On The Concept Cutting Edge

RH Staff

BY MEGAN ROWE & MICHAEL SANSON
PHOTOGRAPHY BY JOE GLICK

Looking for a little inspiration, a chance to network and a hefty helping of practical advice, budding and established empire builders gathered in Chicago October 13-15 for the sixth annual Concepts of Tomorrow (COT) Conference.

This year's event, presented by RESTAURANT HOSPITALITY and sponsored by key industry partners, kicked off with an opening reception honoring some of the Rising Stars featured in the magazine over the last year (see story, p. 40). In presenting the awards, editor Mike Sanson noted how RH has been committed to showcasing restaurant concepts with exceptional promise, but has an even longer tradition of singling out talented individuals on the culinary cutting edge.

The next morning, RH publisher Jess Grossberg welcomed veteran and newbie operators and suppliers gathered at the Fairmont Hotel. And who more appropriate to kick off a restaurant program than a member of the legendary Brennan clan of New Orleans? In this case, it was Alex Brennan-Martin, long-time quarterback for the family's Brennan's of Houston outpost. Brennan, who also re-cntly coauthored The Simple Truth About Your Business—presented the keynote address. Brennan, who accepts nothing at face value, led the audience of operators and suppliers on a philosophical journey. He set the tone by pointing out that by using terms like "concept" and "unit" to describe a restaurant, "we really do a disservice to ourselves and some of the passion that brought us and others before us into the industry."

"We're referred to as hamburger flippers?and worse," he said. "But we have a special place in the economy, and often we overlook it."

Despite his obvious passion for the restaurant business, Brennan-Martin admitted he has faced bouts of burnout. In the process of running his Houston restaurant and planning debuts of a Commander's Palace in Las Vegas and Cafè Adelaide in New Orleans, he started thinking about how he could refocus his and his staff's energy. He also wanted to put his Houston operation on a more level playing field with the competition during some difficult economic times.

"Frankly, we buy the same piece of fish as Houston's down the street," he realized. "But we put hurdles in front of our customers." Higher prices, a less convenient location and the leisurely pace of meals means a visit to Brennan's asks more of its guests. "There must be a reason why people are willing to jump over these hurdles," he decided. The compelling reason people would pay more for a meal and go out of their way to dine at Brennan's, he concluded, was the restaurant's ability to create memories. He used that assumption to guide his employee training.

The restaurant developed a decisionmaking guide to help empower employees, and the results were remarkable. "Employees started taking more ownership," he recalled. They were told, "there's no simple mistake you can make that we can't fix," and they took that advice to heart.

Meanwhile, to keep employees happy, Brennan's also created an employee bill of rights designed to create a culture of open communication and pathways for reward and advancement. In the spirit of southern hospitality, Brennan's also instituted a "be nice or leave" policy for employees.

Timing Is Everything
Entrepreneur Antonio Swad , who did well for himself by selling Wingstop restaurants to a group of investors in 2003, walked the audience through the evolution of his latest pet project, Pizza Patrón (profiled in the August 2004 issue of RH). As Swad explained, he hit on the idea of selling pizzas to Hispanics in the mid-1980s, but it wasn't until recently that he figured the time was right to roll the concept out via franchising. In the past year, he has turned the four original units in Dallas into a 100-plusunit empire in a hotly pursued market.

Swad, like others, believes the Hispanic population has huge growth potential—so huge, he said, that he considers published forecasts "wildly conservative."

"It's a very young demographic," he added, "So everything we do has to be geared to young folks." Latinos tend to marry young and have families quickly, and Swad believes that demographic is perfectly matched with Pizza PatrÛn, which sells takeout-only pizzas at an affordable price in a bilingual environment.

As a franchisor, Swad avoids three practices prone to generating ill will and mistrust among licensees: operating stores in the same markets as franchisees, redirecting advertising funds into unrelated areas and developing alternative revenue streams ( such as rebates) from preferred suppliers.

Ultimately, Swad believes the success of a concept depends on seven ingredients:

Surviving Growing Pains
At some stage, all chain concepts experience growing pains. Two speakers at the COT Conference explained how they've been reinventing their expanding brands to deal with a changing marketplace.

