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Dreams of building a restaurant empire

Michael Hodgdon:
Dreams of building a restaurant empire

I have seen the future and the future is beer.”
That’s what Michael Hodgdon told his future business partner David Katleski in 1989. At age 25, Hodgdon for a few years had been toying with the idea of becoming an entrepreneur.
It was not until he stumbled upon a brew pub in Northampton, Mass., that he realized he was meant to go into the brewery business. The same night he discovered the brew pub, Hodgdon phoned Katleski, a friend from college, at 2 a.m. while he was half-drunk.
“David and I had been searching for the right business for some time and I knew right away this was the right thing,” Hodgdon recalls.
Hodgdon befriended the owner of the brew pub and over the next year learned all about the business of beer making. He says there was a fraternal bond between beer connoisseurs then that probably does not exist now.
“If someone were to come to me now and ask me about the beer business,” he says, “I would be hesitant to share my knowledge.”
How does a 25-year-old with a dream end up running a multimillion-dollar business? It was no planned course. Hodgdon says he acted on his instinct for self-preservation.
Upon graduation from Siena College in Loudonville, N.Y., in 1986, Hodgdon headed to New York City to take an entry- level job in the product management division of the Chase Manhattan Bank. Feeling restless, he accepted a job offer at a Wall Street brokerage firm in 1987. When the market crashed in October, Hodgdon found himself out of work and headed home to live with his parents in North Adams, Mass.
At the time, he felt down about the hand he had been dealt, but now realizes he is better off for it.
“The time I spent in New York was essential to my development,” Hodgdon says. “I learned how to relate in a business context, and how to work in a corporate atmosphere.”
He also realized that the politics of corporate life was not for him.
With a promising Wall Street career behind him, Hodgdon found work at a small real estate development firm in Massachusetts. He used his expertise in real estate to invest in his own land deal.
Hodgdon was able to turn a timely profit from the investment. Then in 1992 he again joined the ranks of the unemployed–this time to pursue his dream of opening a microbrewery.
After quitting his real estate job, Hodgdon worked full time drawing up a business plan and meeting with potential investors. He also took on kitchen jobs at $5 an hour to get a feel for the business.
“The restaurant owners didn’t know I was there for the experience,” he says. “They were just happy to have someone show up to work for $5 an hour.” Hodgdon says that experience made him empathetic to restaurant workers who work very hard for little pay.
For the next two years, Hodgdon and Katleski pursued potential investors with no success.
“We were two young kids without any business experience,” Hodgdon says. “We were going to investors and telling them we don’t have any restaurant experience, we don’t have any money, but we’re willing to work hard at our idea.”
His family urged him to give up and get a job. Just when he was ready to throw in the towel, a group of investors came through with financing.
The first Empire Brewing Co. opened in Syracuse in October 1994. It was an instant success, Hodgdon says.
“We picked Syracuse as a location because our research showed the city was ripe for that type of restaurant,” he notes. “It was a hit with college students and the business crowd.”
Empire Brewing Co. won rave reviews for its inventive menu from Syracuse restaurant critics. The restaurant serves trendy Cajun and ethnic dishes along with burgers and fries.
With the opening of the brew pub, Hodgdon and Katleski began to develop their roles as owners. Hodgdon crunched numbers while Katleski focused on developing menus.
“The beauty of our partnership is we both recognize each other’s strengths and weaknesses,” Katleski says.
He believes he could not find a better partner than Hodgdon, noting they have never had an argument since they met in college.
With the roaring success of the Syracuse location, Hodgdon soon had thoughts of expansion. He and Katleski looked westward to Rochester.
“We wanted to be part of the rejuvenation of downtown,” Hodgdon says.
They picked the High Falls area for its proximity to Eastman Kodak Co. and the city’s commitment to develop the area as an entertainment district. Financial help from the city sweetened the pot, he admits.
The business obtained 25 percent government financing for the $1.4 million restaurant and brewery. The rest of the money came from two of the original group of investors. Hodgdon and Katleski contributed “sweat equity.”
