April 26, 2024

You are here: Home / Archives for food network

Publisher Drops Book Deal With TV Chef Paula Deen

June 28, 2013 by Leave a Comment

But on Friday, its publisher, Random House, said it would not publish the cookbook, and would cancel a five-book contract it signed with Ms. Deen last year.

The book deal was one of the last remaining lucrative business relationships for the embattled celebrity chef. Its cancellation came on a day when Sears, Kmart and J. C. Penney announced that they would stop selling products, including cookbooks, branded with her name.

Since last week, the Food Network, Smithfield Foods, Walmart, Target, Caesars Entertainment, QVC and the pharmaceutical company Novo Nordisk have decided to suspend or sever ties with Ms. Deen after her admission in a legal deposition that she had used racist language in the past and allowed racist, sexist, homophobic and anti-Semitic jokes in one of her restaurants. Ms. Deen was deposed on video as part of a discrimination lawsuit filed last year by a former employee.

Her frantic efforts to stanch the flow of negative opinion by defending herself on the “Today” show and posting apologetic videos on YouTube have rallied many of her admirers. They have threatened boycotts of Walmart, created a “We Support Paula Deen” Facebook page that has well over half a million “likes,” and started a campaign to flood the Food Network offices with empty butter wrappers, a symbol of Ms. Deen’s indulgent cooking style.

But these efforts have not, apparently, made a difference to Ms. Deen’s corporate partners.

Stuart Applebaum, a spokesman for Ballantine Books, a division of Random House, said in a statement Friday afternoon, “After careful consideration, Ballantine Books has made the difficult decision to cancel the publication of ‘Paula Deen’s New Testament: 250 Favorite Recipes, All Lightened Up.’ “

The book, co-written by Melissa Clark, a dining columnist for The New York Times, was to feature lighter fare than the fat- and sugar-laden recipes Ms. Deen has promoted in previous books and on her television shows.

A person with knowledge of Random House’s decision to cancel the contract said, “When Walmart, Target and J. C. Penney all announced they are discontinuing their Paula Deen business, including books, it is awfully tough to stay the course of a publication. It was a business decision.”

Ms. Deen has published 14 cookbooks, starting in 1998 with “The Lady and Sons Savannah Country Cookbook.” Together, they have sold more than eight million copies.

But many of the sales outlets that normally sell thousands of Ms. Deen’s books — like Walmart, Target, Kmart and QVC — would have refused to carry the new one.

Random House would not disclose the amount Ms. Deen was to be paid, but a person with knowledge of the contract said it involved millions of dollars. It is unclear whether Ms. Deen will have to return any of it, or whether a clause in the contract would allow the publisher to cancel the pact because of Ms. Deen’s behavior.

“That’s why God invented lawyers,” said Mr. Applebaum.

On Thursday, the Danish pharmaceutical company Novo Nordisk said it was suspending its use of Ms. Deen as a spokeswoman for the drug. The company, which has the top-selling portfolio of diabetes medications in the United States, has reached out vigorously to black Americans in its marketing and medical sponsorships.

Ms. Deen began a multiplatform campaign to promote the drug on the same day last year she revealed she had Type 2 diabetes. That set off public criticism that she had misserved her audience. She had received the diagnosis two years earlier, yet had continued to promote recipes high in sugar and fat.

Didra Brown Taylor, the executive director of the Beautyshop Project, a national diabetes screening initiative that offers free blood tests in hair salons in low-income neighborhoods, said that Ms. Deen’s conflict of interest was noted by program participants at the time, and that the current crisis had confirmed many in their beliefs that Ms. Deen might be more opportunistic than honest.

“She was cooking food that a diabetic would not eat,” Ms. Taylor said. “And to profit from that and then to profit from a diabetes drug, that’s hypocrisy.”

She said African-Americans were unlikely to forget Ms. Deen’s more recent admission that she used racial epithets. “It’s more than a rumor,” Ms. Taylor said. “She can’t say that she didn’t say it.”

