Doug Cavanaugh had just returned to his native Southern California after successfully restoring and running a restaurant on Nantucket Island off Cape Cod. One evening he was brainstorming about business opportunities with his father, and remembered that he had seen a dilapidated building at the end of Balboa Pier while jogging along the beach. “Although the building is in pretty bad shape now, its
architecture really lends itself well to that of a 1940’s diner. I wonder if I could get the place from the city and turn it into a diner that would bring back the fun and nostalgia of that era?” he said. To enlist help for the project, Cavanaugh invited some old high school buddies over for dinner and asked if they would be willing to throw in some money and work with him on the diner. Everyone thought he was crazy except Ralph Kosmides, a friend from junior high who was working as an engineer building race cars for Toyota. He was as excited about the idea as was Cavanaugh! Together they sold the city of Newport Beach on the concept and obtained a long-term lease on the building that had once been a bait shop. While deciding on the exact style of restaurant they would build, the pair began extensive research on American diners. Their research confirmed Cavanaugh’s initial idea about creating a 1940’s diner concept because, “that’s when balboa had its heyday!” says Cavanaugh. To make the restaurant feel authentic, Cavanaugh and Kosmides combed antique and memorabilia stores throughout Southern California to find 1940’s artifacts, and did most of the remodeling of the building themselves. Nearly a full year and $80,000 later, Ruby’s diner opened on December 7th, 1982 with three employees and a simple, straight-forward diner menu of hamburgers, hot dogs and malts. Much to her surprise, the tiny 45-seat restaurant was named after Cavanaugh’s mother, Ruby. Cavanaugh and Kosmides were nervous on opening day, but were encouraged when they saw people walk around the pier, look into the diner, and smile. “It was as if they were remembering a simpler, happier time, “ says Kosmides. On that first day, sales were a whopping $63! Within weeks the restaurant’s popularity took off and there were consistently long lines to get into Ruby’s. First year revenues were projected to be $ 125,000. Receipts actually reached $ 600,000. In the second year, sales exceeded $ 1 million. With this success in hand, Cavanaugh and Kosmides realized that they had tapped into something that appealed to a wide range of people of all ages. A year later, they opened a 70-seat Ruby’s in the Orange County residential community of Mission Viejo. In the next four years, three more Ruby’s Diners were opened on the Seal Beach Pier, in South coast Plaza’s Crystal Court and in the Fullerton Metro center. With each new Ruby’s, the decor, restaurant size and menu evolved. Now with five restaurants, Cavanaugh and Kosmides refined the concept and operational procedures to set the stage for more aggressive expansion. In the 1990’s, The Ruby Restaurant Group opened 27 Ruby’s Diners in Southern California, Pennsylvania, Nevada, New Jersey and Missouri. While the basic decor (bright red vinyl booths with white Formica tables, soda fountains and colorful 1940’s poster art) and menu remained the same, creative touches were added to many of the Ruby’s Diners by developing modified themes to fit the local area. For example, the Ruby’s AeroDiner in Laguna Hills (located near the former El Toro Marine Air Base) features a collection of miniature World War II aircraft that actually “fly” through the restaurant on a track. The Huntington Beach pier location has a “Surf City” theme complete with surfboards and other authentic surfing memorabilia. Ruby’s Super Chief Diner, a mere walking distance from the famous San Juan Capistrano train station, has scale model trains running through the restaurant. During the Company’s growth, Ruby’s Management focused heavily on maintaining high food and service standards while consistently updating the menu to appeal to their growing customer base. Today the menu offers a large variety of breakfast favorites, “Veggie Delights”, a 40% “lighter” in fat “Lite Fries,” salads, sandwiches, lunch and dinner specials, and fountain treats. As Cavanaugh is proud to say, “The fun atmosphere inspires people to come to Ruby’s for the first time, but our high quality food, friendly service and reasonable prices keep them coming back.”
Another reason for Ruby’s prosperity is the Company’s progressive management style and the high caliber employees that they attract. Practically all aspects of the restaurant’s operations are handled in-house, including the recruitment and training of management and hourly employees, product development, repair and maintenance, and accounting functions. Cavanaugh and Kosmides take an active role in the operation of each restaurant and there are ongoing quality inspections and interviews with staff members at each of the Ruby’s locations. All managers hired by the Ruby Restaurant Group are thoroughly trained by completing the “Ruby’s Management Training Program”. In this program, managers are taught the duties of each position in the restaurant and learn the stringent quality standards required in the operations of a Ruby’s Diner. “People seem to really enjoy being a part of the Ruby’s team,” says Cavanaugh. “certainly a big part of our success is that our employees like to work at Ruby’s. We are lucky to have such a great team!”
With even stronger growth planned for the future, the Irvine-based Ruby Restaurant Group has begun an aggressive program to attract franchisees in other areas of the country. Regardless of the number of restaurants Ruby’s opens, however, the Company is committed to never lose sight of what Cavanaugh and Kosmides consider the “basics”. “We are committed to exceeding our guests’ expectations of us. This means that we must always provide great food and spectacular service in a sparkling clean restaurant,” states Cavanaugh. “As our motto says, ‘Only the best for our guest!’”
