FIESTA OF OPPORTUNITY

Restaurant’s 8 brands feast on sales of $250+ million a year.

E. Gene Street (left) and John D. Harkey, Jr. are the movers and shakers who inspire great things to happen in their franchise opportunity. The enterprise is booming and shows no signs of slowing down thanks to the magic these gentleman create in their marketing wizardry of products that the consumer craves and in their ability to translate their enthusiasm and positive outlook to every franchisee.

With eight successful brands already in its stable, CRO’s Mexican Concepts are showing plenty of sizzle. The can-do spirit of the principals of this mega-bucks giant is inspiring reading for all entrepreneurs.
Although they both come from the small central Texas town of Brownwood, John D. Harkey, Jr. and Gene Street are as different as the Lone Star State is big.
Both are partners in Dallas-based Consolidated Restaurant Operations, Inc., which operates and franchises 135 casual dining restaurants in 18 states and Canada. Its eight brands encompass the Mexican, Italian, American Grill and steakhouse segments and include El Chico Café, Cantina Laredo, The Spaghetti Warehouse, Good Eats, Lucky’s Café, Silver Fox Steakhouse, III Forks Steakhouse and Cool River Café.

As CEO Harkey oversees the day-to-day operations of CRO, which employs more than 6,000 full- and part-time employees and had system-wide sales of more than $251 million in 2004. Harkey is a lawyer with an MBA from Stanford who worked for Goldman Sachs on Wall Street and is comfortable keeping a low profile.

Street, the famed Dallas restaurateur, is the company’s chairman and the public face of CRO. In 1975 he founded the Black-eyed Pea chain of family restaurants before selling it in 1986 for $45 million. Street has been profiled in countless magazines. A self-described “renegade,” Street used to shock industry execs by wearing his hair at rock-star length. A former partner once told the amusing story of how Street used to regularly pilfer all the pennies from the cash register at a bar they owned—until he finally drove to the bank with the entire bed of his pickup truck crammed with jars of pennies.

Though they may go about things differently, Harkey and Street—along with third partner, attorney John Cracken, who handles CRO’s special projects and has been called “arguably the most talented litigator in the Southwest” by The Wall Street Journal—have used sound decision-making and an extraordinary commitment to service excellence to quietly position CRO as a force to be reckoned with in the restaurant industry.

“The key ingredient is our team spirit and attitude around this company that we can do anything,” Street said. “We think we can build a rocket ship. We have a can-do attitude and we’re happy to tackle the task, whatever it may be.”

Industry newcomers Harkey and Cracken entered the restaurant business in 1998 when they teamed with Street to purchase El Chico, a Dallas-based and publicly traded casual, Tex-Mex concept that was founded in 1940. It was the first of seven strategic acquisitions CRO made between 1998 and 2000 to build a core platform of different restaurant segments.

Those include El Chico and its sister concept, Cantina Laredo, which features gourmet Mexican cuisine in an upscale atmosphere. The Spaghetti Warehouse has long been a mainstay of Italian food lovers, while Cool River Café, III Forks and Silver Fox are upscale steakhouses. Good Eats and Lucky’s Café specialize in home-style American cuisine.

“We basically took what had been a one-horse company and expanded it into an entire stable,” said Harkey.

CRO has done it quietly, too. While the engaging Street might seem omnipresent, CRO has for the most part gone about the business of establishing its brand lineup without seeking the limelight. Instead, the company has been constantly working at perfecting operations and running a tight ship, or as Harkey so succinctly says, “We’ve been working on executing our game plan.”

El Chico Café is CRO’s largest brand, and having been founded in 1940, was one of the first Tex-Mex concepts in the United States. CRO operates 57 company-owned and 24 franchised El Chico Cafes in 11 states, with 2004 sales of $124 million. Cantina Laredo has 10 locations, including two franchised locations in Florida.

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