To Each His Own : Avilas Share Name, Not Ownership, of Family Restaurants
Salvador Avila wanted to make a place for his children in the family restaurant business. But he didn’t want partners.
So when the time came in the early 1970s to expand his El Ranchito Restaurant in Huntington Park to new locations in Orange and Los Angeles counties, Avila helped his grown children start their own eateries, based on his concept.
He lent his heirs the El Ranchito name, seed money and a menu of carnitas, enchiladas and chicken soup. It was up to the children to determine their own success or failure.
Today, there are six El Ranchito restaurants in Newport Beach, Corona del Mar, Costa Mesa, Santa Ana, Long Beach and the original in Huntington Park. That was the one that Avila, now 73, started 30 years ago this month with a $2,000 loan co-signed by his uncle.
Three of Avila’s five children--Victor, 47; Sergio, 45; and Maria Elena, 43--own one or more restaurants. They cooperate, but don’t share profits.
“My father set it up that way,” Maria Elena said. “He wanted to develop an entrepreneurial spirit in us.”
The Avilas’ arrangement is unusual. In most operations connected by genes and marriage, one relative--the oldest or strongest personality, for example--takes the helm and the family rides the successes and setbacks together.
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With the Avilas, there is little shared pain since each El Ranchito is a separate corporation.
“It’s unusual but not unheard of, the idea of dividing up the family business separately to meet the various needs of the family,” said David E. Gumpert, president of NetMarquee Online Services Inc., a Needham, Mass., research center that collects data on family businesses. “I have heard it suggested as an anecdote to conflict in family businesses.
“If the brothers are fighting, why not look at spinning different parts of the business off and give one division or product line to one sibling and one to another?”
Owners’ commitment to keeping their business in the family has declined in recent years, according to a 1994 telephone survey by Massachusetts Mutual Life Insurance Co. Of those surveyed, 57% said they want their relatives to inherit their business, figures that reflect an 8% drop from the previous year.
But the Avila family’s use of autonomy seems to stave off sibling rivalry, which can hinder successful next-generation ownership.
“By keeping it that way, we can still have peace in the house and still talk to each other,” Victor said. “We don’t have partnership problems.”
The siblings credit their father with teaching them about the restaurant business. “But it was my brothers,” Maria Elena said, “who took it to a new level.”
Though the restaurants are separate, the siblings cooperate to buy in bulk, develop menus and arrange insurance.
“Each one of us kids has a strength, and we work together,” Sergio said.
Roles are well-defined.
Maria Elena develops new dishes based on her mother’s recipes. The mission in her Costa Mesa test kitchen is to balance traditional Mexican food with increasingly popular lighter fare. She also runs a catering business.
Victor handles finance. Self-taught, he specializes in banking, accountancy, insurance and real estate dealings.
Sergio, who once dreamed of being an architect, oversees construction and remodeling, permits and liquor licenses, and is the designee who faces planning commissioners and other City Hall gatekeepers.
Then there’s the family patriarch Salvador, a classic car buff and septuagenarian marathoner. Employee relations is his bag. Though sometimes forgotten in business as crucial qualities, Salvador is revered for his charm, heart and loyalty, and employee turnover is rare in all of the eateries.
“My father has always taught us to treat our employees well,” Maria Elena said. “Like the dishwasher, you treat him with dignity and respect. Without him, you cannot succeed.”
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The family is a postcard of immigrant success. Salvador, wife Margarita, 71, and six children came to Los Angeles--on separate trips--from Mexico in the 1958. Salvador supported the family as a mold maker until he hurt his back in the 1960s.
Recovering but unable to perform factory labor, the father borrowed money to open El Ranchito in a brick building on Santa Fe Avenue in Huntington Park, a Southeast Los Angeles enclave that was changing from a Caucasian to a Latino neighborhood.
El Ranchito made only $13 on its first day, but it was a beginning.
“It was great to see the sales go up,” Salvador said. “Every day it went up $5 or $10. It’s always been that way, continually upward sales.”
As the Latinos in the area grew in numbers, so did sales.
The Avilas eventually left Los Angeles for Orange County. The three siblings involved with the chain and another sister now live near each other in Corona del Mar’s posh Spyglass Hill neighborhood. A fifth brother resides in San Clemente.
The parent’s home, with a view of the Newport Harbor and Catalina Island, is company headquarters. Appropriately, the kitchen, with a carved mesquite table shipped from Mexico, doubles as the boardroom.
At a recent breakfast meeting, the family explained the challenges of surviving in a fickle market.
Though food and beverage offerings are similar at each restaurant, what works at Sergio’s location along the Balboa Peninsula may not jive at Maria Elena’s place on the west side of Costa Mesa. So the Avilas follow this maxim: Cater to the locals.
“My mom’s recipes are the foundation of the restaurants, but each restaurant has the independence to cater to their own communities,” Maria Elena said.
Catering to mostly Latinos, tradition guides the Huntington Park menu, which offers barbecued goat meat, beef tongue in tortilla sauce and other Mexican specialties that are unavailable at the other five locations.
Sergio must pay close attention to the ever-changing tastes along the youthful and tourist-heavy Balboa Peninsula in Newport Beach.
At his second restaurant in nearby Corona del Mar, frequented by the family set, the pace is faster.
“The people here are in a hurry,” Sergio said. “They have kids, and Mom and Dad are working. They don’t have a lot of time to eat.”
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Not every business venture in the Avila family history has sizzled.
Despite their relatively strong name recognition in Orange County, El Ranchitos in Laguna Hills and Huntington Beach and other locations have failed.
The code against joint ventures also has been broken, although only temporarily.
In 1972, Sergio and Victor pooled $11,000 to open the Long Beach restaurant. But after three years, the brothers, who surf and hunt together, decided to end the partnership. Victor kept the place in Long Beach when Sergio headed south in 1975 to open the Newport Beach location.
The brothers admit they made some mistakes, but the business survived.
“The fact that the restaurants were small in the beginning, the mistakes were small,” Victor said. “We could afford to lose $100 but not $10,000.”
And not everyone in the family is involved in the restaurant chain. Daughter Margarita Avila, who goes by Margie, became the first in her family to attend college and then graduate school. She is a practicing psychotherapist in Newport, who never wanted her own restaurant.
Brother Sal, 49, ran the restaurant that didn’t make it in Laguna Hills and currently is taking a break from business, family members said. He also helps his father in Huntington Park.
There also is one family tragedy too painful for the relatives to recount. In 1987, brother Joe Avila was found shot to death in his car. The slaying was never solved.
“The only thing that gives the family comfort is that Joe was a born-again Christian,” Maria Elena said. “The truth is that life is here and gone tomorrow and Joe has eternal life.”
Individual ownership also gives the Avilas free time. As a single mother, Maria Elena raised a daughter, Lisa, now 26, who is in her third year of law school at Loyola Marymount University in Westchester. Both Victor and Sergio are married with children 5 to 18 years old.
“We’re not obsessed to the point where we’ve abandoned life,” Victor said of the chain.
Said Maria Elena: “Whenever there’s been difficult times, the family unity has kept us together.’
