INSIDE DISH: Patachou Inc. has full plate with expansion plans

Welcome to the 50th edition of IBJ’s video feature “Inside Dish: The Business of Running Restaurants,” which debuted in April 2010 to give readers an insider’s perspective on the high-risk world of eatery entrepreneurs.

Our subject for this anniversary edition is Indianapolis institution Patachou Inc., which took root in 1989 as Café Patachou in a modest, 1,600-square-foot retail space at 4911 N. Pennsylvania St. Without any practical restaurant experience, founder Martha Hoover nonetheless struck a chord with from-scratch cooking that emphasized fresh, farm-to-table ingredients long before the concept was chic.

Today, seven restaurants from downtown Indianapolis to Carmel operate under the Patachou Inc. umbrella, with two more slated to open by the end of 2012. Hoover, 57, also has aggressive plans to open as many as six new restaurants by 2020, at least in part by venturing outside central Indiana.

“We’re in our young adulthood,” Hoover said. “We’re at a point where we’re going to be searching and seeing what we can do and what’s out there for us.”

Hoover and a real estate advisor are actively scoping neighborhoods in nearby cities such as Bloomington, Lafayette, Columbus and Ft. Wayne. They also are considering out-of-state locales such as Chicago, St. Louis, Louisville, Ky., and Cincinnati and Columbus, Ohio.

“One of the criteria important to me is that I can drive there and be home in one day,” Hoover said. “And I’m looking for neighborhoods that really closely resemble Meridian-Kessler.”

Hoover, a former attorney in the Marion County Prosecutor’s sex crimes division, was pregnant with her third child as she prepared to open the first Café Patachou (with a startup investment close to $100,000). As a result, she tends to find parallels between the growth of her enterprise and the maturation of her 22-year-old son, David.

“It’s kind of like having a child,” she said. “There’s nine months of pregnancy, and then you go through a very difficult delivery. You go through infancy to being a toddler to the terrible twos, all the way through high school and beyond.”

A key moment in the evolution of the Patachou family came as David turned 16 and began to drive.

“I realized that I had a remarkable amount of freedom for the first time in many years,” Hoover said. “And that really made me sit back and think, ‘What do I want, where do I want it, and how am I going to get it?’ And it put into perspective that the business was maturing, and I really needed to make some plans for its adulthood.”

Hoover responded in 2006 by opening the first location of a new concept, Petite Chou. Inspired by French bistros, the Broad Ripple eatery expanded the Patachou palate to include dinner. A second Petite Chou opened in Carmel in 2009, followed by the Neopolitan-style pizza joint Napolese in 2011, located in the same retail strip at 49th and Pennsylvania streets where Hoover got her start.

A believer in long-term planning, Hoover has crafted a guiding document for further expansion called Vision 2020, which calls for 12 to 15  Patachou restaurants by the year 2020. The next two–the eighth and ninth in the family–are slated to open this year. Public Greens, a new concept featuring “guilty pleasures for healthy people,” is scheduled to open this summer at 902 E. 64th St. along the Monon Trail in Broad Ripple. A new Napolese is ballparked for the fourth quarter at 30 S. Meridian St. in the lobby of the former L.S. Ayres department store annex downtown.

The key to maintaining food quality and consistency between the different restaurants is Patachou’s production kitchen, first established in the mid-1990s after Hoover opened her second café. Anything that can be prepared ahead of time—such as salad dressings, desserts, soups, and specially prepared meats—is created in the kitchen and then delivered to individual locations.

“We have to have control over our food,” she said. “No one else is going to make our food the way we make it. No one else will have the oversight to make sure things are being made properly, stored properly and distributed properly. I’m a total control freak when it comes to our food.”

In January, Hoover relocated the kitchen from its original location at 126th Street and Gray Road to a new, state-of-the-art facility at 4923 N. College Ave. The 2,000-square-foot kitchen is adjacent to Patachou’s new 400-square-foot administrative offices, representing a $350,000 total investment for the firm.

“It’s as expensive as opening a restaurant, without the income potential of opening up a restaurant,” Hoover said. “But how else were we going to serve other restaurants, increase our capacity by opening up a new Napolese or Public Greens, or going to other markets? We really needed something that was state-of-the-art and that allowed for our future growth.”

Hoover expects to finance the expansion with a mix of bank loans and cash flow from the restaurants, as she has funded past growth spurts. Patachou Inc. is profitable, said Hoover, declining to provide specifics on gross sales and net income.

In the video at top, Hoover provides an oral history of her initial foray into the restaurant business in 1989 with Café Patachou, and the lessons and benefits earned from her naivete. In the video below, she discusses her initial decision to expand beyond the original location, the importance of the production kitchen, and her criteria for choosing new locations.