Leone's kitchen nightmares blog
The Gordon Ramsay show, Kitchen Nightmares, has brought hope for the greasy spoon and dirty submarine restaurant in America (but mostly in New York) for two seasons now. Ramsay made his first name as a football player, then the owner of a gourmet restaurant, and now as a TV host for various competitive cooking shows, especially Hell's Kitchen. He was named the world's number one most successful restaurant thanks to his kitchen wit, high standards, and aggressive temperament.
For the Fox show, Kitchen Nightmares, Gordon Ramsay visited financially troubled restaurants and tried to change it. This may mean generating a whole new menu, renovating the decor, or installing sophisticated kitchen equipment. leone's kitchen nightmares and Despite these efforts, many were still troubled after Ramsay left.
Before the show began, most Kitchen Nightmare restaurants were under a pile of debt. Kitchen Accesories and The stubborn Sabatiello owner more than a million in the hole before Gordon Ramsay appeared. Facing such a bleak business scenario, even expert advice can only get this far. Are big owed restaurants doomed to bankruptcy, or is Gordon Ramsay not the magic worker he sells?
With some simple econometrics, we can pierce the question. The data are collected based on the amount of debt, the proportion of male owners, and whether each restaurant is still open. After watching 21 episodes of Season 1 (so I like reality TV, sue me) and running it through a regression program, here are the results:
Of the restaurants featured in Season 1 Kitchen Nightmares, 28.5% are still in business. Kitchen Design Idea and Another 71.5% have been sold or taken over. For every additional $ 10,000 in debt before Ramsay arrives, the opportunity for restaurants to remain open is reduced by 1% (holding constant whether management is male or female). This makes sense intuitively - when the burden of business debt increases, it becomes increasingly difficult to make a profit when making interest payments. Many owners in Kitchen Nightmares have taken second home mortgages, maximized their credit cards, and pressed friends or relatives to lend money to them. As this burden grows, bankruptcies or foreclosures become more likely.
Restaurants with more male owners have a greater chance of staying open. Comparing two restaurants with the same amount of debt, owned by husband and wife and one belonging to two men, the second establishment would have a 26.6% better chance of remaining open (sorry, just what the numbers say). The result is somewhat skewed because there is only one exclusive female business featured in Season 1 Kitchen Nightmares, and it becomes bankrupt. Most of the other women on the show had a business with their husbands. The advantage shown by this model for men is almost certainly the result of unique data in small samples, there is no objective difference between men and women as restaurant owners.
The number of years in business is statistically irrelevant to the restaurant's chances of staying open. Some places have floundered up to eight years; no one on the show has made it past ten years under their current management. Even the owner who was trapped in the habit managed to play it after Ramsay's visit. For example, Secret Garden has suffered a loss for seven years, collecting $ 310,000 in debt, but is still open and much more successful now. I think this is the best evidence for Gordon Ramsay's influence; his confrontational approach helps some owners change bad habits and bring their restaurants back to profitability.
To predict Kitchen Nightmares restaurant opportunities remain open, the formula is:
Opportunities Being Open = .192 -.001 * [Debt in Thousands] + .532 * [Proportion of Male Owners]
For example, we can apply this to Campania (Episode 9) which has $ 80,000 in debt and male owners. The result is:
The Opportunity of Campania to Be Open = .192 -.001 * [80] + .532 * [1] = .644 or 64.4%. Actually, Campania remains open, so the model is accurate in this case.
As a second example, we can do the same exercise for Trobiano's (Episode 13) which has $ 500,000 in debt and is shared by two men and one woman. Model will predict:
Trobiano Opportunity Being Open = .192 -.001 * [500] +.532 * [. 67] = 0.048 or 4.8%. Trobiano's closed down, so again his predictions are correct.
It works several times, but how accurate is this prediction in general? To find out, I do the above calculations for all Kitchen Nightmare restaurants that I know the total debts
For the Fox show, Kitchen Nightmares, Gordon Ramsay visited financially troubled restaurants and tried to change it. This may mean generating a whole new menu, renovating the decor, or installing sophisticated kitchen equipment. leone's kitchen nightmares and Despite these efforts, many were still troubled after Ramsay left.
Before the show began, most Kitchen Nightmare restaurants were under a pile of debt. Kitchen Accesories and The stubborn Sabatiello owner more than a million in the hole before Gordon Ramsay appeared. Facing such a bleak business scenario, even expert advice can only get this far. Are big owed restaurants doomed to bankruptcy, or is Gordon Ramsay not the magic worker he sells?
With some simple econometrics, we can pierce the question. The data are collected based on the amount of debt, the proportion of male owners, and whether each restaurant is still open. After watching 21 episodes of Season 1 (so I like reality TV, sue me) and running it through a regression program, here are the results:
Of the restaurants featured in Season 1 Kitchen Nightmares, 28.5% are still in business. Kitchen Design Idea and Another 71.5% have been sold or taken over. For every additional $ 10,000 in debt before Ramsay arrives, the opportunity for restaurants to remain open is reduced by 1% (holding constant whether management is male or female). This makes sense intuitively - when the burden of business debt increases, it becomes increasingly difficult to make a profit when making interest payments. Many owners in Kitchen Nightmares have taken second home mortgages, maximized their credit cards, and pressed friends or relatives to lend money to them. As this burden grows, bankruptcies or foreclosures become more likely.
Restaurants with more male owners have a greater chance of staying open. Comparing two restaurants with the same amount of debt, owned by husband and wife and one belonging to two men, the second establishment would have a 26.6% better chance of remaining open (sorry, just what the numbers say). The result is somewhat skewed because there is only one exclusive female business featured in Season 1 Kitchen Nightmares, and it becomes bankrupt. Most of the other women on the show had a business with their husbands. The advantage shown by this model for men is almost certainly the result of unique data in small samples, there is no objective difference between men and women as restaurant owners.
The number of years in business is statistically irrelevant to the restaurant's chances of staying open. Some places have floundered up to eight years; no one on the show has made it past ten years under their current management. Even the owner who was trapped in the habit managed to play it after Ramsay's visit. For example, Secret Garden has suffered a loss for seven years, collecting $ 310,000 in debt, but is still open and much more successful now. I think this is the best evidence for Gordon Ramsay's influence; his confrontational approach helps some owners change bad habits and bring their restaurants back to profitability.
To predict Kitchen Nightmares restaurant opportunities remain open, the formula is:
Opportunities Being Open = .192 -.001 * [Debt in Thousands] + .532 * [Proportion of Male Owners]
For example, we can apply this to Campania (Episode 9) which has $ 80,000 in debt and male owners. The result is:
The Opportunity of Campania to Be Open = .192 -.001 * [80] + .532 * [1] = .644 or 64.4%. Actually, Campania remains open, so the model is accurate in this case.
As a second example, we can do the same exercise for Trobiano's (Episode 13) which has $ 500,000 in debt and is shared by two men and one woman. Model will predict:
Trobiano Opportunity Being Open = .192 -.001 * [500] +.532 * [. 67] = 0.048 or 4.8%. Trobiano's closed down, so again his predictions are correct.
It works several times, but how accurate is this prediction in general? To find out, I do the above calculations for all Kitchen Nightmare restaurants that I know the total debts
