Retro 5 & Diner chain looks to grow

Bob Watson, owner of the 5 & Diner restaurant chain, is hoping to tap into customer nostalgia as he relaunches the retro restaurant chain. 5 & Diner began serving classic diner food — burgers, fries, shakes, meat loaf, pot roast, turkey dinners and eggs — in Phoenix, Ariz., in 1989, in a setting reminiscent of the ’50s and ’60s. Greeters wear poodle skirts and servers have change dispensers on their belts. The jukeboxes play music from the era and the restaurants are decorated with Elvis Presley, James Dean and Marilyn Monroe paraphernalia. The average check is just over $10, and no alcohol is served. Watson is a veteran of the contract feeding sector who previously led the hospitality management firm LPM Holding Company. He and his wife and business partner, Laurie Watson, got involved with 5 & Diner in 2006, when they opened a franchise in Worcester, Mass. Soon after, the original franchisor decided to sell the business. “So we negotiated with him and bought it in 2008,” Bob Watson said. They also bought the original flagship restaurant in Phoenix as part of the deal, while the other 10 units are franchised. Now Watson is looking to expand the concept with some reengineering. Although seven of the 12 units currently are in the Phoenix area, Watson is concentrating the chain’s expansion on the East Coast, particularly New York, New Jersey and Pennsylvania, which he says are the diner capitals of the world. “We think it will do well in that marketplace,” he said. But he also knows that with an average unit sales volume of $1.1 million, spending $1 million to build a freestanding unit makes for a difficult business proposition. “But if you can spend $400,000 to $500,000 and locate in a shopping center, that can be a decent living for a family,” he said. Watson said he’s following the example of Five Guys Burgers and Fries in aiming for inline restaurants rather than freestanding units. And he doesn’t see much competition in the nostalgic diner space. “Johnny Rockets is cool,” he said of the 237 unit diner-themed family-dining chain, “but it has a very limited menu. We’re a real diner.” 5 & Diner’s best selling item is the Big Bopper hamburger, made with two half-pound beef patties. The pot roast and Cadillac meat loaf are also popular. The latter is topped with a molasses glaze, chopped bacon, chopped mushrooms and onion straws. Watson added that the timing is right for a throwback diner. “I didn’t have a lot to worry about in the [early] ’60s. It was a good time in America. And we hear all the time from customers that they really do feel like they’re going back to the ’60s,” he said.