It seems like a great time to be a restaurateur: In March, Americans spent more money eating out vs. at grocery stores for the first time since the government started tracking the stats in 1992. And the restaurant sector remains hot, with investors still searching for the "next Chipotle" (CMG) and currently loving names like Papa John's (PZZA), Sonic (SONC) and Zoe's Kitchen (ZOES).
Steve DiFillippo, founder of Davio's Northern Italian Steakhouse, might look at this environment as an opportunity to take his concept public. While small, with only seven east coast locations (and LA coming in 2016), Davio's has annual revenue of $50 million and the kind of culture -- quality, handmade food and a hyper attentiveness to guests and employees -- that today's discriminating diners demand. In addition to Davio's, DiFillippo also owns Yankee Trader Seafood, which sells food products in over 4,000 stores and on QVC, producing annual revenue of $20 million. He says business is booming.
"I don't want to jinx it [but] everyone is in a pretty good mood right now...people are spending," he says. "People are doing well, at least our guests are. They seem to be happy and doing well."
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Still, DiFillippo says he has no ambitions for an IPO, even saying he will "never" do it out of fear of losing control of his business.
"When you go public, they push you to open like crazy -- it's all about growth and growth," he says. "A lot of times restaurants do bad deals; it's not about the brand anymore, it's about the investor. I could stop right now but I want to keep growing -- and grow the way I want to grow."
As discussed in the accompanying video and his book It's All About the Guest, DiFillippo's recipe for success comes down to three key things:
- Take care of your people: A restaurant would be nothing without its customers and superior customer service begins with a restaurant’s employees. Davio's 900 employees receive higher-than-average wages and benefits, including healthcare and paid vacations, very rare for the industry. DiFillippo tends to hire people who do some kind of charity work, believing that people who are philanthropic by nature will also care about his guests. He notes with pride that five of the original 15 employees from when the first Davio's restaurant opened in Boston 30 years ago are still with the company today. "We take care of our people, that's the difference between us and the guy down the street," he says.
- Stay Fresh or Die: At lot has changed in the past 30 years, particularly eating habits. While we're still overweight as a nation, more Americans are focused on healthier faire, as well as more specific concerns like eating gluten free. Davio's has a full gluten-free menu, including pastas and pizzas. The restaurants serve Brandt Beef, which is grass fed and hormone free, makes all the deserts and pastas in house, and even notes on the menu that water used in its ice and coffee is purified with Premium Aqua Health Filter System.
- Get Out of the Kitchen: DiFillippo has no formal office space, declaring “my restaurant is my office.” And he believes the business can only improve when he’s on location greeting customers, working with his employees, and fielding phone calls. Constantly working the front lines is how this entrepreneur ensures the business grows while maintaining brand integrity, which is easier said than done and harder as the company expands.
DiFillippo says it's no coincidence that a lot of this sounds like the philosophy that has made Shake Shack founder Danny Meyer a cult hero of sorts (and very wealthy): "Danny copied me," he deadpans, noting he and Meyer are friends who started their respective businesses in the same year.
So who else does DiFillippo think is "doing it right" in the food world? And what does he think about Yelp? Watch the accompanying video to find out and bon appetit.