Bold moves help restaurateur succeed in life and business

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17/08/2005

In 1993, many doubted Apple-Metro Inc. had a recipe for success with the Applebee's restaurant it opened on 42nd Street near Times Square, but entrepreneur Zane Tankel insisted the mid-priced, casual eatery would succeed.

He was right. Last year, the restaurant gorged on more than $12.5 million in sales, making it the highest-grossing restaurant in the entire Applebee's chain of 1,700.

The company's success led other restaurant chains to be less timorous in opening up shop in New York City.

"We were the first." Tankel said. "We led the way and showed people it could happen."

The boldness of Tankel and his business partner, Roy Raeburn, not only helped them pioneer the practice of putting chain restaurants in Manhattan, but led the company to grow faster than the restaurant industry in general and do well in the city, where the restaurant business has been expanding at a faster clip.

Apple-Metro, with more than 3,000 employees in 28 restaurants in New York City and Westchester and Rockland counties, grew about 10 percent in 2004. The company, which opened its first restaurant in 1994, now has $106 million a year in revenues, Tankel said.

That's a good rate of growth in New York, where the industry has been expanding at 8 percent to 10 percent a year for the past few years, said Chuck Hunt, executive vice president of the New York State Restaurant Association. A spokeswoman for Applebee's International Inc. said the average 2004 revenue growth for restaurants in the chain was 10.7 percent..

The Restaurant Finance Monitor, an industry newsletter, ranks the 200 largest chains in gross revenues. In 2001, Apple-Metro ranked 126th. In 2002, the company moved up to 90th place; in 2003, 84th; 2004, 70th; and this year, 60th.

Apple-Metro succeeds by following a focused personnel policy, Tankel said. New managers, hired through several rigorous interviews, must work as waiters and cooks at various restaurants, for example. He regularly visits his restaurants, looks for things to compliment and questions managers if something seems amiss. The roving chief executive officer calls himself "more of a cheerleader than anything else ’Ai I don't go in to pick them apart."

 

CARS AND CRUISES

Retaining good managers is a key element in the success of the chain, Tankel said. In a field where employees often change jobs, the company wants to get back the investment it put into the selection and training of its supervisers. Tankel says he found that pay isn't always the primary reason people leave jobs. They can be dissatisfied for other reasons, so the company tries to be accommodating when special needs come up and, as a matter of policy, give out perks that help shore up morale.

Every three years, the company leases new cars for general managers and kitchen managers at each restaurant. Managers also get another perk, an annual company cruise for them and and their spouses. This summer the cruise is to Bermuda and lasts five days.

The company gives employees letters called "Apple-Metro Wow Awards" to thank them when someone notices they did something "beyond expectations." The letters are posted on employee bulletin boards.

Gray Line Tours stops its buses in front of Applebee's for lunch because "We only have a limited amount of time and they accommodate us consistently, which is a big thing," said Tom Lewis, president of the company. "Anybody can do it one time, but to do it consistently for five years, that speaks a lot about the organization. ... It's also our reputation on the line when we bring somebody somewhere."

The self-confidence that enables Tankel to take risks was formed at an early age. As a junior on his high school wrestling team, his dream was to be state champion, but he was shocked when he actually did it. In his senior year, he did it again.

"It taught me: You really can (do it)," he said. "I thought, I must be better than I thought I was."

 

STRAIGHTENING OUT

Tankel's high school life wasn't all victories. He was thrown out of three different high schools for fighting until he visited a jail as part of a "scared straight" program. He was about to join the U.S. Marines when, at the urging of his father, he agreed to give college a try. He received his bachelor's degree in economics from the University of Pennsylvania's Wharton School of Business.

In the mid-1960s, Tankel became a salesman for a small printing company, Collier Graphic Services in New York. He did so well at it that he eventually took over ownership. He built up the company further, opening plants in five other cities, but later found he could make more money slowly selling off parts of it. By the mid-1990s, when he co-founded Apple-Metro, he had sold nearly all of it, finally parting with the last unit of the company in 1998.

In between business ventures, the adventurer later joined expeditions to the North and South poles and in 1985 climbed Mount Everest, although he didn't make it to the top.

After a mutual friend introduced Tankel and Raeburn, the two decided to open an Applebee's restaurant or two in Staten Island. That happened in October 1994, and their franchise later became bigger than either of them expected. Raeburn, who's title is president, concentrates on picking new locations, construction of new restaurants and maintenance.

Apple-Metro has 23 Applebee's, three Chevy's FreshMex and two Zanaro's, an Italian-food chain.

The chain continues to grow. Tankel said two more Applebee's restaurants are "right now in the hopper." Site construction plans are in formation for one in Staten Island and another in Brooklyn this winter. Within the company's franchise area of New York City and Westchester and Rockland counties, he said, there's room for Apple-Metro to double the number of restaurants it now has.

 

By DAVID GURLIACCI

Westchester County Business Journal

http://www.westchestercountybusinessjournal.com/current_issue/index.html