Lyceum of the Philippines University – Manila

Claro M. Recto Academy of Advanced Studies

GS-INTERNATIONAL RESTAURANT MANAGEMENT

CASE STUDIES IN INTERNATIONAL
RESTAURANT MANAGEMENT

by Beatriz Fina A. Cañedo

Ph.D. in International Hospitality Management
PRESENTATION ORDER
 Brief Summary
 Time Context
 Theoretical Underpinnings
 Situational Analysis / Scope
 Statement of Minor/Critical Concerns
 Areas of Consideration
 Implications
 Alternative Courses of Action
 Decision
 Strategy Formulation/Implementation
 Outcomes
 Case Study No. 1

CREDIT CARD HEIST AT

HEARTBREAK CAFE
I. BRIEF SUMMARY
 Heartbreak Café is an upscale fast-casual restaurant located in
a US international airport owned and operated by Tom Petrov,
a Russian immigrant in the United States of America, who
grapples with the consequences of a payment-card breach
because of inadequate firewall in its system, using outdated
POS System
 On July 2011, customers, airport employees, and even Tom
discovered fraudulent acts of stolen information and
unauthorized charges on the credit and debit cards.
 After a full forensics investigation by the US Secret Service,
confirming there was a security breach in its system, Tom
made significant changes to Heartbreak Café’s network and
made sure the POS system used is secure and is PCI-DSS
compliant.
II. TIME CONTEXT
 After filed reports and discovering fraudulent acts of
stolen card information and credit card charges, on July
6th of 2011, a crimeware was detected during the second
server scan conducted by the U.S. Secret Service at the
POS system of Heartbreak Café at a US international
airport, subsequently making its network shut down
immediately by the owner Tom Petrov.
III. THEORETICAL UNDERPINNINGS
 This case is grounded on the importance of understanding
technology used in restaurants with the basic components
of payment card and network security for cybersecurity in
restaurant operations and enterprise risk management.
 The prevalent and ever-expanding threat of cybercrime
means that comprehensive strategies for cybersecurity and
having an effective and well planned ERM framework are
now absolutely essential for all organizations, including the
restaurant industry.
IV. SITUATION ANALYSIS/SCOPE
 Heartbreak Café adopted to new technologies to enhance
customer experience and improve operational efficiency,
but it has also increased their vulnerability to cyber-attacks.
 With Heartbreak Café operating inside a US international
airport, the customers can come from all over the world
aside from those employees working in the airport;
customers and the business are all at risk to cyber-attacks.
 Heartbreak Café have high volume of card transactions and
the low level of security in place because of its location.
V. STATEMENT OF MINOR/CRITICAL CONCERNS
 Why is it important for Heartbreak Café to give priority to
its payment card security?

 What strategies can Heartbreak Café implement in order to

control cyber-attacks in its operations?
VI. AREAS OF CONSIDERATION
HEARTBREAK CAFÉ SWOT ANALYSIS
STRENGTHS
• Strong and valuable brand with high accessibility
and strong customer base
• Uses technology in its restaurant operations like
the POS System
• Owner and operator has gained success because
of his passion in the restaurant business
OPPORTUNITIES
• Diversification of new products, using “glocal”
strategy to suit local market and attract different
food experience amongst travelers with a window
for delivery service and airline meal partnership
• Window for delivery service and airline meal
partnership using mobile POS
• Rapid demand for restaurant innovation includes
cashless transactions and use of modern POS
systems
WEAKNESSES
• Dependent relationship with travelers and
airport employees
• POS system is vulnerable to crimeware and
updating/upgrading to advanced POS systems is
expensive and being PCI compliant is exhausting
• Owner and operators lack technology
sophistication
THREATS
• Fierce competition from cheaper food
establishments with more seating capacity in
the airport
• Cybersecurity issues is always at threat
• Resistance to change and availability of
modernization funds
VII. IMPLICATIONS
 Heartbreak Café needs to consider implementing payment
technologies, risk controls, and risk transfer solutions to
protect the restaurant business. If Heartbreak Café will not
give priority to its payment card security and will not do
any risk management strategies to control cyberattacks,
every time it makes online transactions, it will not protect
their clients and the business against identity theft and
fraudulent card transactions jeopardizing the good
reputation that it has established which can lead to more
serious problems like law suits from clients, imprisonment
of owner, and eventually closing down of the business.
VIII. ALTERNATIVE COURSES OF ACTION
These are the possible actions that Heartbreak Café can do in
order to protect customer information and business from
being vulnerable as cyber thieves’ target:
1. Obtaining a PCI compliant POS system.
2. Securing data storage in the cloud.
3. Implementation of a cybersecurity risk management
strategies in all of the restaurant’s operation.
IX. DECISION
 Implementing cybersecurity risk management strategies
in all of the restaurant’s operation is the best and viable
action Heartbreak Café can apply in its outlet at a US
international airport.
 It is very important for Heartbreak Café to be proactive by
having risk management plan. This can be done by
executing appropriate and industry-effective strategies for
the application of security.
X. STRATEGY FORMULATION AND
IMPLEMENTATION
Heartbreak Café Cybersecurity Risk Management Plan
Key Activities Responsible Person Timeline
Identification of PCI compliant POS system:
Heartbreak Café Owner/Operator
use only modern, secure payment Week 1
Cybersecurity Consultant/IT Expert
technology.
Identification of all vulnerable points in the Heartbreak Café Owner/Operator
Week 1
restaurant operations Cybersecurity Consultant/IT Expert
Securing of all digital tools in the restaurant:
secured WIFI password, updated antivirus, Heartbreak Café Owner/Operator
Week 1
use of firewall to separate devices, PCI Manager
compliance

