Lenny Russo

Russo is currently the chef and proprietor of Heartland Restaurant & Farm Direct Market in St. Paul. Russo has more than 30 years experience in the food and beverage industry including executive chef, general manager, food and beverage director and corporate chef for several Twin Cities companies, among them being U.S. Restaurants, Aveda Corporation, W.A. Frost & Company, Faegre’s, the Loring Cafe and the New French Cafe. Read more about Lenny Russo.

Here we go again; this time it's the New York Times

Posted by: Lenny Russo Updated: April 5, 2012 - 6:30 PM

Chef and restaurateur Michael White and I have a few things in common.  Both of us are, once again this year, nominees for a James Beard Award.  We are both dedicated to excellence in our profession.  We are both partners in hospitality industry corporations.  That is pretty much where the commonality ends.  None of my business partners are former Merrill Lynch presidents, and a good week of revenues at our restaurant is eclipsed by an average day at Marea, Mr. White’s Altamarea Group flagship.

 So it was with great interest that I read Suzanne Craig’s piece on Mr. White and his partner Ahmass Fakahany entitled “Out of One Frying Pan, and Into Another” in last Sunday’s New York Times business section.  I found it to be an informative and enjoyable read.  I also found it to be inaccurate in at least one statement.

 In reference to Altamarea, Ms. Craig states in paragraph eight of her story, “What is so remarkable about their success is that, in the restaurant game, most new restaurants close within their first year – industry experts put the failure rate at anywhere from 60 to 80 percent.”  The writer does not identify who or what so called “industry experts” she cites, nor does she offer any clue as to where they acquired those statistics.

 The fact of the matter is that according to two studies widely accepted as the most accurate and informative portrayals of success and failure rates within our industry, one by H.G. Parsa of Ohio State University and the other by Cline Research Group of Dallas, the first year failure rate is closer to 26%.  It isn’t until year three to year five that the failure rate even begins to approach the 60% low end figure cited by Suzanne Craig in her article.  Not only that, but the figures cited in those studies include not only restaurant closures but also restaurants that have changed hands.  In other words, a very successful restaurant that might have been sold to another owner would have been included as a failure.

 What the statistics show is that, as a group, restaurants have a better than average success rate when compared to other small businesses.  To see an urban myth such as the one Ms. Craig recounts on the front page of such a venerable publication as New York Times Sunday Business, only serves to perpetuate falsehoods that keep banks from meeting with those of us in our industry.  These are the sorts of unsubstantiated statistics that are used as the basis for refusing financing and for depriving capital to restaurants.  Often time, when loans are approved, the interest rates can be extremely unfavorable only serving to make survival even more difficult.  Talk about self-fulfilling prophecies.

 Personally and as a member of an industry that endures more than its fair share of mudslinging, I expect more from the New York Times, from their writers and from their editors.

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