[00:00:01] Speaker A: There is front of house and there is back of house, but the thing that ties them both together is operations. Figuring out how to make things run and more importantly, how to make them run profitably. It's crucial in our business. My guest on today's show is rick Kamak, a 30 year veteran in the industry who's able to pull from both his successes and his failures to help you build a better business. Tons of great information on this one. Don't go anywhere.
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.
Hey everyone, thanks for tuning in. My name is Chip Close and this is Restaurant Strategy, a weekly podcast dedicated entirely to the hospitality and industry. We cover marketing, operations and everything in between. Each week I leverage my 20 plus years in the industry to help you build a more profitable and a more sustainable business. I also work directly with operators all over the world through my group coaching programs to help you address and overcome the specific challenges we face in our industry. Curious to learn more? Set up a free 30 minute strategy session at restaurantstrategypodcast.com schedule let me show you how simple it can be to run a profitable restaurant again. RestaurantStrategyPodcast.com Schedule as always, you'll find that link in the show Notes now, we all know managing costs is one of the most important parts of running a profitable restaurant, especially now. But between fluctuating vendor prices, waste labor, and the never ending list of tasks that demand your attention on a daily basis, it can be challenging for even the most experienced of us to manage costs well to that's where Margin Edge comes in. Margin Edge is a complete restaurant management software that automatically uses data from your POS and invoices to show you your food and labor costs in real time. Don't wait until it's too late. Margin Edge gives you tools to make decisions in the moment, like a daily P and L price, alerts on key ingredients and real time plate costs, all without ever having to touch a spreadsheet. Take control of your costs, work more efficiently and be more profitable. Learn more@grin edge.com CH that link is also in the show Notes Now My guest on today's show is Rick Kamak. He is a restaurateur, an entrepreneur, a board advisor, consultant and an educator. He has built a career in hospitality and it's my pleasure to welcome him to the show. Rick, it's good to have you.
[00:02:49] Speaker B: Thanks. Thanks for having me.
[00:02:51] Speaker A: My pleasure. All right, so listen, you started your career in technology. You then somehow for some reason moved over into hospitality. Talk to me about the first part of your life and how it led you into the second. And then there's so much, so many different places we can go from there.
[00:03:07] Speaker B: Yeah. So, interesting question.
I was in technology straight through the 1990s, and I really enjoyed it. I was initially a computer programmer, then I worked for a consulting firm. Then I opened my own firm, sold it for small amount of money, then started operating large firms for billion dollar companies and built up some pretty big. Some pretty big companies. And I really, I enjoyed it a lot until I didn't.
And somewhere around 2000, it really just started getting old. It started getting boring. I was tired of taking out bankers and finance people for dinners and, you know, sounds glamorous maybe, but, you know, having, you know, lunches and talking about data, warehousing all day just you know, wasn't really ultimately wasn't my cup of tea. And I always been like a foodie before the term was out there. I was that. I think I was eating sushi in the early 80s. You know, it's. I've just always been into food and wine and nightlife. And I just said, you know, it could be cool to get involved, you know, in the FNB business. And I invested in 2000, I invested in a friend's bar.
Small amount of Money that was $30,000 and it went pretty well.
I doubled my money.
And I was passive. I was just in the background. I was, you know, the annoying guy that would come in and buy everyone shots and, you know, that kind of partner. And so I just took the. I took the fun route. You know, I didn't pay too much attention to the business. But a couple of Years later in 2003, I said, you know what, that was cool.
I think I want to do a little bit more. And I was running about a $20 million technology firm at the time. And that was not the largest I've ever run, but it's a substantial business.
I start looking around and ultimately come across two people that ended up becoming my partners. And we started. They were very well versed in the business. They were both 15 year veterans and started looking around for spaces. And we found a space in the meatpacking district and it was a three story townhouse, completely shelled out. Never had heat before. Never had air conditioners. Forget about air conditioners. Never had heat.
For some reason. And this, this will lead very much into like what to do and what not to do in our business. But for some reason I thought for $400,000 and in about four months I would open my first restaurant.
Started out, it was going to be a lounge, the meatpacking district. This is like this hot time when like the meat packing was really just kicking off.
And as we went along, first off, I figured out it wasn't going to take me four months. Second off, I figured out it was going to take me a bit more than $400,000. And it basically turned into a bar restaurant lounge across three floors called five ninth, ultimately called five ninth. And that was the address.
We had to dig into the basement about three feet in order to have a kitchen. So now we had four floors actually.
And two years and $202 million later, I had my first restaurant.
So I had never worked in a restaurant before. I had never been a server, never been a bartender, never been a dishwasher, nothing.
And next thing you know, I'm in this business, I have two partners and I'm thinking, okay, you know, listen, I had a strong business background, I went to school for business.
I had run $100 million companies in my career, but I'd never been in the restaurant business. So my, how hard could it be? You know, I'll learn, you know, the problem, the ratios, the KPIs, the things I got to look for and you know, it'll be fine. And then these guys are going to teach me the business.
One was a GM at Pastis, a very popular place. And another was a bar manager at a place called Rhone down the block, which is no longer with us. But great, great bar, wine bar.
Ultimately it took me about three months to figure out that they didn't know, they didn't know anything about running a business. And unfortunately, when we segue over to a part of the conversation about like why restaurants fail, one of the reasons is people are in our business for as long as they are, but they don't really learn very.
So as I think my father in law said to me some years ago, he said a lot of people have one year's experience 15 times and that is what happens in our business. So here are these two guys, they have 15 years experience, but they don't really know much. They know a lot about their segment of the business. One can run a floor, one can run a bar, no one knows how to run the operation, right? So I had to figure that all out.
I also had no plan whatsoever for what this was really going to be, what we were going to do with it. What was the future? What was the exit strategy? I figured most of that up on my second restaurant, which was actually in my second year, but we can get to that after. But that's how I got into fmb.
[00:08:04] Speaker A: So I love that you said this because I feel so strongly about what you just said, which is that I think we don't do a very good job of teaching people the business side of things.
We have managers, and yet they're not managing, they're just babysitting. I feel this. I feel this quite often, right? I turn in the lights, unlock the doors, check in the staff, do the, you know, do the side work, deal with complaints, you know, do the cash drop, lock the door, turn out the lights, and that's it. Yet that's 20% of what they should be doing. The majority of what they should be doing. What they do in every other industry is they their caretakers for the profitability of the business. Without profit, there's no reason for a
[00:08:44] Speaker B: business analyzing APIs all day.
[00:08:47] Speaker A: That's right. That's right. And especially in our industry where we say, okay, in business, they say, control the controllables. We have so many controllables, right? We live and die by our prime costs, right? Cogs and labor, which are so huge. And we've learned this the hard way over the last two, three years. What happens when those become unwieldy?
But I feel like we don't do a good job of managing that for the most part, across the board. And it's the biggest difference between restaurants that succeed and restaurants that struggle.
So talk to me about, then, your education.
Obviously, I guess you. You learned that in a pretty quick order, or did you sort of learn that the hard way? Did that come slowly? Talk to me about that.
