Oftentimes the conversation around business models for full-service restaurants falls into one of two camps: multiunit chains or standalone independents. But in between lies a hybrid category that combines the best of both worlds. At their core, restaurant groups marry innovation and growth in a way that fosters creativity and opens the door to expansion.
For some companies, portfolios comprise only single-unit restaurants; for others, certain concepts expand to multiple locations while their sister restaurants remain solo. Similarly, the origin stories behind such groups vary widely with some founders planning for multiple concepts from the outset and others organically opening more following the success of their first.
But for all their differences, restaurant groups are united by their intrinsic system of checks and balances. Ever-inventive entrepreneurs, chefs, and creative teams have the opportunity to dream up new restaurants. At the same time, business demands and growth plans help rein in projects to a sustainable level.
The following seven groups, ranging in geography and age, illustrate how when it comes to this nuanced structure, there’s no one way to do it.
HQ: Birmingham, Alabama
Rodney Scott’s Whole Hog BBQ, Little Donkey Mexican Restaurant, Hero Doughnuts & Buns, Hot Dog Pete’s
Although Nick Pihakis didn’t establish his eponymous business until 2018, he was drawing on four decades of industry experience—most of which he spent as a restaurant founder/owner. In 1985, he established Jim ‘N Nick’s Bar-B-Q chain in Birmingham, Alabama. Specializing in slow-cooked meats, the full-service brand has since expanded to more than 40 units across seven states. Years later Pihakis also cofounded Fresh Hospitality—a business incubator and mentorship program for new fast casuals.
Pihakis has since stepped away from both businesses; Roark Capital Group purchased Jim ‘N Nick’s in 2017, and Fresh Hospitality cofounder Michael Bodnar now leads the incubator. The change allowed Pihakis, ever the entrepreneur, to establish a new restaurant group, one that prioritized creating new concepts over acquiring existing ones.
“We want to do masterpieces. We want to do things that are going to stay around—not a one-hit wonder,” he says. “It’s a lot of fun to get around the table and talk about new ideas.”
Since it was established in 2018, Pihakis Restaurant Group has grown to include Little Donkey Mexican Restaurant, Hero Doughnuts & Buns, Hot Dog Pete’s, and Rodney Scott’s Whole Hog BBQ, which is co-owned by James Beard Award–winning chef Rodney Scott.
Despite of COVID-19, Pihakis Restaurant Group has nine new locations in the pipeline for 2021, including two brand-new concepts. Tasty Town blends Mediterranean fare with Birmingham’s beloved “meat and three” cuisine, wherein guests customize their plates with one meat and three sides. Under chef Rita Bernhardt, who honed her craft at BRG Hospitality in New Orleans, Luca will serve elevated Italian fare.
The structure of Pihakis Restaurant Group is partially inspired by the heralded incubator La Cocina in San Francisco. Pihakis spent time at the nonprofit and collaborated with its executive director, Caleb Zigas, to develop Little Donkey. The experience further drove home the importance of having on-the-ground, passionate partners at each concept within the larger group.
“I’m not a big believer in centralized management per se. I like to have what we call local owners that actually run the business. And they are partners, and they get real equity in the business,” Pihakis says.
Although the portfolio includes limited-service concepts, Pihakis has no intention of abandoning full service as a viable business model, despite the coronavirus’s chilling effect on the sector.
“I can’t wait to never go through a drive thru again,” he says. “I can’t wait to go to a full-service restaurant and sit down and be pampered.”
HQ: Prescott, Arizona
The Barley Hound, Rosa’s Pizzeria, Taco Don’s, Hawk & Hound, County Seat, La Planchada
In Prescott, Arizona, Vivili Hospitality Group is veering away from full service. Instead, founder and proprietor Skyler Reeves envisions the future portfolio to be mostly made up of elevated fast casuals. Growth on the sit-down side would come in the form of additional locations for existing concepts.
Named for Reeves’s children, Vivian and Liam, Vivili includes The Barley Hound, Rosa’s Pizzeria, Taco Don’s, and a catering/events arm called Hawk & Hound. The first two are full service, while Taco Don’s is centered around a drive-thru format.
In March, construction halted on a new concept, County Seat, which Reeves describes as his most ambitious project to date. Despite the inherent difficulties of 2020, County Seat finally made its grand debut in November. Located on the second floor of an historical, downtown building, the restaurant offers views of the courthouse square below, as well as a new dining experience inside.
“I don’t like the word ‘fast casual’ for it, but it’s definitely counter-service-heavy with a small retail component and coffee. So it’s going to be totally different from my other concepts,” Reeves says. Another forthcoming restaurant, La Planchada, specializing in tequila and tacos, is slated to open in the coming months. Like County Seat, it will be limited service.
