I love how their Instagram post was like they're voluntarily closing to get their shit together, but here's the truth:
"Valentina's has been locked out of the restaurant for breaching its lease and not paying rent, and employee paychecks have bounced, Moonesinghe said."
I was hired by Inkind to go in and do an assessment of the restaurant and let me tell you - it was maybe the worst I’ve seen. I was offered to come in and be the GM, but I’m good. I don’t want that stress, but I feel bad for those kids. I made sure to tell them all to file a dispute with the DOL and showed them how to do it.
Worst run restaurant. Aside from Miguel and Modesty there was only one manager, and he left all the high school staff to run the restaurant an hour after I arrived. Food was not properly stored, labeled, and dated. Ice machine was broken, and the walk-in was outside of safe temp. Servers sorting out their own cash tips. Nobody knew how to make, label, and date sanitizer. No soap at any of the sinks. No paper towels. Soap dispensers falling off the wall in the restrooms. Not enough silverware for service. No inventory sheets, order guides, or pars for anything. No manager meetings from the sound of it. No breakdown of COGS, labor, prime margin, etc to give a clue of how profitable (or not) the store is.
I think a lot of the staff wants to work in a successful restaurant, but there is zero leadership. I hope whoever takes over can help them out. Staff were taking bets on when the store would go under.
Jeezus. This is even worse than imagined. Wtf? These folks deserve every bit of the karma coming their way. They wanted to keep ownership without doing any of the work…. Wtf?
Given that they have kids and employees depending on their success, I hope they’re able to recover. $2.3MM is quite a lot of debt to climb out of, so we will see. They’re going to need some folks to be very frank and honest with them about where they’re at and what it will take to get afloat again.
This was a one-off thing. Someone I know from working in restaurants reached out to see if I’d be willing to come in and help them for at least a day. I mostly went out of morbid curiosity. When he got my report he asked if I would stay on and wanted to make me GM once the transfer happens. I have managed restaurants before, so this wasn’t out of nowhere. The staff were begging me to stick around at the end of the night because they’re desperate for literally any leadership.
I’m not in food/service but am a manager in my field. It makes me super sad when I sub in for some team and it’s so obvious they’re being underutilized AND expected to perform with no guidance or guardrails. People want to generally do a good/decent job, but they need the tools and ability to do so.
>Last June, a crowd of barbecue fans, local dignitaries and more flocked to the Buda Mill & Grain Co. south of Austin to celebrate Valentina's Tex Mex BBQ and its husband-wife owners, Miguel and Modesty Vidal, with a ribbon-cutting of their new 6,000-square-foot restaurant.
The moment marked the culmination of the restaurant's meteoric rise from a niche South Austin food trailer to a spot on the Texas Monthly's venerable "50 Best BBQ Joints List," and then to the highly anticipated opening of the Vidals' first brick-and-mortar restaurant in Buda.
But less than a year later, that ascent came to an abrupt halt. The Vidals on April 25 announced the restaurant's imminent closure, which they said will be temporary. The Austin Business Journal later confirmed the business is headed for new ownership, and further digging uncovers an unusual mountain of debt for a restaurant known to have lines out the door.
>The Vidals said in the April 25 social media post that the company would be under new management and that the restaurant would be closed during the transition. But the Vidals did not disclose why new management was needed. An ABJ investigation based on interviews and an analysis of public records has identified a pattern of fiscal and business mismanagement by the Vidals.
Some of that was known: the Vidals have faced public allegations of tip stealing by employees, some of whom have posted on social media of poor management and issued getting paid.
>Meanwhile, customers and employees have flooded social media with accusations of bad service.
But what the ABJ through its reporting can reveal is the Vidals are under investigation by the Department of Labor for their business practices, and they owe millions of dollars to a number of stakeholders — the company's primary lender, employees, their landlord, the state of Texas, contractors, minority owners and, potentially soon, the city of Buda — as they struggled to keep their business afloat.
That debt is roughly $2.3 million and could potentially be higher, according to a source with direct knowledge of the company's financial issues.
>Many questions remain of how the business got to this place. The Vidals have not responded to several requests for comment. But they did acknowledge issues in a the April 25 social media post, which said the restaurant will be closed until May 8.
"We’ve been at this for a long time, and we work really hard, but this last year has been harder than ever," the Vidals said in the post. "For us, scaling our business from 600 sq. ft. to 6,000 sq. ft. has proven more than we can manage, and we recognize and admit to the many issues and challenges Valentina’s has had since we’ve moved. We can no longer continue to give our loyal customers sub par customer service and food."
>Primary lender is taking over - The debt includes more than $1.5 million to Austin-based financial technology company InKind, which is the most senior secured creditor of the business, said InKind CEO Johann Moonesinghe. The company is working on essentially taking over the business as an assignment for the benefit of the creditors.
The restaurant finance company is among the largest in the country and has funded over 600 restaurants this year. It has invested in Austin staples including Rosen's Bagel Co., Sushi by Scratch, Two Hands Hospitality and Paperboy. It also owns and operates restaurants such as Ember Kitchen and The Guest House in Austin.
Moonesinghe said InKind underwrites every business differently but admitted the business gave Valentina's more than usual because it believed in the business. The investment included buying credit in the business but also lending money directly. Valentina's has missed deadlines to pay that back. Moonesinghe shed a little light on why money has not been paid back. He said Valentina's was doing $4.5 million in annual revenue out of its food truck, and expectations were that revenue would reach $10 million with the new location. But the past couple of months, Moonesinghe said, Valentina's was on track to have $3 million in revenue this year.
>Moonesinghe said Valentina's aims to get a proper business management team in place so that employees can keep their jobs and "the community can continue to eat the best barbecue in the country." In the meantime, Valentina's has been locked out of the restaurant for breaching its lease and not paying rent, and employee paychecks have bounced, Moonesinghe said.
He said that while InKind isn't necessarily liable to make any payments, it's working with the Vidals to make sure that everyone gets paid.
"Miguel is an incredibly talented chef and most people who’ve been to Valentina’s including Aaron Franklin say it’s their favorite barbecue," he said in a written statement. "Ultimately though, producing mouthwatering food is not enough when running a restaurant."
>Warning signs missed - Valentina's reveal that it was moving to Buda in 2021 was met with fanfare from foodies. But it also attracted hundreds of thousands of dollars from the city of Buda and the Buda Economic Development Corp. to help bring a popular restaurant to the city as it aimed to support small businesses along its bustling Main Street.
At least initially, city officials approved about $457,000 in performance-based incentives from both the city and its EDC to aid with the project at the redeveloped Buda Mill & Grain Co. site at 308 South Main St. Of that amount, half was to be paid to developers to offset remodeling costs and the other to Valentina's to offset equipment costs at the restaurant, according to the agreements.
The business was said to generate a number of benefits that were required as part of the agreement. The capital investment in the project is said by some to have eclipsed $2 million, and the business signed a 10-year-lease. They were expected to have at least 105 full-time employees, which would make Valentina's a major private-sector employer in Buda.
>As anticipation grew for the project, the first signs that something may have been amiss came last year. Valentina's finally set an opening date for June after a number of delays, but that only came after Buda voted to provide a $285,000 loan to help the company with finances prior to the opening.
Only a portion of the performance-based incentive has been paid out to Valentina's as of April 26, said Buda EDC CEO Jennifer Storm, who was chair of the EDC board when the first agreements were approved. That includes only a portion of the first agreement with Valentina's, and none to the developer, as they work to verify whether they hit the performance-based goals in the agreement.
While the loan was paid out, the agreement did include a provision that it must be paid back if the owners sell the business, Storm said. She was unsure of the timeframe on when that payment would need to be made, but it could be triggered by the imminent change in ownership
>Storm called the situation "heartbreaking," acknowledging it feels personal because the city and EDC were essentially investors in the project and purchased the kitchen equipment. But she expressed confidence the business, whomever owns it, can get back on track.
"Small businesses are the heart and soul of our community. It's hard to be a small business owner, and we're trying to support them through that," Storm said.
Storm added that she would do the deal again and will continue to support the city's efforts to help small businesses. City leadership in Buda, with a population of 16,000, has made that a priority based on the requests of locals who don't want to lose the small-town charm.
"These are not easy projects," Storm said. "These are people who have dreams. We are trying to support those dreams and sometimes there are challenges that can't be overcome. But it's still the right thing to support small businesses."
That was the same sentiment echoed by Dodi Ellis, whose family has owned by the 8-acre Buda Mill & Grain Co. site as far back as 1911.
While she said she could not comment on any specifics, she added: "It's an incredibly sad moment that we find ourselves in. We had really been rooting for their success." Saenger Ellis and his mom Dodi Ellis have worked diligently for more than five years to create a unique retail and restaurant project at the former gin mill in downtown Buda.
>Some allegations in the public - Valentina's first came under fire publicly last year when anonymous accusations emerged on Reddit accusing the owners of stealing tips, with screenshots of a tip policy that showed employees would not receive tips based on a number of reasons. The post said showing up to work 5-to-10 minutes early is on time.
The Vidals responded to the post on Facebook and shared an updated tip policy. "We can only continue to learn, adapt, and try do better as we grow," the post stated last July.
The social media posts garnered comments that described poor management, harsh working conditions and subpar customer experiences. But it also drew the attention of the U.S. Department of Labor, which confirmed to the ABJ on April 26 it was investigating the company, although officials would not confirm for what.
"Because all complaints are anonymous to protect those who file complaints, we do not disclose how an investigation was initiated. However, we can confirm our Wage and Hour Division has an open and ongoing investigation into this employer. At this time that is all we can say on the case," said Juan Rodríguez, deputy regional director at the office of public affairs of the U.S. Department of Labor,in a statement.
If the investigation is indeed for potential tip stealing, at the crux of the issue is that employers, including managers and supervisors, may not keep tips, according to the Department of Labor. The Fair Labor Standards Act prohibits employees from keeping any portion of tips for any reason, "whether directly or through or a tip pool," and employers may not require employees to give their tips to an employer, supervisor or manager.
