Chef's Table - The money man

Most of the restaurants we eat in are financed. Mark DiLuzio, executive vice president and North CEO of Main Street Bank, has put together financing for both chain and individually owned restaurants.

Creative Loafing: Did you ever work in restaurants yourself?

DiLuzio: All through undergraduate and graduate school I was a busboy and I waited tables. I have a very good understanding of operating and running restaurants.

What eating establishments have you handled at Main Street?

I've been involved with fast food franchises like McDonalds, Popeye's, Checkers and Taco Mac, as well as Outback Steakhouse, Hooters and Longhorn.

What makes a restaurant loan-worthy?

The failure rate of restaurants is very high, especially for new concepts. I look at the track record of the principal and their background. They have to be fairly well capitalized — have equity — or have partners invest with them.

How much is typically borrowed to open a restaurant?

Each concept is different, but it can range from $250,000 to $5-$6 million. Most people try to borrow everything, but they should limit their borrowing to 50 percent. Chef-driven concepts are sometimes difficult to finance. To negate the risk, collateral might be a house or investment property.

What's the typical loan term?

Most loans for furniture, equipment and build-out are paid in five to seven years. Those assets are like a car in that they diminish over time. You have to have enough cash flow to pay it back. Banks want to be secure.

How much of your decision is based on gut vs. hard numbers?

In a franchise, not much gut because I can gather data on earnings and operations from other sources and apply it to new locations, hoping they run in a similar fashion. With individual operators, it's really hard; it goes back to what they've accomplished. If someone has been in the car business and decides to open a restaurant, that doesn't carry much weight.

What's your track record?

I've only had one failure and I've easily financed over 100 individual operators, franchisers and franchisees.

Any client you are particularly pleased to be associated with?

I'm honored to work with Bob Amick (of One Midtown Kitchen and Two Urban Licks) because he has a history of opening restaurants successfully, is a visionary in his industry and is a very hands-on operator. In the restaurant business, people respect what you inspect. Absentee owners do not do well.

What's the bottom line?

If somebody wants to open a restaurant, they need a very good business plan and a very good understanding of the market and who's presently serving it. I always want to partner with someone who's No. 1 or No. 2.


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