The Transylvania Restaurant in Portland, Oregon closed down after a delayed opening hurt profits and the restaurant's disco night offended its conservative Romanian patrons. A business obit.
The Business: A Romanian restaurant and nightclub Opened: October 1996 Closed: July 1997 Causes of Death: Owners' failure to account for the sensibilities of core customers; a prolonged delay in opening the business
Peter Mann, 46, and his wife, Jo Ann, 40, were part of a wave of Romanian immigrants who fled Communist tyranny in the late 1970s and early 1980s, settling in Portland, Oreg., and adapting to American ways. Jo Ann, who married Peter in the United States, showed a zest for exploring opportunities offered by the free enterprise of her adopted land. In 1992 she bought the assets of a Greek restaurant, the G&R Souvlaki Stop, but its fortunes flagged because of its location in a shopping mall that fell out of favor. Before long she was operating a home for the elderly, and she and her husband bought and sold real estate.
The two embarked on their most ambitious venture in October 1996, when they opened a 199-seat restaurant inspired by their native country. Its menu featured, among other items, Romanian salad, a Romanian plate (including stuffed peppers and moussaka), homemade Romanian cakes, and Romanian coffee. The 4,000 square feet they leased in a Portland mall for $2,000 a month comprised a dining area and a bar. They envisioned having live music for "special events such as traditional Romanian weddings and holidays," as their application for a liquor permit disclosed.
The couple chose the name Transylvania Restaurant, linking their business tightly to the community of 12,000 people of Romanian heritage in the metro Portland area whose patronage they hoped to attract. The Manns projected sales of $190,992 in the first full year, with about three-fourths from food and the rest from liquor, beer, and wine.
They then showed American ingenuity in multiplying the return on assets. To boost weekend revenues, they inaugurated disco nights. The strategy worked--for a while--packing the Transylvania with mostly young people for dancing and drinking two nights a week. "We used to serve a lot of people," says Jo Ann Mann. "On a Friday or Saturday night, when we had the disco, I had 120 or 130 people each night."
But the Manns miscalculated. Disco nights offended some members of the conservative Romanian immigrant population, on whose goodwill the Transylvania depended. In a sermon 14 months ago, pastor Nicky Pop of the Philadelphia Romanian Pentecostal Church, Portland's largest congregation for Christians of Romanian descent, allegedly decried the Transylvania. In the words of the slander suit that the Manns later filed, Pop allegedly denounced the restaurant as an "evil place" that served alcohol to minors, and he reportedly warned that anyone "who frequented the restaurant would be excommunicated." Pop denies making both statements. He acknowledges only deploring the Transylvania as a gathering spot for late-night drinking and dancing by young members of his congregation.
"The first weekend after he talked in church about us, I had three people on Friday and five people on Saturday," Jo Ann Mann says. The restaurant's patronage declined by more than 70%, costing the couple $24,000 in profits for March and April, the Manns' lawsuit alleges.
Just how much the pastor's words might have hurt the Manns' business is contested. "This restaurant could not survive because of mismanagement, not because the church did anything," Pop claims. One undisputed fact: the Manns' 17-month delay in opening the Transylvania while they remodeled and raised capital squandered $34,000 in rental payments before they had earned a dime. Then there are the high odds against success in starting a restaurant, whether or not a local cleric denounces it. In 1996, one in four restaurants in the United States that had been open for five years or less failed, according to Dun & Bradstreet.
All of which obscures the effect of Pop's allegation against the Transylvania Restaurant, insists the Manns' lawyer, Tod Eames. "This is a tight-knit community," he says. "There are a lot of Romanian immigrants here, and they all associate together and do things together. That's why it had such an impact." --Mike Hofman
MIKE HOFMAN was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman