Restaurant Social Media
Can you settle this debate?
I'm currently working on developing and launching a new business concept with two partners. One partner is an expert in market research. The other is extremely savvy at financial-investment angles. I humbly submit my own advertising and brand building knowledge.
The debate: we have an extremely well received, researched, validated concept. This is a large, Cheesecake Factory, size venture ( no comment necessary here ), 12,000 sq. ft. with projected revenues of 7 million per unit and 200 potential locations.
I believe that in order for this venture to be successful we need a experienced director of operations from day one to take the concept from paper to reality. Ideally this person would be able to create the systems and procedures to lay the ground work for opening the next 5 locations in 3 years. Basically someone whose been there and done that. Someone with these qualifications would cost between $150,000.00 to $200,000.00. a year.
Setting aside funding for a moment ( we're already scouting a location that rents for $45,000.00 a month! ) my partners are adamantly opposed to hiring someone at this price and qualifications. They feel we three partners can do all this ourselves and hire a manager. I haven't worked a restaurant in years. My partners have virtually no operational experience.
We're all committed to the concept, feel highly confident we can raise abundant cash. But my partners, I believe, have a serious lack of appreciation for the complexity of launching a concept of this size. They say we don't need someone like this until 3 locations from now and I say "we won't get that far without a solid foundation."
So who's right; me or my partners?
Garrick
The debate: we have an extremely well received, researched, validated concept. This is a large, Cheesecake Factory, size venture ( no comment necessary here ), 12,000 sq. ft. with projected revenues of 7 million per unit and 200 potential locations.
I believe that in order for this venture to be successful we need a experienced director of operations from day one to take the concept from paper to reality. Ideally this person would be able to create the systems and procedures to lay the ground work for opening the next 5 locations in 3 years. Basically someone whose been there and done that. Someone with these qualifications would cost between $150,000.00 to $200,000.00. a year.
Setting aside funding for a moment ( we're already scouting a location that rents for $45,000.00 a month! ) my partners are adamantly opposed to hiring someone at this price and qualifications. They feel we three partners can do all this ourselves and hire a manager. I haven't worked a restaurant in years. My partners have virtually no operational experience.
We're all committed to the concept, feel highly confident we can raise abundant cash. But my partners, I believe, have a serious lack of appreciation for the complexity of launching a concept of this size. They say we don't need someone like this until 3 locations from now and I say "we won't get that far without a solid foundation."
So who's right; me or my partners?
Garrick
Replies to This Discussion
-
Permalink Reply by Adam R. Cox on -
Surround yourself with people smarter than yourself, people who have been there and know where the pitfalls are, and what they look like.
You are right. If you have a solid foundation to build on, then you can get to 200 units.
If one unit brings 7 million, then $150-200k is nothing. Besides, that's 3 to 4 months rent.
I would revisit your business plan and spec out who is doing what and put a $ beside it as well as experince.
I would rather have experts on my team who know more about how to bring my dream to reality, than keeping it a dream. Your talking large amounts of money. Don't skimp.
-
Permalink Reply by Garrick Arnold on -
Jeff. Thanks for your comments. I wish I knew how to convey the complexity of an operation of this size and what it takes to make it work flawlessly. I've tried to explain that mangers "manage" the system their given not create a system. Oh well the joys of partnerships!
-
Permalink Reply by Mark Moeller on -
If the goal is truly to open 200 locations and the three of you are committed to doing so, it is imperative to have a Director of Operations on board who will develop the systems you will need. A 12,000 sq foot Cheesecake Factory type of operation is not simplistic to set up and operate. If the systems are not developed, written down and tested during the opening process, not only will you struggle day to day but you will set yourself back on future openings costing you more time and money.
Operations and Training cannot be done by everyone. Put that aside for a second, who amongst you has the knowledge to develop the menu, spec the equipment accordingly, design the facility, hire the right chef, servers, bartenders, admin. Who can negotiate pricing with the right vendors, develop recipes and menu costing. Design and flow of the facility is needed to insure that the efficiencies are there.
I could go on and on, as an operations and training specialist for 30 years and a consultant for the last 8 years, I cannot tell you how many times a client of mine has struggled or failed because they did not have an operator on board who understood the details of running a restaurant.
