What to do when your concept outgrows you
Should you bring in a "competitor" as a consultant to your restaurant? Sure, consultants say, because it's their reputation on the line, too.
Picture yourself the partner in a restaurant venture. Not the active partner, but the one with the behind-the-scenes business savvy. The venture is successful for a number of years, but at some point revenue slips, and you realize a change is needed. Problem is, you don't have restaurant operations knowledge to do the job yourself.
Such a scenario happened to Wayne Belisle, a successful Twin Cities businessman and lawyer, who with a partner owned eight Champps franchises in Minnesota, Iowa and South Dakota. Belisle bought three of the franchises outright last fall when he saw the downward trend. "Champps has owned the market (in the upscale sports bar category) in the Twin Cities for some time, and we probably got a little spoiled, and I think the ship needs to be tightened a bit," Belisle said.
Because he lacked the in-house, operations experience, Belisle hired a consultant who did: Chris Bangs, owner of Green Mill Restaurants. Green Mill has 30 locations in the Midwest, and Bangs is also the "main shareholder" in U.S. Restaurants, which operates other restaurant concepts.
Parasole’s Kip Clayton
Sales were solid at the Champps restaurants (although, like most, it's taken a hit in recent months), Belisle said. Bangs and his team have come in and taken charge of the operation in the front and back of the house. "Employees are going through retraining and evaluations," Belisle said.
It's no secret that knowing ones limitations and bringing in professionals with skills to compensate are critical to good business - Belisle's success in his other ventures and his current hands-on approach to his restaurants show he is well aware of that premise.
But there are many who do not grasp that concept, said Len Ghilani, owner of Ghilani Group, a restaurant consultancy. "There are a lot of people in the restaurant business who believe it can be managed from a hands-off approach or trusting a lot of people who they don't really spend a lot of time with," Ghilani said. "The restaurant business is one of very small points. It requires a lot of day-to-day attention in order to be profitable. Otherwise, by default, it's going to be non-profitable. With attention, it becomes profitable. With a lot of attention it can be a pretty lucrative proposition."
To bring in a consultant who has a concept which chases a similar demographic could seem risky. But Belisle was impressed with Bangs' Green Mill and U.S. Restaurants. "They're real good numbers people, and that's what I think is needed in this market, in this day and age," Belisle said.
And while both concepts' menus fall under casual dining, the Green Mill restaurants are not sports bars. And even if they were perceived as direct competitors, it's not unheard of for one restaurant company to lend a hand to another. Parasole Restaurant Holdings, a Minneapolis-based company with casual and upscale concepts in the Twin Cities area, has helped "competition" on more than one occasion. Parasole and its consulting arm, idein LLC, had no qualms about helping a competitor redevelop an ailing concept located within the same block.
"It's our belief in most cases that having viable businesses, whether it's retail clothing or restaurants down the street from us, is healthy for the entire community where your restaurants are located," said Kip Clayton, vice president of business development for Parasole and idein. "You could argue two things: That it potentially pulls guests away; and, because of how it's positioned, that it brings more of the target demographic into our neighborhood. ÉI think just by virtue of having other viable restaurants in the neighborhood, it helps to bring in more people.
"We wouldn't do the project if we felt it was a direct competitor, or oftentimes we won't pursue a (consulting) project if it's already going down the path and we think it's a bad idea," Clayton said.
Parasole has turned down projects for those reasons, as has Ghilani. There's also ethical considerations to selling similar ideas to clients, Ghilani added, such as a menu or feature item. "If I had an idea for a great burger that wasn't being done, I don't think I'd do it with two different clients at the same time," he said. "Fortunately, in my situation, I've been able to keep everything separately quite easily, because issues were different. ÉIf they're different problems, there are no problems."
Ghilani said he turned down a consultation with a start-up operation because of a current client. "(They) wanted to do a very similar project within what I consider a competitive proximity," he said. "I felt it was unethical and a conflict of interest to represent both."
Conflicting interests aside, for the consultant, there's also the matter of the client being willing to take advice. Clayton said Parasole/idein looks closely at who is asking for help, and whether they will listen to recommendations. Often, clients who are successful in other ventures are generally "used to having it their way," he said. "Typically, the good ones tend to listen to what you've got to say, otherwise they shouldn't waste their money."