restaurant-launch-coach

by charlie-morrison

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SKILL.md About

---
name: restaurant-launch-coach
description: End-to-end coach for first-time / serial restaurant operators launching independent restaurants, ghost kitchens, food halls, fast-casual concepts, food trucks, or coffee shops in the US (principles transfer internationally). Covers concept validation + market research, financial model (build-out cost, prime cost, food/beverage cost %, labor %, occupancy %), site selection + lease negotiation, permit / health / liquor licensing path, kitchen design + equipment, hiring (chef, GM, BOH, FOH), menu engineering + pricing, opening week + soft launch, marketing + first-90-days, vendor relationships, POS / tech stack (Toast / Square / Resy / 7shifts), profitability rescue when in trouble, and exit / sale options. Use when a founder asks "should I open a restaurant", "lease vs build out", "menu pricing", "food cost too high", "labor cost out of control", "low traffic", "review crisis", or "selling my restaurant". Triggers on phrases like "open restaurant", "ghost kitchen launch", "food truck", "lease negotiation restaurant", "liquor license", "TIA tenant improvement allowance", "prime cost", "food cost percentage", "labor cost percentage", "Yelp review crisis", "Toast vs Square", "menu engineering".
---

# restaurant-launch-coach

Coach an aspiring or active restaurant operator through the four phases that decide whether the restaurant survives 24 months: pressure-test the concept + financials before signing a lease (most failures are baked in by month 0 — wrong location, wrong rent, wrong menu, wrong cost structure), survive the build-out / permit / hiring grind without bleeding capital, open with enough cash buffer to weather the first 90 days, then run prime cost (food + labor) at <60% so the business actually generates profit. Most independent restaurants close in 3 years not because the food was bad but because: rent was too high (>10% of revenue), prime cost ran 65-70% (vs 55-58% target), build-out went 30-50% over budget, opening cash buffer was too thin, or the operator never installed weekly P&L discipline.

## When to engage

Trigger when the operator mentions:
- Concept stage: thinking about opening, evaluating concept, comparing concepts
- Site / location: finding a space, lease negotiation, build-out estimates, TI (tenant improvement) allowances, brokerage
- Permits / licensing: business license, food handler / ServSafe, health department, conditional use permit (CUP), alcohol (Type 41 / 47 / 21), live entertainment, zoning
- Build-out: kitchen design, equipment specification, contractors, GC bidding
- Concept types: fast-casual, full-service / FSR, fine dining, ghost kitchen, food hall stall, food truck, pop-up, coffee shop / cafe, bakery, bar / cocktail program
- Menu: menu engineering (stars / plowhorses / puzzles / dogs), pricing, recipe costing, allergen / dietary
- Tech stack: Toast / Square / Clover / Lightspeed POS, Resy / OpenTable / Tock reservations, 7shifts / HotSchedules / Sling labor, MarginEdge / Restaurant365 back-of-house, DoorDash / UberEats / Grubhub
- Operations: prime cost, food cost %, labor cost %, occupancy %, EBITDA, cash flow
- Hiring: chef / executive chef, GM, sous chef, line cooks, FOH (servers, hosts, bartenders), CDL training
- Marketing: opening, Yelp / Google reviews, Instagram / TikTok presence, neighborhood marketing, PR
- Financial trouble: prime cost too high, traffic dropping, review issues, vendor late payments, payroll struggles
- Exit / sale: selling restaurant, valuation, broker, financials prep

Do not engage for: fast food chain franchises (different playbook — `franchise-evaluation-coach` if it exists), MLM food / weight-loss schemes, illegal under-the-table operations, or "I want to be a chef" career questions (different lens).

## Diagnostic sweep — run before recommending anything

Ask 14-18 questions. Pull at least one from each block. Restaurants are operational businesses; vague advice is malpractice.

**Concept**
1. Concept in 1 sentence (cuisine + format + price point + audience)?
2. Why this concept now? (Personal expertise, market gap, partner's vision, "always wanted to.")
3. Closest 3 competitors within 1-mile radius. Avg check, dayparts, capacity, your differentiation?
4. Founder/operator background: years in restaurants? If new — total kitchen / front-of-house hours? Any chef training?

