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|User Info||Don't Fear The Recession; entered at 2022-06-23 08:55:28|
Registered: 2012-04-19 45th parallel
I used to work in design for restaurant/hospitality. Food and beverage is a crazy business and I'm sure you all have heard how many restaurants fail after the first year. Well, that's not a bad thing. A brand new build for a full service restaurant is millions. The kitchen equipment alone is 7 figures for a decent sized establishment. When someone fails they can sell off things that aren't bolted down but a lot of that stuff stays...and the next guy to lease it effectively gets it for pennies on the dollar. Sure, it might not be exactly to your favorite spec and you'll probably want to rebrand the public spaces but overall the 2nd owner should have only a fraction of the capital costs. That means he can likely charge less for the product but also means he can probably survive as a business where the original owner could not. Seen it happen over and over and over again. |
Remember one restaurant Owner dumping close to $10M (2017 money) into a ridiculous establishment. He said it was going to be his legacy and somehow got investors to come along. Upon seeing the business plan I knew it was DOA before the design was even done - and advised him to NOT go with fine dining, etc. I'm just an Architect and my advice was not heeded even though I had more experience with restaurant development than he did, oh well....I was back in late 2018 to redesign that space with a new Client. Worked out just fine for me. Stupid people, stupid prizes.
A recession to rebalance the macro economy is not really any different. I'm not afraid.