Business ownership in a shaky economy

July 07, 2012|By ARNOLD S. PLATOU |
  • John Walla opened second of his Black-Eyed Susan restaurants in North Pointe shopping center.
By Kevin G. Gilbert/Staff Photographer

When John Walla opened Black Eyed Susan restaurant near Hagerstown in January 2008, he had “not a clue” that the nation’s economy had just sunk into recession.

“Hindsight’s 20/20,” Walla said last week. “I might have went a different direction” had he realized what was happening, he said.

But Walla’s restaurant has survived and, this past April, with the economy still shaky, the Hagerstown native opened a second — in the storefront where a sports restaurant and pub closed in 2009.

Slightly up or sliding deeper, Washington County’s current economy is the slope onto which a lot of entrepreneurs still are moving, undiscouraged, and full of hope and faith they will succeed.

A ‘very scary’ purchase

Sherrie Blackwood wasn’t interested last fall when her former employer and then, her own husband, Jamie, asked whether she wanted to buy a Hagerstown-area pizza shop.

“I actually said no at first,” recalled Blackwood, a longtime hairdresser who is now 45. “Then, I thought about it for a while, that when my husband retires, he’s going to be young. (With this), he’ll have something to go to.”

Still, considering the recession, buying Fox’s Pizza Den at 18728 North Pointe Drive in the Hagerstown Towne Square shopping center in January was “very scary,” she said.

Adding to that was the knowledge that the woman for whom she had worked for a while had wanted out — barely two years after opening the shop.

The woman, Lisa Wilson, had worked for several years for a medical agency when she decided in 2009 to buy the pizza shop franchise. It was her first business.

In a Herald-Mail story at the time, Wilson was asked, given the ongoing recession, “Are you crazy?”

“You’re not the first person who has asked me that,” Wilson said then, with a laugh.

Wilson, who could not be reached for comment for this story, said then that she just felt it was time and that people still like to buy pizza.

People told the Blackwoods they were crazy, too, Sherrie said.

But so far, they have managed to increase sales, said Jamie Blackwood, who is 50. He is a longtime federal employee who volunteers locally as a firefighter and as coach of the Washington County Northstars ice hockey team.

Profit-wise, “we’re a bit over the Mendoza line, as they say in baseball,” he said, referring to former Major League shortstop Mario Mendoza, whose .215 lifetime batting average was considered marginal.

It’s been better than that, his wife countered.

“Our goal is to pay our loan off within five years, so, that being said, (the profit margin) has been razor thin,” she said. “I think we’re definitely getting busier. I have so many regulars in my lunch crowd that yesterday, I actually had to have two drivers at lunchtime, which, for a shop our size, is very unusual.

“So I think there is some improvement. I don’t want to say ‘major’ for fear it would change.”

For now, the downside to owning the business is that because she already has a full complement of employees — 15, including her children, her parents and friends — she only can sympathize with the adults who come seeking jobs, she said.

“Just like the gentleman that’s a bricklayer,” she said, recalling one of those who inquired recently. “He was very educated, it seemed. He sounds like he really cares. He was willing to work pizza delivery.”

“That tells you how bad the economy is,” she said. “It’s very sad.”

Taking a big step

In 2010, two years after renegotiating a lease to help keep their pizza shop open in Hancock, Lisa and Bob Johnson took a big step in another direction.

The Johnsons opened a Fox’s Pizza Den franchise in Berkeley Springs, W.Va., just south of Hancock.

“We’re only like seven, eight miles from our other shop, so it was kind of scary,” Lisa Johnson said.

But the new business has done well, she said.

“Over here, there’s a lot more population than there is in Hancock. Berkeley Springs is a lot more,” she said. So the shop is “constantly packed. It was definitely a smart move,” she said.

Now, she said, the couple has 14 employees in Berkeley Springs and about 10 at the Hancock Fox’s Pizza Den.

The Johnsons have no plans to open more.

“No, I don’t think so,” Lisa Johnson said. “Believe me, we’ve had so many people in here want us to open one in Hedgesville (W.Va.). (But) I think two’s enough.”

Restaurant for ‘a steal’

Shortly after Thanksgiving 2009, the Burhans Station restaurant building in Hagerstown was sold at a public auction for $200,000 — “a steal,” the auctioneer said then.

The seemingly lucky buyer of the 301-307 S. Burhans Blvd. building, which had a tax assessment value of $641,900, was Angelo Scavone.

Burhans Station had opened in 2001 and closed sometime before the auction because of the sluggish economy.

Scavone, who already owned some Italian restaurants in Pennsylvania, said he would reopen the Burhans building as a family restaurant.

Called Vito’s, the new restaurant had opened apparently by late 2010. That’s when Scavone applied for a liquor license for the restaurant, according to Kelly Carr, administrative assistant for the county Board of License Commissioners.

The license was granted, but Vito’s “closed last year and they never renewed again,” Carr said.

Scavone couldn’t be reached for comment for this story.

