Restaurant Leadership Podcast: Overcome Burnout, Embrace Freedom, and Drive Growth
Welcome to the Restaurant Leadership Podcast, the show that teaches you how to overcome burnout, embrace freedom, and drive growth
Your host, Christin Marvin, of Solutions by Christin.
With over two decades of extensive experience in hospitality leadership, Christin Marvin has successfully managed a diverse range of concepts, encompassing fine dining and high-volume brunch.
She has now established her own coaching and consulting firm, collaborating with organizations to accelerate internal leadership development to increase retention and thrive.
Each week, Christin brings you content and conversation to make you a more effective leader.
This includes tips, tricks and REAL stories from REAL people that have inspired her-discussing their successes, challenges and personal transformation.
This podcast is a community of support to inspire YOU on YOUR unique leadership journey.
This podcast will help you answer the following questions:
1. How do I increase my confidence?
2. How do I accelerate my leadership?
3. How do I lower my stress as a leader?
4. How do I prevent burnout?
5. How do I improve my mental health?
So join the conversation and listen in each week on spotify and apple podcasts and follow Christin on LinkedIn.
Voice Over, Mixing and Mastering Credits:
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Artwork by Solstice Photography, Tucson, AZ.
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Restaurant Leadership Podcast: Overcome Burnout, Embrace Freedom, and Drive Growth
84: How to Successfully Navigate the Gap from Restaurant Operator to Owner
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The gap between restaurant operator and owner is vast, profound, and often misunderstood—something Austin Carson describes as the difference between "having a puppy and having a kid."
In this candid conversation, the co-owner of Restaurant Olivia takes us behind the curtain of restaurant entrepreneurship, revealing the emotional weight, financial complexities, and strategic decisions that define successful ownership.
This episode is brought to you in proud partnership with Restaurant Technologies—a company that supports restaurants across the country by helping them automate back-of-house operations and reduce risk, labor, and waste. Their smart systems and data-driven insights help operators focus on what really matters: their people, their food, and their guests.
Austin's entrepreneurial journey began with Bistro Georgette, a 160-square-foot shipping container in Denver's Avanti Food Hall—a deliberate choice to minimize financial risk while testing both concept and partnership dynamics. This strategic first step allowed Austin and his partners to bootstrap their way into acquiring Cafe Marmont, which they later transformed into the acclaimed Restaurant Olivia. Now preparing to open their second concept, Amelia, Austin shares hard-earned wisdom about construction challenges, city regulations, and the creative financial strategies that have sustained their growth.
What makes this conversation particularly valuable is Austin's transparent discussion of financial realities. From negotiating lease terms to structuring capital stacks, from personal guarantees to the current 1-3% profit margins Denver restaurants face, he provides practical insights rarely discussed in culinary school or management training. He emphasizes the importance of understanding financial statements, creating effective systems, and finding strategic partners whose values align with your mission.
Perhaps most compelling is Austin's perspective on sustaining passion through inevitable challenges. "I need a bigger why," he explains, describing how their commitment to sustainability and hospitality provides the "clean-burning fuel" that powers them through difficult days. For anyone contemplating restaurant ownership or seeking to improve their current operation, Austin's journey offers both practical guidance and inspirational purpose.
Ready to dive deeper into restaurant leadership? Subscribe now and join our community of industry professionals committed to building sustainable, successful restaurants in today's challenging market.
Resources:
Kevin Nguyen/Regular Architecture
Prim + Co /PR
More from Christin:
Grab your free copy of my audiobook, The Hospitality Leader's Roadmap: Move from Ordinary to Extraordinary at christinmarvin.com/audio
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Today I'm speaking with Austin Carson, co-owner of Restaurant Olivia in Denver, colorado. Austin is going to take us through the challenges and opportunities of an operator going into owner and the gap of knowledge that needs to happen in order for operators and owners in this day and age to be successful. He takes us through his journey of going from bar manager to food hall owner, to taking over an existing restaurant and making it his own and their own with his partners and opening a restaurant five years ago, and then the challenges of opening a restaurant in this day and age, especially in a difficult and costly environment that is Denver, colorado. There's a ton of resources in this episode. You want to make sure you listen through the whole thing and I'll put all the show notes, the links, in the show notes for you. Hope that you really really enjoy this one. There's a ton of value here.
Speaker 1:Welcome to the Restaurant Leadership Podcast, the show where restaurant leaders learn tools, tactics and habits from the world's greatest operators. I'm your host, kristen Marvin, with Solutions by Kristen. I've spent the last two decades in the restaurant industry and now partner with restaurant owners to develop their leaders and scale their businesses through powerful one-on-one coaching, group coaching and leadership workshops. This show is complete with episodes around coaching, leadership development and interviews with powerful industry leaders. You can now engage with me on the show and share topics you'd like to hear about, leadership lessons you want to learn and any feedback you have. Simply click the link at the top of the show notes and I will give you a shout out on a future episode. Thanks so much for listening and I look forward to connecting.
