By Eve Kucharski
Listen Up Lansing Staff Reporter
To some, Lansing’s restaurant scene might not seem like it is doing well. Others view it as an area that has been holding steady.
But the truth of the matter is, according to Nielsen, in 2011 Lansing’s Restaurant Growth Index (RGI), was up six points above the national average, and far higher than Michigan’s overall average.
And according to an associate professor at the School of Hospitality Business at Michigan State University, Jeffery Elsworth, restaurant growth in the nation is up in general. Elsworth said that the number of restaurants in the United States number close to one million, and in a matter of years will reach that landmark. What is surprising to many about these statistics, is how many of these restaurants are owned by only a few people.
“Seventy percent of restaurants are sole proprietorships,” said Elsworth.
This might conjure up the image of many families, or even individuals opening singular locations across the country, but Elsworth said this is not the case. Just because a restaurant has a single owner, does not mean it isn’t a franchise, and the public’s idea of a “corporate” restaurant, is often owned by a single local.
“Traditionally someone says, ‘I have an idea, I’d like to open up a place,’ but money is a very big issue,” said Elsworth. “Undercapitalization is the biggest reason why restaurants fail … the average restaurant makes 4 percent on every dollar, fast food 6 percent … it can look busy, but can be going through bad times. A little bit of luck is important too.”
And this lack of money is why people seek out franchise agreements; in many ways it is far easier to rely on the budget of bigger entities when starting out.
Still, even with the benefit of funding, the public seems to be skeptical of these larger businesses; the perception seems to be that they are swallowing up independent restaurants.
According to Star Rodriguez, host and waitress at Theio’s Restaurant, a locally-owned Lansing diner, it’s “more rare” to have a family owned restaurant these days. But she said there is no shortage of frequent customers and uniqueness.
“It’s going on 10 years [that I’ve worked here],” said Rodriguez. “We have lots of regulars here, lots of them.”
One such regular, Lansing resident and online DJ Randy Haynes, said he’s been going to Theio’s Restaurant for three years now. According to Haynes, the 24-hour breakfast really drew him in, but it’s the atmosphere that keeps bringing him back, and away from franchises.
“There’s something about McDonald’s atmosphere,” said Haynes. “It’s not like this type restaurant. It’s more friendly here. Privately owned is more friendly.”
When asked if he would be as likely to eat out at the location if it were a corporate-owned diner, Haynes Haynes said no.
“Well you go in [to a franchise], they try to push you in and push you out,” said Haynes. “The employees don’t want to take the time to stop and talk to you. And you’ve got somebody breathing down your neck.”
Originally from Texas, Haynes said that as much as he likes Theio’s Restaurant, he misses the southern hospitality he grew up with.
“Well, Michigan itself is totally different than down south. The hospitality down there … you can’t beat it,” said Haynes. “Down south you get ‘mom and pops,’ so this is totally a different realm of things. I think I find myself still searching for that one restaurant I used to go to [growing up].”
However, according to Elsworth, this also seems to be the product of perception; his studies find that people tend not to care as much as they say they do, about who owns the restaurant providing them with their meals. In fact, his studies showed that people often ate at franchised restaurants without knowing about it; and vice versa.
“I went to 40 restaurants in Lansing, asking around 10 people in each restaurant if they knew, and if it mattered to them, if the restaurant was independently owned or a franchise,” said Elsworth. “The majority of people had no idea, except for people who knew the owner. The manager or owner has to be the face of the restaurant, even if you’re a chain. If they’re the face, people will feel it’s less of a franchise.”
Day Manager at the independent Soup Spoon Cafe Angela Mills has worked in franchises as well. According to Mills, that besides the seemingly better public perception, there is a benefit to working in a smaller operation.
“Something that’s locally owned like this, you all become more a cog in the wheel of running it. So if you see an area that you can improve on, in a locally owned vs. corporate, you’re more likely, I feel to be able to make a difference,” said Mills. “Also, corporate’s kind of looking at the bigger picture, and here we can be way more focused.
“Not that corporate restaurants don’t focus on the guests, I’m not trying to say that, but we’re just one location, we’re one restaurant. So you can’t make like a specific change to the menu there, say like ‘we need more Michigan wines’ well that’s not going to do well you know, at our branch in Florida.”
So perhaps the differences in a restaurant’s success vary on the operations side. And maybe, on the type of customer one is trying to attract.
Dave Miller, owner of the Lansing restaurant Fish & Chips, has worked there for 46 years. He said he still gets many regulars, one of which the 90-year-old former owner, who still stops by for coffee. According to Miller, it’s his restaurant’s reliability that keeps his customers coming in.
“Small independent restaurants, you’re not the excitement, but you’re the dependability,” said Miller. “People know what they’re going to get. We get a lot of retirees, a lot of students, who come back after years. They remember this place, this was their comfort.”