[00:09:25] Speaker B: Well, well, I mean, listen, it surely came the hard way because I had a. I learned most things by mistakes. I did something, it didn't work, I tried something else. But in fairness, I had a strong business background. Again, I had run some fairly big businesses. I was an entrepreneur. I worked for as a manager for large companies. I understood business, I went to school for.
It was probably a little easier for me than it would be to be honest, for a chef or a bar guy or a floor manager to go into their own business. And as a matter of fact, that's what my partners were. It was much easier for me to adapt and figure out how to run the whole thing as opposed to someone that spent 15 years really doing a very specific thing. Running a floor, running a bar, whatever.
When I do open houses, I oftentimes talk about, I say, so tell me, what are the components of a restaurant? You know, what, what m up a restaurant? And inevitably, everyone will say, well, you got a front of the house, you got a back of the house.
Well, what about this little piece called operations that overlays it all?
Nobody, it's almost. If they don't understand that it exists.
[00:10:34] Speaker A: Yep.
[00:10:35] Speaker B: It's, you know, I, I say in again, in open houses and to students. And when I instruct, you know, a chef can be the greatest chef in the world, but if he doesn't understand the nuts and bolts of the business, and I can't tell you over 20 years how many chefs I've met that have no ide how to do costing, no idea how to cost out of this. And even if they attempt to do it, they're doing it wrong.
So, you know, we do a horrible job in our business of educating our employees. And typically, if you start out in the back of the house, you end up in the back of the house. If you're in the front of the house, you become a front of the house person. Every once in a while, people switch, but even when they do not, nobody teaches you about what holds it all together.
When I ran businesses, I, you know,
[00:11:20] Speaker A: what I realized at a certain point is that, and I'm sorry to cut you off, and I'll let you go back in just a second, but we don't teach it because I think a lot of people above us didn't know it, and a lot of people above them didn't know it. Right. I was talking to Josh Kopel, I had him on the show, and he said, here's why restaurants fail, because I learned it from some asshole who learned it from some asshole who learned it from some asshole all the way up. And I feel really strongly. I was in my. It was my third management job before I ever realized, before anybody. I always tell the story about how I, I was a service director and I was delivering the schedule. It's my job to hire, train, manage, do the schedules, manage that.
And nobody in my first two jobs had talked to me about a budget, about a labor budget. I just, I looked at the floor and I said, okay, about how many people do I need on the floor?
I. I did what I thought I was supposed to be doing. I did what I knew I was good at. And at the end of the day, it was my third boss who's then we've now gone on to open five different restaurants together. And he's one of my best friends. And he was like, what are you doing? I was like, what do you mean? I've got the schedule. He's like, you can't give me a schedule. I haven't given you a budget yet. And I was like, what do you mean a budget? He's like, what do you mean? What do you mean a budget? Like we have to. And it was, it was really eye opening. And from there on out again. I'm grateful that I learned it early enough in my career. But then every time after that, I was amazed at the people that I worked with that didn't understand that that didn't work. Think about tethering labor to revenue, you know, in the same way that we, and we have to, we live and die by that. So I just wanted to put that in there real quick.
[00:12:53] Speaker B: No, very true. And you know what I talk about often, as I say again at an open house, I'll say, who wants to be the smartest person in the room? You know, you'll get like two people that might raise their hand or something. But I say, like, all kidding aside, if you take the culinary management program, I'm not here to pitch, you know, the world advice or any other culinary management program. But you know, when you have that background, if you go then into a restaurant group, you probably will be the smartest person at the table. And if, when I say smartest, what I really mean is most informed. And there can be owners there, There can be VPs there, managers, regional directors, you probably know more than all of them because if they haven't gone through similar training, you don't learn it in the field. You learn a way of doing it. You may learn several ways of doing something because you work for several places doesn't mean it's the right way, it doesn't mean it's the most efficient way, doesn't mean it's the best way. And you may not have learned it at all. And oftentimes what I find is they haven't learned it at all.
[00:13:53] Speaker A: So, and I, and I completely agree.
What I'm interested in then is that how you, okay, you knew it, you knew that you needed this education.
But then as you open place after place after place because you've owned and operated more, many, many places, how then do you incorporate that? How do you teach that to the people you then hire and manage?
[00:14:20] Speaker B: Yeah, well, one of the things we used to do is at every Weekly meeting, we would have a manager, an assistant manager, a sous chef, and a chef. And we would go through a weekly P and L, and we'd go through every single line of it. And I wanted the front of the house to know what the back of the house does and the back of the house to know what the front of the house does.
And that kind of just like, happened over time. I mean, I probably didn't do that year one, but probably by year two, we were doing that, and we did it through the rest of my time. With a restaurant, with any restaurant, I always thought it was important for everyone to understand what's going on, what the bigger picture is, what our plans are, what our goals are, what are our KPIs, what does our cost need to be? What does our payroll need to be? Prime cost. What does it need to be?
Occupancy. You know, everyone.
No one spends enough time thinking about occupancy. Occupancy could be the greatest killer of restaurants. And the funny thing is, again, I, of course, knew none of this when I fried, went like, okay, I like that building. How much is it? All right, that sounds reasonable. I'll do that. But it can be the biggest killer of a restaurant if you don't plan that well. And we can talk about the things that I think are important to not have you be behind the eight ball from the day you start, because it's easy to be behind the eight ball for the life of that person of that restaurant, because you did some things wrong to start, and one of them is lease.
If you're smart enough to know that your occupancy cost should be, give or take, 10%. If you're smart enough to know that, then you'll go out and you'll figure out that a place can do a million dollars. And if it can do a million dollars, I can afford 100,000. And then you plan for that.
Now, ultimately, if you end up doing 500,000, well, what happens? Your 10% occupancy cost just went to 20. And guess what happens next? You're out of business.
So even though it only represents 10%, or theoretically or hopefully only represents 10% of your business, if that goes awry, and that's what happened when Covid hit. But when that goes awry, there's no fixing it. The fixing it is renegotiating with your landlord. I can fix my payroll. I can fix my cost of sales. But even though it's a 10% piece, I can't fix my occupancy All I can do is do more business or renegotiate.
[00:16:37] Speaker A: Yeah. So I love it because what you're bringing up is now this idea of forecasting, which I'm obsessed with.
I've talked about it a lot over this last year because again, it's something that I don't think anybody does.
I worked at a, at a restaurant group years ago and it was the first time I ever saw a really good budget meeting, which wasn't a lot of pointing fingers, which was proactive, which was. And, and one of the things they did is they sat down with, they sat down with the pro forma and they sat down with the P and L. Right. This is what we thought we were going to do. This is what we ended up doing. What did we learn from that? We spent. It was an hour long meeting. The first half was on last month, the second half of the meeting was on the month to follow. So we didn't even talk about the current, the current month. We just did a budget meeting. And I just thought it was so good. And so they really, really thought deeply about forecasting, really building projections, saying, okay, how much, how much money do we think we're going to make and where do we come up with those numbers? How did we come up with our educated guess? Because let's be honest, that's what a projection is. It's an educated guess. Talk to me about how you think about that because you're talking about projecting. Even when you're looking at, at leases, you're saying, okay, this space could do a million dollars. Why, why do I think it could do a million dollars? And, and how do you, how do you judge that?
Conservatively?