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Speaker 1:If you're curious about this and want to learn more about how it could work in your space, visit gorti-inccom slash restaurant leadership podcast. Again, that's gorti-inccom slash restaurant leadership podcast. All right, austin, thank you so much for being here. Love that we are going to share your experience today and valuable insights into the experiences that you've had with opening restaurants. So you're getting ready to open. Is this your fourth concept? Second in the group.
Speaker 2:I suppose it would be third Okay.
Speaker 1:Okay, so take us back to the first concept. What tell us a little bit about that opening and your experience there?
Speaker 2:Yeah, so we opened Bistro Georgette inside of Avanti Um. That was the first kind of foray into uh, entrepreneurship, I guess, as restaurateurs. Um was, for those not familiar, avanti's a food hall in Denver and we had 160 square foot shipping container and we did kind of French inspired street food was the original concept. So it was. Avanti does a really good job of kind of walking you through the process and limiting risk and exposure, which was part of the appeal for us and the the. The cost of opening in Avanti is dramatically less than opening a traditional brick and mortar, so that was, I guess, another driver of of why we wanted to go that route, and that was August of 2018 when we opened and launched that concept.
Speaker 1:And were you hoping to with Bistro Georgette? Were you hoping to kind of get proof of concept there and then expand? Was that kind of the goal, on top of just managing the risk from a financial standpoint, and just kind of being in a community where marketing was something that was shared and, and you know, you had other concepts in there that could help you drive traffic?
Speaker 2:Yeah. So I think and this bleeds into the, the strategy, I suppose, behind both Olivia and Amelia I specifically wanted to mitigate financial risk to the extent that we could, and brick and mortars are scary. But I think a lot of people who have a lot of experience running restaurants don't necessarily understand the leap from kind of operations to ownership, and I certainly didn't. I thought I did. I make this comparison a lot it's. It's. It's kind of like going from having a dog or a puppy to having a kid.
Speaker 2:Uh, and as as much as you think you can prepare for the realities of what that that is and looks like it's, it's almost impossible. So I guess I had enough foresight to put us in a position to get it open, basically on savings and credit cards. And then I felt I felt like small enough space, despite it being two meal periods a day, seven days a week, that the three of us as owners could cover the majority of the labor required to keep the place open, didn't pay ourselves a whole lot. We were able to stack up cash and a year or so later rolled that into the purchase of Cafe Marmont. But, um, again it was.
Speaker 2:It was my lack of comfort with the world of construction? Um, I didn't, you know, I felt like I had a pretty good sense of, um, finance within the context of restaurant operations, but not necessarily the acquisition of external capital. I didn't think I was savvy enough to really do that well, um, in a new brick and mortar space, and so, uh, you know, it was a lot, but it did what we wanted it to do and I, I guess, to your, to your question about proof of concepts, I, I think that was the original goal, although it was long enough ago that I'm um, I'm not sure I'm remembering that accurately we didn't open a Bistro, georgette.
Speaker 2:I think the idea was to open a restaurant in Georgia, and one thing led to another, we ended up going the direction of what Olivia is now, which is pasta-focused Italian. So I think less proof of concept and more just proof that our relationship amongst each other was sound and that our kind of alignment with respect to core values and what it is we wanted to get out of this was strong enough that we could take the leap into the world of brick and mortar.
Speaker 1:Yeah, and you have three business partners. Would you talk a little bit about that relationship and kind of how you guys designed that in the beginning?
Speaker 2:Yeah, well, so I'm the third, uh, two business partners technically there are three of us, um, and yeah, I mean, one of them is is my wife, uh, Heather Morrison. Uh, who is, for my money, the best um hospitality professional working in the city of Denver, if not the state of Colorado. We met all three of us met at Mizuna and she and I kind of immediately started to nerd out on on hospitality just in general and and what, how our job boils down to the way that we make other people feel. And she has just this other worldly ability to deconstruct the guest experience from a psychological perspective. That just kind of blew my mind and certainly put me in a position to grow more as a professional and as a person.
Speaker 2:And about a year into my being at Mizuna, ty came on board and he moved pretty quickly into the executive chef role, or CDC role, I suppose, and he was the first chef that either of us had worked with who was consistently willing to say yes to guest requests and to put us as front of the house staff in a position to meet the guests where they were. And I think he got why Heather and I operate the way that we operate and why we make the decisions that we make, and he's immensely talented in his own right and could go do any type of cuisine that he wanted. He's also the hardest working person I've ever met. Um, but it it, I don't know. I guess it it set the conditions, uh, to put us in a position to have a conversation about opening our own place. And uh, we were about four years into our relationship when we took the leap and opened up at Avanti.
