Web Exclusive: Former Famous Dave's Exec Preps Redstone for Expansion
David Goronkin lays the foundation to take the upscale-casual concept national.
By Maya Norris, Managing Editor -- Chain Leader, 3/11/2008 11:32:00 AM
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| CEO David Goronkin is preparing four-unit Redstone American Grill for national expansion. |
What are your plans for Redstone?
Redstone has the unique opportunity of really becoming a national player in the upscale-casual marketplace. There's very little competition in that space of high-quality operators. And as we take a look to establish a nationwide footprint, we feel that Redstone has the ability to do that.
We are getting incredible response to our concept in each diverse market that we go into. And what this is telling us is, we've got an opportunity here to really be able to take this to a nationwide level. And now we're putting together the infrastructure to be able to support that national growth.
What does the new infrastructure look like?
First of all, we've got a solid concept that works, and we've proven that there are no geographic impediments to growth.
Second thing is, we're bringing in talented people who have seen growth before, who are looking to be able to join an organization in the early stages to support its growth.
And the third piece is, we've got the financing in place. And so by having all three of those elements in place together, we feel we're in a unique position to be able to grow our concept very efficiently across the country.
Have you hired anyone yet?
We've brought in a CFO, Kay O'Leary. Kay was most recently with Buca. We hired Kathy Rusnacko to be our director of training. Kathy came from Brinker and then Famous Dave's and will join us as our director of training. And she'll be responsible for hourly training as well as management training and support-center training. We already have in place our chief operating officer, Larry Ryback. Really that's the core of what that foundation's going to look like as we put some infrastructure in place.
The company raised $10 million over the summer, too.
We actually did two things. The first thing is we raised $10 million through a rights offering to our existing shareholders. And then we also were able to raise another $16.5 million through GE Capital for debt financing. So equity financing through our existing shareholders and then debt financing through GE Capital. So that really gives us basically $20 million in growth capital.
You came from Famous Dave's, where you brought discipline and performance-based measures to that chain and were able to grow sales and unit counts. What lessons did you learn from Famous Dave's that you will be applying to Redstone?
Do it smart. Take your time to do it right. First of all, we've got a great prototype in place and now we're going to start replicating that prototype.
The second thing is, never compromise on real estate. You have to go in and get the best position. These are long-term investments, and the one thing that you can never do is take a secondary location and expect it to do the kind of volume that you need it to do. So I think thoughtful growth and a disciplined growth is very important. And I think those are the key lessons learned over the years in making sure we do it right and we do it right the first time.
The other piece is, you can never diminish the value of talented people who have seen growth before. It's very, very important to be able to bring a team in place that has a passion for the business but that's also seen growth before. Because whenever you're going through the growth curve of an organization, there's going to be a lot of change. And you've got to be able to put people in place that thrive on it. You need change agents: people that are excited about the prospect of the changes that evolve with an ongoing business. You also need people with strong leadership characteristics-people who can bring other people along, that aren't going to leave people in the dust; people that genuinely enjoy doing what they're doing and are genuinely interested in developing the people around them.
What are Redstone's competitive advantages that you will be playing up?
We're finding a strong desire and a strong support from the communities that we do business in. We're going into affluent suburbia, and these are the folks that have the ability to go out on a more frequent basis that can afford and support a $40-check-average restaurant. Now they have expectations, and we have to deliver day in and day out, but they feel good when they get a great experience.
When we talk about competitive points of difference, first of all, it's about the food. We have an unrelenting passion for exceptional food. All of our food is made from scratch in our restaurants every day. We use the finest cuts of meat, the freshest cuts of fish to be able to generate a phenomenal menu.
And then engaged hospitality. When you come into our restaurants, we genuinely appreciate that you're there. We engage each and every guest as an individual and really bring a level of service that is far beyond what you would get in typical casual dining.
And then, of course, it's the ambience. We spend a lot of time on our lighting package, on our music systems to make sure that every element that touches the guest is memorable.
What are the areas that the company needs to work on or improve upon?
At this point it's just about setting up our foundation for growth. We have what we feel is a phenomenal brand. We're getting great guest acceptance. Now it's just putting the infrastructure in place to be able to grow at an appropriate level and also making sure that we've got the access to talent.
The only way we're going to be able to grow effectively is to hire, attract and retain high-quality people. The good news is, we have not had any difficulty doing that because we're finding that people are gravitating to our concept. Other restaurant managers, general managers, chefs that get exposed to the Redstone brand say, "How do I become a part of that? I see where this is going and I want to get in early."
So you don't think the slowdown in the economy will hurt your concept because you're going after customers with more disposable income?
Right. And the slowdown in the economy is a point in time. It's cyclical. And what you can't do is pull everything back and wait for something to change, because, frankly, everything that we're working on today are for projects that will open up in 12 to 18 to 24 months. So if you stop looking at great real estate now and if you stop building great restaurants in great trade areas now, when we cycle out of the current economic slowdown, you'll be far behind. So we are continuing on doing what it is that we're doing, looking for that high-quality real estate, and when we find it, we're taking advantage of those opportunities.
What are you doing to drive sales or cut costs in this type of economic environment?
First of all, we're not cutting costs. We're driving sales. And we're driving sales through great execution. We're currently going through a major menu overhaul. We've enhanced the quality of the products on the plate. We've brought in new plateware. We've brought in new glassware in order to be able to further enhance the great menu that we have. We think that's how you build great value. We think you build great value by putting high-quality food out in front of your guests every day. That we feel is a great driver of sales, and we've been rewarded by that.
What's Redstone's potential for becoming a national chain?
This is easily a 200- to 300-unit brand. It's very well accepted. If you take a look at just the top 75 to 100 cities that are out there in America today where you can put two to three of these restaurants, you get there pretty quickly.
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