As long-established brands like Applebee’s, Red Lobster and Olive Garden struggle to maintain relevancy in the casual-dining space, new entrants are popping up across the country with hopes of growth and expansion.
This new group of contenders tends to be small regional chains, yet to prove themselves in multiple markets. However, these upstart brands have specific ideas about changing the rules that have long defined casual dining. They tend to be founded by operators who believe they are filling a need for consumers bored by the sea of sameness that seems to have engulfed traditional casual dining. The appeal to Millennials appears effortless, built into the DNA of these brands.
“For years, casual-dining concepts have been polluted by each other,” said Anthony Smith, president and partner in Paul Martin’s American Grill, one of the newer upstarts. “They lost focus on service and management. People have been longing for a place to go with great food and a great environment.”
What that means, however, varies by category.
Nation’s Restaurant News took a look at five relatively new casual-dining players with national aspirations: Punch Bowl Social, Paul Martin’s American Grill, Eureka!, Cowfish Sushi-Burger Bar and Eleven City Diner.
While each of these brands is very different, there are common themes:
• They are built on high-energy concepts with from-scratch kitchens producing seasonal menus.
• They each have a well-developed bar program.
• They shy away from being described as chains, but design each unit almost as one-offs to fit a neighborhood.
“Every one of our units is different,” said Paul Frederick, co-founder of Eureka Restaurant Group, based in Hawthorne, Calif. “We don’t want to be seen as a chain.”
• They have various profit centers within the concept that boost incremental sales, such as a soda fountain, candy store, bowling alley or event space.
The new eat-ertainment concept
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Punch Bowl Social
To the uninitiated, Punch Bowl Social could be seen as the next Dave & Buster’s, a chain built on the combination of eating, drinking, playing games and watching sports on multiple TVs.
Founder Robert Thompson, however, contends that Punch Bowl Social goes much further, combining a bowling alley, Ping-Pong hall, an “old school” video arcade and private karaoke rooms with a food-forward gastro diner and a boutique cocktail bar — all in about 24,000 square feet.
“First and foremost, we are a restaurant,” said Thompson, noting that the entertainment side accounts for about 10 percent of sales. The chef-driven menu features diner fare and everything is made in-house from scratch.
“There was an opportunity to elevate the diner experience,” said Thompson. “We put that together with the entertainment and bar piece and it created this modular concept model.”
Millennials wouldn’t have bought it if the food wasn’t top notch, said Thompson.
“You can’t fool Millennials,” he said. “You can’t halfway put a scratch kitchen together and tell them it’s a scratch kitchen. You can’t buy canned juices and tell them it’s a meaningful artisanal cocktail program.”
Punch Bowl’s menu is small but focused and might include roasted cauliflower nachos or buffalo jalapeno meatloaf. There is a line of specialty burgers and craft sandwiches, as well daily “green-plate,” i.e. vegetarian, and blue-plate specials. No entrée is over $20.
Beverages include milkshakes, a diner mainstay, as well as wine, beer and various types of spiked “punch bowls,” served individually or for a group, such as the Bachelor’s Bowl, made with bourbon, blackberry elderflower liqueur, mango black tea, lemon juice and simple syrup.
The first restaurant opened in Denver two years ago, and now there are units in Portland, Ore., and Austin, Texas. A Punch Bowl Social is scheduled to open in Detroit on Dec. 1. Next year, units are scheduled for Chicago, Indianapolis and Cleveland.
The restaurants feature an edgy design that breaks up the large space into smaller, more intimate rooms. One room may recreate a Colorado lodge while the next might evoke the Victorian Era.
In a way, said Thompson, the concept speaks to easily distracted Millennials, who “want to be inspired on a hourly basis” with a surprise around every corner.
“There’s so much to do in one space, they don’t have to leave,” he said. “We refer to it as the sticky factor. People come in intending to just grab a drink, but they end up staying for hours.”
Thompson has a long history of opening one-off restaurants, including past concepts Havana Dinner Lounge in Nashville, Tenn.; Buffalo Billiards and Atomic Cowboy in Austin, Texas; and others.
Under Denver-based Seasoned Development, Thompson also currently operates the gastro pub Argyll Whisky Beer and the forthcoming beer garden Griffin.
But the growth vehicle is Punch Bowl Social, Thompson said.
So far the company has funded growth with unit-level equity capitalizations, but with private-equity investors showing interest, Thompson has rolled the units into one holding company as it prepares for the next stage of development.
With two units opened in 2014 and three planned for 2015, Thompson hopes to accelerate to five to eight openings in 2016.
While reluctant to reveal sales specifics, Thompson said the company anticipates Punch Bowl units will average between $6.5 million to $7 million in fiscal 2014, hitting the $10 million mark in some larger markets.
