[00:00:00] Speaker A: The restaurant industry is difficult and 2024.
[00:00:04] Speaker B: Was one of the most difficult years that I've ever gone through.
[00:00:07] Speaker A: And it seems strange, right, because all the, the recessions we've gone through, the pandemic, all of that. 2024 was a unique confluence of world events and macroeconomic whatever. It was a very hard year. One of the questions I get a lot or I've gotten a lot is funding options and alternative funding options. In In Kind is a very unique funding option for restaurant tours to get access to good capital. It's a really cool product of consumer facing and merchant facing. I've got the founder on the show today to talk all about what in Kind is, why it matters, and why it might be right for your business. We talk about a lot on this episode.
[00:00:49] Speaker B: Not just what in Kind is, but.
[00:00:51] Speaker A: Sort of the future in the industry, the future of funding this industry. So much great stuff in this 45 minute conversation. Don't go anywhere.
[00:01:00] Speaker B: 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.
[00:01:34] Speaker A: This is Restaurant Strategy, a podcast dedicated to helping you build a more profitable restaurant. Each week we've got two episodes, operations on Monday, marketing on Thursdays, all geared towards helping you build a more profitable and sustainable business. What does that mean? Making sure that you make money from your business and you've got the time to be able to enjoy that money. What you do is way too difficult. What you do is way too important to not make money doing it. I know. It's how so many of you go to support your families, put a roof over your head. You put food on the table. There's no reason why you should struggle. This podcast, everything I've built within the Restaurant Strategy ecosystem exists to help independent restaurant owners make more money doing what they love to do. If you get any sort of value from this episode, I want you to do me a favor. Go leave us a review on Apple Podcasts. 5 stars. Let people know why you love it and if you need to level up. If you were looking for more hand holding, more guidance, that is what my mastermind is all about. So I run something called the P3 mastermind, where I work with owners and operators from all over the world to help them increase the profitability of their restaurants. We talk to you about what that is. The Best way to get started is to grab some time on the calendar. RestaurantStrategyPodcast.com Schedule. The call's absolutely free. It's 30 minutes. We get to learn more about you and your restaurant. You get to ask a lot of questions about what the Mastermind is. Go do that if you are ready to level up and then make sure to come back. Come back because this conversation is going to be good.
What's the food cost for your third best selling entree? With Margin Edge, you can know instantly. Margin Edge is a complete restaurant management software that I recommend to all of my clients looking to improve their profitability. And of course, that's what we're all about. We're all about profitability. With Margin Edge, you just snap pictures of your invoices and get real time data for every area of your business. You can see plate costs in real time. You can get a daily P and L. Your inventory count sheets are automatically updated. It saves you a ton of time and it lets you make informed decisions. Right? Better decisions come from better data. My client, Gather Brewing, right. They've been a member of the P3 mastermind for a while. They started using Margin edge and within one month their food costs went from 38% to 28%. Literally all the work we did was made possible by the software Margin Edge. That is incredible savings. That 10% dropped straight to the bottom line. There's a reason that I recommend Margin Edge to all of my clients.
[00:04:08] Speaker B: It's because I know it works.
[00:04:09] Speaker A: If you're interested in learning more or want to see how Gather brewing went from 38 to 28% food costs, head over to Marginedge.com chip again. Marginedge.com chip and yes, that link is in the show notes.
[00:04:26] Speaker B: All right, so my guest on today's episode is gentleman named Johan Munasinga. He, among many other things, in addition to being a restaurant owner and operator, he is also the CEO and co founder of a company called In Kind. I'm going to let him explain in his own words what it is and we're going to dig into that and so much more. Johan, welcome to the show.
[00:04:48] Speaker C: Thanks Chip, so much for having me. Excited to be here.
[00:04:51] Speaker B: I appreciate you making time to be here. So let's go back to the beginning. I don't like spend a lot of time talking about the past. I think it's more interesting talking about the present and most notably the future. But talk to me about how you got wrapped up in this industry because I think you took sort of the side door or the back door into this. So. So walk us through how you wound up here.
[00:05:12] Speaker C: Yeah. So my background is in tech. I had a tech company and when I sold that, I love food. So over 10 years ago now, probably 12, 13 years ago, I started investing in restaurants. I was living in Washington D.C. and I invested in about 20 restaurants. Friends are opening restaurants. I thought, hey, this would be cool to be a part of.
And I realized that financing restaurants was tricky from the investor's perspective and also from the owner's perspective.
So my husband Andy, he was a lawyer. We got married. We decided to open the first restaurant incubator in the country. So we brought in chefs. It was this 18,000 square foot spot in D.C.
we had two restaurants, a bakery, a speakeasy, a wine bar. And we brought in mentors like Jose Andres and Michael Babin from Neighborhood restaurant group in D.C. and we were there till two in the morning every day for five years, learning about restaurants, teaching about restaurants, bringing in mentors.
And we realized that restaurant finance needed to be improved. And so we figured out a clever way to do that. And 10 years later, I think we're the biggest independent restaurant finance company or finance company for independent restaurants. I'd love to tell you guys all about that, but at the end of the day, to me, restaurants are all about, these are businesses and the people that own and operate them are passionate about hospitality. And we wanted to give them a leg up so that they could take money home and you know, pay for their kids college because that's, that's what should happen and create a financially sustainable model. So thank you for having me, Chip.
