This week on the Titans of Food Service podcast, Nick Portillo speaks with Tim Petrillo, co-founder and CEO of The Restaurant People and Urban Street Development. Tim shares his remarkable journey in the food service industry and how he has significantly impacted South Florida's dining scene. With over 70 restaurants under his belt, Tim discusses the unique challenges and strategies involved in running a successful restaurant business, emphasizing the importance of hospitality over mere knowledge. He reflects on his early experiences, from starting as a busboy to working with renowned chefs, and how those formative years shaped his approach to restaurant operations and management. 

TIMESTAMPS

(00:00) Intro

(02:30) Introduction to Tim Petrillo

(12:20) Building a Restaurant Empire: Lessons Learned

(22:42) Transitioning Areas and Mixed-Use Projects

(28:06) Navigating the Challenges of the Restaurant Business

RESOURCES

Portillo Sales

CONTACT 

Nick: nick.portillo@portillosales.com

There are a million ways to make money in the food service industry.

You just have to find one.

On the Titans of Foodservice podcast.

I interview real life movers and shakers in the food game who cut through all the noise to get to the top.

My name is Nick Portillo and welcome to the Titans of Food Service podcast.

Let's jump right into it.

Welcome back to season three of Titans of Food Service.

I'm your host, Nick Portillo and today I continue my journey across America in 50 weeks tour where I'm interviewing one titan of food service from every single state in the country.

On this episode, I'm going to be stopping in the sun in the Sunshine State.

Man, that is hard to say.

Sunshine State, where I'm going to be interviewing Tim Petrillo.

He's the co founder and CEO of both the Restaurant People and Urban Street Development.

He has more than 70 restaurants developed, managed and operated.

And the Restaurant People has brought to life some of the area's most sought after venues, establishing itself as the premier hospitality group in Fort Lauderdale.

Tim, he's also at the helm of Urban Street Development and we talk a little bit about both of these companies.

So Urban Street Development is a unique full service development firm that handles every aspect of development from real estate acquisition to property management.

Their hands on approach sets them apart and as lasting value to their community.

Now, before I dive into my conversation with Tim, I mean, he is truly a titan in the industry and we're going to talk about how he got his start in the industry and how he analyzes deals, how he grows his business, how he manages his business and things like that.

It's a really cool story.

But before we dive into a story, let's take a quick look at what makes Florida's food service scene so vibrant and unique.

So Florida, it has a rich multicultural influence.

It's home to a food scene that is as diverse as it is dynamic.

It has Cuban classics, two fresh seafood spots lining the entire coast.

And the state also offers something for every single palate.

It has iconic dining spots throughout the entire state from Miami to Tampa to Tallahassee to, you name it.

In recent years, Florida has become a top destination for food festivals as well, attracting visitors from around the world to events like the South Beach Wine and Food Festival.

Okay, that's a little brief background.

Without further ado, let's go ahead and welcome Tim.

All right.

Tim, welcome to the Titans and Food Service podcast.

I appreciate you taking time to come on here and meet with me.

Thank you.

Thank you for having me.

Yeah, of course, of course.

I know we were talking a little off camera, you know, you being there in Florida, me in California and the different, the different weather between fires or hurricanes and whatnot.

But I'm excited.

I'm excited about our conversation.

You know, you, as I mentioned, you've really built something of.

It's incredible what you, what you've been able to build and kind of want to talk about how you got into the business.

You know, kind of some of the tips, tricks that you've learned along the way, and essentially how you built the business as well.

I think it's really interesting between, you know, you have the real estate side, you've got your restaurant side and talking about those things.

So maybe where we start off is how did you get into.

Let's start with the restaurant business first.

How did you get into that?

Sure.

So I've always been in the restaurant business, meaning even one of my first jobs, like most people who are in the restaurant business, start at.

As a busboy and things like that.

And that's.

I was 14, worked in a.

One of my father's friends places and I went to school for.

I, I was in school at Florida State University, trying to narrow what I wanted to do.

I was always in the restaurant business.

So I said, you know what?

I really like this.

Let's.

Let's try to make a career out of it.

So then I went to the hospitality program.

And at the time, you know, restaurants are.

It's not, It's a very practical style of business.

It's not a theoretical where you learn a lot of things in the classroom.