Leslie Kaufman contributed reporting.

Article source: http://www.nytimes.com/2013/06/29/business/media/publisher-drops-book-deal-with-tv-chef-paula-deen.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Food Network Drops Paula Deen

June 21, 2013 by Leave a Comment

A network spokeswoman said it would not renew Ms. Deen’s contract when it expired at the end of June. Ms. Deen has faced a volley of criticism this week over her remarks in a deposition for a discrimination lawsuit by a former employee. In the document, she admitted she had used racial epithets, tolerated racist jokes and condoned pornography in the workplace.

The Food Network statement did not elaborate on its reasons for dropping her, but a person close to the network said its shows featuring her sons, Jamie and Bobby, would not be affected. Ms. Deen currently has three regular programs on the network, including “Paula’s Best Dishes.”

Those shows were part of a small culinary business empire run by Ms. Deen, 66, who has produced numerous cookbooks, lent her name to household products from butter to mattresses, and served as a spokeswoman for Philadelphia Cream Cheese and Smithfield Foods. She and her sons own and operate The Lady and Sons restaurant in Savannah, Ga. Her magazine “Cooking with Paula Deen,” has a circulation of nearly one million, her Web site says.

In her first video on Friday, posted on YouTube and later removed, Ms. Deen, near tears, said: “I want to apologize to everybody for the wrong that I’ve done. I want to learn and grow from this. Inappropriate and hurtful language is totally, totally unacceptable.”

In a longer video posted later in the afternoon, she appeared more composed. “Your color of your skin, your religion, your sexual preference does not matter,” she said.

She added: “I was wrong, yes, I’ve worked hard, and I have made mistakes, but that is no excuse and I offer my sincere apology to those that I have hurt, and I hope that you forgive me because this comes from the deepest part of my heart.”

In yet a third video on YouTube, posted Friday afternoon, Ms. Deen apologized to Matt Lauer, the host of “Today,” for not appearing for a scheduled exclusive interview earlier in the day. She had agreed to the interview, extensively promoted by NBC News, to address the uproar generated by her deposition.

Clearly irritated by the absence of Ms. Deen, a regular guest on the show, Mr. Lauer told viewers that she had spoken with him on Thursday, agreed to an “open and candid” discussion and had flown to New York City. But in the morning, he said, she had her representatives cancel, citing exhaustion.

Ms. Deen has managed to offend even her most uncritical fans before, most recently in January 2012 when she announced she had Type 2 diabetes on the same day she endorsed the diabetes drug Victoza and a lucrative collaboration with Novo Nordisk, the drug’s manufacturer. Because she had built her career on a no-holds-barred approach to sugar and fat (creating recipes like a cheeseburger patty sandwiched between two doughnuts and a Better than Sex cake made with cake mix, pudding mix, and heavy cream), she was roundly criticized for encouraging an unhealthy diet for others, hiding her illness and then trying to profit from it.

On Thursday, criticism of her racial remarks mounted on Twitter — even spawning a sarcastic hashtag, #paulasbestdishes — and on Ms. Deen’s own Facebook page.

The lawsuit against her was filed in March 2012 by Lisa T. Jackson, the general manager of Uncle Bubba’s Oyster House, a restaurant that Ms. Deen owned with her brother, Earl (Bubba) Hiers. Ms. Jackson, who is white, said that her father was Sicilian, with dark skin, and that she had suffered prejudice as a result.

In the deposition, Ms. Deen said that she had used a racial slur in the past, though not in the restaurant, but that she and her family did not tolerate prejudice. “Bubba and I, neither one of us, care what the color of your skin is” or what gender a person is, she said. “It’s what’s in your heart and in your head that matters to us.”

She also stated that “most jokes” are about Jews, gay people, black people and “rednecks.”

“I can’t, myself, determine what offends another person,” she said.

