(bright music) - From fast food to fine dining, it seems like restaurants are constantly popping up and shutting down in Central Illinois.

But why is the dining business so unpredictable?

We're talking to two of the most successful restaurateurs in our area and we're getting their take on the difficult job of opening and maintaining thriving restaurants.

Hugh Higgins is the owner of Hearth Restaurants in Peoria Heights.

Ron Helms is the president of Alexander's Steakhouse in Peoria and Normal.

Good to see you, gentlemen.

Thanks for coming in.

- Thanks for having us.

- Thank you, Mark.

- Well, you guys have had a ton of experience in this business.

I wanna kind of get your resumes, so to speak.

Hugh, why don't we start with you?

- I guess it will certainly, in comparison, I'm the new kid on the block.

Hearth Restaurants been open, it'll be 12 years this fall.

But prior to that, I cooked from when I was 15 to 25.

I left the restaurant industry to start a family.

But because my food background, I was able to capture a job in the beverage alcohol industry.

So I was selling wine and spirits to all the restaurants here in this Tri-County area.

Back in those days, Ron was one of my customers, so I was calling on Ron and Steve Shaw with the Mercedes Group since 1982.

And so I had 32 years in the beverage alcohol industry.

And this project, Hearth Restaurant, was something I'd always wanted to do.

So at 58 years of age, I said, "If I don't do it now, I never will."

So I went all chips in and took the big leap, and I'm really glad I did.

I'm tired, but I'm happy.

- All right.

And Ron, you've been in quite a long time.

Tell us about your experience.

- Well, I first moved to Peoria in 1981 and got married September 26th.

Started working for Vonachen's Old Place as a waiter the week following that.

I've been with Mercedes restaurants ever since.

Started as a waiter and worked my way up for six months at VOP, and then I became a assistant manager trainee at the location, which is now Alexander's Steakhouse.

It was actually, at that time, was Veo Parmesana Spaghetti and Steak Warehouse.

We tried to do a spaghetti thing down there.

And then I went back to VOP as an assistant manager for a while, moved down to Springfield, ran a restaurant we had down there, transitioned it into Alexander's Steakhouse at about 40 years ago, 41 years ago as things were happening with the one here in Peoria.

Then I moved to Normal and opened up that one 40 years ago, and then came back to Peoria and became the manager again at Vonachen's Old Place for a period of time and had quintuplets.

- [Mark] Yeah.

- And shortly after that, I went down to Alexander's again and became the manager there, then supervising and moved my way up at the opportunities as David came along.

And now I'm president of the company.

And Mr.

Shaw, as Hugh alluded to, is one of my business partners, and he still comes in and tells me what to do every day.

So... (Mark laughs) - So you've had experience doing a lot of different jobs over the years.

When Hugh told you he was gonna get into the business, did you try and talk him out of it?

- Oh yeah, oh yeah.

I said, "Are you kidding me?"

(Mark laughs) But, you know, Hugh saw how much everybody works, and, you know, that's the thing about restaurant people.

We're the most optimistic people in the world.

No matter where somebody's failed, you think, "Oh, I can make a go of it."

And we have the opportunity to put our passion and our, you know, work ethic.

Hugh and I are roughly the same age, and we're people who work 7/24.

Unfortunately, the younger people are the ones that are not doing that.

- Sure.

Well, Hugh, I mean, I'm sure you did your homework going into this.

You didn't just go in blindly.

What did surprise you once you did start?

Was there an aspect of it that you maybe hadn't thought of or something that was harder than you thought it might be?

- I'd say maybe the volatility of pricing and how there's so many inconsistencies and a seasonality to it as well, where you can, you know, print out a menu and say, "Okay, I think I can make a living at these prices and go."

And then end of November comes, and it's like, "Oh my gosh, those beef prices go through the roof.

How can I continue to have a diminishing margin and work with that?"

So pricing is challenging.

I would say, also the volatility of staffing.

For a lot of people, that's been probably one of the most difficult things to overcome.

