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INSIDE DISH: Egyptian Cafe posts hot profits, fears smoking ban

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Inside Dish

Welcome back to IBJ’s video feature “Inside Dish: The Business of Running Restaurants.”

Our subject this week is The Egyptian Café & Hooka Bar, a recreation of a typical Egyptian street café by Cairo native Mohey Osman. Arriving in Indiana in 2006 and hoping to start a business, Osman found he had nowhere homey to hang out during the day beyond the relatively sterile Starbucks. He charged ahead with plans for a luxurious lounge that would provide a full menu for lunch, dinner and late-night crowds, plus water pipes called “hookas” that are de rigueur back in the Middle East.



“There wasn’t a place like back home where you could enjoy a sandwich, invite your friend for a game of backgammon or to smoke a hooka and watch TV,” said Osman, 36. “I thought, ‘We need something like that.’”

Growing up in Cairo, Osman worked in his family’s café. When he moved to the U.S. in 1996 to escape military service, he invested in a hooka bar located in the Washington, D.C., area in addition to starting a pizza joint in the same vicinity. When his American-born wife wanted to move to Indianapolis to be closer to family, Osman sold his stakes in the businesses and began eyeing new opportunities.

Crafting a menu based on Lebanese, Egyptian and other Middle Eastern cuisine (plus the occasional bow to Midwestern tastes, such as Philly steaks and cheeseburgers), Osman went about converting a train-car shaped former Sprint store in Broad Ripple into a slice of Cairo. He invested more than $170,000 in the startup, including $65,000 to build out and outfit the kitchen and $35,000 to construct and connect bathrooms to utility lines.

Opening in October 2007, the café began to do blazing business. Osman went from two employees at the start to more than 20 within a year. When an identical space became available next door in 2008, Osman took the lease for that space as well, increasing seating from 42 to 90 people and spending $70,000 on the renovation.

“We needed it,” Osman said. “We lost a lot of business from people who didn’t want to wait outside. It’s hard for me to let them in, because it’s hard for people to enjoy their time in the restaurant when it’s packed.”

The opportunity to smoke hooka pipes is a big draw. The ornate pipes are packed with flavored tobacco, and the smoke is cooled and filtered through water and then passes through a long tube to the smoker’s palate.

Osman estimates that hooka smoking accounts for about 40 percent of his gross sales (food, 50 percent; beer and wine, 10 percent), but close to 70 percent of his customers partake in the social custom. So, his chief fear is that the Legislature will pass a ban on smoking in public places that will eliminate smoking in his establishment, and thus torpedo his bottom line.

“That’s my nightmare,” he said, noting that other states that have passed smoking bans have exempted hooka bars. “Basically my whole business is based on hooka. If they stop me from selling it or serving it, my whole business will collapse.”

The Indiana House of Representatives passed a smoking-ban bill in January peppered with exemptions, such as bars, taverns, casinos and clubs run by fraternal organizations. However, Osman’s restaurant as currently operated does not appear to fall under the exemptions. The bill’s next stop would be a hearing in the Indiana Senate’s public policy committee, although a hearing has not been scheduled. The Senate would need to pass a version of the bill, which then likely would need to be reconciled with the House version, before it could be signed into law.

The business typically posts an impressive profit margin of about 25 percent, according to Osman. Gross sales in 2010 reached $815,000; net income was about $220,000. No wonder, then, that Osman is tentively planning on expanding. He's currently scouting locations downtown.

In the video at top, Osman describes the origins of the cafe and how hooka smoking contributes to the top line. In the video below, Mohey discusses the recent revolution in Egypt, what his family went through during the most chaotic days, and how he thinks the country will settle into democracy.
 

