FSN Summit: Pros Share Ins and Outs of Pop-ups, Crowdfunding and Politicking
FSN Events Editor Laura Michaels moderates the delicate discussion of politics. Saed Wadi (second from left), co-owner of World Street Kitchen and Milkjam Creamery, talks about his decision to close his restaurants in support of A Day Without Immigrants. Fellow panelists Alexis Walsko, CEO of Lola Red PR, Danny Schwartzman, owner of Common Roots Café, and Tracy Singleton, owner of Birchwood Café, also share their perspectives on involving business with political or social issues.
Top operators and chefs networked with experienced vendors at Foodservice News Restaurant Business Summit last month at Loring Social in Minneapolis, before learning about the latest in state and local legislative issues and gaining insight from industry panel discussions.
The summit brought together professionals in restaurant finance, event planning and public relations, along with leading restaurant owners, to discuss where to find the startup money to launch a concept, tips for hosting a pop-up and how to handle the intertwining of political and social issues with your restaurant brand. Dan McElroy of the Minnesota Restaurant Association shared the latest on issues such as the push for passage of a Uniform State Labor Standards bill and the continuing debate over a $15 minimum wage in Minneapolis. Turn to page 24 for McElroy’s MRA Report.
Show me the money
With its many nuances and the varying deal structures available, restaurant financing can prove tricky, especially for owners opening their first location. Meet with a banker—“or 10 different bankers”—first, said 6Smith restaurant owner Randy Stanley, and be aware of other financing sources beyond traditional lenders.
“It works best to get people involved in the project that have a stake in it—landlords can be a great source of funding if they’re willing,” said Stanley, who worked with his building landlord, Rick Born, to secure both a loan and tenant allowances before opening 6Smith in Born’s Boatworks building in downtown Wayzata. “This particular property had failed so many times and Rick recognized that and so he was willing to work with us.”
Mel Guse, co-owner of Gyst Fermentation Bar in Minneapolis, said she first took a business class through local nonprofit WomenVenture before securing a Small Business Administration loan and other financing to open Gyst with sister Ky in late 2014. A Kickstarter campaign helped close the funding gap to the tune of $40,471.
When it comes to getting that SBA loan, Chris Young said she looks first at the management experience of who’s going to run the restaurant and if the business owner “has some skin in the game” in terms of personal investment in the project.
“We don’t want to be in a situation where they throw in the towel and walk away,” said Young, senior VP and SBA program manager for Venture Bank. “If they have something like grandma’s house on the line, they’re going to work a lot harder” at making the restaurant a success.
Moderator Dennis Monroe, chairman of law firm Monroe Moxness Berg, noted private placement is another funding option, and firms such as his help set up would-be restaurateurs with accredited private investors who want stake in a restaurant.
Each panelist agreed having enough working capital is crucial to the initial and ongoing success of any restaurant project.
Taking it to the streets
Restaurant owner Tim Niver and Geri Wolf, a local event designer and planner, joined Editor Nancy Weingartner Monroe for a discussion of the pop-up phenomenon spreading through the restaurant world. Encompassing the changing role of chefs, along with pop-up restaurants, food trucks and event catering, the “Moving Restaurants Outside Their Four Walls” panel covered everything from liability to the never-ending demands on chefs and owners.
“Nobody can do just that anymore,” Niver said, referring to the old days when it was enough to just have a four-wall operation. The owner of Saint Dinette, Mucci’s and The Strip Club Meat & Fish added, “you really need to figure out how to reach your customer when they’re not in your restaurant, and there’s so many distractions these days … you have to be focused.”
Those countless distractions, he said, include fundraisers, launching new concepts, testing new menus or hosting private parties—and of course competing with the ever-increasing number of restaurants in the Twin Cities.
Splashing some cool water on this trend for newly popular chefs and restaurateurs to be everywhere in the name of publicity, Wolf said owners need to be aware of compliance, liquor laws and other restrictions when bringing the food—and alcohol—to their adoring fans. Even in the name of charity, staying on the right side of the law is always important, especially in an era where regulators can scour social media for off-site events.
“Whether or not you’re compliant is really important, because it can put your entire business in jeopardy and … will nullify the insurance you might carry. So it’s worth the extra 30 minutes to figure out whether you’re in compliance,” she said.
With costs and charitable requests that are both increasing in lockstep, Niver advised fellow operators to ask for in-kind or actual donations from vendors to help share the cost burden of such events.
He added it’s fun to be able to step outside the boundaries of a physical restaurant, with all the creativity required to make a pop-up work, and said it would be a mistake to turn down all such opportunities.
“You have to be a part of the game,” Niver said. “You can’t just sit and wait for it to come to you.”
Restaurant owners raise their voices
Closing out the summit, FSN’s Laura Michaels led a discussion about restaurant and bar owners publicly sharing their views or supporting causes that may excite some customers, while turning off others. Michaels began by noting such decisions can have significant impacts on bottom lines, and unintended consequences that could spiral out of control.
Saed Wadi, co-owner of World Street Kitchen and Milkjam Creamery, shared his experiences on the subject along with Tracy Singleton, owner of Birchwood Cafe, Danny Schwartzman, owner of Common Roots Cafe, and Alexis Walsko, founder and CEO of Lola Red PR.
Schwartzman reflected on 10 years since starting Uptown’s Common Roots, saying “the whole business is about our values, so clearly we’re going to talk about our values.” As the creator of the “Hate Has No Business Here” campaign—which started with a simple sign at the restaurant—he said he couldn’t remain silent in the face of the current xenophobia and hate-filled rhetoric directed at Muslims and immigrants.
Birchwood’s Singleton said working in restaurants since she was 14 gave her many different experiences, some of which were not positive. Her time at Lucia’s restaurant primed her to proudly talk about her own food sourcing since opening Birchwood in 1995.
Wadi said as a Muslim, a Palestinian and Arab he was “literally the Axis of Evil that [President George W.] Bush talked about,” and since coming to the U.S. 25 years ago he’s seen the country’s best side, driving him to stand up for other immigrants.
“I couldn’t listen, take it and be Minnesota nice,” Wadi said of choosing to speak out as a business owner and take action, including closing his restaurants February 16 in solidarity with the Day Without Immigrants protest.
“I love Minnesota nice, but I’m not so nice, so I had to be vocal about it,” he continued. That attitude included an open dialogue with staff and customers, including those with opposing views. Wadi noted he also met with his entire staff before making the decision to close and he still paid the employees scheduled to work that day.
Adding the PR perspective, Walsko emphasized speaking about hot-button issues through a restaurant is a tricky task in balancing advocacy with basic business sense.
“Being in the restaurant industry, you were given a stage and given a microphone, how are you going to use it?” she asked. “You have to make sure you have a plan as to why you’re doing it.”
Even if a restaurant or its owner becomes embroiled in a controversy, Walsko added that the 24-hour news cycle means that if something is currently in focus, it’s likely that it will quickly flame out as the next thing comes along.