A clean living: The county's grading system for restaurants has opened doors for Everclean Services, which vows to help owners get an 'A'. (Small Business).

JACK McShane has built a $2 million business on the proposition that $275 is a small price to pay to avoid a 20 percent drop in revenues.

McShane, founder and president of Malibu-based Everclean Services Inc., preps restaurants for those dreaded inspections from the county health department.

"We guarantee our clients if they follow our procedures they are guaranteed an 'A' rating," said the 44-year-old McShane over an Ahi tuna salad at Ocean Avenue Seafood in Santa Monica, an "A"-graded client.

Inspection results hit owners in their pocketbooks. Restaurants with a "B" rating see business, on average, drop off by 20 percent or more, according to a study by the county, which began posting health inspection grades in restaurant windows six years ago. Those given "C" ratings find the number of patrons plummet by almost twice that amount.

With such a dramatic effect on business, restaurant owners have been willing to pay Everelean Services between $175 and $275 per visit, depending on the number of stores served, for practice surprise inspections to make sure they are ready for the real thing. As part of that fee, the restaurant staff is given seminars on food safety.

Cheesecake Factory, Grill Concepts Inc.'s the Daily Grill and Panda Management Group's Panda Express are among the California-based chains that contract with Everclean. Using mostly contract workers, the company also has operations in 43 other states and Puerto Rico; more than 60 percent of its revenues are generated outside California.

"The funny thing about food safety is it's not just a California concept," McShane said. "It's truly a national issue?."

Making the grade

McShane has worked in restaurants since he was a freshman at Santa Monica High School. After graduating with a business degree from Santa Monica College, he got a job with Irvine-based Prandium Inc., which owns Koo Koo Roo Chicken, Chi-Chi's and Hamburger Hamlet.

By 1996, McShane was charged with setting up new Koo Koo Roo locations. But the company fell on hard times, and in 1997 he was let go.

Finding a new career was difficult -- until he came up with the idea of helping restaurants navigate the series of new health codes the county was beginning to implement. "I shot up out of bed at 3 a.m. with the idea," he said. "I was so excited I had to wake up my wife and tell her all about it."

The next day McShane pitched the idea to Bob Spivak, who was then in the beginning stages of expanding his Daily Grill restaurants. Spivak signed on as Everclean's first client.

With $125,000 seed money from Upland-based Broadway Capital, McShane opened up an office and hired a handful of former L.A. county health inspectors. Broadway Capital is still a partner in the business. "Those first couple of years were a real learning curve," he said.

Last year Everclean posted revenues of $1.4 million. And this year its contract inspectors are on track to complete 15,000 inspections nationwide, which would result in revenues of $1.9 million.

The company has grown large enough that he is pursuing chains with 800 to 1,000 locations. "There was no way two years ago I would have called up any of the largest chains, like a McDonald's or Burger King," McShane said. "But we're now in a position to take on those clients without disrupting the rest of our business."

Bealing the test

Restaurant owners say they hire Everclean to get an idea of how well their kitchens are being run and maintained. "It's very helpful when you have an outside objective opinion about your operations," said Selwyn Yoslowitz, owner of Marmalade Cafe. "It gives you a yardstick to measure your operations against."

Yoslowitz said he brings in Everclean inspectors once a month in some restaurants, while at others he asks for inspections every other month. "It depends if I have a new manager or if there have been repeat problems at a particular restaurant," he said.

Terrance Powell, chief environmental specialist for the Department of Public Health, said McShane understands the business from the perspectives of both the county and the restaurant operators.

"Consultants come and go, but he has had some staying power because he is so good at what he does," Powell said. "He seems to be able to get his clients to understand how to meet our criteria."

Yoslowitz said Everclean inspectors are often more demanding about temperature and record keeping than the county. When inspectors find problem areas, the owner is alerted and a follow-up surprise inspection is arraigned.

"I think it's necessary," said Jack Srebnick, owner of 17th Street Cafe in Santa Monica and president of the Westside-Beverly Hills chapter of the California Restaurant Association.

"But they are expensive, and with only one restaurant I try to police myself," he said. "For large owners who don't have direct oversight of their restaurants every day, I think it's a very good thing to have."

RELATED ARTICLE: PROFILE

Everclean Services Inc.

Year founded: 1998

Revenues in 2002: $1.4 million

Revenues in 2003: $1.9 million (projected)

Employees in 2002: 9 (full time)

Employees in 2003:12 (full time)

Goal: Continued annual revenue growth of 40 to 60 percent.

Driving Force: Maintaining an exceptional staff and assisting restaurant people dedicated to food safety.