Forget the Remember

Published on Monday, 06 September 2010 19:56

Written by Plain Speaker

News that Rochester, New Hampshire’s Remember When Diner is to be auctioned off later this month is par for the course. I shed no tears for the demise of any Starlite — especially one promoting the awful Doo-wop 50s Elvis /Marilyn schtick.

The fact that a Starlite has failed is of little interest. However, what is noteworthy is the diner operation — the numbers. Once again, there’s that $1.1 MILLION figure I’ve discussed and calculated so many times in the past few years. Had this diner been installed in a place where land is more expensive than as in rural NH — say, in a city where every aspect of setting up a diner costs more, one should add another $300K — $400K to the pot. Alas, once again we’re at the magic $1.4 — $1.5 million figure we now quote. As it is, the $1.1 million outlay fig for a 45 – 70 seat diner is an unsustainable scenario in 2010.

We don’t have any generic sure answers to this very big and growing problem. But we do know there is trouble on the horizon for vintage diners. Unless people are willing to pay $12. for breakfast, $15. for lunch, and $20. for dinner, the concept of buying a vintage diner, moving it, building a new back building, restrooms, prep kitchen, all new equipment, satisfying ADA, local anal P&Z, health dept., toxic and hostile neighbors, taxes, staffing, insurance, employee heathcare costs, overbearing sign and esthetic rules, etc. — operating a new-old diner on this scale is borderline no longer doable. Not financially feasible any more. Possible, yes, but not likely to succeed over the long haul 5 to 6 times out of 10. These are very grim statistics. Less than ⁵⁰⁄₅₀ survival rate. Bad odds.

I imagine this auction is going to be a crazy fire sale. The assets are going to be sold off for 10 cents on the dollar. If there isn’t a local buyer, that Starlite is going to sit empty. I doubt anyone would buy that and move it. Perhaps the operator will buy it back for half of what he owed on it. That seems to be the way things are going these days with housing and business real estate. ie: Miss Adams had approx. $300K in paper debt, and sold for $86K.

Beware of the street person wearing only a London Fog trenchcoat and flashes you saying: “Hey buddy, wanna buy a Starlite… cheap?”

Jeez, with a website as nice as this, I just don’t know what went wrong…