Formosa Journal of Multidisciplinary Research (FJMR)

Vol. 2, No. 2, 2023: 453 - 480

Operational Problems and Strategies of Restaurants in Northern

Philippines

Dan Jayson S. Dingil1*, Diamonde Irishlee I. Laforteza2, John Carl B.

Pagulayan3, Emilyn C. Macarubbo4, Rizza D. Velasco5, Karen Joy A.
Catacutan6
University of Saint Louis
Corresponding Author: Karen Joy A. Catacutan
karenjoyannang@yahoo.com.ph

ARTICLEINFO ABSTRACT
Keywords: Operational This study aimed to determine the operational
Problems, Restaurants, problems and coping strategies of restaurants in
Strategies Tuguegarao City, Philippines. The study
employed quantitative research wherein fifty-
Received : 10 December five managers/owners were surveyed using a
Revised : 11 January questionnaire. Results revealed that restaurant
Accepted: 20 February
establishments faced operational problems such
as pricing, employees and service reliability,
©2023 Dingil, Laforteza, Pagulayan,
Velasco, Catacutan: This is an open- food issues, location, and atmosphere/ambiance.
access article distributed under the Furthermore, restaurants use various strategies
terms of the Creative Commons to cope with the operational problems they
Atribusi 4.0 Internasional. encounter. This suggests that encountering
operational problems depends on the type of
ownership of a restaurant. Moreover, the
strategies to cope with operational problems
encountered were used by restaurants,
regardless of their type of ownership, length of
operations, number of employees, and type of
restaurant.

DOI: https://doi.org/10.55927/fjmr.v2i2.3103 453

( ISSN-E: 2829 – 8896
https://journal.formosapublisher.org/index.php/fjmr
Dingil, Laforteza, Pagulayan, Velasco, Catacutan

INTRODUCTION
One of the most demanded businesses in today's modern age is the
restaurant industry. There are many trendy restaurants because they cater to
good quality of food and give good services. The phenomenal growth of the
restaurant industry provides customers with delicious and authentic food and
refreshment and a place with a good ambiance and accessible for every
customer. All restaurant guests, however, have one basic urge known as
hunger. In addition, they may also want entertainment, and they will seek a
restaurant with a stimulating environment. Some may wish for recognition, so
they will go to a restaurant that provides the feeling of importance that comes
with recognition (Walker, 2012). A restaurant is an establishment that provides
a different style of cuisine that is unusual to every guest. Every customer is
looking for food that is not usually on the food they serve in their houses.
Hence, customers look and search for restaurants that cater to the kind of food
they are looking for that can satisfy their cravings. Also, escape from home
beyond hunger has become a popular form of entertainment. People eat and
expect pleasure and satisfaction, especially when the food is offered in an
endearing place (Abdelhamied, 2011).
The restaurant industry provides the needs and wants of human beings,
which are food and beverages. This industry is full of opportunities and
prospects that can lead to success if manage and operate well. Many problems
can affect the restaurant's success. According to Parsa et al. (2011), restaurants
may face domestic and external (economic, political, and health issues)
operational problems (low management, poor service, and low-quality goods).
Food attributes most strongly valued by restaurants are freshness and taste;
price and convenience are important discriminating attributes of local food
usage (Inwood et al., 2009). Personal and functional service factors positively
influence customers’ satisfaction (Alhelalat, 2017). The quality of a restaurant
could be influenced assertively and directly by a reasonable cost (Zhong and
Moon, 2020). Identifying how customer satisfaction grows, the physical
environment, perceived price, and consumer emotions are important (Ali and
Amin, 2014). Atmosphere was an important driver of positive experiences in all
restaurants (Harrington et al., 2012). But on the other hand, actions and plans
must be undertaken in the process. Strategies of the management under the
restaurant can be used as they wanted to be done in their future opportunity.
The City of Tuguegarao in the province of Cagayan, was acclaimed as the
Regional Primary Growth Center of Region 2. Alongside, food service
establishments are continuously flourishing in the city despite the existence of
malls. According to Narag et al. (2019), the number of accommodation and
dining establishments have noticeably increased in the city and this
phenomenon may be undeniably attributed to the fact that the city is the center
of trade, commerce and education in Cagayan Valley, Philippines and the
regional center of government agencies in the region. Many of the existing
restaurants in the city have been around for decades now and many newer and
innovative ones were built to meet the demand created by the city’s changing
demographics. According to Cagurangan (2017), the rapid development of the

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restaurant industry in Tuguegarao City often depends closely with the

employees training, turnover rate, and unpredictability of the different
challenges encountered by the restaurant managers. The restaurant industry in
Tuguegarao City plays an integral part in economic development. Given the
growth and development of the city, where big business establishments can be
seen, no doubt that the influx of people from other places and different
feedbacks are expected. Therefore, it is necessary to know the strategies and set
of solutions in improving the problems of restaurants. The overall success of the
restaurants depends on the management of the restaurant owners and
managers. Therefore, this study aimed to determine the operational problems
and strategies of restaurants in Tuguegarao City. Specifically, it sought to
determine the profile of the restaurants, the common operational problems they
encountered and the strategies they used to cope with their problems.

THEORETICAL REVIEW
Conceptual Framework
The study was supported by the concept of issues management.
According to Elimimian and Edevbie (2013), issues management process stems
from its potential to act as an early detector of significant external trends, and to
provide the mechanisms for developing effective strategies to respond to those
trends. Issues management provides relevant variables, identification, and
response time ranking to surprising changes both external and internal
environment of the organization. Responsibility for the pre-identified
individual issues is assigned during issues management process for resulting
issue. Therefore, issue management is “management action” and not just a
planning behavior. Having completed the issues management for any
organization, including educational institution, it is then appropriate to have
strategic planning.
Additionally, this study was also supported by the concept of service
operations management. Kanyan et al. (2016) stated that the service operations
management is essential in the food service industry. The restaurants are
required to consistently and continuously plan, implement, evaluate and
improve on the various aspects of the service operations for optimum customer
satisfaction, revisits and positive word-of-mouth. Superior customer service
helps in developing good bonding with customers which will lead to long term
relationship. The concepts served as the basis and helped the study to
determine possible and existing operational problems by the restaurants in
Tuguegarao City, and identify their strategies used to cope with the problems
that they encountered to improve their services in everyday operations

