Restaurateurs, Joe Montana share strategies at conference

Football legend Joe Montana is working on a burger concept in San Francisco; Jimmy John’s chief executive Jimmy John Liautaud is "pissed off" at lawyers and lawmakers who cave to demands of "lefties;" and industry finance experts are predicting merger and acquisition action will pick up this year.

Those were the highlights of the annual restaurant industry conference sponsored by law firm Davis Wright Tremaine LLP. This year's event, held at the St. Regis Hotel in San Francisco on March 14, had the high school football theme "Game Time at Restaurant High."

The annual invitation-only event drew an exclusive mix of about 350 restaurant chain executives, private equity investors and emerging brands to spend a day discussing topics ranging from compliance with immigration and menu labeling laws to health care and international growth.

In a keynote event, Montana, the retired Hall of Fame quarterback for the San Francisco 49ers, was interviewed by celebrity chef Guy Fieri, who was admittedly a fan of rival team the Oakland Raiders.

Known as "Cool Joe" for his calm-under-pressure demeanor, Montana shared stories about his football glory days but also spoke of investments in the spirits brand Aviation Gin. Montana also said he is developing a burger restaurant in San Francisco, though he declined to offer details.

Fieri, whose restaurants include Johnny Garlic’s, Tex Wasabi’s, Guy’s Burger Joint and Guy’s American Kitchen and Bar, made a pitch for his foundation Cooking With Kids, dedicated to improving the lives of families with food.

In another keynote panel, Jimmy John's Liautaud displayed his signature candor when asked about the regulatory climate pressuring the restaurant industry today. Liautaud said he was "pissed off" about proposals to raise the minimum wage and that "lawyers are running the country and not business men."

Noting that he was in the process of moving the Champaign, Ill.-based chain in part to Florida where the business climate is friendlier, Liautaud said he spent a lot of time and energy trying to get Mitt Romney elected in the presidential race last year, and he expressed hope in possible Republican contenders, like former U.S. Secretary of State Condolezza Rice and Sen. Marco Rubio of Florida.

On the finance front, several sessions at the conference looked at the relationship between private-equity and growing restaurant chains.

In one panel restaurant operators shared stories about their relationships developed with private-equity investors. Among them: Chris Reilly of KarpReally LLC with Tim McEnery, founder of Cooper’s Hawk Winery & Restaurant; Jon Owsley of Catterton Partners with Mario Del Pero of Mendocino Farms Inc.; and Jeff Mills of Weston Presidio with Jon Schlegel of Snooze, an A.M. Eatery.

The three private-equity players said there is growing interest among investors in smaller, emerging chains.

But such firms are looking generally for concepts that have a truly unique point of differentiation with strong unit economics. They must demonstrate appeal to a broad audience over multiple dayparts, and must work in different geographic areas — ideally with 10 or more locations.

In addition, Kevin Burke, managing director of Trinity Capital LLC, predicted the year ahead will produce more merger and acquisition activity. Older restaurant chain owners are looking to "take their cards off the table," and low interest rates will fuel transactions.

For investors, however, product innovation and creativity will be the key qualities that separate "those who can from those who can’t" among acquisition targets.

Contact Lisa Jennings at [email protected]
Follow her on Twitter: @livetodineout