How to Open a Restaurant The Modern Restaurateur’s Guide to Starting & Growing a Restaurant Business Alison Arth

OpenTable - How to Open a Restaurant 1 Table of Contents

50 Introduction 4 How to Create a Brand 55 How to Write a Business Plan 5 How to Design Your Restaurant Construction 55 Why Writing A Business Plan Is Not Optional 5 Kitchen Design 57 What Your Business Plan Should Cover 8 Interior Design Building a Pitch Deck 11 58 62 How to Fund Your Restaurant 14 In the Weeds: Amanda Cohen Setting Up Your Business 14 How to Order and Purchase 64 Overview of Common Business Structures 15 What Do You Need? 64 Figuring Out How Much Money You Need 16 Key Considerations 65 Structuring Investor Payback & Ownership 17 Post-Opening Ordering & Purchasing 67 What to Expect from the Fundraising Process 20 69 More Financing Options 21 How to Build Your Team Recruit the Right People 73 How to Identify Locations, Choose a Interviewing 74 Site & Negotiate Your Lease 27 Assembling Your Team 75 Location vs. Site 27 78 Choosing a Site 29 How to Train Your Team How to Negotiate Your Lease 33 Start Early 78 Classroom Training 79 In the Weeds: Aaron London 40 Prepare Written Materials 82 How to Deal with Legal Regulations 42 Preview Events 83 Licenses, Permits, Inspections & Certificates 45 In the Weeds: Sean Heather 87 TEST CASE: Chez Ruth 46

OpenTable - How to Open a Restaurant 2 Table of Contents cont’d

How to Create Your Menu 88 How to Create Buzz 106 Start with Trust 88 Get Your Story Straight 106 Art vs. Commerce 89 Find the Key Players 107 Building in Profitability 90 Communicate with Intention 108 Working with Purveyors 91 Love Thy Neighbor 109 Menu Design 92 Host a Media-Specific Preview Event 109 Avoid Oversharing 110 How to Use Technology 95 Start Your Social Media Feeds Early 110 Technology Solutions to Consider 95 Build Relationships 111 Guest & Reservation Management 96 Respond to Reviews 111 Tips for Choosing & Using Tech Solutions 100 Get the Most Out of Your PR Company 112 Managing Your Web Presence 101 How to Build Your Website 102 Glossary 114 How to Manage Your Presence on Online Sample P&L 116 Review Sites 103 Contributor Bios 119

OpenTable - How to Open a Restaurant 3 Introduction Throughout my career, I’ve been fortunate to work alongside some of the most talented and visionary hospitality professionals in the world. Regardless of years of experience, size of the team or location, there’s one constant: opening a restaurant is among the most challenging and rewarding projects a person can take on.

I founded my hospitality consulting company Salt & Roe to help current and aspiring restaurateurs across the country gracefully open restaurants. By helping tackle everything from drafting a business plan to menu design and staff training, my career is all about taking on projects and setting them up for success through opening night and beyond.

Since graduating from Cornell University’s School of Hotel Administration, I’ve participated in 16 openings -- ranging from Michelin-star concepts for Chef Daniel Boulud’s Dinex Group in New York City and James Beard-nominated Spoon and Stable in Minneapolis to neighborhood and fast-casual restaurants in my native San Francisco. Along the way, I’ve learned that while the process is far from formulaic, there are numerous best practices that can ensure your restaurant has the best shot at success.

I’ve teamed up with dozens of restaurateurs in the United States and abroad to collect cautionary tales, dos and don’ts, and “If I only knew...” stories, and deliver them in one comprehensive resource on how to open a restaurant. I am humbled by the time and honesty every contributor gave to this project, and it’s an honor to be able to share their hard-earned insights. I hope this book will guide and inspire anyone who’s ever dreamed of becoming a restaurateur to follow their passion.

Alison Arth

OpenTable - How to Open a Restaurant 4 How to Write a Business Plan Why Writing A Business Plan Is Not Optional

Your business plan will be the road map from which “The point of a business plan is to show that you’ve done your new restaurant develops. No matter how much your homework,” says Charles Bililies, owner of Souvla, a fine thought you’ve put into your concept or how many casual Greek restaurant in San Francisco that has received trusted colleagues have assured you of its greatness, you national acclaim since opening in the spring of 2014. absolutely must write a business plan. It will prove the viability of your concept to potential investors and provide them with a clear and engaging answer to the question: “You have to show any potential investor that you “Why does the world need this restaurant?” have an actual plan, you know what you’re talking about, it looks professional, and you’re not just First, ask yourself questions to ensure that your restaurant screwing around.” actually is financially sustainable and truly does offer Charles Bililies unique value in the market you’re hoping to enter. Creating a business plan will guide you through the process and help you find inconsistencies and potential road blocks, allowing Crunch the Numbers you to make adjustments before you’ve presented your idea A restaurant, first and foremost, is a business. Guests will to prospective investors and partners. Here’s how to show only get to experience your creation if you’re able to build that you’ve thought through every aspect of the business.

OpenTable - How to Open a Restaurant 5 Crunch the Numbers cont’d it in a financially sustainable way. This requires research, brutal honesty, and in almost every case, outside help to “Are your financial terms reasonable? Are they not figure out. only within the realm of possibility, but do they err on the side of conservatism? If everything needs With a few rare exceptions, you’ll need to engage an to go exactly right in order to generate profit, accountant to help you put together the financial that’s not good enough. Just because it’s your projections that any potential investors will expect to dream doesn’t mean the numbers work.” see. Even if you have a background in finance, soliciting a Mike Harden third-party, emotionally-detached opinion from a CPA who has experience with restaurant clients will ensure you’ve covered all your bases. You must be able to demonstrate clearly that in the market you’re hoping to enter, you’ll be able to produce enough Charles retained an accountant while assembling Souvla’s revenue -- based on your projected number of guests per business plan, despite having three years of relevant day and your average check -- to cover your expenses, and financial experience at Mina Group, a national restaurant have money left over. group with more than 20 concepts, under his belt. He says, “It’s very helpful when you can turn around to the investors and say, ‘We have retained the services of this firm, they Paint the Picture have verified all of these figures, and they’ll be handling our accounting moving forward.’” The writing that comes before and after those financial charts and numbers is equally important. Mike notes, “The Mike Harden, Co-Founder and Senior Partner at venture average person who invests in an independent restaurant is capital firm , has invested in successful ARTIS Ventures someone that wants to go there. They want to get paid back restaurants like Tacolicious in San Francisco and is and make money, but they also look at it as an investment presented with countless restaurant business plans every in a community, an investment in the people around them, year. When someone is on the other side of his desk hoping and a way to have fun.” for investment, he wants to know:

OpenTable - How to Open a Restaurant 6 Paint the Picture cont’d

With that in mind, your business plan needs to be engaging Establish Your Brand and give the reader a clear picture of what you, your brand, and your restaurant are all about. Roberta Economidis, When it comes to establishing a brand, clarity and Partner in the law firm of Georgopoulos & Economidis, consistency are always best -- and your business plan is your LLP, has been representing restaurants in the Bay Area first chance to get off on the right foot. Brett Traussi, the Chief for more than a decade, which means she’s laid eyes on Operating Officer ofDaniel Boulud’s Dinex Group based in hundreds of business plans. New York City, is a leader in creating new concepts for the company and, as a valued mentor, also reads business plans She says, “A business plan, in my mind, is the first date. for concepts all over the world from former employees.

What I do as a lawyer is the prenup. You need that romance factor to get people bought in with solid numbers that can back it all up.” “The places that go on to be really successful aren’t the concepts that are trying to reinvent the wheel; When the reader can so clearly feel, taste, hear, and they are the ones that are easy to understand.” visualize the experience you’re promising that they’re Brett Traussi craving it just after seeing it on paper, you know you’ve got a solid business plan. Try to describe your concept completely in one short This is the first, but far from the last time you’ll hear me sentence. If you can’t do it, you’re likely attempting too recommend that you be very honest with yourself about much at once (remember that your first restaurant doesn’t what you don’t know. If writing isn’t your cup of tea, hire have to be your last!). a consultant who is experienced in creating restaurant business plans. Many potential investors will ask to see Add visual elements to your business plan to help readers your business plan before taking an in-person meeting better understand the experience you hope to create. Design with you, so it’s crucial that this document captures their a preliminary logo, choose a unique but easily readable font, interest quickly and represents your concept accurately. and create a mood board within the document that shows

OpenTable - How to Open a Restaurant 7 Establish Your Brand cont’d snippets of defining design elements, finishes, and relevant clarity of concept. Put the sections that you feel would be food, wine and cocktail imagery. By the time potential most compelling to someone who’s never met you first: investors are finished reading, they should have the same the “Management Team” section if you’re coming from picture of your concept in their mind as you do. Everything high-profile establishments, for example. The goal is for the you include should tie back to what you do, who you are, reader to keep turning the page. and why you’re doing it to help build strength and clarity into your brand. 1. Branded Cover Include your logo (even if it’s not finalized), the date, and If graphic design is out of your realm, this might be a good your name. time to engage a branding expert. The idea of paying anyone else when you may not have even secured a single 2. Concept cent in funding probably sounds very unattractive, but it Describe your restaurant concept and get the reader excited could mean the difference between getting 30 minutes of about your idea. Go into detail about the food you’ll be an investor’s time and getting passed over. Charles did as serving, inspiration behind your concept, and an overview much as he could to sketch out his own logo before taking it of service style. Define clearly what will be unique about to a graphic designer in order to minimize his costs. Looking your restaurant. through your contacts to see if you’ve got any talented friends is another low-cost way of going about this. 3. Sample Menu The menu is the most important touchpoint of any restaurant’s brand, so this should be more than just a simple What Your Business Plan Should Cover list of items. Incorporate your logo and mock-up a formatted menu design (again, tap a designer for help if needed). The strongest business plans always include all or most of the components described below. Charles advises that first- Your sample menu should also include prices that are time restaurateurs read a bunch of different business plans based on a detailed cost analysis. This will give investors a for other restaurants and technology and retail companies clear understanding of your targeted price point, provide to get a better sense of layout options, writing styles, and the first building block to figuring out average check

OpenTable - How to Open a Restaurant 8 What Your Business Plan Should Cover cont’d estimations needed to create financial projections, and a successful restaurant. Ideally, once you have described show investors that you’ve done the homework needed to the strong suit of every member of your team, you’ll be be confident that you’ll be able to sell these items at these presenting a full deck. Remember that most independent prices and operate within your budget. (We’ll dive into the restaurant investors are in this for more than just money, so specifics of costing menu items in Chapter 10.) giving some indication of what you value and who you are outside of work may also be helpful. 4. Service This section is most relevant for fine-dining concepts, 6. Design concepts that have a unique service style, or if you have Incorporate some visuals. Create a mood board that shows particularly strong feelings about what role service will play images related to the design and feeling of your restaurant. in your restaurant. It can be a powerful way of conveying Planning on cooking in a wood-burning oven? Include that. your approach to hospitality to investors by explaining Photos of materials and snippets of other restaurants that the details of the guest’s service experience. Will your you love that are similar to the brand you’re building are restaurant have counter service designed to get guests also helpful. on their way as quickly as possible, or will it look more like theater, with captains putting plates in front of guests 7. Target Market simultaneously? If an extensive wine program is an integral Who is going to eat at your restaurant? What do they do for part of what you’re doing, will you have a sommelier? If you a living, how old are they, and what’s their average income? don’t feel that service is a noteworthy component of your Once you’ve described them in detail, reiterate why your operation, address it briefly in the concept section. specific concept will be appealing to them.

5. Management Team 8. Location Write a brief overview of yourself and the team you have There should be a natural and very clear connection established so far. You want to demonstrate that the between the information you present in the “Target work experience you’ve acquired over the course of your Market” section and this one. You probably won’t have a career has provided you with the necessary skills to run specific site identified at this point in the process, but you

OpenTable - How to Open a Restaurant 9 What Your Business Plan Should Cover cont’d should talk about viable neighborhoods. Don’t assume going. If you’re going to retain a PR/marketing company, that potential investors will be familiar with the areas introduce them and explain why you’ve chosen them over you’re discussing and who works or lives there -- make other companies (including some of their best-known clients the connections clear. You want readers to be confident helps). If not, convey that you have a solid plan in place to that your restaurant’s “ideal” diner intersects with the generate attention on your own through social media, your neighborhood(s) you’re proposing as often as possible. If website, and media connections. don’t have a site, this is a good place to discuss what you’re looking for in terms of square footage, foot traffic, parking, 11. Specialists & Consultants freeway accessibility, and other important details that we’ll List any outside contractors you plan to retain, such as: outline in Chapter 3. • Accountant 9. Market Overview • Attorney Address the micro and macro market conditions in your area. • Architect At a macro level, what are the local and regional economic • Designer conditions? If restaurants are doing poorly, explain why • General Contractor yours won’t; if restaurants are doing well, explain how • PR & Marketing you’ll be able to compete in an already booming restaurant climate. At a micro level, discuss who your direct competitors Briefly explain the services they’ll be providing for you, why are. Talk about what restaurants share your target market you chose them, and any notable accomplishments. and how you’ll differentiate yourself. 12. Business Structure 10. Marketing & Publicity This section should be short and sweet. What type of The restaurant landscape is only getting more competitive. business structure have you set up and why did you make Discuss your pre- and post-opening marketing plan to that specific decision? As we’ll discuss in Chapter 2, you will show investors how you plan to gain traction leading up need to work with an attorney to help you determine what to opening day, as well as how you’ll keep the momentum business structure is best for you.

OpenTable - How to Open a Restaurant 10 What Your Business Plan Should Cover cont’d

Lou Guerrero, Principal at Kross, Baumgarten, Kniss & Guerrero, emphasizes that, “You’ll get a lot of accountants that “Step one: write a business plan. Step two: hire a tell you that they’ve done a couple of restaurants, but you have good attorney. In addition to helping me build a to choose someone that has a deep expertise in what you’re smart, sustainable business structure, my attorney doing. There’s nothing to gain from going with someone that was also a great resource for reviewing my doesn’t have a very restaurant-centric practice.” business plan because she’s read thousands of them. She was a very helpful, experienced outside perspective for more than just legal matters.” A well-vetted accountant with restaurant experience will know exactly what you’ll need to have prepared to show investors. Charles Bililies The key projections you can expect to work on are:

• Pro forma profit and loss statement for the first three to 13. Financials five years of operation Let your accountant guide you through this portion of • Break even analysis your business plan. It is crucial that whoever you retain to • Capital requirements budget help you with your financials has a wealth of restaurant experience (not just one or two places), as they should Additional Resources: For detailed reading on building the be familiar with the specifics of restaurant finances and financial portion of your business plan, see Restaurant Success know what questions to ask you. Before creating realistic By the Numbers, by Roger Fields, CPA. financial projections, your accountant will want to know approximately how many seats you’re planning on having, what your average check will be, and approximately how Building a Pitch Deck many covers per day you plan to do. Being conservative in these estimations is key as these three data points will be A pitch deck is a consolidated, visually-driven version of used as the basis for figuring out whether your concept is your business plan, and it’s an extremely helpful tool for you financially feasible. and the person you’re presenting to. Why? Your business

OpenTable - How to Open a Restaurant 11 Building a Pitch Deck cont’d plan is going to be content heavy; lots of writing, not a lot friends and colleagues that you trust; it’s hard to see the of pictures, and too much information for any person to picture when you’re inside the frame. reasonably follow along with while you’re in a face-to-face meeting. • Drop the NDA. Charles says, “I was initially petrified that someone was going to take this idea and just run with it, A well-designed pitch deck is a visual aid to help you but I quickly realized that I had much more to gain from illustrate your key points and to help potential investors making it as easy as possible for people to engage with better understand your vision. Here are a few tips for my idea.” creating an effective deck: • Isolate your risk factors. “As a first-time restaurateur, • It should be no more than 10-15 pages (printed) or slides you’re an unproven operator and that’s a risk factor,” (digital presentation). says Mike Harden. “If you open an unproven concept in • Use your business plan as your outline with roughly an up-and-coming location and it fails, you’ll never know one slide representing a section (use more for important why your idea didn’t work.” areas like describing your concept). • Try not to put more than 10 words on each slide and make each one impactful. Key Takeaways • Use visuals to engage the person you’re speaking with. What images best represent what you hope to do? 1. Pick consultants who have a deep expertise in what • Keep the entire deck sharp, professional and on-brand. you’re doing. Two of the most important people you’ll • Bring a digital version and a hard copy to meetings so work with in the process of opening your restaurant that technology failures don’t throw you off. will need to be identified at this stage: your attorney and your accountant. Do your homework to make sure Additional Tips from the Experts they have depth of experience in the specific type of restaurant you’re opening, check their references, get • Share your business plan with people who are experts price quotes, and ask other restaurateurs that you trust in areas that you’re not. Accept critical feedback from who they use for these services. OpenTable - How to Open a Restaurant 12 Key Takeaways cont’d

2. Get consultants (like your attorney and accountant) 4.1. Build a business plan that showcases your brand. This involved as early as possible. Lou says, “A one-hour is the first representation of your brand, so make sure conversation today can save you a lot of heartache down it’s something you’re proud of -- a designer or talented the road if you’re able to address a whole host of issues friend can help. that aren’t in your area of expertise.” Get a lot of input before you actually start spending time and money to 5.2. Build an image-driven pitch deck to summarize the open a restaurant that hasn’t been vetted. contents of your business plan. The deck will help guide you through meetings with investors, where they won’t 3. Make sure your business plan demonstrates both a have time to pore over every word. passion for your concept and an understanding of business and finance. You need to inspire potential investors to get involved, but you also must show that your concept will be financially viable.

OpenTable - How to Open a Restaurant 13 How to Fund Your Restaurant Setting Up Your Business

The next big decision to make about your restaurant-to- The best way to find a great attorney is to ask peers whom be is how the business will be structured. This part can be you trust and respect for referrals. Whoever you hire must overwhelming and confusing, so don’t try to figure it out have extensive experience in working with the specific type yourself. Get an attorney involved to help you sort through of restaurant you’re planning to open. For example, an the pros and cons of each structure, as there is no one way attorney who has 50 restaurant clients that are all fast-food that works best. chains can rightly claim that they have a lot of restaurant experience, but if you’re planning to open something closer Your business structure will address the following aspects to The French Laundry, this is not a good fit. of your restaurant:

• The amount of taxes you will pay • The extent to which you and your partners/investors are “You don’t have to retain a lawyer up front, but held personally responsible for debt incurred by your you at least need to a have a consultation with an restaurant (liability) attorney to understand your options in terms of • The amount of flexibility you have in the event you incorporation, as well as the laundry list of other things that you’ll need to consider. Then, when decide to sell or transfer the business you get to the point when you’re ready to retain • How investors get paid back an attorney, you already have someone that’s • The protection of your intellectual property familiar with you and your concept.” Roberta Economidis OpenTable - How to Open a Restaurant 14 Overview of Common Business Structures

There is no blanket “best” or “worst” way of structuring • They do not bear personal responsibility for the debts your business. You and your attorney will work together of the business beyond the amount of money they to determine the most successful structure based on your invested. specific wants, needs, and circumstances. Below is a brief overview of each major category. Corporations Sole Proprietorship A sole proprietorship is simple -- it means you are the only Corporations are created by state law and essentially separate owner of your business. You own all of the property, you you and your partners or investors from your business. If keep all of the business profits, and you are also personally your restaurant is a corporation and it fails, everyone who liable for its debts. is invested in it (yourself included) is only responsible for his or her own investment, nothing more. People create Partnerships corporations to shield themselves from liability. There are two different types of partnerships, general and limited. There are two types of corporations: S Corps and C Corps. They each have pros and cons that your lawyer and • General Partnership accountant will be able to explain to you in the context of • This works just like a sole proprietorship, but with your specific business. multiple people. General partners, like sole proprietors, bear the risk of unlimited personal liability.

• Limited Partnership “The restaurateur wants any contracts or • In a limited partnership, there must be at least one agreements -- whether they’re with the seller of general partner and the rest of the partners can be a restaurant that you’re purchasing, or a landlord limited partners. Two things to know here: or an investor -- to be with the corporate entity, not the restaurateur themselves, to shield them • If someone is a limited partner, they cannot be an from liability.” active part of running the restaurant operation and cannot take a salary. Roberta Economidis

OpenTable - How to Open a Restaurant 15 Limited Liability Companies

An LLC has shared attributes of a combination of a property. The S Corp will be the entity that goes on to open partnership and a corporation. There are some distinct up other LLCs and other restaurants, effectively protecting advantages to creating an LLC: all members (including you) the rights to a restaurateur’s concepts and ideas, since the are sheltered from liability; depending on the structure, investors will only be owners in the subsidiary LLCs. either you have all of the authority, or all members have the right to help manage the business, and there is no limit to how many shareholders you can have in an LLC. Another Figuring Out How Much Money You Need big plus is that LLCs are very flexible, and this flexibility will be helpful when it comes time to structure investment The question every aspiring restaurateur of course wants to payback terms. know is, “So, how much is this whole thing going to cost?” The short answer is, it varies wildly depending on your market, concept, space, and a host of other considerations. S Corp Within An LLC Those considerations are a great place to start when putting together your capital requirements budget, which Roberta, Partner in the law firm of Georgopoulos & we discussed in Chapter 1. Economidis, LLP, provided great insight into the option of creating an S Corp that will act as the manager of the That capital requirements budget should include a LLC for two important purposes: first, to improve the summary of all of your opening costs, including working restaurateur’s tax treatment and secondly, to ensure that capital and contingency money for when (not if) you the restaurateur’s intellectual property is protected. exceed your initial budget. Your pro forma and your capital requirements budget will help determine how much If you’re thinking about replicating your concept -- building working capital you need based on when your restaurant is more stores of the same concept or opening multiple projected to generate positive cash flow. concepts -- it can be beneficial for the restaurateur to be a member of an S Corp, not the restaurant’s LLC. The S Corp This list includes some but not all of the items to consider is generally 100% owned by the restaurateur, which means when putting together your capital requirements budget: that the restaurateur also owns 100% of the intellectual

OpenTable - How to Open a Restaurant 16 Figuring Out How Much Money You Need cont’d

• Rent & rent security deposit Once you, your attorney, and your accountant feel • Design costs comfortable with the accuracy of each estimate in your • Architect capital requirements budget, you’ll have your fundraising • Designer goal. As a best practice, err on the side of overestimating • Contractor your expenses. • Construction costs • Contractor • Legal fees • Accounting fees “The importance of having enough set aside both • Other consulting fees for working capital and for contingency money • Licenses & permits was imprinted on me by a number of people. It’s • Liquor license always better to raise more than you need because • (More information on licenses and permits in Chapter 4) it’s a lot harder to turn back and ask for more. • Insurance There’s no such thing as too much, since you can • Furniture, fixtures, and equipment always bank it as working capital or give it back.” • Kitchen equipment Charles Bililies • Front-of-house smallwares • Back-of-house smallwares • Dining room furniture Structuring Investor Payback & Ownership • Point-of-sale system • Reservation system Once you’ve figured out how much money you need to • China, glassware, silverware, holloware raise, you’re ready to hit the pavement and start pitching • Opening inventory of all food & beverage investors, right? Not quite. Before approaching potential • Opening payroll, including staff training (discussed in investors, you need to have a good idea of what you plan to Chapter 9) offer them. • Pre-opening events (discussed in Chapter 9) • PR & marketing Work with your attorney and accountant to figure out what • Working capital payback terms are best for your particular business, as well • Contingency

OpenTable - How to Open a Restaurant 17 Structuring Investor Payback & Ownership cont’d as how your ownership structure will break down. Don’t investors back plus their return somewhere within two to be afraid to ask questions when solidifying these details. four years. If you’re in fine dining, where the profit margins The more confident you are navigating the terms of your are not as good as casual concepts, you want to pay your restaurant, the more confident potential investors will be in investors back plus their return within five years. Anything your handle of the project. above these benchmarks, and you should revisit your financial projections and perhaps tweak your concept. Take the time to research what investors in your market typically like to see in deals. Roberta’s golden rule? “Know Preferred Returns thy investor. Having a good idea of what your investor A restaurant is generally regarded as a risky investment wants is the key to getting them on board.” -- even more so when it’s a new, unproven concept and a first-time restaurant owner. A preferred return prioritizes Mike, Co-Founder and Senior Partner at venture capital and expedites the investor payback process by using 90 to firm ARTIS Ventures, says, “Investors are looking for good 100% of your restaurant’s profits in the first few years of quality payback terms. In the Bay Area, that tends to mean operation to pay back their full investment, plus whatever a 60/40 split in favor of the restaurant if it’s your first time, interest rate or premium is defined in your payback terms. and closer to 70/30 if you’re proven. Investors here like Once they’ve been paid back plus their preferred return, to reap anywhere from 90 to 100% of profits until their the restaurant’s profits will revert to being divided based on investment has been paid back 125%.” your ownership structure.

But remember, those numbers vary depending on the Let’s say the following things are true: market, economic conditions, and the particulars of your business. • You own 70% of the business and your investors own 30% • You have agreed to pay your investors back their initial Payback Terms investment plus 25% Regardless of how your payback terms are defined, there • You have agreed to pay investors 90% of the restaurant’s are general rules of thumb for how long it should take you profit until the preferred return is reached to pay your investors back. You want to be able to pay your • Your investors contributed a total of $500,000

OpenTable - How to Open a Restaurant 18 Structuring Investor Payback & Ownership cont’d

• Your restaurant is earning approximately $200,000 per be a careful balancing act between making the opportunity year in profit attractive to investors and ensuring the terms are fair for In this scenario, you will be paying your investors 90% you. Expect investors to own a larger portion of the business of your $200,000 profit ($180,000) until you’ve paid out than they will once you’ve opened a couple of successful $500,000 + 25% ($625,000). So, in this scenario it would places and proven that you’re able to run a profitable take about 3.5 years to pay your investors back and once business. With that said, you will never want to own less than this is done, the division of profit would revert to the 70/30 51% of your business so that you always have control of it. ownership structure you set up for the life of that business. Roberta agrees that being good to your investors, especially In addition to prioritizing investors, Charles, owner of Souvla when it’s your first restaurant, is extremely important. But in San Francisco, says, “You’re also incentivizing yourself she encourages restaurateurs to think past the immediate as the operator to run as lean, mean, and profitable of a future when structuring ownership so that if the business business as humanly possible, because your motivation is grows and other key team members emerge, the equity to close that preferred return period and revert to whatever structure allows for some flexibility to offer team members equity split that you have set up for the business so that you, equity or profit sharing. Offering investors great terms the owner, can start actually making money.” through a preferred return gives them an attractive option to not only protect their investment, but to earn something above and beyond what they originally put in.