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The Egyptian Cafe & Hooka Bar
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6265 Carrollton Ave.
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(317) 255-4400
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www.theegyptianindy.com
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Concept: A restaurant and lounge patterned after Egyptian street cafes, specializing in Middle Eastern food and including hooka pipes for smoking flavored tobacco.
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Founded: October 2007
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Owner: Mohey Osman
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Start-up costs: $170,000, with a $25,000 line of credit and the rest covered by personal savings. Major expenses included creating two bathrooms and hooking into city sewer and water lines, which ran about $35,000, and $65,000 to build out and outfit the kitchen. An expansion in 2008 to an identical, adjacent retail space ran about $70,000.
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2010 gross sales/net income: $815,000/$220,000.
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Employees: 19
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Seating: Approx. 90
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Goals: To investigate opening a new location downtown, preferably on or near Monument Circle.
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Good to know: Patrons must be at least 18 years old, due to law regarding smoking establishments. On weekend nights, the cafe is a major draw for college-age patrons who wants to enjoy the bustling Broad Ripple atmosphere but cannot get into bars.
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  • Hookha Bars
    Leave the Hookha bars alone
    The are not bothering anybody other than the
    'busy-bodys.
    As Hank Williams Jr. once said..
    You mind your business and you won't be minding mine.'
  • Have A Nice day
    Louisville's a SEAPORT??!!
    MondrianFebruary 18, 2011 2:02 PM
    Where do they get people like BMA? Louisville's a SEAPORT??!! This guy's so tragically uninformed and grammatically challenged it's embarassing!



    With All do respect do you for the lack of Historical Wisdom it seams you have! Louisville "Kentucky" or "Bloody hunting ground" as it became to be called was a in-land Sea Port and Still is! It was for many years long before White man came! It was one of the main trading routs for the the native americans, Before The American Indians was so over run and the Oaths of Men Like George Washington and the Seneca Chief the Half King was so for gotten with the signing of the Daws Act of 1887 that so made the native people pay rent! Other wise if those vows or Oaths had been so up held they the true native peoples would be like the oil rich kings of the Middle east! As I Understand Seneca park is to be so named from such! The Ohio river is used to carry Alot of coal to the power plants on the Ohio that gives power to Alot of Indiana and KY! As for your stated views of my wording! Thanks for your insight! so I came back to by request from IBJ staff with the last three words I left in my 1st reply! And I am Not sorry my statement! Better is an open rebuke then a Conceld love, I add this as for such Your shallow rebuke reflects your upset because some one understood more then you! You may want to do abit more ready before you speak or in this case write. You just may learn something that would stop you from voting for leadership as like Obama! The same kind of Leadership of the democrats that sought to dis reguard such oaths to make the owners pay rent, the same democrats that and the view from them that created Slavery,then the KKK then helped to bring about the SS of hitler and world war Two that sided with radical Islam we fight today! The again same views of democrats that as well help create the lie that is called to Gaza, That Obama Style democrats as we are at war with radical Islam would be so shallow to for the night mare of what was the Muslim Islamic Bosnia War that would seek to send aid to our foes that we are at war with in Two or nation thu the foe of our Allies. Jewish Hebrew Israel! as they have done so with sending aid to Gaza!...one more Note The DNA test that have been by science today have come to Understand the blood of the American Indians are Very Very Close the DNA of the Jewish Hebrew People,


    Have A Nice day
  • Leave us alone.
    Listen, the hookah bar does not fall into the category of exemption as currently written. Tough. This is what the majority of nags want, they do not care about you or your business. It is about restricting your/ours/their freedom of choice. Confused are the statements of public versus private establishments. Osman, you need to file some racially charged religious suit against the state.
    State - leave him alone.
  • {Gibbons V. Ogden} 9 Wheaton 1 (1824).
    Check YouTube this one is Good, he talks about {Gibbons V. Ogden} 9 Wheaton 1 (1824). Supreme Court Chief Justice Marshall, Upholds Only Congress can regulate Inter States Commerce! This Man May be able to sight such History to Stop the Bans hurting his Company!




    http://www.youtube.com/watch?v=gRiCicJOa04

    Bruce Michael Anderson
    www.writing.com
  • Not to mention.....
    ....longwinded.
  • Louisville's a SEAPORT??!!
    Where do they get people like BMA? Louisville's a SEAPORT??!! This guy's so tragically uninformed and grammatically challenged it's embarassing!
  • 501 C3 GROUPs WILL NOT HAVE TO?
    as I understand some of the places that will "Not" have to abid by such bans are 501 C3 Groups?. ""clubs run by fraternal"" organizations Based on the voluntary tax history and SOME OF THE REASON of the Very bottem of thAT 1040 THAT SO reads as such!

    And the Obama Style LEADERSHIP have really gotten things out of whack, like seeking to pass this crap Publication 557 (06/2008), Tax-Exempt Status for Your Organization, look it up http://www.irs.gov/.


