Challenges & Opportunities of Operating a Restaurant | The Stoler Report-New York’s Business Report


♪ [THEME MUSIC] ♪>>YOU KNOW MY CRYSTAL APPLE SAYS IT’S REALLY HARD TO BE IN THE RESTAURANT BUSINESS. YOU’VE GOT TO BE CRAZY TO BE IN THE RESTAURANT BUSINESS. SO TODAY, WITH HELP OF MY EXECUTIVE PRODUCER AND COHOST, WE’VE ASSEMBLED A GROUP OF STELLAR OPERATORS, SOME EVEN CHEFS, WITH THE EXCEPTION OF DREW AND RICKY AT ONE TIME WAS A CHEF. WE WILL PUT THEM OVER HERE. TO TALK ABOUT THE CHALLENGES AND OPPORTUNITIES TO BE IN THE RESTAURANT BUSINESS. MY GUESTS INCLUDE, DREW NIEPORENT, OWNER OF MANY RESTAURANTS, OPERATOR — TRULY AN OPERATOR. MARC MURPHY A FANTASTIC CHEF, OWNER AND OPERATOR OF RESTAURANTS. RICKY PASSARELLI OWNER AND OPERATOR OF RESTAURANTS AND LAST BUT NOT LEAST, THE MOST CRAZY INDIVIDUAL WE KNOW, CHEF OWNER DAVID BURKE. WHY ARE YOU IN THE RESTAURANT BUSINESS? IT’S TOO EXPENSIVE TO OPERATE? WHAT ARE THE OPPORTUNITIES?>>>MICHAEL, I’VE BEEN COMING ON THE SHOW –>>>>FOR THE LAST 10 YEARS.>>>I WOULD SAY TODAY, THE UNFORTUNATE STATE OF THE UNION FOR THE RESTAURANT BUSINESS IS YOU CAN’T MAKE ANY MONEY. YOU CAN GROSS A LOT OF MONEY, BECAUSE THE RENT IS SO HIGH AND THE LABOR IS HIGH AND THE FOOD IS HIGH TO PURCHASE. NO MONEY.>>>>MARK, YOU ARE A MASTERCHEF AND YOU RAN THIS LANDMARK RESTAURANT THAT EVERYBODY KNEW, IT WAS ALWAYS BUSY. BIG CROWD. WHAT HAPPENED?>>WAS 12 YEARS. IT WAS A GOOD RUN. I WAS PROUD OF WHAT WE DID BUT IT WAS TIME TO GO AND DO SOMETHING DIFFERENT. AFTER A WHILE, I HAD TO DO A REFRESH. I DID NOT KNOW IF I WANTED TO STAY THERE. A LOT OF THINGS CHANGED. RELATED MOVED TO HUDSON YARDS, CNN AND TIME WARNER MOVED TO HUDSON YARDS TOO. THERE WERE A LOT OF EMPLOYEES, A COUPLE THOUSAND EMPLOYEES THAT LIVED UPSTAIRS THEY MOVED OUT. AND DEUTSCHE BANK WAS SUPPOSED TO MOVE IN AND WE DON’T KNOW — WE ARE NOT SURE WHAT’S HAPPENING THERE. IN THE PRESS THEY HAD ALREADY GIVEN BACK TWO OF THE FLOORS TO THE LANDLORD. SO MY LUNCH BUSINESS WENT DOWN QUITE A BIT. I WAS WORRIED ABOUT THE NEXT TWO YEARS I’M GOING TO PAY A PRETTY BIG CHUNK OF RENT AND HAVING LOST A LOT OF BUSINESS IN THE BUILDING. AND ALSO, AFTER 12 YEARS I THOUGHT ALL RIGHT. I’VE DONE THIS FOR A WHILE IT’S TIME TO FIND SOMETHING ELSE TO DO.>>RICKY, LET’S TALK ABOUT BOBBY VAN’S HAS BEEN IN BUSINESS THE INITIAL ONE OVER 50 YEARS.>>50 YEARS. OLD BRAND. SAME STORY IS TRUE. HIGH-GROSS THE SALES ARE THERE BUT THE COST IS THROUGH THE ROOF. THIS IS AN EXPENSIVE CITY TO OPERATE IN AND, YOU KNOW, IT EATS AWAY YOUR MARGINS.>>AND BY THE WAY, WE HAVE TO PASS THE COST ONTO THE GUEST.>>>THEY DON’T LIKE THAT.>>>REMEMBER 21? THE 21 HAMBURGER. REMEMBER WHAT A NOVELTY THAT WAS. IT WAS THE MOST EXPENSIVE HAMBURGER.