Bruce Haller, the well-known owner of Cafe 152 Burger Company and Cafe 152 Bread Company, does not like to talk about himself. But, when the topic of his business, the restaurant business in general, and the challenges of doing business in California are on the table, he’s eager to dig in.
“I should have got out of this business a long time ago; there’s no money in it,” Haller said. “It’s become more difficult to do business. The State of California says they open doors for entrepreneurs, but they don’t. We all want to follow the rules, but how many regulations do we need?”
Yes, the work is hard, the profit margins are razor thin and the hours that a restaurant owner works can be hazardous to one’s health. Recently Haller had triple bypass heart surgery, which motivated him to sell his Der Wienerschnitzel franchise last year. Cafe 152 Burger Company and Bread Company are going strong, however, and only getting stronger according to Haller.
“One of the great things about my work is that everyone likes to eat,” Haller said. “To do what you love, you overlook the roadblocks.”
Haller believes that restaurants in the Bay Area are hindered by a lack of disposable income, driven by high housing costs and the generally high cost of living in the area.
“In the Central Valley you’ll notice that restaurants are packed,” Haller said. “People there have disposable money to spend; they’re not house poor. When you struggle just to pay rent, there isn’t much money to spend going out.”
There’s a story behind everything Haller does at his restaurants, from the Angus beef, to the buns, to the decorations on the walls. He gets his buns from El Nopal Bakery in Hollister, and uses bread from Sumano’s Bakery, which announced plans to move from Watsonville to Gilroy. A quick survey of the decor in his restaurants include bits and pieces of the region’s agricultural roots.
“Stop in and taste the difference,” Haller said. “I don’t compete against fast food; I want to put a different product on the table. You don’t need to be a foodie to love what we do. Some people look at our prices and say it’s too expensive. If you go to McDonalds and Wendy’s, they’re not cheap either. But, my quality is better.”
Restaurant failure certainly is common, but the generally accepted assertion that 80 to 90 percent of restaurants fail in their first year appears to be overblown. In 2014 researchers Phillip P. Stark and Tian Lau, based on 20 years of data from 81,000 restaurants, only 17 percent of restaurants fail in their first years. Still, as cited by Haller, surviving in the restaurant business is a constant struggle and getting off the ground takes a lot of money.
“It’s a very capital-driven business, and you need a lot to get started,” Haller said. “The average restaurant takes up to $250,000 just to open the door, and it takes a few years just to break even. That’s why you see a lot of restaurants fail in the first couple of years. Chain restaurants can deal with that because they have deep pockets.”
For Haller, survival for restaurateurs depends on frugality.
“You need to be smart with how you build a restaurant,” Haller said. “It helps to buy used equipment, and if you look at our tables here, they’re not new. It’s tempting to want everything to be sparkling and new, but the profit margin in this industry is thin and most often in the single digits.”
For Haller, the decision to locate Cafe 152 Bread Company in downtown Gilroy was partly based on the physical location on the corner of 4th Street and Eigleberry, but also the belief that the downtown needed more variety in its restaurant offerings.
“We built that because we wanted to help build the downtown but also to bring good food downtown,” Haller said. “For both restaurants, we’re going to start offering wine and beer. That way we’ll be able to keep both open later. We needed to make a change downtown and places like Golden State Brew and Grill pull in young people to the downtown, but we need to get people over from the west side of town as well.”
When asked what advice he’d give to budding restaurateurs his answer was simple, “know your expenses.”
“Know your costs and get a good bookkeeper,” Haller said. “Lots of small businesses don’t know their costs, and they don’t know what their prices should be. Lots of new businesses don’t even put together a business plan. They get by on family money and credit cards.”
Cafe 152 Burger Company, at 8401 Church St, is open seven days a week, 10am to 8pm. Cafe 152 Bread Company, at 60 4th St, is open 7am to 3 pm Monday-Friday, 8am to 3 pm on Saturday and 9am to 3 pm on Sunday.
‘152’ restaurants serve up burgers, breads
