money for from six months to a year. Many inexper- |
ienced operators make the fatal mistake of trying to cut I
corners in order to reduce the losses. One should not open'
I
a restaurant unless he can afford to lose for six months or|
!
I
1 I
________xSmith. op. eit.. p. 52.____ J
i 2
more.
Mr. Dewey Logan of the Original Pantry believes that
most restaurants fail because of the inexperience of the j
; management. It is best if an experienced individual starts
I ;
in a small way and builds up his business as he is able.
Mr. R. D. Hopkins would add to this that most successful J
!
businesses grow, they are not founded. Mr. Hopkins went on
to suggest that those interested in opening a restaurant, j
i
decide upon a specialty house. They appear to be the most j
j
successful.
The worst mistake of all is going into the restaurant
business with the wrong attitude. Mr. Dewey Logan of the i
I
Pantry believes the key to his success is the basic philo- I
sophy of treating people right. People come to him to be *
fed and they go away not only fed, but well fed. j
II. PROFIT PROSPECTS I
i
The specialty restaurant stands alone. It
has no price competition and usually gets a big ,
profit out of the specialties, for specialty !
cooking requires knowledge and ability, but I
contrary to public belief, it is inexpensive
to provide and profitable to t h e ope r a t o r .3
Some of the operators maintain that profit prospects;
o 1
^Authority: The Lawry Representative. ,
t
(
3peter Borras, "Restaurant News and Management" as i
quoted by Dahl. Restaurant Management, op. _ cit._._p. _2**6._ _j
are about the same for specialty houses as they are for
other restaurants. Specialty house profits, they contend,
t
seem to be more consistent. The constant change of menu i
I
appears to reduce profits. Most restaurants try to keep a j
balance of high profit items, salads being an example, and !
j
low profit items such as steaks. They must be careful not j
to serve too many low cost dishes at high prices for it is I
done at the cost of some customers.** 1
It would seem that this consistency of which they j
speak would tend to make specialty house profit prospects 1
better than the average. This consistency, or good food
costs control, and the lower labor costs enjoyed by
specialty houses do make their profit prospects greater. I
i The greater drawing power and the ability to charge ,
I more, simply because people believe the specialty house
does the best job of serving its featured dish, are two ,
i
points which go to guarantee the greater profit prospect, j
III. THE POSSIBILITY THAT SPECIALIZATION
I
IS A TEMPORARY FASHION I
I
Fashions in foods are comparable to fads in other j
I :
things. They can change very rapidly. Restaurant managers'
i
should be on the alert even for tendencies of a change. It I
l
i
l. !
_Authority.: The_Lawry_Repr.es entative.____________________ - _______ i
, . . r o -0
is wise for them to see what the effects of new combina
tions will be, to experimeht. "Variety is the spice of
life— and this applies to the menu as well."^
The following is a list of specialties that built
i
business for many restaurants in the mid-1920*s. They are
waffles with creamed chicken, Chinese dishes, vegetable
dinners, ginger ale with toasted chicken salad sandwiches,
a stuffed fig salad, and a bowl of half milk and half
cream with an individual package of Gram or whole-wheat
6
crackers. These were taken from a list by J. G. Dahl.
None of these dishes are as basic as steak or roast beef
and the fact that most of them are no longer popular
should be a warning not to put too much dependence on one
i
I
uncommon specialty. !
i 7 !
I Advertising has a great effect on fashion.f It has
^Dahl, Restaurant Management, op. cit., p. 2M k
6ibid.. p. 2^3.
%_bid.. p. 2Mf. Paul H. Nystrom, as paraphrased by
Leland J. Gordon, Economies for Consumers (New York; Amer- ■
iean Book Company, 19^, 2d. ed.), p. 123, disagrees with ;
J. 0. Dahl on this point. Dr. Paul H. Nystrom, former vice
chairman of the National Retail Code Authority, "denies the
power of advertising to control fashions and gives illus- ;
trations to support his view. It is his contention that |
what advertising can do, and does, is to spread the accep- !
tance of goods already in fashion." [
i
i
__________________________________________________________________________ I
been able to change some of our food habits almost over
night. Its most effective job probably was the toasted
sandwich. At one time this type of sandwich was unpopular.^'
Publicity can help build a specialty. It is questionable, j
however, if it can sustain a dying specialty.
The operators maintain that specialization is not a
i
fad. 'To them, it is the ultimate. It may be risky to put j
too much confidence in a specialtydependent upon publicity j
for its popularity, but there is nothing risky about sueh i
t
foods as steak, roast beef, and fish. Ham and eggs should
even be a safe bet. Ihese dishes are far different than
stuffed fig salads, ginger ale with toasted chicken salad
sandwiches, and even the modern vegetable juice drinks. j
The only appeal present" in the last three has been put
I
there by advertising. A glass of vegetable juices is not j
i
particularly appealing until a list of the vitamins con
tained therein is set down.
There is nothing faddish about the featuring of
basic foods that are the dishes of an important country.
They will always be in style,
I
I
IV. EFFECTS OF BUSINESS FLUCTUATIONS j
i
i
When money is scarce, the effect on specialty housesj
I
f t I
_______ Dahl. Restaurant Management. op._cit.,._p.,_2^f3..______I
' appears to be the same as that on luxury trade in general.
'
i The sales of regular restaurants will not fluctuate as j
| greatly.^
The representative of Lawry’s does not agree. He
! believes that business fluctuations do not affect specialty
houses as much as they do regular restaurants. Tie spec
ialty house should always be in a position to undersell
others. Cafeterias are also in a better position relative
ly in poor times because of their lower prices.
In addition to being able to give more for the !
! i
■ money, the specialty house prepares dishes, or at least
j
! prepares them in a way, that one would not prepare them at
i
home. Many operators are of the opinion that people are
more careful in selecting restaurants at which to eat when
business activity is low. Therefore, they will usually
‘ choose a specialty house for there they can get the most
for their money of some dish that no regular restaurant can
cook as well.
According to Mr. R. D. Hopkins, the average restau
rant in the nation suffered a decline in business df jfrom
I
! I Q
I eight to eleven percent in 19^9. The income of the
9Authority: Mr. Robert M. Riley.
^These figures were confirmed by the Hotel Employers'
Council of Southern California.
103
Coek’ii Bull, however, was only six percent less in 19^9
than it was in 19^8. Of the thirteen restaurants which
responded, nine suffered a decline in business in 19*+9*
They are Lawry’s, Stear’s, Hiehlor’s, Original Barbecue,
Cock’n Bull, Bit of Sweden, Grandview Gardens, the Beach
comber, and Taix. Of these, only three reported a loss of
eight percent or more. They are Bit of Sweden, Grandview
Gardens, and Taix. This would indicate that the majority
of the specialty houses studied are better able to with
stand business fluctuations than the average restaurant.
I
Another encouraging point is the fact that many of
the specialty houses surveyed were organized and had pros
pered during the difficult times of the 1930’s.
Only one operator, Mr. Doc Wong of Grandview Gar
dens, was of the opinion that specialty houses are no
better off in bad times than other restaurants. He be
lieved that a decline in business would affect all restau
rants about equally.
The majority disagrees with Mr. Wong and holds the
opinion that the specialty house is best able to weather
the effects of business fluctuations. It can prepare a
better meal than any other restaurant and it can sell that
meal cheaper. People believe that.
Y. THE EFFECTS OF WAR
During World War II restaurants enjoyed a large
volume of business and substantial profits. They would
probably be in approximately the same position during I
another war.11 I
The Lawry representative is of the opinion it would J
be difficult to predict the effects of another war on spec
ialty houses. If it were severe enough, many places might j
I
close or be closed. During the last war Lawry*s had to
serve about a dozen different dishes. Spaghetti, fish, and
i
turkey were the big items. An attempt was made to maintain
standards of quality and service at a high level, because i
i
| the restaurant public has a long memory. Often, however,
I the management did not know from one day to the next what
1 i
1 * I
they could get to serve. I
I
The operators agree that war plays havoc with j
|
supply. Yery often the Original Pantry would exhaust its j
allotment of steaks for a day within thirty minutes to an j
hour of serving. The rest of the day it was necessary to ,
serve fish, poultry, and anything else that might have been
available. Knott's Berry Farm appears to have been in the ;
i
best position. They raised their own fruit and some of '
•^Authority: Mr. Robert M. Riley.___________ j
105
their own vegetables. Their chickens were, and still are,
supplied by local ranchers under long term contracts.
These ranchers were able to supply most of the chickens
I
i needed by the Berry Farm.
I
I The operators stated that it seemed enough black
market meat could have been available to satisfy all of
their old customers and to meet the demand of most of the
new customers which the war had brought. However, the
operators did not buy this meat for several reasons. Risk
was probably the main reason. Those dealing in black mar
ket goods were subjeet to prison sentences. Quality was a
second reason. One could not be sure of the grade of black
market meat. Most managers believe a poor steak loses more
i j
I good will than a good piece of fish even though the eus-
, tomer had been anticipating a steak when he came. Patriot-’
ism was no doubt a reason too.
The fish houses, as well as the chicken houses, are
in a favorable position during war time. It might not be
possible for them to bring in much, if any, Eastern fish,
but in the last war there was a large supply of Western i
fish available. '
I
The Chinese restaurants are in an in between posi- j
I
tion. They have an advantage in that their dishes call for;
I
very little meat. Their dishes, however, do call for many ;
____________________________________________ ______^ _________ J
106
imported items, which are next to impossible to obtain in
time of war. The Beachcomber discovered that people actual
ly appreciate having dishes discontinued which cannot be
properly prepared. It builds confidence in the restaurant
12
and the integrity of its operator.
It would seem that Mexican restaurants should be in a
favorable position. They use very little meat and many
plentiful inexpensive items such as corn meal, onions, and
J
1
chile. Their largest item is cheese. This, like meat, was j
rationed during World War II. The inability to get properly
aged cheese and the inability to get the quality and quan
tity of foods the patrons expected, forced El Cholo to close
for two years during the war period. In spite of this,
business is now better than ever.
i
Labor becomes a very serious problem during wars.
War plants offer better pay than restaurants can. They also
i
offer draft deferments. The specialty house is somewhat |
better off than the average restaurant since it did not have
i
as much of a labor problem to begin with.
In World War II, restaurant food allotments were !
based on the previous volume of business. This would seem !
I
to leave the specialty house in its previous relative posi- !
I
tion. Those operators who had opinions on this point felt j
i
_______^Authority: Mr. E. T. Bachtold.___________________ j
107
that the specialty house's relative position, with respect
to other restaurants, is unchanged by war.
Restaurant incomes were very high during World War
II. People had plenty of money, and food was scarce.
Those who wanted to take advantage of the people and were I
willing to jeopardize their future, had ample opportunity i
to do so.
Although government controls limited profits, there
were other ways, expanded advertising was one, in which
organizations could retain some of the potential benefits
of a large income.
VI. ATTEMPTS TO CAPITALIZE ON "A GOOD THING”
!
Many attempts have been made to capitalize on the
reputations of some of the specialty houses surveyed. The
Pantry had to call itself the Original Pantry because some
one opened a little steak house called the Chef's Pantry in!
the next block. The Lawry name has been copied too. j
Most of the imitating is of the foods and their pre-j
paration, the type of service, and the atmosphere. This, :
to the writer, is much different than copying a name in !
hope that people will come to a restaurant by mistake. !
If someone produces a better dinner at a better 1
i
price, it should be expected that others will copy it. If
he turns out a better fountain pen or alarm clock, it will
be copied. Then soon everyone will be turning out better
fountain pens and alarm clocks. That is progress,
j The Round-Up Room's type of service is patterned |
i
after that of the Coek'n Bull. It must be a good type of i
service because both restaurants, are prospering. Now other!
i
restaurants have opened which are using both the service j
and the food ideas of the Round-Up.
Don the Beachcomber Cafe is probably the most copied
restaurant in the United States. It was the first bamboo
restaurant in the United States. It was the first to use a
tropical storm for effect. Now many tropieal-type bars and
|
restaurants imitate the rain and the sounds of a tropical ;
: storm. It was the first to specialize in rum drinks to any.
! ’ I
I
i appreciable extent, and it originated such oft copied
drinks as the zombie. Mr. E. T. Baehtold estimated that
I
the Beachcomber has been imitated at least one hundred and I
fifty times. These imitations have done very little harm
and, in fact, most of them have had a beneficial effect. !
These imitations lure away a few customers but after one
visit they are ready to go back to the Beachcomber to stay.;
A healthy business has very little to fear from ;
imitators. It has the advantage of a head start and it can|
i
J i
j keep that advantage if it remains responsive to the wishes ;
I !
! of its public.________________________________________ I
109
711. BUSINESS EXPANSION
In the Restaurant Field. Chain Operations
There are at least eight advantages enjoyed by the
operators of restaurant chains. They ares j
i
1. Larger quantities and better purchasing. i
2. Standardization of food preparation and account-1
ing. ;
3. Advertising spread over more stores. !
*+. Higher-grade executives and fewer of them.
5. Better methods of employee selection and train
ing.
6. Higher type employees for more opportunities for
promotion.
7. Volume permits centralized baking, doing own
laundry, etc.
8. Better able to study tendencies and more money
to experiment with.
The Lawry organization is an excellent example of a J
successful chain operation. In addition to the three res
taurants surveyed, they have a fourth restaurant and a
coffee shop. It should be pointed out that no two of the
restaurants have the same specialty. The fact that they
are all located in one district probably accounts for this.
i
However, the fact that the Lawry organization has not dup- j
lieated its La Cienega restaurants in another section of
f
Los Angeles might indicate that they consider the possibil
ities for a specialty to be limited. j
Of the four remaining surveyed specialty houses thati
............... - I
110'
j are branching out, only two are featuring the same special
ty twice in the Los Angeles area. They are the Original
Barbecue and the Round-Up. Both of these, because of lim
ited space and reasonable prices, do not require too large
a population from which to draw. Two of the remaining
three houses are Smith Brothers Fish Shanty and Don the
Beachcomber Cafe. Neither of these, both dependent upon a
large population, has built a second restaurant in Los
Angeles. The Fish Shanty is located in Port Washington,
Wisconsin and Walteria and Hollywood, California. The
Beachcomber is located in Hollywood, Chicago, and is soon
to be located in New York City. |
From this it could be concluded that the larger a
specialty house and the larger the area it needs to draw
from, the poorer the opportunities for chain operation j
become.
According to the statistics, it would seem that the
restaurant industry, as a whole, is not particularly well
I
adapted to chain operations. The chains had about one- j
twelfth of the eating and drinking places1 market in 1939.
By 19^8 that percentage had dwindled to one-twentieth.^
i
One reason for this is that "a large percentage of ]
ik |
Joseph Wexman, "Causes of Failure," The Restaurant
Digest. (December. 1950). 16.________________ _ J
, - 11:L
the American public want to do business where there is an
atmosphere of cordiality and informality.Chain restau
rants are run by managers who seldom have the interest in
■ the business that the owners have. Also, they have to
carry out the policies of the main office and seldom have a j
i
chance to put their own personality to work.
In Allied Fields
Five of the specialty houses surveyed have found.it |
profitable to engage in other business activities in con
junction with their restaurant operations. For some, the
restaurant operations have grown out of the other activi
ties .
The-Lawry organization has established an extensive
!
I
bakery chain, has built a meat processing plant, and has
developed a national market for the salad dressings and sea
sonings it originated for its dining rooms.
Knott's Berry Farm and Ghost Town has developed too
many sidelines to be listed here. They are included in
some detail in the Appendix.
The Cock'n Bull runs a package store in connection j
I
with the restaurant. Liquors, imported spices, and various |
delicacies are sold. The Cock'n Bull Produets Company is !
•^Dahl, Restaurant Management, on. cit.« p. 2**9.
I12
also a part of the organization. It bottles and distributes
Ginger Beer and Bombay Water nationally.
The Smith Brothers organization engages in extensive
fishing operations in the Great Lakes. They process and
sell their own fish. They are the largest producers of do
mestic caviar in the United States. This is sold under their'
own label.
The Beachcomber operates a small gift shop in con
junction with the restaurant. A variety of island and
Oriental items are carried. Some imported foods are carried,
T i l l . CHAPTER SUMMARY
I There are many causes of disaster in the restaurant
i
industry. One is incompetence and the possible overemphasiz
ing of one phase of operations which might accompany it.
Another is over investment. Insufficient capital to be able
to withstand a losing period of from six months to a yean
belongs on the list. Poor location is still another cause of
failure. Location is especially important for the regular
restaurant. Starting on too large a scale often proves
fatal, as does starting with the wrong philosophy. If one
does not enjoy feeding people well, he should not enter the
]
restaurant business.
i
; Good control over food costs, lower labor costs, and
113
the ability to command higher prices than the average
restaurant, make profit prospeets the best for specialty
houses.
i The specialization in basie foods and foods of impor
tant foreign countries is not faddish but is the ideal in
restaurant operation. Many foods are not basic. The pres
ently popular vegetable juice drinks could not be called
i
basic. Advertising has made them popular. Some day adver-
tising will popularize something else to take their place.
