One more New Year's surprise in restaurant closing news: AQ is shutting down this month after five years in business and many accolades, both local and national. Thrillist broke the news in this piece, the third in a series about what writer Kevin Alexander describes as a nationwide restaurant bubble in which he asserts "America's Golden Age of Restaurants is coming to an end."
AQ was a great story of restaurant success in one of the country's most vibrant and competitive eating towns. Owner Matt Semmelhack, a first time restaurateur, partnered with a talented chef, Mark Liberman, and debuted the restaurant in late 2011 to immediate raves from Michael Bauer and many others, and a James Beard Award nomination for Best New Restaurant. The primary gimmick, which was quick to charm the restaurant's fans, was that the restaurant would change with each season, with the decor, menu, and the staff's uniforms all changing four times a year with the menu actually shifting many more times than that in incremental ways, based on ingredient availability.
But Semmelhack tells a story that's now becoming all too familiar for restaurant owners not only in San Francisco, however San Francisco stands apart for having the multiple burdens of a high minimum wage, high rents, and typically astronomical opening costs. Add to that the increased health care mandate for employers, and even a successful restaurant can see their profit margin shrink rapidly.
Five years, though, is a fairly average lifespan for a restaurant. Though there are greater success stories of restaurants that become landmarks unto themselves, studies have shown that the majority of restaurants close within one year, and 70 percent of those that survive the first year will shutter within three to five years.
Semmelhack says that AQ had an 8.5% profit margin in 2012, with a total profit of $250,000, and that shrank to 1.5% in 2015, with a total profit of just $40,000. And clearly 2016 was no better.
After taking a week off recently, he returned to the restaurant and says that, suddenly, looking at the staff moving around, "all he could see was the money each one of them was costing him, flashing in front of him like a video-game score." And he tells Thrillist, "I knew right then we had to shut it all down."
The closure of AQ, which will happen sometime in January, follows just a few months after the closure of Semmelhack and Liberman's ambitious third project, Bon Marché, which suffered a fate similar to several restaurants that opened in quick succession on mid-Market.
This means that the team has just one restaurant left in what was, just a year ago, a growing mini-empire, and that's Fenix the Mexican restaurant two doors down from AQ that debuted earlier this year, a re-concepting of the former TBD.