11 replies to this topic

[robert brown]

As they attain a certain level of notoriety in the food world, many chefs become restaurant developers, investors and media figures. Chefs invest not only in their own restaurants but also in ventures of other chefs. They join the pretentiously named groups ("Chef's Conclave") that design or endorse airline meals. They do television programs. This is a recent phenomenon, one that barely existed in the early part of the second half of the 20th century.

All these things take chefs away from the profession they first embraced. They are businesspeople first, cooks second -- if at all.

Therefore:

Does the culinary ledger show more of a deficit by having branches of famous chef restaurants in Las Vegas, Palm Beach, London, Paris, and even New York?

Are we better off when a top chef branches out to lower "price points" and into even an entirely different kind of cuisine, or does it seem rare to you that an intelligent and energetic chef can conceive and oversee a multitude of restaurants without sacrificing his or her culinary development?

Can a chef satisfy both investors' need for steady profit growth and his or her own artistic standards?

Has this playing for higher economic stakes cheapened or de-romanticized or de-personalized dining as you have come to know and enjoy it?

In general, then, do you welcome this new variant in dining out, or are food lovers worse off because of it?

[John Whiting]

The dichotomy that you identify is not, I think, so much a product of what an individual chef might decide, but rather the result of a world ethos in which money is God and marketing is the highest art form.

My own response -- and it is private and introspective rather than reformative or campaigning -- is to seek out those chefs who might in another context be identified as "drop-outs"; i.e. those who know exactly how and for whom they want to cook, be it traditional or cutting-edge, and who are content with the small and possibly growing number of like-minded diners who will seek them out and support them. A surprisingly large number of Paris bistros seem to fall into this category. Some become famous, some tick over comfortably, some sink without a trace. But through it all there is a whim of freedom in the air.

[Jonathan Day]

What follows is written in some ignorance of actual practices in restaurant finance (though not of corporate finance in general). It would be good to get comments from those more knowledgeable about the actual financing of restaurants and its implications for their management.

I wonder whether an outside-investor model works for a restaurant -- that is, ownership in the hands of people who don't also have human capital invested in the operation. Equity investments in most restaurants, I would guess, are private placements; I cannot imagine Ducasse or Boulud, however ambitious, trying to float their restaurants on public markets. Chicago's Lettuce Entertain You Enterprises is still in private hands.

We know that some businesses should never be owned by outside investors -- law practices, for example, where even if were not generally illegal to have non-lawyer partners, there is no way that an outside investor or her agent could properly evaluate the actions of lawyer employees. A similar argument may apply to medical practices and explains many of the problems of the HMO movement in the US.

And I think something like this may apply to serious restaurants, where the chef's first goal may be to hit some sort of culinary standard, with financial reward a secondary, if important outcome. Outside investors need margins and they need growth. The business cannot stop where it is and work on quality: it must keep growing. To this add the fact that many investors nowadays have entirely unrealistic growth aspirations (e.g. consumer businesses growing at several times the speed of the economy).

Once a chef becomes responsible to outside investors it is hard to see how he or she could stop seeking new growth, new options. And this means diversification: downscale menus, variations, additional locations. It is hard to see how this cannot lead to some decline in quality.

[herbacidal]

i think it is fine that chefs try opening different restaurants at different price points culinarily, as long as they don't let their standards for quality drop when they have to expand. Frozen foods, on the other is ridiculous.

an old maxim that i remember is something to the effect that if you are an A person, you have to hire A people to work with you, if you take a slight step down and hire a B person, the slide will naturally continue, because eventually the B person is tired of looking for enough B people and hires a C person.

i don't like a chef having too many outside investors. it's like the same role that venture capitalists have in corporate financing, especially the technology portion.

all in all, IMHO, the cash infusion is not worth what you have to give up: commitment to profitability over quality (with less investors, it is easier to find that acceptable balance of the two)

More than anything else, it's about spreading yourself thin. If you are going to try all these new ventures, then be damm sure you have top level people that will support you and keep the quality high. More often than not, this isn't the case.

[John Whiting]

One should bear in mind that a certain number of ambitious but (possibly) misguided young people who care little about food see chefing as a road to instant riches. Some of them get financial backing. And some of them, alas, succeed.

[Jonathan Day]

John, I would only observe that most people who start restaurants (chef-owners) work very hard and make very little money. This is not a profession to take up if money is the first objective. The odds are against making any profit at all; many chef-owners keep their businesses afloat by paying themselves, and family members, subsistence wages.

Yet a few chefs "make it to the big time". For those more knowledgeable among us: how likely is it that this was the initial plan? Or was it more of a lucky break for a few cooks who never expected to make more than a meagre income?

[JAZ]

My thoughts on this topic are from the point of view of the diner, not the chef, and certainly not the owner or investor (I'm afraid I can't add anything to the discussion from those viewpoints). I begin with a short personal reminiscence, but bear with me; there is a point.

My family didn’t eat out very often while I was growing up (large family; government salary). When we did go out, it wasn’t to three-star restaurants, either, just your run-of-the-mill family places. But regardless, because it was rare, it was a big deal. We planned, we looked forward to it, we dressed up, and it was special. I don’t remember the food; I doubt it was anything great. But I do remember the occasions.