The decision to lean into counter service wasn’t dictated by the pandemic; rather, Reeves had that gameplan in mind before COVID-19 hit U.S. shores. “Everyone always says, ‘The good old days were so good,’ but wages aren’t going to stop going up and just the cost to operate becomes higher,” he says.
That’s not to say Vivili wouldn’t open new locations of The Barley Hound or Rosa’s Pizzeria, but as things stand, creating a new full-service concept is out of the question. The coronavirus has also challenged Reeves to rethink how those two restaurants operate. Amid capacity restrictions and ongoing safety concerns, Reeves was able to double seating at The Barley Hound by expanding into the “backyard” of the Victorian-style property. The new space features a central bar, taller tables, and slightly louder music, all of which pair nicely with its counter-service operations. The original dining area, by contrast, remains full service.
Despite the pressure on independents and small groups like Vivili, Reeves remains confident that those restaurants—and larger chains—will survive the pandemic. After all, each fulfills different needs and dining occasions.
“The public doesn’t want to go to a Chili’s in the historical town square, and I think Chili’s knows that. You want to go to Chili’s when you’re on a road trip or after the softball game with your team. I think the free market will take care of that on some level,” Reeves says. “Restaurants will always be here; they will always be a part of our culture. Coming together with people is the most fun thing you can do.”
HQ: Austin, Texas
Uchi, Uchiko, Uchiba, Loro
For Hai Hospitality Group, the talent within a single restaurant is what opened the door to expansion. Today the portfolio comprises four concepts: Uchi, Uchiko, Uchiba, and Loro.
“Uchiko came about because we had so much talent at Uchi—managers who wanted to be GMs, sushi chefs that wanted to be head sushi chefs. With one restaurant [the founders] couldn’t create that for their teams,” says CEO Tony Montero, who joined Hai Hospitality in 2017, nearly 15 years after the first restaurant opened.
Uchiko stayed true to Uchi’s nontraditional take on Japanese cuisine but with a warmer, more rustic aesthetic and menu approach. Similarly, Uchiba followed the style of its predecessors but doubled down on the beverage side, with an extensive collection of cocktails, spirits, sake, and more. The final concept in the group, Loro, blends Asian influences with Texas barbecue—a fitting combination considering the group’s Austin roots. The group now has outposts in Houston, Dallas, and Denver.
Early on, founder Daryl Kunik wanted Hai Hospitality to grow, but he also knew that the company would need someone seasoned in scaling brands. Montero, who was with CraftWorks Restaurants at the time, had previously spent 18 years at The Cheesecake Factory. During his tenure, the chain skyrocketed from about a dozen units to nearly 170.
Although Montero has big-brand acumen, he relishes the potential of smaller restaurant groups, both in terms of store expansion and employee opportunities.
“It’s a whole different level of creativity when you have several brands as opposed to just one brand to grow. We can attract different talent because they’re not locked into whatever Uchi does or whatever Uchiko does or whatever Loro does,” he says.
Hai Hospitality’s expansion model grants chefs a large degree of autonomy in developing their menus, running the kitchen, and more. While all Uchi locations have certain core menu items, 20–30 dishes are unique to their respective market. At the same time, they don’t face the uncertainty that chefs do when they strike out on their own.
“It gives people, especially our chefs and our GMs, the opportunity to cut their teeth, … to understand how to build a business, how to build a menu—without having to take the risk of opening a restaurant on your own.”
Before the pandemic, Hai Hospitality had signed lease agreements for two new Loro locations (one in Dallas and one in Houston), Uchiko in Houston, and Uchi in Miami. Montero says the company is still committed to those stores, although COVID-19 pushed back the timetable a bit. In November, Hai Hospitality received a substantial investment from KSL Capital Partners, which is likely to accelerate growth—pandemic or not.
As for new concepts, it might be a while before Hai Hospitality expands its family.
“Let’s focus on the four brands that we have,” Montero says. “We have some great growth opportunities over the next three to five years with those brands. I would never say never, but it’s just not on the road map as we talk today.”
Gypsy Kitchen, Tin Lizzy’s, The Southern Gentleman, The Big Ketch, Milton’s, The Blind Pig, Chido & Padre’s, Ocean & Acre
Many restaurant groups are, in a sense, born out of market saturation; the leaders behind successful establishments want to grow but opening another location of the same concept would only cannibalize sales. So instead, they introduce a completely new restaurant.