There is disagreement between the men in the restau
rant field as to the ability of specialty houses to with-
Istand the effects of business fluctuations. Some place
specialty houses in a luxury class. When business decreases,
luxury sales decrease. The majority, however, believe that
the specialty house occupies the best position. It can pre-
i
pare a better meal than any other restaurant and it can sell
that meal cheaper.
War effects all restaurants about equally. There is
plenty of money and there are plenty of customers but there
<
jis not plenty of legitimately obtainable food. Fish houses
l
and chicken houses and some of the foreign restaurants which
use limited quantities of meat and which can do without im- i
ported foods, are in the best position.
I
j Popular restaurants, specialty houses in particular
| --------------------------: ---------- nr
since they are usually the most popular, are constantly
being copied. Some people copy a well established name in
i
jthe hope of confusing people and thereby drawing them in.
i
Others copy the dishes or the service of a successful house.
i
This second type of copying is acceptable for it means more
people will receive better food or better service, or both.
According to the statistics, the restaurant chains
have been losing out percentage-wise to the independents
Isince 1939. Many people prefer the cordiality and informal
ity which can seldom be found in chain restaurants. Special
ities which require large populations for support, do not lend
themselves well to chain operation within one area. Very
often the specialty can be successfully put over in a seeond
city, however.
1 0
I Indidental operations are very profitable for many of
i
1
jthe houses surveyed. Most of them sell specialty foods and
gifts.
CHAPTER-X
SUMMARY AND CONCLUSIONS
I. SUMMARY
! Location Considerations
A specialty house, because of its ability to draw
from a large area, generally need not put as mueh emphasis
on location as the average restaurant. Very often it can
loeate where the contractual rent is low and develop a
following which will come to it. A quieker, but more expen
sive, plan is to loeate near other restaurants and even other
specialty houses. The contractual rent demanded will be
greater but so will the number of people who consider the
district to be a good restaurant neighborhood. Once a
! neighborhood has been chosen and the specialty has been
(
built, neither the specialty nor the location should be
changed.
The Restaurant Public and Consumer Acceptance
Specialty houses cater to people who know good food
i and appreciate efficient service in a quiet setting. In
I
all income groups there are people who are accustomed to
eating in restaurants and those who are not. The exper-
| ienced diners have come to believe that the specialty house
I
■ does the best Job on its dish. To safeguard this belief,
116
the specialty house has to give more for the money than the
average restaurant. Its buying, cooking, and serving advan
tages generally make it possible to give more for the money
I by increasing turnover. The ability to “give a good value"
!
and the novelty created by the specialty itself enable the
specialty house to draw and hold customers from a large area
and to attract a great deal of tourist trade.
Food Procurement and Service
Unfortunately, the average specialty house does not
l
jhave the volume of business or the storage space to permit
jthe advantages of large scale buying. Those which do have
!
jthe volume and the space are in an especially favorable
i
(position since they also have the usual specialty house ad
vantage of requiring only a limited number of items. Even
the small operators, however, buy enough of certain items to
qualify for quantity discounts.
A specialty house experiences great difficulty when
attempting to change its menu. For that reason, it should
look to the future when deciding on a featured dish. This
jdish should be served with the side dishes which people
(associate with it and not with foods which complete a dieted
i
ically sound combination. !
j
People have come to believe that liquor and some
jforeign foods complement each other. Specialty houses fea-
i
117
turing these foods should serve liquor. Other specialty
houses need not serve liquor unless they cater to people who
Jexpect it.
I
bosts and Price Rigidity
Food costs are higher in specialty houses than in the
average restaurant. In a way, this is an advantage for the
food is the big attraction in any eating place. Less com
plicated operations reduce labor costs to a point below the
average. All other costs are much the same as in any res
taurant.
Table d'hote houses experience more difficulty in
raising prices than a la earte houses do because an increase
La the cost of one dish raises the price of the entire meal.
i
I
Since most specialty houses have a table d'hote type service,
i
jthey faee some price resistance. Only those which have ad
vertised a certain low price or which serve foreign dishes
which are considered inexpensive to prepare, experience much
Iprice resistance.
!
1 Utilization of Food and Equipment
The specialty house occupies the most favorable posi
tion as far as the use of food and equipment are concerned.
A limited selection of dishes is responsible for this. It
simplifies eooking procedure and generally reduces the cost
of kitchen equipment. Although simplified, the cooking pro
cedures and the arrangement of kitchen equipment vary as
much from specialty house to specialty house as from restau
rant to restaurant.
Labor Policies and Problems
Specialty houses, where operations permit, prefer
training their own new employees because of unique methods
of preparation and service. The featuring of a limited num
ber of dishes generally simplifies this training. It also
simplifieshthe control of pilferage.
Tips, in all restaurants, vary from ten to fifteen
percent of the check. The high customer turnover in spedal-
i
ty houses increases the number of tips.
Advertising Techniques
The most effective advertisement is good food.
Second to good food in general would be a good specialty,
something that makes a restaurant stand out in people’s
minds. After these come originality, atmosphere, good ser
vice, paid advertising, employees who enjoy working in the
i
restaurant, and other connected operations such as gift
jshops or markets.
Long Run Questions of Importance
i
i The chapter on Long Run Questions of Importance was
119
considered to be somewhat of a summary itself. 11 assumes
an acquaintance with much of what has been said in the first
;ten chapters. Therefore, a further summarization of it will
I
not be attempted here.
II. CONCLUSIONS
The Specialty Place, different, exotic food, for
a different, discriminating type of clientele. Your
| chance to shine 'at anything from a superb fish fry,
to a Swedish SmtJrgasbord, to a Moo Goo Guy Pan.
i Your chance also to get priees ranging all the way
I from moderate to very high in return for your
] efforts. Often the best type of place for an ama
teur to try his hand at, because here originality
is the great key to suecess.1
The above quotation could easily have been written as
|the concluding paragraph for this thesis. In a few words,
lit tells much of the story of the preceding chapters. Spe
cialties can be different, exotic. Seldom can the regular
|restaurant be successfully compared with the specialty house,
Where only a few items are handled, there are bound to be
advantages. These will show in one way or another. They
might be apparent in quality, quantity, price, service, or
in something such as atmosphere which is not directly con-
i
nected with the food.
! The specialty house draws a discriminating type of
i 1
Iclientele. These are the people who know good food, the
people who can be depended upon to return to a restaurant
which they have found to serve good food. An excellent job
in the preparation of almost any dish will be rewarded by
-the patronage of the people who appreciate fine food.
| Price resistance is a minor problem for most special
ty houses. Public opinion limits most restaurants in what
they can charge for a dish. They must charge approximately
what their competitors charge. The specialty house is not
restricted by narrow limits. It can charge more than the
jothers because people believe a meal turned out by it will
be better than the same meal when prepared by the average
restaurant.
Originality and specialization go hand in hand. Even
the idea of serving just one or two dishes shows a change
ifrom the commonest idea of restaurant operation. The me
chanics of serving this dish or these dishes requires fur
ther originality. This originality, or better the ability
to vision what will appeal to the restaurant public, is of
the utmost importance in specialty house operation. Without
i
jit, a man cannot succeed in a specialty house undertaking.
i
jWithout it, but with a knowledge of the operational side of
jthe restaurant business, a man can succeed in a regular res-i
jtaurant. Most of the representatives of the restaurants
surveyed had no restaurant experience before entering the
121
specialty field. Only Mr. Dewey Logan of the Original Pan
try, Mr. James Nickoloff of the Original Barbecue, Mr. Han
sen of Scandia, and the representative of the Round-Up had
previous general restaurant experience. This would indicate
that specialization is not a field into which the experienc
ed operators generally venture. Only those people with the
necessary vision, those with the desire to try something
new, open specialty houses. This should be encouraging to
the amateur who has been hesitating. It would seem that he
!has very little to fear from the average restaurant man.
The only competition in kind he has to fear is from the man
who has already succeeded in the specialty field and, there
fore, understands both the requirements of specialization
'and the fundamentals of restaurant operation.
BIBLIOGRAPHY
i
122
A. BOOKS
Dahl, Joseph Oliver, Kitchen Management. New York: Harper
& Brothers, 1928. 3^4 pp.
Dahl, Joseph Oliver, Restaurant Management. Principles and
Practice. New York: Harper & Brothers, 19Mf, Vth rev.
1 ed. 3¥8" pp.
: Dahl, Joseph Oliver, Selling Public Hospitality. New York:
Harper & Brothers, 1929. 357 pp.
: Gordon, Leland J., Economics for Consumers. New York:
American Book Company, 19*+V, 2d. ed. 666 pp.
Gray, Madeline and Vass De Lo Padua, How to Be a Success in
the Restaurant Business. New York: Greenberg Company,
278 pp.
MacDougall, Alice Foote, The Secret of Successful Restau
rants. New York: Harpet & Brothers, 1929. 2*+5 PP^_—
Woman’s Institute of Domestic Arts and Sciences, Establish
ing a Food Business. Scranton, Pennsylvania: Interna-
j tional Textbook Company, 19*+2. 201 pp..
B. PERIODICAL ARTICLES
Aldrich, Gerry, "One Entree Only,” Pacific Coast Record.
XXXVIII (February, 19^8), 26.
Griffin, Townsend, "Building Repeat Business," The Restau
rant Digest. (December, 1950), 3.
"Hiring the Right Man," The Restaurant Digest. (November,
1950), 1.
Martin, Pete, "Pago Pago in Hollywood," The Saturday Even
ing Post. (May 1, 19*+8), 32.
Menu of Knott’s Berry Farm. Buena Park, California:
Knott's Berry Farm. 8 pp.
Smith, L. Wilbur, "Lowdown Given for Food Profits," Pac
ific Coast Record. XXXVIII (May, 19^7), 52.
"The Cock'n Bull," From Hart to Heart. I (March, 19M+-), 9.
"Tipping Volume," The Restaurant Digest. (November, 1950),
12.
Van Nostrand, Richard A., "Test Your Menu," The Restaurant
Digest. (October, 1950), 1.
Wexman, Joseph, "Causes of Failure," The Restaurant Digest.
(December, 1950)16.
C. NEWSPAPERS
Los Angeles Times. March 22, 1951.
APPENDIXES
.APPENDIXES
The Information contained herein, except for that on
the Los Angeles Farmer*s Market, was provided by the repre
sentatives of the sixteen specialty houses surveyed. That
!
on the Farmer*s Market represents the observations of the i
i
writer.
There are a variety of specialty food booths at the
Los Angeles Farmer*a Market. The popularity of these booths
demonstrates the power of specialization. For this reason, j
If for no other, they are included.
Each representative was asked the fifty-four ques
tions which appear in Chapter I of this paper. It is their
lanswers, paraphrased, which form the body of the Appendix.
I
»
Repetition, especially on the points where there is general
agreement, was -unavoidable. Some of the points may appear
'to be rather disconnected, or perhaps rather obvious. It
!
jshould be remembered that each operator has different ideas
jas to what is important, and that where a survey method is
jfollowed, it is often difficult to obtain a complete answer
to each question.
i
i In the body of the paper, the material is divided as
,to subject. This makes possible the examination of a cer
tain point without studying the Appendix sections. For
those readers who require or prefer more detail. It can be
125
found In the Appendix sections which follow.
i
i
i
126
APPENDIX A
LAWRY’S, “THE PRIME RIB"
STEAR’S FOR STEAKS
RICHLOR’S
Lawry's, “The Prime Rib" is located at 55 North La
Cienega Boulevard in Beverly Hills, Stear’s for Steaks is
located at 116 North La Cienega Boulevard, Richlor’s, a
planked hamburger and fish house, is located at 13*+ North
La Cienega Boulevard. These restaurants are owned by one
(
organization which is referred to as the Lawry organization
in this paper. One of its representatives provided the
following information.
i
' Definition
i
! To the Lawry representative, a specialty house is a
restaurant with five or fewer entrees. Foreign restaurants,
which really limit themselves to the dishes of one country,
whould be included even though many of them offer more than
five entrees.
{ Background
History. — Lawry’s was first opened in a leased
building on La Cienega in 1938. It remained there until
i 19^8 when it opened in a new building in the next block.
i
|The old building was redecorated and became the home of a
i ____________ ■
127
new steak house, Stear's In 19^8. The third Lawry restau
rant being considered, Richlor’s, was opened in 19^2. It
features sea food and a planked hamburger.
' Size of business. — Lawry’s seats approximately 260
i
people in the dining room. At least one half that number
can be accommodated in the lounge, one of the largest in the
United States. There is a dinner turnover of about four
times. Stear’s can seat approximately 150. It has a dinner
turnover of three. Richlor’s can seat approximately 150.
!There, the dinner turnover is five.
Name.-— In choosing names, the Lawry organization
looked for the unusual and something with a pleasant feelingj
or association. All three of the names were coined. Lawry’ s
i
Iwas first named Larry’s in honor of Mr. Lawrence Frank, the
(president of the organization. Since there are many other
restaurants named Larry’s, the name was later changed. The
name Stear’s has no significance. Steer beef is the best;
the association was believed to be advantageous. Richlor’s
was named after two members of the Frank family, Richard and!
i
; Lorraine.
j
Other operations. — The Lawry organization is engaged
in many business activities. Lawry salad dressings and sea-j
sonings are sold nationally. A fourth specialty house, not
considered in this paper, is operated. A meat processing
128
plant, handling *f00,000 pounds of meat a month, provides
still another activity. This was built to service the Lawryj
restaurants but it has the facilities to sell to other vol
ume meat users. Three coffee shops and a drive-in are also
operated.
Location
Type of district. — La Cienega Boulevard is Los
Angeles’s "restaurant row." The restaurants here are the
i
jfinest and the competition is the sharpest of anywhere in
the Los Angeles area.
| To the Lawry representative, location is a matter of
minor importance. As an example, he cited Perry’s of Pasa
dena. In that ease, a very nice restaurant was built in a
1
poor neighborhood, and yet it has been exceptionally
[successful. The recommendations of satisfied customers can
i
overcome location difficulties.
To him, road side houses are a special case. The
appeal of an out of the way roadhouse such as Knott’s Berry
Farm is due to its humble start and amazing growth. If
Knott’s were to be reproduced at another out of the way
place, the glamour would not be there and failure would be I
quite possible.
| 4 competitive location. — The Lawry representative
jbelieves that La Cienega is the finest restaurant street in
129
the world. Competition is at its sharpest there. In spite
of this competition, Lawry's welcomes new restaurants so
long as they keep up the high standards of the "row." What
, they charge and what they serve are not concerns of the
Lawry organization. Each new restaurant induces more people
to dine on the "row." If the restaurant that lured them out
is full, they might stop at a Lawry restaurant. If they
stop once they will come back.
4 n-Hnxed1 1 location. — Two restaurants had failed
in the building in which Lawry's was so successful. Accord
ing to the Lawry representative, the fact that a restaurant
has failed in a building is a minor consideration in select
ing a location.
Accessibility, transportation, parking. — Most
!people in Los Angeles drive when they are going any place to
dinner which is not within walking distance of their homes.
The Lawry restaurants serve dinner only. For these reasons
it was not deemed necessary to consider public transporta
tion. Accessibility was not given serious thought either.
Los Angeles is so spread out that it is difficult to find
any central locations. The available parking space was an
i
|important consideration. As an example, the parking lot set
up for Stear's covers four times the space occupied by the
building.
130
Ability to move. — The Lawry representative believes
jthat a well established specialty house, especially one with
ja national reputation, can retain most of its trade provid-
!
|ing it does not move too far. Except for the one bloek
;move by Lawry's in 19^8, the Lawry restaurants have not had
to test their ability to move.
I Good specialty house cities. — The representative
i
|stated that it takes a fair sized population to support a
specialty house. Wherever the population is present,
|specialty houses can prosper. In recent years Los Angeles
ihas become a good restaurant city.
i
Clientele
People catered to. — None of the Lawry restaurants
I
iwere set up to cater to any occupational or financial
i
groups. When Stear's was planned in 19^8, it was determined
that a fine steak dinner could be sold for two dollars and
fifty cents. Lawry's was planned in the same way. Today
Stear's dinners begin at three dollars and fifty cents.
This is one dollar more than the first price quoted but not
|out of line with steak prices in the Los Angeles area.
t
Steady customers. — The representative stated that
. !
t
specialty houses depend on steady customers just as much as
other restaurants do. Since the specialty house has the
i
jgreater drawing power it is not as important if the same
131
people do not come as often as they might to a regular res-
jtaurant. However, there are some people who eat at least
j once each week in the three Lawry restaurants under consid-
i
;eration.
