My August Feature...an hour with Ron Salverda. Enjoy!
Ron Salverda of CA Restaurant Enterprises is responsible for a few of the best dining spots in Alberta. In his career Ron has been a part of 37 restaurant openings. He has been a partner in 11 of those openings and today his company produces about $20 million annually. Hardly chicken feed yet Salverda is hardly in the spotlight.
Ron arrived in Calgary in 1996 and began locally by owning 2 Jack Astor’s locations. He sold those businesses in 2000 to build Murrieta’s Calgary (opened in 2001). Since it’s opening Murrieta’s has been a total success. Consistently good food, a gorgeous dining room and customer-first service have all contributed to the flow of happy diners. With the hiring of celebrity chef Ned Bell the restaurant grew annual revenues by about 18% and after Bell’s departure revenue has grown by another 20%. Apparently you don’t need a celebrity chef to keep a business healthy…just don’t tell the Food Network!
In addition to Murrieta’s Calgary there are newer locations in Edmonton (White Avenue) and Canmore and while they do not produce the revenue Calgary does they are profitable. Besides the three Murrieta’s, Tribune restaurant opened about a year ago to critical acclaim and there is also the Siding Café, Palette Coffeehouse, and The Cellar Wine store all within a few blocks of each other downtown. To say Ron has quite a bit going on these days is an understatement…especially when you consider that about 80% of all restaurants that open fail. Ron’s model for expansion has been a simple one. He maintains that each space he owns has to stand on its own two feet. He doesn’t rob Peter to pay Paul as the saying goes. In addition Salverda has been able to draw solid partners to his various projects and claims his original investors in Murrieta’s Calgary made their money back in 18 months…the best case scenario was supposed to be 3 years! Since then his partners have made their money back 4 times over in 5 years and have been given the option to pull their money out or contribute to new projects. Judging by the expansion Ron has overseen (4 businesses in 12 months) it seems clear what the investors have done with their money.
Ron’s model for investors seems an unlikely one…he owns around 40-50% but controls the majority of the vote and his backers remain inactive in the day to day business. Think about that for a second…he convinces people to give him money for a type of business that fails 80% of the time while requiring them to be inactive. I was surprised but when I asked how he has achieved this his answer was basic, and a tad cocky. His words were “When you need legal help who do you hire? A lawyer. When you need a tax return done who do you call? An accountant. They’re specialists. When you want to open a restaurant I am the specialist”. While this bravado sometimes rubs other industry people the wrong way the success of his various locations speaks for itself. I asked him what the secret is and quite candidly Ron maintains that after being in the business for many years he clearly understands how to prosper and is happy with 10-12% margins. He knows where he can push margins on certain items. He is excellent at controlling food costs and he is adamant that food purchasing is critical. As far as customers are concerned, Ron says providing value and giving them a reason to come back are key elements to success. This seems obvious yet when you dine around Calgary these days it’s clear that lots of places are missing the boat, big time. The lack of value out there is staggering but as long as oil revenues keep expense accounts flowing I doubt anyone will stop to notice.
Besides being savvy in the business and ensuring a good customer experience Ron has built a stable of loyal employees. Staffing is critical as anyone who has had bad service lately (thanks in part to Calgary’s labor shortage) can relate to. Finding good staff for the front of the house is tough. Salverda estimates that it costs him a minimum of $400 to get a new server up to speed. He needs to have about $4000 in sales to offset these training costs and even then it’s not a given that a server will stay around. In the restaurant industry the best servers always go where the busiest rooms are because they make the majority of their money in tips. Busy place = good money in most cases. There are servers making $100K a year in Ron’s company. Fortunately things appear to be getting better as the city attracts people but in markets like Edmonton and Canmore things are more difficult. They are not drawing new residents like Calgary. This has all sorts of implications for Salverda’s business. Besides escalating training costs and crazy wages being offered (even in fast food places) he has issues like food suppliers who cannot hire enough drivers/warehouse staff to deliver food as required. In one case Ron switched purveyors because they could no longer deliver 5 times a week. Delivery 3 times a week does not cut it. Food has to be fresh or the customer suffers and that cannot be tolerated. The food company would love to hire but simply cannot attract enough employees and maintain their cost structure. Crazy times to be sure!
Besides the issues associated with food purveyors and service staff Ron has to ensure a happy team of managers and back of the house staff (chef’s, cooks, dishwashers, etc.). The business is key, service is key, but if his food sucks or the wine glasses are dirty a customer won’t be back. Fortunately Salverda is quite happy with his various managers and kitchen staff. There’s always someone willing to offer a dollar an hour more but Ron maintains that if you treat them fairly and offer them a chance to learn you can maintain a core group that will ensure the customer experience meets the standard. In a kitchen it all starts with the chef and Salverda puts it bluntly saying that “no one wants to work for a prick!” Truer words have never been spoken. Ron admits that he works his teams hard but he is fair. His philosophy is simple, if it’s broken, fix it. Though not loved by all of his staff, he is respected by all and in this industry that’s half the battle.
Having dealt with various managers, servers, and bartenders who work for him I can tell you that he’s lucky to have the team he does. There are some quality people who care about your experience within CA Restaurant Enterprises. That alone puts Ron’s group ahead of at least 70% of the other restaurants in Calgary. On the down side, sometimes he takes abuse for being a bit over zealous and has a reputation for telling competitors how many covers he’s doing (some dispute his numbers) but I’ll say this, he does not back down from helping charity, he always treats people fairly and he not only solicits customer feedback, he uses it to get better. Comment cards are fine but Ron would rather ask a direct question and get a direct response. This is refreshing in an industry with the odd prima donna who thinks customers are too dumb to know what good value is all about.
The day we met for this article was his birthday and Murrieta’s had to be vacated during the lunch rush due to a bomb scare! Two pretty good reasons to reschedule but he made it anyway and was as candid as I could have hoped. While I will be the first to acknowledge that sometimes you need to take Ron with a grain of salt, he deserves a lot of credit for his efforts and I have no problems spending my money in his restaurants. That’s more than I can say for some restaurant owners in Calgary who hog the limelight and use the media (who love free stuff) to convince us that their $38+ steak served by the silicon princess is really worth it. Wake up, tune in, and enjoy supporting a guy who appreciates your business.
James