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Repeatable Success in the Restaurant Business: Union Square Hospitality Group

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The Food and Beverage (F&B) industry is a cruel one, notorious for its high staff turnover and slim profit margins. Most new restaurants fail. Despite this, Danny Meyer has made a name for himself as a famed restaurateur and CEO of Union Square Hospitality Group (USHG). And he has opened successful restaurants not once, not twice, but many times, to the tune of a multi-billion dollar outcome with Shake Shack. What does Meyer know that most other restaurateurs do not? And how did he learn to do what he does so well?

Meyer was born in 1958, to two relatively well-off parents. The pair was fascinated with French culture, and initially lived in France before moving to St Louis, Missouri. Even so, they brought the culture along with them, often hosting parties for friends and colleagues from France, Italy, and Denmark. They also took the family on vacations to Europe every year. It was during these vacations that Meyer first became ‘immersed in the unaffected, timeless culture of gracious hospitality represented by European restaurateurs and innkeepers.’ 

Meyer’s dad, Morton, worked in the army, but ventured into entrepreneurship after the move. Although Meyer admired his father for this, the family later underwent a painful period of time when he went bankrupt. Meyer, 14 years old at the time, was shattered seeing his childhood hero fall from his pedestal. Fortunately, his dad had enough support from his own dad (Danny’s paternal grandfather) who loaned him a million dollars, eventually opening a tour group business called Caesar Associates. Although the family recovered, the incident left a lasting impression on Meyer — something that would haunt him as an adult, decades later.

As a teenager, Meyer’s love for food was already evident — he took cooking lessons in home economics, and often cooked for his friends when they came over. In college, he worked for Caesar Associates, touring in France, Italy, Rome. To him, this was ‘hospitality boot camp’. He had to learn how to connect with people from all walks of life, sharpening his service skills. Thankfully, this had a silver lining — his frequent visits to local eateries kindled in him a love for European cuisine and made him close friends with the staff there. These first-hand experiences of connecting with strangers, and the family-like warmth of the eateries, remained with him as he grew up.  

Although Meyer always had an interest in food, he never considered making it his career. Instead, he went through a period of uncertainty after graduation, exploring potential careers in politics, journalism, and sales. While he initially moved to Chicago to work in public affairs, he later moved to NYC to work in Checkpoint Systems, a small company that his grandfather had invested in. Nevertheless, his passion for food continued — on the side, he explored new cuisines in NYC and took cooking classes from Mediterranean cuisine chef Andreé Abramoff.

Over the next three years, he became Checkpoint Systems’s top salesman and invested his earnings into their stock. But when the company offered him the opportunity to open a new branch in London, he realised that he couldn’t see himself working there for the rest of his life. Meyer ended up quitt ...

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Meyer’s Skill
Cedric Chin
Last Updated: 05 Aug 24

Danny Meyer is interesting to study not because his story is easily replicable in other industries, or even in other locations in the same industry — but because so many elements of his business expertise is legible to those with even relatively little business experience.

There are, I think, two reasons for this:

  1. The restaurant business is a relatively simple one to understand. Unlike, say, shipping, or ad exchanges, food & beverage businesses are something that everyone has some experience with. You hire people to make and serve food, and then you sell that food to diners. Simple. Not easy.

  2. The restaurant business is soul-crushingly hard. Nearly everyone I know knows someone who has started a cafe or a restaurant or a bar and failed. It’s a common experience to have a beloved eatery close on you; it’s also a common phenomenon to observe ice cream shops or bubble tea stores or cafes pop up and die away.

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