Branching Out -- Careful Planning Among Key Ingredients For Bold New Concepts In Dining
Late in 1991, Restaurants Unlimited will open one of Seattle's largest restaurants as part of the Elliott Bay Marina under construction at the foot of Magnolia bluff. Today, The Times begins an intermittent series which, in the coming months, will examine the visions and challenges involved in creating and opening a major new restaurant.
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One of Seattle's fanciest and most popular new restaurants - Palomino in the Pacific First Centre downtown - doesn't have a room to hang coats.
A few weeks before the restaurant opened last November, the owners discovered to their dismay that nobody had thought to provide space for hanging coats in the 180-seat restaurant.
That is why you'll find coat trees throughout the restaurant on the skyscraper's third floor.
Restaurants Unlimited, Palomino's owner, has had experience making - and fixing - mistakes. Some of the snafus have been much more serious than a missing coat room.
A decade ago, the company nearly went under when lifestyles started changing and its once-popular theme restaurants became passe.
RU founder and Chairman Rich Komen, saddled to an apparently dying concept and not sure what he was doing, bet his company's future on a new kind of restaurant - and won.
Today, the company runs 21 full-service restaurants in 15 cities from Honolulu to Philadelphia, serving nearly 100,000 meals a week. The company expects $73 million in sales from its restaurant division this year.
Now, Komen is about to stake his personal prestige and that of his company on another untested venture in his hometown, where everybody can see.
Sometime in the fall of 1991, RU will open its biggest restaurant as part of the $41-million Elliott Bay Marina now under construction at the foot of Magnolia Bluff.
``This is a totally new concept for us,'' Komen said.
RU's other restaurants are high-energy ``urban bistros'' such as Triples, Palomino and Cutters Bayhouse. Komen defines an urban bistro as ``a restaurant that is kind of boisterous, where anything goes.''
By contrast, the new restaurant, whose code name in the company is Magnolia Marina, will offer tranquility, an escape from urban pressures and ``sensuous landmark dining,'' he said.
The creation of a restaurant, especially an experimental one, is what Komen calls ``the fun part of our business.''
It's also the part where stubbing your toe can be costly.
In a good year, 10 percent of this state's restaurants change hands or go out of business. And in a poor year, turnover can be 25 percent, said Jack Gordon, director of the Restaurant Association of Washington State.
Komen, who once lost $1.5 million on a restaurant that bombed in Chicago, knows the risks well. But he welcomes the challenge of the Magnolia venture, which will seat about 275 people.
``This is the best piece of real estate for a restaurant I have ever seen,'' he said.
Komen was not the only restaurateur who recognized the location as prime. In true 1980s fashion, ``the deal'' that landed him the prized spot was sealed only after some competition.
Every major waterfront restaurant in Seattle approached developers of the long-delayed marina project. In the end, RU got the nod, partly because of its successful operating track record - and partly because of money.
When restaurants open in office buildings, developers normally pay for furnishing the restaurants, usually to the operator's specifications. Often, that involves millions of dollars in up-front costs.
But Elliott Bay Marina was so attractive that Komen offered to put up $2.8 million to furnish the restaurant. ``The only time we will spend our money on the real estate is when the site is incredibly powerful,'' he said.
In addition, RU will spend at least $250,000 in the three months before opening day on ``soft costs'' that include salaries, promotion and recipe testing.
Even after one of its restaurants opens for business, RU expects to lose ``a lot of money'' for the first few months, Komen said. Before the end of the first year, he expects the restaurant to break even. By the middle of its second full year, it should be contributing to corporate profits.
Komen won't reveal RU's profits. But he said ``4 to 5 percent (of sales) after taxes is the expected norm'' nationally in the full-service restaurant business. That means if you spend $50, the owners of a reasonably successful restaurant may keep $2 to $2.50.
In evaluating a new venture, Komen looks for the potential of ``at least a 20 percent return'' on his initial investment. In the case of Magnolia Marina, Komen is confident.
``We decided to go in there with one of the biggest restaurants in the Northwest and create something so spectacular that it will become a must-see destination for any visitor to the Northwest,'' he said.
``No restaurant anywhere is doing this the way we are thinking of doing it,'' said Rick Giboney, RU's vice president, marketing director and leader of the company's new restaurant development team.
First, Komen and Giboney must decide what kind of siding goes on the outside of the building. Should it be shakes or planks? Nautical blue or earthy brown? And how do you design a parking lot that's just as inviting to people who park their own cars as it is to those who use valet parking?
After those and a few thousand other decisions about the restaurant are made, the restaurant's customers will enter the second floor of a two-story building just behind the new marina's boat slips.
They'll look through plate glass windows at nearly a 180-degree view of downtown Seattle and the busy harbor full of container ships, barges, ferries and other boats. On clear days, they'll see the Olympic
mountains and Mount Rainier, too.
That will come next year. Right now, the restaurant site is marked only by a few wooden stakes in the sand. The restaurant has no staff, no building, no menu - not even a name.
The restaurant will be defined by a formal vision statement being written at RU headquarters. It will guide the creation of every detail of the restaurant, from the outside walls of the building to the design, weight and ``feel'' of the salt shakers and forks on the tables.
