But since then, Submarine has had an additional partner in its new concepts. The Hoxton, a boutique hotel group, approached Dirks and McFadden when opening its second U.S. hotel and requested three concepts. Submarine operates the hotel restaurant, La Neta, a rooftop bar, Tope, and an alley cocktail bar known only by its location, 2 NW 5th.
Each concept has been a lesson and an opportunity and, looking to the future, Dirks and McFadden see more growth coming in spades thanks in most part to their leverage as a group.
Power In Numbers
“There’s safety in numbers, there’s some economies of scale when you have one office that’s managing the finance for two restaurants, and then you add a third—you’re not actually tripling the work, you’re using a lot of the same vendors and a lot of the same processes,” Dirks says.
This builds a powerful platform. In creating the menus within their Hoxton concepts, Submarine tapped Johnny Leach, a chef native to Portland who had spent time in New York City working under the famed Korean-American chef David Chang. Dirks says that Submarine provides the ability to elevate chefs whose work might not otherwise survive the way the market treats independent restaurants.
“Your average industry professional who is working at a restaurant, whether they’re a really talented bartender or a really talented server or sommelier, they don’t have access to the infrastructure that they would need to open a restaurant,” Dirks says. “Obviously the path forward there would be to just bootstrap it and slowly build your own concept and slowly raise money and figure out how to do the finances and HR and payroll. But I think a lot of restaurants fail because there’s no clear correlation between being a great restaurant industry professional and being a great backend business person.”
Folks in other restaurant groups put this theory into practice, too. At Sage Restaurant Group in Denver that power means efficiencies in the home office, purchasing power, and a seamless strategy throughout the system.
Serving the Guest
“We’re what I like to call a ragtag group of really competent professionals,” says Brent Berkowitz, chief operating officer at Sage. The group consists of six concepts, a few of which have started to scale. Urban Farmer, for example, has locations in Cleveland, Denver, Philadelphia, and Portland. But each location still makes a commitment to the local community, which guests demand, Berkowitz says.
“If you’re in an Urban Farmer, you know you’re in an Urban Farmer,” Berkowitz says of the brand’s continuity. “There is a bloodline that runs throughout all of them. We make it a very specific priority to be a part of the community.”
That includes locally sourced food and wine on the menu. Cleveland guests want perogis. Denver guests want chili. While there are four Urban Farmer locations, only about 40 percent of the menu is replicated.
Similarly, employees at Urban Farmer feel like they are part of Urban Farmer, not Sage Restaurant Group. The individuality of the restaurants remain, but the restaurant group is the background for support.
“If you work at Departure Portland, you work for Departure Portland, you don’t work for Sage Restaurant Group,” Berkowitz says. “We’re able to use what’s good out of both sides—as far as being a group, we have purchasing power. There are efficiencies at the home office—finance, marketing, HR. That’s where the group part really comes in and the ability to mesh everything together, but not for our guests, for our internal guests, which is our staff.”
Staying With Hotels
Sage serves one additional type of guest—the hotel guest. Like Submarine, Sage has a hotel restaurant management arm, which Berkowitz says gives the group even more leveraging power.
“Because of our hotel purchasing, we have purchasing power through a vendor program and access to pricing at a much larger scale while still staying small,” he says. “From a business-to-business perspective, we’re a big company and there’s safety and confidence and trust that goes along with being a big company for 30 years. From a business-to-business perspective, there is this idea that we just really have strong ethos about operations and how we treat our guests and our teams.”
Having made big moves in hotel restaurant management and scalable concepts, Berkowitz says Sage is looking toward true indies as a big area for growth. The hotel partnerships has allowed Sage to take creative leaps, Berkowitz says. Now he’s imagining what those creative leaps can look like without the time that is tied up with in-room dining and other ancillary duties that come along with hotel hospitality.
“We’re very successful and bottom-lined focused so we’re ready to maybe try something on our own,” he says. “We think it would help our rate of growth.”
The Jump into Diversification
For some restaurateurs, though, one independent concept in this market doesn’t seem like a safe bet, or even an interesting one. While scalable fast-casual units seem to have been all the rage in recent years, Kyle Noonan has thus far only been interested in scalable full-service concepts.