[00:06:52] Speaker B: No, I appreciate it. Okay, so you did this thing that my brother lovingly rails against. You basically did it like a yada, yada, yada. One thing led to the next. And so I'm going to go back and I am going to dig a little bit into that because I think that's some of the really interesting stuff. But I do want to pause real quickly and say we are in total alignment. The reason that I have a business, the reason that I get out of bed in the morning is to help independent restaurant owners make more money doing what they do. Because working 60, 70, 80, 90 plus hours a week to take home 6% is insane to me. What we do is way too important for raising tax dollars for the state and providing jobs and providing centerpieces to communities.
And it's way too hard. We certainly know how hard it is. Way too important, way too hard to not make money doing it, which is Basically, I think what you were saying there, okay, so had a tech company sold, the tech company start investing in restaurants, you started talking about there that you realize it's tricky from the investment perspective and it's tricky for the owner's perspective. I obviously know that. I think that will resonate with a lot of people listening. But specifically what were you talking about? What do you see as the biggest challenge in, in that relationship?
[00:08:06] Speaker C: Yeah, so somebody told, one of the mentors, told me this early on when we started the incubator. He said the, the issue with, with the number one reasons that restaurants close is because of the capital structure in which they raise their capital.
And I was the traditional equity investor, I was the guy saying, okay, I'm gonna open a restaurant. Great, here's a check. You know, you go and raise fifty, a hundred thousand, two hundred fifty, whatever the check numbers are from your friends and family and you open your restaurant and in, in fairness, what you do is you pay them back out of profits. You know, you give them, typically it's 100% of profits until they get paid back and then they have this flip, you know, in the industry. And then the owner is supposed to, to make the majority of the profits. And every single restaurant pro forma you've ever seen says it's a three year payback period and a 20% IRR to the investors. And you sort of build into that. And that's assuming to what you just said, chip, that you're going to make 15 to 20 something percent profit margin. And like you said, most restaurants make 6% profit. And if you make 6% profit and you're paying all that profit to investors, the problem is you never make any money. Right? So you're working for years and years trying to pay back the investors. And in fairness, the investors should get their money back. You know, so they're not doing this some malicious on their end. It's just that the restaurants aren't necessarily being run in a way that generates the profits that the owner expected. And so after four or five years, the owner who's been there working 60, 70, 80, that would be on the, you know, that would be fewer hours than most owners in restaurants work, right?
[00:09:40] Speaker B: Yeah.
[00:09:41] Speaker C: And they're like, well, we're never going to make money because we're never going to pay back the investors. And so they give the keys back to the landlord when they can get out of the personal guarantee on the lease and they go and do something that actually makes some money. And I think that was, that's the problem, and there's no bad guy in that scenario. You know, the investor needs to get paid back. The owner is working really hard. It's just that the restaurants aren't generating enough profit to pay back the investors. And that's probably 90 something percent of restaurants.
The others that are making a lot of money, what turns out then is, well then the investors are getting paid too much. We have a friend who has a restaurant. He raised $3 million in equity from friends he opened right before the pandemic. He's returned $9 million his equity investors since then. And he's like, well that was great, they got paid back. It's great they got a return. But come on, some of that money should come back to me, right? So I think it's a hard structure.
Other ways that people open restaurants, as your, as your listeners will know, you know, banks, very, very hard, very hard to get loans from banks. SBA is there, but usually you have to have assets or property.
And so it's really difficult to finance restaurants without equity investments. And landlords is a great way to do it. You know, get as much ti second gen spaces, et cetera. But fundamentally we wanted to solve that problem. How do you, how do we make it so that restaurant owners get to keep profits in their pockets and then they don't want to close their restaurants?
[00:11:14] Speaker B: Okay, so somewhere along the way you started opening your own restaurants.
So talk to me about how you specifically took some of the learnings that you just sort of outlined and applied that to the structure and the operation. As you saw, because you don't have one. You don't, you've what, five restaurants at this point? So you're doing something right.
Share some of those secrets. What did you. So if you noticed what was wrong, how did you do it right when, when you did it?
[00:11:44] Speaker C: Yeah, so I have, like you said, I have five. Five. I'm under construction on a big one in Vegas that'll open next month.
I think they will Cash flow next year, somewhere around 10 million in free cash flow. So they're being run well.
I don't have any investors, I don't have any debt.
And so we, we open them using In Kind as a funding mechanism. In Kind doesn't own the restaurants. I own them, but I open them. Not. I mean I love food, I love hospitality, I love owning restaurants. You know, that's, that is true, but I didn't, I didn't necessarily open them. You know, my full time job is running In Kind. In Kind is now the big company Lots of employees. And we're funding this year. I think I've funded 2,600 restaurants so far around the country. So it's a big. It's a big, you know, big job. But I love restaurants. But really the reason I opened them, the first one I opened was because I needed a place to test software and marketing because we, I touched so many restaurants, you know, by funding them. And so I get to see and help a lot of restaurants. So I wanted the ability here in Austin to open a restaurant where we could test different things so that we're not, you know, and then I could Recommend software, marketing, etc. To the restaurants on our network that we serve.
And then I happened to guarantee a lease for another restaurateur and he decided he didn't want to open in Austin. So he said, johan, can you open a restaurant? And I was like, I don't really run restaurants, but okay, you know, I'm on the lease, so I don't really have a choice.
So we opened that restaurant and now I had two. So I really had to kind of build out a real management team for the restaurant group. And there was another group called ETA last year, actually earlier this year, 2024, that in kind had funded and it went into bankruptcy.
And we ended up, I personally bought it out of bankruptcy. And this restaurant team just did a great job. The Scottsdale Etta location was probably doing like seven and a half million in revenue when we took it over. We closed it, we put about 2 million into a remodel. It opened it a couple of months ago. It's on track to do 16 million a year. You know, so we were able to use all the learnings from working with so many restaurants and running our own restaurants and social media, etc, to really drive more top line revenue to the restaurants. And that's why I do it now is because the more that I operate and own, the more I can learn, which I can then pass back to all the restaurants that we fund to, you know, increase their top line revenue and then hopefully help with some of that bottom line too.
[00:14:35] Speaker B: Yeah, for sure. Okay, so you said you financed your own restaurants through In Kind. I think that's the perfect segue to talk about what in kind is. And I'll.
[00:14:44] Speaker A: And I'll.
[00:14:45] Speaker B: I'll do my little preamble here by saying I get asked a lot about in kind and I have been asked a lot about in kind over the last six months.
So I've appreciated the relationship that we've built over the last Little while, listeners of the show will know that in kind is one of the sponsors of this podcast, helps make this show possible.
But I carefully select the people who I partner with on this show. There's nobody who's accidentally a sponsor on the show, because I know people look to me, look to this show, the trust that I've built with them, and they ask me, what is this thing? Not in my words, in your words, what is. What is in kind.
[00:15:28] Speaker C: Yeah. And, Chip, I'll just first say we're excited that we sponsor your show, because we don't actually sponsor a lot of things, and there's a lot of companies out there that, you know, want to get their brand out and put their name on a bunch of things. For us, it's all about financial sustainability for the restaurant owners. And I think that that's what you do a great job on your show with your membership, etc, is really teaching restaurateurs how to make a profit. And therefore, it's financially sustainable, Right? And that has to be financial sustainability in the restaurant industry. The National Restaurant association publishes failure rates of restaurants. And it's crazy. You know, in the first year, they say 30% of restaurants fail, right? Years like 4, 5, and 6, it's, you know, 70, 80%. Right? It's. And that's not. That's not fair. It's a lot of jobs that are lost in the restaurant industry. We employ millions and millions of people. You know, we pay livable wages, right? Like, and. And it's. And it's very, very hard and unfair. And so I appreciate what you're doing, Chip, appreciate the advice you're giving the community, because ultimately, that's what we have to do. We have to create a restaurant community that's financially sustainable. And.
And very specifically, I mean, it means the owners make money, the people working there make money, right? Like, and so what we. I was running this incubator, and when I was continuing to invest in restaurants in the traditional way, and what I realized was from owning my own restaurant, I knew the value of. Of food, right? Like, the glass of wine that I charge $20 for, I pay $5, right, to pour.
And. And so I thought, okay, there's got to be something here. And restaurants have been doing bartering forever, right? Like, if you're H Vac guy, we're willing to take a free dinner. Or, you know, rather than charging you to fix the H Vac, you're like, great.
[00:17:19] Speaker B: We do it all in trade.
[00:17:21] Speaker C: All in trade, absolutely. And so in kind comes from the word the phrase payment in kind, which is trade like you just said.
And so that's what we do. What we do is we give a restaurant money, the restaurant doesn't have to pay us back. We don't take ownership, we don't take, we don't take revenue that you're going to get from customers. And you know, we're not taking money from your credit card swipes, etc. What we're doing is we're underwriting a restaurant. We're looking at, okay, how good is the food, how good is the hospitality?
We have now 2 million people on the consumers on the in kind network. We know what they like, we know what cities they're in and we can say, okay, we can send in X number of dollars worth of people to come eat at this restaurant each month. And we, and we underwrite to okay, how much credit do we want to buy in that restaurant? Might be 12 months of worth of credit, it might be 36 months. If it's a big group and we give the restaurant cash up front which they can use to open, they can use to grow, they can use to pay down debt, they can use to make a distribution to investors.
As long as it somehow increases the amount of money that they're going to put in their pocket at the end of the day, then we're happy to fund. It has to be a high quality restaurant. So you know, we look at a lot of reviews, we, I try to eat the food as much as I can.
Now it's become harder.
But as we funding, I think last month we funded 450 restaurants. So but and really measure. It's a lot of dinners.
[00:18:52] Speaker B: It's a lot of dinners in 30. In 30 days.
[00:18:56] Speaker C: Yeah. I was in LA and it was three dinners and a nightclub every night. And I was like, even, I can't, even I can't do this.
[00:19:04] Speaker B: But too old. Too old for that.
