Chapter 40 — Further Reading

Grouped by the book's three citation tiers. Tier 1 is verified canonical — institutions, frameworks, statutes, and published books we are confident exist and can stand behind. Tier 2 is attributed industry practice whose exact citation we have not pinned down; treat every figure there as a range, not a decimal. Tier 3 is illustrative and constructed — Bellwether and everything attached to it.

Tier 1 — Verified canonical

On financing and the loan itself

• U.S. Small Business Administration — the 7(a) loan program. The program that funded Bellwether. Go to the SBA directly for current eligibility, guaranty structure, size standards, and the list of participating lenders. Do not take program terms from any book, including this one; they change.
• U.S. Small Business Administration — the 504 loan program. Relevant if you are buying real estate rather than leasing it. Chapter 5 covered the distinction.
• Small Business Development Centers (SBDCs) and SCORE, both associated with the SBA. Free business counseling, and both will review a business plan before a lender does. If you are going to hand a document to a bank, hand it to one of these first — it costs nothing and they have read hundreds.

On wage, hour, and classification — the material behind Finding 1's real magnitude

• The Fair Labor Standards Act (FLSA), administered by the U.S. Department of Labor's Wage and Hour Division. The minimum wage, overtime, recordkeeping, the tip credit, the tip-pooling provisions as amended in 2018, and the exempt/non-exempt duties tests. The Department publishes plain-language fact sheets, which are the right starting point.
• Your state labor department. Several states have no tip credit, several have higher minimum wages, several have predictive-scheduling ordinances, and several apply stricter exemption tests than the federal ones. State law governs where it is more protective.

On certification and the management credential

• ServSafe, from the National Restaurant Association's educational foundation: food handler, food protection manager, allergens, and alcohol. The manager certification is the one most jurisdictions require at least one of per establishment.
• The Foodservice Management Professional (FMP), also through the industry's educational foundation. The management-side credential named in §40.3. Verify current eligibility, exam structure, and cost with the issuing body; this chapter deliberately does not state them.
• The FDA Food Code — the model that states and localities adopt versions of. Read it once for the structure; verify your own jurisdiction's adopted edition for anything operational.

Published books in this book's reference structure

• Roger Fields, Restaurant Success by the Numbers. The closest thing to a companion volume for Parts VII and VIII. Strongest on the pro forma, break-even, and the financial discipline behind §40.7 and §40.9.
• Danny Meyer, Setting the Table. The hospitality argument this book's third theme rests on, and necessary background for Case Study 2 — the author of the book is the operator who ran the no-tipping experiment.
• Brown and Rowe, The Restaurant Manager's Handbook. Broad operational reference; useful for the position descriptions and organizational structures behind the ladders in §40.1.

On the industry's shape

• The National Restaurant Association — industry data, advocacy positions, and the educational foundation behind ServSafe and the FMP. Read it as an industry body with a point of view, which is what it is.
• The U.S. Bureau of Labor Statistics — Occupational Outlook Handbook entries for chefs and head cooks, cooks, food service managers, and bartenders; the Occupational Employment and Wage Statistics series; and the JOLTS data on quits and openings in accommodation and food services. This is the correct place to get wage and employment figures for a career decision rather than a salary aggregator, and it is why this chapter gives no salary survey numbers of its own.

On the public events in the case studies

• The COVID-19 relief programs — the Paycheck Protection Program and the Restaurant Revitalization Fund. Both administered by the SBA; both matters of public record, including the RRF's oversubscription.
• Municipal and state delivery-commission-cap ordinances enacted from 2020 onward. Several jurisdictions made temporary caps permanent; check your own.
• Union Square Hospitality Group's public announcements on Hospitality Included (2015) and its discontinuation (2020), plus contemporaneous trade and general press coverage. Case Study 2 uses only what was publicly stated.

Tier 2 — Attributed, specifics unverified

Treat everything here as a range and a direction, never as a decimal you can quote to a lender.

• Restaurant failure research. The peer-reviewed work most often cited on this question — H.G. Parsa and colleagues, published through Cornell — found first-year failure closer to one in four than to the folkloric 90%, with cumulative failure approaching six in ten over three years, and with "failure" generally meaning the business closed or changed ownership. Studies differ by market, period, and definition. Use the shape, not the digits.
• Industry turnover. Annual turnover in restaurants is routinely reported in the neighborhood of 75%, higher in some segments and lower in well-run independents. Chapter 17 made you compute what a single departure costs; that computation is more useful than the industry average.
• Prime-cost benchmarks. Full service at or below 60%; quick service lower; fine dining frequently higher and carried by check average and beverage attachment. Industry rules of thumb, widely published, not laws.
• Equity injection on SBA startup lending. The commonly cited floor is on the order of ten percent or more of project cost, with individual lenders setting higher thresholds by industry and restaurants sitting near the top of that risk ladder. Verify with the lender, not with a book.
• Culinary education costs. These vary by an order of magnitude between a community-college associate program and a private institute. The illustrative figures in §40.3 exist to demonstrate the opportunity-cost method, not to describe any real program. Look up the published cost of attendance for anything you are actually considering.
• Post-2020 wage pressure and workforce departures. Widely reported through 2021 and 2022. The direction is not contested; the magnitude of permanent departures from the industry genuinely is, and this book does not invent a figure for it.

Tier 3 — Illustrative and constructed

Everything in this category is a teaching device. None of it describes a real business.

• Bellwether — the 68-seat Rivermill District restaurant, its \$620,000 project, its \$1,550,000 Year-1 plan, its capital stack, its lease, its menu, its staffing guide, and its three-year pro forma. Constructed, internally consistent, and labeled throughout.
• The credit memorandum (Figure 40.4) — a constructed teaching example. Real credit memoranda are internal bank documents and are not published. The structure, the sensitivity table, the conditions, and the closing reservation are written to be representative of the genre and of how a competent analyst reasons. Roles only; no named individuals.
• The 13-week cash forecast (§40.9 and Figure 40.7) — constructed, with every assumption stated: sales net of sales tax, payroll shown when paid rather than earned, product at 27.8% of sales, and the periodic items named per week.
• The personal exposure table (Figure 40.6), the career ladder (Figure 40.1), the time-to-ownership bands (Figure 40.2), the compensation and bonus arithmetic in §40.4, and the Bellwether conversion modeling in Case Study 2 — all constructed.
• The Hearth Chicken cost card — \$8.35 in components, \$8.52 with the 2% waste allowance, \$29.00 on the menu, 29.4% food cost, \$20.48 contribution margin. Constructed, and frozen across the book.

Where to go next

If you are actually going to do this, three things in order, and none of them is a book.

1. An accountant who has restaurant clients. Not a general small-business accountant. Ask them how many restaurants they currently serve and what chart of accounts they use.
2. An attorney for the lease and the operating agreement. Chapter 6's clauses and §40.4's partnership questions are where the money is, and both are cheaper to get right than to fix.
3. An SBDC or SCORE counselor, with your plan in hand, before the bank sees it. Free, and they will tell you which page the analyst is going to circle.

And one that is a book, or rather a document: Appendix C, the blank Business Plan Workbook. It is the version of §40.7 with your restaurant's name on it.