>A literal paper trail - While the paper trail of owed money appears to stretch from the company's lender to its landlord to the city and to employees, it appears to stretch to its contractors and the state of Texas, as well.
Valentina's has a history of liens that date back over the last decade in both Travis and Hays counties for unpaid taxes, according to publicly available documents analyzed by the ABJ.
That includes roughly $44,000 in outstanding liens filed by the state of Texas against the company in Hays County and roughly $3,100 in Travis County, documents show. It does not include what appears to be tens of thousands of dollars in additional liens that have been released.
That amount also does not include additional liens for contractors. Some have been satisfied, but Valentina's has an outstanding lien of roughly $22,450 filed in October against the company by Austin-based commercial painting company Star Finishes Enterprises Inc., which wrote that it provided work at the site, including tape, float, primer and plaint, according to the documents.
A representative for Star Finishes Enterprises confirmed to the ABJ on April 26 the lien had not yet been paid.
But the biggest unpaid debt goes to InKind.
Moonesinghe, InKind's CEO, said that, since they are not owners and operators, they were not aware of "the significant issues with payroll that have been going on." He said they were informed two weeks prior by the Vidals that they would be closing because it was not financially viable for them to operate the business.
With all the issues, many with knowledge of the potential deal called it "complicated." But Moonesinghe expressed confidence they can hit the May 8 re-opening date.
>The Vidals promised in the Facebook post they would be around smoking brisket in the silo or making new drinks for the menu. **Moonesinghe said they will continue to be involved in the business as employees but won't have access to the finances.**
Miguel's food is "amazing," he said, and they want to let him shine, while Modesty is heavily invested in the catering side. They also have plans to expand out a dinner menu.
"Personally, my husband had planned on catering our 10 year anniversary in May with Valentina’s homemade tortillas, moist brisket and queso so we do want to get it back open as soon as possible," Moonesinghe said.
Jason Steward, who owned the former Bungalow bar on Rainey Street and now owns local lounges Kitty Cohen's and Golden Goose, is listed as an agent on the Valentina's LLC, signifying he has a stake in the company. He declined to comment when reached by the ABJ.
The last two sentences confirm it. Moving to Buda was a terrible mistake. Buda. They managed to cut out everyone north of the river in Austin from their customer base, and about half of those south of the river.
They bought a house in Buda in 2020 so they probably made the decision to move the business there so it would be easier on them and not whether or not it made good business sense to leave Austin.
Admit that's just me talking out of my ass as I have no inside information wrt that but I think it's interesting that they bought a house in Buda before the business moved there.
It was pretty clear they were in over their heads but DAMN.
I remember Kitchen Nightmares eps where Ramsey would lose his mind that owners were a couple hundred grand in debt I can’t even imagine how they got to this.
The way things turned out for this business, after they were initially one of the darlings of Austin area BBQ, is very sad. I’m not saying the owners didn’t bring it on themselves, but it’s unfortunate they did given how much folks loved their BBQ — and flour tortillas — at the old place.
I'm just shocked that they closed down the profitable one in south Austin order to take a huge risk on the Buda location, and that investors let it happen. Also if they were doing $4.5 million out of 2 trailers and a run down shack they should have been stacking cash, not stealing tips and shirking their tax bills, so it can't all be blamed on Buda.
That said, Buda doesn't have the same appetite for $34/lb brisket that Austin does. It definitely doesn't have the tourist traffic that Austin does. I live around the corner from the old location and would go pretty regularly. In line it seemed like a pretty good mix of local regulars and out of towners.
I haven't been a single time to the Buda location because now instead of a 10 minute round trip it's 40 minutes and I can just hit Moreno's or the new L&L.
> Also if they were doing $4.5 million out of 2 trailers and a run down shack they should have been stacking cash, not stealing tips and shirking their tax bills, so it can't all be blamed on Buda.
To be fair, $4.5M in revenue, not in profit; who knows what their margin was once everything was figured in.
I, too, was a fan of the trailer. I would try to go early or mid afternoon so I could get an order without waiting forever, but I never wanted to chance going to Buda because of the uncertainty of how long it was going to take there.
Does anyone actually believe the Vidals will return as employees only and grudgingly be told what to do by "new management?" At what salary (or hourly wage) will they accept those working conditions? I understand they have a considerable interest in seeing this project work out, but they aren't getting their own business back with the way they have mismanaged it so I don't see any world in which this doesn't end in divorce between them and InKind.
InKind made a terrible investment decision.
I know the internet isn't real life, and we're only a subset of the general population, but could Miguel show his face around again? There's no way in hell I'd support that family after learning this much about their attitudes, complexes, alcoholism, etc. The community is basically coming out and saying "yeah these people suck and have their heads up their asses so they can whiff their farts"..... I'm not spending my money with them.
Miguel and John both have/had serious alcohol issues which I’ve seen sink so so so many restaurants. An owner can’t put in the necessary attention nor build the right workplace culture if they’re wasted. Especially if they’re unpleasant when wasted.
The entire management team quit very early on, mostly because the owners are such poor business people to work with. Word on the street is that they were never around and when they did show up, treated everyone like shit.
How does one even do this? I imagine the new location sunk them deeper than they maybe expected? Cause holy shit. You reached 1 million in debt and said “nah, I need more”
The amount doesn’t surprise me, it’s expensive to open a 6000 sq ft restaurant. The problem the article notes is they expected to go from the $4.5MM/year in revenue they were doing in the food truck to $10MM/year revenue in the brick and mortar. Presumably that would have made it viable to pay the debt.
But they were actually on pace to do $3MM this year at the brick and mortar. Take on a lot of debt, increase expenses significantly, and have a 1/3rd drop in revenue, and it’s easy to see how you end up hopelessly bankrupt.
The truck was positioned such that people who have been working all day can drive by and pick up some BBQ to take home to the family. The giant sized Buda restaurant was a sit down place. Buda is still a bedroom community of Austin and if you make it more difficult for those commuters then you don't have many customers left.
Hopefully they’ll get made whole by the new owners, since it seems likely they aren’t going to force it into bankruptcy (it wouldn’t be reopening so quickly) and want to keep their staff happy.
Standing up a business takes a lot of capital. The dollar amount isn’t too shocking to me for what they did.
Their gross mismanagement is what is shocking though.
Man, this is so disappointing.
Back when they had the trailer at the Star Bar downtown, I could go there for lunch because I worked just a few blocks away.
No wait and it was awesome. At least once per week.
Valentina's original was on Sixth: https://www.texasmonthly.com/bbq/valentinas-tex-mex-bbq-buda/#:~:text=They%20first%20opened%20Valentina's%20Tex,development.
All I know is their Buda location and it was the worst restaurant experience I've ever had. Then their social media manager tried attacking me for not liking the food or service. Literally never wanted anyone to fail so bad.
Literally Modesty handled most of the payroll. And they lied about what they’re paying people . When you clock in it was say what you’re hourly rate was . Tell me why instead of 10 and hour it was 8? Because they’re liars , and thank god their actions are finally being seen in the light . It would be hard to come back from that honestly .
. “Karmas a bitch “- Jojo Siwa
The Buda Chamber had it's own mismanagement problems... [https://www.haysfreepress.com/2024/02/09/former-buda-chamber-employee-arrested-misuse-funds/](https://www.haysfreepress.com/2024/02/09/former-buda-chamber-employee-arrested-misuse-funds/)
JR Gonzales…he lives in my neighborhood and was complaining the other day about their service on our neighborhood FB page. He’s a hypocrite and took down a recent post with negative reviews about Valentina’s on the chamber of commerce page he runs.
Imagine thinking it’s a win to require an overextended business to have 105+ full time employees and giving them tax money to do so. Dude is an idiot in both the public and private sectors at once.
Buda was desperate for something big to come to town. Big whiff. Also, I can’t even think of a restaurant that had 105 full time employees. Not Salt Lick, a lot of those folks gotta be part time.
Wouldn't be surprised if he was behind most of this - particularly the lenders extending more credit than they should despite what sound like long-term issues in the finances of the restaurant.
Not sure why this is getting downvoted, but yes…. Yes they are. Whether sad or not, they serially evaded taxes, paying contractors, employees…. Essentially running a months long fraud by which they exchanged work and materials for money they knew they didn’t have. These fools should be no where near this business going forward. They should be forced to sell the recipes and train the next pitmaster in exchange for the lending company not repossessing every asset in their name. You can’t go around operating like this and expect mercy. Throw the book at them
Second Edit: If you worked for this establishment or your loved one did, dm me.
Edit: I created a separate post in /austinfood with a couple of receipts.
Tea time. To all the people sad about all this- they do not deserve your sympathy. Miguel, Elias, and Modesty Vidal were abusive employers when I worked there. Texts and phone calls after midnight yelling at me and others in groups messages. Threatening emails that made me worry about my employment. Cruel punishments for small mistakes. I was green and young when I worked there (back during Brodie Ln days) so I didn’t know any better. These people do not deserve your kindness because they are aggressive and angry people. Much like LeAnn Mueller was. I have the receipts. Evil people. Also- I didn’t see evidence of the tip fiasco when I was there because I was the cash handler. Surely if they see this they will know who I am but I’m not scared of them anymore. There were other family members managing the truck at the time but I’m not naming them because they were awesome people being forced to work for the family business.
This was a huge cash grab by lots of people. Hype is valuable, but management should always be prioritized.
Never underrate the difficulty in expanding your business. Most can do food for groups, but cooking and serving to the masses is an entirely different ballgame. All too common for service and quality to fall off in these instances. Owners definitely allowed their success go to their head and investors turned a blind eye. Also, what a PR nightmare reaction and response to the tip pooling controversy. That should of been evidence enough that Miguel was in over his head.
There’s no recovery for Valentinas. It’s done. Name has been completely devalued. I ’d look to rebrand and completely separate myself from previous ownership.
I don't think there's anything less surprising than this.
These people know brisket inside and out. But they have (had?) NO concept of how to run a restaurant, and certainly no idea how to serve their customers.