The new upscale casual
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Paul Martin’s American Grill
Paul Fleming has a long history of creating successful concepts, including P.F. Chang’s China Bistro and sister brand Pei Wei Asian Diner, along with Fleming’s Prime Steakhouse & Wine Bar — all of which he eventually sold.
Fleming saw something lacking in casual dining, especially smaller markets, which he felt were cluttered with mediocre concepts. Fleming opened the first Paul Martin’s in 2007 in Roseville, Calif., a concept that was carefully calibrated to offer scratch-made and seasonal American cuisine, and a great wine list at a broad range of prices. “Martin” is Fleming’s middle name.
“He had a vision of a neighborhood restaurant with high-quality food, a very high level of service, a great wine and bar program, but a very casual environment,” said Anthony Smith, president and a partner in the Newport Beach, Calif.-based chain.
Guests might order a light bite of fish with an arugula salad or a New York strip steak. The check average is about $19 at lunch and $32 at dinner, with a separate Taste of Paul Martin’s bar menu that ranges from $5 to $12 at happy hour.
“We have restaurants where a guy in flip flops and a tank top might be sitting next to a guy in a $2,000 suit, but it works for us because we’ve created an environment where it’s comfortable,” Smith said.
Each unit has the same core menu, which changes four times per year by season. The commitment to in-house preparation is unrelenting. Meat is cut in house and bones are roasted to make stocks and sauces, for example.
As a result, Paul Martin’s not only survived the recession, the chain has grown to include eight units, each averaging about 6,000 square feet.
Smith declined to reveal precise figures, but he said same-store sales have grown for more than 28 months straight.
What began in smaller markets is now moving into more prime locations, said Smith. The chain is looking to open units in downtown Los Angeles and San Diego.
In early 2015, Paul Martin’s is scheduled to open its first Texas location outside Dallas, with two more in California to follow. Smith said the concept has national potential, but the company does not intend to franchise.
Each unit works with operating partners and chef partners as active participants in the success of the business.
That people side is a big part of the “magic,” Smith said. “If you design great restaurants with great food and great people, it works.”
The new bar and grill
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Eureka!
Eureka! focuses on “a collection of America’s best” ingredients and beverages, or what co-founder Paul Frederick calls a “curation of great things.”
That includes the best local craft beers, small-batch whiskeys, regional wine and locally sourced ingredients.
Frederick and co-founder Justin Nedelman opened the first Eureka! unit in Redlands, Calif., in 2009. What began as a straightforward burger concept grew into a broader-format restaurant with a lively bar scene, live music and an urban vibe. The restaurants are typically located near college campuses or tech centers.
But don’t call it a chain.
Frederick prefers to describe the 12 units as “a family of restaurants,” though they all have the same name and basic menu.
Guests might choose from a $12 Fresno Fig Burger, with fig marmalade, melted goat cheese, bacon, tomato, red onion, arugula and spicy porter mustard, or a $20 flat iron steak with wilted kale and chimichurri sauce. There is also a roasted beet salad with watermelon Pop Rocks — yes, the retro fizzy candy.
The average per person check for lunch is about $12 to $14; dinner runs from $18 to $24. More than a third (35 percent) of sales comes from the bar, where guests can find hard-to-get libations.
Eureka!, for example, is California’s largest buyer of Pappy Van Winkle’s, a rare, limited-edition bourbon, Frederick said. Such whiskeys typically run $50 to $80 per two-ounce glass, but the restaurants often sell out.
“People really see that as a value, because we have something you couldn’t get anywhere else,” he said.
On some nights, Eureka! has more of a sports bar vibe, with games on TV.
“It’s a sports bar that women like,” Frederick said.
The emphasis on service is modeled after that of much-admired companies, like Hillstone Restaurant Group or Union Square Hospitality Group, Frederick said.
“Casual dining as a whole is shrinking, so how do you maintain your market share? We think service is a big part of that,” he said.
Eureka! units average about $900 in sales per square foot, which translates to more than $2.7 million per unit at the smaller end. The units are typically only 3,000 to 4,000 square feet — small for casual dining, but more nimble when it comes to real estate opportunities.
Three more Eureka! locations are scheduled to open before the end of the year in Irvine, Calif.; Austin, Texas; and Dallas. Eureka Restaurant Group plans to have 54 units open by the end of 2020.
Currently the Hawthorne, Calif.-based company is talking with an unnamed strategic partner about funding the next round of growth, Frederick said.
“We think this could go into any city,” said Frederick. “At Eureka!, we do a lot of things that may be common, but we do them really well and package them in the right way.”
The new burger/sushi spot
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The Cowfish Sushi-Burger Bar
When co-founders Alan Springate and Marcus Hall first considered merging a sushi concept with a burger concept, the common advice was: Don’t.
The two had been partners in a Charlotte, N.C., sushi concept called eeZ Fusion and Sushi, now about 10 years old. When they started looking for a second location in 2010, they loved a spot that was next to a burger concept operated by Springate, but the space was not big enough.
