Episode Transcript
[00:00:00] If your restaurant falls apart when you leave, even just for a week, congratulations. You don't have a business, you have a job.
[00:00:08] There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:00:32] Foreign.
[00:00:39] Thanks for tuning in. My name is Chip Close. I am your host. This is the Restaurant Strategy podcast. We put out two episodes every week. The whole point is to help independent restaurant owners increase the profitability of their restaurants. What does that mean? Helping you to make more money and to work less. And be really deliberate about how we do those two things. I write books, I give talks, I host a membership site. I am also the founder of the P3 mastermind. It's a group coaching program where I work with restaurant owners from all over the world. 45 states in this country, including Washington D.C. 8 different countries around the world. I work with restaurant owners to help them increase profitability. If that's something you struggle with, 2025 was hard. If you want 2026 to be better. If you want to beat those single digit profit margins, come join me. We talk about consistent, predictable 20% returns.
[00:01:29] No pressure to join, but let's start with a conversation. RestaurantStrategyPodcast.com Schedule we'll ask each other a bunch of questions and see if you're a good fit again. Restaurant strategy podcast.com schedule as always, you'll find that link in the show notes.
[00:01:45] Now, if you've been listening to this show for any length of time, you've heard me talk about Kickfin because they've been a trusted partner of mine for years and I genuinely believe in what they do. For restaurant operators, managing tips has always been a headache, right? There's never enough cash in the drawer. At the end of the night, managers are stuck making bank runs and doing spreadsheet math at 1:00am Tip pooling regulations keep changing, getting more complex. It's just not fun. And that's exactly why Kickfin exists. With Kickfin, restaurants can calculate tip pools automatically send instant payouts directly to employees existing bank accounts. No cash, no predatory pay cards, no glitchy employee apps required. Your team gets paid their tips fast in the account they choose, right? When their shift ends, Kickfin integrates with all major PoS players, including Toast Square, SkyTab, Genius Union and many more. So you get a fully automated end to end tip management system. It is fast, it is accurate. And it gives you a clean digital record for accounting and compliance.
[00:02:51] Kickfin powers tip payouts for every type of concept, from mom and pop shops to regional hospitality groups to national brands like Walk On Sports Bistro and Marco's Pizza and Toasted Yolk Cafe. Great hospitality starts behind the scenes when your people feel valued, when they are paid fairly and paid fast. I promise, everything improves. Kickfin makes that possible. So if you're ready to save hours every week, eliminate cash runs, streamline accounting, and make tip payouts the best part of everyone's day, visit kickfin.com demo now. A lot has been written on this subject, right? There's the E Myth revisited. There's that famous quote. The more valuable you are to your business, the less valuable your business actually is. But all the control you're trying to exert, or maybe all the control you do exert onto your business, isn't actual freedom. Freedom is true control. The ability to step out and step aside. And if you ever want to step out of your business, if you ever want to grow your business, if you ever want to franchise your business, that business cannot do it. When you are there, you are the bottleneck, as been has been said over and over and over again. So how do you get there? That's what this video is all about. We're going to talk about the systems and mindset shifts that are required to put in place to make that growth, to make that sort of freedom possible. Okay, now let's talk about this, right? Freedom is real control. Because when you can step away, you know that the controls are already in place. You know that you have the systems in place if you want to. Now let's talk about this, right? If you want to just step back from the business, live on beach somewhere and make sure that somebody sends you a steady distribution check every month, then you need to make sure that your team knows what they need to do in order to run a successful, profitable restaurant with consistency. If you want to be able to grow that business. Well, you can't possibly be in two places at once. So the first place has to be able to stand on its own. So you can go up in the second, third, fourth, fifth place, right? That requires systems and teams. And let's say you want a franchise, you need to make sure your property is branded, is differentiated and is very, very profitable because you're going to look a potential franchisee in the face and you're going to ask them for 8% right off the top. Usually it's a 6 and 2, 6% royalty that the franchisor would take and then either 1% for national marketing, 1% for local marketing. At the very least it's 7% royalty plus marketing. Most of the times it's a 6 and 2, six percent royalty plus 2% marketing spend. So you're going to love 8% right off the top from anyone who franchises from you, which is good for you, except you got to make sure that they are still profitable because if you say hey we you going to do 12%. 12% minus the 8% that you pay the franchisor, you'll probably take home 4%. I don't know. On a million dollar business, for somebody to make $40,000 a year, not really reasonable, not really worth it in my eyes and I think in a lot of smart, savvy franchisees. So if you want to step back from the business, you need systems and people, you need the controls in place. If you want to grow this business, you need to know that every new location can be just as successful, just as profitable as the first one. And if you want a franchise, you got to be able to look a franchisee in the face and tell them with certainty, know how to give them the tools, the books, the playbooks, the systems so that they can be insanely profitable. Just like you've been on the first few locations.
