Bouncing back from failure

As any entrepreneur worth his salt knows, being successful doesn't mean you never fail.

A Failed Promise: A dream job gone...

...or just delayed?

In June, 2005, Jeremy Lycan was offered an enviable position: Joel Findlay, his former employer and mentor, asked him to be executive chef at his fine-dining restaurant, 302 West in Geneva, Illinois. This is where Lycan got his start right after culinary school and he couldn’t have been happier to return. So he left his teaching job at the California Culinary Academy and moved back to suburban Chicago to become head toque. At the time, owner Findlay was largely absent from the restaurant due to illness, but few knew how serious the illness was. Just one and a half months later, he tragically passed away. This was a devastating blow to Lycan and the entire staff of 302 West—a tragedy that grew even more overwhelming when Findlay’s wife decided to put the restaurant up for sale.

“It was too tough for her to run the business, but she was determined to sell to a person who would allow me to stay and carry on her husband’s legacy,” Lycan recalls. When a local businessman whom the staff trusted and respected turned out to be the buyer, everyone was elated. But on the day the keys were handed over, that elation quickly changed to despair. “In walked a guy with a very bad reputation. The original buyer had disappeared and the new owner immediately told us he planned to turn the restaurant into a casual Italian place,” says Lycan. Although he and the other 13 employees were invited to stay on, they all walked out. “We were under the guise that we could keep the restaurant going as Joel had intended, but it was obvious that wasn’t the intention,” he adds.

Lycan was now out of a job with no prospects in sight and a pregnant wife expecting the couple’s first child. But he wasn’t going to let go of his dream quite yet. By the time the staff reconvened the next day for a farewell dinner, he and the wine director, Jody Richardson, had hatched a plan. They decided to resurrect the restaurant themselves, and after a few bottles of wine and several emotional toasts around the table, they presented the idea to the other displaced employees. “Within 20 minutes after leaving the dinner, 95 percent of the staff phoned to tell us they wanted in,” Lycan reports. Once word got out to the community, it wasn’t long before a former steady customer came forward to help turn their idea into a reality. “He asked us, ‘Where do you want to go next?’ And we said, ‘We really want to stay here and be back in business.’ He became our sole investor—our angel.”

News travels fast in Geneva and a restaurant down the street from the old 302 West soon got wind of the plan and offered up their location to Lycan’s team. “They were ready to get out of the business,” Lycan says. “It was smaller than 302 but was a great facility with a larger kitchen.”

The turnaround was incredibly quick—Lycan and staff took over the space, did a major dining-room renovation and just over 30 days later, re-opened the restaurant as Niche. On opening day, he was still writing the menu as food was coming out of the kitchen. Lycan credits his teaching experience for the relatively smooth transition; it gave him the ability to delegate responsibility, encourage teamwork and set expectations his employees would want to exceed. “I broke the staff into teams to bring back samples of chairs, flatware and other essentials. Their involvement even extended to the artwork on the walls—it was created by one of our servers,” Lycan explains.

“It was the end of my world when 302 closed down, but looking back, it was the greatest thing that happened—it gave me the strength and impetus to succeed,” he adds. Several thoughts kept Lycan grounded as he jumped in to take this risk. Failure wasn’t an option; he now had a family to support—baby daughter Natalie was born right in the middle of this chaotic time. “Plus, our investor gave us the confidence we needed to move forward and I felt positive that everyone on the Niche team would do their job and more to make sure we made it,” he states. “And I knew that Joel was watching over my shoulder, counting on me to carry on his legacy.”

Two years later, Niche is thriving, thanks to a very supportive community, a close-knit, motivated staff and smart management by Lycan and Richardson. But fate wasn’t so kind to the former 302 West—reincarnated as Toscana. “The restaurant went out of business after six months and the space is still vacant,” says Lycan.

A Failed Expansion: Too big, too fast.

Flat Top Grill's unsuccessful attempt to grow beyond Chicago taught the chain some valuable lessons. 

Flat Top Grill learned the hard way that sometimes there really is no place like home. The small Chicago-based chain had its sights set on expansion and on catching the eye of a national-chain buyer who might do for it what McDonald’s did for Chipotle. On the advice of investment bankers and strategic advisors, founder Keene Addington set out to prove the company had legs outside its home market.

With five units going strong in Chicago, Addington chose Washington, D.C., as his first expansion market. The demographics were similar and, like Chicago, the city had a series of vibrant urban neighborhoods similar to those in which existing units were thriving. But the good vibes didn’t last. Five units were planned for D.C., but only two opened in the summer of 2000. And problems with those started early.

Construction costs at both spots went 60 percent over budget, to more than $1 million per unit. Addington says unfamiliarity with the market and lack of strong supplier and contractor networks there were key factors. “We also quickly learned that the Flat Top brand didn’t carry any weight in that market, like it does closer to home. The biggest challenge, however, was our inability to attract and keep good managers for those units. It was very taxing and expensive for our senior management team to oversee the restaurants from our home base in Chicago,” he says. “In the fall of 2005, we made the very painful decision to sell the two units and focus on growing closer to home.”

