A Coffee Machine Costs How Much?

You must have coffee and hot chocolate in an ice arena. We opened the restaurant so quickly Pierre brought in a Keurig so we would have hot beverages. The Keurig was ok, but we needed something better long term.

There is one major coffee machine dealer in the Dallas area. Pierre, Robbie and I took a field trip day and headed over there to look at coffee machines. On the way, Robbie found one on craigslist for $4,500.00, if I remember correctly. It was barely used and sounded like it was in good shape. We looked at similar models at the dealer, which listed for $10,000-12,000. Talk about sticker shock. It’s coffee! Well actually, it’s coffee, espresso, latte, cappuccino, and hot chocolate. I guess Starbucks really has changed the world. I don’t drink coffee so I don’t get it.

It was very important to Pierre that we offer good coffee. I’m sure a lot of the parents wanted it, too. There are some people who are so stuck on Starbucks that they will never be your customer no matter what you do, but I’m sure there are also people who just want a good cup of coffee without having to get in the car to go get it. So we decided to buy the used machine. Robbie was sent to pick it up and try to get it for $3,500 + a bunch of Dallas Stars tickets. He took the coffee machine straight to the dealer for service. When they delivered it, they taught us how to use it and how to clean it every night. I have to admit it was a fabulous machine and we made the best hot chocolate in town. I can’t speak for the coffee but we did get a lot of compliments. We did not spend $1,000 on a milk refrigerator for our coffee machine. We bought a used Red Bull fridge and drilled a hole in the side for the milk tube.

It was also our goal to attract daytime customers with good coffee and a quiet place to work with free wifi. It was Pierre’s job to get the word out that we were open during the day for lunches, parties, business meetings, and people who just want to hang out and drink coffee while working on their laptops. After all, why pay rent on a big space when you only use it about 3 hours per day. The way to make money is to utilize your space to the fullest, not just expect the parents and skaters to eat there everyday. And honestly, only small children want pizza everyday.

Pre-Contract Discussions

I would like to tell you this story has a happy ending, but it doesn’t. At least not for me. Even now as I share my story, my heart aches and I have bad dreams from all the feelings that come to the surface as I type. I still truly believe if Pierre had engaged and done the things he said, we would have been successful and made some money. You’ll hear more about that in future chapters. Right now, it’s important for me to share a conversation with Todd, the general manager of the building.

Once Robbie and I had a copy of the contract and were deciding whether to sign, I was looking at the space one more time. Todd and I were walking across the lobby towards the snack bar. He encouraged me to follow the instructions in the contract about how to pay our rent. Todd explained that it was best to mail a check to Damon at the corporate office as the contract stated, rather than handing our check to Todd as some tenants had done. Todd went on to say that paying him was an inconvenience as he would have to carry the check over to the corporate offices himself and he preferred not to do that. It made sense. Why wouldn’t you follow the instructions in the contract?

Once again, I brought up adding exclusive food rights to our contract. Todd adamantly refused. I wasn’t happy, but Pierre had assured us he had talked to a lot of skaters and they would buy from us if we carried healthier food. So I felt we could win over the skaters to buy food from us. It’s my understanding the rinks enforced ‘no outside food or drink’ when they were in charge of the snack bars, but once they contracted out the food space they didn’t want to be bothered with policing the food situation. I don’t know if that’s true, but it sounds likely. Continuing with the cafe without exclusivity was probably the biggest mistake I made and you will hear more about it later as we continue with the story.

Todd also told me that he would add our cafe to his letters to the hockey teams when they were coming for a tournament. He said some teams might want to schedule a party or team lunch while they were here. Todd also said once we got our liquor license we should offer a deal to the adult teams to have pizza and beer in the locker rooms at the end of their games. These sounded like great ideas and good support from our landlord.

Pierre warned Robbie and me over and over that Todd was not to be trusted. I believed Pierre, but I wasn’t overly concerned because I didn’t think we would have to deal with Todd much as long as we paid our rent on time. Another huge mistake on my part. That will become quite clear as we continue on with the story. I lost so much in this endeavor – money, dignity, friends, confidence, time, health, etc. To this day, it takes everything I’ve got just to walk into that building. Thank goodness I no longer have any reason to go there.

To Fry or Not to Fry, That is the Question.

In most rinks, there are two distinct groups – Hockey Players and Figure Skaters. Hockey players tend to be carbo-loaders. They are usually male, play hard, and eat hardily. Figure skaters are always on a diet. They tend to be female, practice obsessively, and eat like birds. And of course, you have a lot of moms hanging around the rink and they are often on a diet, too. Previous food service at the rinks had been pizza, burgers, and a lot of fried foods. Mostly junk food. We wanted to change that.

