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Contents At A Glance

R&I ? Editorial Archives ? 2004 ? November 1 ? Special Report

Multiconcept Momentum
Continued growth any which way they can is the strategy for innovative restaurant companies.

Multiconcept restaurant operators (MCO) find themselves in a frenzy of activity amid a revved up economy and continuing demand for dining-out options. Whether creating new concepts, expanding established operations or simply shaking things up at existing units, these companies are branching into multiple formats, extending their foodservice offerings into different markets, additional segments and less traditional venues.

?In order to create value, a multiconcept restaurant operator has to have new projects,? says Peter Glazier, co-founder and CEO of The Glazier Group in New York City, which owns and operates five restaurants and two catering operations in New York, New Jersey and most recently, Texas.

An MCO portfolio: Kimpton Hotels & Restaurants? South Water Kitchen (top) and Ruby Room (above); The Patina Group?s new Tortilla Jo?s (below); and D?Amico & Partners? D?Amico Cucina (bottom).

For many restaurateurs, these projects involve taking advantage of expanded opportunities in the marketplace. Multipurpose sites such as hotels, airports and museums are not novel to the industry, but their current red-hot, high-profile status is a development to watch and one that will continue to fuel expansion in the year to come. Driving this trend, as always, are consumers, who increasingly expect top-notch foodservice options no matter what their location.

?Whether it?s a museum-goer or someone at the airport, customers want better food and a heightened experience with food and beverage. That creates more opportunities for restaurateurs,? says David Swinghamer, whose Union Square Hospitality Group is capitalizing on this evolution with three new restaurants slated to open in New York City?s Museum of Modern Art by January.

As in past years, both fresh and established concepts fill out the slate of multiconcept companies? recent and planned openings. Some MCOs, such as Baltimore, Md.-based Phillips Seafood and New York City-based B.R. Guest Inc., view new markets for current brands as their main growth vehicles. Others, including Gibsons Management in Chicago, Philadelphia?s Starr Restaurant Organization, and Consolidated Restaurant Operations in Scottsdale, Ariz., will debut new concepts as well.

Fueling these restaurateurs? general sense of optimism are improving business conditions that include a more-stable economy, rising employment, increased consumer spending and a pickup in business travel and tourism. Despite a tough cost environment regarding products, labor and insurance, such a positive outlook likely will continue to propel a growth surge in the year ahead.

Lodging Launches
A renewed focus on partnering with hotels to offer top-shelf dining is a high priority for many operators, but B.R. Guest has taken the idea a step further by launching its own lodging brand, James Hotels. The first property opened in February 2004 in Scottsdale, Ariz.; plans call for a second in Chicago next year.

?It was an evolution,? Partner and CFO Michael Jacobs says of the move into lodging. ?We had a desire to be involved in the hotel business because it was such a [logical] adjunct to the restaurant business.?

Showpiece: Lark Creek?s Bradley Ogden

Besides the advantages inherent to hotel locations?a built-in clientele and supplementary revenue streams from in-room dining and catering?B.R. Guest also views these properties as anchors for new markets. The company will include at least one restaurant inside each James Hotel (the Scottsdale location features high-end Italian spot Fiamma Trattoria) but the potential to open outside concepts is significant as well. In fact, a Blue Water Grill is under construction two blocks from the Chicago hotel site.

Other multiconcept operators are expanding their lodging presences as well. Chef Jean-Georges Vongerichten lent his name and expertise to Bank Jean-Georges at Houston?s Hotel Icon, opened in January. The Beverly Hills, Calif.-based Wolfgang Puck Fine Dining Group, with a portfolio that already includes five hotel restaurants, will in the next year open a 100-seat contemporary steak restaurant at The Regent Beverly Wilshire Hotel, says Tom Kaplan, senior managing partner.

Pairing dining with lodging literally is the name of the game for San Francisco?s Kimpton Hotels & Restaurants, which in July opened its first New York City property, 70 Park Avenue, featuring the new Silverleaf Tavern. While hotels? pursuit of high-end chefs and restaurateurs is indeed on the upswing, Chief Operating Officer Niki Leondakis foresees the potential for a shakeout.

Showpiece: Wolfgang Puck Bar & Grill

?There is more expense related to the structure of these deals, so if the deal isn?t done properly there may be a lot of increase to the top line but not the bottom line,? she says.

