A number of prominent locally-owned restaurants have closed in recent months in Lewisville and Flower Mound. Dido’s Urban Grill in Flower Mound, for instance, closed in October after opening in 2015. Both Mattito’s Tex-Mex and Cavalli’s Neapolitan Pizza in Lewisville closed in October as well.
Business owners and experts have not come to a consensus as to what has led to some notable restaurants closing. In Lewisville and Flower Mound, city officials are not notified when restaurants close and as a result do not always know why a restaurant closed. A number of factors have been suggested: increased competition with new dining options, rising rent rates in the cities and slipping food quality.
In some cases, such as Cavalli’s, owner Chase LaFerney said there is not enough foot traffic to sustain the restaurant. Cavalli’s opened almost two years ago along with two other restaurants—Twisted Root Burger Co. and Prohibition Chicken in Old Town Lewisville as part of a push by the city of Lewisville to revitalize the Old Town area.
The owner of The Tin Man Diner, which was also located in Old Town Lewisville, said he chose to close the restaurant in July due to low foot traffic as well after only being open for five months.
James Kunke, Lewisville Community Relations & Tourism Director, said he believes the Old Town restaurants will benefit from the several residential projects, such as the brownstones on Walters Street and the apartments coming in near Denton County Transportation Authority’s Old Town Station that are in the works.
“One thing that will help the restaurants in Old Town is when this residential that is under construction is completed and full, and you have a more steady flow of traffic,” he said. “It can be hard for a restaurant to rely only on people who drive in; you need people who are already there.”
CHALLENGES FACING THE INDUSTRY
Jerry Walker, the executive director of the Greater Dallas Restaurant Association, said most of the time when restaurants close less than a year after opening, it is due to a lack of preparation.
“We are seeing that a lot of the smaller, independent restaurants have under-capitalized themselves,” he said. “They are not allowing for them to go the first 12 to 18 months and possibly losing money. So they may have a great idea, great menu and recipes, and the food may be excellent but sometimes it takes several months to two years to build name recognition, and in the meantime they lose money.”
Walker also said competition in the area is a factor as well, especially with the Dallas Metroplex having more restaurants per capita than any other place in the United States.
“Owners think, If we open, they will come,” but that’s not true,” Walker said. “There are too many choices today versus 10 to 15 years ago when there were a whole lot less. So competition is huge today even more so than it used to be. If they aren’t doing the research to figure out, ‘ Can this location support another Tex-Mex [eatery]?’ Then, yes, they are pushing themselves closer to the edge of failure.”
Walker said he believes restaurant owners should try and find an area where their product is underserved.
“Most of these owners don’t take the time to put together a proper business plan, a proper marketing plan, a proper hiring and training plan or development plan,” he said. “So they get lucky if they make it versus if they had a plan and they were ready … they could handle those up and downs.”
Ray Hernandez, a business consultant with J.L. Powers & Associates and former managing partner at Prohibition Chicken in Old Town, said the labor force is also a huge stressor for the local restaurant industry.
“It’s really hard to find good staff,” he said. “And without proper staffing it’s hard for any restaurant to survive.”
Walker said staffing is an issue across the Metroplex and can be attributed to the growing restaurant industry.
“One of the biggest issues we have right now is the workforce or, in other words, finding qualified employees and, in some cases, just finding employees,” he said. “Our industry continues to grow anywhere from 12 to 14 percent a year. As our industry continues to grow, we continue to have a pretty big challenge in terms of finding employees.”
NOT A LONG-TERM PROBLEM
Kunke said although a couple of notable restaurants have closed recently, residents should not be concerned.
“If you think about it, we have roughly 400 restaurants in Lewisville,” he said. “So if you have 90 percent of those restaurants thriving—and the average nationwide is below 90—that means we would have 40 restaurants close a year, and we don’t. We never want to see a restaurant fail or close, but we know it’s going to happen, and restaurant operators know it’s going to happen.”
Kunke said the city continues to have a lot of interest from potential restaurant owners.
“What we see is a lot of restaurants being profitable in Lewisville and expanding their offerings,” he said. “We also see there are vacancies out there that haven’t been filled yet, but there are some that have. We are not seeing a trend that tells us there is a long-term problem.”