Success off the Field

Success off the Field

CEO Q&A by Jean Gruss | Editor/Lee-Collier

If Lee Roy Selmon's exploits on the field are any indication, the restaurants that bear his name will likely do well, too. He's got strong backing from the founders of Outback Steakhouse.

Everyone knows Lee Roy Selmon.

The former Tampa Bay Buccaneer now enshrined in the NFL Hall of Fame even has a highway named after him in Tampa. He's also well-known for his efforts on behalf of the University of South Florida's athletics department and now is president of the USF Foundation Partnership for Athletics.

But fewer people may know him as a restaurateur and board member of OSI Restaurant Partners, the chain known for its hugely successful Outback Steakhouse and Carrabba's restaurants. In fact, Selmon owns a chain of seven restaurants bearing his name in partnership with OSI.

The Review caught up with Selmon as he was celebrating the opening of his newest restaurant in Fort Myers recently. He discussed the transition he made from football to business and the move by OSI's founders to take the company private in a $3.2 billion deal (shareholders are scheduled to vote May 8) and what it takes to run a successful restaurant.

Q: How did you make the transition from the NFL to the restaurant business?

A: I was fortunate to have an opportunity to play in the National Football League and during that time I met a lot of nice people in this area, including the founders of Outback Steakhouse - Chris Sullivan, Bob Basham and Tim Gannon. Serving on their board of directors, we began a discussion about doing a partnership together to create a restaurant. It's through those discussions that Lee Roy Selmon's was born. The first store opened in November 2000 and now we're up to store number seven Fort Myers. It's been a wonderful partnership because they're a proven commodity. Their skills, expertise and every aspect of the restaurant business was already in place. It gave Lee Roy Selmon's a real opportunity to be successful. We're really pleased how we've progressed so far.

Q: Almost three years went by before you opened a second Lee Roy Selmon's restaurant. What did you learn from opening that first restaurant?

A: When you open up a brand new concept from the ground floor like that there's an awful lot of fine tuning that has to happen, from your menus, to your efficiencies, operations and labor costs. There are so many things that happen between when the order gets to the back of the restaurant and out to the table.

Q: What was the biggest challenge of opening the first restaurant in Tampa?

A: That restaurant is so huge. It probably seats over 300 people, so that creates a bit of a challenge on every aspect of the business, from the labor costs to the customer service. We had to make sure that every customer is taken care of individually, like they deserve to be when they walk in. We had an awful lot of menu items that had to be whittled down.

Q: What menu items were axed?

A: That's been so long ago (laughs). You can't have too many of those because it impacts a lot of the inventory. We whittled down maybe one fourth of the menu. You identify which ones are selling the best and then you factor in all the other components that go into an item making it out onto the table.

Q: The Outback concept is well known for requiring managers to buy into the business. Is it hard to find managers willing to do that?

A: No. The philosophy that has been well established by Outback has been well embraced. There's an incentive built in there for them and I think they like that because it really puts it into their hands to manage to the best of their abilities. We've had no problems finding managers who want to have this opportunity. Word gets around. If you work hard, you can be very successful in this business.

Q: What impact will the Sullivan-led private buyout of OSI have on the restaurants and the company?

A: I think for our customers across the board and in all concepts it will be pretty transparent. It's just going to give them an opportunity from a private standpoint to do a lot of the things I know they believe would be more efficient and operate even better than they are in the public sector. That's the bottom line.

It's harder and harder to operate in the public eye anymore. You have so many different hedge funds out there that want to put pressure on well-operated organizations. They just want to see something done differently. From what I've seen, on a lot of those deals, they just want to come in and make a bunch of changes, try get the stock up, sell it and they're out of there. And you're left to fill that big void.

Maybe later on, who knows, they may take it public again. They're talented. They have such a fabulous reputation in the industry. I trust and know they'll do a fabulous job with this change.

Q: What about the company's growth plans? Will that change when the company is privately held?

A: I think performance determines growth. We have to perform if we want to grow. You have to look at your numbers at the end of the day. If they're performing at an appropriate level, the coffers open up to do more.

Q: How many more Lee Roy Selmon's are going to open and where do you see opportunities?

A: We're constantly looking. There aren't any I can mention right now. There's a lot of opportunity along the I-75 corridor, along the I-4 corridor, literally all over the state of Florida. We really like to stay focused. We have seven restaurants and we want each one of those to perform at its absolute best. As those are performing well, we'll look at eight, nine and 10.

Q: How many per year do you envision opening?

A: We've been averaging one a year since 2002. I don't want to put us in a box as to what we're going to do. Performance dictates a lot.

Q: You're a celebrity in the Tampa Bay area. How do you take your name recognition beyond Florida?

A: This is a people business. My name may carry a little bit and maybe catch somebody's eye, but it's not going to keep them. At the end of the day it still boils down to having a great team of folks to let customers know that we appreciate them being here. I think that's the thing that's going to determine how far this restaurant concept is going. That's a strongly emphasized component of our business strategy. It's the hospitality, the service and the food combined together.

Q: How long does it take for a Lee Roy Selmon's to become profitable, such as this one in Fort Myers?

A: If we're headed in the right direction, you'll begin to see the profitable side in five or six months. If it takes a little longer, that's fine. Each one has its own timeline.

Q: Many of our readers are budding entrepreneurs. What advice do you have for them if they want to open a restaurant?

A: One area that often gets overlooked is marketing. You have to let people know you opened, that you are in town and you want them to come by. Often, that's an expense line that gets left out. You do have to have enough capital to go through that breakeven point. I would advise a little saved up in the bank account to keep the payrolls going.

Q: With your board membership and ownership stake in your restaurant, how do you balance your schedule with your responsibilities at the University of South Florida?

A: Fortunately, when we created the partnership with the founders of Outback, they have the expertise in this business. I'm wise enough to know you don't get in the way. They know how to operate this business, from start to finish. So I'm not required to be here to do any of that kind of work. I'm welcome and invited to. I really enjoy just coming and joining our team to let our customers know that we appreciate them being here and we don't take their presence dining with us for granted. That's what I enjoy most.