How to Start a Family Style Restaurant

Part 1 - How to start a Family Style Restaurant business - Background

Family style restaurants are those that design their menus and decor to attract families. Restaurants like Olive Garden, TGI Fridays, and Chili’s all fall into into this category. Meal portions are typically on the larger side so everyone can share and taste a variety of flavors. Family restaurants are likely to become community gathering places where people can take their children and meet other families who are looking for some wholesome fun.

Our guide is in 3 parts:

• Part 1 - How to start a Family Style Restaurant business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a family style restaurant?

Standard costs include health inspection fees, rent or mortgage bills, cost of supplies/equipment, and employee salaries. If you hope to start a franchise, your costs will be all-inclusive, and the headquarters will typically supply what you need.

What are the ongoing expenses for a family style restaurant?

Family style owners may have the following ongoing expenses:

• Food/drinks

• Rent costs

• Advertising material

• Employee salaries

• Equipment maintenance/replacement

Who is the target market?

Generally family style restaurants market to people who want to get out of the house more than they want to eat gourmet food. The average family is looking for dishes with which they are familiar. Parents especially have to make a lot of decisions throughout the day, and may not want a challenge when they walk into the restaurant. The decor should not be upscale. Families will be bringing in children who may not always be on their best behavior.

How does a family style restaurant make money?

Family style restaurants will mark up the cost of their food and beverages to turn a profit. Profit margins on checks are generally low, between 2 and 3% regardless of the type of restaurant you run. Generally, family style restaurants will serve alcohol though, which is an excellent way to make additional profit off each check.

How much can you charge customers?

Meals at family style restaurants are generally kept as affordable as possible. A single entree may cost between $12 and $18. Those that offer organic, farm-to-table options can charge between $20 to $30, depending on the type of food being offered. Specialty alcoholic drinks are generally sold at between $8 to $10 at family style restaurants.

How much profit can a family style restaurant make?

Profits are generally low. Assuming you make 2.5% profit per check, your profits will be $5,000 for every $100,000 worth of business you do. However, you will likely make enough to cover your costs (and your own yearly salary).

How can you make your business more profitable?

Owners can consider offering catering options for families and businesses who have special events. Owners can also consider participating in community events, or even opening up their own food truck with scaled-down offerings.

Day-to-Day and Growth

What happens during a typical day at a family style restaurant?

An owner of a family style restaurant has the following responsibilities:

• Managing employees

• Checking/ordering supplies

• Selecting menu items

• Marketing/advertising

• Performing quality control/safety inspections

What are some skills and experiences that will help you build a successful family style restaurant?

The owner should have experience in the restaurant industry, preferably participating in operations management of a family style restaurant. It takes organizational skills to be able to keep everything in order, and people skills to let others help when they can.

What is the growth potential for a family style restaurant?

Restaurants like Applebee’s and Buca di Beppo grow because they serve good food in a clean, friendly setting for reasonable prices. Trendier places may be more fashionable, but they tend to attract a far more fickle crowd. A trendy restaurant will need constant innovation to hold customers’ attention, but a family style restaurant can grow big by delivering consistent quality to busy families.

What are some insider tips for jump starting a family style restaurant?

Your budget is going to be extremely important—especially if you choose to franchise. You’ll need to open in a fairly busy area of a city if you want to succeed, but it will cost you. A single TGI Friday’s can cost up to $6 million to get it up and running. The good news is that you’re already starting with a trusted name that needs very little outside advertising to get people to come try.

There are ways to keep your budget low if you know where to look. Small restaurants can be opened for as little as $13,000 with the right ingenuity. There is plenty of space available across the US that can be snapped up at a lower price. Used or leased equipment can cut costs down as well, as can buying the raw materials on your own (e.g., tile, wood, etc). Also, consider foregoing certain costs, like a fancy coffee maker or even a soda machine until you know you’ll definitely need them.

Ensure that you have kid-friendly choices on the menu, and don’t skimp on the quality of these dishes. Children tend to adopt their favorites from a young age, and have an influence on where their parents take them. In addition, if you choose to open up a family style restaurant with large, sharable portions, remember that profits can be extremely small on these particular offerings. For example, a whole chicken generally takes a long time to cook, and yields very little in the way of profit margins. Many owners offer these dishes in hopes of hooking customers and creating a loyal clientele rather than making money (at least at first).

How and when to build a team

Family style restaurants rely on creating real relationships with their customers, so look for people who intend to invest in the restaurant, and who want to be an integral part of their neighbor’s lives. You’ll need to build a team as soon as possible to ensure your restaurant has a cohesive vibe.

Part 2 - Is a Family Style Restaurant business the right fit for you?

Part 3 - Action plan to launch your Family Style Restaurant business in 90 days