Restaurant Industry
A restaurant is a registered food service establishment that serves food
and drinks to consumers, such as fast food, casual dining, and on-premise
restaurants. Although most meals are served and consumed on the premises,
numerous restaurants also provide take-out and food delivery services. Eateries
come in a wide range of styles and pricing points, with cuisines and service

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models ranging from low-cost fast food and cafeterias to mid-priced family
restaurants to high-end luxury places.Every restaurant provides three basic
attributes (food, service, and physical environment) to customers. Each type of
restaurant has its distinct attributes to differentiate the restaurant’s
characteristics from the other restaurant types and to appeal to its target market
(Ryu et al., 2012). According to Harrington et al. (2011), customers expect a
certain level of quality according to the attributes provided by restaurant.
People are the foundation of a country, and food is a basic human need.
Because of the rise in living standards, most individuals nowadays prefer to eat
in a restaurant rather than at home. Restaurants can provide high-quality food,
a pleasant dining environment, and courteous service to all customers (Di
Pangzi, 2013). Restaurant, according to the French encyclopedia, denotes
"something that can help individuals restore their soul and energy." And there
are only two things that can help people regain their spirit and strength: rest
and food. According to Han Dian (2014), some astute individuals begin to serve
food, drinks, and dessert to clients in public places in exchange for money. This
is the restaurant's prototype. A restaurant is a business where people offer food
and drinks to customers in exchange for money in a public setting.

Types of Restaurants
Restaurants can generally be categorized into different segments or
types. Muller and Woods (1994) classified restaurant segments into quick
service, midscale, moderate upscale, upscale, and business dining. Recently,
restaurants have been extended and segmented as fast food or quick service,
fast casual, casual dining, upscale casual dining, fine dining, family dining,
business dining, and institutional foodservice (DiPietro, 2017). Each restaurant
type has certain service norms that are different from one another in terms of
price, service, food, and atmosphere. It has been indicated that depending on
these service norms, consumers evaluate each restaurant type differently
(Hanks et al., 2017; Hwang & Ok, 2013). Quick-casual service is a contemporary
concept that is increasingly gaining in popularity in the restaurant industry. It
integrates elements of quick service with casual dining for a holistic dining
experience. Unlike quick service restaurants, quick-casual restaurants serve
healthier and fresher menus (i.e., made-to-order) rather than pre-assembled
(DiPietro, 2017). A full-service restaurant (Chan et al., 2016; Washington &
Miller, 2013; Aldaihani & Ali, 2018) is one that provides a full dining experience
with comprehensive table service at a reasonable price (Chan et al., 2016;
Washington & Miller, 2013; Aldaihani & Ali, 2018). (Hwang & Ok, 2013). Salim
et al. (2009) defined a full-service restaurant as a food service establishment that
provides table service and accommodates guests for dining service with a
variety of food and beverage options. According to North American Industry
(2012), a full-service restaurant is a business that provides food to customers
while they are seated and then collects money before leaving. To add value to
the existing offerings, several establishments include bar service, alcoholic
beverages, and entertainment. A full-service restaurant was also mentioned by
Parpal (2013) as a customary means of eating outside the house. When clients

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come, the servers will greet them and lead them to their seats. As a result, the
servers will collect their orders and deliver the meals to the table when they are
ready. Furthermore, full-service restaurants are classified as fine dining or
casual dining. Fine dining is identical with the highest price level among
restaurant with a high standard operating procedure, finest ambience, and
atmosphere. It is because business works when the standards are set. Food
hygiene and cleanliness of the place are also crucial for the customers
experiences as they expect that everything is hygiene in the restaurant (Parpal,
2014).
A fast food restaurant is a growing business and with the time evolving
the pattern of eating habits is changing. Therefore, many people have started
opting for fast food which is an appealing phenomenon for them (Farooqui &
Alwi, 2019). Quick service/fast food businesses are geared to provide
inexpensive meals in a timely manner. In order to make a large volume of food
in a short amount of time, these restaurants' kitchens usually include a lot of
prepared meals. Customers want prompt service, a reasonable price, and
consistency. McDonald's, Burger King, Pizza Hut, and other well-known fast
food establishments are among the most well-known (Wade, 2006). Food is
prepared in a standardized process that can be distributed immediately for
ordering and consumption (Canziani et al., 2016). It is less expensive than a full-
service restaurant but serves more high-quality food than a quick-service
restaurant. Food is made-to-order and innovative food may be served to cater
for sophisticated tastes. Customers are drawn to quick-casual restaurants
because they offer high-quality cuisine at a reasonable price in a relaxed setting
(Ryu et al., 2012)

Restaurant Ownership
There are two types of ownership for restaurants: chain and
independent. A chain is defined as a multiunit enterprise with different
locations that are operated under the same name, whereas an independent unit
is an enterprise that is not part of a chain (Canziani et al., 2016). When choosing
the business's ownership style, the owner must decide what type of ownership
works best for their business. Family-owned small businesses are less likely to
fail due to family pride and a long-term orientation, which gave them
persistence in the wake of others' failures and allowed more stable income from
earnings (Amankwah Amoah, 2016; Fitzgerald & Muske, 2016). Independent
restaurants are generally family-owned and operated restaurants that are not
part of a national chain. The average consumer spends about half of their
disposable income dining out in restaurants (Martin, 2018). Due to restaurants'
structure and organizational culture, family-owned restaurants stand out as
unique small businesses (Koutroumanis et al., 2015). According to Ketchen et al.
(2007), it has been empirically supported those well-established partnerships
motivate suppliers to provide benefits for buyers to reduce costs, improve
product quality and customer service, and accelerate new product
development. Soosay et al. (2008) stated that strong relationships with business

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partners assist organizations to adopt and integrate effective operations, which

enable product development accomplishments.

