Sports-theme Carolina Ale House eyes growth in Southeast

Sports-theme Carolina Ale House eyes growth in Southeast

RALEIGH N.C. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Lou Moshakos, who opened the eighth Carolina Ale House [3] in Wake Forest, N.C., this summer, said the popularity of the family-oriented restaurants gives him increased confidence in his plans to accelerate expansion of the brand. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Moshakos, a 30-year veteran of the restaurant business, is looking to expand Carolina Ale House either through company-owned outlets or licensing or joint-venture deals with others. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

While his company, LM Restaurants [4], also operates other concepts in the Raleigh area, he said Carolina Ale House, a sports bar and restaurant concept, is his primary growth vehicle. Inspiration for the concept came from an ale house he visited in London, which he reproduced initially in Raleigh in 1999. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

The first restaurant attempted to cater to families by keeping price points low and offering extensive children’s menus. It also included several televisions and displayed sports memorabilia. However, customers were not sure what type of concept Caroline Ale House was supposed to be. Many people even asked whether it served food. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

The confusion, which was compounded by a poorly chosen location, nearly prompted Moshakos to close up shop after he lost nearly $500,000 during the first year. But after he retooled the menu several times, the Carolina Ale House began to hit its stride, especially on game days. By the third year he said he was no longer losing money. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Today, he operates six locations in the Triangle area, which is anchored by the cities of Raleigh, Durham and Chapel Hill. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Moshakos said all of his Carolina Ale House operations now are profitable, and the initial restaurant continues to thrive despite the opening of another location just over a mile away. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

With the exception of the inaugural location, which has a smaller footprint, the restaurants average about 7,000 square feet with an additional 2,000 square feet of patio space, and seat from 260 to 300. Average unit volumes run about $4.2 million, although the Wake Forest location is already on track to generate $5.2 million in sales in its first year. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Each unit is decorated with sports memorabilia from local and state sports teams, and the 40-plus television screens offer sports fans the latest in technology, controlled from an audio-visual room. Since smoking is still permitted in North Carolina restaurants, a special nonsmoking section caters to families there, and each restaurant houses a large gaming area and extensive kids’ menus. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

While each restaurant uses the menu developed by Moshakos, individual units also offer daily specials unique to the location. The concept caters to multiple dayparts by offering the lunch menu until closing at 2 a.m. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

District manager Doug Besser said the company attempts to offer large portions at lower price points than other local competitors. Average lunch and dinner checks run $8 and $12.50, respectively. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

“We haven’t seen any downtick due to economic pressures, and all but one of our restaurants are up year over year, while one is flat,” Besser said. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

The restaurants team up with local and college sports teams for sponsorships and other events. Mindy Amerson, director of communications for LM Restaurants, said that co-hosting events like last summer’s celebration of the Carolina Hurricanes’ one year anniversary of winning the Stanley Cup is typical of the type of event that the concept does to be an integral part of the local community. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

CHAIN FACTS

NAME: Carolina Ale HouseHEADQUARTERS: Raleigh, N.C.MARKET SEGMENT: casual diningMENU: sandwiches, burgers, salads, beef and seafood dishesTOTAL NO. OF UNITS: 8AVERAGE UNIT VOLUME: $4.2 millionLEADERSHIP: Lou Moshakos, founderYEAR FOUNDED: 1999 —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Moshakos decided in 2004 that he was ready to expand outside of his home base and formed a joint-venture partnership with family friend Joe Marouf to ensure that the restaurants were run properly. The pair opened a restaurant in Weston, Fla., in February 2005. He said that location is on track this year to generate nearly $5 million, up from $3.6 million a year ago. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

In turn, Marouf has since joined forces with developer John Politis to develop 12 South Florida locations, including one under construction in Boynton Beach. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

“They plan to develop these locations as quickly as they can find the sites, which of course is always a challenge in terms of both affordability and availability, especially in Florida,” Moshakos said. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

The first licensed location opened in Columbia, S.C., last year, and that licensee, Chris Sullivan, is in the process of opening his second location with potential plans for several others as well. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Moshakos said he is in talks with other potential licensees, although he has already turned some away because they wanted to open in places like Arizona and Texas. He said he plans to keep the concept limited to North Carolina, South Carolina, Georgia, Tennessee, Florida and Virginia. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

“I want to be able to be close enough that I can make sure they are keeping the brand intact,” he said. Licensees pay a $50,000 fee, plus 5 percent of revenues, an amount that Moshakos said he is rethinking because it is “not enough based on the success.” —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Recently, he announced that HMSHost Corp. [5] will open a licensed Carolina Ale House in the Raleigh Durham International Airport’s new Terminal C. The 2,600-squarefoot location will be a downsized version of the concept and is scheduled to open in July 2008. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

No matter where Carolina Ale House restaurants open, Moshakos intends to keep “Carolina” in the name. The Jupiter, Fla.-based Ale House Management chain, with some 38 company-owned units, sued Moshakos in 2000, asserting a proprietary interest in the words “ale house” and other similarities. A U.S. Court of Appeals judge rejected the group’s claim, however. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

Moshakos said he is used to his share of challenges, both in and out of the restaurant industry. During his childhood in Greece, he was forced to drop out of school in the sixth grade because his parents couldn’t afford to send him to the next town to advance his education. Instead, he worked on a farm until he was 18 and moved to Montreal to work as a dishwasher in his cousin’s restaurant. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

A determined worker, he eventually established an office cleaning business that allowed him to save enough money to move to Florida and purchase his first restaurant in 1978. Later, he sold the restaurant and two others to purchase a Miami Subs franchise, eventually owning 10 units and moving to Raleigh with his wife and three daughters in 1992 to develop the brand there. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

The Miami Subs brand faltered, however, and Moshakos decided to pursue the Ale House idea. He sold most of his Miami Subs stores, although he continues to operate two. He converted two others into a quick-service concept called Papa Lou’s. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.

While he intends to focus on the Carolina Ale House concept and its growth, Moshakos said he occasionally will open other concepts. For example, last year he opened Bentley’s, an upscale restaurant in Cary, N.C. He also runs Taverna Agora, a Greek restaurant in Raleigh. The Greek-theme location is housed in a former Miami Subs outlet owned by Moshakos. He also plans to open a seafood and sushi restaurant in Raleigh. —A Greek-born restaurateur inspired by the ale houses of London hopes to dot the Southeast with his sports-theme eateries.