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Bread winners Featured

6:52am EDT June 28, 2002
The bread makes the sandwich, says Izzy Schachner.

It's too bad that he and fellow deli owner David Pearl couldn't slip a loaf of their famous rye in with their proposal to earn food service rights in the new Cleveland Stokes Federal Courthouse. It might have made the process easier.

But government contracts are never easy to land, and these lifelong friends and business partners had to become experts in the bureaucratic process in a matter of days. After all, what do a couple deli owners know about government contracts?

"It was a grueling process," Pearl says. "One of the hardest things we've ever done."

The duo beat out large food service conglomerates like Sodexho and AVI Food Systems Inc. to land the lucrative contract. Their restaurant, The Courthouse Café, will have access to more than 450 employees in the courthouse and at least that many attorneys, clerks and law enforcement officials who visit the courthouse daily.

Not bad for two entrepreneurs whose sole purpose was to start a business so they wouldn't have to work desk jobs.

Pearl's father, Alex, was one of the founder's of east side institution Corky & Lenny's. David grew up in the well-known restaurant, where he worked for several years. He's proud of his father's achievements, but doesn't want to succeed standing on his father's shoulders.

"Corky & Lenny's is a very strong name," he says. "In the beginning, it helped me establish my creditability and get in the door, but David's Deli has been around for seven years now. It used to be David from Corky & Lenny's, now it's David from David's Deli."

While Pearl grew up in food service, Schachner learned the trade working 60- to 70-hour weeks managing Tony Roma's chain restaurants around Cleveland.

"I started out as a fry cook," he says. "After three years, I knew every valve, every fuse, every quirk of the place. When it became that much of a routine, I knew I was ready to leave."

Meanwhile, in 1995, Pearl opened David's Deli on the first floor of the towering mirrored-glass Eaton Center on Superior Avenue. Vying for the lunchtime crowd downtown is never easy.

Not only are there dozens of lunch spots within walking distance of every office building, the Eaton Center has a cafeteria which is subsidized by the building's tenants. Despite those challenges, David's Deli flourished.

"It's true, people could get meatloaf and mashed potatoes for $2.95 in the cafeteria," Pearl says. "But people want a change. Something lighter, more healthy or just different."

"People don't mind paying more for higher quality food," Schachner adds.

Soon after Schachner left Tony Roma's in March 1998, the duo opened Izzy's Lunchbox in the McDonald Investments building. The restaurant's name is painfully accurate. What started out as a 3,000-square-foot restaurant shrunk to 500 square feet when a larger tenant in the building needed more space.

Regardless, Schachner manages to serve hundreds of diners every day in this confined space by directing the traffic flow around a large pillar in the middle of the restaurant. It's a surprisingly smooth process.

"When I panic, I tend to get creative," Schachner says. "Those 500 square feet were not all useable. We had to get down on our hands and knees and use chalk to outline all the space we would have and lay it all out."

Both delis were thriving when Schachner heard the food service contract for the new Cleveland Stokes Federal Courthouse was up for bid. Neither Pearl nor Schachner knew anything about how to land a government contract, but they believed they could convince the U.S. General Services Administration, which was in charge of awarding food service rights, that they had the experience for the job.

For a couple of men who had never written a business plan, the amount of information the GSA requested was staggering. It wanted a complete business plan, including financials for both restaurants, projections for the proposed restaurant, a letter of guarantee from a bank promising loans, referrals from previous property managers and an entire cycle of menu items including prices.

And they had less than two weeks to put it all together. With the clock ticking, they hired SS&G Financial Services to help with the proposal and the financials.

"We were really under the gun," says Adam Berebitsky, director of hospitality services for SS&G. "But David and Izzy were totally committed to this. They weren't looking at this as just another proposal. These guys are growing entrepreneurs and they showed the judges that they were serious operators."

There were eight sections to the contract approval process. If they scored less than 5 out of a possible 10 points on any part of the process, they would be eliminated.

A surprise visit to one of the restaurants was part of the assessment, and the panel of judges dropped by Izzy's just before 3 p.m., minutes before it closes.

Luckily, Izzy's brews coffee all day and served a fresh pot to the judges when they arrived. Schachner shudders to think what would've happened if he'd shut off the coffeemaker before the visit.

"They were tough," Pearl says. "You have to follow all of their directions very closely. You have to understand everything they're asking you because if everything's not exactly the way they want it, forget it."

The work wasn't done when they won the contract. Pearl and Schachner received the contract documents on Christmas Eve and were instructed to have them signed and postmarked no later than Jan. 4, leaving only the week between Christmas and New Year's to read the contracts, make changes and mail them to the GSA -- a week notorious both in the public and private sector for vacations and low productivity.

"It was almost funny," Schachner says. "But you know what? We did it. We got it back to them in time."

The Courthouse Café will be 4,300 square feet, the largest restaurant for the duo when it opens in August. The menu, which weighed heavy into the panel's decision to award the contract, will include whimsically-named items like "overruled" omelets, "sustained" salads, "plaintiff's" personal pizza and "defendant's" desserts.

"We tried to include those little extra touches," Pearl says. "(The GSA is) very specific in what they want because they want to compare apples to apples. But if you go the extra effort, like we did with our menu, it can make a difference between you and the next guy."

Likewise, the duo's financial reports included more data than the bare requirements. Berebitsky says since SS&G helps write thousands of business plans for restaurants all over the country, he approached the proposal the same way he would if he were seeking investment funding from a bank or private firm.

"With our financial projections, we weren't just throwing numbers at them," Berebitsky says. "We didn't just show 'Here's what our revenue is going to be,' but 'Here's what we think our check averages are going to be, here's how many people we think are going to eat breakfast, here's how many people are going to eat an A.M. snack, lunch, P.M. snacks.' Behind our numbers, we had a methodology." How to reach: David's Deli, (216) 696-2266; Izzy's Lunchbox, (216) 621-7700