What Happens When A Restaurant Dies
February 5, 2015 4:28 AM   Subscribe

Before anyone posts any more comments about restaurant closings, watch a grown man break down in public as he recounts how 12 years ago he hung up the very pictures he now has to take off the walls.
Arrogant Swine proprietor and pitmaster Tyson Ho discusses what happens when a restaurant (not his!) closes its doors for the final time as part of a series on opening a barbeque restaurant in Brooklyn.
posted by ultraviolet catastrophe (24 comments total) 14 users marked this as a favorite
 
I'm supposed to feel something right?

If you open a restaurant expecting it to last ten years you're delusional. I have a friend who owns places around NYC and he is utterly unsentimental. He's always looking for the next hot location to put the current hot concept but he rolls them over as leases expire, neighborhoods gentrify, and the rent/earnings ratio narrows. Eventual closure is part of the business plan and this cat is very successful at it. Only naive people start a nyc restaurant out of love, passion, or some commitment to cuisine or community and they are either star chefs, in a tourist location, or independently rich.

It's a business not a baby.
posted by spitbull at 4:57 AM on February 5, 2015 [6 favorites]


It's like a cycle of bigger big eating the little ones and then dying, leaving their remains to be picked over by scavengers and reinserted into the culinary-mercantile ecosystem.
posted by Renoroc at 4:59 AM on February 5, 2015


That's how it's supposed to work in a capitalist city where eating is a form of entertainment. "New" is the most important category of establishment.
posted by spitbull at 5:02 AM on February 5, 2015 [2 favorites]


I really enjoyed this article. Thanks for posting. I didn't "feel" anything but it's definitely an interesting look at an NYC industry I don't know much about.
posted by josher71 at 5:22 AM on February 5, 2015 [2 favorites]


Thanks for posting this. I'm in the middle of trying to open up a (very) small shop in Tokyo, and while I haven't had to deal with most of this stuff (and won't, unless this shop works well enough for us to expand to another space), but it's a fascinating, sobering read.
posted by Ghidorah at 5:43 AM on February 5, 2015 [1 favorite]


I dunno, I think it possible to understand that this is how business works and that the restaurant owner had as pretty good run of it all things considered and at the same time to have some empathy with this poor human being who has had their pride and joy taken away from them by some be-suited shark.
posted by fatfrank at 5:45 AM on February 5, 2015 [25 favorites]


I've always been told restaurants are one of the most risky businesses to open. Fill in the blanks: huge percentage of new restaurants close/fail/go bankrupt within a certain number of years. I'm not going to fill in the blanks, because I don't want to quibble over the numbers, but I remember that it's a large percentage over a short time frame.

Adding the NYC environment seems like just an extra, brutal degree of difficulty, the article does mention that.
posted by gimonca at 5:45 AM on February 5, 2015 [4 favorites]


I recently visited a part of New York that I lived in 10 years ago I was amazed at how many mediocre restaurants are still in business. The restaurant business is much more about running an efficient business than it is about cooking good food.
posted by any major dude at 6:00 AM on February 5, 2015 [5 favorites]


I'm reminded of stories of when the Ground Round restaurant chain abruptly closed -- our local one got a "you're done" phone call and the staff had to go out and literally tell customers "sorry, but the dinner you ordered won't be coming out."

I knew a month ahead of time that this restaurant was closing, and I implored the owner to clue his staff in; some of them had been there for over a decade. They needed time to find jobs, prepare their finances for the hurt that was going to come, and begin a steady breakdown of the shop. Sadly they didn't get that chance. The owner was afraid that if they knew, they'd abandon the shop before closing day.

Asshole squared. Would he take a financial hit by being open about it? Don't care. Will some rats leave a sinking ship? Sure. But if the paycheck remains steady until the end, many won't, and there's the more important issue that if you treat your employees like they're human freaking beings some of them will return the favor.

Maybe this is life in the big city. Out here in the suburbs, or in the beach town where I vacation, real estate vultures certainly exist but the process is usually more civilized. A local burger joint is in the process of moving out of town due to a lease dispute, for example; he let his staff AND his customers know months ahead of time, scaled down his menu as the closing date approached, and kept enough goodwill that his new location will have many customers following him there.

I'd also be interested in reading a different story about this restaurant -- one interviewing the staff, the owner, the customers over the period of time in which the restaurant was having these "starve them out" issues with the leaseholders. It's not like the place was a roaring success and then BAM! gone; people other than the owner had to have seen problems.
posted by delfin at 6:06 AM on February 5, 2015 [8 favorites]


"New" is the most important category of establishment.

Not really, no. See:

I recently visited a part of New York that I lived in 10 years ago I was amazed at how many mediocre restaurants are still in business.

See also the popularity of chains and neighborhood haunts. People sometimes like novelty, but in general, people much more often prefer a significant amount of predictability and tradition.