[00:19:06] Speaker C: Too old, yes. And that's, and that's how we do it. So we basically underwrite, we say how much credit in food and beverage credit we prepay for that from the restaurant and then we put them on our app and we have 2 million people on our app that we send into the restaurants that eat there.
We try, you know, again, it's all about financial sustainability. So sometimes restaurants say, well, I want more money. And I say, well, I can't give you more money because then I have to send in more customers. And if half your restaurant is paying within kind, then you're going to go out of business because you're not going to have the cash. Right. So we try to.
[00:19:42] Speaker B: Sure.
[00:19:43] Speaker C: The cash flow. Yeah. So we try to limit, you know, because you've used that money to do something, you've opened, you've bought a wine program, you've done something.
And so we try to limit the number of guests that come in every day.
We were very patient in the sense that everything that we do is about how do you make it so that the restaurant doesn't close? Because what I own is food and beverage credit in the restaurant. So the restaurant closes, then I can't sell that credit, so I lose my money.
And then the more that we can do to help build the brand of the restaurant, social media, etc. Then it's easier for me to sell credit in that restaurant. Right. Because people know about it and they want to go into it. And then. And so we do a lot to help the restaurants not close and then we do a lot to help the restaurants, you know, brand wise. And I think just coming on the platform probably helps because when you open up the In Kind app, every restaurant around you is going to be a good restaurant. And so because we're very selective about who we put on, it has to be a good restaurant. And so. So that consumers trust it. Right. So that consumers, when they open up the app and they want to go eat Indian food. I did this in New York the other day I was in New York just by myself and I was like, I want Indian food. So I opened up In Kind app, I went to the closest Indian restaurant and it was delicious. It was actually a phenomenal restaurant. And the couple next to me also had discovered the restaurant through the app. Right. So in order to maintain the customer trust, the consumer trust, we only put great restaurants on. And so great restaurants are happy to join the platform because they're among their peers.
[00:21:20] Speaker A: So In Kind is the largest and only dual sided app based marketplace offering low cost capital investment for restaurants paired.
[00:21:30] Speaker B: With exclusive dining rewards for restaurant goers.
[00:21:34] Speaker A: To date, In Kind has provided over $200 million in capital, giving restaurant operators alternative funding anywhere from 10,000 to to $10 million to its over 1 million users. In kind is a free app to.
[00:21:48] Speaker B: Pay your restaurant tab and earn rewards while dining out to the over 1800.
[00:21:52] Speaker A: US restaurant owners who've been funded by In Kind. It's the source of capital that takes.
[00:21:58] Speaker B: A lot of the pain out of.
[00:21:59] Speaker A: Starting and running a restaurant, ultimately helping their dreams come true and showing that accessing capital for your restaurant does not have to require paying back lenders splitting.
[00:22:09] Speaker B: Profits with investors or pledging your assets. Enjoy 15% back at thousands of restaurants.
[00:22:15] Speaker A: And access exclusive dining perks and offers by downloading the In Kind app.
[00:22:19] Speaker B: You do
[email protected] or of course, you can just visit www.inkind.com to see how.
[00:22:30] Speaker A: In Kind can benefit you as a restaurant owner and operator. Restaurant strategy listeners can redeem a special offer by visiting. This is a special URL. Listen in kind.vip/restaurant strategy again, in kind.vip/restataurant strategy. And yes, that link will be in the show Notes.
[00:22:52] Speaker B: One of the things that I talk about, I wrote a book, it's called the Restaurant Marketing Mindset. I talk a lot about.
Not so much tactical, right? Because tactics are going to age out, you know, six months later, a year later, by the time it goes to print. But I was trying to introduce a lot of, like, strategic approaches. Mindset shifts frameworks. One of the things that I talk about a lot is the simplicity of marketing restaurants because it is not easy, but there's something simple about it, right? We need to focus on customer acquisition. How do we get new people in the front door? We need to focus on retention. So how do we get people to come back? And then what I call evangelism, which is word of mouth. What do we do to put our thumb on the scale and make it so that people can't help but go rave about their experience, whether that's on Google or Yelp, whether that's texting their mom a picture, the whatever it is. And it's as simple as that. What are we going to do to get people in? What do we do to get people back? What do we do to get, you know, people talking? And at every step of the way, I want to put my thumb on the scale and I want to understand that channels exist to help me accomplish those goals. It drives me crazy is when I ask independent restaurant owners, tell me about your marketing and they just start listing off all the stuff they do, right? Same thing, what an agency owner does, right? You say, hey, well, what do you do? Well, we did this and this and this. They just tell you all the stuff they do rather than all the things that they accomplished. And I said, you know, the shift I try and help my clients with is saying, let's yeah, there's stuff you need to do, but let's make sure we tie that to a goal. Because the stuff either helped you achieve your goal or it didn't.
[00:24:17] Speaker A: If it did help you achieve the.
[00:24:18] Speaker B: Goal, let's Double down, do more of it. Reallocate resources to the thing that we know is working. And if it doesn't work, then scrap it. Go back to the drawing board as.
[00:24:26] Speaker A: You'Re talking about it.
