National chains brave New England's higher costs, chilly business climate

Nation's Restaurant News, April 22, 1996 by Robin Lee Allen

Old Man Winter forced Rattlesnake Holding Co. Inc.'s expansion plans into a brief hibernation, but warmer weather means it's time to strike again.

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During the next six months the Stamford, Conn.-based company plans to open six new Rattlesnake Southwestern Grills around the New York metropolitan area -- despite an unprecedented influx of national chains bidding for the same land.

"It's opportunistic," David C. Sederholt, Rattlesnake's president and chief operating officer, says of his company's planned growth.

"We have decided that we, as regional operators, have the ability to act a little more quickly than the national companies," he explains. "They're not as familiar or as comfortable with opening in this area as we are."

Once held at bay by exorbitant real-estate prices, national operators like Cheesecake Factory, The Olive Garden and Outback Steakhouse now are ignoring the cost and the cold of the mapledotted Northeast in their never-ending search for more wallets to tap.

But for many regional operators the unwelcome invasion has had a surprising outcome: growth, both because and in spite of the increased competition.

Many regional operators have prevailed by improving their operations, while others have found themselves poised fortuitously to profit from trends they may or may not have foreseen.

"We were here 10 years ago, but we're catching a tide coming our way," notes Mike Larkin, president of privately held Border Cafe, a four-unit chain of casual Mexican dinner houses based in Saugus, Mass. "A lot of foods from hotter countries are going to be very popular, and the whole country is becoming more casual."

Larkin opened the first Border Cafe in Cambridge, Mass., in 1986 after leaving the world of chain restaurants for the freedom of running his own show.

His idea was to create a Mexican restaurant with a culinary repertoire bigger than the lonely enchiladas and tacos pushed widely by competitors.

He developed a menu with more chicken products, fajitas and some Cajun specialties and created a festive atmosphere with strings of colored lights, upbeat music and bustling servers.

"The food is excellent," Larkin boasts.

"It's a fun place to go, and there's value for the food -- that's the main thing."

With an average dinner check of $12, the 230-seat concept has traveled well. A second Border Cafe opened in Saugus, Mass., in 1990. Since then two units, renamed Jose Tejas, have opened in Woodbridge, N.J., and Paramus, N.J. A third Jose Tejas will open in Fairfield, N.J., in May.

"Obviously, it's so much more competitive now than it was five years ago," Larkin comments. "You've really got a whole lot of people fishing in the same pond."

Luckily, he says, the pool of people who like spicy cuisines, such as Mexican, is expanding, and the number of foodservice operators catering to them has not yet caught up.

"We just constantly try to execute what we do," Larkin remarks. "If we run our game plan, we do really well. ... But if the rate of change is 10 percent, you'd better be changing at 50 percent."

In New Hampshire change has a slightly different pace, says Alex Ray, president of Great American Dining Inc., based in Ashland, N.H.

Although Applebee's, Red Lobster, The Olive Garden and Pizzeria Uno all have recently set up shop in nearby Concord, N.H., Ray continues to grow his niche in the Granite State by concentrating on the business within his walls.

"Competition is two things: doing your job well and making the least mistakes," Ray says. "We don't have to be Wolfgang Puck or Jasper White. We don't have to be the pioneers. We just have to do it well and keep up with the times."

Staying current also means growing when you can. Twenty-five years after opening his first Common Man restaurant, Ray will open his fourth in Windham, N.H., later this summer.

"I was real conservative for 15 years and stayed close to home," he explains. "But in order to keep good people, you have to grow."

Although Great American Dining also operates two '50s-style diners, two seafood restaurants and an Italian restaurant, the rise in popularity of contemporized traditional American fare has made the Common Man an obvious growth vehicle.

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"Of all the types of restaurants we have, I think the image is very good and well-known in northern New England," Ray notes. "And we're most proud of its American-tradition feeling. It's also the easiest to replicate." Besides, he adds, "I thought it would be fun to come back to the one you like the best."

With locations -- whose real estate he owns -- dotting Interstate 93, Ray lures tourists as well as locals with such offerings as pot roast, shellfish stew, herb-crusted chicken and hickory-smoked pork spare ribs. The average check for dinner is $18. Only the original Common Man is open for both lunch and dinner.

To better support his growing company, Ray just relocated his corporate office from his daughter's former bedroom to a new building with a storefront from which Common Man retail items and other New Hampshire memorabilia will be sold.