Risky Business: What Drives Restaurant Owners to Rebrand and Does It Actually Save Them?

Running a restaurant. It's a grind.
Running a restaurant. It's a grind. Image by Peter Bollinger
It’s a week before Thanksgiving 2016 when Diane and Willet Feng, owners of Kuma Burgers in Greenway Plaza, receive a strange letter in the mail.

Opening it, they find a cease and desist order from a metal band-themed gastropub empire in Chicago called Kuma’s Corner. It alleges trademark infringement. It seems like a prank.

“We thought it was a joke,” Diane Feng says.

But it wasn’t. Kuma means bear in Japanese. Kuma is also the name of a character in one of the Fengs’ favorite comics, which is why they named their burger stand after it. But kuma, as it turns out, had been trademarked by the Windy City franchise. Kuma’s Corner even boasted a lawfully protected motto that seemed ever appropriate given the situation: “Harshing your mellow since 2005.”

In the end, the Fengs would be forced to rebrand their restaurant entirely. It’s now called burger-chan.

While that’s one crazy way to end up as an entirely new restaurant, there’s actually an industry phenomenon known as “reconcepting,” in which restaurants morph into something new, and it’s more prominent than ever, especially in Houston.

“I think you’re going to be seeing a lot more of it, actually,” says Chris Tripoli of A La Carte Consulting, a group that works with numerous restaurants in the city and beyond to develop “concepts” from the ground up. “The Houston restaurant scene is a tremendous one. There’s so much more value for dollar here than in other cities, but it’s much more competitive.”

In fact, according to the National Restaurant Association, there are roughly 43,670 restaurants in Texas, an industry that rakes in more than $54 billion in sales for the state yearly. Though there’s always talk of a portending bubble that seems destined to burst, the NRA (restaurant aficionados, not gun owners) filed reports last August noting that “fears of a recession were overblown” and that the industry would continue to grow given a strong labor market, households with more money to burn, and more people who want to spend dough on “experiences” in general.

But customers can be fickle, and with tight margins and expensive leases at stake, it’s no surprise that so much rebranding takes place. It can be a much-needed shot of energy for an aging restaurant or a last-ditch effort to save a sinking ship, or may be prompted by, say, a potential trademark lawsuit.

This year alone, numerous restaurants in town are seeking to rebrand. The city even ushered in its first-ever restaurant that will actually reconcept annually, One Fifth, from Beard Award-winning chef Chris Shepherd, who will open five different “concepts” in one space within five years. Consider it a clever, progressive approach to fighting off the doldrums. But what happens when a restaurant’s rebranding isn’t already planned from the get-go?

click to enlarge Diane and Willet Feng have, in fact, trademarked burger-chan. - PHOTO BY TROY FIELDS
Diane and Willet Feng have, in fact, trademarked burger-chan.
Photo by Troy Fields
burger-chan, 3 Greenway Plaza, burgerchanhtx.com

It’s months after Diane Feng first got that letter, and she’s cleaning up at the tail end of a lunch rush at burger-chan. She runs the counter with her husband and small staff, serving burgers such as the popular “Spicy” with fresh, charred and pickled jalapeños, sambal mayonnaise and a side of soy-marinated serranos. There’s also a kimchi dog, a panko-crusted fish sandwich and more items with a touch of Asian influence. Nothing like Kuma’s Corner, which features burgers named after bands, including Metallica, Slayer and, naturally, the Plaguebringer.

Turns out metalheads don’t play when it comes to cease and desists, though. Even Metallica was issued one by a band called Incubus (not that Incubus), for allegedly ripping off their song back in the ’80s.

“We were really incredulous,” Feng says, reflecting on the nightmare. “We felt there was enough geographic distance that it didn’t really matter.” No one had come to the counter confusing the two restaurants anyway. There had been a few instances of people hashtagging both restaurants as #kumaburgers on Instagram. “We had some friend of ours, lawyers, who thought their case was weak. But ultimately they weren’t intellectual property specialists.”