[00:06:10] Ajinomoto is your answer to every busy dinner rush spent deep in the weeds. When hungry customers walk through the door, they expect good food that tastes homemade. But making every dish from scratch cuts into your profits, especially with the cost of ingredients and labor. That's where Ajinomoto Foods comes in. Ajinimoto has a huge catalog of fast, easy to prep frozen Asian products that taste and look homemade. That includes classics like fried rice dumplings and onion rings and new trendy fusion plates like kimchi chicken pot stickers. Choosing Ajinimoto is choosing over 100 years of proven expertise in the food service space. Choose to save time and choose to save money in your busy kitchen without compromising on the quality your customers expect. Learn about Ajinomoto @ajinomoto food service.com as always, that link is in the show notes.
[00:07:11] Whatever it is true freedom. The ability to step back from your business is real freedom. Real freedom equals real control. So how do we do it? First things first. If you are thinking you want to step back, if you are thinking that you want a franchise, if you are thinking you want to open a second, third, fourth location, here's what I tell everybody. All of my clients, everyone who's a member of the P3 mastermind. I think you got to take 90 days off.
[00:07:34] 90 days where you do not walk into any of your restaurants. It has to stand up on its own. My caveat to that is that you can do as much as four hours of phone meetings every single week. That's it. You can only be. You can only participate four hours a week. And you cannot walk in, you cannot touch the line, you cannot touch the reservation book, you cannot shake hands with anybody. You have to leave. You know why? Because if you go open that second location in the town one town over you, it's going to be 90 days before you can walk back into your original location. Unless it's two minutes down the road. My guess is you're not opening a second location two minutes down the road. It's going to be 25 minutes away. It's going to be 35 minutes away, minimum. Because you don't want to pull audiences from one to the next. You want to be able to serve two totally different audiences, which means you're probably going to be in another side of the market or another market entirely when you go up in a new restaurant. P.S. i'm sure you guys have opened restaurants before. You know, you know, you can't, you can't. It's like, it's like having a baby, right? You can walk away from the, you can walk away from the restaurant about as long as you can walk away from the baby. When a restaurant is new, it is like a baby. You cannot walk away that soon. So if you go, you work there for a few days and then you want to spend a couple days back at the main, at the original main location, can't do it, not going to be able to do it because the baby's going to get into trouble, the second location being your baby. So if it's going to be 90 days before you can really walk in and adjust or have any sort of input or oversight into the day to day operation, then you to figure out how to make this thing run for 90 days without you. 90 days is a very, very difficult length of time to fake it. The people have to be in place, the systems have to be in place, the oversights, the controls. So if you want to step back, if you want to retire and still with, you know, still hold on to the ownership of the restaurant. If you want to franchise, if you want to open another location, minimum, before you do any of that, you got to spend 90 days away from the business. You can do a couple of phone calls, but 90 days, where you are out of the day to day operation. That's the thing. So now what are you going to need to get those 90 days to run problem free? You need to put systems in place. The most important thing is you have to have the right people. You have to have specifically the right leadership in place. People who are going to be your surrogate that you know you can trust to do what you need them to do. And then all of the systems below that. Right. Jim Collins wrote Good to Great. Good to Great I think is the very best business book ever written on the subject. While it's a little outdated in the examples, the, the frameworks that he gives I think are tried and true tested over time. I think they will never change. And he talks about very early on. The key is having the right people on the bus in the right seats. So before you put anything else in place, you need to have the right people on the bus in the right seats. And then let's talk about those systems, right? Forecasting and budgeting. Right