Background check employees Heartbreak Café Owner/Operator Week 1

Training of employees on transaction fraud:

Cybersecurity Consultant/PCI Trainor
identity theft, credit card tumbling, refund
POS Trainor Week 2
fraud; restaurant technology; PCI
Cybersecurity Consultant/IT Expert
compliance; email phishing; cybersecurity;
X. STRATEGY FORMULATION AND
IMPLEMENTATION
Heartbreak Café Cybersecurity Risk Management Plan
Key Activities Responsible Person Timeline
Heartbreak Café Owner/Operator Weekly
Proactive monitoring the network POS System Provider Upgrades done upon
Cybersecurity Consultant/IT Expert availability
Prepare and execute an incident response Heartbreak Café Owner/Operator
Week 3
plan Cybersecurity Consultant/IT Expert
Heartbreak Café Owner/Operator
Create a long-term public relations plan Week 3
Cybersecurity Consultant/IT Expert
XI. OUTCOMES
 It is therefore very important for restaurants such as the
Heartbreak Café to implement a cybersecurity risk management
plan. With the deployment and implementation of these action
plans, confidentiality of information that is sensitive and should
only be shared with a limited number of people will be safe, thus
maintain strong brand reputation; integrity will be remained, thus
thwarting client and business information from being altered; and
availability of cyber-attacks is prevented from cyber thieves who
would like to gain access of the restaurant’s computer, or from
accessing the internet.
 As Heartbreak Café and the rest of the restaurant businesses that
need to collect huge amounts of sensitive payment data,
implementing a cybersecurity risk management plan should be a
priority for the restaurant’s team in order to protect the business
while being able to enhance customer experience.
References:

Bean, Casey. 2019. Top 11 Ways to Control Cyber Risk at Your Restaurant. BKS Partners. Retrieved from https://bks-
partners.com/control-cyber-risk-2/ on July 25, 2019.

Collins, Galen. 2013. Credit Card Heist at the Heartbreak Café. Journal of Hospitality and Tourism Cases. Vol. 2, Issue No. 1,
pp 30-34. International Council on Hotel, Restaurant, and Institutional Education. Retrieved from
https://www.chrie.org/i4a/pages/index.cfm?pageID=3550 on July 23, 2019

Lavu.com. 3 September, 2018. 5 Simple Ways to Boost Your Restaurant’s Cybersecurity. Retrieved from
https://www.lavu.com/blog/5-simple-ways-boost-your-restaurants-cybersecurity.html on July 25, 2019

Taylor, Susan J. 20 January, 2019. 7 Tips to Secure Cybersecurity in Restaurants. Retrieved from
https://upserve.com/restaurant-insider/cybersecurity-in-restaurants/ on July 27, 2019.

Tripwire. 14 April, 2019. Why Cyber Security is Key to Enterprise Risk Management for all Organizations. Retrieved from
https://www.tripwire.com/state-of-security/security-data-protection/cyber-security/cyber-security-enterprise-risk-management-
erm-organizations/ on July 26, 2019.

