Author Topic: Finding a restaurant manager to take over (passive income)  (Read 1859 times)

jeromedawg

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Finding a restaurant manager to take over (passive income)
« on: February 13, 2017, 07:37:31 PM »
Hey all,

Some of you may have seen my previous (and some recent) posts about my in-laws and their restaurant business. It does OK and they've recently signed up for Grubhub and Eat24 but it's not the most happening place (not in a super great neighborhood and waitstaff has been there forever so they're not the most highly motivated group - her parents feel bad letting go of anyone too). But they're at the age where they really need to retire. Problem is they are pretty prideful and don't want to - they think working and keeping themselves busy will keep them "young" but in reality my wife and I see them working themselves into the ground. They are at the restaurant from 11am-12am every day a majority of the year. The restaurant never closes and it's literally their first child.

My wife thinks it's impossible to convince them to get a manager to take over at this point. But even if we were to, do you guys think it's a good idea (versus them walking away...because they likely won't be able to sell it)? They would obviously take less of an income but not having to work yourself into the ground past your 70s is probably a pretty good tradeoff for less money. They seem to have trust issues along with the pride of not wanting anyone but themselves to run the place. Even if it means them slowly fading out of the picture. But I just figured it would be sort of ideal and a no-brainer if they can find someone they can trust and are willing to stop working themselves into the ground... I know it sounds sort of counter-intuitive and bizarre the way they are but it's just so engrained in their heads that "hard work pays off" - they're also the kind of people that never wisely invested their money.

In any case, I'm trying to think of ways to convince them to stop killing themselves and hiring a manager. My wife just thinks this isn't possible. Wanted to hear from others who may have been in a similar situation with *extremely* stubborn parents who actually listened to someone else and took action for the first time in their lives.
« Last Edit: February 13, 2017, 07:40:48 PM by jplee3 »

Retire-Canada

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Re: Finding a restaurant manager to take over (passive income)
« Reply #1 on: February 13, 2017, 07:54:37 PM »
Well i have totally failed to get my parents to do anything I think would be smart given their ages - now in the 90's. Stubborn as fuck. And frankly as they are adults and competent they get to choose how to live their lives regardless of how sub-optimal the choices seem to me.

If your in-laws won't change then let them do their thing until they can't any more.

okits

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Re: Finding a restaurant manager to take over (passive income)
« Reply #2 on: February 14, 2017, 01:49:15 AM »
I think a huge problem with your plan is if the restaurant doesn't make enough to pay and retain a good manager, with profits left over to trickle down to your ILs.  IIRC, the only way the place stays afloat is because they work for the equivalent of slave wages (70+ hours a week x two adults).

(My own parents are retired so I don't have first-hand experience to share with convincing them to slow down.  But I do think your wife has a point, and what may be healthiest for your ILs may not be what makes them happiest.)

former player

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Re: Finding a restaurant manager to take over (passive income)
« Reply #3 on: February 14, 2017, 02:23:09 AM »
Based on my family members, you will have to wait for a physical crisis that makes continuing impossible.

Sorry.

undercover

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Re: Finding a restaurant manager to take over (passive income)
« Reply #4 on: February 14, 2017, 03:00:43 AM »
Yeah, I don't think you'll ever convince them to even try. Not only will the new manager have free reign over the staff, which I'm sure the in-laws would be adamantly against, it's going to be equally as difficult to find a great manager to run a mid-range restaurant and expect to make any sort of meaningful profit. That's just my guess.

My other hunch is that it's the type of place that has plenty of local regulars and wouldn't survive without the relationships formed between the owners and a loyal set of patrons. If so, that's nearly impossible to replace without rethinking the entire operation. Maybe that's not actual case but the in-laws think that their presence and relationships are the only thing keeping the place together. Could be an illusion, but might not be either.

The sad truth is that I don't think many people can expect to automate a restaurant business like you can a stock portfolio unless it's already a top performing restaurant (or a highly perfected franchise model) and you can afford a manager that will treat the place like their own. And I think even then you'd need to check in fairly regularly. I mean it's not like it can't be done - but it definitely has to be done correctly the first time. I guess it just depends on how much they rely on this income (I'm assuming a lot?) as to whether or not it's something they should attempt at all.

MayDay

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Re: Finding a restaurant manager to take over (passive income)
« Reply #5 on: February 14, 2017, 04:08:33 AM »
You post about this regularly and every time.

YOU and your WIFE have all these ideas about them retiring or hiring a manager.

Never once have you said that THEY want to change anything.

My advice is to stop worrying about your in laws and their restaurant and live your own life. You aren't going to change them if they don't want changing.

chasesfish

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Re: Finding a restaurant manager to take over (passive income)
« Reply #6 on: February 14, 2017, 05:48:16 AM »
Good luck - You have to slowly allow their burden to not be your burden.

On another note, you can't really "hire" a manager unless its a franchised fast food business, in which case the owner is still pretty involved in oversight.  You'd have to find a young and motivated operator that's willing to come in and work for equity.

jeromedawg

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Re: Finding a restaurant manager to take over (passive income)
« Reply #7 on: February 14, 2017, 09:09:13 AM »
Thanks all. Sounds like we'll just have to let go of it. One issue is that they ask my wife for help with things and sometimes it's just too much. The other part is that they seem to care more about the restaurant then their kids and grandkids. But if that's how it's gonna be then that's how it's gonna be. And even trying to find a manager (or getting one) probably wouldn't change things.... on top of that, it probably wouldn't be worth it because it would be hard finding a good/honest one and they'd probably have to pay quite a bit. I don't know what their overhead is but they bring home a fair amount. I wouldn't call it the most "successful" profit to come home with working that many hours though, as okits alluded to above. They don't *have* to work 13 hours a day every single day but they seem to *choose* to.... not realizing that it's probably hurting them more than harming them. They're scared that if they retire or work less they'll be "bored" or something. I guess in that sense the restaurant is their life. They can't even cut back to 8 hour days, and telling them to close 1 hour earlier (because they used to be open till 1am) was a huge thing for them to let go of.

Her parents have *talked* about changing things and retiring but it's never a reality. The way they're going now, they will just keep working themselves into the ground.

I think they want to leave us out of their woes with the restaurant but my wife ends up getting involved to help them because they can't figure certain things out (e.g. working with Grubhub and Eat24, and also the CPA who does their taxes, etc) and then they ask her to help... of course she does because she feels bad for them, as they are her parents. She tells me she can handle it now but as time goes on I don't know (especially with a second on the way). And with her aging parents, she tells me it's obvious they aren't as sharp as they were before and are sort of losing it... kinda sucks because it seems like there's literally nothing we can do to help or make them realize this (they will likely think they know better about everything until they pass - my MIL always asks why my wife doesn't take her advice...). Her parents seem oblivious to it or in denial. What can you do I guess *shrug*

Ugh, how easily I forget: http://forum.mrmoneymustache.com/ask-a-mustachian/retirements-for-my-in-laws-while-maintaining-their-ownership-of-the-restaurant/ - I guess this thread is more of an 'update' to that than anything. Asking about hiring a manager is probably a grasp-at-the-last-straw type of thing at this point.

As a quick side: they do have a pretty 'senior' person there who manages the restaurant if they have to step out or are gone on the *rare* vacations they go on. My wife knows they trust her and was thinking she might be the *closest* thing they can get to a manager (to take over) without having to go out looking for a new one.
« Last Edit: February 14, 2017, 11:02:53 AM by jplee3 »