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I want to go to a private mid priced eating establishments but time and time again I leave disappointed. They don't know how to run a restaurant. I think the reason is so many immigrants are coming to America and want to open restaurants because it is relatively easy to do. They don't have the modern scientific approaches to running a restaurant and fail. I hate it but the chains have better food if you are talking about places under $20 a meal. (In most cases)
I'm not talking about privately owned mid priced restaurants. I'm talking about privately owned vs. publicly traded fast food chains. Fast food is closer to $5 per meal.
You need to use yelp for restaurant reviews if you want really good casual or upscale restaurant. The best of the best are mid priced and expensive non chain restaurants. But you need to do your research. Go to yelp.com, put in your city and search for the type of food you're looking for.
I love Jack in the Box, and I have only had Jack in the Box a handful of times because I live in the Northeast. Whenever I go west, I make a point to go to Jack in the Box.
I dont know about their marketing. For an industry like fast food, I dont think marketing will make much difference. People arent that obsequious. Actually I have not seen a fast food ad on the telly in a while. But no one I know will eat a certain food more because of a celebrity, or catchy phrases, or hokie comedy.
That's a big word. You must be smart. Jack in the Box is tasty, but the food is low quality. Food can be tasty an crap at the same time. I like their tacos, but I looked up the ingredients and the meat has a lot of fillers, ie not really meat. Some privately owned chains sell quality and tasty food for a low price. Chick Fill A is 100% unprocessed chicken and In n Out is 100% beef burger. The difference is they keep it simple, They have a much smaller menu. Their marketing is word of mouth.
I think you under estimate the power of marketing. It allows businesses to sell low quality products.
Most are publicly traded, e.g. MacDonald, KFC, taco bell, subway, and so on. Arby's is an exception IMO...pretty good quality for fast food.
There aren't many privately owned, Chick Fil A, FiveGuys, In n Out
KFC used to be Privately owned by the owner. Then it was sold. The owner stayed on board to oversee quality, the after he was replaced the quality went down. He was quoted as saying,
"My God, that gravy is horrible. They get tap water, mix it with flour and starch and end up with pure wallpaper paste. Another thing. That new crispy recipe is nothing in the world but a damn fried doughball stuck on some chicken"
When did that guy get replaced? Is there a fried chicken I have yet to taste?
The formula is this. An individual starts a private restaurant, succeeds due to a good product, opens more location, sells out to investors, investors lower quality and increase marketing and keeps the original owners name and story. The business expands and is worth exponentially more.
The owner should never sell out 100%, but should keep some control and sell only shares.
Last edited by FelixTheCat; 03-11-2013 at 11:26 PM..
The problem with corporations is they're often too focused on the short term. They're under constant and immediate pressure to increase profits and shareholder value and this often results in too many corners getting cut, which results in reduced quality, which results in fewer customers in the long run. The trade-off is going public makes more capital available for quicker expansion.
A few weeks ago I was looking at companies with the highest net promoter scores (a measure of customer loyalty) in order to get ideas for companies to invest in. The problem was that most of the ones with the highest scores are privately held companies.
For example, grocery stores. The top 4 according to a link I found are Trader Joe's, Wegman's, Publix, and Costco. Of these 4, only Costco is a publicly traded company.
I want to go to a private mid priced eating establishments but time and time again I leave disappointed. They don't know how to run a restaurant. I think the reason is so many immigrants are coming to America and want to open restaurants because it is relatively easy to do. They don't have the modern scientific approaches to running a restaurant and fail. I hate it but the chains have better food if you are talking about places under $20 a meal. (In most cases)
My experience is completely opposite. The chains typically have bland and unimaginative food that caters to the lowest-common denominator. Tons of corners are cut. Sauces made in factories hundreds of miles away months ahead of time. Cheap ingredients are used (like soybean goop with yellow dye and fake butter flavor), lots of stuff is frozen and microwaved, or frozen and deep fried. Very little is prepared fresh, everything is automated with timers or packaged into little plastic bags then assembled by someone who doesn't know the first thing about cooking. Meat and fish are grossly overcooked about 90% of the time, especially chicken. Ingredients are constantly omitted because the workers are out of them and are too lazy to go to the back and get more. Desserts come in big boxes from a factory and often are frozen when ordered and get microwaved and served half melted on the outside and half frozen on the inside. Workers don't care and are largely incompetent due to high turnover. This comes from both eating at these places and having worked at 2 of them. Some chains are better than others though. P.F. Changs and Cheesecake Factory are better than most, for example.
