Reinventing Mr. Bertucci

Joseph Crugnale is sitting in a Bertucci's restaurant in Peabody. A waitress stands at the head of the table, pen in hand. Crugnale orders a club soda with lime and picks up the menu. His eyes drop to the Margherita pizza, priced at $14.99. "Outrageous," he says, estimating that the dish's ingredients cost $2. "These are very expensive pizzas." Pointing to the appetizer, he says, "Hummus Toscana. Hummus -- that's not Italian." He laughs. An antipasto arrosto arrives at the table, and he's confused. "Why do we have lettuce on this?" he asks, explaining that arrosto means "roasted." "What the hell's roasted on this?" Lobster fra diavolo comes next. "It should be a nice, spicy tomato sauce," he says, taking a hopeful taste. He pauses. "It's not spicy, and I don't get that nice tomato flavor. It's kind of cloudy."

He calls the waitress over. "Excuse me, is Mr. Bertucci here today?" he asks earnestly. The waitress laughs. There is no Mr. Bertucci, she explains. It's a made-up name, adapted from a character in The Count of Monte Cristo. Crugnale is impressed that she knows this piece of trivia, but he remains mostly unimpressed by the food. He picks at his lunch.

Although he goes unrecognized during this meal -- it's just the second time he's eaten at the chain in five years -- Crugnale, an Italian-born, Boston-based restaurateur, is the closest thing there is to Mr. Bertucci. He created the brick-oven-pizza concept in Boston in 1981 and took the chain public a decade later, eventually opening 95 restaurants as far away as Chicago and Atlanta. But in 1998, he was tossed aside in a hostile takeover. Crugnale walked away with $22.8 million, and since then he's invested a large slice of that fortune in two new restaurant concepts, Naked Fish and Red Sauce.

So on a Friday night a few weeks later, Crugnale stands outside the kitchen at Red Sauce in Newton, looking just as critically at the dishes heading toward his guests' tables.

"Too dry," Crugnale tells a cook, holding a plate of penne that hasn't enough sauce. "Add a little more." The owner is dressed, as always, in expensive-looking European clothing. Tonight it's black pants, a tight-knit black cardigan and close-fitting, open-collar shirt revealing a gold chain, and loafers. His body is lean; his black hair always appears freshly cut. He refuses to discuss his age, but according to public records, he's 52.

It's just after 7 p.m., and there's no wait for a table. Business has been slow at most of Crugnale's 10 restaurants, but this is the worst performer. It needs to gross $29,000 a week to break even. It's not. That's partly because the restaurant, on Beacon Street east of Route 128, has few nearby businesses to drive lunch sales. Crugnale also blames the affluence of the neighborhood, where he says residents can afford something more than Red Sauce's $15-a-person average dinner check. The food is also part of the reason. Not that it's bad, mind you: Food critics have given Red Sauce and Naked Fish moderate praise, but Crugnale pays the reviewers little regard. "I hate them -- half of them don't even know food," he says, mocking food journalists who believe that "the more expensive the restaurant is, the better it is."

That's just one of Crugnale's deeply held beliefs about food, some of which are out of step with his mainstream suburban clientele. He ridicules as lowbrow the food served at national chains like The Olive Garden, which he considers "an insult" to his Italian heritage, even as Americans wait in line for it. He strives to sell diners food that's "authentic" -- even if that means telling his customers they can't eat what they want. For instance, don't bother asking for a salad with blue cheese dressing at Red Sauce, because the restaurant only serves oil and vinegar or Caesar. Crugnale admits his vision is hurting sales."

The problem is, a lot of people grow up on Swanson's frozen food or Campbell's soup, and that's what they know," he says sadly. "That's why the Olive Gardens of the world do well." And one reason why Naked Fish and Red Sauce have been slow to catch on.

As Crugnale walks down a hallway outside the kitchen, he grabs a loaf of bread from a basket. It's supplied by an outside bakery, and the contract calls for it to be 3 inches longer. "They're shortchanging us," he says, heading for the kitchen to alert his executive chef.

Crugnale -- wealthy, successful, and with a track record most entrepreneurs would envy -- should have better things to do on a Friday night than worry about the length of loaves or how the Red Sox playoffs drive has cost him business. Financially, he admits there's a certain lunacy to pouring much of his hard-earned fortune into a new restaurant venture, one of the riskiest industries in the country. He shrugs.

"If it's in your blood, it's like those boxers who retire and then come back," he says. "I'm like a boxer. I'm back for more punishment. But I've been doing this my whole life. I just can't stop, even though there are a lot of times I wish I did."

When Bostonians think about the restaurant business, they rarely consider people like Joey Crugnale. Foodies buzz about the chef-owners of high-end restaurants, luminaries like Todd, Gordon, Lydia, and Ming -- people so recognizable that one needn't even give their last names. But far from their world -- a place where dinner checks routinely top monthly car payments -- lies a different, more democratic form of dining. It's an arena in which restaurateurs like Crugnale worry about "unit economics" and how to turn a profit on an $11.95 chicken parmigiana.

Cooking for the masses is in many ways a harder business than running a gourmet eatery. While Gordon Hamersley can maintain eye contact with most of the diners and his staff of 44 from the open kitchen of his eponymous South End bistro, Crugnale employs an army of 500, with district managers and dishwashers spread from Peabody to Hingham. He spends nights shuttling between restaurants and mornings tallying the previous day's sales.

"I wouldn't trade places with Joey Crugnale for all the money in the world, and he's just about got that," says Hamersley, who's known Crugnale since the 1980s.

These are tough times for many restaurants, due to the economy. For Crugnale, the struggle has been especially acute. Since opening his first Naked Fish in 1999, he's made a series of missteps. Nearly five years into the new venture, he's still working the kinks out. Can he make it fly? Jack Sidell, Crugnale's longtime banker and a former Naked Fish board member, isn't sure. "The jury is still out," Sidell says.

rugnale's story begins an ocean away from the neon-lit, strip-malled world where he creates his restaurants. He was born in Sulmona, Italy -- mid-calf of the boot-shaped country -- and immigrated with his family to the North End at age 5. There, his parents reared a family on the top floor of a triple-decker; his aunt and grandmother lived downstairs. They cooked every meal from scratch, Crugnale says; the only food that came out of a can was tuna fish. As a teenager, he worked as a porter at the Royal Sonesta Hotel in Boston, then spent three years as a waiter at Dom's, a waterfront Italian restaurant. He left Boston for Florida in the early 1970s, to escape a gambling habit and the gravitational pull of gangster life. When he returned three years later, he decided to go into the ice cream business.

He opened a store in Somerville, just down the street from the legendary Steve's Ice Cream, and relied on Tufts students to drive sales. In 1977, he borrowed money from relatives, bought Steve Herrell's store, and began expanding Steve's Ice Cream into a chain. The seed that became Bertucci's Brick Oven Pizzeria was planted when a storefront adjacent to the original Steve's went vacant. Crugnale bought the property as a defensive play, to prevent a fast-food chain from moving in. During a visit to an aunt's home in Italy -- over a meal cooked in her outdoor brick oven -- he dreamed up the idea of a brick-oven pizzeria. He opened the first Bertucci's in 1981, complete with a boccie court in the basement.

"I knew there was a market for upscale pizza," he says. "But it was more a hangout for my friends and to keep [competition] out. It wasn't geared to make any money."

That changed after he sold Steve's in 1983 and began focusing on expanding Bertucci's. He opened his second store in 1985 in Cambridge, eliminating the boccie courts ("Little kids were on the courts, and balls were flying everywhere") and broadening the menu to include salads and pastas. By the early 1990s, a dozen Bertucci's were opening every year nationally, and Crugnale was rich.

The ride continued until 1998. Bertucci's shares, hurt by investors' waning appetite for restaurant stocks and an overly ambitious expansion plan, were stuck around $6. So Crugnale proposed to take the company private, offering $8 a share. "I knew once I did that, the company was in play. But I ran the company, I was the founder; who's going to come in? That doesn't happen, I thought." Incorrectly. When New England Restaurant Co. offered $10.50 a share, Crugnale was backed into a corner. He agonized whether to borrow a fortune to top the bid. Then he had an epiphany during a visit to a Bertucci's in Washington, D.C.

