Carl Schuster | Crain's Philadelphia

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Carl Schuster

Background:  

Wolfgang Puck Catering — co-founded by celebrity chef Wolfgang Puck and CEO Carl Schuster — provides restaurant-style catering for corporate, cultural and entertainment venues and events, such as the Academy Awards Governors Ball, as well as for weddings, convention galas and family occasions. The company specializes in organic ingredients sourced from local farmers, sustainable seafood and humanely treated animals. WPC operates in Los Angeles, San Francisco, Seattle, Dallas, Chicago, Boston, Philadelphia, Charlotte, Atlanta, Las Vegas and Washington, D.C., among other cities. WPC is part of Compass Group North America, based in Charlotte, N.C.

The Mistake:

One of the first big leases we did was a very high-profile project in Los Angeles. It was a very competitive process to win the rights to this contract, which was tied to a lease. It was the first; we had always done management contracts or venue contracts. We had never done pure leases. And it happened to be the biggest lease I ever did and probably have done.

Within that lease, there's things I didn't know and wasn't advised, kind of being the young upstart, on certain things with the taxes and the property tax increase when a building is sold.

It was a building that was built for a lot of money, and we were the largest tenant in the building, and the building then subsequently sold. Then our property taxes went up dramatically, almost tripled. And the way I negotiated the lease, I had protected a lot of things, but I hadn't protected that. So that was a really valuable lesson in any real estate deal I did thereafter, and it was an expensive one.

Luckily, the landlord of that building has been fantastic at working with us and renegotiating the deal over time, but it was a very expensive lesson.

That was a really valuable lesson ... and it was an expensive one.

The Lesson:

Hire experts who are going to look at the details when you're doing something that's not in your comfort zone. ... you'd better have experts to help you and not be too quick or too excited to win a big piece of business. You've really got to do the proper due diligence and get the proper experts to help you look for the loopholes.

They weren't hiding anything. I was just naïve.

Pictured: Carl Schuster. Photo courtesy of Wolfgang Puck Catering.

Follow Wolfgang Puck Catering on Twitter at @WolfgangPuck.

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