Want To Start a Restaurant? Currywurst Bros.'s Cautionary Tale

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Currywurst Bros. during its brief life


It's common to observe that restaurant rents are sky-high and going up all the time. But we rarely have a way to quantify this, to know just how inflated the restaurant-space rents are. Which is why it was illuminating to stumble on an ad for the space on Bleecker Street that until recently held the hapless Currywurst Bros.


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The eviction notice late last year: Even the DOH's "A" couldn't help it.


Currywurst Bros. is a German chain that, reacting to the modest mini-fad in NYC of Teutonic sausages in general, and currywursts in particular, decided to establish a beachhead on Bleecker Street.

Opening in May 2011 after a long build-out that took many months, the franchise occupied a spacious storefront on the south side of Bleecker just east of Sixth Avenue in an area always thronged with NYU students, tourists, and Villagers. It was done up with super-graphics, and boasted an inviting backyard.

Unfortunately, Fork in the Road found the sausages way too bland. Accustomed to strongly flavored Wisconsin bratwurst, we found the same sausage at Currywurst, though of greater length, was totally lacking in flavor. Moreover, the curry topping tasted just like ketchup with curry powder sprinkled on top. The gimmick was that you could choose from a range of curry powders with an escalating scale of hotness. The curry powder imparted a gritty taste to the sausage or bun-sausage package. That may go over well in Germany, but not here, and the place closed unceremoniously six months after it opened.

As it turned out, the place's cash outflow on rent alone must have been enormous. A new ad posted at a Village real estate office shows the stats for the space: 900-square-foot ground floor, 900-square-foot basement, 22-foot street frontage (large for the neighborhood), 700-foot back patio.

The rent: a whopping $16,000 per month. Even with a profit of $1 per sausage, you'd have to sell more than 500 sausages a day just to break even. And each sausage, pulled from the cooler, had to be grilled for a tedious 10 minutes before it could be served, which is way too long for the fast-food sensibilities of Bleecker Street.

And the $16,000 per month doesn't reflect things like utilities, upkeep, pass-throughs of real estate taxes, and standard escalations, which cause the rent to rise inexorably each year you're in the space.

Yup, everything in NYC is done for the advantage of real estate interests, including punitive rents that give few businesses a chance to survive and succeed. Can I blame the real estate industry? You bet I can. But there always seems to be some other sucker in line to rent a space that's way too expensive, and real estate owners make a lot more money on revolving-door tenancy.

Can't wait to see who goes for this doomed and way-too-expensive storefront next. And restaurateurs: Find a way to test-market your product before presenting it to the public. If Currywurst Bros. had had more flavorable sausages and faster prep time, it might have succeeded. Who wants to wait 10 minutes for what is basically an expensive hot dog?


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The ad for the now-empty space on Bleecker Street


Next: The Currywurst Bros. in happier times


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12 comments
Restaurant Loans
Restaurant Loans

Impressive share.. My friend also want to start a restaurant. By this blog i gathered huge information. Thanks for sharing it we are looking forward to it.

larkjane
larkjane

Helpful stuff certainly, I think before starting restaurant people should read this content carefully, they find few useful points which are so important. Thanks mate!

Dan Finger
Dan Finger

"which is way to long for the fast-food sensibilities of Bleecker Street."Ow my grammar!

JK
JK

Sorry, I blame the dumbass who thought he could clear $25k+ per month selling shitty hot dogs, and not the landlord who profited from this stupidity.

guest
guest

Landlords DO NOT have to pay tenant improvements. In fact, they benefit from any equipment left by a tenant.  Also, they will have generally the security deposit, and the first and last month and any time for rent free period is insufficient for any tenant that has to deal with the department of buildings.  Currywurst was not a good thought out concept to bring to NYC especially in a city where you can pick up a street dog for $1.50.

hostage707
hostage707

you cant buy a cup of coffee from starbucks for a buck ??? who are you kidding. 

Nik
Nik

just $1 profit per sausage? did they sell for $1.50? i dont know much about america (i run a successful gift shop in north east england, worked in chinese restaurants for years previously) but that seems far, far too small a profit margin. i can imagine they tasted bland though, the germans arent exactly flamboyant

Chris Mitchell
Chris Mitchell

how do you figure landlords make more money with revolving tenants? They most often have to pay tenant improvements each time a new tenant comes in, in all likelihood their previous tenant defaulted and they lose money, the place sits empty for months potentially, and when they do find a new tenant they have to pay a brokers fee. 

Rsietsema
Rsietsema

It's called a typo and will fix right now, thanks.

Rsietsema
Rsietsema

They actually imported the links from Germany, and I was accounting for the overhead including employees, of which there were two, but you're right, it was just an estimate and the profit margin might have been more. And the price of the product was more like $7, which was very steep, even for NYC.

Rsietsema
Rsietsema

Don't forget banks often advance future rents to landlords as "loan facilities," then landlords turn around and get security deposits and advance on future rents from tenants as a condition of moving in, profiting twice in the initial stages. Build-outs are often the tenants' responsibility, too, not to mention compliance with building department and DOH requirements. Of course, every situation is different and sometimes landlords cut deals that are not quite so advantageous, but the general advantage they have (and advances on profits from banks) explains why they are often content to wait seemingly forever to receive high rents, and tend not to lower rents when times are bad. Thus storefronts sit empty for months or even years. The loans landlords get from banks have no personal recourse, so the remedy when a landlord defaults on a bank loan is to simply forfeit the property, at which point the bank decides it doesn't want it, and renegotiates with the landlord.

Lostarchitect
Lostarchitect

According to their sign above, the sausages were locally made from local meats.

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