Restaurant Management

Restaurant Management

Case Study

COMPANY

A Silver Fox Advisor Client has been the Owner of several restaurants in the Houston area for the last 25 years. The return on investment, pre-tax net, has been approximately 100%. The Owner's business assumptions had been that the Owner should be involved 100% in the business, or else the business should be sold and the Owner should retire. 

PROBLEM ENCOUNTERED

Retirement might have been feasible except for the fact that the Owner's wife, 20 years younger than he, had just earned her PhD and was now ready to begin her own career, not in the restaurant business. The Silver Fox Advisor pointed out that the Owner could retire but if he wanted to stay married, he would not be able to travel very far with his new found freedom. She would be busy building her new business. 

SILVER FOX ADVISOR INVOLVEMENT

The Owner and the Silver Fox Advisor agreed that the restaurants were providing them with a very good living. In meetings with the Owner, the Silver Fox Advisor pointed out that with personnel adjustment, the Owner's direct involvement could be reduced to a couple of days per week.

After several meetings, with a lot of analysis and study, the Owner agreed that restructuring management might be the answer. 

CONCLUSIONS

Several months later a management structure along the following lines was implemented: 

  1. Each restaurant will have a kitchen manager and a front room manager.
  2. Two regional managers are in place. Each is responsible for three restaurants. These managers have options for some equity based on performance and report directly to the Owner.
  3. Performance competition has been set-up for each restaurant as well as regional competition.
  4. Morale is high. Each employee feels that he/she has some in-put as to how the restaurant is run.
  5. The Owner is delighted with the results to date. He continues to make a good return on his investment. He has more free time and his wife agrees that the new arrangement is working out very well.
  6. The Silver Fox Advisor and Owner will continue with regular meetings to work and resolve new challenges (opportunities) as they arise.
  7. A new restaurant has been opened and it is integrated into the overall organization.

Silver Fox Advisors Sponsors