A plague on fine dining: absentee owners no substitute for hands-on managers

A plague on fine dining: absentee owners no substitute for hands-on managers – editorial

Charles Bernstein

A plague on fine dining: Absentee owners no substitute for hands-on managers

In all the talk about a serious slump among independent restaurants, we hear constant references to the overwhelming problems facing the operators. “I’m surrounded by restaurant and chain units on every side” is a typical reaction. “How can anyone expect me to really succeed now with all this competition?”

Independent operators bemoan the high food and labor costs that supposedly are driving them out of business. They cite as negative factors the 80-percent ceiling on business-meal tax deductions; the upcoming minimum-wage increases, which could boost wages right up the line; a lack of acceptable employees; skyrocketing liability insurance premiums; and anticipated added health benefits and parental-leave costs.

Beleaguered restaurateurs keep raising menu prices to pay for the higher costs. Customers are rebelling against what they consider outrageous prices, but operators feel they can’t hold the price line and make the necessary profit margins.

Still, the saturation factor weighs heavily. Peter Lomax, who owned Monroe’s restaurant on San Francisco’s Lombard Street for 25 years, recalls that “we used to be the only restaurant in this area, but now there are seven restaurants near Monroe’s and it is just so tough to do business.”

Lomax threw in the towel a year ago and became maitre d’ at the Washington Square Bar & Grill in San Francisco. He sold the restaurant-ownership headache to Michael Roche, a tavern and restaurant operator. Roche says business at Monroe’s has improved slightly in the past year, but Monroe’s is still surrounded by trendy and traditional restaurants of all types.

Despite all the obstacles, the prime reason for the fine-dining falloff actually is a serious decline in service, or at least the customer’s perception thereof. This image is often pegged to the owner or owners, whom the customers expect to see on the scene. All too often the owner is diverted by other interests and in effect delegates almost the entire restaurant operation to others.

There is simply no substitute for the owner. Customers want to be greeted personally and treated as important by the top person. This means more than the menu’s offering the latest trendy items or the waiter’s fussing over a customer’s likes and dislikes.

What it takes to win is the steady hands of on-the-premises owners who are on the floor at every possible opportunity. Some prime advocates of such loving attention are Tom Margittai and Paul Kovi at New York’s Four Seasons and Jerry Berns and Peter Kriendler at `21.’ The latter two are still going strong in their early 80s and continue to represent the heart and soul of `21′ to many customers, who still perceive them as the owners.

When George Lang launched Hungaria, the restaurant of his native land and of his dreams, at New York’s Citicorp Center in the mid-1970s, he provided all the input for its well-orchestrated menu and stayed close to it for a year afterward. The restaurant seemed to do well despite the fact that customers in the city were not exactly clamoring for Hungarian food.

Just as soon as Lang loosened the reins and let other people run Hungaria, it faltered and eventually had to close. On the other hand, he has stayed very close to his Cafe des Artistes restaurant for 15 years. It has stayed at or near the top of New York fine dining as a direct result.

To gauge the effects of a restaurant without an owner present, consider the Black Bass restaurant in Lumberville, Pa. Founded in 1745 and featuring an American menu, the restaurant finally grew and prospered under owner Herbert Ward in the 1960s and 1970s. But 10 years ago Ward was stricken with a brain tumor and had to step down for several months. In that period the customers deeply felt his absence, and volume plummeted.

Fortunately, Ward made an amazing recovery, and sales rebounded just as soon as he stepped back into the restaurant. It has been doing well ever since under his guidance.

Down the road from the Black Bass restaurant in Bucks Country is a classic case where Walter J. Conti, former one-year chairman of the National Restaurant Association, has presided over the family’s Doylestown, Pa., Cross Keys Inn for three decades. A few years ago he opened the Pipersville Inn 7 miles away and delegated most of its operation to his family while he concentrated on the Cross Keys Inn.

He knew that one could never take the success of a fine-dining establishment for granted and that he had to stay close to Cross Keys, where customers appreciated such amenities as free Sunday newspapers on Saturday nights.

Pipersville, a country inn with price points about $5 lower than Cross Keys’, could not get going, and its annual volume hovered at $400,000 or $500,000. After an abortive effort to sell it, Conti took an active role at Pipersville, devoting much of his time to the restaurant. The result is that in 1989 volume jumped to almost $900,000 there, while Cross Keys stayed at $2 million. Some customers preferred to drive to Pipersville, a hamlet of 48 people, for the lower prices and the country-inn atmosphere.

Between the two restaurants, Conti works from 7 a.m. to midnight seven days a week. When he is at one restaurant, customers at the other inevitably ask, “Where is Walter?” Shuttling between the two restaurants, he soon arrives.

Indeed, there is no substitute for hands-on ownership and management in restaurants. Some may think that an owner who slices roast beef, supervises the cleaning of his kitchen and makes sure the salt and pepper shakers are set properly lacks dignity. However, that’s just what it takes to succeed, and we call it competency.

Yes, an owner can’t do it all himself and must know how to delegate. Nevertheless, he or she must maintain a strong personal presence in order to make the operation work.

Independents and chains face diametrically opposed challenges. The former must involve owners directly with employees and customers, while the latter must keep corporate or conglomerate ownership out of the picture.

COPYRIGHT 1990 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2004 Gale Group