Copycat Restaurants: Entrepreneurship or Piracy?

From the moment a Maxwell’s waitress glides up to the table to offer a silver, scallop-shaped butterdish (with unsalted butter) and a basket of French bread, there is a sense of déjà vu. In fact the scene at Maxwell’s, across Preston Road from Valley View Mall, really is quite familiar, especially to anyone who has visited another Dallas restaurant, Houlihan’s.

The likeness of Maxwell’s, which opened several months ago, to the slightly older NorthPark East Houlihan’s, is uncanny. The decor is remarkably similar – brightly colored strips of cloth hanging overhead, a giant copper espresso machine behind the bar, and so on. Houlihan’s has taken notice, and is suing Maxwell’s for allegedly copying Houlihan’s theme and for pirating its employees. Apparently the theme is successful, because both restaurants seem to be doing drisk business.

The Houlihan’s-Maxwell’s lawsuit raises an interesting question. Can one restaurant legally copy, or closely imitate, another restaurant’s theme? Just as interesting are some of the names cropping up in the suit.

First is Danny Robinowitz, a well known Dallas real estate figure who declared personal bankruptcy 17 months ago. Robinowitz is president of Maxwell’s, which had led many of his creditors to wonder whether Robinowitz has any money invested in the restaurant. The answer probably will emerge in his bankruptcy proceedings. So far Houlihan’s lawyers haven’t been able to discover who really does own Maxwell’s, except another cor-poration named Advance American Associates Inc., sole owner of Maxwell’s stock.

The other prominent name is Norman Brinker, founder and chief executive of Steak & Ale Restaurants. Many people in real estate or restaurant circles are convinced that Brinker is a silent partner in Maxwell’s, and for a very good reason. Ten years ago Steak & Ale unsuccessfully sued a Fort Worth chain, London House, for copying the Steak & Ale theme. A district judge ruled that the only thing sacred in the restaurant business was a company’s name. So Brinker, as the gossip goes, is Finally capitalizing on what he learned in Fort Worth. They also think that a planned Steak & Ale-owned restaurant, Bennigan’s, will look remarkably like Houlihan’s. Brinker vehemently denies it all.

“I don’t know how all of this got started,” he says. “I have no interest whatsoever in Maxwell’s. Danny Robinowitz was a friend of mine and I used to eat at Maxwell’s, so thinking they might imagine that I owned it, I quit eating there,” he said. Backing up Brinker’s denial is a non-competition agreement he has with Pillsbury. which bought Steak & Ale last year. Brinker said Bennigan’s is scheduled to open next fall on Walnut Hill Lane, not far from Houlihan’s, but that it will be “no more similar to Houlihan’s than is TGI Friday’s.”

Brinker is the only one talking in the Maxwell’s story. Lawyers for both sides aren’t saying much about the case, which could drag on for months. Trial is scheduled for November. Brinker is quite willing to talk about it, emphatically saying, “I just wish you’d spike those rumors – I can’t believe this has gotten so out of hand.”