"I go in at 11 a.m. We opened at 11:30, but the chairs were still up on the tables, one of the ovens wasn't lit, and there were only two people in the kitchen." Apparently a manager had gotten stuck in line at the bank, and subordinates weren't taking charge. "I thought, `I'm going to be on the hook for $80 million and depending on these people to help me pay that back?' I said, `You know what, maybe I'm better off not matching it and walking away.' "

So he did.

He has occasional second thoughts. In retrospect, he says, he might be better off financially if he'd never taken Bertucci's public and had instead kept his ownership stake high and milked the profits. Since his ouster, he's toyed with trying to buy Bertucci's back but says that recently he's lost interest. He worries that the new owners are setting prices too high and overemphasizing entrees instead of pizza. "I want them to do well," he says over lunch in the Peabody store. "They owned this market for quality pizza, but they got away from it trying to expand the menu. . . . If somebody wants to be aggressive and come into this market for quality pizza, there's an opening."

(In a statement, Bertucci's president Rick Barbrick expressed great respect for Crugnale, but he pointed out that customer satisfaction scores have risen 14.3 percent and average unit sales are up 35 percent since the company's 1998 takeover. Regarding prices, Barbrick says customers believe that "our quality far outweighs any difference in price.")

Today, Crugnale lives a comfortable life. He and his wife of 20-plus years have a son in college and a daughter in high school. They live in Belmont in a 17-room, 8,800-square-foot home previously owned by businessman David Mugar. Crugnale drives an S-class Mercedes. He power-walks a half-hour each morning on his 6-acre estate, then goes online to check his investments. He cooks lavish meals for friends in his Architectural Digest-quality kitchen or in his giant backyard brick oven. Every couple of months, he spends a long weekend in Italy, where he owns an apartment overlooking the plaza of his native village.

It's a blissful existence marred only by a single complication: his sometimes-quixotic attempt to build another blockbuster restaurant chain from scratch.

t's 8:45 a.m. on a Monday in the lakeside mansion in Peabody that serves as Naked Fish headquarters. Cathy Tsoukalas, chief financial officer, sits on a leather couch beside operations chief Steve Vallarelli. Crugnale sits in a chair, sipping Dunkin' Donuts coffee and throwing out rapid-fire brainstorms.

Last summer, the team began hosting employee appreciation events, but after they feted the staffs of a couple of restaurants, the idea petered out. Now Crugnale wants to try again. How about taking employees apple picking in the fall? Maybe with hay rides? "That's fun," he says. "That's team-building."

A moment later, he's talking about a promotion to fly someone to his hometown in Italy. "You can buy a trip to Rome or Venice, but you can't buy a trip to my aunt's house, with her old stove," he says excitedly. Tsoukalas and Vallarelli nod intently, but it's unclear exactly whom Crugnale is planning to send to Italy. A customer? An employee? Both? He quickly moves on. Where should they hold the Christmas party? How about a company outing to a soccer game? Should they launch a cooking school?

People who've observed Crugnale's career praise his conceptual skills. But most temper that praise with the observation that -- in a common criticism of entrepreneurs -- his gift for ideas isn't matched by a knack for patience or research. The result, some say, is impulsiveness.

"Joey is an incredibly creative, inspired, passionate man," says Kim Giguere-Lapine, who spent four years as Naked Fish marketing director before jumping to Vinny T's of Boston in early 2003. "But he doesn't stick with plans, and he doesn't watch results carefully enough. . . . You get this helter-skelter of crazy ideas, and you're really not sure what's working and what's not."

Crugnale's post-Bertucci's career illustrates that pattern. It began with a misstep called Jumbalaya, a Cajun-Mexican chain he launched in 1998 in partnership with Michael Larkin, the former co-owner of the Border Cafe in Cambridge. The deal seemed troubled from the start.

"For Joey to be successful, he has to fall in love with the concept, and he was not in love with that concept," says Sidell, the former Naked Fish board member. "He came off the rebound of selling [Bertucci's] and had to be in the action, like someone rebounding from a divorce."

