Dec 18 2008
Making Sense of the Houston’s-Hillstone Debacle: Did it Have to Come to This?
By now you may have heard that Houston’s, with NYC locations on Park Avenue South and East 53rd Street, is changing its name to Hillstone Manhattan, and with that, also changing its concept to a more seasonal focus. I found out about it yesterday from this post on Eater. This has left a lot of people scratchin’ their heads. Seems like the gut reaction so far is “What the Hell Are They Thinking?” The Houston’s name has an incredibly strong brand identity and Houston’s is widely heralded as an upscale chain with great, consistent food and quality service. I for one grew up going to Houston’s in Atlanta with my parents on a fairly regular basis and the location at 53rd and 3rd is a go-to spot for Jill and I – everything is consistently spot-on good from the hickory burger and the famed spinach and artichoke dip, to the fall-off-the bone ribs, grilled chicken salad, french dip au jus and chicken fingers (an off-the-menu secret item). We also love the affordable wine list that includes several local selections from the North Fork and Finger Lakes. To us, it’s the ideal ‘non-chainy’ chain restaurant. So, what’s really goin’ on here? An astute Eater commenter, Industry Folk, posted: “My theory is that the re-branding MUST take place or else Houston’s will have to post calorie counts on all their menu items, as mandated by the New York DOH on all restaurant chains.” My interest was piqued. Could it really be that a huge restaurant group with over 50 restaurants nationwide was going through a massive (and undoubtedly expensive) re-branding just to avoid having to post calories on all menu items in accordance with Section 81.50 of the New York City Health Code? According to another Eater commenter, DjR, “I was told by a former manager that the reason they changed names was so that they didn’t have to post calorie counts.” Is it really worth risking all the goodwill and brand cachet Houston’s had built up over the decades? I decided to poke my head under the covers a bit and see what I could dig up. Find a legal analysis of Section 81.50 of the NYC Health Code, whether Houston’s, I mean Hillstone, no I mean Houston’s, received good legal and marketing advice, and see if Hillstone is just maybe stealing its name and concept from Blue Hill at Stone Barns, one of our favorite all-time places after the jump…
Most everyone is aware of the legal battles that ensued over whether New York City could force restaurant chains to list calorie count on menus. In April of this year a federal judge ruled that New York City could indeed force restaurant chains (with 15 or more outlets across the country) to post calories on their menus since such regulation is not preempted by federal law. I thought the purpose of this new “calorie-count” regulation was to protect against obesity by forcing fast-food chains to post calories for people that otherwise didn’t realize a Double Whopper with cheese is fattening. Was it intended for this legislation to also apply to upscale chain restaurants in NYC like Houston’s? To get to the bottom of this, I decided to put my legal cap on. I dug up the NYC Dept of Health’s Notice of Adoption of Section 81.50 and the language of the regulation. I also found a Calorie-Posting Compliance Guide for Restaurant Operators on the New York City Department of Health & Mental Hygiene website.
The background section of 81.50 discusses obesity as an epidemic and as a serious and increasing cause of disease (includes an interesting chart on how obesity prevalence in NYC increased by more than 70% between 1994 and 2004). Hmm, here I always thought New Yorkers were fit cause we walk around so damn much. The background goes on to provide some helpful insights about things you may not know, like “weight gain occurs when more calories are consumed than are expended.” Next it goes on to describe how Americans are eating out more now and that diners eat larger portions out than they do at home. Then it discusses how fast-food chains serve food that is associated with excess calorie consumption and weight gain and that about 90% of restaurant chains in New York City serve fast-food. They also provide data to show that people who eat at fast-food establishments consume more calories. While the background section briefly discusses casual dining chains, the vast majority of it focuses on fast-food chains specifically…and nowhere does it mention anything about a connection between upscale food chains and obesity.
The regulation further states the measure is narrowly tailored. Not so sure about that.
If it’s so narrowly tailored, then why is this happening to Houston’s and who may be next? Here’s the language that matters — the specific language of the regulation, and in particular, the definition of “Covered Food Service Establishment.”
