Ted's Montana Grill bullish on expansion

Nation's Restaurant News, Feb 17, 2003 by Jack Hayes

ATLANTA -- Ted's MONTANA GRILL, a bison-specialty newcomer to casual dining, is eyeing a 36-unit expansion through 2004 and "hundreds" more openings thereafter under chairman and co-founder Ted Turner, the ex-AOL Time Warner vice chairman who is America's biggest buffalo rancher.

Six-unit Ted's, launched 13 months ago by the partnership of media pioneer Turner and casual-dining pioneer George McKerrow Jr., is boasting annualized per-restaurant revenues of $2 million to $2.5 million at its 3,800-square-foot, Old Westtheme locations. They seat slightly more than 100 guests and feature signature hickory floors, tin ceilings and gilded artwork.

Carving a popular niche in the midpriced "classic American restaurant" segment on the strengths of a menu showcasing lean American bison, Ted's intends to open another dozen units this year followed by 24 restaurants in 2004.

The chain plans to establish a multistore presence in its home market of Atlanta as well as in Denver and central Ohio. In addition, it seeks toeholds in Birmingham, Ala., Lexington, Ky., Raleigh and Durham, N.C., and Tallahassee, Fla., and entry into the Northeast and the West Coast.

"We've invested $12 million in this brand," said McKerrow, the Atlanta restaurateur who carved his fame in the beef business with the launch of LongHorn Steakhouse in 1981. "We have an executive team capable of moving very quickly."

Indeed, billionaire Turner's departure from AOL Time Warner has raised speculation about how involved the senior entrepreneur may become in the emerging brand that bears his signature. As one of the nation's largest private landowners, Tumer has holdings that include 10 percent of the once nearly extinct American bison population, which numbers 400,000 head currently. "I've got a lot of buffalo to move," CNN founder Turner once quipped at a convention of broadcasters while explaining his launch of Ted's with McKerrow.

"Ted has been very involved from the beginning," said McKerrow who, while still active at LongHorn, set the eventual Ted's venture in motion by approaching Turner unsuccessfully in a bid to purchase bison.

"He enjoys this business because restaurants are positive and entrepreneurial and because this is a startup operation," McKerrow said of his partner.

"At this time of his life Ted is willing to spend energy on the things he enjoys," McKerrow added. "We have a lot of communication. He's a terrific chairman and a great guidance counselor."

Assigning split duties for the day-to-day development and running of Ted's, McKerrow and Turner brought in ex-Applebee's and Rio Bravo veteran Bryan Lyman as vice president of operational development and Joe Weiland, who had run 60 units for the Lone Star Steakhouse group, as operations vice president.

The group also hired Max Sheets, former head of real-estate development for Lone Star, as Ted's real-estate vice president; Susan Alvarez, a 15-year LongHorn veteran, as chief financial officer; and Patti Nash, formerly with Rio Bravo, Applebee's and Logan's Roadhouse, as human-resources vice president.

"Basically, we put the company together in an upside-down manner," McKerrow said. "In fact, we'll be overloaded until we get to 50 restaurants, but we're capable of opening hundreds."

Noting that Ted's fits "about in the middle" of the highly populated casual-dining segment, McKerrow said the concept has an upscale feel that contrasts with its value-oriented menu, which leans strongly toward sandwiches.

Leading the food lineup is a menu of 20 signature burgers, such as the Skinny Dip with grilled ham, fried egg, bacon, mushroom, fried onions and a choice of cheeses. Another is the New Mexico, with Monterey Jack cheese, Anaheim green chilies and guacamole, also offered with either bison, beef or "brick chicken."

"Most of the industry thought we were crazy," said McKerrow, "and quite honestly I thought we'd sell maybe 20 percent of our mix in bison, but it was 60 percent from the beginning, and now it's 75 percent. It's what our guests want, and I think the big reason is nutrition."

He added that chicken ranks a "distant second" to bison, which has gained a growing reputation as a low-fat, low-cholesterol, lower-calorie meat option.

McKerrow and Turner--following their continued success with bison burgers--now are showcasing lunch and dinner bison menu specials, such as bison French dip, 6-ounce and 9-ounce bison strip loins, bison pot roast, bison prime rib and bison tenderloin filet. The result is a $2 increase in the average guest check, up from roughly $13 to nearly $15, McKerrow said.

Culinary veteran Mike Huffler, formerly with the Houston's chain, developed the menu of Ted's Montana Grill, McKerrow added.

"We've created a unique niche on two fronts--first, the restaurants are refined yet simple; second is our totally distinctive menu," McKerrow remarked. "We control the supply because Ted owns 10 percent of the North American bison herd; all of the other chains have had an opportunity to look at bison, and they all turned their back on it."