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Matchbox Food Group

There are six Matchboxes planned to open in the next 18 months.

The Sum of All Parts

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Whether built in a basement or a boardroom, restaurant groups around the country are growing and evolving—relying on the strategies, vision, and passion that helped them survive and thrive in the first place.

By Danny Klein October 2015 Executive Insights

It’s a thought that draws a swift and effortless laugh from Ty Neal, the co-founder and owner of Matchbox Food Group.

On the verge of the largest, most ambitious and, yes, daunting, expansion in the Washington, D.C.–based chain’s 12-year history, Neal rewinds back to the moment this dream all started.

For the majority of aspiring restaurateurs, securing that first lease in a hip, foot-traffic friendly, vision-reflective space is one of the toughest early challenges.

Neal, his brother Mark, and partner Drew Kim, had some additional issues with the weathered former grocery store on H Street in Chinatown, built in the 1920s. “There was a tree growing in there,” Neal quips. “We loved it. It was the start of a great story.”

Fast-forward and Matchbox is preparing to take its budding brand national, a crazy idea, Neal says, for a group that literally built its first concept by hand.

The tables were assembled in Mark’s basement on a rigged-up wood shop. For 15 hours a day, for 10 months, they worked to resurrect the narrow, brick structure with a caved-in roof. It cost around $500,000—about a third of what it would have sans the do-it-yourself approach.

Mark, who once worked at Domino’s, made the pizza at Matchbox’s first location, Kim bartended, and Ty—a fry cook at 15—ran the front of the house. “There’s a lot of blood, sweat, and tears on the first project,” Neal recalls.

These days, Matchbox has six locations of its original concept—best known for its wood-fired pizzas, mini-burgers, and craft beer. There are also five Ted’s Bulletin Family Restaurants and one DC-3 hot dog brand.

What’s next is even more far-flung from those grind-it-out days more than a decade ago. With the addition of Peter D’Amelio, the former president and chief operating officer of The Cheesecake Factory, Neal and his partners are poised for a national takeover. The company, which Neal says hovered around $60 million in revenue last year, has six Matchboxes planned to open in the next 18 months and expects to continue that growth level for the foreseeable future.

“We’re lifers,” he says. “It’s exciting. We’re still pretty motivated about the food. We spend a lot of time in the test kitchen. So yeah, we’re still talking about the food all the time. At the end of the day, we know what matters.”

Big Dreams, Small Beginnings

Across the country, restaurant groups—like Matchbox and its start-from-scratch approach—are responsible for some of the top independent and chain options on the market.

Sometimes transparent—sometimes hidden—the strategy and background of these groups, how they grow and how they began, continue to shape the industry in a post-recession landscape.

And it’s a very, very broad spectrum.

Seth Woods, the founder of The Aquitaine Group in Boston, highlights the point. “I was the CEO, chef, and (general manager) of both restaurants I ran,” he says. “Listen, that’s a common story.”

Woods was in his late 20s, working 100-hour weeks, and starting to build what is now a six-concept, nine-unit company making $25 million and prepping to “bring 10 new restaurants” to another city.

The fact Woods considers this standard business protocol is a reflection of what it takes to make it in the grueling industry, big or small. Chef/owner Woods adds that work absorbed “a decade of my life” before his company, which includes Aquitaine Bar à Vin Bistrot, Cinquecento, Gaslight Brasserie, Café Greenlight, Metropolis, and the recent La Motta’s Italian Specialties, gained its footing.

“In the beginning I didn’t have a [general manager]. I was chief bottle washer and parsley chopper. I did everything, 24-7,” Woods recalls. “I didn’t care how many hours or what it took to achieve excellence.” Woods wanted, as some restaurateurs do, to forge a company in his own vision. Achieving that kind of independence, though, comes with a price. He recalls opening his first restaurant, the 39-seat Metropolis Café on Tremont Street in 1995, when he was 27, and doing it without any investors.

“I cobbled together some credit card, some bank, and some family loans. The project cost me around $150,000 all-in. I negotiated with the landlord to take some back paper. It was terrifying,” Woods says.

As soon as Woods was nominated for a James Beard Rising Star Chef award, and Ruth Reichl of the New York Times took notice, business boomed and Woods was doing 120 to 130 covers a night on the weekends.

He opened Aquitaine Bar à Vin Bistrot three years later, and the progression has been steady ever since.

“It’s the biggest jump in the restaurant business,” he says. “Going from one to two is very difficult.” However, going from two to three, and then three to four, and so on, is a different story.

