Bankruptcy Situation Model in Small Business: The Case of Restaurant Firms

The purpose of this paper is to describe and discuss the current bankruptcy prediction models. This is done in the context of pros and cons of proposed models to determine the appropriate factors of failure phenomenon in cases involving restaurants that have filed for bankruptcy under Chapter 11. A sample of 11 restaurant companies that filed for bankruptcy between 1993 and 2003 were identified from the Form 8-K reported to the Securities and Exchange Commission (SEC). By applying financial ratios retrieved from the annual reports which contain, income statements, balance sheets, statements of cash flows, and statements of stockholders’ equity (or deficit) to the Atlman’s mode, Springate model, and Fulmer’s model. The study found that Atlman’s model for the non-manufacturing industry provided the most accurate bankruptcy predictions.

Managers' Perception of Alcohol Service Training Programs

In order to serve alcoholic beverages in a responsible manner, most managers turn to alcohol server training programs to provide effective standardized training for the alcohol server. Whether or not the programs are perceived by hospitality managers as effective has not been established. The author presents the results of a study of Oklahoma hospitality managers who perceive alcohol server training as becoming less effective.

Fresh Food Vending Trends and Practices

Fresh food vending represents $1.5 billion in sales each year in the United States. The implications for a better understanding of fresh food vending are significant in terms of profitability and improved market share for vending operators. Of equal importance is a better understanding of the significance of the route driver on the overall fresh food vending operation. Developing a better understanding of this area of the food service industry will help vending operators increase profits and provide better product choices to consumers

Shopping for Computer Restaurant Management Systems

A myriad of computer management systems are available for the restaurant business. The author discusses all aspects of evaluating, purchasing, and using such systems for a restaurant operation.

Food Service Operations in the Cruise Industry

Food service on a cruise ship presents some unique challenges. A review of food service in the cruise industry is presented along with some ideas on the future. The case is made for a change in traditional operations with a move toward greater use of computer-driven management techniques.

Growth of the Food Service Industry

The food service industry has come into its own recognition as a growing segment of the total food market. The author looks at the recent expansion of the industry in volume, diversification of restaurant types, and menu variety

The "Beef" about Beef

The grading of beef has become a controversial issue, with both government and the cattle industry working to ensure uniformity. The author contends that meat quality, and the resulting tenderness, juiciness, and flavor desired by consumers, is being threatened by such pressures and actions.

Menu Analysis: Review and Evaluation

In the article - Menu Analysis: Review and Evaluation - by Lendal H. Kotschevar, Distinguished Professor School of Hospitality Management, Florida International University, Kotschevar’s initial statement reads: “Various methods are used to evaluate menus. Some have quite different approaches and give different information. Even those using quite similar methods vary in the information they give. The author attempts to describe the most frequently used methods and to indicate their value. A correlation calculation is made to see how well certain of these methods agree in the information they give.” There is more than one way to look at the word menu. The culinary selections decided upon by the head chef or owner of a restaurant, which ultimately define the type of restaurant is one way. The physical outline of the food, which a patron actually holds in his or her hand, is another. These descriptions are most common to the word, menu. The author primarily concentrates on the latter description, and uses the act of counting the number of items sold on a menu to measure the popularity of any particular item. This, along with a formula, allows Kotschevar to arrive at a specific value per item. Menu analysis would appear a difficult subject to broach. How does a person approach a menu analysis, how do you qualify and quantify a menu; it seems such a subjective exercise. The author offers methods and outlines on approaching menu analysis from empirical perspectives. “Menus are often examined visually through the evaluation of various factors. It is a subjective method but has the advantage of allowing scrutiny of a wide range of factors which other methods do not,” says Distinguished Professor, Kotschevar. “The method is also highly flexible. Factors can be given a score value and scores summed to give a total for a menu. This allows comparison between menus. If the one making the evaluations knows menu values, it is a good method of judgment,” he further offers. The author wants you to know that assigning values is fundamental to a pragmatic menu analysis; it is how the reviewer keeps score, so to speak. Value merit provides reliable criteria from which to gauge a particular menu item. In the final analysis, menu evaluation provides the mechanism for either keeping or rejecting selected items on a menu. Kotschevar provides at least three different matrix evaluation methods; they are defined as the Miller method, the Smith and Kasavana method, and the Pavesic method. He offers illustrated examples of each via a table format. These are helpful tools since trying to explain the theories behind the tables would be difficult at best. Kotschevar also references examples of analysis methods which aren’t matrix based. The Hayes and Huffman - Goal Value Analysis - is one such method. The author sees no one method better than another, and suggests that combining two or more of the methods to be a benefit.

Management Compensation as a Value-Added Competitive Method for Casual Theme Restaurants

The primary purpose of this study is to propose that the management compensation package at Outback Steakhouse is a value-adding competitive method. Specifically the research focused on a survey of general manager's altitudes in regards to their intentions to seek out new employment and the effect of the compensation plan provided by Outback Steakhouse on the managers' intentions. This research will provide insight into the use of compensation packages and programs as proactive, value-adding competitive methods in retaining good quality managers it casual theme restaurants.

