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Commercial Real Estate
Business Observer Thursday, Dec. 9, 2021 6 months ago

Fire inspires restaurant chain to make changes

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First the pandemic. Then a crippling fire knocked a popular Tampa restaurant down again. Now it’s back, providing a jolt for its owners — and the shopping center.
by: Louis Llovio Commercial Real Estate Editor

The day after Memorial Day was pretty normal at Duffy’s Sports Grill on Dale Mabry in Tampa, in the Walter’s Crossing shopping center. The bar was pretty full, as it usually is. Diners packed the tables and TVs were on. A lot of TVs.

But that evening someone out for a meal, or possibly a drink, casually tossed a cigarette before going through the front doors and into the sports bar. There was a receptacle there for those waiting for a table or employees on break sneaking a smoke to dispose of their butts.

This particular diner missed the receptacle and the burning butt landed in the mulch. The wooden mulch. The dry, wooden mulch.

What happened next was a catastrophe the company, over several months, has turned into a triumph.

“It was dry enough that the mulch caught fire,” says Joe Webb, president of the Palm Beach County-based chain of restaurants. “The fire crept up behind the wall, so we couldn’t see it. It was between the walls.”

 “We don’t know when it happened,” Webb adds. “It could have been 5, 6, 7, 8 o’clock. We have no idea.”

What they do know now is as the fire raged between the walls, employees and diners went about their lives and their work. At about 10:30 p.m., the chef noticed smoke. There’s a big hood that sucks the smoke out, so he just figured there was something wrong with the hood.

But then he walked into the half-filled dining room and noticed smoke there as well. The chef and staff cleared everyone out and called the fire department.

Turn around

Firefighters came and did their work to extinguish it. But the building was filled with two or three inches of water, all the wainscoting was peeling off and the walls had absorbed so much smoke a special paint would be needed to make sure the smell didn’t come back.

Rather than let the fire disrupt the bottom line, though, the company saw the restaurant’s closing and the needed repairs as an opportunity to rebuild better and to introduce new elements it will now use at other restaurants. 

Over the past several months Duffy’s has been working to renovate the restaurant, giving it a new look. This means a new color scheme on the outside, new flooring in the bar area, new tables, carpet and color schemes, 3D pennants, new bathrooms and a floor-to-ceiling mural covering two walls that feature the area’s most notable athletes. 

On Nov. 29, about six months after the fire, the chain reopened the refurbished location with its management team still intact and some original employees back. Webb, 55, says the insurance company awarded Duffy’s $450,000 and then Duffy’s put in another $300,000 to refurbish the restaurant. “We decided, let’s take a negative situation and turn it into a positive,” Webb says.

Still, the Tampa fire came as the company was rebounding from pandemic-induced shutdowns and beginning to deal with some economic headwinds in its wake.

Unlike many restaurants and chains, for one, Webb says when the pandemic forced Duffy’s to shut down in early 2020, the company found it could not turn to a takeout or delivery model as many other eateries did to boost revenue. The problem? Customers didn’t think of it as the kind of place you ordered food from and picked up.  Duffy’s is a sports bar and restaurant, with dozens and dozens of TV on the walls and packed bars. It’s an experience-based place. Before the pandemic, only about 6% of sales were takeout.

After experimenting for a couple of weeks, the company decided to shut down all the restaurants. They stayed close for 100 days.

The restaurants reopened in July 2020, when officials began allowing dining rooms to open at 50% capacity.

Duffy's owns 33 restaurants mostly in South Florida and on the east coast of the state. On the west coast, along with Tampa, it has locations in Estero, Fort Myers, Cape Coral and Sarasota. The company would like to expand, but that is not likely to happen until 2023 and at a rate of about one or two per year. There are no plans right now to open outside of Florida.

Webb says the company survived the closures thanks in large part to a $10 million federal PPP loan. This helped the company stay afloat, taking care of employees and hiring new ones and paying necessary bills.

But, like when the fire hit in Tampa, the company used the downtime to streamline operations, cut costs, create efficiencies in how it delivered food and make its operations nimbler — and more profitable. The remainder of 2020 was good for the company, officials say, with profits higher than ever.    

Duffy’s declines to share revenue figures. Webb did say sales and revenue are 30% to 40% higher than last year. And he’s says the company is more profitable now than in 2019.

Same feel

Those streamlining measures came in handy in 2021 when the company had to deal with rising prices and expenses coupled with supply chain issues. The cost of wings, for example, have doubled since Duffy’s reopened last year.

“Pork, hamburger, steak. It’s all skyrocketed,” Webb says. “Plastic. Chairs. Everything has gone up in price.”

Also, losing Tampa during this period was tough because it had become one of the better performing locations, with huge numbers coming from events like the Super Bowl and the success of the local sports team driving traffic.

But without the changes, Webb says, “it would have been extremely difficult. We had to come out and be a different Duffy’s than we were and still keep the same community feel, the same family restaurant. And that’s who we are.”

And nowhere is that new approach balanced with what longtime customers expect more evident than when walking into the refurbished Tampa Duffy’s.

There’s still mulch outside of the restaurant. It’s just made out of rubber now.

 

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