Newcomb family poses a triple threat
“I wasn’t trying to find myself. I was having fun,” Chris Newcomb admits about his college days, before his father recruited him.
It was long after the lunch rush, but Chris Newcomb still wasn’t comfortable taking up a booth in the Jackson, Mississippi, restaurant that bears his nickname, Newk’s. The reason was what James Patterson was holding in his hand—a camera. As Newcomb sat in the booth with an ahi tuna salad and a slice of pink cake in front of him as props, he raised and lowered his chin, looked away, looked at the camera just as Patterson, the photographer, instructed, but it was clear he wasn’t enjoying it, no matter how many times he reassured us he was fine.
The original intent was to have the family team behind Newk’s Eatery’s success in the picture, but his father, Don Newcomb, was home in Oxford where he’s working on his third concept, My Guys Biscuits and Bar-B-Que, and driving a tractor at his hobby farm; and his younger brother Neil was in Charlotte, North Carolina, running Brixx Wood Fired Pizza’s franchise system. The other person responsible for helping put both the family’s first concept McAlister’s Deli and then Newk’s Eatery all over the map, Debra Bryson, was babysitting grandchildren. Clearly Franchise Times did not do its due diligence on the best time to make the trek to Mississippi. We also picked the weekend Ol’ Miss was playing its biggest rival in football to visit Don Newcomb in Oxford. What we lacked in timing, however, we made up in calories. We dined at three Newk’s in two cities, and the food—from the homemade pimento cheese on a sandwich to its mac and cheese with bacon to its lobster and crab bisque—was delicious. And with Newk’s, it’s all about the food.
Newk’s has been the beneficiary of what the Newcomb family learned from designing, growing and selling McAlister’s Deli. McAlister’s, which started life as Chequers, was the fulfillment of Don Newcomb’s entrepreneurial itch, the result of growing up poor.
“The price of getting it right was first getting it wrong. … You need to be in the trenches and bloodied by your own decisions.” — Don Newcomb
A practicing dentist, Don had an idea for a restaurant concept, but needed someone to manage it while he filled cavities. “If I didn’t have spit on my hands every day, I didn’t have a business,” he quips.
His oldest son, Chris, was still attending college when his father called him home. Chris readily admits he was a professional college student at the time, first studying pre-med, then real estate and finally business. “I wasn’t trying to find myself,” he says, smiling. “I was having fun.”
McAlister’s Deli came about when the movie, Heart of Dixie, was shot in Oxford in 1988, and the movie crew converted an old gas station into a 1950’s diner. “When the crew left, the restaurant business was calling me,” he says. Don borrowed from his real estate fund—the result of cashing out his practice’s self-directed profit-sharing plan earlier—and invested it in the diner. He used some of his wife’s recipes and tinkered with others he found in the large library of cookbooks he amassed.
Bryson was the only employee who didn’t take the buyout, insisting instead that she wanted to go into the restaurant business with him. She proved to be a talented partner. “She’d do the work and I’d come up with the ideas,” Newcomb says. Design and real estate proved to be Bryson’s forte.
Neil was brought into the business when he was still in his teens. The three Newcombs all have different temperaments and styles. As Don describes them: He is the type who will get into an elevator and immediately push the close button so he can be alone; Chris is an extrovert who’s “a superb operator” and Neil has the personality of a politician (not a Donald Trump, more like a Jack Kennedy).
The affable Don may be an introvert, but he’s not too shy to go after what he wants. Chris tells the story about the time his dad was on vacation and discovered a white barbecue sauce paired with smoked chicken at a little hole-in-the-wall restaurant in Florida. “When we opened Newk’s, he tried to get the recipe; he hounded the guy,” Chris says. The owner’s son finally told Don he might as well give up because his father would never give him the recipe. Rather than admit defeat, a frustrated Don Newcomb bought a gallon of the sauce and went home to experiment until his version was as close to the original as possible.
After growing the business to 40-plus stores, Don says he felt an obligation to the franchisees “and I wasn’t sure we could deliver.” He didn’t want to take on partners, so he sold the business in 1999 to two restaurant-industry veterans. His advice: “Avoid partners unless they’re smarter or richer than you are, or otherwise, why do you need them?” (McAlister’s was sold to Roark Capital in 2005.)