[00:17:55] Speaker B: Yeah. So I mean, basically without going to something, I would probably take a couple of hours because, you know, we teach this. But the short version is, you know, you need to know what your average ticket can be.
You need to know how many seats you can put in the place and how many times can you turn a table.
You need to, when you find that space that you think is the space you want, you know, can you do breakfast there? Can you do lunch? No, it's just a dinner place. Okay, how many seats can I have in there? Is there a bar? Is there a bar in the dining room? Okay, what am I going to do at the bar? Two drinks, a person, one and a half, maybe a nap.
In the dining room, we're going to have a starter, an entree and a drink. Okay, that's 25, 15 and 10. That's 50. I have an average ticket of 50. I have 100 seats. That's $5,000 a day.
That's time says $35,000 a week. Right? That's 35. That's, you know, download 2.2 million dollar play. Something like that.
37. Yeah, 3.7. Half of that. Yeah, something like that. Two and a half million.
So the thing is, and you have to look at it, and you have to look at it by day because you're not going to do on a Monday what you do on a Saturday. So you have to map it out that way. How many turns am I going to do on Monday? Maybe it's 0.25. What am I going to do on Saturday? Maybe it's three. And you got to do all that math. But simply you're playing with three numbers. You're playing with, how many seats can I get in there? How many turns can we do per day? And what's the average ticket? And you have to be conservative. And then at the end of the day you look at that and it's going to be on a spreadsheet or something similar. You look at and you go, is it possible, overstating Thursday, maybe. Let me tweak it down. The worst thing you can do is brag on a projection.
[00:19:51] Speaker A: Yeah.
[00:19:52] Speaker B: You always want to be conserved. You want to say like worst case. Not necessarily worst case, but middle to kind of getting close to worst case. Is this something I feel really comfortable I can do? And the problem is if you're wrong, you've made a lot of, if you're smart, you've made a lot of decisions based upon those numbers. So the first thing you've done is you figured out, okay, this is what I can afford on a lease. Right. The other thing that you figured out is you can spend about 50% of the money that you raise based upon, I should say, of the sales that you make in a projected year. You can spend 50% of that on your build out. And you should comfortably be able to get a return on investment in three and a half to five years, which is more or less reasonable in our business.
[00:20:40] Speaker A: Yep.
[00:20:41] Speaker B: But if you do that wrong, then again, that's another way you're going to be behind the eight ball from day one.
[00:20:47] Speaker A: Yeah, I like that. I like the good rules of thumb. And so when you talk about 10% occupancy costs, because I'm learning people think about this different. They think of rent, some people think of rent and all your utilities. How do you, how do you determine
[00:21:01] Speaker B: occupancy they do rent, real estate tax and water, sewer charges not. But not utilities. Not gas and electricity.
[00:21:08] Speaker A: Great. And 10% absolute max.
[00:21:11] Speaker B: Yeah, yeah. You start getting into trouble. You know, things. Things start to squeeze after you get higher than that because we know we're getting crunched for cost of sales.
You know, when I first started in this business, a prime cost of 55% was very doable.
[00:21:28] Speaker A: Yep.
[00:21:29] Speaker B: Today we've probably lost about 10 points on that. Now, a cost, a prime cost of 65% is reasonable and it's hard to do too much better, especially in the major metropolitan area. Now, this is where you might be able to get bigger revenue, but you can't do a hell of a lot better than 65% in terms of prime costs. It used to be 55. So we've lost three points here, four points there. And points matter. Every single point matters. Nothing I talk to students about. It's like when we talk about percentages. We talk about them like they're some arbitrary thing that doesn't translate to dollars. But it does. If you have a five million dollar business and you're off by one point, I love this because I'll talk about P. L. So I'll go, okay, so you did pretty good here. You missed this category by a point. You missed this one by a point. This, this, and this one by a point. That's five points. Well, on $5 million, you just took $250,000 that should have gone into your pocket and put it in some other pocket.
[00:22:29] Speaker A: That's right. That's right. I talked to all my clients about this. I said, we're so good about paying everybody. I said, do you ever miss your rent payment? Right. You pay your landlord, Right. They're like, yeah, of course. I was like, great. He gets paid. You always make your payroll, right? Yep. Everybody else gets paid. You pay your vendors, right. You get invoices, you get. You're paying everybody. And every time you go over exactly like you point, you're subsidizing the business.
So at some point, the business exists to serve us rather than us serving the business otherwise. It's just we're doing a lot of work to make not a lot of money. I agree. It's funny. I work with all my clients to really get that 60% prime costs. Most of the clients I work with are outside of New York City, so I have the luxury of a little bit lower rents and things like that. Sure.
[00:23:13] Speaker B: You can say I believe alone, but that's right.
[00:23:16] Speaker A: That's right. And then numbers, we end up working with are somewhere between 6 and 8% for that, the number that you're targeting. So this is, obviously, this differs based on your market and all of that. The end of the day though, you got to work it all backwards. So what kind of profit am I going to need to make or what I like to make or what's possible? And then you got to build your.
Talk about the buckets. You got to build your buckets appropriately. Okay, so I want to give the listeners a little bit more context. So you opened five ninth. Roll through some of the restaurants that you opened after that, because I'm guessing some of them are going to be ones that they recognize well.
[00:23:50] Speaker B: So, you know, it's interesting because when I opened my first restaurant, I had again, no idea for what that was really going to be. We didn't have a chef yet.
Took me 11 tries to get a chef. I picked the 11th person I met to be our chef.
But I didn't think about, you know, where would the growth come from? Could we expand?
Does it, does the, the brand have any staying power? I didn't think about any of those things. I just thought about, okay, I've got a restaurant. And I don't know what I thought I wanted to be when I first opened my first place.
But a year later, I was about to open up a cafe around the corner and I did this one a lot smarter. I was actually on budget and on time, which was pretty incredible. This time I put aside 400,000, but that's actually what I spent. So I did a lot better. And it ultimately it was going to be like a local bistro, American bistro kind of place.
And at the last minute my chef said, said, let's do a Malaysian bistro. This is literally about a month before we open.
And I said, what the hell is a Malaysian bistro?
A month later we had a place called Fatty Crab. And Fatty Crab became a really big deal in the early 2000s.
I would say in the first decade of this year, if we weren't the most written about restaurant group in the city, I don't know who was.
We surely would have gone head to head with David Chang.
You name, you name the restaurateur. I think we got as much press. I remember Mario Batali said something like, you know, every time those guys take a, they get written up, you know, so it was, I think it was actually like, you know, starting to piss people off. But I know by the time my press kit was about this thick, I, I kind of stopped collecting you know, press back then, it was a lot of paper, you know, so you would like. Literally, you'd get a press kit.
[00:25:46] Speaker A: It was a great restaurant. And I still remember the user experience when you went onto the website and you got the. Was it like some guy in a falsetto voice, right, Going, fatty crab?
[00:25:58] Speaker B: Oh, my God.
[00:25:58] Speaker A: Do you remember that?
Oh, God, I remember that. And I remember it because Frank Bruni talked about it in one of his reviews of you guys. And he's like, if for nothing else, go log onto the website right now. You're gonna thank me for it.
Today's episode of Restaurant Strategy is also brought to you by seven Shifts. Seven Shifts is a team management platform built specifically for restauran.
