Opened, Closed, Came & Gone

Is it my imagination or are restaurants closing even quicker than usual? Within months for these:

https://www.dnainfo.com/chicago/2017071 ... -next-move

https://m.facebook.com/cafechienchicago/

And others closing after their initial three-year leases expires. I know some blame the city for high fees, others blame rise in rents/real estate values. Are restaurateurs taking these risks into consideration? Every time I see a business, especially a restaurant, use a crowdfund to open their business, that seems like a short-term plan to me. Do businesspeople think too optimistically, "if you build it, they will come?" Or, is Chicago just oversaturated?

And in the case of Cafe Chien, it is odd because they posted yesterday about an event taking place at the end of the month.

I'm not sure if this is related to your question at all, but I found it to be interesting reading:

http://www.newyorker.com/business/currency/the-thrill-of-losing-money-by-investing-in-a-manhattan-restaurant

Once an operator of a very successful Virginia restaurant told me that "opening a restaurant takes more dollars than sense." I worked in institutional food service for 12 of my 15 years in the industry and I have a dozen offers to either open a restaurant or to help finance one. I have yet to find one that was compelling or made business sense. It is always fun when you are approached by an owner to run his place and then realize that what he is offering to pay you is less than his gross receipts last week.

There is a low barrier to entering the restaurant industry. People who have never worked an hour in the kitchen think that opening a restaurant is something that they can do as it appears pretty easy. A lot of people who are professionals in other industries think that they can just go ahead and run a restaurant. Until it starts up, they don't realize how far in over their heads are.

My favorite story was a coffee place in the Chicago suburbs. The guy wanted me to stop by and see if I could make any recommendations to him as he wanted to own a place like Starbucks. I got up at 5 am and left the house at 6 am and make it to his shop at 7 am. It was not open until 8 am. I dropped by after work BUT it closed at 4:30 pm. I called him the next day and told him that he needed to open earlier and look at evening hours. His response" "If I wanted to work THOSE hours, I would have stayed at Kraft. His place was gone in a couple of months.

I have rarely seen a well developed business plan that makes sense. In fact, in many cases, there has been no effort to determine if the numbers make sense. Also, most efforts are grossly undercapitalized.

That is my ten minute answer. I will say that it will get MUCH worse in the coming years as 1) minimum wage and other employee costs continue to skyrocket, 2) more chain places implement technology into their operations to reduce waste and labor costs, and 3) non-traditional feeders (supermarkets and upscale convenience stores) seriously expand into the dine out market. In the past few months, I have seen some of the Kroger prototypes in Cincinnati and some of the new packages meals program at Sprouts and I can honestly say that I would prefer those offerings over any restaurant within 10 miles of my house. Also, the convenience stores (think Wawa and Quik Trip) are blowing away a lot of fast food operators as the food is fresher and price competitive.

excelsior wrote:Do businesspeople think too optimistically, "if you build it, they will come?"

I think that is part of the problem. Just observing as a consumer, I've muttered to myself when seeing a new place going into a location that's never going to work, "Poor sons of bitches. I could have saved them a lot of heartache." I feel for them. Of course, every now and then I'm wrong, and I love it when that happens, but usually I'm not. I bet I'm not alone in my powers as a "drive-by consultant."

riddlemay wrote:

excelsior wrote:Do businesspeople think too optimistically, "if you build it, they will come?"

I think that is part of the problem. Just observing as a consumer, I've muttered to myself when seeing a new place going into a location that's never going to work, "Poor sons of bitches. I could have saved them a lot of heartache." I feel for them. Of course, every now and then I'm wrong, and I love it when that happens, but usually I'm not. I bet I'm not alone in my powers as a "drive-by consultant."

You didn't post that you could make them successful, did you?

Lenny007 wrote:

riddlemay wrote:

excelsior wrote:Do businesspeople think too optimistically, "if you build it, they will come?"

I think that is part of the problem. Just observing as a consumer, I've muttered to myself when seeing a new place going into a location that's never going to work, "Poor sons of bitches. I could have saved them a lot of heartache." I feel for them. Of course, every now and then I'm wrong, and I love it when that happens, but usually I'm not. I bet I'm not alone in my powers as a "drive-by consultant."

