Restaurant discounts: What you need to know

Have you ever wondered why some chain restaurants offer kids eat free, or family promotions and the same restaurant across town doesn’t? Why some restaurants may offer military or Veteran discounts while others in the same chain don’t? It’s the same with senior citizens. One store in the chain may give free drinks while another offers 10% on Wednesdays. Why the lack of consistency? Aren’t they the same restaurant and shouldn’t they have the same restaurant discounts?

I often wondered these questions myself and didn’t understand the lack of consistency until I started Back of the Menu and began doing some research as to why. I also saw there were a lot of other people confused by this as well in speaking with others about the subject and seeing dozens of comments on blog posts where one person corrects another on what a specific chain restaurant offers concerning restaurant discounts.

Inconsistency breeds confusion and even anger!

Let’s take kids eat free discounts as an example. When you research restaurant listings where kids eat free, here are just a few comments you might find –

“It is obviously common sense to call and confirm if kids eat free before planning your entire night around it. Everyone’s getting so upset saying this information is inaccurate but that is completely false.”

“In Rockford, IL, one of the Buffalo Wild Wings has kids for $1.99 on Monday and the other location has it on Wednesday. Also, Steak & Shake is free every day now.”

“Chick Fil A doesn’t do kids eat free nights.”

“IHOP in Lancaster pa does not honor the kids eat free on Wednesday between 4 to 8: (“

And my favorite…(wow)

“RED ROBIN HAS NEVER HAD FREE!!!!!! THANKS FOR HAVING US DRIVE FOR 20 MINUTES ONLY TO FIND OUT THAT KIDS HAVE NEVER EATEN FREE. IT REALLY SUCKS THAT WHEN YOU GOOGLE FOR WHERE DO KIDS EAT FREE, THIS SITE IS THE FIRST THAT COMES UP. RIDICULOUS. UPDATE YOUR INFO. IF YOU’RE GOING TO HAVE A WEBSITE TO HELP PEOPLE OUT, THEN HELP PEOPLE OUT.”

No wonder a lot of those helpful sites turn off their comments!

So why is it like that? Why isn’t there consistency?

Our neighborhood has a few hundred homes in it. When you drive up and down the streets, you will find many commonalities. Each house has walls, doors, windows, grass, a front & backyard, driveways, the list goes on. But, there are also differences. One house may have rocking chairs on the front porch, one wicker furniture, one Adirondack chairs. One house may have a basketball goal; one may have a soccer goal in the backyard. You get the idea.

Why is it that you can have both consistency and inconsistency in the same neighboorhood? The answer would seem given or simple common sense. Each home in the neighboorhood has to follow specific guidelines but then offers creativity and personality on others. You probably couldn’t tear down your house and put an RV or tent in place of it, you may or may not be able to paint the home neon pink depending on your neighborhood restrictions. And then there are government codes. You have to have a front door on your house, electricity, running water, etc. Once you move past the “rules” what’s left is personality and choice. Maybe you want dogwood trees and crabgrass but another home maple trees and Bermuda grass, it’s merely personal preferences.

It’s the same for restaurant chains. They have specific rules that they have to follow.  You can’t go into your local Pizza Hut and get a cheeseburger. Chili’s isn’t serving the same menu items as White Castle. It goes beyond the interior of the restaurant. Pay attention to your local chain restaurants as you drive by. The buildings may look a little different, but every Cracker Barrel has the same color scheme, same font, the same basic look. They have to; it’s the rules.

Franchising Rules

But, whose rules?!? Well, it depends. Restaurants generally fall into two categories: those that are all owned by the same company (or family) and those who franchise (the majority).

Webster defines “franchise” like this – “freedom or immunity from some burden or restriction vested in a person or group” or “the right or license granted to an individual or group to market a company’s goods or services in a particular territory.”

But what does that mean necessarily and how does it impact restaurant discounts, kids eat free, military discounts and more? Let’s think about it this way.

 

A Parable of German Food and Franchising

You and I meet in college and share a love of cooking and German food. We love to hang out and cook, and our friends are always complimenting us on our dishes. Over time we develop our craft and notice that it is our Spätzle (the most popular dish in Germany, also vegetarian) that everyone asks for. So we start focusing on our Spätzle as the essential dish we bring to the parties we go to or when friends are over. One night, someone approaches us and ask if we would be willing to cater the event they have coming up. We’ve never charged for our food, but it sounds fun, and we could use the cash!