Great restaurants are built by great teams. And seven Shifts is your secret weapon to better understand your restaurant to hit labor targets and keep your entire team connected with drag and drop scheduling in app communication, task management, chip management, and more. It makes restaurant work a whole lot easier from back of house to front of house. Managers, franchise owners, and larger corporate teams. Seven Shifts has benefits at every single level. Plus, it integrates with the other systems your restaurant already uses, like your POS system and your payroll.
Turn your team into your competitive advantage. Restaurant Strategy podcast listeners get three months absolutely free. Get
[email protected] RestaurantStrategy that's the number 7s h I f t s.com RestaurantStrategy to get three months free and join over 30,000 restaurants using seven shifts today.
[00:27:13] Speaker B: So, you know, when I opened my first second restaurant, it was with more of a plan.
And I really think that people should be considering this. Like they. You should think about what is it that ultimately you want down the line. You might want to like 5 9th, which was actually a very hot restaurant, super popular in the beginning of the, you know, then 2004 actually is when we opened, super hot. I mean, the place was packed every night. It was, you know, good timing is very important, by the way. So being in the Meatpacking District from 2004-20, 2014 was about as good as it gets. It's gotten worse, but it was great then. But by the second one, I was like, you know what?
I want something that's expandable. I want to be able to break them out in other cities and other places.
I want something that's brandable. I want a name that's catchy. I want colors that pop. I wanted to have a feel when you get in there. And we did all those things and when we did them mostly right, and it did become a thing, you know, and next thing you know, we had three, we had four, we had five. We ultimately, I think, had six. At our peak, we. We had one in Hong Kong. We had one in the Caribbean. I was making all kinds of deals. We were doing licensing deals. We were doing partnerships. We're doing all kinds of things. Some were successful, some weren't, but everybody wanted to be in the fatty crab business. So it was kind of cool. It was a good run.
But that was. And then we. We did Fatty Q offshoots from there, which was an Asian barbecue collaboration with Southeast Asian Flavor Profile, you know, barbecue meets Southeast Asian. And again, that came from, you know, one night of sitting around, having drinks, and late into the night and going and talking. And then one of the people sitting around the table was a barbecue pit master. And the conversation became, you know, it would be pretty cool if I took my barbecue and then the skills that I have and married them with your Southeast Asian flavors. And next thing you know, Fatty Q was born. And it's funny how, like, you know, some things they talk about back of the napkin, like this. This was real back of the napkin stuff, except there wasn't even a napkin. You know, it's just a conversation. So.
So, you know, most of what I've done in my career has been Southeast Asian. You know, we did a project for the Sanderson Hotel in London. It was called Suka.
That was there for about five years. We did that in partnership with Jeffrey Chottarow.
We did a partnership with the Renaissance Hotel in Manhattan. That was kind of tongue in cheek called Chop Suey, but that was a Korean restaurant.
I had a Mexican restaurant called Cabrito.
Japanese. Two Japanese restaurants. One was called Bar Fry. Another one was called Ryu.
That one was an affiliation with the Kardashians. That was a management deal that was pretty crazy. But opening night was funny. But, you know, we've done a lot of things. And, you know, one of the things that I learned is if you make a mistake with your. With your concept, with your brand, figure it out really soon.
One of the most impossible things to do is change the public's perception of your concept once you've opened.
So it's like you. You really get one shot of doing that. Right. And I can give examples, but go ahead.
[00:30:47] Speaker A: Yeah, I do want some examples of that, because.
Yeah, give me some examples that. Because I want to dig deeper into this.
[00:30:56] Speaker B: Yeah, so there's a really, really good chef. He's actually out in Jersey now with his own own restaurant. His name is Josh decalis. Do you know Josh Duchellis is.
[00:31:05] Speaker A: I don't.
[00:31:06] Speaker B: If you look him up, he used to be the chef at a restaurant called Sumale in Manhattan. But he came up along the lines of my ex chef Zach Palacio, John Frazier, all those guys all came up around the same time. A lot of them worked for Rocco DiSpirito at Union Pacific years ago, early, like in the very early 2000s, maybe even late 1900s. But ultimately, this whole group of guys all came up together, and they're all incredible. Incredible Chef George Mendez, a bunch of guys that are all very, you know, well thought of today in the industry. But, so Josh Nichellis was one of them. I always really loved his food. He was one of the few American guys that did Japanese cooking, including sushi and dinner. It extremely, extremely well, very talented.
So he went to Japan and researched the concept on tempura and, you know, how to really make tempura perfect and super light and crisp and delicious and not greasy.
And he brought it back and, you know, I had originally looked at him to be my chef at Five Ninth, and he didn't end up getting the gig, but we stayed friendly. And ultimately I'm like, you know what? I really like this. Let's do it.
And we got together and we opened a place called Bar Fry.
And it was just meant to be a tempura bar with some really good drinks. And we. And because of, like, the thought of Bar and Fry, it seems kind of heavy. So we made the room really light and white and a beautiful blue color and big windows, and it looked great, the food tasted great, but ultimately the people didn't come.
And we had a very good PR firm, was the Bolts Company was our PR firm.
And, you know, we thought we had it all set up, but people, I mean, you know, people came, but. And again, you know, I've been lucky enough in my career that I've never opened a place that nobody showed up to.
I'm a strong believer in PR and marketing. I think you should hire people to help you when you open.
I typically had PR going just about every single month of every place I've had. I think it's really important to keep your name out there and keep it fresh and also kind of push you to keep doing new things that make it interesting. But anyway, so, you know, after a month or so and we got a review, I think we got like a one star New York Times review. And.
But the bottom line is people weren't showing up. Not enough.
So. And the feedback we were getting is, you know, I can't just come in and eat 10 tempora. And it was just too heavy. And, you know, whatever it was.
And so we started tweaking it, and we changed it, and we changed it, and within about eight months, it was a completely different restaurant. Honestly, it was some of the best Japanese food I had ever eaten. But guess what?
If nobody tastes it, if nobody comes in and tries it, no one's gonna know.
So the people that came in and gave us that first shot, they're not coming back for a second shot. And think about this. You know, we have whatever, 25,000 bars and restaurants in Manhattan. You go and have a bad experience, why are you coming back a second time? You got 24,999 other places to go to. I don't go back to a place that I had a bad experience at. So we couldn't change the perception of what people thought we were, even though we were entirely different. The food was delicious. We had a name. Chef at the time, didn't matter. And in eight months, I shot it down.
[00:34:40] Speaker A: So I think this is a really interesting line of conversation. So like I said, I want to dig deeper into this, because what's the. What's the takeaway here? Because I believe.
I believe what you're saying is absolutely true. And I think that's. I think there's something intuitive about that. And yet I think the very best restaurants that we have are iterative. They continue to grow and evolve. One of the things that I hated over the course of the pandemic was this use of the pivot word, right? That. Well, we got a pivot. When I think really what we should have been talking about was evolution. How a restaurant evolves, how we serve an audience in the way that they need to be served, right? That we. We can serve them in person dining. When they're no longer able to do that, we just evolve and we serve them in a new way rather than having to pivot an entire. An entire thing. It's one of the things that drove me crazy, because I think it's honestly something we should have been better at doing long before the pandemic. Not that it wouldn't have hurt.
