Grandma's a Duluth icon for more than 35 years

Grandma's Restaurant is one of the longest-enduring locally owned restaurants in Duluth. For 36 years, the eatery has been serving patrons its famous wild rice soup -- and puzzling guests with the legend of Grandma Rosa Brochi.

Brian Daugherty, who worked his way up from dishwasher to company president, has been with the company since the day the restaurant opened.

Daugherty never thought he would become the president of the corporation.

"I wanted to write screenplays and make films in California, but I had such a good time that (first) summer that I stuck around," he said.

He eventually saw the increasing popularity of the restaurant and wanted to ensure that trend continued. That initiative was "mistaken for leadership," he joked.

Daugherty believes the company has remained successful for so many years by maintaining a balance between "new, interesting items" while "protecting the staples" and catering to customers' desires.

Location has not hurt business either. Grandma's is surrounded by 500 hotel rooms, and 60 percent of business occurs during the tourist season. Mick Paulucci and Andy Borg, the founders of the establishment, knew the area would one day become an attractive development and invested accordingly.

Paulucci and Borg were two 20-somethings who, as rumor has it, thought that opening a restaurant would help them meet girls.

"Mick knew good food inside and out, and Andy was an antique collector," Daugherty said.

Grandma's has renovated the Canal Park building 14 different times. Daugherty said the company would never consider tearing it down to rebuild from scratch.

"It is part of the story; it would be the wrong thing to do," he said. "We try to keep it as intact as humanly possible."

Before Grandma's moved in, the building was a restaurant called the Sand Bar. When Paulucci purchased the building, it housed a café and the local communist press.

During renovation of the building, as the legend goes, workers noticed the strange architectural features of the building.

"The upstairs was filled with 12 to 18 small rooms and an alarm system with lights," Daugherty said. He was hesitant to confirm or deny the authenticity of the legend of Grandma Rosa Brochi, but, given the seedy history of the Canal Park area, it is possible. "I love the fact that this is a burning question on everyone's mind who comes through the restaurant. People who don't know of Grandma can tell [by her photo that] her reputation has preceded her."

The staff does not want to be "too revealing" about the legend. It draws in visitors and adds a certain curiosity to the restaurant.

"Much has been assumed from evidence from the previous businesses," hinted Daugherty. He had heard "rumors of the bordello, but not of the madam."

On opening day, the restaurant was flooded with visitors who came to Canal Park to view tall ships entering the port.

Daugherty remembers: "We ran out of everything. It was totally crazy. I've never been caught off-guard by tall ships since."

Daugherty recalls that Paulucci used to dress in a Western costume with a leather vest, while Borg wore a vintage tuxedo, and employees wore flannel shirts and jeans.

When the restaurant first opened, waiters and waitresses served soups and 3-foot-long sandwiches. The restaurant offered eight types of soup each day.

"We quickly became known for our soups," mentions Daugherty.

Daugherty still has a copy of the first menu. A burger was $1.85, "The Godfather" cost $1.85 as well, and beer was a dime.

A few years into business, the local running club approached the owners. The club hoped Grandma's would sponsor a race.

Grandma's accepted, and Grandma's Marathon was born.

Approximately 140 runners entered the first competition. Grandma's was surprised the marathon became so popular.

The success of Grandma's restaurants encouraged the company to open more locations in different cities. The company also expanded to other states, but encountered cultural differences that made success next to impossible.

"In the South, people didn't get wild rice," Daugherty said. "They thought it was 'swamp grass' and 'weird.'"

Eventually, the company closed the restaurants there and turned its attention elsewhere.

Three years ago, it introduced a frozen soup line, which now sells in 12 states, 500 grocery stores and a few universities. Perfection of a single soup flavor took more than two years to complete, but the time was apparently well spent: The first store to stock the soups discovered a 250 percent increase in frozen food sales.

Right now the company is focusing on current operations.

"[We've had] a tough economy for the last two-and-a-half years," Daugherty said. "We want to take our existing operations and make them as good as they can be."

Looking ahead a little bit, Grandma's is considering expanding its frozen food line. The company hopes to grow sales at the national level and introduce entrees to the line.

It also plans to revamp the Carnival Thrillz building and create a family fun center.

Budgeteer contributor Beth Koralia can be reached via budgeteer@duluthbudgeteer.com .