So You Want To Open a Chain Restaurant? You’ve Got To Learn About Chicken Wings.

Commentary about business and finance.
Jan. 31 2013 11:36 AM

How To Open a Chain Restaurant

It’s all about finding the right size of chicken wing.

130125_DOERS_QUAKERSTEAK
A Quaker Steak & Lube restaurant

Photo by Jim Larimore.

Chain restaurants—or casual dining spots, as they’re called in the business—are an American universal. Sure, we might crave seared scallops with a cauliflower puree accompanied by a glass of wine at a chic bistro, but we’ll end up with mozzarella sticks and a sizzling chicken skillet at Applebee’s more often than not.

Rachael Larimore Rachael Larimore

Rachael Larimore is Slate's managing editor.

There are 200,000 casual dining establishments in the United States, clustered at highway interchanges and shopping centers. They amount to a $200 billion-a-year industry, and they are successful because they hold a certain appeal: as a refuge for parents who are too tired to cook after a long week, as a convenient gathering spot for workers from suburban office parks, as a suitable place for guys to don their jerseys watch a game.

Because casual dining outlets have such ubiquity and such uniformity—a T.G.I. Friday’s in Cincinnati looks just like one in Indianapolis—it’s easy to believe that they spring from the ground fully formed, complete with booths and bars and servers in matching T-shirts.

But when you spend time with those who franchise and build chain restaurants, you learn that they can take as much hard work and can cause as many headaches to open as a 50-seat locavore vegetarian joint. And opening a successful place engenders just as much passion and pride.

When we moved to our suburban Cincinnati neighborhood seven years ago, I was delighted to hear that a restaurant called Quaker Steak & Lube was joining the bevy of restaurants in a retail/dining development just a half-mile from our home. I grew up an hour from the original, which was located, as its name suggests, in an abandoned service station in Sharon, Pa. I never went myself, but it was destination dining for friends who would make a point to stop on trips to Pittsburgh. The chain is known for steaks and wings, and if you order their “atomic” sauce, you have to sign a waiver.

Even better, one of the men involved in opening the new Lube was also building the house next door to ours. Visions of garlic-sauced wings danced in my head. And in getting to know our neighbor, Jim Mills (who, I should disclose, has provided wings for plenty of neighborhood functions since the place opened), I’ve seen and learned just how much work goes into opening and running a chain restaurant. Things that people might never think of. For example he can talk at length about the challenges of finding just the right chicken wing.

Mills works for the Paragon Group, which just this fall opened its third Quaker Steak & Lube restaurant in the Cincinnati area. I wanted to learn how they do it, so I met with Mills and Jim Combs, the president of the group. Up until 2005, Combs had been the president of a company called the Bistro Group, a franchisee that owned 32 T.G.I. Friday’s, mostly in Cincinnati, Pittsburgh, Kentucky, and West Virginia. “[In 1996] I had been building restaurants in Pittsburgh for about 20 years, and I knew the market really well,” Combs relates. “We were looking at a piece of property near the new airport. We decided for financial reasons at that moment that we didn’t want to build at that location. The location ended up going to a gentleman who franchised the very first Quaker Steak & Lube.”

Combs kept his eye on that restaurant.

“My director of operations said ‘you have to come see this place, it’s crazy busy.’ We went in … people were loving it,” he recalled. “This concept in itself was very unique. High volume, casual, wings and burgers and beers. Very blue collar. At the time, I didn’t see a concept that really targeted blue collar customers like this. It’s family-friendly, it has a very loyal customer base. Once they like it, they like it more than any concept I’ve ever seen.”

Combs was intrigued, and eventually left his job and signed a development agreement to build four Quaker Steak & Lubes in the Cincinnati area. Not long after, Mills came aboard. What’s special about the Lube? We’re all used to walking into chain restaurants and seeing slightly different takes on kitsch. Friday’s, perhaps the originator of this theme, has its movie posters and faux sports memorabilia. The Lube takes this idea to a whole new level. Motorcycles and the shells of actual race cars and dragsters hang from the ceilings. Glass display cases hold scale models of sports cars and other vehicles. The door handles are gas pump handles. The menu is full of automotive-inspired puns. And the food? The wings are better than what you get at other similar joints, the burgers show attention to detail (the bacon’s actually crispy, and the toppings don’t obliterate the flavor of the beef), and the steaks are reasonably priced. (I usually just get the wings.)