“These people are at a much larger risk financially because they really have nothing to go off besides their interactions with you. By using a preferred “If you go on to open other restaurants and you return method, you are putting investors first and have an Executive Chef or a General Manager that rewarding them for trusting you.” are overseeing operations on your behalf, you Charles Bililies might want to give them equity in the business and suddenly, if your ownership terms are at 51/49, Ownership you’d have to drop below 50% of your own business How you structure ownership for your first restaurant will to do that.” Roberta Economidis OpenTable - How to Open a Restaurant 19 Structuring Investor Payback & Ownership cont’d

Once you have a solid understanding of what you’d like to dining in a restaurant with a potential investor and using the offer investors, Roberta recommends putting together a backdrop as an opportunity to discuss and evaluate your term sheet with your attorney and accountant and floating concept and establish some common ground. it past the core group of investors that you know are dedicated to supporting your project. This lets you take the Pitch Meetings temperature of your most committed investors, and if they A pitch meeting is exactly what it sounds like -- the first don’t like the terms that are being offered, you can easily time you meet with a potential investor or speak to them adjust your term sheet. If you skip this step and go straight over the phone is your opportunity to present your concept to submitting your offer to investors through aprivate and get them excited about it. Some people will request a placement memorandum, you may end up wasting a lot of copy of your business plan in advance of the meeting (yes, time and money if changing the terms is necessary. you should send it to them), and if not, bring them a copy to keep. This is also where the pitch deck we discussed in Chapter 1 will come in handy. Be ready to explain who you What to Expect from the Fundraising Process are, how you came to this idea, and most importantly, why the market needs your restaurant. Raising money will be a process with each person you approach. Nearly no one will be willing to give you money Mike says, “The first five to 10 minutes are crucial, especially after just one meeting, so think about the process as for people that get pitched all the time. In that first meeting, building a relationship, not as a transaction. just focus on getting them excited. Don’t focus on too many details, just present the core of what you’re doing and if it In more than one conversation with restaurateurs and meshes with that person and they’re excited about it then investors, the process was likened to dating. Get to know you’ll earn yourself another meeting.” each other. Take the time to figure out if your areas of expertise complement one another, if your passions align, If the relationship doesn’t quite click in this first meeting, and if your personalities click. They don’t need to be your don’t throw away their email address. Keep them on your best friend, but it also doesn’t make sense to do business list and invite them to any events you host on behalf of your with someone you don’t trust. When appropriate, try future restaurant (explained below). You never know if and when that person may warm up to the idea. OpenTable - How to Open a Restaurant 20 What to Expect from the Fundraising Process cont’d

Site Visits opportunity to get a status update on the project, familiarize If you have a location secured while you’re in the pitching themselves with the site, ask questions, and get excited process, invite potential investors to meet you at your site. about the progress you’ve made. The more you can incorporate tangible, visual elements into your presentation to help the potential investor better Events understand what you’re planning to build, the better. Host an event where you bring everyone who’s interested together for a tasting dinner or something that represents However, you will also need to be prepared to hold pitch your specific concept, so people can really envision it. meetings before you’ve secured a location because signing When? It depends. These events are a great way of getting a lease not only requires a good chunk of capital, it also investors that are on the fence off of it, but they also come requires confidence that you’ll be able to find the rest of the at a financial cost, so be mindful of making sure the money funding you need to get the restaurant up and running (see you’re investing in events has a tangible payoff. Chapter 3 for lease-negotiating tips on this topic).

Charles says that this was one of the most challenging Friends, Family & You aspects of the fundraising process for him. Almost everyone that was interested in his concept would immediately Before approaching anyone about investing money in your ask where the restaurant was going to be. Despite having restaurant, figure out how much you’ll personally be able to a well-researched list of neighborhoods ready to go, the contribute. Even if it’s nowhere near the six-figure range, any response he got to that was mostly, “Let me know when outside investor will want to see that you’ve got some skin in you have a location.” This can turn into a real chicken-and- the game. egg situation, especially in cities like San Francisco, where finding and securing the right site for your restaurant can After you’ve assessed how much you’ll be able to chip into take years. the pot, your friends and family will likely be the next group of people you speak to about investing money. For the If investors commit to you before you’ve found a location, sake of your business and your personal relationships, be be sure to meet with them again on site so they have an pragmatic and professional in your approach. Treat each

OpenTable - How to Open a Restaurant 21 Friends, Family & You cont’d individual in this group just as you would any other Matt Hemsley, one of the primary investors in Spoon and potential investor because regardless of your personal Stable in Minneapolis, stresses: ties, you’re asking them to give you real money, and to take a real risk on your business. Both parties need to be “Even if you know that the economics are sound, they emotionally and financially prepared in the event that the are never going to be the compelling part of the deal. business fails; if the idea of not being able to pay them back Ever. If you’re looking at high-net worth folks who are is too tough to bear, it’s probably best that you pass. sophisticated investors and you say ‘please invest in this hugely risky operation with low financial returns for the Even if you’ve told your older brother about the restaurant sake of making money,’ they’ll look at you cross-eyed. For of your dreams for the past 20 years, don’t waste a valuable that reason, finding investors whose passions align with opportunity to practice your pitch and answer questions. yours is really important.” It will take you time to get comfortable with the process of presenting your idea to new people, so use your friends and The moral of the story is, if you’ve done your due diligence family to help you build confidence. up to this point -- if you’ve written a researched business plan, built conservative financial projections, created investor-focused payback terms and a fair ownership What Makes Your Restaurant a Good Investment structure -- you should be able to walk into these meetings with confidence, tell your story, and make an emotional First of all, an investor wants to know that the financial connection with the investor. Ultimately, how passionate terms (ownership structure and payback terms) are that investor is about the core of what you’re doing will reasonable. Next, they will assess the financial feasibility of determine their willingness to invest. your concept and whether it’s something they’re interested in or passionate about. Mike says, “Of course, the investor needs to know that you have a good business model that’s What Makes Someone a Good Investor based on conservative projections and not a best-case scenario, but once that’s established, they’re looking at the Finding investors is a two-way street -- it’s a relationship, vision, the concept, and the passion behind it.” not a transaction. As a restaurateur, you want to find

OpenTable - How to Open a Restaurant 22 What Makes Someone a Good Investor cont’d investors who complement you and add value to your every single person you know and just be out there living it business outside of just providing capital. Don’t sign on and breathing it and doing it.” investors if you don’t value their opinion in some capacity. Look for investors with experience in the restaurant industry For Charles, outside of friends and family, all of his or in areas that would be beneficial to a restaurateur. investors came from networking. The group of people that ended up funding his business wasn’t what he initially Also, do your homework. Matt says, “Really get to know and expected it to be, but those people referred him to other try to understand from a third-party perspective who you’re people and that process, repeated many times, landed him doing business with. People build reputations over time with the capital he needed to start Souvla. Be persistent and it’s not that hard to figure out if this is this someone and patient, and as Mike warns, be honest with yourself. whose previous business partners would all do business If you’re having a really hard time finding your first $200k, with him or her again or if it’s someone that’s burned every you’re probably just not quite ready yet. bridge that they’ve crossed.” There is no specific ideal number of investors. They key is setting a minimum amount for investment and then How to Find Investors sticking to that; you want to avoid having a lot of people coming in at very small levels. Well folks, if you were hoping for a consolidated list of phone numbers in this section, we’re sorry to disappoint. There is no silver bullet when it comes to finding investors Investor Relations (or anything else, really). Many restaurateurs have found themselves in difficult Mike says, “You can sign up for every list and buy all the situations as a result of not being clear about the benefits things and do all the stuff and go down every rabbit hole, of being an investor before any contracts are signed. but it just never works. I’ve just seen people try everything The contract and other investment documents that your and the truth is, there isn’t any other way outside of just attorney crafts for your investors will include information hustling the f*ck up and picking up the phone and calling and parameters around what each party can and cannot do

OpenTable - How to Open a Restaurant 23 Investor Relations cont’d and how decisions relating to the business will be made, but relationship where investors feel in the loop. You may have some of the perks that your investors may be interested in to answer some uncomfortable questions (particularly aren’t appropriate for inclusion in legal documents. when numbers are behind schedule), but there is no substitute for having a productive dialogue with the folks With that said, it doesn’t mean that they shouldn’t be who are financing your project. discussed. If an investor calls for a reservation for 10 people on Friday night at 8 p.m., how will you respond? Whether Besides finding investors, there are other financing options it’s yes or no, your investors should know in advance what to consider: special treatment they can expect. This conversation should be a positive one -- this is an opportunity for you to get to Bank Loans know your investors and figure out what you can do to make Banks are the most conservative lending option you have, them feel appreciated without compromising your operation. and given the risky nature of startup businesses, and restaurants in particular, don’t count on getting any money Some restaurants have special beer steins with their from them. Even if you personally guarantee the loan, most investors’ names on them, or they host investor dinners a banks won’t lend you money. couple times a year. Roberta urges restaurateurs to do their research around investor perks because some of them, like Small Business Administration (SBA) Loans meal credits, can be taxable to the investor and will incur an The Small Business Administration is a government entity additional cost for the restaurant. Regardless of what you that works with designated lenders, like banks, to issue offer, make sure everyone is on the same page so that no one loans. Because the SBA will guarantee the majority of your feels unsatisfied or taken advantage of down the line. loan (you must personally guarantee the rest), it’s more attractive to banks and other lenders to issue a loan. There The key to healthy investor relations is managing are pros and cons of borrowing money through the SBA, and expectations and creating a consistent flow of information your accountant and attorney will be able to tell you much regarding the state of your restaurant. A regular cadence of more about your options and whether it’s a viable source of updates -- from a quarterly investor meeting to a monthly funding for you. Restaurant Success By the Numbers, by Roger email update -- goes a long way to facilitate a strong Fields, also has a comprehensive chapter on this subject.

OpenTable - How to Open a Restaurant 24 Investor Relations cont’d

Crowdfunding Another major benefit? Crowdfunding is a valuable data Crowdfunding allows entrepreneurs to pitch their ideas to point to show potential investors that there’s substantial anyone and everyone via online platforms like Kickstarter interest in what you’re doing. and Indiegogo. People who are attracted to your idea enough to support it financially will pledge money in exchange Here are some of Desi’s tips to ensure that your for prizes and rewards. It sounds simple, but a successful crowdfunding campaign is a successful one. crowdfunding campaign requires an average of 140 hours over the course of three to four months to adequately 1. Build a team of people with different skill sets. You’ll prepare for, as well as solid expertise in messaging, graphic need a strong writer with a good sense of marketing design, photography, and videography. Given the few messaging, a graphic designer, a skilled photographer parameters that do apply to crowdfunding -- namely, that experienced in food photography, and a videographer. you only get to keep the money if you reach your goal within Know what you don’t know. the time limit applied to every campaign -- you shouldn’t be relying on this method alone to finance your restaurant. 2. Set an appropriate goal. First, figure out what specifically you’re going to use the money for. Next, do research to Desi Danganan of Plinth Agency is a rare expert on this figure out the average campaign amount in your market. subject. He is a successful entrepreneur who spent 10+ years as Finally, calculate the cost of your rewards and factor that a restaurant owner and has raised over $2.65 million dollars for into your goal. businesses through crowdfunding, angel investors, and VCs. 3. Prepare. Research similar projects to understand what the average person contributed to other campaigns, and get all of your messaging and social media posts organized “Really smart restaurateurs aren’t using and planned out before your campaign kicks off. Once it crowdfunding as the core of their financing. starts, it’s a 30-day sprint and every day is critical. They’re using it for marketing that makes a little bit of money.” 4. Build your audience early. “Momentum is essential in Desi Danganan crowdfunding,” says Desi. “If you reach 20% of your goal

OpenTable - How to Open a Restaurant 25 1.

Investor2. Relations cont’d

3. g 4. in the first few days, you are 80% more likely to hit your Key Takeaways goal. A successful party right after your launch can help jump-start your campaign by turning attendees into your 1. Raise more money than you think you need. evangelists.” Undercapitalization is one of the biggest reasons restaurants fail. 5. Put thought into your rewards. You can’t make a branded T-shirt the reward for a $100 pledge; it’s too far 2. Work closely with your advisory team -- your accountant from what someone would realistically pay for a T-shirt. and your attorney -- to determine how to structure your Remember that this is more about marketing than business, how to structure ownership, and what payback fundraising. Feature prizes at a variety of price points terms you should offer investors. to encourage as many people as possible to contribute. 3. Put your friends and family who are planning to invest Every dollar counts. through the same process as any other investor. It’s in your best interest personally and professionally to 6. Track your results. Use Google Analytics and social formalize the agreement. media statistics to track key metrics like how many people are visiting your page, where they’re coming 4. Don’t take money from anyone who will give it to you. from, and how much they’re pledging. If your campaign This is a long-term commitment, so it needs to be a good isn’t performing as planned, be ready to change fit for both parties. Taking on investors you don’t trust or courses. “It’s like fishing. If people aren’t interested in value won’t serve you in the long run. the bait you’re using, change it.” 5. Make a plan right out of the gate for how you’ll communicate with investors about the status and health of your restaurant once it opens.

OpenTable - How to Open a Restaurant 26 How to Identify Locations, Choose a Site & Negotiate Your Lease Location vs. Site

A location refers to the sub-market you want to place your where they live, where they work, and where they spend restaurant in, like a neighborhood in a big city or a specific their free time. Ideally, you’ll be able to find some areas that area within a town. A site is the specific space at an address encompass more than one of these categories; if you are within a location. located in a neighborhood where your target market both lives and works, there’s a better chance they’ll visit regularly. The best locations for your concept will be the ones with the highest concentration of your potential diners during your You don’t necessarily have to reinvent the wheel. If you find specific hours of operation. Do your research to identify what an area with a concentration of your people, other thriving location or locations are viable for your restaurant while restaurants in that location are indicators of good potential you’re writing your business plan -- here are five ways to start. for your concept. It’s tempting to think that going to an underserved market is more sensible, but the reality is that 1. Find Your People diners tend to like options. The more viable restaurants in First, understand who you expect your customers to be to their area, the more likely they all are to thrive. ensure their paths intersect with your restaurant. Figure out

OpenTable - How to Open a Restaurant 27 Location vs. Site cont’d

2. Hit the Pavement Fred Castellucci, President of Castellucci Hospitality Gavin Kaysen, chef and owner of Spoon and Stable in Group based in Atlanta, cautions, “Demographics give you Minneapolis, looked at more than 60 sites in various no indication of the cultural feel of a neighborhood, and locations before signing a lease for the restaurant’s current that’s the most important part. Are the members of your home in the city’s North Loop. target market dining out where they live or work? Or are they getting into their cars and driving to restaurants in He says, “You have to look to really understand a completely different neighborhoods?” neighborhood before considering it as a location for your restaurant. Spend some time there. What kind Fred also encourages prospective restaurateurs to of restaurants already exist? What kind of people are think about how much they enjoy hanging out in the there and are they the type of diner that will eat at your neighborhoods they’re considering -- remember, you’ll be restaurant? Will your concept be different than what’s spending most of your time there. already there and truly add value to that neighborhood?” 3. Embrace the Competition If the people you see aren’t a part of your target market or It may sound counterintuitive, but the best location is often you find concepts that are too similar to yours, walk away nestled into a cluster of other dining establishments. Think before looking at a single space. Resist falling in love with of it this way: If other restaurants are already in business and a space when the location isn’t right. Similarly, if you’re experiencing success, they are proof that the location is a fit planning on opening a taco shop in a neighborhood that for the target audience you share. Seek out spaces nearby, already has three taco shops, honestly ask yourself if you on the same block, or even right next door. think the neighborhood will be excited to welcome a fourth. While it’s nice to envision your audience planning an evening at your restaurant days in advance, these diners are only a Neighborhood demographics can give you a broad sense of part of your total customer base. Many others will simply age, income, population density, foot traffic, and number walk in, and others may even have been turned away from a of households. While these are solid initial insights, they neighboring restaurant by a long wait time. The more people aren’t comprehensive enough to be the basis for a decision. in and around your restaurant, the better for business.

OpenTable - How to Open a Restaurant 28 Location vs. Site cont’d

4. Know Your Hours of Operation concepts, in contrast, may be a great fit for neighborhoods Prime locations in high-traffic areas are going to cost more that are developing, provided that the time it will take the per square foot, so be clear on whether your concept will neighborhood to grow is reflected in the revenue projections be serving breakfast, lunch, dinner or some combination of of your pro-forma. the three to avoid paying a price that your restaurant isn’t designed to maximize. Fred says, “At the Iberian Pig, I took a chance on the neighborhood because I saw other similar businesses being successful doing things that were artisanal, creative, and interesting. I was also comfortable with sales building bit by “The ability to do lunch business and dinner business in the same location is rare, and if you bit as the neighborhood developed because I was running do find one that’s great for both, you’re going to the restaurant myself and I wasn’t carrying the salaries of a spend a high dollar per square foot to get in there. full management team, which is a huge fixed cost.” For a dinner-only concept, it doesn’t make any sense to look at locations where there’s a lunch and dinner market because you’ll be paying extra Choosing a Site money for a space that you’re not going to be using the whole time.” Richard Coraine, the Chief Development Officer of New York Fred Castellucci City-based Union Square Hospitality Group, talks about different approaches to opening a new restaurant. 5. Understand Developed vs. Developing Neighborhoods Evaluate each location with your specific concept in “There are two ways to go about it,” he says, “There’s either mind, considering how much working capital you’ve a space looking for an idea or an idea looking for a space. If budgeted and how you plan to manage it. Convenience- you dissect that, that means you either have a concept that based concepts like cafés or diners tend to demand you’ve been working on that you’d like to take to market, or high foot traffic and dense populations from day one of you’ve found the actual frame for a piece of art that you now operation in order to survive. Chef-driven and fine-casual need to create.”

OpenTable - How to Open a Restaurant 29 Choosing a Site cont’d

Neither approach is necessarily better or worse, but if I repeat, do not fall in love with a space. Rent will be one you’re a first-time restaurateur it’s much easier to engage of your largest fixed expenses, and buildout costs will be investors by demonstrating the passion you have for your anywhere from 50% to 75% of your total opening budget. concept and then showing that you’ll be able to find a site Falling in love with a space that isn’t right can be the that makes it financially viable. The space-looking-for- difference between success and failure. an-idea approach is more common among established restaurateurs who can either fund their own projects or An Idea Looking for a Space have a group of trusting investors behind them. Know what you’re looking for before you start looking. Spend some time up front establishing what your non-negotiable A Space Looking for An Idea “must haves” are for a site and what things you’d like, but In a nutshell, this approach is all about figuring out what can do without. As Fred says, not every factor will line up, and an existing neighborhood needs. When Union Square if they do the site is likely going to cost more than you can Hospitality Group signed on to do three concepts in Battery afford. Here are some of the biggest considerations: Park City, they already knew they wanted two of three sites to be used for existing concepts (Blue Smoke and Shake Size Shack) and the landlord asked that the third restaurant be Fred says, “Square footage is critical. It’s the easiest factor to unique to the neighborhood. eliminate a location based on. Do not try to squeeze yourself into a location that’s too small or try to take up a space that’s too big because both situations are inefficient and will lead to an inability to support your business over time.” “If I find a great space in a neighborhood that I really like and there’s something cool and The pro forma that you built with your accountant will give compelling about it, then I’ll ask myself, ‘What are they missing? What do they need? What can I bring you a good understanding of the square feet needed to to this neighborhood that they’ll be really excited make your concept work. If you’re still unclear, work with about?’ And those are fun questions to ask.” your accountant, your architect, and your designer to figure Fred Castellucci out the ideal square footage for a site based on the number of seats you need to make your concept financially viable.

OpenTable - How to Open a Restaurant 30 Choosing a Site cont’d

Rent PRO: You get to build exactly what you want when it The amount you can feasibly pay for rent every month comes to the kitchen, dining room, restrooms, etc. You while maintaining the health of your business is something get to work with a blank canvas. that should be firmly fixed in your head as you go out CON: Outfitting a blank space is often significantly to look for spaces. At this point, you’ve done careful more expensive. homework and invested in a team of experts to help build a budget that dictates what you can afford. Whatever that Taking over an existing restaurant space also has its pros and number is, respect it. There are two major types of rent cons: structure: flat monthly rent and percentage rent. PRO: This approach is generally a less costly buildout • A flat monthly rent is just like an apartment: you’ll agree process, as most of the key restaurant needs are to pay a certain dollar amount in rent every month. likely already in place. Richard says, “It’s also very clear to a permitter or the department of buildings that the • Percentage rent is typically a lower flat fee in addition kitchen always existed here and it’s not something they to a percentage of your revenue. Brian Lauck, General have to start from scratch and interpret.” Counsel for AltaMarea Group based in New York City, says, “You want to fix your real estate cost as much as CON: Looking at former restaurant spaces can limit possible so that you can maximize your return and not your options. Gavin says, “There aren’t always a have to share it with somebody else at any point.” lot of restaurants that are going out of business and turning over, depending on your market, and I wasn’t Blank Space vs. Existing Space sure I’d be able to find the things that were important A “blank space,” also called an “empty shell” or “white to me in a space just based on looking at former box,” usually comes in either the form of new construction restaurants.” or a space that previously housed something other than If you do take over a former restaurant space, be sure a restaurant, which you’re planning on building out to fit to provide a clear distinction between the new concept your needs. and the old.

OpenTable - How to Open a Restaurant 31 Choosing a Site cont’d

Parking TIP: Being in the midst of a nationwide restaurant boom, The importance of access to parking will vary depending always assume that if someone does a serviceable job and on your location. In New York City, there’s no need even to makes it easy for them, they can nab your target customers. even consider it for most restaurant concepts, but that’s not Figure out what your people need to get to your restaurant true of some other densely populated cities or rural areas. and get it done. In plenty of markets, poor access to parking is a non-starter. If parking is scarce, ask local valet companies if they have Visibility arrangements with nearby lots. The more visible your restaurant space is to people walking or driving by, the better, making corner spaces ideal because TIP: Make your parking options very clear on your website, they maximize your exposure. even if it’s to let guests know that there is ample street parking or where they can find parking lots and how much TIP: Look out for restrictions in terms of signage. If it’s a they cost. historic building, for example, there will likely be strict regulations around what your signage can look like, down to Accessibility color, size, and style. Gavin says, “For Spoon and Stable, an extremely important factor for me was that it was a really quick drive off the Zoning Highway 394 exit and you’re at our front door. A lot of our A pre-existing kitchen is not the only reason many clientele lives in our immediate neighborhood, but a lot of restaurateurs opt to take over existing restaurant spaces. them don’t, and it needed to be easy for those people to Jennifer Murri, the Business Development Manager for get here.” Richard points out that this isn’t something that AltaMarea says, “If we’re looking at a property that isn’t USHG has to think about too much for their restaurants in zoned properly or doesn’t have the right use listed on New York City because you can pretty much get anywhere the Certificate of Operations, that’s a really big deal. It’s by subway, taxi, or walking. There is a temptation to think complicated, expensive, and time consuming to change that if people like what you do, they’ll make the effort to get those things.” there, but that thinking is out of step with reality.

OpenTable - How to Open a Restaurant 32 Choosing a Site cont’d

TIP: Ask your designer, architect, or General Contractor to and either your designer, architect, or General Contractor help you assess these details -- we’ll dive into the details review it. Before we dive into how specifically each of later in this chapter. these people needs to participate in your lease negotiation process, let’s talk a bit about when you’ll need to bring them Liquor License on and how you should find them. Every neighborhood, city, and state has completely different laws and regulations around liquor licenses, but the one Tanya Shea, partner at Shea Design Inc. says: thing that’s true everywhere is that they’re never particularly easy to get. If you’re looking at a site in a neighborhood with only one or two other bars, the scarcity may be the result of “A lot of restaurateurs will sign a lease that forces very strict regulations. Given the liabilities associated with them into a financial corner and they have to serving alcohol, applying for a liquor license is usually an pay for a lot more and put in a lot more involved process that requires personal information from infrastructure than they initially anticipated. The you and, sometimes, your investors. smart place to bring people on board is right at the very beginning.” TIP: If you plan to serve alcohol at your restaurant, make Tanya Shea sure you’ll be able to obtain a liquor license at the site you’re assessing before moving forward. Do your due Key Players diligence and know what you’ll need to provide well in advance of preparing to sign a lease. Attorney At this point in the process, you will have at least consulted with an attorney and possibly already retained one. If you How to Negotiate Your Lease are happy with the relationship you’ve established and the attorney has experience with commercial leases, stay with Every expert (and I mean all of them) agreed that this is the same person because they are already familiar with your the number one place where restaurateurs go wrong. You concept. If you’re still on the hunt, start by asking your peers should NEVER sign a lease without having your attorney who they use and what their experience has been. Strong

OpenTable - How to Open a Restaurant 33 How to Negotiate Your Lease cont’d referrals and a deep background with restaurants similar to A critical question to ask, Tanya says, is, “What kind of yours are good places to start. business partner will you be to me? You need to bring on an architect and a designer in the beginning that are budget- Designer & Architect conscious and timeline-conscious.” A designer is traditionally responsible for laying out a space and choosing finishes, furniture, and other interior details Another major thing to look out for is whether a designer that make up the overall aesthetic of a space. An architect has a “look.” If you can easily see that all of the restaurants is a licensed professional that will draw your construction in a designer’s portfolio have elements in common or a documents and has the power to sign them and submit trademark aesthetic, consider passing. Tanya says, “You them for government approval. want a designer that’s going to create your vision, not theirs.”

Many firms will have both interior designers and architects So how do you find a talented, business-oriented, client- on staff in order to create seamless design and although it’s focused designer? Through referrals and interviews with by no means required that you hire a firm that does both, your peers. The restaurant industry is small, so ask around. Tanya stresses that your architect and interior designer should have a good relationship. If they’re not from the Interviewing the firms that you’re considering is also a same firm, make sure they’ve worked together before to really important step. Tanya encourages clients to control produce beautiful, functional restaurants and happy clients. that meeting so that you don’t spend the whole time being wooed by pretty pictures. “Ask them technical questions. When seeking a designer, find a company that has designed How do they approach restaurant design? How do they deal restaurants you love and that speak to your own creative with budgets? How do they deal with schedules?” Of course, vision -- but this can’t be the only filter. Tanya warns against only consider designers who have extensive experience in designers that lure you in with stunning portfolios and restaurant design, and spend some time in other restaurants enticing renderings of your own concept before ever having they have designed. Are the service stations functional? How a conversation about what your budget looks like. Don’t has the interior held up? You’ll want to be confident your let yourself fall in love with images of restaurants that cost designer has practicality and the long game in mind. $1,000 per square foot to build out.