>>>NOW EVERYBODY CHARGES 25 BUCKS FOR HAMBURGER. AND THERE WILL BE A $32 HAMBURGER RIGHT AROUND THE CORNER.>>>IT WILL BE JUST DANIELLE’S.>>>NO.>>>>DAVID, YOU HAVE ADAPTED. YOU WERE THE CHEF WORKING FOR A COMPANY AND THEN YOU WENT IN YOUR OWN BUSINESS. HOW ARE PEOPLE ADAPTING ON BEING A CHEF? THERE’S A TERM CALLED A MANAGEMENT AGREEMENT TODAY. CERTAIN PEOPLE DON’T WANT TO MASTERCHEFS BECAUSE IT’S EASIER NOT HAVING A MASTERCHEF — I HATE TO SAY A PRIMA DONNA — I’M NOT SAYING YOU’RE ONE.>>>THERE’S A COUPLE OF — SOME RESTAURANTS YOU CAN’T AFFORD A REALLY GREAT CHEF TO BE IN ONE RESTAURANT SOMETIMES ANYMORE. AN OWNER OF A SMALL RESTAURANT, A GREAT CHEF, CAN’T AFFORD TO PAY HIMSELF STAYING IN THAT ONE RESTAURANT. YOU GO OUT AND CREATE MANAGEMENT AGREEMENTS AND YOUR EXPERTISE GOES TO ANOTHER PROJECT. TO A CERTAIN DEGREE, YOU CAN DO THAT AND MANAGE IT AND BRAND BUILDING IS IMPORTANT. IF YOU HAVE A GOOD BRAND YOU CAN LEAD TO ANOTHER RESTAURANT TO HELP GET PUBLICITY AND TEACH. THAT’S AN OPPORTUNITY FOR INCOME. BUT IN THE SMALLER RESTAURANTS IN NEW YORK AND MY NEW YORK PROPERTIES THE CHEF HAS TO DO THE PASTRIES NOW. THE MAÎTRE D’ HAS TO BE THE GENERAL MANAGER NOW. YOU’RE GOING BACK TO TWO HATS, THAT MOM AND POP MENTALITY. WE WALKED AWAY FROM THAT FOR A WHILE. ALL THESE FRINGE JOBS THAT WE THOUGHT WE NEEDED AND THEY WERE GOOD WHEN THE MONEY WAS FLOWING. NOW YOU’VE GOT TO TAKE IT BACK DOWN. THE POLITICIANS ARE GETTING INVOLVED IN OUR BUSINESSES IT’S AFFECTING OUR BOTTOM-LINE AND THAT’S IT.>>>LET’S LOOK AT THE LABOR COSTS BESIDE THE TIP CREDIT, THE VACATION PAY, THE SICK LEAVE ALL OF THESE ADDITIONAL EXPENSES ARE OPERATING OVER THERE. THE MINIMUM WAGE — WHAT YOU’RE ARE PAYING SOMEONE TO BE A DISHWASHER OVER THERE, IT’S CHANGED. YOU BEEN IN THE BUSINESS CLOSE TO 40 YEARS OF YOUR LIFE. OKAY. WOULD YOU RECOMMEND TO SOME YOUNG PERSON TO GO INTO THIS BUSINESS?>>>ABSOLUTELY NOT. I COUNSEL SOMEBODY TODAY. THEY WERE ABOUT TO GO TO THE CORNELL HOTEL SCHOOL. I SAID WHAT YOUR INTERESTS? HE SAID FINANCE. I SAID GREAT. KEEP IT LIKE THAT. NOT FOOD AND BEVERAGE. I JUST CAME BACK FROM A TRIP TO VIENNA AND MUNICH AND YOU LEAVE 10 PERCENT AS A TIP AND THEY LIKE THANK YOU PROFUSELY. OVER HERE, WE BEEN LEAVING 20 PERCENT ALMOST AUTOMATICALLY AND YOU GET SUED.>>>I THINK PEOPLE DO NOT UNDERSTAND THE TIP CREDIT THING. I THINK IT’S A CONVERSATION THAT IS VERY COMPLICATED. I THINK THE REGULAR PERSON THAT GOES TO DINNER DOES NOT UNDERSTAND HOW THIS WORKS. THEY DON’T UNDERSTAND THAT OUR WAITERS ARE MAKING 40 TO 60 TO 80 BUCKS AN HOUR WHEN OUR COOKS ARE MAKING 20 TO 26 AN HOUR.