Half a century ago, America”™s two top dining choices were Howard Johnson”™s and the counter at Woolworth”™s.
You turned in. You parked. You ordered a ham salad on pumpernickel and an egg cream from a guy wearing a bowtie.
“That”™s the way America ate out in 1960,” said Gerry Houlihan. “You had HoJo”™s and you had Woolworth”™s. Then McDonald”™s came along and changed all that.
“Today the restaurant industry is more competitive than ever,” he said. “More than 50 percent are franchises or chains or a combination of both. It is more difficult for a mom-and-pop to make it today. But I think it”™s important to remember franchises are also mom-and-pops that provide local jobs.”
Houlihan offered his take ”“ good and bad ”“ on the recent town of Eastchester ban on so-called “fast-casual dining,” such as at national outfits like Panera Bread, with three restaurants in the county already and, until the ban, reportedly with its eye on Eastchester. His bona fides include 19 years as owner of Daniel”™s, a restaurant located for 10 years on the Post Road in Eastchester and for another nine years at the Crestwood train station. His second career is real estate, both as a licensed real estate salesman for Houlihan & O”™Malley and as president of Houlihan Business Brokers, specializing in restaurant sales and consulting. His office is in Bronxville. “I know the mom-and-pops and I know the franchises,” he said.
His first point is perhaps the most salient.
“Eastchester has essentially always had this ban,” he said.
On his desk was the proof.
The previous town code nixes: “A type of eating establishment where food and beverages are ordered and purchased over counters (without table service by waiters or waitresses) in a ready to consume state and the design or method of operation includes one or both of the following: 1) food and beverages usually served in edible, plastic, paper or other disposable containers; and 2) there are two or more cashier stations.”
“Clearly,” said Houlihan, “this was designed to keep the likes of McDonald”™s, Taco Bell and Burger King from setting up shop. A town like Eastchester was laid out at the turn of the last century and it really has not changed; it”™s not designed to handle the volume of fast-food traffic.” Eastchester”™s layout is pinned to a central business district on north/south-running Route 22 ”“ “Post Road” locally ”“ with leafy neighborhoods to the east and west.
But a new world of food options has risen and Eastchester, according to Town Board legislation that just permanently banned so-called fast-casual chains with 15 or more outlets, “has increasingly been confronted with inquiries about a variety of food-service establishments, including but not limited to: bakeries, catering, fast-food, quick casual, carry out, full-service, cafeterias, buffets, bars and hybrids of these uses.”
The board said further, “The town enjoys a pleasant character and superior quality of life for its approximately 19,500 residents.” Such a sentiment is not abstract, but references the town”™s Comprehensive Plan ”“ a blueprint upon which road decisions, deck sizes and federal grants are pegged ”“ which “strives to preserve and strengthen the town”™s pattern of existing residential land use, while simultaneously supporting and encouraging compatible commercial land uses.” The board added italics to emphasize the word “compatible.”
Compatibility does not, however, necessarily translate to profitability. “About 40 percent of the mom-and-pop restaurants close in the first three years,” Houlihan said. “The failure rate for franchises is much lower. For Dunkin”™ Donuts it is lower than 5 percent. A McDonald”™s closing is extremely, extremely rare. These are very well-run organizations. Most are owned by multiple operators who are well capitalized. The franchises have real track records and what you will net is a known. This is a large part of the industry right now, franchises with more than 15 stores, which are now banned. It is important to remember they have more than 15 stores because they are good at what they do.”
Houlihan said Eastchester”™s original ban makes sense, but is less enthusiastic about the new ban. “With fast food you get the drive-through experience, which Eastchester clearly does not want in any way, shape or form,” he said. “But by knocking out anyone with more than 15 stores, Eastchester is knocking out a lot of good operators. And Eastchester”™s loss will be another town”™s gain, because these franchises will move to the next town up the pike that will have them. I understand what Eastchester did, but I think it”™s a little too broad.”
Houlihan said parking remains a big issue for many towns and villages, including Eastchester. “The residents do not want parking structures,” he said. “They placed one by the train station in Scarsdale ”“ down in the valley ”“ and it took about 10 years to get it approved. The bottom line is: These structures are extremely unpopular, mostly for aesthetic reasons.”
Unstated in the ban is that local eateries cannot compete with the economy of scale of the franchises.
“Local people can go head to head with the franchises, but you”™ve got to be good,” Houlihan said. “In Bronxville, we had Slave to the Grind, a coffee shop. When Starbuck”™s opened, people had a heart attack. But Slave does well; it”™s a well-run operation that attracts a local, local crowd.” Whether franchised or homemade, “You need to be well-funded and really on top of your game to compete in the restaurant world.”
