... in the US, restaurants are working a model that is breaking down, and very few outside the industry realize it...
Could you expand on that @Hargrove ?
Sure. Malkynn offered the gist - general advice for someone opening a business from me is to not open a restaurant or a brewery. Margins are not just bad in restaurants, though, they're worse than they used to be.
I work with a lot of restaurateurs. There is a very large subset who decide to start a business because they got compliments on some food they made, or they want to be their own bosses. Three hundred cooking shows can't be wrong! But that's not far from becoming a musician because Lady Gaga got rich doing it. Before you pay for Julliard, you should know there are a lot of others sacrificed on the trip. A large number of restaurateurs have no business history at all, and evaluate price as vaguely as a young person getting his masters in basket weaving. "It's a big number, but I guess that's what I spend to get where I'm going." I feel for the ones in this spot, but I rarely see them in time to offer any tips, and the advice is usually not wanted anyway. The number in that position is high enough that a lot of local investors steer clear (the kind of investors a green restaurateur needs, who want to invest in the community and who will require business plans and such). You take a double whammy on the restaurant bet and the real estate bet - if your restaurant fails and you bought the spot, you might take a loss on that, too (if you're smart and bail instead of bleeding out on the empty-property costs). Then the 30k you spent making it into a kitchen and paying for permits gets taken out of your hide by the prospective buyer, again, because he has to demolish the kitchen, unless he's another restaurateur.
Restaurant margins are absolutely horrendous, and are increasingly subsidized by ever-more bizarrely priced drinks. For most, their sales volume is very closely linked to wages, which are long flat, contributing to food margin being even more razor thin. Most restaurants try to make it up on $3.50 for a Coke, or by having a bar. More importantly, as time went on, real estate went up and up and up, and health insurance for your employees, if you offer it, skyrocketed. The Dole billionaire started by buying diners on savings he got from working
at diners in the course of a year. Decades ago, working stiffs would go to the local Burgers & Drinks for a few smokes, some beers, a burger, a break before going home, and it would cost them an hour of their pay, so a lot of them did it. Consider how, today, just about anyone saving money mercilessly mocks the eating-out routine, because many could easily blow a day's work with the same stint.
Fast forward as food prices strain hard to keep attractive to the average wage earner, and you're trying to sell a lot of $4 beers to pay for your quarter-million-dollar reno. Subtract happy-hour surfers to whom you're giving away food, subtract tables of 4 sharing two apps and waters, subtract costs for extremely high turnover in servers, and don't forget a 16 hour workday for most restaurant owners (who often did not expect that). Worse, the restaurant down the road is desperate to get as many barflies as it can, so it's doing a four-hour-long happy hour for $3 beers. Customers show up on St. Patty's Day having slammed 3 nips of Fireball from the local package store ($3), have one Guinness at happy hour price ($4) to say they participated, take up a bar seat for an hour, then go home.
I'm not talking about outliers and really successful, well-marketed places, and 5-star celebrity chef type joints, which all exist. I'm talking everyday spots. Even the successful ones disappear very often, if you think about it, and that's after attracting the lion's share of people willing to pay a lot more for better food, which is a limited demographic. Alternative strategies appear - Five Guys sells ok burgers to Ed Sheeran for $9, Chipotle is a staffed buffet with a fixed menu and no servers. Like patrons at breweries, restaurant customers are shockingly fickle, too, and their patronage is often directly tied to the service they get from people you can't afford to pay well anymore (or offer health insurance), and who quit frequently without notice. In their defense, not many want to work for Gordon Ramsay for more than a day for 6-12 an hour, and who can blame them? Finally, despite ALL of these good reasons to steer clear, the business is actually
overheating, just like college tuition. Constantly, new spots open up as quickly as the last one closed.
Friends don't let friends open restaurants.