>>>NOR DO THEY CARE, BY THE WAY. UNFORTUNATELY, MARK IS 100 PERCENT CORRECT. AND THE IDEA OF TRYING TO MAKE IT MORE FAIR AND EQUITABLE, BUT IF WE, AS FREETHINKING INDIVIDUAL SAY LET’S SPLIT THE GRATUITIES WITH THE KITCHEN? GUESS WHAT? IT’S AGAINST THE LAW. (LAUGHING) YOU CAN’T. AND THEN DANNY MEYER — >>>WHAT HAPPENED WITH DANNY MEYER?>>>MICHAEL, LET ME ASK YOU — >>>I REMEMBER –>>LET ME ASK YOU A QUESTION, IF YOU MADE $300 MILLION. WOULD YOU BE SO WORRIED ABOUT YOUR NEXT MOVE? I MEAN, COME ON. (LAUGHING). GOD BLESS DANNY MEYER. HE’S A TERRIFIC PERSON AND A FRIEND OF MINE. BUT HE ROLLED THE DICE I WOULD SAY MAYBE THREE YEARS TOO EARLY. ULTIMATELY, WE MIGHT HAVE TO DO THIS. BUT IT LOOKED LIKE –>>BUT DIDN’T HE LOSE HIS PLACE OR HE CLOSED HIS PLACE DOWN IN BATTERY PARK CITY WHICH HAD –>>>HE’S LIKE US. HE HAS THE EXACT SAME PROBLEMS THAT WE DO. HE’S — EVERY CHEF — THE GUY AT UNION SQUARE LEFT, THE GUY AT MARTYR LEFT. I MEAN, COME ON. NONE OF US HAS A — HE IS A TERRIFIC OPERATOR, BUT NOBODY HAS THE MAGIC TOUCH. NOBODY.>>>I HEAR A LOT FROM COLLEAGUES OF MINE THAT THERE SAYING I’M NOT DOING IT IN MANHATTAN OR NEW YORK ANYMORE. IT’S TOO ONEROUS ON OUR BUSINESS MODEL HERE. I’D RATHER GO OPEN UP IN ANOTHER STATE BECAUSE THERE ARE MUCH MORE — I TALKED TO SOMEBODY OTHER DAY WHO THEY OPENED A RESTAURANT IN ANOTHER STATE AND THEY SAID THAT THE CITY CAME TO SEE HIM THREE TIMES BEFORE THEY OPENED. YOU NEED ANYTHING? HERE, THEY COME IN AND WE ARE GOING TO FINE YOU FOR THIS. WERE GOING TO FINE IT FOR THAT.>>>THE HEALTH DEPARTMENT.>>>EXACTLY. WILLIE WAS ON MY SHOW, DIFFERENT SHOW, AND HE OPENED UP IN GEORGIA AND HE SAID THAT THE PEOPLE IN GEORGIA ARE SO WILLING TO HELP HIM. THEY WERE GIVING INCENTIVES. I MEAN, YOU DON’T HAVE INCENTIVES TO CREATE JOBS. THE ONLY INCENTIVE MIGHT GET, IF YOU HAVE A LOCATION IN MANHATTAN AND YOU OPEN UP IN BROOKLYN, YOU MIGHT BE ABLE TO QUALIFY FOR A REAP BENEFIT BUT I’M NOT SURE.>>>SOMEBODY HAS TO GET WISE TO THE FACT THAT WE ARE THE BIGGEST EMPLOYER OF PEOPLE IN THIS CITY. THAT WE ALSO BRING IN THE TOURISTS. AFTER THREE DAYS IN VIENNA, I HAD EXHAUSTED THE BEST RESTAURANTS OVER THERE. HERE, YOU COULD BE HERE A YEAR AND YOU WOULDN’T EXHAUST THE BEST RESTAURANTS.>>>I THINK WHAT HAS TO HAPPEN IS I THINK THAT PEOPLE IN OUR GOVERNMENT HAVE TO SIT DOWN — I DON’T WANT THEM TO LOOK IN THE REARVIEW MIRROR AND THINK THEY SCREWED UP THE CITY BECAUSE IT’S TURNING INTO AN AIRPORT. WERE GOING TO GET CVS’S, STARBUCKS AND CHASE BANK. PEOPLE COME TO NEW YORK FOR DIVERSITY. PEOPLE USED TO COME TO GO TO HIS RESTAURANT. NOBODY’S COMING HERE TO GO TO CHICK-FIL-A. YOU CAN GO TO THE AIRPORT AND EAT CHICK-FIL-A.>>>IT’S A POPEYE’S SANDWICH.>>IT’S ONE OF THOSE THINGS. PEOPLE COME HERE FOR TOURISM, THEY COME TO SEE MUSEUMS AND THE BEAUTIFUL SITES. THEY COME TO SEE RESTAURANTS BUT IN FIVE YEARS IF ALL OF US ARE GONE AND WERE NOT OPENING RESTAURANTS AS A WHOLE CHUNK OF THE BUSINESS.