With the threat of being sued, the Fengs doled out thousands of dollars for a trademark lawyer, not an entirely life-shattering expense, but not exactly feasible with employees to pay, a daughter to raise and the prospect of having to get rid of all Kuma Burger logos, signage and gear. There was the hassle of just changing their online presence: Yelp, Google, Facebook, the website. Everything adds up.

“We took a pretty big loss,” Feng laments. Even on such a small scale, and with a built-in clientele, the rebranding came as a financial shock, but they were able to squeeze by without making customers pick up the tab. Some did get upset, though, when the customer loyalty program was halted indefinitely: A punch card had allowed for every fourth burger for free, but the Fengs could no longer afford that.

Then there was having to choose a new name. There was talk of changing one letter and becoming Kumo Burger, which would make them “Spider” Burger. Or Mizu Burger, which translates to Water Burger.

In the end they decided on a Japanese honorific, “chan,” commonly used to denote something or somebody that’s especially cute, like, say, a cuddly bear using a tasty burger as its big, soft pillow. That’s actually what the Kuma Burger logo had looked like, and the Fengs were able to retain it for burger-chan, its lowercase name further emphasizing that cuteness. Kuma’s Corner — whose logo features a grizzlyesque bear seemingly howling into the ether — didn’t want them to, but the Fengs’ lawyers believed the Chicago eatery didn’t have a case, and in fact it did back down on that particular issue for the time being.

This time around, the Fengs registered the name burger-chan with the U.S. Patent and Trademark Database. “I remember when we first opened, we had this book, Restaurants for Dummies. There was just no way to read the whole thing front and back. I was thumbing through it one day and realized there was a whole chapter I missed about trademarking that’s like, ‘Oh, you should check the U.S .Trademark and Patent Database.’”

Burger-chan is actually pronounced burger chon. “It’s like the whole Rihanna/Rihanna thing, you know. People never say it right. Or they’re like, ‘Oh, is your last name Chan?’ So we’ve kind of had to explain what it means. But it’s taken on a life of its own and we’re glad.”

In September the Fengs will expand their operation to a more prominent location in Greenway Plaza, next to the popular Rice Box counter. Now the only thing left is the move, which will usher in the fully rebranded age of burger-chan, and, oh yeah, one other thing: “We haven’t gotten our final statement from the lawyers yet, and we’re not asking for it either.”

click to enlarge Claire Smith in her new venture, Alice Blue,  a sleek, modern bistro in the Heights. - PHOTO BY TROY FIELDS
Claire Smith in her new venture, Alice Blue, a sleek, modern bistro in the Heights.
Photo by Troy Fields
Alice Blue, 250 West 19th,

Nowhere else in Houston has the rebranding fad been more at play this year than in the Heights, one of the buzziest dining neighborhoods in the city, which has seen its competition increase tenfold in the past few years without any sign of slowing down, despite purportedly outrageous real estate and restaurant saturation.

“We closed a successful restaurant to open one that we think is better,” Russell Murrell says a week into the launch of Alice Blue. It’s a new, modern bistro in the space where Murrell and his wife, Claire Smith, opened their restaurant Shade, a neighborhood fixture, some 14 years ago.

“At that time there were taquerias,” he says of the Heights. There was nothing like global-inspired Southern comfort food there. Shade was the first in that respect. It was instrumental in ushering in the neighborhood’s dining boom. “A lot of people thought we were crazy. The Heights was dry. We were able to get a private club permit, and that started the whole thing.”

Today there are numerous places to get Southern comfort food in the area: Southern Goods, Harold’s in the Heights, Presidio, and Field & Tides, to name a few. The demographics of the area seemed to be changing too: lots of younger people.

“That’s why we wanted to launch a new venture,” Murrell says. “It wasn’t driven by competition or the performance of Shade, but more by the feeling we had that we wanted to do something new and provide something new.”

That and serendipity. Somehow a handful of Smith’s former employees all returned at the same time to open the new restaurant: chef Kent Domas, who worked for Smith at Canapy and Shade before going on to Bernadine’s and Down House, with Jason Vaughn, a Houston native who had just returned from the Hogsalt Hospitality Group in Chicago, also consulting on the menu; manager Summer Sepeda, who worked for Smith for four years before moving on to Coltivare and One Fifth; and, on the beverage side, Sean Jensen (most recently of Public Services and Hay Merchant), who entirely overhauled the bar program, and who will also open Nancy’s Hustle in EaDo with Vaughn by end of year.