Speaker 1:Hey there, podcast friends. I hope you're enjoying these impactful conversations and leadership insights I'm bringing you each week. Before we dive back into today's episode, I want to take a moment and reach out and ask a small favor. That would go a long way in supporting the show. If you've been loving the content I'm providing, please take a moment to leave a rating and review. Wherever you listen to your podcasts, not only does it make my day, but it also plays a pivotal role in helping the show grow. Your reviews boost my visibility, attract new listeners and encourage exciting guests to join me on the mic. So if you want to be part of my show's growth journey, hit that review button and let me know what you think. Thanks a million for being awesome listeners. So you knew you knew that you guys shared core values. You knew you had a strong connection. You knew you had similar mindsets and that made you feel comfortable enough to go into partnership.
Speaker 2:To the extent that you can know, yes, yeah.
Speaker 1:What didn't you know?
Speaker 2:You don't know what you don't know, and I think it's impossible to really truly know another person until you're in the thick of it. You're in the weeds, and not just a busy service, but like shouldering the weight of being an owner and all that that entails, you know, and increased levels of responsibility and increased levels of risk. And when you can do that and you can demonstrate an ability and willingness to do that with one another over a long period of time, um, you start to get the sense that, okay, you can do this for a while. It's kind of like dating and moving into marriage, and Bistro Georgette, in a way, was still kind of dating. It isn't that I had doubts or second thoughts, but the way that Avanti structures their leases, they're short term and we signed I think it was 24 months.
Speaker 2:Um had a really tough first year. Second year actually coincided with COVID, uh. So at the end of the second year we signed again for another two. So we ended up being there for about four. But it's a situation where you can come in and you can look at to your point proof of concept, you can look at your relationship with the people that you're doing it with with less risk, right. So you sign a personal guarantee, but it's not like signing a personal guarantee on what we did with Olivia or what we're doing with Amelia. So there's kind of a you know, maybe it's like being engaged.
Speaker 1:Sure, you can. You can call it off if you need to call it off, right, but you're hoping for the best.
Speaker 2:Yes, and here we are still, happily married.
Speaker 1:Did you, and I agree with you on all the points you said about Heather, of course, and Ty getting to know you all Did you. So you knew you wanted to go into a food hall. Did you shop around and look at other food halls and leases and all that? Or did you know? Avanti was it?
Speaker 2:We didn't. We didn't shop around at all. In fact, we had a relationship with Patrick O'Neill, who's one of the owners. He was a regular at Mizuna and we had gotten to know him pretty well just at Mizuna and a space came available or we knew a space was coming available. We did a couple of tastings with them and just decided that that was a good way for us to take that first step into being restaurateurs. But no, we didn't look at any other food halls At the time. I'm sure there were one or two more, but it wasn't like it is today or has been in the last few years. They weren't everywhere.
Speaker 1:Were they looking for a French concept, or were you able to go in and say, hey, we've got an idea. Let's pitch this.
Speaker 2:They weren't, in fact the first tasting that we did with them kind of flopped Not many people know this. We did something that was meant to be sort of inspired by Colorado and the history of Colorado and kind of the confluence of all of the different types of cuisines but was driven by Colorado product and we did a tasting and it was, I think, conceptually just kind of nebulous. Well, I think the food was good. It didn't quite land with them and we parted ways that night and Ty Heather and I continued to talk and we looked at what was currently at Abante, what we knew was coming in, and we felt like you know we were coming from.
Speaker 2:Mizuno French food and, I guess, ways in which we could repackage the kind of like paradigm of French food into more of a street food centric approach that would be effective at Avanti, which was ultimately it was not out of the gate, but neither here nor there.
Speaker 1:I want to go back to what you said earlier about the gap between operator going from operator to owner. Why is that gap so large?
Speaker 2:Well, some of this is probably pinned to my own neuroses and potentially insecurity, but just the weight of everything that you do is heavier, and that goes from you know being a personal guarantor right and understanding the existential consequences of failure of a business. You know you can be understanding the existential consequences of failure of a business. You know you can be an operator. You can work for another person. The reality is, especially nowadays. I mean, if our restaurant closed, the vast majority of our staff would be able to have a job in 48 hours somewhere else, right? So like, the level of disruption to your life from a personal and financial standpoint while you feel invested is just it's. It's apples and oranges.
Speaker 2:And then you start to grow and you put yourself in a position to have employees who count on you and depend on you for various things and, um, you start to pin your work to, uh, a bigger mission and vision and purpose and it just kind of doubles down on some of that weight and pressure and stress and, uh, the mechanics are the same, right. I mean I, you know, I'll probably be busting tables tonight. I still wash dishes, ty works the line, heather was working the door last night. You know that that's kind of the easy stuff, yeah, um, but the, the, the emotional weight, probably more than anything else, is just it's, it's exponentially greater when it becomes yours.
Speaker 1:Looking back on that now, how could you give? Give anybody that's listening some advice on how do you prepare for that transition and that, that pressure and that weight that comes along. I felt it too. I couldn't sleep at night the minute I had managing partner on my title. I had no idea what was coming, and when sales were down, it was just the most frightening thing I'd ever experienced in my life. How would you prepare for that now?
