Opportunity has come up for a turn-key well established Italian joint here in The Cuse. Two restaurants under one roof (casual up, fine dining down). Sale includes property and a second building rented to a bakery. The place has been around for 40 years, and has a strong loyal following. Current owner is retiring, and wants new owner to carry on his legacy, and wants chef and staff to stay on and provide a seamless transition. Totally new venture for me but have many connections in the restaurant/hospitality business that will guide me along the way. Have a friend in local commercial real estate providing me numbers and P&Ls, estimates the property valued at 550-600k (700k assessed value) and room for a pad site or two on the 1.4 acre lot. The place was up for sale last year at 1.5M but he got no bites (Covid casualties/fears didn’t help). We’re throwing away 2020 numbers, and looking at past 5 years. Much room for improvement in COGS and specifically cost of alcohol, probably about a 10% swing. Current net profit is 11% (ish) and would need to be upper teens/low twenties to see real profit for an Italian joint. It goes to auction next month, starting bid is 300k. I think my ceiling is going to be 800k, allowing another 200 for site improvements. Plan would be to keep downstairs status quo for a year, and to rework upstairs to make that “mine”, keeping loyal regulars but maximizing the casual joint to improve overall sales. My brother is in the business all his life, and works at a high end steakhouse in Philly. He’s a certified sommelier (studying currently for the master sommelier exam) and knows his shit. He’s been walking me through the process and has kept my eyes open to the grind of ownership. My plan for me is to be GM and work with current ownership/management for 6 months or so to get to know vendors and staff, and keep things flowing to maintain a steady income steam with minimal interruptions. While my brother has been a big help with looking at numbers, menus, costs, etc., I don’t know what I don’t know. I have a conference call with him and a money guy today at 11, and will have a better idea of what kind of possibility this is. Admittedly, this is a fave place of mine and my family’s, went here for prom dinner in high school, proposed to my wife there, and the name of the place happens to be my son’s name (Joey’s), so a bit of sentimentality had played a part in my interest, though not the driving force. I love to cook, I love to eat, and I come from a family of feeders. Those of you in the biz… throw me some questions I need answers to before I stop selling drugs and start making manicotti.
Not in the biz personally but have family that has been. You realize that you'll have no life except the restaurant, correct? That's all I have to say.
Already resigned myself to that. Current gig has me working nights weekends and holidays already so that’ll be nothing new. I’m looking at this as a second home away from home.
You're set then. And if it works out I'll stop by if I'm in the area. Used to go there all the time for hockey tournaments. I liked it, especially the area around the lake (was it called the Wharf?), but of course it was always too cold to do anything!
I've designed a few, but never operated. My boss used to tell clients his job was to get them in the door the first time by creating an inviting space. The second visit was on them. Keep the Chef happy until you have staff you know you can count on so that quality doesn't change. When taking over an established place, don't change things rapidly and seek input. One of my favorite places here is about to be crossed off our regular rotation because the new owner thought they knew a better way. Service may be more efficient, but the food isn't nearly as good. I can put up with marginal service for good food. Stellar service will not make up for mediocre food.
why do you want to do this? especially being a gm and jumping in the deep end. Have you been in the bizz ever?
The biggest issue with restaurants/ bars is its all babysitting all the time. The bigger they are the more difficult to manage no matter on the price point of the cuisine.
Nothing to add to your financial discussions. With respect to the enterprise, make any changes slowly, deliberately. There is a reason they were in business for forty years, you have experienced some of it. Good luck!
My buddy's dream was to own a restaurant, and well he said never again. Time and money suck. He would have had more fun lighting the money on fire. The difference here though is that you have an established spot, and someone very knowledgeable in the business, so better odds than most. Are you also going to own the real estate it sits on as part of the deal? that may prove to be the most valuable part of the deal.
I have a degree in culinary management and worked in the business for a few years. It is a tough business both physically and mentally. Be prepared for the Chef to become overpowering and demanding, then become just plain difficult then threaten to leave and then leave. Unfortunately seen it too many times. Also the best advice I ever received was that it will become very easy to say "I've got that" at the bar or for certain customers meals that are regulars. Do not do it. Make sure everything that you comp get's put on "your" credit card and you sign for it. It will keep you in check and make it much easier to show the real numbers at the restaurant. 11% can become 3% very easily by comping things, theft etc. If you do not make yourself accountable your staff will jump on the bandwagon comping things as their tips will increase significantly and your profits will tank.
