Duke’s on 7, located in Minnetonka, Minnesota, is the latest restaurant venture of Craft & Crew Hospitality. Duke’s on 7 opens June 25 and was financed by an SBA 504 loan through Choice Bank. Choice Bank’s relationship with Craft & Crew Hospitality began in 2019 with their restaurant The Block, which Choice Bank also financed with an SBA 504 loan.
Commercial Loan Officer Brett Howells worked closely with Craft & Crew Hospitality’s David Benowitz and Luke Derheim on financing both The Block and Duke’s on 7.
“Due to COVID, we were a little concerned as a bank with the restaurant industry,” Brett said about the decision to finance Duke’s on 7. “But we got comfortable based on the positive performance of The Block being profitable during COVID, as well as the management experience that we knew from underwriting this for the last couple of years with them.”
The Block was met with success due to the owners’ ability to quickly and thoughtfully pivot their business operations, finding a new way to reach customers and meet their changing needs.
As the demand for in-person dining experiences rises and caution over public health remains from the COVID-19 pandemic, restaurant owners have more factors to consider when thinking about the long-term success of their business. This can be executed by planning for ample outdoor seating and even predetermining viable takeout options for customers. Learning from the pandemic, Duke’s on 7 will feature a 170-seat patio.
“A big reason they were profitable at the end of last year was that they pivoted the business in April 2020 and reacted very quickly to figure out ways to continue to reach their customer base,” Brett said. “Right away they figured out ways to promote take-out and found ways to get creative with outdoor seating solutions. They came up with various ideas to keep the brand alive, such as a pop-up breakfast bar, since brunch was one of the most popular draws on weekends pre-pandemic. Eventually, this also included kits to make your favorite brunch cocktails at home, such as Bloody Marys and mimosas. They were pioneers of many of the creative concepts that many restaurants in the community eventually adopted as they tried to stay afloat during the pandemic.”
This year has taught businesses the importance of being agile in the face of adversity. Yet, the prospect of financing a new restaurant during a pandemic poses a challenge. With a trusted banking partner by your side, it is easy to assess potential risk and develop a financing plan tailored to your restaurant.
“I don’t think there’s any type of deal that would get more rewarding than this one because you invest so much time in figuring everything out, getting to know them, and having trust that as managers they know what they’re doing.” Brett Howells, Commercial Loan Officer
Brett saw potential in Duke’s on 7 based on the owners’ past performance, so he worked with them throughout the SBA 504 loan process. The SBA 504 Loan Program “provides long-term, fixed-rate financing of up to $5 million for real estate and major fixed assets that promote business growth and job creation.”
Choice Bank also originated PPP loans for Craft & Crew in 2020.
“When you do a project like this, by the time it’s all said and done, it’s been almost a year,” Brett said. “I don’t think there’s any type of deal that would get more rewarding than this one because you invest so much time in figuring everything out, getting to know them, and having trust that as managers they know what they’re doing.”
“It’s always a rewarding experience to see a restaurant we have worked with from the very beginning open,” said John Fritz, President, Choice Bank Minnesota, Chief Commercial Officer. “To see the resiliency of the restaurant industry, especially after a challenging year, is incredible. Choice Bank is proud to create new opportunities for restauranteurs.”
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