Speaker 2:Yeah, I mean, the flippant part of me says how do you prepare for having?
Speaker 1:a baby yeah.
Speaker 2:But you can't say. If I could go back and do it again. I would try to put myself in a position to to um, prepare myself my central nervous system in my body for what was going to be an increased workload and stress load, and everybody has their own, I think, methods for doing that. Having a physical reprieve, going to the gym, whatever your thing is, I think is really important. Having other people to talk to, whether that's in the world of psychotherapy or just a peer group of people who are owners, which I think is a really important distinction because they have the ability to empathize with you helps, I have found, helps lighten the load and you know what are the things that you can do to put yourself in a position to not be overwhelmed and overcome by the stress. And I, you know, I mean eight years in, seven years in, I'm not going to lie, I'm not nailing any of those things. So I don't know that I have specific advice as to what I would do if I could do it again, but I do know that those would largely be points of focus and I I really enjoy. I enjoyed learning, I enjoyed reading, I had a lot of experience before we opened the first place, um, getting a little bit more specific, about finding a pathway to becoming a better leader. I would probably develop some time in that direction and I would. I would double down on um financial skills and acumen.
Speaker 2:Uh, because particularly when you, when you put yourself in a position to grow and open another restaurant, the skills required, um are just far greater than I think what most operators are used to.
Speaker 2:With you know assessing, you know gross margin and cost of goods and net profit and things like that, you start to look at terms and the fun thing I think about opening a restaurant is the deal terms there's, there's kind of a blueprint, but you can get creative. When you establish relationships with angel investors, even, to some extent, uh, traditional lending institutions, you can get creative in the way that you structure those deals. And the more knowledge you have about, you know, cost of capital and what your business needs to run, the more you can identify the best partner for you and then structure a deal that's positive sum, that's in the best interest of both parties and that, frankly, it takes a lot of financial knowledge that I didn't have out of the gate, so I don't know how good any of that advice is, but that's probably what I would do if I were to do it again.
Speaker 1:Yeah, I mean you mentioned a lot of resources in terms of community and surrounding yourself with owners and reading, but how did you? Is there one resource that you really dug your heels into to gain that financial acumen?
Speaker 2:You know I don't think so I w I've been really fortunate. I have ownership in another company based out of Oklahoma city and my involvement in that um business is a lot less operational. We get together on a quarterly basis and we pour over financial statements and that has been a massive inflection point for me, just learning, you know, I think everybody has a general working understanding of a P&L, but understanding the ins and outs and understanding how that relates to balance sheet and then cash flow statements and then how you look at these seemingly lagging indicators and put yourself in a position to make decisions based on strategy and the future has been huge. And I don't, I guess I'm not sure what that resource would look like for somebody looking to learn. There are a handful of books that are really wonderful. You know, YouTube, university has all kinds of resources, but I guess to get specific, put yourself in a position to really, truly and deeply understand financial statements, is a really big advantage.
Speaker 1:Hi everybody, we're taking a quick break to offer you an exciting opportunity. If you're a restaurant owner or manager looking to enhance your leadership skills, I invite you to join my 12-day leadership challenge skills. I invite you to join my 12 day leadership challenge. In just 12 days, you'll receive a guided packet with actionable strategies to transform your leadership in less than five minutes a day. Join the challenge and the community, and grab your copy at kristinmarvincom. Slash 12 days Now. Let's get back to the show. Slash 12 days Now. Let's get back to the show. How did you know? I mean, what was the point? What were the indicators at Avanti that you guys were doing well and you were ready to take the leap and go brick and mortar.
Speaker 2:Gosh, I'm not really sure. I think we were still probably at a point we felt like we we had started to develop, we had a relationship that was strong, we had started to develop some systems that made some sense. Um, and we had a chance meeting with the two gentlemen who became our brokers uh, zach citron, who I was talking to yesterday and they started showing us some listings and we started looking. I think we started looking before we were truly ready, which tends to happen in residential real estate as well.
Speaker 2:And you kind of fall in love and you sort of just make it happen, make it work, and that's kind of how it played out. In fact, the deal at Cafe Marmont had been lost, I believe, twice before we came to terms for what it ultimately ended up being. I think we signed that lease on August 15th 2019. The first iteration was actually partnering with Zach and Nathan and we were trying to buy the building. They were trying to buy the building and we did kind of an equity swap situation where we took over the restaurant. They had a little bit of ownership in the restaurant, we had a little bit of ownership in the building and we did kind of an equity swap situation where we took over the restaurant. They had a little bit of ownership in the restaurant, we had a little bit of ownership in the building and that deal fell through.
Speaker 2:But we kept kept working at it, knew it was a spot in a neighborhood that we were really interested in and and, um, everything worked out. But I mean, yeah, we, we got the keys on september 1st 2019, which was a Sunday they were open for brunch, which we didn't have a whole lot of interest in and walked in and just kind of hit the ground running. You know we had. We kept the staff that wanted to stay and then we brought two or three people on our own and then three of us and kind of just you know, took over and white knuckled it.