I have been fat my whole life. I have probably lost the weight of several people in my lifetime and always gained the weight back. It’s a horrible struggle, so it was extremely important to me to offer healthy choices in our cafe. Pierre said he had talked to a lot of figure skaters and they all said they didn’t eat at the snack bars because the snack bars were never open and never had healthy food they could eat. I made the decision not to use the fryers or the grill at all. We would cook everything in the ovens, even the burgers and fries. Pierre and Robbie thought that was a great idea.

Since we opened in 2 short weeks, we only had pizza, wings (Hunt Brothers also does chicken wings), and a few other choices. After the big hockey tournament, we could add more menu items. And we did, but everything had to be cooked in the oven. I thought the oven french fries were great and we had a lot of people tell us how happy they were that we didn’t have fried foods. Parents didn’t have to say ‘no’ to their children when they wanted wings or fries because our food was virtually grease-free.

There is a big down side to this plan. The ovens can get very backed up when the restaurant is busy. We were only using 2 ovens and there were days we could have used 3 or 4 to keep up with business. We had asked the rink to pull out the fryers and grill to give us more room, but they refused. I’m still glad we chose to forego the fried foods. After all my struggles with weight, I want to help others make healthy choices.

Get It In Writing

Surprise, surprise, the rink called to see if we were still interested in opening a restaurant. The big food service company had moved out on January 1, 2015 as planned and now the snack bar was empty and closed. Pierre, Robbie and I talked and decided we were interested. Pierre suggested we use his CPA because the CPA would do our books and payroll for a reasonable monthly fee. All 3 of us met with the CPA and discussed the plan. We would each put in $12,500.00 to start the restaurant. We agreed upon a name. The CPA suggested he set us up as an LLC.

The rink gave us a 5 year contract. For some reason they had put in the contract that we had to open as a Great Outdoors franchise. I was surprised that was in the contract. We explained we would be a pizza and burger place like all previous food providers. The rink was hesitant at first but agreed. I don’t know why they cared. Pierre still wanted to remain invisible, so Robbie and I would sign the contract. The rink had one stipulation. We had to open in time for a February hockey tournament. If we signed the contract, we would have 2 weeks to open a restaurant.

I had researched retail space in 2008 so I believed Pierre when he told us the rent was a good deal. It looked like a great deal. For a monthly fee, all utilities were included and we could use all the equipment in the space. There were 2 pizza ovens, 2 fryers, a burger griddle, an ice machine, refrigerators, a walk-in refrigerator freezer, a full bar with 2 stations and 2 taps, about 20 tables with 4 chairs each and bar stools, a Dr Pepper soda fountain, lots of shelves and cabinets, a 3 compartment sink, hand washing stations, and plenty of work space. No build-out would be needed.

Then we committed the ultimate sin. We didn’t put it in writing. Everything was happening so fast, we didn’t draw a contract with our plan to put in $12,500.00 each and each person’s responsibilities. The CPA would set up our LLC with each of us as 1/3 partners and I’m sure he put something in his hard-bound notebook as we described our plan, but we never wrote down our plan and signed it. WE NEVER WROTE DOWN THE PLAN!

Sans Restaurant

The rink decided they didn’t want to rent the restaurant space to us. They didn’t say why. Rumor had it, Todd, the General Manager of the building, had a friend who wanted to rent the space. I heard his friend only offered a third the rent we were contracting. I have no idea if any of that is true. So I sent Todd and Damon (our contact at corporate) an email stating we were still interested if they changed their minds.

I had already paid for my certifications, so I decided to go ahead and take the tests. I got my TABC, Food Handler, and Food Manager certifications and sent the links to Robbie and Pierre in case they wanted to take the tests. It was the holiday season so we didn’t meet to discuss alternate plans. I was starting to think about going back to a computer job. Merry Christmas.

Sans Sandwiches

We met with Great Outdoors several times. Once, we met at the rink so they could see the restaurant space. In our last meeting, they asked if we would consider a franchise at a location other than the rink. We were only interested in having a restaurant at the rink. Great Outdoors felt very strongly that their restaurant would not do well at the rink and they already had a store a few miles away. Unlike some chains that will sell a franchise right across the street from the one they sold you, Great Outdoors is very protective of their brand and want to give you the best opportunity to be successful. One thing they did say – the rent for the space in the rink was a very good deal as retail space goes.

I was very appreciative of their candor. Great Outdoors has been in business a long time and I have a lot to learn from them. So I trust when they say it’s not a good location for their market. Robbie, on the other hand, was pissed. Later, he said he would never eat at Great Outdoors ever again. This was the first time Robbie showed me his resentful side. I had no idea how vindictive he could be, but I would find out later.

Robbie obviously didn’t understand that you want people to be honest with you in business and help you be successful, not sell you something just because you said you wanted to buy it. Great Outdoors saved us a lot of money. Pierre and I knew it was time to start looking at pizza and burgers. I was a little disappointed, but glad we dodged an expensive bullet.