**Financials**
5. Total available capital + planned mix (founder cash, friends-and-family, SBA loan, restaurant investor LLC, bank line)?
6. Total budget by category: lease deposit + first 3 months rent, build-out, equipment, opening inventory, opening payroll buffer, marketing, working capital, contingency. (Most-skipped: contingency 15-25%.)
7. Target revenue Y1 + Y2 (specific monthly).
8. Projected prime cost % (food + labor / revenue): target 55-58% for FSR, 60-62% acceptable for fast-casual.
9. Projected occupancy % (rent + utilities / revenue): target <10% rent + <12% total occupancy.

**Site & lease**
10. Lease state: not-yet, evaluating, in negotiation, signed? Years + base rent + percentage rent + escalators + TI allowance + free rent / build-out months?
11. Site selection rationale: foot traffic, daypart match, parking, sign visibility, demographics, comp set?

**Operations & build**
12. Build-out start date / open-by date? GC bid received?
13. Permits status: business, health, alcohol, CUP, signage, fire? Timeline?
14. POS + tech stack chosen?
15. Hiring status: chef hired, GM hired, BOH/FOH plan?

**Risk**
16. Single point of failure: solo founder + chef + GM as same person? Capital comes from one source?
17. Liquor margin reality: liquor license cost in your jurisdiction, pour-cost target, BTG (by-the-glass) program plan?
18. Worst-case scenario: cash runway if you don't hit revenue projection in months 1-6?

If they can't answer 10-14, don't sign a lease yet. The diagnosis is the work.

## Phase 1 — Concept + financial pressure-test (the most-skipped phase)

Most restaurant failures are decided before opening day. Run the financial model before lease commit.

**The "concept fits financials" gate (4 conditions)**:
1. **Avg check × seats × daily turn × open days = realistic monthly revenue** that supports rent + COGS + labor + EBITDA.
2. **Prime cost target achievable**: food cost % matches concept (28-32% FSR, 30-35% fast-casual, 22-28% fine dining); labor cost % matches (25-30% FSR, 22-28% fast-casual, 30-38% fine dining).
3. **Occupancy cost <12% of projected revenue**: rent + CAM + utilities + insurance.
4. **Capital adequate**: enough to fund build-out + 6 months operating cash + 15-25% contingency.

**Reverse-engineer the model**:
```
Required monthly revenue = (Rent / 0.10) typical
e.g. $10K monthly rent → $100K monthly revenue → $1.2M annual revenue minimum

Then:
$1.2M revenue ÷ 365 days ÷ avg_check ÷ open_days_per_year = avg_covers_per_day
e.g., $1.2M ÷ 365 ÷ $35 (avg check) ÷ 0.95 (open) ≈ 100 covers/day = ~33 covers per daypart × 3 dayparts

Verify: do you have 50+ seats × 1.5-2 turns × 3 dayparts = 225-300 cover capacity? Yes = feasible. No = revenue model breaks.
```

**Example: failing concept (rent too high)**:
- Concept: 40-seat fine dining, $80 avg check.
- Rent: $14K/mo ($168K/yr).
- Required revenue at 10% rent: $1.68M/yr = $4,600/day.
- $4,600 ÷ $80 = 58 covers/day.
- 40 seats × 1.0-1.2 turn (fine dining max) = 40-48 covers = NOT ENOUGH.
- Verdict: concept doesn't fit space. Either smaller rent, lower-check concept, or add events / private dining for revenue uplift.

**Example: feasible concept**:
- Concept: 60-seat fast-casual Italian, $22 avg check.
- Rent: $9K/mo ($108K/yr).
- Required revenue at 10% rent: $1.08M/yr = $3,000/day.
- $3,000 ÷ $22 = 136 covers/day.
- 60 seats × 2.5 turns (fast-casual lunch + dinner) = 150 covers = WORKS.
- Verdict: feasible if marketing achieves traffic.

**Build-out cost reality (US 2026)**:
- Class B/C urban second-generation restaurant space: $200-400/sqft build-out.
- Class A new construction or first-generation: $400-800/sqft.
- Heavy equipment additions (pizza oven, brewery, smoker): +$50-200K depending.
- Common overruns: 20-50% over initial bid.

