A Tradition of Innovation and Expansion
The Riese Organization is one of the largest restaurant management companies in the New York City. The Company owns and operates approximately 50 restaurants in the Metropolitan area. Included in the restaurant portfolio are such nationally known branded concepts as T.G.I. Friday’s, Tim Hortons, Pizza Hut, and KFC. In their 74 year history, the Riese Organization has also developed its own proprietary concepts including Tad’s Steaks, Charley O’s and Tequilaville. Located at 560 Fifth Avenue, the Riese Organization is one of the largest private employers in New York City with nearly 1,500 employees.
Founding of the Company – 1940
The Company was founded by Irving and Murray Riese in 1940 with an initial cash investment of $400 for the purchase of Paul’s Luncheonette on East 40th Street in New York City. Several years later, the Riese brothers sold the luncheonette for $35,000. This success spurred the Rieses to begin a program of buying troubled restaurant properties, refurbishing them, and then selling them for a profit. Their main focus in these ventures was always for the property to be in a prime location. In 1953, the Riese brothers began to slowly expand their operations and develop their own restaurants for the long term. They purchased prime New York City real estate for the purpose of operating additional restaurants or sub-leasing the sites to other businesses.
Acquisition Stage – 1961-1979
In 1961, the Company acquired Child’s Restaurants * “The nation’s host from coast to coast”. Child’s was a table service chain of coffee shops with 25 locations. In 1969, the Company acquired Longchamp’s, a publicly-held tablecloth chain of higher-end restaurants with 9 locations in New York City, including its flagship restaurant, Mark Twain’s Riverboat, in the Empire State Building. Other notable restaurants included Luchow’s, The Auto Pub, the Steer Palace, and the Downbeat Restaurant & Nightclub.
Between 1970 and 1979 The Riese Organization had become a powerhouse restaurant and real estate company in the New York City market. It gained dominance in the restaurant industry by using its acquired chains and their dynamic locations to propel new and growing concepts onto the New York scene, including the Brew Burgers. Many of these acquired chains went on to become the leading chains of the ’80s.
Six Mayflower Donut shops were acquired in 1975 and 26 Schrafft’s restaurants were acquired in 1978. Then, in 1979 The Riese Organization signed on for its first franchise, the Beefsteak Charlie’s restaurant at 44th Street and Broadway. This became their first lesson in the economics of being a franchisee, as they took a moderately successful restaurant and turned it into a spectacularly profitable one.
Evolution of Turnaround Strategy
The Company built a successful strategy around purchasing troubled restaurants in prime locations with below-market, long-term leaseholds. By converting part of the space to a new restaurant concept and leasing the remaining area to third party subtenants, the Company was able to subsidize its rent expense. Because the Company was not wedded to any single restaurant concept and management had the ability to operate a variety of different restaurant types, the Company was able to convert other people’s failures into successful new restaurants. This sixty-year-old strategy, which focused on location and not concept, continues today. Many of the Longchamp’s and Schrafft’s locations, for example, which the Company acquired in 1969 and 1978, respectively, have changed names and fare during the past 20 to 30 years. However, the original locations continue to be controlled by the Company. What was considered prime real estate in 1969 and 1978 is even more prime today.
Development Stage – 1972 to Present
In 1972, the Company created and began to develop the Brew Burger concept, which grew into a chain of 35 restaurants. As a result of its success with its own chain the Company developed other restaurant chains including Charley O’s, Tad’s, Lindy’s, Tequilaville and others. The tradition of creating and developing its own chains continues today with the introduction of Martini’s, The Java ShopSM, and Joe Franklin’s Memory Lane Restaurant. Generations of New Yorkers have eaten at a Riese table. Other restaurants owned by The Riese Organization include Chock Full-O-Nuts, Cobb’s Corner, Toots Shor, T.G.I. Friday’s, and Houlihan’s.
Innovation & Industry Leadership
In 1979 the Company had grown to include more than 100 restaurants. At that time it acquired its first franchise, Beefsteak Charlie’s. The Company acquired 17 Chock Full-O-Nuts coffee shops and six Tad’s® Steaks in the 1980’s, and by 1982 had pioneered the store-front food court concept, combining multiple franchises under a single leased premises. The food court configuration consists of a cluster of branded independent restaurants situated in one common location. This revolutionary formula fueled the Company’s explosive growth into the 1980’s. By housing a Pizza Hut, Nathan’s, KFC and Dunkin’ Donuts under one roof, for example, the Company was able to greatly increase a location’s traffic by offering customers a more diverse menu selection and the convenience of one-stop shopping.
New Leadership – 1993 to Present
Since taking over the leadership of The Riese Organization in 1993, Dennis Riese has forged his own path, redefining the company in virtually all areas. These areas include a bold branding strategy that leverages the diverse restaurant holdings under a single quality standard emblem, “Riese Restaurants”; a move away from the quick service franchise model adopted in the early ’80’s; and a move toward restaurants featuring outstanding food, service and design.