Barre, VT -The city's famed eatery, The Farmers Diner, has unexpectedly closed its doors, but founder Tod Murphy insists he's planning to reopen despite what he said has been limited financial success.

After work Sunday afternoon, the restaurant's dozen full- and part-time employees were informed that the diner was closing effective immediately. Murphy said the painful decision to temporarily close was made last Thursday night. The restaurant, which opened three years ago with a mission to give local farmers a market for their products, is expected to reopen in October, he said.

Employees reacted to the sudden news of closure with a mixture of disappointment and anger.

"We had some really great cooks who were really disappointed, some were really angry … ," Murphy said.

According to a message on the restaurant's answering machine, the diner is closed for "retooling and regeneration." The answering machine message offers "regret" to customers and notes "our intention is to reopen in approximately two months."

On a second answering machine at The Farmers Diner main office in Washington where Murphy lives and farms, the greeting is similar but slightly more specific. The diner is closed for August and September and reopening in October, it says.

Murphy and the diner have been heavily profiled in national newspapers and magazines for the innovative idea of a diner serving back-to-the-farm wholesome food from local suppliers. But for local patrons, the service, prices and uneven quality of the food have been issues. Murphy Tuesday said the closure was necessary because of the direction the business is taking, while also admitting the small size of the diner and its kitchen were obstacles to making a profit.

The Farmers Diner is expanding to a second location in either Lebanon, N.H., or Burlington in six to eight months following the conclusion of a $1.5 million fund-raising campaign, is planning for a Rutland location as well, and possibly becoming a franchise with a Boston diner in about two years, Murphy said.Before the business can expand to other locations, Murphy said restaurant managers must create a "playbook" other locations can follow and creating such a written business model was not possible while also operating the restaurant.

Murphy wants the operations manual to spell out how to recruit farmers to raise products like pork and eggs as well as information on expectations for wait staff, such as a knowledge of local food products the restaurant is using.

"We've done a fairly good job of running a restaurant on the fly," Murphy claimed. But without direct oversight from Barre managers, a manual is needed to keep franchises, or joint ventures, true to The Farmers Diner philosophy and business practices.

Expansion of the diner concept and maintaining a strong rural farm community has always been on Murphy's plate, as the Web site notes. "Our goal is a national network of Farmers Diner restaurants, serving typical diner food sourced from local farmers and producers. We expect The Farmers Diner to be a leader in family/casual dining because local fresh food tastes superior, customers prefer to support their neighbors and communities, and we provide great service at reasonable prices."

The Barre restaurant will receive some small improvements during the closure, such as graphics to be placed on the restaurant's walls showing how much food is from local sources, but the small size of the restaurant prohibits major changes, Murphy said.

Murphy admits the Barre restaurant is not a whopping financial success.

"It's successful in terms of proving out the idea," he said. The idea was that local food could be turned into meals Vermont families can afford. But, he said, "Our labor costs were higher than expected, so the amount of cash flow it generates is absolutely minuscule."

Adding a second location will help the Barre business, Murphy noted. Not only is the Barre restaurant small at 50 seats, but so is the kitchen. He said a 150-seat restaurant with a larger kitchen is needed, and a second larger restaurant will be able to do some of the Barre restaurant's food preparation work. Murphy cited as an example that "prep" work on food, which will be done with a large cutting machine that can't fit in the Barre kitchen, takes about 20 hours weekly to accomplish by hand.

News that the diner had closed came as a surprise to many in Barre this week, said Bob Sager of the Barre Partnership. Harry Monti, Barre Area Development Corp. economic development coordinator, said the temporary closure in Barre at such a busy time of year is unfortunate for community members who patronize the business and employees.

"It's a shame that he closes the restaurant down for two months," Monti said. "I don't feel that's an appropriate way to run a restaurant."

Larry Tempesta, who is operations manager for Vermont Smoke and Cure in South Barre, The Farmers Diner's sister company, said the restaurant closure has affected morale, though Tempesta is still busy curing meats for other customers, such as food cooperatives.

"I think Barre's always been a tough sell for that diner," he said. "People give lip service to local food, but they don't put their money where their mouths are."

Murphy called the decision to close painful and admits his timing is bad. This is a busy time in the restaurant business and farmers' growing season.

"We decided on Thursday night to close and it's just been an awful week trying to deal with that," he said.

But the decision couldn't be put off because fund raising for a second location needs to wrap up soon in order to use the money raised in a timely manner and launch the new restaurant. About half of the $1.5 million has been raised, Murphy said.

The Barre restaurant does remain part of The Farmers Diner business plan, Murphy said.

"We are working full-time here to be open in October to come back and to have a better operation than we've had, to be open, (and) have really great customer service," he said.

James Hadley, a Montpelier resident and the Barre city employee, hopes the diner reopens.

He and his wife patronize it.

"When we plan a relaxing weekend, we will often start out with breakfast there," said Hadley. "It's such a fantastic meal. The whole-wheat pancakes and the sausage made by The Farmers Diner are out of this world."

Hadley said his son-in-law and daughter will visit from Atlanta, Ga., in early October.

"My son-in-law thinks the world of that place," said Hadley. If the diner is not opened by then his son-in-law will sorely disappointed, he said.

Originally published online here: http://www.timesargus.com/apps/pbcs.dll/article?AID=/20050810/NEWS/508100339/1002