Divorce. Even by itself it is a word that conjures up a powerful swell of feelings. While a marriage ending via divorce is difficult, the pains of a divorce are even more intense for business owners because the company they invested years into could be easily shutdown or simply taken away from them. With two chefs who have their dreams derailed because of divorce, Joe Bastianich and Tim Love are giving them the chance to build a new restaurant while rebuilding their lives.
Josh White and Alex Stone are friends from Pennsylvania hoping to re-launch their barbeque restaurant, Smoke. Unlike standard BBQ restaurants, Smoke provides a quality experience in which the food is of a higher quality than normal and presented to look good instead of just being placed in a basket. Josh owned Smoke for over two years, but lost it when his wife filed for divorce. In addition to losing the restaurant and his house, Josh’s ex-wife also took his dog.
Asking for $200k for a 25% stake in their new company, Josh and Alex explain to Tim and Joe that the previous incarnation of their restaurant was successful and they believe that they can repeat their success. Joe and Tim find Smoke’s food to be good but lacking in uniqueness. Josh responds by passionately stating that Smoke provides a high quality of food that few BBQ come close to. Tim and Joe find concern when Josh puts Smoke’s food costs at 36% – a number that, as Tim points out, could put a BBQ joint out of business.
Josh explains that the food cost comes from this ex-wife not handling the finances as well as she should have. Josh assures them that despite his emotions running high, he can put his feelings aside and run a new restaurant. At this new location, Josh is aiming to generate at least $600k. However, Josh is unable to state what the restaurant’s gross margin should be. Overall, Josh’s failure to show a command over the business side leaves Tim and Joe concerned.
Tomas Rivera and Andrea Davis are a couple from California who want to create a restaurant centered on healthy comfort food with a hempseed twist called Chas Germain. Tomas had a previous catering company that he lost when his business partner – his ex-wife – divorced him, but he believes he can bring his previous success to this new venture. Additionally, Andrea believes in the idea so much that she is putting her house up as collateral to invest in Chas Germain. With that, they ask Tim and Joe for an investment of $321k for 30% equity in the business.
Curious about hempseed, Tomas provides hempseeds and hempseed powder for Tim and Joe to taste. Both find the product to have an interesting and enjoyable taste. Moreover, both Tim and Joe enjoy the hemp infused food that Tomas and Andrea present.
Asking about Tomas’ and Andrea’s relationship, Tim and Joe learn that Tomas is not officially divorced from his wife. Though Tomas explains that he and his soon to be ex-wife have a civil relationship, Joe makes it clear that as an investor he has to assume the worst could happen.
Moving on to the location, Tomas states that he is so sure that he’s found the perfect location for Chas Germain that he’s been paying rent to hold on to it for a year and a half. However, he’s done nothing to it, so the building is just an empty space. The rent is so high that Tomas has already paid over a $150k for the space without doing anything to it.
Pressing Tomas for more information about this decision, Tim and Joe find out that Tomas doesn’t have the money to pay for the next month’s rent. Though Joe respects their passion and sees their commitment to their dream as a positive, Tim worries that they are throwing good money after bad. Joe is concerned that they are underestimating what their budget can be but does like their idea of using hemp.
Discussing Smoke, Tim and Joe tell Josh and Alex that they bring a clear passion to rebuilding Smoke, but Josh also brings with him a lot of emotional baggage. As for Tomas and Andrea, Joe and Tim like the hemp idea and the food but feel that Tomas wasn’t completely straight with them and that the budget proposed for Chas Germain was too low.
Believing that they have a better chance to make money from Smoke, Joe and Tim select to launch Josh’s and Alex’s idea. For their launch to be successful, Joe and Tim tell Josh and Alex that they need to show that they have their financial number in order. Additionally, Josh and Alex need to show that they can create a different type of BBQ experience that is also fun.
Josh and Alex enjoy being back inside of a professional kitchen again when they meet and talk to Antonia Lofaso to better understand what is expected of them. Talking to them about their initial menu, Antonia sees that it is filled with items they have done before when what they need is to take risks and do something new. In addition to tasting their menu by the end of the day, Antonia makes it clear that she needs to see their projected food costs.
Excited to be told not to play it safe, Alex and Josh would soon encounter obstacles. The largest obstacle is that the smoker they have access to isn’t generating enough heat. This leaves much of their food undercooked.
Meeting with Roy Rede about the outdoor layout, Josh wants the space to feel like a classy backyard with lights strung over top and a band. They also decide that their logo should just be the word Smoke with the image of a pig.
Returning to taste their menu Antonia is impressed by their food but is quickly dismayed by the fact that they didn’t keep track of their food costs. Antonia walks them through the steps in order to help them figure out these numbers. Antonia leaves them with the advice to make their food truly standout.
The day of the launch comes, and Josh and Alex are happy to see the layout of the restaurant and their logo. Talking to Antonia again, Josh tells her that their expected check average will be $33.20, the projected revenue for the launch is $1,660, and that their food costs will be 19%. Antonia is impressed at how well Josh has become with the financial side of the business, but becomes concerned when she sees a steam table. Josh and Alex set up some of the food in manner similar to a cafeteria so that they can easily get the food out, but Antonia points out steam tables take away from a restaurant’s quality.
Tim and Joe for show up for what will be Restaurant Startup’s first outdoor launch. They are both immediately impressed by the layout of the restaurant and its logo. Talking to Antonia, they are also happy to learn that Josh has been working on getting the financial numbers right.
Just before launch Josh and Alex realize that their sausages haven’t cooked right. In addition to not looking right, the sausages don’t tastes like the ones Josh and Alex normally make. Not happy with the quality of the sausages but unable to think of what to replace it with so close to the launch, Josh decides to serve the sausage.
The night of the launch starts off well. People are enjoying the burger that Josh and Alex initially presented to Joe and Tim, and everyone seems to enjoy the atmosphere they created as well. However, diners quickly begin to complain that the chicken is undercooked.
Josh and Alex begin cooking all the chicken again. Just as they are dealing with the raw chicken, Josh realizes that he has no order tickets because their computer ordering system has crashed. They quickly switch to paper tickets but Josh is unable to read much of the hand written orders and a backlog forms. This frustrates Josh and keeps the kitchen from sending out the food that customers had ordered. This forces Tim to get involved to help expedite the food faster.
Talking to the customers about their experience, Tim specifically talks to Neil Strawder (owner of Bigmista’s BBQ) about the launch. Neil’s feedback is brutal and specifically highlights that the food was poorly cooked. When Joe and Tim finally get a chance to eat the food, they find similar problems. The chickpeas are fantastic, but the sausage is a fail and their main sandwich has significant flaws.
The Deal Table
Meeting with Joe and Tim after the launch Josh and Alex learn that the revenue for the launch was $1,800 and that the check average was $45. Turning to the survey, 90% of the people liked the atmosphere and 80% like the logo. However, only 40% of the diners liked the food – the lowest in Restaurant Startup history.
When asked about what happened with the food, Alex and Josh offer excuses that Joe and Tim are not impressed by. Moreover, Tim and Joe begin to realize that Josh lacks the needed leadership skills needed to run a kitchen and restaurant. Backed into a corner Josh admits that he played it safe out of fear that he might not investment. It is an admission that causes Joe to rule out any chance of investing in Smoke.
After talking to Josh further, Tim explains that he will not be investing in Smoke. Instead, Tim offers Josh and Alex jobs at his restaurant, the Woodshed Smokehouse in Fort Worth, TX. While Josh and Alex accept the offer at the deal table, Josh later decides to turn down the offer to re-open Smoke on his own. Alex is following through and moving to Texas to work for Tim.