Obviously you learn things in the classroom, but doing and seeing and being in it really is the best teaching environment.

So I wanted to.

Tallahassee, it was a great hospitality school at Florida State, but at the same time, there wasn't real access to great restaurants, great resorts, great hotels.

So.

And FIU had this emerging hospitality program that was very well recognized and it was in Miami, and I could get.

I could get real world experience at top places.

So I transferred to fiu and then I was lucky enough to, at the time, Mark's place was the top restaurant.

Mark Militello was the top chef in the, in the county.

I was able to work at his place, become a bar manager.

And.

And then I was going to school for this and I.

All the people in the industry were.

I was Asking for advice of who should I go work for after school.

I wanted to get some structure.

I wanted to get some real big corporate experience.

I, you know, while Mark was doing a great job delivering at a very high end level for a restaurant, it was a one unit operation.

I wanted to see bigger scale.

So, so.

And Houston, which is now known as Hillstone, kept coming up as, you should go work for them.

You should go work for them.

So of the.

So I put my name in the hat for, to get an interview because they come to school, you know, their recruiters come to the schools and try to interview people, and they're only there for one day.

And there was, there was, there was 10 slots.

There was 300 applicants.

And I didn't get, I didn't get slotted to Henry.

But, you know, I always say I would rather be lucky than smart any day of the week.

And I marks, I was a manager, but I also pulled two bar shifts a week.

Excuse me.

So during that bar shift, I happened to be, you know, talking to this one guy.

There was a group of about 10 people that had their own conversation going on.

And I started just chatting with this guy that was alone at the bar at the time, and, and he knew a lot about restaurants.

He was out of Atlanta, and at the time, my brother was in the restaurant business working for another company, and he knew them well.

And I said, gee, you know, you really, you really know a lot about restaurants.

Are you in the business?

He's like, yeah, yeah, I own a couple of restaurants.

I go, what restaurants do you own?

And it happened to be George Beale from the owner of Hillstone.

And I'm like, oh, wow, you know, I love that restaurant.

So Mark knew I was trying to get a job with them.

I went in the back, I said, oh, my God, the owners of Houston's happen to be dining here tonight.

Because, you know, when he went into Miami at that time, he was James Beard winner.

He was top of the game.

Everybody went to that restaurant.

So.

So, you know, Mark's like, did he ask him?

Like, no, I didn't ask him what I'm gonna say.

I tried.

So Mark made the connection and I was hired by Houston's and I went and opened stores for them and learned a unbelievable amount of information from them.

I was, I was, you know, anything they ask, I would say, heck yeah, let's do this and just learn a tremendous amount.

And then I was with them for a few years, and then Mark went and raised a bunch of money to open five restaurants, hired Me back.

And I, Man, I did that.

And.

But I.

With the caveat, my goal was to own my own, right?

And I told him that.

I said, listen, you're gonna get two years out of me and we'll see what we can do, but then I'm going to move on.

And after about two years, I ended up moving on and opened my first place.

And that's kind of how I started doing my fleet.

Wow.

Okay.

I love that.

I love that.

It's always so interesting when I talk to people that how do they get into this business?

Some people were born into it, right?

Familial ties, or some people just kind of accidentally got into it.

But you were.

I mean, your time in college, it seemed like, hey, this is something that I want to do.

What I didn't tell you is that my grades were so bad that because I was enjoying FSU too much, that my options were somewhat limited.

Okay.

There wasn't a whole lot of opportunities for me to get into great school, business schools and things like that.

So I had to fall back on my strengths, which was the restaurant business.

That's all I knew.

So, you know, I can.

I feel that, you know, going through school myself, I.

I used to think, like, there's people that are really good at taking tests and memorizing things and not my thing.

You know, I.

Give me.

Give me a presentation, I'll give you a presentation.

I can, you know, off the cuff and I'll wing it, but outside of, you know, getting good grades on tests, it's not my thing.

And, you know, but that's a very interesting point, because what that taught me is that we do not hire for.

We hire for hospitality.

We do not hire for knowledge.

Okay?

We can teach you what we want you to learn, but at the end of the day, if you don't have the gene that wants to innately take care of people every day, then we can't teach that.

That's a thing that's in you, or it's not.

