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Seacrets ready to go national

In 1988, Ocean City native Leighton Moore opened a small bayside bar he called Seacrets. It was supposed to be for locals only and a secret to the hundreds of thousands of visitors to the resort town.

The secret didn’t last long.

“It was a marketing technique,” Moore said. “Most people around here can’t keep a secret, so telling them to keep it a secret was not going to happen. And, I guess it worked.”

Since that modest beginning Seacrets has expanded to the point where it refers to itself as a “vacation entertainment complex” with 18 bars, six stages, enclosed and beach dining areas, and a 28,000-square-foot nightclub.

Now Moore is looking to replicate that success in other markets. Last week he launched Seacrets Franchising to transplant his business model to other waterfront locations in the U.S. and abroad.

The business model is based on the bar’s “Jamaica USA” theme that shows up in the green, black and yellow color scheme and in the jerk chicken and frozen rum runners on the menu.

Today, Seacrets is easily one of, if not the, biggest and busiest bars in Ocean City with an estimated 800,000 customers annually and a staff that swells to 550 in the summer. The bar even has its own FM radio station, WOCM, with a broadcast booth on the grounds.

Moore said that while franchising has been a long-standing goal of his, he wanted to make sure the infrastructure was in place to handle the growth. Now, he said, the goal is to find like-minded people to open up franchises.

“It’s got to be the right fit,” Moore said. “If you don’t do it right and you get even one bad one, it can take you down. And, it’s even more so if it’s the first one.”

The wait seems to have paid off as Moore said he has already received 87 responses for prospective franchises. However, he said awarding franchises would be a long, deliberate process instead of his taking all comers who meet the financial requirements.

“My goal in five years is to have maybe five. I’d be more than happy if that was the case,” he said. “But, you can’t go too fast or you’ll overextend yourself — no matter who you are.”

The franchise rights will not come cheap. Investors can expect to pay in the range of $1.6 million to $3.06 million, including an initial franchise fee of $45,000 to get off the ground. As is common in franchise agreements, there is also a 6 percent annual royalty of gross revenues.

Following The Greene Turtle

Seacrets is not the first landmark Ocean City establishment to throw its hat in the franchising ring.

The Greene Turtle, which is 12 years older than Seacrets, has been franchising for eight years. It has 16 locations in Maryland, Washington, D.C., and Delaware.

According to Entrepreneur magazine, the sports bar/casual dining business was ranked 339th of 500 in its 2011 franchise rankings, up from 465 the previous year.

The Greene Turtle, which has 27 franchises, requires an investment of $1.1 million to $1.5 million and a franchise fee of $45,000. The company takes a 4 percent annual royalty.

Economist Anirban Basu, CEO of Sage Policy Group in Baltimore, said the investment could be worth it, given Seacrets’ record of success.

“It’s terribly competitive in that segment, but, occasionally an entrepreneur will hit a home run,” Basu said. “One suspects that Seacrets has an opportunity to be a real success because it can differentiate itself from other casual-dining experiences. On its face, Seacrets seems to do that —  it has idiosyncratic appeal combined with a widespread appeal.”

Darren Tristano, executive vice president of Technomic Inc., a restaurant consulting firm in Chicago, agreed that Seacrets had the right kind of charm and quirkiness that could stand out in a market. But he said the requirement for a waterfront location could pose a problem for some potential investors.

“I think it will be easy enough to replicate the Seacrets model,” Tristano said. “But the success factor is not a sure thing. Properties near water, whether it’s ocean or lake, are going to come with higher rent and property costs and that can make it tough for a franchisee.”

Firsthand experience

Moore is confident the experience he has gained working in the resort’s tourism trade since he was a teenager has given him the expertise to come up with a business model that can be put into effect successfully in a number of locations. Moore said he learned the business firsthand, working in his family’s hotel and then buying his own.

In one of his earliest ventures, Moore bought his own hotel, which he described as a pretty rundown establishment, but it had its own bar.

“It was a hotel with a really, really bad reputation. It was pretty ludicrous,” Moore said. “I got my lumps then for sure. I didn’t know what I was doing but I really learned.”

He also owned the Brass Rail Saloon on 48th Street, which is now home to the Princess Bayside hotel, and the Ocean Club, where the Gateway Grand Oceanfront Condominiums now sit on 49th Street.

It was after selling the Ocean Club that Moore moved forward with Seacrets, which opened with just the tiki and rock bars that are still on the grounds.

The push into franchising is just the latest expansion by Moore and his team. From its first expansion of the kitchen area in the early 1990s the footprint of the bar has grown to cover six acres and can hold 4,600 people.

While Seacrets espouses a laidback island ethos — Moore commutes to work by boat — the business has grown through well-thought-out expansions. And, with the franchising getting underway and a new hotel scheduled to open in the next year or so, Moore said he sees a sunny future for Seacrets.

“I’m not big on backwards,” he said. “Failure is not an option.”