
Thanks to Wall Street, There May Be Too Many Restaurants - ilamont
https://www.nytimes.com/2017/10/31/business/too-many-restaurants-wall-street.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news
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bmmayer1
I honestly don't know why anyone takes the New York Times seriously anymore.
They so obviously have an editorial agenda that even in their ostensibly
'objective' reporting they can't hide it.

Yes, there will always be stories of businesspeople failing to grow
businesses, and losing their savings doing so. And the story of investors
over-extending into a market is as old as time. One would think that the flow
of cheap money from Wall Street to Main Street would be _celebrated._ But,
leave it to the NYT to never pass up an opportunity to vilify Wall Street.

Of course, if private investors on Wall Street invested in regional mom-and-
pop health-conscious juice bars and eateries and lost their shirts, the
headline in the New York Times would be "Wall Street gambles Americans' hard
earned retirement savings on uncertain business models."

~~~
humanrebar
> ...leave it to the NYT to never pass up an opportunity to vilify Wall
> Street...

...while endorsing big Wall Street allies like Charles Schumer.

[https://www.nytimes.com/2016/10/29/opinion/endorsements-
in-n...](https://www.nytimes.com/2016/10/29/opinion/endorsements-in-new-york-
and-new-jersey.html)

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freeone3000
Oh no! Investment in restaurants, which are profitable, will continue until
restaurants are no longer profitable to invest in!

~~~
dmreedy
It's easy to look at the raw numbers analysis and admire the invisible hand of
the market guiding the economy down the middle line through an endless trail
of pendulum swings. This abstraction ignores the raw human cost. These shifts
_ruin_ the people, the actual implementers of the economy.

~~~
racer-v
If it were true that people are "ruined" because they were involved in a
failed business, capitalism couldn't work. The rule is the same for any
system: don't risk more than you can afford to lose. Plenty of people recover
from a failed business and either start another or do something else with
their lives.

~~~
Sangermaine
>If it were true that people are "ruined" because they were involved in a
failed business, capitalism couldn't work.

You must be very young or very naive. People are ruined by failed businesses
all the time. The thing you're missing is that the people continuing the churn
of business creation are not the same ones who were ruined by it.

If you seriously think there is no human cost when businesses fail you're
simply delusional.

~~~
true_religion
I think you are reading the comment too literally. It's a generalism. If
(everyone) were ruined by a failed business, capitalism wouldn't work (the way
it currently does).

Theoretically, if you fail at business, you are allowed to try again and again
until you succeed. The consequence of repeated failure isn't so harsh that
it's a once in a life-time shot.

~~~
AstralStorm
Very theoretically. Typically a medium or small business owner is bankrupt
forever.

This is why people gamble with VC money.

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AJ007
Amazing how basically all of these restaurants are complete crap. NYC is the
only place I can travel and daily eat as healthy as if I am at home.

~~~
humanrebar
You can get salads, grilled meats, vegetable platters, etc. in any city. Just
to pick one off the top of my head, Corner Bakery Cafe has healthy options and
plenty of locations:

"The cafe has 192 locations nationwide, including in Miami, Los Angeles, San
Francisco, San Diego, Chicago, Houston, San Antonio, Dallas, Austin,
Philadelphia, Pittsburgh, Atlanta, Denver, Salt Lake City, Phoenix, Tucson, El
Paso, Baltimore, Washington, D.C., Tampa Bay and Buffalo metropolitan areas,
as well as in Northern California, Mississippi, New Jersey, Virginia,
Savannah, East Texas, the Rio Grande Valley areas, and a location in Carmel"

[https://en.wikipedia.org/wiki/Corner_Bakery_Cafe](https://en.wikipedia.org/wiki/Corner_Bakery_Cafe)

Likewise, Panera has lots of salads and half sandwiches available and 2,000
locations.

Maybe they're "crap" to you? But most people don't eat as well as that, on
average, quality-wise.

~~~
p0wn
The food quality is trash. You get salads that are palatable because they're
dowsed in dressing and stacked with croutons. By grilled meats I'm assuming
you mean the ocean water brined grilled chicken that somehow manages to be as
cardiac arrest worthy as a fried chicken sandwich while maintaining the
texture of a hockey puck? These places suck. It's because the people who make
the food don't care about making food and the owners only care about margins.

~~~
humanrebar
I'm not talking about Wendy's salads. I'm talking about casual-to-upscale
places that feature salad like Just Salad, La Madeleine, Pret A Manger, Sweet
Tomato (Souplantation), Chopt, Salad Works, Souper Salad, etc. And that's not
even getting into the fast-casual sandwich places like McAlister's Deli.

If all that's not fresh and healthy enough, it's not hard to pick up an
(unsauced) grilled chicken breast at a BBQ place and some fresh veggies at the
grocery store.

I mean, maybe you have especially refined taste, but _all_ those places aren't
unpalatable to the median person.

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tonyedgecombe
I don't understand why people take on a franchise, it appears to be the worst
of both worlds to me.

~~~
replicatorblog
When talking about high-quality franchises, it's a useful vehicle for people
whose talent is in recruiting/managing a low-skill workforce and promoting a
business within their community. Also, high-net worth people looking for
stable businesses. I get how it could seem terribly boring to a creative
person, but it seems to function a bit like an annuity.

This article is a good overview of who franchises appeal to (and why):
[https://www.bostonglobe.com/magazine/2014/09/17/the-
secret-w...](https://www.bostonglobe.com/magazine/2014/09/17/the-secret-world-
dunkin-donuts-franchise-kings/pb2UmxauJrZv08wcBig6CO/story.html)

This class of trade is impressive because you need to have several million
dollars of liquid wealth to get started. There's a whole other class of
franchises which are basically built to bilk the aspiring middle class and
charge $30-100K for nebulous advice and marked-up equipment but provide almost
no national brand appeal or product development. E.g. almost every frozen
yogurt franchise that has sprung up in the last 5-10 years.

~~~
gnarcoregrizz
i've anecdotally heard the frozen yogurt places were very popular for investor
visas. open up, get citizenship, close, sell equipment
[https://www.visafranchise.com/blog/eb-5-l-1-e-2-visas-
obtain...](https://www.visafranchise.com/blog/eb-5-l-1-e-2-visas-obtain-
investor-visa-franchising/)

~~~
replicatorblog
That makes SO much sense. There were a dozen places operating within 30mins of
my small NH town — seemed ludicrous from a business POV, but totally normal in
your formulation.

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cjlars
I don't think any of this is new. My dad owned a restaurant over thirty years
ago and has talked bad about them (as business investments) ever since.
Restaurants have a number of characteristics that indicate they should be poor
investments vs other types of small businesses. Here's a few, none of which
require wall street's involvement:

-They're cool. Who doesn't want to own one? I'd love to own a bar if I thought I could make money in the game. -They're visible. Everyone eats at restaurants, and in fact, a lot of people sit around in restaurants talking about what sort of business to start. -They have good perks. Free beer anyone? -They're familiar. I mean, things turn out pretty good when I BBQ, right? -They're (relatively) cheap to get into. If the minimum is $100k instead of $1M, you'll have more competition.

When it comes to small business, look for the opposite of all of those. The
more obscure, boring and downright unappealing the better.

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goialoq
Ha, this is the same story as the pre-Depression-era farmers who mortgaged
their farms. Our food providers are burying themselves in debt to create our
food, and banks are laughing all the way to themselves.

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cat199
But how else will we create new 'up and coming' neighborhoods to increase the
price of mortgages?

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jldugger
So.... we're in a food bubble?

