Fast Company

Independent Restaurant Groups Band Together to Cook Off the Sour Economy

kokopelliWhen does free Wi-Fi, a selection of $5 entrées, and hip décor fail to draw a throng of eager diners? When it's a mom-and-pop eatery owned and operated by locals, for locals (or anyone who wants to feel like a local). The problem faced by many of these earnest endeavors is that despite trying various promotions to attract customers, the way the big chains do, they don't have the resources to reach them. Combine that lack of resources with overall tightening of consumers' wallets and it's a wonder any independent restaurants are still open for business.

But some are beating the odds.

Kokopelli Mexican Cantina, for one. The family-owned restaurant has been serving southwestern fare in Prairie Village, Kansas, for just over five years. At the end of 2009, in the midst of a lingering recession, Kevin Lyman says they will have an 8% increase over last year. "We are up 18% total spent from 2007," he adds. What's their secret sauce? "I owe all this to our rewards program through Original Restaurants," he declares.

Lyman's restaurant is part of a network of locally owned establishments called KC (Kansas City) Originals. The umbrella organization Original Restaurants was started in 2007 by Kermit Austin, an entrepreneur with years of experience developing rewards programs for restaurants and retailers. By developing a software program called PowerCard, the organization helps grow groups of locally owned restaurants in smaller metro areas through marketing programs, Rewards Card Programs, and customer satisfaction management. Independents can't (and don't want to) deliver consistently in terms of standard menus, pricing, and décor like the large chains. But by banding together under the Original Restaurants program, they can take advantage of different ways to attract and retain loyal customers the way the chains do.

The program also helps position some of the restaurants to stay competitive when the chains move in, says Austin. Most see an increase in the bottom line, Austin says: "The bump averages between 2% and 5%. Restaurants that take advantage of the email tools, birthday postcards, etc., get a better return, but even at 2%, it builds business."

KC originalsThe success of Kansas City Originals, spurred the creation of others in Birmingham, Louisville, St. Louis, the Twin Cities, and Columbia, SC. Austin says the six Originals now account for 147,000 Rewards Card members pouring $3.5M per month into a network of 212 locally owned restaurants. Expansion plans include launching groups in Charlotte and Phoenix in January. "We'll go in with a city-wide group and as it grows, we'll split them in to neighborhood groups," he explains.

Ultimately, Austin says the goal of Original Restaurants is to raise awareness. "These restaurateurs capture each community's flavor and unique personality. They stimulate the economy, support local charity initiatives, and offer employment opportunities within local communities. Not to mention these groups are passionate about food. Diners get great food, and a great deal. It's a win-win for everyone."

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5 Comments

  • Jon Holmquist

    Great article and good to hear that banding together works so well. I am a firm believer of working together. As owner of Edgemaster Mobile Sharpening a cutlery service, we work best with owner operated restaurants but I have been wondering how to find out what percentage of successful eating establishments use a professional sharpening service. If anyone has an answer to this question, I would sure appreciate your help. You can get in touch with me through my web site www.edgemasterfranchising.com or my facebook posting. Thanks, Jon A. Holmquist.

  • Jon Holmquist

    Great article and good to hear that banding together works so well. I am a firm believer of working together. As owner of Edgemaster Mobile Sharpening a cutlery service, we work best with owner operated restaurants but I have been wondering how to find out what percentage of successful eating establishments use a professional sharpening service. If anyone has an answer to this question, I would sure appreciate your help. You can get in touch with me through my web site www.edgemasterfranchising.com or my facebook posting. Thanks, Jon A. Holmquist.

  • Jon Holmquist

    Great article and good to hear that banding together works so well. I am a firm believer of working together. As owner of Edgemaster Mobile Sharpening a cutlery service, we work best with owner operated restaurants but I have been wondering how to find out what percentage of successful eating establishments use a professional sharpening service. If anyone has an answer to this question, I would sure appreciate your help. You can get in touch with me through my web site www.edgemasterfranchising.com or my facebook posting. Thanks, Jon A. Holmquist.

  • David Osedach

    How about offering bring your own wine with no corkerage? Nouveau Beaujolais comes out Thursday. We'll be there!