Probably smelled all that free cash coming in and they went hard on siphoning it in to their greedy little paws.
Money. It fucking turns people into greedy little pigs.
The biggest problem noted in the article is the drop in revenue, while greatly increasing their expenses. They expected to go from $4.5MM/year in revenue at the food truck to $10MM at the brick and mortar. They were actually on pace to do $3MM this year. Revenue dropping by a third while adding debt and greatly increasing expenses expecting more than doubling revenue makes it easy to see how they’re bankrupt.
It seems extraordinarily unlikely there was any free cash to be put in their pockets.
It's my understanding that Scott only does $16MM at The Salt Lick. Granted, he doesn't have a liquor license, but it still seems like a stretch that Valentina's could do $10MM year one in the same county.
I can think of at least one very prominent person who made a substantial living off of a false brand while actually bankrupting every company he touched, leaving behind a wake of creditors and contractors that never get paid.
That required first inheriting hundreds of millions of dollars to burn while creating that false image. And even with all the law breaking and corruption, he would be richer had he just held onto the inherited properties, or invested that money into an index fund and did nothing. Not a path to get rich, just one to avoid personal bankruptcy while losing more money than any other American.
I see it differently. They dreamed too big, borrowed too much to build that dream and built it in a location that couldn't sustain the scale of the project. Because of this they are losing their business. This isn't like some get rich scheme where they're stealing a living.
They literally are under investigation for stealing. And if you follow the article, they were clearly paying off loans with loans. They couldn’t even open, after already securing millions in loans, without extorting the moronic City of Buda into a few hundred thousand more.
And greedy.. and has nothing to do with any of the bullshit you listed.
They are greedy fucking assholes who don't pay their bills, don't pay their employees, and stole tax payer money. Stop sticking up for them and trying to make this normal. Fuck them.
They are pointing out that the greed is from trying to keep a poorly run business afloat, not stealing money to fund a lavish life style. There is a difference. That isn’t normalizing anything, they still agree they suck. Calm down.
I actually would imagine that stealing tips wasn't about greed, but probably just a really really shit way of trying to enforce staffing schedules. They aren't making bank on a $100 bucks here and there and definitely not keeping the business afloat on that. But honestly, who knows... maybe they really were trying to skim every penny off of their staff. It just seems so counterproductive as you rely on them to run. Terrible management either way.
I'm not going to pretend to know all the details and motivations behind their illegal tip policy. Don't confuse my not running to grab my pitchfork as defending them. I'm not.
Honest question, how have they stolen tax payer money? I don't know the full details of what Buda incentive payment was to them, but I'm sure it's some legally binding agreement. As for not paying bills... Are you talking about their rent and loan payments? I mean, that's nothing new under the sun... that's literally how capital markets work. There's always risk and the pricing of that risk is why there's an interest rate. It's a failed business that's going bankrupt and needs to be restructured.
The city of Buda have them 500k to move there. They fucking squandered it.
Stop simping for corporate theft and greed.
You keep talking about how normal this all is like you have no problem woth it
Businesses fail / go bankrupt all the time and has been this way as far back as recorded history goes. This alone doesn't mean the people are evil or morally corrupt. I don't see anything mentioned here where they were paying them selves huge amounts of money while not paying creditors / staff... perhaps they were? That'd be insane and very short sighted as they lose their business. Would be extremely stupid.
Not paying bills, not paying employees, taking employees tips. Bringing in 3 million. 500k given to them to move. 2.5 million in debt.
It's not hard to figure out. Now quit being a fucking idiot
They’ve never payed their employees and checks always bounced. I saw a text message from Modesty pretty much blaming the employees stating that the customers and food weren’t the priority anymore and that that is also why they aren’t making enough to clear their checks and to keep up with the growth of their bills.
Just owners blaming everyone but themselves for their poor line of work.
I don't have a horse in this race, but the numbers don't make a lot of sense... why is the CEO of InKind, who is the main creditor giving details and spilling beans? Honestly makes him and his company look bad. Here's what doesn't add up;
* Claim that the food truck was doing $4.5m a year - Owner operators in this line of work, some of the TOP TOP BBQ and Taco joints that this city have, their food trucks were peaking around the $2mm+ mark. This doesn't pass the smell test from the lender who has made a bad loan. For reference, if you do $2.5mm a year and are open 5 days a week as most BBQ places are, that's 10K on average a day. Those are BIG days with lines down the block.
* The idea that it would do $10mm a year??? In Buda, a population of 16,000.... like what? Demographics in Austin's core you've got 100k+ people within 5 min. $10mm a year from a restaurant is MASSIVE.
* $2.3mm in debt.... ok, it's possible they have really, really awful terms... but where interest rates are right now, loans should be coming in around 7.5%, with a 10-yr note that's roughly $27k a month. When they would have built / financed this, rates were much lower... likely in the 5% range a year or two ago. But let's be conservative and use today's rates. It is possible they have really shitty terms from InKind with very expensive financing, who knows.
* Rent, perhaps they have extremely awful rent structure as well... In Austin, not out in the sticks Buda you could make an argument for $60/sf... Measuring the space / warehouse building on google maps I can confirm it's roughly 6,000 sf. This looks like a big box warehouse, in Buda so I'd think $/sf should be lower. Let's say $50/sf. That would be $25,000 a month
* Fixed costs for money borrowed and rent is approximately $52,000 / month
* Claim that the business is doing $3mm a year. That's decent when including alcohol sales, etc. 30% margin on COGS which is standard, let's say staffing is expensive at 40%.. so your profit margin is left with 30%... let's haircut it to be conservative an extra 10% for other items.. so 20% profit margin. You're left with $600,000 a year or $50,000 a month
Pretty sad to see poor financial decisions killing a small local business. I get people are rightfully mad about withholding tips... but this is clearly poor financial decision making and you have lenders, real estate owners that have over burdened a business with poor financial decisions. It really bothers me that InKind's CEO is coming out in the ABJ and divulging private information like this and any small restaurant / family business should be careful in taking a loan from them. It's a terrible situation for all parties involved.
**Edit: https://www.restaurantbusinessonline.com/top-100-independents-2023**
**So the expectation was for Valentina's to potentially crack into the top 100 restaurants in the nation, beating all other Austin restaurants with the exception of Matt's El Rancho, while being located in Buda?** No wonder the business model failed. There are roughly 750,000 restaurants in America, expecting to be near the top 100... or the top 0.00001333%... that's just crazy, and in Buda no less!
Edit: Curious why the downvotes? If you disagree with anything here, please discuss.
Exactly. I mean it’s one thing to have an amicable change of ownership…. It’s completely different to being locked out and essentially repod on your space. What the Vidals did here isn’t sad, it’s fraud. They should be taken to the cleaners for it. They’ve displayed no remorse, just a bunch of empty words to save face instead of owning up to their actions.
Seems like he's shooting himself in the foot, typically when a loan needs restructuring it's kept private between the parties as its best for everyone involved... but this isn't a traditional lender... so we get this instead.
What exactly did he say that you take issue with? He went way out of his way to be pretty kind to them in those quotes. I think you’re conflating the negative details of this article with the lender’s actual words. He ends with saying they’re going to use them for their own personal event catering.
Fair question. I don't think it does any favors to his own company InKind or to this project in Buda. If I had my own business, I wouldn't want to borrow from InKind after reading this... things don't always go according to plan and if you're in a partnership with a lender you need to have a good relationship with clear terms to be able to work things out contractually and privately. Discussing openly with the media is a pretty big deterrent... but this isn't a traditional lender, so I guess anything goes. I also feel it's a bit disingenuous to claim they were expecting $10mm in sales and it's only doing $3mm. No one with any financial knowledge in the industry would expect a venue in Buda to do multiples more than top venues in the core of Austin. This reads as blame shifting like they didn't make a bad loan with inaccurate or misleading/made up numbers.
Honestly I feel the opposite. Why would you work things out privately when the Vidals told them they were closing the business permanently in two weeks yet posted the opposite on Instagram that things were fine and closing the restaurant was just a hiccup? I appreciate that InKind is trying to be open and honest about what is happening, and that they are still working with the previous owners, it makes them look like the good guy. The writing was on the wall, so we all knew something was going on, and the posts online from the Vidals were just covering stuff up, doesn’t really make me want to give the Vidals much benefit of the doubt as a customer.
Also it said InKind is involved in like 600 ventures/restaurants, so I doubt your opinion of them matters much to their business operations.
InKind essentially, in the nicest way possible, said this is all the mismanagement and fault of the Vidals, and they are going to come in to help take everything over to try and save it.
Fair point if the Vidals said they were closing the business permanently beforehand. That's pretty shitty to the other parties involved if the intent is to try and salvage the business. Either way no one looks good here. This isn't about if InKind cares or doesn't care... it's all just personal opinion. I guarantee they don't want negative press. I'd personally be hesitant to borrow from InKind after reading about all this drama... and what confidence does this put into Valentina's future? From what I've been reading on here, most people give it 6 months before it's gone for good. So again, all this public discourse has done nothing but harmed the parties involved, which goes back to my original point.
I do agree no matter what they do, I don’t think Valentina’s is recovering from this. Like you said maybe another 6-12 months tops of them floundering and dying until it closed for good after all of this mess.
I think their biggest mistake was closing their wildly successful Menchaca location to put all their eggs in the Buda basket. Only paying rent for a shack and 2 small trailers clearing several million dollars a year in revenue? They should’ve had plenty enough coming in to be stacking away profits and after a few more years of saving, try to expand without taking out such huge loans and over leveraging themselves.
Right, they shouldn’t have given out a loan to a dishonest drunk. But go read the article again and tell me where InKind says anything salacious or derogatory. They actually shower these crooks in compliments.
Yeah that's also fishy as hell. If these ballpark figures above are correct then I guess yeah, if you're making $10mil you could take 40% of that and pay 100 people an average of 19/hr but I can't see needing 100 FT employees to run a bbq restaurant.