Covered food service establishment shall mean a food service establishment within the City of NewYork that is one of a group of 15 or more food service establishments doing business nationally, offering for sale substantially the same menu items, in servings that are standardized for portion size and content, that operate under common ownership or control, or as franchised outlets of a parent business, or do business under the same name.
First off, I think it’s BS for a local NYC health regulation to have criteria that is based upon the # of chains nationally. It should be based on how many locations are here in NYC. Perhaps, this could have more ‘narrowly tailored’ the minimum requirement. Upscale chains like Houston’s would not have found themselves caught up in this calorie-count mess under such a definition. The use of a broad catch-all definition means this applies to many more, perhaps unintended, restaurant chains.
So, it appears Houston’s legal looked at this definition and then advised as to certain changes that, if made, would help Houston’s evade the overbroad definition. Here’s what they did:
The most important criteria for the definition is the following: ”a group of 15 or more food service establishments doing business nationally, offering for sale substantially the same menu items, in servings that are standardized for portion size and content.” They apparently advised Houston’s to change the concept. Hence, on the Hillstone website, it reads “Hillstone in New York City — two restaurants with an elevated, made from scratch cuisine featuring the American classics our guests have come to expect and love.” There has been talk about introduction of a new, seasonal menu, but looking at the menu on Hillside’s website, everything looks the same (at least for now). Will be difficult for Hillside to evade this requirement if they continue to feature the American classics people like me have grown to love at Houston’s. Sounds like substantially the same menu items to me. If they can get around this criteria about the same menu items, however, then the other criteria would not come into play (i.e., the same name or common ownership/control) and the restaurant would not be deemed a ‘Covered Food Service Establishment.’
It’s clear that just changing the name alone won’t cut it if Houston’s and Hillstone remain under common control or ownership and serve the same menu items. Here’s a criteria of the definition that will be an issue for Houston’s if they are ever challenged as being in violation of this regulation and its found that Hillstone offers ”substantially the same menu items” as Houston’s restaurants around the nation: “a group of 15 or more food service establishments doing business nationally…that operate under common ownership or control, or as franchised outlets of a parent business, or do business under the same name.” They were apparently advised the obvious, change the name. Now, there are only 2 Hillstone Manhattan’s. However, the overbroad definition uses ‘or’s’, not ‘and’s’ so they still have to worry about operating under the same ownership. Not sure how they would demonstrate this one. Clearly, by looking at the website, Houston’s, Hillstone and the other restaurants in the Houston’s restaurant group are operating under common ownership or control. Even if they set up a separate entity for the Hillstone restaurants, they would be hard-pressed to show that they are not under the same ‘control’ as the other restaurants in the Houston’s restaurant group. What’s funny (and sad) is that they didn’t really have to change the name to avoid being a ‘covered’ restaurant under the regulation…so long as they change the menu items at Hillstone so they are not substantially the same as at Houston’s…but then it’s not really Houston’s, right? So it appears that the only reason they changed the name was so as to avoid confusion among customers who dine at Houston’s restaurants across the nation only to find different menu concepts and items at different places, i.e. more about brand identity and marketing than legal.
Bottom line: I’ll be upset if Houston’s/Hillstone in Manhattan replaces the staples from its menu that I’ve grown to love. Based on my read of the regulation, if they don’t substantially change the menu items then they will be potentially vulnerable to being in violation of this regulation.
On a different note, another astute Eater commenter, Seyo, wrote: “[Hillstone] Sounds like a ripoff of Blue Hill at the Stone Barns.”
Can’t say I disagree, either. I commented back that: “Industry folk is dead on…great call. that’s exactly it. can you imagine how many calories are in that spinach and artichoke dip. Seyo is dead-on, too. Total rip of Blue Hill at Stone Barns…they even put a pic of a cow on the Hillstone web site that looks eerily similar to Blue Hill Stone Barn’s cow logo. Unreal. I love Houston’s. Better not take away the hickory burger, french dip or ribs…i don’t give a damn what season it is.”
