So You Want To Open a Restaurant: Part I
I've been thinking about writing this for years and now I finally feel the moment is right. The Chef and I opened our first restaurant in 2009 and since then we have lived through so much. We have learned so much too and I have always believed that knowledge and words are more powerful than any textbook. We try to live by my son's favorite motto "Sharing is Caring."
So, if you want to open a restaurant, this is for you. Each post will have a lesson that we learned from opening. Some lessons are bigger than other's. Some lessons we've learned. Some, we are still learning. Opening a restaurant is more than you and me. It's more than a chef. It's an ever evolving story that doesn't end once you open.
This is the story of how we opened a restaurant:
In 2008 the Chef and I decided that it was our time to open a restaurant in Cleveland. We had moved back to our hometown from NYC and while the Chef was happy as a chef at Bar Cento, his dream had always been to open his own place. We began to work on the project and quickly found ourselves partnering with members of his family. His brother had decided to invest in the Chef's idea of a restaurant and had also brought on his wife's immediate family to invest. At the time we thought this was a BRILLIANT thing. We had money! We could open a restaurant. More important we could open the restaurant the Chef had always dreamed of. Trusting his brother as a partner seemed easy at the time, in retrospect it was easily one of our biggest rookie mistakes.
The Chef worked on the menu, his brother worked on the investments & banking, I worked on social media, and soon our little restaurant found itself a home on East 4th Street. We gathered an opening team consisting of the Chef, his friend from his previous cooking gig who was going to partner in as a chef, our designer, our beverage manager, our pastry chef, and me. We all holed up in an empty building on 4th Street (later to be opened as Chinato) and made plans for our baby. We drank wine so we could smash the bottles for our sustainable fly-ash bar that was to be installed. We wrote handbooks and menus and met with future servers and bartenders. We fought about design and money and budget. We lost our shit when the roof started flooding and the concrete had be re-poured. Our deadlines got broken. Furniture got bought, art was made, and we had fun. The days spent in that empty building were tiresome and hard but some of the best memories I have of opening The Greenhouse Tavern.
In opening the restaurant we realized that money was needed up front. When the Chef first lived in NYC, he had lived with his brother, a well off engineer who had an interest in cooking in his spare time. His brother wanted in and the Chef was all for it. The Chef's brother raised money from his wife's family and friends, but we also needed a loan. The Chef and I had just bought a house (that we could barely afford on his crappy 25K salary from his current chef gig) and because of that we would need to put it up as collateral. Because we were young with virtually no credit, we needed other signers of the loan who actually had credit. We approached the chef's dad to sign as well as the chef's brother and friend who was partnering in. Co-signing the loan was another one of our rookie mistakes. Unfortunately for us we blindly trusted the Chef's brother as our leader when it came to financial and contactual obligations and this would eventually fuck us later on. We signed anything and everything that his brother put in front of us, with no lawyer of our own. BIG MISTAKE KIDS BIG MISTAKE. And here is where we find our first lesson in opening a restaurant:
LESSON #1 HIRE A LAWYER
First rule of opening a restaurant, HIRE A FUCKING PERSONAL LAWYER. If you can't afford it (like we couldn't), HIRE A FUCKING PERSONAL LAWYER ANYWAYS. Go into debt hiring a personal lawyer. I promise, I promise, I promise you will spend more money in the long run not being protected than you will in the beginning protecting yourself.
We did not hire a personal lawyer. And because of this we signed documents and contracts and loans and leases that didn't protect us. We trusted family blindly and that was just stupid. If you are going to go through the stress and chaos of opening a restaurant, you best be sure that your ass and that restaurant you built is protected from anyone and everyone. At the time though we could only see opening day. If the Chef's brother told us to sign, we signed.
A lawyer saves you money in the long run. Investment contracts are CRAZY COMPLICATED and if you don't find yourself with a lawyer you may find yourself in our (and many other chefs) shoes. A lawyer finds clauses that don't protect you in the long run. A lawyer finds that the contract you are about to sign protects the investors but doesn't protect you. Had we hired a personal lawyer, that lawyer would have told us that the operating agreement we were signing was complete garbage and could completely screw us down the road. Well we didn't and guess what? It totally did. 80K later... A lawyer would have also told us that the bank loan we had signed a personal guarantee on would not allow us to take the personal guarantee off until the loan was completely paid off. This meant we could not sell our home for the duration of the loan. A good lawyer, hell even a bad one, would tell us that this was a red flag and we should shop around or try and raise more money.
At the time, hiring a lawyer seemed so foreign to us. Why would we pay a lawyer when we had a company lawyer and family looking out for us? The company lawyer would have our back for sure and the Chef's family would never do anything to hurt him right? WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG. WRONG.
We would learn the hard way that a company lawyer doesn't protect the Chef or the partner, a company lawyer only protects the company as a whole. The company lawyer doesn't protect ownership, your salary, or even your job. And family, well, that's another story completely.
To be continued....