DAVID CHANG: Here's why the restaurant industry is about to face an apocalypsehttp://www.businessinsider.com/david-chang-on-the-restaurant-apocalypse-2016-3David Chang is a chef, restaurateur, and the founder of the Momofuku restaurant empire, which operates 15 businesses in New York, Washington, D.C., Sydney, and Toronto.
Razor-thin does not even begin to describe just how slender the margins are in the restaurant business, and that's if you're one of the fortunate few that don't go under in the first year. If you're lucky, small single digits. Like, the smallest single digits. It's legitimately one of the dumbest businesses you could possibly get into. Restaurants are at the mercy of weather, acts of God, a sluggish economy — and if you have just one bad week, it can sink your ship. Lately, rising rents and changes in labor laws have made it even harder. And I say that as someone who has done OK! Imagine how insanely daunting this business is for most everyone else.
Here are the big shifts that are challenging (and changing) restaurants right now — and some thoughts on how to keep the whole thing from imploding.
Many good chefs are fleeing the kitchen.
The longer chefs look at restaurant math, the less it adds up for them. A few years ago, the only option was to be a private chef. Now you can work in all kinds of food businesses. I just heard that John Adler, the chef at Franny's in Brooklyn, left to join the food-delivery service Blue Apron. I hear about moves like this all the time.
So we must find a way to pay our cooks a living wage — which probably means we need to get rid of tipping.
At my newest place, Nishi, there's no tipping; service is included in the prices on the menu. This allows restaurant owners to remix the way their "service" charges are distributed to their staff, which we gotta do if we're going to hang on to the best kitchen talent.
Cloning is the future — of restaurants, not food.
Every chef is talking about the need to develop lower-cost restaurant concepts that can be replicated in different locations, essentially rebooting the whole idea of "fast food." (I have a fried-chicken place, Fuku, in this category.) It's a way to diversify and offset the inefficiency of your higher-end restaurants, which don't pay for themselves. Roy Choi and Daniel Patterson are doing this with LocoL in California, and Daniel Humm and Will Guidara are about to dip their toes in with Made Nice in New York City. If restaurateurs do it right, we reach a larger audience, support great farms, and, well, survive.
Because here's the thing no one wants to hear: Restaurant food is too cheap.
Our bowl of Momofuku ramen should cost $28. That would cover the true cost of the "food" plus a reasonable (and not remotely greedy) margin. I put "food" in quotes because every tiny part of a restaurant is in the cost of that dish, from dripping faucets to broken plates. But you know what? I sell that ramen for $17, because if I charged $28, people would say it's too expensive. It's on us, as restaurateurs, to get better at running our businesses (and break fewer plates), but the bottom line is that food needs to get more expensive for you, too.
Finally, please don't assume that owners of busy restaurants are driving Teslas to their houses in the Hamptons.
I have neither! The only restaurants that make a lot of money are nightclubs, and it's because they can charge a million dollars for Red Bull-and-vodkas and everyone's so high on Molly that they'll pay it.
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