(Note: This story appears in the May 2021 issue of ED Magazine)

Jim Dato had a career dealing with shoes, and a successful one at that. But he decided to see how the other shoe fit, and embarked on a new path in the gentlemen’s club industry.

Jim Dato grew up in the family shoe business. His family owned shoe stores in Ybor City and downtown Tampa. He sold his first pair at the age of 10. When retail moved to shopping malls, Dato’s family stores didn’t make the move.

Dato left the family shoe business and went to work at Florsheim Shoe Company. Dato worked his way up to a VP position, but it wasn’t his cup of tea. So he transitioned to repping shoes for Bally of Switzerland, then into business for himself, representing overseas shoe manufacturers to national chains.

Dato saw the shoe market changing and knew he needed to find something new to do. Twenty-four years and four clubs later, Dato is a leading force in the Pinellas and Pasco County adult nightclub markets and a voice of reason who gets things done with law enforcement and government to help keep the clubs safe and profitable.

ED’s Legal Correspondent Larry Kaplan caught up with Dato to inquire how he went from shoe impresario to a club Goliath.

ED: How and when and why did you get into the adult nightclub business?
DATO: We thought about bars and then realized adult bars were much more lucrative than sports bars. In 1997, we bought our first club, Diamond Dolls, in Clearwater, followed in 1998 by the Vue in Hudson. In 2016, we bought Allure in New Port Richey. I continued in the shoe business, alongside the clubs, for about 15 years. In 2018, we bought the fourth club, Elite, in Pinellas Park.

ED: There are numerous other clubs in your areas. What distinguishes your clubs from the competition?
DATO: We prefer the type of customer who wants to spend money, have a good time and not cause trouble. Each of our clubs is different. A club operator recently came into Clearwater, spent about $500,000, and failed when they went after a high-grade, affluent customer. That’s not Clearwater, where we have Diamond Dolls. On the opposite end of the spectrum, Hudson, where we have the Vue, is very different than Clearwater. It’s very blue-collar. Allure in New Port Richey and Elite in Pinellas are somewhere in between.

ED: What are some of the things you’ve encountered since working in this industry that have surprised you?
DATO: The biggest surprise, very early on, was that if we went to court, we never got a fair shake. We’ve spent thousands and thousands on attorney fees, presented our evidence, and the judge never even looked at it, saying he’d take it under advisement, then later finding a way to rule against us. That’s why we decided to try political maneuvering; working with politicians.

We were in the midst of an election campaign for the commissioners, probably around the year 2000. They were writing us countless tickets and raiding the clubs for “nudity in an alcohol establishment.” We developed a large poster of a young female on Clearwater Beach, holding a beer. Her attire was skimpier than that allowed in our clubs under the ordinance and her beer, in effect, made the hotel-adjacent beach an alcohol establishment. The poster read: If you’re visiting a Pinellas County beach, holding an alcoholic beverage, you can be arrested and go to jail. We emailed it to tons of people and bombarded the commissioners with it.

Another active club owner, Rich Bantock, and I met with the commission chairman. We explained that the police were coming to our clubs in ninja gear, scaring everybody, arresting every dancer because they wore Brazilian-cut bottoms that showed “the nates of the human buttocks,” and then taking Polaroids of the nearly-nude dancers outdoors.

The chairman was shocked and asked to meet with the dancers. She asked us to stop our email campaign and agreed to fix the problem after the election, which she did.
She set up a meeting for Rich and me with the sheriff. We reached an agreement on what was allowed, and our problems disappeared. When a new sheriff was elected, we met, and the relationship continued. We expect no special favors. Just leave us alone as long as we’re law-abiding. I was never involved in politics previously, by choice. But it does work.

