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Batting One For Nine

After 15 years and eight different concepts, restaurateur Richard Tanenbaum finally has a winner. Problem is, he has no idea what to do next.
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HEYOOOOOOOOOO!" The howl comes from three heavily made-up blondes who may -- at best -- be minutes over the legal drinking age. Dressed in tank tops and shorts, each takes another sip of her Bayou Blaster, a rum-based drink that is a shocking shade of blue. Then for no discernible reason, they place their hands on the bar, throw back their heads, and howl some more. No one notices. The yells are swallowed up by the crowd noise. Sitting in the restaurant is not unlike being on the runway as a 747 goes by.

It isn't much quieter at the other Atchafalaya (SHA-fa-LIE-a) River Cafe, on the opposite side of Houston. There, the overflow crowd, who have arrived in everything from Porsches and Corvettes to pick-up trucks and battered LTDs, are trying to be heard over the blaring Dixieland music. They are two deep at the bar, and there is a half-hour wait for a table.

"That's 30 minutes on a Monday night," says Richard Tanenbaum, who owns both restaurants. "Having people wait for a table on a Monday night -- the slowest night of the week -- is what restaurant owners pray for."

There is no doubt that the Atchafalaya Cafe is the answer to Richard Tanenbaum's prayers. After 15 years and eight different restaurant concepts, the balding, bearded Tanenbaum has gotten what he has always wanted: an honest-to-god, flat-out winner. Both restaurants -- instant landmarks in Houston, thanks to the 30-foot-long red neon crayfish that adorns both signs -- are ringing up better than $900,000 in sales a month in a city where tripling layoffs and talk of depression is now commonplace. And while revenues are double his expectations, says Tanenbaum, earnings are averaging 22% to 25%, nearly 10 times the industry average.In short, things couldn't be better. The problem is, where does Tanenbaum go from here? Does he expand? Go public? Sell out? Stay just as he is and enjoy the ride?

They are nice problems to have and ones that Tanenbaum could only wish for until recently. The product of a wealthy Cuban family -- his grandfather was a textile-manufacturer-turned-department-store-owner -- Tanenbaum, now 40, was 14 when he left Cuba after Fidel Castro came to power and confiscated all of the family fortune. After college at Tulane University, Tanenbaum soon moved to Houston and dabbled in real estate development. One of his strip shopping centers needed a restaurant, so he opened his own in the early 1970s. Tanney's was a hamburger-french-fries-and-Coke-for-$1.49-type place. Ray Kroc at McDonald's didn't exactly yank down the Golden Arches in response. From there, Tanenbaum tried a steak place, another hamburger joint, and finally ended up running a Houston seafood restaurant, the Monument Inn, that was doing OK business, nothing great, but Tanenbaum was making a living.

When you grow up rich and no longer are and you are "infected with ambition," though, making a living is not enough."I don't want to say it was a desperate time in my life, but I was a little older, and it was necessary to come up with a winner," says Tanenbaum. "I don't want to mom-and-pop it and end up at 55 not feeling well."

So two years ago, Tanenbaum began -- really for the first time -- a sophisticated study of the restaurant business. Glorified coffee shops, such as Tanney's he realized, only work if you can get the economies of scale that come from opening a string of them. Upscale restaurants are too dependent on the economy. So Tanenbaum began looking at restaurants that offered entrees in the $6-to-$9 range. And he did more than look. He copied what they did well and improved what they didn't.

For example, Tanenbaum decided to set up shop near similarly priced restaurants. "We attract the same type of crowd," he says of his competition. Then it was a matter of putting up the building. The kind of restaurant that Tanenbaum envisioned was a seafood version of TGI Friday's, the $314-million Dallas chain. "But their restaurants cost about $2.7 million. I can put up a building for $900,000."

So why is Tanenbaum almost three times as smart when it comes to construction? "Look at their restaurants," he says. "They build them with a lot of platforms, raised seating areas. That costs money. I basically have one big room. They use a corporate buying service for their decorations. I do the buying myself, and what I spend $10 for to get something to hang on the wall will cost them $300. And have you looked at their menu? They have scores of different items."

So do you, a visitor points out.

"Sure, but all I serve is five things -- shrimp, oysters, redfish, snapper, and trout. If I've got 20 pieces of cooking equipment, they must have 60."

But it is what his chiefs prepare out of that kitchen that gives Tanenbaum his biggest advantage -- and his biggest potential problem. Atchafalaya is a Cajun-Creole restaurant, currently the hottest concept in the business. People want Cajun food today, just like they wanted Mexican a couple of years ago and steak before that.

Keeping with his basic approach, Tanenbaum borrowed from the best. Having loved his days at Tulane, he set out to re-create the dishes he savored in the French Quarter of New Orleans. When inspiration flagged, he borrowed from Paul Prudhomme, the Julia Child of Cajun cookin'.For authenticity, Jax and Dixie beers -- two New Orleans standbys -- were put on ice behind the bar. But what would all this be without the charm of New Orleans? Pictures of young ladies in various stages of undress were placed in the men's rooms, and bumper stickers, such as Pinch Me, Peel Me, Eat Me at the Atchafalaya Cafe, are available as souvenirs.

The crowds, attracted by the neon crayfish that swishes its tail from side to side, came on opening day and haven't let up.

But for how long? "I know I have five years," Tanenbaum says. "This Cajun thing should last that long." So what can be do to make sure he gets the most out of those 1,825 days? Frankly, Tanenbaum isn't sure.

He hopes to open two restaurants in Dallas -- one this January, the other in the spring -- and thinks he can add another every four to five months. Tanenbaum says that if he wants, everything but the building itself can be financed out of cash flow. But he isn't sure that's what he wants.

When he met a visitor a couple of weeks before, Tanenbaum seemed certain of his future. "Do you know anyone at Greyhound food management?" he asked in all seriousness. "Don't you think they would be interested in something like this?"

They might. But now, less than a month later, Tanenbaum is not so sure he wants to sell. He has just gotten the new numbers that show the second restaurant is doing slightly better than the first -- although it has only been open for six months -- and suddenly, corporations don't look so attractive to a man who likes to wear jump suits and flowered shirts. "When you sell, they want your soul. They'd probably want me to sign an employment agreement, right?"

Three to five years is standard, he is told.

"Man, that can be a lifetime to someone like me. I'd go crazy."

He could expand faster by going public. "Yeah, I've talked to the people at Montgomery Securities and Alex. Brown. That's a thought, but I don't know . . ."

How about keeping it private and bringing in professional management to run it for him? "Yeah, but those guys are not cheap. I know I've got to do it, but I don't like it. That means there will be some guy in a three-piece suit sitting in the office and making a lot of money, and he is not working in the restaurant. That just pisses me off."

Well, what are you going to do?

"I just don't know," says Tanebaum, but he doesn't look particularly worried. Behind him, the cash register sounds like a symphony. "I've got no gun to my back. The money is coming in, and it's nice. I'm enjoying it. After that, we'll see."

Folks who might want to help can reach Tanenbaum most every day at the Atchafalaya in Houston.

Last updated: Dec 1, 1986

PAUL B. BROWN | Columnist

Best-selling author (and Inc. magazine columnist) Paul B. Brown's latest book, Own Your Future, has just been published. Brown's blog appears every Tuesday, Thursday, and Sunday.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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