[00:35:36] Speaker B: It would have.
[00:35:36] Speaker A: Sure.
So, but what's the takeaway there?
If you were in that position again two months in, three months in, would you just shut it down, or would you still go to the effort of trying to. To change the public perception?
[00:35:53] Speaker B: I think that with some better, you know. You know, you used the word intuitive or intuition. I Think to. Recently, I believe a lot in intuition.
When I feel something's right, oftentimes I'm correct, and it is.
But I think you have to go on a little bit more than intuition. And I think sometimes when I have failed in the past to some degree, it's because I did. Like, I had a gut reaction, I had an intuitive thought about something, but I really didn't flesh it out enough was once you dive in, you're in.
And as I said, you really can't. It's really hard to pivot. It's really hard to change someone's perception of your place, which isn't necessarily a pivot, but.
And you know, when Covid, it was a lot different, of course, because you were forced to do something different regardless of what you want to call it.
But in the case of opening up and you have a concept and you have an idea and you feel it's fairly flushed out, in my mind, you're better off cutting that cord sooner rather than later.
Changing the public's perception is almost impossible. You don't get a second chance. You really don't. So more pre planning. Maybe you're doing more tastings. Maybe you're taking over someone else's place. Maybe you're doing some pop ups. Think about the restaurant dame. You know, they started out doing a fish and chips pop up, you know, and that led to a couple of other things. And they were wandering around doing them in different places. Next thing you know, they're like, we got to open up a shop. Then they did something else that turned out to be sort of brilliant. And they said, we're not gonna open on Saturdays and Sundays.
Huh?
You know, Saturday's the biggest day of the week. And that turned out to be a smart move. Now they just opened the second place.
[00:37:46] Speaker A: But
[00:37:48] Speaker B: the point is, is you really have to do more research than I think one would think.
And you know, that that research comes down to like, is this. Does this block make sense? Sometimes, like, you go to Manhattan and, you know, on West 17th Street, a restaurant just can't survive, and you go to West 18th and they're all flourishing. Why? Yep, I don't know. But unless you spend enough time in that hood, you would never know that. And you'd find a beautiful spot on 17th and it would fail because there are places that just will fail, you know, because of just demographics, logistics, how the street runs, walking traffic, whatever it may be. But you've got to put that time in.
In Hong Kong, it took us two years to find our Spot because we just wouldn't allow ourselves to take a spot just because we wanted one. It had to be right, had to be on the right street, and we took the time to do it.
I mean, you know, a friend of mine spent more or less five years researching where he was going to put his pizza spot in D.C. and he found a spot in my mind in the middle of nowhere. Seemed like the worst idea in the world. It ended up turning into the and pizza chain. And, you know, he made, I don't know, 30, 40, $50 million. So. But he spent years figuring out what to do, how to do it, what, what would be the machinery he would use, his expansion plant, everything else.
And that research came back in spades because he put in the time to figure it out. If you don't put in that time up front, ultimately when you open and it does fail, you know, to some degree, there is no pivoting. There really isn't the pivot. You know, if you want to call it that or you don't want to call it that, what you really need to do is almost reinvent yourself. And that is you shut it down, you build something else back up. Hopefully you've done a better job figuring out what that neighborhood needs and what you do, what you can do well and find the right people, you know, all the things you need to do, you do it better.
But once, once that thing is going downward and you really just start, you're in your first year, it's not turning around in year two. I don't believe it.
[00:40:02] Speaker A: So I love that. So then let's talk about research, because I completely agree. I've said this on the podcast before, but I think there's a specific reason why restaurants fail, and there's a specific reason why restaurants struggle.
And I think we've sort of touched on, on both sides of it, and we, we lumped them both together and they're very different things. What you're talking about is failure, right? Which I think has to do with product market fit, not understanding what the public wants or needs, and solving a problem that they have have in a way that they're willing to pay for, right? And then reasons why restaurants struggle is because they fail. I think to really understand that path to profitability, that, that operational conversation of we know where we're going and then we're going to build a plan to get there. So I think we have to do a better job. And I'm certainly trying to do this one episode at a time of separating those two things.
[00:40:53] Speaker B: Sure.
[00:40:54] Speaker A: So we talk about failure and struggle as separate things. So you're talking about failure. And you brought up a really interesting idea of research, which I completely agree, having gone through business school.
One of my favorite professors there was the marketing research, the guy who headed up that program. And he said, you know, listen, you get better answers by asking better questions. And he basically, for him, all of marketing boiled down to asking better and better questions. And so talk to me about.
You've. You've done some things right, you've done some things wrong. And I would imagine you went into it with that same. You are. You. You went into it. You went into fatty crab the same way as you went into bar fry.
So talk to me about what you've learned since those couple of experiences and talk a little bit about. About research.
[00:41:44] Speaker B: Yeah. So, you know, in the marketing world, as you would know probably better than me, is, you know, there's something called udd, right? Unique, desirable, deliverable. You know, something could be unique, and that's a good thing.
It could be deliverable, but it may not be desirable.
You might be able to deliver it, it might be different. It doesn't mean anyone wants it. Bar fry was that. Bar fry was unique because no one was doing the tempura bar here. It was deliverable because we were able to do it, but it wasn't desirable.
So, you know, it's an important component. So you have to over and above other things we got to think about. And by the way, it doesn't have to be unique. It has to be deliverable and desirable. There should be something that, that, you know, makes you stand out from the crowd. That the unique part, I guess. But let's face. You can open up five Italian restaurants on a block and they may all be successful.
So, you know, I believe you've got to look at things one of two ways. One is you go the Italian restaurant mode and you go, okay, everybody wants spaghetti or everyone wants pasta. And I'm going to try to take a very small piece of a very large world.
Or you say, I'm going to open up a Malaysian bistro and you hope to get a large segment of a very small piece of the piece.
And I've always done the latter and have never done the former.
And I believe it's easier to be unique, deliver hopefully desirable, and go that route than try to compete with every Italian restaurant on the block, because I'm not sure how to find that uniqueness. Okay, we hand pull mozzarella or something. You know, I don't Know, but it's like, that's a tough one.
But I. I completely agree with you of a smaller pie. And you just have to make sure that there is a piece to that pie. Like, there was no piece to.
To tempura. Nobody wanted it, you know, so. And I don't think it's that we did poorly. It's just we misread the market. We try to take something from.
From Japan that was very successful there, and they do it incredibly well. And the tempora that we have here and the tempora that we planned on having at that time was so much different than even what we have here today. Our tempura kind of sucks. It does.
But what we did was much better, but it didn't matter because nobody cared. So we didn't put enough time and effort into figuring that out.
And you have to have a feeling because, again, we did the same thing with fatty crab.
We didn't know. And fatty crab, over time, evolved into Southeast Asian. It started out, it was very specifically Malaysian, and then it became Malaysian, Singaporean, Indonesian, Philippine, Vietnamese, Thai.
And so it got a little broader. Initially was very niche driven, but the flavors were unbelievable. And while we weren't. We didn't really go out of our way to appeal to the American palate. Believe it or not, we were trying to stay very true to what it is, but the colors were a little different. The colors were a little brighter. We Americanized it a little bit in that for the American palate and that we toned down the spice a little bit. But for the most part, we stayed try and true to it. And in our tastings and in the feedback we got, and, I mean, we sat down at a table before we opened, and we had Dana Cowan at the table, and we said, do you think this is going to work?
