15 Things You Didn't Know About Running A Fast Food Business

Summary

This video offers insights into the fast food industry, emphasizing the importance of location, adhering to health regulations, and offering varied menu options. It discusses the benefits of efficient serving systems, the flexibility of food trucks, and the impact of effective marketing. The script also addresses challenges such as food spoilage, employee retention, and adapting to customer demands. Finally, it suggests testing business ideas through pop-up locations and cautions against the pitfalls of food delivery for fast food businesses.

Takeaways

• 📍 Location is crucial for fast-food success; aim for busy areas like malls, universities, and tourist spots.
• 🚨 Always adhere to health regulations; check with your State Department and FDA for compliance.
• 🍔 Diversify your menu beyond the classics; consider low-calorie options and fresh ingredients to meet customer demands.
• 🔄 Develop an efficient serving system; train employees for speed and efficiency in food preparation.
• 🚚 Consider a food truck for a mobile restaurant experience with lower overhead costs.
• 📈 Marketing is key to attracting customers and promoting your brand; be visible and accessible.
• 💰 Offering competitive wages can attract and retain better employees, reducing turnover rates.
• 🍽️ Food spoilage can significantly impact profits; train staff to minimize waste and follow recipes precisely.
• 📋 Creating a smart menu can reduce costs and waste; combine ingredients wisely and buy in bulk.
• 👂 Listen to customer preferences; focus on best-selling dishes and adapt the menu accordingly.
• 🌐 Adapt your menu to local tastes as you expand into new markets or countries.
• 🛡 Develop a thick skin for dealing with difficult customers; train staff to handle such situations professionally.
• 🤝 Finding and keeping good employees is challenging; offer competitive salaries and benefits.
• 📈 Profit comes from selling more and minimizing waste; choose menu items that are cost-effective and popular.
• 🚫 Be cautious with home delivery; fast food may lose quality during transit, affecting customer satisfaction.

Q & A

Why is location so important for a fast-food business?

Location is crucial for a fast-food business because it determines the foot traffic and potential customer base. Opening in crowded locations like malls, universities, touristy places, or metro stations increases visibility and accessibility, which are key to attracting customers.

What are the health regulations that fast-food businesses need to consider?

Fast-food businesses must comply with federal and state health regulations, including those set by the US Food and Drug Administration. These regulations ensure food safety and protect public health, requiring adherence to specific health codes and standards.

Why is it beneficial to offer more than just classic fast-food dishes?

Offering a variety of dishes, including healthier options, can attract a wider range of customers with different dietary preferences. It also allows businesses to stand out from competitors and meet the demand for fresh ingredients and low-calorie options.

What are the advantages of running a food truck business?

Food trucks offer the flexibility of mobility, potentially saving on rent costs and allowing business owners to reach different customer bases. They must still adhere to health codes but can offer a unique dining experience with fewer employees.

How can a good serving system benefit a non-franchised fast-food business?

A good serving system ensures efficient service, which is a key aspect of the fast-food experience. It involves using ingredients in multiple menu items and having a clear step-by-step process for preparing orders quickly, contributing to customer satisfaction.

What role does marketing play in the success of a fast-food business?

Marketing is essential for attracting new customers and promoting offers. It helps increase brand visibility and recognition, as seen with major chains that open new locations frequently to stay accessible and competitive.

Why is it important to pay employees more than minimum wage in the fast-food industry?

Paying employees more than minimum wage can lead to better job satisfaction, higher retention rates, and improved performance. It also helps attract skilled workers who can work efficiently and contribute positively to the business.

How can food spoilage impact the profitability of a fast-food business?

Food spoilage reduces profit margins because it increases the cost of ingredients without contributing to sales. Proper training and adherence to recipes can minimize waste and ensure that only high-quality food is served.

What strategies can be used to create an effective menu for a fast-food restaurant?

Strategies include combining ingredients to create versatile dishes, buying in bulk to reduce costs, and minimizing waste through careful planning. It's also important to focus on best-selling items and adapt the menu based on customer preferences.

How should a fast-food business adapt its menu when expanding to different countries?

A fast-food business should consider local tastes and dietary preferences when expanding internationally. For example, KFC in Japan serves local dishes like rice bowls, while in India, they offer vegetarian options to cater to the local population.

What challenges do fast-food businesses face when dealing with difficult customers?

