If Richard Melman turns his attention away from a business project to focus on something entirely new, don’t be alarmed.
It probably just means the first venture is already a success.
That’s been the longtime pattern for the founder and chairman of Lettuce Entertain You Enterprises, the Chicago-based company with nearly 80 restaurants representing more than 30 brands. Since founding R.J. Grunts, a burger joint in Chicago’s Lincoln Park neighborhood in 1971, Melman has continually gone back to the drawing board to create entirely new restaurant brands. In addition to R.J. Grunts, the company now includes such widely varied concepts as Mon Ami Gabi, Café Ba-Ba-Reeba and Wow Bao, to name a few.
Richard Melman TITLE: founder and chairmanCOMPANY: Lettuce Entertain You Enterprises, ChicagoCONCEPTS: Ben Pao, Big Bowl, Café Ba-Ba-Reeba!, Everest, Foodlife, Mity Nice Grill, Mon Ami Gabi, Nacional 27, R.J. Grunts, Wow Bao, and othersANNUAL SALES: $350 millionNO. OF UNITS: 78HOMETOWN: ChicagoEDUCATION: some college, did not graduatePERSONAL: married; three children
It’s that entrepreneurial wanderlust that keeps him both professionally successful and personally satisfied, says Melman, who considers himself “part artist and part businessman.” Over the years he has parlayed his creativity, discipline and love of food, into a $350 million a year business. In the process, he’s also built a reputation as a role model and respected industry leader.
“When you look at the body of work of Lettuce, it’s quite remarkable and quite intimidating,” says Doug Brooks, chairman, president and chief executive of Dallas-based Brinker International, which purchased several of Melman’s original concepts from LEYE in the 1990s.
“How do you have that many ideas up your sleeve?” he adds. “It speaks to Rich’s creative, outside-of-the-box way of doing business. And it speaks to the talents of his team, both culinary and ops.”
Though he’s known for unbridled creativity and often unconventional ideas, Melman says he remains grounded by a commitment to creating delicious, high-quality food.
“It’s a simple business: Develop good food and get it into people’s mouths,” he says. “The rest sort of takes care of itself.”
Melman’s exposure to the industry started early, when he worked at his father’s soda fountain at 14, peeling strawberries for the milk shakes with a spoon, so he wouldn’t cut himself. As a teen he held several restaurant-related jobs, including working at a drive-in and selling restaurant supplies.
A lackluster student, Melman bounced in and out of college—three colleges to be exact—before finally deciding to take a job working for his father, who at the time owned a Chicago delicatessen. He worked long hours behind the counter, being a host and eventually becoming a manager. But the ever-ambitious Melman had his eye on a bigger role. He approached his father and his partners, asking for a stake in the business.
“I remember vividly,” Melman says. “They turned me down.”
The rejection galvanized the entrepreneurial spirit that would later define his career. Shortly after, he gave his notice and left the company to pursue his own business ventures. After another restaurant job and some unsuccessful projects, Melman, then in his 20s, still was struggling to realize his vision.
Enter Jerry Orzoff, a local real-estate agent who would become a founding partner of LEYE.
In 1971, the two opened R.J. Grunts, a whimsical burger concept that prided itself on high-quality, healthful food in a fun-loving atmosphere. After a slow start—“the longest two and a half months of my life,” he says—it took off. Melman and Orzoff never looked back.
Their business relationship and close friendship lasted until Orzoff’s death in 1981. But the spirit of that initial partnership set the stage for a company that prides itself on relationships. LEYE now has more than 55 partners.
Melman “has fostered partnership in the organization,” says Kevin Brown, president and chief executive of LEYE. “It really is the cornerstone of the organization, that spirit of personal and professional development.”
Melman’s strongest alliances start at home. He and his wife, Martha, have been married 34 years and have three children—R.J., who is 30, Jerrod, 26, and Molly, 24.
“My wife is my favorite partner,” he says. “I run the restaurants and she consults, and she runs the household and I consult.”
All three of the children work in the family business. R.J. and Jerrod are managing partners of Hub 51, a casual bar that opened in 2008, and Molly is a manager there.
Jerrod Melman, who calls LEYE the “sixth member of our family,” says the secret to the company’s success is his father’s work ethic and competitive spirit.
“There’s ‘enormously successful,’ ‘failure,’ and something in the middle,” Jerrod Melman says. “[For him] two of those aren’t acceptable.”
Learning from his father’s has been a crash course in business for R.J. Melman too.
“I get for free what people would pay lots of money for,” he says. “He’s a great teacher. It would be impossible not to absorb some lessons from him.”
Yet for all his generosity and teaching, Melman is unapologetic about expecting excellence from his team, Brown says.
“I like the expression, ‘Rich isn’t afraid to write checks because he’s always making deposits,’” he says. “He can be demanding, but he’s always giving to you.”
One area in which Melman has high expectations for his staff is creativity. He urges his employees to challenge conventional thinking and come up with fresh ideas.
“Generally,corporate structures create great corporate leaders, but Rich has promoted the value of being an entrepreneur,” Brown says. “He pushes people to think outside the box.”
Just 20 percent of creativity is in-grained, Melman says, so he aims to cultivate the teachable 80 percent by challenging his staff to come up with new ideas.
“Let’s say I wanted you to create an unusual canopy in front [of a restaurant],” Melman says. “I would [say]: ‘Have you ever looked at a lot of canopies? You’ve probably walked down a lot of streets and never even seen them, but there are probably 15 on that street.’ [If it were me,] every time I’d read a magazine or go to a movie, I’d be looking at canopies. The start of creativity is being aware.”
Not surprisingly, food is a key source of creative inspiration for the company. Melman maintains a hands-on approach to menu development—the test kitchen is just 25 yards from his office—and he finds ideas in unexpected places.
The inspiration for the potato skins at R.J. Grunts, one of the first restaurants to offer the now-omnipresent dish, came from a radio story about sailors eating the vitamin-rich skins to ward off illness while at sea, he says.
“My brother relayed the story, and I said, ‘OK, let’s monkey around with potato skins,’” Melman says. “I’ve always been a person who pays attention to what people say. It usually leads me to the new ideas I’ve tried.”
The Lettuce Entertain You team continues to come up with new ideas. Melman is mum on the details, but says the company is getting ready to sign three or four deals, most of which will create new concepts.
It’s a safe bet that they won’t be his last.
“I’ll never retire,” Melman says. “I love what I do. I’m probably more creative today than I’ve ever been.”— [email protected]