You didn't post that you could make them successful, did you?

Not sure I understand your meaning, but "making them successful" would not have been possible in most cases.

Another example is a business on Irving Park Road--Coffee Joint. I never realized the business was there, apparently they were around sometime in 2016, but seem to be closed now. Coffee Joint's website for some reason has glamour shots of other coffee establishments and a standard menu.

And this new marshmallow cafe--for such a very niche item, how long can this one last?

LOL, I think there's more than a country mile between never having dipped so much as a toe in the water and heralding oneself as The Restaurant Whisperer!

=R=

I always believed in the maxim that Supply Creates Its Own Demand.

Tyrgyzistan wrote:I always believed in the maxim that Supply Creates Its Own Demand.

I think there's some merit to that, but businesses based on outmoded models or technologies might disagree with you. (Blockbuster Video and the 19th century Chilean guano fertilizer trade come to mind.)

ronnie_suburban wrote:LOL, I think there's more than a country mile between never having dipped so much as a toe in the water and heralding oneself as The Restaurant Whisperer!

I agree completely. I tried to convey my "creds" (or lack of them) with the full disclosure that I'm just an ordinary Joe who knows the neighborhood well enough to have a sense of what's going to work and what isn't. That said, I would be amazed if every single person on here can't say the same as me--that they get a feeling when they see a new business as to whether it's going to succeed or not. I can't be the only one.

And when I said my heart goes out to the ones I "know" (with imperfect accuracy) will fail, I really meant it. I think of the life-savings invested, the labor, the dream, and my heart breaks for them in advance. (And rejoices for them when I'm wrong.)

I've seen enough places succeed in "cursed" spaces to know that outcomes are not nearly as predictable as they sometimes seem.

=R=

Tyrgyzistan wrote:I always believed in the maxim that Supply Creates Its Own Demand.

Is that supply of customers ?

ronnie_suburban wrote:I've seen enough places succeed in "cursed" spaces to know that outcomes are not nearly as predictable as they sometimes seem.

=R=

I would love to see good examples of survivors.

Siunik in Glenview comes to mind. Such a bland nasty food, but he is still hanging there.

excelsior wrote:Is it my imagination or are restaurants closing even quicker than usual? Within months for these:

https://www.dnainfo.com/chicago/2017071 ... -next-move
Every time I see a business, especially a restaurant, use a crowdfund to open their business, that seems like a short-term plan to me. Do businesspeople think too optimistically, "if you build it, they will come?" Or, is Chicago just oversaturated?

And Sunday I was thinking of trying out Vidalia's pizza and the ordering link kept on taking me to a listing on Milwaukee Ave, so I ended up doing something else instead. Now it makes sense.

There's a basement spot on Damen, just south of Foster that was a short-lived Filipino restaurant. A sign went up last year for a new restaurant there, and it never even opened!

Tyrgygyzistan wrote: I always believed in the maxim that Supply Creates Its Own Demand.

It is hardly a maxim. It is a form of statement of what is referred to as Say's Law although that term does not appear to be in any of Say's writings that survive. The reference is at the macroeconomic level over the long run and is controversial even there. Say did not believe that there could be gluts of products at the aggregate level; any glut of one product would be offset by a shortage somewhere else in the economy.

At the individual product or service level, it would be more accurate to say that demand eventually creates its own supply.

I am skeptical about cursed spaces. Many of them have some location disadvantages, which may attract entrepreneurs looking for cheaper rent. Unfortunately the rent may not be cheap enough and also may tend to attract people who are short on capital and realistic knowledge but oversupplied with optimism. This fits into a category called the winner's curse. The simplest case is that the party with the greatest overestimate of the value of something wins the auction provided that party is not stopped by a budget constraint.

There is a storefront on Lawrence Avenue near California that had multiple restaurants over the years. This might be interpreted as a cursed location. Apparently none of them thought that being in the same building between a tattoo parlor and live poultry market was a serious problem. Maybe they did not look at the site in July or August. In any case a better live poultry store opened a few doors down and drove the other one out of business.

How about this cursed property: 1829 Simpson, Evanston.