[00:24:27] Speaker B: One of the things that we've talked about with the members of my mastermind that I run is I said, explain to me the point of in kind. And I said, you have to understand it is not only a funding channel, but it's an acquisition channel in your marketing. Is that to your point? People are going in, they trust the slate of restaurants that are in the app. It is a marketplace of sorts. They're going, okay, I don't know this town or I don't know this neighborhood. This is what I'm in the mood for. And I've learned to trust everybody.
[00:24:54] Speaker A: Everybody here is vetted.
[00:24:55] Speaker B: Everybody here is of a certain quality. So let me pick something in this app which is not always the case when you go to Google, not always the case when you go to open table. Right. OpenTable's A Table Management software. If anybody wants the table management software, they're going to be listed within that marketplace. So this idea of discoverability and purchase intent, which we, which we are finally now talking about in our industry, it's not just about being listed in places, but listed being listed in places where people are actually ready to make a decision, where people are actually ready to.
To click and take action and generate revenue. So it dawns on me this, the. That the marketplace you've built really helps from a marketing standpoint as well when it comes to discoverability.
[00:25:40] Speaker C: Yeah. And that's the key. That's exactly the key chip is it has to be.
You said acquisition, retention, like.
But what's so cool about my job is I get to interact with, you know, very successful restaurateurs all the time, and then I can learn from them, I can implement them in my own restaurants. And I can also then hopefully, you know, teach or give that advice to other restaurants on our platform. And I think that you're absolutely right. Tactics vary. Right. Depending on the type of restaurant where you are. Right. There's better ways in, to acquire in. In Austin in a vibe dining spot, you know, for us then, you know, in a more rural area where, you know, like there's acquisition is different.
We. So what's, what's cool is what we do is we look at in our restaurants, okay, who's like us? How are they acquiring customers? You know, and then we actually, we go and talk to them and we say, how do you Acquire customers, and we do that. So I would encourage, you know, your guests to do that. On the retention side, chef Michael Mina, he told me this years ago. He said, the only metric I care about in the first 90 days of my restaurant opening happening is repeat visits. That's it. It's like everything else you can, you can solve for, but it's how do you get your customers to come back in the first 90 days? And he said, I can look at the percent of repeat visits and say, if this is going to be a successful restaurant for the next 10 years. Right. And yeah, I agree. Totally agree.
[00:27:06] Speaker B: We talk a lot about the number one KPI, at least in the year 2024, 2025. Number one KPI I care about is list growth, simply because that means if they're on our list, they've opted in for something. They've ordered from us online, they've booked a reservation, they've joined our loyalty program. Anybody who's on our list is pretty much a customer. That not only the size of our list, but the growth metric, how many new subscribers are we netting each month? And understanding that growth, I completely agree because that has everything to do with customer retention. I say retention beats out acquisition every step of the way. And I think of it like a, like a flywheel, right? So we're going to get people in the front door. It's hard to do it. It's expensive to do it. It's time consuming to do it. So if we're spending time to get people in, then we better know they're going to hit a trip wire that's going to get them to come back. We better know they're going to hit a tripwire to go spread the word. When you talk about Jose Andres, I talk about him all the time. A couple years ago, I was out at bar and restaurant Expo. I was giving a talk out there. I was at the Sahara. That's where they put me up. Jose Andres has a restaurant, right? Bazaar is in the ground floor there and he's got his cocktails right. The floral cloud is this riff on of the aviation. And not only did someone create this drink, but someone had the presence of mind to coach the bartender in a certain way, or she had the presence of mind to do it herself. But my guess is they were trained and coached this way, that it's a drink right, where you, you know, you sort of put a cloud on top of it and the cloud sort of dances over top the glass like an inch above the liquid for 30 seconds, 60 seconds. Something like that. But as the, as the carafe comes out with the cloud, it's oohs and ahs. Everybody at the bar is paying attention or everybody in the dining room. That, number one, somebody conceived of a drink that was remarkable. And now you can say, okay, it's Vegas and everything has to be over the top. But this drink was invented in Washington D.C. 15 years ago. Like the dude knew what he's doing even back then, right? But that somebody created a drink that would get oohs and ahhs.
[00:29:15] Speaker A: And then the bartender and I didn't.
[00:29:17] Speaker B: Know, I didn't know that this was the drink I ordered. It's just, I like aviations. This is a riff on the aviation. I said, I'll do that. She comes over and she says, oh, you might want to get out your camera and film this. Everybody always loves to film it. And she sort of half rolled her eyes, but I knew what she was doing. She didn't know who I was or that this is like the reason I live, I live for this thing. And I was like, oh, this girl doesn't even get it. Like she doesn't even know that. This is like the perfect, perfect thing to say to me. And so there I did. I pulled out my phone and took a little video of it and it was impressive. And then I posted it and then I texted it to my wife. And you know, that's how we get ourselves talked about, right? And that stuff doesn't happen by accident. We have to put that thing into place and it's customer. And so it goes back to those trip wires. We need to make sure that everybody, new person who comes in is going to take a video or a photo or is going to leave a review, is going to tell their sister, their mom, their spouse, whatever, right? And everyone who comes in is definitely going to get invited back that there's a tripwire in place that ensures. Hey man, we're really good at getting 60 or 70% of our first time diners back in the first 90 days of their, of their, you know, of their first visit. Like, that's huge. Huge.