Just look at the concerns that the owners of Five Guys have about going public:
Quote:
“I don’t see how we can control it,” he says. “I worry about people wanting to come in and cut corners, cut costs, increase the bottom line.
“You know, there’s a lot of ways we can increase our bottom line really quickly,” says Murrell, before explaining (again) why Five Guys opts for slow-growing, relatively expensive Idaho potatoes over their speedier, cheaper southern cousins in Florida and California.
“Those are the kinds of things that might happen if we went public,” he says. “We’d have stockholders trying to push us to cut costs and push us into advertising. We worry about those kinds of things.”
Independent places though, I think probably do have a greater chance of being a total disaster, at least the new ones, since they lack the resources and often the knowledge behind the corporate places, and usually don't have things planned out as well. But that's sort of an apples and oranges comparison. Chain restaurants go through the same thing when opening new locations, although that's sometimes mitigated by bringing in workers from other stores to open the new ones.
Last edited by EugeneOnegin; 03-13-2013 at 10:32 AM..
I agree with the OP that the best fast food/greasy spoon spots are going to locally run businesses as opposed to chains. I personally avoid all chain restaurants unless I have no choice and in that case, I just enjoy it for what it is. But unfortunately, locally run businesses, even though they can produce quality food (not all of them but we are talking about the ones that do) don't make much money. I know there are exceptions one can point at but for the most part, someone cannot make life changing money running a locally amazing hamburger joint. Someone can make millions by expanding a concept that works, tweeking the menu to make it more streamlined and scalable, and cutting corners with ingredients to squeeze out profits.
Unfortunately, I think this the difference - money. There's money to be made in expanding a concept to the masses and very little money in catering to local niche. And when you bring investors in the mix, they want to see profits - period. There are also chains that you mentioned that are in the middle, expanding but still maintaining some quality standards as well - but I bet you the quality has still declined from what they originally were when they were a mom n' pop operation. There is room for all types of establishments in all markets, however, and thankfully they can co-exist to serve all niches. I'll take a chicken sandwich from my local, family run italian shop (who are not gettin rich doing this) over anything that chic fil-a or McDonalds can make (owners of which are likely doing much better).
I agree with the OP that the best fast food/greasy spoon spots are going to locally run businesses as opposed to chains. I personally avoid all chain restaurants unless I have no choice and in that case, I just enjoy it for what it is. But unfortunately, locally run businesses, even though they can produce quality food (not all of them but we are talking about the ones that do) don't make much money. I know there are exceptions one can point at but for the most part, someone cannot make life changing money running a locally amazing hamburger joint. Someone can make millions by expanding a concept that works, tweeking the menu to make it more streamlined and scalable, and cutting corners with ingredients to squeeze out profits.
Unfortunately, I think this the difference - money. There's money to be made in expanding a concept to the masses and very little money in catering to local niche. And when you bring investors in the mix, they want to see profits - period. There are also chains that you mentioned that are in the middle, expanding but still maintaining some quality standards as well - but I bet you the quality has still declined from what they originally were when they were a mom n' pop operation. There is room for all types of establishments in all markets, however, and thankfully they can co-exist to serve all niches. I'll take a chicken sandwich from my local, family run italian shop (who are not gettin rich doing this) over anything that chic fil-a or McDonalds can make (owners of which are likely doing much better).
I agree. Some local mom and pop restaurants can be much much better than a good fast food chain. That's apples to oranges. I'm not in the restaurant biz, these are just patterns I see. There are crap mom and pop places too and they fail. I guess the difference between corps and private business that succeed are that some private businesses are a labor of love. They can be hugely profitable, but the owners of private businesses sometimes refuse to sell out on quality due to principle. And that is why private is better.
The corporations can expand faster and capture more of the market. Mcdonalds, Yum Brands are already global, while In and Out, and Five Guys are just regional.
The corporations are mainly about making their financials statements look good so they can just sell their stocks at the highest price. The people behind the corporations are looking to jump from bubble to bubble, or hot item to next hot commodity. Or another way to put it, they dont only own and run food businesses to make money. If it goes bad, they move onto something else. So they take less care.
In and Out and Five Guys really cannot go anywhere else. Well they can if they wanted, but understand they are where they are because of their core business which is food. They do what they can to keep that up.
You should put this in the business subforum.
Five Guys is national now, isn't it? I first ate there when I was staying in Tampa in 2009 and they opened up a store in Duluth, MN the next year.
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