If your partners are not willing to go for a Director level person, I strongly recommend that you bring in a consultant that can function as this person, He/She will have the operational expertise that you need without the considerable expense. Don't get me wrong, it will still be expensive but there are savings you will have hiring a as an outside 1099 vs. an employee.
Investing in the right people is the most important investment you can make.
Mark
-
Permalink Reply by Garrick Arnold on
-
Thanks Mark!
-
Permalink Reply by Doug Bond on -
I concur with Adam.
In this day and age of floundering restaurant concepts that are designed and operated based on ancestral knowledge, it is better to differentiate yourself from the outset with well thought out processes and procedures. 150-200K could potentially get you someone of a high enough caliber with enough experience to get you where you need to be. I would recommend you look for not only a great operator, but also someone who is a true collaborator as well as an out of the box thinker.
To break out of the sea of sameness that exists right now in the restaurant industry (you have already started comparing yourself to Cheesecake Factory), you need to be willing to utilize expertise from several different sectors (not only the restaurant industry) to succeed. Define what your success parameters are for income, costs, labor, time, space, ROI, volume, quality, product flow, and customer experience are first, before you even make the first pencil stroke on paper to design the facility. If you work the data first, the facility will design itself.
Since you are looking to grow this concept to 200 or more locations, take the time on the first few locations to get everything “buttoned up” process, and design wise to facilitate your rapid growth. Prior to that, make sure that everyone involved is completely clear on the vision for the concept. Know “who you are” and what you are willing (and not willing) to become during the evolution of the concept.
All of this was a long winded way of saying, employ experts to do what they do best. Having consultants on board would be helpful as well, however I would use them as a resource for the person you are speaking of hiring. Whoever is driving the decisions needs to have a vested interest in the ultimate success of your venture. This will set you and your partners up for success.
-
Permalink Reply by Garrick Arnold on
-
Thanks Doug. Great feedback.
-
Permalink Reply by Howard Appell on -
Garrick:
Good luck with this venture. You are both right. In today's economic climate a $45,000 rent is very scary to me. You have to be on the top of your game to cover your expenses. My gut feeling says give me half of the money for the project and walk away a winner. I guess your partners have no experience in foodservice. Unless they are ready for 24/7 it will not work at this level. Good luck again. Keep us appraised.
-
Permalink Reply by Doug Bond on
-
Howard brings up another great argument.
If you and your partners are serious about the success of this venture and all three of you are not in agreement about hiring in the experts that it takes, then the three of you need to decide who will be there when things start going south.
Who will be willing to step back on the line when you are short two or three cooks and who will buss tables when your busser does not show up? Who is going to jump on the 3-comp sink when the dish machine goes down, or who will be the lucky one to get the 3 am call that your walk-in just went down?
Everyone on this site knows that the examples above are "real life", every day part of operating a restaurant.
Doug
-
Permalink Reply by Garrick Arnold on
-
thanks guys.
-
Permalink Reply by Adam R. Cox on
-
Garrick:
After re-reading all the posts I think your headed in the right direction yourself about bringing in people to do work that needs to be done.
I would like to make this observation. You need not only hire the Ops/Training people, but you need a Exec Chef that can start putting your "food recipe" ideas through a menu list and cost it out. Depending on cuisine and concept, that will dramatically shift how things get deployed.
Also, since your looking to expand to 200 locations, the menu will need to be of a model that can be rolled out to others with not a lot of training. This is vastly different than a chef-owned/centric establishment.
All the Marketing/Branding/Advertising won't help if the food is not good and costs over-run all the time.
Also, reading your Bio, it looks like you already know this and the problem is convincing the guys. Good luck!
-
Permalink Reply by william adamiono on -
If you are serious, take half your money and load the fireplace. Then get a match and enjoy the glow. The other half return to your investors. You will most likely be afforded the 90% who fail in the first year in some markets, bearing your lack of experience. You'll enjoy the fire and keep your friends.
-
Permalink Reply by Garrick Arnold on
-
William, I didn't solicit your opinion on the validity of the idea. I asked for input from the Fohboh community on a very specific question: hire an experienced exec, yes or no? If you can refrain from the sarcasm and couch your reply in a more user friendly tone I'd welcome your constructive comments. Have a happy Memorial Day!
Advertisement
Industry News
Food + Tech
Events
Videos
© 2012 Created by FohBoh.
