Chains vs. Non-chains, not revisited
- Katie Nell Jul 25, 2005 11:34 AM
Okay, I'm asking this for my own education, and I hope I won't regret it! I would like a definition of a chain vs. a non-chain vs. a "privately held" company, etc., as discussed in the Chain vs Non-Chain thread below. I don't want this to get political and I don't want advice on what to avoid... I just want clear cut definitions, so I can decide on my own! Thanks!
I never say IMHO (In My Humble Opinion)- my attitude is that it's a redundant statement - other than specific, cited references, it's all opinions, humble and otherwise, here and elsewhere on the net.
Privately held vs. a public corporation has no meaning in this context. Who cares who the ultimate beneficiary of profits are in this situation? Who cares whether a chairman of a board or an individual owner or partnership is the financial controller? The relationship between the creative force and the financial controller is very important, but it isn't defined, per se, by the corporate structure.
It's the very fact that there is a different person/group that worries about money than that decides what to serve, that is an important differentiator. When the vision of the controller is to replicate a succesful formula umpteen times, making more and more money in the process, we have a chain. When the process includes the sacrificing of the quality elements of food service, and the artificially focussed targeting of mass audience appeal, in order to maximize profits, we have a bad chain.
There's no reason why a good chef can't share the vision of replication. Howard Johnson senior was very interested in replicating easy to prepare, quality foods - he even hired Jacques Pepin, who worked for him for 10 years, sharing the same commitment. Unfortunately, Johnson's MBA son was much more interested in the money than the food, and pretty soon you had a dismal chain, that eventually went bankrupt.
Tony Bourdain's comments in this latest eGullet interview about chef's who consider 1,000 service nights to be a challenge was revealing too. It isn't always about the one exemplary dish, prepared with hours of painstaking individual effort and vision. The purpose of the restaurant is to replicate - 80 great dishes per night or 1,000 - the 1,000 would most certainly be a challenge. To do it over multiple restaurants across America (or the world) - indeed that would be a challenge as well. To do it in such a way that costs are maintained or even lowered - well that would be a vision in sync with any MBA/CFO empty suit.
Read this from a famous automotive engineer: that any idiot could design a water pump for a Rolls-Royce, but that it took a genius to design one for a Chevrolet...because the RR pump would be built carefully by a highly-trained technician, whereas the Chevy pump would be stamped out by machinery and thrown together by semiskilled labor. That's the difference between grandma's fried chicken and KFC...
One of the best examples of this is Jean-Georges - he now has restaurants all over the world (along with 8? in NYC) at the highest level of quality - BUT . . .how has he done it, by building an amazing staff of professionals that he can send anywhere, train staff in any country to carry out his vision - NOT by making idiot proof menus, and hiring a bunch of idiots who don't care, to cook the food. This is my problem with chains and corporate meddleing. What you are eating is institutionalized, replication of food that could be cooked by robots. Cuisine is about heart, everyone that works for Jean Georges is proud of what they do, they are the best in the profession and they can replicate better than anybody (but they can think, and cook with soul too).
Oh, and as far as setting his foot in the restaurant, guess what, almost every successful Chef has more than one restaurant now, many several in different states or countries - not many have both feet in any of their restaurants any more, it's all about the people under them (most of which could break off on their own and be top Chef's themselves).
Locally owned single store: Local
Locally owned multiple stores: Local
Locally owned multiple stores, franchising locally: Borderline
Locally owned, multiple stores, beginning to branch out regionally: Local
Locally owned, multiple stores, beginning to branch out regionally and starting to franchise: Boderline
Regionally owned, opens in your community: Borderline
Regionally owned, franchising in your community: Chain
General Franchises: Chain
Franchise, single store, franchised by a local: Chain
Franchise, multiple stores, franchised by a local: Chain
Corporate or board owned: Chain
A CHAIN RESTAURANT is that where a restaurant concept is developed (name, recipes/menu, and very often, building structure > the things that go into a restaurant-logos, uniforms, prices, etc.) Then it can operate in several locations (cities, states, countries) with the same familiar elements. There can be just a few locations (within one county) or thousands of locations (statewide, worldwide).
There are two kinds of "chain restaurants"
(1) Privately held
(like In-and Out Burgers or International House of Pancakes or Wolfgang Puck Express Cafe) wherein the corporation chooses not to offer ownership or even stock options to people outside their family or corporation; and
(2) Franchise chains (like Nickels Grill and Bar [by Celine Dion], Carls' Jr.'s/Hardee's, Subway Sandwiches, etc.) are also a concept with a system of operations, but it is offered to the general qualifying public to purchase and operate one (or more) locations(s) and keep the profits. However, they must operate under the strict governing of the originator and the concept. This allows for predictable success for someone to start-up a business for themselves, but may not be generally familiar with the entire industry (or how to do run any of it). The cooks follow the same recipes and the managers follow the same business plan that are/is the concept for all of the locations.
