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Hospitality Speaker Series

Updated: May 31, 2018

The 3rd Hospitality Series: (left to right) Josh Siegel, Randy Garutti, Ashley Campbell, Derek Sherman, Keith Durst.

May 10th, 2018

Topic for discussion: The Intersection of Hospitality and Real Estate


  • Richard Frazer, Partner, Pryor Cashman (Panel Moderator)

  • Ashley Campbell, Chief Financial Officer, Union Square Hospitality Group

  • Randy Garutti, Chief Executive Officer, Shake Shack

  • Keith Durst, Founder, FOC (Friend of Chef)

  • Josh Siegel, Vice President of Business Operations & Legal, Momofuku

E.B Cohen hosted their 3rd Hospitality Speaker Series on May 10th at the Opry City Stage which allowed for the hospitality and real estate community to come together to network and learn from one another. Attendees were able to gain a new perspective on valuation, market conditions, changing consumer behaviors, deal considerations, and financial analysis as it pertains to the industry.

There was a wide variety of individuals represented by both the hospitality and development industry at the event with entities ranging from businesses that have been active for a few years to those that have been in business for multiple decades. With operators ranging from quick service restaurants to fine dining, attendees were able to share their personal experiences, goals and challenges with one another. Although most were private businesses with multiple locations across the country, several establishments were looking to eventually go public and open locations internationally. Others were start-up operators looking to gain some insight, knowledge and experience from those who have developed a strong business base. Attending the event allowed for individuals to benefit from new key concepts and ideas, increase their knowledge within their given industry and network at a deeper level by making new connections and relationships.

The first hour of the evening consisted of individuals catching up with old friends and acquaintances, as well as making new friends within the food and beverage industry, while enjoying delicious cocktails and finger food. The hour-long educational discussion began with a brief outline of each panelist’s background and experience.

The panel discussion included the following topics:

  • How to select a location and being willing to take a chance on an up and coming neighborhood

  • Protecting your intellectual property (IP)

  • Potentially agreeing to pay a higher rent so that your landlord can’t “own” part of your business or IP

  • Negotiating lease terms with landlords including creative rental negotiations and being cautious of a “great deal” that you may need to walk away from to protect yourself and your IP

  • Positives and negatives of business expansion

  • Rewarding your employees to get their buy-in and commitment to your organization and operations, which will probably involve sharing some of the profits

The panel was moderated by Richard Frazer, a partner at Pryor Cashman. Frazer began the panel by exploring the current real estate market crisis, which has harmed real estate and hotel developers, owners, as well as restaurants. Frazer detailed the discussion on how developers and owners must now lean on each other to increase values and opportunities for expansion, which has crafted the intersection and marriage of real estate owners, developers and hospitality organizations.

Ashely Campbell, Chief Financial Officer of Union Square Hospitality Group, led the conversation by pointing out that traditional landlord tenant relationships have transitioned into relationships that now consist of a partnership with the mutual sharing of economic terms. Campbell remarked, “Developers want content, and we can deliver content, and they can deliver real estate and can help deliver a captive audience.” This forms the need to work together and build up the marriage of hospitality and real estate.

Keith Durst, Founder of FOC (Friend of Chef), discussed how the developers see a different perspective entirely and how certain groups have the power to come in and add a significant amount of value to the developers’ buildings. Durst noted that as more retailers drop off and more food and beverage companies become prevalent, an additional value will be added to the buildings and a greater sense of community will be present. He stated, “You can really change a whole community by adding a strong F&B component to it.” When a strong F&B component enters an area, more consumers will move towards it, resulting in developers increasing profit every month from each unit in the building, whether it is from hotel rooms or office spaces, allowing for them to gain the added value that they desire. This change has encouraged developers to fund these projects, regardless of the original amount of profit.

Josh Siegel, Vice President of Business Operations & Legal at Momofuku, explained that not speaking fluently in the same business language will lead to complications between the food and beverage company and the developers. It is essential for each party to make a concerted effort to clearly communicate their needs and desires so that each understands how the other side is approaching the overall project and business development.