That's right.

That's right.

Yeah.

And going through school, too, let's say that the teacher gave you homework to read certain pages of a book, and then you know that they're going to call on you the next day, and I'm not prepared.

It creates.

It made me adaptable, Right?

Because I knew I'm going to get called on.

I don't know the answer because I didn't do the assignment or I didn't do the work, and how do I kind of finagle it.

To, you know, come up with something.

You know, my brain started to think like, how do I think on the fly?

Right.

Same thing in hospitality, customer service.

Customer gives you a, you know, feedback or a negative review or something.

Like, how do you adapt to that on the fly?

And that's a very important trait that, that unfortunately, hard to pick that up when you're in the interview process because people, those types of pressures, people, people react very, very differently.

And you know, the, as you know, the hospitality business, restaurant is.

It's very chaotic.

Okay.

Every day, even though you have systems and things in place, it's never the same.

Okay.

And you have to be able to adapt and not get flustered or, you know, because that can be, you know, it's chaos.

It's controlled chaos.

That's right.

So in your time working with Mark, working at Hillstone, did you start to, you know, working in those businesses, did you start to develop kind of a background maybe?

I always think like, you know, if you look at business as a whole, running a business, that there could be a formula and sometimes you learn a formula and then you can transfer that into, you know, starting up your own business.

Did you kind of learn that there?

Or was it when you started up your, your, you know, your new venture when you started, it was kind of like, hey, I'm jumping out of this airplane trying to build the parachute on the way down.

Well, so when I was, I was very young when I went to go work for this way, I was 25 when I opened my first restaurant.

So all that happened between, you know, really 19 and 24 with marks and Hillstone.

But you know, what I recognized is Houston, Houston's does things at a very high level.

Okay.

And it's a very straightforward type of menu and it's very approachable.

People recognize it, that kind of food things.

What I recognize going to work for Mark is that his food is so elevated that some people get intimidated by that and they don't experience it because they just don't understand it.

Right.

So I wanted to kind of my first restaurant, what we did is we melded the two where we had a very approachable environment, but with very higher end styling of the food.

Right.

So it was, and it was geared towards at the time, my demographic, which was the 20 year old.

So we tried it.

We had to, we had to make it resonate with them, but still be able to deliver on the experience that people who go to fine dining restaurants have and who have never been.

They can understand.

That was, that was kind of the thesis of the first restaurant.

And fortunately it went very well.

And then we just kind of started rolling.

How did you finance your first, your first restaurant?

So, so that was the three Fs.

Friends, family and fools.

Okay.

I, basically, our first restaurant.

So Alan Hooper, who is my partner, and Peter Belucas.

Peter was the chef at one of the restaurants that Mark had.

And he was, he was first off a super talented guy.

But he, you know, there's a lot of talented chefs, but they don't have the business side of it.

So they create this dish that cost, you know, 80% food cost.

While it tastes great and looks wonderful, you're not making any money on it.

You're going to go out of business.

Peter had that balance.

So we, we all partnered together.

We each put in $35,000.

Okay.

And then we raised another 75,000 through friends and family.

Okay.

So our whole restaurant, our first restaurant, we did all the work.

We did all that stuff.

Like, Alan Hooper was a general contractor.

He was in charge of building it.

We, we were there to help do what we could.

Right.

Paint and whatever we could.

We didn't have any real skills trade wise, but we could help, whatever.

And so we opened that restaurant for about 150k.

Okay.

Back then.

Nice.

Which is significantly different than what we open now.

I wish you'd go back.

Yeah, yeah.

Looking at your place, I would imagine 150,000.

Maybe they, you know.

Yeah.

The Instagram moment.

Now, these days, you know, that's right.

As you continue to, you know, scale out your business, open more units, did you always, did you start, did you continue to fund it between yourselves or did you start opening up to a larger pool of investors?

No, so we opened up to a larger pool.

Well, so it's like, okay, so your first one is your hardest one because no one knows you, you know, you're living on somebody else's reputation.

Right.

Like, listen, I ran Marks, I ran Houston's.

That doesn't mean I own those.

They're very different.

Right.

So you need to build your own reputation.

And that's what we were doing.

And we were fortunate because we got, we got really.

We were well recognized from the critics standpoint and we were well recognized from the local standpoint.

