The Reef in Newport was acquired in 2024. | Photo courtesy of Heritage Restaurant Group
For decades, Nick Schorsch Sr. was primarily a real estate guy. He never really wanted to own the restaurants, or other businesses, that operated in the properties he invested in.
Now, however, Schorsch over the past decade finds himself one of the largest owners of independent restaurants in Rhode Island, focusing primarily on Newport, which he now calls home.
Under Heritage Restaurant Group, Schorsch and a partner have acquired about 15 brick-and-mortar restaurants (so far), all within the last nine years, as well as a number of food truck concepts, seafood distributors, hotels, a catering operation and a beach concessions business.
And they plan to buy more. Many of the acquisitions are iconic businesses with decades of history, like the waterfront fried seafood joint Flo’s Clam Shack, the Brick Alley Pub (known for its lobster roll), and the Red Parrot, housed in a historic building that dates back to 1898.
Flo’s Clam Shack on the waterfront is now part of Heritage Restaurant Group. | Photo courtesy of Heritage Restaurant Group.
This month, the group announced the acquisition of Mews Tavern, founded in 1947 in Wakefield, known for wood-fired pizzas and 69 beers on tap. Last month, it was Jo’s American Bistro. In December, the group agreed to buy The Quencher on the Newport waterfront.
“These are unique,” said Schorsch. Some have more than 100 years of history and are places where families have gathered on birthdays, holidays and graduations for decades.
Many were owned by families that were ready to exit or retire, but had no succession plan. And often the sellers stay on to continue operating the business.
Others were an investment, and Schorsch sees opportunity for growth.
Fundamentally, however, the goal is preservation. Schorsch contends that by buying these restaurants, along with their real estate, he can save them.
Too often, he said, he’s seen landlords raise their rents, leaving the businesses struggling to keep up, he said.
“We look at it the opposite way,” said Schorsch. “We want the business, because the business is ultimately more profitable than the real estate.”
This from a man who was known for years as a king of real estate investment trusts, or REITs.
He describes his background as diverse, having done about $65 billion in acquisitions over the years and taken about 13 companies public. For example, he once headed American Realty Capital Properties (later called Vereit), which in 2014 acquired about 500 Red Lobster locations from then-parent Darden in a $1.5 billion sale-leaseback deal with Golden Gate Capital.
That year, however, American Realty announced a $23 million accounting error that led to a cascade of lawsuits, fraud accusations from the U.S. Securities and Exchange Commission (later settled) and other questions about transparency. Schorsch resigned but said he was never charged with wrongdoing.
“In today’s world, it would be irrelevant,” he said.
Schorsch, it seems, has moved on to a new chapter.
He said he has fallen in love with Newport, a town once known for its Gilded Age of the early 1900s, when the Manhattan elite—the Vanderbilts, the Astors and Belmonts—flocked to the waterfront to play and build opulent “cottages” along the coast.
A former New Yorker himself (though originally from Philadelphia), Schorsch said the Hamptons have gotten too busy and crowded. Many are rediscovering Newport, which Schorsch contends is entering what he calls a new Golden Age—or at least it will if he has his way.
A car collector, Schorsch founded the non-profit Audrain Auto Museum there, which plays host to various “supercar” exhibitions for lovers of Lamborghinis and Ferraris can come to hobnob at a Pebble Beach-like affair, with “watches, wine, whiskey” and, of course, cars.
That kind of clientele looks for great restaurants, like the kind found at other resort spots in the region, like, say Nantucket or Martha’s Vineyard.
In Newport, Schorsch said the food was generally just good, and “good was good enough.”
But Schorsch thought Newport could do better.
Near the Audrain was a 137-year-old restaurant called La Forge Casino Restaurant, a Newport institution that had been owned by the same family for 54 years. It became Schorsch’s first acquisition in 2017, taking on the business with no real plan to change it. Just make it better.
Since then, Heritage has acquired about 14 more restaurants in Newport and around the state. Schorsch said revenues have grown from about $2 million in 2023 to about $150 million this year, including all of the 23 or so businesses.
Along the way, Heritage has built an infrastructure to grow. The group, for example, brought in an Italian chef, Carmine Mottola, who previously led kitchens at Il Platano in Italy and worked with Nobu Hospitality, to lead the group’s culinary team.
“He’s a big, happy, wonderful jolly chef who loves to eat and loves to cook,” said Schorsch. “He has been doing great things with the menus.”
With each acquisition, Heritage has tried to keep many of the same employees and management teams. Of about 1,600 workers across the concepts, only about 50 have been lost, he said.
Heritage brings capital to the table for things like improved pay and benefits. The company has a facilities management arm, so roof leaks get repaired and toilets get unclogged without delay.
Many of these older restaurants had no back-of-house systems, but Heritage brings in a point-of-sale and other technologies that are platform wide, as well as marketing, human resources and other infrastructure support that independent restaurants often cannot afford to take on. There’s even a platform-wide loyalty program.
Schorsch emphasizes that Heritage has not acquired broken businesses.
The restaurants tend to be large, have huge sales, great teams and a loyal customer base, he said.
But many are operating with the same strategies their grandparents had, he said. COVID-19 was hard on these businesses, and they stopped growing. “They just contracted a little bit out of fear,” said Schorsch.
Still, some are being rebranded.
Heritage, for example, acquired Scales & Shells in Newport last year, which was closed and is scheduled to reopen in a few weeks as Claw & Hammer, a fine dining concept that will bring something new to the group.
There are also several growth concepts.
Wally’s Wieners and its bar The Copper Club, for example, was created initially as a food cart serving Rhode Island’s famous Saugys (hot dogs with a certain snap). Now Wally’s has three brick-and-mortar locations with a lively bar scene. The concept is known for its weiner towers, as well as espresso martini towers.
Heritage includes two locations of Olneyville New York System (named a James Beard Classic), another concept known for signature wieners, or grilled beef and pork franks served “all the way” with mustard, meat sauce, chopped onions and celery salt. It’s also famous for Rhode Island’s state drink: coffee milk (like chocolate milk, but made with coffee syrup).
Olneyville New York System has signature wieners served “all the way.” | Photo courtesy of Heritage Restaurant Group.
Flo’s Clam Shack also has two locations, and Schorsch contends the concept would work well on any beach location.
The group plans to open six to 10 restaurants each year among those and potentially other brands. Schorsch hopes to begin moving to other markets.
Heritage also includes hotels (The Vanderbilt in Newport), a catering arm, and more.
It’s all good for the town that he now loves, he said. The car shows, the restaurants, the hotels—it all brings traffic to the tchotchke shops, coffeehouses and hair salons.
Taking on so many established restaurants is a risk, he said, but it’s his risk because it’s something he believes in.
“We don’t go out and raise capital. All the money is ours,” he said. “We don’t have to answer to anybody.”