**Equipment cost reality**:
- Used 4-burner range with oven: $1,200-2,500.
- New commercial fryer: $1,500-4,000.
- Walk-in cooler / freezer: $8,000-25,000 depending on size.
- Vent hood + makeup air: $15-50K.
- POS: $1-5K hardware + $69-300/mo SaaS.
- Total equipment for 60-seat FSR: $80-180K typically.

**Capital adequacy formula**:
```
Total opening capital required =
  Lease deposit + first 3 mo rent +
  Build-out (with 20% contingency) +
  Equipment +
  Opening inventory (food + beverage + smallwares) +
  Pre-opening labor (hiring + training 30-60 days) +
  Marketing (opening campaign, signage, menus, website) +
  6 months operating cash buffer (covering any revenue shortfall) +
  Working capital
```

**Common capital ranges**:
- 1,500 sqft fast-casual second-gen space: $400-700K total opening capital.
- 3,000 sqft full-service first-gen: $800K-$1.5M.
- Coffee shop second-gen 1,000 sqft: $250-450K.
- Food truck (used + outfitted): $80-180K.
- Ghost kitchen single stall: $40-120K.

**The "are you adequately capitalized" test**:
- Total available capital ÷ 1.30 (for 30% contingency) = your real budget.
- If real budget < required opening capital → underfunded → don't sign.

**Concept anti-patterns (red flags)**:
- "Friends and family love my cooking" without market validation.
- Cuisine the operator has no experience cooking + no executive chef hired.
- Concept that requires both a chef AND a sommelier AND a GM but solo founder plans to do all.
- "We'll do everything: brunch + lunch + dinner + late-night + catering + private events" — no focus.
- Location chosen because "rent is cheap" without foot-traffic / daypart match.
- "I'll quit my $200K corporate job to follow my passion" + zero restaurant operational experience.

## Phase 2 — Site selection + lease negotiation

The lease decides 30-50% of restaurant economics. Negotiate hard.

**Site selection criteria**:
- **Daypart match**: lunch concept needs office foot traffic; dinner concept needs evening pedestrian / parking; brunch concept needs weekend density.
- **Foot traffic count**: count visually for 3 days at peak hours; cross-reference with city traffic data.
- **Visibility / signage rights**: corner > mid-block; visible from street > buried in plaza.
- **Parking**: 1 space per 2-3 seats minimum for full-service in non-urban.
- **Adjacent businesses**: complementary > competing; banks/laundromat OK; nail salon/dry cleaner mid; another similar restaurant = problematic OR helpful (Restaurant Row dynamic).
- **Build-out condition**: second-generation restaurant space (existing kitchen, vent hood, grease trap, restrooms) saves $150-400K vs first-generation.
- **Loading / delivery**: alley access for prep deliveries; not all spaces have it.
- **Employee parking / transit**: BOH staff need a way to get there.

**Lease terms to negotiate (every single one)**:
- **Base rent**: get 3 comparables before negotiating. Push 10-20% below ask.
- **Term length**: 5+5+5 (initial 5 years, two 5-year options) is healthy. Avoid 10-year initial (too rigid).
- **Free rent / rent-abatement period**: 60-180 days during build-out is normal; ask for it.
- **TI allowance**: $30-100/sqft from landlord toward build-out is normal in second-gen; first-gen sometimes $50-200/sqft.
- **Annual escalators**: 2-3% standard; cap at 3%. Avoid CPI uncapped.
- **Percentage rent**: in malls / food halls common (4-7% of revenue once base met). Negotiate floor / ceiling.
- **CAM (Common Area Maintenance)**: ask for cap on annual increases.
- **Personal guarantee**: try for "good guy" guarantee (limited liability for unpaid rent if you vacate cleanly) instead of full personal guarantee. Critical for limiting personal risk.
- **Use clause**: get broad enough to allow concept changes (your concept might evolve).
- **Exclusivity clause**: prevent landlord from renting adjacent space to a direct competitor.
- **Sublease / assignment rights**: critical for selling business later.
- **Maintenance**: clarify HVAC, roof, structural responsibility.

**Lease anti-patterns**:
- Signing before financial model verified.
- Accepting "as-is" build-out condition without inspection.
- Personal guarantee with no cap.
- 10-year term with 4% escalators (huge inflation in years 7-10).
- Percentage rent floor too high (you pay extra rent before you're profitable).
- No early-termination clause (kicker-clause if concept fails).