Sheri Miksa , president and CEO of Rubio's Fresh Mexican Grill, described her company's efforts to carve out a new "affordable" subniche in the fast casual category. In 2002, Rubio's launched a new prototype and a menu that stressed the 150-unit brand's value. Its goal was to position Rubio's as an affordable choice and thus encourage more frequent visits.

"Listen to consultants, but go back and listen to your gut." ---Billy "bd" Downs, bd's Mongolian Barbeque

Miksa said the changes were designed to overcome two perceptions that would deter traffic into Rubio's. The menu redesign, she said, targeted those who assume "I have to pay a lot to eat at a fast casual restaurant," while the dècor— which was revamped to emphasize the "fresh" and "grilled" aspect of the restaurant in a warm, casual environment—addressed the "I don't want to feel like I have to dress up to go there" customer.

Growth is a good thing, if it's done right. That's what Billy "bd" Downs , founder and CEO of bd's Mongolian Barbeque, discovered the hard way. In 1999, when the brand had 15 units open, "we got cocky," Downs recalled, and launched a franchising program that doubled the chain's presence within two years. But caught up in the excitement of expanding, he admitted, the company failed to train franchisees properly and made a number of questionable real estate deals.

By mid-2001, bd's had 30 locations, many of them underperforming, so Downs decided to regroup. He negotiated with a number of franchisees to close their restaurants. Today, about 24 units remain, and future growth will come at a more measured pace: He predicted the addition of 7 locations in 2005, 12 in 2006 and 15 in 2007. Downs said he plans to focus on Midwest development, where the company already has a strong base, and slowly expand from there.

Downs said the time is right for the Mongolian barbeque concept, since it allows diners to choose their own ingredients, and "control is huge." With so many food allergies, other health concerns and special diets, he said, "people want to control what they eat."

For COT attendees considering a foray into franchising, Downs offered the following advice: "Listen to consultants, but go back and listen to your gut."

Want to Franchise? What to Ask
Nontraditional, or "angel" investors, are always on the lookout for the next big idea. Financial guru Dan Rowe , CEO of Fransmart, counseled a little introspection for anyone seeking backers to fund growth of their concept.

Rowe said growing concepts first need to answer for themselves the types of questions they can expect from potential investors, such as: Is the food really special? Do customers understand the brand? Does the management team have appropriate experience? What are the unit economics?

Operators who want to succeed in the franchise game, Rowe added, can't just look at what's in it for them. They also need to figure out how they will help potential franchisees succeed, since their success will help sell additional franchise units. A good exercise, he added, is to consider the strengths, weaknesses, opportunities and threats for all aspects of the concept.

When it comes to choosing real estate, Rowe said, it's essential to look at more than just demographics of an area. Analyze the level of saturation and the demand. "I visit a lot of sites, and I always play the bad guy," he explained. "I look for what's wrong."

Winning Wine Sales, Staffs
Teach your staff about wine, get them excited and they'll sell more wine. That was the bottom line from Brian Duncan , wine director at Chicago's Bin 36 restaurant, who talked about driving profitable wine sales.

While Bin 36 may be an exception-half of the restaurant's sales come from beverages, and three quarters of those beverage sales involve wines by the glass—any restaurant selling wine can learn from the practices in use there.

Probably the most important rule to heating up wine sales, Duncan advised: Create excitement. That starts with staff training, he said, since he believes "the staff will sell more if they know more." Bin 36 holds nightly training and two employee-led mandatory wine classes per week, with the goal of teaching servers how to talk to guests about wine.

"If you create visuals for people, all of a sudden they want to try something. It makes them curious." -Brian Duncan

The wine list can also help sell the wine. Duncan said he writes sexy descriptions for the wine list. "If you create visuals for people, all of a sudden they want to try something. It makes them curious."