Article source: http://www.nytimes.com/2013/06/22/dining/paula-deen-is-a-no-show-on-today.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Scripps Networks Is Adding 52 New Series

April 23, 2013 by Leave a Comment

How determined is one of the largest cable television companies, Scripps Networks Interactive, to increase the original programming it offers viewers and advertisers? For the 2013-14 season, the six channels operated by the company plan to add 52 new series.

Scripps Networks has long been devoted to original programming on its channels — Cooking Channel, DIY Network, Food Network, GAC, HGTV and Travel Channel. Still, as viewers and advertisers clamor for additional new shows instead of reruns of programs they already watched or sponsored on broadcast television, cable programmers are racing to beef up their original fare.

The count breaks down this way: Five new series on Travel Channel and GAC, also known as Great American Country; 20 new shows on Cooking Channel and Food Network; and 27 new series on DIY Network and HGTV.

Executives of Scripps Networks shared details of the channels’ plans at a briefing for reporters on Tuesday morning, ahead of an upfront presentation in the afternoon for advertisers and agencies. The presentation is one of eight that are scheduled before the start of the 2013-14 season; the other presentations are, or were, in cities like Atlanta, Chicago, Los Angeles and Minneapolis.

The executives discussed the company’s digital content in addition to the opportunities that advertisers have to reach readers of the two magazines based on two Scripps Networks channels, Food Network and HGTV, which are part of a joint venture with the Hearst Corporation.

And Scripps Networks is climbing aboard the so-called TV Everywhere bandwagon, its executives said. Starting in the summer they plan to offer mobile applications and Web sites that will give authenticated cable subscribers the ability to watch shows on devices like smartphones and tablets.

Many of the new series on the six channels are extensions of existing shows, using and reusing the hosts and cast members of other series on the channels. For instance, the hosts of “Property Brothers” and “Buying Selling” on HGTV, Jonathan and Drew Scott, will compete against each other in a new series, “Brother vs. Brother,” also for HGTV.

And the rapper Vanilla Ice, who has a hit series on DIY Network with “The Vanilla Ice Project,” will take his interest in homes to another show on the channel, “Vanilla Ice Goes Amish.”

(Really. Seriously. No kidding.)

In another way to minimize risk, some new series borrow the Vanilla Ice template in being centered on faded stars. Examples include new shows for DIY Network featuring the actor Bronson Pinchot; the rapper Joseph Ward Simmons, known as Rev. Run; and the singer Daryl Hall.

The Scripps Networks executives also talked about their continuing efforts to woo advertisers and agencies into working with the channels to develop and produce commercials that go beyond traditional 30-second spots and assume the trappings of content, a trend known as content marketing or native advertising. Advertisers that have already made deals with the channels include JPMorgan Chase, Land Rover, Pier One Imports, Walt Disney and Scotts.

Article source: http://www.nytimes.com/2013/04/24/business/media/scripps-networks-is-adding-52-new-series.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

You’re the Boss Blog: Following Up on a Restaurant’s Unconventional Strategy

August 29, 2012 by Leave a Comment

Lucy Cardenas and Bill Coker made the unconventional decision to build a second location right next to their first.Jeffrey D. Allred for The New York Times Lucy Cardenas and Bill Coker made the unconventional decision to build a second location right next to their first.

Case Study

What would you do with this business?

A year ago, we told you about a dilemma facing Red Iguana, a family-owned Mexican restaurant in Salt Lake City. Its owners, Lucy Cardenas and Bill Coker, were facing a two-pronged problem with their first location. First, a happy problem: their restaurant had gotten so popular after appearing on the Food Network’s “Diners, Drive-ins and Dives” that customers regularly had to wait an hour to be seated. At the same time, the city was about to build a light rail line down the middle of the restaurant’s street, a project that had the potential to force the business to close for several weeks.

To ease the customer wait and protect themselves from downtime, there was little doubt that Red Iguana’s owners needed a second location. But the way they decided to expand was somewhat surprising. Ms. Cardenas and Mr. Coker decided to open a second location with the same name and menu just two blocks from their first, a plan that went against conventional wisdom and was rejected by most of the experts we consulted at the time of our original article.