That’s loosely what happened to Southern Proper Hospitality. The founders would identify a gap in the Atlanta dining scene and create a restaurant to fulfill that need. The strategy led to differentiated concepts like The Big Ketch Saltwater Grill and Milton’s Cuisine & Cocktails. In 2014, a dozen years after opening their first restaurant, Chris Hadermann and his fellow cofounders established the umbrella group.
“I always like to refer to my partners and I as restaurant entrepreneurs because we were entrepreneurs first in other businesses. We didn’t come up in the restaurant industry, but we found ourselves in it and we love it,” Hadermann says. “That entrepreneurial zest sometimes gets you in trouble with saying yes to things when you probably should say no.”
The occasional bit of trouble notwithstanding, that enterprising spirit has catapulted Southern Proper beyond the Atlanta metropolitan area; 10-unit cantina Tin Lizzy’s has a Florida outpost, and Gypsy Kitchen just opened a D.C. location last year. Looking beyond the veil of COVID-19, Hadermann can imagine its gastropub, The Southern Gentleman, performing well in first-tier markets like Chicago and San Francisco, which have, as of late, gravitated toward Southern “schtick.”
Such discussions are still a long way off, and Hadermann emphasizes that the company’s immediate priority is survival and then stability. Entering a new, highly competitive market was challenging enough, and the COVID-19 curveball made it all the more unwieldy. Southern Proper also had to downsize in terms of a couple of locations, as well as employees.
If there’s a silver lining to be found, it’s in the deep reflection spurred by the pandemic.
“For us, it was sort of getting back to basics in a lot of ways,” Hadermann says. “We had to shrink the size of our company pretty quickly, and so that gives you an opportunity—right or wrong—to reset and start to be a little bit more intentional about how you grow and why you’re growing. It’s probably the best question that any restaurant owner can ask themselves, because I always like to say, it’s easy to get caught up in growing just for growth’s sake.”
HQ: Sedona, Arizona
Dahl & Di Luca Ristorante, Cucina Rustica, Pisa Lisa, Mariposa Latin Inspired Grill, Butterfly Burger
For Lisa Dahl, expansion was a natural progression for both her first restaurant and her own personal growth. Credited as one of the first restaurateurs to jumpstart the dining scene in Sedona, Arizona, the chef debuted her original concept, Dahl & Di Luca Ristorante, in 1995.
After nearly a decade in business, she opened Cucina Rustica, which served a similar cuisine but also fulfilled needs that Dahl & Di Luca alone could not. For one, Cucina Rustica’s larger space opened the business to special events like weddings, rehearsal dinners, and corporate parties. It also provided a more convenient, neighborhood option for locals in the Village of Oak Creek, located about 20 minutes south of downtown Sedona. Lastly, operating a second restaurant kept Dahl on her toes.
“Being stagnant is something that has never been in my DNA,” she says. “Once you begin to feel satisfied, you must seek other opportunities to grow and expand.”
From there, expansion continued organically with Pisa Lisa pizzeria, Mariposa Latin Inspired Grill, and Butterfly Burger, which is described as a “couture burger lounge.”
“My restaurants are like my children and having them showcase their personality, cuisine, and décor brings a sense of uniqueness that floats my boat,” Dahl says. “Yes, I can do much better from a revenue perspective if I had just one single concept, but then that wouldn’t be a challenge.”
Last year was shaping up to be a busy one for Dahl as she planned to open a second, much larger Pisa Lisa; it would be the first time one of the group’s concepts was replicated. Because of the coronavirus, plans changed and an entirely different business emerged. In April, Dahl-to-Door Provisions launched with off-premises options to service not just Sedona or even Arizona, but the whole country, thanks to nationwide shipping. At press time, the selection available for order included bulk portions of dishes like lasagna and beef tenderloin empanadas, as well as fresh pantry items like marinara sauce and linguine pasta.
Dahl-to-Door Provisions helped Dahl keep her staff onboard and serve locals and those much farther afield. She succeeded in that mission and has no regrets in starting it but notes that the challenges have outweighed the benefits in many ways. It’s been a crash course in running an e-commerce business and operating under a commissary model. For all its difficulties, the lessons of 2020 have fortified the Dahl Restaurant Group.
“The insights that were gained in this time have made us stronger,” Dahl says. “The mechanics that we now provide could never have taken place had this situation not affected our day-to-day business. We were so busy with everyday turning tables that we had gotten a little bit dormant in the art of takeout.”
