Independent Restaurant Association Forms In Muskegon

June 13, 2008
| By Pete Daly |
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MUSKEGON — A new association called Lakeshore Restaurant Originals is being organized for local independent restaurants, with the first goal being to recruit about 20 members. The new group already has ties to the Muskegon Area Chamber of Commerce.

"There is a fairly large movement across the country to pull the independents together" within a community, said Gina Lister, one of the founders of the new organization and owner of The Hearthstone, the 150-seat restaurant she and her husband, Frank, opened near Seaway Drive in Muskegon in 1975.

Dave Biesiada, the owner of another upscale restaurant, The Sardine Room, is working closely with Lister to get the new organization off the ground.

"We are trying to educate West Michigan as to the great restaurants that are here," said Biesiada.

"We think the flavor of a community, what it's about, is reflected in the independent restaurants," said Lister.

Biesiada, who was once employed by the Listers at The Hearthstone, acquired The Sardine Room with his partner in 2000. Biesiada said that several years ago, Muskegon "didn't have a lot of great restaurants." Now, he said, there is a great little group of independent restaurants in the region, ranging from Grand Haven to the south to Whitehall in the north. He and Lister envision about 20 restaurants located throughout that region eventually becoming members of Lakeshore Restaurant Originals.

About eight restaurants have already indicated an interest in joining the association, according to Biesiada, including Cherokee Restaurant, C.F. Prime Chophouse, Dockers Fish House & Lounge, Pints & Quarts, Toast 'n Jam's Restaurant and Finleys (now under independent ownership).

Joint marketing would be one focus of the association, said Biesiada. The association restaurants would constantly remind their patrons "to eat local," said Lister — meaning locally owned — and would encourage their patrons to try other restaurants in the association.

They also see the organization becoming involved in community activities such as charitable fundraising events. It might also sponsor educational programs for its members, such as bringing in experts on customer service to speak to employees of the independent restaurants.

The association members can benefit from networking and sharing ideas, especially for marketing, which now tends to be a "piecemeal" process for many independent restaurants, she said.

"An independent person has to be selective how their dollars are spent," said Lister, noting that the restaurants face a wide variety of advertising mediums. An organization of independents "gives us buying power" when it comes to advertising, she said.

Both Lister and Biesiada said they are not anti-chain, but Lister noted that "there's power in numbers — if we want to compete against the chains."

Biesiada estimates that there are more than a hundred independent restaurants in the Muskegon area.

As for restaurants that are part of a chain, Lister joked that there are a million and a half of those.

Biesiada noted how people often express regret at the closing of locally owned businesses such as drug stores and hardware stores, forced out by competition from "big box" stores and chains. He said they would like people to look at local independent restaurants in the same light.

Jeff Elsworth, an associate professor of Hospitality Business Entrepreneurship at Michigan State University, said about 70 percent of the restaurants in Michigan are actually independently owned (although many of those are brand-name franchises). He said Michigan had 16,782 restaurants in 2005, according to the National Restaurant Association.

Elsworth said local restaurant associations started a few years ago out West and are now becoming a very popular way for restaurateurs to leverage their purchasing power and local visibility. One area of purchasing advantageously as a group is insurance and other financial services, he said.

Elsworth said that unlike some types of businesses that compete against each other, restaurants located near each other naturally tend to help one another, whether they intend to or not. He noted how a "restaurant row" will begin in a particular neighborhood. Other restaurateurs don't avoid that area — they are drawn to it, because more and more people come there looking for a place to eat.

In researching how to set up an association for independent restaurants, Lister contacted Don Luria, a Tucson, Ariz., restaurateur, who was one of the founders of and then president of Dine Originals, a nationwide organization of independent restaurants that had 17 chapters throughout the country about three years ago. Luria, who is now semi-retired but still a restaurant owner, told the Business Journal that the Dine Originals organization is no longer functioning but some of its former local chapters still are active, notably in Florida but also in Arizona and North Carolina. The local chapter Luria started in Tucson in 1999 now has 45 member restaurants.

Luria said he met several years ago with an independent restaurant owner in Grand Rapids about possibly starting a Dine Originals chapter here — but then he later heard that the restaurant had closed.

Luria said the business climate for independent restaurants in America is "very difficult" in general.

"Probably about four or five years ago, independent restaurants took in about 50 percent of the total gross of restaurant sales, but the chain and franchise (restaurants) have been taking a larger portion of the dining-out business," said Luria. "If I were to take a guess today, I would say the independent restaurants are probably a little more than 40 percent today (of gross sales). And we tend to see that going down each year, by one or two percentage points."

"We really see a decline in the restaurant business in general, and it's more difficult for independent restaurants because we don’t have the pockets the chain restaurants have," said Luria.

He noted that even some of the restaurant chains are having a difficult time surviving in the current economy.

"You know you're in a tough economy when you see chains closing” — as has happened in the Muskegon area, said Lister. One well-known barbecue restaurant, part of a chain, closed at the relatively new Lakes Mall just outside of Muskegon a year or so ago.

Biesiada said it has been a tough couple of years in the Muskegon restaurant business, citing the continuous increases in costs of food, energy — "everything."

Some of the local independent restaurants in Muskegon that closed in the last two or three years are Topo's, Wild Iron and Nino's, he said.

Elsworth said growth in the restaurant business of late has been in the lower part of the middle price range, which he characterized as "fast casual" places, such as Panera Bread and Qdoba Mexican Grill.

The pressure is on the upper scale restaurants, he said, because many people have less money to spend now but still want to dine out occasionally, so they choose the lower-priced establishments.

The Lakeshore Restaurant Originals is being incorporated as a nonprofit association and will have a link from the Chamber Web site to theirs, once it is up.

Lister said the first public appearance of the Lakeshore Restaurant Originals will be at the Taste of Muskegon outdoor event downtown on the weekend of June 21-22. Members of the association will promote their new unity to the public, she said.

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