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(November 2000) - If you want to be in the business
of expanding great restaurants into new locations, you couldn't find
a better
one
to pair up with than the 87-year-old Miami Beach institution, Joe's
Stone Crab. Popular? Joe's no-reservations policy means that the
1200-plus
tourists and locals who show up nightly endure a two-hour wait to
get in - and feel lucky when they do. Profitable? The 450-seat Joe's
grosses well north of $20 million annually - in just seven months
of operation. |
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It's a restaurant with everything an owner-operator
could possibly want - except a logical way to expand. Which made it
exactly the kind of plane the honchos at Chicago-based ICON LLC were
looking for. |
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"ICON was formed to establish partnerships with
restaurant icons for the express purpose of expansion and development,"
says Gerard Centioli, one of the two lead partners in ICON LLC (LLC
being legalese for Limited Liability Company). Their definition of
a restaurant icon? "It's a best-of-class operation that has stood
the test of time," Centioli says. |
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Never heard of ICON? You soon will. In addition
to Centioli, a senior partner and senior vice president at Chicago-based
Lettuce Entertain You Enterprises, Inc. (LEYE), ICON's co-head is
LEYE founder and chairman Richard Melman. Whether he's thinking up
concepts or fine-tuning a restaurant's daily operations, Melman is
without peer in the industry. |
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ICON is a separate company from Lettuce, and has
a different mission. "Lettuce creates concepts," says Centioli, onetime
president and C.E.O. of the Emerging Concepts division of Brinker
International. "It doesn't replicate them. ICON partners with existing
restaurants and grows them. Our setup is that Lettuce provides the
administrative and support services necessary to run ICON restaurants,
while ICON itself focuses on strategic development and financing." |
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It seemed like an attractive package to Jo Ann
Sawitz Bass and Stephen Sawitz, the third and fourth generations of
the Weiss family, founders of Joe's Stone crab. They had been approached
several times by other entities interested in acquiring rights to
Joe's - either franchising it or buying the operation outright - a
partnership with equity participation - had possibilities. |
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"We began meeting with them more than two years
ago," Stephen Sawitz recalls. "The ICON people really understood what
made us tick. There's a true blending of talents between the two groups."
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But Sawitz is careful to note the Joe's Seafood,
Prime Steak & Stone Crab that opened late last month in Chicago is
a much different operation from Joe's Stone Crab in Miami Beach. |
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"We look at the deal with ICON as a way for us
to create a brand with a great group of operators from Chicago. We
knew we couldn't duplicate what we had here, especially the family
aspect of Joe's Stone Crab in Miami Beach." |
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Indeed. Joe's Miami Beach is a one-of-a-kind operation
that would be impossible to duplicate for several reasons. |
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Granted, the 3rd and 4th generations of the Weiss
family are sharp operators, but at least part of Joe's Stone Crab
extraordinary success has been attributable to luck. When founders
Joe and Jenny Weiss opened their original spot at the southern tip
of Miami Beach, it was in the middle of nowhere. In later years, the
by-then seedy neighborhood was reborn. Now it's part of South Beach,
a world-class tourist hot spot that sits at the edge of a vibrant
major metropolitan area. |
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ICON had zero chance of duplicating any of this
in Chicago. But their location is still a beaut. Joe's Chicago sits
at the corner of East Grand and Rush in River North, a dining-entertainment
area just north of Chicago's Loop. It's right next to The Shops at
North Bridge, a massive new shopping complex designed to lure the
throngs from fabled Michigan Ave., the next street over from Joe's.
