By NEIL HARTNELL
Tribune Business Editor
A Bahamian restaurant entrepreneur yesterday said he ultimately plans to return 50 percent of profits to shareholders after his successful crowdfund raise paved the way to secure a second location and production/distribution centre.
Chef Kevin Culmer, founder of Tropical Gyros, told Tribune Business he aims to open his second restaurant by December 1 in JFK Drive’s RND Plaza at the former Cafe Negril site. The production centre will be based in the same plaza, bit a different unit, and is being targeted for an earlier October 1, 2022, opening with the combined expansion set to create some 20 jobs.
Disclosing that recruitment for these posts will start within two weeks, he revealed that he has not given up hope of securing a third Tropical Gyros location in the Carmichael Road area - possibly as early as January/February 2023 - if the right location can be secured.
Chef Culmer, telling this newspaper that he has been frustrated to-date in his search for the right site in both that area and Cable Beach, said sales from his existing sole Rosetta Street outlet have risen by 40 percent since his bid to raise a minimum $320,000 in equity financing via ArawakX’s crowdfunding platform launched in June.
With that target now hit, he said the Rosetta Street restaurant is on track to generate $900,000 total sales for 2022 to-date. The addition of the JFK Drive location will play a significant role in more than doubling this to a projected $2m for 2023, while he added that the addition of a third location could take the annual top-line to $3m.
“Our sales have increased by 40 percent since we launched the offer in June,” Chef Culmer confirmed. “This year we’re on pace to hit $900,000 from Rosetta Street, and next year we anticipate doing $2m from the two locations. If we get a third open on Carmichael, we will be looking at expanding to $3m.”
With ambitions of hitting a 20 percent gross profit margin, and returning 50 percent of earnings to investors, Chef Culmer said that at $3m in revenues this translates into a $600,000 gross profit and collective $300,000 capital return to shareholders.
“For the production unit we will be open before the second outlet. We’re looking to work the kinks out with the production unit,” he added. “We’re looking at October 1 for that, and trying to have the restaurant location ready for December 1. That gives us two months to deal with any issues we may have, so when December 1 comes around it will be a lot easier.”
Chef Culmer said Tropical Gyros’ production unit and corporate office will be located in the RND Plaza’s unit ten, where Colina’s former satellite office was based. “We are moving forward to sign the lease and get the production facility up and running and the second outlet,” he added.
“We feel the area is a developing area for business, especially with Bank of the Bahamas putting their head office and new branch there. It’s a good corridor.” The presence of government offices and businesses meant Tropical Gyros felt it has secured a location with “good visibility”, Chef Culmer added.
Acknowledging that he had previously been focused on finding sites in Carmichael Road and Cable Beach, he said of the latter: “The problem was finding a good location. There was one location we looked at on Cable Beach, but parking was a huge challenge. There was two restaurants in the plaza we looked at, Sbarro’s and Mesa Grill, but there’s no more space. I went there last Sunday and there’s no more space.”
Ruling out a location further west of Carmichael Road’s intersection with Gladstone Road, Chef Culmer said he had yet to find anything suitable there. A spot he thought was vacant at the South-West Plaza is already leased, although he remains optimistic there may be spaces where Popeyes is further west.
“We’ve asked our real estate agents to take a look,” the Tropical Gyros chief said. “We saw some empty spots, and want them to check it out and see if it’s available. If it is, we’d look to get it as a third unit. If that location is available, we’ll be looking at JFK and Carmichael. We’d get JFK open on December 1 and hopefully by January/February Carmichael is ready to go.
“The challenge has been trying to find sites. We don’t want to go into a location for the sake of it. We want to rent spots that make sense. The restaurant business is location, location, location. We don’t want to be in a bad spot that takes us away from clients.”
Despite having hit his $320,000 minimum with a further ten days to go before Tropical Gyros’ raise closes on September 7, Chef Culmer said he was waiting for investors to close on the pledges they have made and actually part with their cash to buy shares in the company. He added that ArawakX has moved to facilitate this by working with Cash N’ Go and Island Pay to facilitate payments.
“I am humbled that we have reached this point with the assistance of the crowdfunding platform ArawakX,” added Chef Culmer. “One of the things we are doing immediately is engaging a business consultant to put in place and shore up our internal controls including standard operating procedures, operations manual and human resources to give us a true competent and effective internal management systems.
“We are also sourcing inventory control systems software which this consultant will help guide us on in this process. I want to assure our investors and those who are intending to invest in Tropical Gyros that we are bringing effective and efficient talent to ensure Tropical Gyros has the right procedures moving forward.
“Now as we embark on this new journey, I see great potential returns for our investors, and I want to say thank you for those that have pledged and paid for their pledges, giving us the ability to take this brand throughout the Bahamas and our ultimate goal into the international market.”