Diverging Brands

Carlson's decision to dump its upscale restaurant division scarcely bothers its founder

Royce Ring attributes much of his success to DNA. Not the genetic material he inherited from his parents, but a kind of sloganeering process he applies to all his restaurant projects. Ring says DNA (a strained acronym derived from "differentiators, nuances and attitudes") is a process of reducing a restaurant to its core elements by encapsulating it in a series of no more than six words or phrases--sexy little idioms that capture the operation's vim and soul.

To illustrate how DNA works, Ring relates an incident that took place at Samba Room, the Cuban/Caribbean-inspired restaurant and bar that was among Ring's first restaurant creations to utilize DNA. Ring says he equipped Samba Room with expensive, handsome brushed-aluminum ashtrays forged into the shape of a triangle. The ashtrays were so attractive they kept disappearing. The vanishing was acute on the restaurant's patio, where virtually every one of the metal ashtrays was swiped. Yet instead of ordering reinforcements, Samba Room's general manager consulted the restaurant's DNA to brainstorm a solution. That solution came in the form of the mahogany cigar boxes from Samba's cigar lounge, which were filled with white beach sand and placed on the patio tables. Ring wouldn't share what the DNA statement said about Samba Room, but presumably it mentioned some Caribbean theme--hence this kind of island ash receptacle, which won't end up in someone's purse.

"This DNA empowers people in a way that I've never seen before," Ring says, contrasting it with corporate mission statements. "I don't remember the mission statement for Carlson Restaurants, and I was an officer of the company."

Royce Ring, seated, and Russell Hayward left the corporate life to play with DNA.
Mark Graham
Royce Ring, seated, and Russell Hayward left the corporate life to play with DNA.

But he was more than just a vice president at Carlson, owner of the T.G.I. Friday's chain. Ring engineered Carlson's leap into upscale dining with its Emerging Brands, or E-Brands, division. Before leaving his post heading E-Brands in October to start his own company with strategic branding guru and DNA inventor Russell Hayward, Ring created, developed and/or acquired some 24 restaurants in little more than four and a half years. Now his work is being dissolved and scattered, sold off piecemeal by Carlson as it retrenches in its Friday's roots.

In addition to Samba Room, Ring conceived Timpano Italian Chophouse, Mignon, Fishbowl and zen den for Carlson. Yet perhaps Ring's most controversial move was acquiring the restaurants created by Dallas restaurant stars Stephan Pyles and Michael Cox. "That was the first thing which established from the get-go that we were going to play the game at that level: the temple of food, the quality and the chef orientation," says Ring of the acquisition of Star Canyon, AquaKnox and Taqueria Cañonita in 1998.

At first glance it's puzzling that Carlson would jettison so much investment in money, effort and DNA after just five years. Carlson executives were unavailable for comment, but the company did proffer a couple of explanatory statements. "After evaluating our long-term strategy we made the decision to prioritize our growth opportunities, specifically focusing on the Friday's core brands, both domestic and international," read a statement attributed to Carlson Restaurants Worldwide Chief Executive Officer Wally Doolin. "We are also proceeding with an aggressive growth strategy for Pick up Stix to ensure the brand becomes a competitive leader within the quick-casual segment."

Pick up Stix is the 58-unit fast-casual "Americanized Chinese food" concept Carlson swallowed this past June. Carlson plans to add 95 franchised and corporate Pick up Stix over the next three years.

"It came as a shock," Ring says. "I had no idea that Carlson would sell the whole thing. I knew that there were some pet or lead dogs. There were clearly some concepts like Timpano or Samba Room that I knew Carlson was very excited about, that I knew they were going to run hard and continue doing those."

Ring wasn't the only one taken aback. "It's kind of strange, I guess, in the fact that I know all the people that were involved in creating all of that, and I'd say that 95 percent of them are all gone now," says Michael Cox, who is now general manager of H.E. Butt's Central Market in Plano. "I think once you take that away...the people that were the creative pieces behind it, once you pull that away, you just don't have that passion to drive those concepts."

Originally, Carlson had planned to promiscuously replicate the Pyles/Cox concepts. Taqueria Cañonita would be the most prolific, followed by Star Canyon, and to a much lesser extent, AquaKnox. As it turns out, just three Taqueria Cañonitas made it out of the E-Brands chute (Las Vegas in addition to Plano and Las Colinas), as well as two more Star Canyons (Las Vegas and Austin in addition to Dallas). AquaKnox fared the worst of the three, representing the only casualty in the E-Brands experiment. It seems from the start Carlson couldn't figure out how to make it work. Or maybe it was Dallas that couldn't figure it out. "AquaKnox probably would have been better served if we had opened it in New York and Los Angeles," Ring says. "AquaKnox was probably too refined for this market."

Cox thinks that Carlson just plain didn't understand AquaKnox, and probably had inflated expectations for it. "From the very beginning there was a higher expectation than what Stephan and I had intended from a financial standpoint," he says. "They started tinkering with it and suggesting things here and there...and I think once we went down that road, it started to destroy the original concept."

Ironically, the seeds of the AquaKnox failure may bear fruit with Ring's new restaurant venture called Triple R Group. After Carlson announced it was dismantling E-Brands, Ring secured the rights to the name zen den, the concept that sprouted from the corpse of AquaKnox last April. He's folded zen den into the slim portfolio of his fledgling company. Triple R Group currently has two concepts it is readying to hatch. Tom Tom Noodle House, a fast-casual 10-buck-per-mouth Asian restaurant, should open in the West Village in mid-April. In late May, the pair will open a "highly produced" Eastern Bloc-style lounge called Club Nikita underneath Taco Diner in the same development. Hayward says Triple R will zero in on Asian cuisine with plans to dot the Dallas area with up to six Tom Tom Noodle Houses before spreading to other cities. Triple R will use the zen den name for a midscale Asian restaurant it plans to launch after Tom Tom secures a toehold.

So far, the only restaurants to have left Carlson's auction block are a pair of Taqueria Cañonitas, which were sold to M Crowd Chief Executive Officer Mico Rodriguez, operator of Mi Cocina and Taco Diner restaurants, among others.

There was talk that Ring and Hayward might pick up the nine Samba Rooms from Carlson, a move that Ring says isn't seriously being considered at this juncture. "We're not going to run out and buy Samba Room just 'cause it's available and sacrifice this," he says, referring to his Triple R plans. "It would be a huge distraction."

Indeed. Such a move might even dilute Triple R and conflict with the reasons why Ring abandoned his post at Carlson to launch his company in the first place. Ring says that starting fresh "when it's your deal" makes all the difference in the world. It's the difference between dragging around corporate chains and wearing newly formed chains of DNA.

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