Mark Oswald wasn’t sure who would be on the other end of the phone when he answered. “Hello?”
A low, gravelly voice rasped, “Mark! Something’s wrong with your numbers.”
It was the fall of 1991, and Mark was sitting in the Buckhead, Atlanta, location of Ruth’s Chris Steak House. Mark and his wife Nancy had joined brothers Jim and Phil Brooks the year prior to become equal partners in Sizzling Steak Concepts, a Ruth’s Chris franchisor. The Brooks brothers had opened the Buckhead location in 1986, their first, and the Oswalds had a burning desire to beef up expansion. “We weren’t interested in a onesie,” Mark says. “We were interested in growing the brand.”
But back in ’91, long before the Oswalds had 10 units in their portfolio and two more on the way as they do today, Mark was on the phone with founder Ruth Fertel, who was accusing him of submitting faulty sales numbers.
“I really didn’t think anything was wrong with my numbers; I was a young, cocky guy,” Mark recalls. “But I went back and I looked and sure enough, that old yellow legal pad had proved me wrong! I had either over- or under-reported the number of covers by a significant amount—”
“But his check average wasn’t right!” Nancy chimes in, laughing.
“My check average wasn’t right,” Mark agrees gravely. “Ruth used to do that manually! She put the sales, the number of covers, she’d do it all in her head.”
“She probably would still do it by hand,” Nancy says.
“And I think about that all the time,” Mark adds. “There she is. She is so involved in not only the restaurants she owns, but the ones she doesn’t, the ones that are franchised. She was engaged [enough] to call and talk to you and let you know, hey, you need to look at this, it needs to be fixed.”
Mark fixed his numbers, of course. And the Oswalds remained good friends with Fertel, a longtime smoker who died in 2002, two years after a lung cancer diagnosis. She’d founded the brand in 1965, after mortgaging her home for $22,000 to buy the Chris Steak House near the New Orleans Fair Grounds racetrack. When a fire destroyed the restaurant, she relocated it—adjusting the title to Ruth’s Chris Steak House, as she legally had to give up the name to change locations—and began franchising in 1976.
But, this isn’t a story about Ruth Fertel. This is a story about a franchisee who has carried on her traditions by staying true to a half-century-old brand in an era when the restaurant industry lives on bandwagons, from limited-time price cuts to Asian-inspired tastes. That’s not to say Ruth’s Chris or Nancy and Mark Oswald have neglected to stay relevant to the times; rather, the longest-tenured Ruth’s Chris franchisee is a decisive case study in how to acclimate a storied brand to modern day needs without sacrificing sales, integrity, or acclaim.
“One of the main reasons Ruth’s Chris has continued to thrive over the years is because Ruth didn’t change much; we are still serving many of the same items she served 50 years ago, or started out with 50 years ago,” Mark says. “Where so many other groups of restaurants change and have a challenge and play with their menu—we don’t. What’s been great over the years is, it’s just gotten better.”
For both Mark and Nancy, long before Ruth’s Chris became their careers, the original steakhouse in New Orleans was meaningful. Mark dined there throughout college with friends, as they celebrated graduations, promotions, and special occasions. His buddies took him to lunch there right before his wedding. For Nancy, the brand had an unrivaled hometown appeal. “I grew up dining at the flagship Ruth’s Chris in New Orleans, when Ruth was actually there personally. And I really enjoyed and admired the brand.”
Mark and Nancy are entrepreneurial by nature. After they joined the Brookses at Sizzling Steak in 1990, they began scouting the location for a new Ruth’s Chris in the South. They targeted Birmingham, but the Alabama market wasn’t easy to lock down.
“I spent literally a couple years around town looking for a site,” Mark says. “We located a failing restaurant in a hotel that was called the Crown Plaza Hotel, a beautiful hotel located in the right part of town. I remember when we took it to Ruth. She wasn’t crazy about Birmingham. She said” — Mark’s voice descends to a deep, pointed tone —“‘I don’t know if it’s strong enough for Ruth’s Chris because it doesn’t have an NFL team!’”
“She said she didn’t have enough money to do fancy marketing, but if it was good enough for the NFL, it was good enough for her,” Nancy laughs.