away you got to manage your revenue, right? So how much revenue do you think you're going to make this month? And then what does that mean for your revenue targets for the first, the second, the third, the fourth, the fifth, sixth, all of that. It's one of the big things that we teach in the P3 mastermind. We've got the P3 scorecard that we give to every member because it's the tool, it's the single tool that will change your business. So you need a way to set daily revenue targets that generates a forecast, then that spits out budgets for the key areas of your business. That's got to be in place. Before you step aside. You have to know who's doing the ordering and is there a system in place for ordering? Right. Are there pars, are there purchase guides? Do you have approved vendors? All of that. You've got to have scheduling in place. Literally. Who does the schedule? Who sets the budget and then who does the schedule? Who provides oversight there? Who does the payroll? Who like oversees and makes sure that people actually get paid? Who does inventory? Right. Inventory, pars, ordering, they all go together. You need to know who's doing that. System counts, payable. You got to make sure to pay your vendors. Maybe a bunch of them are on autopay. But I know as a small business owner you've got to manage cash flow. So who's actually making sure that people get paid so people can still send you deliveries. That's important. Who's doing the hiring and the Training, because for sure, over the course of 90 days, you will lose a couple of people. So is there a system in place for acquiring new talent and getting them up to speed? You got to understand who's doing it, and you have to have a system in place. Who's looking after the general cleanliness of the place? The health department is a big deal this day, in this day and age, in most states, most cities. So who's overseeing the general upkeep, you know, the physical plant, who's looking out for that? And then. And the last thing is marketing. Who's handling the marketing engine and who's overseeing all of the efforts and the budget there so that we make sure we can get new people in the front door. We make sure we've got a system for getting people to come back and increasing the frequency of visits. We make sure that we're generating online reviews and we're sparking that word of mouth. For me, there's a lot else that happens, but those are the bare minimums that have to be in place. That's the foundation of a really good set of SOPs.
[00:12:23] If you want to do anything big with your business, meaning expand or franchise or just step back and pass this off to the next generation, live on a beach somewhere, have them send you a distribution check once a month. This has to be in place. Get out of the right people on the bus, in the right seats. And you have to have this stuff systematized so that they know what they're supposed to be doing, when they're supposed to do it, how they're supposed to be doing it, and why it matters to the business that they do it. So it's. If you cannot step away from your business, man, congratulations. You don't have a business, you got a job. But if you want a business, if you want to go from operator to owner, you can do that. And it's not that hard. You can have all this stuff in place in the next four weeks, six weeks maybe, max. And then you can take your 90 days off. And when you come back from your 90 days and you're like, man, this place is still standing. And what I hope you find is that the place is in even better shape than you left it. When you do that, then you can set about the real task of expansion and really mapping that out. Really business development, looking for new locations, figuring out how to do your fdd, if that's what you're going to do. But the first step is you have to understand that you have to get that freedom away from the day to day. That is true power and true control over your business. Again, my name is Chip Close. I'm the founder and CEO of Restaurant Strategy. I help restaurant owners increase the profitability of their businesses so that they can grow, so that they can get more freedom. I run something called the P3 mastermind. That link is down in the caption. If you want to learn more about it, you go, you click it, you watch a quick video.
[00:13:52] Sign up for a call. We'll have a chat with me or someone from my team. We'll answer all your questions. We'll probably have some questions for you. That's it, guys. Go check out some of the other videos. And if you're curious, if you want to work with me and my team, set up a call to learn more about the P3 mastermind.