Finally, Duncan suggested approaching wine list creation with an open mind and consider listing wines from lesser known wineproducing regions. He said the quality of wine from many parts of the world has improved dramatically. And, he added, there's no need to shy away from twist-off caps or very inexpensive wines. "If it's good and it's quality, people don't care," he observed.

For emerging concepts, consultant Bill Main of Bill Main & Associates said staying power demands slow, constant, incremental improvements in the business. The second-day keynoter advised starting by building a profile of the typical customer and developing a total marketing strategy that focuses on awareness, trial, repeat and frequency with that target audience.

Internally, one of the biggest ruts restaurant operators fall into is accepting that good employees are hard to find and keep. Main suggesting combating that mindset by deliberately working to become the employer of choice: offering a career path, benefits that employees value (ask them to tell you what they want), creating a fun environment, paying a competitive wage and communicating. "The number one reason employees leave foodservice is poor communication," he stressed.

A sometimes-overlooked piece of the turnover puzzle, Main said, is the manager. But it's a key piece, because because half of employees who quit don't quit the company, they quit their boss. To combat that, he counseled looking for leaders, not just managers. The difference: "Managers get things done; leaders get the right things done," he said. Leaders know how to brainstorm, and they know how to delegate.

Striptease for a Cause
To be part of a brand, Jeff Sinelli believes, you need to live it, eat it and be entrenched in it. As he spoke, he made his point by peeling off his conservative business attire to reveal a shirt, hat and shoes branded with the colors and logo of his new brainchild, Which Wich?. Sinelli, who sold his Genghis Grill concept in 2003, spent a year developing the new sandwich-centric concept's first location in Dallas. The menu is simple: hot sandwiches, all at the same price (with one exception) and only four optional side dishes.

The biggest point of departure for Which Wich? is the ordering system. Guests grab a brown paper paper bag stamped with one of three categories—meat, vegetarian and breakfast—check off what they want on their sandwich ( filling, bread, extras), then write their name at the bottom. The last part is deliberate. "The moment someone writes their name on the bag, they're part of the concept. They're engaged," Sinelli said.

The idea may seem a little offthe-wall, but apparently the public gets it. Less than a year old, the first store has had lines out the door. At the COT Conference, Sinelli said he had eight additional stores in development, a major deal in the works and plans to grow through franchising. He designed Which Wich? with a low development cost and simple operational logistics to help fuel franchise interest.

"Singular-focus concepts, I think, are the trend right now," he observed.

"This generation needs constant feedback, and that means daily."
-- Fred LeFranc, Ruby Restaurant Group

Developing Great People, Great Brands
Growing enterprises have different needs depending on their stage in the business life cycle, and Fred LeFranc ,

president and COO of Ruby Restaurant Group, walked the COT audience through various ways to fulfill those needs. He said the right choices depend on answers to four critical questions:

In the end, LeFranc noted, a company's success depends most heavily on a motivated staff.

To get the most out of the staff, he said, the organization must have a clear business mission, organizational structure and team planning strategy. Staffs need effective managers, development and, perhaps most important, feedback to thrive.

"This generation needs constant feedback, and that means daily," LeFranc said. Ultimately, the goal is to make employees more self-reliant. "It's a lot like raising children," LeFranc observed.

People are important, but to maximize your success, developing a distinctive brand is essential. One speaker James Emery, president of Viewfinder Consulting, gave examples of memorable brands and described the qualities they shared. Those include a focused promise (e.g., Maytag's claim of dependability; Grey Poupon's luxury gourmet image), an advantage over competitors, a unique proposition, a premium price, an emotional connection with consumers and the power to create strong word-of-mouth awareness. Th makers of these brands know their customers well.

Great brands, Emery concluded, "are not viewed as commodities; they have a clear point of difference."

"Great brands are not viewed as commodities; they have a clear point of difference."
--- James Emery, Viewfinder

He suggested that operators find three words that sum up their brand, then use those descriptors to establish a distinct brand personality. Why go to the trouble? "Strong brands create and drive consumer preference?they will seek out those brands," Emery explained.

It's not too soon to plan to attend the 2005 Concepts of Tomorrow Conference. For information, call Katie Smith at 216-931-9559.