Even without a national football team in Alabama, the Oswalds scored. Birmingham’s steakhouse, which opened in 1993, was so successful, Fertel later said she wished she’d saved it for herself; she didn’t realize the sports-loving Alabamans had been road-tripping to New Orleans for years to watch their beloved college football teams compete in the Sugar Bowl, and they stopped in at Ruth’s Chris on the way. The hotel niche further complemented Ruth’s Chris, because, in a smaller market, the steakhouse was pulling in hotel business. Even now in most of the Oswalds’ locations, it’s the business travelers who dine in on Monday through Thursday, while local diners patronize on the weekend.
When the Oswalds partner with hotels, they manage both the restaurant foodservice and the hotel foodservice; for that reason, the couple are now sought out by hotel companies across the Southeast. Eight of their 10 restaurants are in hotels. In total, the company encompasses four locations in Georgia, three in South Carolina, two in Alabama, and one in Tennessee.
“Keeping up the growth really rewards our people, affords them new opportunities, and allows them to grow,” Nancy says. “We have very tenured and loyal team members who are as dedicated to the Ruth’s Chris brand as we are, and they want to grow, too. It’s important for us to grow, so they can grow. And watching people within our franchise develop and mature and accept new challenges is really exciting, on a creative and emotional level.”
While both agree the brand is “unbelievably resilient,” as Mark puts it, they’ve certainly experienced the economic downturns. Partnering with hotels helps them weather the storms better than others. “When the downturns come, business travelers have to work harder,” Mark explains. “So, they’re still out, entertaining clients, entertaining guests, and what better thing to do to show that your client’s important than bring her to the best restaurant in town? Again, the brand helped us through each one of these downturns.”
During economic hardships, Mark and Nancy emphasize value, coming up with promotions that show guests the brand is sensitive to the times and appreciates their ongoing patronage. Thus, innovation doesn’t come necessarily from industry trends, but rather is an extension of the Oswalds’ hospitality aspirations. For example, in the past, they have introduced Ruth’s Hour, their take on half-price happy hour promotions; Sunday Steak and Frites night for a greatly reduced-price dinner; and a classic prix-fixe dinner.
Even when the economy shrinks, Ruth’s Chris might not be what guests cut out. While the fine-dining segment lagged from 2008 to 2010, it also rebounded quicker than others post-recession, posting a 5 percent gain in visits in 2013. “America has a continued love affair with beef,” Nancy says. “We may chicken ourselves to death at home, but when we dine out, we want to splurge. And with that kind of pleasure event, when you treat yourself to steak, you want the best steak. Only 2 percent of beef available in the nation is Grade A Prime. Most of that prime goes to upscale steakhouses (including Ruth’s Chris), so you really can’t get that in a grocery store.”
The upcoming Ruth’s Chris in Charleston, South Carolina, will be in the French Quarter Inn, followed by a second Greenville, South Carolina, location in an Embassy Suites downtown. While the menus are basically identical at each of the Ruth’s Chris locations, the buildings are dramatically different in décor, guided very much by the space and the locality. In October, for example, the Oswalds will relocate their Sandy Springs, Georgia, restaurant to nearby Alpharetta. The 18,248-square-foot restaurant is designed like a traditional vineyard estate, reflecting Georgia’s recent explosion in vineyard development; more than a dozen wineries have opened in North Georgia since 2002.
“The constants with the Ruth’s Chris brand,” Mark explains, “are the food, the service, and the New Orleans-style hospitality. That’s in any Ruth’s Chris around the country and around the world. So, in order to complement that, each one of the designs of our restaurants is unique. You could walk into a Ruth’s Chris and if it wasn’t for the signage and the menu, you wouldn’t even know it’s a Ruth’s Chris. Unlike many other groups of restaurants, where the design is the thing that holds them together, for us, the designs are all very different and comfortable. And that’s the idea, that you’re going to be comfortable but you’re also going to know that your needs are going to be taken care of.”