Speaker 1:Did you get rid of the Avanti concept at that time, or were you operating both?
Speaker 2:We didn't. We operated both for about a year, if memory serves, maybe a little bit longer.
Speaker 1:If, if the brokers hadn't approached you with that deal, do you think you guys would have expanded?
Speaker 2:We wouldn't have done it as quickly. No, I think we probably would have gotten nearer to the end of our lease term and started looking. I didn't have any, you know, I had no working relationships with brokers. I didn't have any idea what that process looks like. I didn't have any idea how to negotiate a lease, any of these things, and I guess I figured along the way I would start to pick up and develop those skills. And but no, without that relationship I don't think we would have jumped in as quickly as we did.
Speaker 1:So you guys took over cafe Marmont, kept the name and open the doors and just jumped in and how? I mean, how was that for you? Was there some internal struggle of like we're going to take over somebody else's name? How do we make this our identity? What was that transition like?
Speaker 2:Yeah, you know, it's really funny At most. Every step along the way, the vast majority of people that we've interacted with have told us how stupid we were for making the decisions that we made, going from fine dining to a food hall and then taking over Cafe Marmont and running it as Cafe Marmont through the end of the year.
Speaker 2:Look at me now, right. So I mean, again, it came down to money. We just didn't have it. What we had was cash that we had stacked up. We paid ourselves very little, we worked like crazy people and then we took that money, plus some savings and credit cards, and turned it into Cafe Marmont. And we had had a chance to look at their financials and knew that that, you know, the fourth quarter was when they made money. We had run a French restaurant before Um, so we took it over and there was a little bit of a press push. So, people, I think we're generally aware that um, there was new ownership and we had a, you know, a reasonably strong Q4 closed, closed for two weeks, 14 days, flipped the restaurant again just on cash that we had generated in that fourth quarter and opened up seven weeks to the day before we closed for COVID.
Speaker 2:But I, I mean again, it comes back to. It comes back to, at the time, my lack of what I perceived as a lack of financial acumen that I didn't want to be taken advantage of by external investments, especially if I didn't truly understand it. Nor was there, you know, I imagine I could have pressed a little harder to try to find those investments, but it certainly wasn't knocking on the door. Traditional lending institutions had no interest in what we were doing. We just weren't proven enough yet. None of us really come from families who could throw a bunch of money at a restaurant, in particular given the risk profile. So we did what we needed to do and, yeah, I mean it worked out. We also didn't want to step in and just kind of overnight take the restaurant from the neighborhood, um, which had become, you know, uh, reasonably popular within the neighborhood. So made a few minor adjustments kind of early on and Ty slowly developed the menu into his menu, um and again we, it went pretty darn well in hindsight.
Speaker 1:So what happened with Cafe Marmont that then led you to saying, okay, we're going to open a restaurant in Olivia.
Speaker 2:Yeah, so we did have that. That plan was in place from the beginning. It was going to operate through New Year's Eve and then we're going to flip it to restaurant Olivia. And in fact Ty had gone to stage, so he spent some time at La Pigeon in Portland but specifically went to stage at Lilia and New York city and then flower and water in San Francisco.
Speaker 2:And we knew, you know, none of us are Italian, so the idea wasn't necessarily to be a kind of Italian first restaurant, um, but you know, if you know, ty Ty seems happiest, or at least certainly at that point, covered in flour, and I really enjoyed the process of learning about pasta and his kind of moniker from the beginning was like, if you can fit it into a tortelloni, we want to be able to put it on the menu, whether it's Italian or not. And so we did. You know, we got, we did a little bit, did a little bit of pushback and I go the rest of the. The city doesn't need another Italian restaurant. Meanwhile we had put two pasta dishes on our menu and those were the two that sold out every night. And you know, I think we maybe firmed up the concept over those three or four months, but by and large we we entered into it with a plan to flip it in January of 2020.
Speaker 2:Okay, got it. What happened then? Yeah, january 14th opened up. A first night of service went well. I think it was a Thursday. If I remember correctly, um had some pretty solid press out of the gate. Uh, you know, as we started to get our feet underneath us, covid hit and it was seven weeks to the day Shut the restaurant down and then, I don't know, I feel like I kind of blacked out and about a year later we emerged and sort of had a restaurant again, but it was a good seven weeks prior to shutting down.
Speaker 1:Yeah, you mentioned press a couple times. Did you guys have a PR firm and were you going after this press? It was a good seven weeks prior to shutting down. Yeah, you mentioned press a couple of times.
Speaker 2:Did you guys have a PR firm and were you going after this press or was it kind of coming in organically? What did that look like? A little bit of both. We had a few relationships from previous life and I was fortunate enough to have a I don't know a decent career on the bar side and had a few articles written and had gotten to know members of the media, um, and we were able to reach out to them. But we did engage uh prim communications with um for PR help and we kind of use them intermittently. Uh, until about a year ago or so they've been a fixture in our, in our world Um and there.