And she loved it. You know, and, you know, it just happens, you know, I mean, we had some other connections to the industry, people that should know and would know what was going to work and what was. And then we ran it, and we did a whole bunch of tastings and ran it by a whole bunch of people. And it took me a long time to even figure out, you know, who we were going to put this thing together with. And we came up with this unbelievable crew of people that ended up growing and evolving with us. But, you know, we. And the other thing we did is we went out of our way to, you know, when we first opened five ninth, we didn't even know what the name of the place was going to be until, I don't know, a handful of days before we opened it. Let's make it the address.
Yeah, you know, fatty crab. There was a lot of thought into, you know, so what, what were we all about? We were like kind of these, at the time, we were kind of these cool, playful guys who took food very seriously but wanted to have fun with it. And if you look at our logo, it was like bubble letters, you know, and it was bright yellow and the background was a bright red. And so it was, it was playful and the, the, the menu was, was interesting and the play. And we did fun things. We did, you know, what did we say? Recession special. So we were serving PBR with a shot and I forgot what else. Whatever it was. But it always, it all tied in very closely to the concept. The concept, the brand, the menu, everything held together.
And we put in the time and the effort to make sure that that worked. And we hired some really talented people to help us from a marketing perspective, from a PR perspective. And it's really important.
So I'm jumping around a little bit here, but it's really important to get the right marketing people and the right PR people. And what's most important about both is they have to get you, they have to like you and they have to understand your brand.
And I can tell you we had a situation where a couple of years in the fatty crash, we hired a woman who became our PR person for about a year.
And it turned out like she hated everything about what we were doing. Like it just like we would do a fatty fest once a year and we used to bring people upstate to a farm and we had this party of a couple hundred people. And at the time we probably had 50 employees or whatever it was locally and it was a party. We were, you know, hanging ass animals and, you know, big fire pits and, you know, and she was like completely grossed out by the whole thing. And I'm like, this doesn't make any sense. This is the, this doesn't, you know, that doesn't work.
[00:48:13] Speaker A: Yeah.
[00:48:13] Speaker B: So they have to get you. It's really important. The same thing with. When we went to Hong Kong, our partners there, they hired a PR firm who is really big in the nightlife and the debut. Not debutante, the, the nightlife and the.
I'm trying to think of the right term for this group of people, but it was all kind of like the people that were, they weren't really foodies. They were more like they were going to stop off once they were going to get a glass of champagne and Move on to the next place. They were like the real high profilers and the people that wanted to be seen and be seen.
And ultimately, that's what happened. They brought in all these people that would. That came once, and they were the beautiful people, and they're all dressed up, and you're walking in a fatty crab. Fatty crab is not that plant. You're gonna come out, and you're gonna smell like fish, you know, so now they're gonna go out clubbing. It was like a nightlife type of scene, and that's not who we were.
So ultimately, the PR team was completely wrong for us. They couldn't get the fact that we were looking for the foodies and the people that wanted the more interesting stuff, and we're really coming out to eat for the night and drink, but not going to a club after. Like, that wasn't our scene, you know, and so that. So the concept didn't fail, but that relationship with that PR team did. And, you know, I fired them about maybe a year in, but so it has to be right. That's really, really important.
[00:49:46] Speaker A: I'm still trying to picture Dana Cowan. For those of you who don't know who Dana Cowan is, you can Google her. She was about as important as you could get in the food and food scene, the food and wine magazine, all of that. I'm still trying to.
She's fairly buttoned up. I'm trying to picture her getting as messy as I remember getting messy at all my meals at fatty crab, because they were some messy meals, and I would love that. She certainly has her finger on the pulse and certainly set the trends.
She is the.
The Anna Winter of food for. For about a decade, for sure.
[00:50:20] Speaker B: Yeah.
Yep.
[00:50:22] Speaker A: Talk to me about marketing, because marketing has changed considerably even since. In the time since you were opening those restaurants. How do you think about marketing? How did you think about marketing back then, and how do you think about marketing now?
[00:50:35] Speaker B: You know, the.
The honest answer is, when I first opened, I don't think we thought about marketing. We thought about PR as an aspect of marketing, but we didn't talk about. We really didn't think very much about marketing. Our first restaurant didn't even have a name on it. I mean, so we were called Five Ninth, but there was no name on the door.
It's a townhouse. It looked like someone's home.
And it was kind of like the cool thing back then of like, see if you can find us, you know, and ultimately, people would walk up the stoop and open the door and like peek in, like make sure that this was the place that they were looking for. But for the first several years, I mean, we did absolutely, we had a PR firm, but we did nothing from a standpoint of real marketing.
You know, as time went on, we got a little bit better at that. And you know, we did some internal things and some external things and we got, got involved more with community. So we did some community marketing and did a lot of give back stuff.
But, you know, it took a while until we really understood number one that, you know, PR isn't necessarily marketing. They, they kind of come together but, you know, they're not this one and the same.
And you know, it took us a couple of years to understand that, you know, we should be doing other things. Then we started getting into a lot of branded stuff and we would do a lot, I would always buy, I would buy these incredible, these really cool T shirts. And the plan was, you know, we'll sell them for $15. I ended up giving them all away. But like, to me the best advertisement in the world is someone walking down the street with a fatty crap T shirt on. And so, you know, we got involved in the hats and we got involved with shirts and all that kind of stuff. And we did, we did like, like various, like loyalty type programs. And you know, I mean, we were very branded. I mean everything, you know, was, was red, the yellow, the, everything we did. And, and it really did pop. And you know, thankfully we didn't have a hard time getting the word out. I mean the people just came and like, to the like way beyond my wildest, wildest dreams or imagination. We had people that would wait 3.
There's no waiting room in the original Fatty Crab, no waiting area, but would wait for three hours to get in the door. So, you know, it took us a couple years to understand that we really should get our name out there and we should work towards building a bigger brand and a better brand and keep, and keeping it, keeping that concept and brand tied together and not allowing us to get like for instance, like we wouldn't take a space in a storefront because that just didn't, didn't fit the brand.
It had to be like, you know, I mean, there were storefronts per se, but they had to have a certain look to them. We wouldn't, I should say we wouldn't go to a new development and in Hong Kong, since there was a lot of opportunities and actually much better opportunities from a financial perspective to go into these new developments. But like, we weren't like, we couldn't go into these bright, shiny new places that are all metal and glass and like, that couldn't be a fatty crab.
So, you know, we came to understand, you know, that the importance of branding and keeping the look the way it should be and the feel and the menus tied into it and the logos on the menus and the colors and, you know, we had these bright red binders that held the, the menus together. Everything.
Everything tied together.
And we spent a lot of time trying to make it look like we didn't spend a lot of time doing that.
[00:54:22] Speaker A: I love that. So it's really interesting is that you've talked a lot about pr and I think that's probably a little bit of a symptom of being in New York City. I think you really, in order to cut through the noise, you really do need good PR companies to cut through and build where they already have established relationships. What one of the things that's really interesting that I've just noticed.
[00:54:42] Speaker B: I apologize really quickly.