At Sizzling Steak Concepts, Jim Brooks is no longer involved in day-to-day operations, but Phil Brooks continues to oversee Sizzling Steak’s accounting office in New Orleans. However, all four partners continue to have board involvement and offer overall franchise guidance.
Day to day, Mark is typically communicating with the various management teams, making sure stores hit their targets, and dealing with the intricacies of human resources, but he also devotes a fair amount of time to future development. He says it can take three to five years from when the couple first talk to a property owner to ultimately finalize a deal, and then a couple more years before the location even opens. “It’s amazing how long the lead time can be,” he says. “And this is probably because these are hotel properties, and hotel properties tend to take a while to design, to get approved, and then—certainly these days—to fund.”
Nancy puts her communications degree from the University of Virginia to good use, overseeing marketing and advertising for the franchised units. The husband-and-wife team clearly work shoulder to shoulder with their general managers, chefs, beverage managers, and employees at all levels in their 800-person organization. “There’s not a day that goes by that I’m not in constant contact,” Nancy says. “Yesterday, I was at a host recertification meeting at one of our restaurants. It’s very important to continually be talking to people about our hospitality, on every level, and we really spend a lot of time just talking to our key people.”
The similarities between Fertel and the Oswalds are striking. “Ruth was a very inclusive person, very accessible, connected with people, and she was real and unpretentious,” Nancy says. “It was critical to her that in any organization, but in Ruth’s Chris especially, that team members and customers were treated with honesty and integrity. And the golden rule—her dining principle—was: If you treat others the way you want to be treated, it all works out.”
The Oswalds have struck up a benevolent partnership with Ruth’s Chris corporate. They report sales and pay the franchise fee, just like any other franchisee, and the corporate executives support the Oswalds wholly, visiting potential sites and giving feedback, for example.
Mike O’Donnell, president and CEO of Ruth’s Hospitality Group, says the Oswalds have done a remarkable job upholding Fertel’s core values. “Mark and Nancy are model franchise partners, and have played an important role in elevating the Ruth’s Chris brand,” he says, adding that he admires their determination and hard work.
The Oswalds were the first franchisee to open a certified learning center so they can train employees without sending them to one of the corporate training centers, of which there are approximately 20 around the U.S. The Oswalds operate their training center out of the Kennesaw Ruth’s Chris location in the Atlanta suburbs, and training is based on the corporate program, though Nancy and Mark have adapted it to meet the hotel foodservice needs, as well, since Ruth’s Chris is traditionally a dinner-only concept.
Nancy says being an independent as well as a piece of the corporate entity creates an attractive mix; as part of the corporate concept, she says it’s helpful to follow the systems, such as daily line checks and bar checks, that ensure consistency across all 140 units; on the other hand, the Oswalds have the liberty to take advantage of both the central buying program that corporate puts together, as well as the one that franchisees assemble.
“If corporate puts a particular program together and for some reason it’s not as beneficial to us as a franchise, we don’t have to participate. It’s voluntary,” Mark explains. “That gives you so much more flexibility, and it’s really the way a franchise should work: You get the benefits of the big entity, and then you also have the ability to strike your own deals.”
Much of Fertel’s success came from resisting fads and trends, but the Oswalds have naturally innovated to stay relevant and meet customers’ expectations. As Nancy says, “we’re not living in a vacuum.”
Like some other Ruth’s Chris franchisees, they offer the wine list on an iPad, using a program called Tastevin. “It has really improved our beverage program,” says Nancy, adding that it empowers the guests and aids in custom pairings. It also provides a real-time look into the inventory by linking with the POS system, so guests don’t order a wine that is out of stock.
“We’re doing things to embrace the new tech-savvy generation of diners,” Nancy says. “We haven’t changed the concept. We’ve been true to the menu, true to the brand, true to our New Orleans origins, but we are innovating in places that make sense.”
As the largest, most-tenured franchisee, the Oswalds have become recognizable faces of the Ruth’s Chris brand. Asked why it is an important achievement, Nancy says, “It’s really more of a responsibility than an achievement. We had the good fortune to know Ruth. It’s important to uphold Ruth’s legacy of hospitality and keep her story—and spirit—alive for a new generation of Ruth’s Chris guests and team members.”