Operational Problems in the Restaurant Industry

Quality food/drink, service, good customer service, environment, and
purity drive positives and negatives of consumers, but these characteristics vary
from fast-service to informal food and fine dining to fine dining (Harrington et
al., 2012). Physical environment plays a key role in emotions and prices that
impact satisfaction of customers. Moreover, consumption emotions and price
perceptions significantly mediate the relationship between physical
environment and customer satisfaction (Ali et al., 2016). Customer satisfaction is
explained by both functional and personal components of service behavior,
with personal factors contributing more than functional ones. Personal aspects
have shown a superiority in predicting customers’ satisfaction. The overall
customer satisfaction levels were higher when they had higher perception of
restaurant employees’ personal service aspects, which indicates that customers
highly appreciate the cordiality, politeness, appearance, and personal attitude
of restaurant employees (Alhelalat et al., 2017).
In a multi-disciplinary study conducted by Parsa et al. (2011) revealed
that location, affiliation, and size are substantial variables on restaurants’
failure. The smaller the size of a restaurant the higher the rate of failure.
Moreover, the location, density, and affiliation affect the survival of restaurants.
Pal and Aradhya (2020) concluded that price sensitivity of the consumer plays a
crucial role while determining the pricing strategy. Customers get attractively
priced combo meals or 1+1 offers on select snacks and beverages. Prices of raw
materials are regularly kept in check by an intrinsic network comprising of
suppliers and other middlemen who never fail to deliver quality raw materials
at optimum costs at the right time. Additionally, there is ample availability of
skilled workers like waiters, line workers, chefs and managerial personnel who
work whole-heartedly in delivering best value to consumers. Geographic
location and size play a role in restaurant failure, according to a study done by
Parsa et al. (2015). When a restaurant location has been rented three times to
failed restaurateurs, it may lose its appeal to future restaurant owners.
In the perspective of managers, only two aspects of quality are important
to ensuring restaurant quality overall. Kukanja and Planinc (2018) revealed: (1),
compassion and assurance and (2) tangible. Interestingly, the results indicate
that the above dimensions affect the operating profit in determining the
financial success of restaurants. Mensah and Mensah (2018) indicated a 50
percent difference in service quality in four factors: responsiveness, empathy,
reliability, and tangible. As a result, it has been demonstrated that service
quality has a major influence on customer satisfaction. The local restaurant
managers have shared common problems and challenges about the values,
performance, and competence of their employees, as well as training and
seminars, according to Cagurangan (2017). In addition, certain variables
contribute to the most pressing problems and challenges that are identified in
each in-premise restaurant's intervention areas.

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Four variables (food quality, service quality, price, and atmosphere of a

restaurant) positively influence customer satisfaction, revisit intention, and
likelihood of recommendation for global fast-food restaurants. However,
depending on the type of restaurant, the factors affecting customer satisfaction,
revisit intention, and recommendation are different (Chun and Nyam-Ochir,
2020). Perceived cost can significantly influence customers’ judgement of the
quality dimensions of a restaurant. Moreover, customer satisfaction and
happiness can lead to a sense of loyalty. Happiness mediates the relationship
between contentment and loyalty. Customers' judgments of food quality based
on price and satisfaction levels based on service quality, however, varied
dramatically between genders, demonstrating that gender moderation in food
consumption occurs (Zhong and Moon, 2020). Food quality, service quality, and
conveniences all have a big influence on overall satisfaction and the desire to
revise and promote quick-service restaurants. In a QSR context, however,
ambience had no direct impact on customer happiness; overall contentment had
no bearing on the correlations between the features of the eating experience and
the intention of returning to and referring QSRs (Richardson et al., 2019).

Strategies adopted by Restaurants

According to Ampountolas et al. (2019), hotels employ social media to
broadcast and disseminate pricing promotions for consumers. Technological
innovations like social media provide hotels avenues for two-way, real-time
communication with consumers. Although not every hotel has the capacity to
dedicate resources to its use or measure how to drive significant promotional
messages through specific social media platforms, the availability of social
media allows a hotel or chain to interact more directly with the consumer,
which then promotes higher hotel performance. As a result, revenue
management optimization should be flexible enough to accommodate and to
take into account purchasing trends in line with consumer behavior to promote
a higher response rate through various social media distribution channel.
As consumer channel choices continue to expand through an increasing
range of internet systems that improve the offered pricing capabilities,
alternative modes of pricing and revenue management optimization have
arisen (Anderson, 2012). However, it was observed that the reality of day-to-
day hotel operations has been quite different: many hotels continue to use
traditional pricing approaches and distribution channels. Consumer willingness
to pay, expenses, and the competitive environment all play a role in this price
optimization. Obtaining in-depth, credible information through observations,
interviews, and focus groups, according to Arendt et al. (2012), adds depth and
breadth to hospitality studies. However, because of the high turnover in the
sector, recruiting and retention are difficult to maintain during research. When
doing food safety research in the hotel business, qualitative research
approaches such as observations, focus groups, and interviews proved to be
successful. Qualitative methodologies have a position in hospitality research.
This methodology should be used in accordance with the study goal and
questions. However, stringent criteria must be maintained throughout the

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research process, regardless of whether the research approach is qualitative,

quantitative, or a combination of both. Researchers might adopt a proactive
approach to implementation by recognizing potential problems in advance.
Researchers can take a proactive approach to implementing techniques and
ensure that stringent standards are kept throughout the qualitative research
process by anticipating potential problems in advance.
According to worldwide regulations and recommendations for food
outlets, food handler training must contain information dealing with both food
quality and personal cleanliness. Personal hygiene, food safety, best practices,
Hazard Analysis and Critical Control Point (HACCP), workplace cleanliness,
hand washing, and basic microbiology are the most common subjects
addressed to food service staff during training (Medeiros et al., 2011). Capable
of managing tables as renewable resources and combining different table sizes,
restaurants can increase expected revenue and generate a higher revenue than
conventional strategies used to support decision making (Guerriero et al., 2014).
According to Medeiros et al. (2011), interactive media, notably audiovisuals,
films, and lectures, as well as recreational activities including hands-on courses,
appear to be the most frequently approved resource, all of which provide more
advantages to trainees. It was also noted that training-specific theoretical topics
were presented. Hands-on activities are frequently coupled with other
instructional approaches and related to hand washing habits throughout
training. Hand washing is not only inexpensive, but it is also well-accepted by
staff, resulting in improved food safety. Through pre-and post-training
evaluation procedures, training evaluations assessed the information obtained
by employees. Establishing online channels and delivering online discounts
through business partner partnerships with third-party websites, according to
Zheng and Guo (2016), have emerged as key and effective marketing methods
in the restaurant industry. It argues that for all establishments, neither
participation nor online price discounts should be encouraged. Furthermore,
internet price discounts boost client loyalty, encouraging customers to place
repeat orders. It enhances the company's production and earns a small profit,
which can quickly grow due to increased demand for the discounted product.
This will provide businesses an advantage in pricing methods when they
compete online.
In terms of product/service offering, restaurant owners assessed the
availability of a range of foods and beverages, the sanitation and cleanliness of
the restaurant and its surroundings, and timely polite service. Cost/expense of
the product was the primary basis in setting prices of products. Whereas,
advertising and sales promotion were the top promotion tools used by
restaurant owners (Domingo, 2018). Certified managers and workers have more
food safety awareness than noncertified managers and workers, according to
Brown et al. (2014). Furthermore, managers and workers who spoke English as
their first language had more understanding of food safety than those who did
not. Working in a chain restaurant, working in a larger restaurant, having more
experience, and having more responsibilities were also linked to improved food
safety awareness. These findings suggest that food safety knowledge increases