“It’s hard to stop once you get started,” he says.

Opportunity Knocks

“They always say necessity is the mother of invention,” comments Chris Bisaillon, co-owner of the Chicago-based Bottleneck Management.

Bisaillon isn’t talking about Bottleneck’s humble beginnings—two fraternity brothers, Jason Akemann and Nathan Hilding, opened a bar in Wrigleyville called Trace—but rather the moment true expansion became a viable option. This light-bulb turning point is another oft-mentioned theme of restaurant groups.

In Bottleneck’s case, you can blame the trash collector.

Following the opening of The Boundary in 2007, Sweetwater Tavern and Grille in 2009, and South Branch in 2011, Bisaillon set his sights on an Old Town location. Due to a construction plan and some parking concerns, the group realized the majority of the restaurant’s trash was going to be dragged through the front door.

“For a restaurant bar such as ours, that’s obviously a big issue,” Bisaillon says. “And one of the biggest generators of waste is bottles or cans.”

Solution? Don’t have any bottles or cans. “It was a big departure,” Bisaillon says of the 120 tap handles of draft beer that define Old Town Pour House. “It hadn’t been done in the city in any meaningful way. And when we launched in 2012, we just hit it out of the ballpark.”

Creating a unique concept that resonates and can be easily identified changes everything, Bisaillon adds.

There are currently three Old Town Pour Houses—Oak Brook, Illinois, and Gaithersburg, Maryland, are the other locations. Bisaillon says four more are planned in the next 18 months and that Bottleneck, which records over $40 million a year, isn’t going to stop there.

“In my mind, it’s very clear,” he says. “I believe that our goal in the next eight years is to be at 30 restaurants and we want to be over that $150 million mark in revenue. And I think in the next eight years we will achieve that.”

Cameron Mitchell Restaurants is also a burgeoning company taking its most identifiable concept—Ocean Prime—to national audiences.

Count circumstance as the culprit yet again.

In early 2008, the Columbus, Ohio–based company, which began in 1993 with Cameron’s American Bistro, sold its two most popular concepts—Mitchell’s/Columbus Fish Market and Mitchell’s/Cameron’s Steakhouse—to Ruth’s Hospitality Group, the team behind Ruth’s Chris Steak House, for $92 million. David Miller, the executive vice president, says that focused the team’s efforts on growing Ocean Prime, even in a tough market.

“We were building $100-check-average, $90-check-average white-table cloth restaurants in the greatest recession that has hit our country since the Great Depression,” Miller recalls. “That was very challenging. It went the range of emotions from euphoria, to buckle down the hatches and let’s get through this, which we did.”

They had to drop the original name, Mitchell’s Ocean Club, and begin to change the approach as well.

The concept combined a steak house and high-end seafood restaurant, which became an instant hit, Miller says.

The restaurant morphed from a $4.5 million, seven-day-a-week lunch and dinner operation, to a $7.5 million dinner-only juggernaut. There are 13 locations ranging from Beverly Hills, California, to New York City, and more are in the works. The midtown Manhattan location, expected to open in October, is proof of a working plan, one that includes more than 2,500 employees.

The $180 million group, which has its own construction company and also operates the 17-location Rusty Bucket Restaurant & Tavern brand, currently operates 24 units across 12 concepts.

“If you study it, the great restaurants—whether they’re national brands or whether they’re local brands and chef-driven—do very well [in New York City]. It doesn’t matter where you’re from,” says Miller, who notes that Mitchell always opens concepts first in his home state of Ohio. “That’s the thing we love about New York. We understand the ball is in our court, right? We have to do great.”

Team Players

Peter Karpinski, the co-founder and COO of Denver’s Sage Restaurant Group, has heard it before.

“It’s a byproduct and a result of the hotel industry developing and running restaurants so poorly, for so long, that when consumers hear ‘hotel restaurants’ the first thing they think is ‘bad,’” he says.

Unlike the ground-up operations, Sage Restaurant Group didn’t begin completely on its own. Formed in 2005, it was created alongside Sage Hospitality, a 30-year-old company that manages more than 75 hotels.

Having that kind of support helped Karpinski clear some early hurdles, but that doesn’t mean it’s been easy. Or simple. “We basically said, ‘We want to create an independent restaurant company where we can go into markets and build restaurants for the people who live, work, and play in those cities,’” he says. “But at the same time, can handle all the food and beverage needs of the asset.”

Sage has 10 concepts across 11 units, all of which currently sit adjacent to a managed hotel. That means Karpinski has the challenge of creating restaurants with their own identities, in some interesting design locations, while also dealing with catering events and hotel guests.