I'm fortunate we've been able to overcome that for the most part.

I've got a lot of great staff that's been with me seven, eight, 12 years, and we're just coming up on 12 years.

So I don't have a lot of turnover, but I see that as a consistent pitfall in the industry, wouldn't you say, Ron?

- Yeah, it's always been a situation, especially with like waitstaff.

When the new place opens up, they take the opportunity to jump over there because they know they're gonna be just swamped and they're gonna make a lot of money initially off.

But the people who have been with you for a long time, and we've got people who've been with us for many, many years as well, it's just an opportunity for us to treat them like family.

And we don't lose a whole lot of people because of that.

Typically, it's life changes that our group loses people to, but the restaurant industry is kind of a cutthroat spot where opening up new places or the people do tend to jump there because they think they're gonna get paid a little bit more.

And... But we always say, "The grass isn't always greener on the other side."

- Well, speaking of staffing, I know that's just one of the issues that COVID presented.

And I'm sure the restaurant industry hasn't been the same since then.

Can you both tell us a little bit about some of the trials and tribulations you went through and how things have changed?

- (sighs) Well, COVID, well, you sure everybody had to get creative.

Here, your doors are closed.

You can do carry out only, and that's it.

And we had to get really creative with that, as everyone did.

Some of us are better suited to that type of industry and others.

I remember having a round table meeting at your place, Ron, and there were different restaurateurs from all different walks.

And I remember the conversations with Stefan Zeller from Avanti's.

Avanti's is a great Peoria Area, you know, flagship.

They are really well-suited for carryout, and their business has always had a good foundation of that.

But once COD hit, they were really set and ready for it, and they always did it very well.

Post-COVID, the dining didn't come back as strong for 'em.

People got really used to it.

And he still survives and they have a great thriving business, but carryout was something that he was really well-suited for.

I have a place that serves sea scallops and duck breasts and rack of lamb at night, and that stuff doesn't carry so well.

- You don't wanna throw that in the microwave at home.

- Ideally, no.

And its best served right off of a plate.

So we had to do other things, some more casual things.

I'd say one of the more successful one was a loaf of bread, a jug of wine and (indistinct).

So I took all the wine on my wine list, which I publish the prices on my website.

You can have any bottle of wine for half the price with a carryout dinner.

But on Tuesdays, I'm gonna make a special soup and I'm gonna pick out a certain wine, and that will go with that soup.

And my son became a pretty good baker in those days.

And so we got a rustic loaf of bread, a bottle of wine, and a quart of soup.

So it was a meal for two.

And we set that up for 32 bucks.

And it's pretty good to get a really nice meal and a bottle of wine for 32 bucks.

So it got to the point where we were saying, "Honey, you know, on your way home, stop the car if they got the soup thing."

So I could get a little bit of that business, keep some alcohol moving, I had inventory that's sitting on the shelf.

So that helped.

And it also kept me connected with my customers so that maybe I could see them on Thursday, Friday or Saturday for that nicer meal.

- Sure.

- That was pretty challenging times.

- Ron, tell us how it affected Alexander's.

- Oh, it was brutal.

We had to, like you said, we went from being... We had just had our busiest year ever in the year before.

January, February, March we're just cranking along, and the next thing you know, you're totally shut down.

And we had thousands and thousands of dollars of inventory, of fresh meat that we had sitting on the shelves.

And so we had to, like you said, develop a plan of take home meals.

So we came up with a cook your own at home package where we made salads and we made, we gave people baked potatoes to take home and to cook their own steaks.

And we survived doing that for a couple weeks, and then we just kind of slowed down for a little bit, and then we were able to open up outside.

- Right.

- So then we scrambled.

We have a deck on one portion of our restaurant, we have a parking lot area that's fairly vast, and we had a little gazebo area on another part.

So we were seating people in two different areas outside and running food inside and making sure that people had to walk around a certain table pattern to go to the salad bar and stay six feet apart.

And, you know, it taught you to be very, very nimble and thinking on your feet about how to survive this part.