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with certification, and that there are complicated interactions between

restaurant, management, and worker attributes and food safety knowledge.
Furthermore, one of the few easily adjustable aspects associated to food safety
knowledge is food safety certification. Other food safety knowledge-related
criteria, such as restaurant ownership and language abilities, are more difficult
to modify than certification status. According to Alberca and Parte (2018), firm
size's operational efficiency is affected by firm size, showing that large
restaurants perform better than medium-sized and small restaurants. Moreover,
the evidence suggests a link between the efficiency index and financial
variables, such as credit ratings, probability of default or bankruptcy, leverage,
cash flow, and a link with non-financial variables, such as type of auditor.
The emergence of common concerns for all entrepreneurs in the post-
pandemic restaurants business, measures to be implemented by governments,
and strategies and lessons learned for the future, revealed Madeira et al. (2021).
In the restaurant industry, resilience with a view to the future, fears of lack of
appropriate measures from the government, strategies for a more immediately
available market, and working capital creation are visible concerns. According
to Min and Min (2011), one of the most essential service attributes for fast food
restaurant consumers' perceptions of service quality is food flavor. This
predilection has remained constant throughout the years. They also discovered
a pattern of link between overall consumer satisfaction with the fastfood
business and its reputation through word of mouth. Customers also favored
easily accessible and national fast food restaurant chains over less accessible,
newer, and regional equivalents. They also discovered that the influence of
"atmospheric" impressions, such as restaurant cleanliness, appears to be
relevant, because cleaner dining spaces may appear to consumers to be more
hygienic. That is to say, at a fast-food restaurant, freshly cleaned tables, chairs,
and floors can help to improve consumer perceptions of service quality and, as
a result, customer retention. It's also not unexpected that individuals frequent
fast-food restaurants because of their speedy service. Customers at fast food
restaurants are still seeking for low-cost or low-value meals. In current period
of global economic crisis and rising food prices, a major price rise without a
clear change in food flavor or physical restaurant surroundings might
jeopardize the viability of fast-food restaurants. According to del Mar Alonso-
Almeida et al. (2013), increasing your customer base will help you
convert more customers and improve your sales and leads to higher profits. A
business with a firm financial position and improved market share can
generally receive financing with little trouble. Wang (2012) stated that the
company is more likely to address an emerging trend or niche market,
increasing its competitiveness through the offering of new green products or
services. Employees are increasingly attracted to environmentally responsible
companies. It could lead to more investment, customers, and loyalty for
stakeholders. Petree et al. 2012 said that compared with workers in control
stores, workers in Team Resilience-trained stores showed significant reductions
over time in exposure to problem coworkers and in personal stress. Training
and promotion help reduce stress among workers. It boosts their self-esteem

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and productivity. Through this, workers are being motivated to become better,
the one that can handle restaurant pressure. Stressors such as work overload
and busy shifts are common examples of issues that negatively impact workers
of all age groups. However, the greater experience these workers have may also
bring a different perspective on the significance of these behaviors. Similarly,
workers with more tenure reported more personal stress. This may be due to
their greater likelihood of juggling the demands of work with other aspects of
life.
According to Akroush et al. (2013), there are six dimensions to internal
marketing: recruitment, personnel training, internal communications, employee
motivation, safety in employment, and retention of personnel. Personnel
recruitment had the most significant impact both on employee motivation and
on the quality of internal service. A strategy that balances quality of service and
cost produces maximum profit. The traditional view of the conflict between
service quality and cost can be overcome from a cross-disciplinary marketing
and business perspective (Hwang et al., 2010). In Kim et al. (2013), four
attributes of health are essential to increase the value perceptions of the value,
satisfaction, and revisit intentions of the diners. These are nutrient information,
fresh and natural ingredients, weight control, and a nutritionally balanced diet.
Scholars have concentrated on serving robots, according to Jang and Lee (2020),
since their features are regarded the essential components for measuring
consumers' perceived value. These factors can help them decide whether or not
they want to return. They argue that, despite labor constraints caused by an
increase in the minimum wage, deploying efficient serving robots might be a
wonderful approach for attracting more clients, especially given that non-
contact services are in the focus owing to the COVID-19 epidemic. Furthermore,
consumers' unambiguous intents to return to restaurants may be the most
crucial component in the restaurant's long-term viability.
According to Shapiro (2017), consumers conclude that purchasing a
bundle was a gain because of the lower cost and greater perceived value. This
was consistent with the notion that bundles were more desirable because
consumers felt they were getting more value when buying bundles than when
purchasing items individually. There are benefits of selling items in a bundle.
Many companies utilized bundling but there is still more research to be done on
its effect on spending. Consequently, the increased use of bundled meals as a
marketing tactic in fast food restaurants creates adverse effects, such as rising
obesity rates. Three themes emerged to engage people in the workplace,
according to Osborne and Hammoud (2017): (a) incentives and recognition, (b)
empowering individuals, and (c) developing a link between leaders and
employees. If business leaders include these three concepts into their leadership
style, they may be able to boost the company's development potential.
Successful employee engagement tactics are crucial to organizational
performance, and leaders who implement them must have effective listening
skills, be fair, have and display respect, establish trust, and understand their
employees' issues.

