Two separate stories about restaurants were in the local media today (Wednesday, March 13, 2013), one in the Atlanta newspaper, the other the MDJ. The first was about Manuel’s Tavern, the landmark political gathering spot in Atlanta, and the other Tommy’s Sandwich Shop on the Marietta Square. Both were more or less human interest stories about the different costs associated with doing business and trying to make it in a tough economy. I think it is fair to suggest that there were some political overtones between the lines deserving some observation and comment.
Brian Maloof has 52 employees at Manuel’s, among them ex-convicts that he thinks are worth a second chance. Rising food costs, which Maloof attributes to varied factors, are eating into his business. Also affecting his costs will be the federal mandate to provide health insurance to his workers. For years Maloof provided health insurance, but with rate hikes of thirty percent some years and competitor restaurants not covering their employees, he had to drop it. Of note is that these premium spikes occurred long before ObamaCare, and from memory it seems like the trend began in the early 1990s. But with the mandatory ObamaCare getting ready to kick in, Maloof stated that it will level the playing field. Instead of figuring out a way to cut the number of his employees in order to fall outside the mandatory provision in the healthcare law, Maloof is going forward. Between his increased food costs and ObamaCare, Maloof had no choice but to raise prices. And in return his loyal customers have said they will stay with him, that they won’t patronize those establishments that are cheaper. If ever this man gets it, it is Brian Maloof. He truly understands the concept of loyalty up and loyalty down, that it matters that you take care of your workers, and that your workers will reward you in turn by giving their all and more to ensure that Manuel’s continues to be a successful business. And Maloof can be contrasted with all too many business leaders who know the price of everything and the value of nothing, in this case the value of the employees.
Closer to home Tommy’s Sandwich Shop is closing its doors after 36 years. The landlord wants a $550/monthly rent increase on a current rent of $1,200. Considering the relatively small profit margin on this type business I suspect that Mr. Smith had no choice but to shut down. He built a restaurant with a lot of loyal customers by providing a good product at a good price. And people rewarded him by coming back, by becoming the regulars that can make the difference between success and failure. But times change and competition began to erode some of that loyalty, although from the report it appears that he could still eke out a living. But the landlord wouldn’t budge on the rent hike despite acknowledging that Mr. Smith has been a good tenant. In other words, the landlord is willing to change horses in the hope that a new horse will be a better deal than the old reliable grey mare. Loyalty in these tough times and free markets seems not to matter so much to some.
No one ever said that capitalism and free markets would produce a utopian economy. No business can survive without making a profit. But Brian Maloof and Tommy Smith bring another dimension to some of the cold side of capitalism. In their own ways they chose to take the high road by factoring into their business models the importance of people to their success. They care(d) about profits and their workers, and they were never on the starting line to compete in a race to the bottom to cut costs, raise prices, and enrich themselves. May our communities know more Brian Maloofs and Tommy Smiths in the future.