But the strategy quickly found success. During its first full year, 2010, the new restaurant had revenue of $2.1 million. Still, that was only a little more than half of the original restaurant’s annual take of $3.9 million, which itself was down from $4.2 million in 2009. So, would the new location be able to build on its early success (without cannibalizing the original business)? And what would happen when the construction project shut down the first location?

We recently checked in with Mr. Coker, and the new location seems to have built on its strong start. The original location is on track to bring in $4.2 million during 2012, he said, which would match its income from the height of its popularity in 2009 (when it was the only restaurant). And the new location should pull in about $3.2 million, he said.

“What we’ve seen is that there are a substantial number of our clientele who prefer location No. 2 to No. 1 because when the patio is open, there are more seats, and we have a counter and indoor waiting area and valet parking in the evenings,” Mr. Coker said. “It’s more spacious and quieter than the original, and some people prefer that atmosphere. Others prefer the original. It’s actually turned out to be to our advantage that it’s not a cookie-cutter of the original; we’re able to accommodate two different types of clients. Also in terms of operational ease, it’s a tremendous advantage to our kitchen managers to be able to stabilize food flow by running two blocks to the other restaurant.”

Almost as important, the second location saved the company from what could have been major economic damage caused by construction of the rail line. As a member of a community board advising the city on the construction, Mr. Coker negotiated a deal whereby the street in front of the original Red Iguana would be rebuilt last, so that the construction company could concentrate all of its efforts on the site — thereby turning a three-to-five week job into a weeklong project.

And then, to best use the week during which the original restaurant would be closed, Ms. Cardenas and Mr. Coker  — after employing announcement cards, banners, Facebook and Twitter to point their customers to the new restaurant — laid out a seven-day plan to renovate the original location using restaurant workers as labor.

At 9 p.m. on July 8, when the original location turned on its “closed” sign, the city began tearing up the street, and Red Iguana’s staff started dismantling their restaurant. Directed by paid trade contractors, a third of the staff from the original location (including a professional painter and plumber) took part in a $250,000 renovation. Working 24 hours a day, alternating crews of from 30 to 50 people moved the restaurant’s furnishings outside into a circus tent set up for the occasion; laid an epoxy floor; installed $25,000 of stainless steel equipment in the kitchen; and repaved the parking lot.

“Normally I don’t think a restaurant could pull off a $250,000 renovation in seven days, but that’s the kind of experience I have from the entertainment business, coordinating multiple crews simultaneously,” said Mr. Coker, who in the early 1980s had worked as an assistant director and production manager on a series of Burt Reynolds buddy comedies, including “The Cannonball Run.”

At the new restaurant, the owners added 28 outdoor seats, increased staff with another third of the employees from the first location (the final third took vacation), and began offering valet parking at lunch and dinner every day.

And on Monday July 16, one week after it closed, the original location reopened. According to Mr. Coker, even without the seven days of income, the first location took in $282,000 in July, barely $300 less than in July 2011.

Article source: http://boss.blogs.nytimes.com/2012/08/28/a-restaurant-makes-the-most-of-being-forced-to-close/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: Why Red Iguana Built Red Iguana 2 Next Door

August 30, 2011 by Leave a Comment

The Red Iguana 2: We didn't even think of doing a different concept.Jeffrey D. Allred for The New York TimesThe Red Iguana 2: “We didn’t even think of doing different concepts,” said Bill Coker, a co-owner.

Case Study

What would you do with this business?

Last week, we published a case study that looked at a choice facing Red Iguana, a Salt Lake City Mexican restaurant that was deciding where, and how, to expand. Founded in 1985 by Ramón and María Cardenas, the 130-employee company offers sit-down restaurant service as well as catering and fast-food operations.