Fast-food businesses must deal with impatience and potential rudeness from customers, especially when they are hungry and waiting for their orders. Staff should be trained to handle such situations professionally and maintain a positive atmosphere.

How can a fast-food business ensure it hires and retains good employees?

Businesses should offer competitive salaries and/or benefits, provide training, and create a positive work environment. Being prepared for employee turnover and offering incentives can help attract and keep good employees.

What is the key to making a profit in the fast-food industry?

Profit is made by selling more products while minimizing waste. This involves choosing a menu wisely, creating recipes with basic ingredients, buying in bulk, and reducing waste to maximize efficiency and profit margins.

Why might home delivery not be a profitable option for fast-food businesses?

Home delivery can be challenging for fast-food businesses because the food can get cold quickly, which may affect its quality and taste. It's generally more viable if the delivery location is nearby and the order meets a minimum price threshold.

What is a pop-up location and how can it benefit a fast-food business?

A pop-up location is a temporary setup, often at local markets or events, that allows businesses to test their concept and gauge customer reactions. It's a cost-effective way to gather insights and adjust strategies before committing to a permanent storefront.

Outlines

00:00

🏪 Secrets of a Thriving Fast Food Business

This paragraph introduces the video's theme, focusing on the fast food industry's success and providing tips for aspiring fast food entrepreneurs. It emphasizes the importance of location, the need to comply with health regulations, and the potential for offering varied and healthy menu options beyond the classic fast-food dishes. The paragraph also touches on the efficiency of serving systems and the benefits of starting with a food truck for those who prefer a mobile business model.

05:01

📈 Marketing Strategies and Employee Management in Fast Food

The second paragraph delves into the marketing strategies that have propelled fast food chains to global recognition, such as the rapid expansion of McDonald's. It also discusses the challenges of employee retention in the fast food industry, suggesting that offering competitive wages and benefits can lead to better employee satisfaction and performance. Additionally, the importance of food quality and waste management is highlighted, as well as the need for menu creation that minimizes spoilage and maximizes profit.

10:01

🌐 Adapting to Global Markets and Customer Relations

The third paragraph addresses the necessity for menu adaptation as the business expands into different countries, using KFC's successful regional strategies as examples. It also warns about the potential rudeness of customers and the importance of developing a thick skin and training staff to handle such situations effectively. The paragraph concludes with advice on the importance of profit maximization through high sales volume and minimizing waste, as well as the suggestion to avoid entering the food delivery market due to the challenges it presents for fast food quality.

Keywords

💡Fast Food Business

A fast food business refers to an establishment that serves food quickly and typically at a low cost. It is a central theme of the video, which discusses various aspects of running such a business. The script mentions the thriving nature of the U.S. fast food industry, with revenues and client numbers indicating its popularity.

💡Location

In the context of the video, location is emphasized as a critical factor for the success of a fast food business. It is defined by the areas where potential customers are likely to be, such as malls, universities, and metro stations. The script stresses the importance of choosing a busy location to attract walk-in customers.

💡Health Regulations

Health regulations are legal requirements that ensure food safety and hygiene. The video explains that adhering to federal and state health codes is not optional and is crucial to protect public health. An example from the script is checking with the State Department of Licensing and the US Food and Drug Administration for compliance.

💡Menu Diversity

Menu diversity refers to the variety of food options offered by a restaurant. The script suggests that beyond classic fast-food items like hamburgers and fries, businesses should consider offering healthier, low-calorie options and using fresh ingredients to cater to changing consumer preferences.

💡Serving System

A serving system in a fast food context is the method by which orders are processed and food is served quickly. The video points out that efficiency in serving is key to the fast food experience. It is especially important for non-franchised businesses to develop a good serving system to compete with established chains.

💡Food Truck

A food truck is a mobile food business that offers the flexibility of changing locations. The video mentions food trucks as an alternative to a brick-and-mortar restaurant, highlighting the cost savings on rent and the appeal of mobile eateries to customers, despite the challenges posed by weather conditions.

💡Marketing

Marketing in the video is portrayed as a strategy to attract new customers and promote offers. It is a vital component for fast food chains to increase visibility and brand recognition. The script uses the example of McDonald's opening new branches frequently as part of their marketing strategy.

💡Employee Turnover

Employee turnover refers to the rate at which employees leave a company and need to be replaced. The video discusses the high turnover rates in the fast food industry and suggests offering competitive wages and benefits to retain good employees, which can lead to a more efficient and reliable workforce.