[00:30:30] Speaker C: Yeah, I love that cocktail. Eventually at Oeml in dc, which we used to go to all the time when I lived there, and you're right, in our restaurants today.
I opened a restaurant here in Austin in February and we were hoping it would do like 4 to 500,000amonth. It's doing probably on average a million a month in revenue. It's doing really well. And the number one driver and actually probably retention Tool is our. Is our cocktails. The. Our cocktail beverage person, she's amazing. And when we first sat down pre opening, she showed me some cocktails and I said, you know, the, the thing that I care the most about is are people gonna pull out their phone and take a video of this cocktail? Right. If you can design that, then.
And, and it takes, you know, it takes a little more labor, it takes a little bit more thought, but the amount of free marketing that we get from our cocktails is.
[00:31:28] Speaker B: Yeah, it's putting your thumb on the scale. I talk about this all the time, right? And there's a thousand examples I can give, from Jose Andreas and the Floral Cloud, Those. Those cloud cocktails at his place to the, you know, to the beautiful grill setup at Bazaar. You know, I can talk about Alinea and the helium filled sugar balloons and the table dessert. I could talk about the black tap milkshakes. We could talk about David Burke and the bacon on a clothesline. We could.
[00:31:53] Speaker A: I mean, I give.
[00:31:54] Speaker B: I mean, there's a thousand of these people could say, could you give me more? I'll just keep giving you more. There are tons of them out there. It's Hard Rock Cafe. And all the memorabilia, it's Planet Hollywood. And all the movie memorabilia that was around the place. Like they knew people were gonna walk.
[00:32:08] Speaker A: Around and take a picture next to.
[00:32:09] Speaker B: You know, this is Schwarzenegger's leather jacket he wore in Terminator. Like, somebody who loves that movie is gonna take a picture with that and gonna show their friends and all that. These guys were thinking about this 30 years ago. They understand that they have to get themselves talked about. And people don't talk about average things. They talk about remarkable things. Seth Godin talks about it, right? Nobody talks about a cow, but after a while, if you see a purple cow, you're like, yeah, I'm gonna tell somebody about the purple cow. It's the best book on marketing that exists. And so we talk about that a lot. I say, hey, what's your signature? What gets photographed all the time? You know, if there's one thing that people can't miss because they're gonna take a picture of it, what is it? And the people who like, well, I mean, I don't know, it's like, I need six ideas by next week like that. It's just nowadays we're a visual.
[00:32:54] Speaker C: We're.
[00:32:54] Speaker B: We're a visual world now, and we eat with our eyes first. And if people don't see it, they won't think of it. Telling me about it isn't isn't enough. You have to say you got to see it to believe it. Like, you won't believe it. Right. When you get David Burke's bacon on a clothesline and the bacon's dripping on the pickles underneath, and they. And they singe the rosemary sprig, you smell it. Like, I'm sorry, rosemary and like, fresh scorched bacon. Like, it's. It's a no brainer.
[00:33:24] Speaker A: You just have to see it, you.
[00:33:25] Speaker B: Have to smell it, you have to taste it to believe it. And me telling you about it isn't going to make it. When I say, okay, well, we do this bacon, but we put it on a clothesline, people are going, okay, but you see it go through the dining room. You're like, oh, my God, we got to get one of those. Like, just bring one of those for the center of the table. It's like. It's a. It's a no brainer.
[00:33:42] Speaker C: Absolutely. Yeah. And those are those moments that, That I think great restaurateurs understand and use it as a way. Exactly right. You need something unusual, something that's different. And people love taking photos and showing off that they went to something that's different. We. We have these amazing espresso martinis that they actually bake fresh croissants, and then they infuse croissants in Alexan with vodka. They strain it, and they make these espresso martinis, and they have this, like, foam on top, and they put some little sprinkle of something, and we sell hundreds a night. Hundreds. And we're not a huge restaurant in here in Austin. And I think one month we did 280,000 just in cocktail sales, which, you know the margin on cocktails, right? That's.
[00:34:30] Speaker B: Yes, I do.
[00:34:31] Speaker C: That's a lot.
[00:34:33] Speaker B: I do. I know. It's 100%. 100%. It's.
It's. It's so, so important that. So here we're talking about acquisition, and yet I think we both agree that retention and sort of word of mouth evangelism trumps it. Not saying we don't need new people, because we do. We need a lot of new people, but we need to make sure they all come back.
Talk to me, because I know your time is limited. I want to be really respectful of your time.
Somebody says, hey, this is interesting.
[00:35:02] Speaker A: Who is this for?
[00:35:03] Speaker B: How do they begin having a conversation to see if in kind is sort of right for them?
[00:35:08] Speaker C: Yeah, we're. This. This year and next year we're pretty. We're growing in in certain markets. So because from a consumer perspective, you get the most discoverability if you have a lot of options, good options around you.
So we're not, you know, there's a lot of great restaurants in many, many cities around the country, but we're pretty focused on, on certain markets. So I would say if you're a, if you're a restaurateur and you want to, you know, get on in kind, best thing to do is actually just download the app, go to the app store, downloading kind and you can see, you know, other restaurants around me. And if there are restaurants around you, then there's a good chance that we are funding restaurants around you and you can go to. Best is to go to one of those restaurateurs and ask them, hey, how's this in kind thing? How do you like it? If so, you know, can you put us in touch? Yeah, you can always go to in kind capital, I think.com or in kind.com and get in touch that way.