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METODOLOGY
This study used the quantitative research design. The study was
conducted in Tuguegarao City, Philippines. The respondents of this study were
the managers from the registered restaurants in Tuguegarao City. A total of 55
restaurants were obtained using the simple random sampling to represent the
totality of the population. Out of all the registered restaurants in Tuguegarao
City, the restaurants were picked through the method of lottery. In this method,
the researchers gave each restaurant a number. From this, the researchers chose
random samples using a random number generator application. The
researchers used a self-made questionnaire to gather the data needed in the
specific problems of the study. The questionnaire was validated by three (3)
field experts. After the validation process, the researchers’ statistician computed
for the value of the reliability of the questionnaire. The research instrument was
divided into three different parts. The first part is the restaurants’ profile. The
second part is the operational problems encountered by the restaurants. The last
part includes the strategies adopted by the restaurants to cope with the
problems encountered. The researchers used the frequency and percentage
distribution and weighted mean to properly conduct a scientific presentation,
analysis, and interpretation of data. The answers were organized, tallied, and
conclusions concerning the profile, operational problems, and coping strategies
was drawn out of these responses, and it was interpreted and analyzed by the
researchers with the help of the statistician for content validation and consent.
Frequency and percentage distribution was used in analyzing the restaurant’s
profile. The weighted mean was used to quantify and to evaluate the problems
encountered and strategies of the manager of the restaurants in Tuguegarao
city.

RESULTS
Table 1. Profile of the Restaurants
Profile Variables Frequency Percentage
Type of Ownership
Sole Proprietorship 34 61.80
Partnership 10 18.20
Corporation 11 20.00
Length of Operations
Below 1 year 3 5.50
1-5 years 28 50.90
6-10 years 11 20.00
11 years and above 13 23.60
Number of Employees
Less than 10 29 52.70
11-20 10 18.20
21 and above 16 29.10
Type of Restaurant
Casual Dining 14 25.50
Quick Service/Fast Food 38 69.10
In-Premise 3 5.50

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As gleaned in table 1, most of the restaurant respondents in Tuguegarao

City are in a sole proprietorship, with a frequency of thirty-four (34) or 61.80 %.
Also, most of them were in their 1-5 years of operation with the frequency of
twenty-eight (28) or 50.90 %. Further, it also shows out of 55 respondents,
twenty-nine (29) or 52.70 % of the restaurants have less than ten (10) employees.
Finally, most of the restaurants in Tuguegarao City are quick service/fast food
with thirty-eight (38) or 69.10%.
Table 2a. Operational problems encountered by the restaurants in terms of
food issues
Qualitative
Operational Problems Mean
Interpretation
1. The food preparation lacks mise-en-place. 1.85 Rarely
2. The foods offered are based on standard 2.20 Rarely
quality.
3. There is no variety of foods on the menu. 2.11 Rarely
4. The foods lack nutritional value. 1.62 Rarely
Mean 1.95 Rarely
Table 2a reveals the operational problems encountered by the restaurants
in terms of food issues. The table further discloses that the problem on the foods
offered are based on standard quality have the highest mean of 2.20, while the
problem that the foods lack nutritional value have the lowest mean of 1.62. Both
operational problems were rarely encountered by the restaurants in their
operations.
Table 2b. Operational problems encountered by the restaurants in terms of
employees and service reliability
Qualitative
Operational Problems Mean
Interpretation
1. The employees lack communication skills. 1.91 Rarely
2. The timeliness of the services of the 2.80 Sometimes
employees.
3. The restaurant is not designed for PWDs. 1.60 Rarely
4. The restaurant lacks a number of work force. 2.02 Rarely
Mean 2.08 Rarely
As gleaned in the table, the operational problems encountered by the
restaurants in terms of employees and service reliability. It further reveals that
the problem on the timeliness of the services of the employees have the highest
mean of 2.80 and was sometimes encountered, while the problem that the
restaurant is not designed for PWDs have the lowest mean of 1.60 and was
rarely encountered by the restaurants.
Table 2c. Operational problems encountered by the restaurants in terms of pricing

Qualitative
Operational Problems Mean
Interpretation
1. The restaurant lacks membership and loyalty discounts. 1.91 Rarely
2. The price of the food is expensive. 2.05 Rarely
3. The restaurant promotes food bundle/combo pricing. 2.80 Sometimes
4. The restaurant gives proper discounts or coupons. 2.73 Sometimes
Mean 2.37 Rarely

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Table above reveals the operational problems encountered by the

restaurants in terms of pricing. The table further discloses that the problem on
the restaurant that promotes food bundle/combo pricing have the highest
mean of 2.80 and was sometimes encountered by the restaurants. Whilst the
problem that the restaurant lacks membership and loyalty discounts have the
lowest mean of 1.91 and was rarely encountered by the restaurants.
Table 2d. Operational problems encountered by the restaurants in terms of
atmosphere/ambiance
Operational Problems Mean Qualitative Interpretation
1. The place is inconvenient. 1.55 Rarely
2. The place is noisy. 1.56 Rarely
3. The place doesn’t create comfort. 1.13 Never
4. The place invades customers' privacy. 1.15 Never
Mean 1.39 Never
Table exuded the operational problems encountered by the restaurants
in terms of atmosphere/ambiance. It further reveals that the problem on the
place is noisy have the highest mean of 1.56 and was rarely encountered by the
restaurants, while the problem that the place doesn’t create comfort have the
lowest mean of 1.13 and was never encountered by the restaurants.
Table 2e. Operational problems encountered by the restaurants in terms of location
Qualitative
Operational Problems Mean
Interpretation
1. The restaurant lacks parking space. 2.00 Rarely
2. The restaurant is far from residential areas. 2.04 Rarely
3. The restaurant needs to be improved its 2.00 Never
security.
4. Public transportation is not accessible in the 1.31 Never
area.
Mean 1.83 Rarely
Table conveyed the operational problems encountered by the restaurants
in terms of location. The table further reveals that the problem on the restaurant
is far from residential areas have the highest mean of 2.04 and was rarely
encountered by the restaurants, while the problem that public transportation is
not accessible in the area have the lowest mean of 1.31 and was never
encountered by the restaurants.
Table 2f. Summary of Operational Problems encountered by the restaurants
Qualitative
Operational Problems Mean
Interpretation
Food Issues 1.95 Rarely
Employees and Service Reliability 2.08 Rarely
Pricing 2.37 Rarely
Atmosphere/Ambiance 1.39 Never
Location 1.83 Rarely
Overall Mean 1.92 Rarely

