Sunday, August 31, 2008

Lessons and Mistakes

Many people have asked me "what happened to The Yellow Rose?" Actually it's a question that comes up constantly in conversation. I try and give a brief dispassionate response but it's difficult. Many issues are involved, some pertaining to the restaurant business in general and many relating to this city specifically. Now that we are officially done I'd like to express some observations.

When the opportunity to purchase The Yellow Rose was presented it seemed like a no brain-er. It was a beautiful fully equipped restaurant with event facilities in the heart of downtown. Other than the country clubs they were also our biggest competitor and if we didn't buy it who would? I was all gung ho but my wife who is cautious and much wiser than I hesitated. Never the less we proceeded forward. After months of negotiations the deal was done and we opened on September 19th 2004. Along the way we learned alot about this town and ourselves. Me in particular.

Observations and lessons learned:

We attempted to attract the conservative old school customers that were frequenting long established "supper club" type restaurants:
*It didn't happen. Folks in this town tend to patronize the same place over and over. They go to "their bar", or "their restaurant" or "their fish fry". These same people don't seem so concerned with quality or service. I chalk it up to not knowing any better or simply not caring.

*We priced the menu less than our other restaurant and kept the quality high. As a result our bottom line wasn't as strong and profits relied more on volume. In hind sight I should have cut quality and prices. Customers here tend to dine by price not menu. When customer counts started dropping trouble started.

As previously mentioned we went for the "classic American" menu relying heavily on center of the plate and classic preparations. The "new" customers didn't notice the difference in quality but did notice the small increase in the dollars they were spending. A classic example is the annoymous writer reponding to a story in the local paper about The Rose, "They charged for refills on soda!!!!" He was incredulous. Here you are in a beautiful linen draped restaurant that just screams class and he's bitching about free refills. Sheeesh.

A lack of qualified employees remains a problem. We just couldn't staff it with enough reliable, skilled and trustworthy employees.

The Downtown factor:
Getting the locals downtown is and will be a problem for years to come. Lack of acceptable parking and a crime stigma exists among the locals. The biggest fans of downtown are the out of towners. A few crazies walking around doesn't help either. There is alot of low income housing in or near downtown.

Increased competition:
Several new restaurants opened downtown and enjoyed their "honeymoon" period resulting in fewer sales at The Rose. Pricing was also an issue. We had a beautiful restaurant with large overhead, full linen, nice plates, heavy flatware, etc. People didn't seem to care. They'd rather save a dollar and eat with paper napkins and boring surroundings.

Four years ago we were all much better off than today. Enough said.

It's a ghost town downtown in the winter. This year was an especially harsh winter.

Tourists and Boaters:
Dwindling numbers

The biggest hitter in town seemed to forget about us after it changed hands. The former owners ARE the biggest hitters in town. Other companies are cutting back. (see economy)

Due to dwindling numbers we couldn't afford solid management. Realizing where our bread was buttered we had to tend to the restaurant that was making money.

Menu Change:
We changed the concept to a more casual "Southwest American" menu and decreased prices. It helped but all the other factors were just too much. Plus some people didn't understand what "Southwest" was.

The City
City government is clueless. They are only concerned about the short term buck. They also make it very difficult to do business.

In the end all of the factors above contributed to us splitting our customers between the two restaurants. It was what we feared from the beginning.

At the time we made the decision to purchase The Yellow Rose we weren't familiar enough with the dynamics involved. We are a little cloistered in Caledonia and a little spoiled with the apparent ease of doing business there.

What would I have done differently? Not done it at all.


Michael Walsh said...

Thanks for sharing your thoughts during this sad time. It kinda scared me straight with some wild ideas i've been kicking around. It is easy to see from your observations that even if you have all the bases covered alot of things out of your control have to come together for long term sucess.

Scott Sebastian said...

In a larger metropolitan area it would have worked fine. We needed to tap into a different demographic to succeed and just weren't able to.

Jeff said...

The way the majority of people chose where to eat just amazes me. People freak out about a couple of dollar difference in price and are more than willing to sacrifice quality for value and quantity.

My philosophy has always been that I would prefer to dine out less often if it lets me eat at better places. If you get a steak at Applebee's for $12.00 chances are its not going to be very good (if they won't let you order it medium rare, do you really think you should eat it?) and it will probably be served with bland steamed vegetables and some terrible version of rice pilaf. So instead of going to Applebee's twice, splurge once and spend the extra 15-20 bucks to get a good quality steak.

I am not a chef by any stretch of the imagination but I can cook meals that are more healthy, better tasting, and use better ingredients than so many places out there. I feel that if I can make something at home just as good or better than some mediocre restaurant, what is the point of going out only to eat mediocre food? When I go out I want good food. If I get a steak, it should be high quality, cooked to perfection, and it should taste excellent.

That's not saying it has to be fancy, it just has to be good. Some of my favorite places serve simple stuff like pork shoulder from Speed Queen, a Pastrami sandwich from the Rochester Deli in Waukesha, or a delicious pub burger from Sobleman's.

Scott Sebastian said...

I agree but often times people feel it's just a matter of getting out of the house to avoid the "drudgery" of cooking and cleaning the kitchen and they really don't care where they go.

Jeff said...

I guess that's my problem...I rarely think of cooking as drudgery.

Michael Walsh said...

I read up on marketing a little bit when i was part of the opening staff of Wonder Bar last year. What i took away from it is that you have to adapt to the customer base/demographic that exists, you can't creat one.

I was having some serious converstaions with another chef friend of mine about buying a pizza shop. Now, both of us have always worked in high end restaurants, but we agreed that while competition is fierce, the customer base exists. It didn't happen for us though.

If everyone in the area is fine with applebees, it's gonna be difficult to find enough guys like you jeff, to keep a business afloat. We appreciate you though!

Scott Sebastian said...


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