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BAR LOUIE IS A CULT FAVORITE AMONG NIGHT OWLS

By Jesse Serwer

Much like Buffalo Wild Wings, Logan’s Roadhouse or TGI Friday’s, Bar Louie benefits from what could be called a Jekyll-and-Hyde personality. On weekend afternoons it is a modestly priced casual dining destination with a kids’ menu and a family atmosphere. After work on weekdays and at night on the weekends, it is a popular watering hole for the post-college and singles crowds. But just when its competitors stop, typically, about 11 p.m. to midnight, Bar Louie is only getting started. The chain stays open and serves meals as late as 4 a.m. in some locations.

“Keeping our kitchen open late is a big part of our brand,” said Scott Ward, vice president of operations for Restaurants-America (formerly Restaurant Development Group), which launched the concept in Chicago in 1991. “We gained a sort of cult status in Chicago for being open until 4 a.m. during the week and selling our entire menu until last call. At the time, that was kind of unheard of, and it still is in a lot of markets.”

Another thing separating Bar Louie from the beer-and-grub pack is its drinks menu, which features a revolving selection of distinctive martinis as well as mojitos and other “designer” spirits. Meanwhile, stylish art and photography and signature mosaic tiles create an urbane, sophisticated atmosphere.

“Bar Louie has created more of an upscale environment compared to what is traditionally found within casual dining,” said Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant consulting firm. “They’ve reported that 50 percent of their revenues come from adult beverages, so clearly they focus more on adults than family dining, yet they position themselves very nicely in neighborhoods. I don’t see them as a real upscale, New York-style bar that attracts baby boomers or high incomes, but they’re doing well with the 25-to-45, lower-to-middle-income crowd.”

Despite the popularity of the original Bar Louie, in Chicago’s River North neighborhood, it took seven years before Restaurants-America co-founders Roger Greenfield and Ted Kasemir, among whose other concepts are Red Star Tavern and Bluepoint Fish Club, opened a second Chicago unit. But when that store, in the up-and-coming Bucktown neighborhood, proved successful in 1998, they began rolling out Bar Louie units throughout the Chicago area, primarily in cost-effective “second man in” locations.

In 2001 Greenfield and Kasemir opened the first Bar Louie outside Illinois, in Denver; today the chain operates in five Midwestern states as well as Florida, Kentucky, Pennsylvania and the District of Columbia. Plans call for significant expansion into the Northeast, Southwest and West Coast within the next four years, and restaurants in such major cities as Las Vegas and Philadelphia are already in development.

Most of this growth will be franchise-driven, says Ward. “We’ll seed a few more markets, but we’re done exploding the brand ourselves,” he said. “We’ve said that we’d do 50 [units] ourselves. After this year [Restaurants-America] will have 42 stores, and we’ve got six or seven on the books for next year. We’ve got 22 franchisees already signed on to open stores over the next four years, and that’s going to grow immensely.”

The first two franchisee-operated Bar Louie units opened in Columbus, Ohio, and St. John, Ind., last year. In December a franchisee will be opening Bar Louie’s first Arizona restaurant, across the street from the new University of Phoenix Stadium, in Glendale, site of the 2008 Super Bowl.

“I think [Bar Louie] could easily reach 250 units in the U.S.,” said Marc Offit, CEO of Sierra Realty Advisors, which handles leasing for the chain. “It’s a very franchisable concept. It’s not too complex, but the menu has some very good signature items. It works in everything from malls to lifestyle centers to entertainment projects to downtown urban settings. They’re also restricting their franchising to people who have food and beverage experience, which is smart.”

Prospective franchisees must have at least seven years’ experience owning and operating a restaurant or bar, liquid assets of $400,000 and a net worth of $750,000. Startup costs run between $400,000 and $700,000, according to the franchisee prospectus, and sales per store average about $2.5 million.

Management projects systemwide net sales of some $60 million for this year, up from $37 million last year and $30 million in 2005. Same-store sales through the first six months of this year were up 4.7 percent over the year-ago half, says Ward.

Sites that measure between 2,500 and 7,000 square feet are most desirable, says Ward, though the original River North bar measures just 1,200 square feet, and the newly opened Bar Louie at Gallery Place, in Washington, is a whopping 11,300 square feet. Though the cost-effective locations drove Bar Louie’s early growth, nearly all the newly opened restaurants have been in vanilla boxes.

“We like being in entertainment districts where people go to have fun and drink and can go from one bar to the other,” Greenfield said. “During the weekdays, we’re more of what I call a ‘tweener’ than an actual destination,” he said. “Customers are hitting us before they’re meeting other people for dinner or after seeing a movie. On the weekends, they’ll come here before they go to a club or to get a bite to eat on their way home from a club.”