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The Food Network

Roy Yamaguchi's empire extends far beyond the 31 restaurants he's famous for

photo: Jimmy Forrest

In 1988, when Roy Yamaguchi opened his first Roy's restaurant in Hawaii Kai, he could practically count all of Oahu's so-called "fancy" restaurants on one hand: "The Swiss Inn was very popular. The Ranch House up in Aina Haina and the Maile Room at the Kahala Hilton. John Dominis. Bagwell's at the Hyatt. Those were restaurants that were pretty much on the move in those days."

But none moved quite as swiftly as Roy's. Yamaguchi's signature dishes, born from his distinctive Euro-Asian cooking style (he was born and raised in Tokyo, Japan and attended college on the East Coast), soon earned him national critical success and accolades from local patrons and fellow chefs as well. But it was Yamaguchi's business chops that helped transform his company from a single flagship restaurant to an empire of locations worldwide and a bevy of Roy's-branded goods, from cookbooks to cookware. When the Outrigger's Waikiki Beach Walk is completed late this year, it will be home to Roy's seventh restaurant in the Islands and his 32nd overall.

HB: Roy's has had a pretty rapid expansion. How did you strategize your growth and what are your expansion goals?

RY: Well, it wasn't until '91 that we opened on Maui. So for the first three years we only had one restaurant. And then after that, we did some franchises. Things have come and gone, but at the end of the day today, we have five franchises – two in Tokyo, one at the Guam Hilton, the New York Roy's and Pebble Beach – and 32 total restaurants. In Hawaii, we have six restaurants and we're building in Waikiki, so that'll be seven. But we also have our Mainland venture, which is our joint venture with Outback Steakhouse (NYSE:OSI). It oversees most of the Roy's on the Mainland. But ultimately, we can only have as many restaurants as we have individuals that can run them. So I can say we have 32 currently, but the answer, maybe, could be 60 or 70. Could be more. In our business, people are the most important commodity. So we can keep growing as long as we can continue to train our people correctly to learn the Roy's way – because the most important thing is having individuals who believe in what we do and who can execute what Roy's is.

HB: You've got a line of cooking products on the Home Shopping Network. How did you decide to develop your own cookware?

RY: One of our chefs on the Mainland said to me, "I got these family friends that really want to do a cookware line with you." So I met with them. They'd been working on this line of cookware and they wanted to know what I thought about it. I met with them and the quality was unbelievable. We made some small changes and then began shopping it around. The Home Shopping Network told us the product was top of the line, and that definitely it would be their top-of-the-line merchandise. They wanted to know if we'd be willing to go with colors, because everyone had stainless steel or Teflon, but no one really had colored cookware. So we agreed and started selling in 2004.

HB: How have sales been so far?

RY: Sales have been great. We sell out just about every time I go on TV. Last year we ran out, so I only went on about four times, but we otherwise go on about six times a year.

>> FAST FACT:

Roy Yamaguchi doesn’t disclose sales figures, but Restaurant Business magazine estimated Roy’s systemwide restaurant sales in 2002 at $85 million. It estimated average sales per restaurant at $3.6 million. Worldwide, Roy’s currently employs about 2,300 workers.

HB: You're also doing Roy's-designed kitchens?

RY: Yes, I partnered with Centex [Homes] in 2004. Their project is 252 condominiums in Ko Olina. They were going to have the kitchens as upgrades, but they had such a huge interest from their clientele that they decided to put them in all of them. Just about everybody who came to look at the model wanted it, so they just felt that it would be better to have it for everyone.

HB: On top of those partnerships, you've got a few others, including one with Continental Airlines in which you design menus for their first-class cabin. Do you do these partnerships to brand yourself in order to get notoriety as a chef?

RY: The reason I do things is because I want to do them. It makes my life more enjoyable. For example, I like to work with Continental, because they're a great airline. The TV show [Hawaii Cooks], when I first did it, I didn't do it as a cooking show. It was more of a lifestyle show and the purpose wasn't for my cooking abilities, it was to showcase the people of Hawaii. Then there's other things we do. Cookbooks are a great venue to showcase our restaurant. If you talk about branding, cookbooks are a great way to do it. Because it's something that's tangible that people can take away. Ultimately, everything is branding. It always helps to brand. And I think that there are certain individuals or corporations that we can tie in with that will help build our brand. But you have to be able to do it in a way where you're working with the right group and you're doing something that benefits both parties.

HB: Do you consider yourself a businessman?

RY: I don't really call myself a business guy, but I think what's important is that I believe I understand the needs of our guests. I mean, restaurants are still our main focus and main goal. I started as a chef, so I consider myself a chef more than anything else. And I still love to cook. But in that regard, business is extremely different now. Twenty or 25 years ago, if you were a great chef, the chances of succeeding with a restaurant were great. It would be pretty hard to fail. But in this environment, for the last 15 years, just to be a great chef doesn't cut the mustard. There's so many different things that contribute to the success of a restaurant. There's restaurants out there today that have mediocre food that are extremely popular and successful. So there is no magic formula.

HB: Has anyone ever advised you on how to grow the Roy's empire?

RY: No, I mean, everybody wants to be my mother. Everybody always puts in their two cents. Which is great, it's free advice. But it doesn't mean I'm going to do it. But it's great that there are people out there trying to help me out. So as far as "advice," no. But there's people who want to give me more or less financial advice.

HB: Weren't you originally a part of the Iron Chef TV show?

RY: Well, yes and no. What happened was Larry Thompson, who's the CEO of Lions Gate, wanted to bring the Iron Chef program to the U.S. But he wanted to do a primetime show, sometime Monday through Friday between seven and 10. He didn't want it on cable. So he selected me to be the Iron Chef Asia. They filmed two shows for the pilot and it played on UPN. The ratings were high, but everybody felt it wasn't high enough to do a full-blown, 13-series season. So I don't know what he did with it. I assume he sold it or gave it back, but now it's back on the Food Channel.

HB: So you've never been on the one that's on now?

RY: I don't want to. [laughing] It's not part of the business plan.

HB: So what is next, according to the plan?

RY: I'm going to get into food products, probably next year some time. I've been kind of going slow at it, because I haven't had time. I just started my spices and we're going to get into sauces and dressings and stuff like that. You know, for me, the work is never done. Even if everything's going okay, I never take anything for granted.

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