River City Food Company

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By Jeff Davis (RCFC Retired)

West Central Investment Corp. was founded in 1969 by R. S. Den Uyl and Peter F. Secchia to open Michigan's second "Mr. Steak" franchise. It soon grew to nine (9) very successful stores. The "Starboard Tack" was added (forerunner of the Great Lake Steak Co. of East Grand Rapids) which was Grand Rapids' first non-reservation restaurant, followed by "Guthrie's Digs," and a "Fish and Chips" in Holland.

Universal diversified in the mid-70s into two new areas, food service and athletic footwear. Mr. Secchia's philosophy was to stick with the basics of shelter, food and clothing. So Great Lakes Mercantile, a subsidiary to sell Adidas footwear and athletic clothing, was formed. Two Michigan stores in college towns were purchased, and later, three retail outlets joined them. However, due to a pinched economy and burgeoning competition among other footwear brands, Universal sold the group in 1980.

More successful was the formation of Universal Restaurants, Inc., at the 1976 annual meeting. Originally, this subsidiary was only a franchise of Mr. Steak restaurants in Michigan and Pennsylvania. While the new Universal Restaurants represented the corporation's first venture into food service, Mr. Secchia had been active in ownership of specialty restaurants in the Midwest. R. Dale Lausch, Universal's comptroller and himself a native Pennsylvanian, was named to shepherd the new group; and the company's first Mr. Steak location in Lancaster, Pennsylvania which opened in January, 1977 was consistently among the top ten volume producers in the national Mr. Steak network.

With Peter F. Secchia as CEO and Chairman, the Universal Companies made an offer to the shareholders of West-Central Investment Corporation to merge with that firm via a stock exchange. West-Central Investment then owned and operated a group of nine Mr. Steak properties in western and central Michigan and one in Ft. Wayne, Indiana. The statutory merger was approved by directors of both corporations in September, 1977; and with sale of one location to an officer of the previous company, Universal had nine Mr. Steak restaurants at year's end.

Prior to the merger, physical plants of these West-Central properties had deteriorated and cost-cutting policies had marred its public image; so Universal reorganized and redecorated these restaurants during the next two years, and management rededicated itself to quality service. (Because it was isolated in its market for efficiency of supervision, the Ft. Wayne operation was later sold.)

Universal Restaurants Grow

As the decade of the 80s opened, a new Wyomissing, Pennsylvania Mr. Steak was inaugurated. And Universal's Battle Creek, MI achieved the second-highest opening volume in the Mr. Steak system to that date. Mr. Steak's Denver headquarters presented its 1979 International Franchise Award to Universal Restaurants, Inc., for innovation and development of programs significantly enhancing the Mr. Steak concept.

Three additional specialty operations were established by Universal in Grand Rapids, Michigan this decade: Pietro's Ristorante, an Italian-American restaurant with lounge; and later, 1913 at the Plaza, an elegant dining room with its adjacent Canal Street Lounge, plus Tootsie Van Kelly's, a Good Time, Fun Time Food saloon featuring nightly entertainment.

The 1913 Room and Tootsie Van Kelly's came alive dramatically in the fall of 1981, openings celebrated simultaneously with that of the renovated Pantlind Hotel (now Amway's Grand Plaza downtown). This was all part of Celebration on the Grand II during which the Gerald R. Ford Museum and the city's art museum were also opened in the glare of national spotlights accompanied by the Presidents of the U.S, Canada and Mexico, celebrities (including the Bob Hope show) and hundreds of thousands of sightseers—certainly the most glamorous event in Grand Rapids' history.

Two years later, Universal Restaurants also purchased the Great Lakes Shipping Co. of Ann Arbor, an upscale steak and seafood restaurant with liquor service.

In May of 1982, Mr. Secchia announced the promotion of Dale Lausch from vice president of operations at Universal Restaurants to be the president of that company.

That April saw the first customers dining in Universal's York, PA Mr. Steak followed by two Harrisburg openings—Mechanicsburg later that year and Union Deposit in mid-1983. At that time, Universal Restaurants concluded a pact with Mr. Steak, Inc., reducing franchise fees based on Universal's agreement to accelerate expansion of its Mr. Steak locations in the east. Development of additional restaurants was targeted; and a second Lancaster, PA Mr. Steak opened in late 1984; a unit was constructed in Williamsport; and property was purchased for a popular opening in Hagerstown, Maryland in 1985. That year diners also followed the ribbon-cutting of a Mr. Steak in the populous WilkesBarre/Scranton area of eastern Pennsylvnia.

To concentrate in the area of family restaurant activity, Universal Restaurants in June of 1983 had sold its haute cuisine 1913 Room to the landlord Amway Hotel Corporation following a highly successful operating period during which the 1913 Room captured Grand Rapids' "Restaurant of the Year" honors.

Following its decision to concentrate on family restaurant operation (reducing exposure to potential liquor liability), Pietro's Ristorante and Backdoor Pizzeria in Grand Rapids was sold to URI's former marketing director, Mike Passero. The transfer of Tootsie Van Kelly's to the Amway Grand Plaza Hotel was also announced that summer. The sale of Tootsie's left Ann Arbor's Great Lakes Shipping Co. as Universal Restaurants' only remaining specialty operation.

Early in 1987, the old South Cedar Street Mr. Steak in Lansing, MI—the smallest—was closed to reopen in May to Universal acclaim at a bigger and better site down the street. It set volume records at its new location.

A New Era

In November of 1986, Universal's first Finley's American Restaurant debuted in Allentown, Pennsylvania. Earlier that year, URI had bought out of its franchise agreement with Mr. Steak International. That company, soon to file for protection from creditors, had not in recent times aggressively marketed its franchisees. Further, with declining red meat consumption nationwide, the name was limiting—i.e., how does one advise potential patrons unfamiliar with Universal Restaurants that quality seafood, chicken, etc. are served when the sign out front says Mr. Steak?

