Once a nationally-recognized downtown Cleveland bistro known for its homemade sauces and fresh seafood, Sammy’s in the Flats’ busy weekend traffic didn’t attract enough diners to make up for slow weekdays.
On top of that, tax law changes in the late 1980s meant many executives could no longer deduct the full cost of business lunches as a business expense. Lunchtime traffic at Sammy’s dropped off dramatically.
In 1990, Fugo was prepared to close the restaurant she and her husband, Ralph DiOrio, had founded 10 years earlier, and concentrate on catering and banquets. But it took another 10 years to finally shut it down.
“Had we been very decisive and bold, we should’ve closed the restaurant right when they passed that legislation, which many fine dining restaurants nationally did within a year,” Fugo says. “We probably should’ve done that, but we were so emotionally attached to Sammy’s, as sort of our baby, we talked about it for 10 years.”
Sammy’s in the Flats opened in 1980 as a night club that also served lunch. The restaurant added dinner to its menu the next year.
“Higbee Co. had property in the Flats that they were looking to sell, so they became our banker,” Fugo says. “Using Sears credit cards and my grandmother’s Westinghouse Roaster, we started as a night club.”
The next year, the couple took out a loan to build a small kitchen, not only for dinners but for catered events. Those early events were a precursor to what would become its thriving catering and banquet business.
Sammy’s, which is held under the corporate name City Life Inc., has five banquet facilities, three downtown, one in University Circle and one in Willoughby Hills. Fugo’s chefs can serve up to 1,000 people at the Sammy’s facilities, or can cater for up to 10,000 at an outside location.
Fugo first realized this potential in 1985 when the couple opened the 10th Street Market, an upscale grocery store. The market was a success, but not in the way Fugo expected.
“Customers wanted the food we had on display cooked and sent to their office or sent to their home or somewhere,” she says. “Within six months of opening that store, we knew that catering was becoming more important. We looked at the 10th Street Market as very much our college experience in catering.”
Fugo and DiOrio set out to learn more about the differences between catering and the restaurant business. They started attending catering trade shows and talked with consultants who were catering experts instead of restaurant consultants.
“Banquets and catering are a different type of sale than the restaurant business,” Fugo says. “The restaurant business a retail-driven business. With banquets and catering, your operational success can allow you sales success. We’ve tried to be strong operationally, which has allowed us to build a sales team and a customer base of people who continue to support what we do.”
Meanwhile, with the business meal tax law changes in the 1980s and an economic recession in the early 1990s, Sammy’s in the Flats started to struggle.
“It was within a two-week period that we finally said, ‘We’ve been looking at this for 10 years, it’s time.'” Fugo says. “This was not a knee-jerk reaction at all. It was very slow and carefully deliberated. My mother is still mad at me that I closed the restaurant.”
The restaurant closed in April 2000. The failure was difficult for Fugo and DiOrio, but thanks their efforts building the catering and banquet business, the coupled didn’t have to start over.
“I couldn’t have made my bankers any happier,” Fugo jokes. “The bankers’ reaction was, ‘Why didn’t you do this years ago?'”
Sammy’s catering and banquet business continues to grow, thanks to the contacts Fugo and DiOrio built with the restaurant and the repeat corporate clients that hire Sammy’s for business events.
The couple’s unique perspective as both restaurant operators and caterers gives the business an edge over other food service operators.
“The food service business has not always been known for managerial excellence,” Fugo says. “Our staff has a lot of years of experience. The reality is, in our business, it takes people about two years to become proficient in what we do because we don’t always work in exactly the same space. You may call us to come to a party in your home that we’re going to be at once. Our work space may change every day.”
Sammy’s 15-member management team is small for a company that hires as many as 700 part-time workers in a year and maintains a core staff of 100 to 200 chefs, servers, event planners and coordinators.
“We find in our business, a leaner organization is much more effective and much more responsive,” Fugo says. “We intentionally run our management team smaller and stronger. We are totally a people-run organization. There’s very little equipment or machinery in what we do, it’s all people. It’s very different from most corporate America.” How to reach: Sammy’s, (800) 837-5899
