How Did Alinea Group Investors Get Paid?

Alinea Group investors were paid from the first year, not only when the group was sold. Nick Kokonas sold the group in 2023. From the 2005 opening until that sale, investors got a quarterly distribution, and at the exit they got 8 times the money they put in. He puts the whole return at about 27 or 28 times. Someone who put in $100,000 in 2005, into what looked like an art project, had about a quarter of a million back by 2019.

He used to say restaurants are a horrible business. He now calls that a skill issue. Alinea's first year did about $5 million in sales at a 7 or 8 percent margin, which felt like a downgrade from trading and a lot more work. At the peak the restaurant was doing about $20 million a year at an 18 to 20 percent margin. Getting there took software, an end to the phone lines, and food-cost charts from his CFO, Steve Bernacki. During COVID a famous television chef said this kind of business makes 2 or 3 percent and that the industry needed $2 billion printed. Kokonas emailed him and told him to stop saying it. That margin was one operator's result, not a rule.