Relationship between Changes in Cash Flow and Investments in Publicy Traded Restaurant Firms in the United States

This research investigated the relationship between investments in fixed assets and free cash flows of U.S. restaurant firms while controlling for future investment opportunities and financial constraints. It also investigated investment and cash-flow sensitivity in the context of economic conditions. Results suggested that investments in small firms (with higher financial constraints) had relatively weaker sensitivity to cash flows than investments in large firms (with higher sensitivity). Controlling for economic conditions did not significantly change results. While the debate over sensitivity of investments to cash flows remains unresolved, it has not been explored widely in industry contexts, especially in services such as the restaurant industry. In addition to its contribution to this literature, this paper provides implications for cash-flow management in publicly traded restaurant companies.

Replacing Place In Marketing-Mix Strategy For Hospitality Services

In the conventional marketing mix, a focus on physical distribution handicaps the use of "place" in planning marketing strategy for hospitality services. To replace it, the article introduces a new group of variables called "performance," which focus instead on availability and accessibility. The author does not intend to offer detailed descriptions of specific variables but rather to suggest associations and relationships among issues and options in marketing hospitality services that may not previously have been recognized, and to address the diverse segments of the hospitality services industry in general, including lodging, food, beverage, private club, cruise ship, and travel-destination services.

Qualitative Responses to Pre-employment Drug Testing in the Foodservice Industry

Employee substance abuse has long time been a topic of concern for the hospitality industry. Operating under the assumption that drug-users, and associated undesirable behavior, can be eliminated from the hiring process, many operations have adopted pre-employment drug-testing policies. Despite being represented across the industry as a major target of effort and resources, it is suggested that the perceived sensitive-nature of the subject has somewhat hindered access to qualitative information. The purpose of this research was to assess and explore the attitudes, beliefs and perceptions of both management and employees in the foodservice industry regarding pre-employment drug-testing and its impact on work performance. Through the use of a phenomenological survey, qualitative data was collected then used to identify themes in participants’ perceptions of such screening policies and their effects. Results and implications of these findings are discussed.

The Tax Reform Act of 1986: Impact On Hospitality Industries

In her discussion - The Tax Reform Act Of 1986: Impact On Hospitality Industries - by Elisa S. Moncarz, Associate Professor, the School of Hospitality Management at Florida International University, Professor Moncarz initially states: “After nearly two years of considering the overhaul of the federal tax system, Congress enacted the Tax Reform Act of 1986. The impact of this legislation is expected to affect virtually all individuals and businesses associated with the hospitality industry. This article discusses some of the major provisions of the tax bill, emphasizing those relating to the hospitality service industries and contrasting relevant provisions with prior law on their positive and negative effects to the industry. “On October 22, 1986, President Reagan signed the Tax Reform Act of 1986 (TRA 86) with changes so pervasive that a recodification of the income tax laws became necessary…,” Professor Moncarz says in providing a basic history of the bill. Two, very important paragraphs underpin TRA 86, and this article. They should not be under-estimated. The author wants you to know: “With the passage of TRA 86, the Reagan administration achieved the most important single domestic initiative of Reagan's second term, a complete restructuring of the federal tax system in an attempt to re-establish fairness in the tax code…,” an informed view, indeed. “These changes will result in an estimated shift of over $100 billion of the tax burden from individuals to corporations over the next five years [as of this article],” Professor Moncarz enlightens. “…TRA 86 embraces a conversion to the view that lowering tax rates and eliminating or restricting tax preferences (i.e., loopholes) “would be more economically and socially productive.” Hence, economic decisions would be based on economic efficiency as opposed to tax effect,” the author asserts. “…both Congress and the administration recognized from its inception that the reform of the tax code must satisfy three basic goals,” and these goals are identified for you. Professor Moncarz outlines the positive impact TRA 86 will have on the U.S. economy in general, but also makes distinctions the ‘Act will have on specific segments of the business community, with a particular eye toward the hospitality industry and food-service in particular. Professor Moncarz also provides graphs to illustrate the comparative tax indexes of select companies, encompassing the years 1883-through-1985. Deductibility and its importance are discussed as well. The author foresees Limited Partnerships, employment, and even new hotel construction and/or rehabilitation being affected by TRA 86. The article, as one would assume from this type of discussion, is liberally peppered with facts and figures.

Agency Costs, Bankruptcy Costs and the Use of Debt in Multinational Restaurant Firms

The purpose of this paper is to understand whether multinational restaurant firms (MNRF’s) have higher agency and expected bankruptcy costs. Given this expectation, this may have an impact on the amount of debt incurred by MNRF’s. Overall, the findings are consistent with the existing literatue in terms of the positive relationship between MNRF’s and agency and bankruptcy cost. However, it was found that MNRF’s also have more total debt. This is surprising given the higher agency and bankruptcy costs. The importance of this research is that there may be considerations other than agency and bacnkruptcy costs affecting the capital structure decisions of MNRF’s.

Competencies of a Recreational Food Service Manager

Recreational food service is a newly-identified industry segment. It represents over 3 percent of the total industry and has its own specific competency requirements, in addition to core food service management competency needs. The education, training, and development needs for professionals in this industry segment have not as yet been ascertained. This article is an effort to establish a benchmark for future research in this area.