Venues With Potential
Streetside units comprise part of the expansion strategy for Phillips Seafood Restaurants? fast-casual brand, Phillips Famous Seafood, but a licensing partnership with HMSHost offers an additional vehicle to help the chain take off. The Bethesda, Md.-based travel concessionaire opened Phillips? first two airport units this year at the Charlotte (N.C.) Douglas International Airport and the Savannah/Hilton Head (S.C) International Airport.

Rent structures and the availability of labor remain challenges in such locations, but captive audiences and high foot traffic balance the negatives, says Aden King, director of operations for Phillips Famous Seafood. A growing airport presence will introduce the brand to a broader consumer base as well.

Red Star Tavern is one of RDGChicago?s primary growth concepts.

Union Square Hospitality Group?s venture with the Museum of Modern Art also stemmed in part from a desire to attract nontraditional consumers, whom the company first targeted in 2002 with casual barbecue spot Blue Smoke and again this past summer with quick-service venue Shake Shack. In addition to the three museum restaurants, Union Square will provide catering and employee foodservice. The group is open to exploring additional prospects in both arenas, according to Swinghamer.

?Restaurants are looking at other opportunities: catering in all forms; smaller, more-casual spinoffs of original ideas; even quick service these days,? he says.

Another opportunity is the grocery channel, where prepared foods and in-store dining are growing in popularity. Chicago-based Lettuce Entertain You Enterprises Inc. plans to open 18 fast-casual Asian operations dubbed Shanghai Circus with Edina, Minn.-based Lunds and Byerly?s stores. The restaurants also will provide catering, a growing revenue stream for multiconcept operators.

The Glazier Group, whose portfolio includes two dedicated catering operations, garners almost 40% of its revenue from that side of the business. To further capitalize on catering?s potential, the company?s new Strip House in Houston includes more meeting room space than any of its previous locations: two 30-seat meeting rooms and a larger setting that holds 110.

Spiffing Up to Stay Fresh
The excitement of launching new restaurants is no excuse for letting current concepts fall by the wayside. How some operators tuned up existing operations in the past year with efforts big and small:
Former Chef de Cuisine Neil Murphy has taken over as Executive Chef at New York City-based
Smith & Wollensky Restaurant Group?s Park Avenue Cafe. The restaurant also has a brightened décor and revamped wine program.

Wolfgang Puck Fine Dining Group swapped its casual cafe operation at the MGM Grand Las Vegas for the more upscale Wolfgang Puck Bar & Grill in accordance with the hotelier?s desire for more high-end dining options. The $5.5 million project included a completely overhauled interior by designer Tony Chi.

Sushi teams now are in place at both of Lettuce Entertain You Inc.?s Shaw?s Crab House locations. The Chicago unit added a dedicated sushi bar, but selections at the suburban outpost come from the kitchen.

Starting From Scratch A host of multiconcept operators debuted restaurants in the past year and/or are planning new operations.

  • B.R. Guest, New York City: Vento Trattoria + Level V opened in April serving more-casual fare than high-end sister concept Fiamma. The Level V bar features seven private alcoves that accommodate four to 16 people.
  • Consolidated Restaurant Operations, Dallas: Specialties at upscale gourmet Mexican restaurant Cantina Laredo?opened in September in Scottsdale, Ariz.?include fish, grilled chicken and steaks.
  • Gibsons Management, Chicago: Early 2005 will see the arrival of Quartino, an Italian-style small plates/wine bar concept with Chef John Coletta at the helm.
  • Livanos Restaurant Group, New York City: Molyvos Chef-partner Jim Botsaco takes on the same role at the 85-seat Abboccato, slated at press time to open last month.
  • Mainstreet Ventures, Ann Arbor, Mich.: Carson?s Roadhouse will start serving an eclectic American menu in late December or early January; two more are slated for 2005.
  • The Patina Group, Los Angeles: Company?s latest entrant in Downtown Disney seats 600 and features regional Mexican fare.
  • Phil Stefani Signature Restaurants, Chicago: Night-owl dining spot L8 opened in September, serving wood-fired entrées, pizza, pasta and small plates in a clubby atmosphere as late as 5 a.m.
  • Starr Restaurant Organization, Philadelphia: Steakhouse Barclay Prime launched in October with Chef Todd Mark Miller in the kitchen. New York City branches of Morimoto and Buddakan open this winter, and Starr plans two restaurants in Atlantic City, N.J.
  • - View the Top 75 Multiconcept Operator rankings -


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