Why Are Chain Restaurants So Popular? (Moved)
I must say that, after all these years and having personally witnessed (and affected by) the Chain Revolution, I still hate big chains. I avoid Starbucks. I go to local steakhouses. I even try not wear GAP and Banana Republic. WELL, I'm now sitting here with no coffee, no steak in the last six month and wear nothing but an old underwear (JUST KIDDING!), thinking that maybe I should give Macaroni Grill a second chance.
Why are chain restaurants so popular? Even I go to them occasionally! Business at most chain restaurants are booming due to the same reasons that other chain or franchise businesses tend to have higher success rate than mom-and-pops. Here are some of the reasons according to my observation and analysis:
1) Predictability - All Baja Fresh have fresh same variety of salsa, just like all Starbucks (well most of them) make the same-taste coffee. When you walk into a Red Robin, you can expect perky waitresses (most of the time - well maybe not in Seattle). You can even expect bad food in some of them - no matter where you go.
2) Branding - Whether it's an upscale image (PF Chang) or children-friendliness (Red Robin), chain restaurants project an image and they do make an effort to ensure that what they deliver is consistent with the image. If you feel like a particular kind of experience, you simply have to select the chain and find the nearest one.
3) Convenience - For travelers in particular, you can usually find a familiar name in a decent size city when you don't have your Zagat review booklet handy and you notebook can't find a wifi hotspot that's free. Between a unknown local steakhouse with mostly empty parking lot and Outback, which one would you choose? Would you rather go to Big Joe's Tavern (you won't even find it on the web!) or Chili's for a big and juicy burger when you're out in Tennessee?
4) Sense of Security - No one, or very few people, enjoy looking like a freshman sitting in the registration hall. Most people simply like to sit down and feel like an old customer when they go out to eat - "Yes, I know your beer sampler is a great deal." When you sit down at a Friday's in Ukraine (yeah they do have one there!), you can expect them to have baby back ribs and at least one draft beer.
So, wearing my MBA hat, where's what it take to make a chain, no matter how small, succeed:
1) Be consistent, VERY consistent. Small local chains often don't do this very well, but to scale up you must deliver the same product and service in every location. This means hiring employees rather than entrepeneurs to run your restaurants, and enforcing strict franchising conditions. I get the same allergy to wood every Black Angus that I visit.
2) Project an image, preferably a trendy one. Melting Pot caught on the "Euro-fever" early enough for it to really succeed. Baja Fresh came out just when Baja California became a up-and-coming sun worshipers' destination. Do you know how Buca di Peppo and Maggiano's made it? It's the Sopranos, stupid! You've got to bet on a direct and powerful message, and project it loudly.
3) Take good location and have a wide selection of food on your menu. You want to be where it's easy for people to get to and lots of stuff on the menu for people to choose from. I believe that the best locations are near or in shopping malls. Foodwise, it's ok to be ethnically focuses, but remember you are in a melting pot, so you've got to cater to a wide range of tastes.
4) Creating a feeling of familiarity in details. This is more than consistency - but trying your very best to make them feel that they're HOME with the same decor, same menu cover, same restroom sink. When an Texan-American enters a Ruth's Chris in Taipei, he has to feel like he can act like a Texan and chow down a medium-rare steak with a big knife. This is even important for small local chains - why would I try a California Cafe in PA if it's no longer Californian?
5) Lastly, you've got to price it right. Nowadays entrepeneurs thinks that as long as they throw money into a new chain like Left Bank did, they can create another success. Think again. Lots of chain-wannabes thought they can start a trendy Chinese restaurant and charge like PF Chang. Com'on, even PF Chang had a humble beginning! People are not stupid - unless you all deliver the first four things like Macaroni Grill can, don't charge like you're a Macaroni Grill.
If you want to start a chain, join a franchise or eat at chain restaurant, ALWAYS remember that the true value of a chain restaurant is not the celebrity chef or the size of their lobster, but it lies in the four main reasons for their popularity. So, set your expectation correctly, and enjoy the same familiar experience that you know will be there as long as you and the restaurant are alive.
Why are chain restaurants so popular? Even I go to them occasionally! Business at most chain restaurants are booming due to the same reasons that other chain or franchise businesses tend to have higher success rate than mom-and-pops. Here are some of the reasons according to my observation and analysis:
1) Predictability - All Baja Fresh have fresh same variety of salsa, just like all Starbucks (well most of them) make the same-taste coffee. When you walk into a Red Robin, you can expect perky waitresses (most of the time - well maybe not in Seattle). You can even expect bad food in some of them - no matter where you go.
2) Branding - Whether it's an upscale image (PF Chang) or children-friendliness (Red Robin), chain restaurants project an image and they do make an effort to ensure that what they deliver is consistent with the image. If you feel like a particular kind of experience, you simply have to select the chain and find the nearest one.
3) Convenience - For travelers in particular, you can usually find a familiar name in a decent size city when you don't have your Zagat review booklet handy and you notebook can't find a wifi hotspot that's free. Between a unknown local steakhouse with mostly empty parking lot and Outback, which one would you choose? Would you rather go to Big Joe's Tavern (you won't even find it on the web!) or Chili's for a big and juicy burger when you're out in Tennessee?
4) Sense of Security - No one, or very few people, enjoy looking like a freshman sitting in the registration hall. Most people simply like to sit down and feel like an old customer when they go out to eat - "Yes, I know your beer sampler is a great deal." When you sit down at a Friday's in Ukraine (yeah they do have one there!), you can expect them to have baby back ribs and at least one draft beer.
So, wearing my MBA hat, where's what it take to make a chain, no matter how small, succeed:
1) Be consistent, VERY consistent. Small local chains often don't do this very well, but to scale up you must deliver the same product and service in every location. This means hiring employees rather than entrepeneurs to run your restaurants, and enforcing strict franchising conditions. I get the same allergy to wood every Black Angus that I visit.
2) Project an image, preferably a trendy one. Melting Pot caught on the "Euro-fever" early enough for it to really succeed. Baja Fresh came out just when Baja California became a up-and-coming sun worshipers' destination. Do you know how Buca di Peppo and Maggiano's made it? It's the Sopranos, stupid! You've got to bet on a direct and powerful message, and project it loudly.
3) Take good location and have a wide selection of food on your menu. You want to be where it's easy for people to get to and lots of stuff on the menu for people to choose from. I believe that the best locations are near or in shopping malls. Foodwise, it's ok to be ethnically focuses, but remember you are in a melting pot, so you've got to cater to a wide range of tastes.
4) Creating a feeling of familiarity in details. This is more than consistency - but trying your very best to make them feel that they're HOME with the same decor, same menu cover, same restroom sink. When an Texan-American enters a Ruth's Chris in Taipei, he has to feel like he can act like a Texan and chow down a medium-rare steak with a big knife. This is even important for small local chains - why would I try a California Cafe in PA if it's no longer Californian?
5) Lastly, you've got to price it right. Nowadays entrepeneurs thinks that as long as they throw money into a new chain like Left Bank did, they can create another success. Think again. Lots of chain-wannabes thought they can start a trendy Chinese restaurant and charge like PF Chang. Com'on, even PF Chang had a humble beginning! People are not stupid - unless you all deliver the first four things like Macaroni Grill can, don't charge like you're a Macaroni Grill.
If you want to start a chain, join a franchise or eat at chain restaurant, ALWAYS remember that the true value of a chain restaurant is not the celebrity chef or the size of their lobster, but it lies in the four main reasons for their popularity. So, set your expectation correctly, and enjoy the same familiar experience that you know will be there as long as you and the restaurant are alive.
posted by His Servant at
4:12 PM
