Oct 1, 2000

Recipe for a $40-Million Score

 

Luckily, Christine, beneath her warm and bubbly surface, was just as steely as her husband. "To make payroll I would have to pretend that I was booking a $5,000 party with my American Express card," she says. The couple struggled for five years after the restaurant closed. To pay the mortgage Splichal accepted consulting jobs; the first one, at Quo Vadis, in New York City, required him to spend long stretches of time away from home. "We only ate eggs and potatoes," Christine says.

At the time of the Max fiasco, the Splichals had been married for less than a year, having found each other through culinary connections. Joachim was introduced to Christine Mandion by pâ tissier and chef Michel Richard, who went on to found Citrus and its offspring, the Citronelle restaurants. Richard was a friend of Christine's parents, who own a bakery near Biarritz, and she was on her way to her first semester at business school in Phoenix. (She now holds a doctorate.) "I was a rebel, and all I wanted to do was travel, travel, travel," Christine says. Joachim was also fleeing his roots. Born in Swabia, in southern Germany, he dropped out of school to become, in Christine's words, "a ski bum." In those days he would find a hotel job in Switzerland for the winter and then travel -- to Morocco, Canada, Israel -- and obtain a kitchen job to support himself. He was good enough to get a job in Nice at the Hotel Negresco with the famously talented and temperamental Jacques Maximin, who was the first to recognize his ability. "He made me sous-chef when I was 23," Splichal recalls. "It taught me a lot in leadership." Splichal was a German in a kitchen of Frenchmen, some of them veterans of World War II. "For a year they gave me hell," he says.

The experience of the Negresco, as well as the ordeal of Max, toughened Splichal. When he got a chance to start over, in 1989, with a new restaurant, Patina, he was determined not to fail. It was a tribute to Splichal's reputation as a great cook and a diligent worker that he was able to raise $650,000 from investors, many of whom had been loyal patrons of Max au Triangle. "I knew he would do whatever was required to get the job done," says John Winthrop, founder and CEO of Veritas, an importer and distributor of high-end wines and spirits for restaurants and hotels, and an early investor in all Splichal's restaurants except Max. "He was a phenomenally good businessman, able to see opportunities that other people pass by. His talents enable him to cook as well as anyone in the world, but he's always emphasized the business aspect of it. He doesn't let his ego get in the way. If the customer wants iced tea, the customer gets iced tea. If the customer wants Caesar salad, he gets it."

An integral part of Patina's success was attributable to Christine. Joachim has been able to be so retiring because Christine isn't. Beautiful and gracious, she welcomed all the regulars by name; less visibly, she managed the staff. "Joachim is the concept," Christine says. "He is the one who sees what needs to be done, how much money we need to make. I was the doer, handling crisis situations, dealing with personnel." Or, as Joachim puts it, "I go out and make the deals, but behind the scenes there are all these things that have to be done. She creates the balance."

Winthrop's confidence in the Splichals was justified. Patina paid back its investors 110% in 15 months. (During the 11 years since it opened, the investors have recouped 600%.) Once they had reimbursed their investors, the Splichals assumed a 50% ownership. With the restaurant so successful, they had second thoughts about their lease, which required them to pay a percentage of the gross in rent. The next year they exercised an option on their lease to buy the building and parking lot, which came at a reasonable price, since the restaurant is located in a fringe neighborhood. "We saved $70,000 in rent the first year," Joachim says.

But one successful restaurant wasn't enough for Splichal. "He said early on that he didn't want to wind up like André Soltner, sautéing sweetbreads at age 65 behind a stove and then retiring and moving to a small place in France without a lot of money," Winthrop recalls. "He wanted to make some money. To do that he needed to have restaurants where he didn't have to be in the kitchen himself."

However, Splichal's success in creating a high-end restaurant was no guarantee that he could establish a business with numerous restaurants. The name of Patina was becoming well-known, at least among the Los Angeles elite that patronized such places. But what Splichal had was essentially a couture name without the talent or even the desire to make himself into a public personality. Could he reach a broader audience?

His friend Puck had branched out a year after opening Spago in West Hollywood by starting, 15 minutes away in Santa Monica, a restaurant -- Chinois on Main -- that was both more ambitious in cuisine and more elaborate in decor. Since then, with his wife, Puck has gone on to expand his empire of white-tablecloth restaurants to a current total of 11.

During that time, the couple has proceeded on a lower road, to reach a less affluent market. In the same year that they gave birth to Chinois, they also inaugurated the Wolfgang Puck Food Co. The business was originally a manufacturer of rich frozen desserts but has evolved into a $90-million company that produces frozen and canned foods for sale in upscale supermarkets and operates a network of casual-dining restaurants and fast-food joints. What binds together the company's disparate elements is the overarching and exceptionally appealing personality of Puck.

Lacking that charisma, Splichal progressed in a more focused and deliberate way, waiting for the right opportunities. In 1992 such an opening presented itself. Splichal read in the newspaper of the closing of Lasserre, an old-fashioned French restaurant that had been an entertainment-industry watering hole in the San Fernando Valley. "I went to see it," he recalls. "Within two hours I had a deal." This time he raised $1 million from about 50 investors to establish Pinot Bistro, a moderately priced restaurant serving the kind of French food with a California accent (salads and light entrées) that Puck had popularized at Spago. Having established a track record with Patina, the Splichals crafted a more favorable deal for Pinot Bistro. About 40% of the Patina investors went in; many of the rest were neighborhood residents or television executives working nearby. "They are your best PR agents, your investors, if you treat them well," Christine says. They bring their friends, they talk the place up, they turn it into a neighborhood hangout. After the Splichals had paid back the Pinot Bistro investors, in two and a half years, the couple assumed a 60% ownership.

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