Formula restaurant

A formula restaurant is a subcategory of formula retail business. It is characterized as a restaurant regulated by contractual or other arrangements to standardize menus, ingredients, food preparation, interior/exterior design and/or uniforms. Formula retail is a type of sales activity required by contractual or other arrangements to offer a standardized array of services and/or merchandise, trademark, interior/exterior design and/or uniforms.[1]

The definition often refers to "substantially identical to a specified number of other restaurants," a number which may vary.[2][3][4]

Difference between a formula restaurant and a "chain"

There is considerable financial overlap, but "chain restaurant" refers to ownership or franchise, whereas "formula restaurant" refers to the characteristics of the business. A formula restaurant doesn't need to be a chain but it generally is. Nevertheless, most codified municipal regulation relies on definitions of formula restaurant or formula retail (although non-codified restrictions will sometimes target "chains").

Some chain restaurants are not considered formula restaurants because the chain does not maintain a formulaic or monolithic character at different locations, or has few enough locations that they are substantially dissimilar to what is commonly considered to be a formula restaurant. In addition, the term "chain restaurants" generically describes a business arrangement, whereas formula restaurants describe the aesthetic characteristics and customer experience.

Formula retail

Formula restaurants are a subset of formula retail businesses.[1]

Disguised formula restaurants

In some cases, a chain may establish a set of formula restaurants but attempt to present each venue as unique. This is common with hotel chains, which rely on centralized meal planning and management, but still want to avoid the appearance of their in-house dining facilities being formulaic. Generally, the local manager is encouraged to modify the corporate menu so as to present the appearance of a unique character, while still building the menu around a corporate model (e.g., several entrees based on frozen chicken breast in accordance with a corporate formula).[5][6] Nevertheless, it is often possible for the consumer to identify disguised formula restaurants by their marketing indicator; e.g., intense use of staged photographs on the menu, frequent use of marketing buzzwords (or marketing terms) such as "add" listed under multiple menu items.[7]

Criticism

Cultural

  • Concerns have been expressed that formula restaurants harm the unique characteristics of cities and towns.[8][9][10]
  • Formula restaurants tend to be marketing centric or based on perception.

Economic

  • Formula restaurants harm local independent businesses.[8][11]
  • Formula restaurants (at least formula fast-food restaurants) rely on an economic model that encourages the use of disposable tableware.[12] This in turn relies on training consumers (adults and children) to bus disposables, but not durable tableware.
  • Formula restaurants create a negative economy in waste [12] and food distribution, in part to support the business model of the controlling corporation.
  • Formula restaurants accelerate gentrification but deteriorate quality of life.[11]

Formula restaurant restrictions (and formula retail restrictions in general) have been challenged as an impermissible restriction on interstate commerce (in the US), as exceeding municipal zoning authority,[13][14]

Restrictions are generally held permissible if they are not arbitrary, and directed to the character of the business and not the ownership.[15][16][17]

Response and regulation

Informal restrictions and restrictions not defining formula retail or its equivalent

  • Ketchum, Idaho has traditionally restricted franchise restaurants through the zoning approval process. The city has no formal formula restaurant ordinances.
  • Iceland has informal health restrictions that discourage some formula restaurants.[18]

Examples of formal restaurant and formula retail restrictions

  • Malibu, California compiled a list[19] of municipalities that restrict formula retail.
  • Bermuda has banned all franchised restaurants in the country (Prohibited Restaurant Act of 1997).[20]

See also

References

  1. 1 2 Town of Jaffrey Planning Board Proposed Zoning Changes Summary, Public Hearing January 22, 2018, Town of Jaffrey, New Hampshire (.pdf)
  2. ↑ McCall, ID proposal to amend restriction from "one or more" to "five" (.pdf)
  3. ↑ San Francisco retail use (11 or more)
  4. ↑ Port Townsend (14 or more)
  5. ↑ Building a Successful Hotel Restaurant, Hotel F&B, 4-Jul-2007
  6. ↑ First Hospitality Group's Justin Harkey wants hotels to create a new recipe, Hotel Management 13-Apr-2017
  7. ↑ Restaurant menus and pictures: Yes or No?, gritsandgrids.com
  8. 1 2 The Impact of Chain Stores on Community, Institute for Local Self-Reliance (ILSR)
  9. ↑ ILSR report on Sanibel, Florida business restrictions
  10. ↑ How do chain restaurants embody gentrification? Marketplace 5-Dec-2014
  11. 1 2 Hyper gentrification and the Disappearance of Local Businesses, governing.com
  12. 1 2 www.skoozeme.com/issues/dontbus.html
  13. ↑ The Park at Cross Creek v. City of Malibu Calif. Ct. App., 2nd. Dist. Filed 21-Jun-2017 (.pdf)
  14. ↑ Chain Store Ordinance Resurrected From the Dead, The Malibu Times 1-Nov-2017
  15. ↑ California Appeals Ct. upheld San Diego ordinance restricting formula retail businesses in Coronado from Vermont Planners Association (.pdf)
  16. ↑ Coronado challenge to Formula Business Restrictions, Institute for Local Self-Reliance
  17. ↑ Coronadans Organized for Retail Enhancement v. City of Coronado, 2003 Cal. App. Unpub. LEXIS 5769, Calif. Ct. App., 4th Dist. Filed 13-Jun-2003 (.pdf)
  18. ↑ webcam of "the last McDonald's in Iceland"
  19. ↑ Analysis of Cities with Formula Business Ordinances, Malibu (.pdf)
  20. ↑ (dailymeal slideshow listicle)
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