Tourists. — Lawry’s enjoys a national reputation far
its fine roast beef. People try it, remember it, and tell
their friends about it. When their friends are in Los
Angeles they too come to Lawry’s. The tourist trade is
\
heaviest in February and August. It is so heavy, that
Lawry’s cannot accommodate everyone desiring to eat there.
Stear’s, Riehlor’s, and the other newer places get the over
flow. In time, the others are expected to have national
i
reputations too.
Reservations, turnover. — As has been said, the
!turnover at Stear’s is three, at Lawry’s it is four, and at
Richlor’s it is five times each evening. Turnover is pre
ferred to high prices. Since reservations reduce turnover,
they are not accepted.
Psychological advantages. — Waiting for a table has
its psychological effect, according to this authority. Peo
ple conclude that a place must be good if there is a line.
.Some have actually seemed disappointed when they could be !
i i
jseated immediately at Lawry’s.
i
I Restaurant people are justified in believing that a
- 132
specialty impresses more people than many good items but no
outstanding ones. Lawry's national reputation is consider
ed to be an example of that. A place that serves fine roast
beef, but nothing else, is a place people will remember and
\
tell their friends about.
Serving: The Hours and the Menu
Hours. — The approximate hours for the three restau
rants are from 5*00 to 10:30 P.M. Only dinner is served.
The peak hours are from 7*00 to 9*15 P.M.
Food.— Lawry's serves prime rib of beef at three
dollars and twenty-five cents a serving. At the beginning,
it was decided that prime rib was to be the only entree.
Next it had to be discovered what people expect in the way
jof side dishes with roast beef. It was decided that a salad,
t .
Imashed potatoes, bread, and Yorkshire pudding would do very
i
inicely. If a customer wants soup, a vegetable or dessert,
he may order it. Usually, the roast beef and its side dish
es are ample. By not serving more side dishes, Lawry's can
keep turnover at a high level.
Stear’s serves steaks and chops. The prices vary
from three dollars and fifty cents to four dollars and fifty:
j I
;cents. The same meal planning approach was used there.
i
jRichlor's features sea food and a planked hamburger. The
prices range from one dollar and fifty cents to two dollars
133
and seventy-five cents.
Liquor. — Liquor is served at the Lawry restaurants.
People are not pressured into buying drinks as in many res
taurants. The Lawry representative does not appreciate
those restaurants which intentionally lose money on their
food to lure people in. Their dining rooms are set up to
only accommodate a few at a time. Those waiting will more
than pay for their dinner through the drinks they buy. At
the Lawry restaurants the bar is considered to be an accom
modation for the guests. This does not mean that the im
portance of liquor is discounted. Its sale is very profit
able. Most restaurants will show liquor sales of about
‘twenty percent of their total sales. The income on liquor
per dollar, however, is twice as great as on food.
4 balanced meal. — Lawry’s does not attempt to serve
a complete meal or a well balanced meal. Balanced meals
have their place in hospitals and homes but not in specialty
houses. When people buy roast beef they want “all the trim
mings,” and that is what they get. A beverage, a vegetable,
or dessert may be ordered a la carte.
Food Procurement
The Lawry organization owns its own meat processing
Iplant. It handles *+00,000 pounds of meat each month. This
|
jplant sells to other large scale buyers as well as supplying
13$
the chain. Most of the fish used at Richlor’s is bought
once each year and frozen.
Most specialty houses, because of their limited oper-
1
|ations, buy from local jobbers (jobbing houses). They can-
i
not buy futures satisfactorily because of limited storage
facilities and the need for fast food turnover. The Lawry
organization has to turnover many items quickly but its
large operations do permit large scale buying.
Costs
Food and labor costs range between seventy and
seventy-five percent at these restaurants. Last year, 1950,
!
j the cost of steak forced food costs beyond sixty percent at
jStear's. Food costs thereby absorbed any possible profits.
! |
{Food costs, according to this operator, tend to be higher in
specialty houses than in regular restaurants.
Most restaurants have a rent clause contract of about
five percent of sales. Stear’s, fortunately, has a low flat
rent charge. This helped it withstand last year’s losing
period.
Price Rigidity
; When Stear’s was opened in 19^8, beef prices were at
ithe lowest point they had been since World War II. Almost
t
I immediately they began to rise. This made it necessary to
— ^
raise dinner prices. It is believed that this caused no
public resentment. The public is as inflation conscious as
the businessman.
Labor
The staff— type of background required. — At Stear *s
there are two bartenders and forty in the food department.
At Lawry's there are four bartenders and ninety in the food
department, and at Richlor's there are two bartenders and
fifty in the food department.
Experienced cooks are hired. However, if cooks were
to be trained, it would be easier to train those in a
specialty house. The Lawry representative believes that a
better class of girls can be obtained if waitresses are
hired untrained and then trained for the type serving they
j will do.
Turnover. — Except for jobs such as dishwashing,
labor turnover is less than one percent per year. In addi
tion to two meals a day, vacations, an insurance plan, ex
cellent tips, and the other things which tend to hold em
ployees, there is a yearly bonus given at Christmas time.
Tips. — The waitresses are among the highest paid
in the country. They receive a minimum of eighty cents per
I
|hour, the union scale, but tips can add another twelve to
i 1
jfifteen dollars nightly. In Stearfs and Lawry's the average
i . ______________ ---------------------------- , --------------------------, — — — — — — — — -------------------------------------
bill is five dollars per person. The waitress will average
at least ten percent of that amount in a tip.
Pilferage. — When a new restaurant is opened, it
appears impossible to stop the customers and the help from
taking souvenirs. After the help has been there a while,
they stop taking most things. Food can be checked on quite
well. Specializing and good portion control make food
cheeking rather easy.
In order to reduce pilferage, packages are checked,
the back door is kept locked during the evening, and employ
ees are required to leave through the dining room.
Efficiency
In the use of food— waste. — The main reason for
specialization is that waste can be controlled. For the
Lawry representative, the above statement best explains the
presence of specialty houses.
In the use of equipment. — It is cheaper to set up
a kitchen in a specialty house than in a regular restaurant.
The Lawry restaurants were able to save on both kitchen
equipment and kitchen space.
The cost of increasing seating can be prohibitive.
After the opening of the new Lawry’s it was found that there
were not enough tables for two. Rearranging the tables
along one wall and putting in smaller ones would have cost
137
eight thousand dollars, and there would have been only room
for three additional people. Needless to say, the tables
were left as they were and now extra groups of two are given
! lar£er tables.
i
Advertising
The most important advertising, to this restaurant
man, is due to the satisfied customer. Next comes the
! specialty itself for it is something which makes a restau
rant stand out in a person's mind. Selling the help on the
restaurant is also an important factor. New dishes are al
ways tried on the help first to see their reaction and to
show them that their opinions are valued. Written ads pro
mote a little good will with the people with whom they are
placed, but they do not have much effect on the restaurant
publie.
Atmosphere
All three of these restaurants are housed in modern
expensively decorated buildings which come up to the stand
ards one might imagine for large Hollywood restaurants.
The decorations give no indication that these are specialty
houses.
i
Long Run Questions of Importance
I
) Mistakes in restaurant planning. — This operator
138
maintains that any one of the following could be a fatal
mistake in restaurant planning. The first is an expensive
location for a restaurant which cannot draw the clientele
i
that can afford to pay the high rent. The second is a poor
ly balanced organization. Seldom does one man have enough
experience and intelligence to be able to control all phases
of a growing organization. The third is undereapitaliza-
tion. No matter who opens a restaurant it will lose money
for from six months to a year. The inability to sustain
this prolonged loss is one of themmain reasons for restau
rant failures. Lawry’s was able to outlast this period and
what was once approximately a $100,000 investment would not
be sold today for $1,000,000 by its owners.
i
i
j Some suggestions which can be included here are,
i
locate where there is plenty of room for expansion and park
ing, plan to produce the best regardless of cost, and cater
to the general public by offering the most for the money.
Profit prospects. — Profit prospects are about the
same for specialty houses as they are for other restaurants,
jSpecialty house profits seem to be more consistent, accord-
t
i
ing to the Lawry representative. A constant menu change
seems to reduce profits. High profit items can be sold some
times but a restaurant cannot keep its clientele and its
prices up if it continues to feature low cost dishes.
139
Therefore, It must mix in low profit dishes to keep the
customers satisfied. In hot weather the average restaurant
should increase its profits because the demand for salads
and other hot weather dishes increases, and they are very
; definitely high profit items.
Profits for the three restaurants were lower in 19*+9
than in 19^8. The decline in business, however, was less
than that suffered by the average restaurant,
j Temporary fashion. — Specialization is not a fad,
i
jbut the ultimate. There is nothing faddish about such
i
basic dishes as steak. The Lawry representative went on to
say that specialization is even increasing.
Business fluctuations. — Business fluctuations do
not bother specialty houses as much as they do regular res-
jtaurants. Specialty houses should always be in a position
!to undersell others. Cafeterias also should do better rel
atively in poor times because of their lower prices.
The effects of war. — It is difficult to tell what
the effects of another war would be. It might be necessary
to close down if it were a severe one. During the last war
Lawry’s had to serve about a dozen different dishes. Spa-
i
ghetti, fish, and turkey were big items. They attempted to
keep their standards up because people do remember how they
;are treated. Often, however, the management did not know
IbO
from one day to the next what they would serve.
Effects of being copied. — Lawry’s, "The Prime Rib"
is a copyrighted name. Others have tl*ied to use part of
! this name. A former manager used it in San Francisco and
it was necessary to take legal action to force him to stop.
The attempts at copying have had no injurious effect on any
of the Lawry restaurants.
1 1 + 3 1
APPENDIX B
THE ORIGINAL PANTRY
!
1 The Original Pantry at 915 West Ninth Street in Los
Angeles, California, is primarily a steak and chop house.
It has a secondary late night and morning specialty of ham
and eggs.
"We love you— one and all. And we want you to be
well fed. That has been our policy always." These are
the words of Mr. Dewey Logan, the owner and the man who vol
unteered the following information. He believes that the
key to his success is the basic philosophy of treating
i
I people right. It must be paying off for he serves more
>
than 1,800 meals a day in his sixty seat establishment.
Definition
A specialty house is a restaurant which features a
limited menu with little variation in it from day to day.
Foreign restaurants could be included.
Background
History. — The Pantry was first opened in 192^ at
; I
the location it still occupies. When first opened, the
i
Pantry seated fifteen. By tacking small additions onto the
back of the original building, the capacity has been in-
552^
creased to sixty. In its twenty-six years the Pantry has
never closed its doors. At meal time there is always a line
and after midnight on weekends there is often a line.
, Size of business. — There are eighteen stools and
forty-two chairs which make a total of sixty seats. 1,800
people are served daily. That gives the Pantry a daily
turnover of thirty.
Name.— Mr. Logan first used the name of a small res
taurant in Denver, Colorado, in which he was a partner.
This accounts for the Pantry part of the name. The word
1 1 Original" was later added because another restaurant in the
next block had taken the name of the Chef‘s Pantry. The
word "Chef" was not emphasized.
Location
1
Type of district. — The neighborhood was quite nice
when the Pantry first opened but in recent years it has de
teriorated. At present, with plans for a new hotel and ad
joining buildings, it appears that the neighborhood will
improve. Ninth Street has quite a bit of through traffic.
This type of traffic does not do a restaurant too much good.
Within a short time the Pantry will move into another
building at Ninth and Figueroa Streets. There will be a few
■more seats here and a much larger parking lot. Mr. Logan
lintended to build but the increasing costs of construction
— llf3
have caused him to change his mind.
Accessibility, transportation, parking. — Since the
Pantry has always had a central location in downtown Los
Angeles, it has not had to give accessibility and transpor-
! tation any serious thought. Mr. Logan did have to consider
parking, however. A large parking lot is very important.
I
I Clientele
People catered to. — The Pantry caters to all who
j like good food and plenty of it. Most of the lunch busi-
!
ness comes from people who work nearby, but the dinner
patrons come from all over the city.
I
Steady customers. — Most of the Pantry's customers
are "steadies." Even though it is true that people eat
lighter meals in hot weather, the Pantry shows no material
decrease in business in the summer time.
Tourists. — The tourist trade adds an almost con
stant percentage to the business throughout the year. This
percentage is rather small.
Reservations. turnover. -- Mr. Logan stated that
volume is everything at the Pantry. Food costs are so high
that the present policies could not be maintained if the
turnover were to decrease. This makes taking reser-
------------------------------------------------------------------------- 1 W
vations impossible.
Psychological advantages. — Mr. Logan believes that
a line waiting for tables has a very good psychological
effect. If there were no line, he would take a few chairs
out to create one.
Mr. Logan admits that there might be a slight psycho
logical effect in charging separately for the meal and such
things as a beverage and dessert. This is only slight, how
ever.
Serving: The Hours and the Menu
Hours. — The Pantry never closes. There is always
a line of people waiting at meal times.
Food. — The basic serving principle is, make sure no
one goes away hungry. Steaks, all the way from the ham
burger at one dollar to the tenderloin at two dollars and
seventy-five cents are served. Cold slaw, sour dough bread,
and fried potatoes come with the steaks, and with the chops
which are also served.
From 10:30 P.M. until morning ham and eggs, as well
las steaks, are served. One dollar and forty-five cents is
!
ithe price. Each piece of ham, a center cut, weighs about
I
one pound. A smaller portion of ham and eggs is served for
ninety cents at breakfast.
In addition to these specialties, other items are
1^5'
sold. Northern halibut is featured on Fridays, several
items are offered at noons, and sometimes a roast, a stew,
or a turkey is served in the evening. These extras are
I usually sold out in a very short time.
i
The menu should never be changed unless conditions
force it. Keeping the menu the same is an important faetor
in specialty house success.
Liquor. — Mr. Logan never really considered a bar
for his type of establishment. His customers are well sat
isfied now and he does not know what their reaction toward
a bar would be.
Food Procurement
j Although their operations are large, there is not
;room to store large quantities of food. It is their policy
I
to find jobbers who can furnish the best food and then trade
with them exclusively. Many jobbers have been supplying the
Pantry’s needs since the day it opened.
Mr. Logan contends that it is eheaper and less
trouble to buy just the cuts of meat needed and not try to
buy whole steers and have to sell the portions not used.
Beef is bought locally. The hams are shipped from St.
|Louis. The meat bill for the Pantry for an average week is
!$5,500.
------------------------------------------------------------------- 1^5-
Costs
Food costs are over sixty-five percent, by far the
1 highest of the houses surveyed. If it were not for the
i
j large volume of business, the food costs would be prohibi
tive. Labor costs are about average.
Price Rigidity
Mr. Logan stated that in the past there has not been
any resistance to necessary price increases.
Labor
The staff— type of background required. — There are
forty-five employees in all. Only well-trained men who
j appear capable of adjusting themselves to the Pantry's type
of operation are hired, except for the various unskilled
t
jobs. The work is difficult and space is at a premium.
This makes it doubly important that only the best men be
hired.
Turnover. — Except in such jobs as dishwashing,
there is no labor turnover. Mr. Logan stated that some of
the waiters have been there more than twenty years. The
newest waiter has been there more than six years. The aver
age employee has probably been there more than ten years.
There is no turnover because Mr. Logan treats his
i
jemployees as well as his customers. His waiters punch no
1^7
time clocks; neither do they have a bulletin board from
which to get their instructions.
Tins. — The waiters are very well paid and are
I
allowed to keep their tips, which are quite good. The
large volume keeps the tips well above average.
Pilferage. — Mr. Logan reported that there is no
pilferage. The men take almost as mueh interest in the
business as he does himself.
Efficiency
In the use of food--waste. — Food costs are so high
that a large volume is the only thing which keeps them from
being prohibitive. Serving a limited number of items has
practically eliminated waste. There is no portion control
on foods other than meat. This means higher costs but it
also means customer good will.
In the use of equipment. — Mr. Logan believes there
is a saving on kitchen equipment in a specialty house. The
Pantry has limited its equipment to one grill, one hot
plate, and one stove. Mr. Logan plans to better equip the
kitchen at the new location.
Serving advantage. — Everything inside the building
i
is set up for the greatest possible serving advantage. The
waiters are able to set the tables, dish everything but the
meat and potatoes, and clear the tables. They even carry
-------- . ------------------------------------------------ ^ g -
the portions of the meat to the cook to he prepared. The
building itself, since it consists of several rooms tacked
together, cannot be considered efficiently designed.
Atmosphere
It is possible that the lack of atmosphere might be
considered atmosphere. The cafe consists of several small
buildings, all painted bright orange outside, and all de
corated very plainly on the inside. Part of this atmosphere
is the usual crowd waiting to be served.