Several weeks ago, Scavone contacted Mortaza “Mort” Behpouri, a Hagerstown businessman who had owned a Subway restaurant here for 12 years and who has owned Railroad Junction Restaurant at 808 Noland Drive since 2008.

Behpouri said Scavone called him with a sale offer after a mutual customer gave Scavone the telephone number. Behpouri bought the former Vito’s for $200,000 on June 8, according to county deed records.

Behpouri, 61, said he had been thinking about maybe retiring, but he decided to open another new restaurant as a challenge.

“Life is challenging. So you got to challenge it,” he said.

He said he knows well the rigors of the current economy.

A native of Persia, he said he came to the United States in the 1970s, earned a degree in marketing and management, and managed a fast-food business. Long after becoming a U.S. citizen, he came to Hagerstown and bought a Subway franchise in the 1990s.

Before he sold it in late 2008, Behpouri said, the recession already had hit hard.

“We lost lots and lots of customers,” he said. “If they were buying subs and drinks and chips before, then they were just buying subs. We felt it (the recession) big time.”

Likewise, his business at Railroad Junction has been hurt, he said.

Nonetheless, Behpouri said, he hopes to open the new restaurant this year. He plans to operate both for a while before deciding whether to cut back to just one.

He’s hoping the economy will bounce back, especially after the presidential election in November.

“People need jobs, financial support,” he said, noting he plans to hire “maybe 20” people for the new restaurant, in addition to the 16 he has at Railroad Junction.

“You have to have good management skills. I could have failed a long time ago,” Behpouri said. “When I manage, I know how. I have been successful. And you have to put your heart in your business.

“Wish me luck,” he said.

After the auction

The auction of the Burhans Station building in late November 2009 occurred about a week after Patrick Amatucci opened a new business.

Eight years before, Amatucci and three other Hagerstown businessmen paid $100,000 for the building that became Burhans Station, according to deed records. The four, in a partnership called Too Many Daves LLC, were David K. Lookabaugh, David Rider, David C. Lyles and Amatucci, according to a deed of trust they signed in 2001.

The 2009 deed in which Too Many Daves transferred ownership to Scavone bears Amatucci’s signature as managing member of Too Many Daves.

None of the four could be reached for comment for this story.

After the 2009 auction, Amatucci was quoted as saying the $200,000 price “wasn’t what I was after, but I can live with it.”

He said he had started a new business called Wesel Boulevard Cafe and Liquors at 1644 Wesel Blvd.

Amatucci’s business isn’t at that location any longer, if it still is in business. He held a liquor license for it until August 2011, “when he sold or gave it up,” according to Carr, at the Board of License Commissioners.

Time needed to succeed

Ramkrishna “Ram” Patel is in a family partnership that opened Café Liquors, a new liquor store, this April at 1644 Wesel Blvd., where Amatucci’s business had been.

Patel, who manages the new store, said the similarity in business names is just because “I liked it.”

Last year, Patel opened Rosewood Liquor, a store in Rosewood Commons off Robinwood Drive. He said he manages that store, too.

Patel, 44, moved to Frederick County, Md., in 1997 and bought a 7-Eleven convenience store that he still owns. The following year, he said, he and his family bought the Cliffside restaurant and hotel in Harpers Ferry, W.Va., converted it to the Quality Inn and Conference Center, and sold it in about 2008.

Business at Café Liquors is “not good yet,” but, he said, any new business — regardless of the economy — needs time to succeed.

He said he is confident the local economy will improve because he’s seeing big chains such as Hobby Lobby and Sonic open here. Economic recovery is “going to take another year or so,” he said.

A second location

And then, there’s John Walla’s latest venture.

Walla, 45, said he decided to open a second Black Eyed Susan restaurant because his first was attracting more diners than he could seat on weekends and doesn’t have enough parking.

The 17102 Virginia Ave. home of the first restaurant was a small sub shop called Hickory Corner when Walla bought it in about 2003. He kept the name and added a catering business, which in 2008 he transformed into the restaurant it is today.

The difference is that when he started during what he later realized was a national recession, the restaurant “didn’t hit the projections” he had made. So, Walla said, he changed his menu and lowered prices.

Sales at the Virginia Avenue location — which he now calls Black Eyed Susan South — have been increasing since, he said. He has about 10 employees there and about 25 at his new restaurant.

Black Eyed Susan North is in the North Pointe shopping center in the same storefront occupied by Beef O’Brady’s from 2007 to 2009.

Walla said he knew the short-lived sports pub and restaurant had been there before him, but neither that nor the empty storefronts near it discouraged him.

“It’s a little on the slower side on the customer base coming in, (but) it still is a good location” with lots of parking, he said.

“You have to” have faith and hope, he said. “I don’t see it coming back” to the economy’s roaring days of 2004 and 2005.

Success in the future will be measured differently, he said.

“I think people are more aware of the different (economic) bubbles that burst,” he said. “I think people will be a little more shrewd with their monies.”

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