Why opening a restaurant takes forever

Why it matters: Profit margins in the restaurant industry are already razor thin, so delays in opening are a big deal.

“Everybody doesn’t have the capital to wait,” Charlotte restaurant owner Jay Davis says of the complicated opening process being a barrier to entry. “Some people are using their last dime; they’re using their last few pieces of resources to try to chase a dream.”

What’s happening: Davis planned to open his second Charlotte concept, Hideaway, in January, but permitting delays pushed back the opening months. The delays cost him about $100,000 in lost revenue, he estimates from missing major games and fights that would’ve brought in lots of customers.

What Davis experienced with Hideaway isn’t uncommon for restaurant owners. Getting to the finish line can take a while, and the line itself can be moved back based on a number of different delays from permitting to equipment shipments.

We, at Axios Charlotte, see it all the time. A restaurant might plan on opening in May, but construction delays push that back to July, then inspection delays push opening back to September, and then there’s a few more weeks to wait for the liquor license. And just like that a May opening turns into a November one.

“It’s starting to get to the point where just about everything that could cause a delay is causing a delay,” Kristen Wile of Unpretentious Palate tells me of business owners struggling to open new restaurants during a pandemic.

Wile has covered Charlotte’s restaurant industry for seven years, and she knows each opening brings different variables.

How it works: Restaurants opening in a space that previously had a restaurant permit is the shortest route, but owners still have to get the space re-permitted by and fix any outstanding issues. Newly constructed and remodeled restaurants are a bit more complicated. Owners have to find a space, hire contractors, order parts, etc. Here’s a general timeline of events:

• Plans have to be submitted to Code Enforcement to be approved before construction can begin.
• Once construction is nearly complete the health department has to be contacted to schedule a final inspection.
• Once any issues flagged during the final inspection are fixed, the restaurant permit is issued.

What’s happening: The process seems simple but there’s a lot of room for error, and at different points restaurant owners deal with the state, county and city. Plus, the pandemic created staffing issues in some government agencies that led to hold-ups. Add those staffing issues to government buildings being closed, forcing email and phone correspondence instead of in-person for an even more frustrating situation.

The pandemic didn’t create much change in the number of restaurant permits issued. A data request from the county shows 475 restaurant permits were issued in 2019 and 458 restaurant permits were issued in 2020.

Common issues among restaurant owners and industry experts we spoke to include:

• Construction delays, there are so many construction projects going on in Charlotte right now, so finding a good contractor who will work quickly isn’t easy.
• Staffing shortages, which some people argue are the result of restaurant employees making more money from unemployment during the pandemic than at their old jobs. Others say restaurant workers left the industry altogether after losing their jobs this time last year.
• Permitting delays from ABC to building have created big slow downs recently for a number of restauranteurs.
• Getting the right materials for newly constructed restaurants is also tough right now as shipping, especially internationally, is slow.

Paul Verica, the owner of The Stanley and Orto, says he dealt with many more setbacks opening Orto during the pandemic than with previous projects.

“It’s kind of the nature of the beast. … No matter how much you think you can control the process you really can’t,” Verica tells me. “You just have to hope you plan right and sometimes you have to hope you guess right.”