The catering event was a success and went very well!  Others begin asking us to cook and cater for various events around campus. Our German food is authentic and unusual. People are drawn to all our dishes, but they always love our Spätzle the most! Over coffee one day the idea of a restaurant comes up. Could we turn our love of food into a legit business? We take some time to work through the details, talk to trusted friends and relatives and even meet with the bank. After a few months, we decide to take the plunge and rent out a tiny hole in the wall place near campus.  Within a few weeks, people are lined out the door. Somehow we can do this thing we love and make money at it. Who knew this could even be possible? How do we get to do something every day that we love and get paid for it?

A year later we are preparing for our anniversary party at the restaurant for selected friends and family. Over the past year, we’ve grown more than we could have ever imagined. We had local papers and blogs write about us and have been asked on to be on TV several times. But then one day we get a phone call. Rachel, across the country, read about our success on a food blog and loved the concept. She wants to invest and partner with us by opening up a second location in her state of South Carolina, 2,000 miles away.  She would like to use our restaurant name, our unique German recipes and open her own restaurant. At first, we’re not sure; we’ve never considered a second location, especially one out of state. We’ve been at forks in the road before, but this seems bigger, much more significant.

Hours of conversations, meetings with accountants and attorneys, and asking ourselves if this is the road we want to take, we finally agree. Throughout October, we meet with Rachel and work through the details. We come up with guidelines that Rachel must adhere to. For example, she may only prepare the same dishes we sell, and she can not change the recipes or ingredients. She must use our color scheme and fonts; she has to bring the level of customer service we deliver to our customers, as well as a few more ‘no exception’ rules. After we’ve worked through those items, Rachel asks about some other things. What hours is the restaurant allowed to be open? Her community has a strong German presence (one of her reasons for approaching us), and she would like to have special events at the restaurant to cater to those families. She and her husband have five children and so reaching out to kids is also important to her. Can she offer family discounts? We work through all of those items as well agreeing to most everything she requests. We close our contract discussions with the decision for her to pay us 7% of her earnings each month. We shake on it, and Rachel gets to work.

Fast forward a few years, and we had others approach us to start our German restaurant in various locations. We now have six other investors in multiple cities and states with 16 locations. In fact, the business is going so well; we decided to open our additional stores in our region. At this point in our business, we have 5 locations of our own and 16 franchise locations for a total of 21 stores around the country. For the stores we own, we make 100% of the profits and then we are making 5-9% of the earnings from our franchisees. We enjoy seeing our food that started back in college be experienced by so many around the country and are blown away at the business success it has brought us.

Take Aways

The story, of course fictitious, is not very far off what happens with restaurants and how they become chains. It also greatly impacts the restaurant discounts they offer. In our story, there are seven total owners (us and our six franchise partners) all selling the same food with the same ingredients. Our restaurant buildings look the same, and there isn’t any noticeable differences, kind of like driving through a neighborhood. Someone driving by any of these 21 locations would see the same restaurant chain, but probably don’t know our story. (my favorite part about BOTM)  They don’t realize that you and I started this restaurant from our love of cooking in college, they don’t know about Rachel approaching us and the terms we worked out with her and our other franchisees. To no fault of their own, many people expect the same experience (e.g., discounts) as if they were visiting a retail store in different cities.

Meanwhile, Rachel has found success focusing on kids and families with her restaurants. Walter, who owns two restaurants in Minnesota found that senior citizens bring his most significant market share and so he tries to cater to them as much as possible. Finally, Maria in Texas has discovered he likes offering discounts to a wide variety of customers and has even hired a full-time customer service rep to walk around her restaurant making sure everyone has been taken care of.

Back to you

As our story relates to benefits, kids-eat-free, promotions and restaurant discounts, please understand that most restaurants are franchised which means that the individual owners throughout the country can add and take away benefits or promotions at any given time. There are a couple of restaurants (e.g., O’Charley’s) that offers their discounts to all locations, but most do not. Some restaurants don’t participate at all (e.g., Flemings) but the vast majority fall into the category of, it merely depends on your location. Chick-fil-a is a great example. They continuously offer various promotions especially as it relates to kids and families, but it just depends on your location. Our local McAlister’s offers kids eat free on Wednesday’s, and they do crafts with the kids (how awesome is that!), but the one 45 minutes from us don’t ever do crafts and their kids eat free is on Friday’s. The best thing to do is always call ahead or ask when you visit. “Do you have any kids eat free promotions?”, “Do you offer a military discount?”, etc. You may find there are discounts and promotions you’ve been missing.

I hope this article was helpful to shed some light on the inconsistency that you find with restaurant discounts. One day in the future, we hope to have one page where you will find an exhaustive list of kids eat free, military discounts, senior citizen and even birthday deals! Meanwhile, to keep up with the discounts your favorites are offering and to find a list of all restaurants listed on Back of the Menu, please check out our Restaurant page. Continue to check back as we add new restaurants each week!