Now owned by Ramón and María’s daughter, Lucy, and her husband, Bill Coker, the 100-seat Red Iguana was facing two problems, one that most restaurateurs would die for and another that most would die to avoid. In September 2008, the restaurant was featured on the Food Network’s “Diners, Drive-ins and Dives,” and soon there was an hour-and-a-half wait for seating almost every night. Then came word that the city would be building a light-rail line down the middle of the restaurant’s street, construction that could potentially force the restaurant to close occasionally, or at least eat into its revenue by dissuading some of the 700 diners who came every day, 363 days a year.

When regular customers started telling Mr. Coker that they were being turned off by the long lines as much as by the construction, he and Ms. Cardenas decided to expand. But how? Conventional wisdom held that they should open a second Red Iguana at some distance so as not to cannibalize their current business, and several nearby towns approached them about doing just that. But while searching for a location, they heard about a warehouse for sale for $259,000 just two blocks from their first restaurant, replete with a concrete pad that could be used for patio dining.

In the end, Mr. Coker and Ms. Cardenas opted to ignore conventional wisdom, at least mostly. They bought the nearby warehouse, as well as neighboring properties for parking and catering, and opened a 119-seat copy of Red Iguana — with the same menu — in December 2009. Soon after they bought the warehouse, a developer who was building a downtown mall approached them about opening a fast-food version, and in March 2010 Taste of Red Iguana opened at the City Creek Center.

Opening Red Iguana 2 two blocks from the original was a tough sell to the bank loan committees Mr. Coker approached. “I convinced them that our daily anecdotal evidence was that we had a large customer base that was no longer coming in because we had gotten too busy, too crowded, too successful and that they would indeed fill the new restaurant,” Mr. Coker said. “And that in fact the two-block proximity gave us a valuable business advantage over distant additional locations because we could literally push large reservation parties and large walk-in groups to the restaurant that was the least busy.”

Ms. Cardenas and Mr. Coker’s counterintuitive bet paid off. Annual revenue has grown to more than $6 million today from $4 million in 2009, and both restaurants are regularly full. Surprisingly, perhaps, it is the fast-food branch that is not yet making money, though mall construction will not be complete until next year. Ms. Cardenas and Mr. Coker discussed their decisions, and the results, in an interview:

Q: How bad has the disruption caused by the light-rail project been?

Mr. Coker: We estimate we lost about $300,000 over the last 12 months. Primarily it impacted our lunch numbers because a lot of our business, probably 10 to 20 percent during the week, was business meetings from downtown. We’d call them the “suits.” We’d look through the room and you’d see a sprinkling of suits.

Ms. Cardenas: Afterwards, you didn’t see so much. Before the construction, we’d have a waiting list for lunch of two to three rows of names; afterward, it would be one row.

Q: Is that over?

Mr. Coker: The bridge on our street that connects the west side with downtown was closed on April 17, 2010, and opened again on Aug. 17, 2011. We’ve definitely seen an impact since it’s reopened — at both restaurants, actually. During a recent convention, we got a lot more activity than we would have when the bridge was closed.

Q: Why didn’t you give the second restaurant a slightly different concept, as our outside experts advised?

Mr. Coker: I understand why that would make sense to people. But we didn’t even think of doing different concepts. This is one of the strongest concepts in the country. Over the years, even with multiple locations and different names, Ramón and María’s restaurants always served their same food. When we first took over, I ran into a couple who’d known Lucy since she was 7 and had been coming weekly. They know exactly what they wanted. Our anecdotal evidence is that 70 percent of the customers always order the same dish. When you have that kind of loyalty, it’s much safer to bet on the same restaurant with different decoration than on inventing a new concept. And that’s been borne out by the numbers.

Q: What are the numbers?

Mr. Coker: In 2010, the brand made $6.4 million. The original Red Iguana made $3.9 million, the new one made $2.1 million, and Taste of Red Iguana another $350,000.

Q: With a popular restaurant’s “magic” being the hardest thing to replicate during an expansion, how do the customers and the atmospheres compare?

Mr. Coker: The second restaurant has several streams of clients. First, those who try to go to No. 1 but find it’s too crowded so they’re directed to No. 2. Then, there are loyal customers that actually prefer the second location because it has a patio and diner-style seating at a bar. It’s a quieter location. Parking’s easier, it’s a larger location, and it has indoor waiting for when it’s raining, hot or cold.

Ms. Cardenas: We have a lot of families coming into Red Iguana No. 2. We’re putting a lot of tables together. They bring their kids, in part because the train goes right by there and they like to watch, and in part because they don’t have to wait as much as at No. 1.

Q: What are your plans?

Mr. Coker: The concept of multiple locations grew out of logistics concerns but also to position the brand to go for a large platform expansion. We wanted to prove the brand had enough strength to be in a new building, to be two blocks away. And then when the City Creek offer came up, we realized it was a good opportunity to create a dual-tiered franchisable brand that could roll out with quick service and full-service version, very much like the UNO pizza chain from Chicago.

Q: Are you thinking of opening other locations now?

Mr. Coker: No plans now. We’ve been offered to open at Salt Lake airport by four or five airport management chains. We’re not ready for that, but it’s an indication that we have that strength. This is still a mom-and-pop operation. Aside from dining room and kitchen managers, there are only four of us in the office managing these three locations — Lucy and I and the finance and H.R. mangers we hired. We like the In-N-Out Burger expansion theory: pay as you go. Our preference is to not take on any more debt and pay down things.

Article source: http://feeds.nytimes.com/click.phdo?i=1a9ad8ffde1a40748d51d495b0fc7bf5

Filed Under: Small Business Tagged With: , ,

Case Study: Red Iguana, Facing Disruptions, Ponders Opening a 2nd Restaurant

August 25, 2011 by Leave a Comment

THE CHALLENGE To expand to a new location while surviving a disruptive public works project — a light rail line down the middle of Red Iguana’s street — just as the restaurant was experiencing a rush of business from being featured on the Food Network’s “Diners, Drive-ins and Dives.”

THE BACKGROUND In 1965, Ramón and María Cardenas moved from the San Francisco Bay Area, where they were working in a restaurant, to Salt Lake City, where they took over a restaurant called Casa Grande. Their decision to not modify María’s recipes from Chihuahua for the American palate may have slowed growth at first. “People were not used to their kind of Mexican food,” said their daughter, Lucy. In the first years, annual revenue was about $25,000, but María and Ramón gradually built a following.

In 1970, they moved Casa Grande downtown. Revenue continued to grow until urban decay and a recession hit in the early 1980s. By 1984, Ramón was forced to take a cooking job in Park City to make ends meet, while María ran Casa Grande. In 1985, Ramón returned to open a four-table restaurant called Red Iguana in Salt Lake City’s working-class west side. The restaurant did so well — it pulled in some $300,000 in its first year — that María was able to close the ailing Casa Grande. After a fire burned down the new restaurant in June 1986, Ramón reopened 10 blocks away at the current location.

The reasonably priced Red Iguana developed a cultlike following. Its revenue grew every year, hitting $1.9 million in 2003. But in 1998, María grew ill and required Ramón’s full-time care, which forced Lucy to make regular visits from Portland, Ore., to oversee the business. After María died in 2002 and Lucy’s brother died of a brain aneurysm in 2004, Ramón decided to sell. “He was exhausted and ready to throw in the towel,” said Lucy’s husband, Bill Coker.

It was a delicate moment: Lucy and Mr. Coker wanted to take over the business, but they had to convince Ramón to look past his strict views of gender and family. “Because he was a son, a man, my father would have given my brother the business,” Lucy said. “But we bought it from my dad. We got lawyers and accountants involved.” Plus, she added, “he wanted to sell the business to me, not me and my husband, because it’s family. It was at times painful.”

