Wednesday, December 20, 2006

Restaurant investors 'check their brains at the door'

An anonymous restaurant employee tells

On 12/7, several investors actually had a fruit fight and were throwing glasses at each other! One of the investors stood on their imported Italian bar and proceeded to ask the guys as loudly as he could, "Where are we going now? To find some c--ts? ...

They ignore doomsday signs (an average of 5 covers for lunch and oftentimes not much better for dinner) and keep emptying their wallet into what is such an obvious failure to the rest of the world.

I asked Tim Stannard about investor relations last week, since he ends up with lots of small investors for each of his restaurants as a matter of strategy, like say around 30. He explained they very carefully screen investors with an application touching not only on finances but also how they plan to patronize the restaurant, what times they like to eat out, will they bring their spouse, will they do business events.

In at least two cases, investors had to live in the neighborhood around the restaurant. This is partly because they can then serve as more frequent customers and are in a better position to market the place to friends.

"We asked a lot of questions early on and got a sense of what their character was," Stannard said.



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