The Long Run Questions of Importance
Mistakes in restaurant planning. — Most restaurants
fail because of the inexperience of the management, accord
ing to Mr. Logan. An individual with experience should
start in a small way and build his business as he is able.
Business fluctuations. — If a business is well es
tablished, business fluctuations should not have too much
effect. Specialty houses are probably in a better position
than most restaurants. Business has increased eaeh year at
the Original Pantry.
The effects of war. — The last war really hit the
sources of supply. It was necessary to serve a great deal
of fish and poultry. Sometimes steak could only be served
for thirty minutes to an hour at a time, the demand was so
great. It is difficult to say what effect another war
might have.
150
APPENDIX C
ORIGINAL BARBECUE
The Original Barbecue is located at 801 South Ver
mont Avenue in Los Angeles. The information on this restau
rant was provided by the owner, Mr. James Nickoloff.
Background
History. — The Original Barbecue was first opened
in 1936. It has always occupied the same location. An in
crease in seating has been the only material change. It was
the first rotisseui spit barbecue in Los Angeles.
Size of business. — The restaurant seats seventy-two
people. On an average day over five hundred meals are sold.
t
t
(Many of these are boxed and sold for home consumption.
Name. — The name, Original Barbecue, was selected be
cause this was the first barbecue of its type in the Los
Angeles area.
Other operations. — A similar restaurant has been
opened by Mr. Nickoloff in North Hollywood. So far it has
not enjoyed success comparable to that of the Vermont Avenue
restaurant, which is located at a busy intersection.
The Vermont Avenue restaurant sells a large volume of
food to take out.
, ^
Location
Type of district. — Mr. Nickoloff believes a restau
rant should be located where people can see it. The Barbe-
)
cue is located at a busy intersection. There are many
apartment houses and small businesses to draw from in that
neighborhood.
A good specialty house can be put over, in time, even
in a poor restaurant location, but there must be enough
people from which it can draw.
4 competitive location. -- The presence of other res
taurants is sometimes an advantage, sometimes not. Mr. NIek-'
oloff believes a well established restaurant, like the
Original Barbecue, benefits from the coming of new restau-
irants for they bring more trade to the neighborhood.
i
Accessibility, transportation, parking. — A restau
rant should be located on a busy thoroughfare. Heavy traf
fic, even if it all does not stop in the neighborhood, is
important. Mr. Nickoloff would like to add banquet rooms,
and he could do this by building on a lot which he owns and
now uses as a parking lot for the Barbecue. This lot, how
ever, is not loeated on the main street where it could
easily be seen. Therefore, he is not going to build. Park
ing is very important.
I
Ability to move. — Location is not as important for
152
expensive restaurants for their patrons can afford to go to
them. Restaurants such as this, however, which depend upon
all types of customers, must have central locations. For
this reason, Mr. Nickoloff is not sure if he could take most
of his customers with him if herwere to move. The fact that
the North Hollywood branch is not doing too well as yet
would seem to indicate that people might patronize one loca
tion and not patronize another.
Clientele
People catered to. — The first prices were set to
insure a large turnover. The clientele is made up of all
the classes which comprise the general public.
The “out" customers. — The customers who buy food to
take home are given larger portions than those who dine in
the restaurant. There are two reasons for this. One is
that people at home tend to inspect more closely what they
have purchased. The other is that the "out” customers are
probably the steadiest customers already and, therefore,
especially worth holding.
Tourists. — The tourist trade is important and con
tributes greatly in making the summer months of July, August,
and September the most prosperous. This makes the Original
Barbecue an exception to the rule that most restaurants
serving heavy foods do not do too well in warm weather.
. 1 5 3
Reservations. turnover. — A high turnover is depend
ed upon. Therefore, no reservations are taken.
Serving: The Hours and the Menu
Hours. — The restaurant is open from 11:30 A.M. to
1:00 A.M.
Food. — The Barbecue has the same menu for both
lunch and dinner. Barbecued baby spareribs are served for
one dollar and fifteen cents. One half of a barbecued
chicken is served for one dollar and thirty cents. Salad,
potatoes, and rolls come with these. A beverage is extra.
'Dessert is not included because prices would have to be
raised, there is not much demand for it, and its service
would reduce turnover. Dessert is offered, however. The
third item sold is a barbecued steer beef sandwich. This
sells for fifty cents.
Liquor. — For this price range and in this location,
a bar is not an essential. A bar might pay, Mr. Nickoloff
believes, if there were space available so that it could be
separate from the dining room. Beer is served, however.
Food Procurement
All buying is done locally and orders go in steadily.
There is no buying of futures. This policy and the lack of
storage make buying much the same as that of all restaurants,
-----------: -- • — I5lf
Ribs are bought in carload lots from a local jobber who
stores and delivers them as needed.
Costs
Mr. Nickoloff believes that in specialty houses the
food costs should be higher than in the average restaurant.
In his they vary around fifty percent. This figure can be
maintained because labor costs are only about sixteen per
cent. The large "out" customer trade is the main reason for
the low labor costs.
Price Rigidity
Mr. Nickoloff stated that it is difficult for the
Original Barbecue, a specialty house which has featured low
prices, to raise its prices for people have come to asso«~
date them with the meal. A regular restaurant can change
its menu when prices to it are raised. A specialty house
cannot.
Labor
The staff— type of background required. — Nineteen
people are employed. There are eight waitresses, four cooks,
I 7 7
t
three dishwashers, two cashiers, one bus boy, and a manager.
These people were hired untrained.
It is easier to train waitresses for this type of
work than for regular restaurant work due to the limited
155
menu and a service procedure that never changes. It is more
difficult to train the cooks for they have to learn the
special techniques which are employed in barbecuing.
i
Tins. — The waitresses at the Original Barbecue do
very well as far as tips are concerned. Where the volume is
large, the tips are good. Each tip may not be large but
there are many of them.
Pilferage. — Chickens are bought by the dozen and
ribs come in boxes weighing thirty pounds each. There are
two servings to a chicken and a certain number of servings
to a box of ribs. Accounting for these items is not diffi
cult. Each pound of beef should yield a certain number of
sandwiches. If it does not, there is no special way of
checking.
i
Efficiency
In general. -- Mr. Nickoloff contends that specialty
houses are opened because their operation is the simplest
and because a higher volume of business can be done.
In the use of equipment. — Kitchen equipment for a
specialty house may cost more or less than that for a regu
lar restaurant, depending upon the specialty and its method
Jof preparation. A rotisseui spit barbecue pit is expensive.
j
Advertising
i
j______ Mr. Nickoloff stated that good food at a low price is
156
the best possible advertisement, but he also stated that the
.power of other means of advertising must not be overlooked.
Tlie Original Barbecue uses television ads, leases space on
the backs of streetcar benches, and puts ads in the papers
and in trade journals. All this reminds old customers and
brings in new ones.
Atmosphere
The only distinctive atmosphere is provided by the
barbecue which is located where it can be seen from within
the dining room and from the street.
■The Long Run Questions of Importance
Mistakes in restaurant planning. — Mr. Nickoloff
i
stated that it takes longer to build up a following in a
specialty house than in a regular restaurant. Ihis is es
pecially true if the specialty is not one of the commonest,
klthough it takes time, the determination to stick by the
specialty is most important. Rather than lose a few custom-
jers, there is a tendency of new operators to include more
and more items. Once they do this, they lose all hope of
gaining the advantage of uniqueness which specialty houses
snj oy.
Profit prospects. — Profit prospects are good in
specialty operations. The business of the Original Barbecue
157
has increased from five to eight percent yearly for the past
■five years. The increase in 19*+9 was three percent less,
approximately, than the eight percent increase in 19^8.
Business fluctuations. — The business of a specialty
louse will hold up better during bad times than that of the
average restaurant, according to Mr. Nickoloff. One reason
is that it can give more for the money than restaurants which
sell a little of many items. Another is that people can get
at a specialty house something that they eannot prepare as
well at home.
The effects of war. — During the last war it was
necessary to almost cease operations because of meat ration
ing. Instead of opening at 11:30 A.M., the doors were open-
!ed at *f:00 P.M. and by 8:00 P.M. the day's quota of meat was
jusually gone. Many restaurants bought black market meat but
the Original Barbecue did not believe the risk was worth
running.
Mr. Nickoloff believes that since the government has
seen encouraging farm production and because of control ex
perience, if there should be another war there would be
better distribution of meat and more of it to be sold.
Effects of being copied. — The Original Barbecue was
the first rotisseui spit barbecue in Los Angeles, as has
been said. Today there are many. These have not hurt the
business of the Original Barbecue._____________________
153
APPENDIX D
KNOTT’S BERRY FARM AND GHOST TOWN
Knott’s Berry Farm and Ghost Town is located in Buena
Park, in Los Angeles County. The following information was
furnished by Mrs. Nelson, the private secretary to Mr. Wal
ter Knott and Publicity Director for the Berry Farm.
Background
History. — The business began in 1920 when the
Knotts started selling berries from a roadside stand on
their farm. By 1927 they were serving light lunches. It
was not until 193^, however, that they were serving the
chicken dinners for which they are known today.
Size of business. — There is a total seating capac
ity of approximately l,U-00. This includes the seven chicken
dining rooms and a steak house which has a seating capacity
of *f50. It is estimated that the average party takes one
hour to eat. On big days there is a turnover of about six,
a
On June 18, 1950 (Father’s Day) an all time high of ll,31 +6
dinners were served. In 19^9, l,112,*f0*f dinners were served
Other operations. — Until recently the selling of
boysenberry plants was a profitable sideline. For some rea
son Mr. Knott saw fit to discontinue this activity.
159
A variety of shops are operated at the Berry Farm.
There is an extensive market, a gift shop, and a dress shop,,
Each of these is operated by a member of the Knott family.
I A complete Ghost Town has been built near the main
buildings. Although Mr. Walter Khott considers this his
hobby, it does have a great tourist bringing effect. There
are fourteen shops available for renting in the Ghost Town.
Each of these pays a gross percentage rental. This rent
charge pays most of the expenses of the Ghost Town.
The shipping of jams and jellies has turned into a
big business. The demand for these, a national demand, is
especially heavy during the holiday season.
Location
i
i
Type of district. — The Berry Farm is in a small
town and to make matters worse, on a side road. This
should prove that a specialty house can be successful any
where people can get to it.
Accessibility, transportation, parking. — Mr. Khott
believes that people will come to a specialty house if it
really has something to offer. There are 1,500,000 people
within twenty-five miles of the Berry Farm. Most of them
i
can reach it within an hour in their cars. Mr. Khott be
lieves this million and one half are enough to assure suc
cess. People living further away cannot be depended upon to
160
make the long drive.
The twenty acres of parking is a big drawing card.
People hate to pay extra to park their ears.
Ability to move. — Mrs. Nelson believes it is diffi
cult to say how well this business would do in another loca
tion. Many people must think that it would do well, for
Mr. Knott has been given many opportunities to build else
where.
Clientele
i n ...r" " 'r
*
People catered to. — The Berry Farm caters to fam
ily groups and middle aged people. These people are stead
ier customers than the younger groups. It also caters to
j the tourists.
Tourists. — The advertising of the Berry Farm is
geared at attracting the tourist trade. Summer, the heavy
tourist season, is also the Berry Farm’s heavy season. Mr.
Knott is of the opinion that the tourist trade can be built
by featuring native products. Knott features berries in a
berry region. If he were located in a date region, he woulc.
feature dates.
Reservations. turnover. — The turnover on busy days
averages about six times. Reservations are made for large
i
groups only.
161
Psychological advantage. — Most operators believe
that there is a psychological advantage gained by the res
taurant when customers have to wait for a table. Mr. Khott,
i
ihowever, would like to have the facilities to seat all cus-
i / . '
tomers, even at rush hours.
Serving: The Hours and the Menu
Hours. — The dining rooms areoopen from 12:00 P.M.
until 9:00 P.M. The peak hours are from twelve to one and
from six to seven.
Food. — A complete southern fried chicken dinner is
(served for two dollars. Boysenberry jam, pie, and sherbet
are featured with the dinner.
In the Steak House, three dinners are served. There
is pioneer stew at one dollar, ham at one dollar and seven
ty-five cents, and steaks which are priced from two dollars
and twenty-five cents.
Liquor. — Liquor is not served. Mrs. Nelson said
the main reason happens to be that the Knotts are opposed to
it. They have built up a following (family groups and older
people) which appreciates the fact that liquor is not served.
It would be unwise now to alter that policy.
4 balanced meal. — The chicken dinner is quite well !
balanced but there have been complaints about it being
starchy. There would be more complaints, however, if a bal-
aneed skimpy meal were served
162
Food Procurement
The Berry Farm grows most of its own berries, rhu-
| barb, and cucumbers. It contracts locally for chickens
which are raised especially for the Berry Farm. Other meats
are bought from local jobbers. Most of the vegetables used
are bought locally.
The Berry Farm does not watch futures. A great deal
i
J of storage space does permit quantity buying, however.
Berries are frozen and stored.
Costs
i The published breakdown of costs is as follows : fooc.
i
land supplies forty-five percent; labor and bonuses twenty-
I
nine and one half percent; operating expenses thirteen and
one half percent; profit six and one quarter percent, and
taxes six percent.
Price Rigidity
The people accepted a price rise of twenty-five cents
i
some months ago when the chicken dinners went up to two
dollars so it would seem that there is no particular price
J resistance.
i
Labor
The staff— type of background required. — The Knott
163
organization employs 503 people. Eighty-one are in the
chicken kitchen and 1^6 in the front dining rooms. Thir
teen are in the Steak House kitchen and fifty-seven in its
I dining room.
In order to show the size of their operations, a
further breakdown follows? Offices and Warehouse twenty-
three, Markets twenty-nine, Shipping Department eleven,
Nursery twelve, Dress Shop fourteen, Miscellaneous Depart-
j ment twenty-seven, Maintenance twenty-six, Chicken House
! eighteen, Ghost Town twenty-seven, and the Farm nineteen.
The Knotts like to train their own kitchen workers
and waitresses. The duties for cooks are simpler than in
; the average restaurant and the waitresses have just a few
i
things to remember.
Employees are not given free meals.
Turnover. — Because of good labor relations the
labor turnover of permanent help is very low. High school
and college girls are hired as waitresses during the summer
season.
Tips. — Tips are very good because of the high
<
turnover.
Advertising
l
j Mr. Khott does not consider such things as newspaper
t
i ads to be good advertising mediums. In order to keep on
good terms with business people, however, he does place some
ads.
He does believe that it pays to solicit the tourist
'trade. He publishes a booklet which he places with the
travel agencies, in the train depots, and in most of the
motels from San Diego to Santa Barbara. He also contacts
groups which are planning conventions in the Southern Cal
ifornia area.
Atmosphere
The atmosphere here is quite remarkable. It does not
lie in the dining rooms which are neat and plain and set up
for high turnover and efficient service. It lies in the
out of the way location, the shops, the legendary growth of
the business, and, of course, the Ghost Town.
The Long Run Questions of Importance
Business fluctuations. — The Khott organization grew
during a depression period. From this, it would seem that a
specialty house can survive business fluctuations and even
prosper in spite of them.
The effects of war. — The effect of the last war was
( — — — r
not too great. Even without the tourist trade there was i
sufficient local business to sustain activity at a high
level. The local poultry producers were able to supply
[enough chicken. _ ___________ ____ _____________________
165
APPENDIX E
COCK’N BULL
, The Coek’n Bull is located at 9170 Sunset Boulevard
in Hollywood. The following information was provided by its
manager, Mr. Richard D. Hopkins.
Background
History. — The Coek’n Bull was first opened as an
English-type snack bar. That was in 1937 and at its present
location. Through the demand of customers it grew into a
full-sized restaurant. Like most of the other restaurants
surveyed, which did not construct their own buildings, the
amount of space allotted to the bar and to the dining room
i
iwas not planned.
Size of business. — One hundred ean be accommodated
in the dining room and fourteen at the bar. The average
dinner turnover is three.
Name. — The name Cock’n Bull was chosen because it
sounded English and yet it was original. It has nothing to
do with the fact that roast beef and roast turkey are two of
the main dishes served. j
Other operations. — A package-store is run in eon-
inection with the restaurant. Liquors, imported spices, and
166
various delicacies are sold. 3he Cock’n Bull Products Com
pany is also part of the organization. It bottles and dis
tributes Ginger Beer and Bombay Water nationally.
i
!
Location
Type of district. — This location was chosen in 193/
because Sunset Boulevard was a very progressive street. It
is still one of Hollywood’s finest and has many excellent
restaurants and night clubs.
Location is not as important to a specialty house as
to the average restaurant.