Chain restaurants range from full-service sit-down dining to fast food and drive-thrus, candy stores, juice bars, etc.
A NON-CHAIN restaurant is one that is just one or two locations. Cuisines, prices, the whole concept varies from other non-chain restaurants. Often a non-chain is identified (with patrons) by the Owner/Operator or the Executive Chef. Some non-chain restaurants are mom-and-pop shops and some non-chain restaurants are owned by corporations or within major hotel chains (like Pavilion dining room inside the Four Seasons Hotel in Newport Beach).
There are some proprietors/owners that develop several restaurants, but they are not considered a chain because each is an individual restaurant with its unique menu and restaurant name. Wolfgang Puck is one with a variety of non-chain restaurants (http://www.wolfgangpuck.com/ ). David Wilhelm (in So. California) is another, although a few of his restaurants have basically the same cuisine and recipes and food suppliers (he said he found his niche in French cuisine) ( See, http://www.culinaryadventures.com/
A CHAIN restaurant can have an excellent cook and may be better than another location even though the menu and recipes are the same. And, then again, if you go to a chain restaurant with the idea that the food is great, there is the possibility that the cook doesn't do as well as the one in the other location you visited first.
The ability to get good product is another variance of what makes a restaurant good or bad.
Chain restaurants tend to stick with predictably available product that does not perish when delivered to any of their locations (be it Alaska or Madrid).
Non-chain restaurants can specialize more with food product available to them. Some non-chain restaurants change their menus with seasonally available food product. It is the talent of the cook or chef that and their suppliers product that people often crave or want to experience.
Some chains started as one restaurant and then decided several years later to develop more locations exactly like the first one that brought them success. Hence, a chain was born. Often this is because a concept (like drive-thru) or a special equipment (like KFC pressure cooker) can be duplicated easily and is a main reason for the restaurants' success.
A restaurant's success can be a result of a variety of things, from the business plan to the patron's whims.
Privately held and publically held has nothing to do with whether it's a chain or a non-chain.
"PRIVATELY HELD" restaurants can be a chain or non-chain. Privately held restaurants are owned by an individual person or family or corporation. They do not offer stock for company to the general public (Securities and Exchange) and can operate on their own rules without shareholders voting on how business operations should be run.
And, a non-chain restaurant can be a public company if they sell stock to the general public for revenues, but that is rare.
A PUBLIC COMPANY is one that has issued securities to investors (stock) and is then must comply with SEC reporting laws and may also be controlled somewhat by the votes of the Board members and shareholders. Again, that kin od control is rare, because stockholders are usually just interested in money returns and not the day-to-day operation of the business. But, they do have a vote if something arises they are concerned with (and may then affect business operations).
Don't want to confuse you, but thought these interesting tidbits:
The privately held chain, In-N-Out Burger, has a businesss plan policy that says they must buy the land property and building their restaurants will stand on (and not just rent from a shopping center).
A franchisee pretty much buys/gets the "How-To" package from the chain company and then does the best he can with his location. A Jack-in-the-Box across the street from the University of California/Irvine did a special promo giving away free UCI paraphanilia with purchase. And, the company provided the manufactured product, signs, ads, etc., though it would not be a successful promo in locations that don't even know what UCI is. So, there is some margin of personalization a manager can suggest for approval at his location even in a huge international chain.
For the purpose of requiring a restuarant to provide nutritional information the state of Texas defines a chain as
"chain restaurant" means an establishment operating at eight or more locations in this state with the same name and under common ownership that derives 75 percent or more of the establishment's gross revenue from the sale of food and beverages, not including alcoholic beverages, for on-premises consumption."
However the best definition is from a labor law website that describes chains, franchising,etc, in pretty specific terms.
Part of the reason for quoting the Texas definition for a specific situtation is that as the law site says, the definition of some of these terms is state specific.
They give In-N-Out Burger as an example of a shared corporate ownership.
Chick-fil-A is one of the largest privately-held restaurant chains with more than 1205 restaurants in 38 states. Domino's is another.
El Polo Loco, Carl's Jr, Hardee's, It's a Grind ... franchises.
As to what constitutes a chain on Chowhound ... up to the moderators ... if they catch the post on the wrong board. Haven't seen a hard and fast definition. For the big city boards, probably a resaurant that has locations outside that board.