Running a restaurant can be costly, stressful and chaotic. It’s very easy to do everything right and still to see your business fail. This is a competitive world and it’s one where a little bad luck can destroy you.
These days restaurants and restaurant chains face all kinds of difficulties, much of which they are in full control of. But there are a few things that are left to Lady Luck and if she’s not smiling kindly on them then these problems can destroy them.
The more popular a restaurant is, the more food and drink it will get through. But it’s hard to gauge that popularity and they never quite know how much they are going to use. This causes all kinds of problems because food and drink is perishable and often needs to be served fresh. So on the one hand, if they buy too much then they will lose a lot of money and could offset any profits they make for the day, but if they don’t buy enough there then will be lost earnings and unhappy customers.
Fast food chains get around this problem by cooking from frozen and by bringing in their food from nearby warehouses and kitchens. There is little risk of lost food. Restaurants, on the other hand, try to cook from fresh and struggle with many aspects.
For the wine and beer, they need to store at low temperatures. For the meat and vegetables, they need to be kept chilled and fresh. Then there are dry ingredients to consider, as well as pre-prepared dishes. It’s no wonder why the vast majority of restaurants fail and yet fast food chains like Chick-Fil-A just keep rising in value.
A legal case, whether it’s legitimate or not, can break a restaurant. Wendy’s is a great example of this. Over a decade ago a couple were found guilty of trying to commit fraud by planting a finger in Wendy’s chili and then trying to claim against the company. It was fake and they were eventually arrested and charged, but that didn’t stop the story from breaking and to this day people still remember it and still think it was true.
Wendy’s are said to have lost millions in revenue because of that. And then you have the slips and falls. It just takes one careless worker to mop the floor and forget to leave the sign, and a local chain could be out tens of thousands. Restaurants see legal claims for burn injuries, breaks, sprains and more. And rightly so, because if they are liable then they should pay, but it means they are in a position where a single slight mistake on behalf of one of their minimum wage workers is enough to break them.
Fast food chains need to establish a brand and then keep it going. This requires them to pump billions into advertising every decade just to keep their name in the public eye. For the most part, this all works and they continue as normal, but with so many ads and so many companies working on the marketing side, there will inevitably be mistakes. In some cases those mistakes can end a company, which means they are paying for ads that end up costing them in lost revenue and fines.
All brands do it and it’s not exclusive to fast food, but this is where the big losses land. McDonalds have wasted a fortune on new food launches that didn’t pay off, from healthy food to pizzas and hotdogs—they all flopped and they cost them a fortune. Then you have advertising campaigns that inadvertently (and sometimes intentionally) give the public a negative view of the company, such as those launched by Carl’s Jr and Hardee’s.
Social media is causing all kind of issues for big brands and fast food chains are at the heart of it. They need to hire young, cheap workers, often ones without experience and without training. They don’t really want to be there and they don’t really care about their job. This can cause chaos for the company.
In the past there have been issues of fast food workers filming themselves spitting on and otherwise fouling the food they are serving, as well as videos of these workers insulting customers, exposing things the brands don’t want to be exposed and more. They end up losing a job they didn’t care about in the first place and a wage that was in the thousands, and the brand ends up losing revenue in the millions.
Then you have the hygiene problems, which have been a particular issue for Chipotle. They are responsible, let’s not take that away, but it’s very hard for them to keep track. All the hygiene training and quality food in the world won’t stop a worker from forgetting to wash his hands after using the toilet, or a kitchen employee putting food back on the line after dropping it on the floor.
Contaminations can spread from single careless workers in the restaurant or at the preparation centers and while the brand can’t really stop this from happening, they are the ones that will suffer when the outbreaks occur.