Chicago Restaurateurs Are Trying Out Alternative Models As the Industry’s Challenges Continue to Grow

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The debut of Parachute HiFi a month ago marks the third time that Beverly Kim and Johnny Clark have opened a restaurant at 3500 N. Elston Avenue in a decade and the fourth restaurant concept they have launched in half that time. That’s not for lack of success or acclaim: the married team of chef-owners have earned a James Beard Award, Michelin star, inclusion on numerous best restaurant lists, and a national profile. But the stresses of the COVID-19 pandemic, the changes in dining habits and spending it inaugurated, and bad luck have all forced them to continually adapt.

“Coming out of 2020 to now, I feel like every year was different,” says Kim. “Things have changed – maybe permanently.”

So they’re trying something new, shuttering the second iteration of their Parachute restaurant in favor of a more casual spot centered on music, with an exceptional sound system, eclectic vinyl records, and DJ sets accompanying a tighter menu of inventive Korean-American bar food and curated drinks, including the hard-to-find Korean beverages known as sool.

“It seems like people need even more reasons to go [to restaurants] again and again, and not just [have a place] be a special occasion spot,” Kim says. So she and Clark are “adjusting to what we’re seeing and the times,” and trying out an alternative restaurant model inspired by the listening bars of Korea and Japan, where guests come to enjoy rare musical selections while also eating and drinking.

Kim and Clark are not the only veteran Chicago restaurateurs reimagining what a business serving food can be.

“What we’re trying to solve is what is increasingly a broken model for financial stability and sustainability in the post-pandemic era,” says Jason Hammel, the chef and owner of Lula Cafe in Logan Square. In the past year, Hammel has released a Lula cookbook, won a Beard Award for Outstanding Hospitality for the restaurant, and celebrated its 25th anniversary. Now he and his wife Amalea Tshilds have opened LOULOU around the corner from Lula, at 3057 W. Logan Boulevard. It’s a flexible space that will host everything from one-off dinners to pop-up retail shops to musical performances – all ticketed events that take advantage of a full kitchen. (Lula’s catering arm now also operates out of the space, and provides the staff for LOULOU.)

“We call it a studio or salon or creative space in our restaurant family,” says Hammel. It hearkens back not just to Lula’s early days but also Lula’s predecessor, the Logan Beach coffee shop, which hosted music, poetry readings, and special dinners – “and a lot of those things were supporting community causes as well,” Hammel adds. LOULOU recently hosted a dinner by a chef from New York City who just released a cookbook, while another event will feature Tshilds interviewing local musicians before a performance paired with food.

“I think the pandemic showed a lot of us how fragile the economies of restaurants were, both from the worker perspective and from the owner perspective,” Hammel says.

The Industry's Challenges

The chef Iliana Regan began their first memoir Burn the Place with an imagined fantasia of burning their Chicago restaurant Elizabeth down. Despite the Michelin star and plaudits, they found running a high-end restaurant maddening – and eventually decamped to a remote cabin in Michigan called the Milkweed Inn, where they host twelve guests per weekend and serve meals grounded in the surrounding forest and Upper Peninsula. Regan has since sold Elizabeth and left the traditional restaurant industry behind.

The restaurant industry has always been a difficult one, with thin profit margins, inflexible landlords, long hours, capricious customers, body-breaking work, and unscrupulous investors. But the challenges have only grown since the pandemic, as dining habits shifted, inflation sent the cost of ingredients sky-rocketing, and labor costs grew. Independent restaurants have been especially squeezed, trapped between rising costs and the need to get wallet-tightening customers to return often without reducing the quality of their product. Those who are trying to improve the industry by offering good wages, paid time off, and insurance find that breaking even is even more of a struggle.

Take Parachute’s popular bing bread. It always took a huge amount of labor to prepare and generated a profit of only $0.63, or 4.2 percent of its pre-pandemic cost of $15, as Eater explained when Clark and Kim decided to take it off the menu in 2022. To keep that profit percentage in 2022, they would have had to charge $22.80, including an automatic service charge for their staff – and they would still be making only half of their aimed-for profit margin of 10 percent. To hit that goal, the price would have to be $28. Two years later, the bing bread is back at Parachute HiFi at that price point – $14 for a half order – but only on Wednesdays, which makes the labor more manageable.

“The cost of nearly everything is very high, and the price that one can charge for a hamburger or a pizza or a breakfast burrito hasn’t really kept pace with the changes that you’ve seen on the supply side,” says Hammel.

In order to address that intractable problem, restaurateurs have to save money wherever they can. One way to do that is to wring as much value out of an ingredient as possible and offer special experiences. Take chef and owner Norman Fenton and his Uptown restaurant Cariño. In 2023, a fine dining restaurant in the same location closed. Fenton, who was the chef, wasn’t getting enough customers in a neighborhood not known for high-end restaurants. But at Cariño, he offers not just a tasting menu in the tiny space, but also a shorter, less expensive late-night “taco omakase” that is a unique experience, utilizes unused scraps from the earlier menu, and fits in another seating of paying customers without quite as much labor.

Hammel is focusing on “experience dining” such as special menus, events, and catering at LOULOU. “It’s a premium that you’re charging, and the experience is defined and not as open to cancellations or caprice,” he says. “On Saturday [at Lula], we had 18 cancellations” – all of which are tables that might not get filled and thus represent lost revenue.

Another possible solution is to cut back on staff. At the small Cellar Door Provisions in Logan Square, cooks run food and there is no designated dishwasher; that job is shared amongst the staff. (Cellar Door also makes inventive use of ingredient scraps and waste.)

