The Restaurant Doctor |
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What kind of doctor is Ron Gorodesky? A general practitioner, you'd probably
say, since he doesn't specialize in one area, such as ears or menus or knees
or recipes. He doesn't operate, either, but he knows what it takes to operate
a restaurant successfully.
But only 30 percent of his clients-who span the East Coast, from Newport,
Rhode Island to Key West, Florida-are restaurateurs. A significant amount
of work comes from accountants, lawyers and banks that hire him for the
expertise he can bring to relationships with their restaurant clients.
"Being a good consultant," he says, "is a lot different
from being a good operator. The way I'm most effective is by getting into
a project,
completing it by creating a new mechanism and hopefully leaving a long-
lasting benefit. I like to solve problems."
He's also called in as an expert witness in restaurant-related litigation
cases.
When patrons of five Perkins pancake houses in the western suburbs were
hit by salmonella poisoning after an egg distributor delivered rotten
eggs, Gorodesky has hired by Perkins and its law firm to evaluate the
monetary damages the restaurant chain suffered. The case is still pending
court.
When Joe and Claire DiLullo declared personal bankruptcy, an unsecured
creditors' committee and its law firm hired Gorodesky to help negotiate
a settlement.
"When I first got involved," Gorodesky says, "the proposal
on the table from DiLullo was to pay the unsecured creditors a lot less
than the debt, which was really high. The concensual plan, which was influenced
directly by our work, turned out to be a good deal-a good deal-greater
than that.
"How did we do it? We started with the numbers. We always start
with the numbers. I did a detailed analysis of all of their operations-Joseph's
Pizza, the catering business, the two restaurants-worked with their accountants,
interviewed their people and did some of my own projections
as far as what I thought was achievable. Then we negotiated.
"It sounds simple, but it was a good year and a half before the
whole thing was finished."
He also has been effective in hooking up restaurateurs in search of a
location and with locations in search of a restaurant.
"He's very savvy," says Bill Hoffman, owner of Carolina's.
"And he has a memory like an elephant."
Gorodesky hooked Hoffman up with the Korman people a few years back,
when they were looking for an independent restaurant for Korman Suites
at 20th and Fairmount. "Ordinarily," says Hoffman, "I wouldn't
be interested in that location. It's a tough spot. But they had capital
and Ron thought I could put something together with them, so he hooked
us up and negotiated the deal." The result was the acclaimed Catalina
restaurant.
Meanwhile, Hoffman says, he once mentioned to Gorodesky-in passing-that
he was looking for a Main Line location for a restaurant.
Five years later, Gorodesky called: "He said he had just the spot
for me," says Hoffman. "The owner of the Greenhouse in Radnor
was retiring; the property was becoming available."
Gorodesky negotiated that deal, too, which involved a complex, long-term
lease agreement, and Carolina's new restaurant in Radnor was born. It
opened in April to rave reviews.
Gorodesky knows the market. He built-he was-the food-and-beverage division
of Laventhol and Horvath, back in the '80s, back before the troubles,
back before his own entrepreneurial spirit propelled him three years ago
to establish his Restaurant Advisory Services-the only local consulting
business focused primarily on food-and-beverage, as distinguished from
hospitality (hotels).
"There's no mathematical formula for a successful restaurant,"
says Gorodesky. "It comes down to industry experience. When you know
the market, you understand what's possible and what's not.
"One of the last jobs I did at Laventhol," he says, "was
when the Palm came to us, said they were thinking of coming to Philadelphia,
did it make sense? The Palm caters to a convention-type clientele, and
they knew the Convention Center was coming on line. But they wanted to
know if it really made sense from a market perspective.
"We looked at the other high-end restaurants in the area, got an
idea of their numbers and of when they were doing business, and concluded
the Palm looked very do-able.
"Yes, it was a good location-but we went negative on another study
for that same building. It was good because it was the Palm and their
clientele was there for lunch. We felt lunches would be strong there.
When Cunard approached us about a private club, the Founders Club, that
they wanted to open at the Bellevue, we said, 'Don't do it; you won't
get enough membership.' They did it anyway. And it didn't work.
You see, you gotta have volume. If places like the Palm and Ruth's Chris
didn't have high volume, they would die. They have very high occupancy
costs, they have very high labor costs, so they need high-volume dollars."We
usually hit it pretty well withour market studies," he says with
an impish grin. "Don't you love being right?!"
He was right, again, about Pomodoro, the much-ballyhooed, upscale Northern-
Italian-style bistro that opened on the Parkway a few years back. He says
he knew from the start that it would not-could not-work. But the restaurant
was not his client.
"The owner of the Windsor Apartments was my client," Gorodesky
says, "and he calls me one day and says, 'I've got a really good
offer on the table from the Marabella's people. I'm going to give them
X amount of dollars and they're going to pay me Y amount of rent against
a minimum.'"
(Most restaurant leases are structured that way. A flat fee is the exception;
typically, rent is based on gross sales.)
"I told him, 'Those numbers sound fabulous but you're gonna choke
them with those numbers, with that concept coming in.' The rent is based
on gross sales, but the natural break for that percentage was a very high
number and although he was going to give them a huge chunk of money [reportedly
about $1 million], it was going to cost a lot more to develop the restaurant.
So, in addition to a high rent, they would also have to pay a lot of debt
service.
"Sure enough," Gorodesky says, "the property opens and
although they had some success, they were not doing the gross they needed
to get their natural break points. They were paying a lot more in rent
than necessary and because the restaurant was a more upscale restaurant,
the menu and food cost was higher. The operation is more difficult than
Marabella's."
"So you knew when Neil Stein opened Pomodoro...?" we begin.
"...It would not work," he says.
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