October. 27, 2005

Cafe Chain Brewing Up City Expansion Plan

The owners of a Baltimore County cafe chain want to expand into Baltimore City, opening five to eight additional restaurants over the next few years, with plans to open additional outlets through franchise agreements.

David and Lisa Redmond plan to open their fourth Cafe Gourmet location in Mount Vernon within the next three months. The husband and wife team are currently eyeing two Charles street locations, that would seat 40 to 70 patrons. The pair have also enlisted half a dozen commercial real estate brokers to scout sites between 1,200 square feet and 1,500 square feet in the central business district.

Catering mainly to an executive clientele at its Hunt Valley and Towson locations, the casual eatery sells breakfast and lunch items, including sandwiches, salads, burgers and muffins. The cafes bring in $1 million in annual sales, according to the owners.

Developers have also approached the Cafe Gourmet owners for a mixed-use project slated to transform a blighted section of midtown, next to the Charles Theatre. "The type of venue would be successful there with its mix of students and artists," said Matt Hoffman, a principal at Tower Hill Development & Consulting LLC.

As more residents pour into the city, Cafe Gourmet's expansion represents a new retail trend: suburban business owners eyeing the city rather than the reverse, Hoffman said.

But the Redmonds are not neglecting the suburbs. Owings Mills, Bel Air, Catonsville, Columbia and Annapolis are some of the towns that could get a Cafe Gourmet thereafter. New stores might open in Washington, D.C., and Northern Virginia as well, David Redmond said.

The Redmonds plan to expand primarily by using their own money, pouring as much as $125,000 into each new store, and as little as $25,000 to take over an existing cafe. The restaurateurs would open one new cafe every nine months, putting revenues from the latest cafe venture into the next one.

"We don't want too many too fast and not be hands on," in managing the cafes, David Redmond said. A line of credit at two banks provides additional capital, but the Redmonds only rely on short-term loans that they can repay within one to two years. At the end of the day, they want the cafes to belong to their family, rather than a bank or outside investor, David Redmond said.

Within a year, the business owners hope to begin offering the concept as a franchise in Maryland, Virginia, Pennsylvania and Delaware, charging franchisees $10,000 to $25,000 in franchise fees and 3 percent of sales.

The Hunt Valley store, which opened in April, is located in an office park adjacent to the St. Paul Travelers Cos., which employs about 700. Its two Towson locations, located three miles apart, are in areas with a high concentration of daytime workers within walking distance, said Fronda Cohen, a spokeswoman for Baltimore County's Department of Economic Development.

The three Cafe Gourmet stores employ 17 and are open from 7 a.m. to 3 p.m. To attract neighborhood residents, the new Mount Vernon store will have to stay open in the evening and on weekends, David Redmond said.

Cafe Gourmet's expansion plans come at a time when cafes have proliferated in Baltimore. In May, the Baltimore Business Journal reported that the Daily Grind is expanding as owner David Key eyes Annapolis, Columbia and Montgomery County for initial franchise locations.

Mount Vernon saw several new cafes open in the past year, including Koffee Therapy and Red Emma's Bookstore Coffeehouse.

The Redmonds say they are not worried about the competition. Their existing locations compete with a variety of other eateries.

David Redmond, who formerly managed golf facilities, and Lisa, who had worked off and on in the food industry since age 15, opened their first Cafe Gourmet in 2002. The Redmonds have limited their marketing expenses by employing students at the Maryland Institute College of Art to design the menus and logo, paint borders around the vintage posters that decorate the restaurants, and do numerous other art related work in the cafes.