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What to do when the TV crew comes knocking?

If it's not every restaurateur's worst nightmare, it's close. Suddenly, a TV-news reporter with sculpted hair and a handful of health-inspection reports bursts through the door, camera crew in tow.

"Wait 'til you hear what we found at one of the city's most popular restaurants!" the anchor will later tease to thousands (or perhaps millions) of regular and potential customers. "The results will turn your stomach!"

As restaurateurs have long maintained, the well-known TV exposés of eateries that have allegedly flubbed recent health-department inspections often mislead the public. Tales of supposedly egregious health risks often amount to comparatively minor health-code infractions like a dead light bulb or broken back door. Yet once the Five O'Clock News runs its story, the damage is done, the words "dirty dining" and the restaurant name inextricably linked in the public's mind. There's little the restaurateur can do about it.

Phalia Demetriou is still reeling from such an episode that took place last November at her restaurant Phil's Place, a 50-year-old family-dining mainstay in St. Petersburg, FL. The report was merciless: "It's one of the state's worst offenders," barked the ABC affiliate. "And yes, it's still open for business."

Not for long, or so it appeared, as customers stayed away in droves.

"We were down 25% for six months," says Demetriou. "We were very, very near closing." (Demetriou swears she hasn't had a food-related violation or customer illness in her 25 years at Phil's, even though the news people had violations that proved otherwise, and stand by their story.)

It was then that Demetriou decided that staying open would require nothing short of remaking her entire business.

At first she had tried simple cost-cutting. She eliminated the restaurant's regular donations to local charities. She whacked her staff in half, as she and her husband started working doubles. But the red ink continued to pool. After more contemplation, she decided on an entire makeover.

Attempting to erase images of the old Phil's in people's minds, Demetriou first ripped out the tables, chairs, floors, and counters, and repainted and remodeled everything—to the tune of $10,000. "I put in every penny I had," she says. "I redid everything."

Demetriou didn't stop there. She slashed menu prices—some in half—and offered a wider array of specials at prices that left paltry or even negative margins. "I've got loss leaders geared towards getting people back in here," she says. "I'm practically giving my food away." For now, anyway.

She redid her advertising strategy as well, playing up the reduced-price specials in local flyers. And so confident was she in the cleanliness of Phil's—and in the erroneousness of the news report, she asserts—that she pasted the health violations on the cash register, in plain sight of everyone.

Slowly, the faces she hadn't seen in months started showing up again, and some new faces as well. Both gave Demetriou hope that the area's busy season will bring the restaurant's numbers back to pre-broadcast levels.

"I'm a fighter," seethes Demetriou. "I'm not gonna give up."

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