I have a lot more experience with a plate of enchiladas than a stock portfolio, but when I heard Chuy's was going public Tuesday, selling shares at $13 apiece, I wondered how Chuychangas and The Elvis Presley Memorial Combo would play on Wall Street.
And they're not the only high-profile local restaurant testing the market this week. Del Frisco's, long thought of as the gold standard for high-end steakhouses in DFW, will offer stock (most likely on Friday) for $14-$16. Is that a prime deal? I have no idea.
But I am intrigued. How could I not be? It's like seeing one of your high school teammates get called up to the majors. Or at least watching your cousin on a reality show (that actually happened to me, Dance Moms: Miami, but that's another story).
Apparently, Del Frisco's and Chuy's are part of a national trend of popular restaurant chains going public to raise their profile, and to raise money for expansion. Chuy's which has 32 locations, is planning to add at least 30 more in the next five years. Del Frisco's Restaurant Group, which also owns 20 Sullivan's Steakhouses, continues to add to its profile, with the trendy but slightly more affordable Del Frisco's Grille.
But as Facebook stockholders found out the hard way, just because you love a product or a restaurant, doesn't necessarily mean you should break into your 401k or invest your life savings. In the case of Del Frisco's, DFW diners have a medium-rare spot in their hearts for the restaurant because it was started in Dallas more than 20 years ago and quickly established itself as the top steakhouse in Cowtown with its popular downtown location.
Chuy's, the 30-year-old Austin-based Tex-Mex chain, has been expanding fast in the last few years -- we've already got six locations in DFW. Will its funky fresh atmosphere, Elvis motif, and giant plates of affordable Tex-Mex be able to build on its cult following?
Personally, I think Chuy's Tex-Mex is fairly average, but living in Fort Worth for the last decade has spoiled me. I do enjoy Chuy's kitschy atmosphere, though, and their potent margaritas.
Del Frisco's has thrived through a tough economic stretch selling $65 prime steaks and providing unmatched service, so it's hard to argue with their formula.
Most importantly, I'm the last person to offer investment advice. I can barely balance my checkbook. But experts will tell you to proceed with caution. Both chains have shown growth in sales, but also have significant debt. Both have good name recognition and devoted customers, but in a tough economy people inevitably cut back on how often they eat out, especially at a steakhouse where the average ticket is $100. And with shareholders hungry for profits, you have to wonder if great food and a singular dining experience will take a backseat.
I certainly don't blame successful restaurants for wanting to expand, and I will root for our Texas treasures to succeed, much like I root for the Rangers, Mavs and Cowboys. I'm a homer. But I can't help feeling like the more locations there are, the less special they become. Homogenization is for milk, not restaurants.
Now, if I could buy stock in Joe T. Garcia's or Salsa Fuego or some of DFW's other one-of-a-kinds, I'd crack open my piggy bank right this second. Then again, I eat there so often, I sort of consider myself a stockholder already.
