Finding good in the bad:
It might be tough, but it’s there

During the last month, I had a few people call me to ask what I thought of the recent news that David Fhima declared bankruptcy, something that given the tumult of his last two years wasn’t surprising. What was surprising was that he held out as long as he did, given the circumstances.

If there’s one thing I’ve learned being a reporter, is that for those who have never owned a business, the word “bankruptcy” often carries with it devious and criminal connotations. Sometimes that impression is deserved, but most often it is not. Some businesses open and succeed. Some businesses open, and, for a variety of reasons, hemorrhage money, close, and bankruptcy is often declared. Bankruptcy isn’t a good thing, but it is not an unusual thing to do, particularly if assets are being seized. Oftentimes bankruptcy allows a business to reorganize its finances.

While no one would mistake me for an economist, in a macro-viewpoint, it’s a fact the world’s robust economies have reasonable bankruptcy laws to encourage ideas and entrepreneurship—try and try again, those economies say. While bankruptcy stings immediately those owed money, in the big picture, an economy can continue to grow and adapt.

U.S. bankruptcy laws aren’t perfect (and made even less so by recent revamps at the request of the credit card lobby, which might stymie entrepreneurship), but they’re there to keep things moving along and ideas flowing. And, despite the gloomy consumer mood cast by increased food and gas prices things are moving along—albeit arthritically slow—at least from my small observation deck.

People have also asked me which restaurants I thought would expire this year, given the climate. There’s still half the year to go, but there haven’t been any surprise closings yet. The ones that have closed (Temple comes to mind) were teetering long before consumers started feeling the heebies, and, from what I’ve seen, the smart business owners prepared for these current doldrums long before they settled in—and one option off the table was cheapening the product.

Diners, while cutting back, haven’t stopped eating out, they’re just scrutinizing for value—which, for many, doesn’t necessarily mean dining on the cheap. I’ll gladly pay $8 to $10 for a satisfying and healthful lunch at, say, a Kafé 421 than $7 to $8 for a forgettable sandwich, a bag of chips and a drink. The point is, I’ll pay for quality.

Same goes for dinner. The places suffering a lot are those that were precariously balanced before—inconsistent and, perhaps, a bit too comfortable. A co-worker of mine just reported a negative experience on a Sunday evening at a restaurant where I had just recently had a magnificent meal. He won’t go back. I’m guessing the chef/owner had the night off, but, these days, when people feel their money strained, they’re less forgiving and therefore less inclined to give a restaurant a second chance, or will more easily eliminate a standard from the repertoire.

The top restaurant operations, both upscale and casual, know this. Lenny Russo reported in a recent e-mail business was up 33 percent through the first four months of 2008 at his Heartland Restaurant in St. Paul, and remains up around 30 percent for the year. That was not achieved through slashing prices or straying from the restaurant’s vision and purpose. Diners are still willing to spend money out on the town. They’re just less likely to take a chance on where they spend it—Heartland, along with other restaurants succeeding during this “down time” grasp that, and hammer home to the rest of the staff that a bad night isn’t an option. There are other success stories out there, just in my neck of the woods alone: Parasole’s Salut on Grand Avenue in St. Paul is exceeding expectations, Meritage in downtown St. Paul is earning raves, Chianti Grill in Falcon Heights is relocating to a larger space off Snelling Avenue to accommodate business, and the list goes down to the QSR segment, with the chain burger joint Sonic opening to huge crowds in St. Paul.

Gas prices will ultimately determine how important a night out is to middle-income consumers, however. I recently caught myself thinking after an exceedingly average-tasting $12 lunch, “I could’ve put three gallons in the tank.” I’m sure many people have that on the mind, and if the price creeps to $5 per gallon, all of what I wrote above could be meaningless.


Items ahead

• Check out the new Foodservice News blog. Yes, we’ve finally joined the 21st century. Head to our Web site and click on the link, or just type www.foodservicenews.net/Blog/ into your browser. We’re developing the site to be much like the magazine—an information source, but with the benefit of immediacy. And we’d like to read your comments, too.

• Wine training. Yours truly has kept his eye open for classes in which to learn about food and wine, and also learn about the industry people who take (and teach) said classes. Timing-wise, classes conducted by the International Sommeliers’ Guild worked out best for me, although I know St. Paul College has a wine certification course that is earning raves. In a coming issue (and on the blog) I’ll report on the class and what I’m getting from it. There isn’t an industry that can’t help its workforce with continuing education.

• Check out the ACF News on page 26. Area chapters ganged up to provide good cooking for relief workers and families in Iowa and Missouri devasted by recent flooding. Another example of how the ACF dives in to help communities—any community.

• In case you miss the article, full-page ad and tipped-in brochure in this issue, Foodservice News is hosting its 7th Annual Minnesota Restaurant Business Conference on Monday, September 29 at the DoubleTree Park Place Hotel in St. Louis Park. See the materials in the coming pages for more information and to register.