Having Words With: Ed Doherty, Doherty EnterprisesHaving Words With: Ed Doherty, Doherty Enterprises

On July 31, Allendale, N.J.-based Doherty Enterprises Inc. acquired 38 Applebee’s Neighborhood Grill & Bar outlets in Florida and Georgia from Duluth, Ga.-based Gator Apple LLC. The purchase brought the number of Doherty Enterprise’s Applebee’s outlets to an even 100 and substantially bolstered the company’s portfolio, which also includes 32 Panera Bread branches, two Chevys Fresh Mex restaurants, one Noodles & Company, three The Shannon Rose Irish Pubs and one Spuntino Wine Bar & Italian Tapas.

Doherty Enterprises, which generated $338.4 million in revenues for the year ended December 2012, according to Nation’s Restaurant News’ annual Top 100 report on U.S. sales and growth trends, is on target to reach $500 million in sales in the near future, founder and chief executive Ed Doherty said. The company recently debuted its first Noodles & Company restaurant on Long Island, N.Y., and has plans to open more than 20 across Long Island.

Doherty sat down to discuss future plans with NRN.

Tell us about the recent acquisitions.

The history of the company since we opened our first two Applebee’s in 1993 has been to run great restaurants in the New Jersey, Connecticut and New York area. But we always looked outside of the area to see if there were any opportunities. When the Florida and Georgia Applebee’s became available, we immediately entered into negotiations to buy them. We have great confidence in the Applebee’s brand. We also received the exclusive development rights to build 10 to 15 more [units] in Florida over the next five to seven years.

What are your goals for the company?

We’re going to continue to develop Applebee’s as well as another 15 Paneras in our territory. We’re planning to develop 20 or so Noodles on Long Island, and our own concepts, Shannon Rose in Florida and Spuntino in the New York and New Jersey area. In addition, we expect to spend between $12 million and $15 million remodeling the Applebee’s units in Florida. They’re in desperate need of remodeling.

Any other acquisitions planned?

We don’t have any plans right now. We won’t be looking at acquisitions for another 12 to 18 months.

With this acquisition, you have 140 restaurants and 9,500 employees. Is it difficult to absorb such a big acquisition?

We are very well capitalized, … and we’ve developed a strong team over the past 15 years. We’re moving three people to Florida in senior leadership positions, and we’ll add a number of support positions in accounting, real estate and construction. We have 14 people in human resources and training.

We have a vision to be the best foodservice company in the communities we serve, and have people who work for us who believe in the culture and allow us to be successful. We are able to run high average unit volumes because of the quality of the people we employ. Management turnover is less than 15 percent per year, and crew turnover is only about 50 percent annually. We have good, long-tenured people who understand their jobs.

How will the addition of 2,500 new employees affect your company’s approach to health care reform?

Prior to the passage of the [Patient Protection and Affordable Care Act], we allowed all employees who worked 30 hours or more [each week] to participate in our management health care program. We contributed 60 percent toward costs. So we’re prepared for it. We made the decision that we wouldn’t reduce anybody’s hours. We don’t know what the impact of the ACA is yet, but we believe we have an obligation to offer health care to our employees.

Would you say that the casual-dining segment is rebounding?

Yeah, I think it is. You can see that by the number of new brands in the marketplace. As it relates to more mature brands, as long as you reinvest in the business and continue to develop it, there will always be a spot for it. People like to eat in casual-dining restaurants. It’s a nice environment, very family focused. The bottom line is you have to take care of the guest. The good brands will get stronger; the weak brands will go away.

Contact Paul Frumkin at [email protected].
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