Ristorante Bartolotta, Lake Park Bistro, Bacchus, Harbor House, Joey Gerard’s, Mr. B’s, Pizzeria Piccola, The Rumpus Room, Downtown Kitchen, Kohl’s Corporate Campus (The Kitch, The KIC, Barcode Coffee, Hub Coffee)
Savvy restaurateurs often tailor their concepts to meet a market need, but for Bartolotta Restaurant Group in Milwaukee, the beginning was more about educating consumers than fulfilling a specific demand.
“Twenty-seven years ago, Milwaukee thought mozzarella was a brick,” says chef and cofounder Paul Bartolotta. “Today, the 7-Eleven has sushi, and there are fresh herbs in every grocery store in the city, and people know that there’s mozzarella di bufala and mozzarella di latte.”
Back in the 1980s, Bartolotta spent time in Italy, France, and New York before landing back in the Midwest, working at Levy Restaurants, including the revered Spiaggia. His brother Joe convinced him to move to Milwaukee to open their own business and thus began Ristorante Bartolotta. Even though the restaurant’s regional fare of Northern Italian specialties and housemade pasta may have been unfamiliar to diners at the time, it quickly became a success, leading Joe Bartolotta to scout out a coveted new space along Lake Michigan. Joe planned to continue the Italian theme, but Paul advocated for a different cuisine, namely rustic French café. That second restaurant, Lake Park Bistro, proved the brothers could let their passion and curiosity dictate how they built more restaurants, rather than replicating a single cuisine.
“We have branched out and challenged ourselves to reinvent and do something new and different and varied,” Bartolotta says. “By offering that palette of colors, so to speak, we’ve been part of the development of a food community in Milwaukee, and … there’s plenty of other things that we can do that we haven’t even gotten to yet.”
In the nearly three decades since Ristorante Bartolotta opened, the group’s portfolio has expanded to encompass everything from fine dining and upscale casual to two food hall brands.
The group has persevered through hard times before—9/11, the Great Recession—but Bartolotta recognizes that the pandemic has changed the restaurant landscape in a very different way. Last spring, the company had to lay off more than 900 employees. When reopenings begain, it rehired about 250 and later, another 120.
A self-described optimist, Bartolotta thinks that despite the trials facing all restaurants, his group and the greater industry will emerge stronger because of the pandemic.
“The game has changed overnight. I don’t know if and when it will go back to what it was, so I can’t live in the world of it-used-to-be,” he says. “We need to be the architect of our own destiny and rebuild our model that works for what our needs are. At the same time, we don’t ever [want to] lose the passion and the heart that got us into this in the first place.”
HQ: Washington, D.C.
Bombay Club, Bindaas, Rasika, Olivia, Modena, Oval Room, Sababa, Annabelle
For as international a city as Washington, D.C., is, it was not always so global in its restaurant scene. Ashok Bajaj has watched the dining landscape evolve in the nation’s capital for more than three decades, even before other D.C. restaurant luminaries like José Andrés had built their own respective empires.
For Bajaj, the idea started simple enough: He moved to the U.S. from London in the ’80s with a goal of highlighting dishes from his native India. His original restaurant, Bombay Club, has long been a D.C. mainstay and welcomed every president from George H. W. Bush through Barack Obama. His second concept, 701 Restaurant (which closed in late 2018) featured new American eats and a caviar bar.
“The thought behind doing different cuisines was because it’s a professional and personal growth [opportunity],” says Bajaj, who is both the founder and owner of Knightsbridge Restaurant Group. “There are only so many one-cuisine restaurants you can do in the city, and having them interlinked from one restaurant to another helps as well, because if one is good, the second one is going to be good.”
Two of his restaurants—Bindaas and Rasika—have more than one location, but for the most part, growth has been through new restaurants. While not a chef himself, Bajaj does bring culinary expertise to the operation. An avid and international traveler, he takes inspiration from other places and then ideates how a similar concept could be incorporated into D.C. He also considers how a new restaurant could play into the existing collection.
This approach is best exemplified by the connection between Bindaas, which specializes in Indian street food, and Sababa, which serves modern Israeli fare. The restaurants are conjoined with a bar in the middle that seats about two dozen. Bindaas was already in operation, so Bajaj brainstormed what would best complement it and landed on Israeli cuisine, which, as he points out, shares many spices with Indian fare.
Bajaj acknowledges it might be a while—even a handful of years—before restaurants are ready to grow in earnest and investors are ready to back them. The landscape will be forever changed; COVID-precipitated changes, like robust off-premises programs, are here to stay, he says. But for all the worries around fine dining, he remains loyal to the category and its elevated appeal.
“I like fine dining, and I enjoy fine or upscale dining. I think my growth will be in those forms,” Bajaj says. “I’m [also] thinking of doing food emporiums where people come in and eat there or take the food out. That’s another possibility.”