And even though I eat out much more often now, I’ve continued to nourish the feeling that eating out at high end places is something special. Even if I could do it financially, I wouldn’t want to go to French Laundry, Fifth Floor, or Chez Panisse every week (and understand that I’m merely picking out local names at random here, not making any claims about the quality of the food).

Now, I know I’m an anomaly among the posters on sites like e-gullet. But I think most people carry at least a little of that feeling that fine dining should be special. And I think that the sense of “specialness” I’m talking about starts to disappear when the dining experience is too easy to come by. When eating at one of these restaurants isn’t a big deal anymore, I think it’s bound to be a lesser experience for the diner.

So, in that sense, I think the very fact that a chef expands, opens more restaurants – or restaurants at lower price points – dilutes the pleasure of eating at the original. And in this sense, I think the details of how and why a chef expands are irrelevant (whether a well planned and apparently thoughtful expansion like Ducasse’s or a misguided attempt like Wolfgang Puck’s canned soups).

But now, another side:

From another angle, though, I applaud the thoughtful expansion of high quality restaurants – like that overseen by Ducasse, which seems to retain most of the quality of the original restaurant – because it does expose more people to better cuisine, and I think that’s a worthwhile goal. [And if you’re thinking that I can’t have it both ways, I know that. It’s one of the things that keeps me up at night.]

From this angle, there’s obviously a big difference between various types of expansion. Here, maintaining something close to the original quality is crucial. I don’t think such quality can be maintained below a certain price point, for example, and it certainly can’t be maintained with mass marketed prepared foods (I hate to keep picking on Puck, because I have no experience eating at his restaurants, but his frozen pizzas and canned soups are no better than Stouffers or Campbells, and do nothing to expose anyone to good cuisine). Discussing the criteria for what constitutes “good” v. “bad” expansion, would, of course, require a whole separate post.

I suppose the best of all possible worlds (which is probably close to what actually happens) would be one in which some great chefs keep their places small and special (or stick to one place), and some others expand carefully and thoughtfully.

[Lord Michael Lewis]

I've said this before somewhere, but; no chef opens a second restaurant because he loves cooking.

[macrosan]

And even though I eat out much more often now, I’ve continued to nourish the feeling that eating out at high end places is something special. Even if I could do it financially, I wouldn’t want to go to French Laundry, Fifth Floor, or Chez Panisse every week (and understand that I’m merely picking out local names at random here, not making any claims about the quality of the food).

Now, I know I’m an anomaly among the posters on sites like e-gullet. ...

I think it's important to say that this last sentence is almost certainly not so. Those at eGullet who eat out at high-end restaurants even as often as once a week are a tiny minority. Those who eat out at the top restaurants as much as once a month are probably also a minority here.

Because they eat out most often, they tend to post more often to review their experiences. And so the perceived "view" of the membership of eGullet is inevitably skewed. My experience in speaking to and corresponding with many eGullet memebrs is that what JAZ says is indeed the norm here. Most of us view eating at a Michelin 2-star restaurant as a special occasion.

That "specialness" can easily be destroyed if the chef (or owner) is distracted away from doing what he started doing that made his restaurant one of those special destinations. The specialness will also be tarnished by a lower reputation being gained by the chef/owner on a less successful venture. And I cannot think of any expansion venture by a named chef or owner which was more successful than his original.

[Fat Guy]

In response to Macrosan, who wrote, "And I cannot think of any expansion venture by a named chef or owner which was more successful than his original."

Many believe Nobu New York is more successful (both financially and in terms of cuisine) than Matsuhisa Los Angeles. Jean Georges was Vongerichten's third or fourth restaurant and has been more successful in every way than its predecessors. Many would say Alain Ducasse Paris is the best of his restaurants, and it came after Monaco. There are certainly those who feel Craft is better than Gramercy Tavern.

Not to mention everybody knows Big Nick's Pizza Joint Too is better than Big Nick's Original Burger and Pizza Joint.

[macrosan]

In response to Macrosan, who wrote, "And I cannot think of any expansion venture by a named chef or owner which was more successful than his original."

...

Not to mention everybody knows Big Nick's Pizza Joint Too is better than Big Nick's Original Burger and Pizza Joint.

You know, in the back of my mind was the thought that I was wrong about this. A nagging doubt inside my head kept saying "There is one chef who broke this particular mould". And of course, it was indeed Big Nick, who created such a huge international furore when he dropped his famous Big Nick's Refried Bean Burger with Ketchup and Mock White Truffle Shavings" from the menu at his new place on 2nd and 26th.

I withdraw my previous totally unsubstantiable claim. Thank you.

[Jonathan Day]

Don't we need to distinguish between a learning effect (open 1st joint, learn from mistakes, open 2nd) and the problem of a chef being spread too thin between restaurants?

In Ducasse's case, for example, did the quality at the orginal establishment in Monaco suffer after he opened ADPA? ADNY? My guess (but I don't have the data to substantiate it) is that it did not. Ducasse apparently went to some lengths to cultivate and recruit Franck Cerruti for Monaco, and to ensure that the founder's standards were maintained. The cookery school must contribute to this, as must Ducasse's codification of methods in the numerous cookbooks he has produced.