I know many of you live in Evanston, Skokie and nearby Wilmette, HP.

It is 1.6 miles from Kabul House and the same or less from Evanston downtown. Next to Evanston's 6th Ward.

Golf/McCormick/TJMax really close and so is Green Bay Rd piece South of Central.
Property is free standing 27' wide x 60' deep building plus 27' x 100' backyard. Surrounded by the park at the West and North property lines. Plenty of the free street parking. I am in process of rezoning it into B-1 with 60/40 chance at the moment (I consider it solid because I started with zero chance) and will likely make it to Plan commission next month.
Building division doesn't mind if I add windows overlooking the park and 3-season fenced backyard patio, perhaps, with the fireplace/fire pit.

What you say if I offer shashlyk, lulya(that would be shishkebabs) pelmeni /chebureki(dumplings), kharcho plus 2-3 more soups, napoleon and similar cakes. At the price near pita inn or 5-10% above. You like Pita Inn because its cheap, right?

Or are you scared to go there?

Lenny007 wrote:How about this cursed property: 1829 Simpson, Evanston.

I know many of you live in Evanston, Skokie and nearby Wilmette, HP.

It is 1.6 miles from Kabul House and the same or less from Evanston downtown. Next to Evanston's 6th Ward.

Golf/McCormick/TJMax really close and so is Green Bay Rd piece South of Central.
Property is free standing 27' wide x 60' deep building plus 27' x 100' backyard. Surrounded by the park at the West and North property lines. Plenty of the free street parking. I am in process of rezoning it into B-1 with 60/40 chance at the moment (I consider it solid because I started with zero chance) and will likely make it to Plan commission next month.
Building division doesn't mind if I add windows overlooking the park and 3-season fenced backyard patio, perhaps, with the fireplace/fire pit.

What you say if I offer shashlyk, lulya(that would be shishkebabs) pelmeni /chebureki(dumplings), kharcho plus 2-3 more soups, napoleon and similar cakes. At the price near pita inn or 5-10% above. You like Pita Inn because its cheap, right?

Or are you scared to go there?

BTW, I have PDFs and if some local LTH expert really wants to see them, just let me know. Not a secret anymore since it went through various public discussions with citizens and local government. I am naively thinking this place could be a gold mine with the right pricing and technology in place. Just how would you evaluate my actions? Crazy? Insane?

Just how would you evaluate my actions? Crazy? Insane?

That depends. Do you have any restaurant operating experience?

stevez wrote:

Just how would you evaluate my actions? Crazy? Insane?

That depends. Do you have any restaurant operating experience?

Curious what happened at your soup place. It was highly regarded here and elsewhere.

=R=

stevez wrote:

Just how would you evaluate my actions? Crazy? Insane?

That depends. Do you have any restaurant operating experience?

Do me a favor, drive by the property and let me know what you think about that location. Directions:
1)McCormick North of Golf along the canal, then make a right turn at Bridge St. and you will see the building from there. Or...
2)Green Bay Rd to Simpson St and West to 1829. Or...
3}If you drive on Ridge, Simpson is still accessible via Leonard St and Leon St.

"Hills Art District", kids/teens walk by after school (Haven and ETHS), high visibility from Dodge St (California in Chicago). Area is clearly improving, nice bike path in the park, Park District provided abundant lighting at night, community gardens by the canal and additional recent parking lots by Bridge St. Always lots of sport activities 2 short blocks to the East @ Dewey/Simpson/Foster. Ridge/Emerson/Green Bay intersection has gone through massive renovation last year. Evanston's 2016 RE taxes have been reassessed (tri-annual Cook County)... and 2016 tax bills came down (unbelievable, but true) by ~ 7%.

ronnie_suburban wrote:

stevez wrote:

Just how would you evaluate my actions? Crazy? Insane?

That depends. Do you have any restaurant operating experience?

Curious what happened at your soup place. It was highly regarded here and elsewhere.

=R=

I previously posted what happened to it. Landlord had long term insurance remediation settlement related to previous location of dry cleaners plant at that space. 30 months into the lease EPA had regular inspection related to some PVC piping that was supposed to be there and all my hood/ansul and underground tandoor oven was installed right there. Landlord never disclosed anything, but approved our construction drawings. The whole thing fell apart, landlord went into serious expense and we had to move, just as retail side side of our biz finally started working.

