Tuesday, March 16, 2010

The city of brotherly love... not!

I just grabbed a spoon. -- Ross Gellar, Friends

This is a big project and we have a lot to learn before we can make it happen. At this point we have interviewed various chefs, restaurant owners, and industry experts to pick their brains about our concept. So far we have gotten very positive feedback on the idea and have acquired sufficient funding for an opening. We have worked hard to put together an initial business plan and are conducting a market research survey to gather more data. I’ll tell you more about all this later but for now our focus is finding a space for our restaurant.

We are in the process of working with real estate brokers to identify the perfect location. This is our biggest challenge right now as our team is based in Boston, MA but we are looking at sites in Philadelphia, PA. We chose the city of brotherly love as our first location because it is a major metropolitan city that suits our concept well, and the real estate costs are lower than other markets like New York or Boston. Plus, Amir and I know the neighborhoods well having gone to college at Penn and the three of us are all comfortable moving there when we open. Unfortunately, finding the perfect site within Philly is not as easy as we thought it would be.

We were very interested in a location on Penn’s campus that used to be a former bagel and sandwich shop. We saw this place with our first broker back in November, and he told us Penn wasn’t interested in our concept because they wanted to bring in another breakfast/bagel shop. Just recently we found out that Penn is moving forward with another restaurant that doesn’t specialize in breakfast and the deal is almost closed. This was very upsetting because our broker didn’t really vouch for us the way we had hoped and we weren’t as aggressive as we should have been. But we learned our lesson not to take no for an answer and keep checking in on locations we are interested in.

Another site on Penn’s campus was a brand new space on the ground floor of a residential building. It would have been the perfect size and location, but Penn told us the university doesn’t want another food unit there because there are already a few restaurants in the strip. We pushed back some more and the broker said he would let us know if they changed their mind. This was a bit of a bummer as well but perhaps there are some blessings in disguise as the block is extremely competitive and it would have been very expensive to build out the space for our restaurant.
The third site we were very excited about is a former burger shop in Center City. It seemed like prime real estate and it was fully fit out as a restaurant so the startup costs would be less. Of course the asking price per square foot was extremely high and we put in a bid for much less back in December. We weren’t so surprised when we didn’t hear back from the landlord on our LOI (letter of interest). However, we saw the space again in February with our new broker and this time the current tenant was there as well. This is the guy who owns the burger shop that went out of business and is still paying rent to the landlord. We figured this would be a great opportunity to strike a deal with the tenant to sublease the space from him, rather than negotiate with the landlord. Boy, were we wrong! This guy laughed at us when we said we had no previous experience and told us he would only sublet to someone already operating a few restaurants. It didn’t make sense to us because we thought he just cared about getting money and we could provide financial statements and a personal guarantee to him. But he refused to budge and told us it wouldn’t work out.

So much for the city of brotherly love, huh? This was the first taste of rejection due to our lack of experience and it was frustrating, but we know we will be dismissed many times down the road so it was a good reminder to experience it early on. At the end of the day, we can’t let these challenges get us down and we have to keep looking ahead for new opportunities.



  1. I love this blog...definitely look forward to seeing how the journey unfolds.

  2. Ditto what Chief K said.

    Rejection, disappointments and setbacks are an inevitable part of Any worthwhile venture. If they weren't, then everyone would be taking risks like this. Just keep the positive attitude and keep forging. You guys will make it, you're tough :)