In what associates say is classic Crugnale style, the management team quickly opened several Jumbalaya locations before it was clear that the concept was really working. "That was always my attitude," Crugnale says. "Let's open it up and figure it out after it's open. We've got a smart group of people, and we'll make it work." But he admits he never liked Jumbalaya's food, and he gives himself credit for pulling the plug on the partnership after less than a year. "It wasn't a failure," Crugnale says. "It was a decision not to continue."

Crugnale and his team say the Jumbalaya diversion drained money and managerial attention away from the launch of Naked Fish. Crugnale conceived it as an upscale, Latin-themed seafood restaurant that would be more funky and suburban than Legal Sea Foods. The first location, in Westborough, was a hit when it opened in 1999. Local businesses like EMC provided steady lunch business, and surrounding towns provided enough dinner customers to fill tables. With drinks like trendy mojitos, entrees of grilled fish, and side dishes like plantains, dinner tabs averaged $27 per person. Despite admonitions from advisers like Sidell to go slowly, the team quickly expanded the concept to a half-dozen more restaurants. At one point, Crugnale considered locations in Philadelphia and talked about a public offering. But as the chain expanded, the concept's limitations quickly became apparent.

Crugnale realized at the outset that the seafood-centric menu and the prices might limit families' desire to dine at Naked Fish. And because grilled seafood doesn't carry well, he says, the stores have never done much takeout. But Gerry Fruggiero, who worked as Crugnale's operations director for 16 years before quitting in 2003, says bigger problems materialized when the chain moved into communities like Watertown, Hingham, Lynnfield, and Quincy, places with limited expense-account traffic. "You need corporate America and the hotels, for the lunches and parties and functions," Fruggiero says. "The locations that followed that formula do pretty well."

As the economy slowed in 2000 and especially the next year, after 9/11, sales softened across the chain. To cut losses, Crugnale converted four of his worst-performing Naked Fish restaurants into lower-priced Red Sauces, including the one in Newton.

Despite the problems, Crugnale says today that his company is profitable. "Business hasn't been great," he says. "Last winter killed us with the weather, and we didn't pick up any steam in the summer. A lot of guys in private companies will tell you how great they're doing, but it's been tough for a lot of restaurateurs." Still, he's not panicking.

"It takes patience -- you have to develop [the concept], and it's all word of mouth," he says. "Some of my guys are like `Why don't we have lines every night?' But that's not the way it happens. . . . You have to hang in there and keep fine-tuning."

rugnale's strong ideas about food haven't made it any easier. He disdains the pretensions of upscale foodie culture. He bristles at the notion that a $29 entree prepared at a fancy downtown restaurant is inherently better than the $9.95 dishes he's selling at Red Sauce. "A lot of these high-end restaurants aren't that good," he says. "A lot of chefs cook for themselves, basically -- they're trying to outchef the other chefs, and that's not what the American palate really wants." He's too diplomatic to criticize any Boston chef-owners, but he points to New Yorkers Bobby Flay and Mario Batali as "so overrated." He says: "They're more focused on their own career as a chef than they are on their restaurants."

He also mocks diners who follow the herd to the newest pricey hot spot; they're driven by fashion and bragging rights, not love of food, Crugnale says. "Expensive food isn't better food. There's nothing better than a bowl of pasta with a nice Bolognese sauce you can get for $10. You don't have to spend $35 on an entree to get a great meal."

At Naked Fish and Red Sauce, he's trying to find the sweet spot between haute cuisine and the bland, mass-market cuisine dominated by chains like The Cheesecake Factory. But he admits his quest to sell customers on reasonably priced, authentic regional cuisine is slow to catch on. From the beginning, some of his staff urged him to worry less about authenticity and cater more to the established tastes of suburban diners.

"If you think of seafood, do you want grilled tuna with a coconut-lemon sauce or broiled scrod, fried clams, and fried scallops?" says Fruggiero. "I talked about trying to become a little more mainstream on the menu . . . [and] understanding what people want to eat versus what he thinks people should eat."

