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Renegotiate Your Lease – Communicate With Your landlord

Industry same store sales are down for full service restaurants. Technomic reports 51% of consumers are cutting back and 14% are eliminating restaurant visits. In an industry where 60-80% of restaurant sales are contributed by frequent guests it’s no wonder many restaurants are experiencing severe sales decreases. So what is one to do? Beyond what you may be working on, renegotiate your lease.

Rent is one of your highest fixed expenses. For years it was assumed rent was non-negotiable once a lease was signed. Like everything else, times have changed. According to Moody’s Investors Service commercial real estate values have dropped 22.8% through March versus the October 2007 peak, 21% versus prior year (May 2009), and further declines are expected. Bloomberg.com reports Starbucks began in January seeking 20-25% rent reductions from its landlords. In that same report, Quiznos reported as many as 90 stores received a reduction of 15-20% in rent. By combining declining market rents and declining sales your landlord is expecting to hear from you regarding your rent structure. Click here to read more »

Making Price Increases in a Down Economy

Q: The cost of food has been increasing over the last year. Times have been tough but it’s time for me to take a price increase on my menu. What is the best way to go about increasing our menu pricing?

A: The National Restaurant Association is forecasting an increase in wholesale food prices of 3.3% over 2010 while the USDA projects a 2.0-3.0% increase for all foods. Meats, pork, dairy, fats and oils are projected to have the highest increases. Click here to read more »

Four Simple Reports for Understanding Your Business

Q: When I step back and take a look at my business, I know I need to spend more time analyzing sales information. Where do I start?

A: The most underutilized tool in the restaurant industry is the Point of Sale System (POS). Reams of paper are used daily in support of a healthy business but those wonderful reports are underused in decision making to move the business forward. Analyze POS reports from both a macro and micro level and use various time parameters such as hours, days, weeks, months, and year over year. To begin, focus on the macro level reports and these four specific subjects. Click here to read more »

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