The Arena is Fighting a Losing Battle

Spike

This year, 6,500 failing bars nationwide will close their doors for good. If things don’t change soon, The Arena in Ann Arbor, Michigan will become just another statistic. In 2001, Mike Flore purchased a failing restaurant in downtown Ann Arbor with a vision of opening a sports bar. He was the general manager of a chain restaurant for almost 10 years but always wanted to own his own bar and restaurant. Within 3 weeks of the property becoming available, Mike’s bar was being renovated. Business quickly flourished as The Arena began to attract the local Ann Arbor college alumni community. The bar was the place to be and, in the beginning, was making $150,000 per month. After 9 years of continued success new bars emerged all over downtown Ann Arbor, poaching many of The Arena’s frequents customers.

Mike failed to adapt to the local bar scene and The Arena continued to lost customers. The staff feels that The Arena has become outdated and stale, and doesn’t reflect modern day Ann Arbor. Business declined and Mike took his frustrations out on his staff and customers. In fact, his employees describe him as difficult to work with, abrasive and scary. Now, losing over $10,000 a month, Mike is left with a rundown bar, a staff constantly on edge, and a million dollar debt. Mike has closed 4 retirement accounts, spent his kids’ college funds to keep The Arena afloat, and is $1,000,000 in debt after owning the bar for 14 years. Needing to secure a future for his wife and children, Mike has agreed to pull back the doors, bust open the books and make a call for help to Bar Rescue.

Ann Arbor is one of the most important college towns in America with 500,000 alumni and a median age of 27 years old. Each day, 73,000 people come to the University of Michigan. For the bar, Jon Taffer brings in veteran mixologist Andrew Venjohn. Andrew’s vast experience operating in bars focused on the young, emerging customer base can turn any tired establishment from old news to the talk of the town. For the kitchen, Jon brings in expert chef Ryan Scott. Ryan’s background running kitchens that create familiar yet upscale flavors can turn any bar’s outdated food menu into a crowd-pleasing sensation. Jon’s experts believe that The Arena looks outdated. For recon, Jon sends 3 University of Michigan graduate students into The Arena, a 4,600 square-foot sports with a high-profile, prime corner location bar grossing $19 per square foot in sales. The spies order beef nachos and steak bites, the latter of which arrives at the table undercooked. When the spies ask for a re-fire, Mike becomes hostile and confronts them with the re-fired steak bites.

The Science

  • The Arena is grossing just $19 per square foot which is $131 per square foot less than the required break-even point. To calculate your break-even point you must determine your fixed costs (rent, insurance, etc.) and variable costs (ingredients and other consumables). The formula for calculating your break-even point is: fixed cost divided by 1 minus variable cost percentage.
  • Flaming drinks can be fun but handing them to guest is a liability. Not only can the bar be lit on fire if the drink is spilled, guests can burn themselves, catch clothing on fire or otherwise be seriously harmed. If you allow your bartenders to light cocktails on fire, make certain they blow them out before serving them to guests.
  • It is illegal to let a guest make their own drink. Jon and his experts were shocked when they watched the staff and owner allow a guest to make their own drink during recon.

The Relaunch

Jon states that this relaunch isn’t about changing the name because the brand isn’t the problem, it’s the attitude and energy that turned away potential guests. Instead, Jon set up The Arena for a different generation: namely, the Millennials. During the night of the relaunch, the food tickets were completed in under 8 minutes. Six weeks after the relaunch, The Arena has grossed over $220,000 in food and beverage sales.

To find out more about Bar Rescue episodes make sure to check out Spike TV.