Growth Chains: Havana CentralGrowth Chains: Havana Central

by paul Frumkin

HEADQUARTERS: New York

MARKET SEGMENT: casual, full-service Cuban/Latin cuisine
NO. OF UNITS: 2 operating with 2 more in development

SYSTEMWIDE SALES: 
$14 million

AVERAGE CHECK: $25 per person, $48.77 per check

METHOD OF GROWTH: debt and equity financing 

LEADERSHIP: Jeremy Merrin, founder and CEO; Randy Talbot, VP operations; Stanley Licairac, executive chef 

YEAR FOUNDED: 2002

COMPETITION: Cuba Libre Restaurant & Rum Bar

TARGET MARKETS: high-traffic urban, office and shopping areas

WEBSITE: www.havanacentral.com



Travel to Cuba continues to present some obstacles for American tourists wishing to experience the culture of the Caribbean nation, but restaurateur Jeremy Merrin has plans to make the island’s cuisine more easily accessible to the U.S. marketplace.


The founder and chief executive of Havana Central, the Cuban-themed restaurant concept with two locations in Manhattan, expects to double the size of his growing full-service chain in 2012 with the opening of two new outlets in the New York suburbs, each expected to generate between $5 million and $6 million annually.


Following that, he said he plans to add two or three new restaurants a year. He is currently scouting future sites in Miami, southern Florida and Washington, D.C.


“I always envisioned this as being a chain,” Merrin said of the concept he launched in 2002. “I’d like to do for Cuban and Latin food what P.F. Chang’s did for Asian. I see this as being the premier large-format Latin chain.”


Merrin operates two high-volume locations — one in Times Square and one on Manhattan’s Upper West Side near Columbia University. A third 235-seat location is set to open in April in the new mixed-use Ridge Hill complex in nearby Westchester County, while a fourth with 350 seats is slated to debut later in 2012 in Long Island’s Roosevelt Field mall.


By 2013 Merrin expects that the company will nearly double its annual systemwide sales to about $26 million.


While Havana Central has evolved over the past decade to become an upscale-casual concept, Merrin originally envisioned it as being “a kind of Cuban McDonald’s, something like Pollo Tropical.” However, New York-based consultant Arlene Spiegel of Arlene Spiegel & Associates worked to convince him otherwise. 


“She wanted it to be a much richer experience,” Merrin said.


When the first Havana Central was opened in a 1,700-square-foot space near Union Square Park in Manhattan, “We didn’t really know whether it would be QSR, sit down, fast casual,” Spiegel said. “We didn’t know whether it would have an alcohol component. The first unit was a laboratory.”


The company closed the small, inaugural Union Square operation last year to focus on the larger operations and expansion.


The Union Square operation — which initially offered counter service at lunch and full service at night — eventually morphed into a complete full-service restaurant featuring signature drinks like Mojitos and sangrías. The continuing evolution also saw “a lot of ongoing culinary development,” she said.


The goal, however, was always to engineer a menu that could be scaled up for chain expansion, Merrin said. 


Executive chef Stanley Licairac said the “98-percent scratch-made menu” stays away from eccentric or complicated dishes that can’t be prepared in a chain format or are out of character “with the authenticity Caribbean food is known for. 


“The margins are good [food cost runs 25 percent], it’s well-value-engineered, and recipes have been developed to take on the road,” he said. “It’s a challenge to maintain consistency, but we’ve had 10 years of practice.”


Besides focusing on the flavor and presentation of classic Cuban dishes, Spiegel designed a menu that made multiple uses of nearly every ingredient. 


“You have to ask how many times you use an ingredient, and is it justified being in the inventory,” she said. “Basically, one-third of the dishes must have an authentic signature, one-third have to be somewhat more recognizable, and the final third must use the existing ingredients. There is no waste.”


Popular dishes include picadillo, or savory Cuban ground beef; ropa vieja, braised beef with peppers and onions; and rabbi encendido, or oxtail stew. Licairac also estimated that the two Manhattan restaurants sell about 11,000 empanadas a week. The average all-day per-person check runs about $25.


In addition, signature Mojitos and sangrías also are popular. Mojitos — which can be prepared with a wide selection of rums — generate 50 percent of all alcoholic-beverage sales. Sangrías are made by marinating fruit in the wines for at least 24 hours before serving.


Havana Central’s decor is “pre-revolutionary,” as reflected in the use of palms trees, local artwork and posters, and burnt-orange walls. Live music is offered five nights a week.


“We try to provide a fully immersive environment,” Merrin said. “We want people to feel like they’re on vacation for a couple of hours.” 


Contact Paul Frumkin at [email protected]
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