Restaurant incubators lend a helping handRestaurant incubators lend a helping hand

by ron ruggless


In a 15-acre area of Dallas, restaurant impresario Phil Romano is doing what he does best — giving life to new concepts.


This time, however, Romano, who has created numerous brands, including Fuddruckers and Romano’s Macaroni Grill, is nurturing the concepts of others at his Trinity Groves Restaurant Concept Incubator.


The incubator, which aims to produce as many as 30 foodservice businesses in the next few years, is one of several such ventures promoting restaurant entrepreneurship at a time when funding can be difficult to come by and the restaurant landscape is particularly competitive.


Among the other incubators nurturing fledgling concepts are American Gonzo Food Corp., a Los Angeles-based venture funded by Paul Hibler, founder of the growing Pitfire Artisan Pizza chain, and an unnamed investor. (See related story on page 8.)


And several more communal-oriented enterprises have also sprung up, including La Cocina incubator in San Francisco, the Kitchen Incubator in Houston and the Hot Bread Kitchen Incubator at La Marqueta in East Harlem, N.Y.


Aspiring restaurateurs are not the only beneficiaries of the incubators — big companies are too, said Romano, several of whose concepts were purchased by large corporations. Meanwhile, Romano continues to grow several of his other brainchildren, including Coal Vines, Eatzi’s and Nick & Sam’s.


“Every major company out there has someone in strategic development looking for concepts,” said Romano during a recent tour of the 75 acres that he and his investors have purchased over the past seven years just west of downtown Dallas. “We want to be a shopping center of sorts for those concepts.”


Room to grow


Romano and his West Dallas Investments LP have taken the first 15 to 20 acres at the foot of a new Santiago Calatrava-designed bridge that opened in March and made it the centerpiece of Trinity Groves Restaurant Incubator.


Existing buildings offer about 150,000 to 160,000 square feet of space that Romano envisions sitting in what might eventually resemble “a European park” with restaurants at its heart.


“We don’t want brands in here,” Romano said. “We want to create brands.”


Desirable concepts are about 2,500 square feet in size, have a maximum investment of $500,000 in finish out and project annual sales of $1 million to $1.5 million.


“We want everything in here to be organic, to be a new idea,” Romano said. “We are trying to create restaurant concepts that are portable and can be multiple.”


Rent is a flat 6 percent of sales, with an assessment for common area maintenance, taxes and insurance. Terms are five years with a five-year option and no personal guarantees.


“In exchange for a very favorable rent structure and possible financial assistance, WDI is interested in participating in ongoing success stories,” the company said in overview documents. “We are encouraging potential tenants to raise their own capital, but we will enter discussion for alternative financing options if the opportunity is a right ‘fit’ for Trinity Groves.”


The brain trust


Romano has put together an advisory panel of experienced chefs and restaurateurs to vet candidates for the Trinity Groves incubator, including Drew Nieporent of Myriad Restaurant Group, Jeff Sinelli of Which Wich, and such local chefs and operators as Stephan Pyles, Kent Rathbun, Joseph Palladino and Nick Badovinus.


Mark Brzezinski, who helped develop and was a franchisee of the Pei Wei Asian Diner chain, is also on the advisory panel.


“We have way more demand than supply,” Brzezinski said during an interview at the Trinity Grove offices. “What we’re doing now is trying to filter the people that we think will be the most successful. A lot of developers don’t care if you are successful or not. We want them to be long term and be a benefit to other businesses in the area.”


Brzezinski said the advisory committee has rejected some applicants, saying, “We like your passion and your energy and your desire to do it, but we just don’t see that working in Trinity Groves.”


Still, Romano emphasized that some Trinity Groves participants would be first-time owners. 


“They have talent, and we support their weaknesses,” he said.


If an incubated concept expands beyond Trinity Groves, the advisory committee gets a 10-percent stake, Romano said, so the members are doing extensive due diligence.


In addition, WDI is creating a fund to finance those who have great ideas but no ready access to working capital.


“We’re creating an entrepreneurial fund for West Dallas with individual investors,” Romano said. “We also go to our vendors and equipment people. If it works, they are locked into a pipeline.”


If the fund puts money into the idea, the fund owns 50 percent of the concept. The consulting group owns 10 percent if it grows.


“The entrepreneur can own 40 percent of the thing, or all if he puts in all his own money,” Romano said.


“We’re looking for diversity in food: Italian, French, Asian, Mexican, Lebanese,” he said. “We’re going from hand food to casual dining to maybe a fancy place. These will be owner operated, so it will be diversity in ownership. The main thing is to give opportunity to younger people with great ideas.”


Soon to hatch


The first incubated restaurant will be Babb Brothers Barbeque & Blues, which will open in early fall. Four Corners Brewing Co. will be opening within weeks, and Sharon Von Meter of SVM Productions will also open in early fall a 10,000-square-foot culinary art center and cooking school.


Romano also is planning to open a Hofmann’s World’s Greatest Hot Dogs restaurant, based on the sausage made in Syracuse, N.Y., most likely by October. And he hinted at a television reality show that may be involved in some of the restaurant creation.


“It’s going to be an evolution, not a revolution,” Romano said. “By the end of summer, we’ll have three or four restaurants open here or close to opening. After that it might be three or four a month to open up.”


He added that the incubator has the luxury of letting an unsuccessful concept go dark for a few months and come around again as another eatery.


Another benefit is its proximity to a local community college culinary program. 


“We’ve got an affiliation with the chefs school at El Centro community college, and they can use this for their internships,” Romano said.


And restaurants are only part of the development push.


“You can’t expect people to come out to eat and then go home, so we have the Black Box Theater and a jazz club,” he said. “We want to have a fish market and a meat market and flower shop, book stores and an outdoor concert area.”


While Romano admitted his investment company’s 75 acres, which has the option to grow to 100, will eventually be worth “a heckuva lot of money,” the inventory of land is a “new frontier” for restaurant ideas and a chance for him to add personal intrinsic value.


“It makes me feel good to ... give them an opportunity to achieve their dreams,” he said. 


Contact Ron Ruggless at [email protected]
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Follow him on Twitter: @RonRuggless.