“So Alan said, ‘What if we just knock down a wall and put the sushi and burgers together,’” Hall said. “I was sitting in the office thinking, this guy’s gone loco. It was a dumb idea.”
They did it anyway, and the “burgushi” of The Cowfish was born.
The menu devotes equal attention to the sushi side and the burger side, with some blending of the two, including a popular bento box with a little of both and various East-meets-West components. Guests are encouraged to create their own customized dishes.
Food sales have been split fairly evenly between sushi and burgers, and Cowfish doesn’t have to worry about the veto vote for groups that might include a non-sushi eater.
The blending of seemingly incompatible categories proved to be a playful creative hook that plays out in the chain’s décor and music.
Phrases in the bathroom are translated from Asian languages to English and then to “redneck.” A quirky birthday song sung by servers includes both a gong and a cowbell. An actual long-horned cowfish — a fish with horns — lives in an aquarium in each unit.
“Everywhere you look, everything you touch is a hair off normal,” Hall said. “It’s oddly cultish. We encourage our staff to stay odd and be yourself and let loose.”
That playfulness has helped create an inviting, all-are-welcome atmosphere, Springate said. “We weren’t trying to build some swanky high-end sushi restaurant that you only went to on date night,” he said.
Technology plays a role, but not for ordering. On a busy night, guests are given a “fish” placeholder via text — generally with a funny name. As they wait, those guests can then watch their digital fish on a computer screen “holding tank.” When their table is ready, a net pulls their fish from the tank.
The average check is about $16 to $17 at lunch and $23 to $24 at dinner, and about 25 percent of sales comes from the bar. As the chain grows, restaurant size will be about 7,000 square feet.
With two locations open in Charlotte and Raleigh, N.C., a third Cowfish is scheduled to open in November at Universal Orlando’s Citywalk. The latter will be a licensed location about 2.5-times bigger than the typical Cowfish.
Though the partners say they don’t intend to franchise or license beyond that, the deal is opening doors. Springate and Hall plan to open a fourth location in 2015, though they haven’t determined yet where.
The partners, which include former Sammy’s Woodfired Pizza general manager Louis Camire, declined to discuss sales, but said trends have been positive since the brand’s inception.
“At this point, we want to make sure we got the model right to grow,” said Hall. “The soul and the culture of the concept are on the line.”
The new Jewish deli
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Eleven City Diner
Brad Rubin loves old-school Jewish delis. He also loves the traditional American diner.
After many years of working with various high-end restaurants, including many associated with the famed Morton family, such as Arnie’s, Mirador and N9NE Group, Rubin decided to create a hybrid concept that pays homage to both the Jewish deli and the diner.
The result, he said, is something new for the next generation.
Eleven City Diner opened in 2006 in Chicago, and a second location called Eleven Lincoln Park opened in 2013. Now Rubin is planning a third unit for Los Angeles that he hopes will prove plans to scale the concept nationally in cities like Miami, Las Vegas, Dallas and Kansas City.
Rubin doesn’t want to replace existing delis and diners, many of which are family run. Rather, he hopes to borrow their warm, mom-and-pop feel while offering a menu that’s a bit more current.
“I’m not looking to replace or do it better. I’m just evolving my brand to make it more accessible,” said Rubin. “What’s old doesn’t need to be fixed. But we’re giving people another reason to come in.”
Eleven City Diner features the requisite corned beef, pastrami and smoked brisket sandwiches, onto which one can add a slice of Swiss or a “schmear” of chopped liver.
Breakfast is served all day, and there’s a line of burgers and patty melts. But the menu also includes more healthful kale, quinoa and gluten-free options.
In addition, Rubin has designed the concept with various profit centers.
A soda jerk makes malts, egg creams and shakes, but the concept will soon roll out a new root beer program. Working with a brewing partner, the restaurants will offer various types of root beer, with different colors and flavor profiles.
Another section will include a candy counter featuring local purveyors and retro favorites, like Swedish Fish, salt water taffy and jawbreakers.
The Chicago units are roughly 6,000 square feet with private party rooms, but Los Angeles will aim for about 4,000 square feet with no party rooms.
The average check is between $15 and $16, though a plate of brisket and a glass of wine at dinner might top $20.
Offering a curated list of Israeli wines and local beers, about 10 percent of sales comes from alcohol, which Rubin said is surprising for a deli.
Rubin won’t discuss sales, but he said same-store sales in recent years have risen around 3 percent each year. The concept’s managing arm is Ehava Hospitality, based in Chicago. There are no plans to franchise.
Rubin, who hosted a season of “Unique Eats” on the Cooking Channel, will appear as a judge on this season’s Food Network show “Rewrapped,” but his focus is on growing Eleven City Diner.
This story has been revised to reflect the following update:
Update: Sept. 25, 2014 This story has been changed to update a quote from Paul Martin’s American Grill president and partner Anthony Smith.
Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout
