Paid partnership with Toast. This episode ends with a sponsored bonus segment on menu pricing, built on data from Toast's Menu Price Monitor and their free Menu Checker tool. Check your menu against the market → https://biz.toasttab.com/us1XN
Sarah McIntosh is the chef-owner of epicerie in Austin, open on Hancock Drive since 2012 and running 450 covers on a busy Saturday. She came out of Louisiana, cooked at Bouchon and Ad Hoc, and has spent 20 years in and out of the Austin industry. Last year she flew to Argentina to cook alongside Francis Mallmann. None of that is why this conversation matters. She is one of the only chefs in the country who has worked out how to own the dirt under the restaurant instead of renting it.
In 2008 she bought a house on the east side of Austin for around $219,000 at under four percent interest. Her payment was $600 a month, less than the apartment she had been renting. She still lives in it. It is paid off. During the pandemic it crossed a million dollars. That single piece of math is why she now structures deals where she owns the property and the business, and why when a developer offered her a percentage to recruit tenants for a project down the street from her restaurant, she turned it down and asked for ownership in the development instead.
- The ownership structure she learned from Sam Hellman-Mass: buy the property, borrow against it to build, and the investor's money is protected by an asset that outlives the restaurant
- What to actually look for in a lease, in her words: MEP, tenant improvement money, triple net, CAM, percentage rent, and why a landlord covering mechanical, electrical and plumbing is the signal that a deal is real
- How she writes a proforma on purpose at 60 to 70 percent of what she thinks she will do, in three versions, with someone hired to pick it apart
Andre Natera and Sarah McIntosh cover why most chefs put a million dollars into a building they will never own, the difference between leasing and buying when you have no backers, the brokerage math on a commercial deal and why she refuses to get a license, how a 20 year network produces deals that never hit the market, paying 100 percent of staff health insurance instead of raising wages and the staff revolt that followed, being quick to fire before a one person problem becomes a five person problem, and why her empathy has grown to the point that she now hands the firing decision to her team.
It ends with the only award she says she needs. Butts in the seats, 450 of them on a Saturday, and a restaurant that is making money
Sarah McIntosh on Instagram → https://www.instagram.com/sarahmcgrams/
epicerie on Instagram → https://www.instagram.com/epicerie_austin/
epicerie → https://epicerieaustin.com
Follow Chef's PSA on Instagram → https://www.instagram.com/chefspsa/
Bonus content sponsored by Toast.
