There is no right way to start a restaurant. This is the story of two successes, the Bread Oven in downtown Washington and Nizam's in a shopping center in Vienna, and another suburban ethnic restaurant that has fallen on hard times.
One was started by a French emigre, another by a Turkish chef brought to the United States under contract, and the third by an Asian family. But aside from the foreign flavor common to the three, the restaurants are very different.
Christian Domergue started with money. A former manager of Vie de France, he sold his interest in the bakery to invest in The Bread Oven.
"I asked Arthur Andersen & Co. [a major accounting firm] to work with me on a cash flow statement that makes sense," said Domergue. "I knew exactly what to borrow to offset total cost and enough working capital so if we were delayed or things were not going the way we thought they should, there would be enough for the rent, enough for the payroll."
Domergue went to C. Jackson Ritchie at Union First (now First American) Bank. "I think he was impressed by the bread company's record, by our serious statement and by our board of directors who were serious people," said Domergue.
Domergue began the Bread Oven on 19th Street near M Street in 1978 with approximately $500,000, including a $250,000 bank loan. "Thanks to a very good relation we have with this bank and a large European bank, everything has worked very well," Domergue said. Last month he paid off the original loan.
The Bread Oven also developed a good relationship with its customers. The early morning smell of bread bakinglures lawyers and other office dwellers to breakfast at the restaurant-bakery combination. The medium-priced, cheerily attractive French restaurant is also packed for lunch and dinner.
Subsequently Domergue opened LaMiche in Bethesda where Positano's once was situated, and a retail and wholesale bakery in Rockville. Last week Domergue and Gerard Maitrejean, a partner only in the single operation, opened another Bread Oven in a shopping center in the affluent Spring Valley section of northwest Washington. Domergue's growing empire grosses more than $2 million and employs more than 250.
Now Domergue is trying to put together a coordinated management team to run the restaurants and maintain consistency in the cuisine.
There have been surprises. One was legal fees. "You cannot make a move in this country without lawyers," he said. "You need good lawyers, and good lawyers are very expensive."
"To make a restaurant does not necessarily mean just to assemble a chef and a maitre d'," he said. "The spirit, the philosophy of the business is very important." Another key has been a stable and very good staff, he said.
The beginnings of Nizam's, a popular Turkish restaurant in Fairfax County were more modest.
Nizam Ozgur arrived in the United States in 1971 after being recruited by Ceasar's Forum in McLean to work as a chef there. He installed himself and six cooks he brought with him from Turkey in a house that the restaurant had rented for them.
Ozgur began work as a chef's assistant in Turkey when he was 14, following his father and oldest brother who were both chefs. The family lived in Bolu, a region famous for its chefs.
Four years ago, with only $35,000, Ozgur and his wife became restaurant owners by purchasing a former coffee shop in the Village Green Shopping Center in Vienna.
"We bought the place on Saturday and opened on Monday," said Ozgur's wife Diana. The low price reflected the coffee shop's low volume; it had been closed in the evening. The previous owner was so sick of the business that when he left he left a pot of food on the stove, said Diana Ozgur.
To buy the restaurant, the Ozgurs put up $5,000 of their own money, borrowed $15,000 from Virginia National Bank and financed the rest through the previous owner.
During the first year or so that the restaurant was open, a bank vice president responsible for the loan came to dinner every few months, looking around and counting the house. "He said the first couple of months he was worried," said Ozgur.
But Nizam's made it, and Ozgur hopes to be able to pay off the note a year early. Recently he has had offers as high as $100,000 for his small restaurant.
A specialty restaurant that serves Turkish dishes, the 55-seat restaurant attracts diners from D.C. and Baltimore as well as from the affluent Virginia suburbs that surround it. "I watch all the time," said Ozgur. "The food has to be all the time the same thing, or if you come a second time maybe it can be better. Always up, not down."
The Ozgurs also watch costs. Little by little, they covered the formica surfaces of the coffee shop (although in the kitchen, behind what was the counter, the restaurant's previous identity is clear). Ozgur comparison-shops and bargains over prices to keep menu prices down, he said. The couple also shops specials on meats and vegetables at a nearby Magruder's grocery and has a vegetable stand operator raise six different varieties of eggplant for Nizam's.
The average lunch bill at Nizam's is $3 to $6, with the average dinner tab about $15, said Ozgur. "Your prices have to be reasonable. A lot of people are bargaining now before they go to a restaurant," he said. "They'll call four or five places."
The story of the third restaurant is less happy.
The members of one family who operate this tiny carryout shop and restaurant in a suburban shopping area just hope to be able to sell it some day. They talked about thier problems on the condition they not be identified.
Notwithstanding the family's 18 years experience in the business, their latest venture has been a disappointment. Locked into a lease that holds them responsible if a successor operation fails and with the family's house pledged as collateral on a loan, they are unhappy to stay, frightened to leave. pPart of the problem was getting into a business arrangement they did not understand. They weren't aware of the terms of the lease and believed that the loan was at a lower rate of interest than it is.
And location has been a serious problem. They moved into a location that requires an auto trip to reach at a time when gasoline prices were curtailing auto travel. They opened in a shopping area where business around them was falling off, so customers who might have stopped in for lunch or supper were disappearing.
On top of all this, they have had to contend with inflation. Wages haven't been a problem. The couple and their children are the entire staff of the seven-day-a-week operation. But food prices have risen and been hard to pass along.