Sep. 28—Despite stiff breakfast competition, the owner and operator of six Elmer's restaurants sees opportunity in transforming the former McGrath's Fish House in Medford into the city's second Elmer's.
Thomason Hospitality Group owner Dave Thomason said he hopes the dinnerhouse he bought earlier this month at 68 E. Stewart Ave. will complete its transformation by spring.
He's the first to acknowledge the south Medford location is down the street from three competitors — IHOP, Shari's and Cracker Barrel — but for reasons ranging from its morning parking availability to dining room seat condition, Thomason sees numerous reasons why the 7,394-square-foot restaurant space he bought for nearly $1.7 million pencils out.
"When it became available, I thought it was a good opportunity for us in the Medford market," Thomason said.
Those reasons start with the performance of Medford's current location at 2000 Biddle Road. Open since the late 1970s, the restaurant has been under Thomason's operation for two decades.
"No matter where we go, there's a lot of competition," Thomason said. "I think we're the strongest breakfast restaurant around."
Thomason said sales at the Biddle location are up 11.8% compared with this time last year, a number that somewhat defies skyrocketing food and labor costs challenging an industry that already operates on razor-thin margins.
Other franchised restaurants Thomason operates — including six Pita Pit restaurants across Oregon, as well as Taprock in Grants Pass — all are up from the year before, he said.
Taprock is up 18% and saw "four-plus million dollars" in sales, Thomason said. Some of his flagship restaurant's performance is weather-dependent, helped by comparatively mild smoke and fire this year that otherwise limits outdoor seating.
Asked if he'd be interested in expanding Taprock to Medford, Thomason said he's open to the possibility, but he wants to license the restaurant format he owns to another franchisee.
"Medford or Eugene would be my targets," Thomason said.
Taprock is Thomason's brand, and he said he structured the business in a way to eventually set up franchises, but wanted to "refine the formula" before he made franchising a priority.
"I think that we're nearing that time, for sure," Thomason said.
Within the restaurant industry, the largest costs typically are ingredients and labor, and Thomason estimated the two are 8% higher this year than last year. Because of the increases in costs, he's had to raise prices twice in the past year.
"You just hate to do it, but you have to," Thomason said.
Supply chain challenges continue to wreak havoc on the restaurant industry — impacting everything from a proposed Elmer's biscuit special to the availability of restaurant equipment.
Considering those challenges, a spring 2023 opening goal is rapid by typical restaurant industry standards, but Thomason isn't starting with an empty space — he's starting with a location very similar to the Eugene McGrath's he transformed into an Elmer's four years ago.
"It very much appealed to me because of how great a conversion the Eugene store made for us," Thomason said. "Our kitchen, and the operations there and the amount of seating there has been a great success for us."
Because of the Eugene location's success, he already has buy-in from the Portland-based restaurant chain.
"They love what we did with that," Thomason said. Someone from Elmer's corporate will line out the decor for Thomason to order, but he anticipates the changes will include replacing the glass seafood case at the front entrance with a large fireplace.
"Elmer's is known for our fireplaces," Thomason said.
Thomason already has ordered new flooring, expected to arrive in January. One of his vice presidents is working to inventory what's worth keeping and what they'll need to replace.
"By next week, I'll have ordered all the equipment," Thomason said.
Because of supply chain challenges, the amount of carryover for the new restaurant will be far higher than the clean-sheet designs common five years ago. For instance, Thomason said orders for new walk-in coolers can take a year to fill, making the McGrath's location's intact kitchen a selling point.
"In our industry, the utilization of used equipment has gone up tremendously," Thomason said. "Using what's already there takes on a whole new meaning."
He pointed to booths in the dining room still in sound condition, and a hood system that — while hardly new — is still fully functional.
Thomason said he and McGrath's founder John McGrath served on the Oregon Restaurant and Lodging Association board together, and the restaurant left everything intact and in clean, orderly shape before handing it off to him.
"You don't always get that on a transition like this," Thomason said.
Thomason's company is in the process of hiring one of the former McGrath's managers to run the new Elmer's location, and he has interviews planned with some of the McGrath's staff who've expressed interest in coming on board.
"We can begin to train them immediately in the Biddle Road Elmer's," Thomason said. "They don't have to sit back and wait for us to open for business."
Reach web editor Nick Morgan at 541-776-4471 or firstname.lastname@example.org. Follow him on Twitter @MTwebeditor.