Restaurant QSC inspections and financial performance: an empirical investigation

Purpose – The purpose of this paper is to determine the relationship between QSC (quality, service and cleanliness) inspection scores and financial performance in quick service restaurants. Design/methodology/approach – Restaurant QSC inspection data were collected from 25 quick service restaurants of an international chain over a period of 18 months. Audited financial data were also collected for these participating restaurants. Using SPSS software, the data were analyzed for possible relationships between the restaurant QSC scores and the financial performance measured as total unit sales per week, revenues per available seat per week, and gross operating income for each month. Restaurant unit size is measured by total revenues per month. Findings – Contrary to the commonly held belief, the relationship between QSC variable and restaurant performance is weak. This study found there was a “V” curve in QSC inspections and financial performance when restaurant size was chosen as the moderating variable. Research limitations/implications – The specific items measured in the QSC may differ across organizations, although the broad categories remain constant. Certain operational factors such as price changes, special promotions, additional restaurant openings in the specific area, and local economic conditions could have confounded the results. Practical implications – The knowledge obtained from this study could help restaurant organizations determine the level of weighting given to a specific inspection variable. This study also suggests the use of FQSC inspections instead of traditional QSC to emphasize financial performance (F). This study demonstrates the liability and limitations of tying QSC inspections to merit raises and bonus plans as normally done in restaurants. Originality/value – This paper is the first empirical study to analyze the QSC inspections of restaurants related to financial performance. In contrast to the past studies with food safety/health inspections, the current study focuses directly on QSC inspections conducted more frequently and in greater detail by the quick service restaurants with emphasis on operational and financial performance.