The Question: What are the recommendations for this case study according to Tourism Management?

CASE 3: GEORGIAS RESTAURANT BUSINESSES Sambhavi Lakshminarayanan

I could just wring their necks! muttered Georgia to herself as she trudged in the chilly and windy aftermath of a snow storm to her restaurant, Upside Down. Yet another crisis at the recently opened store had made it necessary for her to rush there on a Saturday morning. Her mood only worsened as she accidentally stepped into a puddle of icy water gathered at the street corner. Georgia would much rather have been at home with her children making their breakfast and taking them for swimming lessons, but she had no choice other than to go. The people incurring her wrath were both the employees at Upside Down and the partners who co-owned the restaurant with Georgia.

IT Professional to Restaurateur

Georgias parents were typical immigrants who had come over from the old country. They had worked hard to ensure a better future for their children, of whom Georgia was the oldest. Georgia went on to obtain a college degree in Computer Science. In defi- ance of her fathers strictures to adhere to their cultural norms (daughters stay at home until they are married), she then obtained a job and left home. In the face of parental disapproval, Georgias brother, Stephen, supported her and even moved in with her in a show of solidarity. Eventually Georgia married one of her classmates from college. In 1988, they moved to a small town upstate where both were employed as computer software professionals in a large multinational firm. Her husband Michael worked as a software programmer and Georgia worked in quality assurance and de-bugging code.

In 1995, Stephen brought a business idea to Georgia and Michael. He proposed that they take over a restaurant in a major metropolitan city. Stephen had established himself there as both a real estate developer and a restaurant owner. While he himself was not interested in taking on a new business at that time, he felt it had great poten- tial. Georgia and Michael also felt it was time to make a move. They had enjoyed their work immensely and were happy with how well they were treated as employees at the firm, but it was the beginning of the outsourcing trend at their company and the future was uncertain for IT professionals there. They decided to take the plunge and become entrepreneurs; that was how Food Station opened that same year in the city.

In the beginning, Georgia and Michael had to work extremely hard to establish Food Station. The neighborhood was not well developed; for instance, construction of the road in front seemed to go on forever. They persisted and built the business up, cus- tomer by customer. Georgia recalled the first Christmas when she brought her infant daughter to the restaurant and spent the entire night mailing out holiday cards to cus- tomers. Many customers stopped by later to thank Georgia and mention that they had never received such a card before from a local business. Similarly, for Thanksgiving, regular customers were given thank you cards instead of the check. Such special marketing touches, along with a large and moderately priced menu, ensured a reliable group of regular customers for Food Station. One customer even ate three meals a day at the restaurant for several years.

Although it was a big switch in careers, Georgia and Michael both enjoyed the experience of running their own business very much. Georgia has always been a people- oriented person and Michael liked the sense of control he had. They even put their skills from their prior jobs to good use. For instance, as early as 1996, Georgia analyzed their customers behaviors and maintained a list of addresses of regular customers in an excel file. By 2004, at a time when few restaurants that size had an electronic order-taking system, Michael had installed one at Food Station and trained all staff on using it.

Over time, the neighborhood around Food Station improved dramatically and became affluent, trendy, and upscale. However, Food Station did not make major changes to either the menu or prices. The restaurant remained popular with not only older residents but also gained new customer segments, such as tourists and professionals working in the area. Some celebrities who lived in the area became regulars, apparently appreciating an opportunity to dine in a low- key manner with their family.

Things Go Upside Down

In mid-2007, Stephen came by with a new business proposition for Georgia and Michael. He had come across a distressed restaurant and proposed that they enter into a partnership with four others, including himself, to take it over. Stephen was very persuasive and tried to convince them that the partners would contribute both money and expertise to the enterprise. Initially, Georgia was reluctant since she had not had business interactions with the other partners. At the same time, the idea was intriguing and interesting. She also felt compelled to support her brother in his business plans.