After paying Ramón $560,000 for the company in 2005, Ms. Cardenas and Mr. Coker sped up an incipient modernization drive, improving the electrical system and buying the parking lot next door. Ms. Cardenas, who had worked as a wait staff trainer at various Hard Rock Cafes, had already brought in a computer system, which had helped professionalize the staff. “I wanted to turn it into full service, not, ‘Wham, bam, here you go, here’s your check,’ like in a diner,” she said. To improve food consistency, she had her father cook each dish in front of her chefs so they could write down the recipes, which they had never done before for fear of recipe theft. Revenue increased to $2.7 million in 2006 and $3.8 million in 2008.

In 2008, the “Diners, Drive-ins and Dives” appearance and news of the coming light rail project changed the business’s direction irrevocably. Scheduled to start in 2010, the multiyear project had the potential to dissuade customers from visiting and, during its most intense periods, close the restaurant — a huge loss for a one-location business that had been serving 700 people a day.

THE OPTIONS When Mr. Coker saw the lines outside his restaurant, he thought of Sammy Davis Jr. Mr. Coker, 63, had spent 37 years in the entertainment business, and in the early 1980s he had worked as an assistant director and production manager on a series of Burt Reynolds buddy comedies. On “The Cannonball Run,” Mr. Coker had worked with Mr. Davis, Dean Martin and Roger Moore, stars who had become so popular, he believed, that they had lost their identity. While driving Red Iguana’s branded van around town, he began to hear from locals who had stopped coming to the restaurant because of the long wait and out-of-state crowds. “My experience in the entertainment industry taught me that that kind of popularity can flip and become a negative,” Mr. Coker said, “and once it becomes a negative you become Planet Hollywood.”

To relieve that tension, he decided, Red Iguana would add a second location. Upscale developers had been trying to lure Red Iguana to their new malls and suburbs, but Ms. Cardenas and Mr. Coker owned a house a few blocks from their business and looked upon it as a child. “I love being able to get to my business so fast,” Ms. Cardenas said. “I felt as the owner of the Red Iguana, I couldn’t live anywhere else.”

While deciding on a location for their second restaurant, they heard about a warehouse for sale for $259,000 just two blocks from their first restaurant. The barrel-roof building was the definition of industrial chic, with a concrete pad that could be used for patio dining and with views of a power station and its three 320-foot smokestacks to the west and the cityscape and snowcapped Wasatch Mountains to the east. But to get the money to buy and develop the location, they would have to convince Zions Bank and the Salt Lake City Office of Economic Development that it was a good idea to build a sister restaurant two blocks from the first. The lenders were skeptical.

The restaurant owners had to make several choices quickly, before the rail construction began.

WHAT OTHERS SAY Danny Meyer, founder of Union Square Hospitality Group, which includes Union Square Cafe and Gramercy Tavern: “Though it has worked for some — Nobu, Nobu Next Door — I would absolutely not advise repeating the same concept so close to the first. It’s confusing to patrons, and you may inadvertently hurt morale as staff members will invariably feel they might not be working in the better of the two.”

Anton Schulte, co-owner of Bistro Daisy in New Orleans: “I would probably just hunker down financially and try to weather the business interruption storm. I don’t know their financials but, at the level of business that they say they are at, I would assume they have a little bit of money in reserves.”

Charles Phan, owner, The Slanted Door and other restaurants in the San Francisco Bay Area: “I would strictly look to expansion only if you have a niche in the market that needs to be filled or you’re bringing something new to the table and it is interesting to you and the customer. I wouldn’t do it just because there are extra people around the corner. For me, it never works to redirect somebody to a second location with the same name.”

THE RESULTS Offer your thoughts on Red Iguana’s choice on the You’re the Boss blog at nytimes.com/boss. Next week, on the blog and in this space, we will explain how things have worked out for Ms. Cardenas and Mr. Coker.

Article source: http://feeds.nytimes.com/click.phdo?i=3dcb15f5ed9a780335d3febe9f0dec2a

Filed Under: Small Business Tagged With: , ,