When David Steele sat at Cafe Gratitude in the eastern part of San Francisco’s Mission District a dozen years ago, he looked across Harrison Street at a down-and-out building at the end of a sleepy residential block. Somehow, as his future restaurant partner Thomas McNaughton tells it, Steele saw potential in that particular building.
Today that location is the contemporary Italian restaurant Flour + Water, one of San Francisco’s most popular restaurants since Steele, McNaughton and partner David White opened it in 2009. The steadfast, constantly packed restaurant has arguably taught Bay Area diners more about different pasta styles than any other restaurant in the region, but it also has been a game-changer in a more under-the-radar way.
McNaughton, Steele and White soon went on to found Ne Timeas Restaurant Group, one of roughly two-dozen small, local restaurant groups — which we’ll define as those with between three and 10 restaurant locations — that have emerged in San Francisco in recent years. These groups are responsible for some of the city’s most popular restaurants, managing to endure the steep challenges of opening and keeping afloat a midpriced to upscale restaurant in San Francisco.
“All of our restaurants have a different personality,” says McNaughton, when asked about what he thinks works in their model, yet they all still “feel mom-and-pop.”
The groups tend to follow a pattern. After finding success with a debut restaurant, the restaurateurs expand with new restaurant concepts or open in a different neighborhood, which frequently leads to forming a small restaurant group. As groups, restaurants can have a more formal business structure and provide a more stable, desirable work environment — something that is critical as San Francisco restaurants struggle to attract workers.
The idea of growing a small restaurant group seems to be a relatively new phenomenon in the Bay Area. Many chefs start getting restless after many years in the same kitchen and want a new challenge, and restaurateurs generally agree that a more approachable second restaurant is really where restaurants start seeing a profit. But, lately, restaurant owners are realizing it’s the pivotal third restaurant that seems to be when their business formalizes and enters new territory.
Restaurant owners often realize at this point that the casual organization that might work as a small restaurant needs to become a professional organization with rising budgets and rising numbers of employees.
“Three was where things got crazy,” says Tim Stannard, founder and president of Bacchus Management Group, which includes San Francisco’s Spruce and the Saratoga and the Village Pub in Woodside. “The gaps in your structure become very apparent on your third restaurant.”
Three is when a chef no longer can be at each restaurant nightly and has to extensively delegate kitchen responsibilities. There can be over 100 employees spread across three restaurants. At this point, independent restaurants generally need to start taking a few corporate-world cues, with the likes of human resources, accounting, employee benefits, mentorship and clear paths to promotion that might be assumed in most professions, but not the restaurant industry.
McNaughton estimates that around 400 people showed up when he did an open call for prospective employees prior to Flour + Water’s opening. Now, in the new economic climate, he would expect to receive about 10 responses if he posted an ad seeking a new kitchen staff member.
Because of this competition in the San Francisco labor pool — especially with the temptation of benefits-filled tech jobs lurking around every corner — McNaughton knows it’s vital for employees to enjoy working at his restaurants and to feel like they are truly a key player in the restaurant team. Ne Timeas tries to attract employees with programs to help their wellness and further their careers, whether it’s through field trips to meet farmers and producers, or grants to help outside-work art projects or academic studies.
That’s true of other restaurant groups, too. Bacchus offers benefits not common in the industry, such as a 401K plan and financial planning assistance, as well as a reimbursement for language classes if English is not a first language. Hi Neighbor Restaurant Group, which includes San Francisco’s Trestle and Corridor, gives employee perks like a build-your-own wine cellar program for wine studying, in addition to paid vacation, medical, dental and vision benefits.
Many restaurant owners say that Michael Mina’s high-powered international restaurant group, which includes over 30 locations, and the local Greek rotisserie fast-casual concept, Souvla, are leading examples of how best to operate in today’s pricey San Francisco.
Souvla has a concise, satisfying menu of wraps and salads; an order-at-the-counter format that saves on labor costs; and prime locations for foot traffic. At the other end of the glitz spectrum, the Mina Group collaborates with the likes of Ayesha Curry and Marc Benioff; has restaurants from Dubai to Boston to Levi’s Stadium, as well as a splashy flagship in downtown San Francisco where tasting menus start at $165.
Most small restaurant groups fall somewhere in the middle of these two benchmarks by not being so focused on one fast-casual concept and not having such a vast and diverse collection of restaurants.
But as these small restaurant groups expand in the Bay Area, they face the challenge of maintaining a semblance of being the “underdogs and the little guy” as McNaughton describes the type of restaurants San Francisco diners root for. Those are restaurants that have a personal, mom-and-pop feel; where the head chef is always (or almost always) in the kitchen, where the menu either changes constantly based on farmers’ markets or has so many signature dishes that it can never change; and where the restaurant feels like a part of the day-to-day life of its neighborhood. They are the restaurants that many residents think of as being core to San Francisco’s restaurant scene identity: down-to-earth, with high-quality ingredients, and a unique personality that can’t be replicated elsewhere.
That’s where it seems the small restaurant groups can work best: start with a hit debut, then tweak that concept through careful, thoughtful expansion.
Ne Timeas realized what a juggernaut Flour + Water is for homemade pastas and beautifully charred Neapolitan pizzas, and then pivoted from there with its three other restaurants, Salumeria, Central Kitchen and most recently, Flour + Water Pizzeria. All of them are unique, yet share a common idea of being part-rustic Italian, part-imaginative, and all are located in the Mission District.