“I wanted to be more independent. Family businesses are tough. I respect people who get it right.” — Neil Newcomb on his decision to buy into Brixx Wood Fired Pizza
During their five-year noncompete, Neil went on to become a franchisee of McAlister’s in North Carolina and Don and Chris became franchisees of Moe’s Southwest Grill. As they watched McAlister’s grow, Newcomb says he remembers saying to his sons, “Hell, they aren’t doing anything that different than we were. Let’s do it again.”
Chris was in, but Neil decided to sell his McAlister’s franchises and go out on his own with Brixx Wood Fired Pizza, a fast-casual pizza concept that excels at craft beer as well as high-quality pizza. “I wanted to be more independent,” Neil says. “Family businesses are tough. I respect people who get it right.” He’s president of Brixx’s franchise system.
At first glance it may seem strange that a dentist wanted to get into the restaurant industry—an industry that’s known to be as tough or tougher than show business. Fans can be fickle, but then so can diners.
But to Don’s way of thinking, dentistry and restaurants are similar. Both require “skill, care and judgment.” They also require an entrepreneur, a distinction that fits Don to a T. The sixth of eight children, he grew up in a four-room house that was lighted by kerosene lamps and had no running water. “My parents didn’t have much education, but they had a wealth of knowledge on what’s important,” he says, which included teaching their children accountability, humility and always doing your best. “The difference between failure and success is doing a job nearly right and exactly right,” he says.
His family was extremely poor—poverty, Don points out, is “one hell of a motivator”—and yet all eight siblings graduated from college with help from the ones who went before them. His older brother Guy, a pharmacist, helped finance Don’s school, along with the Navy, which is the reason he named his third concept, My Guys Biscuits and Bar-B-Que.
As a child, Don was always selling something. In the summer, it was garden seeds and in the winter, he sold Christmas cards. When he was a sophomore in high school, he got a job as a soda jerk in a drugstore. He was now earning money doing something that was fun and appreciated. He still remembers the name of the widow who used to slip him a $5 bill as a tip because she knew how much he needed the money. At the end of summer, the drugstore owner offered him a permanent job if he switched high schools so he could work after school. His parents couldn’t afford a car, so he hitchhiked back and forth from home to school and work.
He loved being a soda jerk and he claims that experience is what turned him into a restaurateur, although he’s never actually worked in one of his restaurants—that’s what his boys did. “I’m the coach,” he explains. “Sometimes I make substitutions.” And the whole time he was building McAlister’s and then Newk’s, he kept his day job. “I practiced dentistry for 30 years,” he says proudly.
Food is what makes newk’s a success. Some dishes are family recipes, others are the result of tinkering with traditional recipes to make them better.
Like his father, Chris found McAlister’s training to be “learn as you go.” The first year they had $234,000 in sales (not profit), and decided they needed to up their game. They started quizzing other restaurant operators about their food offerings and what customers wanted. They shut down the restaurant and redid everything from the décor to the menu. “My brother and I weren’t paid,” he says, but at 22 and 18, they weren’t expected to support a family on their take-home pay.
When the family sold McAlister’s, their experience as Moe’s Southwest Grill franchises taught them the valuable lesson that franchisees like to be listened to. They had held onto seven or eight of the buildings McAlister’s were in, Chris says, so when management wanted to buy the properties, Don arranged to sell them on the condition that Chris be let out of the noncompete agreement two years early.
Not everyone gets a second chance in business, Chris says, so they approached Newk’s as a do-over. The first eatery opened in 2004 in Oxford. Since Chris was living in Jackson with his wife and three kids, “I moved in with my parents.”
He spent five nights in Oxford for nine months. Why Oxford? “Oxford has been a good town for us,” he explains. “It’s a forgiving town; they’ll give you another shot.”
Bryson returned to design the restaurants and “broker the peace between father and son,” Chris says. Don financed the first Newk’s.