OpenTable - How to Open a Restaurant 34 How to Negotiate Your Lease cont’d

General Contractor overbidding to protect themselves or to get the job. Never A general contractor is responsible for the overall put your contractor in a position where they can’t be upfront coordination of your construction project. This includes with you or your construction process will be wrought with hiring and managing trades and subcontractors, like costly change orders.” electricians and plumbers; creating a master schedule; applying for critical licenses and permits; and working with The second way of selecting a General Contractor is through your design team. pre-qualification. This is the method that our experts recommend because it’s a more relationship-based approach Of a restaurateur’s relationship with their GC, Richard says, “It’s and ensures that the restaurateur finds a GC who will be a almost like a nanny is in your family -- they’re not quite family great partner to them and their architect/design team. and they’re not quite your friend, but you’re letting them watch your kids. There’s a lot of vulnerability on the owner’s part, In the pre-qualification process, your designer will make because your General Contractor has the three most important focused recommendations for General Contractors soon after things: your dream, your money, and your time.” a lease has been signed (though in some cases, this happens before a lease is signed). Then the restaurateur will interview There are two main ways to find a General Contractor. The them, and the GC will provide pricing based on the scope of most traditional way is to take your architectural plans, send the project. One of the biggest benefits here, Tanya says, is them to three or four GCs in your area, and have them come that “bringing the GC on as a partner to your architect leads back to you with a price quote. This approach is the more to an understanding of pricing at every step of the way so time-consuming of the two and you’ll also find a great deal of that both parties can keep the client’s budget in mind.” variability in what you get back. There are so many different approaches to pricing construction jobs that it will be difficult Chris Zeman, the Vice President of Zeman Construction, to compare each bid on a level playing field. You never want to based in the Midwest, advises that the interview process send partially completed plans out for pre-bidding. should include more than just the GC. “You’re not hiring a general contractor, you’re hiring a few individuals that Tanya says, “Your plans won’t be detailed enough, so you’re happen to work for a GC. The project manager and the going to have contractors that are either underbidding or superintendent that will be on site everyday -- that’s who

OpenTable - How to Open a Restaurant 35 How to Negotiate Your Lease cont’d makes or breaks your project. Those are the people that to sublease your space. Both the lease term and the renewal you need to interview so that you’re not only qualifying options need to be assignable; otherwise, you will be severely the company, you’re qualifying the individuals that that hindering the value of your restaurant if you put it up for sale. company would dedicate to your specific contract.” Liquor License Legal Considerations Roberta says that she’s seeing more and more landlords Your attorney will need to review your entire lease asking for first right of refusal on the liquor license in the document and will be your greatest ally in helping you event that you leave the space. What does this mean? “In negotiate terms. Roberta, Partner in the law firm of California a liquor license cannot be used as security, but Georgopoulos & Economidis, LLP, says, “Your lease is your if this clause is in your lease, a landlord has to be offered insurance policy because if things don’t go well, you can sell the option to buy your liquor license at fair market value your lease.” Every lease is different, but these are the items if you decide to sell. In some markets, that’s a $250k asset that every lawyer should be looking for. today; who knows what it’s going to be in 5 years? If I’m the buyer of your restaurant and I know that the landlord has Term & Renewal Options the right of first refusal on the liquor license, it’s going to Make sure you have a long-term lease with renewal options. make purchasing your restaurant at a high price much less At minimum you’ll want a 10-year lease, though some desirable. It can also make relocating your restaurant difficult operators, like Union Square Hospitality Group, prefer 15-year since the license is supposed to stay with the premises.” leases to show landlords that they’re really in it for the long game. Try to negotiate two five-year renewal options and Transfer Premiums make sure the terms and conditions of these options are as As the restaurant industry continues to blossom, landlords close as possible to the terms of your original lease. want in on the action. Taking first right of refusal on liquor licenses is one result of this, as is the appearance of transfer Sublease & Assignment premiums in restaurant leases. This means that if you sell Any lease that you sign must, without exception, have a your restaurant, your landlord will take a portion of the sale sublease or assignment clause. Without it you will not have price -- in some cases, as much as 50%. the right to sell or transfer your business, nor will you be able

OpenTable - How to Open a Restaurant 36 How to Negotiate Your Lease cont’d

Personal Guarantees In every document you sign, do everything you can to remove or limit personal guarantees. If you have personally “In order to be a good tenant, we believe that we guaranteed a lease, it often means you’re legally bound to need to be focusing on cooking and serving food pay the rent for the entire duration of the lease term -- even and being nice to people, not fixing problems if your business fails. that exist because of the building. We make sure that building owners agree to contribute whatever There are three things you can do here to minimize is needed because our viewpoint is that the your risk and your landlord’s that are significantly less building will always be theirs.” detrimental to the restaurateur than signing off on a Richard Coraine personal guarantee: Delivery of Premises 1. Limit the time on the guarantee. This section of a lease outlines exactly how the landlord will 2. Increase the amount of the deposit. be turning the space over to the tenant: what the heating 3. Ask for a rolling guarantee. If you agree to a one-year and cooling capacity of the building is, its electrical capacity, rolling guarantee, for example, this means that you are and gas specifications, among many other things. Tenants responsible for paying the next 12 months of rent at any often don’t take the time to review this section carefully given time. enough, and landlords often haven’t defined what they’ll be delivering clearly enough. Building Considerations You must have either your designer and architect or your Chris says that this is where a lot of critical details are General Contractor look at any space you’re considering hiding. “Historically speaking, most restaurant leases before signing a lease. Either party should be able to do the are a derivative of a retail lease, and a retail space is assessment, and many architects and GCs actually include vastly different than a restaurant space. We’ve seen an this inspection as a normal part of their services. Below, overwhelming pattern of restaurant tenants signing leases you’ll find a list of specific items that should be reviewed. that only include half the amount of electricity and half the

OpenTable - How to Open a Restaurant 37 How to Negotiate Your Lease cont’d amount of HVAC cooling that they need. All of a sudden, exhaust system and it will be the most costly part of your there’s $250k you’ll have to spend just to make it a usable buildout if you’re going into a space that doesn’t already restaurant space. Is that fair to the operator? In our world, we have it. Don’t guesstimate -- ask your experts for an estimate say no, especially when they are paying restaurant rent rates.” of buildout cost for any space you’re seriously considering. Every site will be different, and this expense can vary by When you’re reviewing leases with your team, assume that hundreds of thousands of dollars. the terms defined are those needed to run a restaurant. The best way to ensure that you get a space equipped to handle Lay Out the Space the structural needs of your specific type of restaurant is to From personal experience, I believe that it’s important to ask your General Contractor or architect to draft a Landlord have your designer give you a rough layout of what your Work Letter, defined below. concept will look like in a space before signing anything. If you’ve thought enough about your concept to write a Landlord Work Letter business plan, pitch it to investors, and look for a site, there’s The Specifications for Landlord’s Work outlines in detail what no question that you have at least some idea of how you the tenant requires the landlord to provide before any lease want it to be laid out. It doesn’t have to be a detailed design is signed. Chris recommends giving this letter to the landlord rendering, just a rough sketch. For clients that I’ve worked before you even sign a letter of intent, so that no time is with, this exercise has been the difference between signing wasted in moving forward if the landlord isn’t willing to a lease for a space that wasn’t properly oriented or sized comply. At Zeman Construction, Chris says, “We tour the raw to hold their vision and graciously moving on to the next space and I write the Work Letter and I hand it to the operator potential site. and I tell the operator to hand it to the landlord and say, ‘This is what we would like you to deliver for us if we’re to even be interested in signing a lease for this space.’” Additional Tips from the Experts

Black Iron There are plenty of firms you can hire that exclusively You will hear this term from your landlord, your designer, conduct inspections on buildings before business owners your architect, and your GC. Black iron is the kitchen sign a lease. Chris cautions against using these companies

OpenTable - How to Open a Restaurant 38 Additional Tips from the Experts cont’d exclusively without the input of a GC because generally 4. Pre-qualify general contractors to ensure they have a they can be companies derived from real estate brokerages strong working relationship with your designer and are and may not have access to current construction market making budget-based decisions early on. pricing or techniques. “There are just so many nuances when it comes to looking at an existing space and figuring 5. If you’re going into a space without kitchen out if it can be adapted to a restaurant. The harder part is infrastructure built, know exactly how much it will cost how much it will cost to adapt it, and that’s where I think to install the necessary systems before moving forward. that a GC is much better suited.”

Key Takeaways

1. Spend time in each of the neighborhoods you’re considering to be sure you have a thorough, first-hand understanding of their culture and what you could add to it.

2. Don’t fall in love with a space without first understanding if it makes business sense.

3. Never sign a lease before your attorney and either your designer and architect or your general contractor have reviewed it.

OpenTable - How to Open a Restaurant 39 In The Weeds: Aaron London

Aaron London of AL’s Place in San Francisco, on post-opening staffing woes and finding the silver lining.

“I had one cook who left a couple months after opening. He was super green but had some potential, so me and my sous chef really tried to take him under our wing and train him, but we also pushed him hard and he kept f*cking up. He came in one Sunday and was not even remotely prepared and I laid into him pretty hard. Thirty to 45 minutes later, my sous chef comes in and he’s like, have you seen Kevin? We looked around and the guy had walked out. So, that was the first day that I ever worked a station at my restaurant.

I didn’t get to the station until 2 p.m. and there were only two other guys in the kitchen -- my sous chefs. I went through his station and emptied all of his mise en place and made myself a new list of what I absolutely had to do in order to be ready for service and just crushed it out and worked service. We got through that night and then we tried our damndest to hire people. We had people stage that I just couldn’t hire.

For two months, it was me and my two chefs and no cooks. I would come in at 8 a.m. and do all the receiving and all the bulk prep ‘til 10 a.m., then from 10 a.m. to 1 p.m., I would do all meat and fish fabrication and portioning. At 1 p.m. I would move to cold station and start prepping out cold station and set up for service. Then I would break to do the menu with the GM, go back and finish setting up the station, break to do line up, then go back in the kitchen and

OpenTable - How to Open a Restaurant 40 In The Weeds: Aaron London cont’d

work service. Anything that I had to do besides working a station, I would do here on Monday and Tuesday, both 16-hour days for me, when we were closed just to catch up. It was gnarly.

The worst thing about it wasn’t the work or the hours, it was that I felt like it wasn’t my restaurant anymore. I wasn’t seeing the food going out, I wasn’t seeing the guests, I wasn’t seeing the interactions on the floor and I wasn’t a part of anything other than working a station. So that sucked, but it also fast tracked me back to remembering how to work a station and being very confident with skills and what I want and how I want things done. I almost think a year from now, I’m going to go on stage and thank Kevin Cabrera for walking out because it may be the singular thing that made AL’s Place better faster. That was actually the singular best thing that’s happened to me since opening AL’s Place.”

OpenTable - How to Open a Restaurant 41 How to Deal with Legal Regulations

There’s no universal checklist for all of the necessary licenses, you have a clear understanding of what your landlord will be permits, inspections, postings, and signage for your new responsible for, as well as the duties that fall on you, the tenant. restaurant. These requirements vary greatly between states, cities, restaurant types, and even counties and If your lease states that your landlord is responsible for trash neighborhoods. The experts that you’ve hired to help you removal, they may be required to post a decal showing which -- specifically your designer, architect, and contractor -- will company they use and what the pick-up schedule is. Make help you get through everything, but you’ll need to be an this your first step to avoid confusion and help facilitate a active part of the process and take on responsibility as well. healthy, productive, and accountable relationship between you and your landlord. In this chapter, we’ll discuss 10 best practices to ensure you obtain everything you need to open your restaurant legally 2. Draw on the experience of your team. from the get-go, and then we’ll map out a case study to Your contractor, designer, engineer, architect, and kitchen show you the licenses, permits, certificates, and inspections equipment vendor will be your most valuable allies in needed to open a (fictitious) new restaurant in New York City. getting all of your licenses, permits, inspections, and postings completed properly. Gather this team and ask them to 1. Review your lease in detail. provide you with a list of everything that they know you’ll Before you sit down with your team and put together a need, as well as areas of uncertainty so that you know master list of action items, review your lease in detail so where you’ll need to do focused research.

OpenTable - How to Open a Restaurant 42 How to Deal with Legal Regulations cont’d

Chris Zeman of Zeman Construction says, “You need to 4. Research the requirements of each individual city agency. have a team established that has experience, otherwise Do independent research online, by calling or visiting the there’s going to be a lot of surprises and unmet major city and state agencies you will need to obtain permits expectations throughout the process. For the person that’s from, and by asking peers with similar concepts in your just going through this for the first time, it’s going to feel market what they needed to get their doors open. like an infinite list and like there are so many people that have their hand out that need to get paid for some sort of Jennifer says, “It’s really important to understand that city application, license, or permit.” agencies don’t communicate with each other. In New York City, for example, you need a Certificate of Occupancy from 3. Learn your city. the Department of Buildings and from the Fire Department Some municipalities are much more organized than others and there’s no link between the two.” when it comes to providing practical, accurate information and resources to help you better understand what’s Once you’ve visited centralized websites, make sure you’re required for you to open and operate your business. Cities then researching the requirements of each individual like San Francisco and New York have relatively advanced agency. For example, Jennifer adds, “Grease traps are online resources, while others may have nothing at all. Still, monitored by New York City’s Department of Environmental Jennifer Murri of New York City’s AltaMarea Group cautions Protection, but also the Department of Health, Department that even the most sophisticated online tools are only a of Sanitation, and Department of Buildings. They all have starting point. If your city doesn’t have a centralized Internet different rules that you can be issued violations for, so you resource for new businesses, they likely have an office you need to understand the requirements of each.” can call or visit to get the same information. 5. Make a master list, assign responsibilities & follow up. Track down the information up front to avoid delays and Once you’ve consulted every available resource and done as surprises. Remember, investing a day at your municipal much research as you can, sit with your team and compile a office early in the process can save you weeks or months of master list of every permit, license, inspection, and posting costly setbacks down the road. you’ll need. Delegate each item to a member of your team

OpenTable - How to Open a Restaurant 43 How to Deal with Legal Regulations cont’d and assign due dates as necessary. In your weekly will need to be kept on site and presented to inspectors construction meetings, update each other on relevant before and after you open. Jennifer recommends keeping progress, ask questions, and work together to get through copies of everything in one centralized binder that the inevitable setbacks and complications. General Manager of the property has access to so there’s no confusion when inspectors arrive. This will also make it easier 6. Get comfortable with the health code in your municipality. to replace expired permits and keep track of renewal dates. Department of Health (DOH) requirements vary greatly from state to state and city to city, and many DOH specifications 8. Calendar renewal dates immediately. will dictate how parts of your restaurant will need to be As soon as you receive any type of license or permit, put designed. Jennifer says, “Once you know where you’re going a reminder on your calendar for the appropriate renewal to open a property, contact the Department of Health for date, as well as a reminder a few weeks or months before your municipality and read the entire health code so that the actual date. Clearly delegate and note on the reminders you don’t get in too deep without knowing the regulations. who is responsible for each renewal and assign one person Once they start pouring concrete and putting pipes in, it’s (probably your General Manager) to follow up as important done.” She warns that even though a lot of standards are dates approach. consistent across the country, there are some things that are drastically different, like outdoor seating regulations. 9. Include health code and food handling safety in “The Department of Health really drives so much of the employee training. construction for your kitchen, back of house, and outdoor Some states require every employee on staff to go through seating areas,” says Jennifer. “You need to be in sync with food safety training, while others only require certain whatever the regulations are in your specific location.” individuals to go through it. Even if your municipality doesn’t demand that every person carry a food safety card, Jennifer 7. Keep all of your finalized documents in a centralized recommends ensuring that every employee has some level location. of food handling and safety training. Some permits and licenses will need to be posted in a place where they are visible to guests and employees, and others

OpenTable - How to Open a Restaurant 44 How to Deal with Legal Regulations cont’d

She says, “This creates a safer environment for staff and always follows up with them before and after they come in. guests and also helps us maintain our equipment. If She says, “I have to keep in touch with them to make sure employees have knowledge about their workstation, how it that they’re holding up their end of the bargain. When I needs to be set up, and how equipment needs to function started doing this, I noticed that we had these contracts in in order to align with code, they’re better equipped to place but no one was really monitoring whether their work understand when something is failing. This helps us avoid was being completed.” huge violations for the restaurant, as well as damage to major equipment.” Licenses, Permits, Inspections & Certificates Even if the law doesn’t require it, having a staff that’s knowledgeable and responsible about food safety will help On the following pages, you’ll find a chart that shows the shield you from the liability of an unfortunate mistake and help primary permits, licenses, inspections, and postings required you sleep at night, knowing your team knows the basics. to open a fictional restaurant called Chez Ruth, located in New York City. It’s important to note that this is far from 10. Set up service contracts right away. an exhaustive list and that the requirements and agencies Before your contractor and subcontractors disappear, bring involved in these approval processes in New York may be in your equipment service vendors and set up maintenance very different than your municipality. contracts. Jennifer does this for all of AltaMarea’s restaurants as a preventative maintenance measure to We chose to use New York City as an example because it make sure they don’t rack up massive emergency service has some of the most stringent and exhaustive permitting bills when equipment breaks. It’s very expensive to call policies in the United States. The information is intended to for service at night and on weekends, which are most demonstrate that there are lot of items to sort through, and restaurants’ primary operating hours. many of them will have requirements from or need to be inspected by multiple agencies. Also, the test case will give Once these appointments are completed, Jennifer negotiates you an overall sense of what you should expect from your service contracts, calendars the dates for their visits, and own licensing and permitting process.

OpenTable - How to Open a Restaurant 45

TEST CASE: Chez Ruth

Here’s some basic information about Chez Ruth that helped • Chain or independent: Independent us determine what they would need: • Leased or owned: Leased • Outdoor dining: Yes • City/State: New York, New York • Historical building: No • Neighborhood: Upper East Side • Delivery service offered: No • Number of seats: 90 • Candles in dining room: Yes • Catering: Onsite and offsite • Number of employees: 65 • Business type: LLC

Federal State City Utility Installation must be performed Requirements for Chez Ruth Agency Agency Agency Company subcontractor, architect or by licensed professional; New York, New York engineer restauranteur must

Department of Alcohol Dealer Food Service Department Building Permit Sidewalk Café Treasury Registration Establishment of Health & Permit Permit Mental Hygiene Sign Permit Internal Revenue Employment ID Department of Resuscitation Consumer A airs Service Number Department Grease Department Equipment Fireproofing for Restaurants of Sanitation Interceptor of Buildings

Sprinkler “No Catering Establishment Safety Data Recycling Department of Objection” Letter State Liquor On Premise Sheets License Authority Alcohol License & Waste Environmental Removal Protection Emergency Food Protection Lighting & Foot Department of DBA Certificate Certificate Candle Letter State Fire Alarm Test Backflow Prevention Device

Signage Cabaret License New Business Certificate of Registration Occupancy Ansul Tags

Department of Certificate of Fire Department of Place of Assembly Taxation & Finance Authority Open Flame Department Transportation Permit Equipment Use Permits Range Hood & Canopy Permit Duct Inspection Gas Authorization Con Edison Portable Fire Extinguisher Tags OpenTable - How to Open a Restaurant 46 TEST CASE: Chez Ruth cont’d

Posted Signs Required for Chez Ruth • Food Service Establishment Permit – NYC Department of The following list shows New York City’s posting Health requirements, including where in your restaurant each item • Choking First Aid – NYC Department of Health needs to be displayed and where a new restaurateur could In language of workers and customers – NYC Department of Health obtain these items. • CPR Kit and Information Includes 911, your kit’s location, and where to learn CPR • Sales Tax Certificate of Authority – NY State Department Some of the documents in this list also appear on the of Taxation permits and licenses chart and some do not. The ones that • Place of Assembly Certificate of Operation and Permit – appear twice are permits, licenses, or proofs of inspection. NYC Departments of Building and Fire The ones that only appear on the posting requirements list • Maximum Occupancy for Place of Assembly – NYC are informational, instructional, or cautionary signs, most Department of Buildings of which can be purchased online or made. • Liquor License – NY State Liquor Authority • Warning for Pregnant Women – NYC Department of Health Source: www.nyc.gov • No Liquor Sold to Minors or Intoxicated Adults – NY State OUTSIDE Liquor Authority • Letter Grade – NYC Department of Health Must be in view of your potential customers outside your THROUGHOUT PROPERTY establishment • No Smoking – NYC Department of Health • Private Carter Decal – NYC Department of Sanitation In every room and stairwell Must be inside window or on door facing out • Must Wash Hands – NYC Department of Health • Sidewalk Café License – NYC Department of Consumer Above all hand sinks Affairs In languages of workers and customers Inside window facing out • Exit and Direction to Exit Installed by contractor CUSTOMER AREA • Fire Extinguisher Inspection Tags • Certificate of Occupancy – NYC Department of Buildings Get from contractor • Otherwise must have Temporary Certificate of Occupancy On each unit showing date of last annual inspection

OpenTable - How to Open a Restaurant 47 TEST CASE: Chez Ruth cont’d

KITCHEN • Workers’ Compensation – NY State Department of Labor • Food Allergies – NYC Department of Health Get from insurer In view and in languages of all workers • Occupational Safety – US Department of Labor • Fire Alarm Test Record – NYC Department of Fire • Right to Know Workplace Hazards – NY State Department • Equipment Use Permits – NYC Department of Buildings, of Labor Fire • Equal Opportunity – US Department of Labor On each system and updated with inspection records • Pregnancy Rights – NYC Human Rights Commission Get from Departments • Anti-Discrimination – NY State Department of Labor • Schematic of Hood and Ducts – NYC Department of Fire • Employment of Ex-Criminals – NY State Get from contractor • Veterans Benefits – US Department of Labor • Record of Cleaning – NYC Department of Fire • Disability Benefits – US Department of Labor On each system and update every three months • Polygraph Protection Act Notice – US Department of Labor Get from contractor • Employee Voting Leave – NY State Board of Elections • Record of Inspecting Hood and Duct – NYC Department • Permitted Working Hours for Minors – NY State Department of Fire of Labor On each system and updated every six months Create for each employed minor Get from contractor • Family Medical Leave Act – US Department of Labor

WORKER AREA WASTE AREAS • Minimum Wage – NYC State Department of Labor • Recycling Instructions – US Department of Sanitation • Fair Labor Standards Act – US Department of Labor • Private Carter Information and Schedule – NYC Business • Benefits and Hours – NY State Department of Labor Integrity Commission • Wage Deductions – NY State Department of Labor Get from waste contractor • Tips and Taxation – NY State Department of Labor • Unemployment Insurance – NY State Department of Labor Get from insurer

OpenTable - How to Open a Restaurant 48 Key Takeaways

1. Do your research. Contact the people in your city and 4. Once you’ve invested the time and money to get your state and ask what you need based on your specific initial licenses and permits, make a plan for renewal project. Get on top of scheduling critical inspections with immediately so that you never fall out of compliance. long lead times right away. 5. Use service contracts for routine maintenance of major 2. Take advantage of your team’s experience, but don’t equipment and systems to reduce costs by avoiding disengage from the process. Surround yourself with emergency service calls. people that have done this before and take an active role yourself.

3. Get (very) comfortable with Department of Health regulations in your municipality. The DOH dictates many aspects of construction, kitchen design, and even how your service stations should be set up. Educate yourself on the requirements of your specific area and ensure that your GC and designer are on top of it, too.

OpenTable - How to Open a Restaurant 49 How to Create a Brand

A brand is the communication of a restaurant’s personality for his restaurants, which include The Bristol, Balena, through various elements, from logos and interior design to Formento’s, Nonna’s, Swift & Sons, and Cold Storage. The B. menus, a website, and staff uniforms. Every restaurant has a Hospitality team asks, “What are five words or phrases that brand, but those that thrive make an essential commitment define what this restaurant means to us?” From there, they to controlling and fostering theirs. Here, we’ll explore seven begin to find common ground and build a framework to strategies for taking ownership of the development and enable on-brand decision making. execution of a new restaurant’s brand. John says, “Doing this exercise early on really helps bring 1. Create a Language clarity to the brand and keep it focused when we make When you hear yourself describing your restaurant to everything from big conceptual decisions to the smallest other people, what words or phrases keep coming up? The details.” process of building a brand is all about distilling the various elements down to the core of who you are and what you’re If you’re having trouble articulating the words or phrases going to deliver. that could serve as the foundation for your brand, this Brand Deck is a helpful tool to kick-start the process. John Ross, owner of B. Hospitality in Chicago, goes through this editing process as a first step to brand development

OpenTable - How to Open a Restaurant 50 How to Create a Brand cont’d

2. Look for Inspiration Everywhere to determine what you are and what you aren’t. John says, Find inspiration when traveling to other cities and visiting “We do this exercise with all of our restaurants because it new restaurants and shops, and take note of design means that from the beginning, we are all really clear on how elements you love. This process is not about trying to we want the restaurant to feel and be.” mimic someone else; it’s about bringing together a thousand little details collected from many different places 4. Get the Right People Involved to express a brand that is uniquely yours. Step back and be honest about which parts of brand development you and your team are great at and which Charles Billies went through a similar process in creating parts may require some expert assistance. There are the Souvla brand: “I’ve spent so many years in other companies entirely dedicated to brand development that people’s restaurants being a part of a brand and figuring will be able to walk you through the process and produce out what I liked and what I didn’t like. All throughout my various elements like your logo, website, menu, and even career and my travels, I’ve kept samples and detailed notes uniforms. A third party can also help create an end product so I had a lot of inspiration to choose from when it came that feels like a clear, consistent, communicable, and time to build the foundation for Souvla.” beautiful personality that is truly well constructed.