Accessibility, transportation, parking. — Parking
i
!space was not originally provided and, in fact, there was
.
no parking provided by the Cock’n Bull until a few months
jago. This eould indicate that parking is not an essential.
However, Mr. Hopkins did say that the parking lot has
brought an increase in business and that he would not open
another place without making arrangements for parking.
Ability to move. — If the Cock’n Bull were to be
moved to a comparable section of the city, it could take
most of its dinner trade with it. Mr. Hopkins is not sure
if it could take the bar trade, though.
Good specialty house cities. — Mr. Hopkins stated
that specialty houses are usually the products of large
167
cities. In the last ten to fifteen years Los Angeles has
become a restaurant city.
Clientele
j
I People catered to. — The Cock'n Bull never inten-
I
tionally catered to any class of trade. Since the dinners
are three dollars and fifty cents and four dollars, the
groups which can afford to eat there are limited, but it is
their policy to treat the one time customer as well as the
celebrity. Hollywood people are an important part of their
clientele and it has been said “that the Cock'n Bull serves
more newsworthy patrons per square foot of space than any
other gathering-place of epicures in America."1 Vogue Mag
azine rated it “one of the three best restaurants in Amer
ica."2
Steady customers. — Repeat customers are an essen
tial. This is especially true for higher priced restaurants,
such as Cock'n Bull, which cannot expect to catch much of
the traffic past thMr doors.
Tourists. — Because of their national reputation,
the tourist trade is important. It helps make the summer
months the best of the year.
■ |
i lf'The Cock'n Bull," From Hart to Heart. I (March.
19W, 9.
o
Loc. cit.
------------------------------------------------------ - . r 6 -g
Reservations. turnover. — This is one of the few
specialty houses surveyed which makes reservations. Mr.
Hopkins has not decided if this happens to be a good idea
or not. While it does hold many people who can afford to
! pay for the privilege of being seated immediately, it re
duces turnover and annoys people who have been waiting in
line. Once the policy of making reservations has been es
tablished, it cannot easily be changed.
i
Serving: The Hours and the Menu
i
Hours. — Both lunch and dinner are served. The
lunch hours are from 12:30 to 2:30 P.M. Dinner is served
from 6:00 to 10:00 P.M. The peak hours are from one to two,
and from eight to nine.
Food. — A buffet type dinner is served. Prime ribs
of beef at four dollars and roast turkey at three dollars
and fifty cents are the featured roasts. One or more other
roasts are also served each evening. These are priced at
three dollars and fifty cents. If one cannot make a meal of
a roast, he has many English dishes to continue with. Shep
herd^ Pie, Steak and Kidney Pudding, Madras Lamb Curry with
Bombay Duck, Welsh Rarebit, soup, salad, and dessert are all
there.
Left-overs are served for lunch. There is no profit
j on lunch but it is cheaper to use expensive pieces of meat
169
in sandwiches than to throw them out.
Liquor. — This type of a restaurant could not be
operated without a bar; the customers expect one. The
I Cock’n Bull bar has become well known in its own right.
The Moscow Mule is its best known drink.
4 balanced meal. — The management never tried to
figure out a meal from a dietetic standpoint. Mr. Hopkins
believes that people cannot be told what to eat, especially
those who enjoy the heavy foods served in this type of a
j specialty house.
Food Procurement
Unfortunately there is not enough storage space to
permit buying much more than the food presently needed.
I
jHowever, because large contracts for meat are given, quan
tity discounts are possible.
Costs
Food costs are higher than those of the average res
taurant, some ten percent higher. Here they vary between
fifty and fifty-five percent. The buffet type service, the
most expensive type service, partially accounts for the higli
food costs. It makes the cheeking of portions impossible.
■ Labor costs in the average restaurant average about
I thirty percent. Here they are about twenty-five percent.
170
Price Rigidity
Even in a restaurant such as this one it would seem
that people associate a certain price with a certain dinner.
! In 19*f8 it was necessary to raise the price of the dinner
from three dollars and twenty-five cents to three dollars
and fifty cents. Within a short time patronage had dropped
twenty dinners a night. It is possible that the business
adjustment of 19*+8 caused this drop but it followed the
price rise so closely that the price rise appeared to be the
i
cause.
Labor
The staff— type of background required. — There are
thirty-five employees. A restaurant should train its own
employees, if possible. It is easier to train cooks in a
specialty house than in a regular restaurant. Very often
at the Cock’n Bull when there is an opening for a cook, an
assistant cook can fill it. Waitresses only take orders for
desserts and beverages. In spite of this, Mr. Hopkins be
lieves that what it takes to be a good waitress at the
Cock’n Bull Is what it takes to be a good waitress anywhere.j
Turnover. — There is very little labor turnover. .
I
This partially explains the low labor costs. Cooks do not
i
t
have to work as hard as those in regular restaurants. This
171
encourages them to stay.
Tips. — Waitresses stay because this is one of the
best tip restaurants in Los Angeles. There are three main
I
reasons for this. A high priced dinner necessitates a high
tip. The Cock'n Bull patrons are accustomed to eating out
and to tipping. And their dinner turnover of three is large
enough to assure each waitress of a large number of tips.
Advertising
In the past it had been the policy of the Cock'n Bull
to spend not a dime on advertising, and business certainly
did not suffer because of that policy. It is recognized
that the national distribution of Cock'n Bull products has
I helped its restaurant business.
Recently the Cock'n Bull has been contributing to
the costs of a television show put on by a former employee.
This employee acts as a food consultant. She mentions the
restaurant quite frequently and Mr. Hopkins believes this
advertising has done some good.
Atmosphere
The atmosphere is authentically British. An inter
esting and expensive collection of antiques helps create
this atmosphere. It can be said that no other restaurant
surveyed by this writer places more emphasis on atmosphere
. 172-
than the Cock'n Bull. Now that the desired effect has been
attained, there are to be no changes. A customer who has
been away for five years will find the Cock’n Bull just as
i
| he left it.
i
Mr. Hopkins does not believe that any specialty house
should expand rapidly. Compactness is best.
The Long Bun Questions of Importance
Profit prospects. — It would seem that most success
ful restaurants are of the specialty type.
i
Specialty houses have greater drawing power than reg
ular restaurants and are able to charge more for people be
lieve that they do the best job of serving their special
ties. Mr. Hopkins believes a study of the Cock'n Bull’s
|record would verify this statement.
Business fluctuations. — It would seem that Los
Angeles specialty houses are better able to withstand busi
ness fluctuations than the average restaurant. The 19^9
volume of business at the Coek’n Bull was six percent under
ithe 19^8 figure. The average restaurant in the nation
(United States Census Bureau figures) during the same per
iod, suffered a loss of between eight and eleven percent.
So stated Mr. Hopkins.
The Cock'n Bull showed a continuous gain in business
I each year since it opened with the exception of 19^9. That
173
year’s volume, however, was higher than any previous year's
except 19^-8.
i
i
17*+
APPENDIX F
ROUND-UP ROOM
i
The Round-Up Room is located at 7580 Sunset Boulevard
in Hollywood, California. The following information was
provided by the management. It was requested that no names
of individuals be used.
Background
j History. -- This buffet-type specialty house was
first opened in 19*+8. Its type of operation has been so
successful that there have been no important changes since
1
then. The owner is building two similar restaurants in
other sections of the city.
* Size of business. — Sixty-five can be accommodated
!
in the dining room and forty can be seated in the cocktail
lounge. No special formula was used to set up this distri
bution of space. The building was used as it was found.
There is a turnover in the dining room every fifty minutes.
The management considers this to be exceptionally fast, con-
i sidering that such a large and complete meal is served.
t
i
Location
Type of district. — Sunset Boulevard, like La Cien-
Iega Boulevard, is an important restaurant street in the Los
17j
Angeles area. For that reason, if for no other, the Round-
Up has a desirable location. Room for expansion, an impor
tant factor, was considered when this building was leased.
4 competitive location. — It does help to be locat
ed on such restaurant streets as La Cienega Boulevard and
Sunset Boulevard. However, there is only room for one res
taurant of each type in a restricted area.
A "jinxed" location. — Five restaurants had failed
in the building in which the Round-Up has been so success
ful. The management doubts the existence of "jinxed" loca-
t
tions.
Accessibility, transportation, parking. — Unfor
tunately, there was no parking space available when the res
taurant was first opened. In spite of this, the business
flourished. A few months ago parking, which should be ade
quate, was secured in the next block.
Ability to move. — Moving to a better location might
help business but moving very far, whether to a better or
poorer location, will mean the loss of some old business,
according to the representative of the Round-Up.
Clientele
i
People catered to. — The price of the dinner, one
j dollar and fifty eents was first set in 19^8 and has not
I been changed since then. It was decided that people of
176
modest means could afford to pay that much. It was then
determined what could be served for that price.
Steady customers. — Return customers are very im-
; portant, in fact, they form the main customer group. By
i
serving four different entrees during the week, one a night,
enough variety is provided so that patrons do not tire of
the Round-Up’s food.
Reservations, turnover. — The profit in the Round-
Up comes from the sale of liquor. The more people waiting
for tables and the longer they wait, the better the liquor
sales become. With reservations there would be no need for
people to wait, and holding tables would mean a reduction
of turnover. Therefore, reservations are not taken.
Psychological advantages. — The representative be-
i lieves that raising the price of the dinner would have a
bad psychological effect on the patrons who have come to
associate one dollar and fifty cents with the Round-Up.
Although food prices have gone up since 19^8, it does not
appear that the one dollar and fifty cent figure will have,
to be discarded. Crowds are so large that it is often nec
essary to wait an hour or more for a table. And even
though the drinks are only fifty cents, the bar business isi
I large enough to absorb any loss there might be in the din
ing room.
177
Serving: The Hours and the Menu
Hours. — Lunch is served from 11:30 A.M. to 2:30
P.M. Dinner is served from 5*00 to 11:30 P.M. A Chuck
Wagon breakfast and an after theatre buffet are served from
midnight to 3*00 A.M. Peak hours are from six to ten in the
evening.
Food. — The Round-Up features one entree each even
ing. Oh Monday, Thursday, and Saturday it is pan fried
chicken. On Tuesday and Friday prime ribs of beef are serv
ed. On Wednesday it is swiss steak with mushrooms, and on
Sunday it is roast tom turkey. In addition to the main
item, relishes, salads, vegetables, biscuits, coffee, and
dessert are served. Each customer pays one dollar and fifty
* I
cents as he enters the dining room. He is shown his table
*
and then given a place in the buffet line. Seconds on
everything are free to those who care for them.
For lunch, two main dishes are served. Two are
offered because many people do not make special plans for
lunch but just eat where it is convenient. If a prospective
patron does not like one dish, he will probably like the
other. People do plan dinner and so less evening trade is
jlost by relying upon one item than is gained by the unique
ness of such a policy.
Liquor. — The bar, of course, is an essential. The
178
food brings people in. The liquor provides the profit.
Food Procurement
' Because of its ability to buy certain items steadily
I
’ and in volume, a specialty house can buy at lower prices.
Simplified buying means simplified stbrage. It is possible
to watch commodity prices and buy items at a saving which
can be stored. To the representative of the Round-Up, these
advantages are very important.
Costs
A breakdown of food and labor costs was not available.
Price Rigidity
The management believes that raising the price of the
dinner would have a bad psychological effect on the patrons
jwho have come to associate one dollar and fifty cents with
the Round-Up. Price is more important here than at any
other restaurant surveyed.
Labor
The staff— type of background required. — There are
six employees in the cocktail lounge and thirty-two in the
restaurant. The thirty-two includes kitchen help and the |
^managers. It has been found that specializing makes it pos
sible to operate with fewer employees than are required in a
179
regular restaurant.
Tins. — Specialty houses, the Round-Up included,
generally draw a better class of trade and, therefore, tips
are better. The waiters have volunteered to pool all tips
and split them evenly. This is not considered to be the
commonest practice.
Efficiency
In the use of food, waste. — All merchandise is
checked as it comes in and physical inventories are made
i
regularly. The number of portions from a given weight of
meat can be accurately estimated. As an added check, a
counter checks portions at the buffet table every so often.
In the use of equipment. — There is no saving on
jkitchen equipment in a specialty house, according to the rep-
■pre.sentative of the Round-Up.
Advertising
No outside advertising of any type is done. The man
agement does not believe this policy has caused business to
suffer.
(
Atmosphere
The restaurant is decorated in a Western style. The
buffet table rates as the most impressive feature in the
I establishment.
180
The Long Run Questions of Importance
Profit prospects. — There are no higher profit
1 prospects in a specialty house, according to this authority.
There is simplified control, however. Since the Round-Up
management is building two similar restaurants, it would
seem that profit prospects are at least as good as average.
Business fluctuations. — A specialty house should be
better able to withstand the effects of business fluctua
tions than a regular restaurant. Its natural serving advan
tage can be given credit for this. A specialty house can
always give the best value.
The effects of war. — War does not effect specialty
houses in any peculiar way. If there were a war, the Round-
I
; Up should retain its present relative position.
1
1ST
APPENDIX G
TEE CAPTAIN'S TABLE
i
I
The Captain's Table is a sea food house at 301 South
La Cienega Boulevard, Los Angeles, which features Eastern
shell fish. Mr. B. G. Tohl, one of the owners, provided the
following information.
Background
History. — The Captain's Table was first opened in
! January of 19*+8. Since then it has been enlarged and a bar
has been added.
Size of business. — Eighty-five people can be accom
modated. There are eighteen stools at the main bar and six
stools at a smaller piano bar. On an average day 200 cus-
I
I
tomers will be served. The turnover exceeds two on weekdays
and exceeds three on weekends.
Name. — The name of the restaurant brings to mind
sea food and the fine meal a ship’s captain is believed to
receive.
Location
i
Type of district. — All that has been said about the
■ I
(advantages of being located on La Cienega Boulevard can be
i
iapplied to this as well as to the other restaurants. Mr.
Tohl chose this location because it is on the "restaurant
row."
4 competitive location. — Mr. Tohl believes it is
i an advantage to be near other restaurants. He even welcom
ed Smith Brothers Fish Shanty because it will bring more
fish lovers to the "row." And since the Shanty features
lake fish and the Captain’s Table features Eastern shell
fish, there should not be much competition.
Accessibility« transportation, parking. — Mr. Tohl
I
clocked his corner for automobile traffic before building.
Since he believes traffic is important, he also believes
parking is important. Parking should be adjacent to the
restaurant. There should be room for one half as many cars
as there are seats in the restaurant.
Good specialty house cities. — Mr. Tohl stated that
there are not too many people in Los,Angeles who know good
food. San Francisco is a better restaurant town because it
is more cosmopolitan.
Those houses specializing in sea foods do well in the
small New England coastal towns. They depend upon local
(
people for patronage. This would indicate that a large pop
ulation need not be an essential.
!
Clientele
People catered to. -- The first prices were based on
costs. A forty percent food cost was assumed. Rather high
prices limit the clientele to the upper middle class and the
upper class.
Type of people in Los Angeles. — Western people,
I
this includes those in Los Angeles, have to be introduced
to Eastern sea foods, according to Mr. Tohl. Since the
number of repeat customers is increasing it would seem that
this introducing or educating is taking place.
Tourists. — Tourist trade varies with the seasons.
So far, the location, La Cienega Boulevard, brings in more
tourist business than the reputation of this one restaurant
does.
Seasonality. — From Lent to fall business is best.
During Lent a great deal of fish is eaten. The tourists
' make summer an exceptionally good period.
I
!
Serving: The Hours and the Menu
Hours. — The Captain's Table is open from 5*00 P.M.
to 2:00 A.M. The peak dining room hours are from 6:30 to
9*00 P.M. Peak bar hours are from 11:00 P.M. to 1:00 A.M.
Food. — Eastern shell fish is featured. For those
who do not care for sea food, steaks are offered. For the
■ after show trade, sandwiches are sold. Sea food dinners
I
vary in price from one dollar and eighty-five cents to three
I
| dollars and seventy-five cents. Steaks are sold for prices
18^
from two dollars and seventy-five cents to four dollars and
twenty-five cents.
Liouor. — As well as being profitable on its own,
; the liquor service has stimulated the food business. The
food business still remains the more profitable of the two.
Food Procurement
Since the local market does not carry Eastern fish
and because of its high perishability, it must be flown in
daily from the East. To date, an adequate supply of Eastern
l
fish has always been available. All other buying is done
through local jobbers.
Costs
It was first estimated that food costs would be about
|
| forty percent. In February 1951 they were thirty-eight per
cent. Labor costs for the same period were about twenty-
five percent.
Labor
The staff— type of background required. — There are
twenty employees in the restaurant and four in the bar.
Only experienced people are hired, mainly because operations
I
i
jdo not warrant a training program. Cooks require more
training because sea food is more difficult to prepare than
most foods.
