Selling burgers with atmosphere

The atmosphere generated at Hooters is critical to its success, says Alex Hemingway. He is proud of the fact that when it opened the place eraged just 10% female customers.

Here's a tip for entrepreneurs from a man who has made a success of being one: this is an excellent time to invest in the Hungarian restaurant industry. California raised Alex Hemingway is about to do so himself, again, aggressively, "both in terms of money and outlet numbers," he says expansively as we sit at a table outside his 300 seater flagship franchise outlet, Hooters, in Budapest's Liszt Ferenc pedestrian mall and restaurant hub.

It's the only Hooters in the country and he wants to keep it that way. He has fine tuned the operation so that the operating systems run smoothly and he merely nudges it along. But the first six months are always crucial and demanding, he says.

Between 1998 and 2006, Hemingway ran a franchise based business of 180 venues in four countries, all fast food brand name outlets. He set up a similar business in China, then sold it; likewise in the US, and sold that too. Four years ago he launched Crown Restaurants in Hungary as a joint venture with NASDAQ listed Chanteclier Holdings, to operate Hooters. Now he is working with different partners to seek new opportunities - specifically in Eastern Europe.

"In most normal markets, 70% of the restaurants offer middle of the road dining, the rest divided between high end and low end. Hungary's market is defined by the lowest common denominator... Look at all those places offering three or four euro lunch menus, for example. That's unsustainable. Nearly 30% of is tax!

"People don't understand the markets here," he explains, "and costs are well below those in Western Europe." He is scathing about the lack of differentiation in the restaurant business, which mostly offers a similar menu - gulyás, schnitzel, pizza, pasta  - and similar environment to their competitors.

Not so Hooters. "This fills a unique slot in the restaurant space, offering classic American fare like chicken wings and burgers. Its motto is 'delightfully tacky yet unrefined', which signals how unpretentious it is. But," he adds with emphasis, "a lot of people have a misconception about the place and about the girls. First of all, they spend six months training before they serve customers. They are chosen for their ability and willingness to converse with the customers." And they make a lot of money doing that; once a year Hooters advertises for applicants and over 1,000 apply.

The 800 sq m property boasts 52 tv monitors, including the largest screen in Hungary , and six satellite dishes delivering every sport that is televised. "If we didn’t have the girls, we would still have the best sports bar in Hungary," he boasts. "But honestly, it's more important how they behave than how they look."

The atmosphere generated at Hooters is critical to its success, and Hemingway is proud of the fact that when it opened the place eraged just 10% female customers. "We now average about 30%, because they enjoy the atmosphere. It's a relaxed place, no dress code, you can wear anything from suits to shorts."

When asked if the Hard Rock Cafe, another American brand with a signature style, is a major competitor, Hemingway is clear: "they cater primarily for the foreign tourists, whereas we like to have a mix of locals and expats as well as some tourists."

As for the food, Hemingway says he happily puts his burgers up against any competition. "We get our meat specially made for us...the quality of our food is essential."