Friday, July 17, 2009

"The man who lets a leader prescribe his course is a wreck being towed to the scrap heap..."--Ayn Rand

"What are you doing right now?"

"Finishing up a schedule and getting ready to make up a liquor order. Why?"

"Forget about that...Come on over to the office as fast as you can, please."

"On my way."

I can't remember the last time I was in my employer's office, which is also to say that I can't remember the last time he was in his office either. The corporate offices for our small company house our controller, a receptionist who covers the phones for the office as well as for all of our places during down time and shift changes, and my employer himself--technically. For the last four years or so my boss has pretty much done business via Blackberry and "ask Last One Home". On my last visit to this facility to drop something off for our controller, the open door to his office revealed a pile of military memorabilia [he is an avid collector] that covered the desk and the two visitor's chairs as well as the blueprint table left over from the last store we built from scratch--it was obvious from the dust atop this priceless pile of crap that the room itself had not been occupied in quite some time.

As I grab my jacket and briefcase and head for my car, I wonder what's up.

"Thanks for coming so quickly. You know, Last One Home, when we first started working together all those years ago, I didn't give you nearly as much credit and recognition as you deserved. I hope that I have remedied that over the years, but I know I've gotten lazy as time has gone on and I also know that I don't always communicate as well as I should--so I just want to start by telling you that, truly, none of this would exist without you. Seriously."

"Am I getting fired?" [You have to imagine the situation for me, as I asked this question out of honest curiosity as well as with some eagerness--I don't mean to belittle the financial trouble that so many are facing right now--but for me getting fired would be, in a way, like being paroled from prison].

"No you're not getting fired...sorry to disappoint you. [apparently the eagerness in my voice came through more than I had expected]

I'm seriously thinking about closing, however. I wanted to tell you before any of the financial people I've had preliminaries with start to blab."

"The Steakhouse??" At this I was truly surprised. We have been by no means immune to the collapse of our nation into Socialism, and both our check average and general revenues have suffered. However, financially speaking we weren't anywhere near where closing should be any sort of a consideration. We were still profitable, as a matter of fact.

"All of the stores."

"What the fuck is going on? Are you sick?"

"I'm not sick. No one is sick. Did you ever read the short story the movie 'The Shawshank Redemption' was based on?"

"I don't think so, but I did see the movie a long time ago. What was the story called? And why?"

"I don't remember exactly, but it had 'Shawshank' in the title. Anyway, in the book the Tim Robbins character was talking to the black guy about how, when he knew he was probably going to be convicted, he started to protect his assets. The Tim Robbins guy made a comparison between two men who live on the beach, both with priceless art collections. A hurricane is on the way, and one guy thinks that God or Providence or whatever would never let all his beautiful art be destroyed, and so he is sure the storm will turn and he does nothing. You know, those storms are so fickle anyway, they almost never end up where anyone expects. Well, the second guy also hopes for the best, and knows alot can happen in between the storm forming and it hitting land, but he still doesn't want to take any chances--so the second guy takes down all of his art and crates it up and moves it inland away from the storm, to protect his investment."


"I believe you are aware of what is going to happen when the stimulus money that extended unemployment benefits and raised benefit amounts runs out next year, yes?"

"Yes. In return for the states getting the money, they had to guarantee that those longer terms and higher pay-outs would be maintained indefinitely--that means that when the "free" money is gone, our unemployment insurance rates and fees go up."

"They will go up substantially, even though we haven't laid a single person off."

"And that's why you are thinking of selling out?"

"Not selling, just closing."

"I have to tell you, boss--I'm at a total loss."

"Do you think this ridiculous health care bill is going to pass?"

"Unfortunately I do."

"So do I, and I have spent the last week with our lawyers and accountants and the controller looking at numbers--some of our well-connected friends back east have made sure we got the text of the bill as soon as it became available--you know they didn't have it when they voted on it--but it is out now.

Businesses like ours will have two choices--pay for the health care for our employees, or pay a penalty that amounts to 8% of total labor cost if we do not. Paying for the health care puts us out of business--straight up. Paying these cocksuckers the penalty almost puts us out of business--and those two conclusions are drawn using last years' numbers, which are a damn sight better than 2009."

"Why close them instead of sell them?"

"A few reasons. I can't imagine that anyone is looking to buy restaurants right now even without this health care bullshit, and I don't want to have them on the market forever just to get lowballed. Half of them are almost worthless without our name anyway, and I'm not going to sell the name. In closing them, I can eliminate most of the operating debt on the properties through the process and in the case of Steakhouse and [one other restaurant] avoid the two big improvement assessments that are about to hit at the same time. And finally, if I close them, the cocksuckers can't tax me like they could if I sell them. I don't think I'm going to be able to save them like the guy from he story, but I'm damn well going to decide what happens to them myself.

I'm fed up with it. I'm thinking about fronting some of our long-time guys in little places--bars mostly. Two or three or four guys working as partners--so there aren't technically any employees. Small footage places, pubs and cool little places like that Pegu Club and PDT we went to when we were in Manhattan last year--but smaller. Maybe some of our kitchen guys want to do the same kind of thing with a little bakery or sandwich shop or something. Nothing too big--no more big equipment, big rents, big anything--and no more employees. I'm thinking of fronting "hospitality LLP's".

I'm so tired of everybody's hands in my pockets constantly. Do you know there are three fucking music licensing companies now? I swear to God if I could play only music in the public domain I would do that too--or maybe just no music at all--just turn up the TV's. Licenses--do you know when I started with 'Harry's' thirty years ago I had two licenses on my wall--the occupational license and the liquor license. Two. How many are on the wall at Steakhouse right now?"