Most of Chicago's big convention hotels are just a stroll away, too. |
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As for the locals, "We expect plenty of business
from the offices nearby, especially at lunch," says Centioli, "and
we're close enough to the Loop that we'll draw from there, too." |
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Joe's Chicago will need that steady lunch business. The diciest part
of this grand experiment is running the Joe's concept 12 months of
the year, including the five months when stone crab is traditionally
unavailable. It's a big reason why Joe's Chicago is not a carbon copy
of Joe's Stone Crab in Miami Beach. |
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"The name of the Chicago operation is Joe's Seafood,
Prime Steak & Stone Crab," say Sawitz. "It's a modified concept, and
is the closest thing in the world to Joe's Stone Crab. Kind of like
a cousin." |
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The carefully chosen name helps manage customer
expectations. "Many first-time patrons will expect us to be the same
as Joe's in Miami Beach," says Centioli. When you go there, they always
have stone crab, so customers always see Joe's at its best. |
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"But our Chicago unit doesn't have the luxury of
simply shutting its doors when the crab supply dries up. This real
estate is too expensive," says Centioli. "We have to run 12 months." |
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While it's tough to project, Centioli expects the
order mix at Joe's Chicago to split into equal thirds between steaks,
seafood dishes and stone crab when tabulated on an annual basis. At
Joe's in Miami Beach, fully 80 percent of patrons order stone crab.
Right behind that in popularity are the chain's legendary a la carte
side dishes - creamed spinach, hash browns and coleslaw - plus key
lime pie for dessert. Making up the balance of the menu in Chicago
will be new items constructed be executive chefs Joe Decker and Gary
Baca |
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One thing the ICON people loved about Joe's was
that it is one of those rare restaurants famous for its food without
being a chef-driven operation. To be sure, the culinary staffers at
Joe's Miami Beach are no slouches, and their reputation for turning
out amazing amounts of food with equally amazing consistency may be
without parallel in the industry. But if the chef were to quit, it
wouldn't make a dent in the operation. It's a strong foundation to
build on. |
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The ambiance at Joe's Miami Beach is as famous as
its food, but not for the same reasons. Joe's doesn't take reservations
and is epically busy, no patrons routinely grouse about 2-hours-plus
waits and maitre d's that are, to put it kindly, intimidating. Once
you're in, the service staff is slick and professional, but if you're
looking for a slow-paced, warm and fuzzy dining experience, Joe's
may not be the place for you. |
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Expect a serious upgrade of the congeniality level
at Joe's in Chicago along with a reservations policy. LEYE operations
are user-friendly to the max, and ICON's Joe's Chicago will be, too.
Oh, the design features a step-up maitre d' podium in an over-sized
bar/waiting area just right for holding the better part of turn for
this 250-seat operation. But the vibe will be much different. "We'll
use a high-tech approach to manage the dining room, although it will
be transparent tot he customers," says Centioli. "Lettuce has an alliance
with OpenTable.com, and we'll use their system to handle our reservation
and walk-in customers." |
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Presuming Joe's Seafood, Prime Steak & Stone Crab
is a roaring success, would there be additional units of this Joe's
spin-off opened in other cities? That's what ICON is hoping, but,
Sawitz is taking a wait-and-see attitude. "I think that they want
more, but I don't," he says. "I want to see this one work first, that's
the priority right now. Crabs are a finite resource, and I want to
see this one work first." |
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His skepticism is in part founded in his own experience
with taking Joe's from a seven-month to a 12-month operation, which
the company tried for a couple of years and then abandoned. "We did
a little better than break-even financially, but it was really hard
on our staff," Sawitz recalls. "They work a six-day-per-week schedule,
and at the pace we go at, it wasn't worth burning them out for what
we made." |
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One of the most frequently asked questions about
the second Joe's is "will there be enough stone crabs to go around?"
There'd better be. Sawitz, who runs a stone crab supply business that
also uses the Joe's name, is planning on selling a ton more. |
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"Crabs are a finite resource," he says. "But I
think Joe's Chicago will help our shipping business grow, particularly
our on-line E-commerce efforts." |
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Crunch time for Joe's Chicago will come late next
spring, when the stone crab season ends. But in the meantime, the
amount of restaurant operating firepower brought to bear on this particular
project makes it seem like as close to a can't-loose proposition as
the industry has ever seen. |
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That's the bet ICON principals are making. Their
long-range goal is to have four-icon portfolio. Joe's and the group's
30-store Krispy Kreme doughnut franchise in Washington, Oregon, Alaska,
Hawaii and British Columbia are the first two, and Centioli says ICON
is in negotiations right now with the others. |
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Then ICON plans to go public, although all four-icon
concepts may not necessarily be part of the offering. When they do,
it's going to be on IPO that restaurant-savvy investors will snap
up in a hurry. |
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