>>>IT HAPPENED IN PARIS, THE RESTAURANTS USED TO BE SO MUCH BETTER BUT THEIR LABOR LAWS CHANGED.>>>WHO ARE YOUR CUSTOMERS? ARE THEY VISITORS? ARE THEY PEOPLE FROM THE CITY.>>>PEOPLE ON THE UPPER EAST SIDE, REGULAR CUSTOMERS, CONCIERGES SEND US VISITORS AND WE WOULD PROMOTE THE HECK OUT OF OURSELVES WITH SOCIAL MEDIA.>>>I HAVE A LOT OF CORPORATE GUYS ON PARK AVENUE, A LOT OF LOCAL GUYS A LOT OF TRAVELING BUSINESSMEN.>>>WHEN I WAS TIME WARNER IT WAS A LOCAL RESTAURANT PEOPLE PEOPLE DID NOT UNDERSTAND THAT I OPENED DAY LOCAL RESTAURANT. TRIBECA WAS THE SAME THING. I’VE GOT TO SAY WHEN I OPENED TRIBECA AND I WAS COMING INTO DREW’S TERRITORY I USED TO WORK FOR DREW. OPENING SOUS CHEF I KNEW THE NEIGHBORHOOD WELL. WHEN I OPEN MY RESTAURANT IT WAS AFTER 9/11. THERE WERE YOUR RESTAURANTS, THERE WAS MAYBE 10 RESTAURANTS THAT WERE OF NOTE IN TRIBECA. NOW THERE’S 80 OF THEM. REALLY IT B OOMED UP THERE’S A LOT OF RESTAURANTS DOWN THERE.>>>SO WAIT A SECOND, IF IT’S SO HARD TO GO INTO A RESTAURANT BUSINESS WHY ARE PEOPLE GOING INTO THIS BUSINESS?>>>DID YOU EVER HEAR THAT EXPRESSION FOOLS RUSH IN?>>>SOME OF US DON’T HOW TO DO ANYTHING ELSE.>>>IT’S A VANITY INVESTMENT. I WAS SAYING EARLIER. IF YOU HAVE A COUPLE OF BUCKS IN YOUR POCKET AND YOU OPEN A RESTAURANT YOU ARE RESTAURATEUR.>>SO WHERE DO YOU MAKE MONEY IN THE RESTAURANT BUSINESS? HOW CAN YOU MAKE MONEY? YOU WERE TALKING ABOUT WHAT YOU HAVE IN FORT LEE. YOU HAVE YOUR GREAT FOOD BUT IN REALITY THE PROFIT IS BEING MADE IN THE BOOZE.>>>SOME SUBURBS ARE STARVED FOR REALLY GOOD RESTAURANTS IT TOOK JERSEY A LONG TIME TO BE READY-TO-EAT ON A TUESDAY, WEDNESDAY AND THURSDAY NIGHT. MUSIC HELPS LOTS OF SINGLES AND DIVORCED AND QUALITY. THEY’RE WILLING TO PAY FOR SOMETHING AND WE CAN GET EXPOSURE OUT THERE NOW.>>>HAS UBER HELPED YOU TOO?>>>UBER HELPS TOO.>>>I THINK THAT IS A HUGE DIFFERENCE.>>>YOU MEAN UBER AS IN TRAVEL NOT UBER EATS.>>>I THINK THEY’LL DRINK A LITTLE BIT MORE IF THEY DON’T HAVE TO DRIVE.>>>GIRLS ON THE WEEKEND AND COUPLES, THEY’LL COME THAT’S A GREAT POINT. YES, IT HELPS. DOWN THE BEACH WE GOTTA DRIVE ON OCEAN AVENUE WE HAVE ONE ROAD. IF YOU’RE PULLING OUT AT 11 P.M. ON A WINTER NIGHT, IT’S A GOOD CHANCE YOU BEEN EATING OR DRINKING. BUT IT DEPENDS ON THE TOWNS TOO. BUT I THINK THAT PEOPLE ARE READY — THEY’RE WILLING TO SPEND SOME MONEY. MAYBE NOT 150 BUCKS A HEAD LIKE NEW YORK BUT 75 OR 80 AND THE MINIMUM WAGE IS A LOWER FOR THE WAITSTAFF $2.50 AN HOUR VERSUS WHAT IS IT HERE? $11.>>>THINK IT’S $10.>>>IT’S GOING TO GO UP. THE MINIMUM WAGE GOING UP IN NEW YORK. THE TWO WEEKS PAID VACATION — SICK DAYS.>>>THOSE ARE HANGOVER DAYS.