    It is the paper work to file for a 501 c-3 group. This bill or Doddâ??s Frank an H.R. 5175 disclosure Act" (S. 3295) Act is already written in it the tax Codes an it's unconstitutional to write laws to say you have no rights of free speech, or block the right to the redress of a grievance,


    The Blackâ??s Law Dictionary Calls it Congressional direct Constitutional Contempt, Historical Fact Federal Taxes was to be based on the statesmen view voluntary, No war on US Soil No Forced Federal Taxes, read your History behind the terms the stamp act & home stead act & Daws Act of 1887 and Common defense!


    Bruce Michael Anderson
    www.writing.com

  • Fight Back, If your going to over regulate my privit own company the cut my taxes
    The Indiana House of Representatives passed a smoking-ban bill in January peppered with exemptions, such as bars, taverns, casinos and clubs run by fraternal organizations. However, Osman�s restaurant as currently operated does not appear to fall under the exemptions!

    Why do people stand for such intrusion and over bearing regulation of Privit Companies, I mean come I am a smoker from time to time I like my coffe with my smokes, If i do not want or did not ewant to smell such I would not go! I mean come on The Indiana Government put tax hikes into place to Nationalize The Lucs oil Stadium for the NFL and the Colts to Play in as they makes millions as much of the product support is made in a over seas market that is American Jobs, As like I heard the Indiana pacers was asking for 50,000,000,000 in Governemnt grants to help them as they make millions. it is the Family owned places the Privit secter that the Government get the money from to nationalize things that should not be in the 1st place. And then wounder why there is no Job Growth. Persoanlly this guy should file suit to recover what taxes is going into the Stadium and such that takes away from his company. The ban is wrong and over bearing Tort Claims and US Title 42 usc section 1983...as I understand the places that will have to abid by such bans are 501 C3 Groups.


    Historical Note: On the other kind of Smoke
    That I think should be Legal, As I understand the Declaration of independence is written down on hemp, Here is some history about the 1st Taxed Enough Already Party most never hear about George Washington had about 4,000 Acores of Hemp according to the history I understand the cash crop was to have been in either Kentucky Indiana or Ohio and or all three.

    He used it for his free market so to speak for the making of ropes and sails for the ships and so on. It grew wild where cotton had to be worked. They used it over the use of Cotton because cotton did rot a fray in sea water faster than hemp,

    The King of England so wanted to Control the free markets to control many things one being the gun powder for it was the way to secure the people from rising up against the Kings Rule Control the sea port control the people,

    The closest seas port was Louisville Kentucky, so the king of England pushed the Stamp Act or the Hemp tax to control such free market goods now forget not France was after about the same things.


    Mind you Washington wanted Taxes to be voluntary, as it is all taxes are to be so hence forth the reason why the 1040 read the fine print as such because Federal taxes was only force able if a war was being fought on united States Soil so as to pay for the Common Defense or Military. Today�s Police force Etc. To protect the people. To secure the borders! Hint hint�


    The States became the only one that could force taxes either way with or without a war being fought, But the bases was still be Completely Voluntary, if you paid no Taxes at the time Mainly Sales taxes you could not ask for Help from the said Common defense.

    And the Obama Style Democrats have really gotten things out of whack, like seeking to pass this crap Publication 557 (06/2008), Tax-Exempt Status for Your Organization, look it up http://www.irs.gov/.


    It is the paper work to file for a 501 c-3 group. This bill or Dodd�s Frank an H.R. 5175 disclosure Act" (S. 3295) Act is already written in it the tax Codes an it's unconstitutional to write laws to say you have no rights of free speech, or block the right to the redress of a grievance,


    The Black�s Law Dictionary Calls it Congressional direct Constitutional Contempt, Historical Fact Federal Taxes was to be based on the statesmen view voluntary, No war on US Soil No Forced Federal Taxes, read your History behind the terms the stamp act & home stead act & Daws Act of 1887 and Common defense!
    http://www.bing.com/search?q=No+Taxtion+with+equal+rep&src=IE-SearchBox&FORM=IE8SRC
    • Defining Hookah Bar
      It would be established as a hookah bar based upon sales records. You would need to prove that a certain percentage of your sales came from that product.
    • Define....
      ... "hooka bar".

      If smoking were banned in all establishments except for hooka bars, how would you define it? Could you just put a hooka in the corner (not using it) and declare it to be a hooka bar?
      • I'm opposed
        to a total smoking ban! I'm a former smoker and totally dislike cigar/cigarrette smoke, too but I think that the bans in place are enough!

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      1. Now if he'd just stay there...

      2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

      3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

      4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

      5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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