**Hire a tenant-rep broker**: free to you (paid by landlord); knows the market; negotiates better than founder on first-time basis.

## Phase 3 — Permits, licensing, build-out

The 6-month grind that drains capital. Plan for delays.

**Permit / license stack (US, varies by city/state)**:

| Permit | Timeline | Cost | Notes |
|---|---|---|---|
| Business license | 1-30 days | $50-1000 | First step; required for all others |
| EIN (federal tax ID) | 1 day | Free | IRS website |
| Sales tax permit | 1-2 weeks | Free | State |
| Health department approval | 4-12 weeks | $200-2000 | Pre-opening inspection; plan review |
| Building permit (for build-out) | 4-16 weeks | $500-10000 | Plan review; structural; mechanical; plumbing; electrical |
| CUP (Conditional Use Permit) | 8-24 weeks (city council) | $1-10K | Some jurisdictions; restaurant in retail zone |
| Liquor license | 8-52 weeks (varies wildly) | $5K-200K+ | Beer & wine ($1-10K) vs full liquor ($25-200K depending on city); secondary market in some states |
| Sign permit | 4-8 weeks | $200-2000 | Required for exterior signage |
| Fire department approval | 4-8 weeks | $100-1000 | Final pre-open inspection |
| Food handler / ServSafe certs | Days | $50-200/person | Required for food workers |
| Mfg / processing certs | Varies | Varies | If selling packaged retail items |

**Liquor license reality**:
- Pivotal for FSR profitability (liquor pour cost ~22%; food ~30%; net margin advantage).
- US states differ wildly: some unlimited (TX), some quota'd (CA, NY) creating secondary market ($150-500K+ for transferable license).
- Skip-or-not decision: compute beverage program revenue contribution; if liquor adds 25-40% revenue at higher margin, license is worth waiting / paying for.

**Build-out timeline (typical)**:
- Plans + permits: 4-12 weeks parallel.
- Demolition + framing: 2-4 weeks.
- MEP rough-in: 3-6 weeks.
- Walls + flooring: 2-4 weeks.
- Equipment install + finals: 2-4 weeks.
- Total: 12-24 weeks for full build-out from permit.

**Common build-out delays**:
- Permits stuck in plan review (4-8 weeks of inactivity).
- Long-lead equipment (vent hoods, walk-ins, espresso machines): 6-16 weeks.
- Health dept inspection scheduling backlog: +2-4 weeks.
- Final fire inspection failure → rework → re-inspection (+2-4 weeks).
- Landlord delays on HVAC, roofing, or structural items.

**Cash burn during build-out**:
- Rent (sometimes — depends on free-rent period).
- GC progress payments.
- Equipment deposits.
- Pre-opening payroll (chef, GM hired 30-60 days before open).
- Permit / licensing fees.
- Initial inventory + smallwares + uniforms.
- Marketing / branding / signage / menus.

**Burn-rate budgeting**: $15-50K/month during 4-6 month build-out is typical for FSR.

## Phase 4 — Hiring & opening team

Restaurant fails or wins on team. Most failures are people-driven, not concept-driven.

**Key hires (in order of leverage)**:

**Executive Chef / Chef-Owner-Partner** (if not founder):
- Owns menu, BOH operations, food cost, food quality.
- Compensation: $70-150K base + bonus on food cost / EBITDA, sometimes equity.
- Hire 60-90 days before open for menu development + recipe documentation.

**General Manager (GM)**:
- Owns service, FOH operations, scheduling, P&L responsibility.
- Compensation: $55-100K base + bonus on revenue / labor cost / guest scores.
- Hire 30-60 days before open.

**Sous Chef / Kitchen Manager**:
- Day-to-day BOH supervision, line execution, prep planning.
- $45-65K base.
- Hire 30 days before open.

**Bar Manager (if liquor program)**:
- Cocktail program, BTG selection, bar inventory.
- $45-70K base + sometimes tip share.
- Hire 30 days before open.

**Line cooks (BOH)**:
- 2-4 per dinner shift typical for 60-seat.
- $15-22/hr depending on market and skill.
- Hire 14-30 days before open.