3. Make It Visual Full-Service: Holistic design companies like Shea Building mood boards for different brand components is a Design and AvroKO offer soup-to-nuts services that do great way to make your vision accessible to others, further everything from concept refinement and brand refine your thoughts, and check for consistency. John and development to architecture, interior design, and his team create mood boards for almost every component beyond. Since companies like these are touching of the restaurant -- food, interiors, uniforms, tabletop multiple parts of your operation, consistency and design, fonts, colors, and logo elements, to name a few. clarity in communication are easy to achieve. When you invest time into identifying how you want your brand to look and feel early on, it will save you time and Boutique: Smaller, boutique design houses can be energy down the line, as you’ve already done the legwork brought in for specific projects, like Agentsie, a firm

OpenTable - How to Open a Restaurant 51 How to Create a Brand cont’d

focused primarily on brand development and graphic portfolio and it helps you save money.” Plus, someone in design for hospitality clients. A more limited scope of your family will have an immediate understanding of who work can provide cost savings, but you’re then you are and what you’re hoping to build. responsible for incorporating your brand into other elements of the restaurant. 5. Invest in Key Touchpoints Every brand is made of thousands of tiny details, and some First, identify exactly what areas you need help with. Next, pieces of your brand are going to speak louder than others. look for companies whose work you really connect with. Those are the ones you want to invest in. Is there a restaurant with branding you love that also feels similar to what you want for your own? Get in touch with the In John’s experience, your logo, website, photography, restaurant and ask them whom they hired. Once you have a and menu design are four items worth spending money on. short list, interview each team in person (whenever possible). High-quality, on-brand photography will be important for your website and will also be a resource that you go back to time and time again leading up to your opening and long afterwards. A picture says a thousand words, so make sure “So much of this business is based on yours are consistent with your brand message. relationships. If you hire a designer that isn’t like- minded, how are they going to tap into you and really express your ideas the way that you’re TIP: To maximize the value of your photography contract, envisioning them?” split it up into three or four shorter sessions. Your first session may be just dedicated to interior design details because John Ross the kitchen may not be functioning yet, then the next shoot TIP: Depending on the size of your team, it’s always would be food and cocktails, and your last session should worthwhile to look internally first. John says, “Look for be some “live action” shots when the restaurant is actually people who are in your house and are very talented, who open. That way you’ll have some high-quality photos on hand might be able to do things with design or photography, or early, but you can also capture the range of images that you’ll anything along those lines. It helps them build their own ultimately need to have in your inventory.

OpenTable - How to Open a Restaurant 52 How to Create a Brand cont’d

6. Incorporate Your Brand into Everything create the right environment. If your restaurant concept When it comes to your brand, everything matters. touts the sustainable farming behind the food, hire people Everything that another person hears, sees, tastes, touches, who share those values. This will make for more genuine and smells will help form their perception of your business guest interactions, more fulfilled employees, and a and what you offer, so it’s your job to tie every decision you stronger brand. make back to your brand. Some major considerations: We’ll talk more about hiring in Chapter 8, but as a best • Social media. Social media content should be carefully practice, hiring a team of folks whose values align with considered and share the same voice as your website your brand identity makes it much easier to deliver your and other branded materials. Your Instagram, Twitter, brand message consistently. and Facebook accounts are important touch points Your people are your most impactful brand -- they should be managed by a team member with an • Uniforms. ambassadors. For fine-dining concepts, most attempts intimate understanding of your brand. at purchasing inexpensive uniforms will detract from the

If you’re a chef-driven, ingredient-focused restaurant, message you are trying to send your guest; tasting menus skip the emojis. Posts should be focused on spotlighting and brigade-style service don’t go with poorly tailored dishes, showcasing ingredients or techniques, and suits. If your service style encourages your staff to express their personalities at the table, consider setting up some should be visually stimulating. guidelines and letting them wear their own clothes. Each of B. Hospitality’s restaurants uses the same • Interior design. Everything a guest sees inside your Instagram filter on every photo they post so that restaurant is an indication of your brand. Your flatware, each brand is consistent, but distinct from the other plates, glassware, linens, and the quality of your furniture restaurants. They also make sure there’s a clear and fixtures should be consistent with the price point of connection between photos and that all social media your menu and the rest of your brand. Guests join you subject matter relates back to the overall brand message. not just to eat and drink, but also for the experience. The

ambience you create sets the tone for their enjoyment • Hiring. When building your team, find the right people to and provides a backdrop for the dishes you serve. OpenTable - How to Open a Restaurant 53 How to Create a Brand cont’d

• Music. By selecting a soundtrack that jives with your brand, Key Takeaways you’ll cultivate an environment that makes guests feel like they’re doing more than just dining. If you’re a fine-dining 1. Know what you don’t know. Developing a cohesive, concept, volume should be modest and your selection engaging brand is difficult and important. If you don’t feel tastefully appropriate. For more vibrant, playful concepts, 110% confident doing the work yourself, hire an expert to lose the classical music and turn up the volume a bit. guide you through the process.

• Press interviews. As the media begins to approach you and 2. When hiring outside help, do your research and make sure members of your team for information on your forthcoming you see eye to eye. Get references from people whose brands restaurant, stay consistent in your communication. Make you love, look for creative expression that attracts you, and sure that every person on your team is using similar make sure you personally connect with the person you hire. language that reinforces your brand. Early tidbits from the Every interaction your guests and press may be the first impression you send to the public, so 3. Consistency is key. employees have with your restaurant will impact their make sure that impression is not conflicting or scattered. perception of your brand. From your uniforms to your 7. Let It Evolve plates to your logo to the people you hire, make sure every The process of building your brand will never end. As soon element reinforces the brand you’ve defined. as you open your doors, your restaurant will occupy a part 4. Prioritize your social media strategy. Social media is of people’s lives in ways you weren’t expecting, and it’s one of the most powerful marketing tools at our disposal. important to allow your brand to change organically as your Work with your team to implement a strategy that restaurant evolves. That doesn’t mean you should stop reinforces the aesthetic and spirit of your brand, and maintaining and reinforcing it, but do stay open to changing follow through with it. course from time to time.

The most successful restaurants offer up a brand identity 5. Invest more money in the brand touchpoints that have but also take cues from their guests and the energy they the most impact. Your website, logo, photography, and bring. It’s important that both sides are represented and that menu design are items that guests will use to form an the experience you create is one that guests feel like active initial impression of your restaurant, and they’re also participants in developing. things that will stay with you for the longest time. Make sure you get them right the first time. OpenTable - How to Open a Restaurant 54 How to Design Your Restaurant

The decisions you make about the construction and design of your restaurant will be some of the most expensive and impactful. Knowing what you don’t know, doing your “One of the most common things I see is first- research, and understanding where your money is going to time restaurant owners starting a construction project without fully understanding their total make the most impact before opening your checkbook are development cost.” key steps to get the most out of your investment. Chris Zeman

Construction Once your construction schedule and design plans are finalized, it will be difficult and damaging to make any Mind Your Budget significant adjustments. Tanya, partner at Shea Design Inc. As you take this next step into design and construction, you’ll says, “Restaurateurs that miscalculate their budget end up be making a big move out of the theoretical “what if” portion trying to value engineer their project and cutting things out of the restaurant opening process and into more tangible arbitrarily. Then, suddenly, your result at the end of the day action items like pouring concrete, choosing wall treatments, is nowhere near where you started.” and writing checks. Take time now to run back through your major capital requirements and make sure you’re still on track.

OpenTable - How to Open a Restaurant 55 Construction cont’d

Minimize Construction Costs When a General Contractor builds based on plans they had Unless you’re moving into a space that you plan to change no part in creating, you miss out on the decision-making very little, construction will always be your greatest cost. power that comes from two experienced professionals with If you’re turning an office into a restaurant or working out different areas of expertise. Plus, you are much more likely to of a blank space, expect construction to be anywhere from run into costly change orders. 50% to 75% of your total startup costs -- and it’s very easy for that number to creep up as the project moves forward.

The most common way for construction costs to grow is “If you have your contractor on board early, there’s through change orders. Change orders tend to be much an inherent inability for the contractor to show up more frequent when the contractor is brought onto the halfway through the project with a change order project just before building starts, and when the restaurateur that he didn’t know was on the plans. You’ve isn’t educated about the plans that they’ve approved. prevented that event from ever happening.” Chris Zeman Design-Build Chris Zeman of Zeman Construction says that his most Educate Yourself successful clients have used the design-build approach Get involved, stay involved, and ask questions every single to reduce their costs and ensure the entire team makes day you’re on site (and be on site often). You’ll learn a lot, conscious, value-driven decisions from the beginning. which will help ensure the success of your first project and better prepare you for future projects, and you’re also much He says, “When the contractor is brought on very early and more likely to catch things that don’t look right. is used as an equal partner to the architect and designer, they have the opportunity to participate in the development The Bottom Line: The contractor is going to build what the of the design documents. This gives the client and the plans dictate, so if a wall goes up that you aren’t happy with, designer the benefit of using the contractor’s knowledge of which materials, what processes, and what design elements the solution is going to be a change order that you’ll have to will be more or less expensive than another, have a longer pay for. Be an active participant in construction meetings and lead time, or are more complicated processes to schedule.” take the time to study your restaurant’s construction plans.

OpenTable - How to Open a Restaurant 56 Kitchen Design

Your kitchen will be the most expensive part of your Chris says, “You really have to be cognizant of where the raw restaurant’s total buildout cost. It’s also where the product comes in the door, where it gets prepped and stored, most space and money tend to get wasted as a result of where it gets cooked, where it gets plated, and then how it inefficiencies in size, flow, and equipment placement. gets to the table. Keeping those lines as short and straight as possible with minimal cross-over is the best way to maximize Size efficiency.” The bigger your kitchen is, the more it’s going to cost you. All of our experts implored restaurateurs to remember that you Equipment don’t make money in your kitchen; if the kitchen takes up a Kitchen equipment will be another of your highest expenses disproportionate amount of space, you won’t have enough and again is an area where many restaurateurs commonly seats to support the business. Every concept is different, but overspend. Richard reminds the chefs of USHG that you can Tanya says that in general, a kitchen should never be more always add, but you can’t take away. than ⅓ of the total space (including storage space). He says, “We try not to build the dream kitchen right away and give ourselves an opportunity to move pieces of kitchen If it’s congruent with your concept, designing an open equipment in or out, and that saves us a lot of money. We ask kitchen with some counter seating can be a good way our chefs to design their kitchens with only the things that of maximizing your kitchen square footage. Tanya says, they truly need.” “That’s a way to blur the line. If your kitchen is going to creep out into the dining room, you want to make sure you Be wary of your relationship with your kitchen equipment at least get some seats out of it.” vendor. Even if they offer kitchen layout design as a complimentary service, you may get a plan back with a kitchen Flow that takes up half of your restaurant space. Remember, the Inefficient flow is a common symptom of a poorly thought- company is selling kitchen equipment to chefs who want it all. out kitchen. The best way to avoid this is to think about your restaurant, particularly the path that food will take, in TIP: If you’re working off of a tight opening budget, consider a holistic way. renting some pieces of equipment. Aaron London, owner of

OpenTable - How to Open a Restaurant 57 Kitchen Design cont’d

AL’s Place in San Francisco, got great value out of touchpoint, allows your team to do their best work, and helps purchasing pieces of equipment that were the most create consistency in your guests’ experience. durable (like a range) and renting others that are notorious for requiring constant service calls (like an ice machine), Communicate with Your Designer since maintenance on rented equipment is always free. Some restaurateurs will give their designer the broad strokes Given the size of his kitchen, the blast chiller that he rented of their concept and let them take it from there. Our experts before opening has proved to be the single most important preferred a much more hands-on approach in order to piece of equipment for his team, but with a $9k price tag, he communicate not only what they want their guests to see never would have been able to afford it outright. when they walk in and sit down, but how they want the space to make their guests feel.

Interior Design The USHG team provides hundreds of bytes of information to designers so that they have a comprehensive understanding The way your restaurant looks, sounds, and feels when a of exactly how a guest should feel in the space, from the guest first walks in will set guests’ expectations for the rest moment they see the restaurant to the time that they leave it. of their experience and send an impactful message about your brand. If your restaurant relies heavily on walk-in Focus on Your Brand business, interior design (not a website or social media) is Work with your designer to define the core components that solely responsible for telling your brand’s story before a make your restaurant unique. For example, if you’ve curated guest sits down. a special wine list that is a core element of your concept, consider creating a beautiful wine cellar that’s visible to Carefully consider the placement of key front-of-house guests or a captain’s table stocked with wine in the center elements to ensure efficient flow, as well as the necessary or your dining room. If they are not a notable part of your level of comfort for guests. Here are a few tips to make restaurant, these same design elements may confuse guests. sure your interior design represents your brand at every

OpenTable - How to Open a Restaurant 58 Interior Design cont’d

Lighting and Acoustics Sometimes the little things have the biggest impact -- and “You need to understand what your brand is this is especially true when it comes to lighting and acoustics. and what’s going to make you different. Being Lighting and sound levels must be consistent with your an approachable, everyday place that everyone wants to go to isn’t enough. What makes you concept, which can be an involved process. unique? Once you’ve got that nailed down, you need to find a way to express it through design.” Compare McDonald’s to The French Laundry, and you’ll see the extremes of both noise and lighting (and many other Tanya Shea things as well). McDonald’s has only hard surfaces and is as bright at midnight as it is at noon. The French Laundry is Next, figure out what physical spaces are going to have the filled with soft surfaces like padded booths and upholstered most impact for people. Tanya advises against spending too chairs, as well as lighting that changes throughout the day in much on ceilings, floors, and decor, instead creating zones order to maintain a comfortable and intimate ambiance. Your and focal points that make the guest feel comfortable. Key concept will likely be somewhere in the middle of these two, design elements don’t need to be expensive, they just need so make adjustments accordingly. to be impactful and consistent with the experience you’re creating for guests. Having separate dimmers for different areas of the restaurant is a great way to control how your restaurant feels. With Editing is another important step. In addition to saving sound, ask your designer about discreet acoustical panels, you money, taking away pieces that don’t actively introducing soft surfaces, and a good sound system with well- reinforce your brand will ensure guests aren’t distracted placed speakers. Eastside, located in Minneapolis, received and their experience isn’t diluted. Ask yourself, “Is this a number of guest complaints about noise levels as soon as going to drive more business for me? Does this reinforce a they opened and immediately had their designer come back key part of my brand?” to install acoustical panels in key locations all over the dining room. If you don’t get it right the first time, make sure you react and make thoughtful adjustments quickly (one of many reasons that you need three to six months of working capital).

OpenTable - How to Open a Restaurant 59 Interior Design cont’d

Space and Flow Do the same exercise with guests. What route will they need Tanya says, “A restaurant’s layout requires someone that is to follow in order to get from the host stand to a table and both a talent and a technician.” from a table to the restroom? Minimize cross over, especially between staff and guests. Work with your designers to create The technician part is directly related to the many city, a space that’s comfortable for guests and allows your team state, and federal codes that will dictate important details to excel without unnecessary complications. Even designers like how much space you need between tables, how wide with lots of experience don’t spend their days and nights certain corridors must be, and what you’ll need to satisfy working in kitchens or on the floor, so you’ll need to be an ADA regulations. Your designer also needs to understand active part of this process. how a restaurant flows from the front of the house to back of the house, and how to allocate space and transitions You don’t need to have a functioning restaurant to know appropriately. which will be your most desirable tables and which ones will be difficult to seat. Tables that are close to service stations, The talent part of this equation will help your guests feel like near the front door, in high-traffic areas, or far away from any they have front-row seats to a beautifully choreographed kind of anchor (like a banquette or pillar) tend to be the least show, allowing servers, food runners, and bartenders to desirable. Once your designer has presented you with some move around the room gracefully and easily. Both are layout options, figure out how many “bad” tables you have equally important. The same people will be repeating the and challenge your design team to get that number as low same actions every night, and over time, inefficiencies can as possible. cause long wait times and negatively impact team morale. In addition to code compliance, the spacing around your Just as you’ll do with kitchen design, draw lines to represent tables will also be related to the market you’re in. In New how a theoretical staff member would navigate the dining York City, guests are used to sitting shoulder to shoulder with room in order to do his or her job. This will help you place your the table next to them, but this isn’t true of most markets. In coat check, host stand, service stations, restrooms, coffee a new market, do some research and ask your designer what station, and employee entrance in the most efficient places. guests feel most comfortable with.

OpenTable - How to Open a Restaurant 60

Interior Design cont’d

Key Takeaways

“You want to extend the brand into the space and 1. Make sure your kitchen is the right size for your concept. create the right guest choreography. It’s never It’s the most expensive space to build out, and every about individual elements or materials, it’s about square foot that’s used in the back of house can’t be brand impression as a whole, and using unique used for a revenue-generating seat. You can always add focal points and seating zones to ensure every seat equipment down the line. is part of the experience.”

Tanya Shea 2. Make decisions that protect your budget. Do your homework and choose a budget-conscious designer, Flexibility pre-qualify your General Contractor, use the design-build Building flexibility into your design will help you maximize method, and stay engaged in the construction process. revenue. Smart examples of flexibility in dining spaces are: 3. Map out flow in the front and back of house to ensure your restaurant’s design is efficient. If a cook will need to • Building tables that have the same width whenever take eight steps to get from their station’s mise en place to possible so that you have the ability to combine them. the cooking equipment they need, consider rearranging. • Building hinged flaps underneath some square tables Every step counts. that can be flipped up to create a large round.

• Putting a removable air wall into your private dining 4. Invest in acoustics and lighting. The sound and room that allows the space to be bisected for two brightness levels of your restaurant need to be smaller parties or used for one big event. consistent with your concept and are some of the most • Creating only one or two chair types so that you can use important components of your restaurant’s atmosphere. the same chair across spaces. 5. Focus on simple but impactful design that reinforces your brand at every corner. Work with your designer to create strategic focal points to draw your guests’ attention towards features that tie back to your concept.

OpenTable - How to Open a Restaurant 61 In The Weeds: Amanda Cohen

Amanda Cohen of Dirt Candy in New York City on working with contractors.

“I had a location. I had (almost definitely) a liquor license. I had an architect. Now I needed a contractor. Choosing a contractor is a bit like choosing your mugger -- you want someone who won’t hit you in the face and will maybe let you keep $5 for cab fare. Unfortunately, we didn’t find that kind of mugger.

We interviewed a couple of contractors and whittled it down to two: Moto and Anthony. Moto was a nice guy who had done a lot of work building restaurants in the East Village, but he played his cards close to his chest. I wanted a communicator, someone who would keep me in the loop, and Anthony and his foreman, Colin, seemed genuine, nice, kind, and efficient. They would give us schedules, updates, weekly site meetings, and paperwork tracking the project. It seemed wonderful -- contractors who would talk to us and keep us informed of their own free will. Sure, they hadn’t built a restaurant before, but they seemed game for the challenge and this space is only 350 square feet. What could go wrong?

Everything.

One day Anthony didn’t show up at a site meeting. Colin took me aside and told me that Anthony was in the hospital because he’d had a nervous breakdown and I should hire him to finish the job instead. A few days later, Anthony showed up as if nothing had happened. Colin never mentioned this again. I felt like they were gaslighting me. Everything Anthony said was a lie, or crazy and, even worse, my restaurant wasn’t getting built.

OpenTable - How to Open a Restaurant 62 In The Weeds: Amanda Cohen cont’d

“We’re leveling the walls,” they’d tell me, day after day.

Then, in the middle of the job, Anthony asked for $70,000 in a change order. Change orders are a natural part of any building project, and you get them if you discover you need to re-route a pipe at the last minute, or you decide you want black countertops instead of white. Usually they come out to a few thousand dollars here and there as you build. But a $70,000 change order takes your breath away. That was almost half of our construction budget. Some of it was for leveling, some of it was flat-out crazy. I refused to pay because, apart from the leveling, they couldn’t tell me where the previous $70,000 I’d paid them had gone.

We scheduled a meeting to work out what we would and wouldn’t pay in this change order and, not surprisingly, Anthony didn’t show. Shortly thereafter he disappeared. A few days later, his dad called and offered to ransom back construction materials they’d special ordered but had never brought to the site. I needed this stuff and wound up paying thousands in cash for this guy’s dad to bring me materials I’d already paid for, and to tell me I was a stupid girl. It was one of the grimmest hustles I’d ever been the victim of. And in the end, my walls still weren’t level.”

You can (and should!) read about all of Amanda Cohen’s restaurant opening adventures in her blog, How Not to Open a Restaurant.

OpenTable - How to Open a Restaurant 63 How to Order and Purchase

Once the work to build your restaurant has begun, start Front of House strategizing your opening purchases for the front and back • Plateware of house. These purchases are the whole slew of items that • Glassware are smaller than a walk-in refrigerator or bar stool but are • Flatware just as critical in terms of functionality: plates, glasses, • Serviceware (tea and coffee pots, marking trays, service uniforms, pots, and pans. The tips in this chapter outline trays, water pitchers, salt and pepper grinders, etc.) key considerations to help you make smart purchases • Bar smallwares before and after your restaurant opens. • Table top decor (vase, votive holder, etc.) • Linens • Uniforms • Menu covers and paper (food, wine, cocktail) What Do You Need? • Check presenters

The exact items you need to select and purchase at this point Back of House depend on your restaurant concept; what you have already • Pots, pans chosen with your designer, architect, and contractor; and • Cooking utensils (tongs, knives, spatulas, mixers, etc.) your budget. Some major ones to consider are: • Kitchen smallwares (cutting boards, etc.) • Paper and plastic supplies (deli containers, paper towels, toilet paper, to go boxes and bags) OpenTable - How to Open a Restaurant 64 What Do You Need? cont’d

• Plate, silverware, and glassracks • Decide what you want to invest in before you start • Cleaning supplies looking. Once you have catalogues, samples, and reps • Storage racks in front of you, it’s going to be hard to decide objectively • Uniforms whether a beautiful steak knife is a worth the price. Make a • Office supplies master list and go through it line by line to figure out where it makes sense to spend and where it makes sense to save. Key Considerations SPEND: Gavin, owner of Spoon and Stable in Minneapolis says, “I opted to spend more money to have the handles The four most important factors to weigh when making of my flatware buffed out so that it had a matte finish that purchasing decisions are cost, durability, brand hides wear and tear. New flatware gets scratched so fast -- consistency, and lead time. Even though your opening it looks terrible, and then you have to buy more. Plus, it’s orders will be your biggest, they certainly won’t be your last one of the few items in a restaurant that doesn’t break, so -- those $40 plates that break when you look at them the I felt good about investing in it.” wrong way and take two months to import will be a pain in your P&L for as long as your restaurant is in operation. SAVE: It’s tempting to buy expensive water glasses

because they’re almost always in front of guests, but they Cost also get handled more than any other item and therefore Money will likely be the greatest determinant in what you break more. Opt for a water glass that’s consistent with decide to purchase for your restaurant. That doesn’t mean your overall aesthetic, but doesn’t break the bank. every restaurant owner should spend as little as possible on every purchase, but it does mean you should consider • Get multiple quotes and negotiate pricing. In many where investing more will actually produce a tangible markets, there are multiple distributors that can sell you outcome for your team and guests. Even in fine-dining the exact same thing. Do your research and make sure restaurants, there are always opportunities to save money you’re comparing apples to apples; some reps will give without sacrificing anything of importance. Here are a few you one price (usually lower) for your opening order and money saving tips from our experts: then a different price for all subsequent purchases, while others will give the same price across the board. OpenTable - How to Open a Restaurant 65 Key Considerations cont’d

SAVE: Regardless of how many competitive bids you get, potters, but that took time. Another big one was the patio. always negotiate down before purchasing. If I’d taken on all of that expense up front -- tables, chairs, awning, heaters, extra china glass and silver -- I would • Think outside the box, but understand the trade-offs. have had no operating cashflow and I wouldn’t have been Searching for unique service pieces or used equipment able to recover from unexpected expenses.” at a flea market or consignment store can be a great way to save money and bring cool items into your restaurant. • Weigh all the factors when choosing quantities. Some However, keep in mind that most secondhand finds distributors will offer price breaks when you buy certain won’t be designed for commercial use, meaning they quantities, which can be great -- but it can also be a quick will be breakable and impossible to replace with the way of taking over all of your storage space and leading exact same item. The eclectic aesthetic also needs to be you into spending more money than you needed to. consistent with your brand as a whole, or the confusion it creates for guests will negate your cost savings. SAVE: Don’t be sold on what you don’t need; it’s easier to buy more of something than get rid of something that you • Don’t buy everything in time for day one. Keep your have in abundance. purchasing strategy focused on everything you really need, not on everything you really want. Aaron London, Lead Time owner of AL’s Place in San Francisco, explained that his mindset when opening AL’s Place was to start small in Lead time for items in your kitchen or your dining room order to preserve working capital for his first months of will impact your initial purchases and is often even more operation and then build, grow, and add slowly. detrimental once operations are in full swing. When Aaron opened AL’s Place, he was on a strict timeline to get the SAVE: Some things he held back on? “I couldn’t afford restaurant up and running as soon as he had to start paying nice plates so we bought the cheapest ones possible rent, so anything that could potentially affect his opening to start and now we have singular plates made by local date was automatically dismissed.

