The end of the $35 hamburger

Peter Fowler is never satisfied. The president and chief executive officer of SIR Corp. (it stands for Service Inspired Restaurants) says restaurant owners need to constantly scrutinize what they're doing and be prepared to reinvent themselves.

The restaurant business is very theatrical, says Mr. Fowler, whose 47 restaurants in greater Toronto and beyond include chains like Jack Astor's, Canyon Creek and Alice Fazooli's, as well as the upscale Far Niente, Four and Petit Four Bakery and the casual Loose Moose Tap & Grill.

"You have to be constantly aware of what's going on around you, to be picking up on the nuances," says Mr. Fowler. "We call it managing or orchestrating the party."

Even though consumers have shifted away from fine dining, thanks to the recession, that doesn't mean you can't be busy or popular, says Mr. Fowler – but you might have to rethink what you're delivering. "The days of overcharging are gone, so be very cautious that way," he says. "The $35 hamburger is a thing of the past."

Another way to stay on top in a highly competitive business is to refurbish and renew.

"As restaurants age, the guest space ages with them," says Mr. Fowler. Business falls off over time, and new customers are not drawn in. "So what you have to do is go back and reposition the restaurant, try and keep as many of the guests as possible and gather up new ones at the younger end."

When he revamped Far Niente in 2006, the Bay Street restaurant was 10 years old and had a dated interior. The lunch business was big, but the dinner trade was non-existent because the space was very stark and open, says Mr. Fowler. At night, it didn't feel comfortable.

"We shifted the menu, decor, service style, wine and beverage offerings and the music style all in one fell swoop," he says. The move took six months to plan and two weeks to execute. "I think we picked up a 15-per-cent sales increase and garnered a dinner business that we didn't have before, so it was a successful shift. We look for anywhere between an 8- to 15-per-cent increase when we do a reposition."

To draw female customers, Far Niente was made cozier and booths were added. Also, "we took the food from being artistically presented –frou-frou, as we call it in the business – to being more about substance than the presentation," he said.

The room is also "more full," he says, meaning it is no longer a quiet restaurant in which guests "pull" into their table and talk low, explains Mr. Fowler. "There was no energy, no vibe. Because it's more crowded now, it's more exciting. The music level is higher, people talk a little louder and they're more engaged."

He turns to another of his properties, Jack Astor's. "It's very noisy and energetic, the staff are bopping around in T-shirts and there are numerous chalkboards. There's a feeling, 'Boy, this could be fun.' However, there's a negative feeling too, as in, 'Oh-oh, this could be bad. The food and service can't be good because they're not serious about what they're doing.'"

The wonderful thing is, if you execute well on the food and service in this atmosphere, he says, it's even more effective because the guest's expectations were lower. "It's a little bit about delivering the unexpected."

When Mr. Fowler opened the second Jack Astor's in Richmond Hill, he says he had to stretch his finances, working with suppliers and doing all he could to finance the spot. He cited the establishment of a successful lunch as critical to staying afloat.

"If you can build lunch, you can build happy hour; if you can build happy hour, you can build dinner," he says. "The challenge with lunch is, if you don't deliver, the guest is not going to come back.

"So we opened up and it was busier than we thought, and we were having trouble getting the food out on time. Rather than put up a sign, '15 minutes or it's free,' I said we're not going to do that because it sets up a negative expectation and guests are watching the time waiting to get the free meal. What we did was, if the food took longer than 15 minutes, we'd go up to the table and say, 'Sorry, the food is taking longer than it should, so we're buying.'"

That was difficult, he says, because they didn't have much money at the time. He would call the restaurant and find out how much food was given away each day – say, $1,500 – and ask them to try harder to meet the 15-minute deadline.

"Gradually it [the losses]got smaller and smaller. We didn't compromise the guest experience for the bottom line. I knew that if we didn't drive the guest experience at the front end, I wouldn't get it at the tail end.

"So I swallowed hard and took it in the neck. You do those kind of things. It was scary, I can tell you."