What's a Fair Price for Dinner?

[Rail Paul]

Rosie makes an interesting observation about Casa Bianco in Whitehouse, that the price has gotten ahead of itself. Rosie and I independently came to the same conclusions about Sofia's in North Caldwell a while back.

How much more will you consider paying for a filet of sole, served with haricot vert, for example, if the restaurant has more ambiance? Or, the waitstaff is more polished? Or, the tables are a little bigger? Keep the analogy to a BYO to make it easier to isolate the variables.

At Sofia's the average entree went from $11 for $20, sides went up $2, specials doubled ($13 to $25). What had been a nice pleasant evening for $35, became a $65 event. For the same price, I can have a much more pleasant dinner at Bellissimo's around the corner.

Superb food presentation makes a difference, as does better plating (and plates), but the atmosphere definitely makes some difference. How would you weight the relative contributions of food, ambiance, service, etc?

[Double 0]

Food 60%

Ambiance 20%

Intangables 20% (when I go to this place I know I'm special)

Wine selection is very important, but since we're talking BYO I know I'm not overpaying.

[spqr]

Food - 85%

The rest - 15%

At Sofia's, I'd be interested to know what else "improved" along with the prices. Was it the same food, prepared in the same way? By the same person? I'd be pretty pissed off that prices had increased so much for no apparent reason, and decide not to patronize the place for just that one reason irrespective of the quality of the food.

[Rosie]

The problem with La Casa Bianca was that the pasta dish was $24 for pasta that costs 8 cents and 6 shrimp which may cost $4 and I am being generous. It's a neighborhood storefront with inferior service and although this entree was good and the portion was big I felt that they were pushing things with charging that price. BYO's have a harder time making ends meet because they don't make money on the liquor. However, they should keep their prices in a realistic range.

[Lreda]

BYO's have a harder time making ends meet because they don't make money on the liquor.  However, they should keep their prices in a realistic range.

As you might know I have a big problem with the thinking that BYOB"s have a more difficult time turning a profit without the benefit of a liquor license. First of all, a license in Morris Co and I would assume Essex Co runs aprrox $150,000 to $300,000. This is a big risk we take on to create a dining experience. The insurance costs approx $10,000 to $30,000 per year for protecting yourself against someone who has had 5 drinks somewhere else and lives 1 block away and you're not able in 5 minutes to realize he's half in the bag til he knocks it back that he's already wacked. He gets in his car and drives the 2 blocks when the police pull him over and ask where he was. " Officer, I just left An American Grill " Opps!!

I read how people who frequent BYOB's are upset proper glasswear isn't provided. Why isn't it? Good Reidel is easily aquired. Unfortunately, based on experiences in eating in BYOB's, on the average, service is slacking when compared with a restaurant that has a liquor license. The reason I believe is because servers aren't tipped on the wine or beer or hard liquor that is allowed in these restaurants. I've made a decision on what type of restaurant I want to run but I don't think not having a license is a detrement at all. Shit, you get home a lot earlier than some putz like me.

[tommy]

lou, are you suggesting that profit margins are about equal for BYOs and licensed restaurants in NJ, generally speaking?

[ngatti]

You make an excellent point re tipping waitstaff in BYOBs, Lou. Only recently did I realize (smack self on head) that the waitstaff providing corkage should get tipped beyond what the check actually shows.

Nick

[Lreda]

lou, are you suggesting that profit margins are about equal for BYOs and licensed restaurants in NJ, generally speaking?

Tommy, to be honest there's a goddamn bigger profit for BYOB's. Just on the top my head they're closed earlier than we do. Less people to pay to wash dishes, hang around to make the odd last desert.

Dude, if you want I could probably come up with 10 more reasons why it's more profitable to open a BYOB.

Tell you the truth if I had a BYOB, I'd be in better shape, have sex in the afternoon, wouldn't smoke as much as I do and would avoid the gamblers that ask my who I like. They called me at home last night to ask who I liked.(Die-hard Giants fan but told them to take The Friggin Eagles and the Under).

