Taking over an existing venue comes with some important benefits. However, to get it right, you need a strong brand vision and the drive to set and maintain new standards that exceed diners’ expectations. By Shane Conroy
Nothing comes easy in the hospitality business. While restaurant start-up costs vary widely depending on venue and location, research suggests that it costs an average of around $650,000 to establish a new restaurant. That puts the pressure on new restaurant owners to keep tables full from your grand opening onwards.
However, taking over an existing venue can help ease some of that burden. You’ll save on kitchen equipment costs and may be able to use the pre-standing customer base to keep revenue flowing while you plan your rebrand.
That was the case for Christopher Shannon, chef and owner of Jack & Knife in the Stanley Street dining precinct in vibrant inner-city Sydney.
After building a 30-year career in the hospitality industry he was keen to make his own long-held vision a reality. Shannon could see the value in taking over Darlinghurst institution Trovata before eventually revitalising the venue under his own brand and concept.
“We took over Trovata in early 2018 and ran the restaurant for six months before transforming it into Jack & Knife,” he says.
“The key benefit is that we were not starting from scratch. The business came with the kitchen equipment already in place so there wasn’t that giant outlay required at the beginning, and the existing trade meant that we had cashflow from day one.”
Nicole Papasavas from The Stalactites Group agrees. Her family runs Melbourne’s iconic Stalactites Restaurant that has been a Lonsdale Street mainstay since 1978. The Stalactites Group also opened quick-service Greek eatery Hella Good on Elizabeth Street in Melbourne in 2017. The company is set to open two more Hella Good stores—Melbourne Emporium and Fitzroy—this year in two venues that were previously home to now closed Jimmy Grants restaurants.
“The kitchen always represents a substantial cost when you’re starting a new restaurant from scratch, so finding a venue that already has a kitchen set up is a big advantage,” says Papasavas. “You also want to look for a high foot traffic area with lots of visibility, and ensure the venue has the appropriate amount of space to be able to work comfortably.”
Out with old, in with the new
For Shannon, keeping the doors open at Trovata for six months came with some important benefits. The existing revenue and cashflow made the initial transition a little easier, and trading under the Trovata name also gave him the opportunity to research his new market.
“We took over the restaurant during summer, so we didn’t want to have to shut down during the peak of the season,” he explains. “That initial period also gave us the opportunity to really understand the market and how the Jack & Knife concept would fit into the demographic.”
While the temptation may be to try to retain the entire existing customer base, Shannon found that some tough decisions were required: “The previous owners had done a great job with Trovata over the last 20 years, however we had to look at the changing demographics of the wider area. We couldn’t just rely on a core group of regulars that were resistant to change.”
Setting new standards
That meant taking the brave decision to potentially lose the majority of regulars in order to create a fresh new venue that would have much wider appeal in an area where dining expectations had changed vastly. “We couldn’t let the restaurant stay stuck in the 1970s and expect it to be successful in 2020 and beyond,” says Shannon. “You don’t want people walking in with the expectation they’re going to get what was previously there. ”
Papasavas adds that you need to do much more than put up an ‘under new management’ banner to show people that you’re doing things differently.
“In the case of Hella Good, it’s important to communicate that we’re not just taking over two Jimmy Grants stores. They are closed and no longer exist. We will be retaining the kitchen equipment and retraining some staff, but Hella Good is a completely different brand. ”
The proof is in the punch
Much of that communication is achieved through implementing a strong brand vision, explains Papasavas. “Our challenge is to make sure that our message and our branding is very clear, and that it’s not affected at all by the previous space.”
That includes everything from your signage and restaurant fit-out to your dining concept, menu and service standards. However, Papasavas and Shannon agree that once your new branding is in place, priority number one is getting your execution right.
“To initiate relationships and create a new customer base, we have to give people the opportunity to trust us as a brand,” says Papasavas. “The most effective way to do that is to provide consistent quality in both product and service.”
“Most of our marketing revolves around what our diners say,” Shannon concludes. “Jack & Knife is quite highly rated on Google and Tripadvisor, and people consistently talk about the same dishes and our high service standards. You can’t fake that. No matter what the brand, there’s really no substitute for quality.”