To receive credit for having completed the Component, you must complete this assignment to your instructor’s satisfaction. It is highly recommended that you meet with him/her to discuss what that entails. If you have questions, please contact your instructor.
This task is strictly optional! If you do not wish to complete it, do not. There is no grade associated with this assignment. If completed successfully, it will be noted so as a completion of the Excellence Component for the purposes of the
The Purpose of this exercise is to experience what it’s like to obtain first-hand data from a company that doesn’t want to give you this data.
Many times, it’s helpful to benchmark yourself against the competition. It would be great to know what their sales are, what their costs are, who their target audience is, and how well they are doing achieving their goals. Most of the time, they are not willing to give up this information. Why would they? They’re competitors. If a company is publicly traded, their overall sales are part of their Annual Report, which they are required by law to produce to anyone who asks. Most public companies have this information on their websites, or will send it to you if you call them and ask.
This is not the type of information we’ll be gathering today. Today, we’re talking about going undercover.
Modern technology makes this a lot easier. Cell Phone cameras make it easy to take pictures of the menu or menu board, and the voice recorder feature makes it easy to take notes. Back in the day, we had to pretend to read a book, and make tiny notes in the margins.
Your mission, should you choose to accept it, is to gather information about a restaurant, and use this information to infer other metrics about it.
Here is the data that must be collected:
Note the date, time, name and location of the restaurant you visit. Give a little bit of background information. Is it in a small town? A shopping mall? A busy city?
Who is their target audience? Use their website and interior décor to explain who you think this restaurant is trying to appeal to.
Who is their actual audience? How many people are eating in the restaurant/waiting for carryout? What are their demographics? You’ll need to note approximate age and gender. Estimate if they fall under the category of Child, Student, Homemaker, Laborer, or Professional. Their clothing and the condition of their shoes will help you figure this out. Make several charts that make it easy to comprehend this information.
Photograph the Menu. Do NOT get caught doing this!! If you are caught and questioned, I will disavow any knowledge of what you are doing, and you must leave and try it again somewhere else. You want to get a representative sample of the kinds of food they have and the prices.
Estimate the average order cost. You can either eavesdrop on the cashier, or use the menu to estimate the per-person cost of a complete meal and drink.
Count the seats. What is the maximum seating capacity? This is not the same as the Fire Marshall’s maximum capacity. We need to know the maximum amount of people that could eat in this restaurant at one point in time.
Estimate what percentage of capacity the restaurant is operating at. What percentage of the seats are filled?
How long does it take to get served? Order something, and time how long it takes to receive your food. Based on this, how many orders could they serve in an hour?
How many people are on the crew? How many servers, cashiers, and kitchen crew?
How many exits are there and which one is closest? See, you SHOULD have thought of this when you first went in. What is your escape route if you’re busted?
How is the food? Does it have high-quality, or low-quality ingredients? Is it fresh or has it been in a cooler for a while? Is it handcrafted or mass-produced?
What sort of training does the crew need? Do they need to learn a menu, or is it pretty simple?
Using their average order cost, the percentage of capacity at which the restaurant is operating, and the number of customers, and number of orders per hour, estimate the sales dollars for this hour and the maximum sales dollars they could achieve.
Estimate their daily sales. Show how you did this. Keep in mind that restaurants usually have “rushes” during Lunch (11am-1pm) and Dinner (5pm-7pm). Some may have a breakfast rush. They will operate near maximum capacity during these times and it will taper off. Tell me how you arrived at your estimate.
Food costs in restaurants is usually about 30%. Labor costs are also about 30%.
Using your previous estimations, at the end of the day, how much is left over to pay for overhead? Profit margins for restaurants usually run between 5-10% of sales. How much profit is there at the end of each day?
How do you think you will be able to use this experience in your chosen profession?
What is one thing that surprised you about this experience?
This information should be in a 3-7 page paper with 1-inch margins, 12-point font. It should be narrative in style, carefully explaining your calculations. The tone should be professional. You’re telling a story of how you came by these numbers to your supervisor. There should not be any grammatical or typographical errors. It should be turned in by the last day of the class unless previous arrangements have been agreed upon via email.