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Is Janesville 'Chainsville?' City licenses show more independent than chain restaurants

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Jim Leute
June 14, 2014

JANESVILLE—It's often said Janesville has more restaurants within a mile of Interstate 90/39 than any other interchange between Chicago and Minneapolis.

Whether that's true is open for debate.

So, too, is the state of the restaurant scene in Janesville, where few topics generate more interest.

Almost every mention of a restaurant in a news story on The Gazette's website generates responses that generally fall into one of two camps:

-- “It sure would be nice to have a Red Lobster, Chipotle Mexican Grill or (fill in franchise here)."

-- “Why can't this community support the local, independent restaurants?”

Often dubbed “Chainsville,” Janesville certainly has its share of chain or franchise restaurants. It's also no secret that independent restaurants sometimes struggle here.

A review of city restaurant licenses, however, shows the moniker might not be appropriate.

About 54 percent of the city's 131 traditional restaurants are considered independent operations. The remaining 46 percent are chain or franchise restaurants.

For the review, The Gazette defined a restaurant as a place where a meal is ordered, prepared and served for consumption on the premises.

CONCENTRATION

Look at a map of the city's restaurants, and it's readily apparent chains and franchises go where the people go.

In Janesville, that's the heavily commercial northeast side that includes Milton Avenue and the Interstate intersections with highways 26 and 14.

Independent restaurants are clustered downtown.

“Higher traffic counts certainly drive restaurant volume, and that's what the corporates are looking for,” said Brian Bergquist, a professor in the UW-Stout School of Hospitality Leadership.

Since coming to Janesville in 2001 to lead Forward Janesville, John Beckord has been certain of one thing.

“We're a community that likes to eat out,” he said. “I've heard it said many times that the sheer number of restaurants and dining options within a mile of the Interstate is the single most of any interchange between Chicago and Minneapolis.

“I don't know if that's true, but I've heard it so many times that it seems to be taken as true.”

Beckord said the northeast quadrant is not the exclusive domain of chain or franchise restaurants.

He also believes the “Chainsville” moniker might be misplaced.

“It's really remarkable the number of independent restaurants we have,” he said. “I could eat at one of them every day and not hit them all, so there apparently is customer support to keep them in business.”

TURF WARS

Two independent Janesville restaurateurs were asked separately for their perspective on the city's restaurant scene.

“I absolutely think Janesville loves its chains,” said John Sheck, co-owner of Aglio Ristorante, which recently moved to a larger facility in downtown Janesville.

Jim Elsberry is a long-time local restaurateur who wants to open a supper club downtown.

He answered almost identically, instead substituting “franchises” to replace Sheck's “chains.”

Both believe Janesville is becoming more supportive of independent restaurants.

They said Janesville typically has been a working-class community whose diners found comfort in the predictability that chain and franchise restaurants offer.

“The corporates can come in and plaster their name all over the city on radio and TV because of their huge buying power,” Sheck said. “People just go for the comfort of that rather than step outside their circle and take a chance on something less known.

“I think we're starting to see a little more support for locally owned restaurants, and we're certainly seeing it at Aglio. I just think Janesville will always be somewhat of a struggle for independents.”

Elsberry, too, senses a resurgence, particularly in downtown Janesville.

“This is not a slam on General Motors or union folks, but there was a real working class mentality that seemed easily swayed by something they saw on TV about the best possible deal,” he said. “There are some good franchises, but most of them are average at best.

“I'm in love with downtown, and I think it can work.”

Bergquist said the union theory as it relates to restaurant decisions isn't unique to Janesville.

“The theory was that independents weren't union and chains were, but the data for most chains indicates they aren't union, either, yet they still get that support,” Bergquist said.

Beckord has heard the theory, too. He's not necessarily a subscriber.

“In that context, it is said that a group is interested in how much food they can buy for as little money as possible,” he said. “The other group, it is said, is not interested in that. Instead, they're interested in how high the quality is and what kind of experience they have.

“There certainly is a group of people committed to supporting local, independent restaurants. It's been argued that there is another group that's more inclined to playing it safe.”

RESOURCES

Bergquist said chains and franchises typically have more of one thing than independents: money.

“The whole thing really boils down to who has the deeper pockets,” he said. “The local chain store makes a contribution to corporate that pays for massive advertising campaigns.

“What do we see every night on TV between 9 p.m. and 11 p.m.? Ads for the corporate restaurants.”

The war, he said, isn't fought in the kitchen. It's waged in marketing departments.

A local restaurateur talks about his word-of-mouth advertising or plans next week's newspaper ad or social media Tweet.

In the meantime, the corporate operations are planning the multimillion-dollar campaigns they will launch next fall.

“It's the deep-pocket syndrome,” Bergquist said. “The corporates have very knowledgeable marketing staffs with millions of dollars to spend.

“They've got standardized menus and training that are difficult to compete with.”

Scott Acker knows all about the benefits of being a franchise restaurant.

Last year, he opened Quaker Steak and Lube near the Interstate 90/Highway 14 intersection. The Janesville store is Acker's third. He also owns Quaker Steaks in Middleton and New Berlin.

