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CAMILLE’S TEAM LAUNCHES CONEY BEACH CHAIN

By Maura K. Ammenheuser

David Rutkauskas is having so much fun he is practically giddy.

On a family vacation in the Ozarks, Rutkauskas does not seem to mind talking about his growing restaurant franchise business. “Every day is Saturday,” he said laughing.

The reason for his good cheer is evident: Camille’s Sidewalk Café, the sandwich shop he launched and named for his wife, has grown from one 250-square-foot unit in the Woodland Hills Mall, Tulsa, Okla., in 1996, into a chain of 106 units. An additional 900 franchise agreements are in the works, many of these in such far-flung regions as Central and South America and the Middle East.

Besides sandwiches, the cafés offer salads, soups, smoothies and other fare, with a health slant. Eschewing the industry term “fast-casual” — heaven forbid any connection in anyone’s mind to fast, fatty food — Rutkauskas prefers the label “quick-casual.”

Parent company Beautiful Brands International now opens one Camille’s unit per week, Rutkauskas says, and this spring the company signed contracts to open units on college campuses and in airports as well as in shopping centers. Rutkauskas says he anticipates sales for 2008 will hit $100 million.

The chain was launched in a “dead” end of Woodland Hills Mall, far from the food court. At the time, he and his wife ran Casual Athlete, a small sporting goods chain with a store at the mall. They spent plenty of time in malls, he recalls. “We’d eat this disgusting food,” he said. Camille Rutkauskas envisioned a peaceful little café serving fresh, healthy fare. “She wanted to distinguish us from the typical food court vendor,” he said.

The couple sank all of their $25,000 in savings into that first restaurant (in a less-than-ideal location near a phone bank under the escalators) and borrowed against their house and cars. The day the restaurant opened, they were broke. But they remained hopeful. “We knew the soccer moms would find us,” David Rutkauskas said. And indeed they did, lured by the fresh food, the cappuccinos (this was before Starbucks was a household name) and the 400 square feet of seating outside the kiosk, at tables graced with fresh flowers.

“The service you got from David and Camille,” said Karen Bross, longtime office manager at Woodland Hills, recalling that this café on the opposite end of the center from the food court offered a relaxing break for shoppers. “They worked it. They catered. Their food is good food.”

(Today the Woodland Hills Camille’s unit is run by a franchisee and posts about $500,000 a year in sales.)

Now the couple is at work on a second chain, called Coney Beach — a gourmet hot dog and hamburger chain with a 1970s California beach theme. Each of the 1,500-to-3,000-square-foot shops will contain a boardwalk and cork floors. They will be serving up Angus burgers, “loaded fries” (aptly named, considering the chili, cheese and bacon bits heaped on them) and beer and wine. “It’s an indulgent place,” acknowledged David Rutkauskas.

They expect to open the first Coney Beach unit, in Tulsa, next month. As of March Beautiful Brands had already sold 12 Coney Beach franchises. Among the future locations are Atlanta, Dallas, Houston, Kansas City, Mo., Oklahoma City and St. Louis, according to the company Web site. The company plans to open 20 Coney Beach units this year, 20 more next year and 100 in 2009. The ideal locations would be near a Lowe’s or a Super Wal-Mart, the company says.

Meanwhile, Beautiful Brands is working on three more restaurant concepts: a fast-casual chicken restaurant, a salad chain and a third concept that David Rutkauskas won’t talk about except to say, “It’s too hot.” None have names yet.

Beautiful Brands first develops a name, logo and theme, then comes up with the menu, though David Rutkauskas insists that good food is “a given.” But yummy fare is not enough to build a business, he says. “It’s 50 percent vibe.” Nearly all the future units will be franchised, he says, and many will open in shopping centers of various types.

Neal Shannon, SCLS, senior leasing rep at AIG Baker Shopping Center Properties, calls Camille’s “a neat, neat concept.” AIG Baker runs Central Texas Marketplace, a 556,000-square-foot lifestyle center in Waco, Texas, where Camille’s has had a freestanding café since September 2004. “They did a really nice build-out,” Shannon said. “It’s light, it’s trendy, it’s inviting — it’s fresh, like the food is.” The food is also “almost like art on a plate,” he said.

The chain likes patio seating, and at Tulsa Promenade, a 925,000-square-foot mall where a Camille’s opened about five years ago, the unit offers a “parklike” atmosphere despite its completely indoor location, says Kelly Wilkerson, the mall’s marketing director.

Shannon says Camille’s competes with Panera Bread Company, and in Waco with Roly Poly Sandwiches. At Tulsa Promenade the competitors are the other sit-down restaurants and, in the food court, a Subway and a salad eatery, says Wilkerson.

David Rutkauskas would not name any competitors and even downplayed any rivalry with Panera, which gets mentioned frequently in press coverage of Camille’s. There is no comparison between the two, he insists, pointing to Panera’s bigger size: 6,000 square feet versus 2,500, with 1,027 units, $828 million in 2006 revenue and an in-house bread bakery.

As for co-tenants, David Rutkauskas cites a range of desired neighbors. “Camille and I love Target,” he said. They also like Bath & Body Works, Chico’s, Gap, Nordstrom and Saks. For Camille’s, they want to avoid Wal-Mart, they say, though the retail giant is just fine for the more down-market Coney Beach.

David Rutkauskas seems unfazed about having 900 Camille’s units in the pipeline simultaneously, while bringing Coney Beach to fruition and promising three more concepts. He says the idea is for Beautiful Brands to pepper a market with a menu of restaurants that will not cannibalize one another; their target demographics differ, he says. Camille’s remains upscale, for example, catering to workingwomen at lunchtime.

“What I like about the way they do things is the type of people they bring in,” said Shannon. That would be mostly affluent, fashion-conscious shoppers. “It helps attract the type of customer base [the center targets]. The whole total experience makes you willing to pay more for that sandwich or soup or wrap.”

Coney Beach, on the other hand, is campy, kitschy and likely to appeal to men, teens and families, and to do a strong lunch and dinner business, says David Rutkauskas. He envisions it in lifestyle centers, but also in college towns and blue-collar neighborhoods.

The other Beautiful Brands concepts will fit various demographics, and this means that Beautiful Brands will have a restaurant for a variety of centers in a market. Shannon figures Beautiful Brands can handle the aggressive growth, because the company takes care to run tests in major markets and to tweak things before rolling out nationwide. “They’ve got a winner with Camille’s,” Shannon said. “Hopefully, they’ll have a winner with Coney Beach.”

But David Rutkauskas is clearly motivated at least as much by entrepreneurial compulsion as by geographic strategy. “I’m driven by my heart,” he said. “I get passionate about things I do. I do things one way: full steam ahead.”

Asked how the company will manage such growth, he replied, “I went out and hired a lot of people smarter than me.”

And of course, Camille’s revenue is funding Coney Beach’s rollout. “You can’t become hugely successful without taking a major risk,” Rutkauskas said. “I really have no fear. I don’t. I never have.”