# A restaurant group returned investors about 28 times their investment

Markdown copy of https://realalpha.app/s/a-restaurant-group-returned-investors-about-28-times-their/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Nick Kokonas](https://realalpha.app/people/nick-kokonas/) · Nick Kokonas is an entrepreneur, options trader, restaurateur and software founder. · Built Chicago's Alinea Group and co-founded Tock, the restaurant reservations platform later acquired by American Express.
- Host: [Shaan Puri](https://realalpha.app/people/shaan-puri/) · Co-host, My First Million · Sold Bebo to Twitch in 2019; co-founded the crypto newsletter Milk Road.
- Show: My First Million
- Episode: [How to find your arbitrage (from the guy who’s done it 3x)](https://realalpha.app/v/YdRLpWQARtA/), Oct 26, 2026
- Moment: 1:26:46 to 1:29:56 of the episode (3 min), playing on https://realalpha.app/s/a-restaurant-group-returned-investors-about-28-times-their/; the episode from there: https://realalpha.app/v/YdRLpWQARtA/?t=5206

## Quote

> “And then they got 8x their initial investment walking out the door, right? So I think overall it was like **27 or 28x**.”
> — [Nick Kokonas](https://realalpha.app/people/nick-kokonas/) at [1:28:05](https://realalpha.app/v/YdRLpWQARtA/?t=5285) · My First Million

## Takeaways

1. Alinea grew from $5 million in sales to over $20 million.
2. At its peak, the group made 18–20% margins.
3. Investors received quarterly distributions and about 28x their initial investment.

## About this segment

Nick Kokonas describes building Alinea into a profitable business, not just an art project, with margins reaching 18–20% and a 28x return for investors. He argues that restaurants can be strong businesses when operators build the systems.

From “How to find your arbitrage (from the guy who’s done it 3x)”, Oct 26, 2026. [Watch the full episode](https://realalpha.app/v/YdRLpWQARtA/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[1:26:58](https://realalpha.app/v/YdRLpWQARtA/?t=5218) garage band mentality among chefs even some of the famous ones I mean I almost broke my my tv in my basement when COVID started and they had famous chefs on CNN going this is the kind of business where at best you make two or three percent and you pay you know this month's bills with next month's revenue and all that and this very famous chef was on TV all the time saying that and that we need to print two billion dollars for the restaurant industry and all that and I was like this guy I mean I literally emailed him I was like stop saying that that's not true He's like, what part of it's not true?

[1:27:34](https://realalpha.app/v/YdRLpWQARtA/?t=5254) Like, my restaurants make 2%. I'm like, well, that's because you don't actually, you haven't figured it out. Like, you should be the last spokesperson on there. But he was a very successful TV chef, not a very successful restaurant owner. And those are two different things, and the press doesn't get that they're two different things, you know? For a lot of these industries that are, like, kind of art, craft-based, openly desiring running it as a good business is sort of low status.

[1:27:59](https://realalpha.app/v/YdRLpWQARtA/?t=5279) Yes, it's low status. You lose some cool points. It's like, that's what I mean by the GarageBand thing. Like, oh, you sold out. Like, you know, it's like, for me, I'm really, really proud. I sold the Alinea Group three years ago. Our investors got quarterly distributions from the time I started it in 2005 all the way to when I sold it in 2023. And then they got 8x their initial investment walking out the door, right?

[1:28:19](https://realalpha.app/v/YdRLpWQARtA/?t=5299) So I think overall it was like 27 or 28x. Right. So if you put in $100,000 in 2005 into a restaurant that you thought was an art project, in 2019 you got about a quarter million back see this is why i got mad at you last time i was like dude i used to always just say restaurants are a horrible business and i realized no no no the way i bad at the restaurant it's a skill issue well and you know look i mean we could have gotten lucky but like at the at the end of the day like the end of whatever is relatively small like you could say like well you caught the right thing and this and that but you know the first year we did a linear it did about five million in sales and made like eight percent seven percent i was considered really good and i'm going like well that's a giant downgrade from my previous career

[1:29:03](https://realalpha.app/v/YdRLpWQARtA/?t=5343) um and a lot more work and then at the peak like it was doing 20 some million dollars a year and making you know 18 20 percent and like that was i needed to build a software company to do that we need to get rid of all the phone lines to do that you know uh steve bernacki our cfo came up with Merameco charts to do, to do all of the food costing. That wasn't me. That was, you know, a guy that I helped to mentor and then I learned from him. And, you know, it's like all of those things we disseminated freely to the industry. No one wanted to do them. Right. And so like you find yourself during COVID looking at the TV going, oh my God, like it's so broken, the information