Read response to Stevez and let me know what you think of location. BTW, no bread baking in plans, and @this time zoning deal is not approved at the appropriate highest levels of City Hall.

knitgirl wrote:

excelsior wrote:Is it my imagination or are restaurants closing even quicker than usual? Within months for these:

https://www.dnainfo.com/chicago/2017071 ... -next-move
Every time I see a business, especially a restaurant, use a crowdfund to open their business, that seems like a short-term plan to me. Do businesspeople think too optimistically, "if you build it, they will come?" Or, is Chicago just oversaturated?

And Sunday I was thinking of trying out Vidalia's pizza and the ordering link kept on taking me to a listing on Milwaukee Ave, so I ended up doing something else instead. Now it makes sense.

There's a basement spot on Damen, just south of Foster that was a short-lived Filipino restaurant. A sign went up last year for a new restaurant there, and it never even opened!

That spot on Damen is Sweet Virigina's Kitchen. As far as I know, they're still planning to open, it's just taken them much longer than expected to get everything in order. I don't have any inside info, I just contributed to their crowdfunding campaign and get occasional updates. I know their catering operation is functioning, but that preceded the restaurant plans.

Sweet Virginia's Kitchen
5131 N Damen Ave
https://www.sweetvirginiaskitchen.com/

I don't know if the "this fall" on the website refers to this coming fall or last fall, because I'm pretty sure their original target date for opening was November 2016.

Sometimes the quick closing isn't a matter of location, but of a concept that is doomed from the start. Something like The Scotch Boutique in the immortal SNL sketch of the same name.

http://snltranscripts.jt.org/78/78bscotch.phtml

Lenny,

If you open a restaurant at 1829 Simpson and it has good food at reasonable prices and is open during hours I can be there, I will be a customer. I wish you success in this venture.

Re traffic past 1829 Simpson - you also have daily people coming and going to drop off/pick up dogs at Rex's place on Ashland. Pick up the dog, pick up dinner?

bw77 wrote:Re traffic past 1829 Simpson - you also have daily people coming and going to drop off/pick up dogs at Rex's place on Ashland. Pick up the dog, pick up dinner?

I am aware of successful businesses in that neighborhood. I need to mention car wash right by Rex's place - always super busy.

On a similar note, this 2013 article states that Stan's Donuts signed a lease for a place at 151 N. Michigan, yet still not open yet.

https://chicago.eater.com/2013/9/4/6377 ... estaurants

How can someone afford to pay rent for four years without making any profit from the business? Is Rich Labriola rolling in cash like Scrooge McDuck?

LPython wrote:

knitgirl wrote:

excelsior wrote:Is it my imagination or are restaurants closing even quicker than usual? Within months for these:

https://www.dnainfo.com/chicago/2017071 ... -next-move
Every time I see a business, especially a restaurant, use a crowdfund to open their business, that seems like a short-term plan to me. Do businesspeople think too optimistically, "if you build it, they will come?" Or, is Chicago just oversaturated?

And Sunday I was thinking of trying out Vidalia's pizza and the ordering link kept on taking me to a listing on Milwaukee Ave, so I ended up doing something else instead. Now it makes sense.

There's a basement spot on Damen, just south of Foster that was a short-lived Filipino restaurant. A sign went up last year for a new restaurant there, and it never even opened!

That spot on Damen is Sweet Virigina's Kitchen. As far as I know, they're still planning to open, it's just taken them much longer than expected to get everything in order. I don't have any inside info, I just contributed to their crowdfunding campaign and get occasional updates. I know their catering operation is functioning, but that preceded the restaurant plans.

Sweet Virginia's Kitchen
5131 N Damen Ave
https://www.sweetvirginiaskitchen.com/

I don't know if the "this fall" on the website refers to this coming fall or last fall, because I'm pretty sure their original target date for opening was November 2016.

I had messaged them on Facebook last fall and you're right, they were shooting for a November 2016 opening.

Another example: https://www.dnainfo.com/chicago/2017071 ... on-refunds