Week One - Lecture Notes. Strayer University

1. FOOD AND BEVERAGE
OPERATIONS
MANAGEMENT
HTM 310 ~ INTRODUCTION

2. TOPICS FOR THE WEEK
• The following topics will be covered in this lesson:
• Early history of eating out
• French culinary history
• Birth of restaurant in America
• Challenges of restaurant operations
• “Buy, build, franchise, or manager?”
• Starting from scratch
• Restaurants as roads to riches
Welcome to Food and Beverage Operations Management. In
this lesson, we will discussion an Overview of and Introduction
to the Food and Beverage Operations Management Field.

3. EARLY HISTORY OF EATING OUT
• Egypt
• Greece
• Rome
• Sharing of food and drink is a universal language
• Let’s begin by discussing the early history of eating out. Eating out has a
long history. Locations where people are and drank with other people
began in 1700 B.C.E. Over the years, Egyptians, Greek and Roman
empires all had some form of dining out. Dining location spread all over
the world into every country. Today, there are countless places to eat out
and enjoy many different types of food and beverage from almost all
cultures. The sharing of food and drink is a universal language.

4. FRENCH CULINARY HISTORY
• Public dining room
• Beginning of French Culinary Arts
• The first restaurant originated in France and was called a public dinning room. Throughout history
France has played a key role in the development of restaurants. Before the existence of restaurants we
are familiar with today, the only place in France that could serve food was a hotel. A small group of
restaurant proprietors started to challenge this structure and built free standing restaurants. The action
by these few men signified the beginning of French Culinary Arts.

5. BIRTH OF RESTAURANTS IN AMERICA
• Samuel Coles
• Ordinaries
• Taverns
• Inns
• Restaurants
• The beginning of the American restaurant industry is usually said to be in 1634, when Samuel Coles opened an
establishment in Boston that was named Coles Ordinary. Prior to the American Revolution, places selling
food, beverage, and place to sleep were called ordinaries, taverns, or inns.
• In American the innkeeper was often the most respected member of the community and regarded as one of
its substantial citizens. The restaurant, as we know it today, is said to have been a by product of the French
Revolution. The term restaurant came to America in 1794via a French refugee.

6. CHALLENGES OF RESTAURANT
OPERATIONS
• Long work hours
• Lose of investment
• High employee turnover
• Short shelf life of much of their food and beverage inventory
• Restaurant Operations are very challenging, but also very rewarding. Long working hours are the norm in
restaurants, but over the years, work shifts and hours have been reduced to allow management and staff
much needed rest. One big challenge for restaurant owners is the possibility of losing their investment and
that of other investors. Another challenge for restaurant a mangers is the high employee turnover rate. They
constantly have to train new staff to jeep up with the high loss of employee. Restaurants also have to deal
with the short shelf life of much of their food and beverage inventory.

7. CHECK YOUR UNDERSTANDING
• Directions – Choose weather the statement below is true of false.
• The beginning of the American restaurant industry is usually said to be in 1634, when Samuel Coles
opened an establishment in Boston that was named Coles Ordinary.
• True
• False

8. ANSWER
• True
• The beginning of the American restaurant industry is usually said to be in 1634, when Samuel Coles
opened an establishment in Boston that as named Coles Ordinary.

9. “BUY, BUILD, FRANCHISE OR MANAGE?”
• A person considering the restaurant business has several career and investment options:
• To buy an existing restaurant, operate as is or change its concept,
• To build a new restaurant and operate it,
• To purchase a franchise and operate the franchise restaurant,
• Or to manage a restaurant for someone else, either an individual or a chain.
• Based on the chosen option, there are advantage and disadvantages to all four of these options. Look a the
table on the next slide to review the advantages and disadvantages of each option.