💡Food Spoilage

Food spoilage is the deterioration of food quality due to decay or contamination. The script mentions that spoilage can significantly impact profits, emphasizing the need for proper training and adherence to recipes to minimize waste and ensure food quality.

💡Customer Feedback

Customer feedback is the input received from customers about their experiences with a product or service. The video stresses the importance of listening to customers to understand their preferences and improve the menu offerings. An example provided is the story of a customer whose favorite dish was discontinued due to lack of popularity.

💡Menu Adaptation

Menu adaptation involves adjusting the food offerings to suit the tastes and preferences of different markets or regions. The script explains that as a business expands, it may need to modify its menu to cater to local tastes, as demonstrated by KFC's adaptation of its offerings in Japan and India.

💡Customer Service

Customer service in the video is depicted as a challenging aspect of the fast food industry, where dealing with rude or demanding customers is common. The script advises preparing for such interactions and training staff to handle them professionally to maintain a positive dining environment.

💡Profit Maximization

Profit maximization is the process of increasing profits by selling more products and minimizing waste. The video explains various strategies for this, including creating cost-effective recipes, buying ingredients in bulk, and offering limited-time items to boost sales.

💡Delivery Services

Delivery services in the context of the video refer to the practice of transporting food from the restaurant to customers' locations. The script warns against the potential downsides of delivery for fast food businesses, such as food quality degradation during transit and the impact on word-of-mouth marketing.

💡Pop-Up Location

A pop-up location is a temporary retail space used to test a business concept. The video suggests using pop-ups as a low-risk way to gauge customer interest and gather insights before committing to a full-scale restaurant. Examples given include local markets and food trucks as potential venues for pop-ups.

Highlights

Opening a fast-food restaurant in crowded locations like malls, universities, or metro stations is crucial for visibility and customer traffic.

Health regulations are paramount in the fast-food industry to ensure food safety and comply with federal and state standards.

Offering a diverse menu beyond classic fast-food options can attract a wider customer base looking for healthier choices.

Efficient serving systems are essential for fast-food businesses to meet customer expectations for quick service.

Operating a food truck offers the flexibility of mobility and can be a cost-effective alternative to a traditional restaurant.

Marketing plays a vital role in attracting new customers and promoting brand recognition in the competitive fast-food market.

Paying employees more than minimum wage can improve staff retention and overall business performance.

Food spoilage is a significant factor affecting profit margins, and proper training is necessary to minimize waste.

Creating a smart menu that combines ingredients efficiently and minimizes waste can significantly impact profitability.

Listening to customer preferences and adapting the menu accordingly is key to a successful fast-food business.

Adapting the menu to local tastes and cultural preferences is essential when expanding to new markets or countries.

Developing a thick skin to handle difficult customers is part of the fast-food business landscape.

Finding and retaining good employees in the fast-food industry can be challenging due to high turnover rates and competition.

Profit in the fast-food industry is often made by selling more products and minimizing waste through efficient operations.

Entering the food delivery market requires careful consideration due to the potential for food quality degradation during transit.

Testing the viability of a fast-food concept through a pop-up location can provide valuable market insights before fully committing to a storefront.