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Table 2 shows the summary of operational problems encountered by the

restaurants. These operational problems were all interpreted as rarely
encountered by the restaurants such as (1) pricing, (2) employees and service
reliability, (3) food issues, (4) location, and (5) atmosphere/ambiance. The table
further reveals that most of the operational problems encountered were in the
pricing aspects of the restaurants.
Table 3a. Strategies used by restaurants to cope with the operational
problems they encountered on the food issues
Strategies Mean Qualitative
Interpretation
1. The use of social media as a distribution channel to 4.35 Often
promote pricing strategies.
2. The use of qualitative research methods such as 3.76 Often
observations, focus groups, and interviews when
conducting food safety.
3. Getting food safety certification that leads to a 4.37 Often
greater food safety knowledge.
4. Training food handlers in the workplace to improve 4.34 Often
their understanding of procedures.
Mean 4.20 Often
Table 3a exuded the strategies used by restaurants to cope with the
operational problems they encountered on the food issues. The table further
reveals that getting food safety certification that leads to a greater food safety
knowledge have the highest mean of 4.37, while the use of qualitative research
methods such as observations, focus groups, and interviews when conducting
food safety have the lowest mean of 3.76. Both strategies were often used by
restaurants in their operations.
Table 3b. Strategies used by restaurants to cope with the operational
problems they encountered on the employees and service reliability
Strategies Mean Qualitative
Interpretation
5. The development and provision of training courses to 4.36 Often
achieve behavioral changes and improve skills and
knowledge of employees.
6. The use of interactive media as a resource, particularly 4.02 Often
audiovisuals, videos, and lectures, in addition to hands-
on courses.
7. Building ramps for easy pathway for PWDs. 4.13 Often
8. Employee training and assessment on hygiene-related 4.63 Always
practices and attitudes.
Mean 4.24 Often
As gleaned from the table, the strategies used by restaurants to cope with
the operational problems they encountered on the employees and service
reliability. It further reveals that one (1) strategy, which is the employee training
and assessment on hygiene-related practices and attitudes with the highest
mean of 4.63, was always used by restaurants in their operations, and the use of
interactive media as a resource, particularly audiovisuals, videos, and lectures,

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in addition to hands-on courses have the lowest mean of 4.02 and was often
used by restaurants.
Table 3c. Strategies used by restaurants to cope with the operational
problems they encountered on the pricing
Strategies Mean Qualitative
Interpretation
9. Establishing online channels and online discounts by 4.20 Often
building business partner relationships with third-party
websites.
10. Offering discounts and membership cards to loyal 4.00 Often
customers as a token of their loyalty.
11. The use of product bundling as a marketing tactic. 4.16 Often
12. The use of product costing to ensure that the foods are 4.57 Always
correctly valued for providing reasonable pricing.
Mean 4.12 Often
The table exuded the strategies used by restaurants to cope with the operational
problems they encountered on the pricing. It further reveals that one (1)
strategy, which is the use of product costing to ensure that the foods are
correctly valued for providing reasonable pricing with the highest mean of 4.57,
was always used while offering discounts and membership cards to loyal
customers as a token of their loyalty with the lowest mean of 4.00 was often
used by restaurants in their operations.

Table 3d. Strategies used by restaurants to cope with the operational

problems they encountered on the atmosphere/ambiance
Strategies Mean Qualitative
Interpretation
13. Develops a Team Resilience program training 4.09 Often
designed to reduce stressors in restaurant work.
14. Develops a dynamic benchmarking that helps in 4.27 Often
sustaining service excellence.
15. Persuasive ideas of advertising and shifting the 4.64 Always
consumers’ tastes and preferences to increase product
variation.
16. The use of technological machines as a service 4.64 Always
provider.
Mean 4.22 Often
Table conveyed strategies used by restaurants to cope with the operational
problems they encountered on the atmosphere/ambiance. The table further
reveals that the two (2) strategies, namely: (1) Persuasive ideas of advertising
and shifting the consumers’ tastes and preferences to increase product variation
and (2) The use of technological machines as a service provider with highest
means of 4.64, were always used by restaurants in their operations, and one (1)
strategy which is to develop a Team Resilience program training deigned to

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reduce stressors in restaurant work with the lowest mean of 4.09 was often used
by restaurants.
Table 3e. Strategies used by restaurants to cope with the operational
problems they encountered on the location
Strategies Mean Qualitative
Interpretation
17. The use of closed-circuit television (CCTV) cameras 4.93 Always
inside and outside the restaurant to secure the
customers’ safety.
18. The use of delivery riders to accommodate the orders 4.89 Always
of customers that are far from the restaurant’s location.
19. The use of parking management practices. 4.27 Often
20. An excellent quality audio system and speakers with 4.52 Always
good background music to reduce inappropriate
sounds.
Mean 4.40 Often
As gleaned in the table, the strategies used by restaurants to cope with
the operational problems they encountered on the location. It further reveals
that the use of closed-circuit television (CCTV) cameras inside and outside the
restaurant to secure the customers’ safety with the highest mean of 4.93 was
always used by restaurants in their operations, and one (1) strategy, which is
the use of parking management practices with the lowest mean of 4.27 was only
used often.
Table 3f. Summary of Strategies used by Restaurants to Cope with the Operational
Problems they Encountered
Strategies Mean Qualitative Interpretation
Food Issues 4.20 Often
Employees and Service Reliability 4.24 Often
Pricing 4.12 Often
Atmosphere/Ambiance 4.22 Often
Location 4.40 Often
Overall Mean 4.24 Often
Table 3f shows the strategies used by restaurants to cope with the
operational problems encountered. These strategies were all interpreted as
often used by the restaurants to cope with the operational problems in terms of
(1) location, (2) employees and service reliability, (3) atmosphere/ambiance, (4)
food issues, and (5) pricing. The table further reveals that most of the strategies
of the restaurants were used to cope with the problems on the location.

DISCUSSION
Profile of the Respondents
Well-formulated strategies that can adopt any circumstances have been
an ace of every restaurant to control whatever operational problems they are
going through. Different restaurants have their own stories of the problem, and
as a hospitality management student, it was agreed by the researchers to
conduct a study on operational problems and strategies of restaurants,

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particularly in Tuguegarao City. The study jives with the conclusion of

