Explain the challenges that a restaurant owner could face

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Reference no: EM133283277

Case: A multi-concept restaurant incorporates two or more restaurants, typically restaurant chains, under one roof. Sharing facilities reduces costs, including real estate and labor. Multi-concept restaurants typically offer a limited menu, compared with full-sized, stand-alone restaurants. For example, K-Mac Enterprises, Inc. operates a combination Kentucky Fried Chicken (KFC) and Taco Bell restaurant. The food preparation areas are separate, but orders are taken at shared point-of-sale (POS) stations. If Taco Bell and KFC share facilities, they reduce fixed costs by 30%. However, sales in these joint facilities are 20% lower than sales that occur in two separate facilities.

Question 1: Discuss what these numbers imply for the decision of when to open a shared facility versus two separate facilities.

Question 2: Explain the challenges that a restaurant owner could face when opening a multi-concept business.

Question 3: Explain your recommended plan to ensure the company is profitable.

Question 4: Discuss and describe the long run effect of this multi-concept proposal. (Hint: Think indifference principle.)

Question 5: Explain your recommended plan for budgeting to ensure cost-effective production.

Question 6: Explain how costs, such as real estate and costs of goods sold, may affect the organization over the next decade.

Reference no: EM133283277

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