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February 23, 2009

Spicy Pickle Loses Its Crunch

That didn't take long. Six months after opening in the former Armando's space (of neon lobster sign fame) at 143 Montague Street in Brooklyn Heights, the Spicy Pickle has decided to close its doors, according to the Brooklyn Heights Blog. Evidently the franchise thinks that Long Island will be a better location in this economy and is trying to get out of his lease. Was this place any good? GMAP

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It's sad to see a business close, but not surprised at all in this case. I tried one of their pizzas and it should have come with a microscope (or they should have put it in a box half the size). Underwhelming food and poor concept.

Posted by: Biff Champion at February 23, 2009 11:19 AM

Spicy Pickle took down the beautiful Armando's neon sign with the lobster and only lasted 6 months. It was up for all of my 50 plus years. We lost so much with the artificial boom that won't come back.

Posted by: Jebby at February 23, 2009 11:19 AM

What are people's thoughts as to why this place didn't succeeed?? If a place folds six months after it opens it was poorly capitalized. As long as it is a LLC it'll be easy to get out of the lease. Just close the door and hand back the keys!!!

Posted by: daveinbedstuy at February 23, 2009 11:19 AM

Last I heard they had bounced the December rent check and hadn't written another check after that.

It folded because they were paying $22,000 a month in rent, did a gut renovation that lasted 3 months longer than anticipated, and probably most importantly, because they food wasn't any good.

Not the soundest of business models I don't think...

Posted by: christopher at February 23, 2009 11:29 AM

That is an obscene rent. I hope the landlord loses his shirt on this. It will take quite a while to find another tenant willing to pay that ridiculous rate.
If I were him, I would slash the rent and go with a short term lease.

Posted by: sam at February 23, 2009 11:35 AM

I'm with Sam...the rent is unbelievable. What kind of Court Street restaurant can make that monthly nut?

Posted by: East New York at February 23, 2009 11:44 AM

I ate there twice and got a terrible stomach ache both times. I'm not surprised they're closing. The food would have to be a lot better to compete with Chipotle and Five Guys on the same block.

Posted by: Lesloaf at February 23, 2009 11:44 AM

I ate there twice and got a terrible stomach ache both times. I'm not surprised they're closing. The food would have to be a lot better to compete with Chipotle and Five Guys on the same block.

Posted by: Lesloaf at February 23, 2009 11:44 AM

The food was on par with a Quizno's type of joint. Not bad... and way better than Subway. I can't believe how fast some businesses fold... I'm also thinking of the cupcake place on Atlantic near Court (and next to Subway). Granted, when it opened, I thought it would never succeed, but what do I know? That place lasted only a few months, also. (The space is STILL for rent, too.)

Posted by: broadwayron at February 23, 2009 11:47 AM

Why would you hope the LL loses his shirt (assuming the rent is actually 23K)????

Think about it - the restaurant is a chain with well over 50 locations - so clearly they should know the market, prevailing rents and expected sales.... they undoubtedly were in as strong - if not stronger negotiating position than the LL in terms of sophistication and maybe even finances.....SO

If they thought 23K was a fair rent and thought they could make it, are you saying the LL should have refused???

Ultimately given its short lifespan, rent probably wasnt the issue, sales were...but either way I seriously doubt you work for less than what someone is willing to pay you, so what possible basis could you have to throw venom toward the LL here. (besides just a general political animus to anyone who has more $ than you)

Posted by: fsrg at February 23, 2009 11:51 AM

$22,000 per month?! how big is this space?

Posted by: landlord at February 23, 2009 11:52 AM

"If they thought 23K was a fair rent and thought they could make it, are you saying the LL should have refused???"

I agree....the rent (if accurate) IS insane, but if the landlord can get it, that's good for him. Nothing wrong with that.

Posted by: East New York at February 23, 2009 11:54 AM

Last year I did the math on here as to how many cups of froyo that place on Smith or Court would have to sell to pay their $14,000 rent + everything else and turn a profit.

Anybody know if it closed yet???

Posted by: daveinbedstuy at February 23, 2009 11:54 AM

If I remember, Armandos was pretty big. I liked the food there too. It was always crowded. How does that 22,000 compare to other rents on Montague? I always had the feeling that Montague never did that great as a commercial venue, despite its location and its rather charming feel. I saw stores come and go all the time, even in boom times.

Someone once said they thought the problem with Montague was that it depended on the workers in the area who were a heavy lunch crowd but that residents who worked mostly in Manhattan didn't come home to eat dinner on Montague and often spent weekends outside the nabe. He thought it was more of a convenience street than a destination street.

Posted by: bxgrl at February 23, 2009 11:58 AM

The food here was underwhelming, and the service too slow. The owners were ex-finance guys who didn't know how to run a restaurant.

The high-rent problem on Montague St. doesn't allow for any Mom-and-Pop's. National chains have moved into every vacant space over the past two decades, because independently-owned boutiques, restaurants, shops can't afford the rents. It's a shame. Everyone complains about the lack of a vibrant restaurant and shopping scene in the Heights... part of the reality is that the shops cater to a daytime crowd, and the businesses that make a go of it are generally franchises.

The building that housed Heights Book at 109 Montague just sold for 3.7m. That's why the bookstore has moved to Smith St. Rumor has it that some food franchise will move in.

Posted by: buttermilk channel at February 23, 2009 11:59 AM

Pretty sure this was a franchise, so it may have 50 locations but they're all individually owned and operated. if I remember correctly, this was started by two guys who were sick of their wall street jobs so while I'm sorry they lost their money, they are conceivably no worse off than if they would have stayed at their jobs and kept their money in company stock!