Cagurangan (2017), that local restaurant managers have shared common
problems and challenges about the values, performance and competence of
their employees, as well as training and seminar. Food quality, service quality,
price, and atmosphere have been the variable that contributes mainly to the
customer's satisfaction, the intention of going back, and the chance of
recommending the restaurant. However, it all depends on the type of restaurant
itself (Chun and Nyam-Ochir 2020).
The findings revealed a total of fifty-five (55) restaurant
owners/managers in Tuguegarao City who participated in this study. The
restaurant profile was classified in terms of the type of ownership, length of
operations, number of employees, and type of restaurant. Regarding its type of
ownership profile, those sole proprietorship restaurants scored the highest
participation, followed by corporation and partnership. It indicates that the
majority of the restaurant respondents are sole proprietors in Tuguegarao City,
which further describes that they are owned and managed by one individual
only. It is because, proprietorship is much simpler, and it requires no legal
filings when starting the business. A sole proprietorship is the most common
business structure, even though the business is not legally separate from its
owner. The primary reason that many choose to start a business as a sole
proprietorship is that they do not have to make choices, get professional advice,
or spend any money (Hodge, 2014).
Similarly, the length of operations in most of the restaurants in
Tuguegarao City is between 1-5 years only. This describes that most of the
respondents are newly established. The result further revealed that the number
of employees in these restaurants has less than ten (10) employees, which
suggests that it manages a small number of workers, and it seems manageable
by the restaurant owners. Moreover, the majority of these restaurants are quick
service/fast food. One of the reasons why fast-food restaurant always hits the
spot in every meal is its convenience factor. Fast food restaurants prepare a
meal in a mere time, allowing a customer to get a full meal in an instant
compared to other types of restaurants; that’s why fast-food restaurants boom
in the area. According to the American Dietetic Association (2019), fast food is
popular because it’s convenient, cheap, addictive, and tastes good. One of the
factors making fast food popular is that it is convenient. Not only can people eat
fast food “while steering the wheel of a car,” but they are “easy to get to.”
Today, people are very busy with their working lifestyle as they tend to find
fast foods as a good choice, and the packaging makes it easy to take away or
bring it wherever you go (Utaru, 2014).

Operational Problems encountered by the Restaurants

On the other hand, the operational problems by the restaurants were
rarely encountered in terms of food issues, employee and service reliability,
pricing, atmosphere/ ambiance, and location. This implies that restaurants have
rarely encountered these operational problems because they anticipated this
kind of problem ahead of time and are prepared in anything that concerns the

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restaurant's productivity, promotion, and operation. However, it was

illustrated that the most notable operational problem was the restaurant
pricing, followed by employees and service reliability, food issues, location, and
atmosphere/ ambiance, respectively. This implies that restaurants in
Tuguegarao City have shared common operational problems regardless of their
profile. This has been a problem in the past and they cannot go about, simply
because of high competition in the area. Competition because every restaurant
caters to the same target market. The restaurant industry is intensively
competitive, marked by a history of price wars and product differentiation.
With minimal switching costs and other conditions, customers can be fickle
(Hottovy, 2009).
The result reveals that problems on food issue particularly in food
preparation lacks mis-en-place, the foods offered are based on standard quality,
there is no variety of foods on the menu, and foods lack nutritional value were
rarely encountered by most of the restaurants in Tuguegarao City. It implies
that they are aware of this existing problem and anticipated it ahead of time
and formulate strategies to go about it. However, based on the results
according to the mean, foods offered are based on standard quality is the one
mostly encountered operational problems of the restaurants in Tuguegarao
City. This demonstrates that food quality isn't as important as how well it's
prepared and presented, especially in fast food. In terms of nutrition, fast food
is often lacking. Fast food frequently contains a variety of harmful ingredients.
It also lacks a number of essential nutrients (Huzar, 2021).
Based on the result on problems on employees and service reliability, the
timeliness of the services of employees was encountered sometimes by the
different restaurants as a problem. This implies that employees lacked
flexibility and training and sometimes does not execute the proper form of
work that leads to problems on the timeliness of service. The most essential
thing a restaurant can do to deliver good customer service is to value the time
of its customers. As a result, punctuality is not only a desirable trait at a
restaurant, but it is also a fundamental practice that every restaurant should
follow. Time management is an important skill for any professional to learn,
especially in the restaurant sector, where punctuality is intimately linked to
excellent service quality. According to research, restaurants that emphasize
timeliness in pre-shift briefings give guests with a better overall experience.
And when all departments make the most of their time, the restaurant as a
whole functions smoothly (Cvetkovic, 2021). On the other hand, other
operational problems such as employees lack communication skills, the
restaurant is not designed for PWDs, and restaurants lack number of employees
were rarely encountered by the restaurants. It shows that most of the
restaurants in Tuguegarao City is prepared to provide services as soon as their
establishment opens.
Going further, the result on operational problems encountered by the
restaurant according to pricing shows that restaurant promotes food
bundle/combo pricing was sometimes a problem encountered by many
restaurants. This implies that restaurant has a fixed price on any item they have

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and they find it hard to offer combo pricing because it may change something
in the production of restaurant. Bundling can also have a detrimental influence
on the sales of your most popular items. Customers may be unlikely to pay
more on your popular product if you bundle less popular things with it and
boost the price, even if they are getting additional stuff. Another disadvantage
of price bundling is that the corporation must provide certain discounts for the
combined product or service, resulting in revenue loss (Parikh, 2016).
Moreover, other operational problems such as restaurant gives proper discount
was also encountered sometimes, while restaurants lack membership and
loyalty discount and the price of food is expensive was rarely encountered by
the restaurants.
In the operational problems on atmosphere/ambiance, the result shows
that the place is noisy was mostly encountered problem of the restaurants. It
shows that the majority of the restaurants was located roadside and is expected
that the noise of vehicle is heard. Tuguegarao City is busy every day, and that
noise coming from different establishments and vehicles is on different places.
Other operational problems such as the place is inconvenient was rarely
encountered by the restaurants, while the place doesn't create comfort and the
place invades customer privacy were never encountered by the restaurants.
This implies that the restaurant is well accommodating; it provides relaxation
and ensures the privacy of its customer. The actual comfort of the sitting, music
and noise levels, their relationship with the waiters, the enthusiasm the staff
radiates, and many other aspects of the dining out experience may all
contribute to a comfortable atmosphere. Finally, a welcoming environment is
defined by how all of these characteristics make people feel (Montes, 2019).
According to the operational problems in terms of location, restaurant is
far from residential area was mostly encountered by majority of restaurant
respondent. This implies that majority of restaurant is located on commercial
center part of the city away from residential. On the other hand, operational
problems such as restaurant lacks parking space was rarely encountered, while
the restaurant needs to improve security and public transportation is not
accessible in the area was never encountered by the restaurants. This implies
that security in the restaurants was safeguarded and vehicle is not a problem
since there are lots of tricycle in the city.