So we were becoming well known and it was much easier to go out and do the second restaurant and raise capital for that.

And then once we got to three, we had family offices start to take a look at us and say, hey, you know what?

Maybe, you know, and then we were able to have build Relations with these family offices that had.

Had, you know, more means to invest in us to do more restaurants.

And that's kind of how.

How it happened.

I've been fortunate.

I had a.

One of my.

He's a dear friend now.

He's a mentor.

His name is Steve Helmos.

He.

He.

It like right after we started building our second one.

We were very fortunate to connect, and we, you know, he just took a liking to us and what we were doing, and he.

He provided not only capital, but he provided strategy.

And, you know, when you're young, opening businesses, it's not what you know that hurts you, it's what you don't know.

Right.

That kills you.

And so he was a great sounding board, helping us with strategy, just kind of helping us not fall over our own self.

Right.

And, you know, a lot of times the deals you say no to are the best deals you've ever done.

Right.

And he kept us out for.

He kept us on the rails and focused and really just provided not only capital, but introduced us to other family offices and things like that.

Yeah, that makes sense.

And to this day, he's still our.

He's.

He.

He's.

He's a partner with us.

He's.

He's our.

He's our largest financial partner.

He, you know, we share offices now.

It's.

It's been a great.

And it's been 30 years.

Wow, that's incredible.

How does the deal look like?

You know, essentially, when you look at the restaurant, right, and running it like a business, you have investors that you.

When they.

When you approach them to say, hey, you know, could you be a, you know, maybe some sort of limited partner or some sort of partner in this business?

What does the deal look like for them and how do they.

How do you return, you know, their capital?

So, you know, we are one thing that unfortunately, our industry, it has a bad rap when it comes to putting investing dollars in one because it's such a high risk.

And, you know, 90% of restaurants don't last two years, right.

So that's a huge hurdle to get people.

So people typically like to invest in these assets for the wrong reasons, right?

More of their.

Their ego, more of their, you know, the, the.

The.

What we call the emotional return, being able to go in and entertain people.

And we love that.

But we want to make sure that you understand that this is a business.

It's not a playground that.

That we will outline a.

A pro forma and return schedule that we will execute on.

And we run it like a very Professional business where every month they get, you know, typically our deals work.

You invest the capital, there's a deferred return paid on the capital, we, we return capital and then we get a bigger piece of the promote or the business once that return of capital is done.

And we give monthly end of month packets with a, you know, explanations on everything.

We want to make sure that our partners are not surprised at all.

They are, they are very well aware of the business, what's going on, that's sent out the 15th of every month anytime.

They can email with questions right away, we respond right away.

It's a very open, transparent type of business, which is not typical in investing.

In restaurants, typically people invest, they don't know where their capital is going, they don't know how the restaurant's doing.

They go in there, they see it's busy, you know, so it's not, it's not on the operator side, investments aren't run in a professional manner typically.

And that's hurt us raising capital.

So for us, we lean into way more professional, way more reporting, way more transparency.

And what that has done over time is it keeps our investors active and engaged for the next deal.

Right.

You know, obviously not all of them go along, but you know, you know, we give them the opportunity if they want to roll along, it's great.

And that's how we, how we run, I would imagine.

I know you're in the multifamily business, you know, apartment business as well, and probably similar maybe type deal structures, working with investors.

And on that side, communication is very important.

You know, how many, you know, your construction projects, how many people are in the units, moving in, moving out, you know, all those different types of things.

So, so that's exactly right.

You hit that.

So what we learned on the real estate investment side, we applied to the restaurant investment side and it's much easier for investors to understand where they are in each restaurant investment.

Yeah, a lot of times too, I've seen it like in apartments, you know, or projects like that, you have your preferred return.

Right.

In the restaurant business, you know, for, you know, how you're doing it, how long does it usually take to get return of capital?

You know, to get your initial.

We, we like to have our capital payback to the investors between three, three years to Five years.

Okay, we want that.

You know, typically we do a 20 year deal.

The first five years are we're paying back capital and preferred return and the next remainder of the term is the annuity of that.

Right.

We don't retrade our investors like once their capital's out.

