Family restaurant group keeps fingers in many pies to grow over two generations

Open this photo in gallery:Graham Hnatiw seated in Toronto’s The Old Spaghetti Factory, where he and his brother Dan, right, cut their teeth in the restaurant industry before developing other concepts for the Esplanade Restaurants company that their father Peter founded in the 1970s.Thomas BollmannShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountIn the 1970s, empty warehouses and surface parking lots dotted The Esplanade roadway on what was then the edge of downtown Toronto. Railway and harbour activity had left the once-bustling industrial corridor for more modern shipping and transit infrastructure. That suited the Old Spaghetti Factory restaurant chain just fine. The B.C.-based company snapped up a site on the largely abandoned street for $1 a square foot – a deal the landlord, eager to fill the space, was happy to make.It was there, in 1973, that Peter Hnatiw arrived as general manager of Toronto’s Old Spaghetti Factory, which had opened two years earlier, having already proved himself at the Winnipeg and Edmonton locations. Peter bought the chain five years later when the founders decided to sell; he saw the potential, having run their restaurant operations across the country. Within two years of his purchase, he added three new concepts to the Toronto strip – formalizing the portfolio under the name Esplanade Restaurants, for the road on which the eateries operated.Not every venture lasted. Brandy’s was a fixture on the Toronto social scene through the 1980s but eventually fell out of favour. The Organ Grinder, a theatrical pizza restaurant with a functioning organ, closed in 1996 when negotiations with the landlord broke down. Peter even sold the Spaghetti Factory chain in the 1990s but retained ownership of the Toronto location. In Peter’s view, closing a restaurant is not the risk. Running one into the ground is.His sons Graham, 43, and Dan, 39, now run the business as CEO and chief operating officer, respectively, and they are still building. Esplanade Restaurants employs roughly 250 staff and spans more than 40,000 square feet, all on the same street that today is packed with condo towers and eateries. In addition to the Spaghetti Factory, the company operates four more concepts: the Scotland Yard pub, live music venue Bar Cathedral, upscale newcomer Eloise and cocktail lounge Bar Cart. Two more on the same block are coming: a country bar opens this June, followed by a cafe and bakery.The ability to read the room – and act on it – has become increasingly important as the hospitality landscape shifts. A recent Angus Reid survey found that 74 per cent of Canadians have reduced discretionary spending, with dining out a top area of cutback at 56 per cent of respondents. The Hnatiws have adjusted by diversifying into other niches while remaining in the consumables space. Chris Elliott, chief economist and vice-president of research at industry association Restaurants Canada, says it’s a strategy more established operators are increasingly turning to. “By branching into varied concepts, these restaurant companies are able to diversify across price points and industry segmentation to expand their overall market share,” Mr. Elliott says. Open this photo in gallery:The Hnatiws in fine-dining newcomer Eloise, which Graham explains was designed as a departure from the “mass-market red sauce” vibe of The Old Spaghetti Factory.Thomas BollmannConcentrating the Hnatiws’ portfolio on a single street gives…

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