PhDs (profits, hamburgers, and delectability) for restaurant chains
Whenever the economy finds itself in a downturn, one of the hardest-hit industries is almost always the restaurant business.
This recession is no exception, but this time, the downturn is helping produce college graduates trained to run restaurants more like businesses and less like family projects.
''The hotel and restaurant industry has been 40 years behind the times,'' says Dante Laudadio, director of the hotel and restaurant management program at Washington State University. ''In the era of the glad-hander you could make it on personality; you could be cordial, that was enough. If a few dollars slipped by, nobody paid much attention.''
Mr. Laudadio was in Chicago to watch a handful of his best students accept first place in the third annual Taste of America Showcase, a catering competition for which they spent months in preparation. The showcase was conceived by its sponsor, R.T. French Company, as a management exercise, not a culinary contest.
The need for better business training has not been lost on those in the hotel and restaurant industry.
''The types of students that the industry has come to recruit have been through an academically rigorous program with lots of accounting, economics, and statistics and skills that are going to show up on the bottom line,'' Mr. Laudadio said.
Because the number of customers has been down -- an estimated 5 to 6 percent last year -- survival has become a very real challenge for even the best-managed restaurants. Those that survive have done so with the help of professionally trained managers. Hence the demand for hotel and restaurant management students, Laudadio says.
He finds no argument from the director of Michigan State University's hotel and restaurant management school, Donald Smith, former president of Shakey's Inc. But Mr. Smith does see customer counts up in one segment of the restaurant business -- his own. The fast foods, or, as he prefers, ''quick service'' business has been so good that Pizza Hut Inc. recently endowed Michigan State with a five-year, $375,000 program for chain restaurant management.
The money will give MSU a faculty member who specializes in the quick-service end of the restaurant industry.
The program, sponsored by PepsiCo Inc., Pizza Hut's parent, will concentrate on areas such as computerization and marketing, areas that often escape the attention of the more production-oriented restaurant industry, Mr. Smith says.
Mr. Smith expects that about $40,000 of each year's $75,000 allotment will go to the new professor's salary, with the rest being divided among benefits, research, support, and travel.
Smith compared the MSU program with Hamburger U, the highly publicized training center near Chicago that qualifies franchisees for the McDonald's chain.
''Hamburger U teaches unit management. We will be teaching multi-unit management,'' he said.
''What we want is somebody who has the academic credentials -- preferably a PhD -- and who takes fast foods seriously,'' he said.
Explaining the strength of the fast-food industry, Smith remarked, ''In tough times, you've got two paychecks and a tired mother trying to keep a standard of living going. What you end up with is people working, coming home. They're tired and they tend to go out and eat, but not in a traditional restaurant or place of entertainment.''
Laudadio and Smith both report a huge demand for their students. At Washington State, Laudadio says his graduates each receive four or five job offers. Smith says his Michigan State graduates who rank above the 40th percentile are averaging three or four offers each. He reports that only 2 percent cannot find jobs.
''Our own grads at WSU start with an average annual salary (of) $14,000, compared with other business school grads (with BAs) who start at around $16,500 ,'' Laudadio said. ''Our students realize this, but they're taking a rather long-range look. In another four or five years, they're going to be in charge of literally millions of dollars in assets and they'll be making $40,000 to $50,000 .''
The students can command these salaries, he says, because they have gone through a program in which professional experience is required.