185
Pilferage. — There is less pilferage in a sea food
house than a regular restaurant. Unlike beef, employees get
all the fish they want while on duty.
i
iEfficiency
I
In the use of food, waste. — Some waste must be ex
pected because the food used is highly perishable. A long
menu with its slow moying items increases waste. The cook
ing of all meals to order is a food saving factor.
In the use of equipment. — The cost of kitchen
equipment is less in a sea food house than in a regular res
taurant, according to Mr. Tohl.
Advertising
A minimum of advertising is done, just enough to keep
!the good will of the advertising people.
Atmosphere
The atmosphere is modern, simple, and pleasant. The
absence of boats, nets, and the other items used for decora
tions at the Fish Shanty is certainly apparent. The popu
larity of the restaurant would indicate that these items are
not essentials. |
i
j
The Long Run Questions of Importance
Profit prospects. — Since there is less waste in a
: W 6
specialty house and sinee the type of food featured can be
given special attention, there can be a greater margin of
profit. Mr. Tohl did not apply this statement to the
»
j Captain’s Table.
(
Business fluctuations. — Business fluctuations
effect all restaurants about equally. People will not nec
essarily eat in a certain type of restaurant if they just
i
have a little money to spend. Mr. Tohl, therefore, believes
that the Captain’s Table would not be better off relatively
during a period of declining business.
187
APPENDIX H
SMITH BROTHERS FISH SHANTY
Smith Brothers Fish Shanty is located on La Cienega
Boulevard in Los Angeles. The information herein presented
was provided by Miss Evelyn Smith, a sister of Captain Ol
iver Smith, the president of Smith Brothers, and by Mr. Wil
liam Kaiser, the manager of the La Cienega restaurant.
Background
1
History. — For over 100 years the Smith family has
been in the fish business. It is only recently, however,
that they entered the restaurant business. In 1932 they
Opened a fish sandwich shop. Sandwiches only were sold.
I
I
Business grew rapidly and within a short time lemon pie and
chowder were also being featured. The small shop grew into
a large fish house which draws from Milwaukee and the other
cities around Port Washington, Wisconsin, where it is locat
ed. In 19L t - 7 a second fish shanty was opened. This one is
at Walteria, three miles from Redondo Beach in Los Angeles
!County. The La Cienega restaurant was opened in December of
1950. Since it is but a few months old at present, many of
| i
jthe answers to the questions put to Miss Smith will be based
»
I
on her experience at Port Washington and Walteria.
Size of business. — From 150 to 200 can be seated in
the dining room. Banquet rooms can also be opened which
seat from 250 to 300 additional guests. The business has
I not grown to the point where turnover can be estimated.
Other operations. — The Smith family owns a fishing
fleet which operates in the Great Lakes out of Port Washing
ton, Wisconsin. These fishing operations and the sale of
the fish are the principal activities of the organization.
The organization supplies the California restaurants as well
as the Port Washington restaurant with lake fish. Smith
Brothers have been processing caviar from lake fish for
years. This caviar is sold throughout the world. They are
the largest producers of domestic caviar.
i
I
i
[ Location
i
Type of district. -- Location is not an essential,
according to Miss Smith. People want an excuse to travel
anyway. A specialty house can succeed anywhere so long as
there is a sufficient population nearby for it to draw from;
so long as it fits the locality; and so long as good high
ways lead to it.
I
! A ».jinxed” location. — One restaurant failed and
janother saw fit to move from the building that the Shanty
now occupies. In spite of these doubtful records, Miss
t
[Smith believes the location is a good one.
. 189
Accessibility, transportation, parking. — Miss Smith
stated that a specialty house need not, even be on a main
highway. If the price is right and the food is right,
I people will come to it.
Clientele
People catered to. — The Port Washington and the
Walteria Shanties appear to have a family type appeal. On
the unfamily like Mrown it is considered wiser to cater to
the general public, as limited by financial considerations.
Tourists. — The tourist trade is very important.
Many people who come West have heard of the Port Washington
Fish Shanty and the caviar, according to Miss Smith. Sum
mer, the heavy tourist season, has been the busiest season
jat Walteria.
i
Serving: The Hours and the Menu
Hours. — Lunch is served from 11)30 A.M. to 3*00 P.M.
and dinner from 5*00 to 9*30 P.M. The peak hour is from
7*30 to 8:00 P.M.
Food. — Lunch is priced at one dollar and ten cents.
A complete dinner varies from two dollars and twenty-five i
i
cents to three dollars and fifty cents. (
Both fresh water and salt water fish are served. The
fresh water fish is expressed, air freighted, or trucked
_
from Port Washington. The fresh water fish is almost ex
clusively Great Lakes fish. All portions are weighed and
prepared as ordered.
Liquor. — A bar is operated at the La Ciengga Shanty
purely as an accommodation to the guests. Caviar is served
free of charge at the bar.
4 balanced meal. — An attempt has been made to serve
a well balanced meal. Perhaps Miss Smith did this because
in the past she has catered to the family trade. Or perhaps
women naturally are more interested in meal planning from a
dietetic standpoint than men are.
Food Procurement
Except for the local salt water fish served, Great
I
Lakes fish is served almost exclusively. The lake fish is
i
caught, packed, and processed by the Smith Brothers organ
ization. This should assure the Shanties of the best fish
at the lowest cost.
The storage space is adequate to buy futures but it
has been found wisest to keep a constant flow of food. Even
frozen fish can only be kept so long if it is expected to
iretain the characteristics of fresh fish. j
1 l
i
iCosts
j ----
Mr. Kaiser believes that food costs tend to be lower
191
in fish houses than in regular restaurants. He hopes to
stabilize his at thirty-eight percent. He believes that the
payroll will be somewhat higher than average, about thirty-
i four to thirty-five percent. Rent in a large place such as
the La Cienega Shanty will be about ten percent.
Labor
The staff— type of background required. — There are
I twenty-three employees, two cooks, two pantry girls, two
bakers, two dishwashers, ten waitresses, a cashier, a hos-
i
tess, a bartender, and two bus boys. As soon as possible,
group insurance and yearly vacations will be provided for
these employees.
Mr. Kaiser contends that specialty houses have higher
i
!labor costs than the average restaurant in that a larger
percentage of their income goes to labor. To him, this is
preferable to a high labor turnover.
Smith Brothers prefer to train their own employees,
especially the cooks for they have their own methods of pre
paration. It should be easier to train specialty house em
ployees for there, all operations are simplified. A con
stant menu makes the training of waitresses easier.
Turnover. — As in all new restaurants, the labor
!turnover at the Shanty is high. Once the proper people are
i
found for each type job, the turnover should almost vanish,
„ r92
according to Mr. Kaiser,
Tips. — In specialty houses the tips average close
to fifteen percent. This is higher than the average. Wait-'
Iresses at the Shanty keep all their own tips except for ten
percent that goes to the bus boys.
Advertising
Word of mouth advertising is considered by far the
most important. Miss Smith and Mr. Kaiser recognize that
the fishing operations and the distribution of caviar are
important advertising factors. Picture postcards are left
*
on the tables.
Atmosphere
The La Cienega Fish Shanty, both inside and out, is
!decorated as it might be if it were located on San Fran
cisco’s Fisherman’s Wharf. There are nets, life preservers,
lanterns, and many other of the typical items.
The Long Run Questions of Importance
Mistakes in restaurant planning. — Undercapitaliza
tion is the most important cause of restaurant failures.
All new restaurants lose for a certain period. The La Cien-
ega Fish Shanty is going through that period at present. i
Temporary fashion. — People have the idea that a
ifish house has the best fish, according to Mr. Kaiser. This
193
gives them a real reason to go there. Specialization and
the realization that the specialty house serves the best
meals is opening a whole new field in restaurant operation.
I
I This is not fashion.
! Business fluctuations. — The business at Port Wash
ington was built during a depression. This would indicate
that the business could weather another depression.
The effects of war. — War should hot have too much
effect. At Port Washington there probably would be plenty
of fish and if it could not be shipped out here, salt water
fish could be purchased.
!
I
i9V
APPENDIX I
BIT OF SWEDEN
j
1 Bit of Sweden is a Scandinavian type restaurant which
features smorgasbord. It is located at 9051 Sunset Boule
vard in Hollywood. Mr. Fred Glow, the owner, supplied the
information.
Background
History. -- Bit of Sweden was first opened in San
Francisco in the early 1930’s. The Los Angeles restaurant,
built in 1937, is better known nationally than the older one
in San Francisco. The original owner sold the Los Angeles
house to Mr. Hansen, now of Scandia, and to Mr. Glow. Mr.
Hansen sold his interest to Mr. Glow in 19*4-6.
Size of business. — The dining room and the banquet
rooms can accommodate *4-00. There are eighteen stools at the
bar. 600 people will be served on an average day.
Location
j Type of district. — The Sunset ’ ’strip" was booming
when this location was chosen. It has proved itself to be
an excellent dinner location. The absence of nearby shop
ping facilities makes it less desirable as a luncheon loea-
i
i
ition.
195
Location, according to Mr. Glow, is not too impor
tant for a specialty house. People are willing to go out
of their way for a special dish prepared in a special way.
A competitive location. — It is an advantage to be
near other restaurants, even other Scandinavian restaurants,
One gets the overflow from another.
Accessibility, transportation, parking. — The tour
ist trade is very important to Bit of Sweden. Most of
these tourists must travel around Los Angeles in taxis. For
that reason, a location closer to the center of the city
would be desirable. The parking lot is a definite asset.
Ability to move. — Mr. Glow believes that the appeal
which makes people go long distances to specialty houses
j
j tends to hold customers when a move must be made. To re
tain the most customers, the move should be made to a com
parable district.
Clientele
People catered to. — A large variety of dishes,
within quite a price range, appeal to most types of people.
Locating the bar in the back of the restaurant and
not emphasizing it has cut down the bar business but it has
i
stimulated the family business.
Tourists. — Because of its national reputation, Bit
I
j of Sweden is extremely busy during the summer and winter,
196
the tourist seasons. Mr. Glow stated that this trade is
essential.
Reservations, turnover. — Reservations are taken
i , r "
I but tables are not held for more than four or five minutes.
People with reservations who come in late are given the
first available table. There are enough of all size tables
so that one of each is almost always becoming available.
This type of reservation system does not materially reduce
turnover.
Serving: The Hours and the Menu
Hours. — Both lunch and dinner are served. The
hours are from 12:00 P.M. to 9:30 P.M. The lunch peak is
about 1:30 and the dinner peak is about 7*00.
Food. — Eighty-two different dishes are served. All
of these dishes are prepared in the Bit of Sweden kitchen.
Dishes which do not move are not prepared a second time.
Lunch prices begin at one dollar and twenty-five cents.
The smorgasbord at lunch is one dollar and sixty-five cents.
Most of the dinners vary in price from one dollar and seven
ty-five cents to two dollars and seventy-five cents.
Sm*drgasbord with the dinner costs an additional dollar.
'Without the dinner, its price is two dollars and twenty-five
j
cents. A separate menu with Scandinavian specialties is
offered.
197
Liquor. — A restaurant’s bar should be located at
the entrance. Family and older groups appreciate the fact
that the Bit of Sweden bar is located behind the dining
!
( room, but with current high costs the profit potential of
f
the bar must not be overlooked.
Food Procurement
Buying in large quantities and watching futures can
mean a great saving for a specialty house. By carrying a
$75,000 inventory, Bit of Sweden can save $10,000 to $15,000
a year above storage costs. By buying 8,000 turkeys at
once, a six months’ supply, ten to twelve cents a pound has
been saved. Mr. Glow maintains that another advantage of
! quantity buying is the assurance of constant quality.
i
j
Costs
Food costs are about forty-two percent. Mr. Glow
does not believe a fine restaurant can have food costs of
less than forty percent.
Labor costs in a specialty house are generally less
than in a regular restaurant. For Bit of Sweden, the per
centage is thirty-nine and one eighth percent, however.
The only alternative to this high labor cost would be a
■great deal of waste, according to Mr. Glow.
198
Labor
The staff— type of background required* — There are
sixty-eight employees. Sixty-six of them are employed in
the dining rooms, pantry, and kitchen. Two are employed in
the bar.
Mr. Glow prefers to train his own help. Very often
waitresses only serve beverages. This simplifies their
training. The variety of dishes served complicates the
training of kitchen help.
Turnover. — There is almost no labor turnover. Many
of the employees have been there since the restaurant opened
in 1937. In addition to the usual benefits, parties are
;given for the help and a special loan fund has been set up
for their financial benefit.
Efficiency
In the use of food, waste. — The chef watches waste
and portions. Each food used is itemized in such a way that
any waste or pilferage shows up immediately. Because of
this and because of knowing how much of a certain dish will
be eaten each day, waste has been cut to a minimum. The
j
patrons are encouraged to take the smorgasbord dishes in a i
certain order. This helps balance their meal and reduces
the waste from uneaten portions.
Serving advantage. — Bit of Sweden does not enjoy
a serving advantage over other specialty houses, but Mr.
Glow believes it does enjoy one over the average restau
rant.
Advertising
It is important for a specialty house to advertise,
for the same people dopnot eat there every day. Mr. Glow
stated that ads in newspapers help. National advertising,
in publications, also helps. Radio ads have been an asset
to Bit of Sweden. According to many advertising people,
television advertising is very effective.
Atmosphere
The atmosphere, both inside and out, would remind
one of a restaurant in Sweden. The large smorgasbord dis
play in the center of the main dining room is the most
impressive touch. ;
i
The Long Run Questions of Importance j
*
Profit prospects. — Profit prospects are better in '
a specialty house than the average restaurant because labor
costs are low and food costs are controlled. This state
ment of Mr. Glow's would not necessarily apply at Bit of
Sweden since high labor costs are the method by which food 1
costs are controlled.
Temporary fashion. — To Mr. Glow, his restaurant is
more of a foreign restaurant than a specialty house. Since
he serves any type dinner a customer might want, his res-
t
taurant will not go out of style.
Business fluctuations. — Forty percent of all Bit
of Sweden business is due to some kind of celebration. The
tourists provide another large percentage.
Even though people prefer eating at specialty houses,
a reduction of business activity, which effected the money
available for traveling and celebrations, would have a ser
ious effect on Bit of Sweden.
There was a decrease of ten percent in business in
19*+9 from the 19^8 high.
The effects of war. — During World War II business
held at a high level. Many scarcities caused the quality
of the dishes served to go down.
APPENDIX J
SCANDIA
Scandia is a Scandinavian type restaurant located at
9131 Sunset Boulevard in Hollywood. The following Informa
tion was provided by its owner, Mr. K. S. Hansen.
Background
History. — Scandia was first opened in 19^6. A
larger bar and a few booths are the only changes which have
been made.
Before opening Scandia, Mr. Hansen was a partner in
and the manager of Bit of Sweden. Perhaps being known at
Bit of Sweden was one reason why Mr. Hansen built Scandia
in the same neighborhood.
1 Size of business. — Ninety people can be aceommodat-'
ed in the dining room. There are fourteen stools at the
I ;
bar. '
The restaurant is so small, as far as the demand is
(concerned, that it operates at capacity every evening. Mr.
Hansen does not intend to expand. The ideal restaurant,
I
from the standpoint of control and excellent service, he be
lieves to be about this size. A small banquet room would be
the only possible addition.
[
I Name. — While managing Bit of Sweden several years
ago, Mr. Hansen found that many Swedes resented the fact
that he, a Dane, was managing a Swedish restaurant. Many
other Scandinavians wanted a restaurant which would serve
the dishes of their countries. Scandia was named and es
tablished with the object of coming as close to pleasing
all the Scandinavian people as possible.
Location
Type of district. — Scandia is located within a
block or two of the Cock'n Bull and Bit of Sweden. The
location advantages applicable to one are applicable to
all.
The type of district is of less importance to a
specialty house than a regular restaurant. However, it
should be a district in which the patrons are acquainted
and at ease. Mr. Hansen caters to a better class trade in ,
a better class neighborhood.
A competitive location. — The Los Angeles restau- s
' ' — i
rants, until recent years, did not locate near other res
taurants. La Cienega Boulevard has proved that it would .
have been wiser to build closer together. In 1937 when Bit
of Sweden was built, restaurants were locating far apart.
By 19^6, when Scandia was built, the new places were locat-,
ing in restaurant neighborhoods.
Accessibility, transportation, parking. — A restau
rant should be easily accessible. It should be located on
a main street, as Scandia is, or at least on a side street
intersecting a main thoroughfare. The Coek'n Bull has prov
ed that parking is not essential. It is not advisable to
open a restaurant in Los Angeles without it, however.
Scandia has a large parking lot.
Ability to move. — Up to three years are required
to establish a restaurant. Once established, moving becomes
less risky. Specialty houses are in the best position to
retain customers after moving.