So the Finley's Family Restaurant concept was developed using a fine-tuned menu and decor plus the same full service philosophy which made Universal Restaurants one of the nation's most successful Mr. Steak operators. (Finley was the maternal grandfather of PFS)

The Allentown Finley's was so favorably received that another was added in the Philadelphia area of Langhorne next year. Other conversions were to follow, but the next two years continued to be business as usual. In 1989, PFS took a leave of absence, put his UFP stock in trust, and accepted the Presidential appointment to be the U.S. Ambassador to Italy.

The decade of the 90s proved to be a change of pace—a testing time. Flint, Michigan became the home of Universal's really fast food operation, "Hot & Now"—a hamburger and fries drive-through franchise with headquarters in Kalamazoo. Three restaurants were opened by Universal in the Flint area. Pepsico bought that chain in '93.

With the sale of Hot & Now, the corporation decided to become a Rally's franchisee, and Universal's first Rally's was activated in 1992. Additional units were added in 1993, Œ94 and Œ97. Then came the burger wars between McDonald's and Burger King, so margins eroded. It was only good judgment to sell the four Rally's operations as 1999 closed. Also at this time, Dale Lausch—one of the real principals in the operation of Universal Restaurants—had departed to become president of Universal Forest Products, and Jim Webb assumed Lausch's position.

After Ambassador Secchia returned, the public offering of Universal Forest Products, Inc. occurred in November, 1993. Universal Restaurants, Inc. was spun off from the Universal Companies to become a separate corporation. Investment bankers advised that it would be preferable for Universal Restaurants to be independent and not remain a subsidiary since there was not a similar combination for analysts to follow.

Always politically minded, Peter Secchia was friendly with Grand Rapids' Gerald R. Ford, became Michigan's Republican National Commiteeman and was also a friend of George H. W. Bush. With his intelligence, knowledge and Italian-American background, he was chosen and performed superbly as American Ambassador to Italy. This sojourn created the sale of Pietro's to the V.P. of Marketing, M.J. Passero. Upon completion of his term and return to the U.S., Universal Restaurants became involved in a large number of acquisitions. The five Schelde operations in Grand Rapids (formerly Mr. Steak restaurants) were purchased and converted to Finley's. Unfortunately, patronage of the Schelde properties had been slipping. The instant conversion to Finley's, and the management decision to eliminate the "free" salad bar, alienated Grand Rapids guests. By the end of the year, the five Schelde restaurants were sold.

Pietro's Ristorante, and the accompanying catering service called Applause, owned by Mike Passero was re-acquired; and Passero was named to head up a division of River City Food Company. Finley's, of Holland, MI was converted to Pietro's Ristorante in 1995; and later that year a third Pietro's was opened on Northland Drive in Grand Rapids. (River Mountain Golf came with this Pietro's.) The catering service, Applause of Norton Shores, MI was opened the next year, but this was sold in 2002.

Return of a Restaurateur

In February of 1996, Dale Lausch had returned as CEO to bring stability to Universal Restaurants, now called the River City Food Company.

A brief flirtation with the bagel business proved illusory. Manhattan Bagel opened in Lansing, MI in 1997, and a second Manhattan Bagel was opened in Okemos (suburban Lansing) shortly. By the end of the 90s, however, the bagel market overflowed. They were everywhere—in supermarkets, convenience stores, catalogs, frozen, etc. While initially performing well, as a stand-alone business... unproductive. The fad was over.

Noting decreased volume by 1998, we converted one Lancaster Finley's in eastern Pennsylvania to a Perkin's Family Restaurant. It was operated for two years, but the corporation decided that the concept in this part of the country no longer represented growth. By the end of the 90s, our group of Finley's in the East was sold—and RCFC went west.

By the last year of the decade, River City Food Company had opened the first BD's Mongolian Barbeque in Overland Park, Kansas (a major Kansas City suburb). After four years of operation, its track record continues favorable.

Inaugurating the new century, a second BD's Mongolian Barbeque was added in Tempe, Arizona. This store never reached the sales performance expected, reason unknown; although the location was within view of the Arizona State University stadium at a main downtown intersection. So the Tempe BD's was closed in 2002, space being sublet to a college hangout. Additional Mongolian Barbeque units in the Kansas City metro area is a viable opportunity for the company's forward movement!

As it stands today (mid-2003) the River City Food Company owns and operates:

• 7 Finley's American Restaurants in Michigan
• 3 Pietro's Ristorantes in Michigan (Pietro was PFS' paternal grandfather)
• Applause banquet and catering service, and
• BD's Mongolian Barbeque in suburban Kansas City.

Concerning Finley's, it continues to be successful in Michigan; and market opportunities remain for it in the state's smaller to mid-size towns. Expanding Pietro's is presently on hold giving the company time to fine-tune the concept. Though RCFC was ahead of the power curve, an abundance of Italian restaurants flooded the market. And as mentioned, adding more BD's Mongolian Barbeque restaurants in greater Kansas City is another opportunity.

In the Spring of '03, the company negotiated the buyout of Peter F. Secchia's family shares. He remained Chairman of the Board for one year and exchanged all SIBSCO, personal, and family equity for properties in three (or four?) locations. Because of this exchange, SIBSCO became an even bigger landlord for RCFC while R. Dale Lausch and his management team moved forward by reducing corporate stores closing its losing operations and moving the company forward.

A longstanding commitment to exceptional training and service, imagination and quality control of food and correct pricing and a remarkable ability to foresee market changes—all these lead to continued bright days for the River City Food Company.