Name: Date: 04/28/2011 Course: BUS/210 Assignment: Developing Good Business Sense ? BUS/210 Week 8 Assignment Developing Good Business Sense There are three fast food restaurants that I chose as the businesses for this assignment; Sonic Drive-In, McDonalds, and Kentucky Fried Chicken. All three of these businesses are fast food restaurants. Sonic Drive-In is a curb side restaurant in which car hops bring the customer’s order to their car. McDonald and Kentucky Fried Chicken are both dine-in sit down restaurants that also offer a drive-thru window in car service.
The three businesses have similar operations involved in their inputs. The main goal of the employees is to make high quality fast food. While Sonic Drive-In prepares their menu items as they are ordered, McDonalds and KFC precook there items and use heat lamps to keep the food warm. McDonalds and KFC organize their employees in a very similar manner, while Sonic Drive-In is slightly different. McDonald’s and KFC utilizes the cook stay to prep and cook all the food items, the front counter and drive through staff run the registers, take order prepare drinks, and sack or tray customers’ orders.
Assistant Managers and managers help out in all positions and oversee all operations of the restaurant. Sonic Drive organizes their cooks and Managers in a similar way, the difference is that Sonic Drive-In does not utilize a front customer counter and register. Sonic utilizes a curbside menu’s and speaker system for customers to place their orders. Carhops replace the counter help normal seen at traditional fast food restaurants. The carhops deliver the orders to the customer’s car. Sonic Drive-In allows their customers to custom order their menu items any way the customer wants.
They also offer over 350,000 different drink combinations. That is something that is not offer by any other national fast food chain. The OMM costs of these three restaurants are very similar. The all three of them have operating costs such as rent, utilities, inventory, franchise fees, royalty fees and labor. I found it surprising that all three restaurants actually do not own the property that they are on. All three of them own the restaurants but rent the land that there restaurants operate on. With all three of these restaurants, the time of years and the weather have a huge effect on their sales volume.
The lower their sales volume the higher percent of operating cost that they have. During the winter, sales are at their low and in the summer they are at their high. Each restaurant experiences high profits during the summer months and low profits during the winter months. Operating cost such as inventory and labor are the biggest monthly expense from all three restaurants. Since all three of these restaurants belong to national franchise chains they are required to pay franchise fees and royalty fees each month. The manager at Sonic Drive-In stated that their franchise and royalty fees are determine by their net sales each month.
They are required to pay 15 percent of their net sales for franchise fees and 10 percent of their net sale for royalties. The manager at Sonic Drive-in also Stated that they are doing very good if they can profit 15 percent of their sales each month after paying all the expenses, and the best way to do that is by controlling the inventory and labor expenses. The managers of McDonalds and Kentucky Fried Chicken were unwilling to release any of their business information to me. While the manger of sonic Drive-In was willing to answer some question, they were very restrictive of the information they did give.
The way McDonalds, Kentucky Fried Chicken, and Sonic Drive-In all three conduct their business is very similar. They are designed to produce quality fast food at a price that is considered a value to the customer. They each use the small batch operating system to make customized products. In all three case their own customized food for individual customer orders. KFC makes small batches of fried chicken that is to be sold to individual customers. Because the time it takes to make the fried chicken, KFC cooks batches throughout the day so that it is ready when the customer orders it. This reduces the waiting time for the customer.
McDonalds precooks their hamburgers and makes the sandwiches when the customer orders to reduce the waiting time for their customers. Sonic Drive-In cooks the customer’s food when it is ordered, but states that none of their menu items take more than three minute to cook, therefore the wait time for the customer should not exceed three minutes. All three of these businesses focus on delivering fast quality food at an affordable price to keep their customers satisfied and insure they maintain repeat business. This is what keeps their sales value up and allows them to be a profitable business.