Since the beginning, Crugnale has vacillated over how ethnic and authentic to make his restaurants. Last fall, when a security guard at Logan Airport mentioned to him that he'd never eaten at Naked Fish because he doesn't like Cuban food, Crugnale began de-emphasizing the Latin theme, replacing samba music with jazz on the sound system.

But when Rosario Del Nero, his longtime corporate chef at Bertucci's, left the pizza chain to join Crugnale's team this past summer, the two men decided to crank up the ethnic influences. They spent weeks in the kitchen, reworking recipes. At Red Sauce, the menu now includes three kinds of risottos, four kinds of gnocchi, and five kinds of veal: francese, parmigiana, Milanese, marsala, and carina. At Naked Fish, additions include Cuban stuffed lobster, gambas al ajillo (grilled jumbo shrimp), empanadas, Catalonian fish stew, and two kinds of paella. Still, Crugnale admits his restaurants' strong ethnicity seems to hurt business.

"Less adventurous people have this block," he says. At Naked Fish in particular, the Latin-influenced food "sounds too foreign," he says, and many diners aren't willing to order a $19 entree when they don't know how it will taste. Crugnale hopes that, in time, "people are going to realize it's not like going to an Indian restaurant -- that there's a lot of basic [American-style] stuff you can get."

On a recent weeknight, Del Nero stands just outside the kitchen of the Naked Fish kitchen in Waltham. He's wearing a black baseball cap and peering down through reading glasses as finished entrees await their trip to tables. He sends a scallop appetizer back for a crisper sear. "We don't want to be a pain in the ass," he says, "but the way to teach is to make them do it perfect, every time."

Eventually, he believes, that work will pay off. "People are tired of bland Latin cuisine," Del Nero says. "What we're doing is authentic. It's going to attract people because it's just plain delicious."

After a few more minutes of quality control, the two men hop into Crugnale's Mercedes and head to another restaurant.

here is a famous shorthand used to describe the restaurant industry's brutal economics: Nine out of 10 restaurants go out of business. In fact, experts say, that much-cited statistic is an urban legend. More recent research suggests the failure rate among the nation's 870,000 restaurants appears artificially high because establishments often change names, and because many family-owned restaurants close if children aren't interested in taking over. "They decide to shut down, but it doesn't have to do with lack of consumer interest," says Hudson Riehle, chief economist of the National Restaurant Association.

Despite Crugnale's efforts to fine-tune Naked Fish and Red Sauce, his success or failure may be largely dependent on the strength and speed of the state's economic recovery. Peter Christie, chief executive of the Massachusetts Restaurant Association, eats lunch at Naked Fish nearly once a week, and he blames much of Crugnale's problems on the economic slowdown that hit soon after the Naked Fish launch. "He's at this in a tougher time," Christie says. But he sees signs the industry's slump is ending, a change that could propel Crugnale's restaurant turnaround. "I think we're starting to come out of it," Christie says. "Business is getting a bit better now."

Even if a turnaround takes hold, it's inevitable that Crugnale's current venture will be judged differently than most new restaurants. He is, after all, Mr. Bertucci, and his track record means that between the black-and-white categories of "success" and "failure" lies a large third category: not as successful as Bertucci's. For now, it's the place where Naked Fish and Red Sauce seem to be stuck.

For his part, Crugnale seems sanguine about his situation. He says observers don't remember how long it took for Bertucci's to catch on. And this time around, he says, he's consciously limiting the growth curve by retaining 100 percent ownership. Even if his new venture remains a struggle, it's more interesting than retirement. "People ask me what my goals are here," he says. "I don't know. I really don't have any."

He has no desire to take the chain public, he says, nor to open restaurants outside of New England. If he can get his existing places on track, maybe he'll expand to new locations in the region. Maybe he'll try another concept. "I have no investors, I own everything myself, so I don't have to answer to anybody. . . . There are no restrictions, and I like that freedom." Even if freedom, in Crugnale's case, isn't synonymous with having nothing left to lose.

Daniel McGinn is a national correspondent for Newsweek magazine, based in Boston.