“We’re so close to normal now it’s unbelievable. Our business
is better than ever before. Last week was our biggest week ever at Diamond Dolls. I attribute that to stimulus, spring break, and people being cooped up so long with their stimulus money, they just went out and blew it.” — Jim Dato

ED: When you first got into the club business 24 years ago, was the business in general and the Tampa market particularly much different from today?
DATO: The most significant difference is the caliber of the entertainers. Back then, this was a stepping-stone for 25% of entertainers who attended college. Now dancing is a necessity to support themselves.

Also, when we started, most clubs were gaudy and brightly painted. We decided to change our exteriors to blend with the neighborhoods—generally mauve colors with darker trim. When we took over Allure, it was bright pink. We decided the property must be less offensive to the neighborhood. During the remodel, passersby thought it was going to be a doctor’s office.

ED: If you talked with an adult nightclub owner from elsewhere, how would you describe your Clearwater/Pinellas County market?
DATO: Our customers have less money than Tampa. Tampa has more disposable income.

ED: What are the advantages of operating multiple clubs? For instance, does it allow you to move staff (or entertainers) between clubs, if necessary?
DATO: Yes. The first thing we did as we grew was creating identical payroll, POS, and systems in each club. We can easily move any staffer between clubs, and they feel quite at home.

ED: Does being a multi-unit operator provide you with any “buying power” with any vendors? You have four clubs now. At what number did you achieve buying power?
DATO: Yes, it was after the third club. It helps us somewhat with vendors. Alcohol vendors are so big and powerful; it’s not so easy to get those benefits anymore.

ED: All four of your clubs serve alcohol. Are there differences?
DATO: A good question. All four clubs are full alcohol. At Diamond Dolls and Elite in Pinellas County, we’re topless with pasties. Allure and the Vue in Pasco County are totally nude.

ED: My understanding is that the laws in Pinellas County are different from those of Hillsborough County, and in Pinellas, they’re incredibly vague. How do these vague laws governing your Pinellas clubs affect you, compared to your full-nude Pasco County clubs?
DATO: It doesn’t currently hurt us. At one point, it did when one of the competing Pasco clubs was less than a mile from the county line. Today, it doesn’t matter.

ED: It’s the overall quality of the entertainment?
DATO: Absolutely, that’s the key.

ED: What are some of the specific challenges of operating multiple clubs?
DATO: Keeping up with the ATMs. It’s silly but true. Banks today make it difficult, but you learn to maneuver.

ED: Florida is one of the least restrictive states, as far as COVID-19. What are your dance and stage tipping policies and other policies related to COVID-19?
DATO: The staff is masked, the entertainers and customers aren’t. We also have the building sanitized regularly. We’ve had no problems since reopening.

ED: When do you expect your club operations to be “back to normal? And what do you see as the most significant challenges in getting to that point?
DATO: We’re so close to normal now it’s unbelievable. Our business is better than ever before. Last week was our biggest week ever at Diamond Dolls. I attribute that to stimulus, spring break, and people being cooped up so long with their stimulus money, they just went out and blew it.

ED: Aside from the given basics (customer service, beautiful entertainers, inviting atmosphere, etc.), what would you say is the common denominator of your clubs?
DATO: Everything starts at the top. We feel comfortable with a particular type of GMs and managers to whom we can relate. That filters down to the rest of the staff.

ED: Tell me more about working with your competitors for the common good. Was that difficult when you first started?
DATO: Not really, we were all in trouble. We weren’t getting a fair shake, and we had to put our heads together. My long- time attorney Luke Lirot and I planned it, and I began hosting regular owners’ meetings and together, we accomplished things.

ED: Are you considering buying additional clubs?
DATO: No, I’ve got enough on my plate because I work at it. I just can’t spread myself any thinner. It took me a while to learn that though you want control, no one person can do it all. No one does things exactly as you do, but you must delegate.

Larry Kaplan has for 20 years been the Legal Correspondent for ED Publications. Mr. Kaplan is a business broker in the sale and purchase of adult nightclubs and adult retail stores and the Executive Director of the ACE of Michigan adult nightclub state trade association. Contact Larry Kaplan at 313-815-3311 or email larry@kaplanclubsales.com.

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