Breaking the chain: a declaration of independents against chain restaurants

Entrepreneur, July, 2004 by Judith Potwara

AS CHAIN RESTAURANTS extend their reach into urban locales, independent restaurant owners say the best way to protect their turf is to join forces against the chains.

"The independent restaurant share of the dining-out pie is getting smaller and smaller," says Don Luria, president of the Council of Independent Restaurants of America (CIRA), which began in 1999 and now has 15 chapters. He points out that the rise in new restaurants, which the Bureau of Labor Statistics pegs at anywhere from 8,000 to 10,000 new restaurants per year, mostly comes from chains and franchises.

"The first thing to do is realize other independent restaurant owners are not enemies--they're your best friends," says Luria, who also owns Cafe Terra Cotta in Tucson, a restaurant with $3.5 million in annual sales. The 35 member restaurants of the Tucson Originals, the local CIRA chapter, buy co-op billboard ads together--something they couldn't afford on their own.

Likewise, the Washington, DC, chapter of CIRA is running a yearlong Web site promotion with WashingtonPost.com, posting a link to the chapter's Web site--which in turn links to its individual member restaurants. It's an advertising feat that would bankrupt one restaurant paying on its own.

In addition to group ads, CIRA chapters work to educate future customers. Several times a year, Luria sits down for dinner with a table full of middle-school students, fielding questions about topics like calamari salad. This Tucson Originals program, called Kids Dine Out, came about because the first restaurant experience for most children is of the burgers-and-fries variety, so many youngsters "never get past the chain restaurant," Luria explains.

Another goal: Spread the message that independent restaurateurs are people with a passion for food who are working together to better their communities. Ouita Michel, 39, owner of the Holly Hill Inn, a fine-dining restaurant outside Lexington, Kentucky, with $1 million in annual sales, teams with other independent chef/owners to host charity events throughout the year. "We sell authenticity," says Michel, whose menu ranges from dim sum to cassoulet. She says the charity-event teamwork lends her restaurant a nostalgic feel, reflecting the style of the 150-year-old inn. While Michel is not yet a member of CIRA, she is working to form a local chapter.

"Five years ago, if you asked me whether I'd put a card with the names of 47 other restaurants in my restaurant, I'd have said no," says Luria. "They don't call us independents for nothing. But we've got to learn to work together and create a brand around independent restaurants."

Bonus Round

EIGHTY-EIGHT PERCENT of small businesses offer benefits to full-time
employees. Here's a breakdown:

                  Small Biz    Female Biz    Ethnic Minority
                   Overall       Owners        Biz Owners      Startups

Flexible Hours       68%           68%             75%           61%
Paid Holidays        57%           45%             65%           36%
Paid Vacation        56%           44%             49%           29%
Health Care          51%           34%             61%           34%
401(k) Plan          28%           21%             22%            7%
Profit Sharing       13%           11%             16%            5%

SOURCE: OPEN: The Small Business Network From American Express