Speaker 2:I think, uh, gretchen, the owner of the businesses, I think of her about as highly as I do any business person in this town and that was a big part of it. And I think, as is the case with um, most of the relationships that you have and enter into when you're an owner, you want to find partnerships and and, uh, we, you know I think she knew at the time we couldn't afford to do it, but we felt compelled to tell our story and still feel compelled to tell our story as it's on, as it's kind of unraveling on a daily basis. And, yeah, I mean I that has been a wonderful relationship.
Speaker 1:That's awesome. So it's been over five years. You've had Olivia. You guys are wildly successful. You're crushing it, going on weights every night. It's incredible Expansion. You've just continued to put so much thought and strategy and innovation into that space and it's paying off, did you know, at a certain point you wanted to get ready to open another one.
Speaker 2:I think it was on the back of our minds um, I don't, we weren't actively seeking a second location when this one when what is what will become amelia popped up. Uh, one of the things that's tricky about restaurants, you know, single, single unit restaurants, especially the size, the original size of olivia, which was, uh, I mean, we were doing 60 covers a night, basically sold out and even at a reasonably high PPA, that's, it just isn't enough top line revenue to justify things like health insurance. And we wanted to put ourselves in a position to complete a kind of suite of compensatory benefits for our employees and also wanted to take advantage of, you know, other types of economies of scale and deal, start to deal directly with producers, start to do some things that furthered our mission. And we felt like a second location ultimately, was going to be the way in which we could do that. And again, we weren't looking.
Speaker 2:The people at the Current reached out to us a few times. I didn't have a whole lot of success. Our broker reached out to us at one point. I was like, hey, you know, these folks have a bunch of LOIs offered the space seems really compelling to me. We should just go take a look at it. And we went and looked at it. It turns out we were, I guess, favorite restaurant in Denver of their capital partners. So they were pretty intent on signing us.
Speaker 2:And I was really honest from the beginning. It wasn't, it wasn't a uh negotiation necessarily, it was just hey, here's the reality of where we are. Um, don't have a whole lot of cash, we're not general contractors, um, so if we can strike a deal that makes sense on both sides, we're happy to have that discussion. But we don't. You know, we don't want to lead anybody on and you know, one thing led to another Saw the space, loved it, loved the potential of that neighborhood, and we're able to get a deal done and we're, I think, close to permitting. My hope is that September, october of this year, we'll be able to get it open.
Speaker 1:But you know that's been a process in and of itself. Yeah, this is completely new for you. You're not taking over an existing spot, you're building it out. I mean, what tell you know? Talk a little bit about some of the massive changes here from you know, as far as the process and the strategy from Cafe Marmont to or from Olivia to Amelia.
Speaker 2:Yeah, we were fortunate.
Speaker 2:We expanded Restaurant Olivia, which was actually more financially difficult than COVID was.
Speaker 2:Truthfully, we went through that process, got a look in a window into what the process looks like, particularly dealing with the city, and we ended up 14 months past the original targeted date of completion, having paid rent the whole time and having increased staff size to accommodate increasing capacity. And we did that way too early, very prematurely. So we learned a lot of really painful lessons there. In fact we at one point, you know, we liquidated retirement accounts to keep the place afloat because we felt so strongly about the people that we had onboarded and we didn't want to let go of any of those people, despite the fact we were kind of drowning waiting for the city to give us approval to open.
Speaker 2:It has since worked out, I suppose, and the good thing is we learned a lot of really painful lessons that dictated the way we negotiated the lease at Amelia and among those lessons we've tied our CO to or tied the lease commencement to the CO. So regardless of how long it takes, we won't actually be paying rent until the city gives us permission to open and then there's rent abatement on the back of that too. So I think had we not gone through that, had we not expanded the restaurant, or had we expanded the restaurant, that had we not expanded the restaurant, or had we expanded the restaurant and it had gone flawlessly, we probably would have been negotiating this much bigger deal from a place of relative ignorance.
Speaker 1:Yeah.
Speaker 2:Yeah.
Speaker 1:And talk about the design process. I mean, the market in Denver is so challenging right now. Everything is so much more now, Everything is so much more expensive. What are some of the hurdles that you've had to overcome going through this process of of opening your own space?
Speaker 2:Yeah, yeah, I will say that. Um, so we're working with Kevin Wynn, uh, who is just a phenomenal architect here in town, um, and is, as an aside, he's, he's a hospitality nerd, you know, and we had a conversation with him the very first time I met him about the intricacies of how to set up a POS station. You know, like, how do you hide, you know, keyboards if you need them, and I was like, yeah, this is our guy. He's from the same neurotic place and yeah he's been wonderful.