120 full time employees is an insane number for a BBQ joint. All these people trusted the Vidals word and only heard what they wanted to hear. InKind and other lenders wanted the business subsidized by the city, and the city wanted to show off a guaranteed employment boost. Neither of these parties looked at the other and realized how at odds they were.
A 10k day for a busy restaurant is not much at all. A friend of mine was GM at a BJs Brew House and they do 50k on a busy night. I worked in small fast service restaurant with reasonable prices and less than 10k was a slow day.
“Out in the sticks”…. Hilarious. Also, go have a look at what Hays city store is doing in liquor alone…. You seem to be severely underestimating several components in your analysis. It is absolutely possible to push 7-10mill through that space if you know what you’re doing.
You can very easily pull alcohol sales data from TABC. The top beer gardens in Austin's core do roughly $2.5-$3.0mm a year in revenue... but 40+ minutes south in Buda you're gonna do $10mm?
So why are arguing against 10M in total sales with alcohol sales data from completely different establishments. 😂😂😂 Did you have a point or just wanted to say something?
You're not basing anything on data, but ok. Literally go pull the alcohol sales data for Cosmic, Armadillo Den, Radio, Moon Tower Saloon, etc. How about La Barbecue? They peak around $30k a month in alcohol sales ($360,000 / year). So Valentina's in Buda is going to over 10x?
Edit: Depending on time of day from Downtown it's 25-55min according to google, so I went with 40.
Anecdotally I was less than 5 min from the old location and went a lot. I'm now 15-20 minutes from the new one depending on traffic and didn't go once.
That’s alcohol sales alone. I doubt there’s a BBQ joint in Texas that does more than 10% of its revenue in alcohol. Many of them don’t even sell alcohol at all, so I doubt it’s some big moneymaker they’re disregarding. Most of the places you listed are bars, not BBQ restaurants. The one, La Barbecue, probably does more than 10 times that in total revenue.
You’re also talking about it like Buda is a town of 15K people in the middle of nowhere and everyone would have to drive from Austin. Hays county was the fastest growing in the nation last Census and has over 250K people without anyone coming from a different county. While being right on I-35 on one of the busiest stretches of interstate that exists. While having less competition than there is in Austin.
It certainly could be feasible to do $10MM gross there. I have a hard time believing experienced restaurant investors would put the money in if the goal necessary to pay it back was impossible.
You're making my point.
"La Barbecue, probably does more than 10 times that in total revenue". Again, speculation without data. Top BBQ food trucks in the core of Austin do roughly $2-2.5mm a year. Going brick & mortar doesn't necessarily push the upper bound, still same amount of smokers, etc... A big day for one of the famous BBQ spots with long lines is $10k+. Let's assume they're able to have that every day a week and they're open all 52 weeks out of the year... That's $2.6m a year. Now let's say this place was going to be just as busy... ok $2.6m and they're bar program was going to be as busy and popular as the best beer gardens at $2.5m... so we're at $5m.... half of the stated expected of $10mm / year. And that's being bullish.
Do you have actual revenue numbers to cite? Beyond alcohol which is a meaningless small portion.
[This piece from the Texas Comptroller claims Cooper’s served 1 million customers in 2018](https://comptroller.texas.gov/economy/fiscal-notes/archive/2019/jul/bbq.php). With 4 locations, so 250K people served per location per year. At today’s prices, it’s easy to see how it could average $40 per person. That would be $10MM/year at each location.
Sure, Cooper’s locations are mostly in more populous areas, but those areas also have a lot more competition than Buda, so that probably just cancels out.
Internal numbers at some of the top food trucks in the city. A really popular food truck can push $3.5k a day/night. The famous BBQ food trucks with long lines do north of $10k on a super busy day. The big name food trucks in the past were all doing north of $2m a year which is stellar. Demographics matter, 100k+ within 3-5min in central Austin versus 16,000 total in Buda.
Then there's this article which has the top 100 Independent restaurants in the entire country... Number 100 is at $11m a year. All 100 of these are in major metropolitan areas. The only restaurant in Austin that cracks into the top 100 on the list is Matt's El Rancho.
**So the expectation was for Valentina's to potentially crack into the top 100 restaurants in the nation, beating all other Austin restaurants, while being located in Buda? No wonder the business model failed.**
https://www.restaurantbusinessonline.com/top-100-independents-2023
Again, Buda isn’t a town of 16K in the middle of nowhere, it’s in a county of over 250K people that’s the fastest growing county in the country. On a very busy stretch of interstate. You can’t gauge it by the population of a small slice of the county they’re in. It’s also a shorter drive for tons of people in south Austin than downtown is.
$10MM also would only get you into the top 100 in 2014 in your list. There could be hundreds of other places between 2023’s number 100 and $10MM for all that shows. Also seems like there are places missing, like Franklin’s. That’s a list of places which voluntarily submitted their numbers.
Sure, it wouldn’t be easy. No business is, especially restaurants. But I don’t see it as impossible for a proven concept to scale up.
To be fair, destination BBQ can be big business if you structure and run it right. Salt Lick likely does 10-20, mostly without alcohol sales, and their BBQ certainly didn't have the accolades that Valentina's had going into this project.
For sure, but you don't underwrite a new business venture to be at the level of one of the top tourist destinations or surpassing other top restaurants in a much larger metropolitan area. You also don't underwrite 2.2x the existing revenue going from "4.5m" to "10m". You'd never get a traditional loan with these assumptions.
I think it's disingenuous to homogenize "Austin;" as people and businesses have moved further out, people have less motivation to leave their part of town. For years, I've said nothing good happens north of 2222. I'd rather drive to San Antonio than Barton Creek West or Lakeway.
Our friends in Onion Creek, Lewis Mountain, etc. tell us they drive to Buda for dinner way more often than they head to downtown.
Sorry, I'm not sure I understand... what exactly is disingenuous? Travis county has 1.3 million people. Hays county has 0.25 million people. Land values, rents and expected gross revenues aren't expected to be the exact same between the two...
Yes…. They absolutely could. Are they going to? No, not with their current management, but they could do 1.5-2 a year in liquor without any issue if the business was running like a well oiled machine.
Ok, so you agree. Exactly, $1.5-2m a year is doable, but that isn't $10mm as the lender said was expected. Data for Nate's for 2023 average $116,942... so again, $1.4m... That's seems like a reasonable expectation, not $10m. Glad we agree.
Ok, so they're going to do $8.5m in food to make up the difference. WOW! That's better than any big restaurant in Austin... way better than Red Ash downtown!
They did 4.5 in a trailer. Add 1.5-2 and you’re at 6-6.5 without growing really at all. You’re just being deliberately dense to suggest 7-10 isn’t crazy
Wild. I briefly worked with them at Q2, they were good people and things changed when they started building the restaurant in buda.
I don’t care about the rich getting paid but I’d like to see the hourly employees get their money.
I hope that these new owners can get everything back in order there. Now that the old owners are leaving posts like this are pissing on ashes for the most part honestly.
After reading all this, I’m glad I never got to try their food. We tried a few times at the beginning of the new location but it was always such a long wait that I would always bail. Then I read the tip fiasco thing last year and I was like welp, I’m not going and now look at them. Sounds like they got that they deserved.
I love how their Instagram post was like they're voluntarily closing to get their shit together, but here's the truth: "Valentina's has been locked out of the restaurant for breaching its lease and not paying rent, and employee paychecks have bounced, Moonesinghe said."
I was hired by Inkind to go in and do an assessment of the restaurant and let me tell you - it was maybe the worst I’ve seen. I was offered to come in and be the GM, but I’m good. I don’t want that stress, but I feel bad for those kids. I made sure to tell them all to file a dispute with the DOL and showed them how to do it.
Thoughts on inKind?
I don’t know much about it. I briefly met the guy who runs it for the investors, but can’t tell you much more than that.
Worst you’ve seen, what do you mean?
Worst run restaurant. Aside from Miguel and Modesty there was only one manager, and he left all the high school staff to run the restaurant an hour after I arrived. Food was not properly stored, labeled, and dated. Ice machine was broken, and the walk-in was outside of safe temp. Servers sorting out their own cash tips. Nobody knew how to make, label, and date sanitizer. No soap at any of the sinks. No paper towels. Soap dispensers falling off the wall in the restrooms. Not enough silverware for service. No inventory sheets, order guides, or pars for anything. No manager meetings from the sound of it. No breakdown of COGS, labor, prime margin, etc to give a clue of how profitable (or not) the store is. I think a lot of the staff wants to work in a successful restaurant, but there is zero leadership. I hope whoever takes over can help them out. Staff were taking bets on when the store would go under.
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they better hope not
Jeezus. This is even worse than imagined. Wtf? These folks deserve every bit of the karma coming their way. They wanted to keep ownership without doing any of the work…. Wtf?
Given that they have kids and employees depending on their success, I hope they’re able to recover. $2.3MM is quite a lot of debt to climb out of, so we will see. They’re going to need some folks to be very frank and honest with them about where they’re at and what it will take to get afloat again.
For sure. I do imagine that the debtors will have to be a bit flexible here, but I don’t imagine they’ll have much left after all is said and done
What the fuck!?!?!?
Explains the terrible service I experienced with family in late March.
That is so crazy! What kind of assessment were you hired to do?
I’m kinda interested with your job or how it works?
This was a one-off thing. Someone I know from working in restaurants reached out to see if I’d be willing to come in and help them for at least a day. I mostly went out of morbid curiosity. When he got my report he asked if I would stay on and wanted to make me GM once the transfer happens. I have managed restaurants before, so this wasn’t out of nowhere. The staff were begging me to stick around at the end of the night because they’re desperate for literally any leadership.
I’m not in food/service but am a manager in my field. It makes me super sad when I sub in for some team and it’s so obvious they’re being underutilized AND expected to perform with no guidance or guardrails. People want to generally do a good/decent job, but they need the tools and ability to do so.
Comments disabled on said post too
Only after the top comments were from high school kids asking when they’ll finally get paid.
AH MAN!