One of the things I've changed substantially, obviously, and then I'll have you go back to your question, but sure. Is of course social media. Social media didn't exist when we started.
So that's a whole other game that if I was opening today, I would look at completely differently. And of course, I have over the last, let's say 10 years, but not 20 years.
So again, a big game changer is social media. Not that it's the end all, be all, but it's a good supplemental thing to add to your. And I should mention, by the way, of course we had email lists and we did email blasts and all that stuff as well. Yeah, sorry.
[00:55:22] Speaker A: Well, what I was just going to say, and that sort of feeds right into what I was going to say, is that PR so often deals with the gatekeepers, right. Is that you need people. Like there are certain people who will write about you or whatever. And I think over the last 10 years, to your point, with social media we really get like the democratization of food. I mean, I can draw a direct line from when does Yelp launch? In 2008 or nine, something like that, you know, but now Yelp and TripAdvisor and Foursquare and now Google reviews and Facebook reviews and now all of social media and TikTok and that we have influencers there.
You can be successful without a good review. You can be successful without really getting a lot of, of, of natural press attention. And I think that's true in big markets and in small markets. And so it really is about, I think, about restaurants building relationships with their customers one to one, one at a time, one email at a time, when one phone number at a time. And that strikes me as a really cool development like, like what a cool time that we are at in history, in the history of food, that we can really build those relationships one to one. Now we've got the technology, we've got the tools to be able to do that. That seems to me to strike me as the, one of the biggest changes. I've been in this industry for 22 years. And, you know, the restaurants I opened in 2003, we did it differently than in 2009, than in 2014. I mean, it's, it's been incredible to see. And the way we marketed restaurants 15 years ago and 10 years ago is wildly different than what we do, what we do now. The conversation has changed.
[00:57:00] Speaker B: Well, so, you know, you bring up a great point, and that is, you know, the role of PR has changed over the years. And way back when, it was honestly just about the only way to go if you wanted to do something different than win over one client at a time or one customer at a time. And as much as I love that, it scares the hell out of me. I want to open my doors and have people waiting in line to get in, you know. But, you know, back then, a New York Times review changed your world. I mean, changed your world completely and maybe to the tune of double or triple the revenue for a year. Like that much. Yeah. And then there were all these. So there was the New York Times, then there was New York magazine and TimeOut, and, and even, you know, to some degree the Wall Street Journal and Bloomberg and other people that did write ups. But, but way at the top was the New York Times and then everything else, with maybe the closest second being New York Magazine and TimeOut, when TimeOut ultimately came out. But you know, Rick, for a long
[00:58:11] Speaker A: time, about nine years of my time here in New York City, I own, opened restaurant after restaurant after restaurant after restaurant. And I built a really good living for myself and a name for myself because I knew who all the reviewers were. And so I opened all these really high profile properties one after another.
I still close my eyes and see Frank Bruni walking in the front door. That there's nothing like. And for a long time there was nothing like the New York Times review. And I will say the very last restaurant I opened, this was in 2000, 2012, I want to say.
And Sam Sifton was then the reviewer for the New York Times. And I was brought in to get us through the review period because I knew.
Yeah, I mean I used to, that's what I did. And then I was there to manage the crush afterwards. And I'll never forget it. Every restaurant. I opened eight restaurants before that point. All, you know, to New York Times, Times reviews. This is the ninth one. And I said, okay, here it is. Pictures are being taken. We know it's coming out tomorrow, Tuesday afternoon. Famously, the review always hits at like 3:30, 4:30, something like that. So we know what it's going to be in the morning when it hits on in print. And it was a great review. It was a solid two star review, which is exactly what we wanted. And we got up and we manned the phones. I got there at 8:15 to make sure that I could man the phones to.
We turned on the phones in the morning and nothing happened.
And it was really as things, it was a real turning point because it was a big name attached a big opening. It was. And nothing happened. And it was, I don't know, a week or two later I went down to talk. It was a hotel restaurant. Talked and I pulled the GM of the restaurant, the GM of the hotel and all this. And I said, I've done everything I know how to do. This is what you brought me in to do because I was a maitre d back then. And I said, let's start talking about an exit strategy because you don't need me on payroll to do something that I'm not going to have to do. And it was, it was such a strange conversation. But that was really as social media was taking over as others sort of. I mean that was the height of blogs. That was, you know, all of that.
It was changing and I could feel it. And I can remember the day when I thought, oh, this is different. A rave review in the New York Times doesn't get you what it used to get you.
[01:00:29] Speaker B: Well, yeah. And so, you know, the other thing that you may recall is way back when the New York Times used to give you about three months to get your legs underneath you. And then they'd come in, they'd review.
I was reviewed in every single restaurant open as well. I have, I think, 12 New York Times stars and I appreciated every one of them, I promise you. But it's, you know, today it's not three months anymore. Now it's like six weeks, maybe even less.
And why is that? Because they have competition now. They don't want to be the eighth person to, you Know the eighth media group to write about you. It's all news already, you know, eaters writing about you two days later after you're opening, you know, so they've been forced to come in sooner and they have so much more competition now.
And listen, you know, the average 30 year old today, I don't even know they read a New York Times review.
So you know, it's, it's importance has lessened considerably. I know when, when I was in Hong Kong, it's very different. Even like back then, I forgot when we opened in Hong Kong, I'm going to say around maybe 2011, but.
2010, 2011. But the point is the, there, there's so much more media, but there's no media that stands above everyone else. There was I think something called the China Sun Times maybe or something like that. I don't know, I can't remember what it's called now, but they were kind of up there. There was like two or three that were a little bit above everyone else, but for the most part you had about 200 reviewers that all were of like almost equal status.
So what you would do there is you would literally do like a review party party and you would invite in like 50 media people at a time to come and sit and dine with you and they'd write whatever they'd write, but it almost didn't matter because like no one had the effect of like the way a New York Times would in the past. So like I didn't even know what to do with that or how to do it. And you know, the other thing that I've learned over the years is while there's a cumulative effect to all these write ups, again, you know, know my 11 inch thick, you know, binder of, of write ups. What I learned is all together they may add up to something, but individually, you know, you get a mention here and a mention there. They did almost nothing for you. It was imperceptible, the difference that they made. Cumulatively I think they did. But I really think like word of mouth works better. And ultimately, as you said, kind of, you know, a diner comes in, has a great experience, tells 10 other people, they come back and you talk about the marketing funnel and ultimately, you know, you get them to be, to be your PR in essence, you know, that's right. And your advocates, as I think we call them.
[01:03:19] Speaker A: Yeah, listen, and that's really clear, that hasn't changed. That's been the same for thousands and thousands.
[01:03:25] Speaker B: Not change. And it's still the best and cheapest way. That's right. And vice versa. And this is why, like, listen, I always talk about, you know, you want to talk about how you fail if you can't control the people behind your bar, if you can't control your people at the host stand, if you don't have the right people there, they can destroy your business like that.
I went into a restaurant of an ex ICE graduate, and I was actually going to a restaurant around the corner, but I was early, so I'm like, let me stop in and have a drink. And I stopped in and the place was empty. And there's a. A bartender behind the bar, and I order a drink, and I'm like, hey, by the way, is the owner around? You know, I'm from ice, I'm a dean, blah, blah, blah. And I saw this conversation. This guy couldn't have been less interested.