Speaker 2:I will say that, uh, the the original design is. I think what we're rolling out with when we open is going to be an amazing restaurant and I largely attribute that to him. But there have been a lot of concessions made since that first kind of design meeting and the first look at uh renderings and's. You're right, it's just it is an incredibly expensive process. It is, in my opinion, unnecessarily bureaucratic and overly complex and, mind you, we haven't even started swinging hammers. But I mean we're we're somewhere between $290,000 and $350,000 over budget on construction, specifically again not having swung a hammer in dollars over budget on construction, specifically again not having swung a hammer and uh, they're energized.
Speaker 2:Denver, which is part of the green initiative, uh, and moving towards electric, has been a really big part of that. Uh, I was actually interacting with one of our investors who has a relationship with the mayor and we were going over, you know. I mean we're north of a hundred thousand dollars in costs associated with the project. That doesn't have any bearing on what it is that we are doing because of these initiatives and I mean our we largely focus on kind of two pillars of our restaurant as sustainability and hospitality and as the, as a person who has, you know, ownership an electrical company full disclosure I'm not self-righteous about that and I also understand the downside of the grid and efficiency. Within the context of restaurants. We certainly applaud a move towards a more sustainable future, but the way in which it's being rolled out and the cost associated with opening a restaurant in Denver right now as a result of these policies are are very cumbersome. Let's say yeah, yeah.
Speaker 1:What? Um, there's just so much value here. Thank you so much for sharing um, all that stuff and all these amazing resources of all these names and restaurants and and uh PR companies and Kevin's company. We'll put all that in the notes but, looking back on your career and all the things that you've learned and the leaps that you've taken and the risk that you've mitigated, if someone's listening to this and they're thinking about opening their first restaurant and they're coming from an operator standpoint restaurant and they're coming from an operator standpoint, would you advise them to go the food hall route or take over an existing space? What would you? What would you advise them to do?
Speaker 2:Um, I there. There's definitely not a one size fits all, uh, and it depends on your background. It depends on on how you're funding it. You know, if you have strategic partners out of the gate who you're comfortable with and trust, who have really high levels of financial acumen and you feel comfortable adding debt or giving up equity, there's no reason that you can't get into a brick and mortar space and there are opportunities out there. You know, despite the number of closures and how competitive it's been, you know, if you're looking at something in the four to 6,000 square foot range, there are plenty of deals. And if you are comfortable with lease negotiation, you have the right partner on the broker side and you feel like you can set the conditions via deal terms to be successful, you can absolutely, you know, take that leap.
Speaker 2:I, you know we are very conservative financially and I, I uh there are a lot of restaurants in town right now that are very quickly going from one to two and two to three, three to four. And you talk to people and you hear these deal terms and they're terrifying to me. Um, what our, uh? I think being really intentional with the way that you construct your capital stack is incredibly important. And if you're going to bring on partners or you're going to bring on individual investors, to the extent that you can make sure that they're aligned with you philosophically or with respect to your values or what it is you're trying to accomplish, that is critically important. But also, you know, we have, we have reported, of the restaurants that are profitable in Denver, the, those that are reporting a profit. It's averaging one 2% right now.
Speaker 2:It's not, you know, sustainable in any way, shape or form. You know that you're, you're waiting for an externality to close your restaurant and when you're operating on margins that are that slim, you're, you put yourself in a position to act and make decisions from a place of desperation and good people can often, you know, start to make different decisions with respect to labor model, sourcing. Who knows If you can put together a budget, you know, like a true to form, pro forma and actually a cashflow projection that allows you a healthy enough bottom line. It puts you in a position to accomplish what you set out to accomplish. And the advice that I would give is, like you know, plates of food and drinks and cocktails and these sorts of things are really fun. I have found that I need a bigger why I need a mission, I need a purpose, I need a vision and I need um need. On those days when it's really hard and there will absolutely be days where it's it will bring you to your knees you need to be able to look up at something bigger than yourself and allow that to be the sort of clean burning fuel that pushes you into the next day. Sustainability and hospitality has been that and it's kind of we're. We're now navigating what it means to sort of coalesce a culture around that idea, moving forward in service of that mission and vision.
Speaker 2:Um, but all of that being said, you know, when I look at, when I look at the way that we've put together the capital stack for Amelia, if I am unnecessarily adding debt for Amelia, if I am unnecessarily adding debt, if I'm looking at, you know, like eight and a half to 10% pretty average nowadays as far as interest back on loans.
Speaker 2:And when you look at that service principle and interest and you look at your pro forma, what impact is that having on your bottom line? To increase, to increase overhead, that much, it's a lot. And I look at a lot of people giving up a lot of equity in their business and, um, you know, there comes a point when you've just bought yourself a job and that's, that's going to be really difficult. It's going to be really difficult. And, uh, man, if it isn't managed in a way that you have a surplus of cash to absorb the blows and also take advantage of opportunities, man, man, is it a, is it a tough way to live? Um, it's also incredibly rewarding and enriching and fulfilling if you can put yourself in a position to be successful in pursuit of that goal.
