Even a visit from Guy Fieri and an incredibly loyal customer base can’t protect some restaurants from the realities of the food business.
When you don’t own the building your business operates in, you lack a clear level of control. Most restaurants sign longer leases. In many cases, five years, with an option for a second five years at a negotiated price increase.
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In those circumstances, a restaurant has some level of cost certainty. Rent is often the largest expense (although labor costs can sometimes be), and having it locked down for a decade make it easier to make decisions.
When leases end, however, many restaurants find their landlords wanting increases that make their business model no longer viable. Most eateries can raise prices 5-10% every few years, but any more than that and they scare their customers away.
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If a landlord wants a 20% increase (or even more) that can force an otherwise successful business to have to close. Sometimes, the restaurant might find a nearby location, but moving is expensive, and losing your lease usually means the end for most restaurants.
That’s essentially what happened for a popular Phoenix taco restaurant despite support from Guy Fieri on “Diners, Drive-ins, and Dives,” and an outpouring of customer love.
A spot on “DIners, Drive-ins, and Dives” brings a lot of customers
Image source: Ethan Miller/Getty Images for Caesars Entertainment
Popular taco spot melded traditions
Every city seemingly has dozens of Mexican restaurants and many have unique takes on the taqueria. Some of these offer takes from less-known regions of Mexico while others bring global traditions to the taco.
CRUjiente calls itself “a rebirth of Latin cuisine. A modern taqueria with an inventive interpretation of Mexican street tacos,” according to its Facebook page.
It shares a much deeper explanation of its mission on its website.
“Founded in tradition and intermixed with imagination, CRUjiente Tacos is a modern neighborhood taqueria in a lively intimate dining and bar space that interprets the evolution of tacos with redefined renditions of the classic Mexican street taco,” it shared.Â
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The eatery offers a classic menu that also bring in items like Korean Fried Chicken. That was one of the inspired menu items that brought Fieri to visit to feature the restaurant on “DIners, Drive-ins, and Dives”
Innovation, however, does not pay the bills. In fact, even being popular, and having a large fan base are sometimes not enough.
CRUjiente forced to close
When CRUjiente co-founder Rich Hinojosa shared in April that the restaurant had to close, something magical happened.
Fans of the eatery rallied and formed long lines to get one last taste of the food Hinojosa made as executive chef. That support allowed the restaurant to negotiate a short extension with its landlord.
In the long-term, however, the math did not make sense.
Hinojosa said rising rent costs are forcing the restaurant to close when their lease expires at the end of April. He told Arizona’s Family his landlord wanted to raise his rent more than 30% starting in May, along with yearly increases after that.
That was more than the business could bear and Hinojosa was wistful and appreciative about it in his statement to the online magazine.
“You get to be part of people’s lives for a couple hours at a time. For a lot of our regulars, it was a couple of hours, a couple times a week every month, which was really nice,” he shared.
Despite the fan support, there will be no miracle for CRUjiente as the landlord has not opted to revise the lease terms or offer another extension. The restaurant will officially close after dinner service on May 31.
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“Hopefully, this is not the end of our story,” the restaurant shared on social media, but Hinojosa made it clear that he has no miracle ready for his staff and customers Â
“I don’t have anything in my back pocket. I wish I did,” he told Phoenix New Times. “Somehow, I hope, I pray, we’d love to continue. I never felt like CRUjiente had run its course.”
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