Guy Fieri Should Put A Good Restaurant In Times Square

A blog about business and economics.
Nov. 14 2012 11:15 AM

Economically Speaking, Guy Fieri Should Put A Good Restaurant In Times Square

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Personally I'm a fan of Guy Fieri's TV shows but have never been to any of his restaurants. According to New York Times restaurant critic Pete Wells his new one, Guy's American Kitchen & Bar in Times Square is terrible. Personally, I'm eager to check it out and perhaps mount a Slate-y defense. But for now some thoughts on the basic economics of the situation.

When you hear about a restaurant in Times Square your first thought should be that it's going to be bad and your second thought should be that as a best case scenario it'll be hideously overpriced. The reason is that the location is obviously a focal point for tourists and business travelers, i.e. people who aren't going to be repeat customers one way or another. To get a good deal in restaurants what you always want is a place whose business model is mostly based around a fixed population of regulars but which is still new enough that it wants to appeal to venturesome diners in order to get the regulars in the door. In Times Square it's just not going to happen. You're doomed.

But something like a Guy Fieri flagship restaurant should, in principle, be an exception to that trend.

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The reason is that Guy's American Kitchen & Bar is not a very large element of the Guy Fieri business empire. He's primarily a television personality, and he also runs a couple of chains of restaurants primarily located in unfashionable tons in the western side of the country. Which is to say that he's actually ideally positioned to run a Times Square restaurant as a brand-enhancing loss leader. After all, alongside the ripoff eateries one of the main things that you see in Times Square are tons and tons of advertisements. Giant billboards and neon signs building brand identity and brand awareness for different companies. And there'd be no better advertisement for Brand Guy Fieri than a Times Square restaurant that people living all around the world visit and walk out of as satisfied customers who feel they had a good meal at a good price. It'd be well-worth running a restaurant like that even if it didn't make any money at all, purely as marketing vehicle.

Fieri even seems to have set himself up ideally for this strategy precisely by not opening a branch of one of his other chains there. Johnny Garlic's and Tex Wasabi's are supposed to make money, and so they should. But a one-shot Guy's American Kitchen & Bar in a high-profile location should just exist to offer them cross-subsidy. If the restaurant really is this bad, that's a blunder of a business strategy. It should be great and he should invest whatever it takes to hire the personnel he needs to make it great.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.