**Servers / FOH**:
- 4-8 per dinner shift typical.
- $15-25/hr base + tips ($25-50/hr blended in US tipping markets).
- Hire 14-21 days before open.

**Hosts, Bussers, Dishwashers**:
- $14-18/hr.
- Hire 7-14 days before open.

**Hiring channels**:
- Culinary schools (line cooks).
- Industry network (chef referrals carry weight).
- Indeed / ZipRecruiter / Poached (restaurant-specific).
- Local restaurant Facebook / Reddit groups.
- Walk-ins (still effective in restaurants).

**Turnover reality**:
- 70-100% annual turnover typical industry-wide.
- 50-60% considered well-managed.
- Reduce via: predictable schedules, fair tip pools, advancement paths, decent benefits, culture.

## Phase 5 — Menu engineering + pricing

The menu is the highest-leverage marketing + ops document in the restaurant.

**Menu engineering basics**:
- **Stars** (high margin + high popularity): feature prominently; maintain quality.
- **Plowhorses** (low margin + high popularity): re-engineer recipe to lift margin OR reposition.
- **Puzzles** (high margin + low popularity): re-position on menu; train servers to recommend.
- **Dogs** (low margin + low popularity): cut.

**Recipe costing (per dish)**:
- Food cost = sum of ingredient cost × quantity.
- Pour cost (drinks) = liquor cost / pour size.
- Target food cost % = (food cost / menu price) × 100 — typically 28-35%.
- Target pour cost % = 18-22% liquor, 22-28% wine, 25-30% beer.

**Menu pricing methods**:
1. **Cost-plus** (most common): food cost × 3 = menu price. Simple but ignores demand.
2. **Demand-based**: price what customer will pay; verify food cost works.
3. **Competitive**: 5-15% off / on / premium vs nearest competitor of same caliber.

**Menu design principles**:
- 6-12 entrees max per category. More = decision paralysis + worse quality.
- Anchor item (most expensive) first or in eye-position; makes others feel reasonable.
- "Stars" highlighted with box, color, icon, or word ("Our Famous").
- Avoid $$ symbols; use plain numbers ($28 → 28).
- Descriptive but not flowery copy; emotion + sensory > technical.
- Menu refresh quarterly (seasonal); full overhaul yearly.

**Daypart strategy**:
- Lunch: faster service, lower check, simpler menu, $14-22 avg.
- Dinner: full menu, higher check, alcohol, $28-50 avg (FSR), $45-90 (fine dining).
- Brunch (weekends): different menu, higher labor, $18-32 avg.
- Late-night: bar program + smaller plates if location supports.

**Beverage program**:
- Liquor / wine / beer revenue contribution: 25-40% of total in healthy FSR.
- BTG (by-the-glass) wine: 4-6 reds, 4-6 whites, 1-2 bubbles for FSR.
- Cocktail menu: 8-12 signature cocktails for cocktail-forward concepts.
- Beer: 6-12 taps + 6-12 bottles; rotate seasonally.

## Phase 6 — Opening + first 90 days

**Soft opening (1-2 weeks before public open)**:
- Friends + family + industry crowd; 50-70% capacity max.
- Free or heavily discounted ($5 corkage for full price food, etc.).
- Goal: train staff, identify systems issues, fix before paying customers.
- Don't accept tips; staff is in training.

**Friends-and-family vs media open**:
- Friends-and-family: 5-7 days, 30-50 covers/night, no media.
- Media preview: 1-2 nights, invited critics + influencers; charge nothing.
- Public open: full transition.

**Opening day**:
- Soft public open (Tuesday or Wednesday) — controlled.
- Avoid Friday or Saturday opening (catastrophic if systems break).
- 60-80% of normal capacity Day 1; ramp.

**First 30 days**:
- Daily debriefs with team after service.
- Daily review of food cost, labor cost, revenue.
- Yelp / Google review responses within 24h.
- Iterate menu items that aren't working (tweak or 86 within first 30 days).

**First 90 days**:
- Weekly P&L review.
- Honeymoon traffic peak typically week 4-8; may dip week 10-16 (post-novelty); plan marketing for that dip.
- Build neighborhood relationships (other businesses, regulars, community).
- Settle into operating rhythm; document SOPs for repeatability.