Walker, John R. 2014. The Restaurant: From Concept to Operation. Seventh Edition. John Wiley and Sons Inc. New Jersey,
USA.
 Case Study No. 2

EVOS ORIGINS
I. BRIEF SUMMARY
 EVOS was founded by friends Crasas, Jeffers, and in 1994, in
Tampa, Florida. It is a fast-casual restaurant offering typical all-
American fast-food items that people love to eat, but re-
creating them with better ingredients and healthier
preparation techniques.
 EVOS is committed to having healthy and sustainable practices
in kitchen operation which makes their food fresh, high in
quality, and unique.
 The owners of EVOS have faced many challenges from the
beginning, including start-up and operational issues.
 EVOS has many goals moving forward as a company and the
most general goal is bringing healthy fast food to America.
II. TIME CONTEXT
 The challenge of EVOS started during the commencement of
the business operations in 1994. EVOS is a fast-casual
restaurant offering modern twists on the all-American fast-food
favorites while implementing healthy, ecological, and
sustainable practices. Since there is only one of the three
owners who had a previous background in restaurant business,
there is limited to none comparison, references, and suppliers
knowledge which tested the capabilities of the owners to
operate which consequently challenged the owners to a higher
food cost and additional operational cost.
III. THEORETICAL UNDERPINNINGS
 This case is based on the importance in the knowledge of
restaurant concepts and operation. EVOS had its
challenges from the moment they started the business.
Even though the owners know what they wanted to offer,
they lacked research and experience in operating a fast-
casual restaurant.
 Fast-casual restaurant is filling a niche between quick
service and casual dining.
 The concept will be critical in determining not just how
customers perceive and experience their restaurant, but
how to run and operate it.
IV. SITUATION ANALYSIS/SCOPE
 Competition is fierce for fast-casual restaurants. Therefore,
this type of operation needs highly skilled personnel on
site, in the case of EVOS, only one of the owners have a
previous restaurant background but it is not specifically
with the same type of restaurant concept.
 They had firsthand experience of learning the ropes of
running a fast-casual restaurant business with a unique a
sustainable concept the hard way. However, by being able
to experience it by themselves, the owners were able to
overcome the challenges.
V. STATEMENT OF MINOR/CRITICAL CONCERNS
 What strategic actions can be done in order to pull through
from the lack of restaurant operations background of the
owners in terms of operating a healthy fast-casual
restaurant?
 What sustainable strategies can be implemented in the
business operations of EVOS in order to cut cost?
VI. AREAS OF CONSIDERATION
EVOS ORIGINS SWOT ANALYSIS
STRENGTHS WEAKNESSES
• Unique and upscale brand • Limited menu, high price points
• Committed to using healthy, organic and high • High food cost, dependence on limited small
quality ingredients farmers
• Observes ecological and sustainable practices • High operational cost
• Strong company culture with passionate owners • Needs training / enhancement in restaurant
who empowers employees operations, resistance to change

OPPORTUNITIES THREATS
• Addition of new “glocal” menu items • New entrants of fast casual markets

• Growing trend of healthy and eco-friendly • Fierce competition, increase of food safety
consumers regulations

• Adapt to restaurant sustainable innovations and • Economic stability, vulnerability to cybercrime