Randy Garutti, Chief Executive Officer of Shake Shack, shared with attendees that although the retail and market economies are constantly shifting, the greatest brands with the most experience will be able to fully adapt to the needs and wants of their consumers. Garutti detailed that in order for Shake Shack to consistently improve, the most innovative fast casual restaurant must be built and new ways to reach consumers must always be addressed, so that their needs can be met.

In regards to opening a variety of restaurant locations and expanding beyond the typical venue and city, Campbell stated “From a venue perspective, it is both a blessing and a curse that we are open to absolutely everything.” She went on to explain that if perspectives related to people, relationships, growth, and talent align properly, then the new venue can prove to be successful, whether it is located in an airport, stadium, or concession stand, and if it is fast casual or fine dining. Durst added on, developers should provide larger F&B groups with the platform to open at multiple locations to offer them the opportunity to spread costs around.

Campbell shared that in order for a business relationship and partnership to be effective, both sides must be willing to work creatively with the other side to understand one another’s vision and content ideas. By understanding the other side, the relationship and partnership will develop, resulting in positive economic results for all parties.

Durst added to the conversation that developers look for what will get them the added value that they want and expect and which brands will give them extra leverage, to entice other brands to come in and join them. He points out that some brands intentionally look to areas where other brands are already located because they believe that the research was already done correctly. To add on, Garutti explained that Shake Shack seeks specific co-tenants and they will walk away if that brand is not nearby. Shake Shack looks for exclusivity and for an area that is not dominated by other food and beverage companies.

When explaining the details of a joint venture, or a JV, Frazer stated, “A type of deal where the property owner and the real estate companies that are buying up the food and beverage companies are able to have them under control to have them available for their various hotel and real estate concepts.” Durst added on that big developers that have not experienced the joint venture area before and are beginning to go down that road, so that they will actually be involved in the food and beverage company ownership. Durst explained that if the restaurant or business is losing money, rather than making money, while establishing itself, it is acceptable because its value is currently being built upon and this is a new area, where patience is required for all to succeed. He stated, “It’s very much relationship based and you have to believe that these developers have some point of like mindedness.”

Campbell contributed how important it is to have an honest conversation with developers from the beginning. Waiting too long to have a discussion on what is important to each party, is likely to result in the priorities not aligning with one another and the project not gaining the needed success both are looking for. When beginning a new project, Garutti added, “We go through all the emotions of the site, how it’s going to work, and all these things, and then it comes down to, forgetting about all the data, it is what your gut is telling you.” He goes onto explain that if you walk away from a deal that you are unsure about and see a competitor pick it up the next day, if you are angry, then fight for that site and deal, but if you have no problem losing it, walk away. He adds, “If you can sleep well at night knowing that one [project] isn’t going to happen, let it go.”

Siegel remarked, “Each [project] has a different sort of risk and diversification.” He described that once you are able to find the right partner, you truly will be able to move past these obstacles. This marriage of expertise allows both partners to provide what the other is unable to provide on their own, however, this happens less often than most partners would like.

The panel discussion was followed with a question and answer session from those that attended. Topics included real estate selection, education and how to stand out from close competitors. Attendees were advised that they should not open a location in the city that they believe will be the most beneficial, but rather open a location on the piece of real estate that will land them with the most success. The real estate piece should have other drivers that will land consumers at a restaurant’s door such as subway stations or plazas. The panelists also advised that there should be an emphasis on leadership, education and development. The educational idea should be consistently exercised, allowing for the commitment and passion of employees to shine through. The panelists stressed on standing out by being better than competition, presenting a better experience and offering a better value. Creating a fun and authentic culture will craft a desire within consumers to invest their time and money into your establishment.

Garutti detailed that rewarding employees with bonuses can be one of the best things that a business and restaurant can do. Bonuses matter to employees and assist in motivating individuals to better their own work ethics, resulting in positive results for the whole organization. Garutti suggested comparing employees’ bottom-line revenue to the year before and, depending on the growth seen, reward them appropriately. He states, “The right kind of people are hungry to win.”

The Speaker Series was wrapped up with further networking by all who attended the event.


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