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"restaurants are booming right now" David Chang recently published this open letter on GQ that paints a less rosy picture on the current state of affairs in the

"restaurants are booming right now" David Chang recently published this open letter on GQ that paints a less rosy picture on the current state of affairs in the restaurant world: http://www.gq.com/story/david-chang-resturant-business-challenges http://www.gq.com/story/david-chang-resturant-business-chall...

Mikeb85 11y ago
Because one anecdote is data... Fact is, the restaurant industry is bigger than ever. Consumers now spend more money eating out than on groceries. David Chang may not have figured out how to pay good salaries and make money, but many others have. And regardless, one failing restaurant (group) doesn't negate the fact that restaurant dollars are out there...
- ingenieros 11y ago
  It's not just David Chang complaining about the slim profit margins that most restaurants operate with. Anyone who browses Eater on a regular basis will have come across multiple restaurant shutdowns almost on a daily basis. Does this mean that ALL restaurants struggle? Of course not, but you can't deny the fact that restaurants are extremely risky investments. This is why many well known chefs have started doing things like food trucks or pop up restaurants to test out new concepts rather than invest millions of dollars on signing a new building lease.
  - Mikeb85 11y ago
    Part of the problem is that restaurateurs generally come up through the 'system'. A system where they're treated like shit by others, paid poorly, and told that various costs and inputs 'should be' X and Y. They accept shitty pay, never really accrue much capital, so when they do finally decide to start on their own, they are at the mercy of various dubious investors imposing exceptionally terrible terms. I had the good luck of working with several chefs who wouldn't accept the 'status quo' of food cost, labour cost, ideal markup, etc... Including one who paid off all his debts (he was smart and didn't let investors take any equity) in about 2 years. We're talking capital investments well over a million - paid off in 2 years. And then there's the whole 'Bistronomie' movement in France and Europe, propagated by guides like 'Le Fooding'. By contrast, North America is running restaurants like Europe did 15 years ago. Some are making great profits, but too many are controlled by their investors, leaving little profit for the workers. > Of course not, but you can't deny the fact that restaurants are extremely risky investments. Tech startups are as well. It's just that founders are generally more insulated from the risks. Restaurants likely have a higher 'success' rate than startups, considering how many live off venture capital for years. I could rant for hours about what's wrong with restaurants (I did work in them for most of my working life). But that doesn't mean the 'industry' as a whole isn't booming. http://www.bloomberg.com/news/articles/2015-04-14/americans-spending-on-dining-out-just-overtook-grocery-sales-for-the-first-time-ever http://www.bloomberg.com/news/articles/2015-04-14/americans-... For the right entrepreneurs, the money is there. They just need to operate more efficiently. David Chang himself demonstrates what's wrong with his model. He's not charging enough. He fears that what he's creating isn't worth more than he's charging, but he can't make a great profit. He should either charge more, or change his product to something he can charge more for. He's right - no one will pay $27 for ramen. Many restaurants specialize in ramen. He can't compete with that. I haven't been to all his restaurants, but it does seem as though he's become more and more conventional as his enterprise has grown - his first several ventures were definitely off-the-wall sorts of places. Looking at menus at his new places - they're far larger, more complex, and more conventional in format, even if the dishes themselves are quite interesting. IMO, the future is in smaller restaurants. Less workers. Limited menus. No investors sucking up profit. In many ways I see Japan as a glimpse into the future - entire neighbourhoods comprised of restaurants that are the size of a closet, with one artisan creating your food/drinks. It's not necessarily a 'scalable concept' like American investors like. But it's a way for workers to make a good living, and still create art and an 'experience'. And I would venture a guess, if one were to look at statistics, that the average restaurant is getting smaller...

Mikeb85 11y ago

Because one anecdote is data... Fact is, the restaurant industry is bigger than ever. Consumers now spend more money eating out than on groceries. David Chang may not have figured out how to pay good salaries and make money, but many others have. And regardless, one failing restaurant (group) doesn't negate the fact that restaurant dollars are out there...

ingenieros 11y ago
It's not just David Chang complaining about the slim profit margins that most restaurants operate with. Anyone who browses Eater on a regular basis will have come across multiple restaurant shutdowns almost on a daily basis. Does this mean that ALL restaurants struggle? Of course not, but you can't deny the fact that restaurants are extremely risky investments. This is why many well known chefs have started doing things like food trucks or pop up restaurants to test out new concepts rather than invest millions of dollars on signing a new building lease.
- Mikeb85 11y ago
  Part of the problem is that restaurateurs generally come up through the 'system'. A system where they're treated like shit by others, paid poorly, and told that various costs and inputs 'should be' X and Y. They accept shitty pay, never really accrue much capital, so when they do finally decide to start on their own, they are at the mercy of various dubious investors imposing exceptionally terrible terms. I had the good luck of working with several chefs who wouldn't accept the 'status quo' of food cost, labour cost, ideal markup, etc... Including one who paid off all his debts (he was smart and didn't let investors take any equity) in about 2 years. We're talking capital investments well over a million - paid off in 2 years. And then there's the whole 'Bistronomie' movement in France and Europe, propagated by guides like 'Le Fooding'. By contrast, North America is running restaurants like Europe did 15 years ago. Some are making great profits, but too many are controlled by their investors, leaving little profit for the workers. > Of course not, but you can't deny the fact that restaurants are extremely risky investments. Tech startups are as well. It's just that founders are generally more insulated from the risks. Restaurants likely have a higher 'success' rate than startups, considering how many live off venture capital for years. I could rant for hours about what's wrong with restaurants (I did work in them for most of my working life). But that doesn't mean the 'industry' as a whole isn't booming. http://www.bloomberg.com/news/articles/2015-04-14/americans-spending-on-dining-out-just-overtook-grocery-sales-for-the-first-time-ever http://www.bloomberg.com/news/articles/2015-04-14/americans-... For the right entrepreneurs, the money is there. They just need to operate more efficiently. David Chang himself demonstrates what's wrong with his model. He's not charging enough. He fears that what he's creating isn't worth more than he's charging, but he can't make a great profit. He should either charge more, or change his product to something he can charge more for. He's right - no one will pay $27 for ramen. Many restaurants specialize in ramen. He can't compete with that. I haven't been to all his restaurants, but it does seem as though he's become more and more conventional as his enterprise has grown - his first several ventures were definitely off-the-wall sorts of places. Looking at menus at his new places - they're far larger, more complex, and more conventional in format, even if the dishes themselves are quite interesting. IMO, the future is in smaller restaurants. Less workers. Limited menus. No investors sucking up profit. In many ways I see Japan as a glimpse into the future - entire neighbourhoods comprised of restaurants that are the size of a closet, with one artisan creating your food/drinks. It's not necessarily a 'scalable concept' like American investors like. But it's a way for workers to make a good living, and still create art and an 'experience'. And I would venture a guess, if one were to look at statistics, that the average restaurant is getting smaller...