OpenTable - How to Open a Restaurant 66 Key Considerations cont’d

If you do have the luxury of time in your opening process, Brand Consistency consider challenges you may face if you realize you’re Every purchase you make needs to tie back to your brand, low on a certain bowl or glass and it takes six weeks to because everything that a guest or employee sees, touches, get it. This is common with pieces that have some sort of wears, or uses will give them a data point about what your custom element, like branded plates or uniforms. If you do restaurant stands for. Gavin spent more to have custom purchase items with long lead times, make sure that you leather wine lists covers because he’d already invested in have a solid inventory and ordering system in place, which curating an interesting wine list and creating a beautiful wine we’ll talk more about later in this chapter. room that was visible to guests. He didn’t want them to walk in and see a design element that indicated one thing and a Durability flimsy paper wine list that indicated something else entirely. For Gavin, how frequently he would have to replace things was a big factor in determining what to purchase. When Another expense that Gavin prioritized were employee he considered that he would be writing a check to replace uniforms. There was no way his hospitality philosophy plates and glasses almost every month, he decided to would shine through his team if they didn’t feel comfortable, spend less on those things up front. confident, and empowered on the floor. He says, “Maybe the water glass is going to sit there the entire meal, but that server is going to bring them their experience and how that server looks and feels is a reflection of me.” “I put out maybe 60 samples of plates on the floor and then I put post-its with the price on every single one. That made me think a lot more Post-Opening Ordering & Purchasing consciously about whether I wanted to spend that much money on those types of things or if I Opening day will come and go quickly, and it will be wanted to spend it on something else that I might all too easy to forget to check pars on uniforms, to-go get more value from. And that’s what it all comes boxes, and wine glasses. Get ahead of the game: build down to -- what’s the most effective place to spend organized order sheets, set up inventory days, and delegate the money you have?” ordering responsibilities before you open so that everyone Gavin Kaysen understands their part right out of the gate. OpenTable - How to Open a Restaurant 67 Post-Opening Ordering & Purchasing cont’d

Build Order Sheets that can suddenly go from being fully stocked to 86’d. Once By the time you’re placing pre-opening orders, you will your order sheets are built, calendar inventory dates and be have spent hours reviewing pricing, looking at quote clear about who on your team is responsible for performing sheets, circling product numbers in catalogues, and talking inventory and following up with necessary ordering. to reps. Once you’ve placed orders, either use the final invoices or ask your distributors to put together a list of everything you purchased, including the name of the item, Key Takeaways item number, size specifications, lead time, price, and the quantity you’re starting with. Include purveyor contact 1. Decide what you want to invest in before you start information and par levels so it’s easy for anyone to figure looking. Figure out where it makes sense to spend and out how to place an order. where you can save, taking your brand representation and key touch points into consideration. Then consolidate these lists (hiding columns you don’t need on a regular basis) into one that’s based on how you 2. Always get multiple quotes and negotiate pricing. Talk organize your restaurant. Charles, owner of Souvla in San to many distributors before making a purchase, and don’t Francisco, recommends basing your order sheets on your accept your first offer. storage plan so that when it comes time to place orders, you can move from left to right, top to bottom alongside 3. Create a foolproof system for ordering and purchasing your storage space. after opening. Set up regular dates for taking inventory and compile documents that make it easy to do so. Take Inventory Regularly Make sure everyone on your team knows their role in the Most restaurateurs are pretty comfortable with taking process, so you’re never surprised to find you’re low on a food and beverage inventory at the end of every month critical item (with zero time to order a new one). (or sometimes even more frequently). But many operators don’t even think about taking inventory of china, glass, silver, uniforms, menu paper, or the many other things

OpenTable - How to Open a Restaurant 68 How to Build Your Team

Before you can identify the best candidates for your Prioritize Soft Skills team, you first need to figure out what you’re looking for. What qualities must every member of your team possess to Organizational structure and the specific qualities that make create the guest experience you’ve imagined? a person a good “fit” will be different for every restaurant, but the best practices around the process are largely universal. Alex Seidel, owner of Fruition, Mercantile Dining & Identify the soft skills that reflect your concept and brand, Provision, and Fruition Farms in Denver, says, determine what skill sets will be needed to perform critical operational responsibilities, and define what your own role will entail. Then, develop a hiring strategy to find people that “When we hire our team, we’re not looking for fit your criteria. bodies. We’re looking for people that we can work with, that are like-minded, and that want to grow Your employees are your biggest asset, and in our industry and develop. When you surround yourself with they’re often the scarcest resource. Developing and people that have the same mission as you, there’s executing a hiring strategy will pay off in the long run by no limit to what you can do.” reducing turnover, ensuring great guest experiences, and Alex Seidel promoting brand consistency.

OpenTable - How to Open a Restaurant 69 How to Build Your Team cont’d

Every restaurant will have different priorities when it comes One tool that can be helpful is a comprehensive list of the to soft skills. Keep in mind that some of the qualities you major responsibilities you expect each person to own. look for while selecting your opening team may be different Then, factor in the amount of time each person will need than those you look for months or years down the road. to spend on the floor or in the kitchen during service. Your goal is to strike a balance here: make sure your team has the Sabato Sagaria, Chief Restaurant Officer ofUnion Square bandwidth to meet your performance expectations without Hospitality Group, takes a bit of a different approach with burning them out. new restaurants. He says, “We really try to understand the type of environment that somebody flourishes in. Specific tasks will vary greatly from restaurant to If someone is open minded, has shown their ability to restaurant, but I’ve provided a sample list of management be a chameleon, and can take whatever curve balls are responsibilities here to help spark your thought process: thrown at them, we know they’re going to thrive during an • Scheduling opening.” Candidates who need structure and consistency • Hiring to do their best work get referred to more established • New employee training restaurants within the group. • Disciplinary action and termination • POS maintenance Identify Roles & Responsibilities • Payroll Identify the roles and responsibilities you need your team • Ordering (food, beverage, dry goods, dining room supplies) to take on at a management level and an hourly level. If • Private dining sales you’re already familiar with the size, scope, and service • Private event execution style of the restaurant you’re opening, you likely have • Bar program a good idea of what your organizational chart will look • Inventory • Cash handling like. If not, talk to peers who have concepts and hours of operation similar to yours about their organizational Reporting structure can, and often does, evolve after structures, do some market research, and make opening. Below is a sample organizational chart for the modifications based on the specifics of your restaurant to management team of a mid-sized, full-service restaurant develop a working model.

OpenTable - How to Open a Restaurant 70 How to Build Your Team cont’d to give you an idea of positions to consider and how they a more casual, counter-service concept may require only a few interact with each other. people who all have similar job descriptions.

When thinking about team structure, map out a typical guest OR experience and take note of the individual touch points necessary to provide great service. For example, let’s say your typical guests are a group of four joining you for drinks and dinner. They will enter the restaurant to check in for their reservation, head to the bar for a cocktail, and then sit down for a multi-course dinner. T R H R In this scenario, it’s clear you’ll need a host and floor manager to ensure guests are greeted and directed to the right place, TR RT as well as a fully-staffed bar team. Additionally, multi-course H R dinner service means many touch points with each table, which require support staff for your servers (think runners, O OOR bussers, and sommeliers) and your culinary team (expediters, H R polishers, and dishwashers).

O R By contrast, a counter-service concept might find many of H R these positions wholly unnecessary. In a typical experience, these diners might simply enter and be directed by signage to a Establishing responsibilities -- as well as the size, service cashier to place their order. Once they’ve paid, they may receive style, and concept -- will help you understand what hourly a number to pick up their food from a window when it’s ready positions you need to hire. For a fine-dining restaurant you’ll and have no further interaction with the restaurant staff. likely have a more layered front-of-house structure, whereas

OpenTable - How to Open a Restaurant 71 How to Build Your Team cont’d

In this scenario, unlike the previous, there isn’t need Define Your Position for much service or support staff, only cashiers, cooks, Be clear and honest about your strengths, availability, and dishwashers, and a floor manager to facilitate. the role you plan to fill at your restaurant. This is one of the most important steps in figuring out who to surround There is no “one size fits all” guide to how to staff your yourself with. concept, as each one varies. As a best practice, simulate service and ensure that each touch point with a guest is Will Beckett, Founder & Owner of Underdog Restaurants covered by a particular staff member equipped to deliver a (parent company of The Hawksmoor) in the U.K., says, great experience. “Irrespective of who you are and how much experience you have, there is stuff that you’re really good at and there’s stuff Here are some roles to consider: that you are not. And you need to be able to plug those gaps straight away.” Front of House Back of House If you’re a chef but you don’t know much about the front of Captain Cook the house or running a business, your first priority will be Server Prep cook to find a General Manager who is dedicated to your vision, Server assistant / backwaiter Butcher is experienced in running a front-of-house team, and has Food runner Dishwasher strong business sensibilities. Don’t assume you’ll be able to perform major functions that you have no experience with. Busser Steward Conversely, if your strengths are business and operations, Barista Receiver but your knife skills aren’t particularly notable, you’ll want to Polisher find a chef very early in the process. Expeditor Host Cashier

OpenTable - How to Open a Restaurant 72 Recruit the Right People

Once you’re crystal clear on what you’re looking for, start Hourly employees can be brought on later in the game, but finding candidates. Earlier is better than later. Thoughtfully leave your new employees with time to give respectful notice written job ads and the channels you choose to circulate to their current employer and be on board in time for pre- them through will also serve as filters. opening staff training. Bringing on a couple of servers or cooks to fill open positions is very different from onboarding Timing a new team from scratch. Starting early and being honest Start your search for managers before you look for hourly with candidates about the fact that your timeline may shift a employees. Sabato (of USHG based in New York City) bit is better than starting late and having to hire bodies rather and Will agree that key positions like chefs and General than individuals who are an ideal fit for your restaurant. Managers should be brought on two to four months before opening day, meaning you’ll need to start posting job Job Ads ads, planting the seed with your peers, and working your The ads that you post should include keywords describing network four to six months in advance. your company culture as well as your restaurant’s concept, style of service, projected opening date, and any What’s the point of paying your two most expensive relevant specifics regarding job description and schedule people before your doors even open? It all comes back to requirements. Incorporate the legwork you’ve done to define culture. Will says, “You need that opportunity to spend your brand and the type of person you’re looking for to build time together getting on the same page with the kind ads that look and sound unique to your project. of restaurant you’re going to open and making sure the relationship is good and that it’s trustworthy.” Ads should be professionally presented and shared through Hiring individuals at the top of your leadership structure multiple channels, such as online job boards and social is much more than just checking a box. Chefs and General media. Getting the word out among your network is also one Managers need to be aligned with your brand, share your of the most important ways of recruiting great employees. values, and believe in your vision. It’s particularly important to find a chef early on so they have enough time to develop Let your friends in the industry know you’re on the hunt a menu you’re both happy with, test that menu, and work for an awesome opening team and extend your outreach with your design team on laying out the kitchen. beyond your immediate market. People in the restaurant OpenTable - How to Open a Restaurant 73 Recruit the Right People cont’d industry are always on the move, and you want your entire Asking candidates questions about the role that food plays rolodex to be aware that you’re looking to meet great in their lives or having them describe favorite dishes and candidates. Once you start hiring your first team members, pairings is a great way to gauge interest. The content of their encourage them to invite their peers to apply -- these answer is much less important indicator than the emotion introductions are great ways to find good people efficiently. with which they deliver it.

If teamwork is a value that ranks high on your list, think Interviewing of everyday situations that demonstrate teamwork and then come up with questions that provide candidates the Effective interviewing is the key to finding top performers opportunity to talk about those things. I always like to ask for your restaurant -- don’t rely on first impressions or gut interviewees what makes a shift feel fun and rewarding reactions. Here are a few tips to keep in mind. versus a shift that feels disappointing or frustrating. Usually, candidates who have a natural tendency towards teamwork Develop a Core Set of Interview Questions will demonstrate that by telling you about busy nights in Assemble a thoughtful list of questions designed to which everyone has to support each other to get through. determine whether a candidate shares your values and Always ask candidates to give you specific examples so that uncover details of their professional experiences. Often, the you’re more likely to get a real answer. best way to do this is to work backwards. Figure out the five most important qualities you want a candidate to possess, Will recommends asking candidates situational questions then design questions that will allow them to demonstrate based on past experiences as opposed to asking how they each one. would deal with a hypothetical problem. He says, “People are way less inclined to try and work out what you want The Hawksmoor looks for front-of-house employees who them to say when you’re asking about the past and they’re are passionate about food and drink. This may seem like way more likely to give you an answer that’s representative an obvious quality to require, but for many restaurants it of how you can expect them to behave.” actually isn’t a top priority for front-of-house employees.

OpenTable - How to Open a Restaurant 74 Interviewing cont’d

Coming up with unique questions will help you determine they’ll be working next to, their superiors, so that fit and also increase the likelihood that you’re getting we can ask them -- is this an environment that genuine answers from the people you’re interviewing. you want to be in? Hiring someone for any position is a commitment and it’s an An efficient interviewing process also demonstrates your understanding on both sides of what our collective level of professionalism to applicants and gives you more goals are.” objective criteria for evaluating them. If someone is a total Alex Seidel rockstar when it comes to knowledge but comes across as selfish and not a team player, it’s best that you pass Get More Than One Opinion and look for someone who more closely aligns with your Passing over a great candidate can be as big of a loss as mission and values. hiring a bad one, so take more than one person’s opinion into account. Managers should sync up between interviews Make Interviewing a Two-Way Street to highlight any areas of concern for others to investigate Never forget that candidates are also evaluating you. further. That way you know hiring managers all have buy- Show up on time, read their resume beforehand, and dress in. Everyone who conducts interviews should take notes appropriately -- it will go a long way in creating a strong -- especially for an opening team, because you’ll be meeting impression of what they can expect if they come on board. with applicants constantly. It’s easy to forget how you felt Always put your best foot forward so that when you come about someone or confuse them with a different person across great candidates, you’re able to hire them. when you’re in the throes of pre-opening onboarding.

Alex Seidel explains that giving every candidate the opportunity to interview his team first is one of the most Assembling Your Team important steps in their hiring process. When it comes to assembling a team, diversity is your friend; this applies to knowledge, skill set, past experience, and “We want people to analyze our culture, our personality. Pay attention to balance as you bring people philosophy, the environment, the people that on board, as a diverse and dynamic staff helps everyone to

OpenTable - How to Open a Restaurant 75 Assembling Your Team cont’d learn from one another. Be wary of hiring too many people what you’re looking for and be clear with that person about from the same restaurant or company. your goals. Give them an opportunity to figure out if you have what they need to grow as an individual. Aim for Balance Having a team of great people won’t do you any good if Mark Canlis, co-owner of Canlis in Seattle, holds this they’re all great in the exact same way. principle above all else. He says, “If you’re not willing to enter into a relationship, then you’re just faking it. Each employee is a relationship, and relationships are hard. They can be tricky and they can be messy and they can be time “You want to build a band, not a bunch of people consuming and they can be rewarding and they can be that play the clarinet. Everybody has to be able to play in the sandbox together and that’s really fulfilling and they can be rejuvenating and restorative, but key because there’s a lot of intensity in an they always take a lot of work.” opening. Employees aren’t just adapting to their surroundings, they’re adapting to each other, and The process of building your team is all about ensuring that you need to have people that can link arms going you’re selecting people whom you’re excited to do that kind into it with a real sense of camaraderie.” of work with. Sabato Sagaria

Check References Key Takeaways Ask every candidate you’re seriously considering to provide you with three professional references. Let the applicant 1. Invest time in identifying what exactly you’re looking know up front that you will need to hear back from at for in prospective employees before you begin the hiring least two of them in order to move forward with the hiring process. Know what values, character traits, and skills process. No matter how great someone seems or how your team will need to have in order to make your vision strongly you connected with them, do not skip this step. a reality. Hiring someone is a commitment to a relationship. Know

OpenTable - How to Open a Restaurant 76 Key1. Takeaways cont’d

2. Prioritize soft skills when hiring. Teaching someone 4. Create a hiring strategy. Make sure your recruiting, how to clear a table is easy, but teaching them to have a interviewing, and onboarding strategy is intentional, different attitude is almost always impossible. universally understood, and thorough.

3. Define your role. Be honest about your areas of 5. Understand that employment is a relationship. It has to expertise and create realistic expectations around what be a good fit for everyone involved, and both sides need you’ll be contributing to the restaurant on a day-to-day to be working towards the same goal to be successful. basis, then hire your leadership team based on the gaps you can’t reasonably fill.

OpenTable - How to Open a Restaurant 77 How to Train Your Team

If the cost of labor, product, and lost revenue associated with Start Early pre-opening training makes you uncomfortable, think about how much money you’ll spend as a result of high turnover, Begin planning staff training when you’re building the botched guest experiences, and bad press -- all of which are pro-forma for your business plan. The costs of labor, food, the direct result of an underprepared staff. beverage, printed materials, and other expenses associated with classroom training and soft opening events should be Will Beckett, Founder & Owner of Underdog Restaurants a part of your pre-opening budget so you don’t find yourself (parent company of The Hawksmoor) in the U.K., three weeks away from opening with dwindling funds. learned this lesson the hard way after running so low on Designing an effective pre-opening training program is capital leading up to his first restaurant opening that he had extremely time consuming, especially if you’ve never done no choice but to open his doors without a trained staff. Now it before, so make sure you start early and delegate projects that he’s just opened his 10th successful location, he says appropriately. Gathering all of your employees before you with confidence, “Employing your staff with enough time to even start generating revenue is a big financial investment, do training and a soft opening properly is much, much better and you can’t afford to squander that by procrastinating on in the long term, though it’s much more expensive in the the planning front. Make this a priority months in advance short term. It is absolutely worth doing that.” of bringing on staff, not weeks (and certainly not days).

OpenTable - How to Open a Restaurant 78

Classroom Training

Pre-opening training is generally divided into two major Sabato Sagaria of USHG, stresses the importance of starting sections: theory and practice. Classroom training generally with “why” and incorporating the company’s values and takes five to eight days and teaches employees what they philosophy into training at every possible moment. That need to know about the restaurant, how to perform their way, each employee is better prepared to make good specific job, in-depth product knowledge, details of the decisions in unrehearsed situations. He says, “If an employee physical space, and team building. is faced with a new challenge, they can tie it back to a similar scenario or train of thought and feel comfortable handling it Start by making a training schedule, which will be your road on their own because they understand our overall vision.” map through the process. It will help you keep your training plan organized, set expectations for your management team, and determine what written materials you need to “The only way to build culture is to constantly assemble for your staff. These are 10 important topics that talk about it and constantly work at it. If you don’t almost every restaurant should consider including: talk about it, it will never exist.” Alex Seidel 1. Start with Why On the very first day of training, discuss your restaurant’s 2. Introduce Leaders “why” and lay the framework for the culture you hope to It seems obvious, but it’s often forgotten: Introduce each grow. Rocky Cirino, the Managing Director of AltaMarea member of your leadership team and allow them to speak in New York City, often chooses to do this through telling briefly about themselves and why they are proud to be a part anecdotes and including the staff in the conversation. of your restaurant. Prioritizing engagement, especially early Questions like, “What is good service?” and “What are we in the game, is critical. Rocky says, “Presence is everything.” trying to achieve with this restaurant?” are often part of Depending on the size of your staff, giving the rest of your a focused discussion very early on. Will does the same in employees the opportunity to do the same sends a positive order to ensure that “everyone is on the same page and message and reinforces how much you value what each pushing in the same direction right off the bat.” team member brings to the table.

OpenTable - How to Open a Restaurant 79 Classroom Training cont’d

3. Clean & Set Up Will agrees that this portion of training isn’t the most It’s unlikely that your space will look like an operational exciting. “I think it’s fair to say that almost nobody likes restaurant on the first day of staff training. That’s ok, and it, but it’s important and so I try to do it in the middle of depending on how far off you are it can actually be a good training. My goal is to get them excited, get them eating thing. The stacks of boxes of unwashed plates, glassware, some food, get them through the dull compliance stuff and and silverware; the many storage areas that are yet to be then get them excited again before they open a restaurant.” organized in a remotely logical way; the service stations that are barren with the exception of that box of cereal 5. Product Knowledge that you’ve been living off of for a week -- these are all What you cover and how much time you devote to each opportunities for your new team to dive in and make your subject will depend on your restaurant’s concept. All of restaurant their functional, beautiful home. these topics provide a good opportunity to include the vendors, farmers, and distributors you’ve been working Not only does allowing your staff to take on cleaning and with; they will appreciate the chance to share their passion organization remove some heavy lifting from your plate, it for their products, and staff will benefit from learning from also creates a strong sense of buy-in and ensures that the different people. Nikki Wallis, Head of Academy Training and location of equipment and service items makes sense to Development at Gaucho Group in London, brings in industry the people who will be using them the most. experts to train because staff education is at the core of Gaucho’s culture. These are the major categories to consider: 4. Employee Handbook Review • Menu (ingredients, cooking techniques, presentation, Employees who have a clear understanding of what they allergens, substitutions) should expect to give and to receive from their employer • Cheese are more comfortable and confident, allowing them to do a • Wine better job. Even though it may not be the most stimulating • House cocktails material, an employee handbook is necessary -- and simply • Classic cocktails handing it out and asking staff to read it and sign it isn’t • Spirits enough to be sure that they are absorbing its contents. • Beer • Coffee and tea OpenTable - How to Open a Restaurant 80 Classroom Training cont’d

6. Tasting for five minutes in the middle of the first night of service, Academic knowledge is important, but tasting is a key only to find that it was never programmed to begin with. component of training for the entire team. Cooks need to Give your team time to familiarize themselves with the understand how every component of every dish should taste, locations of functions and menu items in your POS. Make and your front-of-house team needs to feel excited about sure every menu item is in the computer in the right place at the menu and be able to guide guests through their dining the correct price and printing where it’s supposed to. experience confidently. Will says, “We bring our kitchen staff in a week before our front of house because we want to get 9. Staff-on-Staff Service everyone tasting the food early, have plenty of time to explain Before you dive into preview events, do some dress it, and get them excited about it. There’s no point in doing rehearsals just with your staff to work out some of the bigger kinks. Wouldn’t you rather find out your expediting printer that if the food coming out of the kitchen is no good.” doesn’t work before you have guests of any variety in your 7. Service Standards house? Organizing some “staff-on-staff” exercises in which Pre-opening training is your best opportunity to define what one group serves while the other dines is a great way to is right and wrong when it comes to technical service. How make some early improvements and discoveries. What’s the do you want tables to be cleared? What’s the proper way to best place for trays to go in the service stations? How should the service bartender organize their tickets? These exercises transfer a bar check? It may feel tedious, but on your first busy should include the whole team — a well-practiced service night you’ll be grateful that you aren’t wasting time explaining team is useless without a well-practiced kitchen team. the same thing to 20 different people and being frustrated that they don’t already know the “right” way of doing things. 10. Additional Considerations Your managers and employees will also be more comfortable Prioritize training around elements of your restaurant that if they have a clear understanding of your expectations. are uniquely yours or that may be new to your team. To prepare his team for the opening of Vaucluse in New York 8. POS Training City, Rocky hired a tutor from the French Culinary Institute. Sure, most of us have used every POS system under the sun, Given that AltaMarea focuses on Italian concepts, he wanted but none of these experiences have been in your restaurant. to be sure that his team was completely confident with You don’t want servers searching for a tomato salad button French cooking techniques and pronunciation. OpenTable - How to Open a Restaurant 81 Classroom Training cont’d

Ryan Burnet, owner of Barrio and the newly opened • Employee handbook. Regardless of your concept, you Eastside in Minneapolis, installed a number of large, eye- need one. An attorney with experience in labor law and catching pieces of artwork throughout Eastside’s dining restaurant operations should build this with you and room that each had an engaging story. Ryan shared details review it before you give it to employees. of each piece in the restaurant’s service manual and brought one of the artists on site during training to speak • Service manual. This document should outline the to the staff directly about his installation. He also trained restaurant’s concept and the story behind it, bios of key his team to explain the restaurant’s artwork confidently to players, information about important partners like your guests who might want to know more. designer or major vendors, and a detailed outline of steps of service. It’s also helpful to include a quick summary of how to deal with guest complaints and a dedicated Prepare Written Materials section for hosts and front door policies.

Having a vision of what service should look and feel like • Menu descriptions. These should include menu item is one thing, but being able to put that vision on paper ingredients, allergens (and feasible modifications), and teach it to others is something else entirely. Creating preparation techniques, and a photo. written standards for your team implements one solid point of reference that can serve as everyone’s North Star. By • Beverage descriptions. These will vary depending on your taking the time to write documents like a comprehensive concept and teaching style. Consider building templates service manual, you’ll give yourself an opportunity to edit that include the name of a cocktail or wine by the glass your thoughts before teaching them to others and make and then leaving specific fields (like ingredients or tasting sure they are cohesive. This exercise will also make new notes) blank for your team to fill in during training classes. hire training dramatically more consistent and efficient before and after you open. • Floorplan. Your front-of-house team will need to commit table and seat numbers to memory immediately. Give Training materials that you’ll want to consider putting in them a tool to start practicing on day one. writing include:

OpenTable - How to Open a Restaurant 82 Prepare Written Materials cont’d

Build in Performance Measurement adopters,” receiving negative reviews on social media, Pre-opening training is a big investment, so it’s critical that lacking support from the press, and discouraging your staff you’re holding your team accountable for learning and early in the game are all surefire ways of damaging your retaining everything you’re teaching them throughout the short- and long-term success. process. Daily written quizzes will ensure that employees are committing important information to memory and send Sabato says, “Giving your team as many practical a clear message about the level of dedication you expect. opportunities to interact, learn the voice of the restaurant, Incorporate verbal testing into daily training exercises and retain menu items and steps of service prevents your first get everyone involved in hands-on training. paying guests from being your guinea pigs. We want to be our own guinea pigs.” TIP: Rocky says, “It is incredibly important to weed people out. We have a responsibility to create the best team Friends & Family Meals possible, so when we know that someone doesn’t fit with What: This type of pre-opening event should happen as close our culture, we are quick to fire.” to opening day as possible and serve as a comprehensive dry run. Invite friends and family of the restaurant to dine in exchange for critical feedback and the right to make Preview Events mistakes sans judgement. Typically, all or most of the food served at these meals is complimentary. Pre-opening events serve three essential functions: they are dress rehearsals for your entire team, they provide an This is the most important opportunity your staff will have exclusive first look of your restaurant to key players in your to practice cooking your menu, mixing your cocktails, talking community, and they give you an opportunity to receive about your wine list, and going through steps of service critical feedback and make changes before you open your before opening day, so structure it exactly the way you doors to paying customers. would a normal service.

Your first few weeks of service are the most important Who: Typically invitations to these meals are pretty coveted, ones you’ll ever have, and losing the trust of your “early and you’ll have no shortage of volunteers. Above all, invite

OpenTable - How to Open a Restaurant 83 Preview Events cont’d people you trust to be honest and whose opinions you everyone on your team to get some hands-on, real-time respect. Another thing to keep in mind: If you have a few big experience so they’re comfortable and confident going hiccups on your first night, will the people you’ve invited into day one. understand and forgive or send a snide tweet to their 5,000 • Make feedback cards for your guests. Honest, critical followers? Make sure it’s the former. feedback is a significant portion of your ROI for this type of event so getting your guests’ thoughts on paper and Sabato says, “We invite people within our company reviewing comments with your team every night is an because they see how we do things at all of our other absolute must. restaurants and are able to provide some amazing feedback. Sometimes when you’re opening you’re so far in Press Preview it, it’s hard to step above and look at it with an open mind.” What: Generate buzz by hosting a small event to give the Tips for getting the most out of it: press a first look at the restaurant when it’s still a few • Host at least two days of friends and family meals, but weeks away from opening day. Martin Williams, owner of M three or four days is ideal. You want the opportunity to Restaurants in London, says “We do hard hat nights to allow receive critical feedback, make mistakes, and correct the press to see the venue before it’s fully completed. This them before you open. gets them excited and gives them the chance to leak the story before anyone else knows details.” Going above and beyond • Control your cover counts. You’ll be surprised by how to show that they are important to you will help keep your many friends and family members you have all of the restaurant’s name top of mind as others continue to open. sudden when you give away free meals at a hot new restaurant. Decide how many people you want to serve Who: Invite all of the major food writers in your community each night based on your budget and your operational — magazines, newspapers, websites, and widely followed capabilities, then stick to those numbers. bloggers. For press events, focus on quality, not quantity. • Involve your entire staff. This may mean giving servers If you have too many people in your space, you’ll lose the smaller sections or having more cooks in the kitchen feeling of exclusivity and also lessen the likelihood of making than you normally would, but the primary purpose is for a personal connection with everyone in attendance.

