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Old 07-20-2009, 02:17 PM
 
Location: Austin, TX!!!!
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So as I continued unpacking last night (it's never ending - I never want to move again!) I came across a photo of my husband and me that was taken at dinner on my birthday almost 10 years ago. The name of the restaurant was Jean Luc's Bistro - which was a very good french restaurant as I remember. At any rate, I thought it would be cool to go there again for my birthday 10 years later and looked for it on line. IT'S CLOSED! I now need to add that to a growing list of nicer restaurants here in Austin that have closed during the decade we'd been gone: Granite Cafe, Gilligans, Mezzaluna, and I am sure there are others that escape me right now or that I haven't realized are closed.

What gives? Why did these higher end restaurants close in the past decade?
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Old 07-20-2009, 02:28 PM
 
Location: Austin, TX
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Restaurants are the riskiest business you can go into. More restaurants open and close in the same year then any other business around. They rarely make money on their food, the profits are in the drinks, food and atmosphere is just something you have to do to get people in the door.

I have seen several decent restaurants open and close a few months later in my area before I got around to trying them. Some had very poor visibility from the street, a recipe for disaster in my opinion, as getting the word out and generating enough interest to get people to try the place is probably the hardest part of making it successful.
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Old 07-20-2009, 02:32 PM
 
Location: Austin, TX
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Restaurants are one (if not the) highest failing businesses. There are a variety of reasons, but a couple of the most common:
- Not enough cash investment at the start. There are big loan requirements to build a restaurant (or just to refit a building and buy equipment) and then you need operating funds to build a clientel and survive a few bumps in the road.
- Mis-management. Lots of people get into the business because they are very social and/or know a lot about good food. Problem is, there is a LOT of work required to start up a restaurant and there is always the bottom line to worry about. Some owners tend to 'siphon' off a little too much profit for their own use or to expand to soon. Many have no real business background, but think they know how to do it just fine.
- Competetive market. The restaurant market in most major cities is operating near saturation at any given time. To succeed, you need to take business from someone else. That can be hard to do.

Some of the places that make it through their first year fall victim to complacency and fail to invest the regular effort it takes to stay on top. Very small losses in sales may look insignificant on a month-to-month basis, but momentum is a huge factor in the dining business. Once you start seeing a decline, it is very hard to turn it around.
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Old 07-20-2009, 02:47 PM
 
Location: Austin, TX!!!!
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But Mezzaluna had been open over 10 years and Jean Luc's Bistro a while too. Granite cafe was a fairly new place when we ate there so it hadn't been open for more than a few years.
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Old 07-20-2009, 02:53 PM
 
Location: Austin, TX
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That probably falls into my last category....declining attention to detail, I am guessing. Not sure, I had not been to them in a while and I am not even sure when they closed.
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Old 07-20-2009, 03:36 PM
 
Location: Unobtainaville
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I think places like Gilligan's, Mezzaluna, and the Bitter End (I have great memories of all 3) fell victim to skyrocketing rents in the warehouse district. The business model that could afford rent $X could not afford rent $4X. Right now, there are many restaurants losing money on 2nd street due to outrageous rents... but they are hoping it is a initial temporary loss, until the downtown upscale dining market catches up with the condos opening up.

At least we still have Malaga Tapas bar, although it has moved into more expensive digs. Plus there are all sorts of newer spots... Moonshine, Mulberry, Garridos... Plus we have Churascurrias now: Estancia (local) and Fogo De Chao.

Jennibc, you are in SW Austin, right? You should try out Cafe Milano on SW parkway. It's not fine dining, but a casual cafe (and a little weird with few tables and lots of couch seating) but it's different from anything else in town -- real authentic European experience. The coffee and crepes are great, so is the Pizza.
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Old 07-20-2009, 03:52 PM
 
Location: Austin, TX!!!!
3,765 posts, read 8,470,696 times
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Quote:
Originally Posted by atxcio View Post
I think places like Gilligan's, Mezzaluna, and the Bitter End (I have great memories of all 3) fell victim to skyrocketing rents in the warehouse district. The business model that could afford rent $X could not afford rent $4X. Right now, there are many restaurants losing money on 2nd street due to outrageous rents... but they are hoping it is a initial temporary loss, until the downtown upscale dining market catches up with the condos opening up.

At least we still have Malaga Tapas bar, although it has moved into more expensive digs. Plus there are all sorts of newer spots... Moonshine, Mulberry, Garridos... Plus we have Churascurrias now: Estancia (local) and Fogo De Chao.

Jennibc, you are in SW Austin, right? You should try out Cafe Milano on SW parkway. It's not fine dining, but a casual cafe (and a little weird with few tables and lots of couch seating) but it's different from anything else in town -- real authentic European experience. The coffee and crepes are great, so is the Pizza.
Thanks for the tip!

If restaurants have to continually close because of higher rents, then who replaces them? I mean doesn't it make more sense for the landlords to keep tenants than having empty spaces? Or do the spaces that were once restaurants rent out as something else? Something with a higher profit margin?
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Old 07-20-2009, 04:04 PM
 
Location: Unobtainaville
9,762 posts, read 18,278,861 times
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Quote:
Originally Posted by Jennibc View Post
Thanks for the tip!

If restaurants have to continually close because of higher rents, then who replaces them? I mean doesn't it make more sense for the landlords to keep tenants than having empty spaces? Or do the spaces that were once restaurants rent out as something else? Something with a higher profit margin?
Yep, they are getting replaced by things with higher profit margins that are even more upscale, I think. Mezzaluna is now some Asian restaurant with $30+ entrees, and while I'm not sure about the others exactly.. I do know the Warehouse District now has a couple of new high-dollar bottle lounges, where a typical order might be a $200-$500 bottle of vodka... dunno how well those are going to do, but these places started popping up at the end of the housing boom... before credit card companies actually cared about your ability to pay your bills
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Old 07-20-2009, 04:51 PM
 
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A lot of the new restaurants are chains, III Forks, PF Chiang, Trulucks, North, Flemings,McCormick & Schmicks, Ruth's Chris...and others.... it's sad. I loved Mezzaluna and Granite, but the same owner has opened up a new place on Bee Caves at 360, The Grove, which is pretty good.
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Old 07-20-2009, 07:13 PM
 
Location: Austin
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Also take into account that restaurants are a lot of work to run. Many profitable restaurants close down, because the owner gets tired of constantly having to micromanage everything.
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