Transcripts

fifteen things you didn't know about

running a fast food business welcome to

a lox calm the place where future

billionaires come to get inspired

hallo ale Xers and welcome back to our

Channel today we're bringing you

something a little different

are you good at cooking have you ever

dreamed of being a chef or running your

own restaurant

maybe someday or maybe you want to take

a step back and do something less

pretentious like running a fast food

business if you've already started

looking at tips and tricks for opening

your own fast food restaurant you're in

the right place with revenues of one

hundred and ten billion dollars each

year and 50 million clients per day the

u.s. fast food industry is thriving and

shows no sign of slowing down if you are

new here welcome be sure to subscribe

and follow us on Instagram at Alex the

15 things you didn't know about running

a fast food business let's dive in

number one always try to open in a

crowded location like malls universities

touristy places or metro stations do you

remember where the last time you ordered

some fried food was chances are it

wasn't in the middle of nowhere or

hidden in a cool location that's because

it's all about location location

location we can't stress that enough

because it's so true

fast-food owners usually go by the rule

of thumb that you have to open a

restaurant on busy streets near tourist

attractions in shopping centers by

highways and why not near universities

schools or other places where there's a

lot of traffic even if you're competing

with others in a food court it's still

better to be in a mall than some other

location so be aware of that before

signing your leasing contract number two

health regulations need to be taken into

consideration at all times there's

nothing worse than spoiled fast food ask

any restaurant owner and they'll tell

you that federal and state regulations

are the worst but they're there for a

reason

you can't just

put people's health at risk and we

actually are very sure that it's not

your intention so before you even start

thinking of opening you have to verify

which are the rules for each state

you're in

usually by checking with your State

Department of Licensing and regulations

to see what you need to comply with plus

there's the US Food and Drug

Administration health code regulations

which might not be the coolest read ever

but it could save you from failure

before taking any steps into opening

your restaurant number three you don't

need to have the classic fast-food

dishes in your restaurant hamburger

cheeseburger a side of fries a soda and

that's it

well not really Wow there is nothing

wrong with the classic fast-food options

you can certainly offer something more

varied than that actually people want

more varied dishes like to have low

calorie options and a lot of people

choose restaurants that use fresh

ingredients so you can try to spice

things up and offer more healthy options

that can be done in an instant or there

are seafood fast food chains if that's

your thing

take Long John Silver's and Captain D's

for example don't forget that you can

also do your own market research first

to see what people in your area actually

want to eat number four if you don't buy

a franchise you need to come up with a

good serving system there is a reason

why people choose fast food and that's

because it's quick and easy chain

restaurants have mastered the art of

serving efficiently but especially at

the beginning you might struggle with

this aspect you have to be able to serve

all the dishes on your menu and get them

ready in a matter of minutes that's

relatively easy to do if you make sure

to use some or most of the ingredients

into more than a few items on your menu

and know exactly what to do step by step

after a customer orders trained

employees are happy employees and make

even happier clients they can also work

more independently and

work efficiently as part of a team

number five a food truck can be a

lifestyle of traveling and cooking

if you've ever dreamed of owning a

restaurant but don't

to spend all of your time in one place

why not get a food truck food trucks are

basically restaurants on wheels have to

respect the same health codes but don't

have as many employees Plus think of all

the money you could save on rent people

seem to love them whether it's ice cream

trucks frozen foods or fresh food that's

made on the spot however a big downside

can be the colder weather when people

aren't as happy to queue up on the snow

or heavy rain and your sales could take

a serious plunge but then again you can

move somewhere else so it's a win-win

number six marketing helps you bring in

new clients and promote offers there's a

reason why fast food chains are

literally everywhere and that's because

it's just their marketing strategy

that's how they managed to get their

brand seen and recognized globally think

about it about three new McDonald's open

every single day fast food chains need

to also be super accessible for people

and it shouldn't take you long to get

one in your city that's why there's no

problem if there are two three or more

branches in a single town of course

competitors see that as they open

restaurants as well not wanting to be

pushed out of the market and the cycle

goes on and on

number seven offering more than minimum

wage can bring you better employees fast

food chains have pretty high employee

turnover rates and let's be real it's

not the most glamorous job or one that

society values a lot but that doesn't

mean that you can't get or shouldn't

keep your employees hired for longer

periods and most importantly that you

shouldn't pay a good salary for starters

hire good people that can work

independently and that you can trust to

do their jobs efficiently secondly train

them to be aware that having a good team

on your side is priceless and thirdly

pay them well and pay them above market

rates unfortunately many employers fall

into the trap of hiring the wrong people

for minimum-wage jobs that end up

costing more since they make many

mistakes or leave early number eight

food spoils easily and that means less

profit for you yes you can have some

things frozen and can stretch the shelf

life for some ingredients but at the end

of the day you have to serve pretty

qualitative food to keep things going

costs with food are tricky since recipes

have to be followed accordingly and