The food was terrible. TERRIBLE. The egg sandwich used a fake egg, heated in a microwave.

Posted by: Ringo at February 23, 2009 12:02 PM

I never ordered anything at Spicy Pickle, I walked in and it looked so tacky and ugly, I walked right back out.

Posted by: mcKenzie at February 23, 2009 12:03 PM

As I understand the scenario, the owner of Armando's (who still owns the building) wanted to retire and sell the restaurant name/equipment/rent the space. No one wanted to buy the Armando's restaurant "as is" but the Spicy Pickle people approached him about renovating and setting up their own shop.

He said $22,000 rent. They said ok.

I'm sure the building owner will put the space up for rent and take what he can get. He took $22k because that's what he could get.

Posted by: christopher at February 23, 2009 12:07 PM

Franchisees may be individually owned and operated but the parent generally still must approve new locations, rents, and leases. The Franchise would prefer that people not open and close locations all over - its bad business and PR.

As for Montague St - it is not "all national chains" or franchises it is actually a decent mix of local and chain - one that hasnt overly changed in the last 15years or so.
In fact I'd be willing to bet that the store with the highest volume is a local "mom & pop" - Lassen and Hennings.

Posted by: fsrg at February 23, 2009 12:10 PM

Lassen and Hennigs own the building. Just as Armando's was able to stay on Montague St. indefinitely, Lassen will be able to. As buildings get sold or leases renewed, rents get raised. Over the past 15 years, more franchises have moved in than independent shops.
That's why the record store is now Five Guys, the Korean market a Starbucks, Old Mexico a Subway, the newsstand and pizza joint a Corcoran outpost. Etc.

Posted by: buttermilk channel at February 23, 2009 12:21 PM

Lassen and Hennings is great. They own the building they are in, which helps longevity immensely. No need to worry about astronomical rents when you are your own landlord.

Just like the little hardware store across from the Grand Canyon. He owns the building so the odds of him closing are slim.

A lot of mom and pop shops own their buildings, and many Montague landlords are long time Heights people that get market rents, whatever that is at the time, but are more concerned with having a tenant than a vacant store front.

Posted by: christopher at February 23, 2009 12:24 PM

i tried spicy pickle a few times. each time they got my order wrong and i told the owner and he kept asking for another chance. after the 4th wrong order - i stopped going. i thought the sandwiches were good - never tried the pizza. they opened at a tough time in a tough market. the lunch crowd has also slowed down with a lot of folks bringing their own lunches to work.

Posted by: bkny at February 23, 2009 12:26 PM

No one gave these operators their buildings - they undoubtably negotiated a fair market rent however long ago and then enjoyed a business robust enough to pay their rent and also support buying out their LL later.

That being said - the fact that they do not have to "worry about rent increases" is only true to an extent. Any smart business person should determine if their sustainable operating profit is close to the sustainable fair market rent - and if they are close - they should either sell their retail business or close up completly and rent it.....what person in their right mind would run a retail business (probably the most demanding of all businesses) when they could make the same or more simply net leasing out the location....that is obviously what Armandos figured out - although I just hope (for his sake) that he didnt figure that Spicy Pickle was a sustainable tenant.

Posted by: fsrg at February 23, 2009 12:39 PM

22K is insane for that space. I can't believe anyone thought that would be profitable.
That place WAS a franchise, so it may have been approved by the home office, but the owners surely weren't receiving an financing from the corp... I imagine that they had to pay a hefty franchise fee, too.

Posted by: broadwayron at February 23, 2009 12:45 PM

22K is insane, but remember that salon Tapestry? They were paying 24k/month. Nuts, right?

Posted by: Ringo at February 23, 2009 12:50 PM

Anybody know another coffeeshop with free WiFi in the area?

Posted by: Smudge at February 23, 2009 1:18 PM

The rent isnt "insane" for the market - at least the market that has existed for the last decade or so - assuming the store is 2000sq ft it is approximately $130sq ft - which was, as I understand it, the general market price for rent on Montague (and would be a bargain in most of Manhattan)

Posted by: fsrg at February 23, 2009 1:18 PM

"Any smart business person should determine if their sustainable operating profit is close to the sustainable fair market rent - and if they are close - they should either sell their retail business or close up completly and rent it....." - fsrg

Very true. That's what happened to Boro Photo.

Verizon Wireless approached them, since they own the building, and offered them $15k a month. They took it and moved above Armando's for $4k a month, effectively an $11k a month profit.

After a year or so they closed up shop, realizing a $15k profit is a lot better than an $11k a month one.

Posted by: christopher at February 23, 2009 1:39 PM

I don't know if the food was good but it definitely seemed overpriced. Paninis and pizzas started at about $8.50. I work in the neighborhood and there are a lot of lunch options, many better priced. It never seemed appealing enough to stop in. Oh well, I hope it doesn't become one of those "doomed" locations.

Posted by: bookistan at February 23, 2009 2:14 PM

"Just like the little hardware store across from the Grand Canyon. He owns the building so the odds of him closing are slim."

I freaking LOVE that hardware store - they have everything you would ever need for your home and they are so helpful and knowledgeable about home repairs. Mr. biatch and I talk all the time about trying to join the Montague BID b/c the mix of stores is atrocious: banks, cell phone stores and real estate firms oh my! The food options are terrible. I never went into Spicy Pickle - it looked unappealing.

Posted by: columbiatch at February 23, 2009 4:37 PM

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February 23, 2009

Spicy Pickle Loses Its Crunch

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