Clientele
People catered to. — The Scandinavians, the second
generation Scandinavians, and the Americans who have travel
ed are catered to. Dishes of each of the Scandinavian coun
tries are featured as are some Continental dishes.
Reservations, turnover. — Reservations are accepted.
With Scandia’s type of clientele, reservations are impor
tant. It is often necessary to make reservations a day or
i _ :
:two in advance for a table during the early evening. Mr.
Hansen stated that capacity business is normal. This makes j
lit difficult to estimate the influence of tourists and the
ieffects of the seasons.
iServing: The Hours and the Menu j
1 I
Hours. — The restaurant is generally open from
20*f
twelve noon to 1:00 A.M. The peak business hours are from
7:00 to 8:30.
Food. — Smorgasbord is served at each table instead
I of from one large table as in the Bit of Sweden. Dishes of
each of the Scandinavian countries are featured. Continen
tal dishes and steaks are also served. All dishes are a la
carte. The average dinner check is three dollars and sixty-
five cents.
i
I
Liquor. — Liquor is served. Scandia’s first bar
was located at the rear of the dining room. This has been
i ,
replaced by a larger bar which can be entered without going
through the dining room. This has stimulated bar business.
A balanced meal. — Since Scandinavian food is very
I heavy, the waiters are instructed to suggest combinations
i
(which will result in balanced meals.
Food Procurement
Buying, in general, does not vary much from that of
the regular restaurant. As many Scandinavian products as
possible are bought. During World War II the Americans so
satisfactorily eopied many of these products, cheeses es
pecially, that most of the restaurant's needs can be met
i
domestically. (
.. I
j Costs
| _______ Food costs vary between forty-seven and forty-eight 1
percent of the dining room income. Labor costs are approx
imately twenty-seven percent.
Labor
The staff— type of background required. — There are
thirty employees. There are ten waiters, two bus boys,
three bartenders, one chef, four cooks, and ten other em
ployees in the kitchen.
Only trained people are hired. A trained waiter can
learn Scandia’s system of waiting tables fastest. The cook
ing requires experienced cooks.
Tips. — According to Mr. Hansen, the tips are higher
in specialty houses, Scandia of course included, than regu
lar restaurants because these are popular places at which
to entertain guests. When entertaining friends, people tend
to be generous.
Efficiency
In the use of food, waste. — By serving lunch, waste
is restricted to a nominal amount. With such a large menu,
waste would be rather high if it were not possible to sell
left overs at lunch. •
I
In the use of equipment. — Mr. Hansen believes that;
with labor costs constantly increasing, all restaurants !
i
!
should be able to profit from the use of labor saving equip-*
ment. The amount of such equipment and its cost has very
little to do with the type of food served.
Advertising
The only advertising is that done at the request of
some group whose good will is worth keeping.
Atmosphere
The atmosphere in Scandia is typical of small Scan
dinavian restaurants. Scandia could easily fit into a
Copenhagen or Oslo setting. The atmosphere is not the
most elaborate of the houses surveyed but it is certainly
one of the most appropriate. For that reason its atmos
phere is considered to be outstanding.
The Long Run Questions of Importance
Temporary fashion. — Now that people are traveling
to Europe again they are coming in contact with Continental
cooking. These people will influence others and in time
the Continental type restaurant, with its complete menu,
will come into its own again. The limited menu specialty
houses will still prosper but people will realize that
there are other foods than steak and fried potatoes.
Business fluctuations. — As has been said, many
people use specialty houses as places to entertain. Spe
cialty houses are hard hit during depressions because they
r ' ' " "" " 207"
i
lose this trade.
So far, business has increased at Scandia every
month.
The effects of war. — Mr. Hansen contends that dur-
,ing World War II the people had a great deal of money and
little to spend it on. The restaurants certainly got their
share of it. The expensive restaurants probably fared the
best for many laborers had more money than they needed and
were willing to spend it in ways which normally would have
been considered foolhardy.
i
APPENDIX K
EL CHOLO
El Cholo, a Mexican restaurant, is located at 1121
South Western Avenue in Los Angeles. The following infor
mation was provided by the manager who does not want his
name used.
Background
History. — This restaurant was first opened in 1927
by the present owner in a building across the street from
the present location. At one time a second Mexican restau
rant was operated. This was later sold.
Size of business. — The restaurant seats from sev
enty-five to eighty-five. On an average day between *+00
and 500 are served.
Location
Type of district. — Western Avenue, at the point
; r
where this restaurant is located, is one of Los Angeles's
. busiest thoroughfares. Small businesses and apartment
houses make up the immediate neighborhood.
This is a good but not an especially high contractu
al rent district, a point of the utmost importance to the
i
i manager of El Cholo. With something to offer, poor restau-
rant location problems have been overcome, but too high
contractual rent has seldom been overcome.
A specialty house can succeed in almost any good res
taurant location. Success would come easier for a foreign
type house in a locality where there is a large population
from the country whose dishes are featured. This does not
imply that the house would depend on these people for pa
tronage. Where there is a large foreign population (Ameri
can citizens often included) such as the Mexican population
in Los Angeles, the other people cannot help but hear of
Mexican customs and foods. The absence of a Mexican popula
tion in many United States cities accounts for the lack of
Mexican restaurants.
A competitive location. — The representative of El
Cholo believes that it is an advantage to be located near
f
other well managed restaurants of any type, so long as they
■do not specialize in exactly the same thing you do. There ;
, i
are several restaurants located near El Cholo, but no other
I
Mexican restaurants. I
The presence in Los Angeles of other Mexican restau- 1
rants does not effect El Cholo. There is enough business '
: for all, even though most of them cater to the general pub- 1
i
lie. Also, the other Mexican restaurants have different
styles of preparation of food.
Good specialty house cities. — For specialty houses
i as a group, Los Angeles is no better a location than any
other metropolitan area. This operator added that special
ty houses need a large population. Any metropolitan area
can supply that.
Clientele
People catered to. — Prices were first set up and
then it was determined what could be served for these
prices. Since dinners are priced at one dollar, the prices
are within the reach of the general public.
A very small percentage of the patrons are Mexicans.
One of the main reasons for this is El Cholo’s attempt to
satisfy American tastes. In doing this they have produced
something comparable to the Hindu dishes of India and have
i
| thereby gained probably as much Hindu trade as they have
Mexican trade.
Steady customers. — There are many regular custom- i
\ '
;ers. These customers do not return as often as those of <
:regular restaurants and American dish specialty houses. If
l
a person comes in once a month, the manager of El Cholo ;
i
considers him a good customer.
!
I Reservations, turnover. — Reservations are not taken
for two reasons. One is that some people, who have been ;
waiting, resent having others seated first even though they
realize the other people have reservations. The other is
the reduction of turnover that holding tables causes.
' Serving: The Hours and the Menu
Hours. — Both lunch and dinner are served. The
, restaurant is open from 11:00 A.M. to 10:00 P.M. The peak ;
hours are from 6:00 to 8:00.
Food. — El Cholo has one menu for both lunch and
dinner. A complete meal, except for dessert, costs one
dollar. Many a la carte items are also offered. Dessert
does not come with the meal, and in fact is not even sold
because of the absence of demand for it, and because it
would mean additional serving problems and it would reduce
turnover.
J Liquor. — Both beer and wine are served. People
| have come to associate beer with Mexican food and its ser-
I vice is almost an essential. The management has considered
putting in a cocktail bar but because of a shortage of
space and many problems which a bar presents, it has not
' I
1 done so. I
■ i
i i
: Food Procurement '
i
For the most part, El Cholo buys like the average
restaurant. A few items, such as corn husks for tamales
i j
| and dry chili pods, are bought a year in advance. Accord- ;
ing to the representative, this is more to guarantee a
supply than to take advantage of fluctuating market prices.
Cheese is their largest item. Because it requires proper
aging, it must be bought in large quantities.
Costs
A breakdown of costs was not available, however it
was stated that costs are in line with those of the average
restaurant.
Price Rigidity
People associate low prices with Mexican and Chinese
food. For that reason, it is more difficult for these,
than other specialty houses, to raise their prices. The
management believes El Cholo’s prices are enough below the
average so that an increase could be made without a loss of
business.
Labor :
The staff— type of background required. — Seven-
_ _ _ _ _ _ ,
teen people, all Mexicans, are employed. El Cholo trains
its own help. This operator believes that most specialty
houses prefer to do this because their methods of prepara
tion and service are unique. The limited menu implications
and a required high turnover are additional reasons for
training one's own help.
■ There are a multitude of ways of preparing Mexican
: food. For this reason, if for no other, Mexican restau-
i rants would rather train their own cooks. As new cooks are
needed, assistant cooks are promoted.
Turnover. — The labor turnover is very low. Better
than average tips, a progressive labor policy, and the de
sire of members of a racial group to work together are the
important reasons for this. Five or six of the employees
speak very little English. Even in a city such as Los
Angeles with a large Mexican population, these people would
have difficulty finding other type jobs.
Pilferage. — Probably the low cost of most of the
foods used helps to keep pilfering from becoming too attrac-
: tive.
Efficiency
The cost of kitchen equipment in a Mexican restau
rant is believed to be about the same as for a comparable
restaurant. For each piece of equipment which can be done -
; without, there is another which must be bought. :
i
Advertising
According to this operator, good food at a good
1 price is the best ad. This will bring in and hold business^
Very little paid advertising is done.
The presence of a large Mexican population in Los
Angeles has advertising value.
Atmosphere
The restaurant is housed in a converted house. The
decorations are attractive and simple, and yet they create
a Mexican-type atmosphere.
The Long Run Questions of Importance
Profit prospects. — El Cholo has been making a pro
fit for twenty-four years. If the desire by the Americans
for Mexican food were only a fad, the manager contends they
would have found that out by this time.
Business fluctuations. — Specialty houses are in
the best position to withstand business fluctuations.
Since El Cholo opened in 1927 there has been no year in
which business was not as good or better than it was the
year before.
<
The effects of war. — All restaurants are effected ■
about equally by war. Mexican restaurants gain since they I
use very little meat, but the inability to get enough of ;
the proper cheese nullifies this gain.
El Cholo was unable to get the quality and quantity
of food its customers expected and rather than take advan- ,
tage of its patrons, it closed for two years during World !
APPENDIX L
GRANDVIEW GARDENS
Grandview Gardens, a Chinese restaurant, is located
in Los Angeles’s New China Town at 951 Mei Ling Way. The
information on Grandview Gardens was furnished by Mr. Doc
Wong, one of the two owners.
Background
History. — This restaurant was first opened in 1925
in what has become known as old China Town. The space re
quired for the Union Station (railroad) necessitated a move
for this and many other Chinese businesses. So, in 19^0
the section which has become known as New China Town, was
established. Both settlements are within the same dis
trict.
Size of business. — The restaurant can accommodate ,
265. Thirty can be seated at the bar and fifty in the •
lounge. Weekday business will vary from 200 to *f00 meals. !
Over the weekend, approximately 800 meals will be served
each day. The average guest stays forty-five minutes.
Other operations. — Four Chinese dishes are sold
!
frozen in Southern California grocery stores. The four
dishes, together, comprise a balanced Chinese meal.
Entertainment, — A four piece dance band is em
ployed from 9*00 P.M. to 12:00 P.M. This is the only house
surveyed which provides entertainment, recorded music ex
cluded.
Name. — Grandview is the English translation of a
Chinese word which refers to a type of garden. Why the
original Chinese word was not used was not explained.
Location
Type of district. — New China Town, although locat
ed in an older section of Los Angeles, does not suffer from
want of business. Tourists are eager to go to foreign set
tlements. Being located near downtown Los Angeles is an
advantage.
In choosing a location, Mr. Wong stated that one
should consider the uniqueness of his type of operation and
try to locate where he would be at an advantage. A Chinese
restaurant would, therefore, decide on a location in China
Town. A restaurant disregarding this can be successful
but building a following will take longer.
Ability to move. — In moving, a restaurant will
often gain one type of customer while losing another. If
this is desirable, it should move. Grandview Gardens did
not leave its original neighborhood when it moved in 19l +0.
Therefore, the change of customers was not great.
Clientele
People catered to. — This restaurant was not de
signed to cater to any particular group. Tourist trade is
important. Dinner prices range between eighty-five cents
and two dollars and fifty cents. People within many income
groups are able to find a meal which suits their budget.
Psychological advantages. — Since people attract
people, it is an advantage to have a full house, but the
Grandview Gardens management does not like to have to keep
people waiting for tables.
Serving s The Hours and the Menu
Hours. — The restaurant is open from 12 iOO P.M. to
12:00 A.M. The peak hours are between 6:00 and 8:30.
Food. — Complete meals are served from twelve noon
to twelve midnight. They vary in price from eighty-five
cents to two dollars and fifty cents. The dishes served
I
are typical of those served in Chinese restaurants. The 1
more expensive the dinner and the larger the party, the
more dishes there are served. These dishes have been pop
ularized in the United States but many of them are not
eaten in China. ;
Liauor. — Liquor is also served. Mr. Wong believes
that for the most profitable operation, the bar should be
located near the entrance. The bar is so located at Grand
view Gardens.
A balanced meal. — Chinese meals, by their nature,
are well balanced. The foods are not heavy and a great
variety of dishes comprise a meal.
Food Procurement
Buying is done through Chinese wholesale houses in
much the same way as other Chinese restaurants buy. No
particular buying or storage advantage exists.
Costs
Breakdown of costs. — The percentages going to food
and labor are about the same as in the average restaurant.
Ifi dollars, these costs are lower in Chinese restaurants
but the low meal prices bring the percentages right into
line.
i
Price Rigidity \
I
■Mr I Wong stated that there is a general belief that
Chinese foods are inexpensive and therefore that Chinese
dinners should be inexpensive. People realize what steak
costs because they see it daily in the butcher shops. They
seldom have an occasion to price Chinese foods.
Labor
The staff— type of background required. — There are
thirty-seven employees in the food department and three who
work at the bar.
Only people with some previous restaurant experience
are hired. It is difficult to say whether kitchen help
needs more or less training than that in the average restaur-
rant. However, all big restaurants have an advantage in
that they can have each kitchen employee specialize in a
given task.
Turnover. — Labor turnover is very low. The rea
sons for this are a sound labor policy and the desire of
Chinese to work together.
Tins. — Tips are based on the cost of a dinner and
where the prices are low, as in Chinese restaurants, the
tips are low. Waiters keep their own tips.
Efficiency
In the use of food, waste. — There is a tendency to
waste because of the serving methods employed in Chinese
i
restaurants. Mr. Wong stated that some slow moving items
are carried. '
i
In the use of equipment. — Mr. Wong believes that
kitchen equipment is more expensive in Chinese restaurants
and many other specialty houses because of the specialized |
nature of the dishes served. 1
220
Advertising
Very little paid advertising is done. Occasionally,
a small ad will be placed in a local publication.
Atmosphere
A restaurant becomes part of its location and if it
moves, it loses much of its atmosphere. The Chinese popu
lation in this section of Los Angeles adds to the atmos
phere. A modern Oriental theme is carried out.
The Long Run Questions of Importance
Business fluctuations. — The effects of business
fluctuations is about the same on all restaurants, aceord-
: ing to Mr. Wong. Chinese restaurants would continue to
get their share of the trade because Chinese food is on
; everyone’s must list for once in a while.
i
In 19*+8 Grandview Gardens suffered a loss in bus
iness comparable to that of the average restaurant.
The effects of war. — Wars effect all restaurants
1 about the same. A Chinese restaurant is at an advantage ;
i
; since it does not use much meat, but it is at a disadvan-
; tage in that it serves many imported foods.
I
221
APPENDIX M
DON THE BEACHCOMBER
Don the Beachcomber is a Cantonese restaurant locat
ed at 1727 North McCadden Place in Hollywood. Mr. E. T.
Baehtold, the Vice President and Manager, provided the fol
lowing information.
Background
History. — In 1933 Don E. R. Beachcomber opened the
first Beachcomber restaurant across the street from its
present location. The Beachcomber now occupies its own
building.
Size of business. — The present owner has opened a
similar restaurant in Chicago and plans to open a third in
New York City. Don E. R. Beachcomber, the original owner, ,
has opened one in Honolulu. I
The dining room seats 270, and twenty-five can be
seated at the bar. During an average evening 500 to 600
are served. Although there is no entertainment, background
music excepted, the average guest stays two hours. !
»
1
Name. — The original owner built the business
around a character he created. The association became so
close that he had his name changed to Don E.R. Beachcomber.
Other operations. — A small gift shop is located in
the Hollywood restaurant. Even though its hours are limit
ed to those of the restaurant, it is believed to gross
$25,000 a year.^
Location
Type of district. — It would seem that Don chose a
rather poor location for North M'cCadden Place is a side
street which happens to be difficult to find. Mr. Baehtold
stated that the new owner built on the same street because
the Beachcomber had already become a part of its neighbor
hood.
