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Red Lobster Needs to Go Local or Die

Darden's, Chili's and Maggiano's Little Italy parent company Brinker International  (EAT) reported in 2013 that the end of a spate of deals made it pessimistic about the year ahead. As Applebee's and IHOP owner DineEquity and Outback Steakhouse and Carraba's Italian owner Bloomin' Brands  (BLMN) face similar struggles, but typically blame increasing pressure from fast-casual establishments like Panera and Chipotle Mexican Grill  (CMG) even from reworked casual dining models like Buffalo Wild Wings, whose emphasis on beer, wings, sports and lots of big televisions helped it grow from 340 restaurants in 2008 to 510 last year and boosted its revenue by 6.6% in 2012 alone.,

But that's not entirely true. As my wife and I discovered during an errand in Vancouver, Wash., earlier this week, there's still a way to make casual dining work. While picking up the last remaining replacement part for my dying printer, we decided to stop for breakfast at the local chain Elmer's. There's an outlet near our home, but we usually bypass it for a diner. This particular location didn't have a lot of other options nearby and the advance word we'd received about the place was especially good for a chain.

The Vancouver outlet was an absolute gem. Divided into a main dining room and a booze-serving lounge, Elmer's had wood-paneled vaulted ceilings, mid-century lighting fixtures, blonde wooden furniture, wood balusters between the kitchen and dining room and gas fireplaces at either end. The menu is laden with Pacific Northwest references: Omlettes with cheese from Oregon's Tillamook Dairy, Snoqualmie Falls oatmeal, Ivar's chowder, Alaskan cod and the like. My wife ordered a plate-sized German Pancake -- a plate-sized portion of fried dough topped with powdered sugar, lemon juice and butter -- while I had potato pancakes stuffed with cheddar cheese and bacon and accompanied by two eggs over hard. The lemon juice came from wedges on the pancake, the eggs were not poured from a carton and the bacon at the very least resembled an actual cut of bacon. Overall, it vastly exceeded expectations.

When the bill arrived, it came in the hands of the restaurant's manager, who asked us how we enjoyed our meal and if it was our first time at an Elmer's. We had no complaints and made it clear we were not only new, but had bypassed our hometown Elmer's on several occasions. On our way out the door, he handed us an envelope with "Welcome!" handwritten across the front. Inside was a signed welcome letter, a map of the chain's other locations, a to-go menu and a $10 voucher for our next visit. Considering our bill came out to roughly $25, $10 is no small chunk of change at this chain.

It should be noted that Elmer's is a fairly small chain. Based in Portland, it has only 25 locations in the Oregon, Washington, Idaho and California -- with the overwhelming majority in its home state and only one south of the Oregon border -- in Palm Springs. It's a network of independently owned franchises and not only can take the time to extend these kind of courtesies, but has to if it intends to compete with national casual-dining chains and local competitors like the Shari's diner chain.

Stock quotes in this article: DRI, EAT, CMB, PNRA, DIN, BLMN 

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