Corporate Restaurant Structure

Many restaurants begin life as a single location, but eventually blossom into a franchise or privately-owned chain. When one restaurant becomes many, a new management structure must be put into place to handle the corporate side of the business. Doing so ensures that every restaurant in the chain is meeting the same standards.

Once a restaurant becomes a chain, the original restaurant owner either sells the business or must choose their new role within it. In cases where the original owner decides to make the restaurant a franchise, they become a franchisor. In some cases, the owner may sit at the head of the board of directors either above or as the chief operating officer. In other cases, this person merely serves as an advisor.

Regardless of what role the original owner plays, the executive team must be put into place consisting of a chief operating officer, chief financial officer, president, and board of directors to handle other aspects of the business. While the chief operating officer typically holds the most power, the board makes decisions together to prevent any one executive from exercising too much power. Depending on the role the original owner plays in the hierarchy, he or she may have final decision making power, even over the board of directors.

Regional managers play the next highest role in the corporate structure. These individuals are responsible for the continuing operation of many restaurant locations within a large area. Depending on what part of the country a particular regional manager operates in, this could include restaurants in several states. Regional managers meet regularly with district managers, store managers, and (when applicable) franchisees to implement high volume sales plans and convey new protocols from the board of directors while ensuring that quality and customer service standards are being met. Regional managers report to the board of directors.

District managers operate in the next tier of the corporate structure. Like regional managers, they too are responsible for multiple stores, but usually only a handful. This gives them the chance to work far more closely with store managers and (when applicable) franchisees to make sure that all the restaurants under their umbrella are meeting sales quotas and upholding corporate standards. District managers are often the messengers for changes that need to be made at store level including regarding menu selections, prices, uniforms, and other protocols. District managers report directly to their corresponding regional manager, but at times must also answer to the board of directors.

In cases where a restaurant becomes a franchise, a franchisee can purchase licensing rights to open one or several locations. Sometimes, the franchisee may act as a restaurant manager while those with multiple locations may function more like a district manager. A franchisee has the choice to hire a restaurant manager, even if they only own one location. Like a restaurant manager, the franchisee is responsible for making sure that their locations are in line with corporate branding and protocols, but can exercise greater authority regarding staffing decisions. All franchisees answer to their corresponding district and regional managers, even if they are not involved with day-to-day operations.

While technically restaurant managers operate at the highest tier of their location’s organizational structure, they are also at the lowest tier of the corporate structure as well. This is because they are the district manager’s contact person for their restaurant as well as the vessel that must enforce all new and standard corporate protocols. Restaurant managers also are responsible for communicating anything of importance to their corresponding district manager including changes they think should be made at store level. While restaurant managers must always report directly to their corresponding district manager, in some cases, they report to a franchisee as well.