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There's an easy solution to having too much business : raise prices. I think this is one of A16Z's big insights into most businesses[1]: they don't charge enou

There's an easy solution to having too much business : raise prices. I think this is one of A16Z's big insights into most businesses[1]: they don't charge enough. If you look at the best restaurants in America like the French Laundry in Napa, they charge astronomical ridiculous prices and they still have reservations for months ahead of time. The oldest restaurant in Paris requires you put down a 400 euro deposit just to make a reservation! That these burger joint owners shut down instead of raising prices seems like a huge business mistake. They could have put 50% off coupons in the local newspaper or something if they wanted to make the place available to locals at reasonable prices. [1] https://a16z.com/2016/08/13/pricing/ https://a16z.com/2016/08/13/pricing/

mujoco 8y ago
Raising prices would reduce the volume of customers, so the restaurant could maintain its quality standard, but Stanich felt his mission was to give back to the local community of regular diners. He didn't want to price out regular, repeat customers from the neighborhood and have only tourists eating there.
- craftyguy 8y ago
  Others in this thread have suggested that the restaurant give locals a 'locals card', which would allow them to purchase food at a more reasonable price.
  - willyt 8y ago
    Burger pass. $30 for a burger pass. Gets you burgers for $4 for the rest of the year. or pay $20 for a burger now. You can secretly give out burger passes to locals when the tourists aren't looking.
    - deleted 8y ago
      [deleted]
    - jcater 8y ago
      I live in a touristy area with lots of great, but high demand and correspondingly high priced, restaurants. Several of the local places do "frequent diner/visitor" loyalty cards, where the 5th or 9th meal (for restaurants), coffee (coffee shops), etc are free. This offsets the otherwise high prices charged on menu items. Also, once a year (during the off season, of course), the local high school sells a booster card that gets a percent discount off for the entire year at numerous local places. This is of course not unique to a touristy area, but I find myself using them far more often than in other places I've lived.
    - lozaning 8y ago
      Smashburger actually had something close to this for a while. SmashPasss, it was like $100 bucks for the right to get a burger a day for 100 days. https://smashburger.com/smashpass/ https://smashburger.com/smashpass/
    - starshadowx2 8y ago
      This sounds like a super good idea to me, I really love it. Seems pretty simple but just makes a lot of sense. Any person travelling just coming by for the "best burger" probably would not want to spend $34 and not use that card anymore so $20 sounds great. Any regular would probably be super cool with paying that extra $30 knowing they can get a burger once a week or whatever for $4. This works out for the restaurant and the regulars, and like you said they can just hand out those cards to anyone for any reason.
  - chaostheory 8y ago
    Why not just look at driver's licenses and student ids instead? Disney parks do the same thing - cheaper prices for locals
    - craftyguy 8y ago
      Well, sure, but having the customer flash a card to the employee would save more time than having the customer hand over the card for inspection by an employee.
      - chaostheory 8y ago
        Wouldn't checking an already existing ID card be easier vs printing up and distributing specialized cards?
        craftyguy 8y ago
        The point is, there are ways to distinguish between locals and non-locals. There are merits and drawbacks to having your own ID card vs. using a state ID card.
      - stickfigure 8y ago
        ...but it would invite a secondary market for these cards. The logistics of fabricating them would suck, and you have to look at an ID to judge if a card should offered anyway. Plus having special cards feels corporate, not homey. Looking at an ID for locals discount is pretty well trodden ground.
        craftyguy 8y ago
        > but it would invite a secondary market for these cards There are already markets for fake IDs, so unless you're suggesting that small local restaurants purchase scanners to confirm the authenticity of each ID, it would be relatively easy to circumvent this check too. (Some states require IDs to be scanned for selling alcohol, but many, e.g. in Oregon, do not, and the only check is some employee looking at a card in their hands for a couple of seconds) > Plus having special cards feels corporate Not at all. Plenty of local restaurants in my are (Portland, OR) have rewards cards, where you get stamps and a free meal after some amount of stamps.
- daveslash 8y ago
  What about raising prices (at the exclusion of the locals), and then using the increased revenue to philanthropically give back to the community in a meaningful way?
  - geofft 8y ago
    There are some things in a capitalist society that are the domain of philanthropy, and some things that are not. A school or library might be a suitable target of philanthropy, but a burger place or pub or barber shop isn't; there's no way to fund it and have it end up the same sort of place it would be on its own. At best, it can be a target of a GoFundMe or something - but that's just to pay operating costs. The store itself has to operate like a normal capitalist store for the concept to work, accepting customers, charging money, etc. There is no concept in our society of a non-profit burger joint.
    - pbhjpbhj 8y ago
      Can't you buy a burger place, reduce the price to give zero profit, adjust the price on the fly to ensure zero profit. Sure you won't necessarily meet demand, but there's no inherent reason quality need suffer(?). Or, have a coop where staff wages soak up all excess revenue, giving zero profit. You'd want a contingency, and a savings account if you seek to expand the business, but they're not profit. We could do that with all businesses I think.
      - dcow 8y ago
        I love this idea: zero profit capitalism. Sure some people would abuse savings accounts more than others, but taxing standing profits on a gradually increasing scale the longer they stand (sure the market already does this at a minute level, but it's not enough to deter wealth hoarding) seems like an effective way to solve the wealth extraction problem corporations introduce.
        ryneandal 8y ago
        Brings to mind Paul Newman: https://newmansown.com/ https://newmansown.com/
- jrochkind1 8y ago
  Also... he was just burned out. An experience many here may identify with. That's why the place is still closed. It's possible there was something he could have done to make things good again... if he wasn't too burned out by the experience to figure it out and carry it out.
- ryanwaggoner 8y ago
  And how did that work out? Maybe a better approach would be to jack prices up sky high for tourists and open another burger joint with a different name for locals.
LargeWu 8y ago
Then this prices out the neighborhood locals who made the place successful in the first place. These are people that the owner and workers know and care about. I think he could care less about the tourists that come in once just to Instagram their "best burger in America".
- kazinator 8y ago
  It's okay to temporarily price out the locals until the inundation goes away.
  - moate 8y ago
    Sure, but then the inundation goes away and the locals won't come back because they got burned already by the long lines and then the price hike. There's no guarantee that plan works.
- felipemnoa 8y ago
  >>Then this prices out the neighborhood locals who made the place successful in the first place. Did they really make the place successful though? I don't see what exactly they contributed to the business. Had the locals not liked the food they probably would never have returned and would have also told all their friends never to go there.
Yhippa 8y ago
It seems to me that Steve was serving a ton of one-time customers and if he did that he would turn off the regulars that helped him get to where he was. You're right in that the technically correct solution would be to raise prices but I can empathize with the owner about how he would probably feel about that.
deleted 8y ago
[deleted]
hinkley 8y ago
Years ago I worked at a place downtown that was blocks away from a Thai restaurant that had a line out the door every day. The place was frenetic, like a zoo. The staff in the kitchen were running around like maniacs, making food as fast as they possibly could. The pictures on the menu above the register were all faded with age. The food was merely okay. The story was that it was cheap and decent, not good. But as I stood looking at the staff I couldn't help thinking that it would be better for everyone if they raised their prices $2 a plate and just slowed down.
- nightfly 8y ago
  $2 a plate can be enough to price it out of being a reasonable regular option for people. A food cart in a pod near my work moved into a just-as-close physical restaurant and raised their prices by about $2 plate and I went from eating there once every week or two, to maybe once a year.
  - cf498 8y ago
    Especially if it is at a threshold amount, there even a small hike will scare away customers. While not reasonable, it is a psychological effect. Take the jump from 5€ to 6€. I witnessed the same on myself with a normal dish of fried rice from a take away place. 4,5€ is cheap, 5€ expected, 5,5€ makes no difference, but 6€?? No matter how stupid, the jump by 50cent to 6€ gets me every time. It makes no sense, but I start to calculate what I could get instead on the cheap end. Breakfast to go is the same with 3€ to 3,5€ to 4€. I mean could get a portion of fried rice for 4€! Same goes for pizza or any number of take away items. It doesnt help that most shop owners arent stupid and optimized for those thresholds.