Indeed, that's often a large part of why people want to open restaurants (a successful restaurant is well-ensconced in the community in a way that, say, a copy shop is not), but also a large part of why so many new restaurants fail (people usually already like what they like - it takes a certain je ne sais quoi to attract regular business).
posted by Sticherbeast at 6:10 AM on February 5, 2015 [2 favorites]


I have restaurant owning friends and they have insisted for a while that while the food is important, the lease is what will make or break a restaurant. The lease can either be an asset or a liability.

I found these blog posts fascinating. Learning about the beer buying business and the bar business is interesting. Understanding the dispute between restaurant diner and hotel landlord was also fascinating.

Thanks for the post.
posted by 724A at 6:15 AM on February 5, 2015 [1 favorite]


Only naive people start a nyc restaurant out of love, passion, or some commitment to cuisine or community and they are either star chefs, in a tourist location, or independently rich.

The restaurant business attracts a lot of dreamers. For some people, it's like the idea that they are going to Write A Novel one day, I think. They're going to create something that's meaningful and that's a form of self-expression. That's beautiful and all, but these folks are just on the killing floor if they don't get educated about how to run a business, and get some of the hard-headed spirit that you describe. I've heard stories about people who got jobs at restaurants where the owners had just no experience at all in either food service or business in general, and, of course, it's a disaster.
posted by thelonius at 6:17 AM on February 5, 2015


A restaurant involves lots and lots of moving parts. Is the food good, is it at a fair price, is it consistent, do they seem to use quality suppliers, how's the service, is it clean, is it accessible? How's the parking? Do you have to wait long? Is there enough seating? Do they do a few things and do them with excellence or do they go for variety? What do they offer besides the main menu -- specials, booze, ambiance, a theme, a social environment? Is it the only game in town or are they one of a dozen serving up the same stuff?

It doesn't take many gaping holes in any of the above to sink a place. And yet many prosper. Our rule of thumb here in the suburbs, or in the beach town where I vacation, is "30 days or 30 years." Unless outside variables interfere -- lease issues, owner dies or says "screw this, I'm leaving," big competitors move nearby and squash them, chain pulls the plug on a franchised region -- it either works or it doesn't, and as others have noted, even mediocrity works if the customer base is happy with it.
posted by delfin at 7:07 AM on February 5, 2015 [2 favorites]


My understanding is that 90% of independently owned restaurants go under in the first year and the remainder have an average lifespan of 5 years. And that's without the challenges of dealing with the insanely brutal NYC real estate market.

Factor in the rather skimpy margins of owning a restaurant (10% is the target number I general hear used), the brutal amount of labor necessary to keep one running when you basically need to work endless hours, constant employee turnover in most cases, ever-present pressure to economize every last input to compete with chain restaurants, and the tendency for a lot of people to get into the restaurant business that have absolutely no idea what they are doing and insufficient capitalization and it's kinda a wonder why any ever gets into the business.

It's a completely unforgiving environment and frankly even established owner operators with deep investor backing and lots of capitalization fail all the time in every major urban area. Maybe at one point in time opening a restaurant was a good way for an immigrant family to graduate from working class to comfortably middle class but increasingly it seems like successful restaurants require a combination of a culinary arts degree, a hospitality degree, and an MBA as well as a ton of seed money.
posted by vuron at 7:09 AM on February 5, 2015 [1 favorite]


I have restaurant owning friends and they have insisted for a while that while the food is important, the lease is what will make or break a restaurant.

This is why there are so few really good restaurants in Lincoln Park/Lakeview in Chicago. The area has the money - the demographics skew to household incomes of 100K+ and the area is safe and well served by transit and fair parking availability and it is primarily residential. Yet all the best restaurants are in other parts of the city because the commercial rents are too high here. It is also driving out a lot of retailers. So you have the weird situation of an area with lots of disposable income not being able to spend it close by because landlords have jacked the rents up to match the incomes of the customers rather than the businesses.

My favorite burger joint, Edzo's, shut down because they couldn't cover their rent. They run successfully down the road in Evanston but in Lincoln Park they couldn't pull it off even though they always had customers. There are high traffic intersections like Diversey/Clark where there are vacant shops on all the corners and there are storefronts that have been unoccupied for more than three years. I'm pretty confused about what the economics of commercial property leasing are where they would rather have a place be empty for years than drop their rent.
posted by srboisvert at 8:38 AM on February 5, 2015 [7 favorites]


I have restaurant owning friends and they have insisted for a while that while the food is important, the lease is what will make or break a restaurant. The lease can either be an asset or a liability.