OpenTable - How to Open a Restaurant 84 Preview Events cont’d

Tips for getting the most out of it: • Send them home with something unique. A sweet treat • Make the invite personal. Depending on how many with a branded recipe card or a bottled cocktail are people you have on your list, sending a well-branded, examples of items that will make a lasting impression. thoughtful paper invite or making individual phone calls Skip things like printed menus that are liable to continue are the most appropriate ways of getting your press to change as opening day approaches. preview on their busy calendars. Other Pre-Opening Events to Consider • Don’t mind the dust. An unfinished interior makes the • Opening Party. The best opening parties have a greater experience feel a bit more exclusive. Plus, there will still purpose than solely celebrating your restaurant’s be an element of surprise the next time they come in. opening. Host a fundraiser for your favorite local charity, or turn your opening event into an appreciation party for • Provide some tastes of your menu and cocktails during the many people who helped build your restaurant. the event. Taking a tour of the space is an essential part of the experience, but getting your future supporters and • Offer a Discount. After hosting friends and family meals, critics excited about the product you’ll be serving is just Will plans a period where regular guests (i.e. the general as important. Keep it simple — three perfect bites are public) dine at the restaurant with a 50% discount in order better than 10 imperfect ones. to give his team one last grace period to work out kinks before normal operations begin. • Work the room. Having a group of media heavy hitters • Guest Previews. Offer your future guests an exclusive in the same place at the same time is a tremendous preview of the restaurant. Martin worked with OpenTable opportunity. Embrace it! Your entire management team to sell tickets to OpenTable VIPs, giving them a first peek should be on the floor getting to know each person and at the restaurant, the opportunity to have a drink with entering their information into your reservation system. Martin and members of his team, and a chance to book That way you’ll know to take extra-special care of them a table before reservations opened to the general public. ʷhen they come in to eat. The outcome? Martin says, “Guests loved it and we had 3,000 bookings before we even opened the phone lines.”

OpenTable - How to Open a Restaurant 85 Key Takeaways

1. Start planning staff training and pre-opening events 4. Plan pre-opening events like friends and family early. These big investments are critical to your dinners to give your entire team the opportunity to get restaurant’s success, so build the expense into your comfortable, work through kinks, and practice what capital requirements budget and plan them early to get they’ve learned so that they go into opening day with the most out of them. confidence.

2. Create a comprehensive training schedule that starts 5. Host a pre-opening event exclusively for key members of with company culture. Other topics to include are the press to help build buzz before you open to the public. product knowledge, steps of service, POS training, and tasting.

3. Prepare written materials like an employee handbook, a service manual, food and beverage descriptions, and a floorplan to provide your team with the tools they need to be successful.

OpenTable - How to Open a Restaurant 86 In The Weeds: Sean Heather

Sean Heather of Salt Tasting Room in Vancouver on obtaining a liquor license.

“In B.C. at the time, you had to have the intention to eat if you went into a restaurant and you wanted to have a drink. You couldn’t just have a drink while you waited for your friends to arrive before going to eat somewhere else. We were combatting these antiquated liquor licensing laws, and when we explained that we were doing a charcuterie restaurant with cheese, they would say, well you’re not cooking anything. That’s not dinner.

So, the liquor board wouldn’t give us the liquor license because we didn’t have a functioning kitchen with stovetops. We looked around our own market to see what operations existed already that might allow us to slide in under the mat. We’re on the coast and we have a huge Asian population, and we realized that sushi restaurants were quite popular and well established and a lot of them didn’t cook a single thing. They cut fish like we were going to cut meat and they put it on rice like we were going to put it on crackers, and so we stopped calling ourselves a charcuterie bar and we started calling ourselves a sushi restaurant.

Right up until the week that we opened, the city and the liquor board thought that we were opening a sushi restaurant in an alleyway because that was the only way that we could get it past the hurdles. I’m sure that lots of places come up against things they have to battle with, but that was ours. We had to pretend that we were opening up a sushi restaurant for most of the bills and most of the inspection and then launch it as a charcuterie and cheese restaurant.”

OpenTable - How to Open a Restaurant 87 How to Create Your Menu

Guests seek out your menu more than any other element how to present it to guests. Once you’ve opened your of your restaurant. The dishes, pricing, and physical doors, be flexible and ready to make changes once you start appearance of your menu will play a hefty hand in to receive guest feedback. determining who your guests will be, how frequently they dine with you, and how they feel about your brand. For most guests, this process begins before ever walking Start with Trust through the front door of a restaurant -- OpenTable’s research shows that 86% of consumers “always” or When Danny Meyer describes hospitality, he often refers to “frequently” check out a restaurant’s menu online before the importance of making guests feel like the restaurant is they dine out. on their side. This approach builds a sense of trust, making them feel cared for on that particular visit and increasing Perhaps most importantly, the way your menu translates the likelihood that they’ll return. Earning the trust of guests into sales will be the basis of your restaurant’s revenue is paramount to every restaurant, but it’s particularly so stream, making it not only a critical brand touchpoint when it comes to new restaurants. Guests will set their but the key to your financial viability. Make thoughtful expectations based on your restaurant’s initial menu, and decisions when deciding what to put on your menu and while you work out the early kinks you’ll want to ensure you’re delivering on the promise of your brand.

OpenTable - How to Open a Restaurant 88 Start with Trust cont’d

If you can make it work financially, price yourself just below your competitors to get traction and make guests “We wanted to win trust from our guests before feel like you’re on their side -- but do be careful with this. anything else. I think if we’d opened up the Restaurants that open with menus that are priced artificially restaurant and did tasting menus or food that was a little too out there or too chef-y right away, we low to gain a following and then raise prices significantly would have lost a lot of guests.” months down the road often receive harsh criticism and Gavin Kaysen have a hard time retaining their core guest following.

This doesn’t mean that you need to dumb down your concept, but it does mean that you should always be Art vs. Commerce considerate of accessibility. Balance is key, and just because you don’t put a particular item on your opening menu doesn’t mean that it will never see the light of day. “Although what you want to do as a chef is very Make sure you have a mix of crowd pleasers and more important, there’s an art vs. commerce factor. complex, ambitious dishes so you can gauge guests’ You’re running a business, and I think that the reactions and let your kitchen and service staff find reason so many restaurants fail is because people their groove. A menu that’s full of lesser-known dishes, lose perspective on that.” ingredients, and techniques will be overwhelming for your Gavin Kaysen guests and for your team.

Building trust through pricing is also important. If you’re This all comes down to balance and your ultimate reason opening a fine-casual Italian restaurant, take a look at for opening a restaurant. Plenty of owners open restaurants competitors in your market with similar concepts. What do that prioritize profitability above all else, and in that case, they charge for a house cocktail or a signature dish? Gavin letting strategically-priced crowd pleasers dominate is the says, “Learning what type of pricing is making guests feel way to go. comfortable and like they’re getting value is really important.”

OpenTable - How to Open a Restaurant 89 Art vs. Commerce cont’d

For restaurateurs who open more visionary, chef-driven restaurants, which rely heavily on inexpensive ingredients concepts, building a menu is a constant balancing act like flour, tend to run lower food costs than concepts that between practicality and creativity. Opening with a menu rely heavily on protein, like steakhouses or seafood-focused that appeals to a wide audience and then adding or restaurants. removing dishes based on guest feedback will help you avoid alienating people right off the bat. Wine cost will be budgeted in a similar range as food (usually closer to 27-30%) but again will vary depending Gavin says, “I learned so much about our guests by walking on your concept and location. Liquor and beer tend to be around the dining room and just asking them what they budgeted much lower than both wine and food (which thought of the menu and also figuring out what their is one of many reasons it’s very beneficial to have a liquor basis of comparison was. What I think of as a fine-dining license). Restaurants with craft cocktail programs may aim restaurant or a casual restaurant is very different from what for a 14-18% liquor cost, compared to your local dive bar the average guest at Spoon and Stable thinks, and that has that likely runs closer to 10-14%. a huge impact on how our menu is perceived.” Balance Is King If you know you’re aiming for approximately 30% food cost, Building in Profitability doesn’t it then make sense to simply base every menu item on that calculation? Nope. Your menus -- food, wine, and cocktail -- and the guests who order from them are responsible for your financial success. This means that pricing must be strategic and “We’ll price chicken at $24, which gives us a 20% intentional, taking product cost, balance, and perceived food cost because chicken is cheap. As a result, value into consideration. we’re able to price pork at a lower price point with a higher food cost so that the two balance each Product Cost other out. I don’t want a $16 chicken main course In most restaurants, budgeted food cost should be 28-32%, next to a $32 pork dish.” though it will vary depending on market and concept. Pizza Gavin Kaysen

OpenTable - How to Open a Restaurant 90 Building in Profitability cont’d

Using this example, if pork is at 35% food cost and you start When you get into luxury products like caviar, white to sell more of it than any other entree, that’s going to push truffles, high-end wine and vintage spirits, traditional cost your overall food cost up. As you study your restaurant’s benchmarks tend not to apply. By bringing in specialty food product mixes and learn more about diner preferences, you and beverage offerings, you differentiate yourself, engage should start to see trends in which dishes are consistently your guests, excite your staff, and generate press. They can top sellers. Make sure that those items are at (or preferably also make you some money if priced strategically, but don’t below) your budgeted food cost so that they truly do balance expect them to be your most profitable items. You’ll have out your value-driven menu items at a higher food cost. a hard time actually moving products like these unless you price them with value in mind. But less is actually more, Sometimes it may be easier to work backwards when here, as selling 30 orders of caviar each night at 45% food developing menu items. For example, if you know you’re cost would actually throw off your numbers. missing a poultry dish and you need it to be around $28 to be consistent with the rest of your pricing, you then know you’ve got $7.80 to spend on product for the dish to ensure Working with Purveyors it’s in line with your target food cost. The relationships you have with your purveyors are Value Matters incredibly important. The people you purchase products Sometimes it makes sense to have items on your menu from will impact everything from pricing to payment terms that are primarily designed to add value to your guests’ to ease of business. When assessing different companies in experience or to entice diners to have a particular your market, look for those that prioritize customer service. experience. Gavin says, “We have a dry-aged beef ribeye for two on the menu for $39 per person that is not very good for Gavin says, “They’re not just selling me on a butternut our bottom line, but it looks really great when it’s out in the squash – what I’m buying is customer service. The dining room, and it makes people feel like they’re getting expectation is that it’s treated like a relationship; we a really great value because they are. I’d rather have them respect them and they respect us.” know they’re getting value so they feel motivated to make a second reservation and come back and order the chicken During the opening process, discuss payment terms with that has the 20% food cost.” your purveyors right out of the gate. Many purveyors will OpenTable - How to Open a Restaurant 91 Working with Purveyors cont’d want COD (cash on delivery) or seven-day payment terms group of Chef Daniel Boulud, Carla provides rare and for a new restaurant, which can range from difficult to valuable perspective on creating eye-catching designs that impossible for a restaurant that isn’t taking in revenue yet. are operations-friendly. Here are some of her top menu When opening Spoon and Stable, Gavin worked out an design dos and don’ts: agreement with purveyors in which he abided by seven-day • DO treat your menu as an extension of your brand. Make terms for a 90-day period. Once he’d proven that he could sure the presentation aligns with the formality of your be trusted to provide payment on time, suppliers agreed to concept. Paper quality, size and weight, font styles, give him 14 days to pay invoices. graphics, colors, section titles, formatting, and whether you opt to use a menu cover or backing should all tell the Menu Design story of your concept and add to guests’ experience • DON’T choose a menu design that can’t stand on its own. Once you’ve decided what you’re going to put on your As the focus on hospitality in restaurants continues to menu, work on how you’re going to present it to guests. increase (a great thing!), some menus have started to Whether you’ve brought on a branding company, hired become overly minimal to expand the role of the server a graphic designer, recruited a talented friend, or are in guiding the guest experience. Train your service team planning to do this on your own, there are some key to engage with guests and guide them through the menu, considerations to think through early so you don’t invest but don’t rely on them to translate everything from how time and money into creating something that isn’t a guest should order to what individual ingredients are. operationally feasible or financially sustainable. If guests can’t reasonably decipher most ingredients, your menu becomes a bottleneck that hurts your bottom We spoke to Carla Siegel, founder of the creative firm line. While there are plenty of inquisitive diners out there, Agentsie based in New York City. With a Communication’s there are equally as many who are turned off by needing Design degree from Syracuse University, a Culinary Arts to have a menu interpreted for them. diploma from The Institute of Culinary Education, and several years in the trenches of New York City’s fast-paced • DON’T overuse design features like boxes. Carla says, restaurant business as Creative Director for the restaurant “Not every dish can be special. Once you add multiple

OpenTable - How to Open a Restaurant 92 Menu Design cont’d

• boxes of equal weight on a single page the items lose both in the restaurant and on social media. If done individual emphasis, and the guest may not understand correctly your menu has the capability of being a strong why those things are called to attention. Pick and choose marketing tool beyond the walls of your restaurant.” what you want to draw attention to.” • DON’T build your menu in a software program that is • DO prioritize readability when choosing font sizes and overly complex or expensive. When you hire a graphic styles. Carla says, “Font selections will depend on the designer or branding company without restaurant look, feel, and intention of your brand, but when it operations experience, they’re likely to prioritize beauty comes to the heart of the menu, a clean, legible font is a over practicality. Programs like Illustrator and InDesign smart choice. Keep the overall number of fonts used to a unquestionably have a more sophisticated design minimum, making sure those assigned to communicating capacity than Word, Publisher, or Excel, however they dish descriptions and pricing are the clearest of all.” may be overkill. Carla says, “At the end of the day, the beautiful work doesn’t matter much if a manager or host • DON’T opt for a multi-page menu design. If table turns isn’t able to make edits easily. Designers often want to are a key factor in meeting budgetary goals be sure to deliver something beautiful without consideration of keep things concise. When guests have to flip through ongoing maintenance. Maintaining costly software with multiple pages to review appetizers and main courses, an abundance of tools that you just don’t need on a daily they spend more time looking at the menu and generally basis isn’t a smart investment.” take longer to order. Help out your turn times by keeping all of your food items on a single page. • DO keep the cost of your menu paper top of mind. When looking at samples, it’s easy to gravitate towards • DO consider the strategic marketing benefits of investing thick, uniquely-sized paper with design elements like in a beautiful, on-brand menu. For many guests who watermarks or pre-printed logos -- it is one of your most post restaurant photos on social media sites, the important brand touchpoints, right? True, but consider attractiveness of a menu will determine whether it’s cost and practicality. The reason so many restaurants a part of the picture or not. Carla says, “Russ and avoid non-standard paper sizes is because the cost Daughters Cafe, for example, has a striking place- associated with getting it cut and finding a compatible mat style menu that becomes a part of the branding printer can really add up. OpenTable - How to Open a Restaurant 93 Menu Design cont’d Key Takeaways

• DO research laser printers before finalizing your menu 1. Create an opening menu that prioritizes building trust design if you plan to print your menus in house. Carla with guests. Make sure you have a mix of crowd pleasers says, “When proposing menu designs many firms don’t and more complex, ambitious dishes. Then pay attention consider the constraints of the typical restaurant office, to what’s working and what’s not -- for guests, front-of- nor do operators know to bring these sorts of limitations house staff, and back-of-house staff. to their attention in the design process. For maximum flexibility, buy a printer that has an external tray into 2. Strive for balance. This applies to the type of menu which you can feed special sized paper.” Of course, make items you’re selecting as well as the price point and cost sure that the printer you choose fits in whatever space percentage. Having a budgeted food cost of 30% for your you have available in your office. whole menu does not and should not mean that every single item is priced based that percentage. • DO keep your initial paper order small. Considerable learning takes place in those first couple months of 3. Put a few value-driven items on your menu. These will operation with regard to what’s working and what’s not be things that don’t necessarily bring the most profit to both in operations and on the menu front. This includes the bottom line, but they create value for the guest by how quickly you’re exhausting resources like paper. If giving them a unique and memorable experience. you’re changing your menu frequently or needing many 4. Opt for a menu design that is easy to read and more menus for each service than you initially expected, understand. Although your service team should be it might be worth revisiting the cost per sheet so your trained to help guide guests through the menu, you expenditures don’t get out of hand. don’t want a menu design that requires an in-person • DO be diligent about proofreading and copy editing. tutorial. Make sure your menu is approachable for Errors in grammar, misspellings, and inconsistent diners who prefer less engagement. formatting all reflect poorly on the restaurant’s attention to detail. Everything, no matter how small the scale, is 5. Keep printing and material costs in mind. Fancy important. printers, expensive paper, and custom menu covers add up quickly. Make sure you’re spending your money where it will really have an impact for guests. OpenTable - How to Open a Restaurant 94 How to Use Technology

In recent years the technology sector has grown rapidly, Below is a list of systems to consider, with a brief and more and more experienced restaurant professionals description of their primary purposes. Point-of-sale and are partnering with tech companies, creating new, practical guest management systems are used most universally, so solutions for the industry. This section delves into best we’ve provided a bit more detail for both. practices for introducing technology into your operation, systems worth considering, and tips for managing and Point of Sale (POS) capitalizing on your restaurant’s online presence. A point-of-sale system is like your restaurant’s central nervous system, serving as an indispensable link between your guests, service team, kitchen team, accountant, Technology Solutions to Consider General Manager, and Executive Chef. Don’t default to a brand just because you are familiar with it or want to save There are a dizzying number of options for everything from money. Avoid spending money on functionality that you point-of-sale systems to inventory management. Do your don’t need or purchasing a low-cost product that doesn’t research and talk to similar restaurants using each product sufficiently support your business. and get feedback before making a decision. While some restaurateurs will opt to utilize technology at every turn, that In general, you get what you pay for in the POS world. doesn’t mean every product will benefit every restaurant. Systems range from tens of thousands of dollars to less

OpenTable - How to Open a Restaurant 95 Technology Solutions to Consider cont’d than $100 a month. The best way to know that you’re Restaurateurs who are planning to introduce technology investing in the right one for your restaurant is to first in many different areas also need to be sure that those establish what you need from a POS. systems will integrate. All other products will need to communicate with your POS, so be sure that you The world of POS is split into two major camps: local server understand the capabilities, limitations, and areas of systems and cloud-based, wireless systems. The former flexibility of any system before committing. includes industry standards and well-known platforms like Micros or Aloha, where the latter includes more recent, iPad- based products like Breadcrumb, Revel, and Square. As I Guest & Reservation Management mentioned, there’s a use case for either style, but it’s wholly dependent on your restaurant size and operational needs. I have seen and worked with restaurateurs who use their reservations system solely for reservations, and it’s a If you’re setting out to open a large restaurant with multiple huge missed opportunity. OpenTable is a comprehensive dining areas, a bar, private dining, and a large staff, a local guest management tool that, when used properly, has the server system is a must. The durability of these restaurant- power to raise service levels, improve guest loyalty, and grade systems, as well as the stability of the connection substantially increase revenue. and quality of support, completely justify the higher price tag of these platforms. The vision at OpenTable is always evolving. In the past few years, the company has moved far beyond just providing If you’re planning to operate a smaller restaurant with a restaurant reservations to giving restaurants a toolbox to run simple menu and modest staff, it might make more sense to and grow their businesses. The team is creating products opt for an iPad-based, cloud system. When you’re opening that can work for restaurants all over the world, tapping a restaurant cash flow is of the essence, and overspending into a global dining network. Plus, products and services are on a POS that far exceeds your business needs can put you evolving in the same direction as the industry as a whole. behind before you even get started. These platforms are The latest innovations are designed to help restaurants easier to use, take up less space, and are significantly more engage guests who are dining on a casual basis, so they can sleek and affordable in a smaller operation.

OpenTable - How to Open a Restaurant 96 Guest & Reservation Management cont’d see availability at a restaurant and join the waitlist remotely. and manage guest preferences, then utilize them to create Ultimately, the focus is on helping restaurants maximize their outstanding guest experiences easily and consistently. time and revenue. As you build profiles for your guests over time, you can also Here are the many different ways you will use your guest and launch targeted marketing campaigns based on the contact reservation management solution, and how to get the most information, preferences, and spending habits you’ve out of it. collected from your customers. Focus on sending the right information to the right people, as opposed to the largest Reservations possible volume of people. Choose a system that will allow you to manage reservations, waitlist, and walk-ins simultaneously. When Table Management it comes to reservation systems, it is absolutely necessary OpenTable’s Guest Center solution maximizes the daily to place yourself in the biggest possible pool of customers, seating capacity of your restaurant, then makes those and OpenTable’s network of 17 million diners gives you seats available and accessible to potential customers in unparalleled marketing exposure. Unlike the POS market, your market. The system is tailored specifically to your going with a better-known reservation system can have a restaurant’s floor plan, and it’s completely flexible: you significant positive impact on your revenue. can control your pacing and turn times, and also leverage table combinations and flexible seating to make room for Guest Management large parties. A steady flow of one-time visitors isn’t what keeps most restaurants busy, open, and thriving over the years. Repeat Calculating how much revenue each seat of your restaurant guests and regulars are a must, and in today’s increasingly can potentially earn you each year ($40 check average x 1.5 competitive market it takes more than good food and turns x 360 days = $21,600) is a good exercise to demonstrate service to get people to come back. The difference is that investing in the most recognizable, widely-used, hospitality. One of the most important pillars of this capable, and comprehensive reservation management tool intangible game-changer is the ability to make your guests is smart business. feel important and recognized, which is what OpenTable’s software is built to provide. It gives you the power to record More technology solutions to consider:

OpenTable - How to Open a Restaurant 97 Guest & Reservation Management cont’d

Type of Technology System Description of Purpose Commonly Integrates With

Time and attendance Scheduling Products like ScheduleFly allow managers to build Payroll processing schedules, record and save employee time-off requests, and post information in one accessible online location. On the staff side, these programs create an easy platform for employees to switch shifts, make requests, post messages, and access their schedule from any Wi-Fi enabled device.

Time and attendance This is what your employees will use to clock in and Scheduling out and what your managers will use to edit punches. A Payroll processing restaurant’s POS system is one of the most common time and attendance tools, but there are many other companies that offer this service in combination with other human resources functions.

Payroll processing These systems take time and attendance records and turn Scheduling them into paychecks. They also track paid time off and sick Time and attendance time accrual and allow you to build payroll reports.

Shift-to-shift communication These products provide a platform for your managers to Often included as a feature in record notes in a daily logbook. This should be used to sales management software, communicate information such as employee issues, guest scheduling systems, and complaints, facility maintenance needs, flow of service, comprehensive HR solutions, and sales. These programs centralize all of this information though can also be purchased in one searchable, shareable, easy-to-use resource that independently keeps your key team members in the loop.

Comprehensive human Companies like ADP and Push Operations integrate Scheduling resources solution multiple HR functions so you can manage everything Time and attendance related to timekeeping and payroll in one platform. Some Payroll of the newer platforms also integrate with your POS to POS give you real-time labor cost and help forecast labor needs based on sales.

OpenTable - How to Open a Restaurant 98 Guest & Reservation Management cont’d

Type of Technology System Description of Purpose Commonly Integrates With

Kitchen display system (KDS) Commonly used in the fast-food sector, kitchen display POS systems are paperless solutions that display orders from the POS on a screen in the kitchen. KDS may also have a place in fine dining, since cooks can see fewer checks at a time (six to eight) instead of 30, allowing them to stay focused and efficient.

Sales management Even if you have an advanced POS system, a program POS like Avero will provide significantly more insight into the performance of your restaurant by making key data available, comprehensible, and actionable. Integrating a sales management system can help your team drive business in off-peak times, make strategic decisions regarding menu pricing, understand what items may need to be removed or changed, and coach weak servers.

Mobile payments Solutions such as OpenTable’s House Accounts allow guests POS to opt in to paying with their credit card at the same time they make a reservation, skipping cash exchanges and in- person transactions. Guests don’t have to wait for a server to deliver the check, and servers can turn tables quickly and efficiently. In an increasingly cashless world, these payments are more secure and more convenient for guests.

Inventory management Inventory management systems remove the need for POS binders of invoices, pencil and paper inventory, and Excel spreadsheets. Bringing these functions online reduces human errors and helps diagnose opportunities and potential problems by tracking your purchases, sales, and inventory.

Kitchen management Systems like FusionPrep provide a platform for recipe n/a creation, prep list management and standardized ingredient labeling.