“It would be easy to say we got bad advice, but I don’t see it that way. There was some sound thinking behind the decision. The piece that wasn’t considered enough was one you don’t expect from an investment banker and that’s the operational and management piece. Call that my lack of experience. It might be different if we did it now, with our stronger corporate infrastructure, but our entire team agrees that as a small company it’s best for us to grow in a ripple effect from Chicago,” says Addington.

The silver lining for Flat Top—now numbering 12 units, with some about 4 hours from Chicago—is that since unloading the two D.C. units in January of 2007, the company had its best year ever—despite the past year being decidedly hostile for restaurant growth. “It was extremely painful to admit defeat and sell those restaurants, but a huge relief once we did,” Addington adds.

A Failed Menu Item:  Bad Tuna.

A chef tanks with a tartare, only to recover with rabbit. 

Brosia is a Mediterranean newcomer in Miami’s hip Design District—an area that is evolving into South Beach’s rival as a hot dining destination with cutting edge restaurants. Yet when chef Arthur Artiles tried to get too experimental with his tuna tartare, customers balked.

The dish—a combination of raw tuna with roasted peppers, shallots, thyme, cinnamon and cumin—was too dramatic a departure from the classic citrusy character of most tartares. “With its bold flavors and spice, I thought it would be a crowd pleaser, but some thought the roasted pepper was too overt and didn’t work with the hint of cinnamon,” says Artiles. “I tried tweaking it but never struck the right balance of flavors.” Although he fought to keep his tartare on the menu, “at the end of the day, it’s necessary to please my guests and staff—not just myself.”

So Artiles walked away “with my tail between my legs,” but not ignoring some of the lessons learned and incorporating them into other menu items he had up his sleeve. He simplified the tuna prep and transformed it into tuna carpaccio as a special on Brosia’s summer menu; it’s selling twice as well as the failed tartare experiment. And, after playing around with the cinnamon, he got the idea of combining it with star anise and cloves and using the trio as a starting point for a rabbit dish. “It adds an amazing complexity to a special I created—Rabbit Stiffado with Creamy Polenta, Feta Cheese, Currants, Pearl Onions & Toasted Walnuts,” Artiles says. “The creaminess of the polenta helps balance out the richness of the sauce. The onions and currants add sweetness, the feta cheese, saltiness, and the walnuts the crunch factor that rounds out the dish.” Although he formerly believed that rabbit didn’t have mass appeal, this one is selling like crazy. “It’s turned into one of our signatures,” Artiles notes.  

Failed Ad On:  The wrong crowd.

When a restaurant's stylish addition drew an undesired clientele, they went back to the drawing board. 

A short time after opening The Kitchen, a neighborhood bistro in Boulder, Colorado, the owners converted the second-floor space into Upstairs. Their intent was to create a rustic but sophisticated wine bar where patrons could sip a glass or two accompanied by appetizers and entrees prepared in the wood-fired oven. But instead of a refined salon, they ended up with more of a rowdy saloon, thanks to local college students who claimed Upstairs as their home away from home—not quite the ambiance the owners had in mind.

“The crowd started coming in later and later and was definitely more into drinking than eating,” remembers GM Ray Decker. Their beverages of choice? Red Bull and shots—a far cry from the list of carefully chosen wines. Upstairs was veering far off track and it was hurting the bottom line.

Six months later, management took action to tame the wild scene. “We decided to rearrange the room to give it more of a dining focus,” Decker explains. “We kept the original furniture but positioned the comfy sofas and chairs around tables.” Red Bull was tossed out from the bar and a selection of wine-friendly small and large plates was added to the menu. “The idea was to encourage sharing so each table would focus on the food,” he says. Prices went up a bit, too, to reflect the more eclectic menu and upgraded presentation. Plus, an impressive craft beer list was put in place to augment the wine program.

The result: “We established a new and separate identity for Upstairs that attracts the kind of clientele we were after in the first place,” Decker reports. The change has not only garnered a regular clientele and very positive feedback from customers, it has boosted the average check and made Upstairs more profitable. “Going into our third year, growth is substantial,” he adds.   

Failed Concept:  The good idea in a bad location.    

When his Portuguese tapas concept took a dive, Jose de Meirelles took his menu mainstream.  

It had long been the dream of Portuguese native Jose de Meirelles to run an authentic taverna in his adopted home of New York City. When a storefront became available on West 46th Street across from his popular kosher steakhouse, Le Marais, he jumped at the opportunity and signed the lease.

Tintol Tapas Bar opened in late 2005 to good buzz, attracting food lovers who came for the bona fide Iberian snacks like boquerones (fresh anchovies), octopus salad, morcela (blood sausage) and almondegas (lamb meat balls). For those catching a Broadway show nearby, tapas and wine seemed like the perfect pre-theater meal. Trouble was, most of the out-of-towners who frequented the bustling Times Square area had less adventurous palates than New York diners. One day, the manager even overheard a tourist commenting on the menu posted on Tintol’s window, telling her companion that octopus was “weird.” Who knows what she would have said if she’d read far enough down the list to see the tripe, goat and oxtail!