But it just... Ever since COD, our costs have just gone skyrocketing.

And it's, for a while, you couldn't get certain foods.

For a while, you couldn't get... For a while, you couldn't get employees to show up.

They were making more money sitting at home than they were to come in and work.

So I think, you know, personally, I was working every single day of the week just to try to keep things moving along.

And at that time, we were also running Famous Dave's Barbecue here and in Bloomington, and we were transitioning that as well, trying to generate sales.

We were taking food down to... We would take phone orders down to Springfield and to Champagne on certain nights and go to our Alexander's Steakhouse parking lots and sell feast for twos and feast for fours to people, just so that we were keeping the people at Famous Dave's going.

And again, COVID just killed our business.

And not only ours, but so many other mom and pop places throughout Central Illinois.

But we went from having six restaurants, we're down to two.

And it's just... It's been the hardest five years of being in the business ever since COVID than prior to that put together.

- And yet after COVID, I mean, we people are still trying to open restaurants, whether it's a mom and pop type restaurant or a franchise.

And you've been a part of franchises before.

What's the difference between, say, a mom and pop just say, "Hey, we wanna open a sub place" or saying, "Hey, I wanna a Subway franchise"?

- Well, again, with a franchise, you're paying that company for their food recipes, for their image, for their training, but you pay for it.

You pay at least a 5% royalty fee every single dollar that you bring in.

We also had to pay a couple percent for marketing and a couple percent for other items that were proprietary to Famous Dave's.

So you're running a restaurant and you've got 9% to 10% already coming off every dollar that has to go to them.

So we have to do a better job of running day by day than we did with our Alexander's Steakhouse to try to make a dollar.

And as I talked to you yesterday a little bit about, you know, people don't understand that in the restaurant business, if we make anywhere between 5 cents to 8 cents per dollar brought in, that's being successful.

- That's a goal.

- That blows my mind.

- Yeah, 5 cents.

We're looking for a nickel on every dollar we bring in.

- Wow.

- And when you can't do that on a regular basis, just like our Famous Dave's here in Peoria, we were losing so much money, it didn't make sense to stay open.

We had to close.

It cost me less money to pay the rent than it did to have people working.

And, yeah, you eventually go out of business if things aren't, the pan balance isn't there for you as far as costs.

Hugh alluded to it.

Our costs are ridiculous on fresh meat right now.

- Oh, it's bad.

And it's not even the holidays.

- Yeah.

- And we know it's gonna get worse.

- And it's not like you can just jack up the prices.

- [Ron] Oh.

- I mean, some people might pay it, but a lot of people won't.

- Right.

- You'll get to that point where you'll price yourself out.

- [Ron] Yeah.

- [Hugh] It's a challenge.

- We are paying right now, I don't know what Hugh's paying for his stuff, but my ribeyes that I bought yesterday are costing me 60% more than I paid for a year ago.

- [Mark] Wow.

- So I can't take my ribeye steaks on my menu and charge 60% more.

- Right.

- People will go, "No way in the world am I gonna pay $70, $80 a steak dinner at Alexander's."

We're not Chicago, and that's the thing there.

We are very price point sensitive to try to stay in business.

- Hugh, like I said, at the top of the show, we've seen businesses come and go, and it seems to be a constant.

I know, you know, recently we've had some chain restaurants like the Kentucky Fried Chicken franchise that's no longer in Central Illinois.

I don't know what happened in that particular aspect.

But people are still going out to eat.

We know that.

There's plenty of places to choose from.

If someone wants to start a restaurant, open a franchise, what do they need to know about the market to be successful?

- Whew.

Well, when I get that figured out, I'll be successful, I guess.

(group laughing) That's the million dollar question.

That's very, very true.

- Or what do they need to prepare for?

- Well, you have to be prepared to have a recognizable concept that hopefully can resonate.

You can't be too specialized.

You have to have some broad market appeal.

