I’ve invested in over 60 startup restaurants in the last decade and I have two rules that have served me well.
1. Owner-operators only
2. No white people (I’m white)
Most white people have a romantic notion about owning a restaurant but few are willing to deal with the harsh reality of long hours for potentially low net income.
I have financed a couple of exceptions. I did 10 restaurants over 5 years with a white guy who was a restaurant manager; he had developed an interesting model and was very profitable with his first restaurant before I got involved.
Based on my successes and losses, I am an equal-opportunity racist investor, though. I have rules in every industry. I even have geographic limitations...for example no investments along the California coast, especially LA County (Central Valley is great).
Nothing like real experience in this biz, and sounds like you have a lot of it.
Curious - do you stay invested? Do you set the model so that owner is eventually buying you out?
What options do have (and steps you take) if the restaurant starts do decline?