Wanting to work with high caliber chefs who want to create new types of dining experiences, Joe Bastianich and Tim Love find themselves with the opportunity to create a one of a kind restaurant.
Chef & I
Erica and Chef Chris Rains are the owners of The Chef & I, which they describe as “where gourmet meets Rock & Roll.” Located in Nashville, TN, The Chef & I is an interactive experience in which consumers meet and see the chef cook in front of them. Their business has been open for seven years and all facets of their business – including the catering and cooking classes they offer – include this interactive element.
Wanting to open up a second location closer to downtown Nashville, the Rains are asking for 500k from the investors for a 20% stake in The Chef & I. Though the investors had mixed feelings about the food, larger concerns would surface. For instance, Tim and Joe immediately become concerned that the Rains are not asking for enough money given that their payroll alone would come close to a million dollars a year. Chris claims that they plan to make $6.3 million – making them the highest grossing restaurant in Nashville.
An additional concern that Tim and Joe bring up is that The Chef & I is asking consumers to change their dining habits to experience Chris’ and Erica’s business model.
Chef Frank Brunacci and his wife Lillian Brunacci are currently residing in Florida, but are hoping to move back to Chicago to open Subdus – a high-end restaurant centered on truffles.
As a Michelin Star Chef, Frank has been working at superior restaurants across the world for twenty-five years. Through the Brunaccis’ contacts in the truffle industry, they can purchase truffles year round at a fraction of the market cost. As such, they want to create a one of a kind high-end restaurant featuring a nine-course menu centered on truffles.
To build this restaurant the Brunaccis are asking for $750k for a 75% stake in Subdus with a buyback option. With a projected check average of $350 Frank and Lillian anticipate yearly revenue of $6.5 million.
In addition to Joe feeling that there may be too much truffle in some of the dishes, Tim is worried since they are only offering a tasting menu the restaurant runs the risk of becoming boring. Joe builds on this concern by arguing that tasting menus should be an option but not the only option. If not, the restaurant runs the risk of becoming to inaccessible and unprofitable.
Despite these concerns, Frank reminds them that he is King Truf and can deliver on everything he and his wife promise.
Joe and Tim are faced with two restaurants ideas backed by star chefs – each proposal having substantial strengths and weaknesses. Chef & I is currently a profitable restaurant but expanding it in size and to other locations requires consumers changing how they fundamental see the restaurant experience. Subdus could also be a profitable high-end restaurant, but its reliance on just wealthy customers exposes the business to too much risk.
While Joe and Tim find it unlikely that they can convince the needed number of people to change how they view restaurants, they do feel that Subdus can be improved by adding a bar that attracts casual diners.
As such, Tim and Joe select Subdus to invest in on the condition that Chef Brunacci create two separate menus with two distinct price points. One menu for the bar that appeals to average people so that the restaurant is relevant to current consumer habits, and one for the high-end consumer.
Though the Brunaccis’ already had a vision for Subdus, the pressure to successfully pull off this launch was increased by the requirement to have a bar as well. Meeting with Roy Rede to explain the opulent look they want the restaurant to have, it quickly becomes clear that they won’t be able to stay within the budget the show set.
When Roy explains to them that they are several thousand dollars over budget Frank and Lillian are unable to find items in their budget to cut because they feel that everything was needed to complete their vision. Reaching out to his contacts Frank is able to find help from the owner of Mélisse – a two star Michelin restaurant in L.A. – and is able to get every item that Lillian wanted.
In the midst of designing the restaurant, the Brunaccis meet Antonia Lofaso. Antonia clearly respects Frank’s success and skill, assures them that she will do her best to find the qualified line cooks and kitchen staff needed for the quality of food he produces. Coming back at the end of the day to taste everything on their menu Antonia is impressed by the meals that Frank has prepared, however, she concerned by the lack of attention the Brunaccis paid to the bar menu. In addition to the bar menu being too traditional and stuffy, Antonia suggests to Frank that he creates a bar menu that is more fun and that can attract a different type of client than what Frank and Lillian are focusing on.
Antonia knows that Frank will lose any chance of getting an investment if he is unwilling to expand Subdus to include a middle-class cliental. After explaining to Frank that creating a fun bar menu will not detract from the primary gourmet experience he wants to create, he realizes that for Subdus to succeed he has to give Tim and Joe the bar that they want.
The day comes to launch Subdus and Frank is immediately presented with a problem. While Antonia did everything she could to get Frank the line cooks he requested, she was only able to find one. To make up for this gap she offers to work for him for the night. It is an opportunity that both are excited by.
From the moment Tim and Joe approach Subdus they notice that the restaurant communicates it is expensive. Walking into the restaurant, Joe and Tim are impressed by the stylistic choice to merge modern and rustic aesthetics. However, they are both immediately concerned that the bar area lacks the tables needed for guests to eat on. It is a lack of attention to the bar area that would become an issue again.
During the launch Tim and Joe observe that the customers enjoy the food and drinks, regardless of if they are in the dining room or at the bar. Moreover, despite Tim’s dissatisfaction with one of the dishes, he and Joe think highly of the food overall. However, Tim and Joe are both deeply concerned that the bar area is seen as an afterthought when it could be the profit center of the restaurant. An example of this being Frank and his kitchen staff failing to stay on top of the orders coming from the bar.
The launch ends on a mixed note. While Joe describes this as the best launch he’s ever seen, they both can’t help but think that the bar should have been better.
The Deal Table
Meeting with Frank and Lillian, Tim and Joe praise them on the food and the room’s design. The investors share that all of the diners enjoyed the food and 85% liked the atmosphere. Though Tim describes himself as one of the 15% that felt the room was too stuffy, he does see value in the idea of Subdus.
In contrast, Joe argues that restaurants today are about accessibility and Frank is simply too focused on creating an elitist dining experience. Joe wants the bar to be the economic engine of the restaurant because you can’t always count on a full dining room with people spending $200 a person, but realizing that Frank will never be passionate about this aspect of a restaurant Joe decides to not invest in Subdus.
Still seeing potential in the idea and Frank’s talent, Tim offers $750k and in exchange they will pay him back two times his investment plus 6% interest. Additionally, Frank’s salary will not go above $150k and once Tim is paid back the ownership of Subdus will be split 35% for Tim and 65% for Frank and Lillian. It is an offer that the Brunaccis agree to.