John’s Food & Wine in Lincoln Park opened a year ago with a much-discussed style of service – namely, there are no servers. As at a quick-service restaurant, customers order their whole meal at a counter before being seated by a staffer such as the sommelier. Refined dishes like beef tartare or pasta with crab are brought to the table by a crew that might include chefs and co-owners Adam McFarland and Thomas Rogers; wine is ordered via QR code. The lack of defined servers means fewer staff to pay, while an automatic 20 percent service charge ensures the rest of the staff is paid a living wage.

For both Cellar Door Provisions and John’s Food & Wine, the money saved on staffing allows them to afford quality ingredients from local farms and present labor-intensive dishes without being a high-end tasting menu restaurant.

“The key factor is how many people it takes to make the products that you’re selling,” argues Hammel. “That’s a factor even more than how much you’re paying them or what you’re charging.”

While Lula has the benefit of an established reputation to bring people in the door and help customers accept its prices, for someone opening a new restaurant, “You’re probably thinking about, ‘What can I do to minimize how many people it takes to do what we do?’” Hammel observes. “That seems to be working in some respects for a lot of people, but you gotta bring your A-game in those situations.”

Parachute HiFi is “more of a bar than a traditional restaurant setting,” Beverly Kim says, which allows it to have a smaller staff. And dishes like a burger, kimchi fried rice, tteokbokki pad thai, and nigiri require less labor to prepare than some of the more elaborate dishes Parachute served. (Curating music and flipping records on the weeknights when there’s not a guest DJ does add a tad more work to Johnny Clark’s plate.)

More casual dishes also allow for a slightly more relaxed kitchen – and ideally a more welcoming, less exhausting workplace. “We’re trying to establish something slow and steady [and] build as we need, so it’s sustainable for everybody,” says Kim. “We’re just trying to find something that’s a win-win-win for everybody.”

Staff satisfaction and sustainability is also part of Hammel’s motivation for opening LOULOU. “It’s about the right kind of workload for the team,” he says, later adding that, “People need to feel like restaurant industry careers are growth careers and not stagnant.”

“I want to create a financially viable situation for my team, and then have the experience that’s generative, creative, engaging, inspiring as a chef and owner,” Hammel says.

Creative Outlets

Despite the challenges of the restaurant industry today, many chefs refuse to walk away from the joy they find in hospitality and fulfillment in inventive cooking. “As creative people, you need to find ways to keep yourself sustained,” says Kim. “It’s about always learning and growing, [so] incorporating the music elements [at Parachute HiFi] has been really fun for us.”

A year ago, she and Clark opened the Ukrainian restaurant Anelya down the street from what is now Parachute HiFi after closing their restaurant Wherewithall following a disastrous sewer line collapse. “Wherewithall was a dream restaurant for us,” Kim says. “But no matter where you are, you’re still subject to the changes of the world.”

She and Clark try to “keep our fingers on the pulse of things,” and adapt to or anticipate what the restaurant-going public is looking for. They have settled on, in one case, a modern Ukrainian restaurant set up to accept casual walk-ins looking for drinks and snacks as well as people looking to explore an unfamiliar cuisine in an extended meal. Parachute HiFi leans more towards the casual drinking side: there are currently no reservations, the menu is smaller, and the prices are a bit lower.

“Every time we open something, we get some new data and new learnings,” she says.

Kim and Clark are trying to remove any “barrier to coming in, whether that’s a cost barrier, whether [a customer] feels like it needs to be a special occasion, whatever the reason is,” Kim says. They’re hoping to build up regular guests, including from the neighborhood, as Parachute did before the pandemic broke habits. Kim thinks a lot of people moved away, or had children, or could no longer afford to dine there every month. Construction on the Kennedy expressway has made trips to Avondale longer, while Ubers and Lyfts cost more than they used to.

“You try to analyze it, read the news, and validate your reasons,” she says. But, whatever the reasons, she and Clark found that it became ever harder to get people in the door, especially given that they’re located on a former industrial corridor miles from the city center.

They haven’t ruled out the possibility of reintroducing the fine dining version of Parachute if the right location and opportunity arises – perhaps downtown or in the West Loop, central locations where there’s more foot traffic and more restaurants and business and hotels to draw people. But they’re also not going to give up on Avondale.

“It always makes me happy to see people out and about walking, and even our neighbors were like, ‘We’re so glad you’re reopening, it feels so much safer when you’re open,’” Kim says. “It’s very important for us to continue as a neighborhood spot. We’d love to be there as long as we can.”

Hammel and Tshilds are also devoted to their neighborhood of Logan Square, where they live, which is why they jumped at the chance to take over the location now occupied by LOULOU. “We have been looking for a space like this for a while,” Hammel says, in part to indulge their own creative aspirations. “I think it’s important to set down and connect roots that are in the neighborhood. We wanted to keep our energy here and grow wider.”

He and Tshilds share a belief with Clark and Kim in the power of a restaurant as a “third space,” a place beyond work and home that allows people to gather, relax, meet friends, and interact with other residents of their neighborhood and city.

Kim believes that third spaces are even more important as life becomes ever more digital – it’s part of why she and Clark believe people will relish the analog sound of hand-picked vinyl at Parachute HiFi, and why they’re not posting the restaurant’s menu online.

“I hope that we create spaces that are not just meaningful to us” but also to guests, Kim says. “It’s a bigger mission that I have than [running a restaurant] just for money or just for a living. You have to find something, a purpose in it.”

Whether that’s enough to succeed in an adverse environment remains to be seen. But Kim won’t be giving up any time soon.

“I can’t relax. I’m in the middle of my career,” she says. “I’m not ready to stop.”