So Combs had his concept. And he had his group. It was time to build a restaurant. Combs and Mills walked me through a rough timeline of their process. First, they set about finding a location and a developer. Their preferred business model is “build to suit”: A developer buys the land and owns the building, which is built to the restaurant group’s specifications and which is leased back to the restaurant. The Paragon group is responsible for everything inside.

Once they find a location they like, it’s time to bring in Steak & Lube corporate, “for their blessing,” as Combs puts it. If the home office is happy with the location and the site, they offer several different building plans, and Combs has a contract with an architect who is approved by corporate and has built other Lube restaurants.

The three restaurants in the Cincinnati area are between 8,000 and 11,000 square feet, and the larger ones can set more than 400 people at a time. They employ from 75 to 150 people each. To build and open a restaurant of that size, Combs tells me, costs a little more than $4 million. Because of the build-to-suit arrangement, his group needs to raise only $1.2 million of that, to fund the equipment and furnishings and to hire and train the staff.

Once ground finally breaks on the building, Combs said, the restaurant group is in the home stretch: It takes six months for construction. They hope to have their managers in place 12 weeks before the opening, and they start hiring hourly employees with six weeks to go.

Opening a restaurant the size of a Lube requires a couple of hundred servers, cooks, managers, and support staff. But because their group has developed a reputation as a good place to work, Combs says, people with experience seek them out. And then those employees get a lot of hands-on guidance. “You have to have people who take pride in what they do, in the presentation of the food on the plate, in how it looks and how it’s going to taste,” Mills says. The system takes work, but it produces better results than places where “you get a guy that, to be honest, is not making a ton of money, some of these guys who are cooking, and no one follows up with them. You end up with a mediocre product.”

Then there is the all-important matter of wing quality control. As Mills likes to explain, there is a sweet spot with wings, and it’s about seven wings per pound. Too big, and customers feel they’re not getting enough in an order; too small, and there’s not enough meat on the bones. And it doesn’t take much to mess with that ideal: “Right now wings are running bigger,” Mills explains. “That happens sometimes due to holidays. [Farmers] have down times, where they aren’t killing so the birds live longer and they get bigger.”

Mills’ emphasis on quality control comes from his 20-plus years in the industry. He learned his trade before the advent of “convenience foods”—all those frozen cheese sticks and French fries and chicken tenders—and brings that mentality to the Lube. “When I started, we cooked everything from scratch. Back in Friday’s in 1982, we made our own potato skins, our own soups and sauces and dressings. Not too many people today make their own dressings.”

Mills looks for chances for the Lube to serve homemade food: a hand-breaded fish sandwich for a Lent special, homemade soups on the lunch buffet. It’s not inexpensive, but it helps bring diners to the restaurant, he says.

One other task that must be fit into the final weeks and months: Acquiring, and then hanging, car bodies and motorcycles—and, in the case of one restaurant, a racing boat—from the ceiling. One restaurant features an intact 1964 Corvette. As Combs talks about how they source these conversation pieces, you begin to understand that his talk about people loving the restaurant isn’t just a businessman’s bluster.

“A guy walked in the door one day and offered us the dragster that is hanging in the foyer,” Combs says. “His daughter grew up and doesn’t drive it any more. It’s been sitting in his garage. He felt like, shucks, let me take it over there and let those guys hang it up.” A friend bought an Indy Car shell and gave it to the group, and another family has supplied dozens motorcycles for the three restaurants. Combs now has a guy with a background in construction who comes in with his sons to hang everything. “But in the first restaurant, [Jim Mills] and I and a couple other guys did it. He falls off ladders,” Combs says, chuckling and pointing at Mills, “and I get dizzy. It’s not as hard as it seems, but it’s work.”

That wasn’t all that Combs and Mills did by themselves in opening that first restaurant back in 2006. “When we opened [the] Milford [location], we opened that restaurant with five managers. Two of them were Jim and I,” Mills said. “Jim … is not a real morning person. So he decided he’d work nights. He’d come in at noon, and closing the restaurant at midnight or 1 every night. We did that for the first I don’t know how many months.”

So, why do it? Profits are nice—and Combs’ group won’t agree to a deal with a developer unless it has reason to believe the location can hit a certain revenue threshold—but there are months, if not years, before the profits roll in, and it takes crazy long hours to get there.

“The day you open the door, that’s what it’s really all about,” Combs explains. “You’ve got people coming in here and telling you they love the place, and they love the food, and you’ve worked very hard to get to that point. The passion we put behind serving a burger or rack of ribs or wings or whatever … if you don’t have that, you shouldn’t be in this business.”

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