Speaker 1:So, yeah, what's the biggest lesson you've learned from opening olivia to now going through the process of opening amelia, five years later?
Speaker 2:yeah, we, we are and you know this because you're helping with it we are doubling down on trying to systematize everything, all of the processes that put our, put us, in a position to be successful, particularly when we, as owners, are not physically present as often. And I probably would would rewind the clock and be a little bit more intentional with that right out of the gate, which is a really, really difficult thing to do when you're a new owner and you are everything from the person who unclogs the toilet at 1am to the person mopping the floor at 6am the next day and shaking cocktails and being the host.
Speaker 2:But, to the extent that it's possible, you got to carve out some time and be intentional and establishing the processes to systematize what it is that you do and you know, outside of that, the vast majority of it. I feel like a broken record right now, but it's, it's. It is so, so, so important to put yourself in a position to be able to negotiate the lease and deal structure from a, from a informed place, and a good broker and a good attorney are critical in that which we have. Uh, both fortunately, and then having a deeper understanding of the implications of the financial decision-making prior to opening the restaurant, so that you're not you're not hamstringing yourself out of the gate, and that comes back to, you know, tying commencement to CEO, having renovatement out of the gate.
Speaker 2:Um, we had negotiated a very generous TI package because we're not general contractors. If getting the place open is pinned to my ability to successfully execute a build-out, we're screwed. So those are probably the most important takeaways for me at this point. It'll be really interesting. I mean, we plan on opening more restaurants moving forward, and if you ask me that same question three or four years from now, I'll be really curious what the answer is.
Speaker 1:Yeah yeah, there's so much changing in the Denver landscape for sure. What are some of those scary lease terms you mentioned earlier?
Speaker 2:Well, I mean, you know you're almost always, especially early on, almost always going to be a personal guarantor and that's scary, yeah, that's scary. I think there are ways in which you can negotiate the specific you know in the event of forfeiture. There are things you can kind of preemptively place into that lease structure to make it a little bit less scary, and a good broker can kind of give some insight into that. I used to be overly fixated on just total monthly rents and fixated on occupancy costs, and that's obviously important, um, and that, generally speaking, for those people who aren't aware you're, you're going to get a little bit more money upfront to build a place out and lower rents, or vice versa. And so understanding who you are, where your skills and strengths lie, can help you dictate that decision-making process.
Speaker 2:Um, I am, we don't really use prime in our restaurant. From a financial dashboard dashboard standpoint, I tend to hyper fixate on gross margin, because those are the controllables I think most important to our success. Uh, which also bleeds into the way in which you you negotiate the lease. I always like to have tenant terms on the backend, so like 10 and two fives is what we entered into. Yeah, I mean, it was a 70, 72, 73 page lease which I read multiple times and I I would encourage anybody in a similar position put your spend the money to have an attorney review it.
Speaker 1:Yeah.
Speaker 2:And then probably re-review and make sure that you've got a really good broker on your side that can point things out. You're just unaware of you know, COVID would be a great example of that right. You know, the force majeure side of things was never really. There were a lot of people who got in a lot of trouble.
Speaker 2:You know when COVID hit and all of a sudden, they didn't have anything to monetize and there wasn't anything written into their lease that put them in a position to protect themselves and their business in the event of a pandemic. You know, those are things worth being aware of as well.
Speaker 1:Yeah, that's. That's really, really great advice. I know you know, speaking personally, I've been in a couple situations where I've been trying to understand the jargon. Look through paperwork right, whether it's partnership or stock options or whatever going I just have no idea what to do with this and it's very emotional too, right. And so hiring an attorney and paying them a couple thousand or whatever it is definitely takes the emotion out of it. Gives you that strategic partner and that expert that you really need, so awesome.
Speaker 2:Worth every penny.
Speaker 1:Yeah, absolutely, austin. Thank you so much. This has been incredibly valuable. I can't wait to start getting all the notes together on all these amazing resources. If, if, anyone's listening to this and wants to get ahold of you, are you okay with that? Sure, okay, nice one, throw out an email, or anybody can shoot me an email.
Speaker 2:I'm just austin at oliviadembercom. Perfect Social media stuff the Austin. Carson, you know, keeping that ego in check, yeah.
Speaker 1:So much ego that you've brought onto the conversation today. No, I appreciate your humility and your constant insight and thoughtfulness and just curiosity to continue to learn and grow. And it's there. You know, I haven't found a playbook for how to successfully open a restaurant from all you know the behind the scenes things that you've talked about today and and if there was one, I feel like it's going to be outdated every single six months or every year, depending on you know, based off what we're seeing right now, especially in the Denver market. So really appreciate you sharing all this knowledge that you've learned.
Speaker 2:Yeah, it was my pleasure. Thank you very much.
Speaker 1:You bet that's going to do it for us this week. Everybody, If you know anyone that could benefit from this episode, please share it with them and we'll talk to you next week.