No offense to those that have a BYOB, and my father has one now and does very well but he's home earlier than me.

[Kim WB]

Lou,

I'm hearing what you are saying about earlier hours, etc, but what about the specific question of profit margin that Tommy brought up? Do you really feel that BYO's operate on the same margin as places with Liquor licenses?

Plus, remember that though this board seems to have a LOT of BYO fans, most are eating for pleasure. There is an entire contingent of folks who do business dining, who cannot even consider a BYO as an option. And, others like myself, who just don't prefer them. And yes, its because in my experience, in my area, the service and decor is "storefront"...Another point is that most of the BEST BYO's in my immediate area, after success as a BYO, have then moved to better digs, got the LL, and are thriving. (Il Giordano to Mountainview INN, for instance) Yes, there are the two couples making goo goo eyes over a brandy, keeping your $7.00/hr staff there for an hour longer..but there are the 10 couples who come in to the bar, stay and hour, and order a scotch and a glass of wine...

edited for spelling, and typos, new keyboard.

[Kim WB]

And to answer the original question, ambiance is very important to me, I'd say 30%. To me, ambiance means having a capp with frangelico for dessert, perhaps a martini at the bar before hand. I'm not a big fan of converted strorfronts, especially when they have hardly camoflauged the street.

If the pasta dish was 13 bucks at a non ambiance BYO, I would pay up to 20 if the service and atmosphere were upscale, including a LL.

[tommy]

lou, i just have a hard time believing that all things considered, a restaurant charging 35 bucks for a 8 dollar bottle of chardonnay isn't making more money than one that's not. i dunno. maybe i'm completely off base here.

[chefb]

Forget the ambience, forget the man in the toliet handing you a towel.

When I go out I want good service, good food and I'm willing to pay for it.

Granted the mood of a place can add to your comfort.

Did you ever eat at a greesy spoon for breakfast, had some perfect eggs and crispy hash- browns and a great cup of coffee(and paid 2.99) Tax and you tip the waitress 1.50(50%). You leave there satisfied for 5.00 bucks. Priceless experience that you would pay double for.(factor the food costs are like $ .50)

[chefb]

On the other topic of byo vs. liquor. I believe upfront the byo can be more profitable but in the long run after you pay for the license. Your return on investment is better with the booze. how many people go to a rest/bar to just drink for hours and ends up buying food. No one goes to a byo to hang out with a basket of fries and watch the games.

[TCD]

How would you weight the relative contributions of food, ambiance, service, etc?

Provided that the establishment offers a suitable level of quality in each of the categories, I would generally weigh the contributions as follows:

Food 50%

Service 33%

Ambiance 17%

What I mean by the foregoing statement is that in order to have an enjoyable dining experience (and for me to consider returning to the restaurant) all three of the categories would have to be at an above average level. Truly outstanding food with poor or rude service is not acceptable. So even though generally the food is almost twice as important as the service under this scheme, poor service will take the restaurant off my list. There are exceptions to every rule, of course, and the foregoing primarily applies with respect to non-hole-in-the-wall places.

[TCD]

lou, are you suggesting that profit margins are about equal for BYOs and licensed restaurants in NJ, generally speaking?

I have reviewed several income statements and business plans for both BYO and licensed restaurants. The payments associated with the acquisition of the ABC license (principal and interest) often result in the compariable BYO having a higher profit margin during the period that the acquisition financing remains outstanding. Once the financing has repaid, however, the licensed restaurant seems to enjoy a greater return (and also has an asset that can be sold with or seperate from the business).

[Rail Paul]

lou, are you suggesting that profit margins are about equal for BYOs and licensed restaurants in NJ, generally speaking?

