Law of the Jungle
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Law of the Jungle

Eat, or Be Entertained, and Eat Some More

 

As you approach the stone dwelling, the sounds of jungle birds meet your ears, you are drawn to the thick, lush surroundings of foliage. As you enter the thicket, you are met with elephants watering themselves, a family of gorillas greets you with their playful noise. Where are you? Africa? A new zoo? The Rainforest Cafe? Bingo.

It is one of the few new-generation theme restaurants that is making money and growing

A fully tamed synthetic paradise, Rainforest Cafe creates an environment that appeals to all five senses. Smells of fresh flowers, the feel of steamy mist, the sound of cascading waterfalls, and incredible visuals that entertain. It is difficult to comprehend how detailed the Rainforest Cafe is until you’ve seen it. All age groups are attracted to this concept, and it’s easy to see why it’s a destination restaurant as well as a place where the "locals" will repeatedly visit.

It is one of the few new-generation theme restaurants that is making money and growing, despite the beating its stock has taken at the hands of Wall Street, primarily because its 1997 year-end earnings were a penny per share below expectations. They were still better than the records of competitors such as Planet Hollywood (now losing 49 cents a share) or Fashion Cafe. Rainforest began with earnings (profit) of one cent per share in 1995 and has grown to 27 cents in 1996 and 46 cents in 1997 and to 64 cents in the past 12 months, as of January 26. They must be doing something right.

Steven Schussler, founder of Rainforest Cafe, started designing a prototype of a jungle-themed restaurant in 1979 in his own home. He removed all the furniture, installed fish tanks, painted the ceilings black to create a night sky, grew rain forest plants, and found a way to make mist rise from under the floor. Steven also had 45 parrots, four toucans, two tortoises, an iguana, and a diaper-clad baboon named Charlie.

Schussler was destined either for a stay in the sanitarium or to become the author of the epitome of themed restaurants. After 17-plus years in research and developement (he also tested recipes for two years), Schussler, along with a group of investors headed by Lyle Berman, chairman and C.E.O of Grand Casinos, Inc., opened the first Rainforest Cafe in 1994 at the Mall of America in Minneapolis.

Aggressive plans of growth and with more than $110 million in cash and investments

With 30 restaurants open, in entertainment meccas as well as the not so glitzy locations, the concept appears to be the "true" mold for themed restaurants. Combining atmosphere and food quality is a trademark of the concept, as well as the theme-based, on-site retail store, offering an exclusive line of clothing, caps and eight Rainforest characters. The Rainforest Cafe Retail Village also offers a wide variety of rain forest themed items from around the world, including Rainforest Cafe private label bath and body products.

The menu is all theme-oriented: appetizers (Island Bruschetta and Forest Flatbread), soups and salads (Jungle Safari Soup, eggplant, zucchini, tomatoes,sausage, and spinach topped with fresh grated parmesan cheese and pasta), entrees (Sunset Salmon), pasta dishes, comfort foods (Bayou Blackened Meatloaf), burgers, pizza, and sandwiches. The desserts an adventure in themselves making calorie counting extinct, like: Chocolate Diablo Cake, Tortoise Ice Cream Pie, Gorillas in the Mist Banana Cheesecake, and their signature dessert Monkey Business Coconut Bread Pudding. A full variety of fresh juices, smoothies, specialty drinks and wine and spirits are available as well.

The publicly traded company (NASDAQ: RAIN), is looking for an aggressive plan of growth (7-10 units per year) and with more than $110 million in cash and investments (end of fiscal year 1997) they have the financial resources to grow. Rainforest Cafe’s average unit volume, according to the 1997 financial report and including the Downtown Disney Marketplace unit, is the highest of any publicly traded restaurant chain or restaurant/retail concept in the country.

All the restaurants are built on the same prototype with design exceptions. The Magic Mushroom Bar is a standard, but variations like volcanos and waterfalls are site-oriented. The restaurants range from 12,000 to 23,000 square feet, with between 275 and 450 seats and 10 percent to 25 percent retail space.

Leases are favored and most current leases include both fixed rate and percentage rent provisions. Market requirements are pretty much open, but the company targets entertainment, tourist and other high-traffic areas.

The company is headed by Lyle Berman, Chairman and CEO, he also is Chairman and CEO of Grand Casinos, Inc. The latter was recently merged by Hilton Hotel Corporation via a tax-free distribution of its casino gaming operations to shareholders, creating a newly formed gaming company named Park Place Entertainment (NYSE: PPE). Concurrently, Park Place Entertainment acquired the three Mississippi gaming operations of Grand Casinos, Inc (NYSE: GND). In the Grand merger, Park Place has assumed approximately $565 million of debt and issed shares of Park Place to Grand shareholders.

Founder Steven Schussler is senior vice president of developement, which seems well suited to his "nutty professor" personna, with the ideas flowing and the jungle in his house. He has opted to leave the business end to others and give in to his creativity.

For more information, write to Rainforest Cafe Inc., Stephen Cohen, vice president, real estate, 720 South Fifth Street, Hopkins, Minnesota, 55343, or phone (612) 945-5400,

Fax 945-5492, or visit:

http://www.rainforestcafe.com.