Strategies used to cope with the Operational Problems

Looking further at the result of the present study, restaurants use various
strategies to cope with the operational problems they encounter. Regarding
food issues, it revealed that strategies are only used often, such as using social
media as a distribution channel, using qualitative research methods, getting
food safety certification, and training food handlers in the workplace. This
result implies that some restaurants in Tuguegarao City still got something
missing in their operation, which is present in today’s era. Many restaurants
still cannot adopt the new way of providing services and still prefer the
traditional way of delivering food because most people are used to it. This
result of the study agrees with Cardello et al. (1996) that home and traditional

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ways of giving service and orders of restaurants still ranked higher than any
other restaurant that is advanced. Direct cashier ordering has also helped the
restaurant reduce the wait times, improve accuracy, and most importantly,
boost check sizes-benefits that just about any restaurant can enjoy.
Based on the result of this study, the strategies for employees and service
reliability showed that employee assessment on hygiene-related practices and
attitudes is always adopted to cope with the problems. This implies that
employees who perform activities related to food handling have adequate
learning, the skills, and the necessary training to become competent when it
comes to food safety. The organization is responsible for monitoring and
checking if employees have these competencies, and if not, they have to provide
proper training provided they too must have been trained. All people involved
with food must be aware of their role and responsibility in food safety.
According to Codex Alimentarius Commission (2015), food safety is the
assurance that food will not cause harm to the consumer where it is prepared
and/or eaten according to its intended use. Food handlers must have the
necessary knowledge and skills to handle food hygienically. Other strategies in
employees and service reliability such as the development and provision of
training course, the use of interactive media as resource, and building ramps for
accessible pathways for PWD’s were only often used. It implies that some
restaurants are small with limited resources to go about these strategies and
perform in actual operation. They make their budget devoted to the primary
need of the restaurant; if ever they have built a budget about it, they can go
over this.
Moreover, the strategies related to pricing, the use of product costing to
ensure that the foods are correctly valued by providing reasonable pricing is
always used by the restaurant. This finding implies that offering discounts and
promos on every purchase catch customer’s attention and tickles their minds to
realize that they can still save money in buying. According to Yuan (2012), one
of the primary strategies for a new product is offering low costs with higher
discounts. The other strategies related to pricing, such as establishing online
channels and online discounts, offering discounts and membership cards, and
using product bundling as a marketing tactic were used only as often. This
implies that some restaurants don’t have enough revenue to afford offer
discount. This further means that the product is fixed, and the revenue is not
that much to expect.
For atmosphere/ambiance strategies, persuasive ideas of advertising and
shifting consumers' taste, and the use of technological machines as a service
provider is always used. This means that the selection of the menu provides
new and unique guidance to the customer. One of the tactics for enticing
consumers to eat in, according to Tinne (2012) and Ozdemir and Caliskan
(2014), is to regularly refresh menus by presenting a new and enhanced range
of diverse menu items. Menu acts as the main body, which gives a signal on
what operations to use, the ingredients and stocks needed, and the equipment
to be used. Technological machines make work easier; just click the right
button, encode correct information, and that's it. It made every transaction clear

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and documented. The other strategies related to atmosphere/ ambiance include

developing a team resilience program training designed to reduce stressors in
restaurant work and developing a dynamic benchmarking that helps in
sustaining service excellence is only used as often. This suggests that some
restaurants are not into training that concerns employees' mental health and the
benchmarking to maintain service excellence, but they give into the demand
and customer satisfaction.
Moreover, the use of closed-circuit television, the use of delivery riders,
and an excellent quality audio system were always used to cope with the
location's problem. CCTV makes fewer personnel guarding establishments, but
it can capture and track every person going in and out. Also, delivery riders fill
the distance between customer and restaurant since it connects customer and
restaurant door to door. Excellent audio system/ music improves the
atmosphere in the restaurant. According to Magnini and Parker (2009), music
can calm the customers waiting for their food or await their family/relatives or
colleagues and spend additional time on the restaurant. However, the parking
management practices was only used often. This implies that some of the
restaurants’ respondent size of establishment is exactly on the size of a lot
where it was built or there is only a limited area of space for parking

CONCLUSIONS AND RECOMMENDATIONS

The operational problems faced by restaurant managers in Tuguegarao
City and the strategies they employ were explored in this study. Based on the
findings of this study, it is concluded that the majority of respondents were sole
proprietors with one (1) to five (5) years length of operations, had less than ten
(10) employees, and were classified as quick service or fast-food restaurant.
Moreover, restaurant establishments rarely faced the following operational
problems: (1) pricing, (2) employees and service reliability, (3) food issues, (4)
location, and (5) atmosphere/ambiance. Additionally, most of the restaurants
encountered operational problems in the (1) The restaurant promotes food
bundle/combo pricing, (2) The timeliness of the services of the employees, (3)
The foods offered are based on standard quality, (4) The restaurant is far from
residential areas, and (5) The place is noisy. Similarly, it is concluded that the
coping strategies of these restaurants were used always; (1) The use of
technological machines as a service provider; (2) Employee training and
assessment on hygiene-related practices and attitudes; (3) The use of product
costing to ensure that the foods are correctly valued for providing reasonable
pricing; (4) The use of delivery riders to accommodate the orders of customers
that are far from the restaurant’s location; and (5) The use of closed-circuit
television (CCTV) cameras inside and outside the restaurant to secure the
customers’ safety.
The researchers recommend that future studies be conducted to compare
the research results and acquire in-depth knowledge about restaurants'
operational problems. In addition, it is suggested that future studies should
further evaluate other possible factors that can positively or negatively affect
the restaurant's operational problems. The results acquired by the study can

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also be increased by broadening the scope expanding the number of

universities or institutions participating in the study. Moreover, the researchers
suggest that since there's no difference in the operational problems when it
comes to group according to the type of ownership, future research should
identify the operational problems based on the type of ownership and check the
difference of strategies from the operational problem. The researchers also
suggest that the Department of Trade and Industry devise guidelines on the
identified operational problems and strategies to guide restaurants. In addition,
they may conduct workshops or seminars and establish an organization for
restaurant managers in the City for continuous connections and strengthen
their operations sufficiently. To further intensify our knowledge about
restaurants' operational problems and strategies, the researchers propose that
the strategy gathered to be presented to the restaurants that didn't become part
of respondents. The researchers recommend to the respondents to eliminate the
operational problems that may potentially occur based on the data gathered
provided by the researchers and identify better strategies for a well-ordered
operation of their restaurants.

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