Can a deli chain expand nationally and still keep kosher?

On a recent Wednesday during lunchtime, Ben's restaurant on West 38th Street was packed with tourists and locals devouring the eatery's traditional kosher dishes such as hot corned beef, braised brisket, beef tongue and matzo-ball soup.

But tucked away in the back of the 7,000-square-foot garment district institution were its owner and top executives, who were noshing on food that is not on the menu. A chef they were interviewing for a new restaurant was trying to impress them with meals he'd prepared in their kitchen, including grilled salmon with pickled red onion and horseradish mayonnaise.

Whether he gets the job depends, in part, on how owner Ronald Dragoon looks upon a faux pas: Listed on the chef's tasting menu was a chicken dish that called for smoked bacon and sharp Cheddar cheese.

With six eateries in the city, on Long Island and in Boca Raton, Fla., Ben's is among a handful of Jewish delis here—and the largest—that maintain kosher standards. But it is the only business among such delis—including Katz's on the Lower East Side, Second Avenue Deli's two locations and Artie's on the Upper West Side—that is drawing up plans to open scores of new restaurants.

Mr. Dragoon is even willing to consider what would have been unthinkable when he got into the business decades ago: giving up costly kosher standards to realize his expansion goals. Mr. Dragoon himself is not kosher, though he avoids pork and shellfish.

"No one is expanding in this space, and hasn't for at least 20 years," said the 65-year-old, who is hardly ready for retirement. Instead, he invested in real estate for the first time as a restaurateur to open a 215-seat Ben's with a bar in Scarsdale. The restaurant, his seventh, will open this summer. Within a year, he also plans to open a central kitchen in the city that will help him expand his chain from Boston to Washington, D.C.

"My goal is to demonstrate that one or more Ben's can survive outside of New York [and its other location in Florida]," said Ben's president, Scott Singer, a former Hebrew National executive. Mr. Singer joined Ben's in 2006 when the franchise was in financial trouble. He had to close several restaurants that were either losing money or facing rent increases.

Since slimming down, Ben's is on more solid footing, generating up to $25 million in annual sales today, according to Mr. Singer. Eventually, he plans to turn to the private-equity market to fund six or so additional Ben's outside New York and then build on that momentum to open many more in other cities.

"We are in our 50s and 60s," said Mr. Singer of Ben's management team. "There is not anyone [in the next generation] interested in operating the business, so we have to put it into a position to sell it."

In the meantime, opening the Westchester eatery and planning for the commissary is a plateful of work.

'Lifelong deli guy'

"Ronnie has been more successful where others have had difficulty because he understands the business inside and out," said David Sax, author of Save the Deli, a 2009 book about the decline of Jewish delis. "He is a lifelong deli guy."

Mr. Dragoon also has a knack for marketing. In the late 1980s, he began running television and radio commercials. Today, he is catering fundraisers in Washington, D.C., for the Democratic National Committee, though there are no Ben's in the capital.

Mr. Dragoon opened his first Ben's in 1972 in Baldwin, L.I., with his father, Ben. He struck out on his own after six months and ventured to Manhattan in 1996 when he took over the space occupied by Lou G. Siegel, an old-fashioned Jewish restaurant dating back to the 1920s.

In the early to mid-20th century, kosher eateries were abundant in the city, populating neighborhoods, like the Lower East Side, where Jewish immigrants settled. But their ranks have dwindled with the generation that brought them here, and their cuisine, once considered mainstream, is now a niche part of the culinary scene in New York and across the country.

In 2012, the 75-year-old Stage Deli closed, and some, such as Katz's, have already abandoned their kosher standards to keep costs down.

"People assumed we were kosher because we are a Jewish deli," explained Jake Dell, co-owner of Katz's, which until 15 years ago was kosher style, meaning that the meat was not kosher or supervised by a rabbinical authority. "When I see a customer wearing a yarmulke, I'll tell them that we aren't kosher. My favorite response is when they say, 'Shhhh, I know.' "

Many of Katz's customers aren't even Jewish, explained Mr. Dell. Although Katz's is "incredibly profitable," according to Mr. Sax, there are no plans to open a second location. "We've managed to stay in business this long [125 years] because we own our building," said Mr. Dell, whose family has owned the business for five generations.

Pinch of food costs

Similarly, Artie's owner is not considering a second outpost. "It's getting to be expensive to operate," said Tuvia Feldman, pointing to the labor-intensive food served at the popular spot on West 83rd Street.

Ben's feels the pinch of food costs as well, though it mitigates the added expense of maintaining kosher standards by pickling some of its corned beef, tongue and other meats—a two-week process—in the restaurants.

Many Jewish delis have seen their costs rise as meat purveyors catering to them have disappeared. There are about a half-dozen left in the country, including A to Z Kosher Meat Products Co. in Brooklyn, according to Mr. Dragoon.

To save money toward a commissary, Mr. Stringer said, some of the larger Ben's will take on more production work for the chain, such as smoking the pastrami, which none of the stores do now. "We'll do that first because that's high--volume and we pay quite a bit for outsiders to do that," he said.

But the partners are also open to becoming a nonkosher business. They pay about one-third more for most of their meat, or $3.25 a pound wholesale for brisket, compared with nonkosher brisket at about $2 a pound—and just 11% of Ben's customers adhere to a kosher diet.

"I wouldn't want to give it up," Mr. Dragoon said about keeping kosher, "but I may if the meat manufacturers continue to close."

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