You know, you see a lot of these punitive deals where, you know, okay, you, I borrowed your money and now that I got your money and I paid you back, you're only going to get a fraction of the business.

Right.

Our deals are like that.

You sign up for your membership interest in the beginning and it carries through the term of that business.

So it can be an annuity for many years or if we have a capital event, we have capital.

Yeah, that makes sense.

You know, in the history that you've been doing it, when you look to open up a new unit or new concept, new location, you know, what are some of the things that you're looking for that are attractive to you?

Very early we started doing the same concept in and looking to roll out that cons.

That's that one concept in different areas, right?

So Miami, like different suburbs around us so we can get in a car and drive.

We tried to keep parameters no more than two hours away, that kind of thing.

And we opened four restaurants like that.

And we were, we were running around.

We were missing opportunities within our own town because we were on this thing to open up in other locations and grow business.

And that's a great way to approach it.

But I felt that wasn't for us because one, I kind of got bored doing the same concepts, right.

And then two, being in the real estate business, there are opportunities that we get that we have to program that real estate with different concepts.

Because real estate, it's all about getting eyeballs onto your real estate and being familiar with that.

Right.

With.

Especially when emerging areas and things like.

And the best way for people to get comfortable with a emerging area or an area that's going through a renaissance is food and beverage.

Right.

Because they can get comfortable area, they can explore for two hours.

Oh, yeah.

You know, and that's how areas start to transition.

We recognize if we're doing the heavy lift of getting those eyeballs to that real estate, we aren't actually getting any value of what we're creating unless we own all the dirt that's around us.

And that's what we started doing.

So then we went and we bought the corner piece.

We opened up him or she bar and that was in a transitioning area.

Then where we were parking cars, was an empty lot.

We're like, let's, let's buy that dirt.

We end up doing a mixed use project.

So it was office and three restaurants.

So the offices were above.

We took the TI allowances that the bank allocated for the other spaces, invested it in the ti, in the Art, Carp and Bend restaurant that we were the anchor, didn't give TI packages out to the other two tenants.

And that's how we raised the money for the second one.

And then, and then we, once it was stabilized, we recapped it and went on and did another deal.

Another deal.

That's kind of how we grew that.

That's the formula.

Yeah, that's very smart.

You know, kind of you put the money into one, right?

And then you, you take it out somehow and then put it into.

And it's funny because they all, they all grow that.

Now that was, that was for Tarpon.

Then you fast forward 10 years later after we have a few.

The seminal boosters come to us and they want to do they like what we're doing with housing and F B.

And they said, listen, we've got, we've got six, six blocks right outside the stadium.

Will you help us develop this?

So we did and we opened College Town, which is student housing, retail.

We have a hotel there now, a big parking garage.

And we built that.

It was all blight.

And now that's going very well.

And we did that.

We're like, hey, we see this, this, the symbiotic relationship between F and B and housing and how that works.

So in Lauderdale we started assembling, you know, an area in called Fat Village about six years ago.

And no, it's not like eight years ago.

We assembled about seven acres and now we're doing a big mixed use project with Hines, which is a global developer.

They're like the largest global private developer.

And they're like, in my mind, they are like the hillstone of Hillstone to me is at the top tier.

Okay.

They're the gold standard that everybody tries to be.

And I've been fortunate to work with them and see that firsthand.

And now with Heinz, they're like the gold standard of real estate development.

And now we're able to see how they do it.

And we're learning from them doing that as well now.

And we're doing big project in.

That's the one that we're going to have two of the 100,000 square feet of restaurant, two restaurants in 100,000 square foot of retail.

So wow.

I mean That's.

That's impressive.

You know, you've got these new projects in your current projects.

What about over the last, you know, kind of going back to co.

Well, maybe not so much code, maybe the last two or three years with the unprecedented hikes and interest rates and things like that.

How have you been able to navigate that?

Because I know that's been kind of tough.

That's definitely been tougher on the real estate side.

Yeah.

On our.

On the restaurant side, we don't.

We don't really take much debt on.

I mean, we take on partners from the equity.

Restaurants are way too tricky and cyclical to have bank debt, you know, because all of a sudden sometimes they hit out of the gate, sometimes there's a longer climb, sometimes they hit out of the gate, they drop, and you gotta, you know, stabilize it again.

