Buy the Numbers: Lat14 Adds Right Spice to Golden Valley
The Brand New Lat14 ASian Eatery has a prominent position in the Minneapolis suburb of Golden Valley, right on Highway 55. The attractive signage is hard to miss, and you would never know that the restaurant was once a popular Perkins. They have done an incredible job of conversion, using the great location and decor to give you a feeling that you aren’t walking into a chain restaurant, but into something closer to the 14th latitudinal parallel.
Executive Chef/Owner Ann Ahmed reiterated my thoughts about the need for a new suburban-type restaurant. She wants Golden Valley to have the same unique restaurants and menus as Minneapolis’ trendy spots or Wayzata. And this one, she says, is much more unique than her Lemon Grass Thai restaurant, which started with 10 seats and now has 100.
The dishes are derived from the countries on the 14th latitudinal parallel, with an Asian flair. They have everything from a fairly high-priced New York strip entrée to traditional ramen bowls. By and large, items seem to be priced in that sweet spot for Twin Cities diners. They are open seven days a week for dinner and have been doing 150 covers per day.
The restaurant seats around 90 people, and is divided into four distinct areas: the first has a large kitchen table which seats about 16; a separate dining room runs parallel with the entryway’s long windows (with shades of Perkins) and 40 seats; the main bar area and an area in the back both have 24 seats, plus 10 more at the bar. Each area can signal different occasions from happy hour to a more quiet dining experience in the back or a kitchen table view of the open, working kitchen.
Ahmed says she purchased the real estate and spent another $1 million-plus to give it its own feel and look.
The menu has a cocktail slant to it, and they’ve got a well-stocked bar with active bartenders behind it. Entrées run from the mid-teens up to snapper at $38 and a duck dish at $29.
Lat14 hosts a community seating area, similar to a lot of the new restaurants such as Young Joni. The food both tastes and looks good. I’m a fan of spice and they use it well. The drink menu also has the right pricing, with most of the bottled wine in the $40-$50 range. Cocktails and beer are priced pretty much at market.
It will soon open for lunch, which should do well in that neighborhood. Now let’s look at the specifics.
With 100 seats, a check average probably close to $40 and current table turns, it could easily be a $2.5 million dollar restaurant, especially once lunch is added. Ahmed says she thinks they can do better than that.
Rating: 3 out of 4 stars.
There is an abundance of noodles, rice and low protein items, and for the ramen dishes, they don’t overfill the bowls with protein. That being said, they do have some star-quality protein dishes, but they are priced accordingly. The fried snapper, the duck and the New York strip are all priced competitively. So I would say the food cost in the long run should be in pretty good shape. I would say it will settle in at about 30 percent—or according to Ahmed, less.
Rating: 3.5 out of 4 stars.
I think labor may be the one area that’s problematic. One reason is they’ve got a lot of different dishes, which adds more moving parts. In my counting, the back of the house is pretty full—probably a little overfull. Everyone is doing double duty—running food as well as the server role. One of the keys to a successful restaurant is to have cross-training, but they’ve got to work on labor. It’s not a terribly efficient layout. I tried sitting in all the different areas on my visits, and noticed that the flow was difficult for servers. In particular, the kitchen table seating of 16 is going to slow up service. I would think they’ve got a bit of work to do on service and cutting labor.
Rating: 2 out of 4 stars.
Return on Investment
Kim Aune at Shea Design, who did a wonderful job converting the Perkins to a modern restaurant, made it clear they were trying to accomplish three things: One, get rid of the iconic Perkins look, including the arches, while not getting carried away with spending money on the exterior; and two, create a modern look with an open kitchen and bar and some unique dining space; and three, create a reasonably sized patio, seating 30 to 40 people.
Conversions tend to be more expensive than are often planned for, but given Ahmed’s estimate of $1 million-plus for the improvements, and assuming since they own the building rent will be reasonable, the return on investment should be in line with the investment.
Rating: 3 out of 4 stars.
Overall I give Lat14 a 3 out of 4 stars. Among the many reasons is its unique location and we’ll see how customers react in the long run to having something like this in Golden Valley. If they continue to react like they have been, soon the restaurant will be a 4, but it is still yet to be determined how things will work out.
This will be a nice model to see if you can successfully convert a building used by a chain in a suburban area to something that’s more akin to a North Loop or West 7th in St. Paul-type establishment. And if you converted it, will people come?
Rating: 3 out of 4 stars.
Dennis L. Monroe is a shareholder and chairman of Monroe Moxness Berg PA, a law firm specializing in multi-unit franchise finance, mergers and acquisitions and taxation in the restaurant industry. You can contact him at (952) 885-5999 or firstname.lastname@example.org. For more information, please refer to www.MMBLawFirm.com.