>>IF YOU HAVE A $40,000 OR $50,000 A WEEK PAYROLL, THAT’S $100,000. THE MINIMUM WAGE GOES UP TO $300,000. THAT’S FOR $500,000 FOR A NICE SIZE RESTAURANT THAT YOU TOOK AWAY.>>SO NOW YOU CAN’T GO UP IN ANOTHER RESTAURANT.>>YOU GOT TO STOP HAVING KIDS.>>>I WOULD SAY CHEESECAKE FACTORY. I NOTICED THIS YEARS AGO. WHEN YOU GOT THE MENU, THEY HAD ADVERTISING. THAT’S REVENUE, RIGHT? WE WOULD NEVER THINK TO PUT –>>>YOUR BUDDY –>>THE DINERS DID IT FOR YEARS.>>>I’M GOING TO GIVE YOU BETTER. YOU KNOW WHO’S DOING IT RIGHT NOW? SHELLY. HE HAS HIS WINE MENU IS AN ADVERTISEMENT FOR HIS BROADWAY SHOWS AND OTHER THINGS.>>INCREDIBLE.>>>SO HE IS TAKING THAT SECTION OF A MENU, A SEPARATE MENU TO TAKE OVER THERE AND HE SELLING ADVERTISING SPACE.>>THE OTHER WAY YOU CAN MAKE A BUCK — BUT THIS IS — IF YOU’RE SOMEBODY LIKE MARC MURPHY OR DAVID BURKE WHERE YOU WORK YOUR WHOLE CAREER YOU HAVE A NAME, HAD A LITTLE BIT OF TELEVISION. YOU CAN MAKE A DEAL FOR TOP DOLLAR MEANING — I HAVE IT AT THE STADIUMS AND I HAVE IT AT MADISON SQUARE GARDEN. THEY PAY US. THEY PAY US FOR OUR SERVICES. WE DON’T HAVE TO WORRY ABOUT ANY EXPENSES AND WE LEND OUR EXPERTISE. WE EITHER MAKE A GREAT HAMBURGER OR DO A WONDERFUL RESTAURANT OR WHATEVER IT IS, SO THEY’RE PAYING HIM AND HE DOES NOT HAVE TO THINK TWICE ABOUT THE PROFITABILITY BUT GUESS WHAT? WHEN WE WENT INTO HOTELS A COUPLE OF YEARS AGO, THAT WAS THE IDEA, RIGHT? BUT GUESS WHAT? I WAS UPTOWN AND I WENT TO MARSHALL. HAVE YOU EVER BEEN THERE? THEN HAD LUNCH WITH ONE OF THE MANAGERS THAT’S A FRIEND OF MINE. I SAID THE PLACE WAS PACKED AND YOUR PRICE WAS $122 PER PERSON FOR THREE COURSES. AND THEY HAD LAYERS OF SERVICE. I SAID HOW DOES IT WORK ECONOMICALLY? HE SAID ALL THE HOTEL DOESN’T CHARGE US RENT. (LAUGHING) ITS AN AMENITY.>>>IN THE OLD DAYS YOU THINK OF ALL THOSE FANCY RESTAURANTS BACK IN THE DAY, BEFORE I WAS IN NEW YORK. YOU WERE HERE EARLIER THAN I WAS BUT PEOPLE WERE IN HOTELS AND THEN ALL THE SUDDEN IT SHIFTED AND NO ONE WANTED TO BE IN A HOTEL BECAUSE IT WAS BAD BEING IN A HOTEL. I THINK NOW. HAVE TO GO BACK INTO THE HOTEL AND GET DEALS LIKE THAT IF YOU WANT TO DO AN INTERESTING RESTAURANT.>>>MOST PEOPLE ARE MAKING DEALS LIKE THAT.>>>HOTELS NEED RESTAURANTS.>>>YOU GOTTA SKIN THE CAT YOU GOTTA FIGURE OUT.>>>YOU HAVE TO MAKE IT LESS LABOR-INTENSIVE.>>>GUESS WHAT? BOBBY VANS — THINK ABOUT THIS, I USED TO BE SO ENVIOUS OF THESE GUYS BECAUSE THEY GOT AWAY WITH EVERYTHING. THEY PUT A STEAK ON A PLATE FOR 50 BUCKS. A SIDE DISH FOR 12 DOLLARS. I ONCE WATCHED A WAITER GOING AROUND A 13 TOP, BAKED POTATO OR SPINACH? ONE GUY IS PAYING THE BILL BUT EVERY TIME HE’S ASKING THE GUY IF HE WANTS BAKED POTATO OR FRENCH FRIES, SPINACH OR BROCCOLI, 24 BUCKS.>>GET TO YOUR POINT ABOUT BOBBY VAN’S.