SCALING UP | Earls CEO Stan Fuller, seen here at the Yaletown location, has taken a bigger, bolder model of his Canadian restaurants to the U.S.
Thirty years ago, Earls imported the casual fine dining concept from America. Now, having conquered the Canadian market, Earls is taking a classed-up version of the concept back south–with surprising results
Dadeland, Florida, is an exurb of residential bungalows, apartment blocks, office towers and strip malls located 25 kilometres southwest of Miami—a half-hour through the Metroplex’s muggy traffic. This is where the July 1979 “Dadeland Massacre” took place—a barrage of gunfire between rival cocaine dealers inside a Crown Liquor store that left two dead and provoked President Ronald Reagan to launch his War on Drugs. It’s also the same turf Crockett and Tubbs prettied up on Miami Vice.
But now it’s Miami Nice. Much has changed in this gentrifying area over the past 37 years, and Dadeland Mall, located at the junction of the Palmetto and South Dixie expressways, currently rates amongst Miami’s busiest. It’s where many Miamians converge to shop, work and, increasingly, dine—including at the popular 8,500-square-foot, 400-seat Earls, opened in March 2014. The restaurant’s entrance is gilded with high white marble walls, and glass doors fold back to reveal a series of soaring rooms where booths are encased in wooden millwork, chairs are richly upholstered in toffee-coloured leather, and hundreds of black metal lights penetrate suspended wooden ceilings.
Shoppers laden with Nordstrom and Saks shopping bags relax on the large, semi-circular patio under crimson sun umbrellas, while in an adjoining lounge, bar staff pour mojitos, reposadas, small batch mezcals and local craft brews for a diverse crowd mixing English and Spanish—the patois of South Miami chic.
It seems a world away from Earls’ Western Canadian roots, but a closer look at the menu reveals many recognizable items—including the famous clam chowder and Leroy’s crispy dry ribs (named after Earls co-founder Leroy Earl “Bus” Fuller)—to complement local favourites such as fish tacos, crunchy Cubano sandwiches and black bean soup. This Miami location provides a neat summary of the company’s rapid-fire expansion into the hyper-competitive U.S. restaurant market—or what Stan Fuller, the 62-year-old Earls CEO (and chairman Bus’s eldest son), calls “piranha-infested waters.” In just two years, Earls has rolled out several big-box locations in Boston, Chicago and Tysons Corner, Virginia (a wealthy D.C. suburb), bringing the current U.S. total to eight locations; this summer the company will open in Orlando, in November it adds a second location in Boston (at Prudential Center, nearby the juggernaut Eataly) and next year it enters the Dallas market.
Each restaurant—in design, menus and beverage lists—is assiduously tailored to its local market. And each is big—twice the size or even larger than an old-style Earls. Today’s commercial landlords view quality, design-forward restaurants less as tenants and more as anchor amenities to attract retail customers or office workers to their high-density, high-traffic developments. According to Michael Whiteman, the Manhattan-based president of Baum + Whiteman International Restaurant Consultants (who designed Windows on the World, the Rainbow Room and dozens of other landmark restaurants), “Malls are in trouble. They are losing their anchors and their large-square-footage stores such as Barnes and Noble and Border Books.” With more and more consumers shopping online, developers need to create “social venues” where real people congregate, he says, and high-quality restaurants are increasingly seen as the answer.
In order to make it work financially, however, restaurateurs need to step up both the design and size of their locations. So instead of a 150-seat, 6,000-square-foot suburban installation with ubi-quitous and now-tired decor, the new concept sizes now entail to 300 to 500 seats and 8,000 to 14,000 square feet, with high-profile designers and brand-name chefs. It’s a trend that has taken hold in Canada over the past decade, with supersized, upmarket Earls now anchoring the business districts in Vancouver, Calgary and Toronto. But with a near-saturation in Canada of the casual fine dining (CFD) market—a category Earls largely created some 30 years ago—bigger, bolder Canadian locations were no longer enough. To grow revenues in a meaningful way, Earls had to look south.
Earls first plunged into the U.S. market in the late ’90s, opening a Dallas location and two in Scottsdale. But these were predominately “drive-to” restaurants, located away from heavy urban concentrations and daylight “footfall” traffic, and a decade later all had closed. American Earls 2.0 are bigger and better-designed, but also better-located—situated in areas of high density and surrounded by complementary retail uses. And the Fullers are sparing no expense to succeed this time around, spending between US$7 million and US$9 million on hard and soft costs per location, plus an additional million dollars in pre-opening costs such as marketing, training and inventory. Prior to the Miami opening, 80 experienced “brand ambassadors” were temporarily relocated from existing restaurants in Canada and the U.S. to train and then shadow local kitchen and front-of-house staff, some for as long as six months.
The U.S. offers a distinct opportunity for Earls. The CFD market is largely splintered between mid-sized regional players (such as Arizona’s Fox Restaurant Concepts), faceless national conglomerates (like industry behemoth Darden Restaurants, with a dozen brands that include Olive Garden, Capital Grille and Longhorn Steakhouse), lower-tier chains including Applebee’s and Golden Corral, and more lively, demographically articulated operations like Chipotle, Yardhouse, Rocco’s Tacos and Cheesecake Factory.
