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INSIDE DISH: Peterson's rebounds after rough start, recession

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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 Peterson's, the realized dream of chemical manufacturing magnate Joseph Peterson. As president of Crown Technology Inc., Peterson spent a good deal of time in alleged fine-dining establishments entertaining clients. "I was never fully satisfied with what I got for the dollars I spent," he said. "I thought, 'Boy, if I ever have the opportunity, I want to have a place where people can come relax, get the best food available and the best service.'"

An opportunity became available in the late 1990s when the Frisch's Big Boy restaurant chain put up for sale a free-standing restaurant building at 7690 E. 96th St., a block east of the Crown Technology headquarters. Peterson used Crown's financial muscle to help get the restaurant off the ground, obtaining a mortgage to buy the property for about $1.5 million and sinking another $500,000 into renovation. The owners of Peterson's—with Joseph Peterson as managing partner and two other investors—then entered into a lease agreement to occupy the space.

Despite the helpful push at the beginning, Peterson's had an uphill climb in its first few years. Costs were higher than expected, and Peterson became much more involved in the day-to-day operations than originally envisioned, while investing another $250,000 in the restaurant to keep it afloat. It eventually started turning a profit and enjoyed margins as high as 10 percent until the Great Recession hit. In the video below, Peterson details the origins of the restaurant, how it survived its first few years, and the steps taken to help ride out the recent economic downturn.



Peterson's has a uniquely symbiotic relationship with Crown Technology, beyond the support it received with real estate needs and renovation. Early in the restaurant's run, Peterson realized that Crown could develop cheaper and more effective cleaning chemicals than the ones already in use at the restaurant. Essentially using the restaurant as a research and development facility, Peterson and Crown's chemists began developing maintenance chemicals such as dish and glass detergents, and appliance and floor cleaners. In the video below, Peterson explains how the restaurant helped Crown branch into new product lines.



 

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Peterson's
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7690 E. 96th St.
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(317) 598-8863
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www.petersonsrestaurant.com
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Concept: High-end dining emphasizing fresh seafood, USDA Prime beef and customer service.
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Founded: 1999
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Owners: Joseph Peterson, managing partner (60 percent owner with family members); and two private investors.
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Start-up costs: $2 million to purchase and remodel the property, covered by Crown Enterprises LLP. The partnership is owned by Crown Technology Inc., which is owned by the Peterson family (including Crown Technology president and Peterson's owner Joseph Peterson). Peterson's, which leases the space from Crown Enterprises, spent an additional $300,000 to open the restaurant.
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Sales and profit/loss: $2.65 million in 2008 (broke even);  $2.18 million in 2009 ($6,000 loss); $2.4 to $2.5 million projected for 2010, with an expected profit of about $120,000.
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Employees: 45
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Seating: 225
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Goals: To reach $3 million in annual sales and revive a profit-sharing program for employees.
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Good to know: There is a symbiotic relationship between Peterson's and Crown Technology Inc. The company developed a line of maintenance chemicals (dish and glass detergents, stainless steel polishes, tile cleaners, etc.) based on the need for cheaper and more effective cleaners at the restaurant. Those products have led to the Crown Custom Blends line of retail cleaners for consumers.
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  • Never
    My husband and I tried to go there the night they opened. This place is really close to our home, and we looked forward to it. Walked into an empty restaurant to be told by the young but overly snooty hostess that they were totally booked. We walked out and have never set foot in there again. Poor customer service cost them any business they would ever get from us, which would have been a lot over the past 11 years.
  • Execellent Fine Dining
    Joe Peterson is a real gentleman and first class businessman. I appreciate his commitment to the community and the local dining scene. I've always had a great experience there.
  • Excellent place, with a caveat...
    Great food, ridiculous wine mark ups, otherwise I'd probably go more often. Wine mark ups are usually far less at the restaurants that I frequent in LA or NYC. Still I give Peterson's credit for running a nice establishment. The Kobe beef burger at the bar, and the scallops are food highlights.

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