Posted On: 09/15/2006
Tucked away in the back of the mind of many a restaurateur is the notion that one day he or she will clone the business –
perhaps more than once – and achieve fame and fortune with multiple locations. If the dream really runs rampant, the
F-word – franchise – may also enter the fantasy.
After all, if an establishment creates a unique niche, serves a great product and delivers it with fantastic service, the sky’s the limit, right?
Not so fast, some experts say.
Sure, you can find plenty of examples of restaurants that started small and made multiple locations work, including many of the fast-food joints that litter virtually every corner of the landscape. But what you don’t see are the ghosts of those who tried and didn’t make it, possibly far more than the number of fast-food places in the entire country.
In an industry where roughly 60 percent of businesses fail within the first three years, the odds against success are pretty staggering. One local success story is the chain of Brevé Espresso Co. coffeehouses – with some franchises owned by other folks – that Kevin Wiesehan started almost a dozen years ago.
An aeronautical engineer by training and entrepreneur by nature, Wiesehan has traveled a long road from airplane designer to heading a mini-coffee-brewing empire in St. Louis. He was an engineer on special assignment in Seattle several years ago when he became smitten with the coffee there. On visits back home, long before Starbucks and other chains entered the market in St. Louis, he lamented our city’s lack of great coffee. He began going to coffee seminars and conventions, learning about beans, roasting and brewing. Then, he surprised his family and friends when he quit his engineering job and came back to St. Louis to open a coffee shop Downtown.
Eventually, Wiesehan opened more locations and then built and licensed Café Brevé shops in the area. He also roasts coffee beans and sells them to other businesses. He is the specialty coffee supplier for Bunn International, and Shop ’n Save recently added his product to its shelves. His is a success story.
Would-be restaurateurs, however, make many mistakes, including believing that having worked in the business will make them good restaurant owners.
Nothing could be further from the truth, Wiesehan said. “Working in a restaurant and owning a restaurant are as different as night and day. The person that’s worked in a restaurant for 10 years and thinks they can run one doesn’t know anything about 90 percent of the business. More important is somebody with business savvy that understands cost of goods, profit and loss, rent, overhead, labor, systems and structures and management and promotional material.”
The successful owner has to make smart decisions, hire the right people, have the right attitude, continually monitor things to keep costs in line and spend money on advertising that brings customers in, he said.
“Someone who’s just worked in a restaurant doesn’t completely understand all that,” he said. “One of the biggest pluses you can have is to have owned and run a different business with employees – not managed it, owned it. There is a huge difference. The bottom line profit-and-loss statement isn’t coming out of your pocket [when you only manage a place]. When you own it, you are the bottom line for any catastrophic thing that can happen to you.”
A common pitfall is opening additional locations before you’re really prepared for it, Wiesehan said. He doesn’t advocate closing a store, but notes that failures can be valuable lessons in the school of experience. “If you do [make the decision to close] yourself instead of taking advice, you just learn it that much better and harder. If you take your equipment and move it somewhere else and take your losses, you’re going to know darn well what not to do next time,” he said.
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