I had always been astonished at the longevity of certain bars and restaurants in my neighborhood (we've got places lasting 25, 30, 40, 75 years) until I learned that the key is, they all OWN those buildings. In many cases they own them outright--although I know a couple of them probably struggle to pay the rising property taxes on buildings in an area that has gentrified quite rapidly.
posted by We put our faith in Blast Hardcheese at 8:40 AM on February 5, 2015 [5 favorites]


If you like to cook and entertain, don’t open a restaurant.
Operating a restaurant is a matter of operating a ridiculously complicated just-in-time logistics system producing, from scratch, hundreds of highly perishable items while managing the most drama-prone, high-turnover workforce in the economy.
posted by Floydd at 8:52 AM on February 5, 2015 [11 favorites]


The lease can either be an asset or a liability.

That kept some friends' bar open for quite a few years longer than it would otherwise have survived. They'd bought a foreclosed comedy club in an unfashionable bit of Chicago in the mid-90s. By the mid-00s it was fashionable neighborhood adjacent and they had some very nice years. But when the business started to ebb, they managed to hang on for a very long time while staying at least vaguely in the black. In the end they kept the doors open for 17 years, which isn't bad for an idiosyncratic little bar that was as concerned with discouraging the wrong clientele as it was with attracting the right ones.
posted by wotsac at 10:00 AM on February 5, 2015



I'm reminded of stories of when the Ground Round restaurant chain abruptly closed -- our local one got a "you're done" phone call and the staff had to go out and literally tell customers "sorry, but the dinner you ordered won't be coming out."

Whenever I hear stories of restaurants closing like this, it take me back to . . .

      ))      ))      ))      ))
      ((      ((      ((      ((
      ))      ))      ))      ))

Sometime around 1983 or '4, my brother was working for one of those fun fun fun restaurant chains that throve in those days, but which now languish. (You might remember the one with 'telephones' on each table). At one point that summer, he was asked to be part of a team to go in and -- for lack of a better term -- muck out a closed restaurant that the chain had bought, intending to convert to one of theirs.

It had been a Persian restaurant -- that is, Iranian. It seems that on the day in 1979 that President Carter froze Iranian assests in the US in response to the taking of hostages at the US Embassy in Tehran, the owners / managers of this restaurant had simply emptied the safe and walked off. Then the staff walked. Then the customers.

So -- what, five years later? -- my brother and his team walked in wearing hazmat suits, and sure enough:

The dining room looked like all the customers just walked off when they'd had enough. Nobody'd ever bussed the tables;

And the kitchen looked like the cooks just walked off in the middle of cooking when they heard they weren't going to get paid. Nobody swept up or put anything away;

And the walk-in -- well, the walk-in was like a -- it was full of -- that is, it smelled like -- it looked -- I mean, the walk-in was . . .
 
posted by Herodios at 10:00 AM on February 5, 2015 [13 favorites]


I had always been astonished at the longevity of certain bars and restaurants in my neighborhood (we've got places lasting 25, 30, 40, 75 years) until I learned that the key is, they all OWN those buildings.

I don't think Tommy Fello owns his building, and he's survived two devastating fires, but he's been in business since 1972. Hasn't changed the menu or methods in that time, either.

It's happy onions all the way down.
 
posted by Herodios at 10:04 AM on February 5, 2015


What a dick of an owner. The guy presumably got a substantial chunk of money to buy out the lease, and at least a little more via the sale of the assets to people like the article author, but he leaves his employees, who almost certainly were in far more desperate circumstances, not even a single day of notice. Bet they didn't even get their last check.
posted by tavella at 12:38 PM on February 5, 2015 [1 favorite]


Thanks for posting; I really like Tyson Ho's series of articles and hadn't seen this one. I always think he does a good job of characterizing the people who work in restaurants, and I came away from reading this with a lot of sympathy for the employees of the place that closed.
posted by ferret branca at 1:02 PM on February 5, 2015


the lease is what will make or break a restaurant. The lease can either be an asset or a liability.

HAH. Some total muppets right around the corner from me took over a restaurant space--the restaurant moved, not sure the exact reasoning.

They decided they should renovate! Yes, probably, the former place was Thai and hadn't been updated in over a decade, and everyone knows you must redo the decor no matter what. They were supposed to open in November 2013.

As things currently stand, they're over a million in the hole, the dining room is an intermittently-seen-to construction zone, the basement looks like it's been bombed, and the kitchen hasn't even been touched yet. And their lease runs to 2017. And they're so clueless, they didn't even employ the dodge of forming a corporation to handle this, so they're personally liable. Just utter, utter idiots.
posted by feckless fecal fear mongering at 2:13 PM on February 5, 2015


"New" is the most important category of establishment.
Naw, in NYC, "New York establishment" is the most important category of establishment. Their food sucks? Owners changed long ago? Doesn't matter, man, you can't close that, it's a NYC ESTABLISHMENT OMG THEY ARE OPENING TD BANKS ON EVERY CORNER AND YOU ARE DESTROYING MY NOSTALGIA FOR THE CITY AS IT WAS EXACTLY WHEN I MOVED HERE

More seriously though, I think a lot of rich people open restaurants in NYC to intentionally lose money, it helps their taxes somehow.
posted by pravit at 3:22 PM on February 5, 2015


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