Having grown rapidly through the recession, the First Restaurant Group has established itself as a solid mixed-level business. Managing director Mitch Tillman tells James Stagg how he will make his new World's End site work and offers his tips for expansion
How did First Restaurant Group begin? I was running a busy Mediterranean restaurant in Notting Hill for a big group for a few years before getting the opportunity in 1996 to buy a small restaurant in St John's Wood called Harry Morgan, which had been established since 1948, but had slipped. Someone a friend of the family knew was struggling and offered the business at a cheap price. But it needed a lot of work.
At first, I didn't fancy it because the restaurant in Notting Hill was quite cool - young people, cocktail bar - while Harry Morgan was a sort of deli diner that was really small.
Were you joined by any partners? It was myself and three other partners (one of them the original founder of Caffè Nero, who sold out at six units). My condition for getting involved was being able to expand Harry Morgan. So for the first couple of years I built up the business in its existing small site.
Once we'd proved the place had potential, we took over the next door shop so we could double its size. That one unit became a name that we got into Harrods, plus units in Oxford Circus and Brent Cross, and three franchises in Latvia and Istanbul. We want to continue to expand.
So did Harry Morgan's success lead to more acquisitions? While we were working on Harry Morgan we acquired the Notting Hill Brasserie and decided we wanted to build up the group. In 2007 we acquired three gastropubs - the Waterway, the Ebury and the Running Horse. That was the start of First Restaurant Group. We expanded quickly from then on.
That was right in the middle of the recession - wasn't that a risky strategy? We had a good footing. Harry Morgan was a consistent business all year round and Notting Hill Brasserie had a great reputation, while the three gastropubs were high footfall and mid-level in terms of pricing. So we started to build a group that had levels and restaurants that were busy at some points and not at others, when others were. We now have 10 sites.
One of your sites, the Summerhouse in Maida Vale, is only open for six months of the year. How do you make it pay? It's a seasonal restaurant. Because it's right on the water and cold in the winter we mothball it, but open it for parties. We had a great month in December.
Mothballing it works because we can do enough business in the six seasonal months - packed out every single night - and can afford to close it. We can keep the wonderful staff and move them around the group.
We learnt the lesson from the previous two owners that had an OK business in the summer and failed miserably through the winter. So when the weather's good everyone wants to be there, but you have to charge enough to be able to make enough money. People are prepared to pay as it's such a special place.
Also, closing it for half the year stops it from becoming boring. It almost gives it exclusivity and it doesn't lose the special feeling of getting in. It's worked in our favour.
Is your new site - the World's End in Chelsea - a mixture of your various enterprises? It's a three-layered concept with something for everyone.
The ground floor of the World's End is called the Scene. The building is Grade II listed so inside we wanted to create a buzz and get young people in. So on the ground floor it has an LA diner feel, which isn't too serious on the food but provides great quality burgers and steaks at affordable prices. There's a big open kitchen with a cinema board - it's fun and funky.
The first floor is a Summerhouse replica. It's a fish restaurant with a slightly improved restaurant, which is more sophisticated than downstairs. It's more destination while downstairs is more everyday.
There's also the Cellar, which is more of a private event space and cocktail bar.
So you're trying to attract as broad a market as possible Absolutely. Lunch time is difficult wherever you are in London so we felt that downstairs had to be a bit fast and furious. If you want to eat lunch you want it quickly and don't want to spend too much, so that was what we were aiming for. But also you want somewhere that you can get steak and a bottle of red wine in the evening and feel comfortable.
What do you look for in a site? Generally now we look for large sites. It's the same amount of aggravation for little sites as it is for a big site - still need a head chef, still need a manager. We liked the site and its history. Anyone you ask knows the World's End in Chelsea.
The fact that it had been shut down for a year was quite sad and we thought there was great potential in it. It takes a while to get on the map.
How long do you budget for in terms of getting the business to pay? We've started off quite quickly. The minute we opened the doors we had a lot of interest. Although being the summer it's a soft time, as a lot of people are on holiday, so we know we won't start to get busy until the back end of September.
You have to budget for that, it's part of the start-up cost. I would rather build up a team and be on top of things by the winter season when we have Christmas parties every night.
Is it a concept you'd like to roll out elsewhere in other bigger sites? Interestingly enough we have other basements that we could turn into the kind of cosy and cool area we have here. Like the Summerhouse, if an idea works and people like it we'll definitely replicate it.
What's the future of the business? Are you looking for more sites? Last year we opened three sites. That was quite a lot for a small company - there are only seven of us in head office. When you open somewhere new you really need to focus on it and make sure it's a solid, consistent business before jumping into something else. We want to make sure it's got our heart and soul and the best of our expertise.
Are you supported by your bank or are your projects self-financed? A bit of both, but we have got help from HSBC, which is very supportive.
However, we do find there are many good businesses up for sale simply because they have had their funding pulled. Someone offered me a pub this morning that looked great but I have to hold myself back.
Mitch Tillman's advice for operators looking to expand
â- Don't be put off by a slightly off-track location with a cheaper rent because people will always travel to somewhere that's great. You don't have to be on a glamorous high street to have a successful restaurant, pub or bar.
â- Be careful with your fit-out costs because it's easy to get carried away. We do all our design in house and even buy things on eBay such as chairs which we can re-spray. Obviously you have to buy some things new but it's not necessary to buy everything new at full price.
â- Make use of all your space. At one of our sites the two floors upstairs are rented-out flats, lowering the rent of the building considerably. If you have a huge building and you can rent out half, either to another restaurateur, or to tenants, you get some of the income towards the rent and less responsibility.