Restaurant franchisees bite at quick, quality idea
By Andrew Gomes
Advertiser Staff Writer
It takes a lot to get a former corporate restaurant lawyer and semiretired entrepreneur excited about a new restaurant.
Jeff Widener • The Honolulu Advertiser
It also takes a lot to amaze a restaurant operator who started in the business at age 13 washing dishes.
Scott Rolles, left, and Roger Mercier are developing the Puck Express chain in Hawai'i. The team opened one of the "quick-casual" restaurants at Ward Entertainment Centre and will open another at the Aston Waikiki Beach Hotel.
But five years after becoming unlikely partners, the two Hawai'i restaurateurs, Roger Mercier, 64, and Scott Rolles, 44, have found new passion expanding their latest endeavor — Wolfgang Puck Express.
It's not hard to see their enthusiasm, tapping into the fastest-growing segment of the industry, "quick-casual" dining, which analysts expect will expand roughly 20 percent this year and become a $50 billion niche nationwide in a decade.
"We think it's the next generation of family dining," said Paul Westra, managing director and senior restaurant analyst for SG Cowen Securities Corp. in New York. "Wolfgang Puck Express is the heart of the quick-casual experience."
Wolfgang Puck Worldwide Inc. earlier this year awarded Mercier and Rolles development rights for Puck Express in Hawai'i and the Lake Tahoe and Mammoth Lake areas of California. Colorado is a possible addition.
The pair, among 19 Puck Express regional developers, will have opened the first three Puck Expresses in the next few weeks as part of a nationwide expansion for San Francisco-based Wolfgang Puck Worldwide.
Mercier and Rolles opened their first Puck Express at Ward Entertainment Centre in February. Their second is scheduled to open next week at the recently renovated Aston Waikiki Beach Hotel, followed by Heavenly Valley in Lake Tahoe on Jan. 2.
Steve Gratz, vice president of Puck Express operations at Wolfgang Puck Worldwide, called the restaurants the initial step in an ambitious rollout of 300 franchised Puck Expresses over five years.
Rolles and Mercier are required to open five Puck Expresses within three years. Rolles said it's hard to say how many more they may open, because it depends on finding the right location. Still, it is apparent they are eager for more.
"This niche is what's happening in food service," Rolles said.
Food industry research and consulting firm Technomic Inc. in Chicago defines quick-casual, or fast-casual, restaurants as offering self service or limited service, $7 to $9 average checks, attractive decor and innovative foods prepared to order and suited to more sophisticated tastes.
Puck Express fits the bill with menu items such as butternut squash soup, $8 salads and signature pizza with toppings that include leeks, goat cheese and pesto.
There are few widely recognized local restaurants in the niche. Onjin's Cafe, Cha-Cha-Cha Salsaria, Kakaako Kitchen and Paradise Cafe are some that hit or come closest to the mark.
On the Mainland, there are many large quick-casual chains, including Panera Bread, Baja Fresh Mexican Grill, Boston Market, Souplantation, Fazoli's and Chipotle. Several are owned by fast-food giants McDonald's and Wendy's.
HMSHost helped develop Puck Express, of which there were an initial 19, mostly in airports or supermarkets and operated by Wolfgang Puck Worldwide or single-restaurant licensees such as HMSHost.
According to Technomic, the quick-casual segment represents 2 percent of restaurant sales, but is expanding three to four times faster than full-service and fast-food segments.
Westra of SG Cowen anticipates the segment will surpass sales of full-service family dining, which includes TGI Friday's and Chili's, in 10 years because quick-casuals can offer better food in less time at an equal or better cost.
"It has a competitive advantage over full-service operators," he said.
One downside is that Puck Expresses are expensive to open, costing between $500,000 and $900,000. That's not cheap for a casual, small (1,500- to 2,500-square-foot) restaurant.
But the cost is easier to justify, Rolles said, when you consider that the prototypical Puck Express does $1.5 million in annual sales, with better locations pulling in twice as much.
Gratz said he expects the Ward location to be in the upper range of sales per square foot among franchised stores.
"We've had nothing but great reviews," he said. "We're really proud of our relationship with Roger and Scott. They really share the passion for the food and service that the concept attains."
Mercier and Rolles are among five members of what Wolfgang Puck Worldwide calls the "founding group" of area franchisees.
Donald A. Karas, Puck Express chairman, said the company tried to forge franchise relationships with only the best in the restaurant business.
Rolles has ownership stakes in five Waikiki restaurants: Chuck's Steak House, established by his dad; Chuck's Cellar, Chief's Hut, Sunset Terrace and Joe's Hamburger Grill.
Mercier was general counsel at Denny's for 18 years, came out of retirement to become chief executive of Marie Callender's and later opened several Carl's Jr. restaurants in Hawai'i and Nevada.
Five years ago, Mercier acquired 10 Hawai'i restaurants from bankrupt Transpacific Corp., including Yum Yum Tree, Monterey Bay Canners and Jolly Roger. Mercier sold most, but retained a few, including one in the Outrigger Waikiki on the Beach hotel next to Chuck's.
As the competitor next door, Rolles offered to buy out Mercier's Outrigger restaurant to
expand Chuck's. But Mercier persuaded Rolles to form a partnership and transform the tired Monterey Bay Canners into Sunset Terrace.
That restaurant will close in April, but the partners see an immensely broader opportunity in Puck Express.
"If you can do the same volume out of a smaller space, you win — and that's what these places are designed to do," Rolles said.
Mercier added: "I'm excited. My assessment was that (Puck Express) had the best-tasting food of any of these quick-service establishments."
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