So bank debt's a little hard to navigate.

And, you know, candidly, banks don't like restaurants.

I mean, it's well known.

Yeah.

So they.

They typically price in any of their risk to a loan.

So it's very expensive capital anyway, so you might as well just go with equity, and that's what we do.

Got it.

Okay.

That makes sense.

That makes sense.

What about.

I know you mentioned you have some new projects going ongoing with, with Heinz and others.

What about looking into the future?

You know, what are things that you.

You really want to accomplish in your career that you've not yet been able to accomplish or just not have not gotten around to?

I want to.

So.

So our.

Our hometown is Fort Idaho, Florida.

And we.

We have operations outside of this city, outside of state, but our hometown is Fort Lauderdale.

And I really want to do a really, really cool FB Forward hotel.

We have a hotel in Tallahassee.

We're expanding.

We just got into that about a few years ago.

While hotels have its challenges, the hardest part about a hotel that we have found out is the FBI.

Okay.

Yeah.

And since we have that, it makes sense for us to do a hotel because the room part of it is a challenge.

But the FB is always the heartburn on a hotel.

And if we know how to do that, we could probably do a pretty spectacular hotel internally, and that's what we're working on.

That'd be cool.

Tim, what about for you?

Do you have any family in the business or anything like that?

I have two.

I have two daughters.

My one one is just graduated from Auburn and she is in.

She works for an advertising agency doing data.

And my other daughter is at CU in grad school.

So you Know, the restaurant business isn't a great lifestyle business.

Meaning, you know, you're working when everybody else is playing, when you're on holiday.

When they're on holiday, you're their holiday.

Okay.

And I didn't really.

My girls are.

Are hinting around.

I'm not sure if they really want it or not.

Yeah.

I just know that to be successful in this business, it takes a lot of sacrifice.

And had I known that sacrifice when I started, it's hard to say if I would choose that path again.

Can I ask you a parenting question?

You know, what you, what you've been able to build, you know, in your.

In your professional career, it's.

The average person is not doing what you do, what you're doing.

Right.

You've built something that's spectacular.

And so my question would be around, you know, with your daughters, do you teach them and have them learn?

You know, what you've essentially, you know, going back to the word, that formula, essentially what you've been able to create.

Do you teach them that, you know, and instill in them the values and what you've learned in your career?

You know, I've been trying to do that, but again, every.

Everybody needs to learn on their own.

And what they.

But I do think that they witnessed actually not what they witnessed.

They.

Unfortunately, they.

And our time together was sacrificed because of the business.

Yeah.

You know, you know, I worked my ass off.

I was just.

That's what I was doing.

And, and there's, you know, if you're working somewhere, something else isn't getting your attention to the degree that it's equal.

Right.

So there was a time when, you know, they saw it.

They saw how to work.

And that's why they're like, if I talk to them, they're like, I don't know if I want to be in that business, but sometimes when they're in the store and they feel the energy, like, maybe I could do this, but, you know, that that's where the balance comes in.

I don't want to dissuade them, but at the same time, they do know what they're signing up for, and I think they might be a little hesitant to sign up for that.

Yeah.

The restaurant business, it's.

It's tricky.

Right?

It's.

It's.

Restaurants are open seven days a week.

Yes.

You know, and especially you have multiple concepts across, you know, your whole, you know, the whole geography that you're in.

It's.

It.

It can be very time consuming, as, you know.

Yeah.

Yeah.

And again, it's like when a business is open 18 hours.

Okay.

Because that's typically, you know, our businesses, our talent is in the store from 7 to about 7am to about 3am and at 3am the cleaners come in and all that kind of stuff.

So it's really a 24 hour business.

So what does that mean?

That you can never shut your phone off?

I mean, at the end of the day and happens 24 hours a day.

Typically when you add alcohol, the real happens after midnight, right?

That's right.

Oh, man.

Well, Tim, I want to say thank you so much for taking your time to come on here, share your story and you know, talk a little bit about what you, what you've built, what you've built and are building.

Truly impressive as I've mentioned.

And just want to say thank you for.

Thank you for reaching out.

Yeah, of course.

And hopefully next time I'm in Florida, we can connect.

I'd love for you to stop our stores if you ever get here.

That sounds good to me.

Thank you, Tim.