Tupelo Honey Cafe

Measured growth and a focus on employee retention are the successful ingredients

Tupelo Honey Cafe was the subject of an April 2014 profile feature. Asheville entrepreneur Steven Frabitore had bought the downtown Asheville restaurant in 2008, and six years later, the business had grown significantly: six locations in three states, with annual revenue topping $24 million. Plenty of buzz in national outlets -- The New York Times, Food Network -- had helped elevate Tupelo Honey's profile, but it's the restaurant's menu and ambiance that keeps diners coming back for its updated yet rooted-in-tradition approach to classic Southern comfort food.

"I think it's always meaningful when people recognize your brand for doing a good job," says Frabitore. "I know [good press] created a lot of opportunities for us, as we've spread as far as Boise and Grand Rapids, Michigan." Today Tupelo Honey's reach extends to 11 states, with more on the way. A recent opening in Milwaukee brings the current total to 17 locations. "And then we have Des Moines and Pittsburgh lined up," he says. Frabitore says that the company's current annual revenue is roughly double its 2008 figure.

Even in 2014 -- when he and his burgeoning restaurant chain were the subject of a Capital at Play feature -- Frabitore's plans for the future of Tupelo Honey Cafe were ambitious. But scaling up a successful restaurant isn't as easy as it might appear: it's about more than replicating the characteristics of a pilot location.

Frabitore -- owner and CEO of Tupelo Honey Hospitality Corp. -- says that bringing Tupelo Honey Cafe to its current success has been challenging. Large-scale success, he says, has come "with a lot of time, a lot of effort, a lot of capital, and a lot of tears and smiles. We didn't get to the place we are now -- this really stable place -- without tremendous effort and amount of pain and joy to get there."

Some of the initiatives taken to make the restaurant chain more successful might seem like minor tweaks. "We used to put all our food on yellow plates," Frabitore offers. "But yellow plates and meat don't especially take great photographs." And visual appeal is even more important in an era when many diners take photos of their meals and post them on Facebook, Twitter and Instagram.

Other changes are more significant. "We've upgraded our interior. We've upgraded our training, our pay, our employee support," Frabitore says. The chain brought on a new executive chef in 2016. And while early ventures into featuring a bar in each restaurant didn't do too well, today Tupelo Honey Cafe has a highly successful bar program.

Canny real estate decisions are central to the chain's success, Frabitore believes. "Before, we couldn't afford better real estate as we were a much younger company," he says. "But through our research, we've been able to really dial in on real estate opportunities."

Even before buying Tupelo Honey, Frabitore's years of experience in consumer goods sales and marketing taught him the value of research and hard numbers. "One of the things that I like to do is study the business," he says. "You know: 'What makes it go? What makes it work?'" And he found that the answer isn't the same for every location. So while Tupelo Honey Cafe is a chain restaurant, the concept allows for some level of individual character.

"Every store is different, but we wanted it that way," Frabitore says. "You will walk into a Tupelo Honey and you will know -- from certain brands, identity, design elements, certainly the menu -- that you're in a Tupelo Honey. But you're not going to walk in two that are the same. The brand has translated extremely well."

As early as 2008, the company's internal research revealed that its consumer base was aging. "We weren't getting as many young people as we wanted," Frabitore says. So the chain made subtle changes -- Frabitore doesn't go into detail -- and successfully lured more younger diners into its restaurants.

When Frabitore started, Tupelo Honey Cafe had 48 employees. Today that number is closer to 800. And Frabitore says that the company has long had a focus on employee retention. "The most important thing that I have learned is how costly turnover is," he says. "We don't accept high turnover as being an industry standard." He notes that the chain recently raised its starting wage to $13 per hour. "In 2020, we were named by Business Intelligence Group as one of the best large companies to work for in America," he says.

The restaurant industry is one of the business sectors hardest hit by the economic fallout from the Covid-19 pandemic. Frabitore says that Tupelo Honey Cafe is well positioned to weather the storm, and the company recently launched an initiative to help its workers with their healthcare, housing and transportation needs. An employee relief fund -- established under nonprofit 501(c)(3) guidelines -- provides between $350,000 and $450,000 to employees in crisis. All proceeds from the restaurant's biscuit sales go into the fund. "It's an evergreen fund, constantly bringing money in," Frabitore says.

"We want to do as much as we possibly can for our employees. The reward for that is not only a good heart, a good culture, soundness of mind and body," he says. "It's low turnover, too."

Frabitore admits that his role within the organization has changed as the company has grown. "I'm not as involved in the day-to-day decision any more," he says. "Our leadership is so strong, and we've been through so many curve balls, that the company operates extremely well, very professionally, very buttoned-up." These days, Frabitore is able to focus his attention on real estate expansions and personal visits to the stores. In fact, during our conversation, he's driving his RV back to Asheville after a visit to overseeing the opening of a new restaurant in Grand Rapids, Michigan.

The chain's growth hasn't come without the occasional setback. An under-performing Johnson City, Tennessee location closed recently. So growth is cautious and deliberate. "We've never had a goal number of stores in mind; one to two [new] stores per year is very comfortable for us," Frabitore says. "We can self-fund those stores."

Still, after more than a dozen years at the head of a growing restaurant enterprise, Steven Frabitore remains focused on the future. "We truly just are (a) having fun, (b) building a company for the long-term, and (c) continuing to refine it," he says. "And as long as our employees continue to support us the way that they have, where does the story end? Does it end? I don't know the answer to that question."

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