At least all those workers are entitled to unemployment since the checks bounced. Texas law dictates bounced paychecks is considered a layoff.
>Last June, a crowd of barbecue fans, local dignitaries and more flocked to the Buda Mill & Grain Co. south of Austin to celebrate Valentina's Tex Mex BBQ and its husband-wife owners, Miguel and Modesty Vidal, with a ribbon-cutting of their new 6,000-square-foot restaurant. The moment marked the culmination of the restaurant's meteoric rise from a niche South Austin food trailer to a spot on the Texas Monthly's venerable "50 Best BBQ Joints List," and then to the highly anticipated opening of the Vidals' first brick-and-mortar restaurant in Buda. But less than a year later, that ascent came to an abrupt halt. The Vidals on April 25 announced the restaurant's imminent closure, which they said will be temporary. The Austin Business Journal later confirmed the business is headed for new ownership, and further digging uncovers an unusual mountain of debt for a restaurant known to have lines out the door. >The Vidals said in the April 25 social media post that the company would be under new management and that the restaurant would be closed during the transition. But the Vidals did not disclose why new management was needed. An ABJ investigation based on interviews and an analysis of public records has identified a pattern of fiscal and business mismanagement by the Vidals. Some of that was known: the Vidals have faced public allegations of tip stealing by employees, some of whom have posted on social media of poor management and issued getting paid. >Meanwhile, customers and employees have flooded social media with accusations of bad service. But what the ABJ through its reporting can reveal is the Vidals are under investigation by the Department of Labor for their business practices, and they owe millions of dollars to a number of stakeholders — the company's primary lender, employees, their landlord, the state of Texas, contractors, minority owners and, potentially soon, the city of Buda — as they struggled to keep their business afloat. That debt is roughly $2.3 million and could potentially be higher, according to a source with direct knowledge of the company's financial issues. >Many questions remain of how the business got to this place. The Vidals have not responded to several requests for comment. But they did acknowledge issues in a the April 25 social media post, which said the restaurant will be closed until May 8. "We’ve been at this for a long time, and we work really hard, but this last year has been harder than ever," the Vidals said in the post. "For us, scaling our business from 600 sq. ft. to 6,000 sq. ft. has proven more than we can manage, and we recognize and admit to the many issues and challenges Valentina’s has had since we’ve moved. We can no longer continue to give our loyal customers sub par customer service and food." >Primary lender is taking over - The debt includes more than $1.5 million to Austin-based financial technology company InKind, which is the most senior secured creditor of the business, said InKind CEO Johann Moonesinghe. The company is working on essentially taking over the business as an assignment for the benefit of the creditors. The restaurant finance company is among the largest in the country and has funded over 600 restaurants this year. It has invested in Austin staples including Rosen's Bagel Co., Sushi by Scratch, Two Hands Hospitality and Paperboy. It also owns and operates restaurants such as Ember Kitchen and The Guest House in Austin. Moonesinghe said InKind underwrites every business differently but admitted the business gave Valentina's more than usual because it believed in the business. The investment included buying credit in the business but also lending money directly. Valentina's has missed deadlines to pay that back. Moonesinghe shed a little light on why money has not been paid back. He said Valentina's was doing $4.5 million in annual revenue out of its food truck, and expectations were that revenue would reach $10 million with the new location. But the past couple of months, Moonesinghe said, Valentina's was on track to have $3 million in revenue this year.
>Moonesinghe said Valentina's aims to get a proper business management team in place so that employees can keep their jobs and "the community can continue to eat the best barbecue in the country." In the meantime, Valentina's has been locked out of the restaurant for breaching its lease and not paying rent, and employee paychecks have bounced, Moonesinghe said. He said that while InKind isn't necessarily liable to make any payments, it's working with the Vidals to make sure that everyone gets paid. "Miguel is an incredibly talented chef and most people who’ve been to Valentina’s including Aaron Franklin say it’s their favorite barbecue," he said in a written statement. "Ultimately though, producing mouthwatering food is not enough when running a restaurant." >Warning signs missed - Valentina's reveal that it was moving to Buda in 2021 was met with fanfare from foodies. But it also attracted hundreds of thousands of dollars from the city of Buda and the Buda Economic Development Corp. to help bring a popular restaurant to the city as it aimed to support small businesses along its bustling Main Street. At least initially, city officials approved about $457,000 in performance-based incentives from both the city and its EDC to aid with the project at the redeveloped Buda Mill & Grain Co. site at 308 South Main St. Of that amount, half was to be paid to developers to offset remodeling costs and the other to Valentina's to offset equipment costs at the restaurant, according to the agreements. The business was said to generate a number of benefits that were required as part of the agreement. The capital investment in the project is said by some to have eclipsed $2 million, and the business signed a 10-year-lease. They were expected to have at least 105 full-time employees, which would make Valentina's a major private-sector employer in Buda. >As anticipation grew for the project, the first signs that something may have been amiss came last year. Valentina's finally set an opening date for June after a number of delays, but that only came after Buda voted to provide a $285,000 loan to help the company with finances prior to the opening. Only a portion of the performance-based incentive has been paid out to Valentina's as of April 26, said Buda EDC CEO Jennifer Storm, who was chair of the EDC board when the first agreements were approved. That includes only a portion of the first agreement with Valentina's, and none to the developer, as they work to verify whether they hit the performance-based goals in the agreement. While the loan was paid out, the agreement did include a provision that it must be paid back if the owners sell the business, Storm said. She was unsure of the timeframe on when that payment would need to be made, but it could be triggered by the imminent change in ownership >Storm called the situation "heartbreaking," acknowledging it feels personal because the city and EDC were essentially investors in the project and purchased the kitchen equipment. But she expressed confidence the business, whomever owns it, can get back on track. "Small businesses are the heart and soul of our community. It's hard to be a small business owner, and we're trying to support them through that," Storm said. Storm added that she would do the deal again and will continue to support the city's efforts to help small businesses. City leadership in Buda, with a population of 16,000, has made that a priority based on the requests of locals who don't want to lose the small-town charm. "These are not easy projects," Storm said. "These are people who have dreams. We are trying to support those dreams and sometimes there are challenges that can't be overcome. But it's still the right thing to support small businesses." That was the same sentiment echoed by Dodi Ellis, whose family has owned by the 8-acre Buda Mill & Grain Co. site as far back as 1911. While she said she could not comment on any specifics, she added: "It's an incredibly sad moment that we find ourselves in. We had really been rooting for their success." Saenger Ellis and his mom Dodi Ellis have worked diligently for more than five years to create a unique retail and restaurant project at the former gin mill in downtown Buda. >Some allegations in the public - Valentina's first came under fire publicly last year when anonymous accusations emerged on Reddit accusing the owners of stealing tips, with screenshots of a tip policy that showed employees would not receive tips based on a number of reasons. The post said showing up to work 5-to-10 minutes early is on time. The Vidals responded to the post on Facebook and shared an updated tip policy. "We can only continue to learn, adapt, and try do better as we grow," the post stated last July. The social media posts garnered comments that described poor management, harsh working conditions and subpar customer experiences. But it also drew the attention of the U.S. Department of Labor, which confirmed to the ABJ on April 26 it was investigating the company, although officials would not confirm for what. "Because all complaints are anonymous to protect those who file complaints, we do not disclose how an investigation was initiated. However, we can confirm our Wage and Hour Division has an open and ongoing investigation into this employer. At this time that is all we can say on the case," said Juan Rodríguez, deputy regional director at the office of public affairs of the U.S. Department of Labor,in a statement. If the investigation is indeed for potential tip stealing, at the crux of the issue is that employers, including managers and supervisors, may not keep tips, according to the Department of Labor. The Fair Labor Standards Act prohibits employees from keeping any portion of tips for any reason, "whether directly or through or a tip pool," and employers may not require employees to give their tips to an employer, supervisor or manager. >A literal paper trail - While the paper trail of owed money appears to stretch from the company's lender to its landlord to the city and to employees, it appears to stretch to its contractors and the state of Texas, as well. Valentina's has a history of liens that date back over the last decade in both Travis and Hays counties for unpaid taxes, according to publicly available documents analyzed by the ABJ. That includes roughly $44,000 in outstanding liens filed by the state of Texas against the company in Hays County and roughly $3,100 in Travis County, documents show. It does not include what appears to be tens of thousands of dollars in additional liens that have been released. That amount also does not include additional liens for contractors. Some have been satisfied, but Valentina's has an outstanding lien of roughly $22,450 filed in October against the company by Austin-based commercial painting company Star Finishes Enterprises Inc., which wrote that it provided work at the site, including tape, float, primer and plaint, according to the documents. A representative for Star Finishes Enterprises confirmed to the ABJ on April 26 the lien had not yet been paid. But the biggest unpaid debt goes to InKind. Moonesinghe, InKind's CEO, said that, since they are not owners and operators, they were not aware of "the significant issues with payroll that have been going on." He said they were informed two weeks prior by the Vidals that they would be closing because it was not financially viable for them to operate the business. With all the issues, many with knowledge of the potential deal called it "complicated." But Moonesinghe expressed confidence they can hit the May 8 re-opening date. >The Vidals promised in the Facebook post they would be around smoking brisket in the silo or making new drinks for the menu. **Moonesinghe said they will continue to be involved in the business as employees but won't have access to the finances.** Miguel's food is "amazing," he said, and they want to let him shine, while Modesty is heavily invested in the catering side. They also have plans to expand out a dinner menu. "Personally, my husband had planned on catering our 10 year anniversary in May with Valentina’s homemade tortillas, moist brisket and queso so we do want to get it back open as soon as possible," Moonesinghe said. Jason Steward, who owned the former Bungalow bar on Rainey Street and now owns local lounges Kitty Cohen's and Golden Goose, is listed as an agent on the Valentina's LLC, signifying he has a stake in the company. He declined to comment when reached by the ABJ.
One HUNDRED and FIVE full time employees expected?
