It is damn near impossible for any chef to single-handedly fund a restaurant’s development. Many must get hitched, in the business sense, in order to see their dreams come true. To understand how difficult it is to find a good match, do a Google search of chefs and business partners. There’s an endless stream of stories of famous and not-so-famous chefs involved in bitter legal battles. At root they’re all about the same thing—the partnership wasn’t right.
Richie Nakano’s business partner was from the tech sector and had a long list of accomplishments at companies like Amazon and Facebook. It’s unclear if he had previous business experience in restaurants.
In return for the cash injection Richie Nakano sold his soul. He signed away the rights to the Hapa Ramen name and brand, a business he’d been building since 2010. Those terms should make a chef nervous. They should make their legal counsel nervous too. I wonder if Richie was advised that his talents were business assets? That the life he breathed into Hapa Ramen had value?
The unraveling comes early and begins with profitability. Four months in to the venture and the investor’s looking for return. Was he expecting the same fantastical profits he’d experienced with online start-ups? Restaurants don’t work that way. Covering expenses and paying down some of the capital costs in the first year is a triumph. Unrealistic financial expectations would have backed Nakano and his artistic integrity into a corner.
Deborah Blum, restaurateur and advisor to the tech investor, pointed to Nakano’s social media personality as a pivotal issue in rapidly deteriorating relations when Nakano publicly challenges a mediocre review by a well-established San Francisco food critic. His reputation as a straight talking chef was part of the Hapa Ramen brand; it's not a sudden shift in character. Shaming Nakano is a weak attempt to evade responsibility. But there’s something else in her finger wagging. Could it be that the investor (under poor advisement) didn’t practice due diligence in researching his investment? Were the financial accounts for Nakano’s market stall and pop-up events reviewed? Did the contract specify Nakano’s obligations to balancing the books? Was that tied to bonuses or penalties? It seems that the big pile of cash didn’t come with a whole lot in the way of restaurant business grey matter?
I’m reminded of a story told to me by a successful female restaurateur. Before striking a deal, she and her potential partner had a lawyer take them through every possible worst-case business scenario. She described the experience as traumatic and told me it struck fear into both of their hearts. They signed a deal and their restaurant partnership lasted more than 30 years.
I suspect it was a less rigorous, more optimistic beginning for Nakano and his partner. As a chef, I stand with Richie. I’d like to wave a wand and restore his dreams. I wish he’d found someone with business talent to match his own.
What remains between them is a lifeless brand. I hope that after the grief, something new comes. I’m sure that the mind that created Hapa Ramen from scratch can create more and next time he’ll know the value of his soul.