10 Things You Should Know About Restaurants

Whether it’s the latest openings and closings, the newest gossip and titillating revelations, or the weekly volley of scathing and laudatory reviews, we’re glued to restaurant news like peanut butter to a knife. We’ve even shown an inordinate interest in watching restaurants on television.

But beyond sensational stories and media coverage, what should we know about restaurants that we probably don’t? We asked Stephen Zagor, director of ICE®’s Culinary Management Program and an industry consultant with more than 20 years experience, to give us a rundown. Whether you’re a potential restaurant owner or just a dedicated diner, we think you’ll find some food for thought here. And it just might generate a little buzz of its own!

1. 90 Percent Inaccurate. We’ve probably all heard the statistics that 80 to 90 percent of all restaurants fail in the first year. For decades it was the dramatic, foreboding opening to management courses and industry speakers, and recently it was trumpeted on an American Express television commercial. You’d think the Surgeon General had issued a new warning: “Stop! Keep out! 90% will die in the first year.” But thanks to research by industry experts, we find that the failure rate is hardly so catastrophic. Realistically, 30 to 50 percent close by year two, and there are many other businesses with higher failure rates: plumbing businesses, grocery stores and (in case you wondered) hunting and trapping businesses. What are the top three reasons start-up businesses close? 1) undercapitalization; 2) owners who become dissatisfied with the lifestyle; and 3) owners with poor management skills.

2. Big Brother is Watching. Start primping---it’s your star turn, and we’re not just talking about a meal at Rocco’s. It’s becoming more and more likely that you’ll be on camera from the moment you enter a restaurant until you finish your crème brûlée, pay your check, and air kiss the maître d’ on your way out. Years back a few restaurants had their money areas monitored, and maybe the back door. Now it’s not uncommon for the entrance to be viewed to check guest handling at the desk; the tables filmed to help the cooks pace the meals; and the bar monitored to keep an eye on the honesty of the drinks staff. Owners and general managers may well be viewing these candid images (without sound, thankfully) from the comfort of their homes, courtesy of internet technology. (Now that Sex and the City’s been cancelled, what do you expect them to watch?)

3. Nothing’s Off the Record. Do you like your steak rare? Are you a two-cosmopolitan person? How much do you tip, and how often do you visit? These are just some of the things tracked by savvy restaurateurs using the latest database programs. Is it invasive? Maybe, but it’s all part of hospitality, and it can work in your favor. Restaurants routinely “code” guests in a way that alerts reservationists, managers, chefs and servers that you’re a VIP, a complainer, a regular, a friend of the house, an industry insider, a big or skimpy tipper, and myriad other designations. This can affect everything from where you’re seated to what freebies, like cookies, a special intermezzo, or a glass of grappa, show up at your table.

4. And on the Seventh Day They Rested. It’s pretty well known, but it deserves emphasis: Sunday is usually the day when the first-string kitchen and service staff is off getting massages or reintroducing themselves to their families. So if you like to wrap up your weekend with a dinner out, don’t be surprised if service and food are a notch or two lower than usual. And if it’s a high-profile restaurant run by a celebrity chef, don’t make your reservation on a Sunday if your hope to catch a glimpse of the worshipful one; he or she’s not likely to be on the premises.

5. A Big Tip About Tips. So you’ve had a grand dinner, and you leave your waiter a 23 percent tip, much above the 18 percent New York City average. But did you know that it’s pretty certain your waiter doesn’t keep it all, and in some restaurants he or she may take home closer to half? Waiters are the point people for much of the service staff’s pay. Some of your gratuity may go to the bus help, some to bar tenders, a few dollars to the host or hostess and, more surprisingly, the house may even keep some. And if all tips for the evening are pooled---a fairly common practice---your trusty server benefits even less directly from your largess. It’s tough out there in tip land, but don’t feel too badly; some waiters earn $130,000 and more a year, although that’s the exception. Are we advocating skimpier tipping? Absolutely not, nor is it acceptable to grill your servers about restaurant policy before deciding what to leave. Just put your guilt, ego, and other emotions aside and tip fairly and, for great service, generously.

6. Does a Good or Bad Review Make or Break a Restaurant? Contrary to popular belief, a multi-star review from a top newspaper or magazine doesn’t guarantee success. There are numerous super-achieving restaurants teetering on the brink of extinction. Here in New York City this last year alone showed us that even top-rated veterans like Lutèce, La Côte Basque and Lespinasse can lose their way. It costs a lot to be a legend, and costly standards need to be maintained every single day. There are whole months in the restaurant industry when it’s very difficult to make money no matter who you are. No doubt a good review gives a restaurant a bounce, and a bad review can be a lot to overcome, but in the end restaurants survive on a one-on-one relationship with their customers. Three stars still means competing with many other fine restaurants and kneeling to a demanding public.

7. Be Safe – Eat Out! Barely a week goes by without the media feasting on some grime-and-slime food-service horror story. Yes, restaurants can be careless, and serious illnesses like E. coli and hepatitis and less serious gastric upsets have been the result of bad service practices. But sensationalism aside, restaurants compare pretty favorably in cleanliness with your average household’s kitchen. Few home cooks understand even the most basic food-safety concepts, and that dinner at home could easily consist of mishandled, bacteria-filled leftovers stored in an unsafe refrigerator. All in all, the food-service industry does an excellent job of policing itself, and you can consider yourself in pretty good hands when eating out.

8. The $20 Bowl of Pasta. If a box of angel-hair costs $1.25 at your local market, and the restaurant charges you $20 for a dish of it… the math alone could hurt your appetite. Ingredients typically account for less than 30% of the selling price of a menu item. How else can a restaurateur pay for astronomical rents, decent salaries, and high-end equipment, plus a whole host of taxes, fees, insurances and licenses? Wipe your mouth on that lovely linen napkin and consider that it costs 12 cents to launder it. If you want to feel you’re getting the most for your money, consider staying away from items that typically command the highest mark ups: chicken, mussels, pasta, veggies and mixed drinks among them. (Follow the Atkins diet, and you might get more bang for the buck!)

9. The Rap on Coat Check. You stumble into your favorite restaurant on a howling cold night and hand over your parka, hat, scarf, 30-pound briefcase and assorted shopping bags to the lady at the coat check. She hobbles to a rack bulging with wools and shearlings and hoists your goods over her head in a move you recognize from Wrestlemania. Later in the evening you’ll ransom your belongings, but what really happens to that magnanimous tip you give? It’s quite likely that the restaurant actually keeps your money, simply paying the attendant a straight salary. Alternately, the attendant may be an independent contractor paying a substantial rent to operate the coat check. Either way, remember you’re probably not depriving a hard-working person of a buck or two if you choose not to check your wraps and bags, nor are you obligated to fork over the last of your savings as a gratuity if you do check. A dollar or two is customary and shouldn’t leave you with lingering guilt.

10. Guess What Business This Is? It’s the desire of many. It’s exciting. It’s glamorous. And believe it or not, just about anyone can get their foot in the door. Yes, it’s the restaurant business. Opening and running a restaurant is creative, frustrating, exhilarating, exhausting, and fun… and it can even be financially rewarding. If it’s your dream, just know what the risks are and go in armed with as much information, research and planning as possible. So, begin with plenty of money, say goodbye to your loved ones for a while, and learn as much as you can about the business before you start. Could we have a reservation for two, please?

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