Lee Mikles and Jim O’Donoghue, owners of Grain Craft Bar + Kitchen, are on an ambitious growth track
When Lee Mikles sold his share of The Archer Group, a Wilmington-based digital marketing firm, his sister predicted that he would either go into politics or open a bar. “A bar,” Mikles says, “seems safer these days.”
Early indications are that he made the right choice.
Most observers would agree that Grain Craft Bar + Kitchen—the downtown Newark restaurant Mikles and friend Jim O’Donoghue opened in July 2015—has been successful. What’s more, in the past few months, the partners have gone from one to three establishments.
As this magazine hits the streets, the partners should have opened Grain H2O in the former Aqua Sol at Summit North Marina in Bear and a second Grain Craft Bar + Kitchen in the old Half Moon Saloon & Restaurant in downtown Kennett Square.
That might seem risky, but growing Grain has been part of the plan from day one. “We always knew that to achieve our goals, we needed to scale up,” Mikles says.
Two restaurants in the same month, however, is a different story, particularly when you consider that the partners had never owned a restaurant before opening Grain.
Still, Mikles and O’Donoghue are no strangers to the world of business, and it is their experience combined with their ability to spot—and seize—opportunities that seems to be their recipe for success.
Growing up, neither Mikles nor O’Donoghue had any idea they would wind up in the restaurant business. Mikles, who grew up in North Wilmington, graduated from the University of Delaware with a degree in electrical engineering and an MBA. His interest in advertising started at an early age. His father was head of marketing for a division of the DuPont Co. that made golf balls. “I got to read his advertising magazines, and we never ran out of golf balls,” he says.
He and Patrick Callahan started The Archer Group in 2003 in Mikles’ basement. By the time they sold it to other partners, the firm had 60 people and counted Wawa and Chase Bank among its clients.
Dreaming of a Restaurant
O’Donoghue’s father was an accountant for Hercules, and his mother was a hospice nurse. “They wanted me to be an accountant,” he recalls. After graduating from UD with a degree in business and political science, he went into finance. He was a first vice president at MBNA, a senior vice president at Bank of America, and the director of the retail segment at Barclaycard. With MBNA, he worked in sports marketing.
The partners-to-be and their families lived across from each other for more than a decade. “We would get together and talk about our shared dreams of opening a restaurant,” Mikles says. “But one drink would lead to another, and we would move on to something else.”
They weren’t total novices. Mikles had worked in Pike Creek pizza shops as a delivery driver and pizza maker. He’d also been a restaurant manager. In high school and college, O’Donoghue worked at such restaurants as the Down Under, Bennigan’s and the Waterfront in Dewey Beach.
In 2015, the timing was right for the friends and their wives, Catie Mahoney O’Donoghue and Kathy Malone Mikles, to realize their dream. “As we continued to flesh out our vision for a restaurant, we felt increasingly confident we could be successful,” Mikles says.
A location became available on Main Street, a stretch that the partners knew well. It was the former site of Mojo Main and East End Cafe on East Main. They took the plunge.
The name Grain was inspired by Oliver Evans, who was born in Newport in the 1750s. Mikles learned about Evans when he was president of Start Up Delaware, which seeks to increase tech entrepreneurship in Delaware, and he was impressed. It’s easy to see why. Evans developed an automated flour mill that revolutionized the industry. It was just one of his inventions.
The name also refers to the restaurant’s large craft beer selection. But while it appeals to hop heads on the cutting edge, Grain is also a family-friendly place. And it’s a spot where coworkers can meet after work. In short, there’s something for everyone. “We wanted it to be a melding of good food, good drink and good times,” Mikles says. “Live music was always in the plan, but it’s continued to expand.”
As with the Newark site, timing and availability also came into play with Grain’s new locations. Aqua Sol, they maintain, was a hidden gem on the canal in Bear. “We loved the seasonal potential of the huge deck outside, and the year-round potential of the inside,” Mikles says. “We felt we could successfully bring the Grain brand to the area, with the craft drinks, good food and live music.”
They saw parallels between Half Moon’s location in Kennett Square and Grain’s Newark site. Both are in established communities with people who long to be regulars at a cool-but-casual neighborhood restaurant.
The Importance of Branding
Although the locations are different, they boast the Grain name. Certainly, Mikles, the digital marketing maven, and O’Donoghue, the savvy credit card pro, know more than a little about branding. The three restaurants share the same core menu, which gives the company greater buying power when it comes to ingredients. It also helps with cross-training and moving staff from location to location.
As the partners at Iron Hill Brewery & Restaurant can attest, having multiple restaurants is a boon for hiring, retaining and promoting. All of which is critical considering the industry is facing labor shortages in the kitchen. Grain has hired people even before certain jobs were available just so they would not lose them to another restaurant. The company also offers benefits and paid days off.
Despite the same name and core menu, the partners are keen on keeping each site’s local flavor, which is in line with their “neighborhood” philosophy. No doubt, that approach will filter into each restaurant’s approach to philanthropy.
For instance, Grain in Newark has focused on local first responders, including the employees of the police and fire departments. In the restaurant’s First Responder Wing-Eating Championship, policemen compete against firemen to benefit Preston’s Playground, an all-inclusive park that will be on a Newark site. (Organizers are seeking to raise $500,000.) Grain donates $1 for every wing consumed by the contestants or the guests, along with proceeds from T-shirt sales. In April, the police nabbed the championship for the second year in a row. This year they won by just two wings.
What does the future hold for these ambitious restaurateurs? Both Mikles and O’Donoghue admire Iron Hill for its “operational excellence,” Mikles says. The locally based chain has taken the brewpub concept to 13 locations and counting. Although all Iron Hill brands, they are in different building footprints and diverse areas, including Lancaster to Center City Philadelphia.
They also admire Rehoboth Beach-based SoDel Concepts, which has a variety of themes, such as Latin, Italian and seafood, at locations along the Delaware beaches.
“We respect them and want to follow in their footsteps,” Mikles says. “We like the idea of applying operational excellence to different concepts in a certain geographical area. We want to expand the Grain brand and other concepts.”
As the partners run between the restaurants—they call visiting all three in one day “running the gauntlet”—they have yet to consider a limit on their growth. “Right now the great team we’ve got with us is continuing to allow us to grow,” O’Donoghue notes. All options, Mikles agrees, are possible.