Looking to expand its customer base, the Tampa restaurant chain is developing three new brands in the area.
Outback Steakhouse's corporate honchos can look out a window of their Westshore headquarters building at a living laboratory of the company's latest growth strategy.
Around the corner are three new restaurants Outback hopes will grow into the next Carrabba's Italian Grill, the company's second popular national chain.
Roy's and Fleming's Prime Steakhouse & Wine Bar are clones of established restaurants whose founders signed on as Outback partners. Lee Roy Selmon's is a new concept the company launched with the Tampa Bay Buccaneers Hall of Fame defensive end and Outback corporate director.
Selmon's laid-back atmosphere and down-home food fits comfortably with the casual dining style of Outback and Carrabba's. But the other two joint ventures, along with Zazarac, a southern Louisiana-style restaurant in South Tampa, represent the company's expansion into upscale restaurants.
"We felt strongly there was an opportunity to move into not fine dining, but upscale casual dining," said Michael O'Donnell, Outback's chief executive of new concepts. "It's a place where our customer base can graduate to."
The average per-person bill at Fleming's is $46; at Roy's it's a couple of dollars more. The average Outback customer spends just under $18, and Carrabba's typical diner drops $19.50.
Outback struck different joint-venture deals with Roy's and Fleming's owners last year.
The company agreed to buy two existing Fleming's in Arizona and California, plus four under development. All new restaurants after that would be a 50-50 split.
Roy's Restaurants and its licensees held onto their 17 restaurants spread as far afield as New York, Tokyo and Hawaii. Founder Roy Yamaguchi and his investors agreed to put up half the capital for the joint-venture restaurants.
The deals reflect why Outback and its partners consider themselves a good match.
Roy's maintains control of the food side of the business: hiring and firing the top chefs, designing the kitchens and developing menus and wine lists. Outback provides management, real estate expertise and buying power for kitchen equipment and certain other products.
Fleming's controls the product, too. But Outback also gave its partner the financial muscle to expand quickly, said Bill Allen, Fleming's chief executive. "We didn't have the $100-million it would take to start a brand," he said.
About the same time Outback was striking the joint-venture deals, company officials got a chance to buy 20 acres at Boy Scout Boulevard and Lois Avenue.
The company already agreed to buy a corner of the old MacDonald Training Center site from the Thayer Group, a Tampa developer, for Lee Roy Selmon's, said Carl Sahlsten, vice president of real estate and development for Outback.
When Thayer's WestPort office and hotel project stalled, Outback took over the developer's contract with the non-profit training center. The company sold the hotel and office land but kept 6 acres to cluster three restaurants, a first for Outback, Sahlsten said.
The move helped cut costs for construction and landscaping. But the real payoff came when they opened last month and created a destination for diners in a spot not known as a restaurant row, said Robert Basham, Outback's president and chief operating officer.
"It becomes a place to go, a meeting place," he said. "We've been very pleased. Tampa has embraced it."
Basham and Russ Bendel, president of the Roy's joint venture, expect business to increase when the International Plaza shopping mall opens across Boy Scout and more hotels are built in the Westshore district, including one beside the restaurants.
"In Tampa, we think about 20 to 25 percent of the business will be from people in hotels, business travelers and vacation travelers," Bendel said.
Outback expects to open five or six new Roy's and Fleming's next year.
That's small potatoes compared with Outback, which has 656 restaurants and expects to add 70 to 83 more next year. Carrabba's has grown to 81 restaurants with up to 20 to be built in 2001.
Basham thinks Roy's and Fleming's could grow into chains of 100 restaurants with $500-million in annual revenues.
Selmon's is still in the research-and-development stage, he said, with officials working out kinks. On a recent Thursday evening, for example, walk-up customers parked on a dirt construction area because so many spaces were taken for valet parking.
Basham thinks there may be a market for two more Selmon's in Tampa. The concept might spread elsewhere in the country, perhaps under the names of local sports stars, he said.