Excel Essay

1241 WordsOct 21, 20135 Pages
Restaurant Risk Management By Christopher Ketcham, PhD, CPCU, CRM, CIC, CFP® Restaurant Risk Management Ketcham According to the National Restaurant Association, the restaurant industry generates $1.7 billion in sales on a typical day. That number is expected to increase during the month of February, as the association estimated 70 million people dined out on Valentine’s Day this year. So what does that mean from a restaurant’s risk management perspective? Restaurants must understand their strategy and what their strategy means to risks associated with it. They must also understand risks generally associated with restaurants. Restaurants face several types of risk: operational, strategic, and economic. Operational risks are risks associated with the facility itself. Slips and falls are a common problem both for customers and employees. People who drink too much alcohol or minors who are served alcohol can present problems with the law, licensure, and lawsuits. Workers may injure backs, cut fingers, and drop hot liquids. Kitchens are the most common place where fires begin, and buildup of grease is a common cause of fires. Many operational risks associated with restaurants can be controlled or mitigated through sound risk management strategies such as rigorous cleanliness practices, employee education, protective devices, and sprinkler systems for cooking equipment. Strategic risk is more complex. Strategic risks include management decisions regarding new products, emerging competition and planning issues. Risk to reputation can be associated with almost any peril or event. Recent outbreaks of food-borne illnesses have devastated food suppliers and restaurant chains even when confined to one location. While such outbreaks are devastating to single-location restaurants, they can ripple through an entire chain, causing loss of customer traffic. Even false reports

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