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Creative Eateries plan for success involves having about four to six
different restaurant concepts, but all under one umbrella with an approved supplier and
national food distribution
Restaurants
(CEAT.OB)
Creative Eateries Corporation
7400 McDonald Drive, Suite 121
Scottsdale, Arizona, 85250
Phone: 843-342-5099
Frank Holdraker
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
August 25, 2005
BIO:
Frank Holdraker, President and CEO.
From 1989-2004 Mr. Holdraker was President/Owner of Franklin & Associates, a full
service concept development company. He helped develop for La Salsa, Fresh Mexican Grill
their franchise program, the manufacture of proprietary products and the establishment of
purchasing and distribution procedures. From 1986-1989 Mr. Holdraker was President and CEO
of Ponderosa, Inc., a 750-unit steakhouse chain. From 1980-1986 he was Senior Vice
President of Coulter Enterprise, a major multi-state Pizza Hut franchisee. Prior to that
he was Vice President of Pizza Hut from 1974-1980.
CEOCFO: Mr. Holdraker, will you give us a history of the
company?
Mr. Holdraker: “Creative Eateries has been designed to
acquire, joint venture or develop restaurant concepts that we believe can be developed
successfully and franchised at a later date. Currently, we are developing ‘Q’s
House of Barbeque’, which is a different type of barbeque and we are hoping to open
up by the end of September.”
CEOCFO: What is
happening in the restaurant industry and what are you looking for that would stand out?
Mr. Holdraker: “We are looking to do things a little
differently. We want to deliver on the promise of total customer value; that is our major
strategy on all of our concepts, and that is to develop everything for the customer. All
restaurants try to do that; we are going to execute and make sure that it happens. We are
also going for more uniqueness in terms of our restaurants, whether it is in design,
décor or the concept. We have an executive chef that came to us from cordial Hospitality
Host for Kendall-Jackson Wine Estates in Sonoma County, California; his name is Edward J.
Walsh. He is a superior chef and he has designed and developed all of our food for all of
our concepts but is currently working on Q’s House of Barbeque, and is doing a
phenomenal job, we have some great products coming up.”
CEOCFO: Will you tell us more about that?
Mr. Holdraker: “We studied the industry a lot and we
look for the trends. Barbeque is a big trend right now; there are many competitors out
there, both mom-and-pop and big corporate chains. We are developing this with an Arizona
flair, which is a bit different. There is about seven different sauce or spice districts
throughout the United States for barbeque. We are trying to develop our own, which is
middle of the road, but yet high-quality. We are going to be doing everything from beef
brisket, seafood, chicken wings and all of the typical type things. We will deliver in a
different format to the customer, so we are kind of excited. We are also including a lot
of catering, so that is going to help us.”
CEOCFO: Will catering be
available throughout your restaurants?
Mr. Holdraker: “Yes, it is a major trend and whoever is
not doing it, is actually losing because it is found sales, so to speak. Many people out
there are using catering today and that is growing and growing. As the American consumer
sees that coming, and is using it more and more, we are seeing a positive effect from
that.”
CEOCFO: In terms of
total customer value, you said that most restaurants try and do not succeed. How
does your approach work?
Mr. Holdraker: “I have been in the restaurant business
for about 35 years, and over the years I have developed a formula for total customer value
and that includes everything from the highest possible quality to price value
relationship, entertainment to the highest quality service available as well as the
highest standards of cleanliness. We combine all those things into a single formula that
all of our management staff buys into. We then sell it to our staffs. It works out good
for us.”
CEOCFO: How do you
instill the total customer value feeling in employees on the front line?
Mr. Holdraker: “It is a matter of commitment and it has
to be coming from the top down. Since I am at the top, taking it down is easy. We
incorporate it in our training materials, in everyday life, in the actual operation of the
restaurant on a day-to-day basis. We have a checklist, which is a mental reminder. We have
a lot of low-paid people, because that is where they start. Out of that, we build our
staff and our management staff, because it comes from those folks and they are good
hard-working kids that just need a bit of direction. We found that with “total
customer value” that it works well for them because they can believe in it. It is not
some fantasy somewhere; it is an actual process to develop.”
CEOCFO: Will you tell us
why franchising works well and how to you maintain quality consistency in a franchise
situation?
Mr. Holdraker: “We have a turnkey operation where we can
help the franchisee build their store. The specifications that we want, everything from
color to chair size to table size; we control that. We have an approved supplier list and
the franchisee can only use the suppliers that we have approved. We also work with
national food distribution and with some people who build the food for us. We inspect them
and make sure that the specifications are followed. They can only by from approved
suppliers and we approve the suppliers and the distribution methods. We are pretty sure
that our quality products are going out.”
CEOCFO: What will be the
dinning format of your restaurants; will it be fast food or more formal?
Mr. Holdraker: “We are doing something unique with Q’s
House of Barbeque; we are going to do that in a fast/casual full-service environment.
We call it fast/casual because customers really like fast service at lunch. We are
developing a restaurant that will do fast casual or fast lunch but will be a full-service
restaurant at dinner. It is something we are going to try. We have flip/flop menus and
everything designed for it.”
CEOCFO: Does the public
prefer a chain restaurant where they know what they are getting?
Mr. Holdraker: “It depends on the socio-economic value
of the customer. Many people just like full-service and that is what they are going to go
to no matter what. With the speed of lunch today, and everybody in a hurry especially when
they get thirty minutes for lunch, you want that fast service. As far as chains vs.
independents, it really depends on the independents. If an independent is tremendously
good, they will always win, but then they soon become a chain. It is the owner who wants
to make money and that is what we are in business for.”
CEOCFO: How do you go
about looking for your acquisitions?
Mr. Holdraker: “We have a fairly good staff here and
some consultants that we work with who are out on the road all of the time who look at
restaurants and they say this might be a good one. We go in and look at it and decide
whether we can replicate it or do it better, which elements do we take out of this and
which elements do we want to work with. We try to joint venture with a partner so that we
do not lose the original flair. If it is a conceptual thing, maybe we will buy out the
entire restaurant that we like, develop it from there adding new improvements or taking it
as it is. If it is one we developed, we get ideas from many restaurants, we have folders
of product ideas and conceptual ideas on how to prepare food and what the environment
should look like, and we work on those.”
CEOCFO: What prospects
are you looking at now?
Mr. Holdraker: “We are looking at an Italian concept; as
a matter of fact we have three which we are looking at. We are looking at a pizza concept,
which will be a bit off kilter from the normal. We like to call it a pizza concept, but it
is going to be a bit different. We are also looking at a fit-and-healthy concept and we
are looking at one called Anna’s Kitchen that will be up-scale and include wine and
drinks.”
CEOCFO: You have a long
history in the industry, why is this the time for you to start creative eateries?
Mr. Holdraker: “Because I got bored being retired. I was
a substitute teacher for three years in Scottsdale. While that was fun, my blood has
restaurants running through it and I had ideas. I hooked up with some people that I
thought were very good and we started the process.”
CEOCFO: Will you tell us
about the financial picture of the company?
Mr. Holdraker: “We have gone public and created a huge
corporation. We are about 31 million shares outstanding today and about 6 million in
float. We think we can raise enough money; we have up to this point to support what we are
doing. We are excited about it and it is a way to finance our growth. We have other
investors that are coming in with us too.”
CEOCFO: Why should
potential investors be interested?
Mr. Holdraker: “There are 150,000 food companies out
there and ours is amongst them. We are a bit different, because we take a different
approach at creating the concepts and the uniqueness. We also have an exit strategy built
up, so when a concept gets to a certain point, we may or may not sell it depending on what
we are working on at the time. We are not tied into one concept; our plan is to have about
four to six restaurant concepts going at one time. Currently we are under construction for
one and I think we will have four total concepts up and running by the middle of next
year. We will decide from there how to franchise those. We have a great sales arm that
does our selling. We have all the elements put together to do everything from financing to
building out, to operations, to sales.”
CEOCFO: Are you
concentrating in the southwest?
Mr. Holdraker: “That is where we are in the Phoenix
market but we are not necessarily concentrating here. We sold stores in Pennsylvania,
California, Portland and Ohio, so we are all over and we don’t think you need to
concentrate on one market. What we need to do is make sure we have high-quality
franchisees; people who believe in the concept and can execute it to total customer value.”
CEOCFO: In closing, tell
us what is the most important thing when running a restaurant?
Mr. Holdraker: “Total customer value and making sure the
customer has gotten everything for his dollar that he expects. Obviously in a concept, you
are limited, and on the fast casual you have some limitations and on the full-service you
have fewer complications but the customer still has to get what he pays for and feel like
he got a great deal.”
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