Richard Melman, Sam Fox compare notes on the business

Sam Fox, left, with Richard Melman

During the recent MUFSO conference in Dallas, Restaurant Hospitality editor-in-chief Michael Sanson hosted an hour-long dialog with Lettuce Entertain You Enterprises founder and chairman Richard Melman and Sam Fox, c.e.o. and founder of Fox Restaurant Concepts and the 2014 winner of the Richard Melman Innovator of the Year Award.

Melman and Fox approach concept creation and empire building from very different angles, yet they seem to share many values and philosophies. It didn’t take much prodding to get them to weigh in on various aspects of the business. Here's what they shared.

What’s on their plates right now:

Fox will be entering the Chicago market, LEYE’s home base, for the first time when Chicago’s first True Food Kitchen opens in about 18 months. Fox partnered with health guru Dr. Andrew Weil and P.F. Chang’s China Bistro on the concept, which debuted six years ago. It’s expanded to 10 units since.

Melman is turning his attention away from Chicago on at least one current project. One of LEYE’s latest concepts, Summer House Santa Monica, was inspired by the location—a bright, sunny place. The glass-roofed design celebrates the sun year-round. Already open in Chicago, he plans to open a second, in Washington, DC.

On the value of partners:

While partnerships are not the norm for Fox Restaurants, Melman, has always been a big fan of partnering. He has had partners on projects since he launched his first restaurant. “I love partners. I never wanted to be the biggest, or the richest, or the most well-known, so it was an easy decision for me. I sleep better at night knowing I have a partner,” he said. LEYE has some 60 partners, he estimated.

“I don’t know if I could manage 60 partners,” Fox joked. “I can’t manage myself.”

On the increased focus on healthy dining habits:

There’s a reason why two of Fox’s latest concepts, True Food Kitchen and Flower Child, focus on healthy eating. “After listening to our guests, there was so much talk about healthy, gluten-free, dairy free and so on. And when I spent time with Andy (Andrew Weil) talking more about Mediterranean or Asian diets, when we put those two together and worked on the concept, a light went off. Fast forward to today. The kale salad is the number-one selling item in the True Food brand.

“There is so much education out there, the same high you get from a burger at a fast-food joint you can do get with healthy food, and people are demanding it. That’s what they want.

“I believe it’s here to stay, but you have to be careful,” Fox added. “It needs to be genuine.”

Melman agreed that the time is right to offer healthy options for those who choose to eat a certain way.

“We’ve had kale on salad bars since 1971-1972,” Melman joked. “But it was not to eat.”

One of LEYE’s newer concepts, Chicago’s Beatrix, has a lot of healthy options, he added. And he thinks women are driving the demand.

“Guys will come around after awhile, but women lead the way on this.”

On food trucks:

Fox Restaurants recently launched a food truck, and Sam Fox says “it’s working out great: it looks good, and the food’s great, but it doesn’t make any money.” He figured outfitting a food truck might run around $75,000, but the company has invested $300,000 in this baby, a pizza truck called the Rocket, which was equipped with a wood-burning pizza oven. He sees it as a way to publicize the company and stay in tune with the times.

On how Millennials are altering the restaurant landscape:

Melman marveled at how quickly younger customers and employees obtain information and learn. “I rely on the young people in our organization to keep us in tune,” he said, and that includes his two sons and a daughter who are part of the business. And he thinks flexibility is essential in today’s world, when trends seem to have shorter shelf lives.

Fox observed that younger generations want to make a genuine connection with a business, then they want to talk about it. “We need to provide that experience for them,” he said. On the other hand, he added“Some of our older guests just want the restaurant to be quiet. We are working on that, too.”

In the end, he said, a restaurant experience has to be great for both young and old guests. “In a restaurant that’s loud, maybe there is a great spot on the patio where people can enjoy some quiet.”

“The thing I’ve found,” Melman said, “is that younger people don’t like to go to older people’s restaurants. But older people want to go to younger people’s.”

On visualizing new concepts:

“I would like to say there’s a formula,” Fox said. “But there is no formula. I travel, I eat out a lot, I’m into design and fashion, I like to stay ahead of the trends or what people are calling trends. At end of the day it has to make sense from a business standpoint for something to work. The idea may come from traveling or just waking up in middle of the night. It could be a dish, or a word or a song—but it’s never the same.”

Melman approaches new concepts a bit differently. “We’re not creating a style of food,” he said. “If I’m creating an Italian restaurant I’ll ask, ‘how can I do it a little better or different?’ and if it feels right to me, I’ll pursue it.

The LEYE founder also keeps the focus on the stomach.

“In the last 35 years I have never been more than about 20 yards from our test kitchen. We work a lot on the food. If the food excites me, it will lead to something good.”

Tweaking concepts, future of fine dining

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On tweaking restaurants:

Melman is constantly seeking improvements, which can present a problem. “I drive my guys crazy with changes all the time,” he admitted. His tendency is to nurture the concepts he has created, and he’ll make adjustments if he sees something he doesn’t like. Larger restaurant companies, which are driven by quarterly earnings, don’t have the luxury of adaptability, he said. “If you concentrate on profits, then other things go,” he said. "So in the next quarter, when the food is not so good, profits are down.

“For me, it’s easier because it’s a smaller boat to steer.”

Fox said his company will fine tune menus during the early days of a concept. "I’ve opened 60 restaurants, and it’s never the same,” he said.

On the challenges of hiring:

Melman said he doesn’t buy the argument that good help is in short supply. “I think (good candidates) are out there, but they are harder to find,” he said. When LEYE was opening a steakhouse recently, thousands applied for three dozen server spots.

“In sports, you usually play better when you play with a better team,” Melman said. “If you have a great team, agreat culture, and spend a tremendous amount of time on training and development, there are a lot of good people out there, you just have to find them.”

Fox noted that about half of the staffers hired for the first Flower Child this year had never worked in a restaurant before, and that recruiting, especially for a new concept, demands creativity. He hired one person to attend yoga and spin classes to recruit help for True Foods.

“People who answer the Craigslist ads are not the right people,” he said. “Great servers already have jobs—if I was a great server, why would I quit my job and go to work at concept that I had never heard of without knowing how busy it will be?”

On the future of formal restaurants:

Is there still room for fine dining? “Today, I wouldn’t be interested in a three-hour meal. The whole world is moving faster,” Melman said.

Fox agreed. “I can’t sit for more than 30 minutes,” he said. “But you’re seeing that quality of food in more casual environments."

On the other hand, he added, “if you look at how luxury has performed, it’s still doing well. Service is really the new luxury.”