They cut the menu in half from McAlister’s days, and concentrated on the quality and freshness of the food. Chris is the food person, according to his father, and menu items are made from scratch in an open kitchen. To simplify matters, they chose one bread, rather than a variety, and added a self-serve beverage station. A large roundtable is both a source of snacks and condiments and a way station. Since customers can see their food being made in the open kitchen, they’re less critical of the wait time. “The roundtable buys you four minutes in time” from when the order was made, Chris says.
Another time saver is having the salt-and-pepper shakers on the central roundtable, as opposed to having to assign an employee to the time-consuming task of filling shakers for every table.
At Newk’s, everyone is on the same team. “There’s no front or back of house,” Chris says. “We cross train and pay above minimum wage.” When employees want a raise, they are shown the pathway. The dining room attendant is one of the higher paid positions, Chris points out, because they are the guests’ last contact before leaving the restaurant. A good attendant knows the customers’ names and treats them like guests in their own homes. To prove his point, Chris adds one of their attendants gets $100 tips from regulars at Christmas.
Original abstract paintings from a local artist add a bright pop of color throughout the restaurants. During my tour of headquarters, I noticed one of the offices had a large original painting from the artist in it. When asked how she was able to score an original for her office, Angel McGowan replied, “I’m in procurement,” adding with a smile that not being able to procure an original painting for her office would mean she wasn’t very good at her job.
When his dad officially retired in 2014, Chris sold a majority interest to Sentinel Capital Partners, a private equity firm based in New York City, with $2.6 billion of capital under management. According to its website, the firm is interested in “backing strong talented management teams.” Sentinel brought in James Greco as a consultant to help grow the company, which had 65 units at the time. A few months into his consultancy, Greco joined the company as COO.
What attracted Sentinel Capital to Newk’s, Greco explains, is that it’s a good example of a new-generation fast-casual restaurant. It’s culinary-driven, he says, and the open-kitchen design gives “freshness cues” to customers as they see their meals being prepared. Newk’s also has a “higher-level of service,” Greco says. Servers bring the food to you and bus the table when you’re done. They serve beer and wine and a grab-and-go section is populated with premade sandwiches and salads, as well as bulk items, such as containers of chicken salad and pimento cheese. Catering is another profit center. They’re also in the process of rolling out “Generation Two,” an upgraded décor.
The food didn’t need help—“Chris knows an awful lot about food preparation and flavors,” Greco says, and both father and son share a passion for cooking—but Greco did implement back-of-the-house software for inventory management and food costs, along with more policies and procedures in development.
The idea is to get it ready to grow. There were 95 units open at the end of 2015, with a goal of 30 more this year. “We only do multi-unit deals,” Greco says, and the majority of takers are experienced multi-unit, multi-concept franchisees.
Fred LeFranc founder of Results Thru Strategy, a foodservice consultancy based in North Carolina, is impressed not only with the concept—“It’s not your typical fast-casual,” he says—but also with the fact that the Newcomb family could come up with another great concept after McAlister’s Deli.
Another thing that struck LeFranc when he dined at the franchisee location near his home is that the manager offered him an unsolicited soup tasting. The pride the employees have in the food struck him as a nod to a good systemwide culture.
Newk’s Eatery is No. 275 on Franchise Times’ Top 200+ list, with systemwide sales of $142 million on 80 units (2014 figures). About 85 percent of the restaurants are franchised. The average unit volume for company-owned stores is $2.5 million, and same-store sales are strong, Greco says.
Greco and Chris hammered out a detailed job description for both of them. Product and menu development, marketing and finance report to Chris and operations, franchising, real estate/construction and HR fall in Greco’s domain.
“Chris is a great guy,” he says. “He’s very in tune to this business.” In essence, he says, Chris grew up in the restaurant business because his father started McAlister’s when he was in college. “It’s all he knows; it’s been his life,” Greco points out.
Of course, Don isn’t really retired, but he’s not as gung-ho on the My Guys chain, even though he loves the biscuits.
He also likes spending time riding his tractor and visiting the farm’s fishing pond. But even more important this time around: “I don’t have Chris or Debra to do the work.”