“You really have to see what you can get out of the space, where if we don’t get a single customer from the hotel, we would still thrive and do well and be a very successful independent restaurant,” he says. Out of the gate, Sage opened nine restaurants in seven different states in a three-year span.

Ten years later, Karpinski says the $100-million operation has found a way to set itself apart. Sage Restaurant Group just opened its second Urban Farmer—in Cleveland [the first is in Portland, Oregon]—and plans to have multiple locations of four different concepts within 18 months, a strategy he hopes will double or triple revenue.

Concept partnership is a theme in LDV Hospitality’s portfolio as well. However, the group, which owns 24 food-and-beverage venues, has gone about it a little differently than most. Founder John Meadow credits his strategy to understanding limitations and talents.

“It’s fantastic because the reality is—restaurant or nightclub or coffee bar—it’s always going to be a team sport. I think a lot of people forget that, and you have a lot of big egos in this business,” he says. “You have a lot of big egos fueled by insecurities, which is a very dangerous dynamic.”

LDV, which began in 2008 with the opening of Scarpetta, an upscale Italian concept in New York’s Meatpacking District, partners with chefs and entrepreneurs to develop new brands. Meadow, who admits he isn’t a great cook, says this allows him to do what he does best, and the same goes for the player on the other side. “Everyone has a specific expertise,” says Meadow, who also once owned a clothing store. “And the idea of working with a team of people and giving them autonomy, empowering them to really express their artistry or expertise, whether it’s the celebrity chef partner or the sommelier, that’s what gives the restaurant an authenticity—and ultimately, that’s where we’ve had results.”

That includes American Cut, a steak house owned with Marc Forgione, a Food Network Iron Chef. Meadow is planning to bring the brand to San Juan, Puerto Rico, and intends to expand to Dubai. “It’s not greed that’s driving me,” says Meadow, who projects revenue of $90 million in 2015. “In this very challenging restaurant environment, I take great pride knowing that we’re building a great foundation for the future, and that pursuit is satisfying and rewarding at the same time. I feel like we’re just getting started.”

Sometimes it’s a Small World

High Street Hospitality has some of the best restaurants and chefs in Philadelphia. It also has only three concepts, including the highly acclaimed landmark Fork. There are some real benefits to this strategy, as Jon Nadler, the culinary director of the High Street on Market concepts and the group’s other brand, a.kitchen+bar, points out.

“Within our restaurant group, we have cooks who will work in one kitchen for a period of time and then move to a different kitchen,” he says. “Whether it’s to see a different experience or take on a different role.” Nadler, who was a semifinalist for the 2015 James Beard Rising Star Chef award, started in the group as a line cook under Chef Eli Kulp, Food & Wine’s Best New Chef 2014. Kulp is currently recovering from a severe spinal cord injury sustained in the Amtrak 188 train derailment on May 12. At the time, Kulp was working with partner Ellen Yin to open the group’s first concept out of state, High Street on Hudson in New York City.

The restaurant’s opening stayed on track, a fact that was helped by the close-knit nature of the operation. “Our whole team, at all the restaurants, have pulled together and are stepping up to ensure that the quality and precision is maintained,” Yin says. “Eli did an amazing job at setting up teams at each location.”

BlackHouse Hospitality Management, based in California, isn’t quite as small—five concepts and six units—and has plans to add two additional locations. But the group, created by Jed Sanford when he decided to turn his Union Cattle Co. into the hip, food-focused Abigaile in South Bay—complete with its own brewery—isn’t eager to expand past its expertise. That means continuing to build hubs in target areas and focusing on what matters to Sanford and Chef Tin Vuong. Their concepts include Wildcraft, Dia de Campo, Little Sister, and Steak & Whisky.

“Building a restaurant is a little like playing a song,” Sanford says. “It’s a little addicting. And we like to try different things. That’s why we keep doing new concepts and experimenting. And the fact we have a culinary team that can back it up is what’s great.”

Sanford and Vuong believe there’s enough interesting real estate in California to satisfy their creative and business goals. Take Abigaile for example.

The 1924 abandoned Baptist church in Hermosa Beach was once host to some of the area’s most iconic punk bands. When Sanford was converting the space from his neighborhood bar—the mechanical bull was sold—he had the space painted black, and then handed out some cans of spray paint and let the graffiti-based design happen organically.

It’s like any business. You’ve just got to stay humble, stay on top of it, and don’t lose sight of the customer,” Sanford says. “I think if you do those things you’ll be all right.”