How This Mission District Restaurant Fought Back From Financial Doom

At the end of 2021, Marko Sotto believed his foray into business ownership was over. Sotto is the owner and founder of restaurant BarZotto, and after two years of attempting to make money amid the impact of the COVID-19 pandemic, he’d lost hope. “The exhaustion, the fatigue, the hardship of trying to keep operations open, even with all my colleagues and friends…” Sotto says, trailing off. “I had pretty much given up on the thought that we would reopen.”

Thankfully, he was wrong. Sotto’s business managed to survive through a series of smart financial tactics and, maybe obviously, sheer determination. As COVID surges in the Bay Area once again, the team at BarZotto has reopened their doors with a confidence that only comes from a knockdown, 12-round fight with some of the largest issues all restaurants face right now: inflation, staffing, and diners hesitant to head out for a meal.

Erin Ng

Sotto opened the Mission District restaurant in 2016 as a counter-service spot driven by his own pasta recipes and based on scalability — an idea the pandemic shot down. Michelle Minori, an early kitchen manager, was named a 2017 rising leader and former Chronicle food critic Michael Bauer was a fan of the main courses upon first try. Like anyone else, though, by the end of 2020 Sotto and his team were trying to weather the pandemic’s second shelter in place. Sotto says the team knew delivery and pickup were going to burn the business’ cash. So Sotto says he had to lay off some of the restaurant’s staff, and, with the support of a Paycheck Protection Program (PPP) loan, was able to keep the business running. Most of the money went to keeping the lights on rather than paying for labor costs, as BarZotto was hemorrhaging money at this point, Sotto says.

This is where Sotto made a move after realizing even the truncated version of his business — a to-go kiosk, really — wasn’t panning out. He applied for another loan and he put the restaurant in hibernation mode. He knew it could take a while for the money to actually show up, if it did at all; being approved for the money is not the same thing as being funded, as Sotto found out, and both parts of the process take time. A second loan did come though, and that’s when Sotto says he felt a glimmer of hope. “It felt like a business on life support for so long,” Sotto says. “I decided we were going to make it the restaurant it always could have been.”

Then Sotto pulled his largest pivot yet: last year he tapped chef Nick Pallone to rework the entire BarZotto menu. Now, the BarZotto of 2022 looks nothing like the original, he says. The guest experience is a much higher priority than it was under the fast-casual approach; that sense of care is cultivated by new general manager Mere Shabow, also the brain behind the new wine list and wine cocktails. Items like the pizza al taglio, a relatively obscure pie made with dough developed by baker Matt Jones, is the type of full-scale offering Sotto never thought he’d sell. “We had to draw our line in the sand and find out what would bring people back after the pandemic,” Sotto says. Pallone, who was the executive chef at Florio, says regulars have begun to trickle back in, and the fuller menu is part of the draw. Erin Sweet, who Pallone worked with at the now-closed Cockscomb, gives the pastry program new legs. Both Shabow and Pallone point to the popularity of their bucatini amatriciana and the simple but satisfying pork chop.

Erin Ng

Erin Ng

Pre-pandemic catering was a massive revenue stream for BarZotto. That, of course, went bust, though the team hopes to get a decent amount of catering business again someday. Delivery apps were always a necessary evil for the team. But investing in the design and service in-house was a way to gain a sense of security, to give guests a throughline to the heart and soul of the business. Grab-and-go items are more interesting to the team than lukewarm pasta carousing through traffic. The bet, to convince people to give the new BarZotto a try, can’t be sullied by a cranky DoorDash driver or a wonky off-site lunch. “We’re bringing professionalism back to the kitchen,” Sotto says. “We want to teach our trade.”

Rent costs and inflation continue to be major obstacles, even with a renewed sense of life. Sotto says customers are figuring out what’s really valuable to them at this stage in the game: is it worth it to venture out to try that overhauled restaurant? Or is it more valuable to just stay in? Customers complaining of high costs are more frequent than ever, he says, but he wants an audience who understands and cares. “That’s the question mark over everyone’s head because we know what the product and labor cost is in every dish,” Sotto says. “But does the diner know? And does the diner appreciate it?”

Still, Sotto and the team feel optimistic for the first time in years, he says. BarZotto is a new animal, and, if shooting for the moon doesn’t end up with a place among the stars, Sotto is okay with that. “If we don’t succeed, we want to at least go out on our shield,” Sotto says.

Kelly Huibregtse, A Side of Sweet