What Chains Have Learned from Independents

Does this friendly bartender work at a chain or an indie? It's harder to tell these days. Image: Oleksandra Polishchuk / iStock / Getty Images Plus

Independent operators are facing an increasing number of challenges, one of which is chain operations.

A significant portion of today’s guests favor concepts that are unique rather than mass produced. When they walk through a bar or restaurant’s doors they want an artisanal feel.

Some chains have learned that lesson, and they’re acting on that information.

If the perception is that chain operations are mass produced, it leads to the assumption that such concepts can’t or simply don’t create artisanal food and drink. That belief leads many to believe that the guest experience won’t be unique either.

Attempting to change that perception, some chains have committed to designing unique units rather than building out cookie-cutter spaces. If guests want to eat and drink at a restaurant or bar that feels local and one-off, these chains are willing to invest in higher design that fit into the markets in which they operate. Rather than repeat the same look and risk being considered boring, inauthentic and anything but innovative, some chains are giving each unit a unique design. Some multi-unit groups create just one of each of their concepts, creating one-off bars and restaurants that look and feel like independent venues.

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In fact, one chain operation embracing a higher level of design ethos to build one-off chain unit designs is called One Off Hospitality. The group has created and operates several unique concepts throughout Chicago, including their flagship Blackbird, helmed by Chef Ryan Pfeiffer; avec, a wine and shared-plates concept featuring Mediterranean and Midwestern cuisine from James Beard-award-winning chef Paul Kahan; and The Violet Hour, a sophisticated bar concept revered nationwide by craft cocktail aficionados and others who want to drink well.

The Boka Restaurant Group operates nearly 20 concepts, each of which is incredibly unique and located in the highly competitive market of Chicago. One of these, Lazy Bird, a chic cocktail lounge located in the basement of a boutique hotel. The bar mirrors the Midcentury style of the hotel itself and features live music. The Bellmore is another Boka venue that most guests would never mistake for a chain concept, combining style, art, elegance and comfort, communicated via food, beverages and atmosphere.

One Off and Boka are dedicated to creating, designing and operating concepts in a highly competitive market. And each concept, in look, feel and menu programming, are anything but mass produced—they’re all one-off. That makes these two groups disruptors, and there are more like them. These groups, well positioned to compete against the very best independent concepts, are fully prepared to remove one of the biggest indie advantages: unique feel and design.

Earlier this year, Donnie Madia, owner and managing partner of One Off Hospitality, and Kevin Boehm, co-founder of Boka Restaurant Group, explained to industry professionals how unique design helps them stay competitive in a market like Chicago. With talented operators, chain and independent moving in all the time, it’s crucial to maintain competitive edges.

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Both presenters are very interested in design. But they also maintain their competitive edges via other means: they push boundaries, opening unexpected venues and partnering with talented chefs and bar professionals; they guide the guest experience to ensure their concepts deliver as intended; they study their competitors; they’ve learned how to retain qualified team members; and they’ve learned how to structure real estate deals.

On the topic of employee recruitment and retention, Madia and Boehm agree that finding and keeping qualified labor is the top challenge facing operators across America. Unemployment may be at a 50-year low but bar, nightclub and restaurant roles are still difficult to fill. Madia and Boehm use hiring events and open calls, saying that they’re important now. The two successful operators also say that transparency and leading through example are the best—“only” is the word that was used—way to keep team members. If an operator doesn’t walk their talk, if they don’t show that they care about their team and want to work with them, “employees will grow around you and leave.”

A professional who treats their employees well, nurtures their careers, listens to their feedback and ideas, and operates a thriving business will attract and retain talent. Another way Madia and Boehm recruits team members is financial investment. Health care, a 401K, and other benefits can give an operation a huge advantage over the competition.

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Real estate is always a challenge. Many operators have watched as real estate prices have gone up. Those who operate in markets where cannabis has been decriminalized or legalized have likely heard of that industry’s operators driving real estate prices sky high. When real estate prices rise, operators must make better deals to protect their money, their businesses and themselves.

Madia and Boehm believe that developments in retail provide hospitality operators leverage. As brick-and-mortar businesses continue to battle it out with online retailers, retail values slip. Developers need to fill those spaces when they close, making bars and restaurants more appealing and more valuable. The duo suggest looking at real estate in emerging neighborhoods; keeping occupancy cost under to 6 or 7 percent or lower to remain profitable; and either structure real estate deals for lease arrangements under 6 percent or to own the property.

Chain operators have learned from independent operations, and they’re taking aim. However, independent operators can learn from chains. As Madia and Boehm say, “Get better or die. Be competitive or lose your place in line.” Independent or chain, that final lesson applies.

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