Live and Learn: Restaurant Owners Share Smart Expansion Insight
Restaurateurs start with a single location, and growth models vary widely once expansion begins. There are different paths, from adapting proven ideas to starting fresh, but growth can often feature intersecting efficiencies and strategies between different models. Whatever position a restaurant group is in, running such a business is always going to be demanding. This month we check in with three restaurateurs, all in different stages of growth and with different lessons to share.
Blue Door Pub
Blue Door’s signature Blucy—a burger stuffed with bleu cheese and chopped garlic—is on the menu at all three Twin Cities locations.
Jeremy Woerner and his Blue Door Pubs had a hectic spring, opening a third Blue Door near the University of Minnesota and, within the same month, opening a new concept in Hi-Lo Diner.
“Opening two at once is not something I ever recommend anybody to do,” he says. Such a schedule was never his intention, but the landlord at Blue Door U made an offer they couldn’t refuse. Blue Door St. Paul opened eight years ago, with the Longfellow location opening five years later in 2013. Blue Door U came about because, “we always have our eyes and ears open,” Woerner says, not because of a grand expansion plan.
“There’s not a philosophy,” he says, but rather he and business partner Pat McDonough typically let the dust settle and grow only when organization and infrastructure are in entrenched. Inside, Blue Door menus are roughly 65 percent identical among the three locations, with rotating selections and a focus on creativity driving the remainder. Neighborhood demographics play a factor, but he adds, “When it comes down to it, we don’t overthink these things.” Instead Blue Door views each location through a customer’s point of view, perfecting the finer customer service details with subtle unifying factors. For Woerner, this is all in staffing and organization.
“Once you have the infrastructure in place, you have to get your trust to where you need it to be,” he says. Instead of refilling customers’ drinks like he did in the early days, Woerner instead pours over payroll and insurance forms. He’s built a management team that allows him to focus on his growing role. “They’ve all grown with us and treat it like they own it,” he says.
New Bohemia Wurst + Bierhaus
New Bohemia co-owners Jeff Bornmann (left) and Brian Ingram inside their recently opened Uptown Minneapolis restaurant, the brand’s fifth location.
At New Bohemia, the growth plan is calculated and determined. The five-unit group aims to have 10 restaurants in the Twin Cities metro by the end of 2016, filling the map in all directions. As a long-term goal, says co-owner Jeff Bornmann, “We feel the sky is the limit. From here our next market will probably be in Wisconsin.” They want to stick close to home, where the market is familiar and efficiencies can be maximized.
The key to New Bohemia’s growth is speed and standardization, while still emphasizing a unique character to each unit that ties to the neighborhood where it’s based.
“The reason New Bohemia works is efficiencies,” says partner Brian Ingram. With a concept that pulls from industrial taprooms, New Bohemia minimizes décor by featuring exposed ceilings, concrete floors, and community tables. “We’re fast-casual 2.0,” Bornmann summarizes.
They apply those same efficiencies to their build-out, turning over empty units in as little as six weeks. Because New Bohemia negotiates for free rent at the start of its agreements, that allows a quicker profit. Each building is distinct, but they apply a uniform demo/rebuild process at each location, using the same contractors and millworker to configure the spaces.
“Typically your first restaurant costs you 25 percent more than your second one because they’re learning who you are and there’s add-ons,” Ingram says. “Simplicity breeds efficiency.” While there is a system, New Bohemia caters specifically to neighborhoods and their surrounding infrastructure. The Mankato location has an open indoor/outdoor bar window; Golden Valley is inside a strip mall, and Uptown has a bike station for repairs.
“We’re very conscious that we never want to be thought of as a chain,” Ingram adds. They’ve also purchased a food truck, which they use to promote the brand in new cities such as Roseville, where they recently signed a lease to open on Snelling Avenue. New Bohemia will often train staff for a start-up at one of their existing restaurants prior to opening.
Blue Plate Restaurant Co.
Blue Plate CEO David Burley, pictured with co-founder Stephanie Shimp, says each restaurant is tailored to the neighborhood it’s in.
Blue Plate, the restaurant group behind concepts such as Longfellow Grill, The Lowry and The Freehouse, has been focused on meeting the needs of specific neighborhoods since 1993.
“We’re a collection of unique brands, not a brand,” explains CEO David Burley. Each new restaurant is a new concept, and each one requires a fresh start. “We always planned on having more than one restaurant,” he says, though the total size was not predetermined.
Over 23 years in the industry, Blue Plate has witnessed a changing scene that has grown in sync with the company’s philosophy. Burley has seen the decline of fine dining and the continued rise of neighborhood restaurants, breakfast places, and a focus on local in general—all specialties of Blue Plate. The term “local,” he notes, “is not just a buzzword, it’s a demand now and people want that connection. Not just where the food comes from, but how invested are you in their community.”
Blue Plate’s brand-by-brand growth, however, isn’t particularly efficient.
“Quite honestly it’s hard to find economies of scale in this business unless you do the same model over and over again,” Burley says. With each new Blue Plate restaurant fitting a different mold, new branding, architecture, design, menu concepts, and merchandising have to be created from scratch. There is little reuse, aside from buying power with vendors and the increased employee numbers, which affect administrative issues such as time cards, tax forms, and healthcare. “To bang one out like a Subway would cost a nickel,” he admits, but the creativity and meeting the challenge drives him.
Though Blue Plate’s approach is expensive in generating new branding and inventory, it does allow some carryover in training and finances. Keeping all its locations in the metro area, Burley notes, adds some simplicity, while alternately forcing them to differentiate between stores to foster cross-shopping over cannibalization of their own businesses.
While efficiencies are common in buying power, credit acquisition, and staff training, a company’s plan for design and differentiation between locations has the most significant effect on cost. Though there are administrative and financial unifiers among a company’s locations, most modern restaurant groups focus on community and distinction in the front of house. The term chain has taken on a pejorative meaning, with consumers increasingly prioritizing community when making dining decisions.
Blue Door emphasizes a familiar-feeling small room environment, New Bohemia customizes amenities to fit local demographics, and Blue Plate adopts wholly new menus and concepts while emphasizing a universal hospitality theme to make customers welcome; just three of many varied paths to growing a restaurant group.