According
to Wyckoff
and Sasser (1978, as cited in Reynolds & Dipietro, n.d.) chain restaurant
defined as two or more eating establishments at separate locations under common
ownership or related through other legal entities which provide food for
consumption on or off premises. While foodservice by contract management is a
part of the non-commercial or institutional segment of the foodservice sector
(Haywood & Wilson, 2003). It is a business between owners of establishment
and a management company that hired for coordinating and overseeing a contract
of operation.
The similarities of the managing chain restaurant and foodservice by
contract is both of the operations system have a contract. The chain restaurant
has a contract between franchisor and franchisee. For example, restaurant
franchise such as McDonalds that have many chain over the world. The
foodservice management also has a contract between owners and management
company. For example, a hospital in Malaysia such as Hospital Universiti Kubang
Kerian (HUKM) hired BESTA as their management company to run their foodservice
operation.
There are many different between chain restaurant and foodservice
management contract. First different is the management of the operation itself.
The chain restaurant manages their establishment by following their restaurant
owner leveraging brand recognition. They must follow the standardized business
methods and practices exactly as their owner. However, the foodservice
management contract did not have specific business methods that same to the
owner. They only need to meet owner obligations in order to deliver the
objectives required from the contract.
Other than that, the different of both operations will see in owner’s
contribution in the operation. The chain restaurant has more contribution of
the owner in operation. This is because to ensure that the same identifiable
physical attributes and service offerings. The chain operation also need follow
the owner standards in product and service that provided to the customer.
However, foodservice management contract has less contribution of the owner in
the operation parts. The owner only aware about the objectives of the operation
must achieved which is building good relationship between customer and
provider.
The chain restaurant organization have the advantage of economies of
scale regarding material and supplies, with vast market reach generated by
brand recognition allowing for quick penetration into new markets (Muller &
Woods, 1994). It also increase in customer preference and patronage, higher
emotional ties to the brand, trusty and loyalty. But, for foodservice
management contract has different benefit which is streamlined operations such
as improvement in business process efficiency with automated workflow. Owner of
the operation will get benefits from the management contract which is better
performance management and risk mitigation. The management contract also will
get benefit which is management fees that owner pay for them.
The last difference between both operations is the advantages of the
operation. The disadvantage of chain restaurant are operating a chain restaurant
can be more stressful, need a time to recover when particular chain restaurant
experience negative publicity and the cost of a chain restaurant is expensive
than set up our own business. However, the disadvantages of foodservice
management contract are inadequate resources may occur, lack of experience in
dealing with customer if false in hiring management company and failure to
monitor and manage retained risks will lead to owner loss and bad image of
organization.
References
Haywood, K. M. & Wilson,
G. (2003). Chapter 3 – Contract
Foodservice. Retrieved from http://www.download-it.org/
Reynolds, D. & Dipietro, R. B.
(n.d.). Chain restaurant management. Retrived
from http://webpac.lib.tku.edu.tw/lib/item
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