Falling Stars

Published in Gourmet Live 09.14.11
Robert Sietsema looks at some of the most spectacular failures in the restaurant business

When the titans of chefdom fall, they fall hard. Fifteen years ago, Wolfgang Puck’s organization marched eastward from L.A. like an invading army, plotting the takeover of the country with his premium Spago brand of fine dining restaurants. But while he’s made it in Vail and Vegas, the Windy City proved too tough a nut to crack, and Spago Chicago shuttered after seven years, despite a talented chef and management provided by Puck’s own daughter. Was California cuisine too delicate and vegetable-driven for Chicago’s big appetites? Or was something less well defined wrong with the formula once it crossed the Great Divide?

Though we often hear about restaurants opening, we rarely take notice when they close. Maybe it’s because they make such a commotion at the outset but often die a slow and agonizing death in silence. Or maybe it’s because the reasons for closing are so poorly understood. Was the location cursed? Was the place undercapitalized? Did the service fall short, or was the menu just plain wrong for the neighborhood? Little research exists to answer these questions, but usually when restaurants fail, everyone wants to get as far away as possible.

An exception to this rule was the recent spectacular closing of Soul Daddy, a short-lived fast-food chain with branches in Minneapolis, L.A., and New York City. It had been chosen as the winner of a Bobby Flay reality show, America’s Next Great Restaurant, beating out 20 challengers with a menu featuring soul food made healthier. The chain was capitalized to the tune of about $3 million, from a set of backers that included the Chipotle chain and Flay himself, and opened the day after winner Jamawn Woods’ victory. Justifying the judges’ choice, Flay crowed: “A passion for food, a solid work ethic, good business sense, and delicious meals are what the investors were searching for on this series.”

But are these enough? Woods had never run a restaurant before (his experience was limited to serving chicken and waffles to neighborhood customers at his Detroit home). And though the TV show generated lots of early enthusiasm for the restaurants (New York Eater reported the “12:30 p.m. lunchtime crowd was 20-30 people deep”), the Big Apple and L.A. branches closed within two months. The show’s publicist lamented in a press release: “The realities of running a restaurant are very difficult, more so with multiple locations.… After a careful review of the business model and the performance of the restaurants, we have decided that our best opportunity for Soul Daddy’s success is to focus our efforts on establishing a solid footing in one location, building the brand.” That last location: Minneapolis’ Mall of America. It, too, abruptly closed two weeks later. Now Woods is suing Chipotle, claiming the company staffed his restaurants with inexperienced personnel.

So what went wrong? According to restaurant consultant Clark Wolf of Clark Wolf Associates, the problem—indeed the problem in most restaurant failures—is capital. Of the seed money, he scoffed, “That’s barely enough for one location, in a start-up. Do one and make it work.” He went on to disparage Woods’ lawsuit, noting that all fast food restaurants are staffed with inexperienced personnel: “That’s the model.” And there’s reason to believe the type of food and store locations were wrong, too—especially as far as New York’s South Street Seaport went. According to Brandon Barton, a restaurant consultant for Avero, a company that analyzes the financial performance of restaurants, “Soul food is a hard sell in all but a few Manhattan neighborhoods.”

Indeed, with its high real estate costs and stiff competition, Gotham can be considered the country’s foremost graveyard of promising restaurants, daunting some of the world’s most famous chefs. In 1998, when Montreal’s Normand Laprise debuted an establishment called Cena, it so thrilled New York Times critic Ruth Reichl that she wrote, “This is wonderful food,” and awarded it three stars. Cena crashed the next year. Somewhat ironically, Montreal-inspired fare has become commonplace in the city a decade later, at restaurants such as Fedora, Mile End, and M. Wells—though, after a little over a year, that obscurely located hipster diner went down in flames after a massive rent increase, just as Bon Appétit had named it one of America’s ten best restaurants. Still, maybe it’s time for Normand Laprise to make a triumphant return.

In 2003, Rocco DiSpirito stood at the height of his fame. He’d helmed the kitchen of New York's three-star Union Pacific, and made an Amex commercial in which he claimed that 90 percent of all restaurants close within the first year, implying that he had handily beaten the odds. (Reality check: According to professor H. G. Parsa, of the University of Central Florida, the figure is more like 60 percent in the first three years.) Soon after, with the backing of restaurateur Jeffrey Chodorow, who himself had suffered a string of well-publicized failures (including the recent closing of one of his most popular restaurants, NYC’s Asia de Cuba), DiSpirito opened an Italian-American restaurant that bore his own name. Rocco’s on 22nd Street, too, was the subject of a popular reality show. It was called The Restaurant, and costarred DeSpirito’s Italian mom, who ostentatiously made meatballs and flirted with customers.

Rocco's garnered “meh” reviews from critics, and the next year, a series of highly publicized disputes between DiSpirito and Chodorow served as a plot device for the second season of the show. While many viewers assumed the ongoing battle was trumped up for dramatic purposes, it turned out to be all too real; the restaurant closed soon after the second season wrapped. In the following years, DiSpirito’s star waned. Basically, it was the end of his career as an actual chef cooking in an actual restaurant. According to Wolf, “Rocco became a personality chef and not a restaurant guy—I think it really was his choice in some ways.”

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