10. “BUY, BUILD, FRANCHISE OR MANAGE?”
Original
Investment
Needed
Experience
Needed
Potential
Personal
Stress
Psychological
Cost of
Failure
Financial
Risk
Potential
Reward
Buy Medium High High High High High
Build Highest High High Highest Highest Medium to
high
Franchise (a)
Ex. Subway
Low to
medium
Low Medium Medium Medium Medium to
high
Franchise 9b)
Ex.
Applebee’s
High High High High High High
Manage None Medium to
high
Medium Medium None Medium

11. STARTING FROM SCRATCH
• Worked in their family’s restaurant
• Worked in a quick-service restaurant
• Highly competitive
• Ability to work long hours
• Accept a low salary
• Would-be restaurant operators may have already worked in their family’s restaurant, perhaps starting at an
early age. Many aspiring restaurant operators have tasted the restaurant business as employees of quick
service restaurants. The restaurant business is highly competitive and requires inordinate energy, the ability
to work long hours and the willingness to accept a low salary. Though starting a restaurant from scratch is
difficult, there is something very rewarding about succeeding in this tough industry.

12. RESTAURANTS AS ROAD TO RICHES
• Ownership
• The business plan
• Sales and marketing
• Location
• Management and staff
• Operations
• The Menu
• Food and beverage
• Budget
• Legal
• Cost Control
• Service
One of the biggest reasons that thousands of people seek restaurant
ownership is the possible financial rewards. With relative few financial
assets, it is possible to buy or lease a restaurant or to purchase a franchise.
Throughout this term, we will discuss many different area of the restaurant
business.

13. CHECK YOUR UNDERSTANDING
• Directions – Choose weather the statement below is true of false.
• The restaurant business is NOT competitive and does NOT require inordinate energy, the ability to work
short hours, and the willingness to accept a high salary
• True
• False

14. ANSWER
• False
• The restaurant business is highly competitive and requires inordinate energy, the ability to work long
hours, and the willingness to accept a low salary.

15. SUMMARY
• Early history of eating out
• French culinary history
• Birth of restaurant in America
• Challenges of restaurant operations
• “Buy, build, franchise, or manager?”
• Starting from scratch
• Restaurants as roads to riches
• We have now reached the end of this lesson. Let’s take a look at what we have covered:

16. • First, we discussed a brief early history of eating out. We learned that eating out has a long history.
Locations where people ate and drank with other people began in 1700 B.C.E.
• Next. We looked at the French culinary history and the birth of restaurants in America. The first
restaurant originated in French and was called a public dining room. Throughout history France has
played a key role in the development of restaurant. Before the existence of restaurants we are with
today the only place in France that could serve food was a hotel. The beginning of the American
restaurant industry is usually said to be in 1634, when Samuel Coles opened an establishment in Boston
that was named like industry, Prior t the American Revolution, places selling food, beverages, and a
place to sleep were called ordinaries, taverns, or inns.

17. • An examination of the challenges of restaurant operations was reviewed next. Restaurant Operations are very
challenging, but also very rewarding. Some of these challenges are:
• Long working hours;
• The possibility of losing one’s investment and that of the investors;
• And the high employee turnover rate.
• Then we considered whether to buy, build, franchise, or manage a restaurant and the idea of starting from
scratch. A person considering the restaurant business has several career and investment options:
• To buy an existing restaurant, operate it as is or change its concept;
• To build a new restaurant and operate it;
• To purchase a franchise and operate the franchise restaurant
• Or to manage a restaurant for someone else, either an individual or a chain.

18. • Would-be restaurant operators may have already worked in their family’s restaurant, perhaps starting at
an early age. Many aspiring restaurant operators have tasted the restaurant business as employees of
quick service restaurants. The restaurant business is highly competitive and requires inordinate energy,
the ability to work long hours and the willingness to accept a low salary. Though starting a restaurant
from scratch is difficult, there is something very rewarding about succeeding in this tough industry.
• And finally, we talked about restaurants as roads to riches. One of the biggest reasons that thousands
of people seek restaurant ownership is the possible financial rewards. With relative few financial
assets, it is possible to buy or lease a restaurant or to purchase a franchise. Throughout this term, we
will discuss many different area of the restaurant business.