OpenTable - How to Open a Restaurant 99 Tips for Choosing & Using Tech Solutions

Chad Clark, Operations Director of Hawksworth Restaurant an interesting exercise, and pulling together the perfect in Vancouver, is the most forward-thinking proponent of palette of technological ‘colors’ for your restaurant’s tech- using technology to increase operational efficiency that I’ve based canvas is one of your most important.” encountered in my career. Chad’s approach is particularly novel, as Hawksworth is a fine-dining concept. Though there are plenty of examples of quick-service and fast-food chains “We’ve grown accustomed to doing things a very adopting tech solutions, there really aren’t too many fine- specific way, but when you look at them through dining models to look to. As a result, Chad has had to learn a an operations lens, they’re just highly inefficient.” lot of lessons the hard way -- here is the advice he shared for other restaurateurs looking to up their technology game: Chad Clark

• Choose companies that are poised to stand the test of • Seek out companies that prioritize customer service time. Tech startups are doing a great job identifying and and welcome customization. A system malfunction helping to bridge gaps in efficiency, but there are so many on a Friday night is a major inefficiency. Similarly, a people trying to get a piece of the pie that failure for some is solution that requires workarounds in order to work inevitable. Chad says that he’s already experienced bringing for your restaurant defeats its core purpose of making on a tech partner only to have the company dissolve within it easier to run your concept. As a best practice, always the year. To avoid falling in love with a solution that’s not in inquire about support and implementation before it for the long haul, do your homework. signing any contract and adopting a solution. Oftentimes restaurateurs overlook these details and end up footing • Make sure your solutions integrate. As mentioned above, the bill for products they can’t rely on -- which they when bringing on multiple partners that each serve a ultimately don’t use. specific purpose for your restaurant -- POS, inventory management, payroll, scheduling -- make sure they • Work with tech partners you trust. From Account integrate with one another. If they don’t, you are cutting off Managers to Product Managers, employees at OpenTable their collective capacity at the knees. Chad says, “Trying have a wealth of real-world restaurant experience, to sift through all of the choice out there these days is having collectively worked just about every role in the front and back of house. In fact, a survey of 200+ OpenTable - How to Open a Restaurant 100 Tips for Choosing & Using Tech Solutions cont’d

• members of the OpenTable field team showed that around is the idea of being so efficient around ordering more than 76% had been servers at some point in and operations that they actually have more time with their careers. That’s a differentiator among many tech their guests. I personally believe that as customer service companies today, in which the people you’re working evolves, getting to speak to a human is going to feel like with may not know the industry. Chad says, “You really a greater and greater luxury.” need to have people that you trust overseeing your project who know your property, know the restrictions, and know potential pitfalls, and then be ready to take an “I can’t afford to have technology replace my active role in managing those people.” people, but I do want technology to increase the • Be realistic about new systems your team can take time that my people have together.” on. Introducing change always requires extra energy Chad Clark and time to learn a new way of doing things. However, there’s a difference between asking your team to stretch • Start by thinking about what problems you want to use themselves and asking for the impossible. If the specific technology to solve, and then seek a product within product you’re suggesting feels really overwhelming your budget that can functionally affect them. It can to the people who will be required to use it every be really easy to start paying for sleek systems that you day, consider other companies that provide the same may not actually need. More isn’t always more, and it’s solution. Go through product demos yourself and with important that any technology-based solution provides your team, and push for a 14- or 30-day trial to give your true value for your restaurant. staff time to uncover what, if any, shortcomings the product may have when inserted into the day to day. Managing Your Web Presence • Use technology to increase efficiency, not replace human interaction. Chad says, “The big concern is In today’s digitally-driven world, every restaurant owner that introducing technology makes people disengage. should assume that the first contact a guest will have But what I’m trying to get my team to wrap their heads with their brand will either be through their own website

OpenTable - How to Open a Restaurant 101 Managing Your Web Presence cont’d or through online review sites. Plenty of potential diners complex design. The easier on the eyes your website is, will opt not to visit your restaurant if they can’t find basic the more time someone will spend looking at it, which information like your hours of operation or an up-to-date will increase their likelihood of becoming a customer. menu -- or if your online reviews are predominantly poor. • Make basic information easy to access. Your restaurant’s phone number, address, email address, How to Build Your Website and hours of operation will likely be available on many different sites (Yelp, Google, TripAdvisor, OpenTable) but you want the information to be front and center on your When it comes to building a website, you have options: you website, too. Include a map for people in search of can spend tens of thousands of dollars hiring a professional cross streets. web developer or you can use a platform like Squarespace that charges a relatively low monthly rate and provides • Keep your menu updated. There’s nothing worse customizable web templates. The right decision depends than having a guest ask about a dish that’s on your on the level of complexity your website requires and on website but you no longer have on your menu. Plenty your budget. Here are a few key strategies to keep in mind: of people (myself included) will go out of their way for a particular dish, and not only does it create a feeling of • Stay on brand. It is critical that a guest’s first look at your disappointment for the guest, it reflects poorly on the website feel consistent with the first feeling they will have restaurant. In the early weeks and months your menu is when they walk through your front door. Anyone whom likely to change often, as your kitchen team continues to you’ve brought on to help with branding and design tweak dishes; make sure that a specific person on your should be an integral part of determining the aesthetic of team (such as the opening manager) is responsible for your website. updating it online. Always post a formatted text menu on your website rather than forcing guests to download • Prioritize readability. It sounds basic, but plenty of a PDF. OpenTable integrates with the menu provider restaurants let design touches get in the way of making SinglePlatform to host menus that are easy to update words legible. Avoid setting light typeface on top of and easy for search engines to read (another boon for similarly colored backdrops, and steer clear of overly your online presence).

OpenTable - How to Open a Restaurant 102 How to Build Your Website cont’d

• Include beautiful photos. Photos are the best way to Restaurants in London, says, “Everyone in the restaurant give your guests an idea of what you’re all about. High- industry messes up -- there will be occasions where quality, professional photos of seating areas, kitchen people leave underwhelmed. If we’re not meeting or features (like a wood burning oven), dishes, and cocktails exceeding expectations then we have to do everything we are a must. Especially for new restaurants, guests will can to recognize that in the restaurant.” look to your initial photography to gauge their own interest in your restaurant. Make the investment and 2. Look for trends in reviews and don’t let your team don’t cut corners, as these photos tell your story even get discouraged by outliers. Reading reviews with the before your team has the chance to do so. purpose of identifying consistent feedback is a much healthier and more practical exercise than dwelling on the goose eggs. John Winterman, Managing Partner of How to Manage Your Presence on Online Review Batard in New York City, says, “If you get bogged down in Sites online reviews, you lose the forest through the trees. Not everyone is going to like what you do.” By not dwelling Ultimately, you can’t control what your guests write about on the one-offs or individual rants and raves, you can you on outlets like Yelp, TripAdvisor, and OpenTable. What assess trends that are more actionable for your team. If you can control is the level of service guests receive while there’s consistent negative feedback about a particular they’re within your four walls and how you respond to dish, it may be best to bring up with your chef to re- whatever they post. Here are five tips on how to handle evaluate. Similarly, if you notice a large volume of guests your restaurant’s presence on online review sites. praising a playlist from a particular night, make sure that one stays in your rotation. 1. When it comes to negative experiences, early diagnosis is key. Train your service and management teams on how 3. Engage with online reviewers. Expressing gratitude to to identify and handle guests who are having negative reviewers who say positive things about you online will experiences. The best way to ensure that a customer increase the sense of connection that guest has with doesn’t speak poorly of you on the Internet is to catch your restaurant. Making your customers feel appreciated them before they leave. Martin Williams, owner of M is a great way to get them (and hopefully their friends) to

OpenTable - How to Open a Restaurant 103 How to Manage Your Presence on Online Review Sites cont’d

1. come back regularly. John also suggests entering notes 5.3. A picture says a thousand words. When you first start in OpenTable for people that leave reviews (good or bad) your Yelp and TripAdvisor pages, upload some images so that your service team is better prepared to take care of your restaurant. Soon enough, your guests will start of them the next time they come in. Engagement is even posting their own photos as they leave reviews, but more important with guests who leave negative reviews. having a few photos of your restaurant’s interior, dishes, Reach out to them promptly, listen to the details of their and cocktails available for your early adopters is a good experience, and offer a sincere apology and perhaps way to control the story from the start. something complimentary to encourage them to give you another try. You won’t win every person back, but Key Takeaways it’s important to try. 2. 1. Seek out technology partners that are excited to build 4.1. Make sure your restaurant’s information is up to date. features based on your needs. You’ll also want to make There is nothing more discouraging than going out of sure that whoever you partner with has the integration your way to visit a restaurant after looking up its hours of capabilities your business needs and 24/7 support so operation online, only to find that it’s closed. Your hours that you aren’t the only one trying to work through a of operation should always be available and accurate random computer glitch on Friday night at 8 p.m. Just and include holiday closures whenever possible. If you like everything else, do your homework before investing. make a change to what’s posted on Google, it usually takes two to three business days to update, so make sure 2. Introduce technology for the purpose of increasing the that you request changes in advance. efficiency of your business. Hospitality is an industry that inherently relies on human interaction, so make 2. If you have a buyout or private event that affects your sure that the systems you introduce allow your team to availability during normal business hours, post to spend more quality time improving guest experiences, social media to inform your guests. These little touches not less. strengthen the connection between a restaurant and its audience and will ensure that your concept is evaluated on the food, drink, and experience you create.

OpenTable - How to Open a Restaurant 104 Key Takeaways cont’d

1.3. Start by figuring out what you need and then start 5.3. Engage with online reviewers and consider making to look for a product that provides the appropriate operational improvements based on consistent services. If you start by looking at products, you may feedback. Only spend time reflecting on the end up spending too much for functionality that you’ll constructive criticism and encouraging praise that never use or finding a thrifty option that falls way short online reviews can provide. Taking the time to respond of helping you effectively manage your business. to and recognize the guests who took the time to share their thoughts will surely reinforce their relationship 4.2. Invest in your website. For many people, it will be with your restaurant. the first interaction they have with your restaurant, so make sure it’s beautiful, easy to navigate, up-to-date, and on-brand.

OpenTable - How to Open a Restaurant 105 How to Create Buzz

Opening night in a new restaurant is among the most will be telling your story constantly -- who you are, what thrilling and energy-filled experiences you will ever have. inspired the concept of your restaurant, what makes you Make a concentrated effort to create buzz so your big night unique, and information on the key members of your team, is preceded and followed by attention from the media and from chef and pastry chef to sommelier, bartender, and your community. This process begins long before you ever even manager or maître d’, according to what is relevant open your doors and will be a huge catalyst to ensuring for your business. Before reaching out to members of the your early success, as well as establishing a core group of media or responding to any incoming requests from them, regulars right out of the gate. get the very best version of your story on paper and ready to share. A few tips: After assessing your budget, time constraints, and your skill set as it relates to public relations and marketing, you may • Cover your bases. Your story should be like the Cliff’s decide to solicit help from an outside firm, but it’s certainly Notes of your restaurant -- but shorter. Include the unique not necessary. Either way, these 10 strategies will help you selling points of your concept, a clear description of your gain attention for your restaurant leading up to opening day. menu style, a brief bio of you and other key players on your leadership team, your location, a description of the interiors and important interior design features, anything 1. Get Your Story Straight significant about the location or the history of the space, Throughout the process of opening your restaurant, you and what meal periods you will be open for.

OpenTable - How to Open a Restaurant 106 1. Get Your Story Straight cont’d

• Make it compelling. You’ve been living and breathing can always find something appealing to shoot, whether it’s your restaurant for years, and it can be easy to lose signature dishes or the talented members of your team. perspective. Try to step outside yourself and consider what a potential guest will find most interesting or unique TIP: This same summary of your restaurant will be a very about your forthcoming concept. Once you have some key helpful tool for your staff, so consider including it in your points in mind, ask a few trusted peers for feedback. training materials and keeping it at the host stand for reference once you open. • Keep it concise. No matter how interesting your project is, keep attention spans in mind. The people who will be Georgette Farkas, owner of Rotisserie Georgette in New York reading this summary read many others every day, so City, says, don’t scare them off with a long, intimidating document. Aim to fit everything on one page.

• Edit. Like everything you put into the world, this “Everyone has a story. Every menu, every dish, every restaurant, and every chef has a story. You document will be a reflection of you, so it needs to be need to find a way to tell yours so that the most very well-written and, of course, edited for grammar, unique elements shine through.” spelling, and punctuation. Georgette Farkas TIP: If writing isn’t your cup of tea, this may be an area where you need outside help from a PR firm or a friend. Before enlisting help, write down the key points of your 2. Find the Key Players message so that the person spinning it into an engaging Depending on the size of your market and your familiarity story has all the information you want to communicate. with it, this can be easy or very challenging. Do some • Use visuals. Include a curated selection of professional preliminary research and make a list of all of the major food photographs along with what you write. Photos will writers, bloggers, and reviewers in your area. bring your words to life and make the presentation of your restaurant much more tangible and engaging. Even Georgette also urges restaurateurs to think outside the if your space is not fully ready to be photographed, you box when identifying members of the media who may be

OpenTable - How to Open a Restaurant 107 2. Find the Key Players cont’d worthwhile to reach out to. She says, “Don’t limit yourself key contacts are. Be sure not to overlook up-and-coming only to food writers or restaurant writers. You’ll want writers new to the scene.” Another big consideration: do to think about people who write about wine, cocktails, you have the time to do the necessary legwork? lifestyle, society, interior design, business, real estate, and fashion because there can be really great opportunities 3. Communicate with Intention there as well.” Martin Williams, owner of M Restaurant in London, always tries to build stories around the restaurant that are appealing as news stories as opposed to being solely targeted to food press. “Communicating with the media is really just an extension of hospitality. Taking care of people from the marketing world should follow the same rules as taking care of a guest.”

“Building relationships with journalists who are Georgette Farkas news journalists, not just foodie journalists, has given us a completely different angle for achieving Once you have an engaging summary of your restaurant, an press coverage.” excellent selection of high-resolution images, and a list of Martin Williams media contacts, you’re ready to start reaching out. If you’ve decided to bring on a PR company, they will take the lead Once you have a master list of names put together, prioritize here, but if you’ve decided to go it alone, remember that it. At the top, list people who are of the greatest interest most members of the media will be really excited to hear to you and reach out to them personally. Contact lower- directly from a chef or restaurateur. priority outlets via email with all of your materials attached. For those who choose not to hire a PR firm, the two most TIP: This is an area where you may need outside help. difficult parts of communicating directly with press are Georgette says, “It may be a little harder in large markets getting comfortable with self promotion and answering because so much of the important writing is done by difficult questions. The best way to handle both of these freelancers these days, and if you’re not in that media challenges? Prepare. Keep your one-page summary handy, community it’s sometimes hard to figure out who the come prepared with talking points, and make sure that you

OpenTable - How to Open a Restaurant 108 3. Communicate with Intention cont’d anticipate difficult questions and plan answers in advance. There isn’t too much complex strategy involved here; Georgette If you get stumped, Georgette says, “There’s always a says, “I literally walked every block in a 20-block radius and went gracious and thoughtful way to redirect without being into every store to introduce myself, give people cards, and tell disingenuous. No one knows better than you what is most them about the restaurant. Another absolutely vital group to interesting about your restaurant. And sometimes, you just reach out to are concierges in your area.” have to say, ‘That’s something I’m not quite prepared to discuss right now.’” Earning the trust and support of your immediate neighborhood is extremely important, because they are the TIP: Immediately after interaction with the media (whether guests who will be filling your seats on freezing cold nights a formal interview or impromptu conversation), follow up. and holiday weekends. Consider hosting a social hour with Make it as easy as possible for them to share information wine and light snacks, and ask attendees to drop a business about your restaurant. Send an email expressing gratitude card on their way out. This will earn you some immediate for their time and interest, along with your one-page good will, give your staff a chance to build early relationships summary and photos. with neighbors, and give you a high-quality head start on your mailing list. Enter these names into OpenTable right away with a guest note indicating they are neighbors so your team is 4. Love Thy Neighbor always prepared to give them a little extra love.

Reach out to your community and give them an opportunity to get to know you and your restaurant before 5. Host a Media-Specific Preview Event opening. Jennifer Baum, owner of the New York City marketing and consulting firm Bullfrog + Baum, emphasizes As described in Chapter 9, creating a small event to give the that your local community will likely be the bread and press a first look at your restaurant when it’s still a few weeks butter of your day-to-day business. It is critical to prioritize away from opening day is a great way to generate buzz as you outreach in your own backyard. head down the home stretch. It also helps you build goodwill with the people who will be critiquing you and following your restaurant for years to come.

OpenTable - How to Open a Restaurant 109 5. Host a Media-Specific Preview Event cont’d

hadn’t told them. I have to take things back for clients a lot. Especially when you’re in pre-opening phases, giving more “Everyone likes to discover things. Even if the information is not always ideal.” restaurant is still a construction site or you’re only able to show the certain elements of your concept, Remember that every interaction you have with the they’re going to appreciate the opportunity to press -- even if it’s informal or in a social context -- can discover.” be incorporated into a story about your restaurant, so be Jennifer Baum mindful of what you say and how you say it. In today’s media landscape, when one person writes about you the For key people who are unable to attend the media preview story can get picked up and repeated in many other outlets event, Georgette recommends offering to set up one-on- almost immediately. When asked about an opening date, one appointments. Your most valuable media contacts are Georgette recommends giving a target range, as opposed unlikely to attend group events. Invest time in arranging to to pinpointing a specific date. No matter how on-schedule meet with them one on one. This will give you the chance your construction and hiring timelines are, you never know to start building relationships and makes the other person what’s going to happen. Promising hard dates too early on feel important and valued. can get you in trouble.

TIP: It can be really tempting to nix the media preview and invite members of the press to friends and family dinners 7. Start Your Social Media Feeds Early instead. Keep in mind that friends and family dinners are training exercises; it isn’t wise to expose influential writers Start social media accounts (Instagram, Twitter, Facebook) and bloggers to the inevitable missteps that will occur. as soon as you’ve chosen the restaurant’s name. Document and share the progression of construction, menu item testing, staff training, and anything else that will help your 6. Avoid Oversharing audience get to know you, your team, your space, and your brand. Giving your guests the opportunity to take the pre- Jennifer says, “You don’t want to engage with the press opening journey with you will create a sense of ownership and tell them something that you ultimately wish you and build familiarity with your brand before the restaurant has even served its first guest. OpenTable - How to Open a Restaurant 110 7. Start Your Social Media Feeds Early cont’d

Jennifer says, “Everything needs to speak to your brand.” -- you already have an existing rapport and are better Social media content should share the same voice as positioned to keep your restaurant in the news. your website and other branded materials. The photos, captions, and articles you share should look and feel like one 9. Respond to Reviews continuous story and not like a random collection of multiple people’s thoughts. Your guests can only get to know your After your doors have opened, there will be so much going restaurant if its representation is thoughtful and consistent. on that responding to guest reviews will feel impossible. Still, it’s extremely important. It is always a good idea to 8. Build Relationships recognize the folks who took the time to write a positive review for you, either by re-posting content on social media, responding to someone on Yelp, or sending an email to a guest who reached out directly. “Nurture every relationship. The best bits of media coverage I’ve had have been through relationships Negative reviews are always more challenging but even I’ve had with certain individuals in the press more important. Time is of the essence, so make sure you community for many years. The more they reach out promptly. Your goal is to engage with the guest, understand who you are, the more they’ll see stories which you don’t necessarily see yourself that learn about their experience, and then find some sort of interest them and interest their readership.” resolution that encourages them to give you another shot. Offer a genuine personal apology, send the guest a gift card, Martin Williams or help them make their next reservation and do something Restaurant culture is in the midst of a major boom, special for them when they come in. which means that the media will take an interest in your restaurant opening. This gives you a great opportunity TIP: Add notes in the profiles of guests who have had a to take initiative and invest time and energy in building negative experience at your restaurant. If it took too long relationships with these key people. That way, in one, two, for entrees to come out the first time they were in, you’ll or ten years -- when you aren’t the new kid on the block want to have the information on file so that your team can pay extra attention to timeliness on their next visit. OpenTable - How to Open a Restaurant 111 9. Respond to Reviews cont’d

“We try to answer reviews whether they are good “I would always suggest that you get a PR or bad so that we’re engaging. If you reach the company that has got a personal interest. They point where you’re getting a negative review, need to be as excited about your restaurant as you you’ve messed up. But, if you’ve engaged with are and then they’ll be great at getting you press.” the guest and you manage to turn it around, then Martin Williams that becomes a good thing. And, at least if nothing else, you’ve tried and you’ve demonstrated that you care.” You Only Get What You Give After assessing your options and making a decision, give your Martin Williams new PR team as much data as possible about who you are, what you’re doing, and why you’re doing it. It doesn’t have 10. Get the Most Out of Your PR Company to be beautifully written or attractively formatted (as this is The process of vetting, hiring, and working with a PR presumably why you’re paying them), but if your PR company company is like every other relationship you will have in feels like they know and understand you really well, it will be your restaurant: In order to find the best people and get the much easier for them to write compelling stories about you most out of them, conduct research before writing a check, and your restaurant. Georgette says, “If you don’t give them set clear and actionable expectations, and follow up on vital, colorful, valuable, good, interesting information, what progress consistently. are they going to use to tell your story with? They need tasty ingredients just as much as the chef does.” Do Your Homework Conducting interviews and checking references are critical Set Expectations first steps to finding a great PR company. Look for a sense of Make sure you are vocal and transparent about your synergy and fit in order to foster a positive and productive expectations regarding the specific type of support and press relationship. Georgette also says that calling current and coverage you’d like to see. Georgette recommends coming former clients of each company you’re considering to suss out to the table with a wish list of publications -- print and digital pluses, minuses, and red flags is an extremely important step. -- and then have them add to it; part of the reason you’ve

OpenTable - How to Open a Restaurant 112 1. i 10. Get the Most Out of Your PR Company cont’d hired them is for their expertise in knowing and having 2. Reach out to the community directly around your site relationships with outlets you may not be aware of. and let them know about your restaurant. Walking into businesses in the blocks around you to pass out business cards, introduce yourself, and encourage your neighbors to come check out the restaurant is an important first “Have a very clear conversation with your PR step in building lasting relationships with people who company about your goals and have them respond will hopefully become your most reliable regulars. to you as specifically as possible about which of those goals they feel they can and cannot meet, not to mention goals they add to the list.” 3. Host a media-specific preview event. Creating a small event to give the press a first look at your restaurant Georgette Farkas when it’s still a few weeks away from opening day is a great opportunity to generate buzz and also to build Follow Up goodwill with the people who will be critiquing you and Set up regular meetings with your PR team and be diligent following your restaurant for years to come. about checking in on progress on a monthly basis. Use the list of goals and publications you discussed with them as a 4. Dealing with members of the media should feel tool to track progress to ensure you’re getting the most out like an extension of hospitality. Make sure that you of your investment. Your PR company is no different than communicate clearly and appropriately, follow up with an employee or a purveyor; it is highly unlikely that you’ll additional information, and always express genuine get more than what you consistently ask for. gratitude for their time and interest.

Key Takeaways 5. Prepare for interviews and events with the press. Identify key points about your restaurant that you’ll 1. Prepare a compelling and concise summary of your want to be sure to mention and do your best to restaurant to share with media. Focus on its unique anticipate difficult questions that may be asked of you selling points and make sure that you get help writing it so that you can prepare answers in advance. if you’re not much of a wordsmith.

OpenTable - How to Open a Restaurant 113 Glossary

Black Iron: Kitchen exhaust or hood system. (Chapter 3)

Change order: Work that is added to or deleted from the original scope of work of a contract, which alters the original contract cost and/or completion date. (Chapter 6)

Design-build: A method that allows a designer, architect, and contractor to work as equal partners in creating and executing construction plans. (Chapter 6)

Food cost: The cost of every component of a dish, divided by the price. For example, if the cost of all ingredients that go into a burger is $4.50, it would need to be priced at $15 on the menu in order to have a 30% food cost.

Landlord Work Letter: Outlines in detail what the tenant requires the landlord to provide before any lease is signed. (Chapter 3)

Organizational structure: Defines how activities such as task allocation, coordination and supervision are directed toward the achievement of company goals. (Chapter 8)

Ownership structure: Defines how much of the business you will own and how much your investors will own. (Chapter 2)

Payback terms: Payback terms define the parameters around how you will pay back the money that your investors loaned you to open your restaurant. They stipulate details like how much time you have to pay back the money, how much interest will be accrued, and how much you’ll owe them over defined periods of time (for example, paying a portion of the money back every year as opposed to a lump sum after x number of years). Chapter( 2)

OpenTable - How to Open a Restaurant 114 Glossary cont’d

Pre-bidding: When a contractors submit bids based on preliminary, partially completed plans. (Chapter 3)

Prequalification: The process through which a designer or architect makes focused recommendations to a restaurateur for a General Contractor. The process includes an interview and an overview of how the project will be priced. (Chapter 3)

Private Placement Memorandum: A PPM is a legal document provided to prospective investors when selling stock or other security in a business. This document lays out all of the disclosures and risks of investing in the business to increase the transparency between the business owner and the investor. A PPM also includes a subscription agreement, which requires the investor to disclose their financial status in order to protect the restaurateur from taking money from someone they shouldn’t. (Chapter 2)

Product mix: A report that shows how many of each menu item was sold in a predetermined amount of time.

Soft skills: personality traits, social graces, communication, language, personal habits, interpersonal skills, managing people, leadership, etc. that characterize relationships with other people. (Chapter 8)

Working capital: Also known as operating reserve, working capital is the money you will need to set aside to keep your business running at it’s best for the 3-6 months after you open your doors. Your restaurant will be taking in money starting on opening day, but depending on how quickly business picks up, it may not be enough to cover your expenses in those first few months. (Chapter 2)

OpenTable - How to Open a Restaurant 115 Sample P&L

Category Annual Budget $ % of Sales

Income Food Sales $975,000 65% Beverage Sales Liquor Sales $183,750 35% Wine Sales $262,500 50% Beer Sales $52,500 10% NA Bev Sales $26,250 5% Total Beverage Sales $525,000 35% Sales Adjustments $1,050 0.07%

Total Sales $1,500,000 100% Total Income $1,498,950 99.93% Cost of Goods Sold Food Cost $292,500 30% Beverage Cost Liquor Sales $27,563 15% Wine Sales $78,750 30% Beer Sales $8,925 17% NA Bev Sales $5,250 20% Total Beverage Sales $120,488 23% Labor Cost FOH $209,853 14% BOH $254,822 17% Other Costs Health Insurance $10,500 0.70% Worker’s Compensation $12,741 0.85% Payroll Taxes $82,442 5.50% Payroll Fees $17,987 1.20% Total Other Costs $123,671 8% Total Labor Cost $614,570 41%

OpenTable - How to Open a Restaurant 116 Sample P&L cont’d

Category Annual Budget $ % of Sales

Total Cost of Goods Sold $1,027,557 69% Gross Profit $471,393 31% Expenses Operating Expenses Restaurant Supplies $9,743.18 0.65% Kitchen Supplies $11,991.60 0.80% Décor $3,747.38 0.25% Tabletop $8,993.70 0.60% Uniforms $2,248.43 0.15% Laundry and Linen $8,993.70 0.60% Cleaning Supplies $5,995.80 0.40% Credit Card Fees $52,463.25 3.50% Gift Card Expenses $899.37 0.06% Reservation System $5,246.33 0.35% Music $749.48 0.05% Security - 0% Printing $4,496.85 0.30% Sales Tax $2,248.43 0.15% Total Operating Expenses $117,817 8% Occupancy Expenses Rent $37,474 2.50% Insurance $2,548 0.17% Utilities $19,486 1.30% Repair and Maintenance $4,497 0.30% Total Occupancy Expenses $64,005 4.27% General and Administrative Marketing and Advertising $37,474 2.50% Research and Development $1,049 0.07% Legal Fees $8,244 0.55% IT Fees $4,497 0.30% Bookkeeping $17,987 1.20%

OpenTable - How to Open a Restaurant 117 Sample P&L cont’d

Category Annual Budget $ % of Sales

Accounting $11,992 0.80% Licenses and Permits $5,996 0.40% Office Supplies $3,747 0.25% POS Expenses $2,248 0.15% Computer Supplies $2,248 0.15% Bank Fees $1,499 0.10% Employee Appreciation $749 0.05% Total General and Administrative $97,732 7%

Total Expenses $279,554 19%

$191,839 13% Net Operating Income Other Income Other Expenses Interest Deprecitation Amortization

Total Other Expenses Net Income

OpenTable - How to Open a Restaurant 118 Contributor Bios

Jennifer Baum President & Founder, Bullfrog + Baum

Jennifer Baum is the president and founder of Bullfrog + Baum, an award-winning, nationally-recognized agency specializing in hospitality, lifestyle and consumer marketing. Under her guidance the agency has had a hand in turning chefs like Laurent Tourondel and Michael Psilakis into internationally-recognized brands while strategizing for well-known culinary luminaries like Bobby Flay and Wolfgang Puck.