I have reviewed several income statements and business plans for both BYO and licensed restaurants. The payments associated with the acquisition of the ABC license (principal and interest) often result in the compariable BYO having a higher profit margin during the period that the acquisition financing remains outstanding. Once the financing has repaid, however, the licensed restaurant seems to enjoy a greater return (and also has an asset that can be sold with or seperate from the business).

TCD -

thanks for that insight.

Would you have any thoughts on whether a modest corkage ($10) for a BYO might produce a stream of income while requiring minimal capital outlays?

No license purchase, but a few thousand dollars for decent glassware, a few buckets, etc.

Paul

[Rosie]

It is illegal in NJ for a BYO to charge a corkage fee.

[TCD]

Would you have any thoughts on whether a modest corkage ($10) for a BYO might produce a stream of income while requiring minimal capital outlays?

As Rosie points out, an unlicensed establishment cannot charge a corkage, set up or similar fee for BYO.

Decent glassware is not all that expensive from restaurant supply wholesalers. Acceptable glassware doesn't need to be Riedel. At a minimum, what is needed are white and red wine glasses that have a decent sized bowl to allow for aeration of wine. Unfortunately, many BYOs (and ABC-licensed restaurants) don't even offer that.

[cdma2001]

Looks like the "Fair Price for Dinner" topic has turned into "The Economics of BYOBs"

If you have been to Greece you know that they serve wine in jelly glasses-- they don't care about the "proper" glass. (Not to mention that they are poisoning all the stray cats!!)

[Rosie]

Would you have any thoughts on whether a modest corkage ($10) for a BYO might produce a stream of income while requiring minimal capital outlays?

As Rosie points out, an unlicensed establishment cannot charge a corkage, set up or similar fee for BYO.

Decent glassware is not all that expensive from restaurant supply wholesalers. Acceptable glassware doesn't need to be Riedel. At a minimum, what is needed are white and red wine glasses that have a decent sized bowl to allow for aeration of wine. Unfortunately, many BYOs (and ABC-licensed restaurants) don't even offer that.

That's why I have started to BYOG!

[cdma2001]

Looks like the "Fair Price for Dinner" topic has turned into "The Economics of BYOBs"

If you have been to Greece you know that they serve wine in jelly glasses-- they don't care about the "proper" glass.  (Not to mention that they are poisoning all the stray cats!!)

Amen.

[tommy]

Looks like the "Fair Price for Dinner" topic has turned into "The Economics of BYOBs"

If you have been to Greece you know that they serve wine in jelly glasses-- they don't care about the "proper" glass.  (Not to mention that they are poisoning all the stray cats!!)

Amen.

you're quoting yourself. did you forget to log out and in under the other name?

[Lreda]

Once the financing has repaid, however, the licensed restaurant seems to enjoy a greater return (and also has an asset that can be sold with or seperate from the business).

TCD, great post. I'm limited for time right now and will expound late but remember 1 of 10 restaurants make it over the course of 3 years. I'm fortunate that after 8 years my financing is done and yes I can make a better profit off of liquor. But a lot of places don't make it and are forced to sell the license and some lose money because they're selling from a disadvantage.

Tommy, if a restaurant sells a $8 bottle of wine for $35, that is a disgrace. I've written in previous post about pricing and don't want to get into my pricing ideas but today's consumers are much more wine savvy than before.

[tommy]

Tommy, if a restaurant sells a $8 bottle of wine for $35, that is a disgrace. I've written in previous post about pricing and don't want to get into my pricing ideas but today's consumers are much more wine savvy than before.

hyperbole.

[201]

Looks like the "Fair Price for Dinner" topic has turned into "The Economics of BYOBs"

If you have been to Greece you know that they serve wine in jelly glasses-- they don't care about the "proper" glass.  (Not to mention that they are poisoning all the stray cats!!)

Amen.

you're quoting yourself. did you forget to log out and in under the other name?

Tommy, shhhhhh! You'll ruin someone's fun!!