While his partner manages the Syracuse location, Hodgdon runs operations at the Empire Brewing Co. on State Street, which opened in January. So far, he says, the Rochester business is exceeding their expectations. Patrons have flocked to the restaurant for business lunches and after-hours dinner and fun.
The true test, he acknowledges, will come in winter when the Frontier Field crowds are gone and cold weather might keep people from venturing outside.
Even so, Hodgdon believes his restaurant fills a niche in the local market.
“Rochester lacks festive downtown dining,” he says. “We offer fine dining in a casual environment.”
The menu, the architecture and decor are all part of the experience at Empire Brewing Co., he adds.
Hodgdon describes a recent scene at his restaurant that he says would be hard to find anywhere else in Rochester:
“It was 11 o’clock at night, and a zydeco band from Lafayette, La., was playing at the restaurant. The bar was packed with people; the restaurant was filled with diners of all ages. There were people shooting pool and everyone was swaying to the rhythm of the music, and I thought to myself, there’s no way you can find this scene anywhere else in Rochester.”
Everything in the 11,000-square-foot restaurant–from the decor to the coasters–has been carefully planned. Lift up a mug from the table and you will find the message “drink beer” on the coasters. The wait staff also sport T-shirts and caps reminding patrons to “drink beer.”
Hodgdon appears at ease with people. He enjoys being an active manager and works the floor of the restaurant. Customers often find him chatting at the bar or lending a hand in the kitchen.
“We’re hands-on owners,” he says.
Empire Brewing Co. employs 110 full- and part-time staffers in Rochester. Contrary to the restaurant industry standard, Hodgdon says, most of his employees are full time with benefits. Hodgdon also is trying to buck the revolving-door aspect of the restaurant business. He encourages creativity among staffers, and constantly seeks feedback from his workers on how to improve the operation. While he says the firm offers competitive wages, Hodgdon believes there is more to life than money. Many people choose to work at Empire for its atmosphere and for the opportunity to control their own future.
The flexibility impressed Cheryl Heberger. She worked at several local restaurants before joining the Empire Brewing Co. staff.
“It’s the best job I’ve ever had,” Heberger says. “I respect Mike a lot. He allows us a lot of room to be creative. He’s always willing to listen to any suggestions we have.”
Heberger says she is in for the long haul. She wants to build her career at Empire Brewing Co. and hopes to move up from her managerial position.
Room for growth prompted another restaurant veteran to make the switch to Empire Brewing Co. Delmar Crim, director of food operations at the restaurant, had 24 years of experience as a chef prior to joining the staff.
“They’re a lot more open in their thinking,” Crim says. “Neither (Hodgdon nor Katleski) had restaurant experience, which allows me to go into directions we would not otherwise be able to go in.”
Hodgdon shifts much of the credit for his success to his staff.
“This business is a labor-intensive business and you’re only as good as your people,” he says, adding that he believes in rewarding staff and always tries to promote from within.
Eight months ago, Steve McCoy joined Empire as a prep cook. Now, he is training to be a cook supervisor. For those who are willing to work hard, he says, there is plenty of room for growth at Empire Brewing Co.
“Mike gives everyone a fair shake,” McCoy says. “You can go past your managers and go straight to Mike if you have a problem. He treats everyone fairly.”
Hodgdon says part of the reward of being a business owner is being able to give back to the community. He notes there are many single mothers working at the restaurant as waitresses making a good wage, and says he believes in giving a chance to people who may be down on their luck.
The success of the two restaurants is prompting thoughts of expansion. Hodgdon and Katleski are looking at the Buffalo area and the mid-Atlantic region. There also are plans to market Empire Brewing Co. beer in retail stores.
What once was a stumbling block in Hodgdon’s career helped him to achieve his goal of being an entrepreneur. He offers this advice to others who may be considering the same path: “Look before you leap; always do your homework. But most importantly, give yourself the opportunity to fail. There is no disgrace in failing.”

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