Hi Neighbor finds success by serving different renditions of contemporary American food within distinctly different settings and neighborhoods, and by being willing to try different service formats. Its Mid-Market restaurant, Corridor, weathered early turbulence as a fast-casual service concept, and now it’s a bustling table service restaurant day and night.
Trestle, a charming prix-fixe restaurant at the edge of Chinatown and Jackson Square, has a fervent fan base for a high-quality three-course menu at a non-steep price ($39). The group’s newest restaurant, the Vault, is slightly more ambitious and flashy for its Financial District audience, but rooted in the same market-driven cooking mentality as its siblings.
For his restaurant group, the Avenues, Boris Nemchenok specifically seeks out underserved neighborhoods and existing restaurant locations; the latter helps lower construction and permitting costs, and reduces opening delays.
Nemchenok also creates restaurants with menus that have broad appeal, like Korean BBQ grilled oysters and green tea buttermilk-brined fried chicken at Violet’s in the Outer Richmond; or potato and guanciale pizza and Sicilian stewed octopus at three locations of Fiorella.“We’re in the middle ground,” explains Nemchenok. “People can still come in and get a $15 to $16 margherita (pizza), get a pint of beer and walk out at a reasonable price. Or you can come in and have a full meal, have a Barolo and have that experience. What we’ve seen is that we kind of hit a lot of those price points and a lot of different diners that we can reach out to.”
Kash Feng founded his Omakase Restaurant Group in 2015 after commuting between Potrero Hill and South of Market, the locations of his two Live Sushi Bar restaurants, and seeing a vacant bike shop and hair salon in San Francisco’s Design District. A deal was signed and the group now has a staggering five restaurants in that immediate area, plus a butcher shop.
Here are some examples of small Bay Area restaurants groups. Some have more established names, while others are less formal.
Absinthe Group: Absinthe Brasserie & Bar, Arlequin Wine Merchant, Barcino, Bellota, Comstock Saloon
Altamirano Restaurant Group: Parada in Walnut Creek, Paradita Eatery in Emeryville, Piqueo’s, Mochica, Barranco in Lafayette, La Costanera in Half Moon Bay
Bacchus Management Group: The Village Pub, Spruce, Selby’s, the Saratoga, three suburban Pizza Antica locations, the Village Bakery in Woodside, Mayfield Bakery & Cafe in Palo Alto
Big Night Restaurant Group: Marlowe, Petit Marlowe, the Greenwich, Leo’s Oyster Bar, the Cavalier, Park Tavern, Marianne’s
Brandon Jiu’s group: Mister Jiu’s, Moongate Lounge, Mamahuhu
Burma Inc.: Burma Club, Burma Love, three Burma Superstar locations in S.F., Alameda and Oakland, and B. Star Bar
Corey Lee’s group: Benu, Monsieur Benjamin, In Situ
Crenn Dining Group: Atelier Crenn, Bar Crenn, Petit Crenn
Delfina Restaurant Group: Delfina, Locanda, five Pizzeria Delfina locations in S.F., Burlingame and Palo Alto
Fort Point Beer Co.: Taproom in the Ferry Building, Fort Point Valencia, Mill Valley Beerworks
Jeff Hanak’s group: Liholiho Yacht Club, Louie’s Gen-Gen Room, Dear Inga, Nopa, Nopalito
Hi Neighbor Hospitality Group: Trestle, Corridor, the Vault
Ne Timeas Restaurant Group: Flour + Water, Flour + Water Pizzeria, Salumeria, Central Kitchen
Omakase Restaurant Group: Omakase, Okane, Dumpling Time, Dumpling Time Express, Niku Steakhouse, Live Sushi Bar, Breakfast at Tiffany’s, Butcher Shop by Niku Steakhouse
Quince Pacific Avenue: Quince, Cotogna, Verjus
Slanted Door Group: The Slanted Door in S.F. and San Ramon, two citySF?? locations of Out the Door, Rice and Bones in Berkeley, Hard Water
The Avenues Hospitality Group: Uva Enoteca, three Fiorella locations, Violet’s
Traci des Jardins’ group: The Commissary, Arguello, Transit, School Night, Public House
Feng’s group has been built upon timing: first, in terms of finding a location ready for a huge surge in residents and office workers, and second in terms of the right food focus at the right moment. Omakase arrived just before San Francisco’s surge of chef’s choice sushi counters. The group opened the nearby Dumpling Time in 2017 with a menu of photogenic, often colorful dumplings, right as Instagram’s influence on diners’ choices was rapidly growing.
Finding success in the restaurant industry is, of course, not a precise science. Many longtime local stalwarts either have never expanded (Zuni Cafe, Outerlands, House of Prime Rib) or have followed the well-traveled path of being an upscale restaurant that opens only one casual sibling several years after the original opened.
But it is certainly notable how these small restaurant groups are able to expand locally, while also finding and keeping employees and retaining that beloved “underdog” status McNaughton referred to.
As for maintaining success, it will be “a tension between growth and creativity,” according to Stannard of Bacchus. “As we grow, it is important for us to have systems in place to keep everything running smoothly, but we try to make sure that those systems do not become so large or unwieldy that they strangle the joy and creativity out of the restaurants.”
That just might be the secret recipe for these small restaurant groups: the intersection of growth and creativity. Maybe that intersection is by Fourth and Market, or in Noe Valley or across the Bay Bridge. Or maybe it’s in all three locations.
Trevor Felch is a San Francisco freelance food & drink writer. Email [email protected]
Source: Thanks https://www.sfchronicle.com/restaurants/article/Small-restaurant-groups-are-the-secret-to-San-15065952.php