According to Michael Whiteman, “Earls really has no direct American equivalent. That has a lot to do with their size and their willingness to risk vast amounts of money in creating design and atmosphere. But it’s also about the great courage they’ve shown in crossing the $20-entree price barrier. The [Earls] experience is a giant step up from the American perception of casual dining, and it fulfills the niche between informal and fine dining like no other.” American food critics appear to agree. In the Huffington Post last January, bestselling cookbook author and culinary journalist Rozanne Gold said of her visit to the company’s newest outpost in Tysons Corner: “I loved its contemporary sprawl—part hipster, part family-friendly—designed with subtly and sass. I had envisioned an old-fashioned, seen-it-before kind of establishment, but instead found a mission-driven let’s-take-care-of-you dining hall. It’s very big. As is its innovative menu, its ramped-up lounge and bar, its extensive cocktail offerings, its level of generosity and spot-on service.”
An entrepreneurial love of restaurants has coursed through the Fuller family’s veins for over half a century. Bus (the 87-year-old chairman, who still visits the Earls headquarters in Vancouver’s Gastown and chairs board meetings) and his late wife, Marilyn, made their start in the business shortly after Bus was wounded in the Korean War. Born in Cincinnati but reared in Montana, Bus was a machinist looking to augment his growing family’s income. The couple opened a series of down-home coffee shops in Sunburst, Montana (close to the Alberta border), with Marilyn working the day shift and Bus nights. The first one was called the Green and White because, according to family lore, white paint was cheap and green paint was on sale.
In 1957, the Fullers sought out a brighter future with the expanding A&W chain. They applied for the nearby Lethbridge franchise, lost out, but were successful in gaining a foothold in Edmonton. Over the next 25 years, they accumulated 30 locations stretching as far west as Vancouver Island. In 1968, the Fuller brood moved both home and business headquarters to Vancouver, where Bus opened a steakhouse concept called Corkscrew. At one point, Bus’s restaurant empire, which included some of the highest grossing A&Ws in North America and a new 24-hour concept launched in the mid-’70s called Fuller’s, counted over 100 restaurants in the two provinces. In the early ’80s, Bus took the company—now called Controlled Foods—public.
But the Fuller’s brand quickly began to flail, which threatened to topple the family empire. With interest rates spiking to over 21 per cent in early 1982, the operation began hemorrhaging money. “Fuller’s was an obsolete concept,” Stan Fuller says today, “best left to Denny’s.” Ultimately, Bus sold his stake in Controlled Foods to George Tidball, one of the co-founders of the Keg (then called the Keg and Cleaver), and he and Stan began plotting a new restaurant concept.
In the U.S., a sea change was occurring in restaurants, with a new mood for accessibility and fun seen in nascent chains such as Ruby Tuesday, Applebee’s and TGI Friday’s. Taking inspiration from these examples, the first Earls opened later in 1982 on the site of a failed Fuller’s in Edmonton, with cheap and cheerful decor (beach umbrellas, 300 papier mâché parrots) and crowd-pleasing food (juicy burgers, fresh hand-cut fries, Buffalo wings, outsized margaritas). “It just blew people’s coconuts,” Stan says. “We really hit a sweet spot.” At the old Fuller’s, $15,000 in sales represented a good week; at the newly minted Earls location, after just six months, weekly revenues pushed through $85,000. Within two years, the Fullers had opened a second location in North Vancouver called Earls Tin Palace, and by the mid-’90s suburban and small town locations opened throughout B.C. and Alberta. Today the chain counts 59 Canadian locations from Victoria to Toronto.
In addition to Stan, two other Fuller offspring are in the family trade. Jeff, the youngest at age 50, is president and CEO of Joey Restaurants, with 23 restaurants in Canada and four in the U.S. (he also operates another nine-store brand in Canada and the U.S. called Local Public Eatery) while Stewart, 53, operates a two-location steak-centric Alberta operation called Saltlik. (A fourth son, Clay, is no longer active in the business.) The Fuller family also became an early and substantial partner in the 28-restaurant Cactus Club chain and own the stand-alone Beach House restaurant in West Vancouver.
The CFD market in Canada is one that the Fullers have their fingerprints all over—and, for many years, dominated. In the early days, Earls kept to the west, while major players such as SIR Corporation (with brands such as Jack Astor’s) stayed east of the Ontario/Manitoba border. That changed in 2007, however, when Jack Astor’s opened a location in Calgary; a year later, Earls had opened the first of five restaurants in Ontario, including a massive 400-seat category killer on downtown Toronto’s King Street (launched in 2010). Around the same time, Earls started to have its lunch eaten by western-based competitors—including, ironically, erstwhile partner Cactus Club.
