Saad Ahmed opened the Crowne Hookah Restaurant and Lounge on Broadway last summer hoping to attract the growing downtown college crowd.
But on Tuesday, the 26-year-old entrepreneur almost lost his liquor license for violating a city ordinance. The law requires that at least 50 percent of a restaurant’s food and beverage income come from the sale of “meals prepared, served and consumed on the premises.”
Columbus Council considered the case Tuesday morning during a revocation hearing at the Citizens Service Center.
Yvonne Ivey, the city’s revenue manager, recommended that the city revoke the alcohol beverage license for the hookah business located at 1113 Broadway.
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“Some of the red flags that we noticed when we did a compliance audit was that the markup on food was higher than the markup on alcohol,” she said. “And based on reported sales through purchases, food markup was 552 percent and alcohol markup was 465 percent. And normally, the alcohol markup would be much greater than food markup.”
Upon further investigation, auditors discovered that customers had to spend at least $20 whether or not they made a purchase, and it was charged as food, according to Ivey. She said the $20 minimum appeared to be a “cover charge,” which is also in violation of the ordinance.
Ahmed is the son of Dr. Sajid Ahmed, an oncologist at the John B. Amos Cancer Center. He said he’s a 2010 graduate of Brookstone School, and is working on an MBA at the University of Alabama at Birmingham.
Ahmed said he and his father own the new Best Western Plus on Veteran’s Parkway, a Marco’s Pizza franchise in Fort Mitchell and a gas station and retail plaza, also in Russell County. The Crowne Hookah Restaurant and Lounge is his first business venture without his father, and he has invested $225,000 of his own money.
In an interview with the Ledger-Enquirer, Ahmed said he was aware that the restaurant fell short of the 50 percent requirement, but he’s working on increasing food sales.
“It takes a year to stabilize any business,” he said. “They took my first 90 days and said, ‘Oh, , he doesn’t have the ratios and we’re going to have to revoke it.’”
Ahmed said he could convert the restaurant into a bar and avoid the requirement altogether, but that would restrict his service to college students.
“A lot of people have restaurants and want to become bars,” he said. “I’m the opposite where I want to stay a restaurant. I don’t want to become a bar.”
Ahmed said he instituted the minimum $20 fee because people would come in, sit for hours at a time, and spend less than $20 on a party of five. Meanwhile, other paying customers waited outside 45 minutes. He said it’s only on Fridays and Saturdays after 10 p.m.
“I wasn’t really maximizing my profit revenue without some sort of rule or regulation for people to spend money,” he said. “If the customer spends $20, he’s not charged any fee. But if the customer spends, say, $11, he or she will be charged a $5 cover fee.”
On Tuesday, several councilors thanked Ivey for her diligence in auditing businesses and enforcing the city ordinance. However, they sympathized with Ahmed, who they described as a young entrepreneur they hope will succeed.
“I know that in the past we have extended for a business to get organized and established to make sure they do meet the requirements,” said Councilor Evelyn “Mimi” Woodson, “because sometimes when businesses start up they don’t really understand the process of what’s going on.”
Ivey said some businesses have received a 90-day extension, and Ahmed would have to show what he has done to increase food sales when the extension expires.
Councilor Bruce Huff said he stopped by Ahmed’s restaurant and told him that he would push for an extension, but he emphasized that during that time Ahmed would have to work with Ivey to rectify the situation.”
“I thank you for being a new business owner in the city,” he said. “And if the two of you all can work together hopefully things will work out.”
Councilors Gary Allen, Jerry “Pops” Barnes and Mike Baker also expressed confidence in Ahmed’s ability to turn the business around.
Ahmed told the council that his goal is to create a safe and enjoyable place for Columbus State University students who live in the uptown area.
“I envisioned a lounge concept,” he said, “somewhere with a lot of couches, background music, televisions, free Wi-fi, smart chairs, great food and great drinks.”
The council voted unanimously to extend Ahmed’s license for 90 days.