When Five Restaurateurs Own 40 Restaurants, What Does That Mean for Seattle's Dining Scene? A Look at the Pros and Cons of Chef-Owned Empires

Seattle’s Restaurant “Empires”: their growth has provoked a range of reactions from people in the industry. Mike Force

If you've left your house at all during the last two years, you've probably noticed that Seattle is in the midst of a restaurant boom. And if you pay attention to who is opening these restaurants, you'll see a lot of the same names: Tom Douglas, Ethan Stowell, Josh Henderson, Renee Erickson, Matt Dillon—all of whom already own multiple restaurants, with more on the way.

Award-winning chefs owning a large number of restaurants is nothing new. Culinary entrepreneurs across the country—Mario Batali, Thomas Keller, David Chang, Tom Colicchio—have created restaurant empires that have grown and diversified the country's dining culture and obsession with food.

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In Seattle, however, restaurateurs owning three or more businesses is still relatively new. Douglas opened his first place, Dahlia Lounge, in 1989. Over the course of 15 years, he expanded slowly, adding Etta's, Palace Kitchen, and Lola. In the last decade, however, he has opened more than 10 restaurants. Stowell opened his first restaurant, Union, in 2003 and has steadily grown his company to include 12 restaurants (with at least two more expected to open in the next year).

The growth of restaurant "empires" has provoked a range of reactions from people in the restaurant industry. Over the last year, I've interviewed dozens of people in Seattle's dining world, and nearly everyone has had something to say about it, whether it's a good-natured grumble, an earnest question about why and how it's happening, or an off-the-record complaint.

Kraken Congee owner Garrett Doherty says he isn't bitter, but he does feel like an outsider. "It's really hard to start a restaurant here," he told me last July. "There are five chefs who own something like 45 restaurants in this city, and if you're not part of that crew, no one talks to you."

For Doherty, his current success was dictated largely by chance. After two years running a pop-up, he and his partner Shane Robinson opened a brick-and-mortar location in Pioneer Square in April. They landed the space because the previous tenants, Little Uncle owners PK and Wiley Frank, contacted them when they were looking to move on. Developers and landlords had not been as open. And Kraken's funding came, improbably, by way of a television reality show in which they competed for start-up money from Dallas-based celebrity chef Tim Love.

For a new restaurateur, securing a high-traffic location—so crucial to a restaurant's initial success—can have little to do with your résumé and a lot to do with knowing the right developer or landlord.

Rachel Johnson, Joe Sundberg, and Patrick Thalasinos found a great location for their Fremont/Wallingford restaurant Manolin on the once-sleepy, now rapidly developing Stone Way. Of course, it didn't hurt that the three owners, along with chef Alex Barkley, worked for chef Renee Erickson for years, because the building is owned by Chad Dale, one of Erickson's partners in the company Sea Creatures. (Dale is also part owner of the Fremont Collective, just down the street, which is home to Erickson's The Whale Wins.)

Makini Howell, who runs four successful vegan businesses under the umbrella name of Plum, says she wouldn't have been able to open her flagship restaurant, Plum Bistro, without the support of Capitol Hill developer Liz Dunn. Howell said she looked at spaces around the Pike/Pine corner for more than a year—and was rejected by various landlords and developers—until Dunn offered her a chance.

"Liz believes in variety and diversity, and she works with more women than anyone I know," says Howell, who at first was offered a two-year lease. "She opened the door just a crack—and that's all I needed." When the two years were up, Dunn offered Howell a 15-year lease.

But not all developers and building owners are like Dunn. For most, the bottom line is their primary concern. Seattle's restaurant boom coincides with many new mixed-use buildings popping up all over town. Developers often want restaurants run by high-profile chefs for their ground floor, and some are even willing to pay costs like title insurance to draw them. When faced with a choice between a first-time restaurateur and an established business owner, most developers will go with the known quantity.

It's not hard to understand why. Both Tom Douglas and Ethan Stowell—arguably Seattle's best, and certainly most prolific, restaurateurs—point out that developing restaurants, whether it's your first or your tenth, has never been easy.

"Restaurants are traditionally risky businesses," says Stowell. "And building owners are looking to mitigate their financial risk as much as possible. So they go with those of us who have a proven track record. So yes, there's more opportunity for us over small start-up restaurants. Whether that's a good thing or a bad thing, I don't know."

But as chefs who own multiple restaurants open even more, how much more difficult does it become for newcomers with less capital and less name recognition to compete for locations, investors, and customers?

"When you have multiple locations, you definitely feel this pressure from people in the industry who say, 'They [Tom and Ethan] get all the good opportunities,'" says Stowell. "But it's not like we didn't work to get that."

"With Dahlia, we were on the edge, borrowing money every two weeks for two years," Douglas recalls. "It's really hard. It's always a risk for everyone."

Douglas says he doesn't believe his company's size has any effect on less experienced restaurateurs' ability to find space. "There are a million restaurant spaces in Seattle," he says. "I could go out there today and look at 500 possible restaurant locations. All these new buildings need some sort of food service."

He adds that he funds his own ventures. "We don't acquire new bank debt," he says. "We fund our restaurants with our own money, so we're not taking capital away from anyone. There is nothing but available capital out there."

There's also the question of whether Seattle's restaurant empires are making the dining scene less inclusive and diverse.

