It also turned out that 60% of the restaurants' customers had children aged 8 to 16, and 30% of those parents were single -- and time strapped, LeFranc assumed. That meant a huge potential for the company's takeout business. To grow the chain's already substantial takeout trade, LeFranc had one of his managers set up a toll-free phone number that would detect where a customer was calling from. The system would route the call to the nearest Louise's location.
During the bankruptcy, "we never had time to focus on just sales building, as we can now," says the CEO. "We were always juggling priorities." With the team's full attention, sales grew 4.8% in the fourth quarter of 2000 and peaked with an 11.5% gain in December. In early 2001, sales rose another 6.7%.
When a guest sits down for a lunch of grilled swordfish over fettuccine with a piquant tomato sauce at a Louise's in West Los Angeles, all the elements that LeFranc has put together are in evidence. The food arrives quickly; the steaming fish is juicy. And the sauce -- whose tomato base is outsourced to a supplier -- tastes homemade. The CEO has reason to complain only when a waiter clears an appetizer plate and leaves a guest without a fork for the main course. It's a small point, but LeFranc notices it -- just as he notices everything else.
Ultimately, the triumphs of LeFranc's business are measured in tiny increments -- shave a percentage point on food costs, lift customer counts by 1% or 2%, get another $1.25 per average check, strive for three seatings a night instead of two. At some point, perhaps this year, LeFranc and his staff will have made all those changes. Revenues will be about as high as they can go, given the size of the restaurants, and margins will be healthy. Then Louise's can begin expanding once again -- but this time without disastrous results.
The difference now is that LeFranc, the detail man, will be in charge. He figures he can open up another five locations without adding corporate overhead, so cash flow from those new restaurants would pour straight to the bottom line. Owner Jon Chait is in favor of the plan. "It's hard to have a restaurant business that's standing still," he says.
In any industry, turnarounds are grueling. In the restaurant business, they're brutal. Without persistence, luck, and a bloodhound's attention to detail, they're fated to fail. LeFranc had all those things. So now he's finally back where he started -- ready for growth.
Samuel Fromartz is a freelance writer and an avid cook in Washington, D.C.
An Epicure's Recipe for Reality
Anthony Bourdain, a professional chef and author of the best-selling memoir Kitchen Confidential: Adventures in the Culinary Underbelly, has run kitchens that were stunning successes and others that were dismal failures. He offered writer Samuel Fromartz his sobering advice on turnarounds.
Inc.: What's it like working for a failing restaurant? Does it resemble a house of cards falling, or is it more gradual?
Bourdain: It sucks. It's soul destroying in increments, particularly if you're proud of your own efforts there. I'd compare it less to a house of cards -- though many restaurants, if undercapitalized from the beginning are indeed that -- than to a progressive, lingering, painful, and disfiguring disease with occasional welcome, but ultimately meaningless, remissions. One's pride, love, hope, and self-image leach slowly into the bedpan along with the owner's money.
Inc.: Have you ever tried to resuscitate a bankrupt restaurant?
Bourdain: I have tried many, many times to resuscitate a dying restaurant. I've never succeeded, though I might have prolonged some death throes. I'd never do it again.
Inc.: What would you say to a true pro who thinks he can turn around a failed restaurant without changing the name?
Bourdain: I'd say good luck. I'm sure it can be done. It has been done. But the odds against it are enormous -- and it goes against all conventional wisdom to associate any bold new venture with a failed one. Most places try very hard to separate themselves in every way from any memory of the bad old days. The public is very unforgiving about certain cursed restaurant locations, some of which -- even though they are fabulous -- remain doomed for all who follow. The public hates the smell of failure. And the scent seems to linger from incarnation to incarnation. Can a seasoned pro pull it off? Like I said, good luck.
Inc.: Restaurants always die. What's the secret to longevity?
Bourdain: The secret to longevity is to decide early on what one does well and then do it relentlessly, fanatically well, never wavering, never letting things slide, never allowing oneself to lose sight of one's original standards and intentions, and not falling victim to trends or unreasonable fears. Keep the owner or chef -- whoever's got the marquee value -- on site always, or near to it. If the original famous chef leaves, immediately buy an even more famous one with his or her own style consistent with but different from the original. Lose David Wells? Buy Roger Clemens!
Inc.: What would you say to a restaurateur who describes his cuisine as California Italian designed by a Maui chef?
Bourdain: Cali-Italo-Luau? It sounds insane. It sounds loathsome. But then I am as knowledgeable of SoCal customs as I am of Dayak tribesmen, the Illuminati, or snake-handling cults. I'm still befuddled and appalled by Wolfgang Puck's pizzas -- so what do I know? Just keep that avocado away from my pasta, capisce?
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