You have to be willing to, you know, grind out five, six, seven days a week of work, have people that are willing to shoulder some of those responsibilities with you.

Otherwise, you'll work yourself to death.

You really have to just do a lot of homework.

And there's so many other costs that come in that can be surprises, and they're hard to translate into a menu.

It comes off at the end when, you know, it's like, "Oh, 5 cents, 10 cents a dollar, that's what we hope to come out."

But you have to factor in, a place like me, I have linen service.

Okay, great.

It's nice to have linen napkins and, you know, double cloth linen covers on my tables.

It looks all pretty and very nice.

Okay, so what's linen gonna cost you?

How much is it, 400 a week?

500 a week?

It used to be maybe 384.

Now I'm at 480 a week.

So, you know, I'm wrapping up $18,000, $19,000 a year just in linen service fees.

And now utilities.

Everybody's talking, it was just in the paper recently.

It was quite an interview with all of us.

Several restaurateurs were questions like, "How are you doing this?"

It's just amazing the number of levels of little add-ons that keep nicking away at that bottom, nicking away at that bottom.

Insurance.

I just got another, you know, 30% increase on insurance.

We had legislation a year ago where now we have paid time off leave act for employees.

So for every 40 hours that they work, they're entitled to one hour of time off at their regular wages, and that is available to them on an accrual basis or on an annual basis.

And when that hit, you know, last year and we didn't work it hard, we just knew it was due, at the end of December, I had a big number of checks that I had to cut for people.

So this year, we're working at it differently.

You know, I'm doing it as it goes.

When people take time off, I say, "Hey, I'm throwing six hours, I'm giving you this."

It is just a lot of bits and pieces that erode what little profit there is.

So, do your homework, be prepared for surprises, and pay attention to your invoices on a regular basis.

You have to price check all the time.

Have a good clean inventory, pay great attention to your inventory, and make sure that you're being efficient.

- Ron, anything you wanna add to that?

- Well, as Hugh alluded to, there's so many surprises.

The insurance costs increases 30% for him.

I'm gonna have a 20% one coming up.

It's because of what's going on in the world that we can't control.

The utility costs, we can't control that.

All of a sudden, we're getting a huge bill.

We pay $15,000 a month to air condition a location.

And then you have issues like a walk-in goes down, a condenser goes down, or we just had to replace a whole heating and air conditioning unit at $35,000 costs.

You better have a huge bank account sitting aside to cover those costs because they just come along.

Things break down.

And it's just, you know, the restaurant business is constant.

And so these pieces of equipment are working just as much as we are, 7/24.

And if you don't have 'em, you can't be in business 'cause your food won't be there to be kept properly.

- Wow.

One of the things that I think helped both of you is, you know, you're both fine dining establishments and you have customer loyalty, which not everyone has, especially if you're in the fast food industry.

But you've had people that have been coming to your restaurants forever, generations in your case, probably.

- Oh, yeah.

- And tell us a little bit about customer service and the way you treat people in and how that is a benefit to your business.

- Hmm, you're the man of experience.

(Ron laughs) I'll let you go first.

- First off, it's my house.

I welcome you to the house.

And when I'm in there, I try to talk to every single table.

It's not always possible, but I want to know what the problems are that you're having so I can fix it right then and there.

I don't want you to go home and stew about it and tell me I had a bad steak.

We very rarely have problems because we do talk to people.

And if you're there, I'm gonna fix it.

You know, that's our job.

You've come to me to enjoy your evening, whether it's a birthday party or an anniversary, or just, you know, homecoming going on now.

We want you to have a great time because if you don't have a great time, you're gonna go to other places.

- [Mark] Yeah.

- And, yeah, we do... And we'd really make a big deal of kids being in our restaurant because they do become your next level of guest.

And if you don't take care of them now, they're gonna go somewhere else.

And that's the thing about restaurants, is that they have somewhat of a finite time span, it seems like, 30, 40, 50 years.

And there's been some great restaurants in town that we even ran.

The Grill on Fulton downtown Vonachen's Old Place, they were great restaurants.

People loved them.

People loved what we did, but they had their time span, and it just happens.

- Yeah.

It's... It's so important, I think, for us.

We're the face of our business.

It's great to have, you know, employees, managers, or a bartender that have been there for several years and people love the consistency of seeing the same staff and seeing the same bartender and having the same service because you learn what people like.

So when the person comes in and you give 'em a hello and you can call them by name, it's like the cheers theme, you know?

You wanna go where everybody knows your name.

So you learn the name, you greet them, you welcome them, you thank them for coming.

There's a lot of choices out there.

"Thank you for coming."

"Thank you for spending time with us."

"Thanks for choosing us."

You know that this one likes tank orangutan and she wants Tito's and club soda tall with a lemon, not a lime.

You know, when you get those little teeny details for a person, they feel very special.

And it's just a little bit level of service that helps.

I had a book just recently that was given to me by a customer.

It's called "Unreasonable Hospitality."

And it was a great book showcasing some of the levels of things you can do to make customers feel special.

And this place was based in Manhattan, and they would actually, you know, greet the customer.

They'd come in and say, "Oh, do you have any trouble parking?"

"Oh, we're (indistinct)."

"Where are you at?"

So they would check maybe an hour and a half later and say, "Everything going okay?"

and just say, "Do you enough time in the meter?"

And they'd say, "What are you driving?"

And they'd run out and they'd put money in the meter to keep somebody so they could spend a little bit more time and spend a little bit more money.

- Sure.

- You know?

I recently got, you know, bunch of extra umbrellas.

You know, you come in, it's a beautiful day, and then the rain comes.

And it's like, "Oh my gosh, I don't have an umbrella."

"Here.

Here's mine, take it."

I said, "What, really?"

I said, "Just bring it back when you come next time."

"Thanks a lot."

- People remember that.

- Yeah.

- We've only got a few minutes left, but we've talked about a lot of negatives, but let's talk about the positives.

What do you love about the business.

Ron?

- I love getting to know people.

I mean, a lot of people know me because of having the quintuplets 38 years ago.

People always ask how old the kids are, and I always joke about how old do you think they should be?

So that's always interesting, the timeframe there.

But it is.

It's the people that come back time and time again or the groups that come in.

I always wanna know what brings you here.

You know, there's a group of 12 guys.

Are they here with Caterpillar?

Are they here with Komatsu?

Are they here for a bachelor party?

Those kind of things.

I just get to know people and have fun with them, and then try to make their night special in some other way.

And again, our employees, we have people that you just love to be around and they are a part of your family.

And it's been a great business for me.

I've enjoyed every single minute of it other than the, like you say, the negatives, but the positives far outweigh the negatives.

It's just whether you can survive 'em.

- Yeah.

- Hugh, we've got a minute.

What do you think?

- To Ron's credit, yes.

Learning people, knowing people, getting to be a part of their lives.

We've touched a lot of lives in different ways, from their most joyous occasions, surprise engagements that you're in on and you're a part of the secret, or wedding receptions or wedding rehearsal dinners.

And in their difficult times, in the times of sadness, visitations, celebrations of life.

Restaurants and dining and food can bond people together with joy and give them a little bit of joy and relief even in times of sadness.

So being a positive part of people's lives has been a great gift.

- Well said.

And it doesn't hurt to have fantastic food, which both of you do.

- Thanks.

- Thank you.

- So we hope you stay in business a long time, and thanks for some insight.

I know our viewers have probably learned a lot about the restaurant business.

They may look at it differently when they come in and dine next time.

We've got Hugh Higgins, he is with Hearth Restaurants.

And we've got Ron Helms with Alexander's Steakhouse in Peoria and Normal.

Thanks, gentlemen.

- Thank you, Mark.

- Thank you, Mark.

- Appreciate it very much.

And thank you for joining us.

You can watch this segment again at wtvp.org and you can share it with your friends.

We'll see you on Facebook and Instagram.

Have a good night.

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