Georgia was confident that she had the expertise to run another enterprise like Food Station. It was possible with planning, time, and effort; that a management team could be put in place at Food Station, so that it could be run with only a light touch from the owners. The catch was Georgia was not sure that she wanted to make a full- scale commitment to grow another business at this stage of her life. However, after due discussion and deliberation, Georgia finally agreed to the proposal for the partnership with the understanding that it would only be a part-time commitment for her.

At the time the partners purchased the restaurant, it was in bad shape. The interior was run-down, dull, and uninspired, the staff was unmotivated, the menu looked tired, and there was no steady clientele to sustain the business. However, Georgia agreed with the other partners that the business had a lot of promise and potential. A main reason for such optimism was the presence of a thriving and busy neighborhood, with plenty of offices. There was also a fairly large and well-known college almost directly across the street. A mix of residential apartment buildings and smaller retail stores was scattered in the surrounding blocks. A little further away, although still within walking and reachable distance, was a major train station with attendant hotels and tourist traffic. Another reason for confidence in the venture was that Georgia and many other partners had experience in the industry.

It was apparent that the restaurant would need rework before it could deliver its potential. Its previous lack of a good reputation and state of disrepair were impedi- ments to success in its current state. Georgias partners, who contributed to the initial investment, decided it required a complete renovation and wanted to reposition it as a bar-cum-restaurant. Although not completely convinced that it was the best plan, Georgia agreed. The restaurant was shut for many months, as the interior was gutted and redone, and a complete bar was outfitted in the interior.

The renovation process took about eight months to be completed to all the partners satisfaction. Michael then chose a new name for the store. In 2008, the restaurant reopened in a quiet way, as Upside Down. There was reason to be optimistic when it reopened; the redesigned interior was extremely pleasant with artistic touches and appealing earth tones, the bar was well designed and located in the middle of the restaurant, and the neighborhood had a promising mix of potential customers.

However, from the start, Upside Down was unable to capitalize on these advantages. The reasons were both strategic and operational. There was unresolved confusion between the partners about how to position Upside Downshould it present itself as a family restaurant, a quasi-professionals eatery, or a late night bar hangout? Each one of these had a potential customer pool. A persistent concern was whether any one such niche would be large enough to sustain the business and help it grow. Being very narrowly defined might cut out certain groups from the mix. The partners tried to balance all these different customer needs and requirements by having both a bar and an extensive menu, offering eclectic items as well as traditional, comfort food, with a wide range of pricing. Then it seemed that in trying to be all things to all people, there was a danger that Upside Down was not being especially attractive to any of them.

Another serious issue was that of staffing. As a restaurant, having a good staff was critical to its success. However, the restaurant business is notorious for turnover and it appeared that Upside Down did not escape that curse, indeed having it worse than many others. One of the initial partners was a chef/manager, Johnny, who had been recommended by one of the partners. Within a short time of reopening, it be- came clear that he was not up to the task of running the restaurant. Stephen recommended that he be terminated from the job and the partnership, and that was done. Since then Georgia had to fill in as intermittent manager, as many employees were hired and fired as chief chefs or managers. There was also churn in other positions such as wait staff and bartender. One announcement for a bartender position drew about 800 responses, but barely a handful of them were qualified and passed muster in other respects.

For Georgia, one irritating problem was that she was soon pushed into the role of the chief decision-maker and emergency manager of Upside Down. Soon after opening, the restaurant was faced with a series of operational issues, such as: a bartender found drinking on the job one day, the chef insisting on making his own dish rather than the one listed on the menu, and a sudden visit by a neighborhood magazine to write a review. All these situations needed immediate decisions and action, and there seemed to be nobody other than Georgia to pick up that slack. That state of affairs continued, hence her trek to the restaurant on a blustery Saturday morning.

The more serious and nagging concern on Georgias mind, however, was not about the operational challenges. It was about the status and future of the partnership.

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