“Yes, we do have all the things the franchise offers, but we're held to a higher level,” Acker said, noting that the parent company typically exerts a fair amount of control over local operations.

Franchises that don't meet corporate standards reflect poorly on the rest of the stores, he said

Acker was on duty a couple of Saturdays ago when a Quaker Steak corporate health inspector showed up at the New Berlin restaurant at 10 a.m.

“My mouth dropped open,” he said. “You don't expect that at 10 a.m. on a Saturday morning.

“The county inspectors are tough, but ours are tougher.”

For the record, the restaurant easily passed.

“It works both ways,” he said. “We give it back to them just as much as they give it to us.

“If you fall down, they will pull your franchise, and it's a free restaurant for them.”

DECADE OF EXPERIENCE

Chad and Anita Karl are the former owners of the Speakeasy, the restaurant at 19 S. High St. that's now home to Aglio.

The Karls believe independent restaurants can succeed in Janesville.

Theirs did for nearly 10 years.

“My business really took off in 2007,” she said. “We didn't rely on the same crowd or same groups to come in every night.

“Janesville supported us well, and we brought people into the area.”

The Karls believe independent restaurants struggle to compete with corporate restaurants.

“As an independent, we are all told to run the place like a franchise, develop those systems,” she said. “It's tough when you're also the host, the bartender or the server when one of them doesn't show up.

“The structure would be nice, but the mom and pops just don't have the resources. Maybe the Olive Garden can do separate checks for your group of 20. We can't.”

Chad Karl believes the city could be more helpful to downtown restaurants. Long involved in a variety of downtown initiatives, he ticks off a series of battles over issues such as signs, sprinkler systems and utilities under a deck.

“I expected a true public-private partnership downtown, but I just haven't seen the reciprocation,” he said. “I don't necessarily expect the city to support my business, but I don't expect them to impede it, either.

“The word on the street is why buy or open downtown when there's much more help on Milton Avenue or in an industrial park?”

OPENINGS AND CLOSINGS

The Karls didn't close the Speakeasy because of competition from corporate restaurants.

Instead, Anita Karl said the time was right to focus on her family rather than a restaurant.

The couple bought and renovated a downtown building and ran a restaurant and banquet facility to the best of their ability, they said.

“We worked against the grain, and it took time,” Anita Karl said. “People thought I was pretentious.

“But there are no real expectations at a franchise, other than that the burger will be exactly the same as the one in Plano (Texas).”

Beckord and Bergquist said restaurants—independents and franchises—close for a variety of reasons.

“It's a tough business,” Beckord said. “Everybody thinks they can open a restaurant if they have a box of recipes.

“There's no question that chains have a system, are better financed, have brand marketing and controls and training and consistency across the board. Some independents do, too, and do it very well, but it's not a given.”

Beckord said restaurants will play an important role in the redevelopment of downtown Janesville.

They typically are independent operations and offer a cluster that makes the downtown a destination.

“We're certainly starting to see more variety,” he said. “Some people want Thai, Mediterranean, German, and those are niches that could be filled.”

During any given period, four out of five independent restaurants close, Bergquist estimated. During the same time, roughly 3.75 corporate restaurants close.

“There's always a great hue and cry when an independent restaurant closes, but not so much when a chain restaurant does,” he said. “It's kind of like when Wal-Mart comes in and local grocery and hardware stores close. Wal-Mart gets blamed, but it's possible many of those grocery and hardware stores were on the edge anyway.”

QUALITY, SERVICE AND VALUE

While quality, service and value are important to any business, they're especially critical in determining whether a restaurant lives or dies.

Sheck, who co-owns Aglio with Amy Johnson, said quality, service and value are the basics that restaurants compete upon every day.

“Amy and I get up every day, go to work, go home to sleep and do it all the next day,” he said. “It's tough because we don't have layers of managers below us.

“We've struggled, but we got lucky and earned a good reputation. We've been able to develop more of a personal relationship with our guests, and that's huge. We're a little more free to develop relationships rather than just sticking to the script.”

Anita Karl said independents need to take pride in the their food and price it accordingly.

“The mom and pops need to realize it's OK to charge $10 for a fish fry and stop undercutting each other,” she said. “We heard all the time that our prices were too high, but the comment cards from the out-of-towners said we offered great value.”

Sheck said restaurants typically take two years to recover their opening costs.

Mastering the basics helps make that happen, he said.

“I think independents can do well here,” he said. “We get all classes of people here, and we've been lucky.

“We've had great support from Janesville, but I don't think the chains will ever leave.”

Quaker Steak & Lube also has received a warm reception, Acker said.

The restaurant routinely posts sales in the top 20 of the 65 Quaker Steaks around the country. On any given day, it can be the top Wisconsin location, Acker said.

“Price and value is what I worry about everyday,” Acker said. “When I first looked at Janesville, I saw an economic recovery in place, and I saw a place where people kept their lawns nice, much nicer than any other community where I have a casual dining restaurant.

“Janesville is a unique place with nice people who appreciate our restaurant.”



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