>>>I WAS JEALOUS. BUT THEN I GREW UP AT FRANKIE AND JOHNNY’S AS A KID, RIGHT. AND SOMETIMES WHEN YOU GO BACK TO A PLACE AS AN ADULT IS LIKE WHERE THE HELL AM I, RIGHT? THE KITCHEN WAS THE SIZE OF A CLOSET. THEY HAD ONE GUY COOKING STEAKS MAKING THE SALAD HE HAD A GARBAGE BAG FULL OF GREENS. HE PUT HIS HAND IN THE THING AND PUT THE SALAD DOWN, BOOM. SO IN OTHER WORDS, THE STEAKHOUSES, THEY HAD NO CHEFS YOU FOLLOW ME HERE?>>BUT IN REALITY, LET’S LOOK AT THE STAKE OPERATION WHICH IS THE NUMBER OF YEARS OLD. WOLFGANG’S. HE DOESN’T HAVE CHEFS. THERE’S NO MASTERCHEF AT ANY OF THE WOLFGANG’S.>>HE BASICALLY WORKED –>>RIGHT. HE WAS WAITER.>>HE SAID –>>>HE’S STILL PAYING SOMEBODY TO MANAGE THE KITCHEN. HE MAY NOT BE A CHEF. HE STILL GOT A PAY A BROILER GUY.>>BUT YOU NEED SOMEBODY AS THE FRONT THE HOUSE.>>BUT YOU’RE NOT PAYING $150,000.>>>YOU KNOW WHO SCREWED UP THE STEAKHOUSES? CHARLIE PALMER STEAK. JOHN GEORGE PRIME IN LAS VEGAS. BOBBY FLAY STEAK. ALL THE CHEFS — AND GUESS WHAT.>>>WAIT A SECOND.>>>DAVID BURKE STEAK.>>>(LAUGHING).>>>AND THEY COULDN’T LEAVE IT ALONE. SO LIKE A SHRIMP COCKTAIL, YOU GET THE SHRIMP IN ANY PART WITH SOME COCKTAIL SAUCE KNOW THEY HAVE TO GRILL THE SHRIMP.>>>AND ADD MANGO (LAUGHING).>>ADD ALL THE NUTS.>>>THEY SCREWED UP AND — RIGHT. EXACTLY.>>MADE IT LABOR-INTENSIVE.>>>WE MADE IT LABOR-INTENSIVE WHEN WE ADDED RUNNERS AND THAT WAS A BIG EXPENSE NOW. YEARS AGO –>>>THE WAITER COST YOU NOTHING.>>THE WAITER GOT BACK AND GOT HIS OWN TRAY AND THEY PUT THE LID ON.>>>BECAUSE CHEFS LIKE ME I WANT A SQUARE PLATE. I WANT A RECTANGLE PLATE. I WANT MY FOOD.>>>THAT’S WHEN YOU WERE A PRIMA DONNA.>>NOW I NEED TWO RUNNERS TO TAKEN A EIGHT TOP OUT.>>>REMEMBER SOMEONE WOULD SAY CAN I GET A GLASS OF WATER AND THEY SAY, I’LL GET YOUR WAITER. YOU’RE RIGHT. NOBODY WORKED TOGETHER. SO WHAT DO WE DO? THE ENLIGHTENED PEOPLE WHEN WE START, I WAS 29 YEARS OLD. WE ALL WORKED TOGETHER. WE ALL SPLIT THE TIPS TOGETHER AND THEY WERE ALL GOING TO GET SUED TOGETHER (LAUGHING) BECAUSE NOW IT’S LIKE I DON’T WANT TO SPLIT MY TIPS WITH THIS WHEN HE ONLY WORKED — AND SO, WE HAD THIS IDEA OF SHANGRI-LA. WE WERE GOING TO CORRECT ALL THINGS AS WORKERS WE SAW THE IMPROPRIETIES AND YOU CAN’T FIGHT CITY HALL. THAT’S WHAT HAPPENS.>>STATE GOVERNMENT REALLY. THE DEPARTMENT OF LABOR. I THINK THAT THE PROBLEM IS WHEN YOU LOOK AT WHAT’S HAPPENING AT THE STATE LEVEL WITH WHAT’S HAPPENING IN OUR BUSINESSES THERE HAS TO BE — THERE’S AN OFFICE OF FILM AND MOVIE RIGHT? THERE SHOULD BE AN OFFICE OF RESTAURANTS AND CATERING AND FOOD BUSINESS BECAUSE IT’S SUCH A BIG THING. SOMEBODY HAS TO STUDY IT.>>>THAT’S AN INTERESTING THING.