It's all about high quality. Could be a high quality bagel store. We have black seed bagel in Manhattan which is amazing bagels. You know, it could be coffee shops. We have Oman, Bluestone, Lane Gregory's, like a bunch of coffee shops. Or you know, our sweet spot is higher end, sit down, takes reservation, sells alcohol.
And yeah, we love, we love, love funding restaurants. We love it when my favorite thing is to go and have a meal with the owner and you know, get to talk to them about their history. And the people are so passionate and excited about owning their restaurants and it's so much work and we can kind of help them actually make more money. Right. And so yeah, love, love for anybody to, to reach out, you know, especially if you're growing and, and we, we don't, we don't have a product yet to put people on the platform who we haven't funded.
Stay tuned. Probably in the next 12 to 18 months we'll do that. But for today, the only way to get onto the in kind app is if we fund you.
[00:37:09] Speaker B: Let's do that. Okay, so first step is number one, download the app and look to see if there are other restaurants in market that are being funded. That's a good way to tell that if that you're funding in that thing. Second step. And I love that you do this. I do this all the time.
Find restaurants that are in your market that are using it and go knock up on the door or call or send an email and say, hey, can you tell me about your Experience using in kind.
I think that's always important. So I run this mastermind with, you know, hundreds of restaurant owners from all over the country. I was like, hey, listen, we're all part of this, and we're from all different markets, but there's nothing to say that you can't go start your own. Right. That network effect, you know, just relying on each other and using each other is so, so huge. Okay, so download the app, go start talking to people who are on the app and find their experience. And then if you feel like this is the. What you want to do, we'll put the link in the show notes to make sure that people know how to start that process to. To look into.
[00:38:05] Speaker C: Yeah, and if we don't, our sales team would. Would kick me for not saying this. We don't have restaurants in your market still. Go to the website, put your name down. Because then as we launch more markets, you know, we're looking to reach out to those restaurateurs that, you know, are interested in being on the app. And the goal is you want to have good amount of choices in a market, you know, for the consumer when you launch that market.
[00:38:28] Speaker B: Yeah, for sure. I love it. I've loved this conversation. When I ask you one more question, aside from everything we've talked about, you know, with. In kind and all that, as a restaurant owner, as an operator, as somebody who ran this incubator and has talked to really smart people and learned things and now teaches people and all that, what would you say is the number one thing, like today that somebody could do to increase the profitability of their. Of their restaurant?
[00:38:55] Speaker C: It's a hard one.
You know, revenue.
Revenue is a savior for. For a lot of other bad practices or ways that could be improved. You know, I think if you, if you don't have the revenue, you know, optimizing your costs is important, but it's still hard to get to where you need to go. So I think to what you said, Chip, the. Probably the most important is the acquisition. Making sure your guests have a great experience and come back. That's the number one.
It's so much more expensive, like you said, to acquire customers than it is to make sure that a customer who's there has a great experience and comes back and tells other people about it. That word of mouth that is that flywheel.
So it's hard because when. When you're not making money. And I, I've been there. I understand this. You try to cut costs, and, and sometimes when you cut costs, it's just you do it in a way that doesn't allow you to retain customers. Right. And. And that's. That's very challenging.
[00:39:58] Speaker B: Well, you don't want to degrade. You don't want to degrade the experience of the product that you're. That you're. That you're providing. I agree that.
[00:40:05] Speaker C: And I think, you know, I think restaurateurs are.
They're doing it because they want to provide great hospitality. They want to provide great experiences.
So I would say really lean into that. And I love funding restaurants that maybe aren't making a lot of profit. Actually don't care about the profit of a restaurant long term. I feel like if the food and the hospitality is good, you're going to retain customers and you'll increase your profit margins. So today, if you're profiting at 6%, but you need to invest, you know, $50,000 into your cocktail program so that you can then drive more acquisition and retention and word of mouth like that. I love funding things like that. Right. Because I think that's ultimately how you increase your revenue and then increase your profit.
[00:40:52] Speaker B: I love it. Johan, I really appreciate this conversation. Now, I don't know, we'll probably have you back because I think. I think you're a really smart guy, and I like putting really smart people in front of. In front of this audience. Thank you for taking the time. Any last words of wisdom, anything else before we kick you out of here?
[00:41:07] Speaker C: No. Thank you. Thank you. Thank you, Chip, for what you're doing and helping restaurants. And thank you to all the restaurant owners out there listening to this. I. I feel you. You know, we're there till very late every day, and you have to be great at everything. I feel like. I think a restaurant owner probably can do anything. I think, like, the next President of the United States needs to be a restaurant owner. You know, like, restaurant owners are amazing. Yeah. A lot of hats.
Thank you for all your hard work, guys, and ladies, and stick with it.
And we're employing a lot of people, and we're really changing. We feed people, we build community. Right. It's really, really awesome. We just also need to make money ourselves.
