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What It Costs to Open a Restaurant in San Francisco

153 points by NaOH 9y ago

RcouF1uZ4gsC 9y ago
>A fire department permit worker told Tortosa that it would take him two to four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of overtime with a four-hour minimum), Tortosa could pay for him to look at it right now. This makes me very angry. This is approaching the corruption say in India that Modi is trying to get rid of where every local official requires a bribe for them to do their job. I hope this kind of behavior is severely punished.
- pc86 9y ago
  It's a pretty standard practice. You can wait the standard amount of time for the work to be done in queue, or you can pay for the additional time required to get it done faster. The government has to pay that worker overtime to do additional work, and if it's that important to Tortosa he should be the one to bear that cost, not the taxpayers.
  - RcouF1uZ4gsC 9y ago
    I am fine with the government charging an expedited fee officially. Individual officials charging expedited fees soon turns to a culture of bribery. Edit: A commenter posted http://sf-fire.org/file/2156 http://sf-fire.org/file/2156 which shows that this is an official policy. I can't edit my parent comment now, but I am fine with this.
- JoeAltmaier 9y ago
  Its called 'contracting' and its a standard practice for engineers. But a fireman tries it - and its wrong?
  - RcouF1uZ4gsC 9y ago
    I doubt engineers are allowed to contract doing their job functions. Saying "Boss, this feature won't be ready for 2 months, but if you also hire me as a contractor with more pay, I could have it done next week" is going to get you fired.z
    - JoeAltmaier 9y ago
      There's no implication the fireman did this during working hours. Nor did they try to contract out to their boss - it was a private citizen. Lost of engineering contractors do work on the side.
hagope 9y ago
Was expecting more of the operational costs of running a restaurant, rent, utilities, food, labor etc. This article focuses on all the stuff he bought to get to day 1...interesting, but not that useful.
- klodolph 9y ago
  Wouldn't the tile for such an article be "what it costs to run a restaurant"?
pg_bot 9y ago
This guy should have hired someone else to design the dining space. There entire experience is disjointed and not appetizing. The walls make me think that there is a plumbing problem from the tenant above, all of the furniture is geometric while the dinnerware is handcrafted and asymmetric. He spent a lot of money custom making chairs that belong in a 60's airport lounge, that all of his friends also dislike. For the amount of money spent, he could have had a beautiful restaurant.
- klodolph 9y ago
  "Lizarraga hand-poured the rose gold resin that drips down the main room walls, a technique she has never used with this medium before." Presumably she will never use that technique with the medium again. A couple golden quotes about the same subject: “I was very excited when the chairs came and then everyone I showed them to hated them. Like everyone. They either hated the color of leather, or they hated the design, or both,” “A lot of people are going to hate the design. It’s not for everyone, and I understand that. But the feeling of the restaurant is so important to me and I wanted to be 100 percent involved in every aspect,” It's not a flattering article... laid bare, it seems to depict a man who obsessed over decisions outside his competency, and paid out the nose for self-indulgent decoration.
  - jjeaff 9y ago
    In a market as competitive as restaurants, I can't help but think that making crazy decisions might be your only way to set yourself apart from the crowd. Having delicious food makes people forgive a lot when it comes to comfort or decor. And just maybe having hideous chairs and walls would help you stand out in the minds of customers.
  - joering2 9y ago
    "But the feeling of the restaurant is so important to me and I wanted to be 100 percent involved in every aspect," I hate to be this guy, but it feels like a perfect #1 example of why startups fail -- he basically designed restaurant for HIMSELF. I honestly wish him good luck of cloning himself 100,000 times and being happy to eat at his own place and pay for each bill to return $700k of initial investment.
obstinate 9y ago
What it costs to open a fancy restaurant with top quality finishes including walls dripped with rose gold resin.
- jpatokal 9y ago
  He spent half a mil on rent, construction, kitchen equipment, permits, etc. Artwork, furniture, plates etc (= the "fancy" stuff) came in at "only" $100k.
  - cassieramen 9y ago
    I can't believe that half the time and about 15% of the budget were all due to permitting delays. That is totally nuts.
    - mahyarm 9y ago
      And you wonder why the rent is expensive
  - briandear 9y ago
    And actually a cheap kitchen since the stove/oven expense at a sushi place is considerably less than it would be at other kinds of restaurants.
  - obstinate 9y ago
    Construction and rent also vary with fanciness. Rent because rent is more expensive in the fancy parts of town. Construction because the quality of finishes is a significant factor in construction costs.
- imron 9y ago
  > including walls dripped with rose gold resin That to be honest looks like someone threw a bucket of paint on the wall and let it all drip down.
klodolph 9y ago
During a team review last year, I remember mentioning that I wasn't "excited" by work per se, but that I didn't expect nor desire excitement from work. For me, books, traveling, and music are exciting, and I get a sense of value and self-worth from the relationships I build with other people. But I work in a big tech firm. A coworker of mine actually questioned whether I was in the right field, saying that a lot of the successful people in our industry are excited by work. I can't remember his exact wording. Maybe I'd be able to work harder if I wrapped my self-worth up in my work, but I saw what that kind of attitude did to my father. He would come home drained and tired, and wouldn't be available during the week to do something like watch a TV show together. On the other hand, my mother had a fulfilling job, but she didn't have the same kind of emotional stake in it. She turned down a promotion because while it would have advanced her career, it wouldn't have served her interests as an individual. "I understand it’s very unhealthy, but I base my self-worth off the success of my job." That's the quote at the bottom of the article. There's a gulf between knowing something is unhealthy and building a healthy life for yourself, something I wish more people would respect.
- JusticeJuice 9y ago
  Honestly, I think it's healthy to not view work as part of yourself - but I think the people who do, know that as well. I've got a job offer for a very nice job, doing software development next month. The pays great, the people, the are great. However, I'm desperately looking for a product design job - because it's 100% my dream. I am fully aware that it's not healthy to tie my self worth to my job, and I should focus on financial stability, and work / life ratio. But i'd just feel so unfulfilled, and at the end of the day, I just can't help it. Being excited to get up in the morning and go to work, also means getting hurt when it goes wrong.
  - klodolph 9y ago
    It's a perfectly valid decision to make, but I have a couple reservations. First, when you say that it's 100% your dream, I can't accept that assertion at face value. Maybe this is cynical on my part, but the fact that your dream lines up so neatly with our cultural definitions of what it means to be successful is too suspicious to be a coincidence. So my cynical take on it would be that much your dream was given to you by other people, and only a small portion of it is truly yours. (There are rabbit holes here, for sure.) My second reservation is that it's meaningless to "accept" that something is unhealthy without a solid understanding of the consequences of unhealthy behavior. I can accept the unhealthy consequences of eating a donut, because they're broadly familiar to me (an expanding waistline, elevated risk of heart disease in my future). I know people who have had heart attacks, I know people who are too heavy to comfortably hike the trails I love. But it's meaningless to accept that pouring yourself into your work is unhealthy unless you understand what the consequences are. I have friends who can barely enjoy being retired, even though they didn't really "enjoy" working, either. I have friends who have been depressed and unable to enjoy life for months after project failures. And I know people who have had panic attacks at school or work, panic attacks bad enough to call an ambulance. There is no definition of free will that everyone can agree on, but in my book, understanding the consequences of our actions, and the ability to change our decisions as our understanding of consequences changes, are requirements for exercising free will.
jpatokal 9y ago
There's a menu here: https://sf.eater.com/2017/6/23/15864260/robin-sushi-menu-hayes-valley-san-francisco https://sf.eater.com/2017/6/23/15864260/robin-sushi-menu-hay... Omakase courses $79-$179. The profit margin of a successful restaurant is around 5%, so he's going to need >100,000 customers at $100/head just to pay off the $700k he's put in.
- nstj 9y ago
  Pretty much hit the nail on the head. So many restaurants are funded with little regard for profit (backers provide capital for vanity, amongst other non-profit related reasons) which makes financial success in the field rather difficult.
- bookmarkacc 9y ago
  He has only put in 300k through his family. The rest are friends and invests he could lose.
  - readams 9y ago
    It's more or less certain that his investors have the most senior shares and get paid first.
- maxxxxx 9y ago
  Is the margin that thin even in that price range? I would think the 5% number is for cheaper restaurants but not for higher prices ones.
  - ryanworl 9y ago
    The most profitable restaurants are typically the ones with cheap food. It is counterintuitive, but true.
    - steve_b 9y ago
      Profit and margin aren't the same thing though.
clamprecht 9y ago
Does anyone know: What kind of numbers (revenue, expenses, profits) are typical for a medium-successful restaurant of this size in SF? I'm just curious. I know zero about the restaurant business, except that I've heard that the failure rate is high.
- deleted 9y ago
  [deleted]
paulsutter 9y ago
The best starter restaurant is those little lunch places with no seating: just a counter and a long line, you see them around downtown. Less risk on many levels. Every desk in those office towers is a person who needs to get lunch. A friend in the business says that's usually the second restaurant business someone opens.
- irrational 9y ago
  >Every desk in those office towers is a person who needs to get lunch. Do you have any insight into why so many people buy lunch instead of bringing it? I've had a desk job for about 20 years now and I think I've bought lunch maybe 10 times when for some reason I wasn't able to make my lunch that day. It seems to me that buying lunch is more expensive and a person will probably eat more calories. I can't imagine it is a time issue, I probably spend less than 5 minutes putting a lunch together every day. That is far less than the time required to go somewhere for lunch. I assume it also isn't an issue of wanting to get away from the desk - most office places I've seen have lots of places a person can go and eat.
  - nstj 9y ago
    Socialisation is a big part of it - going as a team to grab lunch from a specific place; I'm sure there are plenty of anthropological studies on groups sharing food as part of bonding etc.
  - bookmarkacc 9y ago
    If you work downtown SF you are likely making 80-100k and have a bit of disposable income that you can spend socializing with other people while eating out.
  - cm2012 9y ago
    At least to my palette, whatever I can buy is going to be tastier than what I can make. It's also fun to spend money on things and get out of the office.
    - 9y ago
prawn 9y ago
This sounds like an opportunity along the lines of @pud's DistroKid: "By paying a company $5,000 to secure his beer-and-wine license, Tortosa was able to skip the work himself of that particularly involved process, which includes minutiae like mailing notices to every single resident within 500 feet of the restaurant. For Robin, the company mailed out 586 notices."
- smelendez 9y ago
  It's hard to scale, liquor license rules vary a ton from city to city and state to state, and many jurisdictions personal connections matter a great deal.(Not to mention out and out corruption). And some cities have a license cap, so you have to know of someone who's selling an existing license to even be able to bid on one. Plus you have to deal with the fact that some of those residents might actually object to your business opening. Even if they don't, your company probably still needs somebody who can show up at a meeting, greet the people in power by name and convincingly reassure everyone you're not secretly trying to open a nightclub and pretending it's a sushi spot.
seibelj 9y ago
Hearing all about dealing with the government permitting process and government workers made me so mad. Government should help business, not get in its way.
- branchless 9y ago
  Yet nobody mentions the far higher rent.
  - seibelj 9y ago
    The rent is an entirely separate issue. The delays with permitting and the 14 different departments can be solved without dealing with the highly complex issues surrounding high rent.
    - branchless 9y ago
      Yet once the restaurant is in place the rent continues month after month, year after year. The permit delays / fees are less pernicious. And less $$.
shash7 9y ago
I think those gold stained resin walls look great, however it also depends on the background wall color. If they don't keep the wall clean enough, those stains would look cheap. Honestly I'm excited by the crockery and interiors. The chairs don't look comfortable but I would give this restaurant a shot. What I don't understand is the overzealous budget Mr Tortosa has in this project. In my opinion it would be wiser to spend a lot less on the restaurant and slowly upgrade it over the next couple of months or years. Also, by the looks of it they could have easily shaved off couple of 10 grand just by properly planning and anticipating the license wait period.
jjeaff 9y ago
"A fire department permit worker told Tortosa that it would take him two to four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of overtime with a four-hour minimum), Tortosa could pay for him to look at it right now." Can someone please explain to me how this isn't extortion and bribery?
- phonon 9y ago
  The SFPD would be happy to look into it in two to four weeks... or for $536 ($134 per hour of overtime with a four-hour minimum), they can look at it right now... /s
- techsupporter 9y ago
  > Can someone please explain to me how this isn't extortion and bribery? Easy: it's part of the "pay per use" idea that a lot of people seem to think that government should have. Just like express toll lanes or a $7 express bus along side a $3.25 local with three times as many stops, if you want something and don't care how long it takes, choose the low- or no-cost option. If you want it RIGHT DANG NOW, choose the high-cost option. It's not bribery, it's just business...and people seem to think that government should operate like a business, so we get this fee-for-service setup.
  - nickthemagicman 9y ago
    Well then there should be competition. Lol. We could write software that would probably handle that way more efficiently.
    - chillydawg 9y ago
      And it would never get deployed as you'd get union'd into nothingness.
  - curiousgal 9y ago
    >It's just business It would be that if your tax money wasn't already paying for the guy's job. I see it as blatant bribery.
angersock 9y ago
A more interesting read is the continuing trials and tribulations of DNA Lounge, DNA Pizza, and the (now defunct) Codeword. Seeing the city of SF totally fuck up over and over on things as simple as "when is the street outside going to be under construction" is absurd.
elchief 9y ago
I'm a programmerby trade, but I own a restaurant in Vancouver. A friend owns 3. Several other friends own several other restaurants. It's a restaurant town. Anyways, it costs from about $50,000 to $1,000,000 depending on the brand and the size of the room. Averaging around 100k for a non mom-n-pop sit-down place Mine was about $40k, but it's tiny Boneta (which was award-winning and loved) was cheap at around $70k A big Boston Pizza, which is not a great place to eat, is gonna cost $200k+ or so, and a big Cactus Club could hit a mil A higher price doesn't mean a better restaurant. In fact, I'd say a strict budget can make it more appealing due to creativity
- Maven911 9y ago
  May I ask about ROI and profit margin for the restaurant business?
  - elchief 9y ago
    If you make it, you make it big. My place makes $1M in revenue and ~10% profit But if you don't blow up, the rent will kill you. My friend ran a good place, but it wasn't busy enough to pay the $30k/month rent
    - toomuchtodo 9y ago
      You mention it only cost you 40k to get started; how long did it take to reach $1MM in revenue/10% profits?
      - elchief 9y ago
        We did that in our 3rd year
        rootsudo 9y ago
        Is 10% profit considered good? That seems to be a lot of work to just net 100k. Is that net and your take home?
cryptozeus 9y ago
Tl;dr Amount Spent to Date: $701,095 Final total: $701,095
3dm0nd 9y ago
All of that $ and a shit website, http://robinsanfrancisco.com/ http://robinsanfrancisco.com/, that has poor on-page and off-page SEO...
- curiousgal 9y ago
  Ugh http://robinsanfrancisco.com/img/ http://robinsanfrancisco.com/img/
  - pc86 9y ago
    PDFs in the img directory makes me sad.
justin_vanw 9y ago
Wow, this is like a how to guide on how to not run a business. Raise a bunch of cash, go into a location that has so much wrong with it, blow literally all the cash plus $1k just setting up furniture and permits... Why wouldn't you find a restaurant that just went under and buy out the lease? Take over the kitchen in place (buying the equipment from the bankrupt owner who just wants out), do a revamp on the sitting area, and spend pennies on the dollar compared to this? Added advantage that all the zoning and permits are already complete?
- Mikeb85 9y ago
  Despite what you've probably heard, restaurants actually fail far less than other types of start up businesses. In a booming economy there will be very few built out restaurants available to buy, and they'll probably have some sort of fatal flaw. Plus, you get TI money if you take over an empty space, and as you can build out how you want, the rewards are potentially better too.
  - justin_vanw 9y ago
    Restaurants may fail less often than other startups, but the potential upside is microscopic compared to other startup type businesses. Restaurants are the opposite of scalable: costs scale basically linearly with revenue, but worse complexity of managing the business scales not linearly, but still very poorly with revenue.
HappyTypist 9y ago
If you're looking for a chart of the breakdown, I made one with Canva here: http://i.imgur.com/nK56ERu.jpg http://i.imgur.com/nK56ERu.jpg
- curiousgal 9y ago
  I would've considered a different color palette.
deleted 9y ago
[deleted]
gorkemyurt 9y ago
He doesnt even have a full bar, that would have been another 300k for the full bar alcohol license.. Restaurant looks amazing, just the right location. I think he is going to make a killing.
briandear 9y ago
Delayed because of a permit application’s font size? Is there a regulation on the proper font specifications? Why do people tolerate this kind of government? It seems like this ridiculously Byzantine process is filled with too much discretionary power, ripe for abuse. On another note, why is paper being used at all?
kelnos 9y ago
This should be titled "What it Cost to Open My Restaurant in San Francisco". Costs are ridiculously variable in SF, depending your location and what kind of restaurant you build. A couple years ago I invested in a new restaurant in SF. I believe the total amount spent as of opening ended up around $400k, maybe a little more. Sadly, it folded after about a year. Restaurants are difficult, especially in a hyper-competitive market like SF. I probably wouldn't invest in one again, even if it was being built by a team with previous restaurant successes. There are just too many variables, and SF is over-saturated with restaurants.
shalmanese 9y ago
For another, IMO much more interesting take on the nitty gritty of opening a restaurant from scratch, Serious Eats had a series from Tyson Ho on opening his Brooklyn BBQ restaurant Arrogant Swine: http://www.seriouseats.com/building-a-bbq-restaurant http://www.seriouseats.com/building-a-bbq-restaurant
tim333 9y ago
I chatted to a guy from Chicago who'd opened a successful rib place in Saigon. Apparently it would cost over $1m, which he couldn't afford, to do in Chicago but cost $30k in Saigon. Not that operating in Vietnam is without it's difficulties.

153 points by NaOH 9y ago

>A fire department permit worker told Tortosa that it would take him two to four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of overtime with a four-hour minimum), Tortosa could pay for him to look at it right now. This makes me very angry. This is approaching the corruption say in India that Modi is trying to get rid of where every local official requires a bribe for them to do their job. I hope this kind of behavior is severely punished.

pc86 9y ago
It's a pretty standard practice. You can wait the standard amount of time for the work to be done in queue, or you can pay for the additional time required to get it done faster. The government has to pay that worker overtime to do additional work, and if it's that important to Tortosa he should be the one to bear that cost, not the taxpayers.
- RcouF1uZ4gsC 9y ago
  I am fine with the government charging an expedited fee officially. Individual officials charging expedited fees soon turns to a culture of bribery. Edit: A commenter posted http://sf-fire.org/file/2156 http://sf-fire.org/file/2156 which shows that this is an official policy. I can't edit my parent comment now, but I am fine with this.
JoeAltmaier 9y ago
Its called 'contracting' and its a standard practice for engineers. But a fireman tries it - and its wrong?
- RcouF1uZ4gsC 9y ago
  I doubt engineers are allowed to contract doing their job functions. Saying "Boss, this feature won't be ready for 2 months, but if you also hire me as a contractor with more pay, I could have it done next week" is going to get you fired.z
  - JoeAltmaier 9y ago
    There's no implication the fireman did this during working hours. Nor did they try to contract out to their boss - it was a private citizen. Lost of engineering contractors do work on the side.

hagope 9y ago

Was expecting more of the operational costs of running a restaurant, rent, utilities, food, labor etc. This article focuses on all the stuff he bought to get to day 1...interesting, but not that useful.

klodolph 9y ago
Wouldn't the tile for such an article be "what it costs to run a restaurant"?

pg_bot 9y ago

This guy should have hired someone else to design the dining space. There entire experience is disjointed and not appetizing. The walls make me think that there is a plumbing problem from the tenant above, all of the furniture is geometric while the dinnerware is handcrafted and asymmetric. He spent a lot of money custom making chairs that belong in a 60's airport lounge, that all of his friends also dislike. For the amount of money spent, he could have had a beautiful restaurant.

klodolph 9y ago
"Lizarraga hand-poured the rose gold resin that drips down the main room walls, a technique she has never used with this medium before." Presumably she will never use that technique with the medium again. A couple golden quotes about the same subject: “I was very excited when the chairs came and then everyone I showed them to hated them. Like everyone. They either hated the color of leather, or they hated the design, or both,” “A lot of people are going to hate the design. It’s not for everyone, and I understand that. But the feeling of the restaurant is so important to me and I wanted to be 100 percent involved in every aspect,” It's not a flattering article... laid bare, it seems to depict a man who obsessed over decisions outside his competency, and paid out the nose for self-indulgent decoration.
- jjeaff 9y ago
  In a market as competitive as restaurants, I can't help but think that making crazy decisions might be your only way to set yourself apart from the crowd. Having delicious food makes people forgive a lot when it comes to comfort or decor. And just maybe having hideous chairs and walls would help you stand out in the minds of customers.
- joering2 9y ago
  "But the feeling of the restaurant is so important to me and I wanted to be 100 percent involved in every aspect," I hate to be this guy, but it feels like a perfect #1 example of why startups fail -- he basically designed restaurant for HIMSELF. I honestly wish him good luck of cloning himself 100,000 times and being happy to eat at his own place and pay for each bill to return $700k of initial investment.

obstinate 9y ago

What it costs to open a fancy restaurant with top quality finishes including walls dripped with rose gold resin.

jpatokal 9y ago
He spent half a mil on rent, construction, kitchen equipment, permits, etc. Artwork, furniture, plates etc (= the "fancy" stuff) came in at "only" $100k.
- cassieramen 9y ago
  I can't believe that half the time and about 15% of the budget were all due to permitting delays. That is totally nuts.
  - mahyarm 9y ago
    And you wonder why the rent is expensive
- briandear 9y ago
  And actually a cheap kitchen since the stove/oven expense at a sushi place is considerably less than it would be at other kinds of restaurants.
- obstinate 9y ago
  Construction and rent also vary with fanciness. Rent because rent is more expensive in the fancy parts of town. Construction because the quality of finishes is a significant factor in construction costs.
imron 9y ago
> including walls dripped with rose gold resin That to be honest looks like someone threw a bucket of paint on the wall and let it all drip down.

klodolph 9y ago

During a team review last year, I remember mentioning that I wasn't "excited" by work per se, but that I didn't expect nor desire excitement from work. For me, books, traveling, and music are exciting, and I get a sense of value and self-worth from the relationships I build with other people. But I work in a big tech firm. A coworker of mine actually questioned whether I was in the right field, saying that a lot of the successful people in our industry are excited by work. I can't remember his exact wording. Maybe I'd be able to work harder if I wrapped my self-worth up in my work, but I saw what that kind of attitude did to my father. He would come home drained and tired, and wouldn't be available during the week to do something like watch a TV show together. On the other hand, my mother had a fulfilling job, but she didn't have the same kind of emotional stake in it. She turned down a promotion because while it would have advanced her career, it wouldn't have served her interests as an individual. "I understand it’s very unhealthy, but I base my self-worth off the success of my job." That's the quote at the bottom of the article. There's a gulf between knowing something is unhealthy and building a healthy life for yourself, something I wish more people would respect.

JusticeJuice 9y ago
Honestly, I think it's healthy to not view work as part of yourself - but I think the people who do, know that as well. I've got a job offer for a very nice job, doing software development next month. The pays great, the people, the are great. However, I'm desperately looking for a product design job - because it's 100% my dream. I am fully aware that it's not healthy to tie my self worth to my job, and I should focus on financial stability, and work / life ratio. But i'd just feel so unfulfilled, and at the end of the day, I just can't help it. Being excited to get up in the morning and go to work, also means getting hurt when it goes wrong.
- klodolph 9y ago
  It's a perfectly valid decision to make, but I have a couple reservations. First, when you say that it's 100% your dream, I can't accept that assertion at face value. Maybe this is cynical on my part, but the fact that your dream lines up so neatly with our cultural definitions of what it means to be successful is too suspicious to be a coincidence. So my cynical take on it would be that much your dream was given to you by other people, and only a small portion of it is truly yours. (There are rabbit holes here, for sure.) My second reservation is that it's meaningless to "accept" that something is unhealthy without a solid understanding of the consequences of unhealthy behavior. I can accept the unhealthy consequences of eating a donut, because they're broadly familiar to me (an expanding waistline, elevated risk of heart disease in my future). I know people who have had heart attacks, I know people who are too heavy to comfortably hike the trails I love. But it's meaningless to accept that pouring yourself into your work is unhealthy unless you understand what the consequences are. I have friends who can barely enjoy being retired, even though they didn't really "enjoy" working, either. I have friends who have been depressed and unable to enjoy life for months after project failures. And I know people who have had panic attacks at school or work, panic attacks bad enough to call an ambulance. There is no definition of free will that everyone can agree on, but in my book, understanding the consequences of our actions, and the ability to change our decisions as our understanding of consequences changes, are requirements for exercising free will.

jpatokal 9y ago

There's a menu here: https://sf.eater.com/2017/6/23/15864260/robin-sushi-menu-hayes-valley-san-francisco https://sf.eater.com/2017/6/23/15864260/robin-sushi-menu-hay... Omakase courses $79-$179. The profit margin of a successful restaurant is around 5%, so he's going to need >100,000 customers at $100/head just to pay off the $700k he's put in.

nstj 9y ago
Pretty much hit the nail on the head. So many restaurants are funded with little regard for profit (backers provide capital for vanity, amongst other non-profit related reasons) which makes financial success in the field rather difficult.
bookmarkacc 9y ago
He has only put in 300k through his family. The rest are friends and invests he could lose.
- readams 9y ago
  It's more or less certain that his investors have the most senior shares and get paid first.
maxxxxx 9y ago
Is the margin that thin even in that price range? I would think the 5% number is for cheaper restaurants but not for higher prices ones.
- ryanworl 9y ago
  The most profitable restaurants are typically the ones with cheap food. It is counterintuitive, but true.
  - steve_b 9y ago
    Profit and margin aren't the same thing though.

clamprecht 9y ago

Does anyone know: What kind of numbers (revenue, expenses, profits) are typical for a medium-successful restaurant of this size in SF? I'm just curious. I know zero about the restaurant business, except that I've heard that the failure rate is high.

deleted 9y ago
[deleted]

paulsutter 9y ago

The best starter restaurant is those little lunch places with no seating: just a counter and a long line, you see them around downtown. Less risk on many levels. Every desk in those office towers is a person who needs to get lunch. A friend in the business says that's usually the second restaurant business someone opens.

irrational 9y ago
>Every desk in those office towers is a person who needs to get lunch. Do you have any insight into why so many people buy lunch instead of bringing it? I've had a desk job for about 20 years now and I think I've bought lunch maybe 10 times when for some reason I wasn't able to make my lunch that day. It seems to me that buying lunch is more expensive and a person will probably eat more calories. I can't imagine it is a time issue, I probably spend less than 5 minutes putting a lunch together every day. That is far less than the time required to go somewhere for lunch. I assume it also isn't an issue of wanting to get away from the desk - most office places I've seen have lots of places a person can go and eat.
- nstj 9y ago
  Socialisation is a big part of it - going as a team to grab lunch from a specific place; I'm sure there are plenty of anthropological studies on groups sharing food as part of bonding etc.
- bookmarkacc 9y ago
  If you work downtown SF you are likely making 80-100k and have a bit of disposable income that you can spend socializing with other people while eating out.
- cm2012 9y ago
  At least to my palette, whatever I can buy is going to be tastier than what I can make. It's also fun to spend money on things and get out of the office.
  - 9y ago

prawn 9y ago

This sounds like an opportunity along the lines of @pud's DistroKid: "By paying a company $5,000 to secure his beer-and-wine license, Tortosa was able to skip the work himself of that particularly involved process, which includes minutiae like mailing notices to every single resident within 500 feet of the restaurant. For Robin, the company mailed out 586 notices."

smelendez 9y ago
It's hard to scale, liquor license rules vary a ton from city to city and state to state, and many jurisdictions personal connections matter a great deal.(Not to mention out and out corruption). And some cities have a license cap, so you have to know of someone who's selling an existing license to even be able to bid on one. Plus you have to deal with the fact that some of those residents might actually object to your business opening. Even if they don't, your company probably still needs somebody who can show up at a meeting, greet the people in power by name and convincingly reassure everyone you're not secretly trying to open a nightclub and pretending it's a sushi spot.

seibelj 9y ago

Hearing all about dealing with the government permitting process and government workers made me so mad. Government should help business, not get in its way.

branchless 9y ago
Yet nobody mentions the far higher rent.
- seibelj 9y ago
  The rent is an entirely separate issue. The delays with permitting and the 14 different departments can be solved without dealing with the highly complex issues surrounding high rent.
  - branchless 9y ago
    Yet once the restaurant is in place the rent continues month after month, year after year. The permit delays / fees are less pernicious. And less $$.

shash7 9y ago

I think those gold stained resin walls look great, however it also depends on the background wall color. If they don't keep the wall clean enough, those stains would look cheap. Honestly I'm excited by the crockery and interiors. The chairs don't look comfortable but I would give this restaurant a shot. What I don't understand is the overzealous budget Mr Tortosa has in this project. In my opinion it would be wiser to spend a lot less on the restaurant and slowly upgrade it over the next couple of months or years. Also, by the looks of it they could have easily shaved off couple of 10 grand just by properly planning and anticipating the license wait period.

jjeaff 9y ago

"A fire department permit worker told Tortosa that it would take him two to four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of overtime with a four-hour minimum), Tortosa could pay for him to look at it right now." Can someone please explain to me how this isn't extortion and bribery?

phonon 9y ago
The SFPD would be happy to look into it in two to four weeks... or for $536 ($134 per hour of overtime with a four-hour minimum), they can look at it right now... /s
techsupporter 9y ago
> Can someone please explain to me how this isn't extortion and bribery? Easy: it's part of the "pay per use" idea that a lot of people seem to think that government should have. Just like express toll lanes or a $7 express bus along side a $3.25 local with three times as many stops, if you want something and don't care how long it takes, choose the low- or no-cost option. If you want it RIGHT DANG NOW, choose the high-cost option. It's not bribery, it's just business...and people seem to think that government should operate like a business, so we get this fee-for-service setup.
- nickthemagicman 9y ago
  Well then there should be competition. Lol. We could write software that would probably handle that way more efficiently.
  - chillydawg 9y ago
    And it would never get deployed as you'd get union'd into nothingness.
- curiousgal 9y ago
  >It's just business It would be that if your tax money wasn't already paying for the guy's job. I see it as blatant bribery.

angersock 9y ago

A more interesting read is the continuing trials and tribulations of DNA Lounge, DNA Pizza, and the (now defunct) Codeword. Seeing the city of SF totally fuck up over and over on things as simple as "when is the street outside going to be under construction" is absurd.

elchief 9y ago

I'm a programmerby trade, but I own a restaurant in Vancouver. A friend owns 3. Several other friends own several other restaurants. It's a restaurant town. Anyways, it costs from about $50,000 to $1,000,000 depending on the brand and the size of the room. Averaging around 100k for a non mom-n-pop sit-down place Mine was about $40k, but it's tiny Boneta (which was award-winning and loved) was cheap at around $70k A big Boston Pizza, which is not a great place to eat, is gonna cost $200k+ or so, and a big Cactus Club could hit a mil A higher price doesn't mean a better restaurant. In fact, I'd say a strict budget can make it more appealing due to creativity

Maven911 9y ago
May I ask about ROI and profit margin for the restaurant business?
- elchief 9y ago
  If you make it, you make it big. My place makes $1M in revenue and ~10% profit But if you don't blow up, the rent will kill you. My friend ran a good place, but it wasn't busy enough to pay the $30k/month rent
  - toomuchtodo 9y ago
    You mention it only cost you 40k to get started; how long did it take to reach $1MM in revenue/10% profits?
    - elchief 9y ago
      We did that in our 3rd year
      - rootsudo 9y ago
        Is 10% profit considered good? That seems to be a lot of work to just net 100k. Is that net and your take home?

cryptozeus 9y ago

Tl;dr Amount Spent to Date: $701,095 Final total: $701,095

3dm0nd 9y ago

All of that $ and a shit website, http://robinsanfrancisco.com/ http://robinsanfrancisco.com/, that has poor on-page and off-page SEO...

curiousgal 9y ago
Ugh http://robinsanfrancisco.com/img/ http://robinsanfrancisco.com/img/
- pc86 9y ago
  PDFs in the img directory makes me sad.

justin_vanw 9y ago

Wow, this is like a how to guide on how to not run a business. Raise a bunch of cash, go into a location that has so much wrong with it, blow literally all the cash plus $1k just setting up furniture and permits... Why wouldn't you find a restaurant that just went under and buy out the lease? Take over the kitchen in place (buying the equipment from the bankrupt owner who just wants out), do a revamp on the sitting area, and spend pennies on the dollar compared to this? Added advantage that all the zoning and permits are already complete?

Mikeb85 9y ago
Despite what you've probably heard, restaurants actually fail far less than other types of start up businesses. In a booming economy there will be very few built out restaurants available to buy, and they'll probably have some sort of fatal flaw. Plus, you get TI money if you take over an empty space, and as you can build out how you want, the rewards are potentially better too.
- justin_vanw 9y ago
  Restaurants may fail less often than other startups, but the potential upside is microscopic compared to other startup type businesses. Restaurants are the opposite of scalable: costs scale basically linearly with revenue, but worse complexity of managing the business scales not linearly, but still very poorly with revenue.

HappyTypist 9y ago

If you're looking for a chart of the breakdown, I made one with Canva here: http://i.imgur.com/nK56ERu.jpg http://i.imgur.com/nK56ERu.jpg

curiousgal 9y ago
I would've considered a different color palette.

deleted 9y ago

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gorkemyurt 9y ago

He doesnt even have a full bar, that would have been another 300k for the full bar alcohol license.. Restaurant looks amazing, just the right location. I think he is going to make a killing.

briandear 9y ago

Delayed because of a permit application’s font size? Is there a regulation on the proper font specifications? Why do people tolerate this kind of government? It seems like this ridiculously Byzantine process is filled with too much discretionary power, ripe for abuse. On another note, why is paper being used at all?

kelnos 9y ago

This should be titled "What it Cost to Open My Restaurant in San Francisco". Costs are ridiculously variable in SF, depending your location and what kind of restaurant you build. A couple years ago I invested in a new restaurant in SF. I believe the total amount spent as of opening ended up around $400k, maybe a little more. Sadly, it folded after about a year. Restaurants are difficult, especially in a hyper-competitive market like SF. I probably wouldn't invest in one again, even if it was being built by a team with previous restaurant successes. There are just too many variables, and SF is over-saturated with restaurants.

shalmanese 9y ago

For another, IMO much more interesting take on the nitty gritty of opening a restaurant from scratch, Serious Eats had a series from Tyson Ho on opening his Brooklyn BBQ restaurant Arrogant Swine: http://www.seriouseats.com/building-a-bbq-restaurant http://www.seriouseats.com/building-a-bbq-restaurant

tim333 9y ago

I chatted to a guy from Chicago who'd opened a successful rib place in Saigon. Apparently it would cost over $1m, which he couldn't afford, to do in Chicago but cost $30k in Saigon. Not that operating in Vietnam is without it's difficulties.