If there’s one lesson I’ve learned from spending a year shadowing and writing about the process of opening restaurants, it’s this:
Most new restaurants will open late and over-budget.
As Rose Previte of Michelin-starred Maydan affirms, “Something will go wrong.” Murphy’s Law thrives when it comes to restaurant openings and the kindest thing you can do for yourself in that situation is to plan for the worst. That is, unless you’re Andrés Clavero and Zachary Engel of Chicago’s runaway Middle Eastern hit, Galit. They aggressively settled for nothing less than the best-case scenario.
“Word on the street is that restaurants are really risky,” says Engel, Executive Chef and Partner of Galit. “That’s true…but that’s because a lot of people don’t know how to operate a business. We happen to be two people who do.” He gestures to himself and Clavero, General Manager and Partner.
Engel is a James Beard award-winning chef, known for his work at Shaya Restaurant in New Orleans and Zahav in Philadelphia. After collecting enough accolades to fill a Mardi Gras parade float, Engel decided it was time to set up shop in Chicago. He immediately decided to partner with Clavero, previously a manager and senior accountant for One Off Hospitality Group. An added asset is that both partners have a financial background.
Clavero worked for major corporations like Deloitte before following his passion for hospitality and Engel “got a consulting management degree more or less to keep my parents off my back in case this whole thing didn’t work out.”
As thoughts about his first restaurant became clearer, Engel knew he wanted a business partner.
“It’s a long-term undertaking and it doesn’t stop.”
“I needed to have [someone] to keep me in check and who complemented my skill set,” explains Engel. “There’s too much going on to take it all on your own.”
While Clavero and Engel both went to Tulane, they only met for the first time in Chicago during the 2015 James Beard Awards. The two kept in touch ever since. When Engel approached Clavero in the summer of 2017 with the proposition of going into business together, he received an unequivocal yes. Galit opened in Spring 2019.
“It was a no-brainer,” Clavero emphasizes.
Their commitment to the project was powerful given that both still worked full-time restaurant jobs. Additionally, Engel was navigating the new role of being a father while Clavero proposed to his fiancée (now wife) with the caveat that he was about to quit his job to open a restaurant. There was also the small matter of Engel still living in New Orleans until October 2018.
During this time, the two began seeking out a space and investors.
“We wanted to be in a neighborhood,” Clavero recalls. “We wanted to welcome people back and be close to our families.”
The two began focusing on the Lincoln Park neighborhood of Chicago, where they found an old building that used to house a Paisano’s.
“Being small and independent, we had to figure out how to value engineer the space and stick to a budget based on what people told us. That’s one of the reasons why we chose this space—we knew we could make it work for less.”
“If you’re failing to look at the bigger picture of what’s out there and trying to hold on to the old ways, you’re limiting your growth potential for the next five to ten years…We’re now built for heavy duty expansion with minimum need for human capital as we grow.”
The square footage costs in Chicago for restaurants are entering the realm of obscene but Engel and Clavero were determined to find something that was affordable without having to charge their customers an outrageous amount per head to keep the place running.
The total investment ended up being a little over the $1 million mark, low for a restaurant of Galit’s scale in Chicago. Despite their impressive list of credentials and acute financial projections, Engel and Clavero still found it challenging to find investors. Rather than chasing one large investor, they reached out to everyone they knew to raise capital.
Both Engel and Clavero were determined to get out of debt as quickly as possible. To do that, they had to defy Murphy’s Law to open on budget and on time. Galit was scheduled to open in February of 2019. Factoring in standard last minute restaurant delays, it still opened in April of 2019 and closely within budget.
“I’m a conservative accountant,” Clavero describes. “No one is ever going to be exactly on target but we were the closest we’ve ever seen.”
“We had an obligation to ourselves and our families to get this up, running, and profitable so that we can live our lives,” Engel chimes in. “It’s a long-term undertaking and it doesn’t stop.”
Together, the two partners leveraged their skills and organized by strength. Clavero credits their success to adopting strict and cohesive systems of processes from the beginning.
“We do a lot of things to make sure we stay profitable and that includes using software, which can be cheaper than labor. We’re operating on a 21st century model.”
At Galit, time is money and their rule of thumb is to leverage technology to limit the time and labor spent in doing a task. Each point of sale is integrated with their financial reporting software for accounting and payroll. Engel handles accounts payable and inventory while Clavero does all sales and payroll but the data is fully digitized, allowing for quick and seamless work.
“If you’re failing to look at the bigger picture of what’s out there and trying to hold on to the old ways, you’re limiting your growth potential for the next five to ten years,” Engel continues. “We’re now built for heavy duty expansion with minimum need for human capital as we grow.”
While some may argue that Engel and Clavero are eliminating employment opportunities, the reality is that they’re setting up a better work environment for their existing employees.
“We pay our staff a living wage in the kitchen. We contribute to health insurance personally as business owners and also with a supplemental employee benefits assistance on each bill,” Engel enumerates.
By keeping their direct operational expenses down, Galit is able to charge customers fair prices for their food.
“We charge what we need to charge,” Engel explains.
For instance, Galit’s hit dish Bubbe’s Brisket Hummus costs $16. Some customers might raise an eyebrow at $16 for hummus, but let’s break it down: Wagyu brisket is transported to Galit where it gets cured with spices; the curing and prep process means that 40% of the purchased meat will be discarded because of the fat content. The brisket is then put on hummus which is freshly made with the best chickpeas in the country and the best tahini in the world. This dish is prepared by trained cooks using expensive equipment, arriving at your table in a hearty helping that easily feeds two.
It’s not general practice for customers to take all of the above into account when dining, especially when many big chain restaurants are offering food at “value”.
“These are just major restaurant groups that get discounts on [sub-par] products. Their reward is that they charge a seemingly below-market price for their lower cost of goods.” Engel says. “We, as the next generation of restaurateurs, need to fight back on that to make people understand our quality is high and consistent.”
Thanks to their savvy business practices and smart real estate investment, Engel and Clavero have successfully positioned Galit as an approachable restaurant. So much so that their reservations are booked solid and walk-in seats are snatched up quickly.
Engel sums up their model successfully. “If you stick to your lane and show people that you know what you’re doing, people will stick around.”