Every week, Komen and Giboney meet to refine that vision statement, which probably will end up as a single typewritten page.
Their current rough draft suggests a tranquil South Pacific oasis, an escape - a word Komen particularly likes - from the pressures of the city.
Guests will find ``an unexpected harmony of Asian nuance, rustic timbers, natural stone, polished woods, a crackling fire and graceful curves, with water, mountains and city lights everywhere.''
The marina, nearly as large as that at Shilshole, will be in the foreground of that view.
Late last year, the long-delayed marina project cleared its last legal hurdle when the Suquamish and Muckleshoot Indian tribes ended a six-year dispute over the marina by agreeing to drop a lawsuit blocking construction.
The result, sometime next year, will be a marina almost as big as Shilshole, with about 1,200 boat slips, 800 parking spaces and 11 acres of ``land'' in what until now has been part of Elliott Bay.
Though he delegates much of the work in his company, few details are too small to escape Komen's attention. Take the design and performance of coffee cups, for instance.
Coffee-cup performance inserted itself into an impromptu meeting in Komen's office two weeks ago. Komen told Giboney that the coffee cups at Palomino haven't been keeping the brew hot.
``I don't care how beautiful they are, if the coffee gets cold, those cups have got to go,'' Komen said. A Palomino waitress last week confirmed that assessment and said the wait staff finds the cups are prone to spills, too.
Replacement cups are under study.
Although the new waterfront restaurant is dear to Komen's heart - ``We and our friends are going to be going in there, and we have an element of pride. . . . This is our hometown showcase'' - it is only one of several major plates RU has in the air these days.
-- The company plans to open four other full-service restaurants in the next two years, in Oakland, San Francisco, Pasadena and Minneapolis.
-- This spring, RU opened a new upscale cafeteria named Zoopa's near Southcenter. If all goes according to plan, it could become the prototype for a franchised chain.
-- Cinnabon, a separate division with 135 locations and another 25 scheduled to open this year, is the nation's largest baker and seller of cinnamon rolls. Sales for 1990 are expected to be $45 million.
This ambitious, multifaceted operation is a far cry from the company that, 10 years ago, seemed on the brink of extinction.
In the 1970s, RU built ``theme'' restaurants that specialized in theater as much as food. One restaurant with the unwieldly name of Clinkerdagger, Bickerstaff and Petts Public House transported customers to Merry Olde England, complete with heavily costumed waitresses and decor and menu to match. Horatios on Lake Union put a nautical spin on the same theme.
For most of the 1970s, these restaurants were successful, and by 1980, RU had 11 of them.
But by then, Komen noticed that business was slipping in the older restaurants, and his new ones were only marginally profitable.
``We did not know it then, but massive social changes were taking place in our society, and our restaurants were being affected,'' Komen said.
Two-income families had less patience for lengthy dining in an artificial atmosphere. At the same time, people wanted healthy, natural foods served in real-life settings.
``We did not know what we were going to do, but I knew that we were going to die if we continued with what we had,'' Komen said.
RU plunged into untested waters in 1981 by closing a marginally profitable Clinkerdagger in Bellevue and converting it to Morgan's Lakeplace. The change was dramatic. Gone were the Olde English trappings and the heavily regimented menu.
They were replaced by an open, airy restaurant that served an astonishing variety of high-quality foods that customers could mix and match at will, served by a thoroughly modern staff.
In its last year of business as Clinkerdaggers, the restaurant had brought in $1.5 million. Morgan's first-year sales were $2.8 million.
Komen knew he was on to something. In 1982, the original Clinkerdagger in Edmonds became Scott's 205th St. Bar & Grill. In 1983, the company opened Cutters Bayhouse next to the Pike Place Market. Six months later, Horatios on Lake Union was transformed into Triples Seafood Bistro.
Each was a variation of the ideas Komen pioneered at Morgan's. His company has spread the concept successfully - except for the failure in Chicago - to Oregon, California, Alaska, Hawaii, Minnesota and Pennsylvania.
So you might think RU could rest on its laurels and bask in its success. But the restaurant business doesn't work that way.
Sophisticated market research has convinced Komen that another wave of social change is taking place today, ``a melding of what we call traditional values and new values,'' he said. ``Trendy is no longer in,'' and just because something is new does not mean it will be accepted readily by the public.
Restaurant guests of the 1990s ``will not go to restaurants that are inconvenient or risky,'' he said. They want ``a safe adventure
. . . the glamour of a Palomino, but it had better be safe.''
Late next year, at the Elliott Bay Marina, Seattle diners will have a chance to find out how Komen translates these ideas into a flesh-and-blood restaurant. Komen says one thing is certain about the new place: It will have a room for hanging coats.
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Restaurants Unlimited;
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Headquarters: Seattle;
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Employees: 3,000 ;
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Founded: 1971;
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Chairman: Rich Komen ;
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1989 sales: $102 million;
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Seattle-area restaurants: Triples, Scott's Bar & Grill, Cutters, Palomino, Zoopa (cafeteria);
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Other restaurant locations: Tacoma, Spokane, Portland, Anchorage, Philadelphia, Minneapolis, Honolulu (2), California (7);
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Other division: Cinnabon bakeries;
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