technology: urban tower farms for farm to table
concept, digital receipts, self-service kiosks
• Government regulations and requirements,
• International and local multiple expansion labor laws - experts might be needed
VII. IMPLICATIONS
 Before opening EVOS, the owners should gain a basic
understanding of the various ins and outs in operating a fast-
casual healthy, eco-friendly and sustainable restaurant by
immersing themselves in short courses, as well as, making sure
to stay updated in the latest issues and trends in restaurant
operations, culinary arts, entrepreneurship, technology and
innovation, sustainability. Though the owners are passionate
with their restaurant, it is a common knowledge amongst
restaurateurs that success in the restaurant business does not
come easily, and failure is not uncommon. The food industry is
a high-risk business proposition. There is a lofty level of
competition and a lot of details to be done perfectly. Being
able to stay updated and know how to analyze the restaurant
business is a big advantage in order to make sure it runs
profitably sustainable.
VIII. ALTERNATIVE COURSES OF ACTION
These are the possible strategic actions that EVOS owners
can do in order to recover themselves and be able to
successfully run a healthy, eco-friendly, and sustainable while
cutting down operational cost:
1. Capitalize on stronger corporate operational skills: urban
farming and digitalization of operations.
2. Develop partnership with local farmer federation.
3. Hire an industry consultant on restaurant technology.
IX. DECISION
 Capitalizing on stronger corporate operational skills by
cultivating their own fresh ingredients like organic vegetables
and herbs, and incorporating restaurant operation digitalization
and knowledge building in modern restaurant technology is the
best strategy that EVOS can do to improve their operations by
cutting down cost while running a healthy, eco-friendly, and
sustainable fast-casual restaurant.
 Knowledge building and adapting to new restaurant
technologies can help EVOS become resource efficient that can
both create a competitive cost advantage and further reinforce
focus on sustainability at the same time.
X. STRATEGY FORMULATION AND
IMPLEMENTATION
EVOS Strengthening Corporate Strategies Plan
Key Activities Responsible Person Timeline
EVOS owners
Company Strategic Plan Week 1
EVOS employees
Research and Identification of Restaurant
Technology Solutions and Supplier
EVOS owners Week 2
for tower garden and restaurant
management systems
EVOS owners
Ideation and brainstorming on EVOS app EVOS managers
Week 3 - 4
features Restaurant Management Technology
Provider
Conduct of training for EVOS owners and
EVOS owners
employees on urban tower farming /
EVOS employees Week 3
rooftop gardening by Tower Garden
Tower Garden Expert
Supplier
EVOS Owners
Development of EVOS app Week 4 - 10
IT Expert/Consultant
X. STRATEGY FORMULATION AND
IMPLEMENTATION
EVOS Strengthening Corporate Strategies Plan
Key Activities Responsible Person Timeline
EVOS owners
Set-up of tower gardens and on-site
EVOS employees Week 4 - 12
hands-on training
Tower Garden Expert
Conduct of training for EVOS owners and
employees on restaurant management
solutions: EVOS owners
POS System EVOS employees
Week 4 - 12
Kitchen Automation Restaurant Management Technology
Bin Management Technology Provider
Automated Inventory Management
EVOS App
EVOS Owners
Weekly
Maintenance and systems checking and Tower Garden Supplier
Upgrades done upon
monitoring Restaurant Management Technology
availability
Provider
XI. OUTCOMES
 Making the choice to invest in restaurant innovations and
technology may not be easy. Choosing the most appropriate
innovation and technology should be a complement to or an
enhancement of EVOS’ great service.
 Tower garden’s low operational costs make it the smarter choice for
budget-conscious restaurants like EVOS. Adapting to digitalization
by taking advantage of restaurant management technology
solutions eliminates the need for paper receipts, invoices and
paper-reliant payment processing. It also offers substantial benefits
beyond reducing paper waste
 The long-term time cost savings and environmental protection
benefits make this sustainable restaurant management technology
choice worth the money every time. It just does not resolve its cost
issues, but also increases its customer experience, profitability and
sustainable competitiveness.
References:

Coffman, James. 14, March 2018. Why Rooftop Farming Is The Best Solution For Smart Urban Agriculture. Agritecture.com.
Retrieved from https://www.agritecture.com/blog/2018/3/14/why-rooftop-farming-is-the-best-solution-for-smart-urban-
agriculture on July 31, 2019.

Elkins, Michael. 14, May 2018. Why Your Restaurant's Concept Is Critical:
Making your restaurant stand out from competitors. Waiterio: Successful Restaurant. Retrieved from
https://www.waiterio.com/blog/en/successful-restaurant/why-your-restaurants-concept-is-critical on July 29, 2019

Eriksen, Kristin. 8, March 2018. 5 Benefits of Investing in Restaurant Technology. Deputy.com. Retrieved from
https://www.deputy.com/blog/5-benefits-of-investing-in-restaurant-technology on July 29, 2019.

Hill, Charles W.L., et al. 2014. International Business. Second Edition. McGraw Hill Education. New York, USA.

National Restaurant Association. 2011. Foundations of Restaurant Management and Culinary Arts: Level One. Prentice Hall.
New York, USA

Stanley, Caitlin. 11, January 2018. Everything You Need To Know When Choosing A Restaurant Concept. Revelsystems:
Industry Insights. Retrieved from https://revelsystems.com/blog/2018/01/11/choosing-restaurant-concept/ on July 29,
2019

Walker, John R. 2014. The Restaurant: From Concept to Operation. Seventh Edition. John Wiley and Sons Inc. New Jersey,
USA.
End of Presentation.

Thank you.