ingredients to be properly measured for

example if cooks regularly use two

Tomatoes instead of one for each portion

even though the recipe says just one

you'll have to use more Tomatoes and

that means buying more Tomatoes that's

why employees should be properly trained

and have adequate materials at hand in

the kitchen to follow the instructions

number nine creating the menu can be in

your favor if you're smart about it this

has to be the most exciting and yet the

most difficult part we're talking about

creating your menu of course keep in

mind you might want to do lots of things

but there's the bottom line to consider

step one is to combine ingredients so

that many dishes can use them such as

eggs

chicken but also vegetables for example

step two is to buy in bulk because there

are better prices for bulk items and

since you've combined them wisely they

are also less likely to spoil since

you're going to use them all step three

is to keep in mind that food does spoil

easily but there are many wastes

reducing techniques that restaurants use

to make sure their bottom line isn't

going to be affected number 10 listen to

what your customers want and order

here's a story for you one guy eats the

same chicken soup at the same restaurant

each day for one year one day he goes in

orders and soon finds out that he was

the only one who ordered the dish so

they had to let it go

creating your menu shouldn't be

sentimental or about one customer it

should be about your best selling

products the ones that bring in the most

cold hard cash for that you have to

constantly improve your best selling

dishes make them easy to serve and give

people what they want

or rather what most of them want plus a

it's great to be known as the best place

to eat hamburgers in town then that

place who has many average options and

since we're talking about food make sure

to watch our 15 things you didn't know

about the food industry to get a better

insight on the matter number 11

depending on the country you're in the

menu will have to adapt as you grow your

market reach will grow as well sure if

you go from one state to another

especially if it's the neighboring state

you might not need to change your menu

too much however branching out into a

whole other country it is a different

story

take for example KFC who adapts really

well to what clients want in Japan

they're pretty popular and serve local

things such as dark meat use rice bowls

and even have home delivery in India

they have different vegetarian options

such as veg singer or potato crisps per

burger since around 42 percent of Indian

families are vegetarian number 12

customers can be very rude or whiny so

be prepared you'll have to grow a thick

skin if you want to get into this

industry hungry people are cranky and

impatient and being hangry is a real

thing changing orders talking loudly

talking on the phone while ordering at

the same time and so many more examples

sure that hardly justifies bad behavior

yet unfortunately you can't avoid these

people so it's better to be prepared and

make sure that it doesn't take you

completely by surprise

you can also instruct your staff to be

aware of this and act accordingly

especially if the other customers are

bothered by it as well and at the end of

the day remember that there will also be

nice and appreciative clients out there

so there's a silver lining

number 13 it's hard to find good

employees that will stick with you

hiring in this industry is pretty hard

and the earlier you're aware of this the

better

most big fast food corporations offer

benefit plans as an incentive for

prospective candidates as the demand for

workers continues to increase

it's mostly because a more healthy

economy means more opportunities for

people so benefits just don't cut it

anymore when they can find something

better in 2015

job seeker interests in the fast food

industry dropped by 50% compared to

employers demands so be prepared to be

extra careful when you hire people

prepare for departures and make sure to

offer an attractive salary and/or

benefits

number 14 profit is made by selling more

products and minimizing waste we already

mentioned how you have to choose your

menu wisely create recipes that use

basic ingredients that can be bought in

bulk and the fact you need to minimize

waste to maximize profits so you might

be wondering how do some restaurants

make money by selling very very cheap

items sometimes we're talking about a $1

burger well the answer is in quantity

like lots and lots of burgers that are

sold daily and since it's pretty cheap

to make one burger to begin with you can

also offer limited items such as extra

special sauces for Christmas or holiday

seasons and sell many other specialties

at very small prices for example fries

are very cheap to make as well

number 15 don't try to get in the

delivery wave sure by now you're

thinking I'll just make money by

delivering food and since not a lot of

fast food places make home deliveries

I'll be rich well not so fast

usually what happens with this type of

food is it tends to get cold fast and

once it gets cold it loses what made it

so good in the first place so it ends up

being not so good for business unless

the delivery location is nearby and the

total order price is more than around

$25 that's why most restaurants choose

not to do deliveries as it's also bad

for a word-of-mouth marketing and that's

a wrap on the fast food industry a lack

sirs thanks for watching and as always

we're curious what type of fast-food

restaurant would you open if you had the

opportunity let us know in the comments

Oh still here are you of course you are

here's your bonus fact number 16 you can

test your idea with a pop up location

ultimately the success or failure of a

business depends on the market and many

factors that you can't always control

but that doesn't mean you have to leave

it all up to chance and what smart

entrepreneurs do is test their idea

first and for fast-food a great test is

setting up a pop-up location that's less

expensive than leasing a space for a

restaurant local markets food trucks and

even some events are great places for

this you get a sense of how people react

how much you can sell and you get some

insight on what you need to do when you

actually decide it's time for a

storefront location thank you for

spending some time with us a Luxor's

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