>>I THINK ALSO OUR POLITICIANS HAVE TO GO TO LONDON AND FIND OUT WHY PUBS STILL EXIST OVER THERE. THAT’S A NATIONAL TREASURE. AND TO ME, THE BODEGA IS A NATIONAL TREASURE. WHEN I WAS A KID I’D STOP AT THE BODEGA TO GO HOME AND COOK DINNER WHEN I MET SOMEBODY I WANT TO IMPRESS THEM. WHAT DO YOU DO KNOW? YOU GOTTA SAVE THESE PLACES.>>>WE ARE ALL CRYING, RIGHT AND THEN KEITH MCNALLY — INTO DOING 1500 A DAY.>>>THEY ARE BANGING OVER THERE.>>>SERVING THE MOST OLD-FASHIONED.>>>BUT GOOD.>>>YEAH, I MEAN, IT’S FINE.>>>WAIT A SECOND. HE’S A DESTINATION.>>>FOSTER STEVEN IS RUNNING IT FOR HIM.>>>GIVE STEVEN CREDIT. HE’S A TERRIFIC OPERATOR.>>THAT’S THE ONE THING I ALSO SEE IS — THERE’S A COUPLE WAY TO DO THIS EITHER YOU WANT TO OPEN A RESTAURANT YOU CAN HANDCUFF YOURSELF TO THE STOVE BECOME THE MANAGER, THE CHEF, YOU BECOME THE BUSBOY. YOU CAN MAKE A LIVING BUT YOU’VE GOT TO STAY IN ONE SPOT AND YOU’VE GOT A WORK SEVEN DAYS A WEEK. OR ELSE, YOU’VE GOT THESE HUGE ORGANIZATIONS LIKE STEPHEN STARR GOT MICHAEL STILLMAN THESE GUYS HAVE ANOTHER TYPE OF OPERATION WHERE THEY HAVE THIS CREAM ON THE TOP WHICH IS THEY HAVE THEIR IN-HOUSE LAWYER. THEY HAVE IN-HOUSE HR, THEY’VE GOT ALL THAT BECAUSE YOU CAN’T — AND WHAT THEY’RE DOING.>>>BUT THEY HAVE A HUGE OPERATION.>>BUT EACH OPERATION.>>>THE ECONOMY IS HELPING THOSE OPERATIONS.>>>EXACTLY.>>>WHEN THEY FALL THEY GET HIT HARD, TOO. WHEN YOU’VE GOT A BIG CORPORATE OVERHEAD PAYROLL.>>>BUT IF YOU DON’T HAVE THAT CORPORATE OVERHEAD PAYROLL YOU WILL BE A BIT BY THE LAWYERS.>>>YOU KNOW WHAT THE MOST INCREDIBLE THING IS? I’VE HAD THE SPACE DOWNTOWN FOR 35 YEARS. MONTRACHET, COURT — SO THE LAST TWO YEARS WE OPTED TO GO INTO RESTAURANT WEEK. RESTAURANT WEEK IS $42 FOR DINNER. MY NORMAL PRICE FOR THREE COURSES IS $89. SO LITERALLY IS LESS THAN HALF. RESTAURANT WEEK OPENS WE SELL EVERY SINGLE TABLE AT EVERY SINGLE SLOT FOR FOUR WEEKS. BY THE WAY, THEY CALL IT RESTAURANT WEEK, IT’S RESTAURANT MONTH. THE PEOPLE COME IN. THERE’S JUST ONE PROBLEM, BECAUSE YOU’RE BUSY DOING 150 COVERS INSTEAD OF 60 OR 80, YOU HAVE TO HAVE MORE STAFF. THEY WORK OVERTIME. EVERY COOK IS MAKING $1000 A WEEK BECAUSE HE’S WORKING TIME AND A HALF –>>DISHWASHERS MAKING $1000.>>>AND THEN YOU WIND UP MAKING NO MONEY (LAUGHING).>>>AND THEY COMPLAIN.>>>THEY COMPLAIN THAT IT WASN’T AS GOOD.>>>THE PORTION WAS TOO SMALL.>>WHERE DO WE SEE RESTAURANT HOSPITALITY BUSINESS IN NEW YORK IN FIVE YEARS.>>>AND BARS AND TAVERNS, WITH TWO GUYS IN THE KITCHEN.>>>PEOPLE HAVE TO GATHER. IT’S ONE THING THAT YOU CAN’T EXPORT THIS BECAUSE PEOPLE STILL HAVE TO GATHER AND GET TOGETHER. I’M NOT SURE WHERE IT’S GOING TO GO.>>>AT LANDMARK YOU HAD THE COMMUNITY TABLE AND PEOPLE LOVED IT OVER THERE. BOBBY VAN’S PEOPLE LOVE GOING TO THE BAR. YOU’RE GOING TO A PLACE THAT’S A RESTAURANT IS LIKE A CLUB.