Detroit Restaurant Boom Losing its Luster

[Lowell]

"Want to make a million in the restaurant business?" my late friend 3WC said, "Invest three million." Mark Kurlyandchik in today's Free Press presents an excellent portrait of the cresting restaurant scene in Metro Detroit. Beset by rising real estate costs, a tight labor market and market saturation, the herd is thinning.

It is still a robust scene compare to the food desert of ten years ago but the cracks are evident. Two businesses I never understood why people got into them are dairy farming and restaurants. This part of the article highlights why.

That's what's happening to Nikita Sanches, the chef and owner of Rock City Eatery in Midtown. In the fall of 2016, Sanches reopened his cult Hamtramck hit in a larger space with expanded hours on Woodward right next to a QLINE stop. Six years after becoming a restaurateur, Sanches said he's burned out and ready for a break from the industry despite being busy.

“Since we opened up, even back in Hamtramck which was over six years ago now, it's just been 70-plus-hour weeks,” he said. “In the past six years I've maybe seen my grandmother a dozen times, an hour at a time. It just literally feels like I am wasting precious moments that I could be spending with people that actually love me and care for me. I think my priorities have changed.”

[Meddle]

And therein lies the problem. People get greedy. Their eyes get too big. Apparently he had a good thing going at the smaller location. Had he stayed there, he may have hit his stride, been able to hire effective management and have begun to relax to take more personal time by now. But noooooo, he had to try and go bigger, and more trendy.

[Seven&wyo]

It should say "Downtown area's restaurant scene is losing its luster". The restaurants on livernois, Vernor, Jefferson, West village, etc seem to be doing fine. If it's too expensive downtown then move. God I hate the Free Press

[Richard]

Meh,I supply restaurants with equipment and have a vested interest in some,they come and go,always have.

They can become a 70 hour week because most owners hate to delegate authority and want to control every single aspect.

Then you have cooks that decide to go into business,they are very good at what they do,they just suck at actually running a buisness.

Then there are the fad jumpers,cupcakes became a fad so everybody jumps into making cupcakes,the fad passes and the only thing left is the sprinkles.

Look at what lasts,comfort food,where we are at you have to figure a lunch averages $7 to $10,no matter where you go fast food or not.

So you make a lunch that the adverage person can afford which creates volume,it can be profitable and long term as a buisness.

People can afford to have a $7 lunch 3 or 4 times a week and are more inclined to then visit a fancy $100 restaurant on a Friday night as a once or twice thing per month.

Then there is the misconception of going into a small buisness in order to make millions,it rarely happens,at best you can have a decent income,not based on hours invested,live comfortably while purchasing the property that you have your buisness located in,then in the future your payoff is the appreciation on the property.

You see it all the time,restaurants in the same place,30 40 years,owner passes and it is over,closed.

In the last two years I must have seen at least 50 micro breweries open and close,but yet you guys have a simple hot dog place that has been in buisness for 30 plus years and is expanding and successful.

All you are really there for is to provide the most amount people the best meal that you can provide at the fairest price that you can.

We have $1 Tuesday,for $1 you get either an empanada,stuffed potato,or a devil crab.

A devil crab is crab meat rolled into a ball then rolled in crushed Cuban bread crumbs then deep fried.They are about the size of a hardball.

So 2 devil crabs and a small soda or pop,$3 and it is filling for most adults.

We sell over 2000 per Tuesday,after costs that one day pays the monthly rent.

You do not have to try and outdo the last person.

[13606Cedargrove]

Richard, as a former restaurant and hotel guy, I could not agree with you more. For a smaller operator, the long term payout is in the real estate, not the operation. The operation is on a break-even or perhaps a slim margin at best. If you rent you are at the mercy of your landlord. If your business model works today, it can be blown up quickly when your lease is up for renewal.

Regarding Mr. Sanchez' remarks: I got out for many of the same reasons, but primarily the hours. It is not just the amount of time, it is the time you miss with family and friends, and the life events cut short and overshadowed by work. I saw many divorces when I was in the business. Thankfully, I quit before the damage was done. A family run operation can mitigate this somewhat.

It is no mystery to me why the success rate is so low in the hospitality business.