“I’ve known Jason since he was seven,” Smith says. “He was on the line at Shade as a cook by age 19, going on to become a GM as well.”

To Smith, her team is pretty much a work family, and as such, she’s allowed them as much freedom as they want to create the menus and the style of the restaurant.

One of the challenges of launching Alice Blue — a bistro with a new look and a light, contemporary dining experience in the forms of pastas, salads and French-inspired entrées — is that customers do wander in asking questions like what happened to the shrimp and grits?

“We’ve found, so far, that that has been a challenge,” Murrell says.

“Shade wasn’t a trendy place,” Smith says, “but a good place.” Smith and Murrell want to keep that appeal with Alice Blue. You won’t find a menu that’s groundbreaking, but it’s well-executed with a European and French bent. Bread and pastas are made in house. There are shared plates. Craft cocktails. “The bar at Shade was probably not up with the times,” Smith admits.

The transition, they admit, was a little tricky. “We were still operating Shade, and we didn’t want everyone to run to the door.” Half of the servers stayed on. The restaurant had a quick shutter — exactly one month’s time — during which Carl Eaves, who was Smith’s business partner when she opened her first restaurant, Daily Review, in 1994, redesigned the space, which is named after the favorite pale azure color of Teddy Roosevelt’s daughter Alice.

“When you launch a restaurant, you open the door and hope people come in,” Smith says. “You don’t know what’s going to happen.” The reason she keeps doing it? “When it works, the satisfaction and the pleasure that comes from that, it’s hard to get from anywhere else.”

click to enlarge Modern industrial meets Mediterranean vibes at Helen in the Heights. - PHOTO BY TROY FIELDS
Modern industrial meets Mediterranean vibes at Helen in the Heights.
Photo by Troy Fields
Helen in the Heights, 1111 Studewood, Suite B, heights.helengreek.com

But what happens when you start strong and along the way, somewhere, your restaurant begins to waver? Do you blame leadership, customers, the concept itself?

Such are the questions Tim Faiola, director of operations for Helen Greek Food & Wine, had to ask himself when hopping over to the flailing Heights eatery, Arthur Ave. “I honestly thought we’d face a much more uphill battle to right the wrongs,” he admits.

The culture at Arthur Ave wasn’t everything that it could have been

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Those wrongs, according to Faiola, included pricing that was out of whack, a concept that couldn’t jell, a harsh noise level, a lack of manager interaction on the floor, slow weekdays, a squeezed space that was too dark, and food that was good but didn’t entirely go over well with critics or customers. “It falters” is how the Houston Press’s own reviewer, Nicholas Hall, described chef William Wright’s upscale take on classic Italian.

“The culture at Arthur Ave wasn’t everything that it could have been,” Faiola says. “So rebranding was the right move.”
click to enlarge Helen in the Heights serves up Greek “greatest hits,” including the well-spiced Thessaloniki-style pork sausage. - PHOTO BY TROY FIELDS
Helen in the Heights serves up Greek “greatest hits,” including the well-spiced Thessaloniki-style pork sausage.
Photo by Troy Fields
And that meant a move back to something the team was comfortable with: Greek. “We thought, let’s get back to what we do well.” But instead of just duplicating the success of its Rice Village eatery, Faiola did even more research to get a grasp on just what the Heights is all about.

“You have to know your market,” he says. “Don’t open up in Sugar Land with a Rockets nightclub.”

Instead, Faiola talked to people who’d done business in the Heights for a long time. He noted lots of young professionals, families, pregnant women. “Over in Rice/West U, it’s a little more refined. Tends to be an older demographic.” He’s tried to keep price points down and offers a “greatest hits” menu, including calamari and fried halloumi, along with cocktails, which the flagship Helen, a wine haven, doesn’t offer. More than anything, he wanted the restaurant to feel comfortable.