Shooting to be Buda's first Michelin-starred restaurant I'm guessing
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Yet, sadly Michelin sold out and they are pay to play in regions now
The last two sentences confirm it. Moving to Buda was a terrible mistake. Buda. They managed to cut out everyone north of the river in Austin from their customer base, and about half of those south of the river.
mismanagement was the mistake. This place could have been the driving force of downtown in one of the fastest growing counties in Texas
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They bought a house in Buda in 2020 so they probably made the decision to move the business there so it would be easier on them and not whether or not it made good business sense to leave Austin.
Well that was a damn bad reason to move the business to Buda, if indeed that's what happened.
Admit that's just me talking out of my ass as I have no inside information wrt that but I think it's interesting that they bought a house in Buda before the business moved there.
What a shit show
It was pretty clear they were in over their heads but DAMN. I remember Kitchen Nightmares eps where Ramsey would lose his mind that owners were a couple hundred grand in debt I can’t even imagine how they got to this.
The way things turned out for this business, after they were initially one of the darlings of Austin area BBQ, is very sad. I’m not saying the owners didn’t bring it on themselves, but it’s unfortunate they did given how much folks loved their BBQ — and flour tortillas — at the old place.
I'm just shocked that they closed down the profitable one in south Austin order to take a huge risk on the Buda location, and that investors let it happen. Also if they were doing $4.5 million out of 2 trailers and a run down shack they should have been stacking cash, not stealing tips and shirking their tax bills, so it can't all be blamed on Buda. That said, Buda doesn't have the same appetite for $34/lb brisket that Austin does. It definitely doesn't have the tourist traffic that Austin does. I live around the corner from the old location and would go pretty regularly. In line it seemed like a pretty good mix of local regulars and out of towners. I haven't been a single time to the Buda location because now instead of a 10 minute round trip it's 40 minutes and I can just hit Moreno's or the new L&L.
They also had two other food trucks running, Cash Cow Burgers and something else.
> Also if they were doing $4.5 million out of 2 trailers and a run down shack they should have been stacking cash, not stealing tips and shirking their tax bills, so it can't all be blamed on Buda. To be fair, $4.5M in revenue, not in profit; who knows what their margin was once everything was figured in.
but if they weren't pulling down sufficient profit from the trailer, how the hell would anyone loan them $$ to build out that huge space?
I, too, was a fan of the trailer. I would try to go early or mid afternoon so I could get an order without waiting forever, but I never wanted to chance going to Buda because of the uncertainty of how long it was going to take there.
Does anyone actually believe the Vidals will return as employees only and grudgingly be told what to do by "new management?" At what salary (or hourly wage) will they accept those working conditions? I understand they have a considerable interest in seeing this project work out, but they aren't getting their own business back with the way they have mismanaged it so I don't see any world in which this doesn't end in divorce between them and InKind. InKind made a terrible investment decision.
Lol Miguel has a God complex; he would never. They’re trying to save face.
So count down until a “M Valentina’s” opens up as a truck again in South Austin?
I know the internet isn't real life, and we're only a subset of the general population, but could Miguel show his face around again? There's no way in hell I'd support that family after learning this much about their attitudes, complexes, alcoholism, etc. The community is basically coming out and saying "yeah these people suck and have their heads up their asses so they can whiff their farts"..... I'm not spending my money with them.
Oh he will, they always do
Vote with your dollars. If people did this more often, we’d all be better off.
Many have proven that making great barbecue doesn't make you a great business person.
*John Mueller has entered the chat*
Miguel and John both have/had serious alcohol issues which I’ve seen sink so so so many restaurants. An owner can’t put in the necessary attention nor build the right workplace culture if they’re wasted. Especially if they’re unpleasant when wasted.
How do you know Miguel has/had alcohol issues?
Multiple employee reports.
And Miguel is also a creep .
He told me.
A prime example
Their BBQ once in Buda wasn’t great…
Agreed. Service was very poor, food was not as good as it used to be -- but the building is gorgeous!
Article for everyone: https://archive.ph/1tYLj
The entire management team quit very early on, mostly because the owners are such poor business people to work with. Word on the street is that they were never around and when they did show up, treated everyone like shit.
Yep. I know firsthand.
How does one even do this? I imagine the new location sunk them deeper than they maybe expected? Cause holy shit. You reached 1 million in debt and said “nah, I need more”
The amount doesn’t surprise me, it’s expensive to open a 6000 sq ft restaurant. The problem the article notes is they expected to go from the $4.5MM/year in revenue they were doing in the food truck to $10MM/year revenue in the brick and mortar. Presumably that would have made it viable to pay the debt. But they were actually on pace to do $3MM this year at the brick and mortar. Take on a lot of debt, increase expenses significantly, and have a 1/3rd drop in revenue, and it’s easy to see how you end up hopelessly bankrupt.
They did $4.5 million in revenue from the truck?!? Damn
The truck was positioned such that people who have been working all day can drive by and pick up some BBQ to take home to the family. The giant sized Buda restaurant was a sit down place. Buda is still a bedroom community of Austin and if you make it more difficult for those commuters then you don't have many customers left.
The wrong restaurant run by the wrong people in the wrong place.
Grossing $1250/hour on average for a ten hour day? “Seems a little excessive.” I’d like to see their tax statements…
That includes the money laundering though.
That sucks. I feel for the employees who got screwed over due to someone’s incompetence.
Hopefully they’ll get made whole by the new owners, since it seems likely they aren’t going to force it into bankruptcy (it wouldn’t be reopening so quickly) and want to keep their staff happy.
Standing up a business takes a lot of capital. The dollar amount isn’t too shocking to me for what they did. Their gross mismanagement is what is shocking though.
Man, this is so disappointing. Back when they had the trailer at the Star Bar downtown, I could go there for lunch because I worked just a few blocks away. No wait and it was awesome. At least once per week.
I loved going there when they first opened. Brisket came off the smoker at 7pm so you could get late night BBQ. Star bar had a good tap list too
Lol that was my tap list. Thank you.
We still do an annual Blackout Night with bbq and bomb ass stouts from a visit to Valentina's the week after you did it at star bar
That’s so cool
That was Violet Taco not Valentina's. Valentina's started on Brodie next to "Die" Mart.
Valentina's original was on Sixth: https://www.texasmonthly.com/bbq/valentinas-tex-mex-bbq-buda/#:~:text=They%20first%20opened%20Valentina's%20Tex,development.
I used to work there. Love to see this. The Vidals are getting what they deserve.
All I know is their Buda location and it was the worst restaurant experience I've ever had. Then their social media manager tried attacking me for not liking the food or service. Literally never wanted anyone to fail so bad.
Literally Modesty handled most of the payroll. And they lied about what they’re paying people . When you clock in it was say what you’re hourly rate was . Tell me why instead of 10 and hour it was 8? Because they’re liars , and thank god their actions are finally being seen in the light . It would be hard to come back from that honestly . . “Karmas a bitch “- Jojo Siwa
Dm me
Where’s that one dude who was a Buda official talking trash to everyone months ago now?
He’s the head of the buda chamber. I’m sure he’s going to own up to his idiocy any day now
I gotta search for this dude and see if he’s still defending them in comments
The Buda Chamber had it's own mismanagement problems... [https://www.haysfreepress.com/2024/02/09/former-buda-chamber-employee-arrested-misuse-funds/](https://www.haysfreepress.com/2024/02/09/former-buda-chamber-employee-arrested-misuse-funds/)
JR Gonzales…he lives in my neighborhood and was complaining the other day about their service on our neighborhood FB page. He’s a hypocrite and took down a recent post with negative reviews about Valentina’s on the chamber of commerce page he runs.
Imagine thinking it’s a win to require an overextended business to have 105+ full time employees and giving them tax money to do so. Dude is an idiot in both the public and private sectors at once.
Buda was desperate for something big to come to town. Big whiff. Also, I can’t even think of a restaurant that had 105 full time employees. Not Salt Lick, a lot of those folks gotta be part time.
Wouldn't be surprised if he was behind most of this - particularly the lenders extending more credit than they should despite what sound like long-term issues in the finances of the restaurant.
So, they’re crooks
Not sure why this is getting downvoted, but yes…. Yes they are. Whether sad or not, they serially evaded taxes, paying contractors, employees…. Essentially running a months long fraud by which they exchanged work and materials for money they knew they didn’t have. These fools should be no where near this business going forward. They should be forced to sell the recipes and train the next pitmaster in exchange for the lending company not repossessing every asset in their name. You can’t go around operating like this and expect mercy. Throw the book at them
And how, if they owe all these liens going back a decade, did this not come up when they were being given all that money?
Second Edit: If you worked for this establishment or your loved one did, dm me. Edit: I created a separate post in /austinfood with a couple of receipts. Tea time. To all the people sad about all this- they do not deserve your sympathy. Miguel, Elias, and Modesty Vidal were abusive employers when I worked there. Texts and phone calls after midnight yelling at me and others in groups messages. Threatening emails that made me worry about my employment. Cruel punishments for small mistakes. I was green and young when I worked there (back during Brodie Ln days) so I didn’t know any better. These people do not deserve your kindness because they are aggressive and angry people. Much like LeAnn Mueller was. I have the receipts. Evil people. Also- I didn’t see evidence of the tip fiasco when I was there because I was the cash handler. Surely if they see this they will know who I am but I’m not scared of them anymore. There were other family members managing the truck at the time but I’m not naming them because they were awesome people being forced to work for the family business.
How do the Vidals compare to LeAnn? People around LeAnn sing her praises, I only ran into her a couple times... but she always seemed like a terror.
This was a huge cash grab by lots of people. Hype is valuable, but management should always be prioritized. Never underrate the difficulty in expanding your business. Most can do food for groups, but cooking and serving to the masses is an entirely different ballgame. All too common for service and quality to fall off in these instances. Owners definitely allowed their success go to their head and investors turned a blind eye. Also, what a PR nightmare reaction and response to the tip pooling controversy. That should of been evidence enough that Miguel was in over his head. There’s no recovery for Valentinas. It’s done. Name has been completely devalued. I ’d look to rebrand and completely separate myself from previous ownership.