  - ryanwaggoner 8y ago
    You're making the point for them...adding even $1 to the price will ratchet the demand down to reasonable levels, and you'll end up making a little more money with lower stress levels.
  - MRD85 8y ago
    In a similar vein we have a lot of bakeries here run by a local Vietnamese population. They do these amazing pork rolls for $5, which is very cheap for food in Australia (A big Mac meal is around $12 for perspective). They are popular because of the price and if they were $7 they would sell far far less.
cf498 8y ago
That poses a substential risk to the business. You are changing your entire customer base over night. If you are a small restaurant like the one in the article, it is unlikely, that your earlier customers will book month in advance, even at half price. Your old customer base was hopefully working, but your new customers expect the words greatest burger. Can you deliver on that hype? The owner above payed month of utilities for an empty restaurant and has to make a sizeable investment to cater to that new customerbase. Unless you didnt have a functioning business model beforehand, this is a real curse and puts your livelihood at stakes.
gilrain 8y ago
They live in a community. If they raise prices such that their friends and neighbors can not afford to eat there, they will become social pariahs. It would be very difficult to do, and it would alienate the very people they probably wanted to be serving. If you’re a restaurateur, you probably don’t even live near that restaurant. But this advice is tantamount to: tell your friends and everyone who helped you get where you are that they’re too poor for you, now.
- briandear 8y ago
  It’s called supply and demand. If there is a 5 hour wait, there’s a problem: no local will wait 5 hours for a burger so you exclude them anyway. Price is the best mechanism to address supply and demand.
  - cf498 8y ago
    Thats not a solution for the problem though, if your goal is to keep your old customer base. It is only a solution if you view your restaurant as an investment instead of a passion. The counter example from the article is Paiche. edit: To give another example, I have a kebab shop in my neighborhood who will not take any orders by phone let alone online. They dont have flyers or a web presence. Its a small street faced window run by an immigrant family who keeps the booth open throughout the day, from 11 to 11 longer or shorter depending on when they are out for the day. Most of the time the place is empty but during mealtimes there is regularly a line for half an hour. For the area, this is extremely well. And they sit right next to two other kebab shops, a pizza place and two asian places with mostly no line, literally the street down in 3 minute walking distance. The reasonable thing would be to close the shop in the afternoon and take orders in advance, but thats not what they want for their shop. They want to talk and be a place where people meet, despite them not having any tables and not serving any drinks except a tea on the house from time to time. And their food is absolutely amazing. Home made sauce and bread, it is worth the wait or to eat at 4pm in the afternoon. They dont let them self get rushed and it is always an amazing meal.
  - matt4077 8y ago
    All the successful restaurants I've experienced chose to give preferential treatment to locals and regulars. That's because they often give the place the charme that makes it special in the first place. And that the business is rather cyclical, and you don't want to end up without tourists AND local all hating you. At the point where you're running 20 tables or more for three rounds every night (plus mabybe 2x lunch) you stop caring about making more money. Because if money were that important, you would have gone into investment banker, not chef. Plus restaurants tend to get into and out of favour. IT' And everyone hates tourist. Seriously: if you work anywhere close to tourists, you will hate work because it's full of tourists. Then you take a vacation and start hating yourself.
hathawsh 8y ago
In this case, Stanich wanted to serve his community, and if he raised the prices, he would drive away his own community. If I were Stanich, I would raise the prices but also offer reusable vouchers/coupons to all past customers, friends, and family so they can pay the original prices.
blang 8y ago
They could also make it reservations only, and control their price and speed.
- geofft 8y ago
  Making a burger joint reservations-only changes the character of the service significantly. Imagine Twitter saying "We're scaling too fast for our backend to keep up, so we're going to require reservations a day in advance before you tweet so we can throttle the number of requests."
  - lazerpants 8y ago
    Not necessarily. I live in a heavily touristed neighborhood in Brooklyn. But I also know the managers at the restaurants I like in the neighborhood. The secret is that these managers hold some tables for walk-ins every night, and that they mostly give them to locals. I can guarantee you there are famous NYC restaurants in my neighborhood where I can get a table even if there are lines out the door or reservations are completely full. You just have to live in the neighborhood and actually put some effort forth to introduce yourself to staff and maybe go occasionally when you know it will be slow (like during a snowstorm or holiday). It does require a good manager/host though.
InclinedPlane 8y ago
Yes, this is the classic gentrification problem. Now you've turned a restaurant that locals can visit into a purely tourist attract that only the upper class can enjoy. This solves the problem of the restaurant owners having to close down, but for all the locals the restaurant might as well be gone. P.S. And then when the next "top N burger joints in America" list comes out that everyone goes crazy for and all the burger-tourists start going somewhere else now you've lost your local customer base and you might go out of business regardless. Raising prices works well if you're a fine dining establishment in a dense metro area and that's the kind of business you expect to run. It doesn't work so well for burger joints or BBQ shacks elevated to a bizarre level of temporary fame.
- antidesitter 8y ago
  > And then when the next "top N burger joints in America" list comes out that everyone goes crazy for and all the burger-tourists start going somewhere else now you've lost your local customer base and you might go out of business regardless. Then lower your prices again to match demand. It's almost as if prices aren't set in stone.
  - InclinedPlane 8y ago
    You're missing the important detail here: you've destroyed the relationship with your local regulars. They aren't going to return just because prices are affordable, they're going to find other places to be their regular burger shop.
    - antidesitter 8y ago
      > They aren't going to return just because prices are affordable I seriously doubt it. Do you have any empirical evidence for this?
kazinator 8y ago
I would do it like this: I would create a yearly --- no, make that lifetime membership pass which can be obtained for $30 or whatever. The locals would get this for free. With the membership pass, you would go to a separate lineup which has priority over the regular line up. Then I would work the the same relaxed pace as before, not caring whether 3 people are waiting or 300. The membership pass could make users and their guests eligible for a discount, like 15-25% off. Nothing too drastic.
- megablast 8y ago
  > not caring whether 3 people are waiting or 300. Maybe you truly can do that, but it is not easy.
throwaway5752 8y ago
Yes, but if you read the article that wasn't the problem: And then, in a quieter voice, he started to explain why it wasn’t just two weeks. He asked me not to reveal the details of that story, but I can say that there were personal problems, the type of serious things that can happen with any family, and would’ve happened regardless of how crowded Stanich’s was
munificent 8y ago
This is a classic humans are rational actors and spherical volumes in empty space economic answer, which entirely misses the point. The restaurants we love, we love for the entire experience, and price is part of that experience. Even for people who can happily afford the higher price, it still results in a different experience. The people around you in the restaurant will be different. Your perception of the value of the meal will be different. Your willingness to try more adventurous items on the menu will be different. The whole thing is not just quantitatively different, but qualitatively different. A $20 burger is not a $10 burger, regardless of how the two are prepared. If the former is not the experience the chef wants to create for their customers then, no, just raising prices doesn't "solve" the problem.
- afterburner 8y ago
  The customers you made money from when you're starting out don't have to be the same customers you make money from when your restaurant hits the big time.
  - johnmaguire2013 8y ago
    There's risk associated in shunning your existing clientele in hopes of attracting a newer, more premium clientele.
    - sgc 8y ago
      Certainly less risk than just closing up shop.
    - masklinn 8y ago
      If clients have to wait hours for a burger, the existing clientele is gone either way. If you end up folding, the existing clientele is hosed anyway. And as the original commenter noted, you could put coupons in the local newspaper and the library and whatever else, so the locals have access to burgers at the old price.
      - 8y ago

mujoco 8y ago

Raising prices would reduce the volume of customers, so the restaurant could maintain its quality standard, but Stanich felt his mission was to give back to the local community of regular diners. He didn't want to price out regular, repeat customers from the neighborhood and have only tourists eating there.

craftyguy 8y ago
Others in this thread have suggested that the restaurant give locals a 'locals card', which would allow them to purchase food at a more reasonable price.
- willyt 8y ago
  Burger pass. $30 for a burger pass. Gets you burgers for $4 for the rest of the year. or pay $20 for a burger now. You can secretly give out burger passes to locals when the tourists aren't looking.
  - deleted 8y ago
    [deleted]
  - jcater 8y ago
    I live in a touristy area with lots of great, but high demand and correspondingly high priced, restaurants. Several of the local places do "frequent diner/visitor" loyalty cards, where the 5th or 9th meal (for restaurants), coffee (coffee shops), etc are free. This offsets the otherwise high prices charged on menu items. Also, once a year (during the off season, of course), the local high school sells a booster card that gets a percent discount off for the entire year at numerous local places. This is of course not unique to a touristy area, but I find myself using them far more often than in other places I've lived.
  - lozaning 8y ago
    Smashburger actually had something close to this for a while. SmashPasss, it was like $100 bucks for the right to get a burger a day for 100 days. https://smashburger.com/smashpass/ https://smashburger.com/smashpass/
  - starshadowx2 8y ago
    This sounds like a super good idea to me, I really love it. Seems pretty simple but just makes a lot of sense. Any person travelling just coming by for the "best burger" probably would not want to spend $34 and not use that card anymore so $20 sounds great. Any regular would probably be super cool with paying that extra $30 knowing they can get a burger once a week or whatever for $4. This works out for the restaurant and the regulars, and like you said they can just hand out those cards to anyone for any reason.
- chaostheory 8y ago
  Why not just look at driver's licenses and student ids instead? Disney parks do the same thing - cheaper prices for locals
  - craftyguy 8y ago
    Well, sure, but having the customer flash a card to the employee would save more time than having the customer hand over the card for inspection by an employee.
    - chaostheory 8y ago
      Wouldn't checking an already existing ID card be easier vs printing up and distributing specialized cards?
      - craftyguy 8y ago
        The point is, there are ways to distinguish between locals and non-locals. There are merits and drawbacks to having your own ID card vs. using a state ID card.
    - stickfigure 8y ago
      ...but it would invite a secondary market for these cards. The logistics of fabricating them would suck, and you have to look at an ID to judge if a card should offered anyway. Plus having special cards feels corporate, not homey. Looking at an ID for locals discount is pretty well trodden ground.
      - craftyguy 8y ago
        > but it would invite a secondary market for these cards There are already markets for fake IDs, so unless you're suggesting that small local restaurants purchase scanners to confirm the authenticity of each ID, it would be relatively easy to circumvent this check too. (Some states require IDs to be scanned for selling alcohol, but many, e.g. in Oregon, do not, and the only check is some employee looking at a card in their hands for a couple of seconds) > Plus having special cards feels corporate Not at all. Plenty of local restaurants in my are (Portland, OR) have rewards cards, where you get stamps and a free meal after some amount of stamps.
daveslash 8y ago
What about raising prices (at the exclusion of the locals), and then using the increased revenue to philanthropically give back to the community in a meaningful way?
- geofft 8y ago
  There are some things in a capitalist society that are the domain of philanthropy, and some things that are not. A school or library might be a suitable target of philanthropy, but a burger place or pub or barber shop isn't; there's no way to fund it and have it end up the same sort of place it would be on its own. At best, it can be a target of a GoFundMe or something - but that's just to pay operating costs. The store itself has to operate like a normal capitalist store for the concept to work, accepting customers, charging money, etc. There is no concept in our society of a non-profit burger joint.
  - pbhjpbhj 8y ago
    Can't you buy a burger place, reduce the price to give zero profit, adjust the price on the fly to ensure zero profit. Sure you won't necessarily meet demand, but there's no inherent reason quality need suffer(?). Or, have a coop where staff wages soak up all excess revenue, giving zero profit. You'd want a contingency, and a savings account if you seek to expand the business, but they're not profit. We could do that with all businesses I think.
    - dcow 8y ago
      I love this idea: zero profit capitalism. Sure some people would abuse savings accounts more than others, but taxing standing profits on a gradually increasing scale the longer they stand (sure the market already does this at a minute level, but it's not enough to deter wealth hoarding) seems like an effective way to solve the wealth extraction problem corporations introduce.
      - ryneandal 8y ago
        Brings to mind Paul Newman: https://newmansown.com/ https://newmansown.com/
jrochkind1 8y ago
Also... he was just burned out. An experience many here may identify with. That's why the place is still closed. It's possible there was something he could have done to make things good again... if he wasn't too burned out by the experience to figure it out and carry it out.
ryanwaggoner 8y ago
And how did that work out? Maybe a better approach would be to jack prices up sky high for tourists and open another burger joint with a different name for locals.

LargeWu 8y ago

Then this prices out the neighborhood locals who made the place successful in the first place. These are people that the owner and workers know and care about. I think he could care less about the tourists that come in once just to Instagram their "best burger in America".

kazinator 8y ago
It's okay to temporarily price out the locals until the inundation goes away.
- moate 8y ago
  Sure, but then the inundation goes away and the locals won't come back because they got burned already by the long lines and then the price hike. There's no guarantee that plan works.
felipemnoa 8y ago
>>Then this prices out the neighborhood locals who made the place successful in the first place. Did they really make the place successful though? I don't see what exactly they contributed to the business. Had the locals not liked the food they probably would never have returned and would have also told all their friends never to go there.

Yhippa 8y ago

It seems to me that Steve was serving a ton of one-time customers and if he did that he would turn off the regulars that helped him get to where he was. You're right in that the technically correct solution would be to raise prices but I can empathize with the owner about how he would probably feel about that.

deleted 8y ago

[deleted]

hinkley 8y ago

Years ago I worked at a place downtown that was blocks away from a Thai restaurant that had a line out the door every day. The place was frenetic, like a zoo. The staff in the kitchen were running around like maniacs, making food as fast as they possibly could. The pictures on the menu above the register were all faded with age. The food was merely okay. The story was that it was cheap and decent, not good. But as I stood looking at the staff I couldn't help thinking that it would be better for everyone if they raised their prices $2 a plate and just slowed down.

nightfly 8y ago
$2 a plate can be enough to price it out of being a reasonable regular option for people. A food cart in a pod near my work moved into a just-as-close physical restaurant and raised their prices by about $2 plate and I went from eating there once every week or two, to maybe once a year.
- cf498 8y ago
  Especially if it is at a threshold amount, there even a small hike will scare away customers. While not reasonable, it is a psychological effect. Take the jump from 5€ to 6€. I witnessed the same on myself with a normal dish of fried rice from a take away place. 4,5€ is cheap, 5€ expected, 5,5€ makes no difference, but 6€?? No matter how stupid, the jump by 50cent to 6€ gets me every time. It makes no sense, but I start to calculate what I could get instead on the cheap end. Breakfast to go is the same with 3€ to 3,5€ to 4€. I mean could get a portion of fried rice for 4€! Same goes for pizza or any number of take away items. It doesnt help that most shop owners arent stupid and optimized for those thresholds.
- ryanwaggoner 8y ago
  You're making the point for them...adding even $1 to the price will ratchet the demand down to reasonable levels, and you'll end up making a little more money with lower stress levels.
- MRD85 8y ago
  In a similar vein we have a lot of bakeries here run by a local Vietnamese population. They do these amazing pork rolls for $5, which is very cheap for food in Australia (A big Mac meal is around $12 for perspective). They are popular because of the price and if they were $7 they would sell far far less.

cf498 8y ago

That poses a substential risk to the business. You are changing your entire customer base over night. If you are a small restaurant like the one in the article, it is unlikely, that your earlier customers will book month in advance, even at half price. Your old customer base was hopefully working, but your new customers expect the words greatest burger. Can you deliver on that hype? The owner above payed month of utilities for an empty restaurant and has to make a sizeable investment to cater to that new customerbase. Unless you didnt have a functioning business model beforehand, this is a real curse and puts your livelihood at stakes.

gilrain 8y ago

They live in a community. If they raise prices such that their friends and neighbors can not afford to eat there, they will become social pariahs. It would be very difficult to do, and it would alienate the very people they probably wanted to be serving. If you’re a restaurateur, you probably don’t even live near that restaurant. But this advice is tantamount to: tell your friends and everyone who helped you get where you are that they’re too poor for you, now.

briandear 8y ago
It’s called supply and demand. If there is a 5 hour wait, there’s a problem: no local will wait 5 hours for a burger so you exclude them anyway. Price is the best mechanism to address supply and demand.
- cf498 8y ago
  Thats not a solution for the problem though, if your goal is to keep your old customer base. It is only a solution if you view your restaurant as an investment instead of a passion. The counter example from the article is Paiche. edit: To give another example, I have a kebab shop in my neighborhood who will not take any orders by phone let alone online. They dont have flyers or a web presence. Its a small street faced window run by an immigrant family who keeps the booth open throughout the day, from 11 to 11 longer or shorter depending on when they are out for the day. Most of the time the place is empty but during mealtimes there is regularly a line for half an hour. For the area, this is extremely well. And they sit right next to two other kebab shops, a pizza place and two asian places with mostly no line, literally the street down in 3 minute walking distance. The reasonable thing would be to close the shop in the afternoon and take orders in advance, but thats not what they want for their shop. They want to talk and be a place where people meet, despite them not having any tables and not serving any drinks except a tea on the house from time to time. And their food is absolutely amazing. Home made sauce and bread, it is worth the wait or to eat at 4pm in the afternoon. They dont let them self get rushed and it is always an amazing meal.
- matt4077 8y ago
  All the successful restaurants I've experienced chose to give preferential treatment to locals and regulars. That's because they often give the place the charme that makes it special in the first place. And that the business is rather cyclical, and you don't want to end up without tourists AND local all hating you. At the point where you're running 20 tables or more for three rounds every night (plus mabybe 2x lunch) you stop caring about making more money. Because if money were that important, you would have gone into investment banker, not chef. Plus restaurants tend to get into and out of favour. IT' And everyone hates tourist. Seriously: if you work anywhere close to tourists, you will hate work because it's full of tourists. Then you take a vacation and start hating yourself.