>>>I THINK WE ARE SEEING IT IN AIRPORTS WITH THE IPADS. I THINK TECHNOLOGY WILL COME INTO PLAY. IF SOMEBODY PUT A GUN TO MY HEAD AND SAID I HAD TO OPEN A LANDMARK TOMORROW I’D SAY OKAY, BUT I’M GETTING RID OF ALL THE WAITERS, I’M GOING TO HAVE RUNNERS AND THAT’S IT. I’M GOING TO HAVE A CASHIER LIKE THE OLD DAYS IN THE DINERS AND YOU CAN ORDER YOUR FOOD AND YOUR DRINKS AT THE BAR AND YOU’RE GOING TO GET A TENT WITH A NUMBER, AND YOU’RE GOING TO PUT IT ON YOUR TABLE AND WE’RE GOING TO BRING YOU YOUR FOOD.>>>DO YOU SEE WOULD YOU OPEN UP A BOBBY VAN’S OR A DAVID BURKE AT THE AIRPORT? DO YOU THINK AIRPORTS ARE A POSSIBLE WAY TO MAKE A GOOD LIVING?>>>THE RENT IN THE AIRPORTS IS MORE THAN LIKE 15 OR 20 PERCENT RENT.>>>IT DEPENDS ON THE DEAL. THEY PAY ME A LICENSE FEE.>>>OKAY. THERE IT IS.>>>THE AIRPORTS ARE A DIFFERENT TYPE OF BUSINESS.>>>THE AIRPORT MAKES — YOU GOTTA MAINTAIN IT. YOU GOTTA MAINTAIN THEM. BUT IF YOU GET GOOD EMPLOYEES AND YOU GIVE THEM THE PLAYBOOK BECOMES A CHAIN MENTALITY.>>>I WENT THROUGH SO MUCH SECURITY — THEY HAVE THIS OPEN ATRIUM.>>>IT’S MORE INTERESTING SINCE IT’S UNION AT THE TWA HOTEL.>>OH, IS IT?>>>SO IF YOU ADD THE ADDITIONAL EXPENSE OF BEING OPERATING WITH LOCAL 6 WITH PETER WARD, AT THE HOTEL –>>>THE HOTEL HAS OVER 550 ROOMS. THEY DID A DEAL WITH JETBLUE SO THE EMPLOYEES STAYED THERE. THEY DID A REALLY GOOD JOB — THE HOTEL OPERATOR, I FORGOT HIS NAME, THEY DID A GOOD DEAL.>>>TYLER MORSE, MCR.>>SO THAT I THINK — BUT THAT’S A GOOD EXAMPLE. YOU HAVE A RESTAURANT AND HOTEL YOUR BLENDING THE TWO BUSINESSES TO MAKE THE MONEY BECAUSE YOU’RE PROBABLY NOT GOING TO MAKE THE MONEY IN THE RESTAURANT.>>>BUT THAT’S WHY — THAT’S AN EXAMPLE OF WHAT YOU HAD A LANDMARK AND WHAT YOU HAVE AT 230 PARK AVENUE AND GRAND CENTRAL. PEOPLE ARE THERE. SOME OF THE RESTAURANTS OVER THERE AT GRAND CENTRAL ARE THE WORST THINGS WHICH HAVE SO MANY PEOPLE CONGREGATING OVER THERE.>>NEW YORK CITY HAS THE PEOPLE, THE CONVENTIONS, AND THE TOURISTS. IT’S GOT EXPENSE ACCOUNTS.>>>FOR NOW.>>>MY WHOLE CAREER, I KEPT PRICES LOW AND WE ALWAYS DID VOLUME. WE WORKED HARD AND WE MADE MONEY. NOW AS PRICES GO UP, SIMPLE ECONOMICS, THE VOLUME GOES DOWN. IT’S JUST THE WAY IT IS. SO THE RENT IS HIGH, THE FOOD IS HIGH, THE LABOR IS HIGH, WE RAISE THE PRICES TO BE MEET THAT AND VOLUME IS DOWN. VERY DIFFICULT. AND WINE, WE HAVE TO HAVE ANOTHER SHOW BUT WINE PRICES ARE INSANE.>>AND FORTUNATELY YOU OWN A LIQUOR STORE.>>>THERE I MAKE MONEY.>>NEEDLESS TO SAY I’D LIKE TO THANK MY NORMAL GUEST FOR BRINGING SOME OF HIS FRIENDS CHEF MARC MURPHY, RICKY PASSARELLI, AND DAVID BURKE AND I’LL SEE YOU NEXT WEEK.>>>THANK YOU. ♪ [THEME MUSIC] ♪

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