Branding Leads to Profitability, Says Industry Experts
November 2004

The 12 th annual Restaurant Trends Seminar held at The Hotel Commonwealth in Boston, Mass., focused on why branding is important, the importance of a business plan and the art of hospitality.

Branding is important because it creates loyal customers and employees and increases the value of the restaurant. “Branding leads to profitability,” said Jeffrey Davis, chairman and founder of Mage, LLC. To build a brand, “you must understand the needs of the customer and focus on offering superior service,” he said.

Branding “is all about personality. You put people and concept first,” said Mr. Davis. Do it right and the money will follow.” A good brand is like a magnet, he said. “When it’s good, more people will move towards it.”

All marketing efforts must touch both the employees and the customers. Make sure the message is simple. The Avis “We Try Harder” campaign is simple, and it doubled the productivity of its employees, said Mr. Davis.

Charlie Perkins, owner of The Boston Restaurant Group, stressed the importance of a business plan. More than 70 percent of restaurants don’t use an accountant or an attorney, he said. “They don’t cost out the menu. They have no idea what the bottom line should be.” In addition, many restaurants are underinsured in case of fire.

McCormick & Schmick’s recently went public. “Call up your stockbroker and get a copy of the prospectus. It’s the best business plan you can buy,” said Mr. Perkins.

Sandwiches, including hamburgers, represent 40% of the market share. High-end steakhouses are an $11 billion industry. “They’re familiar to everybody, driven by tourists and business travelers,” said Perkins.

Rents are increasing throughout the state, but landlords are not the enemy. “Get landlords involved,” advised Mr. Perkins. “Give them your business plan.”

A successful restaurant combines a great location, the right concept and sales ratio. In Boston, a successful restaurant has a “celebrity chef and a killer concept.” Waltham, Mass., remains a good location for a restaurant, because it is still a low rent area and it is close to wealthy towns such as Weston and Lincoln.

Christopher Myers and Esti Parsons, partners at Radius, Via Matta and Great Bay, spoke about the art of hospitality. He defined it as “a pleasant or sustaining environment brought about by generosity, openness and preparedness, intending to bring delight into someone’s day.”

A big part of hospitality is treating employees well, said Mr. Myers. “Adore your staff from the moment they apply for the job,” he said.

“We are in the business of being hospitable, not appearing hospitable; we must live by it. It begins when we wake up and is sustained throughout the day. It is a way of life, a credo,” said Mr. Myers.

George Naddaff, chairman of Mage Capital Partners, spoke about his rise from a door-to-door salesman to the franchiser of Boston Chicken, Mulberry Child Care. He is now planning to turn the Know Fat Lifestyle Grille into a national franchise.

The Restaurant Trends Seminar was sponsored by The Boston Restaurant Group, Cafco Construction Management Inc., and Ruberto, Israel & Weiner, P.C. It was held on September 22.