Image Credit: CFJC Today

By Adam Donnelly

CHANGING TREND IN HOSPITALITY

Kamloops restaurateurs weigh in on the recent franchise restaurant closures

Feb 22, 2020 | 11:53 AM

KAMLOOPS — It started with East Side Mario’s in 2013, followed by the Keg in 2016, then both Montana’s and Milestones in May of 2019. Swiss Chalet and Harvey’s closed their doors for good in Kamloops on February 7th. They are the two most recent casualties in what appears to be a mass exodus from the Kamloops restaurant market by Recipe Unlimited, likely the largest corporate restaurant operator in Canada.

Swiss Chalet and Harvey’s closed February 7th, 2020. Both brands are owned by Recipe Unlimited. Image Credit: CFJC Today

“What’s impacting those large businesses is impacting small ones, too,” Tyson Andreykew, 2nd VP of the Kamloops Chamber of Commerce Board of Directors explains. “Costs are going up. We see increases in costs of fuel, of food… Particularly when you’re talking about restaurants, costs of our employees, with minimum wage.”

A pair of local restauranteurs have seen significant changes in how diners choose where they want to eat.

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“The Internet has changed [people’s] ability to find that locally owned spot, so that flag that you fly under has become less important,” Mitchell Forgie, owner of Red Beard Cafe on the North Shore explains. “[Being a franchisee] costs you a lot of money, but really I don’t think it creates a lot of value for you.”

“The Food Network has really opened everyone’s eyes to what food could be and what the possibilities are when cooking,” Maeghan Summers, who operates both the Noble Pig and Forno of Fifth, says. “What’s been really exciting about this process is seeing people come in and go ‘Hey, where is this carrot coming from, where is this tomato coming from?'”

Technology has introduced another issue that keeps customers from going to eat: online food delivery services.

“Now guests are getting everything at their fingertips and ordering, instead of going into your restaurant and maybe having that dessert and having that drink keeps these restaurants afloat,” she says.

Sometimes customers buying coffee or dessert can make a huge difference when it comes to the razor-thin profit margins, that is the norm in the hospitality industry.

“If you start from revenue, 35% [goes towards] labour, 35% food costs, 20% overhead, [which] leaves you 10% profit,” Forgie explains. “The average restauranteur is making 10% before taxes, take-home if you’re lucky, and doing everything right.”

“It’s a difficult line of work, and people who are running these restaurants are working around the clock to make it work and to offset the costs of bringing other people in because that just adds to their costs,” Adreykew says.

Ultimately, consumers decide which restaurants succeed and which fail. In this city, that shift appears to be in favour of local establishments.

“Kamloops is going through a really unique shift, and I think that we’ve got a lot of options,” Summers says. “Those options are appealing to the market right now, compared what was existing a few years ago. That’s why you’re seeing that shift with those restaurants.”