Restaurant Sector: Survival and Potential Conflicts, Part 3

Restaurant 5Most of the economic performance of any restaurant can be determined by the restaurant level economic drivers: amount of debt, interest rate, sales, cost of operations, and the cash flow (or outflow) that results from every restaurant.

Once a restaurant operator reaches about 5 units or so, they will benefit and grow through economies of scale, new sites, franchising and management systems. For example, one can buy food, beverage and supplies much more efficiently with volume.

Every restaurant operator hopes to train and develop their staff, to hold employee turnover costs down, and provide a pool of workers for their next store. Restaurant turnover averages 20-40% per year for managers, and can be as high as 150 to 200% per year for hourly workers, although turnover has fallen since the 2007-2009 recession.

About John Gordon

John A. Gordon is a restaurant sector expert, who focuses on restaurant management, operations, and related earnings and economics matters. He consults with attorneys and other professionals who need to know about restaurants, via expert research, expert consultant and expert witness roles. Working for both plaintiffs and defendants, he has experience with both state and federal actions. He is an expert on chain restaurant business conditions and publicly traded companies. Gordon has extensive, career-long executive restaurant operations, corporate staff, financial management and management consulting experience, and is familiar with virtually all management issues and business disciplines. He has completed PSLRA securities, financial projections, due diligence reviews, earnings and damages, franchisee/franchisor matters, wage and hour and menu analysis expert work. Expert witness and article contributor for www.ForensisGroup.com

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