Charter House Innovations Finds Niche

September 5, 2008
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HOLLAND — It seems like they’ve come out of nowhere, but Charter House actually is celebrating its 20th anniversary.

Charter House, now called Charter House|Innovations, originally offered a couple of seating solutions to match its Swiss parent company’s restaurant kitchen equipment. But on Sept. 1, 2004, Chuck Reid bought the company and gave it life. Now, the company designs interiors and manufactures furniture for the hospitality industry, specializing in food service.

“The original company, Charter House, was formed to create seating and décor for fast food industries. The parent company at that time also supplied the kitchen equipment, so they had a turnkey operation,” said Reid, who joined the company in January 2002 in the role of general manager.

“As the general manager, I could see where we were headed, which wasn’t in a good direction financially for the parent company at that time. It was a Swiss-owned company and we were one of 92 companies around the world, and it was the smallest of the companies that the owner owned. The seating and décor side of things didn’t really match well into their corporate program, so four years ago I said, ‘Let me buy it and we’ll do our own thing.’”

Reid believed in the product and the people behind it, and thought that, with the right attention and sales focus, he would be able to create a “cool little company.” Since that time, the company has grown from two salespeople to roughly 20, and from 38 employees to more than 100. Reid attributes a big part of that success to design.

“I make the comment now that we used to be a manufacturing company when I got here, but now we’re a design company that happens to manufacture,” said Reid.

“That was the first thing I did within the first six to eight months: create a new product line. I got here in January (2002) and by the following January, we got approval with the world’s largest restaurant chain (McDonald’s), and it was because of our new product line. They had been to see us before I got here and weren’t really impressed. We didn’t have anything to differentiate ourselves from the other companies out there. By bringing in the design side, we were able to show we add value to them because of our creative abilities.”

For the first year and a half, Reid only had a sales team for the kitchen equipment and, he said, they didn’t really like selling the core packages. “I needed people who liked color, who liked patterns, who liked difference,” he said. “The way we sold is, we sold on our creative design. It’s not just a chair anymore; it’s a unique chair. We gave them a creative difference and it was a noticeable difference, so that they could help increase the sales of the restaurants. And that’s really what we’re here for: to create a nicer environment for them to drive their sales, and that drove our sales.”

The company offers booths and chair options in a variety of colors and fabrics, but each space is individually designed. When Reid came to the company, it offered two booth options. Now in his fourth year as president, there are 11 booth options and the company has provided them to several McDonald’s throughout the country, as well as to Burger King, Arby’s, and others.

Charter House|Innovations also has expanded into education and hospitality.

“It’s all design driven —  as long as there is some design in it that will allow us to be creative and sell something that’s not just a widget from China,” said Reid, who had the idea to expand the company by going into the hotel business when he was driving in his car. That idea gave birth to CityFlats Hotel in Holland.

Reid said that when interviewing interior designers for the company’s staff, he noticed there were often hotel designs in their résumés.

“It just got me thinking that we’re so focused on just our restaurant side, but we have people here who can design interiors. It doesn’t matter what the interior is.”

To create the individuality of the hotel, Charter House|Innovations’ manufacturing department, along with the rest of the company, all were maximized, said Reid.

“What we tried to do is take what we do on the restaurant side and put it into a hotel, and create that same type of environment that draws people in.”

In early 2006, Reid began to brainstorm on the project; around Nov. 1, he landed a deal on a piece of property, had the architect draw up plans in two months, and broke ground in the beginning of February 2007. The design team spent roughly three months, starting in January 2007, designing the lobby, common areas and restaurant, and the guest rooms, making each one different. The company spent the rest of the year engineering and manufacturing the project.

“It was fast-tracked beyond belief. We like to think we’re nimble,” said Reid. “Our biggest key is our nimbleness to implement change rapidly.”

The company expanded into education, designing the cafeteria at Parker High School in Howell, Mich., and food service areas at Michigan State University.

“It was kind of a natural area for us to get into the education side. There is a lot of food service on colleges and universities,” said Reid. “That type of business allows us to get out of our core business which is chain restaurants and put us into the universities.”

Reid said the company is looking to keep its momentum by maintaining its core business and creating a few more CityFlats hotels, with the second planned for the east side of the state in Gross Pointe.

“Between the education side with Michigan State and the hotel side with CityFlats,” said Reid, “we’ve got a nice little niche that we’ll be able to increase our business without looking for other markets.”

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