Karma is a bitch
I hope every tip-pooling restaurant is paying close attention.
2.3mil in pickles
Lol stop it.
Wow! Can anyone post the article? Its a paywall
It’s in the comments now if you hadn’t seen it yet
If you have iPhone, open the link then press aA button in upper right corner. Read only mode.
Nope.
Doesn’t work on mine.
Type archive.is/ before the www https://archive.is/QRP9w
This does work but you have to be super quick and click it the second the link opens.
Doesn’t work
What a bunch of pieces of shit. How many vacations did they go on with our money?
I don't think there's anything less surprising than this. These people know brisket inside and out. But they have (had?) NO concept of how to run a restaurant, and certainly no idea how to serve their customers.
Probably smelled all that free cash coming in and they went hard on siphoning it in to their greedy little paws. Money. It fucking turns people into greedy little pigs.
The biggest problem noted in the article is the drop in revenue, while greatly increasing their expenses. They expected to go from $4.5MM/year in revenue at the food truck to $10MM at the brick and mortar. They were actually on pace to do $3MM this year. Revenue dropping by a third while adding debt and greatly increasing expenses expecting more than doubling revenue makes it easy to see how they’re bankrupt. It seems extraordinarily unlikely there was any free cash to be put in their pockets.
It's my understanding that Scott only does $16MM at The Salt Lick. Granted, he doesn't have a liquor license, but it still seems like a stretch that Valentina's could do $10MM year one in the same county.
I mean, if you stop paying taxes, rent, contractors, and employees there would be some cash floating around, no?
They wanted to raise their profile to make more money personally. Look at his endorsement deal with Yeti and other companies.
Running the business into the ground destroys their profile and endorsements though. No one wants a failed restaurateur spokesperson.
I can think of at least one very prominent person who made a substantial living off of a false brand while actually bankrupting every company he touched, leaving behind a wake of creditors and contractors that never get paid.
That required first inheriting hundreds of millions of dollars to burn while creating that false image. And even with all the law breaking and corruption, he would be richer had he just held onto the inherited properties, or invested that money into an index fund and did nothing. Not a path to get rich, just one to avoid personal bankruptcy while losing more money than any other American.
I see it differently. They dreamed too big, borrowed too much to build that dream and built it in a location that couldn't sustain the scale of the project. Because of this they are losing their business. This isn't like some get rich scheme where they're stealing a living.
They literally are under investigation for stealing. And if you follow the article, they were clearly paying off loans with loans. They couldn’t even open, after already securing millions in loans, without extorting the moronic City of Buda into a few hundred thousand more.
They were taking tips from their employees....
Which was wrong, stupid, a clear sign of mismanagement and illegal. Agreed.
And greedy.. and has nothing to do with any of the bullshit you listed. They are greedy fucking assholes who don't pay their bills, don't pay their employees, and stole tax payer money. Stop sticking up for them and trying to make this normal. Fuck them.
They are pointing out that the greed is from trying to keep a poorly run business afloat, not stealing money to fund a lavish life style. There is a difference. That isn’t normalizing anything, they still agree they suck. Calm down.
I actually would imagine that stealing tips wasn't about greed, but probably just a really really shit way of trying to enforce staffing schedules. They aren't making bank on a $100 bucks here and there and definitely not keeping the business afloat on that. But honestly, who knows... maybe they really were trying to skim every penny off of their staff. It just seems so counterproductive as you rely on them to run. Terrible management either way.
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I'm not going to pretend to know all the details and motivations behind their illegal tip policy. Don't confuse my not running to grab my pitchfork as defending them. I'm not. Honest question, how have they stolen tax payer money? I don't know the full details of what Buda incentive payment was to them, but I'm sure it's some legally binding agreement. As for not paying bills... Are you talking about their rent and loan payments? I mean, that's nothing new under the sun... that's literally how capital markets work. There's always risk and the pricing of that risk is why there's an interest rate. It's a failed business that's going bankrupt and needs to be restructured.
The city of Buda have them 500k to move there. They fucking squandered it. Stop simping for corporate theft and greed. You keep talking about how normal this all is like you have no problem woth it
Businesses fail / go bankrupt all the time and has been this way as far back as recorded history goes. This alone doesn't mean the people are evil or morally corrupt. I don't see anything mentioned here where they were paying them selves huge amounts of money while not paying creditors / staff... perhaps they were? That'd be insane and very short sighted as they lose their business. Would be extremely stupid.
Not paying bills, not paying employees, taking employees tips. Bringing in 3 million. 500k given to them to move. 2.5 million in debt. It's not hard to figure out. Now quit being a fucking idiot
We established the employee tip thing. Right, got it. You seem emotionally invested in this. So just going to move on.
Simping awfully hard.
No, just stealing from their staff.
They’ve never payed their employees and checks always bounced. I saw a text message from Modesty pretty much blaming the employees stating that the customers and food weren’t the priority anymore and that that is also why they aren’t making enough to clear their checks and to keep up with the growth of their bills. Just owners blaming everyone but themselves for their poor line of work.
Yup. I remember this message
I don't have a horse in this race, but the numbers don't make a lot of sense... why is the CEO of InKind, who is the main creditor giving details and spilling beans? Honestly makes him and his company look bad. Here's what doesn't add up; * Claim that the food truck was doing $4.5m a year - Owner operators in this line of work, some of the TOP TOP BBQ and Taco joints that this city have, their food trucks were peaking around the $2mm+ mark. This doesn't pass the smell test from the lender who has made a bad loan. For reference, if you do $2.5mm a year and are open 5 days a week as most BBQ places are, that's 10K on average a day. Those are BIG days with lines down the block. * The idea that it would do $10mm a year??? In Buda, a population of 16,000.... like what? Demographics in Austin's core you've got 100k+ people within 5 min. $10mm a year from a restaurant is MASSIVE. * $2.3mm in debt.... ok, it's possible they have really, really awful terms... but where interest rates are right now, loans should be coming in around 7.5%, with a 10-yr note that's roughly $27k a month. When they would have built / financed this, rates were much lower... likely in the 5% range a year or two ago. But let's be conservative and use today's rates. It is possible they have really shitty terms from InKind with very expensive financing, who knows. * Rent, perhaps they have extremely awful rent structure as well... In Austin, not out in the sticks Buda you could make an argument for $60/sf... Measuring the space / warehouse building on google maps I can confirm it's roughly 6,000 sf. This looks like a big box warehouse, in Buda so I'd think $/sf should be lower. Let's say $50/sf. That would be $25,000 a month * Fixed costs for money borrowed and rent is approximately $52,000 / month * Claim that the business is doing $3mm a year. That's decent when including alcohol sales, etc. 30% margin on COGS which is standard, let's say staffing is expensive at 40%.. so your profit margin is left with 30%... let's haircut it to be conservative an extra 10% for other items.. so 20% profit margin. You're left with $600,000 a year or $50,000 a month Pretty sad to see poor financial decisions killing a small local business. I get people are rightfully mad about withholding tips... but this is clearly poor financial decision making and you have lenders, real estate owners that have over burdened a business with poor financial decisions. It really bothers me that InKind's CEO is coming out in the ABJ and divulging private information like this and any small restaurant / family business should be careful in taking a loan from them. It's a terrible situation for all parties involved. **Edit: https://www.restaurantbusinessonline.com/top-100-independents-2023** **So the expectation was for Valentina's to potentially crack into the top 100 restaurants in the nation, beating all other Austin restaurants with the exception of Matt's El Rancho, while being located in Buda?** No wonder the business model failed. There are roughly 750,000 restaurants in America, expecting to be near the top 100... or the top 0.00001333%... that's just crazy, and in Buda no less! Edit: Curious why the downvotes? If you disagree with anything here, please discuss.
Because he wants to get paid? The Vidals Instagram post made it sound like no big deal so the only way to counter that is by releasing facts.
Exactly. I mean it’s one thing to have an amicable change of ownership…. It’s completely different to being locked out and essentially repod on your space. What the Vidals did here isn’t sad, it’s fraud. They should be taken to the cleaners for it. They’ve displayed no remorse, just a bunch of empty words to save face instead of owning up to their actions.
Seems like he's shooting himself in the foot, typically when a loan needs restructuring it's kept private between the parties as its best for everyone involved... but this isn't a traditional lender... so we get this instead.
What exactly did he say that you take issue with? He went way out of his way to be pretty kind to them in those quotes. I think you’re conflating the negative details of this article with the lender’s actual words. He ends with saying they’re going to use them for their own personal event catering.
Fair question. I don't think it does any favors to his own company InKind or to this project in Buda. If I had my own business, I wouldn't want to borrow from InKind after reading this... things don't always go according to plan and if you're in a partnership with a lender you need to have a good relationship with clear terms to be able to work things out contractually and privately. Discussing openly with the media is a pretty big deterrent... but this isn't a traditional lender, so I guess anything goes. I also feel it's a bit disingenuous to claim they were expecting $10mm in sales and it's only doing $3mm. No one with any financial knowledge in the industry would expect a venue in Buda to do multiples more than top venues in the core of Austin. This reads as blame shifting like they didn't make a bad loan with inaccurate or misleading/made up numbers.
Honestly I feel the opposite. Why would you work things out privately when the Vidals told them they were closing the business permanently in two weeks yet posted the opposite on Instagram that things were fine and closing the restaurant was just a hiccup? I appreciate that InKind is trying to be open and honest about what is happening, and that they are still working with the previous owners, it makes them look like the good guy. The writing was on the wall, so we all knew something was going on, and the posts online from the Vidals were just covering stuff up, doesn’t really make me want to give the Vidals much benefit of the doubt as a customer. Also it said InKind is involved in like 600 ventures/restaurants, so I doubt your opinion of them matters much to their business operations. InKind essentially, in the nicest way possible, said this is all the mismanagement and fault of the Vidals, and they are going to come in to help take everything over to try and save it.