And it actually became uncomfortable because it's like it was my. Me and my wife, but we're the only two people sitting there. And it's like, it was just, like, weirdly quiet. And it was clear that, like, he had no interest in. In chatting with us whatsoever.
And we actually, we just said, okay, we'll take a check. And we left. And I remember I actually reached out to the student, the ex student and now entrepreneur, and I said, listen, I just want to let you know because, like, it doesn't matter to me. I'm just. If it was my business, I would want to know. This guy is turning off patrons. It's just. This is not working for you. And his answer was he's really usually very nice to people and kind of just like, cut me off. And honestly, a couple of months later, he's out of business and in his second place, went out of business.
Now, is that because of this bartender? I don't know. But, you know, you get enough. I can tell you within five minutes of walking into a restaurant, if it's number one, well, run. And number two, within another five minutes, I can tell you whether I'm ever coming back again. And I am almost always right.
[01:05:18] Speaker A: So I love this. We're coming to the end of our time here, and I'll be respectful of your time, but this is a good place to end here. So talk to me about.
We already talked about places that are failing versus places that are struggling.
Places that are failing. You already sort of weighed in on that. I want to talk about places that are struggling because you've done a lot of consulting.
A couple of quick pieces of advice for the listeners.
If the place is struggling. What are the, the two, three, five things that you would do immediately to sort of right the ship?
[01:05:51] Speaker B: Well, I mean, you know, it's, it's, you kind of have to be like, as a consultant, I have to be there and start to figure out what the problems are because there could be so many. But you got to look at price point. Is it right? Is it competitive?
You've got to look at who's at the front, who is greeting people when they walk in the door. Because there are a lot of people that are figuring out like me, as soon as they walk in, this doesn't feel right and they're ultimately going to leave. Who's at your bar? Did they greet you? Did the person at the front greet you? Those are really all important things.
Your web presence has never been more important than it is today. Why is that? Because people don't shop around anymore by walking the streets and going, that looks like a nice place, I'm going to walk in there. Do you get walk in traffic? Sure. But you spend way more time whether it's going through Resi or opentables, whatever it is, and you're looking at everyone's websites and everyone's menus. And if your menu doesn't look good, if it doesn't look appealing, if the price point isn't right, I could spend a whole hour on menu engineering. But, but the point is that has to be approachable, that has to be friendly, it has to be user friendly.
It's got to entice you to come in. The look and feel of the place, does it feel warm? Does it feel inviting? Or does it feel like the kind of place you want to get the hell out of? But the way we treat people, the way the place feels, does the brand hold together?
It's kind of imperceptible to the diner. It's not like we walk in and go, hey, they're well branded. But you, but, but there is a feel and it has to hold together. And if it doesn't, like, I'll notice it immediately if it does. The whole place doesn't hold together. The menu doesn't look like the concept, look like the logo. Like if it doesn't all fit together, then that wasn't very well thought out. I wonder how well thought out their food is, you know, and usually it's not going to be that good. So, you know, those are kind of the things you learn look for. Does the brand and the kind the brand promise, as we say, you know, is there a Brand promise. And do they live up to it, right?
Absolutely.
Who greets you? You know, I mean, the fact that, like, we can't remember to smile when people walk in the door to greet them, to say hello. The bartender should always pick up his head, give you a wave. At least you can tell when a bartender has no interest in you whatsoever.
I don't want to be there. I'm not coming back.
So right off your restaurant tour, you're trying to do all the right things, but you got people in your own organization working against you, and it's a real tough one, because those people have to be the right people, because if they're not right, you are going to fail. You'll ultimately fail.
[01:08:39] Speaker A: Which gets back to this conversation of culture, which we haven't really even touched on today. But it's so much of a key what we do. We think of the best restaurant groups do culture really well. So that hospitality is just in the bones and the blood.
I had a chance to sit down with Gavin Case, and we were talking about, obviously, he comes from the Dynex Group, Chef Danielle Boulud. And you know, that culture and how he took that and translated that now to his own restaurant group out in Minneapolis.
[01:09:07] Speaker B: Culture is everything.
[01:09:09] Speaker A: Culture. Culture is everything. I always say we're creating evangelists and ambassadors. Ambassadors. Right. Event. We want to turn our. Our guests into evangelists to go out and spread the good word about what we're doing. That's how a church grows, the same way a restaurant grows. And we have to create ambassadors.
Our staff are ambassadors for us because we can only meet so many people. I always say that the worst bus boy. The worst bus boy you have, or the worst. The surliest bartender you have is going to have more contact with your customers than you can ever hope to have in a given week, which tells you to.
To your point, to put a period on your point.
[01:09:42] Speaker B: It's a weak link kind of thing. You're only as good as your weakest link. And the toughest thing that we do in our business is that we have to do this perfectly well every single day. It's like a Broadway play. You can't go to a Broadway play and, you know, the lead actor is having a bad night, and they just totally bomb. You know, it's like. That doesn't typically happen. It almost never happens because they know they have to have to be on their game every single day. Well, we have to be on a. We have a host that's having a bad day. You may lose 10 customers yeah, bartenders are having a bad day in a busy place. You may lose 20 customers.
[01:10:20] Speaker A: Yeah.
[01:10:20] Speaker B: And guess what, it's really expensive getting customers, so.
[01:10:24] Speaker A: Yeah, for sure. Listen, Rick, I appreciate you taking time out of your day to sit and chat with us.
Where can people go to learn more about you and the things that you're working on?
[01:10:35] Speaker B: Good question.
Well, I guess you know I'm very active on Instagram. I dine out a lot. If you want to know a place to go, one of places to go in Manhattan to dine or actually around the country and maybe even the world.
NYC Pro Eater is my IG tag and you can also find me on LinkedIn. There's a bunch of like my bio information and you know, of course I'm an active consultant over and above other things. I'm happy and I'm just happy to strategize with people in general. I love the business. This was a blast. I mean, I guess we took an hour. It felt like 15 minutes to me. I could have talked for five more hours. So this has been great. Thank you for having me.
[01:11:13] Speaker A: It's certainly, it's my pleasure. I'm going to leave you, give you one last chance. Leave any words of wisdom to the audience here. You've got an audience of mainly independent operators from all over the world. World, really. We're In, I think 42 different countries last year. So any last words of wisdom for them before I let you go?
[01:11:31] Speaker B: You know, stay on brand, make sure everything holds together day in and day out. Know that you're, you're starting the show all over again. You've got to bring it every single day.
Plan for the future, think about your future, see where the trends are going and move towards, well, not necessarily move towards them either. Stay the plan if it's the right plan or adjust if need be. But always stay on top of what's going on out there.
[01:11:59] Speaker A: Love it. Rick, thank you for taking the time. I really appreciate you being here.
[01:12:02] Speaker B: Thank you, Chip. It was, it was a pleasure. Have a good time.
[01:12:05] Speaker A: My pleasure.
Again, I want to thank Rick for taking time out of his day to sit and chat with me. As always, all the links are in the show notes for our sponsors and anything we talked about here with Rick today. I appreciate you guys tuning in. Appreciate you being here. I will see you next time.
