Foodies Can Only Dream: Pros Dish on the Restaurant Biz

Almost everyone, at one time or another, dreams of opening a restaurant-holding forth at the copper-topped bar as you welcome stylish and good-natured customers, fielding compliments for the divine food, pouring exquisite wine and chatting with happy customers as they take their leave, vowing to return soon (with lots of friends).

Then there’s the other side of the table: rapacious landlords, broken refrigerators, loopy staff members, petulant chefs, impatient investors. As for myself, I have never yearned to enlist in that noble profession, preferring instead to take my chances as a professional poker player or investor in a wildcat oil well in Vermont.

The truth lays somewhere in between these two conceptions of the restaurant biz, as I learned last weekend at a two-day seminar entitled “How to Open a Restaurant … and Make It Last,” which offered invaluable information for both the restaurateur manqué and diners alike.

Organized by the Myriad Restaurant Group (Montrachet, Nobu, Nobu Next Door, Tribeca Grill), the conference attracted 80 assiduous participants from around the country as well as individuals who already owned restaurants and came for a little post-graduate study.

If I were one of the participants who had paid $995 for the two days, I might have bolted for the door in the first hour when Drew Nieporent, president of the Myriad Restaurant Group, and other panel leaders started off on a fearsome note by stating that four out of five new restaurants close within five years. And more often than not, we learned, food has little to do with it: It’s all about real estate. Frequently, when leases expire, the landlords-who are not exactly known as an altruistic fraternity-escalate the rent beyond the establishment’s means. They have no choice but to close or move.

There was no shortage of landlord bashing during the conference.

“Every landlord thinks he owns the Taj Mahal,” averred the always-diplomatic Mr. Nieporent. “So rent anywhere in Manhattan will be high. ‘Market rent’ is simply the highest price some schmuck will pay.”

The potential restaurateurs I spoke with at the seminar seemed to be levelheaded and intelligent folks. Yet I sensed a difference between these entrepreneurs and, say, someone who desires to open a clothing shop or stationery store. All exude a passion for the métier, a love of food and a man-the-torpedoes determination to sail ahead, whatever materializes over the horizon. In short, some are a little crazy.

Following are some morsels of information from the seminar that I found compelling-some of interest to the edgy entrepreneur, some for the avid diner:

· According to one Gary Worden, publisher of a magazine called Restaurant Startup & Growth (talk about narrowcasting), approximately 60,000 restaurants will open in 2004, or around 165 a day; some 25 percent will close before their first birthday.

· Martin Shapiro, a partner in Myriad, expounded on a restaurant issue that comes up frequently in the press: Do regular customers deserve special treatment-an extra appetizer, a glass of wine on the house? He posited that, yes, best customers deserve a little preferential treatment, like all service businesses. “All of your customers deserve a high level of service,” Mr. Shapiro said. “But if ‘preferred’ clients come in, there is nothing wrong with giving them some extra attention.” My friend Bill Rice, former food writer at The Chicago Tribune , put it aptly years back: “You have to realize that restaurants are not democratic institutions.”

· When a diner waits an excessive amount of time for a dish, in most cases it is not the server’s fault. Nine times out of 10, the kitchen has fallen behind. In this case, the shortcoming is management’s responsibility. Address your complaints to the manager on the floor, or later in a letter. Many customers-and restaurant critics-unfairly come down on the server.

· Mario Batali, one of the most recognizable celebrity chefs in the country and a seminar panelist, downplayed the television-driven cult of chefs, insisting: “The average diner comes to a restaurant to interact with friends at the table. And the food. They don’t give a shit who’s cooking.” Chef Batali-whose high profile from his television cooking show is an exception to that rule-offered a couple of news flashes for hard-core New York restaurant followers: He and his partner, Joseph Bastianich, plan to open a new restaurant adjacent to his wildly popular Esca, on Ninth Avenue and 43rd Street. It will be a classic Italian restaurant (whatever that means) called Del Posto. In addition, he’s opening a French bistro in the Broadway theater district.

· Mr. Nieporent related an astonishing experience he had that illustrated how outlandish the restaurant real-estate business can be, at least in Manhattan. When the lease for the Rainbow Room became available several years ago, the leaseholders approached Mr. Nieporent about taking over the property. “We talked about it, and then the issue of rent came up-they wanted $4 million a year!” he said. “I calculated that, and it came out to about $10,000 a day. How would you like to drive to work every day looking at that?” Soon after, Harry Cipriani-whose eponymous Italian restaurant is at Fifth Avenue and 59th Street, took over the Rainbow Room for an undisclosed figure.

· Here is something to consider the next time you order wine in a restaurant: According to the experts on the panel, wine is marked up between two and two and a half times the retail cost. Wine by the glass, however, is marked up four times-a bonanza for the restaurant. Cocktail markups are staggering: If you order a martini for $12, it costs the restaurant about $2. Same with beer: Beer costs the establishment an average of 50 cents, and it sells for about $6. And do you shudder at having to flip through a wine list with as many entries as a small-town telephone book? Go online and choose a wine beforehand.

· The respected food and wine writer Alan Richman, who sat on a panel called “Critics and Trends” with myself and writer Ed Levine, offered one of the more consumer-friendly observations of the day, quoting from his article called “The Restaurant Commandments.” We have all been in this situation: “STOP SCAMMIN’ US WITH SPECIALS: Nothing is more annoying than an off-the-menu côte de boeuf special for two, lovingly described by a captain, that appears on your check at a shocking $79.95. No, the price tag should not be announced tableside-that makes everybody feel cheap and creepy. The solution is to keep the price of specials in line with other menu items. Nobody should have to take out a loan to have the pasta of the day.”

In conclusion, there was a comforting observation by chef Jean-Georges Vongerichten, who in a letter to the wistful assembly declared, “The beauty of the restaurant business is: No one leaves without paying.”