[00:41:48] Speaker B: Do you know there's, like, all these crazy statistics that say, like, nine out of 10Americans say their first job was in hospitality, restaurant space. Like. Like, that's my first job. My second job. And I didn't necessarily do this my whole life, but, like, my first early jobs. Like, it's so easy. The barrier of entry is so low. It's so easy for People to get in and see and be a part of what we. Of what we do and then see if maybe they can build a career. So there's a lot we do for not just this, you know, this industry, but, like, our communities and all of that, you know, like, what would people do on a date night if they couldn't do dinner and a movie? Like, just going to the movie and going back home is sort of lame. Like, you go to a movie and then go talk about it over dinner or have it, you know, over a drink, or you go get dinner and then you go see a show to get. Like, that's what. That's what we do. Like, dinner and a movie is a date out. Like, we're half of how people get to know each other and build their relationships. And I can go on and on. I mean, I get really moved by the fact that, like, I don't know when it happened, but somewhere along the way, and it wasn't that long ago, we decided that the way we would celebrate birthdays and anniversaries and promotions and the way we would woo clients is over dinner. Like, dinner is what we do. We go out for a nice meal to celebrate something big. And there's lots of other things we could do.
[00:43:06] Speaker A: We could go on a trip, we.
[00:43:07] Speaker B: Could go on a hike, we could go on a bike ride. But somewhere along the way, somebody says, no, let's go sit in a beautiful room and have a lot of other people just wait on us hand and foot. And an entire industry has been born not that long ago in our history.
[00:43:21] Speaker C: And I know we're out of time, but macro trends support exactly what you're talking about. And people are spending more dining out than on groceries, right? And you look at other forms of entertainment, movies. I don't know the numbers, but I assume movie sales are down because people are watching movies from home. Restaurant sales are up, right? And I think as. As AI produces a lot of other job opportunities. You know, like, if you're an accountant or a lawyer, you know, like, be careful, because I probably can, you know, do this for cheaper than you can. It's really, really, really hard to replace hospitality, you know, with AI And I think so. I actually think. I think the restaurant industry has a very bright future. I think that, you know, you got to totally agree.
[00:44:04] Speaker B: I think as we go, I mean, we learned this about the pandemic, right, as people go into their own little corners. And I went from having a business that existed out in the world, going into restaurants and all that. Now my restaurant is in and or now my business is in an office working with restaurant owners. Right? My world got smaller because I work out of this office and got bigger. Now I went from working with 14 clients to working with 157. I think as of this morning, like, like my, my world has gotten smaller and much bigger and I think that's a lot of the world. And any excuse I can do to get out of this office and get out into the world and be a, be a part of it is, is key. Listen, I don't want to take any more of your time. I appreciate your time. Thank you for, thank you for building this. Thank you for sharing your story. Thank you for sharing some insights with the people today. Enjoy the rest of your day.
[00:44:51] Speaker C: Thank you, Chip. Really appreciate you.
[00:44:54] Speaker B: So once again I want to thank.
[00:44:55] Speaker A: Johan for taking time out of his day to chat. I want to thank in kind for their support of this podcast. Like all of our sponsors, I have reached out to them. Every sponsor is cherry picked for this show because they're products that I already love to recommend and we're just formalizing the relationship, right? It's a chance for them to say in their own words who they are, what they do, why they matter and.
[00:45:17] Speaker B: Why you should care.
[00:45:18] Speaker A: The link to Access in kind to go learn more about it is in the show notes. So go do that. Two other quick asks, number one, if you get any sort of value from this episode or any other episode, go leave us a five star rating on Apple podcast. Just let other people know what you get out of it, why you listen and why you think they should listen. And then finally again, remember, I run something called the P3 mastermind. It's an incredible community of owners and operators from all over the world. These are not green operators. They are established, accomplished restaurants. The average restaurant is like eight years old and does two and a half million dollars a year. So these aren't beginners. These are accomplished, very, very qualified, capable restaurateurs who all raise their hand, all come together to say, hey, I know a lot, but I don't pretend to know everything. There has to be a room. There has to be a place you go in your life where you can ask the dumb questions, where you can level up, right? And I know in your restaurant everybody looks to you for answers, right? So you need a room where you.
[00:46:15] Speaker B: Can look for answers.
[00:46:16] Speaker A: That's what the P3 mastermind is all about. If you want to have a conversation about it, that conversation is totally free. There is no pressure to join. We bring about 15 to 20 new members into the program every single month. When I tell you that this community is growing, it is thriving, I don't need any more business. I love getting more business. I love bringing more people into the program. We've grown from one to two to three now to four full groups in the P3 mastermind. If you want to learn more about the community, if you want to learn more about what we do and how we do it, you set up a call restaurantstrategypodcast.com schedule. You'll chat with me or someone from my team. You'll get to know more about what the program is about. We'll get to learn more about you and your restaurant. And we can see if we can help. If you're ready to level up, make more money from your business, increase the profitability of your business, set up a call to learn about the P3 mastermind. RestaurantStrategyPodcast.com schedule Guys, I appreciate you being here each and every week. I know two new episodes every week and I know you guys are hanging on every word and I appreciate it. Appreciate the time you give me. I appreciate the time you give your business. I know you care. I care. I appreciate you being here. Thanks so much. And I will see you next time.
