The property adage "location, location, location" is still relevant to the restaurant business, but the bottom line is "chef, chef, chef". There's a special synergy between a chef and their location which can make or break a restaurant business. Put together a swanky premises with a top chef and you have a winner, which is why, rumour has it, some Irish restaurant owners are willing to pay as much as £90,000 for a good chef.

Lisney's Odilla Ratigan, a specialist in buying and selling restaurant properties, says that when a restaurant is sold these days, it's not because it is doing badly, it is often because the chef has decamped. She explains, with delicacy and diplomacy, that often the split occurs because of "changes in personal relationships" between partners. In other words, when a couple opens a restaurant and one of them is the chef, a breakdown in the relationship can put everything at risk.

In the good old days - say, 10 years ago - an ambitious chef could pick up an urban restaurant location for half nothing and set about making a name for themselves. The property boom has changed all that, increasing the fragile interdependency between chefs and their business partners.

With a top restaurant kitchen costing at least £500,000 to fit out in stainless steel from top to bottom, and with restaurant leaseholds going for anything from £150,000 to £750,000, anyone opening a restaurant would want to know what they are doing. Knowing how to cook clearly isn't enough.

The rising cost of a quality location is becoming such a headache, that many talented chefs prefer to work in partnership, so that they are not distracted from their artistry in the kitchen by financial worries. This is the reason why some of the most well-known chefs are entering into business pacts with hotels. Patrick Guilbaud, the Irish establishment's French restaurateur of choice, is now secure in his new home, The Merrion. Conrad Gallagher's Peacock Alley has relocated to the new Fitzwilliam Hotel and is running so smoothly, that Mr Gallagher has since opened another restaurant, The Metropolitan, in a new complex developed by a businessman in Letterkenny, Co Donegal.

The cult of the star chef - for which the diner pays handsomely - is just one aspect of the revolution in attitudes to food in the Republic. Rather than spending the night in the pub, people are using meals out as a total dining experience and their main way of socialising. The styles of establishments have also changed because with people dining out so often, they want to vary the dining experience. Travel has made the Irish palate more sophisticated, so that people now want a wide choice - from traditional French to fusion. Demanding diners also expect more than just the food on their plate. They want atmosphere and image - in short, some place to flaunt their Celtic Tiger booty.

Objective Government statistics quantifying the restaurant boom are not available, which is odd considering how important the restaurant business is to tourism. But just look at Temple Bar, in Dublin, where the number of restaurants has increased from 27 to 67 in the past eight years, to see the phenomenon. Annette Nugent of Temple Bar Properties says that along with the increase in numbers, the type of restaurant has changed. "In the past, Temple Bar was known as a good value restaurant area, with the Bad Ass Cafe and the Elephant and Castle leading the way. But a lot of the newer restaurants are pitched at the higher end of the market - such as the Mermaid Cafe, The Tea Rooms at the Clarence, Eden in Meeting House Square, and Bruno's. Temple Bar has also developed as a "foodie" area, with open-air food market on Saturdays in Meeting House Square selling gourmet cheeses and olives, among other things," she says.

There is a perception that tourists have fuelled the restaurant growth in Temple Bar, but in fact the diners are 50 per cent Irish and 50 per cent foreign visitors, according to a visitor survey conducted at the height of summer 1999.

Another measure of the increase in middle to upper-market restaurants is the Restaurants Association of Ireland (RAI), whose membership has increased by 30 per cent year on year for the past two years, and now stands at 450. "The Irish dining public is more discerning than ever before," says Henry O'Neill, chief executive of the RAI. "The ambience in Irish restaurants today has to be as high a standard as diners can find in any other capital city. We have a dining culture now, which we never did before," he says.

It used to be that prawn cocktail and fillet steak were enough to satisfy the Irish gourmet. Today, food preparation is much more labour-intensive with chefs doing more with cheaper cuts of meat, he says. They have to if they want to make a profit.

