We once had a fascinating chat with an old Los Angeles based sales pro in the commercial real estate field who, perched on a bar stool that had just been removed from a suddenly out-of-business restaurant, had an observation about gathering real estate listings for dining establishments. “They are all for sale. Every restaurant. It’s just the most unstable field.”
But they can’t possibly all be for sale, we remonstrated. Weren’t some restaurants so incredibly successful that selling would be unthinkable?
“No,” said the old pro. “There isn’t a restaurant around where the cost of the food, the booze, the spices, every single bar stool, just about everything you can think of, isn’t giving the owner half a heart attack every night. Sure, some restaurants are making money hand over fist, but the owner always knows it can change in two seconds and is ready to sell for the right price, if he or she has a brain to speak of, that is.”
We were still skeptical, weren’t some restaurants permanently off the market. What about Spago in Hollywood? Wolfgang Puck had become one of the first and most famous of the celebrity chefs and opened up another branch and was opening restaurants of various types all over the country. Wasn’t at least his original location, so beloved of so many movie stars, sacrosanct? “Nah. One day they’ll be carting out all the fancy furnishings, including every bar stool like the one I’m sitting on.” Mind you, this was the middle of the super-prosperous 1990s.
Well, the original Spago closed way back in 2001, though the Beverly Hills Spago and the rest of Puck’s restaurant empire continue to mostly thrive because of it’s owners understanding of how to make money in the field — for now. The moral is to make sure the restaurateurs you work with are well aware of the risks of what they’re doing and the fact that, to go into the business of serving people food and drink, three things must be true.: 1. The owner must be love with the process because, at least for the first few years it’s going to take up all of her time; 2. It’s better if she is crazy enough not to care, and 3. She really should have a financial back-up plan if things fail to work out because, most likely, failure is exactly what’s going to happen.