Jennifer received her MBA from New York University and became enamored by the business of hospitality. Combining her corporate savvy with a keen eye to make a concept successful, she carved out a niche for herself by building an agency that not only launches restaurants, but brings strategy to the diverse array of needs that figure in their success. During the last 16 years at the helm of Bullfrog + Baum, she has played an integral part in the changing landscape of hospitality marketing.

Twitter: @BullfrogAndBaum Instagram: @bullfrogandbaum Facebook: facebook.com/BullfrogAndBaum

Will Beckett and Huw Gott Owners, Hawksmoor Restaurants

Will Beckett and Huw Gott met at school at the age of 11 and went into business together in 2003, when they opened The Redchurch, a late-night bar in Shoreditch. By 2007 they owned three more venues: Green & Red, a Mexican restaurant and tequila bar; the Marquess Tavern, a gastropub focusing on well-sourced British produce; and Hawksmoor. Having sold the others, they now have four Hawksmoor restaurants: Spitalfields, Guildhall, Seven Dials and Air Street, which are among the most popular and best reviewed in the country.

Will is the son of food and wine author and restaurant critic Fiona Beckett. While other kids were out stealing

OpenTable - How to Open a Restaurant 119 hubcaps or honing their skills in pool halls, Will accompanied his mother to Michelin-starred restaurants. From the bad lands of the Roux brothers’ restaurants, he decided that his dedication to endless eating and drinking could only mean one thing – he had to open his own restaurant.

Huw Gott is the grandson (and great grandson) of butchers and son of award-winning café owners. In-depth discussions on the evils of vac packing and the onslaught of double-muscled Continentals (beef cattle, not bodybuilders) were commonplace over the Sunday roast. After stints in kitchens in London and Paris, Huw realized that he wasn’t cut out for a career as a chef, deciding that life as an owner would be significantly easier.

Twitter: @hawksmoorLondon Instagram: @hawksmoorrestaurants Facebook: facebook.com/hawksmoor

Charles Bililies Creator & Owner, Souvla

Charles Bililies is the creator and owner of Souvla. After cooking on the East Coast, Bililies moved to California in 2006 to work at The French Laundry as Culinary Assistant to Chef Thomas Keller. Thereafter, he served as dining room manager of Bouchon Bistro. He later relocated to San Francisco, working as Chef Michael Mina’s Culinary Assistant. He was tasked to open RN74 in 2009 and later became the restaurant’s Assistant General Manager.

Bililies holds degrees in Hospitality Management from Cornell University and Culinary Arts from Johnson & Wales University. A Greek-American, Bililies comes from a family tradition of restaurateurs; the vintage copper and brass pots throughout the space that were originally used in his grandfather’s restaurant in Boston, Mass.

Twitter: @souvlasf Instagram: @souvlasf Facebook: facebook.com/souvlasf

OpenTable - How to Open a Restaurant 120 Federico Castellucci President, Castellucci Hospitality Group

A graduate of the Hospitality School at Cornell University, Fred Castellucchi has worked in the restaurant business his entire life. He helped create and develop the original Sugo restaurant and grew the concept to four locations, including three franchises. In 2009 he created a new modern Spanish restaurant concept called The Iberian Pig.

Following that success, Fred embarked on two more projects: Double Zero Napoletana in 2011, featuring handmade pasta and traditional Neapolitan pizza; and in 2014, the Basque-inspired concept Cooks & Soldiers.

Fred currently serves as president of Castellucci Hospitality Group, the management company that he created in 2010, which includes Sugo, The Iberian Pig, Double Zero Napoletana and Cooks & Soldiers.

Twitter: @Cooksatl Twitter: @doublezeroatl Instagram: @cooksatl Instagram: @doublezeroatl Facebook: facebook.com/cooksandsoldiers Facebook: facebook.com/DoubleZeroNapoletana

Twitter: @iberianpig Twitter: @sugo Instagram: @iberianpig Instagram: @sugorestaurant Facebook: facebook.com/IberianPigAtl Facebook: facebook.com/SugoAtl

Mark Canlis Co-Owner, Canlis

The second of three sons, Mark grew up in a restaurant family. When he officially joined Canlis in 2003, he had already graduated from Cornell University, served as a Captain in Air Force Special Operations, and worked in nearly a dozen restaurants across the country. He met his wife, Anne Marie, while working for famed restaurateur Danny Meyer in opening Danny’s fifth restaurant, Blue Smoke, in Manhattan.

Returning to Seattle, Mark spearheaded the effort towards generational transfer and brand modernization that has garnered the family business national acclaim as one of the finest restaurants in America.

OpenTable - How to Open a Restaurant 121 He now owns and operates Canlis restaurant with his brother, Brian.

Twitter: @canlisrestaurant Instagram: @canlisrestaurant

Chad Clark General Manager, Hawksworth Restaurant

Chad Clark, the cosmopolitan General Manager of Hawksworth Restaurant, has managed and consulted with leading restaurants across Canada and in Europe. Hired as part of the integral opening team of Tom’s Kitchen in London, Chad cites his time working alongside the reputable two-star Michelin chef as one of his most inspiring tenures.

Other career highlights include managing Feenie’s and Lumière in Vancouver, in addition to consulting for Chambar, Café Medina, and Boneta. In 2007, Chad relocated to Montreal to become general manager of Koko Restaurant and Bar at the Opus Hotel, and in 2009 he returned to Vancouver to open Oru at Fairmont’s new Pacific Rim hotel, just before the 2010 Winter Olympic Games. His goal is to enhance the Vancouver dining scene by delivering value alongside culinary excellence within an elegant, yet comfortable and relaxed environment.

Twitter: @HawksworthRes Instagram: @hawksworthrest Facebook: facebook.com/HawksworthRestaurant

Richard Coraine Chief Development Officer, Union Square Hospitality Group

Richard is the Chief Development Officer of Union Square Hospitality Group, and oversees the Department of Business Development, the division of USHG created to innovate, incubate, and develop a fresh generation of award-winning restaurants and other groundbreaking ventures for the USHG family of businesses.

OpenTable - How to Open a Restaurant 122 A few of his most notable innovations and openings have been Eleven Madison Park (which earned 4 stars in the New York Times), Blue Smoke, Shake Shack, Maialino, Untitled at the Whitney Museum of American Art, and most recently, North End Grill in Battery Park City. Additionally in 2009, Richard worked with Susan Salgado to launch Hospitality Quotient, a learning and consulting business designed to help clients in diverse industries integrate hospitality into their technical service.

Before becoming Chief Development Officer, Richard was Chief Operations Officer, in which capacity he was responsible for the performance of all USHG operations, directly supervised the executive chefs, general managers, and directors, and trained the restaurants’ management teams to provide guests with USHG’s renowned cuisine and hospitality.

Richard joined USHG as a partner in 1996, following a decade of leadership with Wolfgang Puck Group, and the launch of his own restaurant, Hawthorne Lane, which he opened in San Francisco in 1995. Richard is a Boston native, a graduate of the University of New Hampshire Whittemore School of Business and Economics, and holds an AOS in Culinary Arts from the Culinary Institute of America.

Twitter: @USHGNYC Instagram: @ushgnyc Facebook: facebook.com/unionsquarehospitalitygroup

Desi Danganan Founder, Plinth Agency

To Desi Danganan, believing in your dream and relentlessly chasing after it is the definition of entrepreneurship. Now he uses his experience to help businesses grow through branding and crowdfunding. Not only that, he’s always open to mind meld. You can find find him at plinthagency.com.

Twitter: @plinthagency Facebook: facebook.com/plinthagency

OpenTable - How to Open a Restaurant 123 Roberta Economidis Partner, Georgopoulos & Economidis

Since 2004, Ms. Economidis has been a partner in the law firm of Georgopoulos & Economidis, LLP. The firm’s primary focus is representing businesses in the hospitality industry with an emphasis on corporate structure, private securities offerings, contracts and real estate.

Before going into private practice, she served as a Deputy District Attorney for Santa Clara County and was subsequently appointed as the Executive Director of the California Educational Facilities Authority by the California State Treasurer. Ms Economidis received her law degree from Santa Clara University of Law.

Twitter: @GELawGroup

Georgette Farkas Founder & General Manager, Rôtisserie Georgette

This native New Yorker, who’s enjoyed an international career, is a restaurant professional with over 20 years in the field. Georgette gained hands-on culinary experience at Roger Vergé’s Moulin de Mougins, Alain Ducasse’s Louis XV in Monte Carlo, and with Daniel Boulud while he was Executive Chef at New York’s Hotel Plaza Athenée. She later returned to work for Daniel, serving as his Public Relations and Marketing Director from 1995 to 2012. During her 17-year tenure she was one of a small group of executives who helped to extend Boulud’s Dinex Group to 14 venues.

Today, Georgette is extending the lessons she’s learned across the world of hospitality to delivering pleasure to her guests at Rôtisserie Georgette. Ms. Farkas and her restaurant have been recognized with a “Restaurateur of the Year” (2015) award from the Manhattan Chamber of Commerce, a Wine Spectator “ Award of Excellence” (2015) and a Women Chefs & Restaurateurs “Golden Fork Award” (2014) for excellent service.

Twitter: @rotisserieg @georgettefarkas Instagram: @RotisserieG Facebook: facebook.com/RotisserieG

OpenTable - How to Open a Restaurant 124 Lou Guerrero Principal, Krost, Baumgarten, Kniss & Guerrero

Specializing in restaurant business consulting and tax planning for over 30 years, Lou has assisted a wide range of clients with operational, tax and accounting related matters. Over his career Lou developed his expertise in the restaurant industry and has been an integral part in the expansion of the firm’s niche in the industry.

Today, Lou is the tax practice leader for the firm’s largest concentration of clientele – the foodservice industry. He is involved with every aspect of the industry including operational consulting, tax consulting & compliance, financial consulting, accounting & auditing, and bookkeeping / business management services.

Jean Hagan Principal, Krost, Baumgarten, Kniss & Guerrero

Jean has owned, operated, and consulted in the restaurant industry for almost 30 years. During that time she worked with a well known national chain, managed food and beverage for several ski facilities in Squaw Valley, and became the president, CEO, and shareholder of one of the highest grossing restaurants in California. Today Jean is Principal and leads the restaurant operations consulting practice at Krost, Baumgarten, Kniss & Guerrero.

Jean brings a unique skill set to our CPA firm. With her extensive industry experience she is able to consult with our clients at the store operations and strategic management levels. Jean’s expertise and drive has helped develop the consulting practice to include services such as P&L coaching, restaurant openings, systems automation, business management, sequence of service, check average analysis, management bonus structures, labor & related costs analysis, POS systems analysis, flash reporting implementation and analysis, and much more.

OpenTable - How to Open a Restaurant 125 Mike Harden Co-Founder & Senior Partner, ARTIS Ventures

Mike Harden is the co-founder and Senior Partner at ARTIS Ventures. Mike and ARTIS have partnered, funded, and supported YouTube, Nimble Storage, Practice Fusion, Stem CentRx, Bracket Computing, Versa Networks, Omicia, Aruba Wireless Networks, Silver Spring Networks, and Quid, among many others, helping them transform and disrupt major industries.

Prior to joining ARTIS Mike was with the CSFB Technology Group, where he was one of the first mobile internet and device analysts. He also graduated from Lucent Technologies / Bell Labs Leadership Development Program, where he worked in the mobile division. Mike currently serves on the boards of Practice Fusion, Stringify, and Quid. He is the co-founder and chairman of ChefsFeed; is on the board of Tacolicious; and is a board observer at Looksharp and Juicero.

Twitter: @hardwiremike

Sean Heather Owner, Heather Hospitality Group

Sean Heather is the owner of the successful Heather Hospitality Group, which encompasses the Irish Heather Gastropub, Salty Tongue, Salt Tasting Room, Shebeen Whiskey House, Fetch Coffee Kiosk, Penn Bakeshop, Bitter Tasting Room and Rainier Provisions. Sean oversees the day-to-day operations and finances and manages staff for venues, but purchasing and sourcing key products is one of his favorite aspects of the role.

Sean opened the Irish Heather in 1997 and since then has found great success in the restaurant industry in Vancouver. In 2000, he launched Shebeen Whiskey House, then three years later, the Salty Tongue Café. 2006 saw the expansion of the Heather Hospitality Group to include the critically acclaimed Salt. From 2009 to 2011, Sean opened five more venues: Fetch, a coffee kiosk; Bitter, a beer-tasting house; and most recently Rainier Provisions. Along the way he joined forces with his business partner, Scott Hawthorne, who part- owns Salt and Bitter.

Twitter: @TheIrishHeather Twitter: @SaltTastingRoom Twitter: @SaltyTongueCafe Instagram: @TheIrishHeather Instagram: @SaltTastingRoom Facebook: facebook.com/ Salty-Tongue-Cafe Facebook: facebook.com/ Facebook: facebook.com/Salt- theirishheather Tasting-Room OpenTable - How to Open a Restaurant 126 Matt Hemsley Investment Banker, Piper Jaffray & Company

Matt Hemsley is an investment banker for Piper Jaffray & Company in Minneapolis, a global strategy and management consulting firm. He started his career at Goldman Sachs & Company in New York. In addition to his professional career, Matt has been an investor in a variety of entrepreneurial endeavors. Matt was an investor in Crispin Cider, which was sold to MillerCoors in 2012, and he is an investor in the Minneapolis healthy fast-casual restaurant Agra Culture Kitchen & Press and in the award-winning restaurant Spoon and Stable in Minneapolis. He has also invested in variety of natural resource projects associated with the Bakken shale oil field.

Matt graduated magna cum laude from Georgetown University with a bachelor’s degree in economics, where he was also elected Phi Beta Kappa. He earned a master’s degree, with distinction, in economic history from Oxford University’s Magdalen College, and a Master of Business Administration degree from Stanford University. Matt serves on the board of directors of the Piper Jaffray Foundation, as well as the Guthrie Theatre in Minneapolis, and is a former board member of the Stanford Business School Fund and the Greater Twin Cities United Way.

Gavin Kaysen Chef & Owner, Spoon and Stable

There is nothing quite like the frenetic and fleeting seasonality of the upper Midwest to inspire a soulful cook. For Chef Gavin Kaysen, an old soul at heart, this idea beckoned him back home to Minneapolis to open Spoon and Stable restaurant in fall 2014.

Gavin refined his dexterity in contemporary American fine dining by dedicating time to some of the world’s best restaurants. After graduating in 2001 from the New England Culinary Institute in Montpelier, Vermont, Gavin worked at Domaine Chandon in Yountville, CA; L’Auberge de Lavaux in Lausanne, Switzerland; and the famed L’Escargot in London before becoming executive chef at El Bizcocho in San Diego, where he was named one of Food & Wine magazine’s Best New Chefs. In late 2007, he joined Chef Daniel Boulud as chef de cuisine of Café Boulud in New York City, where he later earned the James Beard Rising Star Chef award and a coveted Michelin star.

OpenTable - How to Open a Restaurant 127 Gavin is one of the founding mentors of the nonprofit ment’or BKB Foundation (formerly Bocuse d’Or USA Foundation), for which he currently serves as Team USA’s head coach in preparing for the famed biennial culinary competition that showcases the world’s best up-and-coming chefs. He brings an intimate knowledge of the Bocuse d’Or competition, as he proudly represented the U.S. in 2007.

Twitter: @spoonandstable @gavinkaysen Instagram: @spoonandstable @gavinkaysen Facebook: facebook.com/gavin.kaysen facebook.com/spoonandstable

Aaron London Executive Chef & Owner, AL’s Place

Chef Aaron London is the Executive Chef and Owner of AL’s Place in San Francisco’s Mission neighborhood. Aaron began cooking at age 14 after getting in trouble with the law and needing a way to channel his energy. He continued to work his way up -- eventually to his first sous chef position -- at local restaurants for the next four years.

While attending the Culinary Institute of America in Hyde Park, Aaron interned and completed his six-month externship at the critically acclaimed Restaurant Daniel. Upon graduation, he moved to Montreal to work in the kitchen at fine-dining Toque and Au Pied de Cochon. After three years, Aaron returned to New York and spent a year at famed Blue Hill at Stone Barns, then headed overseas, where he spent time biking and interning his way through top establishments in Europe: Michelin-starred Arpège, L’Astrance and La Chassagnette.

He returned to California to join Chef Jeremy Fox on the opening team of Ubuntu Restaurant & Yoga Studio in Napa. He was promoted to sous chef and then again elevated to chef de cuisine within the first two years. Upon Fox’s departure, Aaron stepped up as executive chef, where he received local and national recognition of the ground-breaking vegetarian restaurant. In 2012, he moved to San Francisco to hone his skills behind the bar, gain insight into the front of house, and develop his own restaurant concept. AL’s Place opened in

OpenTable - How to Open a Restaurant 128 February 2015 to mass anticipation from the San Francisco dining scene and quickly became a favorite amongst critics and diners.

Twitter: @alsplacesf Instagram: @alsplacesf Facebook: facebook.com/Als-Place

John Ross Owner, B. Hospitality Co.

John Ross emerged onto the Chicago dining scene in 1997, taking a vital role as Director of Service in the opening of Michael Jordan’s fine-dining restaurant One Sixty Blue. In 2000, he opened his own self-financed concept, Sage, a farm-to-table restaurant in his hometown of Des Moines, Iowa. In 2005, he sold Sage to his head chef and returned to Chicago to rejoin One Sixty Blue. After two great years there, John spent some time managing and directing food and beverage at Chicago’s iconic Ambassador East Hotel, including The Pump Room and Tramonto’s Steak & Seafood.

In 2008, John partnered with the talented Chef Chris Pandel and his longtime friend, Phillip Walters, to form B. Hospitality Co. and to open The Bristol. With the great success of The Bristol, the team went on to partner with Boka Restaurant Group to open Balena in 2012. In early 2015, B. Hospitality Co. launched Formento’s, an Italian-American heritage restaurant, and Nonna’s, an Italian sandwich shop, two projects near and dear to John’s heart. Named after and inspired by his Grandmother Formento, the restaurant was designed to offer the classic Italian dishes and warm hospitality that John grew up with. B. Hospitality Co. also plans to partner with Boka Restaurant Group to open another West Loop eatery, Armour & Swift, an upscale steakhouse.

Twitter: @johnthebristol Instagram: @johnthebristol

OpenTable - How to Open a Restaurant 129 Sabato Sagaria Chief Restaurant Officer, Union Square Hospitality Group

Sabato Sagaria is the Chief Restaurant Officer of Union Square Hospitality Group (USHG), which includes some of New York City’s most acclaimed and beloved restaurants. Sabato works closely with USHG leadership to continuously improve operations and strengthen the restaurant brands. In addition, he oversees USHG’s centralized functions of facilities management, information technology, public relations, and marketing to elevate restaurant operations and guest experience through a collaborative, streamlined approach.

Over the past 20 years, Sabato has fulfilled many roles at nationally-acclaimed restaurants and hotels, from cook to restaurant manager to wine director. Most recently, he directed food and beverage operations at The Little Nell Hotel in Aspen, Colorado, during which time he played a pivotal role in refining and developing the hotel’s restaurant concepts, including Element 47 and Ajax Tavern. Earlier, Sabato served in leadership roles at The Inn at Little Washington, The Four Seasons Resort Palm Beach, and the historic Greenbrier Hotel in West Virginia. In 2012, Sabato became a member of the Court of Master Sommeliers, a prestigious honor held by fewer than 250 individuals worldwide.

Twitter: @sabato3 Instagram: @sabato3

Alex Seidel Chef/Owner, Fruition and Mercantile dining & provision

Alex Seidel, a Food & Wine Best New Chef, is chef-owner of Fruition Restaurant and Mercantile dining & provision in Denver and owner of Fruition Farms Dairy, Colorado’s first artisan sheep’s milk creamery.

Alex began his culinary career at 14 and worked his way up to positions at Sweet Basil and at Frank Bonanno’s fine-dining flagship, Mizuna. He launched his own restaurant, Fruition, in 2007, receiving accolades from Zagat and “Best Chef Southwest” nominations from the James Beard Foundation. In fall

OpenTable - How to Open a Restaurant 130 2014 Alex opened a third endeavor: Mercantile dining & provision, a restaurant and European-style market located in Denver’s Historic Union Station.

Twitter: @FruitionDEN Twitter: @MercantileDEN Instagram: @Fruitionrestaurant Instagram: @Mercantiledenver Facebook: facebook.com/Fruition-Restaurant Facebook: facebook.com/Mercantile-dining-provision

Tanya Shea Principal, Shea, Inc.

Tanya Shea has more than 20 years of experience in marketing, branding, and creation of consumer experiences. Tanya’s expertise is in developing business plans, brand strategy, and consumer-based concepts through all points of contact, from marketing to the physical environment.

As a principal at Shea since 1999, Tanya has been involved in all aspects of consumer branding and design in the areas of restaurant, hospitality, and retail for clients. Her clients range from entrepreneurs and chefs to the Fortune 500 companies in all aspects of development or refresh. Tanya’s life and career have been significantly shaped by her extensive travels both domestically and abroad. Through her travel, she gains an understanding of the consumer experience from many perspectives, giving her a worldview that enhances her role as principal of an award-winning design firm.

Twitter: @shea_inc Instagram: @shea_inc

Carla Siegel Founder, Agentsie

With a Communication’s Design degree from Syracuse University, a Culinary Arts diploma from The Institute of Culinary Education, and several years in the trenches of New York City’s fast-paced restaurant business, Agentsie founder Carla Siegel’s background includes graphic design training and extensive culinary knowledge in addition to tangible front- and back-of-house restaurant experience.

OpenTable - How to Open a Restaurant 131 Today, Carla offers her expertise to established restaurant groups, growing restaurant brands and PR firms in the hospitality industry. She brings a unique combination of creativity, culinary knowledge, operational experience, communications skill and public relations savvy to her work.

Twitter: @agentsie Instagram: @agentsie

Brett Traussi Chief Operating Officer, The Dinex Group

Brett Traussi is the Chief Operating Officer of The Dinex Group, the management company of Daniel Boulud. With Dinex, Brett supervises everything from new concept development and design to construction and restaurant openings, overseeing the ongoing operations of Boulud’s eighteen restaurants. His professionalism, stubbornly positive attitude, and flexible approach are the perfect complements to Boulud’s energy and creativity and have made an invaluable contribution to the chef’s lasting success.

A graduate of Cornell University’s School of Hotel Administration, Brett also served as Food and Beverage Director for New York’s Palace Hotel, where he was part of the team reconcepting the hotel’s entire F&B program, including the opening of Le Cirque 2000.

Twitter: @btraussi Instagram: @btrauss1

Martin Williams Founder, M Restaurants

Martin left his post as Managing Director of the Gaucho restaurant group to start his own venture, M THREADNEEDLE STREET, in 2014, gaining widespread acclaim and a number of ‘Best New Restaurant’ of the year award nominations. The instant success of M resulted in the opening of M VICTORIA STREET last December. The new site will house two restaurants RAW and GRILL, plus M BAR, along with exciting brand extensions: M WINE STORE, a unique, high-quality wine shop, tasting gallery, and online website delivering

OpenTable - How to Open a Restaurant 132 what Martin describes as “extraordinary restaurant wines for the home”; and M DEN, a Private Member’s Bar with the world’s smallest cinema.

Martin began his restaurant career in earnest, taking the position of General Manager at WokWok, a high- quality mid-market restaurant group. Following promotions within the group, he moved to a four-year spell at Zizzi and eventually left his position of Area Manager to join Christopher’s in Covent Garden. He has managed to rise through the ranks, ultimately raising over £5M of investment for M Restaurants and thriving in the already saturated London hospitality market.

Twitter: @mrestaurants_ Instagram: @mrestaurants_

John Winterman Managing Partner, Bâtard

Born and raised in Indiana, John Winterman was in college when he learned that cuisine is more than three vegetables and overcooked meat. He has distinct memories of the first time he tasted foie gras, Kobe beef, wasabi and 1928 Cheval Blanc.

For the past 17 years, Winterman has worked in front-of-the-house positions for such notables as Charlie Trotter, Gary Danko and Daniel Boulud, most recently as maître d’hôtel of restaurant Daniel. Along the way, he became a certified sommelier and an expert in artisanal cheeses. John has now joined forces with restaurateur Drew Nieporent at Bâtard, where he is Managing Partner.

Twitter: @johnwinterman Instagram: @johnwinterman

OpenTable - How to Open a Restaurant 133 Chris Zeman Vice President, Zeman Construction

The combination of 30 years experience, relentless drive, and an unwavering commitment to clients make Chris Zeman a premier project manager. Over the last decade, Chris has managed over $160 million dollars in projects. By fostering a team approach to project management, he established a singular track record of successfully guiding multiple concurrent projects.

Much of Zeman’s growth comes from repeat business, a clear indication of our client’s confidence in their services. In recognition of his management style with clients, co-workers, and the larger community, Chris was awarded The Catholic Spirit’s 2013 Leading With Faith Award.

OpenTable - How to Open a Restaurant 134 Join the more than 33,000 restaurants that fill seats and manage reservations with OpenTable. Get Started

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