"I think that the food scene in Seattle has become slightly homogenized," says Plum's Howell, referring to what she calls "local organic Northwest kale and bacon, pork belly everything." "Everyone seems to be stuck in this New American, Northwest-influenced, regionally handcrafted thing. That's not a bad thing, but we don't necessarily need that on every corner."

No one I spoke with—from veterans to novices—thinks that owning multiple restaurants is inherently bad. In fact, many pointed out that owning more than one restaurant actually makes sense from both a business and a creative standpoint.

"Personally, I have lots of ideas," says John Sundstrom, owner of Capitol Hill's Lark and one of Seattle's most widely respected chefs. "And if somebody said, 'I want to bankroll you to do what you want to do,' I would probably start opening one of these, one of those. There's definitely a creative side that a lot of chefs have, but also an entrepreneurial spirit."

While Sundstrom understands the urge to expand, he hasn't quite given in to it himself. After 10 years, he and his partners, J.M. Enos and Kelly Ronan, moved Lark into a larger space and added two smaller, complementary ventures—a seafood and cocktail bar called Bitter/Raw and a quick-service lunch counter called Slab Sandwiches + Pie—under the same roof.

"My feeling is I've always not wanted to dilute what I'm doing in any given venue," Sundstrom says. "We've never just sought growth for growth's sake. That's never been my take on it. We want anything we make to be really great and really credible."

Sundstrom, Enos, and Ronan plan to eventually open another restaurant in the original Lark location. "For a while, we weren't sure if we were going to do it, but we realized we have a great opportunity to grow, so it just makes sense," Sundstrom says.

Donna Moodie, owner of Capitol Hill's Marjorie, also believes the urge to grow is natural for restaurant owners. "Initially, I had other ideas and plans for another place," she says. "But I just couldn't see multiplying the effort that it takes here at Marjorie. I could see making other places, but I wouldn't be [at Marjorie] as much. I like the personal touch; that's what this is founded on, and I didn't want to give that up."

Moodie acknowledges that some Seattle restaurant owners feel resentment toward the city's bigger entrepreneurs, but she offered a different perspective. "I actually have great admiration for somebody who can look at this industry, make successful business models, and sew them all together," she says. "This trend is as much a result of people realizing that in order to maintain a business, steadily employ people, and offer great benefits, it's hard to own just one restaurant."

In an industry that famously runs on small profit margins, most restaurateurs say that it takes a restaurant of a certain size to make good money.

"My first big goal was to have one restaurant," says Stowell. "What's tough is finding that making a reasonable living is oftentimes at odds with what you can do with one restaurant," he adds, citing the ever-increasing costs of product and labor.

Howell agrees. "There's a particular size restaurant you have to have. Without access to that, your brand can stall and you have to figure out how to grow. You want an operation that can run on its own, where you can hire older people who want to stick around, not people who are going to rotate out constantly."

The stability that comes from having restaurateurs who run many successful restaurants may be good for aspiring chefs and the industry as a whole.

Renee Erickson and Matt Dillon, who within the next year will each own six restaurants, are known for a business culture in which employees are encouraged to be creative—and, in some cases, go on to open their own businesses.

Soon after Johnson, Sundberg, and Thalasinos opened Manolin, Erickson held her company holiday party there. Manolin was recently named one of the top 10 best new restaurants in America by Bon Appétit magazine; another restaurant whose kitchen is helmed by an Erickson alum (chef Eli Dahlin), Damn the Weather, also made the magazine's list of the country's 50 best restaurants.

Erickson is also setting a higher industry standard of pay. In May, she and her partners Jeremy Price and Chad Dale took the bold step of eliminating tipping in favor of a 20 percent service charge. Implementing the charge was Erickson's way of addressing the income disparity that exists between back-of-house and front-of-house workers.

"The industry needs to evolve," Erickson told me. "The system we've adopted in America favors the front of the house in financial value, and that's really not fair—at least we don't believe it to be."

Erickson and her partners are also using the service charge to provide health benefits and a retirement savings plan for their more than 60 employees.

And because of Erickson's influence, other Seattle chefs have followed suit, including Dillon, who told the Seattle Times that his newest restaurant, Bar Ferd'nand II, scheduled to open this fall on Capitol Hill, will incorporate higher wages into its menu prices and not accept tips.

Stable restaurants enable chefs and owners to test out new business ideas and take risks, knowing that a mistake won't necessarily cost them their livelihood. And often, these restaurateurs are willing to share their knowledge with others. Both Moodie and Howell, as well as Salare's Edouardo Jordan (who worked for Matt Dillon before recently opening his own place), told me that when they called up Stowell with a question, he readily gave them advice.

"We don't want others to not have opportunities," says Stowell. "When people reach out to me, I'm more than happy to talk with them about how we did it."

Chefs and restaurateurs talk among themselves, but there's no one they listen to more than customers.

Restaurant empires can grow only as much as the market allows. If diners don't want what a chef is offering, then that restaurant will go out of business. So the future of Seattle's dining scene relies just as much on consumers as it does on developers and chefs.

If Seattle diners truly value diversity in the city's food culture, then they need to seek out a wider array of restaurants, which may require going outside of the city's more popular commercial zones. It requires encountering unfamiliar flavors and unknown chefs.

"If you're a foodie, the excitement is finding something new. It's not about finding something that's just like the last restaurant you ate at," says Howell. "If we are truly a city of foodies, then we need to demand and support a lot of variety. And more chefs need an entrance into the market. We may not even know what we are missing."

This article appeared in the fall 2015 issue of The Sauce.