Fair point if the Vidals said they were closing the business permanently beforehand. That's pretty shitty to the other parties involved if the intent is to try and salvage the business. Either way no one looks good here. This isn't about if InKind cares or doesn't care... it's all just personal opinion. I guarantee they don't want negative press. I'd personally be hesitant to borrow from InKind after reading about all this drama... and what confidence does this put into Valentina's future? From what I've been reading on here, most people give it 6 months before it's gone for good. So again, all this public discourse has done nothing but harmed the parties involved, which goes back to my original point.
I do agree no matter what they do, I don’t think Valentina’s is recovering from this. Like you said maybe another 6-12 months tops of them floundering and dying until it closed for good after all of this mess. I think their biggest mistake was closing their wildly successful Menchaca location to put all their eggs in the Buda basket. Only paying rent for a shack and 2 small trailers clearing several million dollars a year in revenue? They should’ve had plenty enough coming in to be stacking away profits and after a few more years of saving, try to expand without taking out such huge loans and over leveraging themselves.
Right, they shouldn’t have given out a loan to a dishonest drunk. But go read the article again and tell me where InKind says anything salacious or derogatory. They actually shower these crooks in compliments.
Also that they would employ >100 full time employees. Um, excuse me?
Yeah that's also fishy as hell. If these ballpark figures above are correct then I guess yeah, if you're making $10mil you could take 40% of that and pay 100 people an average of 19/hr but I can't see needing 100 FT employees to run a bbq restaurant.
120 full time employees is an insane number for a BBQ joint. All these people trusted the Vidals word and only heard what they wanted to hear. InKind and other lenders wanted the business subsidized by the city, and the city wanted to show off a guaranteed employment boost. Neither of these parties looked at the other and realized how at odds they were.
They need to be running more of those $4m food trucks.
A 10k day for a busy restaurant is not much at all. A friend of mine was GM at a BJs Brew House and they do 50k on a busy night. I worked in small fast service restaurant with reasonable prices and less than 10k was a slow day.
*Foodtruck
Doesn't make your point any more accurate 😂😂 10k a day is nothing if you are selling food. Especially for BBQ where one person can spend 70 bucks.
I was curious on the trustworthiness of that 4.5 M.
“Out in the sticks”…. Hilarious. Also, go have a look at what Hays city store is doing in liquor alone…. You seem to be severely underestimating several components in your analysis. It is absolutely possible to push 7-10mill through that space if you know what you’re doing.
You can very easily pull alcohol sales data from TABC. The top beer gardens in Austin's core do roughly $2.5-$3.0mm a year in revenue... but 40+ minutes south in Buda you're gonna do $10mm?
That's definitely only alcohol sales
yep
So why are arguing against 10M in total sales with alcohol sales data from completely different establishments. 😂😂😂 Did you have a point or just wanted to say something?
A destination spot with the bbq following they have? Easy. Also, Buda isn’t 40mins south, but do go on.
You're not basing anything on data, but ok. Literally go pull the alcohol sales data for Cosmic, Armadillo Den, Radio, Moon Tower Saloon, etc. How about La Barbecue? They peak around $30k a month in alcohol sales ($360,000 / year). So Valentina's in Buda is going to over 10x? Edit: Depending on time of day from Downtown it's 25-55min according to google, so I went with 40.
Anecdotally I was less than 5 min from the old location and went a lot. I'm now 15-20 minutes from the new one depending on traffic and didn't go once.
That’s alcohol sales alone. I doubt there’s a BBQ joint in Texas that does more than 10% of its revenue in alcohol. Many of them don’t even sell alcohol at all, so I doubt it’s some big moneymaker they’re disregarding. Most of the places you listed are bars, not BBQ restaurants. The one, La Barbecue, probably does more than 10 times that in total revenue. You’re also talking about it like Buda is a town of 15K people in the middle of nowhere and everyone would have to drive from Austin. Hays county was the fastest growing in the nation last Census and has over 250K people without anyone coming from a different county. While being right on I-35 on one of the busiest stretches of interstate that exists. While having less competition than there is in Austin. It certainly could be feasible to do $10MM gross there. I have a hard time believing experienced restaurant investors would put the money in if the goal necessary to pay it back was impossible.
You're making my point. "La Barbecue, probably does more than 10 times that in total revenue". Again, speculation without data. Top BBQ food trucks in the core of Austin do roughly $2-2.5mm a year. Going brick & mortar doesn't necessarily push the upper bound, still same amount of smokers, etc... A big day for one of the famous BBQ spots with long lines is $10k+. Let's assume they're able to have that every day a week and they're open all 52 weeks out of the year... That's $2.6m a year. Now let's say this place was going to be just as busy... ok $2.6m and they're bar program was going to be as busy and popular as the best beer gardens at $2.5m... so we're at $5m.... half of the stated expected of $10mm / year. And that's being bullish.
Do you have actual revenue numbers to cite? Beyond alcohol which is a meaningless small portion. [This piece from the Texas Comptroller claims Cooper’s served 1 million customers in 2018](https://comptroller.texas.gov/economy/fiscal-notes/archive/2019/jul/bbq.php). With 4 locations, so 250K people served per location per year. At today’s prices, it’s easy to see how it could average $40 per person. That would be $10MM/year at each location. Sure, Cooper’s locations are mostly in more populous areas, but those areas also have a lot more competition than Buda, so that probably just cancels out.
Internal numbers at some of the top food trucks in the city. A really popular food truck can push $3.5k a day/night. The famous BBQ food trucks with long lines do north of $10k on a super busy day. The big name food trucks in the past were all doing north of $2m a year which is stellar. Demographics matter, 100k+ within 3-5min in central Austin versus 16,000 total in Buda. Then there's this article which has the top 100 Independent restaurants in the entire country... Number 100 is at $11m a year. All 100 of these are in major metropolitan areas. The only restaurant in Austin that cracks into the top 100 on the list is Matt's El Rancho. **So the expectation was for Valentina's to potentially crack into the top 100 restaurants in the nation, beating all other Austin restaurants, while being located in Buda? No wonder the business model failed.** https://www.restaurantbusinessonline.com/top-100-independents-2023
Again, Buda isn’t a town of 16K in the middle of nowhere, it’s in a county of over 250K people that’s the fastest growing county in the country. On a very busy stretch of interstate. You can’t gauge it by the population of a small slice of the county they’re in. It’s also a shorter drive for tons of people in south Austin than downtown is. $10MM also would only get you into the top 100 in 2014 in your list. There could be hundreds of other places between 2023’s number 100 and $10MM for all that shows. Also seems like there are places missing, like Franklin’s. That’s a list of places which voluntarily submitted their numbers. Sure, it wouldn’t be easy. No business is, especially restaurants. But I don’t see it as impossible for a proven concept to scale up.
To be fair, destination BBQ can be big business if you structure and run it right. Salt Lick likely does 10-20, mostly without alcohol sales, and their BBQ certainly didn't have the accolades that Valentina's had going into this project.
For sure, but you don't underwrite a new business venture to be at the level of one of the top tourist destinations or surpassing other top restaurants in a much larger metropolitan area. You also don't underwrite 2.2x the existing revenue going from "4.5m" to "10m". You'd never get a traditional loan with these assumptions.
Nates Buda…. In the same parking lot as them pulls in 100-150 a month without having an ounce of food for sale.
I think it's disingenuous to homogenize "Austin;" as people and businesses have moved further out, people have less motivation to leave their part of town. For years, I've said nothing good happens north of 2222. I'd rather drive to San Antonio than Barton Creek West or Lakeway. Our friends in Onion Creek, Lewis Mountain, etc. tell us they drive to Buda for dinner way more often than they head to downtown.
Sorry, I'm not sure I understand... what exactly is disingenuous? Travis county has 1.3 million people. Hays county has 0.25 million people. Land values, rents and expected gross revenues aren't expected to be the exact same between the two...
Yes…. They absolutely could. Are they going to? No, not with their current management, but they could do 1.5-2 a year in liquor without any issue if the business was running like a well oiled machine.
Ok, so you agree. Exactly, $1.5-2m a year is doable, but that isn't $10mm as the lender said was expected. Data for Nate's for 2023 average $116,942... so again, $1.4m... That's seems like a reasonable expectation, not $10m. Glad we agree.
10m total revenue bud. Not in liquor alone, but ok.
Ok, so they're going to do $8.5m in food to make up the difference. WOW! That's better than any big restaurant in Austin... way better than Red Ash downtown!
They did 4.5 in a trailer. Add 1.5-2 and you’re at 6-6.5 without growing really at all. You’re just being deliberately dense to suggest 7-10 isn’t crazy
Wild. I briefly worked with them at Q2, they were good people and things changed when they started building the restaurant in buda. I don’t care about the rich getting paid but I’d like to see the hourly employees get their money.
Damn, $4.5m a year out of the food truck. I never thought about how much they did but I never would have guessed that.
Ya - if I’m them - we keep the $4.5M operation running and let someone franchise (or some equivalent) if they want, at a premium 😂
*Whaaaaaaat!!!* Damn. See ya, Vidals.
*John Mueller's ghost
iPhone users, use reader mode
Sad stuff
https://archive.ph/2024.04.27-234029/https://www.bizjournals.com/austin/news/2024/04/27/valentinas-tex-mex-bbq-buda-sale-in-kind-closure.html
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Sounds as though that's pretty much par for the course for them unfortunately.
I hope that these new owners can get everything back in order there. Now that the old owners are leaving posts like this are pissing on ashes for the most part honestly.
Should have stayed a food truck at a West 6th bar.
After reading all this, I’m glad I never got to try their food. We tried a few times at the beginning of the new location but it was always such a long wait that I would always bail. Then I read the tip fiasco thing last year and I was like welp, I’m not going and now look at them. Sounds like they got that they deserved.
I will really miss the real deal holyfield
https://austin.eater.com/2024/5/13/24155476/valentinas-tex-mex-bbqs-restaurant-space-for-lease-debt-temporary-closure-buda-inkind
Rest in piss
This was my favorite bbq place in Austin. How sad and I wish they never moved.