If Earls’ aggressive re-entry into the U.S. market in 2014 made strategic sense, given the saturation of the Canadian market, it still surprised many industry observers. “Earls had stubbed their toe in the U.S. before,” says one veteran of the restaurants wars, who asked not to be identified. “A lot of us wondered if they had built a better mousetrap this time around—it was certainly a huge investment and a bold move.” Other Canadian chains that have entered the U.S. market, including Tim Hortons and the Keg, have struggled to make inroads.
Key to the timing of Earls’ latest expansion was several management changes at the company. In 2009, a new outside advisory board was created to help the Fullers make major strategic decisions, especially with regard to expansion planning. The old division of labour saw Bus Fuller mainly manage real estate acquisition and financing, while Stan (president since 1992) oversaw operations. When Bus kicked himself upstairs to the role of chairman in 2012, Stan took over the CEO role to focus more on the big picture, including the American expansion plans, and hired a new president, Mo Jessa—the first non-Fuller to hold the position—for day-to-day operations. Also that year, restaurant real estate expert Stephen Andrews was headhunted from Orlando-based Darden Restaurants to become Earls’ chief development officer. His mission: to find the locations for Earls that would allow them to succeed in the U.S.
“That was the Eureka moment—when Stephen Andrews brought out a population map of the U.S. and started educating us on commercial real estate markets up and down the eastern seaboard,” Stan says. “The old model for restaurant development was to pick a city, then cluster restaurants in promising locations. But Stephen argued strongly that good real estate is good real estate, and that it’s far better to pay more to find the density in bright and shiny locations.”
Now, having exported their expertise to the U.S., the Earls executive team is bringing some of these refinements home, as well as inventing some new ones. They have embarked on two western Canadian initiatives that they hope will also attract attention. This summer, the Fullers will revisit their Albertan roots when they open a large-scale “Earls67” in the podium of the 52-storey twin towers of Bankers Hall in downtown Calgary—a location that reflects the company’s new American business mode, with heavy density grabbing higher footfall and office-driven volumes in an elaborately designed room. And in late 2017, the company will open in the new Grosvenor Ambleside mixed-use development in West Vancouver—a design-forward seaside launch that promises to be 100 per cent sustainable, drawing on smaller suppliers and ensuring “conscious sourcing” for everything from ingredients and food recycling to uniforms.
The shifting direction—going big into the States, reinventing the Canadian concept and upending the cheap-and-cheerful ethos of the early Earls—hasn’t come without some family squabbles, or as Stan Fuller describes it, “highly animated discussions.” Bus never wanted Earls to forget its roots—of keeping it simple and not too gussied up. Stan, by contrast, has pushed to modernize, reinvent and move the chain forward since taking the reins from his father.
Still, by the opening of the Miami location in 2014, it was clear that the elder Fuller’s mood had brightened, as two generations gathered for the restaurant’s May launch party. “We were sitting out on the patio, on a beautiful night having drinks, and there was a great crowd and music and everything had come together,” Stan recalls. “Dad was puffing on a very expensive Cuban cigar. He looked over at me, but we didn’t have to say a word.”
This time around, things are clearly clicking south of the border. “The genius of Earls in the U.S.,” consultant Whiteman says, “is that they are doing it higher, faster, stronger than anyone else. They have created social venues where others have feared to tread. Most companies designing restaurants stop when they think they’re done, but Earls just keeps on going.”
While Earls has enjoyed success overall with its U.S. strategy, one idea imported from the Yanks—its Certified Humane beef program—had a rougher ride
In retrospect, the tweet by Earls on April 27 sounds almost naive. “This is really big. Earls is the first chain in North America to source beef from Certified Humane™ farms in all its restaurants.” The company’s president, Mo Jessa, raved about the move in a video accompanying the announcement. “There’s nothing more satisfying than to know you can serve something delicious and also be good to Mother Nature.”
The announcement was really big, but not in the way Earls expected. As the news broke, the company’s message about its ethical decision to serve beef raised without the use of hormones or steroids was lost. Rather, widespread media stories focused on the fact that Earls chose Creekstone Farms, in Kansas, as its sole supplier and would no longer be serving Alberta beef.
The reaction was swift and indignant. Earls’ Facebook and Twitter feeds were inundated with talk of a boycott. Alberta ranchers staunchly defended their own humane practices of raising livestock. Canadian Cattlemen’s Association general manager Rob McNabb called the Earls announcement a “slap in the face.” For a few days Earls fought back, saying that Alberta producers were unable to provide the quantity of Certified Humane beef that the restaurant chain demanded. Then, on May 4, came the mea culpa. “We want to make this right,” said Jessa. “We want Canadian beef back on our menus.”
But the firestorm, however negative, may have fulfilled Jessa’s original intent. News stories dissected Canada’s various certification programs for raising beef, reported research showing the millennial generation’s penchant for ethically sourced meat and outlined several Canadian beef industry efforts toward developing audit-enforced programs for humane treatment of cattle. It was possibly more concentrated chatter than the issue had ever received. And while Earls is still committed to the Certified Humane program, it has also now agreed to work with Alberta ranchers who meet the chain’s new sourcing standards.—Marcie Good