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The Balance Between Art & Finance Has Its Rewards

Editor’s Letter

The Balance Between Art

& Finance Has Its Rewards

A few months back when Restaurant Hospitality held its annual Concepts of Tomorrow Conference, most presenters spoke of growth strategies for emerging restaurant concepts. Robert Del Grande and Lonnie Schiller, however, talked about Aristotle and Plato. For many of those there, it was a a bit of a head-scratcher.

The duo, from Cafe Express in Houston, were attempting to point out that one’s artistic vision for a concept must be balanced with pragmatic plans for growth. Greek philosopher Plato, you see, was an idealist, while Aristotle was more practical.

Their point about balance became crystal clear last month when Del Grande and Schiller sold off 45% of their 13-unit, fast-casual concept to the owners of the Wendy’s hamburger chain.

Cafe Express, by the way, is a sibling of the two men’s ultra chic Cafe Annie, which Gourmet magazine recently ranked among the top 50 best restaurants in the United States. One of the country’s great chefs, Del Grande understood that when he and Schiller created their fast-casual concept, it could not achieve the culinary heights of a Cafe Annie and also make money. Both he and Schiller admitted at the conference how difficult it’s been for them to serve food several notches below Cafe Annie, while at the same time maintain pride in their growth vehicle.

So, here comes Wendy’s several years later and it forks over between $9 and $10 million for a piece of the Cafe Express action. Del Grande and Schiller will supply the culinary finesse, while Wendy’s will offer its expertise in operations, restaurant development, real estate, research and marketing.

"Our goal is to provide access to capital for Cafe Express so that they can grow the concept," Wendy’s Jack Schussler said recently to restaurant analysts.

For many of those who attend the Concepts of Tomorrow Conference, Del Grande and Schiller have accomplished the equivalent of hitting a grand slam–creating a concept so good that conglomerates with deep pockets will pay millions for it.

This move by Wendy’s was not so surprising. Consumer interest in quick service is waning and so are opportunities for growth in this segment. That’s why McDonald’s and others are looking for business ventures elsewhere. In McDonald’s case, it moved into the fast-casual arena when it acquired Donato’s Pizza and Chipotle, two concepts that were created, like Cafe Express, by independent restaurant operators.

As quick service opportunities continue to fade, it appears fast casual is the most likely segment that quick service leaders will move into for growth opportunities. Ron Paul of Technomic, a Chicago-based consulting company, recently identified more than 60 fast-casual concepts, "with most exhibiting strong growth and favorable economics."

Most tend to agree that the success of fast-casual comes not from its speed of service, but from its ability to emulate the full-service "experience."

This is all worth keeping in mind when you struggle for that perfect balance between art and finance. Achieving such balance just may make you millions.


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