hathawsh 8y ago

In this case, Stanich wanted to serve his community, and if he raised the prices, he would drive away his own community. If I were Stanich, I would raise the prices but also offer reusable vouchers/coupons to all past customers, friends, and family so they can pay the original prices.

blang 8y ago

They could also make it reservations only, and control their price and speed.

geofft 8y ago
Making a burger joint reservations-only changes the character of the service significantly. Imagine Twitter saying "We're scaling too fast for our backend to keep up, so we're going to require reservations a day in advance before you tweet so we can throttle the number of requests."
- lazerpants 8y ago
  Not necessarily. I live in a heavily touristed neighborhood in Brooklyn. But I also know the managers at the restaurants I like in the neighborhood. The secret is that these managers hold some tables for walk-ins every night, and that they mostly give them to locals. I can guarantee you there are famous NYC restaurants in my neighborhood where I can get a table even if there are lines out the door or reservations are completely full. You just have to live in the neighborhood and actually put some effort forth to introduce yourself to staff and maybe go occasionally when you know it will be slow (like during a snowstorm or holiday). It does require a good manager/host though.

InclinedPlane 8y ago

Yes, this is the classic gentrification problem. Now you've turned a restaurant that locals can visit into a purely tourist attract that only the upper class can enjoy. This solves the problem of the restaurant owners having to close down, but for all the locals the restaurant might as well be gone. P.S. And then when the next "top N burger joints in America" list comes out that everyone goes crazy for and all the burger-tourists start going somewhere else now you've lost your local customer base and you might go out of business regardless. Raising prices works well if you're a fine dining establishment in a dense metro area and that's the kind of business you expect to run. It doesn't work so well for burger joints or BBQ shacks elevated to a bizarre level of temporary fame.

antidesitter 8y ago
> And then when the next "top N burger joints in America" list comes out that everyone goes crazy for and all the burger-tourists start going somewhere else now you've lost your local customer base and you might go out of business regardless. Then lower your prices again to match demand. It's almost as if prices aren't set in stone.
- InclinedPlane 8y ago
  You're missing the important detail here: you've destroyed the relationship with your local regulars. They aren't going to return just because prices are affordable, they're going to find other places to be their regular burger shop.
  - antidesitter 8y ago
    > They aren't going to return just because prices are affordable I seriously doubt it. Do you have any empirical evidence for this?

kazinator 8y ago

I would do it like this: I would create a yearly --- no, make that lifetime membership pass which can be obtained for $30 or whatever. The locals would get this for free. With the membership pass, you would go to a separate lineup which has priority over the regular line up. Then I would work the the same relaxed pace as before, not caring whether 3 people are waiting or 300. The membership pass could make users and their guests eligible for a discount, like 15-25% off. Nothing too drastic.

megablast 8y ago
> not caring whether 3 people are waiting or 300. Maybe you truly can do that, but it is not easy.

throwaway5752 8y ago

Yes, but if you read the article that wasn't the problem: And then, in a quieter voice, he started to explain why it wasn’t just two weeks. He asked me not to reveal the details of that story, but I can say that there were personal problems, the type of serious things that can happen with any family, and would’ve happened regardless of how crowded Stanich’s was

munificent 8y ago

This is a classic humans are rational actors and spherical volumes in empty space economic answer, which entirely misses the point. The restaurants we love, we love for the entire experience, and price is part of that experience. Even for people who can happily afford the higher price, it still results in a different experience. The people around you in the restaurant will be different. Your perception of the value of the meal will be different. Your willingness to try more adventurous items on the menu will be different. The whole thing is not just quantitatively different, but qualitatively different. A $20 burger is not a $10 burger, regardless of how the two are prepared. If the former is not the experience the chef wants to create for their customers then, no, just raising prices doesn't "solve" the problem.

afterburner 8y ago
The customers you made money from when you're starting out don't have to be the same customers you make money from when your restaurant hits the big time.
- johnmaguire2013 8y ago
  There's risk associated in shunning your existing clientele in hopes of attracting a newer, more premium clientele.
  - sgc 8y ago
    Certainly less risk than just closing up shop.
  - masklinn 8y ago
    If clients have to wait hours for a burger, the existing clientele is gone either way. If you end up folding, the existing clientele is hosed anyway. And as the original commenter noted, you could put coupons in the local newspaper and the library and whatever else, so the locals have access to burgers at the old price.
    - 8y ago