My pick for Best Turnaround Story

If Kona Grill’s past year had been recorded in 3-D, people would be bailing out of “Avatar” to catch the more engrossing tale.

The story could’ve been lifted from a Hollywood western: A frontier boss decides he’s going to make his own rules, public be damned. In this case, that includes selling a million shares of stock to his father at a sweetheart price to raise working capital after cutting the staff. Meanwhile, the easterners on Wall Street worry about how this range lord is running the ranch they’ve staked. Shots are exchanged, albeit verbally, when they ask for an accounting during a routine phone chat with management. You could almost hear the derringers being cocked.

Enter our hero, his white hat almost glistening. Marc Buehler, best known as the marketing sure-shot who deftly used his spurs at Applebee’s, is brought in as the new honcho to fix the muck-up that the 24-unit chain had become.

He starts assembling a posse to run off the fusion concept’s problems. Because bar business is essential to Kona, Buehler recruits Rachel Phillips-Luther, a former hand at the Chammps and Fox & Hounds sports-bar chains, to serve as vice president of marketing and brand innovation.

The appointment came after one of the last key figures from the last regime, an operations specialist, had been sent galloping into the sunset.

If you want to go get a refill on the popcorn, I’ll wait.

Yesterday, Buehler showed what kind of firepower he intends to put behind Kona, a concept old enough to need some updating. This time his lariat fell on Larry Ryback, president and chief operating officer of Dean Vlahos’ Redstone American Grill, one of the most popular and admired concepts at the high end of casual dining. Ryback is serving Kona, characterized by Buehler as “polished casual,” as senior vice president of operations.

Now comes the hard work of proving the viability of Kona, a decidedly quirky fusion concept. Its signatures include a sushi bar, a 2,000-gallon aquarium, a hopping bar, a menu that stretches from pizza to noodle dishes, and 40 made-from-scratch sauces. “We have a saucier in every restaurant,” Buehler recently boasted to investors.

Buehler has suggested that those idiosyncrasies will serve Kona well by differentiating the brand from other casual concepts, or what he calls “a sea of sameness” featuring “a lot of brown food on plates.”

Yet he also notes that Kona is popular with consumers aged 21 to 35, hardly the older, more affluent customers sought by other upscale concepts like Seasons 52. Checks average $24, and units are typically running “north of $4 million” in annual sales, says Buehler.

With only 24 restaurants, the chain also lacks the marketing wherewithal of competitors. Those stores are also scatter-gunned across 15 states, so even pocket marketing is a challenge.

Instead, Buehler says he’ll rely on social media and word-of-mouth. His revised team is in the process of forming a new loyalty marketing program, a club for “Konavores.”

He also plans to blaze new opportunities for Kona in catering, delivery and takeout, while opening only one restaurant in 2010.

The job has to be a daunting one. But the dramas leading into it have made this one of my favorite turnaround efforts to watch.

After all, would the Na’vi dare to combine sushi with calamari, meatloaf and a swimming-pool sized aquarium?

A situation to watch, Part II

Kona Grill: Hail the brave newcomer
Not so long ago, fans of professional wrestling could get their oohs and aahs from the conference calls of Kona, a small casual dining chain known for its sushi. You couldn't stage the sort of hostility that crackled between investors and management.

Here’s a snippet that’ll probably make it to the Kona Grill: Grill This boxed set, which the home office should consider marketing as a gift option this season. It starts with the preamble to a question that portfolio manager Thomas Lynch really, really wanted Kona CEO Marcus Jundt to answer, and goes downhill from there:

Marcus, I’ve noticed on previous calls and on this call that you’ve been a little bit reticent about answering questions. So as I go forward, I’d like to give you the opportunity to show shareholders that you’re accountable and you really know how to operate this business… What changes are you going to make? Who is personally accountable? And specifically in management, what changes will you make?...Can you address that?

Jundt, it immediately became apparent, was no Dale Carnegie disciple. “I’ll address the question in the manner in which I want to address it,” he shot back.

Lynch followed with questions about an agreement to sell a big chunk of stock to Jundt’s father at a price of just $1.19 per share.

Other investors joined in with questions about high turnover on Kona’s board, and what criteria was used to find directors.

The April call clearly did not go well for Jundt and his fellow execs.In the background, you can almost hear a mob forming, anoose in hand.

Stunningly, Jundt resigned a few months later, followed by his interim replacement several months after that.

And who’s ridden into the chain to revive its fortunes? One of the sector’s whitest hats, Mark Buehler. He was a standout marketer at Applebee’s, and was later hired to clean up Tony Roma’s and Lone Star. He’s earned his spurs and six-shooter.

Now he’ll be polishing up the badge and striving to right Kona as the new CEO and president.

There's no confirmation that shareholders bypassed a headhunter and actually summoned Buehler with the Bat Signal. But I’m betting Liam Neeson plays him in the movie.