Terry McCoy, president of the RAI, says that if you spend £40 in his restaurant, The Red Bank, in Skerries, you can be assured that a mere 4 per cent, or £1.60 net profit will go to him. Like the rest of his colleagues in the business, Terry has huge overheads. He spends 35 per cent of his turn-over on wages, 25-40 per cent on raw ingredients and 10-12 per cent on overheads such as rent, heating, lighting, power and insurance. Depending on the location, overheads can be even higher.

While the restaurant business may appear to be in the ascent, net profit margins are woefully tight, at 5 to 8 per cent on average. Labour costs have risen from 25 per cent to as much as 36 per cent in the past year. Waiters are earning £250 to £600 per week (including tips) and chefs are demanding average salaries of £50,000 to £60,000 per year. It takes five chefs to prepare a complete meal for 20 diners in a highclass restaurant.

There is a perception that the restaurant business is profitable, but all is not what it seems. "It's the worst of times and it's the best of times," says Mr McCoy. There are more consumers than ever before who want to eat good food, but at the same time, staff, rents and rates cost more than they ever did.

Astronomical property costs are a major liability for new restaurant businesses starting up. A leasehold in a good location in Temple Bar can cost £250,000, and there may be a premium to be paid on top of that, not to mention the rental costs, which have doubled in the past year in some cases. The business brains need the chefs as badly as the chefs need the investors.

According to Odilla Ratigan of Lisney's, the cost of buying a restaurant as a going concern depends on turnover, fit-out, location, length of lease, existing rent, whether rental levels are undervalued and when the next rent review is scheduled.

She is looking for £150,000 for a leasehold interest in The Chameleon, an Indonesian restaurant in Temple Bar. The restaurant is typical of Temple bar, she says, in that it has "the touristy foreign element". The fit-out includes authentic Balinese artifacts, art and furniture. It has a good turnover, positive reviews in the press and has a reasonable rent of £13,520 per annum for 1,139 sq ft of space. The rent will be reviewed before the assignment of the lease (a likely guide is 25 per cent higher than the existing rent).

LEASEHOLD interests are going for up to £300,000 but in addition to that cost, existing tenants are looking for once-off premiums to recompense them for all the blood, sweat and tears that have gone into building up their businesses.

"UK occupiers are amazed, they don't expect to pay premiums. It's a sign of the dining revolution that we are in that people will pay money to take over leaseholds in good locations," says Ms Ratigan.

Temple Bar restaurants have turnovers ex-VAT of anything from £6,000 to £20,000 per week, or £180,000 to £780,000 per year, she says.

The highest profits are being made by restaurants in the lower end of the market. The less labour-intensive the operation, the higher the profit margin.

Eddie Rockets has a 15-18 per cent net return on turnover, which is 10 per cent higher than the average high-class eaterie. Eddie Rockets started with one restaurant in South Anne Street 10 years ago, and now has 19 restaurants, including 15 in Dublin and one each in Limerick, Galway and most recently Madrid and Gran Canaria.

Irish restaurant properties are getting out of reach, according to Eddie Rockets operations manager, Jonathan Parkhill. "Location is key to the success of Eddie Rockets, but prices have gone sky high in the past 18 months. In the last year or so, it is getting harder and harder to find the right locations," he says.

Despite, or perhaps because of, the boom, there are fewer restaurants on the market in 1999 than there were in 1998, says Ms Ratigan. "I think there is an attitude of `make hay while the sun shines'. If your restaurant is doing well and you are making money, it doesn't make sense to sell it," she says.

But Henry O'Neill has a different perspective: "You can make money with difficulty in the restaurant business. One sign of how difficult it is, is that there are not many second-generation people in the restaurant business. The children of people in the restaurant business have seen the hours and dedication required to make a successful business. If you have £500,000 to start a business, you are better of putting it into the bank at low interest rates than putting it into the restaurant business. You'll never get rich in the restaurant business. If you want to make money in the restaurant business, be a chef."