“The food was just too exotic for the average passerby from the Midwest,” laments Meirelles. “And unless they were going to the theater, not too many New Yorkers would say, ‘Let’s go to Times Square for dinner.’”

Although Tintol was having trouble filling seats and making money, it was Meirelles’ “baby” and he wasn’t ready to throw in the towel. But by the summer of 2007 “we finally realized that the menu was wrong for this location.” At the same time, his Le Marais customers were clamoring for a lower-priced, “drop-in” spot that served casual kosher food. “Based on Le Marais’ success, I saw what could potentially come of Tintol’s location,” says Meirelles. In November, he changed the name to Clubhouse Café and the menu to an all-American (albeit kosher) mix of salads, burgers, sandwiches and standbys like chili and fish & chips.

Business was brisk from the beginning, attracting both kosher and non-kosher young professionals for lunch and after hours, as well as families out for dinner, private parties and theatergoers. Specialty cocktails and a well-planned all-kosher wine list make for a lively after-work bar scene. Patrons can still order tapas-style selections to go with their drinks, but the items veer toward the mainstream—duck empañadas, hot dogs en croute, sliders and chicken wings are bar menu staples.

“I’m pleased that I made the decision to change the menu and open Clubhouse Café, but I’m not giving up on Tintol,” Meirelles states. In fact, he’s currently scouting locations downtown where a more eclectic crowd would no doubt welcome Portuguese tapas.

Failed Wine Special:  Small plates: yes.  Small wine pours: no.

Legends learned that even a success can have its failures.

Success is often the sum of different parts. An idea can be 75 percent successful, but the other 25 percent simply doesn’t work. The point is to learn from the mistake.

That was the case with a midweek International Style Tapas program launched at Legends restaurant in New Suffolk, New York, last winter. In an effort to boost traffic during the off-season, owner Diane Harkoff and chef Michael Reilly devised a pan-ethnic selection of small plates, priced appreciably lower than the restaurant’s appetizers, along with “tapas-sized” 3-oz. glasses of wine.

The food was a success, bringing in additional traffic and actually increasing check averages, but customers had no interest in the 3-oz. pours of wine-by-the-glass.“We ran the tapas menu until April, and all in all we were very pleased with the results,” remarks Harkoff, who is accustomed to the trial-and-error nature of keeping an independent restaurant in a competitive market profitable. “We thought we’d serve more wine if we offered the option of smaller portions, but they weren’t worth the effort.”

Harkoff surmises that customers weren’t as interested in ordering small tastings of wine to pair with their small plates as they were in ordering a single larger glass of wine and being done with it. “People like to keep it simple when they’re dining out,” she says. “Ordering several different wines requires too much thinking.”

And because the smaller tastings were from wine normally sold by the bottle only, the program created turnover problems.

And yet the tapas themselves helped make for a good winter. Priced at $4 to $12 for smaller portions of such off-menu specials as Skirt Steak Carne Asada, Thai Sausage & Shrimp and Warm Brie with fresh fruit and flatbread, the selection appealed to many folks who wouldn’t normally order an appetizer—for reasons of eithe price or appetite.

Net-net, Harkoff will probably repeat the tapas menu again this winter—unless she comes up with a different brainstorm—but leave the wine component well enough alone.  “Some things are better off streamlined.”   

If at first you don’t succeed…..

No matter how big your ego or how strong your confidence, coping with failure is hard. We talked to a few industry and professional experts to find out how to ease the pain and move on.  

“The first thing to recognize is that success isn’t permanent, and failure isn’t fatal,” says Jim Sullivan, CEO of foodservice consulting company based in Appleton, Wisconsin. “Forget your mistakes but remember what they taught you.” As a first step, Sullivan suggests you assess and de-construct the reasons for the failure. Was it resources? Timing? Poor planning?

Don’t scramble to fix things right away, recommends Dr. Gabriela Cora, a director of the American Psychiatric Foundation from Miami, Florida. Step back and think about the reasons for the failure and possible solutions, then write out short- and long-term plans. “Communicate those plans to your staff so everyone understands why a shift is occurring and how they can help,” she adds.

Review the lessons learned so you can recognize when things are starting to go awry again, says Les Standerfer, an executive with George S. May business consulting in Park Ridge, Illinois. Adds Sullivan, “Find the right things that happened despite the failure and next time build on those first.”

Take a look at the external issues that contributed to the failure and tackle those you can control, Cora points out. For example, you can’t control the economy; you can control the people you hire.

Don’t blame other people—failure is an event, never a person, Sullivan warns. The same goes for blaming yourself, says Standerfer. “If you get stuck in self-blame, you’ll be too upset to move on.”

Recognize that failure is going to happen—if it doesn’t, it probably means you are not setting high enough standards or not taking enough risks, Standerfer contends.

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