Hello, I’m Richard Ruvo, Restaurant and Hospitality Specialist for All Florida GMAC Real Estate. During these times commercial investment and site selection can be tricky. Trends are changing constantly. Zoning restrictions differ between city to city and county to county. Building codes can be very complicated. Investors, both buyers and sellers, need professional management to help guide them through the sales contract or leasing process, due diligence period, and closing.

Despite these difficult times the State of Florida is one of the fastest growing areas in the nation. With that growth the need for many types of commercial projects becomes a primary objective. One area where there is a particular need is in the restaurant and hospitality industry. Lease space in retail and shopping centers along with land for free standing buildings are just a few of the wide variety of investment opportunities available here. The twenty five years I've spent in the restaurant industry has provided me with the latest training, superior product knowledge, and the experience to anticipate and alleviate any roadblocks before they become problems.

In that time I have performed a wide range of duties that included unit and upper level management, franchise development and site selection, owner/operator, executive chef and restaurant consulting. I have written menus, developed concepts, and oversaw the construction of many different types of operations on both the corporate and private level. My expertise in the field is as wide ranging and diversified as you will find in the field.

In addition, I have lived in the State of Florida since 1973 and as an eight year commercial real estate practitioner I will also provide expert knowledge of the each area's strengths and shortcomings as well as demographics and trends in the hospitality industry for the entire eastern coast of the state.

My clients are individuals that wish to buy or sell an existing restaurant, are end users that needs space for their own company, want to purchase land to build, large corporations looking for space or enterprising individuals researching what it takes to place themselves in one of the litany of franchises in the hospitality industry. I provide superior service and most importantly the confidentiality needed in today’s highly competitive market.

As with any new enterprise restaurant operators want to begin their journey properly. I can ensure that your interests will be regarded in the highest priority and confidentiality. I only take on a small and special number of clients. This enables me to give you the personalized service that will help your company achieve all the goals you have set out for your new business or existing business.

Please feel free to contact me at any time. Thank you.

Richard Ruvo
Restaurant and Hospitality Industry Specialist
All Florida GMAC Real Estate
1648 Port Saint Lucie Blvd.
Port Saint Lucie, Florida 34952
772-285-9450 - direct
772-335-3467 - fax
teal97@bellsouth.net - email

                                 It's All About The Operator

Lately, I've been asked quite a bit as to why a certain restaurant succeeds in a location while many others in the same spot have failed miserably. Sure, the restaurant business is in, at best, a stagnant market. Many industry experts say that restaurants, both the chains and independents are in the midst of the worst times they have experienced in two decades. That may be all true. Until a few months ago gas prices were at their most expensive levels ever and even though much more in line right now, there really isn't public confidence nor assurance that they will stay that way. Expendable income is probably at it's lowest point in years due to the housing market decline, lost 401K's or retirement funds, inability to acquire financing and people losing jobs faster then anyone could anticipate. Operationally, the cost of raw product as a whole from distributor to buyer is at an all time high. This has caused, in some cases, a huge increase in the past 12 months of some products such as flour, meat, dairy, etc. that negatively effect a restaurants bottom line. All this leaves the restauranteur few options other then to raise prices, reduce quality of product, smaller portion sizes or a combination of the three.

As with many other sectors of commerce, the restaurant industry is fighting this flagging economy. You can draw parallels on how some businesses/indusries today continue to stay successful while many others flounder. I'm not really going to get into that. But as a former restauranteur and someone that deals and interacts with industry leaders almost daily, I find it's pretty simple. To move forward, you have to go back to the basics. Now that may sound simple but the fact is as a whole, in a good economy, depending upon the market, the restaurant attrition rate for independent operators was still somewhere between 70 and 85 percent. That means that fourteen to seventeen of twenty new restaurants will fail. Location plays a part, but only one of a litany of issues. Many are underfinanced. They may have enough capital to open. But as many of you are aware, it takes far more capital then the initial investment to maintain the array of problems in relation to the cost of product issues I mentioned earlier. The banks present lending, or lack of, stance has a huge impact on keeping many independent restauranteurs financed to the level of maintaining some semblence of normal business practices. An operator, will encounter after they open, roof issues, the maintenance of refrigeration or freezers along with many unforseen issues, sanitation cost increases, food handling (loss of product due to spoilage in comparison to widely varying sales fluctuations), training costs in relation to employee turnover and cost of government intervention to just name a few.

This also applies to chains. Take Darden (Olive Garden, Red Lobster, Seasons 52, et. al.) for example. First they don't franchise. That means they control their management to their own standards. With the extremely rare exception of someone in upper-level management, they either promote from within or hire quality individuals to entry level positions and train each person to their standards. When they expand they are very careful as to their selection of new locations. Recently, they sold off the Smokey Bones Division. Part of the reason being that barbeque is such a regionalized product that they discovered their basic menu didn't work in certain parts of the country. So rather then spend millions in menu development and changing it's selections on a regional basis, they sold the rights. Conversely they acquired Longhorn Steakhouse from Rare Hospitality. When they make a move such as that they already have a trained management staff in the company they took on. They may make adjustments as time goes on due to personalities or management style, but they don't have to go out and hire what can be as much as 1500 management employees, spend the cost of training them and hope they all work out. Finally, their advertising and promotion approach functions on a national level which makes it much more cost effective per unit and highly visible throughout the country. These are just a few of the reasons they are, in my opinion, the number one dinner house chain in the world. This also explains how the properly run, larger chains are less effected then the independent operators.

Conversely, look at other chains that grow too rapidly because of either mergers and acquisitions, expansion or franchising. This brings to the fore, buying or leasing locations and putting up restaurants without having the proper management in place to run them properly, leveraging themselves to the hilt to pay for the expansion, or doing so through franchising by bringing in restaurant investors that are less qualified because they need the influx of the franchisees cash to keep their heads above water. You find that even though their companywide sales increases due to the expanded number of units, their profits turn into losses because they cannot maintain a consistant, quality product due to unit mismanagement and increased outlay of funds to maintain more operating restaurants. That causes their sales per unit to eventually decrease which causes a ripple effect throughout the company and suddenly a successful chain with fifteen or twenty units turns into one with fifty restaurants on the verge of bankruptcy. Bottomline they didn't use their heads and expand at a level that fits their concepts growth rate. I'm not going to name chains here but as of today I know of many, of what I would call mid to major restaurant players, on the verge of either a bankruptcy or a situation where they leveraged themselves to a point where they need to have their financing package redone or at least adjusted to keep from selling off some of their assets to stay afloat. It's either that, close the doors or sell to an investor for pennies on the dollar of what their properties are really worth.

All this leads back to the title of this blog entry. Yes, you can develop skills to become a successful restaurant operator. But it's also something that's in your blood as well. The real successful ones have the drive as well as the foresight to face all obstacles. They or their upper management sees downtrends before they happen and prepare themselves to combat each circumstance at the initial onslaught instead of struggling once it starts or changing the operation(s) essence after it's too late. Once you get to the point of adjusting from behind, especially in these economic times, you are pretty much doomed to fail unless you are lucky enough to catch "lightning in a bottle" because there are just too many obstacles to overcome. The former group, whether independent or multi-unit chains tend to be the true grass roots operators and personify what I mean when I say in the restaurant and hospitality industry, "It's All About The Operator."