My mistake here was continuing to partner with someone who clearly did not understand business. However, I wasn’t looking to him for business experience. He was young, so I was hoping more for hard work and support from him. He could learn more about business.

And Baby Makes 3

Pierre wanted to bring in a third partner. I was fine with that. Robbie joined us for several lunches and discussions with the rink and Great Outdoors. He was young and I thought that would be our ace in the hole. We needed someone with more energy and the ability to do the heavy work I couldn’t do.

Pierre, on the other hand, would do marketing and only work in the cafe in emergencies. We knew we would have to spend a lot of time reaching out to the neighborhood because no one thinks to go to an ice rink for a good bar and grill. We had to build some outside business along with the skater families who come to the rink regularly in order to have a thriving business.

Robbie had $12,500.00 to invest, so we decided we would all invest that amount. At this point, I was feeling pretty confident in our endeavor. Even if it didn’t work out, I could recover from losing $12,500.00. And I really thought we had some great ideas to make this restaurant a success.

Now, I’ve made several mistakes. Restaurants are known for a high failure rate and I dove in anyway. I didn’t have a strong restaurant background so I relied on Pierre and Robbie for that; and of course we would get some excellent training from Great Outdoors. I have a very high work ethic and I assumed career skaters had the same work ethic or they wouldn’t have gotten where they did. At this point, I’m totally screwed. I just didn’t know it yet.

Show and Tell

Pierre and I met at the McKinney rink on a Saturday – the busiest day of the week. Everything Pierre had said was true. The rink was busy and the snack bar was not open. When the employees finally came in, they started making pizzas and then went into the bar and played on their phones. They didn’t open the cages. I don’t know why they would be there and not open the restaurant. Our guess at the time was they had some parties in the party rooms that had ordered pizzas in advance and they didn’t care about serving the public. I don’t know if they opened later on, but why not make money while you’re already there and paying employees. It’s no surprise this was not a lucrative restaurant. It looked like there was good potential for making money, despite what the financial reports indicated.

Pierre and I met for lunch at Great Outdoors. It was a weekday afternoon because we didn’t want to take up a table during a busy time. I don’t remember if he had eaten there before, but I wanted him to see how good the food was. Not only is the food fresh and tasty, you can actually see the meat on your sandwich. I always laugh at other sandwich shops. It seems like you get a lettuce sandwich and they kind of wave the meat over the sandwich to try to add some meat flavor. With Great Outdoors you get good value for your money. Also, most of the sandwiches can be purchased as a salad. I love Great Outdoors.

Pierre and I met at the Bedford rink for a tour of the kitchen. It was a Wednesday because Pierre always coached there all afternoon on Wednesdays. One of the rink employees gave me a tour. He said originally the rinks handled all the food service and he had loved working in the kitchen. Then Corporate had decided to hand off food service to a food service company and just charge rent for the space. That’s when the big food service company took over and the restaurants were hardly ever open after that.

My mistake here was not researching the financials and maybe even talking to the employees or the company that had contracted the snack bar. I was told the company had wanted the food contracts at the big arenas, but the only way to get that contract was to agree to handle the food in all the skating rinks in the area. I was told this big food service company just wasn’t interested in building the business in the small rinks and I chose to believe it. After all, Pierre was a successful business man with a lot of money. Why wouldn’t I believe him?

An Idea is Born

In 2008, I looked into buying a franchise in The Great Outdoors Sub Shops. Great Outdoors has been one of my very favorite restaurants for many years. I was a burned out IT Developer and needed a change. The more I looked into it, the more it appealed to me. In November, I was 1 contract away from a big loan and getting started when the stock market took a dive. Everyone involved knew this would be a bad time to open a restaurant and the dream was gone. Back to the computers, I went.

Fast forward to 2014. My friend, Pierre, took me to dinner on my birthday. He started talking about wanting to open a business. He had several ideas including a restaurant and a limo service. Well, I jumped right on it. Here’s another opportunity for a sub shop. It felt right. Pierre started telling me about the cafes closing in the local ice arenas – not the big arenas, the local training facilities with 2 sheets of ice. The McKinney rink was the newest, nicest rink and it had a real cafe and bar area, not just a corner counter. He went on to tell me how busy this rink was and the previous food vendors didn’t do well because they didn’t offer decent food and were never open. Pierre suggested we would both invest $35,000.00 to start a restaurant.

It was worth looking into. I was excited. That was probably my first mistake. It’s hard to remain unbiased when you’re excited. This is a business, a risk, and you must look at it with both eyes wide open.

In the next few weeks, I will tell you my story. It’s all true. I feel so stupid and part of me wants to stay silent and hide my embarrassment, but I want to share my experience so no one else will make the same mistakes I made.