**The first-90-days financial reality**:
- Most concepts run at LOSS for first 60-90 days.
- Cash buffer must absorb this OR you close before profitability.
- Track gross margin daily, prime cost weekly, full P&L monthly.

## Phase 7 — Operating profitably (the prime cost game)

**Prime cost target**: 55-58% (food + labor / revenue). Above 60% = unprofitable; below 55% = excellent.

**Food cost % control**:
- Recipe adherence (portion control, training).
- Inventory control (weekly count; identify shrinkage > 1%).
- Vendor pricing (rebid quarterly; bulk-buy strategic items).
- Waste tracking (daily walkthrough; train team).
- Menu engineering (push high-margin dishes; cut dogs).
- Theft prevention (camera, controls, audits).

**Labor cost % control**:
- Demand-based scheduling (use 7shifts / HotSchedules forecasting).
- Cross-training (FOH/BOH + multi-role flexibility).
- Hourly tracking (clock-in / clock-out via POS).
- Overtime discipline (4 hours OT/week per FT employee max).
- Productivity metrics (covers per labor hour: target 8-15 FSR, 12-20 fast-casual).

**Occupancy %**:
- Rent + utilities + insurance + property tax / revenue.
- Target <12%.
- High occupancy = either need more revenue (operations) or different lease (rare to renegotiate).

**Cash flow management**:
- Most restaurants are A/R-light + A/P-heavy: customers pay immediately, vendors give 7-15 days terms.
- Use vendor terms strategically (don't pre-pay).
- Monitor cash position weekly.
- Always 6+ weeks operating cash on hand.

**Tech stack**:
- **POS**: Toast (most popular, integrated everything), Square for Restaurants (simpler), Clover, Lightspeed, Aloha (legacy).
- **Reservations**: Resy, OpenTable, Tock (prepayment / experiences).
- **Labor**: 7shifts (forecasting + scheduling), HotSchedules, Sling.
- **Inventory / cost control**: MarginEdge, Restaurant365 (full ERP), Toast Inventory.
- **Delivery aggregator**: DoorDash, UberEats, Grubhub (commission 15-30%).
- **Direct online ordering**: Toast TakeOut, ChowNow (lower commission, your branding).

## Phase 8 — Marketing & reputation

Restaurants are local-discovery + reputation businesses.

**Pre-opening marketing**:
- Branded social handles (IG + TikTok + Google Business + Yelp claimed).
- Pre-launch buzz: 30-day countdown content, behind-the-scenes, chef intro.
- Email list capture (pre-opening website with waitlist).
- Local press outreach (food blogs, neighborhood publications).

**Opening week**:
- Soft opening invite-only.
- "Now open" announcement across all channels.
- Local paid micro-influencer (1-10K follower local food creator) — typically free meal for post.

**Ongoing marketing**:
- Instagram + TikTok regular posts (food photography, chef content, behind-scenes).
- Google Business profile updated (hours, photos, posts, replies to reviews).
- Email newsletter to list (special events, seasonal menu).
- Yelp / Google review responses (every review, positive and negative, within 48h).
- Loyalty program (Toast Loyalty, SpotOn, Punchh) for repeat business.
- Local partnerships (corporate catering, neighborhood organizations).
- Seasonal events (holiday dinners, beverage pairings, Wine Wednesdays).

**Review management**:
- Negative reviews: respond publicly with empathy + offer to make right offline. Never argue.
- Positive reviews: thank, mention specific staff, invite back.
- Yelp algorithm filters: many fewer reviews show than written. No way to game; respond to all that show.
- Fake / unfair reviews: flag through platform; sometimes removed.

**The 4.5-star Google rule**:
- 4.5+ stars: discoverable, healthy.
- 4.0-4.4: noticeable; investigate complaint patterns.
- <4.0: structural problem (food quality, service, value); fix root cause.

## Phase 9 — Profitability rescue (when in trouble)

**Symptoms of trouble**:
- Prime cost >60% for 3+ months.
- Revenue 25%+ below projection 4+ months in.
- Cash position dropping (months of cash <2).
- Vendor late payments accumulating.
- Staff turnover > industry average + difficulty hiring.
- Reviews trending down.

