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Risky business 

There is a known theory in the restaurant business that says to be successful, you should try to be the third owner to take over a location. The first proprietor, so it goes, does all the heavy lifting, financially speaking. She’s the one who puts in all the required electrical work, installs the ovens, fridges and mechanics. Eventually, covering the rent while paying down the front-loaded costs of building will prove too much and the business will cave under the financial burden. Enter owner number two. This owner will spend the bulk of her money revamping the decor and covering whatever debt she assumed from the first owner when she bought the business. Eventually, she too, will succumb. By the time owner number three takes over, the initial costs have been paid down, or the landlord has given amnesty in hopes of finding a tenant that will stay, and she merely has to edit the environment to her tastes and install her staff, giving her a substantial leg up.

Now, this is just a theory, and theories exist to be tested. There are more than 1,560 restaurants, bars and catering companies in Nova Scotia and of those, there are plenty of examples where this did not play out. Looking at Halifax, there are first-time owners who have hit it big—witness jane’s on the common—and there are long-time owners who have failed—La Cave, for example. But according to Statistics Canada, only one in three new restaurants survives past its fifth year of business, proving there are tremendous obstacles in the way of success.

What leads to a restaurant thriving or failing? The ingredients to success, like a complicated souffle, are many, and assuring that you have them all in place, in the right order, at the right time, is a pursuit approaching alchemy.

Michael Leigh, co-owner of The Peel Pub, The Bitter End and the newly opened Luxx in Park Lane, has been in the restaurant business for 14 years, opening his first establishment, Junctions, in St. John’s, when he was just 21. He moved to Halifax in 1997, and opened The Bitter End in 2000. He’s chosen to work with business partners all the way, so that each can focus on what they do best. Leigh, a former bartender, says he’s not a foodie at all—he leaves that to his carefully selected chefs. Instead, he focuses on the overall running of his establishments, making sure everything is working as it should. He says the majority of money spent in restaurants is in the mid-priced range (entrees around $15-to-$20) and that’s where he’s set his sights—excluding The Peel Pub, a favourite with university students.

He and his partners bought Luxx, formerly Birmingham’s, after it went bankrupt. The business was sound for years, but the owners were going through personal difficulties and ultimately the business took the hit. That’s a result, says Leigh, that is inevitable if an owner waits until the last minute to pay bills, or ignores tax bills, or worse, takes more cash out of the business than it can sustain.

The atmosphere of Luxx is modern, unchallenging and comfortable—dark wood tables and chairs, neutral colours run throughout. Leigh didn’t have to do much when he took over. He gave it a fresh look, but most of the bones were already there. “It’s always good to start with a good location, but you pay for that.” Luxx is located on the second floor of Park Lane, not on street level. He thinks the location, notwithstanding the fact that having no street access could severely hamper walk-ins, is one of the better spots on Spring Garden. “We have the best patio on the street,” he says, pointing behind him. Indeed, the patio offers unfettered access to prime Spring Garden people- watching.

“A bad location can be turned into a good location,” he continues, citing Tribeca, the restaurant/night club that has seen its share of down times, but has become one of the city’s busiest bars on weekend nights. “You have to be patient, but can become a destination location, anchoring an entire street and bringing in new businesses around it.”

Being the lone business in a street can eventually work in its favour, but it takes time. And it’s risky. Luxx sits diagonally across the street from il Mercato, a competitor for the new eatery, and strategically, Leigh says, that’s right where he wants to be. “You want to be right next to your best competitor,” he says. He points to the glass-door fridge behind the bar. “See that bottle of San Pellegrino? It’s the top-selling water in the world. See the bottle beside it? Vittel. I don’t know how popular that is, but if I was a Vittel rep, I’d want to be right next to the top seller, not way down at the bottom on my own.”

Jane Wright went the opposite route. She saw a niche (more like a yawning gap) that wasn’t being served in Halifax—the neighbourhood bistro—and contrary to all the library books she took out on how to open a restaurant, she decided the location at Robie and Cunard was the only one she was interested in for jane’s on the common. “Oh yeah, all the books said ‘don’t get married to one place.’ But this is why I wanted . To work in my community.” Wright lives five doors down from her business and before signing her lease, she spent three weeks walking around the area counting the number of people who lived and worked within blocks of her chosen location.

When she opened her bistro in 2003, Wright was a 44-year-old rookie—she worked as a server through her teens and early 20s, but had never ventured into the business side of it. Yet she had the foresight to know that with an apartment building going up across the street, and the surrounding residential neighbourhood, a lack of parking would not be the problem that others had predicted for her.

Unfortunately, the fact that the location had been a restaurant since the 1940s did not work to her advantage. Wright had to install all new electrical and kitchen equipment, putting her in the position, essentially, of being a first owner. Lucky for her, the combination of clean, modern decor and serving a “killer brunch,” as reviewed in the New York Times, hit exactly the right chord with her customers, and rather than buckling under the weight of renovations, she’s had to do more to accommodate the demand.

The most important thing for Wright is that her restaurant makes customers feel welcome. Her environment is bright, her food is comfortable but modern and she’s trained her servers to be the best in the city. She even role-plays with them, “I tell them, I’m a middle-aged, overweight woman, coming in to have a meal by myself. How do you greet me?”

Glauco (Claudio) Giovannetti and his wife Shelley, the new owners of The Italian Garden on Spring Garden (formerly La Cave and the short-lived Casa Roma, among others) have a background in cooking—Glauco was the chef at Piccolo Mondo for the past six years. An exceedingly friendly man, he speaks passionately about his life as a cook, with a thick Italian accent. When asked if he is “papered”—if he trained in school—he demands, “When you drive, do you drive with your licence or with your experience?” He’s not papered, but he’s been cooking his whole life.

Giovannetti’s restaurant serves “honest” food, which means meals are prepared to get the most out of every ingredient. His business philosophy, unlike Leigh’s or Wright’s, is driven entirely from the kitchen. The decor of The Italian Garden is simple, tidy and non-descript. The tables have linen tablecloths, but one could not describe the environment as designed or styled. And it seems fitting. The couple has lived around the world; Glauco opened his first restaurant in Brazil in 1977. For him, the most important element for success is commitment. “You have to marry this activity. For me, it’s still a hobby, that way you give your best. If it’s work, I don’t want to do it like this.”

All three businesses are situa-ted in locations one could easily see as jinxed—each has had a high turnover and fast closure rate for incoming restaurants. But Shelley Giovannetti doesn’t believe a location can be cursed. She says it’s all about the fit. “It’s a home, this is a particular business. French cuisine would fit here, Italian. You can’t sell pita here, no sandwiches,” she says.

Leigh won’t speculate on other businesses and why they’ve failed, but says he doesn’t believe a location can be cursed either. It’s all about the business owner. “A new coat of paint doesn’t make it new,” he says. “You need to have a solid business plan in place that will oversee all scenarios, both good and bad. A new owner has to brainstorm all contingencies, and have answers to questions like ‘what happens if my business doesn’t pull in money for months at a time?’”

It’s an industry where you really are only as good as your last meal. And you have to care about each plate that goes out the door. “You have to pass Christmas, Saturday, Sundays, holidays in the kitchen,” says Glauco Giovanetti. “People are at the beach, and you’re in the kitchen. This is love.”

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