There was about three months between batting around the Helen in the Heights idea and making it known to the public. “Once you make the decision to close down, until reopening, money is only going one way. You almost feel it.” During those excruciating months, he says, “I didn’t see my wife very much.”

The restaurant closed for three weeks for the renovation by its go-to designer, Erin Hicks, who came up with colors and a feel much lighter and airier than Arthur Ave had. Despite the closure, a handful of wait staff and 80 percent of the back of house stayed on board. “It’s tough for anyone to go a few weeks with no revenue, and we tried to find any way to help them. Odd jobs. Like, here, bartend at this wedding.”

click to enlarge Orzo-stuffed seasonal vegetables are a vegetarian entrée at Helen in the Heights. - PHOTO BY TROY FIELDS
Orzo-stuffed seasonal vegetables are a vegetarian entrée at Helen in the Heights.
Photo by Troy Fields
Now, Faiola notes, there are still good days and bad days. “There’s a few different times you get empathy from the guests, when you open and when you close. When you open, you have to dig deep and ask them to evaluate you. When the public finds out you’re closing, everyone says they love the food, and it messes with your head. Did we pull the plug too soon?”

The numbers that Arthur Ave was doing didn’t reflect that it wasn’t a hit, but Faiola can’t even compare direct sales because Arthur Ave wasn’t open at this time last year. It lasted only seven months. But he believes Helen in the Heights is faring better. He’s on the floor talking to guests. He’s assessing where they need to break even or make money.

“We gave the Italian a shot. We thought it would be really well received. You make the best decision you can. Maybe if we’d stuck it out, if Arthur Ave had stuck, we’d open 120 of them, but we thought, let’s get back to what we do well.”

There may be plans for more restaurants to come from the group, but right now they’re focused on their two eateries at hand. “We come to this space every single day. For a guest, the visit is very singular. The whole perception is based off that night. Best foot forward every night. We want to own it.”

click to enlarge Adrian Hembree in Peska. - PHOTO BY TROY FIELDS
Adrian Hembree in Peska.
Photo by Troy Fields
Peska, 1700 Post Oak, #1-190

“This is the hardest thing I’ve ever done,” says Adrian Hembree, the owner of Grazia Italian Kitchen, who stepped into a new role at Peska, formerly Peska Seafood Culture, in February in an effort to save the restaurant from its own demise. “I’ve never seen a family be taken more advantage of in my career. They were paying $7,000 a month for a cleaning company. There’s no telling how many people had their hands on what they were doing."

When Hembree stepped in as a managing consultant, he claims, he eliminated $30,000 a month from the restaurant’s expenses. “The revenue was good, but they couldn’t break even.”

But that’s not a claim everyone ever involved with the restaurant agrees upon. Chris Tripoli, who consulted on the restaurant during 2016, says it just wasn’t getting enough business to sustain itself, simple as that.

Owner Maite Ysita and her family also operate two restaurants in Mexico, including a flagship in Acapulco on which Peska is based. It’s a seafood market-cum-restaurant that opened 15 years ago, when Ysita was in her mid-twenties: “We had people coming in to buy fish, but they wanted to have lunch and dinner. They wanted an area to eat. I only thought it was going to be a fish market, but we heard what our customers wanted.”

As for adapting to what her customers want in Houston? The restaurant added Prime steaks to both its menu and its name, Peska Seafood & Prime Steaks, a far cry from when Ysita first brought Peska to Houston in 2015, when the concept centered exclusively around a fresh and upscale seafood market and an eatery with its own “seafood sommelier” on the floor.

Ysita had landed a spot in Blvd Place and hired big-name restaurant designers Gensler and a young prodigy chef, Omar Pereney, only 20 years old, who was famous in his home country of Venezuela. She then brought in consulting firm A La Carte Consulting for secondary assistance concerning operations — how to deal with state regulations and the hiring of management. “We don’t fully comment on the specialized services we offer our clients,” Tripoli says. “But we actually came on much later than we usually would.”

The sweeping, ritzy space, with its signature metal sculptures and a design that PR people called “the essence of water,” opened to stunning early reviews. Pereney’s tiraditos and whole fried strawberry grouper were hits. Word on the street was spreading that an expansion to Miami was already in the works, but according to Tripoli, “There was always the concern there weren’t enough seats. And the lease was extremely high.”

Then came the write-ups steeped in caveats about the cost of a meal here and the lag time; the Press’s former critic Phaedra Cook had a 40-minute wait even with a reservation. The Houston Chronicle’s critic Alison Cook noted in an otherwise stellar review that “three clams came to a sobering $26.” People were going, it seemed, but never returning.

“I think the concept was well-marketed at first,” Tripoli says. “It was positioned as a fresh concept, seafood market from around the world. They got across the exact message they wanted.”

But Hembree believes that a lack of approachability was the number one downfall. Price points loomed out of reach for most, and when you stepped into the restaurant, the market blocked the bar. “In this area of town, people want to be at the bar. They want to be seen.”

One of Hembree’s first priorities was ditching the market. A wall was knocked out and the bar became the central, U-shaped focus. A few days’ closure was all it took. The budget was “incredibly aggressive,” Hembree notes, and they were calling in favors. The Ysita family, he admits, had already invested a million dollars in one year in the restaurant.

At this point, it's about surviving.

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What Hembree changed next was the leadership — managers who didn’t want to adapt and who apparently didn’t realize the Ysita family was plowing upwards of $50,000 to $100,000 into the restaurant monthly — along with the culinary direction. Chef Omar Pereney left the restaurant after the announcement of its rebranding in February, and has since filed a lawsuit against Peska, alleging that it changed into a Tex-Mex restaurant and won’t allow him to use his name and likeness because of a non-compete contract.

“He was a talented chef,” Hembree says. “But we lacked an identity. The servers would hit the table and tell his story, about a wonder chef who’d been on television and all that. The story they needed to tell is of Maite and her family.”

click to enlarge Chef Chris Loftis is paring down the Peska menu after an inspirational trip to Mexico City. - PHOTO BY TROY FIELDS
Chef Chris Loftis is paring down the Peska menu after an inspirational trip to Mexico City.
Photo by Troy Fields
That story will now apparently be told via Latin-inspired, Gulf Coast-forward dishes from new chef Chris Loftis, Peska’s third, who has worked for both Hugo Ortega and Ronnie Killen. Former Grazia chef Steve Haug actually ran the kitchen for four months after the rebranding. Loftis just returned from Mexico City, where he soaked up menu ideas and inspiration from the likes of famous restaurants such as Pujol and Máximo Bistrot.

“For me,” he says, “I walked into the perfect situation, with cooks who want to get better and who I feel like I’ve known forever.”

The menu, he hopes, will make more sense in the weeks ahead. Habanero-crusted steaks with chimichurri, and simple, fresh fish preparations that don’t need much, a twist of lime or some avocado. Dishes that will help define the message of the eatery. With Houston Restaurant Weeks around the corner, Peska will look to its special lunch menu as the start of a major overhaul. Over the next month, price points will likely continue to drop and a slimmed-down, one-page menu will debut. It’s still a bit too early to see where exactly the restaurant is heading.

click to enlarge A new, meatier dish at Peska: hanger steak with Mexican-inspired gnocchi and romesco. - PHOTO BY TROY FIELDS
A new, meatier dish at Peska: hanger steak with Mexican-inspired gnocchi and romesco.
Photo by Troy Fields
Restaurants that fail do so because they cannot identify the needs of the market, Hembree says. But what if the market is steeped in so much competition that there are really no “needs” at all? That could be exactly what Peska is dealing with.

The restaurant’s Facebook posts recently made mention of the name Peskarne (a merging of the fish and steak ideas, obviously) numerous times, and Houston Food Finder even reported in May that the restaurant was rebranding into Peskarne. A representative for the restaurant tells the Press that is not the case and that the restaurant will be known only as open-ended Peska moving forward.

“We’re trying to find our niche,” Hembree says. “Can we sit and watch things unfold? There’s no time to do that. At this point, it’s about surviving. Every day is a new day.”

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Gwendolyn Knapp is the food editor at the Houston Press. A sixth-generation Floridian, she is still torn as to whether she likes smoked fish dip or queso better.