We’ll have to stay tuned to see how this situation unfolds.
The information in this post is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice.
interesting info…not sure if you’ve seen this, but came across site with nutritional info on houston’s grilled chicken salad and boy does it seem unhealthy — per serving = 34 g fat, 47 g carbs, 508 calories:
http://www.thedailyplate.com/nutrition-calories/food/generic/grilled-chicken-salad-from-houstons_35359
OK, so here’s the scoop from an employee. Our owner and founder, George Biel, started his concept with his first Houston’s restaurant in Tennessee over 30 years ago, and has since spread to bustling areas around the country. Houston’s is not his only restaurant. Others include Bandera Grill, Cherry Creek Grill, Rutherford Grill, Cafe R&D, and others. Please visit http://www.hillstone.com to see all our locations and menus. While our family of restaurants operate under the same code of ethics with regards to service and food preparation (utilizing local purveyors, offering great value for freshly in-house made food, choosing small-production wines for sale at far below industry standard mark-ups, etc), the reason for the different names is to reflect our collective family of restaurants. Hillstone is not something coined to mirror another company or brand. Rather, it is the name of George’s vineyard, and at the Lexington and 53rd location, we offer Hillstone wine among our by-the-bottle choices.
Changing the name on the menu and what we’re calling ourselves at our two Manhattan locations allows us to introduce some menu options that may not be traditional Houston’s fare but can include some favorites from our other locations. For example, at my location, the Sashimi Tuna Salad we prepare differs from the recipe utilized at other near-by Houston’s, but is the same as is offered on the west coast. We also have a wonderful Corned Beef sandwich, we maintain several in-season vegetables daily and list them on the menu, and we prepare some of our steaks differently from other locations (broiled as opposed to grilled). By calling ourselves Hillstone, we are able to offer great selections from beyond just the Houston’s “catalog” of recipes, and as such, label our location with the same name as that which we ascribe to our collective family of restaurants. I think it’s a great way for guests to wonder “what is Hillstone?” and possibly introduce them to the rest of our restaurant family by bringing them to our website.
Additionally, we are frequented by a number of tourists who have come to see NYC. Some don’t have a Houston’s near their home towns, but may be located near a Bandera Grill, or Cafe R&D, etc. Since Hillstone is the name of our family of restaurants, we are saying to them “come on in — you’ll get the same great service and quality of food.”
On every paycheck, I and all other employees of Houston’s, Bandera, Rutherford, etc. see Hillstone, and have for several years. And as for the regulation on calorie posting, while our menu items are prepared according to standard recipes, ultimately the final products are graded on taste, and are often modified slightly to compensate for variations in fresh ingredients (”Hey, we need to add a little more lime juice to our Honey Lime Vinaigrette” for example). There is no central Houston’s (or Hillstone) factory where our food is prepared and shipped out, unlike most fast-food chains.
We have been hearing about feedback on the web about calling our NYC stores Hillstone, and to be honest, it’s very exciting. We love to hear and know that our guests are so passionate about what we provide. Our business is hospitality, and we value everyone who chooses to dine in one of our restaurants. Ultimately, our goal is to continue providing great food at a great value with efficient service. Why would we want to upset our loyal fans? Hillstone is not a “rebranding.” We are merely highlighting the collective unity of all of George Biel’s restaurants, and continuing his dream.
This is a privately held company with sinister business practices. I was employed at the Midtown East location two years ago. During a routine pre-shift our GM specifically informed us of the company’s intent to avoid complying with this law in an effort to sustain profits and not lose their “boutique” image. Apparently, Hillstone’s image and profits are of more concern than the health of its clientele. Speak to former employees. Don’t listen to this brainwashed employee, who undoubtedly is from their corporate office. Find former employees and you will find much worse accusations the company has been able to stifle. Someone should ask why certain menu items from one California location were removed overnight…Apple Martinis, Flying Chicken Platter, Ribs, and Hennessey? Its nice to see this company is getting what it deserves. I have a feeling this is only the beginning.