Tren-Mos: Playing the Game

His first Russian partner was murdered. He was embroiled in tax problems. He was forced to close down his original enterprise. Yet restaurateur Jeffrey Zeiger remains optimistic that Russian-American joint ventures can survive and are worth the effort.


"It's all part of the game," said Zeiger, 28, general director of Tren-Mos Restaurants. "I don't necessarily agree with the game but if you don't like it, don't play. It's that simple."


Foreign companies rushed in to form joint ventures when they first became legal under former Soviet leader Mikhail Gorbachev in the late 80s, but over the years many Russian and foreign partners have found their business approaches incompatible. In many cases -- including the Radisson Slavjanskaya Hotel, Alphagraphics, the Rosinka housing venture and the Perestroika renovation firm -- partnerships with bright beginnings have become embroiled in well-publicized battles.


Zeiger, however, stresses the importance of a Russian presence.


"If you're going to be doing business here, you need a Russian partner," Zeiger said, "there are things that we will never understand."


Zeiger's Russian partner, the Lada company, which began as a union of Tren-Mos restaurant employees, now owns 40 percent of Tren-Mos Restaurants. Lada's current chairman, Rashiit, a lawyer who asked that his last name not be used, handles the legal aspects of the operation such as taxes, registration and leasing.


He advises those businesspeople considering joint ventures to make sure to "first of all take care of all the legal documents so that they are clear, so there will be no later conflicts."


Zeiger, a New Jersey native, arrived in Moscow in 1989 to open and run a restaurant for Zeiger International, a Trenton-based company headed by Jeffrey and his parents, who have been involved in the import-export business with Russia since 1973. The Tren-Mos Restaurant was the first American restaurant to open in the former Soviet Union, six months before McDonalds and one year before Pizza Hut.


By 1990, business was running smoothly with the help of Zeiger's Russian partner, Sergei Goryachev, who then headed the Lada company. Goryachev, then 55, was the former mayor of Moscow's Lenin district before the city was restructured in 1992. In 1987, as mayor, he signed a sister-city agreement between the Lenin district and Trenton, which helped pave the way for the first Tren-Mos restaurant on Komsomolskaya Street.


"He was the tank," Zeiger said. "He dealt with the back, with the bureaucracy while I dealt with the front, with the advertising, the look of the place, the tablecloths, the china."


Over time Zeiger and Goryachev formed a tight father-son-type relationship. The two men helped bring the Kirov ballet to Trenton and set up cultural exchanges between U.S. and Russian newspaper editors and artists.


But on the evening of July 31, 1993, events took a tragic turn. In his private garage, Goryachev was shot three times in the head and neck.


The murder had the earmarks of a mafia hit: a successful victim, an assassin waiting, gunshots muted by a silencer and apparently nothing stolen.


Zeiger admits he was not thoroughly familiar with Goryachev's time outside the restaurant. He does, however, vehemently deny the existence of a mafia element. The case remains unsolved.


"Right away everyone said 'mafia, mafia, mafia,'" said Zeiger. "Sergei's death had nothing to do with the mafia. No one's been bothering me since.


"I'll put it this way: Whatever mistake Sergei made, he paid for it with his life."


Goryachev's successor as co-general director at Tren-Mos, whose name Zeiger did not want used in this article, did not see eye to eye with his American partner. According to Zeiger, the difference lay in "how a Western-style restaurant should be run."


Zeiger said that at the Komsomolskaya restaurant "the level of products was not up to standard, morale was real low and business suffered."


Relations deteriorated to the point where Zeiger wanted to terminate the joint venture and simply divide the spoils -- the Komsomolskaya restaurant and a newer bar and bistro near the Pushkin Museum -- with Lada. But Lada opposed the idea.


"The split was discussed and Lada thought it would be too hard, much harder than finding a compromise," Rashiit said. "There were personality differences. Different approaches resulted in problems in business. But peacefully, the two sides found a solution."


In a last-minute compromise, avoiding the possibility of complicated Russian arbitration courts and being dragged through the press, the partners settled internally.


The Komsomolskaya restaurant was to be temporarily shut down for a "cooling-off period" in order to concentrate on the bar and bistro, which was also having some financial trouble.


After renovations, Zeiger and Rashiit said, the Komsomolskaya restaurant might reopen or be leased out. Although the day-to-day operations have halted, occasional banquets are still held there. But Zeiger does not place the blame on the fact that there were Russian partners.


"You're going to have partner problems anywhere in the world," he said.


As part of the agreement, Lada's controversial co-general director was removed from daily operations, leaving Zeiger as sole general director of Tren-Mos Restaurants. Zeiger maintains, however, that he and his counterpart parted ways on "peaceful terms."


"You can solve things peacefully," he said. "There's a correct way to deal with the problem. We didn't do it in a mean, aggressive way. The whole company was involved in the decision."


But while the partners were working out their difficulties, as if to add salt to the wound, the tax authorities audited Tren-Mos.


It turned out that the venture owed close to $400,000 in back taxes. Tren-Mos fought the ruling all last year but ended up paying the figure owed.


When asked about the current atmosphere at Tren-Mos, Rashiit said, "The approaches are now the same, the politics is the same. I like the way Jeff works."


Despite the venture's roller-coaster ride, which might have turned the stomachs of some Western businessmen, Zeiger remains hopeful and committed to the future.


"Part of my dream," he said, "would be to someday turn" Tren-Mos "over to a Russian-trained director."