StatHeads, Help Please for Research

[RBA]

Hello,

I know many of you guys like Stats. I am doing a basic Research class and part of the class is an assignment to make up are own business study.

I am in a group and we were thinking the study would be:

The feasibility of opening up a White Castle in San Diego.

If anyone have ideas on what type of research to do or if you don't mind me PM or Emailing for help please let me know.

I think the biggest help I would need is when it comes to crunching the numbers and making graphs.

Thanks

Rob

[RedsManRick]

A few things you'll want to look at:

- Costs to open
- Costs to operate (including franchising fees)
- Expected revenue (which is probably highly dependent on location)
- Saturation of the local fast food market (is there sufficient demand?)

The specific numbers probably aren't that hard to come up with. The challenge of the exercise is to understand what your considerations, you business questions, should be and how you should model your assumptions. The actual data comes last.

[RBA]

Thanks, the group has decided to go in a slightly different direction. But not much. We are going with the reception/feasiblity of opening up an IN N OUT in Hawaii. That way we can address some cultural issues too. But all your inputs will carry over.

[remdog]

Which ever chain you pick you will need to 'taste test' many, many burgers. It will be a hard job but it's necessary.

Rem

[remdog]

OK, to be somewhat serious:

I recently dropped into a Five Guys location in Newport Beach to try them for the first time. Their migration to California from the East Coast is somewhat analogous to your study.

First of all, I'm not a big fan of In-and-Out but they have gained a cult following in SoCal. As such, a company invading their territory will need to present a superior product at, preferably, a similar or even better price point.

I had read some reviews about Five Guys and was lead to believe that it was greasy. I was at the Food Court at Fashion Island so there were no peanut shells on the floor or that type of thing that they are noted for.

I opted for a cheeseburger (two patties with melted cheddar cheese in between, 840 calories according to their board). I wanted to taste the beef so I ordered the burger 'rare' with just a little mayo. When the counter person read the order back to me he left out the 'rare' part. I reminded him of that and he, once again, ignored it. I also ordered a small fries. Total bill: $9.68 (I didn't order a drink).

I timed how long it took from submiting the order until it was ready: just over 11 minutes. Not real good for fast food, IMO.

The burger and fries were delivered in a plain brown paper bag and I sat down at a table and opened it up. Though I had ordered a small fries (which came in a paper cup) I will say that they delivered a lot more than I expected---the cup was full but there were a lot of fries litered all over the bottom of the bag as well. Unfortunately, the fries were mushy on the outside and also on the inside---they lacked any flavor what so ever.

As for the burger, it wasn't rare. It was overdone and it wasn't greasy because it had been so over cooked that it had the texture of woodchips. I ate about half of it and tossed the rest in the trash. $10.00 for that!?! No thanks.

(As a side note: RBA, I think we've had a bit of this conversation before but my favorite burger joint in SoCal is Fatburger. Five Guys took over the location that used to be Fat Burger at Fashion Island and, when I ordered a rare burger at Fat Burger, I got a rare burger. To me, that's customer service.)

To me, if you are going to 'invade' enemy territorry, treat it like a military operation---something that I think you know something about. Investigate the market. Casually chat with the locals to see what they will tell you---find out what they like and don't like. Where can you improve the product and/or services? What kind of things would they like to see added to the menu? How can you motivate the personel so that they are friendly, and gracious to the customers, and totally buy into the product, service and company. How do you get the team to bond and act as one? That's very important in a business like this (just like the military).

I'm sorry about being so long winded about this but the food buisness does interest me and so, when I'm in a new restaurant, these are the kinds of things that I check on. After that it's about what your costs are, where your location is going to be, marketing expertise, getting your name known, etc.

Rem

[RFS62]

Fat Burger is to In-and-Out Burger as Saks 5th Ave. is to Wal-Mart, IMO.

BTW Rem, I've tried 5 Guys in several locations and never had a bad burger like the one you described. And their fries are done in peanut oil, I believe, and they always do give you a lot more than you need. Usually not the way you described them though, in my experience.

Peanut shells on the floor of resturants has gone the way of the dinosaur. Too many slip and fall lawsuits.

[RFS62]

Agree totally with Rem. Get your competitive analysis done first. Then work off that data.

[gonelong]

Originally Posted by RBA

Thanks, the group has decided to go in a slightly different direction. But not much. We are going with the reception/feasiblity of opening up an IN N OUT in Hawaii. That way we can address some cultural issues too. But all your inputs will carry over.

Demographics of the customers in the area.
Traffic patterns

GL

[reds1869]

Originally Posted by gonelong

Traffic patterns

That is a huge factor. Open that bad boy up on the wrong side of the road for the time of day you want business and your restaurant already has one foot in the grave.

[remdog]

62: I realize that any restaurant can have a bad day and this is the first time I've tried them. They've been open about 2 months yet the employees seemed disinterested and I couldn't see a manager on the floor. (famous shrug)

I'll eventually try them again and we'll see. Still morn the passing of Fatburger from this location. I think the franchise owner for Orange County was having some financial problems and The Irvine Company (which owns and manages Fashion Island and much of Newport can be bruttal when they smell blood in the water. Another tip for RBA: make sure you are clear on the terms of any lease and if you're not comfortable with it, even downstream, walk away.

62: I'm curious if you found Five Guys burgers to be 'greasy' or 'juicy'. To me, there is a distinction. Just wondering what you thought.

Rem