The location has advantages, however, for it is in
the heart of Hollywood and yet not on a main thoroughfare
where rents are the highest.
Mr. Baehtold contends that location is not as impor-
i tant for a specialty house as for a regular restaurant be-
, cause people will go out of their way to get to it. People
i
I eat to live and eat for pleasure. The pleasure motive will
* take them to the specialty house.
A competitive location. — If a restaurant can com
pete, it is better off near other restaurants. The Beach
comber management chose the present location because the
^Pete Martin, "Pago Pago in Hollywood," The Saturday
Evening Post, (May 1, 19*+8), 32.
original location was on the same street.
Ability to move. — A specialty house experiences
less difficulty in moving than the average restaurant. Be
ing nationally known, the Beachcomber could take most of
its trade with it.
Well established restaurants are better able to
withstand a move than the newer ones. Those with a better
class clientele find moving simplified, according to Mr.
Bachtold.
Good specialty house cities. — Mr. Baehtold main
tains that a specialty house needs a large population. Los
Angeles is as good as most cities for specialty houses.
New York City should be a better location since there are
more people there and more apartment dwellers who find it
convenient to eat out.
Clientele
People catered to. — The high prices at the Beach
comber naturally limit the clientele. These and the quiet
ness of the restaurant tend to discourage the younger
groups. Steady customers account for most of the trade. A
rough breakdown would be eighty percent steadies and twenty
percent tourists. Many of the regular customers consider
the Beachcomber to be something like a club. This can be
shown by the fact that there are over 2,000 charge accounts.
Tourists. -- Summer is the top season for the Beach
comber. This is due to the large tourist trade at that
time and the fact that Cantonese food and rum drinks are
1 excellent hot weather fare.
! Reservations, turnover.— The business is run on a
reservation basis. The Beachcomber encourages its patrons
to make an affair of dining. The fact that the average
guest stays for two hours would indicate this.
i
J Serving • . The Hours and the Menu
Hours. — The hours are from ^frOO to 12:00 P.M. for
j the bar, the dining room, and the gift shop. The peak hour
for the dining room is at 7:30.
Food. — All food is a la carte. The price of a
meal averages more than four dollars, however, a meal can
be bought for approximately three dollars. This is sub
stantially more than the eighty-five cents for which a
Chinese meal can be purchased at Grandview Gardens. Only
Cantonese dishes are served. Each of these is cooked to
order.
Liquor. — The Beachcomber will serve any kind of
drink ordered but rum drinks are featured. Sixty rum
drinks are listed on the menu. All of these were origi
nated by the Beachcomber. The best known is the Zombie.
Eighty-five percent of all drinks served are rum
I ~ - "" 225’
specialties. The Hollywood and Chicago houses together are
the largest user of rum in the United States. In both the
drinks and the food, eye appeal is stressed. There are bar
tenders who do nothing but prepare these special drinks.
4 balanced meal. — Chinese food, by its nature, is
healthful and easy to digest. Mr. Baehtold said this par
tially explains why there are very few fat Chinese people.
No special attempt is made at the Beachcomber to serve a
balanced meal.
Food Procurement
The need for but a limited number of items permits
, profitable buying for future delivery. The Beachcomber uses
' public storage facilities as well as its own. Because of
the effect that the world situation might have on the pro-
. curement of Oriental goods, it is necessary to do this.
The Beachcomber buys from the Orient through a broker.
Costs
•." " " " i k
I
0 Costs are about the same as for most restaurants.
Food costs vary around forty-five percent, a little higher
than average, and labor costs are about thirty percent, a
little lower than average. Other costs follnw the general
pattern quite well. The purchasing of many imported foods
and the best domestic foods available explain why food
; " ~ ' ' 226!
i
costs are higher than those of the average Chinese restau
rant.
Price Rigidity
There does not seem to he the price resistance which
normally confronts Chinese-type restaurants. The type of
clientele catered to does not appear to be too concerned
with prices.
Labor
The staff— type of background required. — Eighty
people are employed. There are forty in the dining room,
nine at the service bar, twenty-two in the kitchen, three
in the office, and six in the warehouse. Normally two or
three bartenders are sufficient, but the Beachcomber drinks
are so complicated that a large bar staff is required for
their preparation. All drinks are prepared in the service
bar. Only orders for drinks are taken at the front bar
itself.
The people who prepare the drinks are hired untrain
ed. All waiters are recruited from the staff of bus boys.
The unique method of service makes this the only practical
■ plan. Any good Chinese cook could do well in the kitchen.
The similarity between the dishes served simplifies the
1 training of cooks. All the waiters are Filipinos. This is
because they are small, agile, and blend in well with the
background.
Tips* — Since the average diner pays a percentage
of his cheek as a tip, the tips are very good.
Efficiency
In the use of food, waste. — Mr. Baehtold believes
waste and portion controls are not as important in a high
class place as in the average restaurant. The good cook at
home and in the expensive restaurant tends to be a little
reckless with ingredients. For a Chinese type restaurant,
however, the Beachcomber has reduced waste to a minimum.
This has been done by avoiding slow moving items, preparing
each dish to order, and selecting dishes which require many
of the same ingredients. A very close liquor inventory is
kept.
In the use of equipment. — It is generally less
expensive to set up a specialty house kitchen. The Beach- :
comber needs no steam tables, for each dish is cooked to
order. Since no pastries are served, a bake shop is not
required. Special Cantonese ranges have been built to '
order for the Beachcomber.
Advertising
The best possible ad, to Mr. Baehtold, is a line of '
people waiting. _When_the business was_.being, built, prom-
. _ 228"'
inent people were turned away although tables were avail- ■
able. If something appears hard to get, people want it
more than ever.
The satisfied customer is a wonderful ad. Mr. Bach-
told maintains that people discuss the restaurant business,
from the consumer standpoint, more than any other business.
Usually it is easier for them to remember specialty houses,
so those are the ones which are talked about the most.
Very little advertising is done. Ads are used only
to keep their name in front of the public. These ads
neither include price nor location. The restaurant is mark
ed by an inconspicuous sign. This type of advertising pol
icy encourages people to consider the Beachcomber a person
al discovery.
Atmosphere
The Beachcomber management believes that for their
type of operation it is an advantage to be in a quiet loca
tion and that such a location gives the customer the feel
ing that he has made a discovery.
Atmosphere might even be given more attention here
than at the Cock’n Bull. This was the first bamboo restau
rant in the United States.
The lighting is very soft and flattering to the
ladies. The management has concluded that the ladies de
cide which eating place will be patronized. If they look
attractive in a restaurant, that is the one to which they
will return.
The dining room is divided into many small rooms at
different levels. This was done because it has been found
that people do not enjoy eating in large rooms, especially
if the rooms are empty. It has also been found that people
prefer side tables.
The small gift shop, which carries out the general
theme of the restaurant, adds to the impression that one is
in an "island world."
The Long Run Questions of Importance
Restaurant planning. — Specialty houses are opened
because that type of operation reduces waste, assures a
better item, and thereby gives people a good reason for
eating there. So stated Mr. Baehtold.
Temporary fashion. — Specialization, according to
the manager of the Beachcomber, is the coming thing and is
not a fad. Restaurant profits were from eight to eleven
percent lower in 19^9 than in 19*+8. Those of the Beach
comber were only four percent less.
The effects of war. — The Beachcomber was almost
, unable to obtain foreign products during World War II.
They were better off than the average restaurant, however,
230
in that they did not serve much meat. They eliminated the'
dishes that could not properly be prepared. People seemed
to appreciate this.
Effects of being copied. — Mr. E. T. Baehtold es
timated that the Beachcomber has been imitated at least 150
times. These imitations do very little harm and often are
beneficial in that they unwittingly impress uponopeople the
high quality of the real Beachcomber.
231
APPENDIX N
TAIX
Talx French Restaurant is located at 321 East Com
mercial Street in Los Angeles. The following information
was provided by Mr. Larquier, the manager and one of the
owners.
Background
History. — In 1921 the Taix family decided to open
a French restaurant in a building they owned, partially be
cause it was not a good location for stores. It was not a
good location for restaurants either, being in an older and
poor section of the city. The restaurant grew, however,
and by 1927 enlargement was required.
Size of business. — The restaurant can comfortably
seat 350. In an average day between 600 and 700 meals will
;be served.
Location
Type of district. — The 300 block of East Commercial
Street is located in one of the oldest and poorest sections
of Los Angeles. As the street name indicates, it is a com
mercial district. Taix does enjoy the advantage of being i
near downtown Los Angeles. A new freeway, now under con-
struction, will improve the location, but by thetime it
does, the expanding Los Angeles Civic Center will have
forced Taix to move.
Mr. Larquier stated that location is not too impor
tant for a specialty house. People are willing to go out
of their way for a specialty they like.
Accessibility, transportation, parking. — Public
transportation is an important consideration for a restau
rant which features low prices. Parking is almost a "must."
Mr. Larquier estimated that Taix's lunch business would be
fifty percent better if more parking space were available.
Ability to move. — If Taix were to move, most of
the dinner trade would follow the restaurant. Most of the
lunch trade would not.
Good specialty house cities. — So long as it has a
large population to draw from, Mr. Larquier believes, a
specialty house can succeed. People tire of certain dishes
but everyone in Los Angeles will not tire of the same dish
on the same day. »
New Orleans is probably the best city in the United |
States for French restaurants. San Francisco is a good one'
for specialty houses but Los Angeles has caught up with it.1
The new people here, people who have traveled, are respon
sible for this. It is now easier to put over a foreign
restaurant in Los Angeles than it ever was. World War II
made .it so. The veterans are acquainted with other peoples
and their foods. They, in turn, are acquainting their fam
ilies and friends with those foods.
Clientele
People catered to. — There are not enough French
people in the area to support a French restaurant. For
that reason, if for no other, Taix has to cater to the gen
eral public.
What was to be served was first determined and then
the price at which this could be sold was determined. The
prices are reasonable enough to catch most income groups.
Steady customers. — Mr. Larquier stated that Taix
can draw customers as often as regular restaurants because
there is a different lunch menu used for each day of the
week, and because the dinner menu is varied several times
a week. j
Reservations, turnover. — Reservations are taken !
for banquets. Reservations are taken for booth service, |
but not for family style service, on weekdays. Reserva
tions are not accepted on Sundays.
Serving: The Hours and the Menu
i
Hours. — Bunch is served from 11:00 A.M. to 2s00
P.M. Dinner is served from 5«Q0 to 8:30, P.M. The peak
hours are from 11:30 to 1:15 and from 6:00 to 7:30.
Food. — Meals are served family style (several
parties at each large table), and in private booths. The
family style lunch is seventy-five cents. Booth service
costs one dollar. The family style dinner is one dollar
and twenty cents. Booth service in the evening costs one
dollar and seventy cents. These prices include a complete
meal.
Three nights a week chicken dinners are served.
Steak dinners are served twice a week. Fish is served each
Friday. One night each week, chicken, prepared in a diff
erent way, and meat are both featured. Fresh fruit is the
only dessert served.
Liquor. — Wine has come to be associated with
French food. It is, therefore, quite important for French
restaurants to carry it. There is no bar at Taix but all
types of drinks are served.
A balanced meal* — A balanced meal was intention
ally set up. To insure this balance, many fresh vegetables
and fresh fruits are served.
Food Procurement
Buying varies from that of the regular restaurant
in that many fresh vegetables are served. Two men do noth
ing but prepare the vegetables. Vegetables are bought in
large amounts. The monthly fresh vegetable bill will vary
between $1,200 and $1,500. Buying during the canning sea
son makes it possible to obtain savings on canned goods.
There is no advantage gained on the purchase of meat. The
prices charged do not permit the buying of imported foods.
Costs
The Taix management attempts to keep food costs at
forty percent and labor costs at thirty percent.
Price Rigidity •
Mr. Larquier contends that an a la carte house, when
the cost of a dish goes up, can either discontinue serving
that dish or can raise its price without changing the
prices of the other dishes served. A complete meal, or
table d'hote house, must raise the price of the entire meal
when the cost of one dish goes up. This change is quickly
noticed by the patrons. Most specialty houses, Taix in
cluded, have a table d'hote type of service.
Labor
The staff— type of background required. — The num
ber of employees varies from thirty-five to forty, depend
ing on how busy the day is expected to be. Mr. Larquier
prefers to train his own waitresses because the Taix ser
vice procedure differs from the average. Cooks are hired
already trained when they are needed. Two of the cooks
have been there since 1930.
Tips. — Tips depend on the price of the meal, ac
cording to Mr. Larquier. Where liquor is served, tips are
usually best. This is because liquor puts people in a good
mood.
Efficiency
In the use of food, waste. — No slow moving items
are carried. By carrying a limited number of dishes, food
control is simplified.
In the use of equipment. — Mr. Larquier has found
that there is no saving on kitchen equipment in a French
restaurant.
Advertising
One to one and one half percent of the gross income
of the restaurant generally goes to advertising. Only news
paper ads are used here. The satisfied customer, of course,
remains the best ad.
Atmosphere
Atmosphere abounds. It surrounds Taix. A neigh
borhood in which a restaurant is out of place, provides a
great deal of atmosphere. As for the restaurant itself,
all of the fixtures, the tables and chairs, and the china
are all rather old and very plain. Mr. Larquier said this
equipment would not be worth moving to another location.
Where it is, it is part of the atmosphere.
The Long Run Questions of Importance
Restaurant planning. — Mr. Larquier believes it is
best to start out in the restaurant business in as big and
as nicely decorated place as possible. The operator must
have enough money to keep his place going for many months.
Profit prospects. — The profit prospects are not
the best in specialty houses. In fact, they might not be
as good as they are in regular restaurants which can sell
many high profit items. This is the opinion of Mr. Lar
quier, People open specialty houses because they are fam
iliar with the dishes they are going to feature.
Business fluctuations. — Restaurants within the
popular price range are in the best position when a de
pression hits. Mr. Larquier stated that some of their
patrons will no longer be able to afford their prices, but
those people will be replaced by others who had been in
higher income brackets.
Business was down ten percent for Taix in 19*+9 from
the 19*+8 high.
The effects of war. — Specialty houses are at a
disadvantage in war time in that they are unable to con-
tinue with the specialties that they have publicized.
Since Taix serves many vegetables which can still be ob
tained in war time, it enjoys a better position than the
average specialty house.
APPENDIX D
239
THE FARMER'S MARKET
The Farmer's Market is located at Third Street and
Fairfax Avenue in Los Angeles.. As originally planned,
farmer's markets were to be set up in towns and cities near
agricultural areas. The farmers would bring some of their
produce to these markets to sell to the city families. As
well as produce, they began bringing handicraft articles
which they had made. As business grew, the variety of
articles offered increased.
The Farmer's Market now sells all types of foods,
both domestic and foreign, many types of clothes, household
appliances and decorations, sporting goods, and a variety
of small luxuries. It is little wonder that with this
variety of goods and the appeal of an old farmer's market
it has become a big tourist attraction.
With such a variety of products and each type han
dled at a different stall, it could be expected that there
would be restaurant specialization too. A list, which
includes most of the types of food specialty booths,
follows:
Coffee bars
An Italian kitchen
A Chinese kitchen
Spanish kitchens
A French restaurant
A pit barbecue
A juice and salad bar
An oyster and fish bar
Fish and chips
Pie and dessert booths
Breakfast (all day) booths
Ice cream booths
The Market enjoys a very large lunch business. It
appears that the variety tempts almost every tourist into
buying something to eat. As well as doing that, it
acquaints people with food specialization and thereby could
be considered to be doing the specialty houses a service.
It was not attempted to secure any specific infor
mation on these booths, for their operation is such that it
would not fit into a pattern established by the specialty
houses under consideration. However, they must be included
in any overall discussion for they do show the power of
novelty in food preparation and service. With all the
excellent eating places in Los Angeles, one could hardly
expect tourists to eat at a market, and yet that is exactly
what they do. The tremendous variety which specialization
makes possible is too much of a temptation.

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Asset Metadata

Creator Schwartz. Frederick L. (author)

Core Title The economics of specialty restaurants with particular reference to Los Angeles

Degree Master of Arts

Degree Program Economics

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Economics, Commerce-Business,OAI-PMH Harvest

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Phillips, E. Bryant (committee chair), Garis, Roy L. (committee member), Gilchrist, Franklin M. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-439547

Unique identifier UC11265153

Identifier EP44710.pdf (filename),usctheses-c20-439547 (legacy record id)

Legacy Identifier EP44710.pdf

Dmrecord 439547

Document Type Thesis

Rights Schwartz. Frederick L.

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA