12 ms·

Thanks to Wall Street, There May Be Too Many Restaurants

39 points by ilamont 9y ago

tmaly 9y ago
even with too many choices to eat, there will still be some restaurants that make a particular dish better than others. finding those is the problem I hope to solve with my side project https://bestfoodnearme.com https://bestfoodnearme.com
- pc86 9y ago
  Spam.
goialoq 9y ago
Ha, this is the same story as the pre-Depression-era farmers who mortgaged their farms. Our food providers are burying themselves in debt to create our food, and banks are laughing all the way to themselves.
freeone3000 9y ago
Oh no! Investment in restaurants, which are profitable, will continue until restaurants are no longer profitable to invest in!
- thriftwy 9y ago
  And then they would come for their state subsidies.
- dmreedy 9y ago
  It's easy to look at the raw numbers analysis and admire the invisible hand of the market guiding the economy down the middle line through an endless trail of pendulum swings. This abstraction ignores the raw human cost. These shifts ruin the people, the actual implementers of the economy.
  - racer-v 9y ago
    If it were true that people are "ruined" because they were involved in a failed business, capitalism couldn't work. The rule is the same for any system: don't risk more than you can afford to lose. Plenty of people recover from a failed business and either start another or do something else with their lives.
    - Sangermaine 9y ago
      >If it were true that people are "ruined" because they were involved in a failed business, capitalism couldn't work. You must be very young or very naive. People are ruined by failed businesses all the time. The thing you're missing is that the people continuing the churn of business creation are not the same ones who were ruined by it. If you seriously think there is no human cost when businesses fail you're simply delusional.
      - true_religion 9y ago
        I think you are reading the comment too literally. It's a generalism. If (everyone) were ruined by a failed business, capitalism wouldn't work (the way it currently does). Theoretically, if you fail at business, you are allowed to try again and again until you succeed. The consequence of repeated failure isn't so harsh that it's a once in a life-time shot.
        AstralStorm 9y ago
        Very theoretically. Typically a medium or small business owner is bankrupt forever. This is why people gamble with VC money.
      - racer-v 9y ago
        If you seriously think there is no human cost when businesses fail you're simply delusional. There's a human cost, but your life isn't over because your business fails. I used to wonder how investors could throw themselves out of 10th floor windows after finding their shares had become worthless, whereas other folks who never owned any stock feel great. The delusion is attaching your sense of self-worth to your balance sheet. Also for future reference, your post is a rude ad-hominem attack defending a straw-man argument. If you have something to contribute, please don't mask it with hostility.
tonyedgecombe 9y ago
I don't understand why people take on a franchise, it appears to be the worst of both worlds to me.
- Cacti 9y ago
  It's dependable.
- oh_sigh 9y ago
  Customers know the name/quality, and you're provided support and advice from the franchiser to help grow your business.
- blang 9y ago
  I would guess pooling of resources for marketing, supply chain, and name recognition would all seem like upside for franchises. Though it does seem like being a franchisee does come with a lot of baggage. Though I've never try to run a restaurant either solo or as a franchise, so this is clearly all speculation.
- replicatorblog 9y ago
  When talking about high-quality franchises, it's a useful vehicle for people whose talent is in recruiting/managing a low-skill workforce and promoting a business within their community. Also, high-net worth people looking for stable businesses. I get how it could seem terribly boring to a creative person, but it seems to function a bit like an annuity. This article is a good overview of who franchises appeal to (and why): https://www.bostonglobe.com/magazine/2014/09/17/the-secret-world-dunkin-donuts-franchise-kings/pb2UmxauJrZv08wcBig6CO/story.html https://www.bostonglobe.com/magazine/2014/09/17/the-secret-w... This class of trade is impressive because you need to have several million dollars of liquid wealth to get started. There's a whole other class of franchises which are basically built to bilk the aspiring middle class and charge $30-100K for nebulous advice and marked-up equipment but provide almost no national brand appeal or product development. E.g. almost every frozen yogurt franchise that has sprung up in the last 5-10 years.
  - gnarcoregrizz 9y ago
AJ007 9y ago
Amazing how basically all of these restaurants are complete crap. NYC is the only place I can travel and daily eat as healthy as if I am at home.
- ballenf 9y ago
  I share your frustration living in suburban America and not a trendy suburb. Every time a new restaurant breaks ground I get excited for the chance of something not fried being the main attraction. I haven't been not disappointed in 8 years. I don't really blame the franchisers as much as I blame my neighbors, but I do blame both a little. Here's a great movie that I loved on the subject: https://en.wikipedia.org/wiki/Branded_(2012_film) https://en.wikipedia.org/wiki/Branded_(2012_film)
  - pm90 9y ago
    What surprises me is just how accepting and tolerant most Americans are to what is really unhealthy and disgusting food. Is it just that these foods are cheap? I'm not sure if this has something to do with the building codes in suburbia that require a sprawling parking lots for every restaurant. In South Korea, for instance, there are mom and pop restaurants in every city that serve fresh, delicious food (chain restaurants do exist, but are not as common).
    - humanrebar 9y ago
      > I'm not sure if this has something to do with the building codes in suburbia that require a sprawling parking lots for every restaurant Americans drive themselves around a lot, both for work and for other reasons. When you're looking for something particular or easy, it helps to find a chain location you've had consistent success at. My theory is that something like Yelp (but with less work to use) would help disrupt this quite a bit. Perhaps Yelp has already helped a bit. I know I've gone to some local places I wouldn't have otherwise because they've had good ratings.
    - bllguo 9y ago
      Marketing and that they grew up with it? I don't know. My perception is that foods that are viewed as quintessentially American are almost all unhealthy. Burgers and fries, steak, bbq, fried stuff, mac and cheese, and hot dogs are the first to come to mind. It's what people grow up with and it's glorified in media for being "American" despite any health concerns. After all, most people like fried foods and meat and things that are, strictly speaking, unhealthy. But historically they've been rarer. Meat is still kind of a luxury in rural China, for example.
cat199 9y ago
But how else will we create new 'up and coming' neighborhoods to increase the price of mortgages?
bmmayer1 9y ago
I honestly don't know why anyone takes the New York Times seriously anymore. They so obviously have an editorial agenda that even in their ostensibly 'objective' reporting they can't hide it. Yes, there will always be stories of businesspeople failing to grow businesses, and losing their savings doing so. And the story of investors over-extending into a market is as old as time. One would think that the flow of cheap money from Wall Street to Main Street would be celebrated. But, leave it to the NYT to never pass up an opportunity to vilify Wall Street. Of course, if private investors on Wall Street invested in regional mom-and-pop health-conscious juice bars and eateries and lost their shirts, the headline in the New York Times would be "Wall Street gambles Americans' hard earned retirement savings on uncertain business models."
- humanrebar 9y ago
  > ...leave it to the NYT to never pass up an opportunity to vilify Wall Street... ...while endorsing big Wall Street allies like Charles Schumer. https://www.nytimes.com/2016/10/29/opinion/endorsements-in-new-york-and-new-jersey.html https://www.nytimes.com/2016/10/29/opinion/endorsements-in-n...
jldugger 9y ago
So.... we're in a food bubble?
cjlars 9y ago
I don't think any of this is new. My dad owned a restaurant over thirty years ago and has talked bad about them (as business investments) ever since. Restaurants have a number of characteristics that indicate they should be poor investments vs other types of small businesses. Here's a few, none of which require wall street's involvement: -They're cool. Who doesn't want to own one? I'd love to own a bar if I thought I could make money in the game. -They're visible. Everyone eats at restaurants, and in fact, a lot of people sit around in restaurants talking about what sort of business to start. -They have good perks. Free beer anyone? -They're familiar. I mean, things turn out pretty good when I BBQ, right? -They're (relatively) cheap to get into. If the minimum is $100k instead of $1M, you'll have more competition. When it comes to small business, look for the opposite of all of those. The more obscure, boring and downright unappealing the better.

39 points by ilamont 9y ago

even with too many choices to eat, there will still be some restaurants that make a particular dish better than others. finding those is the problem I hope to solve with my side project https://bestfoodnearme.com https://bestfoodnearme.com

pc86 9y ago
Spam.

goialoq 9y ago

Ha, this is the same story as the pre-Depression-era farmers who mortgaged their farms. Our food providers are burying themselves in debt to create our food, and banks are laughing all the way to themselves.

freeone3000 9y ago

Oh no! Investment in restaurants, which are profitable, will continue until restaurants are no longer profitable to invest in!

thriftwy 9y ago
And then they would come for their state subsidies.
dmreedy 9y ago
It's easy to look at the raw numbers analysis and admire the invisible hand of the market guiding the economy down the middle line through an endless trail of pendulum swings. This abstraction ignores the raw human cost. These shifts ruin the people, the actual implementers of the economy.
- racer-v 9y ago
  If it were true that people are "ruined" because they were involved in a failed business, capitalism couldn't work. The rule is the same for any system: don't risk more than you can afford to lose. Plenty of people recover from a failed business and either start another or do something else with their lives.
  - Sangermaine 9y ago
    >If it were true that people are "ruined" because they were involved in a failed business, capitalism couldn't work. You must be very young or very naive. People are ruined by failed businesses all the time. The thing you're missing is that the people continuing the churn of business creation are not the same ones who were ruined by it. If you seriously think there is no human cost when businesses fail you're simply delusional.
    - true_religion 9y ago
      I think you are reading the comment too literally. It's a generalism. If (everyone) were ruined by a failed business, capitalism wouldn't work (the way it currently does). Theoretically, if you fail at business, you are allowed to try again and again until you succeed. The consequence of repeated failure isn't so harsh that it's a once in a life-time shot.
      - AstralStorm 9y ago
        Very theoretically. Typically a medium or small business owner is bankrupt forever. This is why people gamble with VC money.
    - racer-v 9y ago
      If you seriously think there is no human cost when businesses fail you're simply delusional. There's a human cost, but your life isn't over because your business fails. I used to wonder how investors could throw themselves out of 10th floor windows after finding their shares had become worthless, whereas other folks who never owned any stock feel great. The delusion is attaching your sense of self-worth to your balance sheet. Also for future reference, your post is a rude ad-hominem attack defending a straw-man argument. If you have something to contribute, please don't mask it with hostility.

tonyedgecombe 9y ago

I don't understand why people take on a franchise, it appears to be the worst of both worlds to me.

Cacti 9y ago
It's dependable.
oh_sigh 9y ago
Customers know the name/quality, and you're provided support and advice from the franchiser to help grow your business.
blang 9y ago
I would guess pooling of resources for marketing, supply chain, and name recognition would all seem like upside for franchises. Though it does seem like being a franchisee does come with a lot of baggage. Though I've never try to run a restaurant either solo or as a franchise, so this is clearly all speculation.
replicatorblog 9y ago
When talking about high-quality franchises, it's a useful vehicle for people whose talent is in recruiting/managing a low-skill workforce and promoting a business within their community. Also, high-net worth people looking for stable businesses. I get how it could seem terribly boring to a creative person, but it seems to function a bit like an annuity. This article is a good overview of who franchises appeal to (and why): https://www.bostonglobe.com/magazine/2014/09/17/the-secret-world-dunkin-donuts-franchise-kings/pb2UmxauJrZv08wcBig6CO/story.html https://www.bostonglobe.com/magazine/2014/09/17/the-secret-w... This class of trade is impressive because you need to have several million dollars of liquid wealth to get started. There's a whole other class of franchises which are basically built to bilk the aspiring middle class and charge $30-100K for nebulous advice and marked-up equipment but provide almost no national brand appeal or product development. E.g. almost every frozen yogurt franchise that has sprung up in the last 5-10 years.
- gnarcoregrizz 9y ago

AJ007 9y ago

Amazing how basically all of these restaurants are complete crap. NYC is the only place I can travel and daily eat as healthy as if I am at home.

ballenf 9y ago
I share your frustration living in suburban America and not a trendy suburb. Every time a new restaurant breaks ground I get excited for the chance of something not fried being the main attraction. I haven't been not disappointed in 8 years. I don't really blame the franchisers as much as I blame my neighbors, but I do blame both a little. Here's a great movie that I loved on the subject: https://en.wikipedia.org/wiki/Branded_(2012_film) https://en.wikipedia.org/wiki/Branded_(2012_film)
- pm90 9y ago
  What surprises me is just how accepting and tolerant most Americans are to what is really unhealthy and disgusting food. Is it just that these foods are cheap? I'm not sure if this has something to do with the building codes in suburbia that require a sprawling parking lots for every restaurant. In South Korea, for instance, there are mom and pop restaurants in every city that serve fresh, delicious food (chain restaurants do exist, but are not as common).
  - humanrebar 9y ago
    > I'm not sure if this has something to do with the building codes in suburbia that require a sprawling parking lots for every restaurant Americans drive themselves around a lot, both for work and for other reasons. When you're looking for something particular or easy, it helps to find a chain location you've had consistent success at. My theory is that something like Yelp (but with less work to use) would help disrupt this quite a bit. Perhaps Yelp has already helped a bit. I know I've gone to some local places I wouldn't have otherwise because they've had good ratings.
  - bllguo 9y ago
    Marketing and that they grew up with it? I don't know. My perception is that foods that are viewed as quintessentially American are almost all unhealthy. Burgers and fries, steak, bbq, fried stuff, mac and cheese, and hot dogs are the first to come to mind. It's what people grow up with and it's glorified in media for being "American" despite any health concerns. After all, most people like fried foods and meat and things that are, strictly speaking, unhealthy. But historically they've been rarer. Meat is still kind of a luxury in rural China, for example.

cat199 9y ago

But how else will we create new 'up and coming' neighborhoods to increase the price of mortgages?

bmmayer1 9y ago

I honestly don't know why anyone takes the New York Times seriously anymore. They so obviously have an editorial agenda that even in their ostensibly 'objective' reporting they can't hide it. Yes, there will always be stories of businesspeople failing to grow businesses, and losing their savings doing so. And the story of investors over-extending into a market is as old as time. One would think that the flow of cheap money from Wall Street to Main Street would be celebrated. But, leave it to the NYT to never pass up an opportunity to vilify Wall Street. Of course, if private investors on Wall Street invested in regional mom-and-pop health-conscious juice bars and eateries and lost their shirts, the headline in the New York Times would be "Wall Street gambles Americans' hard earned retirement savings on uncertain business models."

humanrebar 9y ago
> ...leave it to the NYT to never pass up an opportunity to vilify Wall Street... ...while endorsing big Wall Street allies like Charles Schumer. https://www.nytimes.com/2016/10/29/opinion/endorsements-in-new-york-and-new-jersey.html https://www.nytimes.com/2016/10/29/opinion/endorsements-in-n...

jldugger 9y ago

So.... we're in a food bubble?

cjlars 9y ago

I don't think any of this is new. My dad owned a restaurant over thirty years ago and has talked bad about them (as business investments) ever since. Restaurants have a number of characteristics that indicate they should be poor investments vs other types of small businesses. Here's a few, none of which require wall street's involvement: -They're cool. Who doesn't want to own one? I'd love to own a bar if I thought I could make money in the game. -They're visible. Everyone eats at restaurants, and in fact, a lot of people sit around in restaurants talking about what sort of business to start. -They have good perks. Free beer anyone? -They're familiar. I mean, things turn out pretty good when I BBQ, right? -They're (relatively) cheap to get into. If the minimum is $100k instead of $1M, you'll have more competition. When it comes to small business, look for the opposite of all of those. The more obscure, boring and downright unappealing the better.