"Twelve or thirteen."

"And how many of them make any fucking sense at all?"


"Exactly. Listen, my friend--we've come a long way together. I've made you rich and you've made me richer--but we have both worked till we bled for every penny--you a good deal more over the last ten years or so than me, but I had plenty of hard, lean years in the 70's and 80's. You know, when 'Harry's' opened it took every last penny I had--I sold my car and got evicted from my apartment--I slept on the bar for three months till I could afford an efficiency finally. But my own place was my dream, and I'm so sad and so angry that we are where we are right now--but I can't see any other way if this shit gets passed--I refuse to get sucked down with everyone else. I always believed that my people worked with me instead of for me--everybody. But all this new stuff has made it so that I'm going to be working for them--and I can't abide that--I just can't."

"You know we're talking about over 400 people, unless you plan to back 200 bakeries and underground bars."

"I know it. I'm sick over it. But here's how I look at it. I have given thousands of people good jobs over the years--great working conditions, good salaries, hourly wages, and good shifts. I've given millions in bonuses, spent hundreds of thousands on parties [our holiday and anniversary parties are legendary and epic]. I've never been able to afford health coverage for the whole staff, just management, but I've paid for emergency room bills, root canals, appendectomies, broken ankles, and all sorts of surprise shit that could have really hurt my guys when they weren't prepared for it--I've fronted down payments, tuition, and bail--I've cosigned a hundred loans. I have paid people more than the going rate because we didn't have insurance, and hoped they would put the extra money toward their own program. I have been stand-up my whole life--my whole life.

But this. This is just like a union trying to push their way into my business. The only difference is that the employees don't have any more control over it than I do. If a union successfully pushed into our places I would close them the next day, I told you that a long time ago. I'm thinking about doing the same thing here for the same reasons--once some other group decides they can tell me what I'm going to do beyond what is right and decent in my own business, I'm up up and away."

My employer might be a little ahead of the curve here, but by no means do I think he is going to be alone in his conclusions. I believe the recent passed and pending legislation in congress will close more than half of all US small businesses.

In responding to a recent comment on another post, I mentioned that I might possibly exit restaurants in a year or so, and that when and if I did I would identify myself and answer any and all questions anyone might have. After the meeting I just came back from, I'm guessing I might be able to do that somewhat sooner than originally anticipated.


Blogger PurestGreen said...

Wow. This was a shocker. I wonder how the US will come out of this recession. The UK is being battered as well, and people just seem to be waiting for it to be over, unemployment creeping higher and higher.

I look forward to your updates.

12:42 AM  
Blogger Scargo Cafe said...

Come on Last One Home... don't be so gloom and doom! You're letting me down! What gives?

As a transplanted resident of Massachusetts, a quasi-Republican Mitt Romney Health care Victim, one of the many Americans who drank the Obama Kool-Aid, and a restarant employer who has faced the same Health Care Monster, I will argue that this is simply a pendulum swing that will likely correct itself in about 7 years. Tell your boss to push his emotions aside, do the math again, and face the challenges along with all the rest of American Business today. Try eliminating paying directly for emergency room bills, rehab, root canals, appendectomies, broken ankles, down payments, tuition, bail and loans and lets see how this whole national health care thing shakes out.

I'm tired of watching employees choose cablevision, cell phones, and vacations over their own healthcare. Maybe it's time they were required by law to pony up and accept the employer matched plan we offer... but they don't. They choose to pay the fine.

We'll all add a buck or two to every entree and it should work out as long as we don't create a beauracracy. Tell your boss not to get his panties in a bunch too soon.

If he decides to fold, maybe you can give things a go yourself. If you guys have made as much money as you say you have, it would be a shame to cut off your noses to spite...

I love your stuff!

3:03 PM  
Anonymous Anonymous said...

Wow, the Palin philosophy is alive and well.

BTW, I'm surprised that both of you are against intellectual property rights. Can I have the name of the Steakhouse when you're gone?

5:01 PM  
Blogger Peach said...

I'm so sad to read this... Peach x

7:59 PM  
Blogger Sam said...

Do you think that the employees would forego some legendary parties in return for healthcare and a job?

I do enjoy the blog, but the Boss sounds terribly selfish here.

9:10 AM  
Anonymous William said...

I can understand how frustrating this must be for both you and your employer, LOH. It must feel like you have both put in near-Herculean efforts only to have the goalposts moved just as you are about to reach the end zone.

But from a purely business standpoint, the endgame of this new tax policy seems clear: there will be mom-and-pop neighborhood places, and a select few high-end places where demand is not elastic.

Based on what we know from your posts, you seem very well positioned in this high end. While a 10% across the board price pop will likely have a minimal impact on your volume, it will kill middle tier places dead. This will result in a new pool of discretionary dining income - some of which will likely flow to you (instead of Applebees every week, it's Steakhouse every couple of months). I can't say personally that a world with fewer Red Lobsters troubles me much.

It is a classic case of the strong being well-positioned to take advantage of some creative destruction of the weak. To abandon this excellent market position at this time seems like curious business judgement.

11:04 AM  
Anonymous Serious Replies Only said...

Hope all is well...

7:30 PM  
Anonymous Anonymous said...

So what has happened since? With you and the restaurant and Health care?

6:11 AM  
Anonymous Anonymous said...

Are you going to come back? Hope everything's okay.

12:13 AM  

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