**Diagnosis (in order)**:
1. **Cash position**: how many weeks of operating cash? <8 weeks = crisis; <4 weeks = emergency.
2. **Prime cost breakdown**: food cost vs labor cost — which is the bigger problem?
3. **Revenue trend**: declining, flat, or just below projection? Day-of-week variance?
4. **Customer feedback**: Yelp / Google trend; specific complaints (slow service, food quality, value, atmosphere).

**Rescue actions (in order)**:
- **Cut bleeding**: identify menu items losing money; 86 them or re-cost.
- **Tighten labor**: reduce overlapping shifts, cross-train, eliminate over-hires.
- **Renegotiate vendor pricing**: if volume justifies, push 5-10%.
- **Renegotiate lease**: ask landlord for temporary rent reduction in exchange for extended term.
- **Marketing push**: small budget targeted to fill weakest dayparts.
- **Operational SOPs**: tighten recipes, train portion control, eliminate waste.

**When to consider closing**:
- 6+ months at unprofitable prime cost without fix path.
- 12+ months without breakeven and no specific lever to find it.
- Founder out of cash + no investor willing to put more in.
- Better to close while sale is possible than go bankrupt.

**Exit options**:
- **Sell to operator**: list with restaurant broker; valuation 1-2× SDE typical.
- **Asset sale**: equipment + lease assignment to next operator. Sometimes $10-50K from buyer who avoids build-out.
- **Bankruptcy / dissolution**: lawyer + accountant; protect personal liability.
- **Concept pivot**: same space + same lease, different concept (rare success without operator change).

## Phase 10 — Scale + exit

**Scale paths**:
- **Second location**: 18-36 months after first hits stability. Same concept; different neighborhood.
- **Different concept, same operator**: more flexibility; different team requirements.
- **Franchise**: operations doc + brand + system → fee + royalty income; demanding to set up.
- **Catering / private events arm**: high-margin extension of existing kitchen.

**Sale valuation**:
- Independent FSR: 1.5-3× SDE (Seller's Discretionary Earnings).
- Multi-unit operator: 3-5× EBITDA.
- Franchise concept: 5-8× EBITDA at maturity.

**Pre-sale prep (12-24 months)**:
- Clean books; 2 years of audited financials.
- Document SOPs (operations manual, recipes, vendor relationships).
- Strong management team (not founder-dependent).
- Lease assignment-friendly OR long term remaining.
- Healthy reviews + sustained traffic.

## Anti-patterns (don't do these)

1. **Sign a lease before validated financial model**.
2. **Underestimate build-out by 20-50%** — always.
3. **Open in wrong daypart match** for the location.
4. **Skip soft opening** — disasters guaranteed.
5. **Founder doing chef + GM + bookkeeping at once**.
6. **Negotiating only base rent**, ignoring TI, escalators, exclusivity, guarantees.
7. **Discount-heavy opening** — trains customers to wait for promos.
8. **Heavy delivery dependence** without margin model — DoorDash / UberEats can take 25-30%.
9. **Yelp / Google review neglect** — 1-3 stars in first month tanks discovery.
10. **No weekly P&L** — fly blind, find out at year-end you've been losing money.
11. **Hiring solely on price** — turnover + training cost + bad service > saving $2/hr.
12. **Liquor license afterthought** — opening without it cuts beverage revenue 50-75%.

## Diagnostic outputs (what you produce after a session)

For every coaching session, produce in this order:
1. **Concept verdict**: viable / pivot / kill, with financial model summary.
2. **Site / lease verdict**: feasibility + specific terms to negotiate.
3. **Capital adequacy**: gap between available + required funding.
4. **Operational risks**: top 3 risks specific to THIS concept + situation.
5. **Hiring + opening calendar** with milestones.
6. **Anti-pattern flags** (1-3 traps THIS operator is closest to falling into).
7. **30/60/90 day milestones** for pre-open or in-business operation.
8. **Single biggest action for the next 14 days**. ONE thing.

If operator pushes back on financial discipline ("the food will be so good they'll come"): re-run the diagnostic. Restaurant survival is a math problem first, food problem second. Coaching is pressure on the numbers, not affirmation of the dream.

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