Here’s How Trump’s Son-in-Law Jared Kushner Made Guy Fieri’s Restaurant Close its Doors
Aside from politicians eating and chefs voting, the worlds of politics and cuisine are usually separate. Sure, celebrity chefs like Anthony Bourdain refuse to work with Donald Trump. We’re not here to talk about them. We’re here to talk about Guy Fieri’s restaurant and Trump’s son-in-law Jared Kushner.
Even though Fieri is in the conversation for the most hated chef, he’s also one of the richest celebrity chefs in the business. Still, Guy Fieri had to close his New York restaurant, and Donald Trump’s son-in-law Jared Kushner played a role. You’re about to find out how.
Fieri’s restaurant in question
- Guy’s American Kitchen & Bar was near Times Square.
Guy Fieri’s restaurant was in the heart of New York City. It was on 44th Street near 7th Avenue, close to the heart of Times Square. Despite warnings from fellow celebrity chef Emeril Lagasse, Guy’s American Kitchen & Bar opened in 2012 and failed hard five years later. A scathing New York Times review certainly didn’t help the restaurant get off to a good start.
Next: Maybe no one read the famous review?
The restaurant was plenty successful
- Despite the bad reviews, Guy Fieri’s restaurant made plenty of money.
Bad reviews and high prices notwithstanding, Guy’s American Kitchen & Bar was one of the most successful restaurants in the country. It served more than 400,000 meals and did $17 million in sales in 2016. As we’ll find out in a minute, most restaurants would kill for that kind of business.
Next: Here’s where Jared Kushner comes in.
Jared Kushner’s company owns the building
- Kushner Companies purchased the building in 2015.
Guy Fieri’s restaurant in Times Square was already up and running when Jared Kushner’s company took over the building. Kushner’s group paid $296 million for the property in 2015. By the time 2017 rolled around, Fieri’s rent was way too high. The $1.8 million annual rent set by Kushner’s company doesn’t work out for most restaurants.
Next: Why $17 million in sales can’t cover $1.8 million rent.
Blame the industry for why Guy Fieri’s restaurant failed
- Restaurant owners have a rent budget they have to stick to.
You might be thinking, $17 million is way more than $1.8 million, so why couldn’t Guy Fieri’s restaurant stay open? It all comes down to budgeting. The razor-thin profit margins for restaurants are partly to blame. The Washington Post writes that restaurant owners prefer rents that take up no more than 6-7% of revenue. The $1.8 million rent was closer to 11% of Fieri’s revenue. After paying for inventory, insurance, payroll, and other expenses, staying open wasn’t in the cards.
Next: Only six restaurants in the United States can afford that rent.
Guy Fieri’s restaurant needed to do way more business
- We’re talking close to double the business just to keep the doors open.
To get the $1.8 million rent to be at 6% of revenue, Guy’s American Kitchen & Bar needed far more business. We’re talking nearly double the revenue — $30 million. To put that in perspective, only six independent restaurants in the U.S. topped $30 million in business in 2016.
Next: The next tenant has it even worse.
The rent is even higher now
- Another celebrity chef seems willing to give it a shot.
The Washington Post article reports the rent is even higher, up to $2.5 million per year. Is Jared Kushner trying to keep his creditors at bay by raising the rent? He might be. According to Bloomberg, the property lost money for most of 2017, and the loan managers are noticing the troubles. Despite the higher rent, Eater New York reports celebrity chef Todd English is moving into the space.
Next: These troubles don’t trouble Kushner.
Jared Kushner will be just fine without a tenant
- $2.5 million per year is just a drop in the bucket.
Even if Jared Kushner loses his job in the Trump White House, he’ll land on his feet. The real estate company bearing his name owns an estimated 13 million square feet of office and retail space in New York, so $2.5 million in lost rest is almost nothing. Kushner is personally worth roughly $800 million, so shrugging off the problems of one bad property shouldn’t be an issue.
Next: Like Kushner, Guy Fieri will be fine.
Guy Fieri will survive
- Closing one restaurant isn’t going to sidetrack him.
Love him or hate him, Fieri is doing just fine even though his Manhattan restaurant closed. Selling his stake in one restaurant chain boosted his bank account. Plus, Guy Fieri’s restaurants span the globe. He has 17 other restaurants worldwide bearing his name and bringing in the money. Like Kushner, one bad business venture isn’t enough to sink the ship.
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