At about the same time bison prices were dropping precipitously, Turner began to intuit that, "I was being squeezed out of my job at Time Warner." Heartbroken by what he perceived to be happening to him at Time Warner, Turner took off out west to try to find serenity amid the turmoil. It was May 2001, recalls McKerrow, "and we were at Ted's Big Sur ranch in California's north coast country for [Ted's daughter] Laura and Rutherford's 10th wedding anniversary." Rutherford, McKerrow says, had been urging him to approach Turner about starting a chain of restaurants. "I already had a concept in my pocket," McKerrow recalls, "which was an upscale chain offering classic American burgers made with fresh ingredients."
With Seydel's backing, McKerrow now "custom-fitted" his concept to appeal to Turner. "I knew Ted wouldn't go in without the bison angle," says McKerrow. And while he believed that his concept would work "with the bison or without," McKerrow feared that "maybe, at most 20% of our customers would choose bison burgers. Maybe." During his LongHorn days, McKerrow had tested bison in his restaurants, "but the execs I put in place overrode me and thought it was folly. They thought I was nuts."
Ted Turner thought otherwise. Within 10 minutes, the two friends had begun to map out plans for a restaurant chain that they "could be extra super proud of," in the words of Turner. "I said, 'This has gotta work. This is gonna work. I've got wives to take care of, kids to take care of, and I don't have time to monkey around. Hell, I've gotta save the world!"
Back on planet earth, McKerrow explains that he wanted to call the chain "Ted's Grills," but, needless to say, "there are dozens of Ted's Grills. And, you know, there are litigious folks in this world. Some would surely have sued."
Thus was born Ted's Montana Grills. Naturally, they needed a logo. "The marketing guy is showing all these logos to Ted," says McKerrow. "And Ted says, 'No, no, no.' And then, he picks up a pen, and he draws it himself!"
As McKerrow talks, Turner whips out a pen, takes up a cocktail napkin, and draws the logo again. "I know what my strengths are," he says. "I used to be a graphic designer as a kid." He laughs in delight at his handicraft.
"He's always right," says McKerrow, as Turner stands up, towering over the smaller man.
"What we've got," says Turner, "is synergy. We're two old guys who think alike--and trust one another. And," he says, pausing, "just enjoy the hell out of each other's company. George, are we crazy or what?"
"Well, we are a little crazy, Ted."
"Crazy like a fox, smarter than a tree full of owls," Turner hollers, as he pulls McKerrow up onto his feet and slaps him with a high-five.
Within six months of that first discussion back in May 2001, "the boys," as Mary Puissegur calls them, had hired their top management team and opened their first restaurant.
Turner and McKerrow--Turner is chairman, McKerrow the CEO--agreed early on that what they wanted to run was a chain with a difference. The restaurants would be upscale (for a chain), with an average individual tab of $15. To justify that, the space had to be special too: "We spent $200 a square foot," says McKerrow. "The average chain spends $100."
In their quest to re-create the Old West flavor that Turner insisted on, "the boys" made pilgrimages to famous western dining spots--"every one of them at least a hundred years old," says Turner. As a result, Ted's Montana Grills all feature old-fashioned shiny mahogany bars, reproductions of western art by Bierstadt and Moran (much of it based on paintings in Turner's own collection), black-and-white photographs of the West (some by Rhett Turner, Ted's second son), and, adds Turner with glee, "the fanciest-ass restrooms you've ever seen." They are, too: fancy and spotless.
The first Ted's went up in Columbus, Ohio. "I wanted a midwestern market to test this thing," says McKerrow. "Classic middle-class America. Good jobs, good students." It also helped that a broker had the real estate ready and available. "We would have preferred launching in Atlanta," adds McKerrow, "but we were ready to go in Columbus." After that came restaurants in Georgia--there are now nine in Atlanta alone--along with locations in Denver and Nashville. The busiest has been one of the three Denver restaurants--in the very heart of bison country--which did $2.5 million in business last year. (The target is $2 million per location; the average McDonald's, by contrast, does $1.6 million annually.)
McKerrow's plan called for opening six restaurants the first year, 12 the next, and 20 in the third. Today, there are 15 and counting, says McKerrow, who is negotiating a lease in Manhattan at 57th and Avenue of the Americas (a short walk from the Time Warner headquarters) and is also shopping for a second Manhattan lease in the Times Square area. The demographics the partners seek: customers aged 24 to 65, families, upper middle class.
Problems?
"Sure," says McKerrow. "A couple of restaurants have underperformed"--he won't say which--"and a couple were too small." McKerrow also worries about "human acquisitions. We need disciplined people who can get on board quickly."
Then there's the competition: "We're breaking into a highly competitive industry against well-entrenched multi-unit operators who know how to market efficiently and have found the use of TV to their advantage." Of the competition, McKerrow counts Outback Steakhouse as being the best: "They've gone the longest, gone the fastest." But he's not scared of Outback, says McKerrow, "and they're not scared of us either. But they are aware of us. They know I'm a veteran. I've been in these wars before." They also know that McKerrow has a not-so-secret weapon. "Believe me," he says, "everyone's heard of Ted Turner." Turner, he adds, "is a celebrity, but he's also a businessman, a very shrewd"--and very wealthy--"businessman."
