Owner Sees Gold in His Chain of Silver Diners : Food: Robert Giaimo thinks Americans are hungry for something between fast food and more formal eateries and hopes to expand into the family restaurant chain of the ‘90s.

What Pizza Hut did for that Italian favorite, Robert Giaimo hopes to do with the most American of dishes--diner food.

Picking up on a trend of retro diners springing up nationwide, Giaimo has built four Silver Diners he hopes to expand into the family restaurant chain of the ‘90s.

“I don’t see why there can’t be as many Silver Diners as there are Denny’s or maybe McDonald’s,” said Giaimo, 41. “Denny’s did a great job in their day, so did Bob’s Big Boy, but they’re tired.”

The Silver Diner offers a menu of meatloaf, hash, hamburgers and other standard fare served in a frenetic ‘50s atmosphere where the sounds of the grill bump up against oldies from refurbished 1940s jukeboxes.

The no-nonsense food, friendly service and shiny stainless steel have been brought back, while the greasy atmosphere and tractor trailers in the parking lot have been left out. Meal prices average $4 for breakfast, $6 for lunch and $8 for dinner.

“We’re revolutionizing, reinventing what a family restaurant is, in that we’re calling it a family restaurant only in the sense that it has reasonable prices,” said Giaimo, who lives with wife, Kate, and two young children in McLean, Va.

The theme fits Giaimo’s personality, a friendly but driven New York native. He views himself more as a problem solver, claiming all successful businessmen find a problem and solve it. In this case, he says, Americans are hungry for something between fast food and more formal restaurants.

“This is a wide open area that used to be dominated by family restaurants,” Giaimo said. “What’s the problem? As people become more sophisticated, the family restaurant doesn’t have any of this. The decor is boring, the food is bland, the service pedestrian.

“They’ve left the market wide open.”

Terry Bivens, an industry analyst with Argus Research Corp. in New York, said the weak economy is making things tough for new restaurants, although many niche restaurants are bucking the trend.

“The Olive Garden run by General Mills has done well with pasta and Italian food,” he said.

Giaimo noted that diners usually fare well in tough economic times. In fact, the concept took off in the Depression-era 1930s, when more diners were built than in any other period. Their varied menus, 24-hour schedule and relaxed atmosphere appeal to many segments of the population, Giaimo said.

Giaimo’s understanding of the restaurant business dates back to 1974, when he opened the American Cafe restaurant after graduating from Georgetown University. He built a chain of seven American Cafes, with annual sales reaching $20 million, and sold it to W.R. Grace & Co. in 1986.

After he sold the chain he began researching diners. He visited dozens of them nationwide, along with Dutch-born partner Ype Hengst, the former executive chef at the American Cafe, and restaurant designer Charles Mount. Richard Gutman, who wrote a book on diners, also joined them at times.

They spent weeks in one refurbished art deco rail car diner in Philadelphia, which was serving 17,000 meals a week and pulling in $4.5 million a year in sales.

“We had some of the worst meals I’ve ever eaten, but met some great people. Some of the most wonderful people are part of the diner world,” Mount said. “That really is the basis. It’s not a nostalgia trip, it’s a new way of looking at diners.

“I didn’t want to design a diner full of kitsch when the architecture and the food are the most memorable parts of it.”

Giaimo began opening up Silver Diners over the past few years after lining up $2.4 million in seed money with a limited partnership of 50 investors, including former Washington Redskins running back John Riggins, and another $2.5 million in loans.

So far, his gamble appears to be paying off. Two of the four Silver Diners in the Baltimore-Washington area are expected to generate more than $3 million, while the other two should take in more than $4 million this year, Giaimo said.

“Those are very significant numbers,” said David Leibowitz, an analyst for American Securities Corp. in New York. “That’s a heck of a number and he’s to be commended to put it mildly. First, for attaining that, and second if he can maintain it.”

Bivens, of Argus Research, said Giaimo’s sales figures were well above the average McDonald’s restaurant, which he says pulls in around $1.5 million a year.

Giaimo says he wants to expand slowly at first, growing to 10 restaurants by 1995. Eventually, he’d like to find experienced restaurant operators and open multiple units.

“I’d like to see a Silver Diner on the corner of every Main Street in America,” he said.