CEO Chris Patterson has found that landlords are willing to discount rents to attract well-known regional brands like Austin Grill. Read or listen to an extended interview.

Let’s talk about the challenges of the economy. What impact has a looming recession had on a small chain like yours?

The biggest issues we are dealing with—and we have been very proactive in feeling this is headed our way—is continuing to position ourselves as the restaurant of choice for our guests. Obviously, we have had to take some price increases, but they have been small. But what we have done is try to be more cost-effective in the way we operate our business.

What have you done to attenuate rising commodities costs?

Even being a small company, we have gone directly to manufacturers and tried to get those purchases right at the source. That’s really the challenge. From an operations standpoint, obviously controlling the cost at the unit through proper ordering procedures and proper portioning is important. We haven’t decreased any portion sizes. We’re just making sure we give the proper portion size.

What do you see in terms of your commodities situation regarding menu pricing?

In December we took about a 3 percent increase. But it’s been well over a year since we had a price increase. Our units posted 5 percent sales growth in 2007. We are very proud of that. I think it will continue to be a challenge.

One of the things we are working on is taking a hard look at our menu. We are taking a look at lunch items and seeing where we can drive some more sort of female-targeted lunch guests to soup and salads and some lighter fare.

How has a slowing economy affected expansion?

Believe it or not, we are looking at this sort of economic turn as a positive for our model. The reason being, we have finances in place to allow us to grow. Currently I am looking at three locations of existing restaurants that are not making it. These are other concepts that haven’t prepared themselves for what’s going on. And so we’re taking a look at the entry at some new units at a discounted price.

Where are these locations, and why are they attractive to you?

They’re in the Washington, D.C., metro area. What makes them attractive is they are in centers that have historically done large sales. There are competitors nearby that are doing very well. The opportunity of cost to get in the units is much less.

Are you finding that landlords are eager to deal to get a new tenant in?

One of the centers we are looking at is a very front-and-center type of place, and they don’t want to have a vacant building in their center. It is allowing us to structure a deal that is more positive to us. Our name recognition and brand awareness in this area is a very positive negotiation point when we go into these deals.

Read or listen to an extended interview.