Consultants profit from restaurant letter grades

Eateries seeking A’s are lining up to get expert help.

crains-logoSince opening in June 2012, La Marina, a waterfront restaurant in northern Manhattan, has notified employees to cover the fruit at the bar and not to store the ice-removal utensil in the freezer.

Behind these instructions—and a bunch more—is a consultant who has guided the 292-seat eatery in its efforts to comply with the New York City Department of Health and Mental Hygiene’s regulations. As a result, on its first inspection last September, the 300-employee venue scored an A.

“We’re pretty buttoned up,” said La Marina Controller Marybeth Higgins, adding that the consultant continues to point out “what could be a problem and needs to be addressed.”

While the city’s letter-grading system can give restaurateurs a bad case of indigestion, it has been good news for consultants. The grading system is helping to drive up revenue for some of these experts and has spurred the launch of more restaurant advisory firms. With eateries facing tougher and changing health regulations, attorneys and former health inspectors, in particular, have become the specialists du jour for pinpointing potential health and safety violations, heading off fines and generating A-worthy operations.

In New York’s competitive restaurant climate, many eateries deem that kind of hand-holding essential. It has reduced their chances of getting shut down by the Health Department or receiving an undesirable letter grade, which can instantly drive patrons to A-brandishing rivals.

“Because the letter-grading system has gotten so much attention, restaurants need to earn a letter A,” said Andrew Rigie, executive director of the New York City Hospitality Alliance.

In response to complaints, the City Council has introduced a bill that may make the system less challenging for restaurants to navigate, reducing fines they may face and subjecting them to fewer violations, among other changes.

Meanwhile, Mr. Rigie said, many owners are seeking help from consultants.

Some can be pricey. Local consultants generally charge anywhere from a couple of hundred to many thousands of dollars, depending on the eatery’s size, number of locations and what the consulting firm offers, such as mock inspections, permit expediting and representation at hearings to appeal violations.

Letter Grade Consulting Inc., in Brooklyn’s Carroll Gardens, runs mock inspections, with fees on a per month and per location basis, and charges between $200 for a takeout place and $1,500 for a large hotel food-service operation. A Web-based food-safety program for employees runs $29.95, but it’s complimentary for eateries signing up for monthly inspections.

Leon Lubarsky and Rada Tarnovsky, partners in a 12-year-old law practice that bears their names, started Letter Grade in March after noticing restaurants with below-A grades near their office.

With six full-time employees, Letter Grade has snagged 60 restaurants as clients, averaging about 10 new clients a month. The partners expect their consulting firm to become profitable after its first anniversary.

“We’re doing better than what we initially expected,” said Mr. Lubarsky, who declined to provide the firm’s revenue. “The need is tremendous.”

Mock inspections

Two years ago, Michael Jacoby, a longtime restaurant consultant, created Assured Food & Safety, a profitable membership-based company in Manhattan with 250 eateries, including franchised places. On an as-needed basis, the firm hires three former health inspectors and six food-safety experts to handle the workload.

Annual membership ranges from $500, which covers phone consultations, to $1,500, which encompasses mock inspections, food testing, food-safety training and court appearances. Revenue is slated to increase 20% this year over 2012 results, according to Mr. Jacoby, the firm’s president, who declined to disclose revenue figures.

Growing clientele

Since the city started the grading system, Manhattan-based Health Inspection Consulting Corp.’s roster of steady clients has increased about 25% to 150 restaurants, while revenue has jumped by as much as 30%, according to Jack Acocella, a former health inspector who owns the profitable 19-year-old consulting firm.

Mr. Acocella, who declined to disclose revenue figures, generally charges